UPS 2Q Earnings Per Share Up 7.5 Percent Press Release U.S. Domestic Profit Climbs 12%; Economic Uncertainty Dampens Expectations UPS (NYSE: UPS) today announced second quarter 2012 diluted earnings per share of $1.15, a 7.5% improvement over the 2011 adjusted results. U.S. Domestic operating profit expanded $122 million or 12% over the prior-year period. On a reported basis, diluted earnings per share increased 5.5% and U.S. Domestic operating profit rose 14%. "Increasing uncertainty in the United States, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion," said Scott Davis, UPS chairman and CEO. "Throughout its history, UPS has maintained its strength in all economic cycles and we are making the adjustments necessary to respond to today's challenging conditions." Adjusted Consolidated Results 2Q 2012 2Q 2011 2Q 2011 Revenue $13.35 B $13.19 B Operating profit $1.79 B $1.75 B $1.71 B Operating margin 13.4 % 13.2 % 13.0 % Average volume per day 15.4 M 14.9 M Diluted earnings per share $1.15 $1.09 $1.07 UPS, the Official Logistics and Express Delivery Supporter of the 2012 London Olympic and Paralympic Games, has been busy preparing for the world's largest peacetime logistical undertaking. The Games provide UPS with a prime opportunity to showcase its expertise on a global stage while handling more than 30 million items for these events. During the quarter, UPS made several announcements regarding its proposal to acquire TNT Express. Plans for financing the purchase were disclosed in May and the formal Offer Memorandum was filed in June. Earlier this month, the company announced it was moving to a Phase II review as there are certain areas that the European Commission requires more time to analyze. UPS expects to close on the transaction during the fourth quarter. The complementary strengths of both companies will create a customer-focused platform delivering unparalleled access to the world. Cash Position For the six months ending June 30, UPS generated $3 billion in free cash flow, an increase of more than $600 million over the same period last year. Capital expenditures were $949 million. UPS repurchased 11.3 million shares for approximately $870 million and paid dividends totaling $1.1 billion, a 9.6% increase per share over the prior year. UPS ended the quarter with $7.3 billion in cash and marketable securities as it prepares to complete the acquisition of TNT Express. Adjusted U.S. Domestic Package 2Q 2012 2Q 2011 2Q 2011 Revenue $8.06 B $7.74 B Operating profit $1,134 M $997 M $1,012 M Operating margin 14.1 % 12.9 % 13.1 % Average volume per day 13.1 M 12.6 M U.S. Domestic revenue increased 4.1% over the prior-year period, driven by a 3.5% gain in package volume. Operating profit jumped more than 12% over 2011 adjusted results. Operating margin expanded 100 basis points to 14.1%, aided by volume growth, improved efficiency, higher base rates and a benefit from the timing of the fuel surcharge. On a reported basis, operating profit improved 14% and operating margin climbed 120 basis points over the prior-year period. Volume grew across all products as ground rose 3%, UPS Next Day Air increased 5% and deferred air climbed 8.6%. The majority of the improvement was driven by large e-commerce customers shipping low-weight residential packages. Average revenue per package increased 0.6%, as higher base rates were mostly offset by changes in customer and product mix. International Package 2Q 2012 2Q 2011 Revenue $3.01 B $3.14 B Operating profit $454 M $505 M Operating margin 15.1 % 16.1 % Average volume per day 2.3 M 2.3 M Revenue was $3 billion as the segment remains under pressure due to weaker global economies and reductions in exports from Asia. Currency fluctuations also had a negative impact. In this challenging environment, operating profit was $454 million. The operating margin of 15.1% remains the best in the industry. Export volume increased 0.8% over the same quarter last year. European growth was mostly offset by double-digit declines in exports from Asia to the U.S. and Europe. Non-U.S. Domestic volume, down 3.2%, reflected weaker economic conditions and continued yield improvement initiatives. Average revenue per piece was down 2.4%, although on a currency-neutral basis it was up 2.1%. Adjusted Supply Chain and Freight 2Q 2012 2Q 2011 2Q 2011 Revenue $2.28 B $2.32 B Operating profit $202 M $243 M $195 M Operating margin 8.9 % 10.5 % 8.4 % All business units contributed to the strong operating profit of $202 million in the Supply Chain and Freight segment. Operating margin achieved a new high of 8.9%. Total revenue declined 1.6% to $2.28 billion due to slowing International Air Freight demand and lower pricing. Forwarding continues to experience pressure on pricing, especially out of Asia, as excess capacity in the marketplace