Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Oct. 31, 2014 | Dec. 12, 2014 | 2-May-14 |
Document and Entity Information | |||
Entity Registrant Name | TORO CO | ||
Entity Central Index Key | 737758 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Oct-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -21 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $3.60 | ||
Entity Common Stock, Shares Outstanding | 55,758,612 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_STATEMENTS_OF_EAR
CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Consolidated Statements of Earnings | |||
Net sales | $2,172,691 | $2,041,431 | $1,958,690 |
Cost of sales | 1,399,420 | 1,316,634 | 1,285,596 |
Gross profit | 773,271 | 724,797 | 673,094 |
Selling, general, and administrative expense | 510,114 | 494,135 | 467,481 |
Operating earnings | 263,157 | 230,662 | 205,613 |
Interest expense | -15,426 | -16,210 | -16,906 |
Other income, net | 8,714 | 12,261 | 7,555 |
Earnings before income taxes | 256,445 | 226,713 | 196,262 |
Provision for income taxes | 82,575 | 71,868 | 66,721 |
Net earnings | $173,870 | $154,845 | $129,541 |
Basic net earnings per share of common stock (in dollars per share) | $3.09 | $2.67 | $2.18 |
Diluted net earnings per share of common stock (in dollars per share) | $3.02 | $2.62 | $2.14 |
Weighted-average number of shares of common stock outstanding - Basic (in shares) | 56,359 | 57,922 | 59,446 |
Weighted-average number of shares of common stock outstanding - Diluted (in shares) | 57,628 | 59,105 | 60,618 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Consolidated Statements of Comprehensive Income | |||
Net earnings | $173,870 | $154,845 | $129,541 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments, net of tax of $(34), $247, and $0, respectively | -4,758 | -2,342 | -2,532 |
Pension and retiree medical benefits, net of tax of $10, $904, and $279, respectively | -1,583 | 645 | -528 |
Derivative instruments, net of tax of $2,350, $(261), and $(239), respectively | 3,206 | -899 | -88 |
Other comprehensive (loss), net | -3,135 | -2,596 | -3,148 |
Comprehensive income | $170,735 | $152,249 | $126,393 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Consolidated Statements of Comprehensive Income | |||
Foreign currency translation adjustments, tax | ($34) | $247 | $0 |
Pension and retiree medical benefits, tax | 10 | 904 | 279 |
Derivative instruments, tax | $2,350 | ($261) | ($239) |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Oct. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ||
Cash and cash equivalents | $314,873 | $182,993 |
Receivables, net: | ||
Customers (net of $1,481 and $3,035, respectively, for allowance for doubtful accounts) | 151,479 | 147,475 |
Other | 6,679 | 9,696 |
Total receivables, net | 158,158 | 157,171 |
Inventories, net | 274,603 | 240,089 |
Prepaid expenses and other current assets | 33,580 | 33,258 |
Deferred income taxes | 42,822 | 39,756 |
Total current assets | 824,036 | 653,267 |
Property, plant, and equipment, net | 205,195 | 185,096 |
Long-term deferred income taxes | 26,075 | 25,981 |
Goodwill | 91,851 | 91,914 |
Other intangible assets, net | 23,829 | 28,308 |
Other assets | 21,429 | 18,182 |
Total assets | 1,192,415 | 1,002,748 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current portion of long-term debt | 6,640 | |
Short-term debt | 20,818 | |
Accounts payable | 124,271 | 136,158 |
Accrued liabilities: | ||
Warranty | 71,080 | 72,177 |
Advertising and marketing programs | 66,169 | 64,191 |
Compensation and benefit costs | 59,724 | 53,500 |
Insurance | 6,960 | 18,184 |
Income taxes | 4,699 | 1,938 |
Other | 40,059 | 42,697 |
Total current liabilities | 400,420 | 388,845 |
Long-term debt, less current portion | 347,316 | 223,544 |
Deferred revenue | 10,947 | 10,899 |
Deferred income taxes | 5,969 | |
Other long-term liabilities | 25,005 | 14,753 |
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 | ||
Common stock, par value $1.00, authorized 175,000,000 shares; issued and outstanding 55,678,419 shares as of October 31, 2014 and 56,788,723 shares as of October 31, 2013 | 55,678 | 56,789 |
Retained earnings | 368,754 | 314,519 |
Accumulated other comprehensive loss | -15,705 | -12,570 |
Total stockholders' equity | 408,727 | 358,738 |
Total liabilities and stockholders' equity | $1,192,415 | $1,002,748 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Oct. 31, 2014 | Oct. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ||
Customers, allowance for doubtful accounts (in dollars) | $1,481 | $3,035 |
Preferred stock, par value (in dollars per share) | $1 | $1 |
Preferred stock, authorized voting shares | 1,000,000 | 1,000,000 |
Preferred stock, authorized non-voting shares | 850,000 | 850,000 |
Preferred stock, issued voting shares | 0 | 0 |
Preferred stock, issued non-voting shares | 0 | 0 |
Preferred stock, outstanding voting shares | 0 | 0 |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, authorized shares | 175,000,000 | 175,000,000 |
Common stock, issued shares | 55,678,419 | 56,788,723 |
Common stock, outstanding shares | 55,678,419 | 56,788,723 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net earnings | $173,870 | $154,845 | $129,541 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Provision for depreciation, amortization, and impairment losses | 53,138 | 54,134 | 53,634 |
Noncash income from finance affiliate | -7,262 | -7,097 | -5,996 |
(Increase) decrease in deferred income taxes | -4,700 | 149 | -206 |
Stock-based compensation expense | 11,291 | 10,237 | 9,503 |
Other | 28 | 10 | -132 |
Changes in operating assets and liabilities, net of effect of acquisitions: | |||
Receivables, net | -5,042 | -11,912 | -495 |
Inventories, net | -37,183 | 9,373 | -21,973 |
Prepaid expenses and other assets | -3,245 | -6,825 | -6,741 |
Accounts payable, accrued liabilities, deferred revenue, and other long-term liabilities | 1,470 | 18,962 | 28,663 |
Net cash provided by operating activities | 182,365 | 221,876 | 185,798 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property, plant, and equipment | -71,138 | -49,427 | -43,242 |
Proceeds from asset disposals | 479 | 413 | 491 |
Distributions from finance affiliate, net | 5,672 | 6,342 | 5,091 |
Acquisitions, net of cash acquired | -715 | -2,101 | -9,663 |
Net cash used in investing activities | -65,702 | -44,773 | -47,323 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Increase in (repayments) of short-term debt | 19,498 | -415 | -922 |
Increase in (repayments) of long-term debt | 129,557 | -1,739 | -1,858 |
Excess tax benefits from stock-based awards | 8,857 | 6,134 | 9,017 |
Proceeds from exercise of stock options | 7,192 | 9,808 | 20,347 |
Purchases of Toro common stock | -103,039 | -99,587 | -93,395 |
Dividends paid on Toro common stock | -45,048 | -32,499 | -26,230 |
Net cash provided by (used in) financing activities | 17,017 | -118,298 | -93,041 |
Effect of exchange rates on cash and cash equivalents | -1,800 | -1,668 | -464 |
Net increase in cash and cash equivalents | 131,880 | 57,137 | 44,970 |
Cash and cash equivalents as of the beginning of the fiscal year | 182,993 | 125,856 | 80,886 |
Cash and cash equivalents as of the end of the fiscal year | 314,873 | 182,993 | 125,856 |
Cash paid during the fiscal year for: | |||
Interest | 16,925 | 17,054 | 17,147 |
Income taxes | 76,325 | 76,186 | 58,709 |
Shares issued in connection with stock-based compensation plans | 6,619 | 6,629 | 2,986 |
Payment obligations issued in connection with acquisitions | $420 | $1,395 | $100 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
In Thousands, unless otherwise specified | ||||
Balance at Oct. 31, 2011 | $59,206 | $214,387 | ($6,826) | $266,767 |
Increase (Decrease) in Stockholders' Equity | ||||
Cash dividends paid on common stock - $0.80, 0.56, and $0.44 per share during 2014, 2013, and 2012, respectively | -26,230 | -26,230 | ||
Issuance of 532,692, 669,426, and 1,664,835 shares under stock-based compensation plans during 2014, 2013, and 2012, respectively | 1,665 | 27,930 | 29,595 | |
Contribution of stock to a deferred compensation trust | 255 | 255 | ||
Purchase of 1,644,230, 2,147,185, and 2,604,525 shares of common stock during 2014, 2013, and 2012, respectively | -2,605 | -90,790 | -93,395 | |
Excess tax benefits from stock-based awards | 9,017 | 9,017 | ||
Other comprehensive loss | -3,148 | -3,148 | ||
Net earnings | 129,541 | 129,541 | ||
Balance at Oct. 31, 2012 | 58,266 | 264,110 | -9,974 | 312,402 |
Increase (Decrease) in Stockholders' Equity | ||||
Cash dividends paid on common stock - $0.80, 0.56, and $0.44 per share during 2014, 2013, and 2012, respectively | -32,499 | -32,499 | ||
Issuance of 532,692, 669,426, and 1,664,835 shares under stock-based compensation plans during 2014, 2013, and 2012, respectively | 670 | 17,904 | 18,574 | |
Contribution of stock to a deferred compensation trust | 1,466 | 1,466 | ||
Purchase of 1,644,230, 2,147,185, and 2,604,525 shares of common stock during 2014, 2013, and 2012, respectively | -2,147 | -97,441 | -99,588 | |
Excess tax benefits from stock-based awards | 6,134 | 6,134 | ||
Other comprehensive loss | -2,596 | -2,596 | ||
Net earnings | 154,845 | 154,845 | ||
Balance at Oct. 31, 2013 | 56,789 | 314,519 | -12,570 | 358,738 |
Increase (Decrease) in Stockholders' Equity | ||||
Cash dividends paid on common stock - $0.80, 0.56, and $0.44 per share during 2014, 2013, and 2012, respectively | -45,048 | -45,048 | ||
Issuance of 532,692, 669,426, and 1,664,835 shares under stock-based compensation plans during 2014, 2013, and 2012, respectively | 533 | 16,270 | 16,803 | |
Contribution of stock to a deferred compensation trust | 1,681 | 1,681 | ||
Purchase of 1,644,230, 2,147,185, and 2,604,525 shares of common stock during 2014, 2013, and 2012, respectively | -1,644 | -101,395 | -103,039 | |
Excess tax benefits from stock-based awards | 8,857 | 8,857 | ||
Other comprehensive loss | -3,135 | -3,135 | ||
Net earnings | 173,870 | 173,870 | ||
Balance at Oct. 31, 2014 | $55,678 | $368,754 | ($15,705) | $408,727 |
CONSOLIDATED_STATEMENTS_OF_STO1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |||
Cash dividends paid on common stock (in dollars per share) | $0.80 | $0.56 | $0.44 |
Issuance of shares under stock-based compensation plans (in shares) | 532,692 | 669,426 | 1,664,835 |
Purchase of shares of common stock (in shares) | 1,644,230 | 2,147,185 | 2,604,525 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA | |||||||||||
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 company and its wholly owned subsidiaries. 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 companies. 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 investments are recorded at cost. All intercompany accounts and transactions have been eliminated from the consolidated financial statements. | |||||||||||
Accounting Estimates | |||||||||||
In preparing the consolidated financial statements in conformity with United States ("U.S.") generally accepted accounting principles ("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, inventory valuation, warranty reserves, earnout liabilities, allowance for doubtful accounts, pension and postretirement accruals, self-insurance accruals, useful lives for tangible and intangible assets, and future cash flows associated with impairment testing for goodwill 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 and are stated at cost, which approximates fair value. As of October 31, 2014, cash and short-term investments held by the company's foreign subsidiaries that are not available to fund domestic operations unless repatriated were $56,418. | |||||||||||
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 reserves for estimated uncollectible accounts, as described below. | |||||||||||
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 28 and 33 percent of total inventories as of October 31, 2014 and 2013, 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 2014 and 2013, LIFO layers were reduced. This reduction resulted in charging lower inventory costs prevailing in previous years to cost of sales, thus reducing cost of sales by $65 and $122 in fiscal 2014 and 2013, respectively. During fiscal 2012, no LIFO layers were reduced. | |||||||||||
Inventories as of October 31 were as follows: | |||||||||||
2014 | 2013 | ||||||||||
| | | | | | | | ||||
Raw materials and work in progress | $ | 95,144 | $ | 87,668 | |||||||
Finished goods and service parts | 246,954 | 217,796 | |||||||||
| | | | | | | | ||||
Total FIFO value | 342,098 | 305,464 | |||||||||
Less: adjustment to LIFO value | 67,495 | 65,375 | |||||||||
| | | | | | | | ||||
Total | $ | 274,603 | $ | 240,089 | |||||||
| | | | | | | | ||||
Property and Depreciation | |||||||||||
Property, plant, and equipment are carried at cost. The company provides for depreciation of 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 45 years, and equipment over two to seven years. Tooling costs are generally depreciated over three to five years using the straight-line method. Software and web site development costs are generally amortized over two to five years utilizing the straight-line method. Expenditures for major renewals and improvements, which substantially increase the useful lives of existing assets, are capitalized, and 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, 2014, 2013, and 2012, the company capitalized $1,710, $722, and $256 of interest, respectively. | |||||||||||
Property, plant, and equipment as of October 31 was as follows: | |||||||||||
| | | | | | | | ||||
2014 | 2013 | ||||||||||
| | | | | | | | ||||
Land and land improvements | $ | 32,731 | $ | 27,632 | |||||||
Buildings and leasehold improvements | 156,374 | 133,866 | |||||||||
Machinery and equipment | 305,131 | 284,492 | |||||||||
Tooling | 177,704 | 173,039 | |||||||||
Computer hardware and software | 77,395 | 73,302 | |||||||||
Construction in process | 10,857 | 29,173 | |||||||||
| | | | | | | | ||||
Subtotal | 760,192 | 721,504 | |||||||||
Less: accumulated depreciation | 554,997 | 536,408 | |||||||||
| | | | | | | | ||||
Total property, plant, and equipment, net | $ | 205,195 | $ | 185,096 | |||||||
| | | | | | | | ||||
During fiscal years 2014, 2013, and 2012, the company recorded depreciation expense of $47,136, $48,207, and $46,840, respectively. | |||||||||||
Goodwill and Indefinite-Life 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 some trade names, which are considered to have indefinite lives, are not amortized; however, the company reviews them for impairment annually during each fourth fiscal quarter or more frequently if changes in circumstances or occurrence of events suggest the fair value may not be recoverable. | |||||||||||
The company reviewed the fair value of its reporting units that have goodwill on their respective balance sheets and compared these fair values to the respective carrying amounts during the fourth quarter of fiscal 2014. The company determined that it has eight reporting units, which are the same as its eight operating segments. Six reporting units contain goodwill on their respective balance sheets. The company's estimate of fair value is determined based on a discounted cash flow model. Where available and as appropriate, comparable market multiples are used to corroborate the results of the discounted cash flow method. Growth rates for sales and profits are determined using inputs from the company's annual plan and long-range planning process. Management also makes estimates of discount rates, perpetuity growth assumptions, market comparables, and other factors. As of August 29, 2014, the company performed its annual impairment analysis and determined there was no impairment of goodwill for any of its reporting units as the fair values exceeded their respective carrying amounts. | |||||||||||
As of August 29, 2014, the company also performed an assessment of its indefinite-life 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 the prior fiscal year, the company concluded its indefinite-life intangible assets were not impaired during fiscal 2014 or 2013. In fiscal 2012, the company wrote down $400 of an indefinite-life intangible asset. | |||||||||||
Other Long-Lived Assets | |||||||||||
Other long-lived assets include property, plant, and equipment and definite-lived intangible assets, which 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 1.5 to 13 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. 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. Asset groups have identifiable cash flows and are largely independent of other asset groups. 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. For long-lived assets to be abandoned, the company tests for potential impairment. If the company commits to a plan to abandon a long-lived asset before the end of its previously estimated useful life, depreciation estimates are revised. | |||||||||||
For fiscal 2014 and 2013, the company did not have any impairment losses of other long-lived assets. Based on the company's impairment analysis, the company wrote down $386 of other long-lived assets during fiscal 2012. Additionally, based on the company's analysis of estimated useful lives of property, plant, and equipment, the company did not have any accelerated depreciation expense during fiscal 2014. During fiscal 2013 and 2012, the company had accelerated depreciation expense of $824 and $305, respectively. | |||||||||||
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. However, the company's right to offset balances due from suppliers against payment obligations is restricted by this arrangement for those payment obligations that have been financed by suppliers. As of October 31, 2014 and 2013, $12,296 and $16,572, 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 medical, dental, and workers' compensation claims, and product liability occurrences. 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 provides an accrual for estimated future warranty costs at the time of sale. The company also establishes accruals for major rework campaigns. The amount of warranty accruals is 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 | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Beginning balance | $ | 72,177 | $ | 69,848 | |||||||
Warranty provisions | 41,608 | 41,067 | |||||||||
Warranty claims | (38,568 | ) | (35,529 | ) | |||||||
Changes in estimates | (4,137 | ) | (3,209 | ) | |||||||
| | | | | | | | ||||
Ending balance | $ | 71,080 | $ | 72,177 | |||||||
| | | | | | | | ||||
Derivatives | |||||||||||
Derivatives, 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 also utilizes cross currency swaps to offset foreign currency intercompany loan exposures. Derivatives are recognized on the consolidated balance sheet at fair value. If the derivative is designated as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded as a component of other comprehensive income within the consolidated statements of comprehensive income and the consolidated statements of stockholders' equity, and recognized in earnings when the hedged item affects earnings. Derivatives that do not meet the requirements for hedge accounting are adjusted to fair value through other income, net in 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 (loss) 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, 2014 and 2013 was $22,080 and $18,283, 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. Examples of sales promotion and incentive programs include rebate programs on certain professional products sold to distributors, volume discounts, retail financing support, commissions, and other sales discounts and promotional programs. The 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. | |||||||||||
Cost of Sales | |||||||||||
Cost of sales primarily comprises direct materials and supplies consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, 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 a third party financing company and Red Iron. The company has repurchased immaterial amounts of inventory under these repurchase agreements over the last three fiscal years. However, an adverse change in retail sales could cause this situation to change, and thereby require the company to repurchase a portion of financed product. See Note 13 for additional information regarding the company's repurchase arrangements. | |||||||||||
Included as a reduction to net 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 as a marketing tool to assist customers to buy inventory. The financing costs for distributor and dealer inventories were $21,080, $19,729, and $19,492 for the fiscal years ended October 31, 2014, 2013, and 2012, 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 $43,590, $48,071, and $46,947 for the fiscal years ended October 31, 2014, 2013, and 2012, 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. 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. 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 common stock and units. | |||||||||||
Reconciliations of basic and diluted weighted-average shares of common stock outstanding are as follows: | |||||||||||
BASIC | |||||||||||
| | | | | | | | | | | |
(Shares in thousands) | 2014 | 2013 | 2012 | ||||||||
Fiscal years ended October 31 | |||||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock | 56,346 | 57,898 | 59,440 | ||||||||
Assumed issuance of contingent shares | 13 | 24 | 6 | ||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock and assumed issuance of contingent shares | 56,359 | 57,922 | 59,446 | ||||||||
| | | | | | | | | | | |
DILUTED | |||||||||||
| | | | | | | | | | | |
(Shares in thousands) | 2014 | 2013 | 2012 | ||||||||
Fiscal years ended October 31 | |||||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock and assumed issuance of contingent shares | 56,359 | 57,922 | 59,446 | ||||||||
Effect of dilutive securities | 1,269 | 1,183 | 1,172 | ||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock, assumed issuance of contingent and restricted shares, and effect of dilutive securities | 57,628 | 59,105 | 60,618 | ||||||||
| | | | | | | | | | | |
