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GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended
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Dec. 29, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6: GOODWILL AND INTANGIBLE ASSETS The assignment of goodwill and changes in the carrying amount of goodwill, by business segment, for fiscal 2023 and 2022 were as follows:
(In millions) | SAS |  | IMS |  | CS |  | AR |  | Total
Balance at December 31, 2021 | $ | 5,849 |  |  | $ | 8,187 |  |  | $ | 4,153 |  |  | ** |  | $ | 18,189 |
Assets of business held for sale(1) | (30) |  |  | — |  |  | — |  |  | ** |  | (30) |
Impairment of goodwill | — |  |  | (447) |  |  | (355) |  |  | ** |  | (802) |
Currency translation adjustments | (41) |  |  | (31) |  |  | (2) |  |  | ** |  | (74) |
Balance at December 30, 2022 | 5,778 |  |  | 7,709 |  |  | 3,796 |  |  | ** |  | 17,283 |
Reallocation of goodwill in business realignment(2) | 327 |  |  | (327) |  |  | — |  |  | — |  |  | — |
Goodwill from TDL acquisition | — |  |  | — |  |  | 1,143 |  |  | — |  |  | 1,143 |
Goodwill from AJRD acquisition | — |  |  | — |  |  | — |  |  | 2,365 |  |  | 2,365 |
Goodwill decrease from divestitures(1) | (9) |  |  | — |  |  | — |  |  | — |  |  | (9) |
Assets of business held for sale(3) | — |  |  | (534) |  |  | — |  |  | — |  |  | (534) |
Impairment of goodwill | — |  |  | (296) |  |  | — |  |  | — |  |  | (296) |
Currency translation adjustments | 14 |  |  | 12 |  |  | 1 |  |  | — |  |  | 27 |
Balance at December 29, 2023 | $ | 6,110 |  |  | $ | 6,564 |  |  | $ | 4,940 |  |  | $ | 2,365 |  |  | $ | 19,979 |
_______________ **AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the assets, liabilities and operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. (1)During fiscal 2022, we assigned $30 million of goodwill associated with the then pending VIS business divestiture to “Assets of business held for sale ” in our Consolidated Balance Sheet. During fiscal 2023, we assigned an additional $9 million of goodwill to our VIS business and completed the divestiture. We derecognized $39 million of goodwill as part of determining the gain on sale. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. (2)In conjunction with our 2023 business realignment discussed below, we reallocated $327 million of goodwill related to the legacy ADG reporting unit, which is net of fiscal 2022 impairment charges of $80 million, to our SAS segment from our IMS segment. (3)During fiscal 2023, we assigned $534 million of goodwill associated with the pending divestiture of the CAS disposal group to “Assets of business held for sale” in our Consolidated Balance Sheet. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. At December 29, 2023 accumulated goodwill impairment losses totaled $80 million, $1,126 million and $355 million at our SAS, IMS, and CS segments, respectively. At December 30, 2022 accumulated goodwill impairment losses totaled $80 million, $830 million and $355 million at our SAS, IMS, and CS segments, respectively. Reallocation of Goodwill in Business Realignment — Fiscal 2023 Effective in fiscal 2023, we adjusted our reporting to better align our businesses and transferred our ADG business (a reporting unit) from our IMS segment to our SAS segment (also a reporting unit). In connection with the realignment, we reduced our reporting units from nine to eight as the ADG reporting unit and all $327 million of associated goodwill was absorbed by our existing SAS reporting unit given the economic similarities of the two reporting units. Immediately before the realignment, we performed a qualitative impairment assessment over our SAS reporting unit and a quantitative impairment assessment over our ADG reporting unit. Immediately after the realignment, we performed a quantitative impairment assessment over the SAS reporting unit. We prepared estimates of the fair value of our pre-realignment ADG reporting unit and post-realignment SAS reporting unit based on a combination of market-based valuation techniques, utilizing quoted market prices, comparable publicly reported transactions and an income-based valuation technique using projected discounted cash flows. These assessments indicated no impairment existed either before or after the realignment. Goodwill from TDL Acquisition — Fiscal 2023 We recorded $1,143 million of goodwill in our Broadband reporting unit within our CS segment in connection with the acquisition of TDL. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. Goodwill from AJRD Acquisition — Fiscal 2023 We recorded $2,365 million of goodwill in our AR segment, which is also the AR reporting unit in connection with the acquisition of AJRD. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. CAS Disposal Group Pending Divestiture and Impairment — Fiscal 2023 As described in more detail in Note 13: Acquisitions, Divestitures and Asset Sales, on November 27, 2023, we announced that we entered into a definitive agreement to sell our CAS disposal group, which includes both the CTS and Commercial Aviation reporting units. As of November 27, 2023, the fair value less costs to sell the CAS disposal group was $834 million, inclusive of considerations related to noncontrolling interest and accumulated other comprehensive income. In connection with the preparation of our financial statements for the fiscal year ended December 29, 2023, we evaluated the facts and circumstances which impacted the agreed upon selling price of the CAS disposal group and identified interim indicators of impairment within both reporting units subsequent to our annual impairment testing date of October 2, 2023. Specifically, supply chain-related operational challenges which negatively impact cash flows over the short-term forecast period were assessed in combination with our long-term portfolio shaping strategy to dispose of non-core businesses. As a result, we performed quantitative impairment tests for both reporting units as of November 27, 2023, utilizing an income approach aligned to market prices for the two reporting units, as specified in the definitive agreement. As a result of these tests, we determined that the fair value of the CTS reporting unit was above carrying value, while the fair value of the Commercial Avionics reporting unit was below its carrying value, and concluded goodwill related to the Commercial Aviation reporting unit was impaired. Therefore we recorded a non-cash charge for impairment of $296 million associated with