DERIVATIVE INSTRUMENTS

6 Months Ended

Apr. 27, 2025

(18) Derivative Instruments

Fair values of our derivative instruments and the associated notional amounts are presented below. Assets are recorded in “Other assets,” while liabilities are recorded in “Accounts payable and accrued expenses.”


	April 27, 2025						October 27, 2024						April 28, 2024
			Fair Value						Fair Value						Fair Value
	Notional		Assets		Liabilities		Notional		Assets		Liabilities		Notional		Assets		Liabilities
Cash flow hedges:
Interest rate contracts	$	2,975			$	29	$	2,875	$	3	$	20	$	2,700	$	34	$	1

Fair value hedges:
Interest rate contracts		13,608	$	169		372		15,864		115		467		13,664		8		884
Cross-currency interest rate contracts		975		103				975		31

Net investment hedges:
Cross-currency interest rate contracts		1,131				4

Not designated as hedging instruments:
Interest rate contracts		14,254		112		100		12,518		97		75		12,869		112		71
Foreign exchange contracts		8,078		42		107		7,533		95		20		7,582		36		38
Cross-currency interest rate contracts		141		8		2		158		16				211		1		11

The amounts recorded in the consolidated balance sheets related to borrowings designated in fair value hedging relationships are presented in the table below. Fair value hedging adjustments are included in the carrying amount of the hedged item. The carrying amount of the hedged item and formerly hedged item includes long-term borrowings of $399, $598, and $598 at April 27, 2025, October 27, 2024, and April 28, 2024, respectively, that are in active hedging relationships and also had discontinued hedging relationships.


	Active Hedging Relationships				Discontinued Hedging Relationships
	Carrying Amount		Cumulative Fair Value		Carrying Amount of		Cumulative Fair Value
	of Hedged Item		Hedging Amount		Formerly Hedged Item		Hedging Amount
April 27, 2025
Short-term borrowings	$	107	$	(1)	$	1,212	$	(12)
Long-term borrowings		14,306		(158)		10,533		(141)

October 27, 2024
Short-term borrowings	$	287	$	(1)	$	1,782	$	7
Long-term borrowings		16,125		(347)		8,626		(228)

April 28, 2024
Short-term borrowings	$	286	$	(7)	$	2,565	$	16
Long-term borrowings		12,434		(879)		7,616		(264)

The classification and gains (losses), including accrued interest expense, related to derivative instruments on the statements of consolidated income consisted of the following:


	Three Months Ended				Six Months Ended
	April 27		April 28		April 27		April 28
	2025		2024		2025		2024
Fair value hedges:
Interest rate contracts – Interest expense	$	435	$	(448)	$	92	$	(104)

Cash flow hedges:
Recognized in OCI:
Interest rate contracts – OCI (pretax)	$	(11)	$	26	$	(4)	$	18
Reclassified from OCI:
Interest rate contracts – Interest expense				16		8		27

Net investment hedges:
Interest rate contracts – Interest expense	$	1			$	1
Recognized in OCI:
Interest rate contracts – OCI (pretax)		(4)				(4)

Not designated as hedges:
Interest rate contracts – Interest expense	$	(12)	$	7	$	(16)	$	(2)
Foreign exchange contracts – Net sales		4		(2)		(3)		3
Foreign exchange contracts – Cost of sales		(7)		9		28		(21)
Foreign exchange contracts – Other operating expenses		(118)		46		90		(135)
Total not designated	$	(133)	$	60	$	99	$	(155)

In April 2025, we entered into a cross-currency interest rate swap as a designated net investment hedge to reduce the foreign currency exposure from investments in foreign subsidiaries. Changes in fair value of the derivative attributable to changes in the spot rate are recorded in “Cumulative translation adjustment” within “Other comprehensive income” (OCI) to offset changes in the value of the net investments being hedged. Effectiveness is assessed using the spot method. The periodic cash settlement of the pay-fixed rate, receive-fixed rate cross-currency swap is recorded in “Interest expense.”

Certain of our derivative agreements contain credit support provisions that may require us to post collateral based on the size of the net liability positions and credit ratings. The aggregate fair value of all derivatives with credit-risk-related contingent features that were in a net liability position at April 27, 2025, October 27, 2024, and April 28, 2024, was $507, $562, and $967, respectively. In accordance with the limits established in these agreements, we posted $221, $245, and $562 of cash collateral at April 27, 2025, October 27, 2024, and April 28, 2024, respectively. In addition, we paid $8 of collateral that was outstanding at April 27, 2025, October 27, 2024, and April 28, 2024 to participate in an international futures market to hedge currency exposure, not included in the table below.

Derivatives are recorded without offsetting for netting arrangements or collateral. The impact on the derivative assets and liabilities related to netting arrangements and collateral follows:


	Gross Amounts		Netting
	Recognized		Arrangements		Collateral		Net Amount
April 27, 2025
Assets	$	434	$	(166)	$	(2)	$	266
Liabilities		614		(166)		(221)		227

October 27, 2024
Assets	$	357	$	(142)			$	215
Liabilities		582		(142)	$	(246)		194

April 28, 2024
Assets	$	191	$	(93)			$	98
Liabilities		1,005		(93)	$	(562)		350