UPS - United Parcel Service Inc.

05/06/2026 | Press release | Distributed by Public on 05/06/2026 13:01

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
We continue to execute our Customer First, People Led and Innovation Driven strategy to grow in the most attractive parts of the market including healthcare, small and medium-sized businesses ("SMBs") and international. During the first quarter of 2026, we took several steps in furtherance of this strategy, including continued targeted volume reduction from our largest customer, the deliberate shift in our business to increase our focus on higher yielding volume and progress on previously announced initiatives related to workforce optimization and the outsourcing of last-mile delivery of a portion of our Ground Saver product to the United States Postal Service ("USPS"), as well as related network capacity actions. As previously disclosed, by June 2026 we expect to complete our targeted volume reduction from our largest customer by more than 50% from 2024 levels.
We also continued to progress on our Network of the Future initiative, which is intended to enhance the efficiency of our U.S. Domestic Package network through automation and operational sort consolidation. Our related Network Reconfiguration initiative expanded our Network of the Future initiative, and has led, and could continue to lead, to further consolidations in facilities, vehicles, aircraft and workforce, as well as an end-to-end process redesign. We launched our Efficiency Reimagined initiatives to undertake the end-to-end process redesign effort which will align our organizational processes to the network reconfiguration. See Supplemental Information - Items Affecting Comparability for additional discussion of this initiative.
In addition, we continued a number of initiatives supporting growth in healthcare and international markets. We advanced the integration of Andlauer Healthcare Group ("AHG") to further strengthen our healthcare logistics capabilities. Internationally, we invested in network enhancements, including expansion at our Incheon, South Korea hub, in Taiwan we opened our largest and most advanced logistics center in the region and in Europe we executed initiatives to improve ground speed, all of which are intended to support premium volume growth and revenue quality.
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 ("SCS").
Our financial results for the three months ended March 31, 2026 reflected the impact of a complex macro environment, including volatile global markets, higher fuel costs arising from the conflict in the Middle East, as well the impact of our strategic actions. We also experienced certain cost pressures that we expect to abate in the second quarter of 2026. Our focus on revenue quality has delivered several consecutive quarters of product and customer mix improvements.
For the three months ended March 31, 2026, consolidated revenue was $21.2 billion, consolidated operating profit was $1.3 billion, and operating margin was 6.0%. We also returned $1.4 billion of cash to shareholders through dividends.
Highlights of our consolidated results compared to our results for the three months ended March 31, 2025, which are discussed in more detail below, include:
Three Months Ended
March 31, 		Change
2026 2025 $ %
Revenue (in millions) $ 21,202 $ 21,546 $ (344) (1.6) %
Operating Expenses (in millions) 19,935 19,880 55 0.3 %
Operating Profit (in millions) $ 1,267 $ 1,666 $ (399) (23.9) %
Operating Margin 6.0 % 7.7 %
Net Income (in millions) $ 864 $ 1,187 $ (323) (27.2) %
Basic Earnings Per Share $ 1.02 $ 1.40 $ (0.38) (27.1) %
Diluted Earnings Per Share $ 1.02 $ 1.40 $ (0.38) (27.1) %
Operating Days 62 62
Average Daily Package Volume (in thousands) 19,184 20,789 (7.7) %
Average Revenue Per Piece $ 15.32 $ 14.22 $ 1.10 7.7 %
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
•Average daily package volume in our global small package operations decreased driven primarily by continued progress of planned volume declines from our largest customer, revenue quality actions, including those affecting certain e-commerce customers, and the impact of 2025 trade policy changes.
•Revenue declined driven by the average daily volume declines described above and decreases in our Mail Innovations volume, partially offset by improved revenue quality and benefits from our focus on higher yielding volume and the impact of the AHG acquisition in the fourth quarter of 2025.
•Operating expenses increased, primarily due to transition costs and excess operational staffing associated with outsourcing our Ground Saver product to the USPS, increased third-party lease expense to address capacity constraints resulting from fourth quarter 2025 aircraft retirements, higher workers' compensation expense, increased depreciation due to new investments, 2025 impairments of certain assets within our digital businesses and weather-related costs. This increase was partially offset by benefits from execution of our Network Reconfiguration and Efficiency Reimagined initiatives, as we were able to reduce headcount and labor hours to align with the volume decline described above. Expenses also decreased as a result of a decline in volume in our Mail Innovations business.
•Operating profit and operating margin decreased primarily due to the lower volumes in our global small package operations and the cost pressures described above, partially offset by the impact of revenue quality efforts and improvements within SCS.
•We reported net income of $864 million and diluted earnings per share of $1.02. Non-GAAP adjusted diluted earnings per share were $1.07 after adjusting for the after-tax impacts of transformation strategy costs of $42 million, or $0.05 per diluted share.
For additional operational results for the quarter specific to our segments, refer to Results of Operations - Segment Review below.
In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act. As of March 31, 2026, no amounts related to potential tariff refunds or amounts refundable to customers for tariffs previously paid have been recognized. We will continue to monitor and evaluate the financial statement impact of related developments. For additional information on tariffs, see note 10 to the unaudited, consolidated financial statements included in this report.
Supplemental Information - Items Affecting Comparability
We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP adjusted financial measures.
Non-GAAP adjusted financial measures should be considered in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP adjusted financial measures do not represent a comprehensive basis of accounting and therefore may not be comparable to similarly titled measures reported by other companies.
