Supplemental Guarantor Information

At July 31, 2018, 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
4.0% Senior Notes due December 31, 2018	$	350,000
6.75% Senior Notes due November 1, 2019	$	250,000
5.875% Senior Notes due February 15, 2022	$	419,876
4.375% Senior Notes due April 15, 2023	$	400,000
5.625% Senior Notes due January 15, 2024	$	250,000
4.875% Senior Notes due November 15, 2025	$	350,000
4.875% Senior Notes due March 15, 2027	$	450,000
4.350% Senior Notes due February 15, 2028	$	400,000

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 “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 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.

As of October 31, 2017, one of our 100%-owned subsidiaries was released from its guarantee obligation on these Senior Notes. The Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) and of Cash Flows for the nine months and three months ended July 31, 2017 presented below has been retroactively restated to reflect this subsidiary as a Nonguarantor Subsidiary.

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, 2018:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		333,839	188,342	—		522,181
Restricted cash						686			686
Inventory					7,810,796	146,820			7,957,616
Property, construction and office equipment, net					171,560	24,168			195,728
Receivables, prepaid expenses and other assets					302,064	420,319	(99,981	)	622,402
Mortgage loans held for sale						94,291			94,291
Customer deposits held in escrow					129,855	6,467			136,322
Investments in unconsolidated entities					44,991	375,003			419,994
Investments in and advances to consolidated entities	4,569,837		2,921,962		155,315	128,331	(7,775,445	)	—
	4,569,837		2,921,962		8,948,420	1,384,427	(7,875,426	)	9,949,220
LIABILITIES AND EQUITY
Liabilities
Loans payable					694,409				694,409
Senior notes			2,860,771						2,860,771
Mortgage company loan facility						82,274			82,274
Customer deposits					457,712	12,519			470,231
Accounts payable					326,518	1,354			327,872
Accrued expenses	974		43,350		581,208	418,578	(108,026	)	936,084
Advances from consolidated entities					1,592,201	592,763	(2,184,964	)	—
Income taxes payable	40,199								40,199
Total liabilities	41,173		2,904,121		3,652,048	1,107,488	(2,292,990	)	5,411,840
Equity
Stockholders’ equity
Common stock	1,779				48	3,006	(3,054	)	1,779
Additional paid-in capital	722,461		49,400			93,734	(143,134	)	722,461
Retained earnings (deficit)	4,866,980		(31,559	)	5,296,324	171,483	(5,436,248	)	4,866,980
Treasury stock, at cost	(1,060,746	)							(1,060,746	)
Accumulated other comprehensive loss	(1,810	)							(1,810	)
Total stockholders’ equity	4,528,664		17,841		5,296,372	268,223	(5,582,436	)	4,528,664
Noncontrolling interest						8,716			8,716
Total equity	4,528,664		17,841		5,296,372	276,939	(5,582,436	)	4,537,380
	4,569,837		2,921,962		8,948,420	1,384,427	(7,875,426	)	9,949,220

Condensed Consolidating Balance Sheet at October 31, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		533,204	179,625		—		712,829
Restricted cash					1,500	982				2,482
Inventory					7,017,331	264,122				7,281,453
Property, construction and office equipment, net					165,464	24,083				189,547
Receivables, prepaid expenses and other assets					319,592	296,699		(74,074	)	542,217
Mortgage loans held for sale						132,922				132,922
Customer deposits held in escrow					96,956	5,061				102,017
Investments in unconsolidated entities					66,897	414,861				481,758
Investments in and advances to consolidated entities	4,589,228		2,514,649		91,740	126,799		(7,322,416	)	—
	4,589,228		2,514,649		8,292,684	1,445,154		(7,396,490	)	9,445,225
LIABILITIES AND EQUITY
Liabilities
Loans payable					637,416					637,416
Senior notes			2,462,463							2,462,463
Mortgage company loan facility						120,145				120,145
Customer deposits					377,083	18,943				396,026
Accounts payable					271,617	3,606				275,223
Accrued expenses	141		34,345		563,577	440,631		(79,341	)	959,353
Advances from consolidated entities					1,584,957	659,904		(2,244,861	)	—
Income taxes payable	57,893					(384	)			57,509
Total liabilities	58,034		2,496,808		3,434,650	1,242,845		(2,324,202	)	4,908,135
Equity
Stockholders’ equity
Common stock	1,779				48	3,006		(3,054	)	1,779
Additional paid-in capital	720,115		49,400			93,734		(143,134	)	720,115
Retained earnings (deficit)	4,474,064		(31,559	)	4,857,986	99,673		(4,926,100	)	4,474,064
Treasury stock, at cost	(662,854	)								(662,854	)
Accumulated other comprehensive loss	(1,910	)								(1,910	)
Total stockholders’ equity	4,531,194		17,841		4,858,034	196,413		(5,072,288	)	4,531,194
Noncontrolling interest						5,896				5,896
Total equity	4,531,194		17,841		4,858,034	202,309		(5,072,288	)	4,537,090
	4,589,228		2,514,649		8,292,684	1,445,154		(7,396,490	)	9,445,225

