1. Toll Brothers, Inc.
Paul Goncalves Jr.
pgoncalv@indiana.edu
Reese Fund 2011

2. Toll Brothers: Target Price $38
Market Stats Investment Thesis
• Current Price: $21.72 • 2-Year investment story
• Market Cap: $3.49 billion • The housing market is
• 2010 Sales: $1.494 billion operating at unsustainably low
levels
• 2010 Net Income: ($3 million)
• A modest return to historical
• P/B: 1.36x
norms implies significant
upside for homebuilders
• Toll Brothers offers the best
risk/reward profile in the sector
2

3. Company Profile
• Founded in 1968
• Single-family
detached homes,
townhomes, and
urban condo
projects
• High-end
customizations
• Serves move-up,
empty nest, and
active adult buyers
• Operates in 19
states
• 2010 ASP
$565,000
3

4. Difficult backdrop for homebuilders
• New home sales 76% since
2005
• 25% of American homeowners
underwater
• “Shadow Inventory” could add
several years of excess supply
• 9% (headline) unemployment
• New Home Sales at
generational lows
• Market projections vary among
industry analysts
4

5. Toll Brothers not immune to …but will exit a stronger
housing downturn… company
Homes Delivered Revenue Net Income
2005 2006 2007 2008 2009 2010 • Increased
8769 8601
$10,000
cash, decreased debt
6687 6629
$8,000
• Conservative asset
$5,759
$6,117
$6,000 valuation
• Land acquisitions at
$4,649
$4,000
$3,149 2965
$1,755
2642
distressed prices
$1,495 $2,000
• Strategic uses of
cash – Gibraltar
$0
$806 $687 $36 -$3
-$298
-$756
-$2,000
($ millions)
5

6. Current Housing Production is Unsustainable
Annual Household Formation 1,250,000
Ownership Rate 67%
+Annual Removals 350,000
- Manufactured Housing 100,000
- Homes build on private lots 25%
Total Demand 815,625
• Distressed inventory is currently drawing demand away from new homes
• New Home Inventory/Household Ratio
o 30-Year Average: 3.42x
o Current: 1.60x
• CURRENT PACE WILL NOT SUPPORT FUTURE HOUSING DEMAND
6

7. Forecasting a modest recovery by 2012…
Assumptions New Home Sales
New home
Households NHI/HH NHS/NHI
Inventory
• Excess inventory will Year (thousands) (thousands) (millions) (per mm HH)
2008 377 353 117.18 3.01x 1.07x
be worked off due to
historic affordability 2009 356 231 117.54 1.97x 1.54x
• Total U.S. Households 2010 290 190 118.79 1.60x 1.53x
= 121million 2011 410 234 120.04 1.95x 1.75x
• NHI/HH: 2.25x 2012 519 273 121.29 2.25x 1.90x
• 6.3 Months Supply 2013 657 337 122.54 2.75x 1.95x
• U.S. New Homes Sales
= 519,000 units
7

8. Why Toll?
• Demographics
support demand for
high-end housing
• Monopoly power in its
segment
• Margin and cash flow
advantage
• Impending housing
recovery is not yet
priced into stock
8

9. Favorable demographics support thesis
• Unemployment among households earning
Unemployment >$150,000 only 3%
• Households earning >$100,000 +176% since
Households 1980 (vs. 43% increase in total households)
• Mortgage borrowing contracting
Credit • Industry professionals indicate credit
available, but standards high
9

10. Monopoly Power
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
• Toll Brothers has an effective monopoly in high-end housing among publicly-traded
homebuilders
• Other homebuilders will be forced to compete on price and suffer margin pressure
• TOL has already returned to single-digit cancelation rate, while competitors elevated
10

11. Toll Brothers Should Generate Superior Margins and FCF
Favorable Demographics Support Demand
Pricing Power
Intense competition among low/mid-level
Low-end competes with foreclosures
builders for constrained buyers
Margin Outperformance
TOL historical 200+bp advantage in margin
Free Cash Flow Advantage
Strategic acquisition of land
Continued reduction of debt Share repurchase
and distressed assets
11

