United Parcel Service, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

The following table indicates the allocation of goodwill as of September 30, 2025 and December 31, 2024 (in millions):


	U.S. Domestic Package		International Package		Supply Chain Solutions		Consolidated
December 31, 2024:	$	847	$	487	$	2,966	$	4,300
Acquired	—		—		345		345

Currency / Other	—		27		138		165
September 30, 2025:	$	847	$	514	$	3,449	$	4,810

During the nine months ended September 30, 2025:

•We recorded an increase in goodwill of $345 million as a part of the purchase accounting allocation for our January 2025 acquisition of Frigo-Trans and Biotech & Pharma Logistics ("Frigo-Trans").

•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.

Frigo-Trans is reported in Supply Chain Solutions as part of our Healthcare Logistics and Distribution ("HLD") reporting unit.

We conducted our most recent annual goodwill impairment testing as of July 1, 2025 using both qualitative and quantitative methods. Our quantitative tests utilize a combination of the income and market approaches. We concluded that the fair values of our reporting units were in excess of their respective carrying values.

Approximately $877 and $726 million of our $4.8 billion consolidated goodwill balance is represented by our Global Freight Forwarding ("GFF") and HLD reporting units, respectively, 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. Both GFF and HLD are showing limited excess of fair value over their carrying values, primarily driven by current market conditions, volatility in global markets, early stages of our healthcare growth strategy and ongoing integration of recent acquisitions. Both GFF and HLD reporting units are included in Supply Chain Solutions.

Additionally, beginning in the first quarter of 2025, our Mail Innovations reporting unit experienced cost increases in excess of our expectations due to increases in purchased transportation rates, resulting from the expiration of a contract with our primary vendor. These cost increases began to dissipate in the second quarter of 2025 as we started utilizing alternative vendors. In the second quarter of 2025, we also took action to address the revenue quality in this business, and began to experience improvements therein. Depending on the outcome of these actions, our expectations for the future performance of this reporting unit could be materially affected. Approximately $295 million in goodwill is represented by our Mail Innovations reporting unit included in Supply Chain Solutions.

For each of our reporting units, we continue to monitor the impact of macroeconomic conditions and business performance on our estimates of fair value. Subsequent to our annual testing date and as of September 30, 2025, none of our reporting units had indications that an impairment was more likely than not. Actual reporting unit performance, revisions to our forecasts of future performance, market factors, changes in global trade policy, changes in estimates or assumptions in future impairment testing, or a combination thereof could result in a non-cash impairment charge in one or more of our reporting units during a future period.

The following is a summary of intangible assets as of September 30, 2025 and December 31, 2024 (in millions):



	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
September 30, 2025:
Capitalized software	$	6,673	$	(4,499)	$	2,174
Licenses	87		(34)		53
Franchise rights	371		(53)		318
Customer relationships	871		(269)		602
Trade name	110		(34)		76
Trademarks, patents and other	372		(145)		227
Amortizable intangible assets	$	8,484	$	(5,034)	$	3,450
Indefinite-lived intangible assets	5		—		5
Total Intangible Assets	$	8,489	$	(5,034)	$	3,455
December 31, 2024:
Capitalized software	$	6,088	$	(4,159)	$	1,929
Licenses	30		(12)		18
Franchise rights	348		(55)		293
Customer relationships	677		(206)		471
Trade name	109		(26)		83
Trademarks, patents and other	369		(103)		266
Amortizable intangible assets	$	7,621	$	(4,561)	$	3,060
Indefinite-lived intangible assets	4		—		4
Total Intangible Assets	$	7,625	$	(4,561)	$	3,064

Impairment tests for finite-lived intangible assets are performed when a triggering event occurs that may indicate that the carrying value of the intangible asset may not be recoverable. For the three months ended September 30, 2025, there were no impairment charges for finite-lived intangible assets. For the nine months ended September 30, 2025, we recorded impairment charges of $33 million within Other Expenses in our statement of consolidated income. These charges primarily consisted of software impairment charges related to a business within UPS Digital.

For the three months ended September 30, 2024, there were no material impairment charges for finite-lived intangible assets. For the nine months ended September 30, 2024, we recorded impairment charges of $48 million within Other Expenses in our statement of consolidated income. These charges represented trade name and capitalized software license impairments.