Toll Brothers, Inc. · NYSE:TOL
Toll Brothers — Q4 2024 Earnings Presentation
25 slides from Toll Brothers's earnings presentation, December 2024
Slide 1: Fourth Quarter 2024 Company Overview
* “ATES | SCOJTSD/ S| SCC ALE, AZ FOURTH QUARTER 2024 COMPANY OVERVIEW Toll Brothers AMERICA'S LUXURY HOME BUILDER
Slide 2: Information presented herein for the fourth quarter ended
Information presented herein for the fourth quarter ended October 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
Slide 3: Factors Supporting Demand
FACTORS SUPPORTING DEMAND * Constrained supply of new & resale homes on the market * Buyers have benefited from a decade of solid stock market * Boomers making lifestyle changes * Largest wealth transfer from Boomers to Millennials * Millennials in prime home buying years * Largest ever immigration
Slide 4: Evolution of the Homebuilding Industry
EVOLUTION OF THE HOMEBUILDING INDUSTRY LARGEST PLAYERS ARE TAKING SHARE * Public homebuilders have gone from 27% market share in 2012 to ~59% in November 2024* *Source: Zonda BETTER BUSINESS MODEL Greater access to capital & labor Higher bargaining power with suppliers FOCUSED ON CAPITAL EFFICIENCY
Slide 5: 1,600 80% 1,400 70% 1,200 60% 1,000 50% 40% 30% 20% 200 10% 0
1,600 80% 1,400 70% 1,200 60% 1,000 50% 800 40% 600 30% 400 20% 200 10% 0 0%
Slide 6: Industry Is Undersupplied as Households Increase
INDUSTRY IS UNDERSUPPLIED AS HOUSEHOLDS INCREASE HOUSING STARTS HAVE NOT KEPT PACE WITH HOUSEHOLD GROWTH 130,000 110,000 90,000 Households (000s) Source: U.S. Census Bureau 1970-1979 Average Annual Housing Starts 1.77MM 1980-1989 Average Annual Housing Starts 149MM 1990-1999 2000-2007 Average Annual
Slide 7: New Home Premium
NEW HOME PREMIUM THE NEW HOME PREMIUM HAS COMPRESSED FROM HISTORICAL 17% TO 3% TODAY, MAKING THE VALUE PROPOSITION OF A NEW HOME COMPELLING COMPARED TO A USED HOME 40% 35% 30% 25% 7 20% 15% 10% 5% 0% 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 VIEWPOINT AT METRO HEIGHT
Slide 8: Existing Housing Stock Is Aging
EXISTING HOUSING STOCK IS AGING THE MEDIAN AGE OF OWNER-OCCUPIED U.S. HOMES IS OVER 40 YEARS, ACCORDING TO THE LATEST DATA, COMPARED TO A MEDIAN AGE OF 32 YEARS IN 2005. MEDIAN AGE OF OWNER-OCCUPIED HOUSING (IN YEARS) 43 42 42 2005 2007 2009 201 2013 2015 2017 2019 2021 2022 2023 TOLL BROTHERS AT RO
Slide 9: National Footprint Positions Toll Brothers for Growth
NATIONAL FOOTPRINT POSITIONS TOLL BROTHERS FOR GROWTH 24. STATES 60+ markets Portland @ Boise Sacramento Ve} Pacific San Frencisco @) San Jose 13% of Communities 13% of Lots Controlled 22% of Revenue Los Angeles Commi Regions | COmmUnY | Lot count Mountain 25% of Revenue Note: Data as of October 31,
Slide 10: Prestigious Locations, Distinctive Architecture, Unrivaled Choice
10 A VY DY PRESTIGIOUS DISTINCTIVE UNRIVALED EXTRAORDINARY CUSTOMER LOCATIONS ARCHITECTURE CHOICE EXPERIENCE
Slide 11: Strategy Focused on Driving Shareholder Returns
STRATEGY FOCUSED ON DRIVING SHAREHOLDER RETURNS LAND ACQUISITION Focus on increasing optioned land Using land banking, JVs, rolling takedowns, & seller financing where feasible Operate in some of the most difficult land approval markets in U.S. - once you get it approved, it’s gold! BUYBACKS & DIVID
Slide 12: Book Value per Share
BOOK VALUE PER SHARE $76.87 iy $65.49 4 12 1 r 3 I! 38.53 x, $35.99 $ ml $32.57 $26.14 $28.82 $24.15 F 22.02 sio68 * 2013 2014 2015 2016 2017 2018 2019 2020 = 2021 2022 ©2023 = 2024
