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Goodwill and Identifiable Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2016
Goodwill and Identifiable Intangible Assets [Abstract]  
Changes in Goodwill by Segment
The table below presents the changes in goodwill allocated to the Company’s reporting units in each reportable segment.
 
Electronic
Systems
Aerospace
Systems
Communication
Systems
Consolidated
Total
(in millions)
Balance at December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
$
3,816
 
$
1,730
 
$
1,024
 
$
6,570
 
Accumulated impairment losses
 
(43
)
 
—
 
 
(15
)
 
(58
)
 
3,773
 
 
1,730
 
 
1,009
 
 
6,512
 
Business acquisitions(1)
 
233
 
 
—
 
 
11
 
 
244
 
Business divestitures(2)
 
(20
)
 
—
 
 
—
 
 
(20
)
Business retained from NSS divestiture
 
26
 
 
—
 
 
2
 
 
28
 
Goodwill impairment charges
 
(26
)
 
(338
)
 
(20
)
 
(384
)
Foreign currency translation adjustments(3)
 
(61
)
 
(39
)
 
1
 
 
(99
)
Balance at December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
3,994
 
 
1,691
 
 
1,038
 
 
6,723
 
Accumulated impairment losses(4)
 
(69
)
 
(338
)
 
(35
)
 
(442
)
 
3,925
 
 
1,353
 
 
1,003
 
 
6,281
 
Business acquisitions(1)
 
315
 
 
—
 
 
20
 
 
335
 
Foreign currency translation adjustments(3)
 
(63
)
 
7
 
 
—
 
 
(56
)
Balance at December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
4,246
 
 
1,698
 
 
1,058
 
 
7,002
 
Accumulated impairment losses
 
(69
)
 
(338
)
 
(35
)
 
(442
)
$
4,177
 
$
1,360
 
$
1,023
 
$
6,560
 
 
 
 
(1)
For the year ended December 31, 2016, the net increase in goodwill for the Electronic Systems segment was due to the L3 MacDonald Humfrey, Aeroism and Micreo business acquisitions, as well as the final purchase price allocations for the L3 ForceX and L3 CTC business acquisitions. The increase in goodwill for the Communication Systems segment was due to the ATM business acquisition. For the year ended December 31, 2015, the net increase in goodwill for the Electronic Systems segment was due to the L3 CTC and L3 ForceX business acquisitions. The increase in goodwill for the Communication Systems segment was due to the Miteq business acquisition.
 
(2)
For the year ended December 31, 2015, the decrease in goodwill for the Electronic Systems segment was due to the divestitures of BSI, the Tinsley Product Line and Klein.
 
 
(3)
During 2016, the decrease in goodwill presented in the Electronic Systems segment was due to the strengthening of the U.S. dollar against the British pound, the Euro and the Australian dollar, offset by the weakening of the U.S. dollar against the Canadian dollar. The increase in goodwill presented in the Aerospace Systems segment was due to the weakening of the U.S. dollar against the Canadian dollar. During 2015, the decrease in goodwil presented in the Electronic Systems segment was primarily due to the strengthening of the U.S. dollar against the Canadian dollar, the British pound and the Euro. The decrease in goodwill presented in the Aerospace Systems segment was due to the strengthening of the U.S. dollar against the Canadian dollar.
 
(4)
The accumulated impairment losses at December 31, 2015 exclude $571 million of impairment charges recorded during 2015 relating to the NSS reporting unit, which is reported in discontinued operations.
Adjustments Related to Goodwill Impairment Charges
The adjustments the Company recorded related to goodwill impairment charges are presented in a separate caption on the audited consolidated statements of operations and are summarized below.
 
Year Ended December 31, 2015
Goodwill Impairment Charges
Continuing
Operations
Discontinued
Operations
L3
Consolidated
(in millions)
Vertex Aerospace reporting unit impairment
$
338
 
$
—
 
$
338
 
NSS reporting unit impairment
 
37
 
 
571
 
 
608
 
Re-allocation of goodwill for business retained from NSS
 
9
 
 
—
 
 
9
 
Total
$
384
 
$
571
 
$
955
 
Identifiable Intangible Assets
Information on the Company’s identifiable intangible assets that are subject to amortization is presented in the table below.
 
December 31, 2016
December 31, 2015
Weighed
Average
Amortization
Period
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(in years)
(in millions)
Customer contractual relationships
 
15
 
$
409
 
$
269
 
$
140
 
$
370
 
$
246
 
$
124
 
Technology
 
11
 
 
191
 
 
102
 
 
89
 
 
156
 
 
91
 
 
65
 
Other
 
18
 
 
21
 
 
12
 
 
9
 
 
21
 
 
11
 
 
10
 
Total
 
14
 
$
621
 
$
383
 
$
238
 
$
547
 
$
348
 
$
199
 
Amortization Expense
Amortization expense recorded by the Company for its identifiable intangible assets is presented in the table below.
 
Year Ended December 31,
2016
2015
2014
(in millions)
Amortization expense
$
35
 
$
35
 
$
39
 
Estimated Amortization Expense

Based on gross carrying amounts at December 31, 2016, the Company’s estimate of amortization expense for identifiable intangible assets for the years ending December 31, 2017 through 2021 is presented in the table below.

 

Year Ending December 31,
2017
2018
2019
2020
2021
(in millions)
Estimated amortization expense
$
39
 
$
35
 
$
32
 
$
28
 
$
24