Supplemental Guarantor Information

At April 30, 2017, 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
8.91% Senior Notes due 2017	$	400,000
4.0% Senior Notes due 2018	$	350,000
6.75% Senior Notes due 2019	$	250,000
5.875% Senior Notes due 2022	$	419,876
4.375% Senior Notes due 2023	$	400,000
5.625% Senior Notes due 2024	$	250,000
4.875% Senior Notes due 2025	$	350,000
4.875% Senior Notes due 2027	$	300,000
0.5% Exchangeable Senior Notes due 2032	$	287,500

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 New 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 New Credit Facility. If there are no guarantors under the New Credit Facility, all Guarantor Subsidiaries under the indentures will be released from their guarantees.

During the preparation of the Form 10-Q for the three months ended January 31, 2017, we identified an immaterial revision that was necessary to certain columns in the consolidating statements for the year ended October 31, 2016. The revision impacted the Guarantor and Nonguarantor Subsidiaries columns in the Consolidating Statement of Operations and Comprehensive Income for the year ended October 31, 2016 and the Nonguarantor Subsidiaries and Eliminations columns in the Condensed Consolidating Balance Sheet as of October 31, 2016, by offsetting amounts. Corresponding changes to the Consolidating Statement of Cash Flows for the year ended October 31, 2016 were also made. The revision had no impact on any consolidated totals of such consolidating statements.

Accordingly, the Consolidating Statements of Operations and Comprehensive Income and of Cash Flows for the year ended October 31, 2016 and the Condensed Consolidating Balance Sheet as of October 31, 2016 have been revised to reflect the immaterial adjustment described above and are included hereunder.

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 April 30, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		602,081	89,185	—		691,266
Restricted cash and investments						797			797
Inventory					7,323,997	278,698			7,602,695
Property, construction and office equipment, net					158,001	15,448			173,449
Receivables, prepaid expenses and other assets					362,081	228,506	(54,073	)	536,514
Mortgage loans held for sale						89,485			89,485
Customer deposits held in escrow					72,088	2,405			74,493
Investments in unconsolidated entities					82,450	457,765			540,215
Investments in and advances to consolidated entities	4,379,229		3,045,059		91,740	168,054	(7,684,082	)	—
Deferred tax assets, net of valuation allowances	158,050								158,050
	4,537,279		3,045,059		8,692,438	1,330,343	(7,738,155	)	9,866,964
LIABILITIES AND EQUITY
Liabilities
Loans payable					630,764	7,167			637,931
Senior notes			2,987,990				5,892		2,993,882
Mortgage company loan facility						61,129			61,129
Customer deposits					368,389	19,551			387,940
Accounts payable					303,078	2,422			305,500
Accrued expenses			35,231		592,050	375,644	(65,529	)	937,396
Advances from consolidated entities					2,276,748	693,772	(2,970,520	)	—
Income taxes payable	89,191								89,191
Total liabilities	89,191		3,023,221		4,171,029	1,159,685	(3,030,157	)	5,412,969
Equity
Stockholders’ equity
Common stock	1,779				48	3,006	(3,054	)	1,779
Additional paid-in capital	716,124		49,400			93,734	(143,134	)	716,124
Retained earnings (deficit)	4,159,300		(27,562	)	4,521,361	68,011	(4,561,810	)	4,159,300
Treasury stock, at cost	(426,116	)							(426,116	)
Accumulated other comprehensive loss	(2,999	)							(2,999	)
Total stockholders’ equity	4,448,088		21,838		4,521,409	164,751	(4,707,998	)	4,448,088
Noncontrolling interest						5,907			5,907
Total equity	4,448,088		21,838		4,521,409	170,658	(4,707,998	)	4,453,995
	4,537,279		3,045,059		8,692,438	1,330,343	(7,738,155	)	9,866,964

Condensed Consolidating Balance Sheet at October 31, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		583,440	50,275	—		633,715
Restricted cash and investments	11,708					19,583			31,291
Inventory					6,896,205	457,806	(44	)	7,353,967
Property, construction and office equipment, net					153,663	15,913			169,576
Receivables, prepaid expenses and other assets	77				319,319	299,978	(36,616	)	582,758
Mortgage loans held for sale						248,601			248,601
Customer deposits held in escrow					50,079	2,978			53,057
Investments in unconsolidated entities					101,999	394,412			496,411
Investments in and advances to consolidated entities	4,112,876		2,741,160		20,519	90,671	(6,965,226	)	—
Deferred tax assets, net of valuation allowances	167,413								167,413
	4,292,074		2,741,160		8,125,224	1,580,217	(7,001,886	)	9,736,789
LIABILITIES AND EQUITY
Liabilities
Loans payable					871,079				871,079
Senior notes			2,683,823				10,549		2,694,372
Mortgage company loan facility						210,000			210,000
Customer deposits					292,794	16,305			309,099
Accounts payable					280,107	1,848			281,955
Accrued expenses			32,559		610,958	469,527	(40,744	)	1,072,300
Advances from consolidated entities					1,737,682	799,082	(2,536,764	)	—
Income taxes payable	62,782								62,782
Total liabilities	62,782		2,716,382		3,792,620	1,496,762	(2,566,959	)	5,501,587
Equity
Stockholders’ equity
Common stock	1,779				48	3,006	(3,054	)	1,779
Additional paid-in capital	728,464		49,400			6,734	(56,134	)	728,464
Retained earnings (deficit)	3,977,297		(24,622	)	4,332,556	67,805	(4,375,739	)	3,977,297
Treasury stock, at cost	(474,912	)							(474,912	)
Accumulated other comprehensive loss	(3,336	)							(3,336	)
Total stockholders’ equity	4,229,292		24,778		4,332,604	77,545	(4,434,927	)	4,229,292
Noncontrolling interest						5,910			5,910
Total equity	4,229,292		24,778		4,332,604	83,455	(4,434,927	)	4,235,202
	4,292,074		2,741,160		8,125,224	1,580,217	(7,001,886	)	9,736,789

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the six months ended April 30, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					2,239,917	129,698		(85,373	)	2,284,242
Cost of revenues					1,767,348	79,634		(36,539	)	1,810,443
Selling, general and administrative	24		1,965		298,648	34,872		(50,538	)	284,971
	24		1,965		2,065,996	114,506		(87,077	)	2,095,414
Income (loss) from operations	(24	)	(1,965	)	173,921	15,192		1,704		188,828
Other:
Income from unconsolidated entities					8,478	83,871				92,349
Other income – net	4,682				12,266	8,809		2,056		27,813
Intercompany interest income			75,053			2,146		(77,199	)	—
Interest expense			(77,745	)		(954	)	78,699		—
Income from subsidiaries	304,332				104,408			(408,740	)	—
Income (loss) before income taxes	308,990		(4,657	)	299,073	109,064		(403,480	)	308,990
Income tax provision (benefit)	113,936		(1,717	)	110,268	40,211		(148,762	)	113,936
Net income (loss)	195,054		(2,940	)	188,805	68,853		(254,718	)	195,054
Other comprehensive income	337									337
Total comprehensive income (loss)	195,391		(2,940	)	188,805	68,853		(254,718	)	195,391

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the six months ended April 30, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,874,962	225,750		(56,589	)	2,044,123
Cost of revenues					1,478,061	110,867		(6,046	)	1,582,882
Selling, general and administrative	22		1,920		260,530	35,201		(47,537	)	250,136
	22		1,920		1,738,591	146,068		(53,583	)	1,833,018
Income (loss) from operations	(22	)	(1,920	)	136,371	79,682		(3,006	)	211,105
Other:
Income from unconsolidated entities					10,333	7,423				17,756
Other income – net	4,711				13,395	10,539		(292	)	28,353
Intercompany interest income			72,977					(72,977	)	—
Interest expense			(75,714	)		(563	)	76,277		—
Income from subsidiaries	252,525				92,425			(344,950	)	—
Income (loss) before income taxes	257,214		(4,657	)	252,524	97,081		(344,948	)	257,214
Income tax provision (benefit)	94,980		(1,794	)	97,272	37,396		(132,874	)	94,980
Net income (loss)	162,234		(2,863	)	155,252	59,685		(212,074	)	162,234
Other comprehensive (loss) income	(132	)			31					(101	)
Total comprehensive income (loss)	162,102		(2,863	)	155,283	59,685		(212,074	)	162,133

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended April 30, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,324,094	84,002		(44,584	)	1,363,512
Cost of revenues					1,043,091	50,163		(15,813	)	1,077,441
Selling, general and administrative	24		997		154,767	17,924		(25,836	)	147,876
	24		997		1,197,858	68,087		(41,649	)	1,225,317
Income (loss) from operations	(24	)	(997	)	126,236	15,915		(2,935	)	138,195
Other:
Income from unconsolidated entities					3,334	42,570				45,904
Other income – net	2,289				5,015	4,309		3,497		15,110
Intercompany interest income			38,557			2,146		(40,703	)	—
Interest expense			(39,850	)		(291	)	40,141		—
Income from subsidiaries	196,944				62,360			(259,304	)	—
Income (loss) before income taxes	199,209		(2,290	)	196,945	64,649		(259,304	)	199,209
Income tax provision (benefit)	74,571		(868	)	73,647	24,285		(97,064	)	74,571
Net income (loss)	124,638		(1,422	)	123,298	40,364		(162,240	)	124,638
Other comprehensive income	168									168
Total comprehensive income (loss)	124,806		(1,422	)	123,298	40,364		(162,240	)	124,806

