Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS (Tables)

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ACQUISITIONS (Tables)
 12 Months Ended
Oct. 02, 2023
Aug. 03, 2022
Apr. 08, 2022
Dec. 31, 2023
Business Acquisition [Line Items]        
Schedule of Business Acquisitions, by Acquisition      
Acquisitions for the years ended December 31, 2023 and 2022, were as follows:
Entity Acquired (Dollars in millions) Date of Acquisition Additional Percent Interest Acquired Payments to Former Owners Acquisition Related Debt Retirements Total Purchase Consideration
Type of Acquisition(1)
Goodwill Acquired
Intangibles Recognized(2)
2023
Cummins France SA 10/31/23 100  % $ 25  $ 5  $ 30  COMB $ 4  $ — 
Faurecia 10/02/23 100  % 210  —  210 
(3)
 COMB 90  — 
Hydrogenics Corporation (Hydrogenics) 06/29/23 19  % 287  48  335 
(4)
 EQUITY —  — 
Teksid Hierro de Mexico, S.A. de C.V. (Teksid MX) 04/03/23 100  % 143  —  143 
(5)
 COMB 18  — 
2022
Siemens Commercial Vehicles Propulsion (Siemens CVP) 11/30/22 100  % $ 187  $ —  $ 187  COMB $ 70  $ 106 
Meritor, Inc. (Meritor) 08/03/22 100  % 2,613  248  2,861  COMB 926  1,610 
Jacobs Vehicle Systems (Jacobs) 04/08/22 100  % 345  —  345  COMB 108  164 
Cummins Westport, Inc. (Westport JV) 02/07/22 50  % 42  —  42  COMB —  20 
(1) All results from acquired entities were included in segment results subsequent to the acquisition date. Previously consolidated entities were accounted for as equity transactions (EQUITY). Newly consolidated entities were accounted for as business combinations (COMB).
(2) Intangible assets acquired in the business combination were mostly customer, technology and trade name related.
(3) Total purchase consideration included $30 million for the settlement of accounts payable that were treated as an operating cash outflow.
(4) Hydrogenics entered into three non-interest-bearing promissory notes with $175 million paid on July 31, 2023, and the remaining $160 million due in three installments through 2025.
(5) Total purchase consideration included $32 million for the settlement of accounts payable that were treated as an operating cash outflow.
Summary of other intangible assets with finite useful lives that are subject to amortization       The following table summarizes our other intangible assets with finite useful lives that are subject to amortization:
  December 31,
In millions 2023 2022
Software $ 622  $ 679 
Less: Accumulated amortization (323) (410)
Software, net 299  269 
Trademarks, patents, customer relationships and other 2,886  2,858 
Less: Accumulated amortization (666) (440)
Trademarks, patents, customer relationships and other, net 2,220  2,418 
Other intangible assets, net $ 2,519  $ 2,687 
Faurecia        
Business Acquisition [Line Items]        
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The preliminary purchase price allocation was as follows:
In millions
Cash and cash equivalents $ 8 
Accounts and notes receivable, net (1)
52 
Inventories 32 
Property, plant and equipment 93 
Goodwill 90 
Other current and long-term assets 46 
Accounts payable (principally trade) (62)
Other current and long-term liabilities (49)
Total purchase price $ 210 
 (1) Includes $30 million of Cummins receivables that were eliminated against payables at other Cummins entities.
     
Meritor Inc.        
Business Acquisition [Line Items]        
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed  
The final purchase price allocation has been updated as follows:
In millions
Cash and cash equivalents $ 98 
Accounts and notes receivable, net 640 
Inventories 750 
Property, plant and equipment 841 
Intangible assets 1,610 
Investments and advances related to equity method investees 382 
Goodwill 926 
Pension assets 147 
Other current and long-term assets 322 
Accounts payable (principally trade) (711)
Net deferred taxes (277)
Other liabilities (pensions and other postretirement benefits) (129)
Long-term debt (962)
Other current and long-term liabilities (665)
Noncontrolling interests (111)
Total purchase price $ 2,861 
   
Summary of other intangible assets with finite useful lives that are subject to amortization  
The estimated fair values (all considered Level 3 measurements) of the identifiable intangible assets acquired, their weighted-average useful lives, the related valuation methodology and key assumptions are as follows:
Fair Value (in millions) Weighted-Average Useful Life (in years) Valuation Methodology Key Assumptions
Customer relationships $ 960  12 Multi-period excess earnings
Revenue, EBITDA(1), discount rate, customer renewal rates, customer attrition rates
Technology 345  8 Relief-from-royalty Royalty rate, discount rate, obsolescence factor
Trade name 305  21 Relief-from-royalty Royalty rate, discount rate
(1) Earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests.
   
Business Acquisition, Pro Forma Information       The unaudited pro forma financial information does not reflect any potential cost savings, operating efficiencies, long-term debt pay down estimates, financial synergies or other strategic benefits as a result of the acquisition or any restructuring costs to achieve those benefits.
(Unaudited) Years ended December 31,
In millions 2022 2021
Net sales $ 30,841  $ 27,949 
Net income 2,196  2,058 
Jacobs Vehicle Systems        
Business Acquisition [Line Items]        
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed    
The final purchase price allocation was as follows:
In millions
Cash and cash equivalents $ 18 
Accounts and notes receivable, net 24 
Inventories 15 
Property, plant and equipment 70 
Intangible assets 164 
Goodwill 108 
Accounts payable (principally trade) (21)
Net deferred taxes (27)
Other, net (6)
Total purchase price $ 345 
 
Summary of other intangible assets with finite useful lives that are subject to amortization    
The estimated fair values (all considered Level 3 measurements) of the identifiable intangible assets acquired, their weighted-average useful lives, the related valuation methodology and key assumptions are as follows:
Fair Value (in millions) Weighted-Average Useful Life (in years) Valuation Methodology Key Assumptions
Customer relationships $ 108  9 Multi-period excess earnings Discount rate, customer renewal rates
Technology 31  7 Relief-from-royalty Royalty rate, rate of return, obsolescence factor
Trade name 25  14 Relief-from-royalty Royalty rate, discount