Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

United Parcel Service Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Goodwill	4,872)	4,223)	3,692)	3,367)	3,813)
Capitalized software	5,839)	5,186)	4,910)	4,531)	4,125)
Licenses	30)	55)	58)	95)	117)
Franchise rights	291)	226)	119)	165)	146)
Customer relationships	1,115)	872)	733)	729)	730)
Trade name	172)	125)	67)	—)	—)
Trademarks, patents, and other	320)	183)	158)	18)	29)
Amortizable intangible assets, gross carrying amount	7,767)	6,647)	6,045)	5,538)	5,147)
Accumulated amortization	(4,555)	(4,055)	(3,763)	(3,469)	(3,180)
Amortizable intangible assets, net carrying value	3,212)	2,592)	2,282)	2,069)	1,967)
Trade name	89)	200)	200)	200)	200)
Licenses	4)	4)	4)	5)	—)
Indefinite lived intangible assets	93)	204)	204)	205)	200)
Intangible assets	3,305)	2,796)	2,486)	2,274)	2,167)
Goodwill and intangible assets	8,177)	7,019)	6,178)	5,641)	5,980)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	United Parcel Service Inc. goodwill increased from 2021 to 2022 and from 2022 to 2023.
Intangible assets	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	United Parcel Service Inc. intangible assets increased from 2021 to 2022 and from 2022 to 2023.
Goodwill and intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	United Parcel Service Inc. goodwill and intangible assets increased from 2021 to 2022 and from 2022 to 2023.

United Parcel Service Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)	70,857)	71,124)	69,405)	62,408)	57,857)
Less: Goodwill	4,872)	4,223)	3,692)	3,367)	3,813)
Total assets (adjusted)	65,985)	66,901)	65,713)	59,041)	54,044)
Adjustment to Equity For Controlling Interests
Equity for controlling interests (as reported)	17,306)	19,786)	14,253)	657)	3,267)
Less: Goodwill	4,872)	4,223)	3,692)	3,367)	3,813)
Equity for controlling interests (adjusted)	12,434)	15,563)	10,561)	(2,710)	(546)
Adjustment to Net Income
Net income (as reported)	6,708)	11,548)	12,890)	1,343)	4,440)
Add: Non-cash goodwill impairment charges	125)	—)	—)	494)	—)
Net income (adjusted)	6,833)	11,548)	12,890)	1,837)	4,440)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

United Parcel Service Inc., Financial Data: Reported vs. Adjusted

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United Parcel Service Inc., adjusted financial ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net Profit Margin
Reported net profit margin	7.37%	11.51%	13.25%	1.59%	5.99%
Adjusted net profit margin	7.51%	11.51%	13.25%	2.17%	5.99%
Total Asset Turnover
Reported total asset turnover	1.28	1.41	1.40	1.36	1.28
Adjusted total asset turnover	1.38	1.50	1.48	1.43	1.37
Financial Leverage
Reported financial leverage	4.09	3.59	4.87	94.99	17.71
Adjusted financial leverage	5.31	4.30	6.22	—	—
Return on Equity (ROE)
Reported ROE	38.76%	58.36%	90.44%	204.41%	135.90%
Adjusted ROE	54.95%	74.20%	122.05%	—	—
Return on Assets (ROA)
Reported ROA	9.47%	16.24%	18.57%	2.15%	7.67%
Adjusted ROA	10.36%	17.26%	19.62%	3.11%	8.22%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	United Parcel Service Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	United Parcel Service Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	United Parcel Service Inc. adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	United Parcel Service Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	United Parcel Service Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

United Parcel Service Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	6,708)	11,548)	12,890)	1,343)	4,440)
Revenue	90,958)	100,338)	97,287)	84,628)	74,094)
Profitability Ratio
Net profit margin¹	7.37%	11.51%	13.25%	1.59%	5.99%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income	6,833)	11,548)	12,890)	1,837)	4,440)
Revenue	90,958)	100,338)	97,287)	84,628)	74,094)
Profitability Ratio
Adjusted net profit margin²	7.51%	11.51%	13.25%	2.17%	5.99%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Net profit margin = 100 × Net income ÷ Revenue
= 100 × 6,708 ÷ 90,958 = 7.37%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 6,833 ÷ 90,958 = 7.51%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	United Parcel Service Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Revenue	90,958)	100,338)	97,287)	84,628)	74,094)
Total assets	70,857)	71,124)	69,405)	62,408)	57,857)
Activity Ratio
Total asset turnover¹	1.28	1.41	1.40	1.36	1.28
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenue	90,958)	100,338)	97,287)	84,628)	74,094)
Adjusted total assets	65,985)	66,901)	65,713)	59,041)	54,044)
Activity Ratio
Adjusted total asset turnover²	1.38	1.50	1.48	1.43	1.37

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 90,958 ÷ 70,857 = 1.28

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 90,958 ÷ 65,985 = 1.38

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	United Parcel Service Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets	70,857)	71,124)	69,405)	62,408)	57,857)
Equity for controlling interests	17,306)	19,786)	14,253)	657)	3,267)
Solvency Ratio
Financial leverage¹	4.09	3.59	4.87	94.99	17.71
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	65,985)	66,901)	65,713)	59,041)	54,044)
Adjusted equity for controlling interests	12,434)	15,563)	10,561)	(2,710)	(546)
Solvency Ratio
Adjusted financial leverage²	5.31	4.30	6.22	—	—

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Equity for controlling interests
= 70,857 ÷ 17,306 = 4.09

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity for controlling interests
= 65,985 ÷ 12,434 = 5.31

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	United Parcel Service Inc. adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	6,708)	11,548)	12,890)	1,343)	4,440)
Equity for controlling interests	17,306)	19,786)	14,253)	657)	3,267)
Profitability Ratio
ROE¹	38.76%	58.36%	90.44%	204.41%	135.90%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income	6,833)	11,548)	12,890)	1,837)	4,440)
Adjusted equity for controlling interests	12,434)	15,563)	10,561)	(2,710)	(546)
Profitability Ratio
Adjusted ROE²	54.95%	74.20%	122.05%	—	—

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROE = 100 × Net income ÷ Equity for controlling interests
= 100 × 6,708 ÷ 17,306 = 38.76%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted equity for controlling interests
= 100 × 6,833 ÷ 12,434 = 54.95%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	United Parcel Service Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	6,708)	11,548)	12,890)	1,343)	4,440)
Total assets	70,857)	71,124)	69,405)	62,408)	57,857)
Profitability Ratio
ROA¹	9.47%	16.24%	18.57%	2.15%	7.67%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted net income	6,833)	11,548)	12,890)	1,837)	4,440)
Adjusted total assets	65,985)	66,901)	65,713)	59,041)	54,044)
Profitability Ratio
Adjusted ROA²	10.36%	17.26%	19.62%	3.11%	8.22%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 6,708 ÷ 70,857 = 9.47%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 6,833 ÷ 65,985 = 10.36%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	United Parcel Service Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

United Parcel Service Inc. (NYSE:UPS)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

United Parcel Service Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

United Parcel Service Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)