Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Aug. 03, 2018 | Aug. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | TORO CO | |
Entity Central Index Key | 737,758 | |
Document Type | 10-Q | |
Document Period End Date | Aug. 3, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 105,530,994 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 655,821 | $ 627,943 | $ 2,079,347 | $ 2,016,549 |
Cost of sales | 422,168 | 401,158 | 1,317,399 | 1,279,970 |
Gross profit | 233,653 | 226,785 | 761,948 | 736,579 |
Selling, general and administrative expense | 140,759 | 139,001 | 431,859 | 428,929 |
Operating earnings | 92,894 | 87,784 | 330,089 | 307,650 |
Interest expense | (4,676) | (4,750) | (14,214) | (14,309) |
Other income, net | 5,057 | 5,349 | 12,951 | 12,916 |
Earnings before income taxes | 93,275 | 88,383 | 328,826 | 306,257 |
Provision for income taxes | 14,266 | 19,979 | 95,924 | 72,388 |
Net earnings | $ 79,009 | $ 68,404 | $ 232,902 | $ 233,869 |
Basic net earnings per share of common stock (usd per share) | $ 0.75 | $ 0.63 | $ 2.19 | $ 2.16 |
Diluted net earnings per share of common stock (usd per share) | $ 0.73 | $ 0.61 | $ 2.14 | $ 2.10 |
Weighted-average number of shares of common stock outstanding — Basic (in shares) | 105,751 | 108,456 | 106,474 | 108,434 |
Weighted-average number of shares of common stock outstanding — Diluted (in shares) | 108,070 | 111,457 | 108,930 | 111,460 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 79,009 | $ 68,404 | $ 232,902 | $ 233,869 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (4,373) | 12,300 | (2,164) | 13,017 |
Derivative instruments, net of tax of $485; $(2,262); $1,318; and $(2,236), respectively | 1,449 | (3,062) | 2,430 | (1,100) |
Pension and retiree medical benefits | 85 | 0 | 416 | 0 |
Other comprehensive income (loss), net of tax | (2,839) | 9,238 | 682 | 11,917 |
Comprehensive income | $ 76,170 | $ 77,642 | $ 233,584 | $ 245,786 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Derivative instruments, tax | $ 485 | $ (2,262) | $ 1,318 | $ (2,236) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Aug. 03, 2018 | Oct. 31, 2017 | Aug. 04, 2017 |
ASSETS | |||
Cash and cash equivalents | $ 250,871 | $ 310,256 | $ 335,026 |
Receivables, net | 219,469 | 183,073 | 221,551 |
Inventories, net | 364,497 | 328,992 | 349,022 |
Prepaid expenses and other current assets | 38,187 | 37,565 | 42,550 |
Total current assets | 873,024 | 859,886 | 948,149 |
Property, plant and equipment, gross | 915,667 | 885,614 | 890,585 |
Less accumulated depreciation | 666,165 | 650,384 | 663,659 |
Property, plant and equipment, net | 249,502 | 235,230 | 226,926 |
Deferred income taxes | 43,590 | 64,083 | 59,754 |
Goodwill | 225,369 | 205,029 | 202,678 |
Other intangible assets, net | 107,700 | 103,743 | 106,258 |
Other assets | 35,572 | 25,816 | 25,779 |
Total assets | 1,534,757 | 1,493,787 | 1,569,544 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Current portion of long-term debt | 0 | 26,258 | 23,056 |
Accounts payable | 229,041 | 211,752 | 211,453 |
Accrued liabilities | 282,634 | 283,786 | 309,385 |
Total current liabilities | 511,675 | 521,796 | 543,894 |
Long-term debt, less current portion | 312,481 | 305,629 | 308,793 |
Deferred revenue | 25,087 | 24,761 | 24,964 |
Deferred income taxes | 1,728 | 1,726 | 0 |
Other long-term liabilities | 33,542 | 22,783 | 31,971 |
Stockholders’ equity: | |||
Preferred stock, par value $1.00 per share, authorized 1,000,000 voting and 850,000 non-voting shares, none issued and outstanding | 0 | 0 | 0 |
Common stock, par value $1.00 per share, authorized 175,000,000 shares; issued and outstanding 105,297,097 shares as of August 3, 2018, 107,883,039 shares as of August 4, 2017, and 106,882,972 shares as of October 31, 2017 | 105,297 | 106,883 | 107,883 |
Retained earnings | 568,385 | 534,329 | 578,558 |
Accumulated other comprehensive loss | (23,438) | (24,120) | (26,519) |
Total stockholders’ equity | 650,244 | 617,092 | 659,922 |
Total liabilities and stockholders’ equity | $ 1,534,757 | $ 1,493,787 | $ 1,569,544 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Aug. 03, 2018 | Oct. 31, 2017 | Aug. 04, 2017 |
Preferred stock | |||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
Preferred stock, issued (in shares) | 0 | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 | 0 |
Common stock | |||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
Common stock, authorized (in shares) | 175,000,000 | 175,000,000 | 175,000,000 |
Common stock, issued (in shares) | 105,297,097 | 106,882,972 | 107,883,039 |
Common stock, outstanding (in shares) | 105,297,097 | 106,882,972 | 107,883,039 |
Voting preferred stock | |||
Preferred stock | |||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 |
Non-voting preferred stock | |||
Preferred stock | |||
Preferred stock, authorized (in shares) | 850,000 | 850,000 | 850,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Aug. 03, 2018 | Aug. 04, 2017 | |
Cash flows from operating activities: | ||
Net earnings | $ 232,902 | $ 233,869 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Non-cash income from finance affiliate | (8,564) | (7,566) |
Distributions from finance affiliate, net | 6,162 | 4,617 |
Provision for depreciation and amortization | 41,908 | 47,713 |
Stock-based compensation expense | 8,588 | 9,691 |
Deferred income taxes | 20,381 | (2,121) |
Other | (83) | 71 |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Receivables, net | (34,996) | (54,935) |
Inventories, net | (33,554) | (34,069) |
Prepaid expenses and other assets | (6,065) | (7,625) |
Accounts payable, accrued liabilities, deferred revenue and other long-term liabilities | 32,690 | 86,991 |
Net cash provided by operating activities | 259,369 | 276,636 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (51,938) | (36,572) |
Proceeds from asset disposals | 0 | 74 |
Investment in unconsolidated entities | (6,417) | 0 |
Acquisitions, net of cash acquired | (31,202) | (24,181) |
Net cash used in investing activities | (89,557) | (60,679) |
Cash flows from financing activities: | ||
Payments on long-term debt | (19,757) | (19,158) |
Proceeds from exercise of stock options | 10,165 | 9,756 |
Payments of withholding taxes for stock awards | (3,884) | (3,747) |
Purchases of Toro common stock | (151,481) | (92,312) |
Dividends paid on Toro common stock | (63,808) | (56,926) |
Net cash used in financing activities | (228,765) | (162,387) |
Effect of exchange rates on cash and cash equivalents | (432) | 7,901 |
Net (decrease)/increase in cash and cash equivalents | (59,385) | 61,471 |
Cash and cash equivalents as of the beginning of the fiscal period | 310,256 | 273,555 |
Cash and cash equivalents as of the end of the fiscal period | $ 250,871 | $ 335,026 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Aug. 03, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by United States ("U.S.") generally accepted accounting principles ("GAAP") for complete financial statements. Unless the context indicates otherwise, the terms "company," "Toro," "we," "our," or "us" refer to The Toro Company and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated from the unaudited Condensed Consolidated Financial Statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements include all adjustments, consisting primarily of recurring accruals, considered necessary for the fair presentation of the company's Consolidated Financial Position, Results of Operations, and Cash Flows for the periods presented. Since the company’s business is seasonal, operating results for the nine months ended August 3, 2018 cannot be annualized to determine the expected results for the fiscal year ending October 31, 2018 . The company’s fiscal year ends on October 31, and quarterly results are reported based on three-month periods that generally end on the Friday closest to the quarter end. For comparative purposes, however, the company’s second and third quarters always include exactly 13 weeks of results so that the quarter end date for these two quarters is not necessarily the Friday closest to the calendar month end. For further information, refer to the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in the company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017 . The policies described in that report are used for preparing quarterly reports. Accounting Policies In preparing the Condensed Consolidated Financial Statements in conformity with U.S. GAAP, management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. Estimates are used in determining, among other items, sales promotion and incentive accruals, incentive compensation accruals, income tax accruals, inventory valuation, warranty reserves, earn-out liabilities, allowance for doubtful accounts, pension and post-retirement accruals, self-insurance accruals, useful lives for tangible and definite-lived intangible assets, and future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets. These estimates and assumptions are based on management’s best estimates and judgments at the time they are made. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with certainty, actual amounts could differ significantly from those estimated at the time the Condensed Consolidated Financial Statements are prepared. Changes in those estimates will be reflected in the Consolidated Financial Statements in future periods. United States Tax Reform On December 22, 2017, the United States enacted Public Law No. 115-97 ("Tax Act"), originally introduced as the Tax Cuts and Jobs Act, to significantly modify the Internal Revenue Code. The Tax Act reduced the U.S. federal corporate tax rate from 35.0 percent to 21.0 percent, created a territorial-type tax system with an exemption for foreign dividends, and imposed a one-time deemed repatriation tax on a U.S. company's historical undistributed earnings and profits of foreign affiliates. The tax rate change is effective January 1, 2018, resulting in a blended statutory tax rate of 23.3 percent for the fiscal year ended October 31, 2018. Among other provisions, the Tax Act also increased expensing for certain business assets, created new taxes on certain foreign sourced earnings, adopted limitations on business interest expense deductions, repealed deductions for income attributable to domestic production activities, and added other anti-base erosion rules. The effective dates for the provisions set forth in the Tax Act vary as to when the provisions will apply to the company. In response to the Tax Act, the U.S. Securities and Exchange Commission ("SEC") provided guidance by issuing Staff Accounting Bulletin No. 118 ("SAB 118"), which has since been codified by the release of Accounting Standards Update ("ASU") No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 . ASU 2018-05 allows companies to record provisional amounts during a measurement period with respect to the impacts of the Tax Act for which the accounting requirements under Accounting Standards Codification ("ASC") Topic 740 are not complete, but a reasonable estimate has been determined. The measurement period under ASU 2018-05 ends when a company has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740, but cannot exceed one year. As of August 3, 2018 , the company has not completed the accounting for the effects of the Tax Act. However, the company has estimated the impacts of the Tax Act in its annual effective tax rate, and has recorded provisional amounts for the remeasurement of deferred tax assets and liabilities and the deemed repatriation tax. While we have recorded provisional amounts for the items expected to most significantly impact our financial statements this year, our evaluation is not complete and, accordingly, we have not yet reached a final conclusion on the overall impacts of the Tax Act. The company needs additional time to obtain, prepare, and analyze information related to the applicable provisions of the Tax Act. The actual impact of the Tax Act may differ from the provisional amounts, due to, among other things, changes in interpretations and assumptions the company has made, guidance that may be issued, and changes in the company's structure or business model. |
