Toro 2010 Annual Report Download - page 58

During fiscal 2010, 2009, and 2008, the company paid $135,777, As of October 31, 2010, the company had net operating loss
$115,283, and $110,355 to repurchase an aggregate of 2,678,474, carryforwards of approximately $5,988 in foreign jurisdictions with
3,316,536 shares, and 2,809,927 shares, respectively. As of Octo- unlimited expiration.
ber 31, 2010, 1,329,238 shares remained authorized for Earnings before income taxes were as follows:
repurchase.
On December 1, 2010, the company’s Board of Directors autho- Fiscal years ended October 31 2010 2009 2008
rized the repurchase of up to an additional 3,000,000 shares of its Earnings before income taxes:
common stock in open-market or privately negotiated transactions. U.S. $127,508 $83,357 $175,172
Non-U.S. 13,760 12,431 6,117
This repurchase authorization has no expiration date but may be
terminated by the company’s Board of Directors at any time. Total $141,268 $95,788 $181,289
During the fiscal years ended October 31, 2010, 2009, and
Shareholder rights plan. On June 14, 2008, the Rights Agree-
2008, respectively, $3,397, $7,403, and $3,522 was added to
ment, dated as of May 20, 1998, as amended, between the com-
stockholders’ equity reflecting the permanent book to tax difference
pany and Wells Fargo Bank, National Association, and the related
in accounting for tax benefits related to employee stock-based
preferred share purchase rights, expired by their terms.
award transactions.
Treasury shares. As of October 31, 2010, the company had The tax effects of temporary differences that give rise to the net
22,637,278 treasury shares at a cost of $876,620. As of Octo- deferred income tax assets are presented below:
ber 31, 2009, the company had 20,662,734 treasury shares at a
cost of $764,015. October 31 2010 2009
Deferred tax assets (liabilities):
Allowance for doubtful accounts $ 1,865 $ 2,062
Inventory items 1,750 (1,837)
9INCOME TAXES Warranty reserves and other accruals 40,156 37,643
Employee benefits 16,159 17,081
A reconciliation of the statutory federal income tax rate to the com-
Depreciation (2,411) 168
pany’s consolidated effective tax rate is summarized as follows: Other 7,399 12,833
Deferred tax assets $64,918 $67,950
Fiscal years ended October 31 2010 2009 2008
Valuation allowance (4,538) (4,898)
Statutory federal income tax rate 35.0% 35.0% 35.0%
Net deferred tax assets $60,380 $63,052
Increase (reduction) in income taxes resulting
from: The valuation allowance as of October 31, 2010 and 2009 princi-
Domestic manufacturer’s deduction (1.1) (0.8) (1.2) pally applies to capital loss carryforwards and foreign net operating
State and local income taxes, net of federal loss carryforwards that are expected to expire prior to utilization.
income tax benefit 1.4 1.2 1.7
Effect of foreign source income 0.2 0.1 0.4 As of October 31, 2010, the company had approximately
Other, net (1.5) (1.1) (1.9) $44,624 of accumulated undistributed earnings from subsidiaries
Consolidated effective tax rate 34.0% 34.4% 34.0% outside the United States that are considered to be reinvested
indefinitely. No deferred tax liability has been provided for such
Components of the provision for income taxes were as follows: earnings.
A reconciliation of the beginning and ending amount of unrecog-
Fiscal years ended October 31 2010 2009 2008 nized tax benefits is as follows:
Provision for income taxes:
Current –
Balance as of October 31, 2009 $5,264
Federal $34,582 $23,954 $57,211
Increase as a result of tax positions
State 2,918 1,951 4,456
taken during a prior period 712
Non-U.S. 4,436 4,972 1,488
Increase as a result of tax positions
Current provision $41,936 $30,877 $63,155 taken during the current period 259
Deferred – Decrease relating to settlements with taxing authorities (386)
Federal $ 5,305 $ 1,948 $ (3,229) Reduction as a result of a lapse
State 198 (110) 383 of the applicable statute of limitations (97)
Non-U.S. 592 236 1,329 Balance as of October 31, 2010 $5,752
Deferred benefit 6,095 2,074 (1,517)
Total provision for income taxes $48,031 $32,951 $61,638
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