1. Corporate Profile Consolidated Statements of Income Consolidated Balance Sheets
(Amounts in thousands, except per share data) (Amounts in thousands)
Toll Brothers, Inc. is the nation’s leading and land sales, security, landscape, lawn
(Unaudited) July 31, 2000 Oct. 31, 1999
builder of luxury homes. With fiscal 1999’s maintenance, insurance brokerage, cable T.V. Nine Months Three Months
(Unaudited)
Ended July 31 Ended July 31
earnings of $102 million on revenues of $1.46 and broadband Internet delivery service, and ASSETS
billion, the Company completed its seventh house component assembly and manufacturing 2000 1999 2000 1999 Cash and cash equivalents $ 124,054 $ 96,484
Revenues:
consecutive year of record earnings, its eighth operations. The Company acquires and Residential inventories 1,668,976 1,443,282
Housing sales $1,160,379 $1,002,883 $ 452,174 $ 392,206
consecutive year of record revenues and year- develops commercial properties through its Property, construction and office equipment 23,377 19,633
Land sales 30,061 10,964 9,544 10,964
end backlog, and its ninth consecutive year of affiliate, Toll Brothers Realty Trust. Receivables, prepaid expenses and other assets 104,133 87,469
Equity earnings of unconsolidated
record signed contracts. Investments in unconsolidated entities 27,344 21,194
joint venture 3,069
Toll Brothers currently operates over 140 selling
Interest and other 6,060 7,384 2,814 2,524
Toll Brothers began business in 1967 and is communities in twenty states: Arizona, $1, 947,884 $ 1,668,062
listed on the New York Stock Exchange and the California, Connecticut, Delaware, Florida, 1,199,569 1,021,231 464,532 405,694
Pacific Exchange under the symbol “TOL”. The Illinois, Massachusetts, Maryland, Michigan, Costs and expenses: LIABILITIES AND STOCKHOLDERS’ EQUITY
Company builds customized single-family and Nevada, New Hampshire, New Jersey, New Housing sales 887,303 781,838 342,030 304,613 Liabilities:
attached homes, principally on land it develops York, North Carolina, Ohio, Pennsylvania, Land sales 23,266 8,556 7,618 8,556 Loans payable $ 348,622 $ 213,317
and improves, for move-up and empty-nester Rhode Island, Tennessee, Texas, and Virginia. Selling, general and administrative 119,307 92,878 44,177 34,114 Subordinated notes 469,479 469,418
buyers in six regions of the country. The Interest 31,211 28,128 11,916 10,870 Customer deposits on sales contracts 112,484 82,495
Toll Brothers is the only public home builder
Company is developing master planned country 1,061,087 911,400 405,741 358,153 Accounts payable 94,287 84,777
to have won all three of the industry’s highest
club, golf course communities in seven states Accrued expenses 157,011 141,835
honors: America’s Best Builder from the
Income before income taxes and
and active-adult, age-qualified communities in Income taxes payable 74,395 59,886
National Association of Home Builders, the
extraordinary loss 138,482 109,831 58,791 47,541
Michigan, New Jersey, Connecticut and Virginia. National Housing Quality Award and Builder Total liabilities 1,256,278 1,051,728
Income taxes 50,905 40,240 21,557 17,468
The Company operates its own architectural, of the Year. For more information visit our web
Income before extraordinary loss 87,577 69,591 37,234 30,073
engineering, mortgage, title, land development site at www.tollbrothers.com. Stockholders’ equity:
Extraordinary loss from extinguishment of
Common stock 359 365
debt, net of income taxes of $857 in 1999 1,461
Additional paid-in capital 105,184 105,239
$19.29
$1.00 Net income $ 87,577 $ 68,130 $ 37,234 $ 30,073 Retained earnings 610,242 522,665
Treasury stock (24,179) (11,935)
Earnings per share
$16.01
$.80
Total stockholders’ equity 691,606 616,334
Basic
$13.52
Income before extraordinary loss $ 2.41 $ 1.89 $ 1.03 $ .82
$.67 $1,947,884 $ 1,668 ,062
Extraordinary loss from
$10.51
extinguishment of debt .04
$.45 $8.63
$.43
Net income $ 2.41 $ 1.85 $ 1.03 $ .82
Diluted Toll Brothers, Inc. Investor Relations
Income before extraordinary loss $ 2.36 $ 1.85 $ 1.00 $ .80 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 $ 2.36 $ 1.81 $ 1.00 $ .80
Before extraordinary item At July 31 www.tollbrothers.com Vice President - Chief Accounting Officer
Three Months Ended July 31 Weighted average number of shares NYSE – “TOL” jsicree@tollbrothersinc.com
Basic 36,338 36,765 36,146 36,614
$532 $1,468
Diluted 37,055 37,591 37,219 37,400
Statement on Forward-looking Information
$1,093
$399 Nine Months Three Months Certain information included herein and in other Company reports and S.E.C. filings is forward-looking within the meaning of
Ended July 31 Ended July 31 the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning anticipated operating
$333 Housing Data
$844 results, financial resources, increases in revenues, increased profitability, interest expense, growth and expansion, ability to
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.
