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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 January 31, 2022
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)
(215) 938-8000
(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 March 1, 2022, there were approximately 117,299,000 shares of Common Stock, par value $0.01 per share, outstanding.



TOLL BROTHERS, INC.
TABLE OF CONTENTS
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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 and statements regarding: the impact of the COVID-19 pandemic on the U.S. economy and on our business; expectations regarding interest rates and inflation; the markets in which we operate or may operate; our strategic objectives and priorities; our land acquisition, land development and capital allocation plans and priorities; housing market conditions; demand for our homes; anticipated operating results and guidance; home deliveries; financial resources and condition; changes in revenues, in profitability and 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; the rate at which we 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.
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. 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 ongoing effects of the COVID-19 pandemic, which remain highly uncertain, cannot be predicted and will depend upon future developments, including the duration of the pandemic, the impact of mitigation strategies taken by applicable government authorities, the continued availability and effectiveness of vaccines, adequate testing and therapeutic treatments and the prevalence of widespread immunity to COVID-19;
•the effect of general economic conditions, including employment rates, housing starts, interest rate levels, 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, 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, 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.
Many of the factors mentioned above, elsewhere in this report 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 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)
January 31,
2022		October 31,
2021
 (unaudited) 
ASSETS
Cash and cash equivalents$671,365 $1,638,494 
Inventory8,584,427 7,915,884 
Property, construction, and office equipment, net315,098 310,455 
Receivables, prepaid expenses, and other assets (1)
743,368 738,078 
Mortgage loans held for sale, at fair value137,210 247,211 
Customer deposits held in escrow106,884 88,627 
Investments in unconsolidated entities679,643 599,101 
Income taxes receivable45,884 — 
 $11,283,879 $11,537,850 
LIABILITIES AND EQUITY
Liabilities
Loans payable$1,143,248 $1,011,534 
Senior notes1,994,544 2,403,989 
Mortgage company loan facility101,615 147,512 
Customer deposits732,254 636,379 
Accounts payable557,272 562,466 
Accrued expenses1,236,425 1,220,235 
Income taxes payable217,071 215,280 
Total liabilities5,982,429 6,197,395 
Equity
Stockholders’ equity
Preferred stock, none issued— — 
Common stock, 127,937 shares issued at January 31, 2022 and October 31, 20211,279 1,279 
Additional paid-in capital711,558 714,453 
Retained earnings5,100,841 4,969,839 
Treasury stock, at cost — 10,426 and 7,820 shares at January 31, 2022 and October 31, 2021, respectively(563,618)(391,656)
Accumulated other comprehensive income ("AOCI")5,811 1,109 
Total stockholders’ equity5,255,871 5,295,024 
Noncontrolling interest45,579 45,431 
Total equity5,301,450 5,340,455 
 $11,283,879 $11,537,850 
(1)    As of January 31, 2022 and October 31, 2021, receivables, prepaid expenses, and other assets include $91.8 million and $90.8 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 January 31,
 20222021
Revenues:
Home sales$1,687,352 $1,410,704 
Land sales and other103,729 152,672 
1,791,081 1,563,376 
Cost of revenues:
Home sales1,289,527 1,121,793 
Land sales and other99,617 111,734 
1,389,144 1,233,527 
Selling, general and administrative226,870 210,739 
Income from operations175,067 119,110 
Other:
Income from unconsolidated entities22,037 1,194 
Other income – net3,712 7,101 
Income before income taxes200,816 127,405 
Income tax provision48,912 30,906 
Net income$151,904 $96,499 
Other comprehensive income, net of tax4,702 713 
Total comprehensive income$156,606 $97,212 
Per share:
Basic earnings$1.26 $0.77 
Diluted earnings$1.24 $0.76 
Weighted-average number of shares:
Basic120,996 126,060 
Diluted122,858 127,562 








