Form 8-K UNITED PARCEL SERVICE For: Apr 27
Exhibit 99.1
For Immediate Release
UPS RELEASES 1Q 2021 EARNINGS
•Consolidated Revenue Increased 27%; Growth Across All Segments
•Consolidated Operating Profit Up 158% to $2.8B, Up 164% on an Adjusted* Basis
•Diluted EPS of $5.47; Adjusted Diluted EPS Up 141% to $2.77
ATLANTA – April 27, 2021 – UPS (NYSE:UPS) today announced first-quarter 2021 consolidated revenue of $22.9 billion, a 27% increase over the first quarter of 2020. Consolidated average daily volume increased 14.3% year over year. Consolidated operating profit was $2.8 billion, up 158% compared to the first quarter of 2020, and up 164% on an adjusted basis. Diluted earnings per share were $5.47 for the quarter, 393% above the same period in 2020, and up 141% on an adjusted basis.
For the first-quarter of 2021, GAAP results include a net benefit of $2.4 billion, or $2.70 per diluted share, comprised of an after-tax mark-to-market (MTM) pension benefit of $2.5 billion and after-tax transformation and other charges of $140 million. The MTM benefit was primarily driven by the enactment of the American Rescue Plan Act of 2021 (ARPA). The ARPA, which was signed into law on March 11, 2021, protects certain multi-employer pension plans from becoming insolvent through 2051, thereby eliminating the Company’s liability for potential coordinating benefits related to the Central States Pension Fund. Enactment of the ARPA required the Company to remeasure its UPS IBT Pension plan at current discount rates, which have increased since the previous measurement date. The overall result was a reduction in the pension liability of $6.4 billion.
“I want to thank all UPSers for delivering what matters, including COVID-19 vaccines,” said Carol Tomé, UPS chief executive officer. “During the quarter, we continued to execute our strategy under the better not bigger framework, which enabled us to win the best opportunities in the market and drove record financial results.”
U.S. Domestic Segment
1Q 2021 | Adjusted 1Q 2021 | 1Q 2020 | Adjusted 1Q 2020 | |||||||||||
| Revenue | $14,010M | $11,456M | ||||||||||||
| Operating profit | $1,359M | $1,463M | $364M | $401M | ||||||||||
•Revenue increased 22.3%, led by growth from small and medium-sized businesses.
•Revenue per piece increased 10.2%, driven by Ground products.
•Operating margin was 9.7%; adjusted operating margin was 10.4%.
* “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.
International Segment
1Q 2021 | Adjusted 1Q 2021 | 1Q 2020 | Adjusted 1Q 2020 | |||||||||||
| Revenue | $4,607M | $3,383M | ||||||||||||
| Operating profit | $1,085M | $1,091M | $551M | $558M | ||||||||||
•Average daily volume grew 23.1%, with export growth from all regions.
•Revenue increased 36.2%, led by Asia and Europe.
•Operating margin was 23.6%; adjusted operating margin was 23.7%.
Supply Chain and Freight Segment
1Q 2021 | Adjusted 1Q 2021 | 1Q 2020 | Adjusted 1Q 2020 | |||||||||||
| Revenue | $4,291M | $3,196M | ||||||||||||
| Operating profit | $321M | $395M | $157M | $158M | ||||||||||
•Revenue increased 34.3%, driven by strong demand in nearly all businesses.
•Operating margin was 7.5%; adjusted operating margin was 9.2%.
Outlook
Given continued economic uncertainty, the Company is not providing 2021 revenue or diluted earnings per share guidance; however, it is re-affirming its full-year capital allocation plans. UPS has scheduled its 2021 Investor and Analyst Day for June 9, when it will share further financial details.
Reaffirms Full-Year 2021 Capital Allocation Plans
•The sale of UPS Freight is expected to close in the second quarter.
•Capital expenditures are planned to be about $4.0 billion.
•Long-term debt repayments, including $1.5 billion repaid in the first quarter of 2021, will total $2.5 billion.
•Effective tax rate for the remainder of the year is expected to be around 23.5%.
•The Company has no plans to repurchase shares.
Contacts:
UPS Media Relations: 404-828-7123 or pr@ups.com
UPS Investor Relations: 404-828-6059 (option 2) or investor@ups.com
# # #
Conference Call Information
UPS CEO Carol Tomé and CFO Brian Newman will discuss first-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, April 27, 2021. 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 one of the world’s largest package delivery companies with 2020 revenue of $84.6 billion, and provides a broad range of integrated logistics solutions for customers in more than 220 countries and territories. The company’s more than 540,000 employees embrace a strategy that is simply stated and powerfully executed: Customer First. People Led. Innovation Driven. UPS is committed to being a steward of the environment and positively contributing to the communities we serve around the world. UPS also takes a strong and unwavering stance in support of diversity, equity and inclusion. The company can be found on the Internet at www.ups.com, with more information at www.stories.ups.com and www.investors.ups.com.
