The Toro Company8111 Lyndale Avenue South Bloomington, MN 55420-1196 952-888-8801www.thetorocompany.com2022 Annual ReportCHARGING FORWARDThe Toro Company2022 Toro AR Cover.indd 1-32022 Toro AR Cover.indd 1-31/16/23 9:42 AM1/16/23 9:42 AM At The Toro Company, our world advances through the vision of those who build, shape and care for it.A hard-working group of people who sees opportunities to enrich our world with beauty and utility.The ambition to turn these possibilities into realities is what unites us — colleagues and customers, partners, and communities.And it is what drives us to transform how a local business can cut and plow its way to growth.How a community can spring to life with revitalized infrastructure.How we make more of our world while demanding less of it.How green spaces can bring generations of families together, host epic sports rivalries, and instillcommunity pride.We expand what’s possible through products and technology that are impeccably engineered andgrounded in a century of solving real human needs. And we do it all with breakthroughs that solvebigger, tougher, more impactful challenges — each one uncovered and understood throughrelationships that endure season after season.Together, we seize the opportunities that turn aspirations for the world into new realities that impact lives and livelihoods.Increase battery and hybrid product sales to at least 20% of total adjusted net sales (motorized product sales) by fiscal 2025.Reduce absolute Scope 1 and 2 greenhouse gas emissions by at least 15% by fiscal 2025 as compared to fiscal 2019.Increase the number of women and racial and ethnic minorities in leadership positions by at least 20% by fiscal 2025 as compared to fiscal 2021.Sustainability is deeply rooted in our company purpose, actions and strategic business priorities. It is core to how we invest in our people, serve our customers and communities, and compete and win in the right way. To facilitate change and advance growth opportunities, we recently established three performance goals.The Ventrac® 4520 compact tractor has become a top choice for versatility among grounds professionals. Combining the optimal blend of power and agility with over 30+ commercial attachments, the 4520 tractor elevates the Ventrac experience to the next level.The BOSS® SR MAG has everything contractors need to dominate the snow and ice. Inspired by the innovative Snowrator, the powerful and versatile SR MAG brings an unprecedented level of performance to get sidewalk jobs done faster and more efficiently with a range of implements to tackle what winter brings. Big, bad and powerful. That’s the Toro® TITAN® MAX zero-turn mower. Built on a commercial-worthy blue print with iron forged features and durability, this machine is designed to tackle acres upon acres of lawn or tough, rugged terrain in virtually any mowing conditions.The Spartan® RZ Series performs like commercial-grade zero-turn mowers with a residential price. Packed with standard features and the Spartan signature styling, these machines deliver on performance and comfort to meet the needs of homeowners and small acreage owners.Enhancing utility contractors’ productivity while drilling through the toughest conditions including solid rock, the Ditch Witch® AT32 All-Terrain horizontal directional drill delivers maximum power and productivity in a compact footprint. Truly in a class of its own, the AT32 gives contractors more of what they want to complete more jobs with increased efficiency and profitability.When you combine Exmark's most productive zero-turn mower – the Lazer Z® X-Series – with its innovative features and large deck sizes, you get the ultimate commercial zero-turn mower experience. To meet the needs of the most demanding landscape professionals, it's the perfect combination of power, productivity, and durability.2022 Toro AR Cover.indd 4-62022 Toro AR Cover.indd 4-61/18/23 5:14 AM1/18/23 5:14 AM *This metric represents a non-GAAP financial metric and a reconciliation of this non-GAAP financial metric can be found in our Investor Presentation, which is available in the Investor section at www.thetorocompany.com.To Our Valued Shareholders,Fiscal 2022 was another record year for The Toro Company driven by continued demand for our innovative products and the addition of the Intimidator Group. With top line growth of 14%, we achieved $4.51 billion in net sales, exceeding the $4 billion mark for the first time in company history. Full-year reported diluted EPS increased 11% to $4.20 and adjusted diluted EPS* increased 16% to $4.20 over the prior year. Finally, we were pleased to return $266 million to our shareholders through regular dividend payments and share