Note 12 — 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. In 2014, we recognized net losses of $826 on foreign currency forward contracts and net gains of $348 from the change in fair value of balance sheet positions. In 2013, we recognized net gains of $1,437 on foreign currency forward contracts and net losses of $3,651 from the change in fair value of balance sheet positions. In 2012, we recognized net gains of $294 on foreign currency forward contracts and net losses of $1,310 from the change in fair value of balance sheet positions.

The following table summarizes, by currency, the contracts outstanding at October 31, 2014 and 2013:


	Sell				Buy
	Notional Amounts		Fair Market Value		Notional Amounts		Fair Market Value
October 31, 2014 contract amounts:
Euro	$	424,624	$	407,422	$	344,461	$	330,957
Pound sterling		86,654		85,632		141,638		140,065
Japanese yen		21,057		19,780		17,477		16,498
Australian dollar		216		220		9,012		8,618
Hong Kong dollar		52,278		52,247		117,040		116,978
Singapore dollar		—		—		10,984		10,693
Others		2,627		2,573		28,409		27,236

Total	$	587,456	$	567,874	$	669,021	$	651,045

October 31, 2013 contract amounts:
Euro	$	194,531	$	194,187	$	131,198	$	131,825
Pound sterling		17,854		17,856		29,441		29,950
Japanese yen		11,426		11,404		8,686		8,672
Australian dollar		894		899		8,653		8,986
Hong Kong dollar		1,935		1,935		42,140		42,132
Singapore dollar		201		201		9,815		10,065
Others		5,768		5,745		24,227		24,503

Total	$	232,609	$	232,227	$	254,160	$	256,133

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 2014 and 2013, net gains of $318 and $699, 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 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, 2014, 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.


	2014				2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	42,314	$	42,314	$	42,375	$	42,375
Notes payable		106,181		106,181		3,604		3,604
Long-term debt (including current portion)		693,619		696,140		648,990		636,904
Foreign currency forward contracts (net)		1,510		1,510		2,313		2,313

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, which are considered to be Level 2 inputs under the fair value hierarchy.

•

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