Derivative Financial Instruments

12 Months Ended

Oct. 31, 2023

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 Consolidated Statement of Income together with the transaction gain or loss from the related balance sheet position. The settlement of these contracts is recorded in operating activities on the Consolidated Statement of Cash Flows.

In 2023, we recognized net losses of $3,041 on foreign currency forward contracts and net loss of $4,701 from the change in fair value of balance sheet positions. In 2022, we recognized net losses of $4,937 on foreign currency forward contracts and net gains of $11,207 from the change in fair value of balance sheet positions. In 2021, we recognized net gains of $1,485 on foreign currency forward contracts and net losses of $7,411 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 Receivables-net and Accrued liabilities, respectively in the Consolidated Balance Sheets.

The following table summarizes, by currency, the contracts outstanding at October 31, 2023 and 2022:


	Notional Amounts
	Sell		Buy
October 31, 2023 contract amounts:
Euro	$	107,056	$	53,919
Pound sterling	17,449		163,116
Japanese yen	18,858		22,088
Mexican peso	45		26,063
Hong Kong dollar	1,509		8,943
Singapore dollar	448		20,126
Australian dollar	—		9,112
Taiwan dollar	—		8,000
Other	14,518		79,814
Total	$	159,883	$	391,181
October 31, 2022 contract amounts:
Euro	$	85,879	$	337,530
Pound sterling	31,361		101,960
Japanese yen	12,849		33,210
Mexican peso	9,802		26,509
Hong Kong dollar	5,174		73,953
Singapore dollar	411		18,817
Australian dollar	327		9,163
Taiwan Dollar	—		24,047
Other	4,327		60,104
Total	$	150,130	$	685,293

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. As of October 31, 2023 and 2022, there were no significant concentrations of credit risk.

Net Investment Hedges

Net assets of our foreign subsidiaries are exposed to volatility in foreign currency exchange rates. We may utilize net investment hedges to offset the translation adjustment arising from re-measuring our investment in foreign subsidiaries.

During the second quarter of 2023, the Company designated €180,000 of borrowings as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. In June 2023, the hedge was terminated. Any increases or decreases related to the remeasurement or termination of the €180,000 borrowing into U.S. dollars were recorded in the currency translation component of Accumulated other comprehensive income (loss) within Shareholders' Equity in the Consolidated Balance Sheets. A loss of $2,467, net of tax, was recorded in 2023 on these net investment hedges.

During the fourth quarter of 2023, the Company designated €760,000 of borrowings as a hedge of our net investment in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. In September 2023, the hedge was terminated. Any increases or decreases related to the remeasurement or termination of the €760,000 borrowing into U.S. dollars were recorded in the currency translation component of Accumulated other comprehensive income (loss) within Shareholders' Equity in the Consolidated Balance Sheets. A gain of $7,846, net of tax, was recorded in 2023 on these net investment hedges.

During 2023, the Company entered into various cross currency swaps between the U.S. Dollar and Euro, Japanese Yen, Taiwan Dollar and Chinese Yuan which were designated as a hedges of our net investments in certain foreign subsidiaries to mitigate the foreign exchange risk associated with certain investments in these subsidiaries. Any increases or decreases related to the remeasurement of the hedges are recorded in the currency translation component of Accumulated other comprehensive income (loss) within Shareholders' Equity in the Consolidated Balance Sheets until the sale or substantial liquidation of the underlying investments. A gain of $10,165, net of tax, was recorded in 2023.

Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings. The settlement of net investment hedges is recorded in investing activities on the Consolidated Statements of Cash Flows.

A net gain of $15,544, net of tax of $4,643, was recorded in 2023 related to all net investment hedges, which is included in foreign currency translation adjustments in the Consolidated Statements of Shareholders' Equity.

The following table summarizes the fair values of our net investment contracts designated as net investment hedges in the Company's Consolidated Balance Sheet as of October 31, 2023:


	Prepaid expenses and other current assets		Other assets		Accrued liabilities		Other long-term liabilities
Net investment contracts	$	11,379	$	2,334	$	—	$	9,985