ups-20240423

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 23, 2024

United Parcel Service, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-15451

58-2480149

(State or other jurisdiction
of incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

55 Glenlake Parkway, N.E., Atlanta, Georgia 30328

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (404) 828-6000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company. ☐

If an emerging growth company, indicate by check mark if the registrant has elected not 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. ☐

Item 2.02 — Results of Operations and Financial Condition.

On April 23, 2024, United Parcel Service, Inc. (the “Company”) issued a press release containing information about the Company’s results of operations and financial condition for the quarter ended March 31, 2024. The Company also posted on its website at www.investors.ups.com financial statement schedules containing additional detail about the Company's results of operations and financial condition for the same period.

A copy of the press release is attached hereto as Exhibit 99.1. A copy of the financial statement schedules is attached hereto as Exhibit 99.2.

Item 9.01 — Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release dated April 23, 2024 "UPS RELEASES 1Q 2024 EARNINGS"

99.2 Q1 2024 financial statement schedules

104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

The information contained in Items 2.02 and 9.01 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Exchange Act, except as may be expressly set forth by reference in any such filing.

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 hereunto duly authorized.

UNITED PARCEL SERVICE, INC.

Date:

April 23, 2024

By:

/s/ BRIAN O. NEWMAN

Brian O. Newman

Executive Vice President and Chief Financial Officer

Document

Exhibit 99.1

UPS RELEASES 1Q 2024 EARNINGS

•Consolidated Revenues of $21.7B, Compared to $22.9B Last Year

•Consolidated Operating Margin of 7.4%; Adjusted* Consolidated Operating Margin of 8.0%

•Diluted EPS of $1.30; Adj. Diluted EPS of $1.43, Compared to $2.20 Last Year

•Reaffirms Full-Year 2024 Financial Guidance

ATLANTA – April 23, 2024 – UPS (NYSE:UPS) today announced first-quarter 2024 consolidated revenues of $21.7 billion, a 5.3% decrease from the first quarter of 2023. Consolidated operating profit was $1.6 billion, down 36.5% compared to the first quarter of 2023, and down 31.5% on an adjusted basis. Diluted earnings per share were $1.30 for the quarter; adjusted diluted earnings per share of $1.43 were 35.0% below the same period in 2023.

For the first quarter of 2024, GAAP results include a total charge of $110 million, or $0.13 per diluted share, comprised of after-tax transformation and other charges of $75 million and a non-cash, after-tax impairment charge of $35 million, driven by plans to consolidate certain acquired brands within the company’s healthcare portfolio.

“I want to thank all UPSers for their hard work and efforts,” said Carol Tomé, UPS chief executive officer. “Our financial performance in the first quarter was in line with our expectations, and average daily volume in the U.S. showed improvement through the quarter. Looking ahead, we expect to return to volume and revenue growth.”

U.S. Domestic Segment

1Q 2024

Adjusted

1Q 2024

1Q 2023

Adjusted

1Q 2023

Revenue

$14,234 M

$14,987 M

Operating profit

$825 M

$839 M

$1,466 M

$1,488 M

•Revenue decreased 5.0%, driven by a 3.2% decrease in average daily volume.

•Operating margin was 5.8%; adjusted operating margin was 5.9%.

International Segment

1Q 2024

Adjusted

1Q 2024

1Q 2023

Adjusted

1Q 2023

Revenue

$4,256 M

$4,543 M

Operating profit

$656 M

$682 M

$828 M

$806 M

•Revenue decreased 6.3%, driven by a 5.8% decrease in average daily volume.

•Operating margin was 15.4%; adjusted operating margin was 16.0%.

Supply Chain Solutions1

1Q 2024

Adjusted

1Q 2024

1Q 2023

Adjusted

1Q 2023

Revenue

$3,216 M

$3,395 M

Operating profit

$132 M

$226 M

$247 M

$258 M

1 Consists of operating segments that do not meet the criteria of a reportable segment under ASC Topic 280 – Segment Reporting.

•Revenue decreased 5.3% primarily due to market rate declines in forwarding.

•Operating margin was 4.1%; adjusted operating margin was 7.0%.

2024 Outlook

The company provides certain guidance on an adjusted (non-GAAP) basis because it is not possible to predict or provide a reconciliation reflecting the impact of future pension adjustments or other unanticipated events, which would be included in reported (GAAP) results and could be material.

