UPS (NYSE:UPS) today announced second-quarter diluted earnings per
share growth of 8.2%, to $1.71, and adjusted diluted earnings per
share growth of 23%, to $1.94.
Second-quarter 2018 adjusted results exclude a pre-tax charge of
$263 million, or $0.23 per share after-tax, due to transformation
costs primarily related to the Voluntary Retirement Plan
(VRP).
|
|
|
|
Consolidated
Results |
2Q 2018 |
Adjusted2Q 2018 |
2Q 2017 |
Revenue |
$17,456 M |
|
$15,927 M |
Net Income |
$1,485 M |
$1,685 M |
$1,384 M |
Diluted earnings per
share |
$1.71 |
$1.94 |
$1.58 |
EPS Growth |
|
8.2% |
|
23% |
|
|
|
|
|
|
|
“UPS is making great progress on our transformation initiatives
to enhance profitable growth and improve operating leverage,” said
David Abney, UPS Chairman and CEO. “We are confident that our
strategies will position the company to provide improved value for
customers and shareowners.”
For the total company in 2Q 2018:
- Consolidated revenue increased 9.6% to $17.5 billion, on growth
across all segments.
- Average yield increased 4.6%, led by International and U.S.
Deferred Air products.
- Net income increased 7.3% and adjusted net income was 22%
higher than 2Q17.
- Year-to-date cash from operations was $7.2 billion.
- Free Cash Flow surged to $4.4 billion in the first half of the
year, driven primarily by transformation initiatives that improved
working capital.
- Year-to-date dividends per share increased by 10% to $1.6
billion and share repurchases were $511 million.
- The company has made capital expenditures of $2.8 billion in
the first half of 2018.
* Information on non-GAAP financial measures is attached
to this press release.
U.S. Domestic Segment
The U.S. Domestic segment experienced strong revenue growth of
6.3%, driven by ecommerce demand and increased revenue per piece
over the prior year. Operating profit was primarily reduced
by planned increases in pension expense and cost for ongoing
network projects.
|
|
|
|
|
2Q 2018 |
Adjusted2Q 2018 |
2Q 2017 |
Revenue |
$10,354
M |
|
$9,741
M |
Operating profit |
$939
M |
$1,135
M |
$1,255
M |
|
|
|
|
For the U.S. Domestic segment in 2Q 2018:
- Revenue improved across all products, demonstrating robust
market demand for UPS solutions.
- Revenue per piece increased 3.6% as higher base-rates and fuel
surcharges offset headwinds from customer and product mix.
- Adjusted operating profit excludes transformation charges of
$196 million, which lowered reported operating margin by 190 basis
points.
International Segment
The International segment delivered its 14th consecutive quarter
of currency neutral double-digit operating profit growth.
The segment enjoyed its highest 2nd quarter operating profit
ever, led by the Europe region.
|
|
|
|
|
2Q 2018 |
Adjusted2Q 2018 |
2Q 2017 |
Revenue |
$3,602
M |
|
$3,171
M |
Operating profit |
$618
M |
$654
M |
$570
M |
|
|
|
|
For the International segment in 2Q 2018:
- International revenue increased 14%, driven by double-digit
growth in Export and Domestic.
- Daily Export shipments increased 9.5%, led by strong growth in
Europe and the U.S.
- Operating profit was $618 million and adjusted operating profit
rose 15% to $654 million.
- Adjusted operating profit excludes transformation charges of
$36 million.
Supply Chain and Freight Segment
“The Supply Chain and Freight segment delivered another quarter
of double-digit growth in revenue and adjusted operating profit,”
continued Abney. “Our targeted growth strategies and improved
efficiencies produced the segment’s best profit growth in its
history.”
* Information on non-GAAP financial measures is attached
to this press release.
|
|
|
|
|
2Q 2018 |
Adjusted2Q 2018 |
2Q 2017 |
Revenue |
$3,500
M |
|
$3,015
M |
Operating profit |
$216
M |
$247
M |
$212
M |
|
|
|
|
For the Supply Chain and Freight segment in 2Q 2018:
- Revenue increased 16% to $3.5 billion, the business units are
focused on leveraging UPS solutions to better serve middle-market
customers.
- The Forwarding business led all units with 23% revenue growth,
as revenue management initiatives drove top-line improvement.
- UPS Freight revenue increased 13% on higher pricing and tonnage
gains.
- Operating profit was $216 million and adjusted operating profit
was up 17% to $247 million.
- Adjusted operating profit excludes transformation charges of
$31 million.
Outlook
The company provides guidance on an adjusted (non-GAAP) basis
because it is not possible to predict or provide a reconciliation
reflecting the impact of future pension mark-to-market adjustments
or other unanticipated events, which would be included in reported
(GAAP) results and could be material.
“UPS is focused on executing our strategic imperatives for
improved efficiency and high-quality growth,” said Richard Peretz,
UPS’s chief financial officer. “We remain confident in our
ability to achieve our full-year adjusted earnings per share
target.”
- UPS expects 2018 adjusted diluted earnings per share in a range
of $7.03 to $7.37.
- The company raises 2018 free cash flow target to $5.0
billion.
- The effective tax rate should be in a range of 23% to 24% for
the remainder of the year.
- Capital expenditures in 2018 are planned between $6.5 billion
and $7.0 billion.
* Information on non-GAAP financial measures is attached
to this press release.
Conference Call
Information
UPS CEO David Abney and CFO Richard Peretz will discuss
second-quarter results with investors and analysts during a
conference call at 8:30 a.m. ET, July 25, 2018. That call is
open to others through a live Webcast. To access the call, go
to www.investors.ups.com and click on “Earnings Webcast.”
About UPSUPS (NYSE:UPS) is a global leader in
logistics, offering a broad range of solutions including
transporting packages and freight; facilitating international
trade, and deploying advanced technology to more efficiently manage
the world of business. UPS is committed to operating more
sustainably – for customers, the environment and the communities we
serve around the world. Learn more about our efforts at
ups.com/sustainability. Headquartered in Atlanta, UPS serves
more than 220 countries and territories worldwide. The
company can be found on the web at ups.com and its corporate blog
can be found at longitudes.ups.com. To get UPS news direct, follow
@UPS_News on Twitter.
Forward-Looking Statements
Except for historical information contained herein, the
statements made in this release constitute forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Such forward-looking statements, including statements regarding the
intent, belief or current expectations of UPS and its management
regarding the company's strategic directions, prospects and future
results, involve certain risks and uncertainties.
Certain factors may cause actual results to differ materially
from those contained in the forward-looking statements, including
economic and other conditions in the markets in which we operate,
governmental regulations (including tax laws and regulations), our
competitive environment, changes in the facts or assumptions
underlying our health and pension benefit funding obligations,
negotiation and ratification of labor contracts, strikes, work
stoppages and slowdowns, changes in aviation and motor fuel prices,
cyclical and seasonal fluctuations in our operating results, and
other risks discussed in the company's Form 10-K and other filings
with the Securities and Exchange Commission, which discussions are
incorporated herein by reference.
Reconciliation of GAAP and non-GAAP Financial Measures
We supplement the reporting of our financial information
determined under generally accepted accounting principles ("GAAP")
with certain non-GAAP financial measures, including, as applicable,
"as adjusted" operating profit, operating margin, pre-tax income,
net income and earnings per share. The equivalent measures
determined in accordance with GAAP are also referred to as
"reported" or "unadjusted.” Additionally, we periodically disclose
free cash flow, free cash flow excluding discretionary pension
contributions, as well as currency-neutral revenue, revenue per
piece and operating profit.