See accompanying notes.
3

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


For the three months ended January 31, 2022 and 2021:
Common
Stock		Addi-
tional
Paid-in
Capital		Retained
Earnings		Treasury
Stock		AOCINon-controlling InterestTotal
Equity
Balance, October 31, 2021$1,279 $714,453 $4,969,839 $(391,656)$1,109 $45,431 $5,340,455 
Net income151,904 151,904 
Purchase of treasury stock
(185,768)(185,768)
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances(16,510)13,806 (2,704)
Stock-based compensation
13,615 13,615 
Dividends declared
(20,902)(20,902)
Other comprehensive income4,702 4,702 
Income attributable to non-controlling interest21 21 
Capital contributions, net127 127 
Balance, January 31, 2022$1,279 $711,558 $5,100,841 $(563,618)$5,811 $45,579 $5,301,450 
Balance, October 31, 2020$1,529 $717,272 $5,164,086 $(1,000,454)$(7,198)$52,241 $4,927,476 
Cumulative effect adjustment upon adoption of ASC 326, net of tax(595)(595)
Net income96,499 96,499 
Purchase of treasury stock
(179,395)(179,395)
Exercise of stock options, stock based compensation issuances, and employee stock purchase plan issuances(21,438)17,038 (4,400)
Stock-based compensation
12,834 12,834 
Dividends declared
(14,055)(14,055)
Other comprehensive income
712 712 
Loss attributable to non-controlling interest
(21)(21)
Capital distributions, net(4,563)(4,563)
Balance, January 31, 2021$1,529 $708,668 $5,245,935 $(1,162,811)$(6,486)$47,657 $4,834,492 








See accompanying notes.
4

TOLL BROTHERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Three months ended January 31,
 20222021
Cash flow (used in) provided by operating activities:
Net income$151,904 $96,499 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization14,679 16,876 
Stock-based compensation13,615 12,834 
Income from unconsolidated entities(22,037)(1,194)
Distributions of earnings from unconsolidated entities23,502 1,080 
Deferred tax provision2,408 1,277 
Inventory impairments and write-offs2,233 1,267 
Gain on sale of assets— (38,279)
Other2,372 3,617 
Changes in operating assets and liabilities: 
Inventory(565,482)(274,327)
Origination of mortgage loans(412,955)(376,036)
Sale of mortgage loans520,370 478,982 
Receivables, prepaid expenses, and other assets(6,557)34,733 
Current income taxes, net(48,074)(3,421)
Customer deposits – net77,618 60,580 
Accounts payable and accrued expenses(34,294)40,835 
Net cash (used in) provided by operating activities(280,698)55,323 
Cash flow used in investing activities:
Purchase of property, construction, and office equipment – net(18,475)(14,496)
Investments in unconsolidated entities(109,866)(112,828)
Return of investments in unconsolidated entities65,792 37,853 
Proceeds from the sale of assets— 79,356 
Other194 334 
Net cash used in investing activities(62,355)(9,781)
Cash flow used in financing activities:
Proceeds from loans payable766,858 597,973 
Principal payments of loans payable(822,142)(847,415)
Redemption of senior notes(409,856)(10,020)
Payments for stock-based benefit plans, net(2,701)(4,397)
Purchase of treasury stock(128,069)(179,395)
Dividends paid(21,077)(14,285)
Payments related to noncontrolling interest, net(61)(4,728)
Net cash used in financing activities(617,048)(462,267)
Net decrease in cash, cash equivalents, and restricted cash(960,101)(416,725)
Cash, cash equivalents, and restricted cash, beginning of period1,684,412 1,396,604 
Cash, cash equivalents, and restricted cash, end of period$724,311 $979,879 





See accompanying notes.
5

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, 2021 balance sheet amounts and disclosures have been derived from our October 31, 2021 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, 2021 (“2021 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 January 31, 2022; the results of our operations and changes in equity for the three-month periods ended January 31, 2022 and 2021; and our cash flows for the three-month periods ended January 31, 2022 and 2021. 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. In times of economic disruption when uncertainty regarding future economic conditions is heightened, these estimates and assumptions are subject to greater variability. We are subject to risks and uncertainties, including risks and uncertainties resulting from the COVID-19 pandemic, and are likely to continue to impact our business operations. As a result, 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 January 31, 2022, 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 $732.3 million and $636.4 million at January 31, 2022 and October 31, 2021, respectively. Of the outstanding customer deposits held as of October 31, 2021, we recognized $110.9 million in home sales revenues during the three months ended January 31, 2022.
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) bulk sales to third parties of land we have decided no longer meets our development criteria; (3) lot sales to third-party builders within our master planned communities; and (4) sales of commercial and retail properties generally located at our City Living buildings. 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.
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
6

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 March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848),” as amended by ASU 2021-01 in January 2021, directly addressing the effects of reference rate reform on financial reporting as a result of the cessation of the publication of certain LIBOR rates beginning December 31, 2021, with complete elimination of the publication of the LIBOR rates by June 30, 2023. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform by virtue of referencing LIBOR or another reference rate expected to be discontinued. This guidance became effective on March 12, 2020 and can be adopted no later than December 31, 2022, with early adoption permitted. We are currently evaluating the impact, but do not expect that the adoption of ASU 2020-04, as amended by ASU 2021-01, will have a material impact on our consolidated financial statements or disclosures.

