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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended April 30, 2024
or
 Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                      to                     
Commission file number 001-09186
Toll Brothers, Inc.
(Exact name of registrant as specified in its charter)
Delaware
 
23-2416878
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
1140 Virginia DriveFort Washington
Pennsylvania
19034
(Address of principal executive offices)(Zip Code)
(215938-8000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareTOLNew York Stock Exchange
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 þ No o
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 þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.
Large accelerated filer Accelerated filer Non-accelerated filer
Smaller reporting company Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
At May 29, 2024, there were approximately 102,650,000 shares of Common Stock, par value $0.01 per share, outstanding.




TOLL BROTHERS, INC.
TABLE OF CONTENTS
 Page No.
  
  
 
  
 
  
  
  
  
  
  
  
 
  
  
  
  
  




STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information included in this report or in other materials we have filed or will file with the Securities and Exchange Commission (“SEC”) (as well as information included in oral statements or other written statements made or to be made by us) contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 related to: market conditions; mortgage rates; inflation rates; demand for our homes; our built-to-order and quick move-in home strategy; sales paces and prices; effects of home buyer cancellations; our strategic priorities; growth and expansion; our land acquisition, land development and capital allocation priorities; anticipated operating results; home deliveries; financial resources and condition; changes in revenues, profitability, margins and returns; changes in accounting treatment; cost of revenues, including expected labor and material costs; availability of labor and materials; selling, general and administrative expenses; interest expense; inventory write-downs; home warranty and construction defect claims; unrecognized tax benefits; anticipated tax refunds; joint ventures in which we are involved; anticipated results from our investments in unconsolidated entities; our ability to acquire 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; the outcome of legal proceedings, investigations, and claims; and the impact of public health or other emergencies.
From time to time, forward-looking statements also are included in other reports on Forms 10-K, 10-Q, and 8-K; in press releases; in presentations; on our website; and in other materials released to the public. These statements may include guidance regarding our future performance, such as our anticipated annual revenue, home deliveries, and margins, that represents management’s estimates as of the date of publication. Guidance is based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change.
Any or all of the forward-looking statements included in this report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties. Therefore, we caution you not to place undue reliance on our forward-looking statements. 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, interest and mortgage rates, home affordability, inflation, consumer sentiment, 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, and home components;
the impact of labor shortages, including on our subcontractors, supply chain and municipalities;
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, environmental 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; and
risks related to unauthorized access to our computer systems, theft of our and our homebuyers’ confidential information or other forms of cyber-attack.
Forward-looking statements. including any guidance, 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 our actual results to differ materially from expected and historical results, see “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 this report.
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.


1


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TOLL BROTHERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
April 30,
2024
October 31,
2023
 (unaudited) 
ASSETS
Cash and cash equivalents$1,030,530 $1,300,068 
Inventory 9,926,939 9,057,578 
Property, construction, and office equipment – net321,166 323,990 
Receivables, prepaid expenses, and other assets (1)
724,399 691,256 
Mortgage loans held for sale – at fair value136,346 110,555 
Customer deposits held in escrow108,521 84,530 
Investments in unconsolidated entities (1)
1,002,458 959,041 
 $13,250,359 $12,527,018 
LIABILITIES AND EQUITY
Liabilities
Loans payable$1,113,126 $1,164,224 
Senior notes1,596,644 1,596,185 
Mortgage company loan facility127,541 100,058 
Customer deposits542,877 540,718 
Accounts payable694,422 597,582 
Accrued expenses1,636,722 1,548,781 
Income taxes payable214,833 166,268 
Total liabilities5,926,165 5,713,816 
Equity
Stockholders’ equity
Preferred stock, none issued  
Common stock, 112,937 shares issued at April 30, 2024 and October 31, 20231,129 1,129 
Additional paid-in capital689,259 698,548 
Retained earnings7,350,235 6,675,719 
Treasury stock, at cost — 9,974 and 9,146 shares at April 30, 2024 and October 31, 2023, respectively(772,476)(619,150)
Accumulated other comprehensive income ("AOCI")39,827 40,910 
Total stockholders’ equity7,307,974 6,797,156 
Noncontrolling interest16,220 16,046 
Total equity7,324,194 6,813,202 
 $13,250,359 $12,527,018 
(1)    As of April 30, 2024 and October 31, 2023, Receivables, prepaid expenses, and other assets and Investments in unconsolidated entities include $98.2 million and $89.6 million, respectively, of assets related to consolidated variable interest entities (“VIEs”). See Note 3, “Investments in Unconsolidated Entities” for additional information regarding VIEs.






See accompanying notes.
2


TOLL BROTHERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands, except per share data)
(Unaudited)
Three months ended April 30,Six months ended April 30,
 2024202320242023
Revenues:
Home sales$2,647,020 $2,490,098 $4,578,856 $4,239,520 
Land sales and other190,466 16,881 206,478 47,628 
2,837,486 2,506,979 4,785,334 4,287,148 
Cost of revenues:
Home sales1,963,283 1,832,878 3,362,509 3,133,801 
Land sales and other12,979 20,850 23,140 63,285 
1,976,262 1,853,728 3,385,649 3,197,086 
Selling, general and administrative237,698 227,537 467,744 439,034 
Income from operations623,526 425,714 931,941 651,028 
Other:
Income (loss) from unconsolidated entities5,887 (5,302)(3,285)(9,735)
Other income – net20,366 10,180 32,284 43,095 
Income before income taxes649,779 430,592 960,940 684,388 
Income tax provision168,162 110,376 239,765 172,642 
Net income$481,617 $320,216 $721,175 $511,746 
Other comprehensive income (loss) – net of tax2,815 (279)(1,083)(3,743)
Total comprehensive income$484,432 $319,937 $720,092 $508,003 
Per share:
Basic earnings$4.60 $2.88 $6.87 $4.60 
Diluted earnings$4.55 $2.85 $6.80 $4.56 
Weighted-average number of shares:
Basic104,794 111,214 104,958 111,306 
Diluted105,803 112,184 106,034 112,260 








See accompanying notes.
3


TOLL BROTHERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands)
(Unaudited)

For the three months ended April 30, 2024 and 2023:
Common
Stock
Addi-
tional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
AOCINon-controlling InterestTotal
Equity
Balance, January 31, 2024$1,129 $685,941 $6,892,821 $(597,632)$37,012 $16,374 $7,035,645 
Net income481,617 481,617 
Purchase of treasury stock
(181,156)(181,156)
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances(571)6,312 5,741 
Stock-based compensation
3,889 3,889 
Dividends declared
(24,203)(24,203)
Other comprehensive income2,815 2,815 
Loss attributable to non-controlling interest(238)(238)
Capital contributions – net84 84 
Balance, April 30, 2024$1,129 $689,259 $7,350,235 $(772,476)$39,827 $16,220 $7,324,194 
Balance, January 31, 2023$1,279 $696,115 $6,335,574 $(865,775)$34,154 $15,647 $6,216,994 
Net income320,216 320,216 
Purchase of treasury stock
(83,846)(83,846)
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances(1,173)4,602 3,429 
Stock-based compensation
2,641 2,641 
Dividends declared
(23,288)(23,288)
Other comprehensive loss(279)(279)
Loss attributable to non-controlling interest(141)(141)
Balance,April 30, 2023$1,279 $697,583 $6,632,502 $(945,019)$33,875 $15,506 $6,435,726 

See accompanying notes.














4



For the six months ended April 30, 2024 and 2023:

Common
Stock
Addi-
tional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
AOCINon-controlling InterestTotal
Equity
Balance, October 31, 2023$1,129 $698,548 $6,675,719 $(619,150)$40,910 $16,046 $6,813,202 
Net income721,175 721,175 
Purchase of treasury stock
(181,212)(181,212)
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances(31,428)27,886 (3,542)
Stock-based compensation
22,139 22,139 
Dividends declared
(46,659)(46,659)
Other comprehensive loss(1,083)(1,083)
Loss attributable to non-controlling interest(440)(440)
Capital contributions - net614 614 
Balance, April 30, 2024$1,129 $689,259 $7,350,235 $(772,476)$39,827 $16,220 $7,324,194 
Balance, October 31, 2022$1,279 $716,786 $6,166,732 $(916,327)$37,618 $15,752 $6,021,840 
Net income511,746 511,746 
Purchase of treasury stock
(93,203)(93,203)
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances(36,228)64,511 28,283 
Stock-based compensation
17,025 17,025 
Dividends declared
(45,976)(45,976)
Other comprehensive loss(3,743)(3,743)
Loss attributable to non-controlling interest(246)(246)
Balance, April 30, 2023$1,279 $697,583 $6,632,502 $(945,019)$33,875 $15,506 $6,435,726 


See accompanying notes.
5


TOLL BROTHERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Six months ended April 30,
 20242023
Cash flow provided by operating activities:
Net income$721,175 $511,746 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization35,283 34,093 
Stock-based compensation22,139 17,025 
Loss from unconsolidated entities3,285 9,735 
Distributions of earnings from unconsolidated entities25,412 30,447 
Deferred tax provision7,216 8,646 
Impairment charges and write-offs35,400 36,773 
Gain on sale of assets(5,042) 
Other(973)2,371 
Changes in operating assets and liabilities: 
Inventory(679,337)(299,940)
Origination of mortgage loans(876,125)(705,500)
Sale of mortgage loans851,846 783,959 
Receivables, prepaid expenses, and other assets(24,817)4,233 
Current income taxes – net41,722 (127,199)
Customer deposits – net(21,832)(5,541)
Accounts payable and accrued expenses16,692 (155,277)
Net cash provided by operating activities152,044 145,571 
Cash flow used in investing activities:
Purchase of property, construction, and office equipment – net(29,701)(39,544)
Investments in unconsolidated entities(99,568)(117,221)
Return of investments in unconsolidated entities29,302 48,564 
Proceeds from the sale of assets 9,041 
Other – net(719) 
Net cash used in investing activities(100,686)(99,160)
Cash flow used in financing activities:
Proceeds from loans payable1,693,383 1,652,710 
Debt issuance costs (5,265)
Principal payments of loans payable(1,771,103)(1,771,636)
Redemption of senior notes (400,000)
(Payments) proceeds related to stock-based benefit plans – net(3,540)28,286 
Purchase of treasury stock(180,083)(93,089)
Dividends paid(47,069)(46,306)
Receipts related to noncontrolling interest – net167  
Net cash used in financing activities(308,245)(635,300)
Net decrease in cash, cash equivalents, and restricted cash(256,887)(588,889)
Cash, cash equivalents, and restricted cash, beginning of period1,344,341 1,398,550 
Cash, cash equivalents, and restricted cash, end of period$1,087,454 $809,661 
See accompanying notes.
6


TOLL BROTHERS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Significant Accounting Policies
Basis of Presentation
Our condensed consolidated financial statements include the accounts of Toll Brothers, Inc. (the “Company,” “we,” “us,” or “our”), a Delaware corporation, and its majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Investments in 50% or less owned partnerships and affiliates are accounted for using the equity method unless it is determined that we have effective control of the entity, in which case we would consolidate the entity.
Our unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The October 31, 2023 balance sheet amounts and disclosures have been derived from our October 31, 2023 audited financial statements. Since the condensed consolidated financial statements do not include all the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements, they should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2023 (“2023 Form 10-K”). In the opinion of management, the unaudited condensed consolidated financial statements include all recurring adjustments necessary to present fairly our financial position as of April 30, 2024; the results of our operations and changes in equity for the three-month and six-month periods ended April 30, 2024 and 2023; and our cash flows for the six-month periods ended April 30, 2024 and 2023. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates and assumptions may prove to be incorrect for a variety of reasons, whether as a result of the risks and uncertainties our business is subject to or for other reasons. In times of economic disruption when uncertainty regarding future economic conditions is heightened, our estimates and assumptions are subject to greater variability. Actual results could differ from the estimates and assumptions we make and such differences may be material.
Revenue Recognition
Home sales revenues: Revenues and cost of revenues from home sales are recognized at the time each home is delivered and title and possession are transferred to the buyer. For the majority of our home closings, our performance obligation to deliver a home is satisfied in less than one year from the date a binding sale agreement is signed. In certain states where we build, we are not able to complete certain outdoor features prior to the closing of the home. To the extent these separate performance obligations are not complete upon the home closing, we defer a portion of the home sales revenues related to these obligations and subsequently recognize the revenue upon completion of such obligations. As of April 30, 2024, the home sales revenues and related costs we deferred related to these obligations were immaterial. Our contract liabilities, consisting of deposits received from customers for sold but undelivered homes, totaled $542.9 million and $540.7 million at April 30, 2024 and October 31, 2023, respectively. Of the outstanding customer deposits held as of October 31, 2023, we recognized $153.1 million and $290.3 million in home sales revenues during the three months and six months ended April 30, 2024, respectively. Of the outstanding customer deposits held as of October 31, 2022, we recognized $152.2 million and $275.1 million in home sales revenues during the three months and six months ended April 30, 2023, respectively.
Land sales and other revenues: Our revenues from land sales and other generally consist of: (1) land sales to joint ventures in which we retain an interest; (2) lot sales to third-party builders within our master-planned communities; (3) bulk lot sales to third parties of land we have decided no longer meets our development criteria; (4) sales of land parcels to third parties (typically because there is a superior economic use of the property); and (5) sales of commercial and retail properties generally located at our high-rise urban luxury condominium projects. In general, our performance obligation for each of these land sales is fulfilled upon the delivery of the land, which generally coincides with the receipt of cash consideration from the counterparty. For land sale transactions that contain repurchase options, revenues and related costs are not recognized until the repurchase option expires. In addition, when we sell land to a joint venture in which we retain an interest, we do not recognize revenue or gains on the sale to the extent of our retained interest in such joint venture.
In February 2024, we sold a parcel of land to a commercial developer for net cash proceeds of $180.7 million, which resulted in a pre-tax gain of $175.2 million during the three and six months ended April 30, 2024.
7


Forfeited Customer Deposits: Forfeited customer deposits are recognized in “Home sales revenues” in our Condensed Consolidated Statements of Operations and Comprehensive Income in the period in which we determine that the customer will not complete the purchase of the home and we have the right to retain the deposit.
Sales Incentives: In order to promote sales of our homes, we may offer our home buyers sales incentives. These incentives vary by type of incentive and by amount on a community-by-community and home-by-home basis. Incentives are reflected as a reduction in home sales revenues. Incentives are recognized at the time the home is delivered to the home buyer and we receive the sales proceeds.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM. The amendments in this update also expand the interim segment disclosure requirements. ASU 2023-07 will be effective for our fiscal year ending October 31, 2025 and for interim periods starting in our first quarter of fiscal 2026. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. We are currently reviewing the impact that the adoption of ASU 2023-07 may have on our consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires expanded disclosure of our income tax rate reconciliation and income taxes paid. ASU 2023-09 will be effective for our fiscal year ending October 31, 2026 and may be applied either retrospectively or prospectively. We are currently evaluating ASU 2023-09 and do not expect it to have a material effect on our consolidated financial statements and disclosures.
In March 2024, the SEC issued final rules on the enhancement and standardization of climate-related disclosures. The rules require disclosure of material climate-related risks; activities to mitigate or adapt to such risks; governance and management of such risks; and material greenhouse gas (GHG) emissions from operations owned or controlled (Scope 1) and/or indirect emissions from purchased energy consumed in operations (Scope 2). Additionally, the rules require disclosures in the notes to the financial statements of the effects of severe weather events and other natural conditions, subject to certain materiality thresholds. Annual disclosure requirements will become effective for us, in part, for our fiscal year ending October 31, 2025, with certain requirements of the rule subject to later compliance dates. On March 15, 2024, a federal appellate court imposed a temporary stay pending judicial review of these new rules and on April 4, 2024, the SEC subsequently voluntarily stayed implementation pending completion of the judicial review. We are currently evaluating the impact of this final rule on our disclosures.

Reclassification
Certain prior period amounts have been reclassified to conform to the fiscal 2024 presentation.
8


2. Inventory
Major components of inventory at April 30, 2024 and October 31, 2023 were (amounts in thousands):
April 30,
2024
October 31,
2023
Land deposits and costs of future communities$509,981 $549,035 
Land and land development costs2,952,101 2,631,147 
Land and land development costs associated with homes under construction3,203,677 2,916,334 
Total land and land development costs6,665,759 6,096,516 
Homes under construction2,782,555 2,515,484 
Model homes (1)
478,625 445,578 
$9,926,939 $9,057,578 
(1)    Includes the allocated land and land development costs associated with each of our model homes in operation.
The following table provides a summary of the composition of our inventory based on community status at April 30, 2024 and October 31, 2023 (amounts in thousands):
April 30,
2024
October 31,
2023
Land controlled for future communities$142,118 $173,175 
Land owned for future communities684,170 663,413 
Operating communities9,100,651 8,220,990 
$9,926,939 $9,057,578 
Operating communities include communities offering homes for sale; communities that have sold all available home sites but have not completed delivery of the homes and communities preparing to open for sale. The carrying value attributable to operating communities includes the cost of homes under construction, land and land development costs, the carrying cost of home sites in current and future phases of these communities, and the carrying cost of model homes.
Backlog consists of homes under contract but not yet delivered to our home buyers (“backlog”).
The amounts we have provided for inventory impairment charges and the expensing of costs that we believe not to be recoverable, and which are included in home sales cost of revenues, are shown in the table below (amounts in thousands):
 Three months ended April 30,Six months ended April 30,
 2024202320242023
Land controlled for future communities$1,288 $5,844 $2,759 $8,448 
Land owned for future communities 325  325 
Operating communities27,140 4,900 27,140 10,300 
$28,428 $11,069 $29,899 $19,073 
We have also recognized $4.7 million and $17.7 million of impairment charges on land held for sale included in land sales and other cost of revenues during the three-month and six-month periods ended April 30, 2023, respectively. We recognized $0.6 million of similar impairment charges in the three-month and six-month periods ended April 30, 2024.
See Note 13, “Commitments and Contingencies,” for information regarding land purchase commitments.
At April 30, 2024, we evaluated our land purchase contracts, including those to acquire land for apartment developments, to determine whether any of the selling entities were variable interest entities (“VIEs”) and, if they were, whether we were the primary beneficiary of any of them. Under these land purchase contracts, we do not possess legal title to the land; our risk is generally limited to deposits paid to the sellers and predevelopment costs incurred; and the creditors of the sellers generally have no recourse against us. At April 30, 2024, we determined that 267 land purchase contracts, with an aggregate purchase price of $4.27 billion, on which we had made aggregate deposits totaling $422.6 million, were VIEs, and that we were not the primary beneficiary of any VIE related to our land purchase contracts. At October 31, 2023, we determined that 251 land purchase contracts, with an aggregate purchase price of $3.79 billion, on which we had made aggregate deposits totaling $421.4
9


