Good morning, ladies and gentlemen, and welcome to Louisville, home of the Kentucky Derby, Muhammad Ali, and the Bourbon Trail, which I hope to be on by five o'clock today. Louisville is also the beating heart of UPS, and we are very proud to have this opportunity to share a big part of our company with you. I'm PJ Guido, Investor Relations Officer. Welcome to the UPS 2024 Investor and Analyst Day. To those of you in the hangar, it's great to have you with us at our global Air Hub. For those of you online, we thank you for tuning in and expressing an interest in UPS and our plans for the next three years. This morning, you'll hear from Carol Tomé, our Chief Executive Officer; Matt Guffey, our Chief Commercial and Strategy Officer; Kate Gutmann, President of International, Healthcare, and Supply Chain Solutions; Nando Cesarone, President of U.S.; Bala Subramanian, Chief Digital and Technology Officer; and Brian Newman, our Chief Financial Officer. Also joining us from the UPS leadership team are Norman Brothers, Chief Legal and Compliance Officer; Darrell Ford, Chief Human Resources and Chief Diversity, Equity, and Inclusion Officer; and Laura Lane, Chief Corporate Affairs and Sustainability Officer. Following the presentation today, all presenters will be available for questions and answers. As a reminder, today's presentation is being webcast, and all supporting slides and AVs are available right now at the UPS Investor Relations website. Please note that some of the comments we'll make today are forward-looking statements within the federal securities laws and subject to risks and uncertainties. Additional information about forward-looking statements is contained in our slides and in our SEC filings. Also, the reconciliations for any non-GAAP measures we refer to today are included in the presentation slides on our Investor Relations website. Now, we have a great program for you, so let's get started. It is my pleasure to introduce our CEO, Carol Tomé. Thank you, PJ. Good morning, everyone. Thank you for joining us today. We're holding today's conference in our brand-new state-of-the-art air hangar at UPS Worldport in Louisville, Kentucky. This building is so new that you are the first visitors we've hosted here, and this hangar is big. In fact, this building is large enough to park two 747-88 aircraft like the one right behind me. Worldport is our global hub. The facility is 5.2 million sq ft, which is the size of 90 football fields. At Worldport, we have sort capacity of 416,000 packages per hour, and daily, we have 360 inbound and outbound flights. As a result, we have a team of our own meteorologists tracking weather around the world and a fleet of flight simulators to train our pilots. I've been in a flight simulator. It's, it's way cool. Now, you may ask, why Louisville? Well, it's because Louisville is in a great position geographically. This hub is within 2 hours' flight time of 75% of the U.S. population and 4-hour flight time of 95%. And because we have an integrated network, having an air hub that is so close in proximity to the U.S. population, well, it gives us better speed and lower cost. Now, in addition to showing off our new hangar, we wanted you to see a few other items. So if you look around the hangar, you'll see an electric tractor from our feeder operation. You will also see an e-bike we are piloting in certain urban areas, and these are two examples of vehicles in our rolling laboratory of over 18,000 vehicles that are powered by some sort of alternate fuel. I hope those of you who are here with us today had the opportunity to see our demos. We put together demos for Smart Package, Smart Facility, the UPS Stores, and Happy Returns, and cold chain packaging. These are just a few examples of the investments that we are making to grow and make our integrated network even more efficient. Our last Investor Day was June of 2021. Much has changed since then, but not our core principles, and they start with purpose. Our purpose, moving our world forward by delivering what matters, well, it's our why. It drives us to serve our customers, our communities, and each other, and this includes advancing UPS's brand relevance to be seen as contemporary, digital forward, and as a global logistics leader. As measured by a third party, we now have the highest brand relevance of any company in our industry. Our next principle are our values, which include integrity, safety, teamwork, and service. We remain committed to these values as established by our founder, Jim Casey. They are the core of who we are and what we do. Our third principle is our commitment to maintaining a strong financial condition, which enable us to deliver our business and financial goals. And the last principle is our commitment to paying a dividend. The UPS dividend is a hallmark of our financial strength, and this year marks the fifteenth consecutive year we have rewarded shareowners with an increase in our dividend. Now, while our principles haven't changed, in terms of how we operate the business, we are fundamentally a different company than we were three years ago, and let me share a few examples. We reduced our dependence on growth what was one company, and instead expanded our portfolio of offerings to other customer segments. Starting with healthcare, since 2021, we accelerated growth through strategic acquisitions, including Bomi and MNX Global Logistics. We expanded UPS Premier to 48 countries, and we grew our healthcare facility footprint to over 17 million sq ft. This enabled us to generate $10 billion in healthcare revenue in 2023. Looking at SMBs, we improved our time in transit, expanded our Digital Access Program, and increased SMB penetration in the U.S. by roughly 200 basis points. This contributed to a 12% improvement in U.S. revenue per piece. We also acquired Roadie, Delivery Solutions, and Happy Returns, adding enabling capabilities to our portfolio. In supply chain solutions, UPS Symphony, our supply chain portal, went from being a pilot at our last Investor Day to managing over $1 billion of revenue across the platform. We entered into a new five-year agreement with the Teamsters, as well as new agreements with pilots and mechanics and other unions around the world, with no work stoppages. We turned productivity into a virtuous cycle at UPS. Last year, initiatives like our Total Service Plan, coupled with our network planning tools, enabled the highest productivity results in our company history and drove an improvement in pieces per hour of 2.87 pieces versus 2021. And when you think about the billions of packages we deliver every year in the U.S., this translates into hundreds of millions of dollars in savings. In terms of sustainability, we've made great progress. Our greenhouse gas emissions have declined by 14% since 2021, and we are progressing towards our 2025 and 2035 sustainability goals. We've accomplished a whole lot more. Looking at our Customer First, People Led, Innovation Driven strategy, we track progress in customer-first through our Net Promoter Score, or NPS. In the U.S., we finished 2023 with an NPS of 44 and moved closer towards our target NPS of 50. We measure our progress in people-led by how likely an employee is to recommend others to work at UPS. We pushed decision-making closer to the customer and improved work-life balance for our employees. We restructured our operating units and elevated talent throughout the operation. In 2023, 65% of UPSers said they would recommend UPS as a place to work. That's an improvement of 14 percentage points over the past 4 years. Now, our goal for likelihood to recommend is to reach 80% or higher. We measure innovation-driven through returns on invested capital, and in 2023, we delivered an adjusted return on invested capital of 21.9%, which is industry-leading in our sector. We've accomplished a lot in the face of a market that is very different than we thought it would be. At our last Investor Day in June of 2021, the U.S. small package market was expected to grow from 74 million average daily volume, or ADV, to 108 million ADV by 2023. But changes in market conditions slowed market growth. In fact, the U.S. small package market last year only reached 84 million packages per day as COVID spikes in demand reverted. Further driving demand reversion, forecasters did not project the high rate of inflation that curbed consumer spending, nor did forecasters anticipate wars or higher geopolitical tensions that are causing changes in global trade lanes. The convergence of several mega trends and macroeconomic forces has us at a critical crossroads: either disrupt ourselves or be disrupted, and we've elected to disrupt through re-imagination. We sold UPS Freight and bought digital companies. We've launched new ways of working, and we're right-sizing our company. We've announced that we are reviewing strategic alternatives for Coyote, and today, we will discuss our aggressive growth and productivity plans. To disrupt through re-imagine is to create a better and bolder UPS. Better and bolder means being very selective in the markets that we want to serve and serving them better than anyone else. The first circle sets forth our declaration that we will be the premium small package provider with two goals. We'll take U.S. SMB penetration, this is volume penetration, up to 40%, and we will become the number one premium international integrator. The second circle sets forth our declaration that we will be the premium logistics provider with three goals. First, we will become the number one complex healthcare logistics provider in the world. Second, we will become a premium logistics orchestrator, and third, we'll use UPS Digital as a growth enabler. Now, as you can see in the Venn diagram, these circles, well, they share the same strategic framework: Customer First, People Led, Innovation Driven, productivity-driven through initiatives like Network of the Future, will be the growth flywheel that powers these declarations and makes them a reality. We are calling the next three years our One Plus Two Plan. Now, let me explain that. First, we believe that the market has reset, and the industry is poised to return to growth. We wanna grow, not just at the market rate, we want to grow faster than the market. So in each of the next three years, we are planning for volume and revenue to grow, and we expect by 2026, that our consolidated revenue to reach between $108 billion and $114 billion. The One Plus Two nature of our plan is driven by cost. The cost of our Teamster labor contract is front-end loaded and puts pressure on the first-year margin. But we will anniversary the first year of the contract on August first, so the cost growth lets up considerably starting in the back half of 2024. As part of our 1+2 Plan, in year 1, we will focus on volume, revenue, and operating profit dollar growth, and then in years 2 and 3, we'll focus on volume, revenue, and operating margin growth, with consolidated operating margin expected to reach 13% by 2026. Today, you'll hear from the executive leadership team on how we're going to achieve these targets and bring our declarations to life. First, Matt will cover the market outlook, which is the basis for our growth algorithm. Kate will talk about what we're doing to leverage our global international package network and our supply chain portfolio to capitalize on market trends, but also to drive one UPS, one UPS that includes healthcare logistics, which is one of our most exciting growth initiatives ahead of us. Nando will walk you through the details of our U.S. roadmap for growth and efficiency, including the details of our Network of the Future initiative. Bala will provide more detail on what we're doing to increase operating agility, including our investments in RFID, automation, and robotics, as well as UPS Digital. Then Brian will close it out by providing our consolidated financial projections and capital allocation plans. We've got a great lineup for you today, so let's keep moving. Here's Matt to discuss the market outlook. Thank you, Carol. I'm excited to be here in my new capacity as UPS's Chief Commercial and Strategy Officer as I start my 25th year as a UPSer. In this role, I have responsibilities over strategy, marketing, and what we are calling our on-demand network, which includes Roadie, Happy Returns, and The UPS Store. Bringing all these teams together has allowed us to take a reimagined approach on growing our business, where we play, how we play, and how we are disrupting ourselves. Today, I will unpack those details by providing you an overview of what we are seeing in the logistics market. Let's start with our core small package market. Carol told you that we are approaching the next three years with our 1+2 plan. This follows the return to growth trajectory in both the U.S. and international markets. Coming out of last year's reset, we see growth returning globally. This year, while projected revenue is up from 2023, volume growth is flattish, especially in the U.S. market. I will provide you more details in subsequent slides, but in the U.S., the year-over-year projected volume growth in 2024 is low single digit. That being said, the outer years are more optimistic, as a projected growth rate momentum does pick up. The logistics market is seen as mirroring the macroeconomic environment. Growth in the U.S., uneven growth across Europe, and laggard growth in China, providing opportunities for accelerated growth in other areas of Asia. Post-pandemic, we see that the world is settling in to new growth patterns. Now, let me take you deeper on what this means for where we will play in these markets, beginning in the U.S. So I'll start by contextualizing the impact of the pandemic on U.S. supply and demand, as this has been a critical point of inflection for the industry. First, I'll orient you to this chart. The blue line represents supply. This is total network capacity from pickup to drop-off, not just ours, but also our competitors. The green line is demand. To put simply, this is total packages. The gap between the two lines is either the surplus or deficit in the total market. So let me unpack and address the U.S. in three time intervals: before COVID, during COVID, and after COVID. The first interval depicted here is before COVID. Using 2018 to 2020 as a benchmark, we had a supply and demand equilibrium. Historically, at any given time, there was always a buffer of approximately 6 million packages a day, which is what we call equilibrium. The majority of the buffer sat with the U.S. Postal Service. The next interval is during COVID in 2020 through 2022. Here, we see a supply and demand mismatch which was driven by shelter in place. Demand outpaced supply, creating about 6 million ADV, or average daily volume, of capacity shortfall. This also fueled more investments in capacity as carriers tried to keep up with the demand. Finally, the last interval is after COVID. We see another flip, with demand falling under supply. This is our current market condition. The investments made by market participants during COVID caused capacity to significantly overtake demand. We have estimated a surplus of almost 12 million ADV capacity in the market. But once again, about half the excess capacity continues to sit with U.S.PS, just like 2018 and 2020, and the remaining