UPS 2012 Annual Report Download
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UPS 2012 ANNUAL REPORT
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to:
Sydney, Australia
2000
from:
Guadalajara,
Mexico
44150
from:
Louisville, USA
40215
to:
Halifax, Canada
B3H 0A2
Table of contents
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Page 1
to: Sydney, Australia 2000 UPS ANNUAL REPORT 2012 from: Guadalajara, Mexico 44150 to: Halifax, Canada B3H 0A2 from: Louisville, USA 40215 -
Page 2
... 7,924 2.5 MILLION MY CHOICE ® MEMBERS 101, 000 VEHICLES IN DELIVERY FLEET 32.1 MILLION DAILY ONLINE TRACKING REQUESTS RETAIL ACCESS POINTS 4. 1 BILLION KEY METRICS 2012 Return on assets (adj.) 1 2012 DELIVERY VOLUME 2011 12.6% 11.1% 55.1% 50.2% 24.2% 21.8% 2.8% 2010 10.7% 10.2% 44.0% 42... -
Page 3
...-specific customer solutions • Expanding our global network • Serving the needs of end consumers around the world In the pages that follow, you'll see examples of these strategies in action. The UPS vision delivered another year of industry-leading adjusted operating margins and adjusted return... -
Page 4
...9.6 percent in 2012, we have also either increased or maintained the dividend for more than four decades. Creating Opportunity as a Global Partner and Thought Leader In 2010, we embarked on a sales and marketing transformation to better align our go-to-market strategy with customer needs. Today, we... -
Page 5
... options, delivery dates and timely updates that are communicated clearly, as well as hassle-free returns. We also recognize that healthcare customers have serious concerns regarding increased regulatory compliance, legislative changes and product protection. In addition, high-tech executives have... -
Page 6
... with missed deliveries. In the first year alone, we reduced multiple delivery attempts on over 500,000 packages due to operational efficiencies created by UPS My Choice, resulting in a significantly improved delivery experience for UPS My Choice members. U.S. Domestic Package International Package... -
Page 7
..., South Korea to meet customer needs in growing markets. 2012 REVENUE BY GEOGRAPHY 11.8 11.5 11.4 12.9 13.1 11.4 25% 8.2 7.7 75% 3.1 2.5 U.S. International 2008 2009 2010 2011 2012 GAAP Adjusted4 4 OPERATING MARGIN PERCENT See reconciliation of Non-GAAP financial measures on page A1... -
Page 8
... annual sustainability report in 2012, which received an A+ rating from the Global Reporting Initiative for its accuracy and transparency. In 2011, the most recent year for which we have data, our use of advanced route-planning technology reduced the miles UPS drove by 85 million-saving 8.4 million... -
Page 9
...trends, and our employees, customers, communities and shareholders will share in the rewards. On behalf of the nearly 400,000 employees who are passionate about running our integrated, highly efficient business, I thank you for your investment. Managing it wisely to ensure long-term superior returns... -
Page 10
...years of distinguished service, John Thompson is not standing for re-election to the Board of Directors in 2013. MANAGEMENT MANAGEMEN COMMITTEE David P. Abney Senior Vice President, Global Transportation and Chief Operating Officer David A. Barnes Senior Vice President and Chief Information Officer... -
Page 11
...ACT OF 1934 For the fiscal year ended December 31, 2012 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission file number 001-15451 to _____ _____ United Parcel Service, Inc. (Exact Name of Registrant as Specified in... -
Page 12
... Operating Facilities Fleet Legal Proceedings Mine Safety Disclosures PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Shareowner Return Performance Graph Selected Financial Data Management's Discussion and Analysis of Financial... -
Page 13
... United Parcel Service, Inc. ("UPS") was founded in 1907 as a private messenger and delivery service in Seattle, Washington. Today, UPS is the world's largest package delivery company, a leader in the U.S. less-than-truckload industry and the premier provider of global supply chain management... -
Page 14
... for our customers, while supporting UPS's ongoing efforts to increase operational efficiencies. Our service portfolio and investments are rewarded with among the best returns on invested capital and operating margins in the industry. We have a long history of sound financial management. Our balance... -
Page 15
... shippers to collect accounts receivable more quickly), allow for inbound volume planning, manage third-party shipping costs, automatically notify customers of incoming shipments, and of course, track shipments and let the customer react if a specific shipment status changes. • Flex Global View... -
Page 16
...day. Compared to companies with single service network designs, our integrated network uniquely provides operational and capital efficiencies while being easier on the environment. Upon request, we offer same-day pickup of air and ground packages. Based on their needs, customers can schedule pickups... -
Page 17
...in Europe, Asia, Canada and Latin America. UPS offers a wide selection of guaranteed, day and time-definite international shipping services. • We offer three guaranteed time-definite express options (Express Plus, Express and Express Saver) to more locations than any other carrier. • In 2013, we... -
Page 18
