Financial Instruments

Cash Equivalents and Available-for-Sale Investments

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



	As of April 30, 2019								As of October 31, 2018
	Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value		Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
	In millions
Cash Equivalents:
Time deposits	$	1,091	$	—	$	—	$	1,091	$	781	$	—	$	—		$	781
Money market funds	901		—		—		901		2,340		—		—			2,340
Total cash equivalents	1,992		—		—		1,992		3,121		—		—			3,121
Available-for-Sale Investments:
Foreign bonds	111		19		—		130		113		18		—			131
Other debt securities	33		—				33		26		—		(1		)	25
Total available-for-sale investments	144		19		—		163		139		18		(1		)	156
Total cash equivalents and available-for-sale debt investments	$	2,136	$	19	$	—	$	2,155	$	3,260	$	18	$	(1	)	$	3,277

As of April 30, 2019 and October 31, 2018, 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 April 30, 2019 and October 31, 2018. 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:



	April 30, 2019
	Amortized Cost		Fair Value
	In millions
Due in one to five years	$	9	$	9
Due in more than five years	135		154
	$	144	$	163

Equity Investments

Equity securities investments in privately held companies are included in Long-term financing receivables and other assets in the Condensed Consolidated Balance Sheets. The carrying amount of these investments without readily determinable fair values amounted to $178 million and $162 million at April 30, 2019 and October 31, 2018, respectively.

Investments in equity securities that are accounted for using the equity method are included in Investments in equity interests in the Condensed Consolidated Balance Sheets. These investments amounted to $2.4 billion at April 30, 2019 and October 31, 2018.

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 April 30, 2019										As of October 31, 2018
			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	$	—	$	—	$	—	$	135	$	6,850	$	—	$	—	$	—	$	353
Cash flow hedges:
Foreign currency contracts	8,464		191		110		23		19		8,423		270		107		11		15
Net investment hedges:
Foreign currency contracts	1,682		32		29		15		10		1,737		32		41		13		11
Total derivatives designated as hedging instruments	16,996		223		139		38		164		17,010		302		148		24		379
Derivatives not designated as hedging instruments
Foreign currency contracts	5,511		31		1		30		2		6,780		41		5		55		12
Other derivatives	103		2		—		—		—		104		—		—		6		—
Total derivatives not designated as hedging instruments	5,614		33		1		30		2		6,884		41		5		61		12
Total derivatives	$	22,610	$	256	$	140	$	68	$	166	$	23,894	$	343	$	153	$	85	$	391

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 April 30, 2019 and October 31, 2018, 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 April 30, 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	$	396	$	—	$	396	$	124	$	206	⁽¹⁾	$	66
Derivative liabilities	$	234	$	—	$	234	$	124	$	111	⁽²⁾	$	(1	)



	As of October 31, 2018
	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	$	179	$	205	⁽¹⁾	$	112
Derivative liabilities	$	476	$	—	$	476	$	179	$	302	⁽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 April 30, 2019, of the $111 million of collateral posted, $104 million was in cash and $7 million was through re-use of counterparty collateral. As of October 31, 2018, $302 million of collateral posted was entirely in cash.

Effect of Derivative Instruments on the Condensed Consolidated Statements of Earnings

The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship for the three and six months ended April 30, 2019 and 2018 were as follows:



	Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item
Derivative Instrument	Location	Three months ended April 30, 2019		Six months ended April 30, 2019		Hedged Item	Location	Three months ended April 30, 2019			Six months ended April 30, 2019
		In millions						In millions
Interest rate contracts	Interest and other, net	$	60	$	218	Fixed-rate debt	Interest and other, net	$	(60	)	$	(218	)



	Gains (Losses) Recognized in Earnings on Derivative and Related Hedged Item
Derivative Instrument	Location	Three months ended April 30, 2018			Six months ended April 30, 2018			Hedged Item	Location	Three months ended April 30, 2018		Six months ended April 30, 2018
		In millions								In millions
Interest rate contracts	Interest and other, net	$	(72	)	$	(210	)	Fixed-rate debt	Interest and other, net	$	72	$	210

The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and six months ended April 30, 2019 were as follows:



	Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion)					Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion)
	Three months ended April 30, 2019		Six months ended April 30, 2019			Location	Three months ended April 30, 2019		Six months ended April 30, 2019
	In millions						In millions
Cash flow hedges:
Foreign currency contracts	$	96	$	59		Net revenue	$	46	$	126
Foreign currency contracts	32		103			Interest and other, net	22		75
Total cash flow hedges	$	128	$	162		Net earnings from continuing operations	$	68	$	201
Net investment hedges:
Foreign currency contracts	$	38	$	(5	)	Interest and other, net	$	—	$	—

The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships for the three and six months ended April 30, 2018 was as follows:



	Gains (Losses) Recognized in Other Comprehensive Income ("OCI") on Derivatives (Effective Portion)						Gains (Losses) Reclassified from Accumulated OCI Into Earnings (Effective Portion)
	Three months ended April 30, 2018			Six months ended April 30, 2018			Location	Three months ended April 30, 2018			Six months ended April 30, 2018
	In millions							In millions
Cash flow hedges:
Foreign currency contracts	$	117		$	(62	)	Net revenue	$	(65	)	$	(111	)
Foreign currency contracts	(35		)	(37		)	Interest and other, net	(26		)	(10		)
Total cash flow hedges	$	82		$	(99	)	Net earnings from continuing operations	$	(91	)	$	(121	)
Net investment hedges:
Foreign currency contracts	$	57		$	(25	)	Interest and other, net	$	—		$	—

As of April 30, 2019 and 2018, no portion of the hedging instruments' gain or loss was excluded from the assessment of effectiveness for fair value, cash flow or net investment hedges. Hedge ineffectiveness for fair value, cash flow, and net investment hedges was not material for the three and six months ended April 30, 2019 and 2018.

As of April 30, 2019, the Company expects to reclassify an estimated net Accumulated other comprehensive gain of approximately $75 million, net of taxes, to earnings in the next twelve months, along with the earnings effects of the related forecasted transactions associated with cash flow hedges.

The pre-tax effect of derivative instruments not designated as hedging instruments on the Condensed Consolidated Statements of Earnings for the three and six months ended April 30, 2019 and 2018 was as follows:



		Gains (Losses) Recognized in Earnings on Derivatives
	Location	Three months ended April 30, 2019			Three months ended April 30, 2018			Six months ended April 30, 2019			Six months ended April 30, 2018
		In millions
Foreign currency contracts	Interest and other, net	$	108		$	261		$	(123	)	$	(129	)
Other derivatives	Interest and other, net	(3		)	(1		)	7			—
Total		$	105		$	260		$	(116	)	$	(129	)