Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Oct. 31, 2017 | Dec. 15, 2017 | May 05, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | TORO CO | ||
Entity Central Index Key | 737,758 | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 7.2 | ||
Entity Common Stock, Shares Outstanding | 106,620,468 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 2,505,176 | $ 2,392,175 | $ 2,390,875 |
Cost of sales | 1,584,339 | 1,517,580 | 1,554,940 |
Gross profit | 920,837 | 874,595 | 835,935 |
Selling, general and administrative expense | 565,727 | 540,199 | 536,821 |
Operating earnings | 355,110 | 334,396 | 299,114 |
Interest expense | (19,113) | (19,336) | (18,757) |
Other income, net | 17,187 | 15,400 | 10,674 |
Total operating loss | 353,184 | 330,460 | 291,031 |
Provision for income taxes | 85,467 | 99,466 | 89,440 |
Net earnings | $ 267,717 | $ 230,994 | $ 201,591 |
Basic net earnings per share of common stock (in dollars per share) | $ 2.47 | $ 2.10 | $ 1.81 |
Diluted net earnings per share of common stock (in dollars per share) | $ 2.41 | $ 2.06 | $ 1.78 |
Weighted-average number of shares of common stock outstanding - Basic (in shares) | 108,312 | 109,834 | 111,130 |
Weighted-average number of shares of common stock outstanding - Diluted (in shares) | 111,252 | 111,987 | 113,514 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 267,717 | $ 230,994 | $ 201,591 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments, net of tax of $0, $(161), and $(51), respectively | 10,127 | (7,102) | (11,792) |
Pension and retiree medical benefits, net of tax of $2,536, $(1,294), and $299, respectively | 4,347 | (973) | (120) |
Derivative instruments, net of tax of $(1,123), $(605), and $(933), respectively | (158) | (518) | (2,226) |
Other comprehensive income (loss), net of tax | 14,316 | (8,593) | (14,138) |
Comprehensive income | $ 282,033 | $ 222,401 | $ 187,453 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments, tax | $ 0 | $ (161) | $ (51) |
Pension and retiree medical benefits, tax | 2,536 | (1,294) | 299 |
Derivative instruments, tax | $ (1,123) | $ (605) | $ (933) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 310,256 | $ 273,555 |
Receivables, net: | ||
Customers, net of allowances (2017 - $2,147; 2016 - $1,609) | 176,008 | 157,908 |
Other | 7,065 | 5,357 |
Total receivables, net | 183,073 | 163,265 |
Inventories, net | 328,992 | 307,034 |
Prepaid expenses and other current assets | 37,565 | 35,155 |
Total current assets | 859,886 | 779,009 |
Property, plant and equipment, net | 235,230 | 222,038 |
Property, plant and equipment, net | 64,083 | 57,228 |
Goodwill | 205,029 | 194,782 |
Other intangible assets, net | 103,743 | 108,093 |
Other assets | 25,816 | 23,422 |
Total assets | 1,493,787 | 1,384,572 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current portion of long-term debt | 26,258 | 22,484 |
Accounts payable | 211,752 | 174,668 |
Accrued liabilities: | ||
Warranty | 74,155 | 72,158 |
Advertising and marketing programs | 85,934 | 81,315 |
Compensation and benefit costs | 58,576 | 52,139 |
Insurance | 6,887 | 7,502 |
Interest | 7,542 | 7,931 |
Other | 50,692 | 45,642 |
Total current liabilities | 521,796 | 463,839 |
Long-term debt, less current portion | 305,629 | 328,477 |
Deferred revenue | 24,761 | 11,830 |
Deferred income taxes | 1,726 | 0 |
Other long-term liabilities | 22,783 | 30,391 |
Stockholders' equity: | ||
Preferred stock, par value $1.00 per share, authorized 1,000,000 voting and 850,000 non-voting shares, none issued and outstanding | 0 | 0 |
Common stock, par value $1.00 per share, authorized 175,000,000 shares; issued and outstanding 106,882,972 shares as of October 31, 2017 and 108,427,393 shares as of October 31, 2016 | 106,883 | 108,427 |
Retained earnings | 534,329 | 480,044 |
Accumulated other comprehensive loss | (24,120) | (38,436) |
Total stockholders' equity | 617,092 | 550,035 |
Total liabilities and stockholders' equity | $ 1,493,787 | $ 1,384,572 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 175,000,000 | 175,000,000 |
Common stock, issued (in shares) | 106,882,972 | 108,427,393 |
Common stock, outstanding (in shares) | 106,882,972 | 108,427,393 |
Customers, allowance for doubtful accounts (in dollars) | $ 2,147 | $ 1,609 |
Voting Preferred Stock | ||
Preferred stock | ||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Nonvoting Preferred Stock | ||
Preferred stock | ||
Preferred stock, authorized (in shares) | 850,000 | 850,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Cash flows from operating activities: | |||
Net earnings | $ 267,717 | $ 230,994 | $ 201,591 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Non-cash income from finance affiliate | (9,960) | (9,588) | (8,353) |
Distributions from finance affiliate, net | 8,050 | 9,848 | 4,264 |
Provision for depreciation, amortization and impairment loss | 64,986 | 64,097 | 63,143 |
Stock-based compensation expense | 13,517 | 10,637 | 10,836 |
Deferred income taxes | (6,887) | 10,075 | 200 |
Other | 202 | (464) | (128) |
Changes in operating assets and liabilities, net of effect of acquisitions: | |||
Receivables, net | (17,701) | 15,785 | (25,647) |
Inventories, net | (15,611) | 23,192 | (52,656) |
Prepaid expenses and other assets | (3,424) | (905) | (607) |
Accounts payable, accrued liabilities, deferred revenue and other long-term liabilities | 59,859 | 30,614 | 56,949 |
Net cash provided by operating activities | 360,748 | 384,285 | 249,592 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (58,276) | (50,723) | (56,374) |
Proceeds from asset disposals | 199 | 310 | 179 |
Proceeds from sale of a business | 0 | 1,500 | 0 |
Purchase of noncontrolling interest | (1,500) | 0 | 0 |
Acquisitions, net of cash acquired | (24,181) | 0 | (198,329) |
Net cash used in investing activities | (83,758) | (48,913) | (254,524) |
Cash flows from financing activities: | |||
Short-term debt repayments, net | 0 | (1,161) | (21,283) |
Payments on long-term debt | (19,136) | (24,107) | (7,227) |
Proceeds from exercise of stock options | 10,274 | 20,226 | 9,203 |
Payments of withholding taxes for stock awards | (1,294) | (2,013) | (1,000) |
Purchases of Toro common stock | (159,354) | (109,986) | (105,964) |
Dividends paid on Toro common stock | (75,758) | (65,890) | (55,549) |
Net cash used in financing activities | (245,268) | (182,931) | (181,820) |
Effect of exchange rates on cash and cash equivalents | 4,979 | (5,161) | (1,846) |
Net increase (decrease) in cash and cash equivalents | 36,701 | 147,280 | (188,598) |
Cash and cash equivalents as of the beginning of the fiscal period | 273,555 | 126,275 | 314,873 |
Cash and cash equivalents as of the end of the fiscal period | 310,256 | 273,555 | 126,275 |
Cash paid during the fiscal year for: | |||
Interest | 19,457 | 19,883 | 18,133 |
Income taxes | 97,057 | 82,225 | 77,043 |
Shares issued in connection with stock-based compensation plans | 7,036 | 6,985 | 7,705 |
Payment obligations issued in connection with acquisitions | $ 0 | $ 0 | $ 31,161 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at Oct. 31, 2014 | $ 408,727 | $ 111,356 | $ 313,076 | $ (15,705) |
Increase (Decrease) in Stockholders' Equity | ||||
Dividends paid on Toro common stock | (55,549) | |||
Cash dividends paid on common stock | (55,549) | (55,549) | ||
Issuance of shares for stock options exercised and restricted stock units vested during 2016, 2015, and 2014, respectively | 8,236 | 1,098 | 7,138 | |
Stock-based compensation expense | 10,836 | |||
Stock-based compensation expense | 10,836 | 10,836 | ||
Contribution of stock to a deferred compensation trust | 967 | 967 | ||
Purchase of shares of common stock during 2016, 2015, and 2014, respectively | (106,964) | (3,152) | (103,812) | |
Excess tax benefits from stock-based awards | 8,459 | 8,459 | ||
Other comprehensive loss | (14,138) | (14,138) | ||
Net earnings | 201,591 | 201,591 | ||
Balance at Oct. 31, 2015 | 462,165 | 109,302 | 382,706 | (29,843) |
Increase (Decrease) in Stockholders' Equity | ||||
Dividends paid on Toro common stock | (65,890) | |||
Cash dividends paid on common stock | (65,890) | (65,890) | ||
Issuance of shares for stock options exercised and restricted stock units vested during 2016, 2015, and 2014, respectively | 19,026 | 1,801 | 17,225 | |
Stock-based compensation expense | 10,637 | |||
Stock-based compensation expense | 10,637 | 10,637 | ||
Contribution of stock to a deferred compensation trust | 1,200 | 1,200 | ||
Purchase of shares of common stock during 2016, 2015, and 2014, respectively | (111,999) | (2,676) | (109,323) | |
Excess tax benefits from stock-based awards | 12,495 | 12,495 | ||
Other comprehensive loss | (8,593) | (8,593) | ||
Net earnings | 230,994 | 230,994 | ||
Balance at Oct. 31, 2016 | 550,035 | 108,427 | 480,044 | (38,436) |
Increase (Decrease) in Stockholders' Equity | ||||
Net earnings | 44,990 | |||
Balance at Oct. 31, 2016 | 550,035 | 108,427 | 480,044 | (38,436) |
Increase (Decrease) in Stockholders' Equity | ||||
Dividends paid on Toro common stock | (75,758) | |||
Cash dividends paid on common stock | (75,758) | (75,758) | ||
Issuance of shares for stock options exercised and restricted stock units vested during 2016, 2015, and 2014, respectively | 9,454 | 1,186 | 8,268 | |
Stock-based compensation expense | 13,517 | |||
Stock-based compensation expense | 13,517 | 13,517 | ||
Contribution of stock to a deferred compensation trust | 820 | 820 | ||
Purchase of shares of common stock during 2016, 2015, and 2014, respectively | (160,648) | (2,730) | (157,918) | |
Other comprehensive loss | 14,316 | 14,316 | ||
Net earnings | 267,717 | 267,717 | ||
Balance at Oct. 31, 2017 | 617,092 | $ 106,883 | 534,329 | $ (24,120) |
Increase (Decrease) in Stockholders' Equity | ||||
Cumulative effect adjustment ASU 2016-16 | $ (2,361) | $ (2,361) |
Consolidated Statements of Sto9
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends paid on common stock (in dollars per share) | $ 0.70 | $ 0.60 | $ 0.50 |
Issuance of options (in shares) | 1,185,601 | 1,801,136 | 1,096,972 |
Purchase of shares of common stock (in shares) | 2,730,022 | 2,675,575 | 3,151,978 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA | 12 Months Ended |
Oct. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA | 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA Basis of Presentation and Consolidation The accompanying Consolidated Financial Statements include the accounts of The Toro Company and its wholly owned subsidiaries (the "company"). The company uses the equity method to account for investments over which it has the ability to exercise significant influence over operating and financial policies. Consolidated net earnings include the company's share of the net earnings (losses) of these equity method investments. The cost method is used to account for investments in companies that the company does not control and for which it does not have the ability to exercise significant influence over operating and financial policies. These cost method investments are recorded at cost. All intercompany accounts and transactions have been eliminated from the Consolidated Financial Statements. Stock Split On August 18, 2016, the company announced that its Board of Directors declared a two -for-one stock split of the company's common stock, effected in the form of a 100 percent stock dividend. The stock split dividend was distributed or paid on September 16, 2016, to stockholders of record as of September 1, 2016. Earnings and dividends declared per share and weighted-average shares outstanding are presented in this report after the effect of the 100 percent stock dividend. The two-for-one stock split is reflected in the share amounts for prior periods presented in this report. Accounting Estimates In preparing the Consolidated Financial Statements in conformity with United States ("U.S.") generally accepted accounting principles ("U.S. GAAP"), management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. Estimates are used in determining, among other items, sales promotions and incentives accruals, incentive compensation accruals, income tax accruals, inventory valuation, warranty reserves, earn-out liabilities, allowance for doubtful accounts, pension and post-retirement accruals, self-insurance accruals, useful lives for tangible and definite-lived intangible assets, and future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets. These estimates and assumptions are based on management's best estimates and judgments at the time they are made. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with certainty, actual amounts could differ significantly from those estimated at the time the Consolidated Financial Statements are prepared. Changes in those estimates will be reflected in the Consolidated Financial Statements in future periods. Cash and Cash Equivalents The company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. As of October 31, 2017 , cash and short-term investments held by the company's foreign subsidiaries that are not available to fund domestic operations unless repatriated were $133,488 . Receivables The company's financial exposure to collection of accounts receivable is reduced due to its Red Iron Acceptance, LLC ("Red Iron") joint venture with TCF Inventory Finance, Inc. ("TCFIF"), as further discussed in Note 3. For receivables not serviced through Red Iron, the company grants credit to customers in the normal course of business and performs on-going credit evaluations of customers. Receivables are recorded at original carrying amount less estimated allowance for doubtful accounts. Allowance for Doubtful Accounts The company estimates the balance of allowance for doubtful accounts by analyzing the age of accounts and notes receivable balances and applying historical write-off trend rates. The company also estimates separately specific customer balances when it is deemed probable that the balance is uncollectible. Account balances are charged off against the allowance when all collection efforts have been exhausted. Inventory Valuations Inventories are valued at the lower of cost or net realizable value, with cost determined by the last-in, first-out ("LIFO") method for a majority of the company's inventories. The first-in, first-out ("FIFO") method is used for all other inventories, constituting 31 percent and 33 percent of total inventories as of October 31, 2017 and 2016 , respectively. The company establishes a reserve for excess, slow-moving, and obsolete inventory that is equal to the difference between the cost and estimated net realizable value for that inventory. These reserves are based on a review and comparison of current inventory levels to planned production, as well as planned and historical sales of the inventory. During fiscal 2017 LIFO layers were not reduced; however, in fiscal 2016 LIFO layers were reduced, which resulted in charging lower inventory costs prevailing in previous years to cost of sales, thus reducing cost of sales by $60 . Inventories were as follows: October 31 2017 2016 Raw materials and work in process $ 100,077 $ 90,463 Finished goods and service parts 295,716 274,929 Total FIFO value 395,793 365,392 Less: adjustment to LIFO value 66,801 58,358 Total inventories, net $ 328,992 $ 307,034 Property and Depreciation Property, plant and equipment are carried at cost. The company provides for depreciation of property, plant and equipment utilizing the straight-line method over the estimated useful lives of the assets. Buildings, including leasehold improvements, are generally depreciated over 10 to 40 years. Machinery and equipment are generally depreciated over two to 15 years and tooling costs are generally depreciated over three to five years. Software and web site development costs are generally amortized over two to five years. Expenditures for major renewals and improvements, which substantially increase the useful lives of existing assets, are capitalized, and expenditures for general maintenance and repairs are charged to operating expenses as incurred. Interest is capitalized during the construction period for significant capital projects. During the fiscal years ended October 31, 2017 , 2016 , and 2015 , the company capitalized $344 , $549 , and $897 of interest, respectively. Property, plant and equipment was as follows: October 31 2017 2016 Land and land improvements $ 38,060 $ 34,744 Buildings and leasehold improvements 194,995 182,121 Machinery and equipment 349,976 325,595 Tooling 197,299 200,842 Computer hardware and software 88,152 85,173 Construction in process 17,132 9,561 Property, plant and equipment 885,614 838,036 Less: accumulated depreciation 650,384 615,998 Property, plant and equipment, net $ 235,230 $ 222,038 During fiscal years 2017 , 2016 , and 2015 , the company recorded depreciation expense of $54,679 , $53,355 , and $50,322 , respectively. Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the cost of acquisitions in excess of the fair values assigned to identifiable net assets acquired. Goodwill is assigned to reporting units based upon the expected benefit of the synergies of the acquisition. Goodwill and certain trade names, which are considered to have indefinite lives, are not amortized; however, the company reviews them for impairment annually during the fourth quarter of each fiscal year or more frequently if changes in circumstances or occurrence of events suggest the fair value may not be recoverable. During the fourth quarter of fiscal 2017 , the company performed its annual goodwill impairment test. In performing the annual goodwill impairment test, the company first reviewed its reporting units and determined that it has nine reporting units, which are the same as its nine operating segments. Seven reporting units contain goodwill on their respective balance sheets. Next, the company performed an analysis of qualitative factors to determine whether changes in events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and accordingly, whether it is necessary to perform a quantitative two-step goodwill impairment test. Based on the company's analysis of qualitative factors, the company determined that it was not necessary to perform a quantitative two-step goodwill impairment test for any of its reporting units. During the fourth quarter of fiscal 2017 , the company also performed an assessment of its indefinite-lived intangible assets, which consist of certain trade names. The company's estimate of the fair value of its trade names are based on a discounted cash flow model using inputs which included: projected revenues from the company's forecasting process; assumed royalty rates that could be payable if the company did not own the trade name; and a discount rate. Based on this analysis, which was also performed in prior fiscal years, the company concluded its indefinite-lived intangible assets were not impaired during fiscal 2017 , 2016 , or 2015 . Other Long-Lived Assets Other long-lived assets consist of property, plant and equipment and definite-lived intangible assets. The company's definite-lived intangible assets are identifiable assets that arose from purchase acquisitions consisting primarily of patents, non-compete agreements, customer relationships, trade names, and developed technology and are amortized on a straight-line basis over periods ranging from one to 20 years. The company reviews other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Asset groups have identifiable cash flows and are largely independent of other asset groups. An impairment loss is recognized when estimated undiscounted future cash flows from the operation or disposition of the asset group are less than the carrying amount of the asset group. Measurement of an impairment loss is based on the excess of the carrying amount of the asset group over its fair value. Fair value is measured using a discounted cash flow model or independent appraisals, as appropriate. Based on the company's impairment analysis for other long-lived assets, the company did not have any impairment losses for fiscal 2017 and 2016 . For fiscal 2015 , the company wrote down $1,383 of other long-lived assets. For other long-lived assets to be abandoned, the company tests for potential impairment. If the company commits to a plan to abandon or dispose of an other long-lived asset before the end of its previously estimated useful life, depreciation or amortization estimates are revised. Accounts Payable The company has a customer-managed service agreement with a third party to provide a web-based platform that facilitates participating suppliers' ability to finance payment obligations from the company with a designated third party financial institution. Participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the company prior to their scheduled due dates at a discounted price to a participating financial institution. The company's obligations to its suppliers, including amounts due and scheduled payment dates, are not affected by suppliers' decisions to finance amounts under this arrangement. As of October 31, 2017 and 2016 , $24,455 and $16,249 , respectively, of the company's outstanding payment obligations had been placed on the accounts payable tracking system. Insurance The company is self-insured for certain losses relating to employee medical, dental, workers' compensation and certain product liability claims. Specific stop loss coverages are provided for catastrophic claims in order to limit exposure to significant claims. Losses and claims are charged to operations when it is probable a loss has been incurred and the amount can be reasonably estimated. Self-insured liabilities are based on a number of factors, including historical claims experience, an estimate of claims incurred but not reported, demographic and severity factors, and utilizing valuations provided by independent third-party actuaries. Accrued Warranties The company recognizes expense and provides an accrual for estimated future warranty costs at the time of sale and also establishes accruals for major rework campaigns. Warranty accruals are based primarily on the estimated number of products under warranty, historical average costs incurred to service warranty claims, the trend in the historical ratio of claims to sales and the historical length of time between the sale and resulting warranty claim. The company periodically assesses the adequacy of its warranty accruals based on changes in these factors and records any necessary adjustments if actual claims experience indicates that adjustments are necessary. The changes in accrued warranties were as follows: Fiscal Years Ended October 31 2017 2016 Beginning balance $ 72,158 $ 70,734 Warranty provisions 46,150 44,260 Warranty claims (40,940 ) (41,102 ) Changes in estimates (3,213 ) (1,734 ) Ending balance $ 74,155 $ 72,158 Derivatives Derivative instruments, consisting mainly of forward currency contracts, are used to hedge most foreign currency transactions, including forecasted sales and purchases denominated in foreign currencies. The company may also utilize forward currency contracts or cross currency swaps to offset intercompany loan exposures. All derivative instruments are recognized on the Consolidated Balance Sheets at fair value as either assets or liabilities. If the derivative instrument is designated as a cash flow hedging instrument, the effective portion of the change in the fair value of the derivative instrument is recorded as a component of other comprehensive income within the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Stockholders' Equity until net earnings is affected by the variability of the cash flows of the hedged transaction. Derivatives that do not meet the requirements for cash flow hedge accounting are adjusted to fair value through other income, net, on the Consolidated Statements of Earnings. Foreign Currency Translation and Transactions The functional currency of the company's foreign operations is generally the applicable local currency. The functional currency is translated into U.S. dollars for balance sheet accounts using current exchange rates in effect as of the balance sheet date and for revenue and expense accounts using a weighted-average exchange rate during the fiscal year. The translation adjustments are deferred as a component of other comprehensive income within the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Stockholders' Equity. Gains or losses resulting from transactions denominated in foreign currencies are included in other income, net in the Consolidated Statements of Earnings. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years that those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. A valuation allowance is provided when, in management's judgment, it is more likely than not that some portion or all of the deferred tax asset will not be realized. The company has reflected the necessary deferred tax assets and liabilities in the accompanying Consolidated Balance Sheets. Management believes the future tax deductions will be realized principally through carryback to taxable income in prior years, future reversals of existing taxable temporary differences and future taxable income. The company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The company also records interest and penalties related to unrecognized tax benefits in income tax expense. Revenue Recognition The company recognizes revenue for product sales when persuasive evidence of an arrangement exists, title and risk of ownership passes to the customer, the sales price is fixed or determinable and collectability is probable. These criteria are typically met at the time product is shipped, or in the case of certain agreements, when product is delivered. A provision is made at the time the related revenue is recognized for estimated product returns, floor plan costs, rebates, and other sales promotion expenses. Sales, use, value-added and other excise taxes are not recognized in revenue. Freight revenue billed to customers is included in net sales. The company ships some of its products to a key retailer's seasonal distribution centers on a consignment basis. The company retains title to its products stored at the seasonal distribution centers. As the company's products are removed from the seasonal distribution centers by the key retailer and shipped to the key retailer's stores, title passes from the company to the key retailer. At that time, the company invoices the key retailer and recognizes revenue for these consignment transactions. The company does not offer a right of return for products shipped to the key retailer's stores from the seasonal distribution centers. From time to time, the company also stores inventory on a consignment basis at other customers' locations. The amount of consignment inventory as of October 31, 2017 and 2016 was $19,327 and $22,443 , respectively. Revenue earned from service and maintenance contracts is recognized ratably over the contractual period. Revenue from extended warranty programs is deferred at the time the contract is sold and amortized into net sales using the straight-line method over the extended warranty period. Sales Promotions and Incentives At the time of sale, the company records an estimate for sales promotion and incentive costs. The company's estimates of sales promotion and incentive costs are based on the terms of the arrangements with customers, historical payment experience, field inventory levels, volume purchases, and expectations for changes in relevant trends in the future. The expense of each program is classified as a reduction from gross sales or as a component of selling, general and administrative expense. Examples of significant sales promotions and incentive programs in which the related expense is classified as a reduction from gross sales are as follows: • Off-Invoice Discounts: The company's costs for off-invoice discounts represent a reduction in the selling price of its products given at the time of sale. • Rebate Programs: The company's rebate programs are generally based on claims submitted from either its direct customers or end-users of its products, depending upon the program. The amount of the rebate varies based on the specific program and is either a dollar amount or a percentage of the purchase price and can also be based on actual retail price as compared to the company's selling price. • Incentive Discounts: The company's costs for incentive discount programs are based on its customers’ purchases of certain quantities or mixes of product during a specified time period which are tracked on an annual basis. • Financing Programs: The company's costs for financing programs, namely floor planning and retail financing, represent financing costs associated with programs under which it pays a portion of the interest cost to finance distributor and dealer inventories through third party financing arrangements for a specific period of time. Retail financing is similar to floor planning with the difference being that retail financing programs are offered to end-user customers under which the company pays a portion of interest costs on behalf of end-users for financing purchases of its equipment. • Commissions Paid to Home Center Customers: The company pays commissions to home center customers as an off-invoice discount. These commissions do not represent any selling effort by the home center customer but rather is a discount from the selling price of the product. Examples of significant sales promotions and incentive programs in which the related expense is classified as a component of selling, general, and administrative expense are as follows: • Commissions Paid to Distributors and Dealers: For certain products, the company uses a distribution network of dealers and distributors that purchase and take possession of products for sale to the end customer. In addition, the company has dealers and distributors that act as sales agents for it on certain products using a direct-selling type model. Under this direct-selling type model, the company's network of distributors and dealers facilitates a sale directly to the dealer or end-user customer on its behalf. Commissions to distributors and dealers in these instances represent commission payments to sales agents that are also its customers. • Cooperative Advertising: Cooperative advertising programs are based on advertising costs incurred by distributors and dealers for promoting the company's products. The company supports a portion of those advertising costs in which claims are submitted by the distributor or dealer along with evidence of the advertising material procured/produced and evidence of the cost incurred in the form of third party invoices or receipts. Cost of Sales Cost of sales is primarily comprised of direct materials and supplies consumed to manufacture the company's products, as well as manufacturing labor and direct overhead expense necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, obsolescence expense, cost of services provided, and cash discounts on payments to vendors. Selling, General and Administrative Expense Selling, general and administrative expense primarily comprises payroll and benefit costs, occupancy and operating costs of distribution and corporate facilities, warranty expense, depreciation and amortization expense on non-manufacturing assets, advertising and marketing expenses, selling expenses, engineering and research costs, information systems costs, incentive and profit sharing expense, and other miscellaneous administrative costs, such as legal costs for internal and outside services that are expensed as incurred. Cost of Financing Distributor / Dealer Inventory The company enters into limited inventory repurchase agreements with Red Iron and in limited instances, a third-party financing company for certain of the company's independent dealers in Australia. The company has repurchased immaterial amounts of inventory under these repurchase agreements over the last three fiscal years. Included as a reduction to gross sales are costs associated with programs under which the company shares the expense of financing distributor and dealer inventories, referred to as floor plan expenses. This charge represents interest for a pre-established length of time based on a predefined rate from a contract with third party financing sources to finance distributor and dealer inventory purchases. These financing arrangements are used by the company to assist customers in financing inventory. The financing costs for distributor and dealer inventories were $30,106 , $28,773 , and $24,130 for the fiscal years ended October 31, 2017 , 2016 and 2015 , respectively. Advertising General advertising expenditures are expensed the first time advertising takes place. Production costs associated with advertising are expensed in the period incurred. Cooperative advertising represents expenditures for shared advertising costs that the company reimburses to customers and is classified as a component of selling, general and administrative expense. These obligations are accrued and expensed when the related revenues are recognized in accordance with the programs established for various product lines. Advertising costs were $42,963 , $41,837 , and $42,843 for the fiscal years ended October 31, 2017 , 2016 , and 2015 , respectively. Stock-Based Compensation The company's stock-based compensation awards are generally granted to executive officers, other employees, and non-employee members of the company's Board of Directors, and include performance share awards that are contingent on the achievement of performance goals of the company, non-qualified stock options, restricted stock units, and restricted stock awards. Generally, compensation expense equal to the grant date fair value is recognized for these awards over the vesting period and is classified in selling, general and administrative expense. Stock options granted to executive officers and other employees are subject to accelerated expensing if the option holder meets the retirement definition set forth in The Toro Company Amended and Restated 2010 Equity and Incentive Plan, as amended and restated (the "2010 plan"). In that case, the fair value of the options is expensed in the fiscal year of grant because generally the option holder must be employed as of the end of the fiscal year in which the options are granted in order for the options to continue to vest following retirement. Similarly, if a non-employee director has served on the company's Board of Directors for ten full fiscal years or more, the awards vest immediately upon retirement; and therefore, the fair value of the options granted is fully expensed on the date of the grant. See Note 10 for additional information regarding stock-based compensation plans. Net Earnings Per Share Basic net earnings per share is calculated using net earnings available to common stockholders divided by the weighted-average number of shares of common stock outstanding during the year plus the assumed issuance of contingent shares. Diluted net earnings per share is similar to basic net earnings per share except that the weighted-average number of shares of common stock outstanding plus the assumed issuance of contingent shares is increased to include the number of additional shares of common 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 stock units. Reconciliations of basic and diluted weighted-average shares of common stock outstanding are as follows: (Shares in thousands) 2017 2016 2015 1 Basic Weighted-average number of shares of common stock 108,299 109,816 111,107 Assumed issuance of contingent shares 13 18 23 Weighted-average number of shares of common stock and assumed issuance of contingent shares 108,312 109,834 111,130 Diluted Weighted-average number of shares of common stock and assumed issuance of contingent shares 108,312 109,834 111,130 Effect of dilutive securities 2,940 2,153 2,384 Weighted-average number of shares of common stock, assumed issuance of contingent shares, and effect of dilutive securities 111,252 111,987 113,514 1 Share data has been adjusted for prior periods presented to reflect a two-for-one stock split effective September 16, 2016. Incremental shares from options and restricted stock units are computed by the treasury stock method. Options for the purchase of 353,897 , 310,566 , and 290,120 shares of common stock during fiscal 2017 , 2016 , and 2015 , respectively, were excluded from the computation of diluted net earnings per share because they were anti-dilutive. Cash Flow Presentation The Consolidated Statements of Cash Flows are prepared using the indirect method, which reconciles net earnings to cash flow from operating activities. The necessary adjustments include the removal of timing differences between the occurrence of operating receipts and payments and their recognition in net earnings. The adjustments also remove from operating activities cash flows arising from investing and financing activities, which are presented separately from operating activities. Cash flows from foreign currency transactions and operations are translated at an average exchange rate for the period. Cash paid for acquisitions is classified as investing activities. New Accounting Pronouncements Adopted In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . This amended guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. This amended guidance was retrospectively adopted in the first quarter of fiscal 2017. Prior periods have been retrospectively adjusted for the adoption of this amended guidance and are reclassified in the Consolidated Balance Sheets presentation as a direct deduction from the carrying amount of the related debt liability. The adoption of this guidance did not have a material impact on the company's Consolidated Financial Statements. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . This amended guidance requires customers to determine whether or not an arrangement contains a software license element. If the arrangement contains a software element, the related fees paid should be accounted for as an acquisition of a software license. If the arrangement does not contain a software license, it is accounted for as a service contract. This amended guidance was adopted in the first quarter of fiscal 2017. The adoption of this guidance did not have an impact on the company's Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09, Stock-based Compensation: Improvements to Employee Share-based Payment Accounting. This amended guidance simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and statement of cash flow classification. The company elected to early adopt this amended guidance effective November 1, 2016, which was the first day of the company's first quarter of fiscal 2017. The impact of the early adoption resulted in the following: • The company recorded a discrete tax benefit of $19,719 related to the excess tax benefit on share-based awards within income tax expense for the twelve months ended October 31, 2017 . Prior to the adoption of this standard, these tax benefits were included in additional paid-in capital on the Consolidated Balance Sheets. Adoption of this standard could add increased variability to the company's provision for income taxes mainly due to timing of stock option exercises, vesting of restricted stock units and the company's common stock price. • The company elected not to change its policy on accounting for forfeitures and will continue to estimate a requisite forfeiture rate. • The company has elected to change its policy on tax withholding requirements and will allow participants to withhold up to the maximum statutory rate prospectively on new awards. As of November 1, 2016, the company did not have any outstanding liabilities on awards which would require a cumulative-effect adjustment to retained earnings. • The company no longer presents the cash received from excess tax benefits within cash flows from financing activities as this benefit is now reflected within cash flows from operating activities in the Consolidated Statements of Cash |
ACQUISITION
ACQUISITION | 12 Months Ended |
Oct. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITION | Effective January 1, 2017, during the first quarter of fiscal 2017, the company completed the acquisition of all the outstanding shares of Regnerbau Calw GmbH ("Perrot"), a privately held manufacturer of professional irrigation equipment. The addition of these products broadens and strengthens the company's irrigation solutions for the sport, agricultural, and industrial markets. The acquisition was funded with existing foreign cash and cash equivalents. The purchase price of this acquisition was allocated to the identifiable assets acquired and liabilities assumed based on estimates of their fair value, with the excess purchase price recorded as goodwill. As of October 31, 2017 , the company has finalized the purchase accounting for the acquisition. This acquisition was immaterial based on the company's Consolidated Financial Condition and Results of Operations. |
INVESTMENT IN JOINT VENTURE
INVESTMENT IN JOINT VENTURE | 12 Months Ended |
Oct. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN JOINT VENTURE | In fiscal 2009, the company and TCFIF, a subsidiary of TCF National Bank, established Red Iron, a joint venture in the form of a Delaware limited liability company that primarily provides inventory financing to certain distributors and dealers of the company’s products in the U.S. On November 29, 2016, during the first quarter of fiscal 2017, the company entered into amended agreements for its Red Iron joint venture with TCFIF. As a result, the amended term of Red Iron will continue until October 31, 2024, subject to two -year extensions thereafter. Either the company or TCFIF may elect not to extend the amended term, or any subsequent term, by giving one -year written notice to the other party. The company owns 45 percent of Red Iron and TCFIF owns 55 percent of Red Iron. The company accounts for its investment in Red Iron under the equity method of accounting. The company and TCFIF each contributed a specified amount of the estimated cash required to enable Red Iron to purchase the company's inventory financing receivables and to provide financial support for Red Iron's inventory financing programs. Red Iron borrows the remaining requisite estimated cash utilizing a $550,000 secured revolving credit facility established under a credit agreement between Red Iron and TCFIF. The company's total investment in Red Iron as of October 31, 2017 and 2016 was $20,626 and $18,719 , respectively. The company has not guaranteed the outstanding indebtedness of Red Iron. The company has agreed to repurchase products repossessed by Red Iron and the TCFIF Canadian affiliate, up to a maximum aggregate amount of $7,500 in a calendar year. Under the repurchase agreement between Red Iron and the company, Red Iron provides financing for certain dealers and distributors. These transactions are structured as an advance in the form of a payment by Red Iron to the company on behalf of a distributor or dealer with respect to invoices financed by Red Iron. These payments extinguish the obligation of the dealer or distributor to make payment to the company under the terms of the applicable invoice. Under separate agreements between Red Iron and the dealers and distributors, Red Iron provides loans to the dealers and distributors for the advances paid by Red Iron to the company. The net amount of receivables financed for dealers and distributors under this arrangement during fiscal 2017 , 2016 , and 2015 was $1,847,740 , $1,713,588 , and $1,430,855 , respectively. Summarized financial information for Red Iron is presented as follows: For the Twelve Months Ended October 31 2017 2016 2015 Revenues $ 35,158 $ 31,812 $ 27,483 Interest and operating expenses, net (13,030 ) (10,506 ) (8,885 ) Net income $ 22,128 $ 21,306 $ 18,598 As of October 31 2017 2016 Finance receivables, net $ 407,533 $ 370,169 Other assets 2,888 4,416 Total assets $ 410,421 $ 374,585 Notes payable $ 347,968 $ 321,378 Other liabilities 16,617 11,607 Partners' capital 45,836 41,600 Total liabilities and partners' capital $ 410,421 $ 374,585 |
OTHER INCOME, NET
OTHER INCOME, NET | 12 Months Ended |
Oct. 31, 2017 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME, NET | 4 OTHER INCOME, NET Other income (expense) is as follows: Fiscal Years Ended October 31 2017 2016 2015 Interest income $ 1,359 $ 827 $ 494 Retail financing revenue 1,097 1,087 1,086 Foreign currency exchange rate gain (loss) 1,543 974 (324 ) Gain on sale of business — 340 — Non-cash income from finance affiliate 9,960 9,588 8,353 Litigation recovery (settlements), net (65 ) 1,300 125 Miscellaneous 3,293 1,284 940 Total other income, net $ 17,187 $ 15,400 $ 10,674 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Oct. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | Goodwill The changes in the carrying amount of goodwill for fiscal 2017 and 2016 were as follows: Professional Segment Residential Segment Total Balance as of October 31, 2015 $ 184,766 $ 10,767 $ 195,533 Translation adjustments (428 ) (323 ) (751 ) Balance as of October 31, 2016 184,338 10,444 194,782 Goodwill acquired 8,921 — 8,921 Translation adjustments 1,205 121 1,326 Balance as of October 31, 2017 $ 194,464 $ 10,565 $ 205,029 Other Intangible Assets During the fourth quarter of fiscal 2017 , the company performed an evaluation of the company's definite-lived trade name intangible assets and determined that circumstances no longer continued to support a finite useful life for the company's BOSS® trade name intangible asset within the company’s Professional segment and accordingly, the company reclassified the definite-lived BOSS trade name to the company's indefinite-lived intangible asset portfolio. This determination was reached as BOSS's industry recognition and brand has strengthened, and the company plans to use the BOSS trade name into the foreseeable future. The company performed a quantitative impairment analysis on the BOSS trade name as of October 31, 2017 by comparing the carrying value of the BOSS trade name to its fair value. The company’s estimate of the fair value of the BOSS trade name was based on a discounted cash flow model using inputs which included: projected revenues from the company's forecasting process, assumed royalty rates that could be payable if the company did not own the BOSS trade name, and a discount rate. Based on this analysis, the company concluded the BOSS trade name was not impaired as of October 31, 2017 . The cost basis of the definite-lived BOSS trade name reclassified to the company's indefinite-lived non-amortizable - trade names category was $23,120 as of October 31, 2017 . The BOSS trade name had a remaining useful life of approximately 17 years at the time of the change in classification. The change in classification is estimated to reduce the company's annual amortization expense by approximately $1,360 for future fiscal years. The components of other intangible assets were as follows: October 31, 2017 Gross Carrying Amount Accumulated Amortization Net Patents $ 15,162 $ (11,599 ) $ 3,563 Non-compete agreements 6,896 (6,775 ) 121 Customer-related 87,461 (18,940 ) 68,521 Developed technology 30,212 (26,939 ) 3,273 Trade names 2,330 (1,637 ) 693 Other 800 (800 ) — Total amortizable 142,861 (66,690 ) 76,171 Non-amortizable - trade names 27,572 — 27,572 Total other intangible assets, net $ 170,433 $ (66,690 ) $ 103,743 October 31, 2016 Gross Carrying Amount Accumulated Amortization Net Patents $ 15,151 $ (10,866 ) $ 4,285 Non-compete agreements 6,886 (6,681 ) 205 Customer-related 84,353 (14,434 ) 69,919 Developed technology 28,648 (23,712 ) 4,936 Trade names 28,715 (4,235 ) 24,480 Other 800 (800 ) — Total amortizable 164,553 (60,728 ) 103,825 Non-amortizable - trade names 4,268 — 4,268 Total other intangible assets, net $ 168,821 $ (60,728 ) $ 108,093 Amortization expense for definite-lived intangible assets for the fiscal years ended October 31, 2017 , 2016 , and 2015 was $9,876 , $9,550 , and $11,438 , respectively. Estimated amortization expense for the succeeding fiscal years is as follows: 2018 , $6,656 ; 2019 , $5,778 ; 2020 , $5,222 ; 2021 , $4,818 ; 2022 , $4,683 ; and after 2022 , $49,014 . |
SHORT-TERM CAPITAL RESOURCES
SHORT-TERM CAPITAL RESOURCES | 12 Months Ended |
Oct. 31, 2017 | |
SHORT-TERM CAPITAL RESOURCES | |
SHORT-TERM CAPITAL RESOURCES | As of October 31, 2017 , the company had a $150,000 unsecured senior five -year revolving credit facility that expires in October 2019. Included in this $150,000 revolving credit facility is a sublimit of $20,000 for standby letters of credit and a sublimit for swingline loans of $20,000 . At the election of the company, and with the approval of the named borrowers on the revolving credit facility and the election of the lenders to fund such increase, the aggregate maximum principal amount available under the facility may be increased by an amount up to $100,000 in aggregate. Funds are available under the revolving credit facility for working capital, capital expenditures, and other lawful purposes, including, but not limited to, acquisitions and stock repurchases. Interest expense on this credit line is determined based on a LIBOR rate (or other rates quoted by the Administrative Agent, Bank of America, N.A.) plus a basis point spread defined in the credit agreement. In addition, the company's non-U.S. operations also maintain short-term lines of credit in the aggregate amount of $9,186 . These facilities bear interest at various rates depending on the rates in their respective countries of operation. As of October 31, 2017 and October 31, 2016 , the company had no outstanding short-term debt under these lines of credit. The credit agreement that contains the revolving credit facility and term loan, which is described in more detail in Note 7, contains standard covenants, including, without limitation, financial covenants, such as the maintenance of minimum interest coverage and maximum debt to earnings before interest, tax, depreciation, and amortization ("EBITDA") ratios; and negative covenants, which among other things, limit loans and investments, disposition of assets, consolidations and mergers, transactions with affiliates, restricted payments, contingent obligations, liens, and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum thresholds and exceptions. Under the revolving credit facility, the company is not limited in the amount for payments of cash dividends and stock repurchases as long as the debt to EBITDA ratio from the previous quarter compliance certificate is less than or equal to 3.25 , provided that immediately after giving effect of any such proposed action, no default or event of default would exist. In fiscal 2017 , 2016 , and 2015 , the company was not limited in the amount for payments of cash dividends and stock repurchases as its debt to EBITDA ratio was below the thresholds. As of October 31, 2017 and 2016 , the company was in compliance with all covenants related to the credit agreement for the revolving credit facility. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Oct. 31, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | A summary of long-term debt is as follows: October 31 2017 2016 Term loan, due October 25, 2019 $ 100,750 $ 110,500 7.800% Debentures, due June 15, 2027 100,000 100,000 6.625% Senior Notes, due May 1, 2037 123,792 123,730 4% Unsecured Note, due November 14, 2017 10,008 19,677 Less: unamortized discounts, debt issuance costs and deferred charges (2,663 ) (2,946 ) Total long-term debt 331,887 350,961 Less: current portion of long-term debt 26,258 22,484 Long-term debt, less current portion $ 305,629 $ 328,477 On November 14, 2014, the company issued a note with the aggregate principal amount of $30,000 to the former owner of the BOSS business, Northern Star Industries, Inc., which was recorded at fair value of $31,161 . In October 2014, the company obtained a $130,000 term loan with various banks, which was a part of a new credit agreement that included a new revolving credit facility. Under the credit agreement, the term loan bears interest based on a LIBOR rate (or other rates quoted by the Administrative Agent, Bank of America, N.A.) plus a basis point spread defined in the credit agreement. The term loan can be repaid in part or in full at any time without penalty, but in any event must be paid in full by October 2019. On April 26, 2007, the company issued $125,000 in aggregate principal amount of 6.625 percent senior notes due May 1, 2037. The senior notes were priced at 98.513 percent of par value, and the resulting discount of $1,859 associated with the issuance of these senior notes is being amortized over the term of the notes using the effective interest rate method. The underwriting fee and direct debt issue costs totaling $1,524 will be amortized over the life of the notes. Although the coupon rate of the senior notes is 6.625 percent , the effective interest rate is 6.741 percent after taking into account the issuance discount. Interest on the senior notes is payable semi-annually on May 1 and November 1 of each year. The senior notes are unsecured senior obligations of the company and rank equally with the company's other unsecured and unsubordinated indebtedness. The indentures under which the senior notes were issued contain customary covenants and event of default provisions. The company may redeem some or all of the senior notes at any time at the greater of the full principal amount of the senior notes being redeemed or the present value of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the treasury rate plus 30 basis points, plus, in both cases, accrued and unpaid interest. In the event of the occurrence of both (i) a change of control of the company, and (ii) a downgrade of the notes below an investment grade rating by both Moody's Investors Service, Inc. and Standard & Poor's Ratings Services within a specified period, the company would be required to make an offer to purchase the senior notes at a price equal to 101 percent of the principal amount of the senior notes plus accrued and unpaid interest to the date of repurchase. In June 1997, the company issued $175,000 of debt securities consisting of $75,000 of 7.125 percent coupon 10 -year notes and $100,000 of 7.8 percent coupon 30 -year debentures. The $75,000 of 7.125 percent coupon 10 -year notes were repaid at maturity during fiscal 2007. In connection with the issuance of $175,000 in long-term debt securities, the company paid $23,688 to terminate three forward-starting interest rate swap agreements with notional amounts totaling $125,000 . These swap agreements had been 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 payments that were recorded as deferred income to be recognized as 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 was deferred and is being recognized as an adjustment to interest expense over the term of the debt securities issued. Principal payments required on long-term debt in each of the next five fiscal years ending October 31 are as follows: 2018 , $26,258 ; 2019 , $84,500 ; 2020 , $0 ; 2021 , $0 ; 2022 , $0 ; and after 2022 , $223,792 . |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Oct. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | Shares have been adjusted for prior periods presented to reflect a two -for-one stock split effective September 16, 2016. Stock Repurchase Program On December 3, 2015, the company's Board of Directors authorized the repurchase of 8,000,000 shares of the company's common stock in open-market or in privately negotiated transactions. This repurchase program has no expiration date but may be terminated by the company's Board of Directors at any time. During fiscal 2017 , 2016 , and 2015 , the company paid $159,354 , $109,986 , and $105,964 to repurchase an aggregate of 2,710,837 shares, 2,625,913 shares, and 3,122,358 shares, respectively, under the Board's authorized stock repurchase program. As of October 31, 2017 , 4,981,878 shares remained authorized by the company's Board of Directors for repurchase. The Board of Directors authorized shares for repurchase does not include shares of the company's common stock surrendered by employees to satisfy minimum tax withholding obligations upon vesting of certain equity securities granted under the company's stock-based compensation plans. Treasury Shares As of October 31, 2017 , the company had a total of 21,245,028 treasury shares at a cost of $1,369,548 . As of October 31, 2016 , the company had a total of 19,700,607 treasury shares at a cost of $1,280,495 . Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss ("AOCL"), net of tax, within the Consolidated Statements of Stockholders' Equity are as follows: As of October 31 2017 2016 2015 Foreign currency translation adjustments $ 21,303 $ 31,430 $ 24,328 Pension and post-retirement benefits 2,012 6,359 5,386 Derivative instruments 805 647 129 Total accumulated other comprehensive loss $ 24,120 $ 38,436 $ 29,843 The components and activity of AOCL are as follows: Foreign Currency Translation Adjustments Pension and Post-Retirement Benefits Cash Flow Derivative Instruments Total Balance as of October 31, 2016 $ 31,430 $ 6,359 $ 647 $ 38,436 Other comprehensive income before reclassifications (10,127 ) (4,347 ) (233 ) (14,707 ) Amounts reclassified from AOCL — — 391 391 Net current period other comprehensive (income) loss (10,127 ) (4,347 ) 158 (14,316 ) Balance as of October 31, 2017 $ 21,303 $ 2,012 $ 805 $ 24,120 Foreign Currency Translation Adjustments Pension and Post-Retirement Benefits Cash Flow Derivative Instruments Total Balance as of October 31, 2015 $ 24,328 $ 5,386 $ 129 $ 29,843 Other comprehensive loss before reclassifications 7,102 973 1,116 9,191 Amounts reclassified from AOCL — — (598 ) (598 ) Net current period other comprehensive loss 7,102 973 518 8,593 Balance as of October 31, 2016 $ 31,430 $ 6,359 $ 647 $ 38,436 For additional information on the components of AOCL associated with pension and post-retirement benefits refer to Note 11. For additional information on the components reclassified from AOCL to the respective line items in net earnings for derivative instruments refer to Note 14. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Earnings before income taxes were as follows: Fiscal Years Ended October 31 2017 2016 2015 Earnings before income taxes: U.S. $ 307,136 $ 292,184 $ 254,276 Foreign 46,048 38,276 36,755 Total earnings before income taxes $ 353,184 $ 330,460 $ 291,031 A reconciliation of the statutory federal income tax rate to the company's consolidated effective tax rate is summarized as follows: Fiscal Years Ended October 31 2017 2016 2015 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % Excess deduction for stock compensation (5.3 ) — — Domestic manufacturer's deduction (1.2 ) (0.8 ) (1.7 ) State and local income taxes, net of federal benefit 0.5 1.5 2.2 Foreign taxes (2.3 ) (1.8 ) (3.1 ) Federal research tax credit (1.5 ) (1.5 ) (0.9 ) Other, net (1.0 ) (2.3 ) (0.8 ) Consolidated effective tax rate 24.2 % 30.1 % 30.7 % Components of the provision for income taxes were as follows: Fiscal Years Ended October 31 2017 2016 2015 Current provision: Federal $ 83,091 $ 77,685 $ 75,496 State 3,036 6,929 9,389 Foreign 8,166 6,295 6,219 Total current provision $ 94,293 $ 90,909 $ 91,104 Deferred provision (benefit): Federal $ (8,774 ) $ 7,283 $ 430 State (101 ) 297 — Foreign 49 977 (2,094 ) Total deferred provision (benefit) (8,826 ) 8,557 (1,664 ) Total provision for income taxes $ 85,467 $ 99,466 $ 89,440 The tax effects of temporary differences that give rise to deferred income tax assets, net, are presented below: October 31 2017 2016 Deferred income tax assets: Compensation and benefits $ 38,753 $ 37,200 Warranty and insurance 23,993 17,443 Advertising and sales allowance 10,428 11,185 Other 12,234 10,327 Valuation allowance (1,951 ) (1,867 ) Total deferred income tax assets $ 83,457 $ 74,288 Deferred income tax liabilities: Depreciation $ (13,259 ) $ (13,578 ) Amortization (7,841 ) (3,482 ) Total deferred income tax liabilities (21,100 ) (17,060 ) Deferred income tax assets, net $ 62,357 $ 57,228 The valuation allowance as of October 31, 2017 and 2016 principally applies to capital loss carryforwards, state credit carryforwards, and foreign net operating loss carryforwards that are expected to expire prior to utilization. As of October 31, 2017 , the company had net operating loss carryforwards of approximately $6,569 in foreign jurisdictions. The carryforward periods are as follows: $3,327 that do not expire; and $3,242 that expire between fiscal years 2018 and 2026. No provision has been made for U.S. federal income taxes on certain undistributed earnings of foreign subsidiaries the company intends to permanently invest or that may be remitted substantially tax-free. The total of undistributed earnings that would be subject to federal income tax if remitted under existing law is approximately $159,003 as of October 31, 2017 . Determination of the unrecognized deferred tax liability related to these earnings is not practicable because of the complexities with its hypothetical calculation. Upon distribution of these earnings, the company will be subject to U.S. taxes and withholding taxes payable to various foreign governments. A credit for foreign taxes already paid would be available to reduce the U.S. tax liability. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Unrecognized tax benefits as of October 31, 2016 $ 5,175 Increase as a result of tax positions taken during a prior period 432 Increase as a result of tax positions taken during the current period 948 Decrease relating to settlements with taxing authorities (2,673 ) Reductions as a result of statute of limitations lapses (769 ) Unrecognized tax benefits as of October 31, 2017 $ 3,113 The company recognizes interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes. In addition to the liability of $3,113 for unrecognized tax benefits as of October 31, 2017 , the company had an amount of approximately $236 of accrued interest and penalties. Included in the balance of unrecognized tax benefits as of October 31, 2017 are potential benefits of $2,177 that, if recognized, would affect the effective tax rate from continuing operations. The company and its wholly owned subsidiaries file income tax returns in the U.S. federal jurisdiction, and numerous state and foreign jurisdictions. With few exceptions, the company is no longer subject to U.S. federal, state and local, and foreign income tax examinations by tax authorities for taxable years before fiscal 2013. The Internal Revenue Service is completing an audit of fiscal 2015, with no material adjustments to tax expense or unrecognized tax benefits expected. The company is under audit in several state jurisdictions and one foreign jurisdiction, and expects various statutes of limitation to expire during the next 12 months. Due to the uncertain response of taxing authorities, a range of outcomes cannot be reasonably estimated at this time. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Oct. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS | The company maintains the 2010 plan for executive officers, other employees, and non-employee members of the company's Board of Directors. The 2010 plan allows the company to grant equity-based compensation awards, including stock options, restricted stock units, restricted stock, and performance share awards. Share and per share data have been adjusted for prior year periods presented to reflect a two -for-one stock split that was effective September 16, 2016. The compensation costs related to stock-based awards were as follows: Fiscal Years Ended October 31 2017 2016 2015 Stock option awards $ 5,496 $ 4,606 $ 4,704 Restricted stock and restricted stock units 2,300 1,891 1,756 Performance share awards 5,183 3,676 3,964 Unrestricted common stock awards 538 464 412 Total compensation cost for stock-based awards $ 13,517 $ 10,637 $ 10,836 Related tax benefit from stock-based awards $ 5,001 $ 3,936 $ 4,009 The number of unissued shares of common stock available for future equity-based grants under the 2010 plan was 5,517,897 as of October 31, 2017 . Shares of common stock issued upon exercise or settlement of stock options, restricted stock units, and performance shares are issued from treasury shares. During fiscal 2017 , 2016 and 2015 , 11,412 , 12,320 and 13,360 shares, respectively, of fully vested unrestricted common stock awards were granted to certain members of the company's Board of Directors as a component of their compensation for their service on the board and are recorded in selling, general and administrative expense in the Consolidated Statements of Earnings. Stock Option Awards Under the 2010 plan, stock options are granted with an exercise price equal to the closing price of the company's common stock on the date of grant, as reported by the New York Stock Exchange. Options are generally granted to executive officers, other employees, and non-employee members of the company's Board of Directors on an annual basis in the first quarter of the company's fiscal year. Options generally vest one-third each year over a three -year period and have a ten -year term. Other options granted to certain employees vest in full on the three -year anniversary of the date of grant and have a ten -year term. Compensation expense equal to the grant date fair value is generally recognized for these awards over the vesting period. Stock options granted to executive officers and other employees are subject to accelerated expensing if the option holder meets the retirement definition set forth in the 2010 plan. In that case, the fair value of the options is expensed in the fiscal year of grant because generally the option holder must be employed as of the end of the fiscal year in which the options are granted in order for the options to continue to vest following retirement. Similarly, if a non-employee director has served on the company's Board of Directors for ten full fiscal years or more, the awards vest immediately upon retirement, and therefore, the fair value of the options granted is fully expensed on the date of the grant. The table below presents stock option activity for fiscal 2017 : Stock Option Awards Weighted-Average Exercise Price Weighted-Average Contractual Life (years) Aggregate Intrinsic Value Outstanding as of October 31, 2016 4,879,984 $ 20.07 5.3 $ 135,697 Granted 554,364 55.82 Exercised (954,909 ) 11.48 ​ ​ Canceled/forfeited (19,744 ) 51.74 Outstanding as of October 31, 2017 4,459,695 $ 26.22 5.3 $ 163,369 Exercisable as of October 31, 2017 3,331,979 $ 19.64 4.3 $ 143,960 As of October 31, 2017 , there was $3,129 of total unrecognized compensation expense related to unvested stock options. That cost is expected to be recognized over a weighted-average period of 1.99 years. The table below presents the total market value of stock options exercised and the total intrinsic value of options exercised during the following fiscal years: Fiscal Years Ended October 31 2017 2016 2015 Market value of stock options exercised $ 58,976 $ 61,468 $ 27,860 Intrinsic value of options exercised 1 $ 48,017 $ 41,365 $ 18,739 1 Intrinsic value is calculated as amount by which the stock price at exercise date exceeded the option exercise price. The fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation method. The expected life is a significant assumption as it determines the period for which the risk-free interest rate, stock price volatility, and dividend yield must be applied. The expected life is the average length of time in which executive officers, other employees, and non-employee directors are expected to exercise their stock options, which is primarily based on historical exercise experience. The company groups executive officers and non-employee directors for valuation purposes based on similar historical exercise behavior. Expected stock price volatilities are based on the daily movement of the company's common stock over the most recent historical period equivalent to the expected life of the option. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate over the expected life at the time of grant. Dividend yield is estimated over the expected life based on the company's historical cash dividends paid, expected future cash dividends and dividend yield, and expected changes in the company's stock price. The table below illustrates the weighted-average valuation assumptions for options granted in the following fiscal periods: Fiscal Years Ended October 31 2017 2016 2015 Expected life of option in years 6.02 5.97 5.94 Expected stock price volatility 22.15 % 24.04 % 29.66 % Risk-free interest rate 2.03 % 1.80 % 1.61 % Expected dividend yield 1.01 % 1.24 % 1.29 % Weighted-average fair value at date of grant $ 12.55 $ 8.79 $ 8.41 Restricted Stock and Restricted Stock Units Under the 2010 plan, restricted stock and restricted stock unit awards are generally granted to certain employees that are not executive officers. Occasionally, restricted stock or restricted stock unit awards may be granted, including to executive officers, in connection with hiring, mid-year promotions, leadership transition, or retention. Restricted stock and restricted stock unit awards generally vest one-third each year over a three-year period, or vest in full on the three-year anniversary of the date of grant. Such restricted stock and restricted stock unit awards may have performance-based rather than time-based vesting requirements. Compensation expense equal to the grant date fair value, which is equal to the closing price of the company's common stock on the date of grant multiplied by the number of shares subject to the restricted stock and restricted stock unit awards, is recognized for these awards over the vesting period. Factors related to the company's restricted stock and restricted stock units are as follows: Fiscal Years Ended October 31 2017 2016 2015 Weighted-average fair value at date of grant $ 66.09 $ 41.83 $ 33.88 Fair value of restricted stock and restricted stock units vested $ 3,604 $ 2,681 $ 2,744 The table below summarizes the activity during fiscal 2017 for unvested restricted stock units: Restricted Stock Units Weighted-Average Fair Value at Date of Grant Unvested as of October 31, 2016 139,480 $ 34.51 Granted 43,167 66.09 Vested (53,709 ) 33.14 Forfeited (4,666 ) 37.38 Unvested as of October 31, 2017 124,272 $ 45.66 As of October 31, 2017 , there was $2,953 of total unrecognized compensation expense related to unvested restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.15 years. Performance Share Awards Under the 2010 plan, the company grants performance share awards to executive officers and other employees under which they are entitled to receive shares of the company's common stock contingent on the achievement of performance goals of the company and businesses of the company, which are generally measured over a three -year period. The number of shares of common stock a participant receives can be increased (up to 200 percent of target levels) or reduced (down to zero) based on the level of achievement of performance goals and will vest at the end of a three-year period. Performance share awards are generally granted on an annual basis in the first quarter of the company's fiscal year. Compensation expense is recognized for these awards on a straight-line basis over the vesting period based on the per share fair value as of the date of grant and the probability of achieving each performance goal. Factors related to the company's performance share awards are as follows: Fiscal Years Ended October 31 2017 2016 2015 Weighted-average fair value at date of grant $ 54.52 $ 38.89 $ 32.84 Fair value of performance share awards vested $ 7,018 $ 7,454 $ 7,989 The table below summarizes the activity during fiscal 2017 for unvested performance share awards: Performance Shares Weighted-Average Fair Value at Date of Grant Unvested as of October 31, 2016 317,850 $ 33.95 Granted 74,800 54.52 Vested (107,198 ) 30.10 Canceled/forfeited (3,301 ) 47.96 Unvested as of October 31, 2017 282,151 $ 40.71 As of October 31, 2017 , there was $5,108 of total unrecognized compensation expense related to unvested performance share awards. That cost is expected to be recognized over a weighted-average period of 1.67 years. |
EMPLOYEE RETIREMENT PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended |
Oct. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE RETIREMENT PLANS | The company maintains The Toro Company Investment, Savings, and Employee Stock Ownership Plan for eligible employees. The company's expenses under this plan were $17,932 , $16,986 , and $17,400 for the fiscal years ended October 31, 2017 , 2016 , and 2015 , respectively. In addition, the company and its subsidiaries have defined benefit, supplemental, and other retirement plans covering certain employees in the U.S. and the United Kingdom. The projected benefit obligation of these plans as of October 31, 2017 and 2016 was $41,448 and $45,603 , respectively, and the net liability amount recognized in the Consolidated Balance Sheets as of October 31, 2017 and 2016 was $4,558 and $4,243 , respectively. The accumulated benefit obligation of these plans as of October 31, 2017 and 2016 was $41,448 and $45,603 , respectively. The funded status of these plans as of October 31, 2017 and 2016 was $6,238 and $12,984 , respectively. The fair value of the plan assets as of October 31, 2017 and 2016 was $35,211 and $32,619 , respectively. The net expense recognized in the Consolidated Financial Statements for these plans was $1,477 , $1,220 , and $2,406 for the fiscal years ended October 31, 2017 , 2016 , and 2015 , respectively. Amounts recognized in accumulated other comprehensive loss consisted of: Fiscal Years Ended October 31 Defined Benefit Pension Plans Post-retirement Benefit Plan Total 2017 Net actuarial loss (gain) $ 4,998 $ (2,986 ) $ 2,012 Accumulated other comprehensive loss (income) $ 4,998 $ (2,986 ) $ 2,012 2016 Net actuarial loss $ 5,496 $ 554 $ 6,050 Net prior service cost 309 — 309 Accumulated other comprehensive loss $ 5,805 $ 554 $ 6,359 The following amounts are included in accumulated other comprehensive loss as of October 31, 2017 and are expected to be recognized as components of net periodic benefit cost during fiscal 2018: October 31, 2017 Defined Benefit Pension Plans Post-retirement Benefit Plan Total Net actuarial loss (gain) $ 128 $ (377 ) $ (249 ) Total $ 128 $ (377 ) $ (249 ) Amounts recognized in net periodic benefit cost and other comprehensive loss (income) consisted of: Fiscal Years Ended October 31 Defined Benefit Pension Plans Post-retirement Benefit Plan Total 2017 Net actuarial gain $ (280 ) $ (3,534 ) $ (3,814 ) Prior service cost 51 — 51 Amortization of unrecognized prior service credit (360 ) — (360 ) Amortization of unrecognized actuarial gain (219 ) (5 ) (224 ) Total recognized in other comprehensive income $ (808 ) $ (3,539 ) $ (4,347 ) Total recognized in net periodic benefit cost and other comprehensive loss (income) $ 22 $ (2,892 ) $ (2,870 ) Fiscal Years Ended October 31 Defined Benefit Pension Plans Post-retirement Benefit Plan Total 2016 Net actuarial loss $ 469 $ 619 $ 1,088 Prior service cost — — — Amortization of unrecognized prior service credit (42 ) — (42 ) Amortization of unrecognized actuarial gain (73 ) — (73 ) Total recognized in other comprehensive loss $ 354 $ 619 $ 973 Total recognized in net periodic benefit cost and other comprehensive loss $ 976 $ 1,217 $ 2,193 The company has omitted the remaining disclosures for its defined benefit plans and post-retirement healthcare plan as the company deems these plans to be immaterial to its Consolidated Financial Position and Results of Operations. |
SEGMENT DATA
SEGMENT DATA | 12 Months Ended |
