ups-20210727
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 27, 2021

ups-20210727_g1.jpg
United Parcel Service, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware001-1545158-2480149
(State or other jurisdiction
of incorporation)		(Commission File Number)(IRS Employer
Identification No.)

      55 Glenlake Parkway, N.E., Atlanta, Georgia                30328
(Address of principal executive offices)                 (Zip Code)
Registrant’s telephone number, including area code (404) 828-6000
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Class B common stock, par value $0.01 per shareUPSNew York Stock Exchange
0.375% Senior Notes due 2023UPS23ANew York Stock Exchange
1.625% Senior Notes Due 2025UPS25New York Stock Exchange
1% Senior Notes due 2028UPS28New York Stock Exchange
1.500% Senior Notes due 2032UPS32New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company. ☐

If an emerging growth company, indicate by check mark if the registrant has elected not use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐








Item 2.02 — Results of Operations and Financial Condition.
     
On July 27, 2021, United Parcel Service, Inc. (the “Company”) issued a press release containing information about the Company’s results of operations for the second quarter ended June 30, 2021. The Company also posted on its website at www.investors.ups.com financial statement schedules containing additional detail about the Company's results of operations for the same period.

A copy of the press release is attached hereto as Exhibit 99.1. A copy of the financial statement schedules are attached hereto as Exhibit 99.2.

Item 9.01 — Financial Statements and Exhibits.

(d) Exhibits

99.1       Press release dated July 27, 2021 "UPS RELEASES 2Q 2021 EARNINGS"
99.2 Q2 2021 financial statement schedules
104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

The information contained in Items 2.02 and 9.01 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933 or the Exchange Act, except as may be expressly set forth by reference in any such filing.



Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
UNITED PARCEL SERVICE, INC.
Date: July 27, 2021By:/s/ BRIAN NEWMAN
Brian Newman
Senior Vice President, Chief Financial Officer and Treasurer



Exhibit 99.1
For Immediate Release

UPS RELEASES 2Q 2021 EARNINGS

•Consolidated Revenues of $23.4B, Up 14.5% from Last Year
•Consolidated Operating Profit of $3.3B, Up 47.3% from Last Year; Up 40.8% on
an Adjusted* Basis
•Diluted EPS of $3.05, up 50.2% from Last Year; Adjusted Diluted EPS Up 43.7%
to $3.06

ATLANTA – July 27, 2021 – UPS (NYSE:UPS) today announced second-quarter 2021 consolidated revenue of $23.4 billion, a 14.5% increase over the second quarter of 2020. Consolidated operating profit was $3.3 billion, up 47.3% compared to the second quarter of 2020, and up 40.8% on an adjusted basis. Diluted earnings per share were $3.05 for the quarter, 50.2% above the same period in 2020, and up 43.7% on an adjusted basis.

For the second quarter of 2021, GAAP results include after-tax transformation and other charges of $11 million, equivalent to $0.01 per share. Also in the second quarter, the company completed its divestiture of UPS Freight on April 30. The sale triggered re-measurement of certain U.S. pension and postretirement benefit plans. As a result, UPS pension and postretirement liabilities were lowered by $2.1 billion. The re-measurement had no meaningful impact to the company’s consolidated second-quarter net earnings. Year-to-date cash from operations was $8.5 billion, up 42.2% compared to the same period in 2020, with free cash flow of $6.8 billion, a 74.7% increase above the first six months of 2020.

“I want to thank all UPSers for executing our strategy and delivering high service levels, which fueled record financial results in the second quarter,” said Carol Tomé, UPS chief executive officer. “Through our better not bigger framework, we are moving our world forward by delivering what matters.”


U.S. Domestic Segment

2Q 2021
Adjusted
2Q 2021

2Q 2020
Adjusted
2Q 2020
Revenue$14,402M$13,074M
Operating profit$1,567M$1,675M$1,182M$1,215M

•Revenue was up 10.2%, driven by a 13.4% increase in revenue per piece from strong improvement in all products.
•Operating margin was 10.9%; adjusted operating margin was 11.6%.

International Segment
2Q 2021
Adjusted
2Q 2021

2Q 2020
Adjusted
2Q 2020
Revenue$4,817M$3,705M
Operating profit$1,184M$1,190M$771M$842M

•Revenue increased 30.0%, led by Europe.
•Operating margin was 24.6%; adjusted operating margin was 24.7%.








Supply Chain Solutions Segment

2Q 2021
Adjusted
2Q 2021

2Q 2020
Adjusted
2Q 2020
Revenue$4,205M$3,680M
Operating profit$507M$408M$259M$267M

•Revenue increased 14.3%, driven by strong demand in nearly all businesses.
•Operating margin was 12.1%; adjusted operating margin was 9.7%.


Outlook

For 2021, the company is projecting consolidated operating margin of approximately 12.7% and return on invested capital of approximately 28%. Further, the company is reaffirming its capital allocation plans for 2021:

•Capital expenditures are planned to be about $4.0 billion.
•Long-term debt repayments of $2.55 billion have been completed.
•Effective tax rate for the remainder of the year is expected to be around 23%.


* “Adjusted” amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial measures, including a reconciliation to the most closely correlated GAAP measure.


