What changed in this filing

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Item 1. Business

2025-12-19 compared with 2024-12-20 · 54 added, 61 removed, 346 unchanged (25% of the section changed)

5 unchanged sentences

In recent years, we have pursued a strategy of broadening our product lines, price points and geographic footprint, as well as increasing the number of quick move-in (or “spec”) homes that we sell relative to our traditional build-to-order homes.

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

We cater to luxury first-time, move-up, empty-nester (move-down), active-adult and second-home buyers in the United States.

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

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At October 31, 2025, we had 1,137 communities in various stages of planning, development or operations containing approximately 76,100 home sites that we owned or controlled through options.

At fiscal year-end, were were selling from 408 of these communities.

At fiscal year-end, we were selling from 446 of these communities.

Backlog consists of homes under contract but not yet delivered to our home buyers.

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We also develop master-planned and golf course communities as well as operate, in certain regions, our own lumber distribution, house component assembly and manufacturing operations.

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

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

At October 31, 2024, we or joint ventures in which we have an interest, controlled 67 land parcels as for-rent apartment projects containing approximately 21,300 planned or completed units.

In addition to our residential for-sale business, we also develop and operate urban and suburban for-rent apartment and student housing communities (“Apartment Living”) primarily through joint ventures.

These projects are located in various metropolitan areas throughout the country and have generally been operated or developed with partners under the brand names Toll Brothers Apartment Living ® and Toll Brothers Campus Living ® .

At October 31, 2025, we or joint ventures in which we have an interest, controlled 73 land parcels as for-rent apartment or student housing projects containing approximately 22,300 planned or completed units.

On September 18, 2025, we announced our intention to exit the multifamily development business, beginning with the sale of our interests in approximately half of our portfolio, as well as our operating platform, to Kennedy Wilson for a purchase price of approximately $380 million, as adjusted to reflect investments in certain assets since the September announcement.

In December 2025, we completed a significant portion of the sale to Kennedy Wilson, including our operating platform, with the remaining portion expected to occur in the first half of our fiscal 2026.

In connection with the transaction, Kennedy Wilson has agreed to assume our management responsibilities for our retained interests in for-rent properties.

We expect to sell our interests in these retained assets over time.

See “Investments in Unconsolidated Entities” below for more information relating to our joint ventures.

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• Boston, Massachusetts metropolitan area

• New Haven County, Connecticut

• New Haven and Fairfield Counties, Connecticut

• Westchester and Dutchess Counties, New York

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• Virginia and Maryland suburbs of Washington, D.C.

• Raleigh and Charlotte, North Carolina metropolitan areas

• Raleigh, Charlotte and Wilmington, North Carolina metropolitan areas

• Nashville, Tennessee

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• Atlanta, Georgia metropolitan area

• Southeast and southwest coasts and the Jacksonville, Orlando, and Tampa areas of Florida

• Southeast coast, southwest coast and the Panhandle of Florida

• Jacksonville, Orlando, and Tampa areas of Florida

• Detroit, Michigan metropolitan area

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

While historically most of our homes have been sold on a build-to-order basis where we do not begin construction of the home until we have a signed contract with a customer, over the past two years, we have increased the number of spec homes in most of our communities, which are homes started without a signed agreement with a customer.

In fiscal 2024 and 2023, approximately 49% and 27% of deliveries were spec homes.

While historically most of our homes have been sold on a build-to-order basis where we do not begin construction of the home until we have a signed contract with a customer, over the past three years, we have increased the number of spec homes in most of our communities, which are homes started without a signed agreement with a customer.

In fiscal 2025 and 2024, approximately 54% and 49% of deliveries were spec homes, respectively.

These homes allow us to compete more effectively with existing homes available in the market, especially for homebuyers that require a home within a short time frame.

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

Increasingly, we are modifying designs and the number of options we provide to offer our customers a curated experience while gaining efficiencies in the home building process, particularly in respect to our affordable luxury product and our spec homes.

Increasingly, we are modifying designs and the number of options we provide to offer our customers a curated experience while gaining efficiencies in the home building process, particularly with respect to our affordable luxury and spec homes.

We use our own architectural staff and also engage third-party architectural firms to develop new designs.

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A greater variety of options are generally available for detached build-to-order homes as compared to attached homes and spec homes.

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

living areas.

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

We also offer numerous interior fit-out options such as flooring, wall tile, plumbing, cabinets, fixtures, appliances, lighting, and home-automation and security technologies.

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We have also significantly expanded our geographic footprint over the past decade.

In addition to our traditional “move-up” home buyer, we are focusing on the “empty-nester” market, the millennial generation, and the affordable luxury buyer.

In addition to our traditional “move-up” home buyer, we are focusing on the “empty-nester” market, the millennial and Gen Z generations, and the affordable luxury buyer.

We market to the “empty-nester” (or “move-down”) market, which we believe has strong growth potential.

We have developed a number of home designs with features such as single-story living and first-floor primary bedroom suites, as well as communities with recreational amenities, such as golf courses, marinas, pool complexes, country clubs, fitness and recreation centers that we believe appeal to this category of home buyer.