continues. Operating profit was strong due to effective revenue management and cost controls. The Distribution business experienced revenue growth driven by healthcare and e-commerce customers. The continued investment in technology and infrastructure to support the company's healthcare initiative was a slight drag on operating profit. At UPS Freight, revenue was flat as lower tonnage was offset by higher yields. The business unit did experience operating profit improvement and margin expansion. Outlook "The company's performance was mixed during the second quarter," said Kurt Kuehn, UPS's chief financial officer. "The results in the U.S. Domestic and Supply Chain and Freight segments were partially offset by the weakness in International. "As we look toward the second half of the year, customers are more concerned as greater uncertainty exists. Additionally, economic growth expectations have come down," Kuehn continued. "Consequently, we are reducing our guidance for 2012 diluted earnings per share to a range of $4.50 to $4.70, an increase of 3%-to-8% over 2011 adjusted results." About UPS UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including the transportation of packages and freight; the facilitation of international trade, and the deployment of advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the Web at UPS.com and its corporate blog can be found at blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS. UPS Delivers Record 4Q Results Press Release Company Achieves New High in Full Year EPS; U.S. Domestic Segment Leads the Way UPS (NYSE: UPS) today announced fourth quarter 2011 adjusted diluted earnings per share of $1.28, a 21% improvement over the prior-year period. Total revenue increased 6% to $14.2 billion and adjusted operating profit climbed 17% to more than $2 billion. Last Friday, the company announced a change in pension accounting to a mark-to-market methodology. Adopted in the fourth quarter of 2011 and applied retrospectively, this new method resulted in after-tax charges in 2011 and 2010 of $527 million and $75 million, respectively. Also, in the prior-year period, UPS recorded a net after-tax gain of $32 million from the sale of certain non-core business units in the Supply Chain and Freight segment. On a reported basis, fourth quarter 2011 diluted earnings per share were $0.74, a decline of 28% from the same quarter last year. For the full year 2011, UPS achieved a new high in adjusted diluted earnings per share at $4.35. On a reported basis, diluted earnings per share were $3.84. "UPS delivered record fourth quarter results in volume, revenue and profitability," said Scott Davis, UPS chairman and CEO. "In short, the quarter was a testament to the power of UPS's global model and the company's ability to operate efficiently in evolving markets." Adjusted Adjusted Consolidated Results 4Q 2011 4Q 2011 4Q 2010 4Q 2010 Revenue $14.17 B $13.42 B Operating profit $1.20 B $2.02 B $1.67 B $1.73 B Operating margin 8.4 % 14.3 % 12.5 % 12.9 % Average volume per day 18.3 M 17.7 M Diluted earnings per share $0.74 $1.28 $1.02 $1.06 During the quarter, UPS delivered 1.13 billion packages, an increase of 3.6% over the prior-year period. Adjusted operating margin expanded 140 basis points to 14.3%. On a reported basis, operating margin was 8.4%. The impact of the change in pension accounting to a mark-to-market methodology improved fourth quarter 2011 adjusted results by $0.03 and reduced fourth quarter adjusted 2010 results by $0.02. During the holiday period, global daily volume exceeded expectations by surpassing 25 million packages on five different days, including two days exceeding 27 million. UPS delivered 480 million packages during the peak shipping season, driven by e-commerce. Cash Position For the year ending Dec. 31, UPS generated more than $5 billion in free cash flow after capital expenditures of $2 billion and pension contributions of $1.4 billion. UPS repurchased 38.7 million shares for approximately $2.7 billion and paid dividends totaling $2.0 billion, up 10.6% per share. Adjusted Adjusted U.S. Domestic Package 4Q 2011 4Q 2011 4Q 2010 4Q 2010 Revenue $8.67 B $8.08 B Operating profit $0.84 B $1.32 B $0.99 B $1.02 B Operating margin 9.7 % 15.2 % 12.2 % 12.6 % Average volume per day 15.69 M 15.12 M Revenue climbed 7.3% and adjusted operating profit improved 30% over the 2010 fourth quarter results. Operating margin expanded 260 basis points to 15.2% due to a volume surge during peak season of more than 7% and network efficiencies. On a reported basis, operating profit declined to $.84 billion and operating margin was 9.7% as a result of the mark-to-market adjustment for pension plans. For the quarter, average daily volume was up 3.8% fueled by robust internet shopping activity. Ground products grew 3.5% and Deferred by 12.3%, while