Forward-Looking Statements
This release and our filings with the Securities and Exchange Commission contain and in the future may contain “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 “will,” “believe,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” “target,” “plan,” 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 written or oral 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 and our present expectations or anticipated results. These risks and uncertainties, include, but are not limited to: continued uncertainties related to the impact of the COVID-19 pandemic on our business and operations, financial performance and liquidity, 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 regulatory environment in the U.S. or internationally; increased or more complex physical or data security requirements; 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 our brand image; our ability to attract and retain qualified employees; 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 impairment of our assets; increases in our expenses or funding obligations
relating to employee health, retiree health and/or pension benefits; potential additional U.S. or international tax liabilities; potential claims or 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, dispositions, 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, 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 predictions 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.
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 expenses, operating profit, operating margin, other income and (expense), income before income taxes, income tax expense, effective tax rate, net income and earnings per share. We supplement the reporting of revenue, revenue per piece and operating profit with adjusted measures that exclude the period over period impact of foreign currency exchange rate changes and hedging activities, and we disclose free cash flow. 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.
Restructuring and Other Charges
Adjusted operating profit, operating margin, income before income taxes, net income and earnings per share exclude the impact of charges related to restructuring programs, including Transformation strategy costs and asset impairments.
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.
Mark-To-Market Pension and Postretirement Adjustments
We recognize changes in the fair value of plan assets and net actuarial gains and losses in excess of a 10% corridor for our pension and postretirement defined benefit plans immediately as part of other pension income (expense). We supplement the presentation of our income before income taxes, net income and earnings per share with non-GAAP measures that exclude the impact of gains and losses recognized in excess of the 10% corridor and the related income tax effects. We believe excluding these mark-to-market impacts provides important supplemental information by removing the volatility associated with short-term changes in market interest rates, equity values, and similar factors.
The deferred income tax effects of mark-to-market pension and postretirement adjustments are calculated by multiplying the statutory tax rates applicable in each tax jurisdiction, including the U.S. federal jurisdiction and various U.S. state and non-U.S. jurisdictions, by the adjustments.
Free Cash Flow
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. We believe free cash flow is an important indicator of how much cash is generated by regular business operations and we use this as a measure of incremental cash available to invest in our business, meet our debt obligations and return cash to shareowners.
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 adjusted financial information does not represent a comprehensive basis of accounting. Therefore, our adjusted financial information may not be comparable to similarly titled information reported by other companies.
Reconciliation of GAAP and Non-GAAP Income Statement
(in millions, except per share amounts):
| Three Months Ended March 31, 2021 | |||||||||||||||||||||||
| As-Reported (GAAP) | Pension MTM Adj.(1) | Transformation & Other Adj.(2) | As-Adjusted (Non-GAAP) | ||||||||||||||||||||
| Operating profit: | |||||||||||||||||||||||
| U.S. Domestic Package | $ | 1,359 | $ | — | $ | 104 | $ | 1,463 | |||||||||||||||
| International Package | 1,085 | — | 6 | 1,091 | |||||||||||||||||||
| Supply Chain & Freight | 321 | — | 74 | 395 | |||||||||||||||||||
| Operating Profit | 2,765 | — | 184 | 2,949 | |||||||||||||||||||
| Other Income and (Expense): | |||||||||||||||||||||||
| Other pension income (expense) | 3,603 | (3,290) | — | 313 | |||||||||||||||||||
| Investment income and other | 13 | — | — | 13 | |||||||||||||||||||
| Interest expense | (177) | — | — | (177) | |||||||||||||||||||
| Total Other Income (Expense) | $ | 3,439 | $ | (3,290) | $ | — | $ | 149 | |||||||||||||||
| Income Before Income Taxes | 6,204 | (3,290) | 184 | 3,098 | |||||||||||||||||||
| Income Tax Expense | 1,412 | (788) | 44 | 668 | |||||||||||||||||||
| Net Income | $ | 4,792 | $ | (2,502) | $ | 140 | $ | 2,430 | |||||||||||||||
| Basic Earnings Per Share | $ | 5.50 | $ | (2.87) | $ | 0.16 | $ | 2.79 | |||||||||||||||
| Diluted Earnings Per Share | $ | 5.47 | $ | (2.86) | $ | 0.16 | $ | 2.77 | |||||||||||||||
(1) Represents a mark-to-market gain recognized outside of a 10% corridor for the UPS IBT Pension Plan
(2) Transformation & other of $184 million reflects a valuation allowance of $66 million related to the planned divestiture of UPS Freight, other employee benefits costs of $76 million and other costs of $42 million.
Reconciliation of GAAP and Non-GAAP Revenue, Revenue Per Piece, and Adjusted Operating Profit
(in millions, except per piece amounts):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2021 As-Reported (GAAP) | 2020 As-Reported (GAAP) | % Change (GAAP) | Currency Impact | 2021 Currency Neutral (Non-GAAP)(1) | % Change (Non-GAAP) | ||||||||||||||||||||||||||||||
| Average Revenue Per Piece: | |||||||||||||||||||||||||||||||||||
| International Package: | |||||||||||||||||||||||||||||||||||
| Domestic | $ | 7.33 | $ | 6.44 | 13.8 | % | $ | (0.46) | $ | 6.87 | 6.7 | % | |||||||||||||||||||||||
| Export | 31.10 | 28.32 | 9.8 | % | (1.04) | 30.06 | 6.1 | % | |||||||||||||||||||||||||||
| Total International Package | $ | 18.50 | $ | 16.48 | 12.3 | % | $ | (0.73) | $ | 17.77 | 7.8 | % | |||||||||||||||||||||||
| Consolidated | $ | 12.12 | $ | 10.88 | 11.4 | % | $ | (0.12) | $ | 12.00 | 10.3 | % | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| U.S. Domestic Package | $ | 14,010 | $ | 11,456 | 22.3 | % | $ | — | $ | 14,010 | 22.3 | % | |||||||||||||||||||||||
| International Package | 4,607 | 3,383 | 36.2 | % | (176) | 4,431 | 31.0 | % | |||||||||||||||||||||||||||
| Supply Chain & Freight | 4,291 | 3,196 | 34.3 | % | (45) | 4,246 | 32.9 | % | |||||||||||||||||||||||||||
| Total revenue | $ | 22,908 | $ | 18,035 | 27.0 | % | $ | (221) | $ | 22,687 | 25.8 | % | |||||||||||||||||||||||
(1) Amounts adjusted for period over period foreign currency exchange rate and hedging differences | |||||||||||||||||||||||||||||||||||
2021 As-Adjusted (Non-GAAP)(1) | 2020 As-Adjusted (Non-GAAP)(1) | % Change (Non-GAAP) | Currency Impact | 2021 As-Adjusted Currency Neutral (Non-GAAP)(2) | % Change (Non-GAAP) | ||||||||||||||||||||||||||||||
| As-Adjusted Operating Profit: | |||||||||||||||||||||||||||||||||||
| U.S. Domestic Package | $ | 1,463 | $ | 401 | 264.8 | % | $ | — | $ | 1,463 | 264.8 | % | |||||||||||||||||||||||
| International Package | 1,091 | 558 | 95.5 | % | (39) | 1,052 | 88.5 | % | |||||||||||||||||||||||||||
| Supply Chain & Freight | 395 | 158 | 150.0 | % | 2 | 397 | 151.3 | % | |||||||||||||||||||||||||||
| Total operating profit | $ | 2,949 | $ | 1,117 | 164.0 | % | $ | (37) | $ | 2,912 | 160.7 | % | |||||||||||||||||||||||
(1) Amounts adjusted for transformation & other | |||||||||||||||||||||||||||||||||||
(2) Amounts adjusted for transformation & other and period over period foreign currency exchange rate and hedging differences | |||||||||||||||||||||||||||||||||||
Reconciliation of Free Cash Flow (Non-GAAP measure)
(in millions):
| Three Months Ended March 31, | ||||||||||||||
| 2021 | ||||||||||||||
| Cash flows from operating activities | $ | 4,531 | ||||||||||||
| Capital expenditures | (834) | |||||||||||||
| Proceeds from disposals of PP&E | 10 | |||||||||||||
| Net change in finance receivables | 11 | |||||||||||||
| Other investing activities | (6) | |||||||||||||
| Free Cash Flow (Non-GAAP measure) | $ | 3,712 | ||||||||||||
Amounts are subject to reclassification.
Exhibit 99.2
United Parcel Service, Inc.
Selected Financial Data - First Quarter
(unaudited)
| Three Months Ended | ||||||||||||||
| March 31 | ||||||||||||||
| 2021 | 2020 | Change | % Change | |||||||||||
| (amounts in millions, except per share data) | ||||||||||||||
| Statement of Income Data: | ||||||||||||||
| Revenue: | ||||||||||||||
| U.S. Domestic Package | $ | 14,010 | $ | 11,456 | $ | 2,554 | 22.3 | % | ||||||
| International Package | 4,607 | 3,383 | 1,224 | 36.2 | % | |||||||||
| Supply Chain & Freight | 4,291 | 3,196 | 1,095 | 34.3 | % | |||||||||
| Total revenue | 22,908 | 18,035 | 4,873 | 27.0 | % | |||||||||
| Operating expenses: | ||||||||||||||
| U.S. Domestic Package | 12,651 | 11,092 | 1,559 | 14.1 | % | |||||||||
| International Package | 3,522 | 2,832 | 690 | 24.4 | % | |||||||||
| Supply Chain & Freight | 3,970 | 3,039 | 931 | 30.6 | % | |||||||||
| Total operating expenses | 20,143 | 16,963 | 3,180 | 18.7 | % | |||||||||
| Operating profit: | ||||||||||||||
| U.S. Domestic Package | 1,359 | 364 | 995 | 273.4 | % | |||||||||
| International Package | 1,085 | 551 | 534 | 96.9 | % | |||||||||
| Supply Chain & Freight | 321 | 157 | 164 | 104.5 | % | |||||||||
| Total operating profit | 2,765 | 1,072 | 1,693 | 157.9 | % | |||||||||
| Other income (expense): | ||||||||||||||
| Other pension income (expense) | 3,603 | 327 | 3,276 | N/M | ||||||||||
| Investment income and other | 13 | 18 | (5) | (27.8) | % | |||||||||
| Interest expense | (177) | (167) | (10) | 6.0 | % | |||||||||
| Total other income (expense) | 3,439 | 178 | 3,261 | N/M | ||||||||||
| Income before income taxes | 6,204 | 1,250 | 4,954 | 396.3 | % | |||||||||
| Income tax expense (benefit) | 1,412 | 285 | 1,127 | 395.4 | % | |||||||||
| Net income | $ | 4,792 | $ | 965 | $ | 3,827 | 396.6 | % | ||||||
| Net income as a percentage of revenue | 20.9 | % | 5.4 | % | ||||||||||
| Per share amounts: | ||||||||||||||
| Basic earnings per share | $ | 5.50 | $ | 1.12 | $ | 4.38 | 391.1 | % | ||||||
| Diluted earnings per share | $ | 5.47 | $ | 1.11 | $ | 4.36 | 392.8 | % | ||||||
| Weighted-average shares outstanding: | ||||||||||||||
| Basic | 872 | 864 | 8 | 0.9 | % | |||||||||
| Diluted | 876 | 869 | 7 | 0.8 | % | |||||||||
As adjusted income data (1): | ||||||||||||||
| Operating profit: | ||||||||||||||
| U.S. Domestic Package | $ | 1,463 | $ | 401 | $ | 1,062 | 264.8 | % | ||||||
| International Package | 1,091 | 558 | 533 | 95.5 | % | |||||||||
| Supply Chain & Freight | 395 | 158 | 237 | 150.0 | % | |||||||||
| Total operating profit | 2,949 | 1,117 | 1,832 | 164.0 | % | |||||||||
| Total other income (expense) | $ | 149 | $ | 178 | $ | (29) | (16.3) | % | ||||||
| Income before income taxes | $ | 3,098 | $ | 1,295 | $ | 1,803 | 139.2 | % | ||||||
| Net income | $ | 2,430 | $ | 1,000 | $ | 1,430 | 143.0 | % | ||||||
| Basic earnings per share | $ | 2.79 | $ | 1.16 | $ | 1.63 | 140.5 | % | ||||||
| Diluted earnings per share | $ | 2.77 | $ | 1.15 | $ | 1.62 | 140.9 | % | ||||||
(1) See Non-GAAP schedules for reconciliation of adjustments.
Certain prior year amounts have been reclassified to conform to the current year presentation.
United Parcel Service, Inc.
