15 unchanged sentences
Other than the ERP system implementation noted above, there has not been any change in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our quarter ended October 31, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
−Removed: For a discussion of risks related to the implementation of our new ERP system, see “Risk Factors - We are implementing a new enterprise resource planning system, and challenges with the implementation of the system may impact our business and operations.”
+Added: For a discussion of risks related to the implementation of our new ERP system, see “Risk Factors - Risks Related to Our Business and Industry - We are implementing a new enterprise resource planning system, and challenges with the implementation of the system may impact our business and operations.”
OTHER INFORMATION
−Removed: Not applicable.
+Added: Securities Trading Plans of Directors and Executive Officers
+Added: During the period covered by this Annual Report on Form 10-K, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K .
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
23 unchanged sentences
audit engagement.
−Removed: In September 2022, Mr.
−Removed: Connor was appointed as an alternate director of Univest Financial Corporation, a publicly traded banking and financial services provider serving customers primarily in Pennsylvania and New Jersey.
+Added: Connor is a director of Univest Financial Corporation, a publicly traded banking and financial services provider serving customers primarily in Pennsylvania and New Jersey.
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 2024 Annual Meeting of Stockholders (the “2024 Proxy Statement”).
32 unchanged sentences
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.
−Removed: 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.
−Removed: 3.6 Amendment to the By-laws of the Registrant, dated as of September 24, 2009, 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 24, 2009.
−Removed: 3.7 Amendment to the By-laws of the Registrant, dated as of June 15, 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 June 16, 2011.
−Removed: 3.8 Amendment to the By-laws of the Registrant, dated as of January 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 January 20, 2016.
−Removed: Exhibit Number Description
−Removed: 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.
+Added: 3.5 By-Laws of Toll Brothers, Inc., as Amended and Restated June 13, 2023 is hereby incorporated by reference to Exhibit 3.01 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 13, 2023
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.
−Removed: 4.3 Authorizing Resolutions, dated as of April 3, 2013, relating to the $300,000,000 principal amount of 4.375% Senior Notes due 2023 of Toll Brothers Finance Corp.
−Removed: 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 April 10, 2013.
−Removed: 4.4 Authorizing Resolutions, dated as of May 8, 2013, relating to the $100,000,000 principal amount of 4.375% Senior Notes due 2023 of Toll Brothers Finance Corp.
−Removed: guaranteed on a senior basis by Toll Brothers, Inc.
−Removed: 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 May 13, 2013.
−Removed: 4.5 Form of Global Note for Toll Brothers Finance Corp.’s 4.375% Senior Notes due 2023 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 April 10, 2013.
+Added: Exhibit Number Description
4.3 Authorizing Resolutions, dated as of October 30, 2015, relating to the $350,000,000 principal amount of 4.875% Senior Notes due 2025 of Toll Brothers Finance Corp.
10 unchanged sentences
4.10 Form of Global Note for the Issuer’s 4.350% Senior Notes due 2028 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 January 22, 2018.
−Removed: Exhibit Number Description
4.11 Authorizing Resolution, dated as of September 12, 2019, relating to the $400,000,000 aggregate principal amount of 3.800% Senior Notes due 2029 of Toll Brothers Finance Corp., guaranteed on a senior basis by Toll Brothers, Inc.
5 unchanged sentences
4.16 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.
+Added: Exhibit Number Description
4.17 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.
5 unchanged sentences
4.23 Eleventh Supplemental Indenture dated as of October 31, 2016, 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, 2016.
−Removed: Exhibit Number Description
4.24 Twelfth Supplemental Indenture dated as of October 31, 2016, 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, 2016.
4 unchanged sentences
4.29 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.
+Added: Exhibit Number Description
4.30 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.
5 unchanged sentences
4.36 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.
−Removed: Exhibit Number Description
4.37 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, is hereby incorporated by reference to Exhibit 4.44 of the Registrant’s Form 10-K for the year ended October 31, 2020.
1 unchanged sentence
4.39 Twenty-seventh Supplemental Indenture dated as of July 29, 2022, 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, 2022.
−Removed: 4.43 Twenty-eighth Supplemental Indenture dated as of October 31, 2022, 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: 4.40 Twenty-eighth Supplemental Indenture dated as of October 31, 2022, 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 incorporate by reference to Exhibit 4.43 of the Registrants’s Form 10-K for the year ended October 31, 2022.
+Added: 4.41 Twenty-ninth Supplemental Indenture dated as of January 31, 2023, 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 incorporate by reference to Exhibit 4.1 of the Registrants’s Form 10-Q for the quarter ended January 31, 2023.
+Added: 4.42 Thirtieth Supplemental Indenture dated as of July 31, 2023, 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 incorporate by reference to Exhibit 4.1 of the Registrants’s Form 10-Q for the quarter ended July 31, 2023.
+Added: Exhibit Number Description
+Added: 4.43 Thirty-first Supplemental Indenture dated as of October 31, 2023, 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.**
4.44 Description of Certain of Registrant’s Securities is hereby incorporated by reference to Exhibit 4.44 of the Registrant’s Form 10-K for the year ended October 31, 2021.
−Removed: 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.
−Removed: 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.
−Removed: 10.3 Revolving Extension Agreements, effective as of October 31, 2021, 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 November 2, 2021.
+Added: 10.1 Credit Agreement, dated as of February 14, 2023, by and among First Huntingdon Finance Corp., Toll Brothers, Inc., the Lenders party thereto and Mizuho Bank, Ltd.
+Added: 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 February 15, 2023
10.2 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
7 unchanged sentences
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.
−Removed: Exhibit Number Description
+Added: 10.7 Amendment No.
+Added: 5, dated as of February 14, 2023, to the 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 October 31, 2019), among First Huntingdon Finance Corp., Toll Brothers, Inc., the Lenders party thereto and Truist 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 February 15, 2023
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.
10 unchanged sentences
Employee Stock Purchase Plan (2017) is hereby incorporated by reference to Annex A to the Registrant’s Definitive Proxy Statement on Schedule 14A for its 2017 Annual Meeting of Stockholders filed with the SEC on January 31, 2017.
+Added: Exhibit Number Description
10.11* Amendment No.
12 unchanged sentences
Stock Incentive Plan for Employees (2007) is hereby incorporated by reference to Exhibit 10.3 of the Registrant’s Form 10-Q for the quarter ended July 31, 2007.
−Removed: 10.17* Form of Stock Award Grant pursuant to the Toll Brothers, Inc.
−Removed: Stock Incentive Plan for Employees (2007) is hereby incorporated by reference to Exhibit 10.4 of the Registrant’s Form 10-Q for the quarter ended July 31, 2007.
10.16* Toll Brothers, Inc.
3 unchanged sentences
10.18* 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.
−Removed: 10.21* 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.
10.19* Toll Brothers, Inc.
2 unchanged sentences
333-144230) filed with the Securities and Exchange Commission on October 29, 2008.
−Removed: Exhibit Number Description
10.20* Form of Non-Qualified Stock Option Grant pursuant to the Toll Brothers, Inc.
11 unchanged sentences
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.
+Added: Exhibit Number Description
10.27* Form of Restricted Stock Unit Agreement (Performance Based) pursuant to the Toll Brothers, Inc.
1 unchanged sentence
10.28* Toll Brothers, Inc.
−Removed: Senior Officer Bonus Plan is hereby incorporated by reference to Annex A to the Registrant’s definitive proxy statement on Schedule 14A for its 2015 Annual Meeting of Stockholders filed with the Securities and Exchange Commission on January 30, 2015.
−Removed: 10.32* Toll Brothers, Inc.
Supplemental Executive Retirement Plan, as amended effective as of
13 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 Description
10.35* 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.
10 unchanged sentences
Connor pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
+Added: 97* Compensation Clawback Policy
101 The following financial statements from Toll Brothers, Inc.
2 unchanged sentences
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.
+Added: Exhibit Number Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
45 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, 2023.
−Removed: During fiscal 2022, we completed the acquisition of the operations of Rialto Homes, LP (“Rialto”).
−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 Rialto from the Company’s assessment of the effectiveness of internal control over financial reporting as of October 31, 2022.
−Removed: This acquisition represented less than 1% of the Company’s total assets as of October 31, 2022 and less than 1% of the Company’s revenues for the fiscal year ended October 31, 2022.
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.
Report of Independent Registered Public Accounting Firm
−Removed: To the Shareholders and the Board of Directors of Toll Brothers, Inc.
+Added: To the Stockholders and the Board of Directors of Toll Brothers, Inc.
Opinion on Internal Control Over Financial Reporting
2 unchanged sentences
(the Company) maintained, in all material respects, effective internal control over financial reporting as of October 31, 2023, 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 the operations of Rialto Homes, LP, which are included in the 2022 consolidated financial statements of the Company and constitute less than 1% of total assets as of October 31, 2022 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 the operations of Rialto Homes, LP.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2023 consolidated financial statements of the Company and our report dated December 20, 2023 expressed an unqualified opinion thereon.
19 unchanged sentences
Report of Independent Registered Public Accounting Firm
−Removed: To the Shareholders and the Board of Directors of Toll Brothers, Inc.
+Added: To the Stockholders and the Board of Directors of Toll Brothers, Inc.
Opinion on the Financial Statements
16 unchanged sentences
Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the Audit and Risk Committee and that:
+Added: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
26 unchanged sentences
For inventory for which the carrying value exceeds the future undiscounted cash flows, the Company writes down the carrying value of the inventory to its estimated fair value primarily based on a discounted cash flow model.
−Removed: 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 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.