For 2024, UPS reaffirms its full-year, consolidated financial targets:

•Consolidated revenue to range from approximately $92.0 billion to $94.5 billion

•Consolidated adjusted operating margin to range from approximately 10.0% to 10.6%

•Capital expenditures of approximately $4.5 billion

* “Adjusted” or “Adj.” amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial measures, including a reconciliation to the most closely correlated GAAP measure.

Contacts:

UPS Media Relations: 404-828-7123 or pr@ups.com

UPS Investor Relations: 404-828-6059 (option 4) or investor@ups.com

# # #

Conference Call Information

UPS CEO Carol Tomé and CFO Brian Newman will discuss first-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, April 23, 2024. That call will be open to others through a live Webcast. To access the call, go to www.investors.ups.com and click on “Earnings Conference Call.” Additional financial information is included in the detailed financial schedules being posted on www.investors.ups.com under “Quarterly Earnings and Financials” and as furnished to the SEC as an exhibit to our Current Report on Form 8-K.

About UPS

UPS (NYSE: UPS) is one of the world’s largest companies, with 2023 revenue of $91.0 billion, and provides a broad range of integrated logistics solutions for customers in more than 200 countries and territories. Focused on its purpose statement, “Moving our world forward by delivering what matters,” the company’s approximately 500,000 employees embrace a strategy that is simply stated and powerfully executed: Customer First. People Led. Innovation Driven. UPS is committed to reducing its impact on the environment and supporting the communities we serve around the world. UPS also takes an unwavering stance in support of diversity, equity and inclusion. More information can be found at www.ups.com, about.ups.com and www.investors.ups.com.

Forward-Looking Statements

This release, 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. Forward-looking 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 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, 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; 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.

Reconciliation of GAAP and Non-GAAP Financial Measures

We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP financial measures.

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.

Forward-Looking Non-GAAP Metrics

From time to time when presenting forward-looking non-GAAP metrics, we are unable to provide quantitative reconciliations to the most closely correlated GAAP measure due to the uncertainty in the timing, amount or nature of any adjustments, which could be material in any period.

Incentive Compensation Program Design Changes

During 2022, we completed certain structural changes to the design of our incentive compensation programs that resulted in a one-time, non-cash charge in connection with the accelerated vesting of certain equity incentive awards that we do not expect to repeat. 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 these changes. We believe excluding the impacts of such changes allows users of our financial statements to more appropriately identify underlying growth trends in compensation and benefits expense.

Long-lived Asset Estimated Residual Value Changes

During the fourth quarter of 2022, we incurred a one-time, non-cash charge resulting from a reduction in the estimated residual value of our MD-11 fleet. 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 this charge. We believe excluding the impact of this charge better enables users of our financial statements to understand the ongoing cost associated with our long-lived assets.

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 activities, asset impairments and other charges. We believe excluding the impact of these charges better enables users of our financial statements to view and evaluate underlying business performance from the perspective of management. We do not consider these costs when evaluating the operating performance of our business units, making decisions to allocate resources or in determining incentive compensation awards.

One-Time Compensation Payment

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 a one-time payment made to certain U.S.-based, non-union part-time supervisors following the ratification of our labor agreement with the Teamsters. We do not expect this or similar payments to recur. We believe excluding the impact of this one-time payment better enables users of our financial statements to view and evaluate underlying business performance from the same perspective as management.

Defined Benefit Pension and Postretirement Medical Plan Gains and Losses

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 (expense) 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 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.

Free Cash Flow

We calculate free cash flow as cash flows from operating activities less capital expenditures, proceeds from disposals of property, plant and equipment, and plus or minus the net changes in other investing activities. We believe free cash flow is an important indicator of how much cash is generated by our ongoing business operations and we use this as a measure of incremental cash available to invest in our business, meet our debt obligations and return cash to shareowners.

Adjusted Return on Invested Capital

Adjusted ROIC is calculated as the trailing twelve months (“TTM”) of adjusted operating income divided by the average of total debt, non-current pension and postretirement benefit obligations and shareowners’ equity, at the current period end and the corresponding period end of the prior year. Because adjusted

ROIC is not a measure defined by GAAP, we calculate it, in part, using non-GAAP financial measures that we believe are most indicative of our ongoing business performance. We consider adjusted ROIC to be a useful measure for evaluating the effectiveness and efficiency of our long-term capital investments.