... and maximize service. • UPS Mail Innovations: UPS Mail Innovations offers an efficient, cost-effective method for sending lightweight parcels and flat mail to global addresses from the U.S. We pick up customers' domestic and international mail, sort, post, manifest and then expedite the secured... -
Page 19
... reliable LTL service backed by a day-definite, on-time guarantee at no additional cost. Additionally, many user-friendly small package technology offerings are available for freight. Applications such as UPS WorldShip, Billing Center, and Quantum View allow customers to process and track LTL... -
Page 20
... ground mechanics who are not employed under agreements with the Teamsters are employed under collective bargaining agreements with the International Association of Machinists and Aerospace Workers ("IAM"). Our agreement with the IAM runs through July 31, 2014. The experience of our management team... -
Page 21
.... We are a global leader in developing technology that helps our customers optimize their shipping and logistics business processes to lower costs, improve service and increase efficiency. Technology powers virtually every service we offer and every operation we perform. Our technology offerings are... -
Page 22
... invest in employee development, technology, transportation equipment and facilities; to pursue strategic opportunities that facilitate our growth; to service our obligations; and to return value to our shareowners in the form of dividends and share repurchases. Government Regulation Air Operations... -
Page 23
.... Where You Can Find More Information UPS maintains a website at www.ups.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 are made... -
Page 24
... applies to all of our directors, officers and employees, including our principal executive officer and senior financial officers. It is available in the governance section of the investor relations website, located at www.investors.ups.com. In the event that we make changes in, or provide waivers... -
Page 25
... unions affiliated with the Teamsters and our airline pilots, airline mechanics, ground mechanics and certain other employees are employed under other collective bargaining agreements. Strikes, work stoppages and slowdowns by our employees could adversely affect our ability to meet our customers... -
Page 26
... activities and the like, or attempts to connect our company to these sorts of issues, either in the United States or other countries in which we operate, could negatively affect our overall reputation and acceptance of our services by customers. Damage to our reputation and loss of brand equity... -
Page 27
.... Continued increasing health care costs, volatility in investment returns and discount rates, as well as changes in laws, regulations and assumptions used to calculate retiree health and pension benefit expenses, may adversely affect our business, financial position, results of operations or... -
Page 28
... facility, which increased the sorting capacity to approximately 416,000 packages per hour. The expansion, which cost over $1 billion, involved the addition of two aircraft load / unload wings to the hub building, followed by the installation of high-speed conveyor and computer control systems... -
Page 29
...primary transit hub in Asia. The facility was built on a parcel of almost 1 million square feet, and has a sorting capacity of 18,000 packages per hour. Our primary information technology operations are consolidated in a 443,600 square foot owned facility, the Ramapo Ridge facility, which is located... -
Page 30
Vehicles We operate a global ground fleet of approximately 101,000 package cars, vans, tractors and motorcycles. Our ground support fleet consists of 32,000 pieces of equipment designed specifically to support our aircraft fleet, ranging from nonpowered container dollies and racks to powered ... -
Page 31
... one share of our class B common stock. The following is a summary of our class B common stock price activity and dividend information for 2012 and 2011. Our class B common stock is listed on the New York Stock Exchange under the symbol "UPS". High Low Close Dividends Declared 2012: First Quarter... -
Page 32
... dividends for each of the quarterly periods, assumes that $100 was invested on December 31, 2007 in the Standard & Poor's 500 Index, the Dow Jones Transportation Average, and our class B common stock. 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 United Parcel Service... -
Page 33
...this report. Years Ended December 31, 2012 2011 2010 2009 2008 Selected Income Statement Data Revenue: U.S. Domestic Package International Package Supply Chain & Freight Total revenue Operating expenses: Compensation and benefits Other Total operating expenses Operating profit (loss): U.S. Domestic... -
Page 34
..., 2012 2011 2010 Operating Expenses: Defined Benefit Plans Mark-to-Market Charge Multiemployer Pension Plan Withdrawal Charge Restructuring Charge Gains on Sales of Businesses Gains on Real Estate Transactions Income Tax Expense (Benefit) from the Items Above Charge for Change in Tax Filing Status... -
Page 35
... actual rate of return on plan assets exceeding the expected rate of return. These losses, which were recorded in compensation and benefits expense in our statements of consolidated income, impacted each of our three reporting segments for 2012, 2011 and 2010. Multiemployer Pension Plan Withdrawal... -
Page 36
... analyzing trends in our underlying businesses. U.S. Domestic Package Operations Year Ended December 31, 2012 2011 2010 % Change 2012 / 2011 2011 / 2010 Average Daily Package Volume (in thousands): Next Day Air Deferred Ground Total Avg. Daily Package Volume Average Revenue Per Piece: Next Day Air... -
