DERIVATIVE INSTRUMENTS (Tables)

3 Months Ended

Jan. 31, 2016

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
	January 31
	2016		2015
Interest rate contracts *	$	75	$	176
Borrowings **		(75)		(173)

* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $39 million and $45 million during the first three months of 2016 and 2015, respectively.

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $67 million and $70 million during the first three months of 2016 and 2015, 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:

	January 31		October 31		January 31
Other Assets	2016		2015		2015
Designated as hedging instruments:
Interest rate contracts	$	382	$	299	$	410
Cross-currency interest rate contracts		15		14		12
Total designated		397		313		422
Not designated as hedging instruments:
Interest rate contracts		55		54		68
Foreign exchange contracts		92		50		125
Cross-currency interest rate contracts		14		11		10
Total not designated		161		115		203
Total derivatives	$	558	$	428	$	625
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	7	$	8	$	7
Total designated		7		8		7
Not designated as hedging instruments:
Interest rate contracts		55		52		73
Foreign exchange contracts		24		18		49
Total not designated		79		70		122
Total derivatives	$	86	$	78	$	129

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
	OCI	January 31
	Classification	2016		2015
Fair Value Hedges:
Interest rate contracts	Interest	$	114	$	221
Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts	OCI (pretax) *		(3)		(5)
Foreign exchange contracts	OCI (pretax) *		2		1
Reclassified from OCI
(Effective Portion):
Interest rate contracts	Interest *		(3)		(3)
Foreign exchange contracts	Other operating *		2		1
Recognized Directly in Income
(Ineffective Portion)			**		**
Not Designated as Hedges:
Interest rate contracts	Interest *	$	(2)	$	(13)
Foreign exchange contracts	Cost of sales		33		45
Foreign exchange contracts	Other operating *		125		234
Total not designated		$	156	$	266

* 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:

	Gross Amounts		Netting		Collateral
January 31, 2016	Recognized		Arrangements		Received		Net Amount
Assets	$	558	$	(72)	$	(24)	$	462
Liabilities		86		(72)				14

	Gross Amounts		Netting		Collateral
October 31, 2015	Recognized		Arrangements		Received	Net Amount
Assets	$	428	$	(62)		$	366
Liabilities		78		(62)			16

	Gross Amounts		Netting		Collateral
January 31, 2015	Recognized		Arrangements		Received		Net Amount
Assets	$	625	$	(82)	$	(1)	$	542
Liabilities		129		(82)				47