Toll Brothers, Inc. · NYSE:TOL
Toll Brothers — IPO Roadshow (November 2013)
23 slides from Toll Brothers's IPO roadshow presentation, Nov 7, 2013
Slide 1: Issuer Free Writing Prospectus, dated November 7, 2013
Issuer Free Writing Prospectus, dated November 7, 2013 Filed pursuant to Rule 433 under the Securities Act of 1933 Supplementing the Preliminary Prospectus, dated November 7, 2013 Registration Statement No. 333-178130 At 8:30 a.m. Eastern time, on November 7, 2013, Toll Brothers, Inc. will use the f
Slide 2: Toll Brothers, Inc. Announces the Acquisition of Shapell Industries, Inc.
Toll Brothers, Inc. Announces the Acquisition of Shapell Industries, Inc. Toll Brothers NorCal Shapell Homes SoCal 1 Toll Brothers, Inc. November 7, 2013 NYSE: TOL
Slide 3: Disclaimer
Disclaimer 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; anticipated finan
Slide 4: Today's Agenda
Today’s Agenda I. Toll Brothers’ Recent Performance II. Shapell Overview III. Toll Brothers’ California Operations IV. Transaction Overview and Rationale 3 Toll Brothers, Inc. NYSE: TOL
Slide 5: I. Toll Brothers' Recent Performance
I. Toll Brothers’ Recent Performance
Slide 6: Toll Brothers Preliminary Q4 and FY2013 Results
Toll Brothers Preliminary – Q4 and FY2013 Results 3 Months Ended October 31, Fiscal Year Ended October 31, ($ in millions), except Avg Prices 2013 2012 % Change 2013 2012 % Change Contracts Units 1,163 1,098 5.9% 5,294 4,159 27.3% Total $839 $684 22.6% $3,634 $2,558 42.1% Avg Price ($ in 000's) $721
Slide 7: II. Shapell Overview
ll. Shapell Overview ‘Toll “Brothers
Slide 8: Shapell: 55+ Year History of Land Development & Homebuilding
Shapell: 55+ Year History of Land Development & Homebuilding Nathan Shapell was born in Poland and during World War II was a prisoner of the infamous Buchenwald and Auschwitz Concentration Camps where most of his family members, including his mother, were executed. After the war he devoted himself t
Slide 9: Shapell: Leading Coastal California Homebuilder and Developer
Shapell: Leading Coastal California Homebuilder and Developer Opportunity Overview Geographic Footprint Highly Attractive and Proven Lot Locations in NorCal and SoCal One of the largest homebuilders in California and the leading builder in several of the state’s premier, high-growth markets Orinda 1
Slide 10: Shapell: Proven Historical Operating Performance
Shapell: Proven Historical Operating Performance Closings (Units) Shapell has consistently delivered high- 525 quality homes in the coastal California 389 markets where they build 357 347 Through the first 8 months of 2013 – their home prices were up 13% and revenues have already exceeded their 2012
Slide 11: Shapell: Overview of Lots and Communities
Shapell: Overview of Lots and Communities 08/31/13 Lot Breakdown By Status (08/31/13) ($ in 000s) City Metro Area Backlog Raw GradedFinished WIP Models Total Lots Remaining Northern California Gale Ranch San Ramon San Francisco 55 -- 1,217 202 100 19 1,538 Alamo Creek Danville San Francisco 40 -- 15
Slide 12: III. Toll Brothers' California Performance
III. Toll Brothers’ California Performance
Slide 13: Toll's Operating Performance in California
Toll’s Operating Performance in California Toll Brothers has been successfully operating in California since 1994 In two decades,Toll hasdelivered7,750homesgeneratingapproximately$6.5billionin revenue Historically, California represents ~9% of consolidated annual closings Additional investment in Ca
Slide 14: Case Study: Investment in Shapell Lots – Amalfi Hills
Case Study: Investment in Shapell LotsAmalfi – Hills In 2012, Toll acquired two Shapell communities (Sorrento & Positano) that consisted of 113 Lots in Yorba Linda’s Amalfi Hills (Orange County) for $47mm Yorba Linda is a highly desirable housing market with median household income of $115k and rest
Slide 15: IV. Transaction Overview and Rationale
IV. Transaction Overview and Rationale
Slide 16: Overview of Transaction Financing
Overview of Transaction Financing Total purchase price of ~$1.60 billion, all cash, for 5,200 lots plus Shapell’s homebuilding operations The purchase will be financed using a combination of equity and debt: Equity will represent 10 – 15% of the purchase price Debt will represent the remaining 85 –
Slide 17: Key Acquisition Considerations
Key Acquisition Considerations We believe +/- $100 million of cash will be on their We believe it will be balance sheet at closing which we will retain plus accretive to earnings in another $150 million will be returned in the first 6 the first year, excluding months from WIP transaction costs We be
Slide 18: Competitive Advantages From Shapell Acquisition
Competitive Advantages From Shapell Acquisition Bolster footprint in key proven coastal California locations that fit extremely well within Toll’s current divisional operations Toll will own or control approximately 9,200 lots in what we believe are the best locationsin California– at the cornerof “
Slide 19: Augments Toll's Footprint in Premier Coastal California Locations
Augments Toll’s Footprint in Premier Coastal California Locations Toll will own or control approximately in premier coastal California locations Shapell communities are well located in the same coastal Northern and Southern California markets in which Toll operates today NorCal SoCal Alamo Creek and
Slide 20: Complementary Luxury Brand
Complementary Luxury Brand Pro Forma ADP vs. Peers Most Recent Quarter; Home Deliveries $1,162 $853 $716 $703 $420 $366 $349 $345 $341 $310 $299 $298 $291 $252 (1) TOL CA Shapell PF TOL TOL SPF TMHC NVR MDC MTH PHM KBH RYL LEN DHI (2) Home Closings PF Consolidated Toll Toll Standalone Shapell Standa
Slide 21: Demographics Support Incremental Investment in California
Demographics Support Incremental Investment in California AnnualCaliforniaHousingStartsfrom 1970 – 2012 Distribution of Household Income Based on households with greater than $100,000 in income 700,650 $100,000 - $200,000 +, 25% $124,999, 32% 177,765/yr. $150,000 - 60,990/yr. $199,999, 23% $125,000
Slide 22: Toll's Conservative Long Term Leverage Strategy Remains in Place
Toll’s Conservative Long Term Leverage Strategy Remains in Place Toll’s conservative long term leverage strategy will remain in place after this transaction We believe our liquidity and balance sheet were helpful in winning this bid While our leverage ratios will rise at closing, we believe the retu
Slide 23: Conclusion
Conclusion We are very excited, and honored that the Shapell family has chosen Toll Brothers to continue on with their legacy This is a one-of-a-kind coastal California land portfolio that dovetails perfectly with our own footprint We have proven historical success in California markets We believe t