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss) for the three months ended April 30, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					1,090,366	55,527		(30,336	)	1,115,557
Cost of revenues					853,260	20,780		(3,469	)	870,571
Selling, general and administrative	10		951		134,625	17,228		(24,474	)	128,340
	10		951		987,885	38,008		(27,943	)	998,911
Income (loss) from operations	(10	)	(951	)	102,481	17,519		(2,393	)	116,646
Other:
Income from unconsolidated entities					7,336	1,782				9,118
Other income – net	2,320				5,226	6,346		741		14,633
Intercompany interest income			36,480					(36,480	)	—
Interest expense			(37,819	)		(315	)	38,134		—
Income from subsidiaries	138,087				23,043			(161,130	)	—
Income (loss) before income taxes	140,397		(2,290	)	138,086	25,332		(161,128	)	140,397
Income tax provision (benefit)	51,343		(882	)	53,168	9,744		(62,030	)	51,343
Net income (loss)	89,054		(1,408	)	84,918	15,588		(99,098	)	89,054
Other comprehensive income	155				4					159
Total comprehensive income (loss)	89,209		(1,408	)	84,922	15,588		(99,098	)	89,213

Consolidating Statement of Operations and Comprehensive Income (Loss) for the fiscal year ended October 31, 2016



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					4,984,356	361,685		(176,533	)	5,169,508
Cost of revenues					3,919,729	288,044		(63,708	)	4,144,065
Selling, general and administrative	75		3,809		558,822	74,328		(101,652	)	535,382
	75		3,809		4,478,551	362,372		(165,360	)	4,679,447
Income (loss) from operations	(75	)	(3,809	)	505,805	(687	)	(11,173	)	490,061
Other:
Income from unconsolidated entities					16,913	23,835				40,748
Other income - net	9,501				27,873	17,456		3,388		58,218
Intercompany interest income			145,828					(145,828	)	—
Interest expense			(151,410	)		(2,203	)	153,613		—
Income from consolidated subsidiaries	579,601				29,010			(608,611	)	—
Income (loss) before income taxes	589,027		(9,391	)	579,601	38,401		(608,611	)	589,027
Income tax provision (benefit)	206,932		(3,299	)	203,614	13,490		(213,805	)	206,932
Net income (loss)	382,095		(6,092	)	375,987	24,911		(394,806	)	382,095
Other comprehensive (loss) income	(858	)			31					(827	)
Total comprehensive income (loss)	381,237		(6,092	)	376,018	24,911		(394,806	)	381,268

Condensed Consolidating Statement of Cash Flows for the six months ended April 30, 2017:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by (used in) operating activities	64,132		6,729		(189,934	)	390,949		(11,475	)	260,401
Cash flow (used in) provided by investing activities:
Purchase of property and equipment - net					(12,043	)	334				(11,709	)
Investment in unconsolidated entities					(1,969	)	(111,546	)			(113,515	)
Return of investments in unconsolidated entities					29,566		68,521				98,087
Investment in foreclosed real estate and distressed loans							(513	)			(513	)
Return of investments in foreclosed real estate and distressed loans							4,376				4,376
Acquisition of a business					(85,183	)					(85,183	)
Investment paid - intercompany					(45,000	)			45,000		—
Intercompany advances	(76,995	)	(303,899	)					380,894		—
Net cash (used in) provided by investing activities	(76,995	)	(303,899	)	(114,629	)	(38,828	)	425,894		(108,457	)
Cash flow (used in) provided by financing activities:
Net proceeds from issuance of senior notes			300,000								300,000
Debt issuance costs for senior notes			(2,830	)							(2,830	)
Proceeds from loans payable					125,000		644,454				769,454
Principal payments of loans payable					(380,555	)	(793,325	)			(1,173,880	)
Proceeds from stock-based benefit plans	40,628										40,628
Excess tax benefits from stock-based compensation	708										708
Purchase of treasury stock	(15,422	)									(15,422	)
Dividends paid	(13,051	)									(13,051	)
Investment received intercompany							45,000		(45,000	)	—
Intercompany advances					578,759		(209,340	)	(369,419	)	—
Net cash (used in) provided by financing activities	12,863		297,170		323,204		(313,211	)	(414,419	)	(94,393	)
Net increase in cash and cash equivalents	—		—		18,641		38,910		—		57,551
Cash and cash equivalents, beginning of period	—		—		583,440		50,275		—		633,715
Cash and cash equivalents, end of period	—		—		602,081		89,185		—		691,266