Reclassification
Certain prior period amounts have been reclassified to conform to the fiscal 2022 presentation.
2. Inventory
Inventory at January 31, 2022 and October 31, 2021 consisted of the following (amounts in thousands):
January 31,
2022		October 31,
2021
Land controlled for future communities$227,659 $185,656 
Land owned for future communities841,231 564,737 
Operating communities7,515,537 7,165,491 
$8,584,427 $7,915,884 
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, for the periods indicated, are shown in the table below (amounts in thousands):
 Three months ended January 31,
 20222021
Land controlled for future communities$793 $167 
Land owned for future communities1,440 — 
Operating communities— 1,100 
$2,233 $1,267 
See Note 13, “Commitments and Contingencies,” for information regarding land purchase commitments.
At January 31, 2022, 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 January 31, 2022, we determined that 298 land purchase contracts, with an aggregate purchase price of $3.96 billion, on which we had made aggregate deposits totaling $360.1 million, were VIEs, and that we were not the primary beneficiary of any VIE related to our land purchase contracts. At October 31, 2021, we determined that 289 land purchase contracts, with an aggregate purchase price of $3.67 billion, on which we had made aggregate deposits totaling $302.4 million, were VIEs and that we were not the primary beneficiary of any VIE related to our land purchase contracts.
7

Interest incurred, capitalized, and expensed, for the periods indicated, was as follows (amounts in thousands):
 Three months ended January 31,
 20222021
Interest capitalized, beginning of period$253,938 $297,975 
Interest incurred31,005 41,268 
Interest expensed to home sales cost of revenues(32,437)(33,325)
Interest expensed to land sales and other cost of revenues(3,409)(1,838)
Interest capitalized on investments in unconsolidated entities(1,290)(1,134)
Previously capitalized interest on investments in unconsolidated entities transferred to inventory135 15 
Interest capitalized, end of period$247,942 $302,961 
During the three months ended January 31, 2022, we incurred approximately $274,000 of interest related to our interest rate swaps which is included in accumulated other comprehensive income, and approximately $76,000 was reclassified out of accumulated other comprehensive income to home sales cost of revenues. During the three months ended January 31, 2021, we incurred approximately $154,000 of interest related to our interest rate swaps which is included in accumulated other comprehensive income, and approximately $10,000 was reclassified out of accumulated other comprehensive income to home sales cost of revenues.
3. Investments in Unconsolidated Entities
We have investments in various unconsolidated entities and our ownership interest in these investments ranges from 5.0% to 50%. These entities, which are structured as joint ventures and either: (i) develop land for the joint venture participants and for sale to outside builders (“Land Development Joint Ventures”); (ii) develop for-sale homes (“Home Building Joint Ventures”); (iii) develop luxury for-rent residential apartments, commercial space, and a hotel (“Rental Property Joint Ventures”); or (iv) provide financing and land banking to residential builders and developers for the acquisition and development of land and home sites (“Gibraltar Joint Ventures”).
The table below provides information as of January 31, 2022, regarding active joint ventures that we are invested in, by joint venture category ($ amounts in thousands):
 Land
Development
Joint Ventures		Home Building
Joint Ventures		Rental Property
Joint Ventures		Gibraltar
Joint Ventures		Total
Number of unconsolidated entities
14235455
Investment in unconsolidated entities (1)
$288,426 $8,630 $361,483 $21,104 $679,643 
Number of unconsolidated entities with funding commitments by the Company
11—141 26
Company’s remaining funding commitment to unconsolidated entities (2)
$108,611 $— $54,383 $25,147 $188,141 
(1) Our total investment includes $92.5 million related to 12 unconsolidated joint venture-related variable interests in VIEs and our maximum exposure to losses related to these VIEs is approximately $210.5 million as of January 31, 2022. Our ownership interest in such unconsolidated Joint Venture VIEs ranges from 20% to 50%.
(2) Our remaining funding commitment includes approximately $115.5 million related to our unconsolidated joint venture-related variable interests in VIEs.
Certain joint ventures in which we have investments obtained debt financing to finance a portion of their activities. The table below provides information at January 31, 2022, regarding the debt financing obtained by category ($ amounts in thousands):
 Land
Development
Joint Ventures		Rental Property
Joint Ventures		Total
Number of joint ventures with debt financing
82634
Aggregate loan commitments$507,427 $2,308,554 $2,815,981 
Amounts borrowed under loan commitments
$376,534 $1,391,668 $1,768,202 
More specific and/or recent information regarding our investments in, advances to, and future commitments to these entities is provided below.
8

