UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the fiscal year ended
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
(Address of principal executive offices, including zip code)
(
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered |
|---|---|---|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of October 31, 2025, the registrant had
Auditor name:
Form type: 10-K
Period end: 2025-10-31
Toll Brothers, Inc. is a public reporting company classified under Operative Builders. Our business is subject to a number of risks and uncertainties that could adversely affect our results of operations, financial condition and cash flows. We build homes in communities across the markets we serve, and our operations center on signing contracts with homebuyers, delivering homes from backlog, and acquiring and developing land for future communities; our principal product lines, geographic markets, and reportable segments are described in [COMPLETE: description of principal products, services, markets and segments]. Backlog conversion represents the percentage of homes delivered in the period from backlog at the beginning of the period. A decline in backlog or an increase in contract cancellations could adversely affect our future revenues and earnings.
Land is a core component of our business, and we control home sites through both direct ownership and option arrangements. At October 31, 2025, we owned or controlled through options approximately 76,100 home sites. Inventory at October 31, 2025 was $10,678,460,000, compared to $9,712,925,000 in the prior period, an increase of 9.9%. If market conditions deteriorate in the areas where we hold land, we may be required to record inventory impairment charges or write off option deposits and pre-acquisition costs, which could materially reduce our profitability. Our land acquisition strategy, community count, and approach to option contracts are further described in [COMPLETE: land strategy and community development description].
For the fiscal year ended October 31, 2025, we generated revenue of $10,966,723,000, compared to $10,846,740,000 in the prior year, an increase of 1.1%, and net income of $1,346,486,000. At October 31, 2025, we held cash and cash equivalents of $1,258,997,000, total liabilities of $6,233,802,000, and total equity of $8,286,064,000. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure. Changes in interest rates could also affect the cost and availability of our financing and the affordability of our homes for prospective buyers.
We are involved in legal proceedings arising in the ordinary course of business from time to time, and management does not currently believe any pending matter is material to the financial statements. Information regarding our employees and human capital resources is set forth in [COMPLETE: number of employees and human capital disclosure], and our competitive position, seasonality, regulatory environment, and available information are described in [COMPLETE: competition, seasonality, government regulation and available information]. We intend to continue to manage our business with a focus on our home sites, backlog, and financial position in support of long-term performance.
We are a public reporting company classified under Operative Builders, and our results depend heavily on demand for new homes and on conditions in the residential real estate markets we serve. For the fiscal year ended October 31, 2025, we reported revenue of $10,966,723,000 and net income of $1,346,486,000. Revenue increased 1.1% over the prior year while cost of revenue rose 5.0% to $8,212,487,000 and operating expenses rose 5.2% to $1,033,622,000, and any continued increase in land, labor, and material costs that outpaces our ability to raise home prices could compress margins. Our backlog at October 31, 2025 was $5.49 billion (4,647 homes), as compared to backlog of $6.47 billion (5,996 homes) at October 31, 2024. A reduction in backlog, higher cancellation rates, or slower net contract signings could adversely affect our future revenue and profitability, and [COMPLETE: description of principal markets and demand drivers].
Our business requires substantial investment in land and inventory, which exposes us to the risk of write-downs if market conditions deteriorate. Inventory increased 9.9% to $10,678,460,000 at October 31, 2025, and we owned or controlled through options approximately 76,100 home sites at October 31, 2025, as compared to approximately 74,700 at October 31, 2024. If home prices or absorption rates decline in the communities where we hold land, we may be required to record impairment charges or abandon land options, and our deferred tax assets included $26,132,000 related to impairment losses, reflecting charges recognized in prior periods. Extended holding periods for land also increase the amount of capitalized interest and carrying costs, and deferred tax liabilities included $20,478,000 related to capitalized interest and $245,646,000 related to tax-deferred income.
Our access to capital and the cost of our indebtedness are important to our operations, and changes in interest rates could adversely affect both our financing costs and homebuyer affordability. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure. At October 31, 2025, cash and cash equivalents were $1,258,997,000, a decrease of 3.4% from the prior year, borrowings under credit facilities were $2,326,236,000, a decrease of 26.9%, unsecured and other notes, net were $1,741,525,000, an increase of 9.0%, and secured borrowings, net were $249,087,000, a decrease of 43.0%. Total liabilities were $6,233,802,000 compared with total equity of $8,286,064,000. Our debt agreements contain covenants that could restrict our operations, and a failure to comply or an inability to refinance maturing obligations on acceptable terms could harm our liquidity. We also held mortgage loans held for investment, net of $200,816,000, up 5.0% from the prior year, which exposes us to credit and interest rate risk in our mortgage operations.
