United Parcel Service (UPS) 10-K risk factor changes: FY2025 vs FY2024

Changes [added: or continued uncertainty] in general economic conditions, in the U.S. and internationally, may adversely affect us.

Changes [added: or continued uncertainty] in general economic conditions are beyond our control, and it may be difficult for us to adjust our business model.

For example, we are affected by industrial production, inflation, unemployment, consumer [removed: spending and] [added: spending,] retail activity [removed: levels.][added: levels and international trade policies.]

We have been, and may in the future be, materially affected by adverse developments [added: or uncertainty] in these [added: and other] aspects of the economy.

We have also been, and may in the future be, adversely impacted by changes in general economic conditions resulting from geopolitical [removed: uncertainty] [added: uncertainty, tensions] and/or conflicts in or arising from [removed: the] [added: various] countries and [removed: regions where we operate,] [added: regions,] including the European Union, Ukraine, the Russian Federation, the Middle East and the Trans-Pacific region.

Changes [added: or uncertainty] in general economic conditions, or our inability to accurately forecast these changes or mitigate the impact of these conditions on our business, could materially adversely affect us.

Our industry [removed: is] [added: continues to] rapidly [removed: evolving.][added: evolve.]

Changes in our relationships with any of our significant customers, including [added: as a result of our strategy to reduce volume from our largest customer or] the loss or reduction in business from one or more [removed: of them,] [added: other customers,] could have a material adverse effect on us.

In the event we are not able to successfully [removed: reduce our costs in connection therewith,] [added: make appropriate adjustments or control related costs,] our profitability could be materially impacted.

[removed: For] additional information on the [removed: expected] operational and financial impacts arising from this [removed: agreement,] [added: strategy,] see [removed: “Management’s] [added: "Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations”.][added: Operations".]

Customer impact on our revenue and profitability can vary based on a number of [removed: factors,] [added: factors] including: contractual volume amounts; pricing terms; product launches; e-commerce or other industry trends, including those related to the holiday season; business combinations and the overall growth of a customer's underlying business; as well as any disruptions to their [removed: businesses.][added: business.]

Customers could choose, and have in the past chosen, to divert all or a portion of their business [added: with us to one of our competitors, demand pricing concessions, request enhanced services that increase our costs, or develop their own logistics capabilities.]

If all or a portion of our business relationships with one or more significant customers were to terminate or significantly [removed: change,] [added: change in an unplanned manner,] this could materially adversely affect us.

We depend on the skills and continued service of our [removed: large] [added: large, global] workforce.

[removed: We] [added: Annually, we] also [removed: regularly] hire [removed: a large number of] [added: many] part-time and seasonal workers.

We must be able to attract, develop and retain a large [removed: and diverse] global workforce.

If we are unable to hire, properly train or retain qualified employees, we could experience [removed: higher] [added: increased] labor costs, reduced revenues, [removed: further] increased workers' compensation and automobile liability claims costs, regulatory noncompliance, customer losses and diminution of our brand value or company culture, which could materially adversely affect us.

Our inability to continue to retain experienced and motivated employees through the execution of these [added: and other] initiatives may also materially adversely affect us.

Many of our U.S. employees are employed under a national master agreement [added: with the Teamsters] and various supplemental agreements with [removed: local unions] affiliated [removed: with the International Brotherhood of Teamsters (the "Teamsters").][added: local unions.]

Our national master agreement with the Teamsters [removed: runs through] [added: expires on] July 31, 2028.

[removed: Other employees] [added: Employees who are not employed under a collective bargaining agreement] may choose to organize in the future.

Actual or threatened strikes, work stoppages or slowdowns [removed: by our employees] could adversely affect our ability to meet our customers' needs.

As a result, customers have in the past reduced, and in the future may reduce, their business or stop doing business with us if they believe that such actions [removed: or threatened actions] may adversely affect our ability to provide services.

Furthermore, our actions or responses to any such negotiations, labor disputes, strikes or work stoppages could negatively impact how our brand is perceived and our reputation and could [removed: have adverse effects on our business, including our results of operations.][added: materially adversely affect us.]

As a result of concerns about global terrorism and physical security, various governments have adopted and may adopt additional heightened security requirements, [removed: resulting in] significantly [removed: increased] [added: increasing our] operating costs.

Regulatory and legislative requirements may change [removed: periodically] in response to evolving threats.

Compliance with security requirements or our own security measures may not prevent attacks or security breaches, which could materially adversely affect [removed: one or more of our operations, or our business.][added: us.]

A significant cybersecurity incident, [removed: or] increased data protection regulations, [added: or other information technology related risks,] could materially adversely affect us.

We rely on information technology networks and systems and other operational [removed: technologies,] [added: technologies to operate our business,] including the internet and [removed: a number of internally-developed] [added: internally developed] systems and applications, as well as certain technology systems from third-party vendors (collectively referred to as [removed: "IT"), to operate our business.][added: "IT").]

[removed: For example, we rely on these technologies to receive package level information in advance of the] physical receipt of packages, move and track packages through our operations, efficiently plan deliveries, execute billing processes, provide information to package recipients, manage employee data and track and report financial and operational data.

Our franchise locations and subsidiaries also rely on IT [removed: systems] to manage their business processes and activities.

IT [removed: and other systems] (ours, as well as those of our franchisees, acquired businesses, and third-party service providers) have been and will continue [removed: in the future] to be susceptible to damage, disruptions and shutdowns due to programming errors, defects or other vulnerabilities, power outages, hardware failures, misconfigurations, computer viruses, cyber-attacks, encryption caused by ransomware or malware attacks, exfiltration of data, attacks by foreign governments, state-sponsored [added: actors, or criminal groups, theft, misconduct by employees or other insiders, telecommunications failures, misuse, human errors or other catastrophic events.]

In recent periods, the frequency and sophistication of cyber-attacks have increased and are expected to continue to increase, including as a result of state-sponsored cybersecurity attacks during periods of geopolitical [removed: conflict, such as the ongoing conflicts in Ukraine and the Middle East.][added: conflict.]

[removed: In addition, the] [added: The] rapid evolution and increased adoption of [removed: artificial intelligence] [added: AI] technologies [added: has and] may [added: continue to] intensify our cybersecurity risks.

Accordingly, we may be unable to anticipate these [removed: techniques] [added: risks] or [removed: to] implement adequate measures to recognize, detect or prevent the occurrence of any of the events described above.

In addition, our security processes, protocols and standards may not [removed: prove to] be sufficient, effective or may not be complied with, either intentionally or inadvertently.

[removed: However, cybersecurity] [added: Cybersecurity] incidents have in the past and may in the future expose us, our customers, employees, franchisees, service providers or others, to loss, disclosure or misuse of proprietary information and sensitive or confidential data or result in disruptions to our operations or those of our customers, franchisees, service providers or others.

For example, cyber criminals have in the past gained [removed: access,] [added: access to customer accounts] and are expected to continue to try to gain access to customer accounts.

[removed: The type of] [added: Criminal] activity includes fraudulently inserting, diverting and misappropriating items being transported in our network, fraudulently charging shipment fees to customer or franchisee accounts, and fraudulently sending text messages to recipients purporting to be from UPS.

We also may not discover the occurrence of any of the events described above for a significant period [removed: of time] after the event occurs.

Additionally, the disclosures in this section reflect our beliefs and opinions as to factors that could materially and adversely affect us in the future.

References to historical events are provided by way of example only, and are not intended to be a complete listing or a representation as to whether such events have occurred in the past or their likelihood of occurring in the future.

New and emerging technologies continue to create additional sources of competition, and if we fail to incorporate new and emerging technologies as effectively as our competitors, our competitive position may be harmed.

Our strategy includes planned volume declines from our largest customer, Amazon.com, Inc. For 2025, this customer and its affiliates accounted for 10.6% of our consolidated revenues.

In connection with the execution of this strategy, we have made and continue to make reductions in the number of our facilities, vehicles and aircraft, and our workforce, intended to better align our assets and workforce to our planned operations, and to eliminate stranded costs.

For

In addition, our *Network Reconfiguration* and *Efficiency Reimagined* initiatives have led to, and are expected to continue to lead to, consolidations of our facilities and workforce, as well as an end-to-end process redesign.

For example, we rely on IT to receive package level information in advance of the

In addition, we are increasing our utilization of artificial intelligence ("AI") to optimize our operations, improve the customer experience and support decision-making.

AI technologies often require access to large volumes of sensitive data.

If our AI systems are compromised through cyberattacks or unauthorized access, it could result in data breaches, a loss of proprietary information, or violations of data protection laws.

Additionally, leveraging AI capabilities for our internal functions may introduce additional operational vulnerabilities by producing inaccurate outcomes, recommendations or other suggestions based on flaws in the underlying data, or other unintended results.

Our efforts to deter,

This includes the EU’s General Data Protection Regulation, the California Privacy Rights Act, the Virginia Consumer Data Protection Act, and other similar laws that have been or are expected to be enacted by other jurisdictions.

Customers may reduce shipments, supply chains may be disrupted, demand may be negatively impacted, property may be

currency exchange rates and interest rates cannot always be predicted or effectively hedged, and may have a material adverse effect on us.

For example, as previously disclosed, we have recorded

$182 million in asset impairment charges during the fourth quarter of 2025.

This initiative has also mandated increased reporting requirements.

Also beginning in 2025, we have been required to monitor and report the non-carbon dioxide aviation effects for certain routes in the European Union.

These requirements are expected to increase in the future, and may expand beyond reporting, either of which would increase our compliance costs.

New and emerging technologies are also creating additional sources of competition.

For the year ended December 31, 2024, one customer, Amazon.com, Inc. and its affiliates, accounted for 11.8% of our consolidated revenues.

In the first quarter of 2025, we entered into an agreement in principle with this customer that will provide for a reduction in their volume by more than 50% by June 2026.

In connection therewith, we are making certain business and operational changes intended to match our workforce to our activity and eliminate our stranded costs.

with us to one of our competitors, demand pricing concessions, request enhanced services that increase our costs, or develop their own logistics capabilities.

In addition, we continue to strive to lower our cost to serve, including labor costs, through various strategic initiatives.

actors, or criminal groups, theft, misconduct by employees or other insiders, telecommunications failures, misuse, human errors or other catastrophic events.

To date, we have not experienced a material cybersecurity incident.

affect our business, financial condition and results of operations.

For example, during the year ended December 31, 2023, as a result of a number of factors including changes in business strategy and challenging macroeconomic conditions such as increases in the risk-free interest rate and volatility of the stock prices of market comparables, we incurred impairment charges of $125 and $111 million in respect of goodwill and indefinite-lived intangible assets, respectively.

Additional decreases could result in goodwill or other impairment charges, which could be material.

For example, as previously disclosed, the SEC recently investigated our controls and practices surrounding impairment analyses in connection with the divestiture of UPS Freight in April 2021.

On November 22, 2024, we entered into a settlement with the SEC, without admitting or denying the SEC’s findings in connection with alleged violations of Section 17(a)(2) and (3) of the Securities Act of 1933 (and related provisions), resolving the investigation.

Under the terms of the settlement, we agreed to pay a civil penalty, and agreed to remedial actions, training and process changes.

that we may not be willing or able to pass such costs along to our customers.

[removed: We are executing] [added: In 2025, we continued to execute] our *Customer First, People Led and Innovation Driven* [removed: strategy to grow] [added: strategy, which focuses on growing] in the [removed: most attractive] parts of the market [added: that value our end-to-end solutions,] including healthcare, [removed: small and] [added: small-and] medium-sized businesses [removed: (“SMBs”)] [added: ("SMBs")] and International.

[removed: Also in 2024, we executed on our *Network of the Future* initiatives, which] [added: These initiatives] are intended to enhance the efficiency of our network through automation and operational sort [removed: consolidation.][added: consolidation in our U.S. Domestic network.]

[removed: We made this] [added: This] change [removed: in order to have] [added: provided us] greater operational control and [removed: maintain the] service quality [removed: of] [added: with respect to] this product.

[removed: We expect to] [added: These increases were] partially offset [added: by] the [removed: anticipated costs associated with this network reconfiguration through] [added: impacts of] our [added: *Network Reconfiguration* and] *Efficiency Reimagined* initiatives.

[added: We launched our] *Efficiency Reimagined* initiatives [removed: are an] [added: to undertake the] end-to-end process redesign [removed: being undertaken to] [added: effort which will] align our organizational processes to the network reconfiguration.

