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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
34
International Package Operations
Year Ended December 31, % Change
2014 2013 2012 2014 / 2013 2013 / 2012
Average Daily Package Volume (in thousands):
Domestic 1,579 1,499 1,427 5.3 % 5.0 %
Export 1,115 1,034 972 7.8 % 6.4 %
Total Avg. Daily Package Volume 2,694 2,533 2,399 6.4 % 5.6 %
Average Revenue Per Piece:
Domestic $ 6.97 $ 7.06 $ 7.04 (1.3)% 0.3 %
Export 33.98 35.18 36.88 (3.4)% (4.6)%
Total Avg. Revenue Per Piece $ 18.15 $ 18.54 $ 19.13 (2.1)% (3.1)%
Operating Days in Period 253 252 252
Revenue (in millions):
Domestic $ 2,784 $ 2,667 $ 2,531 4.4 % 5.4 %
Export 9,586 9,166 9,033 4.6 % 1.5 %
Cargo 618 596 560 3.7 % 6.4 %
Total Revenue $12,988 $12,429 $12,124 4.5 % 2.5 %
Operating Expenses (in millions):
Operating Expenses $11,311 $10,672 $11,255 6.0 % (5.2)%
Defined Benefit Plan Mark-to-Market Charge (200)—
(941)
Health & Welfare Plan Charges (28)— —
Gain Upon Liquidation of Foreign Subsidiary — 245 —
TNT Termination Fee and Related Expenses —(284)—
Adjusted Operating Expenses $11,083 $10,633 $10,314 4.2 % 3.1 %
Operating Profit (in millions) and Operating Margin:
Operating Profit $ 1,677 $ 1,757 $ 869 (4.6)% 102.2 %
Adjusted Operating Profit $ 1,905 $ 1,796 $ 1,810 6.1 % (0.8)%
Operating Margin 12.9% 14.1% 7.2%
Adjusted Operating Margin 14.7% 14.5% 14.9%
Currency Translation Benefit / (Cost)—(in millions)*:
Revenue $ (72) $ (65)
Operating Expenses 87 (37)
Operating Profit $ 15 $ (102)
* Net of currency hedging; amount represents the change compared to the prior year.
Revenue
The change in overall revenue was impacted by the following factors for the years ended December 31, 2014 and 2013,
compared with the corresponding prior year periods:
Volume
Rates /
Product Mix
Fuel
Surcharge Currency
Total
Revenue
Change
Revenue Change Drivers:
2014 / 2013 6.8% (1.7)% — % (0.6)% 4.5%
2013 / 2012 5.6% (1.5)% (1.1)% (0.5)% 2.5%