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 thousand):



	Original Amount Issued		Amount outstanding at January 31, 2013
	Original Amount Issued		Amount outstanding at January 31, 2013
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
0.5% 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 substantially all 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).

Condensed Consolidating Balance Sheet at January 31, 2013:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		293,256		75,500		—		368,756
Marketable securities					364,585		60,234				424,819
Restricted cash	15,060				17,369		1,328				33,757
Inventory					3,859,964		295,083				4,155,047
Property, construction and office equipment, net					109,618		3,259				112,877
Receivables, prepaid expenses and other assets	146		14,458		74,673		77,665		(14,061	)	152,881
Mortgage loans held for sale							49,400				49,400
Customer deposits held in escrow					28,455		2,846				31,301
Investments in and advances to unconsolidated entities					64,931		256,920				321,851
Investments in distressed loans							42,832				42,832
Investments in foreclosed real estate							68,764				68,764
Investments in and advances to consolidated entities	2,847,200		2,045,897		(1,044,776	)	(714,679	)	(3,133,642	)	—
Deferred tax assets, net of valuation allowances	355,966										355,966
	3,218,372		2,060,355		3,768,075		219,152		(3,147,703	)	6,118,251
LIABILITIES AND EQUITY
Liabilities:
Loans payable					78,308		15,006				93,314
Senior notes			1,976,150						45,747		2,021,897
Mortgage company warehouse loan							43,464				43,464
Customer deposits					148,085		8,673				156,758
Accounts payable					110,764		27				110,791
Accrued expenses			37,526		317,137		127,196		(14,207	)	467,652
Income taxes payable	83,265										83,265
Total liabilities	83,265		2,013,676		654,294		194,366		31,540		2,977,141
Equity:
Stockholders’ equity:
Common stock	1,692				48		3,006		(3,054	)	1,692
Additional paid-in capital	412,242		49,400				1,734		(51,134	)	412,242
Retained earnings	2,725,829		(2,721	)	3,113,875		13,901		(3,125,055	)	2,725,829
Treasury stock, at cost	(38	)									(38	)
Accumulated other comprehensive loss	(4,618	)			(142	)	(43	)			(4,803	)
Total stockholders’ equity	3,135,107		46,679		3,113,781		18,598		(3,179,243	)	3,134,922
Noncontrolling interest							6,188				6,188
Total equity	3,135,107		46,679		3,113,781		24,786		(3,179,243	)	3,141,110
	3,218,372		2,060,355		3,768,075		219,152		(3,147,703	)	6,118,251

Condensed 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					106,963		3,008				109,971
Receivables, prepaid expenses and other assets	134		15,130		77,175		68,300		(16,181	)	144,558
Mortgage loans held for sale							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 distressed loans							37,169				37,169
Investments in foreclosed real estate							58,353				58,353
Investments in and advances to consolidated entities	2,816,607		2,092,810		(1,168,812	)	(630,493	)	(3,110,112	)	—
Deferred tax assets, net of valuation allowances	358,056										358,056
	3,203,065		2,107,940		3,748,254		248,078		(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	80,991										80,991
Total liabilities	80,991		2,059,811		646,740		229,106		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	(4,445	)			(367	)	(7	)			(4,819	)
Total stockholders’ equity	3,122,074		48,129		3,101,514		12,801		(3,162,818	)	3,121,700
Noncontrolling interest							6,171				6,171
Total equity	3,122,074		48,129		3,101,514		18,972		(3,162,818	)	3,127,871
	3,203,065		2,107,940		3,748,254		248,078		(3,126,293	)	6,181,044

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended January 31, 2013 ($ in thousands):