Oct. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT DATA | The company's businesses are organized, managed, and internally grouped into segments based on similarities in products and services. Segment selection is based on the manner in which management organizes segments for making operating and investment decisions and assessing performance. The company has identified nine operating segments and has aggregated those segments into three reportable segments: Professional, Residential, and Distribution. The aggregation of the company's segments is based on the segments having the following similarities: economic characteristics, types of products and services, types of production processes, type or class of customers and method of distribution. The company's Distribution segment, which consists of a wholly owned domestic distributorship, has been combined with the company's corporate activities and elimination of intersegment revenues and expenses and is shown as "Other" due to the insignificance of the segment. The Professional business segment consists of turf and landscape equipment, snow and ice management equipment, and irrigation products. Turf and landscape equipment products include sports fields and grounds maintenance equipment, golf course mowing and maintenance equipment, landscape contractor mowing equipment, landscape creation and renovation equipment, rental and specialty construction equipment, and other maintenance equipment. Snow and ice management equipment products include snowplows, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, UTVs, skid steers, and front-end loaders. Irrigation products consist of sprinkler heads, electric and hydraulic valves, controllers, computer irrigation central control systems, coupling systems, and micro-irrigation drip tape and hose products, as well as professionally installed lighting products offered through distributors and landscape contractors that also purchase irrigation products. Professional business segment products are sold mainly through a network of distributors and dealers to professional users engaged in maintaining golf courses, sports fields, municipal properties, agricultural fields, residential and commercial landscapes, and removing snow and ice, as well as directly to government customers, rental companies, and large retailers. The Residential business segment consists of walk power mowers, riding mowers, snow throwers, replacement parts, and home solutions products, including trimmers, blowers, blower-vacuums, and underground and hose-end retail irrigation products sold in Australia. Residential business segment products are sold to homeowners through a network of distributors and dealers, and through a broad array of home centers, hardware retailers, and mass retailers, as well as online. The Other segment consists of the company's Distribution segment and corporate activities and elimination of intersegment revenues and expenses. Corporate activities include general corporate expenditures (finance, human resources, legal, information services, public relations, and similar activities) and other unallocated corporate assets and liabilities, such as corporate facilities, parts inventory, and deferred tax assets and liabilities. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1. The company evaluates the performance of its Professional and Residential business segment results based on earnings from operations plus other income, net. Operating loss for the Other segment includes earnings (loss) from the company's domestic wholly owned distribution company, corporate activities, other income, and interest expense. The business segment's operating profits or losses include direct costs incurred at the segment's operating level plus allocated expenses, such as profit sharing and manufacturing expenses. The allocated expenses represent costs that these operations would have incurred otherwise, but do not include general corporate expenses, interest expense, and income taxes. The company accounts for intersegment gross sales at current market prices. The following tables present summarized financial information concerning the company's reportable segments: Fiscal Year Ended October 31, 2017 Professional Residential Other Total Net sales $ 1,811,705 $ 673,247 $ 20,224 $ 2,505,176 Intersegment gross sales 27,893 332 (28,225 ) — Earnings (loss) before income taxes 379,496 74,704 (101,016 ) 353,184 Total assets 836,600 189,578 467,609 1,493,787 Capital expenditures 29,786 10,605 17,885 58,276 Depreciation and amortization $ 41,313 $ 10,308 $ 13,365 $ 64,986 Fiscal Year Ended October 31, 2016 Professional Residential Other Total Net sales $ 1,705,312 $ 669,131 $ 17,732 $ 2,392,175 Intersegment gross sales 28,138 354 (28,492 ) — Earnings (loss) before income taxes 352,060 73,691 (95,291 ) 330,460 Total assets 774,762 188,920 420,890 1,384,572 Capital expenditures 27,296 13,794 9,633 50,723 Depreciation and amortization $ 40,715 $ 10,406 $ 12,976 $ 64,097 Fiscal Year Ended October 31, 2015 Professional Residential Other Total Net sales $ 1,639,659 $ 725,682 $ 25,534 $ 2,390,875 Intersegment gross sales 45,634 406 (46,040 ) — Earnings (loss) before income taxes 308,010 84,956 (101,935 ) 291,031 Total assets 805,686 217,093 277,650 1,300,429 Capital expenditures 29,016 9,953 17,405 56,374 Depreciation and amortization $ 42,799 $ 9,131 $ 11,213 $ 63,143 The following table presents the details of the Other segment operating loss before income taxes: Fiscal Years Ended October 31 2017 2016 2015 Corporate expenses $ (100,928 ) $ (95,288 ) $ (95,167 ) Interest expense (19,113 ) (19,336 ) (18,757 ) Other income 19,025 19,333 11,989 Total operating loss $ (101,016 ) $ (95,291 ) $ (101,935 ) The following table presents net sales for groups of similar products and services: Fiscal Years Ended October 31 2017 2016 2015 Equipment $ 2,060,354 $ 2,001,150 $ 2,004,274 Irrigation and lighting 444,822 391,025 386,601 Total net sales $ 2,505,176 $ 2,392,175 $ 2,390,875 Sales to one customer in the Residential segment accounted for 10 percent of total consolidated gross sales in fiscal 2017 and 11 percent of total consolidated gross sales in fiscal 2016 and 2015 . Geographic Data The following geographic area data includes net sales based on product shipment destination and long-lived assets, which consist of net property, plant, and equipment, and is based on physical location in addition to allocated capital tooling from U.S. plant facilities: Fiscal Years Ended October 31 United States Foreign Countries Total 2017 Net sales $ 1,893,249 $ 611,927 $ 2,505,176 Long-lived assets $ 194,338 $ 40,892 $ 235,230 2016 Net sales $ 1,812,587 $ 579,588 $ 2,392,175 Long-lived assets $ 188,869 $ 33,169 $ 222,038 2015 Net sales $ 1,780,240 $ 610,635 $ 2,390,875 Long-lived assets $ 190,262 $ 34,733 $ 224,995 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Oct. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | 13 COMMITMENTS AND CONTINGENT LIABILITIES Leases Total rental expense for operating leases was $27,865 , $26,363 and $24,986 for the fiscal years ended October 31, 2017 , 2016 and 2015 , respectively. As of October 31, 2017 , future minimum lease payments under noncancelable operating leases amounted to $94,091 as follows: 2018 , $16,789 ; 2019 , $14,881 ; 2020 , $12,573 ; 2021 , $11,504 ; 2022 , $9,833 ; and after 2022 , $28,511 . Customer Financing Wholesale Financing The company is party to a joint venture with TCFIF established as Red Iron. See Note 3 for additional information related to Red Iron. Some products sold to independent dealers in Australia are financed by a third-party finance company. This third-party financing company purchased $32,124 of receivables from the company during fiscal 2017 . As of October 31, 2017 , $13,109 of receivables financed by the third-party financing company, excluding Red Iron, was outstanding. The company also enters into limited inventory repurchase agreements with third party financing companies and Red Iron for receivables financed by third party financing companies and Red Iron. As of October 31, 2017 , the company was contingently liable to repurchase up to a maximum amount of $10,712 of inventory related to receivables under these financing arrangements. The company has repurchased only immaterial amounts of inventory under these repurchase agreements since inception. End-User Financing The company has agreements with third party financing companies to provide lease-financing options to golf course and sports fields and grounds equipment customers in the U.S., Australia, and select countries in Europe. The company has no contingent liabilities for residual value or credit collection risk under these agreements with third party financing companies. From time to time, the company enters into agreements where it provides recourse to third party finance companies in the event of default by the customer for lease payments to the third-party finance company. The company's maximum exposure for credit collection as of October 31, 2017 was $6,559 . Purchase Commitments As of October 31, 2017 , the company had $12,797 of noncancelable purchase commitments with some suppliers for materials and supplies as part of the normal course of business. The company also entered into a construction contract and related agreements for renovations at its corporate facilities located in Bloomington, Minnesota, for a maximum obligation, subject to certain exceptions, of $8,936 . The amount of the remaining obligation as of October 31, 2017 was $7,806 . Letters of Credit Letters of credit are issued by the company during the normal course of business, as required by some vendor contracts. As of October 31, 2017 and 2016 , the company had $10,220 and $8,984 , respectively, in outstanding letters of credit. Litigation The company is party to litigation in the ordinary course of business. Such matters are generally subject to uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time. Litigation occasionally involves claims for punitive, as well as compensatory, damages arising out of the use of the company's products. Although the company is self-insured to some extent, the company maintains insurance against certain product liability losses. The company is also subject to litigation and administrative and judicial proceedings with respect to claims involving asbestos and the discharge of hazardous substances into the environment. Some of these claims assert damages and liability for personal injury, remedial investigations or clean up and other costs and damages. The company is also typically involved in commercial disputes, employment disputes, and patent litigation cases in which it is asserting or defending against patent infringement claims. To prevent possible infringement of the company's patents by others, the company periodically reviews competitors' products. To avoid potential liability with respect to others' patents, the company regularly reviews certain patents issued by the U.S. Patent and Trademark Office and foreign patent offices. Management believes these activities help minimize its risk of being a defendant in patent infringement litigation. The company is currently involved in patent litigation cases, including cases by or against competitors, where it is asserting and defending against claims of patent infringement. Such cases are at varying stages in the litigation process. The company records a liability in its Consolidated Financial Statements for costs related to claims, including future legal costs, settlements and judgments, where the company has assessed that a loss is probable and an amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. In the opinion of management, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect its Consolidated Results of Operations, Financial Position, or Cash Flows. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Oct. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FINANCIAL INSTRUMENTS | Concentrations of Credit Risk Financial instruments, which potentially subject the company to concentrations of credit risk, consist principally of accounts receivable that are concentrated in the Professional and Residential business segments. The credit risk associated with these segments is limited because of the large number of customers in the company's customer base and their geographic dispersion, except for the Residential segment that has significant sales to The Home Depot. Derivative Instruments and Hedging Activities The company is exposed to foreign currency exchange rate risk arising from transactions in the normal course of business, such as sales to third party customers, sales and loans to wholly owned foreign subsidiaries, foreign plant operations, and purchases from suppliers. The company’s primary currency exchange rate exposures are with the Euro, the Australian dollar, the Canadian dollar, the British pound, the Mexican peso, the Japanese yen, the Chinese Renminbi, and the Romanian New Leu against the U.S. dollar, as well as the Romanian New Leu against the Euro. To reduce its exposure to foreign currency exchange rate risk, the company actively manages the exposure of its foreign currency exchange rate risk by entering into various derivative instruments to hedge against such risk, authorized under company policies that place controls on these hedging activities, with counterparties that are highly rated financial institutions. The company’s policy does not allow the use of derivative instruments for trading or speculative purposes. The company also made an accounting policy election to use the portfolio exception with respect to measuring counterparty credit risk for derivative instruments, and to measure the fair value of a portfolio of financial assets and financial liabilities on the basis of the net open risk position with each counterparty. The company’s hedging activities primarily involve the use of forward currency contracts to hedge most foreign currency transactions, including forecasted sales and purchases denominated in foreign currencies. The company may also utilize forward currency contracts or cross currency swaps to offset intercompany loan exposures. The company uses derivative instruments only in an attempt to limit underlying exposure from foreign currency exchange rate fluctuations and to minimize earnings and cash flow volatility associated with foreign currency exchange rate fluctuations. Decisions on whether to use such derivative instruments are primarily based on the amount of exposure to the currency involved and an assessment of the near-term market value for each currency. The company recognizes all derivative instruments at fair value on the Consolidated Balance Sheets as either assets or liabilities. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as a cash flow hedging instrument. Cash Flow Hedging Instruments The company formally documents relationships between cash flow hedging instruments and the related hedged transactions, as well as its risk-management objective and strategy for undertaking cash flow hedging instruments. This process includes linking all cash flow hedging instruments to the forecasted transactions, such as sales to third parties, foreign plant operations, and purchases from suppliers. Changes in fair values of outstanding cash flow hedging instruments, except the ineffective portion, are recorded in other comprehensive income within AOCL on the Consolidated Balance Sheets, until net earnings is affected by the variability of the cash flows of the hedged transaction. Gains and losses on the cash flow hedging instrument representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in net earnings. The Consolidated Statements of Earnings classification of effective cash flow hedge results is the same as that of the underlying exposure. Results of cash flow hedges of sales and foreign plant operations are recorded in net sales and cost of sales, respectively, when the underlying hedged transaction affects net earnings. The maximum amount of time the company hedges its exposure to the variability in future cash flows for forecasted trade sales and purchases is two years . Results of cash flow hedges of intercompany loans are recorded in other income, net as an offset to the remeasurement of the foreign loan balance. The company formally assesses, at the cash flow hedge’s inception, and on an ongoing basis, whether the cash flow hedging instruments have been highly effective in offsetting changes in the cash flows of the hedged transactions and whether those cash flow hedging instruments may be expected to remain highly effective in future periods. When it is determined that a derivative is not, or has ceased to be, highly effective as a cash flow hedge, the company discontinues cash flow hedge accounting prospectively. When the company discontinues cash flow hedge accounting because it is no longer probable, but it is still reasonably possible that the forecasted transaction will occur by the end of the originally expected period or within an additional two -month period of time thereafter, the gain or loss on the derivative remains in AOCL and is reclassified to net earnings when the forecasted transaction affects net earnings. However, if it is probable that a forecasted transaction will not occur by the end of the originally specified time period or within an additional two-month period of time thereafter, the gains and losses that were in AOCL are immediately recognized in net earnings. In all situations in which cash flow hedge accounting is discontinued and the derivative remains outstanding, the company carries the derivative at its fair value on the Consolidated Balance Sheets, recognizing future changes in the fair value in other income, net. As of October 31, 2017 , the notional amount of outstanding forward contracts designated as cash flow hedging instruments was $102,733 . During the third quarter of fiscal 2016 , the company terminated its one cross currency interest rate swap instrument outstanding with gains on the instrument recorded in other income, net. Derivatives Not Designated as Cash Flow Hedging Instruments The company also enters into foreign currency contracts that include forward currency contracts to mitigate the remeasurement of specific assets and liabilities on the Consolidated Balance Sheets. These contracts are not designated as cash flow hedging instruments. Accordingly, changes in the fair value of hedges of recorded balance sheet positions, such as cash, receivables, payables, intercompany notes, and other various contractual claims to pay or receive foreign currencies other than the functional currency, are recognized immediately in other income, net, on the Consolidated Statements of Earnings together with the transaction gain or loss from the hedged balance sheet position. The following table presents the fair value of the company’s derivative instruments and Consolidated Balance Sheets location: Fair Value as of October 31 2017 2016 Derivative assets: Derivatives designated as cash flow hedging instruments Prepaid expenses and other current assets Forward currency contracts $ 1,014 $ 1,535 Derivatives not designated as cash flow hedging instruments Prepaid expenses and other current assets Forward currency contracts 27 432 Total assets $ 1,041 $ 1,967 Derivative liabilities: Derivatives designated as cash flow hedging instruments Accrued liabilities Forward currency contracts $ 1,563 $ 973 Derivatives not designated as cash flow hedging instruments Accrued liabilities Forward currency contracts 703 792 Total liabilities $ 2,266 $ 1,765 The company entered into an International Swap Dealers Association ("ISDA") Master Agreement with each counterparty that permits the net settlement of amounts owed under their respective contracts. The ISDA Master Agreement is an industry standardized contract that governs all derivative contracts entered into between the company and the respective counterparty. Under these master netting agreements, net settlement generally permits the company or the counterparty to determine the net amount payable or receivable for contracts due on the same date or in the same currency for similar types of derivative transactions. The company records the fair value of its derivative instruments at the net amount in its Consolidated Balance Sheets. The following tables show the effects of the master netting arrangements on the fair value of the company's derivative instruments that are recorded in the Consolidated Balance Sheets: Fair Value as of October 31 2017 2016 Derivative assets: Forward currency contracts Gross amounts of recognized assets $ 1,055 $ 2,264 Gross liabilities offset in the Consolidated Balance Sheets (14 ) (297 ) Net amounts of assets presented in the Consolidated Balance Sheets $ 1,041 $ 1,967 Derivative liabilities: Forward currency contracts Gross amounts of recognized liabilities $ (2,266 ) $ (1,765 ) Gross assets offset in the Consolidated Balance Sheets — — Net amounts of liabilities presented in the Consolidated Balance Sheets $ (2,266 ) $ (1,765 ) The following table presents the impact and location of the amounts reclassified from AOCL into earnings on the Consolidated Statements of Earnings and the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the effective portion of the company's derivatives designated as cash flow hedging instruments for the fiscal years ended October 31, 2017 and 2016 : Gain (Loss) Reclassified from AOCL into Income Gain (Loss) Recognized in OCI on Derivatives Fiscal Years Ended October 31 2017 2016 2017 2016 Forward currency contracts Net sales $ 1,547 $ 2,094 $ (2,007 ) $ (961 ) Cost of sales (1,156 ) (2,598 ) 1,849 181 Cross currency contracts Other income, net — (94 ) — 255 Total derivatives designated as cash flow hedging instruments $ 391 $ (598 ) $ (158 ) $ (525 ) As of October 31, 2017 , the company expects to reclassify approximately $1,017 of losses from AOCL to earnings during the next twelve months. The following table presents the impact and location of derivative instruments on the Consolidated Statements of Earnings for the ineffective portion and components excluded from effectiveness testing for the company's derivatives designated as cash flow hedging instruments for the fiscal years ended October 31, 2017 and 2016 : Gain (Loss) Recognized in Income on Derivatives Fiscal Years Ended October 31 2017 2016 Forward currency contracts Other income, net $ 231 $ 608 Total ineffective portion and components excluded from effectiveness testing $ 231 $ 608 The ineffective portion of forward currency contracts reclassified into earnings as a result of the discontinuance of cash flow hedge accounting was not material for the fiscal years ended October 31, 2017 and 2016 . The following table presents the impact of derivative instruments on the Consolidated Statements of Earnings for the company's derivatives not designated as cash flow hedging instruments for the fiscal years ended October 31, 2017 and 2016 : Gain (Loss) Recognized in Income on Derivatives Fiscal Years Ended October 31 2017 2016 Forward currency contracts Other income, net $ (4,251 ) $ (4 ) Cross currency contracts Other income, net — (191 ) Total derivatives not designated as cash flow hedging instruments $ (4,251 ) $ (195 ) |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Oct. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | The company categorizes its assets and liabilities into one of three levels based on the assumptions (inputs) used in valuing the asset or liability. Estimates of fair value for financial assets and financial liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value, and requires certain disclosures. The framework discusses valuation techniques such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. The three levels are defined as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs reflecting management's assumptions about the inputs used in pricing the asset or liability. There were no transfers between levels during the fiscal years ended October 31, 2017 and 2016 . Recurring Fair Value Measurements Forward currency contracts are valued based on observable market transactions of forward currency prices and spot currency rates as of the reporting date. The unfunded deferred compensation liability is primarily subject to changes in fixed-income investment contracts based on current yields. The following tables present, by level within the fair value hierarchy, the company's financial assets and liabilities that are measured at fair value on a recurring basis as of October 31, 2017 and 2016 , according to the valuation technique utilized to determine their fair values: Fair Value Measurements Using Inputs Considered as: October 31, 2017 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 1,041 $ — $ 1,041 $ — Total assets $ 1,041 $ — $ 1,041 $ — Liabilities: Forward currency contracts $ 2,266 $ — $ 2,266 $ — Deferred compensation liabilities 630 — 630 — Total liabilities $ 2,896 $ — $ 2,896 $ — Fair Value Measurements Using Inputs Considered as: October 31, 2016 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 1,967 $ — $ 1,967 $ — Total assets $ 1,967 $ — $ 1,967 $ — Liabilities: Forward currency contracts $ 1,765 $ — $ 1,765 $ — Deferred compensation liabilities 1,149 — 1,149 — Total liabilities $ 2,914 $ — $ 2,914 $ — Nonrecurring Fair Value Measurements The company measures certain assets and liabilities at fair value on a non-recurring basis. Assets and liabilities that are measured at fair value on a nonrecurring basis include long-lived assets, goodwill and indefinite-lived intangible assets, which are generally recorded at fair value as a result of an impairment charge. Assets acquired and liabilities assumed as part of acquisitions are measured at fair value. Other Fair Value Disclosures The carrying values of the company's short-term financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt, including current maturities of long-term debt, approximate their fair values due to their short-term nature. The fair value of long-term debt is determined using Level 2 inputs by discounting the projected cash flows based on quoted market rates at which similar amounts of debt could currently be borrowed. As of October 31, 2017 , the estimated fair value of long-term debt with fixed interest rates was $282,412 compared to its carrying amount of $231,137 . As of October 31, 2016 , the estimated fair value of long-term debt with fixed interest rates was $293,295 compared to its carrying amount of $240,461 . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Oct. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Tax Reform On December 22, 2017, "An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018," ("The Act"), was signed into law by President Trump and is expected to impact the company’s operating results, cash flows, and financial condition. The company is currently evaluating the potential impacts of The Act. The Act includes a number of provisions, including the lowering of the U.S. corporate tax rate from 35 percent to 21 percent, effective January 1, 2018. The Act also includes provisions that may partially offset the benefit of such rate reduction, including the repeal of the deduction for domestic production activities. The effect of the international provisions of The Act, which generally establish a territorial-style system for taxing foreign-source income of domestic multinational corporations, is uncertain. As a result of The Act, the company expects there will be one-time adjustments for the re-measurement of deferred tax assets (liabilities) and the deemed repatriation tax on unremitted foreign earnings and profits. Quantifying the impacts of The Act is not practicable at this time due, among other things, to the inherent complexities involved. Accordingly, the company expects to continue to analyze such impacts and record any such amounts in the first quarter of fiscal 2018. The company has evaluated all subsequent events and concluded that no additional subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the Notes to the Consolidated Financial Statements. |
QUARTERLY FINANCIAL DATA (unaud
QUARTERLY FINANCIAL DATA (unaudited) | 12 Months Ended |
Oct. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (unaudited) | Summarized quarterly financial data for fiscal 2017 and 2016 are as follows: Quarter Fiscal Years Ended October 31, 2017 First Second Third Fourth Net sales $ 515,839 $ 872,767 $ 627,943 $ 488,627 Gross profit 193,480 316,314 226,785 184,258 Net earnings 44,990 120,475 68,404 33,848 Basic net earnings per share 1 0.41 1.11 0.63 0.31 Diluted net earnings per share 1 $ 0.41 $ 1.08 $ 0.61 $ 0.31 Quarter Fiscal Years Ended October 31, 2016 First Second Third Fourth Net sales $ 486,398 $ 836,441 $ 600,980 $ 468,356 Gross profit 182,654 303,187 216,617 172,137 Net earnings 39,261 105,681 55,822 30,230 Basic net earnings per share 1 0.36 0.96 0.51 0.28 Diluted net earnings per share 1 $ 0.35 $ 0.94 $ 0.50 $ 0.27 1 Net earnings per share amounts may not equal the full year total due to changes in the number of shares outstanding during the periods and rounding. |
SCHEDULE II_ Valuation and Qual
SCHEDULE II: Valuation and Qualifying Accounts | 12 Months Ended |
Oct. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II: Valuation and Qualifying Accounts | SCHEDULE II THE TORO COMPANY AND SUBSIDIARIES Valuation and Qualifying Accounts (Dollars in thousands) Balance as of the Beginning of the Fiscal Year Charged to Costs and Expenses 1 Deductions 2 Balance as of the End of the Fiscal Year Fiscal year ended October 31, 2017 Allowance for doubtful accounts and notes receivable reserves $ 1,609 $ 934 $ 396 $ 2,147 Fiscal year ended October 31, 2016 Allowance for doubtful accounts and notes receivable reserves 1,378 424 193 1,609 Fiscal year ended October 31, 2015 Allowance for doubtful accounts and notes receivable reserves $ 1,481 $ 350 $ 453 $ 1,378 1 Provision/(recovery). 2 Uncollectible accounts charged off. (Dollars in thousands) Balance as of the Beginning of the Fiscal Year Charged to Costs and Expenses 1 Deductions 2 Balance as of the End of the Fiscal Year Fiscal year ended October 31, 2017 Accrued advertising and marketing programs $ 81,315 $ 377,989 $ 373,370 $ 85,934 Fiscal year ended October 31, 2016 Accrued advertising and marketing programs 76,689 355,509 350,883 81,315 Fiscal year ended October 31, 2015 Accrued advertising and marketing programs $ 66,169 $ 318,211 $ 307,691 $ 76,689 1 Provision consists of off-invoice discounts, rebate programs, incentive discounts, financing programs, various commissions, and cooperative advertising. The expense of each program is classified either as a reduction from gross sales or as a component of selling, general, and administrative expense as explained in more detail in the section entitled "Sales Promotions and Incentives" included in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this report and in Note 1 of the Notes to Consolidated Financial Statements, in the section entitled "Sales Promotions and Incentives" included in Part II, Item 8, "Financial Statements and Supplementary Data" of this report. 2 Claims paid. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA (Policies) | 12 Months Ended |
Oct. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying Consolidated Financial Statements include the accounts of The Toro Company and its wholly owned subsidiaries (the "company"). The company uses the equity method to account for investments over which it has the ability to exercise significant influence over operating and financial policies. Consolidated net earnings include the company's share of the net earnings (losses) of these equity method investments. The cost method is used to account for investments in companies that the company does not control and for which it does not have the ability to exercise significant influence over operating and financial policies. These cost method investments are recorded at cost. All intercompany accounts and transactions have been eliminated from the Consolidated Financial Statements. |
Stock Split | Stock Split On August 18, 2016, the company announced that its Board of Directors declared a two -for-one stock split of the company's common stock, effected in the form of a 100 percent stock dividend. The stock split dividend was distributed or paid on September 16, 2016, to stockholders of record as of September 1, 2016. Earnings and dividends declared per share and weighted-average shares outstanding are presented in this report after the effect of the 100 percent stock dividend. The two-for-one stock split is reflected in the share amounts for prior periods presented in this report. |
Accounting Estimates | Accounting Estimates In preparing the Consolidated Financial Statements in conformity with United States ("U.S.") generally accepted accounting principles ("U.S. GAAP"), management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. Estimates are used in determining, among other items, sales promotions and incentives accruals, incentive compensation accruals, income tax accruals, inventory valuation, warranty reserves, earn-out liabilities, allowance for doubtful accounts, pension and post-retirement accruals, self-insurance accruals, useful lives for tangible and definite-lived intangible assets, and future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets. These estimates and assumptions are based on management's best estimates and judgments at the time they are made. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with certainty, actual amounts could differ significantly from those estimated at the time the Consolidated Financial Statements are prepared. Changes in those estimates will be reflected in the Consolidated Financial Statements in future periods. |
Cash and Cash Equivalents | Cash and Cash Equivalents The company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. As of October 31, 2017 , cash and short-term investments held by the company's foreign subsidiaries that are not available to fund domestic operations unless repatriated were $133,488 . |
Receivables | Receivables The company's financial exposure to collection of accounts receivable is reduced due to its Red Iron Acceptance, LLC ("Red Iron") joint venture with TCF Inventory Finance, Inc. ("TCFIF"), as further discussed in Note 3. For receivables not serviced through Red Iron, the company grants credit to customers in the normal course of business and performs on-going credit evaluations of customers. Receivables are recorded at original carrying amount less estimated allowance for doubtful accounts. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The company estimates the balance of allowance for doubtful accounts by analyzing the age of accounts and notes receivable balances and applying historical write-off trend rates. The company also estimates separately specific customer balances when it is deemed probable that the balance is uncollectible. Account balances are charged off against the allowance when all collection efforts have been exhausted. |
Inventory Valuations | Inventory Valuations Inventories are valued at the lower of cost or net realizable value, with cost determined by the last-in, first-out ("LIFO") method for a majority of the company's inventories. The first-in, first-out ("FIFO") method is used for all other inventories, constituting 31 percent and 33 percent of total inventories as of October 31, 2017 and 2016 , respectively. The company establishes a reserve for excess, slow-moving, and obsolete inventory that is equal to the difference between the cost and estimated net realizable value for that inventory. These reserves are based on a review and comparison of current inventory levels to planned production, as well as planned and historical sales of the inventory. During fiscal 2017 LIFO layers were not reduced; however, in fiscal 2016 LIFO layers were reduced, which resulted in charging lower inventory costs prevailing in previous years to cost of sales, thus reducing cost of sales by $60 . Inventories were as follows: October 31 2017 2016 Raw materials and work in process $ 100,077 $ 90,463 Finished goods and service parts 295,716 274,929 Total FIFO value 395,793 365,392 Less: adjustment to LIFO value 66,801 58,358 Total inventories, net $ 328,992 $ 307,034 |
Property and Depreciation | Property and Depreciation Property, plant and equipment are carried at cost. The company provides for depreciation of property, plant and equipment utilizing the straight-line method over the estimated useful lives of the assets. Buildings, including leasehold improvements, are generally depreciated over 10 to 40 years. Machinery and equipment are generally depreciated over two to 15 years and tooling costs are generally depreciated over three to five years. Software and web site development costs are generally amortized over two to five years. Expenditures for major renewals and improvements, which substantially increase the useful lives of existing assets, are capitalized, and expenditures for general maintenance and repairs are charged to operating expenses as incurred. Interest is capitalized during the construction period for significant capital projects. During the fiscal years ended October 31, 2017 , 2016 , and 2015 , the company capitalized $344 , $549 , and $897 of interest, respectively. Property, plant and equipment was as follows: October 31 2017 2016 Land and land improvements $ 38,060 $ 34,744 Buildings and leasehold improvements 194,995 182,121 Machinery and equipment 349,976 325,595 Tooling 197,299 200,842 Computer hardware and software 88,152 85,173 Construction in process 17,132 9,561 Property, plant and equipment 885,614 838,036 Less: accumulated depreciation 650,384 615,998 Property, plant and equipment, net $ 235,230 $ 222,038 During fiscal years 2017 , 2016 , and 2015 , the company recorded depreciation expense of $54,679 , $53,355 , and $50,322 , respectively. |
Goodwill and Indefinite-Life Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the cost of acquisitions in excess of the fair values assigned to identifiable net assets acquired. Goodwill is assigned to reporting units based upon the expected benefit of the synergies of the acquisition. Goodwill and certain trade names, which are considered to have indefinite lives, are not amortized; however, the company reviews them for impairment annually during the fourth quarter of each fiscal year or more frequently if changes in circumstances or occurrence of events suggest the fair value may not be recoverable. During the fourth quarter of fiscal 2017 , the company performed its annual goodwill impairment test. In performing the annual goodwill impairment test, the company first reviewed its reporting units and determined that it has nine reporting units, which are the same as its nine operating segments. Seven reporting units contain goodwill on their respective balance sheets. Next, the company performed an analysis of qualitative factors to determine whether changes in events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount and accordingly, whether it is necessary to perform a quantitative two-step goodwill impairment test. Based on the company's analysis of qualitative factors, the company determined that it was not necessary to perform a quantitative two-step goodwill impairment test for any of its reporting units. During the fourth quarter of fiscal 2017 , the company also performed an assessment of its indefinite-lived intangible assets, which consist of certain trade names. The company's estimate of the fair value of its trade names are based on a discounted cash flow model using inputs which included: projected revenues from the company's forecasting process; assumed royalty rates that could be payable if the company did not own the trade name; and a discount rate. Based on this analysis, which was also performed in prior fiscal years, the company concluded its indefinite-lived intangible assets were not impaired during fiscal 2017 , 2016 , or 2015 . |
Other Long-Lived Assets | Other Long-Lived Assets Other long-lived assets consist of property, plant and equipment and definite-lived intangible assets. The company's definite-lived intangible assets are identifiable assets that arose from purchase acquisitions consisting primarily of patents, non-compete agreements, customer relationships, trade names, and developed technology and are amortized on a straight-line basis over periods ranging from one to 20 years. The company reviews other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Asset groups have identifiable cash flows and are largely independent of other asset groups. An impairment loss is recognized when estimated undiscounted future cash flows from the operation or disposition of the asset group are less than the carrying amount of the asset group. Measurement of an impairment loss is based on the excess of the carrying amount of the asset group over its fair value. Fair value is measured using a discounted cash flow model or independent appraisals, as appropriate. Based on the company's impairment analysis for other long-lived assets, the company did not have any impairment losses for fiscal 2017 and 2016 . For fiscal 2015 , the company wrote down $1,383 of other long-lived assets. For other long-lived assets to be abandoned, the company tests for potential impairment. If the company commits to a plan to abandon or dispose of an other long-lived asset before the end of its previously estimated useful life, depreciation or amortization estimates are revised. |
Accounts Payable | Accounts Payable The company has a customer-managed service agreement with a third party to provide a web-based platform that facilitates participating suppliers' ability to finance payment obligations from the company with a designated third party financial institution. Participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the company prior to their scheduled due dates at a discounted price to a participating financial institution. The company's obligations to its suppliers, including amounts due and scheduled payment dates, are not affected by suppliers' decisions to finance amounts under this arrangement. As of October 31, 2017 and 2016 , $24,455 and $16,249 , respectively, of the company's outstanding payment obligations had been placed on the accounts payable tracking system. |
Insurance | Insurance The company is self-insured for certain losses relating to employee medical, dental, workers' compensation and certain product liability claims. Specific stop loss coverages are provided for catastrophic claims in order to limit exposure to significant claims. Losses and claims are charged to operations when it is probable a loss has been incurred and the amount can be reasonably estimated. Self-insured liabilities are based on a number of factors, including historical claims experience, an estimate of claims incurred but not reported, demographic and severity factors, and utilizing valuations provided by independent third-party actuaries. |
Accrued Warranties | Accrued Warranties The company recognizes expense and provides an accrual for estimated future warranty costs at the time of sale and also establishes accruals for major rework campaigns. Warranty accruals are based primarily on the estimated number of products under warranty, historical average costs incurred to service warranty claims, the trend in the historical ratio of claims to sales and the historical length of time between the sale and resulting warranty claim. The company periodically assesses the adequacy of its warranty accruals based on changes in these factors and records any necessary adjustments if actual claims experience indicates that adjustments are necessary. The changes in accrued warranties were as follows: Fiscal Years Ended October 31 2017 2016 Beginning balance $ 72,158 $ 70,734 Warranty provisions 46,150 44,260 Warranty claims (40,940 ) (41,102 ) Changes in estimates (3,213 ) (1,734 ) Ending balance $ 74,155 $ 72,158 |
Derivatives | Derivatives Derivative instruments, consisting mainly of forward currency contracts, are used to hedge most foreign currency transactions, including forecasted sales and purchases denominated in foreign currencies. The company may also utilize forward currency contracts or cross currency swaps to offset intercompany loan exposures. All derivative instruments are recognized on the Consolidated Balance Sheets at fair value as either assets or liabilities. If the derivative instrument is designated as a cash flow hedging instrument, the effective portion of the change in the fair value of the derivative instrument is recorded as a component of other comprehensive income within the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Stockholders' Equity until net earnings is affected by the variability of the cash flows of the hedged transaction. Derivatives that do not meet the requirements for cash flow hedge accounting are adjusted to fair value through other income, net, on the Consolidated Statements of Earnings. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The functional currency of the company's foreign operations is generally the applicable local currency. The functional currency is translated into U.S. dollars for balance sheet accounts using current exchange rates in effect as of the balance sheet date and for revenue and expense accounts using a weighted-average exchange rate during the fiscal year. The translation adjustments are deferred as a component of other comprehensive income within the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Stockholders' Equity. Gains or losses resulting from transactions denominated in foreign currencies are included in other income, net in the Consolidated Statements of Earnings. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years that those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. A valuation allowance is provided when, in management's judgment, it is more likely than not that some portion or all of the deferred tax asset will not be realized. The company has reflected the necessary deferred tax assets and liabilities in the accompanying Consolidated Balance Sheets. Management believes the future tax deductions will be realized principally through carryback to taxable income in prior years, future reversals of existing taxable temporary differences and future taxable income. The company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The company also records interest and penalties related to unrecognized tax benefits in income tax expense. |
Revenue Recognition | Revenue Recognition The company recognizes revenue for product sales when persuasive evidence of an arrangement exists, title and risk of ownership passes to the customer, the sales price is fixed or determinable and collectability is probable. These criteria are typically met at the time product is shipped, or in the case of certain agreements, when product is delivered. A provision is made at the time the related revenue is recognized for estimated product returns, floor plan costs, rebates, and other sales promotion expenses. Sales, use, value-added and other excise taxes are not recognized in revenue. Freight revenue billed to customers is included in net sales. The company ships some of its products to a key retailer's seasonal distribution centers on a consignment basis. The company retains title to its products stored at the seasonal distribution centers. As the company's products are removed from the seasonal distribution centers by the key retailer and shipped to the key retailer's stores, title passes from the company to the key retailer. At that time, the company invoices the key retailer and recognizes revenue for these consignment transactions. The company does not offer a right of return for products shipped to the key retailer's stores from the seasonal distribution centers. From time to time, the company also stores inventory on a consignment basis at other customers' locations. The amount of consignment inventory as of October 31, 2017 and 2016 was $19,327 and $22,443 , respectively. Revenue earned from service and maintenance contracts is recognized ratably over the contractual period. Revenue from extended warranty programs is deferred at the time the contract is sold and amortized into net sales using the straight-line method over the extended warranty period. |
Sales Promotions and Incentives | Sales Promotions and Incentives At the time of sale, the company records an estimate for sales promotion and incentive costs. The company's estimates of sales promotion and incentive costs are based on the terms of the arrangements with customers, historical payment experience, field inventory levels, volume purchases, and expectations for changes in relevant trends in the future. The expense of each program is classified as a reduction from gross sales or as a component of selling, general and administrative expense. Examples of significant sales promotions and incentive programs in which the related expense is classified as a reduction from gross sales are as follows: • Off-Invoice Discounts: The company's costs for off-invoice discounts represent a reduction in the selling price of its products given at the time of sale. • Rebate Programs: The company's rebate programs are generally based on claims submitted from either its direct customers or end-users of its products, depending upon the program. The amount of the rebate varies based on the specific program and is either a dollar amount or a percentage of the purchase price and can also be based on actual retail price as compared to the company's selling price. • Incentive Discounts: The company's costs for incentive discount programs are based on its customers’ purchases of certain quantities or mixes of product during a specified time period which are tracked on an annual basis. • Financing Programs: The company's costs for financing programs, namely floor planning and retail financing, represent financing costs associated with programs under which it pays a portion of the interest cost to finance distributor and dealer inventories through third party financing arrangements for a specific period of time. Retail financing is similar to floor planning with the difference being that retail financing programs are offered to end-user customers under which the company pays a portion of interest costs on behalf of end-users for financing purchases of its equipment. • Commissions Paid to Home Center Customers: The company pays commissions to home center customers as an off-invoice discount. These commissions do not represent any selling effort by the home center customer but rather is a discount from the selling price of the product. Examples of significant sales promotions and incentive programs in which the related expense is classified as a component of selling, general, and administrative expense are as follows: • Commissions Paid to Distributors and Dealers: For certain products, the company uses a distribution network of dealers and distributors that purchase and take possession of products for sale to the end customer. In addition, the company has dealers and distributors that act as sales agents for it on certain products using a direct-selling type model. Under this direct-selling type model, the company's network of distributors and dealers facilitates a sale directly to the dealer or end-user customer on its behalf. Commissions to distributors and dealers in these instances represent commission payments to sales agents that are also its customers. • Cooperative Advertising: Cooperative advertising programs are based on advertising costs incurred by distributors and dealers for promoting the company's products. The company supports a portion of those advertising costs in which claims are submitted by the distributor or dealer along with evidence of the advertising material procured/produced and evidence of the cost incurred in the form of third party invoices or receipts. |
Cost of Sales | Cost of Sales Cost of sales is primarily comprised of direct materials and supplies consumed to manufacture the company's products, as well as manufacturing labor and direct overhead expense necessary to convert purchased materials and supplies into finished product. Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, obsolescence expense, cost of services provided, and cash discounts on payments to vendors. |
Selling, General, and Administrative Expense | Selling, General and Administrative Expense Selling, general and administrative expense primarily comprises payroll and benefit costs, occupancy and operating costs of distribution and corporate facilities, warranty expense, depreciation and amortization expense on non-manufacturing assets, advertising and marketing expenses, selling expenses, engineering and research costs, information systems costs, incentive and profit sharing expense, and other miscellaneous administrative costs, such as legal costs for internal and outside services that are expensed as incurred. |
Cost of Financing Distributor/Dealer Inventory | Cost of Financing Distributor / Dealer Inventory The company enters into limited inventory repurchase agreements with Red Iron and in limited instances, a third-party financing company for certain of the company's independent dealers in Australia. The company has repurchased immaterial amounts of inventory under these repurchase agreements over the last three fiscal years. Included as a reduction to gross sales are costs associated with programs under which the company shares the expense of financing distributor and dealer inventories, referred to as floor plan expenses. This charge represents interest for a pre-established length of time based on a predefined rate from a contract with third party financing sources to finance distributor and dealer inventory purchases. These financing arrangements are used by the company to assist customers in financing inventory. The financing costs for distributor and dealer inventories were $30,106 , $28,773 , and $24,130 for the fiscal years ended October 31, 2017 , 2016 and 2015 , respectively. |
Advertising | Advertising General advertising expenditures are expensed the first time advertising takes place. Production costs associated with advertising are expensed in the period incurred. Cooperative advertising represents expenditures for shared advertising costs that the company reimburses to customers and is classified as a component of selling, general and administrative expense. These obligations are accrued and expensed when the related revenues are recognized in accordance with the programs established for various product lines. Advertising costs were $42,963 , $41,837 , and $42,843 for the fiscal years ended October 31, 2017 , 2016 , and 2015 , respectively. |
Stock-Based Compensation | Stock-Based Compensation The company's stock-based compensation awards are generally granted to executive officers, other employees, and non-employee members of the company's Board of Directors, and include performance share awards that are contingent on the achievement of performance goals of the company, non-qualified stock options, restricted stock units, and restricted stock awards. Generally, compensation expense equal to the grant date fair value is recognized for these awards over the vesting period and is classified in selling, general and administrative expense. Stock options granted to executive officers and other employees are subject to accelerated expensing if the option holder meets the retirement definition set forth in The Toro Company Amended and Restated 2010 Equity and Incentive Plan, as amended and restated (the "2010 plan"). In that case, the fair value of the options is expensed in the fiscal year of grant because generally the option holder must be employed as of the end of the fiscal year in which the options are granted in order for the options to continue to vest following retirement. Similarly, if a non-employee director has served on the company's Board of Directors for ten full fiscal years or more, the awards vest immediately upon retirement; and therefore, the fair value of the options granted is fully expensed on the date of the grant. See Note 10 for additional information regarding stock-based compensation plans. |
