Toro 2011 Annual Report Download - page 67

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fair value on the balance sheet, recognizing future changes in the the change in fair value of specific assets and liabilities on the
fair value in other income (expense), net. For the fiscal years consolidated balance sheet. These contracts are not designated as
ended October 31, 2011 and 2010, there were no gains or losses hedging instruments. Accordingly, changes in the fair value of
on contracts reclassified into earnings as a result of the discontinu- hedges of recorded balance sheet positions, such as cash, receiv-
ance of cash flow hedges. As of October 31, 2011, the notional ables, payables, intercompany notes, and other various contractual
amount outstanding of forward contracts designated as cash flow claims to pay or receive foreign currencies other than the func-
hedges was $122,840. tional currency, are recognized immediately in other income
(expense), net, on the consolidated statements of earnings
Derivatives Not Designated as Hedging Instruments. The together with the transaction gain or loss from the hedged balance
company also enters into foreign currency contracts that include sheet position.
forward currency contracts and cross currency swaps to mitigate
The following table presents the fair value of the company’s derivatives and consolidated balance sheet location.
Asset Derivatives Liability Derivatives
October 31, 2011 October 31, 2010 October 31, 2011 October 31, 2010
Balance Balance Balance Balance
Sheet Fair Sheet Fair Sheet Fair Sheet Fair
Location Value Location Value Location Value Location Value
Derivatives Designated as Hedging Instruments
Foreign exchange contracts Prepaid expenses $–Prepaid expenses $ – Accrued liabilities $ 563 Accrued liabilities $3,886
Derivatives Not Designated as Hedging Instruments
Foreign exchange contracts Prepaid expenses –Prepaid expenses – Accrued liabilities 2,587 Accrued liabilities 2,626
Total Derivatives $– $– $3,150 $6,512
The following table presents the impact of derivative instruments on the consolidated statements of earnings for the company’s derivatives
designated as cash flow hedging instruments for the fiscal years ended October 31, 2011 and 2010, respectively.
Gain (Loss) Recognized
Gain (Loss) Location of Gain (Loss) Recognized in in Income on Derivatives
Recognized in OCI on Location of Gain (Loss) Reclassified Gain (Loss) Reclassified Income on Derivatives (Ineffective (Ineffective Portion and
Derivatives from AOCL into Income from AOCL into Income Portion and excluded from Excluded from
(Effective Portion) (Effective Portion) (Effective Portion) Effectiveness Testing) Effectiveness Testing)
October 31, October 31, October 31, October 31, October 31, October 31,
Fiscal years ended 2011 2010 2011 2010 2011 2010
Foreign exchange contracts $ 4,001 $(6,177) Net sales $(6,254) $ (1,294) Other income (expense), net $(1,049) $(55)
Foreign exchange contracts (1,335) 976 Cost of sales 919 272
Total $ 2,666 $(5,201) $(5,335) $ (1,022)
As of October 31, 2011, the company anticipates to reclassify During the second quarter of fiscal 2007, the company entered
approximately $169 of losses from AOCL to earnings during the into three treasury lock agreements based on a 30-year U.S. Trea-
next twelve months. sury security with a principal balance of $30,000 for two of the
The following table presents the impact of derivative instruments agreements and $40,000 for the third agreement. These treasury
on the consolidated statements of earnings for the company’s lock agreements provided for a single payment at maturity, which
derivatives not designated as hedging instruments. was April 23, 2007, based on the change in value of the reference
treasury security. These agreements were designated as cash flow
Gain (Loss) Recognized hedges and resulted in a net settlement of $182, which was
in Net Earnings recorded in accumulated other comprehensive loss, and will be
Fiscal Year Ended amortized to interest expense over the 30-year term of the senior
Location of Gain (Loss) October 31, October 31, notes. The unrecognized loss portion of the fair value of these
Recognized in Net Earnings 2011 2010 agreements in accumulated other comprehensive loss as of Octo-
Foreign exchange contracts Other income (expense), net $(6,867) $1,619 ber 31, 2011 and 2010 was $155 and $161, respectively.
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