Supplemental Guarantor Information

6 Months Ended

Apr. 30, 2020

Supplemental Guarantor Information [Abstract]

Supplemental Guarantor Information [Text Block]

Supplemental Guarantor Information

At April 30, 2020, 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
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
3.80% Senior Notes due November 1, 2029	$	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 Revolving 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 Revolving Credit Facility. If there are no guarantors under the Revolving 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 April 30, 2020:

	Toll Brothers, Inc.	Subsidiary Issuer	Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations	Consolidated
ASSETS
Cash and cash equivalents	—	—	610,591	130,631	—	741,222
Inventory			8,099,842	95,791		8,195,633
Property, construction and office equipment, net			276,552	1,966		278,518
Receivables, prepaid expenses and other assets	5,667		254,310	774,796	(51,679)	983,094
Mortgage loans held for sale				141,007		141,007
Customer deposits held in escrow			74,648	42		74,690
Investments in unconsolidated entities			44,545	319,496		364,041
Investments in and advances to consolidated entities	4,656,426	2,712,458	185,516	206,756	(7,761,156)	—
Income taxes receivable	32,606					32,606
	4,694,699	2,712,458	9,546,004	1,670,485	(7,812,835)	10,810,811
LIABILITIES AND EQUITY
Liabilities
Loans payable			1,554,721	36,109	(34,258)	1,556,572
Senior notes		2,660,815				2,660,815
Mortgage company loan facility				106,018		106,018
Customer deposits			418,047	2,122	(516)	419,653
Accounts payable			330,970	19,049		350,019
Accrued expenses	6,724	33,802	566,295	444,970	(53,248)	998,543
Advances from consolidated entities			351,458	578,997	(930,455)	—
Income taxes payable	105,469					105,469
Total liabilities	112,193	2,694,617	3,221,491	1,187,265	(1,018,477)	6,197,089
Equity
Stockholders’ equity
Common stock	1,529		48	3,006	(3,054)	1,529
Additional paid-in capital	725,246	49,400		199,034	(248,434)	725,246
Retained earnings (deficit)	4,896,005	(31,559)	6,324,465	231,976	(6,542,870)	4,878,017
Treasury stock, at cost	(1,034,999)					(1,034,999)
Accumulated other comprehensive loss	(5,275)					(5,275)
Total stockholders’ equity	4,582,506	17,841	6,324,513	434,016	(6,794,358)	4,564,518
Noncontrolling interest				49,204		49,204
Total equity	4,582,506	17,841	6,324,513	483,220	(6,794,358)	4,613,722
	4,694,699	2,712,458	9,546,004	1,670,485	(7,812,835)	10,810,811

Condensed Consolidating Balance Sheet at October 31, 2019:

	Toll Brothers, Inc.	Subsidiary Issuer	Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations	Consolidated
ASSETS
Cash and cash equivalents	—	—	1,082,067	203,947	—	1,286,014
Inventory			7,791,759	81,289		7,873,048
Property, construction and office equipment, net			263,140	10,272		273,412
Receivables, prepaid expenses and other assets			224,681	610,541	(119,781)	715,441
Mortgage loans held for sale				218,777		218,777
Customer deposits held in escrow			74,303	100		74,403
Investments in unconsolidated entities			50,594	315,658		366,252
Investments in and advances to consolidated entities	5,172,737	2,704,551	163,371	147,413	(8,188,072)	—
Income taxes receivable	20,791					20,791
	5,193,528	2,704,551	9,649,915	1,587,997	(8,307,853)	10,828,138
LIABILITIES AND EQUITY
Liabilities
Loans payable			1,109,614	36,092	(34,257)	1,111,449
Senior notes		2,659,898				2,659,898
Mortgage company loan facility				150,000		150,000
Customer deposits			383,583	2,013		385,596
Accounts payable			347,715	884		348,599
Accrued expenses	754	26,812	569,476	443,180	(89,290)	950,932
Advances from consolidated entities			1,052,370	503,058	(1,555,428)	—
Income taxes payable	102,971					102,971
Total liabilities	103,725	2,686,710	3,462,758	1,135,227	(1,678,975)	5,709,445
Equity
Stockholders’ equity
Common stock	1,529		48	3,006	(3,054)	1,529
Additional paid-in capital	726,879	49,400		177,034	(226,434)	726,879
Retained earnings (deficit)	4,792,409	(31,559)	6,187,109	225,853	(6,399,390)	4,774,422
Treasury stock, at cost	(425,183)					(425,183)
Accumulated other comprehensive loss	(5,831)					(5,831)
Total stockholders’ equity	5,089,803	17,841	6,187,157	405,893	(6,628,878)	5,071,816
Noncontrolling interest				46,877		46,877
Total equity	5,089,803	17,841	6,187,157	452,770	(6,628,878)	5,118,693
	5,193,528	2,704,551	9,649,915	1,587,997	(8,307,853)	10,828,138

Condensed Consolidating Statement of Operations and Comprehensive Income for the six months ended April 30, 2020:

