TOL 10-K & 10-Q changes, risk factors and insider trading

WeHousing are subject tomarket demand fluctuations inhave theadversely housingaffected, industry.and Anymay reductioncontinue in demand wouldto adversely affect our business, results of operations, and financial condition.

Demand for our homes and rental apartments is subject to fluctuations and difficult to predict, often due to factors outside of our control, such as employment levels, consumer confidence and spending, overall housing demand, availability of financing for homebuyers, interest rates, availability, quality and prices of new homes compared to existing inventory, and demographic trends. In a housing market downturn, our sales and results of operations will beare adversely affected; we may have significant inventory impairments and other write-offs; our gross margins mayare likely to decline significantly from historical levels; and we may incur substantial losses from operations. At any particular time, we cannot accurately predict whether housing market conditions will improve, deteriorate or continue as they exist at that time.

The home building industry is highly competitive for suitable land and the risk inherent in purchasing and developing land increases as consumer demand for housing increases. In the long term, our operations depend on our ability to obtain land at reasonable prices for the development of our residential communities. At October 31, 2024,2025, we had approximately 74,70076,100 home sites that we owned or controlled through options. In the future, changes in the availability of land, competition for available land, availability of financing to acquire land,land (whether directly for us or indirectly through land banks or other land financing vehicles), zoning regulations that limit housing density, and other market conditions may hurt our ability to obtain land for new residential communities at acceptable prices. If the supply of land appropriate for the development of our residential communities becomes more limited because of these factors or for any other reason, the cost of land could increase and/or the number of homes that we are able to sell and build could be reduced.

We cannot guarantee that (i) our strategies, which include expanding our presence in existing markets and potential expansion into new markets, offering a wide variety of products and price points, becoming a more capital and operationally efficient home builder, and maintaining an appropriate balance of spec homes for sale relative to our build-to-order homes, and any related initiatives or actions (including home builder acquisitions or dispositions, like our previously disclosed planned exit from the multifamily development business), will be successful or that they will generate growth, earnings or returns at any particular level or within any particular time frame; (ii) in the future we will achieve positive operational or financial results or results in any particular metric or measure equal to or better than those attained in the past; or (iii) we will perform in any period as well as other home builders. We also cannot provide any assurance that we will be able to maintain our strategies, and any related initiatives or actions, in the future and, due to unexpectedly favorable or unfavorable market conditions or other factors, we may determine that we need to adjust, refine or abandon all or portions of our strategies, and any related initiatives or actions, though we cannot guarantee that any such adjustments will be successful. The failure of any one or more of our present strategies, or any related initiatives or actions, or the failure of any adjustments that we may pursue or implement, would likely have an adverse effect on our ability to increase the value and profitability of our business; on our ability to operate our business in the ordinary course; on our overall liquidity; and on our consolidated financial statements, and the effect, in each case, could be material.

A significant portion of our revenues and income from operations are concentrated in California. In addition, our gross margin in California tends to be higher than Company average. Factors beyond our control could have a material adverse effect on our revenues, gross margin and/or income from operations generated in California. These factors include, but are not limited to: changes in the regulatory and fiscal environment; prolonged economic downturns; high levels of foreclosures; lack of affordability; alack of suitable land for development at reasonable prices; lack of foreign buyer demand; severe weather including drought; natural disasters such as earthquakes and wild fireswildfires; the risk of local governments imposing building moratoriums and of state or local governments imposing regulations that increase building costs; environmental incidents; and declining population and/or growth rates and the related reduction in housing demand in this region. If home sale activity or sales prices decline in California, our costs may not decline at all or at the same rate and our inventory and lots owned or controlled in the state may be at risk of impairment. As a result, our consolidated financial results may be adversely affected.

Our quarterly operating results willcould fluctuate depending on the timing of completion of construction of our multi-unit condominium buildings, levels of pre-sales, and the relatively short delivery time of the pre-sold units once the building is completed. These sales can result in significant gains or losses that we recognize on our Consolidated Statements of Operations and Comprehensive Income as income from unconsolidated entities. The timing of these gains or losses cannot be predicted with certainty and, as a result, can cause our net income to fluctuate from quarter to quarter.

In addition to our residential for-sale business, we also develop, operate and/or, in certain situations,or sell for-rent apartments, which we accomplish mainly through joint ventures. As noted above, we have agreed to sell a substantial portion of our interests in our for-rent joint ventures and intend to entirely exit the business over time. Often, the joint venture through which we develop and lease-up a rental property sells the property to a third party or to the joint venture partner upon stabilization. These sales can result in significant gains or losses that we recognize on our Consolidated Statements of Operations and Comprehensive Income as income from unconsolidated entities. The timing of these gains or losses cannot be predicted with certainty and, as a result, can cause our net income to fluctuate from quarter to quarter.

We have investments in and commitments to certain unconsolidated joint ventures with unrelated parties generally involved in land development, home building and apartment rental development activities. At October 31, 2024, we had investments of $1.01 billion in unconsolidated entities and were committed to invest or advance up to an additional $312.8 million to these unconsolidated entities if they require additional funding. These joint ventures generally borrow money to help finance their activities. In certain circumstances, the joint venture participants, including us, are required to provide guarantees of certain obligations relating to the joint ventures. In most of these joint ventures, we do not have a controlling interest and, as a result, are not able to require these joint ventures or their participants to honor their obligations or renegotiate them on acceptable terms. If the joint ventures or their participants do not honor their obligations, we may be required to expend additional resources or suffer losses, which could be significant. In addition, because we generally do not control these joint ventures, our investments may be illiquid and we may not always agree with our partners on major decisions, such as asset sales. Disputes between us and partners may result in litigation or arbitration that could increase our expenses and distract our management team. In addition, we may in certain circumstances be liable for the actions of its third-party partners.

As a home builder, we are subject to construction defect and home warranty claims arising in the ordinary course of business. These claims are common in the home building industry and can be costly. In addition, insuring against construction defect and product liability claims has become increasingly difficult due to limited coverage options, high costs, lack of reinsurance options and the exit of insurers from the market.Theremarket. There can be no assurance that any form of insurance coverage will be available in the future or, if it is offered, that it will be available on reasonable terms. If the limits or coverages of our current and former insurance programs prove inadequate, or we are not able to obtain adequate, or reasonably priced, insurance against these types of claims in the future, or the amounts currently provided for future warranty or insurance claims are inadequate, we may experience losses that could negatively impact our financial results.

