Toll Brothers reported record earnings, revenues, contracts, and backlog for the second quarter of 2002. Earnings per share increased 19% compared to the second quarter of 2001. Strong demand, limited lot supplies, and growing buyer demand are expected to continue driving the company's prosperity in the coming years. Toll Brothers is well positioned with nearly $2 billion in backlog, $115 million in cash, and $485 million available under credit lines to continue expanding and benefiting from the growing luxury home market.

1. Huntingdon Valley, PA 19006-4298
A LETTER TO OUR SHAREHOLDERS:
S E C O N D Q U A RT E R R E P O RT
FOR THE THREE MONTHS
ENDED APRIL 30, 2002
2nd Quarter Report
3103 Philmont Avenue
We are very proud to report record earnings, Supported by strong demographics, home
revenues, contracts and backlog for the second ownership has yielded consistent long-term
quarter and six-month periods ended April 30, appreciation in value, as well as favorable tax
2002. Record second quarter earnings benefits from the mortgage deduction and the
increased 19% to $0.69 per share diluted versus treatment of capital gains upon sale.
second quarter 2001, raising six-month record
The demographics for the luxury market are
earnings to $1.29 per share diluted, an 18%
even more compelling. The number of affluent
increase over fiscal 2001. Record second
households – those earning $100,000 or more –
quarter revenues of $550.5 million increased
has increased 74% in the past decade. Toll
7% versus 2001 and record six month revenues
Brothers is the only major home builder
increased 5% to $1.04 billion.
primarily focused on the luxury market. With
Second quarter contracts of $902.3 million nearly 40,000 home sites under our control and
(1,706 homes), the highest quarter in the strong demographics supporting our luxury
Company’s history, were up 30% from last year move-up, empty-nester, active-adult and second-
and record six-month contracts rose 21% to home product lines, we are well-prepared to
$1.39 billion (2,634 homes). Our record flourish in this lot-constrained environment.
second quarter backlog of $1.77 billion (3,271
We continue to plan for future expansion. We
homes), also the highest in Company history,
ended this quarter with $115 million in cash
increased 10% versus second quarter 2001.
and $485 million unused and available under
Our record performance augurs well for the our bank credit lines. By quarter-end,
coming fiscal year. Because our backlog is so stockholders’ equity grew to over $1 billion, up
deep, most of the contracts signed this second 22% from one year ago. To enable us to raise
quarter are for homes to be delivered in the first capital quickly and opportunistically in the
half of fiscal 2003. Based on our expected pace public markets, we filed a new $750 million
of new community openings, we see record universal shelf registration. With our strong
results in each of the next two years: if demand capital base, brand name reputation and nearly
remains at its current pace, we believe we will four decades of experience serving luxury home
deliver approximately 5,000 homes in 2003, buyers, we believe Toll Brothers is uniquely
and, as we continue to increase our community positioned to prosper from the growing demand
count, approximately 6,000 homes in 2004. for luxury homes in the United States during
this decade.
We believe limited lot supplies and growing
buyer demand are a prescription for our We thank our shareholders and customers for
continuing prosperity. Government regulations their support and our associates for their drive
have continued to extend the time and increase to excel and commitment to provide value to
The Estancia at Mira Vista, Palm Springs, CA
the capital and expertise required to secure land our investors and our customers.
approvals. These restrictions are advantaging
the large, professionally managed public home
builders in gaining market share at the expense
of smaller, less well-capitalized private builders. Robert I. Toll Bruce E. Toll
Chairman of the Board Vice Chairman
Demand is being propelled by population and and Chief Executive Officer of the Board
household growth, by immigration and by the
growing appeal of a new home as both a lifestyle
enhancement and an attractive investment
Zvi Barzilay
alternative to the financial markets. Since 1990,
President and Chief Operating Officer
U.S. households have grown by over 12 million
and population has risen by 33 million. May 29, 2002

2. CONSOLIDATED CONDENSED
CORPORATE PROFILE
FIVE-YEAR PERFORMANCE OVERVIEW
STATEMENTS OF INCOME
Toll Brothers, Inc. is the nation’s leading builder of Arizona, California, Colorado, Connecticut, Delaware,
(Amounts in thousands, except per share data)
luxury homes. The Company has produced over Florida, Illinois, Massachusetts, Maryland, Michigan,
$.69 $550
20% compound average annual growth in revenues Nevada, New Hampshire, New Jersey, New York, (Unaudited)
$515 Six Months Three Months
and earnings for the last one, three, five, seven and ten North Carolina, Ohio, Pennsylvania, Rhode Island, Ended April 30 Ended April 30
$.58
year periods. South Carolina, Tennessee, Texas, and Virginia.
