Toro 2009 Annual Report Download - page 59

or all of the senior notes at any time at the greater of the full Shareholder rights plan. On June 14, 2008, the Rights Agree-
principal amount of the senior notes being redeemed or the pre- ment, dated as of May 20, 1998, as amended, between Toro and
sent value of the remaining scheduled payments of principal and Wells Fargo Bank, National Association, and the related preferred
interest discounted to the redemption date on a semi-annual basis share purchase rights, expired by their terms.
at the treasury rate plus 30 basis points, plus, in both cases, Treasury shares. As of October 31, 2009, the company had
accrued and unpaid interest. In the event of the occurrence of both 20,662,734 treasury shares at a cost of $764,015. As of Octo-
(i) a change of control of the company, and (ii) a downgrade of the ber 31, 2008, the company had 18,547,454 treasury shares at a
notes below an investment grade rating by both Moody’s Investors cost of $688,015.
Service, Inc. and Standard & Poor’s Ratings Services within a
specified period, the company would be required to make an offer
to purchase the senior notes at a price equal to 101% of the prin-
cipal amount of the senior notes plus accrued and unpaid interest 9INCOME TAXES
to the date of repurchase. A reconciliation of the statutory federal income tax rate to the com-
In connection with the issuance in June 1997 of $175,000 in pany’s consolidated effective tax rate is summarized as follows:
long-term debt securities, the company paid $23,688 to terminate
three forward-starting interest rate swap agreements with notional Fiscal years ended October 31 2009 2008 2007
amounts totaling $125,000. These swap agreements had been Statutory federal income tax rate 35.0% 35.0% 35.0%
entered into to reduce exposure to interest rate risk prior to the Increase (reduction) in income taxes resulting
issuance of the new long-term debt securities. As of the inception from:
Benefits from export incentives – – (0.1)
of one of the swap agreements, the company had received pay-
Domestic manufacturer’s deduction (0.8) (1.2) (0.5)
ments that were recorded as deferred income to be recognized as State and local income taxes, net of federal
an adjustment to interest expense over the term of the new debt income tax benefit 1.2 1.7 1.7
securities. As of the date the swaps were terminated, this deferred Effect of foreign source income 0.1 0.4 (1.0)
income totaled $18,710. The excess termination fees over the Other, net (1.1) (1.9) (1.9)
deferred income recorded has been deferred and is being recog- Consolidated effective tax rate 34.4% 34.0% 33.2%
nized as an adjustment to interest expense over the term of the
debt securities issued. Components of the provision for income taxes were as follows:
Principal payments required on long-term debt in each of the
Fiscal years ended October 31 2009 2008 2007
next five fiscal years ending October 31 are as follows: 2010,
$3,765; 2011, $1,750; 2012, $0; 2013, $0; 2014, $0; and after Provision for income taxes:
2014, $225,000. Current –
Federal $23,954 $57,211 $59,941
State 1,951 4,456 5,501
Non-U.S. 7,235 1,488 5,812
8STOCKHOLDERS’ EQUITY Current provision $33,140 $63,155 $71,254
Deferred –
Stock repurchase program. The company’s Board of Directors Federal $ 1,948 $ (3,229) $ 1,837
authorized the repurchase of shares of the company’s common State (110) 383 137
stock as follows: Non-U.S. (2,027) 1,329 (2,437)
•
In July 2006, 3,000,000 shares Deferred benefit (189) (1,517) (463)
•
In May 2007, 3,000,000 shares Total provision for income taxes $32,951 $61,638 $70,791
•
In May 2008, 4,000,000 shares
•
In July 2009, 5,000,000 shares
During fiscal 2009, 2008, and 2007, the company paid $115,283,
$110,355, and $182,843 to repurchase an aggregate of 3,316,536,
2,809,927 shares, and 3,342,729 shares, respectively. As of Octo-
ber 31, 2009, 4,007,712 shares remained authorized for
repurchase.
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