Actual experience may differ materially from these estimates and, therefore, produce a material difference between estimated and actual operating results.

Forwarding revenue was impacted by the following: •International airfreight revenue decreased approximately $480 million, as challenging economic conditions and lockdowns in China drove a decline in customer demand during the year.

Macroeconomic factors, including rising interest rates and inflation, and the shift in consumer spending back towards services and in-store shopping also contributed to the residential volume decline.

These declines were the result of an overall reduction in consumer demand for all of the reasons discussed above.

Volume also declined during the year, driven by lower customer demand.

The decline in Asia export trade lanes was also driven by COVID-19 lockdowns, which resulted in fewer flights being operated throughout the year and reduced business activity within China and Hong Kong.

Lower demand coupled with higher capacity, particularly in the fourth quarter of 2022, resulted in a decline in the market rates we charge for services, including demand-related surcharges that were elevated in the first quarter of the year.•Revenue in our truckload brokerage business decreased approximately $300 million, as volume and market rates declined.

As a result of expected market conditions, we anticipate that volume will remain challenged and that market rates within all of our Forwarding businesses during the first half of 2023 will be lower than the first half of 2022.

Export volume decreased for the year driven by reduced intra-Europe activity, as well as lower volumes on the Asia and U.S. export trade lanes.

Our premium products saw volume decline 3.0%, primarily from our Express Saver product which was impacted by lower volumes from certain large customers as a result of the economic factors and COVID-19 disruptions discussed above.

A number of macroeconomic factors contributed to a challenging operating environment in 2022, including global inflation and rising interest rates, recessionary forecasts, wage and labor market pressures, geopolitical uncertainties and foreign currency exchange rates relative to the United States ("U.S.") Dollar.

Business-to-consumer volume decreased 17.2%, as challenging global economic conditions, including high inflation, high energy costs, COVID-19 lockdowns in China and geopolitical uncertainty, impacted consumer demand.

Operating Profit and MarginAs a result of the factors described above, operating profit decreased $320 million, with operating margin decreasing 180 basis points to 22.0%.

These declines were partly offset by successful revenue quality initiatives.•The remaining reduction in revenue was attributable to ocean freight forwarding as a result of a significant decline in market rates in the second half of the year, particularly on the Asia to U.S. lane.

Domestic volume declines were largest in Europe and Canada, where macroeconomic conditions and the year-over-year impact of COVID-19 restrictions on e-commerce spending resulted in lower residential deliveries.

Volume in our non-premium products decreased 1.4%, driven by declines in our Worldwide products.

In Supply Chain Solutions, the decrease in revenue was driven by volume and market rate declines in Forwarding, as well as the impact of divesting UPS Freight in 2021.

Adjusted operating profit decreased $301 million and adjusted operating margin decreased 180 basis points to 22.4%.Substantially all of our operations in Russia and Belarus remain suspended and are being wound down, and our operations in Ukraine remain suspended.

These factors resulted in disruptions to certain parts of our business, negatively impacted demand for our services and contributed to increases in certain of our operating costs.

We experienced lower volumes from certain large customers on U.S. export trade lanes, due to the strength of the U.S. Dollar and the economic factors discussed above.

•Return on Assets ($4.1 billion pre-tax loss): In 2022, the actual rate of return on plan assets was lower than our expected rate of return, primarily due to weaker global equity and U.S. bond market performance.

Volume from both large customers and SMBs declined, driven by declines in the retail and technology sectors.

The decline in residential shipments was driven by declines from our largest customer in accordance with our agreed upon contract terms as we continued to execute within our strategy.

In our Next Day Air and Deferred products, revenue per piece growth was negatively impacted by a reduction in average billable weight per piece.

We continued to be affected by COVID-19 lockdowns in China that impacted both manufacturing and supply chains.

We expect year-over-year volume growth in the first half of 2023 to be negative, with economic conditions and volume growth rates improving in the second half of the year.

