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Strong UPS Execution Drives Positive 3Q Results
  • UPS Revenue Rises 7% on Balanced Shipment Growth and Yield Expansion
  • International Operating Profit Climbs 8.9%; Currency-Neutral Profit* up 20%
  • Daily Export Volume up 19% for 3rd Straight Quarter of Double-Digit Growth
  • U.S. Domestic Revenue up 3.9% on Higher Package Demand and Yields
  • U.S. Operating Profit of $1.2B, Including $50M of Negative Hurricane Impact
  • Supply Chain & Freight Boosts Revenue more than 13%; Profits up 9.7%  
  • Company Lifts Bottom of Guidance Range; Expects Full-Year 2017 Adjusted Earnings Per Share of $5.85 to $6.10

ATLANTA, Oct. 26, 2017 (GLOBE NEWSWIRE) -- UPS (NYSE:UPS) today announced earnings per share of $1.45 for the third quarter.  All three major business units executed well during the quarter.  The company converted accelerating global demand for UPS solutions into solid financial results, despite one less operating day in 3Q 2017.  

Consolidated Results 3Q 2017 3Q 2016
Revenue $15,978 M   $14,928 M
Operating profit $2,035 M $2,034 M
Currency-neutral operating profit* $2,097 M  
Diluted earnings per share $1.45 $1.44

“UPS produced another solid quarter of financial performance, despite the impact of several natural disasters that slowed regional economic activity and damaged infrastructure,” said David Abney, UPS chairman and CEO.  “Our business segments adapted quickly to changing conditions this quarter, taking advantage of market opportunities while minimizing cost and service disruptions from recent events.”

For the total company in 3Q 2017:

  • Revenue increased 7.0%, and currency-neutral revenue* was up 7.1%.
  • Revenue increased in all segments and major product categories, as expanded customer demand spread across the company’s broad product portfolio.
  • Operating profit was $2.0 billion, driven by strong performance in the International and Supply Chain and Freight segments.
  • Year-to-date capital expenditures were $3.7 billion, supporting our investment strategies.
  • This year UPS has paid dividends of nearly $2.1 billion, an increase of 6.4% per share over the prior year, rewarding shareowners with continued strong dividend yield.
  • So far this year the company has repurchased 12.3 million shares for approximately $1.4 billion, reaffirming its commitment to return cash to shareowners.

* See attached reconciliation of non-GAAP currency-neutral revenue and operating profit

U.S. Domestic Segment

The Domestic segment continues to benefit from online retail customer demand for both UPS Next Day Air and Ground services, which drove a 3.9% increase in revenue over 3Q 2016.  The U.S. consumer increasingly prefers to shop online and UPS is benefiting from this trend through its unique portfolio of convenient and economical delivery solutions.  

  3Q 2017 3Q 2016
Revenue $9,649 M   $9,289 M
Operating profit $1,182 M $1,252 M

For the U.S. Domestic segment in 3Q 2017:

  • Revenue increased $360 million or 3.9% over 3Q 2016, driven by Next Day Air and Ground product growth.
  • Next Day Air daily shipments were up 8.0%, as customers continued to select UPS’s reliable, day-definite delivery solutions.
  • Deferred Air daily shipments were down slightly when compared to the strong prior-year growth of more than 10%.
  • Revenue per piece was up 2.0%, while base-rate pricing and higher fuel surcharges offset changes in customer and product mix.
  • Operating profit includes negative impacts from one less operating day, about $50 million from natural disasters, and ongoing initiatives including facility construction and deployment of Saturday operations of nearly $40 million.

International Segment

“Our International segment continued its track record as a growth engine, generating strong top-line and operating-profit growth driven by robust demand for UPS solutions,” said Abney.  “Export shipments grew across all regions as customers took advantage of UPS’s expanded portfolio and enhanced network.” 

  3Q 2017 3Q 2016
Revenue $3,364 M   $3,024 M
Operating profit $627 M $576 M
Currency-neutral operating profit* $689 M  

For the International segment in 3Q 2017:

  • International produced record 3Q operating profit of $627 million, up 8.9%, as the result of broad, accelerated growth combined with expanded yields.
  • Currency-neutral operating profit* increased 20%.
  • The segment reported revenue growth of 11% driven by premium products.
  • Robust Export shipment growth surged 19% per day.  All regions of the world contributed to the expansion. 
  • International Domestic daily shipments increased 5.7%, led by double-digit growth across several European countries.
  • Operating margin continues to lead the industry at 18.6%. 
  • Also highlighted in the quarter was the regulatory approval of UPS joint venture with SF Express, a small-package carrier in China.

