10-Q

United States

Securities and Exchange Commission

Washington, D.C. 20549

_____________________________________ 

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024 or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number 001-15451

_____________________________________ 

United Parcel Service, Inc.

(Exact name of registrant as specified in its charter)

Delaware			58-2480149
(State or Other Jurisdiction of Incorporation or Organization)			(IRS Employer Identification No.)
55 Glenlake Parkway N.E. ,	Atlanta,	Georgia	30328
(Address of Principal Executive Offices)			(Zip Code)

(404) 828-6000

(Registrant’s telephone number, including area code)

____________________ 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Class B common stock, par value $0.01 per share	UPS	New York Stock Exchange
1.625% Senior Notes due 2025	UPS25	New York Stock Exchange
1% Senior Notes due 2028	UPS28	New York Stock Exchange
1.500% Senior Notes due 2032	UPS32	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐   No  ☑

There were 126,159,503 Class A shares, and 729,399,444 Class B shares, with a par value of $0.01 per share, outstanding at April 17, 2024.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION
	Cautionary Statement About Forward-Looking Statements	1
Item 1.	Financial Statements	2
	Consolidated Balance Sheets	2
	Statements of Consolidated Income	3
	Statements of Consolidated Comprehensive Income (Loss)	3
	Statements of Consolidated Cash Flows	4
	Notes to Unaudited, Consolidated Financial Statements	5
	Note 1—Basis of Presentation and Accounting Policies	5
	Note 2—Recent Accounting Pronouncements	6
	Note 3—Revenue Recognition	7
	Note 4—Stock-Based Compensation	9
	Note 5—Marketable Securities and Non-Current Investments	11
	Note 6—Property, Plant and Equipment	14
	Note 7—Employee Benefit Plans	15
	Note 8—Goodwill and Intangible Assets	17
	Note 9—Debt and Financing Arrangements	19
	Note 10—Leases	21
	Note 11—Legal Proceedings and Contingencies	24
	Note 12—Shareowners’ Equity	25
	Note 13—Segment Information	29
	Note 14—Earnings Per Share	30
	Note 15—Derivative Instruments and Risk Management	31
	Note 16—Income Taxes	35
	Note 17—Transformation Costs	36
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
	Overview	37
	Supplemental Information - Items Affecting Comparability	39
	Results of Operations - Segment Review	41
	U.S. Domestic Package Operations	42
	International Package Operations	45
	Supply Chain Solutions Operations	48
	Consolidated Operating Expenses	50
	Other Income (Expense)	53
	Income Tax Expense	54
	Liquidity and Capital Resources	55
	Cash Flows From Operating Activities	55
	Cash Flows From Investing Activities	56
	Cash Flows From Financing Activities	57
	Sources of Credit	58
	Contractual Commitments	58
	Legal Proceedings and Contingencies	58
	Collective Bargaining Agreements	59
	Recent Accounting Pronouncements	59
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	60
Item 4.	Controls and Procedures	61
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 5.	Other Information	64
Item 6.	Exhibits	65

PART I. FINANCIAL INFORMATION

Cautionary Statement About Forward-Looking Statements

This report, our Annual Report on Form 10-K for the year ended December 31, 2023 and our other filings with the Securities and Exchange Commission contain and in the future may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than those of current or historical fact, and all statements accompanied by terms such as “will,” “believe,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” “target,” “plan,” and similar terms, are intended to be forward-looking statements. Forward-looking statements are made subject to the safe harbor provisions of the federal securities laws pursuant to Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

From time to time, we also include written or oral forward-looking statements in other publicly disclosed materials. Such statements may relate to our intent, belief, forecasts of, or current expectations about our strategic direction, prospects, future results, or future events; they do not relate strictly to historical or current facts. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any forward-looking statements because such statements speak only as of the date when made and the future, by its very nature, cannot be predicted with certainty.

Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. These risks and uncertainties include, but are not limited to: changes in general economic conditions in the United States ("U.S.") or internationally; significant competition on a local, regional, national and international basis; changes in our relationships with our significant customers; our ability to attract and retain qualified employees; strikes, work stoppages or slowdowns by our employees; increased or more complex physical or operational security requirements; a significant cybersecurity incident, or increased data protection regulations; our ability to maintain our brand image and corporate reputation; impacts from global climate change; interruptions in or impacts on our business from natural or man-made events or disasters including terrorist attacks, epidemics or pandemics; exposure to changing economic, political, regulatory and social developments in international and emerging markets; our ability to realize the anticipated benefits from acquisitions, dispositions, joint ventures or strategic alliances; the effects of changing prices of energy, including gasoline, diesel, jet fuel and other fuels, and interruptions in supplies of these commodities; changes in exchange rates or interest rates; our ability to accurately forecast our future capital investment needs; increases in our expenses or funding obligations relating to employee health, retiree health and/or pension benefits; our ability to manage insurance and claims expenses; changes in business strategy, government regulations or economic or market conditions that may result in impairments of our assets; potential additional U.S. or international tax liabilities; increasingly stringent regulations related to climate change; potential claims or litigation related to labor and employment, personal injury, property damage, business practices, environmental liability and other matters; and other risks discussed in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2023, and subsequently filed reports. You should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations, or the occurrence of unanticipated events after the date of those statements, except as required by law.

From time to time, we expect to participate in analyst and investor conferences. Materials provided or displayed at those conferences, such as slides and presentations, may be posted on our investor relations website at www.investors.ups.com under the heading "Presentations" when made available. These presentations may contain new material nonpublic information about our company and you are encouraged to monitor this site for any new posts, as we may use this mechanism as a public announcement.

1

Item 1. Financial Statements

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

March 31, 2024 (unaudited) and December 31, 2023 (in millions)

	March 31, 2024		December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	4,281	$	3,206
Marketable securities	232		2,866
Accounts receivable	9,698		11,342
Less: Allowance for credit losses	(144)		(126)
Accounts receivable, net	9,554		11,216
Materials and supplies	898		935
Other current assets	1,212		1,190
Total Current Assets	16,177		19,413
Property, Plant and Equipment, Net	37,168		36,945
Operating Lease Right-Of-Use Assets	4,223		4,308
Goodwill	4,846		4,872
Intangible Assets, Net	3,308		3,305
Deferred Income Tax Assets	126		126
Other Non-Current Assets	1,780		1,888
Total Assets	$	67,628	$	70,857
LIABILITIES AND SHAREOWNERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt, commercial paper and finance leases	$	1,164	$	3,348
Current maturities of operating leases	694		709
Accounts payable	5,397		6,340
Accrued wages and withholdings	3,217		3,224
Self-insurance reserves	1,325		1,320
Accrued group welfare and retirement plan contributions	1,573		1,479
Other current liabilities	1,326		1,256
Total Current Liabilities	14,696		17,676
Long-Term Debt and Finance Leases	18,849		18,916
Non-Current Operating Leases	3,690		3,756
Pension and Postretirement Benefit Obligations	6,323		6,159
Deferred Income Tax Liabilities	3,825		3,772
Other Non-Current Liabilities	3,312		3,264
Shareowners’ Equity:
Class A common stock (126 and 127 shares issued in 2024 and 2023, respectively)	2		2
Class B common stock (729 and 726 shares issued in 2024 and 2023, respectively)	7		7
Additional paid-in capital	—		—
Retained earnings	20,681		21,055
Accumulated other comprehensive loss	(3,781)		(3,758)
Deferred compensation obligations	6		9
Less: Treasury stock (0.1 and 0.2 shares in 2024 and 2023, respectively)	(6)		(9)
Total Equity for Controlling Interests	16,909		17,306
Noncontrolling interests	24		8
Total Shareowners’ Equity	16,933		17,314
Total Liabilities and Shareowners’ Equity	$	67,628	$	70,857

See notes to unaudited, consolidated financial statements.

2

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED INCOME

(In millions, except per share amounts)

(unaudited)

 

	Three Months Ended  March 31,
	2024		2023
Revenue	$	21,706	$	22,925
Operating Expenses:
Compensation and benefits	11,639		11,464
Repairs and maintenance	718		725
Depreciation and amortization	898		834
Purchased transportation	3,246		3,541
Fuel	1,060		1,271
Other occupancy	564		551
Other expenses	1,968		1,998
Total Operating Expenses	20,093		20,384
Operating Profit	1,613		2,541
Other Income (Expense):
Investment income and other	118		169
Interest expense	(195)		(188)
Total Other Income (Expense)	(77)		(19)
Income Before Income Taxes	1,536		2,522
Income Tax Expense	423		627
Net Income	$	1,113	$	1,895
Basic Earnings Per Share	$	1.30	$	2.20
Diluted Earnings Per Share	$	1.30	$	2.19

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)

(In millions)

(unaudited)

 

	Three Months Ended  March 31,
	2024		2023
Net Income	$	1,113	$	1,895
Change in foreign currency translation adjustment, net of tax	(125)		118
Change in unrealized gain (loss) on marketable securities, net of tax	(1)		7
Change in unrealized gain (loss) on cash flow hedges, net of tax	73		(77)
Change in unrecognized pension and postretirement benefit costs, net of tax	30		20
Comprehensive Income	$	1,090	$	1,963

See notes to unaudited, consolidated financial statements.

3

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED CASH FLOWS

(In millions)

(unaudited)

	Three Months Ended  March 31,
	2024		2023
Cash Flows From Operating Activities:
Net income	$	1,113	$	1,895
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	898		834
Pension and postretirement benefit expense	259		243
Pension and postretirement benefit contributions	(50)		(1,277)
Self-insurance reserves	27		(20)
Deferred tax (benefit) expense	22		56
Stock compensation expense	(27)		126
Other (gains) losses	129		(13)
Changes in assets and liabilities, net of effects of business acquisitions:
Accounts receivable	1,492		2,254
Other assets	55		62
Accounts payable	(799)		(1,668)
Accrued wages and withholdings	12		(508)
Other liabilities	185		405
Other operating activities	—		(32)
Net cash from operating activities	3,316		2,357
Cash Flows From Investing Activities:
Capital expenditures	(1,035)		(609)
Proceeds from disposal of businesses, property, plant and equipment	13		5
Purchases of marketable securities	(50)		(2,371)
Sales and maturities of marketable securities	2,696		1,179
Acquisitions, net of cash acquired	(44)		(34)
Other investing activities	(14)		17
Net cash (used in) from investing activities	1,566		(1,813)
Cash Flows From Financing Activities:
Net change in short-term debt	(1,272)		—
Proceeds from long-term borrowings	—		2,503
Repayments of long-term borrowings	(926)		(65)
Purchases of common stock	—		(751)
Issuances of common stock	54		49
Dividends	(1,348)		(1,348)
Other financing activities	(174)		(384)
Net cash (used in) from financing activities	(3,666)		4
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	(48)		40
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	1,168		588
Cash, Cash Equivalents and Restricted Cash:
Beginning of period	3,206		5,602
End of period	$	4,374	$	6,190

See notes to unaudited, consolidated financial statements.

4

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Principles of Consolidation

The accompanying unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited, consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of March 31, 2024 and our results of operations and cash flows for the three months ended March 31, 2024 and 2023. The results reported in these unaudited, consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. The unaudited, consolidated financial statements should be read in conjunction with the audited, consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Fair Value of Financial Instruments

The carrying amounts of our cash and cash equivalents, accounts receivable, finance receivables and accounts payable approximated fair value as of March 31, 2024 and December 31, 2023. The fair values of our marketable securities are disclosed in note 5, our recognized multiemployer pension withdrawal liabilities in note 7, our short- and long-term debt in note 9 and our derivative instruments in note 15. We apply a fair value hierarchy (Levels 1, 2 and 3) when measuring and reporting items at fair value. Fair values are based on listed market prices (Level 1), when such prices are available. To the extent that listed market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations (Level 2). If listed market prices or other relevant factors are not available, inputs are developed from unobservable data reflecting our own assumptions and include situations where there is little or no market activity for the asset or liability (Level 3).

Use of Estimates

The preparation of the accompanying unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of these financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. As a result, our accounting estimates and assumptions may change significantly over time.

Supplier Finance Programs

As part of our working capital management, certain financial institutions offer a Supply Chain Finance ("SCF") program to certain of our suppliers. We agree to commercial terms with our suppliers, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program. Suppliers issue invoices to us based on the agreed-upon contractual terms. If they participate in the SCF program, our suppliers, at their sole discretion, determine which invoices, if any, to sell to the financial institutions. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms. No guarantees are provided by us under the SCF program. We have no economic interest in a supplier’s decision to participate, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program.

Amounts due to our suppliers that participate in the SCF program are included in Accounts payable in our consolidated balance sheets. We have been informed by the participating financial institutions that as of March 31, 2024 and December 31, 2023, suppliers sold them $406 and $504 million, respectively, of our outstanding payment obligations.

Restricted cash

As of March 31, 2024 and December 31, 2023, we had $93 and $37 million, respectively of restricted cash. As of March 31, 2024, this restricted cash is included in Other Non-Current Assets in our consolidated balance sheet and is included in Total cash, cash equivalents and restricted cash in our statement of consolidated cash flows. The restricted cash primarily relates to cash we have agreed to deposit in connection with a challenge by Italian tax authorities to the deductibility of Value Added Tax payments by UPS to certain third-party service providers, a review of which was launched in the fourth quarter of 2023. We are cooperating in this matter and believe that we have a number of meritorious defenses.

5

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS

Adoption of New Accounting Standards

Accounting pronouncements adopted during the periods covered by the unaudited, consolidated financial statements did not have a material impact on our consolidated financial position, results of operations, cash flows or internal controls.

Accounting Standards Issued But Not Yet Effective

In November 2023, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") on segment reporting, which will require new disclosures, including significant segment expenses and additional qualitative information about how segment measures are used by management. The standard becomes effective for us beginning with our 2024 annual reporting and for both annual and interim periods thereafter. We are evaluating the impact of this ASU on our disclosures. We will be required to define significant segment expense categories and we anticipate providing additional qualitative information in accordance with this ASU. We do not expect this ASU will have a significant impact on our consolidated financial position, results of operations or cash flows.

In December 2023, the FASB issued an ASU to enhance tax-related disclosures. This update will require more standardized categories for tax rate reconciliation and additional detail for significant tax items. It will also require a breakdown of income taxes paid by jurisdiction exceeding 5% of total taxes and remove certain disclosure requirements for unremitted foreign earnings and uncertain tax positions. The standard becomes effective for us in the first quarter of 2025. We are evaluating its impact on our financial statements, disclosures and internal controls but do not expect this ASU will have a significant impact on our consolidated financial position, results of operations, cash flows or internal controls.

Other accounting pronouncements issued before, but not effective until after, March 31, 2024, are not expected to have a material impact on our consolidated financial position, results of operations, cash flows or internal controls.

6

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. 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  March 31,
	2024		2023
Revenue:
Next Day Air	$	2,316	$	2,461
Deferred	1,156		1,194
Ground	10,762		11,332
U.S. Domestic Package	14,234		14,987
Domestic	758		794
Export	3,350		3,552
Cargo & Other	148		197
International Package	4,256		4,543
Forwarding	1,280		1,514
Logistics	1,542		1,410
Other	394		471
Supply Chain Solutions	3,216		3,395
Consolidated revenue	$	21,706	$	22,925

Contract Assets and Liabilities

Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment only when services have been completed (i.e. shipments have been delivered). Amounts do not exceed their net realizable value. Contract assets are generally classified as current and the full balance is converted each quarter based on the short-term nature of the transactions.

Contract liabilities consist of advance payments and billings in excess of revenue as well as deferred revenue. Advance payments and billings in excess of revenue represent payments received from our customers that will be earned over the contract term. Deferred revenue represents the amount due from customers related to in-transit shipments that has not yet been recognized as revenue based on our selected measure of progress. We classify advance payments and billings in excess of revenue as either current or long-term, depending on the period over which the amount will be earned. We classify deferred revenue as current based on the short-term nature of the transactions. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. In order to determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that deferred revenue balance.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Contract assets and liabilities as of March 31, 2024 and December 31, 2023 were as follows (in millions):

	Balance Sheet Location	March 31, 2024		December 31, 2023
Contract Assets:
Revenue related to in-transit packages	Other current assets	$	269	$	237
Contract Liabilities:
Short-term advance payments from customers	Other current liabilities	$	13	$	20
Long-term advance payments from customers	Other non-current liabilities	$	26	$	25

Accounts Receivable, Net

Accounts receivable, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. Losses on accounts receivable are recognized when reasonable and supportable forecasts affect the expected collectability. This requires us to make our best estimate of the current expected losses inherent in our accounts receivable at each balance sheet date. This estimate requires consideration of historical loss experience, adjusted for current conditions, forward looking indicators, trends in customer payment frequency and judgments about the probable effects of relevant observable data, including present and future economic conditions and the financial health of specific customers and market sectors. Our risk management process includes standards and policies for reviewing major account exposures and concentrations of risk.

Our allowance for credit losses as of March 31, 2024 and December 31, 2023 was $144 and $126 million, respectively. Amounts for credit losses charged to expense, before recoveries, during each of the three months ended March 31, 2024 and 2023 were $73 and $43 million, respectively.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4. STOCK-BASED COMPENSATION

We issue share-based awards under various incentive compensation plans, including non-qualified and incentive stock options, stock appreciation rights, restricted stock and stock units ("RSUs") and restricted performance shares and performance units ("RPUs", collectively with RSUs, "Restricted Units"). Upon vesting, Restricted Units result in the issuance of the equivalent number of UPS class A common shares after required tax withholdings. Dividends earned on Restricted Units are reinvested in additional Restricted Units at each dividend payable date until conversion to class A shares occurs.

Our primary equity compensation programs are the UPS Long-Term Incentive Performance Award program (the "LTIP") and the UPS Stock Option program. We also grant Restricted Units to our Board of Directors (the "Board") as a component of their annual compensation and, from time to time, to individual employees as a retention mechanism. We also maintain an employee stock purchase plan which allows eligible employees to purchase shares of UPS class A common stock at a discount.

Pre-tax compensation expense for stock compensation awards recognized in Compensation and benefits in the statements of consolidated income for the three months ended March 31, 2024 and 2023 was $(27) and $126 million, respectively.

Management Incentive Award Program

The UPS Management Incentive Program (the "MIP") is an incentive-based compensation program, with awards based on annual Company performance. MIP awards are paid in cash, unless a participant elects to receive all or a portion of the award in unrestricted shares of class A common stock. As of March 31, 2024, the MIP was classified as a compensation obligation within Accrued wages and withholdings in our consolidated balance sheet.

Long-Term Incentive Performance Program

RPUs issued under the LTIP vest at the end of a three-year performance period, subject to continued employment with the Company (except in the case of death, disability or retirement, in which case immediate vesting occurs on a prorated basis). The actual number of RPUs earned is based on achievement of the performance targets established on the grant date.

The performance targets are equally weighted between adjusted earnings per share and cumulative free cash flow. The final number of RPUs earned will then be subject to adjustment based on total shareholder return relative to the Standard & Poor's 500 Index. We determine the grant date fair value of the RPUs using a Monte Carlo model and recognize compensation expense (less estimated forfeitures) ratably over the vesting period, based on the number of awards expected to be earned.

Based on the date of the Compensation and Human Capital Committee of the Board's approval of the 2024 LTIP award performance targets, we determined March 20, 2024 to be the award measurement date and each target RPU awarded was valued at $158.16.

The weighted-average assumptions used and the weighted-average fair values of the LTIP awards granted in 2024 and 2023 are as follows:

	2024			2023
Risk-free interest rate	4.45		%	3.81		%
Expected volatility	27.00		%	30.30		%
Weighted-average fair value of units granted	$	158.16		$	200.01
Share payout	102.20		%	107.80		%

There is no expected dividend yield as units earn dividend equivalents.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Non-Qualified Stock Options

We grant non-qualified stock options to a limited group of eligible senior management employees under the UPS Stock Option program. Stock option awards vest over a five-year period with approximately 20% of the award vesting at each anniversary of the grant date (except in the case of death, disability or retirement, in which case immediate vesting occurs). The option grants expire 10 years after the date of the grant. On March 20, 2024, we granted 0.2 million stock options at an exercise price of $154.76, the New York Stock Exchange closing price on that date.

The fair value of each option granted is estimated using a Black-Scholes option pricing model. The weighted-average assumptions used and the weighted-average fair values of options granted in 2024 and 2023 are as follows:

	2024			2023
Expected dividend yield	3.96		%	3.54		%
Risk-free interest rate	4.25		%	3.70		%
Expected life (in years)	6.13			5.93
Expected volatility	28.94		%	28.31		%
Weighted-average fair value of options granted	$	34.76		$	41.08

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5. MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS

The following is a summary of marketable securities classified as trading and available for sale as of March 31, 2024 and December 31, 2023 (in millions):

	Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
March 31, 2024:
Current trading marketable securities:
Equity securities	$	3	$	—	$	—	$	3
Total trading marketable securities	3		—		—		3
Current available-for-sale securities:
U.S. government and agency debt securities	200		—		(2)		198
Mortgage and asset-backed debt securities	—		—		—		—
Corporate debt securities	32		—		(1)		31
Non-U.S. government debt securities	—		—		—		—
Total available-for-sale marketable securities	232		—		(3)		229
Total current marketable securities	$	235	$	—	$	(3)	$	232
	Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
December 31, 2023:
Current trading marketable securities:
Equity securities	$	4	$	—	$	—	$	4
Total trading marketable securities	4		—		—		4
Current available-for-sale securities:
U.S. government and agency debt securities	963		2		(4)		961
Mortgage and asset-backed debt securities	3		—		—		3
Corporate debt securities	1,891		4		(4)		1,891
Non-U.S. government debt securities	7		—		—		7
Total available-for-sale marketable securities	2,864		6		(8)		2,862
Total current marketable securities	$	2,868	$	6	$	(8)	$	2,866

Investment Impairments

We have concluded that no material impairment losses existed within marketable securities as of March 31, 2024. In making this determination, we considered the financial condition and prospects of each issuer, the magnitude of the losses compared with the cost, the probability that we will be unable to collect all amounts due according to the contractual terms of the security, the credit rating of the security and our ability and intent to hold these investments until the anticipated recovery in market value occurs.

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Maturity Information

The amortized cost and estimated fair value of marketable securities as of March 31, 2024 by contractual maturity are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations with or without prepayment penalties.

	Cost		Estimated Fair Value
Due in one year or less	$	70	$	69
Due after one year through three years	162		160
Due after three years through five years	—		—
Due after five years	—		—
	232		229
Equity securities	3		3
	$	235	$	232

Non-Current Investments

We hold non-current investments that are reported within Other Non-Current Assets in our consolidated balance sheets. Cash paid for these investments is included in Other investing activities in our statements of consolidated cash flows.

•Equity method investments: As of March 31, 2024 and December 31, 2023, equity securities accounted for under the equity method had a carrying value of $293 and $295 million, respectively.

•Other equity securities: Certain equity securities that do not have readily determinable fair values are reported in accordance with the measurement alternative in ASC Topic 321 Investments - Equity Securities. Equity securities accounted for under the measurement alternative had a carrying value of $47 million as of both March 31, 2024 and December 31, 2023.

•Other investments: We hold an investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan. The investment had a fair market value of $19 million as of both March 31, 2024 and December 31, 2023.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements

Marketable securities valued utilizing Level 1 inputs include active exchange-traded equity securities and equity index funds, and most U.S. government debt securities, as these securities all have quoted prices in active markets. Marketable securities valued utilizing Level 2 inputs include asset-backed securities, corporate bonds and municipal bonds. These securities are valued using market corroborated pricing, matrix pricing or other models that utilize observable inputs such as yield curves.

The following table presents information about our investments measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
March 31, 2024:
Marketable Securities:
U.S. government and agency debt securities	$	198	$	—	$	—	$	198
Mortgage and asset-backed debt securities	—		—		—		—
Corporate debt securities	—		31		—		31
Equity securities	—		3		—		3
Non-U.S. government debt securities	—		—		—		—
Total marketable securities	198		34		—		232
Other non-current investments(1)	—		19		—		19
Total	$	198	$	53	$	—	$	251

(1)    Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2023:
Marketable Securities:
U.S. government and agency debt securities	$	961	$	—	$	—	$	961
Mortgage and asset-backed debt securities	—		3		—		3
Corporate debt securities	—		1,891		—		1,891
Equity securities	—		4		—		4
Non-U.S. government debt securities	—		7		—		7
Total marketable securities	961		1,905		—		2,866
Other non-current investments(1)	—		19		—		19
Total	$	961	$	1,924	$	—	$	2,885

(1)    Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.

There were no transfers of investments into or out of Level 3 during the three months ended March 31, 2024 or 2023.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of March 31, 2024 and December 31, 2023 consisted of the following (in millions):

	2024		2023
Vehicles	$	11,970	$	11,768
Aircraft	23,117		22,888
Land	2,129		2,138
Buildings	6,282		6,255
Building and leasehold improvements	5,295		5,241
Plant equipment	18,109		17,322
Technology equipment	2,677		2,656
Construction-in-progress	2,634		3,247
	72,213		71,515
Less: Accumulated depreciation and amortization	(35,045)		(34,570)
Property, Plant and Equipment, Net	$	37,168	$	36,945

Property, plant and equipment purchased on account was $204 and $309 million as of March 31, 2024 and December 31, 2023, respectively. 

There were no material impairment charges for the three months ended March 31, 2024 or 2023.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7. 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 months ended March 31, 2024 and 2023 is as follows (in millions):

	U.S. Pension Benefits				U.S. Postretirement Medical Benefits				International Pension Benefits
	2024		2023		2024		2023		2024		2023
Three Months Ended March 31:
Service cost	$	310	$	293	$	5	$	5	$	11	$	11
Interest cost	644		627		27		29		17		17
Expected return on assets	(771)		(742)		(1)		(3)		(21)		(21)
Amortization of prior service cost	38		27		—		—		—		—
Net periodic benefit cost	$	221	$	205	$	31	$	31	$	7	$	7

The components of net periodic benefit cost other than current service cost are presented within Investment income and other in the statements of consolidated income.

During the three months ended March 31, 2024, we contributed $19 million and $31 million to our company-sponsored pension and U.S. postretirement medical benefit plans, respectively. We expect to contribute approximately $87 million over the remainder of the year to our 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. Our current collective bargaining agreements set forth the annual contribution increases allotted to the plans that we participate in, and we are in compliance with these contribution rates. These limitations on annual contribution rates will remain in effect throughout the terms of the existing collective bargaining agreements.

As of March 31, 2024 and December 31, 2023, we had $811 and $813 million, respectively, recorded in Other Non-Current Liabilities in our consolidated balance sheets and $9 million as of both March 31, 2024 and December 31, 2023 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 39 years. Based on the borrowing rates currently available to us for long-term financing of a similar maturity, the fair value of this withdrawal liability as of March 31, 2024 and December 31, 2023 was $685 and $710 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 (“IBT”), 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.

Subsequent to our withdrawal, the CSPF incurred extensive asset losses and indicated that it was projected to become insolvent. In such event, the CSPF benefits would be reduced to the legally permitted Pension Benefit Guaranty Corporation ("PBGC") limits, triggering the coordinating benefits provision in the collective bargaining agreement.

In 2021, the American Rescue Plan Act ("ARPA") was enacted into law. The ARPA contains provisions that allow for qualifying multiemployer pension plans to apply for special financial assistance ("SFA") from the PBGC, which will be funded by the U.S. government. Following SFA approval, a qualifying multiemployer pension plan will receive a lump sum payment to enable it to continue paying unreduced pension benefits through 2051. The multiemployer plan is not obligated to repay the SFA. The ARPA is intended to prevent both the PBGC and certain financially distressed multiemployer pension plans, including the CSPF, from becoming insolvent through 2051. The CSPF submitted an application for SFA that was approved in December 2022. In January 2023, $35.8 billion was paid to the CSPF by the PBGC.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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, 2023, our best estimate of coordinating benefits that may be required to be paid by the UPS/IBT Plan after SFA funds have been exhausted was immaterial.

The value of our estimate for future coordinating benefits will continue to be influenced by a number of factors, including interpretations of the ARPA, 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

We have approximately 310,000 employees in the U.S. employed under a national master agreement and various supplemental agreements with local unions affiliated with the Teamsters. These agreements are scheduled to expire on July 31, 2028.

We have approximately 10,000 employees in Canada employed under a collective bargaining agreement with the Teamsters which runs through July 31, 2025.

We have approximately 3,300 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association. This collective bargaining agreement becomes amendable September 1, 2025.

We have approximately 1,900 airline mechanics who are covered by a collective bargaining agreement with Teamsters Local 2727 which becomes amendable November 1, 2026. In addition, approximately 3,000 of our auto and maintenance mechanics who are not employed under agreements with the Teamsters are employed under collective bargaining agreements with the International Association of Machinists and Aerospace Workers. These collective bargaining agreements run through July 31, 2024.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8. GOODWILL AND INTANGIBLE ASSETS

The following table indicates the allocation of goodwill as of March 31, 2024 and December 31, 2023 (in millions):

	U.S. Domestic Package		International Package		Supply Chain Solutions		Consolidated
December 31, 2023:	$	847	$	503	$	3,522	$	4,872
Acquired	—		—		8		8
Currency / Other	—		(7)		(27)		(34)
March 31, 2024:	$	847	$	496	$	3,503	$	4,846

Changes in goodwill during the three months ended March 31, 2024 resulted from:

•An increase in goodwill of $8 million, as part of purchase accounting allocations relating to our acquisitions of MNX Global Logistics and Happy Returns in the fourth quarter of 2023. Certain areas of purchase accounting, including our estimates of tax positions, remain preliminary as of March 31, 2024.

•The remaining movements are due to the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. Dollar goodwill balances.

As of March 31, 2024, none of our reporting units had indications that an impairment was more likely than not. Approximately $1.5 billion of our consolidated goodwill balance of $4.8 billion is represented by our Global Freight Forwarding, our truckload brokerage ("Coyote") and Roadie reporting units which, based on our quarterly monitoring, are exhibiting a limited excess of fair value above carrying value and reflect a greater risk of an impairment occurring in future periods. We do not expect any impairment would have a significant impact on our consolidated financial position, results of operations or cash flows.

Actual reporting unit performance, revisions to our forecasts of future performance, market factors, changes in estimates or assumptions in connection with our annual testing, or a combination thereof could result in an impairment charge in one or more of our reporting units during a future period. We continue to monitor business performance and external factors affecting our reporting units.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of intangible assets as of March 31, 2024 and December 31, 2023 (in millions):

	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
March 31, 2024:
Capitalized software	$	5,923	$	(4,007)	$	1,916
Licenses	45		(13)		32
Franchise rights	332		(48)		284
Customer relationships	1,114		(537)		577
Trade name	112		(19)		93
Trademarks, patents and other	377		(64)		313
Amortizable intangible assets	$	7,903	$	(4,688)	$	3,215
Indefinite-lived intangible assets	93		—		93
Total Intangible Assets, Net	$	7,996	$	(4,688)	$	3,308
December 31, 2023:
Capitalized software	$	5,839	$	(3,900)	$	1,939
Licenses	30		(7)		23
Franchise rights	291		(49)		242
Customer relationships	1,115		(516)		599
Trade name	172		(30)		142
Trademarks, patents and other	320		(53)		267
Amortizable intangible assets	$	7,767	$	(4,555)	$	3,212
Indefinite-lived intangible assets	93		—		93
Total Intangible Assets, Net	$	7,860	$	(4,555)	$	3,305

A trade name and licenses with carrying values of $89 and $4 million, respectively, as of March 31, 2024 are deemed to be indefinite-lived intangible assets, and therefore are not amortized.

As of March 31, 2024, the estimated fair value of the indefinite-lived trade name associated with Coyote remained greater than its carrying value by less than 10 percent. The carrying value of this trade name is $89 million. Our truckload brokerage business continues to be negatively impacted by market conditions, which has resulted in revenue declines. We continue to monitor business performance and external factors affecting our valuation assumptions for this trade name. There were no events or changes in circumstances as of March 31, 2024 that would indicate the carrying amounts of our indefinite-lived intangible assets may be impaired as of the date of this report.

For the three months ended March 31, 2024, we recorded impairment charges related to finite-lived intangible assets of $48 million ($35 million after tax, or $0.04 per diluted share) within Other Expenses in our statement of consolidated income. These charges represented capitalized software license impairments of $7 million and a $41 million charge to write down the value of certain trade names acquired as part of our acquisition of Bomi Group as we consolidate our brands. There were no impairment charges for finite-lived intangible assets for the three months ended March 31, 2023.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9. DEBT AND FINANCING ARRANGEMENTS

The carrying value of our outstanding debt obligations as of March 31, 2024 and December 31, 2023 consisted of the following (in millions):

	Principal Amount			Carrying Value
			Maturity	2024		2023
Commercial paper	$	—		$	—	$	2,172
Fixed-rate senior notes:
2.800% senior notes	500		2024	500		499
2.200% senior notes	400		2024	400		400
3.900% senior notes	1,000		2025	999		999
2.400% senior notes	500		2026	499		499
3.050% senior notes	1,000		2027	996		996
3.400% senior notes	750		2029	747		747
2.500% senior notes	400		2029	398		398
4.450% senior notes	750		2030	745		745
4.875% senior notes	900		2033	895		894
6.200% senior notes	1,500		2038	1,485		1,485
5.200% senior notes	500		2040	494		494
4.875% senior notes	500		2040	491		491
3.625% senior notes	375		2042	369		369
3.400% senior notes	500		2046	492		492
3.750% senior notes	1,150		2047	1,138		1,138
4.250% senior notes	750		2049	743		743
3.400% senior notes	700		2049	689		689
5.300% senior notes	1,250		2050	1,232		1,232
5.050% senior notes	1,100		2053	1,083		1,083
Floating-rate senior notes:
Floating-rate senior notes	1,562		2049-2073	1,544		1,545
Debentures:
7.620% debentures	276		2030	280		280
Pound Sterling notes:
5.500% notes	84		2031	83		84
5.125% notes	574		2050	546		550
Euro senior notes:
1.625% senior notes	755		2025	754		774
1.000% senior notes	539		2028	537		551
1.500% senior notes	539		2032	537		551
Canadian senior notes:
2.125% senior notes	554		2024	554		566
Finance lease obligations (see note 10)	460		2024-2046	460		472
Facility notes and bonds	320		2029-2045	320		320
Other debt	3		2024-2025	3		6
Total debt	$	20,191		20,013		22,264
Less: current maturities				(1,164)		(3,348)
Long-term debt				$	18,849	$	18,916

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Commercial Paper

We are authorized to borrow up to $10.0 billion under a U.S. commercial paper program and €5.0 billion (in a variety of currencies) under a European commercial paper program. There was no commercial paper outstanding as of March 31, 2024. The amount of commercial paper outstanding under these programs in 2024 is expected to fluctuate.

Debt Classification

We have classified certain floating-rate senior notes that are redeemable at the option of the note holder as long-term debt in our consolidated balance sheets, due to our intent and ability to refinance the debt if the put option is exercised. As of March 31, 2024, we continued to classify our 2.200% senior notes with a principal balance of $400 million that mature in September 2024 as long-term debt in our consolidated balance sheet due to our intent and ability to refinance the debt.

Sources of Credit

We maintain two credit agreements with a consortium of banks. The first of these agreements provides revolving credit facilities of $1.0 billion, and expires on December 3, 2024. Amounts outstanding under this agreement bear interest at a periodic fixed rate equal to the term SOFR rate, plus 0.10% per annum and an applicable margin based on our then-current credit rating. The applicable margin from the credit pricing grid as of March 31, 2024 was 0.70%. Alternatively, a fluctuating rate of interest equal to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in the United States; (2) the Federal Funds effective rate plus 0.50%; or (3) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00%, may be used at our discretion.

The second agreement provides revolving credit facilities of $2.0 billion, and expires on December 7, 2026. Amounts outstanding under this facility bear interest at a periodic fixed rate equal to the term SOFR rate plus 0.10% per annum and an applicable margin based on our then-current credit rating. The applicable margin from the credit pricing grid as of March 31, 2024 was 0.875%. Alternatively, a fluctuating rate of interest equal to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in the United States; (2) the Federal Funds effective rate plus 0.50%; or (3) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00%, plus an applicable margin, may be used at our discretion.

If the credit ratings established by Standard & Poor's and Moody's differ, the higher rating will be used, except in cases where the lower rating is two or more levels lower. In these circumstances, the rating one step below the higher rating will be used. We are also able to request advances under these facilities based on competitive bids for the applicable interest rate.

There were no amounts outstanding under these facilities as of March 31, 2024.

Debt Covenants

Our existing debt instruments and credit facilities subject us to certain financial covenants. As of March 31, 2024, and for all prior periods presented, we have satisfied these financial covenants. These covenants limit the amount of secured indebtedness that we may incur, and limit the amount of attributable debt in sale-leaseback transactions, to 10% of net tangible assets. As of March 31, 2024, 10% of net tangible assets was equivalent to $4.5 billion and we had no covered sale-leaseback transactions or secured indebtedness outstanding. We do not expect these covenants to have a material impact on our liquidity.

Fair Value of Debt    

Based on the borrowing rates currently available to us for long-term debt with similar terms and maturities, the fair value of long-term debt, including current maturities, was approximately $19.4 and $22.1 billion as of March 31, 2024 and December 31, 2023, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of all of our debt instruments.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. LEASES

We have finance and operating leases for real estate (primarily package centers, airport facilities and warehouses), aircraft and engines, information technology equipment, vehicles and various other equipment used in operating our business. Certain leases for real estate and aircraft contain options to purchase, extend or terminate the lease.

Aircraft

In addition to the aircraft that we own, we charter aircraft to handle package and cargo volume on certain international trade lanes and domestic routes. Due to the nature of these agreements, primarily being that either party can cancel the agreement with short notice, we have classified these as short-term leases. A majority of our long-term aircraft operating leases are operated by a third party to handle package and cargo volume in geographic regions where, due to government regulations, we are restricted from operating an airline.

Transportation equipment and other equipment

We enter into both long-term and short-term leases for transportation equipment to supplement our capacity or meet contractual demands. Some of these assets are leased on a month-to-month basis and the leases can be terminated without penalty. We also enter into equipment leases to increase capacity during periods of high demand. These leases are treated as short-term as the cumulative right of use is less than 12 months over the term of the contract.

Some of our transportation and technology equipment leases require us to make additional lease payments based on the underlying usage of the assets. Due to the variable nature of these costs, these are expensed as incurred and are not included in the right of use lease asset and associated lease obligation.

The components of lease expense for the three months ended March 31, 2024 and 2023 were as follows (in millions):

	2024		2023
Operating lease costs	$	231	$	207
Finance lease costs:
Amortization of assets	35		29
Interest on lease liabilities	5		4
Total finance lease costs	40		33
Variable lease costs	76		72
Short-term lease costs	199		277
Total lease costs(1)	$	546	$	589
(1) This table excludes sublease income as it was not material for the three months ended March 31, 2024 or 2023.

In addition to the lease costs disclosed in the table above, we monitor all lease categories for any indicators that the carrying value of the assets may not be recoverable. There were no material lease impairments recognized during the three months ended March 31, 2024 or 2023.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental information related to leases and location within our consolidated balance sheets is as follows (in millions, except lease term and discount rate):

	March 31, 2024			December 31, 2023
Operating Leases:
Operating lease right-of-use assets	$	4,223		$	4,308
Current maturities of operating leases	$	694		$	709
Non-current operating leases	3,690			3,756
Total operating lease obligations	$	4,384		$	4,465
Finance Leases:
Property, plant and equipment, net	$	727		$	856
Current maturities of long-term debt, commercial paper and finance leases	$	108		$	104
Long-term debt and finance leases	352			368
Total finance lease obligations	$	460		$	472
Weighted average remaining lease term (in years):
Operating leases	10.7			10.8
Finance leases	7.2			7.4
Weighted average discount rate:
Operating leases	3.30		%	3.20		%
Finance leases	3.91		%	3.88		%

Supplemental cash flow information related to leases is as follows (in millions):

	Three Months Ended  March 31,
	2024		2023
Cash paid for amounts included in measurement of obligations:
Operating cash flows from operating leases	$	227	$	212
Operating cash flows from finance leases	3		1
Financing cash flows from finance leases	26		48
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	151	$	498
Finance leases	$	14	$	30

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Maturities of lease obligations as of March 31, 2024 were as follows (in millions):

	Finance Leases		Operating Leases
2024	$	101	$	609
2025	102		807
2026	77		697
2027	47		596
2028	41		449
Thereafter	173		2,102
Total lease payments	541		5,260
Less: Imputed interest	(81)		(876)
Total lease obligations	460		4,384
Less: Current obligations	(108)		(694)
Long-term lease obligations	$	352	$	3,690

As of March 31, 2024, we had $720 million of additional leases which had not commenced. These leases will commence later in 2024 or in 2025 when we are granted access to the property, such as when leasehold improvements are completed by the lessor or a certificate of occupancy is obtained.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11. LEGAL PROCEEDINGS AND CONTINGENCIES

We are involved in a number of judicial proceedings and other matters arising from the conduct of our business.

Although there can be no assurances as to the ultimate outcome, we have generally denied, or believe we have meritorious defenses and will deny, liability in pending matters, including (except as may be otherwise noted herein) the matters described below, and we intend to vigorously defend each matter. We accrue amounts associated with judicial proceedings and other contingencies when and to the extent a loss becomes probable and can be reasonably estimated. The actual costs of resolving legal proceedings may be substantially higher or lower than the amounts accrued on those claims.

For matters as to which we are not able to estimate a possible loss or range of losses, we are not able to determine whether any such loss will have a material impact on our operations or financial condition. For these matters, we have described the reasons that we are unable to estimate a possible loss or range of losses.

Judicial Proceedings

We are a defendant in a number of lawsuits filed in state and federal courts containing various class action allegations under state wage-and-hour laws. We do not believe that any loss associated with any such matter will have a material impact on our financial condition, results of operations or liquidity.

In July 2023, Baker v. United Parcel Service, Inc. (DE) and United Parcel Service, Inc. (OH) was certified as a class action in federal court in the Eastern District of Washington. The plaintiff in this matter alleges that UPS violated the Uniformed Services Employment and Reemployment Rights Act. We are vigorously defending ourselves in this matter and believe that we have a number of meritorious defenses, and there are unresolved questions of law and fact that could be important to the ultimate resolution of this matter. Accordingly, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity.

Other Matters

In August 2016, Spain’s National Markets and Competition Commission ("CNMC") announced an investigation into 10 companies in the commercial delivery and parcel industry, including UPS, related to alleged nonaggression agreements to allocate customers. In May 2017, we received a Statement of Objections issued by the CNMC. In July 2017, we received a Proposed Decision from the CNMC. In March 2018, the CNMC adopted a final decision, finding an infringement and imposing an immaterial fine on UPS. We appealed the decision. In December 2022, a trial court ruled against us. We have filed an appeal before the Spanish Supreme Court. We are vigorously defending ourselves and believe that we have a number of meritorious defenses. There are also unresolved questions of law that could be important to the ultimate resolution of this matter. We do not believe that any loss from this matter would have a material impact on our financial condition, results of operations or liquidity.

