EMPLOYEE-SEPARATION PROGRAM	3 Months Ended
Feb. 02, 2020
EMPLOYEE-SEPARATION PROGRAM
EMPLOYEE-SEPARATION PROGRAM	(20) Employee-Separation Program During the first quarter of 2020, the Company announced a broad voluntary employee-separation program for the U.S. salaried workforce that continues the efforts to create a more efficient organization structure and reduce operating costs. The program provided for cash payments based on years of service. The expense was recorded primarily in the period in which the employees irrevocably accepted the separation offer. The program’s total estimated pretax expenses are approximately $136 million, of which $127 million was recorded in the first quarter. The payments for the program were also substantially made in the first quarter. Included in the total pretax expense is a non-cash charge of $21 million resulting from a curtailment in certain OPEB plans (see Note 8), which was recorded outside of operating profit in “Other operating expense.” The first quarter 2020 expenses that are included in operating profit of $105 million are allocated 37 percent “Cost of sales,” 15 percent “Research and development,” and 48 percent “Selling, administrative and general.” In addition, the expenses are allocated 75 percent to the agriculture and turf operations, 23 percent to the construction and forestry operations, and 2 percent to the financial services operations. Annual savings from these programs are estimated to be approximately $85 million with about $65 million in 2020.

EMPLOYEE-SEPARATION PROGRAM

3 Months Ended

Feb. 02, 2020

(20) Employee-Separation Program

During the first quarter of 2020, the Company announced a broad voluntary employee-separation program for the U.S. salaried workforce that continues the efforts to create a more efficient organization structure and reduce operating costs. The program provided for cash payments based on years of service. The expense was recorded primarily in the period in which the employees irrevocably accepted the separation offer. The program’s total estimated pretax expenses are approximately $136 million, of which $127 million was recorded in the first quarter. The payments for the program were also substantially made in the first quarter. Included in the total pretax expense is a non-cash charge of $21 million resulting from a curtailment in certain OPEB plans (see Note 8), which was recorded outside of operating profit in “Other operating expense.” The first quarter 2020 expenses that are included in operating profit of $105 million are allocated 37 percent “Cost of sales,” 15 percent “Research and development,” and 48 percent “Selling, administrative and general.” In addition, the expenses are allocated 75 percent to the agriculture and turf operations, 23 percent to the construction and forestry operations, and 2 percent to the financial services operations. Annual savings from these programs are estimated to be approximately $85 million with about $65 million in 2020.