PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

12 Months Ended

Oct. 31, 2014

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:

	2014		2013		2012
Pensions
Service cost	$	244	$	273	$	220
Interest cost	480		439		465
Expected return on plan assets	(776)		(778)		(787)
Amortization of actuarial loss	177		265		202
Amortization of prior service cost	25		12		47
Early-retirement benefits					3
Other postemployment benefits	5
Settlements/curtailments	9		2		10
Net cost	$	164	$	213	$	160
Weighted-average assumptions
Discount rates	4.5%		3.8%		4.4%
Rate of compensation increase	3.8%		3.9%		3.9%
Expected long-term rates of return	7.5%		7.8%		8.0%

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:

	2014		2013		2012
Health care and life insurance
Service cost	$	44	$	58	$	49
Interest cost	267		255		281
Expected return on plan assets	(72)		(84)		(100)
Amortization of actuarial loss	33		141		136
Amortization of prior service credit	(3)		(8)		(15)
Settlements/curtailments	(1)
Net cost	$	268	$	362	$	351
Weighted-average assumptions
Discount rates	4.7%		3.8%		4.4%
Expected long-term rates of return	7.2%		7.5%		7.7%

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:

	2014		2013		2012
Pensions
Net cost	$	164	$	213	$	160
Retirement benefit adjustments included in other comprehensive (income) loss:
Net actuarial (gain) loss	940		(1,481)		999
Prior service (credit) cost			(26)		5
Amortization of actuarial loss	(177)		(265)		(202)
Amortization of prior service cost	(25)		(12)		(47)
Settlements/curtailments	(9)		(2)		(10)
Total (gain) loss recognized in other comprehensive (income) loss	729		(1,786)		745
Total recognized in comprehensive (income) loss	$	893	$	(1,573)	$	905

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:

	2014		2013		2012
Health care and life insurance
Net cost	$	268	$	362	$	351
Retirement benefit adjustments included in other comprehensive (income) loss:
Net actuarial (gain) loss	748		(1,165)		335
Prior service (credit) cost	(370)		(2)		2
Amortization of actuarial loss	(33)		(141)		(136)
Amortization of prior service credit	3		8		15
Settlements/curtailments	1
Total (gain) loss recognized in other comprehensive (income) loss	349		(1,300)		216
Total recognized in comprehensive (income) loss	$	617	$	(938)	$	567

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:

	Pensions				Health Care and Life Insurance
	2014		2013		2014		2013
Change in benefit obligations
Beginning of year balance	$	(10,968)	$	(11,834)	$	(5,926)	$	(7,023)
Service cost	(244)		(273)		(44)		(58)
Interest cost	(480)		(439)		(267)		(255)
Actuarial gain (loss)	(1,306)		951		(757)		1,092
Amendments			26		370		2
Benefits paid	675		655		336		329
Health care subsidies					(22)		(16)
Other postemployment benefits	(5)
Settlements/curtailments	2		3
Foreign exchange and other	136		(57)		6		3
End of year balance	(12,190)		(10,968)		(6,304)		(5,926)
Change in plan assets (fair value)
Beginning of year balance	11,008		10,017		1,157		1,287
Actual return on plan assets	1,132		1,312		81		158
Employer contribution	87		301		51		37
Benefits paid	(675)		(655)		(336)		(329)
Settlements/curtailments	(2)		(3)
Foreign exchange and other	(103)		36		4		4
End of year balance	11,447		11,008		957		1,157
Funded status	$	(743)	$	40	$	(5,347)	$	(4,769)
Weighted-average assumptions
Discount rates	4.0%		4.5%		4.2%		4.7%
Rate of compensation increase	3.8%		3.8%

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:

	Pensions				Health Care and Life Insurance
	2014		2013		2014		2013
Amounts recognized in balance sheet
Noncurrent asset	$	262	$	551
Current liability	(51)		(58)		$	(21)	$	(21)
Noncurrent liability	(954)		(453)		(5,326)		(4,748)
Total	$	(743)	$	40	$	(5,347)	$	(4,769)
Amounts recognized in accumulated other comprehensive income – pretax
Net actuarial loss	$	4,266	$	3,512	$	1,675	$	960
Prior service cost (credit)	42		67		(407)		(41)
Total	$	4,308	$	3,579	$	1,268	$	919

Schedule of Accumulated Other Comprehensive Income Expected to be Amortized as Net Expense (Income) During Fiscal 2015

The amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) during fiscal 2015 in millions of dollars follow:

	Pensions			Health Care and Life Insurance
Net actuarial loss		$	222		$	93
Prior service cost (credit)			25			(77)
Total		$	247		$	16

Schedule of Future Benefits Expected to be Paid from the Benefit Plans

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

	Pensions		Health Care and Life Insurance*
2015	$	677	$	327
2016	670		334
2017	677		350
2018	682		353
2019	684		353
2020 to 2024	3,485		1,754

* Net of prescription drug group benefit subsidy under Medicare Part D.

Fair Values of Pension Plan and Health Care Assets

The fair values of the pension plan assets at October 31, 2014 follow in millions of dollars:

	Total		Level 1		Level 2		Level 3
Cash and short-term investments	$	1,085	$	426	$	659
Equity:
U.S. equity securities	3,084		3,084
U.S. equity funds	42		4		38
International equity securities	1,972		1,972
International equity funds	456		74		382
Fixed Income:
Government and agency securities	436		412		24
Corporate debt securities	324		1		323
Mortgage-backed securities	96		11		85
Fixed income funds	1,080		127		953
Real estate	574		132		8		$	434
Private equity/venture capital	1,578						1,578
Hedge funds	593						593
Other investments	324		3		321
Derivative contracts - assets*	322		14		308
Derivative contracts - liabilities**	(39)		(9)		(30)
Receivables, payables and other	(3)		(3)
Securities lending collateral	847				847
Securities lending liability	(847)				(847)
Securities sold short	(477)		(477)
Total net assets	$	11,447	$	5,771	$	3,071	$	2,605

*     Includes contracts for interest rates of $246 million, foreign currency of $61 million, equity of $11 million and other of $4 million.

**    Includes contracts for interest rates of $6 million, foreign currency of $25 million and other of $8 million.

The fair values of the health care assets at October 31, 2014 follow in millions of dollars:

	Total		Level 1		Level 2		Level 3
Cash and short-term investments	$	55	$	37	$	18
Equity:
U.S. equity securities	223		223
U.S. equity funds	87		87
International equity securities	57		57
International equity funds	121				121
Fixed Income:
Government and agency securities	164		159		5
Corporate debt securities	33				33
Mortgage-backed securities	13				13
Fixed income funds	70		1		69
Real estate	17		5				$	12
Private equity/venture capital	44						44
Hedge funds	72				56		16
Other investments	9				9
Derivative contracts - assets*	5				5
Derivative contracts - liabilities**	(1)				(1)
Receivables, payables and other	1		1
Securities lending collateral	126				126
Securities lending liability	(126)				(126)
Securities sold short	(13)		(13)
Total net assets	$	957	$	557	$	328	$	72

*     Includes contracts for interest rates of $3 million and foreign currency of $2 million.

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

The fair values of the pension plan assets at October 31, 2013 follow in millions of dollars:

	Total		Level 1		Level 2		Level 3
Cash and short-term investments	$	1,190	$	317	$	873
Equity:
U.S. equity securities	3,321		3,321
U.S. equity funds	47		5		42
International equity securities	1,953		1,953
International equity funds	481		68		413
Fixed Income:
Government and agency securities	391		370		21
Corporate debt securities	278				278
Mortgage-backed securities	106		14		92
Fixed income funds	601		91		510
Real estate	550		110		12		$	428
Private equity/venture capital	1,416						1,416
Hedge funds	529				379		150
Other investments	389		3		386
Derivative contracts - assets*	769		10		759
Derivative contracts - liabilities**	(591)		(6)		(585)
Receivables, payables and other	14		14
Securities lending collateral	716				716
Securities lending liability	(716)				(716)
Securities sold short	(436)		(436)
Total net assets	$	11,008	$	5,834	$	3,180	$	1,994

*     Includes contracts for interest rates of $749 million, foreign currency of $10 million, equity of $9 million and other of $1 million.

**    Includes contracts for interest rates of $563 million, foreign currency of $22 million and other of $6 million.

The fair values of the health care assets at October 31, 2013 follow in millions of dollars:

	Total		Level 1		Level 2		Level 3
Cash and short-term investments	$	58	$	29	$	29
Equity:
U.S. equity securities	298		298
U.S. equity funds	84		84
International equity securities	71		71
International equity funds	187				187
Fixed Income:
Government and agency securities	184		180		4
Corporate debt securities	33				33
Mortgage-backed securities	11				11
Fixed income funds	58				58
Real estate	52		6		31		$	15
Private equity/venture capital	48						48
Hedge funds	71				66		5
Other investments	13				13
Derivative contracts - assets*	4				4
Derivative contracts - liabilities**	(1)				(1)
Receivables, payables and other	1		1
Securities lending collateral	109				109
Securities lending liability	(109)				(109)
Securities sold short	(15)		(15)
Total net assets	$	1,157	$	654	$	435	$	68

*     Includes contracts for interest rates of $3 million and foreign currency of $1 million.

**    Includes contracts for foreign currency 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:

	Total		Real Estate		Private Equity/ Venture Capital		Hedge Funds
October 31, 2012*	$	1,969	$	436	$	1,373	$	160
Realized gain	58				51		7
Change in unrealized gain	220		68		142		10
Purchases, sales and settlements - net	(185)		(61)		(102)		(22)
October 31, 2013*	2,062		443		1,464		155
Realized gain	105		1		77		27
Change in unrealized gain (loss)	153		20		145		(12)
Purchases, sales and settlements - net	212		(18)		(64)		294
Transfers in	145						145
October 31, 2014*	$	2,677	$	446	$	1,622	$	609

*     Health care Level 3 assets represent approximately 3 percent to 4 percent of the reconciliation amounts for 2014, 2013 and 2012.