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HUNTINGDON VALLEY, PA-Earnings, revenue and the contracted backlog for locally based Toll Brothers all reached record levels in the fiscal fourth quarter that ended Oct. 31. The builder of luxury residences, including planned communities and condominiums, reported 2004 annual revenues of $3.89 billion, up from $2.78 billion for fiscal 2003.

Fourth-quarter revenues approached $1.5 billion, compared with $903.4 million in fourth-quarter 2003. Meanwhile, net income for the fourth quarter reached $180.6 million, up from $93.4 million for the same quarter a year ago, and net income for all of fiscal 2004 rose to $409.1 million, compared with $259.8 million a year ago. Furthermore, as of Oct. 31, the company reported a backlog of contracts worth an aggregate of just over $1.5 billion.

“With more communities and more product line than ever before, we produced record results across the board while enjoying strong pricing power in the lot-constrained, affluent markets where we operate,” says Robert I. Toll, chairman and CEO, in a statement. “Demand remained tremendous.”

According to Fred Cooper, SVP of finance and investor relations, the firm’s average home price is $580,000. The company entered what he calls the “luxury active adult” market in 1999 and is now involved in developing 46 active adult communities, of which 17 are open and 29 are in the pipeline. This market now represents 11% of Toll Brothers’ business, and Cooper projects it will account for 15% within five years.

Second-home communities is another area of growth. By 2010, Cooper projects there will be 10 million second homes in the US, compared with 6.4 million today. Urban in-fill locations are also targeted, and recent examples include a 92-unit condo in Palatine, IL and Sky Club, a 326-unit, 17-story condo in Hoboken, NJ. The company also has another 250 residential communities currently in the approval or development pipeline.

Toll Brothers operates in 44 markets in 21 states. Cooper says it controls more than 60,000 home sites, or about a five- to six-year supply, in the country’s affluent markets.

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