CORPORATE PROFILE
March 4, 2016
TABLE OF CONTENTS & CONTACT INFORMATION
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Table of Contents & Contact Information
Statement of Forward-Looking Information
Overview
Brand Name
Fortune’s Most Admired
Fortune’s Quality of Products/Services
Toll Brothers Results
Current U.S. Housing Market
Key Metrics
Important Trends
Toll’s Response
Nationwide Footprint
Lots, Revenue, Backlog by Region
Only National HB Focused on Luxury Market
Toll Home Prices
Widest Variety of Homes
Product Diversification
Move-Up
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Empty Nester
Active Adult
Master Planned
Second Home
Urban Redevelopment
Suburban High Density
Urban & Suburban Rental
Urban Infill
City Living Overview
Current City Living Pipeline
Future City Living Pipeline
Focus on land
Building a Solid Land Position
Number of Selling Communities
School Quality Index
High-Volume Technology
Toll Integrated Systems
TBI Mortgage
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Diversifying Income Streams
Other Income & JV Income
Toll Apartment & Campus Living
Current Apartment Living Pipeline
Future Apartment Living Pipeline
Active Adult overview
Toll Acquisitions
Superior Capital Market Access
Maintain Conservative Debt Maturities
Capitalization
Net-Debt-to-Capital
Toll Brothers Revenue
Cash & Marketable U.S. Treasury Securities
Unemployment Rates
U.S. Births
$100,000 Income Households
Basic Demographics
Housing Starts vs. Household Growth
Why Toll
Investor Relations Team
MARTIN CONNOR
CFO
Email: mconnor@tollbrothersinc.com
Phone: 215-938-6934
2
FREDERICK COOPER SVP, Finance, International Development
& Investor Relations
Email: fcooper@tollbrothersinc.com
Phone: 215-938-8312
GREGG ZIEGLER
RUSSELL ROCHESTIE
Email: gziegler@tollbrothersinc.com
Phone: 215-938-8365
Email: rrochestie@tollbrothersinc.com
Phone: 215-938-5227
SVP, Treasurer
VP, Finance
STATEMENT OF FORWARD‐LOOKING INFORMATION
Information presented herein for the first quarter ended January 31, 2016
is subject to finalization of the Company's regulatory filings, related
financial and accounting reporting procedures and external auditor
procedures.
Certain information included in this presentation is forward-looking within
the meaning of the Private Securities Litigation Reform Act of 1995,
including, but not limited to, information related to: anticipated operating
results; anticipated financial performance, resources and condition; selling
communities; home deliveries; average home prices; consumer demand and
confidence; contract pricing; business and investment opportunities; and
market and industry trends.
Such forward-looking information involves important risks and
uncertainties that could significantly affect actual results and cause them to
differ materially from expectations expressed herein and in other Company
reports, SEC filings, statements and presentations. These risks and
uncertainties include, among others: local, regional, national and
international economic conditions; fluctuating consumer demand and
confidence; interest and unemployment rates; changes in sales conditions,
including home prices, in the markets where we build homes; conditions in
our newly entered markets and newly acquired operations; the competitive
environment in which we operate; the availability and cost of land for
future growth; conditions that could result in inventory write-downs or
write-downs associated with investments in unconsolidated entities;
3
the ability to recover our deferred tax assets; the availability of capital;
uncertainties in the capital and securities markets; liquidity in the credit
markets; changes in tax laws and their interpretation; effects of
governmental legislation and regulation; the outcome of various legal
proceedings; the availability of adequate insurance at reasonable cost; the
impact of construction defect, product liability and home warranty claims,
including the adequacy of self-insurance accruals, and the applicability and
sufficiency of our insurance coverage; the ability of customers to obtain
financing for the purchase of homes; the ability of home buyers to sell their
existing homes; the ability of the participants in various joint ventures to
honor their commitments; the availability and cost of labor and building
and construction materials; the cost of raw materials; construction delays;
domestic and international political events; and weather conditions. For a
more detailed discussion of these factors, see the information under the
captions "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 and our subsequent quarterly reports on Form 10-Q
filed with the Securities and Exchange Commission.
Any or all of the forward-looking statements included in this presentation
are not guarantees of future performance and may turn out to be
inaccurate. Forward-looking statements speak only as of the date they are
made. The Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise.