Incremental shares from options, restricted stock, and restricted stock units are computed by the treasury stock method. Options, restricted stock, and restricted stock units of 259,925, 182,868, and 33,427 during fiscal 2014, 2013, and 2012, 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 December 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-11, Disclosures about Offsetting Assets and Liabilities. ASU No. 2011-11 requires entities to disclose gross and net information about both instruments and transactions eligible for offset in the statement of financial position and those subject to an agreement similar to a master netting arrangement. This would include derivatives and other financial securities arrangements. The company adopted this guidance in the first quarter of fiscal 2014, as required. The adoption of this guidance did not have an impact on the company's consolidated financial statements. | |||||||||||
In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU No. 2013-02 requires entities to disclose, for items reclassified out of accumulated other comprehensive income (loss) and into net income in their entirety, the effect of the reclassification on each affected net income line item. ASU No. 2013-02 also requires a cross reference to other required U.S. GAAP disclosures for accumulated other comprehensive income (loss) reclassification items that are not reclassified in their entirety into net income. The company adopted this guidance in its fiscal 2013 fourth quarter. The adoption of this guidance did not have an impact on the company's consolidated financial statements. | |||||||||||
ACQUISITIONS
ACQUISITIONS | 12 Months Ended | ||
Oct. 31, 2014 | |||
Acquisition | |||
Acquisition | 2 | ACQUISITIONS | |
On November 27, 2013, during the first quarter of fiscal 2014, the company completed the acquisition of certain assets of a quality value-priced line of outdoor lighting fixtures for the landscape lighting market. The purchase price of this acquisition was $1,245, which included cash payments, issuance of a long-term note, and an estimated contingent consideration. | |||
On September 30, 2013, during the fourth quarter of fiscal 2013, the company completed the acquisition of certain assets and assumed certain liabilities for a company in China that manufactures water-efficient drip irrigation products, sprinklers, emitters, and filters for agriculture, landscaping, and green house production. The net purchase price of this acquisition was $3,481, of which $2,101 was paid in cash in fiscal 2013 and $1,380 was paid in cash in fiscal 2014. | |||
On April 25, 2012, during the second quarter of fiscal 2012, the company completed the acquisition of certain assets for an equipment line of concrete and mortar mixers, material handlers, compaction equipment, and other concrete power tools for the rental and specialty construction market. On February 10, 2012, also during the second quarter of fiscal 2012, the company completed the acquisition of certain assets and assumed certain liabilities for an equipment line of vibratory plows, trenchers, and horizontal directional drills for the underground utilities market. On December 9, 2011, during the first quarter of fiscal 2012, the company completed the acquisition of certain assets and assumed certain liabilities for a greens roller product line for the golf course market. The aggregate purchase price of these three acquisitions was $11,112, which included cash payments and issuance of long-term notes. | |||
The purchase price of all of these acquisitions was allocated to the identifiable assets acquired and liabilities assumed based on estimates of their fair value, with the excess purchase price for acquisitions recorded as goodwill. Additional purchase accounting disclosures have been omitted given the immateriality of these acquisitions in relation to the company's consolidated financial condition and results of operations. See Note 5 for further details related to the acquired intangible assets. | |||
On November 14, 2014, subsequent to the end of fiscal 2014, the company acquired substantially all of the assets (excluding accounts receivable) of the BOSS® professional snow and ice management business of privately held Northern Star Industries, Inc. Based in Iron Mountain, Michigan, BOSS designs, manufactures, and sells a broad line of snowplows, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, all terrain vehicles, utility terrain vehicles, skid steers, and front-end loaders. Through this acquisition, the company added another professional contractor brand; a portfolio of counter-seasonal equipment; manufacturing and distribution facilities located in Iron Mountain, Michigan; and a distribution network for these products. Management believes that this acquisition positions the company to strengthen and grow its relationships with professional contractors, municipalities, and other customers by enabling the company to provide them with innovative, durable equipment and high-quality service they need each season. | |||
This acquisition closed for $227,882, subject to certain post-closing adjustments, which included a cash payment of $197,882 and issuance of a long-term note of $30,000. The company funded the acquisition with cash on hand, a $130,000 term loan, and an increase in short-term debt of $20,000 under the company's recently renewed revolving credit facility. During fiscal year 2014, the company expensed $509 of acquisition related costs, which was recorded in selling, general, and administrative expense. The company also capitalized $373 of debt issuance costs in other assets related to the $130,000 term loan, which will be amortized over the term of the loan. | |||
The purchase price of this acquisition will be accounted for as a business combination using the acquisition method, which requires that, among other things, assets acquired and liabilities assumed be recorded at their fair value as of the acquisition date using independent appraisals and other analyses. The excess of the consideration transferred over those fair values is recorded as goodwill, and the company expects the goodwill to be deductible for tax purposes. Due to the timing of the acquisition, the initial valuation and subsequent purchase accounting for this acquisition is incomplete at this time. | |||
INVESTMENT_IN_JOINT_VENTURE
INVESTMENT IN JOINT VENTURE | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
Investment in Joint Venture | |||||||||||
Investment in Joint Venture | 3 | 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 provides inventory financing, including floor plan and open account receivable financing, to distributors and dealers of the company's products in the U.S. and select distributors of the company's products in Canada. The initial term will continue until October 31, 2017, subject to unlimited automatic two-year extensions thereafter. Either the company or TCFIF may elect not to extend the initial term or any subsequent term by giving one-year notice to the other party. Additionally, in connection with the joint venture, the company and an affiliate of TCFIF entered into an arrangement to provide inventory financing to dealers of the company's products in Canada. | |||||||||||
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. Each of the company and TCFIF 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 $450,000 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, 2014 and 2013 was $14,890 and $13,300, 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. In addition, the company has provided recourse to Red Iron for certain outstanding receivables, which amounted to a maximum amount of $470 and $465 as of October 31, 2014 and 2013, respectively. | |||||||||||
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 new receivables financed for dealers and distributors under this arrangement during fiscal 2014, 2013, and 2012 was $1,280,505, $1,211,470, and $1,191,343, respectively. | |||||||||||
Summarized financial information for Red Iron is presented as follows: | |||||||||||
For the twelve months ended October 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Revenue | $ | 22,678 | $ | 22,418 | $ | 19,765 | |||||
Net income | 16,139 | 15,776 | 13,326 | ||||||||
| | | | | | | | | | | |
As of October 31 | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Finance receivables, net | $ | 290,927 | $ | 260,319 | |||||||
Other assets | 3,659 | 4,040 | |||||||||
Total liabilities | 261,527 | 234,804 | |||||||||
| | | | | | | | ||||
OTHER_INCOME_NET
OTHER INCOME, NET | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
OTHER INCOME, NET | |||||||||||
OTHER INCOME, NET | 4 | OTHER INCOME, NET | |||||||||
Other income (expense) is as follows: | |||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Interest income | $ | 465 | $ | 447 | $ | 786 | |||||
Retail financing revenue | 1,077 | 1,093 | 1,106 | ||||||||
Foreign currency exchange rate loss | (1,006 | ) | (702 | ) | (1,786 | ) | |||||
Income from affiliates | 7,262 | 7,097 | 5,996 | ||||||||
Litigation recovery (settlements), net | 127 | 3,071 | (36 | ) | |||||||
Miscellaneous | 789 | 1,255 | 1,489 | ||||||||
| | | | | | | | | | | |
Total other income, net | $ | 8,714 | $ | 12,261 | $ | 7,555 | |||||
| | | | | | | | | | | |
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | ||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | 5 | GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||||||
Goodwill – The changes in the net carrying amount of goodwill for fiscal 2014 and 2013 were as follows: | ||||||||||||||
Professional | Residential | Total | ||||||||||||
Segment | Segment | |||||||||||||
| | | | | | | | | | | ||||
Balance as of October 31, 2012 | $ | 80,984 | $ | 11,016 | $ | 92,000 | ||||||||
Translation adjustments | (22 | ) | (64 | ) | (86 | ) | ||||||||
| | | | | | | | | | | ||||
Balance as of October 31, 2013 | $ | 80,962 | $ | 10,952 | $ | 91,914 | ||||||||
Translation adjustments | (16 | ) | (47 | ) | (63 | ) | ||||||||
| | | | | | | | | | | ||||
Balance as of October 31, 2014 | $ | 80,946 | $ | 10,905 | $ | 91,851 | ||||||||
| | | | | | | | | | | ||||
Other Intangible Assets – The components of other intangible assets were as follows: | ||||||||||||||
October 31, 2014 | Estimated | Gross | Accumulated | Net | ||||||||||
Life | Carrying | Amortization | ||||||||||||
(Years) | Amount | |||||||||||||
| | | | | | | | | | | | | | |
Patents | 1.5 - 13 | $ | 10,711 | $ | (8,942 | ) | $ | 1,769 | ||||||
Non-compete agreements | 1.5 - 10 | 7,039 | (5,315 | ) | 1,724 | |||||||||
Customer-related | 1.5 - 13 | 8,650 | (5,517 | ) | 3,133 | |||||||||
Developed technology | 1.5 - 10 | 28,841 | (16,869 | ) | 11,972 | |||||||||
Trade names | 1.5 - 5 | 1,515 | (1,165 | ) | 350 | |||||||||
Other | 800 | (800 | ) | – | ||||||||||
| | | | | | | | | | | | | | |
Total amortizable | 57,556 | (38,608 | ) | 18,948 | ||||||||||
| | | | | | | | | | | | | | |
Non-amortizable – trade names | 4,881 | – | 4,881 | |||||||||||
| | | | | | | | | | | | | | |
Total other intangible assets, net | $ | 62,437 | $ | (38,608 | ) | $ | 23,829 | |||||||
| | | | | | | | | | | | | | |
October 31, 2013 | Estimated | Gross | Accumulated | Net | ||||||||||
Life | Carrying | Amortization | ||||||||||||
(Years) | Amount | |||||||||||||
| | | | | | | | | | | | | | |
Patents | 1.5 - 13 | $ | 10,213 | $ | (8,537 | ) | $ | 1,676 | ||||||
Non-compete agreements | 1.5 - 10 | 6,849 | (4,488 | ) | 2,361 | |||||||||
Customer-related | 1.5 - 13 | 8,654 | (4,660 | ) | 3,994 | |||||||||
Developed technology | 1.5 - 10 | 28,224 | (13,478 | ) | 14,746 | |||||||||
Trade names | 1.5 - 5 | 1,515 | (865 | ) | 650 | |||||||||
Other | 800 | (800 | ) | – | ||||||||||
| | | | | | | | | | | | | | |
Total amortizable | 56,255 | (32,828 | ) | 23,427 | ||||||||||
| | | | | | | | | | | | | | |
Non-amortizable – trade names | 4,881 | – | 4,881 | |||||||||||
| | | | | | | | | | | | | | |
Total other intangible assets, net | $ | 61,136 | $ | (32,828 | ) | $ | 28,308 | |||||||
| | | | | | | | | | | | | | |
The change in gross carrying amount of other intangible assets of $1,301 from October 31, 2014 compared to October 31, 2013 was the result of intangible assets acquired from a company, disclosed in Note 2, and changes in foreign currency exchange rates. | ||||||||||||||
Amortization expense for intangible assets for the fiscal years ended October 31, 2014, 2013, and 2012 was $6,002, $5,769, and $6,008, respectively. Estimated amortization expense for the succeeding fiscal years is as follows: 2015, $5,610; 2016, $5,091; 2017, $4,196; 2018, $2,168; 2019, $1,191; and after 2019, $692. | ||||||||||||||
SHORTTERM_CAPITAL_RESOURCES
SHORT-TERM CAPITAL RESOURCES | 12 Months Ended | ||
Oct. 31, 2014 | |||
SHORT-TERM CAPITAL RESOURCES | |||
SHORT-TERM CAPITAL RESOURCES | 6 | SHORT-TERM CAPITAL RESOURCES | |
As of October 31, 2014, the company had a $150,000 unsecured senior five-year revolving credit facility that expires in October 2019, which replaced the prior revolving credit facility that was scheduled to mature in July 2015. 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 the approval of the named borrowers on the revolving credit facility, 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. The company's non-U.S. operations also maintain unsecured short-term lines of credit in the aggregate amount of $13,257. These facilities bear interest at various rates depending on the rates in their respective countries of operation. Under all these lines of credit, the company had $20,818 outstanding as of October 31, 2014. The weighted-average interest rate on outstanding short-term debt as of October 31, 2014 was 1.95%. There was no outstanding debt under the company's lines of credit as of October 31, 2013. | |||
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 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 entered into in October 2014, the company is not limited in the amount for payments of cash dividends and stock repurchases as long as the debt to earnings before interest, tax, depreciation, and amortization ("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. Under the prior revolving credit facility that was scheduled to mature in July 2015, the company was not limited in the amounts 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 2.75; however, the company was limited to $50,000 per fiscal year if the debt to EBITDA ratio from the previous quarter compliance certificate was greater than 2.75. In fiscal 2014, 2013 and 2012, 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. The company was in compliance with all covenants related to the lines of credit described above as of October 31, 2014 and 2013. | |||
LONGTERM_DEBT
LONG-TERM DEBT | 12 Months Ended | |||||||
Oct. 31, 2014 | ||||||||
LONG-TERM DEBT. | ||||||||
LONG-TERM DEBT | 7 | LONG-TERM DEBT | ||||||
A summary of long-term debt as of October 31 is as follows: | ||||||||
2014 | 2013 | |||||||
| | | | | | | | |
Term loan, due October 25, 2019 | $ | 130,000 | $ | – | ||||
7.800% Debentures, due June 15, 2027 | 100,000 | 100,000 | ||||||
6.625% Senior Notes, due May 1, 2037 | 123,606 | 123,544 | ||||||
Other | 350 | – | ||||||
| | | | | | | | |
Total long-term debt | 353,956 | 223,544 | ||||||
Less current portion | 6,640 | – | ||||||
| | | | | | | | |
Long-term debt, less current portion | $ | 347,316 | $ | 223,544 | ||||
| | | | | | | | |
In October 2014, the company obtained a $130,000 term loan with various banks, which was a part of the new credit agreement that included the 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% senior notes due May 1, 2037. The senior notes were priced at 98.513% 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%, the effective interest rate is 6.741% 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% of the principal amount of the senior notes plus accrued and unpaid interest to the date of repurchase. | ||||||||
In connection with the issuance in June 1997 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 has been deferred and is being recognized as an adjustment to interest expense over the term of the debt securities issued. As of October 31, 2014, the company had $1,995 remaining in other assets for the excess termination fees over deferred income. | ||||||||
Principal payments required on long-term debt in each of the next five fiscal years ending October 31 are as follows: 2015, $6,640; 2016, $13,140; 2017, $13,070; 2018, $13,000; 2019, $84,500; and after 2019, $225,000. | ||||||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Stockholders' Equity | 8 | STOCKHOLDERS' EQUITY | ||||||||||||
Common Shares Authorized. On March 12, 2013, following the approval by the company's shareholders at its 2013 annual meeting of shareholders, the company amended its Restated Certificate of Incorporation by filing a Certificate of Amendment to Restated Certificate of Incorporation to increase the number of authorized shares from 100 million to 175 million. | ||||||||||||||
Stock Repurchase Program. On December 11, 2012, the company's Board of Directors authorized the repurchase of 5 million shares of the company's common stock in open-market or in privately negotiated transactions. This program has no expiration date but may be terminated by the Board at any time. During fiscal 2014, 2013, and 2012, the company paid $101,674, $98,842, and $92,719 to repurchase an aggregate of 1,622,569 shares, 2,131,615 shares, and 2,591,039 shares, respectively. As of October 31, 2014, 2,720,493 shares remained authorized for repurchase. | ||||||||||||||
Treasury Shares. As of October 31, 2014, the company had 22,386,021 treasury shares at a cost of $1,163,706. As of October 31, 2013, the company had 21,275,717 treasury shares at a cost of $1,081,086. | ||||||||||||||
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 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Foreign currency translation adjustments | $ | 12,536 | $ | 7,778 | $ | 5,436 | ||||||||
Pension and postretirement benefits | 5,266 | 3,683 | 4,328 | |||||||||||
Derivative instruments | (2,097 | ) | 1,109 | 210 | ||||||||||
| | | | | | | | | | | ||||
Total accumulated other comprehensive loss | $ | 15,705 | $ | 12,570 | $ | 9,974 | ||||||||
| | | | | | | | | | | ||||
The components and activity of AOCL are as follows: | ||||||||||||||
Foreign | Pension | Cash Flow | Total | |||||||||||
Currency | and Post- | Derivative | ||||||||||||
Translation | retirement | Instruments | ||||||||||||
Adjustments | Benefits | |||||||||||||
| | | | | | | | | | | | | | |
AOCL as of October 31, 2012 | $ | 5,436 | $ | 4,328 | $ | 210 | $ | 9,974 | ||||||
Other comprehensive loss before reclassifications | 2,342 | – | 1,870 | 4,212 | ||||||||||
Amounts reclassified from AOCL | – | (645 | ) | (971 | ) | (1,616 | ) | |||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive loss (income) | $ | 2,342 | $ | (645 | ) | $ | 899 | $ | 2,596 | |||||
| | | | | | | | | | | | | | |
AOCL as of October 31, 2013 | $ | 7,778 | $ | 3,683 | $ | 1,109 | $ | 12,570 | ||||||
| | | | | | | | | | | | | | |
Other comprehensive loss before reclassifications | $ | 4,758 | $ | – | $ | (1,644 | ) | $ | 3,114 | |||||
Amounts reclassified from AOCL | – | 1,583 | (1,562 | ) | 21 | |||||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive loss (income) | $ | 4,758 | $ | 1,583 | $ | (3,206 | ) | $ | 3,135 | |||||
| | | | | | | | | | | | | | |
AOCL as of October 31, 2014 | $ | 12,536 | $ | 5,266 | $ | (2,097 | ) | $ | 15,705 | |||||
| | | | | | | | | | | | | | |
AOCL associated with pension and postretirement benefits are included in Note 11. Details of amounts reclassified from accumulated other comprehensive loss to the respective line items in net earnings for cash flow derivative instruments are included in Note 14. | ||||||||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
INCOME TAXES | |||||||||||
INCOME TAXES | 9 | INCOME TAXES | |||||||||
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 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Statutory federal income tax rate | 35 | % | 35 | % | 35 | % | |||||
Increase (reduction) in income taxes resulting from: | |||||||||||
Domestic manufacturer's deduction | (1.9 | ) | (2.0 | ) | (2.0 | ) | |||||
State and local income taxes, net of federal income tax benefit | 1.5 | 1.5 | 1.5 | ||||||||
Effect of foreign source income | (1.2 | ) | (0.3 | ) | 0.2 | ||||||
Domestic research tax credit | (0.2 | ) | (2.4 | ) | (0.2 | ) | |||||
Other, net | (1.0 | ) | (0.1 | ) | (0.5 | ) | |||||
| | | | | | | | | | | |
Consolidated effective tax rate | 32.2 | % | 31.7 | % | 34 | % | |||||
| | | | | | | | | | | |
Components of the provision for income taxes were as follows: | |||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Provision for income taxes: | |||||||||||
Current – | |||||||||||
Federal | $ | 75,815 | $ | 61,388 | $ | 59,405 | |||||
State | 5,997 | 5,108 | 4,609 | ||||||||
Non-U.S. | 3,672 | 5,734 | 3,854 | ||||||||
| | | | | | | | | | | |
Current provision | $ | 85,484 | $ | 72,230 | $ | 67,868 | |||||
| | | | | | | | | | | |
Deferred – | |||||||||||
Federal | $ | (3,047 | ) | $ | 824 | $ | (685 | ) | |||
State | (81 | ) | 91 | (132 | ) | ||||||
Non-U.S. | 219 | (1,277 | ) | (330 | ) | ||||||
| | | | | | | | | | | |
Deferred benefit | (2,909 | ) | (362 | ) | (1,147 | ) | |||||
| | | | | | | | | | | |
Total provision for income taxes | $ | 82,575 | $ | 71,868 | $ | 66,721 | |||||
| | | | | | | | | | | |
Earnings before income taxes were as follows: | |||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Earnings before income taxes: | |||||||||||
U.S. | $ | 239,501 | $ | 213,509 | $ | 189,206 | |||||
Non-U.S. | 16,944 | 13,204 | 7,056 | ||||||||
| | | | | | | | | | | |
Total | $ | 256,445 | $ | 226,713 | $ | 196,262 | |||||
| | | | | | | | | | | |
During the fiscal years ended October 31, 2014, 2013, and 2012, respectively, $8,857, $6,134, and $9,017 was added to stockholders' equity reflecting the permanent book to tax difference in accounting for tax benefits related to employee stock-based award transactions. | |||||||||||
The tax effects of temporary differences that give rise to the net deferred income tax assets are presented below: | |||||||||||
October 31 | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Deferred tax assets (liabilities): | |||||||||||
Allowance for doubtful accounts | $ | 858 | $ | 1,635 | |||||||
Inventory items | 3,918 | 3,969 | |||||||||
Compensation and other accruals | 40,932 | 38,168 | |||||||||
Employee benefits | 20,374 | 18,315 | |||||||||
Depreciation | 3,093 | (2,467 | ) | ||||||||
Other | 3,734 | 5,550 | |||||||||
| | | | | | | | ||||
Deferred tax assets | $ | 72,909 | $ | 65,170 | |||||||
Valuation allowance | (4,012 | ) | (5,572 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | $ | 68,897 | $ | 59,598 | |||||||
| | | | | | | | ||||
The valuation allowance as of October 31, 2014 and 2013 principally applies to capital loss carryforwards and foreign net operating loss carryforwards that are expected to expire prior to utilization. | |||||||||||
As of October 31, 2014, the company had net operating loss carryforwards of approximately $23,786 in foreign jurisdictions. The carryforward periods on the company's foreign loss carryforwards are as follows: $10,740 that do not expire; none that expire in fiscal years 2015 thru 2018; and $13,046 that expire between fiscal years 2019 and 2022. | |||||||||||
As of October 31, 2014, the company had approximately $64,513 of accumulated undistributed earnings from subsidiaries outside the U.S. that are considered to be reinvested indefinitely. No deferred tax liability has been provided for such earnings. | |||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||
Balance as of October 31, 2013 | $ | 4,506 | |||||||||
Decrease as a result of tax positions taken during a prior period | (164 | ) | |||||||||
Increase as a result of tax positions taken during the current period | 726 | ||||||||||
Decrease relating to settlements with taxing authorities | (26 | ) | |||||||||
| | | | | |||||||
Balance as of October 31, 2014 | $ | 5,042 | |||||||||
| | | | | |||||||
Included in the balance of unrecognized tax benefits as of October 31, 2014 are potential benefits of $3,655 that, if recognized, would affect the effective tax rate from continuing operations. | |||||||||||
The company recognizes potential accrued interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes. In addition to the liability of $5,042 for unrecognized tax benefits as of October 31, 2014 was an amount of approximately $134 for accrued interest and penalties. To the extent interest and penalties are not assessed with respect to uncertain tax positions, the amounts accrued will be revised and reflected as an adjustment to the provision for income taxes. | |||||||||||
The company anticipates that total unrecognized tax benefits will not change significantly within the next 12 months. | |||||||||||
The company is subject to U.S. federal income tax as well as income tax of numerous state and foreign jurisdictions. The company is generally no longer subject to U.S. federal tax examinations for taxable years before fiscal 2010 and with limited exceptions, state and foreign income tax examinations for fiscal years before 2009. | |||||||||||
STOCKBASED_COMPENSATION_PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Stock-Based Compensation | 10 | STOCK-BASED COMPENSATION PLANS | ||||||||||||
The company maintains The Toro Company 2010 Equity and Incentive Plan, as amended ("the plan"), for officers, other employees, and non-employee members of the company's Board of Directors. This plan allows the company to grant equity-based compensation awards, including stock options, restricted stock and restricted stock units, and performance share awards. | ||||||||||||||
The compensation costs related to stock-based awards were as follows: | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Stock option awards | $ | 5,142 | $ | 4,710 | $ | 4,200 | ||||||||
Restricted stock and restricted stock units | 1,653 | 1,694 | 1,721 | |||||||||||
Performance share awards | 4,496 | 3,833 | 3,582 | |||||||||||
| | | | | | | | | | | ||||
Total compensation cost for stock-based awards | $ | 11,291 | $ | 10,237 | $ | 9,503 | ||||||||
| | | | | | | | | | | ||||
Tax benefit realized for tax deductions from stock-based awards | $ | 12,988 | $ | 10,614 | $ | 13,266 | ||||||||
| | | | | | | | | | | ||||
The number of unissued shares of common stock available for future equity-based grants under the company's equity-based compensation plan was 3,474,967 as of October 31, 2014. Shares of common stock issued upon exercise or settlement of stock options, restricted stock and restricted stock units, and performance shares are issued from treasury shares. | ||||||||||||||
Stock Option Awards. Under the 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 non-officer 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 officers and other employees are subject to accelerated expensing if the option holder meets the retirement definition set forth in the plan. In that case, the fair value of the options is expensed in the fiscal year of grant because 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 fair value of the options granted is fully expensed on the date of the grant. | ||||||||||||||
The table below presents stock option activity for fiscal 2014: | ||||||||||||||
Stock | Weighted- | Weighted- | Intrinsic | |||||||||||
Option | Average | Average | Value | |||||||||||
Awards | Exercise | Contractual | ||||||||||||
Price | Life(years) | |||||||||||||
| | | | | | | | | | | | | | |
Outstanding as of October 31, 2013 | 3,069,778 | $ | 25.55 | 5.9 | $ | 102,493 | ||||||||
Granted | 288,832 | 59.45 | — | — | ||||||||||
Exercised | (302,266 | ) | 22.19 | — | — | |||||||||
Cancelled | (6,692 | ) | 59.5 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding as of October 31, 2014 | 3,049,652 | $ | 29.04 | 5.4 | $ | 99,713 | ||||||||
| | | | | | | | | | | | | | |
Exercisable as of October 31, 2014 | 2,338,853 | $ | 23.98 | 4.6 | $ | 88,289 | ||||||||
| | | | | | | | | | | | | | |
As of October 31, 2014, there was $1,855 of total unrecognized compensation expense related to unvested stock options. That cost is expected to be recognized over a weighted-average period of 1.9 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 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Market value of stock options exercised | $ | 19,017 | $ | 23,160 | $ | 35,901 | ||||||||
Intrinsic value of options exercised | 12,311 | 13,875 | 16,061 | |||||||||||
| | | | | | | | | | | ||||
The fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation method with the assumptions noted in the table below. The expected life is a significant assumption as it determines the period for which the risk-free interest rate, volatility, and dividend yield must be applied. The expected life is the average length of time in which officers, other employees, and non-employee directors are expected to exercise their stock options, which is primarily based on historical experience. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. Expected volatilities are based on the 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 valuation assumptions of stock-based compensation for the following fiscal years: | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | ||||||||
Expected life of option in years | 6 | 6 | 6 | |||||||||||
Expected volatility | 34.28% – 34.42% | 35.18% – 35.19% | 34.87% – 35.02% | |||||||||||
Weighted-average volatility | 34.29% | 35.19% | 35.01% | |||||||||||
Risk-free interest rate | 1.92% | 0.88% | 1.20% | |||||||||||
Expected dividend yield | 1.25% – 1.27% | 1.04% – 1.07% | 1.31% – 1.40% | |||||||||||
Weighted-average dividend yield | 1.25% | 1.07% | 1.32% | |||||||||||
| | | | | | | ||||||||
Weighted-average fair value at date of grant | $18.69 | $13.03 | $8.56 | |||||||||||
| | | | | | | ||||||||
Restricted Stock and Restricted Stock Units. Under the plan, restricted stock and restricted stock units are generally granted to certain non-officer employees. 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 units 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 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 units, is recognized for these awards over the vesting period. | ||||||||||||||
The company granted restricted stock and restricted stock units during the following fiscal years as follows: | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Weighted-average fair value at date of grant | $ | 63.05 | $ | 46.10 | $ | 33.61 | ||||||||
Fair value of restricted stock and restricted stock units vested | 1,890 | 1,207 | 967 | |||||||||||
| | | | | | | | | | | ||||
The table below summarizes the activity during fiscal 2014 for unvested restricted stock and restricted stock units: | ||||||||||||||
Restricted | Weighted- | |||||||||||||
Stock and | Average Fair | |||||||||||||
Units | Value at Date | |||||||||||||
of Grant | ||||||||||||||
| | | | | | | | |||||||
Unvested as of October 31, 2013 | 109,288 | $ | 36.32 | |||||||||||
Granted | 29,975 | 63.05 | ||||||||||||
Vested | (58,047 | ) | 32.43 | |||||||||||
Forfeited | (2,687 | ) | 41.93 | |||||||||||
| | | | | | | | |||||||
Unvested as of October 31, 2014 | 78,529 | $ | 49.22 | |||||||||||
| | | | | | | | |||||||
As of October 31, 2014, there was $2,019 of total unrecognized compensation expense related to unvested restricted stock and restricted stock units. That cost is expected to be recognized over a weighted-average period of 2.2 years. | ||||||||||||||
Performance Share Awards. 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 will be increased (up to 200 percent of target levels) or reduced (down to zero) based on the level of achievement of performance goals and 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. | ||||||||||||||
The company granted performance share awards as follows: | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Weighted-average fair value at date of grant | $ | 59.31 | $ | 42.06 | $ | 28.24 | ||||||||
Fair value of performance share awards vested | 7,926 | 9,057 | 1,828 | |||||||||||
| | | | | | | | | | | ||||
The table below summarizes the activity during fiscal 2014 for unvested performance share awards: | ||||||||||||||
Performance | Weighted- | |||||||||||||
Shares | Average Fair | |||||||||||||
Value at Date | ||||||||||||||
of Grant | ||||||||||||||
| | | | | | | | |||||||
Unvested as of October 31, 2013 | 520,800 | $ | 33.41 | |||||||||||
Granted | 121,600 | 60.19 | ||||||||||||
Vested | (133,640 | ) | 31.76 | |||||||||||
Cancelled | (31,960 | ) | 31.76 | |||||||||||
| | | | | | | | |||||||
Unvested as of October 31, 2014 | 476,800 | $ | 40.82 | |||||||||||
| | | | | | | | |||||||
As of October 31, 2014, there was $4,293 of total unrecognized compensation expense related to unvested performance share awards. That cost is expected to be recognized over a weighted-average period of 1.7 years. | ||||||||||||||
EMPLOYEE_RETIREMENT_PLANS
EMPLOYEE RETIREMENT PLANS | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
EMPLOYEE RETIREMENT PLANS | |||||||||||
EMPLOYEE RETIREMENT PLANS | 11 | 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 $15,550, $14,931, and $14,304 for the fiscal years ended October 31, 2014, 2013, and 2012, 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, 2014 and 2013 was $45,420 and $42,034, respectively, and the net liability amount recognized in the consolidated balance sheets as of October 31, 2014 and 2013 was $3,432 and $3,982, respectively. The accumulated benefit obligation of these plans as of October 31, 2014 and 2013 was $42,431 and $39,967, respectively. The funded status of these plans as of October 31, 2014 and 2013 was $10,085 and $9,063, respectively. The fair value of the plan assets as of October 31, 2014 and 2013 was $35,335 and $32,971, respectively. The net expense recognized in the consolidated financial statements for these plans was $1,092, $1,149, and $703 for the fiscal years ended October 31, 2014, 2013, and 2012, respectively. | |||||||||||
Amounts recognized in accumulated other comprehensive loss consisted of: | |||||||||||
Fiscal years ended October 31 | Defined Benefit | Postretirement | Total | ||||||||
Pension Plans | Benefit Plan | ||||||||||
| | | | | | | | | | | |
2014 | |||||||||||
Net actuarial loss | $ | 4,521 | $ | 513 | $ | 5,034 | |||||
Net prior service cost (credit) | 257 | (25 | ) | 232 | |||||||
| | | | | | | | | | | |
Accumulated other comprehensive loss | $ | 4,778 | $ | 488 | $ | 5,266 | |||||
| | | | | | | | | | | |
2013 | |||||||||||
Net actuarial loss | $ | 2,915 | $ | 611 | $ | 3,526 | |||||
Net prior service cost (credit) | 289 | (132 | ) | 157 | |||||||
| | | | | | | | | | | |
Accumulated other comprehensive loss | $ | 3,204 | $ | 479 | $ | 3,683 | |||||
| | | | | | | | | | | |
The following amounts are included in accumulated other comprehensive loss as of October 31, 2014 and are expected to be recognized as components of net periodic benefit cost during fiscal 2015. | |||||||||||
Defined Benefit | Postretirement | Total | |||||||||
Pension Plans | Benefit Plan | ||||||||||
| | | | | | | | | | | |
Net actuarial loss | $ | 570 | $ | 2 | $ | 572 | |||||
Net prior service cost (credit) | 51 | (41 | ) | 10 | |||||||
| | | | | | | | | | | |
Total | $ | 621 | $ | (39 | ) | $ | 582 | ||||
| | | | | | | | | | | |
Amounts recognized in net periodic benefit cost and other comprehensive loss consisted of: | |||||||||||
Fiscal years ended October 31 | Defined Benefit | Postretirement | Total | ||||||||
Pension Plans | Benefit Plan | ||||||||||
| | | | | | | | | | | |
2014 | |||||||||||
Net actuarial gain | $ | 88 | $ | (89 | ) | $ | (1 | ) | |||
Amortization of unrecognized prior service (credit) cost | (32 | ) | 106 | 74 | |||||||
Amortization of unrecognized actuarial loss (gain) | 1,519 | (9 | ) | 1,510 | |||||||
| | | | | | | | | | | |
Total recognized in other comprehensive loss | $ | 1,575 | $ | 8 | $ | 1,583 | |||||
| | | | | | | | | | | |
Total recognized in net periodic benefit cost and other comprehensive loss | $ | 2,110 | $ | 565 | $ | 2,675 | |||||
| | | | | | | | | | | |
2013 | |||||||||||
Net actuarial gain | $ | (1,170 | ) | $ | (283 | ) | $ | (1,453 | ) | ||
Amortization of unrecognized prior service (credit) cost | (34 | ) | 106 | 72 | |||||||
Amortization of unrecognized actuarial loss (gain) | 768 | (32 | ) | 736 | |||||||
| | | | | | | | | | | |
Total recognized in other comprehensive loss (income) | $ | (436 | ) | $ | (209 | ) | $ | (645 | ) | ||
| | | | | | | | | | | |
Total recognized in net periodic benefit cost and other comprehensive loss | $ | 117 | $ | 387 | $ | 504 | |||||
| | | | | | | | | | | |
The company has omitted the remaining disclosures for its defined benefit plans and postretirement 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, 2014 | ||||||||||||||
Segment Data | ||||||||||||||
Segment Data | 12 | SEGMENT DATA | ||||||||||||
The company's businesses are organized, managed, and internally grouped into segments based on differences in products and services. Segment selection was based on the manner in which management organizes segments for making operating and investment decisions and assessing performance. The company has identified eight 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 company-owned domestic distributorships, 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 and irrigation products. Beginning in fiscal 2015, the Professional business segment will also include professional snow and ice removal equipment as a result of the acquisition of the BOSS business, as discussed in Note 2. 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. Irrigation and lighting products consist of sprinkler heads, electric and hydraulic valves, controllers, computer irrigation central control 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, 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 over the Internet. | ||||||||||||||
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. | ||||||||||||||
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 domestic wholly owned distribution companies, 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 table shows summarized financial information concerning the company's reportable segments: | ||||||||||||||
Fiscal years ended October 31 | Professional | Residential | Other | Total | ||||||||||
| | | | | | | | | | | | | | |
2014 | ||||||||||||||
Net sales | $ | 1,477,578 | $ | 672,443 | $ | 22,670 | $ | 2,172,691 | ||||||
Intersegment gross sales | 41,376 | 424 | (41,800 | ) | – | |||||||||
Earnings (loss) before income taxes | 276,305 | 76,916 | (96,776 | ) | 256,445 | |||||||||
Total assets | 573,086 | 172,984 | 446,345 | 1,192,415 | ||||||||||
Capital expenditures | 25,226 | 12,417 | 33,495 | 71,138 | ||||||||||
Depreciation and amortization | 34,228 | 8,883 | 10,027 | 53,138 | ||||||||||
| | | | | | | | | | | | | | |
2013 | ||||||||||||||
Net sales | $ | 1,425,259 | $ | 594,411 | $ | 21,761 | $ | 2,041,431 | ||||||
Intersegment gross sales | 40,416 | 402 | (40,818 | ) | – | |||||||||
Earnings (loss) before income taxes | 254,424 | 62,033 | (89,744 | ) | 226,713 | |||||||||
Total assets | 528,926 | 167,918 | 305,904 | 1,002,748 | ||||||||||
Capital expenditures | 32,362 | 7,838 | 9,227 | 49,427 | ||||||||||
Depreciation and amortization | 34,706 | 10,321 | 9,107 | 54,134 | ||||||||||
| | | | | | | | | | | | | | |
2012 | ||||||||||||||
Net sales | $ | 1,329,504 | $ | 607,435 | $ | 21,751 | $ | 1,958,690 | ||||||
Intersegment gross sales | 37,324 | 26 | (37,350 | ) | – | |||||||||
Earnings (loss) before income taxes | 232,104 | 57,889 | (93,731 | ) | 196,262 | |||||||||
Total assets | 527,159 | 169,899 | 238,141 | 935,199 | ||||||||||
Capital expenditures | 29,313 | 4,164 | 9,765 | 43,242 | ||||||||||
Depreciation and amortization | 34,876 | 10,919 | 7,839 | 53,634 | ||||||||||
| | | | | | | | | | | | | | |
The following table presents the details of the Other segment operating loss before income taxes: | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Corporate expenses | $ | (88,539 | ) | $ | (85,359 | ) | $ | (81,376 | ) | |||||
Interest expense | (15,426 | ) | (16,210 | ) | (16,906 | ) | ||||||||
Other income | 7,189 | 11,825 | 4,551 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | (96,776 | ) | $ | (89,744 | ) | $ | (93,731 | ) | |||||
| | | | | | | | | | | ||||
The following table presents net sales for groups of similar products and services: | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Equipment | $ | 1,765,845 | $ | 1,649,489 | $ | 1,586,864 | ||||||||
Irrigation and lighting | 406,846 | 391,942 | 371,826 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | 2,172,691 | $ | 2,041,431 | $ | 1,958,690 | ||||||||
| | | | | | | | | | | ||||
Sales to one customer in the Residential segment accounted for 11 percent, 10 percent, and 11 percent of total consolidated gross sales in fiscal 2014, 2013, and 2012, respectively. | ||||||||||||||
Geographic Data | ||||||||||||||
The following geographic area data includes net sales based on product shipment destination. Long-lived assets consist of net property, plant, and equipment, which is determined 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 | |||||||||||
| | | | | | | | | | | ||||
2014 | ||||||||||||||
Net sales | $ | 1,550,077 | $ | 622,614 | $ | 2,172,691 | ||||||||
Long-lived assets | 169,797 | 35,398 | 205,195 | |||||||||||
| | | | | | | | | | | ||||
2013 | ||||||||||||||
Net sales | $ | 1,426,060 | $ | 615,371 | $ | 2,041,431 | ||||||||
Long-lived assets | 143,547 | 41,549 | 185,096 | |||||||||||
| | | | | | | | | | | ||||
2012 | ||||||||||||||
Net sales | $ | 1,364,377 | $ | 594,313 | $ | 1,958,690 | ||||||||
Long-lived assets | 137,708 | 42,815 | 180,523 | |||||||||||
| | | | | | | | | | | ||||
COMMITMENTS_AND_CONTINGENT_LIA
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended | ||
Oct. 31, 2014 | |||
COMMITMENTS AND CONTINGENT LIABILITIES | |||
COMMITMENTS AND CONTINGENT LIABILITIES | 13 | COMMITMENTS AND CONTINGENT LIABILITIES | |
Leases | |||
Total rental expense for operating leases was $24,329, $24,399, and $22,166 for the fiscal years ended October 31, 2014, 2013, and 2012, respectively. As of October 31, 2014, future minimum lease payments under noncancelable operating leases amounted to $67,522 as follows: 2015, $15,308; 2016, $11,427; 2017, $7,353; 2018, $5,344; 2019, $4,204 and after 2019, $23,886. | |||
Customer Financing | |||
Wholesale Financing. In fiscal 2009, Toro Credit Company sold its receivable portfolio to Red Iron, the company's joint venture with TCFIF. 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 $18,693 of receivables from the company during fiscal 2014. As of October 31, 2014, $10,945 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, 2014, the company was contingently liable to repurchase up to a maximum amount of $9,369 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. 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, 2014 was $1,893. | |||
Purchase Commitments | |||
As of October 31, 2014, the company had $18,921 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 agreement for the renovation of its original corporate facility located at Bloomington, Minnesota, to accommodate needs for expansion of product development and test capacities, for a maximum obligation, subject to certain exceptions, of $15,291. | |||
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, 2014 and 2013, the company had $16,220 and $12,681, 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 United States 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 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, 2014 | ||||||||||||||||||||||||
FINANCIAL INSTRUMENTS | ||||||||||||||||||||||||
FINANCIAL INSTRUMENTS | 14 | 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 actively manages the exposure of its foreign currency exchange rate market risk by entering into various hedging instruments, authorized under company policies that place controls on these activities, with counterparties that are highly rated financial institutions. The company's hedging activities primarily involve the use of forward currency contracts, as well as cross currency swaps that are intended 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 changes. Decisions on whether to use such contracts 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's policy does not allow the use of derivatives 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 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. | ||||||||||||||||||||||||
Cash Flow Hedges. The company recognizes all derivative instruments as either assets or liabilities at fair value on the consolidated balance sheet and formally documents relationships between cash flow hedging instruments and hedged transactions, as well as its risk-management objective and strategy for undertaking hedge transactions. This process includes linking all derivatives to the forecasted transactions, such as sales to third parties and foreign plant operations. Changes in fair values of outstanding cash flow hedge derivatives, except the ineffective portion, are recorded in other comprehensive income ("OCI"), until net earnings is affected by the variability of cash flows of the hedged transaction. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in net earnings. The consolidated statement of earnings classification of effective hedge results is the same as that of the underlying exposure. Results of 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 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 a hedge's inception and on an ongoing basis, whether the derivatives that are designated as hedges have been highly effective in offsetting changes in the cash flows of the hedged transactions and whether those derivatives 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 hedge, the company discontinues hedge accounting prospectively. When the company discontinues 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 recognized immediately in net earnings. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the company carries the derivative at its fair value on the consolidated balance sheet, recognizing future changes in the fair value in other income, net. For the fiscal years ended October 31, 2014 and 2013, there were immaterial losses on contracts reclassified into earnings as a result of the discontinuance of cash flow hedges. As of October 31, 2014, the notional amount of outstanding forward contracts designated as cash flow hedges was $106,906. Additionally, the company has one cross currency interest rate swap instrument outstanding as of October 31, 2014 for a fixed pay notional of 36,593 Romanian New Leu and receive floating notional of 8,500 Euro. | ||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments. The company also enters into foreign currency contracts that include forward currency contracts and cross currency swaps to mitigate the remeasurement of specific assets and liabilities on the consolidated balance sheet. These contracts are not designated as 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 derivatives and consolidated balance sheet location. | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
October 31, 2014 | October 31, 2013 | October 31, 2014 | October 31, 2013 | |||||||||||||||||||||
Balance | Fair | Balance | Fair | Balance | Fair | Balance | Fair | |||||||||||||||||
Sheet | Value | Sheet | Value | Sheet | Value | Sheet | Value | |||||||||||||||||
Location | Location | Location | Location | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |||
Derivatives Designated as Hedging Instruments | ||||||||||||||||||||||||
Forward currency contracts | Prepaid expenses | 4,626 | Prepaid expenses | 558 | Accrued liabilities | 9 | Accrued liabilities | 1,381 | ||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||
Cross currency contract | Prepaid expenses | 831 | Prepaid expenses | Accrued liabilities | Accrued liabilities | 326 | ||||||||||||||||||
– | – | |||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||||||||||||
Forward currency contracts | Prepaid expenses | 1,404 | Prepaid expenses | 708 | Accrued liabilities | Accrued liabilities | 550 | |||||||||||||||||
$ | $ | $ | – | $ | ||||||||||||||||||||
Cross currency contract | Prepaid expenses | Prepaid expenses | Accrued liabilities | 536 | Accrued liabilities | 117 | ||||||||||||||||||
– | – | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |||
Total Derivatives | 6,861 | 1,266 | 545 | 2,374 | ||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |||
The following table presents the impact of derivative instruments on the consolidated statements of earnings and the consolidated statements of comprehensive income for the company's derivatives designated as cash flow hedging instruments for the fiscal years ended October 31, 2014 and 2013, respectively. | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Gain (Loss) | Location of Gain (Loss) Reclassified | Gain (Loss) Reclassified | Location of Gain (Loss) Recognized in | Gain (Loss) Recognized | ||||||||||||||||||||
Recognized in OCI on | from AOCL into Income | from AOCL into Income | Income on Derivatives (Ineffective | in Income on Derivatives | ||||||||||||||||||||
Derivatives, net of tax | (Effective Portion) | (Effective Portion) | Portion and excluded from | (Ineffective Portion and | ||||||||||||||||||||
(Effective Portion) | Effectiveness Testing) | Excluded from | ||||||||||||||||||||||
Effectiveness Testing) | ||||||||||||||||||||||||
Fiscal years ended | October 31, | October 31, | October 31, | October 31, | October 31, | October 31, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Forward currency contracts | $ | 4,150 | $ | 7 | Net sales | $ | (1,128 | ) | $ | (805 | ) | Other income, net | $ | 120 | $ | 648 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Forward currency contracts | (712 | ) | (231 | ) | Cost of sales | 103 | 473 | |||||||||||||||||
Cross currency contracts | (238 | ) | (680 | ) | Other income, net | (537 | ) | (639 | ) | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 3,200 | $ | (904 | ) | Total | $ | (1,562 | ) | $ | (971 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
As of October 31, 2014, the company anticipates to reclassify approximately $3,736 of gains from AOCL to earnings during the next twelve months. | ||||||||||||||||||||||||
The following table presents the impact of derivative instruments on the consolidated statements of earnings for the company's derivatives not designated as hedging instruments. | ||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||
Gain (Loss) Recognized | ||||||||||||||||||||||||
in Net Earnings | ||||||||||||||||||||||||
Fiscal Year Ended | ||||||||||||||||||||||||
Location of Gain (Loss) | October 31, | October 31, | ||||||||||||||||||||||
Recognized in Net Earnings | 2014 | 2013 | ||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||
Forward currency contracts | Other income, net | $ | 3,555 | $ | (1,402 | ) | ||||||||||||||||||
Cross currency contracts | Other income, net | 951 | (483 | ) | ||||||||||||||||||||
| | | | | | | | | | |||||||||||||||
Total | $ | 4,506 | $ | (1,885 | ) | |||||||||||||||||||
| | | | | | | | | | |||||||||||||||
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 contracts 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 contracts that are recorded in the consolidated balance sheets: | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Assets | Liabilities | |||||||||||||||||||||||
October 31, 2014 | Gross Amounts | Gross Liabilities | Net Amount of | Gross Amounts | Gross Assets | Net Amount of | ||||||||||||||||||
of Recognized | Offset in the | Assets Presented | of Recognized | offset in the | Liabilities Presented | |||||||||||||||||||
Assets | Balance Sheet | in the Balance Sheet | Liabilities | Balance Sheet | in the Balance Sheet | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Forward currency contracts | $ | 6,265 | $ | (235 | ) | $ | 6,030 | $ | (9 | ) | – | $ | (9 | ) | ||||||||||
Cross currency contracts | 831 | – | 831 | (536 | ) | – | (536 | ) | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Total | $ | 7,096 | $ | (235 | ) | $ | 6,861 | $ | (545 | ) | – | $ | (545 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
| | | | | | | | | | | | | | | | | | | | |||||
Assets | Liabilities | |||||||||||||||||||||||
October 31, 2013 | Gross Amounts | Gross Liabilities | Net Amount of | Gross Amounts | Gross Assets | Net Amount of | ||||||||||||||||||
of Recognized | Offset in the | Assets Presented | of Recognized | offset in the | Liabilities Presented | |||||||||||||||||||
Assets | Balance Sheet | in the Balance Sheet | Liabilities | Balance Sheet | in the Balance Sheet | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Forward currency contracts | $ | 1,266 | – | $ | 1,266 | $ | (1,968 | ) | $ | 37 | $ | (1,931 | ) | |||||||||||
Cross currency contracts | – | – | – | (443 | ) | – | (443 | ) | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Total | $ | 1,266 | – | $ | 1,266 | $ | (2,411 | ) | $ | 37 | $ | (2,374 | ) | |||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
During the second quarter of fiscal 2007, the company entered into three treasury lock agreements based on a 30-year U.S. Treasury security with a principal balance of $30,000 each for two of the agreements and $40,000 for the third agreement. These treasury lock agreements provided for a single payment at maturity, which was April 23, 2007, based on the change in value of the reference treasury security. These agreements were designated as cash flow hedges and resulted in a net settlement of $182, which was recorded in AOCL, and will be amortized to interest expense over the 30-year term of the senior notes. The unrecognized loss portion of the fair value of these agreements in AOCL as of October 31, 2014 and 2013 was $137 and $143, respectively. | ||||||||||||||||||||||||
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 flow), 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. | ||||||||||||||||||||||||
Cash balances are valued at their carrying amounts in the consolidated balance sheets, which are reasonable estimates of their fair value due to their short-term nature. Forward currency contracts are valued based on observable market transactions of forward currency prices and spot currency rates as of the reporting date. The fair value of cross currency contracts is determined using discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs such as interest rates and foreign currency exchange rates. In addition, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, such as collateral postings, thresholds, mutual puts, and guarantees, are incorporated in the fair values to account for potential nonperformance risk. The unfunded deferred compensation liability is primarily subject to changes in fixed-income investment contracts based on current yields. For accounts receivable and accounts payable, carrying amounts are a reasonable estimate of fair value given their short-term nature. | ||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis, as of October 31, 2014 and 2013, respectively, are summarized below: | ||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
October 31, 2014 | Fair | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Value | ||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 314,873 | $ | 314,873 | $ | – | – | |||||||||||||||||
Forward currency contracts | 6,030 | – | 6,030 | – | ||||||||||||||||||||
Cross currency contracts | 831 | – | 831 | – | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Total assets | $ | 321,734 | $ | 314,873 | $ | 6,861 | – | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Forward currency contracts | $ | 9 | – | $ | 9 | – | ||||||||||||||||||
Cross currency contracts | 536 | – | 536 | – | ||||||||||||||||||||
Deferred compensation liabilities | 2,141 | – | 2,141 | – | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Total liabilities | $ | 2,686 | – | $ | 2,686 | – | ||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
| | | | | | | | | | | | | | |||||||||||
October 31, 2013 | Fair | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Value | ||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 182,993 | $ | 182,993 | $ | – | – | |||||||||||||||||
Forward currency contracts | 1,266 | – | 1,266 | – | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Total assets | $ | 184,259 | $ | 182,993 | $ | 1,266 | – | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Forward currency contracts | $ | 1,931 | – | $ | 1,931 | – | ||||||||||||||||||
Cross currency contracts | 443 | – | 443 | – | ||||||||||||||||||||
Deferred compensation liabilities | 2,777 | – | 2,777 | – | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Total liabilities | $ | 5,151 | – | $ | 5,151 | – | ||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
There were no transfers between Level 1 and Level 2 during the fiscal years ended October 31, 2014 and 2013. | ||||||||||||||||||||||||
As of October 31, 2014, the estimated fair value of long-term debt with fixed interest rates was $260,970 compared to its carrying amount of $223,956. As of October 31, 2013, the estimated fair value of long-term debt with fixed interest rates was $243,074 compared to its carrying amount of $223,544. The fair value is estimated by discounting the projected cash flows using the rate at which similar amounts of debt could currently be borrowed. Long-term debt is a Level 2 liability in the fair value hierarchy. | ||||||||||||||||||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | ||
Oct. 31, 2014 | |||
Subsequent Events | |||
Subsequent Events | 15 | SUBSEQUENT EVENTS | |
On November 14, 2014, subsequent to fiscal 2014 year end and during the first quarter of fiscal 2015, the company acquired the BOSS professional snow and ice management business from privately held Northern Star Industries, Inc. Further information regarding this acquisition is presented in Note 2. The company evaluated all other subsequent events and concluded that no other subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements. | |||
QUARTERLY_FINANCIAL_DATA_unaud
QUARTERLY FINANCIAL DATA (unaudited) | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | ||||||||||||||
QUARTERLY FINANCIAL DATA (unaudited) | ||||||||||||||
QUARTERLY FINANCIAL DATA (unaudited) | 16 | QUARTERLY FINANCIAL DATA (unaudited) | ||||||||||||
Summarized quarterly financial data for fiscal 2014 and 2013 are as follows: | ||||||||||||||
| | | | | | | | | | | | | | |
Fiscal year ended | First | Second | Third | Fourth | ||||||||||
October 31, 2014 | ||||||||||||||
Quarter | ||||||||||||||
| | | | | | | | | | | | | | |
Net sales | $ | 445,981 | $ | 745,030 | $ | 567,540 | $ | 414,140 | ||||||
Gross profit | 163,514 | 264,540 | 202,080 | 143,137 | ||||||||||
Net earnings | 25,869 | 87,086 | 50,013 | 10,902 | ||||||||||
Basic net earnings per share1 | 0.45 | 1.54 | 0.89 | 0.19 | ||||||||||
Diluted net earnings per share1 | 0.44 | 1.51 | 0.87 | 0.19 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fiscal year ended | First | Second | Third | Fourth | ||||||||||
October 31, 2013 | ||||||||||||||
Quarter | ||||||||||||||
| | | | | | | | | | | | | | |
Net sales | $ | 444,661 | $ | 704,486 | $ | 509,918 | $ | 382,366 | ||||||
Gross profit | 165,817 | 252,301 | 178,031 | 128,648 | ||||||||||
Net earnings | 31,396 | 78,402 | 40,097 | 4,950 | ||||||||||
Basic net earnings per share1 | 0.54 | 1.35 | 0.70 | 0.09 | ||||||||||
Diluted net earnings per share1 | 0.53 | 1.32 | 0.68 | 0.08 | ||||||||||
| | | | | | | | | | | | | | |
1 | Net earnings per share amounts do not sum to equal 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, 2014 | |||||||||||||||||
SCHEDULE II Valuation and Qualifying Accounts | |||||||||||||||||
SCHEDULE II Valuation and Qualifying Accounts | SCHEDULE II | ||||||||||||||||
THE TORO COMPANY AND SUBSIDIARIES | |||||||||||||||||
Valuation and Qualifying Accounts | |||||||||||||||||
| | | | | | | | | | | | | | | | | |
(Dollars in thousands) | Balance as of | Charged to | Other2 | Deductions3 | Balance as of | ||||||||||||
the beginning | costs and | the end of | |||||||||||||||
of the fiscal year | expenses1 | the fiscal year | |||||||||||||||
| | | | | | | | | | | | | | | | | |
Fiscal year ended October 31, 2014 | |||||||||||||||||
Allowance for doubtful accounts and notes receivable reserves | $ | 3,425 | $ | (79 | ) | $ | – | $ | 1,865 | $ | 1,481 | ||||||
| | | | | | | | | | | | | | | | | |
Fiscal year ended October 31, 2013 | |||||||||||||||||
Allowance for doubtful accounts and notes receivable reserves | 3,733 | 123 | – | 431 | 3,425 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Fiscal year ended October 31, 2012 | |||||||||||||||||
Allowance for doubtful accounts and notes receivable reserves | 2,040 | 2,160 | 12 | 479 | 3,733 | ||||||||||||
| | | | | | | | | | | | | | | | | |
1 | Provision/(recovery). | ||||||||||||||||
2 | Addition due to acquisitions. | ||||||||||||||||
3 | Uncollectible accounts charged off. | ||||||||||||||||
| | | | | | | | | | | | | | ||||
(Dollars in thousands) | Balance as of | Charged to | Deductions2 | Balance as of | |||||||||||||
the beginning | costs and | the end of | |||||||||||||||
of the fiscal year | expenses1 | the fiscal year | |||||||||||||||
| | | | | | | | | | | | | | ||||
Fiscal year ended October 31, 2014 | |||||||||||||||||
Accrued advertising and marketing programs | $ | 64,191 | $ | 306,650 | $ | 304,672 | $ | 66,169 | |||||||||
| | | | | | | | | | | | | | ||||
Fiscal year ended October 31, 2013 | |||||||||||||||||
Accrued advertising and marketing programs | 56,264 | 287,217 | 279,290 | 64,191 | |||||||||||||
| | | | | | | | | | | | | | ||||
Fiscal year ended October 31, 2012 | |||||||||||||||||
Accrued advertising and marketing programs | 47,161 | 214,474 | 205,371 | 56,264 | |||||||||||||
| | | | | | | | | | | | | | ||||
1 | Provision consists of rebates, cooperative advertising, floor planning costs, commissions, and other promotional program expenses. The expense of each program is classified either as a reduction of net sales or as a component of selling, general, and administrative expense. | ||||||||||||||||
2 | Claims paid. | ||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA (Policies) | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA | |||||||||||
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation | ||||||||||
The accompanying consolidated financial statements include the accounts of the company and its wholly owned subsidiaries. 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 companies. 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 investments are recorded at cost. All intercompany accounts and transactions have been eliminated from the consolidated financial statements. | |||||||||||
Accounting Estimates | Accounting Estimates | ||||||||||
In preparing the consolidated financial statements in conformity with United States ("U.S.") generally accepted accounting principles ("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, inventory valuation, warranty reserves, earnout liabilities, allowance for doubtful accounts, pension and postretirement accruals, self-insurance accruals, useful lives for tangible and intangible assets, and future cash flows associated with impairment testing for goodwill 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 and are stated at cost, which approximates fair value. As of October 31, 2014, cash and short-term investments held by the company's foreign subsidiaries that are not available to fund domestic operations unless repatriated were $56,418. | |||||||||||
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 reserves for estimated uncollectible accounts, as described below. | |||||||||||
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 28 and 33 percent of total inventories as of October 31, 2014 and 2013, 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 2014 and 2013, LIFO layers were reduced. This reduction resulted in charging lower inventory costs prevailing in previous years to cost of sales, thus reducing cost of sales by $65 and $122 in fiscal 2014 and 2013, respectively. During fiscal 2012, no LIFO layers were reduced. | |||||||||||
Inventories as of October 31 were as follows: | |||||||||||
2014 | 2013 | ||||||||||
| | | | | | | | ||||
Raw materials and work in progress | $ | 95,144 | $ | 87,668 | |||||||
Finished goods and service parts | 246,954 | 217,796 | |||||||||
| | | | | | | | ||||
Total FIFO value | 342,098 | 305,464 | |||||||||
Less: adjustment to LIFO value | 67,495 | 65,375 | |||||||||
| | | | | | | | ||||
Total | $ | 274,603 | $ | 240,089 | |||||||
| | | | | | | | ||||
Property and Depreciation | Property and Depreciation | ||||||||||
Property, plant, and equipment are carried at cost. The company provides for depreciation of 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 45 years, and equipment over two to seven years. Tooling costs are generally depreciated over three to five years using the straight-line method. Software and web site development costs are generally amortized over two to five years utilizing the straight-line method. Expenditures for major renewals and improvements, which substantially increase the useful lives of existing assets, are capitalized, and 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, 2014, 2013, and 2012, the company capitalized $1,710, $722, and $256 of interest, respectively. | |||||||||||
Property, plant, and equipment as of October 31 was as follows: | |||||||||||
| | | | | | | | ||||
2014 | 2013 | ||||||||||
| | | | | | | | ||||
Land and land improvements | $ | 32,731 | $ | 27,632 | |||||||
Buildings and leasehold improvements | 156,374 | 133,866 | |||||||||
Machinery and equipment | 305,131 | 284,492 | |||||||||
Tooling | 177,704 | 173,039 | |||||||||
Computer hardware and software | 77,395 | 73,302 | |||||||||
Construction in process | 10,857 | 29,173 | |||||||||
| | | | | | | | ||||
Subtotal | 760,192 | 721,504 | |||||||||
Less: accumulated depreciation | 554,997 | 536,408 | |||||||||
| | | | | | | | ||||
Total property, plant, and equipment, net | $ | 205,195 | $ | 185,096 | |||||||
| | | | | | | | ||||
During fiscal years 2014, 2013, and 2012, the company recorded depreciation expense of $47,136, $48,207, and $46,840, respectively. | |||||||||||
Goodwill and Indefinite-Life Intangible Assets | Goodwill and Indefinite-Life 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 some trade names, which are considered to have indefinite lives, are not amortized; however, the company reviews them for impairment annually during each fourth fiscal quarter or more frequently if changes in circumstances or occurrence of events suggest the fair value may not be recoverable. | |||||||||||
