Toll Brothers is a home construction company based in Horsham, Pennsylvania that specializes in building luxury homes. In 2016, the company was the 10th largest home builder in the United States, based on the number of homes closed. The company is ranked 480th on the Fortune 500. The company operates in 20 states. In addition to luxury home construction, the company designs, markets, sells, and arranges financing for homes. The company also develops and operates for-rent apartments through joint ventures. In 2017, the company sold homes at an average base price of $689,000 plus average option upgrades of $152,000.
History
Toll Brothers was founded in 1967 in Pennsylvania by Robert I. Toll and Bruce E. Toll. Bob received a law degree from University of Pennsylvania and his B.A. from Cornell University, while his brother Bruce had an accounting degree from the University of Miami. Their father, Albert, built homes and the brothers believed that the new home industry had more to offer. Bruce was 26 and Robert was 27 at the time. In 1982 Toll Brothers expanded to New Jersey. In May 1986 where they developed property in Kinnelon, NJ, in cooperation with Michael Felkay. Toll Brothers was incorporated as a Delaware corporation with a public offering raising $40 million. Toll Brothers are now the center of controversy in Philadelphia for their plans to build a residential tower in the Jewelers Row neighborhood of Philadelphia, one of the oldest diamond districts in America.
Executives
Doug Yearley joined Toll Brothers in 1990 and was promoted as Chief Executive Officer in June 2010. Doug also serves as Co-Chair of the Pennsylvania Chapter of American Cancer Society's CEO's Against Cancer. Robert Toll now serves exclusively as Executive Chairman of the Board. Richard Hartman joined Toll Brothers in 1980 and was promoted to Chief Operating Officer and Executive Vice President in January 2012. Martin Connor was hired as Toll Brother's CFO in 2010.
Acquisitions
Toll Brothers primarily builds customized single and attached luxury homes on land that it acquires and develops. In 2011, Toll Brothers acquired Seattle builder CamWest Development LLC for an undisclosed cash price. In November 2013, Toll Brothers agreed to buy Shapell Industries for roughly $1.6 billion, making Nathan Shapell's daughter, Vera Guerin, a billionaire. The acquisition delivered an additional 5,200 lots in the Los Angeles and San Francisco Bay areas. In 2014, Toll Brothers doubled its presence in Houston through the purchase of a 3,700 acre parcel known as the Sienna South project which is planned to be used for about 6,500 homes. In January 2015, Toll Brothers acquired Gramercy Park site to expand its presence in New York City. In September 2015, Toll Brothers held 47,200 home sites. In November 2016, Toll Brothers acquired Coleman Homes for an undisclosed cash price.
Awards
Toll Brothers was named the Most Admired Home Building Company in Fortune magazine's survey of the World's Most Admired Companies for 2015. Toll Brothers was ranked by Fortune as the 39th fastest growing company in 2014. In 2014 Builder Magazine and in 2012 Professional Builder Magazine named Toll Brothers 'Builder of the Year'.
Financial analysis
An analysis of the Q4 2015 financial reports indicates that Toll Brothers had a current ratio of over 9. These assets provided Toll Brothers with working capital of over US$7.297 billion. Toll Brothers had a quick ratio of 1.33. Toll Brothers had an accounts receivable turnover of 15.6 providing an average days' sales in accounts receivable of 23.4 days. Inventory turnover was 0.48 with an average days' sales in inventory of 764 days. Toll Brothers' had a debt-to-equity ratio of 1.18 and a debt-to-capital ratio of 46.6% in Q4 2015.
Disputes
Toll Brothers was sued in April 2007 by a group of investors claiming they were misled by directors about their ability to maintain historically high-earnings during the downturn in the U.S. residential real estate market. Toll Brothers agreed to settle suit for $25 million, though they did not admit any wrongdoing. Six residents at the Northside Piers development complained of faulty window seals that leaked in air and rain when windy. The project gained notoriety in 2007 when a kettle of roofing tar on the top level caught fire during construction and although quickly contained produced a significant amount of smoke. After meeting with the residents Toll Brothers agreed to fix the seals. Toll Brothers sued the contractor who installed the windows for $10 million. In 2012, the company was required to pay a penalty of $741,000 for numerous alleged violations of the Clean Water Act, including more than 600 relating to runoff of stormwater at its building sites, among them sites in the Chesapeake Bay Watershed. Toll Brothers agreed to implement storm-water training and prevention techniques across the entire company.