Adjusted Total Debt / Adjusted EBITDA

Adjusted total debt is defined as our long-term debt and finance leases, including current maturities, plus non-current pension and postretirement benefit obligations. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization adjusted for the impacts of incentive compensation program redesign, one-time compensation, goodwill & asset impairment charges, transformation and other costs, defined benefit plan gains and losses and other income. We believe the ratio of adjusted total debt to adjusted EBITDA is an important indicator of our financial strength, and is a ratio used by third parties when evaluating the level of our indebtedness.

Reconciliation of GAAP and Non-GAAP Income Statement Items

(in millions, except per share data):


Three Months Ended March 31, 2024

	As Reported (GAAP)		Asset Impairment Charges(1)		Transformation & Other Adj.(2)		As Adjusted (Non-GAAP)
U.S. Domestic Package	$	13,409	$	5	$	9	$	13,395
International Package	3,600		2		24		3,574
Supply Chain Solutions	3,084		41		53		2,990
Operating Expense	20,093		48		86		19,959

U.S. Domestic Package	825		5		9		839
International Package	656		2		24		682
Supply Chain Solutions	132		41		53		226
Operating Profit	1,613		48		86		1,747

Other Income and (Expense):
Other pension income (expense)	67		—		—		67
Investment income (expense) and other	51		—		—		51
Interest expense	(195)		—		—		(195)
Total Other Income (Expense)	(77)		—		—		(77)

Income Before Income Taxes	1,536		48		86		1,670
Income Tax Expense	423		13		11		447
Net Income	$	1,113	$	35	$	75	$	1,223

Basic Earnings Per Share	$	1.30	$	0.04	$	0.09	$	1.43

Diluted Earnings Per Share	$	1.30	$	0.04	$	0.09	$	1.43


(1) Reflects impairment charges of $41 million for acquired trade names within Supply Chain Solutions and $7 million for software licenses.
(2) Reflects other employee benefits costs of $31 million and $55 million of other costs, including a one-time expense related to a regulatory matter.

Reconciliation of Free Cash Flow (Non-GAAP measure)

(in millions):



Three Months Ended March 31,
	2024
Cash flows from operating activities	$	3,316
Capital expenditures	(1,035)
Proceeds from disposals of property, plant and equipment	13

Other investing activities	(14)
Free Cash Flow (Non-GAAP measure)	$	2,280

Reconciliation of Adjusted Debt to Adjusted EBITDA (Non-GAAP measure)

(in millions):




	TTM(1) Ended
	March 31,
	2024
Net income	$	5,926
Add back:
Income tax expense	1,661
Interest expense	794
Depreciation & amortization	3,430
EBITDA	$	11,811
Add back (deduct):
Incentive compensation program redesign	—
One-time compensation	61
Asset impairment charges	276
Transformation and other	518
Defined benefit plan (gains) and losses	359
Investment income and other pension income	(527)
Adjusted EBITDA	$	12,498

Debt and finance leases, including current maturities	$	20,013
Add back:
Non-current pension and postretirement benefit obligations	6,323
Adjusted total debt	$	26,336

Adjusted total debt/Net income	4.44

Adjusted total debt/adjusted EBITDA (Non-GAAP)	2.11

(1) Trailing twelve months.

Reconciliation of Adjusted Return on Invested Capital (Non-GAAP measure)

(in millions):



	TTM(1) Ended
	March 31,
	2024
Net income	$	5,926
Add back (deduct):
Income tax expense	1,661
Interest expense	794
Other pension (income) expense	94
Investment (income) expense and other	(262)
Operating profit	$	8,213
Incentive compensation program redesign	—
Long-lived asset estimated residual value changes	—
One-time compensation	61
Asset impairment charges	276
Transformation and other	518
Adjusted operating profit	$	9,068

Average debt and finance leases, including current maturities	21,101
Average pension and postretirement benefit obligations	5,463
Average shareowners' equity	18,493
Average invested capital	$	45,057

Net income to average invested capital	13.2		%

Adjusted Return on Invested Capital (Non-GAAP)	20.1		%

(1) Trailing twelve months.

Document

Exhibit 99.2

United Parcel Service, Inc.

