SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED July 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
Commission file number 1-9186
TOLL BROTHERS, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2416878
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3103 Philmont Avenue, Huntingdon Valley, Pennsylvania 19006
(Address of principal executive offices) (Zip Code)
(215) 938-8000
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, $.01 par value: 34,214,335 shares as of September 1, 1997
<PAGE>
TOLL BROTHERS, INC. AND SUBSIDIARIES
INDEX
Page
No.
PART I. Financial Information
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited) 1
as of July 31,1997 and October 31,1996
Condensed Consolidated Statements of Income (Unaudited) 2
For the Nine Months and Three Months Ended
July 31, 1997 and 1996
Condensed Consolidated Statements of Cash Flows 3
(Unaudited)For the Nine Months Ended
July 31, 1997 and 1996
Notes to Condensed Consolidated Financial Statements 4
(Unaudited)
ITEM 2.Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
PART II. Other Information 8
SIGNATURES 10
STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information included herein and in other company statements, reports and
S.E.C. filings is forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995 including but not limited to statements concerning
the number of selling communities, anticipated operating results, financial
resources, growth and expansion. Such forward looking information involves
important risks and uncertainties that could significantly affect actual results
and cause them to differ materially from expectations expressed therein. These
risks and uncertainties include local, regional and national economic
conditions,the effect of governmental regulation on the Company, the
competitive environment in which the Company operates, changes in interest
rates, home prices, availability and cost of land for future growth,
availability of working capital, the availability and cost of labor and
materials and the levels of spending for selling, general and administrative
costs.<PAGE>
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
July 31, October 31,
1997 1996
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 27,041 $ 22,891
Residential inventories 894,244 772,471
Property, construction and office
equipment, net 14,998 12,948
Receivables, prepaid expenses and
other assets 29,282 26,783
Mortgage notes receivable 2,620 2,833
$ 968,185 $837,926
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Loans payable $ 185,000 $132,109
Subordinated notes 219,956 208,415
Customer deposits on sales
contracts 53,372 43,387
Accounts payable 41,735 42,423
Accrued expenses 67,135 58,211
Collateralized mortgage
obligations payable 2,611 2,816
Income taxes payable 38,813 35,888
Total liabilities 608,622 523,249
Shareholders' equity:
Preferred stock
Common stock 342 339
Additional paid-in capital 47,423 43,018
Retained earnings 311,798 271,320
Total shareholders' equity 359,563 314,677
$ 968,185 $837,926
</TABLE>
See accompanying notes
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands except per share data)
(Unaudited)
Nine months Three months
ended July 31 ended July 31
1997 1996 1997 1996
Revenues:
[S] [C] [C] [C] [C]
Housing sales $651,142 $499,219 $241,192 $212,597
Interest and other 2,410 1,137 634 181
653,552 500,356 241,826 212,778
Costs and expenses:
Land and housing construction 504,235 383,325 186,255 163,430
Selling, general & 60,807 50,260 21,914 17,787
administrative
Interest 19,975 16,194 7,233 6,952
585,017 449,779 215,402 188,169
Income before income taxes
and extraordinary loss 68,535 50,577 26,424 24,609
Income taxes 25,285 18,918 9,874 9,196
Income before extraordinary loss 43,250 31,659 16,550 15,413
Extraordinary loss from
extinguishment of debt,
net of income taxes of $1,659 2,772
Net income $ 40,478 $ 31,659 $ 16,550 $15,413
Earnings per share:
Primary
Income before extraordinary $ 1.24 $ .92 $ .47 $ .45
loss
Extraordinary loss from
extinguishment of debt .08
Net Income $ 1.16 $ .92 $ .47 $ .45
Fully-diluted
Income before extraordinary $ 1.19 $ .89 $ .45 $ .43
loss
Extraordinary loss from
extinguishment of debt .07
Net Income $ 1.12 $ .89 $ .45 $ .43
Weighted average number
of shares
Primary 34,777 34,496 34,856 34,435
Fully-diluted 37,319 36,910 37,422 36,780
[/TABLE]
See accompanying notes<PAGE>
<TABLE>
<CAPTION>
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Nine months
