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
	January 31, 2015
5.15% Senior Notes due 2015	$	300,000
8.91% Senior Notes due 2017	$	400,000
4.0% Senior Notes due 2018	$	350,000
6.75% Senior Notes due 2019	$	250,000
5.875% Senior Notes due 2022	$	419,876
4.375% Senior Notes due 2023	$	400,000
5.625% Senior Notes due 2024	$	250,000
0.50% Exchangeable Senior Notes due 2032	$	287,500

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 our 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 our consolidated net worth as of the end of our most recent fiscal quarter; (iv) such release would not have a material adverse effect on our and our subsidiaries’ home building business; 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 investors.

Supplemental consolidating financial information of Toll Brothers, Inc., the Subsidiary Issuer, the Guarantor Subsidiaries, the Nonguarantor 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 January 31, 2015:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries	Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		365,900		135,000	—		500,900
Marketable securities							10,022			10,022
Restricted cash	15,211				1,652		599			17,462
Inventory					6,330,188		297,293			6,627,481
Property, construction and office equipment, net					125,316		16,780			142,096
Receivables, prepaid expenses and other assets			15,915		119,138		133,764	(18,468	)	250,349
Mortgage loans held for sale							55,945			55,945
Customer deposits held in escrow					29,424		1,255			30,679
Investments in and advances to unconsolidated entities					133,528		330,050			463,578
Investments in distressed loans and foreclosed real estate							70,935			70,935
Investments in and advances to consolidated entities	3,754,694		2,684,318		4,740			(6,443,752	)	—
Deferred tax assets, net of valuation allowances	252,172									252,172
	4,022,077		2,700,233		7,109,886		1,051,643	(6,462,220	)	8,421,619
LIABILITIES AND EQUITY
Liabilities:
Loans payable					665,652					665,652
Senior notes			2,628,457					26,964		2,655,421
Mortgage company loan facility							46,559			46,559
Customer deposits					221,118		5,326			226,444
Accounts payable					221,904		157			222,061
Accrued expenses			36,620		362,076		198,790	(20,416	)	577,070
Advances from consolidated entities					1,929,665		759,301	(2,688,966	)	—
Income taxes payable	65,768									65,768
Total liabilities	65,768		2,665,077		3,400,415		1,010,133	(2,682,418	)	4,458,975
Equity:
Stockholders’ equity:
Common stock	1,779				48		3,006	(3,054	)	1,779
Additional paid-in capital	718,195		49,400				1,734	(51,134	)	718,195
Retained earnings (deficits)	3,313,360		(14,244	)	3,709,477		30,381	(3,725,614	)	3,313,360
Treasury stock, at cost	(74,058	)								(74,058	)
Accumulated other comprehensive loss	(2,967	)			(54	)				(3,021	)
Total stockholders’ equity	3,956,309		35,156		3,709,471		35,121	(3,779,802	)	3,956,255
Noncontrolling interest							6,389			6,389
Total equity	3,956,309		35,156		3,709,471		41,510	(3,779,802	)	3,962,644
	4,022,077		2,700,233		7,109,886		1,051,643	(6,462,220	)	8,421,619

Condensed Consolidating Balance Sheet at October 31, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries	Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		455,714		130,601	—		586,315
Marketable securities					1,997		10,029			12,026
Restricted cash	15,211				2,070		1,061			18,342
Inventory					6,260,303		230,018			6,490,321
Property, construction and office equipment, net					126,586		16,424			143,010
Receivables, prepaid expenses and other assets			16,802		114,863		137,496	(17,589	)	251,572
Mortgage loans held for sale							101,944			101,944
Customer deposits held in escrow					39,912		2,161			42,073
Investments in and advances to unconsolidated entities					132,096		314,982			447,078
Investments in distressed loans and foreclosed real estate							73,800			73,800
Investments in and advances to consolidated entities	3,714,788		2,677,448		4,740			(6,396,976	)	—
Deferred tax assets, net of valuation allowances	250,421									250,421
	3,980,420		2,694,250		7,138,281		1,018,516	(6,414,565	)	8,416,902
LIABILITIES AND EQUITY
Liabilities:
Loans payable					653,269		992			654,261
Senior notes			2,625,712					29,332		2,655,044
Mortgage company loan facility							90,281			90,281
Customer deposits					221,084		2,715			223,799
Accounts payable					225,106		241			225,347
Accrued expenses			31,906		386,223		181,649	(18,301	)	581,477
Advances from consolidated entities					2,018,981		708,167	(2,727,148	)	—
Income taxes payable	125,996									125,996
Total liabilities	125,996		2,657,618		3,504,663		984,045	(2,716,117	)	4,556,205
Equity:
Stockholders’ equity:
Common stock	1,779				48		3,006	(3,054	)	1,779
Additional paid-in capital	712,162		49,400				1,734	(51,134	)	712,162
Retained earnings (deficits)	3,232,035		(12,768	)	3,633,618		23,410	(3,644,260	)	3,232,035
Treasury stock, at cost	(88,762	)								(88,762	)
Accumulated other comprehensive loss	(2,790	)			(48	)				(2,838	)
Total stockholders’ equity	3,854,424		36,632		3,633,618		28,150	(3,698,448	)	3,854,376
Noncontrolling interest							6,321			6,321
Total equity	3,854,424		36,632		3,633,618		34,471	(3,698,448	)	3,860,697
	3,980,420		2,694,250		7,138,281		1,018,516	(6,414,565	)	8,416,902