million, were VIEs and that we were not the primary beneficiary of any VIE related to our land purchase contracts. However, at April 30, 2024 and October 31, 2023, certain contracts were accrued as we concluded we were economically compelled to purchase the land. See Note 6, “Accrued Expenses,” for information regarding liabilities related to consolidated inventory not owned.
Interest incurred, capitalized, and expensed, for the periods indicated, were as follows (amounts in thousands):
 Three months ended April 30,Six months ended April 30,
 2024202320242023
Interest capitalized, beginning of period$198,291 $215,197 $190,550 $209,468 
Interest incurred32,481 37,862 66,440 74,716 
Interest expensed to home sales cost of revenues(34,740)(37,558)(58,318)(62,638)
Interest expensed to land sales and other cost of revenues(726)(1,350)(1,020)(4,827)
Interest capitalized on investments in unconsolidated entities(2,219)(2,668)(4,707)(5,161)
Previously capitalized interest transferred to investments in unconsolidated entities   (244)
Previously capitalized interest on investments in unconsolidated entities transferred to inventory391 277 533 446 
Interest capitalized, end of period$193,478 $211,760 $193,478 $211,760 

3. Investments in Unconsolidated Entities
We have investments in various unconsolidated entities and our ownership interest in these investments ranges from 5.0% to 50%. These entities are structured as joint ventures and either: (i) develop land for the joint venture participants and for sale to outside builders (“Land Development Joint Ventures”); (ii) develop for-sale homes (“Home Building Joint Ventures”); (iii) develop luxury for-rent residential apartments and single family homes, commercial space, and a hotel (“Rental Property Joint Ventures”); or (iv) provide financing and land banking to residential builders and developers for the acquisition and development of land and home sites (“Gibraltar Joint Ventures”).
The table below provides information as of April 30, 2024, regarding active joint ventures that we are invested in, by joint venture category ($ amounts in thousands):
 Land
Development
Joint Ventures
Home Building
Joint Ventures
Rental Property
Joint Ventures
Gibraltar
Joint Ventures
Total
Number of unconsolidated entities
15242261
Investment in unconsolidated entities (1)
$364,737 $61,669 $564,811 $11,241 $1,002,458 
Number of unconsolidated entities with funding commitments by the Company
6211 28
Company’s remaining funding commitment to unconsolidated entities (2)
$160,488 $ $150,363 $8,508 $319,359 
(1)    Our total investment includes $147.1 million related to 9 unconsolidated joint venture-related variable interests in VIEs and our maximum exposure to losses related to these VIEs is approximately $373.2 million as of April 30, 2024, inclusive of our investment in these joint ventures. Our ownership interest in such unconsolidated Joint Venture VIEs ranges from 25% to 50%.
(2)    Our remaining funding commitment includes approximately $123.9 million related to our unconsolidated joint venture-related variable interests in VIEs.
10


The table below provides information as of October 31, 2023, regarding active joint ventures that we are invested in, by joint venture category ($ amounts in thousands):
 Land
Development
Joint Ventures
Home Building
Joint Ventures
Rental Property
Joint Ventures
Gibraltar
Joint Ventures
Total
Number of unconsolidated entities
16243364
Investment in unconsolidated entities (1)
$351,154 $65,285 $531,823 $10,779 $959,041 
Number of unconsolidated entities with funding commitments by the Company
9191 29
Company’s remaining funding commitment to unconsolidated entities (2)
$204,438 $ $184,266 $12,066 $400,770 
(1)    Our total investment includes $121.6 million related to 11 unconsolidated joint venture-related variable interests in VIEs and our maximum exposure to losses related to these VIEs is approximately $329.3 million as of October 31, 2023, inclusive of our investment in joint ventures. Our ownership interest in such unconsolidated Joint Venture VIEs ranges from 25% to 50%.
(2)    Our remaining funding commitment includes approximately $105.4 million related to our unconsolidated joint venture-related variable interests in VIEs.
Certain joint ventures in which we have investments obtained debt financing to finance a portion of their activities. The table below provides information at April 30, 2024, regarding the debt financing obtained by category ($ amounts in thousands):
 Land
Development
Joint Ventures
Home Building
Joint Ventures
Rental Property
Joint Ventures
Total
Number of joint ventures with debt financing
1023951
Aggregate loan commitments$587,611 $219,650 $3,607,368 $4,414,629 
Amounts borrowed under loan commitments
$439,606 $183,868 $2,450,959 $3,074,433 
The table below provides information at October 31, 2023, regarding the debt financing obtained by category ($ amounts in thousands):
 Land
Development
Joint Ventures
Home Building
Joint Ventures
Rental Property
Joint Ventures
Total
Number of joint ventures with debt financing
1224256
Aggregate loan commitments$610,758 $219,650 $3,731,847 $4,562,255 
Amounts borrowed under loan commitments$445,506 $135,723 $2,152,872 $2,734,101 
More specific and/or recent information regarding our investments in, advances to, and future commitments to these entities is provided below.
New Joint Ventures
There were no new joint ventures entered into during the six-months ended April 30, 2024. The table below provides information on joint ventures entered into during the six-months ended April 30, 2023 ($ amounts in thousands):
Land Development Joint VenturesRental Property Joint Ventures
Number of unconsolidated joint ventures entered into during the period12 
Investment balance at April 30, 2023$11,755 4,795 
Results of Operations and Intra-entity Transactions
From time to time, certain of our land development and rental property joint ventures sell assets to unrelated parties or to our joint venture partners. In April 2024, one of our Rental Property Joint Ventures sold its assets and we recognized $21.0 million in “Income (loss) from unconsolidated entities” on our Condensed Consolidated Statements of Operations and Comprehensive Income in the three-month and six-month periods ended April 30, 2024. None of our Rental Property Joint Ventures sold assets in the three-month or six-month periods ended April 30, 2023.
In the three-month periods ended April 30, 2024 and 2023, we purchased land from unconsolidated entities, principally related to our acquisition of lots from our Land Development Joint Ventures, totaling $35.0 million and $52.4 million, respectively. In
11


