SELECTED FINANCIAL STATEMENT INFORMATION

12 Months Ended

Oct. 31, 2018

Selected Financial Statement Information [Abstract]

Additional Financial Information Disclosure [Text Block]

SELECTED FINANCIAL STATEMENT INFORMATION

Accounts Receivable



	As of October 31,
(in thousands)	2018			2017
Accounts receivable		$254,727			$225,462
Less: Allowance for doubtful accounts	(3,258		)	(3,006		)
Accounts receivable, net		$251,469			$222,456

Costs and Estimated Earnings on Uncompleted Percentage-of-Completion Contracts



	As of October 31,
(in thousands)	2018			2017
Costs incurred on uncompleted contracts		$39,350			$29,491
Estimated earnings	19,708			19,902
	59,058			49,393
Less: Billings to date	(45,731		)	(41,262		)
		$13,327			$8,131
Included in the accompanying Consolidated Balance Sheets under the following captions:
Accounts receivable, net (costs and estimated earnings in excess of billings)		$14,183			$9,377
Accrued expenses and other current liabilities (billings in excess of costs and estimated earnings)	(856		)	(1,246		)
		$13,327			$8,131

Changes in estimates pertaining to percentage-of-completion contracts did not have a material effect on net income from consolidated operations in fiscal 2018, 2017 or 2016.

Inventories



	As of October 31,
(in thousands)	2018			2017
Finished products		$192,758			$173,559
Work in process	49,315			39,986
Materials, parts, assemblies and supplies	158,039			128,031
Contracts in process	1,649			2,415
Less: Billings to date	(208		)	(363		)
Inventories, net of valuation reserves		$401,553			$343,628

Contracts in process represents accumulated capitalized costs associated with fixed price contracts. Related progress billings and customer advances (“billings to date”) are classified as a

reduction to contracts in process, if any, and any excess is included in accrued expenses and other liabilities.

Property, Plant and Equipment



	As of October 31,
(in thousands)	2018			2017
Land		$5,864			$5,435
Buildings and improvements	101,424			91,916
Machinery, equipment and tooling	230,108			191,298
Construction in progress	5,044			5,553
	342,440			294,202
Less: Accumulated depreciation and amortization	(187,701		)	(164,319		)
Property, plant and equipment, net		$154,739			$129,883

The amounts set forth above include tooling costs having a net book value of $8.2 million and $7.6 million as of October 31, 2018 and 2017, respectively. Amortization expense on capitalized tooling was $2.8 million, $2.7 million and $2.9 million in fiscal 2018, 2017 and 2016, respectively.

The amounts set forth above also include $11.9 million and $4.8 million of assets under capital leases as of October 31, 2018 and October 31, 2017, respectively. Accumulated depreciation associated with assets under capital leases was $1.5 million and $1.0 million as of October 31, 2018 and October 31, 2017, respectively. See Note 5, Long-Term Debt, for additional information pertaining to capital lease obligations.

Depreciation and amortization expense, exclusive of tooling, on property, plant and equipment was $23.2 million, $21.9 million and $20.4 million in fiscal 2018, 2017 and 2016, respectively.

Accrued Expenses and Other Current Liabilities



	As of October 31,
(in thousands)	2018		2017
Accrued employee compensation and related payroll taxes		$97,048		$78,058
Deferred revenue	28,262		29,247
Accrued customer rebates and credits	16,861		12,866
Contingent consideration and other accrued purchase consideration	6,138		7,588
Other	23,205		19,853
Accrued expenses and other current liabilities		$171,514		$147,612

The increase in accrued employee compensation and related payroll taxes principally reflects a higher level of accrued performance-based compensation resulting from the improved consolidated operating results and the impact of our fiscal 2018 acquisitions. The total customer

rebates and credits deducted within net sales in fiscal 2018, 2017 and 2016 was $9.9 million, $11.0 million and $10.8 million, respectively.

Other Long-Term Assets and Liabilities

The Company provides eligible employees, officers and directors of the Company the opportunity to voluntarily defer base salary, bonus payments, commissions, long-term incentive awards and directors fees, as applicable, on a pre-tax basis through the HEICO Corporation Leadership Compensation Plan (“LCP”), a nonqualified deferred compensation plan that conforms to Section 409A of the Internal Revenue Code. The Company matches 50% of the first 6% of base salary deferred by each participant. Director fees that would otherwise be payable in Company common stock may be deferred into the LCP, and, when distributable, are distributed in actual shares of Company common stock. The LCP does not provide for diversification of a director’s assets allocated to Company common stock. The deferred compensation obligation associated with Company common stock is recorded as a component of shareholders’ equity at cost and subsequent changes in fair value are not reflected in operations or shareholders’ equity of the Company. Further, while the Company has no obligation to do so, the LCP also provides the Company the opportunity to make discretionary contributions. The Company’s matching contributions and any discretionary contributions are subject to vesting and forfeiture provisions set forth in the LCP. Company contributions to the LCP charged to income in fiscal 2018, 2017 and 2016 totaled $5.9 million, $4.6 million and $6.8 million, respectively. The aggregate liabilities of the LCP were $125.8 million and $116.0 million as of October 31, 2018 and 2017, respectively, and are classified within other long-term liabilities in the Company’s Consolidated Balance Sheets. The assets of the LCP, totaling $126.8 million and $117.2 million as of October 31, 2018 and 2017, respectively, are classified within other assets and principally represent cash surrender values of life insurance policies that are held within an irrevocable trust that may be used to satisfy the obligations under the LCP.

Other long-term liabilities also includes deferred compensation of $5.9 million and $5.7 million as of October 31, 2018 and 2017, respectively, principally related to elective deferrals of salary and bonuses under a Company sponsored non-qualified deferred compensation plan formerly available to selected employees. The Company makes no contributions to this plan. The assets of this plan, which equaled the deferred compensation liability as of October 31, 2018 and 2017, respectively, are held within an irrevocable trust and classified within other assets in the Company’s Consolidated Balance Sheets. Additional information regarding the assets of this deferred compensation plan and the LCP may be found in Note 7, Fair Value Measurements.

Research and Development Expenses

The amount of new product research and development ("R&D") expenses included in cost of sales is as follows (in thousands):



	Year ended October 31,
	2018		2017		2016
R&D expenses		$57,450		$46,473		$44,726

Accumulated Other Comprehensive Loss

Changes in the components of accumulated other comprehensive loss during fiscal 2018 and 2017 are as follows (in thousands):



	Foreign Currency Translation			Pension Benefit Obligation			Accumulated Other Comprehensive Loss
Balances as of October 31, 2016		($23,953	)		($1,373	)		($25,326	)
Unrealized gain	14,420			321			14,741
Amortization of unrealized loss	—			29			29
Balances as of October 31, 2017	(9,533		)	(1,023		)	(10,556		)
Unrealized (loss) gain	(4,837		)	124			(4,713		)
Amortization of unrealized loss	—			13			13
Balances as of October 31, 2018		($14,370	)		($886	)		($15,256	)