Annual report pursuant to Section 13 and 15(d)

SEGMENT AND GEOGRAPHIC INFORMATION

v3.10.0.1
SEGMENT AND GEOGRAPHIC INFORMATION
 12 Months Ended
Dec. 31, 2018
Segments, Geographical Areas [Abstract]  
SEGMENT AND GEOGRAPHIC INFORMATION
SEGMENT AND GEOGRAPHIC INFORMATION
We report our operations in three segments: U.S. Domestic Package operations, International Package operations and Supply Chain & Freight operations. 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
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 the operations of our Europe, Asia, Americas and ISMEA operating segments.
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 LTL and TL services to customers in North America. Coyote offers truckload brokerage services primarily in the United States. Marken is a global provider of supply chain solutions to the life sciences industry. 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 taxes. The accounting policies of the segments are the same as those described in the "Items Affecting Comparability" section of Management's Discussion and Analysis, with certain expenses allocated between the segments using activity-based costing methods. 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, 2018, 2017 and 2016 is as follows (in millions):
 
2018
 
2017
 
2016
Revenue:
 
 
 
 
 
U.S. Domestic Package
$
43,593

 
$
40,761

 
$
38,284

International Package
14,442

 
13,342

 
12,346

Supply Chain & Freight
13,826

 
12,482

 
10,980

Consolidated
$
71,861

 
$
66,585

 
$
61,610

Operating Profit:
 
 
 
 
 
U.S. Domestic Package
$
3,643

 
$
4,303

 
$
4,628

International Package
2,529

 
2,429

 
2,417

Supply Chain & Freight
852

 
797

 
643

Consolidated
$
7,024

 
$
7,529

 
$
7,688

Assets:
 
 
 
 
 
U.S. Domestic Package
$
28,216

 
$
25,449

 
$
22,299

International Package
12,070

 
10,361

 
9,219

Supply Chain & Freight
8,411

 
8,267

 
7,841

Unallocated
1,319

 
1,497

 
1,186

Consolidated
$
50,016

 
$
45,574

 
$
40,545

Depreciation and Amortization Expense:
 
 
 
 
 
U.S. Domestic Package
$
1,375

 
$
1,479

 
$
1,482

International Package
526

 
509

 
488

Supply Chain & Freight
306

 
294

 
254

Consolidated
$
2,207

 
$
2,282

 
$
2,224


Revenue by product type for the years ended December 31, 2018, 2017 and 2016 is as follows (in millions):
 
2018
 
2017
 
2016
U.S. Domestic Package:
 
 
 
 
 
Next Day Air
$
7,618

 
$
7,088

 
$
6,752

Deferred
4,752

 
4,422

 
4,080

Ground
31,223

 
29,251

 
27,452

Total U.S. Domestic Package
43,593

 
40,761

 
38,284

International Package:
 
 
 
 
 
Domestic
2,874

 
2,646

 
2,441

Export
10,973

 
10,170

 
9,369

Cargo
595

 
526

 
536

Total International Package
14,442

 
13,342

 
12,346

Supply Chain & Freight:
 
 
 
 
 
Forwarding
6,580

 
5,674

 
4,873

Logistics
3,234

 
3,017

 
2,644

Freight
3,218

 
3,000

 
2,737

Other
794

 
791

 
726

Total Supply Chain & Freight
13,826

 
12,482

 
10,980

Consolidated
$
71,861

 
$
66,585

 
$
61,610



Geographic information for the years ended December 31, 2018, 2017 and 2016 is as follows (in millions):
 
2018
 
2017
 
2016
United States:
 
 
 
 
 
Revenue
$
56,115

 
$
52,080

 
$
48,434

Long-lived assets
$
24,918

 
$
21,141

 
$
18,761

International:
 
 
 
 
 
Revenue
$
15,746

 
$
14,505

 
$
13,176

Long-lived assets
$
8,577

 
$
7,966

 
$
6,700

Consolidated:
 
 
 
 
 
Revenue
$
71,861

 
$
66,585

 
$
61,610

Long-lived assets
$
33,495

 
$
29,107

 
$
25,461


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, nor any individual customers, provided 10% or more of consolidated revenue for the years ended December 31, 2018, 2017 or 2016.