Toll Revenue Off 41% in Quarter, Urges Fed Help

Horsham, PA, Nov. 11, 2008--Toll Brothers, the nation's largest builder of luxury homes, said preliminary fourth quarter revenues were approximately $691.0 million (1,079 units), backlog was approximately $1.33 billion (2,046 units) and net signed contracts were approximately $266.7 million (539 units).

The company said the totals represent declines of 41%, 54% and 27%, respectively, in dollars, and 35%, 48% and 18%, respectively, in units, compared to last year.

Toll ended the fourth quarter with approximately $1.63 billion of cash compared to $1.50 billion at the end of the third  quarter.

For the full year ended Oct. 31, home building revenues of approximately $3.15 billion declined 32% in dollars and 29% in units compared to a year ago.

Net signed contracts of approximately $1.61 billion (2,927 units) declined 47% in dollars and 34% in units from last year.

"Until the last month, our fiscal year 2008 fourth quarter net contract total was shaping up to be about the same as fiscal year 2007's fourth quarter total," said CEO Robert Toll.

"Unfortunately, the preliminary signs of stability we had discussed in early September...were upended by the past month's financial crisis. Results of this crisis -- accelerating fears of job losses, a large decline in consumer spending, a significant capital crunch, increased credit market disruption, and plummeting stock market values -- all contributed to drive our cancellations up to 233 units (about 30% of current-quarter-contracts, or 9% of beginning-quarter-backlog), and drive home buyer confidence and our traffic and demand down to record lows.

"As a result of the recent economic meltdown, we believe the government's attention should be focused on shoring up the housing market, which is the root of the current financial crisis."

Toll has been cutting back the number of communities it sells in. It ended the year with 273, compared to 315 a year ago.

"As we look to the future, we see reduced competition from the small and mid-sized private builders, whose access to capital is very constrained," Toll said.

"We believe this less crowded playing field, combined with attractive long-term demographics, will reward those well-capitalized builders who can persevere through the current challenging environment."