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. These transitions are occurring 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. The portions of the distribution business that were sold were not material to our results of operations, financial position or cash flow.

We completed three sale transactions during the first quarter 2014 whereby we sold portions of the Bucyrus distribution business to Caterpillar dealers for an aggregate price of $17 million. For the first three months of 2014, after-tax profit was unfavorably impacted by $6 million as a result of the Bucyrus distribution divestiture activities. This is comprised of $1 million of income related to the sales transactions (included in Other operating (income) expenses), costs incurred related to the Bucyrus distribution divestiture activities of $11 million (included in Selling, general and administrative expenses) and an income tax benefit of $4 million.

Assets sold in the first three months of 2014 primarily consisted of customer relationship intangibles of $16 million and allocated goodwill of $5 million related to the divested portions of the Bucyrus distribution business.

As of March 31, 2014, eight divestiture transactions were classified as held for sale and are expected to close in 2014. 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 for a portion of the Bucyrus distribution business were as follows:



(Millions of dollars)	March 31, 2014		December 31, 2013

Inventories	$	14	$	14
Current assets	$	14	$	14

Property, plant and equipment – net	$	5	$	5
Intangible assets	33		44
Goodwill	45		45
Non-current assets	$	83	$	94