Non-GAAP adjusted amounts reflect the following (in millions):
Three Months Ended
March 31,
Non-GAAP Adjustments 2026 2025
Operating Expenses:
Transformation Strategy Costs:
Transformation 2.0 $ - $ 16
Fit to Serve - 19
Network Reconfiguration and Efficiency Reimagined
55 23
Total Transformation Strategy Costs 55 58
Goodwill and Asset Impairment Charges
- 39
Total Non-GAAP Adjustments to Operating Expenses
$ 55 $ 97
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Three Months Ended
March 31,
Non-GAAP Adjustments 2026 2025
Other Income and (Expense):
Goodwill and Asset Impairment Charges $ - $ 19
Total Non-GAAP Adjustments to Other Income
$ - $ 19
Total Non-GAAP Adjustments to Income Before Income Taxes
$ 55 $ 116
Three Months Ended
March 31,
Non-GAAP Adjustments 2026 2025
Income Tax (Benefit) Expense:
Transformation Strategy Costs:
Transformation 2.0 $ - $ 4
Fit to Serve - 4
Network Reconfiguration and Efficiency Reimagined
13 6
Total Transformation Strategy Costs 13 14
Goodwill and Asset Impairment Charges
- 9
Reversal of Income Tax Valuation Allowance - 10
Total Non-GAAP Adjustments to Income Tax Expense
$ 13 $ 33
Total Adjustments to Non-GAAP Net Income $ 42 $ 83
The income tax impacts of these items are calculated at the statutory tax rates applicable in each tax jurisdiction.
We supplement the presentation of operating profit, operating margin, other income and (expense), income before income taxes, net income and earnings per share with non-GAAP financial measures that exclude the impact of the following:
Transformation Strategy Costs
We exclude the impact of charges related to activities within our transformation strategy. Our transformation strategy activities have spanned several years and are designed to fundamentally change the spans and layers of our organization structure, processes, technologies and the composition of our business portfolio. Our transformation strategy has included initiatives within our Transformation 2.0, Fit to Serve, and Network Reconfiguration and Efficiency Reimagined programs.
Various circumstances precipitated these initiatives, including identification and prioritization of certain investments, developments and changes in competitive landscapes, inflationary pressures, consumer behaviors, and other factors including post-COVID normalization and volume diversions attributed to our 2023 labor negotiations.
Our transformation strategy includes the following programs and initiatives:
Transformation 2.0: We reduced spans and layers of management, reviewed and refined our business portfolio and invested in certain technologies to reduce costs, increase visibility and reduce reliance on legacy systems. Costs associated with Transformation 2.0 consisted primarily of compensation and benefit costs related to reductions in our workforce and fees paid to third-party consultants. This initiative was completed in 2025.
Fit to Serve: We undertook our Fit to Serve initiative to right-size our business to create a more efficient operating model that was more responsive to market dynamics through a workforce reduction, primarily within management. This initiative was completed in 2025.
Network Reconfiguration and Efficiency Reimagined: Our Network of the Future initiative is intended to enhance the efficiency of our network through automation and operational sort consolidation in our U.S. Domestic Package network. In connection with our strategic execution of planned volume declines from our largest customer, we began our Network Reconfiguration initiative, which is an expansion of Network of the Future and has led, and could continue to lead to further reductions in our facilities, vehicles, aircraft and workforce, as well as an end-to-end process redesign. We launched our
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Efficiency Reimagined initiatives to undertake the end-to-end process redesign effort which will align our organizational processes to the network reconfiguration. Through these initiatives we have reduced our operational workforce and closed certain daily operations at leased and owned buildings. We continue to review expected changes in volume in our integrated air and ground network to identify additional workforce reductions and buildings for closure. In the first quarter of 2026, we closed 23 leased and owned buildings, 22 of which have been permanently closed as of March 31, 2026. We have identified 27 additional buildings for closure in 2026. We will continue to review expected changes in volume in our integrated air and ground network and may identify additional workforce reductions and buildings for closure. In the first three months of 2026, we achieved approximately $600 million of program cost savings, and expect to achieve approximately $3 billion in full year-over-year cost savings from this initiative in 2026.
In connection with these Network Reconfiguration and Efficiency Reimagined programs, we expect non-GAAP adjusted operating expense to exclude between $1.3 and $1.5 billion in cost during 2026, primarily related to employee separation benefits and third-party consulting fees of which $1.2 billion will be related to the Driver Choice Program. As of March 31, 2026, we had incurred program costs to date of $599 million, including $55 million in 2026. These initiatives are expected to conclude by 2027.
We do not consider the related costs to be ordinary because each program involves separate and distinct activities that may span multiple periods and are not expected to drive incremental revenue, and because the scope of the programs exceeds that of routine, ongoing efforts to enhance profitability. These initiatives are in addition to ordinary, ongoing efforts to enhance our business performance.
In addition, we have incurred and expect to continue to incur other costs and benefits associated with our Network Reconfiguration programs and anticipated lower volumes, including early asset retirement, lease related costs and gains from the sale of properties. It is our intention to exit or abandon leases, sell property and transfer or dispose of equipment associated with closed facilities. During the first quarter of 2026, we recorded $47 million in gains on sales of properties. We expect the costs and benefits associated with these actions may increase should we determine to close additional buildings.
For more information regarding transformation strategy costs, see note 16 to the unaudited, consolidated financial statements.
Goodwill and Asset Impairments
We exclude the impact of goodwill and certain asset impairment charges. We do not consider these charges when evaluating the operating performance of our business units, making decisions to allocate resources or in determining incentive compensation awards. For more information regarding goodwill and asset impairment, see note 7 to the unaudited, consolidated financial statements.
Reversal of Income Tax Valuation Allowance
We previously recorded non-GAAP adjustments for transactions that resulted in capital loss deferred tax assets not expected to be realized. As a result of property sales during 2025, these capital losses were fully realized within the 2025 financial reporting period. We supplement our presentation with non-GAAP adjusted financial measures that exclude the impact of the reversals of the valuation allowances against these deferred tax assets as we believe such treatment is consistent with how the valuation allowance was initially established.
Non-GAAP Adjusted Cost per Piece
We evaluate the efficiency of our operations using various metrics, including non-GAAP adjusted cost per piece. Non-GAAP adjusted cost per piece is calculated as non-GAAP adjusted operating expenses in a period divided by total volume for that period. Because non-GAAP adjusted operating expenses exclude costs or charges that we do not consider a part of underlying business performance when monitoring and evaluating the operating performance of our business units, making decisions to allocate resources or in determining incentive compensation awards, we believe this is the appropriate metric on which to base reviews and evaluations of the efficiency of our operational performance.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations - Segment Review
The results and discussions that follow are reflective of how management monitors and evaluates the performance of our segments as defined in note 12 to the unaudited, consolidated financial statements.
Certain operating expenses are allocated between our reporting segments using activity-based costing methods. These activity-based costing methods require us to make estimates that impact the amount of each expense category that is attributed to each segment. Our allocation methodologies are refined periodically, or as necessary to reflect changes in our businesses. There were no significant changes to our allocation methodologies in the first quarter of 2026.
As a normal part of managing our air network, we routinely idle aircraft and engines temporarily for maintenance or to adjust network capacity. As of March 31, 2026, we had two aircraft temporarily idled for an average period of approximately seven months in order to better match capacity with current demand. Temporarily idled assets are classified as held-and-used, and we continue to record depreciation expense for these assets. We expect these aircraft to return to operational service during the fourth quarter of 2026. Following the permanent grounding and retirement of our MD-11 fleet in the fourth quarter of 2025, we experienced increased third-party lease expense to address capacity constraints. During the first quarter of 2026, we took delivery of three Boeing 767-300 aircraft, which were accounted for as finance leases, and began to reduce the associated third-party expense.
We test goodwill for impairment annually at July 1 and between annual tests if an event occurs or circumstances change that would indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Testing goodwill for impairment requires that we make a number of significant assumptions, including assumptions related to projections of future revenues, costs, capital expenditures, working capital, our cost of capital, long-term growth rates, market comparables and discount rates. We are also required to make assumptions relating to our overall business and operating strategy, and the regulatory and market environment.
For each of our reporting units, we continue to monitor the impact of macroeconomic conditions and business performance on our estimates of fair value. During the three months ended March 31, 2026, none of our reporting units had indications that an impairment was more likely than not. As of our July 1, 2025 testing date, approximately $877 million and $738 million of our $4.8 billion consolidated goodwill balance was represented by our Global Freight Forwarding ("GFF") and Healthcare Logistics and Distribution ("HLD") reporting units, respectively, included in SCS. Based on our most recent annual impairment evaluation, both reporting units exhibited a limited excess of fair value above carrying value and reflect a greater risk of an impairment occurring in future periods. An interim quantitative test for goodwill impairment performed in the fourth quarter of 2025 on the GFF reporting unit did not result in an impairment. For further discussion see note 7 to the audited, consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
Challenging macroeconomic and uncertain geopolitical conditions, actual reporting unit performance, revisions to our forecasts of future performance or other factors, including market comparables, may negatively impact certain estimates and assumptions that we use in determining our reporting units' fair values. Such impacts may be more pronounced for reporting units whose fair values do not significantly exceed their carrying values. These factors or a combination thereof could result in a non-cash impairment charge in one or more of our reporting units during a future period.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
U.S. Domestic Package
Three Months Ended
March 31, 		Change
2026 2025 $ %
Average Daily Package Volume (in thousands):
Next Day Air 1,366 1,520 (10.1) %
Deferred 806 866 (6.9) %
Ground 13,868 15,057 (7.9) %
Total Average Daily Package Volume 16,040 17,443 (8.0) %
Average Revenue Per Piece:
Next Day Air $ 27.79 $ 25.05 $ 2.74 10.9 %
Deferred 20.91 19.54 1.37 7.0 %
Ground 12.14 11.47 0.67 5.8 %
Total Average Revenue Per Piece $ 13.91 $ 13.06 $ 0.85 6.5 %
Operating Days in Period 62 62
Revenue (in millions):
Next Day Air $ 2,354 $ 2,361 $ (7) (0.3) %
Deferred 1,045 1,049 (4) (0.4) %
Ground 10,438 10,709 (271) (2.5) %
Cargo and Other 288 341 (53) (15.5) %
Total Revenue $ 14,125 $ 14,460 $ (335) (2.3) %
Operating Expenses (in millions):
Operating Expenses $ 13,610 $ 13,481 $ 129 1.0 %
Non-GAAP Adjustments to Operating Expenses
Transformation Strategy Costs (50) (32) (18) 56.3 %
Non-GAAP Adjusted Operating Expenses $ 13,560 $ 13,449 $ 111 0.8 %
Operating Profit (in millions) and Operating Margin:
Operating Profit $ 515 $ 979 $ (464) (47.4) %
Non-GAAP Adjusted Operating Profit $ 565 $ 1,011 $ (446) (44.1) %
Operating Margin 3.6 % 6.8 %
Non-GAAP Adjusted Operating Margin 4.0 % 7.0 %
Revenue
The change in revenue was due to the following:
Volume Rates /
Product Mix 		Fuel
Surcharge 		Total Revenue
Change
Revenue Change Drivers:
First quarter 2026 vs. 2025
(8.0) % 4.7 % 1.0 % (2.3) %
The growth in rates and product mix shown above includes contributions from our air cargo product, which is measured by dimensional weight rather than on a per piece basis and therefore does not impact the volume and revenue per piece discussions below.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Volume
Average daily volume decreased, driven by our continued execution of planned volume declines from our largest customer and deliberate actions to remove certain lower-yielding e-commerce volume, reflecting our ongoing revenue quality actions and challenging market conditions. These overall declines were partially offset by continued growth from SMBs who leveraged our Digital Access Program ("DAP").
