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Investments in and Advances to Unconsolidated Entities | 9 Months Ended
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Jul. 31, 2013
Investments in and Advances to Unconsolidated Entities [Abstract] |
Investments in and Advances to Affiliates, Schedule of Investments [Text Block] | Investments in and Advances to Unconsolidated Entities The Company has investments in and advances to various unconsolidated entities. These entities include development joint ventures, homebuilding joint ventures, rental joint ventures, Toll Brothers Realty Trust and Trust II and a structured asset joint venture. At July 31, 2013, the Company had investments in and advances to these unconsolidated entities of $356.8 million and was committed to invest or advance up to an additional $110.6 million to these entities if they require additional funding. The Company’s investments in these entities are accounted for using the equity method of accounting. More specific information regarding its investments in, advances to and future commitments to these entities is provided below. Development Joint Ventures The Company has investments in and advances to a number of joint ventures with unrelated parties to develop land (“Development Joint Ventures”). Some of these Development Joint Ventures develop land for the sole use of the venture participants, including the Company, and others develop land for sale to the joint venture participants and to unrelated builders. The Company recognizes its share of earnings from the sale of home sites by the Development Joint Ventures to other builders. With regard to home sites the Company purchases from the Development Joint Ventures, the Company reduces its cost basis in those home sites by its share of the earnings on the home sites it purchases. At July 31, 2013, the Company had approximately $126.4 million invested in or advanced to the Development Joint Ventures and a funding commitment of $29.7 million to three of the Development Joint Ventures which would be funded if additional investment in the ventures is required. In March 2013, the Company entered into a joint venture with an unrelated party to develop a parcel of land in Texas as a master planned community consisting of approximately 2,900 lots. The Company has a 50% interest in this joint venture. The current plan is to develop the property in multiple phases and sell groups of lots to the members of the joint venture and to other home builders. The Company contributed $15.5 million of cash to the joint venture. The joint venture entered into a $25.0 million line of credit with a bank, secured by a deed of trust on the property which can be expanded up to $40.0 million under certain conditions. At July 31, 2013, the joint venture had $21.5 million of borrowings under this line of credit. At July 31, 2013, the Company had an investment of $16.3 million in this joint venture and was committed to make additional contributions to this joint venture of up to $16.2 million. The Company has a 50% interest in a joint venture that owns and is developing over 2,000 home sites in Orange County, California. Under the terms of the operating agreement, the Company will acquire 266 home sites in the first phase of the property from the joint venture. The Company intends to acquire approximately 545 additional home sites in future phases from the joint venture. The Company has a commitment to provide up to $10.0 million of additional funds to this joint venture, if needed. The joint venture has an $80.0 million credit facility from a bank to fund the development of the property. At July 31, 2013, the venture had $35.9 million borrowed under the facility. Homebuilding Joint Ventures At July 31, 2013, the Company had an aggregate of $147.5 million of investments in and advances to various joint ventures with unrelated parties to develop luxury for-sale homes. At July 31, 2013, the Company had $49.6 million of funding commitments to three of these joint ventures. One of the joint ventures expects to finance future construction with external financing. Rental Joint Ventures At July 31, 2013, the Company had an aggregate of $48.4 million of investments in and advances to several joint ventures with unrelated parties to develop luxury for-rent apartments, commercial space and a hotel. At July 31, 2013, the Company had $31.3 million of funding commitments to these joint ventures. At July 31, 2013, two of these joint ventures had aggregate loan commitments of $139.8 million and outstanding borrowings against these commitments of $13.9 million. In April 2013, the Company entered into a joint venture with an unrelated party to develop a luxury, 38-story apartment building and retail space in Jersey City, New Jersey on land that the Company owned and conveyed to the joint venture. The Company has a 50% interest in this joint venture. As part of the Company's initial capital contribution, it contributed land and improvements with a fair value of $28.8 million to the joint venture and subsequently received distributions of $10.2 million and a $1.2 million payment by the joint venture on our behalf to align the capital accounts of each of the members of the joint venture. The joint venture entered into a $120.0 million construction loan agreement with a bank to finance the development of this project. At July 31, 2013, the joint venture had no borrowings under the construction loan agreement. At July 31, 2013, the Company had an investment of $20.9 million in this joint venture and was committed to make additional contributions to this joint venture of up to $9.1 million. Toll Brothers Realty Trust and Trust II In fiscal 2005, the Company, together with the Pennsylvania State Employees Retirement System (“PASERS”), formed Toll Brothers Realty Trust II (“Trust II”) to invest in commercial real estate opportunities. Trust II is owned 50% by the Company and 50% by an affiliate of PASERS. At July 31, 2013, the Company had an investment of $3.6 million in Trust II. In 1998, prior to the formation of Trust II, the Company formed Toll Brothers Realty Trust (“Trust”) to invest in commercial real estate opportunities. The Trust is effectively owned one-third by the Company; one-third by Robert I. Toll, Bruce E. Toll (and members of his family), Douglas C. Yearley, Jr. and former members of the Company’s senior management; and one-third by an affiliate of PASERS. As of July 31, 2013, the Company had a net investment in the Trust of $0.5 million. The Company provides development, finance and management services to the Trust and recognized fees under the terms of various agreements in the amounts of $1.7 million in each of the nine-month periods ended July 31, 2013 and 2012, and $0.6 million in each of the three-month periods ended July 31, 2013 and 2012. Structured Asset Joint Venture The Company, through Gibraltar Capital and Asset Management LLC (“Gibraltar”), is a 20% participant with two unrelated parties that purchased a 40% interest in an entity that owns and controls a portfolio of loans and real estate (“Structured Asset Joint Venture”). At July 31, 2013, the Company had an investment of $30.5 million in this Structured Asset Joint Venture. At July 31, 2013, the Company did not have any commitments to make additional contributions to this Structured Asset Joint Venture and has not guaranteed any of its liabilities. Guarantees The unconsolidated entities in which the Company has investments generally finance their activities with a combination of partner equity and debt financing. In some instances, the Company and its partners have guaranteed debt of certain unconsolidated entities which may include any or all of the following: (i) project completion including any cost overruns, in whole or in part, (ii) repayment guarantees, generally covering a percentage of the outstanding loan, (iii) indemnification of the lender as to environmental matters affecting the unconsolidated entity and (iv) indemnification of the lender from “bad boy acts” of the unconsolidated entity. In some instances, the guarantees provided in connection with loans to an unconsolidated entity are joint and several. In these situations, the Company generally has a reimbursement agreement with its partner that provides that neither party is responsible for more than its proportionate share of the guarantee; however, if the joint venture partner does not have adequate financial resources to meet its obligations under the reimbursement agreement, the Company may be liable for more than its proportionate share. The Company believes that as of July 31, 2013, in the event it becomes legally obligated to perform under a guarantee of the obligation of an unconsolidated entity due to a triggering event, the collateral should be sufficient to repay a significant portion of the obligation. If it is not, the Company and its partners would need to contribute additional capital to the venture. At July 31, 2013, the unconsolidated entities that have guarantees related to debt had loan commitments aggregating $244.8 million and had borrowed an aggregate of $71.3 million. The term of these guarantees generally range from 28 months to 45 months. The Company estimates that the maximum potential exposure under these guarantees, if the full amount of the loan commitments were borrowed, would be $227.5 million before any reimbursement from the Company's partners. Based on the amounts borrowed at July 31, 2013, the Company's maximum potential exposure under these guarantees is estimated to be approximately $59.9 million before any reimbursement from the Company's partners. In addition, the Company has guaranteed approximately $11.8 million of ground lease payments and insurance deductibles for three joint ventures. As of July 31, 2013, the estimated aggregate fair value of the guarantees was approximately $1.5 million. The Company has not made payments under any of the guarantees, nor has it been called upon to do so. Variable Interest Entities At July 31, 2013, the Company determined that three of its joint ventures were VIEs under the guidance within FASB Accounting Standards Codification ("ASC") 810, "Consolidation." The Company has, however, concluded that it was not the primary beneficiary of the VIEs because the power to direct the activities of these VIEs that most significantly impact their performance was shared by the Company and the VIEs' other members. Business plans, budgets and other major decisions are required to be unanimously approved by all members. Management and other fees earned by the Company are nominal and believed to be at market rates and there is no significant economic disproportionality between the Company and other members. The information presented below regarding the investments, commitments and guarantees in unconsolidated entities deemed to be VIEs is also included in the information provided above. At July 31, 2013 and October 31, 2012, the Company's investments in its unconsolidated joint ventures deemed to be VIEs, which are included in investments in and advances to unconsolidated entities in the accompanying balance sheets, totaled $18.2 million and $26.5 million, respectively. At July 31, 2013, the maximum exposure of loss to the Company's investments in unconsolidated joint ventures that are VIEs is limited to its investment in the unconsolidated VIEs, except with regard to $45.8 million of additional commitments to the VIEs and $12.3 million of guarantees under loan and of ground lease agreements. At October 31, 2012, the maximum exposure to loss of the Company's investments in unconsolidated joint ventures that are VIEs is limited to its investment in the unconsolidated VIEs, except with regard to a $47.7 million additional commitment to fund the joint ventures and a $9.8 million guaranty of ground lease payments. Joint Venture Condensed Financial Information The condensed balance sheets, as of the dates indicated, and the condensed statements of operations and comprehensive income (loss) for the periods indicated, for the unconsolidated entities in which the Company has an investment, aggregated by type of business, are included below (in thousands). The column titled "Rental Property Joint Ventures" includes the Rental Joint Ventures and Toll Brothers Realty Trust and Trust II described above. Condensed Balance Sheets:
| July 31, 2013
| Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Structured Asset Joint Venture |  | Total
Cash and cash equivalents | $ | 21,902 |  |  | $ | 23,465 |  |  | $ | 28,883 |  |  | $ | 16,692 |  |  | $ | 90,942 |
Inventory | 312,815 |  |  | 302,759 |  |  | 4,996 |  |  |  |  |  | 620,570 |
Non-performing loan portfolio |  |  |  |  |  |  | 142,501 |  |  | 142,501 |
Rental properties |  |  |  |  | 168,204 |  |  |  |  |  | 168,204 |
Rental properties under development |  |  |  |  | 93,010 |  |  |  |  | 93,010 |
Real estate owned (“REO”) |  |  |  |  |  |  | 226,926 |  |  | 226,926 |
Other assets (1) | 13,157 |  |  | 69,650 |  |  | 12,298 |  |  | 311,816 |  |  | 406,921 |
Total assets | $ | 347,874 |  |  | $ | 395,874 |  |  | $ | 307,391 |  |  | $ | 697,935 |  |  | $ | 1,749,074 |
Debt (1) | $ | 127,641 |  |  | $ | 12,874 |  |  | $ | 213,255 |  |  | $ | 311,801 |  |  | $ | 665,571 |
Other liabilities | 19,533 |  |  | 17,385 |  |  | 8,777 |  |  | 507 |  |  | 46,202 |
Members’ equity | 200,700 |  |  | 365,615 |  |  | 85,359 |  |  | 154,251 |  |  | 805,925 |
Noncontrolling interest |  |  |  |  |  |  |  | 231,376 |  |  | 231,376 |
Total liabilities and equity | $ | 347,874 |  |  | $ | 395,874 |  |  | $ | 307,391 |  |  | $ | 697,935 |  |  | $ | 1,749,074 |
Company’s net investment in unconsolidated entities (2) | $ | 126,412 |  |  | $ | 147,450 |  |  | $ | 52,492 |  |  | $ | 30,483 |  |  | $ | 356,837 |
| October 31, 2012
| Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Structured Asset Joint Venture |  | Total
Cash and cash equivalents | $ | 17,189 |  |  | $ | 24,964 |  |  | $ | 26,167 |  |  | $ | 44,176 |  |  | $ | 112,496 |
Inventory | 255,561 |  |  | 251,029 |  |  | 5,643 |  |  |  |  |  | 512,233 |
Non-performing loan portfolio |  |  |  |  |  |  |  | 226,315 |  |  | 226,315 |
Rental properties |  |  |  |  | 173,767 |  |  |  |  |  | 173,767 |
Rental properties under development |  |  |  |  | 43,694 |  |  |  |  | 43,694 |
Real estate owned (“REO”) |  |  |  |  |  |  | 254,250 |  |  | 254,250 |
Other assets (1) | 12,427 |  |  | 72,290 |  |  | 9,194 |  |  | 237,476 |  |  | 331,387 |
Total assets | $ | 285,177 |  |  | $ | 348,283 |  |  | $ | 258,465 |  |  | $ | 762,217 |  |  | $ | 1,654,142 |
Debt (1) | $ | 96,362 |  |  | $ | 11,755 |  |  | $ | 213,725 |  |  | $ | 311,801 |  |  | $ | 633,643 |
Other liabilities | 14,390 |  |  | 9,438 |  |  | 5,534 |  |  | 561 |  |  | 29,923 |
Members’ equity | 174,425 |  |  | 327,090 |  |  | 39,206 |  |  | 179,942 |  |  | 720,663 |
Noncontrolling interest |  |  |  |  |  |  |  | 269,913 |  |  | 269,913 |
Total liabilities and equity | $ | 285,177 |  |  | $ | 348,283 |  |  | $ | 258,465 |  |  | $ | 762,217 |  |  | $ | 1,654,142 |
Company’s net investment in unconsolidated entities (2) | $ | 116,452 |  |  | $ | 135,688 |  |  | $ | 41,134 |  |  | $ | 37,343 |  |  | $ | 330,617 |
(1) | Included in other assets of the Structured Asset Joint Venture at July 31, 2013 and October 31, 2012 is $311.8 million and $237.5 million, respectively, of restricted cash held in a defeasance account which will be used to repay debt of the Structured Asset Joint Venture.
