Toro 2010 Annual Report Download - page 24

These provisions may limit our ability to conduct our business, periods, the banks could terminate their commitments unless we
take advantage of business opportunities, and respond to changing could negotiate a covenant waiver. The banks could condition such
business, market, and economic conditions. In addition, they may waiver on amendments to the terms of our credit arrangements
place us at a competitive disadvantage relative to other companies that may be unfavorable to us. In addition, our 6.625% senior
that may be subject to fewer, if any, restrictions or may otherwise notes and 7.800% debentures could become due and payable if
adversely affect our business. Transactions that we may view as we were unable to obtain a covenant waiver or refinance our
important opportunities, such as significant acquisitions, may be medium-term debt under our credit arrangements. If our credit rat-
subject to the consent of the lenders under our credit arrange- ing falls below investment grade, the interest rate we currently pay
ments, which consent may be withheld or granted subject to condi- on outstanding debt under our credit arrangements could increase,
tions specified at the time that may affect the attractiveness or which could adversely affect our operating results.
viability of the transaction.
Our business is subject to a number of other
The overall availability of credit continues to be limited. Although
miscellaneous risks that may adversely affect our
our $175 million revolving credit facility does not expire until Janu-
operating results, financial condition, or business.
ary 2012, market deterioration or other factors could jeopardize the
counterparty obligations of one or more of the banks participating Other miscellaneous risks that could affect our business include:
in our facility, which could have an adverse effect on our business
•
natural or man-made disasters or global pandemics, which may
if we are not able to replace such credit facility or find other result in shortages of raw materials and components, higher fuel
sources of liquidity on acceptable terms. In addition, we intend to costs, and increase in insurance premiums;
amend or replace our revolving credit facility prior to its expiration
•
financial viability of distributors and dealers, changes in distribu-
in January 2012. Our ability to amend or replace this facility and to tor ownership, changes in channel distribution of our products,
obtain any other additional financing we may need for acquisitions relationships with our distribution channel partners, our success
or other general business purposes, and the terms thereof, will in partnering with new dealers, and our customers’ ability to pay
depend on our operating and financial performance and is subject amounts owed to us;
to prevailing economic conditions and other factors, many of which
•
a decline in retail sales or financial difficulties of our distributors
are beyond our control. We may not ultimately be able to refi- or dealers, which could cause us to repurchase financed
nance, amend or otherwise replace our revolving credit facility at product;
all or on terms that we believe are commercially reasonable.
•
termination or material change to the terms of our end-user
financing arrangements, availability of credit for our customers,
If we are unable to comply with the terms of our credit including any delay in securing replacement credit sources, or
arrangements and indentures, especially the financial significant financed product repurchase requirements, which
covenants, our credit arrangements could be terminated could have a material adverse impact on our future operating
and our senior notes and debentures could become due results.
and payable.
•
continued threat of terrorist acts and war, which may result in
We cannot assure you that we will be able to comply with all of the heightened security and higher costs for import and export ship-
terms of our credit arrangements and indentures, especially the ments of components or finished goods, reduced leisure travel,
financial covenants. Our ability to comply with such terms depends and contraction of the U.S. and worldwide economies.
on the success of our business and our operating results. Various
risks, uncertainties, and events beyond our control could affect our ITEM 1B.UNRESOLVED STAFF COMMENTS
ability to comply with the terms of our credit arrangements and/or
None.
indentures. If we were out of compliance with any covenant
required by our credit arrangements following any applicable cure
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