Annual report pursuant to Section 13 and 15(d)

GOODWILL AND INTANGIBLE ASSETS

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GOODWILL AND INTANGIBLE ASSETS
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS
NOTE 7. GOODWILL AND INTANGIBLE ASSETS
The following table indicates the allocation of goodwill (in millions):
U.S. Domestic
Package		 International
Package		 Supply Chain 
Solutions		 Consolidated
Balance as of January 1, 2023 $ 847  $ 492  $ 2,884  $ 4,223 
Acquired —  4  723  727 
Impairments —  —  (125) (125)
Currency / Other —  7  40  47 
Balance as of December 31, 2023 $ 847  $ 503  $ 3,522  $ 4,872 
Acquired —  —  4  4 
Divestiture
 —  —  (495) (495)
Currency / Other —  (16) (65) (81)
Balance as of December 31, 2024 $ 847  $ 487  $ 2,966  $ 4,300 
2024 Goodwill Activity
Goodwill acquired during 2024 was associated with our acquisition of certain locations of The UPS Store. It also reflects the 2024 completion of purchase accounting allocations from our 2023 acquisitions of MNX Global Logistics and Happy Returns, which are both reported within Supply Chain Solutions. In 2024, the decrease in goodwill balance is primarily due to the divestiture of our truckload brokerage business ("Coyote") within Supply Chain Solutions as discussed in note 8.
The remaining changes were due to the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. Dollar goodwill balances.
2023 Goodwill Activity
Goodwill acquired during 2023 was primarily associated with our acquisitions of MNX Global Logistics and Happy Returns, which are both reported within Supply Chain Solutions. It also reflects the 2023 completion of purchase accounting allocations from our 2022 acquisition of Bomi Group. During 2023, we recorded non-cash goodwill impairment charges of $125 million, comprised of: $56 million related to our Roadie reporting unit, $61 million related to our Delivery Solutions reporting unit, which represented all the goodwill associated with that reporting unit, and an immaterial charge resulting from the closure of a trade management services business within Supply Chain Solutions.
The remaining changes were due to the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. Dollar goodwill balances.
Goodwill Impairment
We complete our annual goodwill impairment test as of July 1 on a reporting unit basis. The results concluded that the fair values of our reporting units were in excess of their respective carrying values. Approximately $1.1 billion of our consolidated goodwill balance of $4.3 billion is represented by our Global Freight Forwarding, Roadie and Global Logistics and Distribution reporting units which, based on our annual impairment evaluation, are exhibiting a limited excess of fair value above carrying value and reflect a greater risk of an impairment occurring in future periods.
Based on our review of managerial realignments, which occurred as of October 1, 2024, we have determined that our MNX Global Logistics and Marken businesses are now within a single operating segment and, based on criteria in ASC Topic 350, also represent a single reporting unit. We performed impairment analyses as of October 1, 2024, reflective of our reporting unit structures before and after the reporting unit change, and did not identify any impairment of goodwill in connection therewith.
We did not record any goodwill impairment charges in the years ended December 31, 2024 or 2022. In 2023, we recorded non-cash goodwill impairment charges of $125 million, as described above.
Cumulatively, we have recorded $1.2 billion of goodwill impairment charges in Supply Chain Solutions, while our International and U.S. Domestic Package segments have not recorded any goodwill impairment charges.
Intangible Assets
The following is a summary of intangible assets as of December 31, 2024 and 2023 (in millions):
Gross Carrying
Amount		 Accumulated
Amortization		 Net Carrying
Value		 Weighted-Average
Amortization
Period
(in years)
December 31, 2024
Capitalized software $ 6,088  $ (4,159) $ 1,929  6.9
Licenses 30  (12) 18  4.1
Franchise rights 348  (55) 293  20.0
Customer relationships 677  (206) 471  13.6
Trade name 109  (26) 83  10.2
Trademarks, patents and other 369  (103) 266  7.5
Amortizable intangible assets $ 7,621  $ (4,561) $ 3,060  8.2
Indefinite-lived intangible assets 4  —  4 
Total Intangible Assets $ 7,625  $ (4,561) $ 3,064 
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 $ 7,860  $ (4,555) $ 3,305 
The table as of December 31, 2024 above excludes intangible assets associated with Coyote, which was divested during the third quarter of 2024 as discussed in note 8. During 2023, we recorded an impairment of $111 million related to the Coyote trade name within Other expenses in our statements of consolidated income. We did not record any impairments of indefinite-lived intangibles during 2024.
As of December 31, 2024, we do not have material indefinite-lived intangible assets. All of our other recorded intangible assets are deemed to be finite-lived and are amortized over their estimated useful lives. Impairment tests for these assets are performed when a triggering event occurs that may indicate that the carrying value of the intangible asset may not be recoverable. Additionally, a decision to sell or abandon an intangible asset before the end of its useful life may result in an impairment charge. Impairments of finite-lived intangible assets were $71, $8 and $17 million in 2024, 2023, and 2022, respectively, and were recorded within Other expenses in our statements of consolidated income. For the year ended December 31, 2024, these charges represented trade name and capitalized software license impairments.
Amortization of intangible assets was $648, $597 and $525 million in each of 2024, 2023 and 2022, respectively. Expected amortization of finite-lived intangible assets recorded as of December 31, 2024 for the next five years is as follows (in millions): 2025—$633; 2026—$556; 2027—$479; 2028—$398; 2029—$296. Amortization expense in future periods will be affected by business acquisitions and divestitures, software development, licensing agreements, purchases of development areas or similar franchise rights and other factors.
As a result of our strategic actions under our Efficiency Reimagined initiatives, we are reviewing our software application infrastructure and expect that, as result of this review, it is reasonably possible that revisions to the useful lives of certain finite-lived intangible assets or early retirements will occur in future periods. See further discussion in note 18.