. Supplemental Guarantor Information

A 100% - owned subsidiary of the Company, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), has issued the following Senior Notes (amounts in thousands):



	Original Amount Issued		Amount outstanding at October 31, 2012
6.875% Senior Notes due 2012	$	300,000	$	59,068
5.95% Senior Notes due 2013	$	250,000	$	104,785
4.95% Senior Notes due 2014	$	300,000	$	267,960
5.15% Senior Notes due 2015	$	300,000	$	300,000
8.91% Senior Notes due 2017	$	400,000	$	400,000
6.75% Senior Notes due 2019	$	250,000	$	250,000
5.875% Senior Notes due 2022	$	419,876	$	419,876
0.50% Exchangeable Senior Notes due 2032	$	287,500	$	287,500

The obligations of the Subsidiary Issuer to pay principal, premiums, if any, and interest is guaranteed jointly and severally on a senior basis by the Company and a majority of the Company’s 100% owned home building subsidiaries (the “Guarantor Subsidiaries”). The guarantees are full and unconditional. The Company’s non-home building subsidiaries and several of its home building subsidiaries (the “Non-Guarantor Subsidiaries”) do not guarantee the debt. 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. Prior to the above described senior debt issuances, the Subsidiary Issuer did not have any operations.

Supplemental consolidating financial information of Toll Brothers, Inc., the Subsidiary Issuer, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and the eliminations to arrive at Toll Brothers, Inc. on a consolidated basis is presented below ($ amounts in thousands).

Consolidating Balance Sheet at October 31, 2012



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		711,375		67,449		—		778,824
Marketable securities					378,858		60,210				439,068
Restricted cash	28,268				17,561		1,447				47,276
Inventory					3,527,677		233,510				3,761,187
Property, construction and office equipment, net					103,206		3,008				106,214
Receivables, prepaid expenses and other assets	134		15,130		80,932		68,300		(16,181	)	148,315
Mortgage loans receivable							86,386				86,386
Customer deposits held in escrow					27,312		2,267				29,579
Investments in and advances to unconsolidated entities					70,145		260,472				330,617
Investments in non-performing loan portfolios and foreclosed real estate							95,522				95,522
Investments in and advances to consolidated entities	2,823,052		2,092,810		(1,173,254	)	(632,496	)	(3,110,112	)	—
Deferred tax assets, net of valuation allowance	358,056		—		—		—		—		358,056
	3,209,510		2,107,940		3,743,812		246,075		(3,126,293	)	6,181,044
LIABILITIES AND EQUITY
Liabilities
Loans payable					69,393		30,424				99,817
Senior notes			2,032,335						48,128		2,080,463
Mortgage company warehouse loan							72,664				72,664
Customer deposits					136,225		6,752				142,977
Accounts payable					99,889		22				99,911
Accrued expenses			27,476		341,233		119,244		(11,603	)	476,350
Income taxes payable	82,991						(2,000	)			80,991
Total liabilities	82,991		2,059,811		646,740		227,106		36,525		3,053,173
Equity
Stockholders’ equity
Common stock	1,687				48		3,006		(3,054	)	1,687
Additional paid-in capital	404,418		49,400				1,734		(51,134	)	404,418
Retained earnings	2,721,397		(1,271	)	3,101,833		8,068		(3,108,630	)	2,721,397
Treasury stock, at cost	(983	)									(983	)
Accumulated other comprehensive loss					(4,809	)	(10	)			(4,819	)
Total stockholders’ equity	3,126,519		48,129		3,097,072		12,798		(3,162,818	)	3,121,700
Noncontrolling interest							6,171				6,171
Total equity	3,126,519		48,129		3,097,072		18,969		(3,162,818	)	3,127,871
	3,209,510		2,107,940		3,743,812		246,075		(3,126,293	)	6,181,044