Page 37
...-to-business air volume declined slightly. The increase in ground volume in 2012 was driven by our lightweight service offerings, including SurePost, which target low-cost, non-urgent residential deliveries. Volume for these lightweight products grew significantly, and accounted for approximately... -
Page 38
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Revenue per piece for our Next Day Air and deferred products decreased in 2012 compared with 2011, as declines in fuel surcharge rates and product mix changes more than ... -
Page 39
... and maintenance expenses and higher rates passed to us from outside transportation carriers, primarily railroads. Pickup and delivery costs increased $354 million in 2011 compared to 2010, primarily as a result of higher fuel prices and a 3.1% union contractual driver wage increase. Cost increases... -
Page 40
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS International Package Operations Year Ended December 31, 2012 2011 2010 % Change 2012 / 2011 2011 / 2010 Average Daily Package Volume (in thousands): Domestic Export ... -
Page 41
... year, largely due to base rate increases. On January 2, 2012, we increased the base rates 6.9% for international shipments originating in the United States (Worldwide Express, Worldwide Express Plus, UPS Worldwide Expedited and UPS International Standard service), while reducing the fuel surcharge... -
Page 42
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS On January 3, 2011, we increased the base rates 6.9% for international shipments originating in the United States (Worldwide Express, Worldwide Express Plus, UPS ... -
Page 43
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2011 compared to 2010 Adjusted operating profit increased slightly in 2011 compared with 2010, while the segment operating margin declined for the year due to several ... -
Page 44
... transportation carrier rates. The tonnage decrease was mainly the result of revenue management initiatives that improve the matching of customer pricing with market conditions, as well as the impact of the global economic slowdown. Freight revenue increased $355 million in 2011 compared with 2010... -
Page 45
... from the continued investment in technology and facilities for our global health care business. Adjusted operating profit for our freight unit increased $20 million in 2012 compared with 2011, as gains in productivity (including pick-up and delivery stops per hour, dock bills per hour and linehaul... -
Page 46
... this segment increased $27 million in 2011, primarily due to improved results at our UPS Capital unit. Operating Expenses Year Ended December 31, 2012 2011 2010 % Change 2012 / 2011 2011 / 2010 Operating Expenses (in millions): Compensation and Benefits Defined Benefit Plans Mark-to-Market Charge... -
Page 47
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Adjusted benefits expense increased $444 million in 2012 compared with 2011, primarily due to higher pension expense, increased health and welfare costs and changes in ... -
Page 48
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Depreciation and Amortization 2012 compared to 2011 The increase in depreciation and amortization expense was primarily due to higher depreciation expense on vehicles of... -
Page 49
... compared to 2010 The increase in investment income in 2011 compared with 2010 was caused by a combination of factors. During 2011, we realized $20 million in net gains on the sales of auction rate securities, preferred equity securities and an S&P 500 index fund, as well as a mark-to-market gain on... -
Page 50
...Ended December 31, 2012 2011 2010 % Change 2012 / 2011 2011 / 2010 Income Tax Expense Income Tax Impact of: Defined Benefit Plans Mark-to-Market Charge Multiemployer Pension Plan Withdrawal Charge Restructuring Charge Gain on Sales of Businesses Gain on Real Estate Transactions Change in Tax Filing... -
Page 51
...): 2012 2011 2010 Net income Non-cash operating activities(a) Pension and postretirement plan contributions (UPS-sponsored plans) Income tax receivables and payables Changes in working capital and other noncurrent assets and liabilities Other operating activities Net cash from operating activities... -
Page 52
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Investing Activities Our primary sources (uses) of cash for investing activities were as follows (amounts in millions): 2012 2011 2010 Net cash used in investing ... -
Page 53
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financing Activities Our primary sources (uses) of cash for financing activities are as follows (amounts in millions, except per share data): 2012 2011 2010 Net cash ... -
Page 54
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cash received from common stock issuances to employees increased primarily due to additional stock option exercises in 2012 and 2011. The cash outflows in other ... -
Page 55
... consolidated financial statements). The pension funding requirements were estimated under the provisions of the Pension Protection Act of 2006 and the Employee Retirement Income Security Act of 1974, using discount rates, asset returns and other assumptions appropriate for these plans. In July 2012... -
Page 56