The Securities and Exchange Commission (the "SEC") has been investigating our controls and practices surrounding impairment analyses in connection with the sale of UPS Freight in April 2021. Such analysis led to a non-cash goodwill impairment charge being recorded during the quarter ended December 31, 2020. Since March 2024, when the SEC staff informed the Company that it disagreed with the timing of the impairment, the Company has been discussing with the SEC staff the possibility of reaching a negotiated resolution. Although the Company cannot predict the ultimate outcome of the investigation with certainty, it believes the resolution of the SEC investigation will not have a material effect on the Company's financial condition, results of operations or liquidity. An accrual representing our best estimate of the impact of this regulatory matter is included in our consolidated balance sheet at March 31, 2024.

We are a party to various other matters that arose in the normal course of business. These include disputes with government authorities in various jurisdictions over the imposition of duties, fines, taxes and assessments from time to time. We are vigorously defending ourselves and believe that we have a number of meritorious defenses in these disputes. There are also unresolved questions of law that could be important to the ultimate resolution of these disputes. Accordingly, we are not able to estimate a possible loss or range of losses that may result from these disputes or to determine whether such losses, if any, would have a material impact on our financial condition, results of operations or liquidity.

We do not believe that the eventual resolution of any other matters (either individually or in the aggregate), including any reasonably possible losses in excess of current accruals, will have a material impact on our operations or financial condition.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12. SHAREOWNERS' EQUITY

Capital Stock, Additional Paid-In Capital, Retained Earnings and Non-Controlling Interests

We are authorized to issue two classes of common stock, which are distinguished from each other primarily by their respective voting rights. Class A shares of UPS are entitled to 10 votes per share, whereas class B shares are entitled to one vote per share. Class A shares are primarily held by UPS employees and retirees, as well as trusts and descendants of the Company's founders, and these shares are fully convertible into class B shares at any time. Class B shares are publicly traded on the New York Stock Exchange under the symbol "UPS". Class A and B shares both have a $0.01 par value, and as of March 31, 2024, there were 4.6 billion class A shares and 5.6 billion class B shares authorized to be issued. Additionally, there are 200 million preferred shares authorized to be issued, with a par value of $0.01 per share. As of March 31, 2024, no preferred shares had been issued.

The following is a rollforward of our common stock, additional paid-in capital, retained earnings and non-controlling interests accounts for the three months ended March 31, 2024 and 2023 (in millions, except per share amounts):

Three Months Ended March 31:	2024			2023
	Shares	Dollars		Shares	Dollars
Class A Common Stock:
Balance at beginning of period	127	$	2	134	$	2
Stock award plans	2	—		3	—
Common stock issuances	—	—		1	—
Conversions of class A to class B common stock	(3)	—		(3)	—
Class A shares issued at end of period	126	$	2	135	$	2
Class B Common Stock:
Balance at beginning of period	726	$	7	725	$	7
Common stock purchases	—	—		(4)	—
Conversions of class A to class B common stock	3	—		3	—
Class B shares issued at end of period	729	$	7	724	$	7
Additional Paid-In Capital:
Balance at beginning of period		$	—		$	—
Stock award plans		(118)			345
Common stock purchases		—			(492)
Common stock issuances		118			147
Balance at end of period		$	—		$	—
Retained Earnings:
Balance at beginning of period		$	21,055		$	21,326
Net income attributable to controlling interests		1,113			1,895
Dividends ($1.63 and $1.62 per share) (1)		(1,414)			(1,453)
Common stock purchases		—			(258)
Other (2)		(73)			—
Balance at end of period		$	20,681		$	21,510
Non-Controlling Interests:
Balance at beginning of period		$	8		$	17
Change in non-controlling interest		16			(2)
Balance at end of period		$	24		$	15
(1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $66 and $105 million as of March 31, 2024 and 2023, respectively, that were settled in shares of class A common stock. (2) Includes adjustments related to certain stock-based awards.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

We did not repurchase any shares under our share repurchase program during the three months ended March 31, 2024. We repurchased 4.1 million shares of class B common stock for $750 million during the three months ended March 31, 2023. These repurchases were completed as follows:

•In August 2021, the Board of Directors authorized the company to repurchase up to $5.0 billion of class A and class B common stock (the "2021 Authorization"). For the three months ended March 31, 2023, we repurchased 0.5 million shares of class B common stock for $82 million under this authorization.

•In January 2023, the Board of Directors terminated the 2021 Authorization and approved a new share repurchase authorization for $5.0 billion of class A and class B common stock (the "2023 Authorization"). For the three months ended March 31, 2023, we repurchased 3.6 million shares for $668 million under the 2023 Authorization.

As of March 31, 2024, we had $2.8 billion available under the 2023 Authorization. We do not currently anticipate any share repurchases in 2024.

Future share repurchases may be in the form of accelerated share repurchase programs, open market purchases or other methods we deem appropriate. The timing of share repurchases will depend upon market conditions. Unless terminated earlier by the Board of Directors, this program will expire when we have purchased all shares authorized for repurchase under the program.

Movements in additional paid-in capital in respect of stock award plans comprise accruals for unvested awards, offset by adjustments for awards that vest during the period.

Accumulated Other Comprehensive Income (Loss)

We recognize activity in other comprehensive income (loss) for foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale securities, unrealized gains and losses from derivatives that qualify as hedges of cash flows and unrecognized pension and postretirement benefit costs. The activity in accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023 was as follows (in millions):

Three Months Ended March 31:	2024		2023
Foreign Currency Translation Gain (Loss), Net of Tax:
Balance at beginning of period	$	(1,248)	$	(1,446)
Translation adjustment (net of tax effect of $6 and $(15))	(125)		115
Reclassification to earnings (net of tax effect of $0 and $0)	—		3
Balance at end of period	(1,373)		(1,328)
Unrealized Gain (Loss) on Marketable Securities, Net of Tax:
Balance at beginning of period	(2)		(11)
Current period changes in fair value (net of tax effect of $0 and $1)	(1)		5
Reclassification to earnings (net of tax effect of $0 and $1)	—		2
Balance at end of period	(3)		(4)
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax:
Balance at beginning of period	(76)		167
Current period changes in fair value (net of tax effect of $33 and $(8))	103		(26)
Reclassification to earnings (net of tax effect of $(10) and $(16))	(30)		(51)
Balance at end of period	(3)		90
Unrecognized Pension and Postretirement Benefit Costs, Net of Tax:
Balance at beginning of period	(2,432)		(259)
Reclassification to earnings (net of tax effect of $8 and $7)	30		20
Balance at end of period	(2,402)		(239)
Accumulated other comprehensive income (loss) at end of period	$	(3,781)	$	(1,481)

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Detail of the gains (losses) reclassified from accumulated other comprehensive income (loss) to the statements of consolidated income for the three months ended March 31, 2024 and 2023 is as follows (in millions):

	Amount Reclassified from AOCI(1)				Affected Line Item in the Income Statement
Three Months Ended March 31:	2024		2023
Unrealized Gain (Loss) on Foreign Currency Translation:
Realized gain (loss) on business wind-down	$	—	$	(3)	Other expenses
Income tax (expense) benefit	—		—		Income tax expense
Impact on net income	—		(3)		Net income
Unrealized Gain (Loss) on Marketable Securities:
Realized gain (loss) on sale of securities	—		(3)		Investment income and other
Income tax (expense) benefit	—		1		Income tax expense
Impact on net income	—		(2)		Net income
Unrealized Gain (Loss) on Cash Flow Hedges:
Interest rate contracts	(1)		(1)		Interest expense
Foreign currency exchange contracts	41		68		Revenue
Income tax (expense) benefit	(10)		(16)		Income tax expense
Impact on net income	30		51		Net income
Unrecognized Pension and Postretirement Benefit Costs:
Prior service costs	(38)		(27)		Investment income and other
Income tax (expense) benefit	8		7		Income tax expense
Impact on net income	(30)		(20)		Net income
Total amount reclassified for the period	$	—	$	26	Net income
(1) Accumulated other comprehensive income (loss)

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Deferred Compensation Obligations and Treasury Stock

We maintain a deferred compensation plan whereby certain employees were previously able to elect to defer the gains on stock option exercises by deferring the shares received upon exercise into a rabbi trust. The shares held in this trust are classified as treasury stock, and the liability to participating employees is classified as a deferred compensation obligation within Shareowners’ Equity in the consolidated balance sheets. The number of shares needed to settle the liability for deferred compensation obligations is included in the denominator in both the basic and diluted earnings per share calculations. Employees are generally no longer able to defer the gains from stock options exercised.

Activity in the deferred compensation program for the three months ended March 31, 2024 and 2023 was as follows (in millions):

	2024			2023
Three Months Ended March 31:	Shares	Dollars		Shares	Dollars
Deferred Compensation Obligations:
Balance at beginning of period		$	9		$	13
Reinvested dividends		—			—
Benefit payments		(3)			(4)
Balance at end of period		$	6		$	9
Treasury Stock:
Balance at beginning of period	—	$	(9)	—	$	(13)
Reinvested dividends	—	—		—	—
Benefit payments	—	3		—	4
Balance at end of period	—	$	(6)	—	$	(9)

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13. 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. 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 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 ("EMEA"), 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, truckload brokerage, 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.

In evaluating financial performance, we focus on operating profit as a segment’s measure of profit or loss. Operating profit is before investment income 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. There were no significant changes to our allocation methodologies in the first quarter of 2024.

Results of operations for the three months ended March 31, 2024 and 2023 were as follows (in millions):

	Three Months Ended  March 31,
	2024		2023
Revenue:
U.S. Domestic Package	$	14,234	$	14,987
International Package	4,256		4,543
Supply Chain Solutions	3,216		3,395
Consolidated revenue	$	21,706	$	22,925
Operating Profit:
U.S. Domestic Package	$	825	$	1,466
International Package	656		828
Supply Chain Solutions	132		247
Consolidated operating profit	$	1,613	$	2,541

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14. EARNINGS PER SHARE

The earnings per share amounts are the same for class A and class B common shares as the holders of each class are legally entitled to equal per-share distributions whether through dividends or in liquidation.

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 (in millions, except per share amounts):

	Three Months Ended  March 31,
	2024		2023
Numerator:
Net income attributable to common shareowners	$	1,113	$	1,895
Denominator:
Weighted-average shares	853		858
Vested portion of restricted shares	3		4
Denominator for basic earnings per share	856		862
Effect of dilutive securities:
Restricted performance units	—		2
Stock options	1		1
Denominator for diluted earnings per share	857		865
Basic earnings per share(1)	$	1.30	$	2.20
Diluted earnings per share(1)	$	1.30	$	2.19

(1)    Earnings per share is computed using unrounded amounts.

Diluted earnings per share for the three months ended March 31, 2024 and 2023 excluded the effect of 0.5 and 0.2 million shares of common stock, respectively, that may be issued upon the exercise of employee stock options because such effect would be antidilutive.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15. DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT

Risk Management Policies

Changes in fuel prices, interest rates and foreign currency exchange rates impact our results of operations and we actively monitor these exposures. Where deemed appropriate, to manage the impact of these exposures on earnings and/or cash flows, we may enter into a variety of derivative financial instruments. We do not hold or issue derivative financial instruments for trading or speculative purposes.

Credit Risk Management

The forward contracts, swaps and options discussed below contain an element of risk that the counterparties may be unable to meet the terms of the agreements. We seek to minimize such risk exposures for these instruments by limiting the counterparties to banks and financial institutions that meet established credit guidelines. We may further manage credit risk through the use of bilateral collateral provisions and/or early termination rights utilizing master netting arrangements, whereby cash is exchanged based on the net fair value of derivatives associated with each counterparty. The majority of these arrangements require exchange of collateral when positions exceed $250 million.

As of March 31, 2024 and December 31, 2023, we held cash collateral of $82 and $103 million, respectively, under these agreements. This collateral is included in Cash and cash equivalents in the consolidated balance sheets and is unrestricted. As of March 31, 2024, no collateral was required to be posted with our counterparties. As of December 31, 2023, we were required to post $13 million with our counterparties.

Types of Hedges

Commodity Risk Management

Currently, the fuel surcharges that we apply in our domestic and international package businesses are the primary means of reducing the risk of adverse fuel price changes on our business. In order to mitigate the impact of fuel surcharges imposed on us by outside carriers, we regularly adjust the rates we charge for our freight brokerage services.

Foreign Currency Risk Management

To protect against the reduction in value of forecasted foreign currency cash flows from our international package business, we maintain a foreign currency cash flow hedging program. Our most significant foreign currency exposures relate to the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. We generally designate and account for these contracts as cash flow hedges of anticipated foreign currency denominated revenue.

We may also hedge portions of our anticipated cash settlements of principal and interest on certain foreign currency denominated debt. We generally designate and account for these contracts as cash flow hedges of forecasted foreign currency denominated transactions.

We hedge our net investment in certain foreign operations with foreign currency denominated debt instruments.

Interest Rate Risk Management

We may use a combination of derivative instruments to manage the fixed and floating interest rate mix of our total debt portfolio and related overall cost of borrowing.

We generally designate and account for interest rate swaps that convert fixed-rate interest payments into floating-rate interest payments as fair value hedges of the associated debt instruments. We designate and account for interest rate swaps that convert floating-rate interest payments into fixed-rate interest payments as cash flow hedges of the forecasted payment obligations.

We may periodically hedge the forecasted fixed-coupon interest payments associated with anticipated debt offerings by using forward starting interest rate swaps, interest rate locks or similar derivatives.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Outstanding Positions

As of March 31, 2024 and December 31, 2023, the notional amounts of our outstanding derivative positions were as follows (in millions):

		March 31, 2024	December 31, 2023
Currency hedges:
Euro	EUR	4,381	4,408
British Pound Sterling	GBP	716	663
Canadian Dollar	CAD	1,725	1,550
Hong Kong Dollar	HKD	3,715	1,822

As of March 31, 2024 and December 31, 2023, we had no outstanding commodity hedge positions.

Balance Sheet Recognition

The following table indicates the location in the consolidated balance sheets where our derivative assets and liabilities have been recognized, the fair value hierarchy level applicable to each derivative type and the related fair values of those derivatives.

We have master netting arrangements with substantially all of our counterparties giving us the right of offset for our derivative positions. However, we have not elected to offset the fair value positions of our derivative contracts recorded in the consolidated balance sheets. The columns labeled Net Amounts if Right of Offset had been Applied indicate the potential net fair value positions by type of contract and location in the consolidated balance sheets had we elected to apply the right of offset as of March 31, 2024 and December 31, 2023 (in millions):

		Fair Value Hierarchy Level	Gross Amounts Presented in Consolidated Balance Sheets				Net Amounts if Right of Offset had been Applied
Asset Derivatives	Balance Sheet Location		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedges:
Foreign currency exchange contracts	Other current assets	Level 2	$	123	$	95	$	113	$	73
Foreign currency exchange contracts	Other non-current assets	Level 2	72		63		49		19
Derivatives not designated as hedges:
Foreign currency exchange contracts	Other current assets	Level 2	—		—		—		—
Total Asset Derivatives			$	195	$	158	$	162	$	92

		Fair Value Hierarchy Level	Gross Amounts Presented in Consolidated Balance Sheets				Net Amounts if Right of Offset had been Applied
Liability Derivatives	Balance Sheet Location		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedges:
Foreign currency exchange contracts	Other current liabilities	Level 2	$	11	$	26	$	1	$	4
Foreign currency exchange contracts	Other non-current liabilities	Level 2	23		65		—		21
Derivatives not designated as hedges:
Foreign currency exchange contracts	Other non-current liabilities	Level 2	—		1		—		1
Total Liability Derivatives			$	34	$	92	$	1	$	26

Our foreign currency exchange rate derivatives are largely comprised of over-the-counter derivatives, which are primarily valued using pricing models that rely on market observable inputs such as yield curves, foreign currency exchange rates and investment forward prices; therefore, these derivatives are classified as Level 2.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheet Location of Hedged Item in Fair Value Hedges    

The following table indicates the amounts that were recorded in the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of March 31, 2024 and December 31, 2023 (in millions):

Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included	Carrying Amount of Hedged Liabilities		Cumulative Amount of Fair Value Hedge Adjustments		Carrying Amount of Hedged Liabilities		Cumulative Amount  of Fair Value Hedge Adjustments
	March 31, 2024		March 31, 2024		December 31, 2023		December 31, 2023
Long-term debt and finance leases	$	280	$	4	$	280	$	4

Income Statement and AOCI Recognition of Designated Hedges

The following table indicates the amount of gains (losses) that have been recognized in the statements of consolidated income for fair value and cash flow hedges, as well as the associated gain (loss) for the underlying hedged item for fair value hedges for the three months ended March 31, 2024 and 2023 (in millions):

	Three Months Ended March 31,
Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships	2024						2023
	Revenue		Interest Expense		Investment Income and Other		Revenue		Interest Expense		Investment Income and Other
Gain or (loss) on cash flow hedging relationships:
Interest Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income	—		(1)		—		—		(1)		—
Foreign Currency Exchange Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income	41		—		—		68		—		—
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	$	41	$	(1)	$	—	$	68	$	(1)	$	—

The following table indicates the amount of gains (losses) that have been recognized in AOCI for the three months ended March 31, 2024 and 2023 for those derivatives designated as cash flow hedges (in millions):

Three Months Ended March 31:
Derivative Instruments in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives
	2024		2023
Foreign currency exchange contracts	136		(34)
Total	$	136	$	(34)

As of March 31, 2024, there were $106 million of pre-tax gains related to cash flow hedges deferred in AOCI that are expected to be reclassified to income over the 12-month period ending March 31, 2025. The actual amounts that will be reclassified to income over the next 12 months will vary from this amount as a result of changes in market conditions. The maximum term over which we are hedging exposures to the variability of cash flows is approximately 3 years.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table indicates the amount of gains (losses) that have been recognized in AOCI within foreign currency translation adjustment for the three months ended March 31, 2024 and 2023 for those instruments designated as net investment hedges (in millions):

Three Months Ended March 31:
Non-derivative Instruments in Net Investment Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Debt
	2024		2023
Foreign currency denominated debt	$	66	$	(73)
Total	$	66	$	(73)

Income Statement Recognition of Non-Designated Derivative Instruments

Derivative instruments that are not designated as hedges are recorded at fair value with unrealized gains and losses reported in earnings each period. Cash flows from the settlement of derivative instruments appear in the statements of consolidated cash flows within the same categories as the cash flows of the hedged item.

We may periodically terminate interest rate swaps and foreign currency exchange forward contracts or enter into offsetting swap and foreign currency positions with different counterparties. As part of this process, we de-designate our original hedge relationship.

Amounts recorded in the statements of consolidated income related to fair value changes and settlements of foreign currency forward contracts not designated as hedges for the three months ended March 31, 2024 and 2023 (in millions) were as follows:

Derivative Instruments Not Designated in Hedging Relationships	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		2024		2023
Three Months Ended March 31:
Foreign currency exchange contracts	Investment income and other	$	(5)	$	4
Total		$	(5)	$	4

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16. INCOME TAXES

Our effective tax rate for the three months ended March 31, 2024 and 2023 was approximately 27.5% and 24.9%, respectively. The year-over-year increase in our effective tax rate was driven by share-based compensation shortfalls, unfavorable changes in uncertain tax positions and a non-deductible expense related to a regulatory matter.

We have recognized liabilities for uncertain tax positions and we reevaluate these uncertain tax positions on a quarterly basis. A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months, however, an estimate of the range of reasonably possible outcomes cannot be made. Items that may cause changes to unrecognized tax benefits include the allowance or disallowance of deductions, the timing of deductions and the allocation of income and expense between tax jurisdictions. Changes could result from the settlement of ongoing litigation, the completion of ongoing examinations, the expiration of statutes of limitations or other unforeseen circumstances.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17. TRANSFORMATION COSTS

We are undertaking an enterprise-wide transformation of our organization that includes initiatives, as well as changes in processes and technology, that impact global direct and indirect operating costs. In 2023, we announced our "fit to serve" initiative, which is intended to right-size our business for the future through a workforce reduction of approximately 12,000 positions and create a more efficient operating model to enhance responsiveness to changing market dynamics. As of March 31, 2024 and December 31, 2023, an accrual for separation costs of $87 and $205 million, respectively, was included in our consolidated balance sheets, all of which we expect to pay during 2024.

The table below presents transformation costs for the three months ended March 31, 2024 and 2023 (in millions):

	Three Months Ended  March 31,
	2024		2023
Transformation Costs:
Compensation and benefits	$	31	$	(12)
Other expenses	15		15
Total Transformation Costs	$	46	$	3
Income Tax Benefit from Transformation Costs	(11)		—
After-Tax Transformation Costs	$	35	$	3

The income tax effects of transformation costs are calculated by multiplying the amount of the adjustments by the statutory tax rates applicable in each tax jurisdiction.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Through our Customer First, People Led, Innovation Driven strategy we are investing to grow in the premium parts of the market and drive efficiency across our network. We are focused on the parts of the market that value our end-to-end integrated network, including healthcare, commercial shippers and small- and medium-sized businesses ("SMBs"). Through our Network of the Future initiative, we are transforming our network by combining physical and digital capabilities, including our smart package smart facility RFID solution, to streamline our operations. We are also leveraging technology to add new capabilities and expand our addressable market.

During the first quarter, we took a number of steps in furtherance of this strategy. For example, we expanded our no box, no label returns service that combines the reach and capabilities of The UPS Store and Happy Returns, and we launched Roadie XD, adding capabilities for big and bulky long-zone deliveries for items that are incompatible with our small package network. Additionally, we continued to develop capabilities to enhance our SMB customer experience. In furtherance of our healthcare strategy, we opened a new facility at our global air hub specifically designed for complex healthcare shipments. For the remainder of 2024, we expect to continue investment in our network to drive further operational efficiencies.

On April 1, 2024, we announced that we entered into an agreement to expand our relationship with the U.S. Postal Service ("USPS"), providing for UPS to become the USPS primary air cargo provider within the United States.

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.

During the first quarter of 2024, the macroeconomic environment remained challenging. Persistent soft demand, lack of growth in industrial production and continuing inflationary pressures contributed to volume declines in our global small package operations, although we experienced pockets of growth in certain markets and trade lanes. In Supply Chain Solutions, our freight forwarding businesses continued to be negatively impacted by soft demand and market overcapacity. Somewhat offsetting this was increased revenue in our logistics businesses, driven by growth in our healthcare operations and the impact of the acquisition of MNX Global Logistics in the fourth quarter of 2023.

We expect our second quarter earnings to be lower relative to 2023, primarily due to the higher labor costs associated with the first year of the Teamsters contract. However, we anticipate a return to operating profit growth during the second half of 2024.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Highlights of our consolidated results, which are discussed in more detail below, include:

	Three Months Ended  March 31,						Change
	2024			2023			$		%
Revenue (in millions)	$	21,706		$	22,925		$	(1,219)	(5.3)	%
Operating Expenses (in millions)	20,093			20,384			(291)		(1.4)	%
Operating Profit (in millions)	$	1,613		$	2,541		$	(928)	(36.5)	%
Operating Margin	7.4		%	11.1		%
Net Income (in millions)	$	1,113		$	1,895		$	(782)	(41.3)	%
Basic Earnings Per Share	$	1.30		$	2.20		$	(0.90)	(40.9)	%
Diluted Earnings Per Share	$	1.30		$	2.19		$	(0.89)	(40.6)	%
Operating Days	63			64
Average Daily Package Volume (in thousands)	21,199			21,989					(3.6)	%
Average Revenue Per Piece	$	13.73		$	13.74		$	(0.01)	(0.1)	%

•Average daily package volume in our global small package operations decreased, with declines in both commercial and residential shipments across all of our product segments. These declines were primarily the result of the challenging macroeconomic conditions.

•Revenue declined as well, driven by lower volume and relatively flat revenue per piece.

•Operating expenses decreased, due to a reduction in purchased transportation in all segments and reductions in fuel expenses in our small package operations, as well as the impact of our ongoing productivity initiatives.

•Operating profit and operating margin decreased as revenue declines were greater than operating expense reductions.

•We reported net income of $1.1 billion and diluted earnings per share of $1.30. Adjusted diluted earnings per share were $1.43 after adjusting for the after-tax impacts of:

◦transformation and other costs of $75 million, or $0.09 per diluted share, and

◦asset impairment charges of $35 million, or $0.04 per diluted share.

Within our segments, U.S. Domestic Package revenues and expenses were primarily impacted by the matters described above, with expense decreases partially offset by increases in union workforce compensation and benefits expense.

International Package segment revenues were also impacted by declines in demand related surcharges and currency fluctuations, partially offset by revenue per piece growth due to increases in base rates and changes in product and customer mix.

In Supply Chain Solutions, revenue decreases were driven by volume and market rate declines in Forwarding, somewhat offset by growth in our Logistics businesses. Expenses decreased primarily due to lower purchased transportation expense in Forwarding, partially offset by expense increases within Logistics.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Supplemental Information - Items Affecting Comparability

We supplement the reporting of our financial information determined under generally accepted accounting principles in the United States ("GAAP") with certain non-GAAP financial measures. Non-GAAP financial measures exclude costs or charges that we do not consider a part of underlying business performance when monitoring and evaluating the operating performance of our business units, making decisions to allocate resources or in determining incentive compensation awards. As a result, we believe excluding the impact of these items better enables users of our financial statements to view and evaluate underlying business performance from the perspective of management.

Adjusted financial measures should be considered in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our adjusted financial measures do not represent a comprehensive basis of accounting and therefore may not be comparable to similarly titled measures reported by other companies. Adjusted amounts reflect the following (in millions):

	Three Months Ended  March 31,
Non-GAAP Adjustments	2024		2023
Operating Expenses:
Transformation and Other Costs	$	86	$	3
Asset Impairment Charges	48		8
Total Adjustments to Operating Expenses	$	134	$	11
Total Adjustments to Income Before Income Taxes	$	134	$	11
Income Tax (Benefit) Expense:
Transformation and Other Costs	$	(11)	$	—
Asset Impairment Charges	(13)		(2)
Total Adjustments to Income Tax (Benefit) Expense	$	(24)	$	(2)
Total Adjustments to Net Income	$	110	$	9

The income tax impacts of these items are calculated at the statutory tax rates applicable in each tax jurisdiction.

Transformation and Other Costs, and Asset Impairment Charges

We supplement the presentation of our operating profit, operating margin, income before income taxes, net income and earnings per share with non-GAAP measures that exclude the impact of charges related to transformation and other activities, and asset impairments. For more information regarding transformation activity charges, see note 17 to the unaudited, consolidated financial statements, for other charges, see note 11 to the unaudited, consolidated financial statements, and for asset impairment charges, see note 8 to the unaudited, consolidated financial statements.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Defined Benefit Pension and Postretirement Medical Plan Gains and Losses

We incur certain employment-related expenses associated with pension and postretirement medical benefits. These pension and postretirement medical benefits costs for company-sponsored defined benefit plans are calculated using various actuarial assumptions and methodologies, including discount rates, expected returns on plan assets, healthcare cost trend rates, inflation, compensation increase rates, mortality rates and coordination of benefits with plans not sponsored by UPS. Actuarial assumptions are reviewed on an annual basis, unless circumstances require an interim remeasurement of any of our plans.

We recognize changes in the fair value of plan assets and net actuarial gains and losses in excess of a 10% corridor (defined as 10% of the greater of the fair value of plan assets or the plan's projected benefit obligation), as well as gains and losses resulting from plan curtailments and settlements, for our pension and postretirement defined benefit plans immediately as part of Investment income and other in the statements of consolidated income. We supplement the presentation of our income before income taxes, net income and earnings per share with adjusted measures that exclude the impact of these gains and losses and the related income tax effects. We believe excluding these defined benefit pension and postretirement medical plan gains and losses provides important supplemental information by removing the volatility associated with plan amendments and short-term changes in market interest rates, equity values and similar factors.

For additional information, see note 7 to the unaudited, consolidated financial statements.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Results of Operations - Segment Review

The results and discussions that follow are reflective of how management monitors and evaluates the performance of our segments as defined in note 13 to the unaudited, consolidated financial statements.

Certain operating expenses are allocated between our reporting 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 would 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, or as necessary to reflect changes in our businesses. While there were no significant changes to our allocation methodologies in the first quarter of 2024, we expect additional air cargo volumes from our recently-announced agreement with the USPS will result in a greater share of air network expense being allocated to Supply Chain Solutions beginning in the second quarter of 2024.

As a normal part of managing our air network, we routinely idle aircraft and engines temporarily for maintenance or to adjust network capacity. As a result of the reduction in volumes experienced during the quarter, we temporarily idled certain aircraft within our network in order to better match capacity with current demand. Temporarily idled assets are classified as held-and-used, and we continue to record depreciation expense for these assets. As of March 31, 2024, we had eight aircraft temporarily idled for an average period of approximately two months. We expect these aircraft to return to revenue service during 2024.

We test goodwill and other indefinite-lived intangible assets for impairment annually at July 1 and between annual tests if an event occurs or circumstances change that would indicate that it is more likely than not that the carrying value thereof may be impaired. Testing goodwill and other indefinite-lived intangible assets for impairment requires that we make a number of significant assumptions, including assumptions related to future revenues, costs, capital expenditures, working capital, our cost of capital and market comparables. We are also required to make assumptions relating to our overall business and operating strategy, and the regulatory and market environment.

Challenging macroeconomic and uncertain geopolitical conditions continue to impact demand for our services. While we do not believe it is more likely than not that our reporting units’ fair values are less than their carrying values as of March 31, 2024, these external conditions or other factors, including market comparables, may negatively impact certain estimates and assumptions that we use in developing our reporting units' fair values. Such impacts may be more pronounced for reporting units whose fair values do not significantly exceed their carrying values.

As of March 31, 2024, none of our reporting units had indications that an impairment was more likely than not. Approximately $1.5 billion of our consolidated goodwill balance of $4.8 billion is represented by our Global Freight Forwarding, Coyote and Roadie reporting units which, based on our quarterly monitoring, are exhibiting a limited excess of fair value above carrying value and reflect a greater risk of an impairment occurring in future periods. We do not expect any impairment would have a significant impact on our consolidated financial position, results of operations or cash flows.

Actual reporting unit performance, revisions to our forecasts of future performance, market factors, changes in estimates or assumptions in connection with our annual testing, or a combination thereof could result in an impairment charge in one or more of our reporting units during a future period. We continue to monitor business performance and external factors affecting our reporting units.

Additionally, as of March 31, 2024, the estimated fair value of the indefinite-lived trade name associated with our truckload brokerage business, Coyote, remained greater than its carrying value by less than 10 percent. The carrying value of this trade name is $89 million. During the quarter, our truckload brokerage business continued to be negatively impacted by market conditions, which resulted in revenue declines. We continue to monitor business performance and external factors affecting our valuation assumptions for this trade name. As previously disclosed, we are continuing to evaluate strategic alternatives relating to this business.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

U.S. Domestic Package

	Three Months Ended March 31,						Change
	2024			2023			$		%
Average Daily Package Volume (in thousands):
Next Day Air	1,590			1,737					(8.5)	%
Deferred	1,047			1,139					(8.1)	%
Ground	15,438			15,796					(2.3)	%
Total Average Daily Package Volume	18,075			18,672					(3.2)	%
Average Revenue Per Piece:
Next Day Air	$	23.12		$	22.14		$	0.98	4.4	%
Deferred	17.53			16.38			1.15		7.0	%
Ground	11.07			11.21			(0.14)		(1.2)	%
Total Average Revenue Per Piece	$	12.50		$	12.54		$	(0.04)	(0.3)	%
Operating Days in Period	63			64
Revenue (in millions):
Next Day Air	$	2,316		$	2,461		$	(145)	(5.9)	%
Deferred	1,156			1,194			(38)		(3.2)	%
Ground	10,762			11,332			(570)		(5.0)	%
Total Revenue	$	14,234		$	14,987		$	(753)	(5.0)	%
Operating Expenses (in millions):
Operating Expenses	$	13,409		$	13,521		$	(112)	(0.8)	%
Transformation Costs	(9)			(22)			13		(59.1)	%
Asset Impairment Charges	(5)			—			(5)		N/A
Adjusted Operating Expense	$	13,395		$	13,499		$	(104)	(0.8)	%
Operating Profit (in millions) and Operating Margin:
Operating Profit	$	825		$	1,466		$	(641)	(43.7)	%
Adjusted Operating Profit	$	839		$	1,488		$	(649)	(43.6)	%
Operating Margin	5.8		%	9.8		%
Adjusted Operating Margin	5.9		%	9.9		%

Revenue

The change in revenue was due to the following:

	Volume		Rates / Product Mix		Fuel Surcharge		Total Revenue Change
Revenue Change Drivers:
First quarter 2024 vs. 2023	(4.2)	%	0.4	%	(1.2)	%	(5.0)	%

Revenue was also negatively impacted by having one less operating day in the first quarter of 2024.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Volume

Average daily volume decreased, with reductions in both residential and commercial volume. Challenging macroeconomic conditions, including weakness in manufacturing output, drove the overall volume decline. We anticipate that year-over-year average daily volume will increase each quarter for the remainder of 2024.

Business-to-consumer volume declined 1.5% in the quarter as a result of the factors discussed above, with declines from both large customers and SMBs.

Business-to-business volume declined 5.5% in the quarter for the reasons described above, driven by declines across a number of sectors including retail, technology and manufacturing. Returns volume increased in the quarter, partially attributable to our addressable market expansion with capabilities like no box, no label returns through Happy Returns and the convenience of our The UPS Store locations.

Within our Air products, average daily volume decreases were driven by continued execution under the contract terms with our largest customer as planned, as well as by the impact of other customers making cost trade-offs to our ground network.

Average daily volumes for Ground commercial shipments decreased by 5.6%, due to the general economic conditions discussed above. Overall Ground residential volumes were relatively flat, as the decreases were offset by a 10.8% increase in SurePost volume from large customers. We expect volume to increase in the second quarter, driven by anticipated volume from large customers.

Revenue Per Piece

In December 2023, we implemented an average 5.9% net increase in base and accessorial rates for both our Air and Ground products. Revenue per piece from our Air products increased for the quarter, while revenue per piece from our Ground products declined. The increase in base and accessorial rates favorably impacted revenue per piece from both Air and Ground products, although it was partially offset by decreases in fuel surcharge revenues and average billable weight per piece, coupled with an unfavorable shift in product mix within our Ground products.

We continue to execute on pricing and revenue quality initiatives within our strategy, and anticipate revenue per piece will remain relatively flat in the second quarter before returning to growth during the second half of 2024.

Fuel Surcharges

We apply a fuel surcharge on our domestic air and ground services that adjusts weekly. Our air fuel surcharge is based on the U.S. Department of Energy's ("DOE") Gulf Coast spot price for a gallon of kerosene-type fuel, and our ground fuel surcharge is based on the DOE's On-Highway Diesel Fuel price.

Fuel surcharge revenue decreased $184 million for the quarter, driven by reductions in price per gallon and the impact of lower volumes. We expect fuel surcharge revenue to increase in the second quarter, primarily due to volume growth and the impact of higher surcharge modifiers.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Operating Expenses

Operating expenses and adjusted operating expenses decreased for the quarter. The costs of operating our integrated air and ground network decreased $291 million, and other operating costs decreased $224 million. In addition to the impact of one less operating day in 2024, the decrease in operating expenses was primarily due to:

•A reduction in purchased transportation costs and aircraft block hours, resulting from lower overall volumes and the impact of network optimization initiatives, which drove a reduction in ground volume handled by third-party carriers.

•Lower fuel expense driven by lower volume and decreases in the price of jet fuel, diesel and gasoline. We expect fuel expense to remain relatively flat in the second quarter of 2024.

These reductions were partially offset by increases of $311 million in pickup and delivery costs and $100 million in sortation costs that were driven by increased compensation and benefits expense for our union workforce. Compensation expense increased due to the contractual rates under our Teamsters contract, partially offset by a reduction in direct labor hours. Contractual rate increases for contributions to multiemployer benefit plans drove the increase in benefits expense.

Total cost per piece increased 4.2% for the quarter and adjusted cost per piece increased 4.1%, as the reduction in volume more than offset the decrease in overall expenses. We anticipate the cost per piece growth rate will increase further in the second quarter and then moderate for the remainder of the year.

Operating Profit and Margin

As a result of the factors described above, revenue declines were greater than operating expense reductions and operating profit decreased $641 million in the first quarter, with operating margin decreasing 400 basis points to 5.8%. Adjusted operating profit decreased $649 million, with adjusted operating margin decreasing 400 basis points to 5.9%.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

International Package

	Three Months Ended  March 31,						Change
	2024			2023			$		%
Average Daily Package Volume (in thousands):
Domestic	1,503			1,635					(8.1)	%
Export	1,621			1,682					(3.6)	%
Total Average Daily Package Volume	3,124			3,317					(5.8)	%
Average Revenue Per Piece:
Domestic	$	8.01		$	7.59		$	0.42	5.5	%
Export	32.80			33.00			(0.20)		(0.6)	%
Total Average Revenue Per Piece	$	20.87		$	20.47		$	0.40	2.0	%
Operating Days in Period	63			64
Revenue (in millions):
Domestic	$	758		$	794		$	(36)	(4.5)	%
Export	3,350			3,552			(202)		(5.7)	%
Cargo and Other	148			197			(49)		(24.9)	%
Total Revenue	$	4,256		$	4,543		$	(287)	(6.3)	%
Operating Expenses (in millions):
Operating Expenses	$	3,600		$	3,715		$	(115)	(3.1)	%
Transformation Costs	(24)			22			(46)		N/A
Asset Impairment Charges	(2)			—			(2)		N/A
Adjusted Operating Expenses	$	3,574		$	3,737		$	(163)	(4.4)	%
Operating Profit (in millions) and Operating Margin:
Operating Profit	$	656		$	828		$	(172)	(20.8)	%
Adjusted Operating Profit	$	682		$	806		$	(124)	(15.4)	%
Operating Margin	15.4		%	18.2		%
Adjusted Operating Margin	16.0		%	17.7		%
Currency Benefit / (Cost) – (in millions)*:
Revenue							$	(25)
Operating Expenses							(2)
Operating Profit							$	(27)
* Net of currency hedging; amount represents the change in currency translation compared to the prior year.

Revenue

The change in revenue was due to the following:

	Volume		Rates / Product Mix		Fuel Surcharge		Currency		Total Revenue Change
Revenue Change Drivers:
First quarter 2024 vs. 2023	(6.0)	%	1.6	%	(1.3)	%	(0.6)	%	(6.3)	%

Revenue was also negatively impacted by having one less operating day in the first quarter of 2024.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Volume

Average daily volume for both export and domestic products decreased in the quarter. Business-to-consumer volume decreased 11.1% and business-to-business volume decreased 3.7%. Challenging economic conditions and geopolitical factors contributed to the volume declines. Volume declines were primarily attributable to SMBs, although volume from large customers also declined, with declines driven by the retail and manufacturing sectors, while the technology sector exhibited moderate volume growth. We expect year-over-year average daily volume to be relatively flat in the second quarter and to improve in the second half of the year, dependent on an improvement in global macroeconomic conditions.

Export volume decreased for the quarter, primarily driven by declines on intra-Europe trade lanes. These declines were partially offset by increases on the Americas to U.S. trade lanes, as manufacturing and distribution moves closer to the U.S. consumer market. We also experienced volume improvements on the China to U.S. trade lane during the quarter. The intra-Europe volume decline was primarily due to lower consumer spending as a result of economic conditions.

Our premium products experienced volume declines of 9.6% for the quarter, primarily in our Worldwide and Transborder Express Saver products. These declines resulted from continuing shifts in customer product preferences. Volume in our non-premium products decreased 1.6% for the quarter, driven by declines in our Transborder Standard product, primarily within Europe. The declines in both our premium and non-premium products were due to the macroeconomic conditions described above.

Domestic volume declined in the quarter, with the largest declines in Germany, Canada and the United Kingdom as challenging economic conditions in those countries reduced consumer spending.

Revenue Per Piece

In December 2023, we implemented an average 5.9% net increase in base and accessorial rates for international shipments originating in the United States. Rate changes for shipments originating outside the U.S. are made throughout the year and vary by geographic market.

Total revenue per piece increased 2.0% for the quarter, primarily due to base rate increases. This was partially offset by declines in fuel and demand-related surcharges, as well as unfavorable currency movements. Excluding the impact of currency, revenue per piece increased 2.5% for the quarter. We anticipate overall revenue per piece growth will be relatively flat in the second quarter and will decline in the second half of the year due to the continued shift to non-premium products.

Export revenue per piece decreased 0.6% for the quarter. The decrease was primarily attributable to changes in product mix due to the shifts in customer preferences. Declines in revenue per piece were mostly offset by base rate increases. Excluding the impact of currency, export revenue per piece remained flat relative to last year.

Domestic revenue per piece increased 5.5% for the quarter, primarily due to the rate increases discussed above. Excluding the impact of currency, domestic revenue per piece increased 6.1% for the quarter.

Fuel Surcharges

The fuel surcharge we apply to international air services originating inside or outside the U.S. is largely indexed to the DOE's Gulf Coast spot price for a gallon of kerosene-type jet fuel. The fuel surcharges for ground services originating outside the U.S. are indexed to fuel prices in the region or country where the shipment originates.

Total international fuel surcharge revenue decreased $59 million for the quarter, due to a decrease in price per gallon and volume declines, partially offset by higher surcharge modifiers. Based on our current commodity market outlook, we expect fuel surcharge revenue will increase in the second quarter.

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Operating Expenses

Operating expenses and adjusted operating expenses decreased for the quarter, primarily due to:

•Reductions in the cost of operating our integrated air and ground network, which decreased $125 million, driven by lower fuel prices and reductions in air charters and aircraft block hours.

•Lower pickup and delivery costs, which decreased $22 million as a result of lower volumes and the impact of cost management initiatives.

On an unadjusted basis, these reductions were partially offset by the impact of year-over-year increases in employee separation costs as we continued to right-size our business.

Operating Profit and Margin

As a result of the factors described above, operating profit decreased $172 million for the quarter, with operating margin decreasing 280 basis points to 15.4%. Adjusted operating profit decreased $124 million and adjusted operating margin decreased 170 basis points to 16.0%.

Increased geopolitical uncertainty continues to impact volumes in our International Package segment. As previously disclosed, substantially all of our operations in Russia and Belarus have been suspended, and we expect to complete the liquidation of our Small Package and Forwarding and Logistics subsidiaries in these countries by end of 2024. Substantially all of our operations in Ukraine remain indefinitely suspended. These actions have not had, and are not expected to have, a material impact on us.

