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Supplemental Guarantor Information
 6 Months Ended
Apr. 30, 2019
Supplemental Guarantor Information [Abstract]  
Supplemental Guarantor Information [Text Block] Supplemental Guarantor Information
At April 30, 2019, 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
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.
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 April 30, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
—

 
—

 
701,016

 
223,432

 
—

 
924,448

Inventory

 

 
7,713,940

 
76,900

 

 
7,790,840

Property, construction and office equipment, net

 

 
273,870

 
15,316

 

 
289,186

Receivables, prepaid expenses and other assets
1,585

 


 
269,886

 
470,437

 
(82,140
)
 
659,768

Mortgage loans held for sale

 

 

 
124,940

 

 
124,940

Customer deposits held in escrow

 

 
96,419

 
1,043

 

 
97,462

Investments in unconsolidated entities

 

 
46,092

 
343,993

 

 
390,085

Investments in and advances to consolidated entities
4,970,319

 
2,562,921

 
149,657

 
148,993

 
(7,831,890
)
 
—

 
4,971,904

 
2,562,921

 
9,250,880

 
1,405,054

 
(7,914,030
)
 
10,276,729

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Loans payable

 

 
1,025,599

 
1,809

 

 
1,027,408

Senior notes

 
2,512,404

 

 

 

 
2,512,404

Mortgage company loan facility

 

 

 
110,012

 

 
110,012

Customer deposits

 

 
415,831

 
3,648

 

 
419,479

Accounts payable

 

 
317,922

 
424

 

 
318,346

Accrued expenses
592

 
32,676

 
532,744

 
411,498

 
(86,842
)
 
890,668

Advances from consolidated entities

 


 
1,120,299

 
472,324

 
(1,592,623
)
 
—

Income taxes payable
12,172

 

 

 


 

 
12,172

Total liabilities
12,764

 
2,545,080

 
3,412,395

 
999,715

 
(1,679,465
)
 
5,290,489

Equity
 
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Common stock
1,779

 

 
48

 
3,006

 
(3,054
)
 
1,779

Additional paid-in capital
721,311

 
49,400

 


 
151,651

 
(201,051
)
 
721,311

Retained earnings (deficit)
5,370,410

 
(31,559
)
 
5,838,437

 
205,596

 
(6,030,460
)
 
5,352,424

Treasury stock, at cost
(1,135,166
)
 

 

 

 

 
(1,135,166
)
Accumulated other comprehensive income
806

 

 


 

 


 
806

Total stockholders’ equity
4,959,140

 
17,841

 
5,838,485

 
360,253

 
(6,234,565
)
 
4,941,154

Noncontrolling interest

 

 

 
45,086

 

 
45,086

Total equity
4,959,140

 
17,841

 
5,838,485

 
405,339

 
(6,234,565
)
 
4,986,240

 
4,971,904

 
2,562,921

 
9,250,880

 
1,405,054

 
(7,914,030
)
 
10,276,729

Condensed Consolidating Balance Sheet at October 31, 2018:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
—

 
—

 
1,011,863

 
170,332

 
—

 
1,182,195

Inventory

 

 
7,493,205

 
105,014

 

 
7,598,219

Property, construction and office equipment, net

 

 
169,265

 
24,016

 

 
193,281

Receivables, prepaid expenses and other assets


 


 
291,299

 
392,559

 
(133,080
)
 
550,778

Mortgage loans held for sale

 

 

 
170,731

 

 
170,731

Customer deposits held in escrow

 

 
116,332

 
1,241

 

 
117,573

Investments in unconsolidated entities

 

 
44,329

 
387,484

 

 
431,813

Investments in and advances to consolidated entities
4,791,629

 
2,916,557

 
91,740

 
126,872

 
(7,926,798
)
 
—

 
4,791,629

 
2,916,557

 
9,218,033

 
1,378,249

 
(8,059,878
)
 
10,244,590

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Loans payable

 

 
686,801

 


 

 
686,801

Senior notes

 
2,861,375

 

 

 

 
2,861,375

Mortgage company loan facility

 

 

 
150,000

 

 
150,000

Customer deposits

 

 
405,318

 
5,546

 

 
410,864

Accounts payable

 

 
361,655

 
443

 

 
362,098

Accrued expenses
471

 
37,341

 
600,907

 
462,128

 
(127,266
)
 
973,581

Advances from consolidated entities

 


