Fair Value Measurements

3 Months Ended

Jan. 31, 2024

ASC 820-10, Fair Value Measurements and Disclosures, defines fair value, establishes guidelines and enhances disclosure requirements for fair value measurements. The accounting guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The accounting guidance also establishes a fair value hierarchy based on the independence of the source and objective evidence of the inputs used. There are three fair value hierarchies based upon the level of inputs that are significant to fair value measurement:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical instruments in active markets;

Level 2—Observable inputs other than quoted prices for identical instruments in active markets, quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in inactive markets, and model-driven valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3—Unobservable inputs derived from fair valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

On a recurring basis, we measure the fair value of certain assets and liabilities, which include cash equivalents, short-term investments, non-qualified deferred compensation plan assets, and foreign currency derivative contracts.

Our cash equivalents and short-term investments are classified within Level 1 or Level 2 because they are valued using quoted market prices in an active market or alternative independent pricing sources and models utilizing market observable inputs.

Our non-qualified deferred compensation plan assets consist of money market and mutual funds invested in domestic and international marketable securities that are directly observable in active markets and are therefore classified within Level 1.

Our foreign currency derivative contracts are classified within Level 2 because these contracts are not actively traded, and the valuation inputs are based on quoted prices and market observable data of similar instruments.

Our borrowings under our credit and term loan facilities are classified within Level 2 because these borrowings are not actively traded and have a variable interest rate structure based upon market rates currently available to us for debt with similar terms and maturities. See Note 10. Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Condensed Consolidated Financial Statements for more information on these borrowings.

Assets/Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below as of January 31, 2024:


			Fair Value Measurement Using
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Assets
Cash equivalents:
Money market funds	$	44,751	44,751		$	—	$	—



U.S. Treasury, agency & T-bills	2,886		—		2,886		—
Short-term investments:
U.S. Treasury, agency & T-bills	16,755		—		16,755		—
Municipal bonds	506		—		506		—


Corporate debt securities	102,062		—		102,062		—
Asset-backed securities	35,167		—		35,167		—


Prepaid and other current assets:
Foreign currency derivative contracts	16,489		—		16,489		—
Other long-term assets:
Deferred compensation plan assets	349,003		349,003		—		—
Total assets	$	567,619	$	393,754	$	173,865	$	—

Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts	$	5,037	$	—	$	5,037	$	—
Other long-term liabilities:
Deferred compensation plan liabilities	349,003		349,003		—		—
Total liabilities	$	354,040	$	349,003	$	5,037	$	—

Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2023:


			Fair Value Measurement Using
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Assets
Cash equivalents:
Money market funds	$	10,129	$	10,129	$	—	$	—
U.S. Treasury, agency & T-bills	2,994		—		2,994		—


Short-term investments:
U.S. Treasury, agency & T-bills	15,689		—		15,689		—
Municipal bonds	499		—		499		—
Corporate debt securities	102,375		—		102,375		—
Asset-backed securities	33,076		—		33,076		—




Prepaid and other current assets:
Foreign currency derivative contracts	13,453		—		13,453		—
Other long-term assets:
Deferred compensation plan assets	300,731		300,731		—		—
Total assets	$	478,946	$	310,860	$	168,086	$	—
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts	$	15,761	$	—	$	15,761	$	—
Other long-term liabilities:
Deferred compensation plan liabilities	300,731		300,731		—		—
Total liabilities	$	316,492	$	300,731	$	15,761	$	—

Assets/Liabilities Measured at Fair Value on a Non-Recurring Basis

Non-Marketable Equity Securities

Non-marketable equity securities are classified within Level 3 as they are valued using a combination of observable transaction price and unobservable inputs or data in an inactive market due to the absence of market price and inherent lack of liquidity.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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