We consider quantitative and qualitative factors in assessing
whether to adjust for the impact of items that may be significant
or that could affect an understanding of our ongoing financial and
business performance or trends. Examples of items for which we may
make adjustments include but are not limited to: amounts related to
mark-to-market gains or losses (non-cash); settlement of
contingencies; gains or losses associated with mergers,
acquisitions, divestitures and other structural changes; charges
related to restructuring programs; asset impairments (non-cash);
amounts related to changes in tax regulations or positions; pension
and postretirement related items; and debt modifications.
We believe that these non-GAAP measures provide additional
meaningful information to assist users of our financial statements
in understanding our financial results, cash flows and assessing
our ongoing performance because they exclude items that may not be
indicative of, or are unrelated to, our underlying operations and
may provide a useful baseline for analyzing trends in our
underlying businesses. Management uses these non-GAAP financial
measures in making financial, operating and planning decisions. We
also use certain of these measures for the determination of
incentive compensation award results.
Non-GAAP financial measures should be considered in addition to,
and not as an alternative for, our reported results prepared in
accordance with GAAP. Our non-GAAP financial information does not
represent a comprehensive basis of accounting. Therefore, our
non-GAAP financial information may not be comparable to similarly
titled measures reported by other companies.
Transformation & Other
We supplement the presentation of our operating profit,
operating margin, pre-tax income, net income and earnings per share
with similar non-GAAP measures that exclude the impact of
transformation strategy costs. We believe this adjusted
information provides important supplemental information that
provides useful comparison of year-to-year financial performance
without considering the short-term impact of transformation
impacts. We evaluate the performance of our businesses on an
adjusted basis.
Currency-Neutral Revenue, Revenue per Piece and Operating
Profit
We supplement the reporting of our revenue, revenue per piece
and operating profit with similar non-GAAP measures that exclude
the period-over-period impact of foreign currency exchange rate
changes and hedging activities. We believe currency-neutral
revenue, revenue per piece and operating profit information allows
users of our financial statements to understand growth trends in
our products and results. We evaluate the performance of our
International Package and Supply Chain and Freight businesses on a
currency-neutral basis.
Currency-neutral revenue, revenue per piece and operating profit
are calculated by dividing current period reported U.S. dollar
revenue, revenue per piece and operating profit by the current
period average exchange rates to derive current period local
currency revenue, revenue per piece and operating profit. The
derived current period local currency revenue, revenue per piece
and operating profit are then multiplied by the average foreign
exchange rates used to translate the comparable results for each
month in the prior year period (including the period over period
impact of foreign currency revenue hedging activities). The
difference between the current period reported U.S. dollar revenue,
revenue per piece and operating profit and the derived current
period U.S. dollar revenue, revenue per piece and operating profit
is the period over period impact of currency fluctuations.
Free Cash Flow
We supplement the reporting of cash flows from operating
activities with free cash flow and free cash flow excluding
discretionary pension contributions, non-GAAP liquidity measures.
We believe free cash flow is an important indicator of how much
cash is generated by regular business operations and we use it as a
measure of incremental cash available to invest in our business,
meet our debt obligations and return cash to shareowners. We
calculate free cash flow as cash flows from operating activities
less capital expenditures, proceeds from disposals of property,
plant and equipment, and plus or minus the net changes in finance
receivables and other investing activities.
Reconciliation of GAAP and non-GAAP
Income Statement Data(in millions, except Per EPS
amounts):
Three Months Ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
Transformation |
|
|
|
|
As-Reported |
|
Strategy |
|
As-Adjusted |
|
|
(GAAP) |
|
Costs (1) |
|
(non-GAAP) |
Operating profit: |
|
|
|
|
|
|
U.S.
Domestic Package |
|
$ |
939 |
|
$ |
196 |
|
$ |
1,135 |
International Package |
|
|
618 |
|
|
36 |
|
|
654 |
Supply
Chain & Freight |
|
|
216 |
|
|
31 |
|
|
247 |
Total
operating profit |
|
$ |
1,773 |
|
$ |
263 |
|
$ |
2,036 |
|
|
|
|
|
|
|
Income
before income taxes |
$ |
1,926 |
|
$ |
263 |
|
$ |
2,189 |
|
|
|
|
|
|
|
Income tax expense |
|
$ |
441 |
|
|
63 |
|
$ |
504 |
|
|
|
|
|
|
|
Net income |
|
$ |
1,485 |
|
$ |
200 |
|
$ |
1,685 |
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
1.71 |
|
$ |
0.23 |
|
$ |
1.94 |
|
|
|
|
|
|
|
(1) Transformation strategy costs include voluntary retirement
plan severance costs of $192 million, and other costs of $71
million
|
|
Six Months Ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Transformation |
|
|
|
|
|
As-Reported |
|
Strategy |
|
As-Adjusted |
|
|
|
(GAAP) |
|
Costs (1) |
|
(non-GAAP) |
|
Operating
profit: |
|
|
|
|
|
|
U.S. Domestic Package |
$ |
1,695 |
|
$ |
196 |
|
$ |
1,891 |
|
International Package |
|
1,212 |
|
|
36 |
|
|
1,248 |
|
Supply Chain & Freight |
|
386 |
|
|
31 |
|
|
417 |
|
Total operating profit |
