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Supplemental Guarantor Information
 3 Months Ended
Jan. 31, 2020
Supplemental Guarantor Information [Abstract]  
Supplemental Guarantor Information [Text Block] Supplemental Guarantor Information
At January 31, 2020, 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
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

3.80% Senior Notes due November 1, 2029
 
$
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 Revolving 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 Revolving Credit Facility. If there are no guarantors under the Revolving 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, 2020:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
—

 
—

 
336,479

 
183,314

 
—

 
519,793

Inventory

 

 
8,102,794

 
95,558

 

 
8,198,352

Property, construction and office equipment, net

 

 
275,830

 
9,955

 

 
285,785

Receivables, prepaid expenses and other assets
5,840

 


 
300,894

 
750,123

 
(78,691
)
 
978,166

Mortgage loans held for sale

 

 

 
111,995

 

 
111,995

Customer deposits held in escrow

 

 
71,568

 
273

 

 
71,841

Investments in unconsolidated entities

 

 
44,361

 
319,991

 

 
364,352

Investments in and advances to consolidated entities
4,721,368

 
2,724,966

 
185,371

 
147,413

 
(7,779,118
)
 
—

Income taxes receivable
56,922

 


 


 


 


 
56,922

 
4,784,130

 
2,724,966

 
9,317,297

 
1,618,622

 
(7,857,809
)
 
10,587,206

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Loans payable

 

 
1,275,341

 
36,100

 
(34,258
)
 
1,277,183

Senior notes

 
2,660,352

 

 

 

 
2,660,352

Mortgage company loan facility

 

 

 
97,653

 

 
97,653

Customer deposits

 

 
414,790

 
2,302

 

 
417,092

Accounts payable

 

 
283,119

 
31,363

 

 
314,482

Accrued expenses
6,776

 
46,773

 
572,041

 
462,991

 
(77,033
)
 
1,011,548

Advances from consolidated entities

 


 
527,929

 
507,995

 
(1,035,924
)
 
—

Income taxes payable
103,816

 

 

 


 

 
103,816

Total liabilities
110,592

 
2,707,125

 
3,073,220

 
1,138,404

 
(1,147,215
)
 
5,882,126

Equity
 
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Common stock
1,529

 

 
48

 
3,006

 
(3,054
)
 
1,529

Additional paid-in capital
723,109

 
49,400

 


 
199,034

 
(248,434
)
 
723,109

Retained earnings (deficit)
4,834,273

 
(31,559
)
 
6,244,029

 
228,649

 
(6,459,106
)
 
4,816,286

Treasury stock, at cost
(879,820
)
 

 

 

 

 
(879,820
)
Accumulated other comprehensive loss
(5,553
)
 

 


 

 


 
(5,553
)
Total stockholders’ equity
4,673,538

 
17,841

 
6,244,077

 
430,689

 
(6,710,594
)
 
4,655,551

Noncontrolling interest

 

 

 
49,529

 

 
49,529

Total equity
4,673,538

 
17,841

 
6,244,077

 
480,218

 
(6,710,594
)
 
4,705,080

 
4,784,130

 
2,724,966

 
9,317,297

 
1,618,622

 
(7,857,809
)
 
10,587,206

Condensed Consolidating Balance Sheet at October 31, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
—

 
—

 
1,082,067

 
203,947

 
—

 
1,286,014

Inventory

 

 
7,791,759

 
81,289

 

 
7,873,048

Property, construction and office equipment, net

 

 
263,140

 
10,272

 

 
273,412

Receivables, prepaid expenses and other assets


 


 
224,681

 
610,541

 
(119,781
)
 
715,441

Mortgage loans held for sale

 

 

 
218,777

 

 
218,777

Customer deposits held in escrow

 

 
74,303

 
100

 

 
74,403

Investments in unconsolidated entities

 

 
50,594

 
315,658

 

 
366,252

Investments in and advances to consolidated entities
5,172,737

 
2,704,551

 
163,371

 
147,413

 
(8,188,072
)
 
—

Income taxes receivable
20,791

 


 


 


 


 
20,791

 
5,193,528

 
2,704,551

 
9,649,915

 
1,587,997

 
(8,307,853
)
 
10,828,138

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Loans payable

 

 
1,109,614

 
36,092

 
(34,257
)
 
1,111,449

Senior notes

 
2,659,898

 

 

 

 
2,659,898

Mortgage company loan facility

 

 

 
150,000

 

 
150,000

Customer deposits

 

 
383,583

 
2,013

 

 
385,596

Accounts payable

 

 
347,715

 
884

 

 
348,599

Accrued expenses
754

 
26,812

 
569,476

 
443,180

 
(89,290
)
 
950,932

Advances from consolidated entities

 


 
1,052,370

 
503,058

 
(1,555,428
)
 
—

Income taxes payable
102,971

 

