UPS · 10-Q · 2026Q2 · Full report

Interest Rate Pressure

UNITED PARCEL SERVICE INC · 2026-08-05 · Importance 30 · Surprise 40

Interest expense increased $34 million in the second quarter of 2026 and $78 million year to date, representing year-over-year increases of 14.3% and 17.0%, respectively. The increase was primarily caused by higher average outstanding debt balances and higher interest costs on finance leases. Lower interest rates also reduced investment income during the quarter, partially offsetting higher pension income.

Key facts

• The average balance outstanding of commercial paper during the six months ended June 30, 2026 and 2025 was $54 million and $95 million, respectively, and the average interest rates were 3.48% and 4.01%, respectively. source
• Interest expense increased $34 million for the quarter and $78 million year to date, primarily due to higher average outstanding debt balances and higher interest cost on finance leases. source