$ |
3,293 |
|
$ |
263 |
|
$ |
3,556 |
|
|
|
|
|
|
|
|
|
Income
before income taxes |
$ |
3,587 |
|
$ |
263 |
|
$ |
3,850 |
|
|
|
|
|
|
|
|
|
Income tax
expense |
$ |
757 |
|
$ |
63 |
|
$ |
820 |
|
|
|
|
|
|
|
|
|
Net
income |
$ |
2,830 |
|
$ |
200 |
|
$ |
3,030 |
|
|
|
|
|
|
|
|
|
Diluted
earnings per share |
$ |
3.25 |
|
$ |
0.23 |
|
$ |
3.48 |
|
|
|
|
|
|
|
|
|
(1) Transformation strategy costs include voluntary retirement
plan severance costs of $192 million, and other costs of $71
million
Note: Certain amounts may not compute due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and non-GAAP Revenue,
Revenue Per Piece and As-Adjusted Currency Neutral Operating
Profit |
|
(in millions, except Per Piece
amounts): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
|
2018 As- |
|
2017 As- |
|
|
|
|
|
Currency |
|
|
|
|
Reported |
|
Reported |
|
% Change |
|
Currency |
|
Neutral |
|
% Change |
|
|
(GAAP) |
|
(GAAP) |
|
(GAAP) |
|
Impact |
|
(non-GAAP) |
|
(non-GAAP) |
|
Average Revenue
Per Piece: |
|
|
|
|
|
|
|
|
|
|
|
|
International
Package: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
$ |
6.61 |
|
$ |
6.01 |
|
10.0% |
|
|
$ |
(0.41) |
|
|
$ |
6.20 |
|
3.2% |
|
|
Export |
|
30.14 |
|
|
29.16 |
|
3.4% |
|
|
|
(0.73) |
|
|
|
29.41 |
|
0.9% |
|
|
Total
International Package |
$ |
17.50 |
|
$ |
16.31 |
|
7.3% |
|
|
$ |
(0.57) |
|
|
$ |
16.93 |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
$ |
11.26 |
|
$ |
10.76 |
|
4.6% |
|
|
$ |
(0.09) |
|
|
$ |
11.17 |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
10,354 |
|
$ |
9,741 |
|
6.3% |
|
|
$ |
- |
|
|
$ |
10,354 |
|
6.3% |
|
|
International Package |
|
3,602 |
|
|
3,171 |
|
13.6% |
|
|
|
(113) |
|
|
|
3,489 |
|
10.0% |
|
|
Supply
Chain & Freight |
|
3,500 |
|
|
3,015 |
|
16.1% |
|
|
|
(29) |
|
|
|
3,471 |
|
15.1% |
|
|
Total
revenue |
$ |
17,456 |
|
$ |
15,927 |
|
9.6% |
|
|
$ |
(142) |
|
|
$ |
17,314 |
|
8.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 As- |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
2018 As- |
|
2017 As- |
|
|
|
|
|
Currency |
|
|
|
|
Adjusted |
|
Adjusted |
|
% Change |
|
Currency |
|
Neutral |
|
% Change |
|
|
(non-GAAP) |
|
(non-GAAP) |
|
(non-GAAP) |
|
Impact |
|
(non-GAAP) |
|
(non-GAAP) |
|
As-Adjusted
Operating Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
1,135 |
|
$ |
1,255 |
|
-9.6% |
|
|
$ |
- |
|
|
$ |
1,135 |
|
-9.6% |
|
|
International Package |
|
654 |
|
|
570 |
|
14.7% |
|
|
|
(22) |
|
|
|
632 |
|
10.9% |
|
|
Supply
Chain & Freight |
|
247 |
|
|
212 |
|
16.5% |
|
|
|
2 |
|
|
|
249 |
|
17.5% |
|
|
Total
operating profit |
$ |
2,036 |
|
$ |
2,037 |
|
0.0% |
|
|
$ |
(20) |
|
|
$ |
2,016 |
|
-1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and non-GAAP Revenue,
Revenue Per Piece and As-Adjusted Currency Neutral Operating
Profit |
|
(in millions, except Per Piece
amounts): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
|
2018 As- |
|
2017 As- |
|
|
|
|
|
Currency |
|
|
|
|
Reported |
|
Reported |
|
% Change |
|
Currency |
|
Neutral |
|
% Change |
|
|
(GAAP) |
|
(GAAP) |
|
(GAAP) |
|
Impact |
|
(non-GAAP) |
|
(non-GAAP) |
|
Average Revenue
Per Piece: |
|
|
|
|
|
|
|
|
|
|
|
|
International
Package: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
$ |
6.66 |
|
$ |
5.85 |
|
13.8% |
|
|
$ |
(0.58) |
|
|
$ |
6.08 |
|
3.9% |
|
|
Export |
|
29.50 |
|
|
28.65 |
|
3.0% |
|
|
|
(0.97) |
|
|
|
28.53 |
|
-0.4% |
|
|
Total
International Package |
$ |
17.24 |
|
$ |
15.88 |
|
8.6% |
|
|
$ |
(0.76) |
|
|
$ |
16.48 |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
$ |
11.11 |
|
$ |
10.64 |
|
4.4% |
|
|
$ |
(0.12) |
|
|
$ |
10.99 |
|
3.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
20,581 |
|
$ |
19,277 |
|
6.8% |
|
|
$ |
- |
|
|
$ |
20,581 |
|
6.8% |
|
|
International Package |
|
7,135 |
|
|
6,245 |
|
14.3% |
|
|
|
(306) |
|
|
|
6,829 |
|
9.4% |
|
|
Supply
Chain & Freight |
|
6,853 |
|
|
5,915 |
|
15.9% |
|
|
|
(80) |
|
|
|
6,773 |
|
14.5% |
|
|
Total
revenue |
$ |
34,569 |
|
$ |
31,437 |
|
10.0% |
|
|
$ |
(386) |
|
|
$ |
34,183 |
|
8.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 As- |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
2018 As- |
|
2017 As- |
|
|
|
|
|
Currency |
|
|
|
|
Adjusted |
|
Adjusted |
|
% Change |
|
Currency |
|
Neutral |
|
% Change |
|
|
(non-GAAP) |
|
(non-GAAP) |
|
(non-GAAP) |
|
Impact |
|
(non-GAAP) |
|
(non-GAAP) |
|
As-Adjusted
Operating Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
1,891 |
|
$ |
2,205 |
|
-14.2% |
|
|
$ |
- |
|
|
$ |
1,891 |
|
-14.2% |
|
|
International Package |
|
1,248 |
|
|
1,088 |
|
14.7% |
|
|
|
(44) |
|
|
|
1,204 |
|
10.7% |
|
|
Supply
Chain & Freight |
|
417 |
|
|
361 |
|
15.5% |
|
|
|
1 |
|
|
|
418 |
|
15.8% |
|
|
Total
operating profit |
$ |
3,556 |
|
$ |
3,654 |
|
-2.7% |
|
|
$ |
(43) |
|
|
$ |
3,513 |
|
-3.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP and non-GAAP Liquidity
Measures |
|
(in
millions): |
|
|
|
|
|
|
Six Months Ended June 30 |
|
|
|
|
|
Net Increase (Decrease) in Cash, Cash
Equivalents, and Restricted Cash |
|
|
|
|
|
|
|
|
Preliminary |
|
|
|
2018 |
|
|
Cash flows from
operating activities |
|
$ |
7,200 |
|
|
Cash flows used in
investing activities |
|
|
(2,820) |
|
|
Cash flows used in
financing activities |
|
|
(3,607) |
|
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash |
|
|
(51) |
|
|
Net increase
in cash, cash equivalents, and restricted cash |
|
$ |
722 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow
(non-GAAP) |
|
|
|
|
|
|
|
|
Preliminary |
|
|
|
2018 |
|
|
Cash flows from
operating activities (GAAP) |
|
$ |
7,200 |
|
|
Capital
expenditures |
|
|
(2,849) |
|
|
Proceeds from disposals
of PP&E |
|
|
35 |
|
|
Net change in finance
receivables |
|
|
(4) |
|
|
Other investing
activities |
|
|
(7) |
|
|
Free cash
flow (non-GAAP) |