UPS Next Day Air declined slightly. Revenue per piece increased 3.4% with higher base rates and fuel surcharges, offset by lower average package weight and changes in customer and product mix. UPS My Choice, the company's new consumer-based delivery solution, experienced strong acceptance during the quarter. Enrollment for this industry- first service offering exceeded expectations and is approaching 750,000 subscribers. Adjusted Adjusted International Package 4Q 2011 4Q 2011 4Q 2010 4Q 2010 Revenue $3.15 B $3.05 B Operating profit $334 M $505 M $487 M $529 M Operating margin 10.6 % 16.0 % 16.0 % 17.4 % Average volume per day 2.60 M 2.54 M International revenue was $3.15 billion, up 3.5%. Export volume, for the quarter, improved 4.5%, surpassing 1 million pieces on an average daily basis for the first time in UPS history. This was driven by European exports and strong intra-regional growth in Asia. Revenue per piece increased 2%, on a currency-neutral basis the gain was 3.9%. Adjusted operating margin in the quarter was once again industry leading at 16.0%, down 140 basis points compared to the same period last year. The weakness on the Asia to U.S. trade lane and currency fluctuations were the primary drivers of the margin decline. On a reported basis, operating profit was $334 million with an operating margin of 10.6% as a result of the mark-to-market adjustment for pension plans. Early in the quarter, UPS introduced two new return services to 30 countries across Europe. UPS Returns Exchange and UPS Returns Pack and Collect products offer unique reverse logistics solutions to European on-line retailers. Adjusted Adjusted Supply Chain and Freight 4Q 2011 4Q 2011 4Q 2010 4Q 2010 Revenue $2.34 B $2.29 B Operating profit $22 M $199 M $199 M $180 M Operating margin 0.9 % 8.5 % 8.7 % 7.8 % Compared to the prior-year period, adjusted operating profit for the fourth quarter grew 11% to $199 million on revenue growth of 2.1%. The adjusted operating margin for the segment increased 70 basis points to 8.5%. On a reported basis, operating profit declined to $22 million and operating margin was 0.9% primarily as a result of the mark-to-market adjustment for pension plans. UPS Freight led the segment with revenue growth of 9.0% on slightly lower daily shipments. Strong gains in LTL revenue per hundredweight, up 8.9% and productivity improvements contributed to operating margin expansion during the quarter. Distribution experienced margin expansion and increased operating profitability as the business unit continued executing on its global strategy. During the quarter, UPS acquired Pieffe Group, an Italian pharmaceutical logistics company. This acquisition further supports UPS's global healthcare strategy. Outlook "UPS achieved record earnings per share in a volatile global operating environment where trends varied by region," said Kurt Kuehn, UPS's chief financial officer. "This was made possible by our balanced world-wide presence, broad portfolio of solutions and the best people in the business. "Looking to 2012, our expectations are for mixed economic growth around the world, with modest improvement in the U.S. However, UPS projects another strong year of earnings," he continued. "We expect diluted earnings per share to be within a range of $4.75 to $5.00, an increase of 9% to 15% over adjusted 2011 results. "Cash flow will remain strong, providing a platform for significant distributions to shareowners," Kuehn added. "In line with this, UPS anticipates $2.7 billion in share repurchases for the year." About UPS UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including the transportation of packages and freight; the facilitation of international trade, and the deployment of advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the Web at UPS.com and its corporate blog can be found at blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS UPS Earnings Per Share Rise 14 Percent on 8 Percent Revenue Growth in 3Q Press Release U.S. Domestic and Supply Chain & Freight Lead the Way; Free Cash Flow Exceeds $3.7 Billion UPS (NYSE: UPS) today announced diluted earnings per share of $1.06 for the third quarter of 2011, a 14% improvement over the adjusted $0.93 for the prior-year period. Total revenue increased 8% to $13.2 billion. The results were driven by the U.S. Domestic and Supply Chain & Freight segments. U.S. Domestic operating margin improved to 13.1% compared to last year's adjusted results and Supply Chain and Freight operating profit increased more than 10%. Free cash flow for the first nine months of the year was strong, exceeding $3.7 billion. On a reported basis, diluted earnings per share increased 7.1% over the same quarter last year. In the prior-year period, the company recorded an after-tax benefit of $61 million from the sale of real