content: <PAGE>
                  SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C. 20549
                              FORM 10-Q
  
  
  (Mark One)
   X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  - ---  SECURITIES  EXCHANGE ACT OF 1934 FOR THE QUARTERLY
       PERIOD ENDED January 31, 1994
                                 OR
  - ---  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
       ________ TO ________ 
  
  Commission file number      1-9186
                              ------
    
  
                         TOLL BROTHERS, INC.
                  ---------------------------------
       (Exact name of registrant as specified in its charter)
  
  
             Delaware                         23-2416878
             ---------                        -----------
  (State or other jurisdiction of          (I.R.S. Employer
  incorporation or organization)          Identification No.)
  
  
  3103 Philmont Avenue, Huntingdon Valley, Pennsylvania 19006
  - ----------------------------------------------------- -----
      (Address of principal executive offices)       (Zip Code)
  
  
                           (215) 938-8000
                           --------------
        (Registrant's telephone number, including area code)
  
  
                           Not applicable
                         ------------------
  (Former name, former address and former fiscal year, if
   changed since last report)
  
  
  Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period
  that the registrant was required to file such reports), and (2) has been
  subject to such filing requirements for the past 90 days.
  
                      Yes  X             No 
                          ---              ---
  
  Indicate the number of shares outstanding of each of the issuer's classes
  of common stock, as of the latest practicable date:
  
    Common Stock, $.01 par value: 33,408,568 shares as of February 28, 1994
  
  <PAGE>
                TOLL BROTHERS, INC. AND SUBSIDIARIES
  
                                INDEX
  
  
  <TABLE>
  <CAPTION>
                                                                    Page No.
  <S>                                                              <C>
  PART I. Financial Information
  
          ITEM 1. Financial Statements
  
  
                  Condensed Consolidated Balance Sheets                1
                    January 31, 1994 (Unaudited) and 
                    October 31, 1993
  
                  Condensed Consolidated Statements 
                  of Income (Unaudited)                                2
                    Three Months Ended January 31, 1994 and 1993
    
                  Condensed Consolidated Statements 
                  of Cash Flows                                        3
                    (Unaudited)
                    Three Months Ended January 31, 1994 and 1993    
  
                  Notes to Condensed Consolidated Financial 
                  Statements                                           4
                    (Unaudited)
  
          ITEM 2.  Management's Discussion and Analysis of 
                   Financial Condition and Results of Operations       6
  
  
  PART II. Other Information                                           9
  
  
  SIGNATURES                                                          10
  </TABLE>
  
  <PAGE>
  <PAGE>1
  PART I.  ITEM 1.   FINANCIAL STATEMENTS
  
                TOLL BROTHERS, INC. AND SUBSIDIARIES
  
                CONDENSED CONSOLIDATED BALANCE SHEETS
                       (Amounts in thousands)
  
  <TABLE>
  <CAPTION>                                               January 31,    October 31,
                                                             1994           1993
                                                           --------       --------
                                                          (unaudited)     (Note 1)
  <S>                                                     <C>          <C>
  ASSETS 
  
    Cash and cash equivalents                              $ 55,436       $ 32,329
    Marketable securities, at cost which 
      approximates market                                         -          1,983
    Residential inventories (Note 2)                        428,720        402,515
    Property, construction and office equipment,
      at cost, net of accumulated depreciation of
      $11,281 at January 31, 1994 and
      $10,910 at October 31, 1993                            10,910         10,296
    Receivables, prepaid expenses and other assets           21,466         18,973
    Mortgage notes receivable                                 7,707          9,902
                                                           --------       --------
                                                           $524,239       $475,998
                                                           ========       ========
  
  
  LIABILITIES AND SHAREHOLDERS' EQUITY                                                      
    
    Loans payable                                          $ 14,067       $ 24,779
    Subordinated notes and debentures (Note 3)              231,957        174,442
    Customer deposits on sales contracts                     21,531         22,449
    Accounts payable                                         11,718         16,971
    Accrued expenses and other liabilities                   36,421         30,221
    Collateralized mortgage obligations                       8,967         10,810
  
    Income taxes payable:
      Current                                                10,107         15,471
      Deferred                                               12,932         13,849
                                                           --------       --------
                                                             23,039         29,320
                                                           --------       --------
  
            Total liabilities                               347,700        308,992
                                                           --------       --------
  
  
    Shareholders' equity (Note 3):
      Preferred stock                                             -              -
      Common stock                                              334            333
      Additional paid-in capital                             36,233         35,206
      Retained earnings                                     139,972        131,467
                                                           --------       --------
  
            Total shareholders' equity                      176,539        167,006
                                                           --------       --------
  
                                                           $524,239       $475,998
                                                           ========       ========
  </TABLE>
  
  
  
                       See accompanying notes
  
                                  1
  <PAGE>
  <PAGE>2
                TOLL BROTHERS, INC. AND SUBSIDIARIES
  
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME
            (Amounts in thousands except per share data)
                             (Unaudited)
  
  <TABLE>
  <CAPTION>
                                                                Three months
                                                              ended January 31
                                                             ------------------
                                                            1994           1993
                                                            ----           ----
                                                                         (Note 1)
  <S>                                                   <C>            <C>
  Revenues:
      Housing sales                                       $117,704        $75,461 
      Interest and other                                       424            333 
                                                          --------       -------- 
                                                           118,128         75,794 
                                                          --------       -------- 
  