12. The Housing Recovery’s Effect on TOL
Toll Brothers 2009 2010 2011 2012 2013 2014
Revenue & Expense Projections
U.S. Home Sales
U.S. New Home Sales (thousands) 356 290 410 519 657 743
TOL Mkt Share 0.83% 0.91% 0.70% 0.75% 0.90% 0.90%
TOL Homes Sold (thousands) 2.97 2.64 2.87 3.89 5.91 6.68
YoY Growth -55.3% -10.9% 8.5% 35.6% 52.1% 13.0%
Average Selling Price (thousands) $592.0 $565.8 $551.6 $557.1 $568.3 $579.6
Revenue (millions) $1,755.3 $1,494.8 $1,581.7 $2,166.6 $3,360.7 $3,874.6
Cost of Revenue
COR (ex impairment charges) $1,020.5 $1,152.5 $1,265.4 $1,657.4 $2,554.2 $2,944.7
Inventory Impairment Charges $465.4 $115.3 $41.7 $5.3 $3.8 $4.0
% of inventory 14.6% 3.6% 1.3% 0.2% 0.1% 0.1%
GM (ex impairment charges) 41.9% 22.9% 20.0% 23.5% 24.0% 24.0%
Total COR $1,485.9 $1,267.8 $1,307.1 $1,662.7 $2,558.0 $2,948.7
Total Gross Margin 15.3% 15.2% 17.4% 23.3% 23.9% 23.9%
12

13. Toll Brothers Inc. - DCF Valuation
Valuation Analysis
($ in millions)
Recent Price $20.72 PV of FCF $8,527
Beta 1.38 -Debt $1,412
• 2012E Equity: Risk Free 3.32% Equity Value $7,115
$3.15b Mkt. Risk Prem
Cost of Equity
7.0%
12.98%
Shares Outstanding
Implied Price
168
$42.42
Mkt. Val. of Equity $3,475 Current Price $20.72
• DCF: $42 (2.2x Debt
Tax Rate
$1,412
35%
Potential Upside
Implied 2012E P/B
105%
2.26x
2012P/B) Cost of Debt 6.09%
WACC 10.37%
LT Growth Rate 3.00%
• Conservative
FY2011E FY2012E FY2013E FY2014E Terminal
valuation of 2.0x Net Income $46.4 $299.5 $510.4 $614.3 $632.8
2012E BV yields +Dep. & Amort $10.2 $8.8 $10.1 $12.8 $13.2
+ After Tax Int $18.4 $15.1 $11.6 $10.7 $11.1
$38, +83% upside -Chg Working Cap -$158.6 -$159.9 -$188.8 -$157.2 -$161.9
-CapEx $10.3 $21.7 $33.6 $38.7 $39.9
FCF $223.3 $461.6 $687.3 $756.3 $779.0
$10,564.3
Price/BV Valuation Equity P/B Price Upside
2011 $3,161.7 1.50x $28.28 36%
2012 $3,150.5 2.02x $37.93 83%
13

14. Comparison Valuation
Long-Term Average Current Premium
Ticker Mkt. Cap. Price/Book Price/Book (Discount)
DHI $4,256.06 2.07x 1.55x -25%
LEN $3,681.36 0.84x 1.44x 71%
PHM $3,268.05 1.14x 1.37x 20%
MDC $1,490.06 0.76x 1.40x 83%
KBH $1,189.61 1.59x 1.80x 13%
RYL $834.33 1.12x 1.48x 33%
MTH $779.70 1.37x 1.47x 7%
SPF $514.47 1.00x 1.06x 6%
BZH $450.72 0.98x 1.03x 5%
HOV $366.67 1.22x Neg. Neg.
TOL $3,490.01 2.02x 1.32x -35%
TOL beta of 1.32 – will add beta to portfolio with limited downside risk
14

15. Risks
2-Year investment horizon
Lingering shadow inventory could depress
prices and dampen demand for new homes
Recession – unemployment and credit
constraints
Additional inventory write-downs
15

16. Conclusion
• Only a modest housing recovery
is needed in order to make the
story work
• Demographics, market position,
margin and cash flow give Toll
Brothers an edge over other
homebuilders
• Cheap valuation provides
attractive entry point for TOL
16

17. Analyst Conflicts
Analyst
Ownership • NO
Family • NO
Other Beneficial
Relationship • NO
17

18. Appendix
Company Information Housing Market Data
Debt Profile Existing Home Sales vs. New Home
Land & Cancellation Data Sales
Geographic Mix Existing Home Inventory vs. New
Balance Sheet Home Inventory-1
Income Statement Existing Home Inventory vs. New
Cash Flow Home Inventory-2
Sensitivity Analysis Affordability Index
Regional Presence 30-Year Mortgage Historical
Buyer Profile Industry Impairments
Management Profiles Harvard JCHS Study
Top Shareholders Mortgage Borrowing
Gibraltar Details Delinquencies
Highlights from Company Call What a housing recovery might look
Inventory Breakdown like?
Land Purchased 2010 Case-Shiller
Alternative Housing Stocks New Home Sales
Historical P/B & Recessions
18