Residential ("business-to-consumer") and commercial ("business-to-business") volume declined. Business-to-consumer volume decreased 10.4%, due to the actions discussed above. Business-to-business volume decreased 5.1%, primarily driven by the retail sector.
Within our Air products, average daily volume decreased 9.0%, driven by the continued execution of planned volume declines from our largest customer, partially offset by growth in the healthcare sector.
Ground average daily volume decreased 7.9%, driven primarily by the business-to-consumer volume reductions discussed above.
Revenue Per Piece
Revenue per piece increased 6.5%, driven by an average 5.9% net increase in base and accessorial rates implemented throughout 2025, favorable customer and product mix and higher fuel surcharges.
Fuel Surcharges
We apply a fuel surcharge on our domestic air and ground services that adjusts weekly and is intended to mitigate the impact of fuel price volatility. Our air fuel surcharge is based on the U.S. Department of Energy's ("DOE") Gulf Coast spot price for a gallon of kerosene-type fuel, and our ground fuel surcharge is based on the DOE's On-Highway Diesel Fuel price. During the first quarter of 2026, the conflict in the Middle East resulted in higher fuel costs and higher fuel surcharge rates. Fuel surcharge revenue increased $146 million for the quarter primarily as a result of higher fuel surcharge rates, partially offset by the impact of lower volume.
Operating Expenses
Operating expenses increased, primarily due to higher facility and transportation and other expenses, partially offset by cost reductions from execution of our Network Reconfiguration and Efficiency Reimagined initiatives primarily within compensation and benefits.
The change in operating expenses included the following:
•Facility and transportation related costs increased $341 million, primarily due to higher fees paid to the USPS associated with outsourcing our Ground Saver product, increased expense related to routine repairs and maintenance and higher weather-related costs.
•Other expenses increased $180 million, driven primarily by higher third-party lease expense to address capacity constraints resulting from fourth quarter 2025 aircraft retirements, partially offset by gains on sales of properties.
•Compensation and benefits expense decreased $392 million, driven by reductions in headcount as we executed our Network Reconfiguration and Efficiency Reimagined initiatives, fewer labor hours resulting from fewer stops associated with the outsourcing of our Ground Saver product and lower volume as described above. Lower pension and health and welfare costs within our U.S. union workforce also contributed to the decrease, partially offset by increases in transition costs and excess operational staffing associated with outsourcing our Ground Saver product, increases in contractual wage rates and higher workers' compensation expense due to less favorable development in prior year claims.
Our non-GAAP adjusted operating expenses exclude the impact of transformation strategy costs of $50 and $32 million in the first quarters of 2026 and 2025, respectively. Transformation strategy costs during both periods related to our Network Reconfiguration and Efficiency Reimagined programs. Costs in the 2025 period also included costs related to our Transformation 2.0 and Fit to Serve programs. These primarily consisted of compensation and benefits costs, as well as fees paid to outside professional service providers. See Supplemental Information - Items Affecting Comparability for additional discussion of transformation strategy costs excluded from our non-GAAP financial measures.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Cost per piece increased 9.7% during the first quarter of 2026 primarily driven by higher fees paid to the USPS and transition costs and excess operational staffing associated with outsourcing our Ground Saver product to the USPS, higher third-party lease expense to address capacity constraints resulting from aircraft retirements, higher weather-related costs, contractual wage rate increases and lower average daily volume. Non-GAAP adjusted cost per piece increased 9.5%.
Operating Profit and Margin
As a result of the factors described above, operating profit decreased $464 million, with operating margin decreasing 320 basis points to 3.6%. Non-GAAP adjusted operating profit decreased $446 million, with non-GAAP adjusted operating margin decreasing 300 basis points to 4.0%.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
International Package
Three Months Ended
March 31, 		Change
2026 2025 $ %
Average Daily Package Volume (in thousands):
Domestic 1,471 1,575 (6.6) %
Export 1,673 1,771 (5.5) %
Total Average Daily Package Volume 3,144 3,346 (6.0) %
Average Revenue Per Piece:
Domestic $ 9.16 $ 7.90 $ 1.26 15.9 %
Export 34.21 31.37 2.84 9.1 %
Total Average Revenue Per Piece $ 22.49 $ 20.32 $ 2.17 10.7 %
Operating Days in Period 62 62
Revenue (in millions):
Domestic $ 835 $ 771 $ 64 8.3 %
Export 3,548 3,444 104 3.0 %
Cargo and Other 157 158 (1) (0.6) %
Total Revenue $ 4,540 $ 4,373 $ 167 3.8 %
Operating Expenses (in millions):
Operating Expenses $ 3,993 $ 3,732 $ 261 7.0 %
Non-GAAP Adjustments to Operating Expenses
Transformation Strategy Costs (4) (13) 9 (69.2) %
Non-GAAP Adjusted Operating Expenses $ 3,989 $ 3,719 $ 270 7.3 %
Operating Profit (in millions) and Operating Margin:
Operating Profit $ 547 $ 641 $ (94) (14.7) %
Non-GAAP Adjusted Operating Profit $ 551 $ 654 $ (103) (15.7) %
Operating Margin 12.0 % 14.7 %
Non-GAAP Adjusted Operating Margin 12.1 % 15.0 %
Currency Benefit / (Cost) - (in millions)(1):
Revenue $ 156
Operating Expenses (168)
Operating Profit $ (12)
(1) Net of currency hedging; amount represents the change in currency translation compared to the prior year.
Revenue
The change in revenue was due to the following:
Volume Rates /
Product Mix 		Fuel
Surcharge 		Currency Total Revenue
Change
Revenue Change Drivers:
First quarter 2026 vs. 2025 (6.0) % 5.8 % 0.5 % 3.5 % 3.8 %
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Volume
Average daily volume decreased for both domestic and export products, primarily in Europe, the Middle East and Africa ("EMEA"), reflecting our revenue quality efforts and global trade policy changes in 2025, including de minimis exclusions.