OVERVIEW
#1 LUXURY
BRAND
GEOGRAPHIC
& PRODUCT
DIVERSITY
SOLID
MANAGEMENT
& FINANCIAL
BASE
4





Nation’s leading luxury home builder
Nationally recognized, award-winning brand
Founded in 1967 and listed on NYSE since 1986
Average Q1 FY 2016 delivered home price of $873,500
Average price is double that of most other public homebuilders





Builds in 19 states and approximately 50 markets
Balanced footprint across the East, West and South
Strong land position – Control 43,800 lots
Expanding urban presence in NYC, Metro DC & Philadelphia
Serves urban and suburban, luxury move-up, empty nester, &
active-adult buyers as well as renters in select markets





Strong balance sheet and credit ratings
Approximately $1.3B of available liquidity at Q1 end FY 2016
No corporate debt maturities until September 2017
Executive & director beneficial ownership of approx. 10.5%*
Average senior management tenure of 20 years
* At January 20, 2016
THE #1 BRAND IN LUXURY HOME BUILDING
5
FORTUNE’S MOST ADMIRED HOME BUILDING COMPANY 2016
Rank
6
Overall Score
1
Toll Brothers
6.93
2
Lennar
6.81
3
D.R. Horton
6.05
4
CalAtlantic Group
5.99
5
PulteGroup
5.85
6
NVR
5.82
7
KB Home
5.07
8
Taylor Morrison
4.73
9
Hovnanian Enterprises
2.96
7
TOLL BROTHERS RESULTS
3 Months Ended January 31,
($ in millions), except Avg Prices
Fiscal Year Ended October 31,
2016
2015
% Change
2015
2014
% Change
1,250
1,063
18%
5,910
5,271
12%
$1,087
$873
24%
$4,956
$3,897
27%
$870
$822
6%
$838
$739
13%
4,251
3,651
16%
4,064
3,679
10%
$3,663
$2,740
34%
$3,504
$2,720
29%
$862
$750
15%
$862
$739
17%
Units
1,063
1,091
3%
5,525
5,397
2%
Dollars
$929
$854
9%
$4,171
$3,912
7%
Avg price ($ in 000s)
$874
$782
12%
$755
$725
4%
Contracts
Units
Dollars
Avg price ($ in 000s)
Backlog
Units
Dollars
Avg price ($ in 000s)
Deliveries
8
CURRENT U.S. HOUSING MARKET
MARKET IS
GROWING
 Market continues on a pace of slow but steady growth
 Increasing volumes of new and existing home sales but still below longterm averages
PENT-UP
DEMAND
 Continued population growth through recession and recovery
 Household formations are increasing
 Seven years of pent-up demand releasing
PERSONAL
BALANCE SHEETS
IMPROVING




CONSTRAINED
SUPPLY
 Fewer land entitlements processed for several years
 Inventory/lot shortages in some markets
 Constrained capital access favors largest builders
9
Improving job growth with little wage growth
Mortgage rates still low. Affordability is solid
Purchase decision is a confidence-sensitive issue
Rising home prices improve home equity of our potential buyers
KEY METRICS IMPROVING
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
Q1 2016
($117,187)
($29,366)
$112,942
$267,697
$504,582
$535,562
$116,817
EBITDA (000s)
$9,853
$74,058
$226,049
$408,145
$671,088
$705,909
$154,842
Diluted EPS
($0.02)
$0.24
$2.91
$1.01
$1.91
$1.97
$0.40
$1,236,927
$1,139,912
$1,217,892
$825,480
$598,341
$928,994
$336,244
195
215
224
232
263
288
291
Owned & Optioned Lots
34,852
37,497
40,350
48,628
47,167
44,253
43,819
Gross Margin*
20.7%
23.3%
24.0%
24.6%
25.3%
25.9%
26.9%
Operating Margin
-9.7%
-3.1%
3.4%
7.5%
10.2%
10.7%
10.2%
$51,783
$22,209
$49,512
$66,630
$107,333
$88,692
$22,358
Pre-tax Income (000s)
Cash and Marketable Securities (000s)
Selling Community Count
JV & Other Income (000s)
10
* Excluding interest and write-downs
IMPORTANT TRENDS
DEMOGRAPHIC
TRENDS
 Maturing Baby Boomer population
 Millennials deferring family formations,
