Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts: Norman Black, Public Relations
404-828-7593
Teresa Finley, Investor
Relations 404-828-7359
UPS REPORTS SOLID 4TH QUARTER
AS GLOBAL PACKAGE BUSINESS GROWS
2006 EARNINGS CLIMB 11.2%; INTERNATIONAL PROFITS EXCEED $1.7 BILLION
ATLANTA, Jan. 30, 2007 - Led by a strong performance in its international
operations, UPS (NYSE: UPS) today reported net income of $1.13 billion and a 10%
increase in diluted earnings per share to $1.04 for the fourth quarter ended
Dec. 31, 2006.
For the full year of 2006, revenue rose almost 12%; operating profit
increased 8%, and earnings per share climbed 11.2% to $3.86. The international
business reached new heights, reporting more than $1.7 billion in operating
profit. The company set a new record for package volume in 2006, delivering
almost 4 billion packages or an average of 15.6 million per day.
"UPS had a very good year in 2006," said Chairman and CEO Mike Eskew. "We
posted new highs in revenue, operating profit and earnings per share. We
finished the year with a well-executed peak season, and strong execution will
continue to be critical for us as we move forward in 2007."
CONSOLIDATED RESULTS 4Q 2006 4Q 2005
- -------------------------------- -------- -------
Revenue $ 12.6 B $ 12.0 B
Operating profit $ 1.8 B $ 1.7 B
Operating margin 14.3% 14.3%
Average volume per day 17.3 M 16.8 M
Diluted earnings per share $ 1.04 $ 0.95
The fourth quarter produced solid earnings growth despite a slowing U.S.
economy. Consolidated average daily package volume rose 3.3%, or 558,000
additional packages each day. Pricing remained firm around the globe.
Consolidated average revenue per piece increased 2%.
- more -
2-2-2
CASH POSITION
UPS ended 2006 with nearly $2 billion in cash and marketable securities.
For the year, it also:
- Generated cash from operations of $5.7 billion.
- Purchased 32.6 million shares, reducing total shares outstanding by
2.5%.
- Paid $1.6 billion in dividends.
- Invested $3.1 billion in capital expenditures.
U.S. PACKAGE 4Q 2006 4Q 2005
- ----------------------------- -------- -------
Revenue $8.13 B $7.82 B
Operating profit $1.30 B $1.24 B
Operating margin 15.9% 15.8%
Average volume per day 15.4 M 14.9 M
Ground volume posted a healthy 3.6% increase in the quarter. Next Day
Air(R) volume declined marginally and deferred volume was flat against strong
prior-year results.
The company did an excellent job of executing on its holiday peak season
plan, with deliveries exceeding 22 million on two days. Package delivery volume
exceeded 20 million a day on seven days during the 2006 peak compared to five
days the prior year.
INTERNATIONAL PACKAGE 4Q 2006 4Q 2005
- ----------------------------- -------- -------
Revenue $2.44 B $2.22 B
Operating profit $ 514 M $ 431 M
Operating margin 21.0% 19.4%
Average volume per day 2.0 M 1.8 M
Total international export volume grew 11.3%. Non-U.S. domestic package
volume posted solid 4% growth as the company overlapped the effect of an
acquisition.
During the quarter, UPS announced the expansion of its international
shipping portfolio by providing three time-definite delivery options each day to
the world's 30 largest markets, up from one or two daily options. These new
delivery services make UPS's international delivery portfolio the most expansive
in the industry and cover more than 80% of the world's GDP.
SUPPLY CHAIN AND FREIGHT 4Q 2006 4Q 2005
- -------------------------------- ------- --------
Revenue $2.06 B $1.91 B
Operating profit (loss) $ (1) M $ 43 M
Operating margin -- 2.3%
- more -
3-3-3
The Supply Chain and Freight segment improved from the third
quarter, reflecting the positive impact of cost control measures taken in the
fourth quarter. UPS Freight's performance was impacted by the general softening
in the Less-Than-Truckload (LTL) environment.
OUTLOOK
"We anticipate another good year in our global small package business
despite a slowing U.S. economy," said Scott Davis, UPS's vice chairman and chief
financial officer. "We also expect our Supply Chain and Freight segment to gain
momentum as the year progresses."
Davis said he anticipates diluted earnings per share for the full
year 2007 to increase 6-to-10%, or within a range of $4.10 to $4.25, compared to
the $3.86 reported in 2006. For the first quarter of 2007, UPS is projecting
diluted earnings per share in the range of $0.94 to $0.98 compared to the $0.89
reported in the prior-year period.
"We're encouraged by the opportunities we see for our company around
the globe," Davis added. "We're operating a healthy business in a vital
industry, and we believe our long-term strategy of providing supply chain
solutions to our customers is right on target."
UPS, which celebrates its 100th anniversary in 2007, is the world's
largest package delivery company and a global leader in supply chain services,
offering an extensive range of options for synchronizing the movement of goods,
information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200
countries and territories worldwide. UPS's stock trades on the New York Stock
Exchange (UPS) and the company can be found on the Web at UPS.com. To get UPS
news direct, visit pressroom.ups.com/RSS.