is with UPS and other competitors. The industry is expected to revert to equilibrium as the market grows and we optimize capacity. For example, later, Nando will unpack consolidation as a part of Network of the Future. Last year, we closed 30 sorts, and this year we are closing 40, taking capacity out of the market. The excess capacity in the market in 2023 allowed for some volume diversion ahead of our labor negotiations. But shortly after securing a deal, we were able to win back 60% of the diverted volume. So for us, it is more than just win back, it's also about winning new. We are leaning into the strength of our integrated network to differentiate how we solve for the needs of our customers and fill our capacity. As we look forward, let me describe how two mega trends are shaping the needs of our customers and impacting the size and characteristics of our U.S. market. Today, consumers are more price conscious and are searching for the best value, and they are finding it online. When you break down online sales growth, we see consumers favor general merchandisers like Amazon, Walmart, and Target. To keep up, more and more SMBs are leaning into digitalization with tools like e-commerce platforms that allows them to scale their business and also stay relevant. Looking at what this means for us, volume growth in the total market is being largely driven by Amazon self-delivered. This means to grow, we are leaning into parts of the market that are aligned with our competitive advantages. When we distill down our target market, aside from healthcare, which Kate will discuss, two segments stand out when thinking about our right to win and compatibility with our network. From a customer type, it's small and medium businesses. From a product perspective, it's business to business or commercial. As you can see on the slide, targeted growth in these two segments drives our revenue quality. Since our last Investor Day, we have significantly built out our digital ecosystem to complement our integrated physical network. To do this, we partnered with Bala and his team to leverage our technology stack and large amounts of customer data. Just to give you an idea of scale, our customer data platform hosts 650 TB of data. This has allowed us to make our services more accessible and more bespoke to serve our SMBs. Let me give you a couple examples to make this real. Today, our SMB sales force can leverage Deal Manager. It's our self-serve pricing tool. This enables speed so that our sales force can win and go back to customers with an offer the same day. It also has technology to score the deals. So the deal score leverages data science and machine learning for real-time pricing guidance based on customer size, industry segment, and competitive dynamics. The higher the deal score, the more it is a win-win for UPS and our customers, and we are seeing win rates of about 80% on Deal Manager. So our sales force is winning more, they're winning faster, and they're winning better. Today, 95% of all deals less than $1 million run through Deal Manager, and by Q3 of this year, we expect almost all deals up to $10 million to be priced in Deal Manager. We have further built out our technology ecosystem that powers our digital access program. We've enhanced our integrations with our channel partners and introduced a new capability that we call Fast Lane. Through this integration, we can offer more competitive and dynamic rates, which it gives us more flexibility to adjust rates on a transaction-by-transaction basis. We can also test new product bundles by partner and target audience to quickly learn and iterate before full launches. Prior to Fast Lane, offering new product capabilities took months. Now, we can do it in days and weeks, and when it comes to rate changes, we can implement within 24 hours. Since the last Investor Day, we have more than doubled our customers on platform to 5 million, and we continue to add more than 25,000 customers a week. Our 2024 plan is to grow DAP revenue well above $3 billion. This year, we will also grow our commercial volume. Today, we are the industry leader in the B2B market, and we continue to innovate to strengthen our value proposition. Most recently, we've monetized our delivery windows to allow for more efficiency and better planning for our customers as they look to replenish their inventories. Our focus on SMB and B2B, combined with our digital innovation, is resulting in premium volume and driving higher margins. Moreover, we are delivering value and fostering loyalty that allows us to grow with our customers by meeting them where they want with what they need. In our international markets, we are seeing a combination of push and pull factors that are driving firms to pivot from the traditional APAC manufacturing hub to more regional production and fulfillment models, which is disrupting supply chains. As a result, trade lanes are shifting and businesses are seeking alternatives with China Plus strategies, expanding sourcing to new markets, like Thailand, Vietnam, Malaysia, and India. In this chart, we see other APAC now expected to have the second highest export volume growth CAGR from 2022 to 2027. We are seeing more nearshoring in markets like Mexico in efforts to get products closer to the consumer. In this chart, we see that LATAM continues to have a high expected growth CAGR, and even overtake Europe by the end of the period. We're well-positioned to capture growth in these accelerating markets with our end-to-end global capabilities and the strength of our U.S. domestic network. Our portfolio enables our customers to have more resilient and flexible supply chains, and Kate will talk to you about our strategic investments and partnerships that will position us to win in these markets as one UPS. Finally, to further accelerate our growth, we are reimagining our go-to-market. Today, in the market, there is a bifurcation of shipper needs between economy and premium. When it comes to premium, speed is the main buying criteria, while others are willing to trade a slower time in transit for more economical pricing. Although these are divergent needs, both are underpinned by reliability, visibility, and customer experience, which is what our network is designed to deliver on. With Network of the Future, our advantages will only be further amplified. To better serve our customers in this environment, there are three product pillars that we are executing this year: simplifying our product portfolio, enhancing our products, and innovating to launch new products. But what makes our approach different is how we are leaning in to technology to be more agile and ready to adapt to changing market conditions. I will highlight Architecture of Tomorrow, or AOT, as an example. Here, we are building out a cloud-based infrastructure to replace our legacy mainframe pricing systems. This is the same back end that powers FastLane on our partner channels that I spoke about earlier. AOT enables us to offer simplified and dynamic rates that drive volume into the network based on available capacity and cost to serve. Hyperlocal pricing for same-day or short-zone packages is an example of Architecture of Tomorrow. We are also enabling acceleration of new products to market by growing on the edge. For example, with our most recent acquisition of Happy Returns, we are in the market today with boxless, label-less, consolidated returns. This not only serves for our customers and their customers with a frictionless, best-in-class experience, but it also expands our addressable market. The three-year market CAGR for consolidated returns is double-digit and ten times that of single-piece returns. As a UPS company, Happy Returns is expected to double its volume and revenue this year, with a large driver of that growth being synergies with The UPS Store as Return Bar locations, bringing the physical and the digital together. We've also launched delivery of non-conveyable bulky items through Roadie XL. It's still early days, but a large opportunity. The world does look different than we all expected, but we, as UPS, also fundamentally look different as a business, positioning us to grow in this new normal and in the future. Thank you. Now I'll turn it over to Kate to cover International, Healthcare, and Supply Chain Solutions. Good morning. I'm Kate Gutmann, UPS President of International, Healthcare, and Supply Chain Solutions, and I'm excited to take you through our declarations, our progress, and our path forward. We have three declarations that guide us in International, Healthcare, and Supply Chain Solutions. The first is that we will be the number one premium international small package provider as measured in profit dollars. I'm also pleased to say that UPS is in the number two position currently. In 2023, UPS also narrowed the gap with the market leader, and we have the highest margin in the industry. We have our focus on the $50 billion premium market opportunity available and an enhanced right to win, which I'll discuss shortly. But this leads to our next declaration: to become the number one complex healthcare logistics provider. Our healthcare portfolio, powered by the UPS global network and end-to-end supply chain, achieved $10 billion of revenue in 2023, and we are executing on the plan to achieve $20 billion by 2026 through organic and inorganic growth, and I'll share more details in a moment. For SCS, our declaration is clear: We will become the premium logistics orchestrator and deliver the best margins in this space. Within SCS, we participate in all modes and all facets of the end-to-end supply chain. We integrate these diverse modes into a seamless whole to create value for our customers. We have moved up to the number 2 position for best operating margins in the SCS forwarding and logistics part of the market. While we've also improved our operating margin through expense reduction and increased efficiency, healthcare penetration of air freight revenue increased by 400 basis points last year alone, further supporting the SCS margin. That provides some fast facts on our strategic direction and declarations, and in a moment, I'll add more depth on our plan of action, which is well underway. But first, I'm excited to show you how these three businesses, together with our domestic small package business, are greater than the sum of its parts. This is the One UPS advantage, and I wanna zoom in on the strategic moves that we've noted, leaning into healthcare and capitalizing on trade lane shifts. To create a competitive advantage for both, we devise solutions that span the globe and the end-to-end portfolio. We can orchestrate our customer's entire supply chain, from manufacturing to customs brokerage, freight forwarding, distribution, transportation to the end recipient or the store, and even returns and reverse logistics. But it's not just about that expansive portfolio, it's how we weave the services together to meet each customer's needs. This is what we call the One UPS advantage. You may ask, "How's this different from the past? Is it?" The answer is yes, it is. Whether in healthcare or the market dynamic with trade lane shift that's upon us, we'll win more by leveraging our total solution against piece-by-piece competitors. We will actually, from the realignment of our executive P&L ownership, when Carol aligned the P&L owned by me and Nando specifically, to the change that's occurred with the connection of sales resources around the globe via our customer relationship management system, to modified sales compensation that now matches and rewards for One UPS sales. We're excited and are positioned for a success. One UPS enables increased profitability and customer loyalty. The global healthcare logistics market is projected to grow from about $130 billion in 2023 to about $152 billion in 2026, and we continue to lean into the complex part of the market because it's where our customers' fastest growing segment is. The part of the market with complex logistics is valued at $82 billion. The healthcare logistics market is a major strategic move for UPS because the demand for healthcare is growing, and healthcare companies of all sizes are rapidly innovating to keep pace with the needs of an aging population and problems related to chronic disease. For example, new medical devices, especially ones suitable for home use, are on the rise, and so are new drugs like mRNA vaccines and new radiopharma solutions. In fact, 55% of the drug pipeline is biologics, and when biologics are involved, that means cold chain and temperature monitoring services are needed. UPS has been in the logistics space for two decades, specifically healthcare, and we set out to become the number one complex healthcare logistics provider. We've expanded our marketing clinical services. We've also enhanced our building and fleet cold chain capabilities through the Bomi acquisition. Moving even further into specialized services, our MNX acquisition strengthens our next flight out capabilities that our healthcare customers require. We will continue with a mix of organic and inorganic growth as we march forward. The complex logistics market includes a range of specialized needs, from medical devices to clinical, to gene therapy, lab specimens, and so much more. These areas require precision logistics, and we are well-positioned to grow further, supported by our expansive global portfolio and network. The trends that are driving demand for healthcare naturally also drive demand for logistics and, of course, our revenue. The healthcare logistics market is especially attractive to us because it has year-round demand and is more resistant to economic downturns. That enables more predictability for operations across the whole supply chain. The majority of our healthcare customers buy more services across our end-to-end supply chain than customers in any other segment. That means we get a greater percentage of those customers' total supply chain spend. In short, they rely on one partner, UPS. With the One UPS value proposition, healthcare companies that buy two or more services from us churn 35% less. Integrated solutions lead to higher growth and deeper partnerships. Healthcare users today account for 45% of our early AM delivery. Healthcare is also a large user of UPS premium services, like Next Day Air, reverse logistics, and UPS Premier. Healthcare revenue is beneficial to all three segments of UPS. To put it into perspective, in our domestic business, package business, healthcare represented about 10% of the total revenue in 2023. In an international package, that number was over 7%, and in SCS, healthcare drove more than a quarter of our total revenue in 2023. Operating margin, all of it is accretive healthcare across all of our segments. And if we were to break out healthcare, it would show a global operating margin that's in the high teens. And with the momentum we've seen and the actions we're taking, we expect to maintain or increase the operating margin over the next three years. Our investments in healthcare logistics are centered around six growth pillars: cold chain, clinical advanced therapies, labs and diagnosis, pharma, home healthcare, and medical devices. Complex healthcare, particularly clinical and pharma, require product stability to be safe and effective, meaning products