UNITED PARCEL SERVICE INC

The following is a summary of the significant sources (uses) of cash from operating activities (in millions):

(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 increased $838 million during the nine months ended September 30, 2026, primarily due to:

•Favorable changes in accounts payable reflecting increased days payable outstanding.

•Lower cash contributions to our company-sponsored, defined benefit pension and postretirement medical plans. In August 2026 we made $450 million in discretionary non-cash pension contributions in the form of company-issued notes. See note 6 and note 9 to the unaudited consolidated financial statements for additional information.

•Approximately $270 million in cash received from CBP in 2026 related to the pass-through IEEPA tariff refunds that are refundable to customers. See note 10 to the unaudited consolidated financial statements for additional information.

•Lower income tax payments, primarily due to a 2024 tax payment deferred into 2025 resulting from Hurricane Helene relief that did not recur in 2026.

These increases were partially offset by:

• A reduction in net income during the 2026 period.

• An increase in accounts receivable from changes in collection of aged receivables, including $2.7 billion from our accounts receivable factoring program.

As of September 30, 2026, approximately $2.3 billion of our total worldwide holdings of cash and cash equivalents were held by foreign subsidiaries. The amount of cash and cash equivalents 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 and cash equivalents 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.