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Goodwill, Customer Relationships and Other Intangible Assets | 9 Months Ended
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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 | $ | 15,918 |  |  | 15,986 |
Indefinite-lived intangible assets | $ | 9 |  |  | 9 |
Other intangible assets subject to amortization: |  |  |
Customer relationships, less accumulated amortization of $3,579 and $11,740(1) | 4,822 |  |  | 5,365 |
Capitalized software, less accumulated amortization of $3,832 and $3,624 | 1,498 |  |  | 1,459 |
Trade names, patents and other, less accumulated amortization of $183 and $160 | 107 |  |  | 137 |
Total other intangible assets, net | $ | 6,436 |  |  | 6,970 |
______________________________________________________________________ (1) Certain customer relationships with a gross carrying value of $8.7 billion became fully amortized during 2021 and were retired during the first quarter of 2022. As of September 30, 2022, the gross carrying amount of goodwill, customer relationships, indefinite-lived and other intangible assets was $29.9 billion. Our goodwill was derived from numerous acquisitions where the purchase price exceeded the fair value of the net assets acquired. We assess our goodwill and other indefinite-lived intangible assets 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 any of our reporting units exceeds its fair value. Our annual impairment assessment date for goodwill is October 31, at which date we assess our reporting units. Our annual impairment assessment date for indefinite-lived intangible assets other than goodwill is December 31. Our reporting units are not discrete legal entities with discrete full financial statements. Our assets and liabilities are employed in and relate to the operations of multiple reporting units. For each reporting unit, we compare its estimated fair value of equity to its carrying value of equity that we assign to the reporting unit. If the estimated fair value of the reporting unit is greater than the carrying value, we conclude that no impairment exists. If the estimated fair value of the reporting unit is less than the carrying value, we record a non-cash impairment equal to the excess amount. Depending on the facts and circumstances, we typically estimate the fair value of our reporting units by considering either or both of (i) a discounted cash flow method, which is based on the present value of projected cash flows over a discrete projection period and a terminal value, which is based on the expected normalized cash flows of the reporting units following the discrete projection period, and (ii) a market approach, which includes the use of market multiples of publicly-traded companies whose services are comparable to ours. The following table shows the rollforward of goodwill assigned to our reportable segments from December 31, 2021 through September 30, 2022:
| Business | Mass Markets | Total
| (Dollars in millions)
As of December 31, 2021(1)(2) | $ | 11,235 |  | 4,751 |  | 15,986 |
Effect of foreign currency exchange rate change and other | (68) |  | — |  | (68) |
As of September 30, 2022(1)(3) | $ | 11,167 |  | 4,751 |  | 15,918 |
______________________________________________________________________ (1)Goodwill at September 30, 2022 and December 31, 2021 is net of accumulated impairment losses of $7.7 billion. (2)As of December 31, 2021 these amounts excluded $2.9 billion of goodwill classified as held for sale primarily related to the August 1, 2022 divestiture of the Latin American business and the October 3, 2022 divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for additional information. (3)As of September 30, 2022 these amounts excluded $2.6 billion of goodwill classified as held for sale related to the October 3, 2022 divestiture of the ILEC business. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses and Note 17—Subsequent Events for additional information. We report our results within two segments: Business and Mass Markets. See Note 12—Segment Information for more information on these segments and the underlying sales channels. As of September 30, 2022, we have four reporting units for goodwill impairment testing, which are (i) Mass Markets, (ii) North America Business (iii) Europe, Middle East and Africa region, and (iv) Asia Pacific region. Prior to its August 1, 2022 divestiture, the Latin American region was also considered to be a reporting unit. Total amortization expense for finite-lived intangible assets for the three months ended September 30, 2022 and 2021 totaled $279 million and $306 million, respectively, and for the nine months ended September 30, 2022 and 2021, totaled $830 million and $1.0 billion, respectively. We estimate that total amortization expense for finite-lived intangible assets for the years ending December 31, 2022 through 2026 will be as provided in the table below. The amounts presented in the table below do not include future amortization expense for intangible assets of the ILEC business that was classified as held for sale on September 30, 2022 and sold on October 3, 2022. See Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses for more information.
| (Dollars in millions)
2022 (remaining three months) | $ | 261 |
2023 | 978 |
2024 | 906 |
2025 | 839 |
2026 | 762 |

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