Douglas C. Yearley, Jr. – Chief Executive Officer and Director Martin P. Connor – Chief Financial Officer and Treasurer Robert I. Toll – Executive Chairman Kira Sterling – Chief Marketing Officer Gregg Ziegler – Senior Vice President Joe Sicree – Chief Accounting Officer Donald Salmon – President of TBI Mortgage Company

David Goldberg – UBS Securities LLC Ivy L. Zelman – Zelman & Associates Rob Hansen – Deutsche Bank Securities, Inc. Stephen East – ISI Group Joel T. Locker – FBN Securities, Inc. Stephen S. Kim – Barclays Capital, Inc. Adam Rudiger – Wells Fargo Securities LLC Joshua Pollard – Goldman Sachs & Co. Jade J. Rahmani – Keefe, Bruyette & Woods, Inc. Michael Rehaut – JPMorgan Dan Oppenheim – Credit Suisse Kenneth Zener – KeyBanc Capital Markets Inc. Jack Micenko – Susquehanna International Group, LLP. Buck Horne – Raymond James & Associates Alex Barrón – Housing Research Center LLC Desi DiPierro – RBC Capital Markets Timothy Jones – Moloney Securities Co., Inc.

Good afternoon. My name is Jackie, and I will be your conference operator today. At this time, I’d like to welcome everyone to the Toll Brothers Third Quarter 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. (Operator Instructions) Thank you. Mr. Douglas Yearley, you may begin your conference sir. Douglas C. Yearley, Jr.: Thank you, Jackie. Welcome and thank you for joining us. I’m Doug Yearley, CEO. With me today are Bob Toll, Executive Chairman; Marty Connor, Chief Financial Officer; Fred Cooper, Senior VP of Finance, International Development and Investor Relations; Joe Sicree, Chief Accounting Officer; Kira Sterling, Chief Marketing Officer; Don Salmon, President of TBI Mortgage Company; and Gregg Ziegler, Senior VP, Treasury. Before I begin, I ask you to read the statement on forward-looking information in today’s release and on our website. I caution you that many statements on this call are based on assumptions about the economy, world events, housing and financial markets, and many other factors beyond our control that could significantly affect future results. Those listening on the web can e-mail questions to rtoll@tollbrothersinc.com. As has been our regular practice, we are going to limit our prepared remarks to provide more time for Q&A. Since our detailed release has been out since early this morning and is posted on our website, I’m sure most have read it, so I won’t re-read it to you. Today, we announced results for revenues, contracts and backlog for our third quarter ended July 31, 2012. Our third quarter net income was $61.6 million, or $0.36 per share, compared to $42.1 million, or $0.25 per share in fiscal year 2011’s third quarter. Our net income included pre-tax inventory write-downs of $3.1 million and a net tax benefit of $18.7 million, compared to pre-tax inventory write-downs of $16.8 million, a $3.4 million pre-tax loss from early repurchase of debt and a net tax benefit of $38.2 million in fiscal 2011’s third quarter. Pre-tax income was $43 million, compared to $3.9 million in fiscal 2011’s third quarter. Fiscal year 2012 third quarter total revenues of $554.3 million and homebuilding deliveries of 963 units rose 41% in dollars and 39% in units versus fiscal year ’11. Net signed contracts of $674.4 million and 1,119 units rose 66% in dollars and 57% in units. Backlog of $1.62 billion and 2,559 units rose 59% in dollars and 44% in units. We ended this quarter with $877.4 million of cash and marketable securities and $819.2 million available under our bank credit facility. Our net-debt-to-capital ratio was 27.5%. While we have been opening on average 1.5 communities per week, we are selling out of existing communities and continue to see modest delays in some openings due to the complexities of the local land entitlement game. For these reasons we are modifying our community count projects and now expect to end fiscal year 2012 with between 225 and 235 selling communities, which is a slight decrease from our previous guidance of 230 to 245. Community count projections for fiscal year ‘13 will be discussed on our fourth quarter call. We're enjoying the most sustained demand we've experienced in over five years. In the past three quarters, the values of our signed contracts were up 45%, 51% and now 66% compared to fiscal year 2011. Three weeks into our fourth quarter, our non-binding reservation deposits, a precursor to future contracts are up 59% compared to the same period in fiscal year 2011. On a per community basis, our net signed contracts of 4.87 per community was the highest for the third quarter since 2006, up 39% versus 2011, 32% versus 2010, 37% versus 2009, 80% versus 2008 and 42% versus 2007. In addition, the markets that we would expect to be recovering, such as New York City, the entire Boston-to-Washington DC corridor, Dallas and Huston, Texas, San Francisco, Silicon Valley and costal Southern California, we have also seen improvement in areas written off by [some for debt], such as Phoenix, the Florida Gold Coast, and even the Detroit suburbs. The pace of our contract growth has far exceeded the national housing data as we are gaining market share. We attribute this to the strength of our brand, our excellent land position, our proven reputation for reliability and quality, our strong balance sheet and our seasoned management team. Additionally, as the only national home building company focused on the luxury market we are facing limited competition from the capital constrained small and mid-size private builders, who are our primary competition. This quarter we announced two exciting joint ventures, in late June, Mayor Bloomberg announced the team of Toll Brothers and Starwood Capital had been named to develop a luxury eco-friendly hotel in condominium community in Brooklyn Bridge Park on New York City East River. This site will include a 200 room hotel, which will carry Starwood Capital's one hotel brand and 159 condominium residences marketed under the Toll Brothers City Living banner. The development will feature unobstructed views of Lower Manhattan, the Brooklyn Bridge, the New York Harbor and the Statue of Liberty. We expect to begin condo sales in the spring of 2014. Also in late June, we announced the joint venture with Shea Homes to develop Baker Ranch in Lake Forest, Orange County, California. The project which is next to Irvine will be a highly amenitized size master-plan community with approximately 2,000 homes. Because it is a JV, the lots are not in our reported lot count. We expect to begin home sales in the spring of 2014. Finally, our Seattle division that started with the acquisition of CamWest last November is performing well. We are on pace with projections and have already added 350 new lots, the 1,500 we controlled it closely. We should soon be recognized as the leading builder of luxury homes in the Seattle market. We believe the housing recovery is being driven by pent-up demand, very low interest rates and attractively priced homes. Customers who have postponed buying for a number of years are moving into the market with an industry wide shortage of inventory in many markets, we are enjoying some pricing power. With operations in 20 states and 50 markets, we see the recovery occurring across most of our regions. With over 39,000 lots owned or controlled, a wide range of product lines and $1.7 billion of cash, marketable securities and available credit, we are positioned for growth. Now let me turn it over to Marty. Martin P. Connor: Thanks Doug. Third quarter homebuilding cost of sales as a percentage of home building revenues before interest and write-downs improved to 75.6%, compared to 76.8% in the second quarter and 76.6% in last year's third quarter. The year-over-year and quarter-over-quarter improvement was principally a result of mix with the largest driver being high margin, high-rise urban deliveries and 205 Water in Brooklyn and 1450 Washington in Hoboken. Third quarter interest expense including cost of sales was 4.7% of revenues, identical to last quarter and 65 points better than a year ago. Third quarter write-downs was $3.1 million. Third quarter SG&A improved 13.5% of revenues compared to 18.3% in the second quarter and 16.4% a year ago. This reduction was primarily result of higher revenues in the quarter compared to the previous quarter and the previous year. Our operating margin was 5.7% or $31.5 million. It feels good to be making money from operations again. In the third quarter, we recognized a tax benefit of $18.7 million related primarily to the release of reserves associated with completed tax audits or statute expirations. We do not expect the benefit of this nature in our fourth quarter. Subject to our normal caveats regarding forward-looking statements, in today's release and then in our SEC filings, we offer the following limited guidance. We expect that deliveries in the fourth quarter will be between 800 and 1,000 homes bringing total deliveries in 2012 to between 3,000 and 3,200 homes. We estimate the average delivered price per home for the fourth quarter will be between $570,000 and $590,000. We believe our Q4 gross margins will decline modestly due to a significant reduction in the number of deliveries from our fully owned urban New York, New Jersey high-rise projects, which results from reduced supply. Finally as Doug mentioned the guidance on the range of selling communities expected at year-end has been revised to a range of 225 to 235 from 230 to 245. At this point, I’ll turn it over to Bob. Robert I. Toll: Thanks Marty. Housing is on demand, and we are very encouraged by our results. We do remain cautious in our optimism as we believe consumer confidence remains fragile, subject to the impact of negative economic and political headlines. With our strong land position and access to capital, we foresee increased opportunity for profit and growth. As housing demand marches towards historic norms, we envision a significant industry-wide supply-demand imbalance due to a shortage of "ready-to-build-on" home sites. In most markets, complex land entitlement processes make it very difficult to quickly get land approved and new homes into production. Therefore, after almost every recession, this supply-demand imbalance has led to significant home price increases, as accelerating customer appetite bumps up against very minimal supply. These rising home prices have caused many homeowners to once again feel more comfortable with their net worths, which in turn fuel the economy’s expansion, which then spurs greater demand for housing. We believe this patter will occur this cycle as well. Thanks for listening. Now, I’ll turn it back to Dough. Douglas C. Yearley, Jr.: Thanks Bob. Before we open it up for questions, I want to acknowledge the tremendous effort put forth by Toll Brothers Associates not just for the past few quarters, but over the past six years during the toughest time in the history of our industry. We are seeing better times, and they deserve all of the credit for their dedication, determination and commitment to our customers, our capital providers and our shareholders. Thank you to all those who have worked so hard. Jackie, let’s open it up to questions.

