Financial instruments

9 Months Ended

Jul. 31, 2011

Financial instruments [Abstract]

Financial instruments

17.	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 currencies are recorded 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.
	Gains and losses on foreign exchange contracts are recorded in “Other – net” on the Consolidated Statement of Income together with the transaction gain or loss from the hedged balance sheet position. For the three months ended July 31, 2011, we recognized losses of $3,532 on foreign exchange contracts and gains of $3,640 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2011, we recognized losses of $8,083 on foreign exchange contracts and gains of $9,980 from the change in fair value of balance sheet positions. We do not use financial instruments for trading or speculative purposes.
	We had the following outstanding foreign currency forward contracts at July 31, 2011:

	Sell				Buy
	Notional		Fair Market		Notional		Fair Market
	Amounts		Value		Amounts		Value
Euro	$	14,623	$	14,680	$	92,340	$	93,840
British pound		1,632		1,647		38,807		39,188
Japanese yen		10,096		10,460		11,455		11,757
Others		5,019		5,188		31,265		33,257
Total	$	31,370	$	31,975	$	173,867	$	178,042

The following table shows the fair value of foreign currency forward contracts in the consolidated balance sheet at July 31, 2011.

Asset Derivatives			Liability Derivatives
Balance sheet location	Fair value		Balance sheet location	Fair value
Receivables	$	3,986	Accrued liabilities	$	416

The carrying amounts and fair values of financial instruments at July 31, 2011, other than receivables and accounts payable, are shown in the table below. The carrying values of receivables and accounts payable approximate fair value due to the short-term nature of these instruments.

	Carrying
	Amount		Fair Value
Cash and cash equivalents	$	69,057	$	69,057
Notes payable		381		381
Long-term debt		51,949		53,280
Foreign exchange contracts (net)		3,570		3,570

We used the following methods and assumptions in estimating the fair value of financial instruments:

• Cash, cash equivalents and notes payable are valued at their carrying amounts due to the relatively short period to maturity of the instruments.

• Long-term debt is valued by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions.

• Foreign exchange contracts are estimated using quoted exchange rates.