Toro 2012 Annual Report Download - page 61
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Please find page 61 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.based on a LIBOR rate (or other rates quoted by the Administra- issue costs totaling $1,524 will be amortized over the life of the
tive Agent, Bank of America, N.A.) plus a basis point spread notes. Although the coupon rate of the senior notes is 6.625%, the
defined in the credit agreement. The company had no outstanding effective interest rate is 6.741% after taking into account the issu-
short-term debt as of October 31, 2012 and 2011 under this line of ance discount. Interest on the senior notes is payable
credit. The company’s non-U.S. operations also maintain semi-annually on May 1 and November 1 of each year. The senior
unsecured short-term lines of credit in the aggregate amount of notes are unsecured senior obligations of the company and rank
$13,554. These facilities bear interest at various rates depending equally with the company’s other unsecured and unsubordinated
on the rates in their respective countries of operation. The com- indebtedness from time to time outstanding. The indentures under
pany had no outstanding short-term debt as of October 31, 2012 which the senior notes were issued contain customary covenants
and 2011 under these lines of credit. Additionally, the company and event of default provisions. The company may redeem some
had $41 in short-term debt for certain receivables the company or all of the senior notes at any time at the greater of the full
had provided recourse with Red Iron as of October 31, 2011. principal amount of the senior notes being redeemed or the pre-
The revolving credit facility contains standard covenants, includ- sent value of the remaining scheduled payments of principal and
ing, without limitation, financial covenants, such as the mainte- interest discounted to the redemption date on a semi-annual basis
nance of minimum interest coverage and maximum debt to earn- at the treasury rate plus 30 basis points, plus, in both cases,
ings ratios; and negative covenants, which among other things, accrued and unpaid interest. In the event of the occurrence of both
limit loans and investments, disposition of assets, consolidations (i) a change of control of the company, and (ii) a downgrade of the
and mergers, transactions with affiliates, restricted payments, con- notes below an investment grade rating by both Moody’s Investors
tingent obligations, liens and other matters customarily restricted in Service, Inc. and Standard & Poor’s Ratings Services within a
such agreements. Most of these restrictions are subject to certain specified period, the company would be required to make an offer
minimum thresholds and exceptions. Under the revolving credit to purchase the senior notes at a price equal to 101% of the prin-
facility, the company is not limited to payments of cash dividends cipal amount of the senior notes plus accrued and unpaid interest
and stock repurchases as long as the debt to earnings before to the date of repurchase.
interest, tax, depreciation, and amortization (‘‘EBITDA’’) ratio from In connection with the issuance in June 1997 of $175,000 in
the previous quarter compliance certificate is less than or equal to long-term debt securities, the company paid $23,688 to terminate
2.75; however, the company is limited to $50,000 per fiscal year if three forward-starting interest rate swap agreements with notional
the debt to EBITDA ratio from the previous quarter compliance amounts totaling $125,000. These swap agreements had been
certificate is greater than 2.75. As of October 31, 2012, the com- entered into to reduce exposure to interest rate risk prior to the
pany was not limited to payments of cash dividends and stock issuance of the new long-term debt securities. As of the inception
repurchases as its debt to EBITDA ratio was below 2.75. The com- of one of the swap agreements, the company had received pay-
pany was in compliance with all covenants related to the lines of ments that were recorded as deferred income to be recognized as
credit described above as of October 31, 2012 and 2011. an adjustment to interest expense over the term of the new debt
securities. As of the date the swaps were terminated, this deferred
income totaled $18,710. The excess termination fees over the
deferred income recorded has been deferred and is being recog-
7LONG-TERM DEBT nized as an adjustment to interest expense over the term of the
debt securities issued. As of October 31, 2012, the company had
A summary of long-term debt as of October 31 is as follows:
$2,310 remaining in other assets for the excess termination fees
over deferred income.
2012 2011
Principal payments required on long-term debt in each of the
7.800% Debentures, due June 15, 2027 $100,000 $100,000
6.625% Senior Notes, due May 1, 2037 123,482 123,420 next five fiscal years ending October 31 are as follows: 2013,
Other 1,858 3,736 $1,858; 2014, $0; 2015, $0; 2016, $0; 2017, $0; and after 2017,
Total long-term debt 225,340 227,156 $225,000.
Less current portion 1,858 1,978
Long-term debt, less current portion $223,482 $225,178
On April 26, 2007, the company issued $125,000 in aggregate 8STOCKHOLDERS’ EQUITY
principal amount of 6.625% senior notes due May 1, 2037. The Stock Split. On May 24, 2012, the company announced that its
senior notes were priced at 98.513% of par value, and the result- Board of Directors declared a two-for-one stock split of the com-
ing discount of $1,859 associated with the issuance of these senior pany’s common stock, effected in the form of a 100 percent stock
notes is being amortized over the term of the notes using the dividend. The stock split was distributed or paid on June 29, 2012,
effective interest rate method. The underwriting fee and direct debt to shareholders of record as of June 15, 2012. As a result of this
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