Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS (Tables)

v3.3.1.900
ACQUISITIONS (Tables)
12 Months Ended
Dec. 31, 2015
Business Combinations [Abstract]  
Schedule of Business Acquisitions, by Acquisition
The Distribution segment joint venture acquisitions for the years ended December 31, 2015, 2014 and 2013 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(3)
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cummins Crosspoint LLC
 
08/03/15
 
50%
 
$
28

 
$
36

 
$
65

(4) 
COMB
 
$
10

 
$
7

 
$
2

 
$
258

Cummins Atlantic LLC
 
08/03/15
 
51%
 
20

 
28

 
49

(4) 
COMB
 
8

 
5

 
6

 
245

Cummins Central Power LLC
 
06/29/15
 
20.01%
 
8

 

 
8

 
EQUITY
 

 

 

 

2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cummins Bridgeway LLC
 
11/03/14
 
54%
 
$
32

 
$
45

 
$
77

 
COMB
 
$
13

 
$
4

 
$
15

 
$
331

Cummins NPower LLC
 
09/29/14
 
50%
 
39

 
34

 
73

 
COMB
 
15

 
7

 
8

 
374

Cummins Power South LLC
 
09/29/14
 
50%
 
19

 
16

 
35

 
COMB
 
7

 
8

 
1

 
239

Cummins Eastern Canada LP
 
08/04/14
 
50%
 
30

 
32

 
62

 
COMB
 
18

 
5

 
4

 
228

Cummins Power Systems LLC
 
05/05/14
 
30%
 
14

 

 
14

 
EQUITY
 

 

 

 

Cummins Southern Plains LLC (Southern Plains)
 
03/31/14
 
50%
 
44

 
48

 
92

 
COMB
 
13

 
1

 
11

 
433

Cummins Mid-South LLC (Mid-South)
 
02/14/14
 
62.2%
 
57

 
61

 
118

 
COMB
 
7

 
4

 
8

 
368

2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cummins Western Canada LP
 
12/31/13
 
35%
 
$
32

 
$

 
$
32

 
EQUITY
 
$

 
$

 
$

 
$

Cummins Rocky Mountain LLC (Rocky Mountain)
 
05/06/13
 
67%
 
62

 
74

 
136

 
COMB
 
5

 
10

 
8

 
384

Cummins Northwest LLC
 
07/01/13
 
20.01%
 
4

 

 
4

 
EQUITY
 

 

 

 

Cummins Northwest LLC (5)
 
01/31/13
 
50%
 
18

 

 
18

 
COMB
 
7

 
3

 
2

 
137

____________________________________________________
(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 Consolidated Statements of Income as "Other income, net."
(2)  
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.
(3)
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)  
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 outstanding consideration at December 31, 2015, was $2 million.
(5)
Prior to our decision to acquire the remaining interest in our North American distributors, we acquired the remaining ownership interest in Northwest and immediately formed a new partnership with a new distributor principal and sold 20.01 percent to the new distributor principal. We retained a new ownership in Northwest of 79.99 percent. We subsequently repurchased the remaining outstanding interest under the new contract in July 2013.
Purchase price allocation
The final purchase price allocations for the largest acquisitions for 2014 and 2013 were as follows:
In millions
 
Southern Plains
 
Mid-South
 
Rocky Mountain
Accounts receivable
 
$
63

 
$
71

 
$
48

Inventory
 
59

 
70

 
100

Fixed assets
 
47

 
37

 
34

Intangible assets
 
11

 
8

 
8

Goodwill
 
1

 
4

 
10

Other current assets
 
8

 
10

 
8

Current liabilities
 
(53
)
 
(43
)
 
(41
)
Other long-term liability
 

 
(4
)
 

Total business valuation
 
136

 
153

 
167

Fair value of pre-existing interest
 
(44
)
 
(35
)
 
(31
)
Total purchase consideration
 
$
92

 
$
118

 
$
136