In an afternoon conference call yesterday, chief financial officer Joel H. Rassman said two-thirds of the second-quarter write-downs were attributable to the troubled markets in California, Nevada and Florida.
About $85 million of the pre-tax write-downs were from joint ventures that Toll has with other builders, primarily in those markets, but Rassman declined to assign amounts to specific joint projects, which is company policy.
Second-quarter 2008 results included other income of $60.6 million, $40.2 million of which was pre-tax net additional proceeds received from a condemnation judgment.
Second-quarter revenues fell 30 percent from the 2007 period, to $818.8 million from $1.17 billion.
Attributing the loss to weak demand in most of his company's markets around the country, chairman and chief executive Robert I. Toll added his voice to other major players in the residential construction industry by urging Congress to approve of tax credits to spur buying.
"Interest rates are low, supply is abundant, and a buyer's market prevails," Toll said. "With a little motivation, the new-home market could turn around, which would have a very positive impact on banks, bond prices and many other areas of the economy.
"Once home prices stabilize, Congress could then more successfully address mortgage issues; however, without stabilization of home prices, trying to address mortgage issues may be difficult, at best," Toll said.
Surprisingly, despite slower sales, material and labor costs are not falling all that much - only about $2,000 a house in the second quarter year over year - and "we don't expect that [decline] to continue for long," Toll said.
Land-sales revenue totaled $800,000 for the quarter, compared with $2 million in the period a year earlier.
The average price for a new-home contract signed in the quarter slipped to $590,000 from $711,000 a year earlier, and $634,000 in the first 2008 quarter.