but desire for homeownership matches
previous generations
 An increase in renting households
 Growth in international buyers
REGIONAL
GROWTH
 Job growth in Texas
 Strengthening economy and population
growth in the West and Northwest
 Continued focus on our affluent core
markets from Washington DC to Boston
URBAN
GROWTH
 National trend towards urbanization
 Success in NYC, Philadelphia, and Metro
Washington DC
11
WELL‐POSITIONED FOR IMPORTANT TRENDS
DEMOGRAPHIC
TRENDS
ExpandingActive
activeAdult
adultto
tonew
newmarkets
markets
 Expanding
ExpandingToll’s
our rental
business
 Expanding
rental business
Designingmore
morehomes
houses
attractive
 Designing
attractive
to to
international/multigenerational
international buyers and hiringbuyers
 Increasing
oursales
marketing
and service
multilingual
and mortgage
capabilities
personnel for international buyers
REGIONAL
GROWTH
ExpandedininTexas
California and Nevada
 Expanded
ExpandedininCalifornia
Texas and Nevada
 Expanded
 Entered
EnteredSeattle
Seattle
 Maintained
in affluent
core
Maintaineddominance
focus on core
market
of
markets
fromDC
Washington
Washington
to BostonDC to Boston
URBAN
GROWTH





12
Growing City Living in NYC
Entered the Metro Washington DC market
Exploring additional cities
Building urban rentals
Seeking urban infill/re-use opportunities
NATIONWIDE FOOTPRINT POSITIONS
US FOR GROWTH 19 STATES, 50 MARKETS
Seattle
Minneapolis Detroit
Chicago Sacramento
San Francisco
Philadelphia
Fort Collins
Reno
Baltimore
Denver
Los Angeles
Palm Springs
Tucson
Raleigh
Charlotte
Phoenix
San Diego
Wilmington
Washington DC
Las Vegas
San Jose
Boston
Hartford
New York
Princeton
Dallas
REGIONS /
Selling Communities
North
60
Mid-Atlantic
66
South
65
West
62
California
31
City Living
13
Austin
Jacksonville
Houston
Orlando
Ft . Myers
Naples
7
Total: 291
* As of January 31, 2016
Jupiter
West Palm Beach
Boca Raton
Miami
GEOGRAPHICALLY DIVERSIFIED PORTFOLIO
FY 2015 Revenue
($)
FYE 2015 Lots Controlled
4%
8%
6%
17%
19%
15%
FYE 2015 Backlog
($)
18%
18%
26%
15%
20%
18%
25%
16%
16%
19%
14
21%
North
Mid-Atlantic
South
West
California
City Living
19%
ONLY NATIONAL HOMEBUILDER FOCUSED ON LUXURY MARKET
Toll’s main competitors are small private builders, not the larger public builders.
$1,000
$900
$874
Average Delivered Home Price*
($000)
$800
$755
$700
$600
$531
$464
$500
$400
$300
$286
$313
$314
$326
$329
M/I
Beazer
Lennar
Pulte
$355
$365
$369
$377
$382
KB Home
Meritage
NVR
MDC
Hovnanian
$478
$200
$100
$0
15
DR Horton
* Updated based on most recent reported fiscal-year-end deliveries.
Taylor CalAtlantic TRI Pointe
Toll
Morrison
Brothers
FY 2015
Toll
Brothers
Q1 FY
2016
TOLL HOME PRICES Q1 FY 2016*
(by unit deliveries)
57%
58%
Under
$750,000
Under $300,000
$300,000 to $749,999
$750,000 to $999,999
20%
1%
22%
16
*Numbers may not add due to rounding in units
Over $1,000,000
THE WIDEST VARIETY OF HOMES IN THE INDUSTRY
•
Move-up
•
Empty Nester
•
Active Adult
•
Second Home
•
Urban-Infill
•
Urban Redevelopment
•
Golf Course & Country Club
•
High-Rise
•
Suburban High Density
•
Urban & Suburban Rental
17
PRODUCT DIVERSIFICATION
(by unit deliveries)
FY 2000
FY 2015
10%
4%
1%
17%
16%
64%
89%
18
Single Family
Attached
Age Qualified
City Living
M OV E ‐ U P
19
Liseter, Newtown Square, PA
E M P T Y N E S T E R
20
Toll Brothers at Inspirada, Henderson, NV
ACTIVE ADULT
21
Regency at Damonte Ranch, Revo, NV
MASTER PLANNED