(Operator Instructions) Your first question comes from the line of David Goldberg with UBS. David Goldberg – UBS Securities LLC: Hello, everybody. Can you hear me okay? Douglas C. Yearley, Jr.: We can David. Robert I. Toll: Perfectly. David Goldberg – UBS Securities LLC: Perfect. I was wondering if you can give some more color on the delays you’re talking about the new community openings, what is specifically kind of it slowing down these new communities and is it just a matter of – it’s going to take couple of weeks or months relative to your expectations or is it kind of combination with selling out of the existing communities along with a little bit of administrative delay at this point? Douglas C. Yearley, Jr.: It’s exactly that, it’s both. We are selling out of existing communities faster than we had anticipated because the market has improved. And as is the case for our business since the beginning of the time, entitlements are very unpredictable, we do our best, but snags occur, delays occur and it’s part of the business, and we’ve had some modest slippage of new opening community – of new communities opening, and so it’s that plus the acceleration of the sell-out of the existing. Robert I. Toll: It’s a gain here. Just to see how long they can delay us, we invent new legal stratagems to bring this to market and they invent new blocks, so the game goes along it gets more complicated. David Goldberg – UBS Securities LLC: It makes sense. My follow-up question was actually – I want to talk – in the opening comments you guys talked about supply and demand, and the pent-up demand is getting triggered combined with the lack of supply in the market. And I guess, I want to ask something about theoretical question here, you had to weigh what was more important in the market today, if it’s really supply, the limited amount of supplies, maybe people who are buying the existing home market are now having go to the new home market. So just to know inventory out there or if it’s demand, how it’s kind of weigh those two factors, and if it’s kind of equal or even more demand weighted what’s doing that, given the fact if the macro backdrop is not that attractive, slow growth, not a lot of great job growth, not a real robust recovery that you see in the macro economy? Douglas C. Yearley, Jr.: First half of your question, the answer is clearly demand. It is driving our successes than the limited supply, and why is demand up in light of the macro trends people on the sidelines for seven years incredible interest rates comes more affordable than ever, families tired of waiting wanting to move on, and the investors tired of waiting wanting to downsize. It is just the building of demand through down-market confidence is up, and people are coming back out. David Goldberg – UBS Securities LLC: : Robert I. Toll: No. Douglas C. Yearley, Jr.: August 16, Census and Department of Housing and Urban Development were restate a single-family authorizations in July, we’re at a rate of 5.13. Last year the rate was 4.70, we’re going to have tremendous increase, going to show you that the demand is there. You yourself said slow growth, whether it’s slow or fast, its growth and with some growth you get some additional demand for housing, which first pricing increase. And when you get price increases you get more interest from people who have been sitting on the fence, at first the interest is just to fulfill desire to get a new better home. Second comes the desire not to miss out and as you see prices increase you’ll see more of that kind of demand, and the demand forces greater price increases and a [snowboard] cycle begins. And I think we’re at the beginning of the cycle that is no different than the five previous cycles we’ve seen, except this time we’ll fall the deepest, the darkest recession in housing that we’ve ever witnessed. I think we’re quite a few years away from nothing to worry about the buzz. But sooner or later the buzz will come; we just think it would be at least five or six years from now. David Goldberg – UBS Securities LLC: Got it. Thank you. Robert I. Toll: You’re welcome. Jackie?

