13.	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 January 31, 2018, we recognized losses of $964 on foreign currency forward contracts and losses of $982 from the change in fair value of balance sheet positions. For the three months ended January 31, 2017, we recognized losses of $213 on foreign currency forward contracts and gains of $203 from the change in fair value of balance sheet positions.

The following table summarizes, by currency, the foreign currency forward contracts outstanding at January 31, 2018:

	Sell				Buy
	Notional Amounts		Fair Market Value		Notional Amounts		Fair Market Value
Euro	$	151,860	$	156,357	$	82,214	$	83,310
British pound		42,565		43,469		54,821		57,017
Japanese yen		55,161		56,229		25,348		25,996
Australian dollar		559		564		7,874		8,317
Hong Kong dollar		—		—		107,854		107,503
Singapore dollar		975		996		12,738		13,116
Others		6,626		6,741		52,464		53,970
Total	$	257,746	$	264,356	$	343,313	$	349,229

The carrying amounts and fair values of financial instruments at January 31, 2018, other than cash and cash equivalents, receivables and accounts payable, are shown in the table below. The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these instruments.

Carrying

Amount

Fair

Value

Long-term debt, including current maturities

1,585,430

1,582,964

Foreign currency forward contracts (net)

(674

)

(674

)

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