TORO CO

Other than the below, there have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. Refer to Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations", and Part II, Item 8, Note 1, Summary of Significant Accounting Policies and Related Data, within our Annual Report on Form 10-K for the fiscal year ended October 31, 2024 for a discussion of our critical accounting policies and estimates.

Spartan Trade Name

The company’s Spartan business within its Professional Segment has experienced a decline in customer demand for many of its products, primarily due to the continued macroeconomic caution the company has seen in markets associated with homeowners who prefer professional grade products. As a result, the company has experienced lower sales of Spartan-branded products which narrows the excess between the fair value and carrying value of the Spartan trade name. This indefinite-lived intangible asset may be susceptible to impairment and a continued decline in fair value could trigger a future impairment charge of the Spartan trade name. While the company has and can implement strategies to address this risk, adverse changes in operating conditions in the future, primarily through Spartan’s key selling season which extends through the end of the company's third quarter, could reduce the underlying cash flows used to estimate fair value and may trigger future impairment. The carrying value of the Spartan trade name is $81.1 million and fair value represented 148% of the carrying value as of October 31, 2024.