000109072712/312025Q1FALSEhttp://fasb.org/us-gaap/2024#DebtCurrenthttp://fasb.org/us-gaap/2024#DebtCurrenthttp://fasb.org/us-gaap/2024#LongTermDebtAndCapitalLeaseObligationshttp://fasb.org/us-gaap/2024#LongTermDebtAndCapitalLeaseObligationshttp://fasb.org/us-gaap/2024#LongTermDebtAndCapitalLeaseObligationshttp://fasb.org/us-gaap/2024#LongTermDebtAndCapitalLeaseObligationsxbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:pureups:employeeiso4217:EURups:leaseups:credit_agreementups:defendantups:classups:voteups:segmentups:country_and_territoryiso4217:GBPiso4217:CADiso4217:HKDiso4217:CNYups:positionups:houriso4217:CADxbrli:shares00010907272025-01-012025-03-310001090727ups:SeniorNotes1.625Due2025Member2025-01-012025-03-310001090727ups:SeniorNotes1Due2028Member2025-01-012025-03-310001090727ups:SeniorNotes1.500Due2032Member2025-01-012025-03-310001090727us-gaap:CommonClassAMember2025-04-150001090727us-gaap:CommonClassBMember2025-04-1500010907272025-03-3100010907272024-12-310001090727us-gaap:CommonClassAMember2025-03-310001090727us-gaap:CommonClassAMember2024-12-310001090727us-gaap:CommonClassBMember2025-03-310001090727us-gaap:CommonClassBMember2024-12-3100010907272024-01-012024-03-3100010907272023-12-3100010907272024-03-310001090727country:USups:NextDayAirMemberups:USDomesticPackageMember2025-01-012025-03-310001090727country:USups:NextDayAirMemberups:USDomesticPackageMember2024-01-012024-03-310001090727country:USups:DeferredMemberups:USDomesticPackageMember2025-01-012025-03-310001090727country:USups:DeferredMemberups:USDomesticPackageMember2024-01-012024-03-310001090727country:USups:GroundMemberups:USDomesticPackageMember2025-01-012025-03-310001090727country:USups:GroundMemberups:USDomesticPackageMember2024-01-012024-03-310001090727country:USups:CargoMemberups:USDomesticPackageMember2025-01-012025-03-310001090727country:USups:CargoMemberups:USDomesticPackageMember2024-01-012024-03-310001090727country:USups:USDomesticPackageMember2025-01-012025-03-310001090727country:USups:USDomesticPackageMember2024-01-012024-03-310001090727us-gaap:NonUsMemberups:DomesticMemberups:InternationalPackageMember2025-01-012025-03-310001090727us-gaap:NonUsMemberups:DomesticMemberups:InternationalPackageMember2024-01-012024-03-310001090727us-gaap:NonUsMemberups:ExportMemberups:InternationalPackageMember2025-01-012025-03-310001090727us-gaap:NonUsMemberups:ExportMemberups:InternationalPackageMember2024-01-012024-03-310001090727us-gaap:NonUsMemberups:CargoMemberups:InternationalPackageMember2025-01-012025-03-310001090727us-gaap:NonUsMemberups:CargoMemberups:InternationalPackageMember2024-01-012024-03-310001090727us-gaap:NonUsMemberups:InternationalPackageMember2025-01-012025-03-310001090727us-gaap:NonUsMemberups:InternationalPackageMember2024-01-012024-03-310001090727ups:ForwardingMemberups:SupplyChainSolutionsMember2025-01-012025-03-310001090727ups:ForwardingMemberups:SupplyChainSolutionsMember2024-01-012024-03-310001090727ups:LogisticMemberups:SupplyChainSolutionsMember2025-01-012025-03-310001090727ups:LogisticMemberups:SupplyChainSolutionsMember2024-01-012024-03-310001090727us-gaap:ProductAndServiceOtherMemberups:SupplyChainSolutionsMember2025-01-012025-03-310001090727us-gaap:ProductAndServiceOtherMemberups:SupplyChainSolutionsMember2024-01-012024-03-310001090727ups:SupplyChainSolutionsMember2025-01-012025-03-310001090727ups:SupplyChainSolutionsMember2024-01-012024-03-310001090727us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:SubsequentEventMember2025-05-072025-05-070001090727us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:SubsequentEventMember2025-05-072025-05-070001090727us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMemberus-gaap:SubsequentEventMember2025-05-072025-05-070001090727us-gaap:USTreasuryAndGovernmentMember2025-03-310001090727us-gaap:CorporateDebtSecuritiesMember2025-03-310001090727us-gaap:USTreasuryAndGovernmentMember2024-12-310001090727us-gaap:CorporateDebtSecuritiesMember2024-12-310001090727ups:VariableLifeInsurancePolicyMember2025-03-310001090727ups:VariableLifeInsurancePolicyMember2024-12-310001090727us-gaap:FairValueInputsLevel1Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2025-03-310001090727us-gaap:FairValueInputsLevel3Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2025-03-310001090727ups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2025-03-310001090727us-gaap:FairValueInputsLevel1Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2025-03-310001090727us-gaap:FairValueInputsLevel3Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2025-03-310001090727ups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2025-03-310001090727us-gaap:FairValueInputsLevel1Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2025-03-310001090727us-gaap:FairValueInputsLevel3Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2025-03-310001090727ups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2025-03-310001090727us-gaap:FairValueInputsLevel1Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueInputsLevel3Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueMeasurementsRecurringMemberups:MarketableSecuritiesMember2025-03-310001090727us-gaap:FairValueInputsLevel1Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueInputsLevel3Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherLongTermInvestmentsMember2025-03-310001090727us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueMeasurementsRecurringMember2025-03-310001090727us-gaap:FairValueInputsLevel1Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2024-12-310001090727us-gaap:FairValueInputsLevel3Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2024-12-310001090727ups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2024-12-310001090727us-gaap:FairValueInputsLevel1Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-12-310001090727us-gaap:FairValueInputsLevel3Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-12-310001090727ups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2024-12-310001090727us-gaap:FairValueInputsLevel1Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2024-12-310001090727us-gaap:FairValueInputsLevel3Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2024-12-310001090727ups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2024-12-310001090727us-gaap:FairValueInputsLevel1Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:FairValueInputsLevel3Memberups:MarketableSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:FairValueMeasurementsRecurringMemberups:MarketableSecuritiesMember2024-12-310001090727us-gaap:FairValueInputsLevel1Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:FairValueInputsLevel3Memberus-gaap:OtherLongTermInvestmentsMemberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:FairValueMeasurementsRecurringMemberus-gaap:OtherLongTermInvestmentsMember2024-12-310001090727us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:FairValueMeasurementsRecurringMember2024-12-310001090727us-gaap:VehiclesMember2025-03-310001090727us-gaap:VehiclesMember2024-12-310001090727us-gaap:AirTransportationEquipmentMember2025-03-310001090727us-gaap:AirTransportationEquipmentMember2024-12-310001090727us-gaap:LandMember2025-03-310001090727us-gaap:LandMember2024-12-310001090727us-gaap:BuildingMember2025-03-310001090727us-gaap:BuildingMember2024-12-310001090727ups:BuildingAndLeaseholdImprovementsMember2025-03-310001090727ups:BuildingAndLeaseholdImprovementsMember2024-12-310001090727ups:PlantEquipmentMember2025-03-310001090727ups:PlantEquipmentMember2024-12-310001090727us-gaap:TechnologyEquipmentMember2025-03-310001090727us-gaap:TechnologyEquipmentMember2024-12-310001090727us-gaap:ConstructionInProgressMember2025-03-310001090727us-gaap:ConstructionInProgressMember2024-12-310001090727country:USus-gaap:PensionPlansDefinedBenefitMember2025-01-012025-03-310001090727country:USus-gaap:PensionPlansDefinedBenefitMember2024-01-012024-03-310001090727country:USus-gaap:PostemploymentRetirementBenefitsMember2025-01-012025-03-310001090727country:USus-gaap:PostemploymentRetirementBenefitsMember2024-01-012024-03-310001090727us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2025-01-012025-03-310001090727us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2024-01-012024-03-310001090727country:USus-gaap:PensionPlansDefinedBenefitMember2025-03-310001090727country:USus-gaap:PostemploymentRetirementBenefitsMember2025-03-310001090727us-gaap:PensionPlansDefinedBenefitMemberus-gaap:OtherNoncurrentLiabilitiesMember2025-03-310001090727us-gaap:PensionPlansDefinedBenefitMemberus-gaap:OtherNoncurrentLiabilitiesMember2024-12-310001090727us-gaap:PensionPlansDefinedBenefitMemberus-gaap:OtherCurrentLiabilitiesMember2025-03-310001090727us-gaap:PensionPlansDefinedBenefitMemberus-gaap:OtherCurrentLiabilitiesMember2024-12-310001090727us-gaap:PensionPlansDefinedBenefitMember2025-03-310001090727us-gaap:PensionPlansDefinedBenefitMember2024-12-310001090727us-gaap:OtherCurrentLiabilitiesMember2025-03-310001090727us-gaap:OtherCurrentLiabilitiesMember2024-12-310001090727ups:NationalMasterAgreementAndVariousSupplementalAgreementsMember2025-01-012025-03-310001090727ups:TeamstersMember2025-01-012025-03-310001090727ups:IndependentPilotsAssociationMember2025-01-012025-03-310001090727ups:TeamstersLocal2727Member2025-01-012025-03-310001090727ups:InternationalAssociationOfMachinistsAndAerospaceWorkersMember2025-01-012025-03-310001090727ups:USDomesticPackageMember2024-12-310001090727ups:InternationalPackageMember2024-12-310001090727ups:SupplyChainSolutionsMember2024-12-310001090727ups:USDomesticPackageMember2025-01-012025-03-310001090727ups:InternationalPackageMember2025-01-012025-03-310001090727ups:USDomesticPackageMember2025-03-310001090727ups:InternationalPackageMember2025-03-310001090727ups:SupplyChainSolutionsMember2025-03-310001090727ups:FrigoTransAndBiotechPharmaLogisticsMember2025-01-012025-03-310001090727ups:GlobalFreightForwardingRoadieAndGlobalLogisticsAndDistributionMember2025-03-310001090727ups:MainInnovationsMemberups:SupplyChainSolutionsMember2025-03-310001090727us-gaap:ComputerSoftwareIntangibleAssetMember2025-03-310001090727us-gaap:LicensingAgreementsMember2025-03-310001090727us-gaap:FranchiseRightsMember2025-03-310001090727us-gaap:CustomerListsMember2025-03-310001090727us-gaap:TradeNamesMember2025-03-310001090727ups:TrademarksPatentsAndOtherMember2025-03-310001090727us-gaap:ComputerSoftwareIntangibleAssetMember2024-12-310001090727us-gaap:LicensingAgreementsMember2024-12-310001090727us-gaap:FranchiseRightsMember2024-12-310001090727us-gaap:CustomerListsMember2024-12-310001090727us-gaap:TradeNamesMember2024-12-310001090727ups:TrademarksPatentsAndOtherMember2024-12-310001090727us-gaap:CommercialPaperMember2025-03-310001090727us-gaap:CommercialPaperMember2024-12-310001090727ups:A3900SeniorNotesDue2025Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A3900SeniorNotesDue2025Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A240SeniorNotesDue2026Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A240SeniorNotesDue2026Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A3050SeniorNotesDue2027Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A3050SeniorNotesDue2027Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A3.400seniornotesDue2029Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A3.400seniornotesDue2029Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A2.500seniornotesDue2029Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A2.500seniornotesDue2029Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A4450SeniorNotesDue2030Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A4450SeniorNotesDue2030Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A4875SeniorNotesDue2033Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A4875SeniorNotesDue2033Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A5.150SeniorNotesDue2034Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A5.150SeniorNotesDue2034Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A620SeniorNotesDue2038Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A620SeniorNotesDue2038Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A5200SeniorNotesDue2040Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A5200SeniorNotesDue2040Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A4875SeniorNotesDue2040Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A4875SeniorNotesDue2040Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A3625SeniorNotesDue2042Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A3625SeniorNotesDue2042Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A340SeniorNotesDue2046Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A340SeniorNotesDue2046Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A3750SeniorNotesDue2047Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A3750SeniorNotesDue2047Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A4.250seniornotes2049Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A4.250seniornotes2049Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A3400SeniorNotesDue2049Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A3400SeniorNotesDue2049Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A5300SeniorNotesDue2050Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A5300SeniorNotesDue2050Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A5050SeniorNotesDue2053Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A5050SeniorNotesDue2053Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A5.500SeniorNotesDue2054Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A5.500SeniorNotesDue2054Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:A5.600SeniorNotesDue2064Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:A5.600SeniorNotesDue2064Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:FloatingRateSeniorNotes4Due2049Through2074Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:FloatingRateSeniorNotes4Due2049Through2074Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:Debentures7Point62PercentDue2030Memberus-gaap:SeniorNotesMember2025-03-310001090727ups:Debentures7Point62PercentDue2030Memberus-gaap:SeniorNotesMember2024-12-310001090727ups:PoundSterlingNotes5Point5PercentDue2031Memberups:PoundSterlingNotesMember2025-03-310001090727ups:PoundSterlingNotes5Point5PercentDue2031Memberups:PoundSterlingNotesMember2024-12-310001090727ups:PoundSterlingNotes5Point125PercentDue2050Memberups:PoundSterlingNotesMember2025-03-310001090727ups:PoundSterlingNotes5Point125PercentDue2050Memberups:PoundSterlingNotesMember2024-12-310001090727ups:A1625EuroSeniorNotesDue2025Memberups:EuroSeniorNotesMember2025-03-310001090727ups:A1625EuroSeniorNotesDue2025Memberups:EuroSeniorNotesMember2024-12-310001090727ups:A1000EuroSeniorNotesDue2028Memberups:EuroSeniorNotesMember2025-03-310001090727ups:A1000EuroSeniorNotesDue2028Memberups:EuroSeniorNotesMember2024-12-310001090727ups:A1500EuroSeniorNotesDue2032Memberups:EuroSeniorNotesMember2025-03-310001090727ups:A1500EuroSeniorNotesDue2032Memberups:EuroSeniorNotesMember2024-12-310001090727ups:FacilityNotesAndBondsDue2029Through2045Member2025-03-310001090727ups:FacilityNotesAndBondsDue2029Through2045Member2024-12-310001090727ups:OtherDebtMember2025-03-310001090727ups:OtherDebtMember2024-12-310001090727ups:USCommercialPaperProgramMemberus-gaap:CommercialPaperMember2025-03-310001090727ups:ForeignCommercialPaperProgramMemberus-gaap:CommercialPaperMember2025-03-310001090727ups:A3900SeniorNotesDue2025Memberus-gaap:SeniorNotesMemberus-gaap:SubsequentEventMember2025-04-010001090727us-gaap:SubsequentEventMember2025-04-010001090727ups:RevolvingCreditFacilityExpiringIn2024Member2025-03-310001090727ups:RevolvingCreditFacilityExpiringIn2024Memberus-gaap:SecuredOvernightFinancingRateSofrMember2025-01-012025-03-310001090727ups:RevolvingCreditFacilityExpiringIn2024Memberups:AplicableMarginMember2025-01-012025-03-310001090727ups:RevolvingCreditFacilityExpiringIn2024Memberups:FederalFundsRateMember2025-01-012025-03-310001090727ups:RevolvingCreditFacilityExpiringIn2024Memberups:AdjustedTermSecuredOvernightFinancingRateSOFROvernightIndexSwapRateMember2025-01-012025-03-310001090727ups:RevolvingCreditFacilityExpiringIn2026Member2025-03-310001090727ups:RevolvingCreditFacilityExpiringIn2026Memberus-gaap:SecuredOvernightFinancingRateSofrMember2025-01-012025-03-310001090727ups:RevolvingCreditFacilityExpiringIn2026Memberus-gaap:BaseRateMember2025-01-012025-03-310001090727ups:RevolvingCreditFacilityExpiringIn2026Memberups:FederalFundsRateMember2025-01-012025-03-310001090727ups:RevolvingCreditFacilityExpiringIn2026Memberups:AdjustedTermSecuredOvernightFinancingRateSOFROvernightIndexSwapRateMember2025-01-012025-03-310001090727us-gaap:FairValueInputsLevel2Member2025-03-310001090727us-gaap:FairValueInputsLevel2Member2024-12-310001090727ups:NationalMarketsandCompetitionCommissionMember2016-08-012016-08-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-12-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-12-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassAMember2025-01-012025-03-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-01-012024-03-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassAMember2025-03-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-03-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-12-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-12-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassBMember2025-01-012025-03-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-01-012024-03-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassBMember2025-03-310001090727us-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-03-310001090727us-gaap:AdditionalPaidInCapitalMember2024-12-310001090727us-gaap:AdditionalPaidInCapitalMember2023-12-310001090727us-gaap:AdditionalPaidInCapitalMember2025-01-012025-03-310001090727us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001090727us-gaap:AdditionalPaidInCapitalMember2025-03-310001090727us-gaap:AdditionalPaidInCapitalMember2024-03-310001090727us-gaap:RetainedEarningsMember2024-12-310001090727us-gaap:RetainedEarningsMember2023-12-310001090727us-gaap:RetainedEarningsMember2025-01-012025-03-310001090727us-gaap:RetainedEarningsMember2024-01-012024-03-310001090727us-gaap:RetainedEarningsMember2025-03-310001090727us-gaap:RetainedEarningsMember2024-03-310001090727us-gaap:NoncontrollingInterestMember2024-12-310001090727us-gaap:NoncontrollingInterestMember2023-12-310001090727us-gaap:NoncontrollingInterestMember2025-01-012025-03-310001090727us-gaap:NoncontrollingInterestMember2024-01-012024-03-310001090727us-gaap:NoncontrollingInterestMember2025-03-310001090727us-gaap:NoncontrollingInterestMember2024-03-3100010907272023-01-310001090727ups:January2023ShareRepurchaseProgramMember2025-03-310001090727us-gaap:AccumulatedTranslationAdjustmentMember2024-12-310001090727us-gaap:AccumulatedTranslationAdjustmentMember2023-12-310001090727us-gaap:AccumulatedTranslationAdjustmentMember2025-01-012025-03-310001090727us-gaap:AccumulatedTranslationAdjustmentMember2024-01-012024-03-310001090727us-gaap:AccumulatedTranslationAdjustmentMember2025-03-310001090727us-gaap:AccumulatedTranslationAdjustmentMember2024-03-310001090727us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-12-310001090727us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-12-310001090727us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2025-01-012025-03-310001090727us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-01-012024-03-310001090727us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2025-03-310001090727us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2024-03-310001090727us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-12-310001090727us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-12-310001090727us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-01-012025-03-310001090727us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-01-012024-03-310001090727us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-03-310001090727us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-03-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-12-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-12-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-01-012025-03-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-01-012024-03-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-03-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-03-310001090727us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-03-310001090727us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001090727us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2025-01-012025-03-310001090727us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2025-01-012025-03-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2025-01-012025-03-310001090727us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001090727us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2025-01-012025-03-310001090727us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001090727srt:MinimumMemberups:InternationalPackage1Member2025-03-310001090727srt:MinimumMemberups:SupplyChainSolutions1Member2025-03-310001090727us-gaap:OperatingSegmentsMemberups:U.S.DomesticPackageSegmentMember2025-01-012025-03-310001090727us-gaap:OperatingSegmentsMemberups:InternationalSegmentMember2025-01-012025-03-310001090727us-gaap:OperatingSegmentsMember2025-01-012025-03-310001090727us-gaap:CorporateNonSegmentMember2025-01-012025-03-310001090727ups:InternationalSegmentMember2025-01-012025-03-310001090727ups:U.S.DomesticPackageSegmentMember2025-01-012025-03-310001090727us-gaap:OperatingSegmentsMemberups:U.S.DomesticPackageSegmentMember2025-03-310001090727us-gaap:OperatingSegmentsMemberups:InternationalSegmentMember2025-03-310001090727us-gaap:OperatingSegmentsMember2025-03-310001090727us-gaap:CorporateNonSegmentMember2025-03-310001090727us-gaap:MaterialReconcilingItemsMember2025-03-310001090727us-gaap:OperatingSegmentsMemberups:U.S.DomesticPackageSegmentMember2024-01-012024-03-310001090727us-gaap:OperatingSegmentsMemberups:InternationalSegmentMember2024-01-012024-03-310001090727us-gaap:OperatingSegmentsMember2024-01-012024-03-310001090727us-gaap:CorporateNonSegmentMember2024-01-012024-03-310001090727ups:InternationalSegmentMember2024-01-012024-03-310001090727ups:U.S.DomesticPackageSegmentMember2024-01-012024-03-310001090727us-gaap:OperatingSegmentsMemberups:U.S.DomesticPackageSegmentMember2024-03-310001090727us-gaap:OperatingSegmentsMemberups:InternationalSegmentMember2024-03-310001090727us-gaap:OperatingSegmentsMember2024-03-310001090727us-gaap:CorporateNonSegmentMember2024-03-310001090727us-gaap:MaterialReconcilingItemsMember2024-03-310001090727us-gaap:EmployeeStockOptionMember2025-01-012025-03-310001090727us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001090727currency:EURus-gaap:ForeignExchangeContractMember2025-03-310001090727currency:EURus-gaap:ForeignExchangeContractMember2024-12-310001090727currency:GBPus-gaap:ForeignExchangeContractMember2025-03-310001090727currency:GBPus-gaap:ForeignExchangeContractMember2024-12-310001090727currency:CADus-gaap:ForeignExchangeContractMember2025-03-310001090727currency:CADus-gaap:ForeignExchangeContractMember2024-12-310001090727currency:HKDus-gaap:ForeignExchangeContractMember2025-03-310001090727currency:HKDus-gaap:ForeignExchangeContractMember2024-12-310001090727currency:CNYus-gaap:ForeignExchangeContractMember2025-03-310001090727currency:CNYus-gaap:ForeignExchangeContractMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentAssetsMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentAssetsMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentAssetsMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentAssetsMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentLiabilitiesMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentLiabilitiesMember2024-12-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMember2025-03-310001090727us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMember2024-12-310001090727ups:RevenueMemberus-gaap:InterestRateContractMember2025-01-012025-03-310001090727us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2025-01-012025-03-310001090727us-gaap:InvestmentIncomeMemberus-gaap:InterestRateContractMember2025-01-012025-03-310001090727ups:RevenueMemberus-gaap:InterestRateContractMember2024-01-012024-03-310001090727us-gaap:InterestExpenseMemberus-gaap:InterestRateContractMember2024-01-012024-03-310001090727us-gaap:InvestmentIncomeMemberus-gaap:InterestRateContractMember2024-01-012024-03-310001090727ups:RevenueMemberus-gaap:ForeignExchangeContractMember2025-01-012025-03-310001090727us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMember2025-01-012025-03-310001090727us-gaap:InvestmentIncomeMemberus-gaap:ForeignExchangeContractMember2025-01-012025-03-310001090727ups:RevenueMemberus-gaap:ForeignExchangeContractMember2024-01-012024-03-310001090727us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMember2024-01-012024-03-310001090727us-gaap:InvestmentIncomeMemberus-gaap:ForeignExchangeContractMember2024-01-012024-03-310001090727ups:RevenueMember2025-01-012025-03-310001090727us-gaap:InterestExpenseMember2025-01-012025-03-310001090727us-gaap:InvestmentIncomeMember2025-01-012025-03-310001090727ups:RevenueMember2024-01-012024-03-310001090727us-gaap:InterestExpenseMember2024-01-012024-03-310001090727us-gaap:InvestmentIncomeMember2024-01-012024-03-310001090727us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMember2025-01-012025-03-310001090727us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMember2024-01-012024-03-310001090727us-gaap:CashFlowHedgingMember2025-01-012025-03-310001090727us-gaap:CashFlowHedgingMember2024-01-012024-03-310001090727us-gaap:ForeignExchangeContractMemberus-gaap:NetInvestmentHedgingMember2025-01-012025-03-310001090727us-gaap:ForeignExchangeContractMemberus-gaap:NetInvestmentHedgingMember2024-01-012024-03-310001090727us-gaap:NetInvestmentHedgingMember2025-01-012025-03-310001090727us-gaap:NetInvestmentHedgingMember2024-01-012024-03-310001090727us-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMemberus-gaap:InvestmentIncomeMember2025-01-012025-03-310001090727us-gaap:ForeignExchangeContractMemberus-gaap:NondesignatedMemberus-gaap:InvestmentIncomeMember2024-01-012024-03-310001090727us-gaap:NondesignatedMember2025-01-012025-03-310001090727us-gaap:NondesignatedMember2024-01-012024-03-310001090727ups:BusinessPortfolioReviewMember2025-01-012025-03-310001090727ups:BusinessPortfolioReviewMember2024-01-012024-03-310001090727ups:FinancialSystemsMember2025-01-012025-03-310001090727ups:FinancialSystemsMember2024-01-012024-03-310001090727ups:Transformation2.0Member2025-01-012025-03-310001090727ups:Transformation2.0Member2024-01-012024-03-310001090727ups:FitToServeMember2025-01-012025-03-310001090727ups:FitToServeMember2024-01-012024-03-310001090727ups:NetworkReconfigurationAndEfficiencyReimaginedMember2025-01-012025-03-310001090727ups:NetworkReconfigurationAndEfficiencyReimaginedMember2024-01-012024-03-310001090727ups:Transformation2.0Member2025-03-310001090727ups:FitToServeMember2023-01-012023-12-310001090727ups:FitToServeMember2025-03-310001090727ups:FitToServeMember2024-12-310001090727ups:NetworkReconfigurationAndEfficiencyReimaginedMember2025-03-310001090727ups:NetworkReconfigurationAndEfficiencyReimaginedMembersrt:MinimumMember2025-03-310001090727ups:NetworkReconfigurationAndEfficiencyReimaginedMembersrt:MaximumMember2025-03-310001090727ups:FrigoTransAndBiotechPharmaLogisticsMember2025-01-310001090727ups:FrigoTransAndBiotechPharmaLogisticsMemberups:DevelopmentAreasMember2025-01-012025-03-310001090727ups:FrigoTransAndBiotechPharmaLogisticsMember2025-01-012025-01-310001090727ups:FrigoTransAndBiotechPharmaLogisticsMemberus-gaap:CustomerRelationshipsMember2025-01-012025-01-310001090727ups:AndlauerHealthcareGroupMembersrt:ScenarioForecastMember2025-07-012025-12-31
Table of Contents