We are subject to tax, legal, and regulatory risks that could affect our results. Income tax expense was $444,885,000, a decrease of 13.5% from the prior year, and our effective tax rate was 25.6% compared with 26.2% in the prior period, while unrecognized tax benefits increased from $22,752,000 at the beginning of the period to $24,700,000 at the end of the period. Changes in tax law, the outcome of tax examinations, or the resolution of uncertain tax positions could increase our tax expense. We are involved in legal proceedings arising in the ordinary course of business from time to time, and although management does not currently believe any pending matter is material to the financial statements, adverse outcomes could result in liabilities exceeding our estimates. Management evaluated disclosure controls and procedures as of the end of the period and concluded they were effective at the reasonable assurance level, and no changes materially affected internal control over financial reporting during the quarter; however, any future failure to maintain effective controls could impair our ability to report accurately and timely.
Toll Brothers, Inc. is a public reporting company classified under Operative Builders. Toll Brothers, Inc. is a public reporting company classified under Operative Builders. 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, and at fiscal year-end we were selling from 446 of these communities. We operate our own architectural, engineering, mortgage, title, land development, insurance, smart home technology and landscaping subsidiaries, and we also develop master-planned and golf course communities as well as operate, in certain regions, our own lumber distribution, house component assembly and component manufacturing operations. In addition to our residential for-sale business, we have also developed and, in some cases operated, for-rent apartments generally through joint ventures, and in September 2025 we announced plans to exit this business over time. Unless otherwise stated, net contracts signed represents the gross number or value of contracts signed during the relevant period, less the number or value of contracts canceled during the relevant period, and backlog consists of homes under contract but not yet delivered to our home buyers.
Revenue for the fiscal year ended October 31, 2025 was $10,966,723,000, an increase of 1.1% from $10,846,740,000 in the prior fiscal year, reflecting an increase of $119,983,000 driven by [COMPLETE: description of home deliveries, average delivered price and other revenue drivers]. Cost of revenue increased 5.0% to $8,212,487,000 from $7,824,262,000, an increase of $388,225,000 attributable to [COMPLETE: description of land, construction and other cost drivers]. Operating expenses increased 5.2% to $1,033,622,000 from $982,291,000, an increase of $51,331,000 primarily due to [COMPLETE: description of selling, general and administrative cost drivers]. Our equity method investments contributed income of $19,054,000 in fiscal 2025 compared with a loss of $23,843,000 in the prior year, while other nonoperating income, net, was $51,703,000 compared with $69,296,000 in the prior year. Income tax expense decreased 13.5% to $444,885,000 from $514,445,000, a decrease of $69,560,000. Net income for fiscal 2025 was $1,346,486,000, and net income attributable to noncontrolling interests was $986,000 compared with $1,093,000 in the prior year. Basic earnings per share were $13.60 on weighted-average basic shares outstanding of 98,978,000.
At October 31, 2025, we had cash and cash equivalents of $1,258,997,000, compared with $1,303,039,000 at October 31, 2024, a decrease of 3.4%, or $44,042,000. Restricted cash and equivalents increased 18.6% to $79,941,000 from $67,396,000. Borrowings under our credit facilities decreased 26.9% to $2,326,236,000 from $3,180,718,000, a reduction of $854,482,000, and secured borrowings, net decreased 43.0% to $249,087,000 from $437,256,000, while unsecured and other notes, net increased 9.0% to $1,741,525,000 from $1,597,102,000. Total liabilities were $6,233,802,000 and total equity was $8,286,064,000 at October 31, 2025. Inventory increased 9.9% to $10,678,460,000 from $9,712,925,000, deferred revenue increased to $418,897,000 from $51,138,000, and retained earnings increased 5.2% to $8,574,807,000 from $8,153,356,000. Treasury stock, at cost, was $1,014,568,000 at October 31, 2025 compared with $1,209,547,000 at the prior year-end. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure. Management believes that [COMPLETE: statement as to whether cash and cash equivalents, cash flows from operations and available borrowing capacity are sufficient to fund operations and obligations for at least the next twelve months].
