Toll Brothers Inc Strategic Plan Toll Brothers Essay

Download this Essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Essay:

Toll Brothers, Inc. Strategic Plan

TOLL BROTHERS, INC.

This strategic plan is meant to discuss the reimplementation of Toll Brothers, Inc. For 2012. Toll Brothers, Inc. was founded in 1967 and quickly became the leader in luxury homes and land development. In 1986, the company went public with a public offering totaling $40 million. Toll Brothers is currently in 20 states and has acquired numerous building companies including the most recent acquisitions of Cam West and Gibraltar.

Statement of Forward-looking Information

Certain information included in this presentation is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, information related to: anticipated operating results; financial resources and condition; selling communities; home deliveries; average home prices; consumer demand and confidence; contract pricing; business and investment opportunities; and market and industry trends.

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, among others: local, regional, national and international economic conditions;

fluctuating consumer demand and confidence; interest and unemployment rates; changes in sales conditions, including home prices, in the markets where we build homes; the competitive environment in which we operate; the availability and cost of land for future growth; conditions that could result in inventory write-downs or write-downs associated with investments in unconsolidated entities; the ability to recover our deferred tax assets; the availability of capital; uncertainties in the capital and securities markets; liquidity in the credit markets; changes in tax laws and their interpretation; effects of governmental legislation and regulation; the outcome of various legal proceedings; the availability of adequate insurance at reasonable cost; the impact of construction defect, product liability and home warranty claims, including the adequacy of self-insurance accruals, the applicability and sufficiency of our insurance coverage; the ability of customers to obtain financing for the purchase of homes; the ability of home buyers to sell their existing homes; the ability of the participants in various joint ventures to honor their commitments; the availability and cost of labor and building and construction materials; the cost of raw materials; construction delays; domestic and international political events; and weather conditions.

Any or all of the forward-looking statements included in this presentation are not guarantees of future performance and may turn out to be inaccurate. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

2012 Objectives

1. Expand building in Western states including Northern Arizona, Western Colorado and Eastern Washington.

2. Increase profitability by 2%.

3. Develop 10 new building designs to expand the multifamily and high-rise business sectors.

2012 Functional Tactics

1. Expansion into the Northern Arizona through the acquisition and development of land surrounding the Flagstaff area. Western Colorado, especially the areas surrounding Arrowhead is promising for development as the area is already established as a luxury location. With the successful expansion into Seattle and the acquisition of Cam West, it is time to expand further into Eastern Washington including Snowhomish and Spokane.

2. With start-ups still on the decline throughout the country, Toll Brothers seeks to continue expansion through 2012 with a final revenue for the year projected at $1,771,200.

3. With single family residents decreasing and many families instead seeking multifamily units, Toll Brother will expand its high rise and multifamily unit options to include 4 new multifamily unit designs and 6 new high rise designs by the end of the 3rd quarter.

Action Items, Deadlines and Resource Allocation

1. Expansion land shall be acquired by the end of the 2nd quarter with an emphasis of maintaining primary purchases from bankruptcy auctions

. With advertising for this land starting simultaneously. The tasks of land expansion shall fall to the existing regional management. Funds for the purchase of land for development shall be allocated through securities.

2. Profit will be primarily generated through the acquisition of high rise and multifamily building buyers, as these markets are growing within the desired regions.

3. Design departments to be supervised by company managers and primary output completed by college interns to reduce the overhead cost of the designs and keep the company apprised of the most modern changes in luxury and building design.

Reorganization

1. Eric Campbell's roll as Seattle Division President will be expanded to include Eastern Washington's appraising and acquiring.

2. The Gibraltar project will expand the apartment redevelopment branch this year, as there is an increase in the amount of people seeking rental properties.

3. Toll Brothers will increase the amount of college graduates hired in 2012, as the entry level employees are more agreeable to current business conditions and will ensure an updated design portfolio.

2011 Key Success Factors

1. Expansion into Seattle

2. Purchase of 22nd Street in the Gramercy Park area of Manhattan

3. Increased presence in D.C., Boston and New York

4. Baby Boomer customers become highest for sales

2012 Comparative Budget

Assets

07/31/11

07/31/12

Cash and cash equivalents

$890,067.00

$801,060.00

Marketable securities

$294,268.00

$264,857.00

Restricted Cash

$24,225.00

$22,096.00

Inventory

$3,423,617.00

$3,081,255.00

Property, Construction and Office Equipment

$98,902.00

$89,011.00

Receivables, prepaid expenses and other assets

$96,972.00

$87,274.00

Mortgage loans held for sale

$45,320.00

$40,788.00

Mortgage loans held for sale

$16,304.00

$14,673.00

Income tax refund recoverable

$16,304.00

$14,673.00

Total assets

$5, 076,610

$4,568,949.00

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Loans payable

$104,512.00

$94,060.00

Senior notes

$1, 500,494

$1,350,444.00

Senior notes

$39,905.00

$35,914.00

Customer deposits

$90,184.00

$81,165.00

Accounts payable

$93,622.00

$84,259.00

Accrued expenses

$524,446.00

$472,001.00

Income taxes payable

$105,831.00

$95,247.00

Total liabilities

$2, 458,994

$2,213,094.00

Revenues

$1, 048,096

$943,286.00

Cost of revenues

$898,266.00

$808,439.00

Selling, general and administrative expenses

$192,906.00

$173,615.00

Interest expense

$1,504.00

$1,353.00

Total Revenues

$1, 092,676

$983,408.00

Loss from operations

-$44,580.00

-$40,122.00

Other:

(Loss) income from unconsolidated entities and nonperforming loan portfolio (b)

-$9,817.00

-$8,835.00

Interest and other

$13,168.00

$11,851.00

Expenses related to early retirement of debt

-$3,414.00

-$3,072.00

(Loss) income before income taxes

-$44,643.00

-$40,178.00

Income tax benefit

-$69,395.00

-$62,455.00

Net income (loss)

-$24,752.00

-$24,751.00

Income (loss) per share:

Basic

-$0.15

-$0.15

Diluted

-$0.15

-$0.15

Weighted-average number of shares:

Basic

$167,221.00

$150,498.00

Diluted

$168,666.00

$151,799.00

Risk Management Plan

I. Government Housing Interference

With the fate of Fanny Mae/Freddy Mack continuing to be uncertain, what does remain certain is that elected officials are still involving themselves in the housing market. This crises is sure to only get worse under the current administration, resulting in greater spending and less fluent assets within the industry. To avoid this issue, Toll Brothers will continue the commitment to targeting empty nester and active adults for luxury housing. Currently less than $200,000 of current purchases result from lenders. Most homes are purchased with cash. This ensures flexability for Toll Brothers as well as reliability of the customer.

II. Stock Market Instability

The stock market is girating in historic ways. The moment anyone mentions another bailout or bankruptcy of a bank, the housing market's stock goes down. In order to better ensure reliable stock for Toll Brothers, the company will continue growing its credit rating. According to the S&P report, Toll Brother's has a current rating of stable but is still considered a significant financial risk. To better grow the company and have greater stock stability, Toll Brothers will make every attempt to improve the credit rating and achieve the status of modest with regard to risk in the housing industry.

III. Budget Impasse

It cannot be denied that Toll Brother's annual profit has shown steady decline for the past 5 years. Last year, however, the market slowed with a loss of 2%. In order to further mitigate losses in the next year and ideally surpass the budgeted goals…[continue]

Cite This Essay:

"Toll Brothers Inc Strategic Plan Toll Brothers " (2012, January 12) Retrieved December 10, 2016, from http://www.paperdue.com/essay/toll-brothers-inc-strategic-plan-53592

"Toll Brothers Inc Strategic Plan Toll Brothers " 12 January 2012. Web.10 December. 2016. <http://www.paperdue.com/essay/toll-brothers-inc-strategic-plan-53592>

"Toll Brothers Inc Strategic Plan Toll Brothers ", 12 January 2012, Accessed.10 December. 2016, http://www.paperdue.com/essay/toll-brothers-inc-strategic-plan-53592

Other Documents Pertaining To This Topic

  • Finance and Financial Entrepreneurship The Basis of

    finance and financial entrepreneurship. The basis of the article is on a discussion that was held on this subject among four leading lights of financial entrepreneurship in the United States - Michael Milken, Lewis Ranieri, Richard Sandor and Myron Scholes. These people are famous in their own right and have had a sizeable role in financial entrepreneurship in the U.S. over the last 20 years. We have first discussed

  • Mitigating Risk in the Aeronautics Industry

    20th century has been one of remarkable technological advancements and of increased need to further improve human existence and the speed through which man runs about its everyday life. These ideas alone have demonstrated an immense capacity of man to research and invent new ideas, mechanisms, and to elaborate on the most important technological evolutions to set these mechanisms in motion. However, these evolutions have not been without flaws

  • Delphi Study Influence of Environmental Sustainability Initiatives...

    Delphi Study: Influence of Environmental Sustainability Initiatives on Information Systems Table of Contents (first draft) Green IT Current Methods and Solutions Green IT and energy costs Green It and Email Systems Green IT and ICT Green IT and ESS Green IT and TPS Green IT and DSS Green IT and other support systems Green IT and GHG reduction Green IT and the Government Sector Green IT and the Corporate Sector Future Prospects of Green IT in the software industry The paper focuses on how the

  • Online Retailing Operates What Kind of Problems

    online retailing operates, what kind of problems they face and the kind of environment they operate in. The author has also focused on Asian online retailing and special focus on Hong Kong online retailing. It has 22 sources. Access of basic necessities of life has followed the conventional method of buying and selling. This pattern changed in the last decade with the emergence of information technology age. When consumers have


Read Full Essay
Copyright 2016 . All Rights Reserved