1. Corporate Profile Consolidated Condensed Statements of Income Consolidated Condensed Balance Sheets
(Amounts in thousands, except per share data) (Amounts in thousands)
Toll Brothers, Inc. is the nation’s leading builder mortgage, title, land sales, security, landscape,
(Unaudited)
of luxury homes. With fiscal 1999’s record lawn maintenance, insurance brokerage, cable
earnings of $102 million on record revenues of T.V. and broadband Internet delivery service, Three Months Jan. 31, 2000 Oct. 31, 1999
$1.46 billion, the Company completed its and house component assembly and Ended January 31 ASSETS (Unaudited)
seventh consecutive year of record earnings, its manufacturing operations. The Company 2000 1999 Cash and cash equivalents $ 35,301 $ 96,484
Revenues:
eighth consecutive year of record revenues and acquires and develops commercial properties Residential inventories 1,556,919 1,443,282
Housing sales $ 334,220 $270,682
year-end backlog, and its ninth consecutive year through its affiliate, Toll Brothers Realty Trust. Property, construction and office equipment 21,021 19,633
Land sales 9,025
of record signed contracts. Toll Brothers currently operates 145 selling Receivables, prepaid expenses and other assets 92,631 87,469
Interest and other 1,306 2,184
Toll Brothers began business in 1967 and is communities in nineteen states: Arizona, 344,551 272,866 Investments in unconsolidated entities 24,136 21,194
listed on the New York Stock Exchange and the California, Connecticut, Delaware, Florida, Costs and expenses: $1,730,008 $ 1,668,062
Pacific Exchange under the symbol “TOL”. The Illinois, Massachusetts, Maryland, Michigan, Housing sales 257,794 210,961
Company builds customized single-family and New Jersey, Nevada, New York, North Carolina, Land sales 7,039 LIABILITIES AND STOCKHOLDERS’ EQUITY
attached homes, principally on land it develops Ohio, Pennsylvania, Rhode Island, Tennessee, Selling, general and administrative 35,457 26,589 Liabilities:
and improves, for move-up and empty-nester Texas, and Virginia. Interest 8,933 7,747 Loans payable $ 272,469 $ 213,317
buyers in six regions of the country. The Toll Brothers is the only public home builder Subordinated notes 469,438 469,418
Company is developing country club, golf 309,223 245,297
to have won all three of the industry’s highest Customer deposits on sales contracts 86,301 82,495
course communities in seven states and has honors: America’s Best Builder from the Accounts payable 71,284 84,777
Income before income taxes and extraordinary loss 35,328 27,569
recently entered the active-adult, age-qualified National Association of Home Builders, the Accrued expenses 139,517 141,835
market with its first communities in Michigan, Income taxes 12,935 10,131
National Housing Quality Award and Builder Income taxes payable 51,899 59,886
New Jersey and Connecticut. The Company of the Year. For more information visit Income before extraordinary loss 22,393 17,438
operates its own architectural, engineering, Total liabilities 1,090,908 1,051,728
www.tollbrothers.com. Extraordinary loss from extinguishment of debt,
net of income taxes of $857 in 1999 (1,461) Stockholders’ equity:
$.61 $17.53 Net income $ 22,393 $ 15,977 Common stock 365 365
Additional paid-in capital 105,366 105,239
$14.69 Earnings per share Retained earnings 545,058 522,665
$.44 $.46 Basic Treasury stock (11,689) (11,935)
$12.42
$.39 Income before extraordinary loss $ .61 $ .47 Total stockholders’ equity 639,100 616,334
$9.62 Extraordinary loss from extinguishment of debt (.04) $1,730 ,008 $1,668,062
$7.93 Net income $ .61 $ .43
$.23
Diluted
Income before extraordinary loss $ .61 $ .46
Extraordinary loss from extinguishment of debt (.04)
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 Net income $ .61 $ .42
Income per Share (Diluted) Book Value Per Share Weighted average number of shares
Before extraordinary item At January 31
Three Months Ended January 31 Basic 36,471 36,963
Toll Brothers, Inc. Investor Relations
Diluted 36,909 38,033 Corporate Office Frederick N. Cooper – 215-938-8312
$392 $1,122 3103 Philmont Avenue fcooper@tollbrothersinc.com
Housing Data Huntingdon Valley, PA 19006
(Three months ended January 31) 215-938-8000 • www.tollbrothers.com Joseph R. Sicree – 215-938-8045
$309 $853 jsicree@tollbrothersinc.com
$270 2000 1999 NYSE – “TOL”
$665 Number of homes closed 799 674
$498 Sales value of homes closed (in 000’s) $ 334,216 $270,682
$174 Statement on Forward-looking Information
$148 $407 Number of homes contracted* 864 756
Certain information included herein and in other Company reports and S.E.C. filings is forward-looking within the meaning of
Sales value of homes contracted* (in 000’s) $ 391,578 $309,280 the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning anticipated operating
Number of homes in backlog* 2,431 1,974 results, financial resources, increases in revenues, increased profitability, interest expense, growth and expansion, ability to
Sales value of homes in backlog* (in 000’s) $1,121,599 $853,312 acquire land, Year 2000 readiness, and the effect on the Company if the Company or significant third parties are not compliant.