22
Gale Ranch, San Ramon, CA
SECOND HOME
23
Toll Brothers at Hidden Canyon, Lake Forest, CA
URBAN REDEVELOPMENT
24
Pierhouse at Brooklyn Bridge Park, Brooklyn, NY
SUBURBAN HIGH DENSITY
25
The Morgan at Provost Square, Jersey City, NJ
URBAN & SUBURBAN RENTAL
26
URBAN INFILL
27
TOLL BROTHERS CITY LIVING
SUCCESSFUL
URBAN TRACK
RECORD
 Formed in 2003 to leverage luxury brand
 Follows demographic trends of Millennials,
more families and Boomers living in cities
 Communities in NYC, North Jersey’s Gold
Coast, Philadelphia & Urban Metro DC
BROAD
EXPERIENCE
 Completed construction on 29 buildings
totaling over 3,800 units*
 Selling from 9 buildings, totaling 918 units*
 Future pipeline consists of 9 buildings,
totaling 1,180 units*
 Exploring Boston, San Francisco & Miami
DISTINCTIVE
PRODUCT
 Focus on buildings in the 50 – 200 unit
range located in upscale neighborhoods
 Develop differentiated products based on
granular analysis of each neighborhood
 Offer innovative architecture, elegant
finishes, world-class amenities and service
28
* As of January 31, 2016
CURRENT CITY LIVING PIPELINE*
Estimated Timing
Estimated Remaining
Revenue††
Construction
Start
Open for Sale
1st
Settlement
4
$8 - $10 million
Q1 2012
Q2 2013
Q2 2014
7
28
$121 - $148 million
Q3 2012
Q4 2014
Q4 2015
49
2
4
$5 - $6 million
Q3 2013
Q4 2013
Q4 2015
106
0
77
29
$414 - $506 million
Q3 2013
Q2 2014
Q3 2016
9
3
2
4
$85 - $104 million
Q3 2013
Q3 2014
Q4 2015
The Sutton (Manhattan) †
113
0
52
61
$241 - $294 million
Q3 2014
Q1 2015
Q4 2016
Hampden Row (Bethesda)
55
0
16
39
$68 - $83 million
Q1 2015
Q1 2015
Q1 2017
55 W 17th Street (Manhattan)
53
0
15
38
$168 - $205 million
Q1 2015
Q4 2015
Q1 2017
1400 Hudson (Hoboken)
236
0
77
159
$209 - $255 million
Q1 2015
Q4 2015
Q3 2017
Total
918
300
252
366
$1.32 - $1.61 billion
Sold Units Units Left to
Sell
Total
Units
Settled
Units
(Not Settled)
1100 Maxwell Place (Hoboken)
210
202
4
400 Park Ave South (Manhattan)
81
46
410 at Society Hill (Phila)
55
Pierhouse at BBP (Brooklyn)**
1110 Park Avenue (Manhattan)
29
* Projects open for sale as of January 31, 2016
** Will be delivered in joint venture; data is for condo units only. Toll is a 50% Partner in the venture.
† Will be delivered in joint venture. Toll is a 25% Partner in the venture.
†† Represents the value of the Sold (Not Settled) Units plus the Units Left to Sell
FUTURE CITY LIVING PIPELINE*
Estimated Timing
Total Units
Estimated Revenue
Construction Start
Open for Sale
1st Settlement
100 Barrow Street (Manhattan)
33
$143 - $174 million
Q2 2015
Q3 2016
Q4 2017
121 East 22nd Street (Manhattan)**
133
$454 - $555 million
Q2 2016
Q4 2016
Q4 2018
Provost Square II (Jersey City)
242
$167 - $204 million
Q2 2016
Q3 2017
Q3 2018
91 Leonard (Manhattan)**
112
$271 - $332 million
Q3 2016
Q2 2017
Q4 2018
1451 Hudson Street (Hoboken)
99
$91 - $112 million
Q4 2016
Q2 2017
Q4 2018
8008 Wisconsin Avenue (Bethesda)
100
$90 - $110 million
Q2 2017
Q4 2017
Q4 2019
1000 Maxwell Lane (Hoboken)
76
$68 - $83 million
Q4 2017
Q4 2018
Q4 2019
82 King Street (Manhattan)
126
$335 - $410 million
Q2 2018
Q2 2019
Q3 2020
Provost Square III (Jersey City)
259
$183 - $224 million
Q3 2018
Q2 2019
Q4 2020
1,180
$1.80 - $2.20 billion
Total
30
*Projects scheduled to open for sale after January 31, 2016
** Potential JVs
FOCUS ON LAND
ACQUISITION
 Control 43,800 home sites*
 Operate in most difficult land approval
markets in U.S.
