VOLUNTARY EMPLOYEE-SEPARATION PROGRAMS

9 Months Ended

Jul. 30, 2017

VOLUNTARY EMPLOYEE-SEPARATION PROGRAMS

VOLUNTARY EMPLOYEE-SEPARATION PROGRAMS

(18)  During the fourth quarter of 2016, the Company announced voluntary employee-separation programs as part of its effort to reduce operating costs. The programs provided for cash payments based on previous years of service. The expense is recorded in the period the employees accept the separation offer. The programs’ total pretax expenses are approximately $113 million, of which $11 million was recorded in the fourth quarter of 2016, $94 million was recorded in the first quarter of 2017, $5 million was recorded in the second quarter, and $2 million was recorded in the third quarter with $1 million to be recognized in the fourth quarter. The payments for all programs were substantially made in the first quarter of 2017. The total 2017 expenses are allocated approximately 30 percent cost of sales, 16 percent research and development, and 54 percent selling, administrative and general. In addition, the expenses are allocated 74 percent to agriculture and turf operations, 18 percent to the construction and forestry operations, and 8 percent to the financial services operations. Savings from these programs are estimated to be approximately $70 million in 2017.