Acquisitions, Divestitures, Intangible Assets And Goodwill

12 Months Ended

Dec. 31, 2011

Acquisitions, Divestitures, Intangible Assets And Goodwill [Abstract]

Acquisitions, Divestitures, Intangible Assets And Goodwill

B. ACQUISITIONS, DIVESTITURES, INTANGIBLE ASSETS AND GOODWILL

In 2011, we acquired six businesses for an aggregate of $1.6 billion in cash:

Combat Systems

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A provider of wheeled vehicles, survivability solutions and vehicle sustainment services for the armed forces of the United States and its allies (on December 19).

Marine Systems

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A surface-ship repair business in Norfolk, Virginia, that supports the U.S. Navy fleet (on October 31).

Information Systems and Technology

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A provider of enterprise services and cloud computing to the U.S. Department of Defense (on July 15).

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A provider of secure wireless networking equipment for the U.S. military and other government customers (on July 22).

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A provider of information assurance and security software (on August 12).

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A provider of health information technology services and business systems to federal agencies (on September 30).

In 2010, we acquired three businesses for an aggregate of $233 in cash:

Combat Systems

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A business that demilitarizes, incinerates and disposes of munitions, explosives and explosive wastes in an environmentally safe and efficient manner (on May 12).

Information Systems and Technology

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A provider of software for military mission planning and execution (on January 8).

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A company that designs and manufactures sensor and optical surveillance systems for military and security applications (on June 22).

In 2009, we acquired two businesses in the Information Systems and Technology group for an aggregate of $811 in cash:

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An information technology services business that performs work for our classified customers (on January 26).

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A company that designs and manufactures high-performance electro-optical and infrared (EO/IR) sensors and systems and multi-axis stabilized cameras (on September 2).

We funded these acquisitions using cash on hand. The operating results of these acquisitions have been included with our reported results since their respective closing dates. In 2011, we recognized in other income $17 of transaction-related costs associated with our acquisitions. The purchase prices of these acquisitions have been allocated preliminarily to the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill.

In 2011, we sold the detection systems portion of the weapons systems business in our Combat Systems group. The pretax gain of $38 on the sale was reported in other income in the Consolidated Statement of Earnings. The proceeds from the sale are included in other investing activities on the Consolidated Statement of Cash Flows.

Intangible assets consisted of the following:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
		December 31, 2010						December 31, 2011
Contract and program intangible assets*		$ 2,421		$ (949)		$ 1,472		$ 2,393		$ (1,060)		$ 1,333
Trade names and trademarks		483		(58)		425		477		(70)		407
Technology and software		176		(94)		82		175		(110)		65
Other intangible assets		207		(194)		13		174		(166)		8
Total intangible assets		$ 3,287		$ (1,295)		$ 1,992		$ 3,219		$ (1,406)		$ 1,813

*	Consists of acquired backlog and probable follow-on work and related customer relationships. December 31, 2011 amount includes impact of $111 impairment of completions business intangible asset in our Aerospace group.

The amortization lives (in years) of our intangible assets on December 31, 2011, were as follows:


	Range of Amortization Life	Weighted Average Amortization Life
Contract and program intangible assets	7-30	17
Trade names and trademarks	30	30
Technology and software	7-13	11
Other intangible assets	7-15	11

Total intangible assets		19

We amortize intangible assets on a straight-line basis unless the pattern of usage of the benefits indicates an alternate method is more representative of the usage of the asset. Amortization expense was $218 in 2009, $224 in 2010 and $238 in 2011. We expect to record annual amortization expense over the next five years as follows:



2012	$	225
2013		182
2014		159
2015		155
2016		128

The changes in the carrying amount of goodwill by reporting unit during 2010 and 2011 were as follows:


	Aerospace			Combat Systems			Marine Systems		Information Systems and Technology		Total Goodwill
December 31, 2009		$ 2,480			$ 2,710			$ 198		$ 6,881		$ 12,269
Acquisitions		–			57			–		76		133
Other*		170			61			–		16		247
December 31, 2010		2,650			2,828			198		6,973		12,649
Acquisitions		–			60			31		897		988
Other*		(6	)		(49	)		–		(6)		(61)
December 31, 2011		$ 2,644			$ 2,839			$ 229		$ 7,864		$ 13,576

*	Consists primarily of adjustments for foreign currency translation.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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