(2) | Differences between the Company’s net investment in unconsolidated entities and its underlying equity in the net assets of the entities is primarily a result of the acquisition price of an investment in an entity in fiscal 2012 which was in excess of the Company's pro-rata share of the underlying equity, impairments related to the Company’s investments in unconsolidated entities, a loan made to one of the entities by the Company, and distributions from entities in excess of the carrying amount of the Company’s net investment.
Condensed Statements of Operations and Comprehensive Income (Loss):
| For the nine months ended July 31, 2013
| Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Structured Asset Joint Venture |  | Total
Revenues | $ | 36,813 |  |  | $ | 31,574 |  |  | $ | 29,241 |  |  | $ | 27,114 |  |  | $ | 124,742 |
Cost of revenues | 17,992 |  |  | 28,017 |  |  | 12,677 |  |  | 25,632 |  |  | 84,318 |
Other expenses | 936 |  |  | 1,866 |  |  | 15,673 |  |  | 2,812 |  |  | 21,287 |
Total expenses | 18,928 |  |  | 29,883 |  |  | 28,350 |  |  | 28,444 |  |  | 105,605 |
Gain on disposition of loans and REO |  |  |  |  |  |  |  |  |  | 47,583 |  |  | 47,583 |
Income from operations | 17,885 |  |  | 1,691 |  |  | 891 |  |  | 46,253 |  |  | 66,720 |
Other income | 8 |  |  | 554 |  |  | 17 |  |  | 235 |  |  | 814 |
Net income | 17,893 |  |  | 2,245 |  |  | 908 |  |  | 46,488 |  |  | 67,534 |
Less: income attributable to noncontrolling interest |  |  |  |  |  |  |  |  | (27,893 | ) |  | (27,893 | )
Net income attributable to controlling interest | 17,893 |  |  | 2,245 |  |  | 908 |  |  | 18,595 |  |  | 39,641 |
Other comprehensive income |  |  |  |  | 1,162 |  |  |  |  | 1,162 |
Total comprehensive income | $ | 17,893 |  |  | $ | 2,245 |  |  | $ | 2,070 |  |  | $ | 18,595 |  |  | $ | 40,803 |
Company’s equity in earnings of unconsolidated entities (3) | $ | 2,853 |  |  | $ | 1,466 |  |  | $ | 917 |  |  | $ | 3,608 |  |  | $ | 8,844 |
| For the three months ended July 31, 2013
| Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Structured Asset Joint Venture |  | Total
Revenues | $ | 1,791 |  |  | $ | 8,817 |  |  | $ | 8,937 |  |  | $ | 5,400 |  |  | $ | 24,945 |
Cost of revenues | 186 |  |  | 8,043 |  |  | 3,667 |  |  | 6,139 |  |  | 18,035 |
Other expenses | 179 |  |  | 712 |  |  | 5,108 |  |  | 494 |  |  | 6,493 |
Total expenses | 365 |  |  | 8,755 |  |  | 8,775 |  |  | 6,633 |  |  | 24,528 |
Gain on disposition of loans and REO |  |  |  |  |  |  |  |  |  | 7,878 |  |  | 7,878 |
Income from operations | 1,426 |  |  | 62 |  |  | 162 |  |  | 6,645 |  |  | 8,295 |
Other income | 3 |  |  | 119 |  |  | 9 |  |  | 80 |  |  | 211 |
Net income | 1,429 |  |  | 181 |  |  | 171 |  |  | 6,725 |  |  | 8,506 |
Less: income attributable to noncontrolling interest |  |  |  |  |  |  | (4,035 | ) |  | (4,035 | )
Net income attributable to controlling interest | 1,429 |  |  | 181 |  |  | 171 |  |  | 2,690 |  |  | 4,471 |
Other comprehensive income |  |  |  |  | 1,064 |  |  |  |  | 1,064 |
Total comprehensive income | $ | 1,429 |  |  | $ | 181 |  |  | $ | 1,235 |  |  | $ | 2,690 |  |  | $ | 5,535 |
Company’s equity in earnings (losses) of unconsolidated entities (3) | $ | 57 |  |  | $ | 387 |  |  | $ | (213 | ) |  | $ | 537 |  |  | $ | 768 |
| For the nine months ended July 31, 2012
| Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Structured Asset Joint Venture |  | Total
Revenues | $ | 37,109 |  |  | $ | 76,325 |  |  | $ | 27,827 |  |  | $ | 20,858 |  |  | $ | 162,119 |
Cost of revenues | 34,696 |  |  | 55,028 |  |  | 10,186 |  |  | 26,048 |  |  | 125,958 |