* See attached reconciliation of non-GAAP currency-neutral revenue and operating profit

Supply Chain and Freight Segment

The Supply Chain and Freight segment produced record third quarter results with double-digit revenue growth and near double-digit operating profit expansion.  Performance results were driven by revenue-quality improvements combined with structural cost-reduction programs.

  3Q 2017 3Q 2016
Revenue $2,965 M   $2,615 M
Operating profit $226 M $206 M

For the Supply Chain and Freight segment in 3Q 2017:

  • Revenue increased 13% over 3Q 2016, the result of deeper alignment with preferred customers, strengthened revenue management initiatives and improved market conditions.
  • Tonnage gains in Freight Forwarding, UPS Freight and Coyote Logistics contributed to improved top-line results.
  • UPS Freight increased LTL (less-than-truckload) revenue by 9.3% on tonnage growth of 5.5% and LTL revenue per hundredweight gains of 3.6%.
  • Increased customer demand from the retail and aerospace sectors drove the Distribution unit’s revenue and operating profit higher.
  • Total segment operating profit improved 9.7% to $226 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, which would be included in reported (GAAP) results and could be material.

“UPS third-quarter results highlight the flexibility of our business” said Richard Peretz, UPS chief financial officer.  “Our recent performance gives us confidence moving forward as we adapt to evolving, global ecommerce strategies with increased seasonality.  We are executing well on our plans, have a positive outlook for peak and as a result, we are moving higher in our original guidance range.” 

The company’s full-year 2017 adjusted earnings per share guidance includes the following:

  • Momentum in the business will continue, led by the International segment.
  • Focus remains on delivering a successful peak season for customers and investors.
  • Operating penalties for ongoing facility investments and Saturday deployment will be approximately $60 million in the fourth quarter.
  • Currency headwinds will continue to weigh on year-over-year comparisons.
  • The tax rate is expected to be 35% for the 4Q 2017 and excludes 4Q 2016 tax savings of approximately $0.05 per share.

UPS moves 2017 adjusted diluted EPS guidance range to between $5.85 and $6.10, which includes about $400 million, or $0.30 per share of pre-tax currency headwinds.

Conference Call Information
           
UPS CEO David Abney and CFO Richard Peretz will discuss third-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, October 26, 2017.  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 UPS

UPS (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. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the web at ups.com or pressroom.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. 

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 as well as currency-neutral revenue, revenue per piece and operating profit. 

We believe that these non-GAAP measures provide additional meaningful information to assist users of our financial statements in understanding our financial results 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.

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. 


Reconciliation of GAAP and non-GAAP Revenue, Revenue Per Piece and Operating Profit 
(in millions, except Per Piece amounts):
 
Three Months Ended September 30
 
  2017 As-
Reported
(GAAP)
2016 As-
Reported
(GAAP)
% Change
(GAAP)
  Currency
Impact
2017
Currency-
Neutral
(non-
GAAP)
% Change
(non-
GAAP)
Average Revenue Per Piece:              
International Package:              
Domestic $ 6.27 $ 5.90 6.3%      $ (0.27)    $ 6.00 1.7%
Export   29.00   30.35 -4.4%      0.47     29.47 -2.9%
Total International Package $ 16.52 $ 16.21 1.9%    $ 0.06   $ 16.58 2.3%
               
Consolidated $ 10.77 $ 10.49 2.7%    $ 0.01   $ 10.78 2.8%
               
Revenue:              
U.S. Domestic Package   $ 9,649   $ 9,289 3.9%    $ -   $ 9,649 3.9%
International Package   3,364   3,024 11.2%      12     3,376 11.6%
Supply Chain & Freight   2,965   2,615 13.4%      (9)     2,956 13.0%
Total revenue $ 15,978 $ 14,928 7.0%    $ 3   $ 15,981 7.1%
               
Operating Profit:              
U.S. Domestic Package $ 1,182 $ 1,252 -5.6%    $ -   $ 1,182 -5.6%
International Package   627   576 8.9%      62     689 19.6%
Supply Chain & Freight   226   206 9.7%      -     226 9.7%
Total operating profit $ 2,035 $ 2,034 0.0%    $ 62   $ 2,097 3.1%
                         
