. Supplemental Guarantor Information

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



	Original amount issued and amount outstanding at October 31, 2017
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	$	450,000

The obligations of the Subsidiary Issuer to pay principal, premiums, if any, and interest are guaranteed jointly and severally on a senior basis by 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 the debt. 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 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 (1) no default or event of default exists or would result from release of such guarantee, (2) the Guarantor Subsidiary being released has consolidated net worth of less than 5% of our consolidated net worth as of the end of our most recent fiscal quarter, (3) 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, (4) such release would not have a material adverse effect on our and our subsidiaries home building business, and (5) the Guarantor Subsidiary is released from its guarantee 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.

As of October 31, 2017, one of our 100%-owned subsidiaries was released from its guarantee obligation on these Senior Notes. As of October 31, 2016, this subsidiary had inventory of $108.7 million which represented substantially all of its assets. The consolidating financial statements shown below have been retroactively restated to reflect this subsidiary as a nonguarantor.

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).

Consolidating Balance Sheet at October 31, 2017



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
ASSETS
Cash and cash equivalents	—		—		533,204	179,625		—		712,829
Restricted cash and investments					1,500	982				2,482
Inventory					7,017,331	264,122				7,281,453
Property, construction, and office equipment, net					165,464	24,083				189,547
Receivables, prepaid expenses, and other assets					319,592	296,699		(74,074	)	542,217
Mortgage loans held for sale						132,922				132,922
Customer deposits held in escrow					96,956	5,061				102,017
Investments in unconsolidated entities					66,897	414,861				481,758
Investments in and advances to consolidated entities	4,589,228		2,514,649		91,740	126,799		(7,322,416	)	—
	4,589,228		2,514,649		8,292,684	1,445,154		(7,396,490	)	9,445,225
LIABILITIES AND EQUITY
Liabilities
Loans payable					637,416					637,416
Senior notes			2,462,463							2,462,463
Mortgage company loan facility						120,145				120,145
Customer deposits					377,083	18,943				396,026
Accounts payable					271,617	3,606				275,223
Accrued expenses	141		34,345		563,577	440,631		(79,341	)	959,353
Advances from consolidated entities					1,584,957	659,904		(2,244,861	)	—
Income taxes payable	57,893					(384	)			57,509
Total liabilities	58,034		2,496,808		3,434,650	1,242,845		(2,324,202	)	4,908,135
Equity
Stockholders’ equity
Common stock	1,779				48	3,006		(3,054	)	1,779
Additional paid-in capital	720,115		49,400			93,734		(143,134	)	720,115
Retained earnings (deficit)	4,474,064		(31,559	)	4,857,986	99,673		(4,926,100	)	4,474,064
Treasury stock, at cost	(662,854	)								(662,854	)
Accumulated other comprehensive loss	(1,910	)								(1,910	)
Total stockholders’ equity	4,531,194		17,841		4,858,034	196,413		(5,072,288	)	4,531,194
Noncontrolling interest						5,896				5,896
Total equity	4,531,194		17,841		4,858,034	202,309		(5,072,288	)	4,537,090
	4,589,228		2,514,649		8,292,684	1,445,154		(7,396,490	)	9,445,225

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					6,787,498	566,513	(44	)	7,353,967
Property, construction, and office equipment, net					153,663	15,913			169,576
Receivables, prepaid expenses, and other assets	77				319,180	300,117	(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		8,016,378	1,689,063	(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		610,932	469,553	(40,744	)	1,072,300
Advances from consolidated entities					1,628,549	908,215	(2,536,764	)	—
Income taxes payable	62,782								62,782
Total liabilities	62,782		2,716,382		3,683,461	1,605,921	(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	)	4,332,869	67,492	(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		4,332,917	77,232	(4,434,927	)	4,229,292
Noncontrolling interest						5,910			5,910
Total equity	4,229,292		24,778		4,332,917	83,142	(4,434,927	)	4,235,202
	4,292,074		2,741,160		8,016,378	1,689,063	(7,001,886	)	9,736,789

Consolidating Statement of Operations and Comprehensive Income (Loss) for the fiscal year ended October 31, 2017



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					5,668,610		336,671		(190,223	)	5,815,058
Cost of revenues					4,414,461		223,243		(75,401	)	4,562,303
Selling, general and administrative	58		4,033		635,247		77,115		(108,634	)	607,819
	58		4,033		5,049,708		300,358		(184,035	)	5,170,122
Income (loss) from operations	(58	)	(4,033	)	618,902		36,313		(6,188	)	644,936
Other:
Income from unconsolidated entities					12,271		103,795				116,066
Other income - net	10,574				28,900		10,674		3,161		53,309
Intercompany interest income			156,366		48		4,365		(160,779	)	—
Interest expense			(162,882	)	(4,365	)	(1,819	)	169,066		—
Income from consolidated subsidiaries	803,795				142,779				(946,574	)	—
Income (loss) before income taxes	814,311		(10,549	)	798,535		153,328		(941,314	)	814,311
Income tax provision (benefit)	278,816		(3,612	)	273,418		52,500		(322,306	)	278,816
Net income (loss)	535,495		(6,937	)	525,117		100,828		(619,008	)	535,495
Other comprehensive income	1,426										1,426
Total comprehensive income (loss)	536,921		(6,937	)	525,117		100,828		(619,008	)	536,921

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

Consolidating Statement of Operations and Comprehensive Income (Loss) for the fiscal year ended October 31, 2015



