1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 1997
Commission file number 0-4714
United Parcel Service of America, Inc.
(Exact name of registrant specified in its charter)
Delaware 95-1732075
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Glenlake Parkway, NE
Atlanta, Georgia 30328
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (404) 828-6000
Not Applicable
Former name, address and fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities and
Exchange Act of 1934 during the preceding 12 months, and (2) has been
subject to such filing requirements of the past 90 days.
YES X NO
Common Stock, par value $.10 per share
(Title of Class)
570,000,000 shares
Outstanding as of November 13, 1997
2
PART I. ITEM 1- FINANCIAL INFORMATION
UNITED PARCEL SERVICE OF AMERICA, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 1997 (unaudited) and December 31, 1996
(In millions except share amounts)
ASSETS 1997 1996
- ------ ---- ----
CURRENT ASSETS:
Cash and short-term investments $ 1,663 $ 392
Accounts receivable 2,269 2,341
Prepaid employee benefit costs 457 401
Materials, supplies and prepaid expenses 509 581
Common stock held for stock plans 667 540
______ ______
TOTAL CURRENT ASSETS 5,565 4,255
PROPERTY, PLANT AND EQUIPMENT (including aircraft
under capitalized lease obligations)- at
cost, net of accumulated depreciation and
amortization of $7,337 in 1997 and $6,778 in
1996 10,806 10,230
OTHER ASSETS 412 469
$16,783 $14,954
====== ======
LIABILITIES AND SHAREOWNERS' EQUITY
- -----------------------------------
CURRENT LIABILITIES:
Commercial paper $ 900 $ -
Accounts payable 1,226 1,155
Accrued wages and withholdings 1,177 1,201
Dividends payable - 194
Deferred income taxes 150 149
Other current liabilities 654 459
______ ______
TOTAL CURRENT LIABILITIES 4,107 3,158
LONG-TERM DEBT (including capitalized lease
obligations), net of current maturities
of $34 in 1997 and $18 in 1996 2,885 2,573
------ ------
ACCUMULATED POSTRETIREMENT BENEFIT
OBLIGATION, NET 897 841
------ ------
DEFERRED TAXES, CREDITS AND OTHER LIABILITIES 2,711 2,481
SHAREOWNERS' EQUITY:
Preferred stock, no par value,
Authorized 200,000,000 shares, none issued - -
Common stock, par value $.10 per share,
Authorized 900,000,000 shares, issued
570,000,000, net of 10,000,000 in treasury 57 57
Additional paid-in capital 95 95
Retained earnings 6,092 5,728
Cumulative foreign currency adjustments (61) 21
------ ------
6,183 5,901
------ ------
$16,783 $14,954
====== ======
See notes to consolidated financial statements.
3
UNITED PARCEL SERVICE OF AMERICA, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months and Nine Months Ended September 30, 1997 and 1996
(In millions except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
Revenue $4,810 $5,585 $16,320 $16,428
----- ----- ------ ------
Operating Expenses:
Compensation and
benefits 2,979 3,302 9,776 9,815
Other 1,817 1,701 5,486 5,052
----- ----- ------ ------
4,796 5,003 15,262 14,867
Operating Profit 14 582 1,058 1,561
----- ----- ------ ------
Other income and
(expense):
Interest income 28 9 47 28
Interest expense (57) (20) (135) (64)
Miscellaneous, net (1) (5) (16) (25)
----- ----- ------ ------
(30) (16) (104) (61)
Income(loss)before
income taxes (16) 566 954 1,500
Income taxes (6) 226 396 600
----- ----- ------ ------
Net income (loss) $ (10) $ 340 $ 558 $ 900
===== ===== ====== ======
Net income (loss)
per share $ (0.02) $ 0.60 $ 0.98 $ 1.58
===== ===== ====== ======
See notes to consolidated financial statements.
4
UNITED PARCEL SERVICE OF AMERICA, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREOWNERS' EQUITY
Nine Months Ended September 30, 1997
(In millions)
(unaudited)
Cumulative
Additional Foreign Total
Common Stock Paid-In Retained Currency Shareowners'
-------------
Shares Amount Capital Earnings Adjustments Equity
------ ------ ------- -------- ----------- ------
Balance, January 1,
1997 570 $57 $95 $5,728 $21 $5,901
Net income - - - 558 - 558
Gain on issuance of
common stock held
for stock plans - - 26 - - 26
Exercise of stock
options - - (26) - - (26)
Dividends
($0.35 per share) - - - (194) - (194)
Foreign currency
adjustments - - - - (82) (82)
--- --- --- ------ ---- ------
Balance, September
30, 1997 570 $57 $95 $6,092 $(61) $6,183
=== === === ====== ==== ======
See notes to consolidated financial statements.
5
UNITED PARCEL SERVICE OF AMERICA, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1997 and 1996
(In millions)
(unaudited)
1997 1996
---- ----
Cash flows from operating activities:
Net income $ 558 $ 900
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization 757 706
Postretirement benefits 56 60
Deferred taxes, credits, and other 213 197
Changes in assets and liabilities:
Accounts receivable 72 (261)
Prepaid employee benefit costs (56) 154
Materials, supplies and prepaid
expenses 72 (55)
Common stock held for stock plans (127) (86)
Accounts payable 71 174
Accrued wages and withholdings (24) 20
Dividends payable (194) (178)
Other current liabilities 179 17
----- -----
Net cash provided from operating activities 1,577 1,648
----- -----
Cash flows from investing activities:
Capital expenditures (1,480) (1,470)
Disposals of property, plant and equipment 106 45
Other asset receipts 46 20
Net cash (used in) investing activities (1,328) (1,405)
Cash flows from financing activities:
Proceeds from borrowings 1,949 878
Repayment of borrowings (717) (795)
Dividends (194) (186)
Other transactions - 15
----- -----
Net cash provided by(used in)
financing activities 1,038 (88)
----- -----
Effect of exchange rate changes on cash (16) 10
----- -----
Net increase in cash and short-term investments 1,271 165
Cash and short-term investments:
Beginning of period 392 211
----- -----
End of period $1,663 $ 376
===== =====
Cash paid during the period for:
Interest (net of amount capitalized) $ 78 $ 56
===== =====
Income taxes $ 147 $ 324
===== =====
See notes to consolidated financial statements.
6
UNITED PARCEL SERVICE OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Months and Nine Months Ended September 30, 1997 and 1996
(unaudited)
1. For interim consolidated financial statement purposes,
UPS computes its tax provision on the basis of its estimated
annual effective income tax rate, and provides for accruals
under its various employee benefit plans based on one quarter
of the estimated annual expense for each three month period.
Net income per share is based on 570,000,000 shares in
1997 and 1996, including common stock held for stock plans.
2. In the opinion of management, the accompanying interim,
unaudited, consolidated financial statements contain all
adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position as of
September 30, 1997, the results of operations for the three
months and nine months ended September 30, 1997 and 1996, and
cash flows for the nine months ended September 30, 1997 and
1996.
3. During the second quarter of 1995, the Company received
a Notice of Deficiency from the United States Internal
Revenue Service ("IRS") asserting that it is liable for
additional tax for the 1983 and 1984 tax years. The Notice
of Deficiency is based in large part on the theory that UPS
is liable for tax on income of Overseas Partners Ltd., a
Bermuda company, which has reinsured excess value package
insurance purchased by UPS's customers from unrelated
insurers. The deficiency sought by the IRS relating to
package insurance is based on a number of inconsistent
theories and ranges from $8 million to $35 million of tax,
plus penalties and interest for 1984.
Agents for the IRS have also asserted in reports that UPS
is liable for additional tax for the 1985 through 1987 tax
years and the 1988 through 1990 tax years. The additional
tax sought by the agents relating to package insurance for
these periods range from $89 million to $148 million for the
1985 through 1987 tax years and up to $174 million for the
1988 through 1990 tax years, plus penalties and interest.
The IRS has based their assertions on the same theories
included in the above described Notice of Deficiency.