 Skilled in land acquisition, approvals, &
development across all markets
DEVELOPMENT
 One of U.S.’s largest land developers
 In-house engineering company, ESE,
manages site design & land improvements
 Every ESE plan is designed for approvals,
constructability & most importantly, the
end use…a luxury home community
CAREFULLY
MANAGED
INVENTORY
 Protects against potential land shortages in
lot-constrained markets
 All land deals approved at corporate
headquarters by senior management
 Most land bought post-approvals
31
* As of January 31, 2016
BUILDING ON A SOLID LAND POSITION
91,207
83,126
Lots Owned and Optioned
73,768
60,189
17,600 Finished
Lots at 1/31/16
59,251
48,628 47,167
48,058
39,146
40,844
39,784
33,118
31,917
34,852
37,497
40,350
44,253 43,819
8,180
35,639
2000
2001
2002
2003
2004
2005 Q2 2006 2006
2007
Owned
32
2008
2009
Optioned
Fiscal Year End
2010
2011
2012
2013
2014
2015 Q1 2016
NUMBER OF SELLING COMMUNITIES
300
315
288
273
220
200
146
155
263
230
200
170
At Fiscal Year End
33
215
195
224
232
291
HOMEBUILDER SCHOOL QUALITY INDEX
Average School District Rating
10.00
9.00
8.00
7.00
9.06
(0-10 Scale)
8.88
8.40
7.30
6.89
6.00
6.82
6.67
6.33
5.87
5.59
5.47
5.47
5.44
4.75
5.00
4.20
4.00
4.11
3.66
3.00
2.00
1.17
1.00
0.00
34
TOL WCIC TMHC MHO TPH
CAA HOV PHM NVR
LEN
MTH WLH BZH MDC
DHI
Source: Raymond James, “’Back to School, Episode IV’: Our Expanded Land Analysis of Public Homebuilders” U.S. Research, October 20, 2015
CCS
KBH LGIH
CUSTOM HOMES BUILT USING HIGH ‐VOLUME TECHNOLOGY
•
•
•
•
•
Toll’s luxury systems developed over 40 years
Buyers choose from hundreds of structural and
designer options
In FY 2015 the average buyer added approximately
$134,000 in options and premiums, consistent with
16 - 20% of base in prior years
Provides competitive advantage vs. small builders
Toll Architecture systemizes high-volume home
production
Toll Brothers at Inspirada, Henderson, NV
35
TOLL INTEGRATED SYSTEMS –
PANEL & TRUSS PLANT
•
•
•
•
•
•
36
Manufactures and distributes wall panels, floor and roof
trusses, signature millwork, windows, and doors
Operates four plants in suburban Pennsylvania, Virginia,
and Indiana
Supplied components for approximately 3,000 homes in
FY 2015 from Massachusetts to North Carolina
Builds more than 150 different homes with multiple
elevations and hundreds of options
Improves timeline, quality, costs, and reduces waste
Reduces dependence on skilled carpenters in times of
labor shortage
STRONG BUYER PROFILE/TBI MORTGAGE
•
•
22% of buyers paid cash
Our buyers have strong credit profiles with an
average FY 2015 FICO score of 756 on conforming
loans and jumbo loans
•
Average LTV of 70% in FY 2015
•
42% of buyers used jumbo mortgages in FY 2015
•
•
•
TBI served 57% of Toll buyers using mortgages
in FY 2015
Pre-sells loans individually to minimize risk
Investors who provide our customers with
mortgages have continued to issue new
commitments
Toll Brothers at Hidden Canyon, Irvine, CA
37
DIVERSIFYING INCOME STREAMS
Suburban Home Building (For Sale)
- 50 markets in 19
states
Land Sales &
Development
- Lot sales to 3rd
parties builders
• Move up
• Shapell (CA)
• Empty nester
• Northgrove at
Spring Creek (TX)
• Active Adult
• Second home
• Master-planned
resort style
• Suburban high
density
38
• Woodson's
Reserve (TX)
• Travisso (TX)
City Living
(Condo for Sale)
Apartment Living
(Rental)*
Ancillary Businesses
- Manhattan,
Brooklyn, and
Queens, NYC
- Located in Urban
and Suburban
locations
- Gibraltar Capital
and Asset
Management
- Hoboken and
Jersey City, NJ
- 3 projects (1,728
units) stabilized
- TBI Mortgage
- Metro Washington,
DC
- 2 projects (815
units) leasing
- Philadelphia, PA
- 5 projects (1,941
units) under
development
- Toll Landscaping
- 10 projects (2,961
units) in the pipeline
- Westminster Title
• Sienna South (TX)
*As of January 31, 2016
- Golf Course
Development &
Management
- Westminster
Security
OTHER INCOME AND JOINT VENTURE INCOME
($ Thousands)
Project $105 million to $130 million of pre‐tax income in FY 2016
Other Income
Joint Venture Income
$110,000
$107,333
$88,692
$90,000
$51,783
$50,000
21,119
$66,630
$70,000
$49,512
$34,388
$30,000
67,573
$22,209
$10,000
-$10,000
2009
2010
2011
2012
2013
2014
2015
• In fiscal 2011 and 2009, the Company recognized impairment charges on investments in unconsolidated entities of $40.9 million and $11.3 million,
respectively, which are included above. The Company did not recognize any impairment charges on investments in unconsolidated entities in fiscal 2010.
