Quarterly report pursuant to Section 13 or 15(d)

ACQUISITIONS (Tables)

v3.22.2.2
ACQUISITIONS (Tables)
 9 Months Ended
Aug. 03, 2022
Apr. 08, 2022
Sep. 30, 2022
Business Acquisition [Line Items]      
Schedule of Business Acquisitions, by Acquisition    
Acquisitions for the nine months ended September 30, 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(1)
Goodwill Acquired
Intangibles Recognized(2)
Meritor, Inc. 08/03/22 100% $ 2,613  $ 248  $ 2,861  $ 850  $ 1,610 
Jacobs Vehicle Systems 04/08/22 100% 346  —  346  108  164 
Cummins Westport Joint Venture 02/07/22 50% 42  —  42  —  20 
(1) The newly consolidated entities were accounted for as business combinations. On the date of acquisition, Meritor, Inc. was included in the Components and New Power segments, Jacobs Vehicle Systems was included in the Components segment and Cummins Westport Joint Venture was included in the Engine segment.
(2) Intangible assets acquired in the business combination were mostly technology and customer related.
Schedule of Finite-Lived Intangible Assets     The following table summarizes our other intangible assets with finite useful lives that are subject to amortization:
In millions September 30,
2022		 December 31,
2021
Software $ 652  $ 586 
Less: Accumulated amortization (378) (314)
Software, net 274  272 
Trademarks, patents, customer relationships and other(1)
2,711  957 
Less: Accumulated amortization (383) (329)
Trademarks, patents, customer relationships and other, net 2,328  628 
Total other intangible assets, net $ 2,602  $ 900 
(1)See NOTE 16, "ACQUISITIONS," for additional information on acquired intangible assets.
Meritor Inc.      
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 $ 98 
Accounts and notes receivable, net 640 
Inventories 752 
Property, plant and equipment 846 
Intangible assets 1,610 
Investments and advances related to equity method investees 382 
Goodwill 850 
Pension assets 147 
Other current and long-term assets 364 
Accounts payable (principally trade) (711)
Net deferred taxes (325)
Pensions and other postretirement benefits (129)
Long-term debt (962)
Other current and long-term liabilities (590)
Noncontrolling interests (111)
Total purchase price $ 2,861 
Schedule of Finite-Lived Intangible Assets
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, rate of return, renewal rates
Technology 345  8 Relief-from-royalty Royalty rate, rate of return, obsolescence factor
Trade name 305  21 Relief-from-royalty Royalty rate, rate of return
   
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) Three months ended Nine months ended
In millions September 30,
2022		 October 3,
2021		 September 30,
2022		 October 3,
2021
Net sales $ 7,734  $ 6,913  $ 23,071  $ 21,115 
Net income 397  544  1,565  1,662 
The Meritor acquisition increased net assets in the Components segment by $3.8 billion and New Power segment by $0.3 billion.
Jacobs Vehicle Systems      
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 $ 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 (5)
Total purchase price $ 346 
Schedule of Finite-Lived Intangible Assets  
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 Rate of return, renewal rates
Technology 31  7 Relief-from-royalty Royalty rate, rate of return, obsolescence factor
Trade name 25  14 Relief-from-royalty Royalty rate, rate of return