# UNITED PARCEL SERVICE INC (UPS)

Informational only - not investment advice.

CIK: 0001090727
SIC: 4210 Trucking & Courier Services (No Air)
SIC breadcrumb: [Transportation, Communications, Electric, Gas, And Sanitary Services](/division/E/) > [Motor Freight Transportation And Warehousing](/major-group/42/) > [SIC 4210 Trucking & Courier Services (No Air)](/industry/4210/)
Latest 10-K filed: 2026-02-17
SEC page: https://www.sec.gov/edgar/browse/?CIK=1090727
Filing source: https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/ups-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-17 · accession 0001628280-26-008432 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001090727.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 88,661,000,000 USD | 2025 | verified |
| Net income | 5,572,000,000 USD | 2025 | verified |
| Assets | 73,090,000,000 USD | 2025 | verified |
| Free cash flow | 4,765,000,000 USD | 2025 | computed |
| Net margin | 6.28% | 2025 | computed |
| Operating margin | 8.87% | 2025 | computed |
| Revenue YoY | -2.65% | 2025 | computed |
| ROE | 34.34% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | UPS | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 6.3% | 1.7% | 85 | 14 |
| Operating margin | 8.9% | 2.7% | 85 | 14 |
| Revenue growth | -2.6% | -2.2% | 46 | 14 |
| FCF margin | 5.4% | 2.8% | 75 | 13 |
| ROE | 34.3% | 2.8% | 100 | 14 |
| ROA | 7.6% | 2.0% | 92 | 14 |
| Liabilities / equity | 3.50 | 0.97 | 100 | 14 |
| Current ratio | 1.22 | 1.22 | 46 | 14 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 42 Motor Freight Transportation And Warehousing, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 88661000000 | USD | 2025 | 2026-02-17 |
| Net income | 5572000000 | USD | 2025 | 2026-02-17 |
| Assets | 73090000000 | USD | 2025 | 2026-02-17 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-17. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001090727.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 61,610,000,000 | 66,585,000,000 | 71,861,000,000 | 74,094,000,000 | 84,628,000,000 | 97,287,000,000 | 100,338,000,000 | 90,958,000,000 | 91,070,000,000 | 88,661,000,000 |
| Net income | 3,422,000,000 | 4,905,000,000 | 4,791,000,000 | 4,440,000,000 | 1,343,000,000 | 12,890,000,000 | 11,548,000,000 | 6,708,000,000 | 5,782,000,000 | 5,572,000,000 |
| Operating income | 7,688,000,000 | 7,529,000,000 | 7,024,000,000 | 7,798,000,000 | 7,684,000,000 | 12,810,000,000 | 13,094,000,000 | 9,141,000,000 | 8,468,000,000 | 7,867,000,000 |
| Diluted EPS | 3.86 | 5.61 | 5.51 | 5.11 | 1.54 | 14.68 | 13.20 | 7.80 | 6.75 | 6.56 |
| Operating cash flow | 6,473,000,000 | 1,479,000,000 | 12,711,000,000 | 8,639,000,000 | 10,459,000,000 | 15,007,000,000 | 14,104,000,000 | 10,238,000,000 | 10,122,000,000 | 8,450,000,000 |
| Capital expenditures | 2,965,000,000 | 5,227,000,000 | 6,283,000,000 | 6,380,000,000 | 5,412,000,000 | 4,194,000,000 | 4,769,000,000 | 5,158,000,000 | 3,909,000,000 | 3,685,000,000 |
| Dividends paid | 2,643,000,000 | 2,771,000,000 | 3,011,000,000 | 3,194,000,000 | 3,374,000,000 | 3,437,000,000 | 5,114,000,000 | 5,372,000,000 | 5,399,000,000 | 5,398,000,000 |
| Share buybacks | 2,678,000,000 | 1,813,000,000 | 1,011,000,000 | 1,004,000,000 | 224,000,000 | 500,000,000 | 3,500,000,000 | 2,250,000,000 | 500,000,000 | 1,000,000,000 |
| Assets | 40,545,000,000 | 45,574,000,000 | 50,016,000,000 | 57,857,000,000 | 62,408,000,000 | 69,405,000,000 | 71,124,000,000 | 70,857,000,000 | 70,070,000,000 | 73,090,000,000 |
| Stockholders' equity | 405,000,000 | 994,000,000 | 3,021,000,000 | 3,267,000,000 | 657,000,000 | 14,253,000,000 | 19,786,000,000 | 17,306,000,000 | 16,718,000,000 | 16,227,000,000 |
| Cash and cash equivalents | 3,476,000,000 | 3,320,000,000 | 4,225,000,000 | 5,238,000,000 | 5,910,000,000 | 10,255,000,000 | 5,602,000,000 | 3,206,000,000 | 6,112,000,000 | 5,887,000,000 |
| Free cash flow | 3,508,000,000 | -3,748,000,000 | 6,428,000,000 | 2,259,000,000 | 5,047,000,000 | 10,813,000,000 | 9,335,000,000 | 5,080,000,000 | 6,213,000,000 | 4,765,000,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 5.55% | 7.37% | 6.67% | 5.99% | 1.59% | 13.25% | 11.51% | 7.37% | 6.35% | 6.28% |
| Operating margin | 12.48% | 11.31% | 9.77% | 10.52% | 9.08% | 13.17% | 13.05% | 10.05% | 9.30% | 8.87% |
| Return on equity |  | 493.46% | 158.59% | 135.90% | 204.41% | 90.44% | 58.36% | 38.76% | 34.59% | 34.34% |
| Return on assets | 8.44% | 10.76% | 9.58% | 7.67% | 2.15% | 18.57% | 16.24% | 9.47% | 8.25% | 7.62% |
| Liabilities / equity | 99.11 | 44.85 | 15.56 | 16.71 | 93.99 | 3.87 | 2.59 | 3.09 | 3.19 | 3.50 |
| Current ratio | 1.18 | 1.22 | 1.15 | 1.11 | 1.19 | 1.42 | 1.22 | 1.10 | 1.17 | 1.22 |

