Add after last graph of release:
The corrected release reads:
UPS ANNOUNCES CHANGE IN PENSION ACCOUNTING METHOD
Adopts Simpler, More Transparent Mark-to-Market Methodology
UPS (NYSE:UPS) today announced an accounting change relating to expense recognition for company-sponsored pension and postretirement benefit plans. The new method, adopted in the fourth quarter of 2011, will result in simpler, more transparent financial reporting.
Today's announcement is an accounting change only and does not affect benefits for plan participants. Additionally, there is no impact on pension plan funding or UPS cash flow.
This improved methodology records actuarial gains and losses, on the income statement, in the year incurred rather than amortizing them over time. A mark-to-market adjustment will be made in the fourth quarter of each year reflecting actuarial gains or losses that fall outside a recognition corridor (10% of the greater of plan assets or benefit obligations). These gains or losses result from changes in discount rates, the reconciliation to actual return on plan assets and other actuarial assumptions.
UPS will continue to record service costs, interest costs and expected return on assets at the business segment level. The projected impact of these items will be included in the company's annual guidance.
This methodology is fully acceptable under U.S. GAAP and is considered preferable since it aligns closer with fair value principles and does not delay the recognition of gains and losses into future periods.
UPS expects to record a pre-tax $827 million charge for the 2011 mark-to-market adjustment. On a GAAP basis, diluted earnings per share for the fourth quarter and total year will be reduced by $0.51 and $0.41, respectively which is inclusive of both the mark-to-market adjustment and the benefit resulting from the accounting change.
The accounting change is expected to add $0.03 to adjusted diluted earnings per share for the fourth quarter and $0.12 for the full year 2011.
"This policy provides greater transparency to the company's underlying operating results," said Kurt Kuehn, UPS's chief financial officer. "I want to emphasize that this change has no impact on benefits for plan participants or UPS cash flow."
The adoption of the new methodology must be applied retrospectively to prior periods. Today at 1:00 p.m. EST, the company will be hosting a conference call to discuss the change. Restated selected financial data and the details for today's call are available on the UPS Investor Relations website, www.investors.ups.com.
UPS (NYSE:UPS) is a global leader in logistics, offering a broad range of solutions including the transportation of packages and freight; the facilitation of international trade, and the deployment of 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 and its corporate blog can be found at blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS.
EDITOR'S NOTE:
UPS CFO Kurt Kuehn and Andy Dolny, Treasurer and IRO, will discuss the pension accounting change with investors and analysts during a conference call and presentation at 1:00 p.m. EST today. That call is open to listeners through a live Webcast. To access the call, go to www.investors.ups.com and click on "Pension Accounting Presentation."
UPS routinely posts investor announcements on its web site -- www.investors.ups.com -- and encourages those interested in the company to check there frequently.
Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company's strategic directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, our competitive environment, increased security requirements, strikes, work stoppages and slowdowns, changes in energy prices, governmental regulations and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated herein by reference.
United Parcel Service, Inc. | |||||||||||||||||||||||||||||||||||
Selected Financial Data - Quarterly 2011 | |||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||
(inclusive of change in pension accounting) | |||||||||||||||||||||||||||||||||||
Q1 2011 | Q2 2011 | Q3 2011 | Q4 2011 | 2011 | Q1 2011 | Q2 2011 | Q3 2011 | Q4 2011 | 2011 | ||||||||||||||||||||||||||
(amounts in millions, except per share data) | |||||||||||||||||||||||||||||||||||
Statement of Income Data: | |||||||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||
U.S. Domestic Package | $ | 7,543 | $ | 7,737 | $ | 7,767 | $ | 23,047 | 6.2 | % | 6.4 | % | 6.5 | % | 6.4 | % | |||||||||||||||||||