The company reviewed the fair value of its reporting units that have goodwill on their respective balance sheets and compared these fair values to the respective carrying amounts during the fourth quarter of fiscal 2014. The company determined that it has eight reporting units, which are the same as its eight operating segments. Six reporting units contain goodwill on their respective balance sheets. The company's estimate of fair value is determined based on a discounted cash flow model. Where available and as appropriate, comparable market multiples are used to corroborate the results of the discounted cash flow method. Growth rates for sales and profits are determined using inputs from the company's annual plan and long-range planning process. Management also makes estimates of discount rates, perpetuity growth assumptions, market comparables, and other factors. As of August 29, 2014, the company performed its annual impairment analysis and determined there was no impairment of goodwill for any of its reporting units as the fair values exceeded their respective carrying amounts. | |||||||||||
As of August 29, 2014, the company also performed an assessment of its indefinite-life 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 the prior fiscal year, the company concluded its indefinite-life intangible assets were not impaired during fiscal 2014 or 2013. In fiscal 2012, the company wrote down $400 of an indefinite-life intangible asset. | |||||||||||
Other Long-Lived Assets | Other Long-Lived Assets | ||||||||||
Other long-lived assets include property, plant, and equipment and definite-lived intangible assets, which 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 1.5 to 13 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. 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. Asset groups have identifiable cash flows and are largely independent of other asset groups. 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. For long-lived assets to be abandoned, the company tests for potential impairment. If the company commits to a plan to abandon a long-lived asset before the end of its previously estimated useful life, depreciation estimates are revised. | |||||||||||
For fiscal 2014 and 2013, the company did not have any impairment losses of other long-lived assets. Based on the company's impairment analysis, the company wrote down $386 of other long-lived assets during fiscal 2012. Additionally, based on the company's analysis of estimated useful lives of property, plant, and equipment, the company did not have any accelerated depreciation expense during fiscal 2014. During fiscal 2013 and 2012, the company had accelerated depreciation expense of $824 and $305, respectively. | |||||||||||
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. However, the company's right to offset balances due from suppliers against payment obligations is restricted by this arrangement for those payment obligations that have been financed by suppliers. As of October 31, 2014 and 2013, $12,296 and $16,572, 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 medical, dental, and workers' compensation claims, and product liability occurrences. 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 provides an accrual for estimated future warranty costs at the time of sale. The company also establishes accruals for major rework campaigns. The amount of warranty accruals is 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 | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Beginning balance | $ | 72,177 | $ | 69,848 | |||||||
Warranty provisions | 41,608 | 41,067 | |||||||||
Warranty claims | (38,568 | ) | (35,529 | ) | |||||||
Changes in estimates | (4,137 | ) | (3,209 | ) | |||||||
| | | | | | | | ||||
Ending balance | $ | 71,080 | $ | 72,177 | |||||||
| | | | | | | | ||||
Derivatives | Derivatives | ||||||||||
Derivatives, 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 also utilizes cross currency swaps to offset foreign currency intercompany loan exposures. Derivatives are recognized on the consolidated balance sheet at fair value. If the derivative is designated as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded as a component of other comprehensive income within the consolidated statements of comprehensive income and the consolidated statements of stockholders' equity, and recognized in earnings when the hedged item affects earnings. Derivatives that do not meet the requirements for hedge accounting are adjusted to fair value through other income, net in 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 (loss) 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, 2014 and 2013 was $22,080 and $18,283, 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. Examples of sales promotion and incentive programs include rebate programs on certain professional products sold to distributors, volume discounts, retail financing support, commissions, and other sales discounts and promotional programs. The 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. | |||||||||||
Cost of Sales | Cost of Sales | ||||||||||
Cost of sales primarily comprises direct materials and supplies consumed in the manufacture of product, as well as manufacturing labor, depreciation expense, 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 a third party financing company and Red Iron. The company has repurchased immaterial amounts of inventory under these repurchase agreements over the last three fiscal years. However, an adverse change in retail sales could cause this situation to change, and thereby require the company to repurchase a portion of financed product. See Note 13 for additional information regarding the company's repurchase arrangements. | |||||||||||
Included as a reduction to net 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 as a marketing tool to assist customers to buy inventory. The financing costs for distributor and dealer inventories were $21,080, $19,729, and $19,492 for the fiscal years ended October 31, 2014, 2013, and 2012, 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 $43,590, $48,071, and $46,947 for the fiscal years ended October 31, 2014, 2013, and 2012, 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. 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. 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 common stock and units. | |||||||||||
Reconciliations of basic and diluted weighted-average shares of common stock outstanding are as follows: | |||||||||||
BASIC | |||||||||||
| | | | | | | | | | | |
(Shares in thousands) | 2014 | 2013 | 2012 | ||||||||
Fiscal years ended October 31 | |||||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock | 56,346 | 57,898 | 59,440 | ||||||||
Assumed issuance of contingent shares | 13 | 24 | 6 | ||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock and assumed issuance of contingent shares | 56,359 | 57,922 | 59,446 | ||||||||
| | | | | | | | | | | |
DILUTED | |||||||||||
| | | | | | | | | | | |
(Shares in thousands) | 2014 | 2013 | 2012 | ||||||||
Fiscal years ended October 31 | |||||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock and assumed issuance of contingent shares | 56,359 | 57,922 | 59,446 | ||||||||
Effect of dilutive securities | 1,269 | 1,183 | 1,172 | ||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock, assumed issuance of contingent and restricted shares, and effect of dilutive securities | 57,628 | 59,105 | 60,618 | ||||||||
| | | | | | | | | | | |
Incremental shares from options, restricted stock, and restricted stock units are computed by the treasury stock method. Options, restricted stock, and restricted stock units of 259,925, 182,868, and 33,427 during fiscal 2014, 2013, and 2012, 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 Pronouncement Policy Adopted | New Accounting Pronouncements Adopted | ||||||||||
In December 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-11, Disclosures about Offsetting Assets and Liabilities. ASU No. 2011-11 requires entities to disclose gross and net information about both instruments and transactions eligible for offset in the statement of financial position and those subject to an agreement similar to a master netting arrangement. This would include derivatives and other financial securities arrangements. The company adopted this guidance in the first quarter of fiscal 2014, as required. The adoption of this guidance did not have an impact on the company's consolidated financial statements. | |||||||||||
In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU No. 2013-02 requires entities to disclose, for items reclassified out of accumulated other comprehensive income (loss) and into net income in their entirety, the effect of the reclassification on each affected net income line item. ASU No. 2013-02 also requires a cross reference to other required U.S. GAAP disclosures for accumulated other comprehensive income (loss) reclassification items that are not reclassified in their entirety into net income. The company adopted this guidance in its fiscal 2013 fourth quarter. The adoption of this guidance did not have an impact on the company's consolidated financial statements. | |||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA (Tables) | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA | |||||||||||
Schedule of Inventories | |||||||||||
2014 | 2013 | ||||||||||
| | | | | | | | ||||
Raw materials and work in progress | $ | 95,144 | $ | 87,668 | |||||||
Finished goods and service parts | 246,954 | 217,796 | |||||||||
| | | | | | | | ||||
Total FIFO value | 342,098 | 305,464 | |||||||||
Less: adjustment to LIFO value | 67,495 | 65,375 | |||||||||
| | | | | | | | ||||
Total | $ | 274,603 | $ | 240,089 | |||||||
| | | | | | | | ||||
Schedule of property, plant and equipment | |||||||||||
| | | | | | | | ||||
2014 | 2013 | ||||||||||
| | | | | | | | ||||
Land and land improvements | $ | 32,731 | $ | 27,632 | |||||||
Buildings and leasehold improvements | 156,374 | 133,866 | |||||||||
Machinery and equipment | 305,131 | 284,492 | |||||||||
Tooling | 177,704 | 173,039 | |||||||||
Computer hardware and software | 77,395 | 73,302 | |||||||||
Construction in process | 10,857 | 29,173 | |||||||||
| | | | | | | | ||||
Subtotal | 760,192 | 721,504 | |||||||||
Less: accumulated depreciation | 554,997 | 536,408 | |||||||||
| | | | | | | | ||||
Total property, plant, and equipment, net | $ | 205,195 | $ | 185,096 | |||||||
| | | | | | | | ||||
Schedule of changes in accrued warranties | |||||||||||
| | | | | | | | ||||
Fiscal years ended October 31 | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Beginning balance | $ | 72,177 | $ | 69,848 | |||||||
Warranty provisions | 41,608 | 41,067 | |||||||||
Warranty claims | (38,568 | ) | (35,529 | ) | |||||||
Changes in estimates | (4,137 | ) | (3,209 | ) | |||||||
| | | | | | | | ||||
Ending balance | $ | 71,080 | $ | 72,177 | |||||||
| | | | | | | | ||||
Reconciliations of basic and diluted weighted-average shares of common stock outstanding | |||||||||||
BASIC | |||||||||||
| | | | | | | | | | | |
(Shares in thousands) | 2014 | 2013 | 2012 | ||||||||
Fiscal years ended October 31 | |||||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock | 56,346 | 57,898 | 59,440 | ||||||||
Assumed issuance of contingent shares | 13 | 24 | 6 | ||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock and assumed issuance of contingent shares | 56,359 | 57,922 | 59,446 | ||||||||
| | | | | | | | | | | |
DILUTED | |||||||||||
| | | | | | | | | | | |
(Shares in thousands) | 2014 | 2013 | 2012 | ||||||||
Fiscal years ended October 31 | |||||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock and assumed issuance of contingent shares | 56,359 | 57,922 | 59,446 | ||||||||
Effect of dilutive securities | 1,269 | 1,183 | 1,172 | ||||||||
| | | | | | | | | | | |
Weighted-average number of shares of common stock, assumed issuance of contingent and restricted shares, and effect of dilutive securities | 57,628 | 59,105 | 60,618 | ||||||||
| | | | | | | | | | | |
INVESTMENT_IN_JOINT_VENTURE_Ta
INVESTMENT IN JOINT VENTURE (Tables) | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
Investment in Joint Venture | |||||||||||
INVESTMENT IN JOINT VENTURE | |||||||||||
For the twelve months ended October 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Revenue | $ | 22,678 | $ | 22,418 | $ | 19,765 | |||||
Net income | 16,139 | 15,776 | 13,326 | ||||||||
| | | | | | | | | | | |
As of October 31 | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Finance receivables, net | $ | 290,927 | $ | 260,319 | |||||||
Other assets | 3,659 | 4,040 | |||||||||
Total liabilities | 261,527 | 234,804 | |||||||||
| | | | | | | | ||||
OTHER_INCOME_NET_Tables
OTHER INCOME, NET (Tables) | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
OTHER INCOME, NET | |||||||||||
Schedule of other income (expense) | |||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Interest income | $ | 465 | $ | 447 | $ | 786 | |||||
Retail financing revenue | 1,077 | 1,093 | 1,106 | ||||||||
Foreign currency exchange rate loss | (1,006 | ) | (702 | ) | (1,786 | ) | |||||
Income from affiliates | 7,262 | 7,097 | 5,996 | ||||||||
Litigation recovery (settlements), net | 127 | 3,071 | (36 | ) | |||||||
Miscellaneous | 789 | 1,255 | 1,489 | ||||||||
| | | | | | | | | | | |
Total other income, net | $ | 8,714 | $ | 12,261 | $ | 7,555 | |||||
| | | | | | | | | | | |
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | ||||||||||||||
Goodwill. | ||||||||||||||
Changes in the net carrying amount of goodwill | ||||||||||||||
Professional | Residential | Total | ||||||||||||
Segment | Segment | |||||||||||||
| | | | | | | | | | | ||||
Balance as of October 31, 2012 | $ | 80,984 | $ | 11,016 | $ | 92,000 | ||||||||
Translation adjustments | (22 | ) | (64 | ) | (86 | ) | ||||||||
| | | | | | | | | | | ||||
Balance as of October 31, 2013 | $ | 80,962 | $ | 10,952 | $ | 91,914 | ||||||||
Translation adjustments | (16 | ) | (47 | ) | (63 | ) | ||||||||
| | | | | | | | | | | ||||
Balance as of October 31, 2014 | $ | 80,946 | $ | 10,905 | $ | 91,851 | ||||||||
| | | | | | | | | | | ||||
Components of other amortizable intangible assets | ||||||||||||||
October 31, 2014 | Estimated | Gross | Accumulated | Net | ||||||||||
Life | Carrying | Amortization | ||||||||||||
(Years) | Amount | |||||||||||||
| | | | | | | | | | | | | | |
Patents | 1.5 - 13 | $ | 10,711 | $ | (8,942 | ) | $ | 1,769 | ||||||
Non-compete agreements | 1.5 - 10 | 7,039 | (5,315 | ) | 1,724 | |||||||||
Customer-related | 1.5 - 13 | 8,650 | (5,517 | ) | 3,133 | |||||||||
Developed technology | 1.5 - 10 | 28,841 | (16,869 | ) | 11,972 | |||||||||
Trade names | 1.5 - 5 | 1,515 | (1,165 | ) | 350 | |||||||||
Other | 800 | (800 | ) | – | ||||||||||
| | | | | | | | | | | | | | |
Total amortizable | 57,556 | (38,608 | ) | 18,948 | ||||||||||
| | | | | | | | | | | | | | |
Non-amortizable – trade names | 4,881 | – | 4,881 | |||||||||||
| | | | | | | | | | | | | | |
Total other intangible assets, net | $ | 62,437 | $ | (38,608 | ) | $ | 23,829 | |||||||
| | | | | | | | | | | | | | |
October 31, 2013 | Estimated | Gross | Accumulated | Net | ||||||||||
Life | Carrying | Amortization | ||||||||||||
(Years) | Amount | |||||||||||||
| | | | | | | | | | | | | | |
Patents | 1.5 - 13 | $ | 10,213 | $ | (8,537 | ) | $ | 1,676 | ||||||
Non-compete agreements | 1.5 - 10 | 6,849 | (4,488 | ) | 2,361 | |||||||||
Customer-related | 1.5 - 13 | 8,654 | (4,660 | ) | 3,994 | |||||||||
Developed technology | 1.5 - 10 | 28,224 | (13,478 | ) | 14,746 | |||||||||
Trade names | 1.5 - 5 | 1,515 | (865 | ) | 650 | |||||||||
Other | 800 | (800 | ) | – | ||||||||||
| | | | | | | | | | | | | | |
Total amortizable | 56,255 | (32,828 | ) | 23,427 | ||||||||||
| | | | | | | | | | | | | | |
Non-amortizable – trade names | 4,881 | – | 4,881 | |||||||||||
| | | | | | | | | | | | | | |
Total other intangible assets, net | $ | 61,136 | $ | (32,828 | ) | $ | 28,308 | |||||||
| | | | | | | | | | | | | | |
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 12 Months Ended | |||||||
Oct. 31, 2014 | ||||||||
LONG-TERM DEBT. | ||||||||
Schedule of long-term debt | ||||||||
2014 | 2013 | |||||||
| | | | | | | | |
Term loan, due October 25, 2019 | $ | 130,000 | $ | – | ||||
7.800% Debentures, due June 15, 2027 | 100,000 | 100,000 | ||||||
6.625% Senior Notes, due May 1, 2037 | 123,606 | 123,544 | ||||||
Other | 350 | – | ||||||
| | | | | | | | |
Total long-term debt | 353,956 | 223,544 | ||||||
Less current portion | 6,640 | – | ||||||
| | | | | | | | |
Long-term debt, less current portion | $ | 347,316 | $ | 223,544 | ||||
| | | | | | | | |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | ||||||||||||||
Stockholders' Equity | ||||||||||||||
Schedule of components of accumulated other comprehensive loss ("AOCL"), net of tax, within the consolidated statements of stockholders' equity | ||||||||||||||
As of October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Foreign currency translation adjustments | $ | 12,536 | $ | 7,778 | $ | 5,436 | ||||||||
Pension and postretirement benefits | 5,266 | 3,683 | 4,328 | |||||||||||
Derivative instruments | (2,097 | ) | 1,109 | 210 | ||||||||||
| | | | | | | | | | | ||||
Total accumulated other comprehensive loss | $ | 15,705 | $ | 12,570 | $ | 9,974 | ||||||||
| | | | | | | | | | | ||||
Schedule of components and activity of accumulated other comprehensive loss | ||||||||||||||
Foreign | Pension | Cash Flow | Total | |||||||||||
Currency | and Post- | Derivative | ||||||||||||
Translation | retirement | Instruments | ||||||||||||
Adjustments | Benefits | |||||||||||||
| | | | | | | | | | | | | | |
AOCL as of October 31, 2012 | $ | 5,436 | $ | 4,328 | $ | 210 | $ | 9,974 | ||||||
Other comprehensive loss before reclassifications | 2,342 | – | 1,870 | 4,212 | ||||||||||
Amounts reclassified from AOCL | – | (645 | ) | (971 | ) | (1,616 | ) | |||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive loss (income) | $ | 2,342 | $ | (645 | ) | $ | 899 | $ | 2,596 | |||||
| | | | | | | | | | | | | | |
AOCL as of October 31, 2013 | $ | 7,778 | $ | 3,683 | $ | 1,109 | $ | 12,570 | ||||||
| | | | | | | | | | | | | | |
Other comprehensive loss before reclassifications | $ | 4,758 | $ | – | $ | (1,644 | ) | $ | 3,114 | |||||
Amounts reclassified from AOCL | – | 1,583 | (1,562 | ) | 21 | |||||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive loss (income) | $ | 4,758 | $ | 1,583 | $ | (3,206 | ) | $ | 3,135 | |||||
| | | | | | | | | | | | | | |
AOCL as of October 31, 2014 | $ | 12,536 | $ | 5,266 | $ | (2,097 | ) | $ | 15,705 | |||||
| | | | | | | | | | | | | | |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
INCOME TAXES | |||||||||||
Schedule of reconciliation of the statutory federal income tax rate to the company's consolidated effective tax rate | |||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Statutory federal income tax rate | 35 | % | 35 | % | 35 | % | |||||
Increase (reduction) in income taxes resulting from: | |||||||||||
Domestic manufacturer's deduction | (1.9 | ) | (2.0 | ) | (2.0 | ) | |||||
State and local income taxes, net of federal income tax benefit | 1.5 | 1.5 | 1.5 | ||||||||
Effect of foreign source income | (1.2 | ) | (0.3 | ) | 0.2 | ||||||
Domestic research tax credit | (0.2 | ) | (2.4 | ) | (0.2 | ) | |||||
Other, net | (1.0 | ) | (0.1 | ) | (0.5 | ) | |||||
| | | | | | | | | | | |
Consolidated effective tax rate | 32.2 | % | 31.7 | % | 34 | % | |||||
| | | | | | | | | | | |
Schedule of components of the provision for income taxes | |||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Provision for income taxes: | |||||||||||
Current – | |||||||||||
Federal | $ | 75,815 | $ | 61,388 | $ | 59,405 | |||||
State | 5,997 | 5,108 | 4,609 | ||||||||
Non-U.S. | 3,672 | 5,734 | 3,854 | ||||||||
| | | | | | | | | | | |
Current provision | $ | 85,484 | $ | 72,230 | $ | 67,868 | |||||
| | | | | | | | | | | |
Deferred – | |||||||||||
Federal | $ | (3,047 | ) | $ | 824 | $ | (685 | ) | |||
State | (81 | ) | 91 | (132 | ) | ||||||
Non-U.S. | 219 | (1,277 | ) | (330 | ) | ||||||
| | | | | | | | | | | |
Deferred benefit | (2,909 | ) | (362 | ) | (1,147 | ) | |||||
| | | | | | | | | | | |
Total provision for income taxes | $ | 82,575 | $ | 71,868 | $ | 66,721 | |||||
| | | | | | | | | | | |
Schedule of earnings before income taxes | |||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | ||||||||
| | | | | | | | | | | |
Earnings before income taxes: | |||||||||||
U.S. | $ | 239,501 | $ | 213,509 | $ | 189,206 | |||||
Non-U.S. | 16,944 | 13,204 | 7,056 | ||||||||
| | | | | | | | | | | |
Total | $ | 256,445 | $ | 226,713 | $ | 196,262 | |||||
| | | | | | | | | | | |
Schedule of tax effects of temporary differences that give rise to the net deferred income tax assets | |||||||||||
October 31 | 2014 | 2013 | |||||||||
| | | | | | | | ||||
Deferred tax assets (liabilities): | |||||||||||
Allowance for doubtful accounts | $ | 858 | $ | 1,635 | |||||||
Inventory items | 3,918 | 3,969 | |||||||||
Compensation and other accruals | 40,932 | 38,168 | |||||||||
Employee benefits | 20,374 | 18,315 | |||||||||
Depreciation | 3,093 | (2,467 | ) | ||||||||
Other | 3,734 | 5,550 | |||||||||
| | | | | | | | ||||
Deferred tax assets | $ | 72,909 | $ | 65,170 | |||||||
Valuation allowance | (4,012 | ) | (5,572 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | $ | 68,897 | $ | 59,598 | |||||||
| | | | | | | | ||||
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | |||||||||||
Balance as of October 31, 2013 | $ | 4,506 | |||||||||
Decrease as a result of tax positions taken during a prior period | (164 | ) | |||||||||
Increase as a result of tax positions taken during the current period | 726 | ||||||||||
Decrease relating to settlements with taxing authorities | (26 | ) | |||||||||
| | | | | |||||||
Balance as of October 31, 2014 | $ | 5,042 | |||||||||
| | | | | |||||||
STOCKBASED_COMPENSATION_PLANS_
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Schedule of compensation costs related to stock-based awards | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Stock option awards | $ | 5,142 | $ | 4,710 | $ | 4,200 | ||||||||
Restricted stock and restricted stock units | 1,653 | 1,694 | 1,721 | |||||||||||