ended July 31
1997 1996
Cash flows from operating activities:
<S> <C> <C>
Net income $40,478 $31,659
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 2,952 2,399
Loss from repurchase of subordinated notes 540
Extraordinary loss from extinguishment of debt 4,431
Deferred taxes 2,803 1,306
Net realizable provisions 1,000
Changes in operating assets and liabilities:
Increase in residential inventories (110,629) (113,366)
Increase in receivables, prepaid
expenses and other assets (3,059) (2,185)
Increase in customer deposits on sales 9,985 12,998
contracts
Increase in accounts payable, accrued
expenses and other liabilities 8,236 14,880
Increase in current income taxes payable 259 686
Net cash used in operating activities (44,544) (50,083)
Cash flows from investing activities:
Purchase of property, construction and office
equipment, net (4,341) (2,214)
Principal repayments of mortgage notes receivable 213 972
Net cash used in investing activities (4,128) (1,242)
Cash flows from financing activities:
Proceeds from loans payable 125,000 160,000
Principal payments of loans payable (83,447) (71,186)
Proceeds from the issuance of senior subordinated 97,500
notes
Repurchase of subordinated notes (90,434) (13,096)
Principal payments of collateralized mortgage
obligations (205) (928)
Proceeds from stock options exercised and employee
stock plan purchases 4,408 4,227
Net cash provided by financing activities 52,822 79,017
Net increase in cash and cash equivalents 4,150 27,692
Cash and cash equivalents, beginning of period 22,891 27,772
Cash and cash equivalents, end of period $27,041 $55,464
Supplemental disclosures of cash flow information
Interest paid, net of capitalized amount $ 6,089 $ 4,104
Income taxes paid $20,156 $16,175
Supplemental disclosures of non-cash financing activities:
Cost of residential inventories acquired through
seller financing $11,144 $ 2,791
Income tax benefit relating to exercise of employee
stock options $ 409 $ 888
</TABLE>
See accompanying notes<PAGE>
TOLL BROTHERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands)
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission for interim financial information.
The October 31, 1996 balance sheet amounts and disclosures included
herein have been derived from the October 31, 1996 audited financial
statements of the Registrant. Since the accompanying condensed
consolidated financial statements do not include all the information and
footnotes required by generally accepted accounting principles for
complete financial statements, it is suggested that they be read in
conjunction with the financial statements and notes thereto included in
the Registrant's October 31, 1996 Annual Report on Form 10-K. In the
opinion of management, the accompanying unaudited condensed consolidated
financial statements include all adjustments, which are of a normal
recurring nature, necessary to present fairly the Company's financial
position as of July 31, 1997 and 1996, the results of its operations for
the nine months and three months then ended and its cash flows for the
nine months then ended. The results of operations for such interim
periods are not necessarily indicative of the results to be expected for
the full year.
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long Lived Assets and for Long-Lived Assets to Be Disposed
Of" ("FASB 121") established standards for the recognition and
measurement of impairment losses on long-lived assets. The Company
adopted FASB 121 as of November 1, 1996. The adoption did not result in
the recognition of an impairment loss.
Statement of Financial Accounting Standards No. 123 "Accounting for
Stock-Based Compensation" ("FASB 123") establishes a fair value based
method of accounting for stock-based compensation plans, including stock
options. FASB 123 allows the Company to continue accounting for stock
option plans under Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"), but requires it
to provide proforma net income and earnings per share information "as
if" the new fair value approach had been adopted. These proforma
disclosures will be presented in the Registrant's financial statements
to be contained in the 1997 Annual Report to Shareholders. Because the
Company intends to continue accounting for its stock option plans under
APB 25, there is no impact on the Company's consolidated financial
statements resulting from implementation of FASB 123.
Statement of Financial Accounting Standards No. 128, "Earnings per
Share" ("FASB 128") requires the calculation and dual presentation of
Basic and Diluted earnings per share ("EPS") and is effective for
financial statements issued for periods ending after December 15, 1997;
earlier application of FASB 128 is not permitted. Had FASB 128 been
adopted, Basic EPS before extraordinary loss would have been $1.26 and
$.94 for the nine months ended July 31, 1997 and 1996, respectively and
$.48 and $.45 for the three months ended July 31, 1997 and 1996,
respectively. Diluted EPS before extraordinary loss would have been
$1.19 and $.89 for the nine months ended July 31, 1997 and 1996,
respectively and $.45 and $.43 for the three months ended July 31, 1997
and 1996, respectively.
<PAGE>
2. Residential Inventories
Residential inventories consisted of the following:
<TABLE>
<CAPTION>
July 31, October 31,
1997 1996
<S> <C> <C>
Land and land development costs $206,507 $204,527
Construction in progress 595,897 491,552
Sample homes 44,059 40,017
Land deposits and costs of future
development 24,700 16,243
Loan assets acquired for future
development 3,385 4,106
Deferred marketing and financing
costs 19,696 16,026
$894,244 $772,471
</TABLE>
Construction in progress includes the cost of homes under construction,
land and land development and carrying costs of lots that have been
substantially improved.
The Company capitalizes certain interest costs to inventories during the
development and construction period. Capitalized interest is charged to
interest expense when the related inventories are closed. Interest
incurred, capitalized and expensed is summarized as follows:
<TABLE>
<CAPTION>
Nine months Three months
ended July 31 ended July 31
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest capitalized,
beginning of period $46,191 $43,142 $51,359 $46,636
Interest incurred 26,250 19,950 8,257 6,983
Interest expensed (19,975) (16,194) (7,233) (6,952)
Write off to cost of sales (108) (417) (25) (186)
Interest capitalized,
end of period $52,358 $46,481 $52,358 $46,481
</TABLE>
3. Loans Payable and Subordinated Debt
In November 1996, the Company issued $100 million of 8 3/4% Senior
Subordinated Notes due 2006.
In March 1997, the Company borrowed $50,000,000 from two banks for a
period of five years at a 7.72% fixed rate of interest.
In March 1997, the Company redeemed all of its 10 1/2% Senior
Subordinated Notes due 2002 ($87,800,000 principal amount) at 103%. See
Note 4 - Extraordinary Loss From Extinguishment of Debt.
4. Extraordinary Loss From Extinguishment of Debt
In January 1997, the Company called for redemption on March 15, 1997
all of its outstanding 10 1/2% Senior Subordinated Notes due 2002 at
103% of principal amount plus accrued interest. The redemption resulted
in an extraordinary loss in the first quarter of fiscal 1997 of
$2,772,000, net of $1,659,000 of income taxes. The loss represents the
redemption premium and the write-off of unamortized deferred issuance
costs. The redemption and related financing referred to in Note 3 will
result in the reduction of the Company's interest incurred of
approximately $2 million annually.
5. Stock Repurchase Program
In April 1997, the Company announced that its Board of Directors
authorized the repurchase of up to 3,000,000 shares of its Common Stock,
par value $.01, from time to time, in open market transactions or
otherwise, for the purpose of providing shares for its various employee
benefit plans. As of July 31, 1997, the Company had not repurchased any
shares.
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain income
statement items related to the Company's operations as percentages of total
revenues and certain other data:
<TABLE>
Nine months Three months
ended July 31 ended July 31
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Land and housing construction77.2 76.6 77.0 76.8
Selling, general and
administrative 9.3 10.1 9.1 8.3
Interest 3.0 3.2 3.0 3.3
Total costs and expenses 89.5 89.9 89.1 88.4
Income before taxes 10.5 % 10.1% 10.9% 11.6%
</TABLE>
Revenues for the nine month and three month periods ended July 31, 1997 were
higher than those of the comparable periods of 1996 by approximately $153
million, or 31%, and $29 million, or 14%, respectively. The increased
revenues for the 1997 periods were primarily attributable to the increase in
the number and higher average price of the homes delivered during the periods.
