Toll Brothers Inc. (TOL, Financial) filed Quarterly Report for the period ended 2009-04-30.
TOLL BROTHERS INC. designs builds markets and arranges financing for single-family detached and attached homes in middle and high income residential communities in thirteen staes and five regions around the country. The communities are generally located on land Co. has developed although due to the poor economic conditions during the early 1990's Co. has been able to acquire a number of fully approved parcels and often improved subdivisions. Toll Brothers Inc. has a market cap of $2.83 billion; its shares were traded at around $17.6 with and P/S ratio of 0.9.
Given the current business climate and the numerous uncertainties related to sales paces, sales prices, mortgage markets, cancellations, market direction and the potential for and magnitude of future impairments, it is difficult to provide guidance for fiscal 2009. Subject to the risks reported elsewhere in our reports filed with the SEC and the preceding uncertainties, based upon the deliveries made in the first six months of fiscal 2009, our backlog at April 30, 2009 and the pace of activity at our communities, we currently estimate that we will deliver between 2,200 and 2,800 homes in fiscal 2009 at an average sales price of between $590,000 and $620,000 per home. We believe that, as a result of continuing sales incentives given to our home buyers and slower sales per community, our cost of sales as a percentage of revenues, before impairment charges and write-downs, will be higher in fiscal 2009 than in fiscal 2008. Additionally, based on fiscal 2009s lower projected revenues, we expect our selling, general and administrative expenses, exclusive of interest, to be lower in total dollars in fiscal 2009 than in fiscal 2008, but higher as a percentage of revenues in fiscal 2009 than in fiscal 2008.
At April 30, 2009, our net federal deferred tax assets were $430.6 million. In accordance with the provisions of SFAS 109, we assess, on a quarterly basis, our ability to realize our federal deferred tax assets. Based on the more likely than not standard in SFAS 109 and the weight of available evidence, we do not believe a valuation allowance against our net federal deferred tax assets was necessary. At the current federal tax rate of 35%, we would require a combination of taxable loss carrybacks and future income of approximately $1.2 billion to realize the $430.6 million
For state tax purposes, due to past and projected losses in certain jurisdictions where we do not have carryback potential and/or cannot sufficiently forecast future taxable income, we have recognized a valuation allowance, net of a federal tax benefit, of $24.1 million in fiscal 2008 and an additional $4.2 million in the six-month period ended April 30, 2009. Future valuation allowances in these jurisdictions may continue if we believe we will not generate sufficient future taxable income to utilize these state deferred tax assets.
We have investments in and advances to various unconsolidated entities. At April 30, 2009, we had investments in and advances to these entities, net of impairment charges recognized, of $148.3 million and were committed to invest or advance $27.0 million (net of amounts accrued) of additional funds to certain of these entities if they require additional funding, At April 30, 2009, we had accrued $116.6 million for our commitments to all of our unconsolidated entities. In addition, we guarantee certain debt of a number of these unconsolidated entities on a several and pro-rata basis. At April 30, 2009, we guaranteed an aggregate of approximately $63.3 million (net of amounts that we have accrued) of debt relating to four joint ventures, which had aggregate borrowings of approximately $835.2 million.
In connection with certain land joint ventures to which we are a party, we executed completion guarantees and conditional repayment guarantees. The obligations under the completion guarantees and conditional repayment guarantees are several and not joint, and are limited to the Companys pro-rata share of the loan obligations of the respective joint ventures. At April 30, 2009, the maximum amount of the completion guarantees and conditional repayment guarantees (net of amounts that the Company has accrued) is estimated to be approximately $50.3 million, if any liability is determined to be due thereunder. The $50.3 million of these guarantees are included in the $63.3 million of guarantees disclosed above.
Read the The complete ReportTOL is in the portfolios of Arnold Van Den Berg of Century Management, Ron Baron of Baron Funds.
TOLL BROTHERS INC. designs builds markets and arranges financing for single-family detached and attached homes in middle and high income residential communities in thirteen staes and five regions around the country. The communities are generally located on land Co. has developed although due to the poor economic conditions during the early 1990's Co. has been able to acquire a number of fully approved parcels and often improved subdivisions. Toll Brothers Inc. has a market cap of $2.83 billion; its shares were traded at around $17.6 with and P/S ratio of 0.9.