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Supply Chain Solutions

	Three Months Ended  March 31,						Change
	2024			2023			$		%
Revenue (in millions):
Forwarding	$	1,280		$	1,514		$	(234)	(15.5)	%
Logistics	1,542			1,410			132		9.4	%
Other	394			471			(77)		(16.3)	%
Total Revenue	$	3,216		$	3,395		$	(179)	(5.3)	%
Operating Expenses (in millions):
Operating Expenses	$	3,084		$	3,148		$	(64)	(2.0)	%
Transformation and Other Costs	(53)			(3)			(50)		N/M
Asset Impairment Charges	(41)			(8)			(33)		412.5	%
Adjusted Operating Expenses:	$	2,990		$	3,137		$	(147)	(4.7)	%
Operating Profit (in millions) and Operating Margin:
Operating Profit	$	132		$	247		$	(115)	(46.6)	%
Adjusted Operating Profit	$	226		$	258		$	(32)	(12.4)	%
Operating Margin	4.1		%	7.3		%
Adjusted Operating Margin	7.0		%	7.6		%
Currency Benefit / (Cost) – (in millions)*:
Revenue							$	(14)
Operating Expenses							20
Operating Profit							$	6
* Amount represents the change in currency translation compared to the prior year.

	Three Months Ended  March 31,				Change
	2024		2023		$		%
Adjustments to Operating Expenses (in millions):
Transformation and Other Costs
Forwarding	$	7	$	1	$	6	600.0	%
Logistics	6		2		4		200.0	%
Other	40		—		40		N/A
Total Transformation and Other Costs	$	53	$	3	$	50	N/M
Asset Impairment Charges
Forwarding	$	—	$	8	$	(8)	(100.0)	%
Logistics	41		—		41		N/A
Other	—		—		—		—	%
Total Asset Impairment Charges	$	41	$	8	$	33	412.5	%
Total Adjustments to Operating Expenses	$	94	$	11	$	83	754.5	%

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

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RESULTS OF OPERATIONS

Revenue

Total revenue in Supply Chain Solutions decreased for the quarter. This was primarily due to declines in our Forwarding business, with both truckload brokerage and freight forwarding revenues decreasing, and declines within certain of our other businesses. These declines were partially offset by revenue growth in our Logistics businesses.

•Revenue in our truckload brokerage business decreased $148 million due to lower volumes and a decline in market rates. These decreases were partially offset by volume increases from SMBs as a result of our revenue quality initiatives.

•International airfreight revenue decreased approximately $53 million due to continued weakness in market demand, impacting both volumes and rates. We expect improvements in market demand and tightening capacity, particularly on Asia export lanes, which are expected to lead to revenue growth in the second half of 2024.

•The remaining reduction in revenue was primarily attributable to our ocean freight forwarding business, driven by a change in product mix that drove growth in volume but at lower rates. We expect revenue to remain challenged in the second quarter as capacity increases are expected to continue to exceed demand.

Within our Logistics businesses, revenue increased $132 million. The acquisition of MNX Global Logistics in the fourth quarter of 2023 contributed $90 million of the increase, with the remainder driven by growth in clinical trials and pharmaceuticals within our healthcare operations. Revenue in mail services remained relatively flat as rate increases and a favorable shift in product characteristics were offset by a decrease in volume.

Revenue from other businesses within Supply Chain Solutions decreased, driven by a reduction of $69 million from lower volumes under contracts with the USPS. Revenue from transition services provided to the acquirer of UPS Freight declined $34 million as we continue to wind down these arrangements. These reductions were partially offset by higher revenue from our digital businesses due to business growth and the impact of the acquisition of Happy Returns in the fourth quarter of 2023. We expect revenue from our other Supply Chain Solutions businesses will increase during the second half of 2024 as this is where we will report the revenue related to the additional air cargo volume under our recently announced agreement with the USPS.

Operating Expenses

Total operating expenses and adjusted operating expenses within Supply Chain Solutions decreased for the quarter.

Forwarding operating expenses decreased $229 million, primarily due to a reduction of approximately $196 million in purchased transportation expense as a result of lower market rates across our businesses, and decreased volumes in both the airfreight and truckload brokerage businesses. We expect our operating expenses will increase during the second half of 2024 driven by expected higher volumes.

Logistics operating expenses increased $124 million, driven by the impact of the acquisition of MNX Global Logistics which contributed $88 million of the increase. Expenses in our healthcare operations increased $43 million, primarily due to higher rates for third-party transportation. Operating expenses in mail services were relatively flat. On an unadjusted basis, Logistics operating expenses were also impacted by a charge to write down the value of certain trade names acquired as part of the Bomi Group acquisition.

Expenses in our other Supply Chain Solutions businesses decreased, largely driven by the reduction in transportation costs incurred to fulfill our obligations to the USPS under existing agreements. Costs incurred to procure transportation for, and provide transition services to, the acquirer of UPS Freight also decreased as we continued to wind down these arrangements. These decreases were partially offset by higher operating costs within our digital businesses. On an unadjusted basis, these decreases were offset by the impact of transformation and other costs, including an expense related to a regulatory matter. We expect expenses in our other Supply Chain Solutions businesses will increase during the second half of 2024, as this is where we will report expenses related to the additional air cargo volume under our recently announced agreement with the USPS.

Operating Profit and Margin

As a result of the factors described above, total operating profit decreased $115 million, with operating margin decreasing 320 basis points to 4.1%. On an adjusted basis, operating profit decreased $32 million with adjusted operating margin decreasing 60 basis points to 7.0%.

49

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Consolidated Operating Expenses

	Three Months Ended  March 31,				Change
	2024		2023		$		%
Operating Expenses (in millions):
Compensation and benefits	$	11,639	$	11,464	$	175	1.5	%
Transformation and Other Costs	(31)		12		(43)		N/A
Adjusted Compensation and benefits	$	11,608	$	11,476	$	132	1.2	%
Repairs and maintenance	$	718	$	725	$	(7)	(1.0)	%
Depreciation and amortization	898		834		64		7.7	%
Purchased transportation	3,246		3,541		(295)		(8.3)	%
Fuel	1,060		1,271		(211)		(16.6)	%
Other occupancy	564		551		13		2.4	%
Other expenses	1,968		1,998		(30)		(1.5)	%
Total Other expenses	8,454		8,920		(466)		(5.2)	%
Transformation and Other Costs	(55)		(15)		(40)		266.7	%
Asset Impairment Charges	(48)		(8)		(40)		500.0	%
Adjusted Total Other expenses	$	8,351	$	8,897	$	(546)	(6.1)	%
Total Operating Expenses	$	20,093	$	20,384	$	(291)	(1.4)	%
Adjusted Total Operating Expenses	$	19,959	$	20,373	$	(414)	(2.0)	%
Currency (Benefit) / Cost - (in millions)*					$	(18)
* Amount represents the change in currency translation compared to the prior year.

	Three Months Ended  March 31,				Change
	2024		2023		$		%
Adjustments to Operating Expenses (in millions):
Transformation and Other Costs
Compensation	$	5	$	5	$	—	—	%
Benefits	26		(17)		43		N/A
Other expenses	55		15		40		266.7	%
Total Transformation and Other Costs	$	86	$	3	$	83	N/M
Asset Impairment Charges
Other expenses	$	48	$	8	$	40	500.0	%
Total Adjustments to Operating Expenses	$	134	$	11	$	123	N/M

50

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Compensation and Benefits

Total compensation and benefits and adjusted total compensation and benefits increased in the first quarter. Compensation costs increased $97 million. The principal factors contributing to the increase were:

•Direct labor costs increased $199 million. Contractual wage rate increases for our U.S. union workforce resulted in an increase in costs of $328 million. This was partially offset by the impact of reductions in U.S. direct labor hours and administrative headcount due to volume declines, which reduced expense by $207 million. The remaining increase was driven by changes in seniority within our workforce. We expect wage rate growth to remain elevated on a year-over-year basis in the second quarter before moderating during the second half of 2024 as a result of the terms of our contract with the Teamsters.

•Management compensation costs decreased $73 million due to a reduction in incentive compensation expense and lower overall headcount.

Benefits costs increased $78 million for the quarter, and increased $35 million on an adjusted basis. The principal factors driving the increase were:

•Accruals for paid time off, payroll taxes and other costs increased $43 million, primarily due to contractual wage rate growth.

•Health and welfare costs increased $39 million, driven by increased contributions to multiemployer plans as a result of contractually-mandated rate increases.

•Workers' compensation expense decreased $29 million due to favorable developments in prior year claims counts.

•Pension and other postretirement benefits expense decreased $12 million as reductions in participating headcount more than offset increases in service costs under Company-sponsored plans due to lower discount rates and benefit increases under the terms of the Teamsters contract.

•Other employee benefits expense increased $37 million due to separation costs incurred as we continued to right-size our business for the future. On an adjusted basis, other employee benefits expense remained relatively flat.

Repairs and Maintenance

The decrease in repairs and maintenance expense was primarily due to the deferral of aircraft engine maintenance, as the declines in volume resulted in the temporary idling of certain aircraft. This was partially offset by an increase in routine repairs to buildings and facilities. We expect these expense trends to continue in the second quarter.

Depreciation and Amortization

We incurred higher depreciation expense as a result of facility automation and expansion projects coming into service. Amortization expense for capitalized software investments in support of our strategic initiatives increased, and we recorded additional amortization expense for intangible assets due to the acquisitions of MNX Global Logistics and Happy Returns in the fourth quarter of 2023.

Purchased Transportation

Third-party transportation expense charged to us by air, ocean and ground carriers decreased for the quarter. The changes were primarily driven by:

•Supply Chain Solutions expense decreased $123 million, driven by volume declines and lower market rates paid for services in our Forwarding businesses. This was partially offset by expense increases in our logistics operations due to business growth and the impact of the acquisition of MNX Global Logistics.

•U.S. Domestic expense decreased $116 million due to overall volume declines, a reduction in ground volume handled by third-party carriers and other network optimization initiatives. These decreases were partially offset by an increase in delivery costs for our SurePost product as a result of higher volume.

•International Package expense decreased $56 million, primarily due to declines in volume.

51

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Fuel

The reduction in fuel expense for the quarter was driven by lower prices for jet fuel, diesel and gasoline, and the impact of lower volumes. Market prices and the manner in which we purchase fuel influence our costs. The majority of our fuel purchases utilize index-based pricing formulas plus or minus a fixed locational/supplier differential. While many of the indices are correlated, each index may respond differently to changes in underlying prices, which in turn can drive variability in our costs.

Other Occupancy

Other occupancy expense increased for the quarter, primarily due to increases in property rents. A decrease in utilities expense as a result of declines in rates and usage was offset by higher costs related to winter weather events.

Other Expenses

Other expenses decreased $30 million for the quarter. We recorded a $41 million charge to write down the value of certain trade names acquired as part of our acquisition of Bomi Group as we consolidate our brands, and a $7 million impairment charge related to software licenses. Additionally, we incurred $55 million of transformation and other costs, including an expense related to a regulatory matter. On an adjusted basis, other expenses decreased $110 million, primarily due to the following:

•A reduction in outsourcing and consulting fees of $50 million driven by a decrease in project-based engagements and higher capitalization of third-party software development costs.

•Reductions in vehicle lease expense of $57 million due to volume declines.

•Claims expense decreased $20 million due to a reduction in the volume of customer claims.

These reductions were partly offset by:

•Credit loss increases of $47 million across our segments as a result of an increased number of customer bankruptcies and increases in reserves.

•RFID supplies for Smart Package Smart Facility increased $30 million as we expanded utilization.

•Hosted software application fees and other technology costs that support ongoing investments in our digital transformation increased $15 million.

Other expense reductions during the quarter were primarily associated with volume declines, including employee-related expenses, airline operational expenses, advertising costs and insurance.

52

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Other Income (Expense)

The following table sets forth investment income and other and interest expense for the three months ended March 31, 2024 and 2023 (in millions):

	Three Months Ended  March 31,				Change
	2024		2023		$		%
Investment Income and Other	$	118	$	169	$	(51)	(30.2)	%
Interest Expense	(195)		(188)		(7)		3.7	%
Total Other Income (Expense)	$	(77)	$	(19)	$	(58)	305.3	%

Investment Income and Other

Investment income decreased for the quarter, primarily due to a reduction in invested balances and year-over-year changes in certain non-current investments. Other pension income remained flat as higher expected returns on pension assets were offset by an increase in interest cost as a result of plan growth and changes in demographic assumptions.

Interest Expense

Interest expense increased for the quarter due to higher average outstanding debt balances, partially offset by an increase in capitalized interest.

53

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Income Tax Expense

The following table sets forth our income tax expense and effective tax rate for the three months ended March 31, 2024 and 2023 (in millions):

	Three Months Ended  March 31,						Change
	2024			2023			$		%
Income Tax Expense	$	423		$	627		$	(204)	(32.5)	%
Income Tax Impact of:
Transformation and Other Costs	11			—			11		N/A
Asset Impairment Charges	13			2			11		550.0	%
Adjusted Income Tax Expense	$	447		$	629		$	(182)	(28.9)	%
Effective Tax Rate	27.5		%	24.9		%
Adjusted Effective Tax Rate	26.8		%	24.8		%

For additional information on our income tax expense and effective tax rate, see note 16 to the unaudited, consolidated financial statements.

54

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Liquidity and Capital Resources

We deploy a disciplined and balanced approach to capital allocation, including returns to shareowners through dividends and share repurchases. As of March 31, 2024, we had $4.5 billion in cash, cash equivalents and marketable securities. We believe that these positions, expected cash from operations, access to commercial paper programs and capital markets and other available liquidity options will be adequate to fund our material short- and long-term cash requirements, including our business operations, planned capital expenditures, pension contributions, planned acquisitions, transformation costs, debt obligations and planned shareowner returns. We regularly evaluate opportunities to optimize our capital structure, including through issuances of debt to refinance existing debt and to fund operations.

Cash Flows From Operating Activities

The following is a summary of the significant sources (uses) of cash from operating activities (in millions):

	Three Months Ended March 31,
	2024		2023
Net income	$	1,113	$	1,895
Non-cash operating activities (1)	1,308		1,226
Pension and postretirement medical benefit plan contributions (company-sponsored plans)	(50)		(1,277)
Hedge margin receivables and payables	(8)		(159)
Income tax receivables and payables	257		426
Changes in working capital and other non-current assets and liabilities	696		278
Other operating activities	—		(32)
Net cash from operating activities	$	3,316	$	2,357

(1)    Represents depreciation and amortization, gains and losses on derivative transactions and foreign currency exchange, deferred income taxes, allowances for expected credit losses, amortization of operating lease assets, pension and postretirement medical benefit plan (income) expense, stock compensation expense, changes in casualty self-insurance reserves, goodwill and other asset impairment charges and other non-cash items.

Net cash from operating activities increased $959 million for the quarter primarily due to a decrease in contributions to our company-sponsored, defined benefit pension and postretirement medical plans. Net cash was also favorably impacted by:

•A reduction in hedge margin collateral outflows due to changes in the fair value of derivative contracts used in our currency hedging programs.

•Working capital benefits from lower incentive compensation payments and payment of deferred employer payroll taxes in 2023 that did not repeat.

These factors were partially offset by:

•The reduction in net income.

•A decrease in income taxes payable, primarily driven by business performance.

As of March 31, 2024, approximately $2.0 billion of our total worldwide holdings of cash, cash equivalents and marketable securities were held by foreign subsidiaries. The amount of cash, cash equivalents and marketable securities held by our U.S. and foreign subsidiaries fluctuates throughout the year due to a variety of factors, including the timing of cash receipts, strategic operating needs and disbursements in the normal course of business. Cash provided by operating activities in the U.S. continues to be our primary source of funds to finance domestic operating needs, capital expenditures, share repurchases, pension contributions and dividend payments to shareowners. All cash, cash equivalents and marketable securities held by foreign subsidiaries are generally available for distribution to the U.S. without any U.S. federal income taxes. Any such distributions may be subject to foreign withholding and U.S. state taxes. When amounts earned by foreign subsidiaries are expected to be indefinitely reinvested, no accrual for taxes is provided. As of March 31, 2024, we had $93 million of restricted cash. For more information on restricted cash, see note 1 to the unaudited, consolidated financial statements.

55

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Cash Flows From Investing Activities

Our primary sources (uses) of cash from investing activities were as follows (in millions):

	Three Months Ended March 31,
	2024			2023
Net cash (used in) from investing activities	$	1,566		$	(1,813)
Capital Expenditures:
Buildings, facilities and plant equipment	$	(327)		$	(368)
Aircraft and parts	(174)			(71)
Vehicles	(349)			(13)
Information technology	(185)			(157)
Total Capital Expenditures	$	(1,035)		$	(609)
Capital Expenditures as a % of revenue	4.8		%	2.7		%
Other Investing Activities:
Proceeds from disposal of businesses, property, plant and equipment	$	13		$	5
Net (purchases) sales and maturities of marketable securities	$	2,646		$	(1,192)
Acquisitions, net of cash acquired	$	(44)		$	(34)
Other investing activities	$	(14)		$	17

We have commitments for the purchase of aircraft, vehicles, equipment and real estate to provide for the replacement of existing capacity and anticipated future growth. Future capital spending for anticipated growth and replacement assets will depend on a variety of factors, including economic and industry conditions. Our 2024 investment program anticipates investments in technology initiatives and enhanced network capabilities, including approximately $1.0 billion of projects that support our environmental sustainability goals. It also provides for the maintenance of buildings, facilities and equipment and replacement of certain aircraft within our fleet. We currently expect that our capital expenditures will total approximately $4.5 billion in 2024, of which approximately 50 percent will be allocated to network enhancement projects and other technology initiatives.

For the quarter, total capital expenditures increased, primarily due to:

•Vehicle expenditure increases, driven by the timing of payments and availability of vehicle replacements.

•Information technology expenditure increases due to additional deployments of technology equipment and capitalized software projects.

•Aircraft expenditure increases due to final payments associated with the delivery of aircraft.

These were partially offset by decreased spending on buildings, facilities and plant equipment, driven by the timing of network enhancement projects.

We received cash proceeds of $2.6 billion from the sale of marketable securities due to the liquidation of our portfolio to provide additional resources for short-term and strategic operating needs.

Cash paid for acquisitions in both 2024 and 2023 related to the purchase of development areas for The UPS Store. Other investing activities were impacted by changes in our non-current investments, purchase contract deposits and various other immaterial items.

56

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Cash Flows From Financing Activities

Our primary sources (uses) of cash from financing activities were as follows (in millions, except per share data):

	Three Months Ended March 31,
	2024		2023
Net cash (used in) from financing activities	$	(3,666)	$	4
Share Repurchases:
Cash paid to repurchase shares	$	—	$	(751)
Number of shares repurchased	—		(4.1)
Shares outstanding at period end	855		859
Dividends:
Dividends declared per share	$	1.63	$	1.62
Cash paid for dividends	$	(1,348)	$	(1,348)
Borrowings:
Net borrowings (repayments) of debt principal	$	(2,198)	$	2,438
Other Financing Activities:
Cash received for common stock issuances	$	54	$	49
Other financing activities	$	(174)	$	(384)
Capitalization:
Total debt outstanding at period end	$	20,013	$	22,188
Total shareowners’ equity at period end	16,933		20,053
Total capitalization	$	36,946	$	42,241

We did not repurchase any shares under our stock repurchase program during first quarter of 2024, and we do not currently anticipate repurchasing any shares during the remainder of the year. We repurchased 4.1 million shares of class B common stock for $750 million during the first quarter of 2023. For additional information on our share repurchase activities, see note 12 to the unaudited, consolidated financial statements.

The declaration of dividends is subject to the discretion of the Board and depends on various factors, including our net income, financial condition, cash requirements, future prospects and other relevant factors. In the first quarter, we increased our quarterly cash dividend from $1.62 to $1.63 per share.

There were no issuances of debt during the quarter. Issuances of debt during the first quarter of 2023 consisted of fixed and floating rate senior notes of varying maturities totaling $2.5 billion.

Repayments of debt during the quarter consisted of $2.2 billion of short- and long-term commercial paper as well as scheduled principal payments on our finance lease obligations. In the first quarter of 2023, we made scheduled principal payments on our finance lease obligations and repaid certain amounts assumed in the Bomi Group acquisition.

As of March 31, 2024, we had $1.5 billion of fixed-rate senior notes outstanding that mature in 2024. We intend to repay or refinance these amounts when due. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

57

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The amount of commercial paper outstanding fluctuates based on daily liquidity needs. The following is a summary of our commercial paper program (in millions):

	Outstanding balance at quarter end ($)		Average balance outstanding ($)		Average interest rate
2024
USD	$	—	$	552	5.45	%
Total	$	—

As of March 31, 2024, we had no outstanding balances under our U.S. or European commercial paper programs.

The variation in cash received from common stock issuances primarily resulted from activity within the UPS 401(k) Savings Plan and our employee stock purchase plan in both the current and comparative period.

Other financing activities includes cash used to repurchase shares to satisfy tax withholding obligations on vested employee stock awards. Cash outflows for this purpose were $177 and $363 million for the first quarter of 2024 and 2023, respectively. The decrease was driven by changes in required repurchase amounts.

Except as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, we do not have guarantees or other off-balance sheet financing arrangements, including variable interest entities, which we believe could have a material impact on our financial condition or liquidity.

Sources of Credit

See note 9 to the unaudited, consolidated financial statements for a discussion of our available credit and the financial covenants that we are subject to as part of our credit agreements.

Contractual Commitments

There have been no material changes to the contractual commitments described in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.

Legal Proceedings and Contingencies

See note 7 and note 11 to the unaudited, consolidated financial statements for a discussion of judicial proceedings and other matters arising from the conduct of our business activities, and note 16 for a discussion of income tax related matters.

58

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Collective Bargaining Agreements

Status of Collective Bargaining Agreements

See note 7 to the unaudited, consolidated financial statements for a discussion of the status of our collective bargaining agreements.

Multiemployer Benefit Plans

See note 7 to the unaudited, consolidated financial statements for a discussion of our participation in multiemployer benefit plans.

Recent Accounting Pronouncements

Adoption of New Accounting Standards

See note 2 to the unaudited, consolidated financial statements for a discussion of recently adopted accounting standards.

Accounting Standards Issued But Not Yet Effective

See note 2 to the unaudited, consolidated financial statements for a discussion of accounting standards issued, but not yet effective.

59

Item 3.Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in certain commodity prices, foreign currency exchange rates, interest rates and equity prices. All of these market risks arise in the normal course of business, as we do not engage in speculative trading activities. In order to manage the risk arising from these exposures, we may utilize a variety of commodity, foreign currency exchange and interest rate forward contracts, options and swaps. A discussion of our accounting policies for derivative instruments and further disclosures are provided in note 15 to the unaudited, consolidated financial statements.

The total net fair value asset (liability) of our derivative financial instruments is summarized in the following table (in millions):

	March 31, 2024		December 31, 2023
Currency Derivatives	$	161	$	66

As of March 31, 2024 and December 31, 2023, we had no outstanding commodity hedge positions.

The information concerning market risk in Item 7A under the caption "Quantitative and Qualitative Disclosures about Market Risk" of our Annual Report on Form 10-K for the year ended December 31, 2023 is incorporated herein by reference.

Our market risks, hedging strategies and financial instrument positions as of March 31, 2024 have not materially changed from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023. In the first quarter of 2024, we entered into foreign currency exchange forward contracts on the Euro, British Pound Sterling, Canadian Dollar and Hong Kong Dollar, and had forward contracts expire. The fair value changes between December 31, 2023 and March 31, 2024 in the preceding table are primarily due to foreign currency exchange rate fluctuations between those dates.

The foreign currency exchange forward contracts, swaps and options previously discussed contain an element of risk that the counterparties may be unable to meet the terms of the agreements; however, we seek to minimize such risk exposures for these instruments by limiting the counterparties to banks and financial institutions that meet established credit guidelines and by monitoring counterparty credit risk to prevent concentrations of credit risk with any single counterparty.

We have agreements with all of our active counterparties (covering all of our derivative positions) containing early termination rights and/or bilateral collateral provisions whereby cash is required based on the net fair value of derivatives associated with those counterparties. The majority of these agreements require exchange of collateral when positions exceed $250 million.

Events such as a credit rating downgrade (depending on the ultimate rating level) could also allow us to take additional protective measures such as the early termination of trades. As of March 31, 2024, we held cash collateral of $82 million and were not required to post any collateral with our counterparties under these agreements. We have not historically incurred, and do not expect to incur in the future, any losses as a result of counterparty default.

60

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our Principal Executive Officer and Principal Financial and Accounting Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")). Based upon, and as of the date of, the evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required and is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial and Accounting Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

61

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

For a discussion of material legal proceedings affecting the Company, see note 11 to the unaudited, consolidated financial statements included in this report.

Item 1A.Risk Factors

There have been no material changes to the risk factors described in Part 1, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023. The occurrence of any of the risks described therein could materially affect us, including impacting our business, financial condition, results of operations, stock price or credit rating, as well as our reputation. These risks are not the only ones we face. We could also be materially adversely affected by other events, factors or uncertainties that are unknown to us, or that we do not currently consider to be material.

62

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

In January 2023, the Board of Directors approved a share repurchase authorization of $5.0 billion for class A and class B common stock. We do not anticipate repurchasing any shares in 2024. As of March 31, 2024, we had $2.8 billion of this share repurchase authorization available.

For additional information on our share repurchase activities, see note 12 to the unaudited, consolidated financial statements.

63

Item 5.      Other Information

Insider Trading Arrangements and Policies

None.

64

Item 6. Exhibits

3.1	—	Restated Certificate of Incorporation of United Parcel Service, Inc. (incorporated by reference to Exhibit 3.3 to Form 8-K filed on May 12, 2010).
3.2	—	Amended and Restated Bylaws of United Parcel Service, Inc. (incorporated by reference to Exhibit 3.1 to Form 8-K, filed on May 9, 2023).
10.1	—	United Parcel Service, Inc. Key Employee Severance Plan, effective March 20, 2024.*
10.2	—	United Parcel Service, Inc. Management Incentive Program Amended and Restated Terms and Conditions, effective March 20, 2024.*
10.3	—	United Parcel Service, Inc. Long-Term Incentive Performance Program Amended and Restated Terms and Conditions, effective March 20, 2024.*
10.4	—	United Parcel Service, Inc. Stock Option Program Amended and Restated Terms and Conditions, effective March 20, 2024.*
31.1	—	Certification of the Principal Executive Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	—	Certification of the Principal Financial and Accounting Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	—	Certification of the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	—	Certification of the Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	—	The following unaudited financial information from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 is formatted in Inline XBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Statements of Consolidated Income, (iii) the Statements of Consolidated Comprehensive Income (Loss), (iv) the Statements of Consolidated Cash Flows, and (v) the Notes to the Consolidated Financial Statements.
104	—	Cover Page Interactive Data File - The cover page from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 is formatted in Inline XBRL (included as Exhibit 101).

__________________________

* Management contract or compensatory plan or arrangement.

65

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		UNITED PARCEL SERVICE, INC. (Registrant)
Date:	May 3, 2024	By:	/s/ BRIAN O. NEWMAN
			Brian O. Newman
			Executive Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer)

66

EX-10.1

Exhibit 10.1

UNITED PARCEL SERVICE, INC.

KEY EMPLOYEE SEVERANCE PLAN

MARCH 20, 2024

1.    Scope. This United Parcel Service, Inc. Key Employee Severance Plan (this “Plan”) applies to such officers and/or key employees of United Parcel Service, Inc. (the “Company”) who are designated for participation in Section 3(a) of this Plan or who are otherwise designated for participation by the Compensation and Human Capital Committee (or its successor, the “Committee”) of the Board of Directors of the Company (the “Board”) from time to time (collectively, “Participants”). Certain capitalized terms used in this Plan have the meanings ascribed to them in Section 8(k) or Section 14 of this Plan.

2.    Purpose. The purpose of this Plan is to set forth certain compensation and benefits that are due to a Participant upon the Participant’s termination of employment with the Company as described herein.

3.    Participation.

(a)    Unless otherwise determined by the Committee, an employee of the Company or any of its Subsidiaries shall be a Participant in this Plan only if such employee is (i) the Chief Executive Officer of the Company (the “CEO”), (ii) an employee of the Company or a Subsidiary classified by the Company as being in “Band 80” according to the Company’s policies and procedures (a “Tier 2 Participant”), (iii) an employee of the Company or a Subsidiary classified as being in “Band 70” in accordance with the Company’s policies and procedures (a “Tier 3 Participant”), or (iv) an employee of the Company or a Subsidiary classified as being in “Band 60” in accordance with the Company’s policies and procedures (a “Tier 4 Participant”). For purposes of determining the benefits (if any) to which a Participant is entitled under this Plan upon a termination of employment, the Participant’s participation tier under this Plan shall be determined as of the Participant’s Termination Date.

(b)    Each Participant is an at-will employee whose employment may be terminated by the Participant or the Company at any time for any reason. Upon the termination of employment of a Participant, this Plan shall govern the rights and responsibilities of the Company and the Participant with respect to the matters addressed by this Plan.

4.    Qualifying Termination of Employment. If the Company terminates the employment of a Participant (other than due to Cause, a Disability Termination, or the Participant’s death), then the Company will pay and provide to the Participant the amounts and benefits specified in this Section 4 subject to the Participant’s compliance with the terms of this Plan (including Section 8 hereof), except that the Company will not be obligated to pay or provide the benefits specified in Section 4(b), (c), (d), (e) and (f) (collectively, the “Severance Benefits”) unless either (x) the Company is deemed to have waived its right to present and require a Release as provided in Section 7(b) or (y) the Participant has timely executed (and not revoked) a Release as contemplated by Section 7(c). The amounts and benefits specified in this Section 4 are as follows:

(a)    an amount in cash equal to the sum of (i) the Participant’s Annual Base Salary for the year in which the termination of employment occurs that has been earned as of the Termination Date, (ii) Participant’s business expenses that are reimbursable pursuant to applicable Company policies and procedures and (iii) any accrued but unused paid time off for the calendar year through the Termination Date, in each case to the extent not already paid in accordance with Company policy (collectively, “Accrued Base Compensation”). The Company will pay this amount to the Participant within 30 days following the Termination Date and in accordance with applicable law;

(b)    an amount in cash equal in value to the product of (i) the dollar value of the percentage of the Participant’s Target Annual Bonus that would have been earned for the fiscal year in which the termination of employment occurs, based on actual performance results for the full fiscal year performance period, multiplied by (ii) a fraction, the numerator of which is the number of months that the Participant was employed by the Company

or a Subsidiary during the applicable fiscal year, and the denominator of which is twelve (12). For clarity, one day worked in a month shall count as a full month. Such amount will be in lieu of any other benefits under the MIP or any other annual incentive program for the fiscal year in which the termination of employment occurs. The Company will pay this amount to the Participant at the time it would have been paid pursuant to the MIP or other annual incentive program, as applicable, and in all events in compliance with Section 409A;

(c)    a lump sum amount in cash equal to the Participant’s Applicable Cash Severance Amount. Subject to Section 10, the Company will pay this amount to the Participant as soon as practicable (but no later than 74 days) following the Termination Date;

(d)    a lump sum amount in cash equal to the portion of the Participant’s monthly COBRA premium for the Participant and the Participant’s dependents to the extent it exceeds the monthly premium amount paid by the Participant for such coverage immediately prior to the Termination times the number of months in the Participant’s Applicable COBRA Period (which payment shall be taxable to the Participant). For the avoidance of doubt, nothing in this Plan shall prohibit the Company from amending or terminating any group health plan. Notwithstanding anything in this Plan to the contrary, in the event that the payment of amounts payable under this subsection (d) shall result in adverse tax consequences under Chapter 100 of the Code, Code Section 4980D or otherwise to the Company, the Participant and the Company shall undertake commercially reasonable efforts to restructure such benefit in an economically equivalent manner to avoid the imposition of such taxes on the Company, provided, however, that should the Company’s auditors determine in good faith that no such alternative arrangement is achievable, the Participant shall not be entitled to his or her rights to payment under this subsection (d). Further, neither the Company nor any of its employees, directors, managers, board members, affiliates, parents, stakeholders, shareowners, agents, successors, predecessors or related parties guarantees the tax treatment of any benefit under this subsection (d), and no such person shall have liability to the Participant or his or her beneficiaries with respect to the taxation of such benefits or amounts payable in respect thereof;

(e)    reasonable career counseling services through a provider of the Company’s choice with a value not to exceed the Applicable Career Counseling Amount. Such benefit shall be taxable to the Participant. Such career counseling services cannot extend beyond the last day of the first calendar year following the calendar year of termination of the Participant’s employment; and

(f)    to the extent granted by the Company to the Participant on or after the effective date of this Plan pursuant to the United Parcel Service, Inc. 2021 Omnibus Incentive Compensation Plan or any successor plan (the “2021 Plan”), (i) Restricted Performance Units (as defined in the 2021 Plan) granted under the MIP or the UPS Long-Term Incentive Performance Program that are outstanding as of the Termination Date shall be treated as though the termination of the Participant’s employment was a “Retirement” pursuant to the terms of the 2021 Plan and applicable award documents, (ii) Options (as defined in the 2021 Plan), to the extent vested as of the Termination Date (other than as described in (iii) below), shall remain exercisable until the earlier of (x) the first anniversary of the Termination Date and (y) the original expiration date for such Options, and (iii) Options that vest as a result of a Participant’s “Retirement” shall be exercisable until the tenth anniversary of the Grant Date of such Option.

(g)    Except as otherwise set forth in this Section 4, equity compensation awards granted to the Participant on or after the effective date of this Plan shall be treated as set forth in the 2021 Plan and applicable award documents and any other then-effective agreement with the Participant that may alter the treatment of such equity compensation awards upon such Participant’s termination of employment.

(h)    Except for the benefits stated in this Section 4, such Participant’s participation in all benefit plans, programs and arrangements of the Company shall be governed by the terms of the plans, programs or arrangements, if any, governing such benefits. No Participant shall receive a duplication of payments or benefits under Section 4 and Section 5 of this Plan. If a Participant has an individual severance agreement with the Company, any amount paid under that severance agreement shall be offset against the Severance Benefits provided under this Plan.

5.    Termination for Cause; Voluntary Termination. If the Company terminates the employment of a Participant due to Cause, a Disability Termination, or the Participant’s death, or a Participant voluntarily terminates employment with the Company, the Company shall pay or provide to the Participant his or her Accrued Base Compensation. The Accrued Base Compensation shall be payable within 30 days following the Termination Date. Except for the benefits stated in this Section 5, the Participant’s participation in all benefit plans, programs and arrangements of the Company shall be governed by the terms of the plans, programs or arrangements, if any, governing such benefits. No Participant shall receive a duplication of payments or benefits under Section 4 and Section 5 of this Plan.

6.    Treatment of Other Equity Compensation Awards on Termination. Each equity compensation award granted by the Company to the Participant prior to the effective date of this Plan pursuant to the United Parcel Service, Inc. 2015 Omnibus Incentive Compensation Plan, the United Parcel Service, Inc. 2018 Omnibus Incentive Compensation Plan, or the 2021 Plan (collectively, the “Equity Plans”) and outstanding as of the Termination Date shall be treated as set forth in the applicable Equity Plan and award document and any other then-effective agreement with the Participant that may alter the treatment of such equity compensation award upon such Participant’s termination of employment.

7.    Release. This Section 7 will apply only upon termination of a Participant’s employment by the Company other than due to Cause, a Disability Termination, or the Participant’s death, as further described in this Plan.

(a)    Presentation of Release by the Company. If this Section 7 applies, the Company may present to the Participant, not later than 21 days after the Termination Date, a release, in a form reasonably acceptable to and provided by the Company (a “Release”), of all current and future claims, known or unknown, arising on or before the date on which the Release is to be executed, that the Participant or the Participant’s assigns have or may have against the Company or any Subsidiary, and the directors, officers, and affiliates of any of them (which Release will require the Participant to affirm the Participant’s obligations as set forth in this Plan).

(b)    Effect of Failure by the Company to Present Release. If the Company fails to present a Release to the Participant as contemplated by Section 7(a), the Company will be deemed to have waived the requirement that the Participant execute a Release as a condition to receiving payments under any portion of Section 4.

(c)    Execution of Release by the Participant or the Participant’s Personal Representative. If the Company does present a Release to the Participant as contemplated by Section 7(a), the Participant will have until the end of the applicable time period for consideration set forth in the Release (the “Consideration Period”) to deliver an executed copy of the Release to the Company and thereby satisfy the condition to receiving payments under any portion of Section 4, provided that the Participant does not revoke the execution of the Release during any applicable revocation period.

(d)    Effect of Failure to Execute Release or of Revocation of Release. If the Participant fails to deliver an executed copy of the Release to the Company by the end of the Consideration Period or revokes the execution of the Release during any applicable revocation period, the Participant will be deemed to have waived the right to receive all Severance Benefits.

8.    Restrictive Covenants.

(a)    Acknowledgements. By participating in this Plan, each Participant acknowledges and agrees that, by reason of the Participant’s highly specialized skillset and the Company’s investment of time, training, money, trust, and exposure to Confidential Information, the Participant is intimately involved in the planning and direction of the Company’s global business operations. Each Participant further acknowledges and agrees that the Participant’s agreement to enter into, and the Participant’s compliance with, the covenants in this Section 8 are material factors in the Company’s decision to permit the Participant to participate in this Plan, which constitutes good and valuable consideration for the covenants set forth in this Section 8. Participant further acknowledges and

agrees that a breach or threatened breach of any of the covenants in this Section 8 would result in material and irreparable damage and injury to the Company and that it would be difficult or impossible to establish the full monetary value of such damage. Participant further acknowledges and agrees that the covenants in this Section 8 are reasonable, necessary, and essential for the Company to protect its legitimate business interests in: (i) the Company’s trade secrets (as defined under applicable law, including the Georgia Trade Secrets Act of 1990 (the “Act”) and the Defend Trade Secrets Act of 2016 (the “DTSA”)); (ii) the Company’s valuable Confidential Information; (iii) substantial relationships with specific prospective or existing customers of the Company; (iv) customer good will associated with (A) the business of the Company, including, but not limited to, by way of trade name, trademark, service mark, or trade dress, (B) a specific geographic location; or (C) a specific marketing or trade area; and (v) extraordinary or specialized training you have received or will receive. Participant further acknowledges and agrees (i) by reason of the Company’s investment of time, training, money, trust, exposure to the public, or exposure to customers, vendors, or other business relationships during the course of Participant’s employment with the Company, Participant has attained or will attain a high level of influence or credibility with the Company’s Protected Customers, vendors, or other business relationships; and (ii) by reason of working for the Company, is or will be in possession of selective or specialized skills, learning, or abilities, or customer contacts or customer information, or Confidential Information. Finally, Participant further acknowledges and agrees that the scope of responsibilities of the position extends throughout the geographic area where the Company has conducted and will conduct business during Participant’s employment, and that Participant’s work for the Company has brought and will bring Participant into close contact with many of the Company’s customers, trade secrets and confidential and proprietary information.

(b)    Unfair Competition. By Participating in this Plan, each Participant acknowledges and agrees that, as a result of the Participant’s receipt of Confidential Information, the Participant’s role at the Company, and the Participant’s relationships with Company customers and/or employees the Participant would have an unfair competitive advantage if the Participant were to violate this Section 8 and that, in the event that the Participant’s employment with the Company terminates for any reason, the Participant possesses marketable skills and abilities that will enable the Participant to find suitable employment without violating the covenants set forth in this Section 8. Each Participant further acknowledges and affirms that the Participant is accepting participating in this Plan voluntarily, that the Participant has read this Plan carefully, that the Participant has had a full and reasonable opportunity to consider this Plan (including actual consultation with legal counsel), and that the Participant has not been pressured or in any way coerced, threatened or intimidated into participating in this Plan.

(c)    Non-Disclosure and Prohibition Against Use of Confidential Information and Trade Secrets. By participating in this Plan, each Participant agrees that the Participant will not, directly or indirectly, reveal, divulge, or disclose any Confidential Information or Trade Secrets to any person not expressly authorized by the Company to receive such information. Each Participant further agrees that the Participant will not, directly or indirectly, use or make use of any Confidential Information or Trade Secrets in connection with any business activity other than business activity that the Participant is pursuing on behalf of the Company. Each Participant acknowledges and agrees that this Section 8 is not intended to, and does not, alter either the Company’s rights or the Participant’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. The act of emailing Confidential Information or Trade Secrets or both to Participant’s personal email address is considered to be a breach of this section. Each Participant also understands that nothing contained in this Section 8 limits the Participant’s ability to communicate with any federal, state or local governmental agency or commission (“Government Agencies”) or otherwise participate in any investigation or proceeding that may be conducted by any Government Agencies in connection with any charge or complaint, whether filed by the Participant, on the Participant’s behalf, or by any other individual. Each Participant additionally understands and agrees that as required by the Defend Trade Secrets Act of 2016 (“DTSA”), 18 U.S.C. § 1833(b), the Participant has been notified that if the Participant makes a confidential disclosure of a Company Trade Secret (as defined in 18 U.S.C. § 1839) to a government official or an attorney for the sole purpose of reporting or investigating a suspected violation of law, or in a complaint or other document filed in a legal proceeding, so long as any document the Participant files containing the trade secret is filed under seal and the Participant does not disclose the trade secret except pursuant to court order, the Participant shall not be held civilly or criminally liable under this Plan or under any federal or state trade secret law for such a disclosure. The DTSA does not authorize, or limit liability for, an act that is otherwise prohibited by law, such as the unlawful access of material by unauthorized means. Each Participant

promises that, no later than the end of the Participant’s Company employment, he or she will return to the Company all files, memoranda, documents, records, credit cards, keys, computers, printers, telephones, and other property of the Company or its affiliates in the Participant’s possession, custody, or control, including without limitation all Confidential Information. To the extent that a Participant has electronic files or information in Participant’s personal possession or under his or her control that belong to the Company or contain Confidential Information (specifically including without limitation electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), each Participant promises that he or she will notify the Company in writing as to such possession or control prior to the Termination Date, and, if requested to do so by the Company, no later than the Termination Date, the Participant will cooperate with the Company, and take direction from the Company, regarding the deletion or return of all such files and information, including all copies and derivatives thereof from all non-Company-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable. If, after the Termination Date, Participant becomes aware that Participant has electronic files or information in Participant’s personal possession or under Participant’s control that belong to the Company or contain Confidential Information (specifically including without limitation electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), Participant promises that he or she will immediately so notify the Company and cooperate with the Company, and take direction from the Company, regarding the deletion or return of all such files and information, including all copies and derivatives thereof. For the avoidance of doubt, Participant is not permitted to delete any Company files or information from any computers, mobile devices, electronic media, or in cloud storage (including those owned personally by Participant) unless directed to do so in writing by the Company. To the extent requested by the Company, whether prior to or after the Termination Date, Participant will voluntarily participate in a process involving a forensic computer specialist chosen by the Company to identify, quarantine, preserve and delete all electronic files or information, including all copies and derivatives thereof, in Participant’s possession or under Participant’s control that belong to the Company or contain Confidential Information.