Slide 13: Return on Beginning Equity
RETURN ON BEGINNING EQUITY 24.3% 22.8% 23.1% 12.7% 12.4% 10.2% 9.0% 8.8% 5.5% 2013. «2014 «2015-2016 = 2017-2018)» 2019. 2020-2021: «2022 «2023-2024 TOLL BROTHERS AT SleteiaeO N MEADOWS “ERIE, CO « « 3
Slide 14: Earnings per Share
EARN 2ER SHARE $15.01 $12.36 $6.63 $4.85 $4.03 $3.17 $3.40 gis4 $1.97 $2.18 $0.97 2013. «2014 «2015-2016 = 2017-2018)» 2019. 2020-2021: «2022 «2023-2024 14
Slide 15: Total Shareholder Return
TOTAL SHAREHOLDER RETURN 75% 385% 390% 300% 249% 11% 125% 109% 50% 31% 35% [ 38% 1-Year 3-Year 5-Year 10-Year mToll Brothers (TOL) = Home Construction (ITB) S&P 500 (SPY) SKYLINE | FOLSOM, CA
Slide 16: Stock Repurchase / Dividend Summary
STOCK REPURCHASE / DIVIDEND SUMMARY 1,400 1,200 1,000 80 60 40 20 2020 2021 2022 2023 2024 ™Cash Flow from Operations m™ Share Repurchases m Dividends __™ Debt Retirement Dollars ($MM) 38 3 38 8 ° REGENCY AT KIMBERTON GLEN | PHOENIXVILLE, PA
Slide 17: Since 2016 We Have Repurchased
SINCE 2016 WE HAVE REPURCHASED ~30% OF OUR SHARES WHICH IS 87 MILLION SHARES AT A $48 1 AVERAGE PRICE. WE HAVE ALSO PAID 7 $571 Me ied! al DIVIDENDS.
Slide 18: Consistent Profitability
CON PROFITABILITY ‘i FY 20. FY 2021 FY2022 FY2023 FY 2024 a4 2p Revenue - Homes Sales (000s) $6,937,357 $8,431,746 $9,71,170 $9,866,026 $10,563,332 i IPre-tax Income (000s) $586,901 $1,100,315 $1,703,726 $1,842,371 $2,085,640 Net Income (000s) $446,624 $833,627 $1,286,500 $1,372,071 $1,571,195, [Dil
Slide 19: Solid Land Positions Us for Growth
SOLID LAND POSITIONS US FOR GROWTH FOCUSED ON CAPITAL EFFICIENCY IN OUR OWNED PORTFOLIO PERCENTAGE OF LOTS OPTIONED VS. OWNED 80,867 De ae Bo 76,049 = OO : 70,664 a = 63,182 59,230 19 49% 38% 62% 51% 2019 2021 2022 2023 2024 mmm Optioned = + «Avg. Owned AT FYE ARDEN | GREAT FALLS,.VA
Slide 20: Total Addressable Market
TOTAL ADDRESSABLE MARK $200K HOUSEHOLD INCOME TT ANNUAL TOL HOMES 11,400 TOTAL ADDRESSABLE 575,000 MARKET 20 TOL ANNUALLY REACHES 2.0% of TAM CANYON POINT AT TRAVERSE MOUNTAIN | DRAPER, Ut
Slide 21: Debt Maturity Profile
DEBT MATURITY PROFILE AS OF OCTOBER 31, 2024 SUPERIOR ACCESS CAPITAL MARKET Cash & Equivalents $1.30 BN Senior/Corporate Credit Ratings Moody's Baas (Positive) Revolver Availability $1.77 BN Standard & Poor’s BBB- (Positive) Fitch Inc. BBB (Positive) TOTAL LIQUIDITY $3.07 BN $400M fixed at 15% throu
Slide 22: Appendix
Slide 23: Toll Brothers Financial Highlights
TOLL BROTHERS FINANCIAL HIGHLIGHTS CONTRACTS Units 10,231 8,255 8,077 = a -2% 27% 2022 2023 2024 Dollars ($MM) 9,067 2022 7,908 2023 27% 10,073 2024 Units 10,515 2022 Dollars ($MM) 97 om» | * 2022 REVENUE 10,813 9,597, a 13% 2023 2024 10,563 9,866 a 7% 2023 2024 “FY 2024 includes -$124 million, or $
Slide 24: Spec Inventory
SPEC INVENTORY Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 ISpecs: Under Construction 1,999 1,837 1,951 2,158 2,256 2,342 2,489 2,664 Completed AI6 353 474 663 778 671 745 862 [Total Specs. 2,415 2,190 2,425 2,821 3,034 3,013 3,234 3,526 Pre-Footing 812 1,248 1,258 1,574 1,345 1,
Slide 25: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION ADJUSTED GROSS MARGIN & EBITDA FY 2 FY 2 FY 2 FY 2023 FY 2024 Revenues — home sales 6,937,357 8,431,746 9,711,170 9,866,026 10,563,332 Cost of Revenues 5,534,103 6,538,454 7,237,409 7,207,279 7,753,351 Gross Margin 1,403,254 1,893,292 2,473,761 2,658,747 2,809,981 Add: Intere