Management evaluated disclosure controls and procedures as of the end of the period and concluded they were effective at the reasonable assurance level, and no changes materially affected internal control over financial reporting during the quarter. We are involved in legal proceedings arising in the ordinary course of business from time to time, and management does not currently believe any pending matter is material to the financial statements. Inventories are stated at the lower of cost and net realizable value, and long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable, with an impairment loss recognized for the amount by which the carrying amount exceeds fair value. This discussion should be read together with our consolidated financial statements and the related notes, as well as the disclosure under "Statement on Forward-Looking Information" and "Risk Factors" included in this report.
| Year Ended October 31, 2025 | Year Ended October 31, 2024 | |
|---|---|---|
| Revenue | ||
| Total Revenue | ||
| Cost of revenue | ||
| Total COGS | ||
| Gross Profit | ||
| Operating expenses | ||
| Other income statement items (derived) | - | - |
| Total operating expenses | ||
| Operating income | ||
| Other income (expense) | ||
| Income from equity method investments | - | |
| Other nonoperating income (expense), net | - | - |
| Income before income taxes | ||
| Income tax expense (benefit) | ||
| Net income including noncontrolling interests | ||
| Less: net income attributable to noncontrolling interests | ||
| Net Income | ||
| Basic earnings per share | ||
| Diluted earnings per share | ||
| Weighted average shares outstanding, basic | ||
| Weighted average shares outstanding, diluted | ||
| Year Ended October 31, 2025 | Year Ended October 31, 2024 | |
|---|---|---|
| Net income | 1,346,486,000.00 | 1,571,195,000.00 |
| Other comprehensive income (loss), net of tax | - | - |
| Comprehensive income |
| October 31, 2025 | October 31, 2024 | |
|---|---|---|
| Assets | ||
| Cash and cash equivalents | ||
| Inventory | ||
| Mortgage loans held for investment, net | ||
| Operating lease right-of-use assets | ||
| Other assets (derived) | ||
| Property, plant and equipment | ||
| Restricted cash and equivalents | 79,941,000.00 | 67,396,000.00 |
| Total Assets | ||
| Liabilities | ||
| Borrowings under credit facilities | ||
| Deferred revenue | ||
| Operating lease liabilities | ||
| Other liabilities (derived) | ||
| Secured borrowings, net | ||
| Taxes payable | ||
| Unsecured and other notes, net | ||
| Total Liabilities | ||
| Equity | ||
| Preferred stock | ||
| Preferred stock, par value per share | ||
| Preferred stock, shares authorized | ||
| Preferred stock, shares issued | ||
| Accumulated other comprehensive income (loss) | ||
| Additional paid-in capital | ||
| Common stock | ||
| Common stock, par value per share | ||
| Common stock, shares authorized | ||
| Common stock, shares issued | ||
| Common stock, shares outstanding | ||
| Retained earnings (accumulated deficit) | ||
| Treasury stock, at cost | - | - |
| Treasury stock, common shares held | ||
| Total stockholders equity attributable to parent | ||
| Noncontrolling interests | ||
| Total Equity | ||
| Total liabilities and equity | ||
| Year Ended October 31, 2025 | Year Ended October 31, 2024 | |
|---|---|---|
| Operating activities | ||
| Net income | ||
| Depreciation and amortization | ||
| Stock-based compensation | ||
| Deferred income taxes | - | |
| Change in income taxes receivable | - | |
| Other noncash items, net | - | |
| Change in inventories | - | - |
| Change in contract liabilities | - | - |
| Change in accounts payable and accrued liabilities | - | |
| Changes in operating assets and liabilities, net | ||
| Net cash from operating activities | ||
| Investing activities | ||
| Purchases of property and equipment | - | - |
| Payments for (proceeds from) other investing activities | - | - |
| Other investing activities (derived) | - | - |
| Net cash from investing activities | - | - |
| Financing activities | ||
| Repurchases of common stock | - | - |
| Dividends paid | - | - |
| Other financing activities (derived) | - | - |
| Net cash from financing activities | - | - |
| Net change in cash | - | |
| Cash at beginning of period | 1,344,341,000.00 | |
| Cash at end of period | 1,370,435,000.00 | |
| Supplemental cash flow information | ||
| Cash paid for income taxes | ||
| Common stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss) | Treasury stock, at cost | Noncontrolling interests | Total | |
|---|---|---|---|---|---|---|---|
