Goodwill and Intangible Assets
The changes in the carrying amount of goodwill are as follows:
| | | | | | | | | | | | | | | | | |
| Diversified Industrial Segment | | Aerospace Systems Segment | | Total |
| Balance June 30, 2023 | $ | 7,683 | | | $ | 2,946 | | | $ | 10,629 | |
| Acquisitions | 1 | | | 10 | | | 11 | |
| Divestitures | (25) | | | — | | | (25) | |
| | | | | |
| | | | | |
| Foreign currency translation | (52) | | | (56) | | | (108) | |
| Balance June 30, 2024 | $ | 7,607 | | | $ | 2,900 | | | $ | 10,507 | |
| | | | | |
| Divestitures | (90) | | | — | | | (90) | |
| | | | | |
| | | | | |
| Foreign currency translation | 211 | | | 66 | | | 277 | |
| Balance June 30, 2025 | $ | 7,728 | | | $ | 2,966 | | | $ | 10,694 | |
Acquisitions represent goodwill resulting from the purchase price allocation for the acquisition of Meggitt during the measurement period. Refer to Note 3 for further discussion.
Divestitures represent goodwill associated with the sale of businesses during 2025 and 2024.
Goodwill is tested for impairment at the reporting unit level annually and between annual tests whenever events or circumstances indicate that the carrying value of a reporting unit may exceed its fair value. Our annual impairment tests performed in 2025, 2024 and 2023 resulted in no impairment loss being recognized.
Intangible assets are amortized on a straight-line method over their legal or estimated useful lives. The gross carrying value and accumulated amortization for each major category of intangible asset at June 30 are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| 2025 | | 2024 |
| Gross Carrying Amount | | Accumulated Amortization | | Gross Carrying Amount | | Accumulated Amortization |
| Patents and technology | $ | 2,134 | | | $ | 556 | | | $ | 2,117 | | | $ | 452 | |
| Trade names | 1,037 | | | 499 | | | 1,042 | | | 441 | |
| Customer relationships and other | 8,194 | | | 2,936 | | | 8,044 | | | 2,494 | |
| Total | $ | 11,365 | | | $ | 3,991 | | | $ | 11,203 | | | $ | 3,387 | |
Total intangible asset amortization expense in 2025, 2024 and 2023 was $553 million, $578 million and $501 million, respectively. The estimated intangible asset amortization expense for the five years ending June 30, 2026 through 2030 is $550 million, $547 million, $539 million, $518 million and $489 million, respectively.
Intangible assets are evaluated for impairment whenever events or circumstances indicate that the undiscounted net cash flows to be generated by their use over their expected useful lives and eventual disposition may be less than their net carrying value. No material intangible asset impairments occurred in 2025, 2024 or 2023.
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.