DERIVATIVE INSTRUMENTS (Tables)

12 Months Ended

Oct. 31, 2014

DERIVATIVE INSTRUMENTS

Fair Value Hedge Interest Rate Contracts and Underlying Borrowings

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

	2014			2013
Interest rate contracts*	$	(13	)	$	(244	)
Borrowings**	11			244

*	Includes changes in fair values of interest rate contracts excluding net accrued interest income of $168 million and $155 million during 2014 and 2013, respectively.
**	Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $267 million and $261 million during 2014 and 2013, respectively.

Fair Value of Derivative Instruments in Consolidated Balance Sheet

Fair values of derivative instruments in the consolidated balance sheet at October 31 in millions of dollars follow:

	2014		2013
Other Assets
Designated as hedging instruments:
Interest rate contracts	$	266	$	295
Cross-currency interest rate contracts	13		14
Total designated	279		309
Not designated as hedging instruments:
Interest rate contracts	53		52
Foreign exchange contracts	18		32
Cross-currency interest rate contracts	3		1
Total not designated	74		85
Total derivatives	$	353	$	394
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	35	$	71
Cross-currency interest rate contracts			16
Total designated	35		87
Not designated as hedging instruments:
Interest rate contracts	46		49
Foreign exchange contracts	29		42
Cross-currency interest rate contracts			1
Total not designated	75		92
Total derivatives	$	110	$	179

Gains (Losses) Related to Derivative Instruments on Statement of 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:

	2014		2013		2012
Fair Value Hedges
Interest rate contracts – Interest expense	$	155	$	(89)	$	335
Cash Flow Hedges
Recognized in OCI
(Effective Portion):
Interest rate contracts – OCI (pretax)*	(10)		(15)		(28)
Foreign exchange contracts – OCI (pretax)*	(4)		58		(33)
Reclassified from OCI
(Effective Portion):
Interest rate contracts – Interest expense*	(13)		(22)		(16)
Foreign exchange contracts – Other expense*	(6)		49		(38)
Recognized Directly in Income
(Ineffective Portion)	**		**		**
Not Designated as Hedges
Interest rate contracts – Interest expense*	$	3	$	(6)	$	(13)
Foreign exchange contracts – Cost of sales	25		35		(12)
Foreign exchange contracts – Other expense*	79		20		7
Total not designated	$	107	$	49	$	(18)

*	Includes interest and foreign exchange gains (losses) from cross-currency interest rate contracts.
**	The amounts are not significant.

Impact on Derivative Assets and Liabilities Related to Netting Arrangements and Collateral

The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid follows:

	Gross Amounts Recognized		Netting Arrangements			Collateral Received			Net Amount
2014
Derivatives:
Assets	$	353	$	(76	)	$	(5	)	$	272
Liabilities	110		(76		)				34
2013
Derivatives:
Assets	$	394	$	(120	)	$	(8	)	$	266
Liabilities	179		(120		)				59