NOTE 3. ACQUISITIONS
In September 2013, we announced our intention to acquire the equity that we do not already own in most of our partially-owned U.S. and Canadian distributors over a three to five year period.
The Distribution segment North American distributor acquisitions for the nine months ended September 27, 2015, versus the comparable period in 2014 were as follows:
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Entity Acquired (Dollars in millions) |
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Date of Acquisition |
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Additional Percent Interest Acquired |
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Payments to Former Owners |
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Acquisition Related Debt Retirements |
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Total Purchase Consideration |
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Type of Acquisition(1)
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Gain Recognized(1)
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Goodwill Acquired |
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Intangibles Recognized(2)
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Net Sales Previous Fiscal Year Ended(3)
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2015 |
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Cummins Crosspoint LLC (4)
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08/03/15 |
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50% |
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$ |
20 |
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$ |
36 |
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$ |
65 |
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(5) |
COMB |
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$ |
10 |
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$ |
7 |
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$ |
2 |
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$ |
258 |
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Cummins Atlantic LLC (4)
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08/03/15 |
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51% |
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14 |
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28 |
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48 |
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(5) |
COMB |
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7 |
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2 |
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6 |
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245 |
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Cummins Central Power LLC |
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06/29/15 |
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20.01% |
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8 |
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— |
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8 |
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EQUITY |
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— |
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— |
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— |
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— |
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2014 |
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Cummins Eastern Canada LP |
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08/04/14 |
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50% |
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$ |
30 |
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$ |
32 |
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$ |
62 |
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COMB |
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$ |
18 |
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$ |
5 |
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$ |
4 |
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$ |
228 |
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Cummins Power Systems LLC |
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05/05/14 |
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30% |
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14 |
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— |
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14 |
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EQUITY |
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— |
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— |
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— |
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— |
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Cummins Southern Plains LLC |
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03/31/14 |
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50% |
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44 |
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48 |
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92 |
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COMB |
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13 |
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1 |
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11 |
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433 |
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Cummins Mid-South LLC |
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02/14/14 |
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62.2% |
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57 |
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61 |
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118 |
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COMB |
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7 |
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4 |
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8 |
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368 |
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____________________________________________________
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(1) |
All results from acquired entities were included in Distribution 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 Condensed Consolidated Statements of Income as "Other income, net."
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(2)
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Intangible assets acquired in business combinations were mostly customer related, the majority of which will be amortized over a period of up to five years from the date of the acquisition.
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(3)
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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. |
(4) Purchase accounting for these acquisitions are preliminary, awaiting customary adjustments to purchase price in accordance with the purchase agreements.
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(5) |
The "Total Purchase Consideration" represents the total amount that will or is estimated to be paid to complete the acquisition. In some instances 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 total estimated remaining consideration at September 27, 2015, was $15 million.
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