Quarterly report [Sections 13 or 15(d)]

EMPLOYEE BENEFIT PLANS

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EMPLOYEE BENEFIT PLANS
 9 Months Ended
Sep. 30, 2026
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS 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 and nine months ended September 30, 2026 and 2025 is as follows (in millions):
U.S. Pension Benefits U.S. Postretirement
Medical Benefits		 International
Pension Benefits
2026 2025 2026 2025 2026 2025
Three Months Ended September 30:
Service cost $ 269  $ 281  $ 4  $ 5  $ 9  $ 10 
Interest cost 701  679  25  28  16  17 
Expected return on assets (822) (787) (1) (2) (23) (21)
Amortization of prior service cost 36  39  —  —  1  — 
Net periodic benefit cost
 $ 184  $ 212  $ 28  $ 31  $ 3  $ 6 
U.S. Pension Benefits U.S. Postretirement
Medical Benefits		 International
Pension Benefits
2026 2025 2026 2025 2026 2025
Nine Months Ended September 30:
Service cost $ 805  $ 844  $ 12  $ 13  $ 27  $ 28 
Interest cost 2,101  2,038  75  82  50  49 
Expected return on assets (2,467) (2,342) (3) (5) (67) (62)
Amortization of prior service cost 110  117  —  —  1  1 
Net periodic benefit cost
 $ 549  $ 657  $ 84  $ 90  $ 11  $ 16 
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.
During the nine months ended September 30, 2026, we contributed $1.1 billion and $229 million to our company-sponsored pension and U.S. postretirement medical benefit plans, respectively. Included in these amounts are discretionary non-cash contributions made in August 2026 in the form of company-issued notes with principal amounts of $450 million. We do not expect material contributions over the remainder of the year to our company-sponsored pension and U.S. postretirement medical benefit plans.
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. These collective bargaining agreements include required contribution rates to the plans that we participate in, and we are in compliance with these contribution rates.
As of September 30, 2026 and December 31, 2025, we had $788 and $795 million, respectively, recorded in Other Non-Current Liabilities and $10 million and $9 million, respectively, 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 36 years. Based on borrowing rates available to us for long-term financing of a similar maturity, the fair value of this withdrawal liability as of September 30, 2026 and December 31, 2025 was $589 and $662 million, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability.
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 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, 2025, 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 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
In the U.S., we have certain employees covered by a national master agreement and various supplemental agreements with local unions affiliated with the Teamsters which run through July 31, 2028. In Canada, certain employees are covered by a collective bargaining agreement with the Teamsters which runs through July 31, 2030.
Certain of our pilots are employed under a collective bargaining agreement with the Independent Pilots Association ("IPA") which became amendable September 1, 2025. We are currently engaged in negotiations with the IPA.
Certain of our airline mechanics are covered by a collective bargaining agreement with Teamsters Local 2727 which becomes amendable November 1, 2029. In addition, certain auto and maintenance mechanics are employed under a collective bargaining agreement with the International Association of Machinists and Aerospace Workers which runs through July 31, 2029.