19. Debt Profile Total
Company Debt/Equity Credit Rating
• No major maturities DR Horton 83% BB-
before 2013
Lennar 147% B+
• Least leverage among
publicly-traded PulteGroup 190% BB-
homebuilders MDC Holdings 123% BBB-
• 1 of 2 investment
grade credits in comp KB Home 281% B+
set Ryland Group 169% BB-
Meritage Homes 121% B+
Maturity Schedule ($mm)
Standard Pacific 282% B
2011 $102.9
Beazer Homes 305% CCC
2012 $15.7
2013 $346.4 Hovnanian Neg. CCC-
2014 $270.0 Toll Brothers 67% BBB-
2015 $300.7
Return to Appendix
19

20. Comparison among homebuilders
Land Held for Future
Company ASP FY2010 Development Cancellation Rate
DR Horton Inc. $206,100 $2,155.40 26%
Lennar Corp. $243,000 $1,990.43 18%
PulteGroup, Inc. $258,000 $1,135.20 23%
MDC Holdings Inc. $277,800 $262.86 24%
KB Home $214,500 $1,696.00 25%
Ryland Group Inc. $240,000 $62.10 22%
Meritage Homes Corporation $238,400 $449.20 24%
Standard Pacific Corp. $306,000 $564.52 18%
Beazer Homes USA Inc. $221,700 $419.10 26%
Hovnanian Enterprises Inc. $280,715 $348.50 21%
Toll Brothers $565,773 $924.0 7%
TOL has already returned to historical cancellation rates
Return to Appendix
20

21. Toll Brothers 2009 2010 2011 2012 2013 2014
Revenue & Expense Projections
Revenue by Region
North
Units Delivered (thousands)
% of total
0.98
33.2%
0.77
29.3%
0.86
30.0%
1.17
30.0%
1.77
30.0%
2.01
30.0%
Projected
Average Selling Price (thousands)
YoY Growth
Total North Revenue (mil)
$595.5
-13.4%
$585.40
$526.7
-11.5%
$407.70
$500.4
-5.0%
$430.46
$505.4
1.0%
$589.63
$515.5
2.0%
$914.63
$525.8
2.0%
$1,054.48
Geographic Mix
Mid-Atlantic
Units Delivered (thousands) 0.86 0.88 0.95 1.28 1.95 2.21 • Mix favors North and
% of total 29.1% 33.2% 33.0% 33.0% 33.0% 33.0%
Average Selling Price (thousands) $571.6 $557.6 $540.9 $546.3 $557.3 $568.4 Mid-Atlantic Regions
YoY Growth -6.1% -2.4% -3.0% 1.0% 2.0% 2.0%
Total Mid-Atlantic Revenue (mil) $492.70 $488.50 $511.84 $701.10 $1,087.55 $1,253.83
South
Units Delivered (thousands) 0.54 0.50 0.52 0.70 1.06 1.20
% of total 18.3% 18.8% 18.0% 18.0% 18.0% 18.0%
Average Selling Price (thousands) $529.8 $530.7 $528.1 $533.4 $544.0 $554.9
YoY Growth 4.2% 0.2% -0.5% 1.0% 2.0% 2.0%
Total South Revenue (mil) $288.20 $264.30 $272.55 $373.34 $579.12 $667.66
West
Units Delivered (thousands) 0.58 0.49 0.54 0.74 1.12 1.27
% of total 19.4% 18.7% 19.0% 19.0% 19.0% 19.0%
Average Selling Price (thousands) $675.3 $676.7 $673.3 $680.1 $693.7 $707.5
YoY Growth -21.3% 0.2% -0.5% 1.0% 2.0% 2.0%
Total West Revenue (mil) $389.00 $334.30 $366.84 $502.48 $779.45 $898.63
Total Units 2.97 2.64 2.87 3.89 5.91 6.68
Average Selling Price $592.0 $565.8 $551.6 $557.1 $568.3 $579.6
Total Revenue $1,755.3 $1,494.8 $1,581.7 $2,166.6 $3,360.7 $3,874.6
North 33% 27% 27% 27% 27% 27%
Mid-Atlantic 28% 33% 32% 32% 32% 32% Based on current proportion of
South 16% 18% 17% 17% 17% 17% inventory by region
West 22% 22% 23% 23% 23% 23%
21 Return to Appendix

22. TOL – Balance Sheet
Toll Brothers Inc. - Balance Sheet
($ in millions) FY 2008 FY 2009 FQ1 2010 FQ2 2010 FQ3 2010 FQ4 2010 FY 2010 FQ1 2011E FQ2 2011E FQ3 2011E FQ4 2011E FY 2011E FY 2012E
Assets
Cash & Near Cash Items $1,633.5 $1,807.7 $1,568.0 $1,362.0 $1,434.6 $1,039.0 $1,039.0 $906.0 $622.7 $1,037.5 $810.2 $810.2 $716.6
Restricted Cash $0.0 $0.0 $0.0 $0.0 $0.0 $60.9 $60.9 $61.0 $61.0 $61.0 $61.0 $61.0 $0.0
Short-Term Investments $0.0 $101.0 $186.5 $186.0 $206.0 $197.9 $197.9 $150.6 $132.9 $229.7 $243.6 $243.6 $195.0
Receivables $163.0 $301.0 $305.5 $338.9 $203.3 $332.2 $332.2 $134.4 $131.8 $290.0 $369.1 $369.1 $166.2
Inventories $4,127.5 $3,183.6 $3,223.9 $3,321.0 $3,256.6 $3,241.7 $3,241.7 $3,128.2 $3,163.4 $3,198.5 $3,339.1 $3,339.1 $3,541.9
Customer Deposits Held in Escrow $18.9 $17.7 $15.0 $28.9 $24.6 $21.4 $21.4 $21.5 $28.5 $41.8 $44.3 $44.3 $32.5
Total Current Assets $5,942.9 $5,411.0 $5,298.9 $5,236.8 $5,125.2 $4,893.1 $4,893.1 $4,401.8 $4,140.3 $4,858.5 $4,867.3 $4,867.3 $4,652.2
Long-Term Investments $151.8 $152.8 $154.3 $170.5 $193.5 $198.4 $198.4 $118.3 $123.4 $229.7 $310.0 $310.0 $151.7
Net Fixed Assets $86.5 $70.4 $66.6 $82.2 $79.5 $79.9 $79.9 $79.4 $76.4 $78.3 $80.0 $80.0 $92.9
Deferred Tax Assets $405.7 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $392.9 $392.9 $288.1
Total Long-Term Assets $643.9 $223.3 $221.0 $252.7 $273.0 $278.4 $278.4 $197.7 $199.8 $307.9 $783.0 $783.0 $532.7
Total Assets $6,586.8 $5,634.3 $5,519.9 $5,489.5 $5,398.2 $5,171.5 $5,171.5 $4,599.5 $4,340.0 $5,166.4 $5,650.3 $5,650.3 $5,184.8
Liabilities
Loans Payable $613.6 $472.9 $468.2 $433.2 $410.4 $94.5 $94.5 $116.2 $87.1 $130.7 $101.7 $101.7 $92.4
Accounts Payable $134.8 $79.1 $77.9 $97.2 $89.2 $91.7 $91.7 $63.9 $47.9 $95.9 $111.8 $111.8 $129.3
Accrued Expenses $738.6 $640.2 $626.2 $618.9 $576.2 $570.3 $570.3 $418.3 $352.9 $549.0 $549.0 $549.0 $415.7
Income Taxes Payable $202.2 $174.6 $175.8 $179.7 $133.4 $162.4 $162.4 $75.3 $66.4 $146.1 $155.0 $155.0 $108.3
Total Current Liabilities $1,689.3 $1,366.8 $1,348.2 $1,329.0 $1,209.2 $918.9 $918.9 $673.6 $554.4 $921.7 $917.5 $917.5 $745.7
Senior Notes $1,143.4 $1,587.6 $1,588.1 $1,588.6 $1,553.6 $1,544.1 $1,544.1 $1,411.7 $1,411.7 $1,411.7 $1,411.7 $1,411.7 $1,163.9
Senior Subordinated Notes $343.0 $47.9 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Mortgage Company Warehouse Loan $37.9 $27.0 $15.5 $30.0 $47.3 $72.4 $72.4 $41.8 $23.5 $47.1 $54.9 $54.9 $41.6
Customer Deposits $135.6 $88.6 $82.2 $93.5 $85.9 $77.2 $77.2 $104.6 $52.3 $156.9 $104.6 $104.6 $83.1
Total Long-Term Liabilities $1,659.9 $1,751.2 $1,685.9 $1,712.1 $1,686.7 $1,693.6 $1,693.6 $1,558.1 $1,487.5 $1,615.6 $1,571.1 $1,571.1 $1,288.6
Total Liabilities $3,349.2 $3,118.0 $3,034.0 $3,041.1 $2,895.9 $2,612.5 $2,612.5 $2,231.7 $2,041.9 $2,537.3 $2,488.6 $2,488.6 $2,034.3
Shareholders' Equity $3,237.7 $2,516.3 $2,485.9 $2,448.4 $2,502.3 $2,558.9 $2,558.9 $2,367.8 $2,298.1 $2,629.1 $3,161.7 $3,161.7 $3,150.5
Return to Appendix
22

