UPS (NYSE:UPS) today announced third-quarter 2020 consolidated
revenue of $21.2 billion, a 15.9% increase over the third quarter
of 2019. Consolidated average daily volume increased 13.5%
year over year. Net income was $2.0 billion for the quarter,
11.8% above the same period in 2019, or 10.7% on an adjusted
basis. Operating profit was $2.4 billion, up 11.0% compared
to last year’s third quarter, or 9.9% on an adjusted basis.
Diluted earnings per share was $2.24 and adjusted diluted
earnings per share was $2.28, up 10.1% from the same period last
year. GAAP results include a pre-tax transformation charge of
$44 million, equivalent to $0.04 per share. In the prior year
period, GAAP results included a pre-tax charge for transformation
costs of $63 million, equivalent to $0.06 per diluted
share.
“Our performance highlights the agility of our global
integrated network amid the ongoing challenges of the
pandemic. Our results were fueled by continued strong
outbound demand from Asia and growth from small and medium-sized
businesses,” said Carol Tomé, UPS chief executive officer.
“UPSers are everyday heroes who are keeping the world’s supply
chains moving. I want to thank our team for their ongoing
commitment to our customers and the communities we serve.”
U.S. Domestic Segment
|
3Q 2020 |
Adjusted3Q 2020 |
3Q 2019 |
Adjusted3Q 2019 |
Revenue |
$13,225 M |
|
$11,455 M |
|
Operating profit |
$1,098 M |
$1,133 M |
$1,216 M |
$1,242 M |
- Average daily volume increased 13.8%, with growth across all
products and continued elevated residential demand.
- Operating margin was 8.3%; adjusted operating margin was
8.6%.
International Segment
|
3Q 2020 |
Adjusted3Q 2020 |
3Q 2019 |
Adjusted3Q 2019 |
Revenue |
$4,087 M |
|
$3,494 M |
|
Operating profit |
$966 M |
$972 M |
$667 M |
$693 M |
- Average daily volume grew 12.1%, with double-digit export
volume growth globally and continued strong outbound demand from
Asia.
- Operating margin was 23.6%; adjusted operating margin was
23.8%.
Supply Chain and Freight Segment
|
3Q 2020 |
Adjusted3Q 2020 |
3Q 2019 |
Adjusted3Q 2019 |
Revenue |
$3,926 M |
|
$3,369 M |
|
Operating profit |
$299 M |
$302 M |
$245 M |
$256 M |
- Revenue increased 16.5%, driven by strong freight forwarding
demand out of Asia.
- Operating margin was 7.6%; adjusted operating margin was
7.7%.
* “Adjusted” amounts are non-GAAP financial
measures. See the appendix to this release for a discussion of
non-GAAP financial measures, including a reconciliation to the most
closely correlated GAAP measure.
Outlook
UPS is not providing consolidated revenue and diluted earnings
per share guidance due to the uncertainty around the timing and
pace of the economic recovery. The company is unable to
predict the extent of the business impact or the duration of the
coronavirus pandemic, or reasonably estimate its operating
performance in future quarters.
“Our Better, not Bigger approach had a positive impact on our
performance in the quarter, specifically through the
revenue-quality actions we’ve taken. Additionally, we
recently launched new initiatives to further reduce our costs,”
said Brian Newman, UPS chief financial officer. “Looking
ahead to the fourth quarter, we are collaborating with our
customers and using our proven tools to control volume and ensure
the resiliency of our network. We are focused on delivering a
successful peak and generating cash returns.”
Contacts:UPS Media Relations: 404-828-7123 or pr@ups.comUPS
Investor Relations: 404-828-6059 (option 2) or investor@ups.com
Conference Call Information
UPS CEO Carol Tomé and CFO Brian Newman will discuss
third-quarter results with investors and analysts during a
conference call at 8:30 a.m. ET, October 28, 2020. That call
will be open to others through a live Webcast. To access the
call, go to www.investors.ups.com and click on “Earnings Webcast.”
Additional financial information is included in the detailed
financial schedules being posted on www.investors.ups.com under
“Financials” and as filed with the SEC as an exhibit to our Current
Report on Form 8-K.
About UPS
UPS (NYSE: UPS) is one of the world’s largest package delivery
companies with 2019 revenue of $74 billion, and provides a broad
range of integrated logistics solutions for customers in more than
220 countries and territories. The company’s more than 500,000
employees embrace a strategy that is simply stated and powerfully
executed: Customer First. People Led. Innovation Driven. UPS is
committed to reducing its impact on the environment and supporting
the communities we serve around the world. UPS also takes a strong
and unwavering stance in support of diversity, equality, and
inclusion. The company can be found on the Internet at www.ups.com,
with more information at www.pressroom.ups.com and
www.investors.ups.com.
Forward-Looking Statements
This release, our Annual Report on Form 10-K for the year ended
December 31, 2019 and our other filings with the Securities and
Exchange Commission contain and refer to “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Statements other than those of current or
historical fact, and all statements accompanied by terms such as
“believe,” “project,” “expect,” “estimate,” “assume,” “intend,”
“anticipate,” “target,” “plan,” and variations thereof, and similar
terms, are intended to be forward-looking statements.
Forward-looking statements are made subject to the safe harbor
provisions of the federal securities laws pursuant to Section 27A
of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.
From time to time, we also include forward-looking statements in
other publicly disclosed materials. Such statements may relate to
our intent, belief and current expectations about our strategic
direction, prospects and future results, and give our current
expectations or forecasts of future events; they do not relate
strictly to historical or current facts. Management believes that
these forward-looking statements are reasonable as and when made.
However, caution should be taken not to place undue reliance on any
forward-looking statements because such statements speak only as of
the date when made.
Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from our historical experience, present expectations or anticipated
results. These risks and uncertainties, many of which are outside
of our control, include, but are not limited to: continued
uncertainties related to the impact of the COVID-19 pandemic on our
business and operations, financial condition, financial results and
financial position, our customers and suppliers, and on the global
economy; changes in general economic conditions, in the U.S. or
internationally; significant competition on a local, regional,
national and international basis; changes in our relationships with
our significant customers; changes in the complex and stringent
regulation in the U.S. and internationally (including tax laws and
regulations); increased or more complex physical or data security
requirements; legal, regulatory or market responses to global
climate change; results of negotiations and ratifications of labor
contracts; strikes, work stoppages or slowdowns by our employees;
the effects of changing prices of energy, including gasoline,
diesel and jet fuel, and interruptions in supplies of these
commodities; changes in exchange rates or interest rates;
uncertainty from the expected discontinuance of LIBOR and
transition to any other interest rate benchmark; our ability to
maintain our brand image; breaches in data security; disruptions to
the Internet or our technology infrastructure; interruptions in or
impacts on our business from natural or man-made events or
disasters including terrorist attacks, epidemics or pandemics; our
ability to accurately forecast our future capital investment needs;
exposure to changing economic, political and social developments in
international and emerging markets; changes in business strategy,
government regulations, or economic or market conditions that may
result in impairment of our assets; increases in our expenses or
funding obligations relating to employee health, retiree health
and/or pension benefits; potential additional U.S. or international
tax liabilities; potential claims or litigation related to labor
and employment, personal injury, property damage, business
practices, environmental liability and other matters; our ability
to realize the anticipated benefits from acquisitions, joint
ventures or strategic alliances; our ability to realize the
anticipated benefits from our transformation initiatives; cyclical
and seasonal fluctuations in our operating results; our ability to
manage insurance and claims expenses; and other risks discussed in
our filings with the Securities and Exchange Commission from time
to time, including our Annual Report on Form 10-K for the year
ended December 31, 2019, our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020 and subsequently filed reports. You
should consider the limitations on, and risks associated with,
forward-looking statements and not unduly rely on the accuracy of
information contained in such forward-looking statements. We do not
undertake any obligation to update forward-looking statements to
reflect events, circumstances, changes in expectations, or the
occurrence of unanticipated events after the date of those
statements, except as required by law.
