• Toll Brothers Reports FY 2024 3rd Quarter Results

    المصدر: Nasdaq GlobeNewswire / 20 أغسطس 2024 16:30:01   America/New_York

    FORT WASHINGTON, Pa., Aug. 20, 2024 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL) (TollBrothers.com), the nation’s leading builder of luxury homes, today announced results for its third quarter ended July 31, 2024.

    FY 2024’s Third Quarter Financial Highlights (Compared to FY 2023’s Third Quarter):

    • Net income and earnings per share were $374.6 million and $3.60 per diluted share, compared to net income of $414.8 million and $3.73 per diluted share in FY 2023’s third quarter.
    • Pre-tax income was $503.6 million, compared to $553.0 million in FY 2023’s third quarter.
    • Home sales revenues were $2.72 billion, up 2% compared to FY 2023’s third quarter; delivered homes were 2,814, up 11%.
    • Net signed contract value was $2.41 billion, up 11% compared to FY 2023’s third quarter; contracted homes were 2,490, also up 11%.
    • Backlog value was $7.07 billion at third quarter end, down 10% compared to FY 2023’s third quarter; homes in backlog were 6,769, down 7%.
    • Home sales gross margin was 27.4%, compared to FY 2023’s third quarter home sales gross margin of 27.8%.
    • Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 28.8%, compared to FY 2023’s third quarter adjusted home sales gross margin of 29.3%.
    • SG&A, as a percentage of home sales revenues, was 9.0%, compared to 8.6% in FY 2023’s third quarter.
    • Income from operations was $497.2 million.
    • Other income, income from unconsolidated entities, and gross margin from land sales and other was $1.1 million.
    • The Company repurchased approximately 2.1 million shares at an average price of $118.57 per share for a total purchase price of $245.9 million, bringing full year repurchases to $427.1 million. The Company now expects approximately $600 million of share repurchases in fiscal 2024.  

    Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are very pleased to report another quarter of strong results. In our third quarter, we delivered 2,814 homes at an average price of $968,000, generating record third quarter home sales revenue of $2.72 billion. Our adjusted gross margin, at 28.8% in the quarter, significantly exceeded guidance due to favorable mix and greater efficiencies in our home building operations, and our SG&A margin of 9.0% beat guidance by 20 basis points. This combination of revenue and margin outperformance drove earnings of $3.60 per diluted share in the quarter.

    “Net signed contracts were up year-over-year approximately 11% in both units and dollars, with July being our strongest month in the quarter. We are also encouraged by our solid deposit and traffic activity through the first three weeks of August. With mortgage rates at their lowest point in a year and trending lower, favorable demographics, and continued imbalance in the supply and demand of homes for sale, we are optimistic that demand will remain solid through the end of fiscal 2024 and into 2025.

    “Based on our third quarter outperformance and our expectations for the fourth quarter, we are raising our full year guidance across all key home building metrics, including adjusted gross margin, which we now expect to be approximately 28.3% for the full year. We also expect to earn between $14.50 and $14.75 per diluted share with a return on beginning equity of approximately 22.5%.

    “We remain on target to achieve our goal of operating from 410 communities by fiscal year end, representing 11% community count growth this year. At the end of the third quarter, we owned or controlled 72,700 lots, providing us sufficient land to grow community count in fiscal 2025 and beyond. We have a healthy balance sheet with low net debt, no significant near-term debt maturities and ample liquidity. In our third quarter, we repurchased $246 million of common stock, bringing our year-to-date repurchases to $427 million. We continue to generate strong operating cash flows and we are
    increasing our expected share repurchase total for fiscal 2024 from $500 million to $600 million as we continue to both return capital to shareholders and invest in growth.”

    Fourth Quarter and FY 2024 Financial Guidance:
     Fourth Quarter Full Fiscal Year 2024
    Deliveries3,275 - 3,375 units 10,650 - 10,750 units
    Average Delivered Price per Home$940,000 - $950,000 $975,000
    Adjusted Home Sales Gross Margin27.5%  28.3%
    SG&A, as a Percentage of Home Sales Revenues8.6%  9.4%
    Period-End Community Count410  410
    Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other$47 million $260 million
    Tax Rate26.0%  25.4%