## As-reported value updates

1 tracked difference above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/UPS/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001090727.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 2.96 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  | 1,895,000,000 | 2.19 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  | 2,081,000,000 | 2.42 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 21,061,000,000 | 1,127,000,000 | 1.31 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 24,917,000,000 | 1,605,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 21,706,000,000 | 1,113,000,000 | 1.30 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 21,818,000,000 | 1,409,000,000 | 1.65 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 22,245,000,000 | 1,539,000,000 | 1.80 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 25,301,000,000 | 1,721,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 21,546,000,000 | 1,187,000,000 | 1.40 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 21,221,000,000 |  | 1.51 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 21,415,000,000 |  | 1.55 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 24,479,000,000 | 1,791,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 21,202,000,000 | 864,000,000 | 1.02 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 22,834,000,000 | 604,000,000 | 0.71 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from UPS's latest 10-K: [/company/UPS/business/](/company/UPS/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from UPS's latest 10-K: [/company/UPS/risk-factors/](/company/UPS/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1090727/000162828026053249/ups-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-08-05
Report date: 2026-06-30

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

During the second quarter of 2026, we took several steps in furtherance of our Customer First, People Led and Innovation Driven strategy to grow in the most attractive parts of the market including healthcare, small and medium-sized businesses ("SMBs") and international. This included completing the planned reduction of volume from our largest customer, as previously announced, in which we reduced their volume by more than 50% from 2024 levels. We also continued our focus on revenue quality and made progress on previously announced initiatives related to workforce optimization, network capacity actions and the outsourcing of last-mile delivery of a portion of our Ground Saver product to the United States Postal Service ("USPS").

We also advanced our Network of the Future initiative, which is intended to enhance the efficiency of our U.S. Domestic Package network through automation and operational sort consolidation. Our related Network Reconfiguration initiative expanded our Network of the Future initiative, and has led, and will continue to lead, to further consolidations in facilities, vehicles, aircraft and workforce, as well as an end-to-end process redesign. We launched our Efficiency Reimagined initiatives to undertake the end-to-end process redesign effort which will align our organizational processes to the network reconfiguration. As a part of these initiatives, in the first half of 2026, we closed 45 leased and owned buildings, 44 of which have been permanently closed, and recorded approximately $1.1 billion in separation costs related to our previously announced voluntary separation program, the Driver Choice Program. See Supplemental Information - Items Affecting Comparability for additional discussion of this initiative.

