<PAGE>
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1996
-------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
-------------- ---------------
Commission file number 1-8649
-------------------
A. The Toro Company Investment and Savings Plan
B The Toro Company
8111 Lyndale Avenue South
Minneapolis, MN 55420
REQUIRED INFORMATION
The following financial statements shall be furnished for the plan:
1. An audited statement of financial condition as of the end of the latest two
fiscal years of the plan (or such lesser period as the plan has been in
existence).
2. An audited statement of income and changes in plan equity for each of the
latest three fiscal years of the plan (or such lesser period as the plan has
been in existence).
3. The statements required by Items 1 and 2 shall be prepared in accordance
with the applicable provisions of Article 6A of Regulation S-X (17 CFR
210.6A-01-.6A-05).
4. In lieu of the requirements of Items 1-3 above, plans subject to ERISA may
file plan financial statements and schedules prepared in accordance with the
financial reporting requirements of ERISA. To the extent required by ERISA, the
plan financial statements shall be examined by an independent accountant, except
that the "limited scope exemption" contained in Section 103(a)(3)(C) of ERISA
shall not be available.
Note: A written consent of the accountant is required with respect to the
plan annual financial statements which have been incorporated by reference in a
registration statement on Form S-8 under the Securities Act of 1933. The consent
should be filed as an exhibit to this annual report. Such consent shall be
currently dated and manually signed.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
The Toro Company Savings and Investment Plan
(Name of Plan)
Date June 30, 1997 /s/ Stephen P. Wolfe
------------- --------------------
Stephen P. Wolfe
Vice President - Finance
Chief Financial Officer
<PAGE>
THE TORO COMPANY
INVESTMENT AND SAVINGS PLAN
Financial Statements and Schedule
Year ended December 31, 1996 and the
five-month period ended December 31, 1995
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Plan Administrator
The Toro Company Investment and Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of The Toro Company Investment and Savings Plan (the Plan) as of
December 31, 1996 and 1995, and the related statements of changes in net assets
available for plan benefits for the year ended December 31, 1996 and the
five-month period ended December 31, 1995. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of December
31, 1996 and 1995 and the changes in net assets available for plan benefits for
the year ended December 31, 1996 and the five-month period ended December 31,
1995 in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statement of net assets available for plan
benefits and the statement of changes in net assets available for plan benefits
is presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedule and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE>
2
The Plan has not presented the schedule of reportable transactions (transactions
in excess of 5% of the current value of plan assets at the beginning year).
Disclosure of this information is required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974.
KPMG Peat Marwick LLP
June 24, 1997
<PAGE>
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
December 31, 1996
<TABLE>
<CAPTION>
Putnam Putnam Putnam
Putnam Asset Asset Asset
Growth Allocation Allocation Allocation Putnam
and Fund Fund Fund Overseas
Toro Stable Income (Growth (Balanced (Conservative Growth
Value Fund Fund Portfolio) Portfolio) Portfolio) Fund
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets held by trustee:
Investments $ 37,129,761 28,800,695 6,197,085 8,420,008 4,235,289 4,268,244
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits $ 37,129,761 28,800,695 6,197,085 8,420,008 4,235,289 4,268,244
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
The Toro
Putnam Company
Voyager Common
Fund Stock Total
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets held by trustee:
Investments 27,832,278 17,485,950 134,369,310
- --------------------------------------------------------------------------------------
Net assets available for plan benefits 27,832,278 17,485,950 134,369,310
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
1
<PAGE>
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits
December 31, 1995
<TABLE>