the six-month periods ended April 30, 2024 and 2023, we purchased land from unconsolidated entities, principally related to our acquisition of lots from our Land Development Joint Ventures, totaling $61.9 million and $69.1 million, respectively. Our share of income from the lots we acquired was insignificant in each period.
In the three-month and six-month periods ended April 30, 2023, we sold land to unconsolidated entities, which principally involved land sales to our Rental Property Joint Ventures, for $8.2 million. This amount is included in “Land sales and other revenue” on our Condensed Consolidated Statements of Operations and Comprehensive Income and are generally sold at or near our land basis. No similar land sales to unconsolidated entities occurred in the three-month or six-month periods ended April 30, 2024.
Guarantees
The unconsolidated entities in which we have investments generally finance their activities with a combination of partner equity and debt financing. In some instances, we have guaranteed portions of the debt of unconsolidated entities. These guarantees may include any or all of the following: (i) project completion guarantees, including any cost overruns; (ii) repayment guarantees, generally covering a percentage of the outstanding loan; (iii) carry cost guarantees, which cover costs such as interest, real estate taxes, and insurance; (iv) an environmental indemnity provided to the lender that holds the lender harmless from and against losses arising from the discharge of hazardous materials from the property and non-compliance with applicable environmental laws; and (v) indemnification of the lender from “bad boy acts” of the unconsolidated entity or its partners.
In some instances, we and our joint venture partner have provided joint and several guarantees in connection with loans to unconsolidated entities. In these situations, 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 share.
We believe that, as of April 30, 2024, in the event we become legally obligated to perform under a guarantee of an obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay a significant portion of the obligation. If it is not, we and our partners would need to contribute additional capital to the venture.
Information with respect to certain of the Company’s unconsolidated entities’ outstanding debt obligations, loan commitments and our guarantees thereon are as follows ($ amounts in thousands):
April 30, 2024October 31, 2023
Loan commitments in the aggregate$3,221,000 $3,341,700 
Our maximum estimated exposure under repayment and carry cost guarantees if the full amount of the debt obligations were borrowed (1)
$694,800 $688,000 
Debt obligations borrowed in the aggregate$1,998,900 $1,643,600 
Our maximum estimated exposure under repayment and carry cost guarantees of the debt obligations borrowed$590,600 $544,100 
Estimated fair value of guarantees provided by us related to debt and other obligations$18,900 $19,500 
Terms of guarantees
1 month -
3.5 years
1 month -
4.0 years
(1)    At April 30, 2024 and October 31, 2023, our maximum estimated exposure under repayment and carry cost guarantees includes approximately $102.3 million, related to our unconsolidated joint venture VIEs.

The maximum exposure estimates presented above 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 indemnities noted above, which are not estimable. We have not made payments under any of the outstanding guarantees, nor have we been called upon to do so.

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Variable Interest Entities

We have both unconsolidated and consolidated joint venture-related variable interests in VIEs. Information regarding our involvement in unconsolidated joint-venture related variable interests in VIEs has been disclosed throughout information presented above.

The table below provides information as of April 30, 2024 and October 31, 2023, regarding our consolidated joint venture-related variable interests in VIEs ($ amounts in thousands):
Balance Sheet ClassificationApril 30,
2024
October 31,
2023
Number of Joint Venture VIEs that the Company is the primary beneficiary and consolidates
5 5 
Carrying value of consolidated VIEs assetsReceivables, prepaid expenses and other assets and Investments in unconsolidated entities$98,200 $89,600 
Our partners’ interests in consolidated VIEsNoncontrolling interest$10,200 $10,200 
Our ownership interest in the above consolidated Joint Venture VIEs ranges from 75% to 98%.
As shown above, we are the primary beneficiary of certain VIEs due to our controlling financial interest in such ventures as we have the power to direct the activities that most significantly impact the joint ventures’ performance and the obligation to absorb expected losses or receive benefits from the joint ventures. The assets of these VIEs can only be used to settle the obligations of the VIEs. In addition, in certain of the joint ventures, in the event additional contributions are required to be funded to the joint ventures prior to the admission of any additional investor at a future date, we will fund 100% of such contributions, including our partner’s pro rata share, which we expect would be funded through an interest-bearing loan. For other VIEs, we are not the primary beneficiary because the power to direct the activities of such VIEs that most significantly impact their performance was either shared by us and such VIE’s other partners or such activities were controlled by our partner. For VIEs where the power to direct significant activities is shared, business plans, budgets, and other major decisions are required to be unanimously approved by all partners. Management and other fees earned by us are nominal and believed to be at market rates, and there is no significant economic disproportionality between us and other partners.

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Joint Venture Condensed Combined Financial Information
The Condensed Combined Balance Sheets, as of the dates indicated, and the Condensed Combined Statements of Operations, for the periods indicated, for the unconsolidated entities in which we have an investment are included below (in thousands):
Condensed Combined Balance Sheets:
 April 30,
2024
October 31,
2023
Cash and cash equivalents$176,417 $161,274 
Inventory1,398,222 1,425,145 
Loans receivable – net17,009 17,024 
Rental properties2,393,332 1,907,604 
Rental properties under development1,746,741 1,804,664 
Other assets452,134 385,197 
Total assets$6,183,855 $5,700,908 
Debt – net of deferred financing costs$3,024,164 $2,711,986 
Other liabilities506,851 498,866 
Partners’ equity2,652,840 2,490,056 
Total liabilities and equity$6,183,855 $5,700,908 
Company’s net investment in unconsolidated entities (1)
$1,002,458 $959,041 
(1)    Our underlying equity in the net assets of the unconsolidated entities was less than our net investment in unconsolidated entities by $20.4 million and $40.9 million as of April 30, 2024 and October 31, 2023, respectively, and these differences are primarily a result of interest capitalized on our investments; the estimated fair value of the guarantees provided to the joint ventures; distributions from entities in excess of the carrying amount of our net investment; unrealized gains on our retained joint venture interests; other than temporary impairments we have recognized; and gains recognized from the sale of our ownership interests.
Condensed Combined Statements of Operations:
 Three months ended April 30,Six months ended April 30,
 2024202320242023
Revenues$127,336 $125,397 $284,531 $237,116 
Cost of revenues81,520 78,613 166,801 137,966 
Other expenses72,443 56,655 139,767 119,729 
Total expenses153,963 135,268 306,568 257,695 
Loss from operations(26,627)(9,871)(22,037)(20,579)
Other income (loss) (2)
111,871 (2,276)109,910 (3,632)
Income (loss) before income taxes85,244 (12,147)87,873 (24,211)
Income tax benefit(2,069)(148)(2,349)(166)
Net income (loss)87,313 (11,999)90,222 (24,045)
Company’s income (loss) from unconsolidated entities (3)
$5,887 $(5,302)$(3,285)$(9,735)
(2)    The three and six months ended April 30, 2024 includes $112.7 million, related to the gain on the sale of assets by one of our Rental Property Joint Ventures.
(3)    Differences between our loss from unconsolidated entities and our percentage interest in the underlying net income (loss) of the entities are generally a result of distributions from entities in excess of the carrying amount of our investment; promote earned on the gains recognized by joint ventures and those promoted cash flows being distributed; other than temporary impairments we have recognized; recoveries of previously incurred charges; unrealized gains on our retained joint venture interests; gains recognized from the sale of our investment to our joint venture partner; our share of the entities’ profits related to home sites purchased by us which reduces our cost basis of the home sites acquired; and amortization of other basis differences.
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4. Receivables, Prepaid Expenses, and Other Assets
Receivables, prepaid expenses, and other assets at April 30, 2024 and October 31, 2023, consisted of the following (amounts in thousands):
April 30, 2024October 31, 2023
Expected recoveries from insurance carriers and others$101,574 $94,987 
Improvement cost receivable42,815 40,992 
Escrow cash held by our wholly owned captive title company55,281 44,273 
Properties held for rental apartment and commercial development248,631 225,261 
Prepaid expenses32,316 43,763 
Right-of-use asset101,715 102,787 
Derivative assets31,484 41,612 
Other110,583 97,581 
 $724,399 $691,256 