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 "adjusted"
compensation and benefits, operating profit, operating margin,
other income (expense), income before income taxes, income tax
expense, effective tax rate, net income and earnings per share. We
also supplement the reporting of revenue, revenue per piece and
operating profit with non-GAAP measures that exclude the
period-over-period impact of foreign currency exchange rate changes
and hedging activities. Additionally, we periodically
disclose free cash flow, free cash flow excluding discretionary
pension contributions, and capital expenditures including principal
repayments of capital lease obligations. The equivalent measures
determined in accordance with GAAP are also referred to as
"reported" or "unadjusted.”
We believe that these non-GAAP measures provide additional
meaningful information to assist users of our financial statements
in understanding our financial results and 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. These non-GAAP measures are used
internally by management for business unit operating performance
analysis, business unit resource allocation and in connection with
incentive compensation award determinations.
Costs Related to Restructuring Programs; Transformation Strategy
Costs
Adjusted operating profit, operating margin, pre-tax income, net
income and earnings per share exclude the impact of costs related
to restructuring programs, including Transformation strategy
costs.
Impact of Changes in Foreign Currency Exchange Rates and Hedging
Activities
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 amounts 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 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.
Impact of Changes in Pension Discount Rates
Non-GAAP pension discount rate-neutral operating profit excludes
the period over period impact of discount rate changes on pension
service cost. Effective January 1, 2020, we began evaluating our
segments using pension discount rate-neutral operating profit in
addition to our current segment operating profit measure.
Pension discount rate-neutral operating profit is calculated by
discounting the value of benefits attributable to employee service
in the current period utilizing the prior year discount rate
applicable to each of our company-sponsored defined benefit plans.
The difference between this derived amount and the current period
reported service cost is the period over period impact of pension
discount rate movements on operating profit.
Free Cash Flow and Adjusted Capital Expenditures
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. Free cash flow
excluding discretionary pension contributions adds back any
discretionary pension contributions made during the period. We
believe free cash flow, free cash flow excluding discretionary
pension contributions and free cash flow adjusted for principal
repayments of finance lease obligations are important indicators of
how much cash is generated by regular business operations and we
use them as a measure of incremental cash available to invest in
our business, meet our debt obligations and return cash to
shareowners. Additionally, we believe that adjusting capital
expenditures for principal repayments of finance lease obligations
more appropriately reflects the overall cash that we have invested
in capital assets.
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.
Reconciliation of GAAP and Non-GAAP
Income Statement(in millions, except per share
amounts):
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
As-Reported (GAAP) |
|
Transformation Strategy Costs (1) |
|
As-Adjusted (Non-GAAP) |
Operating profit: |
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
1,098 |
|
|
$ |
35 |
|
|
$ |
1,133 |
|
International Package |
|
966 |
|
|
6 |
|
|
972 |
|
Supply Chain & Freight |
|
299 |
|
|
3 |
|
|
302 |
|
Total operating profit |
|
$ |
2,363 |
|
|
$ |
44 |
|
|
$ |
2,407 |
|
|
|
|
|
|
|
|
Income before income
taxes |
|
$ |
2,525 |
|
|
$ |
44 |
|
|
$ |
2,569 |
|
|
|
|
|
|
|
|
Income tax expense |
|
$ |
568 |
|
|
$ |
11 |
|
|
$ |
579 |
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,957 |
|
|
$ |
33 |
|
|
$ |
1,990 |
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
2.24 |
|
|
$ |
0.04 |
|
|
$ |
2.28 |
|
|
|
|
|
|
|
|
(1) Transformation costs of $44 million reflect other
employee benefits costs of $18 million and other costs of $26
million
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
As-Reported (GAAP) |
|
Transformation Strategy Costs (1) |
|
As-Adjusted (Non-GAAP) |
Operating profit: |
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
2,644 |
|
|
$ |
105 |
|
|
$ |
2,749 |
|
International Package |
|
2,288 |
|
|
84 |
|
|
2,372 |
|
Supply Chain & Freight |
|
715 |
|
|
12 |
|
|
727 |
|
Total operating profit |
|
$ |
5,647 |
|
|
$ |
201 |
|
|
$ |
5,848 |
|
|
|
|
|
|
|
|
Income before income
taxes |
|
$ |
6,132 |
|
|
$ |
201 |
|
|
$ |
6,333 |
|
|
|
|
|
|
|
|
Income tax expense |
|
$ |
1,442 |
|
|
$ |
50 |
|
|
$ |
1,492 |
|
|
|
|
|
|
|
|
Net income |
|
$ |
4,690 |
|
|
$ |
151 |
|
|
$ |
4,841 |
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
5.39 |
|
|
$ |
0.17 |
|
|
$ |
5.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Transformation costs of $201 million reflect other
employee benefits costs of $111 million and other costs of $90
million
Reconciliation of GAAP and Non-GAAP
Revenue, Revenue Per Piece, and Adjusted Operating
Profit(in millions, except per piece
amounts):
Three Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 As-Reported
(GAAP) |
|
2019 As-Reported
(GAAP) |
|
% Change (GAAP) |
|
Currency Impact |
|
2020CurrencyNeutral(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
Average Revenue Per
Piece: |
|
|
|
|
|
|
|
|
|
|
|
|
International Package: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
|
$ |
6.61 |
|
|
$ |
6.45 |
|
|
2.5 |
|
% |
|
$ |
(0.18 |
) |
|
$ |
6.43 |
|
|
(0.3 |
) |
% |
Export |
|
28.98 |
|
|
29.06 |
|
|
(0.3 |
) |
% |
|
(0.30 |
) |
|
28.68 |
|
|
(1.3 |
) |
% |
Total International Package |
|
$ |
17.37 |
|
|
$ |
16.92 |
|
|
2.7 |
|
% |
|
$ |
(0.23 |
) |
|
$ |
17.14 |
|
|
1.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
11.06 |
|
|
$ |
11.02 |
|
|
0.4 |
|
% |
|
$ |
(0.03 |
) |
|
$ |
11.03 |
|
|
0.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
13,225 |
|
|
$ |
11,455 |
|
|
15.5 |
|
% |
|
$ |
— |
|
|
$ |
13,225 |
|
|
15.5 |
|
% |
International Package |
|
4,087 |
|
|
3,494 |
|
|
17.0 |
|
% |
|
(54 |
) |
|
4,033 |
|
|
15.4 |
|
% |
Supply Chain & Freight |
|
3,926 |
|
|
3,369 |
|
|
16.5 |
|
% |
|
8 |
|
|
3,934 |
|
|
16.8 |
|
% |
Total revenue |
|
$ |
21,238 |
|
|
$ |
18,318 |
|
|
15.9 |
|
% |
|
$ |
(46 |
) |
|
$ |
21,192 |
|
|
15.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts adjusted for period over period foreign
