Supplemental Guarantor Information

9 Months Ended

Jul. 31, 2011

Supplemental Guarantor Information [Abstract]

18. Supplemental Guarantor Information

A 100% owned subsidiary of the Company, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), issued $300 million of 6.875% Senior Notes due 2012 on November 22, 2002; $250 million of 5.95% Senior Notes due 2013 on September 3, 2003; $300 million of 4.95% Senior Notes due 2014 on March 16, 2004; $300 million of 5.15% Senior Notes due 2015 on June 2, 2005; $400 million of 8.91% Senior Notes due 2017 on April 13, 2009; and $250 million of 6.75% Senior Notes due 2019 on September 22, 2009. Through July 31, 2011, the Subsidiary Issuer has redeemed $150.2 million of its 6.875% Senior Notes due 2012, $108.4 million of its 5.95% Senior Notes due 2013 and $32.0 million of its 4.95% Senior Notes due 2014. The obligations of the Subsidiary Issuer to pay principal, premiums, if any, and interest is 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 (the “Non-Guarantor Subsidiaries”) do not guarantee the debt. 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. Prior to the above described senior debt issuances, the Subsidiary Issuer did not have any operations.

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).

Consolidating Balance Sheet at July 31, 2011


	Toll								Non-
	Brothers,			Subsidiary		Guarantor			Guarantor
	Inc.			Issuer		Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents							760,760			129,307						890,067
Marketable securities							294,286									294,286
Restricted cash							22,322			1,903						24,225
Inventory							2,924,342			499,275						3,423,617
Property, construction and office equipment, net							75,978			22,924						98,902
Receivables, prepaid expenses and other assets					7,097		67,538			24,177			(1,840	)		96,972
Mortgage loans held for sale										45,320						45,320
Customer deposits held in escrow							12,131			4,173						16,304
Investments in and advances to unconsolidated entities and non-performing loan portfolio							103,702			83,215						186,917
Investments in and advances to consolidated entities		2,719,231			1,521,739		(831,104	)		(372,838	)		(3,037,028	)		—

		2,719,231			1,528,836		3,429,955			437,456			(3,038,868	)		5,076,610


LIABILITIES AND EQUITY
Liabilities:
Loans payable							62,269			42,243						104,512
Senior notes					1,500,494											1,500,494
Mortgage company warehouse loan										39,905						39,905
Customer deposits							78,227			11,957						90,184
Accounts payable							93,432			190						93,622
Accrued expenses					28,342		315,900			181,858			(1,654	)		524,446
Income taxes payable		107,831								(2,000	)					105,831

Total liabilities		107,831			1,528,836		549,828			274,153			(1,654	)		2,458,994


Equity:
Stockholders’ equity:
Common stock		1,686								2,003			(2,003	)		1,686
Additional paid-in capital		390,778					4,420			2,734			(7,154	)		390,778
Retained earnings		2,219,208					2,875,952			152,350			(3,028,302	)		2,219,208
Treasury stock, at cost		(27	)													(27	)
Accumulated other comprehensive loss		(245	)				(245	)					245			(245	)

Total stockholders’ equity		2,611,400			—		2,880,127			157,087			(3,037,214	)		2,611,400
Noncontrolling interest										6,216						6,216

Total equity		2,611,400			—		2,880,127			163,303			(3,037,214	)		2,617,616

		2,719,231			1,528,836		3,429,955			437,456			(3,038,868	)		5,076,610

Consolidating Balance Sheet at October 31, 2010


	Toll								Non-
	Brothers,			Subsidiary		Guarantor			Guarantor
	Inc.			Issuer		Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents							930,387			108,673						1,039,060
Marketable securities							197,867									197,867
Restricted cash							60,906									60,906
Inventory							2,862,796			378,929						3,241,725
Property, construction and office equipment, net							79,516			400						79,916
Receivables, prepaid expenses and other assets		27			8,104		66,280			24,565			(1,937	)		97,039
Mortgage loans held for sale										93,644						93,644
Customer deposits held in escrow							13,790			7,576						21,366
Investments in and advances to unconsolidated entities and non-performing loan portfolio							116,247			82,195						198,442
Income tax refund recoverable		141,590														141,590
Investments in and advances to consolidated entities		2,578,195			1,562,109		(871,125	)		(315,074	)		(2,954,105	)		—