|
$ |
4,375 |
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Selected Financial Data - Second
Quarter |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
June 30 |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
Change |
|
% Change |
|
(amounts
in millions, except per share data) |
|
|
|
|
|
|
|
|
Statement of
Income Data: |
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
10,354 |
|
|
$ |
9,741 |
|
|
$ |
613 |
|
|
6.3% |
|
|
International Package |
|
3,602 |
|
|
|
3,171 |
|
|
|
431 |
|
|
13.6% |
|
|
Supply
Chain & Freight |
|
3,500 |
|
|
|
3,015 |
|
|
|
485 |
|
|
16.1% |
|
|
Total
revenue |
|
17,456 |
|
|
|
15,927 |
|
|
|
1,529 |
|
|
9.6% |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Compensation and benefits |
|
9,024 |
|
|
|
8,284 |
|
|
|
740 |
|
|
8.9% |
|
|
Other |
|
6,659 |
|
|
|
5,606 |
|
|
|
1,053 |
|
|
18.8% |
|
|
Total
operating expenses |
|
15,683 |
|
|
|
13,890 |
|
|
|
1,793 |
|
|
12.9% |
|
|
|
|
|
|
|
|
|
|
|
Operating profit: |
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
|
939 |
|
|
|
1,255 |
|
|
|
(316) |
|
|
-25.2% |
|
|
International Package |
|
618 |
|
|
|
570 |
|
|
|
48 |
|
|
8.4% |
|
|
Supply
Chain & Freight |
|
216 |
|
|
|
212 |
|
|
|
4 |
|
|
1.9% |
|
|
Total
operating profit |
|
1,773 |
|
|
|
2,037 |
|
|
|
(264) |
|
|
-13.0% |
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
Other
pension income (expense) |
|
284 |
|
|
|
179 |
|
|
|
105 |
|
|
58.7% |
|
|
Investment income and other |
|
18 |
|
|
|
14 |
|
|
|
4 |
|
|
28.6% |
|
|
Interest
expense |
|
(149) |
|
|
|
(111) |
|
|
|
(38) |
|
|
34.2% |
|
|
Total
other income (expense) |
|
153 |
|
|
|
82 |
|
|
|
71 |
|
|
86.6% |
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
1,926 |
|
|
|
2,119 |
|
|
|
(193) |
|
|
-9.1% |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
441 |
|
|
|
735 |
|
|
|
(294) |
|
|
-40.0% |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
1,485 |
|
|
$ |
1,384 |
|
|
$ |
101 |
|
|
7.3% |
|
|
|
|
|
|
|
|
|
|
|
Net income as a
percentage of revenue |
|
8.5% |
|
|
|
8.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share amounts: |
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
1.71 |
|
|
$ |
1.59 |
|
|
$ |
0.12 |
|
|
7.5% |
|
|
Diluted
earnings per share |
$ |
1.71 |
|
|
$ |
1.58 |
|
|
$ |
0.13 |
|
|
8.2% |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
866 |
|
|
|
872 |
|
|
|
(6) |
|
|
-0.7% |
|
|
Diluted |
|
870 |
|
|
|
876 |
|
|
|
(6) |
|
|
-0.7% |
|
|
|
|
|
|
|
|
|
|
|
As adjusted
income data: |
|
|
|
|
|
|
|
|
Operating profit: |
|
|
|
|
|
|
|
|
U.S.
Domestic Package (1) |
$ |
1,135 |
|
|
$ |
1,255 |
|
|
$ |
(120) |
|
|
-9.6% |
|
|
International Package (1) |
|
654 |
|
|
|
570 |
|
|
|
84 |
|
|
14.7% |
|
|
Supply
Chain & Freight (1) |
|
247 |
|
|
|
212 |
|
|
|
35 |
|
|
16.5% |
|
|
Total
operating profit (1) |
|
2,036 |
|
|
|
2,037 |
|
|
|
(1) |
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes (1) |
$ |
2,189 |
|
|
$ |
2,119 |
|
|
$ |
70 |
|
|
3.3% |
|
|
Net income (2) |
$ |
1,685 |
|
|
$ |
1,384 |
|
|
$ |
301 |
|
|
21.7% |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share (2) |
$ |
1.95 |
|
|
$ |
1.59 |
|
|
$ |
0.36 |
|
|
22.6% |
|
|
Diluted earnings per
share (2) |
$ |
1.94 |
|
|
$ |
1.58 |
|
|
$ |
0.36 |
|
|
22.8% |
|
|
|
|
|
|
|
|
|
|
|
(1) 2018 operating profit and consolidated income before
income taxes exclude the impact of $263 million of transformation
strategy costs, which includes voluntary retirement plan severance
costs of $192 million, and other costs of $71 million. These
costs are allocated between the U.S. Domestic Package segment ($196
million), International Package segment ($36 million) and Supply
Chain & Freight segment ($31 million). |
|
|
|
(2) 2018 net income and earnings per share amounts exclude the
after-tax impact of the adjustments described in (1), which
decreased net income by $200 million. |
|
|
|
|
United Parcel Service, Inc. |
Selected Operating Data - Second
Quarter |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
June 30 |
|
|
|
2018 |
|
|
2017 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
Revenue (in
millions): |
|
|
|
|
|
|
|
U.S. Domestic
Package: |
|
|
|
|
|
|
|
Next Day
Air |
$ |
1,830 |
|
$ |
1,752 |
|
$ |
78 |
|
|
4.5% |
|
Deferred |
|
1,080 |
|
|
1,020 |
|
|
60 |
|
|
5.9% |
|
Ground |
|
7,444 |
|
|
6,969 |
|
|
475 |
|
|
6.8% |
|
Total
U.S. Domestic Package |
|
10,354 |
|
|
9,741 |
|
|
613 |
|
|
6.3% |
|
International
Package: |
|
|
|
|
|
|
|
Domestic |
|
700 |
|
|
623 |
|
|
77 |
|
|
12.4% |
|
Export |
|
2,747 |
|
|
2,426 |
|
|
321 |
|
|
13.2% |
|
Cargo and
Other |
|
155 |
|
|
122 |
|
|
33 |
|
|
27.0% |
|
Total
International Package |
|
3,602 |
|
|
3,171 |
|
|
431 |
|
|
13.6% |
|
Supply Chain &
Freight: |
|
|
|
|
|
|
|
Forwarding |
|
1,659 |
|
|
1,347 |
|
|
312 |
|
|
23.2% |
|
Logistics |
|
784 |
|
|
718 |
|
|
66 |
|
|
9.2% |
|
Freight |
|
853 |
|
|
755 |
|
|
98 |
|
|
13.0% |
|
Other |
|
204 |
|
|
195 |
|
|
9 |
|
|
4.6% |
|
Total
Supply Chain & Freight |
|
3,500 |
|
|
3,015 |
|
|
485 |
|
|
16.1% |
|
Consolidated |
$ |
17,456 |
|
$ |
15,927 |
|
$ |
1,529 |
|
|
9.6% |
|
|
|
|
|
|
|
|
|
Consolidated volume (in
millions) |
|
1,226 |
|
|
1,189 |
|
|
37 |
|
|
3.1% |
|
|
|
|
|
|
|
|
|
Operating weekdays |
|
64 |
|
|
64 |
|
|
- |
|
|
0.0% |
|
|
|
|
|
|
|
|
|
Average Daily Package Volume (in thousands): |
|
|
|
|
|
|
U.S. Domestic
Package: |
|
|
|
|
|
|
|
Next Day
Air |
|
1,424 |
|
|
1,396 |
|
|
28 |
|
|
2.0% |
|
Deferred |
|
1,226 |
|
|
1,253 |
|
|
(27 |
) |
|
-2.2% |
|
Ground |
|
13,420 |
|
|
13,012 |
|
|
408 |
|
|
3.1% |
|
Total
U.S. Domestic Package |
|
16,070 |
|
|
15,661 |
|
|
409 |
|
|
2.6% |
|
International
Package: |
|
|
|
|
|
|
|
Domestic |
|
1,654 |
|
|
1,621 |
|
|
33 |
|
|
2.0% |
|
Export |
|
1,424 |
|
|
1,300 |
|
|
124 |
|
|
9.5% |
|
Total