United States
Securities and Exchange Commission
Washington, D.C. 20549
_____________________________________ 
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025 or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             
Commission file number 001-15451
_____________________________________ 
g795027a09.jpg
United Parcel Service, Inc.
(Exact name of registrant as specified in its charter)
Delaware 58-2480149
(State or Other Jurisdiction of
Incorporation or Organization)
 (IRS Employer
Identification No.)
55 Glenlake Parkway N.E. ,Atlanta, Georgia30328
(Address of Principal Executive Offices) (Zip Code)
(404) 828-6000
(Registrant's telephone number, including area code)
____________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Class B common stock, par value $0.01 per shareUPSNew York Stock Exchange
1.625% Senior Notes due 2025UPS25New York Stock Exchange
1% Senior Notes due 2028UPS28New York Stock Exchange
1.500% Senior Notes due 2032UPS32New York Stock Exchange
  
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
There were 113,070,725 Class A shares, and 733,727,081 Class B shares, with a par value of $0.01 per share, outstanding at April 15, 2025.


Table of Contents

TABLE OF CONTENTS
PART I—FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II—OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.



Table of Contents

PART I. FINANCIAL INFORMATION

Cautionary Statement About Forward-Looking Statements
This report, our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the Securities and Exchange Commission contain and in the future may contain "forward-looking statements." Statements other than those of current or historical fact, and all statements accompanied by terms such as "will," "believe," "project," "expect," "estimate," "assume," "intend," "anticipate," "target," "plan," and similar terms, are intended to be forward-looking statements.
From time to time, we also include written or oral forward-looking statements in other publicly disclosed materials. Such statements may relate to our intent, belief, forecasts of, or current expectations about our strategic direction, prospects, future results, or future events; they do not relate strictly to historical or current facts. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any forward-looking statements because such statements speak only as of the date when made and the future, by its very nature, cannot be predicted with certainty.
Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. These risks and uncertainties include, but are not limited to: changes in general economic conditions in the U.S. or internationally, including as a result of changes in the global trade policy and new or increased tariffs; significant competition on a local, regional, national and international basis; changes in our relationships with our significant customers; our ability to attract and retain qualified employees; strikes, work stoppages or slowdowns by our employees; increased or more complex physical or operational security requirements; a significant cybersecurity incident, or increased data protection regulations; our ability to maintain our brand image and corporate reputation; impacts from global climate change; interruptions in or impacts on our business from natural or man-made events or disasters including terrorist attacks, epidemics or pandemics; exposure to changing economic, political, regulatory and social developments in international and emerging markets; our ability to realize the anticipated benefits from acquisitions, dispositions, joint ventures or strategic alliances; the effects of changing prices of energy, including gasoline, diesel, jet fuel and other fuels, and interruptions in supplies of these commodities; changes in exchange rates or interest rates; our ability to accurately forecast our future capital investment needs; increases in our expenses or funding obligations relating to employee health, retiree health and/or pension benefits; our ability to manage insurance and claims expenses; changes in business strategy, government regulations or economic or market conditions that may result in impairments of our assets; potential additional U.S. or international tax liabilities; increasingly stringent regulations related to climate change; potential claims or litigation related to labor and employment, personal injury, property damage, business practices, environmental liability and other matters; and other risks discussed in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2024, and subsequently filed reports. You should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations, or the occurrence of unanticipated events after the date of those statements, except as required by law.
The Company routinely posts important information, including news releases, announcements, materials provided or displayed at analyst or investor conferences, and other statements about its business and results of operations, that may be deemed material to investors on the Company’s Investors Relations website at www.investors.ups.com. The Company uses its website as a means of disclosing material, nonpublic information and for complying with the Company’s disclosure obligations under Regulation FD. Investors should monitor the Company’s Investor Relations website in addition to following the Company’s press releases, filings with the SEC, public conference calls and webcasts. We do not incorporate the contents of any website into this or any other report we file with the SEC.
1

Table of Contents

Item 1. Financial Statements
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 2025 (unaudited) and December 31, 2024 (in millions)
March 31,
2025
December 31,
2024
ASSETS
Current Assets:
Cash and cash equivalents$4,802 $6,112 
Marketable securities263 206 
Accounts receivable10,029 11,007 
Less: Allowance for credit losses(142)(136)
Accounts receivable, net 9,887 10,871 
Other current assets2,138 2,121 
Total Current Assets17,090 19,310 
Property, Plant and Equipment, Net37,250 37,179 
Operating Lease Right-Of-Use Assets4,015 4,149 
Goodwill4,691 4,300 
Intangible Assets, Net3,301 3,064 
Deferred Income Tax Assets135 112 
Other Non-Current Assets1,984 1,956 
Total Assets$68,466 $70,070 
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities:
Current maturities of long-term debt, commercial paper and finance leases$1,858 $1,838 
Current maturities of operating leases720 733 
Accounts payable5,454 6,302 
Accrued wages and withholdings3,271 3,655 
Self-insurance reserves1,009 1,086 
Accrued group welfare and retirement plan contributions1,549 1,390 
Income taxes payable
965 702 
Other current liabilities834 735 
Total Current Liabilities15,660 16,441 
Long-Term Debt and Finance Leases19,511 19,446 
Non-Current Operating Leases3,505 3,635 
Pension and Postretirement Benefit Obligations7,016 6,859 
Deferred Income Tax Liabilities3,598 3,595 
Other Non-Current Liabilities3,492 3,351 
Shareowners' Equity:
Class A common stock (114 and 121 shares issued in 2025 and 2024, respectively)
2 2 
Class B common stock (733 shares issued in 2025 and 2024)
7 7 
Additional paid-in capital 136 
Retained earnings19,939 20,882 
Accumulated other comprehensive loss(4,288)(4,309)
Deferred compensation obligations4 7 
Less: Treasury stock (0.1 shares in 2025 and 2024)
(4)(7)
Total Equity for Controlling Interests15,660 16,718 
Noncontrolling interests24 25 
Total Shareowners' Equity15,684 16,743 
Total Liabilities and Shareowners' Equity$68,466 $70,070 
See notes to unaudited, consolidated financial statements.
2

Table of Contents

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(In millions, except per share amounts)
(unaudited)
 
 Three Months Ended
 March 31,
20252024
Revenue$21,546 $21,706 
Operating Expenses:
Compensation and benefits11,827 11,639 
Repairs and maintenance732 718 
Depreciation and amortization912 898 
Purchased transportation2,730 3,246 
Fuel1,058 1,060 
Other occupancy607 564 
Other expenses2,014 1,968 
Total Operating Expenses19,880 20,093 
Operating Profit1,666 1,613 
Other Income (Expense):
Investment income and other79 118 
Interest expense(222)(195)
Total Other Income (Expense)
(143)(77)
Income Before Income Taxes1,523 1,536 
Income Tax Expense336 423 
Net Income$1,187 $1,113 
Basic Earnings Per Share$1.40 $1.30 
Diluted Earnings Per Share$1.40 $1.30 

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
(In millions)
(unaudited)
 
 Three Months Ended
 March 31,
 20252024
Net Income$1,187 $1,113 
Change in foreign currency translation adjustment, net of tax129 (125)
Change in unrealized gain (loss) on marketable securities, net of tax1 (1)
Change in unrealized gain (loss) on cash flow hedges, net of tax(139)73 
Change in unrecognized pension and postretirement benefit costs, net of tax30 30 
Comprehensive Income
$1,208 $1,090 
                
See notes to unaudited, consolidated financial statements.
3

Table of Contents

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(In millions, unaudited)
 Three Months Ended
 March 31,
 20252024
Cash Flows From Operating Activities:
Net income$1,187 $1,113 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization912 898 
Pension and postretirement benefit expense257 259 
Pension and postretirement benefit contributions(67)(50)
Self-insurance reserves1 27 
Deferred tax (benefit) expense(40)22 
Stock compensation expense (benefit)
21 (27)
Other (gains) losses22 129 
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable960 1,492 
Other assets7 55 
Accounts payable(906)(799)
Accrued wages and withholdings(370)12 
Other liabilities301 185 
Other operating activities33  
Net cash from operating activities2,318 3,316 
Cash Flows From Investing Activities:
Capital expenditures(876)(1,035)
Proceeds from disposal of businesses, property, plant and equipment65 13 
Purchases of marketable securities(90)(50)
Sales and maturities of marketable securities34 2,696 
Acquisitions, net of cash acquired(478)(44)
Other investing activities(10)(14)
Net cash (used in) from investing activities(1,355)1,566 
Cash Flows From Financing Activities:
Net change in short-term debt (1,272)
Proceeds from long-term borrowings25  
Repayments of long-term borrowings(32)(926)
Purchases of common stock(1,000) 
Issuances of common stock55 54 
Dividends(1,348)(1,348)
Other financing activities(13)(174)
Net cash used in financing activities
(2,313)(3,666)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash40 (48)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
(1,310)1,168 
Cash, Cash Equivalents and Restricted Cash:
Beginning of period6,112 3,206 
End of period$4,802 $4,374 

See notes to unaudited, consolidated financial statements.
4

Table of Contents

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES
Principles of Consolidation
The accompanying unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited, consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of March 31, 2025, and our results of operations and cash flows for the three months ended March 31, 2025 and 2024. The results reported in these unaudited, consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. The unaudited, consolidated financial statements should be read in conjunction with the audited, consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Fair Value of Financial Instruments
The carrying amounts of our cash and cash equivalents, accounts receivable, finance receivables and accounts payable approximated fair value as of March 31, 2025 and December 31, 2024. The fair values of our marketable securities are disclosed in note 5, our recognized multiemployer pension withdrawal liabilities in note 7, our short- and long-term debt in note 9 and our derivative instruments in note 15. We apply a fair value hierarchy (Levels 1, 2 and 3) when measuring and reporting items at fair value. Fair values are based on listed market prices (Level 1), when such prices are available. To the extent that listed market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations (Level 2). If listed market prices or other relevant factors are not available, inputs are developed from unobservable data reflecting our own assumptions and include situations where there is little or no market activity for the asset or liability (Level 3).
Certain investments that do not have a readily determinable fair value are measured at net asset value ("NAV") using NAV as a practical expedient, or an equivalent developed consistent with the measurement principles in Accounting Standards Codification ("ASC") Topic 820. Assets that are measured using NAV as a practical expedient are excluded from the fair value hierarchy. For further discussion on these investments, see note 1 to the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024.
Use of Estimates
The preparation of the accompanying unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of these financial statements, as well as the reported amounts of revenues and expenses during the reporting period.
Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. As a result, our accounting estimates and assumptions may change significantly over time.
Supplier Finance Programs
As part of our working capital management, certain financial institutions offer a Supply Chain Finance ("SCF") program to certain of our suppliers. During the three months ended March 31, 2025, there were no material changes to the SCF program described in note 1 to the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024.
Amounts due to our suppliers that participate in the SCF program are included in Accounts payable in our consolidated balance sheets. We have been informed by the participating financial institutions that as of March 31, 2025 and December 31, 2024, suppliers sold them $439 and $515 million, respectively, of our outstanding payment obligations.
5

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS
Adoption of New Accounting Standards
Accounting pronouncements adopted during the periods covered by the unaudited, consolidated financial statements did not have a material impact on our consolidated financial position, results of operations, cash flows or internal controls.
In November 2023, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") on segment reporting, which required new disclosures, including significant segment expenses and additional qualitative information about how segment measures are used by management. The standard became effective for us beginning with our 2024 annual reporting. The adoption did not have a significant impact on our consolidated financial position, results of operations, cash flows or internal controls.
In December 2023, the FASB issued an ASU to enhance tax-related disclosures. The standard became effective for us beginning in the first quarter of 2025 and in our annual reporting, it will require more standardized categories for tax rate reconciliation and additional detail for significant tax items. It also requires a breakdown of income taxes paid by jurisdiction exceeding 5% of total taxes and removes certain disclosure requirements for unremitted foreign earnings and uncertain tax positions. The adoption did not have a significant impact on our consolidated financial position, results of operations, cash flows or internal controls.
Accounting Standards Issued But Not Yet Effective
In November 2024, the FASB issued an ASU on expense disaggregation disclosures, which will require tabular disclosure in the notes to financial statements for specific expense categories. The standard becomes effective for us beginning with our 2027 annual report and for interim and annual periods thereafter. This ASU provides for additional expense disclosures. We are evaluating the impact to the presentation of consolidated income statements, disclosures and internal controls and do not expect this ASU to have a significant impact on our consolidated financial position or cash flows.
Other accounting pronouncements issued before, but not effective until after, March 31, 2025, are not expected to have a material impact on our consolidated financial position, results of operations, cash flows or internal controls.
6