39
TOLL APARTMENT LIVING/CAMPUS LIVING
COMPLEMENT
FOR-SALE
BUSINESS
 Investing in Apartment & Student Housing
development to maximize operational synergies
 A hedge against For-Sale cyclicality
 Building on Toll Brothers brand name and skills
 Current pipeline of 4,500 units with land controlled
for 3,000 future unit totals approx. 7,500 units*
BROAD
EXPERIENCE
 Developed & operate 1,728 units*
 Leasing up at 2 communities of 815 units*
 1,523 rental units under construction in 4 projects
from Massachusetts to Washington DC *
 Building 418 Campus Living units (1,493 beds) at
University of Maryland in College Park, MD*
STRATEGIC
GROWTH
 Control land for 2,961 future apartment & student
living units in Northeast/Mid-Atlantic & Dallas*
 Expect to invest additional $100 - $200 million
 Plan to expand business nationally
 Combine premier locations with luxury, for-sale
finishes, services and amenities
40
* As of January 31, 2016
CURRENT APARTMENT LIVING PIPELINE*
(Developed in Joint Venture)
Estimated Timing
Total
Dev.
Open For
Stab.
Location
Units
Start
Occupancy
Year
Dulles Greene
Herndon, VA
806
1998
1999
2003
Mews at Princeton Junction
Princeton, NJ
635
2003
2005
2008
Parc Riverside (Phase I)
Washington, DC
287
2013
2015
2016
Existing Apartments
3 Total Existing Apartments
In Lease-Up
1,728
Location
Parc at Plymouth Meeting
Plymouth Meeting, PA
398
2013
2015
2017
The Morgan at Provost Square
Jersey City, NJ
417
2013
2015
2017
2 Total In Lease-Up
In Construction
815
Location
Kensington Place
East Brunswick, NJ
400
2013
2016
2018
Terrapin Row**
College Park, MD
418
2014
2016
2016
Parc Westborough
Westborough, MA
249
2015
2016
2018
Riverworks
Phoenixville, PA
Union Place
Washington, DC
349
525
2015
2016
2016
2018
2018
2020
5 Total Under Development
41
1,941
* As of January 31, 2016
** Student Housing Project
FUTURE APARTMENT LIVING PIPELINE*
(To Be Developed in Joint Venture)
Estimated Timing
Total
Dev.
Open For
Stab.
Future Apartments
Location
Units
Start
Occupancy
Year
Whitehall**
State College, PA
268
2016
2017
2017
Needham
Needham, MA
390
2016
2018
2020
Parc Riverside (Phase II)
Washington, DC
314
2016
2018
2021
Maneely
Princeton, NJ
232
2017
2018
2019
Bartlett Fields
Scituate, MA
234
2017
2018
2020
Bryant
Chantilly, VA
250
2017
2018
2020
Voorhees
Voorhees, NJ
340
2017
2018
2021
Oaklawn
Dallas, TX
275
2017
2019
2020
Belmont
Ashburn, VA
376
2018
2019
2021
Morristown
Morristown, NJ
282
2018
2020
2021
10 Projects
42
2,961
* As of January 31, 2016
** Student Housing Project
ACTIVE ADULT OVERVIEW
2 DECADES OF
EXPERIENCE
 Brand name in Active Adult market
 Developed 59 communities and 17,000
Active Adult home sites
 Delivered approximately 7,000 Active
Adult homes totaling over $3B in revenues
BROAD AND
EXPANDING
FOOTPRINT
 An established presence in 8 states – CT,
IL, MA, NC, NJ, NY, PA, and VA
 Expanding footprint in the West, first in
CO and NV
 Exploring additional markets
STRONG
DEMOGRAPHICS
 Baby Boomers are maturing
 By 2020 there will be 43 million people
between the ages of 55-64*
 The average net worth of these families is
$800,000**
43
*Source: US Census
**Source: Federal Reserve
TOLL HOME BUILDER ACQUISITIONS
Toll Brothers has made eight acquisitions in our history: Geoffrey H. Edmunds
Scottsdale, Arizona
1995
Coleman Homes
Las Vegas, Nevada
1998
Silverman Homes
Metro Detroit, Michigan
1999
Richard R. Dostie
Jacksonville, Florida
2003
Northern New Jersey, Urban High-Rise
2003
Central Florida
2005
Seattle, Washington
2011
Coastal Northern and Southern California
2014
The Manhattan Building Company
Landstar Homes
CamWest Development LLC
Shapell Homes
44
SUPERIOR CAPITAL MARKET ACCESS
SENIOR/CORPORATE CREDIT RATINGS
45
Fitch Inc.