  Costs and expenses:
      Land and housing construction                         89,758         54,459 
      Selling, general and administrative                   10,377          9,428 
      Interest                                               4,497          3,763 
                                                          --------       -------- 
                                                           104,632         67,650 
                                                          --------       -------- 
  
  Income before income taxes and                            13,496          8,144 
      change in accounting
  
  Income taxes                                               4,991          3,253 
                                                          --------       -------- 
                                                                   
  Income before change in accounting                         8,505          4,891 
  
  Cumulative effect of change in 
      accounting for income taxes                                -          1,307 
                                                          --------       -------- 
  
  Net income                                              $  8,505        $ 6,198 
                                                          ========       ======== 
  
  Income per share:
      Income before change in 
        accounting                                        $    .25        $   .15 
  
      Cumulative change in accounting                            -            .04 
                                                          --------       -------- 
  
      Net income                                          $    .25        $   .19 
                                                          ========       ======== 
  
  Weighted average number of shares                         33,740         33,433 
                                                          ========       ======== 
  </TABLE>
  
  
  
  
            
                       See accompanying notes
  
                                  2
  <PAGE>
  <PAGE>3
                TOLL BROTHERS, INC. AND SUBSIDIARIES
  
   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Notes 1 and 4)
                       (Amounts in thousands)
                             (Unaudited)
  <TABLE>
  <CAPTION>
                                                                           Three months
                                                                         ended January 31
                                                                        ------------------
                                                                       1994           1993
                                                                       ----           ----
  <S>                                                              <C>            <C>
  Cash flows from operating activities:
  
      Net income                                                     $ 8,505        $ 6,198 
      Adjustments to reconcile net income to 
        net cash used in operating activities:
  
          Depreciation and amortization                                  669            656 
          Net realizable provisions                                    2,575              - 
          Increase in residential inventories                        (30,130)       (29,938)
          Decrease (increase) in receivables, prepaid
            expenses and other assets                                    575           (123)
          (Decrease) increase in customer deposits on
            sales contracts                                             (918)           711 
          Decrease in accounts payable                                (5,253)        (1,149)
          Increase in accrued expenses and other
            liabilities                                                6,200          4,084 
          Decrease in current income taxes payable                    (5,364)        (1,148)
          Decrease in deferred income taxes payable                     (639)          (987)
                                                                    --------       -------- 
  
              Net cash used in operating activities                  (23,780)       (21,696)
                                                                    --------       -------- 
  
  Cash flows from investing activities:
  
      Sale of marketable securities                                    1,983          8,444 
      Purchase of property, construction and office 
        equipment, net                                                (1,025)          (343)
      Principal repayments of mortgage notes receivable                2,199          4,822 
                                                                    --------       -------- 
  
              Net cash provided by investing activities                3,157         12,923 
                                                                    --------       -------- 
  
  Cash flows from financing activities:
  
      Proceeds from loans payable                                     13,678          8,379 
      Principal payments of loans payable                            (24,422)        (9,177)
      Net proceeds from issuance of senior 
        subordinated notes                                            55,575              - 
      Principal payments of collateralized mortgage
        obligations                                                   (1,851)        (4,726)
      Proceeds from stock options exercised and employee
        stock plan purchases                                             750            610 
                                                                    --------       -------- 
  
              Net cash provided by (used in) financing
                activities                                            43,730         (4,914)
                                                                    --------       -------- 
  
  Net increase (decrease) in cash and cash equivalents                23,107        (13,687)
  Cash and cash equivalents, beginning of period                      32,329         33,407 
                                                                    --------       -------- 
  
  Cash and cash equivalents, end of period                           $55,436        $19,720 
                                                                    ========       ======== 
  </TABLE>
  
  
                       See accompanying notes
  
                                  3
  <PAGE>
  <PAGE>4
  
                TOLL BROTHERS, INC. AND SUBSIDIARIES
  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
                       (Amounts in thousands)
                             (Unaudited)
  
  1.    Basis of Presentation
  
        The accompanying unaudited condensed consolidated financial
        statements have been prepared in accordance with the rules and
        regulations of the Securities and Exchange Commission for interim
        financial information.  The October 31, 1993 balance sheet
        amounts and disclosures included herein have been derived from
        the October 31, 1993 audited financial statements of the
        Registrant.  Since the accompanying condensed consolidated
        financial statements do not include all the information and
        footnotes required by generally accepted accounting principles
        for complete financial statements, it is suggested that they be
        read in conjunction with the financial statements and notes
        thereto included in the Registrant's October 31, 1993 Annual
        Report to Shareholders.  In the opinion of management, the
        accompanying unaudited condensed consolidated financial
        statements include all adjustments, which are of a normal
        recurring nature, necessary to present fairly the Company's
        financial position as of January 31, 1994, and the results of its
        operations and cash flows for the three months then ended.  The
        results of operations for such interim period are not necessarily
        indicative of the results to be expected for the full year.
  