repurchases.During a very dynamic environment, we realized the benefit of our pricing and productivity initiatives, supported by strong demand, particularly in key professional markets. We began to see improvements in supply chain and manufacturing efficiencies which also had a favorable impact. All of which helped us advance our strategic priorities, while delivering meaningful value for our shareholders.FISCAL 2022 KEY HIGHLIGHTSOur professional segment delivered strong results, with segment net sales up 17% from fiscal 2021 driven by net price realization and the Intimidator Group acquisition. We capitalized on broad-based demand, most notably in our underground and specialty construction and golf and grounds businesses, due largely to our ability to produce equipment in what continued to be a dynamic supply chain environment.Residential segment net sales were up nearly 6% over the prior year further building on incredible segment net sales growth of 23% in fiscal 2021 and 24% in fiscal 2020. Expanded distribution, innovative new product introductions and refreshed marketing strategies fueled our growth trajectory. Net price realization and increased demand for zero-turn riding mowers and snow products also contributed to our strong performance.ROBUST DEMANDDemand for our innovative solutions and technologies remained elevated across our portfolio. Utility construction, including broadband and alternative power buildouts, was strong in fiscal 2022 and is expected to continue with public and private infrastructure investments providing a tailwind.Richard M. Olson, Chairman and Chief Executive OfficerOpportunity in Infrastructure Within our underground and specialty construction businesses, we expect increased investments in public and private infrastructure to continue. According to the American Society of Civil Engineers, it is estimated there is a water main break every two minutes and 6 billion gallons of treated water are lost each day in the U.S. alone. Driven by the need to address aging infrastructure and improve broadband and alternative power buildouts, we believe that our comprehensive equipment lineup with solutions for new installations, broadband expansion, utility inspection and rehabilitation positions us well.Enterprise Strategic PrioritiesAccelerating Profitable GrowthEmpowering PeopleDriving Productivity & Operational ExcellenceAdvancing Our Strategic Priorities2022_AR_Text_i.indd 12022_AR_Text_i.indd 11/19/23 12:43 AM1/19/23 12:43 AM Golf course budgets remain healthy with golf rounds played in the United States in 2022 well above pre-pandemic levels. We were pleased to be named the official equipment and irrigation partner for Asian Tour Destinations, an exclusive network of world-class golfing venues in Asia. Our high-quality products, exceptional service network and legacy of trusted relationships helped secure this designation. Building on this legacy of excellence, we continue to be well positioned to serve our customers with both equipment and irrigation solutions.Our snow and ice management businesses enjoyed a strong start this winter with early storm activity that drove orders. New product launches and portfolio expansion are enhancing our leadership in this important market.The landscape contractor market continues to grow with attractive opportunities to expand our product offerings. Customers are seeking solutions that drive productivity and efficiency, while also reducing exhaust emissions. This includes our recently introduced Toro and Exmark commercial-grade, battery-powered stand-on and zero-turn mowers that have been well received by contractors with expected momentum to continue in the year ahead. We believe our extensive channel paired with our strong brands – Exmark, Toro and Spartan Mowers – will continue to enable us to increase our leadership position in the fast-growing zero-turn mower market.In the residential business, we saw demand return to more typical seasonal trends, while still benefitting from regular replacement cycles and broader customer reach through our expanded channel partners. We continue to build out our suite of products, including the latest additions to our Flex Force 60V battery product lineup. We also will be entering the autonomous homeowner market with our robotic mower introduced in fiscal 2022. STRENGTHENING MARKET LEADERSHIP WITH NEW TECHNOLOGIESWe are committed to expanding our suite of battery electric and smart-connected solutions across our portfolio in response to customer needs. Recent introductions of autonomous products promoting industry-first features in our golf and residential businesses are appealing to many customers. Not only do these potential solutions help customers