+Added: Auditing management’s accounting for inventory impairment and its tests for recoverability was especially challenging and involved a high degree of subjectivity as a result of the assumptions and estimates inherent in these evaluations.
+Added: In particular, management’s assumptions and estimates included future home and/or land sales prices and the pace of future sales, 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.
34 unchanged sentences
Preferred stock, none issued — —
−Removed: Common stock, 127,937 shares issued at October 31, 2022 and October 31, 2021 1,279 1,279
+Added: Common stock, 112,937 and 127,937 shares issued at October 31, 2023 and October 31, 2022, respectively 1,129 1,279
Additional paid-in capital 698,548 716,786
6 unchanged sentences
$ 12,527,018 $ 12,288,714
−Removed: (1) As of October 31, 2022 and 2021, receivables, prepaid expenses, and other assets or investments in unconsolidated entities include $ 81.3 million and $ 90.8 million, respectively, of assets related to consolidated variable interest entities ("VIEs").
+Added: (1) As of October 31, 2023 and 2022, Receivables, prepaid expenses and other assets and Investments in unconsolidated entities include $ 89.6 million and $ 81.3 million, respectively, of assets related to consolidated variable interest entities ("VIEs").
See Note 4, “Investments in Unconsolidated Entities” for additional information regarding VIEs.
19 unchanged sentences
Net income $ 1,372,071 $ 1,286,500 $ 833,627
−Removed: Other comprehensive income (loss) – net of tax 36,509 8,307 ( 1,367 )
+Added: Other comprehensive income – net of tax 3,292 36,509 8,307
Total comprehensive income $ 1,375,363 $ 1,323,009 $ 841,934
12 unchanged sentences
Balance, 11/1/2020 152,937 1,529 717,272 5,164,086 ( 1,000,454 ) ( 7,198 ) 4,875,235 52,241 4,927,476
+Added: Cumulative effect adjustment upon adoption of ASU 2016-13, net of tax ( 595 ) ( 595 ) ( 595 )
Net income 833,627 833,627 833,627
Purchase of treasury stock ( 378,256 ) ( 378,256 ) ( 378,256 )
−Removed: Exercise of stock options and stock based compensation issuances
−Removed: ( 33,933 ) 58,786 24,853 24,853
+Added: Exercise of stock options, and stock based compensation issuances, and employee stock purchase plan issuances ( 26,006 ) 36,489 10,483 10,483
Stock-based compensation 23,187 23,187 23,187
+Added: Cancellation of treasury stock
+Added: ( 25,000 ) ( 250 ) ( 950,315 ) 950,565 — —
Dividends declared
( 76,964 ) ( 76,964 ) ( 76,964 )
−Removed: Other comprehensive loss ( 1,367 ) ( 1,367 ) ( 1,367 )
+Added: Other comprehensive income 8,307 8,307 8,307
Loss attributable to non-controlling interest — ( 6,770 ) ( 6,770 )
−Removed: Capital contributions, net — 5,374 5,374
+Added: Capital distributions, net — ( 40 ) ( 40 )
Balance, 10/31/2021 127,937 1,279 714,453 4,969,839 ( 391,656 ) 1,109 5,295,024 45,431 5,340,455
−Removed: Cumulative effect adjustment upon adoption of ASU 2016-13, net of tax ( 595 ) ( 595 ) ( 595 )
Net income 1,286,500 1,286,500 1,286,500
Purchase of treasury stock ( 542,739 ) ( 542,739 ) ( 542,739 )
−Removed: Exercise of stock options and stock based compensation issuances
−Removed: ( 26,006 ) 36,489 10,483 10,483
+Added: Exercise of stock options, and stock based compensation issuances, and employee stock purchase plan issuances ( 18,762 ) 18,068 ( 694 ) ( 694 )
Stock-based compensation 21,095 21,095 21,095
−Removed: Cancellation of treasury stock ( 25,000 ) ( 250 ) ( 950,315 ) 950,565 — —
Dividends declared
1 unchanged sentence
Other comprehensive income 36,509 36,509 36,509
−Removed: Loss attributable to non-controlling interest
−Removed: — ( 6,770 ) ( 6,770 )
+Added: Income attributable to non-controlling interest — 64 64
Capital distributions, net — ( 29,743 ) ( 29,743 )
2 unchanged sentences
Purchase of treasury stock ( 565,950 ) ( 565,950 ) ( 565,950 )
−Removed: Exercise of stock options and stock based compensation issuances
−Removed: ( 18,762 ) 18,068 ( 694 ) ( 694 )
+Added: Exercise of stock options, and stock based compensation issuances, and employee stock purchase plan issuances ( 43,043 ) 91,308 48,265 48,265
Stock-based compensation 24,805 24,805 24,805
+Added: Cancellation of treasury stock
+Added: ( 15,000 ) ( 150 ) ( 771,669 ) 771,819 — —
Dividends declared ( 91,415 ) ( 91,415 ) ( 91,415 )
Other comprehensive income 3,292 3,292 3,292
−Removed: Income attributable to non-controlling interest — 64 64
−Removed: Capital distributions, net — ( 29,743 ) ( 29,743 )
+Added: Loss attributable to non-controlling interest — ( 666 ) ( 666 )
+Added: Capital contributions, net — 960 960
Balance, 10/31/2023 112,937 1,129 698,548 6,675,719 ( 619,150 ) 40,910 6,797,156 16,046 6,813,202
12 unchanged sentences
Deferred tax provision 36,239 ( 96,680 ) 11,815
−Removed: Inventory impairments and write-offs 32,741 26,535 55,883
−Removed: Property, construction and office equipment impairments 6,800 — —
−Removed: Loss (gain) on sale of assets 576 ( 38,706 ) ( 12,970 )
+Added: Impairment charges and write-offs 69,537 39,541 26,535
+Added: (Gain) loss on sale of assets ( 416 ) 576 ( 38,706 )
Other 3,181 3,781 ( 406 )
13 unchanged sentences
Return of investments in unconsolidated entities 112,749 116,769 203,504
−Removed: Proceeds from the sale of assets 28,309 80,418 15,617
−Removed: Business acquisitions — — ( 60,349 )
+Added: Proceeds from the sale of assets, including ownership interests in unconsolidated entities 26,049 28,309 80,418
Other — 196 652
2 unchanged sentences
Proceeds from loans payable 3,079,142 4,304,635 3,158,033
+Added: Debt issuance costs ( 5,365 ) — —
Principal payments of loans payable ( 3,239,418 ) ( 4,356,185 ) ( 3,425,065 )
Redemption of senior notes ( 400,000 ) ( 409,856 ) ( 294,168 )
−Removed: (Payments) proceeds for stock-based benefit plans – net ( 690 ) 10,487 24,856
+Added: Proceeds (payments) related to stock-based benefit plans – net 48,269 ( 690 ) 10,487
Purchase of treasury stock ( 561,595 ) ( 542,739 ) ( 378,256 )
Dividends paid ( 91,082 ) ( 88,901 ) ( 76,623 )
−Removed: Payments related to noncontrolling interest – net ( 25,766 ) ( 5,491 ) ( 1,718 )
+Added: Receipts (payments) related to noncontrolling interest – net 11 ( 25,766 ) ( 5,491 )
Net cash used in financing activities ( 1,170,038 ) ( 1,119,502 ) ( 1,011,083 )
−Removed: Net decrease in cash, cash equivalents, and restricted cash ( 285,862 ) 287,808 76,961
+Added: Net (decrease) increase in cash, cash equivalents, and restricted cash ( 54,209 ) ( 285,862 ) 287,808
Cash, cash equivalents, and restricted cash, beginning of period 1,398,550 1,684,412 1,396,604
76 unchanged sentences
Interest income on mortgage loans held for sale is calculated based upon the stated interest rate of each loan.
−Removed: In addition, the recognition of net origination costs and fees associated with residential mortgage loans originated are expensed as incurred.
+Added: In addition, net origination costs and fees associated with residential mortgage loans originated are expensed as incurred.
These gains and losses, interest income, and origination costs and fees are recognized in “Other income – net” in the Consolidated Statements of Operations and Comprehensive Income.
23 unchanged sentences
Derivative Instruments and Hedging Activities
−Removed: Our objective in entering into derivative transactions is to manage our exposure to interest rate movements associated with certain variable rate debt, mortgage loans held for sale and forward loan commitments we have entered into related to our mortgage operations.
+Added: Our objective in entering into derivative transactions is to manage our exposure to interest rate movements associated with certain variable rate debt, mortgage loans held for sale, interest rate lock commitments, and forward loan commitments we have entered into related to our mortgage operations.
We recognize derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value.
3 unchanged sentences
If it is determined that a derivative is not highly effective as a hedge, or if the hedged forecasted transaction is no longer probable of occurring, the amount recognized in Accumulated other comprehensive income (loss) is released to earnings.
−Removed: Our derivative transactions related to our mortgage loans held for sale and our forward loan commitments are not designated as hedges and therefore the entire change in the fair value of these derivative transactions is included as a gain or loss in Other income – net in the accompanying Consolidated Statements of Operations and Comprehensive Income.
+Added: Our derivative transactions related to our mortgage loans held for sale, interest rate lock commitments, and our forward loan commitments are not designated as hedges and therefore the entire change in the fair value of these derivative transactions is included as a gain or loss in Other income – net in the accompanying Consolidated Statements of Operations and Comprehensive Income.
See Note 12 “Fair Value Disclosures” for more information.
4 unchanged sentences
When treasury stock is cancelled, any excess purchase price over par value is charged directly to retained earnings.
−Removed: In fiscal 2021, we cancelled 25 million shares of treasury stock.
