UPS (NYSE:UPS) today announced first-quarter 2017 operating results
with healthy revenue growth across all three segments. The
company improved earnings per share by 3.9% versus the same period
in 2016. The improved per-share result was due to a 22%
increase in Supply Chain and Freight segment operating profit,
strong underlying performance in the International segment and
solid results in the Domestic segment, plus the favorable tax
impact of adopting the new stock compensation accounting standard
(ASU 2016-9).
Consolidated
Results |
1Q 2017 |
1Q 2016 |
Revenue |
$15,315 M |
$14,418 M |
Operating profit |
$1,784 M |
$1,823 M |
Currency-neutral
operating profit* |
$1,904 M |
|
|
|
|
Diluted earnings per
share |
$ |
1.32 |
$ |
1.27 |
* See attached reconciliation of non-GAAP
currency-neutral operating profit
“Revenue came in strong this quarter with all segments adding to
the topline,” said David Abney, UPS chairman and CEO. “We are
accelerating investments to create the industry’s leading smart
global logistics network and value-creating portfolio. UPS
customers are benefiting from expanded capacity, choice and
improved time-in-transit, while technology solutions continue to
deliver efficiencies.”
For the total company in Q1 2017:
- Total revenue climbed 6.2% and currency-neutral revenue
increased 7.5%.
- Revenue grew in all segments and in all major product
categories, as balanced market demand occurred across the company’s
broad product portfolio.
- Total fuel expense increased $187 million or 43% over Q1
2016. The fuel surcharge revenue lagged expense, however a
February 2017 surcharge change mitigates this variance for future
periods.
- Capital expenditures to support network enhancements were $938
million during the quarter, demonstrating a run-rate at the
annualized guidance level.
- UPS paid dividends of $774 million, an increase of 6.4% per
share over the prior year, rewarding shareowners with continued
strong dividend yield.
- The company repurchased 4.2 million shares for approximately
$450 million in line with the company’s capital allocation
policy.
U.S. Domestic Segment
The Domestic segment benefitted from strong demand for ecommerce
deliveries and revenue was up 5% over Q1 2016. The U.S.
consumer continues to transform retail consumption due, in part to
the simplicity, personal convenience and reliable delivery
solutions offered by UPS.
|
1Q 2017 |
1Q 2016 |
Revenue |
$9,535
M |
$9,084
M |
Operating profit |
$1,076
M |
$1,102
M |
For the U.S. Domestic segment in Q1 2017:
- Revenue increased $451 million over Q1 2016 as B2C deliveries
rose.
- Revenue per piece increased across all products, up 2.4% in
total, as the company benefitted from previously implemented base
rate pricing actions.
- Next Day Air and Deferred Air shipments were up 3.9% and 4.1%
respectively, as consumers continue to select UPS’s quick and
convenient solutions.
- Construction is now underway on 17 major facility projects
(over 5 million square feet) to create capacity and efficiency to
support further B2B and B2C growth.
- The UPS portfolio expanded through an initiative to pick-up and
deliver Ground products on Saturday in 15 major metropolitan areas
during the quarter. This begins the rapid deployment to more than
4,700 cities by the peak holiday season in 2017.
- Operating costs for facility construction and Saturday
initiative increased operating costs by approximately $35 million
during the quarter.
- Headwinds from the fuel surcharge lag, some unusual weather and
a facility fire totaled about $50 million in one-time costs this
quarter.
International Operating Segment
“The UPS International segment continues to show excellent
operating fundamentals and consistent quarterly improvement,”
continued Abney.
The International segment generated strong topline growth with
increased demand for cross-border shipments. Export shipment growth
was strong across all UPS regions, as customers took advantage of
our expanded portfolio and industry-leading customs brokerage
solutions.
|
1Q 2017 |
1Q 2016 |
Revenue |
$3,058
M |
$2,914
M |
Operating profit |
$529
M |
$574
M |
Currency-neutral
operating profit* |
$648
M |
|
* See attached reconciliation of non-GAAP
currency-neutral operating profit
For the International Operating segment in Q1 2017:
- Operating margin was strong at 17.3%, despite the impact of
unfavorable currency.
- Currency was a drag of $119 million this quarter, full-year
impact expected to be more than $400 million.
- The segment reported a revenue increase of 4.9% over Q1 2016,
up 11% on a currency-neutral basis.