 
1,551,196

 
476,040

 
(2,027,236
)
 
—

Income taxes payable
30,959

 

 

 


 

 
30,959

Total liabilities
31,430

 
2,898,716

 
3,605,877

 
1,094,157

 
(2,154,502
)
 
5,475,678

Equity
 
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Common stock
1,779

 

 
48

 
3,006

 
(3,054
)
 
1,779

Additional paid-in capital
727,053

 
49,400

 


 
93,734

 
(143,134
)
 
727,053

Retained earnings (deficit)
5,161,551

 
(31,559
)
 
5,612,108

 
178,639

 
(5,759,188
)
 
5,161,551

Treasury stock, at cost
(1,130,878
)
 

 

 

 

 
(1,130,878
)
Accumulated other comprehensive income
694

 

 


 

 


 
694

Total stockholders’ equity
4,760,199

 
17,841

 
5,612,156

 
275,379

 
(5,905,376
)
 
4,760,199

Noncontrolling interest

 

 

 
8,713

 

 
8,713

Total equity
4,760,199

 
17,841

 
5,612,156

 
284,092

 
(5,905,376
)
 
4,768,912

 
4,791,629

 
2,916,557

 
9,218,033

 
1,378,249

 
(8,059,878
)
 
10,244,590





Condensed Consolidating Statement of Operations and Comprehensive Income for the six months ended April 30, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
2,967,351

 
64,014

 

 
3,031,365

Land sales and other

 

 
30,793

 
107,644

 
(90,527
)
 
47,910

 
—

 
—

 
2,998,144

 
171,658

 
(90,527
)
 
3,079,275

 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
2,365,786

 
50,965

 
(159
)
 
2,416,592

Land sales and other


 


 
7,979

 
62,801

 
(33,606
)
 
37,174

 
—

 
—

 
2,373,765

 
113,766

 
(33,765
)
 
2,453,766

Selling, general and administrative
491

 
1,395

 
355,050

 
36,095

 
(52,422
)
 
340,609

Income (loss) from operations
(491
)
 
(1,395
)
 
269,329

 
21,797

 
(4,340
)
 
284,900

Other:
 
 
 
 
 
 
 
 
 
 
 
Income from unconsolidated entities

 

 
8,541

 
2,018

 

 
10,559

Other income – net

 


 
12,255

 
14,250

 
5,641

 
32,146

Intercompany interest income

 
67,004

 
870

 
2,980

 
(70,854
)
 
—

Interest expense

 
(65,609
)
 
(2,980
)
 
(964
)
 
69,553

 
—

Income from subsidiaries
328,096

 

 
40,081

 

 
(368,177
)
 
—

Income before income taxes
327,605

 
—

 
328,096

 
40,081

 
(368,177
)
 
327,605

Income tax provision
86,231

 

 
86,355

 
10,549

 
(96,904
)
 
86,231

Net income
241,374

 
—

 
241,741

 
29,532

 
(271,273
)
 
241,374

Other comprehensive income
112

 


 


 


 


 
112

Total comprehensive income
241,486

 
—

 
241,741

 
29,532

 
(271,273
)
 
241,486


Condensed Consolidating Statement of Operations and Comprehensive Income for the six months ended April 30, 2018:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues

 

 
2,627,343

 
237,658

 
(90,334
)
 
2,774,667

Cost of revenues

 

 
2,093,152

 
171,743

 
(32,258
)
 
2,232,637

Selling, general and administrative
32

 
1,627

 
333,128

 
40,334

 
(51,202
)
 
323,919

 
32

 
1,627

 
2,426,280

 
212,077

 
(83,460
)
 
2,556,556

Income (loss) from operations
(32
)
 
(1,627
)
 
201,063

 
25,581

 
(6,874
)
 
218,111

Other:
 
 
 
 
 
 
 
 
 
 
 
Income from unconsolidated entities

 

 
6,733

 
34,711

 

 
41,444

Other income – net

 


 
12,683

 
4,066

 
8,042

 
24,791

Intercompany interest income

 
69,203

 
389

 
2,081

 
(71,673
)
 
—

Interest expense

 
(67,576
)
 
(2,081
)
 
(786
)
 
70,443

 
—

Income from subsidiaries
284,378

 

 
65,653

 

 
(350,031
)
 
—

Income before income taxes
284,346

 
—

 
284,440

 
65,653

 
(350,093
)
 
