DERIVATIVE INSTRUMENTS (Tables)

12 Months Ended

Oct. 28, 2018

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:


	2018		2017		2016
Interest rate contracts*	$	(294)	$	(284)	$	7
Borrowings**		292		287		(9)

* Includes changes in fair values of interest rate contracts excluding net accrued interest income of $11 million, $79 million, and $146 million during 2018, 2017, and 2016, respectively.

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $246 million, $243 million, and $290 million during 2018, 2017, and 2016, respectively.

Fair Value of Derivative Instruments in Consolidated Balance Sheet

Fair values of derivative instruments in the consolidated balance sheet at October 28, 2018 and October 29, 2017 in millions of dollars follow:


	2018		2017
Other Assets
Designated as hedging instruments:
Interest rate contracts	$	29	$	74
Cross-currency interest rate contracts				5
Total designated		29		79
Not designated as hedging instruments:
Interest rate contracts		51		42
Foreign exchange contracts		83		108
Cross-currency interest rate contracts		5		6
Total not designated		139		156
Total derivative assets	$	168	$	235
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	321	$	112
Total designated		321		112
Not designated as hedging instruments:
Interest rate contracts		29		19
Foreign exchange contracts		49		26
Cross-currency interest rate contracts				1
Total not designated		78		46
Total derivative liabilities	$	399	$	158

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:


	2018		2017		2016
Fair Value Hedges
Interest rate contracts – Interest expense	$	(283)	$	(205)	$	153

Cash Flow Hedges
Recognized in OCI
(Effective Portion):
Interest rate contracts – OCI (pretax)*		17		4		(3)
Foreign exchange contracts – OCI (pretax)*		2		(1)		1

Reclassified from OCI
(Effective Portion):
Interest rate contracts – Interest expense*		5		(2)		(7)
Foreign exchange contracts – Other expense*		1		(1)		1

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

Not Designated as Hedges
Interest rate contracts – Net sales	$	3
Interest rate contracts – Interest expense*		(4)	$	11	$	(1)
Foreign exchange contracts – Cost of sales		(24)		(12)		(15)
Foreign exchange contracts – Other expense*		195		(106)		74
Total not designated	$	170	$	(107)	$	58

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

** The amounts are not significant.

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

The impact on the derivative assets and liabilities related to netting arrangements and any collateral paid at October 28, 2018 and October 29, 2017 in millions of dollars follows:


	Gross Amounts		Netting		Collateral		Net
	Recognized		Arrangements		Paid		Amount
2018
Assets	$	168	$	(65)			$	103
Liabilities		399		(65)	$	(59)		275
2017
Assets	$	235	$	(65)			$	170
Liabilities		158		(65)				93