Execution, Strategies and Investments Drive Continued Gains and Uniquely Position UPS for Future Success
- 4Q19 Operating Profit Growth and Margin Expansion in All Segments
- 4Q19 Positive Operating Leverage Driven by Lower Unit Cost in the U.S.
- 4Q19 Diluted EPS of ($0.12); Adjusted* Diluted 4Q19 EPS Up 8.8% to $2.11
- 4Q19 U.S. Daily Volume Grew Nearly 9%; Next Day Air Volume Up Nearly 26%
- 2019 Cash from Operations of $8.6B; Adjusted Free Cash Flow Topped $4.1B
- Announces Full-Year 2020 Adjusted EPS Guidance Range of $7.76 to $8.06
- Speeding up time-in-transit and broadening weekend services in 2020 to capture profitable growth from Small- and Medium-sized Businesses (SMB)
UPS (NYSE:UPS) today announced fourth-quarter 2019 adjusted earnings per share of $2.11, an 8.8% increase over the same period last year. The company’s results highlight the strong volume growth in the U.S. Domestic segment and the impact of successful execution from all segments.
“Our network improvements from transformation enabled UPS to embrace a surge in demand for air products while at the same time generate productivity improvements and positive operating leverage,” said David Abney, UPS chairman and CEO. “Looking to 2020, we will continue to adapt to the changing environment, strengthen our network and create new solutions to support our strategic growth initiatives and help our customers grow and compete.”
In the fourth quarter of 2019, the company incurred a non-cash, after-tax mark-to-market (MTM) pension charge of $1.8 billion, an after-tax transformation charge of $39 million, and U.S. Domestic after-tax legal contingency and expense charges of $91 million, predominantly related to the New York cigarette case. The total impact to EPS was $2.23 per diluted share. MTM pension charges of $1.42 per diluted share were included in the company’s fourth-quarter GAAP results in the prior-year period.
2018 年第 4 季
Diluted Earnings/Loss Per Share
* “Adjusted” amounts presented in this release are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial metrics, including a reconciliation to the most closely correlated GAAP measure.
For the total company in 4Q 2019:
- Average daily volume levels exceeded 26.6 million packages, an increase of 7.5%, driven by high demand for air services in the U.S.
- Consolidated revenue increased 3.6% to $20.6 billion, due to strong average daily volume growth during the peak holiday season.
- Operating profit grew 6.4%, and 13.7% on an adjusted basis, with margin improvement across all segments.
The U.S. Domestic segment benefited from several transformation initiatives, including increased automated capacity and new aircraft added to the global air fleet, which positioned UPS to handle volume growth in each month of the quarter. Total volume across all products grew nearly 9%. Growth was driven by the structural shift to faster delivery in retail and e-commerce, and from competitive wins. UPS experienced growth from a number of large and SMB customers, with the growth led by UPS’s largest customer, Amazon.
“We processed record volume during the quarter as customers took full advantage of the capabilities of our integrated network and broad portfolio of solutions,” said Abney. “Given the tremendous opportunities ahead, we have elected to implement SMB initiatives now to speed up our network and broaden our weekend operations, actions that will improve our competitiveness and generate growth.”
2018 年第 4 季
$ 1,207 M
- Revenue grew $833 million, a more than 6.5% increase, with growth across all products.
- Operating profit increased 7.5%, up over 20% on an adjusted basis.
- Operating margin was 8%; adjusted operating margin expanded 110 basis points.
- Unit costs declined 2.1%; on an adjusted basis down 3.2%, contributing to the third consecutive quarter of positive operating leverage.
The International segment delivered higher profit and expanded operating margin, adapting well to the dynamic macro environment. Strong execution, cost management and a strategic focus on market and e-commerce opportunities enabled the solid performance for the quarter.
2018 年第 4 季
$ 809 M
- Export volume was down slightly as gains on intra-Europe, intra-Asia and U.S. export trade lanes did not fully offset the declines into and out of the U.K. and on the Asia-U.S. lane.
- Operating profit increased more than 2%, and by 3.6% on an adjusted basis.
- Industry-leading operating margin remained strong at 21.2%; adjusted operating margin expanded 110 basis points.
Supply Chain and Freight produced strong profit growth in the quarter. The segment also expanded operating margins driven by disciplined cost management actions and continued focus on growing its SMB customer base.
2018 年第 4 季
$ 262 M
- Operating profit increased more than 16%, and by 17% on an adjusted basis.
- Logistics, Marken and UPS Freight delivered revenue growth.
