Exhibit 99.2
United Parcel Service, Inc.
Selected Financial Data - First Quarter
(unaudited)
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| Three Months Ended | | | |
| March 31 | | | |
| 2020 | 2019 | Change | % 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 Package | 3,383 | | 3,459 | | (76) | | (2.2) | % |
Supply Chain & Freight | 3,196 | | 3,221 | | (25) | | (0.8) | % |
Total revenue | 18,035 | | 17,160 | | 875 | | 5.1 | % |
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Operating expenses: | | | | |
Compensation and benefits | 10,086 | | 9,317 | | 769 | | 8.3 | % |
Other | 6,877 | | 6,449 | | 428 | | 6.6 | % |
Total operating expenses | 16,963 | | 15,766 | | 1,197 | | 7.6 | % |
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Operating profit: | | | | |
U.S. Domestic Package | 364 | | 666 | | (302) | | (45.3) | % |
International Package | 551 | | 528 | | 23 | | 4.4 | % |
Supply Chain & Freight | 157 | | 200 | | (43) | | (21.5) | % |
Total operating profit | 1,072 | | 1,394 | | (322) | | (23.1) | % |
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Other income (expense): | | | | |
Other pension income (expense) | 327 | | 191 | | 136 | | 71.2 | % |
Investment income and other | 18 | | 24 | | (6) | | (25.0) | % |
Interest expense | (167) | | (169) | | 2 | | (1.2) | % |
Total other income (expense) | 178 | | 46 | | 132 | | N/A | |
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Income before income taxes | 1,250 | | 1,440 | | (190) | | (13.2) | % |
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Income tax expense (benefit) | 285 | | 329 | | (44) | | (13.4) | % |
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Net income | $ | 965 | | $ | 1,111 | | $ | (146) | | (13.1) | % |
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Net income as a percentage of revenue | 5.4 | % | 6.5 | % | | |
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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) | % |
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Weighted-average shares outstanding: | | | | |
Basic | 864 | | 866 | | (2) | | (0.2) | % |
Diluted | 869 | | 869 | | — | | 0.0 | % |
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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) | % |
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Income before income taxes (1) | $ | 1,295 | | $ | 1,563 | | $ | (268) | | (17.1) | % |
Net income (2) | $ | 1,000 | | $ | 1,204 | | $ | (204) | | (16.9) | % |
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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)
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| Three Months Ended | | | |
| March 31 | | | |
| 2020 | 2019 | Change | % Change |
| | | | |
Revenue (in millions): | | | | |
U.S. Domestic Package: | | | | |
Next Day Air | $ | 2,055 | | $ | 1,841 | | $ | 214 | | 11.6 | % |
Deferred | 1,197 | | 1,089 | | 108 | | 9.9 | % |
Ground | 8,204 | | 7,550 | | 654 | | 8.7 | % |
Total U.S. Domestic Package | 11,456 | | 10,480 | | 976 | | 9.3 | % |
International Package: | | | | |
Domestic | 688 | | 690 | | (2) | | (0.3) | % |
Export | 2,561 | | 2,631 | | (70) | | (2.7) | % |
Cargo and Other | 134 | | 138 | | (4) | | (2.9) | % |
Total International Package | 3,383 | | 3,459 | | (76) | | (2.2) | % |
Supply Chain & Freight: | | | | |
Forwarding | 1,373 | | 1,416 | | (43) | | (3.0) | % |
Logistics | 845 | | 832 | | 13 | | 1.6 | % |
Freight | 766 | | 773 | | (7) | | (0.9) | % |
Other | 212 | | 200 | | 12 | | 6.0 | % |
Total Supply Chain & Freight | 3,196 | | 3,221 | | (25) | | (0.8) | % |
Consolidated | $ | 18,035 | | $ | 17,160 | | $ | 875 | | 5.1 | % |
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Consolidated volume (in millions) | 1,352 | | 1,246 | | 106 | | 8.5 | % |
| | | | |
Operating weekdays | 64 | | 63 | | 1 | | 1.6 | % |
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Average Daily Package Volume (in thousands): | | | | |
U.S. Domestic Package: | | | | |
Next Day Air | 1,883 | | 1,563 | | 320 | | 20.5 | % |
Deferred | 1,492 | | 1,384 | | 108 | | 7.8 | % |
Ground | 14,669 | | 13,684 | | 985 | | 7.2 | % |
Total U.S. Domestic Package | 18,044 | | 16,631 | | 1,413 | | 8.5 | % |