In addition, the IRS and its agents have raised a number
of other issues relating to the timing of deductions; the
characterization of expenses as capital rather than ordinary;
and UPS's entitlement to the Investment Tax Credit and the
Research Tax Credit in the 1983 through 1990 tax years.
These issues total $32 million in tax for the 1983 and 1984
tax years, $95 million in tax for the 1985 through 1987 tax
years, and $228 million in tax for the 1988 through 1990 tax
years. Penalties and interest are in addition to these
amounts. The majority of these adjustments would reverse in
future years.
7
UNITED PARCEL SERVICE OF AMERICA, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Months and Nine Months Ended September 30, 1997 and
1996
(unaudited)
In August 1995, the Company filed a petition in Tax Court
in opposition to the Notice of Deficiency related to the 1983
and 1984 tax years. The matter was tried before the Tax Court
in two sessions, from September 15 through September 30,
1997, and from November 6 through November 7, 1997. While
the Tax Court will not render its decision for at least
twelve to eighteen months, management still believes that the
eventual resolution of the matters raised by the IRS will not
result in a material adverse effect upon the financial
condition of the Company.
The Company has appealed with the IRS all material
issues related to the 1985 through 1990 tax years. The IRS
may take positions similar to those in the reports described
above for periods after 1990.
The Company is a defendant in various employment-related
lawsuits. Two of these actions allege employment
discrimination by the Company. Class action status has been
granted in one case and plaintiff's motion for class action
status is pending in the other. In addition, the United
States Equal Employment Opportunity Commission has moved to
intervene in one of the cases. Also, lawsuits have been filed
on behalf of more than 250 former contract pilots against the
Company, alleging, among other things, that in the late 1980's
the Company did not fulfill offers of employment to individuals
to serve as pilots of Company-operated aircraft. These cases
generally do not allege specific amounts of damages. However,
one of these cases has been tried and resulted in a jury verdict,
which was affirmed on appeal. Though the compensatory and
punitive damages awarded were substantial, they were not material
to the Company. Each of the pending employment-related lawsuits
is in its early stages, and the Company is at present unable to
estimate its exposure.
4. Certain prior period amounts have been reclassified to
conform to the current period presentation.
5. The Company experienced a strike from August 4, 1997
through August 19, 1997 by the International Brotherhood of
Teamsters ("IBT"), which represents approximately 190,000 UPS
employees. During the strike, the Independent Pilot
Association ("IPA"), which represents the majority of the
Company's pilots, observed picket lines in support of the IBT
strike. The strike severely limited U.S. domestic air and
ground operations during that period and also curtailed
International export operations, mainly U.S. export volume.
This resulted in a net loss of approximately $211 million for
the month ended August 31, 1997, which affected results for
the third quarter of 1997.
8
ITEM 2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS
Three Months Ended September 30, 1997 and 1996
- ----------------------------------------------
As previously reported, the International Brotherhood of
Teamsters ("IBT"), which represents approximately 190,000 UPS
employees, was on strike from August 4, 1997 through August
19, 1997. In addition, the Independent Pilot Association
("IPA"), which represents the majority of the Company's
pilots, observed picket lines in support of the IBT strike.
The new collective bargaining agreement negotiated in August
with the IBT was approved by a vote of the IBT membership on
October 9, 1997, however, two IBT local unions have not yet
ratified the relevant local supplements to the collective
bargaining agreement. The new collective bargaining agreement
extends through July 31, 2002. Management does not believe
the terms of the new agreement will have a material adverse
effect on operating margins. Further, the Company's
collective bargaining agreement with the IPA became amendable
on January 1, 1996. The Company proposed a new agreement to
the IPA, which was rejected by a vote of the Company's IPA-
represented pilots on October 1, 1997. The Company
anticipates that the parties to these contract negotiations
will not be released from mandatory mediation, if at all,
until after the Christmas season.
The IBT strike severely limited U.S. domestic air and
ground operations during August and also curtailed
international export operations, mainly U.S. export volume.
This resulted in a net loss of approximately $211 million for
the month ended August 31, 1997.