(d)    Non-Solicitation of Protected Employees. During the Non-Solicit Restricted Period, a Participant will not, without the prior written consent of the Company, directly or indirectly, solicit or induce or attempt to solicit or induce any Protected Employee to terminate or cease his/her employment relationship with the Company or to enter into employment with the Participant or any other person or entity. This employee non-solicitation provision is limited to the geographic area where the Company did business during Participant’s employment.

(e)    Non-Solicitation of Protected Customers. During the Non-Solicit Restricted Period, a Participant will not, without the prior written consent of the Company, directly or indirectly, solicit, divert, take away or attempt to solicit, divert or take away a Protected Customer for purposes of providing products and services that are competitive with those provided by the Company.

(f)    Covenant Not to Compete. During the Non-Compete Restricted Period, a Participant will not, without the prior written consent of the Company, (i) work for a Restricted Competitor; (ii) provide consulting services to a Restricted Competitor; or (iii) otherwise provide services to a Restricted Competitor, in each of (i) through (iii) that involves the provision of services that are similar to or relate to those services that the Participant provided to the Company at any time during Participant’s employment and that relate, in any way, directly or indirectly, to the Restricted Competitor’s competition with the transportation, delivery or logistics services provided by the Company during the Participant’s employment. This non-compete provision is limited to the geographic area where the Company did business during the Participant’s employment.

(g)    Enforcement. Each Participant acknowledges and agrees that the covenants in Section 8(c) through 8(f) (“Protective Covenants”) are necessary to protect the Company’s legitimate business interests. In the event that a Participant breaches, or threatens to breach, the Protective Covenants, the Participant agrees that the Company shall have the right and remedy to: (i) enjoin the Participant, preliminarily and permanently (without the necessity of posting bond), from violating or threatening to violate the Protective

Covenants because any breach or threatened breach of the Protective Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy; (ii) require the Participant to account for and pay over to the Company all compensation, profits, monies, or other benefits derived or received by the Participant as the result of any breach of the Protective Covenants; and (iii) require the Participant to pay the reasonable attorneys’ fees and costs incurred by the Company in enforcing the Protective Covenants. In addition, in the event of such a violation, the Participant will automatically forfeit any portion of the Severance Benefits that have not already been paid to the Participant at the time of the violation.

(h)    Severability/Reformation. Each Participant acknowledges and agrees that the Protective Covenants are reasonable in time, scope, geography and all other respects and that they will be considered and construed as separate and independent covenants. Should any part or provision of any of the Protective Covenants be held invalid, void or unenforceable in any court of competent jurisdiction, each Participant understands and agrees that such invalidity, voidness or unenforceability does not invalidate, void or otherwise render unenforceable any other part or provision of this Plan. Each Participant further agrees that, in the event any court of competent jurisdiction finds any of the Protective Covenants to be invalid or unenforceable (in whole or in part), such court shall modify the invalid or unenforceable term so that the Protective Covenants are enforceable to the fullest extent permitted by law.

(i)    Tolling During Violation. In the event the enforceability of any of the terms of this Plan is challenged in a court of competent jurisdiction and Participant is not enjoined from breaching any of the restrictive covenants, then if a court of competent jurisdiction finds that the challenged restrictive covenant(s) is enforceable, the time periods set forth herein shall be deemed tolled upon the filing of the claim challenging the enforceability of this Plan until the dispute is finally resolved and all periods of appeal have expired.

(j)    Disclosure. In the event that a Participant leaves the Company for any reason, the Participant agrees to disclose the existence and terms of this Section 8 to any prospective employer, partner, co-venturer, investor or lender prior to entering into an employment, partnership or other business relationship with such prospective employer, partner, co-venturer, investor or lender.

(k)    Definitions. Solely for purposes of this Section 8, the following terms shall have the following meanings:

(i)    “Company” means, for purposes of this Section 8 only, United Parcel Service, Inc., a Delaware Corporation with its principal place of business in Atlanta, Georgia, and all of its Affiliates (as defined in O.C.G.A. § 13-8-51(1)).

(ii)    “Confidential Information” means all information regarding the Company, its activities, businesses or customers which the Participant learned as a result of the Participant’s employment, that is valuable to the Company and that is not generally disclosed by practice or authority to persons not employed or otherwise engaged by the Company, whether or not it constitutes a Trade Secret. “Confidential Information” shall include, but is not limited to, financial plans and data; legal affairs; management planning information; business plans; acquisition plans; operational methods and technology; market studies; marketing plans or strategies; product development techniques or plans; customer lists; details of customer contracts; current and anticipated customer requirements and specifications; customer pricing and profitability data; past, current and planned research and development; employee-related information and new personnel acquisition plans. “Confidential Information” shall not include information that is or becomes generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of the Company. However, although certain information may be generally known in the relevant industry, the fact that the Company uses such information may not be so known and in such instance the information would compromise Confidential Information. This definition shall not limit any definition of “confidential information” or any equivalent term under applicable state or federal law.

(iii)    “Material Contact” means the contact between Participant and each customer or actively sought potential customer of the Company: (A) with whom or with which Participant dealt on behalf of the Company in support of the initiation, maintenance or furtherance of a business relationship between Company and each customer or actively sought potential customer; (B) whose dealings with the Company were coordinated or supervised by Participant; (C) about whom Participant obtained Confidential Information in the ordinary course of business as a result of Participant’s association with the Company; or (D) who receives products or services authorized by the Company, the sale or provision of which results or resulted in compensation, commissions, or earnings for Participant in the two (2) years prior to Participant's termination of employment.

(iv)    “Non-Compete Restricted Period” means during the Participant’s employment with the Company and for a period of one (1) year after the Participant’s employment ends for any reason.

(v)    “Non-Solicit Restricted Period” means during the Participant’s employment with the Company and for a period of two (2) years after the Participant’s employment ends for any reason.

(vi)    “Protected Customers” means customers or actively sought potential customers with whom the Participant had Material Contact in the two (2) years prior to the Participant’s termination of employment.

(vii)    “Protected Employee” means an employee of the Company who is employed by the Company at the time of any solicitation or attempted solicitation by the Participant and with whom (A) the Participant had contact during the two (2) years prior to the Participant’s termination of employment, or (B) about whom the Participant learned Confidential Information during the two (2) years prior to the Participant’s termination of employment.

(viii)    “Restricted Competitor” means a person engaged in any business competitive with the Company’s and its Subsidiaries’ businesses of package delivery and global supply chain management solutions. Restricted Competitors shall be defined to include any affiliates of such entities that are engaged in delivery, transportation, and/or logistics services and activities. In addition, the Restricted Competitors include, without limitation, the entities listed on the United Parcel Service, Inc. Key Employee Severance Plan Restricted Competitor List provided to Participants from time to time, as memorialized in the Company’s records.

(ix)    “Trade Secret” means all of the Company’s information that the Participant learned about as a result of the Participant’s employment, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, distribution lists or a list of actual or potential customers, advertisers or suppliers, that (A) derives economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. This definition shall not limit any definition of “trade secrets” or any equivalent term under applicable law.

(l)    Amendments for Certain Employees.

(i)    Amendments for California Employees. Sections8(d) through 8(g) do not apply to a Participant if the Participant primarily resided or worked in California immediately prior to the end of your Company employment, or if following the termination of your Company employment, you reside and work in California. Notwithstanding the foregoing, such Participant is and shall continue to be prohibited from any unauthorized use, transfer, or disclosure of the Company’s Confidential Information, including trade secrets, pursuant to the California Trade Secrets Act, the U.S. Defend Trade Secrets Act of 2016, any other confidentiality and non-disclosure agreements with the Company, and any other applicable federal, state and common law protections afforded proprietary business and trade secret information. Each

such Participant also agrees that the Participant will not, without the prior written consent of the Company, directly or indirectly, interfere with the Company’s business by soliciting or inducing or attempt to solicit or induce any Protected Employee to terminate or cease his/her employment relationship with the Company for a period of twelve (12) months from and after the Participant’s employment ends.

(ii)    Amendments for Hawaii, North Dakota, Minnesota, and Oklahoma Employees. Section 8(g) does not apply to a Participant if the Participant primarily resided and worked for the Company in Hawaii, North Dakota, Minnesota, or Oklahoma immediately prior to the end of Participant’s Company employment, and following the termination of Participant’s Company employment, Participant continues to reside and work in Hawaii, North Dakota, Minnesota, or Oklahoma.

(iii)    Amendment for Massachusetts Employees. Section 8(g) does not apply to a Participant if: 1) the Participant primarily resided and worked in Massachusetts prior to the end of Participant’s Company employment, and following the termination of Participant’s Company employment, Participant continues to reside and work in Massachusetts; and 2) Section 8(g) is unenforceable pursuant to Massachusetts General Laws c. 149 § 24L.

(m)    Other Restrictions. For the avoidance of doubt, if a Participant is based in the United States this Section 8 does not supersede any protective covenants applicable to the Participant with respect to the Company, and those covenants shall continue in full force and effect in accordance with their terms. If a Participant is based outside the United States any protective covenants set out in the Participant’s contract of employment, or otherwise applicable to the Participant’s employment with the Company, whether concluded prior to or after the date of this Plan, supersede the equivalent provisions set out in this Section 8.

9.    Clawback; Recoupment. Notwithstanding anything in this document to the contrary, each Eligible Employee acknowledges and agrees that this document and the awards described herein (and any settlement thereof) are subject to the terms and conditions of the Company’s Incentive-Based Compensation Clawback Policy (or such other policy relating to the recovery of incentive compensation as may be in effect from time to time), and that relevant sections of this document shall be deemed superseded by and subject to the terms and conditions of such policy. Further, if the Committee reasonably, and in good faith, determines that a Participant has violated any applicable provisions of Section 8 of this Plan, then the Committee may (in its discretion) provide for the reduction, cancellation, termination or recovery from such Participant all (or any portion) of the Severance Benefits that were previously paid or provided to the Participant, and any such determination by the Committee shall be binding on such Participant.

10.    Tax Matters; Section 409A.

(a)    The payments and benefits provided under this Plan will be subject to all applicable federal, state and other governmental withholdings.

(b)    To the extent applicable, it is intended that this Plan comply with or be exempt from the provisions of Section 409A, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to a Participant. Consistent with that intent, and to the extent required under Section 409A, for benefits that are to be paid in connection with a termination of employment, “termination of employment” or any similar term shall be limited to such a termination that constitutes a “separation from service” under Section 409A. Notwithstanding any provision of Section 4 or Section 5 to the contrary, if the period commencing on the date of the Participant’s termination of employment begins in one taxable year of the Participant and the 74th day following the date of such termination of employment is in a subsequent taxable year, any amounts payable under Section 4 or Section 5 which are considered deferred compensation subject to Section 409A shall be paid in such subsequent taxable year.

(c)    Notwithstanding any provision of this Plan to the contrary, if a Participant is a “specified employee,” determined pursuant to procedures adopted by the Company in compliance with Section 409A, on the date of his or her separation from service (within the meaning of Treasury Regulation section 1.409A-1(h)) and if any portion of the payments or benefits to be received by the Participant upon his or her termination of employment

would constitute a “deferral of compensation” subject to Section 409A, then to the extent necessary to comply with Section 409A, amounts that would otherwise be payable pursuant to this Plan during the six-month period immediately following the Participant’s termination of employment will instead be paid or made available on the earlier of (i) the first business day of the seventh month after the Termination Date, or (ii) the Participant’s death. For purposes of application of Section 409A, to the extent applicable, each payment made under this Plan shall be treated as a separate payment and not one of a series of payments for purposes of Section 409A.

(d)    Notwithstanding any provision of this Plan to the contrary, to the extent any reimbursement or in-kind benefit provided under this Plan is nonqualified deferred compensation within the meaning of Section 409A: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; (ii) the reimbursement of an eligible expense must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(e)    If, (i) as of the date of commencing participation in this Plan, a Participant is or was party to an agreement or arrangement with the Company that entitled Participant to compensation or benefits which is considered deferred compensation for purposes of Section 409A (in each case, an “Other Severance Arrangement”), and (ii) the time and form of any payments under this Plan would result in tax penalties under Section 409A, then, to the extent necessary to avoid tax penalties under Section 409A, any amounts owed pursuant to this Plan shall instead be paid (to the extent possible) at the time and in the manner provided for in such Other Severance Arrangement.

(f)    In no event shall this Section 10 or any other provisions of this Plan be construed to require the Company to provide any gross-up for the tax consequences under Section 409A of any provisions of, or payments under, this Plan, and the Company shall have no responsibility for tax consequences under Section 409A to a Participant resulting from the terms or operation of this Plan.

11.    Adjustment of Certain Payments and Benefits. Notwithstanding any provision of this Plan to the contrary, if any payment or benefit to be paid or provided hereunder or under any other plan or agreement would be an “Excess Parachute Payment,” within the meaning of Section 280G of the Code, or any successor provision thereto, but for the application of this sentence, then the payments and benefits to be paid or provided hereunder shall be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of any such payment or benefit, as so reduced, constitutes an Excess Parachute Payment; provided, however, that the foregoing reduction shall be made only if and to the extent that such reduction would result in an increase in the aggregate payments and benefits to be provided, determined on an after-tax basis (taking into account the excise tax imposed pursuant to Section 4999 of the Code, or any successor provision thereto, any tax imposed by any comparable provision of state law, and any applicable federal, state and local income taxes). The determination of whether any reduction in such payments or benefits to be provided hereunder is required pursuant to the preceding sentence shall be made at the expense of the Company, if requested by the Participant or the Company, by the Company’s independent accountants or a nationally recognized law firm chosen by the Company. The fact that the Participant’s right to payments or benefits may be reduced by reason of the limitations contained in this Section shall not of itself limit or otherwise affect any other rights of the Participant under this Plan. In the event that any payment or benefit intended to be provided hereunder is required to be reduced pursuant to this Section, then the reduction will be made in accordance with Section 409A and will occur in the following order: (a) first, by reducing any cash payments with the last scheduled payment reduced first; (b) second, by reducing any equity-based benefits that are included at full value under Q&A-24(a) of the Treasury Regulations promulgated under Section 280G of the Internal Revenue Code (the “280G Regulations”), with the highest value reduced first; (c) third, by reducing any equity-based benefits included on an acceleration value under Q&A-24(b) or 24(c) of the 280G Regulations, with the highest value reduced first; and (d) fourth, by reducing any non-cash, non-equity based benefits, with the latest scheduled benefit reduced first. Such payments or benefits shall be reduced in a manner that maximizes the Participant’s economic position. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A, and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.

12.    Amendments. This Plan may be amended or terminated at any time by the Board.

13.    Effective Date/Termination. This Plan is effective as of May 4, 2022, and, except as otherwise specifically provided herein in Section 8(m), supersedes all prior understandings, agreements or representations, written or oral, with respect to the subject matter herein with respect to Participants, including any protective covenant agreement or other individual severance arrangement with the Company, and, for the avoidance of doubt, a Participant who becomes entitled to Severance Benefits under this Plan will not be eligible for severance benefits under any such protective covenant agreement or other individual severance arrangement.

14.    Other Definitions. The following capitalized terms that are used, but not otherwise defined, in this Plan shall have the meaning set forth in this Section:

(a)    “Annual Base Salary” means the monthly amount a Participant is entitled to receive as base salary from time to time, multiplied by 12, including any amounts deferred pursuant to any contributions to the Company’s 401(k) Retirement Savings Plan and excluding all annual cash performance awards (or equivalent award for annual performance), bonuses, equity sharing plans, overtime, long-term incentive awards, welfare benefit premium reimbursements and other incentive compensation, payable by the Company as consideration for the Participant’s services.

(b)    “Applicable Career Counseling Amount” means:

(i)    For the CEO, $30,000;

(ii)    For a Tier 2 Participant, $20,000;

(iii)    For a Tier 3 Participant, $15,000; or

(iv)    For a Tier 4 Participant, $10,000.

(c)    “Applicable Cash Severance Amount” means an amount equal to:

(i)    for the CEO, the product of (A) two times (B) the sum of the Participant’s Annual Base Salary plus the current Target Annual Bonus in effect immediately prior to the Participant’s Termination Date;

(ii)    for a Tier 2 Participant, the product of (A) one times (B) the sum of the Participant’s Annual Base Salary plus the current Target Annual Bonus in effect immediately prior to the Participant’s Termination Date;

(iii)    for a Tier 3 Participant, the product of (A) 1.5 times (B) the Participant’s Annual Base Salary in effect immediately prior to the Participant’s Termination Date; or

(iv)    for a Tier 4 Participant, the product of (A) one times (B) the Participant’s Annual Base Salary in effect immediately prior to the Participant’s Termination Date.

(d)    “Applicable COBRA Period” means:

(i)    for the CEO or a Tier 2 Participant, the period of 18 months commencing on the Termination Date;

(ii)    for a Tier 3 Participant, the period of 12 months commencing on the Termination Date; or

(iii)    for a Tier 4 Participant, the period of 6 months commencing on the Termination Date.

(e)    “Cause” means that the Company or a Subsidiary or an affiliate for which a Participant works has determined that (i) the Participant has been insubordinate or refused or failed to carry out the instructions or policies of the Company or the Subsidiary or affiliate for which the Participant works, or the supervisors or managers to whom the Participant reports; (ii) the Participant has engaged in misconduct or negligence in performing the Participant’s duties and responsibilities; (iii) the Participant has engaged in conduct which is dishonest, fraudulent or materially injurious to the Company, or the Subsidiary or affiliate for which the Participant works; (iv) the Participant has been indicted for a felony or any crime involving dishonesty, fraud or moral turpitude; and/or (v) the Participant has materially breached the Participant’s employment agreement, if any, or engaged in activity prohibited by any other agreement between the Participant and the Company or the Subsidiary or affiliate for which the Participant works.

(f)    “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.

(g)    “Code” means the Internal Revenue Code of 1986, as amended.

(h)    “Disability Termination” means termination of the Participant’s employment by the Company when the Participant, as reasonably determined by the Company, is unable to perform the material and substantial duties of the Participant’s own job because of an illness or injury.

(i)    “MIP” means, with respect to any Participant who participates in the UPS Management Incentive Program or the UPS International Management Incentive Program during the relevant fiscal year, such applicable program.

(j)    “Section 409A” means Section 409A of the Code. References in this Plan to Section 409A are intended to include any proposed, temporary, or final regulations, or any other guidance, promulgated with respect to Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

(k)    “Subsidiary” means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture, limited liability company, unincorporated association or other similar entity), but more than 50% of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.

(l)    “Target Annual Bonus” means:

(i)    for a Participant who participates in the MIP during the relevant fiscal year, such Participant’s “Performance Incentive Award Target” with respect to the “Performance Incentive Award” under the MIP for such fiscal year, and specifically excludes any “Ownership Incentive Award,” or “Ceremonial Share Ownership Award”; and

(ii)    for any other Participant, such Participant’s target annual incentive award for the relevant fiscal year.

(m)    “Termination Date” means the date on which a Participant’s employment with the Company and its Subsidiaries terminates.

15.    Miscellaneous Provisions.

(a)    No Set Off; No Obligation to Seek Other Employment or to Otherwise Mitigate Damages; No Effect Upon Other Plans. Except as otherwise specifically provided in this Plan, the Company’s obligation to make the payments provided for in this Plan and otherwise to perform its obligations under this Plan will not be affected by any set off, counterclaim, recoupment, defense, or other claim whatsoever that the Company or any Subsidiary or affiliate of the Company may have against the Participant, except that the prohibition on set-off, counterclaim, recoupment, defense, or other claim contained in this sentence will not apply if the Participant’s employment is terminated by the Company for Cause. The Participant will not be required to mitigate damages or the amount of any payment provided for under this Plan by seeking other employment or otherwise. Except as otherwise specifically provided in this Plan, the amount of any payment provided for under this Plan will not be reduced by any compensation or benefits earned by the Participant as the result of employment by another employer or otherwise after the Termination Date. Except as explicitly provided herein, neither the provisions of this Plan nor the making of any payment provided for under this Plan, nor the termination of the Company’s obligations under this Plan, will reduce any amounts otherwise payable, or in any way diminish a Participant’s rights, under any incentive compensation plan, stock option or stock appreciation rights plan, restricted stock plan or agreement, deferred compensation, retirement, or supplemental retirement plan, stock purchase and savings plan, disability or insurance plan, or other similar contract, plan, or arrangement of the Company or any Subsidiary, all of which will be governed by their respective terms.

(b)    Payments Not Compensation. Any participation by a Participant in, and any terminating distributions and vesting rights (other than previously defined) under, the Company-sponsored retirement or savings plans, regardless of whether such plans are qualified or non-qualified for tax purposes, shall be governed by the terms of those respective plans. Any salary continuation or severance benefits shall not be considered compensation for purposes of accruing additional benefits under such plans.

(c)    Legal Fees and Claims. In the event that a Participant or the Company brings any proceeding or any legal action to enforce the terms of this Plan, each of the Company and the Participant shall bear its own attorneys’ fees and costs in connection with such proceeding or legal action. In the event that a Participant brings a legal action against the Company for any other reason, or negotiates with the Company for a severance benefit, any amount paid pursuant to a judgment or settlement shall, to the extent permitted under Section 409A, be offset against the Severance Benefits provided under this Plan.

(d)    Payments Are in Lieu of Severance Payments. If a Participant becomes entitled to receive payments under this Plan as a result of termination of the Participant’s employment, those payments will be in lieu of any and all other claims or rights that the Participant may have against the Company for severance, separation, and/or salary continuation pay upon that termination of the Participant’s employment, including under the UPS Restructuring Separation Allowance Plan, except as otherwise provided herein.

(e)    Assistance. During the three-month period following a Participant’s Termination Date, and from time to time after that as may be necessary, a Participant agrees to cooperate in good faith with the Company regarding reasonable transitional assistance that may be requested by the Company, including but not limited to (i) answering questions about matters relating to the business of the Company or its affiliates as to which the Participant has knowledge, and (ii) forwarding to an appropriate person designated by the Company any email, voicemail message or other communication received by the Participant after the Termination Date that relates to the Company, its affiliates, or their respective businesses. The Company agrees to make reasonable efforts to minimize the burden on a Participant with regard to the foregoing transitional activities, including scheduling telephone calls and meetings at times and locations that are reasonably convenient for the Participant. As further consideration for the covenants set forth herein, each Participant agrees to reasonably cooperate in good faith with any lawyer, law firm, or consultant that the Company designates with respect to any litigation, deposition, hearing, arbitration, inquiry, investigation or other proceeding, in any jurisdiction arising out of or relating to matters of which the Participant was involved prior to the Termination Date with the Company or which the Participant gained knowledge of during the Participant’s employment with the Company (including, but not limited to, support of the Company’s, or that of any of its affiliates’, position in defending any general liability-related lawsuits, employment

related lawsuits or claims concerning which the Participant has knowledge, or audits, investigations, lawsuits, complaints or proceedings by government entities of state or federal law compliance) where the legal or financial interests of the Company or any of its affiliates are at material issue. Each Participant further covenants that, except with respect to an investigation or proceeding conducted by a governmental entity or where prohibited by law, the Participant will (i) contact the Company as soon as reasonably practicable, but in no event longer than seventy-two (72) hours, in the event that the Participant is served with or notified of any subpoena, notice or other instruction directing the Participant to appear, or produce documents or other information, in any legal proceeding involving the Company or any of its affiliates, and (ii) will make no such appearance or disclosure, unless required by law, until the Company has had a reasonable opportunity to contest the right of the requesting person or entity to such appearance or disclosure. The Company shall timely reimburse such Participant for reasonable travel expenses and other reasonable out-of-pocket expenses associated with the Participant’s compliance with the obligations in this Section 15(e). The Company will exercise its rights in good faith under this Section 15(e) so as not to unreasonably interfere with the Participant’s professional activities.

(f)    Termination of Status as Director or Officer. Notwithstanding anything in this Plan to the contrary, unless otherwise agreed to by the Company and a Participant prior to the Termination Date, a Participant shall be deemed to have automatically resigned from all directorships and offices with the Company and its Subsidiaries, and their affiliates (including joint ventures), as of the Termination Date.

(g)    Notices. Notices and all other communications provided for in this Plan must be in writing and will be deemed to have been duly given upon receipt (or rejection) when delivered in person or by overnight delivery (to the chief legal officer of the Company in the case of notices to the Company and to the Participant in the case of notices to a Participant) or mailed by United States registered mail, return receipt requested, postage prepaid, and addressed, if to the Company, to its principal place of business, attention: Chief Legal and Compliance Officer, and, if to the Participant, to the Participant’s home address last shown on the records of the Company, or to such other address or addresses as either party may furnish to the other in accordance with this Section 15(g).

(h)    Interpretation. The language in all parts of this Plan shall in all cases be construed according to its fair meaning, and not strictly for or against the Company or a Participant. In this Plan, unless the context otherwise requires, the masculine, feminine and neuter genders and the singular and the plural include one another. There shall be no entitlement to benefits and payments under any of Section 4 or Section 5 hereof if a Participant otherwise has been, is, or will be entitled to benefits under one or more different sections among Section 4 and Section 5.

(i)    Non-Waiver of Rights and Breaches. No failure or delay of the Company or a Participant in the exercise of any right given to the Company or the Participant under this Plan shall constitute a waiver unless the time specified for the exercise of such right has expired, nor shall any single or partial exercise of any right preclude other or further exercise thereof or of any other right. The waiver by the Company or the Participant of any default of the Company or the Participant, as applicable, shall not be deemed to be a waiver of any subsequent default or other default by the Company or the Participant, as applicable.

(j)    Successors and Assigns. The rights and obligations of the Company under this Plan will inure to the benefit of, and will be binding on, the Company and its successors and assigns, and the rights and obligations (other than obligations to perform services) of the Participant under this Plan will inure to the benefit of, and will be binding upon, the Participant and the Participant’s heirs, personal representatives, and assigns.

(k)    Top Hat Plan. This Plan is intended to be a “top hat” plan maintained primarily for a group of management or highly compensated employees.

(l)    Governing Law. Each Participant agrees that (i) Georgia law shall apply to this Plan, and (ii) the state and federal courts located in Fulton County shall have exclusive jurisdiction over any dispute relating to this Plan, and each Participant specifically and irrevocably consents to jurisdiction and venue in such court, even if the Participant does not reside in Georgia at the time of any dispute arising out of or involving this Plan. Each

Participant hereby waives any objections or defenses to jurisdiction or venue in any such proceeding before such court. If a Participant primarily resided and worked for the Company in California immediately prior to the end of Participant’s Company employment, or following the termination of Participant’s Company employment, Participant resides and works in California, the Participant agrees that (x) California law shall apply to this Plan, and (y) the federal or state courts of California shall have exclusive jurisdiction over any dispute relating to this Plan and the Participant specifically consents to personal jurisdiction in such courts even if the Participant does not reside in California at the time of any dispute arising out of or involving this Plan. If Participant primarily resided and worked for the Company in Minnesota immediately prior to the end of Participant’s employment, Participant agrees and acknowledges that Participant’s consent to jurisdiction and venue in Georgia is voluntary and that Participant is not being required to accept Georgia jurisdiction and venue as a condition of Participant’s employment.

(m)    Severability. If any provision of this Plan is or becomes invalid or unenforceable in any jurisdiction, or would disqualify this Plan or any compensation under this Plan under any law deemed applicable by the Committee, such provision will be construed or deemed amended or limited in scope to conform to applicable laws or, in the discretion of the Committee, it will be stricken and the remainder of this Plan will remain in full force and effect.

(n)    Claims Procedure.

(i)    The Committee or its designee has the exclusive right to determine eligibility for benefits under the Plan and to deny or grant a claim, in whole or in part. All claim determinations shall be made by the Committee (or its delegate) in a uniform and nondiscriminatory manner in accordance with the Plan provisions. The Committee’s decision on a claim for benefits is final and binding on all persons.

(ii)    Any Participant or his or her authorized representative who believes he or she may be eligible for benefits under this Plan may file a claim for benefits to which the claimant believes he or she is entitled. Claims under this Plan must be made in writing and delivered to the Committee, in person or by mail, postage prepaid. When a claim has been properly filed, the Committee shall, within 90 days after receipt of such claim, send to the claimant notice of the grant or denial, in whole or in part, of such claim unless special circumstances require an extension of time for processing the claim. In no event may the extension exceed 90 days from the end of the initial period. If such extension is necessary, the claimant will be given notice to this effect prior to the expiration of the initial 90-day period. Any notice of extension shall set forth the special circumstances requiring the extension of time and the date by which the Committee expects to render its decision on the application for benefits.

(iii)    The Committee will provide the claimant with written notice in which the claimant shall be advised as to whether the claim is granted or denied, in whole or in part. If a claim is denied, in whole or in part, the notice shall contain: (A) the specific reasons for the denial; (B) references to pertinent Plan provisions on which the denial is based; (C) a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and (D) an explanation of the Plan’s claim review procedure, the time limits applicable under the procedures, and a statement regarding the claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (if applicable) following an adverse benefit determination on appeal.

(iv)    If a claim is denied, in whole or in part, the claimant shall have the right to request that the Committee review the denial, provided that the claimant files a written request for review with the Committee no later than 60 days after the date on which the claimant received written notification of the denial. The request for a review shall be in writing and shall be addressed to the Committee at the Company’s principal office. The request for review shall set forth all of the grounds on which it is based, all facts in support of the request and any other matters which the claimant deems pertinent. The Committee may require the claimant to submit such additional facts, documents or other material as it may

deem necessary or appropriate in making its review. The claimant may submit written comments, documents, records and other information related to the benefit claim on appeal. The claimant must be provided, upon request and free of charge, reasonable access to and copies of any and all records, documents or information on which the Committee based its determination (the “Relevant Records”).

(v)    The Committee will provide the claimant with written notification of the benefit determination on review within 60 days after a request for review is received, unless special circumstances require an extension of time for processing the review, in which case the Committee shall give the claimant written notification within the initial 60-day period specifying the reasons for the extension and when such review shall be completed (provided that such review shall be completed within 120 days after the date on which the request for review was filed). If the Committee denies the claim on review, in whole or in part, the notification will set forth, in a manner calculated to be understood by the claimant: (A) the specific reason or reasons for the denial; (B) specific references to the Plan provisions on which the denial is based; (C) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all Relevant Records; and (D) a description of the claimant’s right to obtain information about such procedures and a statement regarding the claimant’s right to bring a civil action under section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (if applicable) following the denial on appeal.

EX-10.2

Exhibit 10.2

UPS MANAGEMENT INCENTIVE PROGRAM

Amended and Restated Terms and Conditions

March 20, 2024

1.    Establishment, Objectives and Duration.

1.1    Establishment of the Program. The Compensation and Human Capital Committee of the Board of Directors of United Parcel Service, Inc. (the “Committee”) hereby amends and restates the UPS Management Incentive Program (“MIP”), to provide for MIP Awards to Eligible Employees beginning with the 2024 Plan Year, pursuant to the United Parcel Service, Inc. 2021 Omnibus Incentive Compensation Plan, as it may be amended or amended and restated from time to time, including any successor plan (the “ICP”). This document sets forth the rules under which such MIP Awards will be made and administered. Unless otherwise defined in this document (in Section 7 or otherwise), capitalized terms shall have the meanings set forth in the ICP.

These terms and conditions shall be effective from the date set forth above and will relate to and govern MIP Awards granted beginning with the 2024 Plan Year.

1.2    Objectives of the MIP. The objectives of the MIP are to align incentive pay with annual performance. The MIP is also intended to further align the interests of Eligible Employees and shareowners by strengthening the link between the achievement of key business objectives and incentive compensation.

2.    Administration.

2.1    Authority of the Committee. The MIP will be administered by the Committee, which shall have the same power and authority to administer the MIP as it does to administer the ICP.

2.2    Delegation. The Committee may (subject to applicable law, regulation and the terms of the ICP), delegated its power, authority and duties as identified herein to administer the MIP, other than the power, authority and duties to grant and approve MIP Awards to Executive Leadership Team Eligible Employees, to (i) any committee comprised of members of management of the Company responsible for determining or overseeing compensation for individuals other than Executive Leadership Team members or (ii) to the Executive Leadership Team or (iii) any members thereof such responsibility (the “Management Compensation Committee”). Except as set forth above, the Management Compensation Committee shall have the powers, authority and duties of the Committee as contained herein, and references to the “Committee” shall be deemed to refer to the Committee or the Management Compensation Committee, as applicable.

2.3    Decisions Binding. All decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, its shareowners, any Eligible Employee, and their estates and beneficiaries.

3.    Eligibility for Awards. Only an Eligible Employee shall be considered for a MIP Award. The Committee shall have broad discretion to determine the eligibility criteria for Eligible Employees.

4.    MIP Awards.

4.1    Performance Objectives.

4.1.1    Eligible Employees (other than Executive Leadership Team Eligible Employees). The MIP Award for each Eligible Employee (other than an Executive Leadership Team Eligible Employee) will be determined by multiplying the Eligible Employee’s

Annualized Salary by the MIP Factor and the Eligible Employee’s MIP Award Target as described on Exhibit A, or as may be revised from time to time. Annualized Salary and the MIP Award Target will be determined as of the MIP Record Date for the applicable Plan Year.

4.1.2    Business Elements. The Committee shall have broad discretion to establish the business elements upon which the MIP Factor for any Plan Year will be based and shall establish and communicate those business elements as soon as reasonably practicable following the beginning of each Plan Year.

4.1.3    MIP Factor, Award Determination. The Committee shall have broad discretion to determine the MIP Factor for each Plan Year. Following the end of each Plan Year, the Committee will review Company performance in respect of each applicable business element, will approve the MIP Factor for such Plan Year and will calculate the MIP Award to be paid to each Eligible Employee (for the avoidance of doubt, the establishment of the MIP Factor and calculation of the MIP Award to be paid to each Executive Leadership Team Eligible Employee shall not be delegated to the Management Compensation Committee) and will approve the MIP Award to each such Eligible Employee. At the Committee’s direction, Eligible Employees will receive written notification of their MIP Awards.

4.1.4    Minimum MIP Factor. Prior to the end of any Plan Year, the Committee may establish a minimum MIP Factor that will result in payment of a minimum MIP Award for each Eligible Employee employed on the MIP Eligibility Date for such Plan Year without regard to the performance in respect of the business elements of such Plan Year.

4.2    Maximum Individual Award. The value of the MIP Award for an Eligible Employee for any calendar year, when added to the value of other cash awards granted to that Eligible Employee under the ICP and earned in the same calendar year, shall not exceed $10,000,000 (measured as of the date on which such MIP Award for such calendar year is granted, as described in Section 4.1.3).

4.3    Pro-rated Awards. The Committee shall have discretion to make pro-rated MIP Awards to Eligible Employees who are actively employed for less than an entire Plan Year. Reasons for proration may include, but are not limited to, approved leaves of absence (including, but not limited to, disability leave, workers’ compensation leave, Family and Medical Leave Act, military leave or personal leave), transfer to or from full-time management to part-time management status, mid-year hires, temporary assignments, Retirement or death.

5.    Payment of Awards.

5.1    Form and Timing. At the election of the Eligible Employee, in accordance with rules established by the Committee, the total value of the MIP Award less applicable taxes will be (i) paid in cash, Shares or any combination thereof, or (ii) contributed to a UPS tax-qualified defined contribution plan (subject to compliance with all laws and regulations and the terms and conditions of the applicable plan), in each case before the end of the second calendar quarter of the Plan Year immediately following the Plan Year for which the award is made. Such election must be made within the period established by the Committee for such elections. Any portion elected to be contributed to a tax-qualified plan that cannot be contributed to that plan because of the limitations on contributions to that plan will be paid to the Eligible Employee in cash.

5.2    Elections With Respect to MIP Award; UPS Deferred Compensation Plan. Prior to the beginning of the Plan Year for which a MIP Award is earned, Eligible Employees who are eligible to make deferral elections under the UPS Deferred Compensation Plan may elect to defer all or any portion of a MIP Award for such Plan Year in accordance with the terms of the UPS Deferred Compensation Plan. If an Eligible Employee dies before the Electable Portion of a MIP Award is

paid, any such deferral election shall be null and void and the MIP Award, if any, payable with respect to such Eligible Employee shall be governed in accordance with Section 5.5.

5.3    Vesting. A MIP Award vests on the MIP Eligibility Date for the Plan Year for which the MIP Award is made, provided the Eligible Employee is employed by the Company or an affiliate on such date. However, the Committee may establish rules that provide for vesting of a MIP Award at other dates or under other circumstances.

5.4    Tax Withholding. MIP Awards will be reduced for applicable taxes or the Eligible Employee shall remit taxes in accordance with Article 16 of the ICP.

5.5    Death. Notwithstanding any contrary provision of the MIP and subject to Section 5.4, the following provisions shall apply if an Eligible Employee dies before the MIP Eligibility Date or before a MIP Award for a Plan Year is paid.

5.5.1    Death Before MIP Eligibility Date. If an Eligible Employee dies during the Plan Year and before the MIP Eligibility Date, a prorated portion of his or her MIP Award for such Plan Year shall be fully vested and payable in cash to his or her estate as soon as practicable and no later than 90 days after the date of death. The MIP Award will be calculated at target for such Eligible Employee’s job classification and salary on his or her date of death, and prorated based on his or her number of calendar months of active employment completed in such Plan Year.

5.5.2    Death after MIP Eligibility Date and Before Payment. If an Eligible Employee dies after the MIP Eligibility Date and before the MIP Award for a Plan Year is paid, his or her actual MIP Award for such Plan Year shall be paid in cash to his or her estate as soon as practicable and no later than before the end of the second calendar quarter of the Plan Year immediately following the Plan Year for which the award is made. March 15 following the Plan Year to which the applicable MIP Award relates.

6.    Miscellaneous.

6.1    Awards Subject to the Terms of the ICP. MIP Awards are subject to the terms of the ICP.

6.2    Section 409A Compliance. Each MIP Award is intended either to be exempt from or to comply with Code § 409A and the 409A Guidance. This document and the ICP shall be administered in a manner consistent with this intent, and any provisions that would cause this document or the ICP to fail to satisfy Code § 409A or the 409A Guidance shall have no further force or effect until amended to comply with or be exempt from Code § 409A and the 409A Guidance (which amendment may be retroactive to the extent permitted by Code § 409A and the 409A Guidance and may be made by the Company without an Eligible Employee’s consent).The MIP Award is intended to be exempt from Code § 409A as a short term deferral. To the extent that benefits provided under the MIP constitute deferred compensation for purposes of Code § 409A and the 409A Guidance and to the extent that deferred compensation is payable upon a “separation from service” as defined in Code § 409A, to the extent necessary to comply with Code § 409A and the 409A Guidance, no amount of deferred compensation shall be paid or transferred to the Eligible Employee as a result of the Eligible Employee’s separation from service until the date which is the earlier of (i) the first day of the seventh month after the Eligible Employee’s separation from service or (ii) the date of the Eligible Employee’s death (the “Delay Period”).

6.3    Severability. The provisions of the MIP are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

6.4    Waiver. Each Eligible Employee acknowledges that a waiver by the Company of breach of any provision of the MIP shall not operate or be construed as a waiver of any other provision of the MIP, or of any subsequent breach by the Eligible Employee or any other participant.

6.5    Imposition of Other Requirements. The Committee reserves the right to impose other requirements on an Eligible Employee’s participation in the MIP, on a MIP Award and on any Shares acquired under the ICP, to the extent the Committee determines it is necessary or advisable for legal or administrative reasons, and to require the Eligible Employee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

6.6    Amendment and Termination. The Committee may amend, alter, suspend or terminate the MIP, any Exhibit and any award granted under the MIP at any time subject to the terms of the ICP. Any amendment shall be in writing and approved by the Committee. Subject to the terms of the IPC, the Management Compensation Committee may make administrative amendments to the MIP and the Exhibits from time to time provided that any such amendment shall be reviewed with the Committee and a copy of such amendment kept with the records of the MIP. An administrative amendment does not include any amendment that would materially change the terms and conditions of the MIP that were previously approved by the Committee.

6.7    Equitable Adjustments. MIP Awards and the number of Shares issuable under each MIP Award (if any) and the other terms and conditions of a MIP Award evidenced by this document are subject to adjustment as provided in Sections 4.5 and 15.2 of the ICP.

6.8    Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to the MIP Awards and an Eligible Employee’s participation in the ICP, or future awards that may be granted under the ICP, by electronic means or request an Eligible Employee’s consent to participate in the ICP by electronic means. An Eligible Employee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the ICP through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

6.9    No Right to Future Awards or Employment. The grant of a MIP Award to an Eligible Employee is a voluntary, discretionary award being made on a one-time basis and it does not constitute a commitment to make any future awards. Nothing contained in this document shall confer upon an Eligible Employee any right to be employed or remain employed by the Company or any of its Subsidiaries, nor limit or affect in any manner the right of the Company or any of its Subsidiaries to terminate an Eligible Employee’s employment or adjust an Eligible Employee’s compensation.

6.10    Acknowledgement. By accepting the grant of an MIP Award, an Eligible Employee accepts and acknowledges the terms and conditions included in this document. Each Eligible Employee acknowledges that the Eligible Employee (i) has received a copy of the ICP, (ii) has had an opportunity to review the terms of this document and the ICP, (iii) understands the terms and conditions of this document and the ICP and (iv) agrees to such terms and conditions.

6.11    Repayment. Notwithstanding anything in this document to the contrary, each Eligible Employee acknowledges and agrees that this document and the awards described herein (and any settlement thereof) are subject to the terms and conditions of the Company’s Incentive-Based Compensation Clawback Policy (or such other policy relating to the recovery of incentive compensation as may be in effect from time to time), and that relevant sections of this document shall be deemed superseded by and subject to the terms and conditions of such policy.

7.    Definitions. Except as set forth below, capitalized terms will have the meanings set forth in the ICP.

7.1    Annualized Salary. For each Plan Year, an Eligible Employee’s monthly rate of Base Salary determined as of the MIP Record Date multiplied by 12.

7.2    Base Salary. The annual or monthly rate, as applicable, of an Eligible Employee’s base salary as determined as of the MIP Record Date of the Plan Year for which a MIP Award is made or, if earlier, the date of death.

7.3    Disability. Disability as defined in the long-term disability plan of the Company or an affiliate under which the Eligible Employee is eligible for coverage or if there is no such plan, disability as determined by the Committee in its discretion.