Domestic average daily volume decreased 6.6% primarily driven by business-to-consumer retail volume declines in EMEA, reflecting our revenue quality efforts, partially offset by growth in domestic standard products in Canada from healthcare and professional services customers.
Export average daily volume decreased 5.5% led by declines on the U.S. destination lanes resulting from trade policy changes, including de minimis exclusions. Total U.S. imports decreased led by average daily volume declines from EMEA and China. Despite the overall declines in the U.S. inbound lanes, we experienced growth in Asia to the rest of the world volumes as trade lanes shifted to these regions.
Revenue Per Piece
Revenue per piece increased 10.7%, led by increases in EMEA and the Americas. The increase was primarily driven by our revenue quality efforts, favorable shifts in customer mix to technology customers and favorable currency movements. Segment revenues were negatively impacted by declines on the China-to-U.S. trade lane as a result of the trade policy changes in 2025, including de minimis exclusions.
Domestic revenue per piece increased 15.9% primarily driven by shifts in customer mix, mainly in EMEA.
Export revenue per piece increased 9.1% primarily as a result of favorable shift in product mix in Canada, EMEA and U.S exports.
Fuel Surcharges
The fuel surcharge we apply to international air services originating inside or outside the U.S. is largely indexed to the DOE's Gulf Coast spot price for a gallon of kerosene-type jet fuel. The fuel surcharges for ground services originating outside the U.S. are indexed to fuel prices in the region or country where the shipment originates. During the first quarter of 2026, the conflict in the Middle East resulted in higher fuel costs and fuel surcharge rates. Most of our fuel surcharges adjust with fuel prices on a weekly basis and are intended to mitigate the impact of fuel price volatility.
Operating Expenses
Operating expenses increased $261 million for the quarter, including unfavorable currency movement. Integrated air and ground network costs increased $120 million as we continued to align our global network with shifting volume patterns. These cost increases were primarily due to increased aircraft maintenance, compensation and benefits, aircraft lease expense and charter utilization expenses associated with network disruptions due to the Middle East conflict. Pickup and delivery expenses increased by $76 million mainly due to unfavorable currency movements.
Non-GAAP adjusted operating expenses excluded the impact of transformation strategy costs, which were $4 and $13 million in the first quarters of 2026 and 2025, respectively. Transformation strategy costs during both the 2026 and 2025 periods relate to our Network Reconfiguration and Efficiency Reimagined programs. The costs in the 2025 periods also include costs related to our Transformation 2.0 and Fit to Serve programs and primarily consisted of compensation and benefits costs and fees paid to outside professional service providers. See Supplemental Information - Items Affecting Comparability for additional discussion of transformation strategy costs excluded from our non-GAAP financial measures.
Operating Profit and Margin
As a result of the factors described above, operating profit decreased $94 million, with operating margin decreasing 270 basis points to 12.0%. Non-GAAP adjusted operating profit decreased $103 million and non-GAAP adjusted operating margin decreased 290 basis points to 12.1%.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SCS
Three Months Ended
March 31, 		Change
2026 2025 $ %
Revenue (in millions):
Forwarding $ 656 $ 726 $ (70) (9.6) %
Logistics 1,409 1,572 (163) (10.4) %
Other SCS 472 415 57 13.7 %
Total Revenue $ 2,537 $ 2,713 $ (176) (6.5) %
Operating Expenses (in millions):
Operating Expenses $ 2,332 $ 2,667 $ (335) (12.6) %
Non-GAAP Adjustments to Operating Expenses
Transformation Strategy Costs (1) (13) 12 (92.3) %
Goodwill and Asset Impairment Charges - (39) 39 (100.0) %
Non-GAAP Adjusted Operating Expenses $ 2,331 $ 2,615 $ (284) (10.9) %
Operating Profit (in millions) and Operating Margin:
Operating Profit $ 205 $ 46 $ 159 345.7 %
Non-GAAP Adjusted Operating Profit $ 206 $ 98 $ 108 110.2 %
Operating Margin 8.1 % 1.7 %
Non-GAAP Adjusted Operating Margin 8.1 % 3.6 %
Currency Benefit / (Cost) - (in millions)(1):
Revenue $ 35
Operating Expenses (34)
Operating Profit $ 1
(1) Amount represents the change in currency translation compared to the prior year.
Revenue
Total revenue decreased for the quarter primarily due to a decline in Forwarding and Logistics revenue, partially offset by increases in revenue from our other SCS businesses.
Within our Forwarding businesses, revenue decreased $70 million primarily driven by lower volumes from international airfreight and change in product mix that drove growth in volume but at lower rates from ocean freight.
Within our Logistics businesses, revenue decreased $163 million due to declines in our Mail Innovations business which decreased due to our 2025 initiatives to improve revenue quality. The declines in Mail Innovations revenue were partially offset by a $188 million increase in revenue from our healthcare logistics business primarily due to our fourth quarter 2025 acquisition of AHG.
Revenue from our other businesses within SCS increased $57 million for the quarter, primarily driven by volume growth in both Roadie and Happy Returns within our digital businesses.
Operating Expenses
Total operating expenses and non-GAAP adjusted operating expenses within SCS decreased for the quarter driven primarily by volume declines in our Mail Innovations business, partially offset by increases in our healthcare logistics business due to our fourth quarter 2025 acquisition of AHG.
