- Consolidated Average Daily Volume Surged to Record
20.9% Growth
- 2Q20 Diluted EPS of $2.03, Up 4.6%; Adjusted* Diluted
EPS up 8.7% to $2.13
- YTD Cash from Operations of $5.9B; Adjusted Free Cash
Flow of $3.9B
UPS (NYSE:UPS) today announced second-quarter 2020 consolidated
revenue increased to $20.5 billion, a 13.4% increase from the
second quarter of 2019. Net income was $1.8 billion for the
quarter; adjusted net income was $1.9 billion, 8.8% above the same
period in 2019. Operating profit was $2.2 billion, and
adjusted operating profit was $2.3 billion, up 7.4% compared to
last year’s second quarter.
Diluted earnings per share was $2.03 and adjusted diluted
earnings per share was $2.13, up 8.7% from the same period last
year. GAAP results included a pre-tax transformation charge
of $112 million, equivalent to $0.10 per share. In the prior
year period, GAAP results included a pre-tax charge for
transformation costs of $21 million, equivalent to $0.02 per
share.
“Our results were better than we expected, driven in part by the
changes in demand that emerged from the pandemic, including a surge
in residential volume, COVID-19 related healthcare shipments and
strong outbound demand from Asia,” said Carol Tomé, UPS chief
executive officer. “UPSers are keeping the world moving
during this time of need and I want to thank our team for their
hard work and outstanding efforts to serve our customers, our
communities and each other.”
U.S. Domestic Segment
|
2Q 2020 |
Adjusted2Q 2020 |
2Q 2019 |
Adjusted2Q 2019 |
Revenue |
$13,074 M |
|
$11,150 M |
|
Operating profit |
$1,182 M |
$ 1,215 M |
$1,208 M |
$1,226 M |
- Average daily volume increased 22.8%, reaching 21.1 million
packages per day.
- Demand for residential delivery surged in the quarter, driving
B2C shipment growth up 65.2%.
- Operating margin was 9.0%; adjusted operating margin was
9.3%.
International Segment
|
2Q 2020 |
Adjusted2Q 2020 |
2Q 2019 |
Adjusted2Q 2019 |
Revenue |
$3,705 M |
|
$3,505 M |
|
Operating profit |
$771 M |
$ 842 M |
$663 M |
$665 M |
- Average daily volume grew 9.8%, driven by strong outbound
demand from Asia and an increase in cross-border e-commerce in
Europe.
- Operating margin was 20.8%; adjusted operating margin was
22.7%.
* “Adjusted” amounts are non-GAAP financial
measures. See the appendix to this release for a discussion of
non-GAAP financial measures, including a reconciliation to the most
closely correlated GAAP measure.
Supply Chain and Freight Segment
|
2Q 2020 |
Adjusted2Q 2020 |
2Q 2019 |
Adjusted2Q 2019 |
Revenue |
$3,680 M |
|
$3,393 M |
|
Operating profit |
$259 M |
$ 267 M |
$272 M |
$273 M |
- Revenue increased 8.5%, driven by elevated air freight
forwarding demand out of Asia, offset in part by weaker demand
early in the quarter in the LTL and truckload brokerage units.
- Operating margin was 7.0%; adjusted operating margin was
7.3%.
Outlook
UPS is not providing revenue and diluted earnings per share
guidance due to the uncertainty around the timing and pace of the
economic recovery. The company is unable to predict the
extent of the business impact or the duration of the coronavirus
pandemic, or reasonably estimate its operating performance in
future quarters.
“Using the scale and flexibility of our global integrated
network, we successfully managed operational challenges throughout
the quarter. Moving forward we are focusing on efficiency and
revenue quality to improve U.S. operating margins longer term,”
said Brian Newman, UPS chief financial officer. “Our
liquidity and cash position remain strong, allowing us to invest in
enabling capabilities through this time of unprecedented business
disruption.”
Contacts:UPS Media Relations: 404-828-7123 or pr@ups.comUPS
Investor Relations: 404-828-6059 (option 2) or investor@ups.com
Conference Call Information
UPS CEO Carol Tomé and CFO Brian Newman will discuss
second-quarter results with investors and analysts during a
conference call at 8:30 a.m. ET, July 30, 2020. That call
will be open to others through a live Webcast. To access the
call, go to www.investors.ups.com and click on “Earnings Webcast.”
