Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2026

Intangible Asset, Goodwill and Other [Abstract]

Note 3—Goodwill and Intangible Assets

Goodwill consisted of the following:


	September 30, 2026		December 31, 2025
	(Dollars in millions)
Goodwill	$	268	—

Intangible assets, net is composed of the following:


	September 30, 2026					December 31, 2025
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
	(Dollars in millions)
Customer relationships	$	7,638	$	5,391	2,247	7,547	4,945	2,602
Capitalized software(1)	5,657		3,843		1,814	5,743	3,940	1,803
Patents and other	159		110		49	158	100	58
Total	$	13,454	9,344		4,110	13,448	8,985	4,463

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(1) Certain capitalized software with a gross carrying value of $259 million became fully amortized during 2025 and was retired during the first quarter of 2026.

As of September 30, 2026 and December 31, 2025, the gross carrying amount of goodwill and other intangible assets was $13.7 billion and $13.4 billion, respectively.

As a result of the acquisition of Alkira, Inc. described in Note 2—Divestiture and Acquisition, the net carrying amount of goodwill, customer relationships and other intangible assets were $475 million as of September 30, 2026, which represents the excess of the purchase price over the fair value of the net tangible assets acquired.

We are required to 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.

The Company assigned the goodwill to its Alkira reporting unit, which is expected to benefit from the acquisition.

The following table shows the rollforward of goodwill from December 31, 2025 to September 30, 2026.


	(Dollars in millions)
As of December 31, 2025	$	—
Alkira Acquisition	268
As of September 30, 2026	$	268

Total amortization expense for intangible assets was as follows:


	Three Months Ended September 30,			Nine Months Ended September 30,
	2026		2025	2026	2025
	(Dollars in millions)
Amortization expense	$	264	251	763	751