7.4    Eligible Employee. For each Plan Year, (i) an Employee (other than an Executive Leadership Team Eligible Employee) who (a) is classified at the supervisor level or above on the MIP Record Date, (b) is continuously employed with the Company or an affiliate through the MIP Eligibility Date, (c) satisfies such other eligibility criteria as may be developed from time to time by the Committee, (d) is recommended by his or her managers and (e) approved by the Committee and (ii) an Executive Leadership Team Eligible Employee.

7.5    Executive Leadership Team Eligible Employee. For any Plan Year, an Employee who is a member of the UPS Executive Leadership Team as of the MIP Record Date.

7.6    Management Incentive Award or MIP Award. An award granted under the ICP, with terms and conditions as described in this document.

7.7    MIP. The UPS Management Incentive Program, as amended from time to time.

7.8    MIP Eligibility Date. December 31 of a Plan Year (or such other date as may be selected by the Committee).

7.9    MIP Factor. For each Plan Year, the factor (expressed as a percentage) determined by the Committee pursuant to Section 4.1.3. to reflect performance with respect to the business elements identified for the Plan Year.

7.10    MIP Record Date. For each Plan Year, December 1 (or such other date as may be selected by the Committee).

7.11    MIP Award Target. The applicable MIP Award Target described in Exhibit A.

7.12    Plan Year. Calendar year, January 1 - December 31.

7.13    Retirement. Means (i) attaining or exceeding age 55 with a minimum of 10 years of continuous employment accompanied by the cessation of employment with the Company and all Subsidiaries, (ii) attaining or exceeding age 60 with a minimum of 5 years of continuous employment accompanied by the cessation of employment with the Company and all Subsidiaries, or (iii) “retirement” as determined by the Committee in its sole discretion.

EXHIBIT A

CLASSIFICATION	MIP AWARD TARGETS
CEO	200%
Executive Leadership Team (other than the CEO)	115%

EX-10.3

Exhibit 10.3

UPS LONG-TERM INCENTIVE PERFORMANCE PROGRAM

Amended and Restated Terms and Conditions

March 20, 2024

1.    Establishment, Objectives and Duration.

1.1    Establishment of the Program and Effective Date. The Compensation and Human Capital Committee of the Board of Directors of United Parcel Service, Inc. (“Committee”) hereby amends and restates the terms and conditions of the UPS Long-Term Incentive Performance Program (“LTIP”) which provides for Awards in the form of Restricted Performance Units (“Units”) pursuant to the United Parcel Service, Inc. 2021 Omnibus Incentive Compensation Plan (“ICP”). Unless otherwise defined in this document, capitalized terms shall have the meanings set forth in the ICP. These LTIP Terms and Conditions shall be effective for any LTIP Awards made on or after the date set forth above (“LTIP Effective Date”).

1.2    Objectives of the LTIP. The objectives of the LTIP are to align incentive pay with long-term performance related to key business objectives, enhance retention of key talent, and align the interests of shareowners with the incentive compensation opportunity for executives.

1.3    Duration of the Program. The LTIP shall commence on the LTIP Effective Date and shall remain in effect, subject to the right of the Committee to amend or terminate the LTIP at any time pursuant to Section 14.6 hereof.

2.    Administration.

2.1    Authority of the Committee. The LTIP shall be administered by the Committee, which shall have the same power and authority to administer the LTIP as it does to administer the ICP.

2.2    Decisions Binding. All decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, its shareowners, any employee, and their estates and beneficiaries.

2.3    Delegation. The Committee may (subject to applicable law, regulation and the terms of the ICP), delegated its power, authority and duties as identified herein to administer the LTIP, other than the power, authority and duties to grant and approve LTIP Awards to Executive Leadership Team Eligible Employees, to (i) any committee comprised of members of management of the Company responsible for determining or overseeing compensation for individuals other than Executive Leadership Team members or (ii) to the Executive Leadership Team or (iii) any members thereof such responsibility (the “Management Compensation Committee”). Except as set forth above, the Management Compensation Committee shall have the powers, authority and duties of the Committee as contained herein, and references to the “Committee” shall be deemed to refer to the Committee or the Management Compensation Committee, as applicable.

3.    Units Subject to Award. Your target number of Units subject to an Award is determined by (1) the product of (a) your Target LTIP Award Percentage on Exhibit A multiplied by (b) your annualized monthly salary in effect on the grant date specified in your grant notice (the “Grant Date”), then (2) divided by the Fair Market Value of a Share on the Grant Date, rounded up to the nearest whole number of Units.

4.    Eligibility for Awards.  The Committee shall have broad discretion to determine the eligibility criteria for Awards for members of the Executive Leadership Team, including the Grant Date and any proration

applicable to any Award for any reason, including as a result of an individual becoming an employee or changing job classification in a manner that would result in a different LTIP target payout percentage for that individual, after the Grant Date. 

5.    Award Document. You will receive a grant notice that specifies the Grant Date, the target number of Units subject to an Award, which may be prorated for the number of months remaining in the Performance Period (as defined below), and such other provisions as the Committee shall determine. Such grant notice, together with this document, shall constitute the “Award Document” for the applicable Award for purposes of the ICP.

6.    Acceptance. You must expressly accept the terms and conditions of your Award. To accept, log on to Merrill Lynch Benefits Online at www.benefits.ml.com, select Equity Plan > Grant Information > Pending Acceptance. If you do not accept your Award in the manner instructed by the Company, the Units subject to an Award may be subject to cancellation. If you do not wish to receive your Award, then you understand that you must reject the Award by contacting Shareholder Services (shareholderservices@ups.com) no later than 90 days following the Grant Date specified in the applicable grant notice in which case the Award will be cancelled.

7.    Performance Metrics; Earned Units. The number of Units earned for an Award will be determined based upon the Company’s (a) adjusted earnings per share (growth) and (b) free cash flow performance, each during a three-year performance period identified in the applicable grant notice (the “Performance Period”), subject to modification based on (c) total shareholder return performance during the Performance Period. Performance and payout will be determined independently for each metric. The number of Units earned under an Award will be calculated as follows:

(a) Adjusted Earnings Per Share Payout % x 50% + (b) Free Cash Flow Payout % x 50% +/ - (c) RTSR Payout Modifier (if applicable) = Award Payout %

The Award Payout % is then multiplied by the target number of Units received under the Award, including any dividend equivalent units (described below), to determine the total number of Units earned for the Award.

7.1    Adjusted Earnings Per Share (Growth). Adjusted earnings per share is determined by dividing the Company’s adjusted net income available to common shareowners by the diluted weighted average shares outstanding during applicable year(s) of the Performance Period. The adjusted earnings per share growth target is the projected average annual adjusted earnings per share growth during each of the applicable years within the Performance Period. The actual adjusted earnings per share (growth) for each applicable year of the Performance Period will be compared to the target and assigned a payout percentage; the average of the three payout percentages will be used to calculate the final payout percentage under this metric. Following the completion of the Performance Period, the Committee will certify (i) the actual adjusted earnings per share (growth) for the Performance Period; (ii) the actual adjusted earnings per share (growth) for the Performance Period as compared to the targets; and (iii) the final payout percentage for this metric.

7.2    Free Cash Flow. Free cash flow is determined by reducing the Company’s cash flow from operations by capital expenditures net of proceeds from disposals of fixed assets, and adjusting for net changes in finance receivables and other investing activities. The free cash flow target is the projected aggregate free cash flow generated during the entire three years of the Performance Period. Following the completion of the Performance Period, the Committee will certify (i) the

actual free cash flow for the Performance Period; (ii) the actual free cash flow for the Performance Period as compared to the target; and (iii) the final payout percentage for this metric.

7.3    Total Shareholder Return. Total shareholder return measures the total return on an investment in the Company’s class B common stock (the “Stock”) to an investor (stock price appreciation plus dividends). The total return on the Stock shall be compared with the total return on the stocks of the companies listed on the Standard & Poor’s 500 Composite Index (“Index”) at the beginning of the Performance Period. The Committee shall then assign the Company a percentile rank relative to the companies listed on the Index (the “S&P 500 Companies”) based on total shareholder return performance (“relative total shareholder return” or “RTSR”). Following the completion of the Performance Period, the Committee will certify (i) the Company’s actual total shareholder return for the Performance Period; (ii) the total shareholder return of each of the S&P 500 Companies during the Performance Period; (iii) the percentile ranking for the Company as compared to S&P 500 Companies for the Performance Period; and (iv) the final payout modifier, if any, for the Award as described below.

7.3.1    Payout Modifier: The number of Units earned under an Award may be modified up or down, if applicable, based on RTSR as follows:

Total Shareholder Return  Percentile Rank Relative to S&P 500 Companies	Payout Modifier
Above 75th percentile	+20%
Between 25th and 75th percentile	None
Below 25th percentile	-20%

7.3.2    TSR Calculation: TSR is determined as follows:

TSR =	(Ending Average + Dividends Paid) – Beginning Average
	Beginning Average

Beginning Average: the average closing price of a share of the respective S&P 500 Company’s common stock for the 20 trading days prior to the start of the Performance Period on which shares of such company’s common stock were traded.

Ending Average: the average closing price of a share of the respective S&P 500 Company’s common stock over the last 20 trading days of the Performance Period, accounting for compounding Dividends Paid, on which shares of such company’s common stock were traded.

Dividends Paid: the total of all dividends paid on one share of the respective S&P 500 Company’s common stock during the Performance Period, provided that the record date occurs during the Performance Period, and provided further that dividends shall be treated as though they are reinvested on the day of payment using the closing price of a share of the respective S&P 500 Company’s common stock on that day.

7.4    Adjustments. In determining attainment of performance targets the Committee will have discretion to exclude the effect of unusual or infrequently occurring items, charges for restructurings (including employee severance liabilities, asset impairment costs, and exit costs), discontinued operations, extraordinary items and the cumulative effect of changes in accounting treatment, and may determine to exclude the effect of other items, each determined in accordance with GAAP (to the extent applicable) and as identified in the financial statements, notes to the financial statement or discussion and analysis of management.

8.    Employee Covenants.

8.1    Acknowledgements. You acknowledge and agree that, by reason of your highly specialized skillset and the Company’s investment of time, training, money, trust, and exposure to Confidential Information, you are intimately involved in the planning and direction of the Company’s global business operations. You further acknowledge and agree that your agreement to enter into, and your compliance with, your covenants in this Section 8 are material factors in the Company’s decision to grant you the Units, which constitutes good and valuable consideration for the covenants set forth in this Section 8. You further acknowledge and agree that your breach or threatened breach of any of the covenants in this Section 8 would result in material and irreparable damage and injury to the Company and that it would be difficult or impossible to establish the full monetary value of such damage. You further acknowledge and agree that the covenants in this Section 8 are reasonable, necessary, and essential for the Company to protect its legitimate business interests in: (i) the Company’s trade secrets (as defined under applicable law, including the Georgia Trade Secrets Act of 1990 (the “Act”) and the Defend Trade Secrets Act of 2016 (the “DTSA”)); (ii) the Company’s valuable Confidential Information; (iii) substantial relationships with specific prospective or existing customers of the Company; (iv) customer good will associated with (A) the business of the Company, including, but not limited to, by way of trade name, trademark, service mark, or trade dress, (B) a specific geographic location; or (C) a specific marketing or trade area; and (v) extraordinary or specialized training you have received or will receive. You further acknowledge and agree (i) by reason of the Company’s investment of time, training, money, trust, exposure to the public, or exposure to customers, vendors, or other business relationships during the course of your employment with the Company, you have attained or will attain a high level of influence or credibility with the Company’s Protected Customers, vendors, or other business relationships; and (ii) by reason of working for the Company, you are or will be in possession of selective or specialized skills, learning, or abilities, or customer contacts or customer information, or Confidential Information. Finally, you acknowledge and agree that the scope of responsibilities of your position extends throughout the geographic area where the Company has conducted and will conduct business during your employment, and that your work for the Company has brought and will bring you into close contact with many of the Company’s customers, trade secrets and confidential and proprietary information.

8.2    Unfair Competition. You acknowledge and agree that, as a result of your receipt of Confidential Information, your role at the Company, and your relationships with Company customers and/or employees you would have an unfair competitive advantage if you were to violate this Section 8 and that, in the event that your employment with the Company terminates for any reason, you possess marketable skills and abilities that will enable you to find suitable employment without violating the covenants set forth in this Section 8. You further acknowledge and affirm that you are accepting this Agreement voluntarily, that you have read this Agreement carefully, that you have had a full and reasonable opportunity to consider this Agreement (including actual consultation with legal counsel), and that you have not been pressured or in any way coerced, threatened or intimidated into entering into this Agreement.

8.3    Non-Disclosure and Prohibition Against Use of Confidential Information and Trade Secrets. You agree that you will not, directly or indirectly, reveal, divulge, or disclose any Confidential Information or Trade Secrets to any person not expressly authorized by the Company to receive

such information. You further agree that you will not, directly or indirectly, use or make use of any Confidential Information or Trade Secrets in connection with any business activity other than business activity that you are pursuing on behalf of the Company. You acknowledge and agree that this Section 8 is not intended to, and does not, alter either the Company’s rights or your obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. The act of emailing Confidential Information or Trade Secrets or both to your personal email address is considered to be a breach of this section. You also understand that nothing contained in this Section 8 limits your ability to communicate with any federal, state or local governmental agency or commission (“Government Agencies”) or otherwise participate in any investigation or proceeding that may be conducted by any Government Agencies in connection with any charge or complaint, whether filed by you, on your behalf, or by any other individual. You additionally understand and agree that as required by the Defend Trade Secrets Act of 2016 (“DTSA”), 18 U.S.C. § 1833(b), you have been notified that if you make a confidential disclosure of a Company Trade Secret (as defined in 18 U.S.C. § 1839) to a government official or an attorney for the sole purpose of reporting or investigating a suspected violation of law, or in a complaint or other document filed in a legal proceeding, so long as any document you file containing the trade secret is filed under seal and you do not disclose the trade secret except pursuant to court order, you shall not be held civilly or criminally liable under this Agreement or under any federal or state trade secret law for such a disclosure. The DTSA does not authorize, or limit liability for, an act that is otherwise prohibited by law, such as the unlawful access of material by unauthorized means. You promise that, no later than the end of your Company employment, you will return to the Company all files, memoranda, documents, records, credit cards, keys, computers, printers, telephones, and other property of the Company or its affiliates in your possession, custody, or control, including without limitation all Confidential Information. To the extent that you have, or become aware after your Separation Date that you have, electronic files or information in your personal possession or under your control that belong to the Company or contain Confidential Information (specifically including without limitation electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), you promise that you will notify the Company in writing as to such possession or control prior to your Separation Date or immediately after you become aware of such possession, and, if requested to do so by the Company you will cooperate with the Company, and take direction from the Company, regarding the deletion or return of all such files and information, including all copies and derivatives thereof, from all non-Company-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable. For the avoidance of doubt, you are not permitted to delete any Company files or information from any computers, mobile devices, electronic media, or in cloud storage (including those owned personally by you) unless directed to do so in writing by the Company. To the extent requested by the Company, whether prior to or after the Separation Date, you will voluntarily participate in a process involving a forensic computer specialist chosen by the Company to identify, quarantine, preserve and delete all electronic files or information, including all copies and derivatives thereof, in your possession or under your control that belong to the Company or contain Confidential Information.

8.4    Non-Solicitation of Protected Employees. During the Non-Solicit Restricted Period, you will not, without the prior written consent of the Company, directly or indirectly, solicit or induce or attempt to solicit or induce any Protected Employee to terminate or cease his/her employment relationship with the Company or to enter into employment with you or any other person or entity. This employee non-solicitation provision is limited to the geographic area where the Company did business during your employment.

8.5    Non-Solicitation of Protected Customers. During the Non-Solicit Restricted Period, you will not, without the prior written consent of the Company, directly or indirectly, solicit, divert, take

away or attempt to solicit, divert or take away a Protected Customer for purposes of providing products and services that are competitive with those provided by the Company.

8.6    Covenant Not to Compete. During the Non-Compete Restricted Period, you will not, without the prior written consent of the Company, (a) work for a Restricted Competitor; (b) provide consulting services to a Restricted Competitor; or (c) otherwise provide services to a Restricted Competitor, in each of (a) through (c) that involves the provision of services that are similar to or relate to those services that you provided to the Company at any time during your employment and that relate, in any way, directly or indirectly, to the Restricted Competitor’s competition with the transportation, delivery or logistics services provided by the Company during your employment. This non-compete provision is limited to the geographic area where the Company did business during your employment.

8.7    Enforcement. You acknowledge and agree that the covenants in Sections 8.3 through 8.6 (“Protective Covenants”) are necessary to protect the Company’s legitimate business interests. In the event that you breach, or threaten to breach, the Protective Covenants, you agree that the Company shall have the right and remedy to: (a) enjoin you, preliminarily and permanently (without the necessity of posting bond), from violating or threatening to violate the Protective Covenants because any breach or threatened breach of the Protective Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy; (b) require you to account for and pay over to the Company all compensation, profits, monies, or other benefits derived or received by you as the result of any breach of the Protective Covenants; and (c) require you to pay the reasonable attorneys’ fees and costs incurred by the Company in enforcing the Protective Covenants. In addition, in the event of such a violation, you will automatically forfeit all Units.

8.8    Severability/Reformation. You acknowledge and agree that the Protective Covenants are reasonable in time, scope, geography and all other respects and that they will be considered and construed as separate and independent covenants. Should any part or provision of any of the Protective Covenants be held invalid, void or unenforceable in any court of competent jurisdiction, you understand and agree that such invalidity, voidness or unenforceability does not invalidate, void or otherwise render unenforceable any other part or provision of this Agreement. You further agree that, in the event any court of competent jurisdiction finds any of the Protective Covenants to be invalid or unenforceable (in whole or in part), such court shall modify the invalid or unenforceable term so that the Protective Covenants are enforceable to the fullest extent permitted by law.

8.9    Applicable Law and Exclusive Jurisdiction.

8.9.1    Section 8 of these LTIP terms and conditions are governed by the laws of the State of Georgia. Any and all claims arising out of or relating to this Section 8 will be brought in the state and federal courts located in Fulton County, Georgia, which will be the sole and exclusive jurisdiction and venue for all disputes between the parties under this Section 8. You hereby irrevocably consent to the jurisdiction and venue of the state and federal courts located in Fulton County, Georgia for adjudication of all disputes between the parties with respect to this Section 8. You hereby waive any objections or defenses to jurisdiction or venue in any such proceeding before such court.

8.9.2    Notwithstanding the foregoing, if you primarily resided and worked for the Company in California immediately prior to the end of your employment, or following the termination of your employment, you reside and work in California, you agree that (a) California law shall apply to this Section 8, and (b) the federal or state courts of California will be the sole and exclusive jurisdiction and venue over any dispute relating to this Section 8 and you specifically and irrevocably consent to personal jurisdiction in such courts even if

you do not reside in California at the time of any dispute arising out of or involving this Section 8.

8.9.3    Notwithstanding the foregoing, if you primarily resided and worked for the Company in Minnesota immediately prior to the end of your company employment, you agree and acknowledge that your consent to jurisdiction and venue in Georgia is voluntary and that you are not being required to accept Georgia jurisdiction and venue as a condition of your employment.

8.10    Tolling During Violation. In the event the enforceability of any of the terms of this Section 8 is challenged in a court of competent jurisdiction and you are not enjoined from breaching any of the restrictive covenants, then if a court of competent jurisdiction finds that the challenged restrictive covenant(s) is enforceable, the time periods set forth herein shall be deemed tolled upon the filing of the claim challenging the enforceability of this Section 8 until the dispute is finally resolved and all periods of appeal have expired..

8.11    Disclosure. In the event that you leave the Company for any reason, you agree to disclose the existence and terms of this Section 8 to any prospective employer, partner, co-venturer, investor or lender prior to entering into an employment, partnership or other business relationship with such prospective employer, partner, co-venturer, investor or lender.

8.12    Definitions. For purposes of this Section 8:

8.12.1    “Company” means, for purposes of this Section 8 only, United Parcel Service, Inc., a Delaware Corporation with its principal place of business in Atlanta, Georgia, and all of its Affiliates (as defined in O.C.G.A. § 13-8-51(1)).

8.12.2    “Confidential Information” means all information regarding the Company, its activities, businesses or customers which you learned as a result of your employment, that is valuable to the Company and that is not generally disclosed by practice or authority to persons not employed or otherwise engaged by the Company, whether or not it constitutes a Trade Secret. “Confidential Information” shall include, but is not limited to, financial plans and data; legal affairs; management planning information; business plans; acquisition plans; operational methods and technology; market studies; marketing plans or strategies; product development techniques or plans; customer lists; details of customer contracts; current and anticipated customer requirements and specifications; customer pricing and profitability data; past, current and planned research and development; employee-related information and new personnel acquisition plans. “Confidential Information” shall not include information that is or becomes generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of the Company. However, although certain information may be generally known in the relevant industry, the fact that the Company uses such information may not be so known and in such instance the information would compromise Confidential Information. This definition shall not limit any definition of “confidential information” or any equivalent term under applicable state or federal law.

8.12.3    “Material Contact” means the contact between you and each customer or actively sought potential customer of the Company: (A) with whom or with which you dealt on behalf of the Company in support of the initiation, maintenance or furtherance of a business relationship between Company and each customer or actively sought potential customer; (B) whose dealings with the Company were coordinated or supervised by you; (C) about whom you obtained Confidential Information in the ordinary course of business as a result of your association with the Company; or (D) who receives products or services

authorized by the Company, the sale or provision of which results or resulted in compensation, commissions, or earnings for you in the two (2) years prior to your termination of employment

8.12.4    “Non-Compete Restricted Period” means during your employment with the Company and for a period of one (1) year after your employment ends for any reason.

8.12.5    “Non-Solicit Restricted Period” means during your employment with the Company and for a period of two (2) years after your employment ends for any reason

8.12.6    “Protected Customers” means customers or actively sought potential customers with whom you had Material Contact in the two (2) years prior to your termination of employment.

8.12.7    “Protected Employee” means an employee of the Company who is employed by the Company in a position of Band 20 or higher at the time of any solicitation or attempted solicitation by you and with whom (a) you had contact during the two (2) years prior to your termination of employment, or (b) about whom you learned Confidential Information during the two (2) years prior to your termination of employment.

8.12.8    “Restricted Competitors” means a person engaged in any business competitive with the Company’s and its Subsidiaries’ businesses of package delivery and global supply chain management solutions. Restricted Competitors shall be defined to include any affiliates of such entities that are engaged in delivery, transportation, and/or logistics services and activities.In addition, Restricted Competitors include, without limitation, the entities listed on Exhibit B.

8.12.9    “Trade Secret” means all of the Company’s information that you learned about as a result of your employment, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, distribution lists or a list of actual or potential customers, advertisers or suppliers, that (i) derives economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. This definition shall not limit any definition of “trade secrets” or any equivalent term under applicable law.

8.13    Amendments for Certain Employees.

8.13.1    Amendments for California Employees. Sections 8.4 through 8.6 do not apply to you if you primarily resided or worked for the Company in California immediately prior to the end of your employment, or if following the termination of your employment, you reside and work in California. Notwithstanding the foregoing, you are and shall continue to be prohibited from any unauthorized use, transfer, or disclosure of the Company’s Confidential Information, including trade secrets, pursuant to the California Trade Secrets Act, the U.S. Defend Trade Secrets Act of 2016, any other confidentiality and non-disclosure agreements with the Company, and any other applicable federal, state and common law protections afforded proprietary business and trade secret information. You also agree that you will not, without the prior written consent of the Company, directly or indirectly, interfere with the Company’s business by soliciting or inducing or attempt to solicit or induce any Protected Employee to terminate or cease his/her employment

relationship with the Company for a period of twelve (12) months from and after your employment ends.

8.13.2    Amendments for Hawaii, North Dakota, Minnesota and Oklahoma Employees. Section 8.6 does not apply to you if you primarily resided and worked for the Company in Hawaii, North Dakota, Minnesota or Oklahoma immediately prior to the end of your Company employment, and following the termination of your Company employment, you continue to reside and work in Hawaii, North Dakota, Minnesota or Oklahoma.

8.13.3    Amendment for Massachusetts Employees. Section 8.6 does not apply to you if: (1) you primarily resided and worked for the Company in Massachusetts immediately prior to the end of your Company employment, and following the termination of your Company employment, you continue to reside and work in Massachusetts; and (2) Section 8.6 is unenforceable pursuant to Massachusetts General Laws c. 149 § 24L.

8.14    Other Restrictions. For the avoidance of doubt, if you are based in the U.S. this Section 8 does not supersede any protective covenants applicable to you with respect to the Company, and those covenants shall continue in full force and effect in accordance with their terms. If you are based outside the US any protective covenants set out in your contract of employment, or otherwise applicable to your employment with the Company, whether concluded prior to or after the date of this Agreement, supersede the equivalent provisions set out in this Section 8.

9.     Transferability. You may not sell, gift, or otherwise transfer or dispose of any Units.

10.    Vesting Terms. If you remain an active employee through the last business day of the Performance Period, then the number of Units that vest following the end of the Performance Period, if any, will be based on the achievement of the performance goals related to each of the performance metrics set forth herein. Shares attributable to the number of vested Units and dividend equivalent units (described below), if any, will be transferred to you during the calendar quarter following the end of the Performance Period.Except as set forth below, if employment with the Company is terminated after the Date of Grant but prior to the last business day of the Performance Period, then your unvested Units will be forfeited.

10.1    Death. If you are an active employee for six continuous months from the beginning of the Performance Period and your employment terminates prior to the last business day of the Performance Period as a result of death, then Shares attributable to a prorated number of Units (calculated at target based on the number of months worked during the Performance Period) will be transferred to your estate no later than 90 days after the date of your death.

10.2    Disability or Retirement. If you are an active employee for six continuous months from the beginning of the Performance Period and your employment terminates prior to the last business day of the Performance Period as a result of disability or Retirement (as defined below), then Shares attributable to a prorated number of vested Units (based on actual results for the full Performance Period and the number of months worked during the Performance Period) will be transferred to you during the calendar quarter following the end of the Performance Period. For purposes of the LTIP, Retirement is defined as (a) the attainment of age 55 with a minimum of 10 years of continuous employment accompanied by the cessation of employment with the Company and all Subsidiaries, (b) the attainment of age 60 with a minimum of 5 years of continuous employment accompanied by the cessation of employment with the Company and all Subsidiaries, or (c) “retirement” as determined by the Committee in its sole discretion.

10.3    Demotion. If you are an active employee for six continuous months from the beginning of the Performance Period and, prior to the last business day of the Performance Period, you are demoted to a position that would have been ineligible to receive an LTIP award, then Shares attributable to a prorated number of vested Units (based on actual results for the full Performance Period and the

number of months worked during the Performance Period prior to the demotion) will be transferred to you during the calendar quarter following the end of the Performance Period.

11.    Repayment. Notwithstanding anything in this document to the contrary, you acknowledge and agree that this document and the awards described herein (and any settlement thereof) are subject to the terms and conditions of the Company’s Incentive-Based Compensation Clawback Policy (or such other policy relating to the recovery of incentive compensation as may be in effect from time to time), and that relevant sections of this document shall be deemed superseded by and subject to the terms and conditions of such policy.

12.    Withholding. Awards shall be reduced for applicable taxes or you will be required to remit taxes to the Company in accordance with the terms of the ICP.

13.    Dividend Equivalents. Dividends payable on the number of shares represented by your Units (including whole and fractional Units) will be allocated to your account in the form of dividend equivalent units (“DEUs”) (whole and fractional). DEUs will be allocated to your account each time dividends are paid by (i) multiplying the cash (or stock) dividend paid per share of the Company’s class B common stock by the number of outstanding target number Units (and previously credited DEUs) prior to adjustment for the dividend, and (ii) dividing the product by the Fair Market Value of a Share on the day the dividend is declared, provided that the record date occurs after the Grant Date. DEUs will be subject to the same vesting conditions as the underlying Award.

14.    Miscellaneous.

14.1    Awards Subject to the Terms of the ICP. LTIP Awards are subject to the terms of the ICP.

14.2    Section 409A. Each Award is intended either to be exempt from Code § 409A and the 409A Guidance or to comply with Code § 409A and the 409A Guidance. The Award Document and the ICP shall be administered in a manner consistent with this intent, and any provision that would cause the Award Document or the ICP to fail to satisfy Code § 409A or the 409A Guidance shall have no force or effect until amended to comply with or be exempt from Code § 409A and the 409A Guidance (which amendment may be retroactive to the extent permitted by Code § 409A and the 409A Guidance and may be made by the Company without your consent). To the extent that benefits provided under an Award constitute deferred compensation for purposes of Code § 409A and the 409A Guidance and to the extent that deferred compensation is payable upon a “separation from service” as defined in Code § 409A and the 409A Guidance, no amount of deferred compensation shall be paid or transferred to you as a result of your separation from service until the date which is the earlier of (i) the first day of the seventh month after your separation from service or (ii) the date of your death (the “Delay Period”).

14.3    Severability. The provisions of the LTIP are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

14.4    Waiver. You acknowledge that a waiver by the Company of breach of any provision of the LTIP shall not operate or be construed as a waiver of any other provision of the LTIP, or of any subsequent breach by you or any other participant.

14.5    Imposition of Other Requirements. The Committee reserves the right to impose other requirements on your participation in the LTIP, on the Units and on any shares of Stock acquired under the ICP, to the extent the Committee determines it is necessary or advisable for legal or

administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

14.6    Amendment and Termination. The Committee may amend, alter, suspend or terminate the LTIP and any Award at any time subject to the terms of the ICP. Any such amendment shall be in writing and approved by the Committee. A committee comprised of members of management of the Company for purposes of administering compensation (“Management Compensation Committee”), may make administrative amendments to the LTIP from time to time; provided, however, that any such amendment shall be reviewed with the Committee and kept with the records of the LTIP.

14.7    Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to the Units and your participation in the ICP, or future awards that may be granted under the ICP, by electronic means or request your consent to participate in the ICP by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, agree to participate in the ICP through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

14.8    No Right to Future Awards or Employment. The grant of the Units under an Award to you is a voluntary, discretionary award being made on a one-time basis and it does not constitute a commitment to make any future awards. Nothing contained in the Award Document shall confer upon you any right to be employed or remain employed by the Company or any of its Subsidiaries, nor limit or affect in any manner the right of the Company or any of its Subsidiaries to terminate your employment or adjust your compensation.

14.9    Acknowledgement. You acknowledge that you (a) have received a copy of the ICP, (b) have had an opportunity to review the terms of the Award Document and the ICP, (c) understand the terms and conditions of the Award Document and the ICP and (d) agree to such terms and conditions.

Exhibit A

Long-Term Incentive Performance Program

CLASSIFICATION	TARGET LTIP AWARD PERCENTAGE
Chief Executive Officer	1,185%
Executive Leadership Team Member (other than the CEO)	350% - 550%

EX-10.4

Exhibit 10.4

UPS STOCK OPTION PROGRAM

Amended and Restated Terms and Conditions

March 20, 2024

1.    Establishment, Objectives and Duration.

1.1    Establishment of the Program and Effective Date. The Compensation and Human Capital Committee of the Board of Directors of United Parcel Service, Inc. (“Committee”) hereby amends and restated this Stock Option Program (“Program”) which provides for the grant of Nonqualified Stock Options to selected Eligible Employees pursuant to the United Parcel Service, Inc. 2021 Omnibus Incentive Compensation Plan, as amended from time to time, and any successor plan (“ICP”). This document sets forth the rules under which Options shall be granted and administered. Unless otherwise defined in this document (in Section 6 or otherwise), capitalized terms shall have the meanings set forth in the ICP.

These amended and restated Stock Option Program Terms and Conditions shall be effective for any stock option awards made on or after the date set forth above and shall remain in effect, subject to the right of the Committee to amend or terminate the Program at any time pursuant to Section 5.5 hereof or otherwise.

1.2    Objectives of the Program. The objectives of the Program are to enhance retention of key talent, provide incentives to key senior executives and to further align the interests of the Company’s senior executives and shareholders.

1.3    Duration of the Program. The Program shall commence on the Program Effective Date and shall remain in effect, subject to the right of the Committee to amend or terminate the Program at any time pursuant to Section 5.5 hereof.

2.    Administration.

2.1    Authority of the Committee. The Program will be administered by the Committee, which shall have the same power and authority to administer the Program as it does to administer the ICP.

2.2    Decisions Binding. All decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, its shareowners, any employee, and their estates and beneficiaries.

2.3    Delegation. The Committee may (subject to applicable law, regulation and the terms of the ICP), delegated its power, authority and duties as identified herein to administer the Program, other than the power, authority and duties to grant an Option to Executive Leadership Team Eligible Employees, to (i) any committee comprised of members of management of the Company responsible for determining or overseeing compensation for individuals other than Executive Leadership Team members or (ii) to the Executive Leadership Team or (iii) any members thereof such responsibility (the “Management Compensation Committee”). Except as set forth above, the Management Compensation Committee shall have the powers, authority and duties of the Committee as contained herein, and references to the “Committee” shall be deemed to refer to the Committee or the Management Compensation Committee, as applicable.

3.    Eligibility for Options. Only an Eligible Employee shall be eligible to be considered for a grant of an Option under the Program. The Committeeshall have broad discretion to determine the eligibility criteria for Eligible Employees.

4.    Option Awards.

4.1    General. Eligible Employees will receive an award in the form of Options pursuant to the Program.

4.2    Number of Shares Subject to Option. The number of Shares subject to an Option will be determined by the Committee in a manner designed to provide the Eligible Employee with an Option the value of which (as determined by the Company) is approximately equal to the product of the percentage shown on Exhibit A multiplied by his or her Annualized Base Salary as of the Grant Date.

4.3    Award Document. An Eligible Employee will receive a grant notice that specifies the Option Price, the Grant Date, the number of Shares to which the Option pertains, and such other provisions as the Committee shall determine. Such grant notice, together with this document, shall constitute the “Award Document” for the applicable Option for purposes of the ICP.

4.4    Options Not Transferable. Except as provided in the Award Document, no Option may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Except as provided in the Award Document, an Option shall be exercisable during an Eligible Employee’s lifetime only by such Eligible Employee; provided, however, that in the event he or she is incapacitated and unable to exercise his or her Option, such Option may be exercised by such Eligible Employee's legal guardian, legal representative, or other representative whom the Committee deems appropriate based on applicable facts and circumstances. The determination of incapacity of an Eligible Employee and the determination of the appropriate representative to exercise the Option if the Eligible Employee is incapacitated shall be made by the Committee in its sole and absolute discretion.

4.5    Vesting and Exercise Rules.

4.5.1    General. Except as otherwise provided below or in the Award Document, all Options will become exercisable at the rate of 20% per year on each of the first five anniversaries of the Grant Date and will expire and terminate at 4:00 p.m. Eastern Time on the tenth anniversary of the Grant Date.

4.5.2    Retirement, Death or Disability. Options will immediately vest in full upon an Eligible Employee’s termination of employment because of Retirement, death or Disability, and will remain exercisable until the tenth anniversary of the Grant Date.

4.5.3    Other Terminations of Employment. Termination of an Eligible Employee’s employment for reasons other than Retirement, death or Disability will result in the forfeiture and termination of all of the Eligible Employee’s non-vested Options. Such Eligible Employee’s vested Options (if any) and will expire and terminate at 4:00 p.m. Eastern Time on the 90th calendar day following the date his or her employment terminates.

4.5.4    Other Exercise Rules. An Eligible Employee generally may exercise his or her vested Options at any time (subject to the Company’s insider trading guidelines) provided the number of Shares he or she seeks to purchase as a result of the exercise is at least the lesser of 500 Shares or the number of Shares that remain subject to the vested portion of such Option.

4.5.5    Payment and Tax Withholding. Options shall be exercised in accordance with Sections 6.5 and 6.6 of the ICP. The Company shall arrange for taxes to be withheld or for the Eligible Employee to remit taxes in accordance with Article 16 of the ICP.

5.    Miscellaneous.

5.1    Awards Subject to the Terms of the ICP. Options awarded under the Program are subject to the terms of the ICP.

5.2    Severability. The provisions of the Program are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

5.3    Waiver. An Eligible Employee acknowledges that a waiver by the Company of breach of any provision of the Program shall not operate or be construed as a waiver of any other provision of the Program, or of any subsequent breach by an Eligible Employee or any other participant.

5.4    Imposition of Other Requirements. The Committee reserves the right to impose other requirements on an Eligible Employee’s participation in the Program, on the Options and on any shares of Stock acquired under the ICP, to the extent the Committee determines it is necessary or advisable for legal or administrative reasons, and to require an Eligible Employee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

5.5    Amendment and Termination. The Committee may amend, alter, suspend or terminate the Program at any time subject to the terms of the ICP. Any such amendment shall be in writing and approved by the Committee. Subject to the terms of the ICP, a committee comprised of members of management of the Company responsible for determining or overseeing compensation for individuals other than Executive Leadership Team members (the “Management Compensation Committee”) or the UPS Executive Leadership Team or any members thereof, may make administrative amendments to the Programfrom time to time; provided, however, that a copy of any such amendment shall be reviewed with the Committee and kept with the records of the Program.

5.6     Repayment. Notwithstanding anything in this document to the contrary, each Eligible Employee acknowledges and agrees that this document and the awards described herein (and any settlement thereof) are subject to the terms and conditions of the Company’s Incentive-Based Compensation Clawback Policy (or such other policy relating to the recovery of incentive compensation as may be in effect from time to time), and that relevant sections of this document shall be deemed superseded by and subject to the terms and conditions of such policy.

5.7     Equitable Adjustments. Options and the number of Shares issuable for each Option, and

the other terms and conditions of an Option evidenced by the Award Document, are subject to adjustment as provided in Sections 4.5 and 15.2 of the ICP.

5.8     Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to Options and an Eligible Employee’s participation in the ICP, or future awards that may be granted under the ICP, by electronic means or request an Eligible Employee’s consent to participate in the ICP by electronic means. An Eligible Employee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the ICP through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

5.9     No Right to Future Awards or Employment. The grant of Options to an Eligible

Employee is a voluntary, discretionary award being made on a one-time basis and it does not constitute a commitment to make any future awards. Nothing contained in the Award Document shall confer upon an Eligible Employee any right to be employed or remain employed by the Company or any of its Subsidiaries, nor limit or affect in any manner the right of the Company or any of its Subsidiaries to terminate an Eligible Employee’s employment or adjust an Eligible Employee’s compensation.

5.10     Acknowledgement. By accepting the grant of an Option under this Program, an Eligible Employee accepts and acknowledges the terms and conditions included in this document. An Eligible Employee acknowledges that the Eligible Employee (i) has received a copy of the ICP, (ii) has had an opportunity to review the terms of the Award Document and the ICP, (iii) understands the terms and conditions of the Award Document and the ICP and (iv) agrees to such terms and conditions.

6.    Definitions. Except as set forth below or as otherwise set forth herein, capitalized terms shall have the meanings set forth in the ICP.

6.1    Annualized Base Salary. An Eligible Employee’s rate of pay for a single fixed pay installment determined as of the Grant Date multiplied by the number of mandatory fixed pay installments for a Plan Year.

6.2    Disability. “Disability” as defined in the Company’s long-term disability plan, or if no such plan exists, as determined by the Committeein its discretion.

6.3    Eligible Employee. For each Plan Year, an Employee who is classified as an active employee at the region manager level or above and satisfies such other eligibility criteria as may be developed from time to time by the Committee.

6.4    Grant Date. The date as of which an Option is granted, as shown on the Award Document for such Option.

6.5    Plan Year. The calendar year, January 1- December 31.

6.6    Retirement. Means (a) the attainment of age 55 with a minimum of 10 years of continuous employment accompanied by the cessation of employment with the Company and all Subsidiaries, (b) the attainment of age 60 with a minimum of 5 years of continuous employment accompanied by the cessation of employment with the Company and all Subsidiaries, or (c) “retirement” as determined by the Committee in its sole discretion.