+Added: In fiscal 2023 and 2021, we cancelled 15 million and 25 million shares of treasury stock, respectively.
Revenue and Cost Recognition
19 unchanged sentences
(2) lot sales to third-party builders within our master-planned communities;
−Removed: (2) land sales to joint ventures in which we retain an interest;
(3) bulk land sales to third parties of land we have decided no longer meets our development criteria;
−Removed: and (4) sales of commercial and retail properties generally located at our City Living projects.
−Removed: our performance obligation for each of these land sales is fulfilled upon the delivery of the land, which generally coincides with the receipt of cash consideration from the counterparty.
+Added: and (4) sales of commercial and retail
+Added: properties generally located at our high-rise urban luxury condominium projects.
+Added: In general, our performance obligation for each of these land sales is fulfilled upon the delivery of the land, which generally coincides with the receipt of cash consideration from the counterparty.
For land sale transactions that contain repurchase options, revenues and related costs are not recognized until the repurchase option expires.
39 unchanged sentences
In addition to restrictions on trading, employee stock options and restricted stock units may include other restrictions such as vesting periods.
−Removed: Further, such models require the input of highly subjective assumptions, including the expected volatility of the stock price.
+Added: Further, such models require the input of subjective assumptions, including the expected volatility of the stock price.
Stock-based compensation expense is generally included in “Selling, general and administrative” expense in our Consolidated Statements of Operations and Comprehensive Income.
53 unchanged sentences
Our geographic reporting segments are consistent with how our chief operating decision makers are assessing operating performance and allocating capital.
−Removed: At October 31, 2022, we concluded that our City Living operations were no longer a reportable operating segment, primarily due to its insignificance as a result of the change in structure and shift in strategy for its operations.
−Removed: Therefore, we have five operating segments as reflected above.
−Removed: Amounts reported in prior periods have been restated to conform to the fiscal 2022 presentation.
−Removed: The realignment did not have any impact on our consolidated financial position, results of operations, earnings per share or cash flows for the periods presented.
−Removed: As the result of recent acquisitions, we commenced operations in San Antonio, Texas in fiscal 2022 and Tennessee in fiscal 2020.
Recent Accounting Pronouncements
+Added: In November 2023, the FASB issued ASU No.
+Added: 2023-07, “Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures” (“ASU 2023-07”).
+Added: ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM.
+Added: The amendments in this update also expand the interim segment disclosure requirements.
+Added: ASU 2023-07 will be effective for our fiscal year ending October 31, 2025 and for interim periods starting in our first quarter of fiscal 2026.
+Added: Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis.
+Added: We are currently reviewing the impact that the adoption of ASU 2023-07 may have on our consolidated financial statements and disclosures.
In June 2016, the FASB issued ASU No.
5 unchanged sentences
The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements or disclosures, and there have been no significant changes to our internal controls, processes, or systems as a result of implementing this new standard.
−Removed: In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848),” as amended by ASU 2021-01 in January 2021, directly addressing the effects of reference rate reform on financial reporting as a result of the cessation of the publication of certain LIBOR rates beginning December 31, 2021, with complete elimination of the publication of the LIBOR rates by June 30, 2023.
+Added: In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848),” as amended by ASU 2021-01 in January 2021 and ASU 2022-06 in December 2022 (“ASC 848”), directly addressing the effects of reference rate reform on financial reporting as a result of the cessation of the publication of certain London Interbank Offered Rate (“LIBOR”) rates beginning December 31, 2021.
The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform by virtue of referencing LIBOR or another reference rate expected to be discontinued.
This guidance became effective on March 12, 2020 and can be adopted no later than December 31, 2024, with early adoption permitted.
−Removed: We are currently evaluating the impact, but do not expect that the adoption of ASU 2020-04, as amended by ASU 2021-01, will have a material impact on our Consolidated Balance Sheet or Consolidated Statement of Operations and Comprehensive Income.
+Added: We elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.
+Added: Application of these expedients preserves the presentation of derivatives consistent with past presentation.
+Added: We continue to evaluate the impact of the guidance on our consolidated financial statements and may apply other elections as applicable as additional changes in the market occur.
Reclassification
6 unchanged sentences
This acquisition was accounted for as an asset acquisition and was not material to our results of operations or financial condition.
−Removed: 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, and a builder with operations in Colorado Springs, Colorado.
−Removed: The aggregate purchase price for these acquisitions was approximately $ 79.2 million in cash.
−Removed: The assets acquired were primarily inventory, including approximately 1,100 home sites owned or controlled through land purchase agreements.
−Removed: One of these acquisitions was accounted for as a business combination and neither were material to our results of operations or financial condition.
Inventory at October 31, 2023 and 2022 consisted of the following (amounts in thousands):
5 unchanged sentences
communities that have sold all available home sites but have not completed delivery of the homes;
−Removed: 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.
8 unchanged sentences
$ 30,706 $ 32,741 $ 26,535
−Removed: 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.
−Removed: 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.
+Added: We have also recognized $ 30.6 million and $ 6.8 million of impairment charges on land held for sale included in land sales and other cost of revenues during the fiscal years ended October 31, 2023 and 2022, respectively.
See Note 14, “Commitments and Contingencies,” for information regarding land purchase contracts.
1 unchanged sentence
Under these land purchase contracts, we do not possess legal title to the land;
−Removed: our maximum exposure to loss is generally
−Removed: limited to deposits paid to the sellers and predevelopment costs incurred;
+Added: our maximum exposure to loss is generally limited to deposits paid to the sellers and predevelopment costs incurred;
and the creditors of the sellers generally have no recourse against us.
7 unchanged sentences
Interest expensed to land sales and other cost of revenues ( 10,787 ) ( 5,788 ) ( 4,372 )
−Removed: Interest expensed in other income – net — — ( 2,440 )
Interest reclassified to property, construction and office equipment - net — — ( 1,034 )
3 unchanged sentences
Interest capitalized, end of year $ 190,550 $ 209,468 $ 253,938
−Removed: During the years ended October 31, 2022 and October 31, 2021, we recognized approximately $( 2.9 ) million and $ 0.9 million of net (gains) losses related to our interest rate swaps which is included in accumulated other comprehensive income, respectively, and approximately $( 31,300 ) and $ 211,000 of net (gains) losses were reclassified out of accumulated other comprehensive income to home sales cost of revenues, respectively.
−Removed: No similar amounts were incurred during the year ended October 31, 2020.
Investments in Unconsolidated Entities
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(iii) develop luxury for-rent residential apartments and single family homes, commercial space, and a hotel (“Rental Property Joint Ventures”), or (iv) provide financing and land banking to residential builders and developers for the acquisition and development of land and home sites (“Gibraltar Joint Ventures”).
−Removed: In fiscal 2022, 2021 and 2020, we recognized income from the unconsolidated entities in which we had an investment of $ 23.7 million, $ 74.0 million, and $ 0.9 million, respectively.
The table below provides information as of October 31, 2023, regarding active joint ventures that we are invested in, by joint venture category ($ amounts in thousands):
9 unchanged sentences
$ 204,438 $ — $ 184,266 $ 12,066 $ 400,770
−Removed: (1) Our total investment includes $ 100.2 million related to 13 unconsolidated joint venture-related variable interests in VIEs and our maximum exposure to losses related to these VIEs is approximately $ 200.0 million as of October 31, 2022.
+Added: (1) Our total investment includes $ 121.6 million related to 11 unconsolidated joint venture-related variable interests in VIEs and our maximum exposure to losses related to these VIEs is approximately $ 329.3 million as of October 31, 2023, inclusive of our investment in these joint ventures.
Our ownership interest in such unconsolidated Joint Venture VIEs ranges from 25 % to 50 % .
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The table below provides information at October 31, 2022, regarding the debt financing obtained by category ($ amounts in thousands):
+Added: Joint Ventures Home Building
Joint Ventures Rental Property
7 unchanged sentences
The table below provides information on joint ventures entered into during fiscal 2023 ($ amounts in thousands):
−Removed: Land Development Joint Ventures Home Building Joint Ventures Rental Property Joint Ventures Gibraltar Joint Ventures
+Added: Land Development Joint Ventures Rental Property Joint Ventures
Number of unconsolidated joint ventures entered into during the period 1 5
1 unchanged sentence
$ 14,867 $ 59,567
−Removed: In the fourth quarter of fiscal 2022, we entered into two joint ventures with an unrelated party to develop two luxury condominium communities in the New York City metropolitan area.
−Removed: Prior to the formation of these ventures, we capitalized approximately $ 106.5 million of land and land development costs.
−Removed: Our partner acquired a 55 % interest in these ventures for approximately $ 61.0 million, which equaled our pro-rata cost basis.
−Removed: We received cash of $ 61.2 million as a result of these formations, which included a combination of partner and loan proceeds, resulting in our initial investment in these ventures of $ 45.5 million.
−Removed: Concurrent with their formation, the joint ventures entered into construction loan agreements aggregating $ 219.7 million to finance the remaining development of these projects, of which $ 17.6 million was borrowed at the closing of the ventures.
+Added: Number of consolidated joint ventures entered into during the period — 1
+Added: Carrying value of consolidated joint ventures’ assets at October 31, 2023 $ — $ 10,600
+Added: Noncontrolling interests in consolidated joint ventures at October 31, 2023 $ — $ 2,700
The table below provides information on joint ventures entered into during fiscal 2022 ($ amounts in thousands):
−Removed: Land Development Joint Ventures Rental Property Joint Ventures
+Added: Land Development Joint Ventures Home Building Joint Ventures Rental Property Joint Ventures Gibraltar Joint Ventures
Number of unconsolidated joint ventures entered into during the period 3 2 12 1
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In connection with these sales, we recognized gains of $ 50.9 million, $ 21.0 million, and $ 74.8 million, respectively, which is included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income.