Net Earnings Per Share | Net Earnings Per Share Basic net earnings per share is calculated using net earnings available to common stockholders divided by the weighted-average number of shares of common stock outstanding during the year plus the assumed issuance of contingent shares. Diluted net earnings per share is similar to basic net earnings per share except that the weighted-average number of shares of common stock outstanding plus the assumed issuance of contingent shares is increased to include the number of additional shares of common 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 stock units. Reconciliations of basic and diluted weighted-average shares of common stock outstanding are as follows: (Shares in thousands) 2017 2016 2015 1 Basic Weighted-average number of shares of common stock 108,299 109,816 111,107 Assumed issuance of contingent shares 13 18 23 Weighted-average number of shares of common stock and assumed issuance of contingent shares 108,312 109,834 111,130 Diluted Weighted-average number of shares of common stock and assumed issuance of contingent shares 108,312 109,834 111,130 Effect of dilutive securities 2,940 2,153 2,384 Weighted-average number of shares of common stock, assumed issuance of contingent shares, and effect of dilutive securities 111,252 111,987 113,514 1 Share data has been adjusted for prior periods presented to reflect a two-for-one stock split effective September 16, 2016. Incremental shares from options and restricted stock units are computed by the treasury stock method. Options for the purchase of 353,897 , 310,566 , and 290,120 shares of common stock during fiscal 2017 , 2016 , and 2015 , respectively, were excluded from the computation of diluted net earnings per share because they were anti-dilutive. |
Cash Flow Presentation | Cash Flow Presentation The Consolidated Statements of Cash Flows are prepared using the indirect method, which reconciles net earnings to cash flow from operating activities. The necessary adjustments include the removal of timing differences between the occurrence of operating receipts and payments and their recognition in net earnings. The adjustments also remove from operating activities cash flows arising from investing and financing activities, which are presented separately from operating activities. Cash flows from foreign currency transactions and operations are translated at an average exchange rate for the period. Cash paid for acquisitions is classified as investing activities. |
New Accounting Pronouncements Adopted | New Accounting Pronouncements Adopted In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . This amended guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability. This amended guidance was retrospectively adopted in the first quarter of fiscal 2017. Prior periods have been retrospectively adjusted for the adoption of this amended guidance and are reclassified in the Consolidated Balance Sheets presentation as a direct deduction from the carrying amount of the related debt liability. The adoption of this guidance did not have a material impact on the company's Consolidated Financial Statements. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement . This amended guidance requires customers to determine whether or not an arrangement contains a software license element. If the arrangement contains a software element, the related fees paid should be accounted for as an acquisition of a software license. If the arrangement does not contain a software license, it is accounted for as a service contract. This amended guidance was adopted in the first quarter of fiscal 2017. The adoption of this guidance did not have an impact on the company's Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09, Stock-based Compensation: Improvements to Employee Share-based Payment Accounting. This amended guidance simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and statement of cash flow classification. The company elected to early adopt this amended guidance effective November 1, 2016, which was the first day of the company's first quarter of fiscal 2017. The impact of the early adoption resulted in the following: • The company recorded a discrete tax benefit of $19,719 related to the excess tax benefit on share-based awards within income tax expense for the twelve months ended October 31, 2017 . Prior to the adoption of this standard, these tax benefits were included in additional paid-in capital on the Consolidated Balance Sheets. Adoption of this standard could add increased variability to the company's provision for income taxes mainly due to timing of stock option exercises, vesting of restricted stock units and the company's common stock price. • The company elected not to change its policy on accounting for forfeitures and will continue to estimate a requisite forfeiture rate. • The company has elected to change its policy on tax withholding requirements and will allow participants to withhold up to the maximum statutory rate prospectively on new awards. As of November 1, 2016, the company did not have any outstanding liabilities on awards which would require a cumulative-effect adjustment to retained earnings. • The company no longer presents the cash received from excess tax benefits within cash flows from financing activities as this benefit is now reflected within cash flows from operating activities in the Consolidated Statements of Cash Flows. The company elected to apply this change retrospectively and the change resulted in a $19,719 , $12,495 , and $8,459 increase in cash flows from operating activities for the twelve months ended October 31, 2017 , 2016 , and 2015 , respectively. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This amended guidance removes the prohibition against the immediate recognition of the current and deferred tax effects of intra-entity transfers of assets other than inventory. This amended guidance was early adopted in the first quarter of fiscal 2017 using a modified retrospective basis. The company recorded a cumulative effect adjustment to the beginning balance of its retained earnings in the first quarter of fiscal 2017 for remaining unamortized deferred tax expense of intra-entity transfers of fixed assets totaling $2,361 . In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which amends guidance on the classification of certain cash receipts and payments in the statement of cash flows. The company elected to early adopt this amended guidance retrospectively effective November 1, 2016. The retrospective early adoption resulted in an $8,050 , $9,848 , and $4,264 increase in cash flows from operating activities for the twelve months ended October 31, 2017 , 2016 , and 2015 , respectively. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , which clarifies the definition of a business in Accounting Standards Codification 805. The company elected to early adopt this amended guidance retrospectively in the fourth quarter of fiscal 2017. The adoption of this guidance did not have an impact on the company's Consolidated Financial Statements. |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventories | Inventories were as follows: October 31 2017 2016 Raw materials and work in process $ 100,077 $ 90,463 Finished goods and service parts 295,716 274,929 Total FIFO value 395,793 365,392 Less: adjustment to LIFO value 66,801 58,358 Total inventories, net $ 328,992 $ 307,034 |
Schedule of property, plant and equipment | Property, plant and equipment was as follows: October 31 2017 2016 Land and land improvements $ 38,060 $ 34,744 Buildings and leasehold improvements 194,995 182,121 Machinery and equipment 349,976 325,595 Tooling 197,299 200,842 Computer hardware and software 88,152 85,173 Construction in process 17,132 9,561 Property, plant and equipment 885,614 838,036 Less: accumulated depreciation 650,384 615,998 Property, plant and equipment, net $ 235,230 $ 222,038 |
Schedule of changes in accrued warranties | The changes in accrued warranties were as follows: Fiscal Years Ended October 31 2017 2016 Beginning balance $ 72,158 $ 70,734 Warranty provisions 46,150 44,260 Warranty claims (40,940 ) (41,102 ) Changes in estimates (3,213 ) (1,734 ) Ending balance $ 74,155 $ 72,158 |
Reconciliations of basic and diluted weighted-average shares of common stock outstanding | Reconciliations of basic and diluted weighted-average shares of common stock outstanding are as follows: (Shares in thousands) 2017 2016 2015 1 Basic Weighted-average number of shares of common stock 108,299 109,816 111,107 Assumed issuance of contingent shares 13 18 23 Weighted-average number of shares of common stock and assumed issuance of contingent shares 108,312 109,834 111,130 Diluted Weighted-average number of shares of common stock and assumed issuance of contingent shares 108,312 109,834 111,130 Effect of dilutive securities 2,940 2,153 2,384 Weighted-average number of shares of common stock, assumed issuance of contingent shares, and effect of dilutive securities 111,252 111,987 113,514 1 Share data has been adjusted for prior periods presented to reflect a two-for-one stock split effective September 16, 2016. |
INVESTMENT IN JOINT VENTURE (Ta
INVESTMENT IN JOINT VENTURE (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of summarized financial information | Summarized financial information for Red Iron is presented as follows: For the Twelve Months Ended October 31 2017 2016 2015 Revenues $ 35,158 $ 31,812 $ 27,483 Interest and operating expenses, net (13,030 ) (10,506 ) (8,885 ) Net income $ 22,128 $ 21,306 $ 18,598 As of October 31 2017 2016 Finance receivables, net $ 407,533 $ 370,169 Other assets 2,888 4,416 Total assets $ 410,421 $ 374,585 Notes payable $ 347,968 $ 321,378 Other liabilities 16,617 11,607 Partners' capital 45,836 41,600 Total liabilities and partners' capital $ 410,421 $ 374,585 |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of other income (expense) | Other income (expense) is as follows: Fiscal Years Ended October 31 2017 2016 2015 Interest income $ 1,359 $ 827 $ 494 Retail financing revenue 1,097 1,087 1,086 Foreign currency exchange rate gain (loss) 1,543 974 (324 ) Gain on sale of business — 340 — Non-cash income from finance affiliate 9,960 9,588 8,353 Litigation recovery (settlements), net (65 ) 1,300 125 Miscellaneous 3,293 1,284 940 Total other income, net $ 17,187 $ 15,400 $ 10,674 |
GOODWILL AND OTHER INTANGIBLE32
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in net carrying amount of goodwill | The changes in the carrying amount of goodwill for fiscal 2017 and 2016 were as follows: Professional Segment Residential Segment Total Balance as of October 31, 2015 $ 184,766 $ 10,767 $ 195,533 Translation adjustments (428 ) (323 ) (751 ) Balance as of October 31, 2016 184,338 10,444 194,782 Goodwill acquired 8,921 — 8,921 Translation adjustments 1,205 121 1,326 Balance as of October 31, 2017 $ 194,464 $ 10,565 $ 205,029 |
Schedule of components of other intangible assets | The components of other intangible assets were as follows: October 31, 2017 Gross Carrying Amount Accumulated Amortization Net Patents $ 15,162 $ (11,599 ) $ 3,563 Non-compete agreements 6,896 (6,775 ) 121 Customer-related 87,461 (18,940 ) 68,521 Developed technology 30,212 (26,939 ) 3,273 Trade names 2,330 (1,637 ) 693 Other 800 (800 ) — Total amortizable 142,861 (66,690 ) 76,171 Non-amortizable - trade names 27,572 — 27,572 Total other intangible assets, net $ 170,433 $ (66,690 ) $ 103,743 October 31, 2016 Gross Carrying Amount Accumulated Amortization Net Patents $ 15,151 $ (10,866 ) $ 4,285 Non-compete agreements 6,886 (6,681 ) 205 Customer-related 84,353 (14,434 ) 69,919 Developed technology 28,648 (23,712 ) 4,936 Trade names 28,715 (4,235 ) 24,480 Other 800 (800 ) — Total amortizable 164,553 (60,728 ) 103,825 Non-amortizable - trade names 4,268 — 4,268 Total other intangible assets, net $ 168,821 $ (60,728 ) $ 108,093 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | A summary of long-term debt is as follows: October 31 2017 2016 Term loan, due October 25, 2019 $ 100,750 $ 110,500 7.800% Debentures, due June 15, 2027 100,000 100,000 6.625% Senior Notes, due May 1, 2037 123,792 123,730 4% Unsecured Note, due November 14, 2017 10,008 19,677 Less: unamortized discounts, debt issuance costs and deferred charges (2,663 ) (2,946 ) Total long-term debt 331,887 350,961 Less: current portion of long-term debt 26,258 22,484 Long-term debt, less current portion $ 305,629 $ 328,477 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of components of accumulated other comprehensive loss ("AOCL"), net of tax, within the consolidated statements of stockholders' equity | Components of accumulated other comprehensive loss ("AOCL"), net of tax, within the Consolidated Statements of Stockholders' Equity are as follows: As of October 31 2017 2016 2015 Foreign currency translation adjustments $ 21,303 $ 31,430 $ 24,328 Pension and post-retirement benefits 2,012 6,359 5,386 Derivative instruments 805 647 129 Total accumulated other comprehensive loss $ 24,120 $ 38,436 $ 29,843 |
Schedule of components and activity of accumulated other comprehensive loss | The components and activity of AOCL are as follows: Foreign Currency Translation Adjustments Pension and Post-Retirement Benefits Cash Flow Derivative Instruments Total Balance as of October 31, 2016 $ 31,430 $ 6,359 $ 647 $ 38,436 Other comprehensive income before reclassifications (10,127 ) (4,347 ) (233 ) (14,707 ) Amounts reclassified from AOCL — — 391 391 Net current period other comprehensive (income) loss (10,127 ) (4,347 ) 158 (14,316 ) Balance as of October 31, 2017 $ 21,303 $ 2,012 $ 805 $ 24,120 Foreign Currency Translation Adjustments Pension and Post-Retirement Benefits Cash Flow Derivative Instruments Total Balance as of October 31, 2015 $ 24,328 $ 5,386 $ 129 $ 29,843 Other comprehensive loss before reclassifications 7,102 973 1,116 9,191 Amounts reclassified from AOCL — — (598 ) (598 ) Net current period other comprehensive loss 7,102 973 518 8,593 Balance as of October 31, 2016 $ 31,430 $ 6,359 $ 647 $ 38,436 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of earnings before income taxes | Earnings before income taxes were as follows: Fiscal Years Ended October 31 2017 2016 2015 Earnings before income taxes: U.S. $ 307,136 $ 292,184 $ 254,276 Foreign 46,048 38,276 36,755 Total earnings before income taxes $ 353,184 $ 330,460 $ 291,031 |
Schedule of reconciliation of the statutory federal income tax rate to the company's consolidated effective tax rate | A reconciliation of the statutory federal income tax rate to the company's consolidated effective tax rate is summarized as follows: Fiscal Years Ended October 31 2017 2016 2015 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % Excess deduction for stock compensation (5.3 ) — — Domestic manufacturer's deduction (1.2 ) (0.8 ) (1.7 ) State and local income taxes, net of federal benefit 0.5 1.5 2.2 Foreign taxes (2.3 ) (1.8 ) (3.1 ) Federal research tax credit (1.5 ) (1.5 ) (0.9 ) Other, net (1.0 ) (2.3 ) (0.8 ) Consolidated effective tax rate 24.2 % 30.1 % 30.7 % |
Schedule of components of the provision for income taxes | Components of the provision for income taxes were as follows: Fiscal Years Ended October 31 2017 2016 2015 Current provision: Federal $ 83,091 $ 77,685 $ 75,496 State 3,036 6,929 9,389 Foreign 8,166 6,295 6,219 Total current provision $ 94,293 $ 90,909 $ 91,104 Deferred provision (benefit): Federal $ (8,774 ) $ 7,283 $ 430 State (101 ) 297 — Foreign 49 977 (2,094 ) Total deferred provision (benefit) (8,826 ) 8,557 (1,664 ) Total provision for income taxes $ 85,467 $ 99,466 $ 89,440 |
Schedule of tax effects of temporary differences that give rise to the net deferred income tax assets | The tax effects of temporary differences that give rise to deferred income tax assets, net, are presented below: October 31 2017 2016 Deferred income tax assets: Compensation and benefits $ 38,753 $ 37,200 Warranty and insurance 23,993 17,443 Advertising and sales allowance 10,428 11,185 Other 12,234 10,327 Valuation allowance (1,951 ) (1,867 ) Total deferred income tax assets $ 83,457 $ 74,288 Deferred income tax liabilities: Depreciation $ (13,259 ) $ (13,578 ) Amortization (7,841 ) (3,482 ) Total deferred income tax liabilities (21,100 ) (17,060 ) Deferred income tax assets, net $ 62,357 $ 57,228 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Unrecognized tax benefits as of October 31, 2016 $ 5,175 Increase as a result of tax positions taken during a prior period 432 Increase as a result of tax positions taken during the current period 948 Decrease relating to settlements with taxing authorities (2,673 ) Reductions as a result of statute of limitations lapses (769 ) Unrecognized tax benefits as of October 31, 2017 $ 3,113 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of compensation costs related to stock-based awards | The compensation costs related to stock-based awards were as follows: Fiscal Years Ended October 31 2017 2016 2015 Stock option awards $ 5,496 $ 4,606 $ 4,704 Restricted stock and restricted stock units 2,300 1,891 1,756 Performance share awards 5,183 3,676 3,964 Unrestricted common stock awards 538 464 412 Total compensation cost for stock-based awards $ 13,517 $ 10,637 $ 10,836 Related tax benefit from stock-based awards $ 5,001 $ 3,936 $ 4,009 |
Schedule of stock options activity | The table below presents stock option activity for fiscal 2017 : Stock Option Awards Weighted-Average Exercise Price Weighted-Average Contractual Life (years) Aggregate Intrinsic Value Outstanding as of October 31, 2016 4,879,984 $ 20.07 5.3 $ 135,697 Granted 554,364 55.82 Exercised (954,909 ) 11.48 ​ ​ Canceled/forfeited (19,744 ) 51.74 Outstanding as of October 31, 2017 4,459,695 $ 26.22 5.3 $ 163,369 Exercisable as of October 31, 2017 3,331,979 $ 19.64 4.3 $ 143,960 |
Schedule of total market value and the intrinsic value of options exercised | The table below presents the total market value of stock options exercised and the total intrinsic value of options exercised during the following fiscal years: Fiscal Years Ended October 31 2017 2016 2015 Market value of stock options exercised $ 58,976 $ 61,468 $ 27,860 Intrinsic value of options exercised 1 $ 48,017 $ 41,365 $ 18,739 1 Intrinsic value is calculated as amount by which the stock price at exercise date exceeded the option exercise price. |
Schedule of weighted-average valuation assumptions of stock-based compensation | The table below illustrates the weighted-average valuation assumptions for options granted in the following fiscal periods: Fiscal Years Ended October 31 2017 2016 2015 Expected life of option in years 6.02 5.97 5.94 Expected stock price volatility 22.15 % 24.04 % 29.66 % Risk-free interest rate 2.03 % 1.80 % 1.61 % Expected dividend yield 1.01 % 1.24 % 1.29 % Weighted-average fair value at date of grant $ 12.55 $ 8.79 $ 8.41 |
Schedule of restricted stock and restricted stock unit awards granted | Factors related to the company's restricted stock and restricted stock units are as follows: Fiscal Years Ended October 31 2017 2016 2015 Weighted-average fair value at date of grant $ 66.09 $ 41.83 $ 33.88 Fair value of restricted stock and restricted stock units vested $ 3,604 $ 2,681 $ 2,744 |
Schedule of unvested restricted stock shares and the weighted average fair value at the date of grant | The table below summarizes the activity during fiscal 2017 for unvested restricted stock units: Restricted Stock Units Weighted-Average Fair Value at Date of Grant Unvested as of October 31, 2016 139,480 $ 34.51 Granted 43,167 66.09 Vested (53,709 ) 33.14 Forfeited (4,666 ) 37.38 Unvested as of October 31, 2017 124,272 $ 45.66 |
Schedule of performance share awards granted | Factors related to the company's performance share awards are as follows: Fiscal Years Ended October 31 2017 2016 2015 Weighted-average fair value at date of grant $ 54.52 $ 38.89 $ 32.84 Fair value of performance share awards vested $ 7,018 $ 7,454 $ 7,989 |
Schedule of unvested performance share awards and the weighted average fair value at the date of grant | The table below summarizes the activity during fiscal 2017 for unvested performance share awards: Performance Shares Weighted-Average Fair Value at Date of Grant Unvested as of October 31, 2016 317,850 $ 33.95 Granted 74,800 54.52 Vested (107,198 ) 30.10 Canceled/forfeited (3,301 ) 47.96 Unvested as of October 31, 2017 282,151 $ 40.71 |
EMPLOYEE RETIREMENT PLANS (Tabl
EMPLOYEE RETIREMENT PLANS (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of amounts recognized in accumulated other comprehensive loss | Amounts recognized in accumulated other comprehensive loss consisted of: Fiscal Years Ended October 31 Defined Benefit Pension Plans Post-retirement Benefit Plan Total 2017 Net actuarial loss (gain) $ 4,998 $ (2,986 ) $ 2,012 Accumulated other comprehensive loss (income) $ 4,998 $ (2,986 ) $ 2,012 2016 Net actuarial loss $ 5,496 $ 554 $ 6,050 Net prior service cost 309 — 309 Accumulated other comprehensive loss $ 5,805 $ 554 $ 6,359 |
Schedule of amounts included in accumulated other comprehensive loss and are expected to be recognized as components of net periodic benefit cost during next fiscal year | The following amounts are included in accumulated other comprehensive loss as of October 31, 2017 and are expected to be recognized as components of net periodic benefit cost during fiscal 2018: October 31, 2017 Defined Benefit Pension Plans Post-retirement Benefit Plan Total Net actuarial loss (gain) $ 128 $ (377 ) $ (249 ) Total $ 128 $ (377 ) $ (249 ) |
Schedule of amounts recognized in net periodic benefit cost and other comprehensive income | Amounts recognized in net periodic benefit cost and other comprehensive loss (income) consisted of: Fiscal Years Ended October 31 Defined Benefit Pension Plans Post-retirement Benefit Plan Total 2017 Net actuarial gain $ (280 ) $ (3,534 ) $ (3,814 ) Prior service cost 51 — 51 Amortization of unrecognized prior service credit (360 ) — (360 ) Amortization of unrecognized actuarial gain (219 ) (5 ) (224 ) Total recognized in other comprehensive income $ (808 ) $ (3,539 ) $ (4,347 ) Total recognized in net periodic benefit cost and other comprehensive loss (income) $ 22 $ (2,892 ) $ (2,870 ) |
SEGMENT DATA (Tables)
SEGMENT DATA (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Segment Reporting [Abstract] | |
Summarized financial information concerning the company's reportable segments | The following tables present summarized financial information concerning the company's reportable segments: Fiscal Year Ended October 31, 2017 Professional Residential Other Total Net sales $ 1,811,705 $ 673,247 $ 20,224 $ 2,505,176 Intersegment gross sales 27,893 332 (28,225 ) — Earnings (loss) before income taxes 379,496 74,704 (101,016 ) 353,184 Total assets 836,600 189,578 467,609 1,493,787 Capital expenditures 29,786 10,605 17,885 58,276 Depreciation and amortization $ 41,313 $ 10,308 $ 13,365 $ 64,986 Fiscal Year Ended October 31, 2016 Professional Residential Other Total Net sales $ 1,705,312 $ 669,131 $ 17,732 $ 2,392,175 Intersegment gross sales 28,138 354 (28,492 ) — Earnings (loss) before income taxes 352,060 73,691 (95,291 ) 330,460 Total assets 774,762 188,920 420,890 1,384,572 Capital expenditures 27,296 13,794 9,633 50,723 Depreciation and amortization $ 40,715 $ 10,406 $ 12,976 $ 64,097 Fiscal Year Ended October 31, 2015 Professional Residential Other Total Net sales $ 1,639,659 $ 725,682 $ 25,534 $ 2,390,875 Intersegment gross sales 45,634 406 (46,040 ) — Earnings (loss) before income taxes 308,010 84,956 (101,935 ) 291,031 Total assets 805,686 217,093 277,650 1,300,429 Capital expenditures 29,016 9,953 17,405 56,374 Depreciation and amortization $ 42,799 $ 9,131 $ 11,213 $ 63,143 |
Summary of the components of the loss before income taxes included in "Other" | The following table presents the details of the Other segment operating loss before income taxes: Fiscal Years Ended October 31 2017 2016 2015 Corporate expenses $ (100,928 ) $ (95,288 ) $ (95,167 ) Interest expense (19,113 ) (19,336 ) (18,757 ) Other income 19,025 19,333 11,989 Total operating loss $ (101,016 ) $ (95,291 ) $ (101,935 ) |
Schedule of net sales for groups of similar products and services | The following table presents net sales for groups of similar products and services: Fiscal Years Ended October 31 2017 2016 2015 Equipment $ 2,060,354 $ 2,001,150 $ 2,004,274 Irrigation and lighting 444,822 391,025 386,601 Total net sales $ 2,505,176 $ 2,392,175 $ 2,390,875 |
Schedule of geographic area data | The following geographic area data includes net sales based on product shipment destination and long-lived assets, which consist of net property, plant, and equipment, and is based on physical location in addition to allocated capital tooling from U.S. plant facilities: Fiscal Years Ended October 31 United States Foreign Countries Total 2017 Net sales $ 1,893,249 $ 611,927 $ 2,505,176 Long-lived assets $ 194,338 $ 40,892 $ 235,230 2016 Net sales $ 1,812,587 $ 579,588 $ 2,392,175 Long-lived assets $ 188,869 $ 33,169 $ 222,038 2015 Net sales $ 1,780,240 $ 610,635 $ 2,390,875 Long-lived assets $ 190,262 $ 34,733 $ 224,995 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of derivatives and consolidated balance sheet location | The following table presents the fair value of the company’s derivative instruments and Consolidated Balance Sheets location: Fair Value as of October 31 2017 2016 Derivative assets: Derivatives designated as cash flow hedging instruments Prepaid expenses and other current assets Forward currency contracts $ 1,014 $ 1,535 Derivatives not designated as cash flow hedging instruments Prepaid expenses and other current assets Forward currency contracts 27 432 Total assets $ 1,041 $ 1,967 Derivative liabilities: Derivatives designated as cash flow hedging instruments Accrued liabilities Forward currency contracts $ 1,563 $ 973 Derivatives not designated as cash flow hedging instruments Accrued liabilities Forward currency contracts 703 792 Total liabilities $ 2,266 $ 1,765 |
Schedule of impact of derivative instruments on consolidated statements of earnings for derivatives not designated as hedging instruments | The following table presents the impact of derivative instruments on the Consolidated Statements of Earnings for the company's derivatives not designated as cash flow hedging instruments for the fiscal years ended October 31, 2017 and 2016 : Gain (Loss) Recognized in Income on Derivatives Fiscal Years Ended October 31 2017 2016 Forward currency contracts Other income, net $ (4,251 ) $ (4 ) Cross currency contracts Other income, net — (191 ) Total derivatives not designated as cash flow hedging instruments $ (4,251 ) $ (195 ) |