Contacts:
UPS Media Relations: 404-828-7123 or [email protected]
UPS Investor Relations: 404-828-6059 (option 4) or [email protected]

# # #


Conference Call Information


UPS CEO Carol Tomé and CFO Brian Newman will discuss second-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, July 27, 2021. That call will be open to others through a live Webcast. To access the call, go to www.investors.ups.com and click on “Earnings Conference Call.” Additional financial information is included in the detailed financial schedules being posted on www.investors.ups.com under “Quarterly Earnings and Financials” and as filed with the SEC as an exhibit to our Current Report on Form 8-K.

About UPS

UPS (NYSE: UPS) is one of the world’s largest package delivery companies with 2020 revenue of $84.6 billion, and provides a broad range of integrated logistics solutions for customers in more than 220 countries and territories. The company’s more than 540,000 employees embrace a strategy that is simply stated and powerfully executed: Customer First. People Led. Innovation Driven. UPS is committed to reducing its impact on the environment and supporting the communities we serve around the world. UPS also takes a strong and unwavering stance in support of diversity, equality, and inclusion. The company can be found on the Internet at www.ups.com, with more information at about.ups.com and www.investors.ups.com.

Forward-Looking Statements

This release and our filings with the Securities and Exchange Commission contain and in the future may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than those of current or historical fact, and all statements accompanied by terms such as “will,” “believe,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” “target,” “plan,” and similar terms, are intended to be forward-looking statements. Forward-looking statements are made subject to the safe harbor provisions of the federal securities laws pursuant to Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

From time to time, we also include written or oral forward-looking statements in other publicly disclosed materials. Such statements may relate to our intent, belief, forecasts of, or current expectations about our strategic direction, prospects, future results, or future events; they do not relate strictly to historical or current facts. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any forward-looking statements because such statements speak only as of the date when made and the future, by its very nature, cannot be predicted with certainty.

Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. These risks and uncertainties, include, but are not limited to: continued uncertainties related to the impact of the COVID-19 pandemic on our business and operations, financial performance and liquidity, our customers and suppliers, and on the global economy; changes in general economic conditions, in the U.S. or internationally; significant competition on a local, regional, national and international basis; changes in our relationships with our significant customers; changes in the regulatory environment in the U.S. or internationally; increased or more complex physical or data security requirements; legal, regulatory or market responses to global climate change; results of negotiations and ratifications of labor contracts; strikes, work stoppages or slowdowns by our employees; the effects of changing prices of energy, including gasoline, diesel and jet fuel, and interruptions in supplies of these commodities; changes in exchange rates or interest rates; uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; our ability to maintain our brand image; our ability to attract and retain qualified employees; breaches in data security; disruptions to the Internet or our technology infrastructure; interruptions in or impacts on our business from natural or man-made events


or disasters including terrorist attacks, epidemics or pandemics; our ability to accurately forecast our future capital investment needs; exposure to changing economic, political and social developments in international and emerging markets; changes in business strategy, government regulations, or economic or market conditions that may result in impairment of our assets; increases in our expenses or funding obligations relating to employee health, retiree health and/or pension benefits; potential additional U.S. or international tax liabilities; potential claims or litigation related to labor and employment, personal injury, property damage, business practices, environmental liability and other matters; our ability to realize the anticipated benefits from acquisitions, dispositions, joint ventures or strategic alliances; our ability to realize the anticipated benefits from our transformation initiatives; cyclical and seasonal fluctuations in our operating results; our ability to manage insurance and claims expenses; and other risks discussed in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2020 and subsequently filed reports. You should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations, or the occurrence of unanticipated events after the date of those statements.


Reconciliation of GAAP and non-GAAP Financial Measures

From time to time we supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP financial measures. These include: "adjusted" compensation and benefits; operating expenses; operating profit; operating margin; other income and (expense); income before income taxes; income tax expense; effective tax rate; net income and earnings per share. We present revenue and revenue per piece on a constant currency basis. Additionally, we disclose free cash flow and return on invested capital (“ROIC”).

We believe that these non-GAAP measures provide meaningful information to assist users of our financial statements in more fully understanding our financial results and cash flows and assessing our ongoing performance, because they exclude items that may not be indicative of, or are unrelated to, our underlying operations and may provide a useful baseline for analyzing trends in our underlying businesses. These non-GAAP measures are used internally by management for business unit operating performance analysis, business unit resource allocation and in connection with incentive compensation award determinations.

Non-GAAP financial measures should be considered in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our adjusted financial information does not represent a comprehensive basis of accounting. Therefore, our adjusted financial information may not be comparable to similarly titled information reported by other companies.

Restructuring and Other Charges

Adjusted operating profit, operating margin, income before income taxes, net income and earnings per share may exclude the impact of charges related to any restructuring programs, including transformation costs and asset impairments.

