What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-12-19 compared with 2021-12-17 · 82 added, 109 removed, 326 unchanged (37% of the section changed)

3 unchanged sentences

References herein to fiscal year refer to our fiscal years ended or ending October 31.

We design, build, market, sell, and arrange financing for an array of luxury residential single-family detached home, attached home, master-planned resort-style golf, and urban low-, mid-, and high-rise communities.

We design, build, market, sell, and arrange financing for an array of luxury residential single-family detached home, attached home, master-planned, and urban low-, mid-, and high-rise communities.

This is done principally on land we develop and improve, as we continue to pursue our strategy of broadening our product lines, price points and geographic footprint.

We cater to luxury first-time, move-up, empty-nester, active-adult and second-home buyers in the United States (“Traditional Home Building Product”), as well as urban and suburban renters under the brand names Toll Brothers Apartment Living ® and Toll Brothers Campus Living ® .

We also design, build, market, and sell urban low-, mid-, and high-rise condominiums through Toll Brothers City Living ® (“City Living”).

We cater to luxury first-time, move-up, empty-nester, active-adult and second-home buyers in the United States, as well as urban and suburban renters under the brand names Toll Brothers Apartment Living ® and Toll Brothers Campus Living ® .

We also design, build, market, and sell high-density, high-rise urban luxury condominiums with third-party joint venture partners through Toll Brothers City Living ® (“City Living”).

At October 31, 2022, we were operating in 24 states and in the District of Columbia.

3 unchanged sentences

We had a backlog of $8.87 billion (8,098 homes) at October 31, 2022;

we expect to deliver over 90% of these homes in fiscal 2022.

we expect to deliver approximately 90% of these homes in fiscal 2023.

We operate our own architectural, engineering, mortgage, title, land development, insurance, smart home technology, and landscaping subsidiaries.

1 unchanged sentence

We are developing several land parcels for master-planned communities in which we intend to build homes on a portion of the lots and sell the remaining lots to other builders.

Two of these master-planned communities are being developed 100% by us, and the remaining communities are being developed through joint ventures with other builders or financial partners.

The majority of these master-planned communities are being developed through joint ventures with other builders or financial partners, with one being developed 100% by us.

In addition to our residential for-sale business, we also develop and operate urban and suburban for-rent apartment communities primarily through joint ventures.

These projects are located in various metropolitan areas throughout the country and are being operated or developed, (or we expect will be developed) with partners under the brand names Toll Brothers Apartment Living ® and Toll Brothers Campus Living ® .

These projects are located in various metropolitan areas throughout the country and are generally being operated or developed (or we expect will be developed) with partners under the brand names Toll Brothers Apartment Living ® and Toll Brothers Campus Living ® .

At October 31, 2022, we or joint ventures in which we have an interest, controlled 73 land parcels as for-rent apartment projects containing approximately 25,000 planned units.

1 unchanged sentence

Our Communities and Homes

Our traditional home building communities are generally located in affluent suburban areas near major transit hubs and highways that provide access to employment and urban centers.

Our home building communities are generally located in affluent suburban areas near major transit hubs and highways that provide access to employment and urban centers.

They are generally located on land we have either acquired and developed or acquired fully approved and, in some cases, improved.

Our City Living division is currently selling units out of urban mid- and high-rise communities in Hoboken and Jersey City, New Jersey and New York City, New York, and also has planned developments in New York City, New York;

Northern New Jersey;

Philadelphia, Pennsylvania;

a suburb of Washington, D.C.;

Los Angeles, California;

and Seattle, Washington.

At October 31, 2022, we were operating in the following major suburban and urban residential markets:

2 unchanged sentences

• Westchester and Dutchess Counties, New York

• New York City

• Long Island, New York

• New York metropolitan area

• Central and northern New Jersey

13 unchanged sentences

• Las Vegas and Reno, Nevada metropolitan areas

• Boise, Idaho, metropolitan area

• Boise and Coeur d’Alene, Idaho metropolitan areas

• Salt Lake City, Utah metropolitan area and St.

13 unchanged sentences

We believe that our added attention to detail gives each community a diversified neighborhood appearance that enhances home values.