        During the fourth quarter of 1993, the Company adopted Statement
        of Financial Accounting Standard No. 109, "Accounting for Income
        Taxes", effective November 1, 1992.  This Statement requires a
        liability approach for measuring deferred taxes based on
        temporary differences between the financial statement and tax
        bases of assets and liabilities existing at each balance sheet
        date using enacted tax rates for years in which taxes are
        expected to be paid or recovered.  In accordance with  FASB 109,
        the cumulative effect of this change in accounting for income
        taxes of $1.3 million of income has been included in the
        consolidated statement of income for the quarter ended January
        31, 1993.  
  
        The net results of the Company's collateralized mortgage
        financing operations have been included in interest and other
        revenues.  Certain amounts for the three months ended January 31,
        1993 have been restated to reflect this treatment.
  
                                  4
  <PAGE>
  <PAGE>5
  2.    Residential Inventories
  
        Residential inventories consisted of the following:
  
  <TABLE>
  <CAPTION>
                                                          January 31,    October 31,
                                                             1994           1993
                                                          ----------     ----------
        <S>                                              <C>            <C>
           Land and land development costs                 $135,695       $122,258
           Construction in progress                         243,190        220,680
           Sample homes                                      17,374         15,297
           Land deposits and costs of future development     11,798         15,773
           Loan assets acquired for future development       13,352         21,873
           Deferred marketing and financing costs             7,311          6,634
                                                           --------       --------
                                                           $428,720       $402,515
                                                           ========       ========
  </TABLE>
  
        Construction in progress includes the cost of homes under
        construction, land and land development and carrying costs of
        lots that have been substantially improved.  
  
        The Company capitalizes certain interest costs to inventories
        during the development and construction period.  Capitalized
        interest is charged to interest expense when the related
        inventories are closed.  Interest incurred, capitalized and
        expensed is summarized as follows:
  
  <TABLE>
  <CAPTION>
                                                                 Three months
                                                               ended January 31
                                                              ------------------
                                                             1994           1993
                                                             ----           ----
       <S>                                               <C>            <C>
           Interest capitalized,
             beginning of period                           $38,270        $34,470 
           Interest incurred                                 5,076          4,317 
           Interest expensed                                (4,497)        (3,764)
           Write off to cost of sales                       (1,412)             - 
                                                          --------       -------- 
           Interest capitalized,
             end of period                                 $37,437        $35,023 
                                                          ========       ======== 
  </TABLE>
  
  
  3.    Public Offering of Convertible Senior Subordinated Notes
  
        In January 1994, the Company completed a public offering of $57.5
        million principal amount of 4 3/4% convertible senior
        subordinated notes due January 15, 2004.  The notes were issued
        at par by one of the Company's subsidiaries and are guaranteed by
        the Company.  The net proceeds from the sale of the notes,
        approximately $55.8 million, was or will be used to repay bank
        debt, acquire residential property and for general corporate
        purposes.  Pending such applications, the net proceeds are
        expected to be invested in high-grade, short-term, marketable,
        interest-bearing securities.  The notes are convertible into
        shares of common stock of the Company at the option of the
        noteholder at any time prior to maturity, unless previously
        redeemed, at a conversion price of $21.75 per share.
  
                                  5
  <PAGE>
  <PAGE>6
  4.    Supplemental Disclosures to Statements of Cash Flows
  
        The following are supplemental disclosures to the statements of
        cash flows:
  
  <TABLE>
  <CAPTION>
                                                                Three months
                                                              ended January 31
                                                             ------------------
                                                            1994           1993
                                                            ----           ----
       <S>                                               <C>            <C>
           Supplemental disclosures of cash
              flow information:
               Interest paid, net of amount capitalized    $   315         $  677 
                                                          ========       ======== 
  
           Income taxes paid                               $10,994         $4,078 
                                                          ========       ======== 
  
           Supplemental disclosures of non-cash
             financing activities:
           Income tax benefit relating to 
             exercise of employee stock options            $   278         $  415 
                                                          ========       ======== 
  </TABLE>
  
  
  PART I.  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS
  
  
  
  RESULTS OF OPERATIONS
  
  Homebuilding
  
  
  
  The following table sets forth, for the periods indicated, certain income
  statement items related to the Company's operations as percentages of
  total revenues and certain other data:
  
  <TABLE>
  <CAPTION>
                                                                 Three months
                                                               ended January 31
                                                               ----------------
                                                             1994           1993
                                                             ----           ----
       <S>                                               <C>            <C>
        Revenues                                             100.0%         100.0%
                                                             -----          ----- 
  
        Costs and expenses:
          Land and housing construction                       76.0           71.9 
          Selling, general and administrative                  8.8           12.4 
          Interest                                             3.8            5.0 
                                                            ------         ------ 
          Total costs and expenses                            88.6           89.2 
                                                            ------         ------ 
  
        Income before taxes and change in 
          in accounting                                       11.4%          10.7%
                                                            ======         ====== 
  
        Number of homes closed                                 386            250 
                                                            ======         ====== 
  </TABLE>
  
                                  6
  <PAGE>
  <PAGE>7
  Homebuilding revenues for the three months ended January 31, 1994 were
  higher than those of the comparable period of the prior year by
  approximately $42.3 million, or 56%. The higher revenues were primarily
  attributable to the increased number of homes closed, which was due to
  the significantly larger contract backlog at the beginning of fiscal
  1994, as compared to a year earlier.  In addition, the average sales
  price per home increased as a result of a change in product mix and due
  to a shift in the location of homes closed to more expensive communities. 
  The aggregate sales value of new contracts signed during the three months
  ended January 31, 1994 was $99.3 million (299 homes).  This compared to
  $88.2 million (290 homes) in the three months ended January 31, 1993.
  
