Supplemental Guarantor Information

Our 100% owned subsidiary, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), has issued the following Senior Notes (amounts in thousands):



	Original amount issued and amount outstanding at
	July 31, 2014
5.15% Senior Notes due 2015	$	300,000
8.91% Senior Notes due 2017	$	400,000
6.75% Senior Notes due 2019	$	250,000
5.875% Senior Notes due 2022	$	419,876
4.375% Senior Notes due 2023	$	400,000
0.50% Exchangeable Senior Notes due 2032	$	287,500
4.0% Senior Notes due 2018	$	350,000
5.625% Senior Notes due 2024	$	250,000

The obligations of the Subsidiary Issuer to pay principal, premiums, if any, and interest are guaranteed jointly and severally on a senior basis by us and substantially all of our 100% owned home building subsidiaries (the “Guarantor Subsidiaries”). The guarantees are full and unconditional. Our non-home building subsidiaries and several of our home building subsidiaries (together, the “Non-Guarantor Subsidiaries”) do not guarantee the debt. The Subsidiary Issuer generates no operating revenues and does not have any independent operations other than the financing of our other subsidiaries by lending the proceeds from the above described debt issuances. The indentures under which the Senior Notes were issued provide that any of our subsidiaries that provide a guarantee of the Credit Facility will guarantee the Senior Notes. The indentures further provide that any Guarantor Subsidiary may be released from its guarantee so long as (i) no default or event of default exists or would result from release of such guarantee; (ii) the Guarantor Subsidiary being released has consolidated net worth of less than 5% of the Company’s consolidated net worth as of the end of the Company’s most recent fiscal quarter; (iii) the Guarantor Subsidiaries released from their guarantees in any fiscal year comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of the Company’s consolidated net worth as of the end of the Company’s most recent fiscal quarter; (iv) such release would not have a material adverse effect on the home building business of the Company and its subsidiaries; and (v) the Guarantor Subsidiary is released from its guaranty under the Credit Facility. If there are no guarantors under the Credit Facility, all Guarantor Subsidiaries under the indentures will be released from their guarantees.

Separate financial statements and other disclosures concerning the Guarantor Subsidiaries are not presented because management has determined that such disclosures would not be material to users of these financial statements.

Supplemental consolidating financial information of Toll Brothers, Inc., the Subsidiary Issuer, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and the eliminations to arrive at Toll Brothers, Inc. on a consolidated basis is presented below ($ amounts in thousands).

Condensed Consolidating Balance Sheet at July 31, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		254,510		120,139		—		374,649
Marketable securities					1,987		10,019				12,006
Restricted cash	15,207				5,742		1,452				22,401
Inventory					6,488,310		105,494				6,593,804
Property, construction and office equipment, net					116,643		14,866				131,509
Receivables, prepaid expenses and other assets	6		17,701		132,020		121,759		(18,970	)	252,516
Mortgage loans held for sale							98,535				98,535
Customer deposits held in escrow					55,820						55,820
Investments in and advances to unconsolidated entities					151,612		291,673				443,285
Investments in distressed loans							4,251				4,251
Investments in foreclosed real estate							79,319				79,319
Investments in and advances to consolidated entities	3,650,513		2,679,922		4,740				(6,335,175	)	—
Deferred tax assets, net of valuation allowances	263,821										263,821
	3,929,547		2,697,623		7,211,384		847,507		(6,354,145	)	8,331,916
LIABILITIES AND EQUITY
Liabilities:
Loans payable					636,126						636,126
Senior notes			2,622,968						31,698		2,654,666
Mortgage company warehouse loan							87,830				87,830
Customer deposits					254,187						254,187
Accounts payable					226,668		66				226,734
Accrued expenses			36,634		367,334		152,089		(19,387	)	536,670
Advances from consolidated entities					2,205,157		579,636		(2,784,793	)	—
Income taxes payable	128,881										128,881
Total liabilities	128,881		2,659,602		3,689,472		819,621		(2,772,482	)	4,525,094
Equity:
Stockholders’ equity:
Common stock	1,779				48		3,006		(3,054	)	1,779
Additional paid-in capital	700,337		49,400				1,734		(51,134	)	700,337
Retained earnings (deficits)	3,100,511		(11,379	)	3,521,946		16,908		(3,527,475	)	3,100,511
Treasury stock, at cost	(2	)									(2	)
Accumulated other comprehensive loss	(1,959	)			(82	)	(9	)			(2,050	)
Total stockholders’ equity	3,800,666		38,021		3,521,912		21,639		(3,581,663	)	3,800,575
Noncontrolling interest							6,247				6,247
Total equity	3,800,666		38,021		3,521,912		27,886		(3,581,663	)	3,806,822
	3,929,547		2,697,623		7,211,384		847,507		(6,354,145	)	8,331,916

Condensed Consolidating Balance Sheet at October 31, 2013:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		670,102		102,870		—		772,972
Marketable securities					42,491		10,017				52,508
Restricted cash	15,182				16,007		847				32,036
Inventory					4,625,252		25,160				4,650,412
Property, construction and office equipment, net					116,809		14,511				131,320
Receivables, prepaid expenses and other assets	33		15,675		101,321		131,701		(19,435	)	229,295
Mortgage loans held for sale							113,517				113,517
Customer deposits held in escrow					46,888						46,888
Investments in and advances to unconsolidated entities					175,159		227,974				403,133
Investments in distressed loans							36,374				36,374
Investments in foreclosed real estate							72,972				72,972
Investments in and advances to consolidated entities	3,113,203		2,334,503		4,740				(5,452,446	)	—
Deferred tax assets, net of valuation allowances	286,032										286,032
	3,414,450		2,350,178		5,798,769		735,943		(5,471,881	)	6,827,459
LIABILITIES AND EQUITY
Liabilities:
Loans payable					107,222						107,222
Senior notes			2,282,719						38,723		2,321,442
Mortgage company warehouse loan							75,000				75,000
Customer deposits					212,669						212,669
Accounts payable					167,733		54				167,787
Accrued expenses			25,045		355,590		161,402		(19,050	)	522,987
Advances from consolidated entities					1,627,130		467,929		(2,095,059	)	—
Income taxes payable	81,188										81,188
Total liabilities	81,188		2,307,764		2,470,344		704,385		(2,075,386	)	3,488,295
Equity:
Stockholders’ equity:
Common stock	1,694				48		3,006		(3,054	)	1,694
Additional paid-in capital	441,677		49,400				1,734		(51,134	)	441,677
Retained earnings (deficits)	2,892,003		(6,986	)	3,328,629		20,664		(3,342,307	)	2,892,003
Treasury stock, at cost											—
Accumulated other comprehensive loss	(2,112	)			(252	)	(23	)			(2,387	)
Total stockholders’ equity	3,333,262		42,414		3,328,425		25,381		(3,396,495	)	3,332,987
Noncontrolling interest							6,177				6,177
Total equity	3,333,262		42,414		3,328,425		31,558		(3,396,495	)	3,339,164
	3,414,450		2,350,178		5,798,769		735,943		(5,471,881	)	6,827,459

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the nine months ended July 31, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					2,587,940	53,075		(80,103	)	2,560,912
Cost of revenues					2,029,097	6,809		(16,644	)	2,019,262
Selling, general and administrative	98		2,762		330,591	40,898		(62,178	)	312,171
	98		2,762		2,359,688	47,707		(78,822	)	2,331,433
Income (loss) from operations	(98	)	(2,762	)	228,252	5,368		(1,281	)	229,479
Other:
Income (loss) from unconsolidated entities					38,271	(79	)			38,192
Other income - net	7,033				31,632	13,427		(3,719	)	48,373
Intercompany interest income			111,984					(111,984	)	—
Interest expense			(116,246	)		(738	)	116,984		—
Income from subsidiaries	309,109				10,954			(320,063	)	—
Income (loss) before income taxes	316,044		(7,024	)	309,109	17,978		(320,063	)	316,044
Income tax provision (benefit)	107,536		(2,631	)	115,792	6,734		(119,895	)	107,536
Net income (loss)	208,508		(4,393	)	193,317	11,244		(200,168	)	208,508
Other comprehensive income	153				170	14				337
Total comprehensive income (loss)	208,661		(4,393	)	193,487	11,258		(200,168	)	208,845