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3. REVENUE RECOGNITION
Revenue Recognition
Substantially all of our revenues are from contracts associated with the pickup, transportation and delivery of packages and freight ("transportation services"). These services may be carried out by or arranged by us and generally occur over a short period of time. Additionally, we provide value-added logistics services to customers through our global network of distribution centers and field stocking locations.
The vast majority of our contracts with customers are for transportation services that include only one performance obligation: the transportation services themselves. We generally recognize revenue over time, based on the extent of progress towards completion of the services in the contract. All of our major businesses act as a principal in their revenue arrangements and as such, we report revenue and the associated purchased transportation costs on a gross basis within our statements of consolidated income.
Disaggregation of Revenue
Three Months Ended
 March 31,
20252024
Revenue:
Next Day Air$2,361 $2,316 
Deferred 1,049 1,156 
Ground10,709 10,762 
Cargo and Other341 32 
     U.S. Domestic Package14,460 14,266 
Domestic771 758 
Export3,444 3,350 
Cargo and Other
158 148 
    International Package4,373 4,256 
Forwarding726 1,280 
Logistics1,572 1,542 
Other415 362 
    Supply Chain Solutions2,713 3,184 
Consolidated revenue$21,546 $21,706 

7

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Contract Assets and Liabilities
During the three months ended March 31, 2025, there were no material changes to our accounting policy for contract assets and liabilities described in note 2 to the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024.
Contract assets and liabilities as of March 31, 2025 and December 31, 2024 were as follows (in millions):
Balance Sheet Location
March 31, 2025
December 31, 2024
Contract Assets:
Revenue related to in-transit packagesOther current assets$276 $307 
Contract Liabilities:
Short-term advance payments from customersOther current liabilities$28 $13 
Long-term advance payments from customersOther non-current liabilities$46 $27 
Accounts Receivable, Net
During the three months ended March 31, 2025, there were no material changes to our accounting policy for accounts receivable or how we estimate expected credit losses, as described in note 2 to the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024.
Our allowance for credit losses as of March 31, 2025 and December 31, 2024 was $142 and $136 million, respectively. Amounts for credit losses charged to expense, before recoveries, during each of the three months ended March 31, 2025 and 2024 were $69 and $73 million, respectively.
8

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4. STOCK-BASED COMPENSATION
During the three months ended March 31, 2025, there were no material changes to our stock-based compensation plans described in note 13 to the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024. There were no awards granted under our primary equity-classified stock compensation awards, which include the UPS Long-Term Incentive Performance Award program and the UPS Stock Option program, in the first quarter of 2025.
Pre-tax compensation expense (benefit) for equity-classified stock compensation awards recognized in Compensation and benefits in our statements of consolidated income for the three months ended March 31, 2025 and 2024 was $21 and $(27) million, respectively.
As of March 31, 2025 and December 31, 2024, UPS Management Incentive Award Program ("MIP") awards were classified as a compensation obligation within Accrued wages and withholdings in our consolidated balance sheets. Substantially all MIP awards are settled in cash, subject to participant elections. Cash payments related to the 2024 MIP and 2023 MIP are reflected as activity in Accrued wages and withholdings in our statements of consolidated cash flows for the three months ended March 31, 2025 and 2024, respectively.
On May 7, 2025, the Compensation and Human Capital Committee of the Board (the "Compensation Committee") approved the 2025 LTIP award performance targets. The performance targets for the 2025 LTIP award are equally weighted between adjusted revenue growth and non-GAAP adjusted operating return on invested capital (“ROIC”). Restricted performance units (“RPUs”) that will be issued under the 2025 LTIP vest at the end of a three-year performance period, assuming continued employment with the Company (except in the case of death, disability or retirement, in which case immediate vesting occurs on a prorated basis). The final number of RPUs earned will then be subject to adjustment based on total shareholder return relative to the Standard & Poor's 500 Index. The grant date fair value is not yet available and will be determined using a Monte Carlo model.
Additionally, on May 7, 2025, the Compensation Committee approved special awards of time-based restricted stock units (“RSUs”) for certain of the Company’s employees, excluding the Chief Executive Officer. The RSUs that will be issued will be valued using the closing New York Stock Exchange ("NYSE") price of May 9, 2025 and will generally vest as follows: 25% on May 9, 2026; 25% on May 9, 2027; and 50% on May 9, 2028.
9

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5. MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS
The following is a summary of marketable securities classified as trading and available for sale as of March 31, 2025 and December 31, 2024 (in millions):
CostUnrealized
Gains
Unrealized
Losses
Estimated
Fair Value
March 31, 2025:
Current trading marketable securities:
Equity securities$3 $ $(1)$2 
Total trading marketable securities3  (1)2 
Current available-for-sale securities:
U.S. government and agency debt securities138 1  139 
Corporate debt securities122   122 
Total available-for-sale marketable securities260 1  261 
Total current marketable securities$263 $1 $(1)$263 
 CostUnrealized
Gains
Unrealized
Losses
Estimated
Fair Value
December 31, 2024:
Current trading marketable securities:
Equity securities$3 $ $ $3 
Total trading marketable securities3   3 
Current available-for-sale securities:
U.S. government and agency debt securities165  (1)164 
Corporate debt securities39   39 
Total available-for-sale marketable securities204  (1)203 
Total current marketable securities$207 $ $(1)$206 
Investment Impairments
We have concluded that no material impairment losses existed within marketable securities as of March 31, 2025. In making this determination, we considered the financial condition and prospects of each issuer, the magnitude of the losses compared with the cost, the probability that we will be unable to collect all amounts due according to the contractual terms of the security, the credit rating of the security and our ability and intent to hold these investments until the anticipated recovery in market value occurs.
10

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Maturity Information
The amortized cost and estimated fair value of marketable securities as of March 31, 2025 by contractual maturity are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations with or without prepayment penalties.
CostEstimated
Fair Value
Due in one year or less$253 $254 
Due after one year through three years7 7 
Due after three years through five years  
Due after five years  
260 261 
Equity securities3 2 
$263 $263 
Non-Current Investments
We hold non-current investments that are reported within Other Non-Current Assets in our consolidated balance sheets. Cash paid for these investments is included in Other investing activities in our statements of consolidated cash flows.
Equity method investments: Equity securities accounted for under the equity method had a carrying value of $283 and $304 million as of March 31, 2025 and December 31, 2024, respectively. During the first quarter, we recorded a $19 million asset impairment charge within Investment income and other in our statement of consolidated income related to an equity method investment.
Other equity securities: Certain equity securities that do not have readily determinable fair values are reported in accordance with the measurement alternative in ASC Topic 321. Equity securities accounted for under the measurement alternative had a carrying value of $42 million as of March 31, 2025 and December 31, 2024.
Other investments: We hold an investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan. The investment is recorded at fair market value of $19 million as of March 31, 2025 and December 31, 2024.
11

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Fair Value Measurements
Marketable securities valued utilizing Level 1 inputs include active exchange-traded equity investments and equity index funds, and most U.S. government debt securities, as these securities all have quoted prices in active markets. Marketable securities valued utilizing Level 2 inputs include equity securities, asset-backed securities, corporate bonds and municipal bonds. These securities are valued using market corroborated pricing, matrix pricing or other models that utilize observable inputs such as yield curves.
The following table presents information about our investments measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions):
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total 
March 31, 2025:
Marketable Securities:
U.S. government and agency debt securities$139 $ $ $139 
Corporate debt securities115 7  122 
Equity securities 2  2 
Total marketable securities254 9  263 
Other non-current investments(1)
 19  19 
Total$254 $28 $ $282 
(1)    Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
December 31, 2024:
Marketable Securities:
U.S. government and agency debt securities$164 $ $ $164 
Corporate debt securities25 14  39 
Equity securities 3  3 
Total marketable securities189 17  206 
Other non-current investments(1)
 19  19 
Total$189 $36 $ $225 
(1)    Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.
There were no transfers of investments into or out of Level 3 during the three months ended March 31, 2025 or 2024.

12

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of March 31, 2025 and December 31, 2024 consisted of the following (in millions):
20252024
Vehicles$11,954 $11,912 
Aircraft23,751 23,768 
Land2,114 2,104 
Buildings6,851 6,714 
Building and leasehold improvements5,716 5,601 
Plant equipment18,731 18,495 
Technology equipment2,781 2,735 
Construction-in-progress1,824 1,967 
73,722 73,296 
Less: Accumulated depreciation and amortization(36,472)(36,117)
Property, Plant and Equipment, Net$37,250 $37,179 
Property, plant and equipment purchased on account was $160 and $227 million as of March 31, 2025 and December 31, 2024, respectively.
There were no material impairment charges for the three months ended March 31, 2025 or 2024. We will continue to monitor our long-lived asset groups for impairment.
Our Network of the Future initiative is intended to enhance our efficiency through automation and operational sort consolidation in our U.S. Domestic network. In connection with our plan for lower volumes from our largest customer, we began our Network Reconfiguration initiative, which is an expansion of Network of the Future and will lead to a reduction in the number of buildings, vehicles and aircraft in our network. As of March 31, 2025, accelerated depreciation and early retirements were not material. We continue to evaluate our network and it is reasonably possible that these plans will continue to result in revisions to our estimates of the useful lives and salvage values of certain of our long-lived assets. Any revision to these plans could accelerate depreciation expense and lead to the recognition of charges related to early retirements in future periods. For additional information, see note 17 to the unaudited, consolidated financial statements.
13

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7. EMPLOYEE BENEFIT PLANS
Company-Sponsored Benefit Plans
Information about the net periodic benefit cost for our company-sponsored pension and postretirement benefit plans for the three months ended March 31, 2025 and 2024 is as follows (in millions):
 U.S. Pension BenefitsU.S. Postretirement
Medical Benefits
International
Pension Benefits
202520242025202420252024
Three Months Ended March 31:
Service cost$281 $310 $4 $5 $9 $11 
Interest cost679 644 27 27 16 17 
Expected return on assets(777)(771)(1)(1)(20)(21)
Amortization of prior service cost39 38     
Net periodic benefit cost
$222 $221 $30 $31 $5 $7 
Service cost and the remaining components of net periodic benefit cost are presented within Compensation and benefits and Investment income and other, respectively, in our statements of consolidated income.
Our Network of the Future initiative is intended to enhance our efficiency through automation and operational sort consolidation in our U.S. Domestic network. In connection with our plan for lower volumes from our largest customer, we began our Network Reconfiguration initiative, which is an expansion of Network of the Future. In connection therewith, we expect to permanently close certain facilities and reduce our operational workforce during 2025. As a result, certain U.S. pension and postretirement benefit plan obligations and assets may be subject to remeasurement at an interim date. We are not yet able to estimate the timing and will continue to monitor the impact of these uncertainties on our projected benefit obligation in accordance with ASC Topic 715. For additional information, see note 17 to the unaudited, consolidated financial statements.
During the three months ended March 31, 2025, we contributed $13 million and $54 million to our company-sponsored pension and U.S. postretirement medical benefit plans, respectively. We expect to contribute approximately $1.2 billion and $167 million over the remainder of the year to our company-sponsored pension and U.S. postretirement medical benefit plans, respectively.
Multiemployer Benefit Plans
We contribute to a number of multiemployer defined benefit and health and welfare plans under the terms of collective bargaining agreements that cover our union-represented employees. Our current collective bargaining agreements set forth the contribution rates to the plans that we participate in, and we are in compliance with these contribution rates.
As of March 31, 2025 and December 31, 2024, we had $802 and $804 million, respectively, recorded in Other Non-Current Liabilities in our consolidated balance sheets and $9 million as of both March 31, 2025 and December 31, 2024 recorded in Other current liabilities in our consolidated balance sheets associated with our previous withdrawal from the New England Teamsters and Trucking Industry Pension Fund. This liability is payable in equal monthly installments over a remaining term of approximately 38 years. Based on the borrowing rates currently available to us for long-term financing of a similar maturity, the fair value of this withdrawal liability as of March 31, 2025 and December 31, 2024 was $653 and $651 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.
As of March 31, 2025 and December 31, 2024, we had $17 and $19 million, respectively, recorded in Other current liabilities in our consolidated balance sheets associated with our 2024 withdrawal from the District 9 International Association of Machinists and Aerospace Workers Pension Trust. The withdrawal liability was settled on April 1, 2025.
UPS was a contributing employer to the Central States Pension Fund ("CSPF") until 2007, at which time UPS withdrew from the CSPF. Under a collective bargaining agreement with the International Brotherhood of Teamsters ("Teamsters"), UPS agreed to provide coordinating benefits in the UPS/IBT Full Time Employee Pension Plan ("UPS/IBT Plan") for UPS participants whose last employer was UPS and who had not retired as of January 1, 2008 ("the UPS Transfer Group") in the event that benefits are reduced by the CSPF consistent with the terms of our withdrawal agreement with the CSPF. Under this
14

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


agreement, benefits to the UPS Transfer Group cannot be reduced without our consent and can only be reduced in accordance with law.
In the event CSPF were to become insolvent, CSPF benefits would be reduced to the legally permitted Pension Benefit Guaranty Corporation limits, triggering the coordinating benefits provision in the collective bargaining agreement.
We account for the potential obligation to pay coordinating benefits under ASC Topic 715, which requires us to provide a best estimate of various actuarial assumptions in measuring our pension benefit obligation at the December 31 measurement date. As of December 31, 2024, our best estimate of coordinating benefits that may be required to be paid by the UPS/IBT Plan was immaterial.
The value of our estimate for future coordinating benefits will continue to be influenced by a number of factors, including interpretations of the law, future legislative actions, actuarial assumptions and the ability of the CSPF to sustain its long-term commitments. Actual events may result in a change in our best estimate of the projected benefit obligation. We will continue to assess the impact of these uncertainties in accordance with ASC Topic 715.
Collective Bargaining Agreements
We have approximately 314,000 employees in the U.S. employed under a national master agreement and various supplemental agreements with local unions affiliated with the Teamsters which runs through July 31, 2028.
We have approximately 10,000 employees in Canada employed under a collective bargaining agreement with the Teamsters which runs through July 31, 2025.
We have approximately 3,300 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association. This collective bargaining agreement becomes amendable September 1, 2025.
We have approximately 1,900 airline mechanics who are covered by a collective bargaining agreement with Teamsters Local 2727 which becomes amendable November 1, 2026. In addition, approximately 3,000 of our auto and maintenance mechanics who are not employed under agreements with the Teamsters are employed under a collective bargaining agreement with the International Association of Machinists and Aerospace Workers. This collective bargaining agreement becomes amendable July 31, 2029.
15

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8. GOODWILL AND INTANGIBLE ASSETS
The following table indicates the allocation of goodwill as of March 31, 2025 and December 31, 2024 (in millions):
U.S. Domestic
Package
International
Package
Supply Chain SolutionsConsolidated
December 31, 2024:$847 $487 $2,966 $4,300 
Acquired  342 342 
Currency / Other 9 40 49 
March 31, 2025:$847 $496 $3,348 $4,691 
During the three months ended March 31, 2025:
We recorded an increase in goodwill of $342 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 will be reported in Supply Chain Solutions as part of our Healthcare Logistics and Distribution ("HLD") reporting unit.
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 March 31, 2025, none of our reporting units had indications that an impairment was more likely than not. Approximately $1.1 billion of our consolidated goodwill balance of $4.7 billion is represented by our Global Freight Forwarding, Roadie and Global Logistics and Distribution reporting units which, based on our most recent 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.
During the first quarter of 2025, our Mail Innovations reporting unit experienced cost increases inconsistent with our expectations due to increases in purchased transportation rates which resulted from the expiration of our previous contract with our primary vendor. We are evaluating additional vendors for this business. We are also addressing the revenue quality in the business. 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.
Actual reporting unit performance, revisions to our forecasts of future performance, market factors, changes in estimates or assumptions in future impairment testing, or a combination thereof could result in an impairment charge in one or more of our reporting units during a future period.

16

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


The following is a summary of intangible assets as of March 31, 2025 and December 31, 2024 (in millions):
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Value
March 31, 2025:
Capitalized software$6,267 $(4,315)$1,952 
Licenses88 (20)68 
Franchise rights388 (60)328 
Customer relationships837 (226)611 
Trade name110 (29)81 
Trademarks, patents and other373 (116)257 
Amortizable intangible assets$8,063 $(4,766)$3,297 
Indefinite-lived intangible assets4 — 4 
Total Intangible Assets
$8,067 $(4,766)$3,301 
December 31, 2024:
Capitalized software$6,088 $(4,159)$1,929 
Licenses30 (12)18 
Franchise rights348 (55)293 
Customer relationships677 (206)471 
Trade name109 (26)83 
Trademarks, patents and other369 (103)266 
Amortizable intangible assets$7,621 $(4,561)$3,060 
Indefinite-lived intangible assets4 — 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 March 31, 2025, we recorded an impairment charge of $32 million ($24 million after tax) within Other Expenses in our statement of consolidated income. This charge represented software impairment associated with one of our Supply Chain Solutions businesses.
For the three months ended March 31, 2024, we recorded impairment charges of $48 million ($35 million after tax) within Other Expenses in our statement of consolidated income. These charges represented trade name and capitalized software license impairments.
17

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9. DEBT AND FINANCING ARRANGEMENTS
The carrying value of our outstanding debt obligations as of March 31, 2025 and December 31, 2024 consisted of the following (in millions):
Principal
Amount
Carrying Value
Maturity20252024
Commercial paper$ $ $ 
Fixed-rate senior notes:
3.900% senior notes
1,000 20251,000 1,000 
2.400% senior notes
500 2026499 499 
3.050% senior notes
1,000 2027997 997 
3.400% senior notes
750 2029748 748 
2.500% senior notes
400 2029398 398 
4.450% senior notes
750 2030746 746 
4.875% senior notes
900 2033895 895 
5.150% senior notes
900 2034894 894 
6.200% senior notes
1,500 20381,486 1,486 
5.200% senior notes
500 2040494 495 
4.875% senior notes
500 2040492 492 
3.625% senior notes
375 2042369 369 
3.400% senior notes
500 2046492 492 
3.750% senior notes
1,150 20471,138 1,138 
4.250% senior notes
750 2049743 743 
3.400% senior notes
700 2049689 689 
5.300% senior notes
1,250 20501,232 1,232 
5.050% senior notes
1,100 20531,083 1,083 
5.500% senior notes
1,100 20541,087 1,087 
5.600% senior notes
600 2064590 590 
Floating-rate senior notes:
Floating-rate senior notes1,773 2049-20741,753 1,755 
Debentures:
7.620% debentures
276 2030279 279 
Pound Sterling notes:
5.500% notes
86 203186 83 
5.125% notes
588 2050560 544 
Euro senior notes:
1.625% senior notes
757 2025757 731 
1.000% senior notes
541 2028540 521 
1.500% senior notes
541 2032540 521 
Finance lease obligations (see note 10)
459 2025-2118459 455 
Facility notes and bonds320 2029-2045320 320 
Other debt3 2025-20283 2 
Total debt$21,569 21,369 21,284 
Less: current maturities(1,858)(1,838)
Long-term debt$19,511 $19,446 
    

