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):



			Amount outstanding at
	Original Amount Issued		April 30, 2014
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
4.375% Senior Notes due 2023	$	400,000	$	400,000
0.50% Exchangeable Senior Notes due 2032	$	287,500	$	287,500
4.0% Senior Notes due 2018	$	350,000	$	350,000
5.625% Senior Notes due 2024	$	250,000	$	250,000

The obligations of the Subsidiary Issuer to pay principal, premiums, if any, and interest are guaranteed jointly and severally on a senior basis by 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 (together, the “Non-Guarantor Subsidiaries”) do not guarantee the debt. The Subsidiary Issuer generates no operating revenues and does not have any independent operations other than the financing of other subsidiaries of the Company by lending the proceeds from the above described debt issuances. The indentures under which the Senior Notes were issued provide that any subsidiary of the Company that provides a guarantee of 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 the Company’s 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 the Company’s consolidated net worth as of the end of the Company’s most recent fiscal quarter; (iv) such release would not have a material adverse effect on the home building business of the Company and its subsidiaries; 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 users of these financial statements.

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 April 30, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		235,689		116,132		—		351,821
Marketable securities					2,977		10,023				13,000
Restricted cash	15,202				6,066		1,274				22,542
Inventory					6,447,307		100,717				6,548,024
Property, construction and office equipment, net					116,677		14,545				131,222
Receivables, prepaid expenses and other assets	14		18,586		127,331		122,173		(18,170	)	249,934
Mortgage loans held for sale							68,642				68,642
Customer deposits held in escrow					54,417						54,417
Investments in and advances to unconsolidated entities					153,428		288,414				441,842
Investments in distressed loans							18,799				18,799
Investments in foreclosed real estate							76,652				76,652
Investments in and advances to consolidated entities	3,498,129		2,676,995		4,740				(6,179,864	)	—
Deferred tax assets, net of valuation allowances	268,171										268,171
	3,781,516		2,695,581		7,148,632		817,371		(6,198,034	)	8,245,066
LIABILITIES AND EQUITY
Liabilities:
Loans payable					747,088						747,088
Senior notes			2,620,373						34,065		2,654,438
Mortgage company warehouse loan							56,842				56,842
Customer deposits					254,621						254,621
Accounts payable					204,634		94				204,728
Accrued expenses	14		35,701		368,330		154,217		(18,589	)	539,673
Advances from consolidated entities					2,145,441		583,803		(2,729,244	)	—
Income taxes payable	84,619										84,619
Total liabilities	84,633		2,656,074		3,720,114		794,956		(2,713,768	)	4,542,009
Equity:
Stockholders’ equity:
Common stock	1,778				48		3,006		(3,054	)	1,778
Additional paid-in capital	694,335		49,400				1,734		(51,134	)	694,335
Retained earnings (deficits)	3,002,805		(9,893	)	3,428,533		11,438		(3,430,078	)	3,002,805
Treasury stock, at cost	(79	)									(79	)
Accumulated other comprehensive loss	(1,956	)			(63	)	(11	)			(2,030	)
Total stockholders’ equity	3,696,883		39,507		3,428,518		16,167		(3,484,266	)	3,696,809
Noncontrolling interest							6,248				6,248
Total equity	3,696,883		39,507		3,428,518		22,415		(3,484,266	)	3,703,057
	3,781,516		2,695,581		7,148,632		817,371		(6,198,034	)	8,245,066

Condensed Consolidating Balance Sheet at October 31, 2013:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		670,102		102,870		—		772,972
Marketable securities					42,491		10,017				52,508
Restricted cash	15,182				16,007		847				32,036
Inventory					4,625,252		25,160				4,650,412
Property, construction and office equipment, net					116,809		14,511				131,320
Receivables, prepaid expenses and other assets	33		15,675		101,321		131,701		(19,435	)	229,295
Mortgage loans held for sale							113,517				113,517
Customer deposits held in escrow					46,888						46,888
Investments in and advances to unconsolidated entities					175,159		227,974				403,133
Investments in distressed loans							36,374				36,374
Investments in foreclosed real estate							72,972				72,972
Investments in and advances to consolidated entities	3,113,203		2,334,503		4,740				(5,452,446	)	—
Deferred tax assets, net of valuation allowances	286,032										286,032
	3,414,450		2,350,178		5,798,769		735,943		(5,471,881	)	6,827,459
LIABILITIES AND EQUITY
Liabilities:
Loans payable					107,222						107,222
Senior notes			2,282,719						38,723		2,321,442
Mortgage company warehouse loan							75,000				75,000
Customer deposits					212,669						212,669
Accounts payable					167,733		54				167,787
Accrued expenses			25,045		355,590		161,402		(19,050	)	522,987
Advances from consolidated entities					1,627,130		467,929		(2,095,059	)	—
Income taxes payable	81,188										81,188
Total liabilities	81,188		2,307,764		2,470,344		704,385		(2,075,386	)	3,488,295
Equity:
Stockholders’ equity:
Common stock	1,694				48		3,006		(3,054	)	1,694
Additional paid-in capital	441,677		49,400				1,734		(51,134	)	441,677
Retained earnings (deficits)	2,892,003		(6,986	)	3,328,629		20,664		(3,342,307	)	2,892,003
Treasury stock, at cost											—
Accumulated other comprehensive loss	(2,112	)			(252	)	(23	)			(2,387	)
Total stockholders’ equity	3,333,262		42,414		3,328,425		25,381		(3,396,495	)	3,332,987
Noncontrolling interest							6,177				6,177
Total equity	3,333,262		42,414		3,328,425		31,558		(3,396,495	)	3,339,164
	3,414,450		2,350,178		5,798,769		735,943		(5,471,881	)	6,827,459

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the six months ended April 30, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,520,077	33,267		(49,289	)	1,504,055
Cost of revenues					1,206,293	4,059		(8,322	)	1,202,030
Selling, general and administrative	69		1,865		213,647	26,436		(39,827	)	202,190
	69		1,865		1,419,940	30,495		(48,149	)	1,404,220
Income (loss) from operations	(69	)	(1,865	)	100,137	2,772		(1,140	)	99,835
Other:
Income (loss) from unconsolidated entities					37,578	(336	)			37,242
Other income - net	4,660				17,815	7,208		(2,041	)	27,642
Intercompany interest income			76,107					(76,107	)	—
Interest expense			(78,899	)		(389	)	79,288		—
Income from subsidiaries	160,128				4,598			(164,726	)	—
Income (loss) before income taxes	164,719		(4,657	)	160,128	9,255		(164,726	)	164,719
Income tax provision (benefit)	53,917		(1,751	)	60,224	3,481		(61,954	)	53,917
Net income (loss)	110,802		(2,906	)	99,904	5,774		(102,772	)	110,802
Other comprehensive income	156				189	12				357
Total comprehensive income (loss)	110,958		(2,906	)	100,093	5,786		(102,772	)	111,159

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the six months ended April 30, 2013:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					953,625	35,383		(48,403	)	940,605
Cost of revenues					772,981	9,935		(16,966	)	765,950
Selling, general and administrative	61		1,402		170,586	21,057		(35,509	)	157,597
	61		1,402		943,567	30,992		(52,475	)	923,547
Income (loss) from operations	(61	)	(1,402	)	10,058	4,391		4,072		17,058
Other:
Income from unconsolidated entities					5,040	3,036				8,076
Other income - net	4,685				24,472	2,567		(7,564	)	24,160
Intercompany interest income			60,060					(60,060	)	—
Interest expense			(63,330	)		(222	)	63,552		—
Income from subsidiaries	44,670				5,100			(49,770	)	—
Income (loss) before income taxes	49,294		(4,672	)	44,670	9,772		(49,770	)	49,294
Income tax benefit (provision)	20,188		(1,830	)	17,493	3,827		(19,490	)	20,188
Net income (loss)	29,106		(2,842	)	27,177	5,945		(30,280	)	29,106
Other comprehensive (loss) income	(18	)			36	(60	)			(42	)
Total comprehensive income (loss)	29,088		(2,842	)	27,213	5,885		(30,280	)	29,064

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended April 30, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					869,305		17,665		(26,596	)	860,374
Cost of revenues					690,656		1,457		(4,115	)	687,998
Selling, general and administrative	14		928		110,947		12,799		(20,368	)	104,320
	14		928		801,603		14,256		(24,483	)	792,318
Income (loss) from operations	(14	)	(928	)	67,702		3,409		(2,113	)	68,056
Other:
Income from unconsolidated entities					13,371		956				14,327
Other income - net	2,295				7,243		1,008		555		11,101
Intercompany interest income			37,963						(37,963	)	—
Interest expense			(39,325	)			(196	)	39,521		—
Income from subsidiaries	91,203				2,887				(94,090	)	—
Income (loss) before income taxes	93,484		(2,290	)	91,203		5,177		(94,090	)	93,484
Income tax provision (benefit)	28,262		(823	)	33,212		1,883		(34,272	)	28,262
Net income (loss)	65,222		(1,467	)	57,991		3,294		(59,818	)	65,222
Other comprehensive income (loss)	103				(11	)	2				94
Total comprehensive income (loss)	65,325		(1,467	)	57,980		3,296		(59,818	)	65,316

