EX-99.2 4 p413433ex99-2.htm EXHIBIT 99.2 Prepared and filed by St Ives Financial

Exhibit 99.2

FINANCIAL GUIDANCE

In our second quarter 2006 Earnings Conference Call to be held at 2:00 P.M. (EDT) on May 23, 2006, we will provide the following guidance regarding our expected results of operations for our fiscal year ending October 31, 2006. These forecasts are subject to many risks, uncertainties and assumptions and may vary significantly from the actual results, as further noted below. Information with respect to quarterly data is subject to even greater fluctuation and risk. We undertake no obligation to publicly update the information provided due to changes in economic conditions, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted. We suggest that you listen to the conference call in its entirety. The conference call in its entirety can be heard via the Investor Relations portion of our website, www.tollbrothers.com, until July 31, 2006.

For ease of reference, we have included the actual results for fiscal 2005 and for the quarters ended January 31, 2006 and April 30, 2006. The columns designated as “Low” and “High” represents the low and high ends of the ranges for unit deliveries of homes, average delivered price of homes, land sales revenues, percentage of completion revenues, cost of revenue by line as a percentage of the applicable revenue and selling, general and administrative expenses (“SG&A”) as a percentage of total revenues expected for fiscal 2006. We expect that the actual results of operations will be somewhere in between the low end and the high end of the ranges provided.

Unit deliveries of homes, average delivered price of homes, land sales and percentage of completion revenues in fiscal 2006 are expected to be:

Revenues

 

Traditional home sales Unit deliveries

 

 

 

 

 

 

 

 

 

 

 

 

 

2006 Estimated

 

 

 

 

 

 

 

 

 

 

2005
Actual

 

2006
Actual

 

Low

 

High

 

 

 

 

 

 

 

Quarter ended January 31

 

1,590

 

1,879

 

 

 

 

 

Quarter ended April 30

 

1,912

 

2,063

 

 

 

 

 

Quarter ending July 31

 

2,310

 

 

 

2,150

 

2,450

 

Quarter ending October 31

 

2,957

 

 

 

2,900

 

3,300

 

Year

 

8,769

 

 

 

9,000

 

9,700

 

 

Average delivered price

 

 

 

 

 

 

 

 

 

 

 

 

 

2006 Estimated

 

 

 

 

 

 

 

 

 

 

2005
Actual

 

2006
Actual

 

Low

 

High

 

 

 

 

 

 

 

Quarter ended January 31

 

$

622,074

 

$

680,526

 

 

 

 

 

 

 

Quarter ended April 30

 

$

641,212

 

$

678,855

 

 

 

 

 

 

 

Quarter ending July 31

 

$

665,151

 

 

 

 

$

675,000

 

$

685,000

 

Quarter ending October 31

 

$

678,968

 

 

 

 

$

690,000

 

$

700,000

 

Year

 

$

656,780

 

 

 

 

$

680,000

 

$

688,000

 

 

Percentage of completion revenues (in thousands)

 

 

 

 

 

 

 

 

 

2005
Actual

 

2006
Actual

 

2006 Estimated

 

 

 

 

 

 

 

 

Low

 

High

 

 

 

 

 

 

 

Quarter ended January 31

 

N/A

 

$

57,569

 

 

 

 

 

 

 

Quarter ended April 30

 

N/A

 

$

39,955

 

 

 

 

 

 

 

Quarter ending July 31

 

N/A

 

 

 

 

$

60,000

 

$

65,000

 

Quarter ending October 31

 

N/A

 

 

 

 

$

110,000

 

$

120,000

 

Year

 

N/A

 

 

 

 

$

265,000

 

$

280,000

 

 

Land sales (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

2006 Estimated

 

 

 

 

 

 

 

 

 

 

2005
Actual

 

2006
Actual

 

Low

 

High

 

 

 

 

 

 

 

Quarter ended January 31

 

$

1,225

 

$

4,678

 

 

 

 

 

 

 

Quarter ended April 30

 