- Customers increasingly selected UPS due to network and
time-in-transit improvements, which generated robust, double-digit
shipment growth of 14% in Export and 11% in Non-U.S. domestic
products.
Supply Chain and Freight Segment
“We are extremely pleased with the growth and margin enhancing
performance of the Supply Chain and Freight segment this quarter,”
Abney said. “The team has been working on growth initiatives, cost
reduction programs and business unit portfolio strategies to
address unique market conditions for the last several
quarters. These initiatives showed excellent progress.”
|
1Q 2017 |
1Q 2016 |
Revenue |
$2,722
M |
$2,420
M |
Operating profit |
$179
M |
$147
M |
|
|
|
- Revenue increased 13% over Q1 2016, due to higher-performing
business development programs and improved market conditions across
all business units.
- Tonnage increases in Freight Forwarding and UPS Freight
increased revenue.
- Healthcare, Retail and Aerospace sector performance enhanced
strong Distribution results.
- Coyote Logistics continued to accelerate its growth strategies
and gained market share during the quarter.
- All business units contributed to segment operating profit
growth of 22% as profit improvement programs generated stronger
performance.
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.
“First quarter results continue to show the benefit of our
operating plan improvements across all business units,” said
Richard Peretz, UPS chief financial officer. “Our current
momentum, combined with accelerated investment initiatives gives us
confidence in our ability to attain our full-year guidance.”
- UPS reaffirms 2017 adjusted diluted EPS guidance to be between
$5.80 and $6.10, which includes more than $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
first-quarter results with investors and analysts during a
conference call at 8:30 a.m. ET, April 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.”
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
Longitudes.ups.com. To get UPS news directly, visit
pressroom.ups.com/RSS.
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 business 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 March 31 |
|
|
|
|
|
|
2017 As-Reported (GAAP) |
2016 As-Reported (GAAP) |
% Change (GAAP) |
Currency Impact |
2017Currency-Neutral
(non-GAAP) |
% Change(non-GAAP) |
Average Revenue
Per Piece: |
|
|
|
|
|
|
International Package: |
|
|
|
|
|
|
Domestic |
$ |
5.70 |
$ |
5.91 |
-3.6 |
% |
$ |
0.29 |
$ |
5.99 |
1.4 |
% |
Export |
|
28.13 |
|
30.46 |
-7.6 |
% |
|
1.67 |
|
29.80 |
-2.2 |
% |
Total
International Package |
|
15.45 |
|
16.39 |
-5.7 |
% |
|
0.89 |
|
16.34 |
-0.3 |
% |
|
|
|
|
|
|
|
Consolidated |
$ |
10.50 |
$ |
10.39 |
1.1 |
% |
$ |
0.15 |
$ |
10.65 |
2.5 |
% |
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
9,535 |
$ |
9,084 |
5.0 |
% |
$ |
- |
$ |
9,535 |
5.0 |
% |
International Package |
|
3,058 |
|
2,914 |
4.9 |
% |
|
170 |
|
3,228 |
10.8 |
% |
Supply
Chain & Freight |
|
2,722 |
|
2,420 |
12.5 |
% |
|
10 |
|
2,732 |
12.9 |
% |
Total
revenue |
$ |
15,315 |
$ |
14,418 |
6.2 |
% |
$ |
180 |
$ |
15,495 |
7.5 |
% |
|
|
|
|
|
|
|
Operating
Profit: |
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
1,076 |
$ |
1,102 |
-2.4 |
% |
$ |
- |
$ |
1,076 |
-2.4 |
% |
International Package |
|
529 |
|
574 |
-7.8 |
% |
|
119 |
|
648 |
12.9 |
% |
Supply
Chain & Freight |
|
179 |
|
147 |
21.8 |
% |
|
1 |
|
180 |
22.4 |
% |
Total
revenue |
$ |
1,784 |
$ |
1,823 |
-2.1 |
% |
$ |
120 |
$ |
1,904 |
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United Parcel Service,
Inc. |
Selected Financial Data - First
Quarter |
(unaudited) |
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
March 31 |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Change |
|
% Change |
|
(amounts
in millions, except per share data) |
|
|
|
|
|
|
|
|
Statement of
Income Data: |
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
9,535 |
|
|
$ |
9,084 |
|
|
$ |
451 |
|
|
5.0 |
% |
|
International Package |
|
3,058 |
|
|
|
2,914 |
|
|
|
144 |
|
|
4.9 |
% |
|
Supply
Chain & Freight |
|
2,722 |
|
|
|
2,420 |
|
|
|
302 |
|
|
12.5 |
% |
|
Total
revenue |
|
15,315 |
|
|
|
14,418 |
|
|
|
897 |
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Compensation and benefits |
|
8,131 |
|
|
|
7,853 |
|
|
|
278 |
|
|
3.5 |
% |
|
Other |
|
5,400 |
|
|
|
4,742 |
|
|
|
658 |
|
|
13.9 |
% |
|
Total
operating expenses |
|
13,531 |
|
|
|
12,595 |
|
|
|
936 |
|
|
7.4 |
% |
|
|
|
|
|
|
|
|
|
|
Operating profit: |
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
|
1,076 |
|
|
|
1,102 |
|
|
|
(26 |
) |
|
-2.4 |
% |
|
International Package |
|
529 |
|
|
|
574 |
|
|
|
(45 |
) |
|
-7.8 |
% |
|
Supply
Chain & Freight |
|
179 |
|
|
|
147 |
|
|
|
32 |
|
|
21.8 |
% |
|
Total
operating profit |
|
1,784 |
|
|
|
1,823 |
|
|
|
(39 |
) |
|
-2.1 |
% |
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
Investment income and other |
|
15 |
|
|
|
17 |
|
|
|
(2 |
) |
|
-11.8 |
% |
|
Interest
expense |
|
(102 |
) |
|
|
(93 |
) |
|
|
(9 |
) |
|
9.7 |
% |
|
Total
other income (expense) |
|
(87 |
) |
|
|
(76 |
) |
|
|
(11 |
) |
|
14.5 |
% |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
1,697 |
|
|
|
1,747 |
|
|
|
(50 |
) |
|
-2.9 |
% |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
539 |
|
|
|
616 |
|
|
|
(77 |
) |
|
-12.5 |
% |
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
1,158 |
|
|
$ |
1,131 |
|
|
$ |
27 |
|
|
2.4 |
% |
|
|
|
|
|
|
|
|
|
|
Net income as a
percentage of revenue |
|
7.6 |
% |
|
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share amounts: |
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
1.32 |
|
|
$ |
1.27 |
|
|
$ |
0.05 |
|
|
3.9 |
% |
|
Diluted
earnings per share |
$ |
1.32 |
|
|
$ |
1.27 |
|
|
$ |
0.05 |
|
|
3.9 |
% |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
874 |
|
|
|
889 |
|
|
|
(15 |
) |
|
-1.7 |
% |
|
Diluted |
|
879 |
|
|
|
894 |
|
|
|
(15 |
) |
|
-1.7 |
% |
|
United Parcel Service,
Inc. |
Selected Operating Data - First
Quarter |
(unaudited) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
March 31 |
|
|
|
|
2017 |
|
|
2016 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
|
|
Revenue (in
millions): |
|
|
|
|
|
|
|
|
U.S. Domestic
Package: |
|
|
|
|
|
|
|
|
Next Day
Air |
$ |
1,664 |
|
$ |
1,575 |
|
$ |
89 |
|
|
5.7 |
% |
|
Deferred |
|
970 |
|
|
915 |
|
|
55 |
|
|
6.0 |
% |
|
Ground |
|
6,901 |
|
|
6,594 |
|
|
307 |
|
|
4.7 |
% |
|
Total
U.S. Domestic Package |
|
9,535 |
|
|
9,084 |
|
|
451 |
|
|
5.0 |
% |
|
International
Package: |
|
|
|
|
|
|
|
|
Domestic |
|
612 |
|
|
574 |
|
|
38 |
|
|
6.6 |
% |
|
Export |
|
2,322 |
|
|
2,203 |
|
|
119 |
|
|
5.4 |
% |
|
Cargo and
Other |
|
124 |
|
|
137 |
|
|
(13 |
) |
|
-9.5 |
% |
|
Total
International Package |
|
3,058 |
|
|
2,914 |
|
|
144 |
|
|
4.9 |
% |
|
Supply Chain &
Freight: |
|
|
|
|
|
|
|
|
Forwarding and Logistics |
|
1,827 |
|
|
1,586 |
|
|
241 |
|
|
15.2 |
% |
|
Freight |
|
709 |
|
|
656 |
|
|
53 |
|
|
8.1 |
% |
|
Other |
|
186 |
|
|
178 |
|
|
8 |
|
|
4.5 |
% |
|
Total
Supply Chain & Freight |
|
2,722 |
|
|
2,420 |
|
|
302 |
|
|
12.5 |
% |
|
Consolidated |
$ |
15,315 |
|
$ |
14,418 |
|
$ |
897 |
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
Consolidated volume (in
millions) |
|
1,187 |
|
|
1,141 |
|
|
46 |
|
|
4.0 |
% |
|
|
|
|
|
|
|
|
|
|
Operating weekdays |
|
64 |
|
|
64 |
|
|
- |
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
Average Daily Package Volume (in thousands): |
|
|
|
|
|
|
|
U.S. Domestic
Package: |
|
|
|
|
|
|
|
|
Next Day
Air |
|
1,316 |
|
|
1,266 |
|
|
50 |
|
|
3.9 |
% |
|
Deferred |
|
1,245 |
|
|
1,196 |
|
|
49 |
|
|
4.1 |
% |
|
Ground |
|
13,014 |
|
|
12,725 |
|
|
289 |
|
|
2.3 |
% |
|
Total
U.S. Domestic Package |
|
15,575 |
|
|
15,187 |
|
|
388 |
|
|
2.6 |
% |
|
International
Package: |
|
|
|
|
|
|
|
|
Domestic |
|
1,677 |
|
|
1,517 |
|
|
160 |
|
|
10.5 |
% |
|
Export |
|
1,290 |
|
|
1,130 |
|
|
160 |
|
|
14.2 |
% |
|
Total
International Package |
|
2,967 |
|
|
2,647 |
|
|
320 |
|
|
12.1 |
% |
|
Consolidated |
|
18,542 |
|
|
17,834 |
|
|
708 |
|
|
4.0 |
% |
|
|
|
|
|
|
|
|
|
|
Average Revenue
Per Piece: |
|
|
|
|
|
|
|
|
U.S. Domestic
Package: |
|
|
|
|
|
|
|
|
Next Day
Air |
$ |
19.76 |
|
$ |
19.44 |
|
$ |
0.32 |
|
|
1.6 |
% |
|
Deferred |
|
12.17 |
|
|
11.95 |
|
|
0.22 |
|
|
1.8 |
% |
|
Ground |
|
8.29 |
|
|
8.10 |
|
|
0.19 |
|
|
2.3 |
% |
|
Total
U.S. Domestic Package |
|
9.57 |
|
|
9.35 |
|
|
0.22 |
|
|
2.4 |
% |
|
International
Package: |
|
|
|
|
|
|
|
|
Domestic |
|
5.70 |
|
|
5.91 |
|
|
(0.21 |
) |
|
-3.6 |
% |
|
Export |
|
28.13 |
|
|
30.46 |
|
|
(2.33 |
) |
|
-7.6 |
% |
|
Total
International Package |
|
15.45 |
|
|
16.39 |
|
|
(0.94 |
) |
|
-5.7 |
% |
|
Consolidated |
$ |
10.50 |
|
$ |
10.39 |
|
$ |
0.11 |
|
|
1.1 |
% |
|
United Parcel Service,
Inc. |
Supplemental Analysis of Currency and UPS
Freight |
Currency Neutral Revenue Per
Piece |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Currency Neutral |
|
|
|
|
March 31 |
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
2016 |
|
% Change |
|
Currency |
|
2017* |
|
% Change |
|
Average Revenue
Per Piece: |
|
|
|
|
|
|
|
|
|
|
|
|
International
Package: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic |
$ |
5.70 |
|
$ |
5.91 |
|
|
-3.6 |
% |
|
$ |
0.29 |
|
|
$ |
5.99 |
|
1.4 |
% |
|
Export |
|
28.13 |
|
|
30.46 |
|
|
-7.6 |
% |
|
|
1.67 |
|
|
|
29.80 |
|
-2.2 |
% |
|
Total
International Package |
|
15.45 |
|
|
16.39 |
|
|
-5.7 |
% |
|
|
0.89 |
|
|
|
16.34 |
|
-0.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
$ |
10.50 |
|
$ |
10.39 |
|
|
1.1 |
% |
|
$ |
0.15 |
|
|
$ |
10.65 |
|
2.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Neutral Revenue |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Currency Neutral |
|
|
|
|
March 31 |
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
2016 |
|
% Change |
|
Currency |
|
2017* |
|
% Change |
|
Revenue (in
millions): |
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
9,535 |
|
$ |
9,084 |
|
|
5.0 |
% |
|
$ |
- |
|
|
$ |
9,535 |
|
5.0 |
% |
|
International Package |
|
3,058 |
|
|
2,914 |
|
|
4.9 |
% |
|
|
170 |
|
|
|
3,228 |
|
10.8 |
% |
|
Supply
Chain & Freight |
|
2,722 |
|
|
2,420 |
|
|
12.5 |
% |
|
|
10 |
|
|
|
2,732 |
|
12.9 |
% |
|
Total
revenue |
$ |
15,315 |
|
$ |
14,418 |
|
|
6.2 |
% |
|
$ |
180 |
|
|
$ |
15,495 |
|
7.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency Neutral Operating
Profit |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
Currency Neutral |
|
|
|
|
March 31 |
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
2016 |
|
% Change |
|
Currency |
|
2017* |
|
% Change |
|
Operating
profit (in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Domestic Package |
$ |
1,076 |
|
$ |
1,102 |
|
|
-2.4 |
% |
|
$ |
- |
|
|
$ |
1,076 |
|
-2.4 |
% |
|
International Package |
|
529 |
|
|
574 |
|
|
-7.8 |
% |
|
|
119 |
|
|
|
648 |
|
12.9 |
% |
|
Supply
Chain & Freight |
|
179 |
|
|
147 |
|
|
21.8 |
% |
|
|
1 |
|
|
|
180 |
|
22.4 |
% |
|
Total
operating profit |
$ |
1,784 |
|
$ |
1,823 |
|
|
-2.1 |
% |
|
$ |
120 |
|
|
$ |
1,904 |
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts
adjusted for period over period foreign currency exchange rate and
hedging differences |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Selected Operating Data - First
Quarter |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|
March 31 |
|
|
|
|
|
|
|
|
|
2017 |
|
|
2016 |
|
Change |
|
% Change |
|
|
|
|
|
LTL revenue (in
millions) |
$ |
618 |
|
$ |
564 |
|
$ |
54 |
|
|
|
9.6 |
% |
|
|
|
|
|
LTL revenue per LTL
hundredweight |
$ |
23.60 |
|
$ |
23.25 |
|
$ |
0.35 |
|
|
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL shipments (in
thousands) |
|
2,517 |
|
|
2,416 |
|
|
101 |
|
|
|
4.2 |
% |
|
|
|
|
|
LTL shipments per day
(in thousands) |
|
39.3 |
|
|
37.8 |
|
|
1.5 |
|
|
|
4.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL gross weight hauled
(in millions of pounds) |
|
2,619 |
|
|
2,426 |
|
|
193 |
|
|
|
8.0 |
% |
|
|
|
|
|
LTL weight per shipment
(in pounds) |
|
1,041 |
|
|
1,004 |
|
|
37 |
|
|
|
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating weekdays |
|
64 |
|
|
64 |
|
|
- |
|
|
|
0.0 |
% |
|
|
|
|
|
United Parcel Service, Inc. |
Detail of Other Operating Expenses - First
Quarter |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
Three Months Ended |
|
|
|
|
March 31 |
|
|
|
|
2017 |
|
|
2016 |
|
Change |
|
% Change |
Repairs and
maintenance |
$ |
390 |
|
$ |
381 |
|
$ |
9 |
|
2.4 |
% |
Depreciation and
amortization |
|
554 |
|
|
552 |
|
|
2 |
|
0.4 |
% |
Purchased
transportation |
|
2,366 |
|
|
2,024 |
|
|
342 |
|
16.9 |
% |
Fuel |
|
621 |
|
|
434 |
|
|
187 |
|
43.1 |
% |
Other occupancy |
|
299 |
|
|
269 |
|
|
30 |
|
11.2 |
% |
Other expenses |
|
1,170 |
|
|
1,082 |
|
|
88 |
|
8.1 |
% |
Total other operating
expenses |
$ |
5,400 |
|
$ |
4,742 |
|
$ |
658 |
|
13.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share and Share Data - First
Quarter |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
(amounts
in millions, except per share data) |
|
|
March 31 |
|
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
Numerator: |
|
|
|
|
|
|
|
Net
income |
|
|
$ |
1,158 |
|
$ |
1,131 |
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
Weighted-average shares |
|
|
|
869 |
|
|
885 |
|
|
Deferred
compensation obligations |
|
|
|
1 |
|
|
1 |
|
|
Vested
portion of restricted units |
|
|
|
4 |
|
|
3 |
|
|
Denominator for basic
earnings per share |
|
|
|
874 |
|
|
889 |
|
|
|
|
|
|
|
|
|
|
Effect of dilutive
securities: |
|
|
|
|
|
|
|
Restricted units |
|
|
|
4 |
|
|
4 |
|
|
Stock
options |
|
|
|
1 |
|
|
1 |
|
|
Denominator for diluted
earnings per share |
|
|
|
879 |
|
|
894 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
|
|
$ |
1.32 |
|
$ |
1.27 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
|
$ |
1.32 |
|
$ |
1.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of shares outstanding as of March 31,
2017: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A shares |
|
|
|
179 |
|
|
|
|
Class B shares |
|
|
|
689 |
|
|
|
|
Total
shares outstanding |
|
|
|
868 |
|
|
|
|
|
|
|
|
|
|
|
|
United Parcel Service, Inc. |
Consolidated Balance sheets - March 31, 2017
and December 31, 2016 |
(unaudited) |
|
(amounts
in millions) |
|
March 31, |
|
December 31, |
|
|
2017 |
|
|
2016 |
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and
marketable securities |
|
$ |
3,718 |
|
$ |
4,567 |
Other
current assets |
|
|
7,776 |
|
|
9,282 |
Total
Current Assets |
|
|
11,494 |
|
|
13,849 |
Property, Plant and
Equipment |
|
|
44,509 |
|
|
43,674 |
Less
accumulated depreciation and amortization |
|
|
25,284 |
|
|
24,874 |
|
|
19,225 |
|
|
18,800 |
Other Assets |
|
|
7,661 |
|
|
7,728 |
|
$ |
38,380 |
|
$ |
40,377 |
|
|
|
|
LIABILITIES AND
SHAREOWNERS' EQUITY |
|
|
|
|
Current
Liabilities |
|
$ |
11,406 |
|
$ |
11,730 |
Long-Term Debt |
|
|
12,938 |
|
|
12,394 |
Pension and
Postretirement Benefit Obligations |
|
|
10,393 |
|
|
12,694 |
Deferred Taxes, Credits
and Other Liabilities |
|
|
3,083 |
|
|
3,130 |
Shareowners'
Equity |
|
|
560 |
|
|
429 |
|
$ |
38,380 |
|
$ |
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) |
|
March 31 |
|
Cash flows from
operating activities |
|
$ |
239 |
|
|
Cash flows from
investing activities |
|
|
(920 |
) |
|
Cash flows from
financing activities |
|
|
(124 |
) |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
16 |
|
|
Net increase (decrease)
in cash and cash equivalents |
|
$ |
(789 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow (non-GAAP
measure) |
|
|
|
|
|
Preliminary |
|
|
Year-to-Date |
|
(amounts in
millions) |
|
March 31 |
|
Cash flows from
operating activities |
|
$ |
239 |
|
|
Capital
expenditures |
|
|
(938 |
) |
|
Proceeds from disposals
of PP&E |
|
|
11 |
|
|
Net change in finance
receivables |
|
|
(11 |
) |
|
Other investing
activities |
|
|
6 |
|
|
Free cash
flow (non-GAAP measure) |
|
$ |
(693 |
) |
|
|
|
|
|
|
|
Amounts are subject to
reclassification. |
|
|
|
United Parcel Service, Inc. |
Aircraft Fleet - As of March 31,
2017 |
(unaudited) |
|
Owned and |
Leases & Charters |
|
|
Description |
Capital Leases |
from Others |
On Order |
Under Option |
Operating: |
|
|
|
|
Boeing 757-200 |
75 |
- |
- |
- |
Boeing 767-300 |
60 |
- |
2 |
- |
Airbus A300-600 |
52 |
- |
- |
- |
Boeing MD-11* |
38 |
- |
- |
- |
Boeing 747-400F |
11 |
- |
- |
- |
Boeing 747-400BCF |
2 |
- |
- |
- |
Boeing 747-8F |
- |
- |
14 |
14 |
Other |
- |
301 |
- |
- |
|
|
|
|
|
Total |
238 |
301 |
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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