Toro 2015 Annual Report Download - page 64

closing of the acquisition, the company hired David J. Brule II, who an adjustment to interest expense over the term of the new debt
is also a minority shareholder of Northern Star Industries, Inc., as securities. As of the date the swaps were terminated, this deferred
an executive officer of the company; see Note 15 for further details income totaled $18,710. The excess termination fees over the
regarding this related party transaction. deferred income recorded has been deferred and is being recog-
In October 2014, the company obtained a $130,000 term loan nized as an adjustment to interest expense over the term of the
with various banks, which was a part of the new credit agreement debt securities issued. As of October 31, 2015, the company had
that included the new revolving credit facility. Under the credit $1,838 remaining in other assets for the excess termination fees
agreement, the term loan bears interest based on a LIBOR rate (or over deferred income.
other rates quoted by the Administrative Agent, Bank of America, Principal payments required on long-term debt in each of the
N.A.) plus a basis point spread defined in the credit agreement. next five fiscal years ending October 31 are as follows: 2016,
The term loan can be repaid in part or in full at any time without $23,110; 2017, $23,070; 2018, $23,000; 2019, $84,500; 2020, $0;
penalty, but in any event must be paid in full by October 2019. and after 2020, $225,000.
On April 26, 2007, the company issued $125,000 in aggregate
principal amount of 6.625% senior notes due May 1, 2037. The
senior notes were priced at 98.513% of par value, and the result- 8STOCKHOLDERS’ EQUITY
ing discount of $1,859 associated with the issuance of these senior
notes is being amortized over the term of the notes using the Stock Repurchase Program. On December 11, 2012, the com-
effective interest rate method. The underwriting fee and direct debt pany’s Board of Directors authorized the repurchase of 5,000,000
issue costs totaling $1,524 will be amortized over the life of the shares of the company’s common stock in open-market or in pri-
notes. Although the coupon rate of the senior notes is 6.625%, the vately negotiated transactions. This program has no expiration date
effective interest rate is 6.741% after taking into account the issu- but may be terminated by the Board at any time. During fiscal
ance discount. Interest on the senior notes is payable 2015, 2014, and 2013, the company paid $105,964, $101,674, and
semi-annually on May 1 and November 1 of each year. The senior $98,842 to repurchase an aggregate of 1,561,179 shares,
notes are unsecured senior obligations of the company and rank 1,622,569 shares, and 2,131,615 shares, respectively. As of Octo-
equally with the company’s other unsecured and unsubordinated ber 31, 2015, 1,159,314 shares remained authorized for repur-
indebtedness. The indentures under which the senior notes were chase. On December 3, 2015, the company’s Board of Directors
issued contain customary covenants and event of default provi- authorized the repurchase of up to an additional 4,000,000 shares
sions. The company may redeem some or all of the senior notes of the company’s common stock in open-market or in privately
at any time at the greater of the full principal amount of the senior negotiated transactions. This repurchase program has no expira-
notes being redeemed or the present value of the remaining tion date but may be terminated by the Board at any time.
scheduled payments of principal and interest discounted to the Treasury Shares. As of October 31, 2015, the company had
redemption date on a semi-annual basis at the treasury rate plus 23,413,524 treasury shares at a cost of $1,243,729. As of Octo-
30 basis points, plus, in both cases, accrued and unpaid interest. ber 31, 2014, the company had 22,386,021 treasury shares at a
In the event of the occurrence of both (i) a change of control of the cost of $1,163,706.
company, and (ii) a downgrade of the notes below an investment
grade rating by both Moody’s Investors Service, Inc. and Stan- Accumulated Other Comprehensive Loss.
dard & Poor’s Ratings Services within a specified period, the com- Components of accumulated other comprehensive loss (‘‘AOCL’’),
pany would be required to make an offer to purchase the senior net of tax, within the consolidated statements of stockholders’
notes at a price equal to 101% of the principal amount of the equity are as follows:
senior notes plus accrued and unpaid interest to the date of
repurchase. As of October 31 2015 2014 2013
In connection with the issuance in June 1997 of $175,000 in
Foreign currency translation adjustments $24,328 $12,536 $ 7,778
long-term debt securities, the company paid $23,688 to terminate
Pension and postretirement benefits 5,386 5,266 3,683
three forward-starting interest rate swap agreements with notional Derivative instruments 129 (2,097) 1,109
amounts totaling $125,000. These swap agreements had been
Total accumulated other comprehensive loss $29,843 $15,705 $12,570
entered into to reduce exposure to interest rate risk prior to the
issuance of the new long-term debt securities. As of the inception
of one of the swap agreements, the company had received pay-
ments that were recorded as deferred income to be recognized as
58