International Package: | | | | |
Domestic | 1,668 | | 1,688 | | (20) | | (1.2) | % |
Export | 1,413 | | 1,451 | | (38) | | (2.6) | % |
Total International Package | 3,081 | | 3,139 | | (58) | | (1.8) | % |
Consolidated | 21,125 | | 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) | % |
Deferred | 12.54 | | 12.49 | | 0.05 | | 0.4 | % |
Ground | 8.74 | | 8.76 | | (0.02) | | (0.2) | % |
Total U.S. Domestic Package | 9.92 | | 10.00 | | (0.08) | | (0.8) | % |
International Package: | | | | |
Domestic | 6.44 | | 6.49 | | (0.05) | | (0.8) | % |
Export | 28.32 | | 28.78 | | (0.46) | | (1.6) | % |
Total International Package | 16.48 | | 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
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Currency Neutral Revenue Per Piece, Revenue and Operating Profit | | | | | | | | | | | |
(unaudited) | | | | | | | | | | | |
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| Three Months Ended | | | | | | | | Currency | | |
| March 31, | | | | | | Neutral | | | | |
| 2020 | | 2019 | | % Change | | Currency | | 2020 * | | % Change |
Average Revenue Per Piece: | | | | | | | | | | | |
International Package: | | | | | | | | | | | |
Domestic | $ | 6.44 | | | $ | 6.49 | | | (0.8) | % | | $ | 0.11 | | | $ | 6.55 | | | 0.9 | % |
Export | 28.32 | | | 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) | % |
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Consolidated | $ | 10.88 | | | $ | 11.08 | | | (1.8) | % | | $ | 0.01 | | | $ | 10.89 | | | (1.7) | % |
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| Three Months Ended | | | | | | | | Currency | | |
| March 31, | | | | | | Neutral | | | | |
| 2020 | | 2019 | | % Change | | Currency | | 2020* | | % Change |
Revenue (in millions): | | | | | | | | | | | |
U.S. Domestic Package | $ | 11,456 | | | $ | 10,480 | | | 9.3 | % | | $ | — | | | $ | 11,456 | | | 9.3 | % |
International Package | 3,383 | | | 3,459 | | | (2.2) | % | | 19 | | | 3,402 | | | (1.6) | % |
Supply Chain & Freight | 3,196 | | | 3,221 | | | (0.8) | % | | 48 | | | 3,244 | | | 0.7 | % |
Total revenue | $ | 18,035 | | | $ | 17,160 | | | 5.1 | % | | $ | 67 | | | $ | 18,102 | | | 5.5 | % |
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| Three Months Ended | | | | | | | | Currency | | |
| March 31, | | | | | | | | Neutral | | |
| 2020** | | 2019** | | % Change | | Currency | | 2020*** | | % Change |
As-Adjusted Operating Profit (in millions): | | | | | | | | | | | |
U.S. Domestic Package | $ | 401 | | | $ | 694 | | | (42.2) | % | | $ | — | | | $ | 401 | | | (42.2) | % |
International Package | 558 | | | 612 | | | (8.8) | % | | (22) | | | 536 | | | (12.4) | % |
Supply Chain & Freight | 158 | | | 211 | | | (25.1) | % | | 1 | | | 159 | | | (24.6) | % |
Total operating profit | $ | 1,117 | | | $ | 1,517 | | | (26.4) | % | | $ | (21) | | | $ | 1,096 | | | (27.8) | % |
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Pension Discount Rate Neutral Operating Profit and Margin
(unaudited)
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| Three Months Ended March 31 | | | | | | | | Pension Discount Rate Neutral | | |
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| 2020** | | 2019** | | % Change | | Pension | | 2020**** | | % Change |
As-Adjusted Operating profit (in millions): | | | | | | | | | | | | | | | | | |
U.S. Domestic Package | $ | 401 | | | $ | 694 | | | (42.2) | % | | $ | 62 | | | $ | 463 | | | (33.3) | % |
International Package | 558 | | | 612 | | | (8.8) | % | | 4 | | | 562 | | | (8.2) | % |
Supply Chain & Freight | 158 | | | 211 | | | (25.1) | % | | 8 | | | 166 | | | (21.3) | % |
Total operating profit | $ | 1,117 | | | $ | 1,517 | | | (26.4) | % | | $ | 74 | | | $ | 1,191 | | | (21.5) | % |
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| Three Months Ended March 31 | | | | | | | | Pension Discount Rate Neutral | | |
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| 2020** | | 2019** | | % Change | | Pension | | 2020**** | | % Change |
As- Adjusted Operating margin: | | | | | | | | | | | | | | | |
U.S. Domestic Package | 3.5 | % | | 6.6 | % | | (3.1) | % | | 0.5 | % | | 4.0 | % | | (2.6) | % |
International Package | 16.5 | % | | 17.7 | % | | (1.2) | % | | 0.1 | % | | 16.6 | % | | (1.1) | % |