		2,719,812			1,570,213		3,456,664			380,908			(2,956,042	)		5,171,555


LIABILITIES AND EQUITY
Liabilities:
Loans payable							63,442			31,049						94,491
Senior notes					1,544,110											1,544,110
Mortgage company warehouse loan										72,367						72,367
Customer deposits							72,819			4,337						77,156
Accounts payable							91,498			240						91,738
Accrued expenses					26,103		242,793			303,413			(1,988	)		570,321
Income taxes payable		164,359								(2,000	)					162,359

Total liabilities		164,359			1,570,213		470,552			409,406			(1,988	)		2,612,542


Equity:
Stockholders’ equity:
Common stock		1,664								2,003			(2,003	)		1,664
Additional paid-in capital		360,006					4,420			2,734			(7,154	)		360,006
Retained earnings		2,194,456					2,982,269			(36,795	)		(2,945,474	)		2,194,456
Treasury stock, at cost		(96	)													(96	)
Accumulated other comprehensive loss		(577	)				(577	)					577			(577	)

Total stockholders’ equity		2,555,453			—		2,986,112			(32,058	)		(2,954,054	)		2,555,453
Noncontrolling interest										3,560						3,560

Total equity		2,555,453			—		2,986,112			(28,498	)		(2,954,054	)		2,559,013

		2,719,812			1,570,213		3,456,664			380,908			(2,956,042	)		5,171,555

Condensed Consolidating Statement of Operations for the nine months ended July 31, 2011 ($ in thousands):


	Toll									Non-
	Brothers,			Subsidiary			Guarantor			Guarantor
	Inc.			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated

Revenues								1,003,871			44,225						1,048,096


Cost of revenues								854,080			49,647			(5,461	)		898,266
Selling, general and administrative		91			1,000			200,646			28,772			(37,603	)		192,906
Interest expense					78,273			1,504						(78,273	)		1,504

		91			79,273			1,056,230			78,419			(121,337	)		1,092,676

Loss from operations		(91	)		(79,273	)		(52,359	)		(34,194	)		121,337			(44,580	)
Other
(Loss) income from unconsolidated entities and non-performing loan portfolio								12,597			(22,414	)					(9,817	)
Interest and other					82,687			(4,790	)		28,728			(93,457	)		13,168
Expenses related to retirement of debt					(3,414	)											(3,414	)
Loss from subsidiaries		(44,552	)											44,552			—

Loss before income tax benefit		(44,643	)		—			(44,552	)		(27,880	)		72,432			(44,643	)
Income tax benefit		(69,395	)					(69,253	)		(43,338	)		112,591			(69,395	)

Net income		24,752			—			24,701			15,458			(40,159	)		24,752

Condensed Consolidating Statement of Operations for the three months ended July 31, 2011 ($ in thousands):


	Toll									Non-
	Brothers,			Subsidiary			Guarantor			Guarantor
	Inc.			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated

Revenues								377,356			16,949						394,305


Cost of revenues								323,151			18,813			(2,017	)		339,947
Selling, general and administrative		38			330			67,720			10,033			(13,516	)		64,605
Interest expense					25,790									(25,790	)		—

		38			26,120			390,871			28,846			(41,323	)		404,552

Loss from operations		(38	)		(26,120	)		(13,515	)		(11,897	)		41,323			(10,247	)
Other
Income from unconsolidated entities and non-performing loan portfolio								8,892			3,163						12,055
Interest and other					29,534			8,549			10,505			(43,094	)		5,494
Expenses related to retirement of debt					(3,414	)											(3,414	)
Income from subsidiaries		3,926												(3,926	)		—

Income before income tax benefit		3,888			—			3,926			1,771			(5,697	)		3,888
Income tax benefit		(38,220	)					(37,469	)		(24,304	)		61,773			(38,220	)

Net income		42,108			—			41,395			26,075			(67,470	)		42,108

Condensed Consolidating Statement of Operations for the nine months ended July 31, 2010 ($ in thousands):


	Toll									Non-
	Brothers,			Subsidiary			Guarantor			Guarantor
	Inc.			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated

Revenues								1,053,378			38,793						1,092,171


Cost of revenues								961,827			53,095			(2,347	)		1,012,575
Selling, general and administrative		57			1,029			192,149			16,613			(15,861	)		193,987
Interest expense					80,123			18,588						(80,123	)		18,588

		57			81,152			1,172,564			69,708			(98,331	)		1,225,150

Loss from operations		(57	)		(81,152	)		(119,186	)		(30,915	)		98,331			(132,979	)
Other
Income from unconsolidated entities and non-performing loan portfolio								3,720			1,097						4,817
Interest and other					81,810			8,495			21,809			(90,980	)		21,134
Expenses related to retirement of debt					(658	)		(692	)					658			(692	)
Loss from subsidiaries		(107,663	)											107,663			—

Loss before income tax benefit		(107,720	)		—			(107,663	)		(8,009	)		115,672			(107,720	)
Income tax benefit		(53,867	)					(114,640	)		(3,967	)		118,607			(53,867	)

Net (loss) income		(53,853	)		—			6,977			(4,042	)		(2,935	)		(53,853	)

Condensed Consolidating Statement of Operations for the three months ended July 31, 2010 ($ in thousands):


	Toll									Non-
	Brothers,			Subsidiary			Guarantor			Guarantor
	Inc.			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated

Revenues								438,559			15,643						454,202


Cost of revenues								373,075			18,800			(2,370	)		389,505
Selling, general and administrative		8			335			65,817			6,600			(5,595	)		67,165
Interest expense					26,481			5,124						(26,481	)		5,124

		8			26,816			444,016			25,400			(34,446	)		461,794

Loss from operations		(8	)		(26,816	)		(5,457	)		(9,757	)		34,446			(7,592	)
Other
Income from unconsolidated entities and non-performing loan portfolio								2,074			1,097						3,171
Interest and other					27,474			4,872			8,081			(34,525	)		5,902
Expenses related to retirement of debt					(658	)		(658	)					658			(658	)
Income from subsidiaries		831												(831	)		—

Income (loss) before income tax benefit		823			—			831			(579	)		(252	)		823
Income tax benefit		(26,479	)					(92,977	)		(2,130	)		95,107			(26,479	)

Net income		27,302			—			93,808			1,551			(95,359	)		27,302

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2011 ($ in thousands):


	Toll									Non-
	Brothers,			Subsidiary			Guarantor			Guarantor
	Inc.			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flow from operating activities:
Net income		24,752						24,701			15,458			(40,159	)		24,752
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization					2,416			14,055			652						17,123
Stock-based compensation		10,419															10,419
Impairments of investments in unconsolidated entities								10,000			29,600						39,600
Income from unconsolidated entities and non-performing loan portfolio								(16,725	)		(13,058	)					(29,783	)
Distributions of earnings from unconsolidated entities								7,316			101						7,417
Deferred tax benefit		4,329															4,329
Deferred tax valuation allowance		(4,329	)														(4,329	)
Inventory impairments								34,861									34,861
Change in fair value of mortgage loans receivable and derivative instruments											628						628
Expenses related to early retirement of debt					3,414												3,414
Changes in operating assets and liabilities
Increase in inventory								(85,962	)		(122,242	)					(208,204	)
Origination of mortgage loans											(457,383	)					(457,383	)
Sale of mortgage loans											504,724						504,724
Decrease (increase) in restricted cash								38,584			(1,903	)					36,681
Decrease (increase) in receivables, prepaid expenses and other assets		(141,264	)		40,368			(202,418	)		259,948			40,411			(2,955	)
Increase in customer deposits								7,067			11,023						18,090
(Decrease) increase in accounts payable and accrued expenses		(2,304	)		2,239			75,257			(112,985	)		(252	)		(38,045	)
Decrease in income tax refund recoverable		141,590															141,590
Decrease in income taxes payable		(56,461	)														(56,461	)

Net cash provided by (used in) operating activities		(23,268	)		48,437			(93,264	)		114,563			—			46,468

Cash flow from investing activities:
Purchase of property and equipment								(3,756	)		(3,171	)					(6,927	)
Purchase of marketable securities								(420,087	)								(420,087	)
Sale of marketable securities								318,372									318,372
Investments in and advances to unconsolidated entities and non-performing loan portfolio											(42,141	)					(42,141	)
Return of investments from unconsolidated entities								40,485			(14,200	)					26,285

Net cash used in investing activities								(64,986	)		(59,512	)					(124,498	)

Cash flow from financing activities:
Proceeds from loans payable											666,659						666,659
Principal payments of loans payable								(11,377	)		(703,754	)					(715,131	)
Redemption of senior notes					(48,437	)											(48,437	)
Proceeds from stock-based benefit plans		23,731															23,731
Receipts related to noncontrolling interest											2,678						2,678
Purchase of treasury stock		(463	)														(463	)

Net cash (used in) provided by financing activities		23,268			(48,437	)		(11,377	)		(34,417	)					(70,963	)

Net (decrease) increase in cash and cash equivalents		—			—			(169,627	)		20,634			—			(148,993	)
Cash and cash equivalents, beginning of period								930,387			108,673						1,039,060

Cash and cash equivalents, end of period		—			—			760,760			129,307			—			890,067

Condensed Consolidating Statement of Cash Flows for the nine months ended July 31, 2010 ($ in thousands):


	Toll									Non-
	Brothers,			Subsidiary			Guarantor			Guarantor
	Inc.			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash flow from operating activities:
Net (loss) income		(53,853	)					6,977			(4,042	)		(2,935	)		(53,853	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization					2,453			12,153			(651	)					13,955
Stock-based compensation		9,366															9,366
Excess tax benefits from stock-based compensation		(3,595	)														(3,595	)
Income from unconsolidated entities and non-performing loan portfolio								(3,720	)		(1,097	)					(4,817	)
Distributions of earnings from unconsolidated entities								7,211									7,211
Inventory impairments								80,470			7,750						88,220
Expenses related to early retirement of debt					658			34									692
Deferred tax benefit		(14,687	)														(14,687	)
Deferred tax valuation allowance		14,687															14,687
Change in fair value of mortgage loans receivable and derivative instruments											(537	)					(537	)
Changes in operating assets and liabilities
(Increase) decrease in inventory								(42,996	)		(99,113	)					(142,109	)
Origination of mortgage loans											(417,985	)					(417,985	)
Sale of mortgage loans											395,191						395,191
Decrease (increase) in receivables, prepaid expenses and other assets		(56,243	)		24,086			(72,014	)		110,733			1,581			8,143
Decrease in customer deposits								(3,218	)		(6,517	)					(9,735	)
(Decrease) increase in accounts payable and accrued expenses		(1,774	)		8,867			(144,899	)		88,048			1,354			(48,404	)
Decrease in income tax refund recoverable		112,141															112,141
Decrease in current income taxes payable		(16,410	)														(16,410	)

Net cash (used in) provided by operating activities		(10,368	)		36,064			(160,002	)		71,780			—			(62,526	)

Cash flow from investing activities:
Purchase of property and equipment								(1,367	)		(85	)					(1,452	)
Purchase of marketable securities								(105,450	)								(105,450	)
Investments in and advances to unconsolidated entities and non-performing loan portfolio								(26,510	)		(29,118	)					(55,628	)
Return of investments in unconsolidated entities								7,246									7,246

Net cash used in investing activities								(126,081	)		(29,203	)					(155,284	)

Cash flow from financing activities:
Redemption of senior subordinated notes								(47,872	)								(47,872	)
Redemption of senior notes					(36,064	)											(36,064	)
Proceeds from loans payable											610,071						610,071
Principal payments of loans payable								(40,464	)		(651,312	)					(691,776	)
Proceeds from stock-based benefit plans		7,273															7,273
Excess tax benefits from stock-based compensation		3,595															3,595
Purchase of treasury stock		(500	)														(500	)

Net cash (used in) provided by financing activities		10,368			(36,064	)		(88,336	)		(41,241	)					(155,273	)

Net (decrease) increase in cash and cash equivalents		—			—			(374,419	)		1,336			—			(373,083	)
Cash and cash equivalents, beginning of period								1,700,351			107,367						1,807,718

Cash and cash equivalents, end of period		—			—			1,325,932			108,703			—			1,434,635