Financial Instruments

3 Months Ended

Jan. 31, 2020

Investments, All Other Investments [Abstract]

Cash Equivalents and Available-for-Sale Investments

Cash equivalents and available-for-sale investments were as follows:



	As of January 31, 2020						As of October 31, 2019
	Cost		Gross Unrealized Gain		Fair Value		Cost		Gross Unrealized Gain		Fair Value
	In millions
Cash Equivalents:
Time deposits	$	671	$	—	$	671	$	803	$	—	$	803
Money market funds	607		—		607		859		—		859
Total cash equivalents	1,278		—		1,278		1,662		—		1,662
Available-for-Sale Investments:
Foreign bonds	103		21		124		110		23		133
Other debt securities	30		1		31		32		—		32
Total available-for-sale investments	133		22		155		142		23		165
Total cash equivalents and available-for-sale debt investments	$	1,411	$	22	$	1,433	$	1,804	$	23	$	1,827

As of January 31, 2020 and October 31, 2019, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. Time deposits were primarily issued by institutions outside the U.S. as of January 31, 2020 and October 31, 2019. The estimated fair value of the available-for-sale debt investments may not be representative of values that will be realized in the future.

Contractual maturities of available-for-sale debt investments were as follows:



	January 31, 2020
	Amortized Cost		Fair Value
	In millions
Due in one to five years	$	9	$	9
Due in more than five years	124		146
	$	133	$	155

Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets

The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows:



	As of January 31, 2020										As of October 31, 2019
			Fair Value										Fair Value
	Outstanding Gross Notional		Other Current Assets		Long-Term Financing Receivables and Other Assets		Other Accrued Liabilities		Long-Term Other Liabilities		Outstanding Gross Notional		Other Current Assets		Long-Term Financing Receivables and Other Assets		Other Accrued Liabilities		Long-Term Other Liabilities
	In millions
Derivatives designated as hedging instruments
Fair value hedges:
Interest rate contracts	$	6,850	$	—	$	96	$	6	$	—	$	6,850	$	—	$	72	$	11	$	—
Cash flow hedges:
Foreign currency contracts	8,401		148		136		42		29		8,578		164		141		45		27
Interest rate contracts	500		—		—		—		—		500		—		1		—		—
Net investment hedges:
Foreign currency contracts	1,790		39		44		17		10		1,766		31		36		18		10
Total derivatives designated as hedging instruments	17,541		187		276		65		39		17,694		195		250		74		37
Derivatives not designated as hedging instruments
Foreign currency contracts	6,653		29		3		25		—		6,398		17		3		33		3
Other derivatives	114		1		—		1		—		97		3		—		—		—
Total derivatives not designated as hedging instruments	6,767		30		3		26		—		6,495		20		3		33		3
Total derivatives	$	24,308	$	217	$	279	$	91	$	39	$	24,189	$	215	$	253	$	107	$	40

Offsetting of Derivative Instruments

The Company recognizes all derivative instruments on a gross basis in the Condensed Consolidated Balance Sheets. The Company's derivative instruments are subject to master netting arrangements and collateral security arrangements. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under collateral security agreements. As of January 31, 2020 and October 31, 2019, information related to the potential effect of the Company's use of the master netting agreements and collateral security agreements were as follows:



	As of January 31, 2020
	In the Condensed Consolidated Balance Sheets
	(i)		(ii)		(iii) = (i)–(ii)		(iv)		(v)			(vi) = (iii)–(iv)–(v)
							Gross Amounts Not Offset
	Gross Amount Recognized		Gross Amount Offset		Net Amount Presented		Derivatives		Financial Collateral			Net Amount
	In millions
Derivative assets	$	496	$	—	$	496	$	118	$	349	⁽¹⁾	$	29
Derivative liabilities	$	130	$	—	$	130	$	118	$	6	⁽²⁾	$	6



	As of October 31, 2019
	In the Condensed Consolidated Balance Sheets
	(i)		(ii)		(iii) = (i)–(ii)		(iv)		(v)			(vi) = (iii)–(iv)–(v)
							Gross Amounts Not Offset
	Gross Amount Recognized		Gross Amount Offset		Net Amount Presented		Derivatives		Financial Collateral			Net Amount
	In millions
Derivative assets	$	468	$	—	$	468	$	123	$	263	⁽¹⁾	$	82
Derivative liabilities	$	147	$	—	$	147	$	123	$	19	⁽²⁾	$	5


(1)	Represents the cash collateral posted by counterparties as of the respective reporting date for the Company's asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date.

(2)

Represents the collateral posted by the Company in cash or through the re-use of counterparty cash collateral as of the respective reporting date for the Company's liability position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date. As of January 31, 2020, $6 million of collateral posted was entirely in cash. As of October 31, 2019, $19 million of collateral posted was entirely by way of re-use of counterparty collateral.

The amounts recorded on the Condensed Consolidated Balance Sheets relating to cumulative basis adjustments for fair value hedges were as follows;



	Carrying amount of the hedged assets/ (liabilities)						Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/ (liabilities)
	As of						As of
	January 31, 2020			October 31, 2019			January 31, 2020			October 31, 2019
	In millions						In millions
Notes payable and short-term borrowings	$	(2,992	)	$	(2,987	)	$	6		$	11
Long-term debt	$	(3,933	)	$	(3,908	)	$	(96	)	$	(72	)

The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships recognized in Other Comprehensive Income ("OCI") for the three months ended January 31, 2020 and January 31, 2019 was as follows:



	Gains (Losses) Recognized in OCI on Derivatives
	Three months ended January 31, 2020			Three months ended January 31, 2019
	In millions
Derivatives in Cash Flow Hedging relationship
Foreign exchange contracts	$	76		$	34
Interest rate contracts	(1		)	—
Derivatives in Net Investment Hedging relationship
Foreign exchange contracts	21			(43		)
Total	$	96		$	(9	)

Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings

The pre-tax effect of derivative instruments on the Condensed Consolidated Statements of Earnings for the three months ended January 31, 2020 and January 31, 2019 was as follows:



	Gains (Losses) Recognized in Income
	Three months ended January 31, 2020					Three months ended January 31, 2019
	Net revenue		Interest and other, net			Net revenue		Interest and other, net
	In millions
Total amounts of income and expense line items presented in the Condensed Consolidated Statements of Earnings in which the effects of fair value hedges, cash flow hedges and derivatives not designated as hedging instruments are recorded	$	6,949	$	(19	)	$	7,553	$	(51	)
Gains (losses) on derivatives in fair value hedging relationships
Interest rate contracts
Hedged items	$	—	$	(29	)	$	—	$	(158	)
Derivatives designated as hedging instruments	—		29			—		158
Gains (losses) on derivatives in cash flow hedging relationships
Foreign exchange contracts
Amount of gains (losses) reclassified from accumulated other comprehensive income into income	26		43			80		53
Gains (losses) on derivatives not designated as hedging instruments
Foreign exchange contracts	—		(54		)	—		(231		)
Other derivatives	—		(3		)	—		10
Total gains (losses)	$	26	$	(14	)	$	80	$	(168	)