Additional financial information is included in the detailed
financial schedules being posted on www.investors.ups.com under
“Financials” and as filed with the SEC as an exhibit to our Current
Report on Form 8-K.
About UPS
UPS (NYSE: UPS) is a global leader in logistics, offering a
broad range of solutions including transporting packages and
freight; facilitating international trade, and deploying advanced
technology to more efficiently manage the world of business. UPS is
committed to operating more sustainably – for customers, the
environment and the communities we serve around the world.
Headquartered in Atlanta, UPS serves more than 220 countries and
territories worldwide. UPS was awarded America’s Best Customer
Service company for Shipping and Delivery services by Newsweek
magazine; Fortune magazine’s Most Valuable Brand in Transportation;
and top rankings on the JUST 100 list for social responsibility,
the Dow Jones Sustainability World Index, and the Harris Poll
Reputation Quotient, among other prestigious rankings and awards.
The company can be found on the web at ups.com or
pressroom.ups.com and its corporate blog can be found at
ups.com/longitudes The company’s sustainability eNewsletter, UPS
Horizons, can be found at ups.com/sustainabilitynewsletter. Learn
more about our sustainability efforts at ups.com/sustainability. To
get UPS news direct, follow @UPS_News on Twitter. To ship with UPS,
visit ups.com/ship.
Forward-Looking Statements
This release, our Annual Report on Form 10-K for the year ended
December 31, 2019 and our other filings with the Securities and
Exchange Commission contain and refer to “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Statements other than those of current or
historical fact, and all statements accompanied by terms such as
“believe,” “project,” “expect,” “estimate,” “assume,” “intend,”
“anticipate,” “target,” “plan,” and variations thereof, and similar
terms, are intended to be forward-looking statements.
Forward-looking statements are made subject to the safe harbor
provisions of the federal securities laws pursuant to Section 27A
of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.
From time to time, we also include forward-looking statements in
other publicly disclosed materials. Such statements may relate to
our intent, belief and current expectations about our strategic
direction, prospects and future results, and give our current
expectations or forecasts of future events; they do not relate
strictly to historical or current facts. Management believes that
these forward-looking statements are reasonable as and when made.
However, caution should be taken not to place undue reliance on any
forward-looking statements because such statements speak only as of
the date when made.
Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from our historical experience, present expectations or anticipated
results. These risks and uncertainties, many of which are outside
of our control, include, but are not limited to: uncertainties
related to the impact of the COVID-19 pandemic on our business and
operations, financial condition, financial results and financial
position, our customers and suppliers, and on the global economy;
changes in general economic conditions, in the U.S. or
internationally; significant competition on a local, regional,
national and international basis; changes in our relationships with
our significant customers; changes in the complex and stringent
regulation in the U.S. and internationally (including tax laws and
regulations); increased physical or data security requirements that
may increase our costs of operations and reduce operating
efficiencies; legal, regulatory or market responses to global
climate change; results of negotiations and ratifications of labor
contracts; strikes, work stoppages or slowdowns by our employees;
the effects of changing prices of energy, including gasoline,
diesel and jet fuel, and interruptions in supplies of these
commodities; changes in exchange rates or interest rates;
uncertainty from the expected discontinuance of LIBOR and
transition to any other interest rate benchmark; our ability to
maintain the image of our brand; breaches in data security;
disruptions to the Internet or our technology infrastructure;
interruptions in or impacts on our business from natural or
man-made events or disasters including terrorist attacks, epidemics
or pandemics; our ability to accurately forecast our future capital
investment needs; exposure to changing economic, political and
social developments in international and emerging markets; changes
in business strategy, government regulations, or economic or market
conditions that may result in substantial impairment of our assets;
increases in our expenses or funding obligations relating to
employee health, retiree health and/or pension benefits; potential
additional tax liabilities in the U.S. or internationally; the
potential for various claims and litigation related to labor and
employment, personal injury, property damage, business practices,
environmental liability and other matters; our ability to realize
the anticipated benefits from acquisitions, joint ventures or
strategic alliances; our ability to realize the anticipated
benefits from our transformation initiatives; cyclical and seasonal
fluctuations in our operating results; our ability to manage
insurance and claims expenses; and other risks discussed in our
filings with the Securities and Exchange Commission from time to
time, including our Annual Report on Form 10-K for the year ended
December 31, 2019, our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020 and subsequently filed reports. You
should consider the limitations on, and risks associated with,
forward-looking statements and not unduly rely on the accuracy of
information contained in such forward-looking statements. We do not
undertake any obligation to update forward-looking statements to
reflect events, circumstances, changes in expectations, or the
occurrence of unanticipated events after the date of those
statements, except as required by law.
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 "adjusted"
compensation and benefits, operating profit, operating margin,
other income (expense), income before income taxes, income tax
expense, effective tax rate, net income and earnings per share. We
also supplement the reporting of revenue, revenue per piece and
operating profit with non-GAAP measures that exclude the
period-over-period impact of foreign currency exchange rate changes
and hedging activities. Additionally, we periodically
disclose free cash flow, free cash flow excluding discretionary
pension contributions, and capital expenditures including principal
repayments of capital lease obligations. The equivalent measures
determined in accordance with GAAP are also referred to as
"reported" or "unadjusted.”
We believe that these non-GAAP measures provide additional
meaningful information to assist users of our financial statements
in understanding our financial results and cash flows 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. These non-GAAP measures are used
internally by management for business unit operating performance
analysis, business unit resource allocation and in connection with
incentive compensation award determinations.
Costs Related to Restructuring Programs; Transformation Strategy
Costs
Non-GAAP operating profit, operating margin, pre-tax income, net
income and earnings per share exclude the impact of costs related
to restructuring programs, including Transformation strategy
costs. We believe this provides a useful comparison of
year-to-year financial performance without considering the
short-term impact of restructuring costs.
Impact of Changes in Foreign Currency Exchange Rates and Hedging
Activities
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 amounts 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 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.
Impact of Changes in Pension Discount Rates
Non-GAAP pension discount rate-neutral operating profit excludes
the period over period impact of discount rate changes on pension
service cost. Effective January 1, 2020, we began evaluating our
segments using pension discount rate-neutral operating profit in
addition to our current segment operating profit measure.
Pension discount rate-neutral operating profit is calculated by
discounting the value of benefits attributable to employee service
in the current period utilizing the prior year discount rate
applicable to each of our company-sponsored defined benefit plans.
The difference between this derived amount and the current period
reported service cost is the period over period impact of pension
discount rate movements on operating profit.
Free Cash Flow and Adjusted Capital Expenditures
We believe free cash flow, free cash flow excluding
discretionary pension contributions and free cash flow adjusted for
principal repayments of finance lease obligations are important
indicators of how much cash is generated by regular business
operations and we use them as a measure of incremental cash
available to invest in our business, meet our debt obligations and
return cash to shareowners. Additionally, we believe that adjusting
capital expenditures for principal repayments of finance lease
obligations more appropriately reflects the overall cash that we
have invested in capital assets. We calculate free cash flow as
cash flows from operating activities less capital expenditures,
proceeds from disposals of property, plant and equipment, and plus
or minus the net changes in finance receivables and other investing
activities. Free cash flow excluding discretionary pension
contributions adds back any discretionary pension contributions
made during the period.
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.
Reconciliation of GAAP and Non-GAAP
Income Statement(in millions, except per share
amounts):
Three Months Ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
As-Reported (GAAP) |
|
Transformation Strategy Costs (1) |
|
As-Adjusted (Non-GAAP) |
Operating profit: |
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
1,182 |
|
|
$ |
33 |
|
|
$ |
1,215 |
|
International Package |
|
771 |
|
|
71 |
|
|
842 |
|
Supply Chain & Freight |
|
259 |
|
|
8 |
|
|
267 |
|
Total operating profit |
|
$ |
2,212 |
|
|
$ |
112 |
|
|
$ |
2,324 |
|
|
|
|
|
|
|
|
Income before income
taxes |
|
$ |
2,357 |
|
|
$ |
112 |
|
|
$ |
2,469 |
|
|
|
|
|
|
|
|
Income tax expense |
|
$ |
589 |
|
|
$ |
29 |
|
|
$ |
618 |
|
|
|
|
|
|
|
|
Net Income |
|
$ |
1,768 |
|
|
$ |
83 |
|
|
$ |
1,851 |
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
2.03 |
|
|
$ |
0.10 |
|
|
$ |
2.13 |
|
(1) Reflects other employee benefits
costs of $81 million and other costs of $31 million.
Six Months Ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
As-Reported (GAAP) |
|
Transformation Strategy
Costs(1) |
|
As-Adjusted (Non-GAAP) |
Operating profit: |
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
1,546 |
|
|
$ |
70 |
|
|
$ |
1,616 |
|
International Package |
|
1,322 |
|
|
78 |
|
|
1,400 |
|
Supply Chain & Freight |
|
416 |
|
|
9 |
|
|
425 |
|
Total operating profit |
|
$ |
3,284 |
|
|
$ |
157 |
|
|
$ |
3,441 |
|
|
|
|
|
|
|
|
Income before income
taxes |
|
$ |
3,607 |
|
|
$ |
157 |
|
|
$ |
3,764 |
|
|
|
|
|
|
|
|
Income tax expense |
|
$ |
874 |
|
|
$ |
39 |
|
|
$ |
913 |
|
|
|
|
|
|
|
|
Net income |
|
$ |
2,733 |
|
|
$ |
118 |
|
|
$ |
2,851 |
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
3.14 |
|
|
$ |
0.14 |
|
|
$ |
3.28 |
|
(1) Reflects other employee benefits
costs of $93 million and other costs of $64 million.
Reconciliation of GAAP and Non-GAAP
Revenue, Revenue Per Piece, and Adjusted Operating
Profit(in millions, except per piece
amounts):
Three Months Ended June 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 As-Reported
(GAAP) |
|
2019 As-Reported
(GAAP) |
|
% Change (GAAP) |
|
Currency Impact |
|
2020CurrencyNeutral(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
Average Revenue Per
Piece: |
|
|
|
|
|
|
|
|
|
|
|
|
International Package: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
|
$ |
6.37 |
|
|
$ |
6.63 |
|
|
(3.9 |
) |
% |
|
$ |
0.16 |
|
|
$ |
6.53 |
|
|
(1.5 |
) |
% |
Export |
|
28.56 |
|
|
30.06 |
|
|
(5.0 |
) |
% |
|
0.18 |
|
|
28.74 |
|
|
(4.4 |
) |
% |
Total International Package |
|
$ |
16.73 |
|
|
$ |
17.41 |
|
|
(3.9 |
) |
% |
|
$ |
0.17 |
|
|
$ |
16.90 |
|
|
(2.9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
10.63 |
|
|
$ |
11.21 |
|
|
(5.2 |
) |
% |
|
$ |
0.02 |
|
|
$ |
10.65 |
|
|
(5.0 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
13,074 |
|
|
$ |
11,150 |
|
|
17.3 |
|
% |
|
$ |
— |
|
|
$ |
13,074 |
|
|
17.3 |
|
% |
International Package |
|
3,705 |
|
|
3,505 |
|
|
5.7 |
|
% |
|
38 |
|
|
3,743 |
|
|
6.8 |
|
% |
Supply Chain & Freight |
|
3,680 |
|
|
3,393 |
|
|
8.5 |
|
% |
|
52 |
|
|
3,732 |
|
|
10.0 |
|
% |
Total Revenue |
|
$ |
20,459 |
|
|
$ |
18,048 |
|
|
13.4 |
|
% |
|
$ |
90 |
|
|
$ |
20,549 |
|
|
13.9 |
|
% |
(1) Amounts adjusted for period over
period foreign currency exchange rate and hedging
differences
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Currency Impact |
|
2020As-AdjustedCurrencyNeutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
1,215 |
|
|
$ |
1,226 |
|
|
(0.9 |
) |
% |
|
$ |
— |
|
|
|
$ |
1,215 |
|
|
(0.9 |
) |
% |
International Package |
|
842 |
|
|
665 |
|
|
26.6 |
|
% |
|
(8 |
) |
|
|
834 |
|
|
25.4 |
|
% |
Supply Chain & Freight |
|
267 |
|
|
273 |
|
|
(2.2 |
) |
% |
|
(7 |
) |
|
|
260 |
|
|
(4.8 |
) |
% |
Total operating profit |
|
$ |
2,324 |
|
|
$ |
2,164 |
|
|
7.4 |
|
% |
|
$ |
(15 |
) |
|
|
$ |
2,309 |
|
|
6.7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts adjusted for transformation
strategy costs
(2) Amounts adjusted for transformation
strategy costs and period over period foreign currency exchange
rate and hedging differences
Reconciliation of GAAP and Non-GAAP
Revenue, Revenue Per Piece, and Adjusted Operating
Profit(in millions, except per piece
amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30 |
|
|
2020 As-Reported
(GAAP) |
|
2019 As-Reported
(GAAP) |
|
% Change (GAAP) |
|
Currency Impact |
|
2020Currency
Neutral(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
Average Revenue Per
Piece: |
|
|
|
|
|
|
|
|
|
|
|
|
International Package: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
|
$ |
6.41 |
|
|
$ |
6.56 |
|
|
(2.3 |
) |
% |
|
$ |
0.13 |
|
|
$ |
6.54 |
|
|
(0.3 |
) |
% |
Export |
|
28.45 |
|
|
29.40 |
|
|
(3.2 |
) |
% |
|
0.13 |
|
|
28.58 |
|
|
(2.8 |
) |
% |
Total International Package |
|
$ |
16.61 |
|
|
$ |
17.10 |
|
|
(2.9 |
) |
% |
|
$ |
0.13 |
|
|
$ |
16.74 |
|
|
(2.1 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
10.74 |
|
|
$ |
11.15 |
|
|
(3.7 |
) |
% |
|
$ |
0.02 |
|
|
$ |
10.76 |
|
|
(3.5 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
24,530 |
|
|
$ |
21,630 |
|
|
13.4 |
|
% |
|
$ |
— |
|
|
$ |
24,530 |
|
|
13.4 |
|
% |
International Package |
|
7,088 |
|
|
6,964 |
|
|
1.8 |
|
% |
|
57 |
|
|
7,145 |
|
|
2.6 |
|
% |
Supply Chain & Freight |
|
6,876 |
|
|
6,614 |
|
|
4.0 |
|
% |
|
100 |
|
|
6,976 |
|
|
5.5 |
|
% |
Total revenue |
|
$ |
38,494 |
|
|
$ |
35,208 |
|
|
9.3 |
|
% |
|
$ |
157 |
|
|
$ |
38,651 |
|
|
9.8 |
|
% |
(1)Amounts adjusted for period over
period foreign currency exchange rate and hedging
differences
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Currency Impact |
|
2020As-AdjustedCurrency
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
1,616 |
|
|
$ |
1,920 |
|
|
(15.8 |
) |
% |
|
$ |
— |
|
|
|
$ |
1,616 |
|
|
(15.8 |
) |
% |
International Package |
|
1,400 |
|
|
1,277 |
|
|
9.6 |
|
% |
|
(30 |
) |
|
|
1,370 |
|
|
7.3 |
|
% |
Supply Chain & Freight |
|
425 |
|
|
484 |
|
|
(12.2 |
) |
% |
|
(6 |
) |
|
|
419 |
|
|
(13.4 |
) |
% |
Total operating profit |
|
$ |
3,441 |
|
|
$ |
3,681 |
|
|
(6.5 |
) |
% |
|
$ |
(36 |
) |
|
|
$ |
3,405 |
|
|
(7.5 |
) |
% |
(1) Amounts adjusted for transformation
strategy costs
(2 )Amounts adjusted for transformation
strategy costs and period over period foreign currency exchange
rate and hedging differences
Reconciliation of Non-GAAP Pension
Discount Rate Neutral Operating Profit and
Margin(in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30 |
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Pension |
|
2020As-AdjustedPension
Discount Rate
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
1,215 |
|
|
$ |
1,226 |
|
|
(0.9 |
) |
% |
|
$ |
63 |
|
|
$ |
1,278 |
|
|
4.2 |
|
% |
International Package |
|
842 |
|
|
665 |
|
|
26.6 |
|
% |
|
4 |
|
|
846 |
|
|
27.2 |
|
% |
Supply Chain & Freight |
|
267 |
|
|
273 |
|
|
(2.2 |
) |
% |
|
6 |
|
|
273 |
|
|
— |
|
% |
Total operating profit |
|
$ |
2,324 |
|
|
$ |
2,164 |
|
|
7.4 |
|
% |
|
$ |
73 |
|
|
$ |
2,397 |
|
|
10.8 |
|
% |
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Pension |
|
2020As-AdjustedPension
Discount Rate
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
9.3 |
% |
|
11.0 |
% |
|
(1.7 |
) |
% |
|
0.5 |
% |
|
9.8 |
% |
|
(1.2 |
) |
% |
International Package |
|
22.7 |
% |
|
19.0 |
% |
|
3.7 |
|
% |
|
0.1 |
% |
|
22.8 |
% |
|
3.8 |
|
% |
Supply Chain & Freight |
|
7.3 |
% |
|
8.0 |
% |
|
(0.7 |
) |
% |
|
0.1 |
% |
|
7.4 |
% |
|
(0.6 |
) |
% |
Total operating margin |
|
11.4 |
% |
|
12.0 |
% |
|
(0.6 |
) |
% |
|
0.3 |
% |
|
11.7 |
% |
|
(0.3 |
) |
% |
(1) Amounts adjusted for transformation
strategy costs
(2) Amounts adjusted for transformation
strategy cost and period over period impact of discount rates on
pension service cost
Reconciliation of Non-GAAP Pension
Discount Rate Neutral Operating Profit and
Margin(in millions):
Six months Ended June 30 |
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Pension |
|
2020As-AdjustedPension
Discount Rate
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating
Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
$ |
1,616 |
|
|
$ |
1,920 |
|
|
(15.8 |
) |
% |
|
$ |
125 |
|
|
$ |
1,741 |
|
|
(9.3 |
) |
% |
International Package |
|
1,400 |
|
|
1,277 |
|
|
9.6 |
|
% |
|
8 |
|
|
1,408 |
|
|
10.3 |
|
% |
Supply Chain & Freight |
|
425 |
|
|
484 |
|
|
(12.2 |
) |
% |
|
14 |
|
|
439 |
|
|
(9.3 |
) |
% |
Total operating profit |
|
$ |
3,441 |
|
|
$ |
3,681 |
|
|
(6.5 |
) |
% |
|
$ |
147 |
|
|
$ |
3,588 |
|
|
(2.5 |
) |
% |
|
|
2020As-Adjusted(Non-GAAP)(1) |
|
2019As-Adjusted(Non-GAAP)(1) |
|
% Change (Non-GAAP) |
|
Pension |
|
2020As-AdjustedPension
Discount Rate
Neutral(Non-GAAP)(2) |
|
% Change (Non-GAAP) |
As-Adjusted Operating Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Domestic Package |
|
6.6 |
% |
|
8.9 |
% |
|
(2.3 |
) |
% |
|
0.5 |
% |
|
7.1 |
% |
|
(1.8 |
) |
% |
International Package |
|
19.8 |
% |
|
18.3 |
% |
|
1.5 |
|
% |
|
0.1 |
% |
|
19.9 |
% |
|
1.6 |
|
% |
Supply Chain & Freight |
|
6.2 |
% |
|
7.3 |
% |
|
(1.1 |
) |
% |
|
0.2 |
% |
|
6.4 |
% |
|
(0.9 |
) |
% |
Total operating margin |
|
8.9 |
% |
|
10.5 |
% |
|
(1.6 |
) |
% |
|
0.4 |
% |
|
9.3 |
% |
|
(1.2 |
) |
% |
(1) Amounts adjusted for
transformation strategy costs
(2) Amounts adjusted for transformation
strategy costs and period over period impact of discount rates on
pension service cost
Reconciliation of Non-GAAP Liquidity
Measures(in millions):
|
|
|
Six Months Ended June 30 |
|
|
|
Reconciliation of Adjusted Capital Expenditures and Free
Cash Flow |
(Non-GAAP measures) |
|
|
|
|
|
2020 |
Cash flows from operating activities (GAAP) |
|
$ |
5,947 |
|
Capital expenditures |
|
(2,065 |
) |
Principal repayments of finance lease obligations |
|
(33 |
) |
Adjusted capital expenditures
(Non-GAAP measure) |
|
$ |
(2,098 |
) |
Proceeds from disposals of
PP&E |
|
2 |
|
Net change in finance
receivables |
|
16 |
|
Other investing
activities |
|
(6 |
) |
Adjusted free cash flow (Non-GAAP measure) |
|
$ |
3,861 |
|
Amounts are subject to reclassification.
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