Cummins Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS (Tables)

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Business Acquisitions, by Acquisition

Acquisitions for the years ended December 31, 2018, 2017 and 2016 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⁾	Gain Recognized⁽¹⁾		Goodwill Acquired		Intangibles Recognized⁽²⁾		Net Sales Previous Fiscal Year Ended
2018
Efficient Drivetrains, Inc.	08/15/18	100%	$	51		$	2	$	64	⁽³⁾	COMB	—		$	49	$	15	$	3
Johnson Matthey Battery Systems, Ltd.	01/31/18	100%	9			—		9			COMB	—		—		5		3
2017
Brammo Inc.	11/01/17	100%	$	60		$	—	$	68	⁽³⁾	COMB	$	—	$	47	$	23	$	4
Eaton Cummins Automated Transmission Technologies	07/31/17	50%	600		⁽⁴⁾	—		600			COMB	—		544		596		—		⁽⁴⁾
2016
Wuxi Cummins Turbo Technologies Co. Ltd	12/05/16	45%	$	86		$	—	$	86		EQUITY	$	—	$	—	$	—	$	—
Cummins Pacific LLC	10/04/16	50%	32			67		99			COMB	15		4		8		391		⁽⁵⁾
Cummins Northeast LLC	01/01/16	35%	12			—		12			EQUITY	—		—		—		—

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⁽¹⁾

All results from acquired entities (excluding Brammo Inc. in 2017) 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) with gains recognized based on the requirement to remeasure our pre-existing ownership to fair value in accordance with GAAP and are included in the Consolidated Statements of Income as "Other income, net. The Brammo Inc. acquisition was allocated to the newly formed Electrified Power Segment on January 1, 2018.


⁽²⁾	Intangible assets acquired in business combinations were mostly customer and technology related, the majority of which will be amortized over a period of`up to 25 years from the date of the acquisition.

⁽³⁾

The "Total Purchase Consideration" represents the total amount that will or is estimated to be paid to complete the acquisition. A portion of the acquisition payment has not yet been made and will be paid in future periods in accordance with the purchase contract. The Brammo Inc. acquisition contains an earnout based on future results of the acquired business and could result in a maximum contingent consideration payment of $100 million (fair value of $5 million) to the former owners.

⁽⁴⁾ This transaction created a newly formed joint venture that we consolidated. See additional information below.


⁽⁵⁾	Sales amounts are not fully incremental to our consolidated sales as the amount would be reduced by the elimination of sales to the previously unconsolidated entity.

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The final purchase price allocation was as follows:



In millions
Inventory	$	3
Fixed assets	58
Intangible assets
Customer relationships	424
Technology	172
Goodwill	544
Liabilities	(1		)
Total business valuation	1,200
Less: Noncontrolling interest	600
Total purchase consideration	$	600