Your next question comes from the line of Ivy Zelman with Zelman & Associates. Ivy L. Zelman – Zelman & Associates: Congratulation, it’s very exciting and I know how hard you guys have been working, so I just want to tell you it’s very – it’s a lot more fun, to be bullish you guys. But in any case I think, Doug, last quarter you were little bit tepid in your expectations for home price increases and yet we are sitting here in a situation where you are running through the communities at a faster pace and it’s obviously a nice problem to have, but why not push pricing today with a little bit more aggressive stance on it and what’s your position generally on price give your more tepid outlook on last quarters conference call? Douglas C. Yearley, Jr.: We are still scared Ivy. So the $10,000 price increase in 2005 is probably a $3,000 price increase today. We know our customers are coming back out, but they are a bid scared themselves. We’d love to build our backlog a little bit. We love to have the new price sheet effective Monday with an increase to show the clients over the weekend and it’s working, but we are being very careful. There are markets like New York City where we are more aggressive and we are doing what we did in ’05, which is really to push the price, but there is other locations where we feel good, but not great and the modest price increases are showing some strength, but we are being careful, we don’t get out too far on that thin branch. Ivy L. Zelman – Zelman & Associates: Okay. Well, I do respect that. My question would be and I’m not sure if David asked this, I apologize if it’s a repeat question. But there is a lot of concern in the market about the labor constraints and raw material inflation and generally being able to close your backlog given that we are seeing the industry struggle to meet this increased demand. Maybe you could just speak to that if you again didn’t already, I apologize. Douglas C. Yearley, Jr.: In most markets we are okay, there are limited locations where we are hearing about some labor issues. On the pricing front, lumber is up the most, it’s up about $11,000; and for the year, our costs were up about $29,000 that fortunately has been a little bit more than offset by the overall price increases that we’ve achieved and the reduction in incentives that we been able to achieve. But in most markets, we have pretty solid subcontractor bases that have been with us a long time and we are not concerned about a labor shortage right now, we are concerned about some price increase that we are trying to manage as best we can with long-term contracts. Ivy L. Zelman – Zelman & Associates: Okay. Thank you very much. Congratulations again. Douglas C. Yearley, Jr.: Thank you. Robert I. Toll: Thank you.

Your next question comes from the line of Rob Hansen with Deutsche Bank Securities, Inc. Rob Hansen – Deutsche Bank Securities, Inc.: Thanks. I just wanted to see if you could talk a little bit about the pricing and gross margin dynamic in 4Q and kind of specifically more what’s driving the prices a little higher from here, but margins decline a little bit? Douglas C. Yearley, Jr.: I think our expectation on margins really reflects that fact that we had significant volume delivered in the second and more so in the third quarter of our two fully consolidated buildings in Hoboken and Brooklyn, 1450 Washington and 205 Water respectively. We expect much less in closing in the fourth quarter and since those were high margins and were significant dollars in the third quarter and they are not going to be there in the fourth quarter they bring the average down. Rob Hansen – Deutsche Bank Securities, Inc.: Okay. And then what percent of closings during the quarter were in those high-rise buildings and how many do you have left? Douglas C. Yearley, Jr.: It was about 10% of our closings in the third quarter and we think it’s going to be in the neighborhood of 3% to 4% of our fourth quarter closings. Rob Hansen – Deutsche Bank Securities, Inc.: All right. Thank you very much. Douglas C. Yearley, Jr.: You are welcome.

Your next question comes from the line of Stephen East with ISI Group. Stephen East – ISI Group: Guys, you’ve talked about gross margin, you had tremendous amount of growth and you’ve got a big backlog, when you look at your SG&A, you’ve levered it this quarter, as you grow your revenue numbers, do you need to staff up, what should we expect from the SG&A line moving forward? Douglas C. Yearley Jr.: Well, opening 1.5 new communities per week will certainly lead to some increases in staffing. We cannot possibly do that with the staff we have, but there is capacity in our existing overhead as we increase sales paces on communities that are open. So if we go from 14 sales to 21 sales, it doesn’t necessarily mean we are adding a second construction manager or we’re telling the project manager you no longer oversee three communities you have to go back to overseeing just one. So you will not see the ramp up in overhead that will be consistent with the number of new openings, remember we also have many communities that are closing, so that frees up some people. So on the absolute dollar side SG&A will go up, but as a percentage of revenue we expect it to continue to come down. Right Marty? Martin P. Connor: I think that’s an accurate statement, now revenue moves up and down a little bit seasonally, so that will be a steady decline first and second quarter revenues are generally behind third and fourth quarter revenues, but the year-over-year trends that’s our objective, right. Stephen East – ISI Group: Okay. Doug, thanks. And then if we look at I’m going to combine two questions here and I will be done, if you look at one, could you give us an update what you’re seeing in the land market and then two; you had two regions that really offset into the spectrum in the west you really blew it out, and Northeast was some slow growth, can you talk about what’s going on in both of those? Douglas C. Yearley Jr.: Sure first on the land side, we spend $79 million this quarter on land plus $110 million give or take on the Baker Ranch deal which is a joint venture so that that’s in addition to the $79 million. The land market is good we’re seeing good deal flow, where we’ve got a lot of action. There aren’t too many bank deals right now, distressed deals most of what we see is back to the old fashioned talk to the farmer, talk to the developer, talk to the areas of state, they are good deals, we underwrite everything to work today. So we’re not building inflation in and mothballing new purchases for better times. So I’d say it’s not great, but it’s good and it’s been pretty consistent, land markets have been pretty consistent over the last year or so. Marty you want to take the second one. Martin P. Connor: Sure in terms of the west that’s an easier answer I think, it’s the addition of Seattle, which had contracts of I think 84 units in the quarter, and not in the quarter before or a year before. Stephen East – ISI Group: Okay. Martin P. Connor: And in terms of the Northeast or the Mid-Atlantic its north; it’s a little tougher to point anything in particular. I think it’s really a function of a lot of that market came back relatively solidly or better than the other geographies in 2010 and held there in 2011. And so it continues to be steady whereas the other three regions are showing significant growth. Stephen East – ISI Group: Okay. Thanks a lot. Robert I. Toll: It’s also a factor of the base that you’re comparing yourself to. I used to joke when Vegas was getting started, Vegas is up 100%, yeah it went from two homes to four, four to eight in the mean time New York has gone from 2000 to 2100% increases or much less but the volume was much greater. I think that’s filling some of these stats. Jackie.

Your next question comes from the line of Joel Locker with FBN Securities. Joel T. Locker – FBN Securities, Inc.: Just on – last call you mentioned that you had 90 mothball communities and you were going to open, I think three in fiscal 2012 and just I was wondering to get a update on if you’re planning to pull out some of the other 87 based on a stronger order? Douglas C. Yearley, Jr.: We have opened two year-to-date. We have one plant to be opened in fourth quarter. So that is consistent with our prior guidance of three. Next year we expect to open significantly more than that. I am sure, we’ll discuss it on our next call, and yes we study it all the time and the market improves, as long as we can hit that threshold profit margin, we are very anxious to open it. Joel T. Locker – FBN Securities, Inc.: All right, thanks a lot guys. Douglas C. Yearley, Jr.: Jackie?

Your next question comes from the line of Stephen Kim with Barclays Capital. Stephen S. Kim – Barclays Capital, Inc.: Thanks a lot guys. Before asking my first question, I just wanted to point out Marty that you made the comment that it feels good to make money again, but some of us have been around long enough to know, I think this is our first quarter were the company has actually made money on home building operating. So I think you sort of misspoke there. But I wanted to – talking about ancient history, I wanted to try to get a sense for how things in the market place are a little different than maybe they were in the past. In particular I am wondering if you have the data available what percent of your buyers don’t have a home to sell, I am wondering how this compares with you’ve traditionally seen and if it’s maybe began to change in anyway in the most recent couple of months? Martin P. Connor: Steve, we don’t have that data for you. Don Salmon is here, one of our mortgage company is indicating that the number is very small.

