FAIR VALUE MEASUREMENTS

12 Months Ended

Oct. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

FAIR VALUE MEASUREMENTS

The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands):

	As of October 31, 2018
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Deferred compensation plans:
Corporate-owned life insurance		$—		$123,255		$—		$123,255
Money market funds	3,560		—		—		3,560
Equity securities	3,179		—		—		3,179
Mutual funds	1,437		—		—		1,437
Other	1,306		—		—		1,306
Total assets		$9,482		$123,255		$—		$132,737
Liabilities:
Contingent consideration		$—		$—		$20,875		$20,875

	As of October 31, 2017
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Deferred compensation plans:
Corporate-owned life insurance		$—		$113,220		$—		$113,220
Money market funds	3,972		—		—		3,972
Equity securities	2,895		—		—		2,895
Mutual funds	1,541		—		—		1,541
Other	1,246		—		—		1,246
Total assets		$9,654		$113,220		$—		$122,874
Liabilities:
Contingent consideration		$—		$—		$27,573		$27,573

The Company maintains two non-qualified deferred compensation plans.  The assets of the HEICO Corporation Leadership Compensation Plan ("HEICO LCP") principally represent cash surrender values of life insurance policies, which derive their fair values from investments in mutual funds that are managed by an insurance company and are classified within Level 2 and valued using a market approach. Certain other assets of the HEICO LCP represent investments in money market funds that are classified within Level 1. The assets of the Company's other deferred compensation plan are principally invested in equity securities and mutual funds that are classified within Level 1. The assets of both plans are held within irrevocable trusts and classified within other assets in the Company’s Consolidated Balance Sheets.

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2017, the Company may be obligated to pay contingent consideration of $20.0 million in fiscal 2023 should the acquired entity meet certain earnings objectives during the first six years following the acquisition. As of October 31, 2018, the estimated fair value of the contingent consideration was $13.9 million.

As part of the agreement to acquire certain assets of a company by the ETG in fiscal 2016, the Company may be obligated to pay contingent consideration of up to $1.7 million in aggregate during the first four years following the first anniversary of the acquisition. During fiscal 2018, the Company paid $.3 million of contingent consideration based on the actual financial performance of the acquired entity during the second year following the acquisition. As of October 31, 2018, the estimated fair value of the remaining contingent consideration was $1.2 million.

As part of the agreement to acquire a subsidiary by the FSG in fiscal 2015, the Company may be obligated to pay contingent consideration of up to €6.1 million per year should the acquired entity meet certain earnings objectives during each of the first four years following the acquisition. The estimated fair value of the aggregate contingent consideration as of October 31,

2017 for the third and fourth year following the acquisition was €10.8 million, or $12.6 million. During fiscal 2018, the Company paid €4.4 million, or $5.1 million, of contingent consideration based on the lower actual than anticipated earnings of the acquired entity during the third year following the acquisition and recognized a €1.3 million, or $1.8 million, reduction in accrued contingent consideration based principally on the lower actual than anticipated earnings. As of October 31, 2018, the estimated fair vale of the contingent consideration for the fourth year following the acquisition was €5.1 million, or $5.8 million.

The estimated fair value of the contingent consideration arrangements described above are classified within Level 3 and were determined using a probability-based scenario analysis approach. Under this method, a set of discrete potential future subsidiary earnings was determined using internal estimates based on various revenue growth rate assumptions for each scenario. A probability of likelihood was assigned to each discrete potential future earnings estimate and the resultant contingent consideration was calculated. The resulting probability-weighted contingent consideration amounts were discounted using a weighted average discount rate reflecting the credit risk of HEICO. Changes in either the revenue growth rates, related earnings or the discount rate could result in a material change to the amount of contingent consideration accrued and such changes will be recorded in the Company's consolidated statements of operations.

The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of October 31, 2018 are as follows:

	Fiscal 2017 Acquisition			Fiscal 2016 Acquisition				Fiscal 2015 Acquisition
Compound annual revenue growth rate range	(4%)	-	7%	4	%	-	13%	10	%	-	13%
Weighted average discount rate	6.3%			4.8%				.8%

Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) during fiscal 2018 and 2017 are as follows (in thousands):

	Liabilities
Balance as of October 31, 2016		$18,881
Contingent consideration related to acquisition	13,797
Increase in accrued contingent consideration, net	1,100
Payment of contingent consideration	(7,039		)
Foreign currency transaction adjustments	834
Balance as of October 31, 2017	27,573
Payment of contingent consideration	(5,425		)
Decrease in accrued contingent consideration, net	(1,365		)
Foreign currency transaction adjustments	92
Balance as of October 31, 2018		$20,875
Included in the accompanying Consolidated Balance Sheet under the following captions:
Accrued expenses and other current liabilities		$6,107
Other long-term liabilities	14,768
		$20,875

The Company recorded the increase (decrease) in accrued contingent consideration and foreign currency transaction adjustments set forth in the table above within SG&A expenses in the Company's Consolidated Statements of Operations.     

The Company did not have any transfers between Level 1 and Level 2 fair value measurements during fiscal 2018 and 2017.

The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable and accrued expenses and other current liabilities approximate fair value as of October 31, 2018 due to the relatively short maturity of the respective instruments.  The carrying amount of long-term debt approximates fair value due to its variable interest rates.