For the three months ended September 30, 1997, revenue
decreased by $775 million, or 13.9%, in comparison with the
three months ended September 30, 1996. For the third quarter
of 1997, domestic revenue totaled $4.138 billion, a decrease
of $712 million, or 14.7%, over the third quarter of 1996,
and international revenue totaled $672 million, a decrease of
$63 million, or 8.6%.
Domestic revenue decreased as a result of the significant
drop in volume caused by the strike. Volume decreased 19.5%
for the three months ended September 30, 1997 compared with
the three months ended September 30, 1996. This decrease is
inclusive of an 8.7% volume decrease in higher yielding
express packages. Although volume has not returned to pre-
strike levels, the month ended September 30, 1997 showed
significant improvement, with domestic revenues at levels
comparable with the month ended September 30, 1996.
Management has implemented several initiatives to restore
customer volume.
The decrease in international revenue was primarily
attributable to a $40 million decrease in foreign domestic
revenue, or 15.7%, further reduced by a $23 million decrease
in foreign export revenue, or 4.9%. The decrease in foreign
domestic revenue resulted primarily from a stronger U.S.
dollar. Export revenues decreased primarily as a result of a
stronger U.S. dollar despite higher volume, which was up
4.9%. Volume increases were somewhat curtailed as a result
of the strike.
Operating expenses decreased by $207 million, or 4.1%.
The operating ratio deteriorated from 89.6 during the third
quarter of 1996 to 99.7 during the third quarter of 1997 due
to the significant decrease in revenues from the strike. The
operating ratio was 89.7 for the month ended September 30,
1997 as a result of improved revenues.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS
Three Months Ended September 30, 1997 and 1996
- ----------------------------------------------
Operating profit for the period decreased $568 million,
or 97.6% as a result of the lower revenues. Operating
profits for the month ended September 30, 1997 returned to
levels comparable to the month ended September 30, 1996.
Interest expense amounted to $57 million, an increase of
$37 million over the corresponding quarter of the previous
year. This increase is primarily attributable to interest
costs incurred on higher debt levels outstanding during the
third quarter in comparison to the corresponding quarter of
the previous year. In addition, interest income increased by
$19 million as a result of correspondingly higher cash and
short-term investment balances.
Income before income taxes ("pre-tax income") decreased
$582 million, or 102.9%. Domestic pre-tax income amounted to
$14 million, a decrease of $607 million, or 97.7% over the
corresponding quarter of the previous year. The decrease was
a result of the strike and increased interest costs.
The international pre-tax loss amounted to $30 million,
an improvement of $25 million over the pre-tax loss for the
corresponding quarter of the previous year.
The international pre-tax loss attributable to the
foreign domestic operations decreased by $15 million, or
29.5%. This improvement results largely from cost reductions
from the Company's efforts to reduce unprofitable volume. The
pre-tax income associated with export operations improved by
$10 million. The continuation of this favorable trend in
export operations resulted primarily from higher volume and
improved operating margins. Export volume generated outside
the U.S. increased by 13.0%, while U.S. origin export
shipments decreased by 7.9%, which is attributable to the
strike, as described above. UPS expects that there will be a
continuing possibility of incurring overall losses in its
international business for the near future.
Net income decreased by $350 million, or 102.9%, over
the corresponding quarter of the prior year, as a result of
the strike.
As noted above, revenues and earnings were adversely
affected during the strike and for a brief period afterwards
while operations were gearing back up to meet customer needs.
Although the financial impact of the strike may continue into
the future, Management currently believes that the threat of
a material adverse effect on revenues and earnings for the
fourth quarter of 1997 and beyond 1997 has been substantially
mitigated as a result of better than anticipated, post-strike
operating results and cost cutting initiatives currently
being undertaken.
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS
Nine Months Ended September 30, 1997 and 1996
- ---------------------------------------------
Reference is made here to the discussion included in the
preceding section titled "Three Months Ended September 30,
1997 and 1996" regarding the IBT strike ("the strike") and
its effect on the operations of the Company.