In the first half of 2026, we also advanced a number of initiatives that drove growth in healthcare and international markets, including the integration of Andlauer Healthcare Group ("AHG"), which expanded our healthcare logistics network and capabilities, and investments in temperature-controlled cross-dock facilities. Internationally, we expanded our hub in Incheon, South Korea, opened a logistics center in Taiwan and implemented initiatives to improve ground transit times in Europe.

We have two reportable segments: U.S. Domestic Package and International Package, which are together referred to as our global small package operations. Our remaining businesses are reported as Supply Chain Solutions ("SCS").

Our financial results for the three and six months ended June 30, 2026 reflected the impact of a complex macroeconomic environment, including evolving trade policies, higher fuel and network costs arising from the Middle East conflict, as well as the impact of our strategic actions described above.

In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). UPS has filed and received U.S. Customs and Border Protection ("CBP") approval for approximately $500 million of IEEPA tariffs paid for entries eligible for refund. For additional information on tariffs, see note 10 to the unaudited, consolidated financial statements included in this report.

28

Table of Contents

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Highlights of our consolidated results compared to our results for the three and six months ended June 30, 2026 and 2025, which are discussed in more detail below, include:

[[GREPCENT_TABLE]]
[["","Three Months Ended June 30,","","Change","","Six Months Ended June 30,","","Change"],["","2026","","2025","","$","","%","","2026","","2025","","$","","%"],["Revenue (in millions)","$","22,834","","","$","21,221","","","$","1,613","","","7.6","%","","$","44,036","","","$","42,767","","","$","1,269","","","3.0","%"],["Operating Expenses (in millions)","21,904","","","19,399","","","2,505","","","12.9","%","","41,839","","","39,279","","","2,560","","","6.5","%"],["Operating Profit (in millions)","$","930","","","$","1,822","","","$","(892)","","","(49.0)","%","","$","2,197","","","$","3,488","","","$","(1,291)","","","(37.0)","%"],["Operating Margin","4.1","%","","8.6","%","","","","","","5.0","%","","8.2","%"],["Net Income (in millions)","$","604","","","$","1,283","","","$","(679)","","","(52.9)","%","","$","1,468","","","$","2,470","","","$","(1,002)","","","(40.6)","%"],["Basic Earnings Per Share","$","0.71","","","$","1.51","","","$","(0.80)","","","(53.0)","%","","$","1.73","","","$","2.91","","","$","(1.18)","","","(40.5)","%"],["Diluted Earnings Per Share","$","0.71","","","$","1.51","","","$","(0.80)","","","(53.0)","%","","$","1.73","","","$","2.91","","","$","(1.18)","","","(40.5)","%"],["Operating Days","64","","","64","","","","","","","126","","","126"],["Average Daily Package Volume (in thousands)","19,006","","","19,741","","","","","(3.7)","%","","19,093","","","20,257","","","","","(5.7)","%"],["Average Revenue Per Piece","$","15.96","","","$","14.34","","","$","1.62","","","11.3","%","","$","15.65","","","$","14.28","","","$","1.37","","","9.6","%"]]
[[/GREPCENT_TABLE]]

•All of our segments contributed to revenue growth during the quarter and year-to-date periods of 2026.

•Revenue increased in both the quarter and year-to-date periods due to higher fuel surcharge revenue, benefits from our focus on revenue quality and higher yielding volume, as well as the impact of the AHG acquisition in the fourth quarter of 2025, partially offset by lower revenue associated with average daily volume declines and decreases in our Mail Innovations volume.

•Average daily package volume in our global small package operations decreased in both the quarter and year-to-date periods primarily due to planned reduction in volume from our largest customer, revenue quality actions, including those affecting certain e-commerce customers, and the impact of trade policy changes on certain international trade lanes. These declines were partially offset by continued growth from SMBs who leveraged our Digital Access Program ("DAP").

