Divestitures and Assets held for sale

3 Months Ended

Mar. 31, 2012

Divestitures and Assets held for sale

Divestitures and Assets held for sale

19.Divestitures and Assets held for sale

Bucyrus Distribution Business Divestiture

In conjunction with our acquisition of Bucyrus in July 2011, we announced our intention to sell the Bucyrus distribution business to Caterpillar dealers that support mining customers around the world in a series of individual transactions. Bucyrus predominantly employed a direct to end customer model to sell and support products. The intention is for all Bucyrus products to be sold and serviced by Caterpillar dealers, consistent with our long-held distribution strategy. We expect these transitions will occur in phases, based on the mining business opportunity within each dealer territory.

As portions of the Bucyrus distribution business are sold or classified as held for sale, they will not qualify as discontinued operations because Caterpillar expects significant continuing direct cash flows from the Caterpillar dealers after the divestitures. The gain or loss on disposal, along with the continuing operations of these disposal groups, will be reported in the Resource Industries segment. Goodwill will be allocated to each disposal group using the relative fair value method. The value of the customer relationship intangibles related to each portion of the Bucyrus distribution business to be sold will be included in the disposal groups. The disposal groups will be recorded at the lower of their carrying value or fair value less cost to sell. There have been no impairments related to the Bucyrus distribution business as of March 31, 2012.

In December 2011, we sold a portion of the Bucyrus distribution business to the Industrial Division of Sime Darby Berhad operated by Hastings Deering. Five of the remaining divestiture transactions were classified as held for sale at March 31, 2012 and are expected to close throughout the remainder of 2012. During the three months ended March 31, 2012, $31 million of costs were incurred related to the Bucyrus distribution business divestiture activities ($26 million included in Selling, general and administrative expenses and $5 million included in Other operating (income) expenses). Current assets held for sale were included in Prepaid expenses and other current assets and non-current assets held for sale were included in Other assets in the Consolidated Statement of Financial Position. The major classes of assets held for sale were as follows:

(Millions of dollars)	March 31, 2012		December 31,  2011
Receivables	$	—	$	25
Inventory	185		109
Current assets held for sale	$	185	$	134
Property plant and equipment - net	$	30	$	28
Intangible Assets	220		186
Goodwill	347		296
Non-current assets held for sale	$	597	$	510

In April 2012, we committed to sell additional portions of the Bucyrus distribution business to two more Caterpillar dealers. These disposal groups qualified as held for sale in April 2012. The related assets were considered held and used at March 31, 2012. The major classes of assets that were held and used at March 31, 2012 but subsequently classified as assets held for sale were as follows:

(Millions of dollars)	March 31, 2012
Inventory	$	65
Property plant and equipment - net	23
Intangible Assets	51
Goodwill	87
Total Assets	$	226