DERIVATIVE INSTRUMENTS (Tables)

6 Months Ended

Apr. 30, 2016

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				Six Months Ended
	April 30				April 30
	2016		2015		2016		2015
Interest rate contracts *	$	(9)	$	(121)	$	66	$	55
Borrowings **		8		119		(67)		(54)

* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $39 million and $44 million during the second quarter of 2016 and 2015, respectively, and $78 million and $89 million during the first six months of 2016 and 2015, respectively.

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $75 million and $69 million during the second quarter of 2016 and 2015, respectively, and $142 million and $139 million during the first six 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:


	April 30		October 31		April 30
Other Assets	2016		2015		2015
Designated as hedging instruments:
Interest rate contracts	$	368	$	299	$	282
Cross-currency interest rate contracts		13		14		14
Total designated		381		313		296

Not designated as hedging instruments:
Interest rate contracts		51		54		58
Foreign exchange contracts		38		50		38
Cross-currency interest rate contracts		9		11		12
Total not designated		98		115		108

Total derivatives	$	479	$	428	$	404

Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	8	$	8	$	14
Total designated		8		8		14

Not designated as hedging instruments:
Interest rate contracts		40		52		58
Foreign exchange contracts		96		18		81
Cross-currency interest rate contracts		1
Total not designated		137		70		139

Total derivatives	$	145	$	78	$	153

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	2016		2015		2016		2015
Fair Value Hedges:
Interest rate contracts	Interest	$	30	$	(77)	$	144	$	144

Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts	OCI (pretax) *				(1)		(3)		(6)
Foreign exchange contracts	OCI (pretax) *		(1)		1		1		2

Reclassified from OCI
(Effective Portion):
Interest rate contracts	Interest *		(2)		(3)		(5)		(6)
Foreign exchange contracts	Other operating *		(1)		1		1		2

Recognized Directly in Income
(Ineffective Portion)			**		**		**		**

Not Designated as Hedges:
Interest rate contracts	Interest *	$	5	$	1	$	3	$	(12)
Foreign exchange contracts	Cost of sales		(62)		(19)		(29)		26
Foreign exchange contracts	Other operating *		(186)		(34)		(61)		200
Total not designated		$	(243)	$	(52)	$	(87)	$	214

* 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 in millions of dollars follows:


	Gross Amounts		Netting		Collateral
April 30, 2016	Recognized		Arrangements		Received		Net Amount
Assets	$	479	$	(53)	$	(20)	$	406
Liabilities		145		(53)				92


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


	Gross Amounts		Netting		Collateral
April 30, 2015	Recognized		Arrangements		Received		Net Amount
Assets	$	404	$	(76)	$	(1)	$	327
Liabilities		153		(76)				77