794170--12/21/2009--TOLL_BROTHERS

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The homebuilding industry is undergoing a significant downturn, and its duration and levels of severity are uncertain in the current state of the economy. A continued slowdown in our business will continue to adversely affect our operating results and financial condition. Additional adverse changes in economic conditions in markets where we conduct our operations and where prospective purchasers of our homes live could further reduce the demand for homes and, as a result, could further reduce our results of operations and continue to adversely affect our financial condition. Continued cancellations of existing agreements of sale will have a continued adverse effect on our business. The homebuilding industry is highly competitive and, if others are more successful or offer better value to our customers, our business could decline. If we are not able to obtain suitable financing or our credit ratings are lowered, our business and results of operations may decline. If we cannot obtain letters of credit and surety bonds, our ability to operate may be restricted. If our home buyers or our home buyers buyers are not able to obtain suitable financing, our results of operations may further decline. If our ability to resell mortgages to investors is impaired, our home buyers will be required to find alternative financing. If land is not available at reasonable prices, our sales and results of operations could decrease. If the market value of our land and homes drops, our results of operations will likely decrease. Errors in estimates and judgments that affect decisions about how we operate and on the reported amounts of assets, liabilities, revenues and expenses could have a material impact on our results of operations. We participate in certain joint ventures where we may be adversely impacted by the failure of the joint venture or its participants to fulfill their obligations. Government regulations and legal challenges may delay the start or completion of our communities, increase our expenses or limit our homebuilding activities, which could have a negative impact on our operations. Increases in taxes or government fees could increase our costs, and adverse changes in tax laws could reduce demand for our homes. Adverse weather, natural disasters and other conditions could disrupt the development of our communities, which could harm our sales and results of operations. If we experience shortages or increased costs of labor and supplies or other circumstances beyond our control, there could be delays or increased costs in developing our communities, which could adversely affect our operating results. Product liability claims and litigation and warranty claims that arise in the ordinary course of business may be costly, which could adversely affect our business. Our principal stockholders may effectively exercise control over matters requiring stockholder approval. Our business is seasonal in nature, so our quarterly operating results fluctuate. Changes in accounting principles, interpretations and practices may affect our reported revenues, earnings and results of operations. Changes in tax laws or the interpretation of tax laws may negatively affect our operating results. We may not be able to realize our deferred tax assets. Our cash flows and results of operations could be adversely affected if legal claims are brought against us and are not resolved in our favor. Future terrorist attacks against the United States or increased domestic or international instability could have an adverse effect on our operations.

Full 10-K form ▸

794170--12/21/2009--TOLL_BROTHERS_INC