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS As of December 31, 2012, we had outstanding letters of credit totaling approximately $1.369 billion issued in connection with our self-insurance reserves and other ... -
Page 57
... 45 freight forwarding companies and individuals are named in the proceeding, including UPS, UPS SCS Transportes (Brasil) S.A., and a former employee in Brazil. UPS will have an opportunity to respond to these allegations. In November 2012, we also received a request for information related to... -
Page 58
... Plans We contribute to a number of multiemployer defined benefit and health and welfare plans under terms of collective bargaining agreements that cover our union represented employees. Our current collective bargaining agreements set forth the annual contribution increases allotted to the plans... -
Page 59
... to determine the ground fuel surcharge. UPS Next Day Air, UPS 2nd Day Air, UPS 3 Day Select, and international air shipments originating in the United States (including Worldwide Express, Worldwide Express Plus, UPS Worldwide Expedited and UPS International Standard Service) increased an average... -
Page 60
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS • UPS Next Day Air Freight, UPS 2nd Day Air Freight, and UPS 3 Day Freight rates for shipments within and between the U.S., Canada, and Puerto Rico increased 4.9%. UPS... -
Page 61
... that are probable and estimable, excluding those related to income taxes and self-insurance which are discussed further below, were not material to our financial position or results of operations as of, and for the year ended, December 31, 2012. In addition, we have certain contingent liabilities... -
Page 62
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS None of the reporting units incurred any goodwill impairment charges in 2012, 2011 or 2010. Changes in our forecasts could cause carrying values of our reporting units ... -
Page 63
... and losses recognized outside of the corridor) as of, and for the year ended, December 31, 2012 (in millions). 25 Basis Point Increase 25 Basis Point Decrease Pension Plans Discount Rate: Effect on ongoing net periodic benefit cost Effect on projected benefit obligation Return on Assets: Effect... -
Page 64
... tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to these uncertain tax positions. Significant changes to these estimates may result in an increase... -
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...trends in customer payment frequency, and judgments about the probable effects of relevant observable data, including present economic conditions and the financial health of specific customers and market sectors. Our risk management process includes standards and policies for reviewing major account... -
Page 66
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Equity Price Risk We hold investments in various common equity securities that are subject to price risk. These securities are primarily in the form of equity index ... -
Page 67
... to Consolidated Financial Statements Note 1-Summary of Accounting Policies Note 2-Cash and Investments Note 3-Property, Plant and Equipment Note 4-Company-Sponsored Employee Benefit Plans Note 5-Multiemployer Employee Benefit Plans Note 6-Business Acquisitions, Goodwill and Intangible Assets Note... -
Page 68
... Firm Board of Directors and Shareowners United Parcel Service, Inc. Atlanta, Georgia We have audited the accompanying consolidated balance sheets of United Parcel Service, Inc. and subsidiaries (the "Company") as of December 31, 2012 and 2011, and the related statements of consolidated income... -
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... Long-Term Debt Pension and Postretirement Benefit Obligations Deferred Income Tax Liabilities Self-Insurance Reserves Other Non-Current Liabilities Shareowners' Equity: Class A common stock (225 and 240 shares issued in 2012 and 2011) Class B common stock (729 and 725 shares issued in 2012 and 2011... -
Page 70
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME (In millions, except per share amounts) Years Ended December 31, 2012 2011 2010 Revenue Operating Expenses: Compensation and benefits Repairs and maintenance Depreciation and amortization Purchased transportation Fuel ... -
Page 71
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS (In millions) Years Ended December 31, 2012 2011 2010 Cash Flows From Operating Activities: Net income Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization Pension ... -
Page 72
... instruments. Investments Marketable securities are classified as available-for-sale and are carried at fair value, with related unrealized gains and losses reported, net of tax, as accumulated other comprehensive income ("AOCI"), a separate component of shareowners' equity. The amortized cost of... -
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...trends in customer payment frequency, and judgments about the probable effects of relevant observable data, including present economic conditions and the financial health of specific customers and market sectors. Our risk management process includes standards and policies for reviewing major account... -
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... of pension expense, primarily service and interest costs and the expected return on plan assets, are recorded on a quarterly basis. We participate in a number of trustee-managed multiemployer pension and health and welfare plans for employees covered under collective bargaining agreements. Our... -
