Lockheed Martin 2015 Annual Report Download - page 91

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Subsequent to the program realignment completed in the fourth quarter of 2015, the IS&GS business segment consists
solely of government IT and technical services businesses. The transaction is expected to close in the third or fourth quarter
of 2016. Until closing, IS&GS will operate as a business segment and financial results for the IS&GS business segment will
be reported in our continuing operations.
Prior Year Divestiture
Discontinued operations for 2013 included a benefit of $31 million resulting from the resolution of certain tax matters
related to a business previously sold prior to 2013.
Note 4 – Goodwill and Acquired Intangibles
Changes in the carrying amount of goodwill by segment were as follows (in millions):
Aeronautics IS&GS MFC MST
Space
Systems Total
Balance at December 31, 2013 (a) $ 167 $2,649 $2,185 $4,049 $1,298 $10,348
Acquisitions 4 378 — — 292 674
Impairments (b) — (119) — — — (119)
Other — (10) (4) (27) — (41)
Balance at December 31, 2014 171 2,898 2,181 4,022 1,590 10,862
Sikorsky acquisition — — — 2,764 — 2,764
Impairments ———— — —
Other — (17) 17 (48) (2) (50)
Balance at December 31, 2015 $ 171 $2,881 $2,198 $6,738 $1,588 $13,576
(a) Includes reclassifications of goodwill among our business segments as a result of our program realignment, which occurred during the
fourth quarter of 2015 (Note 1).
(b) The impairment in 2014 relates to our Technical Services reporting unit within our IS&GS business segment (Note 1).
The gross carrying amounts and accumulated amortization of our acquired intangible assets consisted of the following
(in millions):
2015 2014
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Finite-Lived:
Customer programs $ 3,127 $ (38) $ 3,089 $— $— $—
Customer relationships 309 (166) 143 309 (123) 186
Technology 73 (37) 36 73 (21) 52
Trademarks 27 (14) 13 27 (3) 24
Other 71 (39) 32 71 (27) 44
Indefinite Lived:
Trademarks 834 — 834 18 — 18
Total acquired intangibles $ 4,441 $ (294) $ 4,147 $498 $(174) $ 324
Acquired finite-lived intangible assets are amortized to expense over the following estimated useful lives: customer
programs, from nine to 20 years; customer relationships, from four to 10 years; technology, from five to seven years;
trademarks, from two to five years; and other intangibles, from three to 10 years.
Amortization expense for acquired finite-lived intangible assets was $116 million, $49 million and $48 million in 2015,
2014 and 2013. Estimated future amortization expense is as follows: $292 million in 2016; $274 million in 2017;
$260 million in 2018; $254 million in 2019; $248 million in 2020 and $710 million thereafter. Our estimates of amortization
expense for finite-lived intangible assets are subject to change, pending the final determination of the fair value of intangible
assets acquired in connection with the Sikorsky acquisition (See Note 3).
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