Toro 2010 Annual Report Download - page 56

and distributors, Red Iron provides loans to the dealers and distrib-
GOODWILL AND OTHER INTANGIBLE
utors for the advances paid by Red Iron to the company.
The company owns 45 percent of Red Iron and TCFIF owns 5ASSETS
55 percent of Red Iron. The company accounts for its investment Goodwill – The changes in the net carrying amount of goodwill for
in Red Iron under the equity method of accounting. Red Iron is fiscal 2010 and 2009 were as follows:
managed through a management committee consisting of eight
persons, four of whom are designated by the company and four of Professional Residential
whom are designated by TCFIF. Each of the company and TCFIF Segment Segment Total
contributed a specified amount of the estimated cash required to Balance as of October 31, 2008 $75,456 $10,736 $86,192
enable Red Iron to purchase the company’s inventory financing Translation adjustment 58 157 215
receivables and to provide financial support for Red Iron’s inven- Balance as of October 31, 2009 $75,514 $10,893 $86,407
tory financing programs. Red Iron borrows the remaining requisite Translation and other adjustments (92) 85 (7)
estimated cash utilizing a $450,000 secured revolving credit facility Balance as of October 31, 2010 $75,422 $10,978 $86,400
established under a credit agreement between Red Iron and
The components of other intangible assets were as follows:
TCFIF. The company’s total investment in Red Iron as of Octo-
ber 31, 2010 and 2009 was $9,693 and $3,535, respectively. The
Estimated Gross
company has not guaranteed the outstanding indebtedness of Red
Life Carrying Accumulated
Iron. The company has agreed to repurchase products repos- October 31, 2010 (Years) Amount Amortization Net
sessed by Red Iron and the TCFIF Canadian affiliate, up to a
Patents 5-13 $ 8,703 $ (7,034) $ 1,669
maximum aggregate amount of $7,500 in a calendar year. In addi- Non-compete agreements 2-10 3,039 (1,910) 1,129
tion, the company has provided recourse to Red Iron for certain Customer-related 6-13 7,471 (2,061) 5,410
outstanding receivables, which amounted to a maximum amount of Developed technology 2-10 13,984 (4,511) 9,473
$731 and $4,529 as of October 31, 2010 and 2009, respectively. Other 800 (800) –
As of October 31, 2010 and 2009, Red Iron’s total assets were Total amortizable 33,997 (16,316) 17,681
$190,732 and $65,894, respectively and total liabilities were Non-amortizable – trade
$169,193 and $58,038, respectively. Red Iron’s net income for fis- name 5,281 – 5,281
cal 2010 was $5,850 and Red Iron’s net loss for fiscal 2009 was Total other intangible
$613. assets, net $39,278 $(16,316) $22,962
Estimated Gross
Life Carrying Accumulated
4OTHER INCOME (EXPENSE), NET
October 31, 2009 (Years) Amount Amortization Net
Other income (expense) is as follows: Patents 5-13 $ 8,654 $ (6,641) $ 2,013
Non-compete agreements 2-10 2,839 (1,517) 1,322
Fiscal years ended October 31 2010 2009 2008 Customer-related 10-13 6,549 (1,458) 5,091
Developed technology 2-10 12,799 (3,182) 9,617
Interest income $1,056 $ 898 $ 1,856 Other 800 (800) –
Gross finance charge revenue – 543 1,032
Retail financing revenue 779 1,716 2,717 Total amortizable 31,641 (13,598) 18,043
Foreign currency exchange rate gain (loss) 813 641 (5,041) Non-amortizable – trade
Equity income (losses) from investments 2,599 (136) (859) name 5,281 – 5,281
Litigation recovery (settlements), net 57 (6,811) 1,025
Total other intangible
Miscellaneous 1,811 1,318 1,483
assets, net $36,922 $(13,598) $23,324
Total other income (expense), net $7,115 $(1,831) $ 2,213
Amortization expense for intangible assets for the fiscal years
ended October 31, 2010, 2009, and 2008 was $2,903, $2,504, and
$1,938, respectively. Estimated amortization expense for the suc-
ceeding fiscal years is as follows: 2011, $2,852; 2012, $2,816;
2013, $2,623; 2014, $2,288; 2015, $2,115; and after 2015, $4,987.
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