Exhibit A

Eligible Employee	Option Award
Chief Executive Officer	90% of Annualized Base Salary
Executive Leadership Team Member (other than the CEO)	30% - 50% of Annualized Base Salary

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Carol B. Tomé, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of United Parcel Service, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/   CAROL B. TOMÉ

Carol B. Tomé

Chief Executive Officer

(Principal Executive Officer)

May 3, 2024

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

I, Brian O. Newman, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of United Parcel Service, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ BRIAN O. NEWMAN

Brian O. Newman

Executive Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

May 3, 2024

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of United Parcel Service, Inc. (the “Corporation”) for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chief Executive Officer of the Corporation, certifies that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/   CAROL B. TOMÉ

Carol B. Tomé

Chief Executive Officer

(Principal Executive Officer)

May 3, 2024

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of United Parcel Service, Inc. (the “Corporation”) for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Executive Vice President and Chief Financial Officer of the Corporation, certifies that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ BRIAN O. NEWMAN

Brian O. Newman

Executive Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

May 3, 2024

XML

Cover - shares	3 Months Ended
	Mar. 31, 2024	Apr. 17, 2024
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-15451
Entity Registrant Name	United Parcel Service, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	58-2480149
Entity Address, Street Address	55 Glenlake Parkway N.E. ,
Entity Address, City	Atlanta,
Entity Address, State	GA
Entity Address, Postal Zip Code	30328
City Area Code	404
Local Phone Number	828-6000
Title of 12(b) Security	Class B common stock, par value $0.01 per share
Trading Symbol	UPS
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001090727
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false
1.625% Senior Notes due 2025
Document Information [Line Items]
Title of 12(b) Security	1.625% Senior Notes due 2025
Trading Symbol	UPS25
Security Exchange Name	NYSE
1% Senior Notes due 2028
Document Information [Line Items]
Title of 12(b) Security	1% Senior Notes due 2028
Trading Symbol	UPS28
Security Exchange Name	NYSE
1.500% Senior Notes due 2032
Document Information [Line Items]
Title of 12(b) Security	1.500% Senior Notes due 2032
Trading Symbol	UPS32
Security Exchange Name	NYSE
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		126,159,503
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		729,399,444

XML

CONSOLIDATED BALANCE SHEETS - USD ($) shares in Millions, $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 4,281	$ 3,206
Marketable securities	232	2,866
Accounts receivable	9,698	11,342
Less: Allowance for credit losses	(144)	(126)
Accounts receivable, net	9,554	11,216
Materials and supplies	898	935
Other current assets	1,212	1,190
Total Current Assets	16,177	19,413
Property, Plant and Equipment, Net	37,168	36,945
Operating Lease Right-Of-Use Assets	4,223	4,308
Goodwill	4,846	4,872
Intangible Assets, Net	3,308	3,305
Deferred Income Tax Assets	126	126
Other Non-Current Assets	1,780	1,888
Total Assets	67,628	70,857
Current Liabilities:
Current maturities of long-term debt, commercial paper and finance leases	1,164	3,348
Current maturities of operating leases	694	709
Accounts payable	5,397	6,340
Accrued wages and withholdings	3,217	3,224
Self-insurance reserves	1,325	1,320
Accrued group welfare and retirement plan contributions	1,573	1,479
Other current liabilities	1,326	1,256
Total Current Liabilities	14,696	17,676
Long-Term Debt and Finance Leases	18,849	18,916
Non-Current Operating Leases	3,690	3,756
Pension and Postretirement Benefit Obligations	6,323	6,159
Deferred Income Tax Liabilities	3,825	3,772
Other Non-Current Liabilities	3,312	3,264
Shareowners’ Equity:
Additional paid-in capital	0	0
Retained earnings	20,681	21,055
Accumulated other comprehensive loss	(3,781)	(3,758)
Deferred compensation obligations	6	9
Less: Treasury stock (0.1 and $0.2 shares in 2024 and 2023, respectively)	(6)	(9)
Total Equity for Controlling Interests	16,909	17,306
Noncontrolling interests	24	8
Total Shareowners’ Equity	16,933	17,314
Total Liabilities and Shareowners’ Equity	$ 67,628	$ 70,857
Treasury stock (in shares)	0.1	0.2
Class A common stock
Shareowners’ Equity:
Common stock	$ 2	$ 2
Class B common stock
Shareowners’ Equity:
Common stock	$ 7	$ 7

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Millions	Mar. 31, 2024	Dec. 31, 2023
Treasury stock (in shares)	0.1	0.2
Class A common stock
Common stock, issued (in shares)	126.0	127.0
Class B common stock
Common stock, issued (in shares)	729.0	726.0

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STATEMENTS OF CONSOLIDATED INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement [Abstract]
Revenue	$ 21,706	$ 22,925
Operating Expenses:
Compensation and benefits	11,639	11,464
Repairs and maintenance	718	725
Depreciation and amortization	898	834
Purchased transportation	3,246	3,541
Fuel	1,060	1,271
Other occupancy	564	551
Other expenses	1,968	1,998
Total Operating Expenses	20,093	20,384
Operating Profit	1,613	2,541
Other Income (Expense):
Investment income and other	118	169
Interest expense	(195)	(188)
Total Other Income (Expense)	(77)	(19)
Income Before Income Taxes	1,536	2,522
Income Tax Expense	423	627
Net Income	$ 1,113	$ 1,895
Basic Earnings Per Share (in dollars per share)	$ 1.30	$ 2.20
Diluted Earnings Per Share (in dollars per share)	$ 1.30	$ 2.19

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STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 1,113	$ 1,895
Change in foreign currency translation adjustment, net of tax	(125)	118
Change in unrealized gain (loss) on marketable securities, net of tax	(1)	7
Change in unrealized gain (loss) on cash flow hedges, net of tax	73	(77)
Change in unrecognized pension and postretirement benefit costs, net of tax	30	20
Comprehensive Income	$ 1,090	$ 1,963

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STATEMENTS OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash Flows From Operating Activities:
Net income	$ 1,113	$ 1,895
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	898	834
Pension and postretirement benefit expense	259	243
Pension and postretirement benefit contributions	(50)	(1,277)
Self-insurance reserves	27	(20)
Deferred tax (benefit) expense	22	56
Stock compensation expense	(27)	126
Other (gains) losses	129	(13)
Changes in assets and liabilities, net of effects of business acquisitions:
Accounts receivable	1,492	2,254
Other assets	55	62
Accounts payable	(799)	(1,668)
Accrued wages and withholdings	12	(508)
Other liabilities	185	405
Other operating activities	0	(32)
Net cash from operating activities	3,316	2,357
Cash Flows From Investing Activities:
Capital expenditures	(1,035)	(609)
Proceeds from disposal of businesses, property, plant and equipment	13	5
Purchases of marketable securities	(50)	(2,371)
Sales and maturities of marketable securities	2,696	1,179
Acquisitions, net of cash acquired	(44)	(34)
Other investing activities	(14)	17
Net cash (used in) from investing activities	1,566	(1,813)
Cash Flows From Financing Activities:
Net change in short-term debt	(1,272)	0
Proceeds from long-term borrowings	0	2,503
Repayments of long-term borrowings	(926)	(65)
Purchases of common stock	0	(751)
Issuances of common stock	54	49
Dividends	(1,348)	(1,348)
Other financing activities	(174)	(384)
Net cash (used in) from financing activities	(3,666)	4
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	(48)	40
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	1,168	588
Cash, Cash Equivalents and Restricted Cash:
Beginning of period	3,206	5,602
End of period	$ 4,374	$ 6,190

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BASIS OF PRESENTATION AND ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION AND ACCOUNTING POLICIES

BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Principles of Consolidation

The accompanying unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited, consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of March 31, 2024 and our results of operations and cash flows for the three months ended March 31, 2024 and 2023. The results reported in these unaudited, consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. The unaudited, consolidated financial statements should be read in conjunction with the audited, consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Fair Value of Financial Instruments

The carrying amounts of our cash and cash equivalents, accounts receivable, finance receivables and accounts payable approximated fair value as of March 31, 2024 and December 31, 2023. The fair values of our marketable securities are disclosed in note 5, our recognized multiemployer pension withdrawal liabilities in note 7, our short- and long-term debt in note 9 and our derivative instruments in note 15. We apply a fair value hierarchy (Levels 1, 2 and 3) when measuring and reporting items at fair value. Fair values are based on listed market prices (Level 1), when such prices are available. To the extent that listed market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations (Level 2). If listed market prices or other relevant factors are not available, inputs are developed from unobservable data reflecting our own assumptions and include situations where there is little or no market activity for the asset or liability (Level 3).

Use of Estimates

The preparation of the accompanying unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of these financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. As a result, our accounting estimates and assumptions may change significantly over time.

Supplier Finance Programs

As part of our working capital management, certain financial institutions offer a Supply Chain Finance ("SCF") program to certain of our suppliers. We agree to commercial terms with our suppliers, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program. Suppliers issue invoices to us based on the agreed-upon contractual terms. If they participate in the SCF program, our suppliers, at their sole discretion, determine which invoices, if any, to sell to the financial institutions. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms. No guarantees are provided by us under the SCF program. We have no economic interest in a supplier’s decision to participate, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program.

Amounts due to our suppliers that participate in the SCF program are included in Accounts payable in our consolidated balance sheets. We have been informed by the participating financial institutions that as of March 31, 2024 and December 31, 2023, suppliers sold them $406 and $504 million, respectively, of our outstanding payment obligations.

Restricted cash

As of March 31, 2024 and December 31, 2023, we had $93 and $37 million, respectively of restricted cash. As of March 31, 2024, this restricted cash is included in Other Non-Current Assets in our consolidated balance sheet and is included in Total cash, cash equivalents and restricted cash in our statement of consolidated cash flows. The restricted cash primarily relates to cash we have agreed to deposit in connection with a challenge by Italian tax authorities to the deductibility of Value Added Tax payments by UPS to certain third-party service providers, a review of which was launched in the fourth quarter of 2023. We are cooperating in this matter and believe that we have a number of meritorious defenses.

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RECENT ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Mar. 31, 2024

Accounting Changes and Error Corrections [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

Adoption of New Accounting Standards

Accounting pronouncements adopted during the periods covered by the unaudited, consolidated financial statements did not have a material impact on our consolidated financial position, results of operations, cash flows or internal controls.

Accounting Standards Issued But Not Yet Effective

In November 2023, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") on segment reporting, which will require new disclosures, including significant segment expenses and additional qualitative information about how segment measures are used by management. The standard becomes effective for us beginning with our 2024 annual reporting and for both annual and interim periods thereafter. We are evaluating the impact of this ASU on our disclosures. We will be required to define significant segment expense categories and we anticipate providing additional qualitative information in accordance with this ASU. We do not expect this ASU will have a significant impact on our consolidated financial position, results of operations or cash flows.

In December 2023, the FASB issued an ASU to enhance tax-related disclosures. This update will require more standardized categories for tax rate reconciliation and additional detail for significant tax items. It will also require a breakdown of income taxes paid by jurisdiction exceeding 5% of total taxes and remove certain disclosure requirements for unremitted foreign earnings and uncertain tax positions. The standard becomes effective for us in the first quarter of 2025. We are evaluating its impact on our financial statements, disclosures and internal controls but do not expect this ASU will have a significant impact on our consolidated financial position, results of operations, cash flows or internal controls.

Other accounting pronouncements issued before, but not effective until after, March 31, 2024, are not expected to have a material impact on our consolidated financial position, results of operations, cash flows or internal controls.

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REVENUE RECOGNITION

3 Months Ended

Mar. 31, 2024

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  March 31,
	2024		2023
Revenue:
Next Day Air	$	2,316	$	2,461
Deferred	1,156		1,194
Ground	10,762		11,332
U.S. Domestic Package	14,234		14,987
Domestic	758		794
Export	3,350		3,552
Cargo & Other	148		197
International Package	4,256		4,543
Forwarding	1,280		1,514
Logistics	1,542		1,410
Other	394		471
Supply Chain Solutions	3,216		3,395
Consolidated revenue	$	21,706	$	22,925

Contract Assets and Liabilities

Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment only when services have been completed (i.e. shipments have been delivered). Amounts do not exceed their net realizable value. Contract assets are generally classified as current and the full balance is converted each quarter based on the short-term nature of the transactions.

Contract liabilities consist of advance payments and billings in excess of revenue as well as deferred revenue. Advance payments and billings in excess of revenue represent payments received from our customers that will be earned over the contract term. Deferred revenue represents the amount due from customers related to in-transit shipments that has not yet been recognized as revenue based on our selected measure of progress. We classify advance payments and billings in excess of revenue as either current or long-term, depending on the period over which the amount will be earned. We classify deferred revenue as current based on the short-term nature of the transactions. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. In order to determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that deferred revenue balance.

Contract assets and liabilities as of March 31, 2024 and December 31, 2023 were as follows (in millions):

	Balance Sheet Location	March 31, 2024		December 31, 2023
Contract Assets:
Revenue related to in-transit packages	Other current assets	$	269	$	237
Contract Liabilities:
Short-term advance payments from customers	Other current liabilities	$	13	$	20
Long-term advance payments from customers	Other non-current liabilities	$	26	$	25

Accounts Receivable, Net

Accounts receivable, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. Losses on accounts receivable are recognized when reasonable and supportable forecasts affect the expected collectability. This requires us to make our best estimate of the current expected losses inherent in our accounts receivable at each balance sheet date. This estimate requires consideration of historical loss experience, adjusted for current conditions, forward looking indicators, trends in customer payment frequency and judgments about the probable effects of relevant observable data, including present and future economic conditions and the financial health of specific customers and market sectors. Our risk management process includes standards and policies for reviewing major account exposures and concentrations of risk.

Our allowance for credit losses as of March 31, 2024 and December 31, 2023 was $144 and $126 million, respectively. Amounts for credit losses charged to expense, before recoveries, during each of the three months ended March 31, 2024 and 2023 were $73 and $43 million, respectively.

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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

We issue share-based awards under various incentive compensation plans, including non-qualified and incentive stock options, stock appreciation rights, restricted stock and stock units ("RSUs") and restricted performance shares and performance units ("RPUs", collectively with RSUs, "Restricted Units"). Upon vesting, Restricted Units result in the issuance of the equivalent number of UPS class A common shares after required tax withholdings. Dividends earned on Restricted Units are reinvested in additional Restricted Units at each dividend payable date until conversion to class A shares occurs.

Our primary equity compensation programs are the UPS Long-Term Incentive Performance Award program (the "LTIP") and the UPS Stock Option program. We also grant Restricted Units to our Board of Directors (the "Board") as a component of their annual compensation and, from time to time, to individual employees as a retention mechanism. We also maintain an employee stock purchase plan which allows eligible employees to purchase shares of UPS class A common stock at a discount.

Pre-tax compensation expense for stock compensation awards recognized in Compensation and benefits in the statements of consolidated income for the three months ended March 31, 2024 and 2023 was $(27) and $126 million, respectively.

Management Incentive Award Program

The UPS Management Incentive Program (the "MIP") is an incentive-based compensation program, with awards based on annual Company performance. MIP awards are paid in cash, unless a participant elects to receive all or a portion of the award in unrestricted shares of class A common stock. As of March 31, 2024, the MIP was classified as a compensation obligation within Accrued wages and withholdings in our consolidated balance sheet.

Long-Term Incentive Performance Program

RPUs issued under the LTIP vest at the end of a three-year performance period, subject to continued employment with the Company (except in the case of death, disability or retirement, in which case immediate vesting occurs on a prorated basis). The actual number of RPUs earned is based on achievement of the performance targets established on the grant date.

The performance targets are equally weighted between adjusted earnings per share and cumulative free cash flow. The final number of RPUs earned will then be subject to adjustment based on total shareholder return relative to the Standard & Poor's 500 Index. We determine the grant date fair value of the RPUs using a Monte Carlo model and recognize compensation expense (less estimated forfeitures) ratably over the vesting period, based on the number of awards expected to be earned.

Based on the date of the Compensation and Human Capital Committee of the Board's approval of the 2024 LTIP award performance targets, we determined March 20, 2024 to be the award measurement date and each target RPU awarded was valued at $158.16.

The weighted-average assumptions used and the weighted-average fair values of the LTIP awards granted in 2024 and 2023 are as follows:

	2024			2023
Risk-free interest rate	4.45		%	3.81		%
Expected volatility	27.00		%	30.30		%
Weighted-average fair value of units granted	$	158.16		$	200.01
Share payout	102.20		%	107.80		%

There is no expected dividend yield as units earn dividend equivalents.

Non-Qualified Stock Options

We grant non-qualified stock options to a limited group of eligible senior management employees under the UPS Stock Option program. Stock option awards vest over a five-year period with approximately 20% of the award vesting at each anniversary of the grant date (except in the case of death, disability or retirement, in which case immediate vesting occurs). The option grants expire 10 years after the date of the grant. On March 20, 2024, we granted 0.2 million stock options at an exercise price of $154.76, the New York Stock Exchange closing price on that date.

The fair value of each option granted is estimated using a Black-Scholes option pricing model. The weighted-average assumptions used and the weighted-average fair values of options granted in 2024 and 2023 are as follows:

	2024			2023
Expected dividend yield	3.96		%	3.54		%
Risk-free interest rate	4.25		%	3.70		%
Expected life (in years)	6.13			5.93
Expected volatility	28.94		%	28.31		%
Weighted-average fair value of options granted	$	34.76		$	41.08

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MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS

MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS

The following is a summary of marketable securities classified as trading and available for sale as of March 31, 2024 and December 31, 2023 (in millions):

	Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
March 31, 2024:
Current trading marketable securities:
Equity securities	$	3	$	—	$	—	$	3
Total trading marketable securities	3		—		—		3
Current available-for-sale securities:
U.S. government and agency debt securities	200		—		(2)		198
Mortgage and asset-backed debt securities	—		—		—		—
Corporate debt securities	32		—		(1)		31
Non-U.S. government debt securities	—		—		—		—
Total available-for-sale marketable securities	232		—		(3)		229
Total current marketable securities	$	235	$	—	$	(3)	$	232
	Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
December 31, 2023:
Current trading marketable securities:
Equity securities	$	4	$	—	$	—	$	4
Total trading marketable securities	4		—		—		4
Current available-for-sale securities:
U.S. government and agency debt securities	963		2		(4)		961
Mortgage and asset-backed debt securities	3		—		—		3
Corporate debt securities	1,891		4		(4)		1,891
Non-U.S. government debt securities	7		—		—		7
Total available-for-sale marketable securities	2,864		6		(8)		2,862
Total current marketable securities	$	2,868	$	6	$	(8)	$	2,866

Investment Impairments

We have concluded that no material impairment losses existed within marketable securities as of March 31, 2024. In making this determination, we considered the financial condition and prospects of each issuer, the magnitude of the losses compared with the cost, the probability that we will be unable to collect all amounts due according to the contractual terms of the security, the credit rating of the security and our ability and intent to hold these investments until the anticipated recovery in market value occurs.

Maturity Information

The amortized cost and estimated fair value of marketable securities as of March 31, 2024 by contractual maturity are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations with or without prepayment penalties.

	Cost		Estimated Fair Value
Due in one year or less	$	70	$	69
Due after one year through three years	162		160
Due after three years through five years	—		—
Due after five years	—		—
	232		229
Equity securities	3		3
	$	235	$	232

Non-Current Investments

We hold non-current investments that are reported within Other Non-Current Assets in our consolidated balance sheets. Cash paid for these investments is included in Other investing activities in our statements of consolidated cash flows.

•Equity method investments: As of March 31, 2024 and December 31, 2023, equity securities accounted for under the equity method had a carrying value of $293 and $295 million, respectively.

•Other equity securities: Certain equity securities that do not have readily determinable fair values are reported in accordance with the measurement alternative in ASC Topic 321 Investments - Equity Securities. Equity securities accounted for under the measurement alternative had a carrying value of $47 million as of both March 31, 2024 and December 31, 2023.

•Other investments: We hold an investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan. The investment had a fair market value of $19 million as of both March 31, 2024 and December 31, 2023.

Fair Value Measurements

Marketable securities valued utilizing Level 1 inputs include active exchange-traded equity securities and equity index funds, and most U.S. government debt securities, as these securities all have quoted prices in active markets. Marketable securities valued utilizing Level 2 inputs include asset-backed securities, corporate bonds and municipal bonds. These securities are valued using market corroborated pricing, matrix pricing or other models that utilize observable inputs such as yield curves.

The following table presents information about our investments measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
March 31, 2024:
Marketable Securities:
U.S. government and agency debt securities	$	198	$	—	$	—	$	198
Mortgage and asset-backed debt securities	—		—		—		—
Corporate debt securities	—		31		—		31
Equity securities	—		3		—		3
Non-U.S. government debt securities	—		—		—		—
Total marketable securities	198		34		—		232
Other non-current investments(1)	—		19		—		19
Total	$	198	$	53	$	—	$	251

(1)    Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2023:
Marketable Securities:
U.S. government and agency debt securities	$	961	$	—	$	—	$	961
Mortgage and asset-backed debt securities	—		3		—		3
Corporate debt securities	—		1,891		—		1,891
Equity securities	—		4		—		4
Non-U.S. government debt securities	—		7		—		7
Total marketable securities	961		1,905		—		2,866
Other non-current investments(1)	—		19		—		19
Total	$	961	$	1,924	$	—	$	2,885

(1)    Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.

There were no transfers of investments into or out of Level 3 during the three months ended March 31, 2024 or 2023.

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PROPERTY, PLANT AND EQUIPMENT

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment as of March 31, 2024 and December 31, 2023 consisted of the following (in millions):

	2024		2023
Vehicles	$	11,970	$	11,768
Aircraft	23,117		22,888
Land	2,129		2,138
Buildings	6,282		6,255
Building and leasehold improvements	5,295		5,241
Plant equipment	18,109		17,322
Technology equipment	2,677		2,656
Construction-in-progress	2,634		3,247
	72,213		71,515
Less: Accumulated depreciation and amortization	(35,045)		(34,570)
Property, Plant and Equipment, Net	$	37,168	$	36,945

Property, plant and equipment purchased on account was $204 and $309 million as of March 31, 2024 and December 31, 2023, respectively. 

There were no material impairment charges for the three months ended March 31, 2024 or 2023.

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EMPLOYEE BENEFIT PLANS

3 Months Ended

Mar. 31, 2024

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 months ended March 31, 2024 and 2023 is as follows (in millions):

	U.S. Pension Benefits				U.S. Postretirement Medical Benefits				International Pension Benefits
	2024		2023		2024		2023		2024		2023
Three Months Ended March 31:
Service cost	$	310	$	293	$	5	$	5	$	11	$	11
Interest cost	644		627		27		29		17		17
Expected return on assets	(771)		(742)		(1)		(3)		(21)		(21)
Amortization of prior service cost	38		27		—		—		—		—
Net periodic benefit cost	$	221	$	205	$	31	$	31	$	7	$	7

The components of net periodic benefit cost other than current service cost are presented within Investment income and other in the statements of consolidated income.

During the three months ended March 31, 2024, we contributed $19 million and $31 million to our company-sponsored pension and U.S. postretirement medical benefit plans, respectively. We expect to contribute approximately $87 million over the remainder of the year to our 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. Our current collective bargaining agreements set forth the annual contribution increases allotted to the plans that we participate in, and we are in compliance with these contribution rates. These limitations on annual contribution rates will remain in effect throughout the terms of the existing collective bargaining agreements.

As of March 31, 2024 and December 31, 2023, we had $811 and $813 million, respectively, recorded in Other Non-Current Liabilities in our consolidated balance sheets and $9 million as of both March 31, 2024 and December 31, 2023 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 39 years. Based on the borrowing rates currently available to us for long-term financing of a similar maturity, the fair value of this withdrawal liability as of March 31, 2024 and December 31, 2023 was $685 and $710 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 (“IBT”), 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.

Subsequent to our withdrawal, the CSPF incurred extensive asset losses and indicated that it was projected to become insolvent. In such event, the CSPF benefits would be reduced to the legally permitted Pension Benefit Guaranty Corporation ("PBGC") limits, triggering the coordinating benefits provision in the collective bargaining agreement.

In 2021, the American Rescue Plan Act ("ARPA") was enacted into law. The ARPA contains provisions that allow for qualifying multiemployer pension plans to apply for special financial assistance ("SFA") from the PBGC, which will be funded by the U.S. government. Following SFA approval, a qualifying multiemployer pension plan will receive a lump sum payment to enable it to continue paying unreduced pension benefits through 2051. The multiemployer plan is not obligated to repay the SFA. The ARPA is intended to prevent both the PBGC and certain financially distressed multiemployer pension plans, including the CSPF, from becoming insolvent through 2051. The CSPF submitted an application for SFA that was approved in December 2022. In January 2023, $35.8 billion was paid to the CSPF by the PBGC.

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, 2023, our best estimate of coordinating benefits that may be required to be paid by the UPS/IBT Plan after SFA funds have been exhausted was immaterial.

The value of our estimate for future coordinating benefits will continue to be influenced by a number of factors, including interpretations of the ARPA, 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

We have approximately 310,000 employees in the U.S. employed under a national master agreement and various supplemental agreements with local unions affiliated with the Teamsters. These agreements are scheduled to expire on July 31, 2028.

We have approximately 10,000 employees in Canada employed under a collective bargaining agreement with the Teamsters which runs through July 31, 2025.

We have approximately 3,300 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association. This collective bargaining agreement becomes amendable September 1, 2025.

We have approximately 1,900 airline mechanics who are covered by a collective bargaining agreement with Teamsters Local 2727 which becomes amendable November 1, 2026. In addition, approximately 3,000 of our auto and maintenance mechanics who are not employed under agreements with the Teamsters are employed under collective bargaining agreements with the International Association of Machinists and Aerospace Workers. These collective bargaining agreements run through July 31, 2024.

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GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

The following table indicates the allocation of goodwill as of March 31, 2024 and December 31, 2023 (in millions):

	U.S. Domestic Package		International Package		Supply Chain Solutions		Consolidated
December 31, 2023:	$	847	$	503	$	3,522	$	4,872
Acquired	—		—		8		8
Currency / Other	—		(7)		(27)		(34)
March 31, 2024:	$	847	$	496	$	3,503	$	4,846

Changes in goodwill during the three months ended March 31, 2024 resulted from:

•An increase in goodwill of $8 million, as part of purchase accounting allocations relating to our acquisitions of MNX Global Logistics and Happy Returns in the fourth quarter of 2023. Certain areas of purchase accounting, including our estimates of tax positions, remain preliminary as of March 31, 2024.

•The remaining movements are due to the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. Dollar goodwill balances.

As of March 31, 2024, none of our reporting units had indications that an impairment was more likely than not. Approximately $1.5 billion of our consolidated goodwill balance of $4.8 billion is represented by our Global Freight Forwarding, our truckload brokerage ("Coyote") and Roadie reporting units which, based on our quarterly monitoring, are exhibiting a limited excess of fair value above carrying value and reflect a greater risk of an impairment occurring in future periods. We do not expect any impairment would have a significant impact on our consolidated financial position, results of operations or cash flows.

Actual reporting unit performance, revisions to our forecasts of future performance, market factors, changes in estimates or assumptions in connection with our annual testing, or a combination thereof could result in an impairment charge in one or more of our reporting units during a future period. We continue to monitor business performance and external factors affecting our reporting units.

The following is a summary of intangible assets as of March 31, 2024 and December 31, 2023 (in millions):

	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
March 31, 2024:
Capitalized software	$	5,923	$	(4,007)	$	1,916
Licenses	45		(13)		32
Franchise rights	332		(48)		284
Customer relationships	1,114		(537)		577
Trade name	112		(19)		93
Trademarks, patents and other	377		(64)		313
Amortizable intangible assets	$	7,903	$	(4,688)	$	3,215
Indefinite-lived intangible assets	93		—		93
Total Intangible Assets, Net	$	7,996	$	(4,688)	$	3,308
December 31, 2023:
Capitalized software	$	5,839	$	(3,900)	$	1,939
Licenses	30		(7)		23
Franchise rights	291		(49)		242
Customer relationships	1,115		(516)		599
Trade name	172		(30)		142
Trademarks, patents and other	320		(53)		267
Amortizable intangible assets	$	7,767	$	(4,555)	$	3,212
Indefinite-lived intangible assets	93		—		93
Total Intangible Assets, Net	$	7,860	$	(4,555)	$	3,305

A trade name and licenses with carrying values of $89 and $4 million, respectively, as of March 31, 2024 are deemed to be indefinite-lived intangible assets, and therefore are not amortized.

As of March 31, 2024, the estimated fair value of the indefinite-lived trade name associated with Coyote remained greater than its carrying value by less than 10 percent. The carrying value of this trade name is $89 million. Our truckload brokerage business continues to be negatively impacted by market conditions, which has resulted in revenue declines. We continue to monitor business performance and external factors affecting our valuation assumptions for this trade name. There were no events or changes in circumstances as of March 31, 2024 that would indicate the carrying amounts of our indefinite-lived intangible assets may be impaired as of the date of this report.

For the three months ended March 31, 2024, we recorded impairment charges related to finite-lived intangible assets of $48 million ($35 million after tax, or $0.04 per diluted share) within Other Expenses in our statement of consolidated income. These charges represented capitalized software license impairments of $7 million and a $41 million charge to write down the value of certain trade names acquired as part of our acquisition of Bomi Group as we consolidate our brands. There were no impairment charges for finite-lived intangible assets for the three months ended March 31, 2023.

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DEBT AND FINANCING ARRANGEMENTS

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

DEBT AND FINANCING ARRANGEMENTS

DEBT AND FINANCING ARRANGEMENTS

The carrying value of our outstanding debt obligations as of March 31, 2024 and December 31, 2023 consisted of the following (in millions):

	Principal Amount			Carrying Value
			Maturity	2024		2023
Commercial paper	$	—		$	—	$	2,172
Fixed-rate senior notes:
2.800% senior notes	500		2024	500		499
2.200% senior notes	400		2024	400		400
3.900% senior notes	1,000		2025	999		999
2.400% senior notes	500		2026	499		499
3.050% senior notes	1,000		2027	996		996
3.400% senior notes	750		2029	747		747
2.500% senior notes	400		2029	398		398
4.450% senior notes	750		2030	745		745
4.875% senior notes	900		2033	895		894
6.200% senior notes	1,500		2038	1,485		1,485
5.200% senior notes	500		2040	494		494
4.875% senior notes	500		2040	491		491
3.625% senior notes	375		2042	369		369
3.400% senior notes	500		2046	492		492
3.750% senior notes	1,150		2047	1,138		1,138
4.250% senior notes	750		2049	743		743
3.400% senior notes	700		2049	689		689
5.300% senior notes	1,250		2050	1,232		1,232
5.050% senior notes	1,100		2053	1,083		1,083
Floating-rate senior notes:
Floating-rate senior notes	1,562		2049-2073	1,544		1,545
Debentures:
7.620% debentures	276		2030	280		280
Pound Sterling notes:
5.500% notes	84		2031	83		84
5.125% notes	574		2050	546		550
Euro senior notes:
1.625% senior notes	755		2025	754		774
1.000% senior notes	539		2028	537		551
1.500% senior notes	539		2032	537		551
Canadian senior notes:
2.125% senior notes	554		2024	554		566
Finance lease obligations (see note 10)	460		2024-2046	460		472
Facility notes and bonds	320		2029-2045	320		320
Other debt	3		2024-2025	3		6
Total debt	$	20,191		20,013		22,264
Less: current maturities				(1,164)		(3,348)
Long-term debt				$	18,849	$	18,916

Commercial Paper

We are authorized to borrow up to $10.0 billion under a U.S. commercial paper program and €5.0 billion (in a variety of currencies) under a European commercial paper program. There was no commercial paper outstanding as of March 31, 2024. The amount of commercial paper outstanding under these programs in 2024 is expected to fluctuate.

Debt Classification

We have classified certain floating-rate senior notes that are redeemable at the option of the note holder as long-term debt in our consolidated balance sheets, due to our intent and ability to refinance the debt if the put option is exercised. As of March 31, 2024, we continued to classify our 2.200% senior notes with a principal balance of $400 million that mature in September 2024 as long-term debt in our consolidated balance sheet due to our intent and ability to refinance the debt.

Sources of Credit

We maintain two credit agreements with a consortium of banks. The first of these agreements provides revolving credit facilities of $1.0 billion, and expires on December 3, 2024. Amounts outstanding under this agreement bear interest at a periodic fixed rate equal to the term SOFR rate, plus 0.10% per annum and an applicable margin based on our then-current credit rating. The applicable margin from the credit pricing grid as of March 31, 2024 was 0.70%. Alternatively, a fluctuating rate of interest equal to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in the United States; (2) the Federal Funds effective rate plus 0.50%; or (3) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00%, may be used at our discretion.

The second agreement provides revolving credit facilities of $2.0 billion, and expires on December 7, 2026. Amounts outstanding under this facility bear interest at a periodic fixed rate equal to the term SOFR rate plus 0.10% per annum and an applicable margin based on our then-current credit rating. The applicable margin from the credit pricing grid as of March 31, 2024 was 0.875%. Alternatively, a fluctuating rate of interest equal to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in the United States; (2) the Federal Funds effective rate plus 0.50%; or (3) the Adjusted Term SOFR Rate for a one-month interest period plus 1.00%, plus an applicable margin, may be used at our discretion.

If the credit ratings established by Standard & Poor's and Moody's differ, the higher rating will be used, except in cases where the lower rating is two or more levels lower. In these circumstances, the rating one step below the higher rating will be used. We are also able to request advances under these facilities based on competitive bids for the applicable interest rate.

There were no amounts outstanding under these facilities as of March 31, 2024.

Debt Covenants

Our existing debt instruments and credit facilities subject us to certain financial covenants. As of March 31, 2024, and for all prior periods presented, we have satisfied these financial covenants. These covenants limit the amount of secured indebtedness that we may incur, and limit the amount of attributable debt in sale-leaseback transactions, to 10% of net tangible assets. As of March 31, 2024, 10% of net tangible assets was equivalent to $4.5 billion and we had no covered sale-leaseback transactions or secured indebtedness outstanding. We do not expect these covenants to have a material impact on our liquidity.

Fair Value of Debt    

Based on the borrowing rates currently available to us for long-term debt with similar terms and maturities, the fair value of long-term debt, including current maturities, was approximately $19.4 and $22.1 billion as of March 31, 2024 and December 31, 2023, respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of all of our debt instruments.

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LEASES

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

LEASES

LEASES

We have finance and operating leases for real estate (primarily package centers, airport facilities and warehouses), aircraft and engines, information technology equipment, vehicles and various other equipment used in operating our business. Certain leases for real estate and aircraft contain options to purchase, extend or terminate the lease.

Aircraft

In addition to the aircraft that we own, we charter aircraft to handle package and cargo volume on certain international trade lanes and domestic routes. Due to the nature of these agreements, primarily being that either party can cancel the agreement with short notice, we have classified these as short-term leases. A majority of our long-term aircraft operating leases are operated by a third party to handle package and cargo volume in geographic regions where, due to government regulations, we are restricted from operating an airline.

Transportation equipment and other equipment

We enter into both long-term and short-term leases for transportation equipment to supplement our capacity or meet contractual demands. Some of these assets are leased on a month-to-month basis and the leases can be terminated without penalty. We also enter into equipment leases to increase capacity during periods of high demand. These leases are treated as short-term as the cumulative right of use is less than 12 months over the term of the contract.

Some of our transportation and technology equipment leases require us to make additional lease payments based on the underlying usage of the assets. Due to the variable nature of these costs, these are expensed as incurred and are not included in the right of use lease asset and associated lease obligation.

The components of lease expense for the three months ended March 31, 2024 and 2023 were as follows (in millions):

	2024		2023
Operating lease costs	$	231	$	207
Finance lease costs:
Amortization of assets	35		29
Interest on lease liabilities	5		4
Total finance lease costs	40		33
Variable lease costs	76		72
Short-term lease costs	199		277
Total lease costs(1)	$	546	$	589
(1) This table excludes sublease income as it was not material for the three months ended March 31, 2024 or 2023.

In addition to the lease costs disclosed in the table above, we monitor all lease categories for any indicators that the carrying value of the assets may not be recoverable. There were no material lease impairments recognized during the three months ended March 31, 2024 or 2023.

Supplemental information related to leases and location within our consolidated balance sheets is as follows (in millions, except lease term and discount rate):

	March 31, 2024			December 31, 2023
Operating Leases:
Operating lease right-of-use assets	$	4,223		$	4,308
Current maturities of operating leases	$	694		$	709
Non-current operating leases	3,690			3,756
Total operating lease obligations	$	4,384		$	4,465
Finance Leases:
Property, plant and equipment, net	$	727		$	856
Current maturities of long-term debt, commercial paper and finance leases	$	108		$	104
Long-term debt and finance leases	352			368
Total finance lease obligations	$	460		$	472
Weighted average remaining lease term (in years):
Operating leases	10.7			10.8
Finance leases	7.2			7.4
Weighted average discount rate:
Operating leases	3.30		%	3.20		%
Finance leases	3.91		%	3.88		%

Supplemental cash flow information related to leases is as follows (in millions):

	Three Months Ended  March 31,
	2024		2023
Cash paid for amounts included in measurement of obligations:
Operating cash flows from operating leases	$	227	$	212
Operating cash flows from finance leases	3		1
Financing cash flows from finance leases	26		48
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	151	$	498
Finance leases	$	14	$	30

Maturities of lease obligations as of March 31, 2024 were as follows (in millions):

	Finance Leases		Operating Leases
2024	$	101	$	609
2025	102		807
2026	77		697
2027	47		596
2028	41		449
Thereafter	173		2,102
Total lease payments	541		5,260
Less: Imputed interest	(81)		(876)
Total lease obligations	460		4,384
Less: Current obligations	(108)		(694)
Long-term lease obligations	$	352	$	3,690

As of March 31, 2024, we had $720 million of additional leases which had not commenced. These leases will commence later in 2024 or in 2025 when we are granted access to the property, such as when leasehold improvements are completed by the lessor or a certificate of occupancy is obtained.

LEASES

LEASES

We have finance and operating leases for real estate (primarily package centers, airport facilities and warehouses), aircraft and engines, information technology equipment, vehicles and various other equipment used in operating our business. Certain leases for real estate and aircraft contain options to purchase, extend or terminate the lease.

Aircraft

In addition to the aircraft that we own, we charter aircraft to handle package and cargo volume on certain international trade lanes and domestic routes. Due to the nature of these agreements, primarily being that either party can cancel the agreement with short notice, we have classified these as short-term leases. A majority of our long-term aircraft operating leases are operated by a third party to handle package and cargo volume in geographic regions where, due to government regulations, we are restricted from operating an airline.

Transportation equipment and other equipment

We enter into both long-term and short-term leases for transportation equipment to supplement our capacity or meet contractual demands. Some of these assets are leased on a month-to-month basis and the leases can be terminated without penalty. We also enter into equipment leases to increase capacity during periods of high demand. These leases are treated as short-term as the cumulative right of use is less than 12 months over the term of the contract.

Some of our transportation and technology equipment leases require us to make additional lease payments based on the underlying usage of the assets. Due to the variable nature of these costs, these are expensed as incurred and are not included in the right of use lease asset and associated lease obligation.

The components of lease expense for the three months ended March 31, 2024 and 2023 were as follows (in millions):

	2024		2023
Operating lease costs	$	231	$	207
Finance lease costs:
Amortization of assets	35		29
Interest on lease liabilities	5		4
Total finance lease costs	40		33
Variable lease costs	76		72
Short-term lease costs	199		277
Total lease costs(1)	$	546	$	589
(1) This table excludes sublease income as it was not material for the three months ended March 31, 2024 or 2023.

In addition to the lease costs disclosed in the table above, we monitor all lease categories for any indicators that the carrying value of the assets may not be recoverable. There were no material lease impairments recognized during the three months ended March 31, 2024 or 2023.

Supplemental information related to leases and location within our consolidated balance sheets is as follows (in millions, except lease term and discount rate):

	March 31, 2024			December 31, 2023
Operating Leases:
Operating lease right-of-use assets	$	4,223		$	4,308
Current maturities of operating leases	$	694		$	709
Non-current operating leases	3,690			3,756
Total operating lease obligations	$	4,384		$	4,465
Finance Leases:
Property, plant and equipment, net	$	727		$	856
Current maturities of long-term debt, commercial paper and finance leases	$	108		$	104
Long-term debt and finance leases	352			368
Total finance lease obligations	$	460		$	472
Weighted average remaining lease term (in years):
Operating leases	10.7			10.8
Finance leases	7.2			7.4
Weighted average discount rate:
Operating leases	3.30		%	3.20		%
Finance leases	3.91		%	3.88		%

Supplemental cash flow information related to leases is as follows (in millions):

	Three Months Ended  March 31,
	2024		2023
Cash paid for amounts included in measurement of obligations:
Operating cash flows from operating leases	$	227	$	212
Operating cash flows from finance leases	3		1
Financing cash flows from finance leases	26		48
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	151	$	498
Finance leases	$	14	$	30

Maturities of lease obligations as of March 31, 2024 were as follows (in millions):

	Finance Leases		Operating Leases
2024	$	101	$	609
2025	102		807
2026	77		697
2027	47		596
2028	41		449
Thereafter	173		2,102
Total lease payments	541		5,260
Less: Imputed interest	(81)		(876)
Total lease obligations	460		4,384
Less: Current obligations	(108)		(694)
Long-term lease obligations	$	352	$	3,690

As of March 31, 2024, we had $720 million of additional leases which had not commenced. These leases will commence later in 2024 or in 2025 when we are granted access to the property, such as when leasehold improvements are completed by the lessor or a certificate of occupancy is obtained.

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LEGAL PROCEEDINGS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

LEGAL PROCEEDINGS AND CONTINGENCIES

LEGAL PROCEEDINGS AND CONTINGENCIES

We are involved in a number of judicial proceedings and other matters arising from the conduct of our business.

Although there can be no assurances as to the ultimate outcome, we have generally denied, or believe we have meritorious defenses and will deny, liability in pending matters, including (except as may be otherwise noted herein) the matters described below, and we intend to vigorously defend each matter. We accrue amounts associated with judicial proceedings and other contingencies when and to the extent a loss becomes probable and can be reasonably estimated. The actual costs of resolving legal proceedings may be substantially higher or lower than the amounts accrued on those claims.

For matters as to which we are not able to estimate a possible loss or range of losses, we are not able to determine whether any such loss will have a material impact on our operations or financial condition. For these matters, we have described the reasons that we are unable to estimate a possible loss or range of losses.

Judicial Proceedings

We are a defendant in a number of lawsuits filed in state and federal courts containing various class action allegations under state wage-and-hour laws. We do not believe that any loss associated with any such matter will have a material impact on our financial condition, results of operations or liquidity.

In July 2023, Baker v. United Parcel Service, Inc. (DE) and United Parcel Service, Inc. (OH) was certified as a class action in federal court in the Eastern District of Washington. The plaintiff in this matter alleges that UPS violated the Uniformed Services Employment and Reemployment Rights Act. We are vigorously defending ourselves in this matter and believe that we have a number of meritorious defenses, and there are unresolved questions of law and fact that could be important to the ultimate resolution of this matter. Accordingly, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity.

Other Matters

In August 2016, Spain’s National Markets and Competition Commission ("CNMC") announced an investigation into 10 companies in the commercial delivery and parcel industry, including UPS, related to alleged nonaggression agreements to allocate customers. In May 2017, we received a Statement of Objections issued by the CNMC. In July 2017, we received a Proposed Decision from the CNMC. In March 2018, the CNMC adopted a final decision, finding an infringement and imposing an immaterial fine on UPS. We appealed the decision. In December 2022, a trial court ruled against us. We have filed an appeal before the Spanish Supreme Court. We are vigorously defending ourselves and believe that we have a number of meritorious defenses. There are also unresolved questions of law that could be important to the ultimate resolution of this matter. We do not believe that any loss from this matter would have a material impact on our financial condition, results of operations or liquidity.

The Securities and Exchange Commission (the "SEC") has been investigating our controls and practices surrounding impairment analyses in connection with the sale of UPS Freight in April 2021. Such analysis led to a non-cash goodwill impairment charge being recorded during the quarter ended December 31, 2020. Since March 2024, when the SEC staff informed the Company that it disagreed with the timing of the impairment, the Company has been discussing with the SEC staff the possibility of reaching a negotiated resolution. Although the Company cannot predict the ultimate outcome of the investigation with certainty, it believes the resolution of the SEC investigation will not have a material effect on the Company's financial condition, results of operations or liquidity. An accrual representing our best estimate of the impact of this regulatory matter is included in our consolidated balance sheet at March 31, 2024.

We are a party to various other matters that arose in the normal course of business. These include disputes with government authorities in various jurisdictions over the imposition of duties, fines, taxes and assessments from time to time. We are vigorously defending ourselves and believe that we have a number of meritorious defenses in these disputes. There are also unresolved questions of law that could be important to the ultimate resolution of these disputes. Accordingly, we are not able to estimate a possible loss or range of losses that may result from these disputes or to determine whether such losses, if any, would have a material impact on our financial condition, results of operations or liquidity.

We do not believe that the eventual resolution of any other matters (either individually or in the aggregate), including any reasonably possible losses in excess of current accruals, will have a material impact on our operations or financial condition.