Condensed Consolidating Statement of Cash Flows for the six months ended April 30, 2016:



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash (used in) provided by operating activities	45,565		11,996		(166,251	)	104,238		(11,428	)	(15,880	)
Cash flow provided by (used in) investing activities:
Purchase of property and equipment — net					(6,626	)	(698	)			(7,324	)
Sale and redemption of marketable securities							10,000				10,000
Investments in unconsolidated entities					(1,763	)	(19,620	)			(21,383	)
Return of investments in unconsolidated entities					22,236		6,242				28,478
Investment in foreclosed real estate and distressed loans							(866	)			(866	)
Return of investments in foreclosed real estate and distressed loans							33,435				33,435
Dividend received – intercompany					5,000				(5,000	)	—
Intercompany advances	179,030		(11,953	)					(167,077	)	—
Net cash provided by (used in) investing activities	179,030		(11,953	)	18,847		28,493		(172,077	)	42,340
Cash flow (used in) provided by financing activities:
Debt issuance costs for senior notes			(43	)							(43	)
Proceeds from loans payable					100,000		721,984				821,984
Principal payments of loans payable					(397,927	)	(721,984	)			(1,119,911	)
Proceeds from stock-based benefit plans	5,003										5,003
Excess tax benefits from stock-based compensation	665										665
Purchase of treasury stock	(230,263	)									(230,263	)
Receipts related to noncontrolling interest							290				290
Dividend paid – intercompany							(5,000	)	5,000		—
Intercompany advances					(46,447	)	(132,058	)	178,505		—
Net cash (used in) provided by financing activities	(224,595	)	(43	)	(344,374	)	(136,768	)	183,505		(522,275	)
Net decrease in cash and cash equivalents	—		—		(491,778	)	(4,037	)	—		(495,815	)
Cash and cash equivalents, beginning of period	—		—		783,599		135,394		—		918,993
Cash and cash equivalents, end of period	—		—		291,821		131,357		—		423,178

Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2016



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by (used in) operating activities	60,465		14,768		105,709		(64,386	)	32,215		148,771
Cash flow provided by (used in) investing activities:
Purchase of property and equipment — net					(27,835	)	(591	)			(28,426	)
Sale and redemption of marketable securities							10,000				10,000
Investment in unconsolidated entities					(2,637	)	(67,018	)			(69,655	)
Return of investments in unconsolidated entities					32,857		14,949				47,806
Investment in distressed loans and foreclosed real estate							(1,133	)			(1,133	)
Return of investments in distressed loans and foreclosed real estate							49,619				49,619
Dividends received intercompany					5,000				(5,000	)	—
Investment paid intercompany					(5,000	)			5,000		—
Intercompany advances	323,207		(14,733	)					(308,474	)	—
Net cash provided by (used in) investing activities	323,207		(14,733	)	2,385		5,826		(308,474	)	8,211
Cash flow (used in) provided by financing activities:
Debt issuance costs for senior notes			(35	)							(35	)
Proceeds from loans payable					550,000		1,893,496				2,443,496
Debt issuance costs for loans payable					(4,868	)					(4,868	)
Principal payments of loans payable					(714,089	)	(1,783,496	)			(2,497,585	)
Proceeds from stock-based benefit plans	6,986										6,986
Excess tax benefits from stock-based compensation	2,114										2,114
Purchase of treasury stock	(392,772	)									(392,772	)
Receipts related to noncontrolling interest							404				404
Dividends paid intercompany							(5,000	)	5,000		—
Investment received intercompany							5,000		(5,000	)	—
Intercompany advances					(139,296	)	(136,963	)	276,259		—
Net cash (used in) provided by financing activities	(383,672	)	(35	)	(308,253	)	(26,559	)	276,259		(442,260	)
Net decrease in cash and cash equivalents	—		—		(200,159	)	(85,119	)	—		(285,278	)
Cash and cash equivalents, beginning of period	—		—		783,599		135,394		—		918,993
Cash and cash equivalents, end of period	—		—		583,440		50,275		—		633,715