DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Jul. 31, 2012

DERIVATIVE INSTRUMENTS

Fair Value Hedge Derivative Instruments and Related Borrowings

The gains (losses) on these contracts and the underlying borrowings recorded in interest expense were as follows in millions of dollars:

	Three Months Ended July 31				Nine Months Ended July 31
	2012		2011		2012		2011
Interest rate contracts *	$	124	$	103	$	201	$	(37)
Borrowings **	(121)		(100)		(206)		35

*Includes changes in fair values of interest rate contracts excluding net accrued interest income of $38 million and $42 million during the third quarter of 2012 and 2011 and $117 million and $129 million during the first nine months of 2012 and 2011, respectively.

**Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $70 million and $69 million during the third quarter of 2012 and 2011 and $214 million and $207 million during the first nine months of 2012 and 2011, respectively.

Fair Value of Derivative Instruments in Consolidated Balance Sheet

Fair values of derivative instruments in the condensed consolidated balance sheet in millions of dollars follow:

Other Assets	July 31 2012		October 31 2011		July 31 2011
Designated as hedging instruments:
Interest rate contracts	$	577	$	404	$	360
Cross-currency interest rate contracts	21
Total designated	598		404		360
Not designated as hedging instruments:
Interest rate contracts	76		67		28
Foreign exchange contracts	10		12		17
Cross-currency interest rate contracts	2		2		1
Total not designated	88		81		46
Total derivatives	$	686	$	485	$	406
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	7	$	13	$	1
Cross-currency interest rate contracts	86		7		7
Total designated	93		20		8
Not designated as hedging instruments:
Interest rate contracts	63		48		11
Foreign exchange contracts	52		100		86
Cross-currency interest rate contracts	1				3
Total not designated	116		148		100
Total derivatives	$	209	$	168	$	108

Derivative Instruments Effect on Consolidated Income

The classification and gains (losses) including accrued interest expense related to derivative instruments on the statement of consolidated income consisted of the following in millions of dollars:

	Expense or	Three Months Ended						Nine Months Ended
	OCI	July 31						July 31
	Classification	2012			2011			2012			2011
Fair Value Hedges:
Interest rate contracts	Interest	$	162		$	145		$	318		$	92
Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts	OCI (pretax) *	(10		)	(2		)	(21		)	(5		)
Foreign exchange contracts	OCI (pretax) *	(25		)	(20		)	(52		)	34
Reclassified from OCI
(Effective Portion):
Interest rate contracts	Interest *	(4		)	(3		)	(10		)	(18		)
Foreign exchange contracts	Other *	(25		)	(24		)	(55		)	27
Recognized Directly in Income
(Ineffective Portion)		**			**			**			**
Not Designated as Hedges:
Interest rate contracts	Interest *	$	(10	)	$	3		$	(11	)	$	1
Foreign exchange contracts	Cost of sales	(7		)	(8		)	(21		)	(80		)
Foreign exchange contracts	Other *	60			1			64			(177		)
Total not designated		$	43		$	(4	)	$	32		$	(256	)

*Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.

**The amount is not significant.