currency exchange rate and hedging differences
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Currency Impact |
|
2020As-AdjustedCurrencyNeutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
1,133 |
|
|
$ |
1,242 |
|
|
(8.8 |
) |
% |
|
$ |
— |
|
|
$ |
1,133 |
|
|
(8.8 |
) |
% |
International Package |
|
972 |
|
|
693 |
|
|
40.3 |
|
% |
|
(7 |
) |
|
965 |
|
|
39.2 |
|
% |
Supply Chain & Freight |
|
302 |
|
|
256 |
|
|
18.0 |
|
% |
|
2 |
|
|
304 |
|
|
18.8 |
|
% |
Total operating profit |
|
$ |
2,407 |
|
|
$ |
2,191 |
|
|
9.9 |
|
% |
|
$ |
(5 |
) |
|
$ |
2,402 |
|
|
9.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts adjusted for transformation strategy
costs
(2) Amounts adjusted for transformation strategy costs
and period over period foreign currency exchange rate and hedging
differences
Reconciliation of GAAP and Non-GAAP
Revenue, Revenue Per Piece, and Adjusted Operating
Profit(in millions, except per piece
amounts):
Nine Months Ended September 30, |
|
|
2020 As-Reported
(GAAP) |
|
2019 As-Reported
(GAAP) |
|
% Change (GAAP) |
|
Currency Impact |
|
2020Currency
Neutral(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
Average Revenue Per
Piece: |
|
|
|
|
|
|
|
|
|
|
|
|
International Package: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
|
$ |
6.48 |
|
|
$ |
6.52 |
|
|
(0.6 |
) |
% |
|
$ |
0.02 |
|
|
$ |
6.50 |
|
|
(0.3 |
) |
% |
Export |
|
28.63 |
|
|
29.29 |
|
|
(2.3 |
) |
% |
|
(0.02 |
) |
|
28.61 |
|
|
(2.3 |
) |
% |
Total International Package |
|
$ |
16.88 |
|
|
$ |
17.04 |
|
|
(0.9 |
) |
% |
|
$ |
— |
|
|
$ |
16.88 |
|
|
(0.9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
10.85 |
|
|
$ |
11.10 |
|
|
(2.3 |
) |
% |
|
$ |
— |
|
|
$ |
10.85 |
|
|
(2.3 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
37,755 |
|
|
$ |
33,085 |
|
|
14.1 |
|
% |
|
$ |
— |
|
|
$ |
37,755 |
|
|
14.1 |
|
% |
International Package |
|
11,175 |
|
|
10,458 |
|
|
6.9 |
|
% |
|
3 |
|
|
11,178 |
|
|
6.9 |
|
% |
Supply Chain & Freight |
|
10,802 |
|
|
9,983 |
|
|
8.2 |
|
% |
|
108 |
|
|
10,910 |
|
|
9.3 |
|
% |
Total revenue |
|
$ |
59,732 |
|
|
$ |
53,526 |
|
|
11.6 |
|
% |
|
$ |
111 |
|
|
$ |
59,843 |
|
|
11.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts adjusted for period over period foreign
currency exchange rate and hedging differences
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Currency Impact |
|
2020As-AdjustedCurrency
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
2,749 |
|
|
$ |
3,162 |
|
|
(13.1 |
) |
% |
|
$ |
— |
|
|
$ |
2,749 |
|
|
(13.1 |
) |
% |
International Package |
|
2,372 |
|
|
1,970 |
|
|
20.4 |
|
% |
|
(37 |
) |
|
2,335 |
|
|
18.5 |
|
% |
Supply Chain & Freight |
|
727 |
|
|
740 |
|
|
(1.8 |
) |
% |
|
(4 |
) |
|
723 |
|
|
(2.3 |
) |
% |
Total operating profit |
|
$ |
5,848 |
|
|
$ |
5,872 |
|
|
(0.4 |
) |
% |
|
$ |
(41 |
) |
|
$ |
5,807 |
|
|
(1.1 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts adjusted for transformation strategy
costs
(2) Amounts adjusted for transformation strategy costs
and period over period foreign currency exchange rate and hedging
differences
Reconciliation of Non-GAAP Pension
Discount Rate Neutral Operating Profit and
Margin(in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Pension |
|
2020As-AdjustedPension
Discount Rate
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
1,133 |
|
|
$ |
1,242 |
|
|
(8.8 |
) |
% |
|
$ |
63 |
|
|
