Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS AND DIVESTITURES (Details)

v3.3.1.900
ACQUISITIONS AND DIVESTITURES (Details) - USD ($)
$ in Millions
 12 Months Ended
Aug. 03, 2015
Jun. 29, 2015
Nov. 03, 2014
Sep. 29, 2014
Aug. 04, 2014
May. 05, 2014
Mar. 31, 2014
Feb. 14, 2014
Dec. 31, 2013
Sep. 16, 2013
Jul. 01, 2013
May. 06, 2013
Jan. 31, 2013
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Business Acquisition                                  
Gain on remeasurement of pre-existing ownership interest in the acquiree company                           $ 18 $ 73 $ 12  
Business Combination Purchase Price Distributed in Future Quarters                           2      
The purchase price was allocated as follows:                                  
Goodwill                 $ 461         $ 482 479 461  
Cummins Crosspoint LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired 50.00%                                
Cash paid for business acquisition $ 28                                
Payments to Acquire Businesses Liabilities Paid 36                                
Gain on remeasurement of pre-existing ownership interest in the acquiree company 10                                
Net sales prior to acquisition                             258    
The purchase price was allocated as follows:                                  
Intangible assets, other than goodwill 2                                
Goodwill 7                                
Consideration transferred [1] $ 65                                
Cummins Atlantic LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired 51.00%                                
Cash paid for business acquisition $ 20                                
Payments to Acquire Businesses Liabilities Paid 28                                
Gain on remeasurement of pre-existing ownership interest in the acquiree company 8                                
Net sales prior to acquisition                             $ 245    
The purchase price was allocated as follows:                                  
Intangible assets, other than goodwill 6                                
Goodwill 5                                
Consideration transferred [1] $ 49                                
Cummins Central Power LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired   20.01%                              
Cash paid for business acquisition   $ 8                              
The purchase price was allocated as follows:                                  
Intangible assets, other than goodwill   0                              
Consideration transferred   $ 8                              
Cummins Bridgeway LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired     54.00%                            
Cash paid for business acquisition     $ 32                            
Payments to Acquire Businesses Liabilities Paid     45                            
Gain on remeasurement of pre-existing ownership interest in the acquiree company     13                            
Net sales prior to acquisition                               331  
The purchase price was allocated as follows:                                  
Intangible assets, other than goodwill     15                            
Goodwill     4                            
Consideration transferred     $ 77                            
Cummins Npower LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired       50.00%                          
Cash paid for business acquisition       $ 39                          
Payments to Acquire Businesses Liabilities Paid       34                          
Gain on remeasurement of pre-existing ownership interest in the acquiree company       15                          
Net sales prior to acquisition                               374  
The purchase price was allocated as follows:                                  
Intangible assets, other than goodwill       8                          
Goodwill       7                          
Consideration transferred       $ 73                          
Cummins Power South LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired       50.00%                          
Cash paid for business acquisition       $ 19                          
Payments to Acquire Businesses Liabilities Paid       16                          
Gain on remeasurement of pre-existing ownership interest in the acquiree company       7                          
Net sales prior to acquisition                               239  
The purchase price was allocated as follows:                                  
Intangible assets, other than goodwill       1                          
Goodwill       8                          
Consideration transferred       $ 35                          
Cummins Eastern Canada LP                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired         50.00%                        
Cash paid for business acquisition         $ 30                        
Payments to Acquire Businesses Liabilities Paid         32                        
Gain on remeasurement of pre-existing ownership interest in the acquiree company         18                        
Net sales prior to acquisition                               228  
The purchase price was allocated as follows:                                  
Intangible assets, other than goodwill         4                        
Goodwill         5                        
Consideration transferred         $ 62                        
Cummins Power Systems LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired           30.00%                      
Cash paid for business acquisition           $ 14                      
Payments to Acquire Businesses Liabilities Paid           0                      
The purchase price was allocated as follows:                                  
Consideration transferred           $ 14                      
Cummins Southern Plains LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired             50.00%                    
Cash paid for business acquisition             $ 44                    
Payments to Acquire Businesses Liabilities Paid             48                    
Gain on remeasurement of pre-existing ownership interest in the acquiree company             13                    
Net sales prior to acquisition                               433  
The purchase price was allocated as follows:                                  
Accounts receivable             63                    
Inventory             59                    
Fixed assets             47                    
Intangible assets, other than goodwill             11                    
Goodwill             1                    
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other             8                    
Current liabilities             (53)                    
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities             0                    
Total business valuation             136                    
Fair value of pre-existing interest             (44)                    
Consideration transferred             $ 92                    
Cummins Mid-South LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired               62.20%                  
Cash paid for business acquisition               $ 57                  
Payments to Acquire Businesses Liabilities Paid               61                  
Gain on remeasurement of pre-existing ownership interest in the acquiree company               7                  
Net sales prior to acquisition                               $ 368  
The purchase price was allocated as follows:                                  
Accounts receivable               71                  
Inventory               70                  
Fixed assets               37                  
Intangible assets, other than goodwill               8                  
Goodwill               4                  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other               10                  
Current liabilities               (43)                  
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities               (4)                  
Total business valuation               153                  
Fair value of pre-existing interest               (35)                  
Consideration transferred               $ 118                  
Cummins Western Canada LP                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired                 35.00%             35.00%  
Cash paid for business acquisition                 $ 32                
Payments to Acquire Businesses Liabilities Paid                 0             $ 0  
The purchase price was allocated as follows:                                  
Consideration transferred                 $ 32                
Cummins Rocky Mountain LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired                       67.00%          
Cash paid for business acquisition                       $ 62          
Payments to Acquire Businesses Liabilities Paid                       74          
Gain on remeasurement of pre-existing ownership interest in the acquiree company [2]                       5          
Net sales prior to acquisition [3]                                 $ 384
The purchase price was allocated as follows:                                  
Accounts receivable                       48          
Inventory                       100          
Fixed assets                       34          
Intangible assets, other than goodwill [4]                       8          
Goodwill                       10          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other                       8          
Current liabilities                       (41)          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities                       0          
Total business valuation                       167          
Fair value of pre-existing interest                       (31)          
Consideration transferred                       $ 136          
Cummins Northwest LLC                                  
Business Acquisition                                  
Business Acquisition, Percentage of Voting Interests Acquired                     20.01%   50.00% [5]        
Cash paid for business acquisition                     $ 4   $ 18 [5]        
Gain on remeasurement of pre-existing ownership interest in the acquiree company [2],[5]                         $ 7        
Net sales prior to acquisition [3],[5]                                 $ 137
Additional interest acquired (as a percent)                         20.01%        
Ownership in partnership formed, post acquisition (as a percent)                         79.99%        
The purchase price was allocated as follows:                                  
Intangible assets, other than goodwill [4],[5]                         $ 2        
Goodwill [5]                         3        
Consideration transferred                     $ 4   $ 18 [5]        
Minimum                                  
Business Acquisition                                  
Acquisition period for North American distributors                   3 years              
Maximum                                  
Business Acquisition                                  
Acquisition period for North American distributors                   5 years              
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life                           5 years      
[1] 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.
[2] 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."
[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] 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.
[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