PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

12 Months Ended

Oct. 31, 2012

PENSION AND OTHER POSTRETIREMENT BENEFITS

Components of Pension and Postretirement Benefit Costs

The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents:

	2012			2011			2010
Pensions
Service cost	$	220		$	197		$	176
Interest cost	465			492			510
Expected return on plan assets	(787		)	(793		)	(761		)
Amortization of actuarial losses	202			148			113
Amortization of prior service cost	47			46			42
Early-retirement benefits	3
Settlements/curtailments	10			1			24
Net cost	$	160		$	91		$	104
Weighted-average assumptions
Discount rates	4.4		%	5.0		%	5.5		%
Rate of compensation increase	3.9		%	3.9		%	3.9		%
Expected long-term rates of return	8.0		%	8.1		%	8.3		%

The components of net periodic postretirement benefits cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents:

	2012			2011			2010
Health care and life insurance
Service cost	$	49		$	44		$	44
Interest cost	281			326			337
Expected return on plan assets	(100		)	(113		)	(122		)
Amortization of actuarial losses	136			271			311
Amortization of prior service credit	(15		)	(16		)	(16		)
Net cost	$	351		$	512		$	554
Weighted-average assumptions
Discount rates	4.4		%	5.2		%	5.6		%
Expected long-term rates of return	7.7		%	7.7		%	7.8		%

Schedule of Benefit Plan Costs Recorded in Net Income and Other Changes in Plan Assets and Benefit Obligations Recorded in Other Comprehensive Income

The previous pension cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:

	2012			2011			2010
Pensions
Net cost	$	160		$	91		$	104
Retirement benefit adjustments included in other comprehensive (income) loss:
Net actuarial losses	999			848			227
Prior service cost	5			9			14
Amortization of actuarial losses	(202		)	(148		)	(113		)
Amortization of prior service cost	(47		)	(46		)	(42		)
Settlements/curtailments	(10		)	(1		)	(24		)
Total loss recognized in other comprehensive (income) loss	745			662			62
Total recognized in comprehensive (income) loss	$	905		$	753		$	166

The previous postretirement benefits cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:

	2012			2011			2010
Health care and life insurance
Net cost	$	351		$	512		$	554
Retirement benefit adjustments included in other comprehensive (income) loss:
Net actuarial losses (gain)	335			132			(28		)
Prior service cost	2
Amortization of actuarial losses	(136		)	(271		)	(311		)
Amortization of prior service credit	15			16			16
Total (gain) loss recognized in other comprehensive (income) loss	216			(123		)	(323		)
Total recognized in comprehensive (income) loss	$	567		$	389		$	231

Schedule of Benefit Plan Obligations, Funded Status and the Assumptions Related to Obligations

The benefit plan obligations, funded status and the assumptions related to the obligations at October 31 in millions of dollars follow:

							Health Care
							and
	Pensions						Life Insurance
	2012			2011			2012			2011
Change in benefit obligations
Beginning of year balance	$	(10,925	)	$	(10,197	)	$	(6,652	)	$	(6,467	)
Service cost	(220		)	(197		)	(49		)	(44		)
Interest cost	(465		)	(492		)	(281		)	(326		)
Actuarial losses	(947		)	(656		)	(347		)	(113		)
Amendments	(5		)	(9		)	(2		)
Benefits paid	656			648			333			340
Health care subsidy receipts							(15		)	(14		)
Settlements/curtailments	10			1
Foreign exchange and other	62			(23		)	(10		)	(28		)
End of year balance	(11,834		)	(10,925		)	(7,023		)	(6,652		)
Change in plan assets (fair value)
Beginning of year balance	9,552			9,504			1,459			1,637
Actual return on plan assets	736			600			113			95
Employer contribution	441			79			37			43
Benefits paid	(656		)	(648		)	(333		)	(340		)
Settlements	(10		)	(1		)
Foreign exchange and other	(46		)	18			11			24
End of year balance	10,017			9,552			1,287			1,459
Funded status	$	(1,817	)	$	(1,373	)	$	(5,736	)	$	(5,193	)
Weighted-average assumptions
Discount rates	3.8		%	4.4		%	3.8		%	4.4		%
Rate of compensation increase	3.9		%	3.9		%

Schedule of Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income - Pretax

The amounts recognized at October 31 in millions of dollars consist of the following:

							Health Care
							and
	Pensions						Life Insurance
	2012			2011			2012			2011
Amounts recognized in balance sheet
Noncurrent asset	$	20		$	30
Current liability	(53		)	(60		)	$	(23	)	$	(23	)
Noncurrent liability	(1,784		)	(1,343		)	(5,713		)	(5,170		)
Total	$	(1,817	)	$	(1,373	)	$	(5,736	)	$	(5,193	)
Amounts recognized in accumulated other comprehensive income — pretax
Net actuarial losses	$	5,260		$	4,473		$	2,266		$	2,067
Prior service cost (credit)	105			147			(47		)	(64		)
Total	$	5,365		$	4,620		$	2,219		$	2,003

Schedule of Accumulated Other Comprehensive Income Expected to be Amortized as Net Expense (Income) During Fiscal 2013

The amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) during fiscal 2013 in millions of dollars follow:

			Health Care
			and
	Pensions		Life Insurance
Net actuarial losses	$	263	$	147
Prior service cost (credit)	33		(6		)
Total	$	296	$	141

Schedule of Future Benefits Expected to be Paid from the Benefit Plans and Medicare Subsidy Expected to be Received

The benefits expected to be paid from the benefit plans, which reflect expected future years of service, and the Medicare subsidy expected to be received are as follows in millions of dollars:

			Health Care		Health Care
			and		Subsidy
	Pensions		Life Insurance		Receipts*
2013	$	682	$	338	$	4
2014	683		345
2015	680		356
2016	683		366
2017	689		384
2018 to 2022	3,490		1,947

* Medicare Part D subsidy.

Fair Values of Pension Plan and Health Care Assets

The fair values of the pension plan assets at October 31, 2012 follow in millions of dollars:

	Total			Level 1			Level 2			Level 3
Cash and short-term investments	$	1,166		$	287		$	879
Equity:
U.S. equity securities	2,481			2,481
U.S. equity funds	43			8			35
International equity securities	1,477			1,477
International equity funds	411			49			362
Fixed Income:
Government and agency securities	404			379			25
Corporate debt securities	220						220
Mortgage-backed securities	126						126
Fixed income funds	853			92			761
Real estate	537			104			14			$	419
Private equity/venture capital	1,319									1,319
Hedge funds	578			2			422			154
Other investments	508			1			507
Derivative contracts - assets*	721			1			720
Derivative contracts - liabilities**	(454		)	(20		)	(434		)
Receivables, payables and other	(41		)	(41		)
Securities lending collateral	223						223
Securities lending liability	(223		)				(223		)
Securities sold short	(332		)	(332		)
Total net assets	$	10,017		$	4,488		$	3,637		$	1,892

*Includes contracts for interest rates of $707 million, foreign currency of $8 million and other of $6 million.

**Includes contracts for interest rates of $418 million, foreign currency of $12 million and other of $24 million.

The fair values of the health care assets at October 31, 2012 follow in millions of dollars:

	Total			Level 1			Level 2			Level 3
Cash and short-term investments	$	78		$	11		$	67
Equity:
U.S. equity securities	319			319
U.S. equity funds	67			67
International equity securities	69			69
International equity funds	200						200
Fixed Income:
Government and agency securities	218			215			3
Corporate debt securities	35						35
Mortgage-backed securities	15						15
Fixed income funds	72						72
Real estate	53			7			29			$	17
Private equity/venture capital	54									54
Hedge funds	85						79			6
Other investments	21						21
Derivative contracts - assets*	8						8
Derivative contracts - liabilities**	(1		)				(1		)
Receivables, payables and other	8			8
Securities lending collateral	38						38
Securities lending liability	(38		)				(38		)
Securities sold short	(14		)	(14		)
Total net assets	$	1,287		$	682		$	528		$	77

*Includes contracts for interest rates of $7 million and foreign currency of $1 million.

**Includes contracts for foreign currency of $1 million.

The fair values of the pension plan assets at October 31, 2011 follow in millions of dollars:

	Total			Level 1			Level 2			Level 3
Cash and short-term investments	$	1,074		$	179		$	895
Equity:
U.S. equity securities	2,070			2,070
U.S. equity funds	49			11			38
International equity securities	1,086			1,086
International equity funds	319			29			290
Fixed Income:
Government and agency securities	543			516			27
Corporate debt securities	196						196
Mortgage-backed securities	180						180
Fixed income funds	1,077			54			1,023
Real estate	505			75			14			$	416
Private equity/venture capital	1,123									1,123
Hedge funds	608			3			462			143
Other investments	448						448
Derivative contracts - assets*	787			21			766
Derivative contracts - liabilities**	(473		)	(15		)	(458		)
Receivables, payables and other	(40		)	(40		)
Securities lending collateral	750						750
Securities lending liability	(750		)				(750		)
Total net assets	$	9,552		$	3,989		$	3,881		$	1,682

*Includes contracts for interest rates of $742 million, foreign currency of $19 million and other of $26 million.

**Includes contracts for interest rates of $442 million, foreign currency of $17 million and other of $14 million.

The fair values of the health care assets at October 31, 2011 follow in millions of dollars:

	Total			Level 1			Level 2			Level 3
Cash and short-term investments	$	58		$	7		$	51
Equity:
U.S. equity securities	372			372
U.S. equity funds	84			84
International equity securities	64			64
International equity funds	210						210
Fixed Income:
Government and agency securities	250			246			4
Corporate debt securities	39						39
Mortgage-backed securities	22						22
Fixed income funds	107						107
Real estate	57			4			32			$	21
Private equity/venture capital	55									55
Hedge funds	110						103			7
Other investments	22						22
Derivative contracts - assets*	12			1			11
Derivative contracts - liabilities**	(2		)	(1		)	(1		)
Receivables, payables and other	(1		)	(1		)
Securities lending collateral	215						215
Securities lending liability	(215		)				(215		)
Total net assets	$	1,459		$	776		$	600		$	83

*Includes contracts for interest rates of $10 million, foreign currency of $1 million and other of $1 million.

**Includes contracts for foreign currency of $1 million and other of $1 million.

Reconciliation of Level 3 Fair Value Measurements for Pension and Health Care Assets

A reconciliation of Level 3 pension and health care asset fair value measurements in millions of dollars follows:

						Private Equity/
			Real			Venture		Hedge
	Total		Estate			Capital		Funds
October 31, 2010*	$	1,443	$	378		$	912	$	153
Realized gain	33					32		1
Change in unrealized gain	192		48			141		3
Purchases, sales and settlements - net	97		11			93		(7		)
October 31, 2011*	1,765		437			1,178		150
Realized gain	18					18
Change in unrealized gain (loss)	74		(4		)	65		13
Purchases, sales and settlements - net	112		3			112		(3		)
October 31, 2012*	$	1,969	$	436		$	1,373	$	160

* Health care Level 3 assets represent approximately 4 percent to 5 percent of the reconciliation amounts for 2012, 2011 and 2010.