The increased number of homes delivered was due to the greater number of
communities from which the Company was delivering homes, the larger backlog of
homes at the beginning of fiscal 1997 as compared to the beginning of fiscal
1996 and the delays in the 1996 periods caused by the severe winter weather
conditions the Company encountered in many of its markets. The increase in the
average selling price per home delivered in fiscal 1997 was due to a shift of
the location of the homes to more expensive areas, a change in product mix to
larger homes and increases in selling prices.
The value of new sales contracts signed amounted to $779 million (1,952 homes)
and $251 million (638 homes) for the nine month and three month periods ended
July 31, 1997, respectively. The value of new contracts signed for the
comparable periods of fiscal 1996 were $653 million (1,795 homes) and $206
million (558 homes), respectively. The increase in new contracts signed in
both periods of 1997 was primarily attributable to an increase in the average
selling price of the houses (due primarily to the location, size and increases
in selling prices), and an increase both in the number of communities in which
the Company was offering homes for sale and in the number of contracts signed
per community.
As of July 31, 1997, the backlog of homes under contract amounted to $654
million (1,609 homes), approximately 18% higher than the $555 million (1,482
homes) backlog as of July 31, 1996 and approximately 24% higher than the $526
million (1,367 homes) backlog as of October 31, 1996.
Land and construction costs as a percentage of revenues increased in the nine
month and three month periods ended July 31, 1997 as compared to the same
periods of 1996. The increases were due principally to increased material and
overhead costs and the increased costs in the Company's newer markets
resulting from the relatively less efficient construction in those markets.
The cost increases were partially offset by the lower amount of inventory
writedowns recognized in 1997($1.3 million for the nine month period and $.1
million in the three month period) as compared to 1996 ($2.6 million in the
nine month period and $1.1 million in the three month period).
Selling, general and administrative expenses ("SG&A") in the nine month and
three month periods ended July 31, 1997 increased over the comparable periods
of 1996 by $10.6 million or 21% and $4.1 million or 23%, respectively. These
increases were primarily attributable to the higher level of spending due to
the increased number of communities which the Company was operating during the
1997 periods as compared to the same periods of 1996 and the Company's
geographic expansion. The Company believes that SG&A, as a percentage of
revenues, will decrease for the full 1997 fiscal year as compared to the nine
months ended July 31, 1997 due to revenues increasing at a faster pace than
SG&A expenses.
Interest expense is determined on a specific home-by-home basis and will vary
depending on many factors including the period of time that the land under the
home was owned, the length of time that the home was under construction, and
the interest rates and the amount of debt carried by the Company in proportion
to the amount of its inventory during those periods. As a percentage of
revenues, interest expense was lower in the nine month and three month periods
of 1997 as compared to 1996.
Income taxes for the nine month periods ended July 31, 1997 and 1996 were
provided at effective rates of 36.9% and 37.4%, respectively. For the three
month periods ended July 31, 1997 and 1996, income taxes were provided at an
effective rate of 37.4% in each period. The lower effective tax rate in the
nine month period of 1997 was due principally to non-taxable investment income
the Company earned in the first six months of fiscal 1997. The Company does
not expect to have this income in the fourth quarter of 1997 due to the
Company's use of its available funds to redeem its 10 1/2% Senior Subordinated
Notes in March 1997 and its acquisition of inventory.