[removed: Within our U.S.] [added: *U.S.] Domestic Package [removed: operations, we captured growth through additional e-][added: Operations*]

[removed: For additional information on these programs and the benefits, see “Supplemental] [added: See *Supplemental] Information - Items Affecting [removed: Comparability".][added: Comparability* for additional discussion.]

| Operating Margin | | | [removed: 9.3] [added: 8.9] | | % | | | | [removed: 10.0] [added: 9.3] | | % | | | | | | | | | | | | |

| Net [removed: Income | | | $ | 5,782 | |] [added: income] | | | $ | [removed: 6,708] [added: 5,572] | | | | | $ | [removed: (926) | | | | | (13.8) |] [added: 5,782] | [removed: %] |

| Basic Earnings Per Share | | | $ | [removed: 6.76] [added: 6.56] | | | | | $ | [removed: 7.81] [added: 6.76] | | | | | $ | [removed: (1.05)] [added: (0.20)] | | | | | [removed: (13.4)] [added: (3.0)] | | % |

| Diluted Earnings Per Share | | | $ | [removed: 6.75] [added: 6.56] | | | | | $ | [removed: 7.80] [added: 6.75] | | | | | $ | [removed: (1.05)] [added: (0.19)] | | | | | [removed: (13.5)] [added: (2.8)] | | % |

| Operating Days | | | [removed: 253] [added: 252] | | | | | | [removed: 254] [added: 253] | | | | | | | | | | | | | | |

| Average Daily Package Volume (in thousands) | | | [removed: 22,418] [added: 20,847] | | | | | | [removed: 22,290] [added: 22,418] | | | | | | | | | | | | [removed: 0.6] [added: (7.0)] | | % |

| Average Revenue Per Piece | | | $ | [removed: 13.60] [added: 14.50] | | | | | $ | [removed: 13.62] [added: 13.60] | | | | | $ | [removed: (0.02)] [added: 0.90] | | | | | [removed: (0.1)] [added: 6.6] | | % |

Non-GAAP adjusted diluted earnings per share [added: in 2025] were [removed: $7.72 for the year] [added: $7.16] after adjusting for the after-tax impacts of:

[removed: ◦total transformation strategy costs] [added: ◦Transformation Strategy Costs] of [removed: $245] [added: $452] million, or [removed: $0.29] [added: $0.53] per diluted share;

[removed: ◦defined benefit pension] [added: | Defined Benefit Pension] and [removed: postretirement medical benefit plan mark-to-market loss outside of a 10% corridor of $506 million, or $0.59 per diluted share.][added: Postretirement Medical Plan Loss | | | $ | — | | | | | $ | 665 | |]

For additional operational results [removed: for the quarter and year-to-date periods] specific to [removed: our segments:] U.S. Domestic Package, International Package and [removed: Supply Chain Solutions] [added: SCS] refer to the respective [removed: segment] discussions below.

Management's Discussion and Analysis of Financial Condition and Results of Operations* [removed: of the Company's] [added: in our] Annual Report on Form 10-K for the year ended December 31, [removed: 2023] [added: 2024] filed with the Securities and Exchange Commission on February [removed: 20, 2024.][added: 18, 2025.]

| Non-GAAP Adjustments | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2023] [added: 2024] | | |

| *Business Portfolio Review* | | | [removed: 29] [added: $] | [added: (18)] | | | | | [removed: 84] [added: $] | [added: 29] | |

| *Financial Systems* | | | [removed: 54] [added: 55] | | | | | | [removed: 36] [added: 54] | | |

| *Transformation 2.0 Total* | | | [removed: 83] [added: 37] | | | | | | [removed: 210] [added: 83] | | |

| *Fit to Serve* | | | [removed: 204] [added: 47] | | | | | | [removed: 212] [added: 204] | | |

| *Network [removed: Reconfiguration] [added: Reconfiguration*] and [removed: Efficiency] [added: *Efficiency] Reimagined* | | | [removed: 35] [added: 509] | | | | | | [removed: —] [added: 35] | | |

| Total Transformation Strategy Costs | | | [removed: 322] [added: 593] | | | | | | [removed: 435] [added: 322] | | |

| [removed: Gain] [added: Net Loss (Gain)] on Divestiture [removed: of Coyote] | | | [removed: (156)] [added: 19] | | | | | | [removed: —] [added: (156)] | | |

| One-Time Payment for International Regulatory Matter | | | [removed: 88] [added: —] | | | | | | [removed: —] [added: 88] | | |

| Goodwill and Asset Impairment Charges | | | [removed: 108] [added: 182] | | | | | | [removed: 236] [added: 108] | | |

| Expense for Regulatory Matter | | | [removed: 45] [added: —] | | | | | | [removed: —] [added: 45] | | |

| Multiemployer Pension Plan Withdrawal Expense | | | [removed: 19] [added: —] | | | | | | [removed: —] [added: 19] | | |

| Total [added: Non-GAAP] Adjustments to [removed: Non-GAAP] Operating Expenses | | | $ | [removed: 426] [added: 794] | | | | | $ | [removed: 732] [added: 426] | |

| [removed: Defined Benefit Pension] [added: Total defined benefit pension] and [removed: Postretirement Medical Plan Loss] [added: postretirement medical plan loss] | | | $ | [removed: 665] [added: —] | | | | | $ | [removed: 359] [added: 665] | |

| Interest Expense Associated with One-Time Payment for International Regulatory Matter | | | [removed: 6] [added: —] | | | | | | [removed: —] [added: 6] | | |

| Total Adjustments to Non-GAAP Other Income and (Expense) | | | $ | [removed: 671] [added: 19] | | | | | $ | [removed: 359] [added: 671] | |

| Total Adjustments to Non-GAAP Income Before Income Taxes | | | $ | [removed: 1,097] [added: 813] | | | | | $ | [removed: 1,091] [added: 1,097] | |

| *Business Portfolio Review* | | | [removed: 7] [added: $] | [added: (5)] | | | | | [removed: 15] [added: $] | [added: 7] | |

| *Financial Systems* | | | [removed: 13] [added: 14] | | | | | | [removed: 10] [added: 13] | | |

| *Transformation 2.0 Total* | | | [removed: 20] [added: 9] | | | | | | [removed: 47] [added: 20] | | |

| *Fit to Serve* | | | [removed: 49] [added: 10] | | | | | | [removed: 52] [added: 49] | | |

The following discussion should be read in conjunction with the consolidated financial statements and related notes

included in Item 8.

"Financial Statements and Supplementary Data" of this Annual Report on Form 10-K (this "Annual Report" or "this report").

This section of this Annual Report includes a discussion of 2025 and 2024 items and year-over-year comparisons between those years.

For a discussion of year-over-year comparisons between 2024 and 2023 that are not included in this Annual Report see *Item 7.

As part of this strategy, we drove a reduction in volume from our largest customer, with a targeted reduction of 50% by June 2026 from 2024 levels.

Partly as a result, we increased consolidated revenue per piece by 6.6%, and expanded SMB penetration to over 30% of total U.S. volume.

In connection with this strategic execution of volume declines, we began our *Network Reconfiguration* and *Efficiency Reimagined* initiatives.

From these initiatives, we delivered on our planned year-over-year cost savings of approximately $3.5 billion in 2025.

Also in 2025, we completed the acquisitions of Frigo-Trans and Biotech & Pharma Logistics ("Frigo-Trans"), and Andlauer Healthcare Group ("AHG").

In 2025, our global healthcare portfolio generated more than $11 billion in revenue, furthering our progress towards our goal to become the number one complex healthcare logistics provider in the world.

In September 2024, we completed the divestiture of our truckload brokerage services ("Coyote"), which contributed $1.6 billion of revenue in 2024 prior to its divestiture.

Effective January 1, 2025, we insourced our former SurePost product, and replaced it with Ground Saver, a domestic economy service meant to complement our array of products used by our customers.

However, this insourcing pressured our operating results, as pickup and delivery costs were higher than in 2024.

In December 2025, we entered into a new agreement with the United States Postal Service ("USPS") to assist with final-mile delivery for a portion of our Ground Saver and Mail Innovations volumes starting in 2026, which is expected to allow us to more cost efficiently serve our customers while maintaining our service levels.

In the International market, during 2025 we implemented weekend delivery within Europe.

Additionally, our new air hub in the Philippines is slated to open towards the end of 2026 and our expansion in Hong Kong is planned to open in 2028.

Both gateways are expected to give us broader access and faster time in transit on the trade lanes that are growing in Asia.

During 2025, we returned $6.4 billion in cash to shareholders by completing $1.0 billion of share repurchases and paying $5.4 billion in dividends.

Our 2025 financial results also reflect the impact of a complex macro environment, driven by evolving trade policies, and the significant strategic actions we are taking including revenue quality initiatives.

Global trade policy changes during 2025, including pending and enacted tariffs and de minimis exclusions, resulted in shifting trade lane volumes, particularly reducing volumes on our China to U.S. lane, pressuring our International Package segment margins during the year.

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

| | | | 2025 | | | | | | 2024 | | | | | | Change $ | | | | | | Change % | | |

| Revenue (in millions) | | | $ | 88,661 | | | | | $ | 91,070 | | | | | $ | (2,409) | | | | | (2.6) | | % |

| Operating Expenses (in millions) | | | 80,794 | | | | | | 82,602 | | | | | | (1,808) | | | | | | (2.2) | | % |

| Operating Profit (in millions) | | | $ | 7,867 | | | | | $ | 8,468 | | | | | $ | (601) | | | | | (7.1) | | % |

| Net Income (in millions) | | | $ | 5,572 | | | | | $ | 5,782 | | | | | $ | (210) | | | | | (3.6) | | % |

- Average daily package volume in our global small package operations decreased in 2025, primarily due to the execution of planned volume declines from our largest customer and revenue quality actions we took related to certain e-commerce customers.

- Revenue declined in 2025, primarily driven by the impact of the Coyote divestiture, the volume declines described above, and decreases in our Mail Innovations volume.

These decreases were partially offset by growth in our International Package segment, driven by higher average daily volume and ongoing revenue‑quality initiatives, as well as increased air cargo revenue from the full onboarding in the fourth quarter of 2024 of volume under our USPS contract and continued contributions from our healthcare logistics businesses.

- Revenue per piece increased due to favorable trends in customer and product mix as well as revenue quality actions that we took.

- Operating expenses decreased in 2025, driven by decreases in purchased transportation expense, primarily attributable to the impact of the Coyote divestiture, the insourcing of our Ground Saver product and a gain from sale-leaseback transactions involving real estate properties within Supply Chain Solutions ("SCS").

These decreases were partially offset by increases in compensation and benefits and higher pick up and delivery costs associated with the insourcing of our Ground Saver product, incremental costs related to the grounding of our MD-11 fleet and costs related to implementing weekend delivery within Europe.

- Operating profit and operating margin decreased due to increased pickup and delivery expenses in the U.S. Domestic Package segment and shifting international volume to less profitable trade lanes due to trade policy challenges, partially offset by the impact of our revenue quality efforts.

- We reported net income of $5.6 billion and diluted earnings per share of $6.56, which included $0.30 per diluted share attributable to the gain from sale-leaseback transactions involving real estate properties within SCS.

◦Goodwill and Asset Impairment Charges of $156 million, or $0.18 per diluted share, which includes a charge of $137 million related to the retirement of our MD-11 aircraft fleet;

◦a Net Loss on Divestiture of $15 million, or $0.02 per diluted share; and

◦the Reversal of an Income Tax Valuation Allowance of ($109) million, or ($0.13) per diluted share.

| Non-GAAP Adjustments | | | 2025 | | | | | | 2024 | | |

| Non-GAAP Adjustments | | | 2025 | | | | | | 2024 | | |

During 2024, we took several steps in furtherance of our strategy.

We continued to focus on providing excellent service to our customers, delivering industry-leading on-time performance during 2024.

Our Digital Access Program grew year over year, contributing to our consolidated volume growth and continued expansion within the United States ("U.S.") SMB market.

For example, we are moving from a scanning to a sensing network through our *Smart Package Smart Facility* RFID initiative, which is helping us reduce manual scans and enhance package visibility for our customers.

Additionally, we completed the onboarding of air cargo volumes from the United States Postal Service ("USPS").

Under our agreement with the USPS, UPS is the primary air cargo provider for the USPS within the United States.

Within our international and healthcare operations, we expect to grow both organically and inorganically, having previously announced that we entered into agreements to acquire Estafeta, a leading domestic small package provider in Mexico, and Frigo-Trans, an industry-leading, complex healthcare logistics provider based in Germany.

The acquisitions of Frigo-Trans and related entities were completed during January 2025, and the acquisition of Estafeta is expected to close in the first half of 2025, subject to customary regulatory reviews and approvals.

In September 2024, we finalized the previously announced divestiture of our truckload brokerage business ("Coyote").

Effective January 1, 2025, we insourced the delivery of all SurePost volume, which we expect to result in additional deliveries within our network.

Also in January 2025, we implemented a 9.9% average rate increase on this product.

In the first quarter of 2025, as previously disclosed, we entered into an agreement in principle with our largest customer to significantly reduce the volume we deliver for them.

We expect volume from this customer to decline to approximately 50% of year-end 2024 levels by mid-2026.

We are making a deliberate shift in our business to increase our focus on growing higher yielding volume.

We expect that these actions will result in a reduction in revenue within our U.S. Domestic Package segment, as described below, during 2025 relative to 2024.

In conjunction therewith, as disclosed on January 30, 2025, we are beginning a network reconfiguration within the U.S. which is expected to lead to consolidations of our facilities and workforce as well as an end-to-end process redesign through 2027.