Selected Financial Data - First Quarter

(unaudited)


	Three Months Ended
	March 31
	2024			2023			Change		% Change
(amounts in millions, except per share data)
Statement of Income Data:
Revenue:
U.S. Domestic Package	$	14,234		$	14,987		$	(753)	(5.0)	%
International Package	4,256			4,543			(287)		(6.3)	%
Supply Chain Solutions	3,216			3,395			(179)		(5.3)	%
Total revenue	21,706			22,925			(1,219)		(5.3)	%

Operating expenses:
U.S. Domestic Package	13,409			13,521			(112)		(0.8)	%
International Package	3,600			3,715			(115)		(3.1)	%
Supply Chain Solutions	3,084			3,148			(64)		(2.0)	%
Total operating expenses	20,093			20,384			(291)		(1.4)	%

Operating profit:
U.S. Domestic Package	825			1,466			(641)		(43.7)	%
International Package	656			828			(172)		(20.8)	%
Supply Chain Solutions	132			247			(115)		(46.6)	%
Total operating profit	1,613			2,541			(928)		(36.5)	%

Other income (expense):
Other pension income (expense)	67			66			1		1.5	%
Investment income (expense) and other	51			103			(52)		(50.5)	%
Interest expense	(195)			(188)			(7)		3.7	%
Total other income (expense)	(77)			(19)			(58)		305.3	%

Income before income taxes	1,536			2,522			(986)		(39.1)	%

Income tax expense	423			627			(204)		(32.5)	%

Net income	$	1,113		$	1,895		$	(782)	(41.3)	%

Net income as a percentage of revenue	5.1		%	8.3		%

Per share amounts:
Basic earnings per share	$	1.30		$	2.20		$	(0.90)	(40.9)	%
Diluted earnings per share	$	1.30		$	2.19		$	(0.89)	(40.6)	%

Weighted-average shares outstanding:
Basic	856			862			(6)		(0.7)	%
Diluted	857			865			(8)		(0.9)	%

As Adjusted Income Data (1):
Operating profit:
U.S. Domestic Package	$	839		$	1,488		$	(649)	(43.6)	%
International Package	682			806			(124)		(15.4)	%
Supply Chain Solutions	226			258			(32)		(12.4)	%
Total operating profit	1,747			2,552			(805)		(31.5)	%

Total other income (expense)	$	(77)		$	(19)		$	(58)	305.3	%
Income before income taxes	$	1,670		$	2,533		$	(863)	(34.1)	%
Net income	$	1,223		$	1,904		$	(681)	(35.8)	%

Basic earnings per share	$	1.43		$	2.21		$	(0.78)	(35.3)	%
Diluted earnings per share	$	1.43		$	2.20		$	(0.77)	(35.0)	%

(1) See Non-GAAP schedules for reconciliation of adjustments.

Prior year amounts may have been reclassified to conform to the current year presentation. Certain amounts are calculated based on unrounded numbers.

United Parcel Service, Inc.

Selected Operating Data - First Quarter

(unaudited)


	Three Months Ended
	March 31
	2024		2023		Change		% Change

Revenue (in millions):
U.S. Domestic Package:
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 U.S. Domestic Package	14,234		14,987		(753)		(5.0)	%
International Package:
Domestic	758		794		(36)		(4.5)	%
Export	3,350		3,552		(202)		(5.7)	%
Cargo and Other	148		197		(49)		(24.9)	%
Total International Package	4,256		4,543		(287)		(6.3)	%
Supply Chain Solutions:
Forwarding	1,280		1,514		(234)		(15.5)	%
Logistics	1,542		1,410		132		9.4	%
Other	394		471		(77)		(16.3)	%
Total Supply Chain Solutions	3,216		3,395		(179)		(5.3)	%
Consolidated	$	21,706	$	22,925	$	(1,219)	(5.3)	%

Consolidated volume (in millions)	1,336		1,407		(71)		(5.0)	%

Operating weekdays	63		64		(1)		(1.6)	%

Average Daily Package Volume (in thousands):
U.S. Domestic Package:
Next Day Air	1,590		1,737		(147)		(8.5)	%
Deferred	1,047		1,139		(92)		(8.1)	%
Ground	15,438		15,796		(358)		(2.3)	%
Total U.S. Domestic Package	18,075		18,672		(597)		(3.2)	%
International Package:
Domestic	1,503		1,635		(132)		(8.1)	%
Export	1,621		1,682		(61)		(3.6)	%
Total International Package	3,124		3,317		(193)		(5.8)	%
Consolidated	21,199		21,989		(790)		(3.6)	%

Average Revenue Per Piece:
U.S. Domestic Package:
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 U.S. Domestic Package	12.50		12.54		(0.04)		(0.3)	%
International Package:
Domestic	8.01		7.59		0.42		5.5	%
Export	32.80		33.00		(0.20)		(0.6)	%
Total International Package	20.87		20.47		0.40		2.0	%
Consolidated	$	13.73	$	13.74	$	(0.01)	(0.1)	%

Prior year amounts may have been reclassified to conform to the current year presentation. Certain amounts are calculated based on unrounded numbers.

United Parcel Service, Inc.

Detail of Operating Expenses - First Quarter

(unaudited)


	Three Months Ended
	March 31
	2024		2023		Change		% Change
(in millions)
Compensation and benefits	$	11,639	$	11,464	$	175	1.5	%
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 operating expenses	$	20,093	$	20,384	$	(291)	(1.4)	%

Prior year amounts may have been reclassified to conform to the current year presentation. Certain amounts are calculated based on unrounded numbers.

United Parcel Service, Inc.

Consolidated Balance Sheets

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


	March 31, 2024		December 31, 2023
(amounts in millions)

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	2		2
Class B common stock	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	(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

Prior year amounts may have been reclassified to conform to the current year presentation. Certain amounts are calculated based on unrounded numbers.

United Parcel Service, Inc.

Statements of Consolidated Cash Flows

(unaudited)


(amounts in millions)		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 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 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

Prior year amounts may have been reclassified to conform to the current year presentation. Certain amounts are calculated based on unrounded numbers.

United Parcel Service, Inc.

Reconciliation of Free Cash Flow (Non-GAAP measure)

(unaudited)





(amounts in millions)	Three Months Ended
	March 31
	2024		2023
Cash flows from operating activities	$	3,316	$	2,357
Capital expenditures	(1,035)		(609)
Proceeds from disposals of property, plant and equipment	13		5
Other investing activities	(14)		17
Free Cash Flow (Non-GAAP measure)	$	2,280	$	1,770

Prior year amounts may have been reclassified to conform to the current year presentation. Certain amounts are calculated based on unrounded numbers.

United Parcel Service, Inc.

Reconciliation of Adjusted Debt to Adjusted EBITDA (Non-GAAP measure)

(unaudited)



(amounts in millions)	TTM(1) Ended		TTM(1) Ended
	March 31, 2024		March 31, 2023
Net income	$	5,926	$	10,781
Add back:
Income tax expense	1,661		3,174
Interest expense	794		718
Depreciation & amortization	3,430		3,258
EBITDA	11,811		17,931
Add back (deduct):
Incentive compensation program redesign	—		505
One-time compensation	61		—
Asset impairment charges	276		8
Transformation and other	518		126
Defined benefit plan (gains) and losses	359		(1,028)
Investment income and other pension income	(527)		(1,261)
Adjusted EBITDA	$	12,498	$	16,281

Debt and finance leases, including current maturities	$	20,013	$	22,188
Add back:
Non-current pension and postretirement benefit obligations	6,323		4,602
Adjusted total debt	$	26,336	$	26,790

Adjusted total debt/Net income	4.44		2.48

Adjusted total debt/adjusted EBITDA (Non-GAAP)	2.11		1.65

(1) Trailing twelve months.

Prior year amounts may have been reclassified to conform to the current year presentation. Certain amounts are calculated based on unrounded numbers.

United Parcel Service, Inc.

Reconciliation of Adjusted Return on Invested Capital (Non-GAAP measure)

(unaudited)



(amounts in millions)	TTM(1) Ended			TTM(1) Ended
	March 31, 2024			March 31, 2023
Net income	$	5,926		$	10,781
Add back (deduct):
Income tax expense	1,661			3,174
Interest expense	794			718
Other pension (income) expense	94			(1,986)
Investment (income) expense and other	(262)			(303)
Operating profit	$	8,213		$	12,384
Incentive compensation program redesign	—			505
Long-lived asset estimated residual value changes	—			76
One-time compensation	61			—
Asset impairment charges	276			8
Transformation and other	518			126
Adjusted operating profit	$	9,068		$	13,099

Average debt and finance leases, including current maturities	$	21,101		$	22,035
Average pension and postretirement benefit obligations	5,463			6,403
Average shareowners' equity	18,493			17,744
Average invested capital	$	45,057		$	46,182

Net income to average invested capital	13.2		%	23.3		%

Adjusted Return on Invested Capital (Non-GAAP)	20.1		%	28.4		%

(1) Trailing twelve months.

