DERIVATIVE INSTRUMENTS (Tables)

12 Months Ended

Oct. 29, 2017

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:


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

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

** Includes adjustments for fair values of hedged borrowings excluding accrued interest expense of $243 million and $290 million during 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 29, 2017 and October 30, 2016 in millions of dollars follow:


	2017		2016
Other Assets
Designated as hedging instruments:
Interest rate contracts	$	74	$	268
Cross-currency interest rate contracts		5		11
Total designated		79		279
Not designated as hedging instruments:
Interest rate contracts		42		26
Foreign exchange contracts		108		60
Cross-currency interest rate contracts		6		10
Total not designated		156		96
Total derivative assets	$	235	$	375
Accounts Payable and Accrued Expenses
Designated as hedging instruments:
Interest rate contracts	$	112	$	10
Total designated		112		10
Not designated as hedging instruments:
Interest rate contracts		19		19
Foreign exchange contracts		26		43
Cross-currency interest rate contracts		1
Total not designated		46		62
Total derivative liabilities	$	158	$	72

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:


	2017		2016		2015
Fair Value Hedges
Interest rate contracts – Interest expense	$	(205)	$	153	$	277

Cash Flow Hedges
Recognized in OCI
(Effective Portion):
Interest rate contracts – OCI (pretax)*		4		(3)		(16)
Foreign exchange contracts – OCI (pretax)*		(1)		1		4

Reclassified from OCI
(Effective Portion):
Interest rate contracts – Interest expense*		(2)		(7)		(12)
Foreign exchange contracts – Other expense*		(1)		1		4

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

Not Designated as Hedges
Interest rate contracts – Interest expense*	$	11	$	(1)	$	(17)
Foreign exchange contracts – Cost of sales		(12)		(15)		97
Foreign exchange contracts – Other expense*		(106)		74		304
Total not designated	$	(107)	$	58	$	384

* 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 received or paid at October 29, 2017 and October 30, 2016 in millions of dollars follows:


	Gross Amounts		Netting		Collateral		Net
	Recognized		Arrangements		Received		Amount
2017
Assets	$	235	$	(65)			$	170
Liabilities		158		(65)				93
2016
Assets	$	375	$	(32)	$	(6)	$	337
Liabilities		72		(32)				40