- Logistics and Marken grew profits by double digits, which helped offset softer conditions in Forwarding and truckload brokerage.
- UPS Freight produced an increase in revenue per LTL (less-than-truckload) hundredweight of 2.5%, driven by its focus on SMBs.
Full-year 2019 Consolidated Results
- UPS’s transformation investments generated higher total revenue, operating profit growth and margin expansion in all segments.
- Full-year 2019 diluted EPS totaled $5.11; adjusted diluted EPS was $7.53, excluding the impacts of the MTM pension charge, transformation charges and legal contingencies.
- Total revenue increased to $74 billion, driven by strong volume growth in the U.S.
- Capital expenditures were $6.4 billion, and on an adjusted basis $6.5 billion, to support network enhancements.
- Annual adjusted free cash flow exceeded $4.1 billion.
- Dividends paid were $3.3 billion, a per-share increase of 5.5% over the prior year.
- The company repurchased more than 9 million shares for approximately $1 billion.
公司提供以調整後（非 GAAP）數據為基準的指引，因為無法預測或提供對照，以反映未來退休金以市值計價調整或是其他意外事件帶來的影響（可能包含在已呈報的 GAAP 結果中，且可能相當重要）。
“UPS managed through several challenges in 2019, including declines in industrial production,” said Brian Newman, UPS’s chief financial officer. “We were able to leverage the capital investments we have made to grow profits and expand margins, and we are fast-tracking our initiatives in 2020 to better position UPS to capitalize on structural changes in the market and growth opportunities.”
- Adjusted, diluted earnings per share are expected to be in a range of $7.76 to $8.06, which includes forecasted weakness on the industrial side of the U.S. and global economies as well as spending on SMB initiatives that will significantly increase UPS competitiveness and will be EPS accretive in 2021.
- The 2020 effective tax rate is expected to be between 22.5 and 23.5 percent.
- Capital expenditures are planned to be around $6.7 billion, primarily to support global facility and automation expansions.
- Cash from operations is expected to be around $10 billion and free cash flow is anticipated to be between $4.3 and $4.7 billion.
- Transformation charges are excluded from guidance.
UPS CEO David Abney and CFO Brian Newman will discuss fourth-quarter results with investors and analysts during a conference call at 8:30 a.m. ET, 2020 年 1 月 30 日. 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 Webcast.”其他財務資訊包括公佈在「財務」下的 www.investors.ups.com 中並做為附件提交給美國證券交易委員會（SEC）的目前的 8-K 表格報告的詳細財務時間表。
UPS (NYSE: UPS) 為全球物流領導企業，提供廣泛的解決方案，業務範圍涵括國際快遞及海空運貨物運輸，透過國際貿易便利化、先進科技的佈署，藉此更有效率的管理全球商務。UPS 總部設在美國亞特蘭大市，服務範圍遍及全球 220 多國家和地區。UPS 獲《新聞週刊》雜誌選為「運輸貨運服務」服務類別 America’s Best Customer Service 公司；《富比士》雜誌選為 Most Valuable Brand in Transportation；和 JUST 100 清單社會責任類別最高排名，以及受到道瓊永續發展世界指數、哈里斯民意調查聲譽商數（RQ®）等其他聲譽卓著的排名和獎項的肯定。公司網站位於 ups.com 或 pressroom.ups.com ，而其企業部落格位於 ups.com/longitudes 公司的永續發展電子報 UPS Horizons，位於 ups.com/sustainabilitynewsletter。 如欲獲取更多 UPS 消息，請在 Twitter 上追蹤 @UPS_News。若要使用 UPS 寄件，請造訪 ups.com/ship。
Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company's strategic direction, prospects and future results, involve certain risks and uncertainties.
Certain factors may cause actual results to differ materially from those contemplated by the forward-looking statements, including changes in economic and other conditions in the markets in which we operate, governmental regulations (including tax laws and regulations), our competitive environment, the facts or assumptions underlying our health and pension benefit funding obligations, the results of negotiation and ratification of labor contracts, the impact of any strikes, work stoppages or slowdowns, changes in aviation and motor fuel prices, cyclical and seasonal fluctuations in our operating results, and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated herein by reference.