Our traditional attached home communities generally offer one- to four-story homes, provide for select exterior options, and often include commonly owned recreational facilities, such as clubhouses, playing fields, swimming pools, and tennis courts.

Our attached home communities generally offer one- to four-story homes, provide for select exterior options, and often include commonly owned recreational facilities, such as clubhouses, playing fields, swimming pools, and tennis courts.

We are continuously developing new designs to replace or augment existing ones to ensure that our homes reflect current consumer tastes.

1 unchanged sentence

We use our own architectural staff and also engage unaffiliated architectural firms to develop new designs.

In our Traditional Home Building Product communities, a wide selection of options is available to home buyers for additional charges.

The number and complexity of options in our Traditional Home Building Product typically increase with the size and

base sales price of our homes.

A wide selection of structural and finishing options are available to our home buyers for additional charges.

The number and complexity of options available typically increase with the size and base sales price of our homes.

Major options include home offices, fitness rooms, multi-generational living suites, finished basements, and spacious indoor/outdoor living areas.

1 unchanged sentence

We market our high-quality homes to both upscale luxury and affordable luxury home buyers.

Our luxury homes are marketed primarily to buyers who generally have previously owned a home and who are seeking to buy a larger or more desirable home — the so-called “move-up” market.

Our luxury homes are marketed primarily to buyers who generally have previously owned a home and who are seeking to buy a larger or more desirable home

— the so-called “move-up” market.

Our affordable luxury homes are marketed primarily to more affluent first-time buyers.

7 unchanged sentences

With the millennial generation in its prime family formation years, we also continue to focus on this group with our core suburban homes, affordable luxury offerings, urban condominiums and luxury rental apartment products.

Through our City Living brand, we have developed and are developing, on our own or through joint ventures with third parties, a number of high-density, low-, mid-, and high-rise urban luxury communities to serve affluent move-up families, empty-nesters, and young professionals who are seeking to live in or close to major cities.

A majority of our City Living communities are high-rise projects and take an extended period of time to construct.

Through our City Living brand, with third-party joint venture partners, we currently are developing a number of high-density, high-rise urban luxury communities to serve affluent move-up families, empty-nesters, and young professionals who are seeking to live in or close to major cities.

These City Living communities are high-rise condominiums and take an extended period of time to construct.

We generally start selling homes in these communities after construction has commenced.

1 unchanged sentence

Once construction has been completed, the homes in backlog in these communities are generally delivered quickly.

Currently, we anticipate that the majority of our future communities in our City Living division will be developed through joint ventures with third parties.

Because of the larger upfront costs and longer development time periods associated with high-rise projects, we are developing, and expect to continue to, develop all future City Living communities through joint ventures with third parties.

We believe that the demographics supporting the luxury first-time, move-up, empty-nester, active-adult, affordable luxury and second-home upscale markets will provide us with an opportunity for growth in the future.

3 unchanged sentences

Total number of operating communities Number of selling communities Homes approved Homes closed Homes under contract but not closed (Backlog) Home sites available

Traditional Home Building:

North 81 53 10,155 6,103 1,122 2,930

3 unchanged sentences

Pacific 59 43 5,683 1,910 1,087 2,686

Traditional Home Building 453 338 54,958 22,508 10,289 22,161

City Living 2 2 321 290 13 18

Total 459 348 52,234 21,268 8,098 22,868

2 unchanged sentences

Of our 459 operating communities at October 31, 2022, a total of 348 communities were offering homes for sale;

and the remaining operating communities primarily relate to communities that were sold out but not all homes had been completed and delivered.

with the remaining consisting primarily of sold out communities where not all homes had been completed and delivered.

Of the 348 communities in which homes were being offered for sale at October 31, 2022, a total of 276 were detached home communities and 72 were attached home communities.

At October 31, 2021, we had 866 homes (exclusive of 432 model homes) under construction or completed but not under contract in our traditional communities, of which 458 were affordable luxury homes, 261 were luxury homes, and 147 were active-adult homes.

