UPS 2014 Annual Report Download - page 115

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
103
NOTE 11. SEGMENT AND GEOGRAPHIC INFORMATION
We report our operations in three segments: U.S. Domestic Package operations, International Package operations and
Supply Chain & Freight operations. Package operations represent our most significant business and are broken down into
regional operations around the world. Regional operations managers are responsible for both domestic and export products
within their geographic area.
U.S. Domestic Package
Domestic Package operations include the time-definite delivery of letters, documents and packages throughout the United
States.
International Package
International Package operations include delivery to more than 220 countries and territories worldwide, including
shipments wholly outside the United States, as well as shipments with either origin or destination outside the United States. Our
International Package reporting segment includes the operations of our Europe, Asia, Americas and ISMEA (Indian
Subcontinent, Middle East and Africa) operating segments.
Supply Chain & Freight
Supply Chain & Freight includes our forwarding and logistics operations, UPS Freight and other aggregated business
units. Our forwarding and logistics business provides services in more than 195 countries and territories worldwide, and
includes international air and ocean freight forwarding, customs brokerage, distribution and post-sales services, and mail and
consulting services. UPS Freight offers a variety of LTL and TL services to customers in North America. Other aggregated
business units within this segment include The UPS Store, UPS Capital and UPS Customer Solutions.
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 of the reportable segments are
the same as those described in the summary of accounting policies (see note 1), with certain expenses allocated between the
segments using activity-based costing methods. Unallocated assets are comprised primarily of cash, marketable securities, and
certain investment partnerships.
Segment information as of, and for the years ended, December 31 is as follows (in millions):
2014 2013 2012
Revenue:
U.S. Domestic Package $ 35,851 $ 34,074 $ 32,856
International Package 12,988 12,429 12,124
Supply Chain & Freight 9,393 8,935 9,147
Consolidated $ 58,232 $ 55,438 $ 54,127
Operating Profit:
U.S. Domestic Package $ 2,859 $ 4,603 $ 459
International Package 1,677 1,757 869
Supply Chain & Freight 432 674 15
Consolidated $ 4,968 $ 7,034 $ 1,343
Assets:
U.S. Domestic Package $ 20,716 $ 19,648 $ 19,934
International Package 7,853 8,463 11,248
Supply Chain & Freight 6,024 6,624 6,610
Unallocated 878 1,477 1,071
Consolidated $ 35,471 $ 36,212 $ 38,863
Depreciation and Amortization Expense:
U.S. Domestic Package $ 1,276 $ 1,229 $ 1,220
International Package 478 473 475
Supply Chain & Freight 169 165 163
Consolidated $ 1,923 $ 1,867 $ 1,858