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries	Nonguarantor Subsidiaries		Eliminations		Consolidated
Revenues					4,213,776	77,226		(119,754	)	4,171,248
Cost of revenues					3,276,078	12,909		(19,717	)	3,269,270
Selling, general and administrative	113		3,560		481,943	60,377		(90,885	)	455,108
	113		3,560		3,758,021	73,286		(110,602	)	3,724,378
Income (loss) from operations	(113	)	(3,560	)	455,755	3,940		(9,152	)	446,870
Other:
Income from unconsolidated entities					14,034	7,085				21,119
Other income - net	9,429				34,098	21,724		2,322		67,573
Intercompany interest income			137,362					(137,362	)	—
Interest expense			(143,193	)		(999	)	144,192		—
Income from consolidated subsidiaries	526,246				22,359			(548,605	)	—
Income (loss) before income taxes	535,562		(9,391	)	526,246	31,750		(548,605	)	535,562
Income tax provision (benefit)	172,395		(3,628	)	203,296	12,265		(211,933	)	172,395
Net income (loss)	363,167		(5,763	)	322,950	19,485		(336,672	)	363,167
Other comprehensive income	311				18					329
Total comprehensive income (loss)	363,478		(5,763	)	322,968	19,485		(336,672	)	363,496

Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2017



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by operating activities	196,438		9,955		292,802		469,948		(9,424	)	959,719
Cash flow (used in) provided by investing activities:
Purchase of property and equipment — net					(20,439	)	(8,433	)			(28,872	)
Sale and redemption of marketable securities and restricted investments — net	10,631						7,418				18,049
Investment in unconsolidated entities					(3,744	)	(118,590	)			(122,334	)
Return of investments in unconsolidated entities					58,610		136,895				195,505
Investment in distressed loans and foreclosed real estate							(710	)			(710	)
Return of investments in distressed loans and foreclosed real estate							13,765				13,765
Acquisition of a business					(83,088	)					(83,088	)
Investment paid intercompany					(45,000	)			45,000		—
Intercompany advances	51,071		226,511						(277,582	)	—
Net cash (used in) provided by investing activities	61,702		226,511		(93,661	)	30,345		(232,582	)	(7,685	)
Cash flow (used in) provided by financing activities:
Proceeds from issuance of senior notes			455,483								455,483
Proceeds from loans payable					250,068		1,370,975				1,621,043
Debt issuance costs			(4,449	)							(4,449	)
Principal payments of loans payable					(538,527	)	(1,460,830	)			(1,999,357	)
Redemption of senior notes			(687,500	)							(687,500	)
Proceeds from stock-based benefit plans	66,000										66,000
Excess tax benefits from stock-based compensation	5,328										5,328
Purchase of treasury stock	(290,881	)									(290,881	)
Dividends paid	(38,587	)									(38,587	)
Investment received intercompany							45,000		(45,000	)	—
Intercompany advances					39,082		(326,088	)	287,006		—
Net cash used in financing activities	(258,140	)	(236,466	)	(249,377	)	(370,943	)	242,006		(872,920	)
Net increase (decrease) in cash and cash equivalents	—		—		(50,236	)	129,350		—		79,114
Cash and cash equivalents, beginning of period	—		—		583,440		50,275		—		633,715
Cash and cash equivalents, end of period	—		—		533,204		179,625		—		712,829

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		116,116		(22,737	)	(19,841	)	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 and restricted investments — net							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:
Proceeds from loans payable					550,000		1,893,496				2,443,496
Debt issuance costs			(35	)	(4,868	)					(4,903	)
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	)
Payments related to noncontrolling interest							404				404
Dividends paid intercompany							(5,000	)	5,000		—
Investment received intercompany							5,000		(5,000	)	—
Intercompany advances					(149,703	)	(178,612	)	328,315		—
Net cash used in financing activities	(383,672	)	(35	)	(318,660	)	(68,208	)	328,315		(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

Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2015



	Toll Brothers, Inc.		Subsidiary Issuer		Guarantor Subsidiaries		Nonguarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by (used in) operating activities	45,366		2,156		100,487		(78,246	)	(9,581	)	60,182
Cash flow (used in) provided by investing activities:
Purchase of property and equipment — net					(10,181	)	734				(9,447	)
Sale and redemption of marketable securities and restricted investments — net					2,000						2,000
Investment in unconsolidated entities					(4,552	)	(119,388	)			(123,940	)
Return of investments in unconsolidated entities					23,213		16,553				39,766
Investment in distressed loans and foreclosed real estate							(2,624	)			(2,624	)
Return of investments in distressed loans and foreclosed real estate							37,625				37,625
Net increase in cash from purchase of joint venture interest					3,848						3,848
Intercompany advances	(29,620	)	(48,981	)					78,601		—
Net cash (used in) provided by investing activities	(29,620	)	(48,981	)	14,328		(67,100	)	78,601		(52,772	)
Cash flow provided by (used in) financing activities:
Proceeds from issuance of senior notes			350,000								350,000
Proceeds from loans payable					400,000		1,554,432				1,954,432
Debt issuance costs			(3,175	)							(3,175	)
Principal payments of loans payable					(113,745	)	(1,545,713	)			(1,659,458	)
Redemption of senior notes			(300,000	)							(300,000	)
Proceeds from stock-based benefit plans	39,514										39,514
Excess tax benefits from stock-based compensation	1,628										1,628
Purchase of treasury stock	(56,888	)									(56,888	)
Receipts related to noncontrolling interest							(785	)			(785	)
Intercompany advances					(73,185	)	142,205		(69,020	)	—
Net cash provided by (used in) financing activities	(15,746	)	46,825		213,070		150,139		(69,020	)	325,268
Net increase in cash and cash equivalents	—		—		327,885		4,793		—		332,678
Cash and cash equivalents, beginning of period	—		—		455,714		130,601		—		586,315
Cash and cash equivalents, end of period	—		—		783,599		135,394		—		918,993