United Parcel Service, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

QUARTERLY INFORMATION (unaudited)

QUARTERLY INFORMATION (unaudited)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

QUARTERLY INFORMATION (UNAUDITED)

Our revenue, segment operating profit, net income, basic and diluted earnings per share on a quarterly basis are presented below (in millions, except per share amounts):



	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
	2018		2017		2018		2017		2018		2017		2018			2017
Revenue:
U.S. Domestic Package	$	10,227	$	9,536	$	10,354	$	9,741	$	10,437	$	9,651	$	12,575		$	11,833
International Package	3,533		3,074		3,602		3,171		3,478		3,376		3,829			3,721
Supply Chain & Freight	3,353		2,900		3,500		3,015		3,529		3,146		3,444			3,421
Total revenue	17,113		15,510		17,456		15,927		17,444		16,173		19,848			18,975
Operating Profit:
U.S. Domestic Package	756		950		939		1,255		949		1,011		999			1,087
International Package	594		518		618		570		536		606		781			735
Supply Chain & Freight	170		149		216		212		242		195		224			241
Total operating profit	1,520		1,617		1,773		2,037		1,727		1,812		2,004			2,063
Total Other Income and (Expense)	$	141	$	93	$	153	$	82	$	162	$	125	$	(1,461	)	$	(692	)

Net Income	$	1,345	$	1,166	$	1,485	$	1,384	$	1,508	$	1,259	$	453		$	1,096
Net Income Per Share:
Basic	$	1.55	$	1.33	$	1.71	$	1.59	$	1.74	$	1.45	$	0.52		$	1.26
Diluted	$	1.55	$	1.33	$	1.71	$	1.58	$	1.73	$	1.44	$	0.52		$	1.26

This table reflects the impact of the adoption of new accounting standards in 2018. Refer to note 1 to the audited consolidated financial statements.

Operating profit for the quarter ended June 30, 2018 was impacted by $263 million of transformation strategy costs, which includes voluntary retirement plan severance costs of $192 million and other costs of $71 million. These costs were allocated between the U.S. Domestic Package segment ($196 million), International Package segment ($36 million) and Supply Chain & Freight segment ($31 million). The transformation strategy costs reduced second quarter net income by $200 million, and basic and diluted earnings per share by $0.24 and $0.23, respectively.

Operating profit for the quarter ended September 30, 2018 was impacted by $97 million of transformation strategy costs. These costs were allocated between the U.S. Domestic Package segment ($39 million), International Package segment ($40 million) and Supply Chain & Freight segment ($18 million). The transformation strategy costs reduced third quarter net income by $73 million, and basic and diluted earnings per share by $0.09.

Other income and (expense) for the quarter ended December 31, 2018 was impacted by a mark-to-market loss of $1.627 billion on our pension and postretirement benefit plans related to the remeasurement of plan assets and liabilities recognized outside of a 10% corridor. This loss reduced net income by $1.237 billion and basic and diluted earnings per share by $1.43 and $1.42, respectively.

Other income and (expense) for the quarter ended December 31, 2017 was impacted by a mark-to-market loss of $800 million on our pension and postretirement benefit plans related to the remeasurement of plan assets and liabilities recognized outside of a 10% corridor. Net income for the quarter ended December 31, 2017 includes an income tax benefit of $258 million attributable to the 2017 Tax Act. These items reduced fourth quarter net income by $349 million and basic and diluted earnings per share by $0.41 and $0.40, respectively.