Toro 2011 Annual Report Download - page 55

purchases. These financing arrangements are used by the com- upon exercise of options, contingently issuable shares, and
pany as a marketing tool to assist customers to buy inventory. The restricted common stock.
financing costs for distributor and dealer inventories were $16,394, Reconciliations of basic and diluted weighted-average shares of
$14,490, and $9,452 for the fiscal years ended October 31, 2011, common stock outstanding are as follows:
2010, and 2009, respectively.
BASIC
Advertising (Shares in thousands)
Fiscal years ended October 31 2011 2010 2009
General advertising expenditures and the related production costs
are expensed in the period incurred or the first time advertising Weighted-average number of shares of
common stock 31,265 32,980 35,784
takes place. Cooperative advertising represents expenditures for
Assumed issuance of contingent shares 2 24
shared advertising costs that the company reimburses to custom-
Weighted-average number of shares of
ers. These obligations are accrued and expensed when the related
common stock and assumed issuance of
revenues are recognized in accordance with the programs estab- contingent shares 31,267 32,982 35,788
lished for various product lines. Advertising costs were $49,362,
DILUTED
$39,281, and $33,496 for the fiscal years ended October 31, 2011,
(Shares in thousands)
2010, and 2009, respectively.
Fiscal years ended October 31 2011 2010 2009
Weighted-average number of shares of
Stock-Based Compensation
common stock and assumed issuance of
The company’s stock-based compensation awards generally contingent shares 31,267 32,982 35,788
include performance shares issued to key employees that are con- Effect of dilutive securities 530 455 452
tingent on the achievement of performance goals of the company, Weighted-average number of shares of
non-qualified stock options, and restricted stock awards. Compen- common stock, assumed issuance of
sation expense equal to the grant date fair value is recognized for contingent and restricted shares, and effect
these awards over the vesting period. See Note 10 for additional of dilutive securities 31,797 33,437 36,240
information regarding stock-based compensation plans. Options to purchase an aggregate of 208,718, 330,555, and
1,406,871 shares of common stock outstanding during fiscal 2011,
Statement of Stockholders’ Equity and 2010, and 2009, respectively, were excluded from the diluted net
Comprehensive Income Information earnings per share calculation because their exercise prices were
Components of accumulated other comprehensive loss as of Octo- greater than the average market price of the company’s common
ber 31 were as follows: stock during the same respective periods.
2011 2010 2009 Cash Flow Presentation
Foreign currency translation adjustment $2,904 $ 3,008 $ 2,368 The consolidated statements of cash flows are prepared using the
Adjustments to employee retirement benefits, indirect method, which reconciles net earnings to cash flow from
net of tax 3,800 3,261 3,942 operating activities. The necessary adjustments include the
Unrealized loss on derivative instruments, removal of timing differences between the occurrence of operating
net of tax 122 2,793 3,093
receipts and payments and their recognition in net earnings. The
Total accumulated other comprehensive loss $6,826 $ 9,062 $ 9,403 adjustments also remove from operating activities cash flows aris-
ing from investing and financing activities, which are presented
Net Earnings Per Share separately from operating activities. Cash flows from foreign cur-
Basic net earnings per share is calculated using net earnings avail- rency transactions and operations are translated at an average
able to common stockholders divided by the weighted-average exchange rate for the period. Cash paid for acquisitions is classi-
number of shares of common stock outstanding during the year fied as investing activities.
plus the assumed issuance of contingent shares. Diluted net earn-
ings per share is similar to basic net earnings per share except New Accounting Pronouncements Adopted
that the weighted-average number of shares of common stock out- In September 2011, the Financial Accounting Standards Board
standing plus the assumed issuance of contingent shares is (‘‘FASB’’) issued Accounting Standards Update (‘‘ASU’’)
increased to include the number of additional shares of common No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Test-
stock that would have been outstanding assuming the issuance of ing Goodwill for Impairment. ASU No. 2011-08 permits an entity to
all potentially dilutive shares, such as common stock to be issued first assess qualitative factors to determine whether it is more likely
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