Non-GAAP adjusted operating expenses exclude the impact of transformation strategy costs, which were $1 and 13 million in the first quarters of 2026 and 2025, respectively. First quarter 2025 non-GAAP adjusted operating expense also excludes $39 million related to impairment of certain assets within our digital businesses.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Transformation strategy costs in SCS during the periods presented related to our Transformation 2.0, Fit to Serve, and Network Reconfiguration and Efficiency Reimagined programs. Within Transformation 2.0, we incurred costs related to financial system investments in 2025. Within Fit to Serve, we incurred severance costs in 2025. Within Efficiency Reimagined, we incurred costs related to end-to-end process redesign in both the 2026 and 2025 periods. See Supplemental Information - Items Affecting Comparability for additional discussion of items excluded from our non-GAAP adjusted financial measures.
Operating Profit and Margin
As a result of the factors described above, operating profit increased $159 million, with operating margin increasing to 8.1%. Non-GAAP adjusted operating profit increased $108 million and non-GAAP adjusted operating margin increased to 8.1%.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Consolidated Operating Expenses
Three Months Ended
March 31, 		Change
2026 2025 $ %
Operating Expenses (in millions):
Compensation and benefits $ 11,545 $ 11,827 $ (282) (2.4) %
Transformation Strategy Costs (31) (24) (7) 29.2 %
Non-GAAP Adjusted Compensation and Benefits $ 11,514 $ 11,803 $ (289) (2.4) %
Repairs and maintenance $ 792 $ 732 $ 60 8.2 %
Depreciation and amortization 985 912 73 8.0 %
Purchased transportation 2,764 2,730 34 1.2 %
Fuel 1,083 1,058 25 2.4 %
Other occupancy 674 607 67 11.0 %
Other expenses 2,092 2,014 78 3.9 %
Total Other Expenses 8,390 8,053 337 4.2 %
Transformation Strategy Costs (24) (34) 10 (29.4) %
Goodwill and Asset Impairment Charges
- (39) 39 (100.0) %
Non-GAAP Adjusted Total Other Expenses $ 8,366 $ 7,980 $ 386 4.8 %
Total Operating Expenses $ 19,935 $ 19,880 $ 55 0.3 %
Non-GAAP Adjusted Total Operating Expenses $ 19,880 $ 19,783 $ 97 0.5 %
Currency (Benefit) / Cost - (in millions)(1)
$ 202
(1) Amount represents the change in currency translation compared to the prior year.
Three Months Ended
March 31, 		Change
2026 2025 $
Non-GAAP Adjustments to Operating Expenses (in millions):
Transformation Strategy Costs:
Compensation $ - $ 3 $ (3)
Benefits 31 21 10
Other expenses 24 34 (10)
Total Transformation Strategy Costs $ 55 $ 58 $ (3)
Other expenses:
Goodwill and Asset Impairment Charges - 39 (39)
Total Non-GAAP Adjustments to Operating Expenses $ 55 $ 97 $ (42)
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Compensation and Benefits
Compensation expense decreased $247 million. The principal factors contributing to the changes were:
•Direct labor costs decreased $210 million. The impact of volume declines as well as improved productivity from outsourcing our Ground Saver product decreased direct labor costs by $423 million. These decreases were partially offset by $286 million in wage rate growth driven by increased seniority and contractual wage rate increases, and by excess operational staffing associated with outsourcing our Ground Saver product.
•Management compensation costs decreased $43 million, primarily due to lower overall headcount. For additional information on our transformation strategy, see note 16 to the unaudited, consolidated financial statements.
Benefits costs decreased $35 million. Multiemployer pension and other postretirement, paid time off, payroll taxes, health and welfare and other costs decreased $114 million primarily due to headcount reductions. Workers' compensation expense increased $67 million due to less favorable development in prior year claims, partially offset by a reduction in hours worked.
Non-GAAP adjusted operating expenses for the first quarter of 2026 and 2025 excluded the impact of costs incurred under our Transformation 2.0, Fit to Serve and Network Reconfiguration and Efficiency Reimagined initiatives, and primarily consisted of employee benefits expense and related payroll tax expense. Compensation and benefits expenses under these initiatives were $31 and $24 million in the 2026 and 2025 periods, respectively. See Supplemental Information - Items Affecting Comparability for additional discussion of items excluded from our non-GAAP financial measures.
Repairs and Maintenance
Repairs and maintenance costs increased due to higher routine expenses for repairs to buildings and facilities, and an increase in aircraft maintenance costs.
Depreciation and Amortization
Amortization expense increased $40 million primarily from capitalized software investments and additional intangible assets acquired from AHG in the fourth quarter of 2025. Depreciation expense increased $33 million due to capital asset additions and building closures from our Network Reconfiguration and Efficiency Reimagined initiative which shortened useful lives and accelerated depreciation.
Purchased Transportation
Third-party transportation expense charged to us by air, ocean and ground carriers increased $34 million. The changes were primarily driven by:
•Air carrier expense increased $78 million from additional leased aircraft to address temporary capacity constraints resulting from fourth quarter 2025 aircraft retirements.
•Ocean carrier expense decreased $34 million due to product mix changes, soft demand and lower market rates.
•Ground transportation expense decreased $24 million primarily due to the impact of volume declines related to our Mail Innovations business, which was partially offset by an increase in fees paid to the USPS associated with outsourcing our Ground Saver product, and expense increases in our digital businesses due to overall growth.
Fuel Expense
Fuel expense increased $25 million mainly attributable to higher prices for jet fuel, diesel and gasoline, partially offset by the impact of lower volumes. Market prices and the manner in which we purchase fuel influence our costs. During the first quarter of 2026, the conflict in the Middle East resulted in higher fuel costs. The majority of our fuel purchases utilize index-based pricing formulas plus or minus a fixed locational/supplier differential. While many of the indices are correlated, each index may respond differently to changes in underlying prices, which in turn can drive variability in our costs.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Other Occupancy
Other occupancy expense increased $67 million primarily due to new lease expenses, including leases acquired in the AHG acquisition and an increase occupancy expense from weather-related events.
