Toll Brothers(TOL) - 2025 Q4 - Annual Report

Financial Performance - In fiscal year 2025, net contracts signed amounted to $9.85 billion for 9,943 homes, compared to $10.07 billion for 10,231 homes in fiscal year 2024, and $7.91 billion for 8,077 homes in fiscal year 2023[57]. - As of October 31, 2025, the company had a backlog of $5.49 billion, representing 4,647 homes, with approximately 98% expected to be delivered by October 31, 2026[64]. - The company recognized income from unconsolidated entities of $19.1 million in fiscal 2025, compared to a loss of $(23.8) million in fiscal 2024 and income of $50.1 million in fiscal 2023[69]. Land and Home Sites - As of October 31, 2025, the company owned or controlled approximately 76,100 home sites, an increase from approximately 74,700 home sites at October 31, 2024[41]. - The aggregate purchase price of land parcels subject to option and purchase agreements was approximately $7.54 billion, with $744.5 million already paid or deposited[45]. - The company expects to purchase approximately 8,800 additional home sites from several Land Development Joint Ventures over the coming years[42]. - The company acquired control of approximately 12,700 home sites in fiscal year 2025, net of options terminated and lots sold[41]. - At October 31, 2025, the percentage of home sites optioned was approximately 57%, up from 55% at October 31, 2024[41]. - At October 31, 2025, the company had agreed to acquire 832 home sites for approximately $111.3 million and expects to purchase an additional 8,800 home sites over the coming years[71]. Financing and Debt - The mortgage subsidiary, Toll Brothers Mortgage Company, financed $2.64 billion in settlements in fiscal year 2025, capturing 43.4% of total settlements[61]. - Cash down payments from home buyers averaged approximately 7% of the total purchase price of a home in fiscal year 2025[57]. - Total fixed-rate debt amounts to $1,990,612 thousand with a weighted average interest rate of 4.68%[291]. - Total variable-rate debt amounts to $797,301 thousand with a weighted average interest rate of 5.37%[291]. - The company has $107,896 thousand maturing in 2026 at a 3.64% interest rate[291]. - The company has $507,878 thousand maturing in 2027 at a 4.91% interest rate[291]. - A 1% increase in interest rates would increase annual interest incurred by approximately $8.0 million[291]. - The fair value of fixed-rate debt at October 31, 2025, is estimated at $1,998,222 thousand[291]. - The fair value of variable-rate debt at October 31, 2025, is estimated at $800,000 thousand[291]. - The company has $650,000 thousand of variable-rate debt maturing in 2030 at a 5.14% interest rate[291]. - The company has $553,404 thousand of fixed-rate debt maturing thereafter at a 5.54% interest rate[291]. - Bond discounts, premiums, and deferred issuance costs net total $(14,220) thousand for fixed-rate debt and $(2,699) thousand for variable-rate debt[291]. Investments and Joint Ventures - Investments in unconsolidated entities totaled $1.03 billion as of October 31, 2025, with an additional commitment of up to $331.2 million for further funding if required[68]. - The company had $553.4 million invested in 21 Land Development Joint Ventures, with funding commitments of $315.5 million to 11 of these ventures[70]. - The company had an aggregate of $448.5 million in investments in 21 Rental Property Joint Ventures, with total loan commitments of $2.07 billion and outstanding borrowings of $1.77 billion[74]. Market and Competitive Environment - The home building business is highly competitive, with the company competing on price, location, design, quality, service, and reputation[65]. - The company is exposed to market risk primarily due to fluctuations in interest rates, affecting earnings and cash flow for variable-rate debt[290]. Workforce and Operations - The company employed approximately 4,900 full-time employees as of October 31, 2025, focusing on attracting and retaining talent[82]. - The company has significant land under control for which approvals have been obtained or are being sought, ensuring adequate supply for future development[46]. - The company is subject to various regulatory and environmental laws that may increase costs and delay community openings[75]. - The company has a two-step sales process, with non-binding reservation agreements tracked weekly to monitor demand strength in communities[56].