14.	Financial instruments

We operate internationally and enter into intercompany transactions denominated in foreign currencies. Consequently, we are subject to market risk arising from exchange rate movements between the dates foreign currencies are recorded and the dates they are settled. We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions. These contracts usually have maturities of 90 days or less and generally require us to exchange foreign currencies for U.S. dollars at maturity, at rates stated in the contracts. These contracts are not designated as hedging instruments. We do not use financial instruments for trading or speculative purposes.

Gains and losses on foreign currency forward contracts are recorded in “Other – net” on the Consolidated Statement of Income together with the transaction gain or loss from the hedged balance sheet position. For the three months ended July 31, 2017, we recognized losses of $1,314 on foreign currency forward contracts and gains of $1,617 from the change in fair value of balance sheet positions. For the three months ended July 31, 2016, we recognized gains of $1,520 on foreign currency forward contracts and losses of $172 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2017, we recognized losses of $3,214 on foreign currency forward contracts and gains of $2,523 from the change in fair value of balance sheet positions. For the nine months ended July 31, 2016, we recognized gains of $2,382 on foreign currency forward contracts and losses of $506 from the change in fair value of balance sheet positions.

The following table summarizes, by currency, the foreign currency forward contracts outstanding at July 31, 2017:

	Sell				Buy
	Notional Amounts		Fair Market Value		Notional Amounts		Fair Market Value
Euro	$	146,936	$	152,735	$	44,062	$	45,146
British pound		31,008		31,479		44,480		45,238
Japanese yen		31,211		31,402		23,929		23,991
Australian dollar		589		600		7,333		7,863
Hong Kong dollar		—		—		96,331		95,880
Singapore dollar		568		591		12,403		12,701
Others		4,475		4,560		43,305		44,369
Total	$	214,787	$	221,367	$	271,843	$	275,188

The carrying amounts and fair values of financial instruments at July 31, 2017, other than receivables and accounts payable, are shown in the table below. The carrying values of receivables and accounts payable approximate fair value due to the short-term nature of these instruments.

	Carrying Amount			Fair Value
Cash and cash equivalents	$	110,705		$	110,705
Notes payable		957			957
Long-term debt, including current maturities		1,696,263			1,703,180
Foreign currency forward contracts (net)		(3,253	)		(3,253	)

We used the following methods and assumptions in estimating the fair value of financial instruments:

•

Cash, cash equivalents and notes payable are valued at their carrying amounts due to the relatively short period to maturity of the instruments.

•

Long-term debt is valued by discounting future cash flows at currently available rates for borrowing arrangements with similar terms and conditions, which are considered to be Level 2 inputs under the fair value hierarchy.

•

Foreign currency forward contracts are valued using observable market based inputs, which are considered to be Level 2 inputs under the fair value hierarchy.