Toro 2012 Annual Report Download - page 16
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Please find page 16 of the 2012 Toro annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.cause us to incur significant expenses to achieve or maintain com- We also have agreements with third party financing companies
pliance, may require us to modify our products, may adversely to provide financing programs under both generic and private label
affect the price of or demand for some of our products, and may programs in the U.S. and Canada. These programs, offered pri-
ultimately affect the way we conduct our operations. Failure to marily to Toro and Exmark dealers, provide end-user customers
comply with these current or future regulations could lead to fines revolving and installment lines of credit for Toro and Exmark prod-
and other penalties, including restrictions on the importation of our ucts, parts, and services.
products into, or the sale of our products in, one or more jurisdic- Distributor Financing. Occasionally, we enter into long-term
tions until compliance is achieved. loan agreements with some distributors. These transactions are
We are also involved in the evaluation and clean-up of a limited used for expansion of the distributors’ businesses, acquisitions,
number of properties currently and previously owned. We do not refinancing working capital agreements, or ownership transitions.
expect that these matters will have a material adverse effect on As of October 31, 2012, we had an outstanding note receivable
our consolidated financial position or results of operations. from one distribution company in the amount of $1.1 million.
Customer Financing Employees
Wholesale Financing. In fiscal 2009, we established Red Iron During fiscal 2012, we employed an average of 5,066 employees.
Acceptance, LLC (‘‘Red Iron’’), as a joint venture with TCF Inven- The total number of employees as of October 31, 2012 was 5,055.
tory Finance, Inc. (‘‘TCFIF’’), a subsidiary of TCF National Bank. We consider our employee relations to be good. Three collective
The purpose of Red Iron is to provide inventory financing, including bargaining agreements, each expiring in October 2013, May 2014,
floor plan and open account receivable financing, to distributors and October 2014, cover approximately 18 percent of our total
and dealers of our products in the U.S. and to select distributors of employees. We also retain temporary and seasonal workers,
our products in Canada. Under a separate arrangement, TCF mainly at our distribution centers and manufacturing facilities, as
Commercial Finance Canada, Inc. (‘‘TCFCFC’’) provides inventory well as part-time workers, independent contractors, and
financing to dealers of our products in Canada. Under these consultants.
financing arrangements, down payments are not required and,
depending on the finance program for each product line, finance Available Information
charges are incurred by us, shared between us and the distributor We are a U.S. public reporting company under the Securities
and/or the dealer, or paid by the distributor or dealer. Red Iron Exchange Act of 1934, as amended (‘‘Exchange Act’’), and file
retains a security interest in the distributors’ and dealers’ financed reports, proxy statements, and other information with the Securities
inventories, and those inventories are monitored regularly. Floor and Exchange Commission (‘‘SEC’’). Copies of these reports,
plan terms to the distributors and dealers require payment as the proxy statements, and other information can be inspected and cop-
equipment, which secures the indebtedness, is sold to customers, ied at the SEC’s Public Reference Room at 100 F Street N.E.,
or when payment terms become due, whichever occurs first. Rates Washington, D.C. 20549. You may obtain information on the oper-
are generally indexed to LIBOR plus a fixed percentage that differs ation of the Public Reference Room by calling the SEC at
based on whether the financing is for a distributor or dealer. Rates 1-800-SEC-0330. Because we make filings to the SEC electroni-
may also vary based on the product that is financed. cally, you may also access this information from the SEC’s home
We continue to provide financing in the form of open account page on the Internet at http://www.sec.gov.
terms directly to home centers and mass retailers; general line We make available, free of charge on our web site
irrigation dealers; international distributors and dealers, other than www.thetorocompany.com (select the ‘‘Investor Information’’ link
the Canadian distributors and dealers to whom Red Iron provides and then the ‘‘Financials’’ link), our Annual Reports on Form 10-K,
financing arrangements; government customers; and rental compa- Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
nies. Some independent international dealers continue to finance Proxy Statements on Schedule 14A, Section 16 reports, amend-
their products with third party sources. ments to those reports, and other documents filed or furnished
pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as
End-User Financing. We have agreements with third party
reasonably practicable after we electronically file such material
financing companies to provide lease-financing options to golf
with, or furnish it to, the SEC. The information contained on our
course and sports fields and grounds equipment customers in the
web site or connected to our web site is not incorporated by refer-
U.S. The purpose of these agreements is to increase sales by
ence into this Annual Report on Form 10-K and should not be
giving buyers of our products alternative financing options when
considered part of this report.
purchasing our products.
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