EXTRAORDINARY LOSS FROM EXTINGUISHMENT OF DEBT
In January 1997, the Company called for redemption on March 15, 1997 of all of
its outstanding 10 1/2% Senior Subordinated Notes due 2002 at 103% of
principal amount plus accrued interest. The redemption resulted in an
extraordinary loss in the first quarter of fiscal 1997 of $2,772,000, net of
$1,659,000 of income taxes. The loss represents the redemption premium and a
write-off of unamortized deferred issuance costs. The redemption and related
refinancing will result in the reduction of the Company's interest costs of
approximately $2 million annually. (See - "Capital Resources and Liquidity"
below).
CAPITAL RESOURCES AND LIQUIDITY
Funding for the Company's residential development activities has been provided
by cash flows from operations, unsecured bank borrowings and the public debt
and equity markets.
The Company has a $250 million unsecured revolving credit facility with
fifteen banks which extends through June 2002. The facility reduces by 50% in
June 2000 unless extended as provided for in the agreement. As of July 31,
1997, the Company had $60 million of loans and approximately $28.8 million of
letters of credit outstanding under the facility.
In November 1996, the Company issued $100 million of 8 3/4% Senior
Subordinated Notes due 2006. In addition, in March 1997, the Company borrowed
$50 million from two banks for a five year period at 7.72%. The Company used a
portion of the proceeds from these sources to redeem the $87.8 million
principal amount of its 10 1/2% Senior Subordinated Notes due 2002 in
March 1997.
In April 1997, Standard & Poor's Rating Group upgraded the Company's Corporate
Credit Rating to BBB- and the ratings on its approximately $220 million of
senior subordinated notes to BB+.
The Company believes that it will be able to continue to fund its activities
through a combination of operating cash flow and existing sources of credit.
HOUSING DATA
<TABLE>
<CAPTION>
Nine Months Three Months
Ended July 31 Ended July 31
1997 1996 1997 1996
Period ended July 31:
<S> <C> <C> <C> <C>
# of homes closed 1,710 1,391 622 585
# of homes contracted 1,952 1,795 638 558
Sales value of homes
contracted (in thous.) $778,761 $653,160 $250,636 $206,135
July 31, Oct.31 July 31, Oct. 31
1997 1996 1996 1995
# of homes in backlog 1,609 1,367 1,482 1,078
Sales value of homes in
backlog (in thous.) $653,813 $526,194 $554,761 $400,820
</TABLE>
PART II. Other Information
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities
On June 12, 1997, the Board of Directors of the Company adopted a
Stockholder Rights Plan providing that one right (a "Right") shall be
attached to each share of the Company's common stock (the "Common Stock").
The description and terms of the Rights are set forth in the Rights
Agreement (the "Rights Agreement"), dated as of June 12, 1997, between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent. Each
Right entitles the registered holder to purchase from the Company a unit
consisting of one one-thousandth of a share of Series A Junior
Participating Preferred Stock of the Company at a purchase price of $100
per unit. Initially the Rights will be attached to all Common Stock
certificates and no separate Rights certificates will be distributed. The
Rights will separate from the Common Stock and a distribution date will
occur upon the earlier of ten days(or such later date as the Board of
Directors of the Company may determine) following a public announcement
that a person or group of affiliated persons has acquired beneficial
ownership of 15% or more of the outstanding shares of Common Stock or ten
business days following the commencement of a tender offer that would
result in a person or group benefically owning 15% or more of such
outstanding shares of Common Stock. The Rights are not excisable until the
distribution date and will expire at the close of the business on July 11,
2007. In the event any person or group (other than certain exempted persons
acquires 15% or more of the then outstanding shares of Common Stock (unless
such acquisition is made pursuant to a tender offer for all outstanding
shares, at a price determined by a majority of the independent directors
of the Company who are Continuing Directors (as defined in the Rights
Agreement), each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock having a value equal to two times the
exercise price of the Right. At any time until ten days following such
stock acquisition date, the Company may redeem the Rights at a price of
$.001 per Right.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 4. Rights Agreement dated as of June 12, 1997, by and
between the Company and ChaseMellon Shareholder Service,
L.L.C. as Rights Agent (incorporated herein by reference
to Exhibit 1 to the Company's Registration Statement on
Form 8-A dated June 20,1997).