International Package |
|
3,078 |
|
|
2,921 |
|
|
157 |
|
|
5.4% |
|
Consolidated |
|
19,148 |
|
|
18,582 |
|
|
566 |
|
|
3.0% |
|
|
|
|
|
|
|
|
|
Average Revenue
Per Piece: |
|
|
|
|
|
|
|
U.S. Domestic
Package: |
|
|
|
|
|
|
|
Next Day
Air |
$ |
20.08 |
|
$ |
19.61 |
|
$ |
0.47 |
|
|
2.4% |
|
Deferred |
|
13.76 |
|
|
12.72 |
|
|
1.04 |
|
|
8.2% |
|
Ground |
|
8.67 |
|
|
8.37 |
|
|
0.30 |
|
|
3.6% |
|
Total
U.S. Domestic Package |
|
10.07 |
|
|
9.72 |
|
|
0.35 |
|
|
3.6% |
|
International
Package: |
|
|
|
|
|
|
|
Domestic |
|
6.61 |
|
|
6.01 |
|
|
0.60 |
|
|
10.0% |
|
Export |
|
30.14 |
|
|
29.16 |
|
|
0.98 |
|
|
3.4% |
|
Total
International Package |
|
17.50 |
|
|
16.31 |
|
|
1.19 |
|
|
7.3% |
|
Consolidated |
$ |
11.26 |
|
$ |
10.76 |
|
$ |
0.50 |
|
|
4.6% |
|
|
|
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Supplemental Analysis of Currency and UPS
Freight |
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Neutral Revenue Per
Piece |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Currency Neutral |
|
|
|
|
June 30 |
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
% Change |
|
Currency |
|
2018* |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Revenue
Per Piece: |
|
|
|
|
|
|
|
|
|
|
|
|
International
Package: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
$ |
6.61 |
|
$ |
6.01 |
|
|
10.0% |
|
|
$ |
(0.41) |
|
|
$ |
6.20 |
|
3.2% |
|
|
Export |
|
30.14 |
|
|
29.16 |
|
|
3.4% |
|
|
|
(0.73) |
|
|
|
29.41 |
|
0.9% |
|
|
Total
International Package |
$ |
17.50 |
|
$ |
16.31 |
|
|
7.3% |
|
|
$ |
(0.57) |
|
|
$ |
16.93 |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
$ |
11.26 |
|
$ |
10.76 |
|
|
4.6% |
|
|
$ |
(0.09) |
|
|
$ |
11.17 |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts
adjusted for period over period foreign currency exchange rate and
hedging differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Neutral Revenue |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Currency Neutral |
|
|
|
|
June 30 |
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
% Change |
|
Currency |
|
2018* |
|
% Change |
|
Revenue (in
millions): |
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
10,354 |
|
$ |
9,741 |
|
|
6.3% |
|
|
$ |
- |
|
|
$ |
10,354 |
|
6.3% |
|
|
International Package |
|
3,602 |
|
|
3,171 |
|
|
13.6% |
|
|
|
(113) |
|
|
|
3,489 |
|
10.0% |
|
|
Supply
Chain & Freight |
|
3,500 |
|
|
3,015 |
|
|
16.1% |
|
|
|
(29) |
|
|
|
3,471 |
|
15.1% |
|
|
Total
revenue |
$ |
17,456 |
|
$ |
15,927 |
|
|
9.6% |
|
|
$ |
(142) |
|
|
$ |
17,314 |
|
8.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts
adjusted for period over period foreign currency exchange rate and
hedging differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Neutral Operating
Profit |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Currency Neutral |
|
|
|
|
June 30 |
|
|
|
|
|
|
|
|
|
2018* |
|
|
2017 |
|
% Change |
|
Currency |
|
2018** |
|
% Change |
|
As-Adjusted Operating profit (in millions): |
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
1,135 |
|
$ |
1,255 |
|
|
-9.6% |
|
|
$ |
- |
|
|
$ |
1,135 |
|
-9.6% |
|
|
International Package |
|
654 |
|
|
570 |
|
|
14.7% |
|
|
|
(22) |
|
|
|
632 |
|
10.9% |
|
|
Supply
Chain & Freight |
|
247 |
|
|
212 |
|
|
16.5% |
|
|
|
2 |
|
|
|
249 |
|
17.5% |
|
|
Total
operating profit |
$ |
2,036 |
|
$ |
2,037 |
|
|
0.0% |
|
|
$ |
(20) |
|
|
$ |
2,016 |
|
-1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts adjusted for
Transformation strategy costs |
|
|
|
|
|
|
|
|
|
|
|
|
** Amounts
adjusted for Transformation strategy costs and period over period
foreign currency exchange rate and hedging differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UPS Freight Selected Operating Data - Second
Quarter |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|
June 30 |
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
Change |
|
% Change |
|
|
|
|
|
LTL revenue (in
millions) |
$ |
726 |
|
$ |
654 |
|
$ |
72 |
|
|
|
11.0% |
|
|
|
|
|
|
LTL revenue per LTL
hundredweight |
$ |
25.36 |
|
$ |
23.62 |
|
$ |
1.74 |
|
|
|
7.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL shipments (in
thousands) |
|
2,639 |
|
|
2,639 |
|
|
- |
|
|
|
0.0% |
|
|
|
|
|
|
LTL shipments per day
(in thousands) |
|
41.2 |
|
|
41.2 |
|
|
- |
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL gross weight hauled
(in millions of pounds) |
|
2,861 |
|
|
2,767 |
|
|
94 |
|
|
|
3.4% |
|
|
|
|
|
|
LTL weight per shipment
(in pounds) |
|
1,084 |
|
|
1,049 |
|
|
35 |
|
|
|
3.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating weekdays |
|
64 |
|
|
64 |
|
|
- |
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Detail of Other Operating Expenses - Second
Quarter |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
Three Months Ended |
|
|
|
|
|
June 30 |
|
|
|
|
|
2018 |
|
|
2017 |
|
Change |
|
% Change |
|
Repairs and
maintenance |
$ |
423 |
|
$ |
392 |
|
$ |
31 |
|
|
7.9% |
|
|
Depreciation and
amortization |
|
542 |
|
|
562 |
|
|
(20) |
|
|
-3.6% |
|
|
Purchased
transportation |
|
3,209 |
|
|
2,614 |
|
|
595 |
|
|
22.8% |
|
|
Fuel |
|
852 |
|
|
616 |
|
|
236 |
|
|
38.3% |
|
|
Other occupancy |
|
321 |
|
|
264 |
|
|
57 |
|
|
21.6% |
|
|
Other expenses |
|
1,312 |
|
|
1,158 |
|
|
154 |
|
|
13.3% |
|
|
Total other operating
expenses |
$ |
6,659 |
|
$ |
5,606 |
|
$ |
1,053 |
|
|
18.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of Other Pension Income (Expense) -
Second Quarter |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
Three Months Ended |
|
|
|
|
|
June 30 |
|
|
|
|
|
2018 |
|
|
2017 |
|
Change |
|
% Change |
|
U.S. Domestic
Package |
$ |
227 |
|
$ |
137 |
|
$ |
90 |
|
|
65.7% |
|
|
International
Package |
|
20 |
|
|
14 |
|
|
6 |
|
|
42.9% |
|
|
Supply Chain &
Freight |
|
37 |
|
|
28 |
|
|
9 |