Changes in Foreign Currency Exchange Rates and Hedging Activities

Currency-neutral revenue, revenue per piece and operating profit exclude the period over period impact of foreign currency exchange rate changes and any foreign currency hedging activities. These measures are calculated by dividing current period reported U.S. dollar revenue, revenue per piece and operating profit by the current period average exchange rates to derive current period local currency revenue, revenue per piece and operating profit. The derived amounts are then multiplied by the average foreign exchange rates used to translate the comparable results for each month in the prior year period (including


the impact of any foreign currency hedging activities). The difference between the current period reported U.S. dollar revenue, revenue per piece and operating profit and the derived current period U.S. dollar revenue, revenue per piece and operating profit is the period over period impact of foreign currency exchange rates and hedging activities.

Mark-To-Market Pension and Postretirement Adjustments

We recognize changes in the fair value of plan assets and net actuarial gains and losses in excess of a 10% corridor for our pension and postretirement defined benefit plans immediately as part of other pension income (expense). We supplement our presentation of certain financial data with non-GAAP measures that exclude the impact of gains and losses recognized in excess of the 10% corridor and the related income tax effects. We believe excluding these mark-to-market impacts provides important supplemental information by removing the volatility associated with short-term changes in market interest rates, equity values, and similar factors.

The deferred income tax effects of mark-to-market pension and postretirement adjustments are calculated by multiplying the statutory tax rates applicable in each tax jurisdiction, including the U.S. federal jurisdiction and various U.S. state and non-U.S. jurisdictions, by the adjustments.

Free Cash Flow

We calculate free cash flow as cash flows from operating activities less capital expenditures, proceeds from disposals of property, plant and equipment, and plus or minus the net changes in finance receivables and other investing activities. We believe free cash flow is an important indicator of how much cash is generated by our ongoing business operations and we use this as a measure of incremental cash available to invest in our business, meet our debt obligations and return cash to shareowners.

Return on Invested Capital

ROIC is calculated as the trailing twelve months (“TTM”) of adjusted operating income divided by the average of total debt, non-current pension and postretirement benefit obligations and shareowners’ equity, at the current period end and the corresponding period end of the prior year. Because ROIC is not a measure defined by GAAP, we calculate it, in part, using non-GAAP financial measures that we believe are most indicative of our ongoing business performance. We consider ROIC to be a useful measure for evaluating the effectiveness and efficiency of our long-term capital investments.

Forward-Looking Non-GAAP Metrics

From time to time when presenting forward-looking non-GAAP metrics, we are unable to provide quantitative reconciliations to the most closely correlated GAAP measure due to the uncertainty in the timing, amount or nature of any adjustments, which could be material in any period.















Reconciliation of GAAP and Non-GAAP Income Statement Items
(in millions, except per share amounts):
Three Months Ended June 30, 2021
As-Reported (GAAP)
Transformation & Other Adj.(1)
As-Adjusted
(Non-GAAP)
Operating profit:
U.S. Domestic Package$1,567 $108 $1,675 
International Package1,184 6 1,190 
Supply Chain Solutions507 (99)408 
Operating Profit3,258 15 3,273 
Other Income and (Expense):
Other pension income (expense)302 — 302 
   Investment income and other43 — 43 
   Interest expense(167)— (167)
Total Other Income (Expense)$178 $— $178 
Income Before Income Taxes3,436 15 3,451 
Income Tax Expense760 4 764
Net Income$2,676 $11 $2,687 
Basic Earnings Per Share$3.06 $0.01 $3.07 
Diluted Earnings Per Share$3.05 $0.01 $3.06 


(1) Transformation & Other of $15 million reflects a gain on the divestiture of UPS Freight of $101 million, other employee benefits costs of $55 million and other costs of $61 million.
    





















Reconciliation of Currency Adjusted Revenue, Revenue Per Piece, and Adjusted Operating Profit
(in millions, except per piece amounts):
Three Months Ended June 30,
2021
As-Reported
(GAAP)		2020
As-Reported
(GAAP)		% Change
(GAAP)		Currency
Impact
2021
Currency
Neutral
(Non-GAAP)(1)
% Change
(Non-GAAP)
Average Revenue Per Piece:
International Package:
   Domestic$7.44 $6.37 16.8 %$(0.66)$6.78 6.4 %
   Export32.60 28.56 14.1 %(1.15)31.45 10.1 %
      Total International Package$19.32 $16.73 15.5 %$(0.89)$18.43 10.2 %
Consolidated$12.26 $10.63 15.3 %$(0.14)$12.12 14.0 %
Revenue:
  U.S. Domestic Package$14,402 $13,074 10.2 %$— $14,402 10.2 %
  International Package4,817 3,705 30.0 %(218)4,599 24.1 %
  Supply Chain Solutions4,205 3,680 14.3 %(64)4,141 12.5 %
  Total revenue$23,424 $20,459 14.5 %$(282)$23,142 13.1 %
(1) Amounts adjusted for period over period foreign currency exchange rate and hedging differences
2021
As-Adjusted
(Non-GAAP)(1)
2020
As-Adjusted
(Non-GAAP)(1)
% Change
(Non-GAAP)		Currency
Impact
2021
As-Adjusted
Currency
Neutral
(Non-GAAP)(2)
% Change
(Non-GAAP)
As-Adjusted Operating Profit:
  U.S. Domestic Package$1,675 $1,215 37.9 %$— $1,675 37.9 %
  International Package1,190 842 41.3 %(42)1,148 36.3 %
  Supply Chain Solutions408 267 52.8 %6 414 55.1 %
  Total operating profit$3,273 $2,324 40.8 %$(36)$3,237 39.3 %
(1) Amounts adjusted for transformation & other
(2) Amounts adjusted for transformation & other and period over period foreign currency exchange rate and hedging differences


















Reconciliation of Free Cash Flow (Non-GAAP measure)
(in millions):
Six Months Ended June 30,
2021
Cash flows from operating activities$8,454 
Capital expenditures(1,670)
Proceeds from disposals of PP&E15 
Net change in finance receivables16 
Other investing activities(11)
   Free Cash Flow (Non-GAAP measure)$6,804 


Amounts are subject to reclassification.