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... results of operations. In June 2011, the FASB issued an Accounting Standards Update that increases the prominence of items reported in other comprehensive income in the financial statements. This update requires companies to present comprehensive income in a single statement below net income or in... -
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... to net income in its entirety (e.g., the net periodic pension cost), companies would instead cross reference to the related footnote for additional information (e.g., the pension footnote). This update is effective for us beginning in the first quarter of 2013. Other accounting pronouncements... -
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... the consolidated balance sheets with the quarterly change in investment value recognized in investment income on the statements of consolidated income. Fair Value Measurements Marketable securities utilizing Level 1 inputs include active exchange-traded equity securities and equity index funds, and... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS We maintain holdings in certain investment partnerships that are measured at fair value utilizing Level 3 inputs (classified as "other investments" in the tables below, and as "Other Non-Current Assets" in the ... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the years ended December 31, 2012 and 2011 (in millions). Marketable Securities Other Investments Total... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4. COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS We sponsor various retirement and pension plans, including defined benefit and defined contribution plans which cover our employees worldwide. U.S. Pension ... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Net Periodic Benefit Cost Information about net periodic benefit cost for the company-sponsored pension and postretirement benefit plans is as follows (in millions): U.S. Pension Benefits 2012 2011 2010 U.S. ... -
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... STATEMENTS For plans outside the U.S., consideration is given to local market expectations of long-term returns. Strategic asset allocations are determined by country, based on the nature of liabilities and considering the demographic composition of the plan participants. Health care cost trends... -
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... obligation for our pension plans as of the measurement dates in 2012 and 2011 was $30.350 and $23.307 billion, respectively. Benefit payments under the pension plans include $16 and $14 million paid from employer assets in both 2012 and 2011. Benefit payments (net of participant contributions... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Pension and Postretirement Plan Assets The applicable benefit plan committees establish investment guidelines and strategies, and regularly monitor the performance of the funds and portfolio managers. Our ... -
Page 85
...611 $ 22,837 Represents global balanced-risk commingled funds, consisting primarily of equity, bonds, and some currencies and commodities. There were no UPS class A or B shares of common stock directly held in plan assets as of December 31, 2012 or December 31, 2011. Pension assets utilizing Level... -
Page 86
... invest in these funds until the end of the term of the partnerships, typically ranging between 12 and 18 years from the date of inception. An active secondary market exists for similar partnership interests, although no particular value (discount or premium) can be guaranteed. At December 31, 2012... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The fair value disclosures above have not been provided for our international pension benefit plans since asset allocations are determined and managed at the individual country level. In general, the asset ... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 5. MULTIEMPLOYER EMPLOYEE BENEFIT PLANS We contribute to a number of multiemployer defined benefit plans under the terms of collective bargaining agreements that cover our union-represented employees. These ... -
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... Plan Truck Drivers and Helpers Local Union No. 355 Retirement Pension Plan United Parcel Service, Inc.-Local 177, I.B.T. Multiemployer Retirement Plan Western Conference of Teamsters Pension Plan Western Pennsylvania Teamsters and Employers Pension Fund All Other Multiemployer Pension Plans Number... -
Page 90
...plans are not material. (in millions) UPS Contributions 2012 2011 2010 Health and Welfare Fund Bay Area Delivery Drivers Central Pennsylvania Teamsters Health & Pension Fund Central States, South East & South West Areas Health and Welfare Fund Delta Health Systems-East Bay Drayage Drivers Employer... -
Page 91
...these transactions were not material. The results of operations of these acquired companies have been included in our statements of consolidated income from the date of acquisition. The remaining change in goodwill for both the International Package and Supply Chain & Freight segments was due to the... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Intangible Assets The following is a summary of intangible assets at December 31, 2012 and 2011 (in millions): WeightedAverage Amortization Period (in years) Gross Carrying Amount Accumulated Amortization Net ... -
Page 93