Revenue decreased by $108 million, or 0.7%, for the nine
months ended September 30, 1997 over the nine months ended
September 30, 1996. For the nine months ended September 30,
1997, domestic revenue totaled $14.193 billion, a slight
decrease of $13 million, or 0.1%, over the nine months ended
September 30, 1996, and international revenue totaled $2.127
billion, a decrease of $95 million, or 4.3%.
Domestic revenue decreased as a result of lower volume,
which was down 4.7% due to the strike. The overall decrease
in volume is inclusive of a 3.5% volume increase in higher
yielding express packages, which was also depressed as a
result of the strike.
During the first quarter of 1997, rates for standard
ground shipments were increased an average of 3.4% for
commercial deliveries and 4.3% for residential deliveries.
Rates for UPS Next Day Air, UPS 2nd Day Air, and UPS 3-Day
Select each increased approximately 3.9%.
Rates for international shipments originating in the
United States were increased 2.6% for UPS Worldwide Express
and 4.9% for UPS Worldwide Expedited. Rate changes for
shipments originating outside the United States have been
made throughout the past year and vary by geographic market.
Rates for UPS Standard service to Canada did not change.
The decrease in international revenue was primarily
attributable to a $130 million decrease in foreign domestic
revenue, or 16.4%, offset by a $35 million increase in
foreign export revenue, or 2.5%. The decrease in foreign
domestic revenue results primarily from a stronger U.S.
dollar and a 5.5% decrease in volume. The Company has
focused attention on higher margin volume which is intended
to improve operating results in the long run but has reduced
revenue in the short term. Export revenues increased
primarily as a result of higher volume, which was up 9.2%.
Operating expenses increased by $395 million, or 2.7%. A
combination of increased operating expenses along with
decreased revenues from the strike resulted in a
deterioration of the operating ratio from 90.5 during 1996 to
93.5 during 1997.
Operating profit for the period decreased $503 million,
or 32.2%, as a result of lower revenues and increased
operating expenses.
Interest expense amounted to $135 million, an increase of
$71 million over the corresponding period of the previous
year. This increase is primarily attributable to interest
costs incurred on higher debt levels outstanding during the
current period in comparison to the corresponding period of
the previous year. In addition, interest income increased by
$19 million as a result of correspondingly higher cash and
short-term investment balances.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS
Nine Months Ended September 30, 1997 and 1996
- ---------------------------------------------
Income before income taxes ("pre-tax income") decreased
$546 million, or 36.4%. Domestic pre-tax income amounted to
$1.004 billion, a decrease of $617 million, or 38.1%, over
the corresponding period of the previous year. The decrease
was a result of the strike and higher interest costs as
discussed above.
The international pre-tax loss amounted to $50 million,
an improvement of $71 million, or 58.5%, over the
corresponding period's pre-tax loss of the previous year.
The international pre-tax loss attributable to the
foreign domestic operations decreased by $22 million, or
17.2%. This improvement results largely from cost reductions
from the Company's efforts to reduce unprofitable volume.
The pre-tax income associated with export operations improved
by $49 million. The continuation of this favorable trend in
export operations resulted primarily from higher volume and
improved operating margins on international and U.S. exports.
Export volume generated outside the U.S. increased by 14.6%,
while U.S. origin export shipments increased by 0.7%. Export
volume, primarily U.S. origin, was somewhat depressed as a
result of the strike. UPS expects that there will be a
continuing possibility of incurring overall losses in its
international business for the near future.
Net income decreased by $342 million, or 38.0%, over the
corresponding period of the prior year as a result of the
strike.
The results of operations for the three months and nine
months ended September 30, 1997 are not likely to be
indicative of the results to be expected for the full year.
12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
In recognition of a continuing need for borrowing over
the near term, and to take advantage of attractive borrowing
costs in medium-term debt markets, UPS has entered into
several financing transactions during 1997. In February 1997,
UPS issued $165 million of 6.875% Pound Sterling notes which
are due in February 2000. In April 1997, UPS issued $200
million of 6.625% Euro Notes which are due April 2001. In
July 1997, UPS issued $300 million of 6.25% Euro Notes which
are due July 2000. These Euro Notes were issued through the
European medium-term note program established in 1996. In
July 1997, this program was amended to increase the borrowing
capacity from $500 million to $1 billion. Currently, $500
million is outstanding under the European medium-term note
program. During 1997, UPS also entered into a series of
capital lease transactions which provided $229 million for
the acquisition of aircraft at favorable rates.
