Goodwill and Acquired Intangibles

12 Months Ended

Dec. 31, 2016

Note 4 – Goodwill and Acquired Intangibles

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


	Aeronautics		MFC		RMS		Space Systems		Total
Balance at December 31, 2014 ^(a)		$171	$	2,181	$	4,022		$1,590	$	7,964
Sikorsky acquisition		—		—		2,764		—		2,764
Other		—		17		(48)		(2)		(33)
Balance at December 31, 2015		171		2,198		6,738		1,588		10,695
Purchase accounting adjustments		—		—		78		—		78
Other		—		62		(68)		(3)		(9)
Balance at December 31, 2016		$171	$	2,260	$	6,748		$1,585	$	10,764

^(a)	Includes reclassifications of goodwill among our business segments as a result of our program realignment, which occurred during the fourth quarter of 2015 (see “Note 1 – Significant Accounting Policies”).

The gross carrying amounts and accumulated amortization of our acquired intangible assets consisted of the following (in millions):

2016

2015

Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
Amount

Gross
Carrying

Amount

Accumulated
Amortization

Net
Carrying
Amount

Finite-Lived:

Customer programs

$3,184

$(273)

$2,911

$3,127

$ (38)

$3,089

Customer relationships

359

(92)

267

137

(59)

Other

111

(83)

111

(72)

Total finite-lived intangibles

3,654

(448)

3,206

3,375

(169)

3,206

Indefinite-Lived:

Trademarks

887

—

887

816

—

816

Total acquired intangibles

$4,541

$(448)

$4,093

$4,191

$(169)

$4,022

Acquired finite-lived intangible assets are amortized to expense primarily on a straight-line basis over the following estimated useful lives: customer programs, from nine to 20 years; customer relationships, from four to 10 years; technology, from five to seven years; trademarks, from two to five years; and other intangibles, from three to 10 years.

Amortization expense from continuing operations for acquired finite-lived intangible assets was $284 million, $68 million and $20 million in 2016, 2015 and 2014. Estimated future amortization expense is as follows: $318 million in 2017; $298 million in 2018; $285 million in 2019; $263 million in 2020; $256 million in 2021 and $1,786 million thereafter.

- 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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