$ |
1,196 |
|
|
(3.7 |
) |
% |
International Package |
|
972 |
|
|
693 |
|
|
40.3 |
|
% |
|
4 |
|
|
976 |
|
|
40.8 |
|
% |
Supply Chain & Freight |
|
302 |
|
|
256 |
|
|
18.0 |
|
% |
|
7 |
|
|
309 |
|
|
20.7 |
|
% |
Total operating profit |
|
$ |
2,407 |
|
|
$ |
2,191 |
|
|
9.9 |
|
% |
|
$ |
74 |
|
|
$ |
2,481 |
|
|
13.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Pension |
|
2020As-AdjustedPension
Discount Rate
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
margin: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
8.6 |
% |
|
10.8 |
% |
|
(2.2 |
) |
% |
|
0.4 |
% |
|
9.0 |
% |
|
(1.8 |
) |
% |
International Package |
|
23.8 |
% |
|
19.8 |
% |
|
4.0 |
|
% |
|
0.1 |
% |
|
23.9 |
% |
|
4.1 |
|
% |
Supply Chain & Freight |
|
7.7 |
% |
|
7.6 |
% |
|
0.1 |
|
% |
|
0.2 |
% |
|
7.9 |
% |
|
0.3 |
|
% |
Total operating margin |
|
11.3 |
% |
|
12.0 |
% |
|
(0.7 |
) |
% |
|
0.4 |
% |
|
11.7 |
% |
|
(0.3 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts adjusted for transformation strategy
costs
(2) Amounts adjusted for transformation strategy cost
and period over period impact of discount rates on pension service
cost
Reconciliation of Non-GAAP Pension
Discount Rate Neutral Operating Profit and
Margin(in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Pension |
|
2020As-AdjustedPension
Discount Rate
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
2,749 |
|
|
$ |
3,162 |
|
|
(13.1 |
) |
% |
|
$ |
188 |
|
|
$ |
2,937 |
|
|
(7.1 |
) |
% |
International Package |
|
2,372 |
|
|
1,970 |
|
|
20.4 |
|
% |
|
12 |
|
|
2,384 |
|
|
21.0 |
|
% |
Supply Chain & Freight |
|
727 |
|
|
740 |
|
|
(1.8 |
) |
% |
|
21 |
|
|
748 |
|
|
1.1 |
|
% |
Total operating profit |
|
$ |
5,848 |
|
|
$ |
5,872 |
|
|
(0.4 |
) |
% |
|
$ |
221 |
|
|
$ |
6,069 |
|
|
3.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Pension |
|
2020As-AdjustedPension
Discount Rate
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
7.3 |
% |
|
9.6 |
% |
|
(2.3 |
) |
% |
|
0.5 |
% |
|
7.8 |
% |
|
(1.8 |
) |
% |
International Package |
|
21.2 |
% |
|
18.8 |
% |
|
2.4 |
|
% |
|
0.1 |
% |
|
21.3 |
% |
|
2.5 |
|
% |
Supply Chain & Freight |
|
6.7 |
% |
|
7.4 |
% |
|
(0.7 |
) |
% |
|
0.2 |
% |
|
6.9 |
% |
|
(0.5 |
) |
% |
Total operating margin |
|
9.8 |
% |
|
11.0 |
% |
|
(1.2 |
) |
% |
|
0.4 |
% |
|
10.2 |
% |
|
(0.8 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts adjusted for transformation strategy
costs
(2) Amounts adjusted for transformation strategy costs
and period over period impact of discount rates on pension service
cost
Reconciliation of Adjusted Capital
Expenditures and Free Cash Flow (Non-GAAP
measures)(in millions):
|
|
|
Nine Months Ended September 30, |
|
|
2020 |
Cash flows from operating activities |
|
$ |
9,283 |
|
|
Capital expenditures |
|
(3,219 |
) |
|
Principal repayments of finance lease obligations |
|
(136 |
) |
|
Adjusted Capital Expenditures
(Non-GAAP measure) |
|
$ |
(3,355 |
) |
|
Proceeds from disposals of
PP&E |
|
10 |
|
|
Net change in finance
receivables |
|
24 |
|
|
Other investing
activities |
|
(15 |
) |
|
Adjusted Free Cash Flow (Non-GAAP measure) |
|
$ |
5,947 |
|
|
Discretionary pension contributions |
|
1,000 |
|
|
Adjusted Free cash flow (Non-GAAP measure) excluding discretionary
pension contributions |
|
$ |
6,947 |
|
|
|
|
|
|
|
|
Amounts are subject to reclassification.
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