•Operating expenses increased during the quarter and year-to-date periods, primarily due to employee separation costs related to the Driver Choice Program and excess operational staffing in the first quarter of 2026 associated with outsourcing our Ground Saver product. Expenses also increased due to higher purchased transportation costs and higher costs for third-party aircraft, including lease expense incurred to address capacity constraints following the permanent grounding and retirement of our MD-11 fleet in the fourth quarter of 2025. Additionally, higher fuel costs and charter utilization expenses associated with network disruptions resulting from the Middle East conflict contributed to the increase. These increases were partially offset by benefits achieved as we executed our Network Reconfiguration and Efficiency Reimagined initiatives, as well as gains on sales of properties and aircraft parts.

•As a result of the factors described above, consolidated operating profit and operating margin decreased $892 million for the quarter ($1.3 billion year to date), with operating margin decreasing 450 basis points to 4.1% (down 320 basis points to 5.0% year to date).

•We reported second quarter 2026 net income of $604 million and diluted earnings per share of $0.71 ($1.5 billion and $1.73 per diluted share, year to date). Non-GAAP adjusted diluted earnings per share for the second quarter of 2026 were $1.76 ($2.82 per diluted share, year to date) after adjusting for the after-tax impacts of:

◦Transformation strategy costs of $891 million, or $1.05 per diluted share, in the second quarter ($933 million, or $1.09 per diluted share, year to date), primarily from employee separation costs related to the Driver Choice Program. For additional information, see note 16 of the unaudited, consolidated financial statements.

•We also returned $2.7 billion of cash to shareowners through dividends during the first half of 2026.

For additional operational results for the quarter and year-to-date periods specific to our segments, refer to Results of Operations - Segment Review below.

29

Table of Contents

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Supplemental Information - Items Affecting Comparability

We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP adjusted financial measures.

Non-GAAP adjusted financial measures should be considered in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP adjusted financial measures do not represent a comprehensive basis of accounting and therefore may not be comparable to similarly titled measures reported by other companies.

Non-GAAP adjusted amounts reflect the following (in millions):

[[GREPCENT_TABLE]]
[["","Three Months Ended June 30,","","Six Months Ended June 30,"],["Non-GAAP Adjustments","2026","","2025","","2026","","2025"],["Operating Expenses:"],["Transformation Strategy Costs:"],["Transformation 2.0","$","\u2014","","","$","(3)","","","$","\u2014","","","$","13"],["Fit to Serve","\u2014","","","9","","","\u2014","","","28"],["Network Reconfiguration and Efficiency Reimagined","1,172","","","68","","","1,227","","","91"],["Total Transformation Strategy Costs","1,172","","","74","","","1,227","","","132"],["Net Loss (Gain) on Divestiture","\u2014","","","(20)","","","\u2014","","","19"],["Total Non-GAAP Adjustments to Operating Expenses","$","1,172","","","$","54","","","$","1,227","","","$","151"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","Three Months Ended June 30,","","Six Months Ended June 30,"],["Non-GAAP Adjustments","2026","","2025","","2026","","2025"],["Other Income and (Expense):"],["Goodwill and Asset Impairment Charges","$","\u2014","","","$","\u2014","","","$","\u2014","","","$","19"],["Total Non-GAAP Adjustments to Other Income","$","\u2014","","","$","\u2014","","","$","\u2014","","","$","19"],["Total Non-GAAP Adjustments to Income Before Income Taxes","$","1,172","","","$","54","","","$","1,227","","","$","170"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","Three Months Ended June 30,","","Six Months Ended June 30,"],["Non-GAAP Adjustments","2026","","2025","","2026","","2025"],["Income Tax (Benefit) Expense:"],["Transformation Strategy Costs:"],["Transformation 2.0","$","\u2014","","","$","(1)","","","$","\u2014","","","$","3"],["Fit to Serve","\u2014","","","2","","","\u2014","","","6"],["Network Reconfiguration and Efficiency Reimagined","281","","","16","","","294","","","22"],["Total Transformation Strategy Costs","281","","","17","","","294","","","31"],["Net Loss (Gain) on Divestiture","\u2014","","","(5)","","","\u2014","","","4"],["Reversal of Income Tax Valuation Allowance","\u2014","","","13","","","\u2014","","","23"],["Total Non-GAAP Adjustments to Income Tax Expense","$","281","","","$","25","","","$","294","","","$","58"],["Total Adjustments to Non-GAAP Net Income","$","891","","","$","29","","","$","933","","","$","112"]]
[[/GREPCENT_TABLE]]

The income tax impacts of these items are calculated at the statutory tax rates applicable in each tax jurisdiction.

We supplement the presentation of operating profit, operating margin, other income and (expense), income before income taxes, net income and earnings per share with non-GAAP financial measures that exclude the impact of the following:

30

Table of Contents

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Transformation Strategy Costs

We exclude the impac

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/ups-20251231.htm
Complete FY 2025 MD&A: /company/UPS/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-02-17
Report date: 2025-12-31

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and related notes

included in Item 8. "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K (this "Annual Report" or "this report"). This section of this Annual Report includes a discussion of 2025 and 2024 items and year-over-year comparisons between those years. For a discussion of year-over-year comparisons between 2024 and 2023 that are not included in this Annual Report see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission on February 18, 2025.

Overview

In 2025, we continued to execute our Customer First, People Led and Innovation Driven strategy, which focuses on growing in the parts of the market that value our end-to-end solutions, including healthcare, small-and medium-sized businesses ("SMBs") and International.

As part of this strategy, we drove a reduction in volume from our largest customer, with a targeted reduction of 50% by June 2026 from 2024 levels. Partly as a result, we increased consolidated revenue per piece by 6.6%, and expanded SMB penetration to over 30% of total U.S. volume.

In connection with this strategic execution of volume declines, we began our Network Reconfiguration and Efficiency Reimagined initiatives. These initiatives are intended to enhance the efficiency of our network through automation and operational sort consolidation in our U.S. Domestic network. From these initiatives, we delivered on our planned year-over-year cost savings of approximately $3.5 billion in 2025. See Supplemental Information - Items Affecting Comparability for additional discussion.

Also in 2025, we completed the acquisitions of Frigo-Trans and Biotech & Pharma Logistics ("Frigo-Trans"), and Andlauer Healthcare Group ("AHG"). In 2025, our global healthcare portfolio generated more than $11 billion in revenue, furthering our progress towards our goal to become the number one complex healthcare logistics provider in the world. In September 2024, we completed the divestiture of our truckload brokerage services ("Coyote"), which contributed $1.6 billion of revenue in 2024 prior to its divestiture.

Effective January 1, 2025, we insourced our former SurePost product, and replaced it with Ground Saver, a domestic economy service meant to complement our array of products used by our customers. This change provided us greater operational control and service quality with respect to this product. However, this insourcing pressured our operating results, as pickup and delivery costs were higher than in 2024. In December 2025, we entered into a new agreement with the United States Postal Service ("USPS") to assist with final-mile delivery for a portion of our Ground Saver and Mail Innovations volumes starting in 2026, which is expected to allow us to more cost efficiently serve our customers while maintaining our service levels.

In the International market, during 2025 we implemented weekend delivery within Europe. Additionally, our new air hub in the Philippines is slated to open towards the end of 2026 and our expansion in Hong Kong is planned to open in 2028. Both gateways are expected to give us broader access and faster time in transit on the trade lanes that are growing in Asia.

During 2025, we returned $6.4 billion in cash to shareholders by completing $1.0 billion of share repurchases and paying $5.4 billion in dividends.

Our 2025 financial results also reflect the impact of a complex macro environment, driven by evolving trade policies, and the significant strategic actions we are taking including revenue quality initiatives. Global trade policy changes during 2025, including pending and enacted tariffs and de minimis exclusions, resulted in shifting trade lane volumes, particularly reducing volumes on our China to U.S. lane, pressuring our International Package segment margins during the year.

