Derivative financial instruments

3 Months Ended

Jan. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The Company uses derivative instruments to manage foreign currency and interest rate risk as detailed below.

Foreign Currency Forward Contracts

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. The settlement of these contracts is recorded in operating activities on the Condensed Consolidated Statement of Cash Flows.

For the three months ended January 31, 2025, we recognized a net loss of $4,363 on foreign currency forward contracts and a net gain of $4,694 from the change in fair value of balance sheet positions. For the three months ended January 31, 2024, we recognized a net gain of $12,094 on foreign currency forward contracts and a net loss of $12,916 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 Receivable-net and Accrued liabilities, respectively, in our Consolidated Balance Sheets.

The following table summarizes, by currency, the foreign currency forward contracts outstanding at January 31, 2025 and 2024:


January 31, 2025 contract amounts:	Notional Sell Amounts		Notional Buy Amounts
Euro	$	138,952	$	170,725
British pound	24,087		172,779
Japanese yen	22,217		24,307
Mexican Peso	37		25,260
Hong Kong dollar	1,844		2,528
Singapore dollar	8,313		21,376
Australian dollar	284		10,421
Taiwan Dollar	—		8,002
Others	10,977		75,638
Total	$	206,711	$	511,036

January 31, 2024 contract amounts:	Notional Sell Amounts		Notional Buy Amounts
Euro	$	111,826	$	96,737
British pound	19,136		180,224
Mexican Peso	925		33,885
Japanese yen	12,024		23,985
Hong Kong dollar	—		7,453
Singapore dollar	72		20,062
Australian dollar	—		9,334
Taiwan Dollar	—		8,000
Others	5,329		85,206
Total	$	149,312	$	464,886

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 months ended January 31, 2025 and 2024, there were no significant concentrations of credit risk.

Treasury Locks

During the fourth quarter of 2024, the Company entered into treasury locks to fix the interest rate related to $250,000 of the $600,000 aggregate principal amount of 2029 Notes issued on September 4, 2024. The derivative positions were closed when the debt was priced on September 4, 2024 with a cash settlement net payment of $2,306 that offset changes in the benchmark treasury rate between execution of the treasury rate locks and the debt pricing date. These derivatives were designed as cash flow hedges and the deferred amount reported in AOCI is being reclassed to interest expense as payments are made on the notes through the maturity date.

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.

As of January 31, 2025, the Company was party to various cross currency swaps between the U.S. Dollar and Euro, Japanese Yen, Taiwan Dollar, Singapore Dollar and Chinese Yuan, which were designated as 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 Sheet until the sale or substantial liquidation of the underlying investments. A gain of $28,520, net of tax, and a $11,855 loss, net of tax, was recorded for the three months ended January 31, 2025 and 2024, respectively.

The following table summarizes the fair values of our net investment contracts designated as net investment hedges in the Company's Condensed Consolidated Balance Sheets as of January 31, 2025:


	Prepaid expenses and other current assets		Other assets		Accrued liabilities		Other long-term liabilities
Net investment contracts	$	14,482	$	4,314	$	—	$	96

Fair Value Hedges of Interest Rate Risk

The Company is exposed to changes in the fair value of certain of its fixed-rate liabilities due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate, Secured Overnight Financing Rate ("SOFR"), with the objective of minimizing the cost of borrowed funds. The Company's interest rate swaps involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments without the exchange of the underlying notional amount.

The Company's interest rate swaps are designated and qualify as fair value hedges. As a result, the interest rate swaps are measured at fair value and the carrying value of the hedged debt is adjusted for the change in value related to the exposure being hedged, with both adjustments offset to earnings. Accordingly, the earnings effect of an increase in the fair value of the interest rate swaps will be substantially offset by the earnings effect of the increase in the carrying value of the hedged debt. The net impact of fair value hedge accounting for interest rate swaps is recognized in Interest expense. A loss of $44, net of tax, was recorded for the three months ended January 31, 2025. The fair values of our interest rate swap assets are included in Prepaid expenses and other current assets and Other assets in our Consolidated Balance Sheets.

The following table provides information regarding the Company's outstanding interest rate derivatives that were used to hedge changes in fair value attributable to interest rate risk:


	Interest rate swaps - notional amount		Cumulative adjustment to long-term debt from application of hedge accounting		Carrying value of hedged debt
Interest rate swaps	$	300,000	$	2,985	$	302,985