This network reconfiguration, which is an expansion of our *Network of the Future* program, is expected to result in exit activities that could result in the closure of up to 10% of our buildings in 2025, a reduction in the size of our vehicle and aircraft fleets, and a decrease in the size of our workforce, which we expect will lead to additional expense.

We are not yet able to determine the specific assets or extent of our workforce that will be impacted by this network reconfiguration, the timing of those changes or any associated charges and expenses and therefore are not currently able to provide an estimate of the total cost or the cost by period.

We expect that impacted assets will remain in use during some or all of the periods of our network reconfiguration.

These initiatives are expected to yield approximately $1.0 billion in annualized savings, which we expect to begin realizing during 2025.

We incurred related costs of $35 million for the three months ended December 31, 2024.

We expect to incur related costs of approximately $300 to $400 million during 2025 and incremental costs in 2026 and 2027 to complete *Efficiency Reimagined*, primarily relating to outside professional service fees and severance costs.

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.

As of the fourth quarter of 2024 based on a change in our management reporting structure, U.S. Air Cargo is presented within our U.S. Domestic Package segment and prior periods have been recast.

This recast did not have any impact on previously reported consolidated results.

We experienced volume and revenue growth in our global small package operations during the year, primarily the result of a strong second half of 2024.

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

commerce customers and SMBs that leveraged our Digital Access Program.

In our International Package operations, we experienced average daily volume growth in our export products, which drove a year-over-year revenue increase.

In Supply Chain Solutions, revenue decreased for the year, driven by the impact of the divestiture of Coyote, partially offset by revenue growth in our other Supply Chain Solutions businesses.

This growth was primarily due to the impact of the acquisition of MNX Global Logistics in the fourth quarter of 2023 and revenue growth in our freight forwarding business driven by continued strong market demand out of Asia.

During the year, we continued to execute on various initiatives under our previously announced transformation strategy programs, Transformation 2.0 and Fit to Serve, which are contributing to fundamental changes to our back-office technologies and organizational structure.

We realized benefits from our Fit to Serve initiative during the year, which helped offset declines in operating profit.

During 2024, we also returned cash to shareholders in the form of dividends of $6.52 per share, for a total of $5.4 billion, and $500 million of share repurchases.

For the year, capital expenditures were $3.9 billion.

Highlights of our results for the years ended December 31, 2024 and 2023, which are discussed in more detail in the sections that follow, include (dollars in millions, except per share and per piece amounts):

| | | | | | | | | | | | | | | | | | | | | | | | |

As of December 31, [removed: 2024] [added: 2025] and [removed: 2023,] [added: 2024,] we had no commodity contracts outstanding.

We have foreign currency [added: exchange] risks related to our revenue, operating expenses and financing transactions in currencies other than the local currencies in which we operate.

Our most significant foreign currency [added: exchange] exposures relate to the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar.

These derivative instruments generally cover forecasted foreign currency [added: exchange] exposures for periods of 3 to 36 months.

We [added: may] hold investments in debt securities, as well as cash-equivalent instruments, some of which accrue income at variable rates of interest.

The following analysis provides quantitative information regarding our exposure to foreign currency exchange rate risk, [added: and] interest rate risk [removed: and equity price risk] embedded in our existing financial instruments.

We utilize valuation models to evaluate the sensitivity of the fair value of financial instruments with exposure to market risk that assume instantaneous, parallel shifts in exchange rates, interest rate yield curves and commodity [removed: and equity] prices.

[removed: In addition, the analyses are] unable to reflect the complex market reactions that normally would arise from the market shifts modeled.

| Currency Derivatives(1) | | | $ | [removed: (749)] [added: (647)] | | | | | $ | [removed: (649)] [added: (749)] | |

| [removed: Variable Rate] [added: Variable-Rate] Debt(2) | | | $ | [removed: 21] [added: 22] | | | | | $ | [removed: 41] [added: 21] | |

(2)The potential change in annual interest expense resulting from a hypothetical 100 basis point increase in short-term interest rates, applied to our [removed: variable rate] [added: variable-rate] debt.

In addition, the analyses are

The following table shows the shock-test results as of December 31, 2025 and 2024 (in millions):

| | | | 2025 | | | | | | 2024 | | |

| | | | | | | | | | | | |

| | | | Shock-Test Result as of December 31, | | | | | | | | |

| (in millions) | | | 2024 | | | | | | 2023 | | |

| Change in Annual Interest Income: | | | | | | | | | | | |

| Marketable Securities(3) | | | $ | — | | | | | $ | 1 | |

(3)The potential change in interest income resulting from a hypothetical 100 basis point increase in short-term interest rates, applied to our variable rate investment holdings.

[removed: United Parcel Service, Inc. ("UPS"),] [added: UPS,] founded in 1907, is a global package delivery and logistics provider.

In [removed: 2024,] [added: 2025,] we delivered an average of [removed: 22.4] [added: 20.8] million packages per day, totaling [removed: 5.7] [added: 5.2] billion packages during the year.

Total revenue in [removed: 2024] [added: 2025] was [removed: $91.1] [added: $88.7] billion.

[removed: Our strategy] [added: We are continuing to execute our *Customer First, People Led, Innovation Driven* strategy, which] focuses on growing in the parts of our market that value our end-to-end [removed: network,] [added: solutions,] including healthcare, [removed: business to business (“B2B”),] [added: business-to-business ("B2B"),] small- and medium-sized businesses [removed: (“SMBs”),] [added: ("SMBs"),] and international.

[removed: We strive to enable our customers to better] compete and succeed by [added: taking complexity out of their business and] delivering what they tell us matters [added: to them] the most: speed, ease and service reliability.

We continually seek to improve the productivity and efficiency of our global integrated network by using technology to move from a scanning to a sensing network, including using RFID technology in our *Smart Package Smart [removed: Facilities*.][added: Facilities initiative*.]

For additional information on the [removed: expected] operational and financial impacts [removed: of this agreement,] [added: arising from these actions,] see [removed: “Management’s] [added: "Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations”.][added: Operations".]

We believe that our integrated global air and ground network is the [removed: most extensive] [added: broadest] in the industry.

We provide all types of package services (air, ground, domestic, international, commercial and residential) through a single pickup and delivery network that [removed: can be] [added: is] configured to meet customers' needs.

Our sophisticated systems, including our RFID-enabled *Smart Package Smart Facility* technology, enable us to optimize network [removed: efficiency,] [added: efficiency] asset [removed: utilization] [added: utilization,] and [added: to] enhance end-to-end visibility.

We have a significant presence in all [removed: of the world’s] major economies, allowing us to effectively and efficiently operate [removed: around the world.][added: globally.]

We [removed: are a global leader in developing] [added: develop] technologies that help customers enhance their shipping and logistics business [removed: processes to lower] [added: processes, lowering] costs, [removed: improve] [added: improving] service and [removed: increase] [added: increasing] efficiency.

We [added: leverage advanced and emerging technologies, including artificial intelligence ("AI"), and] offer a variety of digital tools and capabilities that enable customers to integrate UPS functionality into their distribution [removed: channels, intended to deepen customer relationships.][added: channels.]

*Broad [removed: Portfolio of Services*.][added: Service Portfolio*.]

Our service portfolio [removed: allows] [added: offers] customers of all sizes [added: services] to [removed: choose] [added: meet] their [removed: most appropriate option.][added: logistics needs.]

Increasingly, our customers benefit from UPS [removed: capabilities and solutions that integrate our] services beyond package delivery.

We continue to invest in specialized [removed: capabilities] [added: services] like [removed: our] cold chain and thermal monitoring technologies, which we believe allow us to better serve our healthcare customers.

We [removed: focus on building] [added: seek to build] and [removed: maintaining] [added: maintain] long-term customer relationships.

[removed: We believe value-added services beyond package delivery and connecting] [added: Connecting] our small package, supply chain, digital and on-demand services across our customer [removed: base, are] [added: base is] important to customer retention and growth.

[removed: We have built a] [added: Our] leading and trusted brand [removed: that] stands for service quality, reliability and innovation.

This includes investing in digital technology, acquisitions, [removed: transportation] equipment, facilities and employee development to generate value for shareholders.

[removed: We seek to maintain a] [added: Our] strong credit rating [removed: to give us] [added: provides] additional flexibility in running the business.

Our remaining businesses are reported as Supply Chain [removed: Solutions.][added: Solutions ("SCS").]

These services are supported by numerous shipping, visibility and billing technologies including our Digital Access [removed: Program,] [added: Program ("DAP"),] which embeds our shipping solutions directly into leading e-commerce platforms, enabling us to reach SMBs and e-commerce markets more broadly.

[removed: We combine all] [added: All] packages [removed: within] [added: flow through] our single, global network, unless dictated by specific service commitments.

Our network provides unique operational and capital efficiencies [removed: that also have] [added: and has] a smaller environmental impact than single service network designs.

We offer same-day pickup of air and ground packages seven days a week through a broad variety of network access points including, UPS [removed: drop boxes, UPS] Access [removed: Point locations and] [added: Points,] The UPS [removed: Store locations.][added: Stores and UPS drop boxes.]

These [removed: returns] services [removed: are] [added: have been] driven by [removed: the continued prevalence of] e-commerce [removed: that has increased our customers' needs for efficient and reliable returns] [added: growth] and are designed to promote efficiency and a friction-free consumer experience.

We are a leader in time-definite, guaranteed small package delivery services in the [removed: United States.][added: U.S. We offer a full spectrum of air and ground package transportation services.]

Our [removed: U.S.] ground fleet serves [added: substantially] all business and residential zip codes in the contiguous [removed: United States.][added: U.S.]

We deliver approximately [removed: 16] [added: 15] million ground packages per day, most within one to three business days.

- [added: Ground Saver (formerly] UPS [removed: SurePost] [added: SurePost)] provides residential ground service for customers with non-urgent, lightweight residential shipments.

International Package consists of our small package operations in Europe, [removed: the Indian sub-continent,] Middle East and Africa (together "EMEA"), Canada and Latin America (together "Americas") and Asia.

[removed: Supply Chain Solutions] [added: SCS] consists of our [removed: forwarding, logistics,] [added: Forwarding, Logistics,] digital and other businesses.

[removed: Serving more than 200 countries and territories,] [added: As a global service provider,] we strategically seek to provide integration across increasingly complex, specialized and fragmented supply chains.

In [removed: September] 2024, we completed the divestiture of our truckload brokerage business ("Coyote").

We operate both multi-client and dedicated facilities across our network, many of which are strategically located near UPS air [added: and ground transportation hubs to support rapid delivery to business and consumer markets.]

We offer world-class technology, deep expertise and [removed: a] highly sophisticated [removed: suite of] healthcare logistics services.

In furtherance of this strategy, we have continued to grow organically, making investments in facilities to expand our network, and inorganically, including through the acquisitions of Frigo-Trans [removed: and Biotech & Pharma Logistics] in January [added: 2025 and AHG in November] 2025.

*Digital and [removed: other Supply Chain Solutions businesses*][added: Other SCS Businesses*]

We strive to enable our customers to better

In 2025, we took several steps in furtherance of this strategy, including continuing to deliberately shift our business to increase our focus on higher yielding volume, which allowed us to increase SMB penetration to over 30% of total U.S. volume from 2024.

We also completed the acquisitions of Frigo-Trans and Biotech & Pharma Logistics ("Frigo-Trans") and Andlauer Healthcare Group ("AHG"), further expanding our healthcare cold chain capabilities.

In 2025, our global healthcare portfolio generated more than $11 billion in revenue, furthering our progress towards our goal to become the number one complex healthcare logistics provider in the world.

Additionally, we extended our RFID labeling solution to 5,500 UPS store locations and completed the installation of RFID readers across U.S. package cars.

This label technology allows customers to generate shipping labels with embedded RFID, streamlining processes and improving tracking capabilities.

Furthermore, in December 2025, we entered into an agreement with the United States Postal Service ("USPS") to support final-mile delivery for a portion of our Ground Saver and Mail Innovations volumes starting in 2026.

This agreement is expected to allow us to more cost efficiently serve our customers across these offerings while maintaining our industry-leading service levels.

Our digital and automated tools support shipment creation, tracking and data management, and enable data‑analysis automation, automated agents, personalization and customized pricing.

*Service.* We consistently deliver industry‑leading service, through engineering and operational excellence, particularly during peak times when our customers need reliability the most.

As customer needs evolve, UPS continues to develop value-added services beyond package delivery.

Our strong, purpose-driven culture fosters trust, partnership and empowerment among our dedicated employees.

Our financial strength enables us to pursue strategic growth opportunities.

We offer returns services in approximately 150 countries, addressing customers' needs for efficient and reliable returns.

In December 2025, we entered into an agreement with the USPS to support final-mile delivery for a portion of Ground Saver volume beginning in 2026.

We offer a wide selection of guaranteed day and time-definite international transportation services supported by our brokerage capabilities that facilitate cross‑border clearance for international shipments.