Exhibit 99.2
United Parcel Service, Inc.
Selected Financial Data - Second Quarter
(unaudited)

Three Months Ended
June 30
20212020Change% Change
(amounts in millions, except per share data)
Statement of Income Data:
Revenue:
  U.S. Domestic Package$14,402 $13,074 $1,328 10.2 %
  International Package4,817 3,705 1,112 30.0 %
  Supply Chain Solutions(2)
4,205 3,680 525 14.3 %
  Total revenue23,424 20,459 2,965 14.5 %
Operating expenses:
  U.S. Domestic Package12,835 11,892 943 7.9 %
  International Package3,633 2,934 699 23.8 %
  Supply Chain Solutions(2)
3,698 3,421 277 8.1 %
  Total operating expenses20,166 18,247 1,919 10.5 %
Operating profit:
  U.S. Domestic Package1,567 1,182 385 32.6 %
  International Package1,184 771 413 53.6 %
  Supply Chain Solutions(2)
507 259 248 95.8 %
  Total operating profit3,258 2,212 1,046 47.3 %
Other income (expense):
 Other pension income (expense)302 327 (25)(7.6)%
  Investment income and other43 1 42 N/M
  Interest expense(167)(183)16 (8.7)%
  Total other income (expense)178 145 33 22.8 %
Income before income taxes3,436 2,357 1,079 45.8 %
Income tax expense (benefit)760 589 171 29.0 %
Net income $2,676 $1,768 $908 51.4 %
Net income as a percentage of revenue11.4 %8.6 %
Per share amounts:
  Basic earnings per share$3.06 $2.04 $1.02 50.0 %
  Diluted earnings per share$3.05 $2.03 $1.02 50.2 %
Weighted-average shares outstanding:
  Basic875 866 9 1.0 %
  Diluted878 869 9 1.0 %
As Adjusted Income Data (1):
Operating profit:
  U.S. Domestic Package $1,675 $1,215 $460 37.9 %
  International Package 1,190 842 348 41.3 %
  Supply Chain Solutions(2)
408 267 141 52.8 %
  Total operating profit 3,273 2,324 949 40.8 %
Total other income (expense)$178 $145 $33 22.8 %
Income before income taxes $3,451 $2,469 $982 39.8 %
Net income $2,687 $1,851 $836 45.2 %
Basic earnings per share $3.07 $2.14 $0.93 43.5 %
Diluted earnings per share $3.06 $2.13 $0.93 43.7 %
(1) See Non-GAAP schedules for reconciliation of adjustments.
(2) The divestiture of UPS Freight was completed on April 30, 2021.

Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Selected Operating Data - Second Quarter
(unaudited)
Three Months Ended
June 30
20212020Change% Change
Revenue (in millions):
U.S. Domestic Package:
   Next Day Air$2,456 $1,984 $472 23.8 %
   Deferred1,313 1,298 15 1.2 %
   Ground10,633 9,792 841 8.6 %
      Total U.S. Domestic Package14,402 13,074 1,328 10.2 %
International Package:
   Domestic936 719 217 30.2 %
   Export3,674 2,824 850 30.1 %
   Cargo and Other207 162 45 27.8 %
      Total International Package4,817 3,705 1,112 30.0 %
Supply Chain Solutions(1):
   Forwarding2,309 1,771 538 30.4 %
Logistics1,162 977 185 18.9 %
   Freight297 724 (427)(59.0)%
   Other437 208 229 110.1 %
      Total Supply Chain Solutions(1)
4,205 3,680 525 14.3 %
Consolidated$23,424 $20,459 $2,965 14.5 %
Consolidated volume (in millions)1,551 1,564 (13)(0.8)%
Operating weekdays64 64 — 0.0 %
Average Daily Package Volume (in thousands):
U.S. Domestic Package:
   Next Day Air2,071 1,865 206 11.0 %
   Deferred1,581 1,702 (121)(7.1)%
   Ground16,856 17,560 (704)(4.0)%
      Total U.S. Domestic Package20,508 21,127 (619)(2.9)%
International Package:
   Domestic1,967 1,764 203 11.5 %
   Export1,761 1,545 216 14.0 %
      Total International Package3,728 3,309 419 12.7 %
Consolidated24,236 24,436 (200)(0.8)%
Average Revenue Per Piece:
U.S. Domestic Package:
   Next Day Air$18.53 $16.62 $1.91 11.5 %
   Deferred12.98 11.921.06 8.9 %
   Ground9.868.71 1.15 13.2 %
      Total U.S. Domestic Package10.979.67 1.30 13.4 %
International Package:
   Domestic7.44 6.37 1.07 16.8 %
   Export32.6028.564.04 14.1 %
      Total International Package19.32 16.73 2.59 15.5 %
Consolidated$12.26 $10.63 $1.63 15.3 %
(1) The divestiture of UPS Freight was completed on April 30, 2021.





Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Detail of Operating Expenses - Second Quarter
(unaudited)
Three Months Ended
June 30
20212020Change% Change
(in millions)
Compensation and benefits$11,327 $10,843 $484 4.5 %
Repairs and maintenance599 554 45 8.1 %
Depreciation and amortization739 661 78 11.8 %
Purchased transportation4,446 3,716 730 19.6 %
Fuel915 499 416 83.4 %
Other occupancy402 355 47 13.2 %
Other expenses1,738 1,619 119 7.4 %
Total operating expenses$20,166 $18,247 $1,919 10.5 %


























































Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Selected Financial Data - Year to Date
(unaudited)

Six Months Ended
June 30
20212020Change% Change
(amounts in millions, except per share data)
Statement of Income Data:
Revenue:
  U.S. Domestic Package$28,412 $24,530 $3,882 15.8 %
  International Package9,424 7,088 2,336 33.0 %
  Supply Chain Solutions(2)
8,496 6,876 1,620 23.6 %
  Total revenue46,332 38,494 7,838 20.4 %
Operating expenses:
  U.S. Domestic Package25,486 22,984 2,502 10.9 %
  International Package7,155 5,766 1,389 24.1 %
  Supply Chain Solutions(2)
7,668 6,460 1,208 18.7 %
  Total operating expenses40,309 35,210 5,099 14.5 %
Operating profit:
  U.S. Domestic Package2,926 1,546 1,380 89.3 %
  International Package2,269 1,322 947 71.6 %
  Supply Chain Solutions(2)
828 416 412 99.0 %
  Total operating profit6,023 3,284 2,739 83.4 %
Other income (expense):
 Other pension income (expense)3,905 654 3,251 497.1 %
  Investment income and other56 19 37 194.7 %
  Interest expense(344)(350)6 (1.7)%
  Total other income (expense)3,617 323 3,294 N/M
Income before income taxes9,640 3,607 6,033 167.3 %
Income tax expense (benefit)2,172 874 1,298 148.5 %
Net income $7,468 $2,733 $4,735 173.3 %
Net income as a percentage of revenue16.1 %7.1 %
Per share amounts:
  Basic earnings per share$8.54 $3.16 $5.38 170.3 %
  Diluted earnings per share$8.51 $3.14 $5.37 171.0 %
Weighted-average shares outstanding:
  Basic874 865 9 1.0 %
  Diluted878 869 9 1.0 %
As Adjusted Income Data (1):
Operating profit:
  U.S. Domestic Package $3,138 $1,616 $1,522 94.2 %
  International Package 2,281 1,400 881 62.9 %
  Supply Chain Solutions(2)
803 425 378 88.9 %
  Total operating profit 6,222 3,441 2,781 80.8 %
Total other income (expense)$327 $323 $4 1.2 %
Income before income taxes $6,549 $3,764 $2,785 74.0 %
Net income $5,117 $2,851 $2,266 79.5 %
Basic earnings per share $5.85 $3.30 $2.55 77.3 %
Diluted earnings per share $5.83 $3.28 $2.55 77.7 %
(1) See Non-GAAP schedules for reconciliation of adjustments.
(2) The divestiture of UPS Freight was completed on April 30, 2021.



Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Selected Operating Data - Year to Date
(unaudited)
Six Months Ended
June 30
20212020Change% Change
Revenue (in millions):
U.S. Domestic Package:
   Next Day Air$4,787 $4,039 $748 18.5 %
   Deferred2,573 2,495 78 3.1 %
   Ground21,052 17,996 3,056 17.0 %
      Total U.S. Domestic Package28,412 24,530 3,882 15.8 %
International Package:
   Domestic1,864 1,407 457 32.5 %
   Export7,167 5,385 1,782 33.1 %
   Cargo and Other393 296 97 32.8 %
      Total International Package9,424 7,088 2,336 33.0 %
Supply Chain Solutions(1):
   Forwarding4,381 3,144 1,237 39.3 %
Logistics2,266 1,822 444 24.4 %
   Freight1,064 1,490 (426)(28.6)%
   Other785 420 365 86.9 %
      Total Supply Chain Solutions(1)
8,496 6,876 1,620 23.6 %
Consolidated$46,332 $38,494 $7,838 20.4 %
Consolidated volume (in millions)3,072 2,916 156 5.4 %
Operating weekdays127 128 (1)(0.8)%
Average Daily Package Volume (in thousands):
U.S. Domestic Package:
   Next Day Air2,041 1,874 167 8.9 %
   Deferred1,548 1,597 (49)(3.1)%
   Ground16,842 16,114 728 4.5 %
      Total U.S. Domestic Package20,431 19,585 846 4.3 %
International Package:
   Domestic1,988 1,716 272 15.9 %
   Export1,772 1,479 293 19.8 %
      Total International Package3,760 3,195 565 17.7 %
Consolidated24,191 22,780 1,411 6.2 %
Average Revenue Per Piece:
U.S. Domestic Package:
   Next Day Air$18.47 $16.84 $1.63 9.7 %
   Deferred13.09 12.210.88 7.2 %
   Ground9.848.72 1.12 12.8 %
      Total U.S. Domestic Package10.959.79 1.16 11.8 %
International Package:
   Domestic7.38 6.41 0.97 15.1 %
   Export31.8528.453.40 12.0 %
      Total International Package18.91 16.61 2.30 13.8 %
Consolidated$12.19 $10.74 $1.45 13.5 %
(1) The divestiture of UPS Freight was completed on April 30, 2021.





Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Detail of Operating Expenses - Year to Date
(unaudited)
Six Months Ended
June 30
20212020Change% Change
(in millions)
Compensation and benefits$22,810 $20,929 $1,881 9.0 %
Repairs and maintenance1,218 1,117 101 9.0 %
Depreciation and amortization1,461 1,309 152 11.6 %
Purchased transportation8,689 6,647 2,042 30.7 %
Fuel1,722 1,260 462 36.7 %
Other occupancy868 738 130 17.6 %
Other expenses3,541 3,210 331 10.3 %
Total operating expenses$40,309 $35,210 $5,099 14.5 %


























































Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Consolidated Balance Sheets
June 30, 2021 (unaudited) and December 31, 2020

June 30, 2021December 31, 2020
(amounts in millions)
ASSETS
Current Assets:
Cash and cash equivalents$9,608 $5,910 
Marketable securities346 406 
Accounts receivables10,260 10,888 
Less: Allowance for credit losses(123)(138)
Accounts receivable, net10,137 10,750 
Assets held for sale— 1,197 
Other current assets1,897 1,953 
 Total Current Assets21,988 20,216 
Property, Plant and Equipment, Net32,631 32,254 
Operating Lease Right-Of-Use Assets3,568 3,073 
Goodwill3,357 3,367 
Intangible Assets, Net2,238 2,274 
Investments and Restricted Cash25 25 
Deferred Income Tax Assets187 527 
Other Non-Current Assets875 672 
Total Assets $64,869 $62,408 
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities:
Current maturities of long-term debt, commercial paper and finance leases$1,564 $2,623 
Current maturities of operating leases556 560 
Accounts payable6,563 6,455 
Accrued wage and withholdings3,737 3,569 
Self-insurance reserves1,110 1,085 
Accrued group welfare and retirement plan contributions884 927 
Liabilities to be disposed of— 347 
Other current liabilities 1,356 1,450 
Total Current Liabilities15,770 17,016 
Long-Term Debt and Finance Leases21,027 22,031 
Non-Current Operating Leases3,038 2,540 
Pension and Postretirement Benefit Obligations7,675 15,817 
Deferred Income Tax Liabilities2,584 488 
Other Non-Current Liabilities3,953 3,847 
Shareowners' Equity:
Class A common stock2 2 
Class B common stock7 7 
Additional paid-in capital1,329 865 
Retained earnings12,531 6,896 
Accumulated other comprehensive loss(3,064)(7,113)
Deferred compensation obligations16 20 
Less: Treasury stock(16)(20)
Total Equity for Controlling Interest10,805 657 
Noncontrolling interests17 12 
Total Shareowners' Equity10,822 669 
Total Liabilities and Sharewoners' Equity$64,869 $62,408 



Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Statements of Consolidated Cash Flows
(unaudited)
(amounts in millions)Six Months Ended
June 30,
20212020
Cash Flows From Operating Activities:
Net income$7,468 $2,733 
Adjustments to reconcile net income to net cash from operating activities:
 Depreciation and amortization 1,461 1,309 
 Pension and postretirement benefit expense (2,839)321 
 Pension and postretirement benefit contributions (276)(263)
 Self-insurance reserves 130 293 
 Deferred tax (benefit) expense 1,127 284 
 Stock compensation expense 521 368 
 Other (gains) losses — 97 
Changes in assets and liabilities, net of effects of business acquisitions:
 Accounts receivable 439 105 
 Other assets 169 301 
 Accounts payable 56 (617)
 Accrued wages and withholdings 227 771 
 Other liabilities (27)239 
Other operating activities(2)6 
 Net cash from operating activities 8,454 5,947 
Cash Flows From Investing Activities:
Capital expenditures(1,670)(2,065)
Proceeds from disposal of businesses, property, plant and equipment863 2 
Purchases of marketable securities(141)(131)
Sales and maturities of marketable securities214 241 
Net change in finance receivables16 16 
Cash paid for business acquisitions, net of cash and cash equivalents acquired(5)— 
Other investing activities(11)(6)
Net cash used in investing activities(734)(1,943)
Cash Flows From Financing Activities:
Net change in short-term debt498 (892)
Proceeds from long-term borrowings— 4,436 
Repayments of long-term borrowings(2,599)(1,826)
Purchases of common stock— (231)
Issuances of common stock141 131 
Dividends(1,718)(1,683)
Other financing activities(360)(334)
Net cash used in financing activities(4,038)(399)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash16 (29)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash3,698 3,576 
Cash, Cash Equivalents and Restricted Cash:
Beginning of period5,910 5,238 
End of period$9,608 $8,814 







Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Reconciliation of Free Cash Flow (Non-GAAP measure)
(unaudited)
(amounts in millions)Six Months Ended
June 30,
20212020
Cash flows from operating activities$8,454 $5,947 
Capital expenditures(1,670)(2,065)
Proceeds from disposals of PP&E15 2 
Net change in finance receivables16 16 
Other investing activities(11)(6)
   Free Cash Flow (Non-GAAP measure)$6,804 $3,894 














































Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Adjusted Total Debt / Adjusted EBITDA (Non-GAAP measure)
(unaudited)
(amounts in millions)
Q3 2020Q4 2020Q1 2021Q2 2021
TTM(1)
Net Income (loss)$1,957 $(3,347)$4,792 $2,676 $6,078 
Add back:
Income tax expense (benefit)568(941)1,4127601,799
Interest expense176175177167695
Depreciation and amortization6777127227392,850
EBITDA3,378(3,401)7,1034,34211,422
Add back:
Transformation and other44 833 184 15 1,076 
Defined benefit plans mark-to-market losses— 6,484 — — 6,484 
Deduct:
Defined benefit plans mark-to-market gain— — (3,290)— (3,290)
Investment income and other(338)(334)(326)(345)(1,343)
Adjusted EBITDA$3,084 $3,582 $3,671 $4,012 $14,349 
Debt and finance leases, including current maturities$22,591 $22,591 
Add back:
Non-current pension and postretirement benefit obligations7,6757,675
Adjusted total debt$30,266 $30,266 
Adjusted total adjusted debt/adjusted EBITDA2.11 

(1) Trailing twelve months (TTM) ended June 30th






























Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Reconciliation of GAAP and As Adjusted Income Statement Data
(unaudited):
Three Months Ended June 30,
(in millions, except per share amounts)20212020
As-Reported (GAAP)
Transformation & Other Adj.(1)
As-Adjusted
(Non-GAAP)		As-Reported (GAAP)
Transformation & Other Adj.(2)
As-Adjusted
(Non-GAAP)
U.S. Domestic Package$1,567 $108 1,675 $1,182 $33 $1,215 
International Package1,184 6 1,190 771 71 842 
Supply Chain Solutions(3)
507 (99)408 259 8 267 
Operating profit3,258 15 3,273 2,212 112 2,324 
Other Income and (Expense):
Other pension income (expense)302 — 302 327 — 327 
Investment income and other43 — 43 1 — 1 
Interest expense(167)— (167)(183)— (183)
Total Other Income (Expense)$178 $— $178 $145 $— $145 
Income Before Income Taxes3,436 15 3,451 2,357 112 2,469 
Income Tax Expense760 4 764589 29 618
Net Income$2,676 $11 $2,687 $1,768 $83 $1,851 
Basic Earnings Per Share$3.06 $0.01 $3.07 $2.04 $0.10 $2.14 
Diluted Earnings Per Share$3.05 $0.01 $3.06 $2.03 $0.10 $2.13 
Weighted-average shares outstanding:
Basic875 866 
Diluted878 869 

(1) Transformation & Other of $15 million reflects a gain on the divestiture of UPS Freight of $101 million, other employee benefits costs of $55 million and other costs of $61 million.

(2) Transformation & Other of $112 million reflects other employee benefits costs of $81 million and other costs of $31 million.

(3) The divestiture of UPS Freight was completed on April 30, 2021.


























Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Reconciliation of GAAP and As Adjusted Income Statement Data
(unaudited):
Six Months Ended June 30,
(in millions, except per share amounts)20212020
As-Reported (GAAP)
Pension MTM Adj(1).
Transformation & Other Adj.(2)
As-Adjusted
(Non-GAAP)		As-Reported (GAAP)
Transformation & Other Adj.(3)
As-Adjusted
(Non-GAAP)
U.S. Domestic Package$2,926 $— 212 $3,138 $1,546 $70 $1,616 
International Package2,269 — 12 2,281 1,322 78 1,400 
Supply Chain Solutions(4)
828 — (25)803 416 9 425 
Operating profit6,023 — 199 6,222 3,284 157 3,441 
Other Income and (Expense):
Other pension income (expense)3,905 (3,290)— 615 654 — 654 
Investment income and other56 — — 56 19 — 19 
Interest expense(344)— — (344)(350)— (350)
Total Other Income (Expense)$3,617 $(3,290)$— $327 $323 $— $323 
Income Before Income Taxes9,640 (3,290)199 6,549 3,607 157 3,764 
Income Tax Expense2,172 (788)481,432 874 39 913
Net Income$7,468 $(2,502)$151 $5,117 $2,733 $118 $2,851 
Basic Earnings Per Share$8.54 $(2.86)$0.17 $5.85 $3.16 $0.14 $3.30 
Diluted Earnings Per Share$8.51 $(2.85)$0.17 $5.83 $3.14 $0.14 $3.28 
Weighted-average shares outstanding:
Basic874 865 
Diluted878 869 

(1) Represents a mark-to-market gain recognized outside of a 10% corridor to the UPS IBT Pension Plan

(2) Transformation & Other of $199 million reflects a gain on the divestiture of UPS Freight of $101 million net of previously-recognized valuation allowance of $66 million, other employee benefits costs of $131 million and other costs of $103 million.

