GOODWILL AND INTANGIBLE ASSETS

NOTE E: GOODWILL AND INTANGIBLE ASSETS

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


(In millions)	SMS		CSD		MSL		Total

Balance as of January 2, 2026(1)	$	9,005	$	7,712	$	3,293	$	20,010

Currency translation adjustments	(5)		(6)		—		(11)
Balance as of April 3, 2026	$	9,000	$	7,706	$	3,293	$	19,999

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(1)Balances reflect impact of segment reorganization, as discussed in Note A: Basis of Presentation in these Notes.

As of both April 3, 2026 and January 2, 2026, accumulated goodwill impairment losses were $120 million, $431 million, and $337 million in our SMS, CSD, and MSL segments, respectively.

Reallocation of Goodwill in Segment Reorganization. As discussed in Note A: Basis of Presentation in these Notes, effective in fiscal 2026, we streamlined our business segments from four segments to three segments, more closely aligning common capabilities and business models. As a result of the segment reorganization, we realigned our goodwill reporting units from seven to five reporting units, which are our operating segments or one level below the operating segment. Following the realignment, our reporting units are organized as follows: SMS in our SMS segment, Non-Spectrum and Spectrum in our CSD segment, Advanced Effects (“AE”) and Propulsion Systems (“PS”) in our MSL segment.

The revised reporting unit structure was established through the creation of the new AE reporting unit and reassignment of the three former Integrated Mission Systems (“IMS”) segment reporting units, Targeting & Sensor Systems and Defense Electronics (“TSS+DE”), Intelligence, Surveillance and Reconnaissance (“ISR”) and Maritime. The AE reporting unit was formed by combining two businesses from the former Space & Airborne Systems (“SAS”) reporting unit and two businesses from the former TSS+DE reporting unit. The remaining businesses from the former TSS+DE reporting unit were aggregated into the former Non-Broadband reporting unit, which was renamed the Non-Spectrum reporting unit; and two businesses from the former SAS reporting unit were aggregated with the former Broadband reporting unit, which was renamed the Spectrum reporting unit. The businesses from the ISR and Maritime reporting units were aggregated with the other businesses in the SMS reporting unit, formerly the SAS reporting unit.

In connection with the realignments, goodwill was allocated to the businesses that moved between reporting units on a relative fair value basis utilizing a combination of income and market approaches. We performed quantitative impairment assessments under our former and new reporting unit structure to assess the impact before and after realignments. These assessments indicated no impairments existed either before or after the realignments.

Intangible assets, net are summarized below:


	April 3, 2026						January 2, 2026
(In millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount

Customer relationships(1)	$	8,325	$	(4,185)	$	4,140	$	8,329	$	(4,031)	$	4,298
Developed technologies(1)	848		(557)		291		849		(544)		305
Trade names(1)	174		(77)		97		175		(75)		100
Other	4		(4)		—		6		(3)		3
Total finite-lived intangible assets	9,351		(4,823)		4,528		9,359		(4,653)		4,706
Trade name(1)	1,803		—		1,803		1,803		—		1,803
Intangible assets, net	$	11,154	$	(4,823)	$	6,331	$	11,162	$	(4,653)	$	6,509

(1)Includes acquisition-related intangibles that benefit the entire Company. As such, these assets and associated amortization are reported at Corporate.

Amortization expense for intangible assets was $174 million and $194 million for first quarter 2026 and 2025, respectively. Future estimated amortization expense for intangible assets is as follows:


(In millions)	Remaining Fiscal 2026		Fiscal 2027		Fiscal 2028		Fiscal 2029		Fiscal 2030		Thereafter		Total

Amortization expense	$	458	$	531	$	459	$	403	$	386	$	2,291	$	4,528