are time and temperature sensitive. For transport, visibility and reliability are table stakes. Furthermore, UPS is highly skilled at residential deliveries and reverse logistics. Both play key roles in the success of lab diagnostics, pharma, home healthcare, med device. Serving these six complex healthcare growth areas requires specialized and differentiated capability. We've come a long way since expanding healthcare logistics services in 2015, doubling our revenue to $10 billion, and we intend to double it again by 2026. To reach $20 billion, we will unlock organic and inorganic opportunities, leveraging our cold chain global capabilities, building LabPort, our Louisville-based lab end-of-runway solution, and expanding marketing and sales and gene specialization, just to name a few. Our second strategic move is focusing on trade lane shift. International trade flows have changed a lot over the last few years as major companies restructure their supply chains to reduce costs and hedge against potential disruptions. Think global pandemic breakdown, lockdown, Red Sea pirates, and issues related to severe weather. Companies are increasingly pursuing China Plus sourcing and distribution strategies. About 20% of manufacturing has moved out of China to countries like Mexico, India, Vietnam, Malaysia, and Poland. This is a market dynamic that impacts all companies, all supply chains of note, all carriers, and all modes of logistics and distribution. This is where One UPS is really differentiated from the competition. By being able to rely on one partner to help a company through the change is a big advantage, the One UPS advantage. So let's hear about it from GlobalCo. Welcome to my world, international business. Talk about complex. More on that in a sec. In the global supply chain, the key to winning is speed and visibility. GlobalCo uses all modes of transportation and distribution to ship our goods. We need to keep our supply chain resilient, so we recently shifted manufacturing to two locations instead of one. This is where it got super complicated. To do this, we used eight different carriers to move goods, two ocean ports, two airports, one ground line hauler, one small package carrier for high-value international air shipments, and two small package carriers for final mile delivery in the U.S. Add to that the complexity of all the different customs brokers at each border. Because of this, complexity is way up, and ease of use and visibility, way down. Needless to say, this wasn't working very well. Then came the One UPS solution. UPS combines physical and digital flows. UPS offers all modes of physical transportation and distribution, as well as customs brokerage, all populated into their end-to-end global visibility tool, Symphony. Physical meets digital. UPS does it like no one else. Now, that's the One UPS advantage. This video illustrates the value that One UPS provides. Our end-to-end network is unmatched. Now, let's take a look at the largest recipient of this manufacturing and distribution movement, Mexico. The Mexico-U.S. border is one of two cross-border trade flows growing notably in the world as companies shift their manufacturing and distribution closer to the United States, the largest consumption market in the world. Companies are taking advantage of tax savings and lower labor costs in Mexico for both manufacturing and distribution. To understand the UPS opportunity, it's important to understand the flow of goods. Most of the goods that flow through Mexico will come from Asia via freight forwarders, either by air or ocean, and UPS is very poised to handle these shipments. When items are needed urgently, either due to value or critical need, they'll actually be transported to Mexico via UPS or a competitor's small package service. In either case, goods are then cleared by brokers for entry into North America. The goods are then warehoused, and then enter the U.S. via line haul providers. Finally, the goods are drop-shipped into our U.S. small package network or the postal network for final mile delivery. This is a fragmented market with various players at each stage. That generates an opportunity for UPS to create an unbeatable, end-to-end, physical, and digital solution. This seamless solution will create value at every step along the journey, with the reliability of the UPS network and full visibility from UPS Supply Chain Symphony. By doing this, we will grow our revenue and operating margin. We'll generate more forwarding revenue by handling the inbound transportation. We'll generate more warehousing revenue through our fulfillment services. By handling the line haul, we're able to provide a faster and more reliable time in transit for our customers and simultaneously drive efficiency and savings for ourselves. We've already seen this from some fast-moving customers, and we now have a team focused on converting more revenue to UPS as we operate across the portfolio. Our One UPS approach will unlock more of a customer's end-to-end revenue, getting the growth flywheel going. It will also help us control more of the movement to our hubs, creating cost efficiencies. For example, not all volume needs to be processed in crowded border hubs. We can create final mile destination splits for our customers by moving trailers further into our U.S. network. This improves time in transit, reduces handles, and cost. And beyond Mexico, as global companies diversify their supply chains with a China Plus resiliency strategy, other countries in Asia will benefit. Of the world's 80 largest trade lanes, 49 involve an Asian country on at least one end, and 22 actually involve an Asian country on both ends. We've been very strong on our China to U.S. trade lanes because that's where our customers needed us to be as they sourced from China. But with the trade lane shifts, our customers now need us to enable their expansion of manufacturing, sourcing, and distribution to broader Asia and India markets. We are unlocking growth acceleration with intentional diversification of our Asia business. We plan to maintain China and Hong Kong growth at or above the market rate, while accelerating our growth in nine target countries to 2.5 times the market growth through operational and commercial investments. These countries are noted on the slide. We're investing in hub and network enhancements, which will provide benefits to customers across all modes of transportation. For example, we recently announced a substantial enhancement of our Hong Kong operations with a new automated hub on the last available airside parcel at the Hong Kong Airport. This will significantly improve our competitive position in the Greater Bay Area, which accounts for 37% of all of China's exports, and where numerous Fortune 500 companies maintain their operations. More intra-Asia network and routing enhancements are also underway. Our most recent announcement is the construction of a new air hub at the Clark Airport in the Philippines. Once completed, these network and routing changes will enhance UPS time in transit in 205 Asia lanes. We're creating a plan to advance the completion of these two network enhancements, scheduled to open at the end of 2026 and in 2028. This will unlock capability to significantly outpace the market growth. We're also implementing a game-changing strategy called Next Gen Brokerage, which will enhance many services. With Next Gen Brokerage, we will have a customer portal for updating and replacing customs documents. This means exchanges with our best-in-class brokerage group to answer questions from customs and gain later clearance, 24 hours a day, 7 days a week. Next Gen Brokerage decreases customs holds by 40%, and we recently tested this new solution with the least experienced international shippers in the market that go to the UPS Store, and we saw an 80% reduction in holds from missing or incorrect information. Now, that's an advantage. When you tie ease, experience, and speed together, you unlock growth, and that's what we're seeing in the areas where we have implemented the new solution. We're rolling this out throughout the world in 2024. Next Gen Brokerage is going to drive more than $100 million in growth and efficiencies in 2025. We're simplifying every step of the brokerage journey, from pre-shipping to shipping, clearance, delivery, and billing. And lastly, with international DAP, our Digital Access Program, we're making it easy for platform customers around the globe to open a UPS account and quickly access our network. In fact, DAP is available in 30 markets and with 59 platforms, giving more connections to small and micro customers, fueling growth. The global market is very complex, therefore, customer supply chains are complex and typically involve many carriers and distribution around the world, but they don't have to. There are tens of thousands of competitors in the global logistics market, usually covering only one geography or one service. But we have even more differentiation. We call it orchestration. It means the ability to shift modes of transportation easily and quickly day to day. A real-life example would be the heightened risk of ocean freight from Red Sea pirates. We have an automotive customer who decided in one day to shift higher value product into our international air freight and from the ocean, and also the highest value into our small package network. They did it with just one call to one partner, one UPS. We can provide a solution to address all needs for the physical and digital. UPS will leverage all of our capabilities to gain more revenue by providing customers with unmatched end-to-end solutions. This is the advantage that sets us apart from the competition. As I leave you, this video provides a powerful, excuse me, example of automation in our Velocity distribution facility. Thank you. We like it when a plan comes together, where complicated becomes simple, where people and tech work together to move thousands of products. We call that great service, and you'll find it at UPS Velocity, one of our largest, most high-tech facilities, where we move over 350,000 units through 900,000 sq ft of space every day, and people work with 700 bots using AI to speed processing. It's a game changer designed to deliver packages faster, easier, and right on time. Now, that's service you can trust, and that's just plain awesome! Please welcome Nando Cesarone. Good morning, and thanks for joining us here today and online. It's my pleasure to share with you the details of our U.S. roadmap for growth and efficiency, including many of the physical changes that are part of the first phase of Network of the Future. As part of our Better and Bolder strategy, our declarations are to reach 40% SMB volume mix in the U.S., expand our addressable market through UPS Digital, and ultimately deliver a 12% U.S. operating margin. We have three enablers to help us get there. First, we'll return to volume growth by capturing share. Over the past four years, we've grown our penetration of SMBs by offering industry-leading service and enabling capabilities, and we've got a lot more share to get. Second, we'll return to growing U.S. revenue per piece faster than cost per piece, using the tools Matt described and a relentless focus on productivity. And third, we'll leverage new technology, robotics, real-time RFID-enabled visibility, wrapped by our Total Service Plan and our Network of the Future, which will all result in enhanced efficiency. Productivity at UPS is a virtuous cycle, and we know the power of productivity and profitable volume working together. Productivity unlocks volume growth, and volume growth unlocks productivity. Ultimately, we'll exit 2024 with a 10% operating margin and expand operating margin to at least 12% for the full year in 2026. Let's dig into each of these areas, starting with a return to volume growth. I'll touch on what we're doing with SMBs, B2B, healthcare, and our on-demand network. Matt talked about market growth in the U.S. While the projection for average daily volume market growth, excluding Amazon, is low single digit through 2026, a large majority of the profit opportunity originates from SMBs. We've made great gains in SMBs over the last 4 years, and we'll continue to focus on this part of the market. In talking to these very same SMB customers, we found what they value most is service, simplicity, reliability, and speed. They also expect to engage with carriers through frictionless digital experiences, and we're finding more and more ways to continue delivering those experiences. We've created an SMB ecosystem that connects UPS's physical and digital network to make it easy for SMBs to ship and do business with UPS. On the digital side, solutions like our Digital Access Program or DAP, ups.com, and the UPS mobile app, putting shipping, visibility, payment, and claims at their fingertips. On the physical side, our U.S. footprint of over 5,200 The UPS Store locations and more than 60,000 access points and flexible pickup options by your UPS driver, making accessing UPS easy and convenient. As Matt referenced, we have new products, a simplified portfolio, and value-based pricing opportunities. Don't forget, we have 84 million U.S. customers that have signed up for UPS My Choice to enjoy that visibility and receive all kinds of information, including delivery notifications from UPS. Healthcare is also a key to U.S. growth, and we see significant opportunities across the medical device and lab sectors. These are highly regulated and demand high levels of service that are facilitated through UPS Premier. Additionally, our on-demand network through UPS Digital will expand our addressable market with capabilities like no box, no label returns with Happy Returns, and big and bulky products through Roadie. We expect this to be a fast-growing business for us, and although the absolute dollars are not huge relative to our package business, the contribution to top-line growth for the next few years is expected to be meaningful as UPS Digital gains traction and scales. With speed, scale, and synergies, our ecosystem is enabling us to grow along with our SMB customers. It really is a one-stop shop. To grow B2B and select enterprise customers, we'll focus on the core and a broader approach. We're leaning into our superior network, reliability and speed, new weekend sorts in 26 origins, a returns portfolio, dynamic pricing, multi-shipments, and industry-leading service and delivery windows. All of these values will help us to extend our position as the premium player. Our physical network was built for commercial business. In fact, our fleet, our hubs, this beautiful plane behind us, cater to those package characteristics. We'll take commercial share by targeting top competitive commercial opportunities, improving our right to win, and focusing on multi-piece and heavier weight business. We are the market leader when it comes to commercial business. We're also optimistic we can create new growth in this market. Let's start by looking at what makes us the market leader today. First, our reliability. Last year, UPS led the industry with 97.1 on-time performance, which is more than 130 basis points ahead of our closest competitor. But we're not just on time, we're also pretty fast. UPS Ground commercial is either faster or at parity in 80% of the top 25 U.S. markets, and we're getting faster over the weekend. This year, we'll enhance four additional markets to start, Seattle, Houston, Boston, and Minneapolis, by offering Saturday pickups with Sunday sorts that pull volume forward a day or more earlier. For example, when a customer has a scheduled Saturday pickup, they can reach many of their customers a day faster with a Monday delivery. We can also accommodate shippers to inject volume on Sundays for that same Monday delivery. We also have a renewed focus on commercial opportunities by focusing on sectors that can drive meaningful benefits to our customers. For example, adding Happy Returns to our offering improves the return experience for all consumers. We'll also use our dynamic pricing to attract volume, while simultaneously enhancing our margins and balancing our demand by week and by day. By enhancing the value proposition of our ground commercial business, we improve that right to win. Commercial shippers that use LTL are finding that UPS Hundredweight can save them real dollars on shipment weights less than 500 pounds. These shipments are ideal for UPS because they're multi-piece shipments that drive delivery density. Helping customers blend UPS Hundredweight into their routing of commercial deliveries is a win for them and a win for UPS. Lastly, we'll bring our industry-leading service and delivery windows to retailers to drive a positive customer experience and improve their own efficiency. As I mentioned, our goal is to grow revenue per piece faster than cost per piece. Our plan between now and 2026 is for the U.S. revenue per piece to grow at a CAGR of about 2.5% and a cost per piece at about 1%. On the efficiency side, we're making bold moves like never before under a new approach we call Network of the Future. I'm going to discuss several actions we're taking this year and provide some real-time examples of savings benefits we're reaping from automation and building consolidations. With the first phase of our Network of the Future, we're reimagining our core infrastructure and creating a roadmap that leverages current and emerging technology to meet the needs of our customers well into the future. Our mindset is guided by one key question: What would our network look like if we were building it from scratch today? Let's take a look. It's here, and it's happening, the Network of the Future. It's not one size fits all anymore. It's about adaptability, flexibility, adjusting to the ebbs and flows, the highs and lows. We're improving customer service through more automation, consolidation, and intelligent systems. It's about the brawn and the brains. The Network of the Future, using tomorrow's technology today. Here's what we're solving for with Network of the Future. We're gonna create capacity through productivity and create a lower cost per package. We're enhancing a highly productive network with less dependency on labor. We're building additional flexibility to better serve all customers. I liken this initiative like when we started this airline, and when we expanded beyond the U.S. and went international. It's a big bet, but we have proof points that support this initiative. Executing Network of the Future over the next five years will significantly reduce our dependency on labor and save $3 billion. We expect to realize about 50% of this expense reduction by 2026. We're taking a programmatic approach to transforming our network, starting with leveraging known technology and capabilities in every part of the network, not just our sortation hubs. We're future-proofing by building our customer demand and incorporating the latest technology developments along the way. We're scaling proven automation and implementing emerging automation as we go, including operations technology like Smart Package Smart Facility. It gives us about a 30%-35% bump in pieces per hour, and we're moving quickly with consolidation projects across the network. I wanna make it clear that this is not the automation that you have come to realize in the past. This is different from what we may have talked to you about previously. This is the automation of the future. Every single work area is being scrutinized for automation opportunities, not just our sortation hubs. For example, automated address corrections, which we've started, and redirects, automated dispatch for our package car drivers and feeder operations, and affixing simple things like preload assist labels to packages, to name a few. We're continuing to pilot and test automation before it's ready for prime time, automation like unloading and loading trailers. We're working really hard towards a lights out facility here at UPS. Let's take a deeper dive and look at a real-life example at one of our projects that is already in motion, that will reduce our reliance on labor and simplify the network. In Worcester, Massachusetts, we're closing the old facility that was built in 1969 and building a new, larger facility. We will consolidate four buildings, reduce network handlings, improve cubitization. We're actually improving the efficiency of the entire geography. This project will reduce our reliance on labor and simplify our national network. That's fewer buildings to support overhead and upkeep of those same buildings. Over in Mesquite, Texas, we have a hub modernization project and consolidation project, where we'll retrofit current sites with no change in capacity, but with one fewer facility. In Albany, New York, we're gonna modernize and automate certain pieces of the facility, but again, allowing us to increase capacity while closing another site. We're automating the current site, and of course, that all comes with its own labor. All these examples are in scope and are repeatable across our entire network. We currently have 63 automation projects targeted throughout the country, with more work beginning now and going through to 2028. By the end of 2028, we will more than triple the number of buildings with automation. The number of automated buildings will reach 400 in the U.S.. The vast majority of the automation projects will be completed in existing buildings. However, 10 of those automation projects are new builds from the ground up. We will consolidate operations across the network, closing around 200 operational facilities while growing our volume. Network of the Future is targeting all activities for automation within our four walls. These building consolidations and automations yield real savings. For example, we'll have fewer feeder runs. We'll be able to eliminate both AM and PM ground and air feeds in many, many locations. Network of the Future, of course, has a return well in excess of our cost of capital. Brian will provide more detail on the investments and returns we expect to see over the next three years. But while we're building out, we're also taking several actions to capture value early, enable growth now, and stay on path to achieve at least 12% operating margin by 2026. First, we're closing conventional buildings, flowing more volume into automated facilities, consolidating volume, and reducing the number of sorts. Matt mentioned we closed 30 sorts last year. We expect to close another 40 this year. We're making great strides and already seeing savings where we're automating and consolidating our network. Great example exists in Harrisburg, Pennsylvania. We've closed 15 sorts and reduced our staffing. We've reduced the number of handles each day by 60,000, leading to fewer damages and improved package condition for our customers. All of this amounts to $80 million in savings. Most importantly, consolidations will substantially lower our cost to serve and significantly improve our volume per resource ratios within our network. That's a new and simple measure. Average daily build volume divided by total U.S. resources, all job categories. To put our new metric into perspective, every one unit of improvement equates to approximately 7,500 resources. We're ensuring completion of in-flight automation projects that came prior to Network of the Future to deliver the same value. We're also driving operational and staffing efficiency by refining our metrics, optimizing our driver hours, and other operational levers, things we're great at. We're continually evaluating our investments and productivity, and deploying new automated solutions in existing automated sites. Lastly, we're defining the roles and responsibilities for the operator of the future by reducing job overlap between buildings and systems engineering, and our operations roles. We're realizing savings from these actions while the 63 major projects are underway. Additionally, we're also deploying operations technology, which Bala will discuss in a few minutes. By the end of 2028, we anticipate Network of the Future total savings of $3 billion. We'll grow our volume per resource from about 51 in 2023 to about 59 in 2026, and we are well on our way to achieving these goals. And now, before we welcome Bala to the stage to discuss the critical role of technology plays with Network of the Future, let's take a look at this video and some of the new automation and robotics we're deploying. Thank you. Today's customer, their online shipping is increasingly varied, from medicines to flowers, to spoons and patio furniture. At UPS, this means our shipping capabilities should be more adaptable, flexible, and meet our customers when and where they want it delivered. We are doing this by introducing smart digital tools to our physical network. Less physical scanning and more sensing with RFID smart labels for greater visibility and fewer missorts. Looking at the entire network as a system, we're creating digital twins or computer models to simulate various what-if scenarios in our operations. With virtual representations of entire facilities, transportation lanes, individual package flows and sorts, and more, we'll design solutions for customers in real time, accelerating and serving our customers even better. When we add generative AI, we can get to adaptive and innovative solutions even faster. The digital part of our Future Network is the brains behind the brawn. We are creating the Network of the Future now, giving customers what they want, when they want it. The Network of the Future, using tomorrow's technology today. Please welcome Bala Subramanian. Good morning, and thank you for joining us here today and online. As you heard, technology plays a critical role in the execution of our priorities, and I wanna share with you the how. Over the past few years, we focused on modernizing our technology stack because we know it serves a strong foundation to accelerate our strategic differentiators. We invested in strengthening and securing our technology infrastructure, intentionally expanding our cloud presence. Our approach has been cloud first, fit with purpose, and host with intent. This has been a force multiplier and has helped us scale new technologies, technologies such as machine learning, AI, and generative AI. Typically, these require high compute and storage needs. Next, we've architected our systems to leverage our enterprise API solutions, our services. Think of our systems, they will work as Lego blocks, so we can easily readjust to enable new capabilities at a much faster pace. Many of our enterprise capabilities that support our frontline operations were built to suit specific functional and business unit needs. We recognize that this affected our go-to-market speed and our ability to deliver the power of one UPS to our customers. So we made some transformational changes in areas such as finance and HR. For example, we launched a new schedule to pay system, which improved productivity and employee experience. In HR, we are migrating hourly hiring from a legacy platform to modern, high-volume recruiting platform, and this has brought us savings and a high degree of efficiency during our peak hiring period. In addition to continuing to digitize our operations technology, we're also modernizing our commercial and customer touchpoint. As examples, you heard Kate talk about Next Gen Brokerage and Matt talk about Deal Manager, and we are seeing good benefits with our efforts. Our run grow mix, which is measure of how much spending goes towards running our systems versus growing our business, is continuing to improve. Across the industry, the cost of enterprise software has gone up by 20%. Over the same period, our costs are trending down 3% due to the actions we've taken. Now, this is helping us enable us to be more focused on our strategic initiatives to transform our business, and there are four strategic bets we are placing. They are, 1, AI and generative AI. 2, robotics and automation. 3, Smart Package and Smart Facility. And 4, digital twins of our physical network. And we will discuss each of these in more detail in a few minutes. We are in the first phase of redesigning our network. As Nando mentioned, we asked ourselves: What would our network look like if we were building it from scratch today? And let me paint this picture from a technology perspective. As you heard, we are designing our operations to be near real-time, scalable, and flexible, and this means our network has to either expand or contract as needed. The future we are building today is to expand from component level optimization. By component, I mean, think about airlines, last mile facility, these are components in the network, to a network level optimization. And this is where we're using digital twins to simulate our network and optimize our operations. And let me make this real for you. By looking at the entire network instead of the components, we are now able to marry up packages that are destined for a specific address, a street, and even the same neighborhood, so we can create delivery density. This is possible because we already have an integrated network. What we are driving right now is adaptability and differentiation, and we will flex our network based on the products that Matt talked about, the service levels we have actually committed to our customers, the type of packages, and the customer and carrier needs. Whether it's medicines or mufflers, whether it's letters or ladders, whether it's retail or healthcare businesses, our network can adapt. We're excited because not only are we redefining how logistics is done, we're also creating capabilities we need to become a logistics orchestrator. Now, let's move to robotics and automation. We used to build bespoke buildings and facilities based on manual methods, and now our facilities are built using information about the package flows we derive from our Digital Twin technology, driving speed, repeatability, and uniformity. Additionally, we are using a combination of automation and robotics to drive productivity and efficiency in our network. For example, we have robotic arms to convert existing manual small pack parcel introduction to an automated solution. You will see it here today at Worldport. We're also having technology deployed at our baggage, bagging positions that allows us to fill, seal, and label our small package consolidation containers. As Nando mentioned, our focus is to look at end-to-end automation within the facility. In addition to automating our operations, we are also automating the functions that manage our