| Balance at beginning of prior year | 1,129,000.00 | 698,548,000.00 | 6,675,719,000.00 | 40,910,000.00 | -619,150,000.00 | 16,046,000.00 | 6,813,202,000.00 |
| Net income | |||||||
| Other equity movements | 0.00 | -3,835,000.00 | -93,558,000.00 | -9,633,000.00 | -590,397,000.00 | -1,352,000.00 | -698,775,000.00 |
| Balance at October 31, 2024 | - | ||||||
| Net income | |||||||
| Other equity movements | -100,000.00 | -7,590,000.00 | -925,035,000.00 | -9,005,000.00 | 194,979,000.00 | -1,372,000.00 | -748,123,000.00 |
| Balance at October 31, 2025 | - |
Toll Brothers, Inc. is a public reporting company classified under Operative Builders, and references to "we," "us," "our," and the "Company" refer to Toll Brothers, Inc. and its subsidiaries, unless the context otherwise requires. Toll Brothers, Inc. is a public reporting company classified under Operative Builders. Its principal products, services, markets, and strategy are described in its prior SEC filings. When this report uses the words "we," "us," "our," and the "Company," they refer to Toll Brothers, Inc. and its subsidiaries, unless the context otherwise requires. References herein to fiscal year refer to our fiscal years ended or ending October 31. The accompanying condensed financial statements as of and for the period ended October 31, 2025 are unaudited and have been prepared from the Company's connected books and records, and the results for the interim period are not necessarily indicative of the results that may be expected for a full year. Unless otherwise stated, net contracts signed represents a number or value equal to the gross number or value of contracts signed during the relevant period, less the number or value of contracts cancelled during the relevant period, which includes contracts that were signed during the relevant period and in prior periods, and backlog consists of homes under contract but not yet delivered to our home buyers. Revenue for the period was $10,966,723,000 compared with $10,846,740,000 in the prior period, an increase of 1.1%, while cost of revenue was $8,212,487,000 compared with $7,824,262,000, an increase of 5.0%. Deferred revenue at period end was $418,897,000 compared with $51,138,000 in the prior period. Net income for the period was $1,346,486,000, of which $986,000 was attributable to noncontrolling interests compared with $1,093,000 in the prior period. Income tax expense was $444,885,000 compared with $514,445,000 in the prior period, consisting of $358,146,000 of current tax and $86,739,000 of deferred tax, and the effective tax rate was 24.8% compared with the federal statutory rate of 21.0%.
Basic earnings per share for the period were $13.60 and diluted earnings per share were $13.49, based on weighted-average basic shares outstanding of 98,978,000 and a dilutive adjustment of 801,000 shares. Total share-based compensation expense for the period was $30,834,000 compared with $29,558,000 in the prior period. Deferred tax assets related to share-based compensation totaled $12,384,000 at period end.
Total debt at period end was $6,233,802,000. Debt consisted of borrowings under credit facilities of $2,326,236,000, operating lease liabilities of $128,340,000, secured borrowings, net, of $249,087,000, and unsecured and other notes, net, of $1,741,525,000, with unamortized debt issuance costs of $2,699,000. Borrowings under credit facilities decreased 26.9% from $3,180,718,000 in the prior period, secured borrowings, net, decreased 43.0% from $437,256,000, and unsecured and other notes, net, increased 9.0% from $1,597,102,000. Scheduled maturities of long-term debt are $257,896,000 within one year, $507,878,000 in year two, $411,244,000 in year three, $13,395,000 in year four, and $1,061,015,000 in year five. Operating lease right-of-use assets were $109,013,000 at period end compared with $108,311,000 in the prior period, and operating lease liabilities were $128,340,000 compared with $128,588,000. Undiscounted operating lease payments are $25,400,000 within one year, $22,000,000 in year two, $19,000,000 in year three, $16,800,000 in year four, $11,200,000 in year five, and $137,800,000 thereafter, for total undiscounted lease payments of $232,200,000, less imputed interest of $103,900,000, resulting in a present value of operating lease liabilities of $128,340,000. The weighted average remaining lease term was 6.6 years and the weighted average discount rate was 5.4%; total lease cost for the period was $26,400,000, including variable lease cost of $4,200,000, and cash paid for amounts included in the measurement of operating lease liabilities was $25,600,000.