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SHAREOWNERS' EQUITY

3 Months Ended

Mar. 31, 2024

Stockholders' Equity Note [Abstract]

SHAREOWNERS' EQUITY

SHAREOWNERS' EQUITY

Capital Stock, Additional Paid-In Capital, Retained Earnings and Non-Controlling Interests

We are authorized to issue two classes of common stock, which are distinguished from each other primarily by their respective voting rights. Class A shares of UPS are entitled to 10 votes per share, whereas class B shares are entitled to one vote per share. Class A shares are primarily held by UPS employees and retirees, as well as trusts and descendants of the Company's founders, and these shares are fully convertible into class B shares at any time. Class B shares are publicly traded on the New York Stock Exchange under the symbol "UPS". Class A and B shares both have a $0.01 par value, and as of March 31, 2024, there were 4.6 billion class A shares and 5.6 billion class B shares authorized to be issued. Additionally, there are 200 million preferred shares authorized to be issued, with a par value of $0.01 per share. As of March 31, 2024, no preferred shares had been issued.

The following is a rollforward of our common stock, additional paid-in capital, retained earnings and non-controlling interests accounts for the three months ended March 31, 2024 and 2023 (in millions, except per share amounts):

Three Months Ended March 31:	2024			2023
	Shares	Dollars		Shares	Dollars
Class A Common Stock:
Balance at beginning of period	127	$	2	134	$	2
Stock award plans	2	—		3	—
Common stock issuances	—	—		1	—
Conversions of class A to class B common stock	(3)	—		(3)	—
Class A shares issued at end of period	126	$	2	135	$	2
Class B Common Stock:
Balance at beginning of period	726	$	7	725	$	7
Common stock purchases	—	—		(4)	—
Conversions of class A to class B common stock	3	—		3	—
Class B shares issued at end of period	729	$	7	724	$	7
Additional Paid-In Capital:
Balance at beginning of period		$	—		$	—
Stock award plans		(118)			345
Common stock purchases		—			(492)
Common stock issuances		118			147
Balance at end of period		$	—		$	—
Retained Earnings:
Balance at beginning of period		$	21,055		$	21,326
Net income attributable to controlling interests		1,113			1,895
Dividends ($1.63 and $1.62 per share) (1)		(1,414)			(1,453)
Common stock purchases		—			(258)
Other (2)		(73)			—
Balance at end of period		$	20,681		$	21,510
Non-Controlling Interests:
Balance at beginning of period		$	8		$	17
Change in non-controlling interest		16			(2)
Balance at end of period		$	24		$	15
(1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $66 and $105 million as of March 31, 2024 and 2023, respectively, that were settled in shares of class A common stock. (2) Includes adjustments related to certain stock-based awards.

We did not repurchase any shares under our share repurchase program during the three months ended March 31, 2024. We repurchased 4.1 million shares of class B common stock for $750 million during the three months ended March 31, 2023. These repurchases were completed as follows:

•In August 2021, the Board of Directors authorized the company to repurchase up to $5.0 billion of class A and class B common stock (the "2021 Authorization"). For the three months ended March 31, 2023, we repurchased 0.5 million shares of class B common stock for $82 million under this authorization.

•In January 2023, the Board of Directors terminated the 2021 Authorization and approved a new share repurchase authorization for $5.0 billion of class A and class B common stock (the "2023 Authorization"). For the three months ended March 31, 2023, we repurchased 3.6 million shares for $668 million under the 2023 Authorization.

As of March 31, 2024, we had $2.8 billion available under the 2023 Authorization. We do not currently anticipate any share repurchases in 2024.

Future share repurchases may be in the form of accelerated share repurchase programs, open market purchases or other methods we deem appropriate. The timing of share repurchases will depend upon market conditions. Unless terminated earlier by the Board of Directors, this program will expire when we have purchased all shares authorized for repurchase under the program.

Movements in additional paid-in capital in respect of stock award plans comprise accruals for unvested awards, offset by adjustments for awards that vest during the period.

Accumulated Other Comprehensive Income (Loss)

We recognize activity in other comprehensive income (loss) for foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale securities, unrealized gains and losses from derivatives that qualify as hedges of cash flows and unrecognized pension and postretirement benefit costs. The activity in accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023 was as follows (in millions):

Three Months Ended March 31:	2024		2023
Foreign Currency Translation Gain (Loss), Net of Tax:
Balance at beginning of period	$	(1,248)	$	(1,446)
Translation adjustment (net of tax effect of $6 and $(15))	(125)		115
Reclassification to earnings (net of tax effect of $0 and $0)	—		3
Balance at end of period	(1,373)		(1,328)
Unrealized Gain (Loss) on Marketable Securities, Net of Tax:
Balance at beginning of period	(2)		(11)
Current period changes in fair value (net of tax effect of $0 and $1)	(1)		5
Reclassification to earnings (net of tax effect of $0 and $1)	—		2
Balance at end of period	(3)		(4)
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax:
Balance at beginning of period	(76)		167
Current period changes in fair value (net of tax effect of $33 and $(8))	103		(26)
Reclassification to earnings (net of tax effect of $(10) and $(16))	(30)		(51)
Balance at end of period	(3)		90
Unrecognized Pension and Postretirement Benefit Costs, Net of Tax:
Balance at beginning of period	(2,432)		(259)
Reclassification to earnings (net of tax effect of $8 and $7)	30		20
Balance at end of period	(2,402)		(239)
Accumulated other comprehensive income (loss) at end of period	$	(3,781)	$	(1,481)

Detail of the gains (losses) reclassified from accumulated other comprehensive income (loss) to the statements of consolidated income for the three months ended March 31, 2024 and 2023 is as follows (in millions):

	Amount Reclassified from AOCI(1)				Affected Line Item in the Income Statement
Three Months Ended March 31:	2024		2023
Unrealized Gain (Loss) on Foreign Currency Translation:
Realized gain (loss) on business wind-down	$	—	$	(3)	Other expenses
Income tax (expense) benefit	—		—		Income tax expense
Impact on net income	—		(3)		Net income
Unrealized Gain (Loss) on Marketable Securities:
Realized gain (loss) on sale of securities	—		(3)		Investment income and other
Income tax (expense) benefit	—		1		Income tax expense
Impact on net income	—		(2)		Net income
Unrealized Gain (Loss) on Cash Flow Hedges:
Interest rate contracts	(1)		(1)		Interest expense
Foreign currency exchange contracts	41		68		Revenue
Income tax (expense) benefit	(10)		(16)		Income tax expense
Impact on net income	30		51		Net income
Unrecognized Pension and Postretirement Benefit Costs:
Prior service costs	(38)		(27)		Investment income and other
Income tax (expense) benefit	8		7		Income tax expense
Impact on net income	(30)		(20)		Net income
Total amount reclassified for the period	$	—	$	26	Net income
(1) Accumulated other comprehensive income (loss)

Deferred Compensation Obligations and Treasury Stock

We maintain a deferred compensation plan whereby certain employees were previously able to elect to defer the gains on stock option exercises by deferring the shares received upon exercise into a rabbi trust. The shares held in this trust are classified as treasury stock, and the liability to participating employees is classified as a deferred compensation obligation within Shareowners’ Equity in the consolidated balance sheets. The number of shares needed to settle the liability for deferred compensation obligations is included in the denominator in both the basic and diluted earnings per share calculations. Employees are generally no longer able to defer the gains from stock options exercised.

Activity in the deferred compensation program for the three months ended March 31, 2024 and 2023 was as follows (in millions):

	2024			2023
Three Months Ended March 31:	Shares	Dollars		Shares	Dollars
Deferred Compensation Obligations:
Balance at beginning of period		$	9		$	13
Reinvested dividends		—			—
Benefit payments		(3)			(4)
Balance at end of period		$	6		$	9
Treasury Stock:
Balance at beginning of period	—	$	(9)	—	$	(13)
Reinvested dividends	—	—		—	—
Benefit payments	—	3		—	4
Balance at end of period	—	$	(6)	—	$	(9)

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SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2024

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. 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 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 ("EMEA"), 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, truckload brokerage, 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.

In evaluating financial performance, we focus on operating profit as a segment’s measure of profit or loss. Operating profit is before investment income 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. There were no significant changes to our allocation methodologies in the first quarter of 2024.

Results of operations for the three months ended March 31, 2024 and 2023 were as follows (in millions):

	Three Months Ended  March 31,
	2024		2023
Revenue:
U.S. Domestic Package	$	14,234	$	14,987
International Package	4,256		4,543
Supply Chain Solutions	3,216		3,395
Consolidated revenue	$	21,706	$	22,925
Operating Profit:
U.S. Domestic Package	$	825	$	1,466
International Package	656		828
Supply Chain Solutions	132		247
Consolidated operating profit	$	1,613	$	2,541

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EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

The earnings per share amounts are the same for class A and class B common shares as the holders of each class are legally entitled to equal per-share distributions whether through dividends or in liquidation.

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 (in millions, except per share amounts):

	Three Months Ended  March 31,
	2024		2023
Numerator:
Net income attributable to common shareowners	$	1,113	$	1,895
Denominator:
Weighted-average shares	853		858
Vested portion of restricted shares	3		4
Denominator for basic earnings per share	856		862
Effect of dilutive securities:
Restricted performance units	—		2
Stock options	1		1
Denominator for diluted earnings per share	857		865
Basic earnings per share(1)	$	1.30	$	2.20
Diluted earnings per share(1)	$	1.30	$	2.19

(1)    Earnings per share is computed using unrounded amounts.

Diluted earnings per share for the three months ended March 31, 2024 and 2023 excluded the effect of 0.5 and 0.2 million shares of common stock, respectively, that may be issued upon the exercise of employee stock options because such effect would be antidilutive.

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DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT

DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT

Risk Management Policies

Changes in fuel prices, interest rates and foreign currency exchange rates impact our results of operations and we actively monitor these exposures. Where deemed appropriate, to manage the impact of these exposures on earnings and/or cash flows, we may enter into a variety of derivative financial instruments. We do not hold or issue derivative financial instruments for trading or speculative purposes.

Credit Risk Management

The forward contracts, swaps and options discussed below contain an element of risk that the counterparties may be unable to meet the terms of the agreements. We seek to minimize such risk exposures for these instruments by limiting the counterparties to banks and financial institutions that meet established credit guidelines. We may further manage credit risk through the use of bilateral collateral provisions and/or early termination rights utilizing master netting arrangements, whereby cash is exchanged based on the net fair value of derivatives associated with each counterparty. The majority of these arrangements require exchange of collateral when positions exceed $250 million.

As of March 31, 2024 and December 31, 2023, we held cash collateral of $82 and $103 million, respectively, under these agreements. This collateral is included in Cash and cash equivalents in the consolidated balance sheets and is unrestricted. As of March 31, 2024, no collateral was required to be posted with our counterparties. As of December 31, 2023, we were required to post $13 million with our counterparties.

Types of Hedges

Commodity Risk Management

Currently, the fuel surcharges that we apply in our domestic and international package businesses are the primary means of reducing the risk of adverse fuel price changes on our business. In order to mitigate the impact of fuel surcharges imposed on us by outside carriers, we regularly adjust the rates we charge for our freight brokerage services.

Foreign Currency Risk Management

To protect against the reduction in value of forecasted foreign currency cash flows from our international package business, we maintain a foreign currency cash flow hedging program. Our most significant foreign currency exposures relate to the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. We generally designate and account for these contracts as cash flow hedges of anticipated foreign currency denominated revenue.

We may also hedge portions of our anticipated cash settlements of principal and interest on certain foreign currency denominated debt. We generally designate and account for these contracts as cash flow hedges of forecasted foreign currency denominated transactions.

We hedge our net investment in certain foreign operations with foreign currency denominated debt instruments.

Interest Rate Risk Management

We may use a combination of derivative instruments to manage the fixed and floating interest rate mix of our total debt portfolio and related overall cost of borrowing.

We generally designate and account for interest rate swaps that convert fixed-rate interest payments into floating-rate interest payments as fair value hedges of the associated debt instruments. We designate and account for interest rate swaps that convert floating-rate interest payments into fixed-rate interest payments as cash flow hedges of the forecasted payment obligations.

We may periodically hedge the forecasted fixed-coupon interest payments associated with anticipated debt offerings by using forward starting interest rate swaps, interest rate locks or similar derivatives.

Outstanding Positions

As of March 31, 2024 and December 31, 2023, the notional amounts of our outstanding derivative positions were as follows (in millions):

		March 31, 2024	December 31, 2023
Currency hedges:
Euro	EUR	4,381	4,408
British Pound Sterling	GBP	716	663
Canadian Dollar	CAD	1,725	1,550
Hong Kong Dollar	HKD	3,715	1,822

As of March 31, 2024 and December 31, 2023, we had no outstanding commodity hedge positions.

Balance Sheet Recognition

The following table indicates the location in the consolidated balance sheets where our derivative assets and liabilities have been recognized, the fair value hierarchy level applicable to each derivative type and the related fair values of those derivatives.

We have master netting arrangements with substantially all of our counterparties giving us the right of offset for our derivative positions. However, we have not elected to offset the fair value positions of our derivative contracts recorded in the consolidated balance sheets. The columns labeled Net Amounts if Right of Offset had been Applied indicate the potential net fair value positions by type of contract and location in the consolidated balance sheets had we elected to apply the right of offset as of March 31, 2024 and December 31, 2023 (in millions):

		Fair Value Hierarchy Level	Gross Amounts Presented in Consolidated Balance Sheets				Net Amounts if Right of Offset had been Applied
Asset Derivatives	Balance Sheet Location		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedges:
Foreign currency exchange contracts	Other current assets	Level 2	$	123	$	95	$	113	$	73
Foreign currency exchange contracts	Other non-current assets	Level 2	72		63		49		19
Derivatives not designated as hedges:
Foreign currency exchange contracts	Other current assets	Level 2	—		—		—		—
Total Asset Derivatives			$	195	$	158	$	162	$	92

		Fair Value Hierarchy Level	Gross Amounts Presented in Consolidated Balance Sheets				Net Amounts if Right of Offset had been Applied
Liability Derivatives	Balance Sheet Location		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedges:
Foreign currency exchange contracts	Other current liabilities	Level 2	$	11	$	26	$	1	$	4
Foreign currency exchange contracts	Other non-current liabilities	Level 2	23		65		—		21
Derivatives not designated as hedges:
Foreign currency exchange contracts	Other non-current liabilities	Level 2	—		1		—		1
Total Liability Derivatives			$	34	$	92	$	1	$	26

Our foreign currency exchange rate derivatives are largely comprised of over-the-counter derivatives, which are primarily valued using pricing models that rely on market observable inputs such as yield curves, foreign currency exchange rates and investment forward prices; therefore, these derivatives are classified as Level 2.

Balance Sheet Location of Hedged Item in Fair Value Hedges    

The following table indicates the amounts that were recorded in the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of March 31, 2024 and December 31, 2023 (in millions):

Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included	Carrying Amount of Hedged Liabilities		Cumulative Amount of Fair Value Hedge Adjustments		Carrying Amount of Hedged Liabilities		Cumulative Amount  of Fair Value Hedge Adjustments
	March 31, 2024		March 31, 2024		December 31, 2023		December 31, 2023
Long-term debt and finance leases	$	280	$	4	$	280	$	4

Income Statement and AOCI Recognition of Designated Hedges

The following table indicates the amount of gains (losses) that have been recognized in the statements of consolidated income for fair value and cash flow hedges, as well as the associated gain (loss) for the underlying hedged item for fair value hedges for the three months ended March 31, 2024 and 2023 (in millions):

	Three Months Ended March 31,
Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships	2024						2023
	Revenue		Interest Expense		Investment Income and Other		Revenue		Interest Expense		Investment Income and Other
Gain or (loss) on cash flow hedging relationships:
Interest Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income	—		(1)		—		—		(1)		—
Foreign Currency Exchange Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income	41		—		—		68		—		—
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	$	41	$	(1)	$	—	$	68	$	(1)	$	—

The following table indicates the amount of gains (losses) that have been recognized in AOCI for the three months ended March 31, 2024 and 2023 for those derivatives designated as cash flow hedges (in millions):

Three Months Ended March 31:
Derivative Instruments in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives
	2024		2023
Foreign currency exchange contracts	136		(34)
Total	$	136	$	(34)

As of March 31, 2024, there were $106 million of pre-tax gains related to cash flow hedges deferred in AOCI that are expected to be reclassified to income over the 12-month period ending March 31, 2025. The actual amounts that will be reclassified to income over the next 12 months will vary from this amount as a result of changes in market conditions. The maximum term over which we are hedging exposures to the variability of cash flows is approximately 3 years.

The following table indicates the amount of gains (losses) that have been recognized in AOCI within foreign currency translation adjustment for the three months ended March 31, 2024 and 2023 for those instruments designated as net investment hedges (in millions):

Three Months Ended March 31:
Non-derivative Instruments in Net Investment Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Debt
	2024		2023
Foreign currency denominated debt	$	66	$	(73)
Total	$	66	$	(73)

Income Statement Recognition of Non-Designated Derivative Instruments

Derivative instruments that are not designated as hedges are recorded at fair value with unrealized gains and losses reported in earnings each period. Cash flows from the settlement of derivative instruments appear in the statements of consolidated cash flows within the same categories as the cash flows of the hedged item.

We may periodically terminate interest rate swaps and foreign currency exchange forward contracts or enter into offsetting swap and foreign currency positions with different counterparties. As part of this process, we de-designate our original hedge relationship.

Amounts recorded in the statements of consolidated income related to fair value changes and settlements of foreign currency forward contracts not designated as hedges for the three months ended March 31, 2024 and 2023 (in millions) were as follows:

Derivative Instruments Not Designated in Hedging Relationships	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		2024		2023
Three Months Ended March 31:
Foreign currency exchange contracts	Investment income and other	$	(5)	$	4
Total		$	(5)	$	4

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INCOME TAXES

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our effective tax rate for the three months ended March 31, 2024 and 2023 was approximately 27.5% and 24.9%, respectively. The year-over-year increase in our effective tax rate was driven by share-based compensation shortfalls, unfavorable changes in uncertain tax positions and a non-deductible expense related to a regulatory matter.

We have recognized liabilities for uncertain tax positions and we reevaluate these uncertain tax positions on a quarterly basis. A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months, however, an estimate of the range of reasonably possible outcomes cannot be made. Items that may cause changes to unrecognized tax benefits include the allowance or disallowance of deductions, the timing of deductions and the allocation of income and expense between tax jurisdictions. Changes could result from the settlement of ongoing litigation, the completion of ongoing examinations, the expiration of statutes of limitations or other unforeseen circumstances.

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TRANSFORMATION COSTS

3 Months Ended

Mar. 31, 2024

Restructuring and Related Activities [Abstract]

TRANSFORMATION COSTS

TRANSFORMATION COSTS

We are undertaking an enterprise-wide transformation of our organization that includes initiatives, as well as changes in processes and technology, that impact global direct and indirect operating costs. In 2023, we announced our "fit to serve" initiative, which is intended to right-size our business for the future through a workforce reduction of approximately 12,000 positions and create a more efficient operating model to enhance responsiveness to changing market dynamics. As of March 31, 2024 and December 31, 2023, an accrual for separation costs of $87 and $205 million, respectively, was included in our consolidated balance sheets, all of which we expect to pay during 2024.

The table below presents transformation costs for the three months ended March 31, 2024 and 2023 (in millions):

	Three Months Ended  March 31,
	2024		2023
Transformation Costs:
Compensation and benefits	$	31	$	(12)
Other expenses	15		15
Total Transformation Costs	$	46	$	3
Income Tax Benefit from Transformation Costs	(11)		—
After-Tax Transformation Costs	$	35	$	3

The income tax effects of transformation costs are calculated by multiplying the amount of the adjustments by the statutory tax rates applicable in each tax jurisdiction.

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Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net income	$ 1,113	$ 1,895

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Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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BASIS OF PRESENTATION AND ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of Consolidation

Principles of Consolidation

The accompanying unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited, consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of March 31, 2024 and our results of operations and cash flows for the three months ended March 31, 2024 and 2023. The results reported in these unaudited, consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. The unaudited, consolidated financial statements should be read in conjunction with the audited, consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of our cash and cash equivalents, accounts receivable, finance receivables and accounts payable approximated fair value as of March 31, 2024 and December 31, 2023. The fair values of our marketable securities are disclosed in note 5, our recognized multiemployer pension withdrawal liabilities in note 7, our short- and long-term debt in note 9 and our derivative instruments in note 15. We apply a fair value hierarchy (Levels 1, 2 and 3) when measuring and reporting items at fair value. Fair values are based on listed market prices (Level 1), when such prices are available. To the extent that listed market prices are not available, fair value is determined based on other relevant factors, including dealer price quotations (Level 2). If listed market prices or other relevant factors are not available, inputs are developed from unobservable data reflecting our own assumptions and include situations where there is little or no market activity for the asset or liability (Level 3).

Use of Estimates

Use of Estimates

The preparation of the accompanying unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of these financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. As a result, our accounting estimates and assumptions may change significantly over time.

Supplier Finance Programs

Supplier Finance Programs

As part of our working capital management, certain financial institutions offer a Supply Chain Finance ("SCF") program to certain of our suppliers. We agree to commercial terms with our suppliers, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program. Suppliers issue invoices to us based on the agreed-upon contractual terms. If they participate in the SCF program, our suppliers, at their sole discretion, determine which invoices, if any, to sell to the financial institutions. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms. No guarantees are provided by us under the SCF program. We have no economic interest in a supplier’s decision to participate, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program.

Amounts due to our suppliers that participate in the SCF program are included in Accounts payable in our consolidated balance sheets.

Adoption of New Accounting Standards and Accounting Standards Issued But Not Yet Effective

Adoption of New Accounting Standards

Accounting pronouncements adopted during the periods covered by the unaudited, consolidated financial statements did not have a material impact on our consolidated financial position, results of operations, cash flows or internal controls.

Accounting Standards Issued But Not Yet Effective

In November 2023, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") on segment reporting, which will require new disclosures, including significant segment expenses and additional qualitative information about how segment measures are used by management. The standard becomes effective for us beginning with our 2024 annual reporting and for both annual and interim periods thereafter. We are evaluating the impact of this ASU on our disclosures. We will be required to define significant segment expense categories and we anticipate providing additional qualitative information in accordance with this ASU. We do not expect this ASU will have a significant impact on our consolidated financial position, results of operations or cash flows.

In December 2023, the FASB issued an ASU to enhance tax-related disclosures. This update will require more standardized categories for tax rate reconciliation and additional detail for significant tax items. It will also require a breakdown of income taxes paid by jurisdiction exceeding 5% of total taxes and remove certain disclosure requirements for unremitted foreign earnings and uncertain tax positions. The standard becomes effective for us in the first quarter of 2025. We are evaluating its impact on our financial statements, disclosures and internal controls but do not expect this ASU will have a significant impact on our consolidated financial position, results of operations, cash flows or internal controls.

Revenue Recognition, Contract Assets and Liabilities

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.

Contract Assets and Liabilities

Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment only when services have been completed (i.e. shipments have been delivered). Amounts do not exceed their net realizable value. Contract assets are generally classified as current and the full balance is converted each quarter based on the short-term nature of the transactions.

Contract liabilities consist of advance payments and billings in excess of revenue as well as deferred revenue. Advance payments and billings in excess of revenue represent payments received from our customers that will be earned over the contract term. Deferred revenue represents the amount due from customers related to in-transit shipments that has not yet been recognized as revenue based on our selected measure of progress. We classify advance payments and billings in excess of revenue as either current or long-term, depending on the period over which the amount will be earned. We classify deferred revenue as current based on the short-term nature of the transactions. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. In order to determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that deferred revenue balance.

Accounts Receivable, Net

Accounts Receivable, Net

Accounts receivable, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. Losses on accounts receivable are recognized when reasonable and supportable forecasts affect the expected collectability. This requires us to make our best estimate of the current expected losses inherent in our accounts receivable at each balance sheet date. This estimate requires consideration of historical loss experience, adjusted for current conditions, forward looking indicators, trends in customer payment frequency and judgments about the probable effects of relevant observable data, including present and future economic conditions and the financial health of specific customers and market sectors. Our risk management process includes standards and policies for reviewing major account exposures and concentrations of risk.

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REVENUE RECOGNITION (Tables)

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

Disaggregation of Revenue

	Three Months Ended  March 31,
	2024		2023
Revenue:
Next Day Air	$	2,316	$	2,461
Deferred	1,156		1,194
Ground	10,762		11,332
U.S. Domestic Package	14,234		14,987
Domestic	758		794
Export	3,350		3,552
Cargo & Other	148		197
International Package	4,256		4,543
Forwarding	1,280		1,514
Logistics	1,542		1,410
Other	394		471
Supply Chain Solutions	3,216		3,395
Consolidated revenue	$	21,706	$	22,925

Schedule of Contract Assets and Liabilities

Contract assets and liabilities as of March 31, 2024 and December 31, 2023 were as follows (in millions):

	Balance Sheet Location	March 31, 2024		December 31, 2023
Contract Assets:
Revenue related to in-transit packages	Other current assets	$	269	$	237
Contract Liabilities:
Short-term advance payments from customers	Other current liabilities	$	13	$	20
Long-term advance payments from customers	Other non-current liabilities	$	26	$	25

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Weighted-Average Assumptions and Fair Values Used of Performance Units Granted

The weighted-average assumptions used and the weighted-average fair values of the LTIP awards granted in 2024 and 2023 are as follows:

	2024			2023
Risk-free interest rate	4.45		%	3.81		%
Expected volatility	27.00		%	30.30		%
Weighted-average fair value of units granted	$	158.16		$	200.01
Share payout	102.20		%	107.80		%

Fair Value of Employee Stock Options Granted and Determined by Black-Scholes Valuation Model Assumptions

The fair value of each option granted is estimated using a Black-Scholes option pricing model. The weighted-average assumptions used and the weighted-average fair values of options granted in 2024 and 2023 are as follows:

	2024			2023
Expected dividend yield	3.96		%	3.54		%
Risk-free interest rate	4.25		%	3.70		%
Expected life (in years)	6.13			5.93
Expected volatility	28.94		%	28.31		%
Weighted-average fair value of options granted	$	34.76		$	41.08

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MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities

The following is a summary of marketable securities classified as trading and available for sale as of March 31, 2024 and December 31, 2023 (in millions):

	Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
March 31, 2024:
Current trading marketable securities:
Equity securities	$	3	$	—	$	—	$	3
Total trading marketable securities	3		—		—		3
Current available-for-sale securities:
U.S. government and agency debt securities	200		—		(2)		198
Mortgage and asset-backed debt securities	—		—		—		—
Corporate debt securities	32		—		(1)		31
Non-U.S. government debt securities	—		—		—		—
Total available-for-sale marketable securities	232		—		(3)		229
Total current marketable securities	$	235	$	—	$	(3)	$	232
	Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
December 31, 2023:
Current trading marketable securities:
Equity securities	$	4	$	—	$	—	$	4
Total trading marketable securities	4		—		—		4
Current available-for-sale securities:
U.S. government and agency debt securities	963		2		(4)		961
Mortgage and asset-backed debt securities	3		—		—		3
Corporate debt securities	1,891		4		(4)		1,891
Non-U.S. government debt securities	7		—		—		7
Total available-for-sale marketable securities	2,864		6		(8)		2,862
Total current marketable securities	$	2,868	$	6	$	(8)	$	2,866

Investments Classified by Contractual Maturity Date

The amortized cost and estimated fair value of marketable securities as of March 31, 2024 by contractual maturity are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations with or without prepayment penalties.

	Cost		Estimated Fair Value
Due in one year or less	$	70	$	69
Due after one year through three years	162		160
Due after three years through five years	—		—
Due after five years	—		—
	232		229
Equity securities	3		3
	$	235	$	232

Fair Value, Assets Measured on Recurring Basis

The following table presents information about our investments measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
March 31, 2024:
Marketable Securities:
U.S. government and agency debt securities	$	198	$	—	$	—	$	198
Mortgage and asset-backed debt securities	—		—		—		—
Corporate debt securities	—		31		—		31
Equity securities	—		3		—		3
Non-U.S. government debt securities	—		—		—		—
Total marketable securities	198		34		—		232
Other non-current investments(1)	—		19		—		19
Total	$	198	$	53	$	—	$	251

(1)    Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2023:
Marketable Securities:
U.S. government and agency debt securities	$	961	$	—	$	—	$	961
Mortgage and asset-backed debt securities	—		3		—		3
Corporate debt securities	—		1,891		—		1,891
Equity securities	—		4		—		4
Non-U.S. government debt securities	—		7		—		7
Total marketable securities	961		1,905		—		2,866
Other non-current investments(1)	—		19		—		19
Total	$	961	$	1,924	$	—	$	2,885

(1)    Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan.

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PROPERTY, PLANT AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

Property, plant and equipment as of March 31, 2024 and December 31, 2023 consisted of the following (in millions):

	2024		2023
Vehicles	$	11,970	$	11,768
Aircraft	23,117		22,888
Land	2,129		2,138
Buildings	6,282		6,255
Building and leasehold improvements	5,295		5,241
Plant equipment	18,109		17,322
Technology equipment	2,677		2,656
Construction-in-progress	2,634		3,247
	72,213		71,515
Less: Accumulated depreciation and amortization	(35,045)		(34,570)
Property, Plant and Equipment, Net	$	37,168	$	36,945

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EMPLOYEE BENEFIT PLANS (Tables)

3 Months Ended

Mar. 31, 2024

Retirement Benefits [Abstract]

Schedule of Defined Benefit Plans Disclosures

Information about the net periodic benefit cost for our company-sponsored pension and postretirement benefit plans for the three months ended March 31, 2024 and 2023 is as follows (in millions):

	U.S. Pension Benefits				U.S. Postretirement Medical Benefits				International Pension Benefits
	2024		2023		2024		2023		2024		2023
Three Months Ended March 31:
Service cost	$	310	$	293	$	5	$	5	$	11	$	11
Interest cost	644		627		27		29		17		17
Expected return on assets	(771)		(742)		(1)		(3)		(21)		(21)
Amortization of prior service cost	38		27		—		—		—		—
Net periodic benefit cost	$	221	$	205	$	31	$	31	$	7	$	7

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GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table indicates the allocation of goodwill as of March 31, 2024 and December 31, 2023 (in millions):

	U.S. Domestic Package		International Package		Supply Chain Solutions		Consolidated
December 31, 2023:	$	847	$	503	$	3,522	$	4,872
Acquired	—		—		8		8
Currency / Other	—		(7)		(27)		(34)
March 31, 2024:	$	847	$	496	$	3,503	$	4,846

Schedule of Intangible Assets (Excluding Goodwill)

The following is a summary of intangible assets as of March 31, 2024 and December 31, 2023 (in millions):

	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
March 31, 2024:
Capitalized software	$	5,923	$	(4,007)	$	1,916
Licenses	45		(13)		32
Franchise rights	332		(48)		284
Customer relationships	1,114		(537)		577
Trade name	112		(19)		93
Trademarks, patents and other	377		(64)		313
Amortizable intangible assets	$	7,903	$	(4,688)	$	3,215
Indefinite-lived intangible assets	93		—		93
Total Intangible Assets, Net	$	7,996	$	(4,688)	$	3,308
December 31, 2023:
Capitalized software	$	5,839	$	(3,900)	$	1,939
Licenses	30		(7)		23
Franchise rights	291		(49)		242
Customer relationships	1,115		(516)		599
Trade name	172		(30)		142
Trademarks, patents and other	320		(53)		267
Amortizable intangible assets	$	7,767	$	(4,555)	$	3,212
Indefinite-lived intangible assets	93		—		93
Total Intangible Assets, Net	$	7,860	$	(4,555)	$	3,305

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DEBT AND FINANCING ARRANGEMENTS (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The carrying value of our outstanding debt obligations as of March 31, 2024 and December 31, 2023 consisted of the following (in millions):

	Principal Amount			Carrying Value
			Maturity	2024		2023
Commercial paper	$	—		$	—	$	2,172
Fixed-rate senior notes:
2.800% senior notes	500		2024	500		499
2.200% senior notes	400		2024	400		400
3.900% senior notes	1,000		2025	999		999
2.400% senior notes	500		2026	499		499
3.050% senior notes	1,000		2027	996		996
3.400% senior notes	750		2029	747		747
2.500% senior notes	400		2029	398		398
4.450% senior notes	750		2030	745		745
4.875% senior notes	900		2033	895		894
6.200% senior notes	1,500		2038	1,485		1,485
5.200% senior notes	500		2040	494		494
4.875% senior notes	500		2040	491		491
3.625% senior notes	375		2042	369		369
3.400% senior notes	500		2046	492		492
3.750% senior notes	1,150		2047	1,138		1,138
4.250% senior notes	750		2049	743		743
3.400% senior notes	700		2049	689		689
5.300% senior notes	1,250		2050	1,232		1,232
5.050% senior notes	1,100		2053	1,083		1,083
Floating-rate senior notes:
Floating-rate senior notes	1,562		2049-2073	1,544		1,545
Debentures:
7.620% debentures	276		2030	280		280
Pound Sterling notes:
5.500% notes	84		2031	83		84
5.125% notes	574		2050	546		550
Euro senior notes:
1.625% senior notes	755		2025	754		774
1.000% senior notes	539		2028	537		551
1.500% senior notes	539		2032	537		551
Canadian senior notes:
2.125% senior notes	554		2024	554		566
Finance lease obligations (see note 10)	460		2024-2046	460		472
Facility notes and bonds	320		2029-2045	320		320
Other debt	3		2024-2025	3		6
Total debt	$	20,191		20,013		22,264
Less: current maturities				(1,164)		(3,348)
Long-term debt				$	18,849	$	18,916

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LEASES (Tables)

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Lease Cost

The components of lease expense for the three months ended March 31, 2024 and 2023 were as follows (in millions):

	2024		2023
Operating lease costs	$	231	$	207
Finance lease costs:
Amortization of assets	35		29
Interest on lease liabilities	5		4
Total finance lease costs	40		33
Variable lease costs	76		72
Short-term lease costs	199		277
Total lease costs(1)	$	546	$	589
(1) This table excludes sublease income as it was not material for the three months ended March 31, 2024 or 2023.

Supplemental cash flow information related to leases is as follows (in millions):

	Three Months Ended  March 31,
	2024		2023
Cash paid for amounts included in measurement of obligations:
Operating cash flows from operating leases	$	227	$	212
Operating cash flows from finance leases	3		1
Financing cash flows from finance leases	26		48
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	151	$	498
Finance leases	$	14	$	30

Supplemental Balance Sheet

Supplemental information related to leases and location within our consolidated balance sheets is as follows (in millions, except lease term and discount rate):

	March 31, 2024			December 31, 2023
Operating Leases:
Operating lease right-of-use assets	$	4,223		$	4,308
Current maturities of operating leases	$	694		$	709
Non-current operating leases	3,690			3,756
Total operating lease obligations	$	4,384		$	4,465
Finance Leases:
Property, plant and equipment, net	$	727		$	856
Current maturities of long-term debt, commercial paper and finance leases	$	108		$	104
Long-term debt and finance leases	352			368
Total finance lease obligations	$	460		$	472
Weighted average remaining lease term (in years):
Operating leases	10.7			10.8
Finance leases	7.2			7.4
Weighted average discount rate:
Operating leases	3.30		%	3.20		%
Finance leases	3.91		%	3.88		%

Operating Leases Maturity Schedule

Maturities of lease obligations as of March 31, 2024 were as follows (in millions):

	Finance Leases		Operating Leases
2024	$	101	$	609
2025	102		807
2026	77		697
2027	47		596
2028	41		449
Thereafter	173		2,102
Total lease payments	541		5,260
Less: Imputed interest	(81)		(876)
Total lease obligations	460		4,384
Less: Current obligations	(108)		(694)
Long-term lease obligations	$	352	$	3,690

Finance Leases Maturity Schedule

Maturities of lease obligations as of March 31, 2024 were as follows (in millions):

	Finance Leases		Operating Leases
2024	$	101	$	609
2025	102		807
2026	77		697
2027	47		596
2028	41		449
Thereafter	173		2,102
Total lease payments	541		5,260
Less: Imputed interest	(81)		(876)
Total lease obligations	460		4,384
Less: Current obligations	(108)		(694)
Long-term lease obligations	$	352	$	3,690

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SHAREOWNERS' EQUITY (Tables)

3 Months Ended

Mar. 31, 2024

Stockholders' Equity Note [Abstract]

Schedule of Stockholders Equity

The following is a rollforward of our common stock, additional paid-in capital, retained earnings and non-controlling interests accounts for the three months ended March 31, 2024 and 2023 (in millions, except per share amounts):

Three Months Ended March 31:	2024			2023
	Shares	Dollars		Shares	Dollars
Class A Common Stock:
Balance at beginning of period	127	$	2	134	$	2
Stock award plans	2	—		3	—
Common stock issuances	—	—		1	—
Conversions of class A to class B common stock	(3)	—		(3)	—
Class A shares issued at end of period	126	$	2	135	$	2
Class B Common Stock:
Balance at beginning of period	726	$	7	725	$	7
Common stock purchases	—	—		(4)	—
Conversions of class A to class B common stock	3	—		3	—
Class B shares issued at end of period	729	$	7	724	$	7
Additional Paid-In Capital:
Balance at beginning of period		$	—		$	—
Stock award plans		(118)			345
Common stock purchases		—			(492)
Common stock issuances		118			147
Balance at end of period		$	—		$	—
Retained Earnings:
Balance at beginning of period		$	21,055		$	21,326
Net income attributable to controlling interests		1,113			1,895
Dividends ($1.63 and $1.62 per share) (1)		(1,414)			(1,453)
Common stock purchases		—			(258)
Other (2)		(73)			—
Balance at end of period		$	20,681		$	21,510
Non-Controlling Interests:
Balance at beginning of period		$	8		$	17
Change in non-controlling interest		16			(2)
Balance at end of period		$	24		$	15
(1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $66 and $105 million as of March 31, 2024 and 2023, respectively, that were settled in shares of class A common stock. (2) Includes adjustments related to certain stock-based awards.

Schedule of Accumulated Other Comprehensive Income (Loss)

The activity in accumulated other comprehensive income (loss) for the three months ended March 31, 2024 and 2023 was as follows (in millions):

Three Months Ended March 31:	2024		2023
Foreign Currency Translation Gain (Loss), Net of Tax:
Balance at beginning of period	$	(1,248)	$	(1,446)
Translation adjustment (net of tax effect of $6 and $(15))	(125)		115
Reclassification to earnings (net of tax effect of $0 and $0)	—		3
Balance at end of period	(1,373)		(1,328)
Unrealized Gain (Loss) on Marketable Securities, Net of Tax:
Balance at beginning of period	(2)		(11)
Current period changes in fair value (net of tax effect of $0 and $1)	(1)		5
Reclassification to earnings (net of tax effect of $0 and $1)	—		2
Balance at end of period	(3)		(4)
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax:
Balance at beginning of period	(76)		167
Current period changes in fair value (net of tax effect of $33 and $(8))	103		(26)
Reclassification to earnings (net of tax effect of $(10) and $(16))	(30)		(51)
Balance at end of period	(3)		90
Unrecognized Pension and Postretirement Benefit Costs, Net of Tax:
Balance at beginning of period	(2,432)		(259)
Reclassification to earnings (net of tax effect of $8 and $7)	30		20
Balance at end of period	(2,402)		(239)
Accumulated other comprehensive income (loss) at end of period	$	(3,781)	$	(1,481)

Gains (Losses) Reclassified from AOCI

Detail of the gains (losses) reclassified from accumulated other comprehensive income (loss) to the statements of consolidated income for the three months ended March 31, 2024 and 2023 is as follows (in millions):

	Amount Reclassified from AOCI(1)				Affected Line Item in the Income Statement
Three Months Ended March 31:	2024		2023
Unrealized Gain (Loss) on Foreign Currency Translation:
Realized gain (loss) on business wind-down	$	—	$	(3)	Other expenses
Income tax (expense) benefit	—		—		Income tax expense
Impact on net income	—		(3)		Net income
Unrealized Gain (Loss) on Marketable Securities:
Realized gain (loss) on sale of securities	—		(3)		Investment income and other
Income tax (expense) benefit	—		1		Income tax expense
Impact on net income	—		(2)		Net income
Unrealized Gain (Loss) on Cash Flow Hedges:
Interest rate contracts	(1)		(1)		Interest expense
Foreign currency exchange contracts	41		68		Revenue
Income tax (expense) benefit	(10)		(16)		Income tax expense
Impact on net income	30		51		Net income
Unrecognized Pension and Postretirement Benefit Costs:
Prior service costs	(38)		(27)		Investment income and other
Income tax (expense) benefit	8		7		Income tax expense
Impact on net income	(30)		(20)		Net income
Total amount reclassified for the period	$	—	$	26	Net income
(1) Accumulated other comprehensive income (loss)

Activity in Deferred Compensation Program

Activity in the deferred compensation program for the three months ended March 31, 2024 and 2023 was as follows (in millions):

	2024			2023
Three Months Ended March 31:	Shares	Dollars		Shares	Dollars
Deferred Compensation Obligations:
Balance at beginning of period		$	9		$	13
Reinvested dividends		—			—
Benefit payments		(3)			(4)
Balance at end of period		$	6		$	9
Treasury Stock:
Balance at beginning of period	—	$	(9)	—	$	(13)
Reinvested dividends	—	—		—	—
Benefit payments	—	3		—	4
Balance at end of period	—	$	(6)	—	$	(9)

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SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Results of Operations

Results of operations for the three months ended March 31, 2024 and 2023 were as follows (in millions):

	Three Months Ended  March 31,
	2024		2023
Revenue:
U.S. Domestic Package	$	14,234	$	14,987
International Package	4,256		4,543
Supply Chain Solutions	3,216		3,395
Consolidated revenue	$	21,706	$	22,925
Operating Profit:
U.S. Domestic Package	$	825	$	1,466
International Package	656		828
Supply Chain Solutions	132		247
Consolidated operating profit	$	1,613	$	2,541

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 (in millions, except per share amounts):

	Three Months Ended  March 31,
	2024		2023
Numerator:
Net income attributable to common shareowners	$	1,113	$	1,895
Denominator:
Weighted-average shares	853		858
Vested portion of restricted shares	3		4
Denominator for basic earnings per share	856		862
Effect of dilutive securities:
Restricted performance units	—		2
Stock options	1		1
Denominator for diluted earnings per share	857		865
Basic earnings per share(1)	$	1.30	$	2.20
Diluted earnings per share(1)	$	1.30	$	2.19

(1)    Earnings per share is computed using unrounded amounts.

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DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables)

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

As of March 31, 2024 and December 31, 2023, the notional amounts of our outstanding derivative positions were as follows (in millions):

		March 31, 2024	December 31, 2023
Currency hedges:
Euro	EUR	4,381	4,408
British Pound Sterling	GBP	716	663
Canadian Dollar	CAD	1,725	1,550
Hong Kong Dollar	HKD	3,715	1,822

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table indicates the location in the consolidated balance sheets where our derivative assets and liabilities have been recognized, the fair value hierarchy level applicable to each derivative type and the related fair values of those derivatives.

