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Supplemental Guarantor Information
 9 Months Ended
Jul. 31, 2019
Supplemental Guarantor Information [Abstract]  
Supplemental Guarantor Information [Text Block] Supplemental Guarantor Information
At July 31, 2019, 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
6.75% Senior Notes due November 1, 2019
 
$
250,000

5.875% Senior Notes due February 15, 2022
 
$
419,876

4.375% Senior Notes due April 15, 2023
 
$
400,000

5.625% Senior Notes due January 15, 2024
 
$
250,000

4.875% Senior Notes due November 15, 2025
 
$
350,000

4.875% Senior Notes due March 15, 2027
 
$
450,000

4.350% Senior Notes due February 15, 2028
 
$
400,000


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 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 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 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 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 July 31, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
—

 
—

 
639,787

 
196,471

 
—

 
836,258

Inventory

 

 
7,919,772

 
75,304

 

 
7,995,076

Property, construction and office equipment, net

 

 
273,211

 
15,531

 

 
288,742

Receivables, prepaid expenses and other assets

 


 
156,167

 
634,276

 
(70,265
)
 
720,178

Mortgage loans held for sale

 

 

 
169,251

 

 
169,251

Customer deposits held in escrow

 

 
87,868

 
175

 

 
88,043

Investments in unconsolidated entities

 

 
43,488

 
311,081

 

 
354,569

Investments in and advances to consolidated entities
5,003,121

 
2,571,770

 
163,368

 
149,108

 
(7,887,367
)
 
—

 
5,003,121

 
2,571,770

 
9,283,661

 
1,551,197

 
(7,957,632
)
 
10,452,117

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Loans payable

 

 
1,087,303

 
1,834

 

 
1,089,137

Senior notes

 
2,512,877

 

 

 

 
2,512,877

Mortgage company loan facility

 

 

 
150,000

 

 
150,000

Customer deposits

 

 
426,793

 
2,872

 

 
429,665

Accounts payable

 

 
344,278

 
387

 

 
344,665

Accrued expenses
674

 
41,052

 
533,912

 
390,593

 
(70,291
)
 
895,940

Advances from consolidated entities

 


 
906,570

 
563,336

 
(1,469,906
)
 
—

Income taxes payable
45,376

 

 

 


 

 
45,376

Total liabilities
46,050

 
2,553,929

 
3,298,856

 
1,109,022

 
(1,540,197
)
 
5,467,660

Equity
 
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Common stock
1,779

 

 
48

 
3,006

 
(3,054
)
 
1,779

Additional paid-in capital
724,411

 
49,400

 


 
177,034

 
(226,434
)
 
724,411

Retained earnings (deficit)
5,500,941

 
(31,559
)
 
5,984,757

 
216,763

 
(6,187,947
)
 
5,482,955

Treasury stock, at cost
(1,270,922
)
 

 

 

 

 
(1,270,922
)
Accumulated other comprehensive income
862

 

 


 

 


 
862

Total stockholders’ equity
4,957,071

 
17,841

 
5,984,805

 
396,803

 
(6,417,435
)
 
4,939,085

Noncontrolling interest

 

 

 
45,372

 

 
45,372

Total equity
4,957,071

 
17,841

 
5,984,805

 
442,175

 
(6,417,435
)
 
4,984,457

 
5,003,121

 
2,571,770

 
9,283,661

 
1,551,197

 
(7,957,632
)
 
10,452,117

Condensed Consolidating Balance Sheet at October 31, 2018:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
—

 
—

 
1,011,863

 
170,332

 
—

 
1,182,195

Inventory

 

 
7,493,205

 
105,014

 

 
7,598,219

Property, construction and office equipment, net

 

 
169,265

 
24,016

 

 
193,281

Receivables, prepaid expenses and other assets


 


 
291,299

 
392,559

 
(133,080
)
 
550,778

Mortgage loans held for sale

 

 

 
170,731

 

 
170,731

Customer deposits held in escrow

 

 
116,332

 
1,241

 

 
117,573

Investments in unconsolidated entities

 

 
44,329

 
387,484

 

 
431,813

Investments in and advances to consolidated entities
4,791,629

 
2,916,557

 
91,740

 
126,872

 
(7,926,798
)
 
—

 
4,791,629

 
2,916,557

 
9,218,033

 
1,378,249

 
(8,059,878
)
 
10,244,590

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Loans payable

 

 
686,801

 


 

 
686,801

Senior notes

 
2,861,375

 

 

 

 
2,861,375

Mortgage company loan facility

 

 

 
150,000

 

 
150,000

Customer deposits

 

 
405,318

 
5,546

 

 
410,864

Accounts payable

 

 
361,655

 
443

 

 
362,098

Accrued expenses
471

 
37,341

 
600,907

 
462,128

 
(127,266
)
 
973,581

Advances from consolidated entities

 


 
1,551,196

 
476,040

 
(2,027,236
)
 
—

Income taxes payable
30,959

 

 

 


 

 
30,959

Total liabilities
31,430

 
2,898,716

 
3,605,877

 
1,094,157

 
(2,154,502
)
 
5,475,678

Equity
 
 
 
 
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Common stock
1,779

 

 
48

 
3,006

 
(3,054
)
 
1,779

Additional paid-in capital
727,053

 
49,400

 


 
93,734

 
(143,134
)
 
727,053

Retained earnings (deficit)
5,161,551

 
(31,559
)
 
5,612,108

 
178,639

 
(5,759,188
)
 
5,161,551

Treasury stock, at cost
(1,130,878
)
 

 

 

 

 
(1,130,878
)
Accumulated other comprehensive income
694

 

 


 

 


 
694

Total stockholders’ equity
4,760,199

 
17,841

 
5,612,156

 
275,379

 
(5,905,376
)
 
4,760,199

Noncontrolling interest

 

 

 
8,713

 

 
8,713

Total equity
4,760,199

 
17,841

 
5,612,156

 
284,092

 
(5,905,376
)
 
4,768,912

 
4,791,629

 
2,916,557

 
9,218,033

 
1,378,249

 
(8,059,878
)
 
10,244,590





Condensed Consolidating Statement of Operations and Comprehensive Income for the nine months ended July 31, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
4,707,462

 
80,873

 

 
4,788,335

Land sales and other

 

 
52,712

 
144,913

 
(140,994
)
 
56,631

 
—

 
—

 
4,760,174

 
225,786

 
(140,994
)
 
4,844,966

 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
3,753,209

 
64,397

 
741

 
3,818,347

Land sales and other


 


 
14,935

 
79,406

 
(50,935
)
 
43,406

 
—

 
—

 
3,768,144

 
143,803

 
(50,194
)
 
3,861,753

Selling, general and administrative
491

 
2,022

 
552,772

 
55,346

 
(83,313
)
 
527,318

Income (loss) from operations
(491
)
 
(2,022
)
 
439,258

 
26,637

 
(7,487
)
 
455,895

Other:
 
 
 
 
 
 
 
 
 
 
 
Income from unconsolidated entities

 

 
8,786

 
8,973

 

 
17,759

Other income – net

 


 
15,986

 
15,521

 
9,360

 
40,867

Intercompany interest income

 
99,853

 
1,752

 
4,782

 
(106,387
)
 
—

Interest expense

 
(97,831
)
 
(4,782
)
 
(1,901
)
 
104,514

 
—

Income from subsidiaries
515,012

 

 
54,012

 

 
(569,024
)
 
—

Income before income taxes
514,521

 
—

 
515,012

 
54,012

 
(569,024
)
 
514,521

Income tax provision
126,829

 

 
126,951

 
13,313

 
(140,264
)
 
126,829

Net income
387,692

 
—

 
388,061

 
40,699

 
(428,760
)
 
387,692

Other comprehensive income
168

 


 


 


 


 
168

Total comprehensive income
387,860

 
—

 
388,061

 
40,699

 
(428,760
)
 
387,860


Condensed Consolidating Statement of Operations and Comprehensive Income for the nine months ended July 31, 2018:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues

 

 
4,492,956

 
329,633

 
(134,569
)
 
4,688,020

Cost of revenues

 

 
3,561,287

 
223,990

 
(43,021
)
 
3,742,256

Selling, general and administrative
57

 
2,397

 
514,921

 
61,543

 
(80,928
)
 
497,990

 
57

 
2,397

 
4,076,208

 
285,533

 
(123,949
)
 
4,240,246

Income (loss) from operations
(57
)
 
(2,397
)
 
416,748

 
44,100

 
(10,620
)
 
447,774

Other:
 
 
 
 
 
 
 
 
 
 
 
Income from unconsolidated entities

 

 
16,743

 
37,170

 

 
53,913

Other income – net

 


 
19,288

 
5,252

 
11,216

 
35,756

Intercompany interest income

 
105,598

 
1,052

 
3,235

 
(109,885
)
 
—

Interest expense

 
(103,201
)
 
(3,235
)
 
(1,477
)
 
107,913

 
—

Income from subsidiaries
537,500

 

 
88,280

 

 
(625,780
)
 
—

Income before income taxes
537,443

 
—

 
538,876

 
88,280

 
(627,156
)
 
537,443

Income tax provision
100,268

 

 
100,538

 
16,470

 
(117,008
)
 
100,268

Net income
437,175

 
—

 
438,338

 
71,810

 
(510,148
)
 
437,175

Other comprehensive income
512

 


 


 


 


 
512

Total comprehensive income
437,687

 
—

 
438,338

 
71,810

 
(510,148
)
 
437,687



Condensed Consolidating Statement of Operations and Comprehensive Income for the three months ended July 31, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Home sales

 

 
1,740,111

 
16,859

 

 
1,756,970

Land sales and other

 

 
21,919

 
37,269

 
(50,467
)
 
8,721

 
—

 
—

 
1,762,030

 
54,128

 
(50,467
)
 
1,765,691

 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues:
 
 
 
 
 
 
 
 
 
 


Home sales

 

 
1,387,423

 
13,432

 
900

 
1,401,755

Land sales and other


 


 
6,956

 
16,605

 
(17,329
)
 
6,232

 
—

 
—

 
1,394,379

 
30,037

 
(16,429
)
 
1,407,987

Selling, general and administrative


 
627

 
197,722

 
19,251

 
(30,891
)
 
186,709

Income (loss) from operations
—

 
(627
)

169,929


4,840


(3,147
)

170,995

Other:
 
 
 
 
 
 
 
 
 
 
 
Income from unconsolidated entities

 

 
245

 
6,955

 

 
7,200

Other income – net

 


 
3,731

 
1,271

 
3,719

 
8,721

Intercompany interest income

 
32,849

 
882

 
1,802

 
(35,533
)
 
—

Interest expense

 
(32,222
)
 
(1,802
)
 
(937
)
 
34,961

 
—

Income from subsidiaries
186,916

 

 
13,931

 

 
(200,847
)
 
—

Income before income taxes
186,916

 
—


186,916

 
13,931

 
(200,847
)
 
186,916

Income tax provision
40,598

 

 
40,596

 
2,764

 
(43,360
)
 
40,598

Net income
146,318

 
—


146,320


11,167


(157,487
)

146,318

Other comprehensive income
56

 


 


 


 


 
56

Total comprehensive income
146,374

 
—


146,320


11,167


(157,487
)

146,374



Condensed Consolidating Statement of Operations and Comprehensive Income for the three months ended July 31, 2018:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Revenues

 

 
1,865,613

 
91,975

 
(44,235
)
 
1,913,353

Cost of revenues

 

 
1,468,135

 
52,247

 
(10,763
)
 
1,509,619

Selling, general and administrative
25

 
770

 
181,793

 
21,209

 
(29,726
)
 
174,071

 
25

 
770


1,649,928


73,456


(40,489
)
 
1,683,690

Income (loss) from operations
(25
)
 
(770
)

215,685


18,519


(3,746
)
 
229,663

Other:
 
 
 
 
 
 
 
 
 
 
 
Income from unconsolidated entities

 

 
10,010

 
2,459

 

 
12,469

Other income – net

 


 
6,605

 
1,186

 
3,174

 
10,965

Intercompany interest income

 
36,395

 
663

 
1,154

 
(38,212
)
 
—

Interest expense

 
(35,625
)
 
(1,154
)
 
(691
)
 
37,470

 
—

Income from subsidiaries
253,122

 

 
22,627

 

 
(275,749
)
 
—

Income before income taxes
253,097

 
—


254,436


22,627


(277,063
)
 
253,097

Income tax provision (benefit)
59,839

 

 
60,096

 
7,135

 
(67,231
)
 
59,839

Net income
193,258

 
—


194,340


15,492


(209,832
)
 
193,258

Other comprehensive income
170

 


 


 


 


 
170

Total comprehensive income
193,428

 
—


194,340


15,492


(209,832
)
 
193,428




 
Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2019:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash provided by (used in) operating activities
39,943

 
5,214

 
197,142

 
(213,999
)
 
(5,839
)
 
22,461

Cash flow (used in) provided by investing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchase of property and equipment - net

 

 
(61,847
)
 
569

 

 
(61,278
)
Investments in unconsolidated entities

 

 
(3,256
)
 
(40,004
)
 

 
(43,260
)
Return of investments in unconsolidated entities

 

 
1,350

 
111,023

 

 
112,373

Investment in foreclosed real estate and distressed loans

 

 


 
(602
)
 

 
(602
)
Return of investments in foreclosed real estate and distressed loans

 

 

