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Goodwill and Other Intangible Assets | 3 Months Ended
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Apr. 02, 2021
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Note J — Goodwill and Other Intangible Assets Goodwill The assignment of goodwill by business segment, and changes in the carrying amount of goodwill by business segment, were as follows:
(In millions) | Integrated Mission Systems |  | Space and Airborne Systems |  | Communication Systems |  | Aviation Systems |  | Total
Balance at January 1, 2021 | $ | 6,499 |  |  | $ | 5,232 |  |  | $ | 4,153 |  |  | $ | 2,992 |  |  | $ | 18,876 |
Goodwill decrease from divestitures(1) | — |  |  | — |  |  | — |  |  | (538) |  |  | (538) |
Impairment of goodwill | — |  |  | — |  |  | — |  |  | (62) |  |  | (62) |
Currency translation adjustments | (5) |  |  | (14) |  |  | — |  |  | (5) |  |  | (24) |
Balance at April 2, 2021 | $ | 6,494 |  |  | $ | 5,218 |  |  | $ | 4,153 |  |  | $ | 2,387 |  |  | $ | 18,252 |
Balance at January 3, 2020 | $ | 5,768 |  |  | $ | 5,131 |  |  | $ | 4,243 |  |  | $ | 4,859 |  |  | $ | 20,001 |
Goodwill decrease from divestitures(1) | — |  |  | (2) |  |  | (9) |  |  | (588) |  |  | (599) |
Impairment of goodwill | — |  |  | (5) |  |  | — |  |  | (296) |  |  | (301) |
Currency translation adjustments | (2) |  |  | (9) |  |  | (3) |  |  | (10) |  |  | (24) |
Other (including adjustments to previously estimated fair value of assets acquired and liabilities assumed) | 22 |  |  | 55 |  |  | 38 |  |  | 73 |  |  | 188 |
Balance at April 3, 2020 | $ | 5,788 |  |  | $ | 5,170 |  |  | $ | 4,269 |  |  | $ | 4,038 |  |  | $ | 19,265 |
_______________ (1)During the quarters ended April 2, 2021 and April 3, 2020, we assigned $538 million and $599 million, respectively, of goodwill associated with pending divestitures to “Assets of disposal groups held for sale” in our Condensed Consolidated Balance Sheet (Unaudited). See Note B — Business Divestitures in these Notes for additional information. CPS Business Impairment. During the quarter ended April 2, 2021, we determined the criteria to be classified as held for sale were met with respect to the CPS business within our Aviation Systems segment and assigned $174 million of goodwill to the disposal group on a relative fair value basis. In connection with the preparation of our financial statements for the quarter ended April 2, 2021, we concluded that goodwill related to the CPS business was impaired and we recorded a non-cash impairment charge of $62 million, which is included in the “Impairment of goodwill and other assets” line item in our Condensed Consolidated Statement of Income (Unaudited). See Note B — Business Divestitures in these Notes for additional information. Commercial Aviation Solutions Impairment. Indications of potential impairment of goodwill related to our Commercial Aviation Solutions reporting unit (which is part of our Aviation Systems segment) were present at April 3, 2020 due to the COVID pandemic and its impact on global air traffic and customer operations, which resulted in a decrease in the fiscal 2020 outlook for the reporting unit, which we considered to be a triggering event requiring an interim impairment test. Consequently, in connection with the preparation of our financial statements for the quarter ended April 3, 2020, we performed a quantitative impairment test. To test for potential impairment of goodwill related to our Commercial Aviation Solutions reporting unit, we prepared an estimate of the fair value of the reporting unit based on a combination of market-based valuation techniques, utilizing quoted market prices and comparable publicly reported transactions, and projected discounted cash flows. As a result of this impairment test, we concluded that goodwill related to our Commercial Aviation Solutions reporting unit was impaired as of April 3, 2020 and recorded a non-cash impairment charge of $296 million (including $28 million attributable to noncontrolling interests) in the “Impairment of goodwill and other assets” line item in our Condensed Consolidated Statement of Income (Unaudited) for the quarter ended April 3, 2020. The goodwill impairment charge was primarily not deductible for tax purposes. Identifiable Intangible Assets The most significant identifiable intangible asset that is separately recognized for our business combinations is customer relationships. Our customer relationships are established through written customer contracts (revenue arrangements). The fair value for customer relationships is determined, as of the date of acquisition, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows arising from the follow-on sales expected from the customer relationships over the estimated lives, including the probability of expected future contract renewals and sales, less a contributory asset charge, all of which is discounted to present value. We assess the recoverability of the carrying value of our finite-lived identifiable intangible assets whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. We assess the recoverability of the carrying value of indefinite-lived identifiable intangible assets annually, or under certain circumstances more frequently, such as when events and circumstances indicate there may be an impairment. Identifiable intangible assets are summarized below:
| April 2, 2021 |  | January 1, 2021
(In millions) | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount(1) |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Customer relationships | $ | 6,320 |  |  | $ | 1,323 |  |  | $ | 4,997 |  |  | $ | 6,863 |  |  | $ | 1,257 |  |  | $ | 5,606 |
Developed technologies | 634 |  |  | 273 |  |  | 361 |  |  | 653 |  |  | 261 |  |  | 392 |
Contract backlog | 16 |  |  | 14 |  |  | 2 |  |  | 19 |  |  | 17 |  |  | 2 |
Trade names — divisions | 130 |  |  | 49 |  |  | 81 |  |  | 129 |  |  | 45 |  |  | 84 |
Other | 3 |  |  | 3 |  |  | — |  |  | 3 |  |  | 3 |  |  | — |
Total identifiable intangible assets subject to amortization | 7,103 |  |  | 1,662 |  |  | 5,441 |  |  | 7,667 |  |  | 1,583 |  |  | 6,084 |
In-process research and development | 21 |  |  | — |  |  | 21 |  |  | 21 |  |  | — |  |  | 21 |
Trade names — corporate | 1,803 |  |  | — |  |  | 1,803 |  |  | 1,803 |  |  | — |  |  | 1,803 |
Total identifiable intangible assets | $ | 8,927 |  |  | $ | 1,662 |  |  | $ | 7,265 |  |  | $ | 9,491 |  |  | $ | 1,583 |  |  | $ | 7,908 |
_______________ (1)During the quarter ended April 2, 2021, we reclassified $486 million of intangible assets associated with pending divestitures to “Assets of disposal groups held for sale” in our Consolidated Condensed Balance Sheet (Unaudited). See Note B — Business Divestitures in these Notes for additional information regarding divestitures. Amortization expense related to identifiable intangible assets, which primarily relates to the L3Harris Merger, was $164 million and $158 million for the quarters ended April 2, 2021 and April 3, 2020, respectively. Future estimated amortization expense for identifiable intangible assets subject to amortization is as follows:
| (In millions)
Year 1 | $ | 628 |
Year 2 | 625 |
Year 3 | 612 |
Year 4 | 570 |
Year 5 | 521 |
Thereafter | 2,485 |
Total | $ | 5,441 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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