Goodwill, Customer Relationships and Other Intangible Assets

6 Months Ended

Jun. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill, Customer Relationships and Other Intangible Assets

Goodwill, Customer Relationships and Other Intangible Assets

Goodwill, customer relationships and other intangible assets consisted of the following:

	June 30, 2022		December 31, 2021
	(Dollars in millions)
Goodwill	$	6,627	6,666
Customer relationships, less accumulated amortization of $3,096 and $2,779	$	4,977	5,325
Capitalized software, less accumulated amortization of $368 and $349	401		378
Trade names, less accumulated amortization of $122 and $109	9		22
Total other intangible assets, net	$	5,387	5,725

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

We 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.

The following table shows the rollforward of goodwill from December 31, 2021 through June 30, 2022:

	(Dollars in millions)
As of December 31, 2021 (1)	$	6,666
Effect of foreign currency exchange rate changes	(39)
As of June 30, 2022 (1)	$	6,627

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(1)Goodwill at June 30, 2022 and December 31, 2021 is net of accumulated impairment loss of $3.6 billion.

Total amortization expense for finite-lived intangible assets for the three months ended June 30, 2022 and 2021 totaled $186 million and $216 million, respectively, and for the six months ended June 30, 2022 and 2021, totaled $378 million and $427 million, respectively. As of June 30, 2022, the gross carrying amount of goodwill, customer relationships, capitalized software, indefinite-life and other intangible assets was $15.6 billion.

We estimate that total amortization expense for intangible assets for the years ending December 31, 2022 through 2026 will be as provided in the table below. As a result of reclassifying our Latin American business as being held for sale on our June 30, 2022 consolidated balance sheet, the amounts presented below do not include the future amortization of the intangible assets for the business to be divested. See Note 2—Recently Completed Divestiture of the Latin American Business for more information.

	(Dollars in millions)
2022 (remaining six months)	$	367
2023	716
2024	712
2025	687
2026	643