... 31, 2012. The amount of commercial paper outstanding under these programs in 2013 is expected to fluctuate. Fixed Rate Senior Notes We have completed several offerings of fixed rate senior notes. All of the notes pay interest semiannually, and allow for redemption of the notes by UPS at any time by... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Principal Value Maturity Average Effective Interest Rate 2012 2011 4.50% senior notes 3.875% senior notes 1.125% senior notes 5.50% senior notes 5.125% senior notes 3.125% senior notes 2.45% senior notes 8.375... -
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... FINANCIAL STATEMENTS Facility Notes and Bonds We have entered into agreements with certain municipalities to finance the construction of, or improvements to, facilities that support our U.S. Domestic Package and Supply Chain & Freight operations in the United States. These facilities are located... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table sets forth the aggregate minimum lease payments under capital and operating leases, the aggregate annual principal payments due under our long-term debt, and the aggregate amounts expected to ... -
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... quarterly basis. As of December 31, 2012, our net worth, as defined, was equivalent to $8.007 billion. We do not expect these covenants to have a material impact on our financial condition or liquidity. Fair Value of Debt Based on the borrowing rates currently available to the Company for long-term... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In AFMS LLC v. UPS and FedEx Corporation, a lawsuit filed in federal court in the Central District of California in August 2010, the plaintiff asserts that UPS and FedEx violated U.S. antitrust law by conspiring ... -
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... TO CONSOLIDATED FINANCIAL STATEMENTS In January 2008, a class action complaint was filed in the United States District Court for the Eastern District of New York alleging price-fixing activities relating to the provision of freight forwarding services. UPS was not named in this case. In July 2009... -
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... PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following is a rollforward of our common stock, additional paid-in capital, and retained earnings accounts (in millions, except per share amounts): 2012 Shares Dollars Shares 2011 Dollars Shares 2010 Dollars Class... -
Page 101
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2012 2011 2010 Foreign currency translation gain (loss): Balance at beginning of year Aggregate adjustment for the year (net of tax effect of $(9), $11 and $(34)) Balance at end of year Unrealized gain (loss)... -
Page 102
...thirds of the annual Management Incentive Award will be made in Restricted Units (depending upon the level of management involved), which generally vest over a five-year period. The other one-third to one-half of the award is in the form of cash or unrestricted shares of class A common stock, and is... -
Page 103
... shares of UPS class A common stock. Stock options granted in connection with the Incentive Compensation Plan must have an exercise price at least equal to the NYSE closing price of UPS class B common stock on the date the option is granted. Executive officers and certain senior managers annually... -
Page 104
... class B common stock on the last day of each quarterly period. Employees purchased 1.2, 1.3 and 1.5 million shares at average prices of $72.17, $66.86 and $57.98 per share during 2012, 2011, and 2010, respectively. This plan is not considered to be compensatory, and therefore no compensation cost... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In evaluating financial performance, we focus on operating profit as a segment's measure of profit or loss. Operating profit is before investment income, interest expense and income taxes. The accounting policies... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Geographic information as of, and for the years ended, December 31 is as follows (in millions): 2012 2011 2010 United States: Revenue Long-lived assets International: Revenue Long-lived assets Consolidated: ... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Our effective tax rate declined to 17.1% in 2012 compared with 34.1% in 2011 largely due to the significance of U.S. Federal tax credits and the proportion of taxable income in certain non-U.S. jurisdictions ... -
Page 108
... tax benefits of $280, $291 and $326 million recorded as of December 31, 2012, 2011 and 2010, respectively, associated with outstanding refund claims for prior tax years. Therefore, we had a net receivable recorded with respect to prior years' income tax matters in the accompanying consolidated... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In June 2011, we received an IRS Revenue Agent Report (RAR) covering income taxes for tax years 2005 through 2007, in addition to the excise tax matters described in note 8. The income tax RAR proposed ... -
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... PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 14. DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT Risk Management Policies We are exposed to market risk, primarily related to foreign exchange rates, commodity prices and interest rates. These exposures are actively... -
