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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
109
NOTE 12. 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, logistics, Coyote, UPS Freight and other aggregated business units. Our
forwarding, logistics, and Coyote units provide services in more than 195 countries and territories worldwide, and include
international air and ocean freight forwarding, customs brokerage, truckload freight 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 and UPS Capital.
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):
2015 2014 2013
Revenue:
U.S. Domestic Package $ 36,747 $ 35,851 $ 34,074
International Package 12,149 12,988 12,429
Supply Chain & Freight 9,467 9,393 8,935
Consolidated $ 58,363 $ 58,232 $ 55,438
Operating Profit:
U.S. Domestic Package $ 4,767 $ 2,859 $ 4,603
International Package 2,137 1,677 1,757
Supply Chain & Freight 764 432 674
Consolidated $ 7,668 $ 4,968 $ 7,034
Assets:
U.S. Domestic Package $ 21,701 $ 20,708 $ 19,052
International Package 7,858 7,850 8,460
Supply Chain & Freight 7,728 6,004 6,564
Unallocated 1,024 878 1,477
Consolidated $ 38,311 $ 35,440 $ 35,553
Depreciation and Amortization Expense:
U.S. Domestic Package $ 1,408 $ 1,276 $ 1,229
International Package 475 478 473
Supply Chain & Freight 201 169 165
Consolidated $ 2,084 $ 1,923 $ 1,867