XML 28 R16.htm IDEA: XBRL DOCUMENT
v3.24.3

Derivative Instruments | 9 Months Ended
--- | ---
Aug. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS: In the ordinary course of business, the Company is exposed to foreign currency risk, interest rate risk, equity risk, commodity price changes and credit risk. The Company enters into transactions, and owns monetary assets and liabilities, that are denominated in currencies other than the legal entity’s functional currency. The Company may enter into forward contracts, option contracts, swaps, or other derivative instruments to offset a portion of the risk on expected future cash flows, earnings, net investments in certain international subsidiaries and certain existing assets and liabilities. However, the Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange or interest rates. The Company does not use derivative instruments to cover equity risk and credit risk. The Company’s hedging program is not used for trading or speculative purposes. All derivatives are recognized on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded in the Consolidated Statements of Operations, or as a component of accumulated other comprehensive income (loss) ("AOCI") in the Consolidated Balance Sheets, as discussed below. Cash Flow Hedges The Company uses interest rate swap derivative contracts to economically convert a portion of its variable-rate debt to fixed-rate debt. Gains and losses on cash flow hedges are recorded in AOCI until the hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of interest payments are recognized in “Interest expense and finance charges, net” in the same period as the related expense is recognized. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Deferred gains and losses in AOCI associated with such derivative instruments are reclassified into earnings in the period of de-designation. Any subsequent changes in fair value of such derivative instruments are recorded in earnings unless they are re-designated as hedges of other transactions. The Company classifies cash flows related to the settlement of its cash flow hedges as operating activities in the Consolidated Statements of Cash Flows. The Company terminated its remaining interest rate swaps in May 2023 and had no interest rate swaps designated as cash flow hedges outstanding as of August 31, 2024. Net Investment Hedges The Company has entered into foreign currency forward contracts, as well as foreign currency forward contracts combined with zero cost foreign exchange collar contracts, to hedge a portion of its net investment in euro denominated foreign operations which are designated as net investment hedges. The Company entered into the net investment hedges to offset the risk of change in the U.S. dollar value of the Company's investment in a euro functional subsidiary due to fluctuating foreign exchange rates. Gains and losses on the net investment hedges, which have been recorded in AOCI and will remain in AOCI until the sale or substantial liquidation of the underlying assets of the Company's investment, are included within the "Foreign currency translation adjustments and other" caption on the Consolidated Statements of Comprehensive Income. The initial fair value of hedge components excluded from the assessment of effectiveness is being recognized in the Consolidated Statements of Operations under a systematic and rational method over the life of the hedging instrument. The Company classifies cash flows related to the settlement of its net investment hedges as investing activities in the Consolidated Statements of Cash Flows. Non-Designated Derivatives The Company uses short-term forward contracts to offset the foreign exchange risk of assets and liabilities denominated in currencies other than the functional currency of the respective entities. These contracts, which are not designated as hedging instruments, mature or settle within twelve months. Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates. Fair Values of Derivative Instruments in the Consolidated Balance Sheets The fair values of the Company’s derivative instruments are disclosed in Note 9 – Fair Value Measurements and summarized in the table below:
|  | Value as of
Balance Sheet Line Item (currency in thousands) |  | August 31, 2024 |  | November 30, 2023
Derivative instruments not designated as hedging instruments: |  |  |  |
Foreign exchange forward contracts (notional value) |  | $ | 1,597,525 |  |  | $ | 1,456,110 |
Other current assets |  | 9,025 |  |  | 4,326 |
Other accrued liabilities |  | 12,458 |  |  | 9,756 |
Derivative instruments designated as net investment hedges: |  |  |  |
Foreign currency forward contracts (notional value) |  | $ | 687,475 |  |  | $ | 516,250 |
Other accrued liabilities |  | 547 |  |  | 18,335 |
Other long-term liabilities |  | 21,116 |  |  | 18,041 |
Foreign exchange collar contracts (notional value) |  | $ | 300,000 |  |  | $ | — |
Other long-term assets |  | 40 |  |  | — |
Other long-term liabilities |  | 708 |  |  | — |
Volume of Activity The notional amounts of foreign exchange forward contracts represent the gross amounts of foreign currency, including, principally, the Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese yuan, Czech koruna, Danish krone, Euro, Indian rupee, Indonesian rupiah, Japanese yen, Mexican peso, Norwegian krone, Philippine peso, Polish zloty, Singapore dollar, Swedish krona, Swiss franc and Turkish lira that will be bought or sold at maturity. The notional amounts of foreign exchange collar contracts represent the amounts of put and call options to sell or purchase Euros at a predetermined strike price. The notional amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of the Company’s exposure to credit or market loss. The Company’s exposure to credit loss and market risk will vary over time as currency and interest rates change. The Effect of Derivative Instruments on AOCI and the Consolidated Statements of Operations The following table shows the gains and losses, before taxes, of the Company’s derivative instruments designated as cash flow hedges and net investment hedges in Other Comprehensive Income (“OCI”) and not designated as hedging instruments in the Consolidated Statements of Operations for the periods presented:
|  |  | Three Months Ended |  | Nine Months Ended
| Location of Gains (Losses) in Income |  | August 31, 2024 |  | August 31, 2023 |  | August 31, 2024 |  | August 31, 2023
|  |  | (currency in thousands)
Derivative instruments not designated as hedging instruments: |  |  |  |  |  |  |  |  |
(Losses) gains recognized from foreign exchange contracts, net⁽¹⁾ | Cost of revenue |  | $ | (5,699) |  |  | $ | (18,603) |  |  | $ | 749 |  |  | $ | (43,115) |
(Losses) gains recognized from foreign exchange contracts, net⁽¹⁾ | Other expense, net |  | (2,210) |  |  | 2,044 |  |  | (444) |  |  | (3,181) |
Total |  |  | $ | (7,909) |  |  | $ | (16,559) |  |  | $ | 305 |  |  | $ | (46,296) |
Derivative instruments designated as cash flow hedges: |  |  |  |  |  |  |  |  |
Gains recognized in OCI on interest rate swaps |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 937 |
Gains on interest rate swaps reclassified from AOCI into income | Interest expense and finance charges, net |  | $ | — |  |  | $ | 3,636 |  |  | $ | — |  |  | $ | 7,219 |
Derivative instruments designated as net investment hedges: |  |  |  |  |  |  |  |  |
Losses recognized in OCI on foreign exchange forward contracts |  |  | $ | (12,660) |  |  | $ | (12,580) |  |  | $ | (8,088) |  |  | $ | (27,237) |
Gains recognized in income (amount excluded from effectiveness testing) | Interest expense and finance charges, net |  | $ | 3,122 |  |  | $ | 2,303 |  |  | $ | 7,766 |  |  | $ | 6,889 |
Losses recognized in OCI on foreign exchange collar contracts(2) |  |  | $ | (668) |  |  | $ | — |  |  | $ | (668) |  |  | $ | — |
____________________________ (1) The gains and losses largely offset the currency gains and losses that resulted from changes in the assets and liabilities denominated in nonfunctional currencies. (2) The company had no foreign exchange collar contracts outstanding during the three and nine months ended August 31, 2023. Except for the net investment hedge amounts shown above, there were no gain or loss amounts excluded from the assessment of effectiveness. There are no existing gains or losses in AOCI expected to be reclassified into earnings in the normal course of business within the next 12 months. Credit exposure for derivative financial instruments is limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed the Company’s obligations to the counterparties. The Company manages the potential risk of credit losses through careful evaluation of counterparty credit standing and selection of counterparties from a limited group of financial institutions.

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

X
- 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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration