Annual report [Section 13 and 15(d), not S-K Item 405]

GOODWILL AND INTANGIBLE ASSETS

v3.25.4
GOODWILL AND INTANGIBLE ASSETS
 12 Months Ended
Dec. 31, 2025
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, 2024
 $ 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 
Acquired —  79  1,265  1,344 
Currency / Other —  30  163  193 
Balance as of December 31, 2025 $ 847  $ 596  $ 4,394  $ 5,837 
2025 Goodwill Activity
Goodwill acquired during 2025 was associated with our acquisitions of Frigo-Trans and Biotech & Pharma Logistics ("Frigo-Trans") and Andlauer Healthcare Group, Inc ("AHG"), which are both reported within SCS. In 2025, the increase in goodwill balance is primarily due to the acquisitions of the above mentioned businesses 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.
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 SCS. In 2024, the decrease in goodwill balance is primarily due to the divestiture of our truckload brokerage business ("Coyote") within SCS 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.
Goodwill Impairment
We conducted our most recent annual goodwill impairment testing as of July 1, 2025 using both qualitative and quantitative methods. As of our July 1, 2025 testing date, approximately $877 million and $738 million of our $4.8 billion consolidated goodwill balance is represented by our Global Freight Forwarding ("GFF") and Healthcare Logistics and Distribution ("HLD") reporting units, respectively. Based on our annual impairment evaluation, both reporting units exhibited a limited excess of fair value above carrying value and reflect a greater risk of an impairment occurring in future periods. This limited excess was primarily driven by current market conditions, volatility in global markets, early stages of our current healthcare growth strategy and ongoing integration of recent acquisitions. Both GFF and HLD reporting units are included in SCS.
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, the GFF reporting unit continued to face volatile market conditions and management updated its long-term projections for the mix and timing of revenue growth. We concluded that the change in projections triggered the need for an interim quantitative test for goodwill impairment in the fourth quarter of 2025. The interim impairment test methodology was consistent with our approach for annual impairment testing, using our current view of key inputs and assumptions. The interim impairment test indicated that the GFF reporting unit continues to have a limited excess of fair value over carrying value consistent with the last annual test, and no impairment was recorded.
No other 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.
In the course of our ongoing monitoring of reporting units, we also noted developments within our Mail Innovations reporting unit. Beginning in the first quarter of 2025, Mail Innovations 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. In December 2025, we entered into an agreement with the United States Postal Service ("USPS") to support final-mile delivery for Mail Innovations volumes starting in 2026. This agreement is expected to reduce exposure to purchased transportation cost volatility and enhance the predictability of future operating results, mitigating the cost-related risk identified earlier in the year. As of our July 1, 2025 testing date, approximately $295 million in goodwill is represented by our Mail Innovations reporting unit included in SCS.
Intangible Assets
The following is a summary of intangible assets as of December 31, 2025 and 2024 (in millions):
Gross Carrying
Amount		 Accumulated
Amortization		 Net Carrying
Value		 Weighted-Average
Amortization
Period
(in years)
December 31, 2025
Capitalized software $ 6,810  $ (4,593) $ 2,217  6.9
Customer relationships 1,438  (293) 1,145  14.3
Trademarks, patents and other 368  (154) 214  7.6
Franchise rights 382  (68) 314  20.0
Trade name 116  (39) 77  9.5
Licenses 88  (39) 49  3.4
Amortizable intangible assets $ 9,202  $ (5,186) $ 4,016  8.6
Indefinite-lived intangible assets 5  —  5 
Total Intangible Assets $ 9,207  $ (5,186) $ 4,021 
December 31, 2024
Capitalized software $ 6,088  $ (4,159) $ 1,929 
Customer relationships 677  (206) 471 
Trademarks, patents and other 369  (103) 266 
Franchise rights 348  (55) 293 
Trade name 109  (26) 83 
Licenses 30  (12) 18 
Amortizable intangible assets $ 7,621  $ (4,561) $ 3,060 
Indefinite-lived intangible assets 4  —  4 
Total Intangible Assets $ 7,625  $ (4,561) $ 3,064 
As of December 31, 2025 and 2024, we do not have material indefinite-lived intangible assets and we did not record any impairments related to indefinite-lived intangibles during those periods.
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 $39, $71 and $8 million in 2025, 2024, and 2023, respectively, and were recorded within Other expenses in our statements of consolidated income. In 2025, these charges primarily consisted of software impairment charges related to a business within SCS. In 2024, these charges represented trade name and capitalized software license impairments.
Amortization of intangible assets was $700, $648 and $597 million in each of 2025, 2024 and 2023, respectively. Expected amortization of finite-lived intangible assets recorded as of December 31, 2025 for the next five years is as follows (in millions): 2026—$783; 2027—$688; 2028—$577; 2029—$461; 2030—$355.