5. Loans Payable, Senior Notes, and Mortgage Company Loan Facility
Loans Payable
At April 30, 2024 and October 31, 2023, loans payable consisted of the following (amounts in thousands):
April 30,
2024
October 31,
2023
Senior unsecured term loan$650,000 $650,000 
Loans payable – other465,750 517,378 
Deferred issuance costs(2,624)(3,154)
$1,113,126 $1,164,224 
Senior Unsecured Term Loan
We are party to a $650.0 million senior unsecured term loan facility (the “Term Loan Facility”) with a syndicate of banks of which $487.5 million matures February 14, 2028, $60.9 million matures on November 1, 2026 and the remaining $101.6 million matures on November 1, 2025. There are no payments required before these stated maturity dates. At April 30, 2024, the interest rate on the Term Loan Facility was 6.46% per annum. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors under the Term Loan Facility. The Term Loan Facility contains substantially the same financial covenants as the Revolving Credit Facility described below.
In November 2020, we entered into five interest rate swap transactions to hedge $400.0 million of the Term Loan Facility. The interest rate swaps effectively fix the interest cost on the $400.0 million at 0.369% plus the spread set forth in the pricing schedule in the Term Loan Facility through October 2025. The spread at April 30, 2024 was 1.15%. These interest rate swaps were designated as cash flow hedges.
Revolving Credit Facility
At April 30, 2024, we had a $1.905 billion senior unsecured revolving credit facility (the “Revolving Credit Facility”) with a syndicate of banks that is scheduled to mature on February 14, 2028. The Revolving Credit Facility provides us with a committed borrowing capacity of $1.905 billion, which we have the ability to increase up to $3.00 billion with the consent of lenders. 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 May 2, 2024, we increased the aggregate committed borrowing capacity of our Revolving Credit Facility to $1.955 billion.
Under the terms of the Revolving Credit Facility, at April 30, 2024, our maximum leverage ratio, as defined, was not permitted to exceed 1.75 to 1.00, and we were required to maintain a minimum tangible net worth, as defined, of no less than approximately $4.11 billion. Under the terms of the Revolving Credit Facility, at April 30, 2024, our leverage ratio was approximately 0.28 to 1.00, and our tangible net worth was approximately $7.26 billion. Based upon the terms of the Revolving Credit Facility, our ability to repurchase our common stock was limited to approximately $3.93 billion as of April 30, 2024. In
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addition, under the provisions of the Revolving Credit Facility, our ability to pay cash dividends was limited to approximately $3.15 billion as of April 30, 2024.
At April 30, 2024, we had no outstanding borrowings under the Revolving Credit Facility and had approximately $170.0 million of outstanding letters of credit that were issued under the Revolving Credit Facility. At April 30, 2024, the interest rate on outstanding borrowings under the Revolving Credit Facility would have been 6.61% per annum.
Loans Payable – Other
“Loans payable – other” primarily represents purchase money mortgages on properties we acquired that the seller had financed, project-level financing, and various revenue bonds that were issued by government entities on our behalf to finance community infrastructure and our manufacturing facilities. At April 30, 2024, the weighted-average interest rate on “Loans payable – other” was 5.58% per annum.
Senior Notes
At April 30, 2024, we had four issues of senior notes outstanding with an aggregate principal amount of $1.60 billion.
In our second quarter of fiscal 2023, we redeemed all $400.0 million principal amount of 4.375% Senior Notes due April 15, 2023, at par, plus accrued interest.
Mortgage Company Loan Facilities
Toll Brothers Mortgage Company (“TBMC”), our wholly owned mortgage subsidiary, had a mortgage warehousing agreement (the “Warehousing Agreement”) with a bank to finance the origination of mortgage loans by TBMC. The Warehousing Agreement was accounted for as a secured borrowing under ASC 860, “Transfers and Servicing.” The Warehousing Agreement provided for loan purchases up to $75.0 million, subject to certain sublimits. In addition, the Warehousing Agreement provided for an accordion feature under which TBMC could request that the aggregate commitments under the Warehousing Agreement be increased to an amount up to $150.0 million for a short period of time. Borrowings under the Warehousing Agreement bore interest at BSBY plus 1.75% per annum (with a BSBY floor of 0.50%). The Warehousing Agreement was terminated in January 2024.
On December 5, 2023, TBMC executed a new Warehousing Agreement (“New Warehousing Agreement”) with a bank that provides for loan purchases up to $75.0 million, subject to certain sublimits. In addition, the New Warehousing Agreement, provides for an accordion feature under which TBMC may request that the aggregate commitments under the New Warehousing Agreement be increased to an amount up to $150.0 million for a short period of time. The New Warehousing Agreement is accounted for as a secured borrowing under ASC 860, “Transfers and Servicing.” TMBC is also subject to an under usage fee based on outstanding balances, as defined in the New Warehousing Agreement. The New Warehousing Agreement is set to expire on December 3, 2024 and bears interest at SOFR plus 1.75% per annum (with a SOFR floor of 2.50%). At April 30, 2024, the interest rate on the New Warehousing Agreement was 7.08% per annum.
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6. Accrued Expenses
Accrued expenses at April 30, 2024 and October 31, 2023 consisted of the following (amounts in thousands):
April 30,
2024
October 31,
2023
Land development and construction$310,387 $286,516 
Liabilities related to consolidated inventory not owned356,500 268,630 
Compensation and employee benefits184,922 212,684 
Escrow liability associated with our wholly owned captive title company52,704 42,451 
Self-insurance227,152 230,688 
Warranty206,717 206,171 
Lease liabilities122,197 123,866 
Deferred income54,334 52,907 
Interest29,930 30,044 
Commitments to unconsolidated entities32,619 29,212 
Other59,260 65,612 
$1,636,722 $1,548,781 
The table below provides, for the periods indicated, a reconciliation of the changes in our warranty accrual (amounts in thousands):
 Three months ended April 30,Six months ended April 30,
 2024202320242023