Other expenses | 1,060 |  |  | 2,856 |  |  | 16,337 |  |  | 6,958 |  |  | 27,211 |
Total expenses | 35,756 |  |  | 57,884 |  |  | 26,523 |  |  | 33,006 |  |  | 153,169 |
Gain on disposition of loans and REO |  |  |  |  |  |  |  |  |  | 24,691 |  |  | 24,691 |
Income from operations | 1,353 |  |  | 18,441 |  |  | 1,304 |  |  | 12,543 |  |  | 33,641 |
Other income | 2,663 |  |  | 118 |  |  |  |  |  | 428 |  |  | 3,209 |
Net income | 4,016 |  |  | 18,559 |  |  | 1,304 |  |  | 12,971 |  |  | 36,850 |
Less: income attributable to noncontrolling interest |  |  |  |  |  |  | (7,784 | ) |  | (7,784 | )
Net income attributable to controlling interest | 4,016 |  |  | 18,559 |  |  | 1,304 |  |  | 5,187 |  |  | 29,066 |
Other comprehensive loss |  |  |  |  | (578 | ) |  |  |  | (578 | )
Total comprehensive income | $ | 4,016 |  |  | $ | 18,559 |  |  | $ | 726 |  |  | $ | 5,187 |  |  | $ | 28,488 |
Company’s equity in earnings of unconsolidated entities (3) | $ | 3,451 |  |  | $ | 13,473 |  |  | $ | 1,401 |  |  | $ | 1,023 |  |  | $ | 19,348 |
| For the three months ended July 31, 2012
| Develop- ment Joint Ventures |  | Home Building Joint Ventures |  | Rental Property Joint Ventures |  | Structured Asset Joint Venture |  | Total
Revenues | $ | 3,525 |  |  | $ | 28,859 |  |  | $ | 9,129 |  |  | $ | 8,496 |  |  | $ | 50,009 |
Cost of revenues | 2,925 |  |  | 20,273 |  |  | 3,451 |  |  | 8,821 |  |  | 35,470 |
Other expenses | 630 |  |  | 800 |  |  | 4,857 |  |  | 2,059 |  |  | 8,346 |
Total expenses | 3,555 |  |  | 21,073 |  |  | 8,308 |  |  | 10,880 |  |  | 43,816 |
Gain on disposition of loans and REO |  |  |  |  |  |  |  |  |  | 1,865 |  |  | 1,865 |
Income (loss) from operations | (30 | ) |  | 7,786 |  |  | 821 |  |  | (519 | ) |  | 8,058 |
Other income | 10 |  |  | 39 |  |  |  |  |  | 153 |  |  | 202 |
Net income (loss) | (20 | ) |  | 7,825 |  |  | 821 |  |  | (366 | ) |  | 8,260 |
Less: income attributable to noncontrolling interest |  |  |  |  |  |  | 220 |  |  | 220 |
Net income (loss) attributable to controlling interest | (20 | ) |  | 7,825 |  |  | 821 |  |  | (146 | ) |  | 8,480 |
Other comprehensive loss |  |  |  |  | (528 | ) |  |  |  | (528 | )
Total comprehensive income (loss) | $ | (20 | ) |  | $ | 7,825 |  |  | $ | 293 |  |  | $ | (146 | ) |  | $ | 7,952 |
Company’s equity in earnings (losses) of unconsolidated entities (3) | $ | (81 | ) |  | $ | 5,435 |  |  | $ | 347 |  |  | $ | (29 | ) |  | $ | 5,672 |
(3) | Differences between the Company’s equity in earnings of unconsolidated entities and the Company's percentage interest in the underlying net income (loss) of the entities is primarily a result of impairments related to the Company’s investment in unconsolidated entities, distributions from entities in excess of the carrying amount of the Company’s net investment, and the Company’s share of the entities’ profits related to home sites purchased by the Company which reduces the Company’s cost basis of the home sites.

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- Definition The entire disclosure for the information summarizing investments in and advances to majority-owned subsidiaries, other controlled companies, and other affiliates. It reflects specified information about ownership, financial results from, and financial position in such entities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14) -URI http://asc.fasb.org/extlink&oid=6955306&loc=d3e611322-123010 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 14 -Article 12 + Details
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