18

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Commercial Paper
We are authorized to borrow up to $10.0 billion under a U.S. commercial paper program and €5.0 billion (in a variety of currencies) under a European commercial paper program. There was no commercial paper outstanding as of March 31, 2025. The amount of commercial paper outstanding under these programs in 2025 is expected to fluctuate.
Debt Classification
We have classified certain floating-rate senior notes that are redeemable at the option of the note holder as long-term debt in our consolidated balance sheets, due to our intent and ability to refinance the debt if the put option is exercised.
Debt Repayments
On April 1, 2025, our 3.900% Senior Notes with a principal balance of $1.0 billion matured and were repaid in full.
Other Arrangements
Subsequent to March 31, 2025, we entered into six new aircraft leases which we expect to be treated as finance leases. The structure of this arrangement requires a parent company guarantee of approximately $430 million and will be accounted for under ASC Topic 460.
Sources of Credit
We maintain two credit agreements with a consortium of banks. The first of these agreements provides revolving credit facilities of $1.0 billion, and expires on November 24, 2025. Amounts outstanding under this agreement bear interest at a periodic fixed rate equal to the term SOFR rate, plus 0.10% per annum and an applicable margin based on our then-current credit rating. The applicable margin from the credit pricing grid as of March 31, 2025 was 0.70%. Alternatively, a fluctuating rate of interest equal to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in the United States; (2) the Federal Funds effective rate plus 0.50%; or (3) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00%, may be used at our discretion.
The second agreement provides revolving credit facilities of $2.0 billion, and expires on November 25, 2029. Amounts outstanding under this facility bear interest at a periodic fixed rate equal to the term SOFR rate plus 0.10% per annum and an applicable margin based on our then-current credit rating. The applicable margin from the credit pricing grid as of March 31, 2025 was 0.70%. Alternatively, a fluctuating rate of interest equal to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in the United States; (2) the Federal Funds effective rate plus 0.50%; or (3) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00%, plus an applicable margin, may be used at our discretion.
If the credit ratings established by Standard & Poor's and Moody's differ, the higher rating will be used, except in cases where the lower rating is two or more levels lower. In these circumstances, the rating one step below the higher rating will be used. We are also able to request advances under these facilities based on competitive bids for the applicable interest rate.
There were no amounts outstanding under these facilities as of March 31, 2025.
Debt Covenants
Our existing debt instruments and credit facilities subject us to certain financial covenants. As of March 31, 2025, and for all prior periods presented, we have satisfied these financial covenants. These covenants limit the amount of secured indebtedness that we may incur, and limit the amount of attributable debt in sale-leaseback transactions, to 10% of net tangible assets. As of March 31, 2025, 10% of net tangible assets was equivalent to $4.5 billion and we had $40 million in covered sale-leaseback transactions and no secured indebtedness outstanding. We do not expect these covenants to have a material impact on our liquidity.
Fair Value of Debt    
Based on the borrowing rates currently available to us for long-term debt with similar terms and maturities, the fair value of long-term debt, including current maturities, was approximately $20.4 and $20.3 billion as of March 31, 2025 and December 31, 2024, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of all of our debt instruments.
19

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10. LEASES
We have finance and operating leases for real estate (primarily package centers, airport facilities and warehouses), aircraft and engines, information technology equipment, vehicles and various other equipment used in operating our business. Certain leases for real estate and aircraft contain options to purchase, extend or terminate the lease.
We recognize a right-of-use asset and lease obligation for all leases greater than twelve months, inclusive of renewal or purchase options that are reasonably certain to be exercised. In the first quarter of 2025, we entered into a sale-leaseback transaction involving a new lease asset class, data centers, and elected to account for the lease and non-lease components separately. For all other lease arrangements, we continue to account for lease and non-lease components as a single lease component.
Aircraft
In addition to the aircraft that we own, we charter aircraft to handle package and cargo volume on certain international trade lanes and domestic routes. Due to the nature of these agreements, primarily being that either party can cancel the agreement with short notice, we have classified these as short-term leases. A majority of our long-term aircraft operating leases are operated by a third party to handle package and cargo volume in geographic regions where, due to government regulations, we are restricted from operating an airline.
We also have long-term finance leases for aircraft that we operate. Subsequent to March 31, 2025, we entered into six new aircraft leases which we expect will be treated as finance leases.
Transportation equipment and other equipment
We enter into both long-term and short-term leases for transportation equipment to supplement our capacity or meet contractual demands. Some of these assets are leased on a month-to-month basis and the leases can be terminated without penalty. We also enter into equipment leases to increase capacity during periods of high demand. These leases are treated as short-term as the cumulative right of use is less than 12 months over the term of the contract.
Some of our transportation and technology equipment leases require us to make additional lease payments based on the underlying usage of the assets. Due to the variable nature of these costs, these are expensed as incurred and are not included in the right-of-use lease asset and associated lease obligation.
The components of lease expense for the three months ended March 31, 2025 and 2024 were as follows (in millions):
20252024
Operating lease costs$231 $231 
Finance lease costs:
Amortization of assets35 35 
Interest on lease liabilities7 5 
Total finance lease costs42 40 
Variable lease costs72 76 
Short-term lease costs212 199 
Total lease costs(1)
$557 $546 
(1)    This table excludes sublease income as it was not material for the three months ended March 31, 2025 and 2024.
In addition to the lease costs disclosed in the table above, we monitor all lease categories for any indicators that the carrying value of the assets may not be recoverable. We recognized certain immaterial impairments, primarily within our Supply Chain Solutions segment, during the three months ended March 31, 2025. There were no impairments recognized during the three months ended March 31, 2024.
20

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Supplemental information related to leases and location within our consolidated balance sheets is as follows (in millions, except lease term and discount rate):
March 31,
2025
December 31,
2024
Operating Leases:
Operating lease right-of-use assets$4,015 $4,149 
Current maturities of operating leases$720 $733 
Non-current operating leases3,505 3,635 
Total operating lease obligations$4,225 $4,368 
Finance Leases:
Property, plant and equipment, net$644 $657 
Current maturities of long-term debt, commercial paper and finance leases$98 $104 
Long-term debt and finance leases361 351 
Total finance lease obligations$459 $455 

Supplemental cash flow information related to leases is as follows (in millions):
Three Months Ended
 March 31,
20252024
Cash paid for amounts included in measurement of obligations:
Operating cash flows from operating leases$238 $227 
Operating cash flows from finance leases3 3 
Financing cash flows from finance leases30 26 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$16 $151 
Finance leases32 14 

21

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Maturities of lease obligations as of March 31, 2025 were as follows (in millions):
Finance LeasesOperating Leases
2025$93 $637 
202693 799 
202761 689 
202854 528 
202943 408 
Thereafter222 1,989 
Total lease payments566 5,050 
Less: Imputed interest(107)(825)
Total lease obligations459 4,225 
Less: Current obligations(98)(720)
Long-term lease obligations$361 $3,505 
As of March 31, 2025, we had $562 million of additional leases which had not commenced. These leases will commence later in 2025 through 2026 when we are granted access to the property, such as when leasehold improvements are completed by the lessor or a certificate of occupancy is obtained.
22

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11. LEGAL PROCEEDINGS AND CONTINGENCIES
We are involved in a number of judicial proceedings and other matters arising from the conduct of our business.
Although there can be no assurances as to the ultimate outcome, we have generally denied, or believe we have meritorious defenses and will deny, liability in pending matters, including (except as may be otherwise noted herein) the matters described below, and we intend to vigorously defend each matter. We accrue amounts associated with judicial proceedings and other contingencies when and to the extent a loss becomes probable and can be reasonably estimated. The actual costs of resolving legal proceedings may be substantially higher or lower than the amounts accrued on those claims.
For matters as to which we are not able to estimate a possible loss or range of losses, we are not able to determine whether any such loss will have a material impact on our operations or financial condition. For these matters, we have described the reasons that we are unable to estimate a possible loss or range of losses.
Judicial Proceedings
We are a defendant in a number of lawsuits filed in state and federal courts containing various class action allegations under state wage-and-hour laws. We do not believe that any loss associated with any such matter will have a material impact on our financial condition, results of operations or liquidity.
In July 2023, Baker v. United Parcel Service, Inc. (DE) and United Parcel Service, Inc. (OH) was certified as a class action in federal court in the Eastern District of Washington. The plaintiff in this matter alleges that UPS violated the Uniformed Services Employment and Reemployment Rights Act. We are vigorously defending ourselves in this matter and believe that we have a number of meritorious defenses, and there are unresolved questions of law and fact that could be important to the ultimate resolution of this matter. Accordingly, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity.
Other Matters
In August 2016, Spain’s National Markets and Competition Commission ("CNMC") announced an investigation into 10 companies in the commercial delivery and parcel industry, including UPS, related to alleged nonaggression agreements to allocate customers. In May 2017, we received a Statement of Objections issued by the CNMC. In July 2017, we received a Proposed Decision from the CNMC. In March 2018, the CNMC adopted a final decision, finding an infringement and imposing an immaterial fine on UPS. We appealed the decision. In December 2022, a trial court ruled against us. We have filed an appeal before the Spanish Supreme Court. We are vigorously defending ourselves and believe that we have a number of meritorious defenses. There are also unresolved questions of law that could be important to the ultimate resolution of this matter. We do not believe that any loss from this matter would have a material impact on our financial condition, results of operations or liquidity.
The Company has received a letter from the San Bernardino County District Attorney’s Office, in cooperation with certain other California District Attorneys, notifying the Company of an investigation into alleged violations with respect to the management and disposal of hazardous waste in California. Following discussions with those parties, the Company expects to settle this matter for an immaterial amount and without admitting or denying the accusations.
We are a party to various other matters that arose in the normal course of business. These include disputes with government authorities in various jurisdictions over the imposition of duties, fines, taxes and assessments from time to time. We are vigorously defending ourselves and believe that we have a number of meritorious defenses in these disputes. There are also unresolved questions of law that could be important to the ultimate resolution of these disputes. Accordingly, we are not able to estimate a possible loss or range of losses that may result from these disputes or to determine whether such losses, if any, would have a material impact on our financial condition, results of operations or liquidity.
We do not believe that the eventual resolution of any other matters (either individually or in the aggregate), including any reasonably possible losses in excess of current accruals, will have a material impact on our operations or financial condition.
23

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12. SHAREOWNERS' EQUITY
Capital Stock, Additional Paid-In Capital, Retained Earnings and Noncontrolling Interests
We are authorized to issue two classes of common stock, which are distinguished from each other primarily by their respective voting rights. Class A shares of UPS are entitled to 10 votes per share, whereas class B shares are entitled to one vote per share. Class A shares are primarily held by UPS employees and retirees, as well as trusts and descendants of the Company's founders, and these shares are fully convertible into class B shares at any time. Class B shares are publicly traded on the New York Stock Exchange under the symbol "UPS". Class A and B shares both have a $0.01 par value and, as of March 31, 2025, there were 4.6 billion class A shares and 5.6 billion class B shares authorized to be issued. Additionally, there are 200 million preferred shares authorized to be issued, with a par value of $0.01 per share. As of March 31, 2025, no preferred shares had been issued.
The following is a rollforward of our common stock, additional paid-in capital, retained earnings and non-controlling interests accounts for the three months ended March 31, 2025 and 2024 (in millions, except per share amounts):
Three Months Ended March 31:20252024
SharesDollarsSharesDollars
Class A Common Stock:
Balance at beginning of period121 $2 127 $2 
Stock award plans  2  
Common stock issuances1    
Conversions of class A to class B common stock(8) (3) 
Class A shares issued at end of period114 $2 126 $2 
Class B Common Stock:
Balance at beginning of period733 $7 726 $7 
Common stock purchases(8)   
Conversions of class A to class B common stock8  3  
Class B shares issued at end of period733 $7 729 $7 
Additional Paid-In Capital:
Balance at beginning of period$136 $ 
Stock award plans39 (118)
Common stock purchases(262) 
Common stock issuances96 118 
Other
(9) 
Balance at end of period$ $ 
Retained Earnings:
Balance at beginning of period$20,882 $21,055 
Net income attributable to controlling interests1,187 1,113 
Dividends ($1.64 and $1.63 per share) (1)
(1,392)(1,414)
Common stock purchases(738) 
Other (2)
 (73)
Balance at end of period$19,939 $20,681 
Noncontrolling Interests:
Balance at beginning of period$25 $8 
Change in non-controlling interest(1)16 
Balance at end of period$24 $24 
(1)    The dividend per share amount is the same for both class A and class B common stock. Dividends include $44 and $66 million as of March 31, 2025 and 2024, respectively, that were settled in shares of class A common stock.
(2)    Includes adjustments related to certain stock-based awards.
24

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


In January 2023, the Board of Directors approved a share repurchase authorization for $5.0 billion of class A and class B common stock. This share repurchase authorization has no expiration date. We repurchased 8.6 million shares of class B common stock for $1.0 billion under the share repurchase program during the three months ended March 31, 2025. We did not repurchase any shares under the share repurchase program during the three months ended March 31, 2024.
As of March 31, 2025, we had $1.3 billion available under the share repurchase authorization. We do not anticipate further share repurchases in 2025.
Accumulated Other Comprehensive Income (Loss)
We recognize activity in other comprehensive income (loss) for foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale securities, unrealized gains and losses from derivatives that qualify as hedges of cash flows and unrecognized pension and postretirement benefit costs. The activity in accumulated other comprehensive income (loss) for the three months ended March 31, 2025 and 2024 was as follows (in millions):
Three Months Ended March 31:20252024
Foreign Currency Translation Gain (Loss), Net of Tax:
Balance at beginning of period$(1,586)$(1,248)
Translation adjustment (net of tax effect of $(1) and $6)
129 (125)
Balance at end of period(1,457)(1,373)
Unrealized Gain (Loss) on Marketable Securities, Net of Tax:
Balance at beginning of period(1)(2)
Current period changes in fair value (net of tax effect of $0 and $0)
1 (1)
Balance at end of period (3)
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax:
Balance at beginning of period91 (76)
Current period changes in fair value (net of tax effect of $(30) and $33)
(96)103 
Reclassification to earnings (net of tax effect of $(13) and $(10))
(43)(30)
Balance at end of period(48)(3)
Unrecognized Pension and Postretirement Benefit Costs, Net of Tax:
Balance at beginning of period(2,813)(2,432)
Reclassification to earnings (net of tax effect of $9 and $8)
30 30 
Balance at end of period(2,783)(2,402)
Accumulated other comprehensive income (loss) at end of period$(4,288)$(3,781)

25

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Detail of the gains (losses) reclassified from accumulated other comprehensive income (loss) to the statements of consolidated income for the three months ended March 31, 2025 and 2024 is as follows (in millions):
Amount Reclassified from AOCI(1)
Affected Line Item in the Income Statement
Three Months Ended March 31:20252024
Unrealized Gain (Loss) on Cash Flow Hedges:
Interest rate contracts$(1)$(1)Interest expense
Foreign currency exchange contracts57 41 Revenue
Income tax (expense) benefit(13)(10)Income tax expense
Impact on net income43 30 Net income
Unrecognized Pension and Postretirement Benefit Costs:
Prior service costs(39)(38)Investment income and other
Income tax (expense) benefit9 8 Income tax expense
Impact on net income(30)(30)Net income
Total amount reclassified for the period$13 $ Net income
(1)    Accumulated other comprehensive income (loss)
26

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 13. SEGMENT INFORMATION
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. Global small package operations represent our most significant business and are broken down into regional operations around the world. Regional operations managers are responsible for both domestic and export products within their geographic area. Supply Chain Solutions comprises the results of non-reportable operating segments that do not meet the quantitative and qualitative criteria of a reportable segment as defined under ASC Topic 280.
U.S. Domestic Package
U.S. Domestic Package operations include the time-definite delivery of letters, documents and packages throughout the United States.
During the quarter ended December 31, 2024, based on a change in our management reporting structure, we began presenting our U.S. air cargo results within our U.S. Domestic Package segment. This activity was previously reported within Supply Chain Solutions. This change aligns with how our chief operating decision maker reviews operating results to assess performance and allocate resources. Prior periods have been recast to conform to current presentation with no changes to consolidated results.
International Package
International Package operations include delivery to more than 200 countries and territories worldwide, including shipments wholly outside the United States, as well as shipments with either origin or destination outside the United States. International Package includes our operations in Europe, the Indian sub-continent, Middle East and Africa ("EMEA"), Canada and Latin America (together "Americas") and Asia.
Supply Chain Solutions
Supply Chain Solutions includes our Forwarding, Logistics, digital and other businesses. Our Forwarding and Logistics businesses provide services in more than 200 countries and territories worldwide and include international air and ocean freight forwarding, customs brokerage, mail services, healthcare logistics, distribution and post-sales services. Our digital businesses leverage technology to enable a range of on-demand services such as same-day delivery, end-to-end return services and integrated supply chain and high-value shipment insurance solutions.
Segment information
We consider our Chief Executive Officer to be our chief operating decision maker ("CODM"). The CODM is responsible for setting the Company's strategic direction, managing overall operations, and is the main point of communication between the Board of Directors and key operational personnel within the organization.
The CODM utilizes operating profit as a primary measure of segment performance because it reflects the underlying business performance and provides the CODM with a basis for making resource allocation decisions. Operating profit is defined as income before investment income and other, interest expense and income tax expense.
The CODM regularly reviews segment level expense details which include compensation, benefits and purchased transportation expenses when assessing operating segment performance. Compensation and benefits are separately assessed for Domestic Package whereas these categories are assessed together for International Package. These categories are the primary segment expenses used by the CODM to assesses segment performance.
Certain expenses are allocated between the 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. Changes in these estimates directly impact the amount of expense allocated to each segment, and therefore the operating profit of each reporting segment. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our businesses. There were no significant changes to our allocation methodologies in the first quarter of 2025.
As we operate an integrated, global multimodal network, we evaluate many of our capital expenditure decisions at a network level. Accordingly, expenditures on property, plant and equipment by segment are not presented.

27

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



Three Months Ended March 31, 2025U.S. DomesticInternationalTotal
Revenue$14,460 $4,373 $18,833 
Reconciliation of revenue:
Other revenues(2)
2,713 
Total consolidated$21,546 
Less:
Compensation and benefits957 
Compensation5,098 
Benefits4,169 
Purchased transportation162 905 
Other segment items(1)
4,052 1,870 
Segment Operating profit/(loss)$979 $641 $1,620 
Reconciliation of segment operating profit to income before income taxes:
Other profit/(loss)(2)
$46 
Other pension income (expense)37 
Investment income and other
42 
Interest expense(222)
Income Before Income Taxes$1,523 
Other Segment Disclosures:
Segment assets$37,452 $17,592 $55,044 
Other assets(2)
10,785 
Unallocated assets2,637 
Consolidated Assets$68,466 
Depreciation and amortization(3)
$623 $202 $825 
Other depreciation and amortization(2)
87 
Consolidated Depreciation and Amortization$912 
(1)    Other segment items for each reportable segment include repairs and maintenance, depreciation and amortization, fuel, other occupancy, allocated costs for our air network, information service, and general and administrative service expenses.
(2)    Revenue, Operating profit/(loss), Assets, and Depreciation and Amortization from segments below the quantitative thresholds are attributable to operating segments which provide supply chain solutions. These operating segments include our Forwarding, Logistics, and Other businesses.
(3)    The amounts of depreciation and amortization disclosed by reportable segment are included within the other segment items captions. These totals are presented after applying activity-based costing methods to allocate expenses between segments as noted above.








28

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Three Months Ended March 31, 2024U.S. DomesticInternationalTotal
Revenue$14,266 $4,256 $18,522 
Reconciliation of revenue:
Other revenues(2)
3,184 
Total consolidated$21,706 
Less:
Compensation and benefits944 
Compensation4,872 
Benefits4,180 
Purchased transportation556 798 
Other segment items(1)
3,825 1,858 
Segment Operating profit/(loss)$833 $656 $1,489 
Reconciliation of segment operating profit to income before income taxes:
Other profit/(loss)(2)
$124 
Other pension income (expense)67 
Investment income and other
51 
Interest expense(195)
Income Before Income Taxes$1,536 
Other Segment Disclosures:
Segment assets$36,988 $17,859 $54,847 
Other assets(2)
10,929 
Unallocated assets1,852 
Consolidated Assets$67,628 
Depreciation and amortization(3)
$603 $196 $799 
Other depreciation and amortization(2)
99 
Consolidated Depreciation and Amortization$898 

(1)    Other segment items for each reportable segment include repairs and maintenance, depreciation and amortization, fuel, other occupancy, allocated costs for our air network, information service, and general and administrative service expenses.
(2)    Revenue, Operating profit/(loss), Assets, and Depreciation and Amortization from segments below the quantitative thresholds are attributable to operating segments which provide supply chain solutions. These operating segments include our Forwarding, Logistics, and Other businesses.
(3)    The amounts of depreciation and amortization disclosed by reportable segment are included within the other segment items captions. These totals are presented after applying activity-based costing methods to allocate expenses between segments as noted above.





29

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14. EARNINGS PER SHARE
The earnings per share amounts are the same for class A and class B common shares as the holders of each class are legally entitled to equal per-share distributions whether through dividends or in liquidation.
The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2025 and 2024 (in millions, except per share amounts):
 Three Months Ended
 March 31,
20252024
Numerator:
Net income attributable to common shareowners$1,187 $1,113 
Denominator:
Weighted-average shares849 853 
Vested portion of restricted shares1 3 
Denominator for basic earnings per share850 856 
Effect of dilutive securities:
Stock options 1 
Denominator for diluted earnings per share850 857 
Basic earnings per share(1)
$1.40 $1.30 
Diluted earnings per share(1)
$1.40 $1.30 
(1)    Earnings per share is computed using unrounded amounts.
Diluted earnings per share for the three months ended March 31, 2025 and 2024 excluded the effect of 0.5 million shares of common stock that may be issued upon the exercise of employee stock options because such effect would be antidilutive.
30

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15. DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT
Risk Management Policies
Changes in fuel prices, interest rates and foreign currency exchange rates impact our results of operations and we actively monitor these exposures. Where deemed appropriate, to manage the impact of these exposures on earnings and/or cash flows, we may enter into a variety of derivative financial instruments. We do not hold or issue derivative financial instruments for trading or speculative purposes.
Credit Risk Management
The forward contracts, swaps and options discussed below contain an element of risk that the counterparties may be unable to meet the terms of the agreements. We seek to minimize such risk exposures for these instruments by limiting the counterparties to banks and financial institutions that meet established credit guidelines. We may further manage credit risk through the use of bilateral collateral provisions and/or early termination rights utilizing master netting arrangements, whereby cash is exchanged based on the net fair value of derivatives associated with each counterparty when positions exceed $250 million.
As of March 31, 2025 and December 31, 2024, we did not hold any cash collateral and no collateral was required to be posted with our counterparties.
Types of Hedges
Commodity Risk Management
The fuel surcharges that we apply in our domestic and international package businesses are our primary means that we employ to reduce the risk of adverse fuel price changes on our business. In order to mitigate the impact of fuel surcharges imposed on us by outside carriers, we regularly adjust the rates we charge for our freight brokerage services.
Foreign Currency Risk Management
To protect against the reduction in value of forecasted foreign currency cash flows from our international package business, we maintain a foreign currency cash flow hedging program. Our most significant foreign currency exposures relate to the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. We generally designate and account for these contracts as cash flow hedges of anticipated foreign currency denominated revenue.
We may also hedge portions of our anticipated cash settlements of principal and interest on certain foreign currency denominated debt. We generally designate and account for these contracts as cash flow hedges of forecasted foreign currency denominated transactions.
We hedge our net investment in certain foreign operations with foreign currency denominated debt instruments.
Interest Rate Risk Management
We may use a combination of derivative instruments to manage the fixed and floating interest rate mix of our total debt portfolio and related overall cost of borrowing.
We generally designate and account for interest rate swaps that convert fixed-rate interest payments into floating-rate interest payments as fair value hedges of the associated debt instruments. We designate and account for interest rate swaps that convert floating-rate interest payments into fixed-rate interest payments as cash flow hedges of the forecasted payment obligations.
We may periodically hedge the forecasted fixed-coupon interest payments associated with anticipated debt offerings by using forward starting interest rate swaps, interest rate locks or similar derivatives.
31

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Outstanding Positions
As of March 31, 2025 and December 31, 2024, the notional amounts of our outstanding derivative positions were as follows (in millions):
 March 31,
2025
December 31,
2024
Currency hedges:
EuroEUR3,168 3,222 
British Pound SterlingGBP523 536 
Canadian DollarCAD1,670 1,623 
Hong Kong DollarHKD4,424 4,160 
Chinese RenminbiCNH7,138 6,065 
As of March 31, 2025 and December 31, 2024 we had no outstanding commodity hedge positions.
Balance Sheet Recognition
The following table indicates the location in our consolidated balance sheets where our derivative assets and liabilities have been recognized, the fair value hierarchy level applicable to each derivative type and the related fair values of those derivatives.
We have master netting arrangements with substantially all of our counterparties giving us the right of offset for our derivative positions. However, we have not elected to offset the fair value positions of our derivative contracts recorded in our consolidated balance sheets. The columns labeled Net Amounts if Right of Offset had been Applied indicate the potential net fair value positions by type of contract and location in our consolidated balance sheets had we elected to apply the right of offset as of March 31, 2025 and December 31, 2024 (in millions):
Fair Value Hierarchy LevelGross Amounts Presented in Consolidated Balance SheetsNet Amounts if Right of
Offset had been Applied
Asset DerivativesBalance Sheet LocationMarch 31,
2025
December 31,
2024
March 31,
2025
December 31,
2024
Derivatives designated as hedges:
Foreign currency exchange contractsOther current assetsLevel 2$85 $157 $70 $152 
Foreign currency exchange contractsOther non-current assetsLevel 247 134 34 131 
Total Asset Derivatives$132 $291 $104 $283 
Fair Value Hierarchy LevelGross Amounts Presented in
Consolidated Balance Sheets
Net Amounts if Right of
Offset had been Applied
Liability DerivativesBalance Sheet LocationMarch 31,
2025
December 31,
2024
March 31,
2025
December 31,
2024
Derivatives designated as hedges:
Foreign currency exchange contractsOther current liabilitiesLevel 2$15 $5 $ $ 
Foreign currency exchange contractsOther non-current liabilitiesLevel 214 3 1  
Total Liability Derivatives$29 $8 $1 $ 
Our foreign currency exchange rate derivatives are largely comprised of over-the-counter derivatives, which are primarily valued using pricing models that rely on market observable inputs such as yield curves, foreign currency exchange rates and investment forward prices; therefore, these derivatives are classified as Level 2.
32

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Balance Sheet Location of Hedged Item in Fair Value Hedges    
The following table indicates the amounts that were recorded in our consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of March 31, 2025 and December 31, 2024 (in millions):
Line Item in the Consolidated Balance Sheets in Which the Hedged Item is IncludedCarrying Amount
of Hedged Liabilities
Cumulative Amount
of Fair Value Hedge
Adjustments
Carrying Amount
of Hedged Liabilities
Cumulative Amount
 of Fair Value Hedge
Adjustments
March 31, 2025March 31, 2025December 31, 2024December 31, 2024
Long-term debt and finance leases$279 $4 $279 $4 
Income Statement and AOCI Recognition of Designated Hedges
The following table indicates the amount of gains (losses) that have been recognized in our statements of consolidated income for fair value and cash flow hedges, as well as the associated gain (loss) for the underlying hedged item for fair value hedges for the three months ended March 31, 2025 and 2024 (in millions):


Three Months Ended March 31,
Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships20252024
RevenueInterest ExpenseInvestment Income and OtherRevenueInterest ExpenseInvestment Income and Other
Gain or (loss) on cash flow hedging relationships:
Interest Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income$ $(1)$ $ $(1)$ 
Foreign Currency Exchange Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income57   41   
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded$57 $(1)$ $41 $(1)$ 
The following table indicates the amount of gains (losses) that have been recognized in AOCI for the three months ended March 31, 2025 and 2024 for those derivatives designated as cash flow hedges (in millions):
Three Months Ended March 31:
Derivative Instruments in Cash Flow Hedging RelationshipsAmount of Gain (Loss) Recognized in AOCI on Derivatives
20252024
Foreign currency exchange contracts$(126)$136 
Total$(126)$136 
As of March 31, 2025, there were $64 million of pre-tax gains related to cash flow hedges deferred in AOCI that are expected to be reclassified to income over the 12-month period ending March 31, 2026. The actual amounts that will be reclassified to income over the next 12 months will vary from this amount as a result of changes in market conditions. The maximum term over which we are hedging exposures to the variability of cash flows is approximately 3 years.

33

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


The following table indicates the amount of gains (losses) that have been recognized in AOCI within foreign currency translation adjustment for the three months ended March 31, 2025 and 2024 for those instruments designated as net investment hedges (in millions):
Three Months Ended March 31:
Non-derivative Instruments in Net Investment Hedging RelationshipsAmount of Gain (Loss) Recognized in AOCI on Debt
20252024
Foreign currency denominated debt$(81)$66 
Total$(81)$66 
Income Statement Recognition of Non-Designated Derivative Instruments
Derivative instruments that are not designated as hedges are recorded at fair value with unrealized gains and losses reported in earnings each period. Cash flows from the settlement of derivative instruments appear in our statements of consolidated cash flows within the same categories as the cash flows of the hedged item.
We may periodically terminate interest rate swaps and foreign currency exchange forward contracts or enter into offsetting swap and foreign currency positions with different counterparties. As part of this process, we de-designate our original hedge relationship.
Amounts recorded in our statements of consolidated income related to fair value changes and settlements of foreign currency forward contracts not designated as hedges for the three months ended March 31, 2025 and 2024 (in millions) were as follows:
Derivative Instruments Not Designated in
Hedging Relationships
Location of Gain (Loss)
Recognized in Income
Amount of Gain (Loss) Recognized in Income
20252024
Three Months Ended March 31:
Foreign currency exchange contractsInvestment income and other$(4)$(5)
Total$(4)$(5)
34

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 16. INCOME TAXES
Our effective tax rate for the three months ended March 31, 2025 decreased to 22.1% compared to 27.5% in the comparative period. The year-over-year decrease in our effective tax rate was driven by prior year share-based compensation shortfalls, prior year unfavorable changes in uncertain tax positions and a non-deductible expense related to a regulatory matter that did not recur in the current period.
As of December 31, 2024, we maintained a full valuation allowance of $105 million against our U.S. capital loss deferred tax asset. Each quarter, we assess the available positive and negative evidence to determine whether it is more likely than not that the capital losses will be realized. During the first quarter of 2025, we released $10 million of this valuation allowance as a result of capital gains expected from the planned building closures and expected disposals discussed in note 17 to the unaudited, consolidated financial statements. We believe there is reasonable possibility that within the next 12 months additional positive evidence of capital gain generation may become available that could result in the release of additional valuation allowance. Release of any portion of the valuation allowance would result in the recognition of a deferred tax asset and a decrease to income tax expense for the period the release is recorded. The exact timing and amount of any valuation release are subject to change as we continue to evaluate our network.
35

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 17. TRANSFORMATION STRATEGY COSTS
As previously disclosed, we are undertaking an enterprise-wide transformation of our organization that includes various projects and initiatives, including workforce reductions and changes in processes and technology, that impact our global direct and indirect operating costs.
The table below presents transformation strategy costs for the three months ended March 31, 2025 and 2024 (in millions):
Three Months Ended
 March 31,
20252024
Transformation Strategy Costs:
Compensation and benefits$24 $31 
Total Other expenses
34 15 
Total Transformation Strategy Costs
$58 $46 
Income Tax Benefit from Transformation Strategy Costs
(14)(11)
After-Tax Transformation Strategy Costs
$44 $35 
Compensation and benefit costs under these programs are primarily related to severance costs incurred in conjunction with reductions in our workforce. We are primarily accounting for these separations under ASC Topic 712 as they have been, or will be, carried out under a plan which provides a contractual termination benefit to impacted employees. The nature of our separation initiatives has resulted in a relatively short period of time, typically less than one year, between the point at which the separation meets the criteria for recognition as an accrual and the point at which the separation is completed.
Other expenses incurred in furtherance of our transformation strategy have been primarily related to fees paid to third-party service providers that supported end-to-end process redesign, assisted in our strategic reviews and contributed to our financial systems transition and healthcare strategy.
The income tax effects of transformation strategy costs are calculated by multiplying the amount of the adjustments by the statutory tax rates applicable in each tax jurisdiction.
Transformation strategy costs during the periods presented related to our Transformation 2.0, Fit to Serve, and Network Reconfiguration and Efficiency Reimagined programs. Total costs by program are shown in the table below for the three months ended March 31, 2025 and 2024 (in millions):

Three Months Ended
 March 31,
20252024
Transformation Strategy Costs:
Transformation 2.0
Business portfolio review$ $5 
Financial systems16 16 
Transformation 2.0 total16 21 
Fit to Serve19 25 
Network Reconfiguration and Efficiency Reimagined
23  
Total Transformation Strategy Costs$58 $46 

36

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Transformation 2.0: Based on a number of factors including evaluating efficiencies previously gained, and in connection with changes in our executive leadership in 2020, we identified and reprioritized certain then-current and future investments, including additional investments in our workforce, portfolio of businesses and technology (such projects, collectively, “Transformation 2.0”). Specifically, we identified opportunities to reduce spans and layers of management, began a review of our business portfolio and identified opportunities to invest in certain technologies, including financial reporting and certain schedule, time and pay systems, to reduce global indirect operating costs, provide better visibility, and reduce reliance on legacy systems and coding languages. As of March 31, 2025, our remaining efforts under Transformation 2.0 include initiatives related to our financial systems. Previously completed initiatives within Transformation 2.0 are described in note 18 to the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024. As of March 31, 2025, we have incurred $814 million of costs as part of Transformation 2.0. Transformation 2.0 initiatives are expected to conclude during 2025 with anticipated remaining costs of approximately $75 million primarily related to completion of our technology initiatives. Costs associated with Transformation 2.0 have primarily consisted of compensation and benefit costs related to reductions in our workforce and fees paid to third-party consultants. Investments in technology are expected to provide enhanced quality of reporting for both internal and external purposes in part through simplification and standardization of data to better enable migration into cloud-based tools and automation of manual activities, including transitioning general ledger, consolidation, and planning tools along with U.S. payroll from older programs and software supporting our freight forwarding business. These efforts to enhance our technology are expected to reduce the need for future investments; we expect to realize benefits therefrom beginning during the second quarter of 2025.
Fit to Serve: During 2023, we began our "Fit to Serve" initiative, which is intended to right-size our business for the future through a workforce reduction of approximately 14,000 positions and create a more efficient operating model to enhance responsiveness to changing market dynamics.
Accruals for separation costs of $28 and $45 million within Fit to Serve were included in our consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively. During the first quarter, we made payments of $33 million and accrued additional separation costs of $16 million. As of March 31, 2025, we have incurred total costs of $435 million and anticipate that we will incur additional costs of approximately $25 million under Fit to Serve. Fit to Serve is expected to conclude in 2025.
Network Reconfiguration and Efficiency Reimagined: As previously disclosed, our Network of the Future initiative is intended to enhance our efficiency through automation and operational sort consolidation in our U.S. Domestic network. In connection with our plan for lower volumes from our largest customer, we began our Network Reconfiguration initiative, which is an expansion of Network of the Future and is expected to lead to consolidations of our facilities 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. We expect to reduce our operational workforce by 25 million hours and by approximately 20,000 positions during 2025 and close 73 leased and owned buildings by the end of June 2025. We are continuing to review our network and may identify additional buildings for closure. As of March 31, 2025, we continue to evaluate the impact of expected changes in volume on our air network. We anticipate $3.5 billion of total cost savings will be delivered this year from Network Reconfiguration and Efficiency Reimagined and, through March 31, 2025 we had realized approximately $500 million in cost savings and incurred related costs of $23 million from these initiatives. These initiatives are expected to end in 2027.
In connection with the Network Reconfiguration and Efficiency Reimagined programs described above, we expect to record between $400 and $600 million in expense during 2025, related to early asset retirements, lease related costs, third-party consulting fees and employee separation benefits. We expect the costs associated with these actions may increase should we determine to close additional buildings. It is our intention to sell the property and equipment associated with closed facilities; however, as of the date hereof, we have not yet formalized plans of sale. In addition, we believe that workforce reductions may require a remeasurement of certain U.S. pension and postretirement benefit plan obligations and assets at an interim date. We are not yet able to estimate the timing or potential impact of such an event.
37

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 18. ACQUISITIONS
In January 2025, we acquired Frigo-Trans, an industry-leading, complex healthcare logistics provider based in Germany. The acquisition is expected to increase our complex cold-chain logistics capabilities internationally.
During the first quarter of 2025, we also acquired franchise development areas for The UPS Store, which are recorded as intangible assets within Supply Chain Solutions.
The aggregate purchase price of all acquisitions was approximately $478 million, net of cash acquired. Acquisitions were funded using cash from operations.
The estimated fair values of assets acquired and liabilities assumed are subject to change based on completion of our purchase accounting. Certain items, including property, plant and equipment, and our estimates of tax positions, are preliminary as of March 31, 2025. The preliminary purchase price allocation for acquired companies can be modified for up to one year from the date of acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in millions):
2025
Cash and cash equivalents$5 
Accounts receivable20 
Other current assets1 
Property, plant and equipment
84 
Operating lease right-of-use assets
18 
Goodwill342 
Intangible assets(1)
185 
Other non-current assets
1 
Current maturities of operating leases
(4)
Accounts payable and other current liabilities
(18)
Non-current operating lease
(14)
Deferred income tax liabilities
(49)
Other non-current liabilities
(88)
Total purchase price$483 
(1)    Includes $40 million for acquisitions of development areas for The UPS Store.
Goodwill recognized upon acquisition of approximately $342 million is attributable to expected synergies from future growth, and has been assigned to Supply Chain Solutions. Goodwill acquired is not expected to be deductible for income tax purposes.
Intangible assets acquired of approximately $185 million are primarily comprised of $142 million of customer relationships (amortized over a weighted average of 15 years). Other intangible assets acquired include franchise rights, licenses and trade names. The carrying value of accounts receivable approximates fair value.

