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, 1998. 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. 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 of 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) Dated JUNE 29, 1999 /s/ STEPHEN P. WOLFE ------------- ----------------------------- Stephen P. Wolfe Vice President - Finance Chief Financial Officer
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Financial Statements and Schedules December 31, 1998 and 1997
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN TABLE OF CONTENTS PAGE Independent Auditors' Report 1 Statement of Net Assets Available for Plan Benefits December 31, 1998 2 Statement of Net Assets Available for Plan Benefits December 31, 1997 3 Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1998 4 Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1997 5 Notes to Financial Statements 6-10 SCHEDULES: 1--Item 27a--Schedule of Assets Held for Investment Purposes 11 2--Item 27d--Schedule of Reportable Transactions 12
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, 1998 and 1997, and the related statements of changes in net assets available for plan benefits for the years then ended. 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, 1998 and 1997, and the changes in net assets available for plan benefits for the years then ended, 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 schedules of assets held for investment purposes and reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are 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 statements of net assets available for plan benefits and the statements of changes in net assets available for plan benefits are 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 schedules 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. Minneapolis, Minnesota June 18, 1999 1
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Statement of Net Assets Available for Plan Benefits December 31, 1998 PUTNAM PUTNAM PUTNAM PUTNAM GROWTH ASSET ASSET ASSET PUTNAM AND ALLOCATION ALLOCATION ALLOCATION INTERNATIONAL PUTNAM TORO STABLE INCOME GROWTH BALANCED CONSERVATIVE GROWTH VOYAGER VALUE FUND FUND PORTFOLIO PORTFOLIO PORTFOLIO FUND FUND ------------ ------------ ------------ ------------ -------------- ------------- ------------ Assets held by Trustee: Investments $ 38,111,311 47,563,426 10,352,492 11,837,025 5,611,645 7,371,753 49,396,518 ------------ ------------ ------------ ------------ ---------- ---------- ------------ Net assets available for plan benefits $ 38,111,311 47,563,426 10,352,492 11,837,025 5,611,645 7,371,753 49,396,518 ------------ ------------ ------------ ------------ ---------- ---------- ------------ ------------ ------------ ------------ ------------ ---------- ---------- ------------ UAM ICM THE TORO SMALL COMPANY COMPANY COMMON PORTFOLIO STOCK TOTAL --------- ----------- ------------- Assets held by Trustee: Investments 997,323 19,786,357 191,027,850 --------- ----------- ------------- Net assets available for plan benefits 997,323 19,786,357 191,027,850 --------- ----------- ------------- --------- ----------- ------------- See accompanying notes to financial statements. 2
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Statement of Net Assets Available for Plan Benefits December 31, 1997 PUTNAM PUTNAM PUTNAM PUTNAM GROWTH ASSET ASSET ASSET PUTNAM AND ALLOCATION ALLOCATION ALLOCATION INTERNATIONAL PUTNAM TORO STABLE INCOME GROWTH BALANCED CONSERVATIVE GROWTH VOYAGER VALUE FUND FUND PORTFOLIO PORTFOLIO PORTFOLIO FUND FUND ------------ ------------ ----------- ----------- --------------- ------------- ------------ Assets held by Trustee: Investments $ 35,228,096 40,803,566 8,522,425 10,353,353 5,149,130 6,183,358 38,550,901 ------------ ------------ ----------- ----------- --------------- -------------- ------------ Net assets available for plan benefits $ 35,228,096 40,803,566 8,522,425 10,353,353 5,149,130 6,183,358 38,550,901 ------------ ------------ ----------- ----------- --------------- -------------- ------------ ------------ ------------ ----------- ----------- --------------- -------------- ------------ UAM ICM THE TORO SMALL COMPANY COMPANY COMMON PORTFOLIO STOCK TOTAL --------- ------------ ------------- Assets held by Trustee: Investments 933,067 21,618,531 167,342,427 --------- ------------ ------------- Net assets available for plan benefits 933,067 21,618,531 167,342,427 --------- ------------ ------------- --------- ------------ ------------- See accompanying notes to financial statements. 3
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1998 PUTNAM PUTNAM PUTNAM PUTNAM GROWTH ASSET ASSET ASSET PUTNAM AND ALLOCATION ALLOCATION ALLOCATION INTERNATIONAL TORO STABLE INCOME GROWTH BALANCED CONSERVATIVE GROWTH VALUE FUND FUND PORTFOLIO PORTFOLIO PORTFOLIO FUND ------------ ------------ ----------- ------------ --------------- -------------- Investment income: Interest and dividends $ 2,314,535 4,227,851 276,669 383,188 252,514 211,025 Net appreciation (depreciation) in the fair value of investments -- 2,108,021 984,735 871,508 218,065 950,497 ------------ ------------ ----------- ------------ --------------- -------------- Net investment income (loss) 2,314,535 6,335,872 1,261,404 1,254,696 470,579 1,161,522 Employer contributions 908,234 2,051,217 568,067 550,053 146,324 364,789 Employee contributions 632,374 1,900,703 669,693 530,302 155,040 482,106 Rollover contributions 94,728 45,096 217,344 29,334 27,512 28,415 ------------ ------------ ----------- ------------ ----------- ---------- Total contributions 1,635,336 3,997,016 1,455,104 1,109,689 328,876 875,310 Benefit payments (2,189,694) (2,617,671) (626,866) (503,464) (180,593) (295,046) Transfers between funds 1,130,090 (955,357) (259,575) (377,249) (156,347) (553,391) Transfers to other plans (7,052) -- -- -- -- -- ------------ ------------ ----------- ------------ ----------- ---------- Increase (decrease) in net assets available for plan benefits 2,883,215 6,759,860 1,830,067 1,483,672 462,515 1,188,395 Net assets available for plan benefits: Beginning of year 35,228,096 40,803,566 8,522,425 10,353,353 5,149,130 6,183,358 ------------ ------------ ----------- ------------ --------------- -------------- End of year $ 38,111,311 47,563,426 10,352,492 11,837,025 5,611,645 7,371,753 ------------ ------------ ----------- ------------ --------------- -------------- ------------ ------------ ----------- ------------ --------------- -------------- UAM ICM THE TORO PUTNAM SMALL COMPANY VOYAGER COMPANY COMMON FUND PORTFOLIO STOCK TOTAL ----------- ---------- ------------ ------------- Investment income: Interest and dividends 3,319,802 64,104 258,045 11,307,733 Net appreciation (depreciation) in the fair value of investments 6,182,402 (66,301) (6,009,236) 5,239,691 ----------- ---------- ------------ ------------- Net investment income (loss) 9,502,204 (2,197) (5,751,191) 16,547,424 Employer contributions 1,976,871 49,505 2,336,134 8,951,194 Employee contributions 2,490,365 96,412 371,002 7,327,997 Rollover contributions 163,673 19,693 46,898 672,693 ----------- ---------- ------------ ------------- Total contributions 4,630,909 165,610 2,754,034 16,951,884 Benefit payments (2,363,818) (22,048) (1,007,633) (9,806,833) Transfers between funds (923,678) (77,109) 2,172,616 -- Transfers to other plans -- -- -- (7,052) ----------- ---------- ------------ ------------- Increase (decrease) in net assets available for plan benefits 10,845,617 64,256 (1,832,174) 23,685,423 Net assets available for plan benefits: Beginning of year 38,550,901 933,067 21,618,531 167,342,427 ----------- ---------- ------------ ------------- End of year 49,396,518 997,323 19,786,357 191,027,850 ----------- ---------- ------------ ------------- ----------- ---------- ------------ ------------- See accompanying notes to financial statements. 4