We have a few first time homebuyer Stratford Club, Marlboro Ridge, maybe, but not a lot. Martin P. Connor: And I think in some of our New York product we pulled people out of apartments. Douglas C. Yearley, Jr.: We do some of the candos. Martin P. Connor: But it may also be that they’ve – some of our buyers have sold their home and then they come find us. Stephen S. Kim – Barclays Capital, Inc.: That’s the essence of the question. Yeah. Martin P. Connor: Second hand markets are similar. Robert I. Toll: That is not on the shelf for our second home buyers.

They don’t have to look out to buy. Stephen S. Kim – Barclays Capital, Inc.: Okay, so you don’t have that data though, but okay, well that’s fine. The second question is sort of just a basic question. What is the dollar value of homes under construction that you had at the end of the quarter and how does that compare with where you were at this – in this quarter last year and if you have the first quarter that you’re – I'll take it as well. Robert I. Toll: It might be best to get back to you offline. Do you have it all here. Douglas C. Yearley, Jr.: Construction progress this quarter is just under $2 billion, a year ago it was $1.7 billion and just 90 days ago it was $1.8 billion. I think it was the three period that you asked for. Stephen S. Kim – Barclays Capital, Inc.: No, no the first quarter of ’12, that’s what I was looking for. Robert I. Toll: First quarter ’12, $1.8 billion. Stephen S. Kim – Barclays Capital, Inc.: Okay, got it great. Thanks a lot guys, I appreciate it. Robert I. Toll: You’re welcome. I mentioned Don Salmons name before. He runs TBI Mortgage. Don why don’t give the group a quick update on the mortgage market.

Sure. Rates are still extraordinarily low confirming 3.5 Doug, zero points in those markets. Jumbo was getting more and more available by the day in the last month or so we signed up two new jumbo investors, one with terrific rates spread between confirming and jumbo was now contracted to three quarters in play, which I don’t think has been there in a while. Another one of the investors is more of a niche type investor that open up more product launch force. We’re now on a street with 51 arm – jumbo 51 arm under 3%, a 71 arm jumbo is 3% and no points. There is nothing to complain about. Douglas C. Yearley, Jr.: LTV is still 71%, FICO score 760. Robert I. Toll: Yeah, LTV for the quarter was 72%, for the year 71%, 761 FICO score, so I mean its still – the basic bio profile hasn’t changed, it’s still very strong. Douglas C. Yearley, Jr.: Thank you. Jackie, back to you.

Your next question comes from the line of Adam Rudiger with Wells Fargo Securities. Adam Rudiger – Wells Fargo Securities LLC: I wanted to ask a bit about land, I’m just curious if you see some of the land deals across your desk maybe the once that you passed on, but then you then might see maybe competitors buy. I was curious what the gross margin difference was versus land, I know you might have brought during the downturn and really the genesis of the question is, just trying to understand what potential benefit going forward your longer land supply will provide you relative to shorter supply peers that were out more aggressively looking now? Douglas C. Yearley, Jr.: That’s a tough one Adam. We don’t know what margin the other guys are willing to buy land at, we don’t know all the assumptions that go into their pricing. In some cases, its right to say, they narrowly edges out, in other cases, we don’t understand where that numbers are coming from. It’s tough to quantify what benefit we think we have from having land and not having to go get it when we are sure, like some of the others may be dealing with. Adam Rudiger – Wells Fargo Securities LLC: Is it fair to say that you’re thinking many markets that your longer land supply is going to afford you better margins and those that are scrambling together now? Douglas C. Yearley, Jr.: I think that’s true. Much of the land we own and control has been with us for long time, some of it has been significantly impaired and we’re very comfortable with our pipeline, there are still good deals out there that can be found if you’re unhurt, and those are the deals that your writer getting priced up and in our opinion making more sense and those are the ones we stay away from and we're able to stay away from those deals because we have enough land owned. Adam Rudiger – Wells Fargo Securities LLC: I'm going to ask another one that may be tough to answer too, but if you think about may be 800 to 1 million single family start environment, what do you think the Toll income statements now look like from a perspective of community count revenues, margins and earnings. Broadly speaking when compared to say the last time you were at that level? Robert I. Toll: Go back and look as Bob, go back and look at where we were when we were doing those numbers, 2005 we were clocking from what 330 communities something like that. Martin P. Connor: Very close 325. Douglas C. Yearley, Jr.: But the housing starts were $2 million, when you have 800 to 1 million starts that half of ’05 market. Robert I. Toll: Fewer players in the market, right. We are more diverse, we have a lot more offerings out there and that’s I don’t think we’re prepared to answer that. And it’s what we are doing today is also the number like 600,000 starts, so if you put 25% to 50% on top of that. Martin P. Connor: It’s a guess. Robert I. Toll: It’s a guess. Adam Rudiger – Wells Fargo Securities LLC: Okay. I appreciate the time, thank you. Robert I. Toll: Commerce and housing side 517 and 513% of time lease and last year was 417. Take the number and double it that would put us double where we are, but I think we get some greater efficiencies, the overhead handles more, so we would do better than to double what we were doing now. Martin P. Connor: I would think our throughput for community would increase to a much greater phase than it is now and our community count would increase but not double. Adam Rudiger – Wells Fargo Securities LLC: All right. Robert I. Toll: Jackie?