Acquisitions
Acquisitions | 9 Months Ended |
Aug. 03, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions L.T. Rich Products, Inc. Effective March 19, 2018, during the second quarter of fiscal 2018, the company completed the acquisition of substantially all of the assets of, and assumed certain liabilities for, L.T. Rich Products, Inc., a manufacturer of professional zero-turn spreader/sprayers, aerators, and snow and ice management equipment. The addition of these products broadens and strengthens the company’s Professional segment solutions for landscape contractors and grounds professionals. The purchase price of this acquisition was allocated to the identifiable assets acquired and liabilities assumed based on estimates of their fair value, with the excess purchase price recorded as goodwill. As of August 3, 2018 , the company has not yet finalized the purchase accounting for this acquisition, but expects to finalize such purchase accounting within one year from the date of acquisition. Additional purchase accounting disclosures have been omitted given the immateriality of this acquisition in relation to the company's Consolidated Financial Condition and Results of Operations. Regnerbau Calw GmbH Effective January 1, 2017, during the first quarter of fiscal 2017, the company completed the acquisition of all the outstanding shares of Regnerbau Calw GmbH ("Perrot"), a privately held manufacturer of professional irrigation equipment. The addition of these products broadened and strengthened the company's irrigation solutions for the sport, agricultural, and industrial markets. The acquisition was funded with existing foreign cash and cash equivalents. The purchase price of this acquisition was allocated to the identifiable assets acquired and liabilities assumed based on estimates of their fair value, with the excess purchase price recorded as goodwill. This acquisition was immaterial based on the company's Consolidated Financial Condition and Results of Operations. |
Investment in Joint Venture
Investment in Joint Venture | 9 Months Ended |
Aug. 03, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Joint Venture | Investment in Joint Venture In fiscal 2009, the company and TCF Inventory Finance, Inc. ("TCFIF"), a subsidiary of TCF National Bank, established Red Iron Acceptance, LLC ("Red Iron"), a joint venture in the form of a Delaware limited liability company that primarily provides inventory financing to certain distributors and dealers of the company’s products in the United States. On November 29, 2016, during the first quarter of fiscal 2017, the company entered into amended agreements for its Red Iron joint venture with TCFIF. As a result, the amended term of Red Iron will continue until October 31, 2024, subject to two -year extensions thereafter. Either the company or TCFIF may elect not to extend the amended term, or any subsequent term, by giving one -year written notice to the other party. The company owns 45 percent of Red Iron and TCFIF owns 55 percent of Red Iron. The company accounts for its investment in Red Iron under the equity method of accounting. The company and TCFIF each contributed a specified amount of the estimated cash required to enable Red Iron to purchase the company’s inventory financing receivables and to provide financial support for Red Iron’s inventory financing programs. Red Iron borrows the remaining requisite estimated cash utilizing a $550 million secured revolving credit facility established under a credit agreement between Red Iron and TCFIF. The company’s total investment in Red Iron as of August 3, 2018 was $23.0 million . 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 $7.5 million in a calendar year. Under the repurchase agreement between Red Iron and the company, Red Iron provides financing for certain dealers and distributors. These transactions are structured as an advance in the form of a payment by Red Iron to the company on behalf of a distributor or dealer with respect to invoices financed by Red Iron. These payments extinguish the obligation of the dealer or distributor to make payment to the company under the terms of the applicable invoice. Under separate agreements between Red Iron and the dealers and distributors, Red Iron provides loans to the dealers and distributors for the advances paid by Red Iron to the company. The net amount of receivables financed for dealers and distributors under this arrangement for the nine months ended August 3, 2018 and August 4, 2017 were $1,525.3 million and $1,466.5 million , respectively. As of July 31, 2018 , Red Iron’s total assets were $463.8 million and total liabilities were $412.6 million . |
Inventories
Inventories | 9 Months Ended |
Aug. 03, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories 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 and the first-in, first-out ("FIFO") method for all other inventories. 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 the planned production, as well as planned and historical sales of the inventory. Inventories were as follows: (Dollars in thousands) August 3, 2018 August 4, 2017 October 31, 2017 Raw materials and work in process $ 105,239 $ 88,440 $ 100,077 Finished goods and service parts 326,059 318,940 295,716 Total FIFO value 431,298 407,380 395,793 Less: adjustment to LIFO value 66,801 58,358 66,801 Total inventories, net $ 364,497 $ 349,022 $ 328,992 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Aug. 03, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the net carrying amount of goodwill for the first nine months of fiscal 2018 were as follows: (Dollars in thousands) Professional Segment Residential Segment Total Balance as of October 31, 2017 $ 194,464 $ 10,565 $ 205,029 Goodwill acquired 20,393 — 20,393 Translation adjustments (17 ) (36 ) (53 ) Balance as of August 3, 2018 $ 214,840 $ 10,529 $ 225,369 The components of other intangible assets as of August 3, 2018 were as follows: (Dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Patents $ 18,247 $ (12,103 ) $ 6,144 Non-compete agreements 6,883 (6,776 ) 107 Customer-related 89,745 (22,444 ) 67,301 Developed technology 31,097 (28,165 ) 2,932 Trade names 2,331 (1,760 ) 571 Other 800 (800 ) — Total amortizable 149,103 (72,048 ) 77,055 Non-amortizable - trade names 30,645 — 30,645 Total other intangible assets, net $ 179,748 $ (72,048 ) $ 107,700 The components of other intangible assets as of October 31, 2017 were as follows: (Dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Patents $ 15,162 $ (11,599 ) $ 3,563 Non-compete agreements 6,896 (6,775 ) 121 Customer-related 87,461 (18,940 ) 68,521 Developed technology 30,212 (26,939 ) 3,273 Trade names 2,330 (1,637 ) 693 Other 800 (800 ) — Total amortizable 142,861 (66,690 ) 76,171 Non-amortizable - trade names 27,572 — 27,572 Total other intangible assets, net $ 170,433 $ (66,690 ) $ 103,743 Amortization expense for intangible assets during the third quarter of fiscal 2018 was $1.8 million , compared to $2.5 million for the same period last fiscal year. Amortization expense for intangible assets during the first nine months of fiscal 2018 was $5.4 million , compared to $7.4 million for the same period last fiscal year. Estimated amortization expense for the remainder of fiscal 2018 and succeeding fiscal years is as follows: fiscal 2018 (remainder), $1.8 million ; fiscal 2019 , $6.7 million ; fiscal 2020 , $6.2 million ; fiscal 2021 , $5.8 million ; fiscal 2022 , $5.6 million ; fiscal 2023 , $5.2 million ; and after fiscal 2023 , $45.8 million . |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Aug. 03, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss ("AOCL"), net of tax, are as follows: (Dollars in thousands) August 3, 2018 August 4, 2017 October 31, 2017 Foreign currency translation adjustments $ 23,467 $ 18,089 $ 21,303 Pension and post-retirement benefits 1,596 6,683 2,012 Cash flow hedging derivative instruments (1,625 ) 1,747 805 Total accumulated other comprehensive loss $ 23,438 $ 26,519 $ 24,120 The components and activity of AOCL for the first nine months of fiscal 2018 are as follows: (Dollars in thousands) Foreign Currency Translation Adjustments Pension and Post-Retirement Benefits Cash Flow Hedging Derivative Instruments Total Balance as of October 31, 2017 $ 21,303 $ 2,012 $ 805 $ 24,120 Other comprehensive (income) loss before reclassifications 2,164 — (5,302 ) (3,138 ) Amounts reclassified from AOCL — (416 ) 2,872 2,456 Net current period other comprehensive (income) loss 2,164 (416 ) (2,430 ) (682 ) Balance as of August 3, 2018 $ 23,467 $ 1,596 $ (1,625 ) $ 23,438 The components and activity of AOCL for the first nine months of fiscal 2017 are as follows: (Dollars in thousands) Foreign Currency Translation Adjustments Pension and Post-Retirement Benefits Cash Flow Hedging Derivative Instruments Total Balance as of October 31, 2016 $ 31,430 $ 6,359 $ 647 $ 38,436 Other comprehensive (income) loss before reclassifications (13,341 ) 324 2,092 (10,925 ) Amounts reclassified from AOCL — — (992 ) (992 ) Net current period other comprehensive (income) loss (13,341 ) 324 1,100 (11,917 ) Balance as of August 4, 2017 $ 18,089 $ 6,683 $ 1,747 $ 26,519 For additional information on the components reclassified from AOCL to the respective line items within net earnings for the company's cash flow hedging derivative instruments, refer to Note 12, Derivative Instruments and Hedging Activities . |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Aug. 03, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The compensation costs related to stock-based awards were as follows: Three Months Ended Nine Months Ended (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Stock option awards $ 1,310 $ 1,431 $ 3,725 $ 4,200 Restricted stock units 666 572 2,321 1,723 Performance share awards 1,047 1,059 2,012 3,230 Unrestricted common stock awards — — 530 538 Total compensation cost for stock-based awards $ 3,023 $ 3,062 $ 8,588 $ 9,691 During the first nine months of fiscal years 2018 and 2017 , 8,388 and 11,412 shares, respectively, of fully vested unrestricted common stock awards were granted to certain members of the company's Board of Directors as a component of their compensation for their service on the Board of Directors and are recorded in selling, general and administrative expense in the Condensed Consolidated Statements of Earnings. No shares of fully vested unrestricted common stock awards were granted during the second or third quarters of fiscal years 2018 and 2017 . Stock Option Awards Under The Toro Company Amended and Restated 2010 Equity and Incentive Plan, as amended and restated (the "2010 plan"), stock options are granted with an exercise price equal to the closing price of the company’s common stock on the date of grant, as reported by the New York Stock Exchange. Options are generally granted to executive officers, other employees, and non-employee members of the company’s Board of Directors on an annual basis in the first quarter of the company’s fiscal year. Options generally vest one-third each year over a three -year period and have a ten -year term. Other options granted to certain employees vest in full on the three -year anniversary of the date of grant and have a ten -year term. Compensation expense equal to the grant date fair value is generally recognized for these awards over the vesting period. Stock options granted to executive officers and other employees are subject to accelerated expensing if the option holder meets the retirement definition set forth in the 2010 plan. In that case, the fair value of the options is expensed in the fiscal year of grant because generally the option holder must be employed after the last day of the fiscal year in which the stock options are granted in order for the options to continue to vest following retirement. Similarly, if a non-employee director has served on the company’s Board of Directors for ten full fiscal years or more, the awards vest immediately upon retirement, and therefore, the fair value of the options granted is fully expensed on the date of the grant. The 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, stock price volatility, and dividend yield must be applied. The expected life is the average length of time in which executive officers, other employees, and non-employee directors are expected to exercise their stock options, which is primarily based on historical exercise experience. The company groups executive officers and non-employee directors for valuation purposes based on similar historical exercise behavior. Expected stock price volatilities are based on the daily movement of the company’s common stock over the most recent historical period equivalent to the expected life of the option. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate over the expected life at the time of grant. Dividend yield is estimated over the expected life based on the company’s historical cash dividends paid, expected future cash dividends and dividend yield, and expected changes in the company’s stock price. The following table illustrates the weighted-average valuation assumptions for options granted in the following fiscal periods: Fiscal 2018 Fiscal 2017 Expected life of option in years 6.04 6.02 Expected stock price volatility 20.58% 22.15% Risk-free interest rate 2.21% 2.03% Expected dividend yield 0.97% 1.01% Per share weighted-average fair value at date of grant $14.25 $12.55 Performance Share Awards Under the 2010 Plan, the company grants performance share awards to executive officers and other employees under which they are entitled to receive shares of the company’s common stock contingent on the achievement of performance goals of the company and businesses of the company, which are generally measured over a three-year period. The number of shares of common stock a participant receives will be increased (up to 2 00 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 per share weighted-average fair value of performance share awards granted during the first quarter of fiscal 2018 and 2017 was $65.40 and $54.52 , respectively. No performance share awards were granted during the second or third quarters of fiscal 2018 and 2017 . Restricted Stock Unit Awards Under the 2010 plan, restricted stock unit awards are generally granted to certain employees that are not executive officers. Occasionally, restricted stock unit awards may be granted, including to executive officers, in connection with hiring, mid-year promotions, leadership transition, or retention. Restricted stock unit awards generally vest one-third each year over a three-year period, or vest in full on the three-year anniversary of the date of grant. Such 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 unit awards, is recognized for these awards over the vesting period. The per share weighted-average fair value of restricted stock unit awards granted during the first nine months of fiscal 2018 and 2017 was $63.47 and $65.86 , respectively. |
Per Share Data
Per Share Data | 9 Months Ended |
Aug. 03, 2018 | |
Earnings Per Share [Abstract] | |
Per Share Data | Per Share Data Reconciliations of basic and diluted weighted-average shares of common stock outstanding are as follows: Three Months Ended Nine Months Ended (Shares in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Basic Weighted-average number of shares of common stock 105,751 108,456 106,457 108,417 Assumed issuance of contingent shares — — 17 17 Weighted-average number of shares of common stock and assumed issuance of contingent shares 105,751 108,456 106,474 108,434 Diluted Weighted-average number of shares of common stock and assumed issuance of contingent shares 105,751 108,456 106,474 108,434 Effect of dilutive securities 2,319 3,001 2,456 3,026 Weighted-average number of shares of common stock, assumed issuance of contingent shares, and effect of dilutive securities 108,070 111,457 108,930 111,460 Incremental shares from options and restricted stock units are computed under the treasury stock method. Options to purchase 740,720 shares of common stock during the third quarter of fiscal 2018 were excluded from diluted net earnings per share because they were anti-dilutive. For the third quarter of fiscal 2017 , there were no options to purchase shares of common stock that were excluded from diluted earnings per share because they were anti-dilutive. Options to purchase 412,302 and 443,003 shares of common stock during the first nine months of fiscal 2018 and 2017 , respectively, were excluded from diluted net earnings per share because they were anti-dilutive. |
Segment Data
Segment Data | 9 Months Ended |
Aug. 03, 2018 | |
Segment Reporting [Abstract] | |
Segment Data | Segment Data The presentation of segment information reflects the manner in which management organizes segments for making operating decisions and assessing performance. On this basis, the company has determined it has three reportable business segments: Professional, Residential, and Distribution. The Distribution segment, which consists of a wholly-owned domestic distributorship, has been combined with the company’s corporate activities and elimination of intersegment revenues and expenses that is shown as "Other" in the following tables due to the insignificance of the segment. The following tables present the summarized financial information concerning the company’s reportable segments: (Dollars in thousands) Three Months Ended August 3, 2018 Professional Residential Other Total Net sales $ 482,494 $ 166,513 $ 6,814 $ 655,821 Intersegment gross sales 6,772 90 (6,862 ) — Earnings (loss) before income taxes $ 97,716 $ 16,002 $ (20,443 ) $ 93,275 (Dollars in thousands) Three Months Ended August 4, 2017 Professional Residential Other Total Net sales $ 468,564 $ 152,127 $ 7,252 $ 627,943 Intersegment gross sales 6,577 78 (6,655 ) — Earnings (loss) before income taxes $ 97,368 $ 11,360 $ (20,345 ) $ 88,383 (Dollars in thousands) Nine Months Ended August 3, 2018 Professional Residential Other Total Net sales $ 1,546,536 $ 521,189 $ 11,622 $ 2,079,347 Intersegment gross sales 23,894 253 (24,147 ) — Earnings (loss) before income taxes 338,607 58,019 (67,800 ) 328,826 Total assets $ 919,800 $ 207,930 $ 407,027 $ 1,534,757 (Dollars in thousands) Nine Months Ended August 4, 2017 Professional Residential Other Total Net sales $ 1,451,269 $ 550,651 $ 14,629 $ 2,016,549 Intersegment gross sales 23,767 270 (24,037 ) — Earnings (loss) before income taxes 314,545 62,965 (71,253 ) 306,257 Total assets $ 852,919 $ 207,452 $ 509,173 $ 1,569,544 The following table presents the details of the Other segment operating loss before income taxes: Three Months Ended Nine Months Ended (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Corporate expenses $ (21,597 ) $ (22,174 ) $ (67,094 ) $ (72,385 ) Interest expense (4,676 ) (4,750 ) (14,214 ) (14,309 ) Other income 5,830 6,579 13,508 15,441 Total Other segment operating loss before income taxes $ (20,443 ) $ (20,345 ) $ (67,800 ) $ (71,253 ) |
Contingencies _ Litigation
Contingencies — Litigation | 9 Months Ended |
Aug. 03, 2018 | |
Loss Contingency [Abstract] | |
Contingencies — Litigation | Contingencies — 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 is currently involved in patent litigation cases, including cases by or against competitors, where it is asserting and defending against claims of patent infringement. Such cases are at varying stages in the litigation process. The company records a liability in its Condensed 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. |
Warranty Guarantees
Warranty Guarantees | 9 Months Ended |
Aug. 03, 2018 | |
Product Warranties Disclosures [Abstract] | |
Warranty Guarantees | Warranty Guarantees The company’s products are warranted to ensure customer confidence in design, workmanship, and overall quality. Warranty coverage is generally for specified periods of time and on select products’ hours of usage, and generally covers parts, labor, and other expenses for non-maintenance repairs. Warranty coverage generally does not cover operator abuse or improper use. An authorized company distributor or dealer must perform warranty work. Distributors and dealers submit claims for warranty reimbursement and are credited for the cost of repairs, labor, and other expenses as long as the repairs meet the company's prescribed standards. Warranty expense is accrued at the time of sale based 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, the historical length of time between the sale and resulting warranty claim, and other minor factors. Special warranty reserves are also accrued for major rework campaigns. Service support outside of the warranty period is provided by authorized distributors and dealers at the customer's expense. The company sells extended warranty coverage on select products for a prescribed period after the original warranty period expires. The changes in accrued warranties were as follows: Three Months Ended Nine Months Ended (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Beginning balance $ 84,268 $ 81,993 $ 74,155 $ 72,158 Warranty provisions 12,038 11,208 39,827 38,003 Warranty claims (13,071 ) (11,381 ) (31,787 ) (29,682 ) Changes in estimates (40 ) (662 ) 1,000 679 Ending balance $ 83,195 $ 81,158 $ 83,195 $ 81,158 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Aug. 03, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Risk Management Objective of Using Derivatives The company is exposed to foreign currency exchange rate risk arising from transactions in the normal course of business, such as sales to third party customers, sales and loans to wholly owned foreign subsidiaries, foreign plant operations, and purchases from suppliers. The company’s primary currency exchange rate exposures are with the Euro, the Australian dollar, the Canadian dollar, the British pound, the Mexican peso, the Japanese yen, the Chinese Renminbi, and the Romanian New Leu against the U.S. dollar, as well as the Romanian New Leu against the Euro. To reduce its exposure to foreign currency exchange rate risk, the company actively manages the exposure of its foreign currency exchange rate risk by entering into various derivative instruments to hedge against such risk, authorized under company policies that place controls on these hedging activities, with counterparties that are highly rated financial institutions. The company’s policy does not allow the use of derivative instruments for trading or speculative purposes. The company has also made an accounting policy election to use the portfolio exception with respect to measuring counterparty credit risk for derivative instruments, and to measure the fair value of a portfolio of financial assets and financial liabilities on the basis of the net open risk position with each counterparty. The company’s hedging activities primarily involve the use of forward currency contracts to hedge most foreign currency transactions, including forecasted sales and purchases denominated in foreign currencies. The company uses derivative instruments only in an attempt to limit underlying exposure from foreign currency exchange rate fluctuations and to minimize earnings and cash flow volatility associated with foreign currency exchange rate fluctuations. Decisions on whether to use such derivative instruments are primarily based on the amount of exposure to the currency involved and an assessment of the near-term market value for each currency. The company recognizes all derivative instruments at fair value on the Condensed Consolidated Balance Sheets as either assets or liabilities. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as a cash flow hedging instrument. Cash Flow Hedging Instruments The company formally documents relationships between cash flow hedging instruments and the related hedged transactions, as well as its risk-management objective and strategy for undertaking cash flow hedging instruments. This process includes linking all cash flow hedging instruments to the forecasted transactions, such as sales to third parties, foreign plant operations, and purchases from suppliers. At the cash flow hedge’s inception and on an ongoing basis, the company formally assesses whether the cash flow hedging instruments have been highly effective in offsetting changes in the cash flows of the hedged transactions and whether those cash flow hedging instruments may be expected to remain highly effective in future periods. Changes in the fair values of the spot rate component of outstanding, highly effective cash flow hedging instruments included in the assessment of hedge effectiveness are recorded in other comprehensive income within AOCL on the Condensed Consolidated Balance Sheets and are subsequently reclassified to net earnings within the Condensed Consolidated Statements of Earnings during the same period in which the cash flows of the underlying hedged transaction affect net earnings. Changes in the fair values of hedge components excluded from the assessment of effectiveness are recognized immediately in net earnings under the mark-to-market approach. The classification of gains or losses recognized on cash flow hedging instruments and excluded components within the Condensed Consolidated Statements of Earnings is the same as that of the underlying exposure. Results of cash flow hedging instruments, and the related excluded components, of sales and foreign plant operations are recorded in net sales and cost of sales, respectively. The maximum amount of time the company hedges its exposure to the variability in future cash flows for forecasted trade sales and purchases is two years . Results of cash flow hedges of intercompany loans are recorded in other income, net as an offset to the remeasurement of the foreign loan balance. When it is determined that a derivative instrument is not, or has ceased to be, highly effective as a cash flow hedge, the company discontinues cash flow hedge accounting prospectively. The gain or loss on the dedesignated derivative instrument remains in AOCL and is reclassified to net earnings within the same Condensed Consolidated Statements of Earnings line item as the underlying exposure when the forecasted transaction affects net earnings. When the company discontinues cash flow hedge accounting because it is no longer probable, but it is still reasonably possible that the forecasted transaction will occur by the end of the originally expected period or within an additional two -month period of time thereafter, the gain or loss on the derivative instrument remains in AOCL and is reclassified to net earnings within the same Condensed Consolidated Statements of Earnings line item as the underlying exposure when the forecasted transaction affects net earnings. However, if it is probable that a forecasted transaction will not occur by the end of the originally specified time period or within an additional two -month period of time thereafter, the gains and losses that were in AOCL are immediately recognized in net earnings within other income, net in the Condensed Consolidated Statements of Earnings. In all situations in which cash flow hedge accounting is discontinued and the derivative instrument remains outstanding, the company carries the derivative instrument at its fair value on the Condensed Consolidated Balance Sheets, recognizing future changes in the fair value within other income, net in the Condensed Consolidated Statements of Earnings. As of August 3, 2018 , the notional amount outstanding of forward contracts designated as cash flow hedging instruments was $243.5 million . Derivatives Not Designated as Cash Flow Hedging Instruments The company also enters into foreign currency contracts that include forward currency contracts to mitigate the remeasurement of specific assets and liabilities on the Condensed Consolidated Balance Sheets. These contracts are not designated as cash flow hedging instruments. Accordingly, changes in the fair value of hedges of recorded balance sheet positions, such as cash, receivables, payables, intercompany notes, and other various contractual claims to pay or receive foreign currencies other than the functional currency, are recognized immediately in other income, net, on the Condensed Consolidated Statements of Earnings together with the transaction gain or loss from the hedged balance sheet position. The following table presents the fair value and location of the company’s derivative instruments on the Condensed Consolidated Balance Sheets: (Dollars in thousands) August 3, 2018 August 4, 2017 October 31, 2017 Derivative assets: Derivatives designated as cash flow hedging instruments Prepaid expenses and other current assets Forward currency contracts $ 2,324 $ 1,998 $ 1,014 Derivatives not designated as cash flow hedging instruments Prepaid expenses and other current assets Forward currency contracts 869 166 27 Total assets $ 3,193 $ 2,164 $ 1,041 Derivative liabilities: Derivatives designated as cash flow hedging instruments Accrued liabilities Forward currency contracts $ — $ 5,173 $ 1,563 Derivatives not designated as cash flow hedging instruments Accrued liabilities Forward currency contracts — 1,481 703 Total liabilities $ — $ 6,654 $ 2,266 The company has entered into an International Swap Dealers Association ("ISDA") Master Agreement with each counterparty that permits the net settlement of amounts owed under their respective contracts. The ISDA Master Agreement is an industry standardized contract that governs all derivative contracts entered into between the company and the respective counterparty. Under these master netting agreements, net settlement generally permits the company or the counterparty to determine the net amount payable or receivable for contracts due on the same date or in the same currency for similar types of derivative transactions. The company records the fair value of its derivative instruments at the net amount in its Condensed Consolidated Balance Sheets. The following table shows the effects of the master netting arrangements on the fair value of the company’s derivative contracts that are recorded in the Condensed Consolidated Balance Sheets: (Dollars in thousands) August 3, 2018 August 4, 2017 October 31, 2017 Derivative assets: Forward currency contracts Gross amounts of recognized assets $ 3,349 $ 2,164 $ 1,055 Gross liabilities offset in the balance sheets (156 ) — (14 ) Net amounts of assets presented in the Consolidated Balance Sheets $ 3,193 $ 2,164 $ 1,041 Derivative liabilities: Forward currency contracts Gross amounts of recognized liabilities $ — $ (6,654 ) $ (2,266 ) Gross assets offset in the balance sheets — — — Net amounts of liabilities presented in the Consolidated Balance Sheets $ — $ (6,654 ) $ (2,266 ) The following tables present the impact and location of the amounts reclassified from AOCL into earnings on the Condensed Consolidated Statements of Earnings and the impact of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the company's derivatives designated as cash flow hedging instruments for the three and nine months ended August 3, 2018 and August 4, 2017 : Three Months Ended Gain (Loss) Reclassified from AOCL into Earnings Gain (Loss) Recognized in OCI on Derivatives (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Derivatives designated as cash flow hedging instruments Forward currency contracts Net sales $ (170 ) $ 153 $ 1,435 $ (3,531 ) Cost of sales 137 96 14 469 Total derivatives designated as cash flow hedging instruments $ (33 ) $ 249 $ 1,449 $ (3,062 ) Nine Months Ended Gain (Loss) Reclassified from AOCL into Earnings Gain (Loss) Recognized in OCI on Derivatives (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Derivatives designated as cash flow hedging instruments Forward currency contracts Net sales $ (3,482 ) $ 2,219 $ 2,625 $ (3,685 ) Cost of sales 610 (1,227 ) (195 ) 2,585 Total derivatives designated as cash flow hedging instruments $ (2,872 ) $ 992 $ 2,430 $ (1,100 ) The company recognized immaterial gains within other income, net in net earnings during the third quarter and first nine months of fiscal 2018 due to the discontinuance of cash flow hedge accounting on certain forward currency contracts designated as cash flow hedging instruments. For the third quarter and first nine months of fiscal 2017 , the company did not discontinue cash flow hedge accounting on any forward currency contracts designated as cash flow hedging instruments. As of August 3, 2018 , the company expects to reclassify approximately $1.6 million of gains from AOCL to earnings during the next twelve months. The following tables present the impact and location of derivative instruments on the Condensed Consolidated Statements of Earnings for the company’s derivatives designated as cash flow hedging instruments and the related components excluded from effectiveness testing: Gain (Loss) Recognized in Earnings on Cash Flow Hedging Instruments August 3, 2018 August 4, 2017 (Dollars in thousands) Net Sales Cost of Sales Other Income, Net Net Sales Cost of Sales Other Income, Net Total Consolidated Statements of Earnings income (expense) amounts in which the effects of cash flow hedging instruments are recorded $ 655,821 $ (422,168 ) $ 5,057 $ 627,943 $ (401,158 ) $ 5,349 Gain (loss) on derivatives designated as cash flow hedging instruments: Forward currency contracts Amount of gain (loss) reclassified from AOCL into earnings (170 ) 137 — 153 96 — Gain (loss) on components excluded from effectiveness testing recognized in earnings based on changes in fair value $ 132 $ (92 ) $ — $ — $ — $ (179 ) Gain (Loss) Recognized in Earnings on Cash Flow Hedging Instruments August 3, 2018 August 4, 2017 (Dollars in thousands) Net Sales Cost of Sales Other Income, Net Net Sales Cost of Sales Other Income, Net Total Consolidated Statements of Earnings income (expense) amounts in which the effects of cash flow hedging instruments are recorded $ 2,079,347 $ (1,317,399 ) $ 12,951 $ 2,016,549 $ (1,279,970 ) $ 12,916 Gain (loss) on derivatives designated as cash flow hedging instruments: Forward currency contracts Amount of gain (loss) reclassified from AOCL into earnings (3,482 ) 610 — 2,219 (1,227 ) — Gain (loss) on components excluded from effectiveness testing recognized in earnings based on changes in fair value $ 31 $ (210 ) $ — $ — $ — $ 190 The following table presents the impact and location of derivative instruments on the Condensed Consolidated Statements of Earnings for the company’s derivatives not designated as cash flow hedging instruments: Three Months Ended Nine Months Ended (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Gain (loss) on derivatives not designated as cash flow hedging instruments Forward currency contracts Other income, net $ 2,111 $ (4,513 ) $ 1,495 $ (3,959 ) Total gain (loss) on derivatives not designated as cash flow hedging instruments $ 2,111 $ (4,513 ) $ 1,495 $ (3,959 ) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Aug. 03, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The company categorizes its assets and liabilities measured at fair value into one of three levels based on the assumptions (inputs) used in valuing the asset or liability. Estimates of fair value for financial assets and financial liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value, and requires certain disclosures. The framework discusses valuation techniques such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. The three levels are defined as follows: Level 1 : Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 : Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 : Unobservable inputs reflecting management’s assumptions about the inputs used in pricing the asset or liability. Recurring Fair Value Measurements The company's derivative instruments consist of forward currency contracts that are measured at fair value on a recurring basis. The fair value of forward currency contracts is determined based on observable market transactions of forward currency prices and spot currency rates as of the reporting date. There were no transfers between levels for the company's recurring fair value measurements during the three and nine months ended August 3, 2018 and August 4, 2017 , or the twelve months ended October 31, 2017 . The following tables present, by level within the fair value hierarchy, the company's financial assets and liabilities that are measured at fair value on a recurring basis as of August 3, 2018 , August 4, 2017 , and October 31, 2017 , according to the valuation technique utilized to determine their fair values: (Dollars in thousands) Fair Value Measurements Using Inputs Considered as: August 3, 2018 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 3,193 $ — $ 3,193 $ — Total assets $ 3,193 $ — $ 3,193 $ — Liabilities: Forward currency contracts $ — $ — $ — $ — Total liabilities $ — $ — $ — $ — (Dollars in thousands) Fair Value Measurements Using Inputs Considered as: August 4, 2017 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 2,164 $ — $ 2,164 $ — Total assets $ 2,164 $ — $ 2,164 $ — Liabilities: Forward currency contracts $ 6,654 $ — $ 6,654 $ — Total liabilities $ 6,654 $ — $ 6,654 $ — (Dollars in thousands) Fair Value Measurements Using Inputs Considered as: October 31, 2017 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 1,041 $ — $ 1,041 $ — Total assets $ 1,041 $ — $ 1,041 $ — Liabilities: Forward currency contracts $ 2,266 $ — $ 2,266 $ — Total liabilities $ 2,266 $ — $ 2,266 $ — Nonrecurring Fair Value Measurements The company measures certain assets and liabilities at fair value on a nonrecurring basis. Assets and liabilities that are measured at fair value on a nonrecurring basis include long-lived assets, goodwill, and indefinite-lived intangible assets, which would generally be recorded at fair value as the result of an impairment charge. Assets acquired and liabilities assumed as part of acquisitions are measured at fair value. Other Fair Value Measurements The carrying values of the company's short-term financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt, including current maturities of long-term debt, when applicable, approximate their fair values due to their short-term nature. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Aug. 03, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The company has evaluated all subsequent events and concluded that no subsequent events have occurred that would require recognition in the Condensed Consolidated Financial Statements or disclosure in the Notes to the Condensed Consolidated Financial Statements. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Aug. 03, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by United States ("U.S.") generally accepted accounting principles ("GAAP") for complete financial statements. Unless the context indicates otherwise, the terms "company," "Toro," "we," "our," or "us" refer to The Toro Company and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated from the unaudited Condensed Consolidated Financial Statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements include all adjustments, consisting primarily of recurring accruals, considered necessary for the fair presentation of the company's Consolidated Financial Position, Results of Operations, and Cash Flows for the periods presented. Since the company’s business is seasonal, operating results for the nine months ended August 3, 2018 cannot be annualized to determine the expected results for the fiscal year ending October 31, 2018 . The company’s fiscal year ends on October 31, and quarterly results are reported based on three-month periods that generally end on the Friday closest to the quarter end. For comparative purposes, however, the company’s second and third quarters always include exactly 13 weeks of results so that the quarter end date for these two quarters is not necessarily the Friday closest to the calendar month end. For further information, refer to the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in the company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017 . The policies described in that report are used for preparing quarterly reports. |
Accounting Policies | In preparing the Condensed Consolidated Financial Statements in conformity with U.S. GAAP, management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. Estimates are used in determining, among other items, sales promotion and incentive accruals, incentive compensation accruals, income tax accruals, inventory valuation, warranty reserves, earn-out liabilities, allowance for doubtful accounts, pension and post-retirement accruals, self-insurance accruals, useful lives for tangible and definite-lived intangible assets, and future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets. These estimates and assumptions are based on management’s best estimates and judgments at the time they are made. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the current economic environment. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with certainty, actual amounts could differ significantly from those estimated at the time the Condensed Consolidated Financial Statements are prepared. Changes in those estimates will be reflected in the Consolidated Financial Statements in future periods. |
United States Tax Reform | On December 22, 2017, the United States enacted Public Law No. 115-97 ("Tax Act"), originally introduced as the Tax Cuts and Jobs Act, to significantly modify the Internal Revenue Code. The Tax Act reduced the U.S. federal corporate tax rate from 35.0 percent to 21.0 percent, created a territorial-type tax system with an exemption for foreign dividends, and imposed a one-time deemed repatriation tax on a U.S. company's historical undistributed earnings and profits of foreign affiliates. The tax rate change is effective January 1, 2018, resulting in a blended statutory tax rate of 23.3 percent for the fiscal year ended October 31, 2018. Among other provisions, the Tax Act also increased expensing for certain business assets, created new taxes on certain foreign sourced earnings, adopted limitations on business interest expense deductions, repealed deductions for income attributable to domestic production activities, and added other anti-base erosion rules. The effective dates for the provisions set forth in the Tax Act vary as to when the provisions will apply to the company. In response to the Tax Act, the U.S. Securities and Exchange Commission ("SEC") provided guidance by issuing Staff Accounting Bulletin No. 118 ("SAB 118"), which has since been codified by the release of Accounting Standards Update ("ASU") No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 . ASU 2018-05 allows companies to record provisional amounts during a measurement period with respect to the impacts of the Tax Act for which the accounting requirements under Accounting Standards Codification ("ASC") Topic 740 are not complete, but a reasonable estimate has been determined. The measurement period under ASU 2018-05 ends when a company has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740, but cannot exceed one year. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Aug. 03, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories were as follows: (Dollars in thousands) August 3, 2018 August 4, 2017 October 31, 2017 Raw materials and work in process $ 105,239 $ 88,440 $ 100,077 Finished goods and service parts 326,059 318,940 295,716 Total FIFO value 431,298 407,380 395,793 Less: adjustment to LIFO value 66,801 58,358 66,801 Total inventories, net $ 364,497 $ 349,022 $ 328,992 |
Goodwill and Other Intangible24
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Aug. 03, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the net carrying amount of goodwill for the first nine months of fiscal 2018 were as follows: (Dollars in thousands) Professional Segment Residential Segment Total Balance as of October 31, 2017 $ 194,464 $ 10,565 $ 205,029 Goodwill acquired 20,393 — 20,393 Translation adjustments (17 ) (36 ) (53 ) Balance as of August 3, 2018 $ 214,840 $ 10,529 $ 225,369 |
Schedule of Finite-Lived Intangible Assets | The components of other intangible assets as of August 3, 2018 were as follows: (Dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Patents $ 18,247 $ (12,103 ) $ 6,144 Non-compete agreements 6,883 (6,776 ) 107 Customer-related 89,745 (22,444 ) 67,301 Developed technology 31,097 (28,165 ) 2,932 Trade names 2,331 (1,760 ) 571 Other 800 (800 ) — Total amortizable 149,103 (72,048 ) 77,055 Non-amortizable - trade names 30,645 — 30,645 Total other intangible assets, net $ 179,748 $ (72,048 ) $ 107,700 The components of other intangible assets as of October 31, 2017 were as follows: (Dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Patents $ 15,162 $ (11,599 ) $ 3,563 Non-compete agreements 6,896 (6,775 ) 121 Customer-related 87,461 (18,940 ) 68,521 Developed technology 30,212 (26,939 ) 3,273 Trade names 2,330 (1,637 ) 693 Other 800 (800 ) — Total amortizable 142,861 (66,690 ) 76,171 Non-amortizable - trade names 27,572 — 27,572 Total other intangible assets, net $ 170,433 $ (66,690 ) $ 103,743 |
Schedule of Indefinite-Lived Intangible Assets | The components of other intangible assets as of August 3, 2018 were as follows: (Dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Patents $ 18,247 $ (12,103 ) $ 6,144 Non-compete agreements 6,883 (6,776 ) 107 Customer-related 89,745 (22,444 ) 67,301 Developed technology 31,097 (28,165 ) 2,932 Trade names 2,331 (1,760 ) 571 Other 800 (800 ) — Total amortizable 149,103 (72,048 ) 77,055 Non-amortizable - trade names 30,645 — 30,645 Total other intangible assets, net $ 179,748 $ (72,048 ) $ 107,700 The components of other intangible assets as of October 31, 2017 were as follows: (Dollars in thousands) Gross Carrying Amount Accumulated Amortization Net Patents $ 15,162 $ (11,599 ) $ 3,563 Non-compete agreements 6,896 (6,775 ) 121 Customer-related 87,461 (18,940 ) 68,521 Developed technology 30,212 (26,939 ) 3,273 Trade names 2,330 (1,637 ) 693 Other 800 (800 ) — Total amortizable 142,861 (66,690 ) 76,171 Non-amortizable - trade names 27,572 — 27,572 Total other intangible assets, net $ 170,433 $ (66,690 ) $ 103,743 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Aug. 03, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Loss (AOCL), Net of Tax | Components of accumulated other comprehensive loss ("AOCL"), net of tax, are as follows: (Dollars in thousands) August 3, 2018 August 4, 2017 October 31, 2017 Foreign currency translation adjustments $ 23,467 $ 18,089 $ 21,303 Pension and post-retirement benefits 1,596 6,683 2,012 Cash flow hedging derivative instruments (1,625 ) 1,747 805 Total accumulated other comprehensive loss $ 23,438 $ 26,519 $ 24,120 |
Schedule of Components and Activity of AOCL | The components and activity of AOCL for the first nine months of fiscal 2017 are as follows: (Dollars in thousands) Foreign Currency Translation Adjustments Pension and Post-Retirement Benefits Cash Flow Hedging Derivative Instruments Total Balance as of October 31, 2016 $ 31,430 $ 6,359 $ 647 $ 38,436 Other comprehensive (income) loss before reclassifications (13,341 ) 324 2,092 (10,925 ) Amounts reclassified from AOCL — — (992 ) (992 ) Net current period other comprehensive (income) loss (13,341 ) 324 1,100 (11,917 ) Balance as of August 4, 2017 $ 18,089 $ 6,683 $ 1,747 $ 26,519 The components and activity of AOCL for the first nine months of fiscal 2018 are as follows: (Dollars in thousands) Foreign Currency Translation Adjustments Pension and Post-Retirement Benefits Cash Flow Hedging Derivative Instruments Total Balance as of October 31, 2017 $ 21,303 $ 2,012 $ 805 $ 24,120 Other comprehensive (income) loss before reclassifications 2,164 — (5,302 ) (3,138 ) Amounts reclassified from AOCL — (416 ) 2,872 2,456 Net current period other comprehensive (income) loss 2,164 (416 ) (2,430 ) (682 ) Balance as of August 3, 2018 $ 23,467 $ 1,596 $ (1,625 ) $ 23,438 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Aug. 03, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Compensation Cost Related to Stock-Based Awards | The compensation costs related to stock-based awards were as follows: Three Months Ended Nine Months Ended (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Stock option awards $ 1,310 $ 1,431 $ 3,725 $ 4,200 Restricted stock units 666 572 2,321 1,723 Performance share awards 1,047 1,059 2,012 3,230 Unrestricted common stock awards — — 530 538 Total compensation cost for stock-based awards $ 3,023 $ 3,062 $ 8,588 $ 9,691 |
Schedule of Assumptions for Options Granted | The following table illustrates the weighted-average valuation assumptions for options granted in the following fiscal periods: Fiscal 2018 Fiscal 2017 Expected life of option in years 6.04 6.02 Expected stock price volatility 20.58% 22.15% Risk-free interest rate 2.21% 2.03% Expected dividend yield 0.97% 1.01% Per share weighted-average fair value at date of grant $14.25 $12.55 |
Per Share Data (Tables)
Per Share Data (Tables) | 9 Months Ended |
Aug. 03, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliations of basic and diluted weighted-average shares of common stock outstanding | Reconciliations of basic and diluted weighted-average shares of common stock outstanding are as follows: Three Months Ended Nine Months Ended (Shares in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Basic Weighted-average number of shares of common stock 105,751 108,456 106,457 108,417 Assumed issuance of contingent shares — — 17 17 Weighted-average number of shares of common stock and assumed issuance of contingent shares 105,751 108,456 106,474 108,434 Diluted Weighted-average number of shares of common stock and assumed issuance of contingent shares 105,751 108,456 106,474 108,434 Effect of dilutive securities 2,319 3,001 2,456 3,026 Weighted-average number of shares of common stock, assumed issuance of contingent shares, and effect of dilutive securities 108,070 111,457 108,930 111,460 |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Aug. 03, 2018 | |
Segment Reporting [Abstract] | |
Summarized Financial Information Concerning Reportable Segments | The following tables present the summarized financial information concerning the company’s reportable segments: (Dollars in thousands) Three Months Ended August 3, 2018 Professional Residential Other Total Net sales $ 482,494 $ 166,513 $ 6,814 $ 655,821 Intersegment gross sales 6,772 90 (6,862 ) — Earnings (loss) before income taxes $ 97,716 $ 16,002 $ (20,443 ) $ 93,275 (Dollars in thousands) Three Months Ended August 4, 2017 Professional Residential Other Total Net sales $ 468,564 $ 152,127 $ 7,252 $ 627,943 Intersegment gross sales 6,577 78 (6,655 ) — Earnings (loss) before income taxes $ 97,368 $ 11,360 $ (20,345 ) $ 88,383 (Dollars in thousands) Nine Months Ended August 3, 2018 Professional Residential Other Total Net sales $ 1,546,536 $ 521,189 $ 11,622 $ 2,079,347 Intersegment gross sales 23,894 253 (24,147 ) — Earnings (loss) before income taxes 338,607 58,019 (67,800 ) 328,826 Total assets $ 919,800 $ 207,930 $ 407,027 $ 1,534,757 (Dollars in thousands) Nine Months Ended August 4, 2017 Professional Residential Other Total Net sales $ 1,451,269 $ 550,651 $ 14,629 $ 2,016,549 Intersegment gross sales 23,767 270 (24,037 ) — Earnings (loss) before income taxes 314,545 62,965 (71,253 ) 306,257 Total assets $ 852,919 $ 207,452 $ 509,173 $ 1,569,544 |
Summary of Components of Loss Before Income Taxes Included in Other Segment | The following table presents the details of the Other segment operating loss before income taxes: Three Months Ended Nine Months Ended (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Corporate expenses $ (21,597 ) $ (22,174 ) $ (67,094 ) $ (72,385 ) Interest expense (4,676 ) (4,750 ) (14,214 ) (14,309 ) Other income 5,830 6,579 13,508 15,441 Total Other segment operating loss before income taxes $ (20,443 ) $ (20,345 ) $ (67,800 ) $ (71,253 ) |
Warranty Guarantees (Tables)
Warranty Guarantees (Tables) | 9 Months Ended |
Aug. 03, 2018 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Warranty Provisions, Claims, and Changes in Estimates | The changes in accrued warranties were as follows: Three Months Ended Nine Months Ended (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Beginning balance $ 84,268 $ 81,993 $ 74,155 $ 72,158 Warranty provisions 12,038 11,208 39,827 38,003 Warranty claims (13,071 ) (11,381 ) (31,787 ) (29,682 ) Changes in estimates (40 ) (662 ) 1,000 679 Ending balance $ 83,195 $ 81,158 $ 83,195 $ 81,158 |
Derivative Instruments and He30
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Aug. 03, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivatives and Consolidated Balance Sheet Location | The following table presents the fair value and location of the company’s derivative instruments on the Condensed Consolidated Balance Sheets: (Dollars in thousands) August 3, 2018 August 4, 2017 October 31, 2017 Derivative assets: Derivatives designated as cash flow hedging instruments Prepaid expenses and other current assets Forward currency contracts $ 2,324 $ 1,998 $ 1,014 Derivatives not designated as cash flow hedging instruments Prepaid expenses and other current assets Forward currency contracts 869 166 27 Total assets $ 3,193 $ 2,164 $ 1,041 Derivative liabilities: Derivatives designated as cash flow hedging instruments Accrued liabilities Forward currency contracts $ — $ 5,173 $ 1,563 Derivatives not designated as cash flow hedging instruments Accrued liabilities Forward currency contracts — 1,481 703 Total liabilities $ — $ 6,654 $ 2,266 |
Schedule of Effects of Master Netting Arrangements on Fair Value of Derivative Contracts Recorded in Consolidated Balance Sheets | The following table shows the effects of the master netting arrangements on the fair value of the company’s derivative contracts that are recorded in the Condensed Consolidated Balance Sheets: (Dollars in thousands) August 3, 2018 August 4, 2017 October 31, 2017 Derivative assets: Forward currency contracts Gross amounts of recognized assets $ 3,349 $ 2,164 $ 1,055 Gross liabilities offset in the balance sheets (156 ) — (14 ) Net amounts of assets presented in the Consolidated Balance Sheets $ 3,193 $ 2,164 $ 1,041 Derivative liabilities: Forward currency contracts Gross amounts of recognized liabilities $ — $ (6,654 ) $ (2,266 ) Gross assets offset in the balance sheets — — — Net amounts of liabilities presented in the Consolidated Balance Sheets $ — $ (6,654 ) $ (2,266 ) |
Schedule of Impact of Derivative Instruments on Consolidated Statements of Earnings for Derivatives Designated as Cash Flow Hedging Instruments | The following tables present the impact and location of the amounts reclassified from AOCL into earnings on the Condensed Consolidated Statements of Earnings and the impact of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the company's derivatives designated as cash flow hedging instruments for the three and nine months ended August 3, 2018 and August 4, 2017 : Three Months Ended Gain (Loss) Reclassified from AOCL into Earnings Gain (Loss) Recognized in OCI on Derivatives (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Derivatives designated as cash flow hedging instruments Forward currency contracts Net sales $ (170 ) $ 153 $ 1,435 $ (3,531 ) Cost of sales 137 96 14 469 Total derivatives designated as cash flow hedging instruments $ (33 ) $ 249 $ 1,449 $ (3,062 ) Nine Months Ended Gain (Loss) Reclassified from AOCL into Earnings Gain (Loss) Recognized in OCI on Derivatives (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Derivatives designated as cash flow hedging instruments Forward currency contracts Net sales $ (3,482 ) $ 2,219 $ 2,625 $ (3,685 ) Cost of sales 610 (1,227 ) (195 ) 2,585 Total derivatives designated as cash flow hedging instruments $ (2,872 ) $ 992 $ 2,430 $ (1,100 ) The following tables present the impact and location of derivative instruments on the Condensed Consolidated Statements of Earnings for the company’s derivatives designated as cash flow hedging instruments and the related components excluded from effectiveness testing: Gain (Loss) Recognized in Earnings on Cash Flow Hedging Instruments August 3, 2018 August 4, 2017 (Dollars in thousands) Net Sales Cost of Sales Other Income, Net Net Sales Cost of Sales Other Income, Net Total Consolidated Statements of Earnings income (expense) amounts in which the effects of cash flow hedging instruments are recorded $ 655,821 $ (422,168 ) $ 5,057 $ 627,943 $ (401,158 ) $ 5,349 Gain (loss) on derivatives designated as cash flow hedging instruments: Forward currency contracts Amount of gain (loss) reclassified from AOCL into earnings (170 ) 137 — 153 96 — Gain (loss) on components excluded from effectiveness testing recognized in earnings based on changes in fair value $ 132 $ (92 ) $ — $ — $ — $ (179 ) Gain (Loss) Recognized in Earnings on Cash Flow Hedging Instruments August 3, 2018 August 4, 2017 (Dollars in thousands) Net Sales Cost of Sales Other Income, Net Net Sales Cost of Sales Other Income, Net Total Consolidated Statements of Earnings income (expense) amounts in which the effects of cash flow hedging instruments are recorded $ 2,079,347 $ (1,317,399 ) $ 12,951 $ 2,016,549 $ (1,279,970 ) $ 12,916 Gain (loss) on derivatives designated as cash flow hedging instruments: Forward currency contracts Amount of gain (loss) reclassified from AOCL into earnings (3,482 ) 610 — 2,219 (1,227 ) — Gain (loss) on components excluded from effectiveness testing recognized in earnings based on changes in fair value $ 31 $ (210 ) $ — $ — $ — $ 190 |
Schedule of Impact of Derivative Instruments on Consolidated Statements of Earnings for Derivatives Not Designated as Hedging Instruments | The following table presents the impact and location of derivative instruments on the Condensed Consolidated Statements of Earnings for the company’s derivatives not designated as cash flow hedging instruments: Three Months Ended Nine Months Ended (Dollars in thousands) August 3, 2018 August 4, 2017 August 3, 2018 August 4, 2017 Gain (loss) on derivatives not designated as cash flow hedging instruments Forward currency contracts Other income, net $ 2,111 $ (4,513 ) $ 1,495 $ (3,959 ) Total gain (loss) on derivatives not designated as cash flow hedging instruments $ 2,111 $ (4,513 ) $ 1,495 $ (3,959 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Aug. 03, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present, by level within the fair value hierarchy, the company's financial assets and liabilities that are measured at fair value on a recurring basis as of August 3, 2018 , August 4, 2017 , and October 31, 2017 , according to the valuation technique utilized to determine their fair values: (Dollars in thousands) Fair Value Measurements Using Inputs Considered as: August 3, 2018 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 3,193 $ — $ 3,193 $ — Total assets $ 3,193 $ — $ 3,193 $ — Liabilities: Forward currency contracts $ — $ — $ — $ — Total liabilities $ — $ — $ — $ — (Dollars in thousands) Fair Value Measurements Using Inputs Considered as: August 4, 2017 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 2,164 $ — $ 2,164 $ — Total assets $ 2,164 $ — $ 2,164 $ — Liabilities: Forward currency contracts $ 6,654 $ — $ 6,654 $ — Total liabilities $ 6,654 $ — $ 6,654 $ — (Dollars in thousands) Fair Value Measurements Using Inputs Considered as: October 31, 2017 Fair Value Level 1 Level 2 Level 3 Assets: Forward currency contracts $ 1,041 $ — $ 1,041 $ — Total assets $ 1,041 $ — $ 1,041 $ — Liabilities: Forward currency contracts $ 2,266 $ — $ 2,266 $ — Total liabilities $ 2,266 $ — $ 2,266 $ — |
