UNITED PARCEL SERVICE INC
For the period ended Dec 31, 2023. Filed Feb 20, 2024.
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FY2023 · Filed Feb 20, 2024
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Other Income and (Expense)
The following table sets forth investment income and other and interest expense for the years ended December 31, 2023 and 2022 (in millions):
| Year Ended December 31, · Change | ||||
|---|---|---|---|---|
| 2023 | 2022 | $ | % | |
| Investment Income and Other | $217 | $2,435 | $(2,218) | (91.1)% |
| Defined Benefit Pension and Postretirement Medical Plan (Gains) and Losses | 359 | (1,061) | 1,420 | N/A |
| Adjusted Investment Income and Other | $576 | $1,374 | $(798) | (58.1)% |
| Interest Expense | (785) | (704) | (81) | 11.5% |
| Total Other Income and (Expense) | $(568) | $1,731 | $(2,299) | N/A |
| Adjusted Other Income and (Expense) | $(209) | $670 | $(879) | N/A |
Investment Income and Other
Investment income and other decreased $2.2 billion. Remeasurements of our defined benefit plans resulted in a $359 million mark-to-market loss in 2023 compared to a $1.1 billion gain in 2022. Excluding the impact of these remeasurements, adjusted investment income and other decreased $798 million, driven by a reduction in other pension income. Expected returns on pension assets decreased, primarily due to a lower asset base resulting from negative returns in 2022, while pension interest cost increased as a result of higher discount rates and ongoing plan growth. The reduction in other pension income was partially offset by higher yields on invested balances.
Interest Expense
Interest expense increased due to higher effective interest rates on floating rate debt. The impact of higher average outstanding debt balances was largely offset by additional capitalization of interest.
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