38

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 19. SUBSEQUENT EVENTS
In the second quarter of 2025, we entered into an agreement to acquire Andlauer Healthcare Group Inc. ("AHG"), a leading North American supply chain management company headquartered in Canada that offers customized third-party logistics and specialized cold chain transportation solutions for the healthcare sector.
This acquisition is expected to enhance our end-to-end cold chain capabilities and service to healthcare customers needing temperature-controlled and prevision logistics solutions. This acquisition is expected to close in the second half of 2025, subject to AHG’s shareholder approval, customary regulatory reviews and approvals, and other customary closing conditions.
Under the terms of the agreement, AHG shareholders will receive CAD $55.00 per share in cash, representing a total purchase price of approximately CAD $2.2 billion (USD $1.6 billion). The acquisition is not expected to be material to our consolidated financial position or results of operations.
39

Table of Contents
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
We continue to execute 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.
During the first quarter of 2025, we took several steps in furtherance of this strategy, including deliberately shifting our business to increase our focus on higher yielding volume. We entered into an agreement with our largest customer that, as previously disclosed, provides for reductions to the volume they ship with us, relative to 2024, by more than 50% by June 2026. We insourced our former SurePost product, using the UPS network for final mile delivery, and now replaced it with Ground Saver, a new domestic economy service. We also announced our Ground with Freight Pricing product to provide for shipments weighing more than 150 pounds.
In January 2025, we completed the previously announced acquisition of Frigo-Trans and Biotech & Pharma Logistics ("Frigo-Trans"), an industry-leading, complex healthcare logistics provider based in Germany. The acquisition is expected to increase our complex cold-chain logistics capabilities internationally. In the second quarter of 2025, we entered into an agreement to acquire Andlauer Healthcare Group ("AHG"), a leading North American supply chain management company headquartered in Canada that offers customized third-party logistics and specialized cold chain transportation solutions for the healthcare sector. This acquisition is expected to close in the second half of 2025, subject to AHG’s shareholder approval, customary regulatory reviews and approvals, and other customary closing conditions.
As previously disclosed, our Network of the Future initiative is intended to enhance our efficiency through automation and operational sort consolidation in our U.S. Domestic network. In connection with our plan for lower volumes from our largest customer, we began our Network Reconfiguration initiative, which is an expansion of Network of the Future and is expected to lead to consolidations of our facilities 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. We expect to reduce our operational workforce by 25 million hours and by approximately 20,000 positions during 2025 and close 73 leased and owned buildings by the end of June 2025. We are continuing to review our network and may identify additional buildings for closure. As of March 31, 2025, we continue to evaluate the impact of expected changes in volume on our air network. We anticipate $3.5 billion of total cost savings will be delivered this year from Network Reconfiguration and Efficiency Reimagined and, through March 31, 2025 we had realized approximately $500 million in cost savings and incurred related costs of $23 million from these initiatives. These initiatives are expected to end in 2027.
In connection with the Network Reconfiguration and Efficiency Reimagined programs described above, we expect to record between $400 and $600 million in expense during 2025, related to early asset retirements, lease related costs, third-party consulting fees and employee separation benefits. We expect the costs associated with these actions may increase should we determine to close additional buildings. It is our intention to sell the property and equipment associated with closed facilities; however, as of the date hereof, we have not yet formalized plans of sale. In addition, we believe that workforce reductions may require a remeasurement of certain U.S. pension and postretirement benefit plan obligations and assets at an interim date. We are not yet able to estimate the timing or potential impact of such an event.
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.
Our global small package operations experienced planned volume decreases during the quarter. Volumes declined in the U.S. due to the planned glide down of volume with our largest customer, partially offset by volume growth in our International business, driven by our domestic and export products. Decreases in package volume were largely offset by growth in revenue per piece. Revenue in our global small package operations increased slightly due to growth in air cargo revenue as we fully onboarded volume under our contract with the U.S. Postal Service ("USPS") during the fourth quarter of 2024.
Supply Chain Solutions revenue decreased, driven by the impact of the third quarter 2024 divestiture of Coyote, partially offset by growth in our mail services and certain of our digital businesses.
During the first quarter of 2025, we returned cash to shareholders in the form of $1.0 billion in share repurchases and dividends per share of $1.64.
40

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



The macro environment is highly uncertain due to changing trade policies and tariff uncertainty. As a global carrier, the eventual outcomes could result in pressure in some parts of our business and create new opportunities in others.
Highlights of our consolidated results, which are discussed in more detail below, include:
 Three Months Ended
 March 31,
Change
 20252024$%
Revenue (in millions)$21,546 $21,706 $(160)(0.7)%
Operating Expenses (in millions)19,880 20,093 (213)(1.1)%
Operating Profit (in millions)$1,666 $1,613 $53 3.3 %
Operating Margin7.7 %7.4 %
Net Income (in millions)$1,187 $1,113 $74 6.6 %
Basic Earnings Per Share$1.40 $1.30 $0.10 7.7 %
Diluted Earnings Per Share$1.40 $1.30 $0.10 7.7 %
Operating Days62 63 
Average Daily Package Volume (in thousands)20,789 21,199 (1.9)%
Average Revenue Per Piece$14.22 $13.73 $0.49 3.6 %

Average daily package volume in our global small package operations decreased, driven by planned volume declines from our largest customer, as well as challenging macroeconomic conditions. The overall decrease in the U.S. Domestic Package segment was partially offset by growth in SMBs and commercial shipments in that segment as well as growth in all regions of the International Package segment.
Revenue decreased for the quarter, driven by the impact of the third quarter 2024 divestiture of Coyote, which contributed $563 million of revenue in the 2024 period. This reduction was partially offset by an increase in revenue in our global small package operations. U.S. Domestic Package segment revenue growth was driven by increases in air cargo.
Operating expenses decreased, driven by decreases in purchased transportation, attributable to the absence of Coyote in the 2025 period and the insourcing of our Ground Saver product, partially offset by increases in compensation and benefit expense.
Operating profit and operating margin increased for the quarter, as growth in the U.S. Domestic Package segment more than offset declines in the International Package segment and Supply Chain Solutions.
We recorded net income of $1.2 billion and diluted earnings per share of $1.40 in the first quarter of 2025. Non-GAAP adjusted diluted earnings per share for the quarter were $1.49 after adjusting for the after-tax impacts of:
transformation strategy costs of $44 million, or $0.05 per diluted share;
goodwill and asset impairment charges of $49 million, or $0.05 per diluted share; and
the reversal of an income tax valuation allowance of $10 million, or $0.01 per diluted share.
For additional operational results for the quarter specific to our segments, refer to Results of Operations - Segment Review below.
41

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.
42

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Non-GAAP adjusted amounts reflect the following (in millions):
Three Months Ended
 March 31,
Non-GAAP Adjustments20252024
Operating Expenses:
Transformation Strategy Costs:
Transformation 2.0
Business Portfolio Review$— $
Financial Systems16 16 
Transformation 2.0 Total16 21 
Fit to Serve19 25 
Network Reconfiguration and Efficiency Reimagined
23 — 
Total Transformation Strategy Costs58 46 
Goodwill and Asset Impairment Charges39 48 
Expense for Regulatory Matter
— 40 
Total Adjustments to Non-GAAP Operating Expenses$97 $134 
Three Months Ended
 March 31,
Other Income and (Expense):20252024
Goodwill and Asset Impairment Charges$19 $— 
Total Adjustments to Non-GAAP Other Income and (Expense)19 — 
Total Adjustments to Non-GAAP Income Before Income Taxes116 134 
Income Tax (Benefit) Expense:
Transformation Strategy Costs:
Transformation 2.0
Business Portfolio Review— 
Financial Systems
Transformation 2.0 Total
Fit to Serve
Network Reconfiguration and Efficiency Reimagined
— 
Total Transformation Strategy Costs14 11 
Goodwill and Asset Impairment Charges13 
Reversal of Income Tax Valuation Allowance
10 — 
Total Adjustments to Non-GAAP Income Tax (Benefit) Expense33 24 
Total Adjustments to Non-GAAP Net Income$83 $110 
The income tax impacts of these items are calculated at the statutory tax rates applicable in each tax jurisdiction.
43

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



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 measures that exclude the impact of the following items:
Transformation Strategy Costs
We exclude the impact of charges related to activities within our transformation strategy. Our transformation strategy activities have spanned several years and are designed to fundamentally change the spans and layers of our organization structure, processes, technologies and the composition of our business portfolio. Our transformation strategy includes initiatives within our Transformation 2.0, Fit to Serve, Network Reconfiguration and Efficiency Reimagined programs. Various circumstances from time to time have precipitated these initiatives, including identification and prioritization of investments as a result of executive leadership changes, developments and changes in competitive landscapes, inflationary pressures, consumer behaviors, and other factors including post-COVID normalization and volume diversions attributed to our 2023 labor negotiations.
Our transformation strategy includes the following programs and initiatives:
Transformation 2.0: Based on a number of factors including evaluating efficiencies previously gained, and in connection with changes in our executive leadership in 2020, we identified and reprioritized certain then-current and future investments, including additional investments in our workforce, portfolio of businesses and technology (such projects, collectively, “Transformation 2.0”). Specifically, we identified opportunities to reduce spans and layers of management, began a review of our business portfolio and identified opportunities to invest in certain technologies, including financial reporting and certain schedule, time and pay systems, to reduce global indirect operating costs, provide better visibility, and reduce reliance on legacy systems and coding languages. As of March 31, 2025, our remaining efforts under Transformation 2.0 include technology initiatives related to our financial systems. Previously completed initiatives within Transformation 2.0 are described in Supplemental Information - Items Affecting Comparability in our Annual Report on Form 10-K for the year ended December 31, 2024. Costs associated with Transformation 2.0 have primarily consisted of compensation and benefit costs related to reductions in our workforce and fees paid to third-party consultants. As of March 31, 2025, we have incurred $814 million of costs as part of Transformation 2.0, with anticipated remaining costs of approximately $75 million primarily related to completion of our technology initiatives. We expect any remaining costs to be incurred during 2025. These technology initiatives are expected to provide enhanced reporting quality for both internal and external purposes in part through simplification and standardization of data to better enable migration into cloud-based tools and automation, including transitioning general ledger, consolidation, and planning tools along with U.S. payroll from older programs and software supporting our freight forwarding business. These efforts are expected to reduce the need for future investments; we expect to realize benefits therefrom beginning during the second quarter of 2025.
Fit to Serve: In 2023, a number of factors, including macroeconomic headwinds and volume diversion resulting from our labor negotiations with the International Brotherhood of Teamsters, contributed to volume declines in our U.S. Domestic Package business. In addition, our International Package and Supply Chain Solutions businesses were also negatively impacted by a number of challenging macroeconomic conditions during 2023. In response to these factors, we undertook our Fit to Serve initiative with the intent to right-size our business to create a more efficient operating model that was more responsive to market dynamics through a workforce reduction of approximately 14,000 positions, primarily within management. As of March 31, 2025, we have incurred total costs of $435 million under Fit to Serve, which primarily consist of benefit costs related to reductions in our workforce. We expect to incur remaining costs of approximately $25 million in 2025 as a part of this initiative, which should be complete in 2025. We have achieved savings of approximately $1.0 billion through this program via reductions in our compensation and benefit expense.
Network Reconfiguration and Efficiency Reimagined: Our Network of the Future initiative is intended to enhance our efficiency through automation and operational sort consolidation in our U.S. Domestic network. In connection with our plan for lower volumes from our largest customer, we began our Network Reconfiguration initiative, which is an expansion of Network of the Future and is expected to lead to consolidations of our facilities 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. We expect to reduce our operational workforce by 25 million hours and by approximately 20,000 positions during 2025 and close 73 leased and owned buildings by the end of June 2025. We are continuing to review our network and may identify additional buildings for closure. As of March 31, 2025, we continue to evaluate the impact of expected changes in volume on our air network. We anticipate $3.5 billion of total cost savings will be delivered this year from Network Reconfiguration and Efficiency Reimagined and, through March 31, 2025 we had realized approximately $500 million in cost savings and incurred related costs of $23 million from these initiatives. These initiatives are expected to end in 2027.
44

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



In connection with the Network Reconfiguration and Efficiency Reimagined programs described above, we expect to record between $400 and $600 million in expense during 2025, related to early asset retirements, lease related costs, third-party consulting fees and employee separation benefits. We expect the costs associated with these actions may increase should we determine to close additional buildings. It is our intention to sell the property and equipment associated with closed facilities; however, as of the date hereof, we have not yet formalized plans of sale. In addition, we believe that workforce reductions may require a remeasurement of certain U.S. pension and postretirement benefit plan obligations and assets at an interim date. We are not yet able to estimate the timing or potential impact of such an event.
We do not consider the related costs to be ordinary because each program involves separate and distinct activities that may span multiple periods and are not expected to drive incremental revenue, and because the scope of the programs exceeds that of routine, ongoing efforts to enhance profitability. These initiatives are in addition to ordinary, ongoing efforts to enhance our business performance.
For more information regarding transformation strategy costs, see note 17 to the unaudited, consolidated financial statements.
Goodwill and Asset Impairment Charges
We exclude the impact of goodwill and asset impairment charges, including impairments of long-lived assets and equity method investments, which we do not consider when evaluating the operating performance of our business units, making decisions to allocate resources or in determining incentive compensation awards. For more information regarding goodwill and asset impairment charges, see note 5 and note 8 to the unaudited, consolidated financial statements.
Expense for Regulatory Matter
We exclude the impact of a charge to settle a regulatory matter that we consider to be unrelated to our ongoing operations and that we do not expect to recur. For more information regarding this regulatory matter, see note 10 in our Annual Report on Form 10-K for the year ended December 31, 2024.
Reversal of Income Tax Valuation Allowance
We previously recorded non-GAAP adjustments for transactions that resulted in capital loss deferred tax assets not expected to be realized. We now expect a portion of these capital losses to be realized in future periods. We supplement our presentation with non-GAAP measures that exclude the impact of subsequent changes in the valuation allowances against these deferred tax assets as we believe such treatment is consistent with how the valuation allowance was initially established.
Non-GAAP Adjusted Cost per Piece
We evaluate the efficiency of our operations using various metrics, including non-GAAP adjusted cost per piece. Non-GAAP adjusted cost per piece is calculated as non-GAAP adjusted operating expenses in a period divided by total volume for that period. Because non-GAAP adjusted operating expenses exclude costs or charges that we do not consider a part of underlying business performance when monitoring and evaluating the operating performance of our business units, making decisions to allocate resources or in determining incentive compensation awards, we believe this is the appropriate metric on which to base reviews and evaluations of the efficiency of our operational performance.
45

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Results of Operations - Segment Review
The results and discussions that follow are reflective of how management monitors and evaluates the performance of our segments as defined in note 13 to the unaudited, consolidated financial statements.
Certain operating expenses are allocated between our reporting 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. Changes in these estimates would directly impact the amount of expense allocated to each segment and therefore the operating profit of each reporting segment. Our allocation methodologies are refined periodically, or as necessary to reflect changes in our businesses.
As a normal part of managing our air network, we routinely idle aircraft and engines temporarily for maintenance or to adjust network capacity. As a result of the reduction in air volumes, as of March 31, 2025, we had three aircraft temporarily idled for an average period of approximately eight months in order to better match capacity with current demand. Temporarily idled assets are classified as held-and-used, and we continue to record depreciation expense for these assets. We expect these aircraft to return to revenue service during 2025. We continue to evaluate possible retirements within our MD-11 fleet and during the remainder of 2025, we expect to retire three fully depreciated MD-11s from operational service.
We test goodwill for impairment annually at July 1 and between annual tests if an event occurs or circumstances change that would indicate that it is more likely than not that the carrying value thereof may be impaired. Testing goodwill for impairment requires that we make a number of significant assumptions, including assumptions related to future revenues, costs, capital expenditures, working capital, our cost of capital, long-term growth rates and market comparables. We are also required to make assumptions relating to our overall business and operating strategy, and the regulatory and market environment.
Approximately $1.1 billion of our consolidated goodwill balance of $4.7 billion is represented by our Global Freight Forwarding, Roadie and Global Logistics and Distribution reporting units which, based on our annual impairment evaluation, exhibited a limited excess of fair value above carrying value and reflect a greater risk of an impairment occurring in future periods. During the first quarter of 2025, our Mail Innovations reporting unit experienced cost increases inconsistent with our expectations due to increases in purchased transportation rates which resulted from the expiration of our previous contract with our primary vendor. We are evaluating additional vendors for this business. We are also addressing the revenue quality in the business. 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. Additionally, Frigo-Trans, which was acquired during the first quarter of 2025, will be reported as part of our Healthcare Logistics and Distribution ("HLD") reporting unit.
We continue to monitor all of our reporting units subsequent to the most recent annual test and, while we do not believe it is more likely than not that our reporting units' fair values are less than their carrying values as of March 31, 2025, challenging macroeconomic and uncertain geopolitical conditions, actual reporting unit performance, revisions to our forecasts of future performance or other factors, including market comparables, may negatively impact certain estimates and assumptions that we use in determining our reporting units' fair values. Such impacts may be more pronounced for reporting units whose fair values do not significantly exceed their carrying values. Any of these factors 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.
46

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



U.S. Domestic Package
 Three Months Ended March 31,Change
20252024$%
Average Daily Package Volume (in thousands):
Next Day Air1,520 1,590 (4.4)%
Deferred866 1,047 (17.3)%
Ground15,057 15,438 (2.5)%
Total Average Daily Package Volume17,443 18,075 (3.5)%
Average Revenue Per Piece:
Next Day Air$25.05 $23.12 $1.93 8.3 %
Deferred19.54 17.53 2.01 11.5 %
Ground11.47 11.07 0.40 3.6 %
Total Average Revenue Per Piece$13.06 $12.50 $0.56 4.5 %
Operating Days in Period62 63 
Revenue (in millions):
Next Day Air$2,361 $2,316 $45 1.9 %
Deferred1,049 1,156 (107)(9.3)%
Ground10,709 10,762 (53)(0.5)%
Cargo and Other
341 32 309 965.6 %
Total Revenue$14,460 $14,266 $194 1.4 %
Operating Expenses (in millions):
Operating Expenses$13,481 $13,433 $48 0.4 %
Non-GAAP adjustments to Operating Expenses
Transformation Strategy Costs
(32)(9)(23)255.6 %
Goodwill and Asset Impairment Charges— (5)(100.0)%
Non-GAAP Adjusted Operating Expenses
$13,449 $13,419 $30 0.2 %
Operating Profit (in millions) and Operating Margin:
Operating Profit $979 $833 $146 17.5 %
Non-GAAP Adjusted Operating Profit
$1,011 $847 $164 19.4 %
Operating Margin6.8 %5.8 %
Non-GAAP Adjusted Operating Margin
7.0 %5.9 %
Revenue
The change in revenue was due to the following:
VolumeRates /
Product Mix
Fuel
Surcharge
Total Revenue
Change
Revenue Change Drivers:
 First quarter 2025 vs. 2024
(5.1)%6.6 %(0.1)%1.4 %
Comparative results were impacted by one additional operating day in the first quarter of 2024. The growth in rates / product mix shown above includes the growth we experienced in our air cargo product during the first quarter of 2025, as air cargo under our contract with the USPS was fully onboarded during the fourth quarter of 2024. Air cargo is measured by dimensional weight, not on a per piece basis, and therefore does not impact the volume and revenue per piece discussions below. We expect revenue in the second quarter to be down due to planned volume decreases, partially offset by continued growth in air cargo.
47

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Volume
Average daily volume decreased in line with our expectations for the quarter, driven by glide down of volume with our largest customer and challenging macroeconomic conditions. Decreases in residential volume were partially offset by an increase in commercial volume and continued volume growth from SMBs leveraging our Digital Access Program.
Business-to-consumer volume decreased 7.0%, as a result of the factors discussed above, with declines from both large customers and SMBs, partially offset by continued growth within our Digital Access Program.
Business-to-business volume increased 1.5%. Volume growth was driven by returns and increases across a number of sectors including healthcare and technology.
Within our Air products, average daily volume decreased 9.5%, driven by the continued execution under the contract terms with our largest customer, partially offset by increased demand from the healthcare and technology sectors.
Ground average daily volume decreased 2.5% driven by a decrease in residential volume of 5.7%, primarily due to pricing actions we took on lower yielding e-commerce customer volumes and the planned glide down from our largest customer. This decrease was partially offset by an increase in commercial volume of 2.0%, primarily driven by increases across certain large customers.