Selected Operating Data - First Quarter
(unaudited)
| Three Months Ended | ||||||||||||||
| March 31 | ||||||||||||||
| 2021 | 2020 | Change | % Change | |||||||||||
| Revenue (in millions): | ||||||||||||||
| U.S. Domestic Package: | ||||||||||||||
| Next Day Air | $ | 2,331 | $ | 2,055 | $ | 276 | 13.4 | % | ||||||
| Deferred | 1,260 | 1,197 | 63 | 5.3 | % | |||||||||
| Ground | 10,419 | 8,204 | 2,215 | 27.0 | % | |||||||||
| Total U.S. Domestic Package | 14,010 | 11,456 | 2,554 | 22.3 | % | |||||||||
| International Package: | ||||||||||||||
| Domestic | 928 | 688 | 240 | 34.9 | % | |||||||||
| Export | 3,493 | 2,561 | 932 | 36.4 | % | |||||||||
| Cargo and Other | 186 | 134 | 52 | 38.8 | % | |||||||||
| Total International Package | 4,607 | 3,383 | 1,224 | 36.2 | % | |||||||||
| Supply Chain & Freight: | ||||||||||||||
| Forwarding | 2,072 | 1,373 | 699 | 50.9 | % | |||||||||
| Logistics | 1,104 | 845 | 259 | 30.7 | % | |||||||||
| Freight | 767 | 766 | 1 | 0.1 | % | |||||||||
| Other | 348 | 212 | 136 | 64.2 | % | |||||||||
| Total Supply Chain & Freight | 4,291 | 3,196 | 1,095 | 34.3 | % | |||||||||
| Consolidated | $ | 22,908 | $ | 18,035 | $ | 4,873 | 27.0 | % | ||||||
| Consolidated volume (in millions) | 1,521 | 1,352 | 169 | 12.5 | % | |||||||||
| Operating weekdays | 63 | 64 | (1) | (1.6) | % | |||||||||
| Average Daily Package Volume (in thousands): | ||||||||||||||
| U.S. Domestic Package: | ||||||||||||||
| Next Day Air | 2,012 | 1,883 | 129 | 6.9 | % | |||||||||
| Deferred | 1,513 | 1,492 | 21 | 1.4 | % | |||||||||
| Ground | 16,827 | 14,669 | 2,158 | 14.7 | % | |||||||||
| Total U.S. Domestic Package | 20,352 | 18,044 | 2,308 | 12.8 | % | |||||||||
| International Package: | ||||||||||||||
| Domestic | 2,010 | 1,668 | 342 | 20.5 | % | |||||||||
| Export | 1,783 | 1,413 | 370 | 26.2 | % | |||||||||
| Total International Package | 3,793 | 3,081 | 712 | 23.1 | % | |||||||||
| Consolidated | 24,145 | 21,125 | 3,020 | 14.3 | % | |||||||||
| Average Revenue Per Piece: | ||||||||||||||
| U.S. Domestic Package: | ||||||||||||||
| Next Day Air | $ | 18.39 | $ | 17.05 | $ | 1.34 | 7.9 | % | ||||||
| Deferred | 13.22 | 12.54 | 0.68 | 5.4 | % | |||||||||
| Ground | 9.83 | 8.74 | 1.09 | 12.5 | % | |||||||||
| Total U.S. Domestic Package | 10.93 | 9.92 | 1.01 | 10.2 | % | |||||||||
| International Package: | ||||||||||||||
| Domestic | 7.33 | 6.44 | 0.89 | 13.8 | % | |||||||||
| Export | 31.10 | 28.32 | 2.78 | 9.8 | % | |||||||||
| Total International Package | 18.50 | 16.48 | 2.02 | 12.3 | % | |||||||||
| Consolidated | $ | 12.12 | $ | 10.88 | $ | 1.24 | 11.4 | % | ||||||
Certain prior year amounts have been reclassified to conform to the current year presentation.
United Parcel Service, Inc.
Detail of Operating Expenses - First Quarter
(unaudited)
| Three Months Ended | |||||||||||||||||||||||
| March 31 | |||||||||||||||||||||||
| 2021 | 2020 | Change | % Change | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Compensation and benefits | $ | 11,483 | $ | 10,086 | $ | 1,397 | 13.9 | % | |||||||||||||||
| Repairs and maintenance | 619 | 563 | 56 | 9.9 | % | ||||||||||||||||||
| Depreciation and amortization | 722 | 648 | 74 | 11.4 | % | ||||||||||||||||||
| Purchased transportation | 4,243 | 2,931 | 1,312 | 44.8 | % | ||||||||||||||||||
| Fuel | 807 | 761 | 46 | 6.0 | % | ||||||||||||||||||
| Other occupancy | 466 | 383 | 83 | 21.7 | % | ||||||||||||||||||
| Other expenses | 1,803 | 1,591 | 212 | 13.3 | % | ||||||||||||||||||
| Total other operating expenses | $ | 20,143 | $ | 16,963 | $ | 3,180 | 18.7 | % | |||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation.
United Parcel Service, Inc.