the Commercial Aviation reporting unit in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Operations. Goodwill Impairments — Fiscal 2022 During fiscal 2022, we determined that goodwill related to our Broadband, ADG and Electro Optical reporting units was impaired and we recorded non-cash impairment charges of $355 million, $313 million and $134 million, respectively, in the “Impairment of goodwill and other assets” line item in our Condensed Consolidated Statement of Operations. See Note 9: Goodwill in our Fiscal 2022 Form 10-K for further information on our fiscal 2022 goodwill impairments. In conjunction with our 2023 business realignment, certain businesses within our ADG reporting unit were aligned with our Electro Optical and SAS reporting units. As such, fiscal 2022 impairment charges related to Electro Optical and ADG of $367 million and $80 million, are included in our Electro Optical and SAS reporting units, respectively, in our comparative financial results for fiscal 2022. Fiscal 2021 Impairment During fiscal 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 fiscal 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 Consolidated Statement of Operations for fiscal 2021. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information. 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 (i.e., 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 revenues expected from the customer relationships over the estimated lives, including the probability of expected future contract renewals and revenues, less a contributory assets charge, all of which is discounted to present value. Identifiable intangible assets, net, are summarized below:
| December 29, 2023 |  | December 30, 2022
(In millions) | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount (1) |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount (2)
Customer relationships | $ | 8,892 |  |  | $ | 2,733 |  |  | $ | 6,159 |  |  | $ | 6,124 |  |  | $ | 2,189 |  |  | $ | 3,935 |
Developed technologies | 856 |  |  | 413 |  |  | 443 |  |  | 566 |  |  | 366 |  |  | 200 |
Trade names — divisions | 185 |  |  | 50 |  |  | 135 |  |  | 95 |  |  | 53 |  |  | 42 |
Other, including contract backlog | 4 |  |  | 4 |  |  | — |  |  | 3 |  |  | 3 |  |  | — |
Total finite-lived identifiable intangible assets | 9,937 |  |  | 3,200 |  |  | 6,737 |  |  | 6,788 |  |  | 2,611 |  |  | 4,177 |
In-process research and development | — |  |  | — |  |  | — |  |  | 21 |  |  | — |  |  | 21 |
Trade names — corporate | 1,803 |  |  | — |  |  | 1,803 |  |  | 1,803 |  |  | — |  |  | 1,803 |
Total identifiable intangible assets, net | $ | 11,740 |  |  | $ | 3,200 |  |  | $ | 8,540 |  |  | $ | 8,612 |  |  | $ | 2,611 |  |  | $ | 6,001 |
_______________ (1)During fiscal 2023, we assigned $263 million of intangible assets associated with the pending divestiture of the CAS disposal group to "Assets of business held for sale" in our Consolidated Balance Sheet. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding divestitures and businesses held for sale. (2)During fiscal 2022, we assigned $10 million of intangible assets associated with the then pending VIS business divestiture to "Assets of business held for sale" in our Consolidated Balance Sheet. During fiscal 2023, we completed the divestiture of our VIS business. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding divestitures and businesses held for sale. Intangible assets acquired in fiscal 2023 are as follows:
| TDL Acquisition |  | AJRD Acquisition
(In millions) | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Customer relationships | $ | 406 |  |  | $ | 62 |  |  | $ | 344 |  |  | $ | 2,720 |  |  | $ | 102 |  |  | $ | 2,618 |
Developed technologies | 349 |  |  | 21 |  |  | 328 |  |  | — |  |  | — |  |  | — |
Trade names — divisions | — |  |  | — |  |  | — |  |  | 120 |  |  | 3 |  |  | 117 |
The most significant identifiable intangible asset that is separately recognized for our business combinations is customer relationships. For further description of our accounting policies related to intangible assets acquired in the TDL and AJRD acquisitions, see Note 13: Acquisitions, Divestitures and Asset Sales. Amortization expense for identifiable finite-lived intangible assets was $779 million, $605 million and $627 million in fiscal 2023, 2022 and 2021, respectively, and primarily related to assets acquired in connection with business combinations. Future estimated amortization expense for identifiable intangible assets is as follows:
| (In millions)
2024 | $ | 914 |
2025 | 791 |
2026 | 694 |
2027 | 585 |
2028 | 513 |
Thereafter | 3,240 |
Total | $ | 6,737 |
In-process R&D Impairment - Fiscal 2023 During fiscal 2023, we closed a facility, which triggered an evaluation of the in-process R&D related to the operations of the closed facility for impairment. As a result we recorded a $21 million non-cash charge for the impairment of in-process R&D intangible assets which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Operations. Fiscal 2021 Impairment During the quarter ended July 2, 2021, we adjusted our Aviation Systems segment reporting to better align our businesses and separated the CTS business from our CAS reporting unit, creating a new reporting unit within the CAS sector of our Aviation Systems segment. Immediately before and after our goodwill assignments, we completed an assessment of any potential goodwill impairment under our former and new reporting unit structure and determined that no impairment existed. To test for potential impairment of the long-lived assets, including identifiable intangible assets and property, plant and equipment, related to CTS, we compared the estimated future cash flows (on an undiscounted basis) to be generated from the use and hypothetical eventual disposition of the asset group to its carrying value and, as a result, we determined the carrying value of the CTS asset group was not recoverable. Next, we prepared an estimate of the fair value of CTS based on a combination of market-based valuation techniques, utilizing quoted market prices, comparable publicly reported transactions and projected discounted cash flows. We compared the fair value of CTS to our carrying value and recorded a $145 million non-cash charge for the impairment of CTS long-lived assets, including $63 million for impairment of identifiable intangible assets, which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Operations for fiscal 2021.

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