Schedule of effects of the master netting arrangements on the fair value of the company's derivative contracts that are recorded in the Consolidated Balance Sheets | The following tables show the effects of the master netting arrangements on the fair value of the company's derivative instruments that are recorded in the Consolidated Balance Sheets: Fair Value as of October 31 2017 2016 Derivative assets: Forward currency contracts Gross amounts of recognized assets $ 1,055 $ 2,264 Gross liabilities offset in the Consolidated Balance Sheets (14 ) (297 ) Net amounts of assets presented in the Consolidated Balance Sheets $ 1,041 $ 1,967 Derivative liabilities: Forward currency contracts Gross amounts of recognized liabilities $ (2,266 ) $ (1,765 ) Gross assets offset in the Consolidated Balance Sheets — — Net amounts of liabilities presented in the Consolidated Balance Sheets $ (2,266 ) $ (1,765 ) |
Schedule of impact of derivative instruments on consolidated statements of earnings for derivatives designated as cash flow hedging instruments | The following table presents the impact and location of derivative instruments on the Consolidated Statements of Earnings for the ineffective portion and components excluded from effectiveness testing for the company's derivatives designated as cash flow hedging instruments for the fiscal years ended October 31, 2017 and 2016 : Gain (Loss) Recognized in Income on Derivatives Fiscal Years Ended October 31 2017 2016 Forward currency contracts Other income, net $ 231 $ 608 Total ineffective portion and components excluded from effectiveness testing $ 231 $ 608 The following table presents the impact and location of the amounts reclassified from AOCL into earnings on the Consolidated Statements of Earnings and the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the effective portion of the company's derivatives designated as cash flow hedging instruments for the fiscal years ended October 31, 2017 and 2016 : Gain (Loss) Reclassified from AOCL into Income Gain (Loss) Recognized in OCI on Derivatives Fiscal Years Ended October 31 2017 2016 2017 2016 Forward currency contracts Net sales $ 1,547 $ 2,094 $ (2,007 ) $ (961 ) Cost of sales (1,156 ) (2,598 ) 1,849 181 Cross currency contracts Other income, net — (94 ) — 255 Total derivatives designated as cash flow hedging instruments $ 391 $ (598 ) $ (158 ) $ (525 ) |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables present, by level within the fair value hierarchy, the company's financial assets and liabilities that are measured at fair value on a recurring basis as of October 31, 2017 and 2016 , according to the valuation technique utilized to determine their fair values: Fair Value Measurements Using Inputs Considered as: October 31, 2017 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 1,041 $ — $ 1,041 $ — Total assets $ 1,041 $ — $ 1,041 $ — Liabilities: Forward currency contracts $ 2,266 $ — $ 2,266 $ — Deferred compensation liabilities 630 — 630 — Total liabilities $ 2,896 $ — $ 2,896 $ — Fair Value Measurements Using Inputs Considered as: October 31, 2016 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 1,967 $ — $ 1,967 $ — Total assets $ 1,967 $ — $ 1,967 $ — Liabilities: Forward currency contracts $ 1,765 $ — $ 1,765 $ — Deferred compensation liabilities 1,149 — 1,149 — Total liabilities $ 2,914 $ — $ 2,914 $ — |
QUARTERLY FINANCIAL DATA (una41
QUARTERLY FINANCIAL DATA (unaudited) (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of quarterly financial data | Summarized quarterly financial data for fiscal 2017 and 2016 are as follows: Quarter Fiscal Years Ended October 31, 2017 First Second Third Fourth Net sales $ 515,839 $ 872,767 $ 627,943 $ 488,627 Gross profit 193,480 316,314 226,785 184,258 Net earnings 44,990 120,475 68,404 33,848 Basic net earnings per share 1 0.41 1.11 0.63 0.31 Diluted net earnings per share 1 $ 0.41 $ 1.08 $ 0.61 $ 0.31 Quarter Fiscal Years Ended October 31, 2016 First Second Third Fourth Net sales $ 486,398 $ 836,441 $ 600,980 $ 468,356 Gross profit 182,654 303,187 216,617 172,137 Net earnings 39,261 105,681 55,822 30,230 Basic net earnings per share 1 0.36 0.96 0.51 0.28 Diluted net earnings per share 1 $ 0.35 $ 0.94 $ 0.50 $ 0.27 1 Net earnings per share amounts may not equal the full year total due to changes in the number of shares outstanding during the periods and rounding. |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Stock Split (Details) | Sep. 16, 2016 |
Stock Split | |
Stock split, conversion ratio | 2 |
Common Stock | |
Stock Split | |
Stock split, conversion ratio | 2 |
Percentage of common stock dividend to be distributed as a result of stock split | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Cash and Cash Equivalents (Details) $ in Thousands | Oct. 31, 2017USD ($) |
Cash and Cash Equivalents | |
Restricted cash and short-term investments | $ 133,488 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Inventory Valuations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2017 | |
Inventory Disclosure [Abstract] | ||
Percentage of total inventory valued under FIFO method | 33.00% | 31.00% |
Effect of LIFO inventory layers reduction on cost of sales | $ 60 | |
Inventory, Net [Abstract] | ||
Raw materials and work in process | 90,463 | $ 100,077 |
Finished goods and service parts | 58,358 | 66,801 |
Total FIFO value | 365,392 | 395,793 |
Less: adjustment to LIFO value | 274,929 | 295,716 |
Inventory, Net | $ 307,034 | $ 328,992 |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Property and Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Property and Depreciation | |||
Capitalized interest amount | $ 344 | $ 549 | $ 897 |
Subtotal | 885,614 | 838,036 | |
Less: accumulated depreciation | 650,384 | 615,998 | |
Property, plant and equipment, net | 235,230 | 222,038 | 224,995 |
Depreciation expense | 54,679 | 53,355 | $ 50,322 |
Land and land improvements | |||
Property and Depreciation | |||
Subtotal | 38,060 | 34,744 | |
Buildings and leasehold improvements | |||
Property and Depreciation | |||
Subtotal | $ 194,995 | 182,121 | |
Buildings and leasehold improvements | Minimum | |||
Property and Depreciation | |||
Estimated useful life | 10 years | ||
Buildings and leasehold improvements | Maximum | |||
Property and Depreciation | |||
Estimated useful life | 40 years | ||
Machinery and equipment | |||
Property and Depreciation | |||
Subtotal | $ 349,976 | 325,595 | |
Tooling | |||
Property and Depreciation | |||
Subtotal | $ 197,299 | 200,842 | |
Tooling | Minimum | |||
Property and Depreciation | |||
Estimated useful life | 3 years | ||
Tooling | Maximum | |||
Property and Depreciation | |||
Estimated useful life | 5 years | ||
Computer hardware and software | |||
Property and Depreciation | |||
Subtotal | $ 88,152 | 85,173 | |
Construction in process | |||
Property and Depreciation | |||
Subtotal | $ 17,132 | $ 9,561 | |
Equipment | Minimum | |||
Property and Depreciation | |||
Estimated useful life | 2 years | ||
Equipment | Maximum | |||
Property and Depreciation | |||
Estimated useful life | 15 years | ||
Software and Software Development Costs | Minimum | |||
Property and Depreciation | |||
Estimated useful life | 2 years | ||
Software and Software Development Costs | Maximum | |||
Property and Depreciation | |||
Estimated useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Goodwill and Indefinite-Life Intangible Assets (Details) | 12 Months Ended |
Oct. 31, 2017segment | |
Accounting Policies [Abstract] | |
Number of reporting units tested for impairment of goodwill | 9 |
Number of operating segments | 9 |
Number of reporting units containing goodwill | 7 |
SUMMARY OF SIGNIFICANT ACCOUN47
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Other Long-Lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Impairment of long-lived assets held-for-use | $ 0 | $ 0 | $ 1,383 |
Minimum | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Estimated useful life (years) | 1 year | ||
Maximum | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Estimated useful life (years) | 20 years |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Accounts Payable (Details) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017USD ($)payment_oblibations_financed | Oct. 31, 2016USD ($) | |
Accounting Policies [Abstract] | ||
Minimum number of payment obligations to be financed | payment_oblibations_financed | 1 | |
Outstanding payment obligations placed on the accounts payable tracking system | $ | $ 24,455 | $ 16,249 |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Accrued Warranties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 72,158 | $ 70,734 |
Warranty provisions | 46,150 | 44,260 |
Warranty claims | (40,940) | (41,102) |
Changes in estimates | (3,213) | (1,734) |
Ending balance | $ 74,155 | $ 72,158 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Revenue Recognition (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Accounting Policies [Abstract] | ||
Consignment inventory amount | $ 19,327 | $ 22,443 |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Cost of Financing Distributor / Dealer Inventory (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Accounting Policies [Abstract] | |||
Number of fiscal years the entity has repurchased immaterial amounts of inventory under repurchase agreements | 3 years | ||
Financing costs for distributor and dealer inventories | $ 30,106 | $ 28,773 | $ 24,130 |
SUMMARY OF SIGNIFICANT ACCOUN52
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Advertising (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Accounting Policies [Abstract] | |||
Advertising costs | $ 42,963 | $ 41,837 | $ 42,843 |
SUMMARY OF SIGNIFICANT ACCOUN53
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - Net Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Weighted-average number of shares of common stock | 108,299 | 109,816 | 111,107 |
Assumed issuance of contingent shares | 13 | 18 | 23 |
Weighted-average number of shares of common stock and assumed issuance of contingent shares | 108,312 | 109,834 | 111,130 |
Effect of dilutive securities | 2,940 | 2,153 | 2,384 |
Weighted-average number of shares of common stock, assumed issuance of contingent shares, and effect of dilutive securities | 111,252 | 111,987 | 113,514 |
Antidilutive securities excluded from computation of earnings per share, amount | 353,897 | 310,566 | 290,120 |
SUMMARY OF SIGNIFICANT ACCOUN54
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA - New Accounting Pronouncements (Details) - USD ($) | 12 Months Ended | |||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | Feb. 03, 2017 | |
New Accounting Pronouncements Adopted | ||||
Discrete tax benefit | $ 19,719,000 | |||
Cumulative effect adjustment ASU 2016-16 | (2,361,000) | |||
ASU 2016-09 | ||||
New Accounting Pronouncements Adopted | ||||
Increase in cash flows from operating activities | 19,719,000 | $ 12,495,000 | $ 8,459,000 | |
ASU 2016-16 | ||||
New Accounting Pronouncements Adopted | ||||
Increase in cash flows from operating activities | 8,050,000 | $ 9,848,000 | $ 4,264,000 | |
Retained Earnings | ||||
New Accounting Pronouncements Adopted | ||||
Cumulative effect adjustment ASU 2016-16 | $ (2,361,000) | |||
Retained Earnings | ASU 2016-16 | ||||
New Accounting Pronouncements Adopted | ||||
Cumulative effect adjustment ASU 2016-16 | $ 2,361 |
INVESTMENT IN JOINT VENTURE - N
INVESTMENT IN JOINT VENTURE - Narrative (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | |||
Period of notice to be given by parties under joint venture for not extending initial term of joint venture | 1 year | ||
Red Iron Acceptance, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Period of unlimited automatic extensions after the initial term of joint venture | 2 years | ||
Portion owned by Toro (as a percent) | 45.00% | ||
Portion owned by TCFIF (as a percent) | 55.00% | ||
Maximum borrowing capacity under credit facility | $ 550,000,000 | ||
Investment in joint venture | 20,626,000 | $ 18,719,000 | |
Maximum aggregate amount of products repossessed by Red Iron and the TCFIF Canadian affiliate, entity has agreed to repurchase in a calendar year | 7,500,000 | ||
Net amount of receivables financed for dealers and distributors | $ 1,847,740,000 | $ 1,713,588,000 | $ 1,430,855,000 |
INVESTMENT IN JOINT VENTURE - S
INVESTMENT IN JOINT VENTURE - Summary of Red Iron (Details) - Red Iron Acceptance, LLC - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | |||
Revenues | $ 35,158 | $ 31,812 | $ 27,483 |
Interest and operating expenses, net | (13,030) | (10,506) | (8,885) |
Net income | 22,128 | 21,306 | $ 18,598 |
Finance receivables, net | 407,533 | 370,169 | |
Other assets | 2,888 | 4,416 | |
Total assets | 410,421 | 374,585 | |
Notes payable | 347,968 | 321,378 | |
Other liabilities | 16,617 | 11,607 | |
Partners' capital | 45,836 | 41,600 | |
Total liabilities and partners' capital | $ 410,421 | $ 374,585 |
OTHER INCOME, NET - Summary of
OTHER INCOME, NET - Summary of Other Income/(Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Other Income and Expenses [Abstract] | |||
Interest income | $ 1,359 | $ 827 | $ 494 |
Retail financing revenue | 1,097 | 1,087 | 1,086 |
Foreign currency exchange rate gain (loss) | 1,543 | 974 | (324) |
Gain on sale of business | 0 | 340 | 0 |
Non-cash income from finance affiliate | 9,960 | 9,588 | 8,353 |
Litigation recovery (settlements), net | (65) | 1,300 | 125 |
Miscellaneous | 3,293 | 1,284 | 940 |
Total other income, net | $ 17,187 | $ 15,400 | $ 10,674 |
GOODWILL AND OTHER INTANGIBLE58
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Net Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Changes in the net carrying amount of goodwill | ||
Goodwill as of the beginning of the fiscal period | $ 194,782 | $ 195,533 |
Goodwill acquired | 8,921 | |
Translation adjustments | 1,326 | (751) |
Goodwill as of the end of the fiscal period | 205,029 | 194,782 |
Professional | ||
Changes in the net carrying amount of goodwill | ||
Goodwill as of the beginning of the fiscal period | 184,338 | 184,766 |
Goodwill acquired | 8,921 | |
Translation adjustments | 1,205 | (428) |
Goodwill as of the end of the fiscal period | 194,464 | 184,338 |
Residential | ||
Changes in the net carrying amount of goodwill | ||
Goodwill as of the beginning of the fiscal period | 10,444 | 10,767 |
Goodwill acquired | 0 | |
Translation adjustments | 121 | (323) |
Goodwill as of the end of the fiscal period | $ 10,565 | $ 10,444 |
GOODWILL AND OTHER INTANGIBLE59
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 142,861 | $ 164,553 | |
Amortization expense for intangible assets | 9,876 | $ 9,550 | $ 11,438 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Fiscal 2,018 | 6,656 | ||
Fiscal 2,019 | 5,778 | ||
Fiscal 2,020 | 5,222 | ||
Fiscal 2,021 | 4,818 | ||
Fiscal 2,022 | 4,683 | ||
After fiscal 2022 | 49,014 | ||
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 23,120 | ||
Estimated Useful Life (Years) | 17 years | ||
Reduction amortization expense | $ 1,360 |
GOODWILL AND OTHER INTANGIBLE60
GOODWILL AND OTHER INTANGIBLE ASSETS - Components of Other Intangible Assets (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Other Intangible Assets | ||
Gross Carrying Amount | $ 142,861 | $ 164,553 |
Accumulated Amortization | (66,690) | (60,728) |
Net | 76,171 | 103,825 |
Non-amortizable - trade names | 27,572 | 4,268 |
Total other intangible assets, gross | 170,433 | 168,821 |
Total other intangible assets, net | 103,743 | 108,093 |
Patents | ||
Other Intangible Assets | ||
Gross Carrying Amount | 15,162 | 15,151 |
Accumulated Amortization | (11,599) | (10,866) |
Net | 3,563 | 4,285 |
Non-compete agreements | ||
Other Intangible Assets | ||
Gross Carrying Amount | 6,896 | 6,886 |
Accumulated Amortization | (6,775) | (6,681) |
Net | 121 | 205 |
Customer-related | ||
Other Intangible Assets | ||
Gross Carrying Amount | 87,461 | 84,353 |
Accumulated Amortization | (18,940) | (14,434) |
Net | 68,521 | 69,919 |
Developed technology | ||
Other Intangible Assets | ||
Gross Carrying Amount | 30,212 | 28,648 |
Accumulated Amortization | (26,939) | (23,712) |
Net | 3,273 | 4,936 |
Trade names | ||
Other Intangible Assets | ||
Gross Carrying Amount | 2,330 | 28,715 |
Accumulated Amortization | (1,637) | (4,235) |
Net | 693 | 24,480 |
Other | ||
Other Intangible Assets | ||
Gross Carrying Amount | 800 | 800 |
Accumulated Amortization | $ (800) | $ (800) |
SHORT-TERM CAPITAL RESOURCES (D
SHORT-TERM CAPITAL RESOURCES (Details) | 12 Months Ended | |
Oct. 31, 2017USD ($) | Oct. 31, 2016USD ($) | |
Short-term capital resources | ||
Outstanding debt | $ 0 | $ 0 |
Unsecured senior five-year revolving credit facility | ||
Short-term capital resources | ||
Maximum borrowing capacity under credit facility | $ 150,000,000 | |
Credit facility term (in years) | 5 years | |
Increase in the credit agreement's borrowing capacity available under the approval of named borrowers | $ 100,000,000 | |
Description of variable base interest rate | LIBOR | |
Ratio of debt to EBITDA, maximum | 3.25 | |
Standby letters of credit | ||
Short-term capital resources | ||
Maximum borrowing capacity under credit facility | $ 20,000,000 | |
Swingline loans | ||
Short-term capital resources | ||
Maximum borrowing capacity under credit facility | 20,000,000 | |
Non-U.S. Operations | Non-U.S. operations, unsecured short-term lines of credit | ||
Short-term capital resources | ||
Maximum borrowing capacity under credit facility | $ 9,186,000 |
LONG-TERM DEBT - Summary of Lon
LONG-TERM DEBT - Summary of Long Term Debt (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2014 | Apr. 26, 2007 | Jun. 30, 1997 |
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 331,887 | $ 350,961 | |||
Less: unamortized discounts, debt issuance costs and deferred charges | (2,663) | (2,946) | |||
Less: current portion of long-term debt | (26,258) | (22,484) | |||
Long-term debt, less current portion | 305,629 | 328,477 | |||
Term loan, due October 25, 2019 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | 100,750 | 110,500 | $ 130,000 | ||
7.800% Debentures, due June 15, 2027 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 100,000 | 100,000 | |||
Interest rate percentage | 7.80% | 7.80% | |||
6.625% Senior Notes, due May 1, 2037 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 123,792 | 123,730 | |||
Interest rate percentage | 6.625% | 6.625% | |||
4% Unsecured Note, due November 14, 2017 | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 10,008 | $ 19,677 | |||
Interest rate percentage | 4.00% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | Nov. 14, 2014USD ($) | Jun. 30, 1997USD ($)interest_rate_swap_agreements | Oct. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Oct. 31, 2014USD ($) | Oct. 31, 2007USD ($) | Apr. 26, 2007USD ($) |
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes issued | $ 30,000,000 | ||||||
Total long-term debt | $ 331,887,000 | $ 350,961,000 | |||||
Basis points | 0.30% | ||||||
Principal payments on long-term debt in fiscal years | |||||||
2,018 | $ 26,258,000 | ||||||
2,019 | 84,500,000 | ||||||
2,020 | 0 | ||||||
2,021 | 0 | ||||||
2,022 | 0 | ||||||
After 2,022 | 223,792,000 | ||||||
Term loan, due October 25, 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Total long-term debt | $ 100,750,000 | 110,500,000 | $ 130,000,000 | ||||
Description of variable base interest rate | LIBOR | ||||||
6.625% Senior Notes, due May 1, 2037 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes issued | $ 125,000,000 | ||||||
Total long-term debt | $ 123,792,000 | 123,730,000 | |||||
Interest rate percentage | 6.625% | 6.625% | |||||
Debt discount, unamortized | $ 1,859,000 | ||||||
Total underwriting fee and direct debt issue costs | $ 1,524,000 | ||||||
Effective interest rate (as a percent) | 6.741% | ||||||
Percentage of par value at which debt was issued | 98.513% | ||||||
Redemption price as a percentage of the principal amount upon the occurrence of both a change of control and downgrade of rating (as a percent) | 101.00% | ||||||
Debt securities issued in June 1997 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes issued | $ 175,000,000 | ||||||
7.125% coupon 10-year notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes issued | $ 75,000,000 | ||||||
Interest rate percentage | 7.125% | ||||||
Maturity period (in years) | 10 years | ||||||
Repayment of face amount of debt | $ 75,000,000 | ||||||
7.800% Debentures, due June 15, 2027 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of notes issued | $ 100,000,000 | ||||||
Total long-term debt | $ 100,000,000 | $ 100,000,000 | |||||
Interest rate percentage | 7.80% | 7.80% | |||||
Maturity period (in years) | 30 years | ||||||
Amount paid to terminate forward-starting interest rate swap agreements | $ 23,688,000 | ||||||
Number of terminated forward-starting interest rate swap agreements | interest_rate_swap_agreements | 3 | ||||||
Notional amount | $ 125,000,000 | ||||||
Deferred income amount at the time of swap termination | $ 18,710,000 | ||||||
Fiscal 2015 Acquisitions | |||||||
Debt Instrument [Line Items] | |||||||
Note payable at fair value | $ 31,161,000 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) $ in Thousands | Sep. 16, 2016 | Oct. 31, 2017USD ($)shares | Oct. 31, 2016USD ($)shares | Oct. 31, 2015USD ($)shares | Dec. 03, 2015shares |
Stock repurchase program | |||||
Stock split, conversion ratio | 2 | ||||
Amount paid to repurchase the shares (in dollars) | $ | $ 160,648 | $ 111,999 | $ 106,964 | ||
Repurchase of shares | 2,730,022 | 2,675,575 | 3,151,978 | ||
Treasury shares | |||||
Treasury shares held | 21,245,028 | 19,700,607 | |||
Cost of treasury shares (in dollars) | $ | $ 1,369,548 | $ 1,280,495 | |||
Stock repurchase program | |||||
Stock repurchase program | |||||
Additional number of shares authorized to be repurchased | 8,000,000 | ||||
Amount paid to repurchase the shares (in dollars) | $ | $ 159,354 | $ 109,986 | $ 105,964 | ||
Repurchase of shares | 2,710,837 | 2,625,913 | 3,122,358 | ||
Number of shares remained authorized for repurchase | 4,981,878 |
STOCKHOLDERS' EQUITY - Componen
STOCKHOLDERS' EQUITY - Components of AOCL (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2014 |
Components and activity of accumulated other comprehensive loss | |||
Total accumulated other comprehensive loss | $ 24,120 | $ 38,436 | |
Foreign Currency Translation Adjustments | |||
Components and activity of accumulated other comprehensive loss | |||
Total accumulated other comprehensive loss | 21,303 | 31,430 | $ 24,328 |
Pension and Post-Retirement Benefits | |||
Components and activity of accumulated other comprehensive loss | |||
Total accumulated other comprehensive loss | 2,012 | 6,359 | 5,386 |
Cash Flow Derivative Instruments | |||
Components and activity of accumulated other comprehensive loss | |||
Total accumulated other comprehensive loss | 805 | 647 | 129 |
Accumulated Other Comprehensive Loss | |||
Components and activity of accumulated other comprehensive loss | |||
Total accumulated other comprehensive loss | $ 24,120 | $ 38,436 | $ 29,843 |
STOCKHOLDERS' EQUITY - Compon66
STOCKHOLDERS' EQUITY - Components and activity of AOCL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Components and activity of accumulated other comprehensive loss | |||
Balance as of the beginning of the fiscal period | $ (550,035) | $ (462,165) | $ (408,727) |
Net current period other comprehensive (income) loss | (14,316) | 8,593 | 14,138 |
Balance as of the end of the fiscal period | (617,092) | (550,035) | (462,165) |
Foreign Currency Translation Adjustments | |||
Components and activity of accumulated other comprehensive loss | |||
Balance as of the beginning of the fiscal period | 31,430 | 24,328 | |
Other comprehensive income before reclassifications | (10,127) | 7,102 | |
Net current period other comprehensive (income) loss | (10,127) | 7,102 | |
Balance as of the end of the fiscal period | 21,303 | 31,430 | 24,328 |
Pension and Post-Retirement Benefits | |||
Components and activity of accumulated other comprehensive loss | |||
Balance as of the beginning of the fiscal period | 6,359 | 5,386 | |
Other comprehensive income before reclassifications | (4,347) | 973 | |
Amounts reclassified from AOCL | 0 | ||
Net current period other comprehensive (income) loss | (4,347) | 973 | |
Balance as of the end of the fiscal period | 2,012 | 6,359 | 5,386 |
Cash Flow Derivative Instruments | |||
Components and activity of accumulated other comprehensive loss | |||
Balance as of the beginning of the fiscal period | 647 | 129 | |
Other comprehensive income before reclassifications | (233) | 1,116 | |
Amounts reclassified from AOCL | 391 | (598) | |
Net current period other comprehensive (income) loss | 158 | 518 | |
Balance as of the end of the fiscal period | 805 | 647 | 129 |
Accumulated Other Comprehensive Loss | |||
Components and activity of accumulated other comprehensive loss | |||
Balance as of the beginning of the fiscal period | 38,436 | 29,843 | 15,705 |
Other comprehensive income before reclassifications | (14,707) | 9,191 | |
Amounts reclassified from AOCL | 391 | (598) | |
Net current period other comprehensive (income) loss | (14,316) | 8,593 | 14,138 |
Balance as of the end of the fiscal period | $ 24,120 | $ 38,436 | $ 29,843 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | Oct. 31, 2017USD ($) |
Income Taxes [Line Items] | |
Deferred Tax Liabilities, Undistributed Foreign Earnings | $ 0 |
Undistributed earnings of foreign subsidiaries | 159,003,000 |
Accrued interest and penalties for unrecognized tax benefits | 236,000 |
Potential benefits that would affect the effective tax rate | 2,177,000 |
Foreign Jurisdictions | |
Income Taxes [Line Items] | |
Net operating loss carryforwards in foreign jurisdictions | 6,569,000 |
Net operating loss carryforwards in foreign jurisdictions not subject to expiration | 3,327,000 |
Net operating loss carryforwards in foreign jurisdictions subject to expiration between fiscal years 2017 and 2022 | $ 3,242,000 |
INCOME TAXES - Earnings Before
INCOME TAXES - Earnings Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Earnings before income taxes: | |||
U.S. | $ 307,136 | $ 292,184 | $ 254,276 |
Foreign | 46,048 | 38,276 | 36,755 |
Earnings before income taxes | $ 353,184 | $ 330,460 | $ 291,031 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of the Statutory Federal Income Tax Rate (Details) | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
Statutory federal income tax rate | (5.30%) | (0.00%) | (0.00%) |
Domestic manufacturer's deduction | (1.20%) | (0.80%) | (1.70%) |
State and local income taxes, net of federal benefit | 0.50% | 1.50% | 2.20% |
Foreign taxes | (2.30%) | (1.80%) | (3.10%) |
Federal research tax credit | (1.50%) | (1.50%) | (0.90%) |
Other, net | (1.00%) | (2.30%) | (0.80%) |
