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Credit Facility | 3 Months Ended
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Jan. 31, 2021
Debt Disclosure [Abstract] |
Credit Facility | CREDIT FACILITY On September 1, 2017, we refinanced and replaced our then-existing $800.0 million credit facility with a new senior, secured five-year syndicated credit facility (the “Credit Facility”), consisting of a $900.0 million revolving line of credit and an $800.0 million amortizing term loan, both of which are scheduled to mature on September 1, 2022. In accordance with the terms of the Credit Facility, the revolving line of credit was reduced to $800.0 million on September 1, 2018. The Credit Facility also provides for the issuance of up to $300.0 million for standby letters of credit and the issuance of up to $75.0 million in swingline advances. The obligations under the Credit Facility are secured on a first-priority basis by a lien on substantially all of our assets and properties, subject to certain exceptions. To further enhance our financial flexibility as a precautionary measure in response to uncertainty arising from the Pandemic, we amended our Credit Facility (the “Amendment”) on May 28, 2020. The Amendment modified the financial covenants under the Credit Facility, including: (i) replacing a maximum total leverage ratio with a maximum total net leverage ratio that varies on a quarterly basis and adjusts to 4.00 to 1.00 by the quarter ending October 31, 2022; (ii) modifying the minimum fixed charge coverage ratio on a quarterly basis, which adjusts to 1.25 to 1.00 as of the quarter ending April 30, 2022; and (iii) adding a minimum liquidity (defined in the Amendment as domestic cash plus available revolving loans) of $250.0 million. These financial covenants were effective with the quarter ended April 30, 2020. Our borrowing capacity is subject to, and limited by, compliance with these covenants. At January 31, 2021, we were in compliance with these covenants. The Amendment also changed the interest rate, interest margins, and commitment fees applicable to loans and commitments under the Credit Facility. Prior to the Amendment, borrowings under the Credit Facility bore interest at a rate equal to 1-month LIBOR plus a spread that was based upon our leverage ratio. The spread ranged from 1.00% to 2.25% for Eurocurrency loans and 0.00% to 1.25% for base rate loans. We were also charged a commitment fee, which was paid quarterly in arrears and was based on our leverage ratio, that ranged from 0.200% to 0.350% on the average daily unused portion of the revolving line of credit. For purposes of this calculation, irrevocable standby letters of credit, which are issued primarily in conjunction with our insurance programs, and cash borrowings were included as outstanding under the line of credit. Subsequent to the Amendment, borrowings under the Credit Facility bear interest at a rate equal to 1-month LIBOR plus a spread that is based upon our total leverage ratio. The spread ranges from 1.00% to 2.75% for revolving Eurocurrency loans and 0.00% to 1.75% for revolving base rate loans. At January 31, 2021, the weighted average interest rate on our outstanding borrowings was 2.39%. We are also charged a commitment fee, which is paid quarterly in arrears and is based on our total leverage ratio, that ranges from 0.200% to 0.450% on the average daily unused portion of the revolving line of credit. For purposes of this calculation, irrevocable standby letters of credit, which are issued primarily in conjunction with our insurance programs, and cash borrowings are included as outstanding under the revolving line of credit. The Credit Facility also includes customary events of default, such as: failure to pay principal, interest, or fees when due; failure to comply with covenants; the occurrence of certain material judgments; and a change in control of the Company. If certain events of default occur, including certain cross-defaults, insolvency, change in control, or violation of specific covenants, the lenders can terminate or suspend our access to the Credit Facility, declare all amounts outstanding (including all accrued interest and unpaid fees) to be immediately due and payable, and require that we cash collateralize the outstanding standby letters of credit. Total deferred financing costs related to the Credit Facility of $18.7 million, consisting of $13.4 million related to the term loan and $5.2 million related to the line of credit, are being amortized to interest expense over the term of the Credit Facility. We incurred total fees of $4.6 million in conjunction with the Amendment, the majority of which we capitalized in the quarter ended July 31, 2020, and are amortizing over the remaining term of the Credit Facility. Credit Facility Information
(in millions) |  | January 31, 2021 |  | October 31, 2020
Current portion of long-term debt |  |  |  |
Gross term loan |  | $ | 120.0 |  |  | $ | 120.0 |
Unamortized deferred financing costs |  | (3.1) |  |  | (3.3) |
Current portion of term loan |  | $ | 116.9 |  |  | $ | 116.7 |
Long-term debt |  |  |  |
Gross term loan |  | $ | 530.0 |  |  | $ | 560.0 |
Unamortized deferred financing costs |  | (1.5) |  |  | (2.3) |
Total noncurrent portion of term loan |  | 528.5 |  |  | 557.7 |
Revolving line of credit(1)(2) |  | 45.3 |  |  | 45.3 |
Long-term debt |  | $ | 573.8 |  |  | $ | 603.0 |
(1) Standby letters of credit amounted to $151.0 million at January 31, 2021. (2) At January 31, 2021, we had borrowing capacity of $599.4 million, reflecting covenant restrictions. Term Loan Maturities During the three months ended January 31, 2021, we made principal payments under the term loan of $30.0 million. As of January 31, 2021, the following principal payments are required under the term loan.
(in millions) |  | 2021 |  | 2022
Debt maturities |  | $ | 90.0 |  |  | $ | 560.0 |
Interest Rate Swaps We enter into interest rate swaps to manage the interest rate risk associated with our floating-rate, LIBOR-based borrowings. Under these arrangements, we typically pay a fixed interest rate in exchange for LIBOR-based variable interest throughout the life of the agreement. We initially report the mark-to-market gain or loss on a derivative as a component of accumulated other comprehensive loss (“AOCL”) and subsequently reclassify the gain or loss into earnings when the hedged transactions occur and affect earnings. Interest payables and receivables under the swap agreements are accrued and recorded as adjustments to interest expense. All of our interest rate swaps have been designated and accounted for as cash flow hedges from inception. See Note 5, “Fair Value of Financial Instruments,” regarding the valuation of our interest rate swaps.
Notional Amount |  | Fixed Interest Rate |  | Effective Date |  | Maturity Date
$ 90.0 million |  | 2.83% |  | November 1, 2018 |  | April 30, 2021
$ 90.0 million |  | 2.84% |  | November 1, 2018 |  | October 31, 2021
$ 130.0 million |  | 2.86% |  | November 1, 2018 |  | April 30, 2022
$ 130.0 million |  | 2.84% |  | November 1, 2018 |  | September 1, 2022
At January 31, 2021 and October 31, 2020, amounts recorded in AOCL for interest rate swaps were a loss of $2.5 million, net of taxes of $0.5 million, and a loss of $3.3 million, net of taxes of $0.9 million, respectively. These amounts included the gain associated with the interest rate swaps we terminated in 2018, which is being amortized to interest expense as interest payments are made over the term of our Credit Facility. During the three months ended January 31, 2021, we amortized $1.2 million of this gain, net of taxes of $0.4 million, to interest expense. During the three months ended January 31, 2020, we amortized $1.2 million, net of taxes of $0.4 million. At January 31, 2021, the total amount expected to be reclassified from AOCL to earnings during the next twelve months is a loss of $4.3 million, net of a tax benefit of $1.4 million.

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- Definition The entire disclosure for the entity's debt and derivative instruments. Includes information about the amount of borrowings under the entity's line of credit and other matters important to the users of the financial statements and describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References No definition available. + Details
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