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the nine months ended July 31, 2013:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,658,184	48,186		(76,605	)	1,629,765
Cost of revenues					1,322,437	7,083		(18,481	)	1,311,039
Selling, general and administrative	151		2,203		267,627	34,244		(57,758	)	246,467
	151		2,203		1,590,064	41,327		(76,239	)	1,557,506
Income (loss) from operations	(151	)	(2,203	)	68,120	6,859		(366	)	72,259
Other:
Income from unconsolidated entities					5,766	3,078				8,844
Other income - net	7,059				26,807	7,460		(4,882	)	36,444
Intercompany interest income			94,055					(94,055	)	—
Interest expense			(98,891	)		(412	)	99,303		—
Income from subsidiaries	110,639				9,946			(120,585	)	—
Income (loss) before income taxes	117,547		(7,039	)	110,639	16,985		(120,585	)	117,547
Income tax provision (benefit)	41,846		(2,757	)	43,326	6,651		(47,220	)	41,846
Net income (loss)	75,701		(4,282	)	67,313	10,334		(73,365	)	75,701
Other comprehensive income (loss)	(55	)			256	(12	)			189
Total comprehensive income (loss)	75,646		(4,282	)	67,569	10,322		(73,365	)	75,890

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended July 31, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,067,863		19,808		(30,814	)	1,056,857
Cost of revenues					822,804		2,750		(8,322	)	817,232
Selling, general and administrative	29		897		116,944		14,462		(22,351	)	109,981
	29		897		939,748		17,212		(30,673	)	927,213
Income (loss) from operations	(29	)	(897	)	128,115		2,596		(141	)	129,644
Other:
Income from unconsolidated entities					693		257				950
Other income - net	2,373				13,817		6,219		(1,678	)	20,731
Intercompany interest income			35,877						(35,877	)	—
Interest expense			(37,347	)			(349	)	37,696		—
Income from subsidiaries	148,981				6,356				(155,337	)	—
Income (loss) before income taxes	151,325		(2,367	)	148,981		8,723		(155,337	)	151,325
Income tax provision (benefit)	53,618		(880	)	55,568		3,253		(57,941	)	53,618
Net income (loss)	97,707		(1,487	)	93,413		5,470		(97,396	)	97,707
Other comprehensive (loss) income	(3	)			(19	)	2				(20	)
Total comprehensive income (loss)	97,704		(1,487	)	93,394		5,472		(97,396	)	97,687

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended July 31, 2013:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					704,559	18,906		(34,305	)	689,160
Cost of revenues					549,456	2,439		(6,806	)	545,089
Selling, general and administrative	90		801		97,041	13,187		(22,249	)	88,870
	90		801		646,497	15,626		(29,055	)	633,959
Income (loss) from operations	(90	)	(801	)	58,062	3,280		(5,250	)	55,201
Other:
Income from unconsolidated entities					726	42				768
Other income - net	2,374				2,335	4,081		3,494		12,284
Intercompany interest income			33,995					(33,995	)	—
Interest expense			(35,561	)		(190	)	35,751		—
Income from subsidiaries	65,969				4,846			(70,815	)	—
Income (loss) before income taxes	68,253		(2,367	)	65,969	7,213		(70,815	)	68,253
Income tax provision (benefit)	21,658		(927	)	25,833	2,824		(27,730	)	21,658
Net income (loss)	46,595		(1,440	)	40,136	4,389		(43,085	)	46,595
Other comprehensive income (loss)	(37	)			220	48				231
Total comprehensive income (loss)	46,558		(1,440	)	40,356	4,437		(43,085	)	46,826

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by (used in) operating activities	101,864		18,079		(4,242	)	(64,371	)	(12,714	)	38,616
Cash flow used in investing activities:
Purchase of property and equipment - net					(9,145	)	(355	)			(9,500	)
Sale and redemption of marketable securities					40,243						40,243
Investments in and advances to unconsolidated entities					(15,604	)	(77,435	)			(93,039	)
Return of investments in unconsolidated entities					40,413		10,264				50,677
Investments in distressed loans and foreclosed real estate							(1,127	)			(1,127	)
Return of investments in distressed loans and foreclosed real estate							40,675				40,675
Acquisition of a business					(1,489,116	)					(1,489,116	)
Dividend received - intercompany					15,000				(15,000	)	—
Intercompany advances	(348,664	)	(345,419	)					694,083		—
Net cash used in investing activities	(348,664	)	(345,419	)	(1,418,209	)	(27,978	)	679,083		(1,461,187	)
Cash flow provided by financing activities:
Net proceeds from issuance of senior notes			600,000								600,000
Debt issuance costs for senior notes			(4,700	)							(4,700	)
Proceeds from loans payable					1,141,300		729,580				1,870,880
Debt issuance costs for loans payable					(3,005	)					(3,005	)
Principal payments of loans payable					(701,098	)	(716,750	)			(1,417,848	)
Redemption of senior notes			(267,960	)							(267,960	)
Net proceeds from issuance of common stock	220,365										220,365
Proceeds from stock-based benefit plans	26,555										26,555
Excess tax benefits from stock-based compensation	221										221
Purchase of treasury stock	(341	)									(341	)
Receipts related to noncontrolling interest							81				81
Dividend paid - intercompany							(15,000	)	15,000		—
Intercompany advances					569,662		111,707		(681,369	)	—
Net cash provided by financing activities	246,800		327,340		1,006,859		109,618		(666,369	)	1,024,248
Net (decrease) increase in cash and cash equivalents	—		—		(415,592	)	17,269		—		(398,323	)
Cash and cash equivalents, beginning of period	—		—		670,102		102,870		—		772,972
Cash and cash equivalents, end of period	—		—		254,510		120,139		—		374,649

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2013:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	77,313		20,938		(541,461	)	(3,430	)	(9,895	)	(456,535	)
Cash flow provided by (used in) investing activities:
Purchase of property and equipment — net					(12,646	)	(11,538	)			(24,184	)
Purchase of marketable securities					(25,938	)	(10,264	)			(36,202	)
Sale and redemption of marketable securities					288,332		60,263				348,595
Investments in and advances to unconsolidated entities					(25,517	)	(23,693	)			(49,210	)
Return of investments in unconsolidated entities					38,811		11,642				50,453
Investments in distressed loans and foreclosed real estate							(26,155	)			(26,155	)
Return of investments in distressed loans and foreclosed real estate							15,396				15,396
Intercompany advances	(72,369	)	(362,253	)					434,622		—
Net cash provided by (used in) investing activities	(72,369	)	(362,253	)	263,042		15,651		434,622		278,693
Cash flow provided by (used in) financing activities:
Proceeds from issuance of senior notes			400,383								400,383
Proceeds from loans payable							796,791				796,791
Principal payments of loans payable					(31,035	)	(803,801	)			(834,836	)
Redemption of senior notes			(59,068	)							(59,068	)
Proceeds from stock-based benefit plans	10,365										10,365
Purchase of treasury stock	(15,309	)									(15,309	)
Receipts related to noncontrolling interest							33				33
Intercompany advances					370,158		54,569		(424,727	)	—
Net cash provided by (used in) financing activities	(4,944	)	341,315		339,123		47,592		(424,727	)	298,359
Net increase in cash and cash equivalents	—		—		60,704		59,813		—		120,517
Cash and cash equivalents, beginning of period	—		—		712,024		66,800		—		778,824
Cash and cash equivalents, end of period	—		—		772,728		126,613		—		899,341