<CAPTION>
Putnam Putnam Putnam
Putnam Asset Asset Asset
Growth Allocation Allocation Allocation Putnam
and Fund Fund Fund Overseas
Toro Stable Income (Growth (Balanced (Conservative Growth
Value Fund Fund Portfolio) Portfolio) Portfolio) Fund
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets held by trustee:
Investments $ 39,398,061 20,781,618 4,404,954 6,534,932 3,165,037 2,781,412
Employer contribution receivable 0 0 0 0 0 0
Employer contribution receivable 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets available for plan benefits $ 39,398,061 20,781,618 4,404,954 6,534,932 3,165,037 2,781,412
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
The Toro
Putnam Company
Voyager Common Unallocated
Fund Stock contributions Total
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets held by trustee:
Investments 21,055,823 16,019,914 0 114,141,751
Employer contribution receivable 0 0 13,582 13,582
Employer contribution receivable 0 0 43,150 43,150
- -----------------------------------------------------------------------------------------------------
Net assets available for plan benefits 21,055,823 16,019,914 56,732 114,198,483
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 1996
<TABLE>
<CAPTION>
Putnam Putnam Putnam
Putnam Asset Asset Asset
Growth Allocation Allocation Allocation Putnam
and Fund Fund Fund Overseas
Toro Stable Income (Growth (Balanced (Conservative Growth
Value Fund Fund Portfolio) Portfolio) Portfolio) Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest and dividends, net of plan expenses $ 1,301,562 2,413,654 327,202 604,156 265,079 57,647
Net appreciation in the fair value of investments 994,110 2,549,264 588,030 604,983 137,106 484,682
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 2,295,672 4,962,918 915,232 1,209,139 402,185 542,329
Employer contributions 384,011 725,942 172,030 201,917 51,918 119,329
Employee contributions 645,683 1,499,130 424,444 429,955 113,006 317,597
Rollover contributions 5,207 31,931 12,209 11,871 10,776 11,621
- ----------------------------------------------------------------------------------------------------------------------------------
Total contributions 1,034,901 2,257,003 608,683 643,743 175,700 448,547
Benefit payments (2,801,479) (824,506) (62,915) (195,030) (65,457) (58,254)
Transfers between funds (2,826,759) 1,570,320 327,212 225,541 556,141 541,765
Transfers from other plans 29,365 53,342 3,919 1,683 1,683 12,445
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
available for plan benefits (2,268,300) 8,019,077 1,792,131 1,885,076 1,070,252 1,486,832
Net assets available for plan benefits:
Beginning of year 39,398,061 20,781,618 4,404,954 6,534,932 3,165,037 2,781,412
- ----------------------------------------------------------------------------------------------------------------------------------
End of year $ 37,129,761 28,800,695 6,197,085 8,420,008 4,235,289 4,268,244
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
The Toro
Putnam Company
Voyager Common Unallocated
Fund Stock contributions Total
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income:
Interest and dividends, net of plan expenses 1,747,782 235,428 0 6,952,510
Net appreciation in the fair value of investments 1,216,708 1,793,168 0 8,368,051
- --------------------------------------------------------------------------------------------------------------
Net investment income 2,964,490 2,028,596 0 15,320,561
Employer contributions 791,504 1,781,729 0 4,228,380
Employee contributions 2,123,524 272,353 0 5,825,692
Rollover contributions 66,833 4,511 0 154,959
- --------------------------------------------------------------------------------------------------------------
Total contributions 2,981,861 2,058,593 0 10,209,031
Benefit payments (806,314) (983,527) 0 (5,797,482)
Transfers between funds 1,314,305 (1,651,793) (56,732) 0
Transfers from other plans 322,113 14,167 0 438,717
- --------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 6,776,455 1,466,036 (56,732) 20,170,827
available for plan benefits
Net assets available for plan benefits:
Beginning of year 21,055,823 16,019,914 56,732 114,198,483
- --------------------------------------------------------------------------------------------------------------
End of year 27,832,278 17,485,950 0 134,369,310
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
Five-month period ended December 31, 1995
<TABLE>
<CAPTION>
Putnam Putnam Putnam
Putnam Asset Asset Asset
Growth Allocation Allocation Allocation Putnam
and Fund Fund Fund Overseas
Toro Stable Income (Growth (Balanced (Conservative Growth
Value Fund Fund Portfolio) Portfolio) Portfolio) Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest and dividends, net of plan expenses $ 1,221,334 1,112,039 192,575 309,307 130,075 54,604
Net appreciation in the fair value of investments 0 1,065,772 89,045 108,071 60,389 101,675
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 1,221,334 2,177,811 281,620 417,378 190,464 156,279
Employer contributions 94,133 152,050 36,922 42,522 10,867 22,339
Employee contributions 350,532 698,337 210,265 213,293 52,778 154,587
Rollover contributions 2,760 8,134 709 0 0 7,808
- ----------------------------------------------------------------------------------------------------------------------------------
Total contributions 447,425 858,521 247,896 255,815 63,645 184,734
Benefit payments (3,263,682) (210,490) (40,184) (24,399) (6,146) (7,280)
Transfers between funds (36,275,502) 10,368,725 (1,264,864) 5,886,138 2,917,074 2,447,679
Transfers from other plans 30,894,325 2,662,790 876,733 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
available for plan benefits (6,976,100) 15,857,357 101,201 6,534,932 3,165,037 2,781,412
Net assets available for plan benefits:
Beginning of period 46,374,161 4,924,261 4,303,753 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
End of period $ 39,398,061 20,781,618 4,404,954 6,534,932 3,165,037 2,781,412
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
The Toro
Putnam Company
Voyager Common Unallocated
Fund Stock contributions Total
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income:
Interest and dividends, net of plan expenses 1,112,269 63,836 0 4,196,039
Net appreciation in the fair value of investments 837,371 2,091,930 0 4,354,253
- --------------------------------------------------------------------------------------------------------------
Net investment income 1,949,640 2,155,766 0 8,550,292
Employer contributions 152,177 175,902 13,582 700,494
Employee contributions 978,443 128,069 43,150 2,829,454
Rollover contributions 29,317 0 0 48,728
- --------------------------------------------------------------------------------------------------------------
Total contributions 1,159,937 303,971 56,732 3,578,676
Benefit payments (202,592) (817,684) 0 (4,572,457)
Transfers between funds 18,148,838 2,027,479 (4,255,567) 0
Transfers from other plans 0 12,350,382 2,029,099 48,813,329
- --------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 0
available for plan benefits 21,055,823 16,019,914 (2,169,736) 56,369,840
Net assets available for plan benefits:
Beginning of period 0 0 2,226,468 57,828,643
- --------------------------------------------------------------------------------------------------------------
End of period 21,055,823 16,019,914 56,732 114,198,483
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
THE TORO COMPANY
INVESTMENT AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1996 and 1995
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF STATEMENT PRESENTATION
Effective August 1, 1995, The Toro Company (the Company) merged four of its
profit sharing and retirement plans (the Toro Company Profit Sharing
Plan and Trust Agreement for Minneapolis Factory Employees, the Toro
Company Profit Sharing Plan and Trust Agreement for Windom Factory
Employees, the Toro Company Profit Sharing Plan and Trust Agreement for
Hourly Employees, and the Toro Company Matching Stock Plan) with the
Toro Company Profit Sharing Plan and Trust Agreement for Office
Employees. As a result of this merger, the net assets of the four plans
were transferred to the Toro Company Profit Sharing Plan and Trust
Agreement for Office Employees on August 1, 1995. The surviving plan,
The Toro Company Profit Sharing Plan and Trust Agreement for Office
Employees, was then renamed and restated as the Toro Company Investment
and Savings Plan (the Plan).
The fiscal year end of the Plan was changed from July 31st to December 31st
effective August 1, 1995. The periods presented in the accompanying
financial statements of the Plan represent the transitional period for
the change in the Plan's fiscal year and includes statements of net
assets available for plan benefits as of December 31, 1996 and 1995 and
statements of changes in net assets available for plan benefits for the
year ended December 31, 1996 and the five-month period ended December
31, 1995.