New Joint Ventures
The table below provides information on joint ventures entered into during the three-months ended January 31, 2022 ($ amounts in thousands):
Land Development Joint VenturesRental Property Joint VenturesGibraltar Joint Ventures
Number of unconsolidated joint ventures entered into during the period241 
Investment balance at January 31, 2022$13,557 $47,569 1,641 
In addition, in the first quarter of fiscal 2022, we entered into a joint venture with an unrelated party to develop a luxury for-rent residential apartment project in Washington, D.C. on land which we contributed to the venture. The land we contributed has a carrying value of $60.1 million and remains on our balance sheet under “Receivables, prepaid expenses, and other assets”. Under the terms of the joint venture agreement, our partner has the right to put their interest back to us if certain conditions are not satisfied. If those conditions are satisfied, we would expect to deconsolidate this land and recognize a land sale at that time.
The table below provides information on joint ventures entered into during the three-months ended January 31, 2021 ($ amounts in thousands):
Land Development Joint VenturesRental Property Joint Ventures
Number of unconsolidated joint ventures entered into during the period3 2 
Investment balance at January 31, 2021$139,033 $14,932 

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 partner. In connection with these sales, we recognized gains of $21.0 million and $5.9 million in the three-month periods ended January 31, 2022 and 2021, respectively. These gains are included in “Income from unconsolidated entities” in our Condensed Consolidated Statements of Operations and Comprehensive Income.
In our first quarter of fiscal 2021, we recognized other-than-temporary impairment charges on our investments in certain Home Building Joint Ventures of $2.1 million. There were no other-than-temporary impairment charges recognized in our first quarter of fiscal 2022.
In our first quarters of fiscal 2022 and 2021, we purchased land from unconsolidated entities, principally related to our acquisition of lots from our Land Development Joint Ventures, totaling $23.8 million and $4.3 million, respectively. Our share of income from the lots we acquired was insignificant in each period. We sold land to unconsolidated entities, which principally involved land sales to our Rental Property Joint Ventures, totaling $78.0 million and $57.3 million in our first quarters of fiscal 2022 and 2021, respectively. These amounts are 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.
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 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.
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 January 31, 2022, 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.
9