                         


Nine Months Ended September 30
               
  2017 As-
Reported
(GAAP)
2016 As-
Reported
(GAAP)
% Change
(GAAP)
  Currency
Impact
2017
Currency-
Neutral
(non-
GAAP)
% Change
(non-
GAAP)
Average Revenue Per Piece:              
International Package:              
Domestic  $ 5.99  $ 5.96 0.5%    $ 0.12  $ 6.11 2.5%
Export   28.79   30.72 -6.3%      1.23   30.02 -2.3%
Total International Package $ 16.10 $ 16.43 -2.0%    $ 0.61 $ 16.71 1.7%
               
Consolidated $ 10.68 $ 10.48 1.9%    $ 0.09 $ 10.77 2.8%
               
Revenue:              
U.S. Domestic Package $ 28,929 $ 27,388 5.6%    $ - $ 28,929 5.6%
International Package   9,585   9,015 6.3%      352   9,937 10.2%
Supply Chain & Freight   8,529   7,572 12.6%      15   8,544 12.8%
Total revenue $ 47,043 $ 43,975 7.0%    $ 367 $ 47,410 7.8%
               
Operating Profit:              
U.S. Domestic Package $ 3,653 $ 3,587 1.8%    $ - $ 3,653 1.8%
International Package   1,739   1,763 -1.4%      295   2,034 15.4%
Supply Chain & Freight   643   545 18.0%      1   644 18.2%
Total operating profit $ 6,035 $ 5,895 2.4%    $ 296 $ 6,331 7.4%


   
United Parcel Service, Inc.  
Selected Financial Data - Second Quarter  
(unaudited)  
                     
  Three Months Ended          
  September 30        
    2017       2016     Change   % Change      
(amounts in millions, except per share data)                     
Statement of Income Data:                    
Revenue:                    
U.S. Domestic Package $   9,649     $   9,289     $   360     3.9 %      
International Package     3,364         3,024         340     11.2 %      
Supply Chain & Freight     2,965         2,615         350     13.4 %      
Total revenue     15,978         14,928         1,050     7.0 %      
                     
Operating expenses:                    
Compensation and benefits     8,221         7,857         364     4.6 %      
Other     5,722         5,037         685     13.6 %      
Total operating expenses     13,943         12,894         1,049     8.1 %      
                     
Operating profit:                    
U.S. Domestic Package     1,182         1,252         (70 )   -5.6 %      
International Package     627         576         51     8.9 %      
Supply Chain & Freight     226         206         20     9.7 %      
Total operating profit      2,035         2,034         1     0.0 %      
                     
Other income (expense):                    
Investment income and other     20         13         7     53.8 %      
Interest expense     (111 )       (94 )       (17 )   18.1 %      
Total other income (expense)     (91 )       (81 )       (10 )   12.3 %      
                     
Income before income taxes     1,944         1,953         (9 )   -0.5 %      
                     
Income tax expense     680         683         (3 )   -0.4 %      
                     
Net income  $   1,264     $   1,270     $   (6 )   -0.5 %      
                     
Net income as a percentage of revenue   7.9 %     8.5 %              
                     
Per share amounts:                    
Basic earnings per share $   1.45     $   1.44     $   0.01     0.7 %      
Diluted earnings per share $   1.45     $   1.44     $   0.01     0.7 %      
                     
Weighted-average shares outstanding:                    
Basic     869         880         (11 )   -1.3 %      
Diluted     874         885         (11 )   -1.2 %      
                     

 

   
United Parcel Service, Inc.  
Selected Operating Data - Second Quarter  
(unaudited)  
                     
                     
  Three Months Ended              
  September 30        
    2017     2016   Change   % Change      
                     
Revenue (in millions):                    
U.S. Domestic Package:                    
Next Day Air $   1,767   $   1,706   $   61     3.6 %      
Deferred     1,002       967       35     3.6 %      
Ground     6,880       6,616       264     4.0 %      
Total U.S. Domestic Package     9,649       9,289       360     3.9 %      
International Package:                    
Domestic     673       609       64     10.5 %      
Export     2,556       2,284       272     11.9 %      
Cargo and Other     135       131       4     3.1 %      
Total International Package     3,364       3,024       340     11.2 %      
Supply Chain & Freight:                    
Forwarding and Logistics     1,989       1,735       254     14.6 %      
Freight     778       701       77     11.0 %      
Other     198       179       19     10.6 %      
Total Supply Chain & Freight     2,965       2,615       350     13.4 %      
Consolidated $   15,978   $   14,928   $   1,050     7.0 %      
                     
Consolidated volume (in millions)     1,196       1,162       34     2.9 %      
                     
Operating weekdays     63       64       (1 )   -1.6 %      
                     
Average Daily Package Volume (in thousands):                  
U.S. Domestic Package:                    
Next Day Air     1,470       1,361       109     8.0 %      
Deferred     1,240       1,260       (20 )   -1.6 %      
Ground     13,175       12,743       432     3.4 %      
Total U.S. Domestic Package     15,885       15,364       521     3.4 %      
International Package:                    
Domestic     1,704       1,612       92     5.7 %      
Export     1,399       1,176       223     19.0 %      
Total International Package     3,103       2,788       315     11.3 %      
Consolidated     18,988       18,152       836     4.6 %      
                     
Average Revenue Per Piece:                    
U.S. Domestic Package:                    
Next Day Air $   19.08   $   19.59   $   (0.51 )   -2.6 %      
Deferred     12.83       11.99       0.84     7.0 %      
Ground     8.29       8.11       0.18     2.2 %      
Total U.S. Domestic Package     9.64       9.45       0.19     2.0 %      
International Package:                    
Domestic     6.27       5.90       0.37     6.3 %      
Export     29.00       30.35       (1.35 )   -4.4 %      
Total International Package     16.52       16.21       0.31     1.9 %      
Consolidated $   10.77   $   10.49   $   0.28     2.7 %      
                     

 

 
United Parcel Service, Inc.
Supplemental Analysis of Currency and UPS Freight
                             
Currency Neutral Revenue Per Piece      
(unaudited)      
                             
  Three Months Ended           Currency          
  September 30           Neutral          
    2017     2016   % Change   Currency   2017*   % Change      
                             
Average Revenue Per Piece:                            
International Package:                            
Domestic $   6.27   $   5.90     6.3 %   $   (0.27 )   $   6.00   1.7 %      
Export     29.00       30.35     -4.4 %       0.47         29.47   -2.9 %      
Total International Package $   16.52   $   16.21     1.9 %   $   0.06     $   16.58   2.3 %      
                             
                             
Consolidated $   10.77   $   10.49     2.7 %   $   0.01     $   10.78   2.8 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences              
                             
Currency Neutral Revenue      
(unaudited)      
                         
   Three Months Ended            Currency          
  September 30           Neutral          
    2017     2016   % Change   Currency   2017*   % Change      
Revenue (in millions):                            
U.S. Domestic Package $   9,649   $   9,289     3.9 %   $   -      $   9,649   3.9 %      
International Package     3,364       3,024     11.2 %       12         3,376   11.6 %      
Supply Chain & Freight     2,965       2,615     13.4 %       (9 )       2,956   13.0 %      
Total revenue $   15,978   $  14,928     7.0 %   $   3     $  15,981   7.1 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences              
                             
Currency Neutral Operating Profit      
(unaudited)      
                             
  Three Months Ended           Currency          
  September 30           Neutral          
    2017     2016   % Change   Currency   2017*   % Change      
Operating profit (in millions):                            
U.S. Domestic Package $   1,182   $   1,252     -5.6 %   $   -      $   1,182   -5.6 %      
International Package     627       576     8.9 %       62         689   19.6 %      
Supply Chain & Freight     226       206     9.7 %       -          226   9.7 %      
Total operating profit $   2,035   $   2,034     0.0 %   $   62     $   2,097   3.1 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences              
                             
UPS Freight Selected Operating Data - Third Quarter       
(unaudited)      
                             
  Three Months Ended                      
  September 30                  
    2017     2016   Change   % Change              
LTL revenue (in millions) $   673   $   616   $   57       9.3 %              
LTL revenue per LTL hundredweight $   24.47   $   23.63   $   0.84       3.6 %              
                             
LTL shipments (in thousands)     2,589       2,551       38       1.5 %              
LTL shipments per day (in thousands)     41.1       39.9       1.2       3.0 %              
                             
LTL gross weight hauled (in millions of pounds)     2,750       2,607       143       5.5 %              
LTL weight per shipment (in pounds)     1,062       1,022       40       3.9 %              
                             
Operating weekdays   63     64       (1 )     -1.6 %              
                             

 

   
United Parcel Service, Inc.  
                     