Total equity at period end was $8,286,064,000. Stockholders' equity consisted of common stock of $1,029,000, additional paid-in capital of $687,123,000, retained earnings of $8,574,807,000, accumulated other comprehensive income of $22,272,000, and treasury stock, at cost, of $(1,014,568,000). Retained earnings increased 5.2% from $8,153,356,000 in the prior period, while treasury stock, at cost, changed from $(1,209,547,000) in the prior period, common stock decreased from $1,129,000, additional paid-in capital decreased 1.1% from $694,713,000, and accumulated other comprehensive income decreased 28.8% from $31,277,000. Noncontrolling interests were $15,401,000 at period end compared with $15,787,000 in the prior period, a decrease of 2.4%.
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the applicable rules and regulations of the Securities and Exchange Commission. In the opinion of management, the financial statements reflect all adjustments necessary for a fair statement of the financial position, results of operations, and cash flows for the periods presented.
The financial statements include the accounts of the Company and its consolidated subsidiaries, if any. All intercompany balances and transactions have been eliminated in consolidation.
Inventories are stated at the lower of cost and net realizable value.
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recognized over the estimated useful lives of the related assets, generally on a straight-line basis. Expenditures for maintenance and repairs are expensed as incurred.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. When the carrying amount of an asset or asset group is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds fair value.
The Company determines whether an arrangement is or contains a lease at inception. For leases with terms greater than twelve months, a right-of-use asset and a corresponding lease liability are recognized at the lease commencement date, measured at the present value of the remaining lease payments over the lease term.
Debt is carried at amortized cost. Debt issuance costs and discounts or premiums are presented as an adjustment to the carrying amount of the related debt and amortized to interest expense over the contractual term of the debt.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is recognized when it is more likely than not that some portion of the deferred tax assets will not be realized.
Share-based compensation is measured at the grant-date fair value of the award and recognized as expense over the requisite service period of the award.
Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock, except when the effect would be antidilutive.
Equity instruments issued by the Company are classified in stockholders' equity based on their terms. The components of stockholders' equity and the changes in those components for the periods presented are set forth in the equity note.
The Company evaluates the applicability and impact of Accounting Standards Updates issued by the Financial Accounting Standards Board as they are issued. Adopted updates and updates not yet effective are not expected to have a material effect on the financial statements, except as otherwise described in these notes.
| Current | Prior | |
|---|---|---|
| Borrowings under credit facilities | ||
| Operating lease liabilities | ||
| Secured borrowings, net | ||
| Unsecured and other notes, net | ||
| Total debt | 4,445,188,000.00 | 5,343,664,000.00 |
| Amount | |
|---|---|
| Within one year | |
| Year two | |
| Year three | |
| Year four | |
| Year five |
| Current | Prior | |
|---|---|---|
| Unamortized debt issuance costs |
| Current | Prior | |
|---|---|---|
| Property, plant and equipment | ||
| Total property and equipment | 273,397,000.00 | 453,007,000.00 |
| Current | Prior | |
|---|---|---|
| Accumulated other comprehensive income (loss) | ||
| Additional paid-in capital | ||
| Common stock | ||
| Retained earnings (accumulated deficit) | ||
| Treasury stock, at cost | - | - |
| Total stockholders' equity | 8,270,663,000.00 | 7,670,928,000.00 |
| Current | Prior | |
|---|---|---|
| Weighted average shares outstanding, basic | ||
| Dilutive effect of potential common shares | ||
| Weighted average shares outstanding, diluted | ||
| Basic earnings per share | 13.60 | 15.16 |
| Diluted earnings per share |
| Amount | |
|---|---|
| Within one year | |
| Year two | |
| Year three | |
| Year four | |
| Year five | |
| Thereafter | |
| Total undiscounted lease payments | |
| Less imputed interest | |
| Present value of operating lease liabilities | |
| Weighted average remaining lease term (years) | |
| Weighted average discount rate |
| Current | Prior | |
|---|---|---|
| Variable lease cost | ||
| Total lease cost | ||
| Cash paid for amounts included in the measurement of operating lease liabilities |
| Current | Prior | |
|---|---|---|
| Total current | ||
| Total deferred | ( | |
| Total income tax expense (benefit) | 444,885,000.00 | 514,445,000.00 |
| Current | Prior | |
|---|---|---|
| Tax at federal statutory rate | ||