SCS

Effective oversight is accomplished through a variety of methods and processes including regular updates and discussions around risks and benefits of strategic and technology initiatives impacting

Our Comprehensive Health and Safety Process ("CHSP") is the foundation of our proactive risk management approach.

This approach includes physical safety and mental-health considerations, spans job functions from package handling to management roles, and is applied worldwide, from package sorting facilities to our executive offices.

Through the CHSP, we seek to systematically identify, evaluate, and mitigate health and safety risks in a number of ways.

We use internal safety committees to identify and mitigate hazards in the workplace, and we routinely audit critical risk areas such as equipment integrity, environmental conditions and emergency preparedness.

We support employee health and well-being through various programs, which focus on physical conditioning, nutrition and fatigue management, in addition to providing extensive programming and training designed to reduce stress-related risks, strengthen resilience and support employees’ mental-health.

Other programs include affinity-based business resource groups, opportunities to provide feedback through confidential employee surveys, and access to confidential counselling.

We provide extensive training in safe work methods, risk identification and resource availability, all designed to mitigate risk.

These measures provide visibility into emerging trends and facilitate continuous improvement across the enterprise.

As previously disclosed, our strategy involves reducing volumes from this customer by more than 50% by June 2026 from 2024 levels.

We are also subject to increasing environmental compliance and reporting obligations in the European Union and elsewhere.

We are continuing our journey to execute our *Customer First, People Led, Innovation Driven* strategy.

In the first quarter of 2025, we entered into an agreement in principle with our largest customer to significantly reduce the volume we deliver for them.

We are making a deliberate shift to increase our focus on growing higher yielding volume.

These tools allow customers to send, manage and track their shipments, and also provide their customers with value-added data about their shipments.

We believe that the dedication of our employees comes in large part from our strong, purpose-driven culture that fosters trust, partnership and empowerment.

Our financial strength allows us to continue to pursue strategic opportunities that facilitate our growth.

We offer a portfolio of returns services in approximately 150 countries.

We offer a full spectrum of U.S. domestic air and ground package transportation services.

Through 2024, final delivery was often provided by the United States Postal Service ("USPS").

Beginning January 1, 2025, in order to have more control over our ability to provide our customers industry-leading service, we have insourced this product.

For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

We offer a wide selection of guaranteed day- and time-definite international shipping services.

Supply Chain Solutions

and ground transportation hubs to support rapid delivery to business and consumer markets.

In July 2024, the IAM ratified a new collective bargaining agreement that will expire on July 31, 2029.

During 2024, we executed under our "Fit to Serve" initiative, intended to right-size our business and create a more efficient operating model to enhance responsiveness to changing market dynamics.

During 2024, we reduced our workforce by approximately 14,000 positions, primarily within management.

Fit to Serve is expected to conclude in 2025.

In January 2025, we announced a reconfiguration of our U.S. network and *Efficiency Reimagined* initiatives.

We expect these actions to result in decreases in the size of our operational and management workforce.

For additional information on the expected operational and financial impacts of these initiatives, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

We seek to provide industry-leading employee health, safety and wellness programs across our workforce.

UPS's Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our varied operational environments.

Our CHSP covers a wide array of roles, from package handling to administration, and spans geographical boundaries to include sorting facilities, mobile logistics, administrative offices, and other locations worldwide.

UPS conducts audits to assess specific risks and hazards, including equipment safety, workplace environment, and emergency response protocols.

In the first quarter of 2025, we entered into an agreement in principle with this customer that will provide for a reduction in their volume by more than 50% by June 2026.

For additional information on the expected operational and financial impacts arising from this agreement, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

As a result of recent changes in the USPS operating model, in January 2025 we announced that we have begun delivering 100% of our SurePost volume.

Our activities in the U.S.,

Human Capital, Risk, and Nominating and Corporate Governance Committees are also available on our investor relations website under the heading "Investors – Corporate Governance".

Disclosures Required Pursuant to Section 13(r) of the Securities Exchange Act of 1934

The Company had no reportable transactions during the quarter ended December 31, 2024.

The information provided pursuant to Section 13(r) of the Exchange Act in Item 5 of Part II of the Company's [Quarterly Report on Form 10-Q](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000064/0001090727-24-000064-index.htm) for the quarter ended September 30, 2024 is incorporated by reference herein.

For the fiscal year ended December 31, [removed: 2024][added: 2025]

[removed: ][added: ]

See definitions of [removed: “ large] [added: "large] accelerated [removed: filer”, “accelerated filer”, “smaller] [added: filer", "accelerated filer", "smaller] reporting [removed: company,”] [added: company,"] and "emerging growth company" in Rule 12b-2 of the Exchange Act.

The aggregate market value of the class B common stock held by non-affiliates of the registrant was [removed: $100,185,550,613] [added: $74,239,665,022] as of June [removed: 28, 2024.][added: 30, 2025.]

As of February [removed: 3, 2025,] [added: 2, 2026,] there were [removed: 114,298,155] [added: 105,245,883] outstanding shares of class A common stock and [removed: 739,873,795] [added: 743,855,831] outstanding shares of class B common stock.

Portions of the registrant’s definitive proxy statement for its annual meeting of shareowners scheduled for May [removed: 8, 2025] [added: 7, 2026] are incorporated by reference into Part III of this report.

| | | | [Products and Services; Reporting Segments](#ic898c058b5624d8ab283092902191392_25) | | | [removed: [2](#ic898c058b5624d8ab283092902191392_25)] [added: [3](#ic898c058b5624d8ab283092902191392_25)] | | |

| | | | [Government Regulation](#ic898c058b5624d8ab283092902191392_37) | | | [removed: [5](#ic898c058b5624d8ab283092902191392_37)] [added: [6](#ic898c058b5624d8ab283092902191392_37)] | | |

| | | | [Where You Can Find More Information](#ic898c058b5624d8ab283092902191392_40) | | | [removed: [7](#ic898c058b5624d8ab283092902191392_40)] [added: [8](#ic898c058b5624d8ab283092902191392_40)] | | |

| Item 4. | | | [Mine Safety Disclosures](#ic898c058b5624d8ab283092902191392_64) | | | [removed: [18](#ic898c058b5624d8ab283092902191392_64)] [added: [19](#ic898c058b5624d8ab283092902191392_64)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#ic898c058b5624d8ab283092902191392_70) | | | [removed: [19](#ic898c058b5624d8ab283092902191392_70)] [added: [20](#ic898c058b5624d8ab283092902191392_70)] | | |

| | | | [Shareowner Return Performance Graph](#ic898c058b5624d8ab283092902191392_73) | | | [removed: [20](#ic898c058b5624d8ab283092902191392_73)] [added: [21](#ic898c058b5624d8ab283092902191392_73)] | | |

| Item 6. | | | [\[Reserved\]](#ic898c058b5624d8ab283092902191392_76) | | | [removed: [21](#ic898c058b5624d8ab283092902191392_76)] [added: [22](#ic898c058b5624d8ab283092902191392_76)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ic898c058b5624d8ab283092902191392_79) | | | [removed: [22](#ic898c058b5624d8ab283092902191392_79)] [added: [23](#ic898c058b5624d8ab283092902191392_79)] | | |

| | | | [Overview](#ic898c058b5624d8ab283092902191392_82) | | | [removed: [22](#ic898c058b5624d8ab283092902191392_82)] [added: [23](#ic898c058b5624d8ab283092902191392_82)] | | |

| | | | [Supplemental Information - Items Affecting Comparability](#ic898c058b5624d8ab283092902191392_85) | | | [removed: [26](#ic898c058b5624d8ab283092902191392_85)] [added: [25](#ic898c058b5624d8ab283092902191392_85)] | | |

| | | | [U.S. Domestic Package Operations](#ic898c058b5624d8ab283092902191392_88) | | | [removed: [33](#ic898c058b5624d8ab283092902191392_88)] [added: [30](#ic898c058b5624d8ab283092902191392_88)] | | |

| | | | [International Package Operations](#ic898c058b5624d8ab283092902191392_91) | | | [removed: [36](#ic898c058b5624d8ab283092902191392_91)] [added: [33](#ic898c058b5624d8ab283092902191392_91)] | | |

| | | | [Supply Chain Solutions [added: ("SCS")] Operations](#ic898c058b5624d8ab283092902191392_94) | | | [removed: [39](#ic898c058b5624d8ab283092902191392_94)] [added: [35](#ic898c058b5624d8ab283092902191392_94)] | | |

| | | | [Consolidated Operating Expenses](#ic898c058b5624d8ab283092902191392_97) | | | [removed: [42](#ic898c058b5624d8ab283092902191392_97)] [added: [37](#ic898c058b5624d8ab283092902191392_97)] | | |

| | | | [Other Income and (Expense)](#ic898c058b5624d8ab283092902191392_100) | | | [removed: [46](#ic898c058b5624d8ab283092902191392_100)] [added: [40](#ic898c058b5624d8ab283092902191392_100)] | | |

| | | | [Income Tax Expense](#ic898c058b5624d8ab283092902191392_103) | | | [removed: [47](#ic898c058b5624d8ab283092902191392_103)] [added: [41](#ic898c058b5624d8ab283092902191392_103)] | | |

| | | | [Liquidity and Capital Resources](#ic898c058b5624d8ab283092902191392_106) | | | [removed: [48](#ic898c058b5624d8ab283092902191392_106)] [added: [42](#ic898c058b5624d8ab283092902191392_106)] | | |

| | | | [Collective Bargaining Agreements](#ic898c058b5624d8ab283092902191392_109) | | | [removed: [53](#ic898c058b5624d8ab283092902191392_109)] [added: [47](#ic898c058b5624d8ab283092902191392_109)] | | |

| | | | [New Accounting Pronouncements](#ic898c058b5624d8ab283092902191392_112) | | | [removed: [53](#ic898c058b5624d8ab283092902191392_112)] [added: [47](#ic898c058b5624d8ab283092902191392_112)] | | |

| | | | [Critical Accounting Estimates](#ic898c058b5624d8ab283092902191392_115) | | | [removed: [54](#ic898c058b5624d8ab283092902191392_115)] [added: [48](#ic898c058b5624d8ab283092902191392_115)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures about Market Risk](#ic898c058b5624d8ab283092902191392_118) | | | [removed: [61](#ic898c058b5624d8ab283092902191392_118)] [added: [55](#ic898c058b5624d8ab283092902191392_118)] | | |

| Item 8. | | | [Financial Statements and Supplementary Data](#ic898c058b5624d8ab283092902191392_121) | | | [removed: [63](#ic898c058b5624d8ab283092902191392_121)] [added: [57](#ic898c058b5624d8ab283092902191392_121)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ic898c058b5624d8ab283092902191392_199) | | | [removed: [141](#ic898c058b5624d8ab283092902191392_199)] [added: [125](#ic898c058b5624d8ab283092902191392_199)] | | |

| Item 9A. | | | [Controls and Procedures](#ic898c058b5624d8ab283092902191392_202) | | | [removed: [141](#ic898c058b5624d8ab283092902191392_202)] [added: [125](#ic898c058b5624d8ab283092902191392_202)] | | |

| Item 9B. | | | [Other Information](#ic898c058b5624d8ab283092902191392_205) | | | [removed: [143](#ic898c058b5624d8ab283092902191392_205)] [added: [127](#ic898c058b5624d8ab283092902191392_205)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#ic898c058b5624d8ab283092902191392_208) | | | [removed: [143](#ic898c058b5624d8ab283092902191392_208)] [added: [127](#ic898c058b5624d8ab283092902191392_208)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate Governance](#ic898c058b5624d8ab283092902191392_214) | | | [removed: [144](#ic898c058b5624d8ab283092902191392_214)] [added: [128](#ic898c058b5624d8ab283092902191392_214)] | | |

| Item 11. | | | [Executive Compensation](#ic898c058b5624d8ab283092902191392_217) | | | [removed: [145](#ic898c058b5624d8ab283092902191392_217)] [added: [129](#ic898c058b5624d8ab283092902191392_217)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ic898c058b5624d8ab283092902191392_220) | | | [removed: [145](#ic898c058b5624d8ab283092902191392_220)] [added: [129](#ic898c058b5624d8ab283092902191392_220)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director Independence](#ic898c058b5624d8ab283092902191392_223) | | | [removed: [145](#ic898c058b5624d8ab283092902191392_223)] [added: [129](#ic898c058b5624d8ab283092902191392_223)] | | |

| Item 14. | | | [Principal Accountant Fees and Services](#ic898c058b5624d8ab283092902191392_226) | | | [removed: [145](#ic898c058b5624d8ab283092902191392_226)] [added: [129](#ic898c058b5624d8ab283092902191392_226)] | | |

| Item 15. | | | [Exhibits and Financial Statement Schedules](#ic898c058b5624d8ab283092902191392_232) | | | [removed: [146](#ic898c058b5624d8ab283092902191392_232)] [added: [130](#ic898c058b5624d8ab283092902191392_232)] | | |

| Item 16. | | | [Form 10-K Summary](#ic898c058b5624d8ab283092902191392_235) | | | [removed: [146](#ic898c058b5624d8ab283092902191392_235)] [added: [130](#ic898c058b5624d8ab283092902191392_235)] | | |

However, caution should be taken not to place undue reliance on any [removed: such] 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.

Introductory Note

In this Annual Report on Form 10-K ("Annual Report" and "this report"), the "Company," "we," "us" and "our" refer to United Parcel Service, Inc. ("UPS").

With regard to the Company’s segments, "we," "us" and "our" may also refer to the segment being discussed.

Unless the context indicates otherwise, whenever we refer in this Annual Report to a particular year, we mean our calendar year ended or ending December 31.

| 1.625% Senior Notes due 2025 | | | UPS25 | | | New York Stock Exchange | | |

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The Board has appointed a Risk Committee, consisting entirely of independent directors, whose responsibilities include assisting the Board in overseeing management’s identification and evaluation of strategic enterprise risks, including risks associated with privacy, technology, information security, [added: AI,] cybersecurity and cyber incident response and business continuity.

For additional information on cybersecurity risks and the impact they may have on our business strategy, results of operations or financial condition see "Risk Factors – Business and Operating Risks – A significant cybersecurity incident, [removed: or] increased data protection regulations, [added: or other information technology related risks,] could materially adversely affect us".

We own or lease approximately 800 facilities in our international package operations, with approximately [removed: 22] [added: 23] million square feet of floor space.

We own or lease [removed: more than] [added: approximately] 600 facilities, with approximately [removed: 47] [added: 50] million square feet of floor space, which support our freight forwarding and logistics operations.

This includes approximately [removed: 16] [added: 22] million square feet of healthcare-compliant warehousing.

The following table shows information about our aircraft fleet as of December 31, [removed: 2024:][added: 2025:]

| Boeing 767-300 | | | [removed: 82] [added: 89] | | | | | | — | | | | | | [removed: 25] [added: 18] | | | | | | — | | |

| Boeing [removed: MD-11] [added: MD-11(1)] | | | [removed: 29] [added: 26] | | | | | | — | | | | | | — | | | | | | — | | |

As of December 31, [removed: 2024,] [added: 2025,] we operated a global ground fleet of approximately [removed: 128,000] [added: 125,000] package cars, vans, tractors and motorcycles, including approximately 19,000 alternative fuel and advanced technology vehicles.

| Other | | | — | | | | | | 221 | | | | | | — | | | | | | — | | |

| Total | | | 295 | | | | | | 221 | | | | | | 18 | | | | | | — | | |

(1) During the fourth quarter of 2025, we permanently grounded and subsequently retired our MD-11 fleet.

For additional information, see note 4 to the audited, consolidated financial statements.

We do not expect this action to have a material impact on our business, financial condition or results of operations.

| | | | | | | | | | | | | | | | | | | | | | | | |

| Other | | | — | | | | | | 243 | | | | | | — | | | | | | — | | |

| Total | | | 291 | | | | | | 243 | | | | | | 25 | | | | | | — | | |

As of February [removed: 3, 2025,] [added: 2, 2026,] there were [removed: 155,418] [added: 152,776] and [removed: 19,626] [added: 19,392] shareowners of record of our class A and class B common stock, respectively.

The declaration of dividends is subject to the discretion of the Board of Directors [added: (the "Board")] and [removed: will depend] [added: depends] on various factors, including our net income, financial condition, cash requirements, future prospects and other relevant factors.

On [removed: February 5, 2025, our] [added: January 27, 2026, the] Board [removed: declared] [added: approved] a [removed: dividend of] $1.64 per [removed: share,] [added: share dividend,] which is payable on March [removed: 6, 2025] [added: 5, 2026] to shareowners of record on February [removed: 18, 2025.][added: 17, 2026.]

In January 2023, the Board [removed: of Directors] approved a share repurchase authorization for [added: up to] $5.0 billion of class A and class B common stock.

During [removed: the year ended December 31, 2024,] [added: 2025,] we repurchased [removed: 3.9] [added: 8.6] million shares of class B common stock for [removed: $500 million] [added: $1.0 billion] under this authorization.

We do not anticipate further share repurchases in [removed: 2025.][added: 2026.]

As of December 31, [removed: 2024,] [added: 2025,] we had [removed: $2.3] [added: $1.3] billion available under our share repurchase authorization.

The comparison of the total cumulative return on investment, which is the change in the stock price plus reinvested dividends for each of the quarterly periods, assumes that $100 was invested on December 31, [removed: 2019] [added: 2020] in the Standard & Poor’s 500 Index, the Dow Jones Transportation Average and our class B common stock.

[removed: ][added: ]

| | | | [removed: 12/31/2019] [added: 12/31/2020] | | | | | | [removed: 12/31/2020] [added: 12/31/2021] | | | | | | [removed: 12/31/2021] [added: 12/31/2022] | | | | | | [removed: 12/31/2022] [added: 12/31/2023] | | | | | | [removed: 12/31/2023] [added: 12/31/2024] | | | | | | [removed: 12/31/2024] [added: 12/31/2025] | | |

For information regarding our equity compensation plans, see Item [removed: 12] [added: 13] of this [removed: report.][added: Annual Report.]

Historically we have declared and paid dividends on a quarterly basis.

| United Parcel Service, Inc. | | | $ | 100.00 | | | | | $ | 133.61 | | | | | $ | 111.96 | | | | | $ | 105.29 | | | | | $ | 87.89 | | | | | $ | 74.69 | |

| Standard & Poor’s 500 Index | | | $ | 100.00 | | | | | $ | 128.68 | | | | | $ | 105.35 | | | | | $ | 133.02 | | | | | $ | 166.27 | | | | | $ | 195.97 | |

| Dow Jones Transportation Average | | | $ | 100.00 | | | | | $ | 129.04 | | | | | $ | 108.02 | | | | | $ | 121.34 | | | | | $ | 120.71 | | | | | $ | 136.89 | |

Our practice has been to pay dividends on a quarterly basis.

We did not repurchase any shares during the fourth quarter of 2024.

On February 3, 2025, we entered into an accelerated share repurchase agreement for $1.0 billion worth of shares.

This agreement is expected to settle in the first quarter of 2025.

| United Parcel Service, Inc. | | | $ | 100.00 | | | | | $ | 147.28 | | | | | $ | 193.56 | | | | | $ | 162.33 | | | | | $ | 152.66 | | | | | $ | 127.43 | |

| Standard & Poor’s 500 Index | | | $ | 100.00 | | | | | $ | 118.39 | | | | | $ | 152.34 | | | | | $ | 124.73 | | | | | $ | 128.09 | | | | | $ | 160.11 | |

| Dow Jones Transportation Average | | | $ | 100.00 | | | | | $ | 118.18 | | | | | $ | 152.83 | | | | | $ | 131.11 | | | | | $ | 146.74 | | | | | $ | 152.33 | |

| [Report of Independent Registered Public Accounting [removed: Firm (PCAOB] [added: Firm](#ic898c058b5624d8ab283092902191392_124) [(PCAOB] ID](#ic898c058b5624d8ab283092902191392_124) [N](#ic898c058b5624d8ab283092902191392_124)[o.](#ic898c058b5624d8ab283092902191392_124) 34[)](#ic898c058b5624d8ab283092902191392_124) | | | [removed: [64](#ic898c058b5624d8ab283092902191392_124)] [added: [58](#ic898c058b5624d8ab283092902191392_124)] | | |

| [Consolidated Balance Sheets](#ic898c058b5624d8ab283092902191392_127) | | | [removed: [67](#ic898c058b5624d8ab283092902191392_127)] [added: [61](#ic898c058b5624d8ab283092902191392_127)] | | |

| [Statements of Consolidated Income](#ic898c058b5624d8ab283092902191392_130) | | | [removed: [68](#ic898c058b5624d8ab283092902191392_130)] [added: [62](#ic898c058b5624d8ab283092902191392_130)] | | |

| [Statements of Consolidated Comprehensive Income (Loss)](#ic898c058b5624d8ab283092902191392_133) | | | [removed: [68](#ic898c058b5624d8ab283092902191392_133)] [added: [62](#ic898c058b5624d8ab283092902191392_133)] | | |

| [Statements of Consolidated Cash Flows](#ic898c058b5624d8ab283092902191392_136) | | | [removed: [69](#ic898c058b5624d8ab283092902191392_136)] [added: [63](#ic898c058b5624d8ab283092902191392_136)] | | |

| [Notes to Consolidated Financial Statements](#ic898c058b5624d8ab283092902191392_139) | | | [removed: [70](#ic898c058b5624d8ab283092902191392_139)] [added: [64](#ic898c058b5624d8ab283092902191392_139)] | | |

| [Note 1—Summary of Accounting Policies](#ic898c058b5624d8ab283092902191392_142) | | | [removed: [70](#ic898c058b5624d8ab283092902191392_142)] [added: [64](#ic898c058b5624d8ab283092902191392_142)] | | |

| [Note 2—Revenue Recognition](#ic898c058b5624d8ab283092902191392_145) | | | [removed: [77](#ic898c058b5624d8ab283092902191392_145)] [added: [72](#ic898c058b5624d8ab283092902191392_145)] | | |

| [Note 3—Marketable Securities and Non-Current Investments](#ic898c058b5624d8ab283092902191392_148) | | | [removed: [80](#ic898c058b5624d8ab283092902191392_148)] [added: [74](#ic898c058b5624d8ab283092902191392_148)] | | |

| [Note 4—Property, Plant and Equipment](#ic898c058b5624d8ab283092902191392_151) | | | [removed: [83](#ic898c058b5624d8ab283092902191392_151)] [added: [76](#ic898c058b5624d8ab283092902191392_151)] | | |

| [Note 5—Company-Sponsored Employee Benefit Plans](#ic898c058b5624d8ab283092902191392_154) | | | [removed: [84](#ic898c058b5624d8ab283092902191392_154)] [added: [77](#ic898c058b5624d8ab283092902191392_154)] | | |

| [Note 6—Multiemployer Employee Benefit Plans](#ic898c058b5624d8ab283092902191392_157) | | | [removed: [95](#ic898c058b5624d8ab283092902191392_157)] [added: [87](#ic898c058b5624d8ab283092902191392_157)] | | |

| [Note 7—Goodwill and Intangible [removed: Assets](#ic898c058b5624d8ab283092902191392_160)] [added: Assets](#ic898c058b5624d8ab283092902191392_2176)] | | | [removed: [99](#ic898c058b5624d8ab283092902191392_160)] [added: [91](#ic898c058b5624d8ab283092902191392_2176)] | | |

| [Note 8—Acquisitions and Dispositions](#ic898c058b5624d8ab283092902191392_163) | | | [removed: [101](#ic898c058b5624d8ab283092902191392_163)] [added: [93](#ic898c058b5624d8ab283092902191392_163)] | | |

| [Note 9—Debt and Financing Arrangements](#ic898c058b5624d8ab283092902191392_166) | | | [removed: [104](#ic898c058b5624d8ab283092902191392_166)] [added: [95](#ic898c058b5624d8ab283092902191392_166)] | | |

| [Note 10—Legal Proceedings and Contingencies](#ic898c058b5624d8ab283092902191392_169) | | | [removed: [109](#ic898c058b5624d8ab283092902191392_169)] [added: [99](#ic898c058b5624d8ab283092902191392_169)] | | |

| [Note 11—Leases](#ic898c058b5624d8ab283092902191392_172) | | | [removed: [111](#ic898c058b5624d8ab283092902191392_172)] [added: [101](#ic898c058b5624d8ab283092902191392_172)] | | |

| [Note 12—Shareowners’ Equity](#ic898c058b5624d8ab283092902191392_175) | | | [removed: [114](#ic898c058b5624d8ab283092902191392_175)] [added: [103](#ic898c058b5624d8ab283092902191392_175)] | | |

| [Note 13—Stock-Based Compensation](#ic898c058b5624d8ab283092902191392_178) | | | [removed: [119](#ic898c058b5624d8ab283092902191392_178)] [added: [107](#ic898c058b5624d8ab283092902191392_178)] | | |

| [Note 14—Segment and Geographic Information](#ic898c058b5624d8ab283092902191392_184) | | | [removed: [123](#ic898c058b5624d8ab283092902191392_184)] [added: [110](#ic898c058b5624d8ab283092902191392_184)] | | |

| [Note 15—Income Taxes](#ic898c058b5624d8ab283092902191392_187) | | | [removed: [128](#ic898c058b5624d8ab283092902191392_187)] [added: [113](#ic898c058b5624d8ab283092902191392_187)] | | |

| [Note 16—Earnings Per Share](#ic898c058b5624d8ab283092902191392_190) | | | [removed: [133](#ic898c058b5624d8ab283092902191392_190)] [added: [118](#ic898c058b5624d8ab283092902191392_190)] | | |

| [Note 17—Derivative Instruments and Risk Management](#ic898c058b5624d8ab283092902191392_193) | | | [removed: [134](#ic898c058b5624d8ab283092902191392_193)] [added: [119](#ic898c058b5624d8ab283092902191392_193)] | | |

| [Note 18—Transformation Strategy Costs](#ic898c058b5624d8ab283092902191392_196) | | | [removed: [138](#ic898c058b5624d8ab283092902191392_196)] [added: [123](#ic898c058b5624d8ab283092902191392_196)] | | |

We have audited the accompanying consolidated balance sheets of United Parcel Service, Inc. and subsidiaries (the "Company") as of December 31, [removed: 2024] [added: 2025] and [removed: 2023,] [added: 2024,] the related consolidated statements of income, comprehensive income, and cash flows, for each of the three years in the period ended December 31, [removed: 2024,] [added: 2025,] and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2024] [added: 2025] and [removed: 2023,] [added: 2024,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2024,] [added: 2025,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, [removed: 2024,] [added: 2025,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 18, 2025,] [added: 17, 2026,] expressed an unqualified opinion on the Company's internal control over financial reporting.

Revenue — Refer to [removed: Note 2, Revenue Recognition,] [added: Notes 1 and 2] to the [added: consolidated] financial statements

Approximately [removed: 86] [added: 88] percent of the Company’s revenues are from its global small package operations that provide time-definite delivery services for express letters, documents, small packages and palletized freight via air and ground services.

[removed: February 18, 2025][added: | 2025 | | | | | | | | | | | | | | | | | |]

[removed: UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES][added: United Parcel Service, Inc., and all of its consolidated subsidiaries ("UPS"), is a global package delivery and logistics provider.]

| | | | [added: 2025 | | | | | |] 2024 | | | | | | 2023 | | |

| Cash and cash equivalents | | | $ | [removed: 6,112] [added: 5,887] | | | | | $ | [removed: 3,206] [added: 6,112] | |

| [removed: Marketable] [added: Total current marketable] securities | | | [removed: 206] [added: $] | [added: 207] | | | | | [removed: 2,866] [added: $] | [added: (1)] | | [added: | | | $ | 206 | |]

[removed: | Accounts receivable | | | 11,007 | | | | | | 11,342 | | |][added: *Accounts Receivable, Net*]

| Accounts receivable, net | | | [removed: 10,871] [added: 11,209] | | | | | | [removed: 11,216] [added: 10,871] | | |

| Other current assets | | | [removed: 2,121 | | | | | | 2,125] [added: 24] | | |

| Total Current Assets | | | [removed: 19,310] [added: 19,045] | | | | | | [removed: 19,413] [added: 19,310] | | |

| Property, Plant and Equipment, Net | | | [removed: 37,179] [added: 37,731] | | | | | | [removed: 36,945] [added: 37,179] | | |

| Operating Lease Right-Of-Use Assets | | | [removed: 4,149] [added: 4,263] | | | | | | [removed: 4,308] [added: 4,149] | | |

Goodwill – Global Freight Forwarding and Healthcare Logistics Distribution Reporting Units — Refer to Notes 1 and 7 to the consolidated financial statements

The Company tests goodwill for impairment annually as of July 1, or more frequently if circumstances require, by determining if it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

For certain reporting units, the Company uses a combination of income and market approaches to develop an estimate of reporting unit fair value.

The income approach uses a discounted cash flow model, which requires the Company to make a number of significant assumptions to produce an estimate of future cash flows.

These assumptions include projections of future revenue, costs, capital expenditures, working capital, long-term growth rates and the discount rate.

The market approach uses observable market data of comparable public companies to estimate fair value utilizing financial metrics (such as enterprise value to net sales).

As of

the annual test date, the Company had recorded balances of goodwill of $877 million related to Global Freight Forwarding ("GFF") and $738 million related to Healthcare Logistics Distribution ("HLD") reporting units.

We identified the valuation of the GFF and HLD reporting units as a critical audit matter because of the significant judgments required to estimate the fair value of the reporting units.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecasts of future revenue and costs and the selection of the discount rate.

Our audit procedures related to the forecasts of future revenue and costs, and the selection of the discount rate, used by management to estimate the fair value of the GFF and HLD reporting units included the following, among others:

- We tested the design and operating effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the GFF and HLD reporting units, such as controls related to management’s forecasts of revenue and costs and selection of the discount rate.

- We performed a sensitivity analysis of the forecasts of revenue and costs, including their impact on future cash flows, and the selected discount rate.

- We evaluated management's ability to accurately forecast by comparing actual results to management's historical forecasts.

- We evaluated the reasonableness of management’s forecasts by comparing the forecasts to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in relevant industry reports.

- With the assistance of our fair value specialists, we evaluated the reasonableness of the selected discount rate, by:

–Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.

–Developing a range of independent estimates and comparing those to the discount rate selected by management.

–Evaluating the forecasts to understand and sensitize management's assumptions regarding the risk inherent in the forecasts.

February 17, 2026

| Net Income | | | $ | 5,572 | | | | | $ | 5,782 | | | | | $ | 6,708 | |

| Net income | | | $ | 5,572 | | | | | $ | 5,782 | | | | | $ | 6,708 | |

We manage our business and report operations through two reportable segments, U.S. Domestic Package and International Package, which are together referred to as our global small package operations.

The "Company," "we," "us" and "our" refer to UPS.

Unless the context indicates otherwise, whenever we refer in this report to a particular year, we mean our calendar year ended or ending December 31.

In our Logistics business we have a right to consideration from

Invoices are generated each week on the week-ending day.

In order to determine revenue recognized in the

*Supplemental Cash Flow Information*

The following table presents supplemental cash flow information (in millions):

| Noncash transactions: | | | | | | | | | | | | | | | | | |

| Accrued capital expenditures | | | $ | 524 | | | | | $ | 227 | | | | | $ | 309 | |

| Property, plant and equipment recognized during the construction period of build-to-suit financing arrangement | | | 107 | | | | | | — | | | | | | — | | |

| Right-of-use assets obtained in exchange for finance lease obligations(2) | | | 731 | | | | | | 120 | | | | | | 209 | | |

(1) Includes $18, $20 and $17 million of cash paid for interest on finance leases in 2025, 2024 and 2023, respectively.

(2) Includes $551 million related to new aircraft leases that commenced in 2025, which were accounted for as finance leases.

In connection therewith, we are reconfiguring our U.S. network which have and will continue to lead to a consolidation of our facilities and workforce as well as end-to-end process redesign.

Refer to note 4 for additional information.

In 2025, we defined a new lease asset class, data centers, and elected to account for the lease and non-lease components separately.

For all other lease arrangements, we account for lease and non-lease components as a single lease component.

| | | | | | |

Valuation of U.S. hedge fund, risk parity, private debt, private equity and real estate investments — Refer to Note 5, Company-Sponsored Employee Benefit Plans (Fair Value Measurements), to the financial statements

The Company’s U.S. pension and postretirement medical benefit plans (the "U.S. Plans") held hedge fund, private debt, private equity and real estate investments valued at $10.1 billion as of December 31, 2024.

The Company determines the reported values of the U.S. Plans’ investments in hedge fund, private debt, private equity and real estate funds primarily based on the estimated net asset value ("NAV") of the fund.

In order to estimate NAV, the Company evaluates audited and unaudited financial reports from fund managers, and makes adjustments, as appropriate, for investment activity between the date of the financial reports and December 31.

These investments are not actively traded, and their values can only be estimated using these subjective assumptions.

Auditing the estimated NAV of these hedge fund, private debt, private equity and real estate investments requires a high degree of auditor judgment and subjectivity to evaluate the completeness, reliability and relevance of the inputs used by management.

Our audit procedures related to the inputs used by management to estimate the NAV of the U.S. Plans’ hedge fund, private debt, private equity and real estate investments (collectively, the “funds”) included the following, among others:

- We tested the effectiveness of controls, including those related to the reliability of values reported by fund managers, the relevance of asset class benchmark returns, and the completeness and accuracy of unobservable inputs related to the underlying assets of the funds, including certain controls for which the control design was modified following the transition of the UPS Group Trust’s investment management function to Goldman Sachs.

- For a selection of investments, we evaluated certain inputs and recalculated ending values in accordance with management’s processes and confirmed directly with the respective fund manager its preliminary estimate of the fund’s NAV as of December 31, 2024.

- We evaluated the Company’s historical ability to accurately estimate NAV for these funds by comparing each fund’s recorded valuation as of its prior fiscal year end to the NAV per the audited fund financial statements (which are received in arrears of the Company’s reporting timetable).

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Less: Allowance for credit losses | | | (136) | | | | | | (126) | | |

| | | | Years Ended December 31, | | | | | | | | | | | | | | |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In 2024, we reclassified certain operating expenses to better align with the manner in which we manage our operations.

These reclassifications were inconsequential and substantially all of these costs were previously classified within operating expenses as *Purchased transportation* and have now been classified within operating expenses within *Other expenses* in the statements of consolidated income.

The remaining line items within operating expenses and *Other Income and (Expense)* that were impacted by this reclassification were inconsequential.

As a result, the statements of consolidated income give effect to this reclassification as follows:

- Purchased transportation decreased by $11 and $9 million for 2023 and 2022, respectively.

- Other expenses increased by $7 and $5 million for 2023 and 2022, respectively.

The amounts for 2024 were not reported under this legacy basis but are also immaterial.

The reclassification had no impact on our reported revenue, operating profit, *Other Income and (Expense)*, net income, or any internal performance measure on which management is compensated.

*United States ("U.S.") Domestic Package and International Package Operations:* Revenue is recognized over time as we perform the services in the contract.

*Forwarding*: Freight forwarding revenue, and expenses related to the transportation of freight are recognized over time as we perform the services.

As of December 31, 2023, we had $37 million of restricted cash that was primarily related to cash we had agreed to deposit in connection with a previously disclosed challenge by Italian tax authorities to the deductibility of Value Added Tax payments by UPS to certain third-party service providers.

We designated additional amounts as restricted cash during the first quarter of 2024 and, during the second quarter of 2024, we

made a voluntary payment, including interest, of approximately $94 million to settle this matter and recorded a corresponding charge against income which is reflected in *Other expenses* in our statements of consolidated income.

In connection therewith, we will be reconfiguring our U.S. network and expect this reconfiguration to lead to a reduction in the number of buildings, vehicles and aircraft in our network.

We classify long-lived assets or disposal groups as held for sale in the period when all of the following conditions have been met:

- we have approved and committed to a plan to sell the assets or disposal group;

- the asset or disposal group is available for immediate sale in its present condition;

- an active program to locate a buyer and other actions required to complete the sale have been initiated;

- the sale of the asset or disposal group is probable and expected to be completed within one year;

- the asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and

- it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

In 2023, we transferred a portion of our workers' compensation liability related to policy years 2001 through 2006 and policy year 2017 to a third-party insurer.

We paid $151 million to transfer a portfolio of claims for which we carried reserves of $153 million, recognizing a pre-tax gain of $2 million that was recorded in *Other expenses* in the statement of consolidated income for the year ended December 31, 2023.

Our current accounting policy for releasing income tax effects from other comprehensive income is based on a portfolio approach.

There were no changes in our internal control over financial reporting during the quarter ended December 31, [removed: 2024] [added: 2025] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Based on the criteria for effective internal control over financial reporting established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, management has assessed our internal control over financial reporting as effective as of December 31, [removed: 2024.][added: 2025.]

The independent registered public accounting firm of Deloitte & Touche LLP, as auditors of the consolidated balance sheets of United Parcel Service, Inc. and its subsidiaries as of December 31, [removed: 2024] [added: 2025] and the related statements of consolidated income, consolidated comprehensive income and consolidated cash flows for [removed: the year ended December 31, 2024,] [added: 2025,] has issued an attestation report on our internal control over financial reporting, which is included herein.

We have audited the internal control over financial reporting of United Parcel Service, Inc. and subsidiaries (the "Company") as of December 31, [removed: 2024,] [added: 2025,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2024,] [added: 2025,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the consolidated financial statements as of and for the year ended December 31, [removed: 2024,] [added: 2025,] of the Company and our report dated February [removed: 18, 2025,] [added: 17, 2026,] expressed an unqualified opinion on those financial statements.

