Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

Note 3—Goodwill and Intangible Assets

Goodwill and intangible assets, net on our consolidated balance sheets consisted of the following:


	December 31,
	2025		2024
	(Dollars in millions)
Goodwill, less accumulated impairment losses of $4,417 and $2,405(1)	$	3,638	6,955
Intangible assets, less accumulated amortization of $1,642 and $1,841	$	111	84

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(1) As of December 31, 2025, this amount excluded goodwill classified as held for sale of $1.1 billion; see Note 2—Divestiture.

As of December 31, 2025 and 2024, the gross carrying amount of goodwill and other intangible assets was $5.4 billion and $8.9 billion, respectively, excluding the amounts classified as held for sale.

Goodwill

Substantially all of our goodwill was derived from Lumen's acquisition of us where the purchase price exceeded the fair value of the net assets acquired.

We are required to assess our goodwill for impairment annually, or under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our assessment determines the carrying value of equity of our reporting unit exceeds its fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assess goodwill at our reporting unit. In reviewing the criteria for reporting units, we have determined that we are one reporting unit.

Goodwill Impairment Analysis

2025 Goodwill Impairment Analysis

Fourth Quarter Analysis

At October 31, 2025, we estimated the fair value by considering both a market approach and a discounted cash flow method. The market approach method includes the use of comparable multiples of publicly traded companies whose services are comparable to ours. Applying this approach, we utilized company comparisons and analyst reports within the telecommunications industry which supported a range of fair values derived from annualized revenue and earnings before interest, tax, depreciation and amortization ("EBITDA") multiples between 1.6x and 3.1x and 5.1x and 7.9x, respectively. We selected a revenue multiple and an EBITDA multiple in line with these comparable market multiples. The discounted cash flow method is based on the present value of projected cash flows and a terminal value equal to the present value of all normalized cash flows after the projection period. Based on our assessment performed, the estimated fair value of our equity was less than our carrying value of equity at October 31, 2025. As a result, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $2.0 billion on October 31, 2025.

Second Quarter Analysis

During the second quarter of 2025, we determined that the classification of the Lumen Mass Markets Fiber-to-the-Home business in the Territory as held for sale, as described in Note 2—Divestiture, was considered an event or change in circumstance which required an assessment of our goodwill for impairment as of April 30, 2025. We performed a pre-classification goodwill impairment test using the market approach to test for impairment prior to the classification of these assets as held for sale and to determine the April 30, 2025 fair values to be utilized for goodwill impairment testing. Applying this approach, we utilized company comparisons and analyst reports within the telecommunications industry which supported a range of fair values derived from annualized revenue and EBITDA multiples between 1.8x and 3.1x and 5.8x and 8.0x, respectively.

As of April 30, 2025, based on our assessments performed, the estimated fair value of our equity exceeded our carrying value of equity by approximately 15% and 14% for the pre-classification and post-classification, respectively. We concluded that we had no impairment as of our April 30, 2025 assessment date.

2024 Goodwill Impairment Analysis

As of October 31, 2024, we performed our annual impairment analysis of the goodwill of our one above-mentioned reporting unit by using a qualitative assessment to determine whether it was more likely than not that the fair value of the reporting unit was less than its carrying value. Factors considered in the qualitative assessment included, among other things, macroeconomic conditions, industry and market conditions, financial performance of the reporting unit and other relevant reporting unit considerations. We concluded the estimated fair value of our reporting unit was greater than our carrying value of equity as of our testing date. Therefore, we concluded no impairment existed as of our annual assessment date in the fourth quarter of 2024.

2023 Goodwill Impairment Analyses

As of October 31, 2023, we performed our annual impairment analysis of our reporting unit. Given the continued decline in Lumen's share price, we determined our quantitative impairment analysis would estimate the fair value of our reporting unit using only the market approach. Applying this approach, we utilized company comparisons and analyst reports within the telecommunications industry which supported a range of fair values derived from annualized revenue and earnings before interest, tax, depreciation and amortization ("EBITDA") multiples between 1.5x and 3.5x and 4.8x and 8.4x, respectively. We selected a revenue multiple within and an EBITDA multiple below these comparable market multiples. Based on our assessment performed, we concluded that the estimated fair value of our reporting unit was less than their carrying value of equity at October 31, 2023. As a result, we recorded a non-cash, non-tax-deductible goodwill impairment charge of $2.4 billion on October 31, 2023.

During the second quarter of 2023, the Company determined circumstances existed indicating it was more likely than not that the carrying value of our reporting unit exceeded its fair value. Given the continued erosion in Lumen's market capitalization, we determined our quantitative impairment analysis would estimate the fair value of our reporting unit using only the market approach. Applying this approach, we utilized company comparisons and analyst reports within the telecommunications industry which supported a range of fair values derived from annualized revenue and EBITDA multiples between 1.5x and 4.3x and 4.6x and 10.5x, respectively. We selected a revenue multiple within and an EBITDA multiple below these comparable market multiples. Based on our assessment performed, the estimated fair value of our equity exceeded our carrying value of equity by approximately 11% at June 30, 2023. We concluded that goodwill was not impaired as of June 30, 2023.

The market approach that we used incorporated estimates and assumptions related to the forecasted results for the remainder of the year, including revenues, expenses, and the achievement of certain strategic initiatives. In developing the market multiples, we considered observed trends of our industry participants. Our assessment included many factors that required significant judgment. Alternative interpretations of these factors could have resulted in different conclusions.

The following table shows the rollforward of goodwill from December 31, 2023 through December 31, 2025:


	(Dollars in millions)
As of December 31, 2023(1)	$	6,955
As of December 31, 2024(1)	6,955
Impairment	(2,012)
Reclassified as held for sale(2)	(1,305)
As of December 31, 2025(1)	$	3,638

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(1)Goodwill as of December 31, 2025, December 31, 2024 and December 31, 2023 is net of accumulated impairment losses of $4.4 billion, $2.4 billion and $2.4 billion, respectively.

(2)Reflects initial goodwill reclassified as held for sale on May 21, 2025, related to our recently completed divestiture. See Note 2—Divestiture.

Intangible Assets

We annually review the estimated lives and methods used to amortize our other intangible assets. The actual amounts of amortization expense may differ materially from our estimates, depending on the results of our annual reviews. As of December 31, 2025, the weighted average remaining useful life was four years for capitalized software, which is our primary intangible asset.

Amortization Expense

Total amortization expense for finite-lived intangible assets for the years ended December 31, 2025, 2024 and 2023 was $33 million, $41 million and $67 million, respectively.

We estimate that future total amortization expense for finite-lived intangible assets will be as follows:


	(Dollars in millions)
2026	$	20
2027	17
2028	14
2029	11
2030	9
2031 and thereafter	40
Total finite-lived intangible assets future amortization expense	$	111