Financial instruments

12 Months Ended

Oct. 31, 2011

Financial instruments [Abstract]

Financial instruments

Note 9 — 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 hedges of balance sheet positions are recognized in each accounting period in “other-net” on the Consolidated Statement of Income together with the transaction gain or loss from the hedged balance sheet position. In 2011, we recognized net losses of $11,277 on foreign exchange contracts and net gains of $13,477 from the change in fair value of balance sheet positions. In 2010, we recognized net gains of $7,970 on foreign exchange contracts and net losses of $6,749 from the change in fair value of balance sheet positions. We do not use financial instruments for trading or speculative purposes.

The following table summarizes, by currency, forward exchange contracts outstanding at October 31, 2011 and 2010:

	Sell				Buy
	Notional Amounts		Fair Market Value		Notional Amounts		Fair Market Value
October 31, 2011 contract amounts:
Euro	$	10,920	$	10,967	$	88,209	$	87,736
Pound sterling		29,381		29,465		56,028		56,515
Japanese yen		16,723		16,416		15,788		15,566
Others		13,827		13,891		33,001		33,473
Total	$	70,851	$	70,739	$	193,026	$	193,290
October 31, 2010 contract amounts:
Euro	$	17,145	$	17,601	$	171,870	$	181,430
Pound sterling		—		—		25,832		26,576
Japanese yen		12,947		13,260		18,678		19,490
Others		6,357		6,545		28,361		29,854
Total	$	36,449	$	37,406	$	244,741	$	257,350

We also use intercompany foreign currency transactions of a long-term investment nature to hedge the value of investment in wholly-owned subsidiaries. For hedges of the net investment in foreign operations, realized and unrealized gains and losses are shown in the cumulative translation adjustment account included in total comprehensive income. For 2011 and 2010, net losses of $170 and $999, respectively, were included in the cumulative translation adjustment account related to foreign denominated fixed-rate debt designated as a hedge of net investment in foreign operations.

We are exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments. These financial instruments include cash deposits and forward exchange 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, 2011, there were no significant concentrations of credit risk.

The carrying amounts and fair values of financial instruments, 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.

	2011				2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	37,408	$	37,408	$	42,329	$	42,329
Marketable securities		—		—		7,840		7,840
Notes payable		33		33		2,160		2,160
Long-term debt		319,123		313,850		110,260		112,495
Forward exchange contracts (net)		376		376		11,653		11,653

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.

• Marketable securities are valued at quoted market prices, which are considered to be Level 1 inputs under the fair value hierarchy.

• Long-term debt is valued by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions, which are considered to be Level 2 inputs under the fair value hierarchy.

• Foreign exchange contracts are estimated using quoted exchange rates, which are considered to be Level 2 inputs under the fair value hierarchy.