                     
Detail of Other Operating Expenses - Third Quarter  
(unaudited)  
                     
                     
(in millions) Three Months Ended            
  September 30          
    2017     2016   Change   % Change      
Repairs and maintenance $   398   $   386   $   12   3.1 %      
Depreciation and amortization     572       554       18   3.2 %      
Purchased transportation     2,652       2,212       440   19.9 %      
Fuel     636       541       95   17.6 %      
Other occupancy     282       248       34   13.7 %      
Other expenses     1,182       1,096       86   7.8 %      
Total other operating expenses $   5,722   $   5,037   $   685   13.6 %      
                     
                     
                     
Earnings Per Share and Share Data - Third Quarter   
(unaudited)  
                     
                     
      Three Months Ended          
(amounts in millions, except per share data)     September 30          
        2017     2016          
                     
Numerator:                    
Net income     $   1,264   $   1,270          
                     
Denominator:                    
Weighted-average shares         864       876          
Deferred compensation obligations         1       1          
Vested portion of restricted units         4       3          
Denominator for basic earnings per share         869       880          
                     
Effect of dilutive securities:                    
Restricted units         4       4          
Stock options         1       1          
Denominator for diluted earnings per share         874       885          
                     
Basic earnings per share     $   1.45   $   1.44          
                     
Diluted earnings per share     $   1.45   $   1.44          
                     
                     
                     
Detail of shares outstanding as of September 30, 2017:                  
                     
Class A shares         175              
Class B shares         687              
Total shares outstanding         862              
                     

 

 
United Parcel Service, Inc.
Selected Financial Data - Year to Date
(unaudited)
                   
  Nine Months Ended        
  September 30      
    2017       2016     Change   % Change    
(amounts in millions, except per share data)                  
Statement of Income Data:                  
Revenue:                  
U.S. Domestic Package $   28,929     $   27,388     $   1,541     5.6 %    
International Package     9,585         9,015         570     6.3 %    
Supply Chain & Freight     8,529         7,572         957     12.6 %    
Total revenue     47,043         43,975         3,068     7.0 %    
                   
Operating expenses:                  
Compensation and benefits     24,457         23,448         1,009     4.3 %    
Other     16,551         14,632         1,919     13.1 %    
Total operating expenses     41,008         38,080         2,928     7.7 %    
                   
Operating profit:                  
U.S. Domestic Package     3,653         3,587         66     1.8 %    
International Package     1,739         1,763         (24 )   -1.4 %    
Supply Chain & Freight     643         545         98     18.0 %    
Total operating profit     6,035         5,895         140     2.4 %    
                   
Other income (expense):                  
Investment income and other     49         38         11     28.9 %    
Interest expense     (324 )       (281 )       (43 )   15.3 %    
Total other income (expense)     (275 )       (243 )       (32 )   13.2 %    
                   
Income before income taxes     5,760         5,652         108     1.9 %    
                   
Income tax expense     1,954         1,982         (28 )   -1.4 %    
                   
Net income $   3,806     $   3,670     $   136     3.7 %    
                   
Net income as a percentage of revenue   8.1 %     8.3 %            
                   
Per share amounts:                  
Basic earnings per share $   4.36     $   4.15     $   0.21     5.1 %    
Diluted earnings per share $   4.34     $   4.13     $   0.21     5.1 %    
                   
Weighted-average shares outstanding:                  
Basic     872         885         (13 )   -1.5 %    
Diluted     876         889         (13 )   -1.5 %    
                   

 

   
United Parcel Service, Inc.  
Selected Operating Data - Year to Date  
(unaudited)  
                   
  Nine Months Ended            
  September 30      
    2017     2016   Change   % Change    
                   
Revenue (in millions):                  
U.S. Domestic Package:                  
Next Day Air $   5,183   $   4,918   $   265     5.4 %    
Deferred     2,992       2,781       211     7.6 %    
Ground     20,754       19,689       1,065     5.4 %    
Total U.S. Domestic Package     28,929       27,388       1,541     5.6 %    
International Package:                  
Domestic     1,906       1,804       102     5.7 %    
Export     7,298       6,813       485     7.1 %    
Cargo and Other     381       398       (17 )   -4.3 %    
Total International Package     9,585       9,015       570     6.3 %    
Supply Chain & Freight:                  
Forwarding and Logistics     5,709       4,980       729     14.6 %    
Freight     2,240       2,050       190     9.3 %    
Other     580       542       38     7.0 %    
Total Supply Chain & Freight     8,529       7,572       957     12.6 %    
Consolidated $   47,043   $   43,975   $   3,068     7.0 %    
                   