Your next question comes from the line of Joshua Pollard with Goldman Sachs. Joshua Pollard – Goldman Sachs & Co.: Hey thanks for taking my question, you talked about mothball communities a little bit, could you talk about the speed at which you can bring those on, do you think you will face the same hurdles that you're facing, that's slowing down a little bit of your community count this year and also discuss what if any on the wholesale margin difference you guys would expect out of those. Douglas C. Yearley, Jr.: Yes we can bring them on quickly. The way we define mothball means it could open, so we are not talking about the delay in those final few permits. That frustrated us and with other communities that are still running through the process, as margin the reason there is still 90 on the mothball is because they don't work. So the market will have to improve for us to bring them online and that is happening in isolated locations that's why we have only brought three on to date, two on to date this year, one more coming. There are some locations where it could be years and those others that are very close to being reopened. Joshua Pollard – Goldman Sachs & Co.: I guess when you say don't work, the question is the fulcrum between working and not, is that today's margins or is that something lower, but still not that the teams levels where we were a few years back? Martin P. Connor: I think it is a combination of a number of those things it could be today's margins, it could be competing product we are already offering very close to those mothball communities and let's sell out of the existing products before we open up one of the mothballs. So it’s not cannibalized demand we have, so it’s combination of factors, Josh. Joshua Pollard – Goldman Sachs & Co.: Okay. And then on the inflation side you said cost up $2,900. I’m trying to understand are your cost of more end markets were you are able to raise prices more. In other words are you guys able to raise prices in areas where are you are seeing labor inflation on top of the more traditional commodity inflation. Douglas C. Yearley, Jr.: It right now is almost all commodity inflation. The local labor market pricing is flat in almost all of our markets, the $2,900 as I said $1,100 of the $2900 is lumber. And then grade number two was concrete I believe. Martin P. Connor: Yeah after that looks like year to date is concrete, yeah. Douglas C. Yearley, Jr.: Which was around…? Martin P. Connor: $750. Douglas C. Yearley, Jr.: So then 750, so we’re already up to 1850 out of 2900 between concrete and lumber. So as you can tell the labor component is a very, very small part of it. So the prices are not going up yet in the harder market because of our sale pace. Martin P. Connor: Well I wanted to emphasize that the price for selling the homes for us very little if any relationship to the cost- to the increased cost, we raised the prices according to demand not according to cost, cost has nothing to do with it. Joshua Pollard – Goldman Sachs & Co.: Okay. When we look at the M&A that we’ve seen across the builder space particularly of private builders you guys did, one in Seattle, I just would like to understand the appetite for that relative to buying land, it sort of – there's been a flurry out then here over the last year, but the sort of conversations that I've been having with you all and with other builders suggest that you guys don't really want to do that, you might rather buy the lands. So I'm wondering if over the last 12 months what's going on in the land market if even incrementally you guys have turned a little bit more towards looking at private builder deals. Douglas C. Yearley, Jr.: We’ve acquired seven builders in 17 years, in every case it was to enter a new market. We’re very happy with our geographic footprint right now. The last market we wanted to get into was Seattle. That was the final market of the top 15 most affluent that we were not in. We would rather pick off individual parcels of land that work, than buy a builder who has the portfolio of great land, good land, average land and bad land, which just doesn’t make sense for us to do that in existing markets, where we have the operations, we have the brand. So right now our strategy is to go after the individuals pieces. Joshua Pollard – Goldman Sachs & Co.: Okay. But in fact it’s equivalent last one in. I'm trying to understand your decision to be fully consolidated versus joint ventures, both on sort of a bit bigger master plan, community dealers, you guys are doing but also on some of the high raise stuff, you guys obviously have the expertise on the building side, clearly have it on the land development side and have time to capital. So I'm trying to understand, what's really the decision point for fully consolidated versus joint ventures? Thanks guys. Douglas C. Yearley, Jr.: It’s the way we are permanently get into the deal generally. You are right we would prefer to be consolidated knowing the whole thing, but if the landowner controller says, you can come into my house as long as you let me stay here and have a couple of bedrooms, well for good food we go, so that’s how we get most of our consolidated deals. I asked a question by Steve Sullivan through the Internet, Bob given the changing dynamics of the industry this year would you be surprised to see consolidation occurring over the next 12 months or so. Yes, I would be surprised. Thank you, Steve. I’ve got a question sent via from Mark Greefield about some data for CamWest, what were the units that we – what were the contracts we had in the first and second quarter to complement the 83 we mention in the third quarter. We had 90 in the second quarter and two in the first quarter. Recall that in the first quarter we were little stringent on our definition of a deposit. So about 20 deposits, we took in the first quarter we did not classify as contracts until the second quarter. Jackie?

Your next question comes from the line of Jade Rahmani with KBW. Jade J. Rahmani – Keefe, Bruyette & Woods, Inc.: Thanks very much. This is Jade Rahmani. Just wanted to ask, can you quantify how much equity capital you current have invested in City Living and how many buildings or units will be actively delivering in 2013. Robert I. Toll: Great, sort of look that up for us. In the mean time I had a question send via email about the increase in our joint ventures year-over-year. The predominant increase is associated with the 400 Park Avenue project we’re doing with Equity Residential as well as the $110 million investment we made in the Baker Ranch project out in Orange County. Gregg is still pointing over the second question I had. Structurally has anything changed in the past few years compared with the history that might restrict our ability to get back to what somebody else’s definition on normalized earnings might be. And I think there is two offsetting factors, first, since the beginning of the downturn, we’ve begun to expense stock options through our income statement as the rest of the industry, offsetting that drag, if you will prospectively is the fact that we’ve learned a lot of lessons as we gone through this and we built some efficiencies into our operations. Douglas C. Yearley, Jr.: It looks the City Living brand, which again include joint ventures and Philadelphia besides New Jersey and New York, 2013 should have 12 communities delivering out of it, but two or three at the max, we only have a few units left but not as material as the other ones. Total capital invested today, I don’t have for you I’m sorry. Jade J. Rahmani – Keefe, Bruyette & Woods, Inc.: Okay. And then just a follow-up again on City Living, when we think about the terrain given that how high the price point is, is there any initial parameters you could tell us about how to think about the incremental impact on margins it could have? Martin P. Connor: I think we will give you a little bit more detail on that as we ramp up to fourth quarter, but we expect the terrains deliver in the first and second quarter of 2013. Douglas C. Yearley, Jr.: There is one unit left for $20 million. Don’t miss it. We had a $17.5 million offer on it and we kicked them out. Jackie?

Your next question comes from the line of Michael Rehaut with JPMorgan. Michael Rehaut – JPMorgan: Thanks. Good afternoon, everyone. Robert I. Toll: Hi, Rehaut. Michael Rehaut – JPMorgan: First question, I was hoping to get a little bit more color on the gross margin and it was helpful to hear about the mix really influencing the quarter-to-quarter movement. You said that 10% of the closings in the third quarter where from, and I just wanted to clarify that I guess was it from those two specific buildings or your overall City Living? Douglas C. Yearley, Jr.: Those two specific buildings. Michael Rehaut – JPMorgan: Okay, so thinking more broadly I guess about City Living and multifamily as a percent of your overall business on a consolidated basis, can you give us a sense of where you are right now and it does margins in general – I mean is it just the City Living margins as part of the multifamily effort that are really the higher above corporate average margins? Douglas C. Yearley, Jr.: Yes. Michael Rehaut – JPMorgan: And so where is City Living overall as a percent of the business today versus a year ago and where do you think it could be three or four years from now as the single-family business would ostensibly come back stronger? Martin P. Connor: City Living is 10% to 15% depending on whether you are counting closings or orders. It is 10% to 15% because it is by far the best performer, so as the other groups come back, I think it will stay where it is or possibly shrink. We do have 14 future buildings coming online that where we own or control the land and we are hunting for more deals every day. So I think the City Living group will continue to grow, but probably not grow as fast as the rest of the business through the recovery. Robert I. Toll: It is more difficult to find the territory that will support the City Living brand. It is hard in an average week we must approve two to three new land deals to resultant communities more than that three or four and I don’t see us being that fortunate because we are restricted by the territories that support the product. With the ordinary land deals, you’re talking about 50 markets; with the City Living brand, you're talking about three markets, four markets the best, so it is going to be hard to increase that above 10% or 15%. Michael Rehaut – JPMorgan: Okay. I appreciate that. Next question on the SG&A, you had great leverage this quarter. I think if you calculate sequentially 2Q to 3Q, your variable SG&A was less than 4%, so great job there. The question is, is that 4% type number something that we should think about on a go-forward basis and I’m not really trying to get into 2013 guidance or fiscal ’13 guidance, but just conceptually, as you are perhaps growing your community count, I’d think that the variable SG&A or that 4% would be maybe a little higher as you are adding on some level of additional personnel, et cetera. Just thoughts on how to think about that? Douglas C. Yearley, Jr.: It sounds like you have an opinion and I am not going to disagree with it. Michael Rehaut – JPMorgan: Okay. One last quick one if I could. You mentioned, Doug, I think in your opening comments that you pointed to some pricing power and that the recovery across most of the regions. So it would be helpful if you could give us a sense of not necessary to ask for the old report card, but if there are areas of strength or weakness from a pricing standpoint across your markets that would be helpful? Martin P. Connor: We’ve experienced price increases or imposed price increases in about 50% to 60% of our communities. There are others where during special sales events, we maybe increasing an incentive for a limited time, so it can go the other way, in isolated cases. The most pricing power, we’ve said it thousands of times is New York City. The entire Boston-to-Washington corridor where 60% of our action is located, it has good pricing power in individual locations remember how very local this business is, one side of Philadelphia maybe different than the other, one community maybe different than another. As you head south; Raleigh and Charlotte, I’d say Charlotte has a little more pricing power than Raleigh, they are both okay improving markets. Florida, it’s been great, best in six years, we are selling through this summer in the Gold Coast where everybody have returned to the east to the Northeast and the Midwest and in limited locations like where we have lots on the intercoastal, we have pricing power. Robert I. Toll: We weren’t disposed to increase price, we review every community every week. And initially we weren’t disposed to increase the price, but the regional price and pointed out that was – we only have six left they’re not making a lot more of these lots, and we wanted to raise it, we raised it and we kept right on selling now we haven’t raised it. It’s very community-by-community kind of thing. Texas we have pretty good price environment… Douglas C. Yearley, Jr.: Texas, I was going to get to that next, Houston, Dallas and we’re very small in San Antonio, but doing well, all three of those markets, we have pricing power. They get filled still pretty flat. Phoenix sales are up, but I wouldn't say, we have a lot of pricing power. California, Silicon Valley, hot, we just – wish we had more. San Francisco, strong; coastal Southern California, Orange County and northern San Diego County, are very strong. Colorado, some pricing power, we’ve really grown there, done a great job with expansion and we’re happy. And then last and sadly least is the Midwest, where we're very small in Minneapolis, we just had a new opening, that we're excited about. Chicago was still very slow and suburbs Detroit is our best Midwestern market, we’re looking to grow, we've actually had one community that we'd raise price in and the lows are returning, the auto industry is stable and growing again and we're encouraged. So I guess that round up, we’d tell you what I start with, which is 50% to 60% of our communities we’re seeing some price increases. We’re continuing to be careful because we know our clients are motivated, but scared and we will plan accordingly. Michael Rehaut – JPMorgan: And Seattle? Douglas C. Yearley, Jr.: Sorry, Seattle, what we talked about earlier. Seattle prices are going up and we have a couple of new openings that look like they should be very successful. Robert I. Toll: Jackie?

Your next comes from the line of Dan Oppenheim with Credit Suisse. Dan Oppenheim – Credit Suisse: Thanks very much. I was wondering, just on that pricing issue, I guess you’ve talked again about being scared on it, what gets you to sort of jump off at the end of the diving board there, is it really just looking at the remaining supply in that community, is it just looking at the absorption or it see staying around Monday evenings and deciding, okay, let’s go head with it. I’m wondering a little bit more in terms of what’s driving that in terms of the obviously community-by-community, but what the key there is and then have you seen any appraisal issues at all where you have been raising prices? Robert I. Toll: Pretty much of escape the appraisal issues and the difficult mortgage issues, its more of a pain to get a mortgage than it used to be, but we have the staff, we have the experience to put up with the pain and therefore we don’t have much trouble with the mortgages. With respect to the pricing that Doug was describing, it comes from a weekly analysis of where you stand, if you’ve done one deposit every two weeks and you had it for 15 to 17 on a yearly basis, you don’t feel the strength to raise the power there, to raise the price there, even though two people last week might have come in and bought. On the other hand, if you get a deposit every week and you see that you’re headed for 25 in backlog, then you definitely want to give that kind community a kick; if you’ve got 30 in backlog, then you start to ask what are our production capabilities, can you feel this all within the next 12 months if you can. Well, if you can’t then why, how do we sell them at the price, let’s boost the price. So it goes pretty much community-by-community. Dan Oppenheim – Credit Suisse: Thanks. I guess, the other question, I’m wondering about some of the land, you talked about moving back to the former the developer, state sales and such. Wondering, if you are getting much sourcing of land from Gibraltar and just the relationships from that, are you seeing more opportunities there as opposed to the more typical developer deals? Robert I. Toll: Yeah, Gibraltar has not yet sourced to Toll Brothers with a single community, we just talked about one yesterday that has the potential to become the first, Toll Brothers community acquired from Gibraltar, the deal flow into Gibraltar right now is pretty good, as you saw this quarter compared to last, their profit will be lumpy, as they work through the various loans that they have acquired, and we’re very happy with how that group is performing, but it was never intended to be a source of land for Toll Brothers and that continues to be the case. Robert I. Toll: Two differences. Dan Oppenheim – Credit Suisse: Thanks. Douglas C. Yearley, Jr.: You’re welcome.

Your next question comes from the line of Ken Zener with KeyBanc Capital Markets. Kenneth Zener – KeyBanc Capital Markets Inc.: Can you hear me? Robert I. Toll: Yes, we can. Kenneth Zener – KeyBanc Capital Markets Inc.: Okay great. Just, so I don’t forget it what is the existing DTA, within the historical context could you help us think about the decline in interest expense in gross margins? It was 5.1 in 1Q, 4.7 in 3Q, but that’s well above the low two range, we saw in ’04 and ’07, I think that’s going to be a big driver of your gross margin, so as you look out ’13, ’14, not explicit guidance, but what would be the driver in terms of turnover that would bring that lower. Martin P. Connor: The deferred tax asset is $429 million, $350 million that is Federal and the balance is state. In terms of the interest as a percentage of cost of sales that’s really a function of velocity on sales. If you open a community like we did in ’14, ’15 Washington and 205 warrants, so out of it real quick, you’re going to have interest as a percentage of revenue, but it’s much lower. If it had land for a while like we have in some of our other communities, it’s going to be higher. So what we’ve seen is an increase in pace, which accelerates the sale out of the communities and reduces the interest as a percentage of revenue from the mid fives where it was a year ago or two years ago? Down to 4.7, if that continues we would expect it to go down further. Kenneth Zener – KeyBanc Capital Markets Inc.: Okay. And then as the recovery slowly unfold, I think one of the bigger challenges is how builders like yourself have bought a lot of land at the bottom verse those that didn’t buy as much, but you said when you bought the land and then work at then, which sounds better now. Current absorption pace, so are you inclined to open up all the new land once development is done, which is different than the mothball and could you quantify how many of your lots are in communities were bought from the bottom, thank you. Douglas C. Yearley, Jr.: If we have all permits and approvals we are inclined to open for sale, unless there is some strategic reason not to because we are selling right next door that is rare. Sometimes we buy particularly in a downturn when you are working with the bank, and they want to sell it as is. Land that doesn’t’ have all entitlements that is the exception. That is how we built the company, but that does happen on occasion and I think we quantify the risk and take the right discount on the land purchase. So not everything we are buying through the downturn is ready to go today. But if it is we tried to open it. In terms of how much we bought through the downturn. Gregg can you put your finger on it.

