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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 3 Months Ended
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Jan. 31, 2022
Fair Value Disclosures [Abstract] |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The following table presents the fair value for those assets and (liabilities) measured on a recurring basis as of January 31, 2022 and October 31, 2021:
| January 31, 2022
| Assets |  | Liabilities
(in millions) | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Interest rate derivatives | $ | — |  |  | $ | 10.7 |  |  | $ | — |  |  | $ | 10.7 |  |  | $ | — |  |  | $ | (9.2) |  |  | $ | — |  |  | $ | (9.2) |
Foreign exchange hedges | — |  |  | 1.6 |  |  | — |  |  | 1.6 |  |  | — |  |  | (0.6) |  |  | — |  |  | (0.6) |
Insurance annuity | — |  |  | — |  |  | 20.1 |  |  | 20.1 |  |  | — |  |  | — |  |  | — |  |  | — |
Cross currency swap | — |  |  | 18.8 |  |  | — |  |  | 18.8 |  |  | — |  |  | — |  |  | — |  |  | — |
| October 31, 2021
| Assets |  | Liabilities
(in millions) | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Interest rate derivatives | $ | — |  |  | $ | 7.6 |  |  | $ | — |  |  | $ | 7.6 |  |  | $ | — |  |  | $ | (16.8) |  |  | $ | — |  |  | $ | (16.8) |
Foreign exchange hedges | — |  |  | 0.1 |  |  | — |  |  | 0.1 |  |  | — |  |  | (0.1) |  |  | — |  |  | (0.1) |
Insurance annuity | — |  |  | — |  |  | 20.9 |  |  | 20.9 |  |  | — |  |  | — |  |  | — |  |  | — |
Cross currency swap | — |  |  | 10.2 |  |  | — |  |  | 10.2 |  |  | — |  |  | (1.2) |  |  | — |  |  | (1.2) |
The carrying amounts of cash and cash equivalents, trade accounts receivable, accounts payable, current liabilities and short-term borrowings as of January 31, 2022 and October 31, 2021 approximate their fair values because of the short-term nature of these items and are not included in this table. Interest Rate Derivatives The Company has various borrowing facilities which charge interest based on the one-month U.S. dollar LIBOR rate plus a spread. In 2020, the Company entered into four interest rate swaps with a total notional amount of $200.0 million, maturing on July 15, 2029. The Company receives variable rate interest payments based upon one-month U.S. dollar LIBOR, and in return the Company is obligated to pay interest at a weighted-average interest rate of 0.90% plus a spread. This effectively converted the borrowing rate on an amount of debt equal to the outstanding notional amount of the interest rate swap from a variable rate to a fixed rate. In 2019, the Company entered into six interest rate swaps with a total notional amount of $1,300.0 million that amortize to $200.0 million over a five-year term, maturing on March 11, 2024. The outstanding notional amount as of January 31, 2022 is $500.0 million. The Company receives variable rate interest payments based upon one-month U.S. dollar LIBOR, and in return the Company is obligated to pay interest at a weighted-average interest rate of 2.49% plus a spread. This effectively converted the borrowing rate on an amount of debt equal to the outstanding notional amount of the interest rate swap from a variable rate to a fixed rate. In 2017, the Company entered into three interest rate swaps with a notional amount of $300.0 million, maturing on February 1, 2022. The Company receives variable rate interest payments based upon one-month U.S. dollar LIBOR, and in return the Company is obligated to pay interest at a fixed rate of 1.19% plus a spread. This effectively converted the borrowing rate on an amount of debt equal to the outstanding notional amount of the interest rate swap from a variable rate to a fixed rate. These derivatives are designated as cash flow hedges for accounting purposes. Accordingly, the gain or loss on these derivative instruments are reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. See Note 11 to the interim condensed consolidated financial statements for additional disclosures of the aggregate gain or loss included within other comprehensive income. The assumptions used in measuring fair value of these interest rate derivatives are considered level 2 inputs, which are based upon observable market rates, including LIBOR and interest paid based upon a designated fixed rate over the life of the swap agreements. Losses reclassified to earnings under these contracts were $4.3 million and $4.4 million for the three months ended January 31, 2022, and 2021, respectively. A derivative loss of $5.8 million, based upon interest rates at January 31, 2022, is expected to be reclassified from accumulated other comprehensive income (loss) to earnings in the next twelve months. Foreign Exchange Hedges The Company conducts business in various international currencies and is subject to risks associated with changing foreign exchange rates. The Company’s objective is to reduce volatility associated with foreign exchange rate changes. Accordingly, the Company enters into various contracts that change in value as foreign exchange rates change to protect the value of certain existing foreign currency assets and liabilities, commitments and anticipated foreign currency cash flows. As of January 31, 2022, and October 31, 2021, the Company had outstanding foreign currency forward contracts in the notional amount of $184.5 million and $81.8 million, respectively. Adjustments to fair value are recognized in earnings, offsetting the impact of the hedged profits. The assumptions used in measuring fair value of foreign exchange hedges are considered level 2 inputs, which are based on observable market pricing for similar instruments, principally foreign exchange futures contracts. Realized gains (losses) recorded in other expense, net under fair value contracts were $(2.4) million and $2.0 million for the three months ended January 31, 2022, and 2021, respectively. Within other expense, net, the Company recognized an unrealized net gain (loss) of $1.0 million and $(0.6) million during the three months ended January 31, 2022 and 2021, respectively. Cross Currency Swap The Company has operations and investments in various international locations and is subject to risks associated with changing foreign exchange rates. In October 2021, the Company entered into two cross currency interest rate swap agreements that synthetically swap $116.8 million of fixed rate debt to Euro denominated fixed rate debt at a weighted average rate of 1.26%. These agreements are designated as cash flow hedges for accounting purposes and will mature on October 2026. In August 2021, the Company entered into two cross currency interest rate swap agreements that synthetically swap $117.6 million of fixed rate debt to Euro denominated fixed rate debt at a weighted average rate of 1.19%. These agreements are designated as net investment hedges for accounting purposes and will mature in August 2026. In March 2018, the Company entered into two cross currency interest rate swap agreement that synthetically swaps $100.0 million of fixed rate debt to Euro denominated fixed rate debt at a rate of 2.35%. The agreement is designated as a net investment hedge for accounting purposes and will mature in March 2023. The gain or loss on these net investment hedge derivative instruments is included in the foreign currency translation component of other comprehensive income until the net investment is sold, diluted, or liquidated. See Note 11 to the interim condensed consolidated financial statements for additional disclosures of the aggregate gain or loss included within other comprehensive income. The gain or loss on the cash flow hedge derivative instruments is included in the unrealized foreign exchange component of other expense, offset by the underlying gain or loss on the underlying cash flows that are being hedged. Interest payments received for the cross currency swap are excluded from the net investment hedge effectiveness assessment and are recorded in interest expense, net on the consolidated statements of income. The assumptions used in measuring fair value of the cross currency swap are considered level 2 inputs, which are based upon the Euro to United States dollar exchange rate market. For the three months ended January 31, 2022 and 2021, gains recorded in interest expense, net under the cross currency swap agreements were $1.4 million and $0.6 million, respectively. Other Financial Instruments The fair values of the Company’s 2019 Credit Agreement, the U.S. Receivables Facility and the European RFA do not materially differ from carrying value as the Company’s cost of borrowing is variable and approximates current borrowing rates. The fair values of the Company’s long-term obligations are estimated based on either the quoted market prices for the same or similar issues or the current interest rates offered for the debt of the same remaining maturities, which are considered level 2 inputs in accordance with Accounting Standard Codification ("ASC") Topic 820, "Fair Value Measurements and Disclosures." The following table presents the estimated fair values of the Company’s Senior Notes due 2027:
(in millions) | January 31, 2022 |  | October 31, 2021
Senior Notes due 2027 estimated fair value | $ | 516.3 |  |  | $ | 520.0 |
Non-Recurring Fair Value Measurements The Company recognized asset impairment charges of $62.4 million and $1.3 million during the three months ended January 31, 2022 and 2021, respectively. The following table presents quantitative information about the significant unobservable inputs used to determine the fair value of the impairment of long-lived assets held and used and net assets held for sale for the three months ended January 31, 2022 and 2021:
| Quantitative Information about Level 3 Fair Value Measurements
(in millions) | Impairment Amount |  | Valuation Technique |  | Unobservable Input |  | Range of Input Values
January 31, 2022 |  |  |  |  |  |  |
Net Assets Held for Sale | $ | 62.4 |  |  | Indicative Bids |  | Indicative Bids |  | N/A
Total | $ | 62.4 |  |  |  |  |  |  |
January 31, 2021 |  |  |  |  |  |  |
Long Lived Assets | $ | 1.3 |  |  | Discounted Cash Flows; Indicative Bids |  | Discounted Cash Flows; Indicative Bids |  | N/A
Total | $ | 1.3 |  |  |  |  |  |  |
Assets and Liabilities Held for Sale During the three months ended January 31, 2022, the Company entered into a definitive agreement to divest its approximately 50% equity interest in the Flexible Products & Services business to its joint venture partner, Gulf Refined Packaging (the "FPS Divestiture"). This agreement triggered the reclassification of the Flexible Products & Services business to assets and liabilities held for sale, which further resulted in recognized impairment charges of $62.4 million. Included in the asset impairment, was $112.0 million related to the expected release of cumulative translation adjustment losses associated with the foreign subsidiaries classified as held for sale. During the three months ended January 31, 2021, the Company recorded no impairment charges related to assets and liabilities held for sale. The assumptions used in measuring fair value of assets and liabilities held for sale are considered level 3 inputs, which include recent purchase offers, market comparables and/or data obtained from commercial real estate brokers. Long-Lived Assets As necessary, based on triggering events, the Company measures long-lived assets at fair value on a non-recurring basis. The Company recorded no impairment charges related to both properties, plants and equipment, net and intangible assets during the three months ended January 31, 2022 and $1.3 million impairment charges related to both properties, plants and equipment, net and intangible assets during the three months ended January 31, 2021, respectively. The assumptions used in measuring fair value of long-lived assets are considered level 3 inputs, which include bids received from third parties, recent purchase offers, market comparable information and discounted cash flows based on assumptions that market participants would use.

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- Definition The entire disclosure for derivatives and fair value of assets and liabilities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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