|
|
32.1% |
|
|
Total other pension
income (expense) |
$ |
284 |
|
$ |
179 |
|
$ |
105 |
|
|
58.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share and Share Data - Second
Quarter |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
(amounts
in millions, except per share data) |
|
|
June 30 |
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
Net
income |
|
|
$ |
1,485 |
|
$ |
1,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Weighted-average shares |
|
|
|
861 |
|
|
867 |
|
|
|
|
Deferred
compensation obligations |
|
|
|
1 |
|
|
1 |
|
|
|
|
Vested
portion of restricted units |
|
|
|
4 |
|
|
4 |
|
|
|
|
Denominator for basic
earnings per share |
|
|
|
866 |
|
|
872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive
securities: |
|
|
|
|
|
|
|
|
Restricted units |
|
|
|
3 |
|
|
3 |
|
|
|
|
Stock
options |
|
|
|
1 |
|
|
1 |
|
|
|
|
Denominator for diluted
earnings per share |
|
|
|
870 |
|
|
876 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
|
|
$ |
1.71 |
|
$ |
1.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
|
$ |
1.71 |
|
$ |
1.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of shares outstanding as of June 30,
2018: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A shares |
|
|
|
167 |
|
|
|
|
|
Class B shares |
|
|
|
693 |
|
|
|
|
|
Total
shares outstanding |
|
|
|
860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Selected Financial Data - Year to
Date |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
June 30 |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
Change |
|
% Change |
|
(amounts
in millions, except per share data) |
|
|
|
|
|
|
|
|
Statement of
Income Data: |
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
20,581 |
|
|
$ |
19,277 |
|
|
$ |
1,304 |
|
|
6.8% |
|
|
International Package |
|
7,135 |
|
|
|
6,245 |
|
|
|
890 |
|
|
14.3% |
|
|
Supply
Chain & Freight |
|
6,853 |
|
|
|
5,915 |
|
|
|
938 |
|
|
15.9% |
|
|
Total
revenue |
|
34,569 |
|
|
|
31,437 |
|
|
|
3,132 |
|
|
10.0% |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Compensation and benefits |
|
18,069 |
|
|
|
16,595 |
|
|
|
1,474 |
|
|
8.9% |
|
|
Other |
|
13,207 |
|
|
|
11,188 |
|
|
|
2,019 |
|
|
18.0% |
|
|
Total
operating expenses |
|
31,276 |
|
|
|
27,783 |
|
|
|
3,493 |
|
|
12.6% |
|
|
|
|
|
|
|
|
|
|
|
Operating profit: |
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
|
1,695 |
|
|
|
2,205 |
|
|
|
(510) |
|
|
-23.1% |
|
|
International Package |
|
1,212 |
|
|
|
1,088 |
|
|
|
124 |
|
|
11.4% |
|
|
Supply
Chain & Freight |
|
386 |
|
|
|
361 |
|
|
|
25 |
|
|
6.9% |
|
|
Total
operating profit |
|
3,293 |
|
|
|
3,654 |
|
|
|
(361) |
|
|
-9.9% |
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
Other
pension income (expense) |
|
569 |
|
|
|
359 |
|
|
|
210 |
|
|
58.5% |
|
|
Investment income and other |
|
27 |
|
|
|
29 |
|
|
|
(2) |
|
|
-6.9% |
|
|
Interest
expense |
|
(302) |
|
|
|
(213) |
|
|
|
(89) |
|
|
41.8% |
|
|
Total
other income (expense) |
|
294 |
|
|
|
175 |
|
|
|
119 |
|
|
68.0% |
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
3,587 |
|
|
|
3,829 |
|
|
|
(242) |
|
|
-6.3% |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
757 |
|
|
|
1,279 |
|
|
|
(522) |
|
|
-40.8% |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
2,830 |
|
|
$ |
2,550 |
|
|
$ |
280 |
|
|
11.0% |
|
|
|
|
|
|
|
|
|
|
|
Net income as a
percentage of revenue |
|
8.2% |
|
|
|
8.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share amounts: |
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
3.27 |
|
|
$ |
2.92 |
|
|
$ |
0.35 |
|
|
12.0% |
|
|
Diluted
earnings per share |
$ |
3.25 |
|
|
$ |
2.91 |
|
|
$ |
0.34 |
|
|
11.7% |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
866 |
|
|
|
873 |
|
|
|
(7) |
|
|
-0.8% |
|
|
Diluted |
|
870 |
|
|
|
877 |
|
|
|
(7) |
|
|
-0.8% |
|
|
|
|
|
|
|
|
|
|
|
As adjusted
income data: |
|
|
|
|
|
|
|
|
Operating profit: |
|
|
|
|
|
|
|
|
U.S.
Domestic Package (1) |
$ |
1,891 |
|
|
$ |
2,205 |
|
|
$ |
(314) |
|
|
-14.2% |
|
|
International Package (1) |
|
1,248 |
|
|
|
1,088 |
|
|
|
160 |
|
|
14.7% |
|
|
Supply
Chain & Freight |
|
417 |
|
|
|
361 |
|
|
|
56 |
|
|
15.5% |
|
|
Total
operating profit (1) |
|
3,556 |
|
|
|
3,654 |
|
|
|
(98) |
|
|
-2.7% |
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes (1) |
$ |
3,850 |
|
|
$ |
3,829 |
|
|
$ |
21 |
|
|
0.5% |
|
|
Net income (2) |
$ |
3,030 |
|
|
$ |
2,550 |
|
|
$ |
480 |
|
|
18.8% |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share (2) |
$ |
3.50 |
|
|
$ |
2.92 |
|
|
$ |
0.58 |
|
|
19.9% |
|
|
Diluted earnings per
share (2) |
$ |
3.48 |
|
|
$ |
2.91 |
|
|
$ |
0.57 |
|
|
19.6% |
|
|
|
|
|
|
|
|
|
|
|
(1) 2018 operating profit and consolidated income before
income taxes exclude the impact of $263 million of transformation
strategy costs, which includes voluntary retirement plan severance
costs of $192 million, and other costs of $71 million. These
costs are allocated between the U.S. Domestic Package segment ($196
million), International Package segment ($36 million) and Supply
Chain & Freight segment ($31 million). |
|
|
|
|
|
|
|
|
|
|
(2) 2018 net income and earnings per share amounts exclude the
after-tax impact of the adjustments described in (1), which
decreased net income by $200 million. |
|
|
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Selected Operating Data - Year to
Date |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
June 30 |
|
|
|
|
2018 |
|
|
2017 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
|
|
Revenue (in
millions): |
|
|
|
|
|
|
|
|
U.S. Domestic
Package: |
|
|
|
|
|
|
|
|
Next Day
Air |
$ |
3,614 |
|
$ |
3,417 |
|
$ |
197 |
|
5.8% |
|
|
Deferred |
|
2,149 |
|
$ |
1,990 |
|
|
159 |
|
8.0% |
|
|
Ground |
|
14,818 |
|
|
13,870 |
|
|
948 |
|
6.8% |
|
|
Total
U.S. Domestic Package |
|
20,581 |
