GOODWILL AND ACQUIRED INTANGIBLE ASSETS

6 Months Ended

Jun. 26, 2016

NOTE 4 – GOODWILL AND ACQUIRED INTANGIBLE ASSETS

Changes in the carrying amount of goodwill by segment were as follows (in millions):


	Aeronautics		IS&GS			MFC			MST			Space Systems			Total
Balance at December 31, 2015		$ 171		$ 2,881			$ 2,198			$ 6,738			$ 1,588			$ 13,576
Acquisitions		—		—			—			43			—			43
Divestitures		—		—			—			(7	)		—			(7	)
Foreign currency translation		—		(13	)		(5	)		28			(1	)		9
Balance at June 26, 2016		$ 171		$ 2,868			$ 2,193			$ 6,802			$ 1,587			$ 13,621

Acquired intangible assets consisted of the following (in millions):

June 26, 2016

December 31, 2015

Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
Amount

Gross
Carrying

Amount

Accumulated
Amortization

Net
Carrying
Amount

Finite-Lived:

Customer programs

$ 3,099

$ (145)

$ 2,954

$ 3,127

$ (38)

$ 3,089

Customer relationships

309

(167)

142

309

(166)

143

Other

171

(121)

171

(90)

Total finite-lived intangibles

3,579

(433)

3,146

3,607

(294)

3,313

Indefinite Lived:

Trademarks

905

—

905

834

—

834

Total acquired intangibles

$ 4,484

$ (433)

$ 4,051

$ 4,441

$ (294)

$ 4,147

Acquired finite-lived intangible assets are amortized to expense over the following estimated useful lives: customer programs from nine to 20 years, customer relationships from four to 10 years, other finite-lived intangible assets from two to 10 years. During the quarter and six months ended June 26, 2016, we continued to obtain information and refine the appraisals of the fair values of intangible assets related to the Sikorsky acquisition. For further details on changes in intangible asset values (See Note 3).

Amortization expense for acquired finite-lived intangible assets was $70 million and $139 million for the quarter and six months ended June 26, 2016 and $20 million and $41 million for the quarter and six months ended

June 28, 2015. Estimated future amortization expense is as follows: $139 million remaining in 2016; $262 million in 2017; $248 million in 2018; $243 million in 2019; $236 million in 2020; $231 million in 2021 and $1.8 billion thereafter. Our estimates of amortization expense for finite-lived intangible assets are subject to change, pending the final determination of the fair value of intangible assets acquired in connection with the Sikorsky acquisition (See Note 3).

- 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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