Toll Brothers had another record quarter, with earnings up 27% to $28.0 million. Revenues increased 14% to $390.5 million. Signed contracts reached a record $649.9 million, up 26%, and backlog set a new high of $1.39 billion, up 29%. For the first six months, earnings grew 27% to a record $50.3 million on a 19% revenue increase to $735.0 million, with signed contracts at a record $1.04 billion. Toll Brothers continues to expand geographically and through strategic investments in land and telecommunications ventures to capitalize on growth opportunities.

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 and land sales, security, landscape, lawn
(Unaudited) April 30, 2000 Oct. 31, 1999
of luxury homes. With fiscal 1999’s record maintenance, insurance brokerage, cable T.V. Six Months Three Months
(Unaudited)
Ended April 30 Ended April 30
earnings of $102 million on record revenues of and broadband Internet delivery service, and ASSETS
$1.46 billion, the Company completed its house component assembly and 2000 1999 2000 1999 Cash and cash equivalents $ 24,325 $ 96,484
Revenues:
seventh consecutive year of record earnings, its manufacturing operations. The Company Residential inventories 1,604,473 1,443,282
Housing sales $ 708,205 $ 610,677 $ 373,985 $ 339,995
eighth consecutive year of record revenues and acquires and develops commercial properties Property, construction and office equipment 21,960 19,633
Land sales 20,517 11,492
year-end backlog, and its ninth consecutive year through its affiliate, Toll Brothers Realty Trust. Receivables, prepaid expenses and other assets 94,516 87,469
Equity earning of unconsolidated
of record signed contracts. Investments in unconsolidated entities 30,785 21,194
joint venture 3,069 3,069
Toll Brothers currently operates 145 selling
Interest and other 3,246 4,860 1,940 2,676
Toll Brothers began business in 1967 and is communities in nineteen states: Arizona, $1, 776,059 $ 1,668,062
listed on the New York Stock Exchange and the California, Connecticut, Delaware, Florida, 735,037 615,537 390,486 342,671
Pacific Exchange under the symbol “TOL”. The Illinois, Massachusetts, Maryland, Michigan, Costs and expenses: LIABILITIES AND STOCKHOLDERS’ EQUITY
Company builds customized single-family and New Jersey, Nevada, New York, North Carolina, Housing sales 545,273 477,225 287,479 266,264 Liabilities:
attached homes, principally on land it develops Ohio, Pennsylvania, Rhode Island, Tennessee, Land sales 15,648 8,609 Loans payable $ 244,270 $ 213,317
and improves, for move-up and empty-nester Texas, and Virginia. Selling, general and administrative 75,130 58,764 39,673 32,175 Subordinated notes 469,458 469,418
buyers in six regions of the country. The Interest 19,295 17,258 10,362 9,511 Customer deposits on sales contracts 108,080 82,495
Toll Brothers is the only public home builder
Company is developing country club, golf 655,346 553,247 346,123 307,950 Accounts payable 81,211 84,777
to have won all three of the industry’s highest
course communities in seven states and active- Accrued expenses 140,312 141,835
honors: America’s Best Builder from the
Income before income taxes and
adult, age-qualified communities in Michigan, Income taxes payable 66,877 59,886
National Association of Home Builders, the
extraordinary loss 79,691 62,290 44,363 34,721
New Jersey, Connecticut and Virginia. The National Housing Quality Award and Builder Total liabilities 1,110,208 1,051,728
Income taxes 29,348 22,772 16,413 12,641
Company operates its own architectural, of the Year. For more information visit our web
Income before extraordinary loss 50,343 39,518 27,950 22,080
engineering, mortgage, title, land development site at www.tollbrothers.com. Stockholders’ equity:
Extraordinary loss from extinguishment of
Common stock 364 365
debt, net of income taxes of $857 in 1999 1,461
Additional paid-in capital 105,252 105,239
$18.30 Net income $ 50,343 $ 38,057 $ 27,950 $ 22,080
$.75 Retained earnings 573,008 522,665
Treasury stock (12,773) (11,935)
Earnings per share
$15.19
Total stockholders’ equity 665,851 616,334
$.59 Basic
$12.82
Income before extraordinary loss $ 1.38 $ 1.07 $ .77 $ .60 $1,776 ,059 $1,668,062
Extraordinary loss from
$10.03
$.41
extinguishment of debt .04
$8.17
$.35
Net income $ 1.38 $ 1.03 $ .77 $ .60
$.23
Diluted Toll Brothers, Inc. Investor Relations
Income before extraordinary loss $ 1.36 $ 1.05 $ .75 $ .59 Corporate Headquarters Frederick N. Cooper – 215-938-8312
3103 Philmont Avenue Vice President - Finance
Extraordinary loss from
1996 1997 1998 1999 2000
1996 1997 1998 1999 2000 Huntingdon Valley, PA 19006 fcooper@tollbrothersinc.com
extinguishment of debt .04
Income per Share (Diluted) Book Value Per Share 215-938-8000 Joseph R. Sicree – 215-938-8045
Net income $ 1.36 $ 1.01 $ .75 $ .59
Before extraordinary item At April 30 www.tollbrothers.com Vice President - Chief Accounting Officer
Three Months Ended April 30 Weighted average number of shares NYSE – “TOL” jsicree@tollbrothersinc.com
Basic 36,434 36,840 36,396 36,717
$1,394
$650
Diluted 36,973 37,686 37,036 37,339
Statement on Forward-looking Information
$517 $1,080
Six Months Three Months Certain information included herein and in other Company reports and S.E.C. filings is forward-looking within the meaning of
$436 Ended April 30 Ended April 30 the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning anticipated operating
Housing Data
$852
results, financial resources, increases in revenues, increased profitability, interest expense, growth and expansion, ability to
$355 2000 1999 2000 1999 acquire land, Year 2000 readiness, and the effect on the Company if the Company or significant third parties are not compliant.
$644
$299
$561 Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and
Number of homes closed 1,657 1,531 858 857
cause them to differ materially from expectations expressed herein and in other Company reports and S.E.C. filings. These risks
Sales value of homes closed (in 000’s) $ 708,205 $ 610,677 $ 373,989 $ 339,995 and uncertainties include local, regional and national economic conditions, the effect of governmental regulation, the competi-
Number of homes contracted* 2,262 1,964 1,398 1,208 tive environment in which the Company operates, fluctuations in interest rates, changes in home prices, the availability and cost
of land for future growth, the availability of capital, the availability and cost of labor and materials, and weather conditions.
Sales value of homes contracted* (in 000’s) $1,041,496 $ 826,583 $ 649,918 $ 517,303
1996 1997 1998 1999 2000
1996 1997 1998 1999 2000
Number of homes in backlog* 2,957 2,516 2,957 2,516
Contracts Backlog *Contract totals for the six month and three month periods ended April 30, 2000 include $7,894,000 (30 homes) and
Sales value of homes in backlog* (in 000’s) $1,394,181 $1,080,156 $1,394,181 $1,080,156
(in millions) (in millions) $3,135,000 (12 homes), respectively, from an unconsolidated 50% owned joint venture. Backlog as of April 30, 2000 includes
Average number of selling communities 146 135 151 143
Three Months Ended April 30 At April 30 $14,855,000 (55 homes) from this joint venture.

2. Huntingdon Valley, PA 19006-4298
A Letter to our Shareholders:
S E C O N D Q UA RT E R R E P ORT
FOR THE THREE MONTHS
ENDED APRIL 30, 2000
Somerset Chateau, Northampton Hunt, PA
3103 Philmont Avenue
With the support of a strong economy, in our second venture, will activate its first two communications
quarter 2000 we continued to produce records in all networks. These networks will serve Mizner
categories: record earnings, record revenues, record Country Club and Naples Lakes Country Club, two
contracts and the highest quarter-end backlog in the of our luxury golf course communities, which,
Company’s history. We have produced over 20% when complete, will include over 1,200 homes. The
compound average annual growth in earnings and networks, based on state-of-the-art fiber optic
revenues over the past decade and six months into technology, will enable Advanced Broadband to
fiscal 2000 are well on our way to another record deliver to home owners high-quality digital cable TV
year. With a nationwide presence and diversified service, high-speed, “always-on” Internet access and
products serving move-up, empty-nester and active- a myriad of other potential services.
adult luxury home buyers, we see tremendous long
We have been making strategic investments in other
term growth potential for Toll Brothers.
Internet-related ventures. Recently, we joined ten of
Second quarter earnings, before extraordinary the largest U.S. home builders as equity participants
items, were up 27% to a record $28.0 million, or in a new Internet company, Builder Homesite, Inc.
$0.75 per share diluted, versus second quarter This company plans to launch a web site platform
1999. Second quarter revenues were up 14% to a to pursue a broad scope Internet strategy to provide
record $390.5 million. Signed contracts were up comprehensive new home listings and offer product
26% to a record $649.9 million. And our backlog sales and services related to new home purchases.
was up 29% to a record $1.39 billion. We also keep expanding our award-winning web
site, Tollbrothers.com, which has drawn 1.6 million
For the six month period, earnings, before
visitors since inception.
extraordinary items, were up 27% to a record $50.3
million or $1.36 per share diluted. Revenues were We view the luxury market as the home building
up 19% to a record $735.0 million. Signed industry’s most profitable niche; we again ranked
contracts were up 26% to a record $1.04 billion. first among home builders in this year’s Fortune
1000 for profits as a percent of revenues. Although,
In this strong market, in addition to robust home
as of this writing, our stock’s price/earnings multiple
sales, we are profiting from our lot sales program at
leads the home building industry, it is one-quarter of
two of our master planned communities. Lot sales
the average of the S&P 500. It is even lower
at South Riding in Loudoun County, VA, and Vista
compared to other successful luxury brand name
del Verde, our joint venture in Orange County, CA,
companies selling capital intensive products who
contributed significantly to this quarter’s results. We
benefit from the same tremendous demographics as
expect lot sales to continue for several years to come.
Toll Brothers.
We continue to expand geographically. This
As the market rotates toward companies offering
quarter we entered Rhode Island, our nineteenth
growth and value, we look forward to our stock
state, with our first two communities. This move,
receiving a more reasonable valuation concomitant
coupled with our expansion in the metro Hartford,
with our expansion potential and track record over
CT market, increases our presence in the affluent
the past decade.
Boston to New York corridor.
We wish to thank our shareholders, home buyers and
We now control approximately 34,500 lots in
employees for their support and confidence as we
affluent markets, a land supply that should fuel our
look forward to another record year in fiscal 2000.
growth over the coming years. Due to anti-growth
sentiment and shortages of approved land, demand
is exceeding supply in nearly all of our markets. In
this climate, our ability to acquire, gain approval for
Robert I. Toll Bruce E. Toll
and develop land parcels is a very valuable resource. Chairman of the Board Vice Chairman
and Chief Executive Officer of the Board
We are using our land development and construc-
tion expertise to capitalize on new opportunities
created by the Internet and the deregulating
telecommunications industry. This month Zvi Barzilay
Advanced Broadband, L.P, our telecommunications President and Chief Operating Officer
May 23, 2000