UPS Releases 4Q 2021 Earnings

• Consolidated Revenues of $27.8B, Up 11.5% from Last Year
• Consolidated Operating Profit of $3.9B, Up 91.0% from Last Year; Up 37.7% on an Adjusted* Basis
• Diluted EPS of $3.52; Adjusted Diluted EPS Up 35.0% Over Last Year to $3.59
• UPS Board of Directors Declares Quarterly Dividend of $1.52, a Per-Share Increase of 49% Over the Prior Year

ATLANTA – UPS (NYSE:UPS) today announced fourth-quarter 2021 consolidated revenue of $27.8 billion, an 11.5% increase over the fourth quarter of 2020. Consolidated operating profit was $3.9 billion, up 91.0% compared to the fourth quarter of 2020, and up 37.7% on an adjusted basis. Diluted earnings per share were $3.52 for the quarter; adjusted diluted earnings per share were 35.0% above the same period in 2020.

For the fourth quarter of 2021, GAAP results include a total charge of $59 million, or $0.07 per diluted share, comprised of a non-cash, after-tax mark-to-market (MTM) pension charge of $14 million and after-tax transformation and other charges of $45 million.

“I want to thank all UPSers for their outstanding efforts throughout the holiday season and for once again delivering industry-leading service to our customers.” said Carol Tomé, UPS chief executive officer. “The execution of our strategy is delivering positive financial results and driving strong momentum as we move into 2022.”

U.S. Domestic Segment

• Revenue was up 12.4%, driven by a 10.5% increase in revenue per piece.
• Operating margin was 11.9%; adjusted operating margin was 12.2%.

International Segment

• Revenue increased 13.1%, driven by a 16.4% increase in revenue per piece.
• Operating margin was 24.6%; adjusted operating margin was 24.7%.

Supply Chain Solutions¹

¹ Consists of non-reportable operating segments that do not meet criteria of a reportable segment under ASC Topic 280 – Segment Reportig.

• Revenue increased 6.7%, led by Forwarding and Logistics businesses which combined grew 28%.
• Operating margin was 9.9%; adjusted operating margin was 9.7%.

Full-Year 2021 Consolidated Results

• Revenue increased 15.0% to $97.3 billion.
• Operating profit was $12.8 billion; adjusted operating profit was $13.1 billion, up 50.8%.
• Operating margin was 13.2%; adjusted operating margin was 13.5%.
• Diluted EPS totaled $14.68; adjusted diluted EPS was $12.13, which excluded the impacts of the MTM pension gain and transformation and other charges.
• Return on invested capital was 30.8%, exceeding the company’s 2023 target.
• Cash from operations was $15.0 billion and free cash flow was $10.9 billion.

Dividend Declaration

UPS will pay a first-quarter 2022 dividend of $1.52 per share on all outstanding Class A and Class B shares. The dividend is payable March 10, 2022 to shareowners of record on February 22, 2022.

2022 Outlook

The company provides guidance on an adjusted (non-GAAP) basis because it is not possible to predict or provide a reconciliation reflecting the impact of future pension mark-to-market adjustments or other unanticipated events, which would be included in reported (GAAP) results and could be material.

UPS expects to deliver its 2023 consolidated revenue and operating margin targets one year early. For the full year 2022, the company expects consolidated revenue of about $102 billion, an adjusted operating margin of approximately 13.7% and adjusted return on invested capital to be above 30%.

The company is planning capital expenditures to be 5.4% of revenue or approximately $5.5 billion, dividend payments to be around $5.2 billion, subject to Board approval, and share repurchases to be at least $1.0 billion. The effective tax rate is expected to be around 23.0%.

* “Adjusted” and free cash flow amounts are non-GAAP financial measures. See the appendix to this release for a discussion of non-GAAP financial measures, including a reconciliation to the most closely correlated GAAP measure.