(3) Transformation & Other of $157 million reflects other employee benefits costs of $93 million and other costs of $64 million.

(4) The divestiture of UPS Freight was completed on April 30, 2021.























Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Supplemental Analysis of Currency - Second Quarter
(unaudited)

Currency Neutral Revenue Per Piece, Revenue and As Adjusted Operating Profit
Three Months EndedCurrency
June 30Neutral
20212020% ChangeCurrency
2021 (1)
% Change
Average Revenue Per Piece:
International Package:
   Domestic$7.44 $6.37 16.8 %$(0.66)$6.78 6.4 %
   Export32.60 28.56 14.1 %(1.15)31.45 10.1 %
      Total International Package$19.32 $16.73 15.5 %$(0.89)$18.43 10.2 %
Consolidated$12.26 $10.63 15.3 %$(0.14)$12.12 14.0 %
Three Months EndedCurrency
June 30Neutral
20212020% ChangeCurrency
2021(1)
% Change
Revenue (in millions):
  U.S. Domestic Package$14,402 $13,074 10.2 %$— $14,402 10.2 %
  International Package4,817 3,705 30.0 %(218)4,599 24.1 %
  Supply Chain Solutions(3)
4,205 3,680 14.3 %(64)4,141 12.5 %
  Total revenue$23,424 $20,459 14.5 %$(282)$23,142 13.1 %
Three Months EndedCurrency
June 30Neutral
20212020% ChangeCurrency
2021(1)
% Change
As-Adjusted Operating Profit (in millions)(2):
  U.S. Domestic Package$1,675 $1,215 37.9 %$— $1,675 37.9 %
  International Package1,190 842 41.3 %(42)1,148 36.3 %
  Supply Chain Solutions(3)
408 267 52.8 %6 414 55.1 %
  Total operating profit$3,273 $2,324 40.8 %$(36)$3,237 39.3 %

(1) Amounts adjusted for period over period foreign currency exchange rate and hedging differences

(2) Amounts adjusted for transformation & other

(3) The divestiture of UPS Freight was completed on April 30, 2021.




















Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Supplemental Analysis of Currency - Year to Date
(unaudited)

Currency Neutral Revenue Per Piece, Revenue and As Adjusted Operating Profit
Six Months EndedCurrency
June 30Neutral
20212020% ChangeCurrency
2021 (1)
% Change
Average Revenue Per Piece:
International Package:
   Domestic$7.38 $6.41 15.1 %$(0.56)$6.82 6.4 %
   Export31.85 28.45 12.0 %(1.10)30.75 8.1 %
      Total International Package$18.91 $16.61 13.8 %$(0.81)$18.10 9.0 %
Consolidated$12.19 $10.74 13.5 %$(0.13)$12.06 12.3 %
Six Months EndedCurrency
June 30Neutral
20212020% ChangeCurrency
2021(1)
% Change
Revenue (in millions):
  U.S. Domestic Package$28,412 $24,530 15.8 %$— $28,412 15.8 %
  International Package9,424 7,088 33.0 %(394)9,030 27.4 %
  Supply Chain Solutions(3)
8,496 6,876 23.6 %(109)8,387 22.0 %
  Total revenue$46,332 $38,494 20.4 %$(503)$45,829 19.1 %
Six Months EndedCurrency
June 30Neutral
20212020% ChangeCurrency
2021(1)
% Change
As-Adjusted Operating Profit (in millions)(2):
  U.S. Domestic Package$3,138 $1,616 94.2 %$— $3,138 94.2 %
  International Package2,281 1,400 62.9 %(81)2,200 57.1 %
  Supply Chain Solutions(3)
803 425 88.9 %8 811 90.8 %
  Total operating profit$6,222 $3,441 80.8 %$(73)$6,149 78.7 %

(1) Amounts adjusted for period over period foreign currency exchange rate and hedging differences

(2) Amounts adjusted for transformation & other

(3) The divestiture of UPS Freight was completed on April 30, 2021.


















Certain prior year amounts have been reclassified to conform to the current year presentation.


United Parcel Service, Inc.
Aircraft Fleet - as of June 30, 2021
(unaudited)
DescriptionOwned and Finance LeasesOperating Leases & Charters from OthersOn OrderUnder Option
Operating:
Boeing 757-20075 — — — 
Boeing 767-30070 — 2 — 
Boeing 767-300BCF4 — — — 
Boeing 767-300BDSF4 — — — 
Airbus A300-60052 — — — 
Boeing MD-1142 — — — 
Boeing 747-400F11 — — — 
Boeing 747-400BCF2 — — — 
Boeing 747-8F22 — 6 — 
Other— 294 — — 
          Total282 294 8 — 

















































Certain prior year amounts have been reclassified to conform to the current year presentation.