operations. For example, we are now automating our dispatch tasks. With a combination of both physical and digital automation, we are driving about 30%-35% greater efficiency in pieces per hour. Now, let me talk to you about how we are moving from a scanning-based logistic network to a sensing-based logistics network. This can allow us to have true end-to-end visibility, forecast with, predict with accuracy, and really orchestrate for our customers. You've heard about Smart Package, Smart Facility, and our RFID solution. I'm excited to share the progress. Phase one, as you've heard Carol talk about before, has been implemented across the United States, with a focus on preload operations to reduce misloads. Phase two implementation is currently underway, where we are introducing RFID read and sense capabilities within the package cars, and hopefully you saw it in the demo today, and that improves our on-road visibility. We've also started testing phase 3 and phase 4, which will drive the technology further upstream, closer to our customers, and this will help us enhance visibility throughout the entire package life cycle. Looking ahead, I wanna close by talking about how we are unlocking additional value for our customers with the use of data and digital technologies. Speaking of data, we have over 20 PB of data that we use every day to operate our network. In addition, our operations network emits about 1 billion data signals every single day. Let me give you one example of how we're using the richness of our data to solve customer challenges. I think all of you are really aware about residential package theft. It's a growing problem. With our new Delivery Defense solution, UPS now offers the first of its kind technology. We are using data and AI to help shippers make smarter and safer decisions even before they actually print the label. AI helps create simple, actionable scores that identify 2% of addresses that drive more than 30% of shipping losses. We will be using unique data that only UPS can aggregate to, for our customers to help unlock value. We're excited about the digital future and the new services UPS is already beginning to pioneer. With that, let's close with an example of how we are harnessing the power of our data to solve a real challenge for one of our customers. Now, let's take a look. Tarek Saab is president of Texas Precious Metals, and that's what he ships, gold and silver. This is a tube of gold from the Austrian Mint. This is a 1-ounce silver bar, a 10-ounce silver bar, and a 100-ounce silver bar. This year, he's using a new UPS data program called Delivery Defense. What does Delivery Defense do for your company? Delivery Defense helps us identify addresses that are likely targets for porch piracy. So how does this work? At UPS World Headquarters, we got a look at how it works. That's really where you start. By simply entering a recipient's address, the AI-powered program produces a score. For this particular address, we've got a score of 929. A high score indicates a high likelihood of a successful delivery, based on years of data from previous deliveries, including lost and stolen packages. For addresses with a low confidence score, the merchant can reroute the item, with the customer's okay, to a UPS Store or other pickup location. Have a great day! Thank you. UPS Capital President, Mark Robinson. About 2% of the addresses would be considered low confidence, and we're seeing that that represents about 30% of the losses our customers are having. At Texas Precious Metals, they believe technology can reduce those numbers. We recognize it's computers versus criminals, and we have to use every tech capability that we have to try to circumvent any challenges that we might run into. We will now take a short break. Our program will resume at 10:50 A.M. Thank you. It's the innovation, the discoveries, the breakthroughs that are the promise of hope for so many. At UPS, we're delivering on that promise. UPS Premier is a game-changing shipping solution that delivers your most critical shipments when it matters most. Driven by next-generation sensor technology and enabled by UPS's smart network infrastructure, UPS Premier creates a priority lane through the UPS network, with enhanced 24/7 monitoring, control, and recovery, so your package is first in and first out. When time is what matters, when reliability saves lives, UPS Premier delivers hope. At UPS, we're not just imagining the future, we're building it, a transportation network of the future that revolutionizes how packages move from A to B, and every unique step in between. It starts by making every package smarter, which is key to making shipments faster, greener, and more productive. Okay, you're probably thinking, "A package, smarter?" It's true! We're using next-generation intelligent sensing technologies to make our packages and facilities even smarter. We call it SPSF: Smart Package, Smart Facility. It all starts with RFID labels. With those labels, packages become smart packages. Think of them as packages with brains. Here's how it works: First, you'll print your shipping labels with embedded RFID tags. At pickup, your smart package is automatically sensed by an RFID reader in the UPS vehicle. From the start, RFID will give enhanced visibility of accurate delivery information, all in real time. As your packages enter the UPS smart facility, RFID labels are picked up by next-gen sensors. This provides continuous tracking information and pinpoints the location of every smart package within three feet! If a smart package is misplaced or missorted, our network immediately sends out an alert, so it can be course-corrected quickly. With less missorts, your shipments move even faster, and this technology extends to our smart vehicles. Out for delivery, drivers now can quickly locate the right package at the right time. This gives you and your customers real-time information and when to expect deliveries. What's more, with fewer misplaced packages, SPSF makes deliveries more efficient, and that creates improved sustainability, because the greenest mile is the one never driven. UPS's smart technology supercharges the customer experience, making shipments smarter, with pinpoint package locating at every step, within three feet, faster, because automated sensing fixes bottlenecks before they happen, and greener. RFID quickly locates the right package at the right time with the right address. This means more productivity for you, less calls, emails, texts, and claims. Smart packages, smart facilities, smart vehicles: This is the network of the future. We're using tomorrow's technology today. Let's get started. We like it when a plan comes together, where complicated becomes simple, where people and tech work together to move thousands of products. We call that great service, and you'll find it at UPS Velocity, one of our largest, most high-tech facilities, where we move over 350,000 units through 900,000 sq ft of space every day, and people work with 700 bots using AI to speed processing. It's a game changer designed to deliver packages faster, easier, and right on time. Now, that's service you can trust, and that's just plain awesome! As the saying goes, good things come in threes. While that's true, at UPS, bolder things come in threes. We're all about pushing boundaries, and that's why we are bringing together three industry-leading players: Roadie, Happy Returns, and The UPS Store, unlocking speed, scale, and synergies. This logistics trifecta combines the physical and digital worlds and opens the doors to exponential growth, making our customers and UPS unstoppable. Today, we have The UPS Store, a one-stop shop for businesses that gives them everything they need to move faster and with more flexibility than ever. We have Roadie delivering same-day and local next-day shipments of just about anything in the U.S. And with Happy Returns, we offer a returns experience that is box-free, label-free, and consolidated. Together, we can offer new products, services, and capabilities from end to end. Imagine this: an at-home pickup service from Roadie that gets dropped off to a returns bar at The UPS Store, then enters the Happy Returns reverse logistics operation, getting back to the customer in a single movement, and that's just one solution. With the UPS On Demand Network, we have you covered. The possibilities for growth and innovation are endless. And yes, threes are better and bolder. Any size, anywhere, anytime. Please welcome Brian Newman. Okay. Welcome back, everyone. Just give people a minute to take their seats. So happy you've joined us today here in Louisville, and online. We're pleased to have this opportunity to update you on our strategy and financial outlook. In my comments, I'll focus on two key areas. First, I'll detail our three-year plan, our financial targets, including the assumptions behind them. Second, I'll review our capital allocation priorities for the next three years. And then following my presentation, we'll open it up for Q&A. We've covered a lot of ground today. You've heard how we plan to make bold moves to become the premium small package provider and the premium logistics provider. On the efficiency side, we're taking actions to cut costs through Network of the Future by further automating our facilities and bringing robotics into our small package operations in a big way. This will enable us to reduce our reliance on labor and drive the productivity flywheel, which should translate into about $3 billion in savings over 5 years, with about half of that by 2026. That's in addition to the 12,000 management positions we are reducing in 2024 under Fit to Serve. Now, moving to our outlook. Let's start by taking a look at the guidance for 2024. In January, we provided our 2024 consolidated revenue and operating margin targets, and we are confirming that guidance today. We still expect negative growth in total average daily volume and revenue in the first half of this year, and we expect growth to be positive in the back half of the year. We still expect first half 2024 consolidated operating profit to be down around 20%-30% and then rebound to be up 20%-30% in the second half of the year. This dynamic is due to us lapping lighter volume comps, and we will anniversary the first year of the Teamster contract on August 1. So the wage growth rate will let up considerably starting in the back half of 2024. Carol described this as a 1+2 Plan, where in year one, we are returning to growth and focused on volume, revenue, and profit dollar growth. And in years two and three, we'll focus on volume, revenue, and operating margin growth. Following this path, we expect to achieve our objectives of strong top-line growth with margin expansion across all three segments. So where are we forecasting to be in 2026? Based on the current macro outlook and our initiatives, on a consolidated basis, we aim to grow revenue to be between $108 billion and $114 billion by 2026. I would just note that this includes Coyote, even though we continue to explore strategic alternatives for this business. Looking at the segments, healthcare is a key driver across all parts of our business. In the U.S., we expect revenue to grow by roughly $10 billion, which includes about half coming from volume growth and half driven by an increase in revenue per piece. We anticipate revenue in the U.S. reaching about $70 billion in 2026. We're focused on growing SMB, B2B, and select enterprise volume, and leveraging Architecture of Tomorrow to drive revenue quality. If we look at international, by 2026, we expect revenue to grow by roughly $2.3 billion and to reach about $20 billion. Here, we plan to grow by focusing on the premium parts of the market. This includes growing with SMBs through DAP and leveraging our Next Gen Brokerage capabilities, and by capitalizing on our Asia diversification initiative and nearshoring. And in SCS, we expect revenue to grow by about $4.6 billion in 2026, reaching around $18 billion. In addition to healthcare, we will focus on orchestration, logistics, and expanding our addressable markets through digital solutions. And with our on-demand network that Nando talked about, we plan to nearly triple our UPS digital revenue. That takes us to $108 billion in consolidated revenue by 2026. Additionally, we're actively pursuing inorganic opportunities, specifically in healthcare and international. Based on our pipeline, we believe we have up to $6 billion of potential inorganic revenue opportunities, which would take us to $114 billion in 2026. If we move over to operating profit, organically, by 2026, we aim to grow consolidated operating profit by around $4.4 billion and expand our consolidated operating margin to more than 13%, which is over a 210 basis point increase compared to 2023. Looking at the segments, in the U.S., we expect to grow revenue per piece at a faster rate than cost per piece and expand our domestic margin, or just domestic operating margin, to at least 12% in 2026. In international, we expect to generate an operating margin of between 18% and 19% in 2026. And then in SCS, by 2026, we expect to generate an operating margin around 12%, driven by growth in healthcare. And we expect to grow profit even more when we factor in potential inorganic opportunities in both healthcare and international. From an expense standpoint, we're pulling expense out of our business. Looking at this graph, Fit to Serve will take out $1.3 billion in costs, and Network of the Future will eliminate approximately $1.5 billion in costs by 2026. Together, these initiatives are expected to offset a majority of the wage and other growth impact. Controlling expense, plus growth and revenue quality efforts, drives $4.4 billion in operating profit growth. Now let's turn to capital investments. We will continue to make the best long-term decisions to deliver on our declarations. We plan to invest about 5.5% of revenue in CapEx to drive growth and efficiency and are accelerating investments in key focus areas. Between 2024 and 2026, total capital expenditures are expected to be between $17 billion and $18 billion. Looking at our most critical investments, over the next three years, we expect to invest approximately $6 billion on Network of the Future, which includes buildings, building consolidation projects, automation, and robotics. We expect $1.4 billion in cost savings from this investment. In terms of growth, we expect to invest about $2 billion in IT to support growth initiatives. We plan to invest $1 billion to expand our healthcare logistics global footprint and enhance technology to support the needs of complex healthcare. In support of our Asia diversification initiative and nearshoring for international and supply chain solutions, we expect to invest $500 million. The remainder will be allocated to maintenance as well as vehicle and aircraft purchases. Lastly, we expect that this level of CapEx will support the investments needed to reach our environmental sustainability targets. If you think about this from a return on capital perspective, if you were to capitalize the lifetime value of a UPS employee in our operations, the cost would be approximately $775,000 per employee. So if you think about our $17 billion-$18 billion CapEx spend over this period, we could offset that, offset that investment