DERIVATIVE INSTRUMENTS (Tables)

6 Months Ended

Apr. 30, 2015

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:

	Three Months Ended April 30				Six Months Ended April 30
	2015		2014		2015		2014
Interest rate contracts *	$	(121)	$	(12)	$	55	$	(81)
Borrowings **	119		13		(54)		80

* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $44 million and $41 million during the second quarter of 2015 and 2014, respectively, and $89 million and $77 million during the first six months of 2015 and 2014, respectively.

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $69 million and $66 million during the second quarter of 2015 and 2014, respectively, and $139 million and $125 million during the first six months of 2015 and 2014, 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	April 30 2015		October 31 2014		April 30 2014
Designated as hedging instruments:
Interest rate contracts	$	282	$	266	$	247
Cross-currency interest rate contracts	14		13		14
Total designated	296		279		261
Not designated as hedging instruments:
Interest rate contracts	58		53		49
Foreign exchange contracts	38		18		20
Cross-currency interest rate contracts	12		3		2
Total not designated	108		74		71
Total derivatives	$	404	$	353	$	332
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	14	$	35	$	92
Total designated	14		35		92
Not designated as hedging instruments:
Interest rate contracts	58		46		44
Foreign exchange contracts	81		29		33
Total not designated	139		75		77
Total derivatives	$	153	$	110	$	169

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:

	Expense or	Three Months Ended				Six Months Ended
	OCI	April 30				April 30
	Classification	2015		2014		2015		2014
Fair Value Hedges:
Interest rate contracts	Interest	$	(77)	$	29	$	144	$	(4)
Cash Flow Hedges:
Recognized in OCI (Effective Portion):
Interest rate contracts	OCI (pretax) *	(1)		(2)		(6)		(5)
Foreign exchange contracts	OCI (pretax) *	1		(3)		2		(5)
Reclassified from OCI (Effective Portion):
Interest rate contracts	Interest *	(3)		(3)		(6)		(8)
Foreign exchange contracts	Other operating *	1		(1)		2		(6)
Recognized Directly in Income (Ineffective Portion)		**		**		**		**
Not Designated as Hedges:
Interest rate contracts	Interest *	$	1	$	2	$	(12)	$	4
Foreign exchange contracts	Cost of sales	(19)		(26)		26		30
Foreign exchange contracts	Other operating *	(34)		(76)		200		11
Total not designated		$	(52)	$	(100)	$	214	$	45

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

** The amount is not significant.

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

Derivatives are recorded without offsetting for netting arrangements or collateral.  The impact on the derivative assets and liabilities related to netting arrangements and any collateral received or paid follows:

April 30, 2015	Gross Amounts Recognized		Netting Arrangements		Collateral Received		Net Amount
Derivatives:
Assets	$	404	$	(76)	$	(1)	$	327
Liabilities	153		(76)				77
October 31, 2014	Gross Amounts Recognized		Netting Arrangements		Collateral Received		Net Amount
Derivatives:
Assets	$	353	$	(76)	$	(5)	$	272
Liabilities	110		(76)				34
April 30, 2014	Gross Amounts Recognized		Netting Arrangements		Collateral Received		Net Amount
Derivatives:
Assets	$	332	$	(95)	$	(5)	$	232
Liabilities	169		(95)				74