BBB- (Stable)
Standard & Poor’s
BB+ (Stable)
Moody’s
Ba1 (Stable)
MAINTAIN CONSERVATIVE DEBT MATURITIES*
Accessing Capital For Growth
$350
Public Debt (Senior)
No corporate debt maturities
until September 2017
Convertible Debt (Senior)**
Bank Debt †
$288
$500
$400
$420
$400
$350
$250
$250
FY
2016
2017
2018
2019
2020
2021
2022
$ millions
46
* As of January 31, 2016
** Convertible notes mature in September 2032. Call right is September 2017 at par
† Bank Debt includes our $500 million term loan due in FY 2019
2023
2024
2025
CAPITALIZATION*
Toll Brothers, Inc.
First Huntingdon Finance Corp.
■
■
■
■
■
■
■
■
■
$1.035 BN Revolving Credit Facility
Due August 2018†
Commitment
Citi
$100 MM
Deutsche Bank
$100 MM
Mizuho Bank
$100 MM
PNC
$100 MM
SunTrust
$100 MM
Capital One
$75 MM
US Bank
$75 MM
Wells Fargo
$75 MM
Bank of America
$50 MM
■
Comerica
■
Fifth Third Bank
Regions Bank
Sumitomo Mitsui
Texas Capital Bank
TD Bank
■
■
■
■
$50 MM
$50 MM
$50 MM
$50 MM
$35 MM
$25 MM
$1,035 MM
■
■
■
■
■
■
■
■
■
■
Toll Brothers Finance Corp.
$500 MM Term Loan
Due February 2019
Commitment
SunTrust
$100 MM
Sumitomo Mitsui
$75 MM
US Bank
$75 MM
Bank of New York
$55 MM
Capital One
$50 MM
Wells Fargo
$50 MM
Beneficial Bank
$30 MM
Fifth Third Bank
$30 MM
PNC
$25 MM
Mega International
Senior Notes
Series
Coupon
Principal
September 2017
October 2017
December 2018
November 2019
February 2022
April 2023
January 2024
November 2025
0.500%
8.910%
4.000%
6.750%
5.875%
4.375%
5.625%
4.875%
5.217%
$288 MM
$400 MM
$350 MM
$250 MM
$420 MM
$400 MM
$250 MM
$350 MM
$2,707 MM
1.62 years
1.71 years
2.92 years
3.75 years
6.05 years
7.21 years
7.96 years
9.80 years
5.15 years
Source
Senior Debt (Public)
Convertible Debt
Bank Debt
Total
Coupon
5.777%
0.500%
1.771%
4.585%
Outstanding
$2,420 MM
$288 MM
$608 MM
$3,316 MM
Maturity (yrs.)
5.57 years
1.62 years
2.93 years
4.74 years
$10 MM
$500 MM
† The Company finished the period ending 1/31/2016 with $926.7 million available under its revolving credit facility.
47
Maturity (yrs.)
* As of January 31, 2016
STRONG BALANCE SHEET PROVIDES ROOM TO GROW
48.0%
45.8%
Net‐Debt‐To‐Capital**
2000‐2016
46.0%
41.1%
40.7%
41.7%
39.5%
35.3%
32.3%
31.7%
27.4%
26.7%
23.3%
14.8%
13.3%
12.5%
7.0%
At Fiscal Year End
* Total assets and debt balances were adjusted to reflect the adoption of Accounting Standards Update No. 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” on
October 31, 2015. See Note 1 in Annual Report on Form 10K “Significant Accounting Policies – Recent Accounting Pronouncements,” for additional information.
