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 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 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. The Subsidiary Issuer generates no operating revenues and does not have any independent operations other the the financing of other subsidiaries of the Company by lending the proceeds from the above described debt issuances.

As of April 30, 2013, certain Non-Guarantor Subsidiaries became Guarantor Subsidiaries. This change in status has been retrospectively reflected in the accompanying condensed consolidating financial statements.

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.

The condensed consolidating financial statements have been revised in order to (i) reflect the transfer of the balance sheet, statements of operations and cash flows of certain non-guarantor subsidiaries to guarantor subsidiaries as a result of such entities becoming guarantor subsidiaries as of April 30, 2013 and the reclassification of guarantor and non-guarantor intercompany advances and equity balances with corresponding offsets in the elimination column and (ii) revise the presentation of cash flows from operating activities, financing activities and investing activities in the condensed consolidating statements of cash flows for the three-month periods ended January 31, 2013 and 2012 to reflect intercompany activity, which had previously been included in cash flow from operating activities, as cash flow from investing activities and cash flow from financing activities.

This revised presentation has no impact or effect on Toll Brothers, Inc.'s condensed consolidated financial statements for any period presented, including the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, or Statements of Cash Flows.

Summary financial information related to the transfer of certain Non-Guarantor Subsidiaries to Guarantor Subsidiaries and the reclassification of guarantor and non-guarantor intercompany advances and equity balances, resulting in a decrease in Non-Guarantor Subsidiaries amounts, is presented below (amounts in thousands).



	January 31, 2013		October 31, 2012
Inventory	$	235,490	$	168,218
Investments in and advances to unconsolidated entities	$	100,887	$	110,014
Total assets	$	341,569	$	282,638
Loans payable	$	15,006	$	30,424
Intercompany advances	$	306,410	$	237,298
Total liabilities	$	333,393	$	277,738
Equity	$	8,176	$	4,900



	Three months ended January 31,
	2013		2012
Revenue	$	10,444	$	—
Operating income	$	3,202	$	3,393
Income (loss) before income taxes	$	1,003	$	(395	)

Following are reconciliations of the amounts previously reported to the revised amounts as stated in the following components of the revised condensed consolidating statements of cash flows for the three-month periods ended January 31, 2013 and 2012.

For the three months ended January 31, 2013



	As Previously Reported			Reclassification of intercompany activity			Change in status from Non-Guarantor to Guarantor			As Revised
Cash flow (used in) provided by operating activities:
Net cash (used in) provided by operating activities
Toll Brothers, Inc.	$	(6,029	)	$	30,082		$	—		$	24,053
Subsidiary Issuer	$	59,068		$	(46,913	)	$	—		$	12,155
Guarantor Subsidiaries	$	(421,634	)	$	37,381		$	6,389		$	(377,864	)
Non-Guarantor Subsidiaries	$	62,773		$	(15,074	)	$	(6,389	)	$	41,310
Elimination	$	—		$	(5,476	)	$	—		$	(5,476	)

Cash flow provided by (used in) investing activities:
Intercompany advances
Toll Brothers, Inc.	$	—		$	(30,082	)	$	—		$	(30,082	)
Subsidiary Issuer	$	—		$	46,913		$	—		$	46,913
Guarantor Subsidiaries	$	—		$	—		$	—		$	—
Non-Guarantor Subsidiaries	$	—		$	—		$	—		$	—
Elimination	$	—		$	(16,831	)	$	—		$	(16,831	)

Net cash provided by (used in) investing activities
Toll Brothers, Inc.	$	—		$	(30,082	)	$	—		$	(30,082	)
Subsidiary Issuer	$	—		$	46,913		$	—		$	46,913
Guarantor Subsidiaries	$	13,627		$	—		$	9,104		$	22,731
Non-Guarantor Subsidiaries	$	(9,802	)	$	—		$	(9,104	)	$	(18,906	)
Elimination	$	—		$	(16,831	)	$	—		$	(16,831	)

Cash flow (used in) provided by financing activities:
Intercompany advances
Toll Brothers, Inc.	$	—		$	—		$	—		$	—
Subsidiary Issuer	$	—		$	—		$	—		$	—
Guarantor Subsidiaries	$	—		$	(37,381	)	$	—		$	(37,381	)
Non-Guarantor Subsidiaries	$	—		$	15,074		$	—		$	15,074
Elimination	$	—		$	22,307		$	—		$	22,307

Net cash (used in) provided by financing activities
Toll Brothers, Inc.	$	6,029		$	—		$	—		$	6,029
Subsidiary Issuer	$	(59,068	)	$	—		$	—		$	(59,068	)
Guarantor Subsidiaries	$	(10,112	)	$	(37,381	)	$	(15,720	)	$	(63,213	)
Non-Guarantor Subsidiaries	$	(44,920	)	$	15,074		$	15,720		$	(14,126	)
Elimination	$	—		$	22,307		$	—		$	22,307

For the three months ended January 31, 2012



	As Previously Reported			Reclassification of intercompany activity			Change in status from Non-Guarantor to Guarantor			As Revised
Cash flow (used in) provided by operating activities:
Net cash (used in) provided by operating activities
Toll Brothers, Inc.	$	(9,270	)	$	(19,315	)	$	—		$	(28,585	)
Subsidiary Issuer	$	—		$	4,793		$	—		$	4,793
Guarantor Subsidiaries	$	(276,849	)	$	71,183		$	(140	)	$	(205,806	)
Non-Guarantor Subsidiaries	$	124,040		$	(56,624	)	$	140		$	67,556
Elimination	$	—		$	(37	)	$	—		$	(37	)

Cash flow (used in) provided by investing activities:
Intercompany advances
Toll Brothers, Inc.	$	—		$	19,315		$	—		$	19,315
Subsidiary Issuer	$	—		$	(4,793	)	$	—		$	(4,793	)
Guarantor Subsidiaries	$	—		$	—		$	—		$	—
Non-Guarantor Subsidiaries	$	—		$	—		$	—		$	—
Elimination	$	—		$	(14,522	)	$	—		$	(14,522	)

Net cash (used in) provided by investing activities
Toll Brothers, Inc.	$	—		$	19,315		$	—		$	19,315
Subsidiary Issuer	$	—		$	(4,793	)	$	—		$	(4,793	)
Guarantor Subsidiaries	$	(44,015	)	$	—		$	(880	)	$	(44,895	)
Non-Guarantor Subsidiaries	$	(95,065	)	$	—		$	880		$	(94,185	)
Elimination	$	—		$	(14,522	)	$	—		$	(14,522	)

Cash flow (used in) provided by financing activities:
Intercompany advances
Toll Brothers, Inc.	$	—		$	—		$	—		$	—
Subsidiary Issuer	$	—		$	—		$	—		$	—
Guarantor Subsidiaries	$	—		$	(71,183	)	$	—		$	(71,183	)
Non-Guarantor Subsidiaries	$	—		$	56,624		$	—		$	56,624
Elimination	$	—		$	14,559		$	—		$	14,559

Net cash (used in) provided by financing activities
Toll Brothers, Inc.	$	9,270		$	—		$	—		$	9,270
Subsidiary Issuer	$	—		$	—		$	—		$	—
Guarantor Subsidiaries	$	(12,520	)	$	(71,183	)	$	(692	)	$	(84,395	)
Non-Guarantor Subsidiaries	$	(26,237	)	$	56,624		$	692		$	31,079
Elimination	$	—		$	14,559		$	—		$	14,559