We have developed a number of home designs with features such as single-story living and first-floor primary bedroom suites, as well as communities with recreational amenities, such as golf courses, marinas, pool complexes, country clubs, and fitness and recreation centers that we believe appeal to this category of home buyer.

We have integrated certain of these designs and features in some of our other home types and communities.

As of October 31, 2025, we were selling from 81 age-restricted active-adult communities, in which at least one home occupant must be at least 55 years of age.

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

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

With the millennial generation in its prime family formation years and the Gen Z generation either in or approaching adulthood, we also continue to focus on these groups with our core suburban homes, affordable luxury offerings, and urban condominiums.

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

We are currently developing one such community with a joint venture partner in West New York, New Jersey.

Our City Living communities are generally high-rise condominiums that take an extended period of time to construct.

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At October 31, 2025, we had 3,043 spec homes in our communities, of which 1,783 were under construction and 1,260 were completed.

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

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

The percentage of the 11,292 homes delivered in fiscal 2025 within the various ranges of base sales price was as follows:

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

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

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

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

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In fiscal 2025, 2024 and 2023, we did not make any acquisitions.

In fiscal 2022, we acquired substantially all of the assets and operations of a privately-held home builder with operations in San Antonio, Texas for approximately $48.1 million in cash.

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

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

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

In addition to purchasing land parcels outright, we strive to enter into option agreements and other arrangements

to defer the acquisition of land until we are closer in time to delivering the completed home to our customer.

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

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

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During fiscal 2025 and 2024, we acquired control of approximately 12,700 and 14,900 home sites, respectively, net of options terminated and lots sold.

During fiscal year 2024 and 2023, we forfeited control of over 4,000 lots in each year that were subject to land purchase agreements primarily because the planned community no longer met our development criteria.

During fiscal year 2025 and 2024, we forfeited control of over 5,900 and 4,000 lots, respectively, that were subject to land purchase agreements primarily because the planned community no longer met our development criteria.

At October 31, 2025, we owned or controlled approximately 76,100 home sites, as compared to approximately 74,700 home sites at October 31, 2024.

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Of the $7.54 billion of land purchase contracts, we paid or deposited $744.5 million.

If we acquire all

of these land parcels, we will be required to pay an additional $5.55 billion.

If we acquire all of these land parcels, we will be required to pay an additional $6.80 billion.

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

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

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

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

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

We have a two-step sales process.

The first step takes place when a potential home buyer visits one of our communities (either in person or virtually) and decides to purchase one of our homes, at which point the home buyer signs a non-binding deposit agreement and provides a small, refundable deposit.

This deposit will reserve, for a short period of time, the home site or unit that the home buyer has selected.

This deposit also locks in the base price of the home.

Because these deposit agreements are non-binding, they are not recorded as signed contracts, nor are they recorded in backlog.

Deposit rates are tracked on a weekly basis to help us monitor the strength or weakness in demand in each of our communities.

We have a two-step sales process that covers most, but not all, of our sales with some home buyers proceeding directly to the second step described below.

The first step takes place when a potential home buyer visits one of our communities (either in person or virtually) and decides to purchase one of our homes.

At this point the home buyer signs a non-binding reservation agreement.

This agreement will reserve, for a short period of time, the home site or unit that the home buyer has selected, and caps the base price of the home.

Because these reservation agreements are non-binding, they are not recorded as signed contracts, nor are they recorded in backlog.

Reservation rates are tracked on a weekly basis to help us monitor the strength or weakness in demand in each of our communities.

If demand for homes in a particular community is strong, we determine whether the base sales prices in that community should be increased.

If demand for the homes in a particular community is weak, we determine whether or not sales incentives and/or discounts on home prices should be adjusted.

The second step in the sales process occurs when we sign a binding agreement of sale contract with the home buyer and the home buyer provides a larger cash down payment that is generally non-refundable.

The second step in the sales process occurs when we sign a binding agreement of sale contract with the home buyer and the home buyer provides a significant cash down payment that is generally non-refundable.

Cash down payments averaged approximately 7% of the total purchase price of a home in fiscal year 2025.

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

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

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

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

These representations and warranties primarily involve the absence of misrepresentations by the borrower or other parties, the appropriate underwriting of the loan,

and in some cases, a required minimum number of payments to be made by the borrower.

These representations and warranties primarily involve the absence of misrepresentations by the borrower or other parties, the appropriate underwriting of the loan, and in some cases, a required minimum number of payments to be made by the borrower.

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

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

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

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

At October 31, 2024, we had investments of $1.01 billion in these unconsolidated entities and were committed to invest or advance up to an additional $312.8 million to these entities if they require additional funding.

In fiscal 2024, 2023, and 2022, we recognized (loss) income from the unconsolidated entities in which we had an investment of $(23.8) million, $50.1 million, and $23.7 million, respectively.

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

October 31, 2025, we had investments of $1.03 billion in unconsolidated entities and were committed to invest or advance up to an additional $331.2 million to these unconsolidated entities if they require additional funding.

