IMPAIRMENTS	6 Months Ended
May 03, 2020
IMPAIRMENTS
IMPAIRMENTS	(21) Impairments In the second quarter of 2020, the Company recorded non-cash impairment charges as outlined below. The fixed assets in an asphalt plant factory in Germany were impaired by $62 million pretax and after-tax. The impairment is the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. The assets are included in the Company’s construction and forestry operations with the impairment recorded in “Cost of sales.” The equipment on operating leases and matured operating lease inventory recorded in “Other assets” were impaired by $22 million and $10 million pretax, respectively, with an income tax benefit of approximately $9 million. The impairments were the result of higher expected equipment return rates and lower estimated values of used construction equipment than originally estimated with the probable effect that the future cash flows will not cover the carrying amount of the net assets. The assets are included in the financial services operations with the impairments recorded in “Other operating expenses.” A minority investment in a construction equipment company headquartered in South Africa was impaired by $20 million pretax and after-tax. The impairment was the result of an other than temporary decline in value and was recorded in “Equity loss of unconsolidated affiliates.”

IMPAIRMENTS

6 Months Ended

May 03, 2020

(21) Impairments

In the second quarter of 2020, the Company recorded non-cash impairment charges as outlined below.

The fixed assets in an asphalt plant factory in Germany were impaired by $62 million pretax and after-tax. The impairment is the result of a decline in forecasted financial performance that indicated it was probable future cash flows would not cover the carrying amount of the net assets. The assets are included in the Company’s construction and forestry operations with the impairment recorded in “Cost of sales.”

The equipment on operating leases and matured operating lease inventory recorded in “Other assets” were impaired by $22 million and $10 million pretax, respectively, with an income tax benefit of approximately $9 million. The impairments were the result of higher expected equipment return rates and lower estimated values of used construction equipment than originally estimated with the probable effect that the future cash flows will not cover the carrying amount of the net assets. The assets are included in the financial services operations with the impairments recorded in “Other operating expenses.”

A minority investment in a construction equipment company headquartered in South Africa was impaired by $20 million pretax and after-tax. The impairment was the result of an other than temporary decline in value and was recorded in “Equity loss of unconsolidated affiliates.”