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Statement of Changes in Net Assets Available for Plan Benefits Year ended December 31, 1997 PUTNAM PUTNAM PUTNAM PUTNAM GROWTH ASSET ASSET ASSET PUTNAM AND ALLOCATION ALLOCATION ALLOCATION INTERNATIONAL TORO STABLE INCOME GROWTH BALANCED CONSERVATIVE GROWTH VALUE FUND FUND PORTFOLIO PORTFOLIO PORTFOLIO FUND ------------ ------------ ----------- ------------ --------------- -------------- Investment income: Interest and dividends $ 2,409,383 5,194,953 614,187 901,736 351,080 366,127 Net appreciation (depreciation) in the fair value of investments -- 2,405,364 655,061 532,782 173,113 491,044 ------------ ------------ ----------- ------------ --------------- -------------- Net investment income 2,409,383 7,600,317 1,269,248 1,434,518 524,193 857,171 Employer contributions 728,548 1,714,517 397,282 438,193 110,023 280,472 Employee contributions 628,782 1,848,213 656,680 577,950 148,535 466,227 Rollover contributions 35,747 156,330 41,973 19,474 -- 40,531 ------------ ------------ ----------- ------------ --------------- -------------- Total contributions 1,393,077 3,719,060 1,095,935 1,035,617 258,558 787,230 Benefit payments (3,512,548) (1,161,914) (434,374) (419,981) (58,681) (112,130) Transfers between funds (2,005,730) 1,845,408 394,531 (116,888) 189,771 382,843 Transfers from (to) other plans (185,847) -- -- 79 -- -- ------------ ------------ ----------- ------------ --------------- -------------- Increase (decrease) in net assets available for plan benefits (1,901,665) 12,002,871 2,325,340 1,933,345 913,841 1,915,114 Net assets available for plan benefits: Beginning of year 37,129,761 28,800,695 6,197,085 8,420,008 4,235,289 4,268,244 ------------ ------------ ----------- ------------ --------------- -------------- End of year $ 35,228,096 40,803,566 8,522,425 10,353,353 5,149,130 6,183,358 ------------ ------------ ----------- ------------ --------------- -------------- ------------ ------------ ----------- ------------ --------------- -------------- UAM ICM THE TORO PUTNAM SMALL COMPANY VOYAGER COMPANY COMMON FUND PORTFOLIO STOCK TOTAL ------------ --------- ------------ ------------- Investment income: Interest and dividends 2,280,977 62,583 237,729 12,418,755 Net appreciation (depreciation) in the fair value of investments 5,397,599 (55,462) 3,116,442 12,715,943 ------------ --------- ------------ ------------- Net investment income 7,678,576 7,121 3,354,171 25,134,698 Employer contributions 1,784,099 -- 2,286,103 7,739,237 Employee contributions 2,417,775 7,313 335,230 7,086,705 Rollover contributions 138,257 37,731 12,538 482,581 ------------ --------- ------------ ------------- Total contributions 4,340,131 45,044 2,633,871 15,308,523 Benefit payments (995,981) (81) (594,291) (7,289,981) Transfers between funds (304,113) 880,983 (1,266,805) -- Transfers from (to) other plans 10 -- 5,635 (180,123) ------------ --------- ------------ ------------- Increase (decrease) in net assets available for plan benefits 10,718,623 933,067 4,132,581 32,973,117 Net assets available for plan benefits: Beginning of year 27,832,278 -- 17,485,950 134,369,310 ------------ --------- ------------ ------------- End of year 38,550,901 933,067 21,618,531 167,342,427 ----------- ---------- ------------ ------------- ----------- ---------- ------------ ------------- See accompanying notes to financial statements. 5
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Notes to Financial Statements December 31, 1998 and 1997 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying financial statements of The Toro Company Investment and Savings Plan (the Plan) are presented in accordance with generally accepted accounting principles. The accounting records of the Plan are maintained on the accrual basis. (b) INVESTMENTS The Plan's investments are held by Putnam Fiduciary Trust Company (the Trustee). Plan investments are invested in the following investment funds: (a) The Toro Stable Value Fund is a master trust, which invests 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 that pay dividends and have the potential for capital growth. (c) The Putnam Asset Allocation Growth Portfolio is invested in approximately 80% equity securities (primarily common stock) and 20% debt securities. (d) The Putnam Asset Allocation Balanced Portfolio is invested in approximately 65% equity securities (primarily common stock) and 35% debt securities. (e) The Putnam Asset Allocation Conservative Portfolio is invested in approximately 35% equity securities (primarily common stock) and 65% debt securities. (f) The Putnam International 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) United Asset Management--Investment Counselors of Maryland (UAM-ICM) Small Company Portfolio is invested in common stocks of smaller companies that have the potential for long-term capital appreciation. (i) The Toro Company Common Stock--common stock of The Toro Company. The investment securities are stated at fair value based upon published quotations or, in the absence of available quotations, at fair value as determined by the Trustee. Purchases and sales of securities are recorded on a trade-date basis. 6 (Continued)
