Toro 2014 Annual Report Download - page 60

party financing sources to finance distributor and dealer inventory Reconciliations of basic and diluted weighted-average shares of
purchases. These financing arrangements are used by the com- common stock outstanding are as follows:
pany as a marketing tool to assist customers to buy inventory. The
BASIC
financing costs for distributor and dealer inventories were $21,080,
(Shares in thousands)
$19,729, and $19,492 for the fiscal years ended October 31, 2014,
Fiscal years ended October 31 2014 2013 2012
2013, and 2012, respectively.
Weighted-average number of shares of
common stock 56,346 57,898 59,440
Advertising Assumed issuance of contingent shares 13 24 6
General advertising expenditures are expensed the first time
Weighted-average number of shares of
advertising takes place. Production costs associated with advertis- common stock and assumed issuance of
ing are expensed in the period incurred. Cooperative advertising contingent shares 56,359 57,922 59,446
represents expenditures for shared advertising costs that the com- DILUTED
pany reimburses to customers and is classified as a component of
(Shares in thousands)
selling, general, and administrative expense. These obligations are Fiscal years ended October 31 2014 2013 2012
accrued and expensed when the related revenues are recognized
Weighted-average number of shares of
in accordance with the programs established for various product common stock and assumed issuance of
lines. Advertising costs were $43,590, $48,071, and $46,947 for contingent shares 56,359 57,922 59,446
the fiscal years ended October 31, 2014, 2013, and 2012, Effect of dilutive securities 1,269 1,183 1,172
respectively. Weighted-average number of shares of
common stock, assumed issuance of
Stock-Based Compensation contingent and restricted shares, and effect
The company’s stock-based compensation awards are generally of dilutive securities 57,628 59,105 60,618
granted to executive officers, other employees, and non-employee
Incremental shares from options, restricted stock, and restricted
members of the company’s Board of Directors, and include per-
stock units are computed by the treasury stock method. Options,
formance share awards that are contingent on the achievement of
restricted stock, and restricted stock units of 259,925, 182,868,
performance goals of the company, non-qualified stock options,
and 33,427 during fiscal 2014, 2013, and 2012, respectively, were
restricted stock units, and restricted stock awards. Compensation
excluded from the computation of diluted net earnings per share
expense equal to the grant date fair value is recognized for these
because they were anti-dilutive.
awards over the vesting period and is classified in selling, general
and administrative expense. See Note 10 for additional information Cash Flow Presentation
regarding stock-based compensation plans.
The consolidated statements of cash flows are prepared using the
indirect method, which reconciles net earnings to cash flow from
Net Earnings Per Share operating activities. The necessary adjustments include the
Basic net earnings per share is calculated using net earnings avail-
removal of timing differences between the occurrence of operating
able to common stockholders divided by the weighted-average
receipts and payments and their recognition in net earnings. The
number of shares of common stock outstanding during the year
adjustments also remove from operating activities cash flows aris-
plus the assumed issuance of contingent shares. Diluted net earn-
ing from investing and financing activities, which are presented
ings per share is similar to basic net earnings per share except
separately from operating activities. Cash flows from foreign cur-
that the weighted-average number of shares of common stock out-
rency transactions and operations are translated at an average
standing plus the assumed issuance of contingent shares is
exchange rate for the period. Cash paid for acquisitions is classi-
increased to include the number of additional shares of common
fied as investing activities.
stock that would have been outstanding assuming the issuance of
all potentially dilutive shares, such as common stock to be issued
upon exercise of options, contingently issuable shares, and
restricted common stock and units.
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