# # #
EDITOR'S NOTE: UPS Chairman and CEO Mike Eskew and Vice Chairman and CFO Scott
Davis will discuss fourth quarter and 2006 results with investors and analysts
during a conference call at 8:30 a.m. EST today. That call is open to listeners
through a live Webcast. To access the call, go to www.shareholder.com/UPS and
click on "Earnings Webcast."
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. Certain factors may cause actual results to differ
materially from those contained in the forward-looking statements, including
economic and other conditions in the markets in which we operate, governmental
regulations, our competitive environment, strikes, work stoppages and slowdowns,
increases in aviation and motor fuel prices, cyclical and seasonal fluctuations
in our operating results, and other risks discussed in the company's Form 10-K
and other filings with the Securities and Exchange Commission, which discussions
are incorporated herein by reference.
UNITED PARCEL SERVICE. INC.
SELECTED EINANCIAL DATA - FOURTH QUARTER
(UNAUDITED)
THREE MONTHS ENDED
DECEMBER31, CHANGE
----------------------------------------------------------------
(amounts in millions, except per share data) 2006 2005 $ %
-----------------------------------------------------------------
STATEMENT OF INCOME DATA:
Revenue:
U.S. Domestic Package $8,129 $7,824 $305 3.9%
International Package 2,444 2,220 224 10.1%
Supply Chain & Freight 2,055 1,910 145 7.6%
--------------------------------------------
Total revenue 12,628 11,954 674 5.6%
Operating expenses:
Compensation and benefits 6,504 6,128 376 6.1%
Other 4,315 4,115 200 4.9%
--------------------------------------------
Total operating expenses 10,819 10,243 576 5.6%
Operating profit (loss):
U.S. Domestic Package 1,296 1,237 59 4.8%
International Package 514 431 83 19.3%
Supply Chain & Freight (1) 43 (44) -102.3%
--------------------------------------------
Total operating profit 1,809 1,711 98 5.7%
Other income (expense):
Investment income 15 8 7 87.5%
Interest expense (55) (52) (3) 5.8%
--------------------------------------------
Total other income (expense) (40) (44) 4 -9.1%
Income before income taxes 1,769 1,667 102 6.1%
Income taxes 641 618 23 3.7%
---------------------------------------------
Net income $1,128 $1,049 $79 7.5%
=============================================
Net income as a percentage of revenue 8.9% 8.8%
Per share amounts
Basic earnings per share $ 1.05 $0.95 $0.10 10.5%
Diluted earnings per share $ 1.04 $0.95 $0.09 9.5%
Weighted-average shares outstanding
Basic 1,076 1,103
Diluted 1,081 1,107
Certain prior year amounts have been reclassified to conform to the currrent
year presentation.
1
UNITED PARCEL SERVICE. INC.
SELECTED OPERATING DATA - FOURTH QUARTER
(UNAUDITED)
THREE MONTHS ENDED
DECEMBER 31, CHANGE
--------------------------------------
2006 2005 $ / # %
--------------------------------------
REVENUE (IN MILLIONS):
U.S. Domestic Package:
Next Day Air $ 1,724 $ 1,716 $ 8 0.5%
Deferred 977 969 8 0.8%
Ground 5,428 5,139 289 5.6%
------------------------------
Total U.S. Domestic Package 8,129 7,824 305 3.9%
International Package:
Domestic 529 474 55 11.6%
Export 1,757 1,590 167 10.5%
Cargo 158 156 2 1.3%
-------------------------------
Total International Package 2,444 2,220 224 10.1%
Supply Chain & Freight:
Forwarding and Logistics 1,479 1,333 146 11.0%
Freight 468 483 (15) -3.1%
Other 108 94 14 14.9%
------------------------------
Total Supply Chain & Freight 2,055 1,910 145 7.6%
------------------------------
Consolidated $ 12,628 $ 11,954 $ 674 5.6%
==============================
Consolidated volume (in millions) 1,074 1,039 35 3.3%
Operating weekdays 62 62
AVERAGE DAILY PACKAGE VOLUME (IN THOUSANDS):
U.S. Domestic Package:
Next Day Air 1,337 1,351 (14) -1.0%
Deferred 1,201 1,200 1 0.1%
Ground 12,821 12,374 447 3.6%
------------------------------
Total U.S. Domestic Package 15,359 14,925 434 2.9%
International Package:
Domestic 1,196 1,150 46 4.0%
Export 768 690 78 11.3%
------------------------------
Total International Package 1,964 1,840 124 6.7%
------------------------------
Consolidated 17,323 16,765 558 3.3%
==============================
AVERAGE REVENUE PER PIECE:
U.S. Domestic Package:
Next Day Air $ 20.80 $ 20.49 $ 0.31 1.5%
Deferred 13.12 13.02 0.10 0.8%
Ground 6.83 6.70 0.13 1.9%
Total U.S. Domestic Package 8.54 8.46 0.08 0.9%
International Package:
Domestic 7.13 6.65 0.48 7.2%
Export 36.90 37.17 (0.27) -0.7%
Total International Package 18.77 18.09 0.68 3.8%
Consolidated $ 9.70 $ 9.51 $ 0.19 2.0%
==============================
Certain prior year amounts have been reclassified to conform to the current
year presentation. 2
UNITED PARCEL SERVICE. INC.