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Notes to Financial Statements December 31, 1998 and 1997 Currently, The Toro Company (the Company) maintains one master trust, the Toro Stable Value Fund (master trust) for three profit sharing and retirement plans that are sponsored by the Company. The three plans are The Toro Company Profit Sharing Plan 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. 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 fund to the total net assets of the investment fund at the beginning of the plan year. The short term securities of the Toro Stable Value Fund are stated at cost, which approximates fair value. 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 5.31% to 7.41%. These investments have maturities ranging from the year 1999 to the year 2002. (c) ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator 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 all administrative costs and Trustee fees of the Plan, with the exception of investment management fees, which are netted against investment income. A general description of the Plan is contained in the Plan document amended as of June 24, 1998. Participants should refer to the Plan document for more complete information. Contributions are made under control of the plan administrator. The allocation of the participants' and Company contributions to the 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, 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. 7 (Continued)
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Notes to Financial Statements December 31, 1998 and 1997 (3) CONTRIBUTIONS AND PLAN TRANSFERS 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. Transfers to/from other plans represent participant elected transfers to/from other plans. (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. On August 12, 1994, guaranteed investment contracts in the Toro Stable Value Fund of $2,132,761 issued by Confederation Life Insurance Company (CL) was placed under court supervised rehabilitation. Beginning August 1, 1995, payments from the CL annuity contracts were suspended pending further court action until such time as the fair value of the CL annuity contracts could be determined. The actions suspending distributions were consistent with procedures published by the Internal Revenue Service. 8 (Continued)
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Notes to Financial Statements December 31, 1998 and 1997 During 1997, the Toro Stable Value Fund received payments of $2,147,799 related to the CL annuity contracts. The amount in excess of the $2,132,761 ($15,038) was recorded as investment income in 1997. Any further payments received upon final liquidation of these contracts will be recorded as investment income upon receipt. The net assets available for benefits of the master trust at December 31, 1998 were as follows: TORO STABLE VALUE FUND ------------------ Investments: Short-term investment funds $ 22,284,879 Guaranteed investment contracts 17,451,245 ------------------ Total assets available for benefits $ 39,736,124 ------------------ ------------------ The net assets available for benefits of the master trust at December 31, 1997 were as follows: TORO STABLE VALUE FUND ------------------ Investments: Short-term investment funds $ 15,706,617 Guaranteed investment contracts 20,923,182 ------------------ Total assets available for benefits $ 36,629,799 ------------------ ------------------ The changes in net assets available for benefits of the master trust for the year ended December 31, 1998 were as follows: TORO STABLE VALUE FUND ------------------ Investment income (interest and dividends) $ 2,405,039 Deposits by participating plans 1,635,336 Withdrawals by participating plans (934,050) ------------------ Increase in net assets 3,106,325 Net assets available for benefits: Beginning of year 36,629,799 ------------------ End of year $ 39,736,124 ------------------ ------------------ 9 (Continued)
THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Notes to Financial Statements December 31, 1998 and 1997 The changes in net assets available for benefits of the master trust for the year ended December 31, 1997 were as follows: TORO STABLE VALUE FUND ------------------ Investment income (interest and dividends) $ 2,492,450 Deposits by participating plans 1,393,077 Withdrawals by participating plans (5,652,669) ------------------ Decrease in net assets (1,767,142) Net assets available for benefits: Beginning of year 38,396,941 ------------------ End of year $ 36,629,799 ------------------ ------------------ 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, 1998 and 1997, and the Plan's share of net investment income was 96% for the years then ended. The following investments represent 5% or more of the Plan's net assets available for plan benefits as of December 31, 1998 and 1997: 1998 1997 ---------------- --------------- Toro Stable Value Fund* $ 38,111,311 35,228,096 Putnam Growth and Income Fund* 47,563,426 40,803,566 Putnam Asset Allocation Growth Portfolio* 10,352,492 8,522,425 Putnam Asset Allocation Balanced Portfolio* 11,837,025 10,353,353 Putnam Voyager Fund* 49,396,518 38,550,901 The Toro Company Common Stock* 19,786,357 21,618,531 *Party-in-interest (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. (8) SUBSEQUENT EVENT Effective January 1, 1999, the company amended the plan by reducing the eligibility requirement and requiring new employee minimum contributions to the plan unless declined by the employee. 10
SCHEDULE 1 THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Item 27a--Schedule of Assets Held for Investment Purposes December 31, 1998 FACE AMOUNT OR FAIR DESCRIPTION SHARES COST VALUE - ---------------------------------------------------- ------------ ------------ ------------ Toro Stable Value Fund* 32,865,912 $ 33,526,341 $ 38,111,311 Putnam Growth and Income Fund* 2,321,299 40,553,210 47,563,426 Putnam Asset Allocation Growth Portfolio* 759,537 8,266,678 10,352,492 Putnam Asset Allocation Balanced Portfolio* 985,597 10,033,154 11,837,025 Putnam Asset Allocation Conservative Portfolio* 540,621 5,130,084 5,611,645 Putnam International Growth Fund* 383,346 5,739,638 7,371,753 Putnam Voyager Fund* 2,253,491 37,331,068 49,396,518 UAM ICM Small Company Portfolio 40,899 1,109,093 997,323 The Toro Company Common Stock* 694,258 17,838,748 19,786,357 ------------- ------------- Total investments $ 159,528,013 $ 191,027,850 ------------- ------------- ------------- ------------- *Party-in-interest. See accompanying independent auditors' report. 11
SCHEDULE 2 THE TORO COMPANY INVESTMENT AND SAVINGS PLAN Item 27d--Schedule of Reportable Transactions Year ended December 31, 1998 NUMBER OF NUMBER OF PURCHASES SALES FAIR DESCRIPTION OF ASSETS TRANSACTIONS TRANSACTIONS COST VALUE NET GAIN - --------------------------------------- ------------ -------------- ----------- ------------ --------- 5% series of transactions by Rule 2520.103-6(c)(1)(iii): Putnam Growth and Income Fund* 179 221 $ 14,810,316 $ 15,498,662 $ 688,346 Putnam Voyager Fund* 203 190 14,181,507 15,072,402 890,895 Toro Stable Value Fund* 172 241 12,168,157 12,585,298 417,141 *Party-in-interest. See accompanying independent auditors' report. 12
] EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT The Board of Directors The Toro Company: We consent to incorporation by reference in the Registration Statement No. 33-59563 on Form S-8 of The Toro Company of our report dated June 18, 1999, relating to the statements of net assets available for plan benefits of The Toro Company Investment and Savings Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for plan benefits for the years then ended, with fund information for the years ended December 31, 1998 and 1997 and supplemental schedules as of and for the year ended December 31, 1998 which report is included in Form 11-K of The Toro Company. KPMG Peat Marwick LLP Minneapolis, Minnesota June 29, 1999