Goodwill and Intangible Assets (Notes)

9 Months Ended

Nov. 01, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Note 5—Goodwill and Intangible Assets:

Goodwill

The following table presents the carrying value of goodwill by reportable segment:


	November 1, 2024		February 2, 2024
	(in millions)
Defense and Intelligence	$	2,001	$	2,001
Civilian	850		850
Total	$	2,851	$	2,851

Goodwill is not amortized, but rather tested for potential impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The goodwill impairment test is performed at

the reporting unit level. As a result of the internal reorganization on February 3, 2024, the Company reallocated its goodwill to its five new goodwill reporting units.

The Company performed a goodwill impairment test immediately before and after the reorganization, both of which resulted in no impairment. For the goodwill impairment test immediately after the reorganization, the Company performed a quantitative assessment of its goodwill as of February 3, 2024 for its five new goodwill reporting units. The Company estimated the fair value of each reporting unit using a 50:50 weighting of fair values derived from an income approach and market approach.

Under the income approach, the Company estimated the fair value of its reporting units using a multi-year discounted cash flow model involving assumptions about projected future revenue growth, operating margins, income tax rates, capital expenditures, discount rate, and terminal value. Under the market approach, the Company estimated the fair value of its reporting units based on multiples of earnings derived from observable market data of comparable public companies.

Intangible Assets

Intangible assets, all of which were finite-lived, consisted of the following:


	November 1, 2024						February 2, 2024
	Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
	(in millions)
Customer relationships	$	1,462	$	(660)	$	802	$	1,462	$	(574)	$	888
Developed technology	10		(5)		5		10		(4)		6
Trade name	1		(1)		—		1		(1)		—
Total intangible assets	$	1,473	$	(666)	$	807	$	1,473	$	(579)	$	894

Amortization expense related to intangible assets was $29 million and $87 million for the three and nine months ended November 1, 2024, respectively, and $28 million and $86 million for the three and nine months ended November 3, 2023, respectively. There were no intangible asset impairment losses during the periods presented.

As of November 1, 2024, the estimated future annual amortization expense related to intangible assets is as follows:


Fiscal Year	(in millions)
Remainder of 2025	$	28
2026	115
2027	115
2028	98
2029	97
Thereafter	354
Total	$	807

Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, and other factors.