Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS (Tables)

v3.22.4
ACQUISITIONS (Tables)
 12 Months Ended
Nov. 30, 2022
Aug. 03, 2022
Apr. 08, 2022
Dec. 31, 2022
Business Acquisition [Line Items]        
Schedule of Business Acquisitions, by Acquisition      
Acquisitions for the year ended December 31, 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)
Siemens Commercial Vehicles Propulsion (Siemens CVP) 11/30/22 100% $ 187  $ —  $ 187  $ 70  $ 106 
Meritor, Inc. 08/03/22 100% 2,613  248  2,861  894  1,610 
Jacobs Vehicle Systems 04/08/22 100% 345  —  345  108  164 
Westport JV 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, Siemens CVP was included in the New Power segment, Jacobs Vehicle Systems was included in the Components segment and Westport JV was included in the Engine segment.
(2) Intangible assets acquired in the business combination were mostly customer, technology and trade name related.
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 2022 2021
Software $ 679  $ 586 
Less: Accumulated amortization (410) (314)
Software, net 269  272 
Trademarks, patents, customer relationships and other 2,858  957 
Less: Accumulated amortization (440) (329)
Trademarks, patents, customer relationships and other, net 2,418  628 
Other intangible assets, net $ 2,687  $ 900 
Siemens Commercial Vehicles        
Business Acquisition [Line Items]        
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The preliminary purchase price allocation was as follows:
In millions
Inventories $ 21 
Property, plant and equipment 3 
Intangible assets 106 
Goodwill 70 
Deferred revenue (3)
Other, net (10)
Total purchase price $ 187 
     
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 $ 62  20 Multi-period excess earnings Discount rate, customer renewal rates
Technology 28  11 Relief-from-royalty Royalty rate, rate of return, obsolescence factor
Trade name 16  17 Relief-from-royalty Royalty rate, discount rate
     
Meritor Inc.        
Business Acquisition [Line Items]        
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed  
The preliminary 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 846 
Intangible assets 1,610 
Investments and advances related to equity method investees 382 
Goodwill 894 
Pension assets 147 
Other current and long-term assets 322 
Accounts payable (principally trade) (711)
Net deferred taxes (320)
Other liabilities (pensions and other postretirement benefits) (129)
Long-term debt (962)
Other current and long-term liabilities (595)
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
In millions December 31,
2022		 December 31,
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