| Federal statutory rate | ||
| State and local taxes | ||
| State and local rate | ||
| Tax credits | ||
| Tax credits rate | ||
| Other reconciling items | ( | ( |
| Other reconciling items rate | ( | ( |
| Other tax contingencies | ||
| Other adjustments | ||
| Other adjustments rate | ||
| Effective tax rate |
| Current | Prior | |
|---|---|---|
| Deferred tax assets, gross | ||
| Share-based compensation | ||
| Other deferred tax assets | ||
| State and local operating loss carryforwards | ||
| Inventory | ||
| Accrued liabilities | ||
| Impairment losses | ||
| Deferred tax liabilities | ||
| Deferred income tax liabilities | ||
| Property and equipment | ||
| Tax-deferred income | ||
| Capitalized interest |
| Current | Prior | |
|---|---|---|
| Balance at beginning of period | 10,512,000.00 | |
| Increases for current period tax positions | ||
| Increases for prior period tax positions | ||
| Decreases from settlements with taxing authorities | ||
| Decreases from lapse of statute of limitations | ||
| Balance at end of period | 20,029,000.00 |
| Current | Prior | |
|---|---|---|
| Accrued interest and penalties | ||
| Penalties and interest expense (benefit) |
| Current | Prior | |
|---|---|---|
| Federal | ||
| State and local | ||
| Total income tax expense (benefit) | 444,885,000.00 | 514,445,000.00 |
| Current | Prior | |
|---|---|---|
| Total share-based compensation expense |
| Current | Prior | |
|---|---|---|
| Depreciation | ||
| Other nonoperating income (expense), net | 51,703,000.00 | 69,296,000.00 |
Toll Brothers, Inc. maintains disclosure controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management evaluated disclosure controls and procedures as of the end of the period and concluded they were effective at the reasonable assurance level. This evaluation was made as of October 31, 2025, and was conducted under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. [COMPLETE: management to review and formally adopt the foregoing conclusion language before filing.]
Management is responsible for establishing and maintaining adequate internal control over financial reporting and for assessing its effectiveness as of the end of each fiscal year. [COMPLETE: management's annual report on internal control over financial reporting as of October 31, 2025, including the framework used for the assessment and management's conclusion as to effectiveness.] [COMPLETE: attestation report of the independent registered public accounting firm on internal control over financial reporting, if required.]
No changes materially affected internal control over financial reporting during the quarter. Accordingly, there was no change in our internal control over financial reporting during the fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Because of its inherent limitations, any system of controls, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that its objectives will be met, and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate.
Toll Brothers, Inc. is a public reporting company classified under Operative Builders, and we rely on information technology systems and data to support our operations, including the communities from which we sell homes and our relationships with the financial institutions that serve our home buyers. At October 31, 2025, we were selling from 446 communities, compared to 408 communities at October 31, 2024, and 370 communities at October 31, 2023. We have implemented a cybersecurity risk management program designed to identify, assess, and manage material risks from cybersecurity threats, which [COMPLETE: description of the program, including alignment with any recognized framework, risk assessment processes, monitoring and detection tools, incident response planning, employee training, and use of third-party assessors or consultants]. Our processes for overseeing and identifying risks from cybersecurity threats associated with our use of third-party service providers include [COMPLETE: description of third-party risk management processes]. We maintain relationships with a diverse group of mortgage financial institutions, many of which are among the largest in the industry.
Our Board of Directors oversees our management of risks from cybersecurity threats, and [COMPLETE: identification of the Board committee, if any, responsible for cybersecurity oversight, and the nature and frequency of reporting to the Board or committee]. At the management level, [COMPLETE: title(s) of the management position(s) or committee(s) responsible for assessing and managing cybersecurity risk, the relevant expertise of such persons, and the processes by which they are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents]. Our cybersecurity risk management processes are integrated into our overall enterprise risk management and disclosure controls framework. Management evaluated disclosure controls and procedures as of the end of the period and concluded they were effective at the reasonable assurance level. No changes materially affected internal control over financial reporting during the quarter.
