GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Jan. 03, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 6: GOODWILL AND INTANGIBLE ASSETS

Goodwill

Changes in the carrying amount of goodwill, by business segment, were as follows:


(In millions)	SAS	IMS	CS	AR	Total

Balance at December 30, 2022	$5,778	$7,709	$3,796	**	$17,283
Reallocation of goodwill in business realignment	327	(327)	—	—	—
Goodwill increase from acquisitions(1)	—	—	1,143	2,365	3,508
Goodwill decrease from divestitures	(9)	—	—	—	(9)
Assets of business held for sale	—	(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
Goodwill from AJRD acquisition	—	—	—	537	537
Goodwill decrease from divestitures(2)	(79)	—	—	(50)	(129)
Impairment of goodwill	(14)	—	—	—	(14)
Currency translation adjustments	(18)	(28)	(2)	—	(48)
Balance at January 3, 2025	$5,999	$6,536	$4,938	$2,852	$20,325

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**Our AR segment, which is also the AR reporting unit, was established in connection with the AJRD acquisition and consists of assets,

liabilities and operations assumed. As such, there is no comparable prior year information. See Note 13: Acquisitions and Divestitures in

these Notes for further information.

(1)CS: Goodwill recognized in connection with the TDL acquisition is included in our Broadband reporting unit within our CS segment. AR:

Goodwill recognized in connection with the AJRD acquisition is included within the AR Reporting unit, which is also our AR segment.

(2)SAS: Goodwill (net of impairment) derecognized in connection with the Antenna disposal group divestiture. See discussion under “Goodwill

Impairments" below. AR: Goodwill derecognized in connection with the AOT disposal group divestiture. See Note 13: Acquisitions and

Divestitures in these Notes for further information.

At January 3, 2025 and December 29, 2023, accumulated goodwill impairment losses totaled $80 million,

$1,126 million and $355 million in our SAS, IMS, and CS segments, respectively. There are no accumulated

impairment losses in our AR segment.

Reallocation of Goodwill in Business Realignments. To better align our businesses, we adjusted our reporting

within our business segments and goodwill reporting units as follows:

Fiscal 2024. We realigned our Electro Optical and Maritime sectors in our IMS segment, which are also reporting

units, splitting Electro Optical into two sectors, Global Optical Systems and Defense Electronics, and moving one

Electro Optical business to the Maritime sector. Global Optical Systems and Defense Electronics represent one

reporting unit. Immediately before and after the realignment, we performed a quantitative impairment assessment

under our former and new reporting unit structure. These assessments indicated no impairment existed either

before or after the realignment.

Fiscal 2023. We transferred our Agile Development Group (“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. These assessments indicated no impairment

existed either before or after the realignment.

Goodwill Impairments. We assess goodwill for impairment annually or under certain circumstances more

frequently, such as when events or circumstances indicate there may be impairment.

Fiscal 2024. As described in more detail in Note 13: Acquisitions and Divestitures in these Notes, during the

quarter ended June 28, 2024, we completed the divestiture of Antenna disposal group. As the Antenna disposal

group represents the disposal of a portion of the SAS reporting unit, which is also the SAS segment, we assigned $93

million of goodwill to the Antenna disposal group on a relative fair value basis. In connection with the preparation of

our financial statements for the quarter and two quarters ended June 28, 2024, we performed a quantitative

impairment assessment on goodwill assigned to the Antenna disposal group and a qualitative impairment

assessment on the goodwill assigned to the retained businesses of the reporting unit. As a result of these tests, we

determined that the fair value of the Antenna disposal group was below its carrying value and accordingly recorded a

non-cash charge for impairment of $14 million included in the “Impairment of goodwill and other assets” line item

in our Consolidated Statement of Operations.

Fiscal 2023. As described in more detail in Note 13: Acquisitions and Divestitures in these Notes, during the

quarter ended December 29, 2023, 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 date of the

agreement, 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 fiscal 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.

The carrying amounts of the CAS disposal group assets (including $534 million of goodwill) and liabilities were

classified as held for sale in our Consolidated Balance Sheet at December 29, 2023.

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 Consolidated Statement of

Operations. See Note 9: Goodwill in our Fiscal 2022 Form 10-K for further information on our fiscal 2022 goodwill

impairments.

Intangible Assets

Intangible assets, net, are summarized below:


	January 3, 2025			December 29, 2023
(In millions)	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount

Customer relationships	$8,817	$(3,470)	$5,347	$8,892	$(2,733)	$6,159
Developed technologies	849	(482)	367	856	(413)	443
Trade names	185	(64)	121	185	(50)	135
Other, including contract backlog	3	(2)	1	4	(4)	—
Total finite-lived intangible assets	9,854	(4,018)	5,836	9,937	(3,200)	6,737
Trade name — indefinite-lived	1,803	—	1,803	1,803	—	1,803
Total intangible assets, net	$11,657	$(4,018)	$7,639	$11,740	$(3,200)	$8,540

Amortization expense for intangible assets was $853 million, $779 million and $605 million in fiscal 2024, 2023

and 2022, respectively.

Future estimated amortization expense for intangible assets is as follows:


	(In millions)

2025	$768
2026	671
2027	562
2028	489
2029	433
Thereafter	2,913
Total	$5,836

In-process R&D Impairment. 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 for fiscal 2023.