23. TOL – Income Statement
Toll Brothers Inc.- Income Statement
FQ1 FQ2 FQ4 FQ1 FQ2 FQ3 FQ4
($ in millions) FY 2008 FY 2009 2010 2010 FQ3 2010 2010 FY 2010 2011E 2011E 2011E 2011E FY 2011E FY 2012E
Revenue $3,148.2 $1,755.3 $326.7 $311.3 $454.2 $402.6 $1,494.8 $268.9 $237.3 $522.0 $553.6 $1,581.7 $2,166.6
Cost of Goods Sold $3,119.8 $1,951.3 $317.8 $305.7 $392.4 $367.2 $1,383.1 $261.4 $196.1 $392.1 $457.5 $1,307.1 $1,662.7
Gross Margin 0.9% -11.2% 2.7% 1.8% 13.6% 8.8% 7.5% 2.8% 17.4% 24.9% 17.4% 17.4% 23.3%
Selling, General & Admin
Expense $429.9 $313.2 $67.3 $59.5 $67.2 $69.2 $263.2 $94.9 $71.2 $47.5 $23.7 $237.3 $216.7
SG&A as % of Revenue 13.7% 17.8% 20.6% 19.1% 14.8% 17.2% 17.6% 35.3% 30.0% 9.1% 4.3% 15.0% 10.0%
Interest Expense $0.0 $7.9 $7.3 $6.2 $5.1 $4.2 $22.8 $7.1 $7.1 $7.1 $7.1 $28.2 $23.3
Int. Exp as % of revenue 0.0% 0.5% 2.2% 2.0% 1.1% 1.0% 1.5% 2.6% 3.0% 1.4% 1.3% 2.0% 2.0%
Goodwill Impairment $3.2 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Operating Income -$404.8 -$517.2 -$65.6 -$60.2 -$10.5 -$37.9 -$174.3 -$94.5 -$37.0 $75.3 $65.3 $9.1 $263.9
Operating Margin -12.9% -29.5% -20.1% -19.3% -2.3% -9.4% -11.7% -35.1% -15.6% 14.4% 11.8% 0.6% 12.2%
Income (Loss) from Unconsol.
Ent. -$186.4 -$7.5 $0.4 $1.3 $3.2 $18.7 $23.5 $6.0 $6.0 $6.0 $6.0 $24.2 $25.4
Interest and Other Inc. $124.4 $41.9 $8.5 $7.2 $8.8 $10.3 $34.8 $4.0 $4.0 $4.0 $4.0 $15.8 $15.2
Expenses for Early Debt Ret. $0.0 -$13.7 $0.0 $0.0 -$0.7 -$0.5 -$1.2 -$0.7 -$0.7 -$0.7 -$0.7 -$2.6 -$5.0
Pretax Income -$466.8 -$496.5 -$56.8 -$51.8 $0.8 -$9.5 -$117.2 -$85.2 -$27.7 $84.7 $74.7 $46.4 $299.5
Income Tax Expense (Benefit) -$169.0 $259.4 -$16.0 -$11.4 -$26.5 -$59.9 -$113.8 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Tax Rate 36.2% -52.2% 28.2% 22.0% -3219.9% 633.3% 97.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Net Income -$297.8 -$755.9 -$40.8 -$40.4 $27.3 $50.5 -$3.3 -$85.2 -$27.7 $84.7 $74.7 $46.4 $299.5
Basic Weighted Avg Shares 158.7 161.5 165.2 165.4 165.8 166.3 165.7 $166.1 $166.1 $166.0 $166.0 $166.0 $166.1
as % of Diluted Shares 100% 100% 100% 100% 99% 99% 99% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0%
Basic EPS -$1.88 -$4.68 -$0.25 -$0.24 $0.16 $0.30 -$0.02 -$0.51 -$0.17 $0.51 $0.45 $0.28 $1.80
Diluted Weighted Avg Shares 158.7 161.5 165.2 165.4 167.7 167.8 166.5 $167.8 $167.7 $167.7 $167.7 $167.7 $167.8
Diluted EPS -$1.88 -$4.68 -$0.25 -$0.24 $0.16 $0.30 -$0.02 -$0.51 -$0.17 $0.50 $0.45 $0.28 $1.78
23 Return to Appendix