achieve their emission reduction goals, but they also enable them to deploy labor prudently and maximize productivity. We are excited about the technology transformations that are happening in our industries.BALANCE SHEET STRENGTH AND PRUDENT CAPITAL DEPLOYMENTWe allocated capital prudently to fund new product investments, expand capacity and leverage advanced manufacturing technologies to fuel sustainable long-term growth. We continue to prioritize investments in research and development, transformational capital projects and compelling acquisitions. Leveraging Liquid Deicing TechnologyApplication efficiencies and environmental opportunities make liquid deicing an appealing proposition for snow and ice contractors. The addition of Voigt Smith Innovation products in fiscal 2022 strategically enables BOSS Snowplow to further strengthen its position in the snow and ice management category. As municipalities and government agencies look to reduce salt usage, liquid deicing allows contractors to reduce the amount of salt used by two-thirds to treat surfaces while providing a more consistent application.Partners in Excellence: 150th Open ChampionshipAs the exclusive equipment and irrigation partner to St Andrews Links Trust (SALT) in Scotland, we were honored to help support the team in their preparation for hosting the historic 150th Open Championship in 2022. With a relationship that spans more than 22 years, The Toro Company and SALT share a deep commitment to excellence and advancing sustainability through best practice and new technologies. As SALT furthers its efforts to have a positive impact on the environment, we are grateful for their trust in our many battery and hybrid equipment technologies and water-saving irrigation solutions to care for their seven courses.2022_AR_Text_i.indd 22022_AR_Text_i.indd 21/18/23 7:46 PM1/18/23 7:46 PM The addition of the Intimidator Group in fiscal 2022 positioned us to expand our geographic reach and market leadership in the large and rapidly growing zero-turn mower market. The addition of the Spartan brand to our already strong Toro and Exmark brands enables us to further leverage technology investments, as well as procurement and manufacturing efficiencies. We continued our history of successful acquisitions this year and will continue to look for compelling opportunities to enhance our portfolio, while maintaining a disciplined approach to capital allocation. NEW LEADERSHIP APPOINTMENTSAs we continue to position The Toro Company for a strong, sustainable future we welcomed three talented leaders to our enterprise leadership team in fiscal 2022. We were pleased to have Kevin Carpenter join TTC as vice president, global operations and integrated supply chain; Margeaux King as vice president, human resources; and Angie Drake, who joined TTC through our previous acquisition of Charles Machine Works, as vice president, finance.COMMITMENT TO SUSTAINABILITYOur team and channel partners served our customers while also supporting each other and our communities. We delivered record net sales and earnings, while continuing to invest in future growth, delivering value to our shareholders and maintaining financial agility. We also furthered our long-standing commitment to advancing our environmental, social and governance impact by establishing specific performance goals in our latest sustainability report. Sustainability is engrained in our approach to how we do business and we were honored to receive our eighth consecutive EPA WaterSense® Award. We value our association with the U.S. Environmental Protection Agency as a means to extend our outreach and education around the efficient use of water.LONG-TERM SUSTAINABLE GROWTHLooking ahead, we believe we are well-positioned in each of the attractive end markets we serve with innovative product offerings, trusted brands and an outstanding service network. We are encouraged by the momentum we have generated which we believe will result in continued market leadership and healthy demand for our products. We will continue to prioritize technology investments in alternative power, smart-connected and autonomous solutions. These elements combined with prudent capital allocation and operational excellence, should once again enable us to deliver favorable results for our stakeholders. I would like to thank our employees and channel partners for their unwavering commitment to serving our customers and helping them achieve their goals. I would also like to acknowledge the continued support of our shareholders. Thank you for placing your confidence and trust in The Toro Company.Sincerely,Richard M. OlsonChairman and Chief Executive Officer•Zero exhaust emissions•Quiet