The accompanying financial statements of the Plan are presented in
accordance with generally accepted accounting principles.
INVESTMENTS
Currently, the Company maintains one fund, the Toro Stable Value Fund,
within the master trust agreement for three profit sharing and
retirement plans which are sponsored by the Company. The three plans
include the Toro Company Profit Sharing Plan and Trust Agreement for
Plymouth Union Employees, the Toro Company Investment and Savings Plan,
and the Toro Company Employee Stock Ownership Plan. The purpose of the
master trust is to pool investment transactions and achieve uniform
rates of return on comparable funds under all plans.
On August 1, 1995, the investment assets of the Toro Company Profit Sharing
Plan and Trust Agreement for Minneapolis Factory Employees, the Toro
Company Profit Sharing Plan and Trust Agreement for Windom Factory
Employees, the Toro Company Profit Sharing Plan and Trust Agreement for
Hourly Employees, and the Toro Company Matching Stock Plan were
transferred to the Plan.
(Continued)
5
<PAGE>
THE TORO COMPANY
INVESTMENT AND SAVINGS PLAN
The Plan's investments were held by Putnam Fiduciary Trust Company (the
Trustee) as of December 31, 1996. Plan investments are invested in the
following investment funds:
(a) The Toro Stable Value Fund is invested in investment contracts with
insurance companies, major banks, and other financial institutions.
The fund's holdings may also include U.S. government agency
mortgage-backed securities, AAA-rated asset-backed securities,
high-quality debt securities, and money market investments.
(b) The Putnam Growth and Income Fund is invested in common stock of
companies with current income and capital growth.
(c) The Putnam Asset Allocation Fund (Growth Portfolio) is invested in
approximately 80% equity securities (primarily common stock) and 20%
debt securities.
(d) The Putnam Asset Allocation Fund (Balanced Portfolio) is invested in
approximately 65% equity securities (primarily common stock) and 35%
debt securities.
(e) The Putnam Asset Allocation Fund (Conservative Portfolio) is
invested in approximately 35% equity securities (primarily common
stock) and 65% debt securities.
(f) The Putnam Overseas Growth Fund is invested primarily in equity
securities of companies located outside North America.
(g) The Putnam Voyager Fund is invested primarily in common stocks of
small to medium sized companies that have the potential for
long-term capital appreciation.
(h) The Toro Company's common stock.
The Plan's share of net investment income from the master trust is
determined by the Trustee based on the ratio of the fair value of the
Plan's equity in the investment funds to the total net assets of the
investment fund at the beginning of the plan year.
The investment securities are stated at market values based upon published
quotations or, in the absence of available quotations, at fair values
determined by the Trustee. Purchases and sales of securities are
recorded on a trade-date basis.
The short term securities of the Toro Stable Value Fund are stated at cost,
which approximates market. The Toro Stable Value Fund includes various
fully benefit responsive investment contracts. These contracts are
valued in the Plan at contract value, which includes cost plus accrued
interest. These contracts have stated interest rates ranging from 5.41%
to 8.98% and maturities ranging from the year 1997 through the year
2001.
(Continued)
6
<PAGE>
THE TORO COMPANY
INVESTMENT AND SAVINGS PLAN
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
(2) DESCRIPTION OF PLAN
The Plan is a defined contribution profit sharing plan sponsored by the
Company. The Company, as administrator of the Plan, absorbs the major
portion of administrative costs and trustee fees of the Plan.
A general description of the Plan is contained in the Plan document dated
July 20, 1995. Participants should refer to the Plan document for more
complete information.
Contributions are made under control of the plan administrator. Unallocated
contributions represent contributions receivable which have not yet been
allocated to the above-mentioned funds in the participants'
predetermined allocation percentages. The allocation of the
participants' and Company contributions to these investment funds is
selected by the participants.