284,346

Income tax provision
40,429

 

 
40,442

 
9,335

 
(49,777
)
 
40,429

Net income
243,917

 
—

 
243,998

 
56,318

 
(300,316
)
 
243,917

Other comprehensive income
341

 


 


 


 


 
341

Total comprehensive income
244,258

 
—

 
243,998

 
56,318

 
(300,316
)
 
244,258



Condensed Consolidating Statement of Operations and Comprehensive Income for the three months ended April 30, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
1,675,155

 
36,902

 

 
1,712,057

Land sales and other

 

 
15,460

 
34,329

 
(45,752
)
 
4,037

 
—

 
—

 
1,690,615

 
71,231

 
(45,752
)
 
1,716,094

 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues:
 
 
 
 
 
 
 
 
 
 


Home sales

 

 
1,344,891

 
29,616

 
(160
)
 
1,374,347

Land sales and other


 


 
3,841

 
16,909

 
(17,829
)
 
2,921

 
—

 
—

 
1,348,732

 
46,525

 
(17,989
)
 
1,377,268

Selling, general and administrative
101

 
662

 
185,133

 
17,342

 
(24,867
)
 
178,371

Income (loss) from operations
(101
)
 
(662
)

156,750


7,364


(2,896
)

160,455

Other:
 
 
 
 
 
 
 
 
 
 
 
Income from unconsolidated entities

 

 
3,154

 
1,265

 

 
4,419

Other income – net

 


 
6,758

 
1,019

 
3,508

 
11,285

Intercompany interest income

 
32,883

 
343

 
1,475

 
(34,701
)
 
—

Interest expense

 
(32,221
)
 
(1,475
)
 
(393
)
 
34,089

 
—

Income from subsidiaries
176,260

 

 
10,730

 

 
(186,990
)
 
—

Income before income taxes
176,159

 
—


176,260

 
10,730

 
(186,990
)
 
176,159

Income tax provision
46,835

 

 
46,859

 
2,914

 
(49,773
)
 
46,835

Net income
129,324

 
—


129,401


7,816


(137,217
)

129,324

Other comprehensive income
56

 


 


 


 


 
56

Total comprehensive income
129,380

 
—


129,401


7,816


(137,217
)

129,380



Condensed Consolidating Statement of Operations and Comprehensive Income for the three months ended April 30, 2018:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues

 

 
1,511,989

 
133,544

 
(46,334
)
 
1,599,199

Cost of revenues

 

 
1,218,344

 
94,256

 
(14,443
)
 
1,298,157

Selling, general and administrative
14

 
787

 
171,049

 
20,161

 
(25,359
)
 
166,652

 
14

 
787


1,389,393


114,417


(39,802
)
 
1,464,809

Income (loss) from operations
(14
)
 
(787
)

122,596


19,127


(6,532
)
 
134,390

Other:
 
 
 
 
 
 
 
 
 
 
 
Income from unconsolidated entities

 

 
1,601

 
963

 

 
2,564

Other income – net

 


 
6,798

 
3,022

 
5,974

 
15,794

Intercompany interest income

 
36,508

 
389

 
1,058

 
(37,955
)
 
—

Interest expense

 
(35,721
)
 
(1,058
)
 
(418
)
 
37,197

 
—

Income from subsidiaries
152,762

 

 
23,752

 

 
(176,514
)
 
—

Income before income taxes
152,748

 
—


154,078


23,752


(177,830
)
 
152,748

Income tax provision (benefit)
40,938

 

 
52,971

 
(2,527
)
 
(50,444
)
 
40,938

Net income
111,810

 
—


101,107


26,279


(127,386
)
 
111,810

Other comprehensive income
170

 


 


 


 


 
170

Total comprehensive income
111,980

 
—


101,107


26,279


(127,386
)
 
111,980




 
Condensed Consolidating Statement of Cash Flows for the six months ended April 30, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash used in operating activities
(525
)
 
(3,635
)
 
(69,339
)
 
(1,854
)
 
(10,325
)
 
(85,678
)
Cash flow provided by (used in) investing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchase of property and equipment - net

 

 
(45,805
)
 
864

 

 
(44,941
)
Investments in unconsolidated entities

 

 
(3,091
)
 
(28,469
)
 

 
(31,560
)
Return of investments in unconsolidated entities

 

 


 
70,465

 

 
70,465

Investment in foreclosed real estate and distressed loans

 