−Removed: In fiscal 2022, 2021 and 2020, we recognized other-than-temporary impairment charges on our investments in certain Home Building and Rental Property Joint Ventures of $ 8.0 million and $ 2.1 million and $ 6.0 million, respectively.
+Added: In fiscal 2023, we sold our ownership interest in one of our Rental Property Joint Ventures and recognized a gain of $ 16.0 million, which is included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income.
+Added: No similar gains were recognized in fiscal 2022 or 2021.
+Added: In fiscal 2022 and 2021, we recognized other-than-temporary impairment charges on our investments in certain Home Building and Rental Property Joint Ventures of $ 8.0 million and $ 2.1 million, respectively.
+Added: No other-than-temporary impairment charges were recognized in fiscal 2023.
In fiscal 2023, 2022 and 2021, we purchased land from unconsolidated entities, principally related to our acquisition of lots from our Land Development Joint Ventures, totaling $ 110.7 million, $ 54.8 million, and $ 18.5 million, respectively.
26 unchanged sentences
Terms of guarantees 1 month -
−Removed: 3.7 years 4 months -
+Added: 4.0 years 1 month -
(1) At October 31, 2023 and 2022, our maximum estimated exposure under repayment and carry cost guarantees includes approximately $ 102.3 million and $ 95.0 million, respectively, related to our unconsolidated Joint Venture VIEs.
−Removed: The maximum exposure estimates presented above do not take into account any recoveries from the underlying collateral or any reimbursement from our partners.
−Removed: Nor do they include any potential exposures related to project completion guarantees or the indemnities noted above, which are not estimable.
+Added: The maximum exposure estimates presented above do not take into account any recoveries from the underlying collateral or any reimbursement from our partners, nor do they include any potential exposures related to project completion guarantees or the indemnities noted above, which are not estimable.
We have not made payments under any of the outstanding guarantees, nor have we been called upon to do so.
12 unchanged sentences
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.
−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.
+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 partners.
+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 partners.
Joint Venture Condensed Combined Financial Information
−Removed: The Condensed Combined Balance Sheets, as of the dates indicated, and the Condensed Combined Statements of Operations, for the periods indicated, for the unconsolidated entities in which we have an investment, aggregated by type of business, are included below (in thousands).
+Added: The Condensed Combined Balance Sheets, as of the dates indicated, and the Condensed Combined Statements of Operations, for the periods indicated, for the unconsolidated entities in which we have an investment, aggregated by type, are included below (in thousands).
Condensed Combined Balance Sheets:
35 unchanged sentences
$ 343,314 $ 49,385 $ 441,399 $ 18,216 $ 852,314
−Removed: (1) Our underlying equity in the net assets of the unconsolidated entities was (less)/more than our net investment in unconsolidated entities by $( 18.5 ) million and $ 16.5 million as of October 31, 2022 and 2021, respectively, and these differences are primarily a result of other than temporary impairments related to our investments in unconsolidated entities;
−Removed: interest capitalized on our investments;
+Added: (1) Our underlying equity in the net assets of the unconsolidated entities was less than our net investment in unconsolidated entities by $ 40.9 million and $ 18.5 million as of October 31, 2023 and 2022, respectively, and these differences are primarily a result of interest capitalized on our investments;
the estimated fair value of the guarantees provided to the joint ventures;
+Added: distributions from entities in excess of the carrying amount of our net investment;
unrealized gains on our retained joint venture interests;
−Removed: gains recognized from the sale of our ownership interests;
−Removed: and distributions from entities in excess of the carrying amount of our net investment.
+Added: other than temporary impairments we have recognized;
+Added: and gains recognized from the sale of our ownership interests.
Condensed Combined Statements of Operations and Comprehensive Income:
8 unchanged sentences
Total expenses 210,185 33,784 319,062 22,084 585,115
−Removed: Loss on disposition of loans and REO — — — ( 113 ) ( 113 )
Income (loss) from operations 30,180 4,340 ( 80,411 ) 6,137 ( 39,754 )
Other income (2)
−Removed: Income (loss) before income taxes 48,639 11,902 ( 1,128 ) 9,927 69,340
+Added: 2,500 205 102,865 241 105,811
+Added: Income before income taxes 32,680 4,545 22,454 6,378 66,057
Income tax provision (benefit) 214 367 ( 940 ) — ( 359 )
−Removed: Net income (loss) $ 48,291 $ 11,394 $ ( 521 ) $ 9,927 $ 69,091
−Removed: Company’s equity (deficit) in earnings of unconsolidated entities (2)
+Added: Net income $ 32,466 $ 4,178 $ 23,394 $ 6,378 $ 66,416
+Added: Company’s equity in earnings of unconsolidated entities (3)
$ 13,178 $ 972 $ 34,327 $ 1,621 $ 50,098
11 unchanged sentences
Other income (2)
+Added: 23,292 804 36,805 — 60,901
Income (loss) before income taxes 48,639 11,902 ( 1,128 ) 9,927 69,340
12 unchanged sentences
Total expenses 83,829 110,323 204,328 12,453 410,933
−Removed: Gain on disposition of loans and REO
−Removed: — — — 1,053 1,053
+Added: Loss on disposition of loans and REO — — — ( 4,109 ) ( 4,109 )
Income (loss) from operations 26,501 ( 21,789 ) ( 62,955 ) 4,795 ( 53,448 )
−Removed: Other income (loss) 3,061 536 ( 448 ) 3,149
+Added: Other income (2)
+Added: 8,807 317 177,777 — 186,901
Income (loss) before income taxes 35,308 ( 21,472 ) 114,822 4,795 133,453
Income tax provision (benefit) 258 ( 875 ) ( 824 ) — ( 1,441 )
−Removed: Net income (loss) including earnings from noncontrolling interests 22,289 ( 253 ) ( 44,515 ) 10,567 ( 11,912 )
−Removed: loss attributable to noncontrolling interest — — — 48 48
−Removed: Net income (loss) attributable to controlling interest $ 22,289 $ ( 253 ) $ ( 44,515 ) $ 10,615 $ ( 11,864 )
+Added: Net income (loss) $ 35,050 $ ( 20,597 ) $ 115,646 $ 4,795 $ 134,894
Company’s equity (deficit) in earnings of unconsolidated entities (3)
$ 18,155 $ ( 241 ) $ 53,792 $ 2,329 $ 74,035
−Removed: (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;
−Removed: other than temporary impairments related to our investments in unconsolidated entities;
+Added: (2) Other income generated by Rental Property Joint Ventures for the years ending October 31, 2023, 2022, and 2021 include gains of $ 106.2 million, $ 29.9 million, and $ 177.6 million related to the sale of assets by multiple Rental Property Joint Ventures.
+Added: (3) Differences between our income (loss) from unconsolidated entities and our percentage interest in 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: promote earned on the gains recognized by join ventures and those promoted cash flows being distributed;
+Added: other than temporary impairments we have recognized;
recoveries of previously incurred charges;
unrealized gains on our retained joint venture interests;
−Removed: gained recognized from the sale of our investment to our joint venture partner;
+Added: gains 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.
10 unchanged sentences
$ 691,256 $ 747,228
−Removed: See Note 7, “Accrued Expenses,” for additional information regarding the expected recoveries from insurance carriers and others.
−Removed: As of October 31, 2022, there were no consolidated VIE assets included in properties held for rental apartment and commercial development.
−Removed: As of October 31, 2021, properties held for rental apartment and commercial development included $ 90.8 million of assets related to consolidated VIEs.
−Removed: See Note 4, “Investments in Unconsolidated Entities” for additional information regarding VIEs.
Loans Payable, Senior Notes, and Mortgage Company Loan Facility
6 unchanged sentences
Senior Unsecured Term Loan
−Removed: We are party to a five -year $ 650.0 million senior unsecured term loan facility (the “Term Loan Facility”) with a syndicate of banks, most of which is scheduled to expire on November 1, 2026.
−Removed: In the first quarter of fiscal 2021, we voluntarily repaid $ 150.0 million of the then $ 800.0 million in principal amount that was outstanding.
−Removed: No prepayment charges were incurred in connection with the repayment.
−Removed: On October 31, 2021, we entered into term loan extension agreements to extend the maturity date of $ 548.4 million of outstanding term loans from November 1, 2025 to November 1, 2026, with the remainder of the term loans remaining due November 1, 2025.
+Added: We are party to a $ 650.0 million senior unsecured term loan facility (the “Term Loan Facility”) with a syndicate of banks.
+Added: On February 14, 2023, we entered into an amendment to the Term Loan Facility to extend the maturity date of $ 487.5 million of outstanding term loans to February 14, 2028, with $ 60.9 million due on November 1, 2026 and the remaining $ 101.6 million due on November 1, 2025.
+Added: In addition, this amendment replaced the London Interbank Offered Rate (“LIBOR”)-based interest rate provisions applicable to borrowings under the Term Loan Facility with Secured Overnight Financing Rate (“SOFR”)-based interest rate provisions.
+Added: At October 31, 2023, other than $ 101.6 million of term loans scheduled to mature on November 1, 2025 and the $ 60.9 million scheduled to mature on November 1, 2026, there are no payments required before the final maturity date on the Term Loan Facility.
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.
−Removed: Other than $ 101.6 million of term loans that are scheduled to mature on November 1, 2025, there are no payments required before the final maturity date on the Term Loan Facility.
−Removed: 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.