48
** Calculated as total debt minus mortgage warehouse loans minus cash and marketable securities divided by total debt minus mortgage warehouse loans
minus cash and marketable securities plus stockholders’ equity.
TOLL BROTHERS REVENUE
($ Thousands)
While revenues declined, cash
position grew.
$6,115,000
$4,635,000
$3,912,000
$4,171,000
$3,148,000
$2,674,000
$1,755,000
2006
2007
2008
2009
$1,883,000
$1,495,000 $1,476,000
2010
2011
At Fiscal Year End
49
2012
2013
2014
2015
TOLL BROTHERS CASH AND MARKETABLE U.S. TREASURY SECURITIES ($ Thousands)
During unprecedented time of industry distress Toll grew cash
$1,909,000
$1,633,000
$1,237,000
$1,220,000
$1,146,000
$900,000
$689,000
2005
$633,000
2006
$598,000
2007
2008
2009
2010
At Fiscal Year End
50
$929,000
$825,000
2011
2012
2013
2014
2015
51
Source: U.S. Bureau of Labor Statistics
Jan-16
Jul-15
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
2
Jul-04
Jan-04
Jul-03
Jan-03
Jul-02
12
Jan-02
Jul-01
Jan-01
Jul-00
6
Jan-00
Jul-99
Jan-99
Jul-98
Jan-98
Jul-97
Jan-97
Jul-96
Jan-96
Unemployment Rate (%)
UNEMPLOYMENT RATES
February 2015
Civilian Labor Force Rate 4.9%
College Graduate Rate 2.5%
10
8
Civilian Labor Force
4
College Graduates
0
U.S. BIRTHS
4.75
Generation Z
(Ages 1 to 10)
Millennials
(Ages 11 to 35)
Generation X
(Ages 36 to 50)
Baby Boomers
(Ages 51 to 61)
4.55
4.35
3.95
3.75
3.55
3.35
3.15
2.95
52
U.S. BIRTHS 1954-2014
Source: CDC.gov
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
1958
1956
2.75
1954
Births (Millions)
4.15
$100,000+ INCOME HOUSEHOLDS GROWING 3 TIMES FASTER THAN ALL U.S. HOUSEHOLDS
(2014 Dollars)
All Households (mill)
$100,000+ Income Households (mill)
124.6
30.8
82.4
11.3
1980
53
2014
1980
Source: U.S. Census Bureau (P60-252)
2014
BASIC DEMOGRAPHICS DRIVE AN INDUSTRY EMERGING FROM ITS SLUMBER
Total estimated construction shortfall of 6.2 million houses from 2008-2015.
Annual Shortfall
in Production
(est.)
Average Annual
Production
775,000
1,585,000
Actual Average
Annual Housing
Starts
810,000
1970-2007
2008-2015
Average Annual Housing Starts
54
Source: U.S. Census Bureau
HOUSING STARTS VS. HOUSEHOLD GROWTH
1970‐1979
Average Annual
Housing Starts
1.77 (mil)
1980‐1989
Average Annual
Housing Starts
1.49 (mil)
1990‐1999
Average Annual
Housing Starts
1.37 (mil)
2000‐2007
Average Annual
Housing Starts
1.74 (mil)
2008‐2015
Average Annual
Housing Starts
.81 (mil)
2,400.00
100,000
1,600.00
75,000
50,000
800.00
25,000
Number of Households Has Grown 97% Since 1970
0
0.00
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
55
Total
Households
Total Single and MultiFamily Housing Starts
Source: U.S. Census Bureau
Housing Starts (000)
Households (000)
125,000
WHY TOLL BROTHERS?
WELLESTABLISHED
BRAND




A proven management team with an established track record
The dominant player with few competitors in the luxury market
Nationally recognized, award-winning brand
Highly service-oriented culture
GEOGRAPHIC
PRODUCT
DIVERSITY





Strong land position – Control 43,800 lots*
Balanced footprint across the East, West and South
Expanding urban presence in NYC, Metro Washington DC & Philadelphia
A homebuilder with a niche in urban, rental and distressed real estate
Diversified move-up, active adult, and high-density product lines
STRONG
FINANCIAL
BASE
 Strong balance sheet and credit ratings
 Approximately $1.3B of available liquidity at Q1 end FY 2016
 No corporate debt maturities until September 2017
STRONG
DEMOGRAPHIC
TRENDS
 Serving the nation's growing number of affluent households
 Strongest buyer profile in the industry
56
* As of January 31, 2016