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended January 31, 2015:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					862,154		15,602		(24,304	)	853,452
Cost of revenues					652,212		1,666		(3,846	)	650,032
Selling, general and administrative	14		908		112,043		13,389		(20,040	)	106,314
	14		908		764,255		15,055		(23,886	)	756,346
Income (loss) from operations	(14	)	(908	)	97,899		547		(418	)	97,106
Other:
Income from unconsolidated entities					4,722		179				4,901
Other income - net	2,370				10,233		10,585		(1,172	)	22,016
Intercompany interest income			36,193						(36,193	)	—
Interest expense			(37,652	)			(131	)	37,783		—
Income from subsidiaries	121,667				8,813				(130,480	)	—
Income (loss) before income taxes	124,023		(2,367	)	121,667		11,180		(130,480	)	124,023
Income tax provision (benefit)	42,698		(891	)	45,808		4,209		(49,126	)	42,698
Net income (loss)	81,325		(1,476	)	75,859		6,971		(81,354	)	81,325
Other comprehensive loss	(178	)			(5	)					(183	)
Total comprehensive income (loss)	81,147		(1,476	)	75,854		6,971		(81,354	)	81,142

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



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					650,772	15,602		(22,693	)	643,681
Cost of revenues					515,637	2,602		(4,207	)	514,032
Selling, general and administrative	55		937		102,700	13,637		(19,459	)	97,870
	55		937		618,337	16,239		(23,666	)	611,902
Income (loss) from operations	(55	)	(937	)	32,435	(637	)	973		31,779
Other:
Income (loss) from unconsolidated entities					24,207	(1,292	)			22,915
Other income - net	2,365				10,572	6,200		(2,596	)	16,541
Intercompany interest income			38,144					(38,144	)	—
Interest expense			(39,574	)		(193	)	39,767		—
Income from subsidiaries	68,925				1,711			(70,636	)	—
Income (loss) before income taxes	71,235		(2,367	)	68,925	4,078		(70,636	)	71,235
Income tax provision (benefit)	25,655		(928	)	27,012	1,598		(27,682	)	25,655
Net income (loss)	45,580		(1,439	)	41,913	2,480		(42,954	)	45,580
Other comprehensive income	53				200	10				263
Total comprehensive income (loss)	45,633		(1,439	)	42,113	2,490		(42,954	)	45,843

Condensed Consolidating Statement of Cash Flows for the three months ended January 31, 2015:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	(48,956	)	6,870		6,618		6,418		(3,998	)	(33,048	)
Cash flow (used in) provided by investing activities:
Purchase of property and equipment - net					(2,528	)	(356	)			(2,884	)
Sale and redemption of marketable securities					2,000						2,000
Investment in and advances to unconsolidated entities					(595	)	(18,089	)			(18,684	)
Return of investments in unconsolidated entities					1,500		4,840				6,340
Investment in distressed loans and foreclosed real estate							(1,468	)			(1,468	)
Return of investments in distressed loans and foreclosed real estate							6,592				6,592
Intercompany advances	35,559		(6,870	)					(28,689	)	—
Net cash (used in) provided by investing activities	35,559		(6,870	)	377		(8,481	)	(28,689	)	(8,104	)
Cash flow (used in) provided by financing activities:
Proceeds from loans payable							214,624				214,624
Principal payments of loans payable					(12,988	)	(259,346	)			(272,334	)
Proceeds from stock-based benefit plans	17,773										17,773
Excess tax benefits from stock-based compensation	1,866										1,866
Purchase of treasury stock	(6,242	)									(6,242	)
Receipts related to noncontrolling interest							50				50
Intercompany advances					(83,821	)	51,134		32,687		—
Net cash (used in) provided by financing activities	13,397		—		(96,809	)	6,462		32,687		(44,263	)
Net (decrease) increase in cash and cash equivalents	—		—		(89,814	)	4,399		—		(85,415	)
Cash and cash equivalents, beginning of period	—		—		455,714		130,601		—		586,315
Cash and cash equivalents, end of period	—		—		365,900		135,000		—		500,900

Condensed Consolidating Statement of Cash Flows for the three months ended January 31, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	31,235		23,383		(279,194	)	(17,808	)	(8,004	)	(250,388	)
Cash flow (used in) provided by investing activities:
Purchase of property and equipment — net					(2,659	)	(194	)			(2,853	)
Sale and redemption of marketable securities					39,243						39,243
Investment in and advances to unconsolidated entities					(4,879	)	(55,529	)			(60,408	)
Return of investments in unconsolidated entities					29,429		3,000				32,429
Investment in distressed loans and foreclosed real estate							(191	)			(191	)
Return of investments in distressed loans and foreclosed real estate							17,574				17,574
Deposit - acquisition of a business					(161,000	)					(161,000	)
Dividend received - intercompany					15,000				(15,000	)	—
Intercompany advances	(270,826	)	(618,683	)					889,509		—
Net cash used in investing activities	(270,826	)	(618,683	)	(84,866	)	(35,340	)	874,509		(135,206	)
Cash flow provided by (used in) financing activities:
Proceeds from issuance of senior notes			600,000								600,000
Debt issuance costs for senior notes			(4,700	)							(4,700	)
Proceeds from loans payable							275,334				275,334
Principal payments of loans payable					(8,331	)	(298,864	)			(307,195	)
Net proceeds from issuance of common stock	220,357										220,357
Proceeds from stock-based benefit plans	18,529										18,529
Excess tax benefits from stock-based compensation	789										789
Purchase of treasury stock	(84	)									(84	)
Receipts related to noncontrolling interest							81				81
Dividend paid - intercompany							(15,000	)	15,000		—
Intercompany advances					773,035		108,470		(881,505	)	—
Net cash provided by financing activities	239,591		595,300		764,704		70,021		(866,505	)	803,111
Net increase in cash and cash equivalents	—		—		400,644		16,873		—		417,517
Cash and cash equivalents, beginning of period	—		—		670,102		102,870		—		772,972
Cash and cash equivalents, end of period	—		—		1,070,746		119,743		—		1,190,489