Our quarterly operating results fluctuate with the seasons; normally, a significant portion of our agreements of sale are entered into with customers in the winter and spring months. Construction of our build-to-order homes typically proceeds after signing the agreement of sale with our customer and typically require nine to 12 months to complete, although construction times may extend beyond 12 months due to a variety of reasons, including high demand, labor shortages, supply chain disruption and municipal related delays. In addition, weather-related events may occur from time to time, delaying starts or closings or increasing costs and reducing profitability. In addition, delays in opening new communities or new sections of existing communities could have an adverse impact on home sales and revenues. Expenses are not incurred and recognized evenly throughout the year. Because of these factors, our quarterly operating results may be uneven and may be marked by lower revenues and earnings in some quarters than in others.

In the recent past, strong demand for homes combined with supply chain disruptions, labor shortages and municipal related delays caused our construction cycles to lengthen and the costs of building materials to increase. Longer construction cycles can lead to increased cancellation rates, lower customer satisfaction and brand diminishment. In addition, shortages and cost increases in building materials and tightness in the labor market can erode our profit margins and adversely affect our results of operations, especially if such disruptions, shortages and delays persist for extended periods of time. Changes in laws, government regulations, or enforcement priorities, such as the imposition of tariffs (in particular on materials imported from Canada or Mexico) or changes in immigration laws and/or their enforcement, could result in higher component costs, tighter overall labor conditions and a shortage of skilled tradespeople, which could in turn adversely affect our business.

We are subject to one collective bargaining agreement that covers approximately 1% of our employees. We have not experienced any work stoppages due to strikes by unionized workers, but we cannot make assurances that there will not be any work stoppages due to strikes or other job actions in the future. We engage independent contractors that employ non-unionized workers to construct our homes. At any given point in time, the employees of those subcontractors may decide to unionize.

Our business and results of operations depend substantially on our ability to obtain financing and lines of credit, whether from bank borrowings or from financing in the public debt markets. Our Revolving Credit Facility, which provides for $1.955$2.35 billion in committed borrowing capacity and letters of credit, and substantial portions of our $650.0 million term loan mature in February 2028, with smaller portions maturing in November 2025 and November 2026.2030. In addition, $1.60$1.75 billion of our senior notes become due and payable at various times from NovemberMarch 20252027 through NovemberJune 2029.2035. We cannot be certain that we will be able to replace existing financing and credit lines or find additional sources of financing in the future on favorable terms or at all.

Increases in interest rates can make it more difficult and/or expensive for us to obtain the funds and credit we need to operate our business. TheFollowing the expiration of certain interest rate swaps in October 2025, the entire amount of interest we incur on our revolving bank credit facility and term loan (exclusive of the amount we have hedged with interest rate swap transactions through October 2025 as further described in Note 6 – “Loans Payable, Senior Notes, and Mortgage Company Loan Facility” in Item 15(a)1 of this Form 10-K) fluctuates based on changes in short-term interest rates and the amount of borrowings we incur and letters of credit that are issued. Increases in interest rates generally and/or any downgrade in the ratings that national rating agencies assign to our outstanding debt securities could increase the interest rates we must pay on any subsequent issuances of debt securities, and any such ratings downgrade could also make it more difficult for us to sell such debt securities.

Our results of operations also depend on the ability of a substantial portion of our potential home buyers to obtain mortgages for the purchase of our homes. Mortgage rates have increased significantly since January 2022, which has negatively impacted the overall housing market. A variety of factors, including market conditions and government actions could cause mortgage rates to increase even further in the future. Any uncertainty in the mortgage markets and its impact on the overall mortgage market, including the tightening of credit standards, future increases in the effective cost of home mortgage financing (including as a result of changes to federal tax law), and increased government regulation, could adversely affect the ability of our customers to obtain financing for a home purchase, thus preventing our potential home buyers from purchasing our homes. In addition, where our potential home buyers must sell their existing homes in order to buy a home from us, increases in mortgage costs and/or lack of availability of mortgages could prevent the buyers of our potential home buyers’ existing homes from obtaining the mortgages they need to complete their purchases, which would result in our potential home buyers’ inability to buy a home from us. Similar risks apply to those buyers whose contracts are in our backlog of homes to be delivered. If our home buyers, potential buyers, or buyers of our home buyers’ current homes cannot obtain suitable financing, our sales and results of operations could be adversely affected.

The United States and other countries have experienced, and may experience in the future, outbreaks of contagious diseases that affect public health and public perception of health risk. In 2020, the COVID-19 pandemic resulted in federal, state and local governments and private entities mandating various restrictions, including the closures of non-essential businesses for a period of time, which had an adverse impact on our business. In addition, the effects of the pandemic on economic activity, combined with strong demand for new homes that followed the initial onset of the pandemic, caused many disruptions to our supply chain and shortages in certain building components and materials, as well as labor shortages, all of which lengthened our construction cycle times. During the pandemic, overall economic conditions, as well as demand for our homes and our ability to conduct normal business operations became highly unpredictable. Outbreaks of contagious diseases similar to the pandemic may occur in the future, which could have a significant negative impact on the economy, our ability to conduct normal business operations and our results of operations and financial condition.

Our future success depends, to a significant degree, on the efforts of our senior management and our ability to attract and retain qualified personnel. Competition for qualified personnel in all of our operating markets, as well as within our corporate operations, is intense. Our operations could be adversely affected if key members of our senior management unexpectedly leave the Company; if we cannot attract qualified personnel to manage our business; or if we are unable to successfully manage transition matters whenas our senior executives,executives retire, several of whom are retirement eligible under our various compensation plans.

We design, build, market, sell, and arrange financing for an array of luxury residential single-family detached, attached, master-planned, resort-style golf, and urban low-, mid-, and high-rise communities, principally on land we develop and improve. 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 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,States. asFrom welltime asto urbantime, and suburban renters. Wewe also design, build, market, and sell high-density, high-rise urban luxury condominiumscondominiums, which we endeavor to do with third-party joint venture partners. At October 31, 2024,2025, we were operating in 24 states and in the District of Columbia.

In addition to our residential for-sale business, we have also developdeveloped and, in some cases operate,operated, for-rent apartments generally through joint ventures. In September 2025, we announced plans to exit this business over time. See the section entitled “Toll Brothers Apartment Living/Toll Brothers Campus Living” below.

The home building business is highly competitive and fragmented. We compete with numerous home builders of varying sizes, ranging from local to national in scope, some of which have greater sales and financial resources than we do. Sales of existing homes, whether by a homeowner or by a financial institution that may have acquired a home through a foreclosure or otherwise,homes also provide competition. We compete primarily based on price, location, design, quality, service, and reputation. We believe our size and financial stability, relative to many others in our industry, provides us with a competitive advantage.

During fiscal 20242025 and 2023,2024, we acquired control of approximately 14,90012,700 and 4,20014,900 home sites, respectively, net of options terminated and land sales. In each of fiscal 20242025 and 20232024 we forfeited control of approximately optioned5,900 and 4,000 lotsoptioned lots, respectively, primarily because the planned community no longer met our development criteria. At October 31, 2024,2025, we controlled approximately 74,70076,100 home sites, as compared to approximately 74,700 home sites at October 31, 2024, and approximately 70,700 home sites at October 31, 2023, and approximately 76,000 home sites at October 31, 2022.2023. In addition, at October 31, 2024,2025, we expected to purchase approximately 9,0008,800 additional home sites from several Land Development Joint Ventures in which we have an interest, at prices to be determined.

In addition to our residential for-sale business, we have also developed and in some cases operated for-rent apartments and student housing projects generally through joint ventures. In fiscal 2025, three of our Rental Property Joint Ventures sold their assets to unrelated parties, resulting in aggregate gains of $146.1 million recognized by the joint ventures. From our investments in these joint ventures we received cash and recognized our share of the gains of $45.1 million in fiscal 2025. In fiscal 2024, three of our Rental Property Joint Ventures sold their assetsassets, or we sold a portion of our ownership interest to unrelated parties, resulting in aggregate gains of $176.1 million recognized by the joint ventures. From our investments in these joint ventures we received cash and recognized our share of the gains of $24.1 million in fiscal 2024. In fiscal 2023, two of our Rental Property Joint Ventures sold their assets to unrelated parties, resulting in aggregate gains of $106.2 million recognized by the joint ventures. From our investments in these joint ventures, we received cash and recognized gains of $50.9 million in fiscal 2023. In addition, in fiscal 2023, we sold our ownership interest in one of our Rental Property Joint Ventures and recognized a gain of $16.0 million. The gains recognized from these sales are included in “Income (loss) from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income included in Item 15(a)1 of this Form 10-K.

The value of our backlog at October 31, 2025, 2024, 2023, and 20222023 was $5.49 billion (4,647 homes), $6.47 billion (5,996 homes), and $6.95 billion (6,578 homes), and $8.87 billion (8,098 homes), respectively. Approximately 97%98% of the homes in backlog at October 31, 20242025 are expected to be delivered by October 31, 2025.2026. The 7%15% decrease in the value of homes in backlog at October 31, 2024,2025, as compared to October 31, 2023,2024, was due to the delivery of more homes out of backlog than were added during fiscal 2024,2025, and a decreaserelatively in theflat average value of each contract signed.

Warranty: We provide all of our home buyers with a limited warranty as to workmanship and mechanical equipment. We also provide many of our home buyers with a limited 10-year warranty as to structural integrity. We accrue for expected warranty costs at the time each home is closed and title and possession are transferred to the home buyer. Warranty costs are accrued based upon historical experience related to product type, geographic location and other community specific factors. Adjustments to our warranty liabilities related to homes delivered in prior years are recorded in the period in which a change in our estimate occurs. Over the past decade, we have had a significant number of warranty claims related to water intrusion issues primarily impacting homes built in Pennsylvania and Delaware. Our review process for these claims includes an analysis of many factors to determine the estimated costs to resolve such claims, including: the closing dates of the homes; the number of claims received; our inspection of homes; an estimate of the number of homes we expect to repair; the type and cost of repairs that have been performed in each community; the estimated costs to remediate pending and future claims; and the previously recorded amounts related to these claims. 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.

The increase in home sales revenues in fiscal 2024,2025, as compared to fiscal 2023,2024, was attributable to a 13%4% increase in the number of homes delivered, offset, in part, by a 5%2% decrease in the average price of homes delivered. The increase in the number of homes delivered in fiscal 2024,2025, as compared to fiscal 2023,2024, was principally due to higher backlog conversion and an increase in the number of spec homes delivered in fiscal 2024,2025, offset, in part, by a decrease in the number of homes in backlog at October 31, 2023,2024, as compared to the number of homes in backlog at October 31, 2022.2023. The decrease in the average delivered home price was mainly due to an increase in homes delivered in less expensive product types/geographic regions.regions and an increase in the number of spec homes closed.

Home sales cost of revenues, as a percentage of homes sales revenues, in fiscal 20242025 was 73.4%,74.4%, as compared to 73.1%73.4% in fiscal 2023.2024. The increase in fiscal 20242025 was principally due to an increase in incentives as a shiftresult of soft market conditions, as well as shifts in the mix of revenues to lower margin products/areas and increased inventory impairment charges,areas, offset, in part, by lower interest expense as a percentage of home sales revenues. We recognized inventory impairments and write-offs of $59.4$65.9 million, or 0.6% of home sales revenues, and $30.7$59.4 million, or 0.3%0.6% of home sales revenues, in fiscal 20242025 and fiscal 2023,2024, respectively. Interest cost in fiscal 20242025 was $118.1 million, or 1.1% of home sales revenues, as compared to $129.0 million, or 1.2% of home sales revenues, as compared to $139.4 million, or 1.4% of home sales revenues in fiscal 2023.2024.

The increase in land sales and other cost of revenues as a percentage of land sales and other revenues in fiscal 20242025 compared to fiscal 20232024 was primarily due to the sale of a single land parcel to a commercial developer in our second quarter for net cash proceeds of $180.7 million, which resulted in a pre-tax gain of $175.2 million.million in fiscal 2024. In addition, we incurredhad lowerhigher impairment charges in fiscal 2024.2025. We recognized $4.4$26.9 million of land sales and other impairment charges in fiscal 20242025 in connection with planned land sales.sales This comparescompared to $30.6$4.4 million of land sales and other impairment charges recognized in fiscal 2023.2024.

SG&A spending increased by $72.8$51.3 million in fiscal 2024, as2025 compared to fiscal 2023.2024. As a percentage of home sales revenues, SG&A was 9.3%9.5% and 9.2%9.3% in fiscal 20242025 and 2023,2024, respectively. The dollar increase in SG&A was primarily due to an increase in variablepayroll, spendingmarketing suchand asinsurance costs. These increases were offset, in part, by modestly lower selling expenses associated with increased home sales revenues. The increase in SG&A as a percentage of home sales revenues was primarily due to general cost inflation.commissions.

For our Rental Property Joint Ventures specifically, these entities typically generate operating losses until the related property reaches stabilization. For the fiscal years 20242025 and 2023,2024, our earnings related to the Rental Property Joint Ventures include approximately $50.3$68.0 million and $32.9$50.3 million, respectively, ofrepresenting our share of net operating losses incurred by these joint ventures, of which approximately $29.8$38.3 million and $26.1$29.8 million, respectively, was our share of the depreciation expense recognized by these joint ventures.

We recognized a lossgain from unconsolidated entities of $19.1 million in fiscal 2025, as compared to a loss of $23.8 million in fiscal 2024, as compared to income of $50.1 million in fiscal 2023.2024. This decreaseincrease was mainly due to $50.9$45.1 million of gains recognized in fiscal 20232025 related to property sales by our joint ventures compared to $24.1 million of such gains in fiscal 2024.2024, Weincreased also recognized a $16.0 million gain as the result of the sale of our ownership interest in a Rental Property Joint Venture in fiscal 2023. No similar sales occurred in fiscal 2024. Fiscal 2024 was also impactedearnings by higher losses incurred by various Rental Property Joint Ventures, reduced income at onecertain Home Building Joint Venture due to its underlying assets being sold out, lower earnings from a Land Development Joint Venture due to reduced sales volume,Ventures and an increase inlower other-than-temporary impairment charges recognized.charges. We recognized other-than-temporary impairment charges in fiscal 20242025 of $2.1 million related to one investment in a Rental Property Joint Venture compared to $6.6 million related to two investments in Rental Property Joint Ventures. No similar impairment charges were recognizedVentures in fiscal 2023.2024. These increases were offset, in part, by higher losses from certain Rental Property Joint Ventures.

The increasedecrease in income from ancillary businesses in fiscal 2024,2025, as compared to fiscal 2023,2024, was principally due to higher earnings from our mortgage and title operations due to increased closing volume and a $4.4 million gain from a bulk sale of security monitoring accounts by our smart home technology business, offset,business in part,fiscal by2024 and higher operating losses incurred in our apartmentApartment livingLiving operations, offset, in part, by higher earnings from our mortgage and title operations due to increased closing volume and a higher capture rate by our mortgage operations. In fiscal 20242025 and fiscal 2023,2024, we also recognized $8.9$7.3 million and $8.4$8.9 million, respectively, of write-offs related to previously incurred costs that we believed not to be recoverable in our apartmentApartment livingLiving operations.

The increasedecrease in “other” in fiscal 2024 was principally due to a $5.0 million gain in fiscal 2024 related to an investment we held in a privately held company that sold substantially all of its assets to a third party during the year.party.

At October 31, 2024,2025, we had $1.30$1.26 billion of cash and cash equivalents on hand and approximately $1.77$2.19 billion available for borrowing under our Revolving Credit Facility. The Revolving Credit Facility provides us with a committed borrowing capacity of $1.955$2.35 billion, which we have the ability to increase up to $3.00 billion with the consent of lenders, and is scheduled to mature on February 14,7, 2028.2030. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors of the borrower’s obligations under the Revolving Credit Facility. We are also a party to aOur $650.0 million unsecured Term Loan Facility,Facility is also scheduled to mature on February 7, 2030 and is also guaranteed by Toll Brothers, Inc. and substantially all of whichits $487.5100%-owned millionhome maturesbuilding February 14, 2028, $101.6 million matures on November 1, 2025 and the remaining $60.9 million matures on November 1, 2026.subsidiaries.

In fiscal 2025,2026, we expect our principal demand for funds will be for inventory additions (in the form of land acquisition, land development, home construction costs, and deposits to control land, which could occur directly or indirectly through builder acquisitions), operating expenses, including our general and administrative expenses, investments and funding of capital improvements, investments in existing and future unconsolidated joint ventures, repayment of community level debt, common stock repurchases, and dividend payments. Demand for funds include interest and principal payments on current and future debt financing. We expect to meet our short-term liquidity requirements primarily through our cash and cash equivalents on hand and net cash flows provided by operations. Additional sources of funds include distributions from our unconsolidated joint ventures, proceeds from the sale of a portion of our Apartment Living portfolio to Kennedy Wilson, borrowing capacity under our Revolving Credit Facility and borrowings from banks and other lenders.

Beyond fiscal 2025,2026, our principal demands for funds will be for the payments of the principal amount of our long-term debt as it becomes due or matures, land purchases and inventory additions needed to maintain and grow our business, long-term capital investments and investments in unconsolidated joint ventures, common stock repurchases, and dividend payments.

We also operate through a number of joint ventures and have undertaken various commitments as a result of those arrangements. At October 31, 2024,2025, we had investments in these entities of $1.01$1.03 billion, and were committed to invest or advance up to an additional $312.8$331.2 million to these entities if they require additional funding. At October 31, 2024,2025, we had agreed to terms for the acquisition of 316832 home sites from fourfive joint ventures for an estimated aggregate purchase price of $26.8$111.3 million. In addition, we expect to purchase approximately 9,0008,800 additional home sites over a number of years from several joint ventures in which we have interests. The purchase price of these home sites will be determined at a future date.

At October 31, 2024,2025, our 100%-owned subsidiary, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), had issued and outstanding $1.60$1.75 billion aggregate principal amount of senior notes maturing on various dates between NovemberMarch 15, 20252027 and NovemberJune 1,15, 20292035 (the “Senior Notes”). For further information regarding the Senior Notes, see Note 65 to our Consolidated Financial Statements under the caption “Senior Notes.”

•The North region: Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Jersey, New York and Pennsylvania;

The decreaseincrease in the number of homes delivered in fiscal 2024,2025, as compared to fiscal 2023,2024, was mainly due to an increase in the number of spec homes delivered, offset, in part, by a decrease in the number of homes in backlog at October 31, 2023,2024, as compared to the number of homes in backlog at October 31, 2022, offset, in part by a higher backlog conversion in fiscal 2024 and an increase in the number of spec homes delivered.2023. The increase in the average delivered price in fiscal 20242025 was primarily due to a shift in the number of homes delivered to more expensive areas and/or products, asoffset, wellin part by an increase in incentives as salesa priceresult increases.of soft market conditions.

The increase in the number of net contracts signed in fiscal 2024,2025, as compared to fiscal 2023,2024, was principally due to a continuation of favorable demand conditions, as well as an increase in the number of selling communities in the fourth quarter of fiscal 2024.2025. The increase in the average value of each contract signed in the fiscal 20242025 period was primarily due to favorable demand conditions, as well as a shift in the number of contracts signed to more expensive areas and/or productsproducts, andpartially offset by a decreasemodest increase in average sales incentives in fiscal 2024.incentives.

The increase in income before income taxes in fiscal 20242025 was principally attributable to higher earnings from increased revenue and lower home sales cost of revenues, as a percentage of home sales revenues, and decreased SG&A spend, partially offset by lower income from unconsolidated entities.revenues. The decrease in home sales costs of revenues, as a percentage of home sale revenues, in fiscal 2024 was primarily due to a shift in productthe mix/areas toof homes delivered in higher-margin areas/products and lower interest expense as a percentage of home sales revenue. TheFiscal decrease2025 inalso benefitted from higher income from unconsolidated entitiesentities, wasprimarily principally due tofrom one jointHome ventureBuilding deliveringJoint itsVenture. finalThese homeincreases were offset by higher SG&A costs in fiscal 2023. In addition, we recognized $15.6 million of land impairment charges in fiscal 2023 in connection with planned land sales. No similar charges were recognized in fiscal 2024.2025.