Consolidated effective tax rate | 24.20% | 30.10% | 30.70% |
INCOME TAXES - Components of th
INCOME TAXES - Components of the Provisions For Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Current provision: | |||
Federal | $ 83,091 | $ 77,685 | $ 75,496 |
State | 3,036 | 6,929 | 9,389 |
Foreign | 8,166 | 6,295 | 6,219 |
Total current provision | 94,293 | 90,909 | 91,104 |
Deferred provision (benefit): | |||
Federal | (8,774) | 7,283 | 430 |
State | (101) | 297 | 0 |
Foreign | 49 | 977 | (2,094) |
Total deferred provision (benefit) | (8,826) | 8,557 | (1,664) |
Provision for income taxes | $ 85,467 | $ 99,466 | $ 89,440 |
INCOME TAXES - Tax Effects of T
INCOME TAXES - Tax Effects of Temporary Differences (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Deferred income tax assets: | ||
Compensation and benefits | $ 38,753 | $ 37,200 |
Warranty and insurance | 23,993 | 17,443 |
Advertising and sales allowance | 10,428 | 11,185 |
Other | 12,234 | 10,327 |
Valuation allowance | (1,951) | (1,867) |
Total deferred income tax assets | 83,457 | 74,288 |
Deferred income tax liabilities: | ||
Depreciation | (13,259) | (13,578) |
Amortization | (7,841) | (3,482) |
Total deferred income tax liabilities | (21,100) | (17,060) |
Deferred income tax assets, net | $ 62,357 | $ 57,228 |
INCOME TAXES - Reconciliation (
INCOME TAXES - Reconciliation (Details) $ in Thousands | 12 Months Ended |
Oct. 31, 2017USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance at the beginning of the period | $ 5,175 |
Increase as a result of tax positions taken during a prior period | 432 |
Increase as a result of tax positions taken during the current period | 948 |
Decrease relating to settlements with taxing authorities | (2,673) |
Reductions as a result of statute of limitations lapses | (769) |
Balance at the end of the period | $ 3,113 |
STOCK-BASED COMPENSATION PLAN73
STOCK-BASED COMPENSATION PLANS - Narrative (Details) $ in Thousands | Sep. 16, 2016 | Oct. 31, 2017USD ($)shares | Oct. 31, 2016shares | Oct. 31, 2015shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock split, conversion ratio | 2 | |||
Common stock available for future grants (in shares) | shares | 5,517,897 | |||
Stock option awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | shares | 554,364 | |||
Compensation cost not yet recognized | $ | $ 3,129 | |||
Period for recognition | 1 year 11 months 26 days | |||
Stock option awards | Non-employee directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Requisite service period for non-employee director after which fair value of options granted is fully expensed on the date of grant | 10 years | |||
Stock option awards | Certain employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Term of award | 10 years | |||
Stock option awards | Certain members of the Board Of Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period | 3 years | |||
Term of award | 10 years | |||
Restricted stock and restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost not yet recognized | $ | $ 2,953 | |||
Period for recognition | 2 years 1 month 23 days | |||
Performance share awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost not yet recognized | $ | $ 5,108 | |||
Performance goal period | 3 years | |||
Period for recognition | 1 year 8 months 1 day | |||
Unrestricted common stock awards | Certain members of the Board Of Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | shares | 11,412 | 12,320 | 13,360 |
STOCK-BASED COMPENSATION PLAN74
STOCK-BASED COMPENSATION PLANS - Compensation Costs Related to Stock-Based Awards (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total compensation cost for stock-based awards | $ 13,517 | $ 10,637 | $ 10,836 |
Related tax benefit from stock-based awards | 5,001 | 3,936 | 4,009 |
Stock option awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total compensation cost for stock-based awards | 5,496 | 4,606 | 4,704 |
Restricted stock and restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total compensation cost for stock-based awards | 2,300 | 1,891 | 1,756 |
Performance share awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total compensation cost for stock-based awards | 5,183 | 3,676 | 3,964 |
Unrestricted common stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total compensation cost for stock-based awards | $ 538 | $ 464 | $ 412 |
STOCK-BASED COMPENSATION PLAN75
STOCK-BASED COMPENSATION PLANS STOCK-BASED COMPENSATION PLANS - Stock Option Activity (Details) - Stock option awards - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Stock Option Awards | ||
Outstanding at the beginning of the period (in shares) | 4,879,984 | |
Granted (in shares) | 554,364 | |
Exercised (in shares) | (954,909) | |
Cancelled/forfeited (in shares) | (19,744) | |
Outstanding at the end of the period (in shares) | 4,459,695 | 4,879,984 |
Exercisable at the end of the period (in shares) | 3,331,979 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 20.07 | |
Granted (in dollars per share) | 55.82 | |
Exercised (in dollars per share) | 11.48 | |
Cancelled/forfeited (in dollars per share) | 51.74 | |
Outstanding at the end of the period (in dollars per share) | 26.22 | $ 20.07 |
Exercisable at the end of the period (in dollars per share) | $ 19.64 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-average contractual life (years) | 5 years 3 months 18 days | 5 years 3 months 10 days |
Exercisable at the end of the period (years) | 4 years 3 months 10 days | |
Outstanding of the beginning of the period, intrinsic value | $ 135,697 | |
Outstanding of the end of the period, intrinsic value | 163,369 | $ 135,697 |
Exercisable at the end of the period, intrinsic value | $ 143,960 |
STOCK-BASED COMPENSATION PLAN76
STOCK-BASED COMPENSATION PLANS - Market and Intrinsic Value of Options Exercised (Details) - Stock option awards - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Market value of stock options exercised | $ 58,976 | $ 61,468 | $ 27,860 |
Intrinsic value of options exercised | $ 48,017 | $ 41,365 | $ 18,739 |
STOCK-BASED COMPENSATION PLAN77
STOCK-BASED COMPENSATION PLANS - Weighted-average Valuation Assumptions For Options Granted (Details) - Stock option awards - $ / shares | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value at date of grant | $ 12.55 | $ 8.79 | $ 8.41 |
Estimated Useful Life (Years) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life of option in years | 6 years 8 days | 5 years 11 months 19 days | 5 years 11 months 9 days |
Expected stock price volatility | 22.15% | 24.04% | 29.66% |
Risk-free interest rate | 2.03% | 1.80% | 1.61% |
Expected dividend yield | 1.01% | 1.24% | 1.29% |
STOCK-BASED COMPENSATION PLAN78
STOCK-BASED COMPENSATION PLANS - Factors Related to the Company's Stock and Restricted Stock Units (Details) - Restricted stock and restricted stock units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value at date of grant | $ 66.09 | $ 41.83 | $ 33.88 |
Fair value of restricted stock and restricted stock units vested | $ 3,604 | $ 2,681 | $ 2,744 |
STOCK-BASED COMPENSATION PLAN79
STOCK-BASED COMPENSATION PLANS - Summary of Activity For Unvested Restricted Stock and Restricted Stock Units (Details) - Restricted stock and restricted stock units - $ / shares shares in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Restricted Stock Units | |||
Unvested at the beginning of the period (in shares) | 139,480 | ||
Granted (in shares) | 43,167 | ||
Vested (in shares) | (53,709) | ||
Forfeited (in shares) | (4,666) | ||
Unvested at the end of the period (in shares) | 124,272 | 139,480 | |
Weighted-Average Fair Value at Date of Grant | |||
Unvested at the beginning of the period (in dollars per share) | $ 34.51 | ||
Granted (in dollars per share) | 66.09 | $ 41.83 | $ 33.88 |
Vested (in dollars per share) | 33.14 | ||
Forfeited (in dollars per share) | 37.38 | ||
Unvested at the end of the period (in dollars per share) | $ 45.66 | $ 34.51 |
STOCK-BASED COMPENSATION PLAN80
STOCK-BASED COMPENSATION PLANS - Factors Related to the Company's Performance Share Awards (Details) - Performance share awards - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value at date of grant | $ 54.52 | $ 38.89 | $ 32.84 |
Fair value of restricted stock and restricted stock units vested | $ 7,018 | $ 7,454 | $ 7,989 |
STOCK-BASED COMPENSATION PLAN81
STOCK-BASED COMPENSATION PLANS - Summary of Activity For Unvested Performance Share Awards (Details) - Performance share awards - $ / shares shares in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Restricted Stock Units | |||
Unvested at the beginning of the period (in shares) | 317,850 | ||
Granted (in shares) | 74,800 | ||
Vested (in shares) | (107,198) | ||
Forfeited (in shares) | (3,301) | ||
Unvested at the end of the period (in shares) | 282,151 | 317,850 | |
Weighted-Average Fair Value at Date of Grant | |||
Unvested at the beginning of the period (in dollars per share) | $ 33.95 | ||
Weighted-average fair value at date of grant | 54.52 | $ 38.89 | $ 32.84 |
Vested (in dollars per share) | 30.10 | ||
Forfeited (in dollars per share) | 47.96 | ||
Unvested at the end of the period (in dollars per share) | $ 40.71 | $ 33.95 |
EMPLOYEE RETIREMENT PLANS - Nar
EMPLOYEE RETIREMENT PLANS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |||
Investments, Savings, Employee Stock Ownership Plan, expenses | $ 17,932 | $ 16,986 | $ 17,400 |
Projected benefit obligation | 41,448 | 45,603 | |
Amount of net liability recognized | 4,558 | 4,243 | |
Accumulated benefit obligation | 41,448 | 45,603 | |
Funded status of plans | 6,238 | 12,984 | |
Fair value of the plan assets | 35,211 | 32,619 | |
Net expense recognized | $ 1,477 | $ 1,220 | $ 2,406 |
EMPLOYEE RETIREMENT PLANS - AOC
EMPLOYEE RETIREMENT PLANS - AOCL related disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss (gain) | $ 2,012 | $ 6,050 |
Net prior service cost | 309 | |
Accumulated other comprehensive loss (income) | 2,012 | 6,359 |
Amounts included in accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost | ||
Net actuarial loss (gain) | (249) | |
Total | (249) | |
Amounts recognized in net periodic benefit cost and other comprehensive loss | ||
Net actuarial gain | (3,814) | 1,088 |
Prior service cost | 51 | 0 |
Amortization of unrecognized prior service credit | (360) | (42) |
Amortization of unrecognized actuarial gain | (224) | (73) |
Total recognized in other comprehensive income | (4,347) | 973 |
Total recognized in net periodic benefit cost and other comprehensive loss (income) | (2,870) | 2,193 |
Defined Benefit Pension Plans | ||
Amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss (gain) | 4,998 | 5,496 |
Net prior service cost | 309 | |
Accumulated other comprehensive loss (income) | 4,998 | 5,805 |
Amounts included in accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost | ||
Net actuarial loss (gain) | 128 | |
Total | 128 | |
Amounts recognized in net periodic benefit cost and other comprehensive loss | ||
Net actuarial gain | (280) | 469 |
Prior service cost | 51 | 0 |
Amortization of unrecognized prior service credit | (360) | (42) |
Amortization of unrecognized actuarial gain | (219) | (73) |
Total recognized in other comprehensive income | (808) | 354 |
Total recognized in net periodic benefit cost and other comprehensive loss (income) | 22 | 976 |
Post-retirement Benefit Plan | ||
Amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss (gain) | (2,986) | 554 |
Accumulated other comprehensive loss (income) | (2,986) | 554 |
Amounts included in accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost | ||
Net actuarial loss (gain) | (377) | |
Total | (377) | |
Amounts recognized in net periodic benefit cost and other comprehensive loss | ||
Net actuarial gain | (3,534) | 619 |
Amortization of unrecognized prior service credit | 0 | 0 |
Amortization of unrecognized actuarial gain | (5) | 0 |
Total recognized in other comprehensive income | (3,539) | 619 |
Total recognized in net periodic benefit cost and other comprehensive loss (income) | $ (2,892) | $ 1,217 |
SEGMENT DATA - Narrative (Detai
SEGMENT DATA - Narrative (Details) | 12 Months Ended | ||
Oct. 31, 2017segmentcustomer | Oct. 31, 2016 | Oct. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | 9 | ||
Number of reportable business segments | 3 | ||
Single customer | Customer concentration | Sales | Residential | |||
Segment Reporting Information [Line Items] | |||
Number of customers | customer | 1 | ||
Percentage of consolidated gross sales accounted for by one customer (as a percent) | 10.00% | 11.00% | 11.00% |
SEGMENT DATA - Summarized Finan
SEGMENT DATA - Summarized Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2017 | Aug. 04, 2017 | May 05, 2017 | Feb. 03, 2017 | Oct. 31, 2016 | Jul. 29, 2016 | Apr. 29, 2016 | Jan. 29, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 488,627 | $ 627,943 | $ 872,767 | $ 515,839 | $ 468,356 | $ 600,980 | $ 836,441 | $ 486,398 | $ 2,505,176 | $ 2,392,175 | $ 2,390,875 |
Intersegment gross sales | 0 | 0 | 0 | ||||||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 353,184 | 330,460 | 291,031 | ||||||||
Total assets | 1,493,787 | 1,384,572 | 1,493,787 | 1,384,572 | 1,300,429 | ||||||
Capital expenditures | 58,276 | 50,723 | 56,374 | ||||||||
Depreciation and amortization | 64,986 | 64,097 | 63,143 | ||||||||
Professional | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 1,811,705 | 1,705,312 | 1,639,659 | ||||||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 379,496 | 352,060 | 308,010 | ||||||||
Total assets | 836,600 | 774,762 | 836,600 | 774,762 | 805,686 | ||||||
Capital expenditures | 29,786 | 27,296 | 29,016 | ||||||||
Depreciation and amortization | 41,313 | 40,715 | 42,799 | ||||||||
Residential | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 673,247 | 669,131 | 725,682 | ||||||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 74,704 | 73,691 | 84,956 | ||||||||
Total assets | 189,578 | 188,920 | 189,578 | 188,920 | 217,093 | ||||||
Capital expenditures | 10,605 | 13,794 | 9,953 | ||||||||
Depreciation and amortization | 10,308 | 10,406 | 9,131 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 20,224 | 17,732 | 25,534 | ||||||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (101,016) | (95,291) | (101,935) | ||||||||
Total assets | $ 467,609 | $ 420,890 | 467,609 | 420,890 | 277,650 | ||||||
Capital expenditures | 17,885 | 9,633 | 17,405 | ||||||||
Depreciation and amortization | 13,365 | 12,976 | 11,213 | ||||||||
Intersegment | Professional | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment gross sales | 27,893 | 28,138 | 45,634 | ||||||||
Intersegment | Residential | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment gross sales | 332 | 354 | 406 | ||||||||
Intersegment | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Intersegment gross sales | $ (28,225) | $ (28,492) | $ (46,040) |
SEGMENT DATA - Other Segment Op
SEGMENT DATA - Other Segment Operating Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Interest expense | $ (19,113) | $ (19,336) | $ (18,757) |
Other income, net | 17,187 | 15,400 | 10,674 |
Total operating loss | 353,184 | 330,460 | 291,031 |
Other | |||
Segment Reporting Information [Line Items] | |||
Corporate expenses | (100,928) | (95,288) | (95,167) |
Interest expense | (19,113) | (19,336) | (18,757) |
Other income, net | 19,025 | 19,333 | 11,989 |
Total operating loss | $ (101,016) | $ (95,291) | $ (101,935) |
SEGMENT DATA - Net Sales (Detai
SEGMENT DATA - Net Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2017 | Aug. 04, 2017 | May 05, 2017 | Feb. 03, 2017 | Oct. 31, 2016 | Jul. 29, 2016 | Apr. 29, 2016 | Jan. 29, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Net sales for groups of similar products and services | |||||||||||
Net sales | $ 488,627 | $ 627,943 | $ 872,767 | $ 515,839 | $ 468,356 | $ 600,980 | $ 836,441 | $ 486,398 | $ 2,505,176 | $ 2,392,175 | $ 2,390,875 |
Equipment | |||||||||||
Net sales for groups of similar products and services | |||||||||||
Net sales | 2,060,354 | 2,001,150 | 2,004,274 | ||||||||
Irrigation and lighting | |||||||||||
Net sales for groups of similar products and services | |||||||||||
Net sales | $ 444,822 | $ 391,025 | $ 386,601 |
SEGMENT DATA - Geographic Data
SEGMENT DATA - Geographic Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2017 | Aug. 04, 2017 | May 05, 2017 | Feb. 03, 2017 | Oct. 31, 2016 | Jul. 29, 2016 | Apr. 29, 2016 | Jan. 29, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Geographic Data | |||||||||||
Net sales | $ 488,627 | $ 627,943 | $ 872,767 | $ 515,839 | $ 468,356 | $ 600,980 | $ 836,441 | $ 486,398 | $ 2,505,176 | $ 2,392,175 | $ 2,390,875 |
Long-lived assets | 235,230 | 222,038 | 235,230 | 222,038 | 224,995 | ||||||
United States | |||||||||||
Geographic Data | |||||||||||
Net sales | 1,893,249 | 1,812,587 | 1,780,240 | ||||||||
Long-lived assets | 194,338 | 188,869 | 194,338 | 188,869 | 190,262 | ||||||
Foreign Countries | |||||||||||
Geographic Data | |||||||||||
Net sales | 611,927 | 579,588 | 610,635 | ||||||||
Long-lived assets | $ 40,892 | $ 33,169 | $ 40,892 | $ 33,169 | $ 34,733 |
COMMITMENTS AND CONTINGENT LI89
COMMITMENTS AND CONTINGENT LIABILITIES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Leases | |||
Rental expense for operating leases | $ 27,865,000 | $ 26,363,000 | $ 24,986,000 |
Future minimum lease payments under noncancelable operating leases | |||
Total future minimum lease payments | 94,091,000 | ||
2,018 | 16,789,000 | ||
2,019 | 14,881,000 | ||
2,020 | 12,573,000 | ||
2,021 | 11,504,000 | ||
2,022 | 9,833,000 | ||
After 2,022 | 28,511,000 | ||
Purchase Commitments | |||
Amount of noncancelable purchase commitments | 12,797,000 | ||
Maximum obligation for the construction of a new corporate headquarters facility | 8,936,000 | ||
Remaining obligation for the construction of a new corporate headquarters facility | 7,806,000 | ||
Letters of Credit | |||
Letters of credit outstanding | 10,220,000 | $ 8,984,000 | |
Wholesale Financing | |||
Customer Financing | |||
Receivables purchased by third party financing company from the company | 32,124,000 | ||
Receivables financed by third party financing company, excluding Red Iron, outstanding | 13,109,000 | ||
Maximum amount of contingent liability to repurchase inventory related receivables under limited inventory repurchase agreements | 10,712,000 | ||
End-User Financing | |||
Customer Financing | |||
Contingent liabilities for residual value or credit collection risk | 0 | ||
End-User Financing | Maximum | |||
Customer Financing | |||
Exposure for credit collection | $ 6,559,000 |
FINANCIAL INSTRUMENTS - Narrati
FINANCIAL INSTRUMENTS - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jul. 29, 2016instrument | Oct. 31, 2017USD ($) | |
Summary of cash flow hedge activity | ||
Maximum time limit for cash flow hedge | 2 years | |
Cash flow hedge effectiveness testing, grace period | 2 months | |
Losses from AOCL to earnings | $ (1,017) | |
Forward currency contracts | ||
Summary of cash flow hedge activity | ||
Notional amount | $ 102,733 | |
Currency swap contract | ||
Summary of cash flow hedge activity | ||
Number of derivative contracts terminated | instrument | 1 |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Value of Derivatives (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Fair value of derivatives | ||
Asset Derivatives | $ 1,041 | $ 1,967 |
Forward currency contracts | ||
Fair value of derivatives | ||
Asset Derivatives | 1,041 | 1,967 |
Liability Derivatives | 2,266 | 1,765 |
Forward currency contracts | Derivatives Designated as Hedging Instruments | Prepaid expenses and other current assets | ||
Fair value of derivatives | ||
Asset Derivatives | 1,014 | 1,535 |
Forward currency contracts | Derivatives Designated as Hedging Instruments | Accrued liabilities | ||
Fair value of derivatives | ||
Liability Derivatives | 1,563 | 973 |
Forward currency contracts | Derivatives Not Designated as Hedging Instruments | Prepaid expenses and other current assets | ||
Fair value of derivatives | ||
Asset Derivatives | 27 | 432 |
Forward currency contracts | Derivatives Not Designated as Hedging Instruments | Accrued liabilities | ||
Fair value of derivatives | ||
Liability Derivatives | $ 703 | $ 792 |
FINANCIAL INSTRUMENTS - Impact
FINANCIAL INSTRUMENTS - Impact on Earnings (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments and Hedging Activities | ||
Total derivatives not designated as cash flow hedging instruments | $ (4,251) | $ (195) |
Derivatives Not Designated as Hedging Instruments | Forward currency contracts | Other income, net | ||
Derivative Instruments and Hedging Activities | ||
Total derivatives not designated as cash flow hedging instruments | (4,251) | (4) |
Derivatives Not Designated as Hedging Instruments | Cross currency contracts | Other income, net | ||
Derivative Instruments and Hedging Activities | ||
Total derivatives not designated as cash flow hedging instruments | 0 | (191) |
Cash Flow Hedging | ||
Derivative Instruments and Hedging Activities | ||
Total ineffective portion and components excluded from effectiveness testing | 231 | 608 |
Cash Flow Hedging | Cross currency contracts | Other income, net | ||
Derivative Instruments and Hedging Activities | ||
Total ineffective portion and components excluded from effectiveness testing | $ 231 | $ 608 |
FINANCIAL INSTRUMENTS - Effects
FINANCIAL INSTRUMENTS - Effects of Master Netting Arrangements (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Assets | ||
Forward currency contracts | $ 1,041 | $ 1,967 |
Forward currency contracts | ||
Assets | ||
Gross Amounts of Recognized Assets | 1,055 | 2,264 |
Gross Liabilities Offset in the Balance Sheets | (14) | (297) |
Forward currency contracts | 1,041 | 1,967 |
Liabilities | ||
Gross Amounts of Recognized Liabilities | (2,266) | (1,765) |
Derivative Liability, Fair Value, Gross Asset | 0 | 0 |
Net Amount of Liabilities Presented in the Balance Sheet | $ (2,266) | $ (1,765) |
FINANCIAL INSTRUMENTS - Impact
FINANCIAL INSTRUMENTS - Impacts and Location of Amounts Reclassified From AOCL (Details) - Cash Flow Hedging - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total derivatives designated as cash flow hedging instruments | $ 391 | $ (598) |
Total derivatives designated as cash flow hedging instruments | (158) | (525) |
Forward currency contracts | Net sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total derivatives designated as cash flow hedging instruments | 1,547 | 2,094 |
Total derivatives designated as cash flow hedging instruments | (2,007) | (961) |
Forward currency contracts | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total derivatives designated as cash flow hedging instruments | (1,156) | (2,598) |
Total derivatives designated as cash flow hedging instruments | 1,849 | 181 |
Cross currency contracts | Other income, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total derivatives designated as cash flow hedging instruments | 0 | (94) |
Total derivatives designated as cash flow hedging instruments | $ 0 | $ 255 |
FAIR VALUE - Recurring Fair Val
FAIR VALUE - Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Assets: | ||
Forward currency contracts | $ 1,041 | $ 1,967 |
Forward currency contracts | ||
Assets: | ||
Forward currency contracts | 1,041 | 1,967 |
Liabilities: | ||
Forward currency contracts | 2,266 | 1,765 |
Measured on a recurring basis | ||
Assets: | ||
Total assets | 1,041 | 1,967 |
Liabilities: | ||
Deferred compensation liabilities | 630 | 1,149 |
Total liabilities | 2,896 | 2,914 |
Measured on a recurring basis | Forward currency contracts | ||
Assets: | ||
Forward currency contracts | 1,041 | 1,967 |
Liabilities: | ||
Forward currency contracts | 2,266 | 1,765 |
Measured on a recurring basis | Level 2 | ||
Assets: | ||
Total assets | 1,041 | 1,967 |
Liabilities: | ||
Deferred compensation liabilities | 630 | 1,149 |
Total liabilities | 2,896 | 2,914 |
Measured on a recurring basis | Level 2 | Forward currency contracts | ||
Assets: | ||
Forward currency contracts | 1,041 | 1,967 |
Liabilities: | ||
Forward currency contracts | $ 2,266 | $ 1,765 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - USD ($) $ in Thousands | Oct. 31, 2017 | Oct. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Transfer of assets from level 1 to level 2 | $ 0 | $ 0 |
Transfer of liabilities from level 1 to level 2 | 0 | 0 |
Transfer of assets from level 2 to level 1 | 0 | 0 |
Transfer of liabilities from level 2 to level 1 | 0 | 0 |
Long-term debt with fixed interest rates | 282,412 | 293,295 |
Carrying amount of long-term debt | $ 231,137 | $ 240,461 |
QUARTERLY FINANCIAL DATA (una97
QUARTERLY FINANCIAL DATA (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2017 | Aug. 04, 2017 | May 05, 2017 | Feb. 03, 2017 | Oct. 31, 2016 | Jul. 29, 2016 | Apr. 29, 2016 | Jan. 29, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 488,627 | $ 627,943 | $ 872,767 | $ 515,839 | $ 468,356 | $ 600,980 | $ 836,441 | $ 486,398 | $ 2,505,176 | $ 2,392,175 | $ 2,390,875 |
Gross profit | 184,258 | 226,785 | 316,314 | 193,480 | 172,137 | 216,617 | 303,187 | 182,654 | 920,837 | 874,595 | 835,935 |
Net earnings | $ 33,848 | $ 68,404 | $ 120,475 | $ 44,990 | $ 30,230 | $ 55,822 | $ 105,681 | $ 39,261 | $ 267,717 | $ 230,994 | $ 201,591 |
Basic net earnings per share of common stock (in dollars per share) | $ 0.31 | $ 0.63 | $ 1.11 | $ 0.41 | $ 0.28 | $ 0.51 | $ 0.96 | $ 0.36 | $ 2.47 | $ 2.10 | $ 1.81 |
Diluted net earnings per share of common stock (in dollars per share) | $ 0.31 | $ 0.61 | $ 1.08 | $ 0.41 | $ 0.27 | $ 0.50 | $ 0.94 | $ 0.35 | $ 2.41 | $ 2.06 | $ 1.78 |
SCHEDULE II_ Valuation and Qu98
SCHEDULE II: Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Allowance for doubtful accounts and notes receivable reserves | |||
Movement in allowance for doubtful accounts and notes receivable reserves and accrued advertising and marketing programs | |||
Balance at the beginning of the fiscal year | $ 1,609 | $ 1,378 | $ 1,481 |
Charged to costs and expense | 934 | 424 | 350 |
Deductions | 396 | 193 | 453 |
Balance at the end of the fiscal year | 2,147 | 1,609 | 1,378 |
Accrued advertising and marketing programs | |||
Movement in allowance for doubtful accounts and notes receivable reserves and accrued advertising and marketing programs | |||
Balance at the beginning of the fiscal year | 81,315 | 76,689 | 66,169 |
Charged to costs and expense | 377,989 | 355,509 | 318,211 |
Deductions | 373,370 | 350,883 | 307,691 |
Balance at the end of the fiscal year | $ 85,934 | $ 81,315 | $ 76,689 |