$

9,800

 

$

2,100

 

 

 

 

 

 

 

Quarter ending July 31

 

$

10,583

 

 

 

 

$

5,000

 

$

5,000

 

Quarter ending October 31

 

$

12,516

 

 

 

 

$

4,500

 

$

4,500

 

Year

 

$

34,124

 

 

 

 

$

16,000

 

$

16,000

 

Cost of revenues for traditional home sales, percentage of completion and land sales revenues as a percentage of the applicable revenues and interest as a percentage of total revenues in fiscal 2006 are expected to be:

Cost of revenues

 

Traditional home sales

 

 

 

 

 

 

 

 

 

 

 

 

 

2006 Estimated

 

 

 

 

 

 

 

 

 

 

2005
Actual

 

2006
Actual

 

Low

 

High

 

 

 

 

 

 

 

Quarter ended January 31

 

69.30

%

69.14

%

 

 

 

 

Quarter ended April 30

 

67.75

%

69.73

%

 

 

 

 

Quarter ending July 31

 

66.63

%

 

 

70.30

%

70.00

%

Quarter ending October 31

 

67.88

%

 

 

69.50

%

69.30

%

Year

 

67.76

%

 

 

69.70

%

69.50

%

 

Percentage of completion

 

 

 

 

 

 

 

 

 

 

 

 

 

2006 Estimated

 

 

 

 

 

 

 

 

 

 

2005
Actual

 

2006
Actual

 

Low

 

High

 

 

 

 

 

 

 

Quarter ended January 31

 

N/A

 

82.24

%

 

 

 

 

Quarter ended April 30

 

N/A

 

78.03

%

 

 

 

 

Quarter ending July 31

 

N/A

 

 

 

76.00

%

76.00

%

Quarter ending October 31

 

N/A

 

 

 

75.00

%

75.00

%

Year

 

N/A

 

 

 

77.00

%

77.00

%

 

Land sales

 

 

 

 

 

 

 

 

 

 

 

 

 

2006 Estimated

 

 

 

 

 

 

 

 

 

 

2005
Actual

 

2006
Actual

 

Low

 

High

 

 

 

 

 

 

 

Quarter ended January 31

 

63.59

%

82.00

%

 

 

 

 

Quarter ended April 30

 

54.24

%

100.14

%

 

 

 

 

Quarter ending July 31

 

90.82

%

 

 

80.00

%

80.00

%

Quarter ending October 31

 

69.58

%

 

 

90.00

%

90.00

%

Year

 

71.55

%

 

 

86.00

%

86.00

%

 

Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

2006 Estimated

 

 

 

 

 

 

 

 

 

 

2005
Actual

 

2006
Actual

 

Low

 

High

 

 

 

 

 

 

 

Quarter ended January 31

 

2.20

%

2.14

%

 

 

 

 

Quarter ended April 30

 

2.28

%

2.07

%

 

 

 

 

Quarter ending July 31

 

2.30

%

 

 

2.10

%

2.10

%

Quarter ending October 31

 

1.97

%

 

 

2.10

%

2.10

%

Year

 

2.16

%

 

 

2.10

%

2.10

%

Selling, general and administrative expenses as a percentage of total revenues in fiscal 2006 are expected to be:

 

 

 

2005
Actual

 

2006
Actual

 

2006 Estimated

 

Low

 

High

 

 

 

 

 

 

Quarter ended January 31

 

10.81

%

10.38

%

 

 

 

 

Quarter ended April 30

 

9.42

%

9.85

%

 

 

 

 

Quarter ending July 31

 

8.16

%

 

 

10.20

%

9.90

%

Quarter ending October 31

 

6.59

%

 

 

8.30

%

8.10

%

Year

 

8.33

%

 

 

9.50

%

9.40

%

Income from unconsolidated entities for fiscal 2006 is expected to be approximately (in thousands):

 

 

 

2005
Actual

 

2006
Actual

 

2006
Estimated

 

 

 

 

 

 

Quarter ended January 31

 

