Derivatives and Hedging

9 Months Ended

Apr. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging

Derivatives and Hedging

The fair value of our derivative instruments and the associated notional amounts, presented on a pre-tax basis, were as follows:

	April 30, 2020				July 31, 2019
			Fair Value in				Fair Value in
			Other Current				Other Current
Cash Flow Hedges	Notional		Liabilities		Notional		Liabilities
Foreign currency forward contracts	$	12,515	$	234	$	—	$	—
Interest rate swap agreements	715,000		27,561		849,550		12,463
Total derivative financial instruments	$	727,515	$	27,795	$	849,550	$	12,463

Foreign currency forward contracts accounted for as cash flow hedges and outstanding at April 30, 2020 mature over the next two months.

Net Investment Hedges

The foreign currency transaction gains on the Euro-denominated portion of the term loan, which is designated and effective as a hedge of the Company’s net investment in its Euro-denominated functional currency subsidiaries, are included as a component of the foreign currency translation adjustment. Gains for the three and nine months ended April 30, 2020, net of tax, were $6,293 and $9,136, respectively.

There were no amounts reclassified out of accumulated other comprehensive income ("AOCI") pertaining to the net investment hedge during the three and nine months ended April 30, 2020.

Derivatives Not Designated as Hedging Instruments

The Company entered into a deal-contingent, foreign currency forward contract on September 18, 2018 related to its acquisition of EHG. Hedge accounting was not applied to this instrument, and therefore all changes in fair value were recorded in earnings.

This contract was settled in connection with the close of the EHG acquisition on February 1, 2019 in the amount of $70,777, resulting in a loss of the same amount. Of this $70,777 total loss, a gain of $2,930 and a loss of $70,777 were recognized in the three and nine months ended April 30, 2019, respectively, and are included in Acquisition-related costs in the Condensed Consolidated Statements of Income and Comprehensive Income.

The Company also has certain other derivative instruments which have not been designated as hedges. These other derivative instruments had a notional amount totaling approximately $38,827 and a fair value of $1,604 which is included in Other current liabilities in the Condensed Consolidated Balance Sheet as of April 30, 2020. These other derivative instruments had a notional amount totaling approximately $35,700 and a fair value of $1,226, as of July 31, 2019.

The total amounts presented in the Condensed Consolidated Statements of Income and Comprehensive Income (Loss) due to changes in the fair value of the following derivative instruments are as follows:

	Three Months Ended		Nine Months Ended
	April 30, 2020		April 30, 2020
Gain (Loss) on Derivatives Designated as Cash Flow Hedges
Gain (Loss) recognized in Other Comprehensive Income, net of tax
Foreign currency forward contracts	$	856	$	(159)
Interest rate swap agreements	(8,619)		(11,550)
Total (loss)	$	(7,763)	$	(11,709)

	Three Months Ended				Nine Months Ended
	April 30, 2020				April 30, 2020
			Interest				Interest
	Sales		Expense		Sales		Expense
(Loss) Reclassified from AOCI, Net of Tax
Foreign currency forward contracts	$	(121)	$	—	$	(555)	$	—
Interest rate swap agreements	—		(1,383)		—		(2,897)
(Loss) on Derivatives Not Designated as Hedging Instruments
Amount of loss recognized in income, net of tax
Interest rate swap agreements	—		(107)		—		(275)
Total (loss)	$	(121)	$	(1,490)	$	(555)	$	(3,172)

	Three Months Ended		Nine Months Ended
	April 30, 2019		April 30, 2019
Gain (Loss) on Derivatives Designated as Cash Flow Hedges
Designated as Cash Flow Hedges
Gain (Loss) recognized in Other Comprehensive Income, net of tax
Foreign currency forward contracts	$	(263)	$	(263)
Interest rate swap agreements	(3,764)		(3,764)
Total (loss)	$	(4,027)	$	(4,027)

	Three Months Ended						Nine Months Ended
	April 30, 2019						April 30, 2019
			Acquisition-		Interest				Acquisition-		Interest
	Sales		Related Costs		Expense		Sales		Related Costs		Expense
Gain (Loss) Reclassified from AOCI, Net of Tax
Foreign currency forward contracts	$	(191)	$	—	$	—	$	(191)	$	—	$	—
Interest rate swap agreements	—		—		(55)		—		—		(55)
Gain (Loss) on Derivatives Not Designated as Hedging Instruments
Amount of gain (loss) recognized in income, net of tax
Foreign currency forward contracts	(160)		2,930		—		(160)		(70,777)		—
Interest rate swap agreements	—		—		132		—		—		132
Total gain (loss)	$	(351)	$	2,930	$	77	$	(351)	$	(70,777)	$	77