Performance share awards | 4,496 | 3,833 | 3,582 | |||||||||||
| | | | | | | | | | | ||||
Total compensation cost for stock-based awards | $ | 11,291 | $ | 10,237 | $ | 9,503 | ||||||||
| | | | | | | | | | | ||||
Tax benefit realized for tax deductions from stock-based awards | $ | 12,988 | $ | 10,614 | $ | 13,266 | ||||||||
| | | | | | | | | | | ||||
Schedule of stock options activity | ||||||||||||||
Stock | Weighted- | Weighted- | Intrinsic | |||||||||||
Option | Average | Average | Value | |||||||||||
Awards | Exercise | Contractual | ||||||||||||
Price | Life(years) | |||||||||||||
| | | | | | | | | | | | | | |
Outstanding as of October 31, 2013 | 3,069,778 | $ | 25.55 | 5.9 | $ | 102,493 | ||||||||
Granted | 288,832 | 59.45 | — | — | ||||||||||
Exercised | (302,266 | ) | 22.19 | — | — | |||||||||
Cancelled | (6,692 | ) | 59.5 | — | — | |||||||||
| | | | | | | | | | | | | | |
Outstanding as of October 31, 2014 | 3,049,652 | $ | 29.04 | 5.4 | $ | 99,713 | ||||||||
| | | | | | | | | | | | | | |
Exercisable as of October 31, 2014 | 2,338,853 | $ | 23.98 | 4.6 | $ | 88,289 | ||||||||
| | | | | | | | | | | | | | |
Schedule of total market value and the intrinsic value of options exercised | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Market value of stock options exercised | $ | 19,017 | $ | 23,160 | $ | 35,901 | ||||||||
Intrinsic value of options exercised | 12,311 | 13,875 | 16,061 | |||||||||||
| | | | | | | | | | | ||||
Schedule of valuation assumptions of stock-based compensation | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | ||||||||
Expected life of option in years | 6 | 6 | 6 | |||||||||||
Expected volatility | 34.28% – 34.42% | 35.18% – 35.19% | 34.87% – 35.02% | |||||||||||
Weighted-average volatility | 34.29% | 35.19% | 35.01% | |||||||||||
Risk-free interest rate | 1.92% | 0.88% | 1.20% | |||||||||||
Expected dividend yield | 1.25% – 1.27% | 1.04% – 1.07% | 1.31% – 1.40% | |||||||||||
Weighted-average dividend yield | 1.25% | 1.07% | 1.32% | |||||||||||
| | | | | | | ||||||||
Weighted-average fair value at date of grant | $18.69 | $13.03 | $8.56 | |||||||||||
| | | | | | | ||||||||
Schedule of restricted stock and restricted stock unit awards granted | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Weighted-average fair value at date of grant | $ | 63.05 | $ | 46.10 | $ | 33.61 | ||||||||
Fair value of restricted stock and restricted stock units vested | 1,890 | 1,207 | 967 | |||||||||||
| | | | | | | | | | | ||||
Schedule of unvested restricted stock shares and the weighted average fair value at the date of grant | ||||||||||||||
Restricted | Weighted- | |||||||||||||
Stock and | Average Fair | |||||||||||||
Units | Value at Date | |||||||||||||
of Grant | ||||||||||||||
| | | | | | | | |||||||
Unvested as of October 31, 2013 | 109,288 | $ | 36.32 | |||||||||||
Granted | 29,975 | 63.05 | ||||||||||||
Vested | (58,047 | ) | 32.43 | |||||||||||
Forfeited | (2,687 | ) | 41.93 | |||||||||||
| | | | | | | | |||||||
Unvested as of October 31, 2014 | 78,529 | $ | 49.22 | |||||||||||
| | | | | | | | |||||||
Schedule of performance share awards granted | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Weighted-average fair value at date of grant | $ | 59.31 | $ | 42.06 | $ | 28.24 | ||||||||
Fair value of performance share awards vested | 7,926 | 9,057 | 1,828 | |||||||||||
| | | | | | | | | | | ||||
Schedule of unvested performance share awards and the weighted average fair value at the date of grant | ||||||||||||||
Performance | Weighted- | |||||||||||||
Shares | Average Fair | |||||||||||||
Value at Date | ||||||||||||||
of Grant | ||||||||||||||
| | | | | | | | |||||||
Unvested as of October 31, 2013 | 520,800 | $ | 33.41 | |||||||||||
Granted | 121,600 | 60.19 | ||||||||||||
Vested | (133,640 | ) | 31.76 | |||||||||||
Cancelled | (31,960 | ) | 31.76 | |||||||||||
| | | | | | | | |||||||
Unvested as of October 31, 2014 | 476,800 | $ | 40.82 | |||||||||||
| | | | | | | | |||||||
EMPLOYEE_RETIREMENT_PLANS_Tabl
EMPLOYEE RETIREMENT PLANS (Tables) | 12 Months Ended | ||||||||||
Oct. 31, 2014 | |||||||||||
EMPLOYEE RETIREMENT PLANS | |||||||||||
Schedule of amounts recognized in accumulated other comprehensive loss | |||||||||||
Fiscal years ended October 31 | Defined Benefit | Postretirement | Total | ||||||||
Pension Plans | Benefit Plan | ||||||||||
| | | | | | | | | | | |
2014 | |||||||||||
Net actuarial loss | $ | 4,521 | $ | 513 | $ | 5,034 | |||||
Net prior service cost (credit) | 257 | (25 | ) | 232 | |||||||
| | | | | | | | | | | |
Accumulated other comprehensive loss | $ | 4,778 | $ | 488 | $ | 5,266 | |||||
| | | | | | | | | | | |
2013 | |||||||||||
Net actuarial loss | $ | 2,915 | $ | 611 | $ | 3,526 | |||||
Net prior service cost (credit) | 289 | (132 | ) | 157 | |||||||
| | | | | | | | | | | |
Accumulated other comprehensive loss | $ | 3,204 | $ | 479 | $ | 3,683 | |||||
| | | | | | | | | | | |
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 | |||||||||||
Defined Benefit | Postretirement | Total | |||||||||
Pension Plans | Benefit Plan | ||||||||||
| | | | | | | | | | | |
Net actuarial loss | $ | 570 | $ | 2 | $ | 572 | |||||
Net prior service cost (credit) | 51 | (41 | ) | 10 | |||||||
| | | | | | | | | | | |
Total | $ | 621 | $ | (39 | ) | $ | 582 | ||||
| | | | | | | | | | | |
Schedule of amounts recognized in net periodic benefit cost and other comprehensive income | |||||||||||
Fiscal years ended October 31 | Defined Benefit | Postretirement | Total | ||||||||
Pension Plans | Benefit Plan | ||||||||||
| | | | | | | | | | | |
2014 | |||||||||||
Net actuarial gain | $ | 88 | $ | (89 | ) | $ | (1 | ) | |||
Amortization of unrecognized prior service (credit) cost | (32 | ) | 106 | 74 | |||||||
Amortization of unrecognized actuarial loss (gain) | 1,519 | (9 | ) | 1,510 | |||||||
| | | | | | | | | | | |
Total recognized in other comprehensive loss | $ | 1,575 | $ | 8 | $ | 1,583 | |||||
| | | | | | | | | | | |
Total recognized in net periodic benefit cost and other comprehensive loss | $ | 2,110 | $ | 565 | $ | 2,675 | |||||
| | | | | | | | | | | |
2013 | |||||||||||
Net actuarial gain | $ | (1,170 | ) | $ | (283 | ) | $ | (1,453 | ) | ||
Amortization of unrecognized prior service (credit) cost | (34 | ) | 106 | 72 | |||||||
Amortization of unrecognized actuarial loss (gain) | 768 | (32 | ) | 736 | |||||||
| | | | | | | | | | | |
Total recognized in other comprehensive loss (income) | $ | (436 | ) | $ | (209 | ) | $ | (645 | ) | ||
| | | | | | | | | | | |
Total recognized in net periodic benefit cost and other comprehensive loss | $ | 117 | $ | 387 | $ | 504 | |||||
| | | | | | | | | | | |
SEGMENT_DATA_Tables
SEGMENT DATA (Tables) | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | ||||||||||||||
Segment Data | ||||||||||||||
Summarized financial information concerning the company's reportable segments | ||||||||||||||
Fiscal years ended October 31 | Professional | Residential | Other | Total | ||||||||||
| | | | | | | | | | | | | | |
2014 | ||||||||||||||
Net sales | $ | 1,477,578 | $ | 672,443 | $ | 22,670 | $ | 2,172,691 | ||||||
Intersegment gross sales | 41,376 | 424 | (41,800 | ) | – | |||||||||
Earnings (loss) before income taxes | 276,305 | 76,916 | (96,776 | ) | 256,445 | |||||||||
Total assets | 573,086 | 172,984 | 446,345 | 1,192,415 | ||||||||||
Capital expenditures | 25,226 | 12,417 | 33,495 | 71,138 | ||||||||||
Depreciation and amortization | 34,228 | 8,883 | 10,027 | 53,138 | ||||||||||
| | | | | | | | | | | | | | |
2013 | ||||||||||||||
Net sales | $ | 1,425,259 | $ | 594,411 | $ | 21,761 | $ | 2,041,431 | ||||||
Intersegment gross sales | 40,416 | 402 | (40,818 | ) | – | |||||||||
Earnings (loss) before income taxes | 254,424 | 62,033 | (89,744 | ) | 226,713 | |||||||||
Total assets | 528,926 | 167,918 | 305,904 | 1,002,748 | ||||||||||
Capital expenditures | 32,362 | 7,838 | 9,227 | 49,427 | ||||||||||
Depreciation and amortization | 34,706 | 10,321 | 9,107 | 54,134 | ||||||||||
| | | | | | | | | | | | | | |
2012 | ||||||||||||||
Net sales | $ | 1,329,504 | $ | 607,435 | $ | 21,751 | $ | 1,958,690 | ||||||
Intersegment gross sales | 37,324 | 26 | (37,350 | ) | – | |||||||||
Earnings (loss) before income taxes | 232,104 | 57,889 | (93,731 | ) | 196,262 | |||||||||
Total assets | 527,159 | 169,899 | 238,141 | 935,199 | ||||||||||
Capital expenditures | 29,313 | 4,164 | 9,765 | 43,242 | ||||||||||
Depreciation and amortization | 34,876 | 10,919 | 7,839 | 53,634 | ||||||||||
| | | | | | | | | | | | | | |
Summary of the components of the loss before income taxes included in "Other" | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Corporate expenses | $ | (88,539 | ) | $ | (85,359 | ) | $ | (81,376 | ) | |||||
Interest expense | (15,426 | ) | (16,210 | ) | (16,906 | ) | ||||||||
Other income | 7,189 | 11,825 | 4,551 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | (96,776 | ) | $ | (89,744 | ) | $ | (93,731 | ) | |||||
| | | | | | | | | | | ||||
Schedule of net sales for groups of similar products and services | ||||||||||||||
Fiscal years ended October 31 | 2014 | 2013 | 2012 | |||||||||||
| | | | | | | | | | | ||||
Equipment | $ | 1,765,845 | $ | 1,649,489 | $ | 1,586,864 | ||||||||
Irrigation and lighting | 406,846 | 391,942 | 371,826 | |||||||||||
| | | | | | | | | | | ||||
Total | $ | 2,172,691 | $ | 2,041,431 | $ | 1,958,690 | ||||||||
| | | | | | | | | | | ||||
Schedule of geographic area data | ||||||||||||||
| | | | | | | | | | | ||||
Fiscal years ended October 31 | United States | Foreign Countries | Total | |||||||||||
| | | | | | | | | | | ||||
2014 | ||||||||||||||
Net sales | $ | 1,550,077 | $ | 622,614 | $ | 2,172,691 | ||||||||
Long-lived assets | 169,797 | 35,398 | 205,195 | |||||||||||
| | | | | | | | | | | ||||
2013 | ||||||||||||||
Net sales | $ | 1,426,060 | $ | 615,371 | $ | 2,041,431 | ||||||||
Long-lived assets | 143,547 | 41,549 | 185,096 | |||||||||||
| | | | | | | | | | | ||||
2012 | ||||||||||||||
Net sales | $ | 1,364,377 | $ | 594,313 | $ | 1,958,690 | ||||||||
Long-lived assets | 137,708 | 42,815 | 180,523 | |||||||||||
| | | | | | | | | | | ||||
FINANCIAL_INSTRUMENTS_Tables
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended | |||||||||||||||||||||||
Oct. 31, 2014 | ||||||||||||||||||||||||
FINANCIAL INSTRUMENTS | ||||||||||||||||||||||||
Fair value of the company's derivatives and consolidated balance sheet location | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
October 31, 2014 | October 31, 2013 | October 31, 2014 | October 31, 2013 | |||||||||||||||||||||
Balance | Fair | Balance | Fair | Balance | Fair | Balance | Fair | |||||||||||||||||
Sheet | Value | Sheet | Value | Sheet | Value | Sheet | Value | |||||||||||||||||
Location | Location | Location | Location | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |||
Derivatives Designated as Hedging Instruments | ||||||||||||||||||||||||
Forward currency contracts | Prepaid expenses | 4,626 | Prepaid expenses | 558 | Accrued liabilities | 9 | Accrued liabilities | 1,381 | ||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||
Cross currency contract | Prepaid expenses | 831 | Prepaid expenses | Accrued liabilities | Accrued liabilities | 326 | ||||||||||||||||||
– | – | |||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||||||||||||||
Forward currency contracts | Prepaid expenses | 1,404 | Prepaid expenses | 708 | Accrued liabilities | Accrued liabilities | 550 | |||||||||||||||||
$ | $ | $ | – | $ | ||||||||||||||||||||
Cross currency contract | Prepaid expenses | Prepaid expenses | Accrued liabilities | 536 | Accrued liabilities | 117 | ||||||||||||||||||
– | – | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |||
Total Derivatives | 6,861 | 1,266 | 545 | 2,374 | ||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |||
Impact of derivative instruments on the consolidated statements of earnings for the company's derivatives designated as cash flow hedging instruments | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Gain (Loss) | Location of Gain (Loss) Reclassified | Gain (Loss) Reclassified | Location of Gain (Loss) Recognized in | Gain (Loss) Recognized | ||||||||||||||||||||
Recognized in OCI on | from AOCL into Income | from AOCL into Income | Income on Derivatives (Ineffective | in Income on Derivatives | ||||||||||||||||||||
Derivatives, net of tax | (Effective Portion) | (Effective Portion) | Portion and excluded from | (Ineffective Portion and | ||||||||||||||||||||
(Effective Portion) | Effectiveness Testing) | Excluded from | ||||||||||||||||||||||
Effectiveness Testing) | ||||||||||||||||||||||||
Fiscal years ended | October 31, | October 31, | October 31, | October 31, | October 31, | October 31, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Forward currency contracts | $ | 4,150 | $ | 7 | Net sales | $ | (1,128 | ) | $ | (805 | ) | Other income, net | $ | 120 | $ | 648 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Forward currency contracts | (712 | ) | (231 | ) | Cost of sales | 103 | 473 | |||||||||||||||||
Cross currency contracts | (238 | ) | (680 | ) | Other income, net | (537 | ) | (639 | ) | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 3,200 | $ | (904 | ) | Total | $ | (1,562 | ) | $ | (971 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
Impact of derivative instruments on the consolidated statements of earnings for the company's derivatives not designated as hedging instruments | ||||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||
Gain (Loss) Recognized | ||||||||||||||||||||||||
in Net Earnings | ||||||||||||||||||||||||
Fiscal Year Ended | ||||||||||||||||||||||||
Location of Gain (Loss) | October 31, | October 31, | ||||||||||||||||||||||
Recognized in Net Earnings | 2014 | 2013 | ||||||||||||||||||||||
| | | | | | | | | | |||||||||||||||
Forward currency contracts | Other income, net | $ | 3,555 | $ | (1,402 | ) | ||||||||||||||||||
Cross currency contracts | Other income, net | 951 | (483 | ) | ||||||||||||||||||||
| | | | | | | | | | |||||||||||||||
Total | $ | 4,506 | $ | (1,885 | ) | |||||||||||||||||||
| | | | | | | | | | |||||||||||||||
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 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Assets | Liabilities | |||||||||||||||||||||||
October 31, 2014 | Gross Amounts | Gross Liabilities | Net Amount of | Gross Amounts | Gross Assets | Net Amount of | ||||||||||||||||||
of Recognized | Offset in the | Assets Presented | of Recognized | offset in the | Liabilities Presented | |||||||||||||||||||
Assets | Balance Sheet | in the Balance Sheet | Liabilities | Balance Sheet | in the Balance Sheet | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Forward currency contracts | $ | 6,265 | $ | (235 | ) | $ | 6,030 | $ | (9 | ) | – | $ | (9 | ) | ||||||||||
Cross currency contracts | 831 | – | 831 | (536 | ) | – | (536 | ) | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Total | $ | 7,096 | $ | (235 | ) | $ | 6,861 | $ | (545 | ) | – | $ | (545 | ) | ||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
| | | | | | | | | | | | | | | | | | | | |||||
Assets | Liabilities | |||||||||||||||||||||||
October 31, 2013 | Gross Amounts | Gross Liabilities | Net Amount of | Gross Amounts | Gross Assets | Net Amount of | ||||||||||||||||||
of Recognized | Offset in the | Assets Presented | of Recognized | offset in the | Liabilities Presented | |||||||||||||||||||
Assets | Balance Sheet | in the Balance Sheet | Liabilities | Balance Sheet | in the Balance Sheet | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Forward currency contracts | $ | 1,266 | – | $ | 1,266 | $ | (1,968 | ) | $ | 37 | $ | (1,931 | ) | |||||||||||
Cross currency contracts | – | – | – | (443 | ) | – | (443 | ) | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Total | $ | 1,266 | – | $ | 1,266 | $ | (2,411 | ) | $ | 37 | $ | (2,374 | ) | |||||||||||
| | | | | | | | | | | | | | | | | | | | |||||
Assets and liabilities measured at fair value on a recurring basis | ||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
October 31, 2014 | Fair | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Value | ||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 314,873 | $ | 314,873 | $ | – | – | |||||||||||||||||
Forward currency contracts | 6,030 | – | 6,030 | – | ||||||||||||||||||||
Cross currency contracts | 831 | – | 831 | – | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Total assets | $ | 321,734 | $ | 314,873 | $ | 6,861 | – | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Forward currency contracts | $ | 9 | – | $ | 9 | – | ||||||||||||||||||
Cross currency contracts | 536 | – | 536 | – | ||||||||||||||||||||
Deferred compensation liabilities | 2,141 | – | 2,141 | – | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Total liabilities | $ | 2,686 | – | $ | 2,686 | – | ||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
| | | | | | | | | | | | | | |||||||||||
October 31, 2013 | Fair | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Value | ||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 182,993 | $ | 182,993 | $ | – | – | |||||||||||||||||
Forward currency contracts | 1,266 | – | 1,266 | – | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Total assets | $ | 184,259 | $ | 182,993 | $ | 1,266 | – | |||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Forward currency contracts | $ | 1,931 | – | $ | 1,931 | – | ||||||||||||||||||
Cross currency contracts | 443 | – | 443 | – | ||||||||||||||||||||
Deferred compensation liabilities | 2,777 | – | 2,777 | – | ||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
Total liabilities | $ | 5,151 | – | $ | 5,151 | – | ||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||
QUARTERLY_FINANCIAL_DATA_Table
QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | ||||||||||||||
QUARTERLY FINANCIAL DATA (unaudited) | ||||||||||||||
Summary of quarterly financial data | ||||||||||||||
| | | | | | | | | | | | | | |
Fiscal year ended | First | Second | Third | Fourth | ||||||||||
October 31, 2014 | ||||||||||||||
Quarter | ||||||||||||||
| | | | | | | | | | | | | | |
Net sales | $ | 445,981 | $ | 745,030 | $ | 567,540 | $ | 414,140 | ||||||
Gross profit | 163,514 | 264,540 | 202,080 | 143,137 | ||||||||||
Net earnings | 25,869 | 87,086 | 50,013 | 10,902 | ||||||||||
Basic net earnings per share1 | 0.45 | 1.54 | 0.89 | 0.19 | ||||||||||
Diluted net earnings per share1 | 0.44 | 1.51 | 0.87 | 0.19 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fiscal year ended | First | Second | Third | Fourth | ||||||||||
October 31, 2013 | ||||||||||||||
Quarter | ||||||||||||||
| | | | | | | | | | | | | | |
Net sales | $ | 444,661 | $ | 704,486 | $ | 509,918 | $ | 382,366 | ||||||
Gross profit | 165,817 | 252,301 | 178,031 | 128,648 | ||||||||||
Net earnings | 31,396 | 78,402 | 40,097 | 4,950 | ||||||||||
Basic net earnings per share1 | 0.54 | 1.35 | 0.70 | 0.09 | ||||||||||
Diluted net earnings per share1 | 0.53 | 1.32 | 0.68 | 0.08 | ||||||||||
| | | | | | | | | | | | | | |
1 | Net earnings per share amounts do not sum to equal full year total due to changes in the number of shares outstanding during the periods and rounding. | |||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Cash and Cash Equivalents | |||
Restricted cash and short-term investments | $56,418 | ||
Inventory Valuations | |||
Percentage of total inventory valued under FIFO method | 28.00% | 33.00% | |
Effect of LIFO inventory layers reduction on cost of sales | 65 | 122 | 0 |
Inventories | |||
Raw materials and work in process | 95,144 | 87,668 | |
Finished goods and service parts | 246,954 | 217,796 | |
Total FIFO value | 342,098 | 305,464 | |
Less: adjustment to LIFO value | 67,495 | 65,375 | |
Total | $274,603 | $240,089 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Property and Depreciation | |||
Capitalized interest amount | $1,710 | $722 | $256 |
Subtotal | 760,192 | 721,504 | |
Less: accumulated depreciation | 554,997 | 536,408 | |
Property, plant, and equipment, net | 205,195 | 185,096 | 180,523 |
Depreciation expense | 47,136 | 48,207 | 46,840 |
Buildings including leasehold improvements | |||
Property and Depreciation | |||
Subtotal | 156,374 | 133,866 | |
Buildings including leasehold improvements | Minimum | |||
Property and Depreciation | |||
Estimated useful life | 10 years | ||
Buildings including leasehold improvements | Maximum | |||
Property and Depreciation | |||
Estimated useful life | 45 years | ||
Equipment | Minimum | |||
Property and Depreciation | |||
Estimated useful life | 2 years | ||
Equipment | Maximum | |||
Property and Depreciation | |||
Estimated useful life | 7 years | ||
Tooling costs | |||
Property and Depreciation | |||
Subtotal | 177,704 | 173,039 | |
Tooling costs | Minimum | |||
Property and Depreciation | |||
Estimated useful life | 3 years | ||
Tooling costs | Maximum | |||
Property and Depreciation | |||
Estimated useful life | 5 years | ||
Software and website development costs | Minimum | |||
Property and Depreciation | |||
Estimated useful life | 2 years | ||
Software and website development costs | Maximum | |||
Property and Depreciation | |||
Estimated useful life | 5 years | ||
Land and land improvements | |||
Property and Depreciation | |||
Subtotal | 32,731 | 27,632 | |
Machinery and equipment | |||
Property and Depreciation | |||
Subtotal | 305,131 | 284,492 | |
Computer hardware and software | |||
Property and Depreciation | |||
Subtotal | 77,395 | 73,302 | |
Construction in process | |||
Property and Depreciation | |||
Subtotal | $10,857 | $29,173 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
segment | |||
item | |||
Goodwill and Indefinite-Life Intangible Assets | |||
Number of operating segment | 8 | ||
Number of reporting units containing goodwill | 6 | ||
Impairment charges write down of indefinite-life intangible asset | $400 | ||
Other Long-Lived Assets | |||
Impairment of Long-Lived Assets Held-for-use | 386 | ||
Accelerated depreciation expense | 824 | 305 | |
Accounts Payable | |||
Minimum number of payment obligations to be financed | 1 | ||
Outstanding payment obligations placed on the accounts payable tracking system | 12,296 | 16,572 | |
Changes in accrued warranties | |||
Beginning balance | 72,177 | 69,848 | |
Warranty Provisions | 41,608 | 41,067 | |
Warranty Claims | -38,568 | -35,529 | |