$

1,935

 

$

16,569

 

 

 

 

Quarter ended April 30

 

$

3,373

 

$

12,824

 

 

 

 

Quarter ending July 31

 

$

4,231

 

 

 

 

$

7,000

 

Quarter ending October 31

 

$

18,205

 

 

 

 

$

20,000

 

Year

 

$

27,744

 

 

 

 

$

56,000

 

Interest and other income for fiscal 2006 is expected to be approximately (in thousands):

 

 

 

2005
Actual

 

2006
Actual

 

2006
Estimated

 

 

 

 

 

 

Quarter ended January 31

 

$

6,883

 

$

11,327

 

 

 

 

Quarter ended April 30

 

$

9,109

 

$

10,966

 

 

 

 

Quarter ending July 31

 

$

10,583

 

 

 

 

$

7,000

 

Quarter ending October 31

 

$

14,622

 

 

 

 

$

7,000

 

Year

 

$

41,197

 

 

 

 

$

36,000

 

Our effective income tax rate is expected to be approximately:

 

 

 

2006
Actual

 

2006
Actual

 

2006
Estimated

 

 

 

 

 

 

 

Quarter ended January 31

 

40.1

%

38.32

%

 

 

Quarter ended April 30

 

36.5

%

38.53

%

 

 

Quarter ending July 31

 

40.6

%

 

 

38.60

%

Quarter ending October 31

 

39.0

%

 

 

38.60

%

Year

 

39.1

%

 

 

38.60

%

Diluted earnings per share is expected to be:

 

 

 

2005
Actual

 

2006
Actual

 

2006 Estimated

 

Low

 

High

 

 

 

 

 

 

Quarter ended January 31

 

$

0.66

 

$

0.98

 

 

 

 

 

 

 

Quarter ended April 30

 

 

1.00

 

 

1.06

 

 

 

 

 

 

 

Quarter ending July 31

 

 

1.27

 

 

 

 

$

1.02

 

$

1.21

 

Quarter ending October 31

 

 

1.84

 

 

 

 

 

1.65

 

 

1.93

 

Year

 

$

4.78

 

 

 

 

$

4.69

 

$

5.16

 

In-the-money stock options are included in shares outstanding using the “treasury stock method” for calculating common stock equivalents. We estimate that the share count for determining diluted earnings per share for fiscal 2006 will be:

 

 

 

2005
Actual

 

2006
Actual

 

2006
Estimated

 

 

 
 
 

 

 

 

(in thousands)

 

Quarter ended January 31

 

166,084

 

167,027

 

 

 

Quarter ended April 30

 

169,352

 

165,727

 

 

 

Quarter ending July 31

 

169,483

 

 

 

165,000

 

Quarter ending October 31

 

168,930

 

 

 

165,300

 

Year

 

168,552

 

 

 

165,800

 

FORWARD LOOKING STATEMENT

Certain information included herein and in other Company reports, SEC filings, statements and presentations is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning anticipated operating results, financial resources, changes in revenues, changes in profitability, interest expense, growth and expansion, anticipated income to be realized from our investments in unconsolidated entities, the ability to acquire land, the ability to secure governmental approvals and the ability to open new communities, the ability to sell homes and properties, the ability to deliver homes from backlog, the average delivered price of homes, the ability to secure materials and subcontractors, the ability to maintain the liquidity and capital necessary to expand and take advantage of future opportunities, and stock market valuations. Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other Company reports, SEC filings, statements and presentations. These risks and uncertainties include local, regional and national economic conditions, the demand for homes, domestic and international political events, uncertainties created by terrorist attacks, the effects of governmental regulation, the competitive environment in which the Company operates, fluctuations in interest rates, changes in home prices, the availability and cost of land for future growth, the availability of capital, uncertainties and fluctuations in capital and securities markets, changes in tax laws and their interpretation, legal proceedings, the availability of adequate insurance at reasonable cost, the ability of customers to finance the purchase of homes, the availability and cost of labor and materials, and weather conditions.