    Financial Highlights for the three months ended July 31, 2024 and 2023 (unaudited):
      2024   2023 
    Net Income$374.6 million, or $3.60 per share diluted $414.8 million, or $3.73 per share diluted
    Pre-Tax Income$503.6 million $553.0 million
    Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues$5.5 million $3.4 million
    Home Sales Revenues$2.72 billion and 2,814 units $2.67 billion and 2,524 units
    Net Signed Contracts$2.41 billion and 2,490 units $2.16 billion and 2,245 units
    Net Signed Contracts per Community6.2 units 6.6 units
    Quarter-End Backlog$7.07 billion and 6,769 units $7.87 billion and 7,295 units
    Average Price per Home in Backlog$1,044,000 $1,079,500
    Home Sales Gross Margin 27.4%  27.8%
    Adjusted Home Sales Gross Margin 28.8%  29.3%
    Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues 1.2%  1.4%
    SG&A, as a percentage of Home Sales Revenues 9.0%  8.6%
    Income from Operations$497.2 million, or 18.2% of total revenues $515.1 million, or 19.2% of total revenues
    Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other$1.1 million $39.4 million
    Pre-Tax Land and Other Impairments included in Land Sales and Other Costs of Revenues$3.8 million  $—
    Quarterly Cancellations as a Percentage of Beginning-Quarter Backlog 2.4%  3.2%
    Quarterly Cancellations as a Percentage of Signed Contracts in Quarter 6.4%  9.8%


    Financial Highlights for the nine months ended July 31, 2024 and 2023 (unaudited):
     2024  2023 
    Net Income$1.10 billion, or $10.40 per share diluted $926.5 million, or $8.28 per share diluted
    Pre-Tax Income$1.46 billion $1.24 billion
    Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues$35.4 million $22.4 million
    Home Sales Revenues$7.30 billion and 7,382 units $6.91 billion and 6,842 units
    Net Signed Contracts$7.41 billion and 7,573 units $5.89 billion and 6,039 units
    Home Sales Gross Margin26.9% 26.7%
    Adjusted Home Sales Gross Margin28.6% 28.5%
    Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues1.3% 1.4%
    SG&A, as a percentage of Home Sales Revenues9.8% 9.7%
    Income from Operations$1.43 billion, or 19.0% of total revenues $1.17 billion, or 16.7% of total revenues
    Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other$213.5 million $57.1 million
    Pre-Tax Land and Other Impairments included in Land Sales and Other Costs of Revenues$4.4 million $17.7 million
        

    Additional Information:

    • The Company ended its FY 2024 third quarter with $893.4 million in cash and cash equivalents, compared to $1.30 billion at FYE 2023 and $1.03 billion at FY 2024’s second quarter end. At FY 2024 third quarter end, the Company also had $1.77 billion available under its $1.96 billion revolving credit facility, which is scheduled to mature in February 2028.
    • On July 19, 2024, the Company paid its quarterly dividend of $0.23 per share to shareholders of record at the close of business on July 5, 2024.
    • Stockholders’ equity at FY 2024 third quarter end was $7.41 billion, compared to $6.80 billion at FYE 2023.
    • FY 2024’s third quarter-end book value per share was $73.46 per share, compared to $65.49 at FYE 2023.
    • The Company ended its FY 2024’s third quarter with a debt-to-capital ratio of 27.6%, compared to 28.0% at FY 2024’s second quarter end and 29.6% at FYE 2023. The Company ended FY 2024’s third quarter with a net debt-to-capital ratio(1) of 19.6%, compared to 18.7% at FY 2024’s second quarter end, and 17.7% at FYE 2023.
    • The Company ended FY 2024’s third quarter with approximately 72,700 lots owned and optioned, compared to 71,800 one quarter earlier, and 70,200 one year earlier. Approximately 50% or 36,300, of these lots were owned, of which approximately 19,300 lots, including those in backlog, were substantially improved.
    • In the third quarter of FY 2024, the Company spent approximately $374.7 million on land to purchase approximately 2,100 lots.
    • The Company ended FY 2024’s third quarter with 404 selling communities, compared to 386 at FY 2024’s second quarter end and 345 at FY 2023’s third quarter end.

    (1)   See “Reconciliation of Non-GAAP Measures” below for more information on the calculation of the Company’s net debt-to-capital ratio.

    Toll Brothers will be broadcasting live via the Investor Relations section of its website, investors.TollBrothers.com, a conference call hosted by chairman and chief executive officer Douglas C. Yearley, Jr. at 8:30 a.m. (ET) Wednesday, August 21, 2024, to discuss these results and its outlook for the fourth quarter and FY 2024. To access the call, enter the Toll Brothers website, click on the Investor Relations page, and select “Events & Presentations.” Participants are encouraged to log on at least fifteen minutes prior to the start of the presentation to register and download any necessary software.

    The call can be heard live with an online replay which will follow.

    ABOUT TOLL BROTHERS
    Toll Brothers, Inc., a Fortune 500 Company, is the nation’s leading builder of luxury homes. The Company was founded 57 years ago in 1967 and became a public company in 1986. Its common stock is listed on the New York Stock Exchange under the symbol “TOL.” The Company serves first-time, move-up, empty-nester, active-adult, and second-home buyers, as well as urban and suburban renters. Toll Brothers builds in over 60 markets in 24 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Indiana, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington, as well as in the District of Columbia. The Company operates its own architectural, engineering, mortgage, title, land development, insurance, smart home technology, and landscape subsidiaries. The Company also develops master-planned and golf course communities as well as operates its own lumber distribution, house component assembly, and manufacturing operations.

    In 2024, Toll Brothers marked 10 years in a row being named to the Fortune World’s Most Admired Companies™ list and the Company’s Chairman and CEO Douglas C. Yearley, Jr. was named one of 25 Top CEOs by Barron’s magazine. Toll Brothers has also been named Builder of the Year by Builder magazine and is the first two-time recipient of Builder of the Year from Professional Builder magazine. For more information visit TollBrothers.com.

    Toll Brothers discloses information about its business and financial performance and other matters, and provides links to its securities filings, notices of investor events, and earnings and other news releases, on the Investor Relations section of its website (investors.TollBrothers.com).

    From Fortune, ©2024 Fortune Media IP Limited. All rights reserved. Used under license.


    FORWARD-LOOKING STATEMENTS

    Information presented herein for the third quarter ended July 31, 2024 is subject to finalization of the Company’s regulatory filings, related financial and accounting reporting procedures and external auditor procedures.

    This release contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. One can identify these statements by the fact that they do not relate to matters of a strictly historical or factual nature and generally discuss or relate to future events. These statements contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” “should,” “likely,” “will,” and other words or phrases of similar meaning. Such statements may include, but are not limited to, information and statements regarding: expectations regarding inflation and interest rates; the markets in which we operate or may operate; our strategic priorities; our land acquisition, land development and capital allocation priorities; market conditions; demand for our homes; our build-to-order and spec home strategy; anticipated operating results and guidance; home deliveries; financial resources and condition; changes in revenues; changes in profitability; changes in margins; changes in accounting treatment; cost of revenues, including expected labor and material costs; selling, general, and administrative expenses; interest expense; inventory write-downs; home warranty and construction defect claims; unrecognized tax benefits; anticipated tax refunds; sales paces and prices; effects of home buyer cancellations; growth and expansion; joint ventures in which we are involved; anticipated results from our investments in unconsolidated entities; our ability to acquire or dispose of land and pursue real estate opportunities; our ability to gain approvals and open new communities; our ability to market, construct and sell homes and properties; our ability to deliver homes from backlog; our ability to secure materials and subcontractors; our ability to produce the liquidity and capital necessary to conduct normal business operations or to expand and take advantage of opportunities; and the outcome of legal proceedings, investigations, and claims.

    Any or all of the forward-looking statements included in this release are not guarantees of future performance and may turn out to be inaccurate. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties. The major risks and uncertainties – and assumptions that are made – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:

    • the effect of general economic conditions, including employment rates, housing starts, inflation rates, interest and mortgage rates, availability of financing for home mortgages and strength of the U.S. dollar;
    • market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
    • the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such land;
    • access to adequate capital on acceptable terms;
    • geographic concentration of our operations;
    • levels of competition;
    • the price and availability of lumber, other raw materials, home components and labor;
    • the effect of U.S. trade policies, including the imposition of tariffs and duties on home building products and retaliatory measures taken by other countries;
    • the effects of weather and the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, unavailability of insurance, and shortages and price increases in labor or materials associated with such natural disasters;
    • risks arising from acts of war, terrorism or outbreaks of contagious diseases, such as Covid-19;
    • federal and state tax policies;
    • transportation costs;
    • the effect of land use, environment and other governmental laws and regulations;
    • legal proceedings or disputes and the adequacy of reserves;
    • risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, indebtedness, financial condition, losses and future prospects;
    • the effect of potential loss of key management personnel;
    • changes in accounting principles;
    • risks related to unauthorized access to our computer systems, theft of our and our homebuyers’ confidential information or other forms of cyber-attack; and
    • other factors described in “Risk Factors” included in our Annual Report on Form 10-K for the year ended October 31, 2023 and in subsequent filings we make with the Securities and Exchange Commission (“SEC”).

    Many of the factors mentioned above or in other reports or public statements made by us will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements.

    Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.

    For a further discussion of factors that we believe could cause actual results to differ materially from expected and historical results, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K filed with the SEC and in subsequent reports filed with the SEC. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all of our forward-looking statements are expressly qualified in their entirety by the cautionary statements contained or referenced in this section.


     
    TOLL BROTHERS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Amounts in thousands)
     
     July 31,
    2024    		 October 31,
    2023
     (Unaudited)  
    ASSETS   
    Cash and cash equivalents$893,422  $1,300,068 
    Inventory 10,198,060   9,057,578 
    Property, construction and office equipment - net 459,234   323,990 
    Receivables, prepaid expenses and other assets 577,993   691,256 
    Mortgage loans held for sale 137,627   110,555 
    Customer deposits held in escrow 109,783   84,530 
    Investments in unconsolidated entities 983,592   959,041 
     $13,359,711  $12,527,018 
        
    LIABILITIES AND EQUITY   
    Liabilities:   
    Loans payable$1,099,787  $1,164,224 
    Senior notes 1,596,873   1,596,185 
    Mortgage company loan facility 125,417   100,058 
    Customer deposits 523,982   540,718 
    Accounts payable 675,471   597,582 
    Accrued expenses 1,777,553   1,548,781 
    Income taxes payable 129,582   166,268 
    Total liabilities 5,928,665   5,713,816 
        
    Equity:   
    Stockholders’ Equity   
    Common stock, 112,937 shares issued at July 31, 2024 and October 31, 2023 1,129   1,129 
    Additional paid-in capital 692,700   698,548 
    Retained earnings 7,701,274   6,675,719 
    Treasury stock, at cost — 11,998 and 9,146 shares at July 31, 2024 and October 31, 2023, respectively (1,016,277)  (619,150)
    Accumulated other comprehensive income 36,038   40,910 
    Total stockholders’ equity 7,414,864   6,797,156 
    Noncontrolling interest 16,182   16,046 
    Total equity 7,431,046   6,813,202 
     $13,359,711  $12,527,018 


     
    TOLL BROTHERS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Amounts in thousands, except per share data and percentages)
    (Unaudited)
     
     Three Months Ended
    July 31,    		 Nine Months Ended
    July 31,
      2024   2023   2024   2023 
     $% $% $% $%
    Revenues:           
    Home sales$2,724,472   $2,674,602   $7,303,328   $6,914,122  
    Land sales and other 3,472    13,040    209,950    60,668  
      2,727,944    2,687,642    7,513,278    6,974,790  
                
    Cost of revenues:           
    Home sales 1,977,162 72.6%  1,931,949 72.2%  5,339,671 73.1%  5,065,750 73.3%
    Land sales and other 8,778 252.8%  11,578 88.8%  31,918 15.2%  74,863 123.4%
      1,985,940    1,943,527    5,371,589    5,140,613  
                
    Gross margin - home sales 747,310 27.4%  742,653 27.8%  1,963,657 26.9%  1,848,372 26.7%
    Gross margin - land sales
    and other    		 (5,306)(152.8)%  1,462 11.2%  178,032 84.8%  (14,195)(23.4)%
                
    Selling, general and administrative expenses 244,813 9.0%  229,004 8.6%  712,557 9.8%  668,038 9.7%
    Income from operations 497,191    515,111    1,429,132    1,166,139  
                
    Other:           
    (Loss) income from unconsolidated entities (10,514)   30,548    (13,799)   20,813  
    Other income - net 16,950    7,358    49,234    50,453  
    Income before income taxes 503,627    553,017    1,464,567    1,237,405  
    Income tax provision 129,016    138,228    368,781    310,870  
    Net income$374,611   $414,789   $1,095,786   $926,535  
    Per share:           
    Basic earnings$3.64   $3.77   $10.51   $8.36  
    Diluted earnings$3.60   $3.73   $10.40   $8.28  
    Cash dividend declared$0.23   $0.21   $0.67   $0.62  
    Weighted-average number of shares:           
    Basic 102,980    110,003    104,299    110,871  
    Diluted 104,014    111,123    105,361    111,881  
                
    Effective tax rate 25.6%    25.0%    25.2%    25.1%  


     
    TOLL BROTHERS, INC. AND SUBSIDIARIES
    SUPPLEMENTAL DATA
    (Amounts in thousands)
    (unaudited)
     
     Three Months Ended
    July 31,    		 Nine Months Ended
    July 31,
      2024   2023   2024   2023 
    Inventory impairments and write-offs included in home sales cost of revenues:       
    Pre-development costs and option write offs$1,759  $895  $4,518  $9,343 
    Land owned for future communities —   369   —   694 
    Land owned for operating communities 3,700   2,100   30,840   12,400 
     $5,459  $3,364  $35,358  $22,437 
            
    Land and other impairments included in land sales and other cost of revenues$3,800  $—  $4,400  $17,700 
            
    Depreciation and amortization$20,145  $20,156  $55,428  $54,249 
    Interest incurred$28,381  $27,753  $84,545  $94,381 
    Interest expense:       
    Charged to home sales cost of revenues$32,803  $37,004  $91,121  $99,642 
    Charged to land sales and other cost of revenues 802   1,258   1,821   6,086 
     $33,605  $38,262  $92,942  $105,728 
            
    Home sites controlled:    July 31,
    2024    		 July 31,
    2023
    Owned     36,345   35,245 
    Optioned     36,384   34,981 
          72,729   70,226 


    Inventory at July 31, 2024 and October 31, 2023 consisted of the following (amounts in thousands):

     July 31,
    2024    		 October 31,
    2023
    Land deposits and costs of future communities$571,400  $549,035 
    Land and land development costs 2,855,478   2,631,147 
    Land and land development costs associated with homes under construction 3,488,892   2,916,334 
    Total land and land development costs 6,915,770   6,096,516 
        
    Homes under construction 2,784,577   2,515,484 
    Model homes (1) 497,713   445,578 
     $10,198,060  $9,057,578 


    (1)       Includes the allocated land and land development costs associated with each of our model homes in operation.

    Toll Brothers operates in the following five geographic segments, with current operations generally located in the states listed below:

    • North: Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Jersey, New York and Pennsylvania
    • Mid-Atlantic: Georgia, Maryland, North Carolina, Tennessee and Virginia
    • South: Florida, South Carolina and Texas
    • Mountain: Arizona, Colorado, Idaho, Nevada and Utah
    • Pacific: California, Oregon and Washington
     Three Months Ended
    July 31,
     Units $ (Millions) Average Price Per Unit $
     2024  2023   2024   2023   2024   2023 
    REVENUES             
    North386  390  $375.1  $377.7  $971,800  $968,600 
    Mid-Atlantic362  247   335.7   288.5  $927,400  $1,167,900 
    South934  732   776.3   632.6  $831,100  $864,200 
    Mountain774  775   670.0   726.0  $865,700  $936,800 
    Pacific358  380   566.4   648.4  $1,581,900  $1,706,400 
    Home Building2,814  2,524   2,723.5   2,673.2  $967,800  $1,059,100 
    Corporate and other       1.0   1.4     
    Total home sales2,814  2,524   2,724.5   2,674.6  $968,200  $1,059,700 
    Land sales and other       3.5   13.0     
    Total Consolidated      $2,728.0  $2,687.6     
                  
    CONTRACTS             
    North329  344  $334.7  $330.7  $1,017,300  $961,300 
    Mid-Atlantic354  317   340.4   296.4  $961,600  $935,300 
    South763  632   626.9   513.8  $821,600  $812,900 
    Mountain721  605   658.1   481.1  $912,700  $795,200 
    Pacific323  347   447.4   541.5  $1,385,100  $1,560,500 
    Total Consolidated2,490  2,245  $2,407.5  $2,163.5  $966,900  $963,700 
                  
    BACKLOG             
    North998  1,035  $1,067.7  $1,051.1  $1,069,800  $1,015,600 
    Mid-Atlantic904  1,039   906.3   1,060.8  $1,002,600  $1,021,000 
    South2,173  2,439   1,972.2   2,245.8  $907,600  $920,800 
    Mountain1,838  1,867   1,824.8   1,917.9  $992,800  $1,027,300 
    Pacific856  915   1,295.6   1,599.2  $1,513,600  $1,747,700 
    Total Consolidated6,769  7,295  $7,066.6  $7,874.8  $1,044,000  $1,079,500 