Changes in estimates | -4,137 | -3,209 | |
Ending balance | 71,080 | 72,177 | 69,848 |
Revenue Recognition | |||
Consignment inventory amount | 22,080 | 18,283 | |
Cost of Financing Distributor/Dealer Inventory | |||
Number of fiscal years the entity has repurchased immaterial amounts of inventory under repurchase agreements | 3 years | ||
Financing costs for distributor and dealer inventories | 21,800 | 19,729 | 19,492 |
Advertising | |||
Advertising costs | $43,590 | $48,071 | $46,947 |
Basic | |||
Weighted-average number of shares of common stock | 56,346 | 57,898 | 59,440 |
Assumed issuance of contingent shares | 13 | 24 | 6 |
Weighted-average number of shares of common stock and assumed issuance of contingent shares | 56,359 | 57,922 | 59,446 |
Diluted | |||
Weighted-average number of shares of common stock and assumed issuance of contingent shares | 56,359 | 57,922 | 59,446 |
Effect of dilutive securities (in shares) | 1,269 | 1,183 | 1,172 |
Weighted-average number of shares of common stock, assumed issuance of contingent shares and effect of dilutive securities | 57,628 | 59,105 | 60,618 |
Options, restricted stock, and restricted stock units, excluded from the diluted earnings per share | 259,925 | 182,868 | 33,427 |
Minimum | |||
Finite-Lived Intangible Assets | |||
Estimated life | 1 year 6 months | ||
Maximum | |||
Finite-Lived Intangible Assets | |||
Estimated life | 13 years |
ACQUITIONS_Details
ACQUITIONS (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 14, 2014 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Acquisition | ||||
Term loan | $223,956 | $223,544 | ||
Short-term debt | 20,818 | |||
Fiscal 2015 Acquisitions | Subsequent Event | ||||
Acquisition | ||||
Purchase price | 227,882 | |||
Cash consideration | 197,882 | |||
Long-term loan | 30,000 | |||
Term loan | 130,000 | |||
Short-term debt | 20,000 | |||
Acquisition related costs | 509 | |||
Deferred Finance Costs, Noncurrent, Gross | 373 | |||
Fiscal 2014 Acquisitions | ||||
Acquisition | ||||
Purchase price | 1,245 | |||
Fiscal 2013 Acquisitions | ||||
Acquisition | ||||
Purchase price | 3,481 | |||
Cash consideration | 1,380 | 2,101 | ||
Fiscal 2012 Acquisitions | ||||
Acquisition | ||||
Purchase price | $11,112 |
INVESTMENT_IN_JOINT_VENTURE_De
INVESTMENT IN JOINT VENTURE (Details) (Red Iron Acceptance, LLC, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Red Iron Acceptance, LLC | |||
Schedule of Equity Method Investments | |||
Period of unlimited automatic extensions after the initial term of joint venture | 2 years | ||
Period of notice to be given by parties under the joint venture for not extending the initial term or any subsequent term of joint venture | 1 year | ||
Portion owned by Toro (as a percent) | 45.00% | ||
Portion owned by TCFIF (as a percent) | 55.00% | ||
Secured revolving credit facility | $450,000 | ||
Investment in joint venture | 14,890 | 13,300 | |
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 | ||
Maximum amount of recourse provided to joint venture for outstanding receivables | 470 | 465 | |
Net amount of new receivables financed for dealers and distributors | 1,280,505 | 1,211,470 | 1,191,343 |
Summarized financial information for Red Iron | |||
Revenue | 22,678 | 22,418 | 19,765 |
Net income | 16,139 | 15,776 | 13,326 |
Finance receivables, net | 290,927 | 260,319 | |
Other assets | 3,659 | 4,040 | |
Total liabilities | $261,527 | $234,804 |
OTHER_INCOME_NET_Details
OTHER INCOME, NET (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
OTHER INCOME, NET | |||
Interest income | $465 | $447 | $786 |
Retail financing revenue | 1,077 | 1,093 | 1,106 |
Foreign currency exchange rate loss | -1,006 | -702 | -1,786 |
Income from affiliates | 7,262 | 7,097 | 5,996 |
Litigation recovery (settlements), net | 127 | 3,071 | -36 |
Miscellaneous | 789 | 1,255 | 1,489 |
Total other income | $8,714 | $12,261 | $7,555 |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 |
Changes in Goodwill | ||
Goodwill at the beginning of the period | $91,914 | $92,000 |
Translation adjustments | -63 | -86 |
Goodwill at the end of the period | 91,851 | 91,914 |
Professional | ||
Changes in Goodwill | ||
Goodwill at the beginning of the period | 80,962 | 80,984 |
Translation adjustments | -16 | -22 |
Goodwill at the end of the period | 80,946 | 80,962 |
Residential | ||
Changes in Goodwill | ||
Goodwill at the beginning of the period | 10,952 | 11,016 |
Translation adjustments | -47 | -64 |
Goodwill at the end of the period | $10,905 | $10,952 |
GOODWILL_AND_OTHER_INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Other Intangible Assets | |||
Gross Carrying Amount | $57,556 | $56,255 | |
Accumulated Amortization | -38,608 | -32,828 | |
Net | 18,948 | 23,427 | |
Non-amortizable - trade names | 4,881 | 4,881 | |
Total other intangible assets, gross | 62,437 | 61,136 | |
Total other intangible assets, net | 23,829 | 28,308 | |
Change in gross carrying amount of other intangible assets | 1,301 | ||
Amortization of Intangible Assets | 6,002 | 5,769 | 6,008 |
Fiscal 2015 | 5,610 | ||
Fiscal 2016 | 5,091 | ||
Fiscal 2017 | 4,196 | ||
Fiscal 2017 | 2,168 | ||
Fiscal 2019 | 1,191 | ||
After fiscal 2019 | 692 | ||
Patents | |||
Other Intangible Assets | |||
Gross Carrying Amount | 10,711 | 10,213 | |
Accumulated Amortization | -8,942 | -8,537 | |
Net | 1,769 | 1,676 | |
Patents | Minimum | |||
Other Intangible Assets | |||
Estimated life | 1 year 6 months | 1 year 6 months | |
Patents | Maximum | |||
Other Intangible Assets | |||
Estimated life | 13 years | 13 years | |
Non-compete agreements | |||
Other Intangible Assets | |||
Gross Carrying Amount | 7,039 | 6,849 | |
Accumulated Amortization | -5,315 | -4,488 | |
Net | 1,724 | 2,361 | |
Non-compete agreements | Minimum | |||
Other Intangible Assets | |||
Estimated life | 1 year 6 months | 1 year 6 months | |
Non-compete agreements | Maximum | |||
Other Intangible Assets | |||
Estimated life | 10 years | 10 years | |
Customer-related | |||
Other Intangible Assets | |||
Gross Carrying Amount | 8,650 | 8,654 | |
Accumulated Amortization | -5,517 | -4,660 | |
Net | 3,133 | 3,994 | |
Customer-related | Minimum | |||
Other Intangible Assets | |||
Estimated life | 1 year 6 months | 1 year 6 months | |
Customer-related | Maximum | |||
Other Intangible Assets | |||
Estimated life | 13 years | 13 years | |
Developed technology | |||
Other Intangible Assets | |||
Gross Carrying Amount | 28,841 | 28,224 | |
Accumulated Amortization | -16,869 | -13,478 | |
Net | 11,972 | 14,746 | |
Developed technology | Minimum | |||
Other Intangible Assets | |||
Estimated life | 1 year 6 months | 1 year 6 months | |
Developed technology | Maximum | |||
Other Intangible Assets | |||
Estimated life | 10 years | 10 years | |
Trade names | |||
Other Intangible Assets | |||
Gross Carrying Amount | 1,515 | 1,515 | |
Accumulated Amortization | -1,165 | -865 | |
Net | 350 | 650 | |
Trade names | Minimum | |||
Other Intangible Assets | |||
Estimated life | 1 year 6 months | 1 year 6 months | |
Trade names | Maximum | |||
Other Intangible Assets | |||
Estimated life | 5 years | 5 years | |
Other | |||
Other Intangible Assets | |||
Gross Carrying Amount | 800 | 800 | |
Accumulated Amortization | ($800) | ($800) |
SHORTTERM_CAPITAL_RESOURCES_De
SHORT-TERM CAPITAL RESOURCES (Details) (USD $) | 12 Months Ended | 1 Months Ended | |
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 |
Short-term capital resources | |||
Outstanding short-term debt | $20,818 | $20,818 | |
Ratio of debt to EBITDA, maximum | 2.75 | 2.75 | |
Limit to cash dividends paid and stock repurchased (per fiscal year) if debt to EBITDA ratio exceeds 2.75 | 50,000 | 50,000 | |
Weighted-average interest rate | 1.95% | 1.95% | |
Unsecured senior five-year revolving credit facility | |||
Short-term capital resources | |||
Line of Credit Facility, Maximum Borrowing Capacity | 150,000 | 150,000 | |
Credit facility term (in years) | 5 years | ||
Increase in the credit agreement's borrowing capacity available under the approval of named borrowers | 100,000 | 100,000 | |
Description of variable base interest rate | LIBOR | ||
Ratio of debt to EBITDA, maximum | 3.25 | ||
Standby letters of credit | |||
Short-term capital resources | |||
Line of Credit Facility, Maximum Borrowing Capacity | 20,000 | 20,000 | |
Swingline loans | |||
Short-term capital resources | |||
Line of Credit Facility, Maximum Borrowing Capacity | 20,000 | 20,000 | |
Non-U.S.Operations | Non-U.S. operations, unsecured short-term lines of credit | |||
Short-term capital resources | |||
Line of Credit Facility, Maximum Borrowing Capacity | $13,257 | $13,257 |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Jun. 30, 1997 | Oct. 31, 2014 | Oct. 31, 2013 | Apr. 26, 2007 |
item | |||||
LONG-TERM DEBT | |||||
Total long-term debt | $353,956 | $353,956 | $223,544 | ||
Current portion of long-term debt | 6,640 | 6,640 | |||
Long-term debt, less current portion | 347,316 | 347,316 | 223,544 | ||
Other assets, excess termination fees over deferred income | 1,995 | 1,995 | |||
Principal payments on long-term debt in fiscal years | |||||
2015 | 6,640 | 6,640 | |||
2016 | 13,140 | 13,140 | |||
2017 | 13,070 | 13,070 | |||
2018 | 13,000 | 13,000 | |||
2019 | 84,500 | 84,500 | |||
After 2019 | 225,000 | 225,000 | |||
Term loan | |||||
LONG-TERM DEBT | |||||
Total long-term debt | 130,000 | 130,000 | |||
Debt Instrument, Description of Variable Rate Basis | LIBOR | ||||
7.800% Debentures, due June 15, 2027 | |||||
LONG-TERM DEBT | |||||
Total long-term debt | 100,000 | 100,000 | 100,000 | ||
Aggregate principal amount of notes issued | 175,000 | ||||
Interest rate percentage | 7.80% | 7.80% | |||
Amount paid to terminate forward-starting interest rate swap agreements | 23,688 | ||||
Number of terminated forward-starting interest rate swap agreements | 3 | ||||
Derivative, Notional Amount | 125,000 | ||||
Deferred income amount at the time of swap termination | 18,710 | ||||
6.625% Senior Notes, due May 1, 2037 | |||||
LONG-TERM DEBT | |||||
Total long-term debt | 123,606 | 123,606 | 123,544 | ||
Aggregate principal amount of notes issued | 125,000 | ||||
Interest rate percentage | 6.63% | 6.63% | 6.63% | ||
Percentage of par value at which debt was issued | 98.51% | ||||
Debt discount, unamortized | 1,859 | ||||
Total underwriting fee and direct debt issue costs | 1,524 | ||||
Effective interest rate (as a percent) | 6.74% | 6.74% | |||
Redemption value, basis points added to the treasury rate (as a percent) | 0.30% | ||||
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% | ||||
Other. | |||||
LONG-TERM DEBT | |||||
Total long-term debt | $350 | $350 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 12 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | Mar. 12, 2013 | Dec. 11, 2012 |
Stockholders' Equity | |||||
Common stock, par value (in dollars per share) | $1 | $1 | |||
Common stock, authorized shares before amendment to Restated Certificate of Incorporation | 100,000,000 | ||||
Common stock, authorized shares | 175,000,000 | 175,000,000 | 175,000,000 | ||
Stock repurchase program | |||||
Amount paid to repurchase the shares (in dollars) | $103,039 | $99,588 | $93,395 | ||
Repurchase of shares | 1,644,230 | 2,147,185 | 2,604,525 | ||
Treasury shares held | 22,386,021 | 21,275,717 | |||
Cost of treasury shares (in dollars) | 1,163,706 | 1,081,086 | |||
Stock repurchase program | |||||
Stock repurchase program | |||||
Number of shares authorized to be repurchased | 5,000,000 | ||||
Amount paid to repurchase the shares (in dollars) | $101,674 | $98,842 | $92,719 | ||
Repurchase of shares | 1,622,569 | 2,131,615 | 2,591,039 | ||
Number of shares remained authorized for repurchase | 2,720,493 |
STOCKHOLDERS_EQUITY_Details_2
STOCKHOLDERS' EQUITY (Details 2) (USD $) | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
In Thousands, unless otherwise specified | |||
Accumulated other comprehensive loss (AOCL) | |||
Foreign currency translation adjustments | $12,536 | $7,778 | $5,436 |
Pension and postretirement benefits | 5,266 | 3,683 | 4,328 |
Derivative instruments | -2,097 | 1,109 | 210 |
Total accumulated other comprehensive loss | $15,705 | $12,570 | $9,974 |
STOCKHOLDERS_EQUITY_Details_3
STOCKHOLDERS' EQUITY (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 |
Components and activity of accumulated other comprehensive loss | ||
Balance at the beginning of the period | $12,570 | $9,974 |
Other comprehensive loss before reclassifications | 3,114 | 4,212 |
Amounts reclassified from AOCL | 21 | -1,616 |
Net current period other comprehensive loss (income) | 3,135 | 2,596 |
Balance at the end of the period | 15,705 | 12,570 |
Foreign Currency Translation Adjustments | ||
Components and activity of accumulated other comprehensive loss | ||
Balance at the beginning of the period | 7,778 | 5,436 |
Other comprehensive loss before reclassifications | 4,758 | 2,342 |
Net current period other comprehensive loss (income) | 4,758 | 2,342 |
Balance at the end of the period | 12,536 | 7,778 |
Pension and Post-retirement Benefits | ||
Components and activity of accumulated other comprehensive loss | ||
Balance at the beginning of the period | 3,683 | 4,328 |
Amounts reclassified from AOCL | 1,583 | -645 |
Net current period other comprehensive loss (income) | 1,583 | -645 |
Balance at the end of the period | 5,266 | 3,683 |
Cash Flow Derivative Instruments | ||
Components and activity of accumulated other comprehensive loss | ||
Balance at the beginning of the period | 1,109 | 210 |
Other comprehensive loss before reclassifications | -1,644 | 1,870 |
Amounts reclassified from AOCL | -1,562 | -971 |
Net current period other comprehensive loss (income) | -3,206 | 899 |
Balance at the end of the period | ($2,097) | $1,109 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Reconciliation of the statutory federal income tax rate to consolidated effective tax rate | |||
Statutory federal income tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
Increase (reduction) in income taxes resulting from: | |||
Domestic manufacturer's deduction (as a percent) | -1.90% | -2.00% | -2.00% |
State and local income taxes, net of federal income tax benefit (as a percent) | 1.50% | 1.50% | 1.50% |
Effect of foreign source income (as a percent) | -1.20% | -0.30% | 0.20% |
Domestic research tax credit (as a percent) | -0.20% | -2.40% | -0.20% |
Other, net (as a percent) | -1.00% | -0.10% | -0.50% |
Consolidated effective tax rate (as a percent) | 32.20% | 31.70% | 34.00% |
Current | |||
Federal | $75,815 | $61,388 | $59,405 |
State | 5,997 | 5,108 | 4,609 |
Non-U.S. | 3,672 | 5,734 | 3,854 |
Current provision | 85,484 | 72,230 | 67,868 |
Deferred | |||
Federal | -3,047 | 824 | -685 |
State | -81 | 91 | -132 |
Non-U.S. | 219 | -1,277 | -330 |
Deferred benefit | -2,909 | -362 | -1,147 |
Total provision for income taxes | 82,575 | 71,868 | 66,721 |
Earnings before income taxes: | |||
U.S. | 239,501 | 213,509 | 189,206 |
Non-U.S. | 16,944 | 13,204 | 7,056 |
Earnings before income taxes | 256,445 | 226,713 | 196,262 |
Adjustment to stockholders' equity for tax benefits related to employee stock-based award transactions | 8,857 | 6,134 | 9,017 |
Deferred tax assets (liabilities): | |||
Allowance for doubtful accounts | 858 | 1,635 | |
Inventory items | 3,918 | 3,969 | |
Compensation and other accruals | 40,932 | 38,168 | |
Employee benefits | 20,374 | 18,315 | |
Depreciation | 3,093 | -2,467 | |
Other | 3,734 | 5,550 | |
Deferred tax assets | 72,909 | 65,170 | |
Valuation allowance | -4,012 | -5,572 | |
Net deferred tax assets | 68,897 | 59,598 | |
Accumulated undistributed earnings attributable to foreign subsidiaries considered to be indefinitely invested | 64,513 | ||
Deferred tax liability provided for undistributed earnings from subsidiaries outside the United States | 0 | ||
Reconciliation of unrecognized tax benefits | |||
Balance at the beginning of the period | 4,506 | ||
Decrease as a result of tax positions taken during a prior period | -164 | ||
Increase as a result of tax positions taken during the current period | 726 | ||
Decrease relating to settlements with taxing authorities | -26 | ||
Balance at the end of the period | 5,042 | 4,506 | |
Potential benefits that would affect the effective tax rate | 3,655 | ||
Accrued interest and penalties for unrecognized tax benefits | 134 | ||
Foreign Jurisdictions | |||
Net operating loss | |||
Net operating loss carryforwards in foreign jurisdictions | 23,786 | ||
Net operating loss carryforwards in foreign jurisdictions not subject to expiration | 10,740 | ||
Net operating loss carryforwards in foreign jurisdictions subject to expiration in fiscal years 2015 through 2018 | 0 | ||
Net operating loss carryforwards in foreign jurisdictions subject to expiration between fiscal years 2019 and 2022 | $13,046 |
STOCKBASED_COMPENSATION_PLANS_1
STOCK-BASED COMPENSATION PLANS (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Stock-Based Compensation | |||
Total compensation cost for stock-based awards | $11,291 | $10,237 | $9,503 |
Tax benefit realized for tax deductions from stock-based awards | 12,988 | 10,614 | 13,266 |
Common stock available for future grants (in shares) | 3,474,967 | ||
Stock Option Awards | |||
Stock-Based Compensation | |||
Total compensation cost for stock-based awards | 5,142 | 4,710 | 4,200 |
Stock option awards | |||
Outstanding at the beginning of the period (in shares) | 3,069,778 | ||
Granted (in shares) | 288,832 | ||
Exercised (in shares) | -302,266 | ||
Cancelled (in shares) | -6,692 | ||
Outstanding at the end of the period (in shares) | 3,049,652 | 3,069,778 | |
Exercisable at the end of the period (in shares) | 2,338,853 | ||
Stock options, weighted-average exercise price | |||
Outstanding at the beginning of the period (in dollars per share) | $25.55 | ||
Granted (in dollars per share) | $59.45 | ||
Exercised (in dollars per share) | $22.19 | ||
Cancelled (in dollars per share) | $59.50 | ||
Outstanding at the end of the period (in dollars per share) | $29.04 | $25.55 | |
Exercisable at the end of the period (in dollars per share) | $23.98 | ||
Stock options, weighted-average contractual life | |||
Outstanding at the beginning of the period | 5 years 4 months 24 days | 5 years 10 months 24 days | |
Outstanding at the end of the period | 5 years 4 months 24 days | 5 years 10 months 24 days | |
Exercisable at the end of the period | 4 years 7 months 6 days | ||
Aggregate intrinsic value | |||
Outstanding at the beginning of the period | 102,493 | ||
Outstanding at the end of the period | 99,713 | 102,493 | |
Exercisable at the end of the period | 88,289 | ||
Other stock-based compensation plan disclosures | |||
Total unrecognized compensation cost related to unvested awards | 1,855 | ||
Weighted-average period for recognition of compensation cost related to unvested awards | 1 year 10 months 24 days | ||
Total market value, intrinsic value and fair value of stock options exercised and vested | |||
Market value of stock options exercised | 19,017 | 23,160 | 35,901 |
Intrinsic value of options exercised | 12,311 | 13,875 | 16,061 |
Valuation assumptions of stock-based compensation | |||
Expected life of option | 6 years | 6 years | 6 years |
Expected volatility, low end of range (as a percent) | 34.28% | 35.18% | 34.87% |
Expected volatility, high end of range (as a percent) | 34.42% | 35.19% | 35.02% |
Weighted-average volatility (as a percent) | 34.29% | 35.19% | 35.01% |
Risk-free interest rate (as a percent) | 1.92% | 0.88% | 1.20% |
Expected dividend yield, low end of range (as a percent) | 1.25% | 1.04% | 1.31% |
Expected dividend yield, high end of range (as a percent) | 1.27% | 1.07% | 1.40% |
Weighted-average dividend yield (as a percent) | 1.25% | 1.07% | 1.32% |
Grant date per share weighted-average fair value (in dollars per share) | $18.69 | $13.03 | $8.56 |
Stock Option Awards | Other employees | |||
Stock-Based Compensation | |||
Frequency of grants | On an annual basis in the first quarter of the company's fiscal year | ||
Portion of stock-based award that generally vest per year for employees and non-employee directors | 0.333 | ||
Award vesting period | 3 years | ||
Term of award | 10 years | ||
Stock Option Awards | Non-employee directors | |||
Stock-Based Compensation | |||
Frequency of grants | On an annual basis in the first quarter of the company's fiscal year | ||
Portion of stock-based award that generally vest per year for employees and non-employee directors | 0.333 | ||
Award vesting period | 3 years | ||
Term of award | 10 years | ||
Requisite service period for non-employee director based upon which fair value of options granted is expensed on the date of grant | 10 years | ||
Stock Option Awards | Non-officer employees | |||
Stock-Based Compensation | |||
Award vesting period | 3 years | ||
Term of award | 10 years | ||
Stock Option Awards | Officers | |||
Stock-Based Compensation | |||
Frequency of grants | On an annual basis in the first quarter of the company's fiscal year | ||
Portion of stock-based award that generally vest per year for employees and non-employee directors | 0.333 | ||
Award vesting period | 3 years | ||
Term of award | 10 years | ||
Restricted Stock and Restricted Stock Unit Awards | |||
Stock-Based Compensation | |||
Total compensation cost for stock-based awards | 1,653 | 1,694 | 1,721 |
Portion of stock-based award that generally vest per year for employees and non-employee directors | 0.333 | ||
Award vesting period | 3 years | ||
Other stock-based compensation plan disclosures | |||
Total unrecognized compensation cost related to unvested awards | 2,019 | ||
Weighted-average period for recognition of compensation cost related to unvested awards | 2 years 2 months 12 days | ||
Performance Share Awards | |||
Stock-Based Compensation | |||
Total compensation cost for stock-based awards | 4,496 | 3,833 | 3,582 |
Frequency of grants | On an annual basis in the first quarter of the company's fiscal year | ||
Award vesting period | 3 years | ||
Other stock-based compensation plan disclosures | |||
Total unrecognized compensation cost related to unvested awards | $4,293 | ||
Weighted-average period for recognition of compensation cost related to unvested awards | 1 year 8 months 12 days | ||
Valuation assumptions of stock-based compensation | |||
Performance goal period | 3 years | ||
Maximum increase in the number of shares of common stock a participant receives based on the achievement of performance goals (as a percent) | 200.00% | ||
Potential lowest number of shares of common stock that could be received based on the achievement level of performance goals | 0 |
STOCKBASED_COMPENSATION_PLANS_2
STOCK-BASED COMPENSATION PLANS (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Restricted Stock and Restricted Stock Unit Awards | |||
Granted shares of awards | |||
Weighted-average fair value at date of grant (in dollars per share) | $63.05 | $46.10 | $33.61 |
Fair value of awards vested | $1,890 | $1,207 | $967 |
Unvested awards | |||
Unvested at the beginning of the period (in shares) | 109,288 | ||
Granted (in shares) | 29,975 | ||
Vested (in shares) | -58,047 | ||
Forfeited (in shares) | -2,687 | ||
Unvested at the end of the period (in shares) | 78,529 | 109,288 | |
Weighted-Average Fair Value at Date of Grant | |||
Unvested at the beginning of the period (in dollars per share) | $36.32 | ||
Granted (in dollars per share) | $63.05 | $46.10 | $33.61 |
Vested (in dollars per share) | $32.43 | ||
Forfeited (in dollars per share) | $41.93 | ||
Unvested at the end of the period (in dollars per share) | $49.22 | $36.32 | |
Performance Share Awards | |||
Granted shares of awards | |||
Weighted-average fair value at date of grant (in dollars per share) | $60.19 | ||
Fair value of awards vested | $7,926 | $9,057 | $1,828 |
Unvested awards | |||
Unvested at the beginning of the period (in shares) | 520,800 | ||
Granted (in shares) | 121,600 | ||
Vested (in shares) | -133,640 | ||
Forfeited (in shares) | -31,960 | ||
Unvested at the end of the period (in shares) | 476,800 | 520,800 | |
Weighted-Average Fair Value at Date of Grant | |||
Unvested at the beginning of the period (in dollars per share) | $33.41 | ||
Granted (in dollars per share) | $60.19 | ||
Vested (in dollars per share) | $31.76 | ||
Forfeited (in dollars per share) | $31.76 | ||
Unvested at the end of the period (in dollars per share) | $40.82 | $33.41 |
EMPLOYEE_RETIREMENT_PLANS_Deta
EMPLOYEE RETIREMENT PLANS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
EMPLOYEE RETIREMENT PLANS | |||
Investments, Savings, Employee Stock Ownership Plan, expenses | $15,550 | $14,931 | $14,304 |
Projected benefit obligation | 45,420 | 42,034 | |
Amount of net liability recognized | 3,432 | 3,982 | |
Accumulated benefit obligation | 42,431 | 39,967 | |
Funded status of plans | 10,085 | 9,063 | |
Fair value of the plan assets | 35,335 | 32,971 | |
Net expense recognized | 1,092 | 1,149 | 703 |
Amounts recognized in accumulated other comprehensive loss | |||
Net actuarial loss | 5,034 | 3,526 | |
Net prior service cost (credit) | 232 | 157 | |
Accumulated other comprehensive loss | 5,266 | 3,683 | 4,328 |
Amounts included in accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost | |||
Net actuarial loss | 572 | ||
Net prior service cost (credit) | 10 | ||
Total | 582 | ||
Amounts recognized in net periodic benefit cost and other comprehensive income | |||
Net actuarial loss (gain) | -1 | -1,453 | |
Amortization of unrecognized prior service (credit) cost | 74 | 72 | |
Amortization of unrecognized actuarial loss (gain) | 1,510 | 736 | |
Total recognized in other comprehensive loss (income) | 1,583 | -645 | |
Total recognized in net periodic benefit cost and other comprehensive loss (income) | 2,675 | 504 | |
Defined Benefit Pension Plans | |||
Amounts recognized in accumulated other comprehensive loss | |||
Net actuarial loss | 4,521 | 2,915 | |
Net prior service cost (credit) | 257 | 289 | |
Accumulated other comprehensive loss | 4,778 | 3,204 | |
Amounts included in accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost | |||
Net actuarial loss | 570 | ||
Net prior service cost (credit) | 51 | ||
Total | 621 | ||
Amounts recognized in net periodic benefit cost and other comprehensive income | |||
Net actuarial loss (gain) | 88 | -1,170 | |
Amortization of unrecognized prior service (credit) cost | -32 | -34 | |
Amortization of unrecognized actuarial loss (gain) | 1,519 | 768 | |
Total recognized in other comprehensive loss (income) | 1,575 | -436 | |
Total recognized in net periodic benefit cost and other comprehensive loss (income) | 2,110 | 117 | |
Other Postretirement Benefit Plans | |||
Amounts recognized in accumulated other comprehensive loss | |||
Net actuarial loss | 513 | 611 | |
Net prior service cost (credit) | -25 | -132 | |
Accumulated other comprehensive loss | 488 | 479 | |
Amounts included in accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost | |||
Net actuarial loss | 2 | ||
Net prior service cost (credit) | -41 | ||
Total | -39 | ||
Amounts recognized in net periodic benefit cost and other comprehensive income | |||
Net actuarial loss (gain) | -89 | -283 | |
Amortization of unrecognized prior service (credit) cost | 106 | 106 | |
Amortization of unrecognized actuarial loss (gain) | -9 | -32 | |
Total recognized in other comprehensive loss (income) | 8 | -209 | |
Total recognized in net periodic benefit cost and other comprehensive loss (income) | $565 | $387 |
SEGMENT_DATA_Details
SEGMENT DATA (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Aug. 01, 2014 | 2-May-14 | Jan. 31, 2014 | Oct. 31, 2013 | Aug. 02, 2013 | 3-May-13 | Feb. 01, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
segment | |||||||||||
Segment Data | |||||||||||
Number of operating segment | 8 | ||||||||||
Number of reportable business segments | 3 | ||||||||||
Financial information concerning the company's reportable segments | |||||||||||
Net sales | $414,140 | $567,540 | $745,030 | $445,981 | $382,366 | $509,918 | $704,486 | $444,661 | $2,172,691 | $2,041,431 | $1,958,690 |
Earnings (loss) before income taxes | 256,445 | 226,713 | 196,262 | ||||||||
Total assets | 1,192,415 | 1,002,748 | 1,192,415 | 1,002,748 | 935,199 | ||||||
Capital expenditures | 71,138 | 49,427 | 43,242 | ||||||||
Depreciation and amortization | 53,138 | 54,134 | 53,634 | ||||||||
Components of the loss before income taxes included in "Other" | |||||||||||
Interest expense, net | -15,426 | -16,210 | -16,906 | ||||||||
Other | 8,714 | 12,261 | 7,555 | ||||||||
Earnings before income taxes | 256,445 | 226,713 | 196,262 | ||||||||
Professional | |||||||||||
Financial information concerning the company's reportable segments | |||||||||||
Net sales | 1,477,578 | 1,425,259 | 1,329,504 | ||||||||
Earnings (loss) before income taxes | 276,305 | 254,424 | 232,104 | ||||||||
Total assets | 573,086 | 528,926 | 573,086 | 528,926 | 527,159 | ||||||
Capital expenditures | 25,226 | 32,362 | 29,313 | ||||||||
Depreciation and amortization | 34,228 | 34,706 | 34,876 | ||||||||
Components of the loss before income taxes included in "Other" | |||||||||||
Earnings before income taxes | 276,305 | 254,424 | 232,104 | ||||||||
Residential | |||||||||||
Financial information concerning the company's reportable segments | |||||||||||
Net sales | 672,443 | 594,411 | 607,435 | ||||||||
Earnings (loss) before income taxes | 76,916 | 62,033 | 57,889 | ||||||||
Total assets | 172,984 | 167,918 | 172,984 | 167,918 | 169,899 | ||||||
Capital expenditures | 12,417 | 7,838 | 4,164 | ||||||||
Depreciation and amortization | 8,883 | 10,321 | 10,919 | ||||||||
Components of the loss before income taxes included in "Other" | |||||||||||
Earnings before income taxes | 76,916 | 62,033 | 57,889 | ||||||||
Other | |||||||||||
Financial information concerning the company's reportable segments | |||||||||||
Net sales | 22,670 | 21,761 | 21,751 | ||||||||
Earnings (loss) before income taxes | -96,776 | -89,744 | -93,731 | ||||||||
Total assets | 446,345 | 305,904 | 446,345 | 305,904 | 238,141 | ||||||
Capital expenditures | 33,495 | 9,227 | 9,765 | ||||||||
Depreciation and amortization | 10,027 | 9,107 | 7,839 | ||||||||
Components of the loss before income taxes included in "Other" | |||||||||||
Corporate expenses | -88,539 | -85,359 | -81,376 | ||||||||
Interest expense, net | -15,426 | -16,210 | -16,906 | ||||||||
Other | 7,189 | 11,825 | 4,551 | ||||||||
Earnings before income taxes | -96,776 | -89,744 | -93,731 | ||||||||
Intersegment | Professional | |||||||||||
Financial information concerning the company's reportable segments | |||||||||||
Gross sales | 41,376 | 40,416 | 37,324 | ||||||||
Intersegment | Residential | |||||||||||
Financial information concerning the company's reportable segments | |||||||||||
Gross sales | 424 | 402 | 26 | ||||||||
Intersegment | Other | |||||||||||
Financial information concerning the company's reportable segments | |||||||||||
Gross sales | ($41,800) | ($40,818) | ($37,350) |
SEGMENT_DATA_Details_2
SEGMENT DATA (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Aug. 01, 2014 | 2-May-14 | Jan. 31, 2014 | Oct. 31, 2013 | Aug. 02, 2013 | 3-May-13 | Feb. 01, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Net sales for groups of similar products and services | |||||||||||
Net sales | $414,140 | $567,540 | $745,030 | $445,981 | $382,366 | $509,918 | $704,486 | $444,661 | $2,172,691 | $2,041,431 | $1,958,690 |
Equipment | |||||||||||
Net sales for groups of similar products and services | |||||||||||
Net sales | 1,765,845 | 1,649,489 | 1,586,864 | ||||||||
Irrigation and lighting | |||||||||||
Net sales for groups of similar products and services | |||||||||||
Net sales | $406,846 | $391,942 | $371,826 |
SEGMENT_DATA_Details_3
SEGMENT DATA (Details 3) (Sales, Customer concentration, Single customer, Residential) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
customer | customer | customer | |
Sales | Customer concentration | Single customer | Residential | |||
Concentration Risk | |||
Number of customers | 1 | 1 | 1 |
Percentage of consolidated gross sales accounted for by one customer (as a percent) | 11.00% | 10.00% | 11.00% |
SEGMENT_DATA_Details_4
SEGMENT DATA (Details 4) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Aug. 01, 2014 | 2-May-14 | Jan. 31, 2014 | Oct. 31, 2013 | Aug. 02, 2013 | 3-May-13 | Feb. 01, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Geographic Data | |||||||||||
Net sales | $414,140 | $567,540 | $745,030 | $445,981 | $382,366 | $509,918 | $704,486 | $444,661 | $2,172,691 | $2,041,431 | $1,958,690 |
Long-lived assets | 205,195 | 185,096 | 205,195 | 185,096 | 180,523 | ||||||
United States | |||||||||||
Geographic Data | |||||||||||
Net sales | 1,550,077 | 1,426,060 | 1,364,377 | ||||||||
Long-lived assets | 169,797 | 143,547 | 169,797 | 143,547 | 137,708 | ||||||
Foreign Countries | |||||||||||
Geographic Data | |||||||||||
Net sales | 622,614 | 615,371 | 594,313 | ||||||||
Long-lived assets | $35,398 | $41,549 | $35,398 | $41,549 | $42,815 |
COMMITMENTS_AND_CONTINGENT_LIA1
COMMITMENTS AND CONTINGENT LIABILITIES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Leases | |||
Rental expense for operating leases | $24,329 | $24,399 | $22,166 |
Future minimum lease payments under noncancelable operating leases | |||
Total future minimum lease payments | 67,522 | ||
2015 | 15,308 | ||
2016 | 11,427 | ||
2017 | 7,353 | ||
2018 | 5,344 | ||
2019 | 4,204 | ||
After 2019 | 23,886 | ||
Purchase Commitments | |||
Amount of noncancelable purchase commitments | 18,921 | ||
Maximum obligation for the construction of a new corporate headquarters facility | 15,291 | ||
Letters of Credit | |||
Letters of credit outstanding | 16,220 | 12,681 | |
Wholesale Financing | |||
Customer Financing | |||
Receivables purchased by third party financing company from the company | 18,693 | ||
Receivables financed by third party financing company, excluding Red Iron, outstanding | 10,945 | ||
Maximum amount of contingent liability to repurchase inventory related receivables under limited inventory repurchase agreements | 9,369 | ||
End-User Financing | |||
Customer Financing | |||
Contingent liabilities for residual value or credit collection risk | 0 | ||
Maximum exposure for credit collection | $1,893 |
FINANCIAL_INSTRUMENTS_Details
FINANCIAL INSTRUMENTS (Details) | 12 Months Ended | ||||||||||||||||||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2014 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 |
USD ($) | USD ($) | Forward currency contracts | Forward currency contracts | Forward currency contracts | Forward currency contracts | Forward currency contracts | Forward currency contracts | Forward currency contracts | Forward currency contracts | Forward currency contracts | Cross currency contract | Cross currency contract | Cross currency contract | Cross currency contract | Cross currency contract | Cross currency contract | Cross currency contract | Cross currency contract | |
USD ($) | USD ($) | Derivatives Designated as Hedging Instruments | Derivatives Designated as Hedging Instruments | Derivatives Designated as Hedging Instruments | Derivatives Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments | USD ($) | EUR (€) | RON | USD ($) | Derivatives Designated as Hedging Instruments | Derivatives Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments | |||
Prepaid expenses | Prepaid expenses | Accrued liabilities | Accrued liabilities | Prepaid expenses | Prepaid expenses | Accrued liabilities | item | Prepaid expenses | Accrued liabilities | Accrued liabilities | Accrued liabilities | ||||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||
Summary of cash flow hedge activity | |||||||||||||||||||
Maximum time limit for cash flow hedge | 2 years | ||||||||||||||||||
Cash flow hedge effectiveness testing, grace period | 2 months | ||||||||||||||||||
Fair value of derivatives | |||||||||||||||||||
Notional amount | $106,906 | € 8,500 | 36,593 | ||||||||||||||||
Number of foreign currency contracts held | 1 | 1 | 1 | ||||||||||||||||
Asset Derivatives | 6,861 | 1,266 | 6,030 | 1,266 | 4,626 | 558 | 1,404 | 708 | 831 | 831 | |||||||||
Liability Derivatives | $545 | $2,374 | $9 | $1,931 | $9 | $1,381 | $550 | $536 | $443 | $326 | $536 | $117 |
FINANCIAL_INSTRUMENTS_Details_
FINANCIAL INSTRUMENTS (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 |
Derivative Instruments and Hedging Activities | ||
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) | $3,200 | ($904) |
Gain (Loss) Reclassified from AOCL into Income (Effective Portion) | -1,562 | -971 |
Gain (Loss) Recognized in Net Earnings | 4,506 | -1,885 |
Reclassification of gains from AOCI to earnings during the next 12 months on foreign currency contracts | 3,736 | |
Forward currency contracts | Net sales | ||
Derivative Instruments and Hedging Activities | ||
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) | 4,150 | 7 |
Gain (Loss) Reclassified from AOCL into Income (Effective Portion) | -1,128 | -805 |
Forward currency contracts | Cost of sales | ||
Derivative Instruments and Hedging Activities | ||
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) | -712 | -231 |
Gain (Loss) Reclassified from AOCL into Income (Effective Portion) | 103 | 473 |
Forward currency contracts | Other income, net. | ||
Derivative Instruments and Hedging Activities | ||
Gain (Loss) recognized in Income on Derivatives (Ineffective Portion and Excluded from Effectiveness Testing) | 120 | 648 |
Gain (Loss) Recognized in Net Earnings | 3,555 | -1,402 |
Cross currency contract | Other income, net. | ||
Derivative Instruments and Hedging Activities | ||
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) | -238 | -680 |
Gain (Loss) Reclassified from AOCL into Income (Effective Portion) | -537 | -639 |
Gain (Loss) Recognized in Net Earnings | $951 | ($483) |
FINANCIAL_INSTRUMENTS_Details_1
FINANCIAL INSTRUMENTS (Details 3) (USD $) | Oct. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Derivative Asset, Fair Value, Gross Asset | $7,096 | $1,266 |
Derivative Asset, Fair Value, Gross Liability | 235 | |
Derivative Asset | 6,861 | 1,266 |
Derivative Liability, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Derivative Liability, Fair Value, Gross Liability | 545 | 2,411 |
Derivative Liability, Fair Value, Gross Asset | 37 | |
Derivative Liability | 545 | 2,374 |
Forward currency contracts | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Derivative Asset, Fair Value, Gross Asset | 6,265 | 1,266 |
Derivative Asset, Fair Value, Gross Liability | 235 | |
Derivative Asset | 6,030 | 1,266 |
Derivative Liability, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Derivative Liability, Fair Value, Gross Liability | 9 | 1,968 |
Derivative Liability, Fair Value, Gross Asset | 37 | |
Derivative Liability | 9 | 1,931 |
Cross currency contract | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Derivative Asset, Fair Value, Gross Asset | 831 | |
Derivative Asset | 831 | |
Derivative Liability, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Derivative Liability, Fair Value, Gross Liability | 536 | 443 |
Derivative Liability | $536 | $443 |
FINANCIAL_INSTRUMENTS_Details_2
FINANCIAL INSTRUMENTS (Details 4) (USD $) | 0 Months Ended | 3 Months Ended | |||
In Thousands, unless otherwise specified | Apr. 23, 2007 | Apr. 30, 2007 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Treasury lock agreements | |||||
Amount of unrecognized loss portion in accumulated other comprehensive loss | $2,097 | ($1,109) | ($210) | ||
Treasury lock agreement based on U.S. Treasury security | Cash flow hedges. | |||||
Treasury lock agreements | |||||
Number of treasury lock agreements | 3 | ||||
Net settlement of unrecognized loss portion recorded in accumulated other comprehensive loss | 182 | ||||
Amount of unrecognized loss portion in accumulated other comprehensive loss | 137 | 143 | |||
Treasury lock agreement based on U.S. Treasury security, one and two | |||||
Treasury lock agreements | |||||
Principal balance | 30,000 | ||||
Treasury lock agreement based on U.S. Treasury security, one and two | Cash flow hedges. | |||||
Treasury lock agreements | |||||
Amortization period | 30 years | ||||
Treasury lock agreement based on U.S. Treasury security, three | Cash flow hedges. | |||||
Treasury lock agreements | |||||
Principal balance | 40,000 |
FINANCIAL_INSTRUMENTS_Details_3
FINANCIAL INSTRUMENTS (Details 5) (USD $) | Oct. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Gross Amounts of Recognized Assets | $7,096 | $1,266 |
Gross Liabilities Offset in the Balance Sheet | -235 | |
Net Amounts of Assets Presented in the Balance Sheet | 6,861 | 1,266 |
Liabilities | ||
Gross Amounts of Recognized Liabilities | -545 | -2,411 |
Gross Assets Offset in the Balance Sheet | 37 | |
Net Amounts of Liabilities Presented in the Balance Sheet | -545 | -2,374 |
Forward currency contracts | ||
Assets | ||
Gross Amounts of Recognized Assets | 6,265 | 1,266 |
Gross Liabilities Offset in the Balance Sheet | -235 | |
Net Amounts of Assets Presented in the Balance Sheet | 6,030 | 1,266 |
Liabilities | ||
Gross Amounts of Recognized Liabilities | -9 | -1,968 |
Gross Assets Offset in the Balance Sheet | 37 | |
Net Amounts of Liabilities Presented in the Balance Sheet | -9 | -1,931 |
Cross currency contract | ||
Assets | ||
Gross Amounts of Recognized Assets | 831 | |
Net Amounts of Assets Presented in the Balance Sheet | 831 | |
Liabilities | ||
Gross Amounts of Recognized Liabilities | -536 | -443 |
Net Amounts of Liabilities Presented in the Balance Sheet | ($536) | ($443) |
FINANCIAL_INSTRUMENTS_Details_4
FINANCIAL INSTRUMENTS (Details 6) (USD $) | Oct. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Liabilities: | ||
Transfer of asset from level 1 to level 2 | $0 | $0 |
Transfer of asset from level 2 to level 1 | 0 | 0 |
Transfer of liabilities from level 1 to level 2 | 0 | 0 |
Transfer of liabilities from level 2 to level 1 | 0 | 0 |
Long-term debt with fixed interest rates | 260,970 | 243,074 |
Carrying amount of long-term debt | 223,956 | 223,544 |
Measured on a recurring basis | Fair Value | ||
Assets: | ||
Cash and cash equivalents | 314,873 | 182,993 |
Forward currency contracts | 6,030 | 1,266 |
Cross currency contracts | 831 | |
Total assets | 321,734 | 184,259 |
Liabilities: | ||
Forward currency contracts | 9 | 1,931 |
Cross currency contracts | 536 | 443 |
Deferred compensation liabilities | 2,141 | 2,777 |
Total liabilities | 2,686 | 5,151 |
Measured on a recurring basis | Level 1 | ||
Assets: | ||
Cash and cash equivalents | 314,873 | 182,993 |
Total assets | 314,873 | 182,993 |
Measured on a recurring basis | Level 2 | ||
Assets: | ||
Forward currency contracts | 6,030 | 1,266 |
Cross currency contracts | 831 | |
Total assets | 6,861 | 1,266 |
Liabilities: | ||
Forward currency contracts | 9 | 1,931 |
Cross currency contracts | 536 | 443 |
Deferred compensation liabilities | 2,141 | 2,777 |
Total liabilities | $2,686 | $5,151 |
QUARTERLY_FINANCIAL_DATA_Detai
QUARTERLY FINANCIAL DATA (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Oct. 31, 2014 | Aug. 01, 2014 | 2-May-14 | Jan. 31, 2014 | Oct. 31, 2013 | Aug. 02, 2013 | 3-May-13 | Feb. 01, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
Consolidated Statements of Earnings | |||||||||||
Net sales | $414,140 | $567,540 | $745,030 | $445,981 | $382,366 | $509,918 | $704,486 | $444,661 | $2,172,691 | $2,041,431 | $1,958,690 |
Gross profit | 143,137 | 202,080 | 264,540 | 163,514 | 128,648 | 178,031 | 252,301 | 165,817 | 773,271 | 724,797 | 673,094 |
Net earnings | $10,902 | $50,013 | $87,086 | $25,869 | $4,950 | $40,097 | $78,402 | $31,396 | $173,870 | $154,845 | $129,541 |
Basic net earnings per share of common stock (in dollars per share) | $0.19 | $0.89 | $1.54 | $0.45 | $0.09 | $0.70 | $1.35 | $0.54 | $3.09 | $2.67 | $2.18 |
Diluted net earnings per share of common stock (in dollars per share) | $0.19 | $0.87 | $1.51 | $0.44 | $0.08 | $0.68 | $1.32 | $0.53 | $3.02 | $2.62 | $2.14 |
SCHEDULE_II_Valuation_and_Qual1
SCHEDULE II Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 |
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 period | $3,425 | $3,733 | $2,040 |
Charged to costs and expense | -79 | 123 | 2,160 |
Other | 12 | ||
Deductions | 1,865 | 431 | 479 |
Balance at the end of the period | 1,481 | 3,425 | 3,733 |
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 period | 64,191 | 56,264 | 47,161 |
Charged to costs and expense | 306,650 | 287,217 | 214,474 |
Deductions | 304,672 | 279,290 | 205,371 |
Balance at the end of the period | $66,169 | $64,191 | $56,264 |