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	—		—		293,678		75,078		—		368,756
Marketable securities					364,585		60,234				424,819
Restricted cash	15,060				17,369		1,328				33,757
Inventory					4,095,454		59,593				4,155,047
Property, construction and office equipment, net					109,618		3,259				112,877
Receivables, prepaid expenses and other assets	146		14,458		79,443		72,895		(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					165,818		156,033				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		4,740				(4,897,837	)	—
Deferred tax assets, net of valuation allowances	355,966										355,966
	3,218,372		2,060,355		5,159,160		592,262		(4,911,898	)	6,118,251
LIABILITIES AND EQUITY
Liabilities:
Loans payable					93,314						93,314
Senior notes			1,976,150						45,747		2,021,897
Mortgage company warehouse loan							43,464				43,464
Customer deposits					156,758						156,758
Accounts payable					110,764		27				110,791
Accrued expenses			37,526		320,441		123,892		(14,207	)	467,652
Advances from consolidated entities					1,302,700		408,269		(1,710,969	)	—
Income taxes payable	83,265										83,265
Total liabilities	83,265		2,013,676		1,983,977		575,652		(1,679,429	)	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	)	3,175,277		5,725		(3,178,281	)	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		3,175,183		10,422		(3,232,469	)	3,134,922
Noncontrolling interest							6,188				6,188
Total equity	3,135,107		46,679		3,175,183		16,610		(3,232,469	)	3,141,110
	3,218,372		2,060,355		5,159,160		592,262		(4,911,898	)	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					712,024		66,800				778,824
Marketable securities					378,858		60,210				439,068
Restricted cash	28,268				17,561		1,447				47,276
Inventory					3,695,895		65,292				3,761,187
Property, construction and office equipment, net					106,963		3,008				109,971
Receivables, prepaid expenses and other assets	134		15,130		76,192		64,543		(11,441	)	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					180,159		150,458				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		4,740				(4,914,157	)	—
Deferred tax assets, net of valuation allowances	358,056										358,056
	3,203,065		2,107,940		5,199,704		595,933		(4,925,598	)	6,181,044
LIABILITIES AND EQUITY
Liabilities:
Loans payable					99,817						99,817
Senior notes			2,032,335						48,128		2,080,463
Mortgage company warehouse loan							72,664				72,664
Customer deposits					142,919		58				142,977
Accounts payable					99,889		22				99,911
Accrued expenses			27,476		344,555		115,922		(11,603	)	476,350
Advances from consolidated entities					1,341,189		393,195		(1,734,384	)	—
Income taxes payable	80,991										80,991
Total liabilities	80,991		2,059,811		2,028,369		581,861		(1,697,859	)	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	)	3,171,654		3,168		(3,173,551	)	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		3,171,335		7,901		(3,227,739	)	3,121,700
Noncontrolling interest							6,171				6,171
Total equity	3,122,074		48,129		3,171,335		14,072		(3,227,739	)	3,127,871
	3,203,065		2,107,940		5,199,704		595,933		(4,925,598	)	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					430,222		15,046		(20,667	)	424,601
Cost of revenues					348,703		4,992		(7,758	)	345,937
Selling, general and administrative	16		687		84,508		10,140		(17,304	)	78,047
	16		687		433,211		15,132		(25,062	)	423,984
Income (loss) from operations	(16	)	(687	)	(2,989	)	(86	)	4,395		617
Other:
Income from unconsolidated entities					1,096		1,987				3,083
Other income - net	2,386				6,027		2,494		(6,281	)	4,626
Intercompany interest income			29,727						(29,727	)	—
Interest expense			(31,422	)			(191	)	31,613		—
Income from subsidiaries	5,956				1,822				(7,778	)	—
Income (loss) before income taxes	8,326		(2,382	)	5,956		4,204		(7,778	)	8,326
Income tax provision (benefit)	3,894		(933	)	2,333		1,647		(3,047	)	3,894
Net income (loss)	4,432		(1,449	)	3,623		2,557		(4,731	)	4,432
Other comprehensive income (loss)	(173	)			225		(36	)			16
Comprehensive income (loss)	4,259		(1,449	)	3,848		2,521		(4,731	)	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					273,050		4,312		(5,754	)	271,608
Selling, general and administrative	13		478		73,532		9,274		(13,660	)	69,637
	13		478		346,582		13,586		(19,414	)	341,245
Loss from operations	(13	)	(478	)	(18,890	)	(1,200	)	1,291		(19,290	)
Other:
Income from unconsolidated entities					5,229		1,458				6,687
Other income - net	5				2,982		4,050		(842	)	6,195
Intercompany interest income			25,764						(25,764	)	—
Interest expense			(25,286	)			(29	)	25,315		—
(Loss) income from subsidiaries	(6,400	)			4,279				2,121		—
(Loss) income before income taxes	(6,408	)	—		(6,400	)	4,279		2,121		(6,408	)
Income tax (benefit) provision	(3,622	)	—		(3,618	)	2,419		1,199		(3,622	)
Net (loss) income	(2,786	)	—		(2,782	)	1,860		922		(2,786	)
Other comprehensive loss	(109	)			(552	)					(661	)
Comprehensive (loss) income	(2,895	)	—		(3,334	)	1,860		922		(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
Net cash (used in) provided by operating activities	24,053		12,155		(377,864	)	41,310		(5,476	)	(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					(2,280	)	(5,334	)			(7,614	)
Return of investments in unconsolidated entities					17,297		14				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
Intercompany advances	(30,082	)	46,913						(16,831	)	—
Net cash provided by (used in) investing activities	(30,082	)	46,913		22,731		(18,906	)	(16,831	)	3,825
Cash flow (used in) provided by financing activities:
Proceeds from loans payable							244,830				244,830
Principal payments of loans payable					(25,832	)	(274,030	)			(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	)
Intercompany advances					(37,381	)	15,074		22,307		—
Net cash (used in) provided by financing activities	6,029		(59,068	)	(63,213	)	(14,126	)	22,307		(108,071	)
Net (decrease) increase in cash and cash equivalents	—		—		(418,346	)	8,278		—		(410,068	)
Cash and cash equivalents, beginning of period					712,024		66,800				778,824
Cash and cash equivalents, end of period	—		—		293,678		75,078		—		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
Net cash (used in) provided by operating activities	(28,585	)	4,793		(205,806	)	67,556		(37	)	(162,079	)
Cash flow (used in) provided by investing activities:
Purchase of property and equipment — net					(3,443	)	51				(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	)
Intercompany advances	19,315		(4,793	)					(14,522	)	—
Net cash (used in) provided by investing activities	19,315		(4,793	)	(44,895	)	(94,185	)	(14,522	)	(139,080	)
Cash flow (used in) provided by financing activities:
Proceeds from loans payable							199,139				199,139
Principal payments of loans payable					(13,212	)	(224,684	)			(237,896	)
Proceeds from stock-based benefit plans	9,334										9,334
Purchase of treasury stock	(64	)									(64	)
Intercompany advances					(71,183	)	56,624		14,559		—
Net cash (used in) provided by financing activities	9,270		—		(84,395	)	31,079		14,559		(29,487	)
Net (decrease) increase in cash and cash equivalents	—		—		(335,096	)	4,450		—		(330,646	)
Cash and cash equivalents, beginning of period	—				777,012		129,328				906,340
Cash and cash equivalents, end of period	—		—		441,916		133,778		—		575,694