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the nine months ended July 31, 2018:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					4,492,956		329,633		(134,569	)	4,688,020
Cost of revenues					3,561,287		223,990		(43,021	)	3,742,256
Selling, general and administrative	57		2,397		514,921		61,543		(80,928	)	497,990
	57		2,397		4,076,208		285,533		(123,949	)	4,240,246
Income (loss) from operations	(57	)	(2,397	)	416,748		44,100		(10,620	)	447,774
Other:
Income from unconsolidated entities					16,743		37,170				53,913
Other income – net					19,288		5,252		11,216		35,756
Intercompany interest income			105,598		1,052		3,235		(109,885	)	—
Interest expense			(103,201	)	(3,235	)	(1,477	)	107,913		—
Income from subsidiaries	537,500				88,280				(625,780	)	—
Income before income taxes	537,443		—		538,876		88,280		(627,156	)	537,443
Income tax provision	100,268				100,538		16,470		(117,008	)	100,268
Net income	437,175		—		438,338		71,810		(510,148	)	437,175
Other comprehensive income	512										512
Total comprehensive income	437,687		—		438,338		71,810		(510,148	)	437,687

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the nine months ended July 31, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					3,699,032		224,120		(136,001	)	3,787,151
Cost of revenues					2,896,053		145,229		(54,811	)	2,986,471
Selling, general and administrative	45		3,010		459,606		55,385		(79,549	)	438,497
	45		3,010		3,355,659		200,614		(134,360	)	3,424,968
Income (loss) from operations	(45	)	(3,010	)	343,373		23,506		(1,641	)	362,183
Other:
Income from unconsolidated entities					11,224		101,050				112,274
Other income – net	7,049				19,969		9,482		1,607		38,107
Intercompany interest income			116,164		48		3,370		(119,582	)	—
Interest expense			(120,178	)	(3,370	)	(1,328	)	124,876		—
Income from subsidiaries	505,560				129,056				(634,616	)	—
Income (loss) before income taxes	512,564		(7,024	)	500,300		136,080		(629,356	)	512,564
Income tax provision (benefit)	168,947		(2,556	)	182,055		49,518		(229,017	)	168,947
Net income (loss)	343,617		(4,468	)	318,245		86,562		(400,339	)	343,617
Other comprehensive income	504										504
Total comprehensive income (loss)	344,121		(4,468	)	318,245		86,562		(400,339	)	344,121

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended July 31, 2018:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,865,613		91,975		(44,235	)	1,913,353
Cost of revenues					1,468,135		52,247		(10,763	)	1,509,619
Selling, general and administrative	25		770		181,793		21,209		(29,726	)	174,071
	25		770		1,649,928		73,456		(40,489	)	1,683,690
Income (loss) from operations	(25	)	(770	)	215,685		18,519		(3,746	)	229,663
Other:
Income from unconsolidated entities					10,010		2,459				12,469
Other income – net					6,605		1,186		3,174		10,965
Intercompany interest income			36,395		663		1,154		(38,212	)	—
Interest expense			(35,625	)	(1,154	)	(691	)	37,470		—
Income from subsidiaries	253,122				22,627				(275,749	)	—
Income before income taxes	253,097		—		254,436		22,627		(277,063	)	253,097
Income tax provision	59,839				60,096		7,135		(67,231	)	59,839
Net income	193,258		—		194,340		15,492		(209,832	)	193,258
Other comprehensive income	170										170
Total comprehensive income	193,428		—		194,340		15,492		(209,832	)	193,428