by reducing our workforce by around 22,000 resources using that math. In total, we expect these investments to drive an increase in Adjusted ROIC by 500-600 basis points by 2026. Moving over to cash, we expect to continue to generate strong cash from operations, and from 2024 to 2026, we project cumulative free cash flow will be between $17 billion and $18 billion. We want to maintain strong liquidity, not just to run the business and weather any macro shocks, but also to remain opportunistic on inorganic growth. Between cash and our commercial paper program, we want to always have around $4 billion-$5 billion of liquidity. As we execute our strategy, we will adhere to our capital allocation policy, which balances running the business and investing in long-term growth with returning cash to shareowners. After investing in our business, our second priority is our commitment to a stable and growing dividend, which is one of our core principles that Carol discussed earlier. Our targeted dividend payout ratio is approximately 50% of prior year adjusted earnings per share. We're higher than that today, but expect to earn back into the 50% area. Third in our capital allocation priorities is a strong balance sheet. Here, we will maintain a target capital structure, including approximately 2.5 times debt to EBITDA. This is commensurate with our targeted strong investment-grade credit ratings. We plan to actively use our balance sheet and lean in where appropriate, but also repay debt when leverage exceeds our target. After satisfying all of our core priorities, we will return cash, excess cash to shareowners via share repurchases. Our current 3-year plan does not assume a fixed amount of share repurchases, but as we move forward, we will provide updates on our plans based on our level of liquidity, investment, and overall cash position. Over the past 3 years, 3-plus years, we've fundamentally improved nearly every aspect of our business, and we're just getting started. The growth and productivity initiatives we are executing will result in higher revenue, expanded operating margins, and increased free cash flow to deliver long-term value to our shareowners. I want to thank you for your investment and your interest in UPS, and now we'll move over to the question and answer portion of the conference. We'll just take a moment to get the stage set up as the other presenters join me. If you have a question in the crowd here, please raise your hand and we'll bring a microphone to you. For those of you joining us online, you may submit a question using the box on your screen labeled "Submit a Question." I invite the rest of the presenters up to the stage. Okay, so, I'm gonna ask my colleagues, Michael and Karen, if they'll be ready with the microphones. If you have a question, please raise your hand and they will come to you. While we're finding the first question, we've also fielded questions online, so the first question will be from our online community, and this question is for Carol. Carol, you noted that there's excess capacity in the market of 12 million average daily volume, 6 million sitting with the Post Office. How long will this last? What forces will change this? Well, PJ, some of you may be wondering, why in the heck did we show that chart? There were a few reasons why we showed the chart. First of all, as you know, we had volume loss due to our labor negotiation last year, and the reason why is there was excess capacity in the market. So more volume diverted than we had anticipated because there was excess capacity. The good news is that we've recovered 60% of the volume that was lost during the labor negotiation. But we do sit with excess capacity today, but it's important to note that you always want to have some excess capacity. We say equilibrium is about 6 million pieces a day, and that really rests with the Post Office. So if you think about, well, what's remaining, what's remaining is capacity that's gonna be absorbed as the market returns to growth, as well as capacity that is re-removed from the market, well, given the actions that we're taking with Network of the Future. So this is not at all meant to suggest that there is a pricing war that's going to materialize as a result of the excess capacity, or that the revenue quality won't be good, because as you saw from our initiatives, we expect our revenue per piece in the United States to grow about 2.5%, faster than our cost per piece. And clearly, with healthcare, as Kate declared, that's high revenue quality, with the margin on healthcare revenue being in the high teens. And $10 billion across all three segments is pretty good revenue quality. Michael, we have our first question. Great. Yeah, thanks for hosting us and for all the great information. Wanted to get, I'll give you two questions. So one, just on the margin targets, how sensitive are those to volume growth? So if your domestic grows, you know, 1% instead of 3% volume, can you still hit the margin target, the 12%? And then on the SMB share of volume moving from 30 to 40, you've had good traction the last couple of years moving it up, but it seems like that's a pretty big step to 10 percentage points. So how do we get more confidence, and how much visibility do you have in that step up with SMB? Well, Brian, why don't you take the margin question, and then, Matt, you take the SMB question. So from a margin perspective, Tom, thanks for the question. There's a much heavier reliance on the RPP in terms of flow through to profit. If you're thinking about margin in dollars, it's more 2/3 RPP, 1/3 volume, so there's a much heavier reliance on the pricing. Yeah, just from an SMB perspective is, look, we've, we've showed some great progress over since '21, since our last conference. Our Digital Access Program is a, has been a success story for us as well, and we, we believe there's continued, continued opportunity to really grow and take share. The way to think about it is, you know, it's historically has been challenges- challenging for us to meet those customers where they are. Because they're the micro and small, there's just millions of them. And if you listen to my opening remarks, we've got 5 million now on platform, and we're adding 25,000 every week, so we feel confident that we can get to that 40% number. And if I could just add a little bit more color to that, if you remember the chart that Matt shared with you, by 2026, SMBs make up about 30% of the opportunity. So our 40% aspiration actually goes longer than 2026, but by 2026, we should be at 35%. Yes, 35. Okay, thank you. We've lost our microphone. Here comes Michael. Well, while we're waiting to find the next question, so we have another online question. This looks like it is for Matt and Nando. How are you supporting RPP growth, given its significance to your financial plan? Let me start. So, first off, when we think about revenue quality and growing RPP, it's really comes down to three, multitude of factors, but three. One is pricing and how we our pricing discipline in the market. Second is our customer segments, where we focus on winning SMB and healthcare. And then the third piece is our products as well. So you heard us talk a lot about this commercial, how we're leaning in to B2B, currently the value share leader in this space. We will continually continue to focus on this area. One, it brings great characteristics to our business. It's strong revenue quality. We get the great pickup and delivery density on both ends, so it's very, very important for our business. Before I turn it over to Nando, I will tell you just on the pricing piece, which I think is important, as we set into 2024, look, we always price to the value that we serve the customers. 2024, our GRI. We announced the 5.9% GRI. We see a favorable keep rate onto that as well. And as we continue to move forward, we see the pricing environment as being rational. So Matt pretty much covered most of it. I will cover, though, what we're doing with our sales force, which is, you know, we really reimagined how they go to market, from training to how they position solutions in front of our customers, and make sure that we can extract the value of really good quality packages with great characteristics that help our bottom line. So, we've spent a lot of time there. In fact, a lot of our salespeople were working on administrative work 30%-35% of the time. We've cleared the deck, and also created conversion sellers to go out and win those highly profitable customers for us with the right characteristics that we spoke about earlier. If I could crystallize healthcare and what it means to the U.S. market, we- you saw the $82 billion in complex opportunity. 45% of that is in the U.S., and half of that is U.S. SMBs. And you see, and you've gone through the breakout that we had, this ability to earn that specialized space. That also fuels the revenue mix, which helps RPP. Thanks. It's Scott from Wolfe. So you've talked about low single-digit growth in the market this year. What changes the next two years to get that step up? How does Amazon impact your view of revenue growth? And then, Brian, just, are you still talking about sub 9% U.S. margins this year? So I just wanna think about the bridge from sub 9% in 2024 to 12% in 2026. Is it linear, that 300 basis points plus, more 2025, more 2026? Any thoughts? Well, let me start with our point of view on Amazon, then I'll have Matt talk about market growth projections, and then we'll come back to the U.S. margin. So just from an Amazon perspective, you know, we've been in a relationship with Amazon for nearly two decades, and it's a very good relationship. During COVID, we agreed upon the packages that we would deliver for them and the packages that they would deliver for themselves, because we are not their supply chain, we're just part of their supply chain. And we entered into what we called a glide down relationship. As we think about 2024 and beyond, think of us as reaching equilibrium. There are services that we can provide for them that they really find relevant and important, and packages they're gonna continue to deliver for themselves. From a volume perspective, think of them as equilibrium for the next three years. But talk about then the market growth. Yeah, so to Carol's point, we, we see, we do see Amazon as a, as a strong, you know, strong grower in the market, but from a market opportunity, we see all other as a, as a significant opportunity for us. SMB continues to grow strongly. The first year, to your point, we see, you know, lower single-digit growth, but in the outer years, we've got a lot of optimism in 2025 and 2026, as we see momentum picking back up. I think, too, it's, y ou know, Kate mentioned some of the healthcare opportunities that we have in front of us, but it's not just the SMB. And Brian, you heard in Brian's remarks as well, select enterprise is, there is a lot of other volume growth for us to go get, and we have some optimism in 2025 and 2026. E-commerce sales will continue to grow in the United States. It is true that there was a step back last year due to the anniversarying of the COVID demand, but all retailers are projecting continued growth in e-commerce. Now, on the margin. So Scott, thanks for the question. Yeah, we reaffirmed the guide, so we're still in that 8.5%-9% this year from a U.S. domestic margin perspective. That would imply about 350 basis points step up between 2025 and 2026. You can think of that on a, a very balanced basis. There's no hockey stick here. It's sort of equal parts. If we looked at the last part of the year, what would we exit at, Brian? So this year we're gonna exit Q4 at 10%, so it's, it's really a tale of two cities this year in terms of the first half, that down 20%-30% profit, and the second half, up 20%-30% for the company, Carol. Thanks, Ravi Shanker, Morgan Stanley. Carol, can I just follow up on your Amazon point on equilibrium? Does that mean that the glide down's over, and the volumes are stable going forward? That's what I meant. Okay, got it. And follow-up for, for Kate on the healthcare side. Who do you compete with today? Who are your major competitors? And obviously, you've seen the competitor environment and the parcel space change over time. How do you think the healthcare competitor environment changes in the next two years as well? Thank you. Yeah, and thank you for the question. Healthcare is a space where it is specialized, and then every country actually operates a little bit differently. So we have tens of thousands of specialized healthcare logistics providers that do a piece, but not the whole. So we wrap the world and across the whole supply chain, and you've seen us with our acquisitions of both Bomi, which gave us, by the way, the largest ground fleet of cold chain vehicles. You've had the opportunity to go in and see what we represent with our healthcare logistics within the four walls of cold chain capability, 17 million sq ft worldwide, 10 million of that, by the way, cold chain specific. And then with MNX, you go all the way into that specialized part of the pipeline for next flight out services. You can't, you know, pretend to do healthcare. You have to be specialized. So it is tens of thousands, and we are growing in mass, and customers have seen what we did in the pandemic. We had the halo effect. We wrapped the COVID and still grew because new doors opened of specializability, both Bomi and MNX delivering outside, and beyond their revenue synergy. So we're really excited about this complex space that we're in. Ken Hoexter, you've had your hand up a couple of times. Thanks. Thanks, PJ. Ken Hoexter from BofA. Thanks for having us here, and appreciate all the details. Just wanna follow up on the targets for international. You target 18%-19% margins, so still strong compared to what you were at pre-COVID. Do you see more margin pressure as you switch more to the economy product you were talking about, or additional investments you need to make in some of the Southeast Asian and markets as you see some of that transfer? And then secondly, Nando, as you close facilities, maybe can you talk a little bit about the scale going forward? Are there opportunity-- You're talking about 30-40. What comes after that, maybe over the next model period? Thanks. So I'll start with international. No, we're excited about the best industry margins that we have, the high double-digit teens. We expect that to continue into the future as well. There's plenty of premium opportunity in the market. Again, sometimes those are healthcare companies that are growing around the world into new markets, and we're expanding capability. So we have our investments built in, and we see the ramp up as 2026 unlocks our healthcare Hong Kong expansion that I mentioned, opening up 32% of that China Greater Bay opportunity, and then beyond that to 2028, when we unlock 205 lanes intra-Asia with faster time in transit. So we see this feeding not only the accretive margins in the short term and then well beyond as well. Exciting future. Great. And Ken, to answer your question on what that looks like, well, it's gonna look like 200 less facilities in our network while we grow our company. Clearly, that's gonna provide for us some really great efficiency, but also service for our customers as we really simplify the network and also