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

6 Months Ended

Jun. 30, 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 tables below:

	Three Months Ended June 30,
	2022		2021
	(Dollars in millions)
Latin American business pre-tax net income	$	95	47
ILEC business pre-tax net income	168		149
Total disposal groups pre-tax net income	$	263	196

	Six Months Ended June 30,
	2022		2021
	(Dollars in millions)
Latin American business pre-tax net income	$	178	75
ILEC business pre-tax net income	412		294
Total disposal groups pre-tax net income	$	590	369

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

	June 30, 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	$	48	—	48	39	1	40
Accounts receivable, less allowance of $2, $17, $19, $3, $21 and $24	94		197	291	83	227	310
Other current assets	79		42	121	81	45	126
Property, plant and equipment, net accumulated depreciation of $431, $8,251, $8,682, $434, $8,303 and $8,737	1,714		3,582	5,296	1,591	3,491	5,082
Goodwill(1)	246		2,581	2,827	239	2,615	2,854
Other intangible assets, net	130		158	288	126	158	284
Other non-current assets	80		45	125	75	38	113
Total assets held for sale	$	2,391	6,605	8,996	2,234	6,575	8,809
Liabilities held for sale
Accounts payable	$	110	56	166	101	64	165
Salaries and benefits	21		21	42	23	25	48
Income and other taxes	37		29	66	27	24	51
Interest	—		10	10	—	10	10
Current portion of deferred revenue	27		81	108	26	90	116
Other current liabilities	7		26	33	7	35	42
Long-term debt, net of discounts(2)	—		1,395	1,395	—	1,377	1,377
Deferred income taxes, net	149		—	149	129	—	129
Pension and other post-retirement benefits(3)	3		56	59	2	56	58
Other non-current liabilities	125		94	219	120	141	261
Total liabilities held for sale	$	479	1,768	2,247	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 June 30, 2022 and December 31, 2021 includes (i) $1.4 billion of 7.995% Embarq senior notes maturing in 2036, (ii) $115 million and $117 million of related unamortized discounts, respectively, and (iii) $73 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 both June 30, 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.