 
1,649

 

 
1,649

Acquisition of a business

 

 
(92,840
)
 


 

 
(92,840
)
Proceeds from sales of golf club property and an office building

 

 
15,319

 
18,220

 

 
33,539

Investment paid - intercompany

 

 
(71,628
)
 

 
71,628

 
—

Intercompany advances
170,230

 
344,786

 

 


 
(515,016
)
 
—

Net cash (used in) provided by investing activities
170,230

 
344,786

 
(212,902
)
 
90,855

 
(443,388
)
 
(50,419
)
Cash flow (used in) provided by financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from loans payable

 

 
300,000

 
1,640,998

 

 
1,940,998

Debt issuance costs for loans payable

 

 
(1,948
)
 


 

 
(1,948
)
Principal payments of loans payable

 

 
(55,829
)
 
(1,640,998
)
 

 
(1,696,827
)
Redemption of senior notes


 
(350,000
)
 

 

 

 
(350,000
)
Proceeds from stock-based benefit plans, net
5,441

 

 

 

 

 
5,441

Purchase of treasury stock
(167,474
)
 

 

 

 

 
(167,474
)
Dividends paid
(48,140
)
 

 

 

 

 
(48,140
)
Receipts related to noncontrolling interest, net


 

 

 
49

 

 
49

Investment received - intercompany


 

 

 
71,628

 
(71,628
)
 
—

Intercompany advances


 

 
(598,468
)
 
77,613

 
520,855

 
—

Net cash (used in) provided by financing activities
(210,173
)
 
(350,000
)
 
(356,245
)
 
149,290

 
449,227

 
(317,901
)
Net (decrease) increase in cash, cash equivalents, and restricted cash
—

 
—

 
(372,005
)
 
26,146

 
—

 
(345,859
)
Cash, cash equivalents, and restricted cash, beginning of period
—

 
—

 
1,011,867

 
171,072

 
—

 
1,182,939

Cash and cash equivalents, end of period
—

 
—

 
639,862

 
197,218

 
—

 
837,080

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2018:
 
Toll
Brothers,
Inc.
 
Subsidiary
Issuer
 
Guarantor
Subsidiaries
 
Nonguarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net cash (used in) provided by operating activities
4,283

 
10,844

 
(146,509
)
 
59,453

 
(2,107
)
 
(74,036
)
Cash flow provided by (used in) investing activities:
 
 
 
 
 
 
 
 
 
 
 
Purchase of property and equipment — net

 

 
(21,434
)
 
(267
)
 

 
(21,701
)
Investments in unconsolidated entities

 

 
(2,210
)
 
(12,979
)
 

 
(15,189
)
Return of investments in unconsolidated entities

 

 
28,351

 
65,318

 

 
93,669

Investment in foreclosed real estate and distressed loans

 

 


 
(519
)
 

 
(519
)
Return of investments in foreclosed real estate and distressed loans

 

 


 
3,934

 

 
3,934

Intercompany advances
458,400

 
(407,313
)
 

 

 
(51,087
)
 
—

Net cash provided by (used in) investing activities
458,400

 
(407,313
)
 
4,707

 
55,487

 
(51,087
)
 
60,194

Cash flow (used in) provided by financing activities:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from issuance of senior notes

 
400,000

 

 


 

 
400,000

Debt issuance costs for senior notes

 
(3,531
)
 

 


 

 
(3,531
)
Proceeds from loans payable

 

 
590,000

 
1,318,085

 

 
1,908,085

Principal payments of loans payable

 

 
(664,542
)
 
(1,355,953
)
 

 
(2,020,495
)
Proceeds from stock-based benefit plans, net
9,731

 

 

 

 

 
9,731

Purchase of treasury stock
(426,895
)
 

 

 

 

 
(426,895
)
Dividends paid
(45,519
)
 

 

 

 

 
(45,519
)
Receipts related to noncontrolling interest


 

 

 
22

 

 
22

Intercompany advances


 

 
15,479

 
(68,673
)
 
53,194

 
—

Net cash (used in) provided by financing activities
(462,683
)
 
396,469

 
(59,063
)
 
(106,519
)
 
53,194

 
(178,602
)
Net (decrease) increase in cash, cash equivalents, and restricted cash
—

 
—

 
(200,865
)
 
8,421

 
—

 
(192,444
)
Cash, cash equivalents, and restricted cash, beginning of period
—

 
—

 
534,704

 
180,607

 
—

 
715,311

Cash, cash equivalents, and restricted cash, end of period
—

 
—

 
333,839

 
189,028

 
—

 
522,867