“Based on our year-to-date results, today, we are raising our full year 2026 consolidated revenue outlook to approximately $91.2 billion.”

In context

“Carol Tomé (Chief Executive Officer): Thank you, PJ, and good morning. 18 months ago, we announced our Amazon glide down and network reconfiguration plan. Today, I'm pleased to say we executed that plan exactly as designed while continuing to deliver the industry-leading service that sets UPS apart. I want to thank our UPSers for their extraordinary work throughout this period. And I also want to thank our partners at Amazon for collaborating with us on what was truly a complex undertaking. Over that period, we executed a deliberate structural reset of our U.S. business. Specifically, we eliminated approximately 2 million pieces per day of lower-quality Amazon volume. We reconfigured and further automated our U.S. network for higher return opportunities. And we removed approximately $4.5 billion of related expense with more to come as we finish out 2026. I'm incredibly proud of what we have accomplished. But this reconfiguration was never the destination. It was the foundation. We now have a leaner, more automated, more agile network that will deliver operating leverage as volume grows. And importantly, incremental volume today carries materially better economics than before because of the structural changes we've made. Our second quarter financial results demonstrate the successful execution of key initiatives and the strength of our underlying business. Consolidated revenue was $22.8 billion, an increase of 7.6% versus last year. Consolidated operating profit was $2.1 billion, an increase of 12% versus last year. And consolidated operating margin was 9.2%, a year-over-year increase of 40 basis points and up 300 basis points from the first quarter of this year. While fuel price volatility in the second quarter drove higher fuel revenue and corresponding fuel costs, our fuel surcharge mechanisms functioned as designed, covering the increase in fuel expense. All three segments contributed to our strong second quarter revenue performance. Underscoring the strength of the quarter, U.S. Domestic delivered meaningful operating profit growth of over 20% versus last year. As part of our transformation, we continue to invest in RFID and artificial intelligence or AI. We view these technologies as the intersection of the physical and digital world, helping us gain efficiencies and will also win and retain customers. Think of RFID as the eyes and ears within our network and AI as the brain. RFID generates data from billions of package movements. Our AI transforms that data into decisions, predictions and actions. In fact, we believe RFID is the most significant package visibility advancement in a decade. We're using it to move from a scanning-based network to a sensing network, eliminating hundreds of millions of manual scans every year. We've completed deployment of RFID sensing technology across all of our U.S. delivery facilities and package cars. And now we're moving internationally. We're also enabling our customers with RFID label printers, and every package shipped at our 5,500 UPS Stores is RFID-enabled. These capabilities are generating rich real-time data about the packages in our network. Now pair that data with the AI-powered digital twin of our network, including our facilities, vehicles, aircraft and package flow data. This strengthens our ability to dynamically adapt to changing conditions like weather delays or volume forecasts. Our AI is constantly tracking network performance, so it can optimize planning, routing and execution in near real time. The result is an integrated network that is even more efficient and reliable with enhanced end-to-end visibility and an unmatched premium experience for our customers. As we move ahead, the next phase of our strategy is straightforward. We're fully focused on capturing premium volume, like from SMB, health care and B2B customers with a clear emphasis on revenue quality and margin expansion. This quarter was broad-based across nearly all industry sectors, delivering SMB average daily volume growth of 4.3%. The SMBs continue to value the reliability of our integrated network and the capabilities we provide, including end-to-end visibility solutions, our Digital Access Program, or DAP, our UPS Stores, and box-free, label-free returns. Speaking of DAP, it is not just for B2C e-commerce shippers. B2B e-commerce shippers also value the convenience and customer experience our DAP platform delivers. In fact, in the second quarter, we saw B2B DAP average daily volume increase 34% year-over-year. And in the second quarter, we generated $1.4 billion in global DAP revenue, marking the third quarter in a row of delivering GAAP revenue of over $1 billion. Moving to health care. In the second quarter, we generated over $3 billion in health care revenue, achieving that milestone for the second consecutive quarter. We're already the number one provider of complex health care logistics solutions in the world. And we're not stopping there. Demand for cold chain logistics is accelerating and to further strengthen our global cold chain capabilities, we have added 27 temperature-controlled cross-dock facilities to our network. These facilities are designed specifically for fast, precise transfers of complex health care products between air and ground services while maintaining strict temperature control. We are the only carrier that provides end-to-end solutions for complex health care with our own assets, ensuring complete control, visibility and best-in-class service. Looking at our industrial and automotive customers, they continue to operate in a complex environment shaped by shifting trade patterns, evolving regulations and ongoing supply chain disruption. We're helping them navigate these complexities by combining the strength of our integrated network and RFID-enabled visibility with additional new capabilities. Here, we're expanding North American air freight services between the U.S. and Mexico, and we've launched a dedicated team of over 300 specialists with deep expertise in the supply chain needs of automotive and industrial manufacturing customers. These enhancements allow us to bring customers the right solutions, whether it's for a time-critical part, a cross-border shipment or to assist when they are making a broader supply chain shift. The second quarter marks the fourth straight quarter of delivering results that exceeded our expectations. Going forward, our number one priority remains moving the right packages and the right mix of volume through our network. This is as true for the U.S. as it is for the rest of our businesses. I'm pleased with the growth we've seen in our forwarding business as they have been focused on driving premium volume. And outside the U.S., our team has done a magnificent job of managing through trade lane shifts. As trade policy changes and volume and trade moves, UPS has been there to support. Encouragingly, we are seeing momentum on the China to U.S. lane which returned to year-over-year growth beginning in May. As we enter the second half of the year, we've got momentum, even in the face of external factors that could influence our results like war and fuel price volatility. Based on our year-to-date results, today, we are raising our full year 2026 consolidated revenue outlook to approximately $91.2 billion. We are raising our consolidated operating profit expectation to approximately $8.65 billion and lifting our diluted earnings per share guidance to approximately $7.22. Brian will provide more details in a moment. With the foundational groundwork now in place, we are excited about the opportunities that lie ahead. So with that, thank you for listening. And now I'll turn the call over to Brian.”