UPS 2015 Annual Report Download - page 5
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• Our strong operating performance enables us to
earn record returns for our shareowners. Our free
cash-ow†generation remained robust, at
$5.1 billion, enabling us to raise the dividend by
9 percent in 2015. This is the 46th consecutive year
that we have increased or maintained our dividend
annually. Our strong cash ow also allowed
UPS to fund $2.4 billion in capital expenditures
and repurchase more than $2.7 billion in shares.
We have returned more than $58 billion to
shareowners since going public in 1999.
Operations Review
Ourfocus in2015wastocontinueinvesting
in new capacity and technology. The financial
results weachievedweremadepossibleby
these investments, by ensuring we are properly
compensatedforthevalueweprovide,andbythe
determination and dedication of our people.
Throughout the year, all three segments made
changes to pricing policies and took a disciplined
approach to top-line growth. We worked closely
with customers to improve profitability, while
occasionally stepping away from some low-value
opportunities. These pricing initiatives enabled
ustooffsetthestrong revenueheadwindswe
faced from unfavorable currency conversions and
lowerfuelsurchargerevenues. As a result,adjusted
operating profits* rose 9.2 percent over 2014 on a
0.2increaseintotal revenue.
We also closed on the $1.8 billion acquisition
of Coyote Logistics during the third quarter.
The Coyote acquisition represented the largest
purchase in our history and established UPS as
atop-tiercompetitorintheasset-lighttruckload
brokerageindustry.You’llhearmoreinthecoming
yearaboutthis companyand ourplans toexpand
this unique business model and technology within
the industry and within UPS.
Global Package Operations
Daily shipping volume increased 1.7 percent, with
U.S. Domestic volume growing slightly faster than
International. UPS demonstrated a disciplined
approach to growth in 2015, declining to renew
some lower-yielding contracts while at the
same time improving operating margins. When
combined with the pricing initiatives discussed
earlier, these actions drove package yield higher
in 2015.
Small package operations benefitted from ORION
and delivered high-quality service in the most
efficient manner. Technology implementations
inthepackageoperations and theadditionof
newfacilities acrosstheglobehelped produce
strong operating margin expansion. In total, global
package adjusted operating margin* expanded by
120 basis points, to 14.3 percent in 2015.
Revenue
(in billions of dollars)
0 102030405
06
0
2014 58.2
2015 58.4
2010 49.5
2011 53.1
2012 54.1
2013 55.4
†See reconciliation of Free Cash Flow on the inside front cover. *See reconciliation of Non-GAAP financial measures on page A1. 3
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