UPS
$117.67
United Parcel Service
$.41
.35%
Earnings Details
2nd Quarter June 2017
Thursday, July 27, 2017 7:45:20 AM
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Summary

United Parcel Service Beats

United Parcel Service (UPS) reported 2nd Quarter June 2017 earnings of $1.58 per share on revenue of $15.8 billion. The consensus earnings estimate was $1.46 per share on revenue of $15.5 billion. The Earnings Whisper number was $1.48 per share. Revenue grew 7.7% on a year-over-year basis.

The company said it continues to expect 2017 earnings of $5.80 to $6.10 per share. The current consensus earnings estimate is $5.95 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
$1.58
Earnings Whisper
$1.48
Consensus Estimate
$1.46
Reported Revenue
$15.75 Bil
Revenue Estimate
$15.48 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

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

UPS (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 (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-
2016 As-
% ChangeCurrency
2017
% Change
Reported
Reported
(GAAP)
Impact
Currency-
(non-
(GAAP)
(GAAP)
Neutral
GAAP)
(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-
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
$
5.85
$
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
Currency
June 30
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
Currency
June 30
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
Currency
June 30
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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