|
|
19,277 |
|
|
1,304 |
|
6.8% |
|
|
International
Package: |
|
|
|
|
|
|
|
|
Domestic |
|
1,416 |
|
$ |
1,236 |
|
|
180 |
|
14.6% |
|
|
Export |
|
5,419 |
|
$ |
4,763 |
|
|
656 |
|
13.8% |
|
|
Cargo and
Other |
|
300 |
|
|
246 |
|
|
54 |
|
22.0% |
|
|
Total
International Package |
|
7,135 |
|
|
6,245 |
|
|
890 |
|
14.3% |
|
|
Supply Chain &
Freight: |
|
|
|
|
|
|
|
|
Forwarding |
|
3,264 |
|
|
2,613 |
|
|
651 |
|
24.9% |
|
|
Logistics |
|
1,566 |
|
|
1,458 |
|
|
108 |
|
7.4% |
|
|
Freight |
|
1,630 |
|
|
1,462 |
|
|
168 |
|
11.5% |
|
|
Other |
|
393 |
|
|
382 |
|
|
11 |
|
2.9% |
|
|
Total
Supply Chain & Freight |
|
6,853 |
|
|
5,915 |
|
|
938 |
|
15.9% |
|
|
Consolidated |
$ |
34,569 |
|
$ |
31,437 |
|
$ |
3,132 |
|
10.0% |
|
|
|
|
|
|
|
|
|
|
|
Consolidated volume (in
millions) |
|
2,467 |
|
|
2,376 |
|
|
91 |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
Operating weekdays |
|
128 |
|
|
128 |
|
|
- |
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
Average Daily Package Volume (in thousands): |
|
|
|
|
|
|
|
U.S. Domestic
Package: |
|
|
|
|
|
|
|
|
Next Day
Air |
|
1,430 |
|
|
1,355 |
|
|
75 |
|
5.5% |
|
|
Deferred |
|
1,261 |
|
|
1,248 |
|
|
13 |
|
1.0% |
|
|
Ground |
|
13,483 |
|
|
13,011 |
|
|
472 |
|
3.6% |
|
|
Total
U.S. Domestic Package |
|
16,174 |
|
|
15,614 |
|
|
560 |
|
3.6% |
|
|
International
Package: |
|
|
|
|
|
|
|
|
Domestic |
|
1,662 |
|
|
1,652 |
|
|
10 |
|
0.6% |
|
|
Export |
|
1,435 |
|
|
1,299 |
|
|
136 |
|
10.5% |
|
|
Total
International Package |
|
3,097 |
|
|
2,951 |
|
|
146 |
|
5.0% |
|
|
Consolidated |
|
19,271 |
|
|
18,565 |
|
|
706 |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
Average Revenue
Per Piece: |
|
|
|
|
|
|
|
|
U.S. Domestic
Package: |
|
|
|
|
|
|
|
|
Next Day
Air |
$ |
19.74 |
|
$ |
19.70 |
|
$ |
0.04 |
|
0.2% |
|
|
Deferred |
|
13.31 |
|
|
12.46 |
|
|
0.85 |
|
6.8% |
|
|
Ground |
|
8.59 |
|
|
8.33 |
|
|
0.26 |
|
3.1% |
|
|
Total
U.S. Domestic Package |
|
9.94 |
|
|
9.65 |
|
|
0.29 |
|
3.0% |
|
|
International
Package: |
|
|
|
|
|
|
|
|
Domestic |
|
6.66 |
|
|
5.85 |
|
|
0.81 |
|
13.8% |
|
|
Export |
|
29.50 |
|
|
28.65 |
|
|
0.85 |
|
3.0% |
|
|
Total
International Package |
|
17.24 |
|
|
15.88 |
|
|
1.36 |
|
8.6% |
|
|
Consolidated |
$ |
11.11 |
|
$ |
10.64 |
|
$ |
0.47 |
|
4.4% |
|
|
|
|
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Supplemental Analysis of Currency and UPS
Freight |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Neutral Revenue Per
Piece |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
Currency Neutral |
|
|
|
|
|
June 30 |
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
% Change |
|
Currency |
|
2018* |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Revenue
Per Piece: |
|
|
|
|
|
|
|
|
|
|
|
|
|
International
Package: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
$ |
6.66 |
|
$ |
5.85 |
|
|
13.8% |
|
|
$ |
(0.58) |
|
|
$ |
6.08 |
|
3.9% |
|
|
|
Export |
|
29.50 |
|
|
28.65 |
|
|
3.0% |
|
|
|
(0.97) |
|
|
|
28.53 |
|
-0.4% |
|
|
|
Total
International Package |
$ |
17.24 |
|
$ |
15.88 |
|
|
8.6% |
|
|
$ |
(0.76) |
|
|
$ |
16.48 |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
$ |
11.11 |
|
$ |
10.64 |
|
|
4.4% |
|
|
$ |
(0.12) |
|
|
$ |
10.99 |
|
3.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts
adjusted for period over period foreign currency exchange rate and
hedging differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Neutral Revenue |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
Currency Neutral |
|
|
|
|
|
June 30 |
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
% Change |
|
Currency |
|
2018* |
|
% Change |
|
|
Revenue (in
millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
20,581 |
|
$ |
19,277 |
|
|
6.8% |
|
|
$ |
- |
|
|
$ |
20,581 |
|
6.8% |
|
|
|
International Package |
|
7,135 |
|
|
6,245 |
|
|
14.3% |
|
|
|
(306) |
|
|
|
6,829 |
|
9.4% |
|
|
|
Supply
Chain & Freight |
|
6,853 |
|
|
5,915 |
|
|
15.9% |
|
|
|
(80) |
|
|
|
6,773 |
|
14.5% |
|
|
|
Total
revenue |
$ |
34,569 |
|
$ |
31,437 |
|
|
10.0% |
|
|
$ |
(386) |
|
|
$ |
34,183 |
|
8.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts
adjusted for period over period foreign currency exchange rate and
hedging differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Neutral Operating
Profit |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
Currency Neutral |
|
|
|
|
|
June 30 |
|
|
|
|
|
|
|
|
|
|
2018* |
|
|
2017 |
|
% Change |
|
Currency |
|
2018** |
|
% Change |
|
|
As-Adjusted Operating profit (in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
1,891 |
|
$ |
2,205 |
|
|
-14.2% |
|
|
$ |
- |
|
|
$ |
1,891 |
|
-14.2% |
|
|
|
International Package |
|
1,248 |
|
|
1,088 |
|
|
14.7% |
|
|
|
(44) |
|
|
|
1,204 |
|
10.7% |
|
|
|
Supply
Chain & Freight |
|
417 |
|
|
361 |
|
|
15.5% |
|
|
|
1 |
|
|
|
418 |
|
15.8% |
|
|
|
Total
operating profit |
$ |
3,556 |
|
$ |
3,654 |
|
|
-2.7% |
|
|
$ |
(43) |
|
|
$ |
3,513 |
|
-3.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts adjusted for
Transformation strategy costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
** Amounts
adjusted for Transformation strategy costs and period over period
foreign currency exchange rate and hedging differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UPS Freight Selected Operating Data - Year to
Date |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|
|
June 30 |
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
Change |
|
% Change |
|
|
|
|
|
|
LTL revenue (in
millions) |
$ |
1,387 |
|
$ |
1,270 |
|
$ |
117 |
|
|
|
9.2% |
|
|
|
|
|
|
|
LTL revenue per LTL
hundredweight |
$ |
25.08 |
|
$ |
23.61 |
|
$ |
1.47 |
|
|
|
6.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL shipments (in
thousands) |
|
5,107 |
|
|
5,149 |
|
|
(42) |
|
|
|
-0.8% |
|
|