International Package | 2,900 | 3,139 | 3,057 | 9,096 | 9.9 | % | 13.3 | % | 14.2 | % | 12.5 | % | |||||||||||||||||||||||
Supply Chain & Freight | 2,139 | 2,315 | 2,342 | 6,796 | 7.6 | % | 7.0 | % | 5.3 | % | 6.6 | % | |||||||||||||||||||||||
Total revenue | 12,582 | 13,191 | 13,166 | 38,939 | 7.3 | % | 8.1 | % | 8.0 | % | 7.8 | % | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Compensation and benefits | 6,562 | 6,636 | 6,647 | 19,845 | -0.1 | % | 1.4 | % | 3.2 | % | 1.5 | % | |||||||||||||||||||||||
Other | 4,548 | 4,810 | 4,853 | 14,211 | 9.7 | % | 12.2 | % | 16.5 | % | 12.8 | % | |||||||||||||||||||||||
Total operating expenses | 11,110 | 11,446 | 11,500 | 34,056 | 3.7 | % | 5.7 | % | 8.4 | % | 5.9 | % | |||||||||||||||||||||||
Operating profit: | |||||||||||||||||||||||||||||||||||
U.S. Domestic Package | 880 | 997 | 1,046 | 2,923 | 64.2 | % | 38.1 | % | 5.2 | % | 29.8 | % | |||||||||||||||||||||||
International Package | 453 | 505 | 417 | 1,375 | 7.9 | % | -1.6 | % | 1.5 | % | 2.3 | % | |||||||||||||||||||||||
Supply Chain & Freight | 139 | 243 | 203 | 585 | 148.2 | % | 78.7 | % | 12.2 | % | 56.8 | % | |||||||||||||||||||||||
Total operating profit | 1,472 | 1,745 | 1,666 | 4,883 | 45.5 | % | 27.3 | % | 5.0 | % | 23.0 | % | |||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||||||||
Investment income | 11 | 9 | 16 | 36 | N/A | N/A | 6.7 | % | N/A | ||||||||||||||||||||||||||
Interest expense | (85 | ) | (83 | ) | (84 | ) | (252 | ) | 0.0 | % | -1.2 | % | -7.7 | % | -3.1 | % | |||||||||||||||||||
Total other income (expense) | (74 | ) | (74 | ) | (68 | ) | (216 | ) | -16.9 | % | -27.5 | % | -10.5 | % | -19.1 | % | |||||||||||||||||||
Income before income taxes | 1,398 | 1,671 | 1,598 | 4,667 | 51.5 | % | 31.7 | % | 5.8 | % | 26.1 | % | |||||||||||||||||||||||
Income tax expense | 483 | 579 | 526 | 1,588 | 18.4 | % | 30.7 | % | -2.2 | % | 14.3 | % | |||||||||||||||||||||||
Net income | $ | 915 | $ | 1,092 | $ | 1,072 | $ | 3,079 | 77.7 | % | 32.2 | % | 10.3 | % | 33.1 | % | |||||||||||||||||||
Per share amounts | |||||||||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.92 | $ | 1.11 | $ | 1.10 | $ | 3.14 | 76.9 | % | 33.7 | % | 12.2 | % | 34.8 | % | |||||||||||||||||||
Diluted earnings per share | $ | 0.91 | $ | 1.09 | $ | 1.09 | $ | 3.11 | 78.4 | % | 32.9 | % | 12.4 | % | 35.2 | % | |||||||||||||||||||
Dividends declared per share | $ | 0.52 | $ | 0.52 | $ | 0.52 | $ | 1.56 | 10.6 | % | 10.6 | % | 10.6 | % | 10.6 | % | |||||||||||||||||||
Weighted-Average Shares Outstanding | |||||||||||||||||||||||||||||||||||
Basic | 992 | 988 | 977 | 981 | -0.3 | % | -0.6 | % | -1.7 | % | -0.5 | % | |||||||||||||||||||||||
Diluted | 1,002 | 998 | 987 | 991 | -0.2 | % | -0.5 | % | -1.7 | % | -0.5 | % | |||||||||||||||||||||||
As Adjusted Income Data: | |||||||||||||||||||||||||||||||||||
Operating profit: | |||||||||||||||||||||||||||||||||||
U.S. Domestic Package (1) | $ | 880 | $ | 1,012 | $ | 1,046 | $ | 2,938 | 38.8 | % | 40.2 | % | 18.2 | % | 31.1 | % | |||||||||||||||||||
International Package (1) | 453 | 505 | 417 | 1,375 | 7.9 | % | -1.6 | % | 1.5 | % | 2.3 | % | |||||||||||||||||||||||
Supply Chain & Freight (1) | 139 | 195 | 203 | 537 | 47.9 | % | 43.4 | % | 12.2 | % | 30.7 | % | |||||||||||||||||||||||
Total operating profit | $ | 1,472 | $ | 1,712 | $ | 1,666 | $ | 4,850 | 28.2 | % | 24.9 | % | 12.8 | % | 21.4 | % | |||||||||||||||||||
Income before income taxes (1) | $ | 1,398 | $ | 1,638 | $ | 1,598 | $ | 4,634 | 32.0 | % | 29.1 | % | 14.1 | % | 24.3 | % | |||||||||||||||||||
Net income (2) | $ | 915 | $ | 1,072 | $ | 1,072 | $ | 3,059 | 32.6 | % | 29.8 | % | 17.7 | % | 26.0 | % | |||||||||||||||||||
Basic earnings per share (2) | $ | 0.92 | $ | 1.09 | $ | 1.10 | $ | 3.12 | 33.3 | % | 31.3 | % | 19.6 | % | 27.9 | % | |||||||||||||||||||
Diluted earnings per share (2) | $ | 0.91 | $ | 1.07 | $ | 1.09 | $ | 3.09 | 31.9 | % | 30.5 | % | 19.8 | % | 27.7 | % | |||||||||||||||||||
(1) Second quarter 2011 operating profit and consolidated income before income taxes exclude the impact of gains and losses on certain real estate transactions, including a $15 million loss for the U.S. Domestic Package segment and a $48 million gain in the Supply Chain & Freight segment. | |||||||||||||||||||||||||||||||||||
(2) Second quarter 2011 net income and earnings per share amounts exclude the after-tax impact of the U.S. Domestic Package and | |||||||||||||||||||||||||||||||||||