These global economic conditions also impacted business-to-business volume, which decreased 2.9%.

Within our Air products, average daily volume decreases were driven by lower volumes from certain large customers, as well as shifts in product preferences during the second half of the year.

Ground residential average daily volume decreased 4.3%, driven by the declines discussed above.

Intra-Europe declines resulted from overall economic conditions.

Excludes the $46 million pre-tax gain recognized as part of the divestiture of UPS Freight for the year ended December 31, 2021.34UNITED PARCEL SERVICE, INC. AND SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONSRevenueTotal revenue within Supply Chain Solutions decreased for the year.

However, if near-term economic conditions change our assumptions unfavorably, or result in the reporting unit being unable to meet forecasts, there could be a more significant decrease in the estimated fair value of the trade name, which may result in an impairment.

In the first half of the year, volume growth was also impacted by the year-over-year effect of COVID-19 restrictions on consumer e-commerce spending.

We expect our transition services revenue to decline in 2023 as the acquirer of UPS Freight begins to exit these arrangements.

We believe the fair value of the Roadie reporting unit continues to exceed its carrying value; however, if the cost of capital increases or the business does not meet forecasts, we may incur an impairment charge in the future.

This situation could lead to an excess of aircraft, resulting in an impairment charge or reduction in expected useful life that may result in increased depreciation expense.

MixFuelSurchargeTotal RevenueChange2022 vs. 2021(2.8)%4.3 %5.0 %6.5 %Revenue also benefited from one additional operating day in 2022 compared to 2021.28UNITED PARCEL SERVICE, INC. AND SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONSVolumeAverage daily volume decreased, driven by a 5.1% reduction in residential shipments.

We expect volume declines and inflationary pressures will continue to impact our costs in 2023.

Commercial activity increased in the first half of the year, but declined in the second half of 2022, primarily from industry sectors that are more sensitive to the macroeconomic factors discussed above.

The UPS Freight divestiture in 2021 drove a decrease of $260 million.

We expect we may experience additional uncertainty related to the upcoming renegotiation of certain of our union labor agreements.

Goodwill impairment charges could have a material impact on our results of operations.

Adverse changes in volume forecasts, or a shortfall in our actual volume compared with our projections, could result in our current aircraft capacity exceeding current or projected demand.

If the cost of capital used in our July 1st test increased by 150 basis points, it is reasonably possible that the reporting unit would be impaired.

Lower volume and revenue in forwarding and the impact of divesting UPS Freight in the second quarter of 2021 more than offset strong revenue growth in logistics and a number of our other businesses.

Domestic expense decreased $254 million, driven by a reduction in ground volume handled by third-party carriers as a result of network optimization initiatives.

Despite the challenging macroeconomic environment, our strategic execution strengthened our balance sheet and resulted in the generation of strong cash flows for the year.

In the U.S. Domestic Package segment, revenue growth resulted from higher fuel revenue, driven by increases in both price per gallon and in fuel surcharge rates as part of our pricing initiatives, as well as improvements in revenue quality and customer mix.

•Revenue in our mail services business increased approximately $160 million as a result of volume from new customers, rate increases and a favorable shift in product characteristics.

We experienced year-over-year revenue increases, driven by customer expansion, revenue quality initiatives and increased demand for warehousing services.

Operating Profit and MarginAs a result of the factors described above, total operating profit increased $43 million, with operating margin increasing 90 basis points to 10.8%.

We expect our productivity initiatives will continue to help offset rising compensation and benefit costs.

Operating Profit and Margin As a result of the factors described above, operating profit increased $561 million, with operating margin increasing 20 basis points to 10.9%.

Rates and Product Mix Revenue per piece in our Air and Ground products increased for the full year, driven by base rate increases and other pricing actions, and favorable changes in customer mix.

Total revenue per piece increased 7.6%, primarily due to fuel surcharges and favorable shifts in customer and product mix as we executed on revenue quality initiatives.

