Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND INTANGIBLE ASSETS

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GOODWILL AND INTANGIBLE ASSETS
 3 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS GOODWILL AND INTANGIBLE ASSETS
The following table indicates the allocation of goodwill as of March 31, 2024 and December 31, 2023 (in millions):
U.S. Domestic
Package		 International
Package		 Supply Chain Solutions Consolidated
December 31, 2023: $ 847  $ 503  $ 3,522  $ 4,872 
Acquired —  —  8  8 
Currency / Other —  (7) (27) (34)
March 31, 2024: $ 847  $ 496  $ 3,503  $ 4,846 
Changes in goodwill during the three months ended March 31, 2024 resulted from:
•An increase in goodwill of $8 million, as part of purchase accounting allocations relating to our acquisitions of MNX Global Logistics and Happy Returns in the fourth quarter of 2023. Certain areas of purchase accounting, including our estimates of tax positions, remain preliminary as of March 31, 2024.
•The remaining movements are due to the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. Dollar goodwill balances.
As of March 31, 2024, none of our reporting units had indications that an impairment was more likely than not. Approximately $1.5 billion of our consolidated goodwill balance of $4.8 billion is represented by our Global Freight Forwarding, our truckload brokerage ("Coyote") and Roadie reporting units which, based on our quarterly monitoring, are exhibiting a limited excess of fair value above carrying value and reflect a greater risk of an impairment occurring in future periods. We do not expect any impairment would have a significant impact on our consolidated financial position, results of operations or cash flows.
Actual reporting unit performance, revisions to our forecasts of future performance, market factors, changes in estimates or assumptions in connection with our annual testing, or a combination thereof could result in an impairment charge in one or more of our reporting units during a future period. We continue to monitor business performance and external factors affecting our reporting units.
The following is a summary of intangible assets as of March 31, 2024 and December 31, 2023 (in millions):
Gross Carrying
Amount		 Accumulated
Amortization		 Net Carrying
Value
March 31, 2024:
Capitalized software $ 5,923  $ (4,007) $ 1,916 
Licenses 45  (13) 32 
Franchise rights 332  (48) 284 
Customer relationships 1,114  (537) 577 
Trade name 112  (19) 93 
Trademarks, patents and other 377  (64) 313 
Amortizable intangible assets $ 7,903  $ (4,688) $ 3,215 
Indefinite-lived intangible assets 93  —  93 
Total Intangible Assets, Net $ 7,996  $ (4,688) $ 3,308 
December 31, 2023:
Capitalized software $ 5,839  $ (3,900) $ 1,939 
Licenses 30  (7) 23 
Franchise rights 291  (49) 242 
Customer relationships 1,115  (516) 599 
Trade name 172  (30) 142 
Trademarks, patents and other 320  (53) 267 
Amortizable intangible assets $ 7,767  $ (4,555) $ 3,212 
Indefinite-lived intangible assets 93  —  93 
Total Intangible Assets, Net $ 7,860  $ (4,555) $ 3,305 
A trade name and licenses with carrying values of $89 and $4 million, respectively, as of March 31, 2024 are deemed to be indefinite-lived intangible assets, and therefore are not amortized.
As of March 31, 2024, the estimated fair value of the indefinite-lived trade name associated with Coyote remained greater than its carrying value by less than 10 percent. The carrying value of this trade name is $89 million. Our truckload brokerage business continues to be negatively impacted by market conditions, which has resulted in revenue declines. We continue to monitor business performance and external factors affecting our valuation assumptions for this trade name. There were no events or changes in circumstances as of March 31, 2024 that would indicate the carrying amounts of our indefinite-lived intangible assets may be impaired as of the date of this report.
For the three months ended March 31, 2024, we recorded impairment charges related to finite-lived intangible assets of $48 million ($35 million after tax, or $0.04 per diluted share) within Other Expenses in our statement of consolidated income. These charges represented capitalized software license impairments of $7 million and a $41 million charge to write down the value of certain trade names acquired as part of our acquisition of Bomi Group as we consolidate our brands. There were no impairment charges for finite-lived intangible assets for the three months ended March 31, 2023.