are able to consolidate a lot more volume into bigger moves and handles. What I would say is we're working as quickly as we possibly can, and we haven't identified all the projects. In fact, the business cases continue to come in, and we continue to take the best business cases and prioritize so we can get to them as quickly as possible. We're moving quicker than we ever have. So what used to take us 36 months to put up a facility or do some work inside of our facilities, we're down to 18 months, and we've also decided that we're buying in bulk, right? We're going all in on this initiative, and also it's cookie-cutter. No more, you know, bespoke UPS facilities that drive a lot of complexity for our operators. So the network's gonna be simpler, faster, and more consolidated as a result of these moves that we're putting in place. Karen, I think you have a question over here. Thanks. Deutsche Bank. I had a question for Carol and then Brian. So, you know, you obviously have very bullish 2026 targets. The market, at least as it speaks today, doesn't seem to believe them, if I could say it that way. And so if we sit here in March of 2027 and look back, what has to go right for you guys to deliver on these bold targets, and what do you think has to go wrong or would go wrong for us to kind of be revising those numbers lower? And I say that in the context of really volume, because volume's been a really difficult moving target for the last couple of years for a lot of reasons that are beyond your control. When we think about that $10 billion of domestic revenue growth, Brian, can you help us bifurcate between RPP and volume? Because RPP's fine, but the CPP at 1% also has volume leverage embedded in it. So it's really important for us to understand that $10 billion bifurcation between volume and price, or RPP, and what your confidence level is in that, so that we're not three years from now coming back and saying, "Hey, we missed our targets on volume." Thank you. So we started. Thank you for the question. We started with a look at what are the projections for the market growth over the next three years, and that was the algorithm for our growth projection. If that goes right, we'll go right. If that market, which is an external market projection, goes wrong, we're gonna have to hustle to get the volume in, which means more share. Doesn't necessarily mean a price war, it just means more share by offering value for the services that we provide. You know, if you think about why we're off the numbers that we gave a year ago for 2023 is the volume didn't come. Excluding Amazon, the package market in the United States dropped by 2.4 million packages a day. That was not the external forecast a year ago. So if the external forecasts are wrong, it's gonna make it harder on the volume. But we'll react to that, just like we did in 2023, by taking costs out of the network. But we're pretty convinced that the volume's gonna return because we're through all of that COVID spike. E-commerce sales will continue to grow, and we should grow along with those, and we serve the largest companies in the country from an e-commerce perspective. The other aspect of our business that we're excited about is on the commercial side. Here we have about over 40% of the market, so we are the industry leader in the commercial side of the business, but there are opportunities for us to go get. And maybe, Nando, you could take just a moment on what those opportunities are, and then maybe, Brian, we'll come back to you, and you kind of can tie it all up. Yeah, sure. First, I just want to remind everybody, I remind myself every day, that it's really important that we're leveraging the amount of resource and hours and matching it to the activity in our business. We've shown that leverage across last couple years, making sure that we can actually accomplish that and keep our costs down, even in a situation where volume may not be to the plan that we had originally designed. On the commercial side, as I said in the presentation, this network is built for that. In fact, if we were just an e-commerce company, we wouldn't need package cars or planes of this size. But in fact, that commercial business that we're going after very aggressively with a lot of value adds for our customers, is to actually help our network make sure we offset the cost of our equipment, but it's highly profitable, and we're really, really good at it. We're the market leader, but nothing to say that we can't refocus and go get those customers that aren't enjoying the UPS network currently. We feel really good about it. Matt and I are attached at the hip on this, and we're committed to going and helping the mix of our business. Last thing I would say, it's right package and the right network. So even though we may see some customers now that are trading down, as long as that SurePost network and the cost associated with it and the characteristics of the package make sense, that's great for our business, and of course, that's for ground and express as well. Amit, as you think about the revenue growth in the U.S., 5% revenue growth over the next three years from a U.S. perspective, very balanced. 3% in the ADV, 2.5 on the RPP. As Nando and Matt have both mentioned, the type of volume we're going after is quality revenue, whether it's SMB, as we drive that up from 30% going north from a mix perspective, the commercial side, very attractive. Both those things help from a mix perspective on the RPP. Our GRI is run between 4.9%-6.9% for over a decade, so you'll have a GRI price point, that will help to drive that. At the end of the day, it's balancing this revenue and the profit margin and that there's a big flow-through on the RPP piece. We remain disciplined on the revenue per piece. Michael, we have our next question. Looks like Jordan? Yeah, hi, Jordan from Goldman Sachs, Jordan Alliger. Can you explain a little bit more? I think, Nando, you had talked a little bit about this volume per resource metric that you're now keyed in on. Is that what you would focus us on in terms of thinking about progression towards that $3 billion in cost takeout? And what could it mean in terms of, you know, like, how critical is the personnel side of it versus, let's say, the volume side? Thanks. Our whole model, Network of the Future, we have an implied growth rate of zero, on purpose. We don't want to overbuild for something that may not come, or there may be some shock to the system, but it is zero base, so we started with zero growth as we built that network out. What I would say on the metric is, we're gonna keep with our traditional metrics, so we've got KPIs for all the core production indices at UPS, pieces per hour in our preloads and our hubs, on road, over allowed, and stops per car. We'll still drive those metrics, but this new metric is all-encompassing. In other words, we won't be suboptimizing one operation at the expense of another. So you actually could run great preload operations with great PPH, but you could hurt the on-road portion of the operation, and therefore, not be any better as an enterprise. So we're looking at everything and making sure it's an all-in number. So in reality, it's 7,500 resources per piece, and our plan is to go from 51 to 59. So that, you just do the math, and you can get a sense of what that means from a human resource element. Next question? Michael, Dave Vernon. Hey, David Vernon from Bernstein. I want to come back to the issue of top-line growth, 'cause it does feel like in the investment community, there has been a lot of discussion now that maybe the legacy parcel business has moved beyond growth, given the availability of external channels, whether it's Amazon building its own network, Target, Walmart kind of moving a little bit in that direction themselves. When you think about the targets you've set out there at $111 billion, that's 8%-9% above sell side. Carol, you mentioned before that you kind of took that off of an external market forecast. Can you give us any sense for what work you've done from the bottoms up to help us understand kind of what the risk is to some of these volume growth estimates? Then, maybe Matt or Brian, you can talk to within the 2.5% RPP guide, how much of that is really a base price increase versus mix, versus what you're assuming about the underlying composition of the business as transits get shorter and you're dealing with the many headwinds that have been there for a while? So, a couple of things from the bottoms up. First, if we ignore the U.S. for a moment, you, you know we're under-penetrated outside the United States. Kate talked about a $50 billion premium market, so it's pretty clear that there's opportunity for growth there. Kate also talked about an $82 billion targeted market for healthcare, so we're way under-penetrated there. So the growth opportunities in, in those two segments is pretty clear. It's just about growing with the market and taking share. If you come back to the United States, from the bottom up, the best intel that we have is talking to our shippers, and we do talk to our shippers. So, Nando, maybe you can just share a few stories that you're hearing from shippers in terms of what their growth forecasts are. Sure. And you mentioned Target and some other retailers. We're solving for them and with them. In other words, if you saw Matt's presentation, you saw that we're rolling out hyperlocal service. So not only are we listening intently, we don't see a need for retailers to actually go out and create their own solutions. In fact, if you look at what I put on the slide earlier, a one-stop shop, there really is no need. We can deliver hyperlocal. With Roadie, we can deliver same-day or oversized packages. And we've got a whole host of UPS stores that are out there providing service and access for our customers and, of course, great returns solutions. So when we talk to their retailers, we're creating those solutions together, actually, and they're having a positive impact, and we see that we can press those levers and grow across many, many retailers across the country. Matt, would you add some more? Yeah, just to add a little bit of context, too, to what Nando said, too, as we simplify our product portfolio, we are, as we listen to the customers, it is a big push for us to think about this in a new way, and we're reimagining our products. You know, Nando mentioned Roadie and what we're able to do with our now big and bulky. It's still early days, but just to give you some context, it's a $60 billion U.S. market. Highly fragmented, where these are big and bulky items that are non-compatible with our network today, and it gives us an opportunity to grow very, very high revenue quality, but also very high profit quality. And it's, like I said, it's early days, but we've been. Just to give you a few numbers to think about, too, is since we've started Roadie XL, we've delivered 1.5 million packages that are these large, big, think about a mini fridge going to your house or a big and bulky item, which continues to drive good revenue quality for us in the U.S.. We have another question over here. Jeff, you've been eager to ask. Thanks for coming over to this side. Jeff Kauffman from Vertical Research Partners. I want to actually focus on David's second question a little bit here. I mean, a big piece of this is RPP- Yeah -exceeding CPP. You go out every year with a 4.9%-6.9% GRI. Can you help us understand how that GRI comes down to a 2.5% growth rate on the RPP? I think, as David was alluding, are there mixed assumptions in here? I don't think it's fuel price over a three-year period. Just kind of help us understand how that boils down to that RPP assumption. Who wants to take that call? I'll start, Dave. So listen, the keep rate on the GRI has been running last year about 60%, this year about 50% is the expectation. So you can take that 5.9 and have a keep rate of about 5%, 50%, excuse me, to that. We have assumptions on mix, both product and customer. You've had some trading down from air to ground going on, which applies some headwinds. We have SMB growth, which is a bit of a tailwind, and then you have products like SurePost that are very attractive from a margin perspective, but lower RPP, lower CPP. So all of that is embedded into the guide of 2.5% in the U.S. over the next three years, and that's how we kind of came up with the model. Next question, Karen? Hi, Brandon Oglenski from Barclays. Brian, a quick clarification and then maybe one on CapEx. The $3 billion in savings through 2028, I believe, is that also exclusive of the Fit to Serve $1 billion in savings? And then on CapEx, it looks like for the next two years, you're going to step up from about $4.5 billion in investment this year to about $6.5 billion on average. Is that correct? So that would imply maybe spending a little bit higher relative to your revenue range compared to recently. So the $3 billion, your first question, Brandon, on the Network of the Future, we're getting about half of that from Network of the Future in the 2024 to 2026 envelope. The next $1.5 billion comes in the next two years, 2027 and 2028. So that's how you can think about the flow-through. As far as CapEx, there is a step up. We're looking at this as a three-year envelope, so over the three years, it's a 5.5%. But think of Network of the Future in multiple phases. Phase One is coming in here in the first piece, so there's a little bit of a ramp-up curve, but we're certainly very happy with the returns we're getting. I gave you a little bit of math there on, as you think about returns, the lifetime value of an employee in the operations is about $750,000. If you, if you think about what does it take to get a return on that, we're, we're growing ROIC by 500-600 basis points, it would, it would imply about 22,000-23,000 people to pay for the CapEx envelope of $17 billion-$18 billion. And maybe just a couple of other comments. The savings from Network of the Future are separate from the savings of Fit to Serve. Yeah. You need to add those two together, and adding those two together offsets the majority of the wage and other costs that we have built into our plan. That's great. Yeah. Yep. Over here. Bascome Majors, Susquehanna. Carol, you're almost at your four-year anniversary in the CEO seat here. In three years, you'll be through the plan that you laid out today. In four years and change, you'll be approaching the next Teamsters negotiation. Can you talk a little bit about the board's succession planning and what it's really important for you to see out in this seat, you know, if it's up to you? Thank you. Thanks for the question. There were a number of reasons that I left retirement to come into UPS, and one of those reasons is I love to develop people, and I have a very good track record of that, actually. There are 16 CFOs who worked for me, who are now CFOs of publicly traded companies, and there are about 6 people who worked for me who are now CEOs of publicly traded companies. I came into the company because I wanted to develop talent. We got a whole lot of talent to develop. Because I know how difficult it can be for a company to go outside when it's time for CEO succession. Sometimes it works, and sometimes it doesn't. I am laser-focused on building this team and the team below them. It's really, really important to me, and what I've told the board is, "I'm here. You know, I serve at their will, but I'm here as long as it takes to get a CEO succession candidate or candidates ready, and then it will be time for me to move on so that person can lead this great company." And so we have a very, very formal process with our board on CEO succession. In fact, we work with a third party. We've created what we call a CEO scorecard of the future, the skills and attributes necessary for the next CEO, because the world is very dynamic, and the world is changing. So we match those skills and attributes against the leaders and put together development plans and have a review with the board twice a year, but a really deep review with the board every fall. You know, I'm incredibly blessed. I know some of you may look at my gray hair and my age and the proxy, which is doggone old, but I'm incredibly blessed that I have a lot of energy and I wouldn't be here with this amazing team, laying out these targets with you, if I personally weren't committed in seeing them through. And just on that, you know, I've had in some conversations with some of you like, "Gee, Carol, you know, we heard when you came to UPS, you had a track record of never missing a number, and you're off to a pretty good start, and you hit your targets a year earlier than you thought, and then you gave a lot of it away in 2023. You know, how do you feel about that?" Well, let me tell you how I feel about it. You know, It wasn't always that way at Home Depot. I had a good track record there, but I was also the CFO at Home Depot during the financial crisis and the housing crisis, and in one year at Home Depot, we lost 25% of our revenue in one year. We had to close stores, we had to exit a business, and we had to take 10% out of our off-, our officer group. 