SELECTED FINANCIAL DATA - FOURTH QUARTER
(UNAUDITED)
TWELVE MONTHS ENDED
DECEMBER 31, CHANGE
----------------------------------------
(amounts in millions, except per share data) 2006 2005 $ %
----------------------------------------
STATEMENT OF INCOME DATA:
Revenue:
U.S. Domestic Package $ 30,456 $ 28,610 $ 1,846 6.5%
International Package 9,089 7,977 1,112 13.9%
Supply Chain & Freight 8,002 5,994 2,008 33.5%
------------------------------
Total revenue 47,547 42,581 4,966 11.7%
Operating expenses:
Compensation and benefits 24,421 22,517 1,904 8.5%
Other 16,491 13,921 2,570 18.5%
------------------------------
Total operating expenses 40,912 36,438 4,474 12.3%
Operating profit:
U.S. Domestic Package 4,923 4,493 430 9.6%
International Package 1,710 1,494 216 14.5%
Supply Chain & Freight 2 156 (154) -98.7%
------------------------------
Total operating profit 6,635 6,143 492 8.0%
Other income (expense):
Investment income 86 104 (18) -17.3%
Interest expense (211) (172) (39) 22.7%
------------------------------
Total other income (expense) (125) (68) (57) 83.8%
------------------------------
Income before income taxes 6,510 6,075 435 7.2%
Income taxes 2,308 2,205 103 4.7%
------------------------------
Net income $ 4,202 $ 3,870 $ 332 8.6%
==============================
Net income as a percentage of revenue 8.8% 9.1%
Per share amounts
Basic earnings per share $ 3.87 $ 3.48 $ 0.39 11.2%
Diluted earnings per share $ 3.86 $ 3.47 $ 0.39 11.2%
Weighted-average shares outstanding
Basic 1,085 1,113
Diluted 1,089 1,116
Certain prior year amounts have been reclassified to conform to the
current year presentation. 3
UNITED PARCEL SERVICE. INC.
SELECTED OPERATING DATA - YEAR TO DATE
(UNAUDITED)
TWELVE MONTHS ENDED
DECEMBER 31, CHANGE
--------------------------------------
2006 2005 $ / # %
--------------------------------------
REVENUE (IN MILLIONS):
U.S. Domestic Package:
Next Day Air $ 6,778 $ 6,381 $ 397 6.2%
Deferred 3,424 3,258 166 5.1%
Ground 20,254 18,971 1,283 6.8%
------------------------------
Total U.S. Domestic Package 30,456 28,610 1,846 6.5%
International Package:
Domestic 1,950 1,588 362 22.8%
Export 6,554 5,856 698 11.9%
Cargo 585 533 52 9.8%
------------------------------
Total International Package 9,089 7,977 1,112 13.9%
Supply Chain & Freight:
Forwarding and Logistics 5,681 4,859 822 16.9%
Freight 1,952 797 1,155 144.9%
Other 369 338 31 9.2%
------------------------------
Total Supply Chain & Freight 8,002 5,994 2,008 33.5%
------------------------------
Consolidated $ 47,547 $ 42,581 $ 4,966 11.7%
==============================
Consolidated volume (in millions) 3,945 3,746 199 5.3%
Operating weekdays 253 254
AVERAGE DAILY PACKAGE VOLUME (IN THOUSANDS):
U.S. Domestic Package:
Next Day Air 1,267 1,228 39 3.2%
Deferred 993 946 47 5.0%
Ground 11,537 11,044 493 4.5%
------------------------------
Total U.S. Domestic Package 13,797 13,218 579 4.4%
International Package:
Domestic 1,108 916 192 21.0%
Export 689 616 73 11.9%
------------------------------
Total International Package 1,797 1,532 265 17.3%
------------------------------
Consolidated 15,594 14,750 844 5.7%
==============================
AVERAGE REVENUE PER PIECE:
U.S. Domestic Package:
Next Day Air $ 21.14 $ 20.46 $ 0.68 3.3%
Deferred 13.63 13.56 0.07 0.5%
Ground 6.94 6.76 0.18 2.7%
Total U.S. Domestic Package 8.73 8.52 0.21 2.5%
International Package:
Domestic 6.96 6.83 0.13 1.9%
Export 37.60 37.43 0.17 0.5%
Total International Package 18.70 19.13 (0.43) -2.2%
Consolidated $ 9.88 $ 9.62 $ 0.26 2.7%
==============================
Certain prior year amounts have been reclassified to conform to the current
year presentation. 4