Exhibit 11. Statement Regarding Computation of Per Share Earnings.*
Exhibit 27. Financial Data Schedule.*
*Filed electronically herewith.
(b) Reports on Form 8-K
Report on Form 8-K dated June 12, 1997 related to the Company's
Board of Directors adoption of a Stockholder Rights Plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOLL BROTHERS, INC.
(Registrant)
Date: September 8, 1997 By: /s/ Joel H. Rassman
Joel H. Rassman
Senior Vice President,
Treasurer and Chief
Financial Officer
Date: September 8, 1997 By: /s/ Joseph R. Sicree
Joseph R. Sicree
Vice President -
Chief Accounting Officer
(Principal Accounting Officer)
<TABLE>
<CAPTION>
<PAGE>
TOLL BROTHERS, INC. & SUBSIDIARIES EXHIBIT 11
STATEMENT: COMPUTATION OF EARNINGS PER SHARE
Nine Months Nine Months
ended July 31 ended July 31
1997 1996
Income before extraordinary loss
<S> <C> <C>
per income statement $43,250,000 $31,659,000
Addback: Interest on convertible
debentures, net of income taxes 1,134,000 1,164,000
Income before extraordinary loss
(Fully-diluted) $44,384,000 $32,823,000
Per share:
Primary $ 1.24 $ .92
Fully-diluted $ 1.19 $ .89
PRIMARY SHARES:
Weighted average shares outstanding 34,089,902 33,852,173
Common stock equivalents - stock options 686,922 644,004
TOTAL 34,776,824 34,496,177
FULLY-DILUTED SHARES:
Weighted average shares outstanding 34,089,515 33,852,173
Common stock equivalents - stock options 884,992 653,898
Shares issuable on conversion of
subordinated debentures 2,344,782 2,404,382
TOTAL 37,319,289 36,910,453
Three Months Three Months
ended July 31 ended July 31
1997 1996
Income before extraordinary loss
per income statement $16,550,000 $ 15,413,000
Addback: Interest on convertible
debentures, net of income taxes 378,000 379,000
Income before extraordinary loss
(Fully diluted) $16,928,000 $ 15,792,000
Earnings per share:
Primary $ 0.47 $ 0.45
Fully Diluted $ 0.45 $ 0.43
PRIMARY SHARES:
Weighted average shares outstanding 34,199,823 33,908,619
Common stock equivalents - stock options 655,716 526,355
TOTAL 34,855,539 34,434,974
FULLY-DILUTED SHARES:
Weighted average shares outstanding 34,199,823 33,908,619
Common stock equivalents - stock options 877,288 526,290
Shares issuable on conversion of
subordinated debentures 2,344,782 2,344,782
TOTAL 37,421,893 36,779,691
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000794170
<NAME> TOLL BROTHERS, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JULY -31-1997
<CASH> 27,041
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 894,244
<CURRENT-ASSETS> 0
<PP&E> 33,139
<DEPRECIATION> 18,141
<TOTAL-ASSETS> 968,185
<CURRENT-LIABILITIES> 0
<BONDS> 219,956
<COMMON> 342
0
0
<OTHER-SE> 359,221
<TOTAL-LIABILITY-AND-EQUITY> 968,185
<SALES> 651,142
<TOTAL-REVENUES> 653,552
<CGS> 504,235
<TOTAL-COSTS> 565,042
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,975
<INCOME-PRETAX> 68,535
<INCOME-TAX> 25,285
<INCOME-CONTINUING> 43,250
<DISCONTINUED> 0
<EXTRAORDINARY> 2,772
<CHANGES> 0
<NET-INCOME> 40,478
<EPS-PRIMARY> 1.19
<EPS-DILUTED> 1.12
</TABLE>