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... PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Types of Hedges Commodity Risk Management Currently, the fuel surcharges that we apply to our domestic and international package and LTL services are the primary means of reducing the risk of adverse fuel price changes... -
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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Outstanding Positions The notional amounts of our outstanding derivative positions were as follows as of December 31, 2012 and 2011 (in millions): 2012 2011 Currency Hedges: Euro British Pound Sterling Canadian ... -
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...the amount and location in the statements of consolidated income in which derivative gains and losses, as well as the related amounts reclassified from AOCI, have been recognized for those derivatives designated as cash flow hedges for the years ended December 31, 2012 and 2011 (in millions): Amount... -
Page 114
... in the statements of consolidated income related to fair value changes and settlements of these foreign currency forward and interest rate swap contracts not designated as hedges for the years ended December 31, 2012 and 2011 (in millions): Location of Gain (Loss) Recognized in Income Amount of... -
Page 115
... 1,100 employees were offered voluntary severance packages, while other impacted employees received severance benefits based on length of service, and access to support programs. We recorded a pre-tax charge of $98 million ($64 million after-tax) in the first quarter of 2010 related to the costs of... -
Page 116
...of these transactions increased net income by $20 million, and basic and diluted earnings per share by $0.02. Operating profit for the quarter ended December 31, 2011 was impacted by a mark-to-market loss on our pension and postretirement benefit plans related to the remeasurement of plan assets and... -
Page 117
... of United Parcel Service, Inc. and its subsidiaries as of December 31, 2012 and the related consolidated statements of income, comprehensive income and cash flows for the year ended December 31, 2012, has issued an attestation report on the Company's internal control over financial reporting, which... -
Page 118
... Accounting Firm Board of Directors and Shareowners United Parcel Service, Inc. Atlanta, Georgia We have audited the internal control over financial reporting of United Parcel Service, Inc. and subsidiaries (the "Company") as of December 31, 2012, based on criteria established in Internal Control... -
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..., Worldwide Sales, Marketing and Strategy (2011 - present), Senior Vice President, Worldwide Sales and Marketing (2008 - 2010), Senior Vice President and President, UPS International (2007), President, UPS Supply Chain Solutions - Asia and Europe (2006). Senior Vice President, U.S. Operations (2009... -
Page 120
...by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information about security ownership is presented under the caption "Beneficial Ownership of Common Stock" in our definitive Proxy Statement for the Annual Meeting of Shareowners to... -
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...15. Exhibits and Financial Statement Schedules (a) 1. Financial Statements. See Item 8 for the financial statements filed with this report. 2. Financial Statement Schedules. None. 3. List of Exhibits. See the Exhibit Index for a list of the exhibits incorporated by reference into or filed with this... -
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... the Securities Exchange Act of 1934, United Parcel Service, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. UNITED PARCEL SERVICE, INC. (REGISTRANT) By: / S/ D. SCOTT DAVIS D. Scott Davis Chairman and Chief Executive Officer Date: February... -
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... March 19, 2012). - Termination Agreement, dated as of January 22, 2013, between United Parcel Service, Inc. and TNT Express N.V. - Form of Restated Certificate of Incorporation of United Parcel Service, Inc. (incorporated by reference to Exhibit 3.2 to Form 8-K filed on May 12, 2010). - Amended and... -
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... Savings Plan (incorporated by reference to Exhibit 10.2(5) to the 2011 Annual Report on Form 10-K). †(6) Amendment No. 6 to the UPS Savings Plan. 10.3 - Credit Agreement (364-Day Facility) dated April 12, 2012 among United Parcel Service, Inc., the initial lenders named therein, Citigroup Global... -
Page 125
... the 2009 Annual Report on Form 10-K). †(3) Amendment No. 3 to the Discounted Employee Stock Purchase Plan. 10.10 11 †12 †18 †21 †23 †31.1 †31.2 †32.1 †32.2 ††101 - 2012 Omnibus Incentive Compensation Plan (incorporated by reference to Annex A to the proxy statement filed on... -
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..., 2011 and 2010, as well as in the historical financial schedules on our investor relations website. The taxes deducted from operating profit in the return on invested capital calculation are based on the reported and adjusted effective tax rates noted on page 38 of our 2012 annual report on Form 10... -
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... website addresses in the "UPS Shareowner Services" section above. Form 10-K Our Annual Report on Form 10-K for the year ended December 31, 2012 forms part of the UPS 2012 Annual Report. If you would like an additional copy of our Form 10-K, you can access it through the Investor Relations website...