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UPS Reports 2Q EPS of $1.58 as Revenue Grows Across All Segments

  • U.S. Domestic Operating Profit Jumps 13% and Margin Expands to 14.3%
  • U.S. Domestic Revenue up 8.1% on Strong Air & Ground Product Growth
  • Export Shipments Rise 12% with Gains from all International Regions
  • International Revenue up 2.8%, Currency-Neutral Revenue* 8.3% Higher
  • All Supply Chain & Freight Units Contribute to 12% Revenue Increase
  • Company Reiterates Full-Year 2017 Adjusted EPS Guidance

/EIN News/ -- ATLANTA, July 27, 2017 (GLOBE NEWSWIRE) -- UPS (NYSE:UPS) today announced earnings per share of $1.58 for the second quarter of 2017, an increase of 11% versus the same period in 2016.  The improved earnings per share was due to 7.7% higher revenue.  All three business segments generated more profitable product mix, improved yields and better management of operating costs. 

Consolidated Results 2Q 2017 2Q 2016
Revenue $15,750 M $14,629 M
Operating profit $2,216 M $2,038 M
Currency-neutral operating profit* $2,330 M  
     
Diluted earnings per share $1.58 $1.43
     

“UPS generated great year-over-year revenue gains in the second quarter and we produced solid earnings per share growth, consistent with our plans,” said David Abney, UPS chairman and CEO.  “We continue to invest in our network to expand our capabilities, our market presence and our global reach.”

For the total company in 2Q 2017:

  • Revenue increased 7.7%, currency-neutral revenue* jumped 8.9%.
  • Revenue increased in all segments and major product categories, as expanded customer demand spread across the company’s broad product portfolio.
  • Operating profit was up 8.7% to $2.2 billion driven by strong performance in the U.S. Domestic and Supply Chain and Freight segments.
  • The favorable year-over-year 2Q EPS comparison includes benefits of about $0.10, primarily from fuel and workers’ compensation.
  • Year-to-date capital expenditures to support investment strategies were $2.0 billion.
  • This year, UPS has paid dividends of nearly $1.4 billion, an increase of 6.4% per share over the prior year, rewarding shareowners with continued strong dividend yield.
  • As of June 30, 2017, the company has repurchased 8.4 million shares for more than $900 million, 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 benefitted from growing demand for ecommerce deliveries, which fueled an 8.1% increase in revenue over 2Q 2016.  The U.S. consumer increasingly prefers to shop online and UPS is taking advantage of this trend through its unique portfolio of delivery solutions and industry-leading customer-facing technology. 

  2Q 2017 2Q 2016
Revenue $9,745 M $9,015 M
Operating profit $1,395 M $1,233 M
     

For the U.S. Domestic segment in 2Q 2017:

  • Revenue improved $730 million over 2Q 2016 as ecommerce drove higher demand for UPS Air and Ground products. 
  • Next Day Air and Deferred Air shipments climbed 6.4% and 11% respectively, as customers continued to select UPS’s quick and convenient solutions.
  • Revenue per piece increased solidly across all products and was up 3.0% in total, as the company benefited from base-rate pricing actions and higher fuel surcharges versus 2Q 2016.
  • Operating profit increased more than 13% and operating margin expanded 60 basis points to 14.3%.
  • Operating costs for ongoing initiatives including facility construction and Saturday operations increased costs by about $35 million.

International Segment

The International segment generated solid top-line improvement with increased demand for cross-border shipments.  Export shipments grew across all UPS regions, as customers took advantage of UPS’s expanded portfolio, improved time-in-transit and industry-leading customs brokerage solutions.  The International segment also made several announcements to expand its capacity and local-market presence.