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):
January 31, 2022
Loan commitments in the aggregate$2,307,200 
Our maximum estimated exposure under repayment and carry cost guarantees if the full amount of the debt obligations were borrowed (1)
$407,700 
Debt obligations borrowed in the aggregate$1,259,500 
Our maximum estimated exposure under repayment and carry cost guarantees of the debt obligations borrowed$237,200 
Estimated fair value of guarantees provided by us related to debt and other obligations$10,900 
Terms of guarantees
1 month - 3.9 years
(1) Our maximum estimated exposure under repayment and carry cost guarantees includes approximately $95.0 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. We have not made payments under any of the outstanding guarantees, nor have we been called upon to do so.
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 January 31, 2022 and October 31, 2021, regarding our consolidated joint venture-related variable interests in VIEs ($ amounts in thousands):
Balance Sheet ClassificationJanuary 31,
2022		October 31,
2021
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$91,800 $90,800 
Our partners’ interests in consolidated VIEsNoncontrolling interest$39,500 $39,400 
Our ownership interest in the above consolidated Joint Venture VIEs ranges from 50% to 98%. We are actively looking for additional partners for these investments and to the extent we are able to find such partners, we will reduce our ownership interest in these entities.
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 VIEs’ 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 members. 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 members.
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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:
 January 31,
2022		October 31,
2021
Cash and cash equivalents$167,968 $153,582 
Inventory1,060,893 964,962 
Loans receivable, net61,539 86,727 
Rental properties1,454,564 1,496,355 
Rental properties under development914,785 697,659 
Other assets272,758 227,579 
Total assets$3,932,507 $3,626,864 
Debt, net of deferred financing costs$1,764,604 $1,677,619 
Other liabilities264,246 248,545 
Members’ equity1,903,657 1,700,700 
Total liabilities and equity$3,932,507 $3,626,864 
Company’s net investment in unconsolidated entities (1)
$679,643 $599,101 
(1)    Our underlying equity in the net assets of the unconsolidated entities exceeded our net investment in unconsolidated entities by $21.2 million and $16.5 million as of January 31, 2022 and October 31, 2021, respectively, and these differences are primarily a result of other than temporary impairments we have recognized; interest capitalized on our investments; the estimated fair value of the guarantees provided to the joint ventures; unrealized gains on our retained joint venture interests; gains recognized from the sale of our ownership interests; and distributions from entities in excess of the carrying amount of our net investment.
Condensed Combined Statements of Operations:
 Three months ended January 31,
 20222021
Revenues$155,752 $92,530 
Cost of revenues108,483 96,723 
Other expenses43,603 35,390 
Total expenses152,086 132,113 
Income (loss) from operations3,553 (39,583)
Other income (2)
33,347 948 
Income (loss) before income taxes36,900 (38,635)
Income tax expense (benefit)83 (1,506)
Net income (loss) including earnings from noncontrolling interests36,817 (37,129)
Less: income attributable to noncontrolling interest— (174)
Net income (loss) attributable to controlling interest$36,817 $(37,303)
Company’s equity in earnings of unconsolidated entities (3)
$22,037 $1,194 
(2)    The three months ending January 31, 2022 includes $29.9 million related to the sale of an asset by one Rental Property Joint Venture.
(3)    Differences between our equity in earnings of unconsolidated entities and the underlying net income (loss) of the entities are primarily 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; and our share of the entities’ profits related to home sites purchased by us which reduces our cost basis of the home sites acquired.
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4. Receivables, Prepaid Expenses, and Other Assets
Receivables, prepaid expenses, and other assets at January 31, 2022 and October 31, 2021, consisted of the following (amounts in thousands):
January 31, 2022October 31, 2021
Expected recoveries from insurance carriers and others$15,126 $16,773 
Improvement cost receivable68,532 67,626 
Escrow cash held by our wholly owned title company51,683 41,429 
Properties held for rental apartment and commercial development348,624 381,401 
Prepaid expenses38,574 34,960 
Right-of-use asset98,923 96,276 
Other121,906 99,613 
 $743,368 $738,078 
See Note 6, “Accrued Expenses,” for additional information regarding the expected recoveries from insurance carriers and others.
As of January 31, 2022 and October 31, 2021, properties held for rental apartment and commercial development include $91.8 million and $90.8 million, respectively, of assets related to consolidated VIEs. See Note 3, “Investments in Unconsolidated Entities” for additional information regarding VIEs.
5. Loans Payable, Senior Notes, and Mortgage Company Loan Facility
Loans Payable
At January 31, 2022 and October 31, 2021, loans payable consisted of the following (amounts in thousands):
January 31,
2022		October 31,
2021
Senior unsecured term loan$650,000 $650,000 
Loans payable – other495,624 364,042 
Deferred issuance costs(2,376)(2,508)
$1,143,248 $1,011,534 