     Nine Months Ended
    July 31,
     Units $ (Millions) Average Price Per Unit $
     2024  2023   2024   2023   2024   2023 
    REVENUES             
    North1,024  1,155  $983.0  $1,081.9  $960,000  $936,700 
    Mid-Atlantic1,017  687   976.0   787.2  $959,700  $1,145,900 
    South2,369  1,880   1,967.5   1,544.8  $830,500  $821,700 
    Mountain1,945  2,090   1,727.0   1,880.4  $887,900  $899,700 
    Pacific1,027  1,030   1,650.0   1,619.1  $1,606,600  $1,571,900 
    Home Building7,382  6,842   7,303.5   6,913.4  $989,400  $1,010,400 
    Corporate and other       (0.2)  0.7     
    Total home sales7,382  6,842   7,303.3   6,914.1  $989,300  $1,010,500 
    Land sales and other       210.0   60.7     
    Total Consolidated      $7,513.3  $6,974.8     
                  
    CONTRACTS             
    North1,066  1,068  $1,085.7  $1,012.0  $1,018,500  $947,600 
    Mid-Atlantic976  884   928.0   886.0  $950,800  $1,002,300 
    South2,230  1,796   1,843.6   1,433.2  $826,700  $798,000 
    Mountain2,206  1,433   1,971.5   1,194.4  $893,700  $833,500 
    Pacific1,095  858   1,584.5   1,367.5  $1,447,000  $1,593,800 
    Total Consolidated7,573  6,039  $7,413.3  $5,893.1  $978,900  $975,800 


    Note: Due to rounding, amounts may not add.

    Unconsolidated entities:

    Information related to revenues and contracts of entities in which we have an interest for the three-month and nine-month periods ended July 31, 2024 and 2023, and for backlog at July 31, 2024 and 2023 is as follows:

     Units $ (Millions) Average Price Per Unit $
     2024  2023   2024   2023   2024   2023 
    Three months ended July 31,             
    Revenues136  2  $155.7  $8.1  $1,144,900  $4,048,500 
    Contracts26  11  $32.1  $18.3  $1,236,000  $1,662,800 
                  
    Nine months ended July 31,             
    Revenues176  8  $196.6  $31.5  $1,116,900  $3,942,100 
    Contracts81  63  $97.6  $88.5  $1,204,500  $1,404,800 
                  
    Backlog at July 31,54  136  $61.0  $153.5  $1,129,000  $1,129,000 


    RECONCILIATION OF NON-GAAP MEASURES

    This press release contains, and Company management’s discussion of the results presented in this press release may include, information about the Company’s adjusted home sales gross margin, adjusted net income, adjusted diluted earnings per share and the Company’s net debt-to-capital ratio.

    These four measures are non-GAAP financial measures which are not calculated in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures should not be considered a substitute for, or superior to, the comparable GAAP financial measures, and may be different from non-GAAP measures used by other companies in the home building business.

    The Company’s management considers these non-GAAP financial measures as we make operating and strategic decisions and evaluate our performance, including against other home builders that may use similar non-GAAP financial measures. The Company’s management believes these non-GAAP financial measures are useful to investors in understanding our operations and leverage and may be helpful in comparing the Company to other home builders to the extent they provide similar information.

    Adjusted Home Sales Gross Margin
    The following table reconciles the Company’s home sales gross margin as a percentage of home sales revenues (calculated in accordance with GAAP) to the Company’s adjusted home sales gross margin (a non-GAAP financial measure). Adjusted home sales gross margin is calculated as (i) home sales gross margin plus interest recognized in home sales cost of revenues plus inventory write-downs recognized in home sales cost of revenues divided by (ii) home sales revenues.

    Adjusted Home Sales Gross Margin Reconciliation
    (Amounts in thousands, except percentages)
     
      Three Months Ended
    July 31,    		 Nine Months Ended
    July 31,
       2024   2023   2024   2023 
    Revenues - home sales$2,724,472  $2,674,602  $7,303,328  $6,914,122 
    Cost of revenues - home sales 1,977,162   1,931,949   5,339,671   5,065,750 
    Home sales gross margin 747,310   742,653   1,963,657   1,848,372 
    Add:Interest recognized in cost of revenues - home sales 32,803   37,004   91,121   99,642 
     Inventory impairments and write-offs in cost of revenues - home sales 5,459   3,364   35,358   22,437 
    Adjusted home sales gross margin$785,572  $783,021  $2,090,136  $1,970,451 
             
    Home sales gross margin as a percentage of home sale revenues 27.4%  27.8%  26.9%  26.7%
             
    Adjusted home sales gross margin as a percentage of home sale revenues 28.8%  29.3%  28.6%  28.5%


    The Company’s management believes adjusted home sales gross margin is a useful financial measure to investors because it allows them to evaluate the performance of our home building operations without the often varying effects of capitalized interest costs and inventory impairments. The use of adjusted home sales gross margin also assists the Company’s management in assessing the profitability of our home building operations and making strategic decisions regarding community location and product mix.

    Forward-looking Adjusted Home Sales Gross Margin
    The Company has not provided projected fourth quarter and full FY 2024 home sales gross margin or a GAAP reconciliation for forward-looking adjusted home sales gross margin because such measure cannot be provided without unreasonable efforts on a forward-looking basis, since inventory write-downs are based on future activity and observation and therefore cannot be projected for the fourth quarter and full FY 2024. The variability of these charges may have a potentially unpredictable, and potentially significant, impact on our fourth quarter and full FY 2024 home sales gross margin.

    Adjusted Net Income and Diluted Earnings Per Share Reconciliation

    The following table reconciles the Company’s net income and earnings per share (calculated in accordance with GAAP) to the Company’s adjusted net income and diluted earnings per share (a non-GAAP financial measure).

    Adjusted Net Income and Diluted Per Share Reconciliation
    (Amounts in thousands, except per share data)
     
      Three Months Ended
    July 31,    		 Nine Months Ended
    July 31,
       2024   2023   2024   2023 
    Net income$374,611  $414,789  $1,095,786  $926,535 
    Subtract:Net income resulting from the sale of a parcel of land to a commercial developer —   —   (124,119)  — 
    Adjusted net income$374,611  $414,789  $971,667  $926,535 
             
    Diluted earnings per share$3.60  $3.73  $10.40  $8.28 
    Subtract:Diluted earnings per share resulting from the sale of a parcel of land to a commercial developer —   —   (1.18)  — 
    Adjusted diluted earnings per share$3.60  $3.73  $9.22  $8.28 


    Net Debt-to-Capital Ratio
    The following table reconciles the Company’s ratio of debt to capital (calculated in accordance with GAAP) to the Company’s net debt-to-capital ratio (a non-GAAP financial measure). The net debt-to-capital ratio is calculated as (i) total debt minus mortgage warehouse loans minus cash and cash equivalents divided by (ii) total debt minus mortgage warehouse loans minus cash and cash equivalents plus stockholders’ equity.

    Net Debt-to-Capital Ratio Reconciliation
    (Amounts in thousands, except percentages)

      July 31, 2024 April 30, 2024 October 31, 2023
    Loans payable$1,099,787  $1,113,126  $1,164,224 
    Senior notes 1,596,873   1,596,644   1,596,185 
    Mortgage company loan facility 125,417   127,541   100,058 
    Total debt 2,822,077   2,837,311   2,860,467 
    Total stockholders’ equity 7,414,864   7,307,974   6,797,156 
    Total capital$10,236,941  $10,145,285  $9,657,623 
    Ratio of debt-to-capital 27.6%  28.0%  29.6%
           
    Total debt$2,822,077  $2,837,311  $2,860,467 
    Less:Mortgage company loan facility (125,417)  (127,541)  (100,058)
     Cash and cash equivalents (893,422)  (1,030,530)  (1,300,068)
    Total net debt 1,803,238   1,679,240   1,460,341 
    Total stockholders’ equity 7,414,864   7,307,974   6,797,156 
    Total net capital$9,218,102  $8,987,214  $8,257,497 
    Net debt-to-capital ratio 19.6%  18.7%  17.7%


    The Company’s management uses the net debt-to-capital ratio as an indicator of its overall leverage and believes it is a useful financial measure to investors in understanding the leverage employed in the Company’s operations.

    CONTACT: Gregg Ziegler (215) 478-3820
    gziegler@tollbrothers.com 

    A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/2acfe41a-3958-4453-9abc-801bafeb7188


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