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

12 Months Ended

Dec. 31, 2021

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 and reported as follows in the tables below:

	Years Ended December 31,
	2021		2020	2019
	(Dollars in millions)
Latin American business pre-tax net income	$	214	160	30
ILEC business pre-tax net income	851		649	655
Total disposal groups pre-tax net income	$	1,065	809	685

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

	December 31, 2021
	Latin American Business		ILEC Business	Total
	(Dollars in millions)
Assets held for sale
Cash and cash equivalents	$	39	1	40
Accounts receivable, less allowance of $3, $21 and $24	83		227	310
Other current assets	81		45	126
Property, plant and equipment, net accumulated depreciation of $434, $8,303 and $8,737	1,591		3,491	5,082
Goodwill (1)	239		2,615	2,854
Other intangible assets, net	126		158	284
Other non-current assets	75		38	113
Total assets held for sale	$	2,234	6,575	8,809
Liabilities held for sale
Accounts payable	$	101	64	165
Salaries and benefits	23		25	48
Income and other taxes	27		24	51
Interest	—		10	10
Current portion of deferred revenue	26		90	116
Other current liabilities	7		35	42
Long-term debt, net of discounts (2)	—		1,377	1,377
Deferred income taxes, net	129		—	129
Pension and other post-retirement benefits (3)	2		56	58
Other non-current liabilities	120		141	261
Total liabilities held for sale	$	435	1,822	2,257

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(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, includes $1.4 billion of Embarq Senior notes, $117 million of related unamortized discounts and $57 million of long-term finance lease obligations.

(3)Excludes pension obligation of approximately $2.5 billion for the ILEC business as of December 31, 2021, which will be transferred to the purchaser of the ILEC business upon closing. As of December 31, 2021, approximately $2.2 billion, or 88%, of this pension obligation is expected to be funded through the transfer of Lumen pension plan assets to the purchaser. The remaining portion of the obligation is expected to be separately funded with cash paid by Lumen at the time of closing. See Note 11—Employee Benefits for additional information.