estate. "UPS produced another solid quarter of earnings growth against the backdrop of a deceleration in exports from Asia and a challenging global economic environment," said Scott Davis, UPS chairman and CEO. "The resilience of our global model was evident during the quarter and we remain confident in our ability to perform in both good and bad economies." Adjusted Consolidated Results 3Q 2011 3Q 2010 3Q 2010 Revenue $13.17 B $12.19 B Operating profit $1.62 B $1.62 B $1.51 B Operating margin 12.3 % 13.3 % 12.4 % Average volume per day 15.1 M 15.0 M Diluted earnings per share $1.06 $0.99 $0.93 During the quarter, UPS delivered 965 million packages, an increase of 0.7% over the prior-year period. In July, UPS released its 2010 Sustainability Report, highlighting successful fuel conservation efforts. The company reduced miles driven by 63.5 million, resulting in carbon emissions avoidance of 68,000 metric tonnes. During the quarter, UPS also was recognized with the highest score in the 2011 Carbon Disclosure Project's Global Leadership Index. Cash Position For the nine months ending Sept. 30, UPS generated more than $3.7 billion in free cash flow after making capital expenditures of $1.6 billion and pension contributions of $1.4 billion. The company accelerated its repurchase activity during the quarter, acquiring more than $1.1 billion in UPS stock. Year-to-date, UPS has repurchased 31.7 million shares for approximately $2.2 billion and paid dividends totaling $1.5 billion, up 10.6% per share. Adjusted U.S. Domestic Package 3Q 2011 3Q 2010 3Q 2010 Revenue $7.77 B $7.29 B Operating profit $1.02 B $1.02 B $0.91 B Operating margin 13.1 % 14.0 % 12.5 % Average volume per day 12.74 M 12.73 M Revenue increased 6.5% and operating profit improved more than 11% over the 2010 third quarter adjusted results. Operating margin expanded 60 basis points to 13.1% due to higher yields, favorable product mix changes and network efficiencies. Total domestic volume growth was flat as a result of the slow U.S. economy; however, UPS Next Day Air volume rose 1.3%. On a reported basis compared to the third quarter of last year, operating profit decreased slightly and operating margin contracted by 90 basis points. At the end of the quarter and just in time for the holidays, UPS unveiled a ground-breaking solution for residential deliveries. UPS My Choice enables U.S. consumers to take advantage of the unique delivery options that only UPS can offer. Since the product launch in early October, over 100,000 subscribers have enrolled. International Package 3Q 2011 3Q 2010 Revenue $3.06 B $2.68 B Operating profit $409 M $419 M Operating margin 13.4 % 15.7% Average volume per day 2.34 M 2.24 M Revenue for the segment improved more than 14%, driven by export volume growth of 6.5%. Revenue per piece climbed 9.4% with currency, higher fuel surcharges and base rate increases all contributing. Operating profit and margin for the segment declined due to excess capacity caused by a deceleration in package volume on the Asia-to-U.S. trade lane. They also were negatively impacted by product mix, higher fuel prices and currency fluctuations. Last month, the company announced a significant expansion of its European air hub in Cologne, Germany. The $200 million investment will utilize the latest UPS technology to improve efficiency and support continued European growth. Supply Chain and Freight 3Q 2011 3Q 2010 Revenue $2.34 B $2.23 B Operating profit $195 M $177 M Operating margin 8.3 % 8.0 % Operating profit for the third quarter climbed more than 10% to $195 million on revenue growth of 5.3% compared to the prior-year period. The operating margin for the segment increased 30 basis points to 8.3%. UPS Freight drove segment results as operating profit improved and operating margin expanded. On a year-over-year basis, revenue for the quarter jumped approximately 15% on a slight decline in daily shipments. The business also experienced increases in LTL revenue per hundredweight and weight per shipment. Forwarding revenue experienced downward pressure compared to the same quarter last year due to excess capacity in the air freight industry. Nonetheless, Forwarding expanded operating margin and slightly improved operating profit. In September, UPS introduced PharmaPort 360, the latest innovation in cold-chain shipping solutions designed specifically for the healthcare industry. This unique temperature-controlled container offers unparalleled shipment monitoring and product protection for pharmaceuticals, vaccines and biologics. Outlook "We are reiterating our 2011 guidance for UPS adjusted diluted earnings per share to a range of $4.15-to-$4.40," said Kurt Kuehn, UPS's chief financial officer. "UPS continues to deliver strong financial results in today's global economic environment as customers benefit from the logistics solutions that only UPS offers." 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 directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, governmental regulations, our competitive environment, strikes, work stoppages and 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. About UPS UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including the transportation of packages and freight; the facilitation of international trade, and the deployment of advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the Web at UPS.com and its corporate blog can be found at blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS. UPS 4th Quarter Earnings Surge 44 Percent, 2011 EPS Expected to Set All-Time High Press Release Company Projects 2011 EPS to Jump 16-to-22%; International & Supply Chain 2010 Profits Set Records UPS (NYSE: UPS) today announced adjusted diluted earnings per share of $1.08 for the fourth quarter of 2010, a 44% improvement over the prior-year period. Global revenue grew 8.4%, generating $1.8 billion in adjusted operating profit, a 40% increase. On a reported basis, diluted earnings per share totaled $1.11, a 48% increase over the $0.75 reported for the same period last year. During the quarter, UPS recorded a net after-tax gain of $32 million related to the sale of certain non-core business units. For the full year 2010, the company delivered 3.9 billion packages, an average of 15.6 million per day. Revenue increased 9.4% to $49.5 billion. Adjusted operating profit soared 47% to $5.8 billion with the International and Supply Chain & Freight segments achieving record-setting levels, generating $1.9 billion and $577 million, respectively. On a reported basis, operating profit for the year was $5.9 billion, up 55%. Adjusted diluted earnings per share were $3.56, up 54%, and $3.48 on a reported basis, up 63%. "UPS again demonstrated exceptional earnings growth by leveraging the strength of its network to provide solutions for customers," said Scott Davis, UPS chairman and CEO. "I'm encouraged by the opportunities we see in 2011 as UPS continues to expand into emerging markets while demonstrating the power of the logistics capabilities we've built worldwide." Based on expectations for 2011, UPS is providing annual guidance for diluted earnings per share to a range of $4.12-to-$4.35, an increase of 16-to-22% over 2010 adjusted results. This would exceed the peak earnings level recorded in 2007. Adjusted Consolidated Results 4Q 2010 4Q 2010 4Q 2009 Revenue $13.42 B $12.38 B Operating profit $1.81 B $1.76 B $1.26 B Operating margin 13.5 % 13.1 % 10.2 % Average volume per day 17.7 M 17.3 M Diluted earnings per share $1.11 $1.08 $0.75 For the three months ended Dec. 31, 2010, UPS delivered 1.1 billion packages, a 3.9% increase. Adjusted operating margin expanded 290 basis points to 13.1%. On a reported basis, operating margin was 13.5%. During the holiday shipping season, global volume exceeded 24 million packages on five days, including one day that exceeded 25 million. UPS delivered more than 440 million packages during the holiday shipping season, powered by strong demand from on-line retailers. Cash Position For the year ending Dec. 31, UPS generated $3.1 billion in free cash flow even after $2 billion in accelerated contributions to defined benefit pension plans in the fourth quarter. The company also: Invested $1.4 billion in capital expenditures. Paid dividends totaling $1.8 billion. Repurchased 12.4 million shares at a cost of approximately $800 million. U.S. Domestic Package 4Q 2010 4Q 2009 Revenue $8.08 B $7.55 B Operating profit $1.04 B $764 M Operating margin 12.9 % 10.1 % Average volume per day 15.12 M 14.86 M Operating profit increased 37% to $1.04 billion on revenue growth of 7%. The margin expansion of 280 basis points was driven by higher yields, operational efficiencies and volume growth. Revenue per piece improved 3.5%, primarily through increases in base pricing and higher fuel surcharges. Average daily package volume was up 1.7% during the quarter due to growth in UPS Next Day Air and Ground. The company noted a strong response by U.S. customers to its new UPS Smart Pickup service, designed for those who want the convenience of a scheduled pickup but may not ship a package every day. This high-tech service, the latest in a series of environmentally responsible offerings, alerts UPS drivers when a pickup needs to be made. International Package 4Q 2010 4Q 2009 Revenue $3.05 B $2.79 B Operating profit $537 M $467 M Operating margin 17.6 % 16.7 % Average volume per day 2.54 M 2.42 M The operating profit for the segment increased 15% to $537 million on 9% growth in revenue. The operating margin expanded to 17.6% as a result of volume growth, yield improvement and excellent cost management. Export average