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Indebtedness | 12 Months Ended
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Oct. 31, 2024
Debt Disclosure [Abstract] |
Indebtedness |
6 | Indebtedness
The following is a summary of the company's indebtedness (dollars in millions):
October 31 |  | 2024 |  | 2023
Revolving credit facility, due October 2029 |  | $ | — |  |  | $ | 40.0 |
Term loan, due October 2029 |  | 200.0 |  |  | 270.0 |
Term loan, due April 2027 |  | 200.0 |  |  | 200.0 |
3.81% series A senior notes, due June 2029 |  | 100.0 |  |  | 100.0 |
3.91% series B senior notes, due June 2031 |  | 100.0 |  |  | 100.0 |
3.97% senior notes, due June 2032 |  | 100.0 |  |  | 100.0 |
7.8% debentures, due June 2027 |  | 100.0 |  |  | 100.0 |
6.625% senior notes, due May 2037 |  | 124.2 |  |  | 124.2 |
Less: unamortized debt issuance costs |  | 2.4 |  |  | 2.7 |
Long-term debt |  | 921.8 |  | 1,031.5
Less: current portion of long-term debt |  | 10.0 |  | —
Long-term debt, less current portion |  | $ | 911.8 |  |  | $ | 1,031.5 |
Principal payments required on the company's outstanding indebtedness, based on the maturity dates defined within the company's debt arrangements, for the succeeding fiscal years is as follows (dollars in millions):
Succeeding fiscal year |  | Principal payments
2025 |  | $ | 10.0 |
2026 |  | 20.0 |
2027 |  | 270.0 |
2028 |  | 20.0 |
2029 |  | 280.0 |
Thereafter |  | 325.0 |
Total principal payments |  | $ | 925.0 |
Revolving Credit Facility On October 2, 2024, the company entered into the second amended and restated credit agreement ("2024 Credit Agreement") that provided for, among other things, a five-year unsecured revolving credit facility with a borrowing capacity of up to $900.0 million ("revolving credit facility") that matures on October 2, 2029 and replaced the company's prior $600.0 million unsecured senior revolving credit facility ("prior revolving credit facility") scheduled to mature on October 5, 2026. Included in the revolving credit facility is a $10.0 million sublimit for standby letters of credit and a $75.0 million sublimit for swingline loans. At the company's election, and with the approval of the named borrowers on the revolving credit facility and the election of the lenders to fund such increase, the aggregate maximum principal amount available under the revolving credit facility may be increased by an amount of up to $450.0 million. Funds are available under the revolving credit facility for working capital, capital expenditures, and other lawful corporate purposes, including, but not limited to, acquisitions and common stock repurchases, subject in each case to compliance with certain financial covenants as defined in the 2024 Credit Agreement. As of October 31, 2024, the company had no outstanding borrowings under the revolving credit facility and $2.7 million outstanding under the sublimit for standby letters of credit, resulting in $897.3 million of unutilized availability under the revolving credit facility. As of October 31, 2023, the company had $40.0 million outstanding borrowings under the prior revolving credit facility and $2.6 million outstanding under the sublimit for standby letters of credit, resulting in $557.4 million of unutilized availability under the prior revolving credit facility. Outstanding loans under the revolving credit facility, other than swingline loans, if applicable, bear interest at a variable rate generally based on SOFR or an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on SOFR, in each case subject to an additional basis point spread as defined in the 2024 Credit Agreement. Swingline loans under the revolving credit facility bear interest at a rate determined by the swingline lender or an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on SOFR, in each case subject to an additional basis point spread as defined in the 2024 Credit Agreement. Interest is payable quarterly in arrears. The interest rate on outstanding borrowings as of October 31, 2024 was 5.85%. During fiscal 2024, 2023 and 2022, the company incurred interest expense of $5.4 million, $5.7 million and $2.4 million, respectively, on the outstanding borrowings under the current and prior revolving credit facilities. Term Loan Maturing October 2029 The 2024 credit agreement also provided for a five-year unsecured term loan in an aggregate principal amount of $200.0 million, the entire amount of which was funded on October 2, 2024 and matures on October 2, 2029 ("2024 Term Loan"). Under the 2024 Credit Agreement, incremental term loan commitments may be established at the company's election and the approval of the lenders on the 2024 Term Loan by an amount of up to $100.0 million. Beginning December 31, 2027, the company is required to make $5.0 million quarterly principal repayments on the 2024 Term Loan, reduced by applicable prepayments. On October 2, 2029, the aggregate principal amount of any remaining outstanding borrowings under the 2024 Term Loan is required to be repaid. The 2024 Term Loan may be prepaid and terminated at the company's election at any time without penalty or premium. Amounts repaid or prepaid may not be reborrowed. As of October 31, 2024, there was $200.0 million of outstanding borrowings under the 2024 Term Loan. Outstanding borrowings under the 2024 Term Loan bear interest on the outstanding principal amount thereof for each interest period at a variable rate generally based on Term SOFR or an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on Term SOFR, in each case subject to an additional basis point spread as defined in the 2024 Credit Agreement. Interest is payable quarterly in arrears. The interest rate on outstanding borrowings as of October 31, 2024 was 5.79%. For the fiscal years ended October 31, 2024, 2023, and 2022, the company incurred interest expense of $17.0 million, $15.9 million and $5.7 million, respectively, on the outstanding borrowings under the 2024 Term Loan. Term Loan Maturing April 2027 On April 27, 2022, the company entered into a term loan credit agreement ("2022 Credit Agreement") with certain financial institutions which provided for a five-year unsecured term loan in an aggregate principal amount of $200.0 million, the entire amount of which was funded on April 27, 2022, and matures on April 27, 2027 ("2022 Term Loan"). On September 22, 2023, the company amended the 2022 Credit Agreement to permit non-cash charges in its “Consolidated EBIT” calculation among other administrative amendments. Beginning with the last business day of June 2025, the company is required to make quarterly amortization payments on the 2022 Term Loan equal to 2.5% of the original aggregate principal amount reduced by any applicable prepayments. The 2022 Term Loan may be prepaid and terminated at the company's election at any time without penalty or premium. Amounts repaid or prepaid may not be reborrowed. As of October 31, 2024, there was $200.0 million of outstanding borrowings under the 2022 Term Loan. Outstanding borrowings under the 2022 Term Loan bear interest on the outstanding principal amount thereof for each interest period at a variable rate generally based on Term SOFR or an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on Term SOFR, in each case subject to an additional basis point spread as defined in the 2022 Credit Agreement. Interest is payable quarterly in arrears. The interest rate on outstanding borrowings as of October 31, 2024 was 5.66%. For the fiscal years ended October 31, 2024, 2023, and 2022, the company incurred interest expense of $12.8 million, $11.7 million, and $3.1 million, respectively, on the outstanding borrowings under the 2022 Term Loan. 3.81% Series A and 3.91% Series B Senior Notes On April 30, 2019, the company entered into a private placement note purchase agreement with certain purchasers pursuant to which the company agreed to issue and sell an aggregate principal amount of $100.0 million of 3.81% Series A Senior Notes due June 15, 2029 ("Series A Senior Notes") and $100.0 million of 3.91% Series B Senior Notes due June 15, 2031 ("Series B Senior Notes" and together with the Series A Senior Notes, the "Senior Notes"). On June 27, 2019, the company issued $100.0 million of the Series A Senior Notes and $100.0 million of the Series B Senior Notes pursuant to the private placement note purchase agreement. The Senior Notes are unsecured senior obligations of the company. No principal is due on the Senior Notes prior to their stated due dates. The company has the right to prepay all or a portion of either series of the Senior Notes in amounts not less than 10% of the then outstanding principal amount of the series of Senior Notes being prepaid upon notice to the holders of such series for 100% of the principal amount prepaid, plus a make-whole premium, as set forth in the private placement note purchase agreement, plus accrued and unpaid interest, if any, to the date of prepayment. In addition, at any time on or after the date that is 90 days prior to the maturity date of the respective series, the company has the right to prepay all of the outstanding Senior Notes of such series for 100% of the principal amount so prepaid, plus accrued and unpaid interest, if any, to the date of prepayment. Upon the occurrence of certain change of control events, the company is required to offer to prepay all Senior Notes for 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of prepayment. Interest on the Senior Notes is payable semiannually on the 15th day of June and December in each year. For each of the fiscal years ended October 31, 2024, 2023, and 2022, the company incurred interest expense of $7.7 million, respectively. 3.97% Senior Notes On June 30, 2022, the company issued $100.0 million of 3.97% Senior Notes due June 30, 2032 ("3.97% Senior Notes") pursuant to a private placement note purchase agreement ("2022 Note Purchase Agreement") with certain purchasers. The 3.97% Senior Notes are unsecured senior obligations of the company and mature on June 30, 2032. The company has the right to prepay all or a portion of the 3.97% Senior Notes in an amount not less than 10% of the then outstanding principal amount upon notice to the holders for 100% of the prepaid principal amount plus a make-whole premium, as set forth in the 2022 Note Purchase Agreement, plus accrued and unpaid interest, if any, to the date of prepayment. In addition, at any time during the 90 day period ending on the maturity date of the 3.97% Senior Notes, the company will have the right to prepay all of the 3.97% Senior Notes for 100% of the principal amount prepaid, plus accrued and unpaid interest, if any, to the date of prepayment. Upon the occurrence of certain change of control events, the company is required to offer to prepay all of the 3.97% Senior Notes for 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of prepayment. Interest on the 3.97% Senior Notes is payable semiannually on the 30th day of June and December in each year. For the fiscal years ended October 31, 2024, 2023, and 2022, the company incurred interest expense of $4.0 million, $4.0 million, and $1.3 million, respectively, on the outstanding borrowings under the 3.97% Senior Notes. 7.8% Debentures In June 1997, the company issued $175.0 million of debt securities consisting of $75.0 million of 7.125% coupon 10-year notes which were repaid at maturity during fiscal 2007, and $100.0 million of 7.8% coupon 30-year debentures due June 15, 2027. In connection with the issuance of $175.0 million in long-term debt securities, the company paid $23.7 million to terminate three forward-starting interest rate swap agreements with notional amounts totaling $125.0 million. These swap agreements had been entered into to reduce exposure to interest rate risk prior to the issuance of the new long-term debt securities. As of the inception of one of the swap agreements, the company had received payments that were recorded as deferred income to be recognized as an adjustment to interest expense over the term of the new debt securities. As of the date the swaps were terminated, this deferred income totaled $18.7 million. The excess termination fees over the deferred income recorded was deferred and is being recognized as an adjustment to interest expense over the term of the debt securities issued. Interest on the debentures is payable semiannually on the 15th day of June and December in each year. For each of the fiscal years ended October 31, 2024, 2023, and 2022, the company incurred interest expense of $8.0 million, respectively. 6.625% Senior Notes On April 26, 2007, the company issued $125.0 million in aggregate principal amount of 6.625% senior notes due May 1, 2037 and priced at 98.513% of par value. The resulting discount of $1.9 million is being amortized over the term of the notes using the straight-line method as the results obtained are not materially different from those that would result from the use of the effective interest method. Although the coupon rate of the senior notes is 6.625%, the effective interest rate is 6.741% after taking into account the issuance discount. The senior notes are unsecured senior obligations of the company and rank equally with the company's other unsecured and unsubordinated indebtedness. The company may redeem some or all of the senior notes at any time at the greater of the full principal amount of the senior notes being redeemed or the present value of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the treasury rate plus 30 basis points, plus, in both cases, accrued and unpaid interest. In the event of the occurrence of both (i) a change of control of the company, and (ii) a downgrade of the notes below an investment grade rating by both Moody's Investors Service, Inc. and Standard & Poor's Ratings Services within a specified period, the company would be required to make an offer to purchase the senior notes at a price equal to 101% of the principal amount of the senior notes plus accrued and unpaid interest to the date of repurchase. Interest on the senior notes is payable semiannually on the 1st day of May and November in each year. For each of the fiscal years ended October 31, 2024, 2023, and 2022, the company incurred interest expense of $8.4 million, respectively. Covenants The company's debt agreements contain customary representations and warranties of the company, event of default provisions, as well as certain customary covenants, including, without limitation, financial covenants, such as the maintenance of a maximum leverage ratio; and negative covenants, which among other things, limit cash dividends, disposition of assets, consolidations and mergers, liens, and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum thresholds and exceptions. The company was in compliance with all covenants under they company's outstanding indebtedness as of October 31, 2024.

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