No, I wasn’t going to say that as much as looking at the number of improved lots. They are selling out at 12,000, so a good portion of them are going to be from historical purchases and then outside of that everything else is sitting out various stages of improvement. So maybe another of the other 17,000 lots of – that’s hard to say how much of that is from old versus new. I don’t have a good answer for you specifically breaking it out. Douglas C. Yearley, Jr.: Each quarter we indentify how much capital we put out for new deals and you could certainly go back and add that up quarter-by-quarter until the beginning of the downturn that wouldn’t give you the lot count, but it will give you an idea on how much money we’ve spent.

It doesn’t seem when we contracted. Robert I. Toll: Speak up please, I can’t hear you.

It doesn’t take into account the – when we contracted, certainly then maybe a couple of several year lag on contract to acquisition of the land. Douglas C. Yearley, Jr.: Right. Some of the dollars spend is on old option contracts, but it still work. Robert I. Toll: That’s right. Douglas C. Yearley, Jr.: Or it could be new deals that we just found.

Right. Robert I. Toll: The final part of your question comparing the returns on mothball land to land we’ve bought through the downturn, if we did it right, the land we bought through the downturn worked that’s why we bought it and the mothball in many cases still doesn’t work. So I would hope that the new purchases over the last five years are coming online as soon as they can because they make sense and they make money. Douglas C. Yearley, Jr.: There are some instances where we have bought in the last five years with the intention of mothballing of course it was in such good territories such Washington DC, Northern Virginia market where we have a bunch of lots. The carry of those lots when added to the profit that we can recognize if we wait until the next newer community is sold down, the county is insignificant compared to the pricing that we can get. If we bring it on, we can do business in both communities, but we make 1.5 times and therefore we’d rather wait and make 2 times on both of the communities because the caveats isn't so great for the second one. So we're fortunate we have a bunch of those cases. Jackie?

Your next question comes from the line of Jack Micenko with SIG. Jack Micenko – Susquehanna International Group, LLP.: Hi thanks for taking the question. On the 14 wholly-owned City Living project, how many sales offices do you expect to open of that 14 in 2013? Douglas C. Yearley, Jr.: Future buildings? Robert I. Toll: Future buildings? Jack Micenko – Susquehanna International Group, LLP.: Yeah. Douglas C. Yearley, Jr.: 2013 we have one new one in Hoboken. We have two new in Manhattan, and we have one new in Philadelphia. So I believe it will be five. Jack Micenko – Susquehanna International Group, LLP.: And how many units are behind those? Douglas C. Yearley, Jr.: How many units are in those four buildings? Jack Micenko – Susquehanna International Group, LLP.: Yeah. Douglas C. Yearley, Jr.: I'm going to give you a very, very round number, 500. Jack Micenko – Susquehanna International Group, LLP.: Okay. And then a little bit of broad based question, you have been in through a cycle or two. When does the private guy begin to resurface, is it material price increases, couple of banks have talked about re-entering the home-builder lending market in the past month or two. And I’m just – you’ve been around – when do they finally reemerge? Douglas C. Yearley, Jr.: You just put your finger on the key to the question. It is when the banks start talking about entering, it's got something to do with the memory span of the banking industry, when they get up, how badly they got cleaned by taking these deals and go back in that you start to get private companies once more entering the market and prospering and feel they are busting. Jack Micenko – Susquehanna International Group, LLP.: Okay, fair enough. Thank you. Douglas C. Yearley, Jr.: You’re welcome.

Your next question comes from the line of Buck Horne with Raymond James & Associates. Buck Horne – Raymond James & Associates: Good afternoon. I want to make sure I was interpreting a comment correctly, I just want to I guess the percentage of orders that came from the high rise projects in the quarter, was that 15% or that’s the number you were thinking about for the orders in the quarter. Douglas C. Yearley, Jr.: So total orders for City Living including JV, including Philadelphia was 7% based on unit and 10% based on dollars. Buck Horne – Raymond James & Associates: Perfect. And there is I guess one question that’s kind of lingering out there in terms of comparability of margins between builders, is there any chance you guys might be able to disclose the level of external sales commissions that might be embedded in your cost of sales. Douglas C. Yearley, Jr.: We got it, but whether we having here for this meeting, we can get that. Buck Horne – Raymond James & Associates: Okay. That would be great if I can follow-up with you on that. And I guess just related to the City Living concept, I guess you mentioned that in the recovery, you think that as the growth in the more traditional single family product recovers that City Living might decrease as a percentage of your company either in orders or closings and maybe I am confused about that maybe I am thinking that there is actually this demographic opportunity that you guys are just beginning to tap into and just maybe would you think there is a limiting factor on that in terms of the land availability that might constrain your ability to keep pace with the overall recovery in the City Living concept? Robert I. Toll: No, there’s plenty of land in royalty markets. And it’s highly competitive in very little land in good markets, and I would say it’s primarily a market constraint that keeps us down, I mean... Buck Horne – Raymond James & Associates: What do you think are the target markets that are viable? Robert I. Toll: We’ve got Washington, D.C., Boston, Philadelphia it’s a struggle but it’s our hometown and we can pick up a great deal there like every five years. One that's about it and how many more market are there, San Francisco we don't really have the expertise yet, no it’s about it, we don't have the expertise yet. Douglas C. Yearley, Jr.: Chicago doesn't work any more. Robert I. Toll: Yeah, Chicago, it’s a nightmare. Douglas C. Yearley, Jr.: Seattle we think one day. Robert I. Toll: Yeah. Douglas C. Yearley, Jr.: So, our downtown comes back. Robert I. Toll: So it’s just not that, I don't want to pick the meaning up, but those – it’s just not that many markets to contend with. Buck Horne – Raymond James & Associates: Okay, all right, thanks gentlemen. Robert I. Toll: But, it's 2.1% external commissions that we have as the cost of a house, in cost for sales.

Your next question comes from the line of Alex Barron with Housing Research. Alex Barrón – Housing Research Center LLC: Yeah, hi guys. You didn’t mentioned or I didn't hear any commentary about when you're going to the markets about – part of the Washington, D.C. area, I was recently there and I noticed that some of your projects in Northern Virginia were on fire, and the one’s in Maryland seemed a little slower. And I'm trying to understand, if what you guys think makes a difference between those two markets? Robert I. Toll: That's a great question. Every Monday we sit here and say, what’s the difference between Northern Virginia and Maryland, they used to be a lot more – what we can say is, there used to be a lot more action in Maryland than there is, Virginia has not only held up very well, but it is increasing now. It seems to be coming back much stronger, much faster, and I’d love to get the answer to the question if you get it from somebody else please give us a call. Alex Barrón – Housing Research Center LLC: All right. My second question was, can you guys elaborate or give us a little bit more detail or update on Gibraltar, what happened during the quarter that led to the slightly lower income? Robert I. Toll: I think it’s simply a fact that we didn’t have gains on foreclosure like we had the quarter before and we didn’t have gains on disposition like we had before. As we mentioned it’s a pretty lumpy business, we still have about $135 million invested in it and it will continue to be lumpy as frustrating as that maybe for you guys. Alex Barrón – Housing Research Center LLC: Thanks guys. Robert I. Toll: You are welcome. Jackie?

Your next question comes from the line of Desi DiPierro with RBC Capital Markets. Desi DiPierro – RBC Capital Markets: Hi, guys. Thanks for taking my question. Are there certain geographies or types of homes where you are gaining market share more than others? Robert I. Toll: Geographies where we’re gaining more than others, yeah, well, the whole Northeast sector. I think we are gaining more than others. In many markets, we are the market, you sell to us or you just sit. In mid Atlantic, there is still pretty good – well not Pennsylvania is probably, our market in Maryland and Virginia there is a lot more competition. Anything to add. Douglas C. Yearley, Jr.: Dallas and Houston where we’re growing rapidly. Robert I. Toll: Right. Douglas C. Yearley, Jr.: So it's a huge market with many players, but we are – even though our market share is very, very small, that's a big growth market for us. Martin P. Connor: So a little bit of the Vegas story that you went from 2 to 4, then 4 to 8. Robert I. Toll: Not any longer, you take a look at that, how many communities do we have in Dallas now? And we must have approved for this, I think (inaudible). Desi DiPierro – RBC Capital Markets: Okay, thank you. Robert I. Toll: You're welcome.

Your next question comes from the line of Timothy Jones with Moloney Securities. Timothy Jones – Moloney Securities Co., Inc.: (Inaudible). Robert I. Toll: Hi, Tim. Timothy Jones – Moloney Securities Co., Inc.: How are you? Robert I. Toll: Good, thanks, Timothy Jones – Moloney Securities Co., Inc.: Okay. Before can I get one thing straightened out on one of your biggest builders in the country, first of all are you in Atlanta? Robert I. Toll: No. Timothy Jones – Moloney Securities Co., Inc.: Okay, well do you mention for the two terrible markets, has been Minneapolis and Chicago. It is not in your price range, obviously, but could you – before I ask my question, could you address those two markets? And then I don't think the economies are that bad, but here is a guy that’s in the startup business and you’re in the move our business and you both met in those two markets, what is the situation there? Robert I. Toll: Well, in Minneapolis we didn’t think that it was a bad market, its constraint terribly by school systems. If you’re in the right school district, you’ve got good opportunity. If you’re in the wrong school district you’re dead. I think that the (inaudible), why is that, and then there is another school system that’s straight in Minneapolis. Chicago, Tim, we can’t figure out, it’s dead as a doornail. It has been very tough to market them, we see just a little bit of life now, maybe its just five years behind the rest of the market. Timothy Jones – Moloney Securities Co., Inc.: Is it over building there or what, I don’t think the economy is bad. Douglas C. Yearley, Jr.: Chicago has lost north of 300,000 jobs in the last two years. Timothy Jones – Moloney Securities Co., Inc.: What percentage of that? Douglas C. Yearley, Jr.: That I don’t know. Timothy Jones – Moloney Securities Co., Inc.: Okay. Douglas C. Yearley, Jr.: But my sources tell me that many of those jobs are high wage earners and that is not good for our market. Illinois is a very difficult state to do business in. Timothy Jones – Moloney Securities Co., Inc.: I know it is a disaster. Robert I. Toll: Well, thanks Tim. Timothy Jones – Moloney Securities Co., Inc.: I know what side of the isle you are on. Okay, here we go. The first question is, you were nice enough to break down the increases at cement and lumber. You know the gypsum manufacturers EXP and USG prices in the last six months were about 20% and 27%, double-digit for Orange County, yet none of the big builders are seen anything remotely like those type of price increases. If you net out the labor cost, they go with it. Why is that? Douglas C. Yearley, Jr.: Drywall for us is up $359 this year. Timothy Jones – Moloney Securities Co., Inc.: On a base of what? Douglas C. Yearley, Jr.: Per house. Robert I. Toll: Up $359, what’s the percentage increase is that. Timothy Jones – Moloney Securities Co., Inc.: Yeah, what’s the percentage increase? I bet you that’s 10%. Robert I. Toll: Less than 10%. Timothy Jones – Moloney Securities Co., Inc.: It’s exactly what the other people say. How about fiber glass? Robert I. Toll: Installations up $182. Timothy Jones – Moloney Securities Co., Inc.: That’s even less than 10%, way less than 10%. Robert I. Toll: Well, it is a lot less installation cost in house and drywalls. Timothy Jones – Moloney Securities Co., Inc.: I know that. It’s still less than 10%. Well, anyways you’ve answered my question on that. Bob, when you and I used to sit up in New York in the mid-80s, you used to sell three houses and you would automatically generally raise the price by $1,000. Robert I. Toll: Tim that was when we sold… Timothy Jones – Moloney Securities Co., Inc.: I understand that. Then you said in the good times back in 2005, you raised to $10,000 obviously that was 20 years later when you had it. But now what’s my question is, now you’re saying, you are raising them $3,000, are you raising them $3,000 like you used to raise and when you sold three to five of them and getting go ahead and automatically raise it, are you following that same model you did during the year – I don’t how many years ago, about 30 years ago. Robert I. Toll: Actually we go way back to 40 some odd years ago. Timothy Jones – Moloney Securities Co., Inc.: I know. Robert I. Toll: Yes, Tim, we are following pretty much the same model and thanks very much. Timothy Jones – Moloney Securities Co., Inc.: Okay. Douglas C. Yearley, Jr.: Jackie?

And there are no further questions at this time. Robert I. Toll: Hey, I like that. Thank you very much Jackie. Thank you everybody.

See you next quarter. Douglas C. Yearley, Jr.: Thank you.

This does conclude today’s conference call. You may now disconnect. Robert I. Toll: Thank you, Jackie.