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Financial Derivatives and Hedging | 12 Months Ended
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Oct. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Derivatives and Hedging | Financial Derivatives and Hedging As part of the Company’s overall risk management practices the Company enters into financial derivatives, interest rate swaps designated as cash flow hedges, to hedge the Company's exposure to changes in cash flows associated with its variable rate debt. The Company records all derivatives on its Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. All of the Company's derivatives have satisfied the criteria necessary to apply hedge accounting. The gain or loss on derivative instruments designated and qualifying for cash flow hedge accounting is deferred in other comprehensive income. The changes in fair value for all trades that are not designated for hedge accounting are recognized in current period earnings. Deferred gains or losses from designated cash flow hedges are reclassified into earnings in the period that the hedged interest expense affects earnings. The effectiveness of cash flow hedges is assessed at inception and quarterly thereafter. The Company does not offset fair value amounts recognized for derivative instruments in its Consolidated Balance Sheets for presentation purposes. Credit risk related to derivative transactions reflects the risk that a party to the transaction could fail to meet its obligation under the derivative contracts. Therefore, the Company’s exposure to the counterparty’s credit risk is generally limited to the amounts, if any, by which the counterparty’s obligations to the Company exceed the Company’s obligations to the counterparty. The Company’s policy is to enter into contracts only with financial institutions which meet certain minimum credit ratings to help mitigate counterparty credit risk. As of October 31, 2021, the Company had the following outstanding derivatives designated as hedging instruments:
(In millions, except for number of instruments) | Number of Instruments |  | Notional Value
Interest Rate Swap Contracts | 3 |  | $ | 1,000 |
These contracts have remaining maturities of six years or less. The pre-tax impact of gain on derivatives designated for hedge accounting recognized in other comprehensive income (loss) was $17.2 million ($13.1 million, net of tax) as of October 31, 2021. The pre-tax impact of loss on derivatives designated for hedge accounting recognized in other comprehensive income (loss) was $17.1 million ($13.0 million, net of tax) as of October 31, 2020. The following table summarizes the fair values of derivative instruments as of the periods indicated and the line items in the accompanying Consolidated Balance Sheets where the instruments are recorded:
|  |  |  | Derivative Assets
(In millions) |  |  |  |  |  |  |  |  |  | October 31, 2021 |  | October 31, 2020 |  |
Derivatives designated as cash flow hedges |  |  |  |  |  |  |  | Balance sheet location |  |  |  |  |  |
Interest rate swap contracts |  |  |  |  |  |  |  | Other current assets |  | $ | — |  |  | $ | — |  |  |
Interest rate swap contracts |  |  |  |  |  |  |  | Other non-current assets |  | 17.2 |  |  | — |  |  |
|  |  |  |  |  |  |  |  |  | $ | 17.2 |  |  | $ | — |  |  |
|  |  |  | Derivative Liabilities
(In millions) |  |  |  |  |  |  |  |  |  | October 31, 2021 |  | October 31, 2020 |  |
Derivatives designated as cash flow hedges |  |  |  |  |  |  |  | Balance sheet location |  |  |  |  |  |
Interest rate swap contracts |  |  |  |  |  |  |  | Other current liabilities |  | $ | — |  |  | $ | 0.6 |  |  |
Interest rate swap contracts |  |  |  |  |  |  |  | Other non-current liabilities |  | — |  |  | 16.5 |  |  |
|  |  |  |  |  |  |  |  |  | $ | — |  |  | $ | 17.1 |  |  |
The following table summarizes the amounts recognized with respect to our derivative instruments within the accompanying Consolidated Statements of Income:
Periods Ended October 31, |  |  |  |  |  |  |
(In millions) |  |  | 2021 |  | 2020 |  | 2019
Derivatives designated as cash flow hedges |  | Location of Loss Recognized on Derivatives |  |  |  |  |
Interest rate swap contracts |  | Interest expense | $ | 8.0 |  |  | $ | 3.7 |  |  | $ | — |
The Company expects that $5.1 million recorded as a component of accumulated other comprehensive income (loss) will be realized in the Consolidated Statements of Income over the next twelve months and the amount will vary depending on prevailing interest rates. The following table details the changes in accumulated other comprehensive income:
(In millions) |  | Amount
Balance as of October 31, 2019 |  | $ | — |
Amount recognized in other comprehensive income on interest rate swap contracts, gross ($(15.8), net of tax) |  | (20.8) |
Amount reclassified from other comprehensive income into earnings, gross ($2.8, net of tax) |  | 3.7 |
Balance loss as of October 31, 2020 |  | $ | (17.1) |
Amount recognized in other comprehensive income on interest rate swap contracts, gross ($20.0, net of tax) |  | 26.3 |
Amount reclassified from other comprehensive income into earnings, gross ($6.1, net of tax) |  | 8.0 |
Balance gain as of October 31, 2021 |  | $ | 17.2 |

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- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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