Consolidating Balance Sheet at October 31, 2011



	Toll Brothers, Inc.		Subsidiary Issuer	Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—	775,300		131,040		—		906,340
Marketable securities				233,572						233,572
Restricted cash				19,084		676				19,760
Inventory				2,911,211		505,512				3,416,723
Property, construction and office equipment, net				77,001		22,711				99,712
Receivables, prepaid expenses and other assets			6,768	74,980		26,067		(2,239	)	105,576
Mortgage loans receivable						63,175				63,175
Customer deposits held in escrow				10,682		4,177				14,859
Investments in and advances to unconsolidated entities				86,481		39,874				126,355
Investments in non-performing loan portfolios and foreclosed real estate						69,174				69,174
Investments in and advances to consolidated entities	2,694,419		1,508,550	(727,258	)	(477,322	)	(2,998,389	)	—
	2,694,419		1,515,318	3,461,053		385,084		(3,000,628	)	5,055,246
LIABILITIES AND EQUITY
Liabilities
Loans payable				61,994		44,562				106,556
Senior notes			1,490,972							1,490,972
Mortgage company warehouse loan						57,409				57,409
Customer deposits				71,388		12,436				83,824
Accounts payable				96,645		172				96,817
Accrued expenses			24,346	320,021		178,965		(2,281	)	521,051
Income taxes payable	108,066					(2,000	)			106,066
Total liabilities	108,066		1,515,318	550,048		291,544		(2,281	)	2,462,695
Equity
Stockholders’ equity
Common stock	1,687			3,054		2,003		(5,057	)	1,687
Additional paid-in capital	400,382			1,366		2,734		(4,100	)	400,382
Retained earnings	2,234,251			2,909,487		82,605		(2,992,092	)	2,234,251
Treasury stock, at cost	(47,065	)								(47,065	)
Accumulated other comprehensive loss	(2,902	)		(2,902	)			2,902		(2,902	)
Total stockholders’ equity	2,586,353		—	2,911,005		87,342		(2,998,347	)	2,586,353
Noncontrolling interest						6,198				6,198
Total equity	2,586,353		—	2,911,005		93,540		(2,998,347	)	2,592,551
	2,694,419		1,515,318	3,461,053		385,084		(3,000,628	)	5,055,246

Consolidating Statement of Operations for the fiscal year ended October 31, 2012



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Non- Guarantor Subsidiaries	Eliminations		Consolidated
Revenues					1,880,908	79,850	(77,977	)	1,882,781
Cost of revenues					1,523,074	22,736	(13,715	)	1,532,095
Selling, general and administrative	95		2,965		307,292	41,055	(64,150	)	287,257
Interest expense			115,141			576	(115,717	)	—
	95		118,106		1,830,366	64,367	(193,582	)	1,819,352
Income (loss) from operations	(95	)	(118,106	)	50,542	15,483	115,605		63,429
Other:
Income from unconsolidated entities					16,035	7,557			23,592
Other income - net	56		116,835		19,569	3,795	(114,334	)	25,921
Income (loss) from consolidated subsidiaries	112,981				26,835		(139,816	)	—
Income before income tax benefit (provision)	112,942		(1,271	)	112,981	26,835	(138,545	)	112,942
Income tax (benefit) provision	(374,204	)			25,805	6,129	(31,934	)	(374,204	)
Net income	487,146		(1,271	)	87,176	20,706	(106,611	)	487,146

Consolidating Statement of Operations for the fiscal year ended October 31, 2011



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,445,148		105,364		(74,631	)	1,475,881
Cost of revenues					1,217,512		57,617		(14,359	)	1,260,770
Selling, general and administrative	137		1,345		270,605		42,131		(52,863	)	261,355
Interest expense			103,604		1,504				(103,604	)	1,504
	137		104,949		1,489,621		99,748		(170,826	)	1,523,629
(Loss) income from operations	(137	)	(104,949	)	(44,473	)	5,616		96,195		(47,748	)
Other:
(Loss) income from unconsolidated entities					6,129		(7,323	)			(1,194	)
Other income (loss) - net			108,776		14,489		(3,667	)	(96,195	)	23,403
Expenses related to early retirement of debt			(3,827	)							(3,827	)
Loss from consolidated subsidiaries	(29,229	)			(5,374	)			34,603		—
Loss before income tax benefit	(29,366	)	—		(29,229	)	(5,374	)	34,603		(29,366	)
Income tax benefit	(69,161	)			(68,837	)	(12,656	)	81,493		(69,161	)
Net income	39,795		—		39,608		7,282		(46,890	)	39,795

Consolidating Statement of Operations for the fiscal year ended October 31, 2010



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,468,678		77,570		(51,477	)	1,494,771
Cost of revenues					1,325,092		63,279		(11,813	)	1,376,558
Selling, general and administrative	77		1,365		261,314		22,583		(22,115	)	263,224
Interest expense			106,411		22,751				(106,411	)	22,751
	77		107,776		1,609,157		85,862		(140,339	)	1,662,533
Loss from operations	(77	)	(107,776	)	(140,479	)	(8,292	)	88,862		(167,762	)
Other:
Income from unconsolidated entities					5,905		17,565				23,470
Other income - net			108,520		1,766		6,889		(88,862	)	28,313
Expenses related to early retirement of debt			(744	)	(464	)					(1,208	)
(Loss) income from consolidated subsidiaries	(117,110	)			16,162				100,948		—
(Loss) income before income tax benefit	(117,187	)	—		(117,110	)	16,162		100,948		(117,187	)
Income tax (benefit) provision	(113,813	)			(124,695	)	15,735		108,960		(113,813	)
Net (loss) income	(3,374	)	—		7,585		427		(8,012	)	(3,374	)

Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2012



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Cash flow (used in) provided by operating activities:
Net income (loss)	487,146		(1,271	)	87,176		20,706		(106,611	)	487,146
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	22		5,036		18,459		340		(1,271	)	22,586
Stock-based compensation	15,575										15,575
Recovery of investment in unconsolidated entities					(2,311	)					(2,311	)
Excess tax benefits from stock-based compensation	(5,776	)									(5,776	)
Income from unconsolidated entities					(13,724	)	(7,557	)			(21,281	)
Distributions of earnings from unconsolidated entities					5,258						5,258
Income from non-performing loan portfolios and foreclosed real estate							(12,444	)			(12,444	)
Deferred tax benefit	41,810										41,810
Deferred tax valuation allowances	(394,718	)									(394,718	)
Inventory impairments and write-offs					14,739						14,739
Change in fair value of mortgage loans receivable and derivative instruments							(670	)			(670	)
Gain on sale of marketable securities					(40	)					(40	)
Changes in operating assets and liabilities
Increase in inventory					(111,788	)	(84,160	)			(195,948	)
Origination of mortgage loans							(651,618	)			(651,618	)
Sale of mortgage loans							629,397				629,397
Decrease (increase) in restricted cash	(28,268	)			1,523		(771	)			(27,516	)
(Increase) decrease in receivables, prepaid expenses and other assets	(127,150	)	(585,591	)	190,977		375,007		112,835		(33,922	)
Increase (decrease) in customer deposits					48,157		(3,774	)			44,383
(Decrease) increase in accounts payable and accrued expenses	(2,584	)	3,130		5,363		(59,493	)	(4,953	)	(58,537	)
Decrease in current income taxes payable	(25,075	)									(25,075	)
Net cash (used in) provided by operating activities	(39,018	)	(578,696	)	243,789		204,963		—		(168,962	)
Cash flow used in investing activities:
Purchase of property and equipment — net					(13,706	)	(789	)			(14,495	)
Purchase of marketable securities					(519,737	)	(60,221	)			(579,958	)
Sale and redemption of marketable securities					368,253						368,253
Investment in and advances to unconsolidated entities					(3,637	)	(213,523	)			(217,160	)
Return of investments in unconsolidated entities					32,659		5,709				38,368
Investment in non-performing loan portfolios and foreclosed real estate							(30,090	)			(30,090	)
Return of investments in non-performing loan portfolios and foreclosed real estate							16,707				16,707
Acquisition of a business					(144,746	)					(144,746	)
Net cash used in investing activities	—		—		(280,914	)	(282,207	)	—		(563,121	)
Cash flow provide by (used in) financing activities:
Net proceeds from issuance of senior notes			578,696								578,696
Proceeds from loans payable							1,002,934				1,002,934
Principal payments of loans payable					(26,800	)	(989,281	)			(1,016,081	)
Proceeds from stock-based benefit plans	33,747										33,747
Excess tax benefits from stock-based compensation	5,776										5,776
Purchase of treasury stock	(505	)									(505	)
Net cash provided by (used in) financing activities	39,018		578,696		(26,800	)	13,653		—		604,567
Net decrease in cash and cash equivalents	—		—		(63,925	)	(63,591	)	—		(127,516	)
Cash and cash equivalents, beginning of year	—		—		775,300		131,040		—		906,340
Cash and cash equivalents, end of year	—		—		711,375		67,449		—		778,824

Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2011



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Cash flow provided by (used in) operating activities:
Net income	39,795		—		39,608		7,282		(46,890	)	39,795
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			3,210		19,343		589				23,142
Stock-based compensation	12,494										12,494
Impairment of investments in unconsolidated entities					15,170		25,700				40,870
Income from unconsolidated entities					(21,299	)	(18,377	)			(39,676	)
Distributions of earnings from unconsolidated entities					12,747		(666	)			12,081
Income from non-performing loan portfolios and foreclosed real estate							(5,113	)			(5,113	)
Deferred tax benefit	(18,188	)									(18,188	)
Deferred tax valuation allowances	18,188										18,188
Inventory impairments and write-offs					51,837						51,837
Change in fair value of mortgage loans receivable and derivative instruments							475				475
Expenses related to early retirement of debt			3,827								3,827
Changes in operating assets and liabilities
Increase in inventory					(89,869	)	(125,869	)			(215,738	)
Origination of mortgage loans							(630,294	)			(630,294	)
Sale of mortgage loans							659,610				659,610
Decrease (increase) in restricted cash					41,822		(676	)			41,146
(Increase) decrease in receivables, prepaid expenses and other assets	(116,370	)	53,557		(267,889	)	274,151		45,029		(11,522	)
Increase in customer deposits					1,677		11,498				13,175
(Decrease) increase in accounts payable and accrued expenses	2,287		(1,757	)	80,257		(111,272	)	1,861		(28,624	)
Decrease in income tax refund recoverable	141,590										141,590
Decrease in current income taxes payable	(56,225	)									(56,225	)
Net cash provided by (used in) operating activities	23,571		58,837		(116,596	)	87,038		—		52,850
Cash flow used in investing activities:
Purchase of property and equipment — net					(6,658	)	(2,895	)			(9,553	)
Purchase of marketable securities					(452,864	)					(452,864	)
Sale and redemption of marketable securities					408,831						408,831
Investment in and advances to unconsolidated entities					(70	)	(62	)			(132	)
Return of investments in unconsolidated entities					23,859		19,450				43,309
Investment in non-performing loan portfolios and foreclosed real estate							(66,867	)			(66,867	)
Return of investments in non-performing loan portfolios and foreclosed real estate							2,806				2,806
Net cash used in investing activities	—		—		(26,902	)	(47,568	)	—		(74,470	)
Cash flow used in financing activities:
Proceeds from loans payable							921,251				921,251
Principal payments of loans payable					(11,589	)	(941,032	)			(952,621	)
Redemption of senior notes			(58,837	)							(58,837	)
Proceeds from stock-based benefit plans	25,531										25,531
Purchase of treasury stock	(49,102	)									(49,102	)
Change in noncontrolling interest							2,678				2,678
Net cash used in financing activities	(23,571	)	(58,837	)	(11,589	)	(17,103	)	—		(111,100	)
Net (decrease) increase in cash and cash equivalents	—		—		(155,087	)	22,367		—		(132,720	)
Cash and cash equivalents, beginning of year	—		—		930,387		108,673		—		1,039,060
Cash and cash equivalents, end of year	—		—		775,300		131,040		—		906,340

Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2010



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Cash flow (used in) provided by operating activities:
Net (loss) income	(3,374	)	—		7,585		427		(8,012	)	(3,374	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	28		3,262		15,961		793				20,044
Stock-based compensation	11,677										11,677
Excess tax benefits from stock-based compensation	(4,954	)									(4,954	)
Income from unconsolidated entities					(5,773	)	(17,697	)			(23,470	)
Distributions of earnings from unconsolidated entities					10,297						10,297
Deferred tax benefit	60,697										60,697
Deferred tax valuation allowances	(60,697	)									(60,697	)
Inventory impairments and write-offs					107,508		7,750				115,258
Change in fair value of mortgage loans receivable and derivative instruments							(970	)			(970	)
Expenses related to early retirement of debt			744		464						1,208
Changes in operating assets and liabilities
Increase in inventory					(16,730	)	(123,614	)			(140,344	)
Origination of mortgage loans							(628,154	)			(628,154	)
Sale of mortgage loans							579,221				579,221
Increase in restricted cash					(60,906	)					(60,906	)
(Increase) decrease in receivables, prepaid expenses and other assets	(50,136	)	36,330		(143,435	)	144,320		9,806		(3,115	)
Decrease in customer deposits					(9,713	)	(5,469	)			(15,182	)
(Decrease) increase in accounts payable and accrued expenses	(274	)	5,778		(133,422	)	91,114		(1,794	)	(38,598	)
Decrease in income tax refund recoverable	20,250										20,250
Increase in current income taxes payable	14,828										14,828
Net cash (used in) provided by operating activities	(11,955	)	46,114		(228,164	)	47,721		—		(146,284	)
Cash flow used in investing activities:
Purchase of property and equipment — net					(4,750	)	(80	)			(4,830	)
Purchase of marketable securities					(157,962	)					(157,962	)
Sale and redemption of marketable securities					60,000						60,000
Investment in and advances to unconsolidated entities					(28,493	)	(29,793	)			(58,286	)
Return of investments in unconsolidated entities					9,696						9,696
Net cash used in investing activities	—		—		(121,509	)	(29,873	)	—		(151,382	)
Cash flow (used in) provided by financing activities:
Proceeds from loans payable							927,233				927,233
Principal payments of loans payable					(372,419	)	(944,095	)			(1,316,514	)
Redemption of senior subordinated notes					(47,872	)					(47,872	)
Redemption of senior notes			(46,114	)							(46,114	)
Proceeds from stock-based benefit plans	7,589										7,589
Excess tax benefits from stock-based compensation	4,954										4,954
Purchase of treasury stock	(588	)									(588	)
Change in noncontrolling interest							320				320
Net cash (used in) provided by financing activities	11,955		(46,114	)	(420,291	)	(16,542	)	—		(470,992	)
Net (decrease) increase in cash and cash equivalents	—		—		(769,964	)	1,306		—		(768,658	)
Cash and cash equivalents, beginning of year	—		—		1,700,351		107,367		—		1,807,718
Cash and cash equivalents, end of year	—		—		930,387		108,673		—		1,039,060