EX-99.2 3 exhibit992-q12020finan.htm EXHIBIT 99.2 - Q1 2020 FINANCIAL STATEMENT SCHEDULES Document

Exhibit 99.2
United Parcel Service, Inc.
Selected Financial Data - First Quarter
(unaudited)
Three Months Ended
March 31
20202019Change% Change
(amounts in millions, except per share data)
Statement of Income Data:
Revenue:
  U.S. Domestic Package$11,456  $10,480  $976  9.3 %
  International Package3,383  3,459  (76) (2.2)%
  Supply Chain & Freight3,196  3,221  (25) (0.8)%
  Total revenue18,035  17,160  875  5.1 %
Operating expenses:
  Compensation and benefits10,086  9,317  769  8.3 %
  Other6,877  6,449  428  6.6 %
  Total operating expenses16,963  15,766  1,197  7.6 %
Operating profit:
  U.S. Domestic Package364  666  (302) (45.3)%
  International Package551  528  23  4.4 %
  Supply Chain & Freight157  200  (43) (21.5)%
  Total operating profit1,072  1,394  (322) (23.1)%
Other income (expense):
 Other pension income (expense)327  191  136  71.2 %
  Investment income and other18  24  (6) (25.0)%
  Interest expense(167) (169) 2  (1.2)%
  Total other income (expense)178  46  132  N/A  
Income before income taxes1,250  1,440  (190) (13.2)%
Income tax expense (benefit)285  329  (44) (13.4)%
Net income $965  $1,111  $(146) (13.1)%
Net income as a percentage of revenue5.4 %6.5 %
Per share amounts:
  Basic earnings per share$1.12  $1.28  $(0.16) (12.5)%
  Diluted earnings per share$1.11  $1.28  $(0.17) (13.3)%
Weighted-average shares outstanding:
  Basic864  866  (2) (0.2)%
  Diluted869  869  —  0.0 %
As adjusted income data:
Operating profit:
  U.S. Domestic Package (1)$401  $694  $(293) (42.2)%
  International Package (1)558  612  (54) (8.8)%
  Supply Chain & Freight (1)158  211  (53) (25.1)%
       Total operating profit (1)1,117  1,517  (400) (26.4)%
Income before income taxes (1) $1,295  $1,563  $(268) (17.1)%
Net income (2)$1,000  $1,204  $(204) (16.9)%
Basic earnings per share (2)$1.16  $1.39  $(0.23) (16.5)%
Diluted earnings per share (2)$1.15  $1.39  $(0.24) (17.3)%
(1) 2020 operating profit and consolidated income before income taxes exclude the impact of $45 million of transformation strategy costs that reflect other employee benefits costs of $12 million and other costs of $33 million. These costs are allocated between the U.S. Domestic Package segment ($37 million), International Package segment ($7 million) and Supply Chain & Freight segment ($1 million).

2019 operating profit and consolidated income before taxes exclude the impact of $123 million of transformation strategy costs, that reflect costs and other employee benefits of $106 million and other costs of $17 million. These costs are allocated between the U.S. Domestic Package segment ($28 million), International Package segment ($84 million) and Supply Chain & Freights segment ($11 million).

(2) 2020 net income and earnings per share amounts exclude the after-tax impact of the adjustments described in (1), which decreased net income by $35 million.

2019 net income and earnings per share amounts exclude the after-tax impact of the adjustments described in (1), which decreased net income by $93 million.




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
20202019Change% Change
Revenue (in millions):
U.S. Domestic Package:
   Next Day Air$2,055  $1,841  $214  11.6 %
   Deferred1,197  1,089  108  9.9 %
   Ground8,204  7,550  654  8.7 %
      Total U.S. Domestic Package11,456  10,480  976  9.3 %
International Package:
   Domestic688  690  (2) (0.3)%
   Export2,561  2,631  (70) (2.7)%
   Cargo and Other134  138  (4) (2.9)%
      Total International Package3,383  3,459  (76) (2.2)%
Supply Chain & Freight:
   Forwarding1,373  1,416  (43) (3.0)%
Logistics845  832  13  1.6 %
   Freight766  773  (7) (0.9)%
   Other212  200  12  6.0 %
      Total Supply Chain & Freight3,196  3,221  (25) (0.8)%
Consolidated$18,035  $17,160  $875  5.1 %
Consolidated volume (in millions)1,352  1,246  106  8.5 %
Operating weekdays64  63  1  1.6 %
Average Daily Package Volume (in thousands):
U.S. Domestic Package:
   Next Day Air1,883  1,563  320  20.5 %
   Deferred1,492  1,384  108  7.8 %
   Ground14,669  13,684  985  7.2 %
      Total U.S. Domestic Package18,044  16,631  1,413  8.5 %
International Package:
   Domestic1,668  1,688  (20) (1.2)%
   Export1,413  1,451  (38) (2.6)%
      Total International Package3,081  3,139  (58) (1.8)%
Consolidated21,125  19,770  1,355  6.9 %
Average Revenue Per Piece:
U.S. Domestic Package:
   Next Day Air$17.05  $18.70  $(1.65) (8.8)%
   Deferred12.54  12.49  0.05  0.4 %
   Ground8.74  8.76  (0.02) (0.2)%
      Total U.S. Domestic Package9.92  10.00  (0.08) (0.8)%
International Package:
   Domestic6.44  6.49  (0.05) (0.8)%
   Export28.32  28.78  (0.46) (1.6)%
      Total International Package16.48  16.79  (0.31) (1.8)%
Consolidated$10.88  $11.08  $(0.20) (1.8)%












Certain prior year amounts have been reclassified to conform to the current year presentation.



United Parcel Service, Inc.
Supplemental Analysis of Currency and Pension Discount Rates - First Quarter

Currency Neutral Revenue Per Piece, Revenue and Operating Profit
(unaudited)
Three Months EndedCurrency
March 31,Neutral
20202019% ChangeCurrency2020 *% Change
Average Revenue Per Piece:
International Package:
   Domestic$6.44  $6.49  (0.8)%$0.11  $6.55  0.9 %
   Export28.32  28.78  (1.6)%0.07  28.39  (1.4)%
      Total International Package$16.48  $16.79  (1.8)%$0.09  $16.57  (1.3)%
Consolidated$10.88  $11.08  (1.8)%$0.01  $10.89  (1.7)%
Three Months EndedCurrency
March 31,Neutral
20202019% ChangeCurrency2020*% Change
Revenue (in millions):
  U.S. Domestic Package$11,456  $10,480  9.3 %$—  $11,456  9.3 %
  International Package3,383  3,459  (2.2)%19  3,402  (1.6)%
  Supply Chain & Freight3,196  3,221  (0.8)%48  3,244  0.7 %
  Total revenue$18,035  $17,160  5.1 %$67  $18,102  5.5 %
Three Months EndedCurrency
March 31,Neutral
2020**2019**% ChangeCurrency2020***% Change
As-Adjusted Operating Profit (in millions):
  U.S. Domestic Package$401  $694  (42.2)%$—  $401  (42.2)%
  International Package558  612  (8.8)%(22) 536  (12.4)%
  Supply Chain & Freight158  211  (25.1)%1  159  (24.6)%
  Total operating profit$1,117  $1,517  (26.4)%$(21) $1,096  (27.8)%


Pension Discount Rate Neutral Operating Profit and Margin
(unaudited)
Three Months Ended
March 31		Pension Discount Rate Neutral
2020**2019**% ChangePension2020****% Change
As-Adjusted Operating profit (in millions):
U.S. Domestic Package$401  $694  (42.2)%$62  $463  (33.3)%
International Package558  612  (8.8)%4  562  (8.2)%
Supply Chain & Freight158  211  (25.1)%8  166  (21.3)%
Total operating profit$1,117  $1,517  (26.4)%$74  $1,191  (21.5)%
Three Months Ended
March 31		Pension Discount Rate Neutral
2020**2019**% ChangePension2020****% Change
As- Adjusted Operating margin:
U.S. Domestic Package3.5 %6.6 %(3.1)%0.5 %4.0 %(2.6)%
International Package16.5 %17.7 %(1.2)%0.1 %16.6 %(1.1)%
Supply Chain & Freight4.9 %6.6 %(1.7)%0.3 %5.2 %(1.4)%
Total operating profit6.2 %8.8 %(2.6)%0.4 %6.6 %(2.2)%
*Amounts adjusted for period over period foreign currency exchange rate and hedging differences
** Amounts adjusted for transformation strategy costs
*** Amounts adjusted for transformation strategy costs and period over period foreign currency exchange rate and hedging differences
**** Amounts adjusted for transformation strategy costs and period over period impact of discount rates on pension service cost
Certain prior year have been reclassified to conform to the current year presentation.





United Parcel Service, Inc.
Detail of Other Operating Expenses - First Quarter
(unaudited)

Three Months Ended
March 31,
20202019Change% Change
(in millions)
Repairs and maintenance$563  $434  $129  29.7 %
Depreciation and amortization648  568  80  14.1 %
Purchased transportation2,931  2,966  (35) (1.2)%
Fuel761  770  (9) (1.2)%
Other occupancy383  371  12  3.2 %
Other expenses1,591  1,340  251  18.7 %
Total other operating expenses$6,877  $6,449  $428  6.6 %


Earnings Per Share and Share Data - First Quarter
(unaudited)

Three Months Ended
March 31,
20202019
(amounts in millions, except per share data)
Numerator:
    Net income $965  $1,111  
Denominator:
    Weighted-average shares858  860  
    Deferred compensation obligations—  1  
    Vested portion of restricted units6  5  
Denominator for basic earnings per share864  866  
Effect of dilutive securities:
    Restricted units5  3  
    Stock options —  —  
Denominator for diluted earnings per share869  869  
Basic earnings per share$1.12  $1.28  
Diluted earnings per share$1.11  $1.28  
Detail of shares outstanding as of March 31, 2020:
Class A shares158  
Class B shares703  
    Total shares outstanding861  
        














Certain prior year amounts have been reclassified to conform to the current year presentation.





United Parcel Service, Inc.
Consolidated Balance Sheets - March 31, 2020 and December 31, 2019
(unaudited)

March 31, 2020December 31, 2019
(amounts in millions)
ASSETS
Current Assets:
Cash and marketable securities$9,460  $5,741  
Other current assets9,929  11,362  
Total Current Assets19,389  17,103  
Property, Plant and Equipment60,462  59,727  
Less accumulated depreciation and amortization29,554  29,245  
30,908  30,482  
Other Assets10,598  10,272  
$60,895  $57,857  
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities$15,846  $15,413  
Long-Term Debt24,196  21,818  
Pension and Postretirement Benefit Obligations10,477  10,601  
Deferred Taxes, Credits and Other Liabilities7,063  6,742  
Shareowners' Equity3,313  3,283  
$60,895  $57,857  

Amounts are subject to reclassification.




































United Parcel Service, Inc.
Selected Cash Flow Data
(unaudited)
Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash
Preliminary
Year-to-Date
(amounts in millions)March 31
Cash flows from operating activities$2,550  
Cash flows used in investing activities(934) 
Cash flows from in financing activities2,167  
Effect of exchange rate changes on cash, cash equivalents and restricted cash(65) 
    Net increase/(decrease) in cash and cash equivalents and restricted cash$3,718  
Reconciliation of Adjusted Capital Expenditures and Free Cash Flow (non-GAAP measures)
Preliminary
Year-to-Date
(amounts in millions)March 31
Cash flows from operating activities$2,550  
Capital expenditures(933) 
Principal repayments of finance lease obligations(6) 
Adjusted Capital Expenditures (non-GAAP measure)(939) 
Proceed from disposal of PP&E1  
Net change in finance receivables3  
Other investing activities(5) 
     Adjusted free cash flow (non-GAAP measure)$1,610  
Amounts are subject to reclassification.



































United Parcel Service, Inc.
Aircraft Fleet - as of March 31, 2020
(unaudited)

DescriptionOwned and Finance LeasesOperating Leases & Charters from OthersOn OrderUnder Option
Operating:
Boeing 757-20075  —  —  —  
Boeing 767-30065  —  7  —  
Boeing 767-300BCF4  —  —  —  
Boeing 767-300BDSF2  —  2  —  
Airbus A300-60052  —  —  —  
Boeing MD-1139  —  3  —  
Boeing 747-400F11  —  —  —  
Boeing 747-400BCF2  —  —  —  
Boeing 747-8F15  —  13  —  
Other—  296  —  —  
          Total265  296  25  —