SPECIAL ITEMS (Tables)

12 Months Ended

Oct. 30, 2022

Schedule of Special Items

A summary of the reserves, impairments, and voluntary-separation costs recorded in 2022 follows in millions of dollars. See Note 25 for fair value measurement information.

	PPA		SAT		CF		FS		Total
Inventory reserve – Cost of sales	$	14	$	2	$	3			$	19
Fixed asset impairment – Cost of sales		30				11				41
Intangible asset impairment – Cost of sales						28				28
Allowance for credit losses – Financing receivables – SA&G expenses							$	153		153
Voluntary-separation program: – Cost of sales		3								3
– SA&G expenses		4				6		1		11
Intercompany agreement		82		9		62		(153)
Total Russia/Ukraine events pretax expense	$	133	$	11	$	110	$	1		255
Net tax impact										(40)
Total Russia/Ukraine events after-tax expense									$	215

Summary of 2022 and 2021 Special Items

The following table summarizes the operating profit impact, in millions of dollars, of the special items recorded in 2022 and 2021:

	PPA		SAT		CF		FS		Total
2022 Expense (benefit)
Gain on remeasurement of equity investment – Other income (Note 3)					$	(326)			$	(326)
Total Russia/Ukraine events pretax expense	$	133	$	11		110	$	1		255
UAW ratification bonus – Cost of sales		53		9		28				90
Total expense (benefit)		186		20		(188)		1		19
2021 Expense (benefit)
Gain on sale – Other income				(27)						(27)
Long-lived asset impairments – Cost of sales		5		3		42				50
Brazil indirect tax – Cost of sales		(53)				(5)				(58)
Total expense (benefit)		(48)		(24)		37				(35)
Year over year change	$	234	$	44	$	(225)	$	1	$	54

2020 Special Items

In 2020, the company closed a factory that produced small agricultural equipment in China, recognized impairments in the fixed assets in an asphalt plant factory in Germany, a construction equipment factory in Brazil, and other international locations, and recorded impairments of equipment on operating leases and matured lease inventory, as well as impairments of the investment in certain affiliate companies. A summary of the factory closure and costs related to impairments follows in millions of dollars. See Note 25 for a description of the valuation methodologies used to measure these impairments.

	PPA		SAT		CF		FS		Total
Factory closure – Cost of sales			$	20					$	20
Long-lived asset impairments:
Cost of sales				13	$	80				93
SA&G expenses	$	2		2						4
Other operating expenses							$	32		32
Affiliate company impairments – Equity in loss of unconsolidated affiliates						50				50
Total pretax impairments and closure costs	$	2	$	35	$	130	$	32	$	199

2020 Employee-Separation Programs

Schedule of Employee-Separation Programs Pretax Expenses

The programs’ total pretax expenses in 2020 were as follows in millions of dollars:

	PPA		SAT		CF		FS		Total
Cost of sales	$	51	$	31	$	22			$	104
Research and development expenses		29		18		8				55
Selling, administrative and general expenses		53		43		24	$	15		135
Total operating profit impact	$	133	$	92	$	54	$	15		294
Non-operating profit impact*										41
Total pretax expense									$	335

*    Relates primarily to non-cash charges of $34 million from curtailments in certain OPEB plans (see Note 7) and other corporate expenses, both of which were recorded outside of operating profit. Approximately $6 million of the curtailment charge was recorded by financial services.