+Added: Under the Term Loan Facility, as amended, we may select interest rates equal to (i) SOFR 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.
At October 31, 2023, the interest rate on the Term Loan Facility was 6.20 % per annum.
−Removed: We and substantially all of our 100 %-owned home building subsidiaries are guarantors under the Term Loan Facility.
−Removed: The Term Loan Facility contains substantially the same financial covenants as the Revolving Credit Facility, as described below.
+Added: Toll Brothers, Inc.
+Added: and substantially all of its 100 %-owned home building subsidiaries are guarantors under the Term Loan Facility.
+Added: The Term Loan Facility contains substantially the same financial covenants as the New Revolving Credit Facility, as described below.
In November 2020, we entered into five interest rate swap transactions to hedge $ 400.0 million of the Term Loan Facility through October 2025.
2 unchanged sentences
Revolving Credit Facility
−Removed: We are party to a $ 1.905 billion senior unsecured, five -year revolving credit facility (the “Revolving Credit Facility”) with a syndicate of banks, substantially all of which is scheduled to expire on November 1, 2026.
−Removed: On October 31, 2021, we entered into extension letter agreements (the “Revolver Extension Agreements”) to extend the maturity date of $ 1.78 billion of the revolving loans and commitments from November 1, 2025 to November 1, 2026, with the remainder of the revolving loans and commitments continuing to terminate on November 1, 2025.
−Removed: Under the Revolving Credit Facility, up to 100 % of the commitment is available for letters of credit.
−Removed: The Revolving Credit Facility has an accordion feature under which we may, subject to certain conditions set forth in the agreement, increase the Revolving Credit Facility up to a maximum aggregate amount of $ 2.50 billion.
−Removed: We may select interest rates for the Revolving Credit Facility equal to (i) LIBOR plus an applicable margin or (ii) the lenders’ base rate plus an applicable margin, which in each case is based on our credit rating and leverage ratio.
−Removed: At October 31, 2022, the interest rate on outstanding borrowings under the Revolving Credit Facility would have been 4.95 % per annum.
+Added: On February 14, 2023, we entered into a new five -year $ 1.905 billion senior unsecured revolving credit facility (the “New Revolving Credit Facility”) with a syndicate of banks that is scheduled to mature on February 14, 2028.
+Added: The New Revolving Credit Facility replaced our existing $ 1.905 billion revolving credit facility, which was terminated in connection with the execution of the new agreement.
+Added: The terms of the New Revolving Credit Facility are substantially the same as the prior revolving credit facility, except that the LIBOR-based interest rate provisions have been replaced with SOFR-based provisions.
+Added: Toll Brothers, Inc.
+Added: and substantially all of its 100 %-owned home building subsidiaries are guarantors of the borrower’s obligations under the New Revolving Credit Facility.
+Added: Under the New Revolving Credit Facility, up to 100 % of the commitment is available for letters of credit.
+Added: The New Revolving Credit Facility has an accordion feature under which we may, subject to certain conditions set forth in the agreement, increase the New Revolving Credit Facility up to a maximum aggregate amount of $ 3.00 billion.
+Added: We may select interest rates for the New Revolving Credit Facility equal to (i) SOFR plus an applicable margin or (ii) the lenders’ base rate plus an applicable margin, which in each case is based on our credit rating and leverage ratio.
+Added: At October 31, 2023, the interest rate on outstanding borrowings under the New Revolving Credit Facility would have been 6.50 % per annum.
We are obligated to pay an undrawn commitment fee that is based on the average daily unused amount of the Aggregate Credit Commitment and our credit ratings and leverage ratio.
−Removed: Any proceeds from borrowings under the Revolving Credit Facility may be used for general corporate purposes.
−Removed: We and substantially all of our 100 %-owned home building subsidiaries are guarantors under the Revolving Credit Facility.
−Removed: Under the terms of the Revolving Credit Facility, at October 31, 2022, our maximum leverage ratio (as defined in the credit agreement) may not exceed 1.75 to 1.00, and we are required to maintain a minimum tangible net worth (as defined in the credit agreement) of no less than approximately $ 2.23 billion.
−Removed: Under the terms of the Revolving Credit Facility, at October 31, 2022, our leverage ratio was approximately 0.30 to 1.00 and our tangible net worth was approximately $ 5.96 billion.
−Removed: 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 $ 4.47 billion as of October 31, 2022.
−Removed: In addition, under the provisions of the Revolving Credit Facility, our ability to pay cash dividends was limited to approximately $ 3.72 billion as of October 31, 2022.
−Removed: At October 31, 2022, we had no outstanding borrowings under the Revolving Credit Facility and had outstanding letters of credit of $ 117.7 million.
+Added: Any proceeds from borrowings under the New Revolving Credit Facility may be used for general corporate purposes.
+Added: Under the terms of the New Revolving Credit Facility, at October 31, 2023, our maximum leverage ratio (as defined in the credit agreement) was not permitted to exceed 1.75 to 1.00, and we were required to maintain a minimum tangible net worth (as defined in the credit agreement) of no less than approximately $ 3.98 billion.
+Added: Under the terms of the New Revolving Credit Facility, at October 31, 2023, our leverage ratio was approximately 0.24 to 1.00 and our tangible net worth was approximately
+Added: $ 6.75 billion.
+Added: Based upon the terms of the New Revolving Credit Facility, our ability to repurchase our common stock was limited to approximately $ 3.60 billion as of October 31, 2023 and our ability to pay cash dividends was limited to approximately $ 2.76 billion as of October 31, 2023.
+Added: At October 31, 2023, we had no outstanding borrowings under the New Revolving Credit Facility and had outstanding letters of credit of $ 118.9 million.
Loans Payable – Other
9 unchanged sentences
At October 31, 2023 and 2022, senior notes consisted of the following (amounts in thousands):
−Removed: 5.875% Senior Notes due February 15, 2022 $ — $ 409,856
4.375% Senior Notes due April 15, 2023 $ — $ 400,000
7 unchanged sentences
The payment of principal and interest is fully and unconditionally guaranteed, jointly and severally, by us and substantially all of our 100 %-owned home building subsidiaries (together with Toll Brothers Finance Corp., the “Senior Note Parties”).
−Removed: The senior notes rank equally in right of payment with all the Senior Note Parties’ existing and future unsecured senior indebtedness, including the Revolving Credit Facility and the Term Loan Facility.
−Removed: The senior notes are structurally subordinated to the prior claims of creditors, including trade creditors, of our subsidiaries that are not guarantors of the senior notes.
+Added: The senior notes rank equally in right of payment with all the Senior Note Parties’ existing and future unsecured senior indebtedness, including the New Revolving Credit Facility and the Term Loan Facility.
+Added: The senior notes are subordinated to the prior claims of creditors, including trade creditors, of our subsidiaries that are not guarantors of the senior notes.
Each series of senior notes is redeemable in whole or in part at any time at our option, at prices that vary based upon the then-current rates of interest and the remaining original term of the senior notes to be redeemed.
+Added: In our second quarter of fiscal 2023, we redeemed all $ 400.0 million principal amount of 4.375 % Senior Notes due April 15, 2023, at par, plus accrued interest.
In November 2021, we redeemed the remaining $ 409.9 million principal amount of 5.875 % Senior Notes due February 15, 2022, at par, plus accrued interest.
7 unchanged sentences
We are also subject to an under usage fee based on outstanding balances, as defined in the Warehousing Agreement.
−Removed: Before the amendment and restatement in April 2022, the Warehousing Agreement was set to expire on April 2, 2022, and borrowings thereunder bore interest at LIBOR plus 1.75 % per annum.
−Removed: In April 2022, the Warehousing Agreement was amended and restated to extend the expiration date to March 31, 2023 and to cause borrowings thereunder to bear interest at the Bloomberg Short-Term Yield Index Rate (“BSBY”) plus 1.75 % per annum (with a BSBY floor of 0.50 %).
+Added: Before the amendment in March 2023, the Warehousing Agreement was set to expire on March 31, 2023.
+Added: In March 2023, the Warehousing Agreement was amended to extend the expiration date to March 30, 2024 and borrowings thereunder to bear interest at the Bloomberg Short-Term Yield Index Rate (“BSBY”) plus 1.75 % per annum (with a BSBY floor of 0.50 %).
At October 31, 2023, the interest rate on the Warehousing Agreement was 7.15 % per annum.
4 unchanged sentences
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.
+Added: On December 5, 2023, TBMC executed a new Warehousing Agreement (“New Warehousing Agreement”) with a bank which provides for loan purchases up to $ 75.0 million, subject to certain sublimits.
+Added: In addition, the New Warehousing Agreement, provides for an accordion feature under which TBMC may request that the aggregate commitments under the New Warehousing Agreement be increased to an amount up to $ 150.0 million for a short period of time.
+Added: TMBC is also subject to an under usage fee based on outstanding balances, as defined in the New Warehousing Agreement.
+Added: The New Warehousing Agreement is set to expire on December 3, 2024 and bears interest at SOFR plus 1.75 % per annum (with a SOFR floor of 2.50 %).
