Goodwill, Customer Relationships and Other Intangible Assets

9 Months Ended

Sep. 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:

	September 30, 2022		December 31, 2021
	(Dollars in millions)
Goodwill	$	6,598	6,666
Customer relationships, less accumulated amortization of $3,245 and $2,779	$	4,804	5,325
Capitalized software, less accumulated amortization of $380 and $349	412		378
Trade names, less accumulated amortization of $129 and $109	2		22
Total other intangible assets, net	$	5,218	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 September 30, 2022:

	(Dollars in millions)
As of December 31, 2021 (1)	$	6,666
Effect of foreign currency exchange rate changes	(68)
As of September 30, 2022 (1)	$	6,598

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(1)Goodwill at September 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 September 30, 2022 and 2021 totaled $187 million and $210 million, respectively, and for the nine months ended September 30, 2022 and 2021, totaled $565 million and $637 million, respectively. As of September 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.

	(Dollars in millions)
2022 (remaining three months)	$	182
2023	718
2024	714
2025	689
2026	646