In our International Package segment, revenue increased slightly, driven by fuel revenue, revenue quality actions and favorable shifts in customer and product mix.

Revenue within our Logistics businesses increased as a result of the following factors:•Healthcare logistics revenue increased approximately $360 million, driven by clinical trials and pharmaceuticals.

Revenue from transition services provided to the acquirer of UPS Freight increased and revenue from our service contracts with the U.S. Postal Service also increased.

Revenue in Supply Chain Solutions decreased.•Operating expenses increased, driven by higher fuel prices and higher compensation and benefits expense, primarily in our U.S. Domestic Package segment.•Operating profit and operating margin increased, with the increases coming from the U.S. Domestic Package segment and Supply Chain Solutions, while operating profit and operating margin declined in the International Package segment.•We reported net income of $11.5 billion and diluted earnings per share of $13.20.

We anticipate moderate revenue per piece growth in 2023 as we continue to execute on pricing initiatives within our strategy.

We also completed the acquisition of Delivery Solutions, a digital platform that optimizes customer deliveries across multiple networks, and the acquisition of Bomi Group, which will accelerate our growth in healthcare logistics by expanding our footprint and bringing additional expertise in cold chain logistics.

Ground commercial volume increased 0.6%, driven by growth from SMBs and large customers in the first half of 2022 that was largely offset by volume declines in the second half of the year.

[Reserved]21Item 7.Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewWe continue to execute our Customer First, People Led, Innovation Driven strategy, focusing on the parts of our market that value our integrated global network and building capabilities that matter to our customers.

Excluding the impact of these gains, adjusted investment and other income increased $167 million, driven by higher yields on higher average invested balances and foreign currency gains.

Fuel surcharge revenue increased $3.0 billion, driven by increases in price per gallon and increases in fuel surcharges as part of our pricing initiatives.

Excluding the impact of currency, revenue per piece increased 13.5%.Export revenue per piece increased 5.0% for the reasons described above.

Excluding the impact of currency, export revenue per piece increased 9.6%.Domestic revenue per piece increased 2.1% for the reasons described above.

•The remaining revenue growth was within our other distribution operations.

Total international fuel surcharge revenue increased by $1.2 billion, driven primarily by increases in price per gallon as well as changes in fuel surcharge rates as part of our pricing strategy.

We are shifting our strategic framework to Better and Bolder by seeking to enhance customer engagement through combining our network with digital capabilities to drive new services, while at the same time increasing efficiencies and remaining disciplined with capital allocation.

These increases were partially offset by lower purchased transportation costs due to a reduction in ground volume handled by third-party carriers and continued productivity initiatives as we executed within our strategy.

Total cost per piece increased 9.2% for the year and adjusted cost per piece increased 8.6%, for the reasons described above.

We expect market volume and rates will remain low through at least mid-2023, which will reduce our purchased transportation costs.

We made discretionary contributions to our qualified U.S. pension plans of $1.9 billion in 2022 compared to $0.2 billion in 2021.Our working capital benefited from an improvement in collections that was partially offset by increases in duty and tax settlements on behalf of our customers due to the timing of payments.

In the first quarter of 2023, we increased our quarterly dividend from $1.52 to $1.62 per share.

The cost of operating our integrated air and ground network increased $858 million and pickup and delivery costs increased $1.5 billion.

Expenses decreased, driven by lower transportation costs in Forwarding and a reduction in operating expenses due to the divestiture of UPS Freight.

Expenses increased due to higher fuel prices and higher compensation and benefits costs, which were partially offset by declines in purchased transportation costs and higher productivity as we executed our strategy.

Other indirect operating costs increased $498 million and package sorting costs increased $163 million.

•The UPS Freight divestiture in 2021 resulted in a $328 million decrease in compensation costs.

We expect growth to continue in 2023, including revenue from Bomi Group, which we acquired in the fourth quarter.