As of October 31, 2023, the annual aggregate maturities of our loans and notes during each of the next five fiscal years are as follows (amounts in thousands):
8 unchanged sentences
Compensation and employee benefits 212,684 223,609
−Removed: Escrow liability 44,115 36,107
+Added: Escrow liability associated with our wholly owned captive title company 42,451 44,115
Self-insurance 230,688 251,576
9 unchanged sentences
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
−Removed: fiscal 2022, 2021, and 2020 (amounts in thousands):
+Added: The table below provides a reconciliation of the changes in our warranty accrual during fiscal 2023, 2022, and 2021 (amounts in thousands):
2023 2022 2021
1 unchanged sentence
Additions - homes closed during the year 44,949 42,423 42,316
−Removed: Addition - liabilities assumed 150 100 190
+Added: Addition - liabilities assumed in an asset acquisition — 150 100
Increase in accruals for homes closed in prior years - net 12,739 10,433 9,155
+Added: Increase in accruals expected to be recovered from third parties (1)
58,000 29,000 —
3 unchanged sentences
Balance, end of year $ 206,171 $ 164,409 $ 145,062
−Removed: (1) The fiscal 2022 amount includes an additional $ 29.0 million of warranty charges expected to be recovered from our insurance carriers and suppliers, which are recorded as a receivable at October 31, 2022 and is included in “Receivables, prepaid expenses, and other assets” on our 2022 Consolidated Balance Sheet.
+Added: (1) These increases in accruals for warranty charges are expected to be recovered from our insurance carriers or suppliers, which are recorded as receivables included in “Receivables, prepaid expenses, and other assets” on our Consolidated Balance Sheets.
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).
+Added: Our recorded remaining estimated repair costs, which reflects a reduction for the aggregate amount expended to resolve claims, were approximately $ 41.1 million at October 31, 2023 and $ 46.9 million at October 31, 2022.
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: 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.
−Removed: Based on trends in claims experience over several years and lower than anticipated repair costs, in the second fiscal quarter of 2020 and again in the fourth fiscal quarter of 2021, we reduced the aggregate estimated repair costs to be incurred for known and unknown water intrusion claims by a total of $ 36.2 million.
−Removed: Because these reductions were 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 $ 36.2 million.
−Removed: Our recorded remaining estimated repair costs, which reflects a reduction for the aggregate amount expended to resolve claims, were approximately $ 46.9 million at October 31, 2022 and $ 54.7 million at October 31, 2021.
−Removed: Our recorded remaining expected recoveries from insurance carriers and suppliers were approximately $ 2.3 million at October 31, 2022 and $ 5.8 million at October 31, 2021.
−Removed: As noted above, our review process includes a number of estimates that are based on assumptions with uncertain outcomes.
−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 differences could be material.
−Removed: In addition, due to such uncertainty, we are unable to estimate the range of any such differences.
+Added: Our review process includes a number of estimates that are based on assumptions with uncertain outcomes.
+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 .
+Added: However, based on the facts and circumstances currently known, we do not believe that any such differences would be material.
The following table provides a reconciliation of our effective tax rate from the federal statutory tax rate for the fiscal years ended October 31, 2023, 2022, and 2021 ($ amounts in thousands):
15 unchanged sentences
We estimate our state tax liability based upon the individual taxing authorities’ regulations, estimates of income by taxing jurisdiction, and our ability to utilize certain tax-saving strategies.
−Removed: Based on our estimate of the allocation of income or loss among the various taxing jurisdictions and changes in tax regulations and their impact on our tax strategies, we estimated that our rate for state income taxes, before federal benefit, will be 5.6 % in fiscal 2022.
+Added: Based on our estimate of the allocation of income or loss among the various taxing jurisdictions and changes in tax regulations and their impact on our tax strategies, we estimate that our rate for state income taxes, before federal benefit, will be 6.2 % in fiscal 2023.
Our state income tax rate, before federal benefit, was 5.6 % and 5.8 % in fiscal 2022 and 2021, respectively
25 unchanged sentences
The amounts accrued for interest and penalties are included in the current portion of “Income taxes payable” on our Consolidated Balance Sheets.
−Removed: The following table provides information as to the amounts recognized in our tax provision, before reduction for applicable taxes and reversal of previously accrued interest and penalties, of potential interest and penalties in the fiscal years ended October 31, 2022, 2021, and 2020, and the amounts accrued for potential interest and penalties at October 31, 2022 and 2021 (amounts in thousands):
+Added: The following table provides information as to the amounts recognized in our tax provision, before reduction for applicable taxes and reversal of previously accrued interest and penalties, of potential interest and penalties in each of the three fiscal years ended October 31, 2023, 2022, and 2021, and the amounts accrued for potential interest and penalties at October 31, 2023 and 2022 (amounts in thousands):
Expense recognized in the Consolidated Statements of Operations and Comprehensive Income
24 unchanged sentences
Each state has its own statutes regarding the use of tax loss carryforwards.
−Removed: Some of the states in which we do business do not allow for the carryforward of losses, while others allow for carryforwards for 5 years to 20 years.
+Added: Some of the states in which we do business do not allow for the carryforward of losses, while others allow for carryforwards ranging from five years to an indefinite carryforward period.
Stockholders’ Equity
4 unchanged sentences
On February 21, 2017, our Board of Directors approved the initiation of quarterly cash dividends to shareholders.
−Removed: In March 2022, our Board of Directors approved an increase in the quarterly dividend from $ 0.17 to $ 0.20 per share, which was previously increased to $ 0.17 from $ 0.11 in March 2021.
−Removed: During the fiscal years ended October 31, 2022, 2021 and 2020, we declared and paid aggregate cash dividends of $ 0.77 , $ 0.62 and $ 0.44 per share, respectively, to our shareholders.
+Added: In March 2023, our Board of Directors approved an increase in the quarterly dividend from $ 0.20 to $ 0.21 per share, which was previously increased from $ 0.17 to $ 0.20 in March 2022.
+Added: During fiscal years 2023, 2022 and 2021, we declared and paid aggregate cash dividends of $ 0.83 , $ 0.77 and $ 0.62 per share, respectively, to our shareholders.
Stock Repurchase Program
From time to time 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 May 17, 2022, our Board of Directors renewed its authorization to repurchase 20 million shares of our common stock and terminated, effective the same date, the existing authorization that had been in effect since March 10, 2020.
+Added: On May 17, 2022, our Board of Directors renewed its authorization to repurchase 20 million shares of our common stock and terminated, effective the same date, the existing authorization that had been in effect since March 10, 2020.
The Board of Directors did not fix any expiration date for this repurchase program.
+Added: On December 13, 2023, the Board of Directors renewed its authorization to repurchase 20 million shares of our common stock and terminated, effective the same date, the existing authorization that had been in effect since May 17, 2022.
The following table provides information about the share repurchase programs for the fiscal years ended October 31, 2023, 2022, and 2021:
2 unchanged sentences
Average price per share (1)
+Added: $ 72.00 $ 49.34 $ 50.97
Remaining authorization at October 31 (in thousands) 6,716 14,577 12,563
+Added: (1) Average price per share includes costs associated with the purchases.
+Added: For the fiscal 2023 period, it also includes the excise tax accrued on our share repurchases as a result of the Inflation Reduction Act of 2022.
Transfer Restriction
3 unchanged sentences
Any direct or indirect transfer attempted in violation of this restriction would be void as of the date of the prohibited transfer as to the purported transferee.
−Removed: Accumulated Other Comprehensive Income (Loss)
−Removed: The changes in each component of accumulated other comprehensive income (loss) (“AOCI”), for fiscal years ended October 31, 2022, 2021, and 2020, were as follows (amounts in thousands):
+Added: Accumulated Other Comprehensive Income
+Added: The changes in each component of accumulated other comprehensive income (“AOCI”), for fiscal years ended October 31, 2023, 2022, and 2021, were as follows (amounts in thousands):
2023 2022 2021
1 unchanged sentence
Beginning balance $ 2,475 $ ( 6,024 ) $ ( 7,198 )
−Removed: Gains (losses) arising during the period 9,573 152 ( 2,477 )
+Added: Gains arising during the period 736 9,573 152
Tax expense ( 199 ) ( 2,424 ) ( 316 )
Net gains (losses) arising during the period 537 7,149 ( 164 )
−Removed: Gains reclassified from AOCI to net income (1)
+Added: Losses reclassified from AOCI to net income (1)
92 1,805 1,801
−Removed: Tax (expense) benefit (2)
+Added: Tax benefit (2)
( 24 ) ( 455 ) ( 463 )
−Removed: Net gains reclassified from AOCI to net income 1,350 1,338 1,962
−Removed: Other comprehensive income (loss), net of tax 8,499 1,174 ( 1,367 )
+Added: Net losses reclassified from AOCI to net income 68 1,350 1,338
+Added: Other comprehensive income, net of tax 605 8,499 1,174
Ending balance $ 3,080 $ 2,475 $ ( 6,024 )
4 unchanged sentences
Net gains on derivative instruments 6,259 28,034 6,975
−Removed: (Losses) gains reclassified from AOCI to net income (3)
+Added: (Gains) losses reclassified from AOCI to net income (3)
+Added: ( 4,784 ) ( 32 ) 211
Tax benefit (expense) (2)
−Removed: Net (losses) gains reclassified from AOCI to net income ( 24 ) 158 —
+Added: 1,212 8 ( 53 )
+Added: Net (gains) losses reclassified from AOCI to net income ( 3,572 ) ( 24 ) 158
Other comprehensive income, net of tax 2,687 28,010 7,133
23 unchanged sentences
At October 31, 2023, the aggregate unamortized value of outstanding stock-based compensation awards was approximately $ 23.2 million and the weighted-average period over which we expect to recognize such compensation costs was approximately 2.5 years.
−Removed: Stock Options:
−Removed: The fair value of each option award is estimated on the date of grant using a lattice-based option valuation model that uses ranges of assumptions noted in the following table.
−Removed: Expected volatilities were based on a combination of implied volatilities from traded options on our stock, historical volatility of our stock, and other factors.
−Removed: The expected lives of options granted were derived from the historical exercise patterns and anticipated future patterns and represent the period of time that options granted are expected to be outstanding.