Supply Chain & Freight | 4.9 | % | | 6.6 | % | | (1.7) | % | | 0.3 | % | | 5.2 | % | | (1.4) | % |
Total operating profit | 6.2 | % | | 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)
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| Three Months Ended | | | | | | |
| March 31, | | | | | | |
| 2020 | | 2019 | | Change | | % Change |
(in millions) | | | | | | | |
Repairs and maintenance | $ | 563 | | | $ | 434 | | | $ | 129 | | | 29.7 | % |
Depreciation and amortization | 648 | | | 568 | | | 80 | | | 14.1 | % |
Purchased transportation | 2,931 | | | 2,966 | | | (35) | | | (1.2) | % |
Fuel | 761 | | | 770 | | | (9) | | | (1.2) | % |
Other occupancy | 383 | | | 371 | | | 12 | | | 3.2 | % |
Other expenses | 1,591 | | | 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)
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| Three Months Ended | | |
| March 31, | | |
| 2020 | | 2019 |
(amounts in millions, except per share data) | | | |
Numerator: | | | |
Net income | $ | 965 | | | $ | 1,111 | |
| | | |
Denominator: | | | |
Weighted-average shares | 858 | | | 860 | |
Deferred compensation obligations | — | | | 1 | |
Vested portion of restricted units | 6 | | | 5 | |
Denominator for basic earnings per share | 864 | | | 866 | |
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Effect of dilutive securities: | | | |
Restricted units | 5 | | | 3 | |
Stock options | — | | | — | |
Denominator for diluted earnings per share | 869 | | | 869 | |
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Basic earnings per share | $ | 1.12 | | | $ | 1.28 | |
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Diluted earnings per share | $ | 1.11 | | | $ | 1.28 | |
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Detail of shares outstanding as of March 31, 2020: | | | |
| | | |
Class A shares | 158 | | | |
Class B shares | 703 | | | |
Total shares outstanding | 861 | | | |
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)
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| March 31, 2020 | | December 31, 2019 |
(amounts in millions) | | | |
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ASSETS | | | |
Current Assets: | | | |
Cash and marketable securities | $ | 9,460 | | | $ | 5,741 | |
Other current assets | 9,929 | | | 11,362 | |
Total Current Assets | 19,389 | | | 17,103 | |
Property, Plant and Equipment | 60,462 | | | 59,727 | |
Less accumulated depreciation and amortization | 29,554 | | | 29,245 | |
| 30,908 | | | 30,482 | |
Other Assets | 10,598 | | | 10,272 | |
| $ | 60,895 | | | $ | 57,857 | |
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LIABILITIES AND SHAREOWNERS' EQUITY | | | |
Current Liabilities | $ | 15,846 | | | $ | 15,413 | |
Long-Term Debt | 24,196 | | | 21,818 | |
Pension and Postretirement Benefit Obligations | 10,477 | | | 10,601 | |
Deferred Taxes, Credits and Other Liabilities | 7,063 | | | 6,742 | |
Shareowners' Equity | 3,313 | | | 3,283 | |
| $ | 60,895 | | | $ | 57,857 | |
Amounts are subject to reclassification.
United Parcel Service, Inc.
Selected Cash Flow Data
(unaudited)
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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 activities | | 2,167 | |
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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 | |
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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&E | | 1 | |
Net change in finance receivables | | 3 | |
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)
| | | | | | | | | | | | | | |
Description | Owned and Finance Leases | Operating Leases & Charters from Others | On Order | Under Option |
Operating: | | | | |
Boeing 757-200 | 75 | | — | | — | | — | |
Boeing 767-300 | 65 | | — | | 7 | | — | |
Boeing 767-300BCF | 4 | | — | | — | | — | |
Boeing 767-300BDSF | 2 | | — | | 2 | | — | |
Airbus A300-600 | 52 | | — | | — | | — | |
Boeing MD-11 | 39 | | — | | 3 | | — | |
Boeing 747-400F | 11 | | — | | — | | — | |
Boeing 747-400BCF | 2 | | — | | — | | — | |
Boeing 747-8F | 15 | | — | | 13 | | — | |
Other | — | | 296 | | — | | — | |
Total | 265 | | 296 | | 25 | | — | |
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