As previously reported, the International Brotherhood of
Teamsters ("IBT"), which represents approximately 190,000 UPS
employees, was on strike from August 4, 1997 through August
19, 1997. In addition, the Independent Pilot Association
("IPA"), which represents the majority of the Company's
pilots, observed picket lines in support of the IBT strike.
The new collective bargaining agreement negotiated in August
with the IBT was approved by a vote of the IBT membership on
October 9, 1997, however, two IBT local unions have not yet
ratified the relevant local supplements to the collective
bargaining agreement which affect them. The new collective
bargaining agreement extends through July 31, 2002.
Management does not believe the terms of the new agreement
will have a material adverse effect on operating margins.
Further, the Company's collective bargaining agreement with
the IPA became amendable on January 1, 1996. The Company
proposed a new agreement to the IPA, which was rejected by a
vote of the Company's IPA-represented pilots on October 1,
1997. The Company anticipates that the parties to these
contract negotiations will not be released from mandatory
mediation, if at all, until after the Christmas season.
The IBT strike severely limited U.S. domestic air and
ground operations during August and also curtailed
international export operations, mainly U.S. export volume.
This resulted in a net loss of approximately $211 million for
the month ended August 31, 1997.
During the second quarter, UPS increased its Commercial
Paper borrowing limits from $1.5 billion to $2.0 billion. As
of September 30, 1997, UPS had a $1.424 billion commercial
paper balance outstanding. Since UPS does not have the
intent to refinance the full commercial paper balance
outstanding at September 30, 1997, $900 million has been
reclassified as a short-term liability. In May 1997, UPS
renegotiated and extended one of two credit agreements with a
consortium of banks increasing a revolving credit facility
that would have otherwise expired on June 9, 1997, from $1.25
billion to $3.25 billion. This new agreement expires May 6,
1998.
13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND THE RESULTS OF OPERATIONS
The Company's current assets and commercial paper
program were adequate to support operations during the
strike. Management believes that the funds described above,
combined with the Company's internally generated resources
and other credit facilities, will provide adequate sources of
liquidity and capital resources to meet its expected long-
term needs for the operation of its business, including
anticipated capital expenditures and purchase commitments.
During 1995, the Company received a Notice of Deficiency
from the United States Internal Revenue Service ("IRS")
asserting that it is liable for additional tax for the 1983
and 1984 tax years. Agents for the IRS have also asserted in
reports that UPS is liable for additional tax for the 1985
through 1987 tax years and the 1988 through 1990 tax years.
In addition, the Company is a defendant in various employment-
related lawsuits. Each of the pending employment-related
lawsuits is in its early stages, and the Company is at
present unable to estimate its exposure. Reference is made
here to Note 3 to the accompanying unaudited consolidated
financial statements for more information.
This Management's Discussion and Analysis of Financial
Condition and the Results of Operations and Liquidity and
Capital Resources contains statements which may constitute
"forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Those statements include statements regarding the intent,
belief or current expectations of UPS and its management.
Such forward-looking statements involve risks and
uncertainties with respect to future events, and could be
affected by future events such as, for example, continued
success in the recovery of volume lost as a result of the
strike, and, as to international operations, such matters as
future operating losses.
14
PART II
Item 6 - Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits:
(10) Material Contracts
(a) UPS 1996 Stock Option plan, as amended and restated on
September 19, 1997
b) Reports on Form 8-K: The Company filed a Form 8-K Current Report on
August 6, 1997 (Date of Earliest Event Reported: August 4, 1997),
reporting a strike called by the International Brotherhood of Teamsters.
15
EXHIBIT INDEX
-------------
(10) Material Contracts
(a) UPS 1996 Stock Option plan, filed herewith, as
amended and restated on September 19, 1997
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
UNITED PARCEL SERVICE OