XML 40 R24.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Recent Transactions | 12 Months Ended
--- | ---
Dec. 31, 2015
Business Combinations [Abstract] |
Recent transactions | RECENT TRANSACTIONS Remy International, Inc. On November 10, 2015, the Company acquired 100% of the equity interests in Remy for $29.50 per share in cash. The Company also settled approximately $361 million of outstanding debt. Remy was a global market leading producer of rotating electrical components that had key technologies and operations in 10 countries. The cash paid, net of cash acquired, was $1,187.0 million. The Remy acquisition is expected to strengthen the Company's position in the rapidly developing powertrain electrification trend, with a complementary combination of technologies and global operations. The operating results and assets are reported within the Company's Drivetrain reporting segment as of the date of the acquisition. Remy's results from the date of acquisition through December 31, 2015 were insignificant to the Company's Consolidated Statement of Operations. The Company paid $1,187.0 million, which is recorded as an investing activity in the Company's Consolidated Statement of Cash Flows. Additionally, the Company assumed retirement-related liabilities of $31.1 million and assumed debt of $10.9 million, which are reflected in the supplemental cash flow information on the Company's Consolidated Statement of Cash Flows. The following table summarizes the aggregated estimated fair value of the assets acquired and liabilities assumed on November 10, 2015, the date of acquisition:
(millions of dollars) |  |
Receivables, net |  | $ | 224.4 |
Inventories, net |  | 200.2 |
Property, plant and equipment, net |  | 196.6 |
Goodwill |  | 584.7 |
Other intangible assets |  | 412.6 |
Other assets and liabilities |  | (225.0 | )
Accounts payable and accrued expenses |  | (164.5 | )
Total consideration, net of cash acquired |  | 1,229.0 |
Less: Assumed retirement-related liabilities |  | 31.1 |
Less: Assumed debt |  | 10.9 |
Cash paid, net of cash acquired |  | $ | 1,187.0 |
In connection with the acquisition, the Company capitalized $303.3 million for customer relationships, $46.4 million for developed technology, $59.0 million for the Delco Remy, Remy and Maval trade names, $3.8 million for in-process R&D and $0.1 million for leasehold interests. These intangible assets, excluding the indefinite-lived trade names, will be amortized over a period of 5 to 15 years. Various valuation techniques were used to determine the fair value of the intangible assets, with the primary techniques being forms of the income approach, specifically, the relief-from-royalty and excess earnings valuation methods, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. Under these valuation approaches, the Company is required to make estimates and assumptions about sales, operating margins, growth rates, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. Due to the nature of the transaction, goodwill is not deductible for tax purposes. The Company is in the process of finalizing all purchase accounting adjustments related to the Remy acquisition. Certain estimated values for the acquisition, including goodwill, intangible assets and deferred taxes are not yet finalized, and the preliminary purchase price allocations are subject to change as the Company completes its analysis of the fair value at the date of acquisition. Supplemental Pro Forma Data (Unaudited) The following supplemental pro forma information for the years ended December 31, 2015 and 2014 is based on the assumption that the acquisition of Remy occurred on January 1, 2014.
(millions of dollars, except per share amounts) | 2015 |  | 2014
Net sales | $ | 8,977.7 |  |  | $ | 9,487.4 |
Net earnings | $ | 652.0 |  |  | $ | 653.9 |
Earnings per share: |  |  |
Basic | $ | 2.91 |  |  | $ | 2.88 |
Diluted | $ | 2.89 |  |  | $ | 2.86 |
The 2014 pro forma results include after-tax adjustments of $23.2 million of investment banker and other fees and accelerated stock compensation incurred by the Company and Remy related to the acquisition; $12.2 million net decrease in expense related to fair value adjustments; and $3.0 million net decrease in interest expense. These pro forma results of operations have been prepared for comparative purposes only, and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the date indicated or that may result in the future. BERU Diesel Start Systems Pvt. Ltd. In January 2015, the Company completed the purchase of the remaining 51% of BERU Diesel by acquiring the shares of its former joint venture partner. The former joint venture was formed in 1996 to develop and manufacture glow plugs in India. After this transaction, the Company owns 100% of the entity. The cash paid, net of cash acquired, was $12.6 million (783.1 million Indian rupees). The operating results are reported within the Company's Engine reporting segment. The Company paid $12.6 million, which is recorded as an investing activity in the Company's Consolidated Statement of Cash Flows. As a result of this transaction, the Company recorded a $10.8 million gain on the previously held equity interest in this joint venture. Additionally, the Company acquired assets of $16.0 million, including $11.2 million in definite-lived intangible assets, and assumed liabilities of $4.6 million. The Company also recorded $13.9 million of goodwill, which is expected to be non-deductible for tax purposes. Gustav Wahler GmbH u. Co KG On February 28, 2014, the Company acquired 100% of the equity interests in Wahler. Wahler was a producer of exhaust gas recirculation ("EGR") valves, EGR tubes and thermostats, and had operations in Germany, Brazil, the U.S., China and Slovakia. The cash paid, net of cash acquired was $110.5 million (80.1 million Euro). The Wahler acquisition strengthens the Company's strategic position as a producer of complete EGR systems and creates additional market opportunities in both passenger and commercial vehicle applications. The operating results and assets are reported within the Company's Engine reporting segment as of the date of the acquisition. The Company paid $110.5 million, which is recorded as an investing activity in the Company's Consolidated Statement of Cash Flows. Additionally, the Company assumed retirement-related liabilities of $3.2 million and assumed debt of $40.3 million, which are reflected in the supplemental cash flow information on the Company's Consolidated Statement of Cash Flows. The following table summarizes the aggregated estimated fair value of the assets acquired and liabilities assumed on February 28, 2014, the date of acquisition:
(millions of dollars) |  |
Receivables, net |  | $ | 52.4 |
Inventories, net |  | 46.8 |
Property, plant and equipment, net |  | 55.3 |
Goodwill |  | 74.6 |
Other intangible assets |  | 42.7 |
Other assets and liabilities |  | (47.4 | )
Accounts payable and accrued expenses |  | (70.4 | )
Total consideration, net of cash acquired |  | 154.0 |
Less: Assumed retirement-related liabilities |  | 3.2 |
Less: Assumed debt |  | 40.3 |
Cash paid, net of cash acquired |  | $ | 110.5 |
In connection with the acquisition, the Company capitalized $24.9 million for customer relationships, $10.2 million for know-how, $4.1 million for patented technology and $3.5 million for the Wahler trade name. These intangible assets will be amortized over a period of 5 to 15 years. The income approach was used to determine the fair value of all intangible assets. Additionally, $56.9 million in goodwill is non-deductible for tax purposes.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration