Enhanced Investments - Financial Portal

Published: 2023-04-25 00:00:00 ET

EX-99.2 3 exhibit992-q12023financial.htm EX-99.2 Q1 2023 FINANCIAL STATEMENT SCHEDULES Document

Exhibit 99.2

United Parcel Service, Inc.

Selected Financial Data - First Quarter

(unaudited)


	Three Months Ended
	March 31
	2023			2022			Change		% Change
(amounts in millions, except per share data)
Statement of Income Data:
Revenue:
U.S. Domestic Package	$	14,987		$	15,124		$	(137)	(0.9)	%
International Package	4,543			4,876			(333)		(6.8)	%
Supply Chain Solutions	3,395			4,378			(983)		(22.5)	%
Total revenue	22,925			24,378			(1,453)		(6.0)	%

Operating expenses:
U.S. Domestic Package	13,521			13,462			59		0.4	%
International Package	3,715			3,760			(45)		(1.2)	%
Supply Chain Solutions	3,148			3,905			(757)		(19.4)	%
Total operating expenses	20,384			21,127			(743)		(3.5)	%

Operating profit:
U.S. Domestic Package	1,466			1,662			(196)		(11.8)	%
International Package	828			1,116			(288)		(25.8)	%
Supply Chain Solutions	247			473			(226)		(47.8)	%
Total operating profit	2,541			3,251			(710)		(21.8)	%

Other income (expense):
Other pension income (expense)	66			331			(265)		(80.1)	%
Investment income (expense) and other	103			(16)			119		N/A
Interest expense	(188)			(174)			(14)		8.0	%
Total other income (expense)	(19)			141			(160)		N/A

Income before income taxes	2,522			3,392			(870)		(25.6)	%

Income tax expense	627			730			(103)		(14.1)	%

Net income	$	1,895		$	2,662		$	(767)	(28.8)	%

Net income as a percentage of revenue	8.3		%	10.9		%

Per share amounts:
Basic earnings per share	$	2.20		$	3.05		$	(0.85)	(27.9)	%
Diluted earnings per share	$	2.19		$	3.03		$	(0.84)	(27.7)	%

Weighted-average shares outstanding:
Basic	862			874			(12)		(1.4)	%
Diluted	865			879			(14)		(1.6)	%

As Adjusted Income Data (1):
Operating profit:
U.S. Domestic Package	$	1,488		$	1,705		$	(217)	(12.7)	%
International Package	806			1,120			(314)		(28.0)	%
Supply Chain Solutions	258			481			(223)		(46.4)	%
Total operating profit	2,552			3,306			(754)		(22.8)	%

Total other income (expense)	$	(19)		$	108		$	(127)	N/A
Income before income taxes	$	2,533		$	3,414		$	(881)	(25.8)	%
Net income	$	1,904		$	2,681		$	(777)	(29.0)	%

Basic earnings per share	$	2.21		$	3.07		$	(0.86)	(28.0)	%
Diluted earnings per share	$	2.20		$	3.05		$	(0.85)	(27.9)	%

(1) See Non-GAAP schedules for reconciliation of adjustments.

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Selected Operating Data - First Quarter

(unaudited)


	Three Months Ended
	March 31
	2023		2022		Change		% Change

Revenue (in millions):
U.S. Domestic Package:
Next Day Air	$	2,461	$	2,594	$	(133)	(5.1)	%
Deferred	1,194		1,420		(226)		(15.9)	%
Ground	11,332		11,110		222		2.0	%
Total U.S. Domestic Package	14,987		15,124		(137)		(0.9)	%
International Package:
Domestic	794		851		(57)		(6.7)	%
Export	3,552		3,778		(226)		(6.0)	%
Cargo and Other	197		247		(50)		(20.2)	%
Total International Package	4,543		4,876		(333)		(6.8)	%
Supply Chain Solutions:
Forwarding	1,514		2,589		(1,075)		(41.5)	%
Logistics	1,410		1,251		159		12.7	%
Other	471		538		(67)		(12.5)	%
Total Supply Chain Solutions	3,395		4,378		(983)		(22.5)	%
Consolidated	$	22,925	$	24,378	$	(1,453)	(6.0)	%

Consolidated volume (in millions)	1,407		1,490		(83)		(5.5)	%

Operating weekdays	64		64		—		0.0	%

Average Daily Package Volume (in thousands):
U.S. Domestic Package:
Next Day Air	1,737		1,945		(208)		(10.7)	%
Deferred	1,139		1,509		(370)		(24.5)	%
Ground	15,796		16,287		(491)		(3.0)	%
Total U.S. Domestic Package	18,672		19,741		(1,069)		(5.4)	%
International Package:
Domestic	1,635		1,806		(171)		(9.5)	%
Export	1,682		1,731		(49)		(2.8)	%
Total International Package	3,317		3,537		(220)		(6.2)	%
Consolidated	21,989		23,278		(1,289)		(5.5)	%

Average Revenue Per Piece:
U.S. Domestic Package:
Next Day Air	$	22.14	$	20.84	$	1.30	6.2	%
Deferred	16.38		14.70		1.68		11.4	%
Ground	11.21		10.66		0.55		5.2	%
Total U.S. Domestic Package	12.54		11.97		0.57		4.8	%
International Package:
Domestic	7.59		7.36		0.23		3.1	%
Export	33.00		34.10		(1.10)		(3.2)	%
Total International Package	20.47		20.45		0.02		0.1	%
Consolidated	$	13.74	$	13.26	$	0.48	3.6	%

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Detail of Operating Expenses - First Quarter

(unaudited)


	Three Months Ended
	March 31
	2023		2022		Change		% Change
(in millions)
Compensation and benefits	$	11,462	$	11,601	$	(139)	(1.2)	%
Repairs and maintenance	725		701		24		3.4	%
Depreciation and amortization	834		764		70		9.2	%
Purchased transportation	3,543		4,607		(1,064)		(23.1)	%
Fuel	1,271		1,220		51		4.2	%
Other occupancy	551		501		50		10.0	%
Other expenses	1,998		1,733		265		15.3	%
Total operating expenses	$	20,384	$	21,127	$	(743)	(3.5)	%

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Consolidated Balance Sheets

March 31, 2023 (unaudited) and December 31, 2022


	March 31, 2023		December 31, 2022
(amounts in millions)

ASSETS
Current Assets:
Cash and cash equivalents	$	6,190	$	5,602
Marketable securities	3,208		1,993
Accounts receivable	10,448		12,729
Less: Allowance for credit losses	(149)		(146)
Accounts receivable, net	10,299		12,583

Other current assets	2,028		2,039
Total Current Assets	21,725		22,217
Property, Plant and Equipment, Net	34,995		34,719
Operating Lease Right-Of-Use Assets	4,089		3,755
Goodwill	4,249		4,223
Intangible Assets, Net	2,811		2,796
Deferred Income Tax Assets	155		139
Other Non-Current Assets	4,165		3,275
Total Assets	$	72,189	$	71,124

LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities:
Current maturities of long-term debt, commercial paper and finance leases	$	2,332	$	2,341
Current maturities of operating leases	668		621
Accounts payable	6,302		7,515
Accrued wages and withholdings	3,012		4,049
Self-insurance reserves	1,069		1,069
Accrued group welfare and retirement plan contributions	1,196		1,078
Other current liabilities	1,683		1,467
Total Current Liabilities	16,262		18,140
Long-Term Debt and Finance Leases	19,856		17,321
Non-Current Operating Leases	3,539		3,238
Pension and Postretirement Benefit Obligations	4,602		4,807
Deferred Income Tax Liabilities	4,345		4,302
Other Non-Current Liabilities	3,532		3,513

Shareowners' Equity:
Class A common stock	2		2
Class B common stock	7		7
Additional paid-in capital	—		—
Retained earnings	21,510		21,326
Accumulated other comprehensive loss	(1,481)		(1,549)
Deferred compensation obligations	9		13
Less: Treasury stock	(9)		(13)
Total Equity for Controlling Interests	20,038		19,786
Noncontrolling interests	15		17
Total Shareowners' Equity	20,053		19,803
Total Liabilities and Shareowners' Equity	$	72,189	$	71,124