2023 felt a lot like the housing crisis for me back at Home Depot. It was the perfect storm. And then we came out of that perfect storm at Home Depot, and we set an operating margin target. At that point, the company was at 6%. We set an operating margin target at 9%, and the investing community laughed me off the stage. They said, "You will never hit it. You will never make it.". Well, I'm here to say, with this team, we are committed to doing everything we in our power, with the remaining 500,000 UPSers, to deliver the targets that we set here. May we get there a different way? Stuff happens. There are bumps in the night, but we are committed to the targets that we set out. Karen, we have a question on this side of the room. No? We've got Michael over here. Brian. Thanks very much. Brian Ossenbeck from J.P. Morgan. So, we've talked about synthetic density, improving stop density. You know, over the years, it's obviously pretty difficult to do, but I thought maybe Bala had said that there's a chance you have some improvements on delivery density with technology in matching. So just wanted to go back to that and see how much you're expecting, you know, in the next couple of years. And then maybe a second for Matt, and probably Carol, like, how can you avoid at least the perception that there'll be pricing competition? Maybe not a full-out war, but the excess capacity. Because I think if you look at where volume growth is coming from, it is lighter weight, shorter zones, maybe that goes back into the U.S.PS, so that capacity doesn't necessarily all go away. They have a Ground Advantage product that shippers seem to like. So maybe you can frame up that, especially in the context of having, you know, Project Brown actually going out and trying to regain some of the market share that you had lost. So thank you. Yeah, maybe I'll start, and then Matt, I'll hand it to you. So if you think about density, we, we have two things, right? One is we can have what's called upstream density. That's one of the work we had done, and then something within the network, what we can do now. The upstream density, we've tried it, it's something we looked at, but it's not--it's, it requires a lot more parameters that we don't control. So within the network, we do control how we can manage density. And as you think about it, what Nando said, we have about 40 million packages within the environment right now. With us connecting the network, as I talked about, rather than just individual components, we can start to see with our digital twin, where the product is, where the package is, so we can start to connect them very close to what our delivery needs to be, and that's one we feel pretty confident about. So we will be able to start looking at trials and then start moving forward, but we are pretty confident that we'll be able to find a solution for that. It's really running the network as a system. Yeah. We have something we call synchronized delivery solutions- Yes -that is allowing us downstream to actually match all the packages coming from the air, feeder- Right - package, so on. We are providing variants on that, too. Depending on the customer- Yeah -we can create the synchronization. We can do it based on the type of packages we have. So there are a lot of variables that we are working on right now, but we feel pretty optimistic about it. There's a big value unlock, as we've talked to you about. Mm-hmm. We haven't put that value unlock into these projections. So as you can appreciate, as we put our projections together, we also put some hedge aside of things that we are planning to work on that will come in and give us some hedge. Yeah. I, I've got two more other tools I think that you'd be interested in. One is, SurePost proximity. Yeah. So today, when we take a SurePost package, we absolutely match the address to the delivery address that it's going to, so the driver's delivering more than one package to that location. We're enhancing SurePost to include the next door neighbor, or the house across the street, or the office on the next floor, where it may not match exactly, but it's in proximity to the driver, and our financial equation says, "That's good. Put that into the UPS network, and make sure that one driver delivers multiple pieces to a location." And then I mentioned 26 weekend sorts on a Sunday. That's intended to balance the demand across the week, and therefore lowering the overall need for drivers on road because our peak day is actually Wednesday, and the more we can de-peak the week and spread that volume across the days, the better off we'll be economically. Yeah. Matt, you run pricing, so talk about pricing. Yeah. So, first off, I think when you think about our value prop, you mentioned some of the competitive landscape and what goes on there is, we're very disciplined in our pricing. I think it is. It's important to know that we continue to lead with the integrated network, as well as reliability. Reliability matters. It really matters to these small and micro customers. But from specifically a pricing perspective, you know, I talked about in some of my remarks as well on our new ability to price and price to capacity, so it allows us so much more agility and adaptability to be able to flex our pricing, and we're doing this on our Digital Access Program. You heard me talk about, and Nando highlighted what we're doing with the sales team, but also being able to turn these pricing bids around very, very quickly to win and win faster. So we're—we continue to listen to the voice of our customers, but also, as we manage through this, we wanna maintain this discipline, and we think with the value prop that we have, we're positioned to win and win in this space. You also highlighted something on, you know, shorter zone, lighter weight. Yes, we created, and Nando mentioned this, this hyperlocal product, so we can really start to win in this space. And think about this as pricing, because it's less handles on us to the capacity. So you can run it through one of our night sorts, and it can be delivered. It's not connecting to another building, so it gives us a lot of opportunity to, again, align price to the, to the cost. However, we are also seeing when these customers need a hyperlocal option, they also need the integrated network, because when you look at transit times, they, you know, they're just not going from Louisville to Louisville or from, you know, short zone, but they're also going Louisville to Atlanta or Louisville to California. So we believe that one value prop, One UPS approach is what's positioning us to win. Hi. Thank you. Stephanie Moore with Jefferies. You know, I think the bottoms-up approach you guys laid out very clear today and your ability to drive share, I think that's pretty evident with your plans going forward. But maybe on the top-down and the macro view, I mean, you provided a slide early in the presentation in terms of, you know, your total volume projections, you know, 2019 to 2023, and then the delta of the actual performance. So what gives you confidence that the next three-year target for the market will prove accurate? And more importantly, shouldn't the market target actually be that, call it, 2.6% non-Amazon TAM that you called out? So really, you're talking about growing and taking share off of that 2.6% TAM. Thanks. We certainly agree with you that that's the, the addressable market that we should look at, and that was the basis for the algorithm that we used. There's a little bit of share in the volume projections, share growth in the volume projections, but not much. Not much. So that's the basis for the volume growth. It's based on the market. And what gives us confidence? Well, if you think about what happened last year that we don't think will happen over the next three years, first of all, inflation, high inflation, took a huge bite out of consumer spending. More spending going on food than small package. Inflation has come from 6% to now 3%, so that's encouraging. And based on what the Fed has signaled, you know, they're on their path to reach a 2% inflation. That's their goal. So we don't expect that to happen over the next three years. We're also through the COVID noise, where when people were sheltering in place, they were buying all these goods, and then when they started to return back to office, they shifted their savings from goods to services. That should normalize as well. So as we're talking to our customers, they're projecting their e-commerce sales to start to grow again, as you would expect. Question here. Hi, everyone, Conor Cunningham from Melius Research. Just on the inorganic growth target that you have out there, the $6 billion, can you just talk about what we're looking at here? You've done a couple tuck-in acquisitions, you know, through the years or, or recently, I should say. And then maybe the margin profile because the basic math on just the bridge is, like, a 10% margin. My guess is that you're probably targeting teens or, or something like that. And then last one, sorry. If you could just level set on Coyote, what it was in 2023, so we can understand the moving parts on, on the, on the 2026, revenue. Thank you. Yeah. So our forwarding business dropped by about $3 billion last year, and Coyote contributed a third of that drop. So we bought Coyote in 2015. The revenue then was $2.1 billion. We're about $2.1 billion. So you can see just it's, it's an incredibly cyclical business, and the variability just kind of gives us heartburn. So we are exploring strategic alternatives. It doesn't necessarily mean a sale, because I know there's some concern like, "Gosh, are you selling at the downturn of a market?" That's not what we're talking about necessarily. What we're looking are alternatives. So once we determine what those alternatives are, we'll come back at you. And on the M&A front, Brian? I wouldn't expect a mega acquisition. No. We put $6 billion in the pipeline. I think our track record has been several smaller pieces. Kate's got one of the biggest healthcare businesses out there, at $10 billion. There's not one $6 billion company we can go get right now. So I would expect smaller on the healthcare front, and then we're looking at targeted areas internationally, as we talked about. From a margin perspective, the revenue obviously jumps up. It's about similar margin from a total consolidated perspective, with and without the acquisitions. I'd like to bring to light what a smaller acquisition could mean and how it means big impact. I talked about the pipeline of healthcare. It's changing so that the majority of research and development right now for healthcare companies is actually in the clinical, is actually cold chain specific. So when we bought Bomi, we had our view on the revenue synergies. It's bigger now. When we bought MNX, we actually are making those revenue synergies, and then we looked at the radiopharma capability. It's a $3.6 billion market. Radiopharma, that's the most sensitive of radio or of pharmaceuticals, and now we have even more revenue synergy. So even though it's a string of pearls, inorganic strategy, it then unlocks because we have this total global integrated network that you can get more and more for these healthcare customers and, and earn the right to win in some of these most specialized, highly accretive pieces of the market, with billions of dollars of opportunity. We have one more question, time for one more question. We've gotten this a few times online, so we'll, we'll ask it. This question's for Brian. Brian, can you please elaborate on quarterly cadence and for earnings for 2024? Well, I think we started to address it earlier. The year is playing out as we thought it would. So from a quarterly cadence perspective, we're calling for low single-digit ADV growth. From a profit perspective, the first half of the year and the back half of the year are gonna sort of mirror each other, the first half being down 20%-30% on the profit side, the second half of the year being up 20%-30%. From a quarterly basis, Carol mentioned the most important thing, which is building the trajectory and momentum to exit the year domestically in the fourth quarter at 10% from a margin perspective, and we've said consistently that the first quarter would be the toughest quarter of the year. Probably two pieces to consider there. One, we don't have the benefit of the Fit to Serve program yet, because that's really kicking in in Q2. Additionally, we're lapping the full contract, which will anniversary in August. So that first quarter, PJ, will be more like down 40% from a profit, which is consistent with 20%-30% down the first half, 20%-30% up in the second half. There's only one element that I would probably add. From a stock comp perspective, we still have a full year tax guide of 23.5%, but the first quarter will be about 27%, so that will be a higher number related to stock comp. So that would be the only color. 27 in the first, and then it comes down for the balance. Comes down for balance. The year doesn't change, but the first quarter is high. The year stays the same at 23.5. Okay. I'd just point that out, given the timing around that. All right. Well, thank you, all. This concludes our presentation for today. Special thanks to those making the trip to Louisville, and thank you to our UPS executive leadership team. I also wanna thank our production partners and our incredible investor relations team, Michael, Karen, Barbara, Caitlin, and Levi. Thank you all. We appreciate your time.