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, most of which is scheduled to expire on November 1, 2026. In the first quarter of fiscal 2021, we voluntarily repaid $150.0 million of the then $800.0 million in principal amount that was outstanding. No prepayment charges were incurred in connection with the repayment. On October 31, 2021, we entered into term loan extension agreements to extend the maturity date of $548.4 million of outstanding term loans from November 1, 2025 to November 1, 2026, with the remainder of the term loans remaining due November 1, 2025. Other than $101.6 million of term loans that are scheduled to mature on November 1, 2025, there are no payments required before the final maturity date on the Term Loan Facility. At January 31, 2022, the interest rate on the Term Loan Facility was 1.16% per annum. We and substantially all of our 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 through October 2025. 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, which was 1.05% as of January 31, 2022. These interest rate swaps were designated as cash flow hedges.
Revolving Credit Facility
We have a $1.905 billion, senior unsecured revolving credit facility (the “Revolving Credit Facility”) with a syndicate of banks. On October 31, 2021, we entered into extension letter agreements which extended the maturity date of $1.78 billion of the revolving loans and commitments under the Revolving Credit Facility from November 1, 2025 to November 1, 2026, with the remainder of the revolving loans and commitments continuing to terminate on November 1, 2025. We and substantially all of our 100%-owned home building subsidiaries are guarantors under the Revolving Credit Facility.
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Under the terms of the Revolving Credit Facility, at January 31, 2022, our maximum leverage ratio, as defined, may not exceed 1.75 to 1.00, and we are required to maintain a minimum tangible net worth, as defined, of no less than approximately $2.09 billion. Under the terms of the Revolving Credit Facility, at January 31, 2022, our leverage ratio was approximately 0.44 to 1.00, and our tangible net worth was approximately $5.25 billion. Based upon the terms of the Revolving Credit Facility, our ability to repurchase our common stock was limited to approximately $4.26 billion as of January 31, 2022. In addition, under the provisions of the Revolving Credit Facility, our ability to pay cash dividends was limited to approximately $3.16 billion as of January 31, 2022.
At January 31, 2022, we had no outstanding borrowings under the Revolving Credit Facility and had approximately $92.9 million of outstanding letters of credit that were issued under the Revolving Credit Facility. At January 31, 2022, the interest rate on outstanding borrowings under the Revolving Credit Facility would have been 1.31% per annum. In February 2022, we borrowed $200.0 million under our Revolving Credit Facility.
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 January 31, 2022, the weighted-average interest rate on “Loans payable – other” was 3.80% per annum.
Senior Notes
At January 31, 2022, we had five issues of senior notes outstanding with an aggregate principal amount of $2.00 billion.
In our first quarter of fiscal 2022, we redeemed the remaining $409.9 million principal amount of 5.875% Senior Notes due February 15, 2022, at par, plus accrued interest.
Mortgage Company Loan Facility
Toll Brothers Mortgage Company (“TBI Mortgage”), our wholly owned mortgage subsidiary, has a mortgage warehousing agreement (the “Warehousing Agreement”) with a bank, which has been amended from time to time, to finance the origination of mortgage loans by TBI Mortgage. The Warehousing Agreement is accounted for as a secured borrowing under ASC 860, “Transfers and Servicing.” The Warehousing Agreement provides for loan purchases up to $75.0 million, subject to certain sublimits. In addition, the Warehousing Agreement provides for an accordion feature under which TBI Mortgage may 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. Prior to its scheduled expiration on March 4, 2021, the Warehousing Agreement was amended and restated to extend the expiration date to March 3, 2022 and to reduce the interest rate thereunder to LIBOR plus 1.75% per annum (with a LIBOR floor of 0.75%). Prior to the extension, borrowings under the facility bore interest at LIBOR plus 1.90% per annum. At January 31, 2022, the interest rate on the Warehousing Agreement, as amended, was 2.50% per annum. Subsequent to January 31, 2022, the Warehousing Agreement was further extended to April 2, 2022.
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6. Accrued Expenses
Accrued expenses at January 31, 2022 and October 31, 2021 consisted of the following (amounts in thousands):
January 31,
2022		October 31,
2021
Land, land development, and construction$298,390 $310,996 
Compensation and employee benefits176,256 232,161 
Escrow liability46,159 36,107 
Self-insurance239,194 236,369 
Warranty143,043 145,062 
Lease liabilities119,851 116,248 
Deferred income38,515 36,638 
Interest35,762 34,033 
Commitments to unconsolidated entities29,969 22,150 
Treasury share purchases57,699 — 
Other51,587 50,471 
$1,236,425 $1,220,235 
The table below provides, for the periods indicated, a reconciliation of the changes in our warranty accrual (amounts in thousands):
 Three months ended January 31,
 20222021
Balance, beginning of period$145,062 $157,351 
Additions – homes closed during the period9,455 7,402 
Increase in accruals for homes closed in prior years, net2,957 1,194 