Supply Chain & Freight real estate transactions described in (1), which totaled a combined $20 million. | |||||||||||||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. | |||||||||||||||||||||||||||||||||||
United Parcel Service, Inc. | ||||||||||||||||||||||||||||||||||||||
Selected Financial Data - Quarterly 2010 | ||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
(inclusive of change in pension accounting) | ||||||||||||||||||||||||||||||||||||||
Q1 2010 | Q2 2010 | Q3 2010 | Q4 2010 | 2010 | Q1 2010 | Q2 2010 | Q3 2010 | Q4 2010 | 2010 | |||||||||||||||||||||||||||||
(amounts in millions, except per share data) | ||||||||||||||||||||||||||||||||||||||
Statement of Income Data: | ||||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
U.S. Domestic Package | $ | 7,102 | $ | 7,269 | $ | 7,291 | $ | 8,080 | $ | 29,742 | 2.2 | % | 7.1 | % | 6.2 | % | 7.0 | % | 5.6 | % | ||||||||||||||||||
International Package | 2,639 | 2,771 | 2,676 | 3,047 | 11,133 | 17.8 | % | 23.4 | % | 10.5 | % | 9.2 | % | 14.8 | % | |||||||||||||||||||||||
Supply Chain & Freight | 1,987 | 2,164 | 2,225 | 2,294 | 8,670 | 13.6 | % | 20.6 | % | 19.4 | % | 12.8 | % | 16.5 | % | |||||||||||||||||||||||
Total revenue | 11,728 | 12,204 | 12,192 | 13,421 | 49,545 | 7.2 | % | 12.7 | % | 9.3 | % | 8.4 | % | 9.4 | % | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Compensation and benefits | 6,569 | 6,546 | 6,441 | 7,001 | 26,557 | 2.6 | % | 2.3 | % | 0.5 | % | 4.2 | % | 2.4 | % | |||||||||||||||||||||||
Other | 4,147 | 4,287 | 4,165 | 4,748 | 17,347 | 6.7 | % | 19.0 | % | 7.3 | % | 6.0 | % | 9.4 | % | |||||||||||||||||||||||
Total operating expenses | 10,716 | 10,833 | 10,606 | 11,749 | 43,904 | 4.1 | % | 8.3 | % | 3.0 | % | 4.9 | % | 5.1 | % | |||||||||||||||||||||||
Operating profit: | ||||||||||||||||||||||||||||||||||||||
U.S. Domestic Package | 536 | 722 | 994 | 986 | 3,238 | 62.9 | % | 71.1 | % | 117.0 | % | 38.9 | % | 68.7 | % | |||||||||||||||||||||||
International Package | 420 | 513 | 411 | 487 | 1,831 | 52.2 | % | 86.5 | % | 39.3 | % | 12.5 | % | 43.2 | % | |||||||||||||||||||||||
Supply Chain & Freight | 56 | 136 | 181 | 199 | 572 | 30.2 | % | 4.6 | % | 70.8 | % | N/A | 84.5 | % | ||||||||||||||||||||||||
Total operating profit | 1,012 | 1,371 | 1,586 | 1,672 | 5,641 | 56.2 | % | 65.8 | % | 84.6 | % | 42.4 | % | 60.8 | % | |||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||||
Investment income (loss) | (4 | ) | (18 | ) | 15 | 10 | 3 | N/A | -18.2 | % | 150.0 | % | -23.1 | % | -70.0 | % | ||||||||||||||||||||||
Interest expense | (85 | ) | (84 | ) | (91 | ) | (94 | ) | (354 | ) | 3.7 | % | -53.6 | % | -2.2 | % | 5.6 | % | -20.4 | % | ||||||||||||||||||
Total other income (expense) | (89 | ) | (102 | ) | (76 | ) | (84 | ) | (351 | ) | 29.0 | % | -49.8 | % | -12.6 | % | 10.5 | % | -19.3 | % | ||||||||||||||||||
Income before income taxes | 923 | 1,269 | 1,510 | 1,588 | 5,290 | 59.4 | % | 103.4 | % | 95.6 | % | 44.6 | % | 72.1 | % | |||||||||||||||||||||||
Income tax expense | 408 | 443 | 538 | 563 | 1,952 | 84.6 | % | 99.5 | % | 101.5 | % | 42.5 | % | 76.7 | % | |||||||||||||||||||||||
Net income | $ | 515 | $ | 826 | $ | 972 | $ | 1,025 | $ | 3,338 | 43.9 | % | 105.5 | % | 92.5 | % | 45.8 | % | 69.6 | % | ||||||||||||||||||
Per share amounts | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.52 | $ | 0.83 | $ | 0.98 | $ | 1.03 | $ | 3.36 | 44.4 | % | 107.5 | % | 92.2 | % | 45.1 | % | 70.6 | % | ||||||||||||||||||
Diluted earnings per share | $ | 0.51 | $ | 0.82 | $ | 0.97 | $ | 1.02 | $ | 3.33 | 41.7 | % | 105.0 | % | 94.0 | % | 45.7 | % | 69.9 | % | ||||||||||||||||||
Dividends declared per share | $ | 0.47 | $ | 0.47 | $ | 0.47 | $ | 0.47 | $ | 1.88 | 4.4 | % | 4.4 | % | 4.4 | % | 4.4 | % | 4.4 | % | ||||||||||||||||||
Weighted-Average Shares Outstanding | ||||||||||||||||||||||||||||||||||||||
Basic | 995 | 994 | 994 | 994 | 994 | -0.2 | % | -0.4 | % | -0.3 | % | -0.3 | % | -0.4 | % | |||||||||||||||||||||||
Diluted | 1,004 | 1,003 | 1,004 | 1,004 | 1,003 | 0.1 | % | -0.1 | % | 0.0 | % | 0.0 | % | -0.1 | % | |||||||||||||||||||||||
As Adjusted Income Data: | ||||||||||||||||||||||||||||||||||||||
Operating profit: | ||||||||||||||||||||||||||||||||||||||
U.S. Domestic Package (1), (2) | $ | 634 | $ | 722 | $ | 885 | $ | 1,017 | $ | 3,258 | 24.3 | % | 71.1 | % | 93.2 | % | 43.2 | % | 55.1 | % | ||||||||||||||||||
International Package (1) | 420 | 513 | 411 | 529 | 1,873 | 52.2 | % | 86.5 | % | 39.3 | % | 17.8 | % | 44.6 | % | |||||||||||||||||||||||
Supply Chain & Freight (1), (3) | 94 | 136 | 181 | 180 | 591 | 118.6 | % | 4.6 | % | 70.8 | % | N/A | 90.6 | % | ||||||||||||||||||||||||
Total operating profit | $ | 1,148 | $ | 1,371 | $ | 1,477 | $ | 1,726 | $ | 5,722 | 38.5 | % | 65.8 | % | 71.9 | % | 45.0 | % | 54.4 | % | ||||||||||||||||||
Income before income taxes (1), (2), (3) | $ | 1,059 | $ | 1,269 | $ | 1,401 | $ | 1,642 | $ | 5,371 | 39.3 | % | 81.0 | % | 81.5 | % | 47.4 | % | 60.5 | % | ||||||||||||||||||
Net income (4) | $ | 690 | $ | 826 | $ | 911 | $ | 1,068 | $ | 3,495 | 45.6 | % | 83.6 | % | 80.4 | % | 49.6 | % | 63.1 | % | ||||||||||||||||||
Basic earnings per share (4) | $ | 0.69 | $ | 0.83 | $ | 0.92 | $ | 1.07 | $ | 3.52 | 43.8 | % | 84.4 | % | 80.4 | % | 48.6 | % | 63.7 | % | ||||||||||||||||||
Diluted earnings per share (4) | $ | 0.69 | $ | 0.82 | $ | 0.91 | $ | 1.06 | $ | 3.48 | 46.8 | % | 82.2 | % | 82.0 | % | 49.3 | % | 63.4 | % | ||||||||||||||||||
(1) Fourth quarter operating profit and consolidated income before income taxes exclude the impact of the pension mark-to-market loss related to pension expense recognized outside of a 10% corridor of $112 million, allocated between U.S. Domestic Package segment ($31 million), International Package segment ($42 million), and Supply Chain & Freight segment ($39 million). | ||||||||||||||||||||||||||||||||||||||
(2) First quarter U.S. Domestic Package operating profit and consolidated income before income taxes exclude a $98 million restructuring charge related to the reorganization of our domestic management structure. This charge reflects the value of voluntary retirement benefits, severance benefits and unvested stock compensation. Third quarter U.S. Domestic Package operating profit and consolidated income before income taxes exclude a $109 million gain on the sale of real estate. | ||||||||||||||||||||||||||||||||||||||
(3) First quarter Supply Chain & Freight operating profit and consolidated income before income taxes exclude a $38 million loss on the sale of a specialized transportation business in Germany. Additionally, fourth quarter Supply Chain & Freight operating profit and consolidated income before income taxes exclude a $71 million gain on the sale of UPS Logistics Technologies. This gain is partially offset by the exclusion of a $13 million fair value adjustment loss related to the guarantee associated with the sale of a specialized transportation business in Germany that occurred in the first quarter. | ||||||||||||||||||||||||||||||||||||||
(4) First quarter net income and earnings per share amounts exclude the after-tax impact of the U.S. Domestic Package restructuring charge described in (2) and the business sale described in (3), which total a combined $99 million. Additionally, first quarter net income and earnings per share exclude a $76 million charge to income tax expense, resulting from a change in the tax filing status of a German subsidiary. Third quarter net income and earnings per share exclude the after-tax impact of the real estate sale described in (2), which totaled $61 million. Fourth quarter net income and earnings per share amounts exclude the after-tax impact of the mark-to-market loss described in (1), and the gain related to the disposition of businesses, described in (3), which combined to decrease net income by $43 million. | ||||||||||||||||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. | ||||||||||||||||||||||||||||||||||||||
United Parcel Service, Inc. | ||||||||||||||||||||||||||||||||||||||
Selected Financial Data - Quarterly 2009 | ||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
(inclusive of change in pension accounting) | ||||||||||||||||||||||||||||||||||||||
Q1 2009 | Q2 2009 | Q3 2009 | Q4 2009 | 2009 | Q1 2009 | Q2 2009 | Q3 2009 | Q4 2009 | 2009 | |||||||||||||||||||||||||||||
(amounts in millions, except per share data) | ||||||||||||||||||||||||||||||||||||||
Statement of Income Data: | ||||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
U.S. Domestic Package | $ | 6,949 | $ | 6,789 | $ | 6,868 | $ | 7,552 | $ | 28,158 | -10.2 | % | -12.0 | % | -12.4 | % | -5.5 | % | -10.0 | % | ||||||||||||||||||
International Package | 2,240 | 2,246 | 2,422 | 2,791 | 9,699 | -18.8 | % | -23.8 | % | -17.9 | % | 5.8 | % | -14.1 | % | |||||||||||||||||||||||
Supply Chain & Freight | 1,749 | 1,794 | 1,863 | 2,034 | 7,440 | -19.8 | % | -23.3 | % | -19.8 | % | -1.8 | % | -16.5 | % | |||||||||||||||||||||||
Total revenue | 10,938 | 10,829 | 11,153 | 12,377 | 45,297 | -13.7 | % | -16.7 | % | -14.9 | % | -2.5 | % | -12.0 | % | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Compensation and benefits | 6,402 | 6,398 | 6,411 | 6,722 | 25,933 | -1.0 | % | -1.4 | % | 0.3 | % | -35.8 | % | -13.1 | % | |||||||||||||||||||||||
Other | 3,888 | 3,604 | 3,883 | 4,481 | 15,856 | -17.0 | % | -28.3 | % | -23.2 | % | -15.1 | % | -20.9 | % | |||||||||||||||||||||||
Total operating expenses | 10,290 | 10,002 | 10,294 | 11,203 | 41,789 | -7.7 | % | -13.1 | % | -10.1 | % | -28.9 | % | -16.2 | % | |||||||||||||||||||||||
Operating profit: | ||||||||||||||||||||||||||||||||||||||
U.S. Domestic Package | 329 | 422 | 458 | 710 | 1,919 | -66.6 | % | -54.4 | % | -59.9 | % | -131.8 | % | 133.2 | % | |||||||||||||||||||||||
International Package | 276 | 275 | 295 | 433 | 1,279 | -34.9 | % | -32.8 | % | -24.2 | % | N/A | 2.6 | % | ||||||||||||||||||||||||
Supply Chain & Freight | 43 | 130 | 106 | 31 | 310 | -62.9 | % | -13.9 | % | -19.7 | % | N/A | N/A | |||||||||||||||||||||||||
Total operating profit | 648 | 827 | 859 | 1,174 | 3,508 | -57.5 | % | -44.3 | % | -48.4 | % | -138.4 | % | 116.7 | % | |||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||||
Investment income (loss) | 13 | (22 | ) | 6 | 13 | 10 | -77.2 | % | N/A | N/A | -23.5 | % | -86.7 | % | ||||||||||||||||||||||||
Interest expense | (82 | ) | (181 | ) | (93 | ) | (89 | ) | (445 | ) | -38.8 | % | 74.0 | % | -10.6 | % | -11.0 | % | 0.7 | % | ||||||||||||||||||
Total other income (expense) | (69 | ) | (203 | ) | (87 | ) | (76 | ) | (435 | ) | -10.4 | % | 125.6 | % | -25.6 | % | -8.4 | % | 18.5 | % | ||||||||||||||||||
Income before income taxes | 579 | 624 | 772 | 1,098 | 3,073 | -60.0 | % | -55.3 | % | -50.1 | % | -135.0 | % | 145.4 | % | |||||||||||||||||||||||
Income tax expense | 221 | 222 | 267 | 395 | 1,105 | -57.7 | % | -55.9 | % | -52.1 | % | -140.1 | % | 85.1 | % | |||||||||||||||||||||||
Net income | $ | 358 | $ | 402 | $ | 505 | $ | 703 | $ | 1,968 | -61.3 | % | -55.0 | % | -49.0 | % | -132.6 | % | 200.5 | % | ||||||||||||||||||
Per share amounts | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.36 | $ | 0.40 | $ | 0.51 | $ | 0.71 | $ | 1.97 | -59.6 | % | -54.0 | % | -48.0 | % | -132.9 | % | 207.8 | % | ||||||||||||||||||
Diluted earnings per share | $ | 0.36 | $ | 0.40 | $ | 0.50 | $ | 0.70 | $ | 1.96 | -59.6 | % | -54.0 | % | -49.0 | % | -132.4 | % | 206.3 | % | ||||||||||||||||||
Dividends declared per share | $ | 0.45 | $ | 0.45 | $ | 0.45 | $ | 0.45 | $ | 1.80 | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||
Weighted-Average Shares Outstanding | ||||||||||||||||||||||||||||||||||||||
Basic | 997 | 998 | 997 | 997 | 998 | -3.9 | % | -2.3 | % | -0.9 | % | -0.2 | % | -1.8 | % | |||||||||||||||||||||||
Diluted | 1,003 | 1,004 | 1,004 | 1,004 | 1,004 | -3.9 | % | -2.4 | % | -0.9 | % | 0.5 | % | -1.8 | % | |||||||||||||||||||||||
As Adjusted Income Data: | ||||||||||||||||||||||||||||||||||||||
Operating profit: | ||||||||||||||||||||||||||||||||||||||
U.S. Domestic Package (1) | $ | 510 | $ | 422 | $ | 458 | $ | 710 | $ | 2,100 | -48.2 | % | -54.4 | % | -59.9 | % | -26.0 | % | -47.7 | % | ||||||||||||||||||
International Package (1) | 276 | 275 | 295 | 449 | 1,295 | -34.9 | % | -32.8 | % | -24.2 | % | 13.4 | % | -20.0 | % | |||||||||||||||||||||||
Supply Chain & Freight | 43 | 130 | 106 | 31 | 310 | -62.9 | % | -13.9 | % | -19.7 | % | -44.6 | % | -31.9 | % | |||||||||||||||||||||||
Total operating profit | $ | 829 | $ | 827 | $ | 859 | $ | 1,190 | $ | 3,705 | -45.6 | % | -44.3 | % | -48.4 | % | -15.7 | % | -39.1 | % | ||||||||||||||||||
Income before income taxes (1), (2) | $ | 760 | $ | 701 | $ | 772 | $ | 1,114 | $ | 3,347 | -47.5 | % | -49.8 | % | -50.1 | % | -32.8 | % | -44.7 | % | ||||||||||||||||||
Net income (3) | $ | 474 | $ | 450 | $ | 505 | $ | 714 | $ | 2,143 | -48.8 | % | -49.6 | % | -49.0 | % | -15.9 | % | -41.4 | % | ||||||||||||||||||
Basic earnings per share (3) | $ | 0.48 | $ | 0.45 | $ | 0.51 | $ | 0.72 | $ | 2.15 | -46.1 | % | -48.3 | % | -48.0 | % | -15.3 | % | -40.3 | % | ||||||||||||||||||
Diluted earnings per share (3) | $ | 0.47 | $ | 0.45 | $ | 0.50 | $ | 0.71 | $ | 2.13 | -47.2 | % | -48.3 | % | -49.0 | % | -16.5 | % | -40.5 | % | ||||||||||||||||||
(1) First quarter 2009 U.S. Domestic Package operating profit and consolidated income before income taxes exclude a $181 million impairment charge on our McDonnell-Douglas DC-8-71 and DC-8-73 airframes, engines, and parts, due to an acceleration of the planned retirement of these aircraft. Fourth quarter International Package operating profit and consolidated income before income taxes exclude a $16 million pension mark-to-market loss related to pension expense recognized outside of a 10% corridor. | ||||||||||||||||||||||||||||||||||||||
(2) Second quarter 2009 interest expense and consolidated income before income taxes exclude a $77 million charge for the remeasurement of certain obligations denominated in foreign currencies, in which hedge accounting was not able to be applied. | ||||||||||||||||||||||||||||||||||||||
(3) First quarter 2009 net income and earnings per share amounts exclude the after-tax effect of the impairment charge discussed in (1), which totaled $116 million. Second quarter 2009 net income and earnings per share amounts exclude the after-tax effect of the currency remeasurement charge discussed in (2), which totaled $48 million. Fourth quarter 2009 net income and earnings per share amounts exclude the after-tax effect of the mark-to-market loss related to pension expense discussed in (1), which totaled $11 million. | ||||||||||||||||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. | ||||||||||||||||||||||||||||||||||||||
United Parcel Service, Inc. | ||||||||||||||||||||||||||||||||||||||
Selected Financial Data - Quarterly 2008 | ||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||
(inclusive of change in pension accounting) | ||||||||||||||||||||||||||||||||||||||
Q1 2008 | Q2 2008 | Q3 2008 | Q4 2008 | 2008 | Q1 2008 | Q2 2008 | Q3 2008 | Q4 2008 | 2008 | |||||||||||||||||||||||||||||
(amounts in millions, except per share data) | ||||||||||||||||||||||||||||||||||||||
Statement of Income Data: | ||||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
U.S. Domestic Package | $ | 7,735 | $ | 7,714 | $ | 7,841 | $ | 7,988 | $ | 31,278 | 2.4 | % | 1.8 | % | 3.9 | % | -3.9 | % | 0.9 | % | ||||||||||||||||||
International Package | 2,759 | 2,948 | 2,949 | 2,637 | 11,293 | 15.7 | % | 17.9 | % | 16.6 | % | -8.0 | % | 9.8 | % | |||||||||||||||||||||||
Supply Chain & Freight | 2,181 | 2,339 | 2,323 | 2,072 | 8,915 | 10.8 | % | 10.9 | % | 9.0 | % | -6.5 | % | 5.8 | % | |||||||||||||||||||||||
Total revenue | 12,675 | 13,001 | 13,113 | 12,697 | 51,486 | 6.5 | % | 6.7 | % | 7.4 | % | -5.2 | % | 3.6 | % | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Compensation and benefits | 6,468 | 6,490 | 6,393 | 10,475 | 29,826 | 2.8 | % | 3.4 | % | 3.0 | % | -18.1 | % | -5.5 | % | |||||||||||||||||||||||
Other | 4,682 | 5,025 | 5,056 | 5,278 | 20,041 | 11.3 | % | 22.7 | % | 19.1 | % | 9.5 | % | 15.4 | % | |||||||||||||||||||||||
Total operating expenses | 11,150 | 11,515 | 11,449 | 15,753 | 49,867 | 6.2 | % | 11.0 | % | 9.6 | % | -10.6 | % | 1.9 | % | |||||||||||||||||||||||
Operating profit (loss): | ||||||||||||||||||||||||||||||||||||||
U.S. Domestic Package | 985 | 926 | 1,143 | (2,231 | ) | 823 | 0.4 | % | -24.9 | % | -9.9 | % | N/A | N/A | ||||||||||||||||||||||||
International Package | 424 | 409 | 389 | 24 | 1,246 | 12.8 | % | -14.8 | % | -10.2 | % | N/A | -33.4 | % | ||||||||||||||||||||||||
Supply Chain & Freight | 116 | 151 | 132 | (849 | ) | (450 | ) | 132.0 | % | 48.0 | % | 135.7 | % | N/A | N/A | |||||||||||||||||||||||
Total operating profit | 1,525 | 1,486 | 1,664 | (3,056 | ) | 1,619 | 8.4 | % | -18.1 | % | -5.3 | % | N/A | N/A | ||||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||||
Investment income (loss) | 57 | 14 | (13 | ) | 17 | 75 | N/A | -50.0 | % | N/A | -60.5 | % | -24.2 | % | ||||||||||||||||||||||||
Interest expense | (134 | ) | (104 | ) | (104 | ) | (100 | ) | (442 | ) | 173.5 | % | 70.5 | % | 96.2 | % | 20.5 | % | 79.7 | % | ||||||||||||||||||
Total other income (expense) | (77 | ) | (90 | ) | (117 | ) | (83 | ) | (367 | ) | 120.0 | % | 172.7 | % | 200.0 | % | 107.5 | % | 149.7 | % | ||||||||||||||||||
Income before income taxes | 1,448 | 1,396 | 1,547 | (3,139 | ) | 1,252 | 5.5 | % | -21.7 | % | -10.0 | % | N/A | N/A | ||||||||||||||||||||||||
Income tax expense (benefit) | 522 | 503 | 557 | (985 | ) | 597 | 4.8 | % | -22.3 | % | -8.8 | % | N/A | N/A | ||||||||||||||||||||||||
Net income (loss) | $ | 926 | $ | 893 | $ | 990 | $ | (2,154 | ) | $ | 655 | 5.9 | % | -21.3 | % | -10.6 | % | N/A | N/A | |||||||||||||||||||
Per share amounts | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.89 | $ | 0.87 | $ | 0.98 | $ | (2.16 | ) | $ | 0.64 | 8.5 | % | -18.7 | % | -6.7 | % | N/A | N/A | |||||||||||||||||||
Diluted earnings per share | $ | 0.89 | $ | 0.87 | $ | 0.98 | $ | (2.16 | ) | $ | 0.64 | 9.9 | % | -17.9 | % | -6.7 | % | N/A | N/A | |||||||||||||||||||
Dividends declared per share | $ | 0.45 | $ | 0.45 | $ | 0.45 | $ | 0.45 | $ | 1.80 | 7.1 | % | 7.1 | % | 7.1 | % | 7.1 | % | 7.1 | % | ||||||||||||||||||
Weighted-Average Shares Outstanding | ||||||||||||||||||||||||||||||||||||||
Basic | 1,037 | 1,021 | 1,006 | 999 | 1,016 | -3.1 | % | -3.7 | % | -4.3 | % | -4.6 | % | -3.9 | % | |||||||||||||||||||||||
Diluted | 1,044 | 1,029 | 1,013 | 999 | 1,022 | -2.9 | % | -3.5 | % | -4.3 | % | -4.6 | % | -3.9 | % | |||||||||||||||||||||||
As Adjusted Income Data: | ||||||||||||||||||||||||||||||||||||||
Operating profit: | ||||||||||||||||||||||||||||||||||||||
U.S. Domestic Package (1) | $ | 985 | $ | 926 | $ | 1,143 | $ | 959 | $ | 4,013 | -17.4 | % | -24.9 | % | -9.9 | % | -23.2 | % | -18.8 | % | ||||||||||||||||||
International Package (1), (2) | 424 | 409 | 389 | 396 | 1,618 | -4.7 | % | -14.8 | % | -10.2 | % | -29.7 | % | -15.8 | % | |||||||||||||||||||||||
Supply Chain & Freight (1), (2) | 116 | 151 | 132 | 56 | 455 | 100.0 | % | 48.0 | % | 29.4 | % | -35.6 | % | 30.4 | % | |||||||||||||||||||||||
Total operating profit | $ | 1,525 | $ | 1,486 | $ | 1,664 | $ | 1,411 | $ | 6,086 | -10.1 | % | -18.1 | % | -7.7 | % | -25.7 | % | -15.6 | % | ||||||||||||||||||
Income before income taxes (1), (2) | $ | 1,448 | $ | 1,396 | $ | 1,547 | $ | 1,658 | $ | 6,049 | -12.8 | % | -21.7 | % | -12.3 | % | -10.8 | % | -14.4 | % | ||||||||||||||||||
Net income (3) | $ | 926 | $ | 893 | $ | 990 | $ | 849 | $ | 3,658 | -12.5 | % | -21.3 | % | -13.0 | % | -26.9 | % | -18.6 | % | ||||||||||||||||||
Basic earnings per share (3) | $ | 0.89 | $ | 0.87 | $ | 0.98 | $ | 0.85 | $ | 3.60 | -10.1 | % | -18.7 | % | -9.3 | % | -23.4 | % | -15.3 | % | ||||||||||||||||||
Diluted earnings per share (3) | $ | 0.89 | $ | 0.87 | $ | 0.98 | $ | 0.85 | $ | 3.58 | -9.2 | % | -17.9 | % | -9.3 | % | -20.6 | % | -15.4 | % | ||||||||||||||||||
(1) Fourth quarter operating profit and consolidated income before income taxes exclude the impact of the pension mark-to-market loss related to pension expense recognized outside of a 10% corridor of $3.892 billion, allocated between U.S. Domestic Package segment ($3.190 billion), International Package segment ($345 million), and Supply Chain & Freight segment ($357 million). | ||||||||||||||||||||||||||||||||||||||
(2) Fourth quarter adjusted operating profit and income before income taxes exclude a $548 million goodwill impairment charge in our UPS Freight unit within the Supply Chain & Freight segment, and a $27 million intangible impairment charge in our European International Package operations. | ||||||||||||||||||||||||||||||||||||||
(3) Fourth quarter net income and earnings per share amounts exclude the after-tax impact of the mark-to-market loss described in (1), which totaled $2.428 billion, and the impact of the impairment charges described in (2), which totaled $575 million (there was no tax benefit to these charges). | ||||||||||||||||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. | ||||||||||||||||||||||||||||||||||||||
United Parcel Service, Inc. | |||||||||||||||||||||
Selected Financial Data - Quarterly 2007 | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
(inclusive of change in pension accounting) | |||||||||||||||||||||
Q1 2007 | Q2 2007 | Q3 2007 | Q4 2007 | 2007 | |||||||||||||||||
(amounts in millions, except per share data) | |||||||||||||||||||||
Statement of Income Data: | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||
U.S. Domestic Package | $ | 7,552 | $ | 7,579 | $ | 7,545 | $ | 8,309 | $ | 30,985 | |||||||||||
International Package | 2,385 | 2,500 | 2,529 | 2,867 | 10,281 | ||||||||||||||||
Supply Chain & Freight | 1,969 | 2,110 | 2,131 | 2,216 | 8,426 | ||||||||||||||||
Total revenue | 11,906 | 12,189 | 12,205 | 13,392 | 49,692 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Compensation and benefits | 6,292 | 6,277 | 6,204 | 12,792 | 31,565 | ||||||||||||||||
Other | 4,207 | 4,097 | 4,244 | 4,821 | 17,369 | ||||||||||||||||
Total operating expenses | 10,499 | 10,374 | 10,448 | 17,613 | 48,934 | ||||||||||||||||
Operating profit (loss): | |||||||||||||||||||||
U.S. Domestic Package | 981 | 1,233 | 1,268 | (4,888 | ) | (1,406 | ) | ||||||||||||||
International Package | 376 | 480 | 433 | 581 | 1,870 | ||||||||||||||||
Supply Chain & Freight | 50 | 102 | 56 | 86 | 294 | ||||||||||||||||
Total operating profit (loss) | 1,407 | 1,815 | 1,757 | (4,221 | ) | 758 | |||||||||||||||
Other income (expense): | |||||||||||||||||||||
