UPS
$118.16
United Parcel Service
$.11
.09%
Earnings Details
3rd Quarter September 2017
Thursday, October 26, 2017 7:45:12 AM
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Summary

United Parcel Service Misses

United Parcel Service (UPS) reported 3rd Quarter September 2017 earnings of $1.45 per share on revenue of $16.0 billion. The consensus earnings estimate was $1.44 per share on revenue of $15.6 billion. The Earnings Whisper number was $1.46 per share. Revenue grew 7.0% on a year-over-year basis.

The company said it expects 2017 earnings of $5.85 to $6.10 per share. The company's previous guidance was earnings of $5.80 to $6.10 per share and the current consensus earnings estimate is $6.00 per share for the year ending December 31, 2017.

United Parcel Service Inc (UPS) is a package delivery organization less-than-truckload industry & provider of supply chain management solutions. It operates in three segments; U.S. Domestic Package, International Package and Supply Chain & Freight.

Results
Reported Earnings
$1.45
Earnings Whisper
$1.46
Consensus Estimate
$1.44
Reported Revenue
$15.98 Bil
Revenue Estimate
$15.62 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

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 3 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

UPS (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 (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-
2016 As-
% Change
Currency
2017
% Change
Reported
Reported
(GAAP)
Impact
Currency-
(non-
(GAAP)
(GAAP)
Neutral
GAAP)
(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-
2016 As-
% Change
Currency
2017
% Change
Reported
Reported
(GAAP)
Impact
Currency-
(non-
(GAAP)
(GAAP)
Neutral
GAAP)
(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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