  2Q 2017 2Q 2016
Revenue $3,163 M $3,077 M
Operating profit $583 M $613 M
Currency-neutral operating profit* $697 M  
     

For the International segment in 2Q 2017:

  • Operating margin was industry leading at 18.4%, and operating profit was $583 million, including anticipated currency headwinds of $114 million.
  • Robust export growth continued at 12% led by Europe and Asia.  All regions of the world contributed to the expansion.
  • The segment reported a revenue increase of 2.8% over 2Q 2016, up 8.3% on a currency-neutral* basis.
  • During the quarter, UPS announced an exclusive partnership with Expo 2020 Dubai, created an innovative alliance with S.F. Express – a market-leading Chinese logistics company, and acquired Nightline Logistics, which solidified local market leadership in Ireland.

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

Supply Chain and Freight Segment

“The Supply Chain and Freight segment again showed good momentum this quarter as the teams in each business unit are executing on revenue quality improvements combined with structural cost reduction programs,” Abney said. “This performance shows balanced improvement across all business units as revenue and operating cost initiatives strengthen core performance.”

  2Q 2017 2Q 2016
Revenue $2,842 M $2,537 M
Operating profit $238 M $192 M
     
  • Revenue increased 12% over 2Q 2016 as the company deeply aligned with preferred customers, strengthened revenue management initiatives and market conditions improved across all business units.
  • Tonnage gains in Freight Forwarding and UPS Freight contributed to improved top-line results as economic conditions across non-retail markets continue to strengthen.
  • Retail inventory replenishment and improved aerospace sector performance enhanced the Distribution unit results.
  • Coyote Logistics delivered double-digit revenue growth as the unit continued to gain market share.
  • All business units contributed to segment operating profit expansion of 24%, which included a one-time benefit.

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.

“Second quarter results were in line with our expectations and we are pleased with the progress on our strategic initiatives,” said Richard Peretz, UPS chief financial officer.  “Looking at the second half of the year, our core business performance will continue to produce solid results.” 

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

  • Second half currency headwinds and continued costs for strategic initiatives will weigh on results.
  • One less operating day in 3Q 2017 compared to 3Q 2016 will contribute to relatively flat diluted earnings per share (EPS) growth.
  • The tax rate is expected to be 35% for the second half of 2017 and excludes 4Q 2016 tax savings of approximately $0.05 per share.

UPS reaffirms 2017 adjusted diluted EPS guidance to be between $5.80 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 second-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, July 27, 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 June 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 $ 6.07 -1.3 % $ 0.36 $ 6.35 4.6 %
Export   29.22   31.36 -6.8 %   1.60   30.82 -1.7 %
Total International Package   16.31   16.70 -2.3 %   0.91   17.22 3.1 %
             
Consolidated $ 10.75 $ 10.57 1.7 % $ 0.15 $ 10.90 3.1 %
             
Revenue:            
U.S. Domestic Package $ 9,745 $ 9,015 8.1 % $ - $ 9,745 8.1 %
International Package   3,163   3,077 2.8 %   170   3,333 8.3 %
Supply Chain & Freight   2,842   2,537 12.0 %   14   2,856 12.6 %
Total revenue $ 15,750 $ 14,629 7.7 % $ 184 $ 15,934 8.9 %
             
Operating Profit:            
U.S. Domestic Package $ 1,395 $ 1,233 13.1 % $ - $ 1,395 13.1 %
International Package   583   613 -4.9 %   114   697 13.7 %
Supply Chain & Freight   238   192 24.0 %   -   238 24.0 %
Total operating profit $ 2,216 $ 2,038 8.7 % $ 114 $ 2,330 14.3 %
             
             


Six Months Ended June 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 $ 5.85 $ 5.99 -2.3 % $ 0.32 $ 6.17 3.0 %
Export   28.67   30.90 -7.2 %   1.63   30.30 -1.9 %
Total International Package   15.88   16.54 -4.0 %   0.90   16.78 1.5 %
             
Consolidated $ 10.63 $ 10.48 1.4 % $ 0.15 $ 10.78 2.9 %
             
Revenue:            
U.S. Domestic Package $ 19,280 $ 18,099 6.5 % $ - $ 19,280 6.5 %
International Package   6,221   5,991 3.8 %   340   6,561 9.5 %
Supply Chain & Freight   5,564   4,957 12.2 %   24   5,588 12.7 %
Total revenue $ 31,065 $ 29,047 6.9 % $ 364 $ 31,429 8.2 %
             
Operating Profit:            
U.S. Domestic Package $ 2,471 $ 2,335 5.8 % $ - $ 2,471 5.8 %
International Package   1,112   1,187 -6.3 %   233   1,345 13.3 %
Supply Chain & Freight   417   339 23.0 %   1   418 23.3 %
Total operating profit $ 4,000 $ 3,861 3.6 % $ 234 $ 4,234 9.7 %
             


United Parcel Service, Inc.
Selected Financial Data - Second Quarter
(unaudited)
                   
  Three Months Ended        
  June 30      
    2017       2016     Change   % Change    
(amounts in millions, except per share data)                  
Statement of Income Data:                  
Revenue:                  
U.S. Domestic Package $ 9,745     $ 9,015     $ 730     8.1 %    
International Package   3,163       3,077       86     2.8 %    
Supply Chain & Freight   2,842       2,537       305     12.0 %    
Total revenue   15,750       14,629       1,121     7.7 %    
                   
Operating expenses:                  
Compensation and benefits   8,105       7,738       367     4.7 %    
Other   5,429       4,853       576     11.9 %    
Total operating expenses   13,534       12,591       943     7.5 %    
                   
Operating profit:                  
U.S. Domestic Package   1,395       1,233       162     13.1 %    
International Package   583       613       (30 )   -4.9 %    
Supply Chain & Freight   238       192       46     24.0 %    
Total operating profit   2,216       2,038       178     8.7 %    
                   
Other income (expense):                  
Investment income and other   14       8       6     75.0 %    
Interest expense   (111 )     (94 )     (17 )   18.1 %    
Total other income (expense)   (97 )     (86 )     (11 )   12.8 %    
                   
Income before income taxes   2,119       1,952       167     8.6 %    
                   
Income tax expense   735       683       52     7.6 %    
                   
Net income $ 1,384     $ 1,269     $ 115     9.1 %    
                   
Net income as a percentage of revenue   8.8 %     8.7 %            
                   
Per share amounts:                  
Basic earnings per share $ 1.59     $ 1.43     $ 0.16     11.2 %    
Diluted earnings per share $ 1.58     $ 1.43     $ 0.15     10.5 %    
                   
Weighted-average shares outstanding:                  
Basic   872       886       (14 )   -1.6 %    
Diluted   876       890       (14 )   -1.6 %    
                   

 

United Parcel Service, Inc.
Selected Operating Data - Second Quarter
(unaudited)
                   
  Three Months Ended            
  June 30      
    2017     2016   Change   % Change    
                   
Revenue (in millions):                  
U.S. Domestic Package:                  
Next Day Air $ 1,752   $ 1,637   $ 115     7.0 %    
Deferred   1,020     899     121     13.5 %    
Ground   6,973     6,479     494     7.6 %    
Total U.S. Domestic Package   9,745     9,015     730     8.1 %    
International Package:                  
Domestic   621     621     -     0.0 %    
Export   2,420     2,326     94     4.0 %    
Cargo and Other   122     130     (8 )   -6.2 %    
Total International Package   3,163     3,077     86     2.8 %    
Supply Chain & Freight:                  
Forwarding and Logistics   1,893     1,659     234     14.1 %    
Freight   753     693     60     8.7 %    
Other   196     185     11     6.0 %    
Total Supply Chain & Freight   2,842     2,537     305     12.0 %    
Consolidated $ 15,750   $ 14,629   $ 1,121     7.7 %    
                   
Consolidated volume (in millions)   1,189     1,132     57     5.0 %    
                   
Operating weekdays   64     64     -     0.0 %    
                   
Average Daily Package Volume (in thousands):                
U.S. Domestic Package:                  
Next Day Air   1,395     1,311     84     6.4 %    
Deferred   1,253     1,129     124     11.0 %    
Ground   13,019     12,489     530     4.2 %    
Total U.S. Domestic Package   15,667     14,929     738     4.9 %    
International Package:                  
Domestic   1,619     1,599     20     1.3 %    
Export   1,294     1,159     135     11.6 %    
Total International Package   2,913     2,758     155     5.6 %    
Consolidated   18,580     17,687     893     5.0 %    
                   
Average Revenue Per Piece:                  
U.S. Domestic Package:                  
Next Day Air $ 19.62   $ 19.51   $ 0.11     0.6 %    
Deferred   12.72     12.44     0.28     2.3 %    
Ground   8.37     8.11     0.26     3.2 %    
Total U.S. Domestic Package   9.72     9.44     0.28     3.0 %    
International Package:                  
Domestic   5.99     6.07     (0.08 )   -1.3 %    
Export   29.22     31.36     (2.14 )   -6.8 %    
Total International Package   16.31     16.70     (0.39 )   -2.3 %    
Consolidated $ 10.75   $ 10.57   $ 0.18     1.7 %    
                   

 

United Parcel Service, Inc.
Supplemental Analysis of Currency and UPS Freight
                             
Currency Neutral Revenue Per Piece      
(unaudited)      
                           
  Three Months Ended
June 30
          Currency
Neutral
         
    2017     2016   % Change   Currency   2017*   % Change      
                             
Average Revenue Per Piece:                            
International Package:                            
Domestic $ 5.99   $ 6.07     -1.3 %   $ 0.36     $ 6.35   4.6 %      
Export   29.22     31.36     -6.8 %     1.60       30.82   -1.7 %      
Total International Package $ 16.31   $ 16.70     -2.3 %   $ 0.91     $ 17.22   3.1 %      
                             
                             
Consolidated $ 10.75   $ 10.57     1.7 %   $ 0.15     $ 10.90   3.1 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences
     
                             
Currency Neutral Revenue      
(unaudited)      
                             
  Three Months Ended
June 30
          Currency
Neutral
         
    2017     2016   % Change   Currency   2017*   % Change      
Revenue (in millions):                            
U.S. Domestic Package $ 9,745   $ 9,015     8.1 %   $ -     $ 9,745   8.1 %      
International Package   3,163     3,077     2.8 %     170       3,333   8.3 %      
Supply Chain & Freight   2,842     2,537     12.0 %     14       2,856   12.6 %      
Total revenue $ 15,750   $ 14,629     7.7 %   $ 184     $ 15,934   8.9 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences
     
                             
Currency Neutral Operating Profit      
(unaudited)      
                             
  Three Months Ended
June 30
          Currency
Neutral

         
    2017     2016   % Change   Currency   2017*   % Change      
Operating profit (in millions):                            
U.S. Domestic Package $ 1,395   $ 1,233     13.1 %   $ -     $ 1,395   13.1 %      
International Package   583     613     -4.9 %     114       697   13.7 %      
Supply Chain & Freight   238     192     24.0 %     -       238   24.0 %      
Total operating profit $ 2,216   $ 2,038     8.7 %   $ 114     $ 2,330   14.3 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences
     
                             
Freight Selected Operating Data - Second Quarter       
(unaudited)      
                             
  Three Months Ended                      
  June 30                  
    2017     2016   Change   % Change              
LTL revenue (in millions) $ 652   $ 600   $ 52       8.7 %              
LTL revenue per LTL hundredweight $ 23.62   $ 23.47   $ 0.15       0.6 %              
                             
LTL shipments (in thousands)   2,633     2,540     93       3.7 %              
LTL shipments per day (in thousands)   41.1     39.7     1.4       3.7 %              
                             
LTL gross weight hauled (in millions of pounds)   2,762     2,556     206       8.1 %              
LTL weight per shipment (in pounds)   1,049     1,006     43       4.3 %              
                             
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          
    2017     2016   Change   % Change      
Repairs and maintenance $ 392   $ 383   $ 9   2.3 %      
Depreciation and amortization   562     555     7   1.3 %      
Purchased transportation   2,443     2,070     373   18.0 %      
Fuel   616     505     111   22.0 %      
Other occupancy   264     245     19   7.8 %      
Other expenses   1,152     1,095     57   5.2 %      
Total other operating expenses $ 5,429   $ 4,853   $ 576   11.9 %      
                     
                     
                     
Earnings Per Share and Share Data - Second Quarter   
(unaudited)  
                     
                     
      Three Months Ended          
(amounts in millions, except per share data)     June 30          
        2017     2016          
                     
Numerator:                    
Net income     $ 1,384   $ 1,269          
                     
Denominator:                    
Weighted-average shares       867     881          
Deferred compensation obligations       1     1          
Vested portion of restricted units       4     4          
Denominator for basic earnings per share       872     886          
                     
Effect of dilutive securities:                    
Restricted units       3     3          
Stock options       1     1          
Denominator for diluted earnings per share       876     890          
                     
Basic earnings per share     $ 1.59   $ 1.43          
                     
Diluted earnings per share     $ 1.58   $ 1.43          
                     
                     
                     
Detail of shares outstanding as of June 30, 2017:                  
                     
Class A shares       177              
Class B shares       688              
Total shares outstanding       865              
                     

 

United Parcel Service, Inc.
Selected Financial Data - Year to Date
(unaudited)
                   
  Six Months Ended        
  June 30      
    2017       2016     Change   % Change    
(amounts in millions, except per share data)                  
Statement of Income Data:                  
Revenue:                  
U.S. Domestic Package $ 19,280     $ 18,099     $ 1,181     6.5 %    
International Package   6,221       5,991       230     3.8 %    
Supply Chain & Freight   5,564       4,957       607     12.2 %    
Total revenue   31,065       29,047       2,018     6.9 %    
                   
Operating expenses:                  
Compensation and benefits   16,236       15,591       645     4.1 %    
Other   10,829       9,595       1,234     12.9 %    
Total operating expenses   27,065       25,186       1,879     7.5 %    
                   
Operating profit:                  
U.S. Domestic Package   2,471       2,335       136     5.8 %    
International Package   1,112       1,187       (75 )   -6.3 %    
Supply Chain & Freight   417       339       78     23.0 %    
Total operating profit   4,000       3,861       139     3.6 %    
                   
Other income (expense):                  
Investment income and other   29       25       4     16.0 %    
Interest expense   (213 )     (187 )     (26 )   13.9 %    
Total other income (expense)   (184 )     (162 )     (22 )   13.6 %    
                   
Income before income taxes   3,816       3,699       117     3.2 %    
                   
Income tax expense   1,274       1,299       (25 )   -1.9 %    
                   
Net income $ 2,542     $ 2,400     $ 142     5.9 %    
                   
Net income as a percentage of revenue   8.2 %     8.3 %            
                   
Per share amounts:                  
Basic earnings per share $ 2.91     $ 2.71     $ 0.20     7.4 %    
Diluted earnings per share $ 2.90     $ 2.69     $ 0.21     7.8 %    
                   
Weighted-average shares outstanding:                  
Basic   873       887       (14 )   -1.6 %    
Diluted   877       892       (15 )   -1.7 %    
                   

 

United Parcel Service, Inc.  
Selected Operating Data - Year to Date  
(unaudited)  
                   
  Six Months Ended            
  June 30      
    2017     2016   Change   % Change    
                   
Revenue (in millions):                  
U.S. Domestic Package:                  
Next Day Air $ 3,416   $ 3,212   $ 204     6.4 %    
Deferred   1,990     1,814     176     9.7 %    
Ground   13,874     13,073     801     6.1 %    
Total U.S. Domestic Package   19,280     18,099     1,181     6.5 %    
International Package:                  
Domestic   1,233     1,195     38     3.2 %    
Export   4,742     4,529     213     4.7 %    
Cargo and Other   246     267     (21 )   -7.9 %    
Total International Package   6,221     5,991     230     3.8 %    
Supply Chain & Freight:                  
Forwarding and Logistics   3,720     3,245     475     14.6 %    
Freight   1,462     1,349     113     8.4 %    
Other   382     363     19     5.2 %    
Total Supply Chain & Freight   5,564     4,957     607     12.2 %    
Consolidated $ 31,065   $ 29,047   $ 2,018     6.9 %    
                   
Consolidated volume (in millions)   2,376     2,273     103     4.5 %    
                   
Operating weekdays   128     128     -     0.0 %    
                   
Average Daily Package Volume (in thousands):                
U.S. Domestic Package:                  
Next Day Air   1,356     1,289     67     5.2 %    
Deferred   1,249     1,163     86     7.4 %    
Ground   13,016     12,606     410     3.3 %    
Total U.S. Domestic Package   15,621     15,058     563     3.7 %    
International Package:                  
Domestic   1,648     1,558     90     5.8 %    
Export   1,292     1,145     147     12.8 %    
Total International Package   2,940     2,703     237     8.8 %    
Consolidated   18,561     17,761     800     4.5 %    
                   
Average Revenue Per Piece:                  
U.S. Domestic Package:                  
Next Day Air $ 19.68   $ 19.47   $ 0.21     1.1 %    
Deferred   12.45     12.19     0.26     2.1 %    
Ground   8.33     8.10     0.23     2.8 %    
Total U.S. Domestic Package   9.64     9.39     0.25     2.7 %    
International Package:                  
Domestic   5.85     5.99     (0.14 )   -2.3 %    
Export   28.67     30.90     (2.23 )   -7.2 %    
Total International Package   15.88     16.54     (0.66 )   -4.0 %    
Consolidated $ 10.63   $ 10.48   $ 0.15     1.4 %    
                   

 

United Parcel Service, Inc.
Supplemental Analysis of Currency and UPS Freight
                             
Currency Neutral Revenue Per Piece      
(unaudited)      
                             
  Six Months Ended           Currency 
         
  June 30           Neutral
         
    2017     2016   % Change   Currency   2017*   % Change      
                             
Average Revenue Per Piece:                            
International Package:                            
Domestic $ 5.85   $ 5.99     -2.3 %   $ 0.32     $ 6.17   3.0 %      
Export   28.67     30.90     -7.2 %     1.63       30.30   -1.9 %      
Total International Package $ 15.88   $ 16.54     -4.0 %   $ 0.90     $ 16.78   1.5 %      
                             
                             
Consolidated $ 10.63   $ 10.48     1.4 %   $ 0.15     $ 10.78   2.9 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences      
                             
Currency Neutral Revenue      
(unaudited)      
                             
  Six Months Ended           Currency
         
  June 30           Neutral
         
    2017     2016   % Change   Currency   2017*   % Change      
Revenue (in millions):                            
U.S. Domestic Package $ 19,280   $ 18,099     6.5 %   $ -     $ 19,280   6.5 %      
International Package   6,221     5,991     3.8 %     340       6,561   9.5 %      
Supply Chain & Freight   5,564     4,957     12.2 %     24       5,588   12.7 %      
Total revenue $ 31,065   $ 29,047     6.9 %   $ 364     $ 31,429   8.2 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences      
                             
Currency Neutral Operating Profit      
(unaudited)      
                             
  Six Months Ended           Currency
         
  June 30           Neutral
         
    2017     2016   % Change   Currency   2017*   % Change      
Operating profit (in millions):                            
U.S. Domestic Package $ 2,471   $ 2,335     5.8 %   $ -     $ 2,471   5.8 %      
International Package   1,112     1,187     -6.3 %     233       1,345   13.3 %      
Supply Chain & Freight   417     339     23.0 %     1       418   23.3 %      
Total operating profit $ 4,000   $ 3,861     3.6 %   $ 234     $ 4,234   9.7 %      
                             
* Amounts adjusted for period over period foreign currency exchange rate and hedging differences      
                             
Freight Selected Operating Data - Year to Date      
(unaudited)      
                             
  Six Months Ended                      
  June 30                  
    2017     2016   Change   % Change              
LTL revenue (in millions) $ 1,270   $ 1,164   $ 106       9.1 %              
LTL revenue per LTL hundredweight $ 23.60   $ 23.36   $ 0.24       1.0 %              
                             