Consolidated volume (in millions)     3,572       3,435       137     4.0 %    
                   
Operating weekdays     191       192       (1 )   -0.5 %    
                   
Average Daily Package Volume (in thousands):                
U.S. Domestic Package:                  
Next Day Air     1,393       1,313       80     6.1 %    
Deferred     1,246       1,195       51     4.3 %    
Ground     13,069       12,652       417     3.3 %    
Total U.S. Domestic Package     15,708       15,160       548     3.6 %    
International Package:                   
Domestic     1,667       1,576       91     5.8 %    
Export     1,327       1,155       172     14.9 %    
Total International Package     2,994       2,731       263     9.6 %    
Consolidated     18,702       17,891       811     4.5 %    
                   
Average Revenue Per Piece:                  
U.S. Domestic Package:                  
Next Day Air $   19.48   $   19.51   $   (0.03 )   -0.2 %    
Deferred     12.57       12.12       0.45     3.7 %    
Ground     8.31       8.11       0.20     2.5 %    
Total U.S. Domestic Package     9.64       9.41       0.23     2.4 %    
International Package:                  
Domestic     5.99       5.96       0.03     0.5 %    
Export     28.79       30.72       (1.93 )   -6.3 %    
Total International Package     16.10       16.43       (0.33 )   -2.0 %    
Consolidated $   10.68   $   10.48   $   0.20     1.9 %    
                   

 

 
United Parcel Service, Inc.
Supplemental Analysis of Currency and UPS Freight
                             
Currency Neutral Revenue Per Piece      
(unaudited)      
                             
  Nine Months Ended           Currency          
  September 30            Neutral          
    2017     2016   % Change   Currency   2017*   % Change      
                             
Average Revenue Per Piece:                            
International Package:                            
Domestic $   5.99   $   5.96     0.5 %   $   0.12     $   6.11   2.5 %      
Export     28.79       30.72     -6.3 %       1.23         30.02   -2.3 %      
Total International Package $   16.10   $   16.43     -2.0 %   $   0.61     $   16.71   1.7 %      
                             
                             
Consolidated $   10.68   $   10.48     1.9 %   $   0.09     $   10.77   2.8 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences              
                             
Currency Neutral Revenue      
(unaudited)      
                             
  Nine Months Ended           Currency          
  September 30            Neutral          
    2017     2016   % Change   Currency   2017*   % Change      
Revenue (in millions):                            
U.S. Domestic Package $   28,929   $  27,388     5.6 %   $   -      $  28,929   5.6 %      
International Package     9,585       9,015     6.3 %       352         9,937   10.2 %      
Supply Chain & Freight     8,529       7,572     12.6 %       15         8,544   12.8 %      
Total revenue $   47,043   $  43,975     7.0 %   $   367     $  47,410   7.8 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences              
                             
Currency Neutral Operating Profit      
(unaudited)      
                             
  Nine Months Ended           Currency          
  September 30            Neutral          
    2017     2016   % Change   Currency   2017*   % Change      
Operating profit (in millions):                            
U.S. Domestic Package $   3,653   $   3,587     1.8 %   $   -      $   3,653   1.8 %      
International Package     1,739       1,763     -1.4 %       295         2,034   15.4 %      
Supply Chain & Freight     643       545     18.0 %       1         644   18.2 %      
Total operating profit $   6,035   $   5,895     2.4 %   $   296     $   6,331   7.4 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences              
                             
UPS Freight Selected Operating Data - Year to Date      
(unaudited)      
                             
  Nine Months Ended                      
  September 30                  
    2017     2016   Change   % Change              
LTL revenue (in millions) $   1,943   $   1,780   $   163       9.2 %              
LTL revenue per LTL hundredweight $   23.90   $   23.46   $   0.44       1.9 %              
                             
LTL shipments (in thousands)     7,739       7,507       232       3.1 %              
LTL shipments per day (in thousands)     40.5       39.1       1.4       3.6 %              
                             
LTL gross weight hauled (in millions of pounds)     8,131       7,589       542       7.1 %              
LTL weight per shipment (in pounds)     1,051       1,011       40       4.0 %              
                             
Operating weekdays   191     192       (1 )     -0.5 %              
                             

 

   
United Parcel Service, Inc.  
                     
