XML 27 R17.htm IDEA: XBRL DOCUMENT
v3.24.0.1

DERIVATIVES | 3 Months Ended
--- | ---
Jan. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVES | 9. DERIVATIVES We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business. As part of our risk management strategy, we use derivative instruments, primarily forward contracts, to hedge economic and/or accounting exposures resulting from changes in foreign currency exchange rates. Cash Flow Hedges We enter into foreign exchange contracts to hedge our forecasted operational cash flow exposures resulting from changes in foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities based on a rolling period of up to twelve months. These derivative instruments are designated and qualify as cash flow hedges under the criteria prescribed in the authoritative guidance. In 2020, we entered into forward-starting interest rate swap agreements with an aggregate notional amount of $600 million associated with future interest payments on anticipated debt issuances through fiscal year 2024. In 2023, we terminated the interest rate swap agreements, resulting in a deferred gain of $107 million recognized in accumulated other comprehensive income (loss) to be amortized to interest expense over the term of the anticipated debt. As part of the ESI Group acquisition, we assumed two interest rate swap agreements with an aggregate notional amount of 5 million euros to hedge the variable interest rate of the syndicate loan. Non-designated Hedges Additionally, we periodically enter into foreign exchange contracts to hedge monetary assets and liabilities that are denominated in currencies other than the functional currency of our subsidiaries. In connection with the acquisition of the ESI Group, we entered into foreign exchange forward contracts to mitigate the currency exchange risk associated with the payment of the purchase price in Euro. The aggregate notional amount of the currencies hedged was 930 million euros as of October 31, 2023. These foreign exchange contracts did not qualify for hedge accounting treatment and were not designated as hedging instruments. During the three months ended January 31, 2024, these foreign exchange forward contracts were settled using existing cash of $63 million, resulting in a loss of $18 million recorded in “other income (expense), net.” The aggregate number of open foreign exchange forward contracts designated as "cash flow hedges" and "not designated as hedging instruments" was 179 and 72, respectively, as of January 31, 2024. The net notional amounts by currency and designation as of January 31, 2024 were as follows:
|  | Derivatives in Cash Flow Hedging Relationships |  | Derivatives Not Designated as Hedging Instruments
|  | Forward Contracts |  |  |  | Forward Contracts |  |
Currency |  | Buy/(Sell) |  |  |  | Buy/(Sell) |  |
|  | (in millions)
Euro |  | $ | — |  |  |  |  | $ | 77 |  |  |
British Pound |  | 2 |  |  |  |  | (3) |  |  |
Singapore Dollar |  | 33 |  |  |  |  | 48 |  |  |
Malaysian Ringgit |  | 110 |  |  |  |  | 4 |  |  |
Japanese Yen |  | (124) |  |  |  |  | (70) |  |  |
Other currencies |  | (29) |  |  |  |  | (41) |  |  |
Total |  | $ | (8) |  |  |  |  | $ | 15 |  |  |
Derivative instruments are subject to master netting arrangements and are disclosed gross in the condensed consolidated balance sheet. The gross fair values and balance sheet presentation of derivative instruments held as of January 31, 2024 and October 31, 2023 were as follows:
Fair Values of Derivative Instruments
Assets Derivatives |  | Liabilities Derivatives
|  | Fair Value |  |  |  | Fair Value
Balance Sheet Location |  | January 31, 2024 |  | October 31, 2023 |  | Balance Sheet Location |  | January 31, 2024 |  | October 31, 2023
(in millions)
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Cash flow hedges |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  |  |  |  |  |  |  |  |  |
Other current assets |  | $ | 8 |  |  | $ | 16 |  |  | Other accrued liabilities |  | $ | 4 |  |  | $ | 7 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  |  |  |  |  |  |  |  |  |
Other current assets |  | 6 |  |  | 2 |  |  | Other accrued liabilities |  | 5 |  |  | 47 |
Total derivatives |  | $ | 14 |  |  | $ | 18 |  |  |  |  | $ | 9 |  |  | $ | 54 |
The effect of derivative instruments for foreign exchange contracts designated as hedging instruments and for those not designated as hedging instruments in our condensed consolidated statement of operations was as follows:
|  |  | Three Months Ended
|  |  | January 31,
|  |  |  |  | 2024 |  | 2023
|  |  |  |  | (in millions)
Derivatives designated as hedging instruments: |  |  |  |  |  |  |
Cash Flow Hedges |  |  |  |  |  |  |
Interest rate swap contracts: |  |  |  |  |  |  |
Gain (loss) recognized in accumulated other comprehensive income (loss) |  |  |  |  | $ | — |  |  | $ | (24) |
Foreign exchange contracts: |  |  |  |  |  |  |
Gain (loss) recognized in accumulated other comprehensive income (loss) |  |  |  |  | $ | (3) |  |  | $ | (3) |
Gain (loss) reclassified from accumulated other comprehensive income (loss) into earnings: |  |  |  |  |  |  |
Cost of products |  |  |  |  | $ | 3 |  |  | $ | 4 |
Selling, general and administrative |  |  |  |  | $ | (1) |  |  | $ | (2) |
Gain (loss) excluded from effectiveness testing recognized in earnings based on amortization approach: |  |  |  |  |  |  |
Cost of products |  |  |  |  | $ | 1 |  |  | $ | 1 |
Selling, general and administrative |  |  |  |  | $ | — |  |  | $ | — |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |
Gain (loss) recognized in: |  |  |  |  |  |  |
Other income (expense), net |  |  |  |  | $ | (17) |  |  | $ | (4) |
The estimated amount at January 31, 2024 expected to be reclassified from accumulated other comprehensive income (loss) to earnings within the next twelve months is a gain of $5 million.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration