United Parcel Service, Inc. Selected Financial Data - Fourth Quarter (unaudited)

Transcription

1 Selected Financial Data - Fourth Quarter (amounts in millions, except per share data) Statement of Income Data: Revenue: U.S. Domestic Package $ 11,835 $ 10,913 $ % International Package 3,753 3, % Supply Chain & Freight 3,241 2, % Total revenue 18,829 16,931 1, % Operating expenses: Compensation and benefits 10,131 11,322 (1,191) -10.5% Other 7,204 6,037 1, % Total operating expenses 17,335 17,359 (24) -0.1% Operating profit: U.S. Domestic Package 627 (570) 1,197 N/A International Package % Supply Chain & Freight 142 (139) 281 N/A Total operating profit 1,494 (428) 1,922 N/A Other income (expense): Investment income and other % Interest expense (129) (100) (29) 29.0% Total other income (expense) (106) (88) (18) 20.5% Income (loss) before income taxes 1,388 (516) 1,904 N/A Income tax expense (benefit) 284 (277) 561 N/A Net income (loss) $ 1,104 $ (239) $ 1,343 N/A Net income (loss) as a percentage of revenue 5.9% -1.4% Per share amounts: Basic earnings (loss) per share $ 1.27 $ (0.27) $ 1.54 N/A Diluted earnings (loss) per share $ 1.27 $ (0.27) $ 1.54 N/A Weighted-average shares outstanding: Basic (9) -1.0% Diluted (4) -0.5% As adjusted income data: Operating profit: U.S. Domestic Package (1) $ 1,264 $ 1,338 (74) -5.5% International Package (1) % Supply Chain & Freight (1) % Total operating profit (1) 2,294 2, % Income before income taxes (1) $ 2,188 $ 2,135 $ % Net income (2) $ 1,453 $ 1,434 $ % Basic earnings per share (2) $ 1.68 $ 1.64 $ % Diluted earnings per share (2) $ 1.67 $ 1.63 $ % (1) 2017 operating profit and consolidated income before income taxes exclude the impact of an increase in pension expense du e to a mark-tomarket loss recognized outside of a 10% corridor of $800 million, allocated between the U.S. Domestic Package segment ($637 m illion), International Package segment ($35 million), and Supply Chain & Freight segment ($128 million) operating profit and consolidated income before income taxes exclude the impact of an increase in pension expense due to a mark-tomarket loss recognized outside of a 10% corridor of $2.651 billion, allocated between the U.S. Domestic Package segment ($ billion), International Package segment ($425 million), and Supply Chain & Freight segment ($318 million). (2) 2017 net income and earnings per share amounts exclude the after -tax impact of the adjustments described in (1), which decreased net income by $607 million net income also excludes income tax benefits of $258 million attributable to the 2017 Tax Cuts a nd Jobs Act net income and earnings per share amounts exclude the after -tax impact of the adjustments described in (1), which decreased net income by $1.673 billion diluted earnings per share is based on weighted -average shares outstanding of 881 million, which includes the effect of 5 million dilutive shares and share equivalents. Certain prior year amounts have been reclassified to conform to the current year presentation. 1 of 11

2 Selected Operating Data - Fourth Quarter Revenue (in millions): Next Day Air $ 1,905 $ 1,834 $ % Deferred 1,429 1, % Ground 8,501 7, % Total U.S. Domestic Package 11,835 10, % Domestic % Export 2,869 2, % Cargo and Other % Total International Package 3,753 3, % Supply Chain & Freight: Forwarding and Logistics 2,272 1, % Freight % Other % Total Supply Chain & Freight 3,241 2, % Consolidated $ 18,829 $ 16,931 $ 1, % Consolidated volume (in millions) 1,515 1, % Operating weekdays % Average Daily Package Volume (in thousands): Next Day Air 1,660 1, % Deferred 1,868 1, % Ground 17,069 16, % Total U.S. Domestic Package 20,597 19,551 1, % Domestic 1,859 1, % Export 1,598 1, % Total International Package 3,457 3, % Consolidated 24,054 22,744 1, % Average Revenue Per Piece: Next Day Air $ $ $ (0.18) -1.0% Deferred % Ground % Total U.S. Domestic Package % Domestic % Export (1.00) -3.4% Total International Package % Consolidated $ $ 9.85 $ % Certain prior year amounts have been reclassified to conform to the current year presentation. 2 of 11

3 Supplemental Analysis of Currency and UPS Freight Currency Revenue Per Piece Currency % Change Currency 2017* % Change Average Revenue Per Piece: Domestic $ 6.31 $ % $ (0.45) $ % Export % % Total International Package $ $ % $ (0.12) $ % Consolidated $ $ % $ (0.02) $ % * Amounts adjusted for period over period foreign currency exchange rate and hedging differences Currency Revenue Currency % Change Currency 2017* % Change Revenue (in millions): U.S. Domestic Package $ 11,835 $ 10, % $ - $ 11, % International Package 3,753 3, % (27) 3, % Supply Chain & Freight 3,241 2, % (25) 3, % Total revenue $ 18,829 $ 16, % $ (52) $ 18, % * Amounts adjusted for period over period foreign currency exchange rate and hedging differences As-Adjusted Currency Operating Profit As-Adjusted Currency 2017* 2016* % Change Currency 2017** % Change As-Adjusted Operating profit (in millions): U.S. Domestic Package $ 1,264 $ 1, % $ - $ 1, % International Package % % Supply Chain & Freight % % Total operating profit $ 2,294 $ 2, % $ 81 $ 2, % * Amounts adjusted for Defined Benefit Plans MTM charges ** Amounts adjusted for Defined Benefit Plans MTM charges and period over period foreign currency exchange rate and hedging differences UPS Freight Selected Operating Data - Fourth Quarter LTL revenue (in millions) $ 653 $ 604 $ % LTL revenue per LTL hundredweight $ $ $ % LTL shipments (in thousands) 2,464 2, % LTL shipments per day (in thousands) % LTL gross weight hauled (in millions of pounds) 2,651 2, % LTL weight per shipment (in pounds) 1,076 1, % Operating weekdays % Certain prior year amounts have been reclassified to conform to the current year presentation. 3 of 11

4 Detail of Other Operating Expenses - Fourth Quarter (in millions) Repairs and maintenance $ 420 $ 388 $ % Depreciation and amortization % Purchased transportation 3,528 2, % Fuel % Other occupancy % Other expenses 1,535 1, % Total other operating expenses $ 7,204 $ 6,037 $ 1, % Earnings Per Share and Share Data - Fourth Quarter (amounts in millions, except per share data) Numerator: Net income (loss) $ 1,104 $ (239) Denominator: Weighted-average shares Deferred compensation obligations 1 1 Vested portion of restricted units 5 5 Denominator for basic earnings (loss) per share Effect of dilutive securities: Restricted units 4 - Stock options 1 - Denominator for diluted earnings (loss) per share Basic earnings (loss) per share $ 1.27 $ (0.27) Diluted earnings (loss) per share $ 1.27 $ (0.27) Detail of shares outstanding as of, 2017: Class A shares 172 Class B shares 687 Total shares outstanding 859 Certain prior year amounts have been reclassified to conform to the current year presentation. 4 of 11

5 Selected Financial Data - Year to Date (amounts in millions, except per share data) Statement of Income Data: Revenue: U.S. Domestic Package $ 40,764 $ 38,301 $ 2, % International Package 13,338 12, % Supply Chain & Freight 11,770 10,255 1, % Total revenue 65,872 60,906 4, % Operating expenses: Compensation and benefits 34,588 34,770 (182) -0.5% Other 23,755 20,669 3, % Total operating expenses 58,343 55,439 2, % Operating profit: U.S. Domestic Package 4,280 3,017 1, % International Package 2,464 2, % Supply Chain & Freight % Total operating profit 7,529 5,467 2, % Other income (expense): Investment income and other % Interest expense (453) (381) (72) 18.9% Total other income (expense) (381) (331) (50) 15.1% Income before income taxes 7,148 5,136 2, % Income tax expense 2,238 1, % Net income $ 4,910 $ 3,431 $ 1, % Net income as a percentage of revenue 7.5% 5.6% Per share amounts: Basic earnings per share $ 5.64 $ 3.89 $ % Diluted earnings per share $ 5.61 $ 3.87 $ % Weighted-average shares outstanding: Basic (12) -1.4% Diluted (12) -1.4% As adjusted income data: Operating profit: U.S. Domestic Package (1) $ 4,917 $ 4,925 $ (8) -0.2% International Package (1) 2,499 2, % Supply Chain & Freight (1) % Total operating profit (1) 8,329 8, % Income before income taxes (1) $ 7,948 $ 7,787 $ % Net income (2) $ 5,259 $ 5,104 $ % Basic earnings per share (2) $ 6.04 $ 5.78 $ % Diluted earnings per share (2) $ 6.01 $ 5.75 $ % (1) 2017 operating profit and consolidated income before income taxes exclude the impact of an increase in pension expense due to a mark-tomarket loss recognized outside of a 10% corridor of $800 million, allocated between the U.S. Domestic Package segment ($637 million), International Package segment ($35 million), and Supply Chain & Freight segment ($128 million) operating profit and consolidated income before income taxes exclude the impact of an increase in pension expense due to a mark-tomarket loss recognized outside of a 10% corridor of $2.651 billion, allocated between the U.S. Domestic Package segment ($1.908 billion), International Package segment ($425 million), and Supply Chain & Freight segment ($318 million). (2) 2017 net income and earnings per share amounts exclude the after-tax impact of the adjustments described in (1), which decreased net income by $607 million net income also excludes income tax benefits of $258 million attributable to the 2017 Tax Cuts and Jobs Act net income and earnings per share amounts exclude the after-tax impact of the adjustments described in (1), which decreased net income by $1.673 billion. Certain prior year amounts have been reclassified to conform to the current year presentation. 5 of 11

6 Selected Operating Data - Year to Date Revenue (in millions): Next Day Air $ 7,088 $ 6,752 $ % Deferred 4,421 4, % Ground 29,255 27,467 1, % Total U.S. Domestic Package 40,764 38,301 2, % Domestic 2,645 2, % Export 10,167 9, % Cargo and Other (9) -1.7% Total International Package 13,338 12, % Supply Chain & Freight: Forwarding and Logistics 7,981 6,793 1, % Freight 2,998 2, % Other % Total Supply Chain & Freight 11,770 10,255 1, % Consolidated $ 65,872 $ 60,906 $ 4, % Consolidated volume (in millions) 5,087 4, % Operating weekdays (1) -0.4% Average Daily Package Volume (in thousands): Next Day Air 1,460 1, % Deferred 1,400 1, % Ground 14,061 13, % Total U.S. Domestic Package 16,921 16, % Domestic 1,714 1, % Export 1,395 1, % Total International Package 3,109 2, % Consolidated 20,030 19, % Average Revenue Per Piece: Next Day Air $ $ $ (0.09) -0.5% Deferred % Ground % Total U.S. Domestic Package % Domestic % Export (1.69) -5.6% Total International Package (0.07) -0.4% Consolidated $ $ $ % Certain prior year amounts have been reclassified to conform to the current year presentation. 6 of 11