Consolidated Balance Sheets
March 31, 2021 (unaudited) and December 31, 2020
| March 31, 2021 | December 31, 2020 | ||||||||||
| (amounts in millions) | |||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 7,731 | $ | 5,910 | |||||||
| Marketable securities | 351 | 406 | |||||||||
| Accounts receivables | 10,258 | 10,888 | |||||||||
| Less: Allowance for credit losses | (131) | (138) | |||||||||
| Accounts receivable, net | 10,127 | 10,750 | |||||||||
| Assets held for sale | 1,135 | 1,197 | |||||||||
| Other current assets | 1,641 | 1,953 | |||||||||
| Total Current Assets | 20,985 | 20,216 | |||||||||
| Property, Plant and Equipment, Net | 32,455 | 32,254 | |||||||||
| Operating Lease Right-Of-Use Assets | 3,044 | 3,073 | |||||||||
| Goodwill | 3,346 | 3,367 | |||||||||
| Intangible Assets, Net | 2,268 | 2,274 | |||||||||
| Investments and Restricted Cash | 25 | 25 | |||||||||
| Deferred Income Tax Assets | 243 | 527 | |||||||||
| Other Non-Current Assets | 946 | 672 | |||||||||
| Total Assets | $ | 63,312 | $ | 62,408 | |||||||
| LIABILITIES AND SHAREOWNERS' EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Current maturities of long-term debt, commercial paper and finance leases | $ | 1,811 | $ | 2,623 | |||||||
| Current maturities of operating leases | 548 | 560 | |||||||||
| Accounts payable | 6,305 | 6,455 | |||||||||
| Accrued wage and withholdings | 3,701 | 3,569 | |||||||||
| Self-insurance reserves | 1,103 | 1,085 | |||||||||
| Accrued group welfare and retirement plan contributions | 934 | 927 | |||||||||
| Liabilities to be disposed of | 296 | 347 | |||||||||
| Other current liabilities | 1,608 | 1,450 | |||||||||
| Total Current Liabilities | 16,306 | 17,016 | |||||||||
| Long-Term Debt and Finance Leases | 21,916 | 22,031 | |||||||||
| Non-Current Operating Leases | 2,524 | 2,540 | |||||||||
| Pension and Postretirement Benefit Obligations | 9,594 | 15,817 | |||||||||
| Deferred Income Tax Liabilities | 1,997 | 488 | |||||||||
| Other Non-Current Liabilities | 3,816 | 3,847 | |||||||||
| Shareowners' Equity: | |||||||||||
| Class A common stock | 2 | 2 | |||||||||
| Class B common stock | 7 | 7 | |||||||||
| Additional paid-in capital | 1,049 | 865 | |||||||||
| Retained earnings | 10,748 | 6,896 | |||||||||
| Accumulated other comprehensive loss | (4,659) | (7,113) | |||||||||
| Deferred compensation obligations | 15 | 20 | |||||||||
| Less: Treasury stock | (15) | (20) | |||||||||
| Total Equity for Controlling Interest | 7,147 | 657 | |||||||||
| Noncontrolling interests | 12 | 12 | |||||||||
| Total Shareowners' Equity | 7,159 | 669 | |||||||||
| Total Liabilities and Sharewoners' Equity | $ | 63,312 | $ | 62,408 | |||||||
Certain prior year amounts have been reclassified to conform to the current year presentation.
United Parcel Service, Inc.
Statements of Consolidated Cash Flows
(unaudited)
| (amounts in millions) | Three Months Ended | ||||||||||||||||
| March 31, | |||||||||||||||||
| 2021 | 2020 | ||||||||||||||||
| Cash Flows From Operating Activities: | |||||||||||||||||
| Net income | $ | 4,792 | $ | 965 | |||||||||||||
| Adjustments to reconcile net income to net cash from operating activities: | |||||||||||||||||
| Depreciation and amortization | 722 | 648 | |||||||||||||||
| Pension and postretirement benefit expense | (3,024) | 160 | |||||||||||||||
| Pension and postretirement benefit contributions | (215) | (222) | |||||||||||||||
| Self-insurance reserves | 4 | 124 | |||||||||||||||
| Deferred tax (benefit) expense | 942 | 86 | |||||||||||||||
| Stock compensation expense | 315 | 231 | |||||||||||||||
| Other (gains) losses | 57 | 33 | |||||||||||||||
| Changes in assets and liabilities, net of effects of business acquisitions: | |||||||||||||||||
| Accounts receivable | 435 | 1,223 | |||||||||||||||
| Other assets | 363 | 209 | |||||||||||||||
| Accounts payable | (261) | (1,101) | |||||||||||||||
| Accrued wages and withholdings | 199 | 83 | |||||||||||||||
| Other liabilities | 180 | 102 | |||||||||||||||
| Other operating activities | 22 | 9 | |||||||||||||||
| Net cash from operating activities | 4,531 | 2,550 | |||||||||||||||
| Cash Flows From Investing Activities: | |||||||||||||||||
| Capital expenditures | (834) | (933) | |||||||||||||||
| Proceeds from disposals of property, plant and equipment | 10 | 1 | |||||||||||||||
| Purchases of marketable securities | (78) | (80) | |||||||||||||||
| Sales and maturities of marketable securities | 134 | 80 | |||||||||||||||
| Net change in finance receivables | 11 | 3 | |||||||||||||||
| Cash paid for business acquisitions, net of cash and cash equivalents acquired | (3) | — | |||||||||||||||
| Other investing activities | (6) | (5) | |||||||||||||||
| Net cash used in investing activities | (766) | (934) | |||||||||||||||
| Cash Flows From Financing Activities: | |||||||||||||||||
| Net change in short-term debt | 697 | (91) | |||||||||||||||
| Proceeds from long-term borrowings | — | 4,253 | |||||||||||||||
| Repayments of long-term borrowings | (1,528) | (687) | |||||||||||||||
| Purchases of common stock | — | (220) | |||||||||||||||
| Issuances of common stock | 78 | 70 | |||||||||||||||
| Dividends | (858) | (840) | |||||||||||||||
| Other financing activities | (334) | (318) | |||||||||||||||
| Net cash (used in) / from financing activities | (1,945) | 2,167 | |||||||||||||||
| Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | 1 | (65) | |||||||||||||||
| Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 1,821 | 3,718 | |||||||||||||||
| Cash, Cash Equivalents and Restricted Cash: | |||||||||||||||||
| Beginning of period | 5,910 | 5,238 | |||||||||||||||
| End of period | $ | 7,731 | $ | 8,956 | |||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation.