February 17, 2026

February 18, 2025

| Carol [removed: B.Tomé] [added: B. Tomé] Chief Executive Officer | | | | | | [removed: 68] [added: 69] | | | | | | Chief Executive Officer (2020 - present), Chief Financial Officer, The Home Depot, Inc. (2001 - 2019). | | |

| Norman M. Brothers, Jr. Executive Vice President; Chief Legal and Compliance Officer and Corporate Secretary | | | | | | [removed: 57] [added: 58] | | | | | | Chief Legal and Compliance Officer and Corporate Secretary (2020 - present), Senior Vice President, General Counsel and Corporate Secretary (2016 - 2020). | | |

| Nando Cesarone Executive Vice President; President, U.S. | | | | | | [removed: 53] [added: 54] | | | | | | President, U.S. (2020 - present), President, UPS International (2018 - 2020), Europe Region Manager (2016 - 2018). | | |

| Darrell Ford Executive Vice President; Chief Human Resources Officer | | | | | | [removed: 60] [added: 61] | | | | | | Chief Human Resources Officer (2021 - Present), Chief Human Resources Officer, DuPont (2018 - 2020), Chief Human Resources Officer, Xerox Corporation (2015 - 2018). | | |

| Matt Guffey Executive Vice President; Chief Commercial and Strategy Officer | | | | | | [removed: 46] [added: 47] | | | | | | Chief Commercial and Strategy Officer (2024 - present), Senior Vice President, Global Strategy (2020 - 2023), President, Corporate Strategy (2020), Marketing Department Manager (2019 - 2020), Product Senior Director (2016 - 2018). | | |

| Kate M. Gutmann Executive Vice President; President International, Healthcare and Supply Chain Solutions | | | | | | [removed: 56] [added: 57] | | | | | | President International, Healthcare and Supply Chain Solutions (2022 - present), Chief Sales and Solutions Officer, Executive Vice President, UPS Global Healthcare (2020 - 2022), Chief Sales and Solutions Officer; Senior Vice President The UPS Store and UPS Capital (2017 - 2019). | | |

| Bala Subramanian Executive Vice President; Chief Digital and Technology Officer | | | | | | [removed: 53] [added: 54] | | | | | | Chief Digital and Technology Officer (2022 - present), Chief Digital Officer, AT&T Inc. (2018 - 2022), Chief Digital Officer, Best Buy Co., Inc. (2017 - 2018). | | |

| Brian Dykes Executive Vice President; Chief Financial Officer | | | | | | [removed: 47] [added: 48] | | | | | | Chief Financial Officer (2024 - present), Senior Vice President, Global Finance and Planning (2023 – 2024), Senior Vice President, Treasury and Global Capital Markets (2020 – 2023), Vice President, Mergers & Acquisitions (2016 – [removed: 2020)] [added: 2020).] | | |

Information about our directors will be presented under the caption "Our Board of Directors" in our definitive proxy statement for our meeting of shareowners to be held on May [removed: 8, 2025] [added: 7, 2026] (the "Proxy Statement") and is incorporated herein by reference.

Information with respect to compliance with Section 16(a) of the Exchange Act will be presented under the caption "Ownership of Our Securities - Delinquent Section 16(a) Reports" in our Proxy Statement and is incorporated herein by reference.

| 3.1 | | | — | | | [Restated Certificate of Incorporation of United Parcel Service, Inc. (incorporated by reference to Exhibit 3.3 to Form [removed: 8-K filed] [added: 8-K](https://www.sec.gov/Archives/edgar/data/1090727/000095012310048282/g23383exv3w3.htm)[,](https://www.sec.gov/Archives/edgar/data/1090727/000095012310048282/g23383exv3w3.htm) [filed] on May 12, 2010).](https://www.sec.gov/Archives/edgar/data/1090727/000095012310048282/g23383exv3w3.htm) | | |

| 4.14 | | | — | | | [Form [removed: of Floating Rate Senior] [added: of](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) [Floating Rate](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) [Senior] Notes [removed: due September 15, 2065 (incorporated] [added: due](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) [September](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) [15,](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) [2065](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) [(incorporated] by reference to [removed: Exhibit 4.1 to] [added: Exhibit](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) [4.1](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) [to] Form 8-K, filed [removed: on September 17,] [added: on](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) [September 17](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm)[,] 2015).](https://www.sec.gov/Archives/edgar/data/1090727/000119312515322556/d52470dex41.htm) | | |

| [removed: 4.15] [added: 4.22] | | | — | | | [Form of [removed: 1.625%] [added: 1.500%] Senior Notes due November 15, [removed: 2025] [added: 2032] (incorporated by reference to Exhibit 4.2 to Form 8-K, filed on November [removed: 20, 2015).](https://www.sec.gov/Archives/edgar/data/1090727/000119312515383705/d20065dex42.htm)] [added: 13, 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517341108/d442730dex42.htm)] | | |

| [removed: 4.16] [added: 4.15] | | | — | | | [Form of Floating Rate Senior Notes due March 15, 2066 (incorporated by reference to Exhibit 4.1 to Form 8-K, filed on April 1, 2016).](https://www.sec.gov/Archives/edgar/data/1090727/000119312516528112/d156911dex41.htm) | | |

| [removed: 4.17] [added: 4.16] | | | — | | | [Form of 2.40% Senior Notes Due November 2026 (incorporated by reference to Exhibit 4.2 to Form 8-K, filed on October 25, 2016).](https://www.sec.gov/Archives/edgar/data/1090727/000119312516745537/d247146dex42.htm) | | |

| [removed: 4.18] [added: 4.17] | | | — | | | [Form of 3.40% Senior Notes Due November 2046 (incorporated by reference to Exhibit 4.3 to Form 8-K, filed on October 25, 2016).](https://www.sec.gov/Archives/edgar/data/1090727/000119312516745537/d247146dex43.htm) | | |

| [removed: 4.19] [added: 4.18] | | | — | | | [Form of 1.00% Senior Notes Due November 2028 (incorporated by reference to Exhibit 4.1 to Form 8-K, filed on October 25, 2016).](https://www.sec.gov/Archives/edgar/data/1090727/000119312516745537/d247146dex41.htm) | | |

| [removed: 4.20] [added: 4.19] | | | — | | | [Form of Floating Rate Senior Notes due March 15, 2067 (incorporated by reference to Exhibit 4.1 to Form 8-K, filed on March 31, 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517106751/d369888dex41.htm) | | |

| [removed: 4.21] [added: 4.20] | | | — | | | [Form of](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm) [5.150](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm)[% Senior Notes due](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm) [](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm)[20](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm)[34](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm) [(incorporated by reference to Exhibit 4.](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm)[1](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm) [to Form 8-K, filed on May](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm) [22](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm)[24](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm)[).](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-1.htm) | | |

| [removed: 4.22] [added: 4.21] | | | — | | | [Form of 4.875% Senior Notes due 2033 (incorporated by reference to Exhibit 4.1 to Form 8-K, filed on February 27, 2023).](https://www.sec.gov/Archives/edgar/data/1090727/000119312523050804/d466921dex41.htm) | | |

| [removed: 4.23] [added: 4.26] | | | — | | | [Form of [removed: 1.500%] [added: 3.050%] Senior Notes due November 15, [removed: 2032] [added: 2027] (incorporated by reference to Exhibit [removed: 4.2] [added: 4.6] to Form 8-K, filed on November [removed: 13, 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517341108/d442730dex42.htm)] [added: 14, 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517342753/d497986dex46.htm)] | | |

| [removed: 4.24] [added: 4.23] | | | — | | | [Form of 5.050% Notes due 2053 (incorporated by reference to Exhibit 4.2 to Form 8-K, filed on February 27, 2023).](https://www.sec.gov/Archives/edgar/data/1090727/000119312523050804/d466921dex42.htm) | | |

| [removed: 4.25] [added: 4.24] | | | — | | | [Form of Floating Rate Senior Notes due 2073 (incorporated by reference to Exhibit 4.1 to Form 8-K, filed on March 7, 2023).](https://www.sec.gov/Archives/edgar/data/1090727/000119312523062960/d468023dex41.htm) | | |

| [removed: 4.26] [added: 4.25] | | | — | | | [Form of](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm) [5.500](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm)[% Senior Notes due](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm) [20](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm)[5](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm)[4 (incorporated by reference to Exhibit 4.](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm)[2](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm) [to Form 8-K, filed on](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm) [May](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm) [](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm)[22](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm)[24](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm)[).](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-2.htm) | | |

| 4.27 | | | — | | | [Form of [removed: 3.050%] [added: 3.750%] Senior Notes due November 15, [removed: 2027] [added: 2047] (incorporated by reference to Exhibit [removed: 4.6] [added: 4.7] to Form 8-K, filed on November 14, [removed: 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517342753/d497986dex46.htm)] [added: 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517342753/d497986dex47.htm)] | | |

| 4.28 | | | — | | | [Form of [removed: 3.750%] [added: Floating Rate] Senior Notes due November 15, [removed: 2047] [added: 2067] (incorporated by reference to Exhibit [removed: 4.7] [added: 4.8] to Form 8-K, filed on November 14, [removed: 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517342753/d497986dex47.htm)] [added: 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517342753/d497986dex48.htm)] | | |

| [removed: 4.29] [added: 4.37] | | | — | | | [Form [removed: of Floating Rate Senior] [added: of](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [Floating Rate](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [Senior] Notes due [removed: November 15, 2067 (incorporated] [added: 20](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[74](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [(incorporated] by reference to Exhibit [removed: 4.8 to] [added: 4.](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[1](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [to] Form [removed: 8-K, filed] [added: 8-K](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[,](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [filed] on [removed: November 14, 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517342753/d497986dex48.htm)] [added: Ma](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[y](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [2](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[8](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[, 202](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[4](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[).](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)] | | |

| [removed: 4.30] [added: 4.29] | | | — | | | [Form of 3.400% Senior Notes due March 15, 2029 (incorporated by reference to Exhibit 4.1 to Form 8-K, filed on March 15, 2019).](https://www.sec.gov/Archives/edgar/data/1090727/000119312519076691/d723791dex41.htm) | | |

| [removed: 4.31] [added: 4.30] | | | — | | | [Form of 4.250% Senior Notes due March 15, 2049 (incorporated by reference to Exhibit 4.2 to Form 8-K, filed on March 15, 2019).](https://www.sec.gov/Archives/edgar/data/1090727/000119312519076691/d723791dex42.htm) | | |

| [removed: 4.32] [added: 4.31] | | | — | | | [Form of](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm) [5.6](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm)[00% Senior Notes due](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm) [2064](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm) [(incorporated by reference to Exhibit 4.](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm)[3](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm) [to Form 8-K filed on](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm) [May 22](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm)[24](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm)[).](https://www.sec.gov/Archives/edgar/data/1090727/000110465924064258/tm2414806d7_ex4-3.htm) | | |

| [removed: 4.33] [added: 4.32] | | | — | | | [Form of 2.500% Senior Notes due September 1, 2029 (incorporated by reference to Exhibit 4.2 to Form [removed: 8-K filed] [added: 8-K](https://www.sec.gov/Archives/edgar/data/1090727/000119312519223579/d772968dex42.htm)[,](https://www.sec.gov/Archives/edgar/data/1090727/000119312519223579/d772968dex42.htm) [filed] on August 16, 2019).](https://www.sec.gov/Archives/edgar/data/1090727/000119312519223579/d772968dex42.htm) | | |

| [removed: 4.34] [added: 4.33] | | | — | | | [Form of 3.400% Senior Notes due September 1, 2049 (incorporated by reference to Exhibit 4.3 to Form [removed: 8-K filed] [added: 8-K](https://www.sec.gov/Archives/edgar/data/1090727/000119312519223579/d772968dex43.htm)[,](https://www.sec.gov/Archives/edgar/data/1090727/000119312519223579/d772968dex43.htm) [filed] on August 16, 2019).](https://www.sec.gov/Archives/edgar/data/1090727/000119312519223579/d772968dex43.htm) | | |

| 4.35 | | | — | | | [Form of [removed: 3.900%] [added: 5.200%] Senior Notes due [removed: 2025] [added: 2040] (incorporated by reference to Exhibit [removed: 4.1] [added: 4.3] to Form [removed: 8-K filed] [added: 8-K](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex43_19.htm)[,](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex43_19.htm) [filed] on March 25, [removed: 2020).](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex41_16.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex43_19.htm)] | | |

| [removed: 4.36] [added: 4.34] | | | — | | | [Form of 4.450% Senior Notes due 2030 (incorporated by reference to Exhibit 4.2 to Form [removed: 8-K filed] [added: 8-K](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex42_20.htm)[,](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex42_20.htm) [filed] on March 25, 2020).](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex42_20.htm) | | |

| [removed: 4.37] [added: 4.36] | | | — | | | [Form of [removed: 5.200%] [added: 5.300%] Senior Notes due [removed: 2040] [added: 2050] (incorporated by reference to Exhibit [removed: 4.3] [added: 4.4] to Form [removed: 8-K filed] [added: 8-K](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex44_17.htm)[,](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex44_17.htm) [filed] on March 25, [removed: 2020).](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex43_19.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex44_17.htm)] | | |

| 4.38 | | | — | | | [Form of [removed: 5.300%] [added: 4.650%] Senior Notes due [removed: 2050] [added: 2030] (incorporated by reference to Exhibit [removed: 4.4] [added: 4.1] to Form [removed: 8-K] [added: 8-K,] filed on [removed: March 25, 2020).](https://www.sec.gov/Archives/edgar/data/1090727/000156459020012646/ups-ex44_17.htm)] [added: May 14, 2025).](https://www.sec.gov/Archives/edgar/data/1090727/000110465925048497/tm2514602d6_ex4-1.htm)] | | |

