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Significant Accounting Policies | 3 Months Ended
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Jan. 31, 2014
Accounting Policies [Abstract] |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Toll Brothers, Inc. (the “Company”), a Delaware corporation, and those majority-owned subsidiaries it controls. All significant intercompany accounts and transactions have been eliminated. Investments in 50% or less owned partnerships and affiliates are accounted for using the equity method unless it is determined that the Company has effective control of the entity, in which case the entity would be consolidated. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The October 31, 2013 balance sheet amounts and disclosures included herein have been derived from the Company’s October 31, 2013 audited financial statements. Since the accompanying condensed consolidated financial statements do not include all the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements, the Company suggests that they be read in conjunction with the consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended October 31, 2013. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, necessary to present fairly the Company’s financial position as of January 31, 2014, the results of its operations for the three-month periods ended January 31, 2014 and 2013, and its cash flows for the three-month periods ended January 31, 2014 and 2013. The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year. Subsequent Events Acquisition of Shapell Industries, Inc. On February 4, 2014, the Company completed its previously announced acquisition of Shapell Industries, Inc. (“Shapell”) pursuant to the Purchase and Sale Agreement (the “Purchase Agreement”), dated November 6, 2013, with Shapell Investment Properties, Inc. (“SIPI”). Pursuant to the Purchase Agreement, the Company acquired, for cash, all of the equity interests in Shapell from SIPI for an aggregate purchase price of approximately $1.60 billion (the “Acquisition”). The Company acquired the single-family residential real property development business of Shapell, including a portfolio of approximately 4,950 home sites in California, some of which the Company expects to sell to other builders. As of the acquisition date, Shapell’s home building operation had 11 active selling communities in Northern California and Southern California, within which it is focused on a select number of premium markets. In addition, the Company acquired approximately $120.0 million of cash. As part of the acquisition, the Company assumed contracts to deliver approximately 126 homes with an aggregate value of approximately $105.3 million. At January 31, 2014, the Company had deposited with an escrow agent $161.0 million of the purchase price. This deposit is included in "Inventory" on the Company's Condensed Consolidated Balance Sheet at January 31, 2014. The purchase price is subject to post-closing adjustment in accordance with the terms of the Purchase Agreement. The Company financed the Acquisition with a combination of $370 million of borrowings under its $1.035 billion unsecured revolving credit facility, $485 million from the term loan facility described below, as well as with $830 million in proceeds from debt and equity financings completed in November 2013. Senior Unsecured Term Loan On February 3, 2014, the Company entered into a 5-year senior, $485 million, unsecured term loan facility (the "Term Loan Facility") with ten banks. The full amount of the Term Loan Facility was borrowed by the Company on February 3, 2014. The Company may select interest rates for the Term Loan Facility equal to (i) the London interbank offered rate ("LIBOR") plus an applicable margin, (ii) the base rate (which is defined as the greatest of (a) SunTrust Bank’s prime rate, (b) the federal funds effective rate plus 0.5% and (c) one-month LIBOR plus 1%) plus an applicable margin or (iii) the federal funds / Euro rate (which is defined as the greater of (a) the sum of the federal funds effective rate plus an applicable margin plus 0.25% and (b) one-month LIBOR), with the applicable margin, in each case, based on the Company's leverage ratio. The initial interest rate on the Term Loan will be 1.72% per annum. The Company and substantially all of its 100% owned home building subsidiaries are guarantors under the Term Loan Facility. The Term Loan Facility contains substantially the same financial covenants as the Company's five-year, unsecured revolving credit facility ("Credit Facility"). The Term Loan Facility will mature, and amounts owing under it will become due and payable, on February 3, 2019. 364-Day Senior Unsecured Revolving Credit Facility On February 4, 2014, the Company entered into a 364-day senior unsecured revolving credit facility (the "364-Day Facility") with five banks. The 364-Day Facility provides for an unsecured revolving credit facility to be made available to the Company, from time to time after February 4, 2014 and prior to February 3, 2015, in the amount of $500 million. The Company intends for this facility to remain undrawn and its existence is to provide the Company additional liquidity should unforeseen circumstances arise. The Company may select interest rates for the 364-Day Facility equal to (i) LIBOR plus an applicable margin, (ii) the base rate (which is defined as the greatest of (a) Citibank’s prime rate, (b) the federal funds effective rate plus 0.5% and (c) one-month LIBOR plus 1%) plus an applicable margin or (iii) the federal funds / Euro rate (which is defined as the greater of (a) the sum of the federal funds effective rate plus an applicable margin plus 0.25% and (b) one-month LIBOR), with the applicable margin, in each case, based on the Company's leverage ratio. The Company is obligated to pay an undrawn commitment fee. The Company and substantially all of its 100% owned home building subsidiaries are guarantors under the 364-Day Facility. The 364-Day Facility contains substantially the same financial covenants as the Company's Credit Facility. The 364-Day Facility will terminate, and amounts owing under the 364-Day Facility will become due and payable, on February 3, 2015.

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