“For modeling purposes, in total below the line, we expect approximately $780 million in expense, with a little more than half in the back half of the year.”

In context

“argin of around 18.6% and looking at the first quarter, we expect revenue to be flattish compared to the same period last year, and operating margin to be moderately down year-over-year due to lower demand related surcharges. And in Supply Chain Solutions for the full year 2025, we expect revenue to be approximately $11 billion and operating margin to be approximately 8.5%. In SCS in the first quarter, revenue is expected to decline about $500 million due to the reduction in revenue associated with Coyote in the same period last year. Operating margin in SCS in the first quarter is anticipated to be low to mid-single digits due to pressure from purchase transportation costs related to our mail innovations business. We expect the first quarter to be the lowest SCS operating margin in 2025. For modeling purposes, in total below the line, we expect approximately $780 million in expense, with a little more than half in the back half of the year. We expect pension expense to be approximately $37 million for the full year 2025 which is $306 million higher than in 2024 primarily due to the impact of market shifts and interest rates on our pension assets last year. We included a slide in the appendix of today's webcast deck to provide you more detail on pension. The webcast deck is available on the UPS Investor Relations website. Now let's turn to our expectations for cash and the balance sheet. We expect free cash flow to be approximately $5.7 billion including our annual pension contribution of $1.4 billion. Capital expenditures are expected to be about $3.5 billion. While we are accelerating our network of the future initiative, our reconfigured U.S. network should require less investment in vehicles and aircraft as we right size”