24. TOL – Cash Flow
Toll Brothers Inc.- Statement of Cash Flows
($ in millions) FY 2010 FQ1 2011E FQ2 2011E FQ3 2011E FQ4 2011E FY 2011E FY 2012E
Net Income -$3.3 -$85.2 -$27.7 $84.7 $74.7 $46.4 $299.5
Depreciation & Amortization $20.0 $2.4 $4.0 $2.3 $1.6 $10.2 $8.8
Inventory Impairment $115.3 $10.4 $10.4 $10.4 $10.4 $41.7 $5.3
Changes in Working Capital
Receivables -$31.2 $197.8 $2.6 -$158.2 -$79.1 -$36.8 $202.9
Inventories -$58.1 $113.5 -$35.1 -$35.1 -$140.6 -$97.4 -$202.7
Customer Deposits held in Escrow -$3.7 -$0.1 -$7.0 -$13.3 -$2.5 -$22.9 $11.8
Payables -$365.7 -$6.1 -$45.0 $91.5 -$13.1 $27.3 $8.2
Other ST Liabilities -$82.2 -$239.1 -$74.2 $275.8 $8.9 -$28.7 -$180.0
Other Non-Cash Adjustments $262.8
Cash From Operations -$146.3 -$6.4 -$172.0 $258.1 -$139.8 -$60.2 $153.7
Disposal of Fixed Assets $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Capital Expenditures -$4.9 -$1.9 -$0.9 -$4.2 -$3.3 -$10.3 -$21.7
Change in Investments $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Other Investing Activities -$146.6 -$11.4 -$11.4 -$11.4 -$11.4 -$45.7 $48.6
Cash From Investing Activities -$151.4 -$13.3 -$12.4 -$15.6 -$14.8 -$56.0 $26.9
Dividends Paid $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0
Annual Dividend $0.0 $0.0 $0.0
Change in Short-Term Borrowings -$389.3 $21.7 -$29.0 $43.6 -$29.0 $7.2 -$9.3
Change in Long-Term Borrowings -$94.0 -$132.4 $0.0 $0.0 $0.0 -$132.4 -$247.8
Shares Issued $12.5 $3.5 $3.5 $3.5 $3.5 $14.0 $15.2
Shares Repurchased -$0.6 -$2.8 -$2.8 -$2.8 -$2.8 -$11.2 -$7.6
Other Financing Activities $0.3 -$3.1 -$70.6 $128.1 -$44.4 $9.9 -$24.8
Cash from Financing Activities -$471.0 -$113.2 -$98.9 $172.4 -$72.8 -$112.5 -$274.3
Beginning Cash Balance $1,807.7 $1,039.0 $906.0 $622.7 $1,037.5 $1,039.0 $810.2
Ending Cash Balance $1,039.0 $906.0 $622.7 $1,037.5 $810.2 $810.2 $716.6
24 Return to Appendix

25. Valuation Sensitivity
WACC-LTG Sensitivity
WACC
$42.42 7.00% 8.00% 9.00% 10.00% 11.00%
1.00% $59.38 $49.12 $41.44 $35.48 $30.71
LT Growth
2.00% $70.88 $57.05 $47.17 $39.78 $34.04
Rate
3.00% $88.12 $68.12 $54.81 $45.31 $38.19
4.00% $116.82 $84.73 $65.49 $52.67 $43.52
5.00% $174.18 $112.38 $81.49 $62.96 $50.62
Price/Book Value Sensitivity
Book Value
$37.93 $2,500 $3,500 $4,000 $4,500 $5,000
1.0x $14.90 $20.86 $23.84 $26.82 $29.80
Price/Book
1.5x $22.35 $31.29 $35.76 $40.23 $44.70
Multiple
2.0x $29.80 $41.72 $47.68 $53.64 $59.60
2.5x $37.25 $52.15 $59.60 $67.05 $74.50
3.0x $44.70 $62.58 $71.52 $80.46 $89.40
3.5x $52.15 $73.01 $83.44 $93.87 $104.31
25 Return to Appendix

26. Toll Brothers’ Housing Presence
North Mid-Atlantic South West
Massachusetts Pennsylvania Texas California
Connecticut Virginia Florida Nevada
New York Delaware South Carolina Arizona
New Jersey Maryland North Carolina Colorado
Minnesota
Illinois
Michigan
Return to Appendix
26

27. Home Price and Buyer Distribution
Distribution of Home Prices Buyer Financing
7% 10% 7%
14% 30%
<$300,000
$300,000-
699,999 63%
$700,000-
69% Jumbo
$999,999 Conforming
>$1,000,000
Cash
Return to Appendix
27

28. Mortgage Financing
• $433 million of mortgage commitments as of October
31, 2010
• Agreements with investors to acquire full amount
• 750 FICO scores and 30% equity low risk of put-back
Return to Appendix
28

29. Management
Robert Toll
• Chairman and founder
• Started firm in 1968
Douglas Yearley
• CEO
• Joined firm in 1990
Zvi Barzilay
• President, COO
• Joined firm in 1980
Martin Connor
• CFO, Treasurer
• Joined in 2008 after 20 years at E&Y
Return to Appendix
29

