United Parcel Service, Inc. - Ordinary Shares - Class B

Strong Q2 results; margin improved despite fuel volatility - Consolidated revenue: $22.8B (+7.6% YoY); operating profit: $2.1B (+12% YoY); operating margin: 9.2% (+40 bps YoY; +300 bps QoQ). - EPS: $1.76 in Q2. - Fuel headwind/offset: Middle East conflict drove higher fuel revenue and higher fuel expense; net impact to consolidated operating profit dollars was modest due to surcharge mechanisms working “as designed.” - GAAP noise noted: $891M after-tax transformation charges ($1.05/diluted share) tied mainly to employee separation costs from the completed Driver Choice workforce actions.

Amazon “glide down” and U.S. network reconfiguration delivered as planned (structural margin support) - UPS says it executed its plan “exactly as designed” and is now moving from reconfiguration (foundation) to capturing premium economics as volume grows. - Lower-quality Amazon volume removed: ~2 million pieces/day eliminated. - Expense removals: ~$4.5B of related expense removed, with more coming through 2026. - Productivity/automation is a key “proof point”: - Automation share: 68.5% of U.S. volume through automated buildings vs 64% a year ago. - Cost advantage: automated building cost per piece ~28% lower than non-automated. - Cost actions quantified (capacity/position reductions): - ~50M hours eliminated over last year and this year; ~78,000 operational positions reduced. - ~150 buildings closing planned/closed as part of resizing.

Guidance raised for full-year 2026 (top and bottom line up) - Updated 2026 outlook (raised): - Revenue: ~$91.2B - Operating profit: ~$8.65B - Diluted EPS: ~$7.22 - Segment expectations: - U.S. Domestic: revenue ~$60B (+1% YoY); operating margin ~7.5% for FY 2026. - Q3: mid-single-digit ADV decline (seasonality + Amazon glide down completion in June); revenue ~flat YoY; operating margin ~7% (range not explicit but stated ~7%). - Back half U.S. domestic margin: ~8.8% (expected expansion in Q3/Q4). - International: revenue mid-single-digit growth; operating margin mid-teens. - Q3 operating margin expected 13%–14%. - Supply Chain Solutions: revenue high-single-digit growth; operating margin 10%–11%. - Q3 revenue growth low double-digits; operating margin 10%–11%. - Cash/Capex/dividends: - Capex: ~$3B; pension contribution: $1.3B planned. - Free cash flow: ~$5.5B (includes Driver Choice-related payments). - Dividends: ~$5.4B in 2026 (subject to Board approval). (No buyback mentioned.)