23

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Highlights of our consolidated results which are discussed in more detail below, include:

[[GREPCENT_TABLE]]
[["","2025","","2024","","Change $","","Change %"],["Revenue (in millions)","$","88,661","","","$","91,070","","","$","(2,409)","","","(2.6)","%"],["Operating Expenses (in millions)","80,794","","","82,602","","","(1,808)","","","(2.2)","%"],["Operating Profit (in millions)","$","7,867","","","$","8,468","","","$","(601)","","","(7.1)","%"],["Operating Margin","8.9","%","","9.3","%"],["Net Income (in millions)","$","5,572","","","$","5,782","","","$","(210)","","","(3.6)","%"],["Basic Earnings Per Share","$","6.56","","","$","6.76","","","$","(0.20)","","","(3.0)","%"],["Diluted Earnings Per Share","$","6.56","","","$","6.75","","","$","(0.19)","","","(2.8)","%"],["Operating Days","252","","","253"],["Average Daily Package Volume (in thousands)","20,847","","","22,418","","","","","(7.0)","%"],["Average Revenue Per Piece","$","14.50","","","$","13.60","","","$","0.90","","","6.6","%"]]
[[/GREPCENT_TABLE]]

•Average daily package volume in our global small package operations decreased in 2025, primarily due to the execution of planned volume declines from our largest customer and revenue quality actions we took related to certain e-commerce customers.

•Revenue declined in 2025, primarily driven by the impact of the Coyote divestiture, the volume declines described above, and decreases in our Mail Innovations volume. These decreases were partially offset by growth in our International Package segment, driven by higher average daily volume and ongoing revenue‑quality initiatives, as well as increased air cargo revenue from the full onboarding in the fourth quarter of 2024 of volume under our USPS contract and continued contributions from our healthcare logistics businesses.

•Revenue per piece increased due to favorable trends in customer and product mix as well as revenue quality actions that we took.

•Operating expenses decreased in 2025, driven by decreases in purchased transportation expense, primarily attributable to the impact of the Coyote divestiture, the insourcing of our Ground Saver product and a gain from sale-leaseback transactions involving real estate properties within Supply Chain Solutions ("SCS"). These decreases were partially offset by increases in compensation and benefits and higher pick up and delivery costs associated with the insourcing of our Ground Saver product, incremental costs related to the grounding of our MD-11 fleet and costs related to implementing weekend delivery within Europe.

•Operating profit and operating margin decreased due to increased pickup and delivery expenses in the U.S. Domestic Package segment and shifting international volume to less profitable trade lanes due to trade policy challenges, partially offset by the impact of our revenue quality efforts.

•We reported net income of $5.6 billion and diluted earnings per share of $6.56, which included $0.30 per diluted share attributable to the gain from sale-leaseback transactions involving real estate properties within SCS. Non-GAAP adjusted diluted earnings per share in 2025 were $7.16 after adjusting for the after-tax impacts of:

◦Transformation Strategy Costs of $452 million, or $0.53 per diluted share;

◦Goodwill and Asset Impairment Charges of $156 million, or $0.18 per diluted share, which includes a charge of $137 million related to the retirement of our MD-11 aircraft fleet;

◦a Net Loss on Divestiture of $15 million, or $0.02 per diluted share; and

◦the Reversal of an Income Tax Valuation Allowance of ($109) million, or ($0.13) per diluted share.

For additional operational results specific to U.S. Domestic Package, International Package and SCS refer to the respective discussions below.

24

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Supplemental Information - Items Affecting Comparability

Our operating expenses are allocated between our operating segments using activity-based costing methods. These activity-based costing methods require us to make estimates that impact the amount of each expense category that is attributed to each segment. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our businesses. There were no significant changes to our allocation methodologies for 2025 relative to 2024.

We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP adjusted financial measures. Non-GAAP adjusted financial measures should be considered in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP adjusted financial measures do not represent a comprehensive basis of accounting and therefore may not be comparable to similarly titled measures reported by other companies.

