Toro 2011 Annual Report Download - page 59

an adjustment to interest expense over the term of the new debt
securities. As of the date the swaps were terminated, this deferred
7LONG-TERM DEBT income totaled $18,710. The excess termination fees over the
deferred income recorded has been deferred and is being recog-
A summary of long-term debt as of October 31 is as follows: nized as an adjustment to interest expense over the term of the
debt securities issued.
2011 2010 Principal payments required on long-term debt in each of the
7.800% Debentures, due June 15, 2027 $100,000 $100,000 next five fiscal years ending October 31 are as follows: 2012,
6.625% Senior Notes, due May 1, 2037 123,420 123,358 $1,978; 2013, $1,758; 2014, $0; 2015, $0; 2016, $0; and after
Other 3,736 2,190
2016, $225,000.
Total long-term debt 227,156 225,548
Less current portion 1,978 1,970
Long-term debt, less current portion $225,178 $223,578 8STOCKHOLDERS’ EQUITY
On April 26, 2007, the company issued $125,000 in aggregate
principal amount of 6.625% senior notes due May 1, 2037. The Stock Repurchase Program. The company’s Board of Directors
senior notes were priced at 98.513% of par value, and the result- authorized the repurchase of shares of the company’s common
ing discount of $1,859 associated with the issuance of these senior stock as follows:
notes is being amortized over the term of the notes using the
•
In May 2008, 4,000,000 shares
effective interest rate method. The underwriting fee and direct debt
•
In July 2009, 5,000,000 shares
issue costs totaling $1,524 will be amortized over the life of the
•
In December 2010, 3,000,000 shares
notes. Although the coupon rate of the senior notes is 6.625%, the
During fiscal 2011, 2010, and 2009, the company paid $129,955,
effective interest rate is 6.741% after taking into account the issu-
$135,777, and $115,283 to repurchase an aggregate of 2,296,380,
ance discount. Interest on the senior notes is payable
2,678,474 shares, and 3,316,536 shares, respectively. As of Octo-
semi-annually on May 1 and November 1 of each year. The senior
ber 31, 2011, 2,032,858 shares remained authorized for
notes are unsecured senior obligations of the company and rank
repurchase.
equally with the company’s other unsecured and unsubordinated
indebtedness from time to time outstanding. The indentures under Treasury Shares. As of October 31, 2011, the company had
which the senior notes were issued contain customary covenants 24,429,125 treasury shares at a cost of $984,583. As of Octo-
and event of default provisions. The company may redeem some ber 31, 2010, the company had 22,637,278 treasury shares at a
or all of the senior notes at any time at the greater of the full cost of $876,620.
principal amount of the senior notes being redeemed or the pre- On November 30, 2011, the company’s Board of Directors
sent value of the remaining scheduled payments of principal and authorized the retirement of 15,000,000 treasury shares.
interest discounted to the redemption date on a semi-annual basis
at the treasury rate plus 30 basis points, plus, in both cases,
accrued and unpaid interest. In the event of the occurrence of both
(i) a change of control of the company, and (ii) a downgrade of the 9INCOME TAXES
notes below an investment grade rating by both Moody’s Investors A reconciliation of the statutory federal income tax rate to the com-
Service, Inc. and Standard & Poor’s Ratings Services within a pany’s consolidated effective tax rate is summarized as follows:
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- Fiscal years ended October 31 2011 2010 2009
cipal amount of the senior notes plus accrued and unpaid interest Statutory federal income tax rate 35.0% 35.0% 35.0%
to the date of repurchase. Increase (reduction) in income taxes resulting
In connection with the issuance in June 1997 of $175,000 in from:
long-term debt securities, the company paid $23,688 to terminate Domestic manufacturer’s deduction (1.8) (1.1) (0.8)
State and local income taxes, net of federal
three forward-starting interest rate swap agreements with notional
income tax benefit 1.4 1.4 1.2
amounts totaling $125,000. These swap agreements had been Effect of foreign source income 0.2 0.2 0.1
entered into to reduce exposure to interest rate risk prior to the Domestic research tax credit (2.4) (0.2) (2.1)
issuance of the new long-term debt securities. As of the inception Other, net 0.3 (1.3) 1.0
of one of the swap agreements, the company had received pay- Consolidated effective tax rate 32.7% 34.0% 34.4%
ments that were recorded as deferred income to be recognized as
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