2002 2001 2002 2001
Revenues:
Toll Brothers began business in 1967 and became a Toll Brothers is the only publicly traded national home
$390
Housing sales $1,021,813 $ 955,915 $ 539,111 $ 497,546
public company in 1986. Its common stock is listed builder to have won all three of the industry’s highest
$343
Land sales 14,041 22,417 7,618 11,510
on the New York Stock Exchange and the Pacific honors: America’s Best Builder from the National
$.38
Equity earnings from
Exchange under the symbol “TOL”. The Company Association of Home Builders, the National Housing
$250 unconsolidated joint venture 1,497 5,261 1,497 2,875
$.30
serves luxury move-up, empty-nester, active-adult, Quality Award and Builder of the Year. For more Interest and other 5,324 6,192 2,270 2,593
and second-home buyers and operates in 22 states: information visit www.tollbrothers.com. 1,042,675 989,785 550,496 514,524
$.19
Costs and Expenses:
Housing sales 740,063 713,380 388,638 368,567
CONSOLIDATED CONDENSED
Land sales 9,178 17,538 4,961 8,998
BALANCE SHEETS Selling, general and administrative 110,992 98,339 58,594 51,390
1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 April 30, 2002 Oct. 31, 2001
(Amounts in thousands) Interest 29,632 24,982 15,477 13,218
Earnings Per Share (Diluted) Total Revenues (in millions) (Unaudited) 889,865 854,239 467,670 442,173
ASSETS
Three Months Ended April 30 Three Months Ended April 30
Cash and cash equivalents $ 115,462 $ 182,840
Income before income taxes 152,810 135,546 82,826 72,351
Inventories 2,402,720 2,183,541
Income taxes 55,806 49,843 30,316 26,573
$902 Property, construction and office equipment, net 36,144 33,095
$1,769
Net income $ 97,004 $ 85,703 $ 52,510 $ 45,778
Receivables, prepaid expenses and other assets 100,513 91,784
$1,613
Earnings per share
Mortgage loans receivable 25,765 26,758
$1,394 Basic $ 1.38 $ 1.18 $ .74 $ .63
$694 Investments in unconsolidated entities 14,122 14,182
$650 Diluted $ 1.29 $ 1.09 $ .69 $ .58
$2,694,726 $2,532,200
$1,080 Weighted average number of shares
$517 LIABILITIES AND STOCKHOLDERS’ EQUITY
Basic 70,425 72,591 70,849 72,857
Liabilities:
$436 $852
Diluted 75,241 78,697 76,237 78,564
Loans payable $ 235,547 $ 362,712
Subordinated notes 819,622 669,581 Six Months Three Months
Mortgage company warehouse loans 22,614 24,754 Housing Data Ended April 30 Ended April 30
Customer deposits on sales contracts 123,318 101,778 2002 2001 2002 2001
Accounts payable 144,318 132,970 Number of homes closed 2,065 1,950 1,086 979
Accrued expenses 235,587 229,671 Sales value of homes closed (in 000’s) $1,021,813 $ 955,915 $ 539,111 $ 497,546
Income taxes payable 85,376 98,151
1998 1999 2000 2001 2002 1998 1999 2000 2001 2002
Number of homes contracted* 2,634 2,311 1,706 1,428
Total liabilities 1,666,382 1,619,617
Contracts (in millions) Backlog (in millions) Sales value of homes contracted* (in 000’s) $1,387,424 $1,142,407 $ 902,260 $ 694,410
Three Months Ended April 30 At April 30
Stockholders’ Equity: Number of homes in backlog* 3,271 3,112 3,271 3,112
Common stock 738 369 Sales value of homes in backlog* (in 000’s) $1,769,197 $1,613,498 $1,769,197 $1,613,498
Additional paid-in capital 103,713 107,014
*Contracts for the three-month and six-month periods ended April 30, 2002 included $2.8 million (8 homes) and $4.6 mil-
Retained earnings 978,916 882,281
lion (14 homes), respectively, from an unconsolidated 50% owned joint venture. Contracts for the three-month and six-
Treasury stock (55,023) (77,081) month periods ended April 30, 2001 included $5.1 million (17 homes) and $9.4 million (32 homes), respectively, from this
Total stockholders’ equity 1,028,344 912,583 joint venture. Backlog as of April 30, 2002 and 2001 included $4.6 million (14 homes) and $10.9 million (37 homes),
$2,694,726 $2,532,200 respectively, from this joint venture.
Statement on Forward-looking Information
Toll Brothers, Inc. Corporate Office
Certain information included herein and in other Company reports, SEC filings, statements and presentations is forward-looking within the
3103 Philmont Avenue • Huntingdon Valley • PA 19006
meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning anticipated operating
215-938-8000 • www.tollbrothers.com • NYSE – “TOL”
results, financial resources, changes in revenues, changes in profitability, interest expense, growth and expansion, the ability to acquire land,
the ability to open new communities, the ability to sell homes and properties, the ability to deliver homes from backlog, the ability to secure
Investor Relations materials and subcontractors, and stock market valuations. Such forward-looking information involves important risks and uncertainties that
Frederick N. Cooper, Vice President - Finance – 215-938-8312 could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other Company reports,
fcooper@tollbrothersinc.com SEC filings, statements and presentations. These risks and uncertainties include local, regional and national economic conditions, the demand
for homes, domestic and international political events, the effects of governmental regulation, the competitive environment in which the
Joseph R. Sicree, Vice President - Chief Accounting Officer – 215-938-8045 Company operates, fluctuations in interest rates, changes in home prices, the availability and cost of land for future growth, the availability of
jsicree@tollbrothersinc.com capital, uncertainties and fluctuations in capital and securities markets, the availability and cost of labor and materials, and weather conditions.
mkt-566