We have master netting arrangements with substantially all of our counterparties giving us the right of offset for our derivative positions. However, we have not elected to offset the fair value positions of our derivative contracts recorded in the consolidated balance sheets. The columns labeled Net Amounts if Right of Offset had been Applied indicate the potential net fair value positions by type of contract and location in the consolidated balance sheets had we elected to apply the right of offset as of March 31, 2024 and December 31, 2023 (in millions):

		Fair Value Hierarchy Level	Gross Amounts Presented in Consolidated Balance Sheets				Net Amounts if Right of Offset had been Applied
Asset Derivatives	Balance Sheet Location		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedges:
Foreign currency exchange contracts	Other current assets	Level 2	$	123	$	95	$	113	$	73
Foreign currency exchange contracts	Other non-current assets	Level 2	72		63		49		19
Derivatives not designated as hedges:
Foreign currency exchange contracts	Other current assets	Level 2	—		—		—		—
Total Asset Derivatives			$	195	$	158	$	162	$	92

		Fair Value Hierarchy Level	Gross Amounts Presented in Consolidated Balance Sheets				Net Amounts if Right of Offset had been Applied
Liability Derivatives	Balance Sheet Location		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedges:
Foreign currency exchange contracts	Other current liabilities	Level 2	$	11	$	26	$	1	$	4
Foreign currency exchange contracts	Other non-current liabilities	Level 2	23		65		—		21
Derivatives not designated as hedges:
Foreign currency exchange contracts	Other non-current liabilities	Level 2	—		1		—		1
Total Liability Derivatives			$	34	$	92	$	1	$	26

The following table indicates the amounts that were recorded in the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of March 31, 2024 and December 31, 2023 (in millions):

Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included	Carrying Amount of Hedged Liabilities		Cumulative Amount of Fair Value Hedge Adjustments		Carrying Amount of Hedged Liabilities		Cumulative Amount  of Fair Value Hedge Adjustments
	March 31, 2024		March 31, 2024		December 31, 2023		December 31, 2023
Long-term debt and finance leases	$	280	$	4	$	280	$	4

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

The following table indicates the amount of gains (losses) that have been recognized in the statements of consolidated income for fair value and cash flow hedges, as well as the associated gain (loss) for the underlying hedged item for fair value hedges for the three months ended March 31, 2024 and 2023 (in millions):

	Three Months Ended March 31,
Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships	2024						2023
	Revenue		Interest Expense		Investment Income and Other		Revenue		Interest Expense		Investment Income and Other
Gain or (loss) on cash flow hedging relationships:
Interest Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income	—		(1)		—		—		(1)		—
Foreign Currency Exchange Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income	41		—		—		68		—		—
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	$	41	$	(1)	$	—	$	68	$	(1)	$	—

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

The following table indicates the amount of gains (losses) that have been recognized in AOCI for the three months ended March 31, 2024 and 2023 for those derivatives designated as cash flow hedges (in millions):

Three Months Ended March 31:
Derivative Instruments in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives
	2024		2023
Foreign currency exchange contracts	136		(34)
Total	$	136	$	(34)

Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss)

The following table indicates the amount of gains (losses) that have been recognized in AOCI within foreign currency translation adjustment for the three months ended March 31, 2024 and 2023 for those instruments designated as net investment hedges (in millions):

Three Months Ended March 31:
Non-derivative Instruments in Net Investment Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Debt
	2024		2023
Foreign currency denominated debt	$	66	$	(73)
Total	$	66	$	(73)

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

Amounts recorded in the statements of consolidated income related to fair value changes and settlements of foreign currency forward contracts not designated as hedges for the three months ended March 31, 2024 and 2023 (in millions) were as follows:

Derivative Instruments Not Designated in Hedging Relationships	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		2024		2023
Three Months Ended March 31:
Foreign currency exchange contracts	Investment income and other	$	(5)	$	4
Total		$	(5)	$	4

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TRANSFORMATION COSTS (Tables)

3 Months Ended

Mar. 31, 2024

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

The table below presents transformation costs for the three months ended March 31, 2024 and 2023 (in millions):

	Three Months Ended  March 31,
	2024		2023
Transformation Costs:
Compensation and benefits	$	31	$	(12)
Other expenses	15		15
Total Transformation Costs	$	46	$	3
Income Tax Benefit from Transformation Costs	(11)		—
After-Tax Transformation Costs	$	35	$	3

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BASIS OF PRESENTATION AND ACCOUNTING POLICIES (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Supplier finance program, obligation, sold to financial institutions	$ 406	$ 504
Restricted cash	$ 93	$ 37

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REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue
Revenue	$ 21,706	$ 22,925
U.S. Domestic Package
Disaggregation of Revenue
Revenue	14,234	14,987
International Package
Disaggregation of Revenue
Revenue	4,256	4,543
Supply Chain Solutions
Disaggregation of Revenue
Revenue	3,216	3,395
Supply Chain Solutions | Operating Segments
Disaggregation of Revenue
Revenue	3,216	3,395
U.S | U.S. Domestic Package | Operating Segments
Disaggregation of Revenue
Revenue	14,234	14,987
International | International Package | Operating Segments
Disaggregation of Revenue
Revenue	4,256	4,543
Next Day Air | U.S
Disaggregation of Revenue
Revenue	2,316	2,461
Deferred | U.S
Disaggregation of Revenue
Revenue	1,156	1,194
Ground | U.S
Disaggregation of Revenue
Revenue	10,762	11,332
Domestic | International
Disaggregation of Revenue
Revenue	758	794
Export | International
Disaggregation of Revenue
Revenue	3,350	3,552
Cargo & Other | International
Disaggregation of Revenue
Revenue	148	197
Forwarding
Disaggregation of Revenue
Revenue	1,280	1,514
Logistics
Disaggregation of Revenue
Revenue	1,542	1,410
Other
Disaggregation of Revenue
Revenue	$ 394	$ 471

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REVENUE RECOGNITION - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Contract Assets:
Revenue related to in-transit packages	$ 269	$ 237
Contract Liabilities:
Short-term advance payments from customers	13	20
Long-term advance payments from customers	$ 26	$ 25

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REVENUE RECOGNITION - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Allowance for credit loss	$ 144		$ 126
Provisions for doubtful receivables	$ 73	$ 43

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STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Mar. 20, 2024	Mar. 31, 2024	Mar. 31, 2023
Stockholders Equity Note [Line Items]
Stock compensation expense		$ (27)	$ 126
Long-Term Incentive Performance Award
Stockholders Equity Note [Line Items]
Award vesting period		3 years
Long-Term Incentive Performance Award | Restricted performance units
Stockholders Equity Note [Line Items]
Weighted-average fair value of options granted (in dollars per share)	$ 158.16
Nonqualified Stock Options
Stockholders Equity Note [Line Items]
Award vesting period		5 years
Weighted-average fair value of options granted (in dollars per share)	$ 154.76
Expiration period		10 years
Stock options granted (in shares)	200,000
Nonqualified Stock Options | Tranche One
Stockholders Equity Note [Line Items]
Percentage of the award vesting at each anniversary date of the grant		20.00%
Nonqualified Stock Options | Tranche Two
Stockholders Equity Note [Line Items]
Percentage of the award vesting at each anniversary date of the grant		20.00%
Nonqualified Stock Options | Tranche Three
Stockholders Equity Note [Line Items]
Percentage of the award vesting at each anniversary date of the grant		20.00%
Nonqualified Stock Options | Tranche Four
Stockholders Equity Note [Line Items]
Percentage of the award vesting at each anniversary date of the grant		20.00%
Nonqualified Stock Options | Tranche Five
Stockholders Equity Note [Line Items]
Percentage of the award vesting at each anniversary date of the grant		20.00%

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STOCK-BASED COMPENSATION - Weighted-Average Assumptions and Fair Values Used of Performance Units Granted (Details) - Long-Term Incentive Performance Award - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stockholders Equity Note [Line Items]
Risk-free interest rate	4.45%	3.81%
Expected volatility	27.00%	30.30%
Weighted-average fair value of units granted (in dollars per share)	$ 158.16	$ 200.01
Share payout	102.20%	107.80%

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STOCK-BASED COMPENSATION - Fair Value of Employee Stock Options Granted as Determined by Black-Scholes Valuation Model Assumptions (Details) - Nonqualified Stock Options - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stockholders Equity Note [Line Items]
Expected dividend yield	3.96%	3.54%
Risk-free interest rate	4.25%	3.70%
Expected life (in years)	6 years 1 month 17 days	5 years 11 months 4 days
Expected volatility	28.94%	28.31%
Weighted-average fair value of options granted (in dollars per share)	$ 34.76	$ 41.08

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MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS - Summary of Marketable Securities (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Trading Marketable Securities
Cost	$ 3	$ 4
Estimated Fair Value	3	4
Available-for-Sale Marketable Securities
Cost	232	2,864
Estimated Fair Value	229	2,862
Current Marketable Securities
Cost	235	2,868
Unrealized Gains	0	6
Unrealized Losses	(3)	(8)
Estimated Fair Value	232	2,866
U.S. government and agency debt securities
Available-for-Sale Marketable Securities
Cost	200	963
Estimated Fair Value	198	961
Current Marketable Securities
Unrealized Gains	0	2
Unrealized Losses	(2)	(4)
Mortgage and asset-backed debt securities
Available-for-Sale Marketable Securities
Cost	0	3
Estimated Fair Value	0	3
Current Marketable Securities
Unrealized Gains	0	0
Unrealized Losses	0	0
Corporate debt securities
Available-for-Sale Marketable Securities
Cost	32	1,891
Estimated Fair Value	31	1,891
Current Marketable Securities
Unrealized Gains	0	4
Unrealized Losses	(1)	(4)
Non-U.S. government debt securities
Available-for-Sale Marketable Securities
Cost	0	7
Estimated Fair Value	0	7
Current Marketable Securities
Unrealized Gains	0	0
Unrealized Losses	$ 0	$ 0

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MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Gain (Loss) on Securities [Line Items]
Equity method investments	$ 293	$ 295
Equity securities without readily determinable fair value, amount	47	47
Variable life insurance policy
Gain (Loss) on Securities [Line Items]
Restricted cash and investments, noncurrent	$ 19	$ 19

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MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS - Amortized Cost and Estimated Fair Value of Marketable Securities by Contractual Maturity (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Cost
Due in one year or less	$ 70
Due after one year through three years	162
Due after three years through five years	0
Due after five years	0
Amortized cost	232
Equity securities	3
Cost	235
Estimated Fair Value
Due in one year or less	69
Due after one year through three years	160
Due after three years through five years	0
Due after five years	0
Debt securities	229
Equity securities	3
Marketable securities	$ 232	$ 2,866

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MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS - Investments Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 251	$ 2,885
Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	232	2,866
Marketable securities | U.S. government and agency debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	198	961
Marketable securities | Mortgage and asset-backed debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	3
Marketable securities | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	31	1,891
Marketable securities | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	3	4
Marketable securities | Non-U.S. government debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	7
Other non-current investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	19	19
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	198	961
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	198	961
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | U.S. government and agency debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	198	961
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Mortgage and asset-backed debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Non-U.S. government debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other non-current investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	53	1,924
Significant Other Observable Inputs (Level 2) | Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	34	1,905
Significant Other Observable Inputs (Level 2) | Marketable securities | U.S. government and agency debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant Other Observable Inputs (Level 2) | Marketable securities | Mortgage and asset-backed debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	3
Significant Other Observable Inputs (Level 2) | Marketable securities | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	31	1,891
Significant Other Observable Inputs (Level 2) | Marketable securities | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	3	4
Significant Other Observable Inputs (Level 2) | Marketable securities | Non-U.S. government debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	7
Significant Other Observable Inputs (Level 2) | Other non-current investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	19	19
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant Unobservable Inputs (Level 3) | Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant Unobservable Inputs (Level 3) | Marketable securities | U.S. government and agency debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant Unobservable Inputs (Level 3) | Marketable securities | Mortgage and asset-backed debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant Unobservable Inputs (Level 3) | Marketable securities | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant Unobservable Inputs (Level 3) | Marketable securities | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant Unobservable Inputs (Level 3) | Marketable securities | Non-U.S. government debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant Unobservable Inputs (Level 3) | Other non-current investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 0	$ 0

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PROPERTY, PLANT AND EQUIPMENT - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property, plant and equipment and finance lease right-of-use asset, gross	$ 72,213	$ 71,515
Less: Accumulated depreciation and amortization	(35,045)	(34,570)
Property, Plant and Equipment, Net	37,168	36,945
Vehicles
Property, Plant and Equipment [Line Items]
Property, plant and equipment and finance lease right-of-use asset, gross	11,970	11,768
Aircraft
Property, Plant and Equipment [Line Items]
Property, plant and equipment and finance lease right-of-use asset, gross	23,117	22,888
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment and finance lease right-of-use asset, gross	2,129	2,138
Buildings
Property, Plant and Equipment [Line Items]
Property, plant and equipment and finance lease right-of-use asset, gross	6,282	6,255
Building and leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment and finance lease right-of-use asset, gross	5,295	5,241
Plant equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment and finance lease right-of-use asset, gross	18,109	17,322
Technology equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment and finance lease right-of-use asset, gross	2,677	2,656
Construction-in-progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment and finance lease right-of-use asset, gross	$ 2,634	$ 3,247

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PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Abstract]
Property, plant and equipment purchased on account	$ 204	$ 309

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EMPLOYEE BENEFIT PLANS - Net Periodic Benefit Cost for Pension and Postretirement Benefit Plans (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Defined Benefit Pension Plan | U.S. Pension Benefits
Net Periodic Cost:
Service cost	$ 310	$ 293
Interest cost	644	627
Expected return on assets	(771)	(742)
Amortization of prior service cost	38	27
Net periodic benefit cost	221	205
Defined Benefit Pension Plan | International Pension Benefits
Net Periodic Cost:
Service cost	11	11
Interest cost	17	17
Expected return on assets	(21)	(21)
Amortization of prior service cost	0	0
Net periodic benefit cost	7	7
U.S. Postretirement Medical Benefits | U.S. Pension Benefits
Net Periodic Cost:
Service cost	5	5
Interest cost	27	29
Expected return on assets	(1)	(3)
Amortization of prior service cost	0	0
Net periodic benefit cost	$ 31	$ 31

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EMPLOYEE BENEFIT PLANS - Additional Information (Details) $ in Millions	1 Months Ended	3 Months Ended
	Jan. 31, 2023 USD ($)	Mar. 31, 2024 USD ($) employee	Dec. 31, 2023 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Multiemployer plans, payment term		39 years
Central States Pension Fund
Defined Benefit Plan Disclosure [Line Items]
Government assistance, amount	$ 35,800
National Master Agreement and Various Supplemental Agreements
Defined Benefit Plan Disclosure [Line Items]
Number of employees covered | employee		310,000
Teamsters
Defined Benefit Plan Disclosure [Line Items]
Number of employees covered | employee		10,000
Independent Pilots Association
Defined Benefit Plan Disclosure [Line Items]
Number of employees covered | employee		3,300
Teamsters Local 2727
Defined Benefit Plan Disclosure [Line Items]
Number of employees covered | employee		1,900
International Association Of Machinists And Aerospace Workers
Defined Benefit Plan Disclosure [Line Items]
Number of employees covered | employee		3,000
Defined Benefit Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Multi-employer plans, withdrawal obligation, fair value		$ 685	$ 710
Defined Benefit Pension Plan | Long term debt
Defined Benefit Plan Disclosure [Line Items]
Multiemployer plans, withdrawal obligation, present value		811	813
Defined Benefit Pension Plan | Other current liabilities
Defined Benefit Plan Disclosure [Line Items]
Multiemployer plans, withdrawal obligation, present value		9	$ 9
Defined Benefit Pension Plan | U.S. Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Amount contributed to company- sponsored benefit plans		19
U.S. Postretirement Medical Benefits | U.S. Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Amount contributed to company- sponsored benefit plans		31
Estimated future employer contributions to defined benefit plan, current fiscal year		$ 87

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GOODWILL AND INTANGIBLE ASSETS - Allocation of Goodwill by Reportable Segment (Details) $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 4,872
Acquired	8
Currency / Other	(34)
Ending balance	4,846
U.S. Domestic Package
Goodwill [Roll Forward]
Beginning balance	847
Acquired	0
Currency / Other	0
Ending balance	847
International Package
Goodwill [Roll Forward]
Beginning balance	503
Acquired	0
Currency / Other	(7)
Ending balance	496
Supply Chain Solutions
Goodwill [Roll Forward]
Beginning balance	3,522
Acquired	8
Currency / Other	(27)
Ending balance	$ 3,503

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GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Goodwill, purchase accounting adjustments	$ 8,000,000
Goodwill	4,846,000,000		$ 4,872,000,000
Indefinite-lived intangible assets	93,000,000		$ 93,000,000
Impairment of finite lived intangible assets	48,000,000	$ 0
Impairment of finite lived intangible assets, after tax	$ 35,000,000
Goodwill impairment effect on earnings per share (in dollars per share)	$ 0.04
Capitalized software
Finite-Lived Intangible Assets [Line Items]
Impairment of finite lived intangible assets	$ 7,000,000
Trade name
Finite-Lived Intangible Assets [Line Items]
Impairment of finite lived intangible assets	41,000,000
Trade name
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	89,000,000
Licenses
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	4,000,000
Global Freight Forwarding, Coyote and Roadie
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 1,500,000,000

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GOODWILL AND INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 7,903	$ 7,767
Accumulated Amortization	(4,688)	(4,555)
Net Carrying Value	3,215	3,212
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract]
Indefinite-lived intangible assets	93	93
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Gross Carrying Amount	7,996	7,860
Accumulated Amortization	(4,688)	(4,555)
Intangible Assets, Net	3,308	3,305
Capitalized software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	5,923	5,839
Accumulated Amortization	(4,007)	(3,900)
Net Carrying Value	1,916	1,939
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	(4,007)	(3,900)
Licenses
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	45	30
Accumulated Amortization	(13)	(7)
Net Carrying Value	32	23
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	(13)	(7)
Franchise rights
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	332	291
Accumulated Amortization	(48)	(49)
Net Carrying Value	284	242
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	(48)	(49)
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,114	1,115
Accumulated Amortization	(537)	(516)
Net Carrying Value	577	599
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	(537)	(516)
Trade name
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	112	172
Accumulated Amortization	(19)	(30)
Net Carrying Value	93	142
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	(19)	(30)
Trademarks, patents and other
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	377	320
Accumulated Amortization	(64)	(53)
Net Carrying Value	313	267
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	$ (64)	$ (53)

XML

DEBT AND FINANCING ARRANGEMENTS - Carrying Value of Outstanding Debt (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Principal amount	$ 20,191,000,000
Finance lease obligations (see note 10)	460,000,000	$ 472,000,000
Total debt	20,013,000,000	22,264,000,000
Less: current maturities	(1,164,000,000)	(3,348,000,000)
Long-term debt	$ 18,849,000,000	18,916,000,000
Senior notes | 2.800% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	2.80%
Principal amount	$ 500,000,000
Long-term debt	$ 500,000,000	499,000,000
Senior notes | 2.200% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	2.20%
Principal amount	$ 400,000,000
Long-term debt	$ 400,000,000	400,000,000
Senior notes | 3.900% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	3.90%
Principal amount	$ 1,000,000,000
Long-term debt	$ 999,000,000	999,000,000
Senior notes | 2.400% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	2.40%
Principal amount	$ 500,000,000
Long-term debt	$ 499,000,000	499,000,000
Senior notes | 3.050% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	3.05%
Principal amount	$ 1,000,000,000
Long-term debt	$ 996,000,000	996,000,000
Senior notes | 3.400% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	3.40%
Principal amount	$ 750,000,000
Long-term debt	$ 747,000,000	747,000,000
Senior notes | 2.500% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	2.50%
Principal amount	$ 400,000,000
Long-term debt	$ 398,000,000	398,000,000
Senior notes | 4.450% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	4.45%
Principal amount	$ 750,000,000
Long-term debt	$ 745,000,000	745,000,000
Senior notes | 4.875% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	4.875%
Principal amount	$ 900,000,000
Long-term debt	$ 895,000,000	894,000,000
Senior notes | 6.200% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	6.20%
Principal amount	$ 1,500,000,000
Long-term debt	$ 1,485,000,000	1,485,000,000
Senior notes | 5.200% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	5.20%
Principal amount	$ 500,000,000
Long-term debt	$ 494,000,000	494,000,000
Senior notes | 4.875% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	4.875%
Principal amount	$ 500,000,000
Long-term debt	$ 491,000,000	491,000,000
Senior notes | 3.625% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	3.625%
Principal amount	$ 375,000,000
Long-term debt	$ 369,000,000	369,000,000
Senior notes | 3.400% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	3.40%
Principal amount	$ 500,000,000
Long-term debt	$ 492,000,000	492,000,000
Senior notes | 3.750% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	3.75%
Principal amount	$ 1,150,000,000
Long-term debt	$ 1,138,000,000	1,138,000,000
Senior notes | 4.250% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	4.25%
Principal amount	$ 750,000,000
Long-term debt	$ 743,000,000	743,000,000
Senior notes | 3.400% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	3.40%
Principal amount	$ 700,000,000
Long-term debt	$ 689,000,000	689,000,000
Senior notes | 5.300% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	5.30%
Principal amount	$ 1,250,000,000
Long-term debt	$ 1,232,000,000	1,232,000,000
Senior notes | 5.050% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	5.05%
Principal amount	$ 1,100,000,000
Long-term debt	1,083,000,000	1,083,000,000
Senior notes | Floating-rate senior notes
Debt Instrument [Line Items]
Principal amount	1,562,000,000
Long-term debt	$ 1,544,000,000	1,545,000,000
Senior notes | 7.620% debentures
Debt Instrument [Line Items]
Debt instrument, stated interest rate	7.62%
Principal amount	$ 276,000,000
Long-term debt	$ 280,000,000	280,000,000
Pound Sterling notes | 5.500% notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	5.50%
Principal amount	$ 84,000,000
Long-term debt	$ 83,000,000	84,000,000
Pound Sterling notes | 5.125% notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	5.125%
Principal amount	$ 574,000,000
Long-term debt	$ 546,000,000	550,000,000
Euro Senior Notes | 1.625% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	1.625%
Principal amount	$ 755,000,000
Long-term debt	$ 754,000,000	774,000,000
Euro Senior Notes | 1.000% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	1.00%
Principal amount	$ 539,000,000
Long-term debt	$ 537,000,000	551,000,000
Euro Senior Notes | 1.500% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	1.50%
Principal amount	$ 539,000,000
Long-term debt	$ 537,000,000	551,000,000
Canadian Senior Notes | 2.125% senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	2.125%
Principal amount	$ 554,000,000
Long-term debt	554,000,000	566,000,000
Facility notes and bonds
Debt Instrument [Line Items]
Principal amount	320,000,000
Long-term debt	320,000,000	320,000,000
Other debt
Debt Instrument [Line Items]
Principal amount	3,000,000
Long-term debt	3,000,000	6,000,000
Commercial Paper
Debt Instrument [Line Items]
Principal amount	0
Short-term debt	$ 0	$ 2,172,000,000

XML

DEBT AND FINANCING ARRANGEMENTS - Additional Information (Details) € in Billions	3 Months Ended
	Mar. 31, 2024 USD ($) credit_agreement	Mar. 31, 2024 EUR (€) credit_agreement	Dec. 31, 2023 USD ($)
Debt Instrument [Line Items]
Principal amount	$ 20,191,000,000
Number of credit agreements | credit_agreement	2	2
Covenants limit, amount of secured indebtedness and debt in sale-leaseback transactions, percentage of net tangible assets	10.00%	10.00%
Tangible capital, actual	$ 4,500,000,000
Secured debt outstanding	0
Sale-lease back outstanding	0
Significant Other Observable Inputs (Level 2)
Debt Instrument [Line Items]
Long-term debt fair value	19,400,000,000		$ 22,100,000,000
Commercial Paper
Debt Instrument [Line Items]
Short-term debt	0		$ 2,172,000,000
Principal amount	0
U.S. Commercial Paper Program | Commercial Paper
Debt Instrument [Line Items]
Commercial paper program, authorized to borrow	10,000,000,000.0
Short-term debt	$ 0
Foreign Commercial Paper Program | Commercial Paper
Debt Instrument [Line Items]
Commercial paper program, authorized to borrow | €		€ 5.0
2.200% senior notes | Senior notes
Debt Instrument [Line Items]
Debt instrument, stated interest rate	2.20%	2.20%
Principal amount	$ 400,000,000
Revolving Credit Facility Expiring In 2023
Debt Instrument [Line Items]
Revolving credit facilities	1,000,000,000
Amounts outstanding	$ 0
Revolving Credit Facility Expiring In 2023 | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Basis spread on variable rate	0.10%
Revolving Credit Facility Expiring In 2023 | Aplicable Margin
Debt Instrument [Line Items]
Basis spread on variable rate	0.70%
Revolving Credit Facility Expiring In 2023 | Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Revolving Credit Facility Expiring In 2023 | Adjusted Term Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Revolving Credit Facility Expiring In 2026
Debt Instrument [Line Items]
Revolving credit facilities	$ 2,000,000,000
Amounts outstanding	$ 0
Revolving Credit Facility Expiring In 2026 | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Basis spread on variable rate	0.10%
Revolving Credit Facility Expiring In 2026 | Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Revolving Credit Facility Expiring In 2026 | Adjusted Term Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%
Revolving Credit Facility Expiring In 2026 | Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.875%

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LEASES - Lease Cost (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Leases [Abstract]
Operating lease costs	$ 231	$ 207
Finance lease costs:
Amortization of assets	35	29
Interest on lease liabilities	5	4
Total finance lease costs	40	33
Variable lease costs	76	72
Short-term lease costs	199	277
Total lease costs	$ 546	$ 589

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LEASES - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Leases [Abstract]
Operating lease, impairment loss	$ 0	$ 0
Finance lease, impairment loss	0	$ 0
Lessee, finance lease and operating lease, lease not yet commenced, amount	$ 720,000,000

XML

LEASES - Supplemental Balance Sheet (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Operating Leases:
Operating lease right-of-use assets	$ 4,223,000,000	$ 4,308,000,000
Current maturities of operating leases	694,000,000	709,000,000
Non-current operating leases	3,690,000,000	3,756,000,000
Total lease obligations	4,384,000,000	4,465,000,000
Finance Leases:
Property, plant and equipment, net	727,000,000	856,000,000
Current maturities of long-term debt, commercial paper and finance leases	$ 108,000,000	$ 104,000,000
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Current maturities of long-term debt, commercial paper and finance leases	Current maturities of long-term debt, commercial paper and finance leases
Long-term debt and finance leases	$ 352,000,000	$ 368,000,000
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Long-term debt	Long-term debt
Total lease obligations	$ 460,000,000	$ 472,000,000
Weighted average remaining lease term (in years):
Operating leases	10 years 8 months 12 days	10 years 9 months 18 days
Finance leases	7 years 2 months 12 days	7 years 4 months 24 days
Weighted average discount rate:
Operating leases	3.30%	3.20%
Finance leases	3.91%	3.88%

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LEASES - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash paid for amounts included in measurement of obligations:
Operating cash flows from operating leases	$ 227	$ 212
Operating cash flows from finance leases	3	1
Financing cash flows from finance leases	26	48
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	151	498
Finance leases	$ 14	$ 30

XML

LEASES - Maturity Schedule After Adoption (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Finance Leases
2024	$ 101,000,000
2025	102,000,000
2026	77,000,000
2027	47,000,000
2028	41,000,000
Thereafter	173,000,000
Total lease payments	541,000,000
Less: Imputed interest	(81,000,000)
Total lease obligations	460,000,000	$ 472,000,000
Less: Current obligations	(108,000,000)	(104,000,000)
Long-term lease obligations	352,000,000	368,000,000
Operating Leases
2024	609,000,000
2025	807,000,000
2026	697,000,000
2027	596,000,000
2028	449,000,000
Thereafter	2,102,000,000
Total lease payments	5,260,000,000
Less: Imputed interest	(876,000,000)
Total lease obligations	4,384,000,000	4,465,000,000
Less: Current obligations	(694,000,000)	(709,000,000)
Long-term lease obligations	$ 3,690,000,000	$ 3,756,000,000

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LEGAL PROCEEDINGS AND CONTINGENCIES (Details)	1 Months Ended
	Aug. 31, 2016 defendant
CNMC
Loss Contingencies
Number of defendants	10

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SHAREOWNERS' EQUITY - Additional Information (Details) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($) class vote $ / shares shares	Mar. 31, 2023 USD ($) shares	Jan. 31, 2023 USD ($)	Aug. 31, 2021 USD ($)
Stockholders Equity Note [Line Items]
Classes of common stock | class	2
Preferred stock, authorized (in shares)	200,000,000
Preferred stock, par value (in dollars per share) | $ / shares	$ 0.01
Preferred stock, issued (in shares)	0
Common stock purchases (in shares)	0	4,100,000
Common stock, repurchased, value | $		$ 750
August 2021 Share Repurchase Program
Stockholders Equity Note [Line Items]
Common stock purchases (in shares)		500,000
Common stock, repurchased, value | $		$ 82
Common stock authorized for purchase, amount | $				$ 5,000
January 2023 Share Repurchase Program
Stockholders Equity Note [Line Items]
Common stock purchases (in shares)		3,600,000
Common stock, repurchased, value | $		$ 668
Common stock authorized for purchase, amount | $			$ 5,000
Share repurchase authorization available | $	$ 2,800
Class A common stock
Stockholders Equity Note [Line Items]
Votes per common share | vote	10
Common stock, par value (in dollars per share) | $ / shares	$ 0.01
Common stock, authorized (in shares)	4,600,000,000
Class B common stock
Stockholders Equity Note [Line Items]
Votes per common share | vote	1
Common stock, par value (in dollars per share) | $ / shares	$ 0.01
Common stock, authorized (in shares)	5,600,000,000

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SHAREOWNERS' EQUITY - Roll-forward of Common Stock, Additional Paid-in Capital, Retained Earnings Accounts and Noncontrolling Interest (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stockholders Equity Note [Roll Forward]
Balance at beginning of period	$ 17,314
Common stock purchases (in shares)	0	(4,100,000)
Common stock purchases		$ (750)
Net income attributable to common shareowners	$ 1,113	$ 1,895
Balance at end of period	$ 16,933
Common stock, cash paid for dividends (in dollars per share)	$ 1.63	$ 1.62
Dividends, common stock	$ 66	$ 105
Class A common stock
Stockholders Equity Note [Roll Forward]
Balance at beginning of period (in shares)	127,000,000
Balance at end of period (in shares)	126,000,000
Class B common stock
Stockholders Equity Note [Roll Forward]
Balance at beginning of period (in shares)	726,000,000
Balance at end of period (in shares)	729,000,000
Common Stock | Class A common stock
Stockholders Equity Note [Roll Forward]
Balance at beginning of period (in shares)	127,000,000	134,000,000
Balance at beginning of period	$ 2	$ 2
Stock award plans (in shares)	2,000,000	3,000,000
Stock award plans	$ 0	$ 0
Common stock issuances (in shares)	0	1,000,000
Common stock issuances	$ 0	$ 0
Conversions of Class A to Class B common stock (in shares)	(3,000,000)	(3,000,000)
Conversions of class A to class B common stock	$ 0	$ 0
Balance at end of period (in shares)	126,000,000	135,000,000
Balance at end of period	$ 2	$ 2
Common Stock | Class B common stock
Stockholders Equity Note [Roll Forward]
Balance at beginning of period (in shares)	726,000,000	725,000,000
Balance at beginning of period	$ 7	$ 7
Common stock purchases (in shares)	0	(4,000,000)
Common stock purchases	$ 0	$ 0
Conversions of Class A to Class B common stock (in shares)	(3,000,000)	(3,000,000)
Conversions of class A to class B common stock	$ 0	$ 0
Balance at end of period (in shares)	729,000,000	724,000,000
Balance at end of period	$ 7	$ 7
Additional Paid-In Capital
Stockholders Equity Note [Roll Forward]
Balance at beginning of period	0	0
Stock award plans	(118)	345
Common stock issuances	118	147
Common stock purchases	0	(492)
Balance at end of period	0	0
Retained Earnings
Stockholders Equity Note [Roll Forward]
Balance at beginning of period	21,055	21,326
Common stock purchases	0	(258)
Net income attributable to common shareowners	1,113	1,895
Dividends	(1,414)	(1,453)
Other (2)	(73)	0
Balance at end of period	20,681	21,510
Non-Controlling Interests
Stockholders Equity Note [Roll Forward]
Balance at beginning of period	8	17
Change in non-controlling interest	16	(2)
Balance at end of period	$ 24	$ 15

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SHAREOWNERS' EQUITY - Activity in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	$ 17,314
Balance at end of period	16,933
Accumulated other comprehensive income (loss)
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at end of period	(3,781)	$ (1,481)
Foreign currency translation gain (loss)
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	(1,248)	(1,446)
Translation adjustment	(125)	115
Reclassification to earnings	0	3
Balance at end of period	(1,373)	(1,328)
Translation adjustment, tax effect	6	(15)
Reclassification to earnings, tax effect	0	0
Unrealized gain (loss) on marketable securities
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	(2)	(11)
Current period changes in fair value	(1)	5
Reclassification to earnings	0	2
Balance at end of period	(3)	(4)
Current period changes in fair value, tax effect	0	1
Reclassification to earnings, tax effect	0	1
Unrealized gain (loss) on cash flow hedges
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	(76)	167
Current period changes in fair value	103	(26)
Reclassification to earnings	(30)	(51)
Balance at end of period	(3)	90
Current period changes in fair value, tax effect	33	(8)
Reclassification to earnings, tax effect	(10)	(16)
Unrecognized pension and postretirement benefit costs
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at beginning of period	(2,432)	(259)
Reclassification to earnings	30	20
Balance at end of period	(2,402)	(239)
Reclassification to earnings, tax effect	$ 8	$ 7

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SHAREOWNERS' EQUITY - Gains (Losses) Reclassified from AOCI (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other expenses	$ (1,968)	$ (1,998)
Investment income and other	118	169
Interest expense	(195)	(188)
Revenue	21,706	22,925
Income tax (expense) benefit	(423)	(627)
Net income	1,113	1,895
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income	0	26
Foreign currency translation gain (loss) | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other expenses	0	(3)
Income tax (expense) benefit	0	0
Net income	0	(3)
Unrealized gain (loss) on marketable securities | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment income and other	0	(3)
Income tax (expense) benefit	0	1
Net income	0	(2)
Unrealized gain (loss) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense	(1)	(1)
Revenue	41	68
Income tax (expense) benefit	(10)	(16)
Net income	30	51
Unrecognized pension and postretirement benefit costs | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax (expense) benefit	8	7
Net income	(30)	(20)
Prior service costs | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment income and other	$ (38)	$ (27)

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SHAREOWNERS' EQUITY - Activity in Deferred Compensation Program (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stockholders Equity Note [Roll Forward]
Balance at beginning of period (in shares)	0.2
Balance at beginning of period	$ 17,306
Balance at end of period (in shares)	0.1
Balance at end of period	$ 16,909
Deferred Compensation Obligations
Stockholders Equity Note [Roll Forward]
Balance at beginning of period	9	$ 13
Reinvested dividends	0	0
Benefit payments	(3)	(4)
Balance at end of period	$ 6	$ 9
Treasury Stock
Stockholders Equity Note [Roll Forward]
Balance at beginning of period (in shares)	0.0	0.0
Balance at beginning of period	$ (9)	$ (13)
Reinvested dividends (in shares)	0.0	0.0
Reinvested dividends	$ 0	$ 0
Benefit payments (in shares)	0.0	0.0
Benefit payments	$ 3	$ 4
Balance at end of period (in shares)	0.0	0.0
Balance at end of period	$ (6)	$ (9)

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SEGMENT INFORMATION - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024 country_and_territory segment
Segment Reporting Information [Line Items]
Number of reportable segments | segment	2
International Package | Minimum
Segment Reporting Information [Line Items]
Number of countries and territories in which service is rendered	200
Supply Chain Solutions | Minimum
Segment Reporting Information [Line Items]
Number of countries and territories in which service is rendered	200

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SEGMENT INFORMATION - Results of Operations (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Segment Reporting Information [Line Items]
Revenue	$ 21,706	$ 22,925
Operating profit	1,613	2,541
U.S. Domestic Package
Segment Reporting Information [Line Items]
Revenue	14,234	14,987
Operating profit	825	1,466
International Package
Segment Reporting Information [Line Items]
Revenue	4,256	4,543
Operating profit	656	828
Supply Chain Solutions
Segment Reporting Information [Line Items]
Revenue	3,216	3,395
Operating profit	$ 132	$ 247

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EARNINGS PER SHARE - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Numerator:
Net income attributable to common shareowners	$ 1,113	$ 1,895
Denominator:
Weighted average shares (in shares)	853	858
Vested portion of restricted shares (in shares)	3	4
Denominator for basic earnings per share (in shares)	856	862
Effect of dilutive securities:
Denominator for diluted earnings per share (in shares)	857	865
Basic earnings per share (in dollars per share)	$ 1.30	$ 2.20
Diluted earnings per share (in dollars per share)	$ 1.30	$ 2.19
Restricted performance units
Effect of dilutive securities:
Effect of dilutive shares (in shares)	0	2
Stock options
Effect of dilutive securities:
Effect of dilutive shares (in shares)	1	1

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EARNINGS PER SHARE - Additional Information (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from diluted earnings per share that may be issued upon the exercise of employee stock options because such effect would be antidilutive (in shares)	0.5	0.2

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DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative, position minimum threshold for collateral requirement	$ 250,000,000
Derivative, collateral, obligation to return cash	82,000,000	$ 103,000,000
Collateral securities repledged, delivered, or used	0	$ 13,000,000
Pre-tax gains related to cash flow hedges that are currently deferred in AOCI and are expected to be reclassified to income within twelve months	$ 106,000,000
Maximum term over hedging exposures to the variability of cash flow	3 years

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DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Schedule of Notional Amounts of Outstanding Derivative Positions (Details) - Foreign exchange contracts € in Millions, £ in Millions, $ in Millions, $ in Millions	Mar. 31, 2024 EUR (€)	Mar. 31, 2024 GBP (£)	Mar. 31, 2024 CAD ($)	Mar. 31, 2024 HKD ($)	Dec. 31, 2023 EUR (€)	Dec. 31, 2023 GBP (£)	Dec. 31, 2023 CAD ($)	Dec. 31, 2023 HKD ($)
Euro
Derivative [Line Items]
Derivative, notional amount | €	€ 4,381				€ 4,408
British Pound Sterling
Derivative [Line Items]
Derivative, notional amount | £		£ 716				£ 663
Canadian Dollar
Derivative [Line Items]
Derivative, notional amount			$ 1,725				$ 1,550
Hong Kong Dollar
Derivative [Line Items]
Derivative, notional amount				$ 3,715				$ 1,822

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DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Location on the Balance Sheet of Derivative Assets and Liabilities (Details) - Fair Value, Inputs, Level 2 - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Asset Derivatives
Gross Amounts Presented in Consolidated Balance Sheets	$ 195	$ 158
Net Amounts if Right of Offset had been Applied	162	92
Liability Derivatives
Gross Amounts Presented in Consolidated Balance Sheets	34	92
Net Amounts if Right of Offset had been Applied	1	26
Designated as Hedging Instrument | Foreign currency exchange contracts | Other current assets
Asset Derivatives
Gross Amounts Presented in Consolidated Balance Sheets	123	95
Net Amounts if Right of Offset had been Applied	113	73
Designated as Hedging Instrument | Foreign currency exchange contracts | Other non-current assets
Asset Derivatives
Gross Amounts Presented in Consolidated Balance Sheets	72	63
Net Amounts if Right of Offset had been Applied	49	19
Designated as Hedging Instrument | Foreign currency exchange contracts | Other current liabilities
Liability Derivatives
Gross Amounts Presented in Consolidated Balance Sheets	11	26
Net Amounts if Right of Offset had been Applied	1	4
Designated as Hedging Instrument | Foreign currency exchange contracts | Other non-current liabilities
Liability Derivatives
Gross Amounts Presented in Consolidated Balance Sheets	23	65
Net Amounts if Right of Offset had been Applied	0	21
Not Designated as Hedging Instrument | Foreign currency exchange contracts | Other current assets
Asset Derivatives
Gross Amounts Presented in Consolidated Balance Sheets	0	0
Net Amounts if Right of Offset had been Applied	0	0
Not Designated as Hedging Instrument | Foreign currency exchange contracts | Other non-current liabilities
Liability Derivatives
Gross Amounts Presented in Consolidated Balance Sheets	0	1
Net Amounts if Right of Offset had been Applied	$ 0	$ 1

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DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Fair Value Derivative Balance Sheet Location (Details) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Carrying Amount of Hedged Liabilities	$ 280	$ 280
Hedged Liability, Statement of Financial Position [Extensible Enumeration]	Long-term debt	Long-term debt
Cumulative Amount of Fair Value Hedge Adjustments	$ 4	$ 4

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DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Income Statement and AOCI Recognition of Designated Hedges (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	$ 41	$ 68
Revenue | Interest rate contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	0	0
Revenue | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	41	68
Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	(1)	(1)
Interest expense | Interest rate contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	(1)	(1)
Interest expense | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	0	0
Investment income and other
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	0	0
Investment income and other | Interest rate contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	0	0
Investment income and other | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded	$ 0	$ 0

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DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Amount and Location in the Income Statement for Derivatives Designed as Cash Flow Hedges (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Derivative Instruments in Cash Flow Hedging Relationships
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in AOCI	$ 136	$ (34)
Derivative Instruments in Cash Flow Hedging Relationships | Foreign currency exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in AOCI	136	(34)
Non-derivative Instruments in Net Investment Hedging Relationships
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in AOCI	66	(73)
Non-derivative Instruments in Net Investment Hedging Relationships | Foreign currency exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in AOCI	$ 66	$ (73)

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DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Amount Recorded in Income Statements for Foreign Currency Forward Contracts Not Designated as Hedges (Details) - Not Designated as Hedging Instrument - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income	$ (5)	$ 4
Foreign currency exchange contracts | Investment income and other
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Income	$ (5)	$ 4

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INCOME TAXES (Details)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Effective tax rate	27.50%	24.90%

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TRANSFORMATION COSTS (Details) position in Thousands, $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) position
Restructuring and Related Activities [Abstract]
Expected number of positions eliminated | position			12
Separation costs	$ 87		$ 205
Transformation Costs:
Compensation and benefits	31	$ (12)
Other expenses	15	15
Total Transformation Costs	46	3
Income Tax Benefit from Transformation Costs	(11)	0
After-Tax Transformation Costs	$ 35	$ 3