30. Top Shareholders
Holder Percentage Owned
Fidelity Management Co. 14.87%
Robert I. Toll 8.45%
Wellington MgmtCo. 4.65%
Franklin Mutual Advisers 3.24%
Keybank 3.16%
Vanguard Group 3.11%
Bruce E. Toll 3.01%
•Insiders own 17% of company
Return to Appendix
30

31. Gibraltar Capital and Asset Management LLP
• Formed July 2010 to invest in distressed real estate properties and
assets
• AmTrust Portfolio Acquisition: $1.7b of distressed loans and REO
o 50% FDIC interest-free 7 year loan
o 30% FDIC equity
o 20% Private Equity
 Oaktree Asset Mgmt (79%)
 Toll Brothers (20%) – Co-Manager
 Milestone (1%) – Co-Manager
• Toll does not expect meaningful contribution to earnings until post-
2011
Return to Appendix
31

32. Highlights from Call with Management
• Gross margin ex-incentives increased due to additional throughput per
community
• Company is actively seeking more properties along the Boston-D.C.
corridor
• Company believes it is picking up market share in the markets in which
it operates
• Company has contracts in place on raw materials, but believes it can
contract labor on as-needed basis
• Current overhead can support production gains of 15-20% without
adding to cost structure
Return to Appendix
32

33. Inventory Breakdown
2010 2009
Land Controlled $31,899 $60,611
Land Owned $923,972 $775,083
Operating $2,285,854 $2,347,872
Communities
Total $3,241,745 $3,183,566
Return to Appendix
33

34. Land Purchases in 2010
Region Number of Purchased Lots Dollars Spent
Communities
North 14 1,649 $96,000,000
Mid-Atlantic 11 1,467 $110,000,000
South 48 1,676 $123,000,000
West 16 1,411 $89,000,000
Total 89 6,203 $418,000,000
Return to Appendix
34

35. Alternative Housing Plays
Home Depot
Lowe’s (LOW) NVR (NVR)
(HD)
• 2011 P/E: 19 • 2011 P/E: 18 • 2.6x P/B
• Avg. P/E: 15 • Avg. P/E: 15 • 2011 P/E: 25
• 1.07 Beta • 1.15 Beta • +25% gain
since 12/1/10
None offer same upside potential as TOL Return to Appendix
35

36. Historical Book Value and Recessions 1985-2010
4
3.5
3
2.5
2
Recession
TOL Book Value
1.5
1
0.5
0
Return to Appendix
36

37. 0
1000
2000
3000
4000
5000
6000
7000
8000
3/1/2000
8/1/2000
1/1/2001
6/1/2001
11/1/2001
4/1/2002
9/1/2002
2/1/2003
7/1/2003
12/1/2003
5/1/2004
10/1/2004
3/1/2005
8/1/2005
1/1/2006
6/1/2006
11/1/2006
37
4/1/2007
9/1/2007
2/1/2008
7/1/2008
12/1/2008
5/1/2009
10/1/2009
3/1/2010
8/1/2010
0
200
400
600
800
1000
1200
1400
Existing vs. New Home Sales
SAAR
Existing
New Home
Sales SAAR
Home Sales
Return to Appendix

38. 10.00x
15.00x
20.00x
25.00x
0.00x
5.00x
Jan-99
May-99
Sep-99
Jan-00
May-00
Sep-00
Jan-01
May-01
Sep-01
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
38
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Existing home inventory/New Home Inventory
Return to Appendix

39. 100
200
300
400
500
700
600
0
1/1/1999
5/1/1999
9/1/1999
1/1/2000
5/1/2000
9/1/2000
1/1/2001
5/1/2001
9/1/2001
1/1/2002
5/1/2002
9/1/2002
1/1/2003
5/1/2003
9/1/2003
1/1/2004
5/1/2004
9/1/2004
1/1/2005
5/1/2005
9/1/2005
39
1/1/2006
5/1/2006
9/1/2006
1/1/2007
5/1/2007
9/1/2007
1/1/2008
5/1/2008
9/1/2008
1/1/2009
5/1/2009
9/1/2009
1/1/2010
5/1/2010
9/1/2010
0
1
2
3
4
5
0.5
2.5
3.5
4.5
1.5
Return to Appendix
Home
Existing
Inventory
Inventory
Existing Home Inventory vs. New Home Inventory
New Home

40. Housing is at its cheapest level in 30 years
Housing Affordability Index
200
180
160
140
120
100
80
Return to Appendix
40

41. 30-Year Mortgage Rate
9
8
7
6
5
4
3
2
1
0
Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10
Return to Appendix
41