−Removed: The ranges set forth below result from certain groups of employees exhibiting different behaviors impacting exercisability.
−Removed: The risk-free rate for periods within the expected life of the option is based on the U.S.
−Removed: Treasury yield curve in effect at the time of grant.
−Removed: 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, 2022, 2021, and 2020:
−Removed: 2022 2021 2020
−Removed: Expected volatility 43.65 % 43.33 % 27.42% - 28.30%
−Removed: Weighted-average volatility 43.65 % 43.33 % 27.42 %
−Removed: Risk-free interest rate 1.23 % 0.49 % 1.72% - 1.78%
−Removed: Expected life (years) 5.75 5.75 4.64 - 5.76
−Removed: Dividends 1.01 % 0.96 % 1.11 %
−Removed: Weighted-average fair value per share of options granted
−Removed: $ 24.36 $ 15.88 $ 9.68
−Removed: 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.
−Removed: Information regarding the stock compensation expense related to stock options for fiscal 2022, 2021 and 2020 was as follows (amounts in thousands):
−Removed: 2022 2021 2020
−Removed: Stock compensation expense recognized - options $ 791 $ 1,812 $ 3,144
−Removed: The following table summarizes stock option activity for our plans during the fiscal year ended October 31, 2022 (amounts in thousands, except per share amounts):
−Removed: options Weighted-
−Removed: price Weighted- average remaining contractual life (in years) Aggregate intrinsic value
−Removed: Balance, November 1, 2,998 $ 34.10
−Removed: Granted 9 $ 67.15
−Removed: Exercised ( 180 ) $ 31.35
−Removed: Cancelled ( 4 ) $ 43.65
−Removed: Balance, October 31, 2,823 $ 34.37 3.19 years $ 25,835
−Removed: Options exercisable, at October 31, 2,657 $ 34.09 2.96 years $ 24,843
−Removed: 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, 2022, 2021, and 2020, is provided below (amounts in thousands):
−Removed: 2022 2021 2020
−Removed: Intrinsic value of options exercised $ 6,179 $ 16,328 $ 23,281
−Removed: Fair market value of options vested $ 2,025 $ 3,578 $ 5,926
Performance-Based Restricted Stock Units:
3 unchanged sentences
Shares earned based on actual performance vest pro-rata over a four-year period (provided the recipients continue to be employed by us as specified in the award document) or cliff-vest at the end of a three-year performance period.
−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”), adjusted for post-vesting restrictions applicable to retirement eligible participants.
+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 RSUs were approved by the Executive Compensation Committee (“Valuation Date”), adjusted for post-vesting restrictions applicable to retirement eligible participants.
Compensation expense related to these grants is based on the Company’s performance against the related performance criteria, the elapsed portion of the performance period and the grant date fair value of the award.
To estimate the fair value of the award, we evaluate the performance goals quarterly and estimate the number of shares underlying the Performance-Based RSUs that are probable of being issued.
−Removed: A summary of the status of our nonvested Performance-Based RSUs as of October 31, 2022, and changes during the year ended October 31, 2022, is presented below (share amounts in thousands):
−Removed: 2022 Weighted-average grant date fair value
+Added: A summary of the status of our nonvested Performance-Based RSUs as of October 31, 2023, and changes during the year ended October 31, 2023, is presented below:
+Added: Number of shares (in thousands) Weighted-average grant date fair value
Nonvested at November 1, 2022 280 $ 39.79
−Removed: Granted/Target 72 $ 53.45
+Added: Granted 126 $ 39.44
Vested ( 153 ) $ 36.53
6 unchanged sentences
Aggregate grant date fair value of Performance-Based RSUs issued (in thousands) $ 7,244 $ 6,156 $ 5,030
−Removed: Performance-Based RSU expense recognized (in thousands) $ 4,346 $ 5,989 $ 5,986
+Added: Performance-Based RSUs expense recognized (in thousands) $ 5,838 $ 4,346 $ 5,989
Fair market value of Performance-Based RSUs vested (in thousands) $ 5,595 $ 4,514 $ 5,084
4 unchanged sentences
The value of the Time-Based RSUs are 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 are awarded, adjusted for post-vesting restrictions applicable to retirement eligible participants.
−Removed: The fair value of Time-Based RSUs is expensed evenly over the shorter of the vesting period or the period between the grant date and the time the award becomes nonforfeitable by the participant.
−Removed: A summary of our Time-Based RSUs nonvested shares as of October 31, 2022, and changes during the year ended October 31, 2022, is presented below (share amounts in thousands):
−Removed: 2022 Weighted-average grant date fair value
+Added: The fair value of Time-Based RSUs is expensed evenly over the shorter of the vesting period or the period between the grant date and the time the award becomes nonforfeitable to the participant.
+Added: A summary of our Time-Based RSUs nonvested shares as of October 31, 2023, and changes during the year ended October 31, 2023, is presented below:
+Added: Number of shares (in thousands) Weighted-average grant date fair value
Nonvested at November 1, 2022 842 $ 47.18
9 unchanged sentences
Aggregate fair value of Time-Based RSUs issued (in thousands) $ 11,114 $ 12,591 $ 12,820
−Removed: Time-Based RSU expense recognized (in thousands):
+Added: Time-Based RSUs expense recognized (in thousands):
$ 18,340 $ 15,738 $ 14,531
6 unchanged sentences
$ 22,836 $ 14,902 $ 12,919
−Removed: Employee Stock Purchase Plan (“ESPP”)
−Removed: Our ESPP enables substantially all employees to purchase our common stock at 95 % of the market price of the stock on specified offering dates without restriction or at 85 % of the market price of the stock on specified offering dates subject to restrictions.
−Removed: The ESPP, which is scheduled to terminate in December 2027, provides that 500,000 shares be reserved for purchase.
−Removed: At October 31, 2022, 282,000 shares were available for issuance.
−Removed: In fiscal 2022, 2021 and 2020, we issued 38,932 shares, 31,257 shares, and 54,235 shares under the ESPP, respectively.
−Removed: The expense recognized in all fiscal periods was not material.
Earnings Per Share Information
8 unchanged sentences
Weighted-average number of antidilutive options and restricted stock units (2)
−Removed: 410 166 2,141
Shares issued under stock incentive and employee stock purchase plans 2,026 507 1,011
10 unchanged sentences
Interest Rate Swap Contracts Level 2 $ 35,243 $ 45,010
−Removed: At October 31, 2022 and 2021, the carrying value of cash and cash equivalents and customer deposits held in escrow approximated fair value.
+Added: At October 31, 2023 and 2022, the carrying value of cash and cash equivalents, escrow cash held by our wholly owned captive title company, and customer deposits held in escrow approximated fair value.
The fair values of the interest rate swap contracts are included in “Receivables, prepaid expenses and other assets” in our Consolidated Balance Sheets and are determined using widely accepted valuation techniques including discounted cash flow analysis based on the expected cash flows of each swap contract.
21 unchanged sentences
The fair values of IRLCs and forward loan commitments are included in either “Receivables, prepaid expenses and other assets” or “Accrued expenses” in our Consolidated Balance Sheets, as appropriate.
−Removed: manage the risk of non-performance of investors regarding the Forward Commitments, we assess the creditworthiness of the investors on a periodic basis.
+Added: To manage the risk of non-performance of investors regarding the Forward Commitments, we assess the creditworthiness of the investors on a periodic basis.
We recognize inventory impairment charges based on the difference in the carrying value of the inventory and its fair value at the time of the evaluation.
4 unchanged sentences
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.
−Removed: Impairments on operating communities were insignificant in each of the three fiscal years ended October 31, 2022, 2021, and 2020 and, accordingly, we did not disclose the ranges of certain quantitative unobservable inputs utilized in determining the fair value of such impaired operating communities.
−Removed: In fiscal 2022, 2021 and 2020, we recognized $ 19.7 million, $ 19.8 million and $ 31.7 million of impairment charges on land owned for future communities relating to four , six and nine communities, respectively.
−Removed: As of the period the impairment charges were recognized, the estimated fair value of these communities in the aggregate, net of impairment charges, were $ 49.5 million, $ 23.9 million, and $ 21.8 million respectively.
−Removed: 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.
−Removed: The range of sales price per lot utilized in determining fair values was approximately $ 25,000 - $ 500,000 per lot.
−Removed: The table below provides, as of the dates indicated, the book value and estimated fair value of our debt at October 31, 2022 and 2021 (amounts in thousands):
+Added: Impairments of inventory were insignificant in each of the three fiscal years ended October 31, 2023, 2022, and 2021 and, accordingly, we did not disclose the ranges of certain quantitative unobservable inputs utilized in determining the fair value of these impaired communities.
+Added: The table below provides, as of the dates indicated, the book value, excluding any bond discounts, premiums, and deferred issuance costs, and estimated fair value of our debt at October 31, 2023 and 2022 (amounts in thousands):
Fair value hierarchy Book value Estimated
24 unchanged sentences
We used a 5.83 %, 5.26 %, and 2.27 % discount rate in our calculation of the present value of our projected benefit obligations at October 31, 2023, 2022, and 2021, respectively.
−Removed: The rates represent the approximate long-
−Removed: term investment rate at October 31 of the fiscal year for which the present value was calculated.
+Added: The rates represent the approximate long-term investment rate at October 31 of the fiscal year for which the present value was calculated.
Information related to the plans is based on actuarial information calculated as of October 31, 2023, 2022 and 2021.
54 unchanged sentences
At October 31, 2023, we had outstanding surety bonds amounting to $ 871.6 million, primarily related to our obligations to governmental entities to construct improvements in our communities.