United Parcel Service, Inc.
Reconciliation of Free Cash Flow (Non-GAAP measure)
(unaudited)
| (amounts in millions): | Three Months Ended | ||||||||||||||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||
| Cash flows from operating activities | $ | 4,531 | $ | 2,550 | |||||||||||||||||||||||||||||||
| Capital expenditures | (834) | (933) | |||||||||||||||||||||||||||||||||
| Proceeds from disposals of PP&E | 10 | 1 | |||||||||||||||||||||||||||||||||
| Net change in finance receivables | 11 | 3 | |||||||||||||||||||||||||||||||||
| Other investing activities | (6) | (5) | |||||||||||||||||||||||||||||||||
| Free Cash Flow (Non-GAAP measure) | $ | 3,712 | $ | 1,616 | |||||||||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation.
United Parcel Service, Inc.
Supplemental Analysis of Currency - First Quarter
| Currency Neutral Revenue Per Piece, Revenue and Operating Profit | |||||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||||
| Three Months Ended | Currency | ||||||||||||||||||||||||||||||||||
| March 31 | Neutral | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | % Change | Currency | 2021 (1) | % Change | ||||||||||||||||||||||||||||||
| Average Revenue Per Piece: | |||||||||||||||||||||||||||||||||||
| International Package: | |||||||||||||||||||||||||||||||||||
| Domestic | $ | 7.33 | $ | 6.44 | 13.8 | % | $ | (0.46) | $ | 6.87 | 6.7 | % | |||||||||||||||||||||||
| Export | 31.10 | 28.32 | 9.8 | % | (1.04) | 30.06 | 6.1 | % | |||||||||||||||||||||||||||
| Total International Package | $ | 18.50 | $ | 16.48 | 12.3 | % | $ | (0.73) | $ | 17.77 | 7.8 | % | |||||||||||||||||||||||
| Consolidated | $ | 12.12 | $ | 10.88 | 11.4 | % | $ | (0.12) | $ | 12.00 | 10.3 | % | |||||||||||||||||||||||
| Three Months Ended | Currency | ||||||||||||||||||||||||||||||||||
| March 31 | Neutral | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | % Change | Currency | 2021(1) | % Change | ||||||||||||||||||||||||||||||
| Revenue (in millions): | |||||||||||||||||||||||||||||||||||
| U.S. Domestic Package | $ | 14,010 | $ | 11,456 | 22.3 | % | $ | — | $ | 14,010 | 22.3 | % | |||||||||||||||||||||||
| International Package | 4,607 | 3,383 | 36.2 | % | (176) | 4,431 | 31.0 | % | |||||||||||||||||||||||||||
| Supply Chain & Freight | 4,291 | 3,196 | 34.3 | % | (45) | 4,246 | 32.9 | % | |||||||||||||||||||||||||||
| Total revenue | $ | 22,908 | $ | 18,035 | 27.0 | % | $ | (221) | $ | 22,687 | 25.8 | % | |||||||||||||||||||||||
| Three Months Ended | Currency | ||||||||||||||||||||||||||||||||||
| March 31 | Neutral | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | % Change | Currency | 2021(1) | % Change | ||||||||||||||||||||||||||||||
As-Adjusted Operating Profit (in millions)(2): | |||||||||||||||||||||||||||||||||||
| U.S. Domestic Package | $ | 1,463 | $ | 401 | 264.8 | % | $ | — | $ | 1,463 | 264.8 | % | |||||||||||||||||||||||
| International Package | 1,091 | 558 | 95.5 | % | (39) | 1,052 | 88.5 | % | |||||||||||||||||||||||||||
| Supply Chain & Freight | 395 | 158 | 150.0 | % | 2 | 397 | 151.3 | % | |||||||||||||||||||||||||||
| Total operating profit | $ | 2,949 | $ | 1,117 | 164.0 | % | $ | (37) | $ | 2,912 | 160.7 | % | |||||||||||||||||||||||
| (1) Amounts adjusted for period over period foreign currency exchange rate and hedging differences | |||||||||||||||||||||||||||||||||||
| (2) Amounts adjusted for transformation & other | |||||||||||||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation.
