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Acquisitions and Divestitures, Goodwill and Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2018
Business Combinations, Goodwill and Intangible Assets Disclosure [Abstract]  
Acquisition Consideration and Fair Value of Net Assets Acquired
The cash purchase price totaled $9.7 billion and consisted of the following:
CSRA shares outstanding (in millions)
165.4

Cash consideration per CSRA share
$
41.25

Cash paid to purchase outstanding CSRA shares
$
6,825

Cash paid to extinguish CSRA debt
2,846

Cash settlement of outstanding CSRA stock options and restricted stock units
78

Total purchase price
$
9,749
Estimated Fair Value of Assets Acquired and Liabilities Assumed on Acquisition Date
The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the acquisition date, with the excess recorded as goodwill:
Cash and equivalents
$
45

Accounts receivable
145

Unbilled receivables
718

Other current assets
290

Property, plant and equipment, net
684

Intangible assets, net
2,069

Goodwill
7,792

Other noncurrent assets
20

Total assets
$
11,763

Account payable
$
(136
)
Customer advances and deposits
(151
)
Current capital lease obligation
(51
)
Other current liabilities
(540
)
Noncurrent capital lease obligation
(207
)
Noncurrent deferred tax liability
(406
)
Other noncurrent liabilities
(523
)
Total liabilities
$
(2,014
)
Net assets acquired
$
9,749
Expected Amortization Expense Associated With Intangible Assets Acquired
We expect to record amortization expense associated with these intangible assets over the next five years as follows:
2018 (9 months post-acquisition)
$
188

2019
204

2020
195

2021
154

2022
136
Unaudited Pro Forma Information
The following pro forma information presents our consolidated revenue and earnings from continuing operations as if the acquisition of CSRA and the related financing transactions had occurred on January 1, 2017:
 
Three Months Ended
Nine Months Ended
 
September 30, 2018
 
October 1,
2017
September 30, 2018
 
October 1,
2017
Revenue
$
9,094

 
$
8,799

$
27,156

 
$
26,296

Earnings from continuing operations
872

 
776

2,470

 
2,213

Diluted earnings per share from
continuing operations
$
2.92

 
$
2.55

$
8.23

 
$
7.24
Changes In The Carrying Amount of Goodwill By Reporting Unit
The changes in the carrying amount of goodwill by reporting unit were as follows:
 
Aerospace
 
Combat Systems
 
Information Systems and Technology
 
Information Technology
 
Mission Systems
 
Marine Systems
 
Total
Goodwill
December 31, 2017 (a)
$
2,638

 
$
2,677

 
$
6,302

 
$
—

 
$
—

 
$
297

 
$
11,914

Acquisitions/
divestitures (b)
—

 
—

 
16

 
—

 
—

 
—

 
16

Other (c)
40

 
(14
)
 
(1
)
 
—

 
—

 
—

 
25

April 1, 2018 (a)
2,678

 
2,663

 
6,317

 
—

 
—

 
297

 
11,955

Change in reporting
    unit composition (d)
—

 
—

 
(6,317
)
 
2,076

 
4,241

 
—

 
—

Acquisitions/
    divestitures (b)
148

 
—

 
—

 
7,796

 
1

 
—

 
7,945

Other (c)
(37
)
 
(21
)
 
—

 
(347
)
 
(9
)
 
—

 
(414
)
September 30, 2018 (e)
$
2,789

 
$
2,642

 
$
—

 
$
9,525

 
$
4,233

 
$
297

 
$
19,486


(a)Goodwill in the Information Systems and Technology reporting unit is net of $1.9 billion of accumulated impairment losses.
(b)Includes adjustments during the purchase price allocation period. Activity in the first quarter of 2018 also includes an allocation of goodwill associated with the sale of the commercial health products business discussed above.
(c)Consists primarily of adjustments for foreign currency translation. Activity in the six-month period ended September 30, 2018, also includes an allocation of goodwill in our Information Technology reporting unit associated with the operations classified as held for sale on the unaudited Consolidated Balance Sheet on September 30, 2018.
(d)Concurrent with the acquisition of CSRA, we reorganized our Information Systems and Technology operating segment into the Information Technology and Mission Systems segments. See Note A for further discussion of the segment reorganization. This reorganization similarly changed the composition of our reporting units. Accordingly, goodwill of the Information Systems and Technology reporting unit was reassigned to the Information Technology and Mission Systems reporting units using a relative fair value allocation approach as of the date of the reorganization.
(e)Goodwill in the Information Technology and Mission Systems reporting units is net of $526 and $1.3 billion of accumulated impairment losses, respectively.
Intangible Assets
Intangible assets consisted of the following:
 
Gross Carrying Amount (a)
Accumulated Amortization
Net Carrying Amount
 
Gross Carrying Amount (a)
Accumulated Amortization
Net Carrying Amount
 
September 30, 2018
 
December 31, 2017
Contract and program
    intangible assets (b)
$
3,792

$
(1,473
)
$
2,319

 
$
1,684

$
(1,320
)
$
364

Trade names and trademarks
468

(173
)
295

 
465

(160
)
305

Technology and software
167

(115
)
52

 
137

(105
)
32

Other intangible assets
155

(154
)
1

 
155

(154
)
1

Total intangible assets
$
4,582

$
(1,915
)
$
2,667

 
$
2,441

$
(1,739
)
$
702

(a)
Change in gross carrying amounts consists primarily of adjustments for acquired intangible assets and foreign currency translation.
(b)
Consists of acquired backlog and probable follow-on work and associated customer relationships.