Highlight of Business Operations:
Based on our experience during prior downturns in the housing industry, we believe that unexpected opportunities may arise in difficult times for those builders that are well-prepared. In the current challenging environment, we believe our strong balance sheet, liquidity and access to capital, our broad geographic presence, our diversified product lines, our experienced personnel and our national brand name all position us well for such opportunities now and in the future. At April 30, 2009, we had $1.96 billion of cash and cash equivalents on hand and approximately $1.34 billion available under our revolving credit facility which extends to March 2011. On April 13, 2009, we sold $400 million of 8.91% senior notes due 2017 and received $389.4 million of net proceeds from the sale. On April 28, 2009, we announced that we would redeem an aggregate of $293.0 million of senior subordinated notes due 2011, which was completed on May 28, 2009. We believe we have the resources available to fund attractive opportunities, should they arise.Given the current business climate and the numerous uncertainties related to sales paces, sales prices, mortgage markets, cancellations, market direction and the potential for and magnitude of future impairments, it is difficult to provide guidance for fiscal 2009. Subject to the risks reported elsewhere in our reports filed with the SEC and the preceding uncertainties, based upon the deliveries made in the first six months of fiscal 2009, our backlog at April 30, 2009 and the pace of activity at our communities, we currently estimate that we will deliver between 2,200 and 2,800 homes in fiscal 2009 at an average sales price of between $590,000 and $620,000 per home. We believe that, as a result of continuing sales incentives given to our home buyers and slower sales per community, our cost of sales as a percentage of revenues, before impairment charges and write-downs, will be higher in fiscal 2009 than in fiscal 2008. Additionally, based on fiscal 2009s lower projected revenues, we expect our selling, general and administrative expenses, exclusive of interest, to be lower in total dollars in fiscal 2009 than in fiscal 2008, but higher as a percentage of revenues in fiscal 2009 than in fiscal 2008.
At April 30, 2009, our net federal deferred tax assets were $430.6 million. In accordance with the provisions of SFAS 109, we assess, on a quarterly basis, our ability to realize our federal deferred tax assets. Based on the more likely than not standard in SFAS 109 and the weight of available evidence, we do not believe a valuation allowance against our net federal deferred tax assets was necessary. At the current federal tax rate of 35%, we would require a combination of taxable loss carrybacks and future income of approximately $1.2 billion to realize the $430.6 million
For state tax purposes, due to past and projected losses in certain jurisdictions where we do not have carryback potential and/or cannot sufficiently forecast future taxable income, we have recognized a valuation allowance, net of a federal tax benefit, of $24.1 million in fiscal 2008 and an additional $4.2 million in the six-month period ended April 30, 2009. Future valuation allowances in these jurisdictions may continue if we believe we will not generate sufficient future taxable income to utilize these state deferred tax assets.
We have investments in and advances to various unconsolidated entities. At April 30, 2009, we had investments in and advances to these entities, net of impairment charges recognized, of $148.3 million and were committed to invest or advance $27.0 million (net of amounts accrued) of additional funds to certain of these entities if they require additional funding, At April 30, 2009, we had accrued $116.6 million for our commitments to all of our unconsolidated entities. In addition, we guarantee certain debt of a number of these unconsolidated entities on a several and pro-rata basis. At April 30, 2009, we guaranteed an aggregate of approximately $63.3 million (net of amounts that we have accrued) of debt relating to four joint ventures, which had aggregate borrowings of approximately $835.2 million.
In connection with certain land joint ventures to which we are a party, we executed completion guarantees and conditional repayment guarantees. The obligations under the completion guarantees and conditional repayment guarantees are several and not joint, and are limited to the Companys pro-rata share of the loan obligations of the respective joint ventures. At April 30, 2009, the maximum amount of the completion guarantees and conditional repayment guarantees (net of amounts that the Company has accrued) is estimated to be approximately $50.3 million, if any liability is determined to be due thereunder. The $50.3 million of these guarantees are included in the $63.3 million of guarantees disclosed above.
Read the The complete ReportTOL is in the portfolios of Arnold Van Den Berg of Century Management, Ron Baron of Baron Funds.