Non-GAAP adjusted amounts reflect the following (in millions):

[[GREPCENT_TABLE]]
[["Non-GAAP Adjustments","2025","","2024"],["Operating Expenses:"],["Transformation Strategy Costs:"],["Transformation 2.0"],["Business Portfolio Review","$","(18)","","","$","29"],["Financial Systems","55","","","54"],["Transformation 2.0 Total","37","","","83"],["Fit to Serve","47","","","204"],["Network Reconfiguration and Efficiency Reimagined","509","","","35"],["Total Transformation Strategy Costs","593","","","322"],["Goodwill and Asset Impairment Charges","182","","","108"],["Net Loss (Gain) on Divestiture","19","","","(156)"],["One-Time Payment for International Regulatory Matter","\u2014","","","88"],["Expense for Regulatory Matter","\u2014","","","45"],["Multiemployer Pension Plan Withdrawal Expense","\u2014","","","19"],["Total Non-GAAP Adjustments to Operating Expenses","$","794","","","$","426"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["Non-GAAP Adjustments","2025","","2024"],["Other Income and (Expense):"],["Defined Benefit Pension and Postretirement Medical Plan Loss","$","\u2014","","","$","665"],["Goodwill and Asset Impairment Charges","19","","","\u2014"],["Interest Expense Associated with One-Time Payment for International Regulatory Matter","\u2014","","","6"],["Total Adjustments to Non-GAAP Other Income and (Expense)","$","19","","","$","671"],["Total Adjustments to Non-GAAP Income Before Income Taxes","$","813","","","$","1,097"]]
[[/GREPCENT_TABLE]]

25

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

[[GREPCENT_TABLE]]
[["Non-GAAP Adjustments","2025","","2024"],["Income Tax (Benefit) Expense:"],["Transformation Strategy Costs:"],["Transformation 2.0"],["Business Portfolio Review","$","(5)","","","$","7"],["Financial Systems","14","","","13"],["Transformation 2.0 Total","9","","","20"],["Fit to Serve","10","","","49"],["Network Reconfiguration and Efficiency Reimagined","122","","","8"],["Total Transformation Strategy Costs","141","","","77"],["Reversal of Income Tax Valuation Allowance","109","","","\u2014"],["Goodwill and Asset Impairment Charges","45","","","27"],["Net Loss (Gain) on Divestiture","4","","","(4)"],["Defined Benefit Pension and Postretirement Medical Plan Loss","\u2014","","","159"],["Multiemployer Pension Plan Withdrawal Expense","\u2014","","","5"],["Total Non-GAAP Adjustments to Income Tax (Benefit) Expense","$","299","","","$","264"],["Total Non-GAAP Adjustments to Net Income","$","514","","","$","833"]]
[[/GREPCENT_TABLE]]

The income tax effects of adjustments to income before income taxes are calculated by multiplying the statutory tax rates applicable in each tax jurisdiction, in

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/UPS/mda/fy2025/
All MD&A years: /company/UPS/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/UPS/mda/fy2024/): filed 2025-02-18; accession 0001090727-25-000019 (https://www.sec.gov/Archives/edgar/data/1090727/000109072725000019/ups-20241231.htm)
- [FY 2023 MD&A](/company/UPS/mda/fy2023/): filed 2024-02-20; accession 0001090727-24-000008 (https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-20231231.htm)
- [FY 2022 MD&A](/company/UPS/mda/fy2022/): filed 2023-02-21; accession 0001090727-23-000006 (https://www.sec.gov/Archives/edgar/data/1090727/000109072723000006/ups-20221231.htm)
- [FY 2021 MD&A](/company/UPS/mda/fy2021/): filed 2022-02-22; accession 0001090727-22-000007 (https://www.sec.gov/Archives/edgar/data/1090727/000109072722000007/ups-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 4210 Trucking & Courier Services (No Air)) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity

Macro-to-micro threads including this sector: [Money & trade](/thread/money-trade/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/UPS.md · JSON record: /company/UPS.json · verified financials: /company/UPS/financials.json / /company/UPS/financials.csv · machine TOC for the whole site: /llms.txt