The increase in the number of nethomes contracts signeddelivered in fiscal 2024,2025 increased as compared to fiscal 2023,2024. This was principallyprimarily due to an increase in the number of sellingspec communities,homes partiallydelivered offsetin bythe aregion, modestlyas the number of homes in backlog at October 31, 2024 was lower communitythan salesthe pace.number of homes in backlog at October 31, 2023. The decrease in the average valueprice of eachhomes contract signeddelivered in fiscal 20242025 was mainlyprimarily due to shiftsa shift in the number of contractshomes signeddelivered to less expensive areas and/or productsproducts, andas anwell as the increase in averagespec home deliveries with higher sales incentives.incentives in fiscal 2025.

The increasedecrease in income before income taxes in fiscal 2024,2025, as compared to fiscal 2023,2024, was mainly due to the fiscal 2024 sale of a land parcel to a commercial developer that resulted in a pre-tax gain of $175.2 millionmillion, andwhich higherdid earningsnot from increased revenues, offset,recur in part,fiscal with2025. In addition, fiscal 2025 was impacted by higher home sales costs of revenues, as a percentage of home sale revenues, higher land impairment charges, and increased SG&A spend. The increase in home sales costs of revenues, as a percentage of home sale revenues, in fiscal 2024 was primarily due to a shift in productthe mix/areasnumber of homes delivered to lower-marginless areas.expensive areas and/or products. Inventory impairment charges were $16.8 million and $15.2 million in fiscal 2025 and 2024, respectively. In addition, in fiscal 2025 and 2024 we recognized $12.1 million and $0.6 million, respectively, in land impairment charges included in land sales and other cost of revenues in connection with planned land sales on future communities which we no longer intend to develop.

The increase in the number of homes delivered in fiscal 2024,2025, as compared to fiscal 2023,2024, was mainlyrelatively due to a higher backlog conversion and an increase in the number of spec homes delivered in fiscal 2024, partially offset by a decrease in the number of homes in backlog at October 31, 2023, as compared to the number of homes in backlog at October 31, 2022.flat. The slight decrease in the average price of homes delivered in fiscal 20242025 was primarily due to an increase in incentives as a result of soft market conditions coupled with a shift in the number of homes delivered to less expensive areas and/or products.

The increasedecrease in the number of net contracts signed in fiscal 2024,2025, as compared to fiscal 2023,2024, was principally due to soft demand, offset, in part by an increase in the number of selling communities. The increasedecrease in the average value of each contract signed in fiscal 20242025 was mainly due to a shift in the number of contracts signed to moreless expensive areas,areas partiallyor offsetproduct bytypes anand increase in averageincreased sales incentives.

The increasedecrease in income before income taxes in fiscal 2024,2025, as compared to fiscal 2023,2024, was principally due to higher earnings from increased home sales revenues and lower home sales costs of revenues, as a percentage of home sales revenues, offset,and inlower part, by higher SG&A costs resultingearnings from increaseddecreased home sales volume.revenues. The decreaseincrease in home sales cost of revenues, as a percentage of home sales revenues, was mainly due to a shift in product mix/areas to higher-marginlower-margin areas and lower interest expense as a percentage of home sales revenue, offset by higher inventory impairment changes in fiscal 2024.charges. Inventory impairment charges were $3.4$16.9 million and $1.8$3.4 million in fiscal 20242025 and 2023,2024, respectively. In addition, we recognized $2.6 million of land impairment charges in fiscal 2025 in connection with planned land sales. No similar charges were recognized in fiscal 2024.

The increase in the number of homes delivered in fiscal 2024,2025, as compared to fiscal 2023,2024, was mainly due to higher backlog conversion and an increase in the number of spec homes delivered in fiscal 2024, partially offset by a decrease in the number of homes in backlog at October 31, 2023, as compared to the number of homes in backlog at October 31, 2022.delivered. The decrease in the average price of homes delivered in fiscal 2025 increased compared with fiscal 2024 was primarily due to a shift in the number of homes delivered toin lessmore expensive areasareas, oroffset, productin types.part by an increase in incentives as a result of soft market conditions.

The increasedecrease in the number of net contracts signed in fiscal 2024,2025, as compared to fiscal 2023,2024, was principally due to improvedsoft demand in fiscal 2024, offset, in part, byand a decrease in the number of selling communities. The increase in the average value of each contract signed in fiscal 20242025 was mainlyrelatively dueflat as compared to shiftsfiscal in the number of contracts signed to more expensive areas and/or products, partially offset by an increase in average sales incentives.2024.

The decreaseincrease in income before income taxes in fiscal 2024,2025, as compared to fiscal 2023,2024, was mainly due lowerto higher earnings from decreasedincreased revenues, higherlower home sales cost of revenues, as a percentage of home sales revenues, and increased SG&A spend, partially offset by higher earningsSG&A from land sales and other revenues.costs. The increasedecrease in home sales cost of revenues, as a percentage of home sales revenues, was primarily due to a shift in product mix/areas to lower-margin areas and lower interest expense as a percentage of home sales revenues, and higher inventory impairment charges. Inventory impairment charges were $26.0$15.6 million and $5.7$26.0 million in fiscal 20242025 and 2023,2024, respectively.

The increase in the number of homes delivered in fiscal 2024,2025 was relatively flat as compared to fiscal 2023, was mainly due to higher backlog conversion and an increase in the number of spec homes delivered in fiscal 2024, partially offset by a decrease in the number of homes in backlog at October 31, 2023, as compared to the number of homes in backlog at October 31, 2022.2024. The decrease in the average price of homes delivered in fiscal 20242025 was primarily due to higher sales incentives and a shift in the number of homes delivered to less expensive areas and/or product types.

The increasedecrease in the number of net contracts signed in fiscal 2024,2025, as compared to fiscal 2023,2024, was principallyprimarily due to ansoft increasedemand, offset, in demand in fiscal 2024, partially offsetpart, by an decreaseincrease in the number of selling communities. The decreaseincrease in the average value of each contract signed in fiscal 20242025 was mainly due to a shift in the number of contracts signed into lessmore expensive areas or product types, offset, in part, by a decrease in average sale incentives.types.

The decrease in income before income taxes in fiscal 2024,2025, as compared to fiscal 2023,2024, was primarily due to lower earnings from decreased revenues and higher home sales cost of revenues, as a percentage of home sales revenues, and lower earnings from decreased revenues. The increase in home sales cost of revenues, as a percentage of home sales revenues, was primarily due to a shift in product mix/areas to lower-margin areas and an increase in inventory impairment charges, partially offset by lower interest expense as a percentage of home sales revenues.charges. Inventory impairment charges were $13.7$15.2 million and $6.7$13.7 million in fiscal 20242025 and 2023,2024, respectively. In addition, we recognized a $2.2$8.8 million impairment charge inof land salesimpairment and other cost of revenuescharges in fiscal 20232025 in connection with a planned land sale.sales. No similar charges were recognized in fiscal 2024.

The following table compares certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income and other supplemental information for the three months and sixnine months ended AprilJuly 30,31, 2026 and 2025 ($ amounts in millions, unless otherwise stated). For more information regarding results of operations by segment, see “Segments” in this MD&A.

Three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025

TheHome decrease in home salesales revenues for the three months ended AprilJuly 30,31, 2026,2026 were $2.65 billion, as compared to $2.88 billion in the three months ended AprilJuly 30,31, 2025, wasa decrease primarily attributable to a 14%10% decrease in the number of homes delivered, offset in part, by ana 8%2% increase in the average price of homes delivered. The decrease in the number of homes delivered was primarily due to a decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 2024 and fewer spec home deliveriesdeliveries, offset,partially in part,offset by faster construction cycle times. The increase in the average delivered home price was mainly due to thepositive mix of deliveries in the quarter,mix, primarily in our Pacific and Mid-Atlantic regions.

The increase in home sales cost of revenues, as a percentage of home sales revenues, in the three months ended AprilJuly 30,31, 2026, as compared to the three months ended AprilJuly 30,31, 2025, was principally due to an increase in sales incentives andon higherspec inventory impairment charges in the fiscal 2026 period.homes.

SixNine months ended AprilJuly 30,31, 2026 compared to the sixnine months ended AprilJuly 30,31, 2025

TheHome decrease in home salesales revenues for the sixnine months ended AprilJuly 30,31, 2026,2026 were $7.02 billion, as compared to $7.43 billion in the sixnine months ended AprilJuly 30,31, 2025, wasa decrease primarily attributable to a 10% decrease in the number of homes delivered, offsetoffset, in part, by a 7%5% increase in the average price of homes delivered. The decrease in the number of homes delivered was primarily due to a decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 20242024, and fewer spec home deliveries, offset,partially in part,offset by faster construction cycle times. The increase in the average delivered home price was mainly due to thepositive mix of deliveries in the period,mix, primarily in our Pacific and Mid-Atlantic regions.

The increase in home sales cost of revenues, as a percentage of home sales revenues, in the sixnine months ended AprilJuly 30,31, 2026, as compared to the sixnine months ended AprilJuly 30,31, 2025, was principally due to an increase in sales incentives and higher inventory impairment charges in the fiscal 2026 period.

Loss from land sales and other revenues was $9.7 million for the three-month period ended July 31, 2026 compared to income of $3.2 million for the three-month period ended July 31, 2025. The decreaseincrease in land sales and other cost of revenues, as a percentage of land sales and other revenues during the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025 was primarily due to a $5.8 million gain related to lot sales to third party builders, partially offset by higher impairment charges. WeDuring the three-month periods ended July 31, 2026 and 2025, we recognized $2.3$10.1 million and $0.7 million, respectively, of impairment charges in connection with planned land sales during the three-month period ended April 30, 2026. No impairment charges on land held for sale were recognized in the three-month period ended April 30, 2025.sales.

Income from land sales and other revenues was $13.4 million for the nine-month period ended July 31, 2026 compared to $4.6 million for the nine-month period ended July 31, 2025. The increase in land sales and other revenues during the sixnine months ended AprilJuly 30,31, 2026 compared to the sixnine months ended AprilJuly 30,31, 2025 was primarily due to the inclusion of undeveloped land and rental properties in the sale of approximately half of our Apartment Living assets. AsThis aincrease resultwas ofpartially theoffset saleby of these rental properties andhigher land parcels,impairment charges. In connection with such sale, we recognized $284.1 million of land sales and other revenues, $265.3 million of costs of land sales and other revenues, and a pre-tax net land sale gain of $18.8 million in the sixnine months ended AprilJuly 30,31, 2026. In addition, during the six-monthnine-month periods ended AprilJuly 30,31, 2026 and 2025, we recognized $3.7$13.7 million and $1.8$2.6 million, respectively, of impairment charges in connection with plannedland sales. This gain on sale of Apartment Living assets, partially offset by higher impairment charges on land, resulted in land sales.sales and other cost of revenues, as a percentage of land sales and other revenues during the nine months ended July 31, 2026, being relatively flat with the nine months ended July 31, 2025.

SG&A expenditures increased by $2.5$12.4 million in the three-month period ended AprilJuly 30,31, 2026 compared to the three-month period ended AprilJuly 30,31, 2025. As a percentage of home sales revenues, SG&A expenditures were 10.3%10.0% of home sales revenues in the three months ended AprilJuly 30,31, 2026, as compared to 9.5%8.8% in the three months ended AprilJuly 30,31, 2025. The dollar increase in SG&A expenditures was due primarily to higher payroll costs offset, in part, by reducedpayroll, commissions and advertisingsales spend.center operating costs related to an increase in selling communities.

SG&A expenditures increased by $20.0$32.4 million in the six-monthnine-month period ended AprilJuly 30,31, 2026 compared to the six-monthnine-month period ended AprilJuly 30,31, 2025. As a percentage of home sales revenues, SG&A expenditures were 11.8%11.1% of home sales revenues in the fiscal 2026 period, as compared to 10.9%10.1% in the fiscal 2025 period. The dollar increase in SG&A expenditures was due primarily to higher payrollpayroll, commissions and sales center operating costs resultingrelated fromto an increase in the number of selling communities offset, in part, by reduced advertising and marketing costs.spend.

In the six-monththree-month period ended AprilJuly 30,31, 2026, we recognized a gainloss from unconsolidated entities of $18.7$3.1 million as compared to a loss of $2.7$1.0 million in the prior year period. TheDuring $18.7the millionthree-month gainperiod wasended primarilyJuly comprised31, 2026, we recognized gains of $69.0$3.1 million of gains related to the sale of our ownership interestsinterest in Land Development anda Rental Property Joint Ventures,Venture asand well as $21.4$35.3 million of gains recognized in connection with an asset salessale by othera Rental Property Joint VenturesVenture, inwhich the period. These gains werewas offset by other-than-temporary impairment charges of $57.8$39.6 million related to several Rental Property Joint Ventures.Ventures recognized in the current period. No similar transactions or impairment charges were recognized in the six-monththree-month period ended AprilJuly 30,31, 2025.

