UNITED PARCEL SERVICE INC
For the period ended Sep 30, 2025. Filed Nov 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 5, 2025
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Income Tax Expense
The following table sets forth our income tax expense and effective tax rate for the three and nine months ended September 30, 2025 and 2024 (in millions):
| Three Months Ended September 30, · Change · Nine Months Ended September 30, · Change | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 · 2024 · $ · % · 2025 · 2024 · $ · % | |||||||||||
| Income Tax Expense | $296 | $371 | $(75) | (20.2)% | $1,011 | $1,254 | $(243) | (19.4)% | |||
| Income Tax Impact of: | |||||||||||
| Transformation Strategy Costs: | |||||||||||
| Business Portfolio Review | — | 8 | (8) | (100.0)% | (5) | 7 | (12) | (171.4)% | |||
| Financial Systems | 3 | 3 | — | —% | 11 | 10 | 1 | 10.0% | |||
| Transformation 2.0 Total | 3 | 11 | (8) | (72.7)% | 6 | 17 | (11) | (64.7)% | |||
| Fit to Serve | 4 | 27 | (23) | (85.2)% | 10 | 38 | (28) | (73.7)% | |||
| Network Reconfiguration and Efficiency Reimagined | 71 | — | 71 | N/A | 93 | — | 93 | N/A | |||
| Total Transformation Strategy Costs | 78 | 38 | 40 | 105.3% | 109 | 55 | 54 | 98.2% | |||
| Gain on Divestiture | — | (4) | 4 | (100.0)% | (5) | (4) | (1) | 25.0% | |||
| Goodwill and Asset Impairment Charges | — | — | — | N/A | 9 | 13 | (4) | (30.8)% | |||
| Reversal of income tax valuation allowance | 86 | — | 86 | N/A | 109 | — | 109 | N/A | |||
| Non-GAAP Adjusted Income Tax Expense | $460 | $405 | $55 | 13.6% | $1,233 | $1,318 | $(85) | (6.4)% | |||
| Effective Tax Rate | 18.4% | 19.4% | 21.1% | 23.6% | |||||||
| Non-GAAP Adjusted Effective Tax Rate | 23.8% | 21.2% | 23.3% | 23.6% | |||||||
In July 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The income tax-related provisions of the OBBBA include revisions to international tax regimes, the repeal of mandatory capitalization of research and development expenditures, and the extension of bonus depreciation. The OBBBA has multiple effective dates, with certain provisions effective in future years. The estimated impact of the OBBBA is not material to our overall effective tax rate for the current year and has been reflected in our unaudited, consolidated financial statements during the three and nine months ended September 30, 2025. We are continuing to evaluate the expected impact in future years and expect a favorable impact to our effective tax rate and cash flows.
For additional information on our income tax expense and effective tax rate, see note 16 to the unaudited, consolidated financial statements.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.