United Parcel Service, Inc.
Reconciliation of GAAP and As Adjusted Income Statement Data
(in millions, except per share amounts):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||
| As-Reported (GAAP) | Pension MTM Adj(1). | Transformation & Other Adj.(2) | As-Adjusted (Non-GAAP) | As-Reported (GAAP) | Transformation & Other Adj.(3) | As-Adjusted (Non-GAAP) | |||||||||||||||||||||||||||||||||||
| U.S. Domestic Package | $ | 1,359 | $ | — | $ | 104 | 1,463 | $ | 364 | $ | 37 | $ | 401 | ||||||||||||||||||||||||||||
| International Package | 1,085 | — | 6 | 1,091 | 551 | 7 | 558 | ||||||||||||||||||||||||||||||||||
| Supply Chain & Freight | 321 | — | 74 | 395 | 157 | 1 | 158 | ||||||||||||||||||||||||||||||||||
| Operating profit | 2,765 | — | 184 | 2,949 | 1,072 | 45 | 1,117 | ||||||||||||||||||||||||||||||||||
| Other Income and (Expense): | |||||||||||||||||||||||||||||||||||||||||
| Other pension income (expense) | 3,603 | (3,290) | — | 313 | 327 | — | 327 | ||||||||||||||||||||||||||||||||||
| Investment income and other | 13 | — | — | 13 | 18 | — | 18 | ||||||||||||||||||||||||||||||||||
| Interest expense | (177) | — | — | (177) | (167) | — | (167) | ||||||||||||||||||||||||||||||||||
| Total Other Income (Expense) | $ | 3,439 | $ | (3,290) | $ | — | $ | 149 | $ | 178 | $ | — | $ | 178 | |||||||||||||||||||||||||||
| Income before income taxes | 6,204 | (3,290) | 184 | 3,098 | 1,250 | 45 | 1,295 | ||||||||||||||||||||||||||||||||||
| Income tax expense | 1,412 | (788) | 44 | 668 | 285 | 10 | 295 | ||||||||||||||||||||||||||||||||||
| Net income | $ | 4,792 | $ | (2,502) | $ | 140 | $ | 2,430 | $ | 965 | $ | 35 | $ | 1,000 | |||||||||||||||||||||||||||
| Basic Earnings Per Share | $ | 5.50 | $ | (2.87) | $ | 0.16 | $ | 2.79 | $ | 1.12 | $ | 0.04 | $ | 1.16 | |||||||||||||||||||||||||||
| Diluted Earnings Per Share | $ | 5.47 | $ | (2.86) | $ | 0.16 | $ | 2.77 | $ | 1.11 | $ | 0.04 | $ | 1.15 | |||||||||||||||||||||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||||||||||||||||||||
| Basic | 872 | 864 | |||||||||||||||||||||||||||||||||||||||
| Diluted | 876 | 869 | |||||||||||||||||||||||||||||||||||||||
(1) Represents a mark-to-market gain recognized outside of a 10% corridor for the UPS IBT Pension Plan
(2) Transformation & Other Adj. of $184 million reflects a valuation allowance of $66 million related to the planned divestiture of UPS Freight, other employee benefits costs of $76 million and other costs of $42 million.
(3) Transformation & Other Adj. of $45 million reflect other employee benefits costs of $12 million and other costs of $33 million.
United Parcel Service, Inc.
Aircraft Fleet - as of March 31, 2021
(unaudited)
| Description | Owned and Finance Leases | Operating Leases & Charters from Others | On Order | Under Option | ||||||||||
| Operating: | ||||||||||||||
| Boeing 757-200 | 75 | — | — | — | ||||||||||
| Boeing 767-300 | 70 | — | 2 | — | ||||||||||
| Boeing 767-300BCF | 4 | — | — | — | ||||||||||
| Boeing 767-300BDSF | 4 | — | — | — | ||||||||||
| Airbus A300-600 | 52 | — | — | — | ||||||||||
| Boeing MD-11 | 42 | — | — | — | ||||||||||
| Boeing 747-400F | 11 | — | — | — | ||||||||||
| Boeing 747-400BCF | 2 | — | — | — | ||||||||||
| Boeing 747-8F | 21 | — | 7 | — | ||||||||||
| Other | — | 290 | — | — | ||||||||||
| Total | 281 | 290 | 9 | — | ||||||||||