At October 31, 2021, we had 14 homes (exclusive of model homes) under construction or completed but not under contract in two City Living communities that were wholly owned.

At October 31, 2022, excluding 373 model homes, we had 1,929 homes under construction or completed but not under contract in our communities, of which 998 were affordable luxury homes, 558 were luxury homes, and 373 were active-adult homes.

As a result of the breath of our products and geographic footprint, we have a wide range of base sales prices for our homes.

8 unchanged sentences

the remaining home buyers borrowed approximately 71% of the sales price of the home.

The table below provides the average value of options purchased by our home buyers, including lot premiums, and the value of the options as a percent of the base sales price of the homes purchased in fiscal 2021, 2020, and 2019:

The table below provides the average value of all structural and finishing options purchased by our home buyers, as well as lot premiums, and the value of these options and premiums as a percent of the base sales price of the homes purchased in fiscal 2022, 2021, and 2020:

2022 2021 2020

1 unchanged sentence

Overall $ 190 25.3 % $ 168 23.9 % $ 173 25.5 %

Traditional Home Building Product

Detached $ 215 28.9 % $ 193 28.4 % $ 198 28.8 %

Attached $ 117 15.4 % $ 105 15.3 % $ 98 15.7 %

City Living Product $ 24 1.4 % $ 47 3.8 % $ 31 2.5 %

In general, the ability to purchase a premium lot or customize a home with structural options and interior finishes varies widely across our product lines, which may result in significant variation in the option value as a percentage of base sales price.

For example, our attached homes and City Living condominiums do not offer the opportunity for buyers to add significant structural options to their homes and thus they have a smaller option value as a percentage of base sales price.

For example, our attached homes do not offer the opportunity for buyers to add significant structural options to their homes and thus they have a smaller option value as a percentage of base sales price.

For more information regarding revenues, net contracts signed, income (loss) before income taxes, and assets by segment, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Segments” in Item 7 of this Form 10-K.

As part of our strategy to continue expanding our geographic footprint and product offerings, in fiscal 2021, we acquired substantially all of the assets and operations of StoryBook Homes, LLC (“StoryBook”), a privately-held home builder serving the Las Vegas, Nevada market, for approximately $38.8 million in cash.

As part of our strategy to continue expanding our geographic footprint and product offerings, in fiscal 2022, we acquired substantially all of the assets and operations of a privately-held home builder with operations in San Antonio, Texas for approximately $48.1 million in cash.

The assets acquired, which consisted of 16 communities, were primarily inventory, including approximately 450 home sites owned or controlled through land purchase agreements.

In fiscal 2021, we acquired substantially all of the assets and operations of a privately-held home builder serving the Las Vegas, Nevada market, for approximately $38.8 million in cash.

The assets acquired were primarily inventory for future communities, including approximately 550 home sites owned or controlled through land purchase agreements.

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.

We also acquired substantially all of the assets and operations of Keller Homes, Inc.

(“Keller”), a builder with operations is Colorado Springs, Colorado.

In fiscal 2020, we acquired substantially all of the assets and operations of an urban infill builder with operations in Atlanta, Georgia and Nashville, Tennessee.

We also acquired substantially all of the assets and operations of a builder with operations is Colorado Springs, Colorado.

The aggregate purchase price for these acquisitions was approximately $79.2 million in cash.

The assets acquired were primarily inventory, including approximately 1,100 home sites owned or controlled through land purchase options.

In fiscal 2019, we acquired substantially all of the assets and operations of Sharp Residential, LLC (“Sharp”) and Sabal Homes LLC (“Sabal”), for approximately $92.8 million and $69.6 million, respectively, in cash.

Sharp operates in metropolitan Atlanta, Georgia;

Sabal operates in the Charleston, Greenville, and Myrtle Beach, South Carolina markets.

The assets acquired, were primarily inventory, including approximately 2,550 home sites owned or controlled through land purchase options.

Before entering into an agreement to purchase a land parcel, we complete extensive comparative studies and analyses that assist us in evaluating the acquisition.

These analyses may include soil tests, environmental studies, an evaluation of necessary zoning and other governmental entitlements and extensive market research to evaluate which of our product offerings are appropriate for the market.

In addition to purchasing land parcels outright, we are increasingly attempting to enter into option agreements and other arrangements to defer the acquisition of land until we are closer in time to delivering the completed home to our customer.

We have also entered into several joint ventures with other builders, financial partners, or developers to develop land for the use of the joint venture participants or for sale to third parties.

1 unchanged sentence

Our business is subject to many risks, including risks associated with obtaining the necessary approvals on a property and completing the land improvements on it.

In order to reduce the financial risk associated with land acquisitions and holdings and to more efficiently manage our capital, where practicable, we enter into option agreements (also referred to herein as “land purchase contracts,” “purchase agreements,” or “options”) to purchase land, on a non-recourse basis, thereby limiting our financial exposure to amounts expended in obtaining any necessary governmental approvals, the costs incurred in the planning and design of the community, and, in some cases, some or all of the cost of the option (the “deposit”).

Option agreements enable us to obtain necessary governmental approvals before we acquire title to the land, and allow us to acquire lots over a specified period of time at pre-determined prices.

Option agreements enable us to obtain necessary governmental approvals before we acquire title to the land, and allow us to acquire lots over a specified period of time at contracted prices.

The use of these agreements may increase our overall cost basis in the land that we eventually acquire, but reduces our risk by allowing us to obtain the necessary development approvals before acquiring the land or allowing us to forego or delay the acquisition to a later date.

In prior periods, as approvals were obtained, the value of the purchase agreements and land generally increased;

In prior periods, during the time it took to obtain approvals, the value of the purchase agreements and land generally increased;

however, in any given time period, this may not happen.

We have the ability to extend some of these purchase agreements for varying periods of time, in some cases by making an additional payment and, in other cases, without making any additional payment.

We have the ability to extend some of these purchase agreements for varying periods of time, which in some cases would require an additional payment.

Our purchase agreements are typically subject to numerous conditions, including, but not limited to, the ability to obtain necessary governmental approvals for the proposed community.

2 unchanged sentences

During fiscal 2022 and 2021, we acquired control of approximately 5,700 and 27,700 home sites, respectively, net of options terminated and lots sold.

During fiscal year 2022, we forfeited control of over 9,000 lots subject to land purchase agreements primarily because the planned community no longer met our development criteria.

At October 31, 2022, we controlled approximately 76,000 home sites, as compared to approximately 80,900 home sites at October 31, 2021.

At October 31, 2022 and October 31, 2021, our percentage of optioned versus owned lots was 50% and 50%, respectively.

We are developing several parcels of land for master-planned communities in which we intend to build homes on a portion of the lots and sell the remaining lots to other builders.

Two of these master-planned communities are being developed 100% by us, and the remaining communities are being developed through joint ventures with other builders or financial partners.

We, either alone or in joint venture, are developing several parcels of land for master-planned communities in which we intend to build homes on a portion of the lots, with the remaining lots being sold to other builders.

At October 31, 2022, one of these master-planned communities was wholly owned, while the remaining communities were developed through joint ventures with other builders or financial partners.

At October 31, 2022, our Land Development Joint Ventures owned approximately 24,300 home sites.

At October 31, 2022, we had agreed to acquire 409 home sites and expect to purchase approximately 6,700 additional home sites from several of our Land Development Joint Ventures over a number of years.

Our ability to continue development activities over the long term will depend on, among other things, a suitable economic environment and our continued ability to locate and enter into options or agreements to purchase land, obtain governmental approvals for suitable parcels of land, and consummate the acquisition and complete the development of such land.

The following is a summary of home sites for future communities that we either owned or controlled through options or purchase agreements at October 31, 2021, as distinguished from our operating communities:

Our ability and willingness to continue development activities over the long term will depend on, among other things, a suitable economic environment and our continued ability to locate and enter into options or agreements to purchase land, obtain governmental approvals for suitable parcels of land, and consummate the acquisition and complete the development of such land on acceptable terms.

The following is a summary of home sites for future communities (as distinguished from operating communities) that we either owned or controlled through options or purchase agreements at October 31, 2022:

Number of communities Number of home sites

Traditional Home Building:

North 67 4,953

3 unchanged sentences

Pacific 61 5,360

Traditional Home Building 533 47,696

City Living 7 690

Total 522 45,083

Of the 45,083 planned home sites at October 31, 2022, we owned 13,213 and controlled 31,870 through options and purchase agreements.

At October 31, 2021, the aggregate purchase price of land parcels subject to option and purchase agreements in operating communities and future communities was approximately $4.45 billion (including $10.0 million of land to be acquired from joint ventures in which we have invested).

Of the $4.45 billion of land purchase commitments, we paid or deposited $336.4 million.

At October 31, 2022, the aggregate purchase price of land parcels subject to option and purchase agreements in both operating and future communities was approximately $4.32 billion (including $42.1 million of land to be acquired from joint ventures in which we have invested).

Of the $4.32 billion of land purchase contracts, we paid or deposited $463.5 million.

If we acquire all of these land parcels, we will be required to pay an additional $3.86 billion.

The purchases of these land parcels are expected to occur over the next several years.

We have additional land parcels under option that have been excluded from this aggregate purchase price because we do not believe that we will complete the purchase of these land parcels and no additional funds will be required from us to terminate these contracts.

We have additional land parcels under option that have been excluded from this aggregate

purchase price because we do not believe that we will complete the purchase of these land parcels and no additional funds will be required from us to terminate these contracts.

These option contracts have either been written off or written down to the estimated amount that we expect to recover when the contracts are terminated.

11 unchanged sentences

and staking out individual home sites.

We act as a general contractor for most of our projects.

We act as a general contractor for substantially all of our communities.

Subcontractors perform all home construction and land development work, generally under fixed-price contracts.

We generally have multiple sources for the materials we purchase.

Due to the current strong demand for homes, periodic supply chain disruptions and the constrained availability of certain building products, housing components and construction labor as a result of the pandemic and other factors, the production cycle in many of our markets has elongated.

Due to these supply chain and other challenges, we are routinely monitoring our lot releases

and the pace of new orders to balance sales volume and production capacity.

In recent years, as a result of strong demand for homes following the onset of the COVID-19 pandemic, supply chain disruptions and the constrained availability of certain building products, housing components and construction labor, and municipality-related delays, the production cycle in many of our markets became elongated.

There can be no assurance that these challenges will recede or that cycle times will normalize in the near term.

See “Risk Factors – General Risk Factors” in Item 1A and “Manufacturing/Distribution Facilities” in Item 2 of this Form 10-K.

5 unchanged sentences

Marketing and Sales

We believe that our marketing strategy for our Traditional Home Building Products has enhanced our reputation as a builder and developer of high quality luxury homes.

We believe that our marketing strategy for our homes has enhanced our reputation as a builder and developer of high quality luxury homes.

We believe this reputation results in greater demand for all of our product types.

7 unchanged sentences

Interior merchandising varies among the models and is carefully selected to reflect the lifestyles of prospective buyers.

Visitors to our website, www.TollBrothers.com, can obtain detailed information regarding our communities and homes across the country, take panoramic or video tours of our homes, and design their own homes based upon our available floor plans and options .

We have increasingly focused our marketing efforts to the digital environment for media buying and have adopted a number of virtual tools and techniques to allow our sales personnel to engage in remote interactions with potential customers.

9 unchanged sentences

Cash down payments averaged approximately 8% of the total purchase price of a home at the end of fiscal year 2022.

Between the time that the home buyer signs the non-binding deposit agreement and the binding agreement of sale, which typically takes about three weeks, the home buyer is required to complete a financial questionnaire that gives us the ability to evaluate whether the home buyer has the financial resources necessary to purchase the home.

If we determine that the home buyer is not financially qualified, we will not enter into an agreement of sale with the home buyer.

Between the time that the home buyer signs the non-binding deposit agreement and the binding agreement of sale, which typically takes about three weeks, the home buyer is required to complete a financial questionnaire that allows us to determine whether the home buyer has the financial resources necessary to purchase the home.

If we determine that the home buyer is not financially qualified, we will not enter into an agreement of sale.

During fiscal 2022, 2021, and 2020, our customers signed net contracts for $9.07 billion (8,255 homes), $11.54 billion (12,472 homes), and $8.00 billion (9,932 homes), respectively.

6 unchanged sentences

We believe that our home buyers generally are, and should continue to be, better able to secure mortgages due to their typically lower loan-to-value ratios and attractive credit profiles, as compared to the average home buyer.

Our mortgage subsidiary, TBI Mortgage Company, provides mortgage financing for a portion of our home closings.

Our mortgage subsidiary, Toll Brothers Mortgage Company (“TBMC”), provides mortgage financing for a portion of our home closings.

Our mortgage subsidiary determines whether the home buyer qualifies for the mortgage that the home buyer is seeking based upon information provided by the home buyer and other sources.

3 unchanged sentences

Toll Brothers, Inc.

(a) TBI Mortgage Company

financed settlements*

4 unchanged sentences

2020 8,496 3,782 44.5% $ 1,757.5

* Amounts exclude brokered and referred loans, which amounted to approximately 5.6%, 4.7%, and 4.0% of our home closings in fiscal 2021, 2020, and 2019, respectively.

* Amounts exclude brokered and referred loans, which amounted to 6.5%, 5.6%, and 4.7% of our home closings in fiscal 2022, 2021, and 2020, respectively.

Prior to the actual closing of the home and funding of the mortgage, the home buyer may lock in an interest rate based upon the terms of the commitment.

2 unchanged sentences

Mortgage loans are sold to investors with limited recourse provisions derived from industry-standard representations and warranties in the relevant agreements.

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.

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.

The Company generally does not retain any other continuing interest related to mortgage loans sold in the secondary market.

3 unchanged sentences

Our mortgage subsidiary has commitments from investors to acquire all $856.3 million of these locked-in loans and receivables.

Our home buyers have not locked in the interest rate on the remaining $2.71 billion of mortgage loan commitments as of October 31, 2021.

Our home buyers had not locked in the interest rate on the remaining $2.43 billion of mortgage loan commitments as of October 31, 2022.

We had a backlog of $8.87 billion (8,098 homes) at October 31, 2022;

2 unchanged sentences

Of the 8,098 homes in backlog at October 31, 2022, approximately 90% are expected to be delivered by October 31, 2023.

This delivery estimate is based on current expectations regarding our backlog conversion rate.

Our backlog conversion rate can vary based on a number of factors, including the availability of subcontractors and qualified trades people;

the availability of adequate utility infrastructure and services;

the ability of municipalities to process permits, conduct inspections and take similar actions in a timely manner;

and shortages, delays in availability, or fluctuations in prices of building materials.

See “Risk Factors – Risks Related to Our Business and Industry – Component shortages and increased costs of labor and supplies are beyond our control and can result in delays and increased costs to develop our communities.”

The home building business is highly competitive and fragmented.

6 unchanged sentences

Weather-related events can delay housing starts and closings and increase costs.

See “Risk Factors – Risks Related to Our Business and Industry – Our quarterly operating results may fluctuate

due to the seasonal nature of our business” and “– Adverse weather conditions, natural disasters, and other conditions could disrupt the development of our communities, which could harm our sales and results of operation” in Item 1A of this Form 10-K.

See “Risk Factors – Risks Related to Our Business and Industry – Our quarterly operating results may fluctuate due to the seasonal nature of our business” and “– Adverse weather conditions, natural disasters, and other conditions could disrupt the development of our communities, which could harm our sales and results of operation” in Item 1A of this

Investments in Unconsolidated Entities

1 unchanged sentence

(ii) to develop for-sale homes (“Home Building Joint Ventures”);

(iii) to develop luxury for-rent residential apartments, commercial space and hotels (“Rental Property Joint Ventures”);

and (iv) to invest in distressed loans and real estate and provide financing and land banking for residential builders and developers for the acquisition and development of land and home sites (“Gibraltar Joint Ventures”).