| [removed: 4.39] [added: 4.42] | | | — | | | [Form [removed: of](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [Floating Rate](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [Senior] [added: of Floating Rate Senior] Notes due [removed: 20](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[74](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [(incorporated] [added: 2075 (incorporated] by reference to Exhibit [removed: 4.](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[1](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [to] [added: 4.1 to] Form [removed: 8-K] [added: 8-K,] filed on [removed: Ma](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[y](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm) [2](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[8](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[, 202](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[4](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)[).](https://www.sec.gov/Archives/edgar/data/1090727/000110465924065573/tm2414806d8_ex4-1.htm)] [added: May 20, 2025).](https://www.sec.gov/Archives/edgar/data/1090727/000110465925050984/tm2514602d7_ex4-1.htm)] | | |

| [removed: 4.40] [added: 97] | | | — | | | [removed: [Description of Securities](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit439.htm) [(incorporated] [added: [Incentive-Based Compensation Clawback Policy](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit97.htm) [](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit97.htm)[(incorporated] by reference to [removed: Exhibit](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit439.htm) [to Form](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit439.htm) [10](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit439.htm)[\-K](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit439.htm) [f](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit439.htm)[or] [added: Exhibit 97 to](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit97.htm) [the](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit97.htm) [Form 10-K for] the year ended December 31, [removed: 2023).](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit439.htm)] [added: 2023).](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit97.htm)] | | |

| 10.1 | | | — | | | [removed: [UPS Retirement Plan Amendment] [added: [Amended] and [removed: Restatement Effective] [added: Restated Restoration Savings Plan, effective as of] January 1, [removed: 2014] [added: 2023] (incorporated by reference to Exhibit [removed: 10.1] [added: 10.3] to Form 10-K for the year ended December 31, [removed: 2014).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072715000008/ups-12312014xexhibit101.htm)] [added: 2022).](https://www.sec.gov/Archives/edgar/data/1090727/000109072723000006/ups-12312022xexhibit103.htm)[*](https://www.sec.gov/Archives/edgar/data/1090727/000109072723000006/ups-12312022xexhibit103.htm)] | | |

| [removed: 10.1(a)] [added: 10.4(a)] | | | — | | | [Amendment No. 1 to [removed: UPS Retirement Plan, as] Amended and [removed: Restated, effective as of June 30, 2016] [added: Restated](https://www.sec.gov/Archives/edgar/data/1090727/000109072713000005/ups-12312012xexhibit1071.htm) [](https://www.sec.gov/Archives/edgar/data/1090727/000109072713000005/ups-12312012xexhibit1071.htm)[Deferred Compensation Plan] (incorporated by reference to Exhibit [removed: 10.1] [added: 10.7(1)] to [added: the] Form [removed: 10-Q] [added: 10-K] for the [removed: quarter] [added: year] ended [removed: June 30, 2016).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072716000074/ups-6302016xex10.htm)] [added: December 31, 2012).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072713000005/ups-12312012xexhibit1071.htm)] | | |

| [removed: 10.1(b)] [added: 10.2] | | | — | | | [Amendment [removed: Four] [added: One] to the Amended and [removed: Restated UPS Retirement] [added: Restated](https://www.sec.gov/Archives/edgar/data/1090727/000119312517214843/d377831dex104.htm) [Excess Coordinating Benefit] Plan effective June 23, 2017 (incorporated by reference to Exhibit [removed: 10.2] [added: 10.4] to Form 8-K, filed on June 27, [removed: 2017).*](https://www.sec.gov/Archives/edgar/data/1090727/000119312517214843/d377831dex102.htm)] [added: 2017).](https://www.sec.gov/Archives/edgar/data/1090727/000119312517214843/d377831dex104.htm)[*](https://www.sec.gov/Archives/edgar/data/1090727/000119312517214843/d377831dex104.htm)] | | |

| [removed: 10.2] [added: 10.2(a)] | | | — | | | [removed: [Amended and Restated UPS 401(k) Savings] [added: [Excess Coordinating Benefit] Plan, [added: as Amended and Restated,] effective as of January 1, [removed: 2023] [added: 2012] (incorporated by reference to Exhibit [removed: 10.2] [added: 10.5] to Form 10-K for the year ended December 31, [removed: 2022).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072723000006/ups-12312022xexhibit102.htm)] [added: 2012).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072713000005/ups-12312012xexhibit105.htm)] | | |

| [removed: 10.3] [added: 10.4] | | | — | | | [removed: [Amended] [added: [Form of](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000006/ups-12312018xexhibits106.htm) [Deferred Compensation Plan as Amended] and Restated [removed: Restoration Savings Plan,] effective [removed: as of] January 1, [removed: 2023] [added: 2012] (incorporated by reference to Exhibit [removed: 10.3 to Form] [added: 10.6 to](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000006/ups-12312018xexhibits106.htm) [the](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000006/ups-12312018xexhibits106.htm) [Form] 10-K for the year ended December 31, [removed: 2022).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072723000006/ups-12312022xexhibit103.htm)] [added: 2018).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000006/ups-12312018xexhibits106.htm)] | | |

| [removed: 10.4] [added: 10.16] | | | — | | | [removed: [Amendment One to the] [added: [Stock Option Program] Amended and Restated [removed: UPS Excess Coordinating Benefit Plan] [added: Terms and Conditions,] effective [removed: June 23, 2017] [added: March 20, 2024] (incorporated by reference to Exhibit 10.4 [removed: to Form 8-K, filed on June 27, 2017).*](https://www.sec.gov/Archives/edgar/data/1090727/000119312517214843/d377831dex104.htm)] [added: to](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000028/ups-03312024xexhibit104.htm) [Form 10-Q for the quarter ended March 31, 2024).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000028/ups-03312024xexhibit104.htm)] | | |

| [removed: 10.4(a)] [added: 10.7] | | | — | | | [removed: [UPS Excess Coordinating Benefit Plan, as] [added: [Stock Option Program] Amended and [removed: Restated,] [added: Restated Terms and Conditions] effective [removed: as of January 1, 2012] [added: November 8, 2018] (incorporated by reference to Exhibit [removed: 10.5 to Form] [added: 10.8(b) to](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000006/ups-12312018xexhibit108b.htm) [the](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000006/ups-12312018xexhibit108b.htm) [Form] 10-K for the year ended December 31, [removed: 2012).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072713000005/ups-12312012xexhibit105.htm)] [added: 2018).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000006/ups-12312018xexhibit108b.htm)] | | |

| [removed: 10.5] [added: 10.14] | | | — | | | [removed: [United Parcel Service, Inc. 2012] [added: [2021] Omnibus Incentive Compensation Plan (incorporated by reference to Annex A to [removed: the Definitive Proxy Statement, filed on March 12, 2012).*](https://www.sec.gov/Archives/edgar/data/1090727/000119312512109162/d270150ddef14a.htm#tx270150_1)] [added: the](https://www.sec.gov/Archives/edgar/data/1090727/000120677421000883/ups3861781-def14a.htm#d386178a063) [Company's](https://www.sec.gov/Archives/edgar/data/1090727/000120677421000883/ups3861781-def14a.htm#d386178a063) [definitive proxy statement](https://www.sec.gov/Archives/edgar/data/1090727/000120677421000883/ups3861781-def14a.htm#d386178a063) [filed](https://www.sec.gov/Archives/edgar/data/1090727/000120677421000883/ups3861781-def14a.htm#d386178a063) [on](https://www.sec.gov/Archives/edgar/data/1090727/000120677421000883/ups3861781-def14a.htm#d386178a063) [March 29, 2021).*](https://www.sec.gov/Archives/edgar/data/1090727/000120677421000883/ups3861781-def14a.htm#d386178a063)] | | |

| [removed: 10.5(a)] [added: 10.3] | | | — | | | [Form of Non-Employee Director Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to [removed: the Quarterly Report on Form] [added: the](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000045/ups-06302019xex101.htm) [Form] 10-Q for the quarter ended June 30, 2019).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000045/ups-06302019xex101.htm) | | |

| [removed: 10.5(b)] [added: 10.3(a)] | | | — | | | [removed: [UPS Stock] [added: [Stock] Option Program Terms and Conditions effective as of January 1, 2012 (incorporated by reference to Exhibit 10.7(4) to the Form 10-K for the year ended December 31, 2011).*](https://www.sec.gov/Archives/edgar/data/1090727/000119312512081067/d274494dex1074.htm) | | |

| [removed: 10.6] [added: 10.11] | | | — | | | [removed: [Form of UPS Deferred Compensation Plan as] [added: [Management Incentive Program] Amended and Restated [added: Terms and Conditions,] effective [removed: January 1, 2012] [added: March 20, 2024] (incorporated by reference to Exhibit [removed: 10.6] [added: 10](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000028/ups-03312024xexhibit102.htm)[.](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000028/ups-03312024xexhibit102.htm)[2] to [removed: Form 10-K] [added: the](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000028/ups-03312024xexhibit102.htm) [Form 10-Q] for the [removed: year] [added: quarter] ended [removed: December] [added: March] 31, [removed: 2018).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072719000006/ups-12312018xexhibits106.htm)] [added: 2024).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000028/ups-03312024xexhibit102.htm)] | | |

| [removed: 10.6(a)] [added: 19] | | | — | | | [removed: [Amendment No. 1 to Amended and Restated UPS Deferred Compensation Plan (incorporated] [added: [Insider Trading Compliance Policy](https://www.sec.gov/Archives/edgar/data/1090727/000109072725000019/ups-insiderxtradingxcomp.htm) [(incorporated] by reference to Exhibit [removed: 10.7(1)] [added: 19] to the Form 10-K for the year ended December 31, [removed: 2012).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072713000005/ups-12312012xexhibit1071.htm)] [added: 2024)](https://www.sec.gov/Archives/edgar/data/1090727/000109072725000019/ups-insiderxtradingxcomp.htm).] | | |

| 4.39 | | | — | | | [Form of 5.250% Senior Notes due 2035 (incorporated by reference to Exhibit 4.2 to Form 8-K, filed on May 14, 2025).](https://www.sec.gov/Archives/edgar/data/1090727/000110465925048497/tm2514602d6_ex4-2.htm) | | |

| 4.40 | | | — | | | [Form of 5.950% Senior Notes due 2055 (incorporated by reference to Exhibit 4.3 to Form 8-K, filed on May 14, 2025).](https://www.sec.gov/Archives/edgar/data/1090727/000110465925048497/tm2514602d6_ex4-3.htm) | | |

| 4.41 | | | — | | | [Form of 6.050% Senior Notes due 2065 (incorporated by reference to Exhibit 4.4 to Form 8-K, filed on May 14, 2025).](https://www.sec.gov/Archives/edgar/data/1090727/000110465925048497/tm2514602d6_ex4-4.htm) | | |

| 4.43 | | | — | | | [Description of Securities](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/descriptionofsecuritiesex.htm) | | |

| 10.20 | | | — | | | [Stock Option Program](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm) [Ame](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm)[nded and Restated](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm) [Terms and Conditions effective as of](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm) [February](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm) [](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm)[4](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm)[26](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm)[.*](https://www.sec.gov/Archives/edgar/data/1090727/000162828026008432/a2026stockoptionprogramter.htm) | | |

| /s/ KEVIN CLARK | | | | | | Director | | | | | | February 17, 2026 | | |

| Kevin Clark | | | | | | | | | | | | | | |

| /s/ JOHN MORIKIS | | | | | | Director | | | | | | February 17, 2026 | | |

| John Morikis | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

| | | | | | | | | |

| 10.15 | | | — | | | [Protective Covenant Agreement between UPS and Bala Subramanian, dated May 24, 2022 (incorporated by reference to Exhibit 10.18 to Form 10-K for the year ended December 31, 2022).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072723000006/ups-12312022xexhibit1018.htm) | | |

| 10.17 | | | — | | | [Form of Separation Agreement and General Release between the Company and Brian Newman (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2024).*](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000045/ups-exhibit101xq22024.htm) | | |

| 10.18 | | | — | | | [United Parcel Service, Inc. 2021 Omnibus Incentive Compensation Plan (incorporated by reference to Annex A to the definitive proxy statement on Schedule 14A filed March 29, 2021).*](https://www.sec.gov/Archives/edgar/data/1090727/000120677421000883/ups3861781-def14a.htm#d386178a063) | | |

| 10.21 | | | — | | | [Amended and Restated UPS 401(k) Savings Plan, effective as of January 1, 2025](https://www.sec.gov/Archives/edgar/data/1090727/000109072725000019/ups-exhibit1021.htm) | | |

| 23 | | | — | | | [Consent of Deloitte & Touche LLP.](https://www.sec.gov/Archives/edgar/data/1090727/000109072725000019/ups-12312024xexhibit23.htm) | | |

| 97 | | | — | | | [UPS Incentive-Based Compensation Clawback Policy](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit97.htm) [](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit97.htm)[(incorporated by reference to Exhibit 97 to Form 10-K for the year ended December 31, 2023).](https://www.sec.gov/Archives/edgar/data/1090727/000109072724000008/ups-12312023xexhibit97.htm) | | |

| /s/ MICHAEL J. BURNS | | | | | | Director | | | | | | February 18, 2025 | | |

| Michael J. Burns | | | | | | | | | | | | | | |