|
|
|
|
|
LTL shipments per day
(in thousands) |
|
39.9 |
|
|
40.2 |
|
|
(0.3) |
|
|
|
-0.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL gross weight hauled
(in millions of pounds) |
|
5,531 |
|
|
5,380 |
|
|
151 |
|
|
|
2.8% |
|
|
|
|
|
|
|
LTL weight per shipment
(in pounds) |
|
1,083 |
|
|
1,045 |
|
|
38 |
|
|
|
3.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating weekdays |
|
128 |
|
|
128 |
|
|
- |
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Detail of Other Operating Expenses - Year to
Date |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
Six Months Ended |
|
|
|
|
|
|
June 30 |
|
|
|
|
|
2018 |
|
|
2017 |
|
Change |
|
% Change |
|
Repairs and
Maintenance |
$ |
857 |
|
$ |
782 |
|
$ |
75 |
|
9.6% |
|
|
Depreciation and
Amortization |
|
1,138 |
|
|
1,116 |
|
|
22 |
|
2.0% |
|
|
Purchased
Transportation |
|
6,354 |
|
|
5,159 |
|
|
1,195 |
|
23.2% |
|
|
Fuel |
|
1,602 |
|
|
1,237 |
|
|
365 |
|
29.5% |
|
|
Other Occupancy |
|
682 |
|
|
563 |
|
|
119 |
|
21.1% |
|
|
Other Expenses |
|
2,574 |
|
|
2,331 |
|
|
243 |
|
10.4% |
|
|
Total Other Operating
Expenses |
$ |
13,207 |
|
$ |
11,188 |
|
$ |
2,019 |
|
18.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of Other Pension Income (Expense) -
Year to Date |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
Six Months Ended |
|
|
|
|
|
June 30 |
|
|
|
|
|
2018 |
|
|
2017 |
|
Change |
|
% Change |
|
U.S. Domestic
Package |
$ |
454 |
|
$ |
276 |
|
$ |
178 |
|
64.5% |
|
|
International
Package |
|
40 |
|
|
27 |
|
|
13 |
|
48.1% |
|
|
Supply Chain &
Freight |
|
75 |
|
|
56 |
|
|
19 |
|
33.9% |
|
|
Total other pension
income (expense) |
$ |
569 |
|
$ |
359 |
|
$ |
210 |
|
58.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share and Share Data - Year to
Date |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
(amounts
in millions, except per share data) |
|
|
June 30 |
|
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
|
Net
income |
|
|
$ |
2,830 |
|
$ |
2,550 |
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Weighted-average shares |
|
|
|
861 |
|
|
868 |
|
|
|
Deferred
compensation obligations |
|
|
|
1 |
|
|
1 |
|
|
|
Vested
portion of restricted units |
|
|
|
4 |
|
|
4 |
|
|
|
Denominator for basic
earnings per share |
|
|
|
866 |
|
|
873 |
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive
securities: |
|
|
|
|
|
|
|
|
Restricted units |
|
|
|
3 |
|
|
3 |
|
|
|
Stock
options |
|
|
|
1 |
|
|
1 |
|
|
|
Denominator for diluted
earnings per share |
|
|
|
870 |
|
|
877 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
|
|
$ |
3.27 |
|
$ |
2.92 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
|
$ |
3.25 |
|
$ |
2.91 |
|
|
|
|
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Consolidated Balance Sheets - June 30, 2018
and December 31, 2017 |
(unaudited) |
|
|
|
|
|
|
(amounts in millions) |
|
June 30, |
|
December 31, |
|
|
2018 |
|
2017 |
|
|
ASSETS |
|
|
|
|
|
|
Current
Assets: |
|
|
|
|
|
|
Cash and marketable
securities |
|
$ |
4,934 |
|
$ |
4,069 |
|
|
Other current
assets |
|
|
8,940 |
|
|
11,649 |
|
|
Total
Current Assets |
|
|
13,874 |
|
|
15,718 |
|
|
Property,
Plant and Equipment |
|
|
51,200 |
|
|
48,726 |
|
|
Less accumulated
depreciation and amortization |
|
|
27,299 |
|
|
26,608 |
|
|
|
23,901 |
|
|
22,118 |
|
|
Other
Assets |
|
|
7,448 |
|
|
7,738 |
|
|
$ |
45,223 |
|
$ |
45,574 |
|
|
|
|
|
|
|
LIABILITIES
AND SHAREOWNERS' EQUITY |
|
|
|
|
|
|
Current
Liabilities |
|
$ |
12,487 |
|
$ |
12,886 |
|
|
Long-Term
Debt |
|
|
19,121 |
|
|
20,278 |
|
|
Pension and
Postretirement Benefit Obligations |
|
|
7,026 |
|
|
7,061 |
|
|
Deferred
Taxes, Credits and Other Liabilities |
|
|
4,233 |
|
|
4,325 |
|
|
Shareowners' Equity |
|
|
2,356 |
|
|
1,024 |
|
|
$ |
45,223 |
|
$ |
45,574 |
|
|
|
|
|
|
|
Amounts are
subject to reclassification. |
|
|
|
|
|
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Selected Cash Flow Data |
(unaudited) |
|
|
|
|
Net Increase (Decrease) in Cash and Cash
Equivalents |
|
|
|
|
Preliminary |
|
|
Year-to-Date |
|
(amounts in
millions) |
|
June 30 |
|
Cash flows from
operating activities |
|
$ |
7,200 |
|
|
Cash flows used in
investing activities |
|
|
(2,820) |
|
|
Cash flows used
in financing activities |
|
|
(3,607) |
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(51) |
|
|
Net increase in cash
and cash equivalents |
|
$ |
722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow (non-GAAP
measure) |
|
|
|
|
|
Preliminary |
|
|
Year-to-Date |
|
(amounts in
millions) |
|
June 30 |
|
Cash flows from
operating activities |
|
$ |
7,200 |
|
|
Capital
expenditures |
|
|
(2,849) |
|
|
Proceeds from disposals
of PP&E |
|
|
35 |
|
|
Net change in finance
receivables |
|
|
(4) |
|
|
Other investing
activities |
|
|
(7) |
|
|
Free cash flow (non-GAAP measure) |
$ |
4,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts are subject to
reclassification. |
|
|
|
|
|
United Parcel Service, Inc. |
|
Aircraft Fleet - As of June 30,
2018 |
|
(unaudited) |
|
|
|
|
|
|
|
|
Owned and |
Leases & Charters |
|
|
|
Description |
Capital Leases |
from Others |
On Order |
Under Option |
|
Operating: |
|
|
|
|
|
Boeing 757-200 |
75 |
- |
- |
- |
|
Boeing 767-200 |
- |
2 |
- |
|
|
Boeing 767-300 |
59 |
- |
9 |
- |
|
Boeing 767-300BCF |
3 |
- |
- |
- |
|
Airbus A300-600 |
52 |
- |
- |
- |
|
Boeing MD-11 |
37 |
5 |
- |
- |
|
Boeing 747-400F |
11 |
- |
- |
- |
|
Boeing 747-400BCF |
2 |
- |
- |
- |
|
Boeing 747-8F |
6 |
- |
22 |
- |
|
Other |
- |
315 |
- |
- |
|
|
|
|
|
|
|
Total |
245 |
322 |
31 |
- |
|
|
|
|
|
|
|
Contacts: |
|
|
|
|
|
Steve Gaut, Public
Relations |
|
|
|
|
|
|
404-828-8787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Childress,
Investor Relations |
|
|
|
|
|
|
404-828-7957 |
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