−Removed: We estimate that $ 413.1 million of work remains on these improvements.
+Added: We estimate that approximately $ 355.6 million of work remains on these improvements.
We have an additional $ 323.3 million of surety bonds outstanding that guarantee other obligations.
We do not believe it is probable that any outstanding bonds will be drawn upon.
−Removed: At October 31, 2022, we had outstanding letters of credit of $ 117.7 million under our Revolving Credit Facility.
+Added: At October 31, 2023, we had outstanding letters of credit of $ 118.9 million under our New Revolving Credit Facility.
These letters of credit were issued to secure our various financial obligations, including insurance policy deductibles and other claims, land deposits, and security to complete improvements in communities in which we are operating.
32 unchanged sentences
At October 31, 2022, ROU assets and lease liabilities were $ 116.7 million and $ 139.7 million, respectively.
−Removed: Payments on lease liabilities totaled $ 17.7 million and $ 19.4 million for the years ending October 31, 2022 and 2021, respectively.
+Added: Payments on lease liabilities totaled $ 20.2 million, $ 17.7 million, and $ 19.4 million for the years ending October 31, 2023, 2022, and 2021, respectively.
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.
−Removed: For the fiscal years ending October 31, 2022, 2021, and 2020, our total lease expense was $ 25.6 million, $ 22.2 million, and $ 24.7 million, respectively, inclusive of variable lease costs of approximately $ 3.3 million, $ 3.1 million, and $ 3.1 million, respectively.
+Added: For the fiscal years ending October 31, 2023, 2022, and 2021, our total lease expense was $ 27.1 million, $ 25.6 million,
+Added: and $ 22.2 million, respectively, inclusive of variable lease costs of approximately $ 4.2 million, $ 3.3 million, and $ 3.1 million, respectively.
Short-term lease costs and sublease income was de minimis.
19 unchanged sentences
2023 2022 2021
+Added: Interest income $ 35,133 $ 6,180 $ 4,320
Income from ancillary businesses 2,846 24,668 36,711
−Removed: Management fee income from Land Development and Home Building Joint Ventures – net
+Added: Management fee income earned by home building operations
4,462 7,968 1,646
−Removed: Gain on litigation settlement – net
−Removed: Directly expensed interest — — ( 2,440 )
+Added: Gain on litigation settlements – net
+Added: 27,683 141,234 —
Other ( 2,606 ) ( 8,673 ) ( 2,063 )
5 unchanged sentences
Coincident with this settlement, we seeded a new Toll Brothers charitable foundation with $ 10.0 million which was recorded in Selling, general and administrative in our Consolidated Statements of Operations and Comprehensive Income in fiscal 2022.
−Removed: Management fee income from Land Development and Home Building Joint Ventures - net includes fees earned by our City Living and home building operations.
−Removed: Income from ancillary businesses is generated by our mortgage, title, landscaping, smart home technology, Gibraltar, apartment living, and golf course and country club operations.
−Removed: The table below provides revenues and expenses for these ancillary
−Removed: businesses for the years ended October 31, 2022, 2021, and 2020 (amounts in thousands):
+Added: Income from ancillary businesses is generated by our mortgage, title, landscaping, smart home technology, Gibraltar, apartment living, city living, and golf course and country club operations.
+Added: The table below provides revenues and expenses for these ancillary businesses for the years ended October 31, 2023, 2022, and 2021 (amounts in thousands):
2023 2022 2021
1 unchanged sentence
Expenses $ 137,426 $ 110,842 $ 102,929
−Removed: Other income $ — $ — $ 12,970
In fiscal 2022, our smart home technology business recognized a $ 9.0 million gain from a bulk sale of security monitoring accounts, which is included in income from ancillary businesses above.
−Removed: 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.
−Removed: In addition, we recognized a previously deferred gain of $ 3.8 million related to the sale of a golf club property from fiscal 2019.
−Removed: In fiscal 2022, 2021 and 2020, our apartment living operations earned fees from unconsolidated entities of $ 23.2 million, $ 20.2 million, and $ 14.0 million, respectively.
−Removed: Fees earned by our apartment living operations are included in income from ancillary businesses.
+Added: In fiscal 2023 and fiscal 2022, we recognized $ 8.4 million and $ 0.3 million of write-offs related to previously incurred costs that we believed not to be recoverable in our apartment rental development business operations, respectively.
+Added: In fiscal 2023, income from ancillary businesses included management fees earned on our apartment rental development, high-rise urban luxury condominium, and Gibraltar unconsolidated entities and operations totaling $ 34.7 million.
+Added: In fiscal 2022 and 2021, income from ancillary businesses included management fees earned on our apartment rental development and Gibraltar unconsolidated entities and operations totaling $ 25.9 million and $ 22.7 million, respectively.
+Added: Prior to fiscal 2023, management fees earned on our high-rise luxury condominium unconsolidated entities were included in “Management fees earned by home building operations” above.
Information on Segments
The table below summarizes revenue and income (loss) before income taxes for our segments for each of the fiscal years ended October 31, 2023, 2022, and 2021 (amounts in thousands).
−Removed: At October 31, 2022, we concluded that our City Living operations were no longer a reportable operating segment, primarily due to its insignificance as a result of the change in structure and shift in strategy for its operations.
−Removed: Therefore, we concluded we have five operating segments as reflected below.
−Removed: Amounts reported in prior periods have been restated to conform to the fiscal 2022 presentation.
Revenue Income (loss) before income taxes
2023 2022 2021 2023 2022 2021
−Removed: (restated) (restated) (restated) (restated)
North $ 1,494,127 $ 1,853,720 $ 2,011,896 $ 197,414 $ 280,829 $ 313,694
13 unchanged sentences
interest income;
−Removed: income from certain of our ancillary businesses, including our apartment rental development business;
+Added: income from certain of our ancillary businesses, including our apartment rental development business and our high-rise urban luxury condominium operations;
and income from our Rental Property Joint Ventures and Gibraltar Joint Ventures.
8 unchanged sentences
Total consolidated $ 12,527,018 $ 12,288,714
−Removed: “Corporate and other” is comprised principally of cash and cash equivalents, restricted cash, deferred tax assets, 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.
+Added: “Corporate and other” is comprised principally of cash and cash equivalents, restricted cash, investments in our Rental Property Joint Ventures, expected recoveries from insurance carriers and suppliers, our Gibraltar investments and operations, manufacturing facilities, our apartment rental development and high-rise urban luxury condominium businesses, 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):
7 unchanged sentences
Total consolidated $ 173,175 $ 663,413 $ 8,220,990 $ 9,057,578
−Removed: Balances at October 31, 2021 (restated) (restated) (restated)
+Added: Balances at October 31, 2022
North $ 25,876 $ 125,762 $ 1,142,060 $ 1,293,698
12 unchanged sentences
Total consolidated $ 30,706 $ 32,741 $ 26,535
+Added: In the year ended October 31, 2023, we recognized $ 30.6 million of land impairment charges included in land sales and other cost of revenues, of which $ 15.6 million, $ 10.3 million, $ 2.2 million, and $ 2.5 million were in our North, Mid-Atlantic, Pacific
+Added: and Corporate and other segments, respectively.
+Added: In the year ended October 31, 2022 we recognized $ 6.8 million of land impairment charges included in land sales and other cost of revenues in our North segment.
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):
3 unchanged sentences
2023 2022 2023 2022 2021
−Removed: (restated) (restated) (restated)
North $ 65,285 $ 49,385 $ 972 $ 1,068 $ ( 641 )
14 unchanged sentences
Cost of inventory acquired through seller financing, municipal bonds, or included in accrued expenses - net $ 359,042 $ 273,893 $ 174,726
−Removed: Increase in receivables, prepaid expenses, and other assets and accrued expenses related to the adoption of ASU 2016-02 and other lease activity $ — $ — $ 122,269
Reclassification from inventory to property, construction, and office equipment - net $ 1,170 $ — $ 39,309
2 unchanged sentences
Transfer of other assets to property, construction, and office equipment - net $ 47,280 $ 16,168 $ —
−Removed: Unrealized gain on derivatives $ 34,680 $ 10,330 $ —
−Removed: Business Acquisitions:
−Removed: Fair value of assets purchased $ — $ — $ 63,854
−Removed: Liabilities assumed $ — $ — $ 3,505
−Removed: Cash paid $ — $ — $ 60,349
+Added: Unrealized (loss) gain on derivatives $ ( 9,767 ) $ 34,680 $ 10,330
At October 31,
11 unchanged sentences
Land sales and other $ 68,243 $ 13,040 $ 16,881 $ 30,747
−Removed: Gross profit:
+Added: Gross profit (loss):
Home sales $ 810,375 $ 742,653 $ 657,220 $ 448,499
1 unchanged sentence
Income before income taxes $ 604,966 $ 553,017 $ 430,592 $ 253,796
−Removed: $ 841,144 $ 365,951 $ 295,815 $ 200,816
Net income $ 445,536 $ 414,789 $ 320,216 $ 191,530
−Removed: $ 640,536 $ 273,467 $ 220,593 $ 151,904
Earnings per share (2)
6 unchanged sentences
Land sales and other $ 131,182 $ 238,465 $ 91,012 $ 103,729
+Added: Gross profit (loss):
Home sales $ 963,038 $ 585,634 $ 527,264 $ 397,825
1 unchanged sentence
Income before income taxes (1)
+Added: $ 841,144 $ 365,951 $ 295,815 $ 200,816
Net income (1)
+Added: $ 640,536 $ 273,467 $ 220,593 $ 151,904
Earnings per share (2)
7 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.