Toro 2015 Annual Report Download - page 43

letters of credit and $147.2 million of unutilized availability under Capital Structure
our credit agreements. The following table details the components of our total capitaliza-
Additionally, as of October 31, 2015, we had $378.0 million out- tion and debt-to-capitalization ratio.
standing in long-term debt that includes $100 million in aggregate
principal amount of 7.8% debentures due June 15, 2027, (Dollars in millions)
$125.0 million in aggregate principal amount of 6.625% senior October 31 2015 2014
notes due May 1, 2037, $30.0 million in aggregate principal Short-term debt $ 0.2 $ 20.8
amount due to the former owners of the BOSS business, and Long-term debt, including current portion 378.0 354.0
Stockholders’ equity 462.2 408.7
$123.5 million in an outstanding term loan. The term loan bears
Debt-to-capitalization ratio 45.0% 47.8%
interest based on a LIBOR rate (or other rates quoted by the
Administrative Agent, Bank of America, N.A.) plus a basis point Our debt-to-capitalization ratio decreased in fiscal 2015 com-
spread defined in the credit agreement. The term loan can be pared to fiscal 2014 mainly due to an increase in stockholders’
repaid in part or in full at any time without penalty, but in any event equity from higher net earnings partially offset by an increase in
must be paid in full by October 2019. dividends paid and repurchases of our common stock in fiscal
Our revolving and term loan credit facility contains standard cov- 2015 as compared to fiscal 2014.
enants, including, without limitation, financial covenants, such as
the maintenance of minimum interest coverage and maximum debt Cash Dividends
to earnings ratios; and negative covenants, which among other Each quarter in fiscal 2015, our Board of Directors declared a cash
things, limit loans and investments, disposition of assets, consoli- dividend of $0.25 per share, which was a 25 percent increase over
dations and mergers, transactions with affiliates, restricted pay- our cash dividend of $0.20 per share paid each quarter in fiscal
ments, contingent obligations, liens, and other matters customarily 2014. As announced on December 3, 2015, our Board of Directors
restricted in such agreements. Most of these restrictions are sub- increased our fiscal 2016 first quarter cash dividend by 20 percent
ject to certain minimum thresholds and exceptions. Under the to $0.30 per share from the quarterly cash dividend paid in the first
revolving credit facility, we are not limited in the amount for pay- quarter of fiscal 2015.
ments of cash dividends and stock repurchases as long as our
debt to EBITDA ratio from the previous quarter compliance certifi- Share Repurchase Plan
cate is less than or equal to 3.25, provided that immediately after During fiscal 2015, we continued repurchasing shares of our com-
giving effect of any such proposed action, no default or event of mon stock in the open market, thereby reducing our shares out-
default would exist. As of October 31, 2015, we were not limited in standing. In addition, our repurchase program provided shares for
the amount for payments of cash dividends and stock repurchases. use in connection with our equity compensation plans. As of Octo-
We were in compliance with all covenants related to our credit ber 31, 2015, 1,159,314 shares remained available for repurchase
agreement for our revolving credit facility as of October 31, 2015, under our Board authorization. We expect to continue repurchasing
and we expect to be in compliance with all covenants during fiscal shares of our common stock in fiscal 2016, depending upon mar-
2016. If we were out of compliance with any debt covenant ket conditions.
required by this credit agreement following the applicable cure As announced on December 3, 2015, our Board of Directors
period, the banks could terminate their commitments unless we authorized the repurchase of up to an additional 4,000,000 shares
could negotiate a covenant waiver from the banks. In addition, our of our common stock in open-market or in privately negotiated
long-term senior notes, debentures, term loan, and any amounts transactions. This repurchase program has no expiration date but
outstanding under the revolving credit facility could become due may be terminated by the Board at any time.
and payable if we were unable to obtain a covenant waiver or The following table provides information with respect to repur-
refinance our short-term debt under our credit agreement. If our chases of our common stock during the past three fiscal years.
credit rating falls below investment grade and/or our average debt
to EBITDA ratio rises above 1.50, the basis point spread over (Dollars in millions, except per share data)
Fiscal years ended October 31 2015 2014 2013
LIBOR (or other rates quoted by the Administrative Agent, Bank of
America, N.A.) we currently pay on outstanding debt under the Shares of common stock purchased
1
1,561,179 1,622,569 2,131,615
Cost to repurchase common stock $ 106.0 $ 101.7 $ 98.8
credit agreement would increase. However, the credit commitment
Average price paid per share $ 67.87 $ 62.66 $ 46.37
could not be cancelled by the banks based solely on a ratings
1
Does not include shares of our common stock surrendered by employees to
downgrade. Our debt rating for long-term unsecured senior, non-
satisfy minimum tax withholding obligations upon vesting of restricted stock
credit enhanced debt was unchanged during fiscal 2015 by Stan- granted under our stock-based compensation plans.
dard and Poor’s Ratings Group at BBB and by Moody’s Investors
Service at Baa3.
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