  Land and housing construction costs as a percentage of revenues increased
  in the first quarter of 1994 as compared to the first quarter of 1993 due
  principally to a writeoff in fiscal 1994 of $2.6 million related to
  previously capitalized costs in one community which the Company no longer
  considered realizable, an increase in material costs (primarily lumber)
  and increased costs due to adverse weather conditions.
  
  Selling, general and administrative expenses were lower as a percentage
  of revenues in the first quarter of 1994 as compared to 1993 due to the
  increase in revenues year-to-year being greater than the increase in the
  costs incurred.  The increase in costs  was due primarily to an increase
  in selling expenses which were attributable to the increased number of
  homes closed during the 1994 quarter over the 1993 quarter and the
  increased number of communities in which the Company was offering homes
  for sale.
  
  Interest expense for the first quarter of fiscal 1994 was lower as a
  percentage of revenues and on a per home basis than in fiscal 1993.  On
  average, the land and land development costs associated with the homes
  closed in the fiscal 1994 quarter remained in inventory for a shorter
  period of time than those closed in the prior year.  In addition, the
  amount of interest incurred in recent years has declined as a percentage
  of inventory due to lower interest rates and the decline in the amount of
  debt in proportion to the amount of inventory.  Accordingly, less
  capitalized interest was accumulated on the homes closed in 1994 than on
  those closed in 1993.  
  
  Collateralized Mortgage Financing
  
  The Company has not chosen to participate in any collateralized mortgage
  financings since fiscal 1987.  Accordingly, revenues and expenses have
  declined in each successive year since then as a result of, and to the
  extent of, prepayments and normal amortization of the mortgage notes
  receivable.  The results of collateralized mortgage financing operations
  have been and are expected to continue to be insignificant to
  consolidated results of operations.  The net results of the
  collateralized mortgage financings are included in interest and other
  revenue.
  
  Income Taxes
  
  Income taxes for fiscal 1994 and 1993 were provided at effective rates of
  37% and 39.9% respectively.  The effective rate for the first quarter of
  fiscal 1994 was lower than the anticipated effective rate of 39% due
  principally to the recognition in the quarter of a benefit from the
  application of FASB 109 related to a change in the Company's projected
  tax rate on its deferred tax assets and liabilities.
  
  Effective November 1, 1992, the Company adopted Statement of Financial
  Accounting
  
                                  7
  <PAGE>
  <PAGE>8
  Standard No. 109, "Accounting for Income Taxes".  This Statement requires
  a liability approach for measuring deferred taxes based on temporary
  differences between the financial statement and tax bases of assets and
  liabilities existing at each balance sheet date using enacted tax rates
  for years in which taxes are expected to be recovered or paid.  The
  cumulative effect of this change in accounting for income taxes of $1.3
  million of income has been included in the consolidated statement of
  income for 1993.
    
  
  CAPITAL RESOURCES AND LIQUIDITY
  
  Funding for the Company's residential development activities is
  principally provided by cash flows from homebuilding operations,
  unsecured bank borrowings, and from the  public debt and equity markets. 
  
  
  The Company has a $150 million unsecured revolving credit facility with
  nine banks which extends through October 1996.  As of January 31, 1994,
  the Company had $10.0 million of loans and approximately $47.6 million of
  letters of credit outstanding under the facility. 
  
  In January 1994, the Company completed a public offering of $57.5 million
  principal amount of 4 3/4% convertible senior subordinated notes due
  January 15, 2004.  The notes were issued by one of the Company's
  subsidiaries and are guaranteed by the Company.  The net proceeds from
  the sale of the notes, approximately $55.8 million, was or will be used
  to repay bank debt and for general corporate purposes and working capital
  needs. Pending such applications, the net proceeds are expected to be
  invested in high-grade, short-term, marketable, interest-bearing
  securities.
  
  The Company has not participated in collateralized mortgage financing
  activities since 1987 and the effect on consolidated capital resources
  and liquidity is insignificant.  
  
  The Company believes that it will be able to fund its activities through
  a combination of operating cash flow, cash balances and existing sources
  of credit.  
  
                                  8
  <PAGE>
  <PAGE>9
  PART II.  Other Information
  
  
  ITEM 1.   Legal Proceedings
  
            None.
  
  ITEM 2.   Changes in Securities
  
            None.
  
  ITEM 3.   Defaults upon Senior Securities
  
            None.
  
  ITEM 4.   Submission of Matters to a Vote of Security Holders
  
            None.
  
  ITEM 5.   Other Information
  
            None.
  
  ITEM 6.   Exhibits and Reports on Form 8-K
  
            Exhibits   None.
  
  ITEM 7.   Reports on Form 8-K
  
            Form 8-K dated December 17, 1993 related to the adoption by
            the Board of Directors, subject to shareholder approval of
            the Toll Brothers, Inc. Key Executives and Non-Employee
            Directors Stock Option Plan (1993) and the Toll Brothers,
            Inc. Cash Bonus Plan.
  
