XML 37 R14.htm IDEA: XBRL DOCUMENT v3.22.0.1
Wireless Licenses, Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Wireless Licenses, Goodwill and Other Intangible Assets
Note 4. Wireless Licenses, Goodwill and Other Intangible Assets
Wireless Licenses
The carrying amounts of Wireless licenses, as well as wireless spectrum for which licenses had not yet been received, are as follows:
(dollars in millions)
At December 31,20212020
Wireless licenses$147,619 $96,097 
Deposits for wireless licenses— 2,772 

At December 31, 2021 and 2020, approximately $54.9 billion and $6.4 billion, respectively, of wireless licenses were under development for commercial service for which we were capitalizing interest costs. We recorded approximately $1.6 billion and $242 million of capitalized interest on wireless licenses for the years ended December 31, 2021 and 2020, respectively.

In July 2021, we received the wireless licenses won in connection with the FCC's auction for C-Band wireless spectrum, Auction 107. As a result, these wireless licenses, including capitalized interest, based on qualifying activities that occurred, were reclassified from Deposits for wireless licenses to Wireless licenses in our consolidated balance sheet. See Note 3 for additional information regarding spectrum license transactions.

In the first quarter of 2020, we reclassified substantially all of our 39 GHz wireless licenses, including capitalized interest, with a carrying value of $2.8 billion to assets held for sale in connection with the FCC's incentive auction, Auction 103. As a result, these wireless licenses were adjusted down to their fair value of $1.6 billion resulting in a pre-tax loss of $1.2 billion ($914 million after-tax) in 2020. The new reconfigured licenses were received in the second quarter 2020 and had a value of $3.4 billion. See Note 3 for additional information regarding spectrum license transactions.

During 2021 and 2020, we renewed various wireless licenses in accordance with FCC regulations with an average renewal period of 11 years and 10 years, respectively. See Note 1 for additional information.

As discussed in Note 1, we test our wireless licenses for potential impairment annually or more frequently if impairment indicators are present. In 2021, our quantitative impairment test consisted of comparing the estimated fair value of our aggregate wireless licenses estimated using the Greenfield approach to the aggregated carrying amount of the licenses as of the test date. In 2020 and 2019, we performed a qualitative assessment to determine whether it was more likely than not that the fair value of our wireless licenses was less than the carrying amount. Our annual assessments in 2021, 2020 and 2019 indicated that the fair value of our wireless licenses exceeded the carrying value and, therefore, did not result in impairment.

Our strategy requires significant capital investments primarily to acquire wireless spectrum, put the spectrum into service, provide additional capacity for growth in our networks, invest in the fiber that supports our businesses, evolve and maintain our networks and develop and maintain significant advanced information technology systems and data system capabilities.
Goodwill
Changes in the carrying amount of Goodwill are as follows:
(dollars in millions)
ConsumerBusinessOtherTotal
Balance at January 1, 2020 (1)
$17,104 $7,269 $16 $24,389 
Acquisitions(2)
118 254 — 372 
Reclassifications, adjustments and other— 12 — 12 
Balance at December 31, 2020 (1)
17,222 7,535 16 24,773 
Acquisitions (3)
3,818 — 34 3,852 
Reclassifications, adjustments and other2 (20)(4)(22)
Balance at December 31, 2021$21,042 $7,515 $46 $28,603 
(1) Goodwill is net of accumulated impairment charges of $4.8 billion, related to our historical Media reporting unit, which included Verizon Media. On September 1, 2021, we completed the sale of Verizon Media. See Note 3 for additional information.
(2) Changes in goodwill due to acquisitions is related to BlueJeans and an other insignificant transaction. See Note 3 for additional information.
(3) Changes in goodwill due to acquisitions is related to Tracfone, Bluegrass and other insignificant transactions. See Note 3 for additional information.

In the fourth quarter of 2021, we performed quantitative impairment assessments for our Consumer and Business reporting units. Our 2021 quantitative impairment assessments indicate that the fair values for our Consumer and Business reporting units exceeded their carrying values and therefore did not result in an impairment. We performed qualitative impairment assessments for our Consumer and Business reporting units during the fourth quarters of 2020 and 2019, which indicated that it was more likely than not that the fair values of our Consumer and Business reporting units exceeded their respective carrying values and therefore did not result in impairment.

We performed a quantitative impairment assessment for our historical Media reporting unit in 2019. During the fourth quarter of 2019, consistent with our accounting policy, we applied a combination of a market approach and a discounted cash flow method reflecting current assumptions and inputs, including our revised projections, discount rate and expected growth rates, which resulted in the determination that the fair value of the historical Media reporting unit was less than its carrying amount. As a result, we recorded a non-cash goodwill impairment charge of approximately $186 million ($176 million after-tax) in the fourth quarter of 2019 in our consolidated statement of income. The goodwill balance of the historical Media reporting unit had been fully written off as a result of this impairment charge.

Other Intangible Assets
The following table displays the composition of Other intangible assets, net as well as the respective amortization period:
(dollars in millions)
20212020
At December 31,
Gross (1)
Amount
Accumulated
Amortization		Net
Amount		Gross
Amount		Accumulated
Amortization		Net
Amount
Customer lists (5 to 13 years)
$4,201 $(1,126)$3,075 $4,021 $(1,961)$2,060 
Non-network internal-use software (5 to 7 years)
21,310 (14,897)6,413 21,685 (15,104)6,581 
Other (4 to 25 years)
2,974 (785)2,189 1,771 (999)772 
Total$28,485 $(16,808)$11,677 $27,477 $(18,064)$9,413 
(1) Other intangible assets are net of assets disposed as a result of the closing of the Verizon Media sale on September 1, 2021 and includes assets acquired as a result of the acquisition of Tracfone on November 23, 2021. See Note 3 for additional information.

The amortization expense for Other intangible assets was as follows:
Years(dollars in millions)
2021$2,087 
20202,445 
20192,311 
Estimated annual amortization expense for Other intangible assets is as follows:
Years(dollars in millions)
2022$2,570 
20232,328 
20241,998 
20251,771 
20261,468