GOODWILL

3 Months Ended

Apr. 01, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

NOTE H — 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 & Airborne Systems		Communication Systems		Aviation Systems(1)		Total
Balance at December 31, 2021 - As Reported	$	6,485	$	5,202	$	4,153	$	2,349	$	18,189
Transfer of goodwill in segment reorganization(1)	1,702		647		—		(2,349)		—
Balance at December 31, 2021 - After Reallocation	8,187		5,849		4,153		—		18,189
Currency translation adjustments	6		(2)		1		—		5
Balance at April 1, 2022	$	8,193	$	5,847	$	4,154	$	—	$	18,194

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(1)As a result of our new organizational structure, effective January 1, 2022, streamlining our operations from four business segments to three business segments, we transferred goodwill previously held by our eliminated Aviation Systems segment to our remaining business segments as of January 1, 2021, the earliest period presented in these Notes. See additional information below and “Segment Reorganization” in. Note A — Significant Accounting Policies and Recent Accounting Standards in these Notes.

Fair Value of Businesses

Segment reorganization: We implemented a new organizational structure effective January 1, 2022, resulting in changes to our operating segments, which are also our reportable segments and are referred to as our business segments. The new structure streamlined our business segments from four business segments to three business segments. As a result of the segment reorganization, we realigned our reporting units from 11 to 9 reporting units, which are our business segments or one level below the business segment. For our realigned reporting units, 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.

Combat Propulsion Systems and related businesses (“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 other non-reportable business 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 1: “Significant Accounting Policies” and Note 3: “Business Divestitures and Asset Sales” in the Notes to Consolidated Financial Statement in our Fiscal 2021 Form 10-K for additional information regarding the fair value hierarchy and our business divestitures, respectively.