Demand-related surcharges contributed slightly to the growth in revenue per piece, although we experienced a decline in these surcharges during the latter part of the year.

The UPS Freight divestiture in 2021 reduced expense by $53 million.•Vacation, excused absence, payroll taxes and other expenses increased $248 million, driven by wage growth and additional discretionary payments.

We expect a reduction in fuel surcharge revenue in 2023 based on the current commodity market outlook.29UNITED PARCEL SERVICE, INC. AND SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONSOperating ExpensesOperating expenses and adjusted operating expenses increased year over year.

Rates in our airfreight and truckload brokerage businesses are expected to stabilize in the latter half of 2023.

This was partially offset by the impacts of higher fuel surcharges and rate increases.•International expense decreased $194 million, primarily due to a reduction in air charter expense in the second half of the year and favorable currency movements.

United Parcel Service  is an American multinational package delivery and supply chain management company. Along with the central package delivery operation, the UPS brand name  is used to denote many of its divisions and subsidiaries, including its cargo airline , freight-based trucking operation , and its delivery drone airline . The global logistics company is headquartered in the U.S. city of Sandy Springs, Georgia, which is a part of the Greater Atlanta metropolitan area.

United Parcel Service, Inc. provides letter and package delivery, specialized transportation, logistics, and financial services. It operates through three segments: U.S. Domestic Package, International Package, and Supply Chain & Freight. The U.S. Domestic Package segment offers time-definite delivery of letters, documents, small packages, and palletized freight through air and ground services in the United States. The International Package segment provides guaranteed day and time-definite international shipping services in Europe, the Asia Pacific, Canada and Latin America, the Indian sub-continent, the Middle East, and Africa. This segment offers guaranteed time-definite express options, including Express Plus, Express, and Express Saver. The Supply Chain & Freight segment provides international air and ocean freight forwarding, customs brokerage, distribution and post-sales, and mail and consulting services in approximately 220 countries and territories; and less-than-truckload and truckload services to customers in North America. This segment also offers truckload brokerage services; supply chain solutions to the healthcare and life sciences industry; shipping, visibility, and billing technologies; and financial, insurance, and payment services. The company operates a fleet of approximately 125,000 package cars, vans, tractors, and motorcycles; and owns 52,000 containers that are used to transport cargo in its aircraft. United Parcel Service, Inc. was founded in 1907 and is headquartered in Atlanta, Georgia.

Today's Research Daily features new research reports on 16 major stocks, including Microsoft Corporation (MSFT), Novo Nordisk A/S (NVO) and United Parcel Service, Inc. (UPS).

Top Analyst Reports for Microsoft, Novo Nordisk & United Parcel

Today we're going to take a look at the well-established United Parcel Service, Inc. ( NYSE:UPS ). The company's stock...

Is It Time To Consider Buying United Parcel Service, Inc. (NYSE:UPS)?

If you buy and hold a stock for many years, you'd hope to be making a profit. Better yet, you'd like to see the share...

United Parcel Service (NYSE:UPS) sheds 3.3% this week, as yearly returns fall more in line with earnings growth

These companies are directly rewarding shareholders with passive income.

3 Under-Appreciated Dividend Stocks That Just Raised Their Payouts to Record Highs

In the closing of the recent trading day, United Parcel Service (UPS) stood at $150.57, denoting a +0.31% change from the preceding trading day.

United Parcel Service (UPS) Exceeds Market Returns: Some Facts to Consider

We've also got a look at 3M's spinoff, gold prices, and the beef industry.

How's AT&T Handling Things?

Following the introduction of the new service by UPS, shipments picked up from customers in certain Asia-Pacific economies can be delivered to Australia the next business day.

UPS Boosts Shipment Delivery Between Asia-Pacific & Australia

UPS (NYSE: UPS) is now offering customers in leading Asia Pacific economies faster delivery to and from Australia after launching a new flight connecting the company's intra-Asia hub in Shenzhen (SZX) to Sydney Kingsford Smith Airport (SYD).

