Annual report pursuant to Section 13 and 15(d)

SEGMENT AND GEOGRAPHIC INFORMATION

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SEGMENT AND GEOGRAPHIC INFORMATION
 12 Months Ended
Dec. 31, 2022
Segments, Geographical Areas [Abstract]  
SEGMENT AND GEOGRAPHIC INFORMATION 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 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 – Segment Reporting.
U.S. Domestic Package
U.S. Domestic Package operations include the time-definite delivery of letters, documents and packages throughout the United States.
International Package
International Package operations include delivery to more than 220 countries and territories worldwide, including shipments wholly outside the United States, as well as shipments with either origin or destination outside the United States. Our International Package reporting segment includes our operations in Europe, Asia, the Indian sub-continent, the Middle East, Africa, Canada and Latin America.
Supply Chain Solutions
Supply Chain Solutions includes our Forwarding, Logistics, Coyote, Marken, UPS Mail Innovations and other businesses. Our Forwarding, Logistics and UPS Mail Innovations businesses provide services in more than 200 countries and territories worldwide and include international air and ocean freight forwarding, customs brokerage, distribution and post-sales services, mail and consulting services. Coyote offers truckload brokerage services, primarily in the United States. Marken and Bomi Group provide supply chain solutions to the healthcare and life sciences industry. Other businesses within this segment include The UPS Store, UPS Capital, Roadie, and Delivery Solutions.
In evaluating financial performance, we focus on operating profit as a segment’s measure of profit or loss. Operating profit is before investment income (expense) and other, interest expense and income tax expense. 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. In 2021, we updated our cost allocation methodology for aircraft engine maintenance expense to better align with aircraft utilization by segment, resulting in an immaterial reallocation of expense from our U.S. Domestic Package segment to our International Package segment.
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. Unallocated assets are comprised primarily of cash and marketable securities.
Segment information for the years ended December 31, 2022, 2021 and 2020 is as follows (in millions):
2022 2021 2020
Revenue:
U.S. Domestic Package $ 64,209  $ 60,317  $ 53,499 
International Package 19,698  19,541  15,945 
Supply Chain Solutions 16,431  17,429  15,184 
Consolidated revenue $ 100,338  $ 97,287  $ 84,628 
Operating Profit:
U.S. Domestic Package $ 6,997  $ 6,436  $ 3,891 
International Package 4,326  4,646  3,436 
Supply Chain Solutions 1,771  1,728  357 
Consolidated operating profit $ 13,094  $ 12,810  $ 7,684 
Assets:
U.S. Domestic Package $ 38,303  $ 35,746  $ 35,067 
International Package 17,670  17,225  15,717 
Supply Chain Solutions 10,407  9,556  9,041 
Unallocated 4,744  6,878  2,583 
Consolidated assets $ 71,124  $ 69,405  $ 62,408 
Depreciation and Amortization Expense:
U.S. Domestic Package $ 2,173  $ 2,058  $ 1,805 
International Package 761  685  597 
Supply Chain Solutions 254  210  296 
Consolidated depreciation and amortization expense $ 3,188  $ 2,953  $ 2,698 
Revenue by product type for the years ended December 31, 2022, 2021 and 2020 is as follows (in millions):
2022 2021 2020
U.S. Domestic Package:
Next Day Air $ 10,699  $ 10,009  $ 8,522 
Deferred 5,968  5,846  5,665 
Ground 47,542  44,462  39,312 
Total U.S. Domestic Package 64,209  60,317  53,499 
International Package:
Domestic 3,346  3,690  3,160 
Export 15,341  15,012  12,159 
Cargo 1,011  839  626 
Total International Package 19,698  19,541  15,945 
Supply Chain Solutions:
Forwarding 8,943  9,872  6,975 
Logistics 5,351  4,767  4,073 
Freight —  1,064  3,149 
Other 2,137  1,726  987 
Total Supply Chain Solutions 16,431  17,429  15,184 
Consolidated revenue $ 100,338  $ 97,287  $ 84,628 
Geographic information for the years ended December 31, 2022, 2021 and 2020 is as follows (in millions):
2022 2021 2020
United States:
Revenue $ 78,110  $ 74,376  $ 66,580 
Long-lived assets $ 32,002  $ 29,609  $ 28,354 
International:
Revenue $ 22,228  $ 22,911  $ 18,048 
Long-lived assets $ 12,991  $ 11,098  $ 10,213 
Consolidated:
Revenue $ 100,338  $ 97,287  $ 84,628 
Long-lived assets $ 44,993  $ 40,707  $ 38,567 
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 the years ended December 31, 2022, 2021 or 2020. For the years ended December 31, 2022, 2021 and 2020, Amazon.com, Inc. and its affiliates ("Amazon") represented 11.3%, 11.7% and 13.3% of our consolidated revenues, respectively. Substantially all of this revenue was attributed to U.S. Domestic Package. Amazon accounted for approximately 15.5%, 15.5% and 18.1% of accounts receivable, net, included within the consolidated balance sheets as of December 31, 2022, 2021 and 2020, respectively.