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Acquisitions and Divestitures, Goodwill and Intangible Assets | 6 Months Ended
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Jun. 30, 2019
Business Combinations, Goodwill and Intangible Assets Disclosure [Abstract] |
Acquisitions and Divestitures, Goodwill and Intangible Assets | ACQUISITIONS AND DIVESTITURES, GOODWILL, AND INTANGIBLE ASSETS CSRA Acquisition On April 3, 2018, we acquired 100% of the outstanding shares of CSRA Inc. (CSRA) for $41.25 per share in cash plus the assumption of outstanding net debt. CSRA is a provider of IT solutions to the defense, intelligence and federal civilian markets and is included in our Information Technology segment. Fair Value of Net Assets Acquired. The following table summarizes the allocation of the $9.7 billion cash 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 | 155 |
Unbilled receivables | 415 |
Other current assets | 303 |
Property, plant and equipment, net | 326 |
Intangible assets, net | 2,066 |
Goodwill | 7,935 |
Other noncurrent assets | 369 |
Total assets | $ | 11,614 |
Accounts payable | $ | (135 | )
Customer advances and deposits | (151 | )
Current lease obligation | (51 | )
Other current liabilities | (434 | )
Noncurrent lease obligation | (207 | )
Noncurrent deferred tax liability | (355 | )
Other noncurrent liabilities | (532 | )
Total liabilities | $ | (1,865 | )
Net assets acquired | $ | 9,749 |
Pro Forma Information. The following pro forma information presents our consolidated revenue and net earnings as if the acquisition of CSRA and the related financing transactions had occurred on January 1, 2017:
| Three Months Ended |  | Six Months Ended
| July 1, 2018 |  | July 1, 2018
Revenue | $ | 9,225 |  |  | $ | 18,062 |
Net Earnings | 854 |  |  | 1,598 |
Diluted earnings per share | $ | 2.85 |  |  | $ | 5.32 |
The pro forma information was prepared by combining our reported historical results with the historical results of CSRA for the pre-acquisition periods. In addition, the reported historical amounts were adjusted for the following items, net of associated tax effects:
• | The impact of acquisition financing.
• | The removal of certain CSRA operations we were required by a government customer to dispose of to address an organizational conflict of interest with respect to services provided to the customer. We completed the sale of these operations in the third quarter of 2018.
• | The removal of CSRA’s historical pre-acquisition intangible asset amortization expense and debt-related interest expense.
• | The impact of intangible asset amortization expense assuming our estimate of fair value was applied on January 1, 2017.
• | The payment of acquisition-related costs assuming they were incurred on January 1, 2017.
The pro forma information does not reflect the realization of expected cost savings or synergies from the acquisition, and does not reflect what our combined results of operations would have been had the acquisition occurred on January 1, 2017. Other Acquisitions and Divestitures In the first six months of 2019, we acquired a business in each of our Aerospace and Missions Systems segments for a total of $17. In 2018, we acquired five businesses in addition to the acquisition of CSRA for approximately $400: Hawker Pacific, a leading provider of integrated aviation solutions across Asia Pacific and the Middle East, and two fixed-base operation (FBO) businesses in our Aerospace segment; a maintenance and service provider for the German Army and other international customers in our Combat Systems segment; and a provider of specialized transmitters and receivers in our Mission Systems segment. The operating results of these acquisitions have been included with our reported results since the respective closing dates. The purchase prices of the acquisitions have been allocated to the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill. In the first six months of 2019, we completed the sale of a business in our Information Technology segment that was classified as held for sale on the Consolidated Balance Sheet on December 31, 2018. In 2018, we completed the sale of a commercial health products business during the first quarter and the sale of a public-facing contact-center business during the fourth quarter in our Information Technology segment. For the six-month periods ended June 30, 2019, and July 1, 2018, the proceeds from the sale of businesses were not material and are included in other investing activities, net, in the unaudited Consolidated Statement of Cash Flows. Goodwill The changes in the carrying amount of goodwill by reporting unit were as follows:
| Aerospace |  | Combat Systems |  | Information Technology |  | Mission Systems |  | Marine Systems |  | Total Goodwill
December 31, 2018 (a) | $ | 2,813 |  |  | $ | 2,633 |  |  | $ | 9,622 |  |  | $ | 4,229 |  |  | $ | 297 |  |  | $ | 19,594 |
Acquisitions/divestitures (b) | 2 |  |  | 7 |  |  | 77 |  |  | 6 |  |  | — |  |  | 92 |
Other (c) | 13 |  |  | 32 |  |  | 1 |  |  | (70 | ) |  | — |  |  | (24 | )
June 30, 2019 (a) | $ | 2,828 |  |  | $ | 2,672 |  |  | $ | 9,700 |  |  | $ | 4,165 |  |  | $ | 297 |  |  | $ | 19,662 |
(a)Goodwill in the Information Technology and Mission Systems reporting units is net of $536 and $1.3 billion of accumulated impairment losses, respectively. (b)Includes adjustments during the purchase price allocation period. (c)Consists primarily of adjustments for foreign currency translation. Also includes an estimated allocation of goodwill in our Mission Systems reporting unit associated with a non-core operation classified as held for sale on the unaudited Consolidated Balance Sheet on June 30, 2019. As we expect this operation to be divested within the next 12 months, the assets and liabilities held for sale are included in other current assets and liabilities on the unaudited Consolidated Balance Sheet. 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
| June 30, 2019 |  | December 31, 2018
Contract and program intangible assets (b) | $ | 3,777 |  | $ | (1,656 | ) | $ | 2,121 |  |  | $ | 3,771 |  | $ | (1,531 | ) | $ | 2,240 |
Trade names and trademarks | 472 |  | (186 | ) | 286 |  |  | 469 |  | (177 | ) | 292 |
Technology and software | 170 |  | (122 | ) | 48 |  |  | 165 |  | (116 | ) | 49 |
Other intangible assets | 159 |  | (157 | ) | 2 |  |  | 159 |  | (155 | ) | 4 |
Total intangible assets | $ | 4,578 |  | $ | (2,121 | ) | $ | 2,457 |  |  | $ | 4,564 |  | $ | (1,979 | ) | $ | 2,585 |
(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.
Amortization expense for intangible assets was $70 and $140 for the three- and six-month periods ended June 30, 2019, and $84 and $104 for the three- and six-month periods ended July 1, 2018, respectively.

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