Stock Split Information

 
Tax Information for 2016 Stock Split
Tax Information for 2012 Stock Split
 

2016 Stock Split Frequently Asked Questions

 

Summary


On August 18, 2016, we announced that our Board of Directors declared a 2-for-1 stock split of our common stock. The stock split is structured as a 100 percent stock dividend. As a result, each shareholder will receive one additional share of Toro common stock for each share held on September 1, 2016, the record date. The distribution date for the new shares will be September 16, 2016, and on or about September 19, 2016, our stock will trade on the NYSE at the new split-adjusted price.

To assist our shareholders in their understanding of the stock split, we are providing answers to the following frequently asked questions:

 
1. Q: What is the effective date of the stock split?
2. Q: How does a 2-for-1 stock split structured as a 100 percent dividend actually work?
3. Q: My shares are held in street name in a brokerage account.  How will I receive my additional shares of Toro stock?
4. Q: I have stock certificates representing my shares or my shares are held in book-entry with Wells Fargo Shareowner Services, Toro's transfer agent.  How will I receive my additional shares of Toro stock?  Will I receive a new stock certificate representing my additional shares?
5. Q: What should I do with my existing Toro stock certificates?
6. Q: Who will send notice of the stock split to me and where will the notice be sent?
7. Q: What happens if I purchase or sell shares of Toro common stock after the record date but on or before the distribution date?
8. Q: I participate in the dividend reinvestment feature of the Direct Stock Purchase Plan offered through Wells Fargo Shareowner Services. How will the stock split impact the current quarter’s reinvestment?
9. Q: Are there any personal income tax consequences to me as a result of the stock split?
10. Q: Does the par value of Toro common stock change as a result of the stock split?
11. Q: Does my percentage of ownership of Toro change as a result of the stock split?
12. Q: How will the stock split affect the number of outstanding shares and the calculation of earnings per share?
13. Q: Who should I contact if I have questions about:
14. Q: Who should I contact if I have other questions about the stock split?
Q: What is the effective date of the stock split?
  A: As mentioned above, there are several key dates:
  • The record date—September 1, 2016—is the date that determines which shareholders are entitled to receive additional shares due to the stock split.
  • The distribution date—on or about September 16, 2016—is the date your split shares are posted to your account and notification is mailed to you.
  • The ex-dividend date—on or about September 19, 2016—is the date when Toro common stock will trade on NYSE at the new split-adjusted price.
Q: How does a 2-for-1 stock split structured as a 100 percent dividend actually work?
  A: A 2-for-1 stock split that is structured in the form of a 100 percent stock dividend means that one new share of Toro common stock will be issued for each share outstanding on September 1, 2016, the record date. After the stock split, since there will be twice as many shares of Toro common stock outstanding, it is expected that each share will be worth one-half of what it was worth immediately prior to the stock split, while the overall value of a shareholder’s investment remains the same.

Here is an example:

Let’s assume that on September 1, 2016, the record date, a shareholder owns 100 shares of Toro common stock and the market price on that date is $90.00 per share. The total value of the shareholder’s investment on that date is $9,000. Let's also assume that our stock price does not move up or down between the record date and the date on which the stock split actually takes place. Immediately after the stock split, the shareholder will own 200 shares of Toro common stock but the market price will be $45.00 per share. Accordingly, the total value of the shareholder’s investment would remain the same at $9,000 until the stock price moves up or down.
Q: My shares are held in street name in a brokerage account.  How will I receive my additional shares of Toro stock?
  A: If you hold your shares of Toro common stock in street name in a brokerage account, your additional shares will be transmitted to your broker automatically with no action required on your part. Your new split-adjusted balance will appear in your brokerage account on or about September 19, 2016, the ex-dividend date. Please contact your broker directly with any questions regarding your brokerage account.
Q: I have stock certificates representing my shares or my shares are held in book-entry with Wells Fargo Shareowner Services, Toro’s transfer agent. How will I receive my additional shares of Toro stock? Will I receive a new stock certificate representing my additional shares?
  A: If you have stock certificates representing your shares of Toro common stock or your shares are held in book-entry form with Wells Fargo Shareowner Services (WFSS), our transfer agent, your additional shares will be distributed in book-entry form into your existing account at WFSS through the Direct Registration System (DRS). This system allows shares to be owned, reported, transferred, and sold electronically, thereby eliminating the need for a physical stock certificate. Since we are using the DRS in connection with the stock split, new stock certificates representing your additional shares will not be issued. Instead, following the September 16, 2016, distribution date, WFSS will send to you a Direct Registration Account Statement with details regarding the additional shares of Toro common stock that you own as a result of the stock split. Please keep this information with any existing stock certificates and other important documents as a record of your share ownership.
Q: What should I do with my existing Toro stock certificates?
  A: You need to keep them—do not destroy them—because your existing stock certificates are still valid.  These stock certificates will continue to represent the same number of shares as shown on their face and should be kept in a secure place.  We encourage you to consider converting any stock certificates to paperless form by depositing them into your book-entry account at Wells Fargo Shareowner Services or into a brokerage account.
Q: Who will send notice of the stock split to me and where will the notice be sent?
  A: If you hold your shares of Toro common stock in street name in a brokerage account, you will be notified by your broker at the address they currently have on file.  Please contact your broker directly to confirm your mailing address or with any questions regarding your brokerage account.  
If you have stock certificates or hold your shares directly with Wells Fargo Shareowner Services (WFSS), you will be notified by WFSS at the address they currently have on file.  It is very important that you ensure that your address on file with WFSS is current at all times.  If WFSS is unable to contact you with shareholder notices because your address is outdated, you run the risk of having your shares of Toro common stock escheat to the state of your last known residence in accordance with state unclaimed property laws.  You may verify your address by logging into your WFSS account information at shareowneronline.com or otherwise contacting WFSS using the contact information set forth below.
Q: What happens if I purchase or sell shares of Toro common stock after the record date but on or before the distribution date?
  A: Shareholders are generally entitled to receive shares of Toro common stock from the stock split if they own or purchase shares up to and including the September 16, 2016, distribution date. More specifically:
  • If you purchase shares between the September 1, 2016 record date and the September 16, 2016 distribution date, you are generally entitled to receive the shares from the stock split.
  • If you sell shares between the September 1, 2016 record date and the September 16, 2016 distribution date, you are not entitled to the split shares on the shares you sold.
Q: I participate in the dividend reinvestment feature of the Direct Stock Purchase Plan offered through Wells Fargo Shareowner Services. How will the stock split impact the current quarter’s reinvestment?
  A: As a participant in the dividend reinvestment feature for shares held in your name through Wells Fargo Shareowner Services (WFSS), the number of shares in your dividend reinvestment account as of September 1, 2016, the record date, including fractional shares, will double as a result of the stock split. A statement reflecting that adjustment will be mailed to you by WFSS on or about the September 16, 2016 distribution date.
Q: Are there any personal income tax consequences to me as a result of the stock split?
  A: From a U.S. federal income tax standpoint, the stock split is not a taxable event and there are no resulting tax consequences to U.S. residents. The tax basis of each share of Toro common stock owned after the stock split will be one-half of what it was before the split. For example, if a shareholder owned 100 shares of Toro common stock having a tax basis of $40 per share before the stock split, after the stock split the shareholder would own 200 shares having a tax basis of $20 per share. Shareholders, and particularly foreign residents, should consult with their personal tax advisor regarding their specific tax circumstances.
Q: Does the par value of Toro common stock change as a result of the stock split?
  A: No, the par value of Toro common stock will remain at $1.00 per share.
Q: Does my percentage of ownership of Toro change as a result of the stock split?
  A: No, the stock split will not change your percentage of ownership in Toro.
Q: How will the stock split affect the number of outstanding shares and the calculation of earnings per share?
  A: This is a 2-for-1 stock split and, as such, the number of outstanding shares of Toro common stock will double. Earnings per share therefore will be one-half what they otherwise would have been since our net earnings will be divided into twice as many outstanding shares.
Q: Who should I contact if I have questions about:
  • Change of address
  • Lost stock certificates
  • Transfer of stock to another person
  • Deposit of my stock certificate(s) to book-entry
  • Additional administrative services
  • Deposit of my stock certificate(s) to book-entry
  A: You should contact Wells Fargo Shareowner Services, our transfer agent, at the following:

Wells Fargo Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100

Mail:
P.O. Box 64854
St. Paul, MN 55164-0854
Telephone: (800) 468-9716 or (651) 450-4064

Online:
www.shareowneronline.com
Q: Who should I contact if I have other questions about the stock split?
 

A: Please contact us at the following:

The Toro Company
Attn: Investor Relations
8111 Lyndale Avenue South
Bloomington, MN 55420-1196
Telephone: (800) 348-2424 or (952) 888-8801 (Please ask for Investor Relations)
E-mail: invest@thetorocompany.com