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					419,778		25,490		(20,667	)	424,601
Cost of revenues					340,182		11,144		(5,389	)	345,937
Selling, general and administrative	16		687		83,578		11,070		(17,304	)	78,047
Interest expense			31,422				160		(31,582	)	—
	16		32,109		423,760		22,374		(54,275	)	423,984
Income (loss) from operations	(16	)	(32,109	)	(3,982	)	3,116		33,608		617
Other:
Income from unconsolidated entities					1,118		1,965				3,083
Other income - net	4		29,727		5,995		126		(31,226	)	4,626
Income from subsidiaries	8,338				5,207				(13,545	)	—
Income before income tax benefit	8,326		(2,382	)	8,338		5,207		(11,163	)	8,326
Income tax benefit	3,894		(933	)	3,266		2,039		(4,372	)	3,894
Net income	4,432		(1,449	)	5,072		3,168		(6,791	)	4,432
Other comprehensive income (loss)	(173	)			225		(36	)			16
Comprehensive income (loss)	4,259		(1,449	)	5,297		3,132		(6,791	)	4,448

Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income for the three months ended January 31, 2012 ($ in thousands):



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries	Eliminations		Consolidated
Revenues					327,692		12,386	(18,123	)	321,955
Cost of revenues					272,884		674	(1,950	)	271,608
Selling, general and administrative	13		478		73,287		9,519	(13,660	)	69,637
Interest expense			25,286					(25,286	)	—
	13		25,764		346,171		10,193	(40,896	)	341,245
Loss from operations	(13	)	(25,764	)	(18,479	)	2,193	22,773		(19,290	)
Other:
Loss (income) from unconsolidated entities					5,229		1,458			6,687
Other income - net	7		25,764		2,966		233	(22,775	)	6,195
Loss from subsidiaries	(6,402	)			3,884			2,518		—
Loss before income tax benefit	(6,408	)	—		(6,400	)	3,884	2,516		(6,408	)
Income tax benefit	(3,622	)	—		(3,618	)	2,195	1,423		(3,622	)
Net income	(2,786	)	—		(2,782	)	1,689	1,093		(2,786	)
Other comprehensive loss	(109	)			(552	)				(661	)
Comprehensive (loss) income	(2,895	)	—		(3,334	)	1,689	1,093		(3,447	)

Condensed Consolidating Statement of Cash Flows for the three months ended January 31, 2013 ($ in thousands):



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Cash flow from operating activities:
Net income (loss)	4,432		(1,449	)	5,072		3,168		(6,791	)	4,432
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	6		3,570		5,139		191		(2,381	)	6,525
Stock-based compensation	5,684										5,684
Income from unconsolidated entities					(1,117	)	(1,966	)			(3,083	)
Distributions of earnings from unconsolidated entities					690		1,723				2,413
Income from distressed loans and foreclosed real estate							(3,011	)			(3,011	)
Deferred tax provision	2,306										2,306
Deferred tax valuation allowance	(216	)									(216	)
Inventory impairments and write-offs					740				(31	)	709
Change in fair value of mortgage loans receivable and derivative instruments							554				554
Changes in operating assets and liabilities
Increase in inventory					(317,472	)	(61,274	)	31		(378,715	)
Origination of mortgage loans							(141,148	)			(141,148	)
Sale of mortgage loans							176,830				176,830
Decrease in restricted cash	13,208				192		119				13,519
(Increase) decrease in receivables, prepaid expenses and other assets	(30,512	)	46,897		(115,728	)	79,311		11,776		(8,256	)
Increase in customer deposits					10,717		1,342				12,059
Increase (decrease) in accounts payable and accrued expenses	(3,211	)	10,050		(9,867	)	6,934		(2,604	)	1,302
Increase in income taxes payable	2,274										2,274
Net cash (used in) provided by operating activities	(6,029	)	59,068		(421,634	)	62,773		—		(305,822	)
Cash flow provided by (used in) investing activities:
Purchase of property and equipment - net					(5,123	)	(268	)			(5,391	)
Purchase of marketable securities					(25,938	)	(81	)			(26,019	)
Sale and redemption of marketable securities					38,775						38,775
Investments in and advances to unconsolidated entities					(2,047	)	(5,567	)			(7,614	)
Return of investments in unconsolidated entities					7,960		9,351				17,311
Investments in distressed loans and foreclosed real estate							(16,252	)			(16,252	)
Return of investments in distressed loans and foreclosed real estate							3,015				3,015
Net cash provided by (used in) investing activities	—		—		13,627		(9,802	)	—		3,825
Cash flow (used in) provided by financing activities:
Proceeds from loans payable							244,830				244,830
Principal payments of loans payable					(10,112	)	(289,750	)			(299,862	)
Redemption of senior notes			(59,068	)							(59,068	)
Proceeds from stock-based benefit plans	6,108										6,108
Purchase of treasury stock	(79	)									(79	)
Net cash (used in) provided by financing activities	6,029		(59,068	)	(10,112	)	(44,920	)	—		(108,071	)
Net (decrease) increase in cash and cash equivalents	—		—		(418,119	)	8,051		—		(410,068	)
Cash and cash equivalents, beginning of period					711,375		67,449				778,824
Cash and cash equivalents, end of period	—		—		293,256		75,500		—		368,756

