Toro 2014 Annual Report Download - page 61

equipment line of vibratory plows, trenchers, and horizontal direc-
New Accounting Pronouncements Adopted
tional drills for the underground utilities market. On December 9,
In December 2011, the Financial Accounting Standards Board
2011, during the first quarter of fiscal 2012, the company com-
(‘‘FASB’’) issued Accounting Standards Update (‘‘ASU’’)
pleted the acquisition of certain assets and assumed certain liabili-
No. 2011-11, Disclosures about Offsetting Assets and Liabilities.
ties for a greens roller product line for the golf course market. The
ASU No. 2011-11 requires entities to disclose gross and net infor-
aggregate purchase price of these three acquisitions was $11,112,
mation about both instruments and transactions eligible for offset in
which included cash payments and issuance of long-term notes.
the statement of financial position and those subject to an agree-
The purchase price of all of these acquisitions was allocated to
ment similar to a master netting arrangement. This would include
the identifiable assets acquired and liabilities assumed based on
derivatives and other financial securities arrangements. The com-
estimates of their fair value, with the excess purchase price for
pany adopted this guidance in the first quarter of fiscal 2014, as
acquisitions recorded as goodwill. Additional purchase accounting
required. The adoption of this guidance did not have an impact on
disclosures have been omitted given the immateriality of these
the company’s consolidated financial statements.
acquisitions in relation to the company’s consolidated financial con-
In February 2013, the FASB issued ASU No. 2013-02, Reporting
dition and results of operations. See Note 5 for further details
of Amounts Reclassified Out of Accumulated Other Comprehensive
related to the acquired intangible assets.
Income. ASU No. 2013-02 requires entities to disclose, for items
On November 14, 2014, subsequent to the end of fiscal 2014,
reclassified out of accumulated other comprehensive income (loss)
the company acquired substantially all of the assets (excluding
and into net income in their entirety, the effect of the reclassifica-
accounts receivable) of the BOSS professional snow and ice
tion on each affected net income line item. ASU No. 2013-02 also
management business of privately held Northern Star Indus-
requires a cross reference to other required U.S. GAAP disclo-
tries, Inc. Based in Iron Mountain, Michigan, BOSS designs, manu-
sures for accumulated other comprehensive income (loss) reclas-
factures, and sells a broad line of snowplows, salt and sand
sification items that are not reclassified in their entirety into net
spreaders, and related parts and accessories for light and medium
income. The company adopted this guidance in its fiscal 2013
duty trucks, all terrain vehicles, utility terrain vehicles, skid steers,
fourth quarter. The adoption of this guidance did not have an
and front-end loaders. Through this acquisition, the company
impact on the company’s consolidated financial statements.
added another professional contractor brand; a portfolio of counter-
seasonal equipment; manufacturing and distribution facilities
located in Iron Mountain, Michigan; and a distribution network for
2ACQUISITIONS these products. Management believes that this acquisition posi-
tions the company to strengthen and grow its relationships with
On November 27, 2013, during the first quarter of fiscal 2014, the
professional contractors, municipalities, and other customers by
company completed the acquisition of certain assets of a quality
enabling the company to provide them with innovative, durable
value-priced line of outdoor lighting fixtures for the landscape light-
equipment and high-quality service they need each season.
ing market. The purchase price of this acquisition was $1,245,
This acquisition closed for $227,882, subject to certain
which included cash payments, issuance of a long-term note, and
post-closing adjustments, which included a cash payment of
an estimated contingent consideration.
$197,882 and issuance of a long-term note of $30,000. The com-
On September 30, 2013, during the fourth quarter of fiscal 2013,
pany funded the acquisition with cash on hand, a $130,000 term
the company completed the acquisition of certain assets and
loan, and an increase in short-term debt of $20,000 under the
assumed certain liabilities for a company in China that manufac-
company’s recently renewed revolving credit facility. During fiscal
tures water-efficient drip irrigation products, sprinklers, emitters,
year 2014, the company expensed $509 of acquisition related
and filters for agriculture, landscaping, and green house produc-
costs, which was recorded in selling, general, and administrative
tion. The net purchase price of this acquisition was $3,481, of
expense. The company also capitalized $373 of debt issuance
which $2,101 was paid in cash in fiscal 2013 and $1,380 was paid
costs in other assets related to the $130,000 term loan, which will
in cash in fiscal 2014.
be amortized over the term of the loan.
On April 25, 2012, during the second quarter of fiscal 2012, the
The purchase price of this acquisition will be accounted for as a
company completed the acquisition of certain assets for an equip-
business combination using the acquisition method, which requires
ment line of concrete and mortar mixers, material handlers, com-
that, among other things, assets acquired and liabilities assumed
paction equipment, and other concrete power tools for the rental
be recorded at their fair value as of the acquisition date using
and specialty construction market. On February 10, 2012, also dur-
independent appraisals and other analyses. The excess of the
ing the second quarter of fiscal 2012, the company completed the
consideration transferred over those fair values is recorded as
acquisition of certain assets and assumed certain liabilities for an
goodwill, and the company expects the goodwill to be deductible
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