Financial Data and Key Metrics Changes - For Q4 2025, consolidated revenue was $24.5 billion, with an operating profit of $2.9 billion and an operating margin of 11.8% [7][21][22] - Full year 2025 consolidated revenue reached $88.7 billion, with an operating profit of $8.7 billion and an operating margin of 9.8% [7][31] - The company incurred total charges of $238 million in Q4, including a $137 million non-cash after-tax charge for the write-off of the MD-11 aircraft fleet [4][22] Business Segment Data and Key Metrics Changes - U.S. Domestic segment generated $16.8 billion in revenue for Q4, a decrease of 3.2% year-over-year, with an average daily volume decline of 10.8% [26][27] - International segment revenue was $5 billion in Q4, up 2.5% year-over-year, despite a 4.7% decline in average daily volume [29] - Supply Chain Solutions revenue was $2.7 billion in Q4, down $388 million year-over-year, with operating profit of $276 million and an operating margin of 10.3% [30][31] Market Data and Key Metrics Changes - U.S. small package market growth is expected to be low single digits in 2026, with export volume growth outside the U.S. anticipated to be subdued [16][39] - The company increased SMB penetration to 31.8% of total U.S. volume, driven by a 25% year-over-year revenue growth in the Digital Access Program [9][10] - U.S. imports were down 24.4% year-over-year, with significant declines from Canada and Mexico [29] Company Strategy and Development Direction - The company aims to reduce Amazon volume in its network by 50% over an 18-month period, with plans to glide down another 1 million pieces per day in 2026 [11][34] - The strategy focuses on delivering differentiated value to customers and improving long-term profitability through effective capital allocation [19][41] - The company plans to further automate its network, increasing the percentage of U.S. volume processed through automated facilities to 68% by the end of 2026 [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in completing network reconfiguration plans without hindering growth in targeted markets, despite challenges from global trade policies and geopolitical concerns [7][12] - For 2026, the company expects consolidated revenue of approximately $89.7 billion and an operating margin of about 9.6% [17][35] - The first half of 2026 is expected to see revenue decline due to the Amazon glide down plan, with a recovery anticipated in the second half [18][38] Other Important Information - The company generated $8.5 billion in cash from operations in 2025 and returned $6.4 billion to shareholders through dividends and share repurchases [10][31] - The company completed acquisitions of Frigo-Trans and Andlauer Healthcare Group to expand healthcare logistics capabilities [10] Q&A Session Summary Question: Guidance and exit rate for 2026 - Management indicated that the first half of 2026 will experience margin pressure due to costs associated with the MD-11 retirement and the transition of GroundSaver to USPS, with expectations for recovery in the second half [43][46] Question: Domestic package growth expectations post-glide down - Management expects mid-single digit growth in enterprise and SMB volumes in the second half of 2026, with revenue per piece growth normalizing [51][53] Question: Rate increases for domestic and international - Revenue per piece growth is expected to be around 4.5% for the year, with a normalization to about 3% in the second half [62] Question: Cost per piece trends - Management anticipates a normalization of cost per piece as automation and network reconfiguration efforts take effect, aiming for a return to inflation-level increases [68][70]