Fair Value of Financial Instruments (Tables)

6 Months Ended

Apr. 30, 2020

Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis


(in millions)	Fair Value Hierarchy	April 30, 2020		October 31, 2019
Cash and cash equivalents⁽¹⁾	1	$	555.9	$	58.5
Insurance deposits⁽²⁾	1	0.7		0.8
Assets held in funded deferred compensation plan⁽³⁾	1	2.3		2.5
Credit facility⁽⁴⁾	2	1,198.6		808.4
Interest rate swap liabilities⁽⁵⁾	2	21.2		14.6
Investments in auction rate securities⁽⁶⁾	3	—		5.0

⁽¹⁾Cash and cash equivalents are stated at nominal value, which equals fair value.

⁽²⁾Represents restricted deposits that are used to collateralize our insurance obligations and are stated at nominal value, which equals fair value. These insurance deposits are included in “Other noncurrent assets” on the accompanying unaudited Consolidated Balance Sheets. See Note 8, “Insurance,” for further information.

⁽³⁾Represents investments held in a Rabbi trust associated with one of our deferred compensation plans, which we include in “Other noncurrent assets” on the accompanying unaudited Consolidated Balance Sheets. The fair value of the assets held in the funded deferred compensation plan is based on quoted market prices.

⁽⁴⁾Represents gross outstanding borrowings under our syndicated line of credit and term loan. Due to variable interest rates, the carrying value of outstanding borrowings under our line of credit and term loan approximates the fair value. See Note 9, “Credit Facility,” for further information.

⁽⁵⁾Represents interest rate swap derivatives designated as cash flow hedges. The fair values of the interest rate swaps are estimated based on the present value of the difference between expected cash flows calculated at the contracted interest rates and the expected cash flows at current market interest rates using observable benchmarks for the London Interbank Offered Rate (“LIBOR”) forward rates at the end of the period. At April 30, 2020 and October 31, 2019, our interest rate swaps are included in “Other noncurrent liabilities” on the accompanying unaudited Consolidated Balance Sheets. See Note 9, “Credit Facility,” for further information.

⁽⁶⁾The fair value of investments in auction rate securities is based on discounted cash flow valuation models, primarily utilizing unobservable inputs, including assumptions about the underlying collateral, credit risks associated with the issuer, credit enhancements associated with financial insurance guarantees, and the possibility of the security being re-financed by the issuer or having a successful auction.

At October 31, 2019 we held an investment in one auction rate security that had an original principal amount, amortized cost, and fair value of $5.0 million that was included in “Other investments” on the accompanying unaudited Consolidated Balance Sheets. During the first quarter of 2020, this auction rate security was called by the issuer, and we received proceeds for the fair value of this debt instrument of $5.0 million. There were no unrealized gains or losses on this auction rate security included in accumulated other comprehensive loss (“AOCL”). At April 30, 2020 we had no investments in auction rate securities.

Significant Assumptions Used to Determine Fair Value of Auction Rate Securities

The discount rates utilized in the income approach valuation method are summarized in the table below.


						Discount Rates
Education						10.0%
Aviation						10.5%
Technical Solutions						11.0%