Financial instruments

9 Months Ended

Aug. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

FINANCIAL INSTRUMENTS

FINANCING ARRANGEMENTS AND FINANCIAL INSTRUMENTS

We use derivative financial instruments to enhance our ability to manage risk, including foreign currency and interest rate exposures, which exist as part of our ongoing business operations. We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instruments. The use of derivative financial instruments is monitored through regular communication with senior management and the use of written guidelines.

In August 2013, we issued $250 million of 3.50% Notes due 2023, with net cash proceeds received of $246.2 million. Interest is payable semiannually in arrears in March and September of each year. Of these Notes, $175 million were subject to interest rate hedges as further disclosed below. The net proceeds from this offering, plus cash on hand, were used to pay off $250 million of 5.25% Notes that matured in September 2013.

In November 2012, April and August 2013, we entered into a total of $175 million of forward starting interest rate swap and Treasury rate lock agreements to manage our interest rate risk associated with the anticipated issuance of fixed rates notes in August 2013. We cash settled all of these agreements, which were designated as cash flow hedges, for a gain of $9.0 million simultaneous with the issuance of the notes at an all in effective fixed rate of 3.30% on the full $250 million of notes. The gain on these agreements is deferred in accumulated other comprehensive income and will be amortized to reduce interest expense over the life of the notes. Hedge ineffectiveness of these agreements was not material.

As of August 31, 2013, the maximum time frame for our foreign exchange forward contracts is 15 months. For all derivatives, the net amount of accumulated other comprehensive income expected to be reclassified in the next 12 months is $0.8 million as an increase to earnings.

All derivatives are recognized at fair value in the balance sheet and recorded in either current or noncurrent other assets or other accrued liabilities or other long-term liabilities depending upon nature and maturity.

The following table discloses the fair values of derivative instruments on our balance sheet (in millions):

As of August 31, 2013	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	Notional Amount		Fair Value		Balance Sheet Location	Notional Amount		Fair Value
Interest rate contracts	Other current assets	$	100.0	$	11.5
Foreign exchange contracts	Other current assets	57.5		1.4		Other accrued liabilities	$	66.0	$	1.0
Total				$	12.9				$	1.0
As of August 31, 2012	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	Notional Amount		Fair Value		Balance Sheet Location	Notional Amount		Fair Value
Interest rate contracts	Other current assets	$	100.0	$	16.6
Foreign exchange contracts	Other current assets	81.5		0.7		Other accrued liabilities	$	100.0	$	1.6
Total				$	17.3				$	1.6
As of November 30, 2012	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	Notional Amount		Fair Value		Balance Sheet Location	Notional Amount		Fair Value
Interest rate contracts	Other current assets	$	100.0	$	16.7	Other accrued liabilities	$	50.0	$	0.1
Foreign exchange contracts	Other current assets	123.1		0.9		Other accrued liabilities	65.7		1.9
Total				$	17.6				$	2.0

The following tables disclose the impact of derivative instruments on our other comprehensive income (OCI), accumulated other comprehensive income (AOCI) and our income statement for the three and nine month periods ending August 31, 2013 and 2012 (in millions):

Fair Value Hedges
Derivative	Income statement location	Expense
		For the 3 months ended August 31, 2013		For the 3 months ended August 31, 2012		For the 9 months ended August 31, 2013		For the 9 months ended August 31, 2012
Interest rate contracts	Interest  expense	$	1.2	$	1.1	$	3.7	$	3.5

Cash Flow Hedges –
For the 3 months ended August 31,
Derivative	Gain or (Loss) recognized in OCI					Income statement location	Gain or (Loss) reclassified from AOCI
	2013		2012				2013			2012
Interest rate contracts	$	4.7	$	—		Interest expense	$	(0.3	)	$	(0.3	)
Foreign exchange contracts	0.2		(1.5		)	Cost of goods sold	0.3			0.1
Total	$	4.9	$	(1.5	)		$	—		$	(0.2	)
Cash Flow Hedges –
For the 9 months ended August 31,
Derivative	Gain or (Loss) recognized in OCI					Income statement location	Gain or (Loss) reclassified from AOCI
	2013		2012				2013			2012
Interest rate contracts	$	9.2	$	—		Interest expense	$	(1.0	)	$	(1.0	)
Foreign exchange contracts	2.3		(1.9		)	Cost of goods sold	(0.4		)	0.7
Total	$	11.5	$	(1.9	)		$	(1.4	)	$	(0.3	)

The amount of gain or loss recognized in income on the ineffective portion of derivative instruments is not material. The amounts noted in the tables above for OCI do not include any adjustments for the impact of deferred income taxes.