Quarterly report [Sections 13 or 15(d)]

REVENUE RECOGNITION

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REVENUE RECOGNITION
 9 Months Ended
Sep. 30, 2025
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION 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
 September 30,		 Nine Months Ended
 September 30,
2025 2024 2025 2024
Revenue:
Next Day Air $ 2,381  $ 2,396  $ 7,035  $ 7,021 
Deferred 1,020  1,109  3,093  3,372 
Ground 10,525  10,945  31,718  32,410 
Cargo and Other 294  147  917  261 
     U.S. Domestic Package 14,220  14,597  42,763  43,064 
Domestic 847  771  2,448  2,299 
Export 3,646  3,482  10,574  10,269 
Cargo and Other
 180  158  509  469 
    International Package 4,673  4,411  13,531  13,037 
Forwarding 730  1,307  2,188  3,902 
Logistics 1,363  1,550  4,411  4,638 
Other 429  380  1,289  1,128 
    Supply Chain Solutions 2,522  3,237  7,888  9,668 
Consolidated revenue $ 21,415  $ 22,245  $ 64,182  $ 65,769 
Accounts Receivable, Net

During the third quarter of 2025, we entered into an accounts receivable factoring program with a third party, in which we may sell certain customer receivables to the third party on a revolving periodic basis. Any such transactions are accounted for as sales and accordingly, receivables sold are removed from Accounts receivable, net in the consolidated balance sheets and the proceeds are reflected in Cash Flows from Operating Activities in the statements of consolidated cash flows. Our continuing involvement in these receivables is primarily limited to servicing and under limited circumstances, recourse.
Total accounts which may be outstanding under the program are $395 million. During the three and nine months ended September 30, 2025, we sold $248 million of accounts receivable for net cash proceeds of $246 million. In connection with this program, we recognized a liability, measured at fair value, related to our estimated recourse obligations recorded within Other current liabilities in the consolidated balance sheet. During the three and nine months ended September 30, 2025, we recorded an immaterial loss associated with the transactions within Other Income (Expense) in the statements of consolidated income. As of September 30, 2025, $147 million was available to be factored under this program.
During the nine months ended September 30, 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 September 30, 2025 and December 31, 2024 was $176 and $136 million, respectively. Amounts for credit losses charged to expense, before recoveries, during the three months ended September 30, 2025 and 2024 were $95 and $75 million, respectively, and during the nine months ended September 30, 2025 and 2024 were $267 and $211 million, respectively.

Contract Assets and Liabilities
During the nine months ended September 30, 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 September 30, 2025 and December 31, 2024 were as follows (in millions):
Balance Sheet Location
September 30, 2025
 December 31, 2024
Contract Assets:
Revenue related to in-transit packages Other current assets $ 281  $ 307 
Contract Liabilities:
Short-term advance payments from customers Other current liabilities $ 15  $ 13 
Long-term advance payments from customers Other non-current liabilities $ 52  $ 27