 

 


 

 
102,971

Total liabilities
103,725

 
2,686,710

 
3,462,758

 
1,135,227

 
(1,678,975
)
 
5,709,445

Equity
 
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Common stock
1,529

 

 
48

 
3,006

 
(3,054
)
 
1,529

Additional paid-in capital
726,879

 
49,400

 


 
177,034

 
(226,434
)
 
726,879

Retained earnings (deficit)
4,792,409

 
(31,559
)
 
6,187,109

 
225,853

 
(6,399,390
)
 
4,774,422

Treasury stock, at cost
(425,183
)
 

 

 

 

 
(425,183
)
Accumulated other comprehensive loss
(5,831
)
 

 


 

 


 
(5,831
)
Total stockholders’ equity
5,089,803

 
17,841

 
6,187,157

 
405,893

 
(6,628,878
)
 
5,071,816

Noncontrolling interest

 

 

 
46,877

 

 
46,877

Total equity
5,089,803

 
17,841

 
6,187,157

 
452,770

 
(6,628,878
)
 
5,118,693

 
5,193,528

 
2,704,551

 
9,649,915

 
1,587,997

 
(8,307,853
)
 
10,828,138





Condensed Consolidating Statement of Operations and Comprehensive Income for the three months ended January 31, 2020:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
1,289,377

 
7,960

 

 
1,297,337

Land sales and other

 

 
17,796

 
58,275

 
(41,977
)
 
34,094

 
—

 
—

 
1,307,173

 
66,235

 
(41,977
)
 
1,331,431

 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
1,053,702

 
6,002

 
196

 
1,059,900

Land sales and other


 


 
11,858

 
38,835

 
(18,411
)
 
32,282

 
—

 
—

 
1,065,560

 
44,837

 
(18,215
)
 
1,092,182

Selling, general and administrative
52

 
24

 
197,950

 
16,796

 
(23,069
)
 
191,753

Income (loss) from operations
(52
)
 
(24
)
 
43,663

 
4,602

 
(693
)
 
47,496

Other:
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from unconsolidated entities

 

 
14,202

 
(2,061
)
 

 
12,141

Other income – net

 


 
4,666

 
968

 
661

 
6,295

Intercompany interest income

 
36,370

 
1,505

 
1,293

 
(39,168
)
 
—

Interest expense

 
(36,346
)
 
(1,293
)
 
(1,561
)
 
39,200

 
—

Income from subsidiaries
65,984

 

 
3,241

 

 
(69,225
)
 
—

Income before income taxes
65,932

 
—

 
65,984

 
3,241

 
(69,225
)
 
65,932

Income tax provision
9,056

 

 
9,063

 
444

 
(9,507
)
 
9,056

Net income
56,876

 
—

 
56,921

 
2,797

 
(59,718
)
 
56,876

Other comprehensive income
278

 


 


 


 


 
278

Total comprehensive income
57,154

 
—

 
56,921

 
2,797

 
(59,718
)
 
57,154


Condensed Consolidating Statement of Operations and Comprehensive Income for the three months ended January 31, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
1,292,196

 
27,112

 

 
1,319,308

Land sales and other
 
 
 
 
15,333

 
73,315

 
(44,775
)
 
43,873

 
—

 
—

 
1,307,529

 
100,427

 
(44,775
)
 
1,363,181

 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
1,020,895

 
21,350

 


 
1,042,245

Land sales and other
 
 
 
 
4,138

 
45,891

 
(15,776
)
 
34,253

 
—

 
—

 
1,025,033

 
67,241

 
(15,776
)
 
1,076,498

Selling, general and administrative
390

 
733

 
169,917

 
18,753

 
(27,555
)
 
162,238

Income (loss) from operations
(390
)
 
(733
)
 
112,579

 
14,433

 
(1,444
)
 
124,445

Other:
 
 
 
 
 
 
 
 
 
 
 
Income from unconsolidated entities

 

 
5,387

 
753

 

 
6,140

Other income – net

 


 
5,497

 
13,231

 
2,133

 
20,861

Intercompany interest income

 
34,121

 
527

 
1,505

 
(36,153
)
 
—

Interest expense

 
(33,388
)
 
(1,505
)
 
(571
)
 
35,464

 
—

Income from subsidiaries
151,836

 

 
29,352

 

 
(181,188
)
 
—

Income before income taxes
151,446

 
—

 
151,837

 
29,351

 
(181,188
)
 
151,446

Income tax provision
39,396

 

 
39,497

 
7,635

 
(47,132
)
 
39,396

Net income
112,050

 
—

 
112,340

 
21,716

 
(134,056
)
 
112,050

Other comprehensive income
56

 


 


 


 


 
56

Total comprehensive income
112,106

 
—

 
112,340

 
21,716

 
(134,056
)
 
112,106


 
 
 
Condensed Consolidating Statement of Cash Flows for the three months ended January 31, 2020:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash (used in) provided by operating activities
(21,545
)
 
20,425

 
(330,808
)
 
(5,654
)
 
(28,834
)
 
(366,416
)
Cash flow (used in) provided by investing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchase of property and equipment - net

 

 
(27,071
)
 
232

 

 
(26,839
)
Investments in unconsolidated entities

 

 
(35
)
 
(4,874
)
 

 
(4,909
)
Return of investments in unconsolidated entities

 

 
9,507

 
19,476

 

 
28,983

Investment in foreclosed real estate and distressed loans

 

 


 
(234
)
 

 
(234
)
Return of investments in foreclosed real estate and distressed loans

 

 

 
883

 

 
883

Investment paid - intercompany

 

 
(85,631
)
 

 
85,631

 
—

Intercompany advances
508,290

 
(20,425
)
 

 


 
(487,865
)
 
—

Net cash (used in) provided by investing activities
508,290

 
(20,425
)
 
(103,230
)
 
15,483

 
(402,234
)
 
(2,116
)
Cash flow (used in) provided by financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from loans payable

 

 
150,000

 
552,729

 

 
702,729

Principal payments of loans payable

 

 
(3,405
)
 
(605,076
)
 

 
(608,481
)
Proceeds from stock-based benefit plans, net
4,235

 

 

 

 

 
4,235

Purchase of treasury stock
(476,024
)
 

 

 

 

 
(476,024
)
Dividends paid
(14,956
)
 

 

 

 

 
(14,956
)
Receipts related to noncontrolling interest, net


 

 

 
44

 

 
44

Investment received - intercompany


 

 

 
85,628

 
(85,628
)
 
—

Intercompany advances


 

 
(458,004
)
 
(58,692
)
 
516,696

 
—

Net cash (used in) provided by financing activities
(486,745
)
 
—

 
(311,409
)
 
(25,367
)
 
431,068

 
(392,453
)
Net decrease in cash, cash equivalents, and restricted cash
—

 
—

 
(745,447
)
 
(15,538
)
 
—

 
(760,985
)
Cash, cash equivalents, and restricted cash, beginning of period
—

 
—

 
1,082,090

 
237,553

 
—

 
1,319,643

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

 
—

 
336,643

 
222,015

 
—

 
558,658

Condensed Consolidating Statement of Cash Flows for the three months ended January 31, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash (used in) provided by operating activities
(33,260
)
 
4,268

 
(207,541
)
 
60,699

 
(9,391
)
 
(185,225
)
Cash flow provided by (used in) investing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchase of property and equipment — net

 

 
(19,707
)
 
131

 

 
(19,576
)
Investments in unconsolidated entities

 

 
(2,235
)
 
(14,970
)
 

 
(17,205
)
Return of investments in unconsolidated entities

 

 


 
42,677

 

 
42,677

Investment in foreclosed real estate and distressed loans

 

 


 
(130
)
 

 
(130
)
Return of investments in foreclosed real estate and distressed loans

 

 


 
482

 

 
482

Investment paid - intercompany

 

 
(20,000
)
 

 
20,000

 
—

Proceeds from the sale of a golf club property
 
 
 
 
 
 
18,220

 
 
 
18,220

Intercompany advances
76,603

 
345,732

 

 

 
(422,335
)
 
—

Net cash provided by (used in) investing activities
76,603

 
345,732

 
(41,942
)
 
46,410

 
(402,335
)
 
24,468

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

 

 
300,000

 
509,506

 

 
809,506

Debt issuance costs for loans payable

 

 
(2,058
)
 


 

 
(2,058
)
Principal payments of loans payable

 

 
(48,222
)
 
(585,371
)
 

 
(633,593
)
Redemption of senior notes


 
(350,000
)
 

 

 

 
(350,000
)
Proceeds from stock-based benefit plans, net
(1,831
)
 

 

 

 

 
(1,831
)
Purchase of treasury stock
(25,143
)
 

 

 

 

 
(25,143
)
Dividends paid
(16,369
)
 

 

 

 

 
(16,369
)
Investment received - intercompany


 

 

 
20,000

 
(20,000
)
 
—

Intercompany advances


 

 
(387,492
)
 
(44,234
)
 
431,726

 
—

Net cash (used in) provided by financing activities
(43,343
)
 
(350,000
)
 
(137,772
)
 
(100,099
)
 
411,726

 
(219,488
)
Net (decrease) increase in cash, cash equivalents, and restricted cash
—

 
—

 
(387,255
)
 
7,010

 
—

 
(380,245
)
Cash, cash equivalents, and restricted cash, beginning of period
—

 
—

 
1,011,867

 
171,072

 
—

 
1,182,939

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

 
—

 
624,612

 
178,082

 
—

 
802,694