Basis of Presentation (Details)
Basis of Presentation (Details) | 1 Months Ended |
Feb. 02, 2018 | |
Accounting Policies [Abstract] | |
Blended statutory tax rate | 23.30% |
Investment in Joint Venture - N
Investment in Joint Venture - Narrative (Details) - USD ($) | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Jul. 31, 2018 | |
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 joint venture for not extending initial term of joint venture | 1 year | ||
Portion owned by Toro (as a percent) | 45.00% | ||
Portion owned by TCFIF (as a percent) | 55.00% | ||
Investment in joint venture | $ 23,000,000 | ||
Maximum aggregate amount of products repossessed by Red Iron and the TCFIF Canadian affiliate, entity has agreed to repurchase in a calendar year | 7,500,000 | ||
Net amount of new receivables financed for dealers and distributors | 1,525,300,000 | $ 1,466,500,000 | |
Summarized financial information for Red Iron | |||
Total assets | $ 463,800,000 | ||
Total liabilities | $ 412,600,000 | ||
Red Iron Acceptance, LLC | TCFIF secured revolving credit facility | |||
Schedule of Equity Method Investments | |||
Maximum borrowing capacity under credit facility | $ 550,000,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands | Aug. 03, 2018 | Oct. 31, 2017 | Aug. 04, 2017 |
Inventory Disclosure [Abstract] | |||
Raw materials and work in process | $ 105,239 | $ 100,077 | $ 88,440 |
Finished goods and service parts | 326,059 | 295,716 | 318,940 |
Total FIFO value | 431,298 | 395,793 | 407,380 |
Less: adjustment to LIFO value | 66,801 | 66,801 | 58,358 |
Total inventories, net | $ 364,497 | $ 328,992 | $ 349,022 |
Goodwill and Other Intangible35
Goodwill and Other Intangible Assets - Changes in Net Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Aug. 03, 2018USD ($) | |
Changes in the net carrying amount of goodwill | |
Goodwill, beginning balance | $ 205,029 |
Goodwill acquired | 20,393 |
Translation adjustments | (53) |
Goodwill, ending balance | 225,369 |
Professional Segment | |
Changes in the net carrying amount of goodwill | |
Goodwill, beginning balance | 194,464 |
Goodwill acquired | 20,393 |
Translation adjustments | (17) |
Goodwill, ending balance | 214,840 |
Residential Segment | |
Changes in the net carrying amount of goodwill | |
Goodwill, beginning balance | 10,565 |
Goodwill acquired | 0 |
Translation adjustments | (36) |
Goodwill, ending balance | $ 10,529 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets - Components of Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | Oct. 31, 2017 | |
Other Intangible Assets | |||||
Gross Carrying Amount | $ 149,103 | $ 149,103 | $ 142,861 | ||
Accumulated Amortization | (72,048) | (72,048) | (66,690) | ||
Net | 77,055 | 77,055 | 76,171 | ||
Non-amortizable - trade names | 30,645 | 30,645 | 27,572 | ||
Total other intangible assets, gross | 179,748 | 179,748 | 170,433 | ||
Total other intangible assets, net | 107,700 | $ 106,258 | 107,700 | $ 106,258 | 103,743 |
Amortization expense for intangible assets | 1,800 | $ 2,500 | 5,400 | $ 7,400 | |
Estimated amortization expense | |||||
Fiscal 2018 (remainder) | 1,800 | 1,800 | |||
Fiscal 2,019 | 6,700 | 6,700 | |||
Fiscal 2,020 | 6,200 | 6,200 | |||
Fiscal 2,021 | 5,800 | 5,800 | |||
Fiscal 2,022 | 5,600 | 5,600 | |||
Fiscal 2,023 | 5,200 | 5,200 | |||
After 2,023 | 45,800 | 45,800 | |||
Patents | |||||
Other Intangible Assets | |||||
Gross Carrying Amount | 18,247 | 18,247 | 15,162 | ||
Accumulated Amortization | (12,103) | (12,103) | (11,599) | ||
Net | 6,144 | 6,144 | 3,563 | ||
Non-compete agreements | |||||
Other Intangible Assets | |||||
Gross Carrying Amount | 6,883 | 6,883 | 6,896 | ||
Accumulated Amortization | (6,776) | (6,776) | (6,775) | ||
Net | 107 | 107 | 121 | ||
Customer-related | |||||
Other Intangible Assets | |||||
Gross Carrying Amount | 89,745 | 89,745 | 87,461 | ||
Accumulated Amortization | (22,444) | (22,444) | (18,940) | ||
Net | 67,301 | 67,301 | 68,521 | ||
Developed technology | |||||
Other Intangible Assets | |||||
Gross Carrying Amount | 31,097 | 31,097 | 30,212 | ||
Accumulated Amortization | (28,165) | (28,165) | (26,939) | ||
Net | 2,932 | 2,932 | 3,273 | ||
Trade names | |||||
Other Intangible Assets | |||||
Gross Carrying Amount | 2,331 | 2,331 | 2,330 | ||
Accumulated Amortization | (1,760) | (1,760) | (1,637) | ||
Net | 571 | 571 | 693 | ||
Other | |||||
Other Intangible Assets | |||||
Gross Carrying Amount | 800 | 800 | 800 | ||
Accumulated Amortization | (800) | (800) | (800) | ||
Net | $ 0 | $ 0 | $ 0 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Aug. 03, 2018 | Oct. 31, 2017 | Aug. 04, 2017 |
Accumulated other comprehensive loss (AOCL) | |||
Foreign currency translation adjustments | $ 23,467 | $ 21,303 | $ 18,089 |
Pension and post-retirement benefits | 1,596 | 2,012 | 6,683 |
Cash flow hedging derivative instruments | (1,625) | 805 | 1,747 |
Total accumulated other comprehensive loss | $ 23,438 | $ 24,120 | $ 26,519 |
Stockholders' Equity - Compon38
Stockholders' Equity - Components and Activity of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Components and activity of accumulated other comprehensive loss | ||||
Balance as of the beginning of the fiscal period | $ (617,092) | |||
Other comprehensive (income) loss before reclassifications | (3,138) | $ (10,925) | ||
Amounts reclassified from AOCL | 2,456 | (992) | ||
Net current period other comprehensive (income) loss | $ 2,839 | $ (9,238) | (682) | (11,917) |
Balance as of the end of the fiscal period | (650,244) | (659,922) | (650,244) | (659,922) |
Accumulated Other Comprehensive Loss | ||||
Components and activity of accumulated other comprehensive loss | ||||
Balance as of the beginning of the fiscal period | 24,120 | 38,436 | ||
Balance as of the end of the fiscal period | 23,438 | 26,519 | 23,438 | 26,519 |
Foreign Currency Translation Adjustments | ||||
Components and activity of accumulated other comprehensive loss | ||||
Balance as of the beginning of the fiscal period | 21,303 | 31,430 | ||
Other comprehensive (income) loss before reclassifications | 2,164 | (13,341) | ||
Amounts reclassified from AOCL | 0 | 0 | ||
Net current period other comprehensive (income) loss | 2,164 | (13,341) | ||
Balance as of the end of the fiscal period | 23,467 | 18,089 | 23,467 | 18,089 |
Pension and Post-Retirement Benefits | ||||
Components and activity of accumulated other comprehensive loss | ||||
Balance as of the beginning of the fiscal period | 2,012 | 6,359 | ||
Other comprehensive (income) loss before reclassifications | 0 | 324 | ||
Amounts reclassified from AOCL | (416) | 0 | ||
Net current period other comprehensive (income) loss | (416) | 324 | ||
Balance as of the end of the fiscal period | 1,596 | 6,683 | 1,596 | 6,683 |
Cash Flow Hedging Derivative Instruments | ||||
Components and activity of accumulated other comprehensive loss | ||||
Balance as of the beginning of the fiscal period | 805 | 647 | ||
Other comprehensive (income) loss before reclassifications | (5,302) | 2,092 | ||
Amounts reclassified from AOCL | 2,872 | (992) | ||
Net current period other comprehensive (income) loss | (2,430) | 1,100 | ||
Balance as of the end of the fiscal period | $ (1,625) | $ 1,747 | $ (1,625) | $ 1,747 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Costs Related to Stock-Based Awards Granted (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Aug. 03, 2018 | May 04, 2018 | Aug. 04, 2017 | May 05, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Stock-Based Compensation | ||||||
Total compensation cost for stock-based awards | $ 3,023 | $ 3,062 | $ 8,588 | $ 9,691 | ||
Stock option awards | ||||||
Stock-Based Compensation | ||||||
Total compensation cost for stock-based awards | 1,310 | 1,431 | 3,725 | 4,200 | ||
Restricted stock units | ||||||
Stock-Based Compensation | ||||||
Total compensation cost for stock-based awards | 666 | 572 | 2,321 | 1,723 | ||
Performance share awards | ||||||
Stock-Based Compensation | ||||||
Total compensation cost for stock-based awards | $ 1,047 | $ 1,059 | 2,012 | 3,230 | ||
Fully vested unrestricted common stock awards granted (in shares) | 0 | 0 | 0 | 0 | ||
Unrestricted common stock awards | ||||||
Stock-Based Compensation | ||||||
Total compensation cost for stock-based awards | $ 0 | $ 0 | $ 530 | $ 538 | ||
Unrestricted common stock awards | Board of Directors | ||||||
Stock-Based Compensation | ||||||
Fully vested unrestricted common stock awards granted (in shares) | 0 | 0 | 0 | 0 | 8,388,000 | 11,412,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Awards (Details) - Stock option awards - $ / shares | 9 Months Ended | |
Aug. 03, 2018 | Aug. 04, 2017 | |
Assumptions for options granted | ||
Expected life of option in years | 6 years 15 days | 6 years 7 days |
Expected stock price volatility (as a percent) | 20.58% | 22.15% |
Risk-free interest rate (as a percent) | 2.21% | 2.03% |
Expected dividend yield (as a percent) | 0.97% | 1.01% |
Weighted-average fair value at date of grant (in dollars per share) | $ 14.25 | $ 12.55 |
Board of Directors | ||
Stock-Based Compensation | ||
Vesting period | 3 years | |
Term of options | 10 years | |
Vesting (as a percent) | 33.33% | |
Certain employees | ||
Stock-Based Compensation | ||
Vesting period | 3 years | |
Term of options | 10 years | |
Non-employee members of Board of Directors | ||
Stock-Based Compensation | ||
Requisite service period for non-employee director after which fair value of options granted is fully expensed on the date of grant | 10 years |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Share Awards and Restricted Stock and Restricted Stock Unit Awards (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||||||
Aug. 03, 2018 | May 04, 2018 | Feb. 02, 2018 | Aug. 04, 2017 | May 05, 2017 | Feb. 03, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Performance share awards | ||||||||
Stock-Based Compensation | ||||||||
Performance goal period | 3 years | |||||||
Weighted-average fair value of awards granted (in dollars per share) | $ 65.40 | $ 54.52 | ||||||
Share awards granted (in shares) | 0 | 0 | 0 | 0 | ||||
Performance share awards | Maximum | ||||||||
Stock-Based Compensation | ||||||||
Vesting (as a percent) | 200.00% | |||||||
Performance share awards | Minimum | ||||||||
Stock-Based Compensation | ||||||||
Vesting (as a percent) | 0.00% | |||||||
Restricted stock and restricted stock unit awards | ||||||||
Stock-Based Compensation | ||||||||
Vesting (as a percent) | 33.33% | |||||||
Vesting period | 3 years | |||||||
Weighted-average fair value of awards granted (in dollars per share) | $ 63.47 | $ 65.86 |
Per Share Data - Reconciliation
Per Share Data - Reconciliations of Basic and Diluted Weighted-Average Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Basic | ||||
Weighted-average number of shares of common stock (in shares) | 105,751,000 | 108,456,000 | 106,457,000 | 108,417,000 |
Assumed issuance of contingent shares (in shares) | 0 | 0 | 17,000 | 17,000 |
Weighted-average number of shares of common stock and assumed issuance of contingent shares (in shares) | 105,751,000 | 108,456,000 | 106,474,000 | 108,434,000 |
Diluted | ||||
Weighted-average number of shares of common stock and assumed issuance of contingent shares (in shares) | 105,751,000 | 108,456,000 | 106,474,000 | 108,434,000 |
Effect of dilutive securities (in shares) | 2,319,000 | 3,001,000 | 2,456,000 | 3,026,000 |
Weighted-average number of shares of common stock, assumed issuance of contingent shares, and effect of dilutive securities (in shares) | 108,070,000 | 111,457,000 | 108,930,000 | 111,460,000 |
Options, restricted stock, and restricted stock units, excluded from the diluted earnings per share (in shares) | 740,720 | 0 | 412,302 | 443,003 |
Segment Data - Summarized Finan
Segment Data - Summarized Financial Information of Reportable Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Aug. 03, 2018USD ($) | Aug. 04, 2017USD ($) | Aug. 03, 2018USD ($)segment | Aug. 04, 2017USD ($) | Oct. 31, 2017USD ($) | |
Financial information concerning reportable segments | |||||
Number of reportable business segments | segment | 3 | ||||
Net sales | $ 655,821 | $ 627,943 | $ 2,079,347 | $ 2,016,549 | |
Intersegment gross sales | 0 | 0 | 0 | 0 | |
Earnings (loss) before income taxes | 93,275 | 88,383 | 328,826 | 306,257 | |
Total assets | 1,534,757 | 1,569,544 | 1,534,757 | 1,569,544 | $ 1,493,787 |
Operating Segments | Professional Segment | |||||
Financial information concerning reportable segments | |||||
Net sales | 482,494 | 468,564 | 1,546,536 | 1,451,269 | |
Intersegment gross sales | 6,772 | 6,577 | 23,894 | 23,767 | |
Earnings (loss) before income taxes | 97,716 | 97,368 | 338,607 | 314,545 | |
Total assets | 919,800 | 852,919 | 919,800 | 852,919 | |
Operating Segments | Residential Segment | |||||
Financial information concerning reportable segments | |||||
Net sales | 166,513 | 152,127 | 521,189 | 550,651 | |
Intersegment gross sales | 90 | 78 | 253 | 270 | |
Earnings (loss) before income taxes | 16,002 | 11,360 | 58,019 | 62,965 | |
Total assets | 207,930 | 207,452 | 207,930 | 207,452 | |
Other | |||||
Financial information concerning reportable segments | |||||
Net sales | 6,814 | 7,252 | 11,622 | 14,629 | |
Intersegment gross sales | (6,862) | (6,655) | (24,147) | (24,037) | |
Earnings (loss) before income taxes | (20,443) | (20,345) | (67,800) | (71,253) | |
Total assets | $ 407,027 | $ 509,173 | $ 407,027 | $ 509,173 |
Segment Data - Components of Lo
Segment Data - Components of Loss before Income Taxes Included in Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Components of the loss before income taxes included in "Other" | ||||
Interest expense | $ (4,676) | $ (4,750) | $ (14,214) | $ (14,309) |
Other income | 5,057 | 5,349 | 12,951 | 12,916 |
Earnings before income taxes | 93,275 | 88,383 | 328,826 | 306,257 |
Other | ||||
Components of the loss before income taxes included in "Other" | ||||
Corporate expenses | (21,597) | (22,174) | (67,094) | (72,385) |
Interest expense | (4,676) | (4,750) | (14,214) | (14,309) |
Other income | 5,830 | 6,579 | 13,508 | 15,441 |
Earnings before income taxes | $ (20,443) | $ (20,345) | $ (67,800) | $ (71,253) |
Warranty Guarantees - Schedule
Warranty Guarantees - Schedule of Changes in Accrued Warranties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Warranty provisions, claims, and changes in estimates | ||||
Beginning balance | $ 84,268 | $ 81,993 | $ 74,155 | $ 72,158 |
Warranty provisions | 12,038 | 11,208 | 39,827 | 38,003 |
Warranty claims | (13,071) | (11,381) | (31,787) | (29,682) |
Changes in estimates | (40) | (662) | 1,000 | 679 |
Ending balance | $ 83,195 | $ 81,158 | $ 83,195 | $ 81,158 |
Derivative Instruments and He46
Derivative Instruments and Hedging Activities - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Aug. 03, 2018USD ($) | Aug. 03, 2018USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Maximum length of time hedged in cash flow hedge | 2 years | |
Cash flow hedge effectiveness measurement period | 2 months | |
Gains from AOCL to earnings | $ 1.6 | |
Forward currency contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, notional amount | $ 243.5 | $ 243.5 |
Derivative Instruments and He47
Derivative Instruments and Hedging Activities - Fair Value and Location of Derivative Instruments (Details) - USD ($) $ in Thousands | Aug. 03, 2018 | Oct. 31, 2017 | Aug. 04, 2017 |
Fair value of derivatives | |||
Derivative assets | $ 3,193 | $ 1,041 | $ 2,164 |
Derivative liabilities | 0 | 2,266 | 6,654 |
Forward currency contracts | |||
Fair value of derivatives | |||
Derivative assets | 3,193 | 1,041 | 2,164 |
Derivative liabilities | 0 | 2,266 | 6,654 |
Forward currency contracts | Derivatives designated as cash flow hedging instruments | Prepaid expenses and other current assets | |||
Fair value of derivatives | |||
Derivative assets | 2,324 | 1,014 | 1,998 |
Forward currency contracts | Derivatives designated as cash flow hedging instruments | Accrued liabilities | |||
Fair value of derivatives | |||
Derivative liabilities | 0 | 1,563 | 5,173 |
Forward currency contracts | Derivatives not designated as cash flow hedging instruments | Prepaid expenses and other current assets | |||
Fair value of derivatives | |||
Derivative assets | 869 | 27 | 166 |
Forward currency contracts | Derivatives not designated as cash flow hedging instruments | Accrued liabilities | |||
Fair value of derivatives | |||
Derivative liabilities | $ 0 | $ 703 | $ 1,481 |
Derivative Instruments and He48
Derivative Instruments and Hedging Activities - Effects of Master Netting Arrangements (Details) - USD ($) $ in Thousands | Aug. 03, 2018 | Oct. 31, 2017 | Aug. 04, 2017 |
Derivative assets: | |||
Net amounts of assets presented in the Consolidated Balance Sheets | $ 3,193 | $ 1,041 | $ 2,164 |
Derivative liabilities: | |||
Net amounts of liabilities presented in the Consolidated Balance Sheets | 0 | (2,266) | (6,654) |
Forward currency contracts | |||
Derivative assets: | |||
Gross amounts of recognized assets | 3,349 | 1,055 | 2,164 |
Gross liabilities offset in the balance sheets | (156) | (14) | 0 |
Net amounts of assets presented in the Consolidated Balance Sheets | 3,193 | 1,041 | 2,164 |
Derivative liabilities: | |||
Gross amounts of recognized liabilities | 0 | (2,266) | (6,654) |
Gross assets offset in the balance sheets | 0 | 0 | 0 |
Net amounts of liabilities presented in the Consolidated Balance Sheets | $ 0 | $ (2,266) | $ (6,654) |
Derivative Instruments and He49
Derivative Instruments and Hedging Activities - Impact and Location of Amounts Reclassified from AOCL and Impacts and Location on OCI(Details) - Cash flow hedging - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Earnings | $ (33) | $ 249 | $ (2,872) | $ 992 |
Gain (Loss) Recognized in OCI on Derivatives | 1,449 | (3,062) | 2,430 | (1,100) |
Forward currency contracts | Net Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Earnings | (170) | 153 | (3,482) | 2,219 |
Gain (Loss) Recognized in OCI on Derivatives | 1,435 | (3,531) | 2,625 | (3,685) |
Forward currency contracts | Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Earnings | 137 | 96 | 610 | (1,227) |
Gain (Loss) Recognized in OCI on Derivatives | $ 14 | $ 469 | $ (195) | $ 2,585 |
Derivative Instruments and He50
Derivative Instruments and Hedging Activities - Impact and Location of Derivative Instruments for Derivatives Designated as Cash Flow Hedging and the Related Components Excluded From Effectiveness Testing (Details) - Cash flow hedging - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Earnings | $ (33) | $ 249 | $ (2,872) | $ 992 |
Net Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) on derivatives not designated as cash flow hedging instruments | 655,821 | 627,943 | 2,079,347 | 2,016,549 |
Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) on derivatives not designated as cash flow hedging instruments | (422,168) | (401,158) | (1,317,399) | (1,279,970) |
Other Income, Net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) on derivatives not designated as cash flow hedging instruments | 5,057 | 5,349 | 12,951 | 12,916 |
Forward currency contracts | Net Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Earnings | (170) | 153 | (3,482) | 2,219 |
Gain (loss) on components excluded from effectiveness testing recognized in earnings based on changes in fair value | 132 | 0 | 31 | 0 |
Forward currency contracts | Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Earnings | 137 | 96 | 610 | (1,227) |
Gain (loss) on components excluded from effectiveness testing recognized in earnings based on changes in fair value | (92) | 0 | (210) | 0 |
Forward currency contracts | Other Income, Net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Reclassified from AOCL into Earnings | 0 | 0 | 0 | 0 |
Gain (loss) on components excluded from effectiveness testing recognized in earnings based on changes in fair value | $ 0 | $ (179) | $ 0 | $ 190 |
Derivative Instruments and He51
Derivative Instruments and Hedging Activities - Impact and Location of Derivatives Not Designated As Cash Flow Hedging Instruments(Details) - Other Income, Net - Derivatives not designated as cash flow hedging instruments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2018 | Aug. 04, 2017 | Aug. 03, 2018 | Aug. 04, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) on derivatives not designated as cash flow hedging instruments | $ 2,111 | $ (4,513) | $ 1,495 | $ (3,959) |
Forward currency contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) on derivatives not designated as cash flow hedging instruments | $ 2,111 | $ (4,513) | $ 1,495 | $ (3,959) |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) - USD ($) | Aug. 03, 2018 | Oct. 31, 2017 | Aug. 04, 2017 |
Assets: | |||
Derivative assets | $ 3,193,000 | $ 1,041,000 | $ 2,164,000 |
Liabilities: | |||
Derivative liabilities | 0 | 2,266,000 | 6,654,000 |
Transfer of assets from level 1 to level 2 | 0 | 0 | 0 |
Transfer of assets from level 2 to level 1 | 0 | 0 | 0 |
Transfer of liabilities from level 1 to level 2 | 0 | 0 | 0 |
Transfer of liabilities from level 2 to level 1 | 0 | 0 | 0 |
Forward currency contracts | |||
Assets: | |||
Derivative assets | 3,193,000 | 1,041,000 | 2,164,000 |
Liabilities: | |||
Derivative liabilities | 0 | 2,266,000 | 6,654,000 |
Measured on a recurring basis | |||
Assets: | |||
Total assets | 3,193,000 | 1,041,000 | 2,164,000 |
Liabilities: | |||
Total liabilities | 0 | 2,266,000 | 6,654,000 |
Measured on a recurring basis | Forward currency contracts | |||
Assets: | |||
Derivative assets | 3,193,000 | 1,041,000 | 2,164,000 |
Liabilities: | |||
Derivative liabilities | 0 | 2,266,000 | 6,654,000 |
Measured on a recurring basis | Level 1 | |||
Assets: | |||
Total assets | 0 | 0 | 0 |
Liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Measured on a recurring basis | Level 1 | Forward currency contracts | |||
Assets: | |||
Derivative assets | 0 | 0 | 0 |
Liabilities: | |||
Derivative liabilities | 0 | 0 | 0 |
Measured on a recurring basis | Level 2 | |||
Assets: | |||
Total assets | 3,193,000 | 1,041,000 | 2,164,000 |
Liabilities: | |||
Total liabilities | 0 | 2,266,000 | 6,654,000 |
Measured on a recurring basis | Level 2 | Forward currency contracts | |||
Assets: | |||
Derivative assets | 3,193,000 | 1,041,000 | 2,164,000 |
Liabilities: | |||
Derivative liabilities | 0 | 2,266,000 | 6,654,000 |
Measured on a recurring basis | Level 3 | |||
Assets: | |||
Total assets | 0 | 0 | 0 |
Liabilities: | |||
Total liabilities | 0 | 0 | 0 |
Measured on a recurring basis | Level 3 | Forward currency contracts | |||
Assets: | |||
Derivative assets | 0 | 0 | 0 |
Liabilities: | |||
Derivative liabilities | $ 0 | $ 0 | $ 0 |