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Statements of Consolidated Cash Flows

(unaudited)


(amounts in millions)		Three Months Ended
		March 31
		2023		2022
Cash Flows From Operating Activities:
	Net income	$	1,895	$	2,662
	Adjustments to reconcile net income to net cash from operating activities:
	Depreciation and amortization	834		764
	Pension and postretirement benefit expense	243		201
	Pension and postretirement benefit contributions	(1,277)		(45)
	Self-insurance reserves	(20)		(45)
	Deferred tax (benefit) expense	56		209
	Stock compensation expense	126		386
	Other (gains) losses	(13)		44
	Changes in assets and liabilities, net of effects of business acquisitions:
	Accounts receivable	2,254		1,227
	Other assets	62		7
	Accounts payable	(1,668)		(743)
	Accrued wages and withholdings	(508)		(343)
	Other liabilities	405		173
	Other operating activities	(32)		(17)
	Net cash from operating activities	2,357		4,480

Cash Flows From Investing Activities:
	Capital expenditures	(609)		(548)
	Proceeds from disposal of businesses, property, plant and equipment	5		—
	Purchases of marketable securities	(2,371)		(68)
	Sales and maturities of marketable securities	1,179		60
	Acquisitions, net of cash acquired	(34)		1
	Other investing activities	17		(17)
	Net cash used in investing activities	(1,813)		(572)

Cash Flows From Financing Activities:
	Net change in short-term debt	—		—
	Proceeds from long-term borrowings	2,503		—
	Repayments of long-term borrowings	(65)		(18)
	Purchases of common stock	(751)		(254)
	Issuances of common stock	49		67
	Dividends	(1,348)		(1,284)
	Other financing activities	(384)		(481)
	Net cash from (used in) financing activities	4		(1,970)

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash		40		15

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash		588		1,953

Cash, Cash Equivalents and Restricted Cash:
	Beginning of period	5,602		10,255
	End of period	$	6,190	$	12,208

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Reconciliation of Free Cash Flow (Non-GAAP measure)

(unaudited)





(amounts in millions)	Three Months Ended
	March 31
	2023		2022
Cash flows from operating activities	$	2,357	$	4,480
Capital expenditures	(609)		(548)
Proceeds from disposals of property, plant and equipment	5		—
Other investing activities	17		(17)
Free Cash Flow (Non-GAAP measure)	$	1,770	$	3,915

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Reconciliation of Adjusted Debt to Adjusted EBITDA (Non-GAAP measure)

(unaudited)



(amounts in millions)	TTM(1) Ended		TTM(1) Ended
	March 31, 2023		March 31, 2022
Net income	$	10,781	$	10,760
Add back:
Income tax expense	3,174		3,023
Interest expense	718		691
Depreciation & amortization	3,258		2,995
EBITDA	17,931		17,469
Add back (deduct):
Incentive compensation program redesign	505		—
Transformation and other	134		205
Defined benefit plan (gains) and losses	(1,028)		(15)
Investment income and other pension income	(1,261)		(1,163)
Adjusted EBITDA	$	16,281	$	16,496

Debt and finance leases, including current maturities	$	22,188	$	21,881
Add back:
Non-current pension and postretirement benefit obligations	4,602		8,203
Adjusted total debt	$	26,790	$	30,084

Adjusted total debt/Net income	2.48		2.80

Adjusted total debt/adjusted EBITDA (Non-GAAP)	1.65		1.82

(1) Trailing twelve months.