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended April 30, 2013:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues					523,403		20,337		(27,736	)	516,004
Cost of revenues					424,278		5,704		(9,969	)	420,013
Selling, general and administrative	45		715		86,079		10,916		(18,205	)	79,550
	45		715		510,357		16,620		(28,174	)	499,563
Income (loss) from operations	(45	)	(715	)	13,046		3,717		438		16,441
Other:
Income from unconsolidated entities					3,890		1,103				4,993
Other income - net	2,299				18,477		833		(2,075	)	19,534
Intercompany interest income			30,333						(30,333	)	—
Interest expense			(31,908	)			(62	)	31,970		—
Income from subsidiaries	38,714				3,301				(42,015	)	—
Income (loss) before income taxes	40,968		(2,290	)	38,714		5,591		(42,015	)	40,968
Income tax provision (benefit)	16,294		(897	)	15,160		2,189		(16,452	)	16,294
Net income (loss)	24,674		(1,393	)	23,554		3,402		(25,563	)	24,674
Other comprehensive (loss) income	155				(189	)	(24	)			(58	)
Total comprehensive income (loss)	24,829		(1,393	)	23,365		3,378		(25,563	)	24,616

Condensed Consolidating Statement of Cash Flows for the six months ended April 30, 2014:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	44,258		15,152		(87,965	)	(27,401	)	(10,229	)	(66,185	)
Cash flow used in investing activities:
Purchase of property and equipment - net					(5,718	)	(49	)			(5,767	)
Sale and redemption of marketable securities					39,243						39,243
Investments in and advances to unconsolidated entities					(13,602	)	(67,052	)			(80,654	)
Return of investments in unconsolidated entities					35,714		3,300				39,014
Investments in distressed loans and foreclosed real estate							(757	)			(757	)
Return of investments in distressed loans and foreclosed real estate							22,424				22,424
Acquisition of a business					(1,489,116	)					(1,489,116	)
Dividend received - intercompany					15,000				(15,000	)	—
Intercompany advances	(289,604	)	(342,492	)					632,096		—
Net cash used in investing activities	(289,604	)	(342,492	)	(1,418,479	)	(42,134	)	617,096		(1,475,613	)
Cash flow provided by financing activities:
Net proceeds from issuance of senior notes			600,000								600,000
Debt issuance costs for senior notes			(4,700	)							(4,700	)
Proceeds from loans payable					1,141,300		456,262				1,597,562
Debt issuance costs for loans payable					(3,005	)					(3,005	)
Principal payments of loans payable					(572,257	)	(474,420	)			(1,046,677	)
Redemption of senior notes			(267,960	)							(267,960	)
Net proceeds from issuance of common stock	220,357										220,357
Proceeds from stock-based benefit plans	23,333										23,333
Excess tax benefits from stock-based compensation	1,841										1,841
Purchase of treasury stock	(185	)									(185	)
Receipts related to noncontrolling interest							81				81
Dividend paid - intercompany							(15,000	)	15,000		—
Intercompany advances					505,993		115,874		(621,867	)	—
Net cash provided by financing activities	245,346		327,340		1,072,031		82,797		(606,867	)	1,120,647
Net (decrease) increase in cash and cash equivalents	—		—		(434,413	)	13,262		—		(421,151	)
Cash and cash equivalents, beginning of period	—		—		670,102		102,870		—		772,972
Cash and cash equivalents, end of period	—		—		235,689		116,132		—		351,821

Condensed Consolidating Statement of Cash Flows for the six months ended April 30, 2013:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	45,380		2,599		(484,680	)	3,688		(12,395	)	(445,408	)
Cash flow provided by (used in) investing activities:
Purchase of property and equipment — net					(8,588	)	(11,676	)			(20,264	)
Purchase of marketable securities					(25,938	)	(10,224	)			(36,162	)
Sale and redemption of marketable securities					209,484		30,000				239,484
Investments in and advances to unconsolidated entities					(21,637	)	(10,357	)			(31,994	)
Return of investments in unconsolidated entities					23,437		11,249				34,686
Investments in distressed loans and foreclosed real estate							(26,155	)			(26,155	)
Return of investments in distressed loans and foreclosed real estate							6,114				6,114
Intercompany advances	(53,632	)	(241,581	)					295,213		—
Net cash (used in) provided by investing activities	(53,632	)	(241,581	)	176,758		(11,049	)	295,213		165,709
Cash flow provided by financing activities:
Proceeds from issuance of senior notes			298,050								298,050
Proceeds from loans payable							501,884				501,884
Principal payments of loans payable					(29,153	)	(516,022	)			(545,175	)
Redemption of senior notes			(59,068	)							(59,068	)
Proceeds from stock-based benefit plans	8,430										8,430
Purchase of treasury stock	(178	)									(178	)
Receipts related to noncontrolling interest							33				33
Intercompany advances					233,990		48,828		(282,818	)	—
Net cash provided by financing activities	8,252		238,982		204,837		34,723		(282,818	)	203,976
Net (decrease) increase in cash and cash equivalents	—		—		(103,085	)	27,362		—		(75,723	)
Cash and cash equivalents, beginning of period	—		—		712,024		66,800		—		778,824
Cash and cash equivalents, end of period	—		—		608,939		94,162		—		703,101