Toll Brothers Inc. (TOL, Financial) filed Quarterly Report for the period ended 2011-01-31.
Toll Brothers Inc. has a market cap of $3.5 billion; its shares were traded at around $21 with and P/S ratio of 2.3.
We have investments in and advances to various unconsolidated entities including Toll Brothers Realty Trust (Trust) and Toll Brothers Realty Trust II (Trust II). At January 31, 2011, we had investments in and advances to these entities, net of impairment charges recognized, of $157.8 million, and were committed to invest or advance $11.8 million to these entities if they require additional funding.
Cost of revenues as a percentage of revenues was 84.4% in the three-month period ended January 31, 2011, as compared to 97.2% in the three-month period ended January 31, 2010. In the three-month periods ended January 31, 2011 and 2010, we recognized inventory impairment charges and write-offs of $5.1 million and $33.4 million, respectively. Cost of revenues as a percentage of revenues, excluding impairments, was 82.9% of revenues in the three-month period ended January 31, 2011, as compared to 87.0% in the fiscal 2010 period. The decrease in cost of revenues, excluding inventory impairment charges, as a percentage of revenue in fiscal 2011, as compared to fiscal 2010, was due primarily to lower costs on the homes delivered in the fiscal 2011 period than those delivered in the fiscal 2010 period. The lower costs were due to the delivery of fewer homes directly from inventory (quick-delivery homes) in fiscal 2011, as compared to fiscal 2010, as our supply of such homes has dwindled, and to reduced sales incentives in general on the homes delivered in fiscal 2011, as compared to fiscal 2010. Generally, we give higher sales incentives on quick-delivery homes than our standard contract and build homes (to be built homes). In addition, reduced costs were realized in fiscal 2011 because fewer homes were delivered from certain higher cost communities in fiscal 2011, as compared to fiscal 2010, as these communities delivered their final homes (closed-out) and from the benefits from cost savings of our new centralized purchasing initiatives. In the three-month periods ended January 31, 2011 and 2010, interest cost as a percentage of revenues was 5.4% and 5.3%, respectively.
In the three-month period ended January 31, 2011, we recognized $11.0 million of loss from unconsolidated entities, as compared to a $0.4 million of income in the fiscal 2010 period. The loss in the fiscal 2011 period included a $20.0 million impairment charge that we recognized on our investments in unconsolidated entities. No impairment charge was recognized in the fiscal 2010 period. See Off-Balance Sheet Arrangements in this MD&A for information related to this impairment charge. The increase in income from unconsolidated entities in the fiscal 2011 period, excluding the $20.0 million impairment charge, was due principally to income generated from two of our high-rise construction ventures which commenced delivery of units in the second and third quarter of fiscal 2010.
For the three months ended January 31, 2011 and 2010, interest and other income was $4.2 million and $8.2 million, respectively. The decrease in interest and other income in the three-month period ended January 31, 2011, as compared to the fiscal 2010 period, was primarily due to a decline in the fiscal 2011 period, as compared to the fiscal 2010 period, of $4.2 million of retained customer deposits, a decrease in income from ancillary businesses and management fee income, offset, in part, by a gain on the sale of a commercial parcel of land.
For the three-month period ended January 31, 2011, we reported a loss before income tax benefit of $17.0 million, as compared to a loss before income tax benefit of $56.8 million in the three-month period ended January 31, 2010.
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Toll Brothers Inc. has a market cap of $3.5 billion; its shares were traded at around $21 with and P/S ratio of 2.3.
Highlight of Business Operations:
The value of our backlog at January 31, 2011 of $825.2 million (1,472 homes) decreased 1.8%, as compared to our backlog at January 31, 2010 of $840.2 million (1,461 homes). Backlog consists of homes under contract but not yet delivered to our home buyers. Our backlog at October 31, 2010 and 2009 was $852.1 million (1,494 homes) and $874.8 million (1,531 homes), respectively. The decrease in the value of backlog at January 31, 2011, as compared to the backlog at January 31, 2010, was primarily attributable to the decrease in the value of our backlog at October 31, 2010, as compared to our backlog at October 31, 2009, the increased aggregate value of our deliveries in the fiscal 2011 period, as compared to the aggregate value of deliveries in the fiscal 2010 period, offset, in part, by the increase in the aggregate value of net contracts signed in the three-month period ended January 31, 2011, as compared to the three-month period ended January 31, 2010.We have investments in and advances to various unconsolidated entities including Toll Brothers Realty Trust (Trust) and Toll Brothers Realty Trust II (Trust II). At January 31, 2011, we had investments in and advances to these entities, net of impairment charges recognized, of $157.8 million, and were committed to invest or advance $11.8 million to these entities if they require additional funding.
Cost of revenues as a percentage of revenues was 84.4% in the three-month period ended January 31, 2011, as compared to 97.2% in the three-month period ended January 31, 2010. In the three-month periods ended January 31, 2011 and 2010, we recognized inventory impairment charges and write-offs of $5.1 million and $33.4 million, respectively. Cost of revenues as a percentage of revenues, excluding impairments, was 82.9% of revenues in the three-month period ended January 31, 2011, as compared to 87.0% in the fiscal 2010 period. The decrease in cost of revenues, excluding inventory impairment charges, as a percentage of revenue in fiscal 2011, as compared to fiscal 2010, was due primarily to lower costs on the homes delivered in the fiscal 2011 period than those delivered in the fiscal 2010 period. The lower costs were due to the delivery of fewer homes directly from inventory (quick-delivery homes) in fiscal 2011, as compared to fiscal 2010, as our supply of such homes has dwindled, and to reduced sales incentives in general on the homes delivered in fiscal 2011, as compared to fiscal 2010. Generally, we give higher sales incentives on quick-delivery homes than our standard contract and build homes (to be built homes). In addition, reduced costs were realized in fiscal 2011 because fewer homes were delivered from certain higher cost communities in fiscal 2011, as compared to fiscal 2010, as these communities delivered their final homes (closed-out) and from the benefits from cost savings of our new centralized purchasing initiatives. In the three-month periods ended January 31, 2011 and 2010, interest cost as a percentage of revenues was 5.4% and 5.3%, respectively.
In the three-month period ended January 31, 2011, we recognized $11.0 million of loss from unconsolidated entities, as compared to a $0.4 million of income in the fiscal 2010 period. The loss in the fiscal 2011 period included a $20.0 million impairment charge that we recognized on our investments in unconsolidated entities. No impairment charge was recognized in the fiscal 2010 period. See Off-Balance Sheet Arrangements in this MD&A for information related to this impairment charge. The increase in income from unconsolidated entities in the fiscal 2011 period, excluding the $20.0 million impairment charge, was due principally to income generated from two of our high-rise construction ventures which commenced delivery of units in the second and third quarter of fiscal 2010.
For the three months ended January 31, 2011 and 2010, interest and other income was $4.2 million and $8.2 million, respectively. The decrease in interest and other income in the three-month period ended January 31, 2011, as compared to the fiscal 2010 period, was primarily due to a decline in the fiscal 2011 period, as compared to the fiscal 2010 period, of $4.2 million of retained customer deposits, a decrease in income from ancillary businesses and management fee income, offset, in part, by a gain on the sale of a commercial parcel of land.
For the three-month period ended January 31, 2011, we reported a loss before income tax benefit of $17.0 million, as compared to a loss before income tax benefit of $56.8 million in the three-month period ended January 31, 2010.
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