LTL shipments (in thousands)   5,150     4,956     194       3.9 %              
LTL shipments per day (in thousands)   40.2     38.7     1.5       3.9 %              
                             
LTL gross weight hauled (in millions of pounds)   5,381     4,982     399       8.0 %              
LTL weight per shipment (in pounds)   1,045     1,005     40       4.0 %              
                             
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          
    2017     2016   Change   % Change      
Repairs and Maintenance $ 782   $ 764   $ 18   2.4 %      
Depreciation and Amortization   1,116     1,107     9   0.8 %      
Purchased Transportation   4,809     4,094     715   17.5 %      
Fuel   1,237     939     298   31.7 %      
Other Occupancy   563     514     49   9.5 %      
Other Expenses   2,322     2,177     145   6.7 %      
Total Other Operating Expenses $ 10,829   $ 9,595   $ 1,234   12.9 %      
                     
                     
Earnings Per Share and Share Data - Year to Date  
(unaudited)  
                     
      Six Months Ended          
(amounts in millions, except per share data)     June 30          
        2017     2016          
                     
Numerator:                    
Net income     $ 2,542   $ 2,400          
                     
Denominator:                    
Weighted-average shares outstanding       868     883          
Deferred compensation arrangements       1     1          
Vested portion of restricted shares       4     3          
Denominator for basic earnings per share       873     887          
                     
Effect of dilutive securities:                    
Restricted shares       3     4          
Stock options       1     1          
Denominator for diluted earnings per share       877     892          
                     
Basic earnings per share     $ 2.91   $ 2.71          
                     
Diluted earnings per share     $ 2.90   $ 2.69          
                     

 

United Parcel Service, Inc.
Consolidated Balance Sheets - June 30, 2017 and December 31, 2016
(unaudited)
         
  (amounts in millions)   June 30,   December 31,  
    2017     2016  
  ASSETS          
  Current Assets:          
  Cash and marketable securities   $ 4,604   $ 4,567  
  Other current assets     7,790     9,282  
  Total Current Assets     12,394     13,849  
  Property, Plant and Equipment     45,588     43,674  
  Less accumulated depreciation and amortization     25,747     24,874  
    19,841     18,800  
  Other Assets     7,489     7,728  
  $ 39,724   $ 40,377  
         
  LIABILITIES AND SHAREOWNERS' EQUITY          
  Current Liabilities   $ 11,082   $ 11,730  
  Long-Term Debt     14,257     12,394  
  Pension and Postretirement Benefit Obligations     9,981     12,694  
  Deferred Taxes, Credits and Other Liabilities     3,130     3,130  
  Shareowners' Equity     1,274     429  
  $ 39,724   $ 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)   June 30    
Cash flows from operating activities   $ 2,621      
Cash flows used in investing activities     (2,027 )  
Cash flows used in financing activities     (556 )  
Effect of exchange rate changes on cash and cash equivalents     30    
Net increase in cash and cash equivalents   $ 68    
       
       
       
         
Reconciliation of Free Cash Flow (non-GAAP measure)  
                       
  Preliminary  
  Year-to-Date  
(amounts in millions)   June 30    
Cash flows from operating activities   $ 2,621      
Capital expenditures     (2,009 )    
Proceeds from disposals of PP&E     14      
Net change in finance receivables     (16 )    
Other investing activities     14      
Free cash flow (non-GAAP measure) $ 624      
     
Amounts are subject to reclassification.

 

United Parcel Service, Inc.  
Aircraft Fleet - As of June 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 1 - 2 -  
Airbus A300-600 52 - - -  
Boeing MD-11* 38 - - -  
Boeing 747-400F 11 - - -  
Boeing 747-400BCF 2 - - -  
Boeing 747-8F - - 14 14  
Other - 302 - -  
           
Total 238 302 16 14  
           
* One Boeing MD-11 not in operation pending disposal
 
           
Contacts:	

Steve Gaut, Public Relations				
404-828-8787

Scott Childress, Investor Relations
404-828-7957

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