Excluded from these investments in unconsolidated entities is $121.2 million that have been classified within “Real estate and related assets held for sale” on our Consolidated Balance Sheet as of October 31, 2025 and we have a remaining funding commitment of $23.5 million to these entities.

In fiscal 2025, 2024, and 2023, we recognized income (loss) from the unconsolidated entities in which we had an investment of $19.1 million, $(23.8) million, and $50.1 million, respectively.

In addition, we earned construction and management fee income from these unconsolidated entities of $24.2 million in fiscal 2025, $40.0 million in fiscal 2024, and $39.2 million in fiscal 2023.

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

At October 31, 2024, we had $388.6 million invested in our Land Development Joint Ventures and funding commitments of $243.0 million to six of the Land Development Joint Ventures which will be funded if additional investments in the ventures are required.

At October 31, 2024, eleven of these joint ventures had aggregate loan commitments of $639.6 million and outstanding borrowings against these commitments of $381.6 million.

At October 31, 2025, we had $553.4 million invested in our Land Development Joint Ventures and funding commitments of $315.5 million to 11 of the Land Development Joint Ventures which will be funded if additional investments in the ventures are required.

At October 31, 2025, 15 of these joint ventures had aggregate loan commitments of $922.7 million and outstanding borrowings against these commitments of $547.8 million.

At October 31, 2025, our Land Development Joint Ventures owned approximately 28,900 home sites.

At October 31, 2024, we had agreed to acquire 316 home sites from four of our Land Development Joint Ventures for an aggregate purchase price of approximately $26.8 million.

In addition, we expect to purchase approximately 9,000 additional

home sites over a number of years from several of these joint ventures.

At October 31, 2025, we had agreed to acquire 832 home sites from five of our Land Development Joint Ventures for an aggregate purchase price of approximately $111.3 million.

In addition, we expect to purchase approximately 8,800 additional home sites over a number of years from several of these joint ventures.

The purchase prices of these home sites will be determined at a future date.

1 unchanged sentence

Home Building Joint Ventures

At October 31, 2024, we had an aggregate $58.4 million of investments in our Home Building Joint Ventures to develop luxury for-sale homes.

In fiscal 2024, the value of net contracts signed by our Home Building Joint Ventures was $125.0 million (101 homes), and they delivered $267.6 million (238 homes) of revenue.

At October 31, 2025, we had a $14.8 million investment in one Home Building Joint Venture to develop luxury for-sale homes.

The project is still under development and, in fiscal 2025, the value of net contracts signed by this Home Building Joint Venture was $4.8 million (2 homes).

At October 31, 2025, this joint venture had an aggregate loan commitment of $63.5 million and outstanding borrowings against this commitment of $6.5 million.

Rental Property Joint Ventures

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

At October 31, 2024, we had an aggregate of $549.2 million of investments in 40 Rental Property Joint Ventures.

At October 31, 2024, we or joint ventures in which we have an interest controlled 67 land parcels that are planned or operating as for-rent apartment projects containing approximately 21,300 units.

As noted above, on September 18, 2025, we agreed to sell our interests in approximately half of our Apartment Living portfolio to Kennedy Wilson for approximately $380 million.

Excluding our interests being sold to Kennedy Wilson, at October 31, 2025, we had an aggregate of $448.5 million of investments in 21 Rental Property Joint Ventures.

At October 31, 2025, joint ventures in which we had an interest had aggregate loan commitments of $2.07 billion and outstanding borrowings against these commitments of $1.77 billion.

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

At October 31, 2024, we had approximately 4,500 units in for-rent apartment projects that were occupied or ready for occupancy, 5,700 units in the lease-up stage, 6,500 units in the design phase or under development, and 4,700 units in the planning stage.

Of the 21,300 units at October 31, 2024, 13,300 were owned by joint ventures in which we have an interest, approximately 2,400 were owned by us, and land underlying 5,600 were under contract to be purchased by us.

These projects are located in multiple metropolitan areas throughout the country and have been operated or developed with joint venture partners.

Regulatory and Environmental Matters

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Human Capital Resources

At October 31, 2024, we employed approximately 4,900 persons full-time, as compared to approximately 4,800 employees at October 31, 2023.

At October 31, 2024, approximately 1% of our employees were covered by a collective bargaining agreement.

At October 31, 2025 and October 31, 2024, we employed approximately 4,900 persons full-time employees.

We believe our employees are among our most important resources and are critical to our continued success.

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We pay our employees competitively and offer a broad range of company-paid benefits, which we believe are competitive with others in our industry.

We are committed to hiring, developing and supporting a diverse and inclusive workplace.

We are committed to cultivating a workplace where everyone is welcome and treated with fairness, dignity and respect.

Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.

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

In recent years, we have implemented protocols and procedures to protect our employees, subcontractors and customers.

For example, we have expanded technologies that allow for virtual interactions in many aspects of our business, including customer facing activities.

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

Many of these modifications have been well received by our employees with minimal disruption to our operations and have continued through fiscal 2024.

Available Information

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anticipated results from our investments in unconsolidated entities;

our plans and expectations regarding our announced exit from the multifamily development business, including the disposition of our remaining assets;

our ability to acquire land and pursue real estate opportunities;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business