Investment income | 14 | 28 | 14 | 43 | 99 | ||||||||||||||||
Interest expense | (49 | ) | (61 | ) | (53 | ) | (83 | ) | (246 | ) | |||||||||||
Total other income (expense) | (35 | ) | (33 | ) | (39 | ) | (40 | ) | (147 | ) | |||||||||||
Income (loss) before income taxes | 1,372 | 1,782 | 1,718 | (4,261 | ) | 611 | |||||||||||||||
Income tax expense (benefit) | 498 | 647 | 611 | (1,641 | ) | 115 | |||||||||||||||
Net income (loss) | $ | 874 | $ | 1,135 | $ | 1,107 | $ | (2,620 | ) | $ | 496 | ||||||||||
Per share amounts | |||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.82 | $ | 1.07 | $ | 1.05 | $ | (2.50 | ) | $ | 0.47 | ||||||||||
Diluted earnings (loss) per share | $ | 0.81 | $ | 1.06 | $ | 1.05 | $ | (2.50 | ) | $ | 0.47 | ||||||||||
Dividends declared per share | $ | 0.42 | $ | 0.42 | $ | 0.42 | $ | 0.42 | $ | 1.68 | |||||||||||
Weighted-Average Shares Outstanding | |||||||||||||||||||||
Basic | 1,070 | 1,060 | 1,051 | 1,047 | 1,057 | ||||||||||||||||
Diluted | 1,075 | 1,066 | 1,058 | 1,047 | 1,063 | ||||||||||||||||
As Adjusted Income Data: | |||||||||||||||||||||
Operating profit: | |||||||||||||||||||||
U.S. Domestic Package (1), (2) | $ | 1,193 | $ | 1,233 | $ | 1,268 | $ | 1,248 | $ | 4,942 | |||||||||||
International Package (1), (2) | 445 | 480 | 433 | 563 | 1,921 | ||||||||||||||||
Supply Chain & Freight (1), (2) | 58 | 102 | 102 | 87 | 349 | ||||||||||||||||
Total operating profit | $ | 1,696 | $ | 1,815 | $ | 1,803 | $ | 1,898 | $ | 7,212 | |||||||||||
Income before income taxes (1), (2) | $ | 1,661 | $ | 1,782 | $ | 1,764 | $ | 1,858 | $ | 7,065 | |||||||||||
Net income (3) | $ | 1,058 | $ | 1,135 | $ | 1,138 | $ | 1,162 | $ | 4,493 | |||||||||||
Basic earnings per share (3) | $ | 0.99 | $ | 1.07 | $ | 1.08 | $ | 1.11 | $ | 4.25 | |||||||||||
Diluted earnings per share (3) | $ | 0.98 | $ | 1.06 | $ | 1.08 | $ | 1.07 | $ | 4.23 | |||||||||||
(1) Fourth quarter operating profit and consolidated income before income taxes exclude the impact of the pension mark-to-market loss related to pension expense recognized outside of a 10% corridor of $19 million, allocated between U.S. Domestic Package segment ($36 million) and Supply Chain & Freight segment ($1 million), partially offset by a mark-to-market gain at International Package segment (-$18 million). | |||||||||||||||||||||
(2) First quarter 2007 adjusted operating profit and income before income taxes exclude an impairment charge on Boeing 727 and 747 aircraft, and related engines and parts, of $221 million ($159 million U.S. Domestic Package and $62 million International Package), due to the acceleration of the planned retirement of these aircraft. First quarter 2007 adjusted operating profit and income before income taxes also exclude a charge related to the special voluntary separation opportunity ("SVSO"), which was accepted by 195, or 30%, of the eligible employees. We recorded a charge to expense of $68 million ($53 million U.S. Domestic Package, $7 million International Package, and $8 million Supply Chain & Freight), to reflect the cash payout and the acceleration of stock compensation and certain retiree healthcare benefits under the SVSO program. | |||||||||||||||||||||
Third quarter adjusted operating profit and income before income taxes exclude a $46 million charge related to the restructuring and disposal of certain operations in France within the Supply Chain & Freight segment. Fourth quarter adjusted operating profit and income before income taxes exclude a $6.100 billion charge in the U.S. Domestic Package segment related to the withdrawal from the Central States, Southeast and Southwest Areas Pension Fund upon ratification of our national master agreement with the International Brotherhood of Teamsters. | |||||||||||||||||||||
(2) First quarter net income and earnings per share amounts exclude the after-tax impact of the aircraft impairment and SVSO charges described in (2), which total $184 million. Third quarter net income and earnings per share amounts exclude the after-tax impact of the Supply Chain & Freight restructuring charge described in (2), which totaled $31 million. Fourth quarter net income and earnings per share amounts exclude the after-tax impact of the pension mark-to-market loss and the after-tax impact of the pension withdrawal charge, described in (1), which totaled $3.782 billion. | |||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. |
UPS
Norman Black, 404-828-7593
Public Relations
or
Andy
Dolny, 404-828-8901
Investor Relations