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended July 31, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,459,115		94,422		(50,628	)	1,502,909
Cost of revenues					1,128,705		65,595		(18,272	)	1,176,028
Selling, general and administrative	21		1,045		162,388		20,207		(29,011	)	154,650
	21		1,045		1,291,093		85,802		(47,283	)	1,330,678
Income (loss) from operations	(21	)	(1,045	)	168,022		8,620		(3,345	)	172,231
Other:
Income from unconsolidated entities					2,746		17,179				19,925
Other income – net	2,367				8,827		673		(449	)	11,418
Intercompany interest income			41,111		48		1,224		(42,383	)	—
Interest expense			(42,433	)	(3,370	)	(374	)	46,177		—
Income from subsidiaries	201,228				24,954				(226,182	)	—
Income (loss) before income taxes	203,574		(2,367	)	201,227		27,322		(226,182	)	203,574
Income tax provision (benefit)	55,011		(839	)	71,787		9,419		(80,367	)	55,011
Net income (loss)	148,563		(1,528	)	129,440		17,903		(145,815	)	148,563
Other comprehensive income	167										167
Total comprehensive income (loss)	148,730		(1,528	)	129,440		17,903		(145,815	)	148,730

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2018:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	4,283		10,844		(145,009	)	59,749		(2,107	)	(72,240	)
Cash flow provided by (used in) investing activities:
Purchase of property and equipment - net					(21,434	)	(267	)			(21,701	)
Investments in unconsolidated entities					(2,210	)	(12,979	)			(15,189	)
Return of investments in unconsolidated entities					28,351		65,318				93,669
Investment in foreclosed real estate and distressed loans							(519	)			(519	)
Return of investments in foreclosed real estate and distressed loans							3,934				3,934
Intercompany advances	458,400		(407,313	)					(51,087	)	—
Net cash provided by (used in) investing activities	458,400		(407,313	)	4,707		55,487		(51,087	)	60,194
Cash flow provided by (used in) financing activities:
Proceeds from issuance of senior notes			400,000								400,000
Debt issuance costs for senior notes			(3,531	)							(3,531	)
Proceeds from loans payable					590,000		1,318,085				1,908,085
Principal payments of loans payable					(664,542	)	(1,355,953	)			(2,020,495	)
Proceeds from stock-based benefit plans	9,731										9,731
Purchase of treasury stock	(426,895	)									(426,895	)
Dividends paid	(45,519	)									(45,519	)
Receipts related to noncontrolling interest, net							22				22
Intercompany advances					15,479		(68,673	)	53,194		—
Net cash (used in) provided by financing activities	(462,683	)	396,469		(59,063	)	(106,519	)	53,194		(178,602	)
Net (decrease) increase in cash and cash equivalents	—		—		(199,365	)	8,717		—		(190,648	)
Cash and cash equivalents, beginning of period	—		—		533,204		179,625		—		712,829
Cash and cash equivalents, end of period	—		—		333,839		188,342		—		522,181

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by (used in) operating activities	131,024		19,726		(60,773	)	326,912		(8,904	)	407,985
Cash flow (used in) provided by investing activities:
Purchase of property and equipment — net					(22,797	)	396				(22,401	)
Sale and redemption of marketable securities and restricted investments — net	10,631						7,418				18,049
Investments in unconsolidated entities					(3,471	)	(116,243	)			(119,714	)
Return of investments in unconsolidated entities					57,068		82,278				139,346
Investment in foreclosed real estate and distressed loans							(688	)			(688	)
Return of investments in foreclosed real estate and distressed loans							12,429				12,429
Acquisition of a business					(85,183	)					(85,183	)
Investment paid - intercompany					(45,000	)			45,000		—
Intercompany advances	(82,881	)	(470,763	)					553,644		—
Net cash used in investing activities	(72,250	)	(470,763	)	(99,383	)	(14,410	)	598,644		(58,162	)
Cash flow (used in) provided by financing activities:
Proceeds from issuance of senior notes			455,483								455,483
Debt issuance costs for senior notes			(4,446	)							(4,446	)
Proceeds from loans payable					125,068		958,404				1,083,472
Principal payments of loans payable					(402,596	)	(1,110,482	)			(1,513,078	)
Proceeds from stock-based benefit plans	57,958										57,958
Purchase of treasury stock	(90,716	)									(90,716	)
Dividends paid	(26,016	)									(26,016	)
Investment received - intercompany							45,000		(45,000	)	—
Intercompany advances					638,771		(94,031	)	(544,740	)	—
Net cash (used in) provided by financing activities	(58,774	)	451,037		361,243		(201,109	)	(589,740	)	(37,343	)
Net increase in cash and cash equivalents	—		—		201,087		111,393		—		312,480
Cash and cash equivalents, beginning of period	—		—		583,440		50,275		—		633,715
Cash and cash equivalents, end of period	—		—		784,527		161,668		—		946,195