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and
Average number of selling communities 140 126 cause them to differ materially from expectations expressed herein and in other Company reports and S.E.C. filings. These risks
Contracts Backlog and uncertainties include local, regional and national economic conditions, the effect of governmental regulation, the competi-
(in millions) (in millions)
*Contract totals for the three month period ended January 31, 2000 include $4,759,000 (18 homes) from an unconsolidated tive environment in which the Company operates, fluctuations in interest rates, changes in home prices, the availability and cost
Three Months Ended January 31 At January 31 50% owned joint venture. Backlog as of January 31, 2000 includes $15,067,000 (57 homes) from this joint venture. of land for future growth, the availability of capital, the availability and cost of labor and materials, and weather conditions.

2. Huntingdon Valley, PA 19006-4298
A Letter to our Shareholders:
F I R S T Q UA RT E R R E P ORT
FOR THE THREE MONTHS
ENDED JANUARY 31, 2000
Inverness Georgian, Bucks County, Pennsylvania
3103 Philmont Avenue
With record first quarter results, we have started To capitalize on these tremendously favorable
fiscal 2000 at the same record pace with which we demographics, we continue to broaden our
ended fiscal 1999; we believe we are on our way to offerings in the luxury market. We are now selling
another record year. For first quarter 2000: homes from six master planned, golf course
s
communities and have three more in the pipeline.
Record earnings, before extraordinary items,
Combined these communities total over 8,000 lots.
were $22.4 million ($0.61 per share diluted),
We also have seven age-qualified communities,
up 28% versus 1999’s first quarter. Our
three of which are now open, and four of which are
earnings have grown at a 23% compound
in the pipeline, which total nearly 4,000 lots.
annual rate over the past ten years.
s Record revenues were $344.6 million, up 26% This quarter we joined with Marriott Senior Living
versus 1999, as we delivered 799 homes Services, a division of Marriott International Corp.,
generating revenues of $334.2 million and to develop our first assisted living community, to be
produced land sales revenues of $9.0 million. located adjacent to one of our larger move-up
Our revenues have grown at a 23% home communities in Reston, Fairfax County,
compound annual rate over the past ten years. Virginia. In addition to providing assisted living
services for residents, the community will offer care
s Record contracts were $391.6 million (864
for people with Alzheimer’s disease. We will look
homes), up 27% versus 1999. This was our for additional opportunities to offer similar
36th consecutive quarterly year-over-year communities in our current markets.
record for new signed contracts. Our contracts
have grown at a 25% compound annual rate As the world focuses on the benefits of the Internet,
over the past ten years. Toll Brothers is doing the same. Our award-
s Record backlog was $1.122 billion (2,431
winning Internet site, www.tollbrothers.com, now
homes), the highest quarter-end backlog in hosts approximately 7,500 visitors daily who
the Company’s history, up 31% versus 1999. spend, on average, almost 17 minutes per visit.
Our backlog has grown at a 28% compound Through our newest subsidiary, Advanced
annual rate over the past ten years. Broadband Communications, we are starting to
bring high-speed Internet and cable T.V. access to
Our first quarter margin improvements were due, our home buyers using broadband fiber optic
in part, to the positive impact of 1999’s price networks. To date, Advanced Broadband has over
increases. Throughout the quarter we continued to 6,000 home and apartment sites under contract via
raise prices in many of our markets to take Toll Brothers, Inc. and Toll Brothers Realty Trust.
advantage of strong demand. By raising prices we
hope to both maximize profits and slow demand We believe our strong track record of profitable
to keep our backlog from extending out too many growth and strategic expansion across geographic
months. We believe these price increases have regions and product lines provides us with a solid
started to achieve their intended effect, as we have platform from which to continue to grow our
seen some modest slowing in deposits in the past business well into the future. We thank our
few weeks. shareholders for their patience, our home owners
for their custom, and our employees for their
Over the past three, five, seven and ten years, our extraordinary efforts and accomplishments.
earnings per share have increased at more than
double the rate of the S&P 500. Based on these
results and our current prospects, the divergence
between our performance and our stock price is Robert I. Toll Bruce E. Toll
particularly frustrating. Wall Street seems to believe Chairman of the Board Vice Chairman
we are standing at the precipice, staring into the and Chief Executive Officer of the Board
abyss of a lengthy, severe recession. We disagree:
Employment is strong, consumer confidence is
high and demand from increasing numbers of
affluent move-up and empty nester households Zvi Barzilay
continues to fuel our growth. President and Chief Operating Officer
February 28, 2000