operation•Easier maintenance•Addressing regulationsAlternative Power & Electrification•Addressing labor shortages•Improvingconsistency of resultsAutonomous Solutions•Driving productivity•Loyalrelationships•Data/customer insights•Subscription servicesSmart-Connected ProductsEngaging Our Industry in SustainabilityOur focus on sustainability extends beyond our products and operations to also include the way we invest in our people, serve customers and partner with community and industry leaders. In fiscal 2022, we hosted our first Sustainability Lab to share ideas and facilitate collaboration between our teams and urban park systems across North America. Through this initiative, we hope to gain a deeper understanding of how agencies and manufacturers can work together to better support sustainable solutions and best practices for the future.2022•Strengthen professional segment•Complementary Spartan brandin attractive zero-turnmower market•Procurement and design synergies within portfolio2022_AR_Text_i.indd 32022_AR_Text_i.indd 31/19/23 12:43 AM1/19/23 12:43 AM FINANCIAL HIGHLIGHTS Fiscal years ended October 31 S E L A S T E N 2 2 0 2 $4.51 BILLION 14.0% vs. 2021 8 1 0 2 9 1 0 2 0 2 0 2 1 2 0 2 ADJUSTED NET EARNINGS1 $444.2M 13.1% vs. 2021 ADJUSTED NET EARNINGS AS A PERCENTAGE OF NET SALES1 9.8% ADJUSTED DILUTED EPS1 $4.20 16.0% vs. 2021 CASH DIVIDENDS PAID ON COMMON STOCK OUTSTANDING $125.7M SHARE REPURCHASES $140.0M RETURN ON AVERAGE INVESTED CAPITAL2 19.5% AVERAGE NET WORKING CAPITAL AS A PERCENTAGE OF NET SALES3 17.1% R & D INVESTMENT $155.6M 10.4% vs. 2021 NET SALES BY SEGMENT ¢ Professional 76.0% ¢ Residential 23.7% ¢ Other 0.3% NET SALES BY PRODUCT ¢ Equipment 89.7% ¢ Irrigation 10.3% NET SALES BY GEOGRAPHICAL LOCATION ¢ United States 80.5% ¢ International 19.5% 1 This Annual Report includes certain non-GAAP financial measures. Please refer to the disclosure, entitled “Non-GAAP Financial Measures,” which begins on page 42 of the Form 10-K. 2 This metric represents a non-GAAP financial metric and a reconciliation of this non-GAAP financial metric can be found in our Investor Presentation, which is available in the Investor section at www.thetorocompany.com. 3 Defined as average net accounts receivable plus average net inventory, less average accounts payable as a percentage of net sales for a 12-month period. 2022_AR_Text_i.indd 4 2022_AR_Text_i.indd 4 1/18/23 7:46 PM 1/18/23 7:46 PM 2022_AR_Text.indd 5 2022_AR_Text.indd 5 1/9/23 1:52 PM 1/9/23 1:52 PM 2022_AR_Text.indd 6 2022_AR_Text.indd 6 1/11/23 1:07 PM 1/11/23 1:07 PM 2022_AR_Text.indd 7 2022_AR_Text.indd 7 1/9/23 1:52 PM 1/9/23 1:52 PM 2022_AR_Text.indd 8 2022_AR_Text.indd 8 1/9/23 1:52 PM 1/9/23 1:52 PM 2022_AR_Text.indd 9 2022_AR_Text.indd 9 1/9/23 1:52 PM 1/9/23 1:52 PM 2022_AR_Text.indd 10 2022_AR_Text.indd 10 1/9/23 1:52 PM 1/9/23 1:52 PM 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King Vice President, Human Resources Peter D. Moeller Vice President, International Renee J. Peterson Vice President and Chief Financial Officer Darren L. Redetzke Vice President, Strategic Technologies Richard W. Rodier Group Vice President, Construction Businesses Kurt D. Svendsen Vice President, Strategy, Corporate and Channel Development Daryn A. Walters Vice President, Exmark and Intimidator Group Richard M. Olson Chairman of the Board, President and Chief Executive Officer Kevin N. Carpenter Vice President, Global Operations and Integrated Supply Chain Jody M. Christy Vice President, BOSS Amy E. Dahl Vice President, General Counsel and Corporate Secretary Angela C. Drake Vice President, Finance Edric C. Funk Group Vice President, Golf, Grounds and Irrigation Businesses Blake M. Grams Vice President, Sustainability, Business Analytics and Process Improvement Gregory S. Janey Group Vice President, Contractor and Residential Businesses Shareholder Information Janet K. Cooper Retired, Senior Vice President and Treasurer Qwest Communications International Inc. D. Christian Koch Chairman, President and Chief Executive Officer Carlisle Companies Incorporated Gary L. Ellis* Retired, Executive Vice President Medtronic plc Joyce A. Mullen President and Chief Executive Officer Insight North America Jeffrey M. Ettinger Retired, Chairman and Chief Executive Officer Hormel Foods Corporation Eric P. Hansotia Chairman, President and Chief Executive Officer AGCO Corporation Katherine J. Harless Retired, President and Chief Executive Officer Idearc Inc. Jeffrey L. Harmening Chairman and Chief Executive Officer General Mills, Inc. *Lead Independent Director Richard M. Olson Chairman of the Board, President and Chief Executive Officer The Toro Company James C. O’Rourke President and Chief Executive Officer The Mosaic Company Jill M. Pemberton Chief Financial Officer, North America LVMH Moët Hennessy Louis Vuitton Michael G. Vale, Ph.D. Group President, Safety and Industrial 3M Company Shareholder Assistance Communications concerning The Toro Company stock, including shareholder change of address, certificate replacement, share transfer requirements, the direct stock purchase plan, dividends, the dividend reinvestment plan and similar matters should be directed to our transfer agent at: Broadridge Shareholder Services c/o Broadridge Corporate Issuer Solutions P.O. Box 1342 Brentwood, NY 11717-0718 1-844-956-0809 or 1-303-562-9697 shareholder@broadridge.com www.shareholder.broadridge.com/TTC Investor Inquiries Individual shareholders may direct any questions to invest@thetorocompany.com. At The Toro Company, our world advances through the vision of those who build, shape and care for it.A hard-working group of people who sees opportunities to enrich our world with beauty and utility.The ambition to turn these possibilities into realities is what unites us — colleagues and customers, partners, and communities.And it is what drives us to transform how a local business can cut and plow its way to growth.How a community can spring to life with revitalized infrastructure.How we make more of our world while demanding less of it.How green spaces can bring generations of families together, host epic sports rivalries, and instillcommunity pride.We expand what’s possible through products and technology that are impeccably engineered andgrounded in a century of solving real human needs. And we do it all with breakthroughs that solvebigger, tougher, more impactful challenges — each one uncovered and understood throughrelationships that endure season after season.Together, we seize the opportunities that turn aspirations for the world into new realities that impact lives and livelihoods.Increase battery and hybrid product sales to at least 20% of total adjusted net sales (motorized product sales) by fiscal 2025.Reduce absolute Scope 1 and 2 greenhouse gas emissions by at least 15% by fiscal 2025 as compared to fiscal 2019.Increase the number of women and racial and ethnic minorities in leadership positions by at least 20% by fiscal 2025 as compared to fiscal 2021.Sustainability is deeply rooted in our company purpose, actions and strategic business priorities. It is core to how we invest in our people, serve our customers and communities, and compete and win in the right way. To facilitate change and advance growth opportunities, we recently established three performance goals.The Ventrac® 4520 compact tractor has become a top choice for versatility among grounds professionals. Combining the optimal blend of power and agility with over 30+ commercial attachments, the 4520 tractor elevates the Ventrac experience to the next level.The BOSS® SR MAG has everything contractors need to dominate the snow and ice. Inspired by the innovative Snowrator, the powerful and versatile SR MAG brings an unprecedented level of performance to get sidewalk jobs done faster and more efficiently with a range of implements to tackle what winter brings. Big, bad and powerful. That’s the Toro® TITAN® MAX zero-turn mower. Built on a commercial-worthy blue print with iron forged features and durability, this machine is designed to tackle acres upon acres of lawn or tough, rugged terrain in virtually any mowing conditions.The Spartan® RZ Series performs like commercial-grade zero-turn mowers with a residential price. Packed with standard features and the Spartan signature styling, these machines deliver on performance and comfort to meet the needs of homeowners and small acreage owners.Enhancing utility contractors’ productivity while drilling through the toughest conditions including solid rock, the Ditch Witch® AT32 All-Terrain horizontal directional drill delivers maximum power and productivity in a compact footprint. Truly in a class of its own, the AT32 gives contractors more of what they want to complete more jobs with increased efficiency and profitability.When you combine Exmark's most productive zero-turn mower – the Lazer Z® X-Series – with its innovative features and large deck sizes, you get the ultimate commercial zero-turn mower experience. To meet the needs of the most demanding landscape professionals, it's the perfect combination of power, productivity, and durability.2022 Toro AR Cover.indd 4-62022 Toro AR Cover.indd 4-61/18/23 5:14 AM1/18/23 5:14 AM The Toro Company8111 Lyndale Avenue South Bloomington, MN 55420-1196 952-888-8801www.thetorocompany.com2022 Annual ReportCHARGING FORWARDThe Toro Company2022 Toro AR Cover.indd 1-32022 Toro AR Cover.indd 1-31/16/23 9:42 AM1/16/23 9:42 AM