 


 
(522
)
 

 
(522
)
Return of investments in foreclosed real estate and distressed loans

 

 

 
1,214

 

 
1,214

Proceeds from sales of golf club property and an office building

 

 
15,319

 
18,220

 

 
33,539

Investment paid - intercompany

 

 
(57,917
)
 

 
57,917

 
—

Intercompany advances
56,901

 
353,635

 

 


 
(410,536
)
 
—

Net cash provided by (used in) investing activities
56,901

 
353,635

 
(91,494
)
 
61,772

 
(352,619
)
 
28,195

Cash flow provided by (used in) financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from loans payable

 

 
300,000

 
1,039,641

 

 
1,339,641

Debt issuance costs for loans payable

 

 
(1,948
)
 


 

 
(1,948
)
Principal payments of loans payable

 

 
(52,165
)
 
(1,079,630
)
 

 
(1,131,795
)
Redemption of senior notes


 
(350,000
)
 

 

 

 
(350,000
)
Proceeds from stock-based benefit plans, net
1,302

 

 

 

 

 
1,302

Purchase of treasury stock
(25,244
)
 

 

 

 

 
(25,244
)
Dividends paid
(32,434
)
 

 

 

 

 
(32,434
)
Receipts related to noncontrolling interest, net


 

 

 
13

 

 
13

Investment received - intercompany


 

 

 
57,917

 
(57,917
)
 
—

Intercompany advances


 

 
(395,905
)
 
(24,956
)
 
420,861

 
—

Net cash (used in) provided by financing activities
(56,376
)
 
(350,000
)
 
(150,018
)
 
(7,015
)
 
362,944

 
(200,465
)
Net (decrease) increase in cash, cash equivalents, and restricted cash
—

 
—

 
(310,851
)
 
52,903

 
—

 
(257,948
)
Cash, cash equivalents, and restricted cash, beginning of period
—

 
—

 
1,011,867

 
171,072

 
—

 
1,182,939

Cash and cash equivalents, end of period
—

 
—

 
701,016

 
223,975

 
—

 
924,991

Condensed Consolidating Statement of Cash Flows for the six months ended April 30, 2018:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash (used in) provided by operating activities
(34,719
)
 
5,576

 
(357,136
)
 
61,072

 
(1,061
)
 
(326,268
)
Cash flow provided by (used in) investing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchase of property and equipment — net

 

 
(6,660
)
 
159

 

 
(6,501
)
Investments in unconsolidated entities

 

 
(1,393
)
 
(9,407
)
 

 
(10,800
)
Return of investments in unconsolidated entities

 

 
23,421

 
30,894

 

 
54,315

Investment in foreclosed real estate and distressed loans

 

 


 
(195
)
 

 
(195
)
Return of investments in foreclosed real estate and distressed loans

 

 


 
3,122

 

 
3,122

Intercompany advances
346,154

 
(402,166
)
 

 

 
56,012

 
—

Net cash provided by (used in) investing activities
346,154

 
(402,166
)
 
15,368

 
24,573

 
56,012

 
39,941

Cash flow provided by (used in) financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from issuance of senior notes

 
400,000

 

 


 

 
400,000

Debt issuance costs for senior notes

 
(3,410
)
 

 


 

 
(3,410
)
Proceeds from loans payable

 

 
450,000

 
788,283

 

 
1,238,283

Principal payments of loans payable

 

 
(471,270
)
 
(804,878
)
 

 
(1,276,148
)
Proceeds from stock-based benefit plans, net
9,133

 

 

 

 

 
9,133

Purchase of treasury stock
(291,478
)
 

 

 

 

 
(291,478
)
Dividends paid
(29,090
)
 

 

 

 

 
(29,090
)
Intercompany advances


 

 
112,935

 
(57,984
)
 
(54,951
)
 
—

Net cash provided by (used in) financing activities
(311,435
)
 
396,590

 
91,665

 
(74,579
)
 
(54,951
)
 
47,290

Net (decrease) increase in cash, cash equivalents, and restricted cash
—

 
—

 
(250,103
)
 
11,066

 
—

 
(239,037
)
Cash, cash equivalents, and restricted cash, beginning of period
—

 
—

 
534,704

 
180,607

 
—

 
715,311

Cash, cash equivalents, and restricted cash, end of period
—

 
—

 
284,601

 
191,673

 
—

 
476,274