Planned Divestiture of the Latin American and ILEC Businesses (Tables)

3 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Components of Pre-Tax Income and Held for Sale Assets and Liabilities

The pre-tax net income of the disposal groups is estimated to be as follows in the table below:

	Three Months Ended March 31,
	2022		2021
	(Dollars in millions)
Latin American business pre-tax net income	$	83	28
ILEC business pre-tax net income	255		149
Total disposal groups pre-tax net income	$	338	177

The principal components of the held for sale assets and liabilities are as follows:

	March 31, 2022				December 31, 2021
	Latin American Business		ILEC Business	Total	Latin American Business	ILEC Business	Total
	(Dollars in millions)
Assets held for sale
Cash and cash equivalents	$	58	1	59	39	1	40
Accounts receivable, less allowance of $3, $18, $21, $3, $21 and $24	93		191	284	83	227	310
Other current assets	83		40	123	81	45	126
Property, plant and equipment, net accumulated depreciation of $456, $8,379, $8,835, $434, $8,303 and $8,737	1,704		3,565	5,269	1,591	3,491	5,082
Goodwill(1)	259		2,615	2,874	239	2,615	2,854
Other intangible assets, net	138		158	296	126	158	284
Other non-current assets	83		37	120	75	38	113
Total assets held for sale	$	2,418	6,607	9,025	2,234	6,575	8,809
Liabilities held for sale
Accounts payable	$	90	50	140	101	64	165
Salaries and benefits	25		25	50	23	25	48
Income and other taxes	34		30	64	27	24	51
Interest	—		38	38	—	10	10
Current portion of deferred revenue	26		82	108	26	90	116
Other current liabilities	7		23	30	7	35	42
Long-term debt, net of discounts(2)	—		1,387	1,387	—	1,377	1,377
Deferred income taxes, net	148		—	148	129	—	129
Pension and other post-retirement benefits(3)	2		56	58	2	56	58
Other non-current liabilities	132		95	227	120	141	261
Total liabilities held for sale	$	464	1,786	2,250	435	1,822	2,257

______________________________________________________________________ 

(1)The assignment of goodwill was based on the relative fair values of the applicable reporting units prior to being reclassified as held for sale.

(2)Long-term debt, net of discounts, as of March 31, 2022 and December 31, 2021 includes (i) $1.4 billion for both periods of 7.995% Embarq senior notes maturing in 2036, (ii) $116 million and $117 million of related unamortized discounts, respectively, and (iii) $66 million and $57 million of long-term finance lease obligations, respectively.

(3)Excludes pension obligation of approximately $2.5 billion for the ILEC business as of March 31, 2022 and December 31, 2021, which will be transferred to the purchaser of the ILEC business upon closing. As of January 1, 2022, a new pension plan (the "Lumen Pension Plan") was spun off in anticipation of this transfer. Along with the transfer of the $2.5 billion pension benefit obligation, $2.2 billion of assets were allocated to the new plan. The remaining portion of the obligation is expected to be separately funded with cash paid by Lumen at the time of closing. See Note 8—Employee Benefits for additional information.