Supplemental Guarantor Information

At July 31, 2016, our 100%-owned subsidiary, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), has issued the following outstanding Senior Notes (amounts in thousands):



	Original amount issued and amount outstanding
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
4.875% Senior Notes due 2025	$	350,000
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 “Nonguarantor Subsidiaries”) do not guarantee these Senior Notes. 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 our obligations under the New 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 New Credit Facility. If there are no guarantors under the New 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 July 31, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		302,234	49,620	—		351,854
Restricted cash and investments	15,253				14,099	13,831			43,183
Inventory					7,236,183	434,340			7,670,523
Property, construction and office equipment, net					132,758	16,046			148,804
Receivables, prepaid expenses and other assets	99				207,426	126,307	(53,555	)	280,277
Mortgage loans held for sale						170,937			170,937
Customer deposits held in escrow					62,885	3,961			66,846
Investments in unconsolidated entities					103,683	357,921			461,604
Investments in foreclosed real estate and distressed loans						13,687			13,687
Investments in and advances to consolidated entities	4,066,323		2,743,725		29,394	90,211	(6,929,653	)	—
Deferred tax assets, net of valuation allowances	197,984								197,984
	4,279,659		2,743,725		8,088,662	1,276,861	(6,983,208	)	9,405,699
LIABILITIES AND EQUITY
Liabilities
Loans payable					1,058,656				1,058,656
Senior notes			2,680,305				12,916		2,693,221
Mortgage company loan facility						125,000			125,000
Customer deposits					325,317	13,140			338,457
Accounts payable					274,836	1,377			276,213
Accrued expenses			36,869		388,459	258,397	(55,041	)	628,684
Advances from consolidated entities					1,830,325	755,820	(2,586,145	)	—
Income taxes payable	105,508								105,508
Total liabilities	105,508		2,717,174		3,877,593	1,153,734	(2,628,270	)	5,225,739
Equity
Stockholders’ equity
Common stock	1,779				48	3,006	(3,054	)	1,779
Additional paid-in capital	724,151		49,400			1,734	(51,134	)	724,151
Retained earnings (deficits)	3,862,919		(22,849	)	4,211,021	112,578	(4,300,750	)	3,862,919
Treasury stock, at cost	(412,243	)							(412,243	)
Accumulated other comprehensive loss	(2,455	)							(2,455	)
Total stockholders’ equity	4,174,151		26,551		4,211,069	117,318	(4,354,938	)	4,174,151
Noncontrolling interest						5,809			5,809
Total equity	4,174,151		26,551		4,211,069	123,127	(4,354,938	)	4,179,960
	4,279,659		2,743,725		8,088,662	1,276,861	(6,983,208	)	9,405,699

Condensed Consolidating Balance Sheet at October 31, 2015:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries	Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		783,599		135,394	—		918,993
Marketable securities							10,001			10,001
Restricted cash and investments	15,227				499		1,069			16,795
Inventory					6,530,698		466,818			6,997,516
Property, construction and office equipment, net					121,178		15,577			136,755
Receivables, prepaid expenses and other assets	52				149,268		178,680	(43,870	)	284,130
Mortgage loans held for sale							123,175			123,175
Customer deposits held in escrow					51,767		4,338			56,105
Investments in unconsolidated entities					115,999		296,861			412,860
Investments in foreclosed real estate and distressed loans							51,730			51,730
Investments in and advances to consolidated entities	4,067,722		2,726,428		4,740			(6,798,890	)	—
Deferred tax assets, net of valuation allowances	198,455									198,455
	4,281,456		2,726,428		7,757,748		1,283,643	(6,842,760	)	9,206,515
LIABILITIES AND EQUITY
Liabilities
Loans payable					1,000,439					1,000,439
Senior notes			2,669,860					19,941		2,689,801
Mortgage company loan facility							100,000			100,000
Customer deposits					271,124		13,185			284,309
Accounts payable					236,436		517			236,953
Accrued expenses			25,699		361,089		266,411	(45,133	)	608,066
Advances from consolidated entities					1,932,075		850,374	(2,782,449	)	—
Income taxes payable	58,868									58,868
Total liabilities	58,868		2,695,559		3,801,163		1,230,487	(2,807,641	)	4,978,436
Equity
Stockholders’ equity
Common stock	1,779				48		3,006	(3,054	)	1,779
Additional paid-in capital	728,125		49,400				1,734	(51,134	)	728,125
Retained earnings (deficits)	3,595,202		(18,531	)	3,956,568		42,894	(3,980,931	)	3,595,202
Treasury stock, at cost	(100,040	)								(100,040	)
Accumulated other comprehensive loss	(2,478	)			(31	)				(2,509	)
Total stockholders’ equity	4,222,588		30,869		3,956,585		47,634	(4,035,119	)	4,222,557
Noncontrolling interest							5,522			5,522
Total equity	4,222,588		30,869		3,956,585		53,156	(4,035,119	)	4,228,079
	4,281,456		2,726,428		7,757,748		1,283,643	(6,842,760	)	9,206,515

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the nine months ended July 31, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					3,123,436	282,207		(91,586	)	3,314,057
Cost of revenues					2,451,554	134,952		(12,208	)	2,574,298
Selling, general and administrative	49		2,857		402,049	53,399		(73,234	)	385,120
	49		2,857		2,853,603	188,351		(85,442	)	2,959,418
Income (loss) from operations	(49	)	(2,857	)	269,833	93,856		(6,144	)	354,639
Other:
Income from unconsolidated entities					16,168	6,586				22,754
Other income – net	7,106				21,504	14,164		700		43,474
Intercompany interest income			109,347					(109,347	)	—
Interest expense			(113,514	)		(1,277	)	114,791		—
Income from subsidiaries	413,810				106,305			(520,115	)	—
Income (loss) before income taxes	420,867		(7,024	)	413,810	113,329		(520,115	)	420,867
Income tax provision (benefit)	153,150		(2,705	)	159,358	43,645		(200,298	)	153,150
Net income (loss)	267,717		(4,319	)	254,452	69,684		(319,817	)	267,717
Other comprehensive income	23				31					54
Total comprehensive income (loss)	267,740		(4,319	)	254,483	69,684		(319,817	)	267,771

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



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					2,764,788	53,963		(84,705	)	2,734,046
Cost of revenues					2,158,932	6,933		(12,927	)	2,152,938
Selling, general and administrative	66		2,689		349,861	43,827		(66,269	)	330,174
	66		2,689		2,508,793	50,760		(79,196	)	2,483,112
Income (loss) from operations	(66	)	(2,689	)	255,995	3,203		(5,509	)	250,934
Other:
Income from unconsolidated entities					11,332	5,748				17,080
Other income – net	7,049				26,697	15,672		587		50,005
Intercompany interest income			105,134					(105,134	)	—
Interest expense			(109,469	)		(587	)	110,056		—
Income from subsidiaries	311,036				17,012			(328,048	)	—
Income (loss) before income taxes	318,019		(7,024	)	311,036	24,036		(328,048	)	318,019
Income tax provision (benefit)	102,015		(2,657	)	117,665	9,092		(124,100	)	102,015
Net income (loss)	216,004		(4,367	)	193,371	14,944		(203,948	)	216,004
Other comprehensive loss	(62	)								(62	)
Total comprehensive income (loss)	215,942		(4,367	)	193,371	14,944		(203,948	)	215,942

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended July 31, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,248,474	56,457		(34,997	)	1,269,934
Cost of revenues					973,493	24,085		(6,162	)	991,416
Selling, general and administrative	27		937		141,519	18,198		(25,697	)	134,984
	27		937		1,115,012	42,283		(31,859	)	1,126,400
Income (loss) from operations	(27	)	(937	)	133,462	14,174		(3,138	)	143,534
Other:
Income from unconsolidated entities					5,835	(837	)			4,998
Other income – net	2,395				8,109	3,625		992		15,121
Intercompany interest income			36,370					(36,370	)	—
Interest expense			(37,800	)		(714	)	38,514		—
Income from subsidiaries	161,285				13,880			(175,165	)	—
Income (loss) before income taxes	163,653		(2,367	)	161,286	16,248		(175,167	)	163,653
Income tax provision (benefit)	58,170		(911	)	62,086	6,249		(67,424	)	58,170
Net income (loss)	105,483		(1,456	)	99,200	9,999		(107,743	)	105,483
Other comprehensive income	155									155
Total comprehensive income (loss)	105,638		(1,456	)	99,200	9,999		(107,743	)	105,638

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



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,040,738	20,811		(33,538	)	1,028,011
Cost of revenues					826,205	3,838		(5,649	)	824,394
Selling, general and administrative	29		867		123,667	16,737		(25,125	)	116,175
	29		867		949,872	20,575		(30,774	)	940,569
Income (loss) from operations	(29	)	(867	)	90,866	236		(2,764	)	87,442
Other:
Income from unconsolidated entities					3,898	2,054				5,952
Other income – net	2,379				8,664	2,084		943		14,070
Intercompany interest income			32,741					(32,741	)	—
Interest expense			(34,241	)		(321	)	34,562		—
Income from subsidiaries	105,114				1,686			(106,800	)	—
Income (loss) before income taxes	107,464		(2,367	)	105,114	4,053		(106,800	)	107,464
Income tax provision (benefit)	40,715		(895	)	39,765	1,533		(40,403	)	40,715
Net income (loss)	66,749		(1,472	)	65,349	2,520		(66,397	)	66,749
Other comprehensive income	139				12					151
Total comprehensive income (loss)	66,888		(1,472	)	65,361	2,520		(66,397	)	66,900

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	71,539		17,333		(461,637	)	61,008		(13,496	)	(325,253	)
Cash flow provided by (used in) investing activities:
Purchase of property and equipment - net					(22,623	)	(657	)			(23,280	)
Sale and redemption of marketable securities							10,000				10,000
Investment in unconsolidated entities					(2,057	)	(38,570	)			(40,627	)
Return of investments in unconsolidated entities					26,486		8,283				34,769
Investment in foreclosed real estate and distressed loans							(964	)			(964	)
Return of investments in foreclosed real estate and distressed loans							34,601				34,601
Dividend received - intercompany					5,000				(5,000	)	—
Intercompany advances	249,606		(17,298	)					(232,308	)	—
Net cash provided by (used in) investing activities	249,606		(17,298	)	6,806		12,693		(237,308	)	14,499
Cash flow used in financing activities:
Debt issuance costs for senior notes			(35	)							(35	)
Proceeds from loans payable					550,000		1,206,528				1,756,528
Debt issuance costs for loans payable					(3,936	)					(3,936	)
Principal payments of loans payable					(506,559	)	(1,181,528	)			(1,688,087	)
Proceeds from stock-based benefit plans	5,336										5,336
Excess tax benefits from stock-based compensation	1,131										1,131
Purchase of treasury stock	(327,612	)									(327,612	)
Receipts related to noncontrolling interest, net							290				290
Dividend paid - intercompany							(5,000	)	5,000		—
Intercompany advances					(66,039	)	(179,765	)	245,804		—
Net cash used in financing activities	(321,145	)	(35	)	(26,534	)	(159,475	)	250,804		(256,385	)
Net decrease in cash and cash equivalents	—		—		(481,365	)	(85,774	)	—		(567,139	)
Cash and cash equivalents, beginning of period	—		—		783,599		135,394		—		918,993
Cash and cash equivalents, end of period	—		—		302,234		49,620		—		351,854

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2015:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	(7,795	)	7,730		(17,570	)	(85,025	)	(8,591	)	(111,251	)
Cash flow provided by (used in) investing activities:
Purchase of property and equipment — net					(5,954	)	(1,291	)			(7,245	)
Sale and redemption of marketable securities					2,000						2,000
Investments in unconsolidated entities					(3,172	)	(36,109	)			(39,281	)
Return of investments in unconsolidated entities					20,261		14,542				34,803
Investment in foreclosed real estate and distressed loans							(2,096	)			(2,096	)
Return of investments in foreclosed real estate and distressed loans							23,372				23,372
Net increase in cash from purchase of joint venture interest					3,848						3,848
Intercompany advances	(25,308	)	292,270						(266,962	)	—
Net cash provided by (used in) investing activities	(25,308	)	292,270		16,983		(1,582	)	(266,962	)	15,401
Cash flow (used in) provided by financing activities:
Proceeds from loans payable					250,000		966,094				1,216,094
Principal payments of loans payable					(86,166	)	(957,376	)			(1,043,542	)
Redemption of senior notes			(300,000	)							(300,000	)
Proceeds from stock-based benefit plans	35,246										35,246
Excess tax benefits from stock-based compensation	4,603										4,603
Purchase of treasury stock	(6,746	)									(6,746	)
Receipts related to noncontrolling interest							(1,312	)			(1,312	)
Intercompany advances					(354,300	)	78,747		275,553		—
Net cash (used in) provided by financing activities	33,103		(300,000	)	(190,466	)	86,153		275,553		(95,657	)
Net decrease in cash and cash equivalents	—		—		(191,053	)	(454	)	—		(191,507	)
Cash and cash equivalents, beginning of period	—		—		455,714		130,601		—		586,315
Cash and cash equivalents, end of period	—		—		264,661		130,147		—		394,808