The increase in income from ancillary businesses in the three-month periodand nine-month periods ended AprilJuly 30,31, 2026 was mainly due to increased revenues from our mortgage operations and reduced costs resulting from the partial sale of our Apartment Living business. The nine-month period ended July 31, 2026 also benefitted from a $3.9 million gain fromon a bulk sale of security monitoring accounts by our smart home technology business.

The decrease in “Other” during the three-monthnine-month and six-month periodsperiod ended AprilJuly 30,31, 2026 was primarily due to higher directly expensed interest costs.costs Theand six-monthlower referral fee income compared to the nine-month period ended AprilJuly 30,31, 2025 was also impacted by higher referral fee income.2025.

For the three-month period ended AprilJuly 30,31, 2026, we reported income before income taxes of $350.4$374.8 million, as compared to $477.5$499.5 million in the three-month period ended AprilJuly 30,31, 2025.

For the six-monthnine-month period ended AprilJuly 30,31, 2026, we reported income before income taxes of $623.9$998.7 million, as compared to $698.9$1.20 millionbillion in the six-monthnine-month period ended AprilJuly 30,31, 2025.

In the three-month periods ended AprilJuly 30,31, 2026 and 2025, we recognized income tax provisions of $89.8$94.6 million and $125.1$129.9 million, respectively. The effective tax rate was 25.6%25.3% for the three months ended AprilJuly 30,31, 2026, compared to 26.2%26.0% for the three months ended AprilJuly 30,31, 2025. The decrease in the effective tax rate for the three months ended AprilJuly 30,31, 2026 was primarily due to higher excess tax benefits related to stock-based compensation recognized in the current year period. Based upon the federal statutory rate of 21.0% for each period, our federal tax provision would have been $73.6$78.7 million and $100.3$104.9 million in the three-month periods ended AprilJuly 30,31, 2026 and 2025, respectively. The difference between the tax provisions recognized and the tax provisions based on the federal statutory rate was mainly due to the provisions for state income taxes.

We recognized income tax provisions of $152.4$247.1 million and $168.7$298.6 million in the six-monthnine-month periods ended AprilJuly 30,31, 2026 and 2025, respectively. The effective tax rate was 24.4%24.7% for the sixnine months ended AprilJuly 30,31, 2026, compared to 24.1%24.9% for the sixnine months ended AprilJuly 30,31, 2025. The increasedecrease in the effective tax rate for the sixnine months ended AprilJuly 30,31, 2026 was primarily due to lowerhigher excess tax benefits related to stock-based compensation recognized in the current year period. Based upon the federal statutory rate of 21.0% for each period, our federal tax provisions would have been $131.0$209.7 million and $146.8$251.7 million in the six-monthnine-month periods ended AprilJuly 30,31, 2026 and 2025, respectively. The difference between the tax provisions recognized and the tax provisions based on the federal statutory rate was mainly due to the provisions for state income taxes, offset, in part, by excess tax benefits related to stock-based compensation.

In the six-monththree-month periods ended AprilJuly 30,31, 2026 and 2025, the value of net contracts signed was $5.19$2.52 billion (5,1372,508 homes) and $4.91$2.41 billion (4,9572,388 homes), respectively. The increase of $275.0$103.3 million, or 6%,4%, in the aggregate value of net contracts signed was primarily due to ana 5% increase in the number of net contracts signedsigned, primarily in our NorthNorth, South, and SouthMountain regions, inoffset addition toby a shiftreduction of 1% in the mixaverage contracted price. In the three-month period ended July 31, 2026, the average value of each contract signed was $1.00 million, as compared to higher$1.01 pricemillion productsat inJuly our31, Pacific2025, region.with the slight decline attributable to mix.

The value of our backlog at AprilJuly 30,31, 2026 decreased 8%2% to $6.32$6.24 billion (5,3945,312 homes), as compared to $6.84$6.38 billion (6,0635,492 homes) at AprilJuly 30,31, 2025. Our backlog at October 31, 2025 and 2024 was $5.49 billion (4,647 homes) and $6.47 billion (5,996 homes), respectively. The decrease in the value of our backlog at AprilJuly 30,31, 2026 as compared to AprilJuly 30,31, 2025, was due to ana 11%3% decrease in the number of homes in backlog partially offset by a 4%1% increase in the average contracted price per home. The decrease in the number of homes in backlog was primarily attributable to spec homes representing a larger portion of our net signed contracts and homes delivered, as a much larger percentage of spec homes are contracted for and delivered within a quarter (and therefore are not included in our quarter-end backlog) as compared to build-to-order homes. The increase in the average contracted price per home was primarily due to the mix of backlog from higher price products/areas.mix.

Our cash flows from operations generally provide us with a significant source of liquidity. Our cash flows provided by operating activities, supplemented with our short-term borrowings and long-term debt, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our Company. Our primary uses of cash include inventory additions in the form of land acquisitions and deposits to obtain control of land,land (which could occur directly or indirectly through builder acquisitions), land development, working capital to fund day-to-day operations, and investments in existing and future unconsolidated joint ventures. We may also use cash to fund capital expenditures such as investments in our information technology systems. We also use cash flows from operations and other sources to pay dividends on our common stock, to repay debt and make share repurchases. We believe our sources of cash and liquidity will continue to be adequate to fund operations, finance our strategic operating initiatives, repay debt, fund our share repurchases and pay dividends for the foreseeable future.

At AprilJuly 30,31, 2026, we had $1.11$1.06 billion of cash and cash equivalents on handhand, restricted cash of $72.4 million, and approximately $2.24 billion available for borrowing under our Revolving Credit Facility. At July 31, 2026, we had no borrowings and we had approximately $130.1 million of outstanding letters of credit under the Revolving Credit Facility. On February 5, 2026, we amended the Revolving Credit Facility to extend its maturity date to February 5, 2031 and increase its borrowing capacity to $2.38 billion. We have the ability to further increase the borrowing capacity under the Revolving Credit Facility to up to $3.00 billion by adding additional lenders or obtaining the consent of any existing lender agreeing to a commitment increase. Under the Revolving Credit Facility, up to 50% of the commitment is available for letters of credit. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors of the borrower’s obligations under the Revolving Credit Facility. On February 5, 2026, we also amended our Term Loan Facility to extend the maturity date of $548.4 million of the $650.0 million of outstanding loans to February 7,5, 2031, with the remaining $101.6 million due February 7, 2030. Our Term Loan Facility is also guaranteed by Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries.

Over the longer term, to the extent the sources of capital described above are insufficient to meet our needs, we may also conduct additional public offerings of our securities, refinance or incur additional debt or dispose of certain assets to fund our operating activities and debt service. We expect these resources will be adequate to fund our ongoing operating activities as well as provide capital for investment in future land purchases, and related development activities and future joint ventures.