42. Industry-wide impairment charges declining
$12,000
$10,959
$10,000
$8,000
$6,507
$6,000
$4,000
$2,298 $2,115
$2,000
$514 $232
$11 $13
$0
2003 2004 2005 2006 2007 2008 2009 2010
2003 2004 2005 2006 2007 2008 2009 2010
TOL $5.6 $7.5 $5.1 $152.0 $619.5 $645.0 $465.4 $115.3
($ in millions) Return to Appendix
42

43. Harvard JCHS Study
• 1.2-1.8 million new households created per year
• Oldest “baby-boomers” just turning 65, many in mid-50’s
• “Echo-boom” generation already larger than “baby boom”
• 2005-2009: homeownership rates fell twice as much for low-income
households compared to high-income households
• Low-end homes experienced price drops 50% greater than high-end
homes
Return to Appendix
43

44. 400000
600000
800000
1000000
1200000
1400000
200000
-600000
-400000
-200000
0
3/1/1980
1/1/1981
11/1/1981
9/1/1982
7/1/1983
5/1/1984
3/1/1985
1/1/1986
11/1/1986
9/1/1987
7/1/1988
5/1/1989
3/1/1990
1/1/1991
11/1/1991
9/1/1992
7/1/1993
44
5/1/1994
3/1/1995
1/1/1996
11/1/1996
9/1/1997
Still Negative
7/1/1998
5/1/1999
3/1/2000
1/1/2001
11/1/2001
9/1/2002
7/1/2003
Change in Mortgage Borrowing 1980-2010
5/1/2004
3/1/2005
1/1/2006
11/1/2006
9/1/2007
7/1/2008
5/1/2009
3/1/2010
Return to Appendix
Decline in Mortgage Borrowing Moderating, But

45. 0
1
2
3
4
5
6
7
8
3/1/1998
7/1/1998
11/1/1998
3/1/1999
7/1/1999
11/1/1999
3/1/2000
7/1/2000
11/1/2000
3/1/2001
7/1/2001
11/1/2001
3/1/2002
7/1/2002
11/1/2002
3/1/2003
7/1/2003
11/1/2003
3/1/2004
45
7/1/2004
11/1/2004
3/1/2005
7/1/2005
11/1/2005
3/1/2006
7/1/2006
11/1/2006
Prime Delinquencies as % of Total
3/1/2007
7/1/2007
11/1/2007
3/1/2008
7/1/2008
11/1/2008
3/1/2009
7/1/2009
11/1/2009
3/1/2010
Return to Appendix
Prime Delinquencies High, but Declining
7/1/2010

46. 0.5
1.5
3.5
4.5
2.5
0
1
2
3
4
5
1/1/1999
10/1/1999
7/1/2000
4/1/2001
1/1/2002
10/1/2002
7/1/2003
4/1/2004
1/1/2005
10/1/2005
7/1/2006
4/1/2007
1/1/2008
10/1/2008
7/1/2009
4/1/2010
1/1/2011
10/1/2011
7/1/2012
4/1/2013
46
1/1/2014
10/1/2014
7/1/2015
4/1/2016
1/1/2017
10/1/2017
7/1/2018
4/1/2019
1/1/2020
10/1/2020
0
100
200
300
400
500
600
700
New Home Inventory
Return to Appendix
Existing Home Inventory
What a Housing Recovery Might Look Like…

47. 100
150
200
250
50
0
1/1/2000
5/1/2000
9/1/2000
1/1/2001
5/1/2001
9/1/2001
1/1/2002
5/1/2002
9/1/2002
1/1/2003
5/1/2003
9/1/2003
1/1/2004
5/1/2004
9/1/2004
1/1/2005
47
5/1/2005
9/1/2005
2000-Present
1/1/2006
5/1/2006
9/1/2006
1/1/2007
5/1/2007
9/1/2007
S&P/Case-Shiller Home Price Index
1/1/2008
5/1/2008
9/1/2008
1/1/2009
5/1/2009
9/1/2009
1/1/2010
5/1/2010
Return to Appendix

48. 1000
1200
1400
200
400
600
800
0
3/1/2000
7/1/2000
11/1/2000
3/1/2001
7/1/2001
11/1/2001
3/1/2002
7/1/2002
11/1/2002
3/1/2003
7/1/2003
11/1/2003
3/1/2004
7/1/2004
11/1/2004
3/1/2005
48
7/1/2005
11/1/2005
3/1/2006
2000-Present
7/1/2006
New Home Sales
11/1/2006
3/1/2007
7/1/2007
11/1/2007
3/1/2008
7/1/2008
11/1/2008
3/1/2009
7/1/2009
11/1/2009
3/1/2010
7/1/2010
11/1/2010
Return to Appendix