As of the date of this report, [COMPLETE: statement as to whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect the company, including its business strategy, results of operations, or financial condition]. We face ongoing risks from cybersecurity threats that could adversely affect our business, and there can be no assurance that our processes will be sufficient to prevent or mitigate all such threats. The company is involved in legal proceedings arising in the ordinary course of business from time to time. Management does not currently believe any pending matter is material to the financial statements.
The Item 408(a) Rule 10b5-1 trading arrangement disclosure renders here from the guided trading arrangement intake on this page. Complete the intake to state whether any director or officer adopted or terminated a trading arrangement during the fourth fiscal quarter. Author any other Item 9B disclosure in this section as well.
Our executive officers and directors as of the date of this report are Douglas C. Yearley, Jr., Executive Chairman and a director; Karl K. Mistry, Chief Executive Officer and a director; Seth J. Ring, President and Chief Operating Officer and a director; Robert Parahus, President and Chief Operating Officer; Gregg L. Ziegler, Chief Financial Officer; and Erica J. Mainardi, Senior Vice President and Chief Accounting Officer, and our non-employee directors are Stephen F. East, John A. McLean, Scott D. Stowell and Paul E. Shapiro. [COMPLETE: confirm the respective President and Chief Operating Officer titles and responsibilities of Mr. Ring and Mr. Parahus, and insert the age, business experience, term of office and board committee memberships of each director and executive officer, the identity of the audit committee members and audit committee financial expert, and a description of our code of ethics and where it is available]. Based on a review of Section 16(a) reports filed with the SEC and written representations from our directors and executive officers, we believe that all Section 16(a) reports required to be filed during fiscal 2025 were filed on a timely basis, and no late or unfiled reports were identified. Toll Brothers, Inc. is a public reporting company classified under Operative Builders, and its principal products, services, markets and strategy are described in its prior SEC filings.
The information required by Item 11 regarding compensation of our named executive officers and directors, including the Compensation Discussion and Analysis, the Summary Compensation Table and related tables, the pay ratio disclosure, the pay versus performance disclosure and the Compensation and Management Development Committee report, is incorporated by reference to [COMPLETE: title and expected filing date of our definitive proxy statement for the 2026 annual meeting of stockholders]. We selected adjusted pre-tax income as our company-selected financial measure because this metric governs payouts under the largest single component of our NEOs' incentive compensation awards. The adjusted pre-tax income reported for this purpose is the amount of pre-tax income reflected in the Company's audited financial statements for the applicable fiscal year, as adjusted for compensation purposes. For the fiscal year ended October 31, 2025, income before income taxes was $1,792,357,000 and net income was $1,346,486,000, compared to $2,086,733,000 and $1,571,195,000, respectively, for the fiscal year ended October 31, 2024. For purposes of the peer group total shareholder return disclosure, we have used the S&P Homebuilders Select Industry Index, which is the peer group used in the Company's stock performance graph in our annual report on Form 10-K for the most recent fiscal year. [COMPLETE: insert or incorporate by reference all compensation amounts, equity award information, compensation committee interlocks and insider participation disclosure, and director compensation for fiscal 2025].
The information required by Item 12 regarding the security ownership of certain beneficial owners and management and our equity compensation plan information, the information required by Item 13 regarding transactions with related persons and director independence, and the information required by Item 14 regarding the fees billed by and pre-approval policies for our independent registered public accounting firm are incorporated by reference to [COMPLETE: title and expected filing date of our definitive proxy statement], which will be filed with the SEC within 120 days after the end of our fiscal year. [COMPLETE: insert the beneficial ownership table for each director, named executive officer, all directors and executive officers as a group, and each holder of more than 5% of our common stock, together with the equity compensation plan information table as of October 31, 2025]. [COMPLETE: insert a description of any related-person transactions since the beginning of fiscal 2025, our policies and procedures for the review and approval of such transactions, and the board's determinations regarding director independence]. [COMPLETE: insert the name of our independent registered public accounting firm and the audit fees, audit-related fees, tax fees and all other fees billed for fiscal 2025 and fiscal 2024, together with the audit committee's pre-approval policies and procedures].