DERIVATIVE INSTRUMENTS (Tables)

6 Months Ended

Apr. 30, 2014

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
	2014	2013	2014	2013
Interest rate contracts *	$ (12)	$ 70	$ (81)	$ (3)
Borrowings **	13	(70)	80	5

* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $41 million and $41 million during the second quarter of 2014 and 2013 and $77 million and $79 million during the first six months of 2014 and 2013, respectively.

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $66 million and $68 million during the second quarter of 2014 and 2013 and $125 million and $135 million during the first six months of 2014 and 2013, 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 2014		October 31 2013		April 30 2013
Designated as hedging instruments:
Interest rate contracts	$	247	$	295	$	525
Cross-currency interest rate contracts	14		14		5
Total designated	261		309		530

Not designated as hedging instruments:
Interest rate contracts	49		52		64
Foreign exchange contracts	20		32		25
Cross-currency interest rate contracts	2		1
Total not designated	71		85		89
Total derivatives	$	332	$	394	$	619

Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	92	$	71	$	8
Cross-currency interest rate contracts			16		49
Total designated	92		87		57

Not designated as hedging instruments:
Interest rate contracts	44		49		58
Foreign exchange contracts	33		42		36
Cross-currency interest rate contracts			1		5
Total not designated	77		92		99
Total derivatives	$	169	$	179	$	156

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	2014		2013		2014		2013
Fair Value Hedges:
Interest rate contracts	Interest	$	29	$	111	$	(4)	$	76

Cash Flow Hedges:
Recognized in OCI
(Effective Portion):
Interest rate contracts	OCI (pretax) *	(2)		(6)		(5)		(8)
Foreign exchange contracts	OCI (pretax) *	(3)		(10)		(5)		12

Reclassified from OCI
(Effective Portion):
Interest rate contracts	Interest *	(3)		(6)		(8)		(11)
Foreign exchange contracts	Other *	(1)		(13)		(6)		6

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

Not Designated as Hedges:
Interest rate contracts	Interest *	$	2	$	(5)	$	4	$	(4)
Foreign exchange contracts	Cost of sales	(26)		(7)		30		(7)
Foreign exchange contracts	Other *	(76)		52		11		1
Total not designated		$	(100)	$	40	$	45	$	(10)

* 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, 2014	Gross Amounts Recognized		Netting Arrangements		Collateral Received		Net Amount
Derivatives:
Assets	$	332	$	(95)	$	(5)	$	232
Liabilities	169		(95)				74

October 31, 2013	Gross Amounts Recognized		Netting Arrangements		Collateral Received		Net Amount
Derivatives:
Assets	$	394	$	(120)	$	(8)	$	266
Liabilities	179		(120)				59

April 30, 2013	Gross Amounts Recognized		Netting Arrangements		Collateral Received		Net Amount
Derivatives:
Assets	$	619	$	(89)	$	(78)	$	452
Liabilities	156		(89)				67