daily volume increased 8.7%. The company experienced strong growth from key export countries, with China up more than 30%. European exports continued to show solid performance, led by double-digit gains in Germany. For 2010, International volume increased 13.6% to a record 2.3 million packages per day. Throughout the year, UPS significantly increased its global network capacity to take advantage of opportunities in the marketplace. For example, airlift out of Asia was increased by 40%. During the quarter, UPS deployed technology aimed at the rapidly growing mobile user market. The popular UPS Mobile Apps and mobile Web site were released to customers in Germany, Canada, the United Kingdom, Italy and France. Adjusted Supply Chain and Freight 4Q 2010 4Q 2010 4Q 2009 Revenue $2.29 B $2.03 B Operating profit $234 M $176 M $28 M Operating margin 10.2 % 7.7 % 1.4 % Adjusted operating profit improved more than six fold to $176 million on revenue growth of 13%. The adjusted operating margin for the segment increased 630 basis points to 7.7%, with all business units contributing. UPS Freight outpaced the market with revenue up 23% due to double-digit growth in shipments per day, an increase in gross weight hauled and significant yield improvement. Forwarding and Logistics revenue increased 10.1% to $1.6 billion, driven primarily by revenue management initiatives in the Forwarding business unit. As the year ended, UPS announced a significant expansion of its global healthcare distribution facility network in the U.S., Asia, Europe and Canada to accommodate continued rapid growth in its healthcare business. These new facilities are specially designed to meet the needs of pharmaceutical, biotech and medical device companies. Outlook "The fourth quarter results punctuate a year in which UPSers superbly executed our strategy," said Kurt Kuehn, UPS's chief financial officer. "As we close the book on 2010 and look towards 2011, UPS is uniquely positioned for growth in the future. "Over the past two years, UPS took the necessary steps to weather the economic storm and emerged stronger," Kuehn continued. "As a result, we expect to exceed previous peak earnings level with 2011 diluted earnings per share within a range of $4.12 to $4.35, an increase of 16% to 22% over adjusted 2010 results. "Cash flow will continue to be strong, creating a foundation for increasing returns to shareholders," Kuehn added. "We plan to significantly ramp up share repurchases, to approximately $2 billion in 2011." UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including the transportation of packages and freight; the facilitation of international trade, and the deployment of advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the Web at UPS.com and its corporate blog can be found at blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS. UPS 2Q Earnings Soar 71 Percent on 13 Percent Revenue Growth Press Release Full-Year Guidance Raised; 2010 EPS Expected to Climb 45-50% UPS (NYSE:UPS) today announced diluted earnings per share of $0.84 for the second quarter of 2010, a 71% jump over the adjusted earnings of the prior-year period. Global revenue increased 13%, generating a 57% increase in operating profit to $1.4 billion. On a reported basis, diluted earnings per share increased 91% over the $0.44 in the second quarter of 2009. "UPS fired on all cylinders in the second quarter even in the face of a mixed global economic environment," said Scott Davis, UPS's chairman and CEO. "Thanks to superb execution, our U.S. domestic reorganization is producing better than expected results. Substantial growth in our international segment continues to outpace the market. It's clear the strategic direction we've set for the company is proving successful." Based on expectations of continued momentum in every segment, UPS has increased its guidance for 2010 adjusted earnings to a range of $3.35 to $3.45 per diluted share, a 45%-to-50% increase over last year. Adjusted Consolidated Results 2Q 2010 2Q 2009 2Q 2009 Revenue $12.2 B $10.8 B Operating profit $1.4 B $895 M Operating margin 11.5 % 8.3 % Average volume per day 14.8 M 14.3 M Diluted earnings per share $0.84 $0.44 $0.49 For the three months ended June 30, 2010, operating margin expanded 320 basis points to 11.5% and consolidated volume totaled 948 million packages, a 4% increase. Revenue per piece improved 7%, reflecting higher base rates, fuel surcharge increases and heavier average shipment weight. In the prior-year quarter, UPS took a $48 million after-tax charge for the remeasurement of certain foreign currency obligations that did not qualify for hedge accounting treatment. That adjustment reduced second quarter 2009 diluted earnings per share by $0.05. As the quarter ended, President Obama named UPS Chairman and CEO Scott Davis to the President's Export Council. As an industry leader, Davis will advise the administration on policies and programs to improve U.S. exports. Cash Position For the six months ending June 30, UPS generated more than $2.5 billion in free cash flow. The company also: Paid dividends totaling $910 million. Invested $690 million in capital expenditures. Repurchased approximately 7 million shares at a cost of $425 million. Ended the period with more than $4 billion in cash and marketable securities. U.S. Domestic Package 2Q 2010 2Q 2009 Revenue $7.27 B $6.79 B Operating profit $748 M $476 M Operating margin 10.3 % 7.0 % Average volume per day 12.62 M 12.47 M Operating profit climbed 57% to $748 million. Revenue increased 7% with margin expansion of 330 basis points. This operating leverage was driven by improved yields and additional efficiencies throughout the UPS integrated network. Average daily package volume rose more than 1% during the quarter, driven by a 2% growth in ground volume. Revenue per piece improved 6%, primarily through higher fuel surcharges and increases in base pricing. Yields on air products climbed more than 11%. International Package 2Q 2010 2Q 2009 Revenue $2.77 B $2.25 B Operating profit $521 M $293 M Operating margin 18.8 % 13.0 % Average volume per day 2.18 M 1.82 M The operating profit for the segment increased 78% to $521 million on a 23% jump in revenue. Operating margin improved 580 basis points to 18.8%. Export volume increased 15%, outpacing the market due to strong growth in all regions with Asia leading the way, up more than 40%. Non-U.S. domestic volume increased 24%, driven by an acquisition in Turkey in the third quarter of last year as well as 13% organic growth, powered by strength in core European countries and Canada. During the quarter, UPS announced new alliances with its local service partners in Malaysia and Vietnam. These agreements will provide greater access to UPS's broad portfolio of services and superior global network for customers in these important emerging markets. Supply Chain and Freight 2Q 2010 2Q 2009 Revenue $2.16 B $1.79 B Operating profit $133 M $126 M Operating margin 6.1 % 7.0 % Each business unit in the segment improved profitability. Forwarding led the way with tonnage growth exceeding 30%. However, margin expansion was limited due to capacity constraints in the global air freight market. UPS Freight revenue grew 10% over last year, driven by improved yield and higher weight per shipment. As expected, UPS Freight returned to profitability in the second quarter. During the quarter, UPS hosted its fifth annual Healthcare Forum in Washington, D.C. Healthcare logistics experts gathered to discuss UPS solutions that create more efficient supply chains. In addition, trends were discussed on healthcare reform, regulatory issues and opportunities in emerging markets. Outlook "UPS's performance in the second quarter was driven by our ability to respond to customers' needs through our broad product portfolio and integrated global network," said Kurt Kuehn, UPS's chief financial officer. "We experienced strong revenue growth across the board, with substantial margin expansion in our U.S. and International segments. "Despite the anticipated slow pace of the U.S. recovery and a cautious outlook for Europe, we are confident in our ability to grow the business and improve profits," Kuehn added. "Therefore we are raising our full year 2010 guidance with expected adjusted earnings growth of 45%-to-50% per share." 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 directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, governmental regulations, our competitive environment, strikes, work stoppages and 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. UPS (NYSE:UPS) is the world's largest package delivery company and a global leader in supply chain and freight services. With more than a century of experience in transportation and logistics, UPS is a leading global trade expert equipped with a broad portfolio of solutions. Headquartered in Atlanta, Ga., UPS serves more than 215 countries and territories worldwide. The company can be found on the Web at ups.com and its corporate blog can be found at blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS. UPS International Profit Rebounds Press Release Updates 2012 EPS Guidance; Expects $4.55 to $4.65 Atlanta, October 23, 2012 - UPS (NYSE: UPS) today announced third quarter 2012 adjusted diluted earnings per share of $1.06. The International segment led the way with its highest third quarter in history generating $449 million in operating profit, up 7.7% over the prior-year period. UPS updated its full-year 2012 guidance for adjusted diluted earnings per share to a range of $4.55 to $4.65, reflecting greater confidence in fourth quarter execution. On a reported