UPS NOW OFFERS NEXT-DAY DELIVERY BETWEEN ASIA AND AUSTRALIA

An analyst recently took a glass-half-full look at the transportation giant's prospects.

Is UPS Stock Going to $180? 1 Wall Street Analyst Thinks So

The transportation giant's stock continues to divide bulls and bears. Here are both sides to the story.

Is UPS Stock a Buy?

Looking at the universe of stocks we cover at Dividend Channel, on 3/12/20, Fortress Transportation &amp; Infrastructure Investors LLC (Symbol: FTAI), Schneider National Inc (Symbol: SNDR), and L3Harris Technologies Inc (Symbol: LHX) will all trade ex-dividend for their respective upcoming dividends.

Ex-Dividend Reminder: Fortress Transportation &amp; Infrastructure Investors, Schneider National and L3Harris Technologies

Raises for teachers, a mix of pay increases for other Virginia government workers and some significant transportation studies in Northern Virginia are among many pieces of a $135 billion state budget deal revealed Monday afternoon. These are amendments to Gov. Ralph Northam’s introduced budget, which remains otherwise broadly intact given the ...

Va. budget includes teacher raises, college costs, transportation changes

The Transportation Security Administration saw a higher than usual drop in staff during the partial government shutdown and its aftermath last year when several thousand security checkpoint officers abandoned the agency, according to federal data obtained by the Washington Examiner. Attrition numbers provided by TSA show 2,928 officers left the ...

Transportation Security Administration bled officers amid last year&#39;s government shutdown

Governor Doug Ducey appointed Gilbert Mayor Jenn Daniels to the State Transportation Board. Daniels recently said she wouldn&#39;t run again for mayor.

Gov. Ducey appoints outgoing Gilbert mayor to State Transportation Board

To keep yourself and others around you safe from COVID-19, you&#39;ll have to travel safely, self-quarantine, stock up on food, and keep your home clean.

What to do if you get the coronavirus, from transportation to ordering food

BREAKING NEWS: Joe Biden has won the Democratic primary in Michigan, AP projects. Click for more … ST. PAUL, Minn. (KEYC) — The proposed legislation that would see the Minnesota Department of Transportation (MnDOT) apply for a federal loan and federal transportation grant to fund the Highway 14 expansion project between New Ulm and Nicollet passed out of the Senate Transportation Finance and Policy Committee on Tuesday.

Highway 14 legislation passes Senate Transportation Finance &amp; Policy Committee

KALAMAZOO, MI -- Voters approved a tax to fund the Kalamazoo County public transportation system. Voters approved a five-year, 0.9-mill millage tax to help fund the Central County Transportation Authority.

Kalamazoo voters approve tax to fund public transportation

A major Chicago transportation conference set for next week is the latest event to be canceled amid the coronavirus outbreak.

Chicago transportation conference canceled over coronavirus fears

The National Gallery of Art has postponed its much-anticipated exhibition “A Superb Baroque: Art in Genoa, 1600–1750” because of the global coronavirus crisis. Set to open May 3, the exhibition would have been the United States’ first major examination of the Genoese baroque, with more than 100 paintings, sculptures, drawings and prints ...

National Gallery postpones landmark exhibition; coronavirus crisis in Italy delays transportation of artwork

Over salmon and eggs at the swank, Michelin-stared restaurant at the Museum of Modern Art last Thursday, transportation leaders from across New York City gazed at MoMA&#39;s renowned sculpture garden, listened to the wisdom of presidential historian Timothy Naftali and mingled with the likes of MTA Chairman Pat Foye, New York City Transportation ...

(USD)	Dec 2023	Q/Q
Revenue	24.9B	+18%
Operating Income	2.5B	+84%
Operating Expenses	22.4B	-
Net Income	1.6B	+42%
Compensation	12.9B	+12%
Amortization	867MM	+4%
Interest Expense	207MM	+4%