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

SEGMENT AND GEOGRAPHIC INFORMATION

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SEGMENT AND GEOGRAPHIC INFORMATION
 12 Months Ended
Dec. 31, 2025
Segments, Geographical Areas [Abstract]  
SEGMENT AND GEOGRAPHIC INFORMATION
NOTE 14. SEGMENT AND GEOGRAPHIC 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 SCS. 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. SCS 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 SCS. This change aligns with how our chief operating decision maker ("CODM") 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. We offer a wide selection of guaranteed day- and time-definite international transportation services supported by our brokerage capabilities that facilitate cross‑border clearance for international shipments. International Package includes our operations in Europe, the Middle East and Africa ("EMEA"), Canada and Latin America (together "Americas") and Asia.
SCS
SCS includes our Forwarding, Logistics, digital and other businesses. Our Forwarding and Logistics businesses operate globally, offering 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 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 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 (expense) 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 second quarter of 2025, purchased transportation expense for the U.S. 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 2025 relative to 2024.
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.
Segment results of operations for 2025, 2024 and 2023 were as follows (in millions):
2025 2024 2023
U.S. Domestic Package:
Revenue $ 59,519  $ 60,376  $ 60,205 
Less:
Compensation 20,966  20,839  19,818 
Benefits 17,116  16,862  16,859 
Other segment items(1)
17,511  18,330  18,372 
U.S. Domestic Operating profit/(loss) $ 3,926  $ 4,345  $ 5,156 
International Package:
Revenue $ 18,576  $ 17,960  $ 17,831 
Less:
Compensation and benefits 4,052  3,783  3,794 
Purchased transportation 3,909  3,447  3,391 
Other segment items(1)
7,742  7,539  7,415 
International Operating profit/(loss) $ 2,873  $ 3,191  $ 3,231 
Reconciliation of revenue:
Total U.S. Domestic Package and International Package Revenue $ 78,095  $ 78,336  $ 78,036 
Other revenues(2)
10,566  12,734  12,922 
Total Consolidated Revenue $ 88,661  $ 91,070  $ 90,958 
Reconciliation of segment operating profit to income before income taxes:
Total U.S. Domestic Package and International Package Operating profit/(loss) $ 6,799  $ 7,536  $ 8,387 
Other profit/(loss)(2)
1,068  932  754 
Other pension income (expense)
 169  (396) (95)
Investment income (expense) and other
 145  236  314 
Interest expense (1,017) (866) (787)
Total Consolidated Income Before Income Taxes $ 7,164  $ 7,442  $ 8,573 
(1)    Other segment items include purchased transportation (applicable only to our U.S. Domestic Package 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.
Revenue by product type for 2025, 2024 and 2023 is provided in note 2.
The amounts of depreciation and amortization by reportable segment disclosed for 2025, 2024 and 2023 are included within the other segment items captions in the table below. These totals are presented after applying activity-based costing methods to allocate expenses between segments as noted above.
2025 2024 2023
Depreciation and amortization
U.S. Domestic Package $ 2,538  $ 2,470  $ 2,290 
International Package 834  777  742 
Other depreciation and amortization(1)
374  362  334 
Consolidated Depreciation and Amortization $ 3,746  $ 3,609  $ 3,366 
(1)    Depreciation and amortization from segments below the quantitative thresholds are attributable to operating segments which provide supply chain solutions.
Assets by reportable segment as of December 31, 2025 and 2024 consisted of the following (in millions):
2025 2024
Segment Assets
U.S. Domestic Package $ 38,359  $ 38,657 
International Package 18,214  18,300 
Other assets(1)
12,693  9,850 
Unallocated assets(2)
3,824  3,263 
Consolidated Assets $ 73,090  $ 70,070 
(1)    Assets from segments below the quantitative thresholds are attributable to operating segments which provide supply chain solutions.
(2)    Unallocated assets are comprised primarily of cash held by our centralized investment entity.
Geographic information for 2025, 2024 and 2023 is as follows (in millions):
2025 2024 2023
United States:
Revenue $ 67,432  $ 70,389  $ 71,749 
Long-lived assets $ 33,760  $ 33,173  $ 33,301 
International:
Revenue
 $ 21,229  $ 20,681  $ 19,209 
Long-lived assets
 $ 15,861  $ 13,304  $ 13,687 
Consolidated:
Revenue $ 88,661  $ 91,070  $ 90,958 
Long-lived assets $ 49,621  $ 46,477  $ 46,988 
Long-lived assets include property, plant and equipment, pension and postretirement benefit assets, long-term investments, goodwill and intangible assets.
No countries outside of the United States provided 10% or more of consolidated revenue for 2025, 2024 and 2023. For 2025, 2024 and 2023, Amazon.com, Inc. and its affiliates ("Amazon") represented 10.6%, 11.8% and 11.8% of our consolidated revenues, respectively. Substantially all of this revenue was attributed to U.S. Domestic Package. Amazon accounted for approximately 13.6% and 12.8% of Accounts receivable, net, included within our consolidated balance sheets as of December 31, 2025 and 2024, respectively.