Balance, beginning of period$202,920 $156,895 $206,171 $164,409 
Additions – homes closed during the period9,143 10,084 14,965 17,270 
Change in accruals for homes closed in prior years – net9,344 (73)12,145 2,023 
Charges incurred(14,690)(17,511)(26,564)(34,307)
Balance, end of period$206,717 $149,395 $206,717 $149,395 
Since fiscal 2014, we have received water intrusion claims from owners of homes built since 2002 in communities located in Pennsylvania and Delaware (which are in our North region). Our recorded estimated repair costs to resolve these claims were approximately $40.1 million at April 30, 2024 and $41.1 million at October 31, 2023. We continue to perform review procedures to assess, among other things, the number of affected homes, whether repairs are likely to be required, and the extent of such repairs.
Our review process, conducted quarterly, includes an analysis of many factors to determine whether a claim is likely to be received and the estimated costs to resolve any such claim, 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; the expected recovery from our insurance carriers and suppliers; 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. Our review process includes a number of estimates that are based on assumptions with uncertain outcomes. Due to the degree of judgment required in making these estimates and the inherent uncertainty in potential outcomes, it is reasonably possible that our actual costs and recoveries could differ from those recorded. However, based on the facts and circumstances currently known, we do not believe that any such differences would be material.
7. Income Taxes
We recorded income tax provisions of $168.2 million and $110.4 million for the three months ended April 30, 2024 and 2023, respectively. The effective tax rate was 25.9% for the three months ended April 30, 2024, compared to 25.6% for the three months ended April 30, 2023. We recorded income tax provisions of $239.8 million and $172.6 million for the six months ended April 30, 2024 and 2023, respectively. The effective tax rate was 25.0% for the six months ended April 30, 2024, compared to 25.2% for the six months ended April 30, 2023. The income tax provisions for all periods included the provision for state income taxes, interest accrued on anticipated tax assessments, excess tax benefits related to stock-based compensation, federal energy efficient home credits and other permanent differences.
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We are subject to state tax in the jurisdictions in which we operate. We estimate our state tax liability based upon the individual taxing authorities’ regulations, estimates of income by taxing jurisdiction, and our ability to utilize certain tax-saving strategies. Based on our estimate of the allocation of income or loss among the various taxing jurisdictions and changes in tax regulations and their impact on our tax strategies, we estimate that our state income tax rate for the full fiscal year 2024 will be approximately 6.1%. Our state income tax rate for the full fiscal year 2023 was 6.2%.
At April 30, 2024, we had $12.0 million of gross unrecognized tax benefits, including interest and penalties. If these unrecognized tax benefits were to reverse in the future, they would have a beneficial impact on our effective tax rate at that time. During the next 12 months, it is reasonably possible that our unrecognized tax benefits will change, but we are not able to provide a range of such change. The possible changes would be principally due to the expiration of tax statutes, settlements with taxing jurisdictions, increases due to new tax positions taken, and the accrual of estimated interest and penalties.
8. Stock-Based Benefit Plans
We grant various types of restricted stock units to our employees and our non-employee directors. We also granted stock options to certain of our employees and non-employee directors through fiscal year 2023. Additionally, we have an employee stock purchase plan that allows employees to purchase our stock at a discount. Information regarding the amount of total stock-based compensation expense and tax benefit recognized by us, for the periods indicated, is as follows (amounts in thousands):
Three months ended April 30,Six months ended April 30,
2024202320242023
Total stock-based compensation expense recognized$3,889 $2,641 $22,139 $17,025 
Income tax benefit recognized$1,466 $666 $5,676 $4,304 
At April 30, 2024 and October 31, 2023, the aggregate unamortized value of unvested stock-based compensation awards was approximately $29.8 million and $23.2 million, respectively.
9. Stockholders’ Equity
Stock Repurchase Program
From time to time since fiscal 2017, our Board of Directors has renewed its authorization to repurchase up to 20 million shares of our common stock in open market transactions, privately negotiated transactions (including accelerated share repurchases), issuer tender offers or other financial arrangements or transactions. On December 13, 2023, our Board of Directors renewed its authorization to repurchase 20 million shares of our common stock. Shares may be repurchased for general corporate purposes, including to obtain shares for the Company’s equity awards and other employee benefit plans. This authorization terminated, effective December 13, 2023, the existing authorization that had been in effect since May 17, 2022. The Board of Directors did not fix any expiration date for this repurchase program.
The table below provides, for the periods indicated, information about our share repurchase programs:
 Three months ended April 30,Six months ended April 30,
 2024202320242023
Number of shares purchased (in thousands)1,502 1,443 1,503 1,630 
Average price per share (1)
$120.60 $58.14 $120.59 $57.20 
Remaining authorization at April 30 (in thousands)18,498 12,947 18,498 12,947 
(1)    Average price per share includes costs associated with the purchases, including the excise tax accrued on our share repurchases as a result of the Inflation Reduction Act of 2022, as applicable.
Cash Dividends
On March 12, 2024, our Board of Directors approved an increase in our quarterly cash dividend from $0.21 per share to $0.23 per share. During the three month periods ended April 30, 2024 and 2023, we declared and paid cash dividends of $0.23 and $0.21 per share, respectively, to our shareholders. During the six months ended April 30, 2024 and 2023, we declared and paid cash dividends of $0.44 and $0.41 per share, respectively, to our shareholders.
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Accumulated Other Comprehensive Income
The changes in each component of accumulated other comprehensive income (“AOCI”), for the periods indicated, were as follows (amounts in thousands):
Three months ended April 30,Six months ended April 30,
2024202320242023
Employee Retirement Plans
Beginning balance$2,996 $2,492 $3,080 $2,475 
(Gains) losses reclassified from AOCI to net income (1)
(114)24 (227)47 
Less: Tax expense (benefit) (2)
29 (6)58 (12)
Net (gains) losses reclassified from AOCI to net income(85)18 (169)35 
Other comprehensive (loss) income – net of tax(85)18 (169)35 
Ending balance$2,911 $2,510 $2,911 $2,510 
Derivative Instruments
Beginning balance$34,016 $31,662 $37,830 $35,143 
Gains (losses) on derivative instruments6,378 588 2,810 (3,709)
Less: Tax (expense) benefit(1,964)(138)(1,059)948 
Net gains (losses) on derivative instruments4,414 450 1,751 (2,761)
Gains reclassified from AOCI to net income (3)
(2,496)(1,000)(4,039)(1,362)
Less: Tax expense (2)
982 253 1,374 345 
Net gains reclassified from AOCI to net income(1,514)(747)(2,665)(1,017)
Other comprehensive income (loss) – net of tax2,900 (297)(914)(3,778)
Ending balance$36,916 $31,365 $36,916 $31,365 
Total AOCI ending balance$39,827 $33,875 $39,827 $33,875 
(1) Reclassified to “Other income – net”
(2) Reclassified to “Income tax provision”
(3) Reclassified to “Cost of revenues – home sales”
10. Earnings per Share Information
The table below provides, for the periods indicated, information pertaining to the calculation of earnings per share, common stock equivalents, weighted-average number of antidilutive options, and shares issued (amounts in thousands):
 Three months ended April 30,Six months ended April 30,
 2024202320242023
Numerator:
Net income as reported$481,617 $320,216 $721,175 $511,746 
Denominator:
Basic weighted-average shares104,794 111,214 104,958 111,306 
Common stock equivalents (1)
1,009 970 1,076 954 
Diluted weighted-average shares105,803 112,184 106,034 112,260 
Other information:
Weighted-average number of antidilutive options and restricted stock units (2)
7 168 72 334 
Shares issued under stock incentive and employee stock purchase plans154 103 675 1,437 
(1)    Common stock equivalents represent the dilutive effect of outstanding in-the-money stock options using the treasury stock method and shares expected to be issued upon the conversion of restricted stock units under our equity award programs.
(2)    Weighted-average number of antidilutive options and restricted stock units are based upon the average closing price of our common stock on the New York Stock Exchange for the period.
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11. Fair Value Disclosures
Financial Instruments
The table below provides, as of the dates indicated, a summary of assets/(liabilities) related to our financial instruments, measured at fair value on a recurring basis (amounts in thousands):
  Fair value
Financial InstrumentFair value
hierarchy
April 30, 2024October 31, 2023
Mortgage Loans Held for SaleLevel 2$136,346 $110,555 
Forward Loan Commitments — Mortgage Loans Held for SaleLevel 2$1,694 $2,234 
Interest Rate Lock Commitments (“IRLCs”)Level 2$(2,013)$(4,135)
Forward Loan Commitments — IRLCsLevel 2$2,013 $4,135 
Interest Rate Swap ContractsLevel 2$27,776 $35,243 
At April 30, 2024 and October 31, 2023, the carrying value of cash and cash equivalents, escrow cash held by our wholly owned captive title company, and customer deposits held in escrow approximated fair value.
The fair values of the interest rate swap contracts are included in “Receivables, prepaid expenses and other assets” in our Condensed Consolidated Balance Sheets and are determined using widely accepted valuation techniques including discounted cash flow analysis based on the expected cash flows of each swap contract. Although the Company has determined that the significant inputs, such as interest yield curve and discount rate, used to value its interest rate swap contracts fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of April 30, 2024, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our interest rate swap contract positions and have determined that the credit valuation adjustments were not significant to the overall valuation of our interest rate swap contracts. As a result, we have determined that our interest rate swap contracts valuations in their entirety are classified in Level 2 of the fair value hierarchy.
Mortgage Loans Held for Sale
At the end of the reporting period, we determine the fair value of our mortgage loans held for sale and the forward loan commitments we have entered into as a hedge against the interest rate risk of our mortgage loans and commitments using the market approach to determine fair value.
The table below provides, as of the dates indicated, the aggregate unpaid principal and fair value of mortgage loans held for sale (amounts in thousands):
Aggregate unpaid
principal balance
Fair valueFair value
greater (less) than principal balance
At April 30, 2024$139,113 $136,346 $(2,767)
At October 31, 2023$114,835 $110,555 $(4,280)
Inventory
We recognize inventory impairment charges and land impairment charges based on the difference in the carrying value of the inventory and its fair value at the time of the evaluation. The fair value of the aforementioned inventory was determined using Level 3 criteria. Estimated fair value is primarily determined by discounting the estimated future cash flow of each community. In determining the fair value related to land impairments, we consider recent offers received, prices for land in recent comparable sales transactions, and other factors. We record land impairments related to land parcels we plan to sell to third parties within land sales and other cost of revenues. See Note 1, “Significant Accounting Policies – Inventory,” in our 2023 Form 10-K for additional information regarding our methodology for determining fair value. Impairments of inventory were insignificant during the three-months and six-month periods ended April 30, 2024 and 2023 and, accordingly, we did not disclose the ranges of certain quantitative unobservable inputs utilized in determining the fair value of these impaired operating communities.
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Debt
The table below provides, as of the dates indicated, the book value, excluding any bond discounts, premiums, and deferred issuance costs, and estimated fair value of our debt (amounts in thousands):
 April 30, 2024October 31, 2023
 Fair value
hierarchy
Book valueEstimated
fair value
Book valueEstimated
fair value
Loans payable (1)
Level 2$1,115,750 $1,091,970 $</