Goodwill, Customer Relationships and Other Intangible Asset

3 Months Ended

Jun. 30, 2011

Goodwill, Customer Relationships and Other Intangible Asset

Goodwill, Customer Relationships and Other Intangible Assets

(3) Goodwill, Customer Relationships and Other Intangible Assets

Goodwill, customer relationships and other intangible assets as of June 30, 2011 and December 31, 2010 consisted of the following:

	Successor		Predecessor
	June 30, 2011		December 31, 2010
	(Dollars in millions)
Goodwill	$	10,005		—
Customer relationships, less accumulated amortization of $260 and $2	$	7,365		—
Other intangible assets subject to amortization
Capitalized software, less accumulated amortization of $117 and $1,741		1,631		888
Tradename and patent, less accumulated amortization of $43 and $5		323		50
Other intangible assets, net	$	1,954		938

At June 30, 2011, the gross carrying amounts of goodwill, customer relationships and other intangible assets were $19.744 billion which were recorded at fair value on April 1, 2011 as a result of CenturyLink's acquisition of us. We expect to complete the final determination of these estimates and related estimated lives for amortizable intangible assets no later than the first quarter of 2012.

Total amortization expense for intangible assets was $420 million for the successor three months ended June 30, 2011. Total amortization expense for intangible assets for the predecessor three months ended March 31, 2011 was $58 million. We amortize our customer relationships over an estimated life of 10 years, using the sum-of-the-years-digits and straight-line methods, depending on the classification of the customer. We amortize our capitalized software using the straight-line method over estimated lives ranging up to seven years and amortize our other intangible assets predominantly using the sum-of-the-years digits method over an estimated life of four years. We estimate that total successor amortization expense for the six months ending December 31, 2011 and the successor years ending December 31, 2012 through 2015 will be as follows (dollars in millions):

Six months ending December 31, 2011	$	825
Year ending December 31,
2012	$	1,475
2013	$	1,331
2014	$	1,185
2015	$	1,017

We periodically review the estimated lives and methods used to amortize our intangible assets. The actual amounts of amortization expense may differ materially from our estimates, depending on the results of our periodic reviews and our final determinations of value related to our intangible assets.