basis, third quarter 2012 earnings per share were $0.48. In August, the company announced a decision to restructure pension liabilities for certain employees. As a result, UPS recorded an after-tax, non-cash charge of $559 million during the quarter. "Our results were achieved in an environment of slowing global trade and changing market dynamics," said Scott Davis, UPS chairman and CEO. "This not only highlights the flexibility of our business model; it illustrates the breadth of the UPS product portfolio in meeting the needs of customers." Adjusted Consolidated Results 3Q 2012 3Q 2012 3Q 2011 Revenue $13.07 B $13.17 B Operating profit $0.77 B $1.66 B $1.67 B Operating margin 5.9 % 12.7 % 12.7 % Average volume per day 15.5 M 15.1 M Diluted earnings per share $0.48 $1.06 $1.09 During the quarter, UPS delivered 15.5 million packages per day, a 2.9% increase over the prior-year period. Cash Position For the nine months ending Sept. 30, UPS generated free cash flow in excess of $3.6 billion. The company repurchased 18.5 million shares for approximately $1.4 billion and paid dividends totaling $1.6 billion, a 9.6% increase per share over the prior year. Capitalizing on credit market conditions, during the quarter UPS issued $1.75 billion of debt. Proceeds will be used to pay notes that mature in January 2013. The company ended the period with $9.0 billion in cash and marketable securities. The primary uses of these funds will be the acquisition of TNT Express and debt repayment. Adjusted U.S. Domestic Package 3Q 2012 3Q 2012 3Q 2011 Revenue $7.86 B $7.77 B Operating profit $129 M $1,025 M $1,046 M Operating margin 1.6 % 13.0 % 13.5 % Average volume per day 13.2 M 12.7 M U.S. Domestic revenue increased $94 million over the prior-year period, driven by a 3.7% gain in daily package volume. Adjusted operating profit declined $21 million, impacted negatively by one less operating day and the timing of the fuel surcharge. On a reported basis, operating profit was $129 million as a result of the pension restructuring previously mentioned. Rapid e-commerce growth drove gains in daily volume, with Ground and Deferred up 3.0% and 9.3%, respectively. Next Day Air volume expanded 5.7% over the prior-year period, as retailers continued to utilize UPS Next Day Air Saver to differentiate their offerings. Base rate improvements were more than offset by lower fuel surcharges, and changes in product and customer mix. Consequently, revenue per package declined 0.8% from the same quarter last year. International Package 3Q 2012 3Q 2011 Revenue $2.94 B $3.06 B Operating profit $449 M $417 M Operating margin 15.3 % 13.6 % Average volume per day 2.3 M 2.3 M The International segment produced operating profit of $449 million, its highest third quarter ever. Operating margin was up 170 basis points over the prior-year period to 15.3%. Export package growth, network changes and currency translation contributed to this improvement. Revenue declined 3.7%, as the impact from lower fuel surcharges and currency exceeded the benefit from the 1.2% growth in daily Export volume. For the first time in several quarters, Asia exhibited growth in Export package volume, benefitting from product launches and easier comparisons. Although the rate of growth in Europe has slowed, it remained positive. Supply Chain and Freight 3Q 2012 3Q 2011 Revenue $2.27 B $2.34 B Operating profit $188 M $203 M Operating margin 8.3 % 8.7 % Operating margin for the Supply Chain and Freight segment remained strong at 8.3%. Operating profit was down $15 million, as declines in Forwarding were partially offset by improvement in UPS Freight. The Freight Forwarding unit was pressured by overcapacity in the market, especially out of Asia. Revenue decreased as lower yields offset modest tonnage gains. Although the Distribution unit experienced strong revenue growth, investments in healthcare capabilities and infrastructure weighed on margin expansion. Recently, UPS opened three new healthcare distribution facilities in Sydney, Australia and in Shanghai and Hangzhou, China. UPS Freight revenue increased 3.6% as shipments per day were up slightly. LTL revenue per hundredweight and gross weight hauled improved over the prior year period, resulting in operating margin expansion. Outlook "UPS performance this quarter reflects the ability of our global network to adapt to soft macro conditions," said Kurt Kuehn, UPS chief financial officer. "While there is some uncertainty around the magnitude of the holiday shopping season, we are confident in UPS's ability to deliver," Kuehn continued. "As a result, we enhanced our guidance by narrowing the range, maintaining our previous midpoint. We anticipate 2012 adjusted diluted earnings per share to be within a range of $4.55 to $4.65, an increase of 5%-to-7% over 2011 adjusted results".