Summary of Significant Accounting Policies | 6 Months Ended |
Apr. 30, 2015 |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies |
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Unaudited Interim Financial Information |
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The condensed consolidated financial statements have not been audited. We have prepared the unaudited condensed consolidated financial statements under the rules of the Securities and Exchange Commission (SEC). Therefore, certain financial information and note disclosures normally included in annual financial statements prepared in conformity with generally accepted accounting principles (GAAP) in the United States of America are omitted in this interim report under these SEC rules and regulations. These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes included in our Form 10-K for the year ended October 31, 2014. |
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Seasonality and Use of Estimates |
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The unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the statement of financial position at April 30, 2015 and October 31, 2014, the results of operations for three months and six months ended April 30, 2015 and 2014, and cash flows and stockholders’ equity for the six months ended April 30, 2015 and 2014. Our business is seasonal in nature. The results of operations for the three months and six months ended April 30, 2015 do not necessarily reflect the results to be expected for the full year. |
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In accordance with GAAP, we make certain estimates and assumptions regarding reported amounts of assets, liabilities, revenues and expenses and the related disclosures, using historical experience and other assumptions that we believe are reasonable at the time. Our estimates may involve complex situations requiring a high degree of judgment in the application and interpretation of existing literature or in the development of estimates that impact our financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and assumptions, which are evaluated on a continual basis. |
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Significant Accounting Policies |
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Our accounting policies are described in Note 1 to the consolidated financial statements in our Form 10-K for the year ended October 31, 2014. There were no significant changes to those accounting policies during the six months ended April 30, 2015. |
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Rate-Regulated Basis of Accounting |
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Our utility operations are subject to regulation with respect to rates, service area, accounting and various other matters by the regulatory commissions in the states in which we operate. The accounting regulations provide that rate-regulated public utilities account for and report assets and liabilities consistent with the economic effect of the manner in which independent third-party regulators establish rates. In applying these regulations, we capitalize certain costs and benefits as regulatory assets and liabilities, respectively, in order to provide for recovery from or refund to utility customers in future periods. Generally, regulatory assets are amortized to expense and regulatory liabilities are amortized to income over the period authorized by our regulators. |
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Our regulatory assets are recoverable through either base rates or rate riders specifically authorized by a state regulatory commission. Base rates are designed to provide both a recovery of cost and a return on investment during the period the rates are in effect. As such, all of our regulatory assets are subject to review by the respective state regulatory commissions during any future rate proceedings. In the event that accounting for the effects of regulation were no longer applicable, we would recognize a write-off of the regulatory assets and regulatory liabilities that would result in an adjustment to net income or accumulated other comprehensive income (loss) (OCIL). Our utility operations continue to recover their costs through cost-based rates established by the state regulatory commissions. As a result, we believe that the accounting prescribed under rate-based regulation remains appropriate. It is our opinion that all regulatory assets are recoverable in current rates or in future rate proceedings. Our regulatory assets and liabilities are detailed in Note 2 to the condensed consolidated financial statements in this Form 10-Q. |
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Fair Value Measurements |
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We have financial and nonfinancial assets and liabilities subject to fair value measurement. The financial assets and liabilities measured and carried at fair value in the Condensed Consolidated Balance Sheets are cash and cash equivalents, marketable securities held in rabbi trusts established for our deferred compensation plans and derivative assets and liabilities, if any, that are held for our utility operations. The carrying values of receivables, short-term debt, accounts payable, accrued interest and other current assets and liabilities approximate fair value as all amounts reported are to be collected or paid within one year. Our nonfinancial assets and liabilities include our qualified pension and postretirement plan assets and liabilities that are recorded at fair value in the Condensed Consolidated Balance Sheets in accordance with employers’ accounting and related disclosures of postretirement plans. |
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Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, or exit date. We utilize market data or assumptions that market participants would use in valuing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the market approach for fair value measurements and endeavor to utilize the best available information. Accordingly, we use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value of our financial assets and liabilities are subject to potentially significant volatility based on changes in market prices, the portfolio valuation of our contracts, as well as the maturity and settlement of those contracts, and subsequent newly originated transactions, each of which directly affects the estimated fair value of our financial instruments. We are able to classify fair value balances based on the observance of those inputs at the lowest level that is significant to the fair value measurement, in its entirety, in the fair value hierarchy levels as set forth in the fair value guidance. |
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For the fair value measurements of our derivatives and marketable securities, see Note 8 to the condensed consolidated financial statements in this Form 10-Q. For the fair value measurements of our benefit plan assets, see Note 9 to the consolidated financial statements in our Form 10-K for the year ended October 31, 2014. For further information on our fair value methodologies, see “Fair Value Measurements” in Note 1 to the consolidated financial statements in our Form 10-K for the year ended October 31, 2014. There were no significant changes to these fair value methodologies during the three months ended April 30, 2015. |
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Recently Issued Accounting Guidance |
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Guidance | Description | Effective date | Effect on the financial statements or other significant matters |
ASU 2014-09, May 2014, Revenue from Contracts with Customers (Topic 606) | Under the new standard, entities will recognize revenue to depict the transfer of goods and services to customers in amounts that reflect the payment to which the entity expects to be entitled in exchange for those goods or services. The disclosure requirements will provide information about the nature, amount, timing and uncertainty of revenue and cash flows from an entity’s contracts with customers. | Annual periods beginning after December 15, 2016, and interim periods within those periods. | We have been evaluating the effect on our financial position, results of operations and cash flows. The evaluation includes identifying revenue streams by like contracts to allow for ease of implementation. In our evaluation, we are following the efforts of an accounting utility subgroup and its issuance of a revenue implementation guide. |
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The Financial Accounting Standards Board (FASB) proposed the deferral of the effective date to annual periods beginning after December 15, 2017 (beginning November 1, 2018 for us) and interim periods within that period, with early adoption permitted for annual periods beginning after December 15, 2016. |
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ASU 2014-15, August 2014, Presentation of Financial Statements - Going Concern (Subtopic 205-40) | The FASB issued accounting guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements. An entity must provide certain disclosures if there is a "substantial doubt about the entity's ability to continue as a going concern." | Annual periods ending after December 15, 2016 (October 31, 2017 for us), and interim and annual periods thereafter; early adoption is permitted. | The adoption of this guidance will have no impact on our financial position, results of operations or cash flows. It will require establishing a going concern assessment process to meet the standard. |
ASU 2015-01, January 2015, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20) | The FASB issued accounting guidance eliminating the concept of extraordinary items, thus eliminating the need to assess whether a particular event or transaction event is extraordinary. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring, with the amendments being applicable either prospectively or retrospectively, to all prior periods presented in the financial statements. | Annual periods beginning after December 15, 2015 (November 1, 2016 for us), and interim periods within those periods, with early adoption permitted, provided that the guidance is applied from the beginning of the fiscal year of adoption. | The adoption of this guidance will be applied on a prospective basis. We have not had any extraordinary or unusual items that would impact our financial position, results of operations or cash flows. |
ASU 2015-02, February 2015, Consolidation - Amendments to the Consolidation Analysis (Topic 810) | The FASB issued accounting guidance which amends the consolidation requirements in ASC 810. The amendments significantly changes the consolidation analysis required under U.S. GAAP. The focus of this guidance is largely on the investment management industry related to limited partnerships becoming variable interest entities; however, it could have an impact on the consolidation conclusions of reporting entities in other industries. | Annual periods beginning after December 15, 2015 (November 1, 2016 for us), and interim periods within those periods, with early adoption permitted, provided that the guidance is applied from the beginning of the annual period containing the adoption date. | The adoption of this guidance will have no impact on our financial position, results of operations or cash flows. |
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ASU 2015-03, April 2015, Interest: Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs(Subtopic 835-30) | The FASB issued accounting guidance as part of its simplification initiative to reduce complexity in accounting standards. The amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this amendment. | Annual periods beginning after December 15, 2015 (November 1, 2016 for us), and interim periods within those fiscal years, with early adoption permitted for financial statements that have not been previously issued. | The adoption of this guidance will have no effect on the results of operations or cash flows. It will retrospectively affect the presentation of the balance sheet line items current and noncurrent "Regulatory assets," "Long-term debt" and "Short-term debt." |
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ASU 2015-05, April 2015, Intangibles -Goodwill and Other - Internal-Use Software: Customer's Accounting for Fees Paid in a Cloud Computing Arrangement (Subtopic 350-40) | The FASB issued accounting guidance that amends ASC 350-40 to provide customers with guidance on determining whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software. The guidance applies only to hosting arrangements if both of the following criteria are met: (a) the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty and (b) it is feasible for the customer to run the software on its own hardware or contract with another party to host the software. | Annual periods (and interim periods therein) beginning after December 15, 2015 (November 1, 2016 for us), with early adoption permitted. Entities may adopt the guidance (1) retrospectively or (2) prospectively to arrangements entered into, or materially modified, after the effective date. | We are currently evaluating the effect on our financial position, results of operations and cash flows. |
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ASU 2015-07, May 2015, Fair Value Measurement: Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (Topic 820) | The FASB issued accounting guidance that amends the required disclosure of | Annual periods beginning after December 15, 2015 (November 1, 2016 for us), and interim periods within those fiscal years, with retrospective application to all periods presented and early adoption permitted. | The adoption of this guidance will have no impact on our financial position, results of operations or cash flows. We will present certain benefit plan assets under the new guidance. |
investments for which fair value is measured at net asset value per share (or its equivalent). The amendments remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. |