Toro 2011 Annual Report Download - page 58

GOODWILL AND OTHER INTANGIBLE
5ASSETS 6SHORT-TERM CAPITAL RESOURCES
Goodwill – The changes in the net carrying amount of goodwill for As of October 31, 2011, the company had a $150,000 unsecured
fiscal 2011 and 2010 were as follows: senior four-year revolving credit facility that expires in July 2015.
Included in this $150,000 revolving credit facility is a sublimit for
standby letters of credit and a sublimit for swingline loans. At the
Professional Residential
Segment Segment Total election of the company, and the approval of the named borrowers
on the revolving credit facility, the aggregate maximum principal
Balance as of October 31, 2009 $75,514 $10,893 $86,407
Translation and other adjustments (92) 85 (7) amount available under the facility may be increased by an amount
up to $100,000 in aggregate. Funds are available under the revolv-
Balance as of October 31, 2010 $75,422 $10,978 $86,400
Addition from acquisitions 5,765 – 5,765 ing credit facility for working capital, capital expenditures, and other
Translation and other adjustments (197) 52 (145) lawful purposes, including, but not limited to, acquisitions and stock
Balance as of October 31, 2011 $80,990 $11,030 $92,020 repurchases. Interest expense on this credit line is determined
based on a LIBOR rate (or other rates quoted by the Administra-
Other Intangible Assets – The components of other intangible tive Agent, Bank of America, N.A.) plus a basis point spread
assets were as follows: defined in the credit agreement. The company had no outstanding
short-term debt as of October 31, 2011 and 2010 under this line of
Estimated Gross credit. The company’s non-U.S. operations also maintain
Life Carrying Accumulated unsecured short-term lines of credit in the aggregate amount of
October 31, 2011 (Years) Amount Amortization Net $14,785. These facilities bear interest at various rates depending
Patents 5-13 $ 9,403 $ (7,505) $ 1,898 on the rates in their respective countries of operation. The com-
Non-compete agreements 2-10 6,250 (2,685) 3,565 pany had $0 and $776 of outstanding short-term debt as of Octo-
Customer-related 5-13 8,189 (2,857) 5,332 ber 31, 2011 and 2010, respectively, under these lines of credit.
Developed technology 2-10 25,236 (7,016) 18,220
Trade name 5 1,500 (250) 1,250 Additionally, the company had $41 and $258 in short-term debt for
Other 800 (800) – certain receivables the company had provided recourse with Red
Total amortizable 51,378 (21,113) 30,265 Iron as of October 31, 2011 and 2010, respectively.
The revolving credit facility contains standard covenants, includ-
Non-amortizable – trade
names 5,281 – 5,281 ing, without limitation, financial covenants, such as the mainte-
nance of minimum interest coverage and maximum debt to earn-
Total other intangible
assets, net $56,659 $(21,113) $35,546 ings ratios; and negative covenants, which among other things,
limit loans and investments, disposition of assets, consolidations
and mergers, transactions with affiliates, restricted payments, con-
Estimated Gross tingent obligations, liens and other matters customarily restricted in
Life Carrying Accumulated
such agreements. Most of these restrictions are subject to certain
October 31, 2010 (Years) Amount Amortization Net
minimum thresholds and exceptions. Under the revolving credit
Patents 5-13 $ 8,703 $ (7,034) $ 1,669
facility, the company is not limited to payments of cash dividends
Non-compete Agreements 2-10 3,039 (1,910) 1,129
Customer-related 6-13 7,471 (2,061) 5,410 and stock repurchases as long as the debt to earnings before
Developed Technology 2-10 13,984 (4,511) 9,473 interest, tax, depreciation, and amortization (‘‘EBITDA’’) ratio from
Other 800 (800) – the previous quarter compliance certificate is less than or equal to
Total amortizable 33,997 (16,316) 17,681 2.75; however, the company is limited to $50,000 per fiscal year if
Non-amortizable – trade the debt to EBITDA ratio from the previous quarter compliance
names 5,281 – 5,281 certificate is greater than 2.75. As of October 31, 2011, the com-
Total other intangible pany was not limited to payments of cash dividends and stock
assets, net $39,278 $(16,316) $22,962 repurchases as its debt to EBITDA ratio was below 2.75. The com-
pany was in compliance with all covenants related to the lines of
Amortization expense for intangible assets for the fiscal years
credit described above as of October 31, 2011 and 2010.
ended October 31, 2011, 2010, and 2009 was $4,967, $2,903, and
$2,504, respectively. Estimated amortization expense for the suc-
ceeding fiscal years is as follows: 2012, $5,504; 2013, $5,311;
2014, $4,976; 2015, $4,761; 2016, $4,233; and after 2016, $5,480.
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