XML 20 R9.htm IDEA: XBRL DOCUMENT
v3.24.3

Financial Instruments | 9 Months Ended
--- | ---
Aug. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | FINANCING ARRANGEMENTS AND FINANCIAL INSTRUMENTS In August 2024, we entered into a 364-day $500 million revolving credit facility which will expire in August 2025 (the 364-day facility). The current pricing for the 364-day facility, on a fully drawn basis, is SOFR + 1.23%. The pricing of the 364-day facility is based on a credit rating grid that contains a fully drawn maximum pricing of the facility equal to SOFR + 1.60%. The provisions of this revolving credit facility restrict subsidiary indebtedness and require us to maintain a minimum interest coverage ratio, consistent with our five-year $1.5 billion revolving credit facility (the five-year facility). We do not expect that this covenant would limit our access to the 364-day facility or the five-year facility for the foreseeable future. During the three months ended August 31, 2024, we repaid our $700.0 million 3.15% notes due in August 2024. We use derivative financial instruments to enhance our ability to manage risk, including foreign currency, net investment and interest rate exposures, which exist as part of our ongoing business operations. We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instrument, and all derivatives are designated as hedges. We are not a party to master netting arrangements, and we do not offset the fair value of derivative contracts with the same counterparty in our financial statement disclosures. The use of derivative financial instruments is monitored through regular communication with senior management and the use of written guidelines. Foreign currency exchange risk. We are potentially exposed to foreign currency fluctuations affecting net investments in subsidiaries, transactions (both third-party and intercompany) and earnings denominated in foreign currencies. We assess foreign currency risk based on transactional cash flows and translational volatility and may enter into forward contract and currency swaps with highly-rated financial institutions to reduce fluctuations in the long or short currency positions. The following is a summary of the notional amounts of outstanding foreign currency exchange contracts as of August 31, 2024 and November 30, 2023 (in millions):
| August 31, 2024 |  | November 30, 2023
Fair value hedges | $ | 864.8 |  |  | $ | 765.4 |
Cash flow hedge | 245.9 |  |  | 235.0 |
Total | $ | 1,110.7 |  |  | $ | 1,000.4 |
All of these contracts were designated as hedges of foreign currency denominated assets or liabilities or hedges of anticipated purchases denominated in a foreign currency. Hedge ineffectiveness was not material. All foreign currency exchange contracts outstanding at August 31, 2024 have durations of less than 15 months, including $252.7 million of notional contracts that have an initial duration of less than one month and are used to hedge short-term cash flow funding. Contracts which are designated as hedges of foreign currency denominated assets are considered fair value hedges. These foreign currency exchange contracts manage both exposure to currency fluctuations in certain intercompany loans between subsidiaries as well as currency exposure to third-party non-functional currency assets or liabilities. Gains and losses from contracts that are designated as hedges of assets, liabilities or firm commitments are recognized through income, offsetting the change in fair value of the hedged item. Contracts which are designated as hedges of anticipated purchases denominated in a foreign currency (generally purchases of inventory in U.S. dollars by operating units outside the U.S.) are considered cash flow hedges. The gains and losses on these contracts are deferred in accumulated other comprehensive income until the hedged item is recognized in cost of goods sold, at which time the net amount deferred in accumulated other comprehensive income is also recognized in cost of goods sold. We also utilize cross currency interest rate swap contracts that are designated as net investment hedges. Gains or losses on net investment hedges, exclusive of interest accruals, are included in foreign currency translation adjustments in accumulated other comprehensive loss. We exclude the interest accruals on cross-currency interest rate swap contracts from the assessment and measurement of hedge effectiveness. We recognize the interest accruals on cross-currency interest rate swap contracts within interest expense. Interest rate risk. We finance a portion of our operations with both fixed and variable rate debt instruments, principally commercial paper, notes and bank loans. We utilize interest rate derivative contracts, including interest rate swap agreements, to minimize worldwide financing costs and to achieve a desired mix of variable and fixed rate debt. The following table discloses the notional amount and fair values of derivative instruments on our balance sheet (in millions):
| Asset Derivatives |  | Liability Derivatives
| Balance sheet location |  | Notional amount |  | Fair value |  | Balance sheet location |  | Notional amount |  | Fair value
As of August 31, 2024 |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | Other current assets / Other long-term assets |  | $ | — |  |  | $ | — |  |  | Other accrued liabilities / Other long-term liabilities |  | $ | 600.0 |  |  | $ | 36.0 |
Foreign exchange contracts | Other current assets |  | 367.3 |  |  | 2.4 |  |  | Other accrued liabilities |  | 743.4 |  |  | 16.7 |
Cross currency contracts | Other current assets / Other long-term assets |  | 486.8 |  |  | 18.6 |  |  | Other accrued liabilities / Other long-term liabilities |  | 497.0 |  |  | 5.9 |
Total |  |  |  |  | $ | 21.0 |  |  |  |  |  |  | $ | 58.6 |
As of November 30, 2023 |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | Other current assets / Other long-term assets |  | $ | — |  |  | $ | — |  |  | Other accrued liabilities / Other long-term liabilities |  | $ | 600.0 |  |  | $ | 52.8 |
Foreign exchange contracts | Other current assets |  | 161.3 |  |  | 2.5 |  |  | Other accrued liabilities |  | 839.1 |  |  | 16.0 |
Cross currency contracts | Other current assets / Other long-term assets |  | 719.6 |  |  | 24.6 |  |  | Other long-term liabilities |  | 238.9 |  |  | 7.5 |
Total |  |  |  |  | $ | 27.1 |  |  |  |  |  |  | $ | 76.3 |
The following tables disclose the impact of derivative instruments on our other comprehensive income (OCI), accumulated other comprehensive loss (AOCI) and our consolidated income statement for the three and nine months ended August 31, 2024 and 2023 (in millions):
Fair Value Hedges |  |  |  |  |  |  |  |  |  |
Derivative |  | Income statement location |  | Expense (income)
|  |  |  | Three months ended August 31, 2024 |  | Three months ended August 31, 2023 |  | Nine months ended August 31, 2024 |  | Nine months ended August 31, 2023
Interest rate contracts |  | Interest expense |  | $ | 5.2 |  |  | $ | 4.9 |  |  | $ | 15.4 |  |  | $ | 12.6 |
| Income statement location | Gain (loss) recognized in income |  | Income statement location | Gain (loss) recognized in income
Derivative |  | 2024 |  | 2023 | Hedged item |  | 2024 |  | 2023
Three months ended August 31, |  |  |  |  |  |  |  |  |
Foreign exchange contracts | Other income, net | $ | (5.5) |  |  | $ | (12.4) |  | Intercompany loans | Other income, net | $ | 4.6 |  |  | $ | 10.0 |
Nine months ended August 31, |  |  |  |  |  |  |  |  |
Foreign exchange contracts | Other income, net | $ | (12.2) |  |  | $ | (18.1) |  | Intercompany loans | Other income, net | $ | 8.5 |  |  | $ | 17.1 |
The gains (losses) recognized on fair value hedges relating to currency exposure on third-party non-functional currency assets or liabilities were not material during the three and nine months ended August 31, 2024 and 2023.
Cash Flow Hedges |  |
Derivative |  | Gain (loss) recognized in OCI |  | Income statement location |  | Gain (loss) reclassified from AOCI
|  | 2024 |  | 2023 |  |  |  | 2024 |  | 2023
Three months ended August 31, |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | — |  |  | $ | — |  |  | Interest expense |  | $ | (0.2) |  |  | $ | — |
Foreign exchange contracts |  | (0.3) |  |  | 0.7 |  |  | Cost of goods sold |  | 0.4 |  |  | (0.4) |
Total |  | $ | (0.3) |  |  | $ | 0.7 |  |  |  |  | $ | 0.2 |  |  | $ | (0.4) |
Nine months ended August 31, |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | — |  |  | $ | (2.6) |  |  | Interest expense |  | $ | (0.5) |  |  | $ | 0.2 |
Foreign exchange contracts |  | (0.6) |  |  | (1.7) |  |  | Cost of goods sold |  | 1.9 |  |  | 0.9 |
Total |  | $ | (0.6) |  |  | $ | (4.3) |  |  |  |  | $ | 1.4 |  |  | $ | 1.1 |
As of August 31, 2024, the net amount of accumulated other comprehensive loss associated with all cash flow and settled interest rate cash flow hedge derivatives expected to be reclassified in the next 12 months is $0.8 million as a decrease to earnings.
Net Investment Hedges |  |
Derivative |  | Gain (loss) recognized in OCI |  | Income statement location |  | Gain (loss) excluded from the assessment of hedge effectiveness
|  | 2024 |  | 2023 |  |  |  | 2024 |  | 2023
Three months ended August 31, |  |  |  |  |  |  |  |  |  |
Cross currency contracts |  | $ | (9.4) |  |  | $ | (8.0) |  |  | Interest expense |  | $ | 2.4 |  |  | $ | 2.7 |
Nine months ended August 31, |  |  |  |  |  |  |  |  |  |
Cross currency contracts |  | $ | (4.4) |  |  | $ | (17.6) |  |  | Interest expense |  | $ | 7.0 |  |  | $ | 8.9 |
For all net investment hedges, no amounts have been reclassified out of accumulated other comprehensive loss. The amounts noted in the tables above for OCI do not include any adjustments for the impact of deferred income taxes. We maintain a nonrecourse accounts receivable sale program whereby certain eligible U.S. receivables are sold to a third-party financial institution in exchange for cash. The program provides us with an additional means for managing liquidity. Under the terms of the arrangement, we act as the collecting agent on behalf of the financial institution. We account for the transfer of receivables as a sale at the point control is transferred through derecognition of the receivable on our condensed consolidated balance sheet. The outstanding amounts of receivables sold under this program were $21.1 million and $19.6 million as of August 31, 2024, and November 30, 2023, respectively. As collecting agent on the sold receivables, we had $3.3 million and $1.6 million of cash collected that was not yet remitted to the third-party financial institution as of August 31, 2024, and November 30, 2023, respectively. The incremental costs of selling receivables under this arrangement were insignificant for the three months and nine months ended August 31, 2024.

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 405 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477092/405-40-50-1 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/470/tableOfContent Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I Reference 20: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I Reference 21: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

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