$251 $654 Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and
Number of homes closed 2,668 2,517 1,011 986
$206 $555 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) $1,160,379 $1,002,883 $ 452,174 $ 392,206 and uncertainties include local, regional and national economic conditions, the effect of governmental regulation, the competi-
Number of homes contracted* 3,322 2,886 1,060 922 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) $1,573,814 $1,225,142 $ 532,317 $ 398,559
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 Number of homes in backlog* 2,983 2,483 2,983 2,483
Contracts Backlog *Contracts for the three-month and nine-month periods ended July 31, 2000 include $4,445,000 (15 homes) and $12,339,000
Sales value of homes in backlog* (in 000’s) $1,468,254 $1,092,660 $1,468,254 $1,092,660
(in millions) (in millions) (45 homes), respectively, from an unconsolidated 50% owned joint venture. Contracts for the three-month and nine-month
Average number of selling communities 147 134 151 133
Three Months Ended July 31 At July 31 periods ended July 31, 1999 include $7,552,000 (27 homes) from this joint venture. Backlog as of July 31, 2000 and July 31,
1999 includes $13,229,000 (47 homes) and $13,073,000 (58 homes), respectively, from this joint venture.

2. Huntingdon Valley, PA 19006-4298
A Letter to our Shareholders:
T H I R D Q UA RT E R R E P ORT
FOR THE THREE MONTHS
ENDED JULY 31, 2000
Cumberland Williamsburg at Oakton Chase, Herndon, VA
3103 Philmont Avenue
Your company produced record third quarter metro Boston and recent expansion into Rhode
earnings, up 24% over fiscal 1999; record nine Island and Northern Connecticut, will enable
month earnings, up 26% over 1999; record us to further benefit from the region’s robust
third quarter revenues, up 15% and record nine economy and demographics.
month revenues, up 17%. Our earnings,
To fuel our continuing growth, we raised an
revenues and backlog were the highest for any
additional $170 million from eight of the banks
quarter in our history and we produced our
in our credit line through a five-year term loan
38th consecutive quarterly year-over-year record
that, with their approval, can be extended
for new contracts.
annually and can be increased to $250 million.
Our stock price has risen recently as “the We used $56 million of the proceeds to repay
market” has shown increased interest in our bank term debt due within one year. This new
industry, and our company in particular. While loan, coupled with our $465 million bank
we welcome this, our price/earnings multiple as revolving credit facility, of which over $320
of this writing is 8.3 times IBES’ projected fiscal million is available, gives us access to $635
year-end earnings estimate. Having produced million of bank capital.
compound annual growth in excess of 20% on
In our third quarter we repurchased 557,000
average for revenues and earnings over the past
shares of our stock, raising to 1.56 million the
10 years, we hope to reach a p/e multiple more
number of shares we have repurchased in fiscal
closely resembling that of other companies with
years 1999 and 2000.
similar growth.
With consumer confidence high, interest rates
Profit margins this quarter continued to
steady and unemployment low, it appears as
improve as the price increases we put into effect
though we will have a strong luxury housing
nine to twelve months ago are now impacting
market in the coming year. Due to our record
our bottom line; with ongoing strong demand
$1.47 billion backlog, which was up 34% over
for luxury homes we have continued to raise
the previous year, most of our revenues through
prices. The average delivered price of homes
the second quarter of fiscal 2001 are already in
this quarter was $447,000 and the average price
our pipeline. Based on this backlog and current
of homes in backlog was $492,000. This was
healthy demand, we believe that fiscal 2001
up approximately $50,000 compared to one
should be another record year.
year ago; in addition to the impact of home
price increases, it reflects our expanding Given our excellent results, the continuing
production in California and our increased increase in affluent U.S. households and the
number of large master planned communities demographics of the maturing baby boom
offering more expensive homes. generation, we eagerly anticipate the future.
We now have ten master planned communities We greatly appreciate our shareholders’ and our
already open or scheduled to open in the home buyers’ support and confidence, and
coming year. These communities, totaling thank the entire Toll Brothers team for another
approximately 10,000 lots, have tremendous extraordinary performance.
recreational amenities such as championship
Sincerely
golf courses, country clubs and lakes. Since we
offer multiple products within these
communities, they are the ideal way for us to
serve both move-up and empty nester luxury Robert I. Toll Bruce E. Toll
buyers. We will continue to expand production Chairman of the Board Vice Chairman
within these master planned communities and and Chief Executive Officer of the Board
intend to open new ones in the future.
First-Class Mail
PAID
The overall strength of the New England
U.S. Postage
CMSS
economy has led us to expand into New Zvi Barzilay
Hampshire, our 20th state. We believe this President and Chief Operating Officer
move, coupled with our established presence in August 23, 2000