7 Supplemental Analysis of Currency and UPS Freight Currency Revenue Per Piece Currency % Change Currency 2017* % Change Average Revenue Per Piece: Domestic $ 6.08 $ % $ (0.03) $ % Export % % Total International Package $ $ % $ 0.41 $ % Consolidated $ $ % $ 0.06 $ % * Amounts adjusted for period over period foreign currency exchange rate and hedging differences Currency Revenue Currency % Change Currency 2017* % Change Revenue (in millions): U.S. Domestic Package $ 40,764 $ 38, % $ - $ 40, % International Package 13,338 12, % , % Supply Chain & Freight 11,770 10, % (10) 11, % Total revenue $ 65,872 $ 60, % $ 315 $ 66, % * Amounts adjusted for period over period foreign currency exchange rate and hedging differences As-Adjusted Currency Operating Profit As-Adjusted Currency 2017* 2016* % Change Currency 2017** % Change As-Adjusted Operating profit (in millions): U.S. Domestic Package $ 4,917 $ 4, % $ - $ 4, % International Package 2,499 2, % 375 2, % Supply Chain & Freight % % Total operating profit $ 8,329 $ 8, % $ 377 $ 8, % * Amounts adjusted for Defined Benefit Plans MTM charges ** Amounts adjusted for Defined Benefit Plans MTM charges and period over period foreign currency exchange rate and hedging differences UPS Freight Selected Operating Data - Year to Date LTL revenue (in millions) $ 2,596 $ 2,384 $ % LTL revenue per LTL hundredweight $ $ $ % LTL shipments (in thousands) 10,203 9, % LTL shipments per day (in thousands) % LTL gross weight hauled (in millions of pounds) 10,782 10, % LTL weight per shipment (in pounds) 1,057 1, % Operating weekdays (1) -0.4% Certain prior year amounts have been reclassified to conform to the current year presentation. 7 of 11

8 Detail of Other Operating Expenses - Year to Date (in millions) Repairs and Maintenance $ 1,600 $ 1,538 $ % Depreciation and Amortization 2,282 2, % Purchased Transportation 10,989 9,129 1, % Fuel 2,690 2, % Other Occupancy 1,155 1, % Other Expenses 5,039 4, % Total Other Operating Expenses $ 23,755 $ 20,669 $ 3, % Earnings Per Share and Share Data - Year to Date (amounts in millions, except per share data) Numerator: Net income $ 4,910 $ 3,431 Denominator: Weighted-average shares Deferred compensation obligations 1 1 Vested portion of restricted units 5 4 Denominator for basic earnings per share Effect of dilutive securities: Restricted units 3 3 Stock options 1 1 Denominator for diluted earnings per share Basic earnings per share $ 5.64 $ 3.89 Diluted earnings per share $ 5.61 $ 3.87 Certain prior year amounts have been reclassified to conform to the current year presentation. 8 of 11

9 Consolidated Balance Sheets -, 2017 and, 2016 (amounts in millions),, ASSETS Current Assets: Cash and marketable securities $ 4,069 $ 4,567 Other current assets 11,479 9,282 Total Current Assets 15,548 13,849 Property, Plant and Equipment 48,726 43,674 Less accumulated depreciation and amortization 26,608 24,874 22,118 18,800 Other Assets 7,737 7,728 $ 45,403 $ 40,377 LIABILITIES AND SHAREOWNERS' EQUITY Current Liabilities $ 12,708 $ 11,730 Long-Term Debt 20,278 12,394 Pension and Postretirement Benefit Obligations 7,061 12,694 Deferred Taxes, Credits and Other Liabilities 4,326 3,130 Shareowners' Equity 1, $ 45,403 $ 40,377 Amounts are subject to reclassification. Certain prior year amounts have been reclassified to conform to the current year presentation. 9 of 11

10 Selected Cash Flow Data Net Increase (Decrease) in Cash and Cash Equivalents Preliminary Year-to-Date (amounts in millions) Cash flows from operating activities $ 1,479 Cash flows used in investing activities (4,975) Cash flows from financing activities 3,287 Effect of exchange rate changes on cash and cash equivalents 53 Net increase (decrease) in cash and cash equivalents $ (156) Reconciliation of Free Cash Flow (non-gaap) Preliminary Year-to-Date (amounts in millions) Cash flows from operating activities $ 1,479 Capital expenditures (5,227) Proceeds from disposals of PP&E 24 Net change in finance receivables 5 Other investing activities 1 Free cash flow (non-gaap) $ (3,718) Discretionary pension contributions 7,291 Free cash flow, excluding discretionary pension contributions (non-gaap) $ 3,573 Amounts are subject to reclassification. 10 of 11

11 Aircraft Fleet - As of, 2017 Owned and Leases & Charters Description Capital Leases from Others On Order Under Option Operating: Boeing Boeing Boeing BCF Airbus A Boeing MD Boeing F Boeing BCF Boeing 747-8F Other Total of 11