Benefit payments and transfers of participants' interests are made under
control of the Trustee. Company matching contributions, together with
income attributable thereto, will vest at the rate of 20% after one year
of vesting service, with an additional 20% being accumulated annually
thereafter until the participant is 100% vested.
(3) CONTRIBUTIONS
The Company's funding policy is to make annual contributions to the Plan in
amounts determined by a formula set forth in the Plan. The contribution
formula is based on 5.5% of the participants' total compensation earned
during the plan year plus 5.5% of the participants' compensation above
the Social Security taxable wage base as of the beginning of the plan
year. In addition, the Company is required to make a matching
contribution equal to 50% of the participants' contributions to the Plan
not to exceed two percent of the participant's total compensation. The
contribution formula specifies a minimum annual contribution to the
Plan. The Company contribution is allocated to participants based on
compensation earned during the plan year. Investment income is allocated
based on participants' account balances.
The employee contributions consist of salary reduction elections under a
401(k) feature and rollover funds from other qualified plans.
(Continued)
7
<PAGE>
THE TORO COMPANY
INVESTMENT AND SAVINGS PLAN
(4) PARTY-IN-INTEREST TRANSACTIONS
Putnam Fiduciary Trust Company and The Toro Company are parties-in-interest
with respect to the Plan. In the opinion of the Plan's legal counsel,
transactions between the Plan and the Trustee and the Company are exempt
from being considered as "prohibited transactions" under the Employee
Retirement Income Security Act of 1974 (ERISA) Section 408(b).
(5) PLAN TERMINATION
The Company has voluntarily agreed to make contributions to the Plan.
Although the Company has not expressed any intent to terminate the
profit sharing plan agreement, it may do so at any time. Upon
termination of the Plan, the interest of the participants in the Plan
shall fully vest.
(6) INVESTMENTS
Under the terms of the trust agreement, the Trustee manages investment
funds on behalf of the Plan. The Trustee has been granted discretionary
authority concerning the purchases and sales of the investments of the
investment funds. In accordance with the trust agreement, certain assets
of the Plan are held together with assets of other plans sponsored by
the Company in the master trust.
Guaranteed investment contracts of the Toro Stable Value Fund of $2,132,761
issued by Confederation Life Insurance Company (CL) were held as of
December 31, 1996. On August 12, 1994, CL was placed under court
supervised rehabilitation. Beginning August 1, 1995, payments from the
CL annuity contracts have been suspended pending further court action
until such time as the fair market value of the CL annuity contracts can
be determined. The action suspending distributions was consistent with
procedures published by the Internal Revenue Service. Effective August
1, 1995, a loan agreement has been established between the Company and
the Plan providing the Company to fund payments to plan participants (or
their beneficiaries) for 100% of the interests of plan participants in
the CL annuity contracts based on the valuation of the CL annuity
contracts as of August 11, 1994.
The CL annuity contracts are recorded in the accompanying financial
statements and schedule at cost plus accrued interest as of August 11,
1994. No earnings have been recorded in the Plan's financial statements
since August 11, 1994 related to these contracts.
As of the date of this report, the Company is not aware of any principal
loss associated with these investments. Accordingly, no provision for
loss on the CL annuity contracts has been recognized in the accompanying
financial statements.
(Continued)
8
<PAGE>
THE TORO COMPANY
INVESTMENT AND SAVINGS PLAN
The net assets available for benefits of the master trust totaled
$38,396,941 at December 31, 1996.
