Toro 2012 Annual Report Download - page 40
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Please find page 40 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.Cash Flows From Investing Activities. Capital expenditures due May 1, 2037, and $1.9 million of other long-term notes issued
and acquisitions are our primary uses of capital resources. These in connection with acquisitions that will be paid during fiscal 2013.
investments are intended to enable sales growth for expanding Our revolving credit facility contains standard covenants, includ-
markets and in new markets, help us to meet product demand, ing, without limitation, financial covenants, such as the mainte-
and increase our manufacturing efficiencies and capacity. Cash nance of minimum interest coverage and maximum debt to earn-
used in investing activities was down 31.7 percent in fiscal 2012 ings ratios; and negative covenants, which among other things,
compared to fiscal 2011 due mainly to lower levels of purchases of limit loans and investments, disposition of assets, consolidations
property, plant, and equipment and cash used for acquisitions. and mergers, transactions with affiliates, restricted payments, con-
tingent obligations, liens and other matters customarily restricted in
Cash Flows From Financing Activities. Cash used in financing such agreements. Most of these restrictions are subject to certain
activities decreased by 33.6 percent in fiscal 2012 compared to minimum thresholds and exceptions. Under the revolving credit
fiscal 2011. This decrease was primarily attributable to lower facility, we are not limited to payments of cash dividends and stock
amounts of cash utilized to repurchase our common stock in fiscal repurchases as long as our debt to EBITDA ratio from the previous
2012 compared to fiscal 2011, plus an increase in proceeds from quarter compliance certificate is less than or equal to 2.75; how-
exercises of stock options and tax benefits from stock-based ever, we are limited to $50 million per fiscal year if our debt to
awards. EBITDA ratio from the previous quarter compliance certificate is
greater than 2.75. As of October 31, 2012, we are not limited to
Credit Lines and Other Capital Resources payments of cash dividends and stock repurchases as our debt to
Our businesses are seasonal, with accounts receivable balances EBITDA ratio was below 2.75. We were in compliance with all
historically increasing between January and April, as a result of covenants related to our credit agreement for our revolving credit
typically higher sales volumes and extended payment terms made facility as of October 31, 2012, and we expect to be in compliance
available to our customers, and typically decreasing between May with all covenants during fiscal 2013. If we were out of compliance
and December when payments are received. The seasonality of with any debt covenant required by this credit agreement following
production and shipments causes our working capital requirements the applicable cure period, the banks could terminate their commit-
to fluctuate during the year. Seasonal cash requirements are ments unless we could negotiate a covenant waiver from the
financed from operations, cash on hand, and with short-term banks. In addition, our long-term senior notes and debentures
financing arrangements, including our $150.0 million unsecured could become due and payable if we were unable to obtain a
senior four-year revolving credit facility that expires in July 2015. covenant waiver or refinance our short-term debt under our credit
Included in our $150.0 million revolving credit facility is a sublimit agreement. If our credit rating falls below investment grade and/or
for standby letters of credit and a sublimit for swingline loans. At our average debt to EBITDA ratio rises above 2.00, the basis point
our election, and with the approval of the named borrowers on the spread over LIBOR (or other rates quoted by the Administrative
revolving credit facility, the aggregate maximum principal amount Agent, Bank of America, N.A.) we currently pay on our outstanding
available under the facility may be increased by an amount up to short-term debt under the credit agreement would increase. How-
$100.0 million in aggregate. Funds are available under the revolv- ever, the credit commitment could not be cancelled by the banks
ing credit facility for working capital, capital expenditures, and other based solely on a ratings downgrade. Our debt rating for long-term
lawful purposes, including, but not limited to, acquisitions and stock unsecured senior, non-credit enhanced debt was raised to BBB
repurchases. Interest expense on this credit line is determined from BBB- by Standard and Poor’s Ratings Group on April 30,
based on a LIBOR rate (or other rates quoted by the Administra- 2012, and unchanged during fiscal 2012 by Moody’s Investors Ser-
tive Agent, Bank of America, N.A.) plus a basis point spread vice at Baa3.
defined in the credit agreement. In addition, our non-U.S. opera-
tions maintain unsecured short-term lines of credit in the aggregate Share Repurchase Plan
amount of approximately $13.5 million. These facilities bear inter- During fiscal 2012, we continued repurchasing shares of our com-
est at various rates depending on the rates in their respective mon stock in the open market, thereby reducing our shares out-
countries of operation. As of October 31, 2012, we had no out- standing. In addition, our repurchase programs provided shares for
standing short-term debt under these lines of credit. As of Octo- use in connection with our equity compensation programs. As of
ber 31, 2012, we had $12.8 million of outstanding letters of credit October 31, 2012, 1,474,677 shares remained available for repur-
and $150.7 million of unutilized availability under our credit agree- chase under our Board authorization.
ments. Additionally, as of October 31, 2012, we had $225.3 million On December 11, 2012, our Board of Directors authorized the
outstanding in long-term debt that includes $100 million in aggre- repurchase of up to an additional 5 million shares of our common
gate principal amount of 7.8% debentures due June 15, 2027, stock in open market or privately negotiated transactions. This
$125 million in aggregate principal amount of 6.625% senior notes
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