                                  9
  <PAGE>
  <PAGE>10
  
                             SIGNATURES
  
  
  
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  
                                    TOLL BROTHERS, INC.
                                       (Registrant)
  
  
  
  Date: March 11, 1994           By:  /s/ Joel H. Rassman
        --------------                ----------------------
                                       Joel H. Rassman
                                       Senior Vice President,
                                       Treasurer and Chief
                                       Financial Officer
  
  
  
  
  Date: March 11, 1994           By:  /s/ Joseph R. Sicree
        --------------                -----------------------
                                       Joseph R. Sicree
                                       Vice President -
                                       Chief Accounting Officer
                                       (Principal Accounting 
                                        Officer)
  
  
  
  
  
  
  
  
                                 10
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text: SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C. 20549
                              FORM 10-Q
  
  (Mark One)
   X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  - ---  SECURITIES  EXCHANGE ACT OF 1934 FOR THE QUARTERLY
       PERIOD ENDED January 31, 1994
                                 OR
  - ---  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
       ________ TO ________ 
  
  Commission file number      1-9186
                              ------
    
  
                         TOLL BROTHERS, INC.
                  ---------------------------------
       (Exact name of registrant as specified in its charter)
  
             Delaware                         23-2416878
             ---------                        -----------
  (State or other jurisdiction of          (I.R.S. Employer
  incorporation or organization)          Identification No.)
  
  3103 Philmont Avenue, Huntingdon Valley, Pennsylvania 19006
  - ----------------------------------------------------- -----
      (Address of principal executive offices)       (Zip Code)
  
                           (215) 938-8000
                           --------------
        (Registrant's telephone number, including area code)
  
                           Not applicable
                         ------------------
  (Former name, former address and former fiscal year, if
   changed since last report)
  
  Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period
  that the registrant was required to file such reports), and (2) has been
  subject to such filing requirements for the past 90 days.
  
                      Yes  X             No 
                          ---              ---
  
  Indicate the number of shares outstanding of each of the issuer's classes
  of common stock, as of the latest practicable date:
  
    Common Stock, $.01 par value: 33,408,568 shares as of February 28, 1994
  TOLL BROTHERS, INC. AND SUBSIDIARIES
  
                                INDEX
  Page No.
  PART I. Financial Information
  
          ITEM 1. Financial Statements
  
                  Condensed Consolidated Balance Sheets                1
                    January 31, 1994 (Unaudited) and 
                    October 31, 1993
  
                  Condensed Consolidated Statements 
                  of Income (Unaudited)                                2
                    Three Months Ended January 31, 1994 and 1993
    
                  Condensed Consolidated Statements 
                  of Cash Flows                                        3
                    (Unaudited)
                    Three Months Ended January 31, 1994 and 1993    
  
                  Notes to Condensed Consolidated Financial 
                  Statements                                           4
                    (Unaudited)
  
          ITEM 2.  Management's Discussion and Analysis of 
                   Financial Condition and Results of Operations       6
  
  PART II. Other Information                                           9
  
  SIGNATURES                                                          10
  1
  PART I.  ITEM 1.   FINANCIAL STATEMENTS
  
                TOLL BROTHERS, INC. AND SUBSIDIARIES
  
                CONDENSED CONSOLIDATED BALANCE SHEETS
                       (Amounts in thousands)
  January 31,    October 31,
                                                             1994           1993
                                                           --------       --------
                                                          (unaudited)     (Note 1)
  ASSETS 
  
    Cash and cash equivalents                              $ 55,436       $ 32,329
    Marketable securities, at cost which 
      approximates market                                         -          1,983
    Residential inventories (Note 2)                        428,720        402,515
    Property, construction and office equipment,
      at cost, net of accumulated depreciation of
      $11,281 at January 31, 1994 and
      $10,910 at October 31, 1993                            10,910         10,296
    Receivables, prepaid expenses and other assets           21,466         18,973
    Mortgage notes receivable                                 7,707          9,902
                                                           --------       --------
                                                           $524,239       $475,998
                                                           ========       ========
  
  LIABILITIES AND SHAREHOLDERS' EQUITY                                                      
    
    Loans payable                                          $ 14,067       $ 24,779
    Subordinated notes and debentures (Note 3)              231,957        174,442
    Customer deposits on sales contracts                     21,531         22,449
    Accounts payable                                         11,718         16,971
    Accrued expenses and other liabilities                   36,421         30,221
    Collateralized mortgage obligations                       8,967         10,810
  
    Income taxes payable:
      Current                                                10,107         15,471
      Deferred                                               12,932         13,849
                                                           --------       --------
                                                             23,039         29,320
                                                           --------       --------
  
            Total liabilities                               347,700        308,992
                                                           --------       --------
  
    Shareholders' equity (Note 3):
      Preferred stock                                             -              -
      Common stock                                              334            333
      Additional paid-in capital                             36,233         35,206
      Retained earnings                                     139,972        131,467
                                                           --------       --------
  
            Total shareholders' equity                      176,539        167,006
                                                           --------       --------
  
                                                           $524,239       $475,998
                                                           ========       ========
  See accompanying notes
  
                                  1
  2
                TOLL BROTHERS, INC. AND SUBSIDIARIES
  
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME
            (Amounts in thousands except per share data)
                             (Unaudited)
  Three months
                                                              ended January 31
                                                             ------------------
                                                            1994           1993
                                                            ----           ----
                                                                         (Note 1)
  Revenues:
      Housing sales                                       $117,704        $75,461 
      Interest and other                                       424            333 
                                                          --------       -------- 
                                                           118,128         75,794 
                                                          --------       -------- 
  
  Costs and expenses:
      Land and housing construction                         89,758         54,459 
      Selling, general and administrative                   10,377          9,428 
      Interest                                               4,497          3,763 
                                                          --------       -------- 
                                                           104,632         67,650 
                                                          --------       -------- 
  
  Income before income taxes and                            13,496          8,144 
      change in accounting
  
  Income taxes                                               4,991          3,253 
                                                          --------       -------- 
                                                                   
  Income before change in accounting                         8,505          4,891 
  
  Cumulative effect of change in 
      accounting for income taxes                                -          1,307 
                                                          --------       -------- 
  
  Net income                                              $  8,505        $ 6,198 
                                                          ========       ======== 
  
  Income per share:
      Income before change in 
        accounting                                        $    .25        $   .15 
  
      Cumulative change in accounting                            -            .04 
                                                          --------       -------- 
  
      Net income                                          $    .25        $   .19 
                                                          ========       ======== 
  
  Weighted average number of shares                         33,740         33,433 
                                                          ========       ========
  See accompanying notes
  
                                  2
  3
                TOLL BROTHERS, INC. AND SUBSIDIARIES
  
   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Notes 1 and 4)
                       (Amounts in thousands)
                             (Unaudited)
  Three months
                                                                         ended January 31
                                                                        ------------------
                                                                       1994           1993
                                                                       ----           ----
  Cash flows from operating activities:
  
      Net income                                                     $ 8,505        $ 6,198 
      Adjustments to reconcile net income to 
        net cash used in operating activities:
  
          Depreciation and amortization                                  669            656 
          Net realizable provisions                                    2,575              - 
          Increase in residential inventories                        (30,130)       (29,938)
          Decrease (increase) in receivables, prepaid
            expenses and other assets                                    575           (123)
          (Decrease) increase in customer deposits on
            sales contracts                                             (918)           711 
          Decrease in accounts payable                                (5,253)        (1,149)
          Increase in accrued expenses and other
            liabilities                                                6,200          4,084 
          Decrease in current income taxes payable                    (5,364)        (1,148)
          Decrease in deferred income taxes payable                     (639)          (987)
                                                                    --------       -------- 
  
              Net cash used in operating activities                  (23,780)       (21,696)
                                                                    --------       -------- 
  
  Cash flows from investing activities:
  
      Sale of marketable securities                                    1,983          8,444 
      Purchase of property, construction and office 
        equipment, net                                                (1,025)          (343)
      Principal repayments of mortgage notes receivable                2,199          4,822 
                                                                    --------       -------- 
  
              Net cash provided by investing activities                3,157         12,923 
                                                                    --------       -------- 
  
  Cash flows from financing activities:
  
      Proceeds from loans payable                                     13,678          8,379 
      Principal payments of loans payable                            (24,422)        (9,177)
      Net proceeds from issuance of senior 
        subordinated notes                                            55,575              - 
      Principal payments of collateralized mortgage
        obligations                                                   (1,851)        (4,726)
      Proceeds from stock options exercised and employee
        stock plan purchases                                             750            610 
                                                                    --------       -------- 
  
              Net cash provided by (used in) financing
                activities                                            43,730         (4,914)
                                                                    --------       -------- 
  
  Net increase (decrease) in cash and cash equivalents                23,107        (13,687)
  Cash and cash equivalents, beginning of period                      32,329         33,407 
                                                                    --------       -------- 
  
  Cash and cash equivalents, end of period                           $55,436        $19,720 
                                                                    ========       ========
  See accompanying notes
  
                                  3
  4
  
                TOLL BROTHERS, INC. AND SUBSIDIARIES
  
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
                       (Amounts in thousands)
                             (Unaudited)
  
  1.    Basis of Presentation
  
        The accompanying unaudited condensed consolidated financial
        statements have been prepared in accordance with the rules and
        regulations of the Securities and Exchange Commission for interim
        financial information.  The October 31, 1993 balance sheet
        amounts and disclosures included herein have been derived from
        the October 31, 1993 audited financial statements of the
        Registrant.  Since the accompanying condensed consolidated
        financial statements do not include all the information and
        footnotes required by generally accepted accounting principles
        for complete financial statements, it is suggested that they be
        read in conjunction with the financial statements and notes
        thereto included in the Registrant's October 31, 1993 Annual
        Report to Shareholders.  In the opinion of management, the
        accompanying unaudited condensed consolidated financial
        statements include all adjustments, which are of a normal
        recurring nature, necessary to present fairly the Company's
        financial position as of January 31, 1994, and the results of its
        operations and cash flows for the three months then ended.  The
        results of operations for such interim period are not necessarily
        indicative of the results to be expected for the full year.
  
        During the fourth quarter of 1993, the Company adopted Statement
        of Financial Accounting Standard No. 109, "Accounting for Income
        Taxes", effective November 1, 1992.  This Statement requires a
        liability approach for measuring deferred taxes based on
        temporary differences between the financial statement and tax
        bases of assets and liabilities existing at each balance sheet
        date using enacted tax rates for years in which taxes are
        expected to be paid or recovered.  In accordance with  FASB 109,
        the cumulative effect of this change in accounting for income
        taxes of $1.3 million of income has been included in the
        consolidated statement of income for the quarter ended January
        31, 1993.  
  
        The net results of the Company's collateralized mortgage
        financing operations have been included in interest and other
        revenues.  Certain amounts for the three months ended January 31,
        1993 have been restated to reflect this treatment.
  
                                  4
  5
  2.    Residential Inventories
  
        Residential inventories consisted of the following:
  January 31,    October 31,
                                                             1994           1993
                                                          ----------     ----------
  Land and land development costs                 $135,695       $122,258
           Construction in progress                         243,190        220,680
           Sample homes                                      17,374         15,297
           Land deposits and costs of future development     11,798         15,773
           Loan assets acquired for future development       13,352         21,873
           Deferred marketing and financing costs             7,311          6,634
                                                           --------       --------
                                                           $428,720       $402,515
                                                           ========       ========
  Construction in progress includes the cost of homes under
        construction, land and land development and carrying costs of
        lots that have been substantially improved.  
  
        The Company capitalizes certain interest costs to inventories
        during the development and construction period.  Capitalized
        interest is charged to interest expense when the related
        inventories are closed.  Interest incurred, capitalized and
        expensed is summarized as follows:
  Three months
                                                               ended January 31
                                                              ------------------
                                                             1994           1993
                                                             ----           ----
  Interest capitalized,
             beginning of period                           $38,270        $34,470 
           Interest incurred                                 5,076          4,317 
           Interest expensed                                (4,497)        (3,764)
           Write off to cost of sales                       (1,412)             - 
                                                          --------       -------- 
           Interest capitalized,
             end of period                                 $37,437        $35,023 
                                                          ========       ========
  3.    Public Offering of Convertible Senior Subordinated Notes
  
        In January 1994, the Company completed a public offering of $57.5
        million principal amount of 4 3/4% convertible senior
        subordinated notes due January 15, 2004.  The notes were issued
        at par by one of the Company's subsidiaries and are guaranteed by
        the Company.  The net proceeds from the sale of the notes,
        approximately $55.8 million, was or will be used to repay bank
        debt, acquire residential property and for general corporate
        purposes.  Pending such applications, the net proceeds are
        expected to be invested in high-grade, short-term, marketable,
        interest-bearing securities.  The notes are convertible into
        shares of common stock of the Company at the option of the
        noteholder at any time prior to maturity, unless previously
        redeemed, at a conversion price of $21.75 per share.
  
                                  5
  6
  4.    Supplemental Disclosures to Statements of Cash Flows
  
        The following are supplemental disclosures to the statements of
        cash flows:
  Three months
                                                              ended January 31
                                                             ------------------
                                                            1994           1993
                                                            ----           ----
  Supplemental disclosures of cash
              flow information:
               Interest paid, net of amount capitalized    $   315         $  677 
                                                          ========       ======== 
  
           Income taxes paid                               $10,994         $4,078 
                                                          ========       ======== 
  
           Supplemental disclosures of non-cash
             financing activities:
           Income tax benefit relating to 
             exercise of employee stock options            $   278         $  415 
                                                          ========       ========
  PART I.  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS
  
  RESULTS OF OPERATIONS
  
  Homebuilding
  
  The following table sets forth, for the periods indicated, certain income
  statement items related to the Company's operations as percentages of
  total revenues and certain other data:
  Three months
                                                               ended January 31
                                                               ----------------
                                                             1994           1993
                                                             ----           ----
  Revenues                                             100.0%         100.0%
                                                             -----          ----- 
  
        Costs and expenses:
          Land and housing construction                       76.0           71.9 
          Selling, general and administrative                  8.8           12.4 
          Interest                                             3.8            5.0 
                                                            ------         ------ 
          Total costs and expenses                            88.6           89.2 
                                                            ------         ------ 
  
        Income before taxes and change in 
          in accounting                                       11.4%          10.7%
                                                            ======         ====== 
  
        Number of homes closed                                 386            250 
                                                            ======         ======
  6
  7
  Homebuilding revenues for the three months ended January 31, 1994 were
  higher than those of the comparable period of the prior year by
  approximately $42.3 million, or 56%. The higher revenues were primarily
  attributable to the increased number of homes closed, which was due to
  the significantly larger contract backlog at the beginning of fiscal
  1994, as compared to a year earlier.  In addition, the average sales
  price per home increased as a result of a change in product mix and due
  to a shift in the location of homes closed to more expensive communities. 
  The aggregate sales value of new contracts signed during the three months
  ended January 31, 1994 was $99.3 million (299 homes).  This compared to
  $88.2 million (290 homes) in the three months ended January 31, 1993.
  
  Land and housing construction costs as a percentage of revenues increased
  in the first quarter of 1994 as compared to the first quarter of 1993 due
  principally to a writeoff in fiscal 1994 of $2.6 million related to
  previously capitalized costs in one community which the Company no longer
  considered realizable, an increase in material costs (primarily lumber)
  and increased costs due to adverse weather conditions.
  
  Selling, general and administrative expenses were lower as a percentage
  of revenues in the first quarter of 1994 as compared to 1993 due to the
  increase in revenues year-to-year being greater than the increase in the
  costs incurred.  The increase in costs  was due primarily to an increase
  in selling expenses which were attributable to the increased number of
  homes closed during the 1994 quarter over the 1993 quarter and the
  increased number of communities in which the Company was offering homes
  for sale.
  
  Interest expense for the first quarter of fiscal 1994 was lower as a
  percentage of revenues and on a per home basis than in fiscal 1993.  On
  average, the land and land development costs associated with the homes
  closed in the fiscal 1994 quarter remained in inventory for a shorter
  period of time than those closed in the prior year.  In addition, the
  amount of interest incurred in recent years has declined as a percentage
  of inventory due to lower interest rates and the decline in the amount of
  debt in proportion to the amount of inventory.  Accordingly, less
  capitalized interest was accumulated on the homes closed in 1994 than on
  those closed in 1993.  
  
  Collateralized Mortgage Financing
  
  The Company has not chosen to participate in any collateralized mortgage
  financings since fiscal 1987.  Accordingly, revenues and expenses have
  declined in each successive year since then as a result of, and to the
  extent of, prepayments and normal amortization of the mortgage notes
  receivable.  The results of collateralized mortgage financing operations
  have been and are expected to continue to be insignificant to
  consolidated results of operations.  The net results of the
  collateralized mortgage financings are included in interest and other
  revenue.
  
  Income Taxes
  
  Income taxes for fiscal 1994 and 1993 were provided at effective rates of
  37% and 39.9% respectively.  The effective rate for the first quarter of
  fiscal 1994 was lower than the anticipated effective rate of 39% due
  principally to the recognition in the quarter of a benefit from the
  application of FASB 109 related to a change in the Company's projected
  tax rate on its deferred tax assets and liabilities.
  
  Effective November 1, 1992, the Company adopted Statement of Financial
  Accounting
  
                                  7
  8
  Standard No. 109, "Accounting for Income Taxes".  This Statement requires
  a liability approach for measuring deferred taxes based on temporary
  differences between the financial statement and tax bases of assets and
  liabilities existing at each balance sheet date using enacted tax rates
  for years in which taxes are expected to be recovered or paid.  The
  cumulative effect of this change in accounting for income taxes of $1.3
  million of income has been included in the consolidated statement of
  income for 1993.
    
  
  CAPITAL RESOURCES AND LIQUIDITY
  
  Funding for the Company's residential development activities is
  principally provided by cash flows from homebuilding operations,
  unsecured bank borrowings, and from the  public debt and equity markets. 
  
  The Company has a $150 million unsecured revolving credit facility with
  nine banks which extends through October 1996.  As of January 31, 1994,
  the Company had $10.0 million of loans and approximately $47.6 million of
  letters of credit outstanding under the facility. 
  
  In January 1994, the Company completed a public offering of $57.5 million
  principal amount of 4 3/4% convertible senior subordinated notes due
  January 15, 2004.  The notes were issued by one of the Company's
  subsidiaries and are guaranteed by the Company.  The net proceeds from
  the sale of the notes, approximately $55.8 million, was or will be used
  to repay bank debt and for general corporate purposes and working capital
  needs. Pending such applications, the net proceeds are expected to be
  invested in high-grade, short-term, marketable, interest-bearing
  securities.
  
  The Company has not participated in collateralized mortgage financing
  activities since 1987 and the effect on consolidated capital resources
  and liquidity is insignificant.  
  
  The Company believes that it will be able to fund its activities through
  a combination of operating cash flow, cash balances and existing sources
  of credit.  
  
                                  8
  9
  PART II.  Other Information
  
  ITEM 1.   Legal Proceedings
  
            None.
  
  ITEM 2.   Changes in Securities
  
            None.
  
  ITEM 3.   Defaults upon Senior Securities
  
            None.
  
  ITEM 4.   Submission of Matters to a Vote of Security Holders
  
            None.
  
  ITEM 5.   Other Information
  
            None.
  
  ITEM 6.   Exhibits and Reports on Form 8-K
  
            Exhibits   None.
  
  ITEM 7.   Reports on Form 8-K
  
            Form 8-K dated December 17, 1993 related to the adoption by
            the Board of Directors, subject to shareholder approval of
            the Toll Brothers, Inc. Key Executives and Non-Employee
            Directors Stock Option Plan (1993) and the Toll Brothers,
            Inc. Cash Bonus Plan.
  
                                  9
  10
  
                             SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  registrant has duly caused this report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
                                    TOLL BROTHERS, INC.
                                       (Registrant)
  
  Date: March 11, 1994           By:  /s/ Joel H. Rassman
        --------------                ----------------------
                                       Joel H. Rassman
                                       Senior Vice President,
                                       Treasurer and Chief
                                       Financial Officer
  
  Date: March 11, 1994           By:  /s/ Joseph R. Sicree
        --------------                -----------------------
                                       Joseph R. Sicree
                                       Vice President -
                                       Chief Accounting Officer
                                       (Principal Accounting 
                                        Officer)
  
                                 10