The net assets available for benefits of the master trust at December 31,
1995 were as follows:
Toro Stable
Value Fund
-----------------------------------------------------------
Investments:
Short term investment funds $824,163
Separate accounts 4,502,914
Guaranteed investment contracts 35,200,461
-----------------------------------------------------------
Total assets available for benefits $40,527,538
-----------------------------------------------------------
-----------------------------------------------------------
The changes in net assets available for benefits of the master trust for
the year ended December 31, 1996 were as follows:
Toro Stable
Value Fund
-----------------------------------------------------------
Investment income (interest and dividends) $2,379,455
Deposits by participating plans 1,085,723
Withdrawals by participating plans (5,595,775)
------------------------------------------------------------
Decrease in net assets (2,130,597)
Net assets available for benefits:
Beginning of year 40,527,538
-----------------------------------------------------------
End of period year $38,396,941
-----------------------------------------------------------
-----------------------------------------------------------
(Continued)
9
<PAGE>
THE TORO COMPANY
INVESTMENT AND SAVINGS PLAN
The changes in net assets available for benefits of the master trust for
the year ended December 31, 1995 were as follows:
Toro Stable
Value Fund
-----------------------------------------------------------
Investment income (interest and dividends) $1,251,849
Deposits by participating plans 3,288,117
Withdrawals by participating plans (42,581,535)
-----------------------------------------------------------
Decrease in net assets (38,041,569)
Net assets available for benefits:
Beginning of year 78,569,107
-----------------------------------------------------------
End of year $40,527,538
-----------------------------------------------------------
-----------------------------------------------------------
The Plan's proportionate share of net investment income from the master
trust is based upon the percentage of the fair value of the Plan's
investment in the master trust's assets. The Plan's percentage
interest in the net assets of the master trust was approximately 97%
as of December 31, 1996.
The following investments represent 5% or more of the Plan's net assets
available for plan benefits as of December 31, 1996:
Toro Stable Value Fund $37,129,761
Putnam Growth and Income Fund 28,800,695
Putnam Asset Allocation Fund (Balanced Portfolio) 8,420,008
Putnam Voyager Fund 27,832,278
The Toro Company common stock 17,485,950
(7) FEDERAL INCOME TAXES
The plan administrator has received a determination letter from the
Internal Revenue Service dated July 18, 1996 stating that the Plan is
qualified under Section 401(a) of the Internal Revenue Code and that the
trust created under the Plan is exempt from federal income taxes under
Section 501(a) of the Code. The plan administrator believes that the
Plan and its related trust continue to qualify under the provisions of
Sections 401(a) and 501(a) of the Code and are exempt from federal
income taxes.
10
<PAGE>
SCHEDULE 1
THE TORO COMPANY
INVESTMENT AND SAVINGS PLAN
Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
Face amount Market
Description or shares Cost value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Toro Stable Value Fund* 36,048,312 $ 36,171,281 37,129,761
Putnam Growth and Income Fund* 1,598,263 25,091,973 28,800,695
Putnam Asset Allocation Fund (Growth Portfolio)* 551,833 5,459,628 6,197,085
Putnam Asset Allocation Fund (Balanced Portfolio)* 802,670 7,739,733 8,420,008
Putnam Asset Allocation Fund (Conservative Portfolio)* 442,097 4,053,325 4,235,289
Putnam Overseas Growth Fund* 283,982 3,698,280 4,268,244
Putnam Voyager Fund* 1,726,568 26,018,927 27,832,278
The Toro Company common stock* 479,067 11,647,495 17,485,950
- --------------------------------------------------------------------------------------------------------------
Total investments $ 119,880,642 134,369,310
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
*Party-in-interest.
See accompanying independent auditor's report.
1
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
The Toro Company:
We consent to the incorporation by reference in the registration statements of
The Toro Company on Forms S-3 and S-8 (File Nos. 333-20901, 33-26268, 33-31586,
33-38308, 33-44668, 33-51563, 33-55550, 33-59563, and 333-4521) of our report
dated June 24, 1997, relating to the statements of net assets available for plan
benefits of The Toro Company Investment and Savings Plan as of December 31,
1996 and 1995, and the related statements of changes in net assets available for
plan benefits for the year ended December 31, 1996 and the five-month period
ended December 31, 1995.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 30, 1997