	Toll Brothers, Inc.	Subsidiary Issuer	Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations	Consolidated
Revenues:
Home sales			2,798,935	14,636		2,813,571
Land sales and other			43,964	112,929	(89,961)	66,932
	—	—	2,842,899	127,565	(89,961)	2,880,503
Cost of revenues:
Home sales			2,301,861	11,286	(2,558)	2,310,589
Land sales and other			26,132	71,086	(38,518)	58,700
	—	—	2,327,993	82,372	(41,076)	2,369,289
Selling, general and administrative	100	36	385,041	32,991	(46,998)	371,170
Income (loss) from operations	(100)	(36)	129,865	12,202	(1,887)	140,044
Other:
Income (loss) from unconsolidated entities			14,715	(6,845)		7,870
Other income – net			14,068	10,476	(4,413)	20,131
Intercompany interest income		65,642	2,930	2,802	(71,374)	—
Interest expense		(65,606)	(2,802)	(3,266)	71,674	—
Income from subsidiaries	168,145		15,369		(183,514)	—
Income before income taxes	168,045	—	174,145	15,369	(189,514)	168,045
Income tax provision	35,499		36,788	3,246	(40,034)	35,499
Net income	132,546	—	137,357	12,123	(149,480)	132,546
Other comprehensive income	556					556
Total comprehensive income	133,102	—	137,357	12,123	(149,480)	133,102

Condensed Consolidating Statement of Operations and Comprehensive Income for the six months ended April 30, 2019:

	Toll Brothers, Inc.	Subsidiary Issuer	Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations	Consolidated
Revenues:
Home sales			2,967,351	64,014		3,031,365
Land sales and other			30,793	107,644	(90,527)	47,910
	—	—	2,998,144	171,658	(90,527)	3,079,275
Cost of revenues:
Home sales			2,365,786	50,965	(159)	2,416,592
Land sales and other			7,979	62,801	(33,606)	37,174
	—	—	2,373,765	113,766	(33,765)	2,453,766
Selling, general and administrative	491	1,395	355,050	36,095	(52,422)	340,609
Income (loss) from operations	(491)	(1,395)	269,329	21,797	(4,340)	284,900
Other:
Income from unconsolidated entities			8,541	2,018		10,559
Other income – net			12,255	14,250	5,641	32,146
Intercompany interest income		67,004	870	2,980	(70,854)	—
Interest expense		(65,609)	(2,980)	(964)	69,553	—
Income from subsidiaries	328,096		40,081		(368,177)	—
Income before income taxes	327,605	—	328,096	40,081	(368,177)	327,605
Income tax provision	86,231		86,355	10,549	(96,904)	86,231
Net income	241,374	—	241,741	29,532	(271,273)	241,374
Other comprehensive income	112					112
Total comprehensive income	241,486	—	241,741	29,532	(271,273)	241,486

Condensed Consolidating Statement of Operations and Comprehensive Income for the three months ended April 30, 2020:

	Toll Brothers, Inc.	Subsidiary Issuer	Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations	Consolidated
Revenues:
Home sales			1,509,558	6,676		1,516,234
Land sales and other			26,168	54,653	(47,983)	32,838
	—	—	1,535,726	61,329	(47,983)	1,549,072
Cost of revenues:
Home sales			1,248,159	5,284	(2,754)	1,250,689
Land sales and other			14,274	32,250	(20,106)	26,418
	—	—	1,262,433	37,534	(22,860)	1,277,107
Selling, general and administrative	47	11	187,091	16,195	(23,927)	179,417
Income (loss) from operations	(47)	(11)	86,202	7,600	(1,196)	92,548
Other:
Income (loss) from unconsolidated entities			513	(4,784)		(4,271)
Other income – net			9,402	9,508	(5,074)	13,836
Intercompany interest income		29,272	1,425	1,509	(32,206)	—
Interest expense		(29,261)	(1,509)	(1,705)	32,475	—
Income from subsidiaries	102,161		12,128		(114,289)	—
Income before income taxes	102,114	—	108,161	12,128	(120,290)	102,113
Income tax provision	26,443		27,725	2,802	(30,527)	26,443
Net income	75,671	—	80,436	9,326	(89,763)	75,670
Other comprehensive income	278					278
Total comprehensive income	75,949	—	80,436	9,326	(89,763)	75,948

Condensed Consolidating Statement of Operations and Comprehensive Income for the three months ended April 30, 2019:

	Toll Brothers, Inc.	Subsidiary Issuer	Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations	Consolidated
Revenues:
Home sales			1,675,155	36,902		1,712,057
Land sales and other			15,460	34,329	(45,752)	4,037
	—	—	1,690,615	71,231	(45,752)	1,716,094
Cost of revenues:
Home sales			1,344,891	29,616	(160)	1,374,347
Land sales and other			3,841	16,909	(17,829)	2,921
	—	—	1,348,732	46,525	(17,989)	1,377,268
Selling, general and administrative	101	662	185,133	17,342	(24,867)	178,371
Income (loss) from operations	(101)	(662)	156,750	7,364	(2,896)	160,455
Other:
Income from unconsolidated entities			3,154	1,265		4,419
Other income - net			6,758	1,019	3,508	11,285
Intercompany interest income		32,883	343	1,475	(34,701)	—
Interest expense		(32,221)	(1,475)	(393)	34,089	—
Income from consolidated subsidiaries	176,260		10,730		(186,990)	—
Income before income taxes	176,159	—	176,260	10,730	(186,990)	176,159
Income tax provision	46,835		46,859	2,914	(49,773)	46,835
Net income	129,324	—	129,401	7,816	(137,217)	129,324
Other comprehensive income	56					56
Total comprehensive income	129,380	—	129,401	7,816	(137,217)	129,380

Condensed Consolidating Statement of Cash Flows for the six months ended April 30, 2020:

	Toll Brothers, Inc.	Subsidiary Issuer	Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations	Consolidated
Net cash (used in) provided by operating activities	3,362	7,917	(73,779)	(90,059)	(38,577)	(191,136)
Cash flow (used in) provided by investing activities:
Purchase of property and equipment - net			(51,752)	995		(50,757)
Investments in unconsolidated entities			(542)	(9,721)		(10,263)
Return of investments in unconsolidated entities			9,508	25,376		34,884
Investment in foreclosed real estate and distressed loans				(272)		(272)
Return of investments in foreclosed real estate and distressed loans				1,431		1,431
Acquisition of a business			(60,349)			(60,349)
Proceeds from sales of golf club properties and an office building				15,617		15,617
Investment paid - intercompany			(85,631)		85,631	—
Intercompany advances	653,669	(7,917)			(645,752)	—
Net cash (used in) provided by investing activities	653,669	(7,917)	(188,766)	33,426	(560,121)	(69,709)
Cash flow (used in) provided by financing activities:
Proceeds from loans payable			1,425,008	1,307,485		2,732,493
Principal payments of loans payable			(1,002,646)	(1,351,467)		(2,354,113)
Proceeds from stock-based benefit plans, net	5,305					5,305
Purchase of treasury stock	(633,553)					(633,553)
Dividends paid	(28,783)					(28,783)
Payments related to noncontrolling interest, net				(936)		(936)
Dividend paid - intercompany				(6,000)	6,000	—
Investment received - intercompany				85,628	(85,628)	—
Intercompany advances			(631,294)	(47,032)	678,326	—
Net cash (used in) provided by financing activities	(657,031)	—	(208,932)	(12,322)	598,698	(279,587)
Net decrease in cash, cash equivalents, and restricted cash	—	—	(471,477)	(68,955)	—	(540,432)
Cash, cash equivalents, and restricted cash, beginning of period	—	—	1,082,090	237,553	—	1,319,643
Cash, cash equivalents, and restricted cash, end of period	—	—	610,613	168,598	—	779,211

Condensed Consolidating Statement of Cash Flows for the six months ended April 30, 2019:

	Toll Brothers, Inc.	Subsidiary Issuer	Guarantor Subsidiaries	Nonguarantor Subsidiaries	Eliminations	Consolidated
Net cash used in operating activities	(525)	(3,635)	(69,339)	(1,854)	(10,325)	(85,678)
Cash flow provided by (used in) investing activities:
Purchase of property and equipment — net			(45,805)	864		(44,941)
Investments in unconsolidated entities			(3,091)	(28,469)		(31,560)
Return of investments in unconsolidated entities				70,465		70,465
Investment in foreclosed real estate and distressed loans				(522)		(522)
Return of investments in foreclosed real estate and distressed loans				1,214		1,214
Investment paid - intercompany			(57,917)		57,917	—
Proceeds from the sale of a golf club property			15,319	18,220		33,539
Intercompany advances	56,901	353,635			(410,536)	—
Net cash provided by (used in) investing activities	56,901	353,635	(91,494)	61,772	(352,619)	28,195
Cash flow (used in) provided by financing activities:
Proceeds from loans payable			300,000	1,039,641		1,339,641
Debt issuance costs for loans payable			(1,948)			(1,948)
Principal payments of loans payable			(52,165)	(1,079,630)		(1,131,795)
Redemption of senior notes		(350,000)				(350,000)
Proceeds from stock-based benefit plans, net	1,302					1,302
Excess tax benefits from stock-based compensation						—
Purchase of treasury stock	(25,244)					(25,244)
Dividends paid	(32,434)					(32,434)
Receipts related to noncontrolling interest, net				13		13
Investment received - intercompany				57,917	(57,917)	—
Intercompany advances			(395,905)	(24,956)	420,861	—
Net cash used in financing activities	(56,376)	(350,000)	(150,018)	(7,015)	362,944	(200,465)
Net (decrease) increase in cash, cash equivalents, and restricted cash	—	—	(310,851)	52,903	—	(257,948)
Cash, cash equivalents, and restricted cash, beginning of period	—	—	1,011,867	171,072	—	1,182,939
Cash, cash equivalents, and restricted cash, end of period	—	—	701,016	223,975	—	924,991