Derivative Financial Instruments

9 Months Ended

Jul. 31, 2021

Investments, All Other Investments [Abstract]

Derivative financial instruments

We operate internationally and enter into intercompany transactions denominated in foreign currencies. Consequently, we are subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions. These contracts usually have maturities of 90 days or less and generally require us to exchange foreign currencies for U.S. dollars at maturity, at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in “Other – net” on the Condensed Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position.

For the three months ended July 31, 2021, we recognized a net loss of $1,714 on foreign currency forward contracts and a realized net gain of $1,202 from the change in fair value of balance sheet positions. For the three months ended July 31, 2020, we recognized a net gain of $17,255 on foreign currency forward contracts and a net loss of $20,809 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2021, we recognized a net loss of $505 on foreign currency forward contracts and a realized net loss of $3,544 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2020, we recognized a net gain of $13,096 on foreign currency forward contracts and a net loss of $13,658 from the change in fair value of balance sheet positions. The fair values of our foreign currency forward contract assets and liabilities are included in Prepaid expenses and other current assets and Accrued liabilities, respectively, in our Consolidated Balance Sheets.

The following table summarizes, by currency, the foreign currency forward contracts outstanding at July 31, 2021 and 2020:


	Notional Amounts
July 31, 2021 contract amounts:	Sell		Buy
Euro	$	118,988	$	337,817
British pound	27,861		86,778
Japanese yen	15,939		43,281
Australian dollar	934		10,462
Hong Kong dollar	283		37,556
Singapore dollar	458		18,448
Others	22,374		93,079
Total	$	186,837	$	627,421

	Notional Amounts
July 31, 2020 contract amounts:	Sell		Buy
Euro	$	108,856	$	207,198
British pound	18,861		60,397
Japanese yen	15,815		32,009
Australian dollar	174		7,682
Hong Kong dollar	56,279		74,714
Singapore dollar	1,357		15,982
Others	4,412		59,921
Total	$	205,754	$	457,903

We are exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments. These financial instruments include cash deposits and foreign currency forward contracts. We periodically monitor the credit ratings of these counterparties in order to minimize our exposure. Our customers represent a wide variety of industries and geographic regions. For the three and nine months ended July 31, 2021 and 2020, there were no significant concentrations of credit risk.