Revenue Per Piece
Revenue per piece increased 4.5% due to favorable trends in customer mix, base rates and package characteristics.
Revenue per piece from our Air and Ground products increased. In December 2024, we implemented an average 5.9% net increase in base and accessorial rates for both our Air and Ground products, which favorably impacted revenue per piece.

Fuel Surcharges
We apply a fuel surcharge on our domestic air and ground services that adjusts weekly. Our air fuel surcharge is based on the U.S. Department of Energy's ("DOE") Gulf Coast spot price for a gallon of kerosene-type fuel, and our ground fuel surcharge is based on the DOE's On-Highway Diesel Fuel price.

Operating Expenses
Operating expenses and non-GAAP adjusted operating expenses increased for the quarter. The costs of operating our integrated air and ground network increased by approximately $110 million. These increases were partially offset by a decrease of approximately $60 million in pickup and delivery costs and a decrease in package sortation costs of approximately $20 million. These changes were primarily driven by:
An increase in compensation and benefits expense which was driven by increased stops associated with insourcing the delivery of our Ground Saver product and the impact of wage rate increases for our union workforce.
A reduction in purchased transportation expense driven by insourcing the delivery of our Ground Saver product.
A reduction in expense due to the impact of one less operating day, average daily volume decrease of 3.5% and our Network Reconfiguration and Efficiency Reimagined initiatives.
Our non-GAAP adjusted operating expenses exclude the impact of transformation strategy costs which were $32 and $9 million within the U.S. Domestic Package segment in the first quarter of 2025 and 2024, respectively. Transformation strategy costs reflected within the U.S. Domestic Package segment during both periods were related to our Fit to Serve and Transformation 2.0 programs. The first quarter of 2025 also reflects transformation strategy costs related to our Network Reconfiguration and Efficiency Reimagined programs. Within these programs, we incurred compensation and benefits costs, as well as fees paid to outside professional service providers. See Supplemental Information - Items Affecting Comparability for additional discussion of transformation strategy costs excluded from our non-GAAP financial measures.
Cost per piece and non-GAAP adjusted cost per piece both increased 3.7% in the 2025 period. The increase in cost per piece was primarily driven by lower average daily volume, due primarily to the planned volume reductions from our largest customer as discussed above, which were not fully offset by the benefits of our cost saving initiatives. We anticipate cost per piece will show year-over-year growth in the second quarter.
48

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Operating Profit and Margin
As a result of the factors described above, operating profit increased $146 million, with operating margin increasing 100 basis points to 6.8%. Non-GAAP adjusted operating profit increased $164 million, with non-GAAP adjusted operating margin increasing 110 basis points to 7.0%. Non-GAAP adjusted operating profit excludes the impact of operating expense adjustments discussed above.
49

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



International Package
 Three Months Ended
 March 31,
Change
 20252024$%
Average Daily Package Volume (in thousands):
Domestic1,575 1,503 4.8 %
Export1,771 1,621 9.3 %
Total Average Daily Package Volume3,346 3,124 7.1 %
Average Revenue Per Piece:
Domestic$7.90 $8.01 $(0.11)(1.4)%
Export31.37 32.80 (1.43)(4.4)%
Total Average Revenue Per Piece$20.32 $20.87 $(0.55)(2.6)%
Operating Days in Period62 63 
Revenue (in millions):
Domestic$771 $758 $13 1.7 %
Export3,444 3,350 94 2.8 %
Cargo and Other158 148 10 6.8 %
Total Revenue$4,373 $4,256 $117 2.7 %
Operating Expenses (in millions):
Operating Expenses$3,732 $3,600 $132 3.7 %
Non-GAAP Adjustments to Operating Expenses
Transformation Strategy Costs
(13)(24)11 (45.8)%
Asset Impairment Charges
— (2)(100.0)%
Non-GAAP Adjusted Operating Expenses
$3,719 $3,574 $145 4.1 %
Operating Profit (in millions) and Operating Margin:
Operating Profit $641 $656 $(15)(2.3)%
Non-GAAP Adjusted Operating Profit
$654 $682 $(28)(4.1)%
Operating Margin14.7 %15.4 %
Non-GAAP Adjusted Operating Margin
15.0 %16.0 %
Currency Benefit / (Cost) – (in millions)(1):
Revenue$(85)
Operating Expenses75 
Operating Profit$(10)
    
(1)    Net of currency hedging; amount represents the change in currency translation compared to the prior year.
Revenue
The change in revenue was due to the following:
VolumeRates /
Product Mix
Fuel
Surcharge
CurrencyTotal Revenue
Change
Revenue Change Drivers:
First quarter 2025 vs. 20245.1 %(1.0)%0.6 %(2.0)%2.7 %
Comparative results were impacted by one less operating day in the first quarter of 2025. We expect overall revenue to decrease for the second quarter driven by uncertainty surrounding global trade policies and lower demand-related surcharges.
50

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Volume
Average daily volume increased for the quarter, driven by increases in both our domestic and export products.
Domestic volume increased for the quarter driven primarily by growth within Canada as well as moderate growth across several European markets. Retail customers drove growth within Canada and increases across the European markets were largely driven by retail and professional services customers.
Export volume increased for the quarter driven primarily by growth in the intra-Europe and Asia trade lanes. The increases were slightly offset by declines in Canada to U.S. transborder trade, primarily as a result of changes in trade patterns. Improvements in the intra-Europe trade lanes were driven by volume growth from enterprise customers within the retail, healthcare and auto industries. Growth in the Asia to U.S. trade lanes was driven by increased SMB volumes primarily as a result of anticipated tariff changes.
Export premium products increased 10.4% for the quarter driven by Worldwide and Transborder Express products. Worldwide Express product volume increased as a result of accelerated U.S. inbound services in anticipation of tariff changes. Export non-premium product volumes increased 11.5%, primarily driven by Transborder Standard products from retail SMBs.
Revenue Per Piece
Total revenue per piece decreased 2.6% for the quarter primarily due to non-premium product growth outpacing premium products, decreases in demand related surcharges and unfavorable currency fluctuations. These decreases were partially offset by the impact of base rate increases. Currency had a negative impact of 190 basis points on revenue per piece. Rate changes for shipments originating outside the U.S. are made throughout the year and vary by geographic market.
Domestic revenue per piece decreased 1.4%, primarily due to unfavorable currency movements, partially offset by the impact of base and accessorial rate increases. Currency had a negative impact of 460 basis points on domestic revenue per piece.
Export revenue per piece decreased 4.4%, primarily due to non-premium product growth outpacing premium product growths and decreases in demand related surcharges, partially offset by the impact of base rate increases. Currency had a negative impact of 140 basis points on export revenue per piece.
Fuel Surcharges
The fuel surcharge we apply to international air services originating inside or outside the U.S. is largely indexed to the DOE's Gulf Coast spot price for a gallon of kerosene-type jet fuel. The fuel surcharges for ground services originating outside the U.S. are indexed to fuel prices in the region or country where the shipment originates.
Operating Expenses
Operating expenses increased for the quarter. Pickup and delivery expenses increased $87 million, driven by increased volumes and the impact of the implementation of weekend operations within Europe. Costs of operating our integrated air and ground network increased $40 million primarily due to increased air charters and block hours as we aligned our network to meet higher volume demands. This was partially offset by lower average fuel prices and the impact of currency movements.
Our non-GAAP adjusted operating expenses exclude the impact of activities associated with our transformation strategy, which were $13 and $24 million within the International Package segment in the first quarters of 2025 and 2024, respectively. Transformation strategy costs reflected within the International Package segment during both periods were related to our Fit to Serve program. The first quarter of 2025 also includes transformation strategy costs related to our Efficiency Reimagined program. Within these programs, we incurred compensation and benefits costs, as well as fees paid to outside professional service providers. See Supplemental Information - Items Affecting Comparability for additional discussion of transformation strategy costs excluded from our non-GAAP financial measures.
51

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Operating Profit and Margin
As a result of the factors described above, operating profit decreased $15 million for the quarter, with operating margin decreasing 70 basis points to 14.7%. Non-GAAP adjusted operating profit decreased $28 million and non-GAAP adjusted operating margin decreased 100 basis points to 15.0%.
During the quarter, we completed the liquidations of all operations in Russia. Substantially all of our operations in Ukraine remain indefinitely suspended. These actions have not had, and are not expected to have, a material impact on us.
52

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Supply Chain Solutions
 Three Months Ended
 March 31,
Change
 20252024$%
Revenue (in millions):
Forwarding$726 $1,280 $(554)(43.3)%
Logistics1,572 1,542 30 1.9 %
Other SCS
415 362 53 14.6 %
Total Revenue$2,713 $3,184 $(471)(14.8)%
Operating Expenses (in millions):
Operating Expenses$2,667 $3,060 $(393)(12.8)%
Transformation Strategy Costs(13)(13)— — %
Goodwill and Asset Impairment Charges(39)(41)(4.9)%
Expense for Regulatory Matter— (40)40 (100.0)%
Non-GAAP Adjusted Operating Expenses
$2,615 $2,966 $(351)(11.8)%
Operating Profit (in millions) and Operating Margin:
Operating Profit $46 $124 $(78)(62.9)%
Non-GAAP Adjusted Operating Profit
$98 $218 $(120)(55.0)%
Operating Margin1.7 %3.9 %
Non-GAAP Adjusted Operating Margin
3.6 %6.8 %
Currency Benefit / (Cost) – (in millions)(1):
Revenue$(47)
Operating Expenses56 
Operating Profit$
(1)    Amount represents the change in currency translation compared to the prior year.
 Three Months Ended
 March 31,
Change
 20252024$%
Non-GAAP adjustments to Operating Expenses (in millions):
Transformation Strategy Costs
Forwarding$$$(1)(14.3)%
Logistics16.7 %
Total Transformation Strategy Costs
13 13 — — %
Goodwill and Asset Impairment Charges
Logistics— 41 (41)(100.0)%
Other SCS
39 — 39 N/A
Total Goodwill and Asset Impairment Charges
39 41 (2)(4.9)%
Expense for Regulatory Matter
Other SCS
— 40 (40)(100.0)%
Total Expense for Regulatory Matter
— 40 (40)(100.0)%
Total non-GAAP Adjustments to Operating Expenses$52 $94 $(42)(44.7)%
53

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Revenue
Total revenue in Supply Chain Solutions decreased for the quarter, primarily driven by the impact of the third quarter 2024 divestiture of Coyote within our Forwarding business. These reductions were partially offset by growth in Logistics and certain of our other businesses.
Within our Forwarding businesses revenue decreased $554 million for the quarter, primarily driven by the impact of the divestiture of Coyote, which contributed $563 million of revenue in the 2024 quarter. Revenue across our other Forwarding businesses was relatively flat.
Within our Logistics businesses, revenue increased $30 million for the quarter. Revenue in our mail services business increased $55 million, driven by rate increases, partially offset by revenue decreases in our other Logistics businesses.
Revenue from our other businesses within Supply Chain Solutions increased $53 million for the quarter. This was primarily driven by growth in our digital businesses, including a $38 million increase driven by volume growth at Roadie.
Operating Expenses
Total operating expenses and non-GAAP adjusted operating expenses within Supply Chain Solutions decreased for the quarter for the reasons described below.
Forwarding operating expenses, and non-GAAP adjusted operating expenses, decreased $548 million and $547 million respectively, driven by the impact of the divestiture of Coyote in the third quarter of 2024. Expenses in our freight forwarding businesses increased for the quarter, primarily due to higher market rates charged for third-party ocean transportation. Non-GAAP adjusted operating expense in our Forwarding business excludes expense related to financial systems and other projects undertaken as part of our transformation strategy as shown in the table above.
Logistics operating expenses increased $135 million for the quarter and, on a non-GAAP adjusted basis, increased $175 million for the quarter. Operating expenses in our Mail Innovations business increased $175 million primarily driven by higher purchased transportation rates which resulted from the expiration of our contract with our primary vendor. We are evaluating additional vendors for this business. We are also addressing the revenue quality in the business. Operating expenses within our other logistics businesses were relatively flat for the quarter. Non-GAAP adjusted operating expenses within Logistics in the first quarter of 2025 exclude the impact of $7 million primarily related to projects undertaken as part of our transformation strategy as described below. Non-GAAP adjusted operating expenses within Logistics in the first quarter of 2024 included a $41 million write-down related to certain trade names and $6 million related to projects undertaken as part of our transformation strategy as described below.
Expenses in our other Supply Chain Solutions businesses increased $20 million for the quarter and, on a non-GAAP adjusted basis, increased $21 million for the quarter. Within our digital businesses, operating expenses increased $21 million primarily driven by volume growth at Roadie. In the first quarter of 2025, non-GAAP adjusted operating expense in our other Supply Chain Solutions businesses excluded $39 million related to the impairment of certain assets related to a business within UPS Digital. In the first quarter of 2024, non-GAAP adjusted operating expense in these businesses excluded a $40 million impact related to a regulatory matter.
As discussed above, non-GAAP adjusted operating expenses within Supply Chain Solutions excluded the impact of transformation strategy costs, which were $13 million for the first quarters of 2025 and 2024. Transformation strategy costs reflected within Supply Chain Solutions during these periods are related to our Fit to Serve, Transformation 2.0 and Network Reconfiguration and Efficiency Reimagined programs. Within Transformation 2.0, we incurred costs related to financial system investments in Forwarding. Within Fit to Serve, we incurred severance costs as we right-size our business. Within Efficiency Reimagined, we incurred costs related to end-to-end process redesign. See Supplemental Information - Items Affecting Comparability for additional discussion of items excluded from our non-GAAP financial measures.
54

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Operating Profit and Margin
As a result of the factors described above, total operating profit decreased $78 million for the quarter, with operating margin decreasing 220 basis points to 1.7%. On a non-GAAP adjusted basis, operating profit decreased $120 million for the quarter with non-GAAP adjusted operating margin decreasing 320 basis points to 3.6%. Non-GAAP adjusted operating profit excludes the impact of operating expense adjustments discussed above. The macro environment is highly uncertain due to changing trade policies and tariff uncertainty, the eventual outcomes could result in pressure in some parts of our business.
55

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Consolidated Operating Expenses
 Three Months Ended
 March 31,
Change
 20252024$%
Operating Expenses (in millions):
Compensation and benefits$11,827 $11,639 $188 1.6 %
Transformation Strategy Costs
(24)(31)(22.6)%
Non-GAAP Adjusted Compensation and Benefits
$11,803 $11,608 $195 1.7 %
Repairs and maintenance$732 $718 $14 1.9 %
Depreciation and amortization912 898 14 1.6 %
Purchased transportation2,730 3,246 (516)(15.9)%
Fuel1,058 1,060 (2)(0.2)%
Other occupancy607 564 43 7.6 %
Other expenses2,014 1,968 46 2.3 %
Total Other Expenses
8,053 8,454 (401)(4.7)%
Transformation Strategy Costs
(34)(15)(19)126.7 %
Goodwill and Asset Impairment Charges(39)(48)(18.8)%
Expense for Regulatory Matter— (40)40 (100.0)%
Non-GAAP Adjusted Total Other Expenses
$7,980 $8,351 $(371)(4.4)%
Total Operating Expenses$19,880 $20,093 $(213)(1.1)%
Non-GAAP Adjusted Total Operating Expenses
$19,783 $19,959 $(176)(0.9)%
Currency (Benefit) / Cost - (in millions)(1)
$(131)
(1)    Amount represents the change in currency translation compared to the prior year.
 Three Months Ended
 March 31,
Change
 20252024$%
Non-GAAP Adjustments to Operating Expenses (in millions):
Transformation Strategy Costs:
Compensation$$$(2)(40.0)%
Benefits21 26 (5)(19.2)%
Other expenses34 15 19 126.7 %
Total Transformation Strategy Costs58 46 12 26.1 %
Goodwill and Asset Impairment Charges
Other expenses39 48 (9)(18.8)%
Total Asset Impairment Charges
39 48 (9)(18.8)%
Expense for Regulatory Matter
Other expenses— 40 (40)(100.0)%
Total Expense for Regulatory Matter
— 40 (40)(100.0)%
Total Non-GAAP Adjustments to Operating Expenses$97 $134 $(37)(27.6)%
56

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Compensation and Benefits
Total compensation and benefits and non-GAAP adjusted total compensation and benefits increased for the quarter.
Compensation costs increased $235 million for the quarter, and on a non-GAAP adjusted basis increased $236 million for the quarter. The principal factors contributing to the overall increase were:
Direct labor costs increased $274 million. Additional stops driven by the impact of insourcing our Ground Saver product increased direct labor costs by $298 million for the quarter. Wage rate growth increased $132 million driven by increased seniority within our union workforce, contractual wage rate increases for our U.S. union workforce and higher overtime. These increases were partially offset by the impact of decreases in volume, which reduced direct labor expense by $199 million. Growth in compensation expense is expected to be partially offset by the anticipated impact from workforce reductions as we execute on our Network Reconfiguration and Efficiency Reimagined initiatives.
Management compensation costs decreased $29 million for the quarter due to lower overall headcount, partially offset by higher long-term incentive compensation expense, which was lower in the 2024 period.
Benefits costs decreased $47 million and on a non-GAAP adjusted basis decreased $41 million. The principal factors driving the change were:
Pension and other postretirement benefits costs decreased $81 million. These reductions were driven by demographic updates and workforce reductions, a decrease in the cost of company-sponsored defined benefit plans, driven by lower service cost resulting from higher discount rates, and decreased expense for multiemployer plans.
Accruals for paid time off, payroll taxes and other costs increased $23 million primarily due to the impact of insourcing our Ground Saver product.
Health and welfare costs increased $18 million, driven by increased contributions to multiemployer plans as a result of contractually-mandated rate increases.
Non-GAAP adjusted operating expenses in both periods exclude the impact of costs incurred under our transformation strategy programs, Fit to Serve, Transformation 2.0 and Network Reconfiguration and Efficiency Reimagined, and primarily impacted other employee benefits expense and related payroll tax expense. Compensation and benefits expenses under these programs during the first quarter of 2025 were $24 million, a decrease of $7 million as compared to the same period of 2024. See Supplemental Information - Items Affecting Comparability for additional discussion of items excluded from our non-GAAP financial measures.
Repairs and Maintenance
Increased expense incurred for repairs and maintenance was driven by increased network usage.
Depreciation and Amortization
Depreciation and Amortization expense increased due to capital asset additions.
Purchased Transportation
Third-party transportation expense charged to us by air, ocean and ground carriers decreased $516 million for the quarter. The decreases were primarily driven by a decrease of $468 million attributable to the impact of the disposition of Coyote in the third quarter of 2024, and a $344 million decrease relating to the impact of insourcing our Ground Saver product.
These decreases were partially offset by an increase of $182 million driven by higher rates in our mail services business and an increase of $108 million in our International Package segment expense, driven by higher volumes.
Fuel Expense
Fuel expense was relatively flat as decreases due to reduced rates for jet fuel, diesel and gasoline were largely offset by the impact of increases in air volumes. Market prices and the manner in which we purchase fuel influence our costs. The majority of our fuel purchases utilize index-based pricing formulas plus or minus a fixed locational/supplier differential. While many of the indices are correlated, each index may respond differently to changes in underlying prices, which in turn can drive variability in our costs.
57