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Reconciliation of Adjusted Return on Invested Capital (Non-GAAP measure)

(unaudited)



(amounts in millions)	TTM(1) Ended			TTM(1) Ended
	March 31, 2023			March 31, 2022
Net income	$	10,781		$	10,760
Add back (deduct):
Income tax expense	3,174			3,023
Interest expense	718			691
Other pension (income) expense	(1,986)			(1,185)
Investment (income) expense and other	(303)			7
Operating profit	$	12,384		$	13,296
Incentive compensation program redesign	505			—
Long-lived asset estimated residual value changes	76			—
Transformation and other	$	134		$	205
Adjusted operating profit	$	13,099		$	13,501

Average debt and finance leases, including current maturities	$	22,035		$	22,804
Average pension and postretirement benefit obligations	6,403			8,899
Average shareowners' equity	17,744			11,297
Average invested capital	$	46,182		$	42,999

Net income to average invested capital	23.3		%	25.0		%

Adjusted Return on Invested Capital (Non-GAAP)	28.4		%	31.4		%

(1) Trailing twelve months.

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Reconciliation of GAAP and As Adjusted Income Statement Data

(unaudited)


	Three Months Ended March 31,
(in millions, except per share data)	2023						2022
	As Reported (GAAP)		Transformation & Other Adj.(1)		As Adjusted (Non-GAAP)		As Reported (GAAP)		Pension Adj.(2)		Transformation & Other Adj.(3)		As Adjusted (Non-GAAP)		% Change As Rep. (GAAP)		% Change As Adj. (Non-GAAP)

U.S. Domestic Package	$	13,521	$	22	$	13,499	$	13,462	$	—	$	43	$	13,419	0.4	%	0.6	%
International Package	3,715		(22)		3,737		3,760		—		4		3,756		(1.2)	%	(0.5)	%
Supply Chain Solutions	3,148		11		3,137		3,905		—		8		3,897		(19.4)	%	(19.5)	%
Operating expense	20,384		11		20,373		21,127		—		55		21,072		(3.5)	%	(3.3)	%

U.S. Domestic Package	$	1,466	$	22	$	1,488	$	1,662	$	—	$	43	$	1,705	(11.8)	%	(12.7)	%
International Package	828		(22)		806		1,116		—		4		1,120		(25.8)	%	(28.0)	%
Supply Chain Solutions	247		11		258		473		—		8		481		(47.8)	%	(46.4)	%
Operating Profit	2,541		11		2,552		3,251		—		55		3,306		(21.8)	%	(22.8)	%
Other Income and (Expense):
Other pension income (expense)	66		—		66		331		(33)		—		298		(80.1)	%	(77.9)	%
Investment income (expense) and other	103		—		103		(16)		—		—		(16)		N/A		N/A
Interest expense	(188)		—		(188)		(174)		—		—		(174)		8.0	%	8.0	%
Total Other Income (Expense)	$	(19)	$	—	$	(19)	$	141	$	(33)	$	—	$	108	N/A		N/A
Income Before Income Taxes	2,522		11		2,533		3,392		(33)		55		3,414		(25.6)	%	(25.8)	%
Income Tax Expense	627		2		629		730		(9)		12		733		(14.1)	%	(14.2)	%
Net Income	$	1,895	$	9	$	1,904	$	2,662	$	(24)	$	43	$	2,681	(28.8)	%	(29.0)	%

Basic Earnings Per Share	$	2.20	$	0.01	$	2.21	$	3.05	$	(0.03)	$	0.05	$	3.07	(27.9)	%	(28.0)	%

Diluted Earnings Per Share	$	2.19	$	0.01	$	2.20	$	3.03	$	(0.03)	$	0.05	$	3.05	(27.7)	%	(27.9)	%

Weighted-average shares outstanding:
Basic	862						874
Diluted	865						879

(1) Reflects a goodwill impairment charge of $8 million within Supply Chain Solutions and other costs of $15 million, partially offset by a reduction in other employee benefits costs of $12 million.

(2) Represents the impact of curtailment of benefits effective December 31, 2023, for the Canada LTD Retirement Plan.

(3) Reflects other employee benefits costs of $33 million and other costs of $22 million.

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Supplemental Analysis of Currency - First Quarter

(unaudited)


Reconciliation of Currency Neutral Revenue Per Piece, Revenue and As Adjusted Operating Profit

	Three Months Ended								Currency
	March 31								Neutral
(in millions, except per piece data)	(GAAP)								(Non-GAAP)
	2023		2022		% Change		Currency		2023 (1)		% Change
Average Revenue Per Piece:
International Package:
Domestic	$	7.59	$	7.36	3.1	%	$	0.52	$	8.11	10.2	%
Export	33.00		34.10		(3.2)	%	0.95		33.95		(0.4)	%
Total International Package	$	20.47	$	20.45	0.1	%	$	0.75	$	21.22	3.8	%
Consolidated	$	13.74	$	13.26	3.6	%	$	0.11	$	13.85	4.4	%

	Three Months Ended								Currency
	March 31								Neutral
	(GAAP)								(Non-GAAP)
	2023		2022		% Change		Currency		2023 (1)		% Change
Revenue (in millions):
U.S. Domestic Package	$	14,987	$	15,124	(0.9)	%	$	—	$	14,987	(0.9)	%
International Package	4,543		4,876		(6.8)	%	161		4,704		(3.5)	%
Supply Chain Solutions	3,395		4,378		(22.5)	%	50		3,445		(21.3)	%
Total revenue	$	22,925	$	24,378	(6.0)	%	$	211	$	23,136	(5.1)	%

	Three Months Ended								Currency
	March 31								Neutral
	(Non-GAAP)								(Non-GAAP)
	2023		2022		% Change		Currency		2023 (1)		% Change
As Adjusted Operating Profit (in millions)(2):
U.S. Domestic Package	$	1,488	$	1,705	(12.7)	%	$	—	$	1,488	(12.7)	%
International Package	806		1,120		(28.0)	%	51		857		(23.5)	%
Supply Chain Solutions	258		481		(46.4)	%	(5)		253		(47.4)	%
Total operating profit	$	2,552	$	3,306	(22.8)	%	$	46	$	2,598	(21.4)	%

(1) Amounts adjusted for period over period foreign currency exchange rate and hedging differences.

(2) See Non-GAAP schedules for reconciliation of adjustments.

Prior year amounts may have been reclassified to conform to the current year presentation.

United Parcel Service, Inc.

Aircraft Fleet - As of March 31, 2023

(unaudited)


Description	Owned and Finance Leases	Operating Leases & Charters from Others	On Order	Under Option
Operating:
Boeing 757-200	75	—	—	—
Boeing 767-300	72	—	27	—
Boeing 767-300BCF	6	—	—	—
Boeing 767-300BDSF	4	—	—	—
Airbus A300-600	52	—	—	—
Boeing MD-11(1)	40	—	—	—
Boeing 747-400F	11	—	—	—
Boeing 747-400BCF	2	—	—	—
Boeing 747-8F	28	—	2	—
Other	—	286	—	—
Total	290	286	29	—

(1) Five of the MD-11 aircraft shown above are expected to be retired from operational use during 2023.

Prior year amounts may have been reclassified to conform to the current year presentation.

Enhanced Investments, Inc.
329 South Oyster Bay Road #2085
Plainview, NY 11803
team@eninvs.com

Important disclosures

Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.

Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities.
Past performance is no guarantee of future results. Any historical returns, expected returns [or probability projections] are hypothetical in nature and may not reflect actual future performance.
All the strategies assume investments in equity invstrumenta only and are more relevant for "agressive investment profile". Eastern European flagship strategy assumes using up to 20% leverage of total portfolio. GlobalCommodities and US Growth strategy currently assume no leverage.
Results for the Enhanced Investments strategies as compared to the performance of Illustrative Benchmarks is for informational purposes only. Our investment program does not mirror that of the Illustrative Benchmarks and the volatility may be materially different from the volatility of Illustrative Benchmarks. Reference or comparison to an Illustrative Benchmark does not imply that strategies of Enhanced Investments will be constructed in the same way as the Illustrative Benchmark or achieve returns, volatility, or other results similar to those of the Illustrative Benchmark. The S&P 500 is an unmanaged market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.
Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.