Annual report pursuant to Section 13 and 15(d)

SEGMENT AND GEOGRAPHIC INFORMATION

v3.20.4
SEGMENT AND GEOGRAPHIC INFORMATION
 12 Months Ended
Dec. 31, 2020
Segments, Geographical Areas [Abstract]  
SEGMENT AND GEOGRAPHIC INFORMATION SEGMENT AND GEOGRAPHIC INFORMATION
We report our operations in three reporting segments: U.S. Domestic Package, International Package and Supply Chain & Freight. Package operations represent our most significant business and are broken down into regional operations around the world. Regional operations managers are responsible for both domestic and export products within their geographic area.
U.S. Domestic Package
U.S. Domestic Package operations include the time-definite delivery of letters, documents and packages throughout the United States.
International Package
International Package operations include delivery to more than 220 countries and territories worldwide, including shipments wholly outside the United States, as well as shipments with either origin or destination outside the United States. Our International Package reporting segment includes our operations in Europe, Asia, Americas and ISMEA.
Supply Chain & Freight
Supply Chain & Freight includes our Forwarding, Logistics, Coyote, Marken, UPS Mail Innovations, UPS Freight and other aggregated business units. Our Forwarding, Logistics and UPS Mail Innovations units provide services in more than 200 countries and territories worldwide and include international air and ocean freight forwarding, customs brokerage, distribution and post-sales services, mail and consulting services. UPS Freight offers a variety of less-than-truckload and truckload services to customers in North America. On January 24, 2021, we entered into a definitive agreement to sell our UPS Freight business as discussed in note 4. Coyote offers truckload brokerage services primarily in the United States. Marken is a global provider of supply chain solutions to the healthcare and life sciences industry, specializing in clinical trials logistics. Other aggregated business units within this segment include The UPS Store and UPS Capital.
In evaluating financial performance, we focus on operating profit as a segment’s measure of profit or loss. Operating profit is before investment income (expense) and other, interest expense and income tax expense. Certain expenses are allocated between the segments using activity-based costing methods as described in Part I, "Item 7. Supplemental Information - Items Affecting Comparability" section of Management's Discussion and Analysis. As we operate an integrated, global multimodal network, we evaluate many of our capital expenditure decisions at a network level. Accordingly, expenditures on property, plant and equipment by segment are not presented. Unallocated assets are comprised primarily of cash, marketable securities and certain investment partnerships. In 2018, we changed the segment allocation methodology for certain shared assets. All prior periods have been recast to reflect this change in methodology.
Segment information for the years ended December 31, 2020, 2019 and 2018 is as follows (in millions):
2020 2019 2018
Revenue:
U.S. Domestic Package $ 53,499  $ 46,493  $ 43,593 
International Package 15,945  14,220  14,442 
Supply Chain & Freight 15,184  13,381  13,826 
Consolidated revenue $ 84,628  $ 74,094  $ 71,861 
Operating Profit:
U.S. Domestic Package $ 3,891  $ 4,164  $ 3,643 
International Package 3,436  2,657  2,529 
Supply Chain & Freight 357  977  852 
Consolidated operating profit $ 7,684  $ 7,798  $ 7,024 
Assets:
U.S. Domestic Package $ 35,067  $ 32,795  $ 28,216 
International Package 15,717  14,044  12,070 
Supply Chain & Freight(1)
9,041  9,045  8,411 
Unallocated 2,583  1,973  1,319 
Consolidated assets $ 62,408  $ 57,857  $ 50,016 
Depreciation and Amortization Expense:
U.S. Domestic Package $ 1,805  $ 1,520  $ 1,375 
International Package 597  547  526 
Supply Chain & Freight 296  293  306 
Consolidated depreciation and amortization expense $ 2,698  $ 2,360  $ 2,207 
(1) Includes $1.2 billion of assets held for sale related to the UPS Freight divestiture.
Revenue by product type for the years ended December 31, 2020, 2019 and 2018 is as follows (in millions):
2020 2019 2018
U.S. Domestic Package:
Next Day Air $ 8,522  $ 8,479  $ 7,618 
Deferred 5,665  5,180  4,752 
Ground 39,312  32,834  31,223 
Total U.S. Domestic Package 53,499  46,493  43,593 
International Package:
Domestic 3,160  2,836  2,874 
Export 12,159  10,837  10,973 
Cargo 626  547  595 
Total International Package 15,945  14,220  14,442 
Supply Chain & Freight:
Forwarding 6,975  5,867  6,580 
Logistics 4,073  3,435  3,234 
Freight 3,149  3,265  3,218 
Other 987  814  794 
Total Supply Chain & Freight 15,184  13,381  13,826 
Consolidated revenue $ 84,628  $ 74,094  $ 71,861 
Geographic information for the years ended December 31, 2020, 2019 and 2018 is as follows (in millions):
2020 2019 2018
United States:
Revenue $ 66,580  $ 58,699  $ 56,115 
Long-lived assets $ 28,354  $ 27,976  $ 24,918 
International:
Revenue $ 18,048  $ 15,395  $ 15,746 
Long-lived assets $ 10,213  $ 9,567  $ 8,577 
Consolidated:
Revenue $ 84,628  $ 74,094  $ 71,861 
Long-lived assets $ 38,567  $ 37,543  $ 33,495 
Long-lived assets include property, plant and equipment, pension and postretirement benefit assets, long-term investments, goodwill and intangible assets.
No countries outside of the United States provided 10% or more of consolidated revenue for the years ended December 31, 2020, 2019 or 2018. For the year ended December 31, 2020, Amazon.com, Inc. and its affiliates ("Amazon") represented 13.3% of our consolidated revenues. Substantially all of this revenue was attributed to U.S. Domestic Package. Amazon accounted for approximately 18.1% and 16.9% of accounts receivable, net, included within the consolidated balance sheets as of December 31, 2020 and 2019, respectively. No single customer represented 10% or more of our consolidated revenues for the year ended December 31, 2018.