We are a party to many agreements that include contractual obligations and commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Condensed Consolidated Balance Sheet as of AprilJuly 30,31, 2026, while others are considered future commitments and not included. Our contractual obligations primarily consist of long-term debt and related interest payments, payments due on our mortgage company loan facility, purchase obligations related to expected acquisition of land under purchase agreements and land development agreements (many of which are secured by letters of credit or surety bonds), operating leases, obligations under our deferred compensation plan, and obligations under our supplemental executive retirement plans. We also enter into certain short-term lease commitments, commitments to fund our existing or future unconsolidated joint ventures, letters of credit and other purchase obligations in the normal course of business. For more information regarding these obligations, see Note 6, “Loans Payable, Senior Notes, and Mortgage Company Loan Facility,” and Note 14, “Commitments and Contingencies” to the Condensed Consolidated Financial Statements.

We also operate through a number of joint ventures and have undertaken various commitments as a result of those arrangements. At AprilJuly 30,31, 2026, we had investments in these entities of $955.5$907.1 million and were committed to invest or advance up to an additional $278.0$269.0 million to these entities if they required additional funding at such date. At AprilJuly 30,31, 2026, we had agreed to terms for the acquisition of 653707 home sites from four joint ventures for an estimated aggregate purchase price of $72.3$76.1 million. We also expect to purchase approximately 8,9008,600 additional home sites over a number of years from several joint ventures in which we have interests. The purchase price of these home sites will be determined at a future date.

In situations where we have joint and several guarantees with our joint venture partner, we generally seek to implement a reimbursement agreement with our partner that provides that neither party is responsible for more than its proportionate share or agreed-upon share of the guarantee; however, we are not always successful. In addition, if the joint venture partner does not have adequate financial resources to meet its obligations under such a reimbursement agreement, we may be liable for more than our proportionate or agreed upon share. We believe that, as of AprilJuly 30,31, 2026, in the event we become legally obligated to perform under a guarantee of the obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay all or a significant portion of the obligation. If it is not, we and our partners would need to contribute additional capital to the entity. At AprilJuly 30,31, 2026, we had guaranteed the debt of certain unconsolidated entities that had loan commitments aggregating $1.83$1.73 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $417.2$388.9 million to have been our maximum exposure related to repayment and carry cost guarantees at such date. At AprilJuly 30,31, 2026, the unconsolidated entities had borrowed an aggregate of $1.50$1.44 billion, of which we estimate $417.2$388.9 million to have been our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 1 month to 7.77.4 years. These maximum exposure estimates 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 other (non-carry cost/repayment) indemnities noted above, which are not estimable.

Outside of the normal course of operations, one of our principal liquidity needs is the payment of principal and interest on outstanding indebtedness. We are required by the terms of certain loan documents to meet certain covenants, such as financial ratios and reporting requirements. As of AprilJuly 30,31, 2026, we were in compliance with all such covenants and requirements on our term loan, revolving credit facility and other loans payable. Refer to Note 6, “Loans Payable, Senior Notes, and Mortgage Company Loan Facility” in the Notes to the Condensed Consolidated Financial Statements.

At AprilJuly 30,31, 2026 and October 31, 2025, we had $1.17$1.13 billion and $1.34 billion, respectively, of cash, cash equivalents, and restricted cash. Cash provided by operating activities during the six-monthnine-month period ended AprilJuly 30,31, 2026 was $141.7$392.1 million. Cash provided by operating activities during the fiscal 2026 period was primarily related to net income (adjusted for depreciation and amortization, impairments, stock-based compensation, income and distributions of earnings from unconsolidated entities, and deferred taxes); a decrease in receivables, prepaid expenses, and other assets, including rental and commercial properties; mortgage loans sold, net of mortgage loans originated; and an increase in customer deposits – net. This activity was offset, in part, by an increase in inventory; a decrease in accountscurrent payableincome andtaxes accrued– expensesnet; and a decrease in currentaccounts incomepayable taxesand –accrued net.expenses.

At AprilJuly 30,31, 2025 and October 31, 2024, we had $761.7$938.3 million and $1.37 billion, respectively, of cash, cash equivalents, and restricted cash. Cash usedprovided inby operating activities during the six-monthnine-month period ended AprilJuly 30,31, 2025 was $57.9$312.4 million. Cash usedprovided inby operating activities during the fiscal 2025 period was primarily related to an increase in inventory. This activity was offset, in part, by net income (adjusted for depreciation and amortization, impairments, stock-based compensation, lossesincome and distributions of earnings from unconsolidated entities, and deferred taxes); an increase in accounts payable and accrued expenses; an increase in current income taxes –- net; and mortgage loans sold, net of mortgage loans originated. This activity was offset, in part, by an increase in inventory; an increase in receivables, prepaid expenses and other assets, and a decrease in customer deposits –- net.

In the six-monthnine-month period ended AprilJuly 30,31, 2026, cash provided by investing activities was $142.8$116.3 million, which was primarily related to $204.3$219.5 million of proceeds related to the sale of ownership interests in unconsolidated entities and $88.4$104.2 million of cash received as returns from our investments in unconsolidated entities. This activity was offset, in part, by $105.6$129.1 million used to fund our investments in unconsolidated entities and $43.3$74.0 million used for the purchase of property and equipment, net.

In the six-monthnine-month period ended AprilJuly 30,31, 2025, cash used in investing activities was $187.8$240.2 million, which was primarily related to $179.9$250.4 million used to fund our investments in unconsolidated entities and $32.9$58.4 million used for the purchase of property and equipment. This activity was offset, in part, by $28.2$64.9 million of cash received as returns from our investments in unconsolidated entities.

We used $363.1$717.1 million of cash in financing activities in the six-monthnine-month period ended AprilJuly 30,31, 2025,2026, primarily for the repurchase of $204.9$434.9 million of our common stock, payments of $66.3$182.1 million of loans payable, net of borrowings, the payment of dividends on our common stock of $49.0$73.5 million, $35.0 millionpayments of payments related to repurchases from land bank programs, and $22.2$8.0 million of payments related to stock-based benefit plans - net.net, This activity was offset, in part, by $22.1 millionpayments of proceeds$7.8 million related to sales to land bank programs.programs, net of proceeds, and payments of $4.4 million related to non-controlling interest - net.

At AprilJuly 30,31, 2026, our 100%-owned subsidiary, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), had issued and outstanding $1.75 billion aggregate principal amount of senior notes maturing on various dates between March 15, 2027 and June 15, 2035 (the “Senior Notes”). For further information regarding the Senior Notes, see Note 6, “Loans Payable, Senior Notes and Mortgage Company Loan Facility” in the Notes to the Consolidated Condensed Financial Statements under the caption “Senior Notes.”