Prior year amounts may have been reclassified to conform to the current year presentation. Certain amounts are calculated based on unrounded numbers.

United Parcel Service, Inc.

Reconciliation of GAAP and As Adjusted Income Statement Data

(unaudited)


	Three Months Ended March 31,
(in millions, except per share data)	2024								2023
	As Reported (GAAP)		Asset Impairment Charges(1)		Transformation & Other Adj.(2)		As Adjusted (Non-GAAP)		As Reported (GAAP)		Asset Impairment Charges(3)		Transformation & Other Adj.(4)		As Adjusted (Non-GAAP)		% Change As Rep. (GAAP)		% Change As Adj. (Non-GAAP)

U.S. Domestic Package	$	13,409	$	5	$	9	$	13,395	$	13,521	$	—	$	22	$	13,499	(0.8)	%	(0.8)	%
International Package	3,600		2		24		3,574		3,715		—		(22)		3,737		(3.1)	%	(4.4)	%
Supply Chain Solutions	3,084		41		53		2,990		3,148		8		3		3,137		(2.0)	%	(4.7)	%
Operating expense	20,093		48		86		19,959		20,384		8		3		20,373		(1.4)	%	(2.0)	%

U.S. Domestic Package	$	825	$	5	$	9	$	839	$	1,466	$	—	$	22	$	1,488	(43.7)	%	(43.6)	%
International Package	656		2		24		682		828		—		(22)		806		(20.8)	%	(15.4)	%
Supply Chain Solutions	132		41		53		226		247		8		3		258		(46.6)	%	(12.4)	%
Operating Profit	1,613		48		86		1,747		2,541		8		3		2,552		(36.5)	%	(31.5)	%
Other Income and (Expense):
Other pension income (expense)	67		—		—		67		66		—		—		66		1.5	%	1.5	%
Investment income (expense) and other	51		—		—		51		103		—		—		103		(50.5)	%	(50.5)	%
Interest expense	(195)		—		—		(195)		(188)		—		—		(188)		3.7	%	3.7	%
Total Other Income (Expense)	$	(77)	$	—	$	—	$	(77)	$	(19)	$	—	$	—	$	(19)	305.3	%	305.3	%
Income Before Income Taxes	1,536		48		86		1,670		2,522		8		3		2,533		(39.1)	%	(34.1)	%
Income Tax Expense	423		13		11		447		627		2		0		629		(32.5)	%	(28.9)	%
Net Income	$	1,113	$	35	$	75	$	1,223	$	1,895	$	6	$	3	$	1,904	(41.3)	%	(35.8)	%

Basic Earnings Per Share	$	1.30	$	0.04	$	0.09	$	1.43	$	2.20	$	0.01	$	—	$	2.21	(40.9)	%	(35.3)	%

Diluted Earnings Per Share	$	1.30	$	0.04	$	0.09	$	1.43	$	2.19	$	0.01	$	—	$	2.20	(40.6)	%	(35.0)	%

Weighted-average shares outstanding:
Basic	856								862
Diluted	857								865

(1) Reflects impairment charges of $41 million for acquired trade names within Supply Chain Solutions and $7 million for software licenses.

(2) Reflects other employee benefits costs of $31 million and $55 million of other costs, including a one-time expense related to a regulatory matter.

(3) Reflects a goodwill impairment charge of $8 million within Supply Chain Solutions.

(4) Reflects other costs of $15 million, partially offset by a reduction in other employee benefit costs of $12 million.

Prior year amounts may have been reclassified to conform to the current year presentation. Certain amounts are calculated based on unrounded numbers.

United Parcel Service, Inc.

Aircraft Fleet - As of March 31, 2024

(unaudited)


Description	UPS Owned and/or Operated	Charters & Leases Operated by Others	On Order	Under Option
Operating:
Boeing 757-200	75	—	—	—
Boeing 767-300	78	—	21	—
Boeing 767-300BCF	6	—	—	—
Boeing 767-300BDSF	4	—	—	—
Airbus A300-600	52	—	—	—
Boeing MD-11(1)	36	—	—	—
Boeing 747-400F	11	—	—	—
Boeing 747-400BCF	2	—	—	—
Boeing 747-8F	30	—	—	—
Other	—	255	—	—
Total	294	255	21	—

(1) Five (5) of the MD-11 aircraft shown above have been retired from operational use as of March 31, 2024. We anticipate retiring an additional four (4) of these aircraft during 2024.