                     
Detail of Other Operating Expenses - Year to Date  
(unaudited)  
                     
                     
(in millions) Nine Months Ended              
  September 30          
    2017     2016   Change   % Change      
Repairs and Maintenance $   1,180   $   1,150   $   30   2.6 %      
Depreciation and Amortization     1,688       1,661       27   1.6 %      
Purchased Transportation     7,461       6,306       1,155   18.3 %      
Fuel     1,873       1,480       393   26.6 %      
Other Occupancy     845       762       83   10.9 %      
Other Expenses     3,504       3,273       231   7.1 %      
Total Other Operating Expenses $   16,551   $   14,632   $   1,919   13.1 %      
                     
                     
                     
Earnings Per Share and Share Data - Year to Date  
(unaudited)  
                     
                     
      Nine Months Ended          
(amounts in millions, except per share data)     September 30          
        2017     2016          
                     
Numerator:                    
Net income     $   3,806   $   3,670          
                     
Denominator:                    
Weighted-average shares         867       880          
Deferred compensation obligations         1       1          
Vested portion of restricted units         4       4          
Denominator for basic earnings per share         872       885          
                     
Effect of dilutive securities:                    
Restricted units         3       3          
Stock options         1       1          
Denominator for diluted earnings per share         876       889          
                     
Basic earnings per share     $   4.36   $   4.15          
                     
Diluted earnings per share     $   4.34   $   4.13          
                     

 

 
United Parcel Service, Inc.
Consolidated Balance Sheets - September 30, 2017 and December 31, 2016
(unaudited)
         
             
         
  (amounts in millions)   September 30,   December 31,  
    2017     2016  
ASSETS          
Current Assets:          
Cash and marketable securities   $   4,461   $   4,567  
Other current assets       8,449       9,282  
Total Current Assets       12,910       13,849  
Property, Plant and Equipment       47,204       43,674  
Less accumulated depreciation and amortization       26,216       24,874  
      20,988       18,800  
Other Assets       7,458       7,728  
  $   41,356   $   40,377  
         
LIABILITIES AND SHAREOWNERS' EQUITY          
Current Liabilities   $   12,167   $   11,730  
Long-Term Debt        14,355       12,394  
Pension and Postretirement Benefit Obligations       10,075       12,694  
Deferred Taxes, Credits and Other Liabilities       3,220       3,130  
Shareowners' Equity       1,539       429  
  $   41,356   $   40,377  
         
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)   September 30    
Cash flows from operating activities   $   4,418      
Cash flows used in investing activities       (3,618 )  
Cash flows used in financing activities       (914 )  
Effect of exchange rate changes on cash and cash equivalents       56    
Net (decrease) in cash and cash equivalents   $   (58 )  
       
       
       
         
Reconciliation of Free Cash Flow (non-GAAP measure)  
     
  Preliminary  
  Year-to-Date  
(amounts in millions)   September 30    
Cash flows from operating activities   $   4,418      
Capital expenditures       (3,708 )    
Proceeds from disposals of PP&E       18      
Net change in finance receivables       (1 )    
Other investing activities       20      
Free cash flow (non-GAAP measure)   $   747      
     
     
       
Amounts are subject to reclassification.      

 

   
United Parcel Service, Inc.  
Aircraft Fleet - As of September 30, 2017  
(unaudited)  
           
  Owned and Leases & Charters      
Description Capital Leases from Others On Order Under Option  
Operating:          
Boeing 757-200   75   -    -    -   
Boeing 767-300   59   -    -    -   
Boeing 767-300BCF   2   -    1   -   
Airbus A300-600   52   -    -    -   
Boeing MD-11   37   -    -    -   
Boeing 747-400F   11   -    -    -   
Boeing 747-400BCF   2   -    -    -   
Boeing 747-8F   1   -    13   14  
Other   -    297   -    -   
           
Total   239   297   14   14  
           

 

 

Contacts: Steve Gaut, Public Relations 
  404-828-8787
   
  Scott Childress, Investor Relations
  404-828-7957 


 

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