Quarterly report [Sections 13 or 15(d)]

SEGMENT INFORMATION

v3.25.2
SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
SEGMENT INFORMATION 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 ("EMEAI"), 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 when assessing operating segment performance. These expense categories represent the primary metrics used by the CODM to assess segment performance. For the Domestic Package segment, compensation and benefits are evaluated separately, whereas for the International Package segment, these categories are assessed in aggregate. Beginning with the quarter ended June 30, 2025, purchased transportation expense for the Domestic Package segment was no longer provided to the CODM when assessing the operating segment's 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 second 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.
Results of operations for the three and six months ended June 30, 2025 and 2024 were as follows (in millions):
Three Months Ended
 June 30,		 Six Months Ended
 June 30,
2025 2024 2025 2024
U.S. Domestic Package:
Revenue $ 14,083  $ 14,201  $ 28,543  $ 28,467 
Less:
Compensation 4,903  4,796  10,001  9,668 
Benefits 4,180  4,171  8,349  8,351 
Other segment items(1)
4,084  4,246  8,298  8,627 
U.S. Domestic Operating profit/(loss) $ 916  $ 988  $ 1,895  $ 1,821 
International Package:
Revenue $ 4,485  $ 4,370  $ 8,858  $ 8,626 
Less:
Compensation and benefits 995  920  1,952  1,864 
Purchased transportation 944  811  1,849  1,609 
Other segment items(1)
1,874  1,921  3,744  3,779 
International Operating profit/(loss) $ 672  $ 718  $ 1,313  $ 1,374 
Reconciliation of revenue:
Total U.S. Domestic Package and International Package Revenue $ 18,568  $ 18,571  $ 37,401  $ 37,093 
Other revenues(2)
2,653  3,247  5,366  6,431 
Total Consolidated Revenue $ 21,221  $ 21,818  $ 42,767  $ 43,524 
Reconciliation of segment operating profit to income before income taxes:
Total U.S. Domestic Package and International Package Operating profit/(loss) $ 1,588  $ 1,706  $ 3,208  $ 3,195 
Other profit/(loss)(2)
234  238  280  362 
Other pension income (expense) 38  67  75  134 
Investment income and other 40  70  82  121 
Interest expense (238) (212) (460) (407)
Total Consolidated Income Before Income Taxes $ 1,662  $ 1,869  $ 3,185  $ 3,405 
(1)    Other segment items for each reportable segment include purchased transportation (applicable only to our U.S Domestic segment), repairs and maintenance, depreciation and amortization, fuel, other occupancy, and allocated costs for our air network, information services, and general and administrative service expenses.
(2)    Revenue and Operating profit/(loss) 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.
The amounts of depreciation and amortization by reportable segment disclosed for the three and six months ended June 30, 2025 and 2024 are included within the other segment items captions in the table above. These totals are presented after applying activity-based costing methods to allocate expenses between segments as noted above.
Three Months Ended
 June 30,		 Six Months Ended
 June 30,
2025 2024 2025 2024
Depreciation and amortization
U.S. Domestic Package $ 636  $ 593  $ 1,259  $ 1,196 
International Package 209  199  411  395 
Other depreciation and amortization(1)
91  95  178  194 
Consolidated Depreciation and Amortization $ 936  $ 887  $ 1,848  $ 1,785 
(1)    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.
Assets by reportable segment as of June 30, 2025 and December 31, 2024 consisted of the following (in millions):
2025 2024
Segment Assets
U.S. Domestic Package $ 37,441  $ 38,657 
International Package 19,250  18,300 
Other assets(1)
11,427  9,850 
Unallocated assets(2)
2,805  3,263 
Consolidated Assets $ 70,923  $ 70,070 
(1)    Assets 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.
(2)    Unallocated assets are comprised primarily of cash held by our centralized investment entity.