Charges incurred(14,431)(15,070)
Balance, end of period$143,043 $150,877 
Since fiscal 2014, we have received water intrusion claims from owners of homes built since 2002 in communities located in Pennsylvania and Delaware. 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.
From October 31, 2016 through the second quarter of fiscal 2020, our recorded aggregate estimated repair costs to be incurred for known and unknown water intrusion claims were $324.4 million and our recorded aggregate expected recoveries from insurance carriers and suppliers were approximately $152.6 million. Based on trends in claims experience over several years and lower than anticipated repair costs, in the second fiscal quarter of 2020 and again in the fourth fiscal quarter of 2021, we reduced the aggregate estimated repair costs to be incurred for known and unknown water intrusion claims by a total of $36.2 million. Because this reduction was associated with periods in which we expect our insurance deductibles and self-insured retentions to be exhausted, we reduced our aggregate expected recoveries from insurance carriers and suppliers by a corresponding $36.2 million. Our recorded remaining estimated repair costs, which reflects a reduction for the aggregate amount expended to resolve claims, were approximately $53.2 million at January 31, 2022 and $54.7 million at October 31, 2021. Our recorded remaining expected recoveries from insurance carriers and suppliers were approximately $4.6 million at January 31, 2022 and $5.8 million at October 31, 2021.
As noted above, 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 and such differences could be material. In addition, due to such uncertainty, we are unable to estimate the range of any such differences.
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7. Income Taxes
We recorded income tax provisions of $48.9 million and $30.9 million for the three months ended January 31, 2022 and 2021, respectively. The effective tax rate was 24.4% for the three months ended January 31, 2022, compared to 24.3% for the three months ended January 31, 2021. 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.
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 2022 will be approximately 5.2%. Our state income tax rate for the full fiscal year 2021 was 5.8%.
At January 31, 2022, we had $5.9 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 stock options and various types of restricted stock units to our employees and our non-employee directors. 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 January 31,
20222021
Total stock-based compensation expense recognized$13,615 $12,834 
Income tax benefit recognized$3,413 $3,289 
At January 31, 2022 and October 31, 2021, the aggregate unamortized value of unvested stock-based compensation awards was approximately $24.4 million and $14.7 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. Most recently, on March 10, 2020, our Board of Directors renewed its authorization to repurchase of 20 million shares of our common stock. 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 January 31,
 20222021
Number of shares purchased (in thousands)3,013 4,027 
Average price per share$61.65 $44.54 
Remaining authorization at January 31 (in thousands)9,550 15,957 
Cash Dividends
During the three months ended January 31, 2022 and 2021, we declared and paid cash dividends of $0.17 and $0.11 per share, respectively, to our shareholders.
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Accumulated Other Comprehensive Income (Loss)
The changes in each component of accumulated other comprehensive income (loss) (“AOCI”), for the periods indicated, were as follows (amounts in thousands):
Three months ended January 31,
20222021
Employee Retirement Plans
Beginning balance$(6,024)$(7,198)
Gains reclassified from AOCI to net income (1)
451 450 
Less: Tax expense (2)
(113)(116)
Net gains reclassified from AOCI to net income338 334 
Other comprehensive income, net of tax338 334 
Ending balance$(5,686)$(6,864)
Derivative Instruments
Beginning balance$7,133 $— 
Gains on derivative instruments5,748 498 
Less: Tax expense(1,441)(128)
Net gains on derivative instruments4,307 370 
Gains reclassified from AOCI to net income (3)
76 10 
Less: Tax expense (2)
(19)(2)
Net gains reclassified from AOCI to net income57 8 
Other comprehensive income, net of tax4,364 378 
Ending balance$11,497 $378 
Total AOCI ending balance$5,811 $(6,486)
(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 January 31,
 20222021
Numerator:
Net income as reported$151,904 $96,499 
Denominator:
Basic weighted-average shares120,996 126,060 
Common stock equivalents (1)
1,862 1,502 
Diluted weighted-average shares122,858 127,562 
Other information:
Weighted-average number of antidilutive options and restricted stock units (2)
204 589 
Shares issued under stock incentive and employee stock purchase plans408 456 
(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		January 31,
2022		October 31, 2021
Residential Mortgage Loans Held for SaleLevel 2$137,210 $247,211 
Forward Loan Commitments — Residential Mortgage Loans Held for SaleLevel 2$1,948 $1,782 
Interest Rate Lock Commitments (“IRLCs”)Level 2$(6,509)$(1,773)
Forward Loan Commitments — IRLCsLevel 2$6,509 $1,773 
Interest Rate Swap ContractsLevel 2$16,351 $10,330 
At January 31, 2022 and October 31, 2021, the carrying value of cash and cash equivalents 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 January 31, 2022, 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 valueExcess
At January 31, 2022$137,051 $137,210 $159 
At October 31, 2021$244,467