PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

12 Months Ended

Oct. 31, 2015

PENSION AND OTHER POSTRETIREMENT BENEFITS

Components of Pension and Postretirement Benefit Costs

The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents:


	2015		2014		2013

Pensions
Service cost	$	282	$	244	$	273
Interest cost		474		480		439
Expected return on plan assets		(769)		(776)		(778)
Amortization of actuarial loss		223		177		265
Amortization of prior service cost		25		25		12
Other postemployment benefits		1		5
Settlements/curtailments		11		9		2
Net cost	$	247	$	164	$	213
Weighted-average assumptions
Discount rates		4.0%		4.5%		3.8%
Rate of compensation increase		3.8%		3.8%		3.9%
Expected long-term rates of return		7.3%		7.5%		7.8%

The components of net periodic postretirement benefits cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents:


	2015		2014		2013

Health care and life insurance
Service cost	$	46	$	44	$	58
Interest cost		259		267		255
Expected return on plan assets		(55)		(72)		(84)
Amortization of actuarial loss		91		33		141
Amortization of prior service credit		(77)		(3)		(8)
Settlements/curtailments		1		(1)
Net cost	$	265	$	268	$	362
Weighted-average assumptions
Discount rates		4.2%		4.7%		3.8%
Expected long-term rates of return		7.0%		7.2%		7.5%

Schedule of Benefit Plan Costs Recorded in Net Income and Other Changes in Plan Assets and Benefit Obligations Recorded in Other Comprehensive Income

The previous pension cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:


	2015		2014		2013

Pensions
Net cost	$	247	$	164	$	213
Retirement benefit adjustments included in other comprehensive (income) loss:
Net actuarial (gain) loss		361		940		(1,481)
Prior service (credit) cost		66				(26)
Amortization of actuarial loss		(223)		(177)		(265)
Amortization of prior service cost		(25)		(25)		(12)
Settlements/curtailments		(11)		(9)		(2)
Total (gain) loss recognized in other comprehensive (income) loss		168		729		(1,786)
Total recognized in comprehensive (income) loss	$	415	$	893	$	(1,573)

The previous postretirement benefits cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:


	2015		2014		2013

Health care and life insurance
Net cost	$	265	$	268	$	362
Retirement benefit adjustments included in other comprehensive (income) loss:
Net actuarial (gain) loss		(141)		748		(1,165)
Prior service credit		(3)		(370)		(2)
Amortization of actuarial loss		(91)		(33)		(141)
Amortization of prior service credit		77		3		8
Settlements/curtailments		(2)		1
Total (gain) loss recognized in other comprehensive (income) loss		(160)		349		(1,300)
Total recognized in comprehensive (income) loss	$	105	$	617	$	(938)

Schedule of Benefit Plan Obligations, Funded Status and the Assumptions Related to Obligations

The benefit plan obligations, funded status and the assumptions related to the obligations at October 31 in millions of dollars follow:


					Health Care
					and
	Pensions				Life Insurance
	2015		2014		2015		2014


Change in benefit obligations
Beginning of year balance	$	(12,190)	$	(10,968)	$	(6,304)	$	(5,926)
Service cost		(282)		(244)		(46)		(44)
Interest cost		(474)		(480)		(259)		(267)
Actuarial gain (loss)		(174)		(1,306)		172		(757)
Amendments		(66)				3		370
Benefits paid		781		675		344		336
Health care subsidies						(20)		(22)
Other postemployment benefits		(1)		(5)
Settlements/curtailments		2		2		1
Foreign exchange and other		218		136		25		6
End of year balance		(12,186)		(12,190)		(6,084)		(6,304)

Change in plan assets (fair value)
Beginning of year balance		11,447		11,008		957		1,157
Actual return on plan assets		582		1,132		24		81
Employer contribution		83		87		48		51
Benefits paid		(781)		(675)		(344)		(336)
Settlements/curtailments		(2)		(2)
Foreign exchange and other		(165)		(103)		4		4
End of year balance		11,164		11,447		689		957
Funded status	$	(1,022)	$	(743)	$	(5,395)	$	(5,347)

Weighted-average assumptions
Discount rates		4.1%		4.0%		4.3%		4.2%
Rate of compensation increase		3.8%		3.8%

Schedule of Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income - Pretax

The amounts recognized at October 31 in millions of dollars consist of the following:


					Health Care
					and
	Pensions				Life Insurance
	2015		2014		2015		2014


Amounts recognized in balance sheet
Noncurrent asset	$	216	$	262
Current liability		(44)		(51)	$	(20)	$	(21)
Noncurrent liability		(1,194)		(954)		(5,375)		(5,326)
Total	$	(1,022)	$	(743)	$	(5,395)	$	(5,347)
Amounts recognized in accumulated other comprehensive income – pretax
Net actuarial loss	$	4,393	$	4,266	$	1,442	$	1,675
Prior service cost (credit)		83		42		(334)		(407)
Total	$	4,476	$	4,308	$	1,108	$	1,268

Schedule of Accumulated Other Comprehensive Income Expected to be Amortized as Net Expense (Income) During Fiscal 2015

The amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) during fiscal 2016 in millions of dollars follow:


			Health Care
			and
	Pensions		Life Insurance


Net actuarial loss	$	208	$	75
Prior service cost (credit)		16		(78)
Total	$	224	$	(3)

Schedule of Future Benefits Expected to be Paid from the Benefit Plans

The benefits expected to be paid from the benefit plans, which reflect expected future years of service, are as follows in millions of dollars:


			Health Care
			and
	Pensions		Life Insurance*


2016	$	697	$	317
2017		688		333
2018		685		339
2019		690		342
2020		694		344
2021 to 2025		3,484		1,766

*Net of prescription drug group benefit subsidy under Medicare Part D.

Fair Values of Pension Plan and Health Care Assets

The fair values of the pension plan assets at October 31, 2015 follow in millions of dollars:


	Total		Level 1		Level 2

Cash and short-term investments	$	867	$	378	$	489
Equity:
U.S. equity securities and funds		3,075		3,053		22
International equity securities		1,802		1,781		21
Fixed Income:
Government and agency securities		386		197		189
Corporate debt securities		751		1		750
Mortgage-backed securities		83				83
Fixed income funds		26		26
Real estate		133		130		3
Derivative contracts - assets*		190		25		165
Derivative contracts - liabilities**		(26)		(4)		(22)
Receivables, payables and other		4		3		1
Securities lending collateral		745		92		653
Securities lending liability		(745)		(92)		(653)
Securities sold short		(470)		(466)		(4)
Total of Level 1 and Level 2 assets		6,821	$	5,124	$	1,697
Investments at net asset value***:
Short-term investments		195
U.S. equity funds		33
International equity funds		540
Corporate debt funds		26
Fixed income funds		495
Real estate		501
Hedge funds		625
Private equity/venture capital		1,604
Other investments		324
Total net assets	$	11,164

* Includes contracts for interest rates of $137 million, foreign currency of $17 million, equity of $30 million and other of $6 million.

** Includes contracts for interest rates of $7 million, foreign currency of $15 million and other of $4 million.

*** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

The fair values of the health care assets at October 31, 2015 follow in millions of dollars:


	Total		Level 1		Level 2

Cash and short-term investments	$	35	$	25	$	10
Equity:
U.S. equity securities and funds		229		229
International equity securities		39		39
Fixed Income:
Government and agency securities		84		78		6
Corporate debt securities		35				35
Mortgage-backed securities		13				13
Fixed income funds		1		1
Real estate		4		4
Derivative contracts - assets*		4		1		3
Receivables, payables and other		1		1
Securities lending collateral		65		9		56
Securities lending liability		(65)		(9)		(56)
Securities sold short		(10)		(10)
Total of Level 1 and Level 2 assets		435	$	368	$	67
Investments at net asset value**:
Short-term investments		4
International equity funds		103
Fixed income funds		47
Real estate funds		10
Hedge funds		50
Private equity/venture capital		34
Other investments		6
Total net assets	$	689

* Includes contracts for interest rates of $2 million, foreign currency of $1 million and equity of $1 million.

** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

The fair values of the pension plan assets at October 31, 2014 follow in millions of dollars:


	Total		Level 1		Level 2

Cash and short-term investments	$	977	$	426	$	551
Equity:
U.S. equity securities and funds		3,088		3,088
International equity securities and funds		2,046		2,046
Fixed Income:
Government and agency securities		434		412		22
Corporate debt securities		322		1		321
Mortgage-backed securities		96		11		85
Fixed income funds		127		127
Real estate		132		132
Derivative contracts - assets*		322		14		308
Derivative contracts - liabilities**		(39)		(9)		(30)
Receivables, payables and other		1				1
Securities lending collateral		847				847
Securities lending liability		(847)				(847)
Securities sold short		(477)		(477)
Total of Level 1 and Level 2 assets		7,029	$	5,771	$	1,258
Investments at net asset value***:
Short-term investments		108
U.S. equity funds		38
International equity funds		382
Fixed income funds		957
Real estate funds		442
Hedge funds		593
Private equity/venture capital		1,578
Other investments		320
Total net assets	$	11,447

* Includes contracts for interest rates of $246 million, foreign currency of $61 million, equity of $11 million and other of $4 million.

** Includes contracts for interest rates of $6 million, foreign currency of $25 million and other of $8 million.

*** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

The fair values of the health care assets at October 31, 2014 follow in millions of dollars:


	Total		Level 1		Level 2

Cash and short-term investments	$	52	$	37	$	15
Equity:
U.S. equity securities and funds		310		310
International equity securities		57		57
Fixed Income:
Government and agency securities		164		159		5
Corporate debt securities		33				33
Mortgage-backed securities		13				13
Fixed income funds		1		1
Real estate		5		5
Derivative contracts - assets*		5				5
Derivative contracts - liabilities**		(1)				(1)
Receivables, payables and other		1		1
Securities lending collateral		126				126
Securities lending liability		(126)				(126)
Securities sold short		(13)		(13)
Total of Level 1 and Level 2 assets		627	$	557	$	70
Investments at net asset value***:
Short-term investments		3
International equity funds		121
Fixed income funds		69
Real estate funds		12
Hedge funds		72
Private equity/venture capital		44
Other investments		9
Total net assets	$	957

* Includes contracts for interest rates of $3 million and foreign currency of $2 million.

** Includes contracts for foreign currency of $1 million.

*** Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.