(iii) to develop luxury for-rent residential apartments and single family homes, and commercial space (“Rental Property Joint Ventures”);

and (iv) to provide financing and land banking for residential builders and developers for the acquisition and development of land and home sites (“Gibraltar Joint Ventures”).

At October 31, 2022, we had investments of $852.3 million in these unconsolidated entities and were committed to invest or advance up to an additional $304.3 million to these entities if they require additional funding.

4 unchanged sentences

Some of these Land Development Joint Ventures develop land for the sole use of the venture participants, including us, and others develop land for sale to the joint venture participants and to unrelated builders.

At October 31, 2021, we had approximately $243.8 million invested in our Land Development Joint Ventures and funding commitments of $173.8 million to nine of the Land Development Joint Ventures which will be funded if additional investments in the ventures are required.

At October 31, 2021, seven of these joint ventures had aggregate loan commitments of $422.4 million and outstanding borrowings against these commitments of $328.2 million.

At October 31, 2022, we had $343.3 million invested in our Land Development Joint Ventures and funding commitments of $180.8 million to nine of the Land Development Joint Ventures which will be funded if additional investments in the ventures are required.

At October 31, 2022, ten of these joint ventures had aggregate loan commitments of $557.2 million and outstanding borrowings against these commitments of $444.3 million.

At October 31, 2022, our Land Development Joint Ventures owned approximately 24,300 home sites.

7 unchanged sentences

Rental Property Joint Ventures

As part of our strategy to expand product lines, over the past several years, we acquired control of a number of land parcels to be developed as for-rent apartment projects, including several student housing sites.

As part of our strategy to expand product lines, over the past several years, we acquired control of a number of land parcels intended to be developed as for-rent apartment or single family rental home projects, including several student housing sites.

At October 31, 2022, we had an aggregate of $441.4 million of investments in 41 Rental Property Joint Ventures.

2 unchanged sentences

These projects are located in multiple metropolitan areas throughout the country and are being operated or developed (or we expect will be developed) with partners under the brand names Toll Brothers Apartment Living and Toll Brothers Campus Living.

In fiscal 2021, we announced a strategic partnership with Equity Residential, an NYSE-listed company focused on the acquisition, development and management of residential rental properties, to selectively acquire and develop sites for new rental apartment communities in metro Boston, MA;

Orange County/San Diego, CA;

and Dallas-Fort Worth, TX.

The strategic partnership has an initial term of three years.

For selected projects, Equity Residential is expected to invest 75% of the equity and we are expected to invest the remaining 25% of the equity.

It is expected that each project will also be financed with approximately 60% leverage.

Equity Residential will have the option to acquire each property upon stabilization.

The parties have targeted an initial minimum co-investment of $733.0 million in combined equity, or $1.83 billion in aggregate value, assuming 60% leverage.

In connection with this strategic partnership, our apartment living division will act as the managing member of each project, overseeing approvals, design and construction for which we will receive development, construction management, and financing fees, as well as a promoted interest to be realized upon the sale of each property.

We have agreed, with limited exceptions, to develop apartment projects exclusively with Equity

Residential in the designated metro markets.

In connection with this strategic partnership, Equity Residential will receive fees for property management, leasing and marketing services, as well as construction oversight.

In the fourth quarter of fiscal 2021, we entered into three joint ventures with Equity Residential under this arrangement.

We also continue to evaluate potential strategic partnerships for our apartment projects in metro markets that are not designated to be developed exclusively with Equity Residential.

At October 31, 2022, we had approximately 4,000 units in for-rent apartment projects that were occupied or ready for occupancy, 2,150 units in the lease-up stage, 7,900 units in the design phase or under development, and 10,950 units in the planning stage.

3 unchanged sentences

We have an approximate 25% interest in these ventures.

These ventures will finance builders’ and developers’ acquisition and development of land and home sites and pursue other complementary investment strategies.

These ventures finance builders’ and developers’ acquisition and development of land and home sites and pursue other complementary investment strategies.

We may invest up to $100.0 million in these ventures.

As of October 31, 2021, we had an investment of $25.8 million in these ventures.

As of October 31, 2022, we had an investment of $18.2 million.

Regulatory and Environmental Matters

11 unchanged sentences

The particular environmental laws that apply to any given community vary according to the location and environmental condition of the site and the present and former uses of the site.

An increased regulatory focus on reducing greenhouse gas emissions has lead to legislative mandates in certain jurisdictions that require new homes to be more energy efficient than existing homes, or that mandate energy efficient features, such as solar panels, be included in new construction.

An increased regulatory focus on reducing greenhouse gas emissions has led to legislative mandates in certain jurisdictions that require new homes to be more energy efficient than existing homes, or that mandate energy efficient features, such as solar panels, be included in new construction.

Complying with these environmental laws may result in delays, may cause us to incur substantial compliance and other costs, and/or may prohibit or severely restrict development in certain environmentally sensitive regions or areas.

17 unchanged sentences

All of our employees must adhere to a code of conduct that sets standards for appropriate behavior and includes required annual training on preventing, identifying, reporting and stopping any type of unlawful discrimination.

In response to the COVID-19 pandemic, during fiscal 2020 we implemented enhanced safety protocols and procedures to protect our employees, our subcontractors and our customers.

Many of these protocols have evolved and were continued throughout fiscal 2021 in accordance with regulations from federal, state and local government agencies and taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities.

In addition, many of the modifications that we made to the way we conduct certain aspects of our business have become more permanent.

In response to the COVID-19 pandemic, we implemented enhanced safety protocols and procedures to protect our employees, subcontractors and customers.

Many of these protocols have evolved and become more permanent fixtures in our workplace and in the way we conduct certain aspects of our business.

For example, we continue to use and expand technologies that allow for virtual interactions in many aspects of our business, including customer facing activities.

Many administrative and operational routines have been modified as a result of the pandemic as well, including with respect to providing our employees with greater flexibility to work remotely.

Many of these modifications have been well received by our employees with minimal disruption to our operations.

For a detailed discussion of the impact of the COVID-19 pandemic on our human capital resources, see “Risk Factors - Public health issues such as the COVID-19 pandemic have adversely affected, and could in the future adversely affect, our business or financial results” in “Item 1A” of this Form 10-K.

Many administrative and operational routines have been modified including with respect to providing our employees with greater flexibility to work remotely.

Many of these modifications have been well received by our employees with minimal disruption to our operations and have continued through fiscal 2022.

For a detailed discussion of the impact of the COVID-19 pandemic on our human capital resources, see “Risk Factors - Public health issues such as a major epidemic or pandemic could adversely affect our business or financial results” in “Item 1A” of this Form 10-K.

Available Information

12 unchanged sentences

Such statements may include, but are not limited to, information related to:

the impact of COVID-19 on the U.S.

economy, the markets in which we operate or may operate, and on our business;

our strategic priorities;

our land acquisition, land development and capital allocation priorities;

market conditions;

mortgage rates;

inflation rates;

demand for our homes;

sales paces and prices;

effects of home buyer cancellations;

our strategic priorities;

growth and expansion;

our land acquisition, land development and capital allocation priorities;

anticipated operating results;

6 unchanged sentences

cost of revenues, including expected labor and material costs;

availability of labor and materials;

selling, general and administrative expenses;

4 unchanged sentences

anticipated tax refunds;

sales paces and prices;

effects of home buyer cancellations;

growth and expansion;

joint ventures in which we are involved;

6 unchanged sentences

our ability to produce the liquidity and capital necessary to conduct normal business operations or to expand and take advantage of opportunities;

and the outcome of legal proceedings, investigations, and claims.

the outcome of legal proceedings, investigations, and claims;

and the future impact of COVID-19 or other public health or other emergencies.

Any or all of the forward-looking statements included in this report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate.

This can occur as a result of assumptions or estimates that differ from actual results or as a consequence of known or unknown risks and uncertainties.

Many of the factors mentioned in “Item 1A - Risk Factors” below or in other reports or public statements made by us will be important in determining our future performance.

5 unchanged sentences

and in other materials released to the public.

This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties.

Forward-looking statements speak only as of the date they are made.

5 unchanged sentences

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.

What changed 10-K

Item 1. Business