GAAP 與非 GAAP 財務指標調節
We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP financial measures, including, as applicable, "as adjusted" operating profit, operating margin, other income (expense), income (loss) before income taxes, income tax expense, net income and earnings per share. 此外，我們還會定期揭露自由現金流量、不含自提退休金的自由現金流量，以及含融資租賃債務本金之償還的資本支出。依據 GAAP 認定的同等指標也稱為「公告」或「調整前」。
We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Examples of items for which we may make adjustments include but are not limited to: amounts related to mark-to-market gains or losses (non-cash); recognition of contingencies; gains or losses associated with mergers, acquisitions, divestitures and other structural changes; charges related to restructuring programs such as the implementation of our Transformation strategy; asset impairments (non-cash); amounts related to changes in tax regulations or positions; amounts related to changes in foreign currency exchange rates and the impact of any hedging activities; other pension and postretirement related items; and debt modifications.
我們認為，這些非 GAAP 指標可提供額外有意義的資訊，協助財報使用者瞭解我們的財務結果和現金流，並評估我們持續的表現，因為這些指標排除了可能不具我們潛在業務的指標，或是與其無關的項目，而且也可作為分析潛在業務趨勢的實用基準。Management uses these non-GAAP financial measures in making financial, operating and planning decisions. We also use certain of these measures for the determination of incentive compensation awards.
非 GAAP 財務指標應該作為我們依據 GAAP 備製的公告結果的補充物，而非替代物。非 GAAP 財務資訊不代表綜合會計基礎。因此，我們的非 GAAP 財務資訊不能與其他公司公告的類似標題指標相類比。
We supplement the reporting of our revenue, revenue per piece and operating profit with non-GAAP measures that exclude the period-over-period impact of foreign currency exchange rate changes and hedging activities. We believe currency-neutral revenue, revenue per piece and operating profit information allows users of our financial statements to understand growth trends in our products and results. We evaluate the performance of our International Package and Supply Chain and Freight segments on this currency-neutral basis.
We supplement the presentation of our operating profit, operating margin, pre-tax income, net income and earnings per share with similar non-GAAP measures that exclude the impact of costs related to certain of our legal contingencies and expenses. We believe this adjusted information provides a useful comparison of year-to-year financial performance without considering the impact of these contingencies and expenses. 我們會以這項調整後的基礎來評估我們的績效。
We supplement the presentation of our operating profit, operating margin, pre-tax income, net income and earnings per share with similar non-GAAP measures that exclude the impact of costs related to restructuring programs, including Transformation strategy costs. We believe this adjusted information provides a useful comparison of year-to-year financial performance without considering the short-term impact of restructuring costs. 我們會以這項調整後的基礎來評估我們的績效。
We recognize changes in the fair value of plan assets and net actuarial gains and losses in excess of a 10% corridor for company-sponsored pension and post-retirement obligations immediately as part of net periodic benefit cost other than service cost. We supplement the presentation of our pre-tax income, net income and earnings per share with similar non-GAAP measures that exclude the impact of the portion of net periodic benefit cost other than service cost represented by the gains and losses recognized in excess of the 10% corridor and the related income tax effects. We believe excluding these mark-to-market impacts from our adjusted results provides important supplemental information to remove the volatility caused by short term changes in market interest rates, equity prices, and similar factors.
This adjusted net periodic benefit cost ($754 million in 2019 and $615 million in 2018) is comparable to the accounting for our defined benefit plans in our quarterly reporting under U.S. GAAP, utilizing the expected return on plan assets (7.68% in 2019 and 2018) and the discount rate used to determine net periodic benefit cost (4.45% in 2019 and 3.81% in 2018). The non-adjusted net periodic benefit cost reflects the actual return on plan assets (17.57% in 2019 and -2.38% in 2018) and the discount rate used to measure the projected benefit obligation at the December 31 measurement date (3.55% in 2019 and 4.45% in 2018).
這些以市值計價退休金及退休後調節的遞延所得稅影響是將調節率乘以各適用稅務管轄區 (包括美國聯邦政府管轄區及美國各州及非美國管轄區) 的法定稅率計算而成。The blended average of the applicable statutory tax rates in 2019 and 2018 was 23.9% and 24.0%, respectively.
We supplement the reporting of cash flows from operating activities with free cash flow, free cash flow excluding discretionary pension contributions and free cash flow plus principal repayments of capital lease obligations, non-GAAP liquidity measures. We believe these free cash flow measures are important indicators of how much cash is generated by regular business operations and we use them as a measure of incremental cash available to invest in our business, meet our debt obligations and return cash to shareowners. Additionally, we believe that adjusting capital expenditures for principal repayments of capital lease obligations more appropriately reflects the overall cash that we have invested in capital assets.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. 排除自提退休金的自由現金流量，再加回在此期間提撥的任何自提退休金。