Other Expenses
Other expenses increased $78 million, primarily from a $39 million increase in commissions paid due to our growth in our Digital Access Program and a $29 million increase in credit losses as a result of changes in the composition of our accounts receivable and specific customer matters.
In the first quarter of 2026, non-GAAP adjusted operating expenses excluded $24 million in transformation strategy costs for fees paid to outside professional service providers. In the 2025 period, non-GAAP adjusted operating expenses excluded $39 million related to the impairment of certain assets within our digital businesses and $34 million in transformation strategy costs for fees paid to outside professional service providers.
We expect to incur additional other expenses under our Network Reconfiguration and Efficiency Reimagined programs during the remainder of 2026. See Supplemental Information - Items Affecting Comparability for additional discussion on the types, amounts and timing thereof.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Other Income (Expense)
The following table sets forth investment income and other and interest expense for the three months ended March 31, 2026 and 2025 (in millions):
Three Months Ended
March 31, 		Change
2026 2025 $ %
Investment Income and Other $ 123 $ 79 $ 44 55.7 %
Goodwill and Asset Impairment Charges - 19 (19) (100.0) %
Non-GAAP Adjusted Investment Income and Other 123 98 25 25.5 %
Interest Expense (266) (222) (44) 19.8 %
Total Other Income (Expense) $ (143) $ (143) $ - - %
Non-GAAP Adjusted Total Other Income (Expense) $ (143) $ (124) $ (19) 15.3 %
Investment Income and Other
Investment income and other increased by $44 million. Investment income and other in the prior-year period included a $19 million asset impairment charge related to an equity method investment. Excluding the impact of this impairment, non-GAAP adjusted investment income and other increased by $25 million, primarily due to higher pension income, partially offset by lower interest rates and discount fees associated with our accounts receivable factoring program. Pension income increased primarily due to higher expected returns on pension assets, partially offset by an increase in interest cost as a result of overall plan growth and changes in demographic assumptions. For additional information on our factoring program, see note 3 to the unaudited, consolidated financial statements.
Interest Expense
Interest expense increased primarily due to higher average outstanding debt balances.
Income Tax Expense
The following table sets forth our income tax expense and effective tax rate for the three months ended March 31, 2026 and 2025 (in millions):
Three Months Ended
March 31, 		Change
2026 2025 $ %
Income Tax Expense $ 260 $ 336 $ (76) (22.6) %
Income Tax Impact of:
Transformation Strategy Costs
13 14 (1) (7.1) %
Goodwill and Asset Impairment Charges - 9 (9) (100.0) %
Reversal of income tax valuation allowance - 10 (10) (100.0) %
Non-GAAP Adjusted Income Tax Expense $ 273 $ 369 $ (96) (26.0) %
Effective Tax Rate 23.1 % 22.1 %
Non-GAAP Adjusted Effective Tax Rate 23.2 % 22.5 %
For additional information on our income tax expense and effective tax rate, see note 15 to the unaudited, consolidated financial statements.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
We deploy a disciplined and balanced approach to capital allocation, including returns to shareowners through dividends and share repurchases. As of March 31, 2026, we had $5.8 billion in cash, cash equivalents and marketable securities. We believe that these positions, expected cash from operations, access to commercial paper programs and capital markets and other available liquidity options will be adequate to fund our material short- and long-term cash requirements, including our business operations, planned capital expenditures, pension contributions, transformation strategy costs, including voluntary separation programs, debt obligations and shareowner returns. We regularly evaluate opportunities to optimize our capital structure, including through issuances of debt to refinance existing debt and to fund operations.
Cash Flows From Operating Activities
The following is a summary of the significant sources (uses) of cash from operating activities (in millions):
Three Months Ended
March 31,
2026 2025
Net income $ 864 $ 1,187
Non-cash operating activities (1)
1,358 1,173
Pension and postretirement medical benefit plan contributions (company-sponsored plans) (79) (67)
Income tax receivables and payables 62 211
Changes in working capital and other non-current assets and liabilities 77 (219)
Other operating activities (58) 33
Net cash from operating activities $ 2,224 $ 2,318
(1) Represents depreciation and amortization, gains and losses on derivative transactions and foreign currency exchange, disposal of assets and businesses, deferred income taxes, allowances for expected credit losses, amortization of operating lease assets, pension and postretirement medical benefit plan (income) expense, stock compensation expense, changes in casualty self-insurance reserves, goodwill and other asset impairment charges and other non-cash items.
Net cash from operating activities decreased $94 million primarily due to a reduction in net income.
This decrease was partially offset by working capital benefits from:
•Favorable changes in accounts payable reflecting increased days payable outstanding.
•Increased collection of receivables, including $952 million from our accounts receivable factoring program.
As of March 31, 2026, approximately $2.0 billion of our total worldwide holdings of cash, cash equivalents and marketable securities were held by foreign subsidiaries. The amount of cash, cash equivalents and marketable securities held by our U.S. and foreign subsidiaries fluctuates throughout the year due to a variety of factors, including the timing of cash receipts, strategic operating needs and disbursements in the normal course of business. Cash provided by operating activities in the U.S. continues to be our primary source of funds to finance our business operations and planned capital expenditures, pension contributions, transformation strategy costs, debt obligations and shareowner returns. All cash, cash equivalents and marketable securities held by foreign subsidiaries are generally available for distribution to the U.S. without any U.S. federal income taxes. Any such distributions may be subject to foreign withholding and U.S. state taxes. When amounts earned by foreign subsidiaries are expected to be indefinitely reinvested, no accrual for taxes is provided.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Cash Flows From Investing Activities
Our primary (uses) sources of cash from investing activities were as follows (in millions):
Three Months Ended
March 31,
2026 2025
Net cash used in investing activities
$ (944) $ (1,355)
Capital Expenditures:
Buildings, facilities and plant equipment $ (804) $ (428)
Information technology (200) (259)
Aircraft and parts (17) (70)
Vehicles (10) (119)
Total capital expenditures
$ (1,031) $ (876)
Capital expenditures as a % of revenue
4.9 % 4.1 %
Other Investing Activities:
Proceeds from disposal of businesses, property, plant and equipment $ 82 $ 65
Acquisitions, net of cash acquired - (478)
Other investing activities 5 (66)
For the three months ended March 31, 2026, total capital expenditures increased, primarily driven by increased spending on buildings, facilities and plant equipment associated with our Network of the Future and other operational efficiency initiatives. These increases were partially offset by reduced spending on vehicles due to lower volume and a focus on routine replacements for vehicles at the end of their useful lives, decreased aircraft expenditures as a result of utilizing finance lease alternatives and lower technology infrastructure spending as a result of project completion and non-recurring prior year investments.
We did not pay any amounts for acquisitions in the three months ended March 31, 2026. In the three months ended March 31, 2025, cash paid for acquisitions was primarily related to the acquisition of Frigo-Trans and Biotech & Pharma Logistics ("Frigo-Trans"), and reacquired development area rights for The UPS Store.
We have commitments for the purchase of equipment, real estate and vehicles to provide for the replacement and enhancement of existing capacity and targeted growth. It also provides for maintenance of buildings, facilities and equipment. Our 2026 investment program anticipates investments in technology initiatives and enhanced network capabilities. We currently expect our capital expenditures will be approximately $3.0 billion for all of 2026, of which approximately 80% will be allocated to network enhancement projects and other technology initiatives. We regularly evaluate opportunities for cost effective financing of assets in order to reduce our capital spending. Future capital spending will depend on a variety of factors, including economic and industry conditions, and financing alternatives.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Cash Flows From Financing Activities
Our primary (uses) sources of cash from financing activities were as follows (in millions, except per share data):
Three Months Ended
March 31,
2026 2025
Net cash used in financing activities
$ (1,328) $ (2,313)
Share Repurchases:
Cash paid to repurchase shares(1)
$ - $ (1,000)
Number of shares repurchased - (8.6)
Shares outstanding at period end 850 847
Dividends:
Dividends declared per share $ 1.64 $ 1.64
Cash paid for dividends $ (1,352) $ (1,348)
Borrowings and Other Financing Activities:
Net borrowings (repayments) of debt principal $ (46) $ (7)
Other financing activities(2)
$ 70 $ 42
Capitalization:
Total debt outstanding at period end $ 24,386 $ 21,369
Total shareowners' equity at period end 15,791 15,684
Total capitalization $ 40,177 $ 37,053
(1) For additional information on our share repurchase activities, see note 11 to the unaudited, consolidated financial statements.
(2) Includes issuances of common stock.
We did not repurchase any shares under our stock repurchase program during the first quarter of 2026.
The declaration of dividends is subject to the discretion of the Board and depends on various factors, including our net income, financial condition, cash requirements, future prospects and other relevant factors. We paid a quarterly cash dividend of $1.64 per share in each of the first quarters of 2026 and 2025.
The amount of commercial paper outstanding fluctuates based on daily liquidity needs. As of March 31, 2026, we had no outstanding balances under our U.S. or European commercial paper programs. The average balance outstanding of commercial paper during the first quarters of 2026 and 2025 was $45 and $52 million, respectively, and the average interest rates were 3.46% and 4.08%, respectively. The amount of commercial paper outstanding under these programs in the remainder of 2026 is expected to fluctuate. As of March 31, 2026, we had $500 million of fixed-rate senior notes currently outstanding that mature in 2026 and we intend to repay or refinance these amounts when due. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.
Cash flows from other financing activities included cash proceeds of $55 million related to collections from customers on accounts receivable that had been factored in 2026. This reflected $114 million of obligations related to factored receivables that were not remitted to third-party purchasers as of March 31, 2026, partially offset by $59 million repaid from prior-period balances. This program was not in place in the 2025 period.
At March 31, 2026, we had parent company guarantees of approximately $1.8 billion related to aircraft leases. For additional information on guarantees, see note 9 to the unaudited, consolidated financial statements.
Except as disclosed above and in our Annual Report on Form 10-K for the year ended December 31, 2025, we do not have other guarantees or off-balance sheet financing arrangements, including variable interest entities, which we believe could have a material impact on our financial condition or liquidity.
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Sources of Credit
See note 9 to the unaudited, consolidated financial statements for a discussion of our available credit and the financial covenants that we are subject to as part of our credit agreements.
Contractual Commitments
Purchase commitments that are legally binding represent contractual agreements for certain capital expenditures, including contracts for facility construction projects, aircraft and vehicles. In addition to purchase commitments, we have other contractual obligations related to equipment rental, software licensing, service and commodity contracts. See Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2025 for more information.
For additional information on 2026 debt issuances and repayments, see note 9 to the unaudited, consolidated financial statements.
Legal Proceedings and Contingencies
See note 10 to the unaudited, consolidated financial statements for a discussion of judicial proceedings and other matters arising from the conduct of our business activities.
Collective Bargaining Agreements
Status of Collective Bargaining Agreements
See note 6 to the unaudited, consolidated financial statements for a discussion of the status of our collective bargaining agreements.
Multiemployer Benefit Plans
See note 6 to the unaudited, consolidated financial statements for a discussion of our participation in multiemployer benefit plans.
Recent Accounting Pronouncements
Adoption of New Accounting Standards
See note 2 to the unaudited, consolidated financial statements for a discussion of recently adopted accounting standards.
Accounting Standards Issued But Not Yet Effective
See note 2 to the unaudited, consolidated financial statements for a discussion of accounting standards issued, but not yet effective.
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