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Other Occupancy
Other occupancy expense increased $43 million for the quarter, primarily due to increases in weather-related costs, primarily snow removal.
Other Expenses
Other expenses increased $46 million, and on a non-GAAP adjusted basis, increased $76 million. The principal factors contributing to the increases were:
Commissions paid increased $48 million primarily due to growth in our Digital Access Program.
Auto liability insurance increased $42 million driven by the unfavorable development of old claims.
Expenses related to our airline operations increased $26 million, primarily due to increased flight activity.
Claims expense increased $18 million due to an increase in the volume of customer claims.
These increases were offset in part by a decrease of $25 million in credit losses as a result of changes in the composition of our accounts receivable and improved customer collections, and a $32 million gain related to the sale of a property which we subsequently leased.
Non-GAAP adjusted operating expenses exclude the impact of:
Transformation strategy costs of $34 million, an increase of $19 million compared to the first quarter of 2024.
Goodwill and asset impairment charges of $39 million, a decrease of $9 million compared to the first quarter of 2024. During the quarter we recognized expense of $39 million related to the write down in the value of certain assets within one of our Supply Chain Solutions businesses. In 2024 we recognized expense of $48 million related to the impairment of trade names and software.
In the first quarter of 2024 we incurred a $40 million expense related to a regulatory matter. We did not have any similar charges in the first quarter of 2025.
We expect to incur additional other expenses under our Fit to Serve, Transformation 2.0, Network Reconfiguration and Efficiency Reimagined programs during the remainder of 2025. See Supplemental Information - Items Affecting Comparability for additional discussion on the types, amounts and timing thereof.
58

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Other Income (Expense)
The following table sets forth investment income and other and interest expense for the three months ended March 31, 2025 and 2024 (in millions):
 Three Months Ended
 March 31,
Change
 20252024$%
Investment Income and Other$79 $118 $(39)(33.1)%
Goodwill and Asset Impairment Charges
19 — 19 N/A
Non-GAAP Adjusted Investment Income and Other
98 118 (20)(16.9)%
Interest Expense(222)(195)(27)13.8 %
Total Other Income (Expense)
$(143)$(77)$(66)85.7 %
Non-GAAP Adjusted Total Other Income (Expense)
$(124)$(77)$(47)61.0 %
Investment Income and Other
Investment income and other decreased by $39 million in the first quarter of 2025 compared to the 2024 period. Investment income in the 2025 period included a $19 million asset impairment charge related to an equity method investment. Excluding the impact of this asset impairment, non-GAAP adjusted investment income and other decreased $20 million due to a reduction in pension income partially offset by the change in foreign currency exchange rates relative to the prior year period. The reduction in pension income was driven by an increase in interest cost from overall plan growth and higher discount rates, slightly offset by higher expected returns on pension assets.
Interest Expense
Interest expense increased for the first quarter due to higher average outstanding debt balances and a decrease in capitalized interest.
59

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Income Tax Expense
The following table sets forth our income tax expense and effective tax rate for the three months ended March 31, 2025 and 2024 (in millions):
 Three Months Ended
 March 31,
Change
 20252024$%
Income Tax Expense$336 $423 $(87)(20.6)%
   Income Tax Impact of:
Transformation Strategy Costs:
Transformation 2.0
Business Portfolio Review— (1)(100.0)%
Financial Systems— — %
Transformation 2.0 Total(1)(20.0)%
Fit to Serve(2)(33.3)%
Network Reconfiguration and Efficiency Reimagined— N/A
Total Transformation Strategy Costs14 11 27.3 %
Goodwill and Asset Impairment Charges
13 (4)(30.8)%
Expense for Regulatory Matter
— — — N/A
Reversal of income tax valuation allowance
10 — 10 N/A
Non-GAAP Adjusted Income Tax Expense
$369 $447 $(78)(17.4)%
Effective Tax Rate22.1 %27.5 %
Non-GAAP Adjusted Effective Tax Rate
22.5 %26.8 %
For additional information on our income tax expense and effective tax rate, see note 16 to the unaudited, consolidated financial statements.
60

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Liquidity and Capital Resources
We deploy a disciplined and balanced approach to capital allocation, including returns to shareowners through dividends and share repurchases. As of March 31, 2025, we had $5.1 billion in cash, cash equivalents and marketable securities. We believe that these positions, expected cash from operations, access to commercial paper programs and capital markets and other available liquidity options will be adequate to fund our material short- and long-term cash requirements, including our business operations, planned capital expenditures, pension contributions, planned acquisitions, transformation strategy costs, debt obligations and planned shareowner returns. We regularly evaluate opportunities to optimize our capital structure, including through issuances of debt to refinance existing debt and to fund operations.
Cash Flows From Operating Activities
The following is a summary of the significant sources (uses) of cash from operating activities (in millions):
 Three Months Ended March 31,
 20252024
Net income$1,187 $1,113 
Non-cash operating activities (1)
1,173 1,308 
Pension and postretirement medical benefit plan contributions (company-sponsored plans)
(67)(50)
Hedge margin receivables and payables— (8)
Income tax receivables and payables211 257 
Changes in working capital and other non-current assets and liabilities(219)696 
Other operating activities33 — 
Net cash from operating activities$2,318 $3,316 
(1)    Represents depreciation and amortization, gains and losses on derivative transactions and foreign currency exchange, deferred income taxes, allowances for expected credit losses, amortization of operating lease assets, pension and postretirement medical benefit plan (income) expense, stock compensation expense, changes in casualty self-insurance reserves, goodwill and other asset impairment charges and other non-cash items.
Net cash from operating activities decreased $1.0 billion for the quarter, driven by:
Higher incentive compensation payments.
An increase in accounts receivable driven by higher pass-through tariffs, duties and taxes.
These factors were partially offset by a slight improvement in net income.
As of March 31, 2025, approximately $1.7 billion of our total worldwide holdings of cash, cash equivalents and marketable securities were held by foreign subsidiaries. The amount of cash, cash equivalents and marketable securities held by our U.S. and foreign subsidiaries fluctuates throughout the year due to a variety of factors, including the timing of cash receipts, strategic operating needs and disbursements in the normal course of business. Cash provided by operating activities in the U.S. continues to be our primary source of funds to finance our business operations, planned capital expenditures, pension contributions, planned acquisitions, transformation strategy costs, debt obligations and planned shareowner returns. All cash, cash equivalents and marketable securities held by foreign subsidiaries are generally available for distribution to the U.S. without any U.S. federal income taxes. Any such distributions may be subject to foreign withholding and U.S. state taxes. When amounts earned by foreign subsidiaries are expected to be indefinitely reinvested, no accrual for taxes is provided.
61

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Cash Flows From Investing Activities
Our primary sources (uses) of cash from investing activities were as follows (in millions):
 Three Months Ended March 31,
 20252024
Net cash (used in) from investing activities
$(1,355)$1,566 
Capital Expenditures:
Buildings, facilities and plant equipment$(428)$(327)
Aircraft and parts(70)(174)
Vehicles(119)(349)
Information technology(259)(185)
Total Capital Expenditures
$(876)$(1,035)
Capital Expenditures as a % of revenue4.1 %4.8 %
Other Investing Activities:
Proceeds from disposal of businesses, property, plant and equipment$65 $13 
Net (purchases) sales and maturities of marketable securities
$(56)$2,646 
Acquisitions, net of cash acquired$(478)$(44)
Other investing activities$(10)$(14)
For the three months ended March 31, 2025, total capital expenditures decreased compared to the 2024 period, primarily due to:
Reduced spending on vehicles due to a focus on end-of-life replacements.
Decreased aircraft expenditures driven by fewer deliveries and reduced aircraft payments during the quarter.
These decreases were partially offset by increased spending on buildings, facilities, plant equipment and information technology, as we execute our Network of the Future initiative.
Proceeds from the disposal of businesses, property, plant and equipment were higher primarily due to the impact of a real estate sale-lease back transaction executed during the quarter.
Changes in marketable securities were largely driven by the liquidation of our portfolio of $2.6 billion during 2024 to provide additional resources for short-term and strategic operating needs.
Cash paid for acquisitions in the 2025 period was primarily attributable to the acquisition of Frigo-Trans, and reacquired development area rights for The UPS Store. In the 2024 period, cash paid for acquisitions related to the purchase of development areas for The UPS Store.
We have commitments for pending acquisitions and for the purchase of aircraft, vehicles, equipment and real estate to provide for the replacement and enhancement of existing capacity and targeted growth. Our 2025 investment program anticipates investments in technology initiatives and enhanced network capabilities, including approximately $500 million of projects to support our environmental sustainability goals. It also provides for maintenance of buildings, facilities and equipment and replacement of certain aircraft within our fleet. We currently expect our capital expenditures will be approximately $3.5 billion in 2025, of which approximately 80 percent will be allocated to network enhancement projects and other technology initiatives. We regularly evaluate opportunities for cost effective financing of assets in order to reduce our capital spending. Future capital spending will depend on a variety of factors, including economic and industry conditions, and financing alternatives.
62

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Cash Flows From Financing Activities
Our primary sources (uses) of cash from financing activities were as follows (in millions, except per share data):
 Three Months Ended March 31,
20252024
Net cash (used in) from financing activities
$(2,313)$(3,666)
Share Repurchases:
Cash paid to repurchase shares$(1,000)$— 
Number of shares repurchased(8.6)— 
Shares outstanding at period end847 855 
Dividends:
Dividends declared per share$1.64 $1.63 
Cash paid for dividends$(1,348)$(1,348)
Borrowings:
Net borrowings (repayments) of debt principal$(7)$(2,198)
Other Financing Activities:
Cash received for common stock issuances$55 $54 
Other financing activities$(13)$(174)
Capitalization:
Total debt outstanding at period end$21,369 $20,013 
Total shareowners' equity at period end15,684 16,933 
Total capitalization$37,053 $36,946 
We repurchased 8.6 million shares of class B common stock for $1.0 billion under our stock repurchase program during the first quarter of 2025. We do not currently anticipate further repurchases in 2025. We did not repurchase any shares under our stock repurchase program during the first quarter of 2024. For additional information on our share repurchase activities, see note 12 to the unaudited, consolidated financial statements.
The declaration of dividends is subject to the discretion of the Board and depends on various factors, including our net income, financial condition, cash requirements, future prospects and other relevant factors. In the first quarter of 2025, we increased our quarterly cash dividend to $1.64 per share, compared to $1.63 in the 2024 period.
Repayments of debt during the quarter consisted of $32 million of senior notes and finance lease obligations. We received $25 million in proceeds related to other financing arrangements during the first quarter of 2025. Repayments of debt in the 2024 period consisted of $2.2 billion of short- and long-term commercial paper as well as scheduled principal payments on our finance lease obligations. There were no issuances of debt during the first quarter of 2024.
As of March 31, 2025, we had $1.8 billion of fixed-rate senior notes outstanding that mature in 2025. We repaid $1.0 billion of these notes at maturity in April 2025 with cash from operations and intend to repay or refinance the remaining amounts when due. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt. Subsequent to March 31, 2025, we entered into six aircraft leases which we expect will be treated as finance leases.
63

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



The amount of commercial paper outstanding fluctuates based on daily liquidity needs. The following is a summary of our commercial paper program (in millions):
Outstanding balance at quarter end ($)
Average balance outstanding ($)
Average interest rate
2025
USD$— $52 4.08 %
Total
$— 
As of March 31, 2025, we had no outstanding balances under our U.S. or European commercial paper programs.
Cash outflows from other financing activities decreased driven by lower tax withholdings on employee stock compensation as a result of previously disclosed changes to the payout structure of our management incentive award program. Cash outflows for this purpose were approximately $12 and $177 million for the three months ended March 31, 2025 and 2024, respectively.
Except as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, we do not have guarantees or other off-balance sheet financing arrangements, including variable interest entities, which we believe could have a material impact on our financial condition or liquidity.
Sources of Credit
See note 9 to the unaudited, consolidated financial statements for a discussion of our available credit and the financial covenants that we are subject to as part of our credit agreements.
Contractual Commitments
There have been no material changes to the contractual commitments described in Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2024, except as described below.
Purchase commitments represent contractual agreements for certain capital expenditures and pending acquisitions, that are legally binding, including contracts for aircraft, vehicles and facility construction projects. We continue to evaluate available financing alternatives with respect to our aircraft purchase commitments.
The following table summarizes the expected cash outflows to satisfy our total purchase commitments as of March 31, 2025 (in millions):
Commitment Type
2025(1)
2026202720282029
After 2029(4)
Total
Purchase Commitments(2)(3)
$2,760 $2,277 $849 $200 $64 $668 $6,818 
(1)    Purchase commitments for 2025 include amounts related to the pending acquisition of Estafeta. Completion of the acquisition is subject to customary closing conditions and regulatory approvals.
(2)    In addition to the purchase commitments presented above, during the second quarter of 2025, we entered into an agreement to acquire Andlauer Healthcare Group for approximately CAD $2.2 billion (USD $1.6 billion).
(3)    Subsequent to March 31, 2025, we entered into six new aircraft leases which we expect to be treated as finance leases. We expect the existing aircraft purchase commitments included above will decrease and be reflected as leases.
(4)    This includes a financing arrangement to be paid over 17 years.
For additional information on 2025 debt issuances and repayments, see note 9 to the unaudited, consolidated financial statements.
Legal Proceedings and Contingencies
See note 11 to the unaudited, consolidated financial statements for a discussion of judicial proceedings and other matters arising from the conduct of our business activities.
64

Table of Contents
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



Collective Bargaining Agreements
Status of Collective Bargaining Agreements
See note 7 to the unaudited, consolidated financial statements for a discussion of the status of our collective bargaining agreements.
Multiemployer Benefit Plans
See note 7 to the unaudited, consolidated financial statements for a discussion of our participation in multiemployer benefit plans.
Recent Accounting Pronouncements
Adoption of New Accounting Standards
See note 2 to the unaudited, consolidated financial statements for a discussion of recently adopted accounting standards.
Accounting Standards Issued But Not Yet Effective
See note 2 to the unaudited, consolidated financial statements for a discussion of accounting standards issued, but not yet effective.
65

Table of Contents
Item 3.Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in certain commodity prices, foreign currency exchange rates, interest rates and equity prices. All of these market risks arise in the normal course of business, as we do not engage in speculative trading activities. In order to manage the risk arising from these exposures, we may utilize a variety of commodity, foreign currency exchange and interest rate forward contracts, options and swaps. A discussion of our accounting policies for derivative instruments and further disclosures are provided in note 15 to the unaudited, consolidated financial statements.
The total net fair value asset (liability) of our derivative financial instruments is summarized in the following table (in millions):
March 31,
2025
December 31,
2024
Currency Derivatives$103 $283 
As of March 31, 2025 and December 31, 2024, we had no outstanding commodity hedge positions.
The information concerning market risk in Item 7A under the caption "Quantitative and Qualitative Disclosures about Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2024 is incorporated herein by reference.
Our market risks, hedging strategies and financial instrument positions as of March 31, 2025 have not materially changed from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024. In the first quarter of 2025, we entered into foreign currency exchange forward contracts on the Euro, British Pound Sterling, Canadian Dollar, Hong Kong Dollar, and Chinese Renminbi and had forward contracts expire. The fair value changes between December 31, 2024 and March 31, 2025 in the preceding table are primarily due to foreign currency exchange rate fluctuations between those dates.
The foreign currency exchange forward contracts, swaps and options previously discussed contain an element of risk that the counterparties may be unable to meet the terms of the agreements; however, we seek to minimize such risk exposures for these instruments by limiting the counterparties to banks and financial institutions that meet established credit guidelines and by monitoring counterparty credit risk to prevent concentrations of credit risk with any single counterparty.
We have agreements with all of our active counterparties (covering all of our derivative positions) containing early termination rights and/or bilateral collateral provisions whereby cash is required based on the net fair value of derivatives associated with those counterparties when positions exceed $250 million.
Events such as a credit rating downgrade (depending on the ultimate rating level) could also allow us to take additional protective measures such as the early termination of trades. As of March 31, 2025, we held no cash collateral and were not required to post any collateral with our counterparties under these agreements. We have not historically incurred, and do not expect to incur in the future, any losses as a result of counterparty default.
66

Table of Contents
Item 4.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, management, including our Principal Executive Officer and Principal Financial and Accounting Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")). Based upon, and as of the date of, the evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required and is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial and Accounting Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Subsequently during April 2025, the Company deployed a new enterprise-wide general ledger and related technologies as part of a broader finance technology modernization program. As a result, the Company has made changes to its internal control over financial reporting to reflect the changes in its system environment and related processes.
67

Table of Contents
PART II. OTHER INFORMATION

Item 1.Legal Proceedings
For a discussion of material legal proceedings affecting the Company, see note 11 to the unaudited, consolidated financial statements included in this report.
Item 1A.Risk Factors
There have been no material changes to the risk factors described in Part 1, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2024. The occurrence of any of the risks described therein could materially affect us, including impacting our business, financial condition, results of operations, stock price or credit rating, as well as our reputation. These risks are not the only ones we face. We could also be materially adversely affected by other events, factors or uncertainties that are unknown to us, or that we do not currently consider to be material.
68

Table of Contents
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
(c) A summary of repurchases of our class A and class B common stock during the first quarter of 2025 is as follows (in millions, except per share amounts):
Total Number of Shares Purchased (1)
Average Price Paid Per ShareTotal Number of Shares Purchased as Part of a Publicly Announced ProgramApproximate Dollar Value of Shares that May Yet be Purchased Under the Program
January 1 - January 31, 2025
— $— — $2,332 
February 1 - February 28, 2025
7.4 115.36 7.4 1,482 
March 1 - March 31, 2025
1.2 115.36 1.2 $1,332 
Total January 1 - March 31, 2025
8.6 $115.36 8.6 
(1) Includes shares repurchased through our publicly announced share repurchase programs and shares tendered to pay the exercise price and tax withholding on employee stock options.
In January 2023, the Board of Directors approved a share repurchase authorization of $5.0 billion for class A and class B common stock. We repurchased 8.6 million shares of class B common stock for $1.0 billion under an accelerated stock repurchase transaction during the three months ended March 31, 2025. As of March 31, 2025, we had $1.3 billion of this share repurchase authorization available.
For additional information on our share repurchase activities, see note 12 to the unaudited, consolidated financial statements.
69

Table of Contents
Item 5.      Other Information
On May 7, 2025, the Compensation and Human Capital Committee of the Board of Directors of the Company approved special awards of time-based restricted stock units (“RSUs”) for certain of the Company’s employees, including RSUs at the following targeted values to the following individuals who were identified as “named executive officers” in the Company’s Proxy Statement on Schedule 14A filed on March 17, 2025: $1,125,571 for Brian Dykes; $1,274,094 for Nando Cesarone; $1,274,094 for Kate Gutmann; and $1,107,333 for Bala Subramanian. Each such RSU award will be effective on May 9, 2025 and will generally vest as follows: 25% on May 9, 2026; 25% on May 9, 2027; and 50% on May 9, 2028.
Insider Trading Arrangements and Policies
None.
70

Table of Contents
Item 6. Exhibits
3.1
3.2
10.1
10.2
31.1
31.2
32.1
32.2
101
The following unaudited financial information from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 is formatted in Inline XBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Statements of Consolidated Income, (iii) the Statements of Consolidated Comprehensive Income (Loss), (iv) the Statements of Consolidated Cash Flows, and (v) the Notes to the Consolidated Financial Statements.
104
Cover Page Interactive Data File - The cover page from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 is formatted in Inline XBRL (included as Exhibit 101).

__________________
*
Management contract or compensatory plan or arrangement.

71

Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
UNITED PARCEL SERVICE, INC.
(Registrant)
Date:May 7, 2025By:  /s/ BRIAN DYKES
  Brian Dykes
  Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)


72