Condensed Consolidating Statement of Cash Flows for the three months ended January 31, 2012 ($ in thousands):



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Cash flow from operating activities:
Net (loss) income	(2,786	)	—		(2,782	)	1,689		1,093		(2,786	)
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization			794		4,419		16				5,229
Stock-based compensation	5,626										5,626
Income from unconsolidated entities					(7,729	)	1,042				(6,687	)
Distributions of earnings from unconsolidated entities					872						872
Income from distressed loans and foreclosed real estate							(4,138	)			(4,138	)
Deferred tax benefit	(1,246	)									(1,246	)
Deferred tax valuation allowance	1,246										1,246
Inventory impairments and write-offs					8,120						8,120
Change in fair value of mortgage loans receivable and derivative instruments							346				346
Gain on marketable securities					(39	)					(39	)
Changes in operating assets and liabilities
Increase in inventory					(100,509	)	(7,959	)			(108,468	)
Origination of mortgage loans							(120,662	)			(120,662	)
Sale of mortgage loans							146,895				146,895
(Increase) decrease in restricted cash	(28,307	)			650		(824	)			(28,481	)
Decrease (increase) in receivables, prepaid expenses and other assets	22,096		(4,793	)	(177,589	)	173,768		(1,701	)	11,781
Increase (decrease) in customer deposits					9,291		(6,061	)			3,230
Increase (decrease) in accounts payable and accrued expenses	(109	)	3,999		(11,553	)	(60,072	)	608		(67,127	)
Decrease in income taxes payable	(5,790	)									(5,790	)
Net cash (used in) provided by operating activities	(9,270	)	—		(276,849	)	124,040		—		(162,079	)
Cash flow used in investing activities:
Purchase of property and equipment — net					(2,563	)	(829	)			(3,392	)
Sale and redemption of marketable securities					88,217						88,217
Investments in and advances to unconsolidated entities					(256	)	(71,528	)			(71,784	)
Return of investments in unconsolidated entities					15,333						15,333
Investments in distressed loans and foreclosed real estate							(26,410	)			(26,410	)
Return of investments in distressed loans and foreclosed real estate							3,702				3,702
Acquisition of a business					(144,746	)					(144,746	)
Net cash used in investing activities	—		—		(44,015	)	(95,065	)	—		(139,080	)
Cash flow (used in) provided by financing activities:
Proceeds from loans payable							199,139				199,139
Principal payments of loans payable					(12,520	)	(225,376	)			(237,896	)
Proceeds from stock-based benefit plans	9,334										9,334
Purchase of treasury stock	(64	)									(64	)
Net cash (used in) provided by financing activities	9,270		—		(12,520	)	(26,237	)	—		(29,487	)
Net (decrease) increase in cash and cash equivalents	—		—		(333,384	)	2,738		—		(330,646	)
Cash and cash equivalents, beginning of period	—				775,300		131,040				906,340
Cash and cash equivalents, end of period	—		—		441,916		133,778		—		575,694