Segment Data

12 Months Ended

Oct. 31, 2022

Segment Reporting [Abstract]

Segment Data

3 Segment Data

The company's businesses are organized, managed, and internally grouped into segments based on similarities in products and services. Segment selection is based on the manner in which the company's chief operating decision maker organizes segments for making operating and investment decisions and assessing performance. The company has identified twelve operating segments and has aggregated certain of those operating segments into two reportable segments: Professional and Residential. The aggregation of the company's segments is based on the segments having the following similarities: economic characteristics, types of products and services, types of production processes, type or class of customers, and method of distribution. The company's remaining activities are presented as "Other" due to their insignificance.

The Professional reportable business segment consists of turf and landscape equipment; rental, specialty, and underground construction equipment; snow and ice management equipment; and irrigation and lighting products. Turf and landscape equipment products include sports fields and grounds mowing and maintenance equipment, golf course mowing and maintenance equipment, landscape contractor mowing equipment, landscape creation and renovation equipment, and other maintenance equipment. Rental, specialty, and underground construction equipment products include horizontal directional drills, walk and ride trenchers, stand-on skid steers, vacuum excavators, stump grinders, turf renovation products, asset locators, pipe rehabilitation solutions, materials handling equipment, and other after-market tools. Snow and ice management equipment products primarily include snowplows; stand-on snow and ice removal equipment, including the related snowplow, snow brush, and snow thrower attachments; salt and sand spreaders; brine ice control products; and related parts and accessories for light and medium duty trucks, utility task vehicles, skid steers, and front-end loaders. Irrigation and lighting products consist of sprinkler heads, electric and hydraulic valves, controllers, computer irrigation central control systems, coupling systems, and ag-irrigation drip tape and hose products, as well as professionally installed landscape lighting products offered through distributors and landscape contractors that also purchase irrigation products. Professional reportable business segment products are marketed and sold mainly through a network of distributors and dealers to professional users engaged in maintaining golf courses, sports fields,

municipal properties, agricultural fields, residential and commercial landscapes, and removing snow and ice, as well as directly to government customers, rental companies, and large retailers.

The Residential reportable business segment primarily consists of walk power mowers, zero-turn riding mowers, snow throwers, replacement parts, and home solutions products, including grass trimmers, hedge trimmers, leaf blowers, blower-vacuums, chainsaws, string trimmers, and underground, hose, and hose-end retail irrigation products sold in Australia and New Zealand. Residential reportable business segment products are marketed and sold to homeowners through a network of distributors and dealers and through a broad array of home centers, hardware retailers, and mass retailers, as well as online.

The company's Other activities consists of the company's wholly-owned domestic distribution company, certain corporate activities, and the elimination of intersegment revenues and expenses. Corporate activities include general corporate expenditures (finance, human resources, legal, information services, public relations, business development, and similar activities) and other unallocated corporate assets and liabilities, such as corporate facilities and deferred tax assets and liabilities.

The accounting policies of the reportable business segments are the same as those described in the summary of significant accounting policies in Note 1, Summary of Significant Accounting Policies and Related Data. The company evaluates the performance of its Professional and Residential reportable business segment results based on earnings from operations plus other income, net. The reportable business segment's operating profits or losses include direct costs incurred at the reportable business segment's operating level plus allocated expenses, such as profit sharing and manufacturing expenses. The allocated expenses represent costs that these operations would have incurred otherwise, but do not include general corporate expenses, interest expense, and income taxes. Operating loss for the company's Other activities includes earnings (loss) from the company's domestic wholly-owned distribution company, certain corporate activities, other income, and interest expense. The company accounts for intersegment gross sales at current market prices.

The following tables present summarized financial information concerning the company's reportable business segments and Other activities (in thousands):

Fiscal Year Ended October 31, 2022	Professional		Residential		Other		Total
Net sales	$	3,429,607	$	1,068,565	$	16,490	$	4,514,662
Intersegment gross sales (eliminations)	33,492		110		(33,602)		—
Earnings (loss) before income taxes	583,993		112,728		(144,175)		552,546
Total assets	2,702,779		501,586		351,633		3,555,998
Capital expenditures	94,260		30,993		18,225		143,478
Depreciation and amortization	$	82,704	$	13,028	$	13,077	$	108,809

Fiscal Year Ended October 31, 2021	Professional		Residential		Other		Total
Net sales	$	2,929,600	$	1,010,077	$	19,907	$	3,959,584
Intersegment gross sales (eliminations)	30,530		44		(30,574)		—
Earnings (loss) before income taxes	507,327		121,516		(129,025)		499,818
Total assets	2,032,350		388,246		515,544		2,936,140
Capital expenditures	79,515		16,730		7,767		104,012
Depreciation and amortization	$	73,747	$	13,470	$	12,099	$	99,316

Fiscal Year Ended October 31, 2020	Professional		Residential		Other		Total
Net sales	$	2,523,452	$	820,745	$	34,613	$	3,378,810
Intersegment gross sales (eliminations)	46,703		80		(46,783)		—
Earnings (loss) before income taxes	426,560		113,669		(133,159)		407,070
Total assets	1,940,844		282,061		630,323		2,853,228
Capital expenditures	49,975		13,669		14,424		78,068
Depreciation and amortization	$	70,460	$	12,607	$	12,548	$	95,615

During fiscal 2022 and 2020, no customers accounted for 10.0 percent or more of total consolidated gross sales. During fiscal 2021, sales to one customer in the Residential segment accounted for 10.6 percent of total consolidated gross sales.

The following table presents the details of operating loss before income taxes for the company's Other activities (in thousands):

Fiscal Years Ended October 31	2022		2021		2020
Corporate expenses	$	(126,271)	$	(112,419)	$	(108,396)
Interest expense	(35,738)		(28,659)		(33,156)
Earnings from wholly-owned domestic distribution companies and other income, net	17,834		12,053		8,393
Total operating loss	$	(144,175)	$	(129,025)	$	(133,159)

The following geographic area data includes net sales based on product shipment destination and long-lived assets, which consist of property, plant and equipment, net, and is based on physical location in addition to allocated capital tooling from U.S. plant facilities (in thousands):

Fiscal Years Ended October 31	United States		International Countries		Total
2022
Net sales	$	3,635,496	$	879,166	$	4,514,662
Long-lived assets	$	505,851	$	65,810	$	571,661
2021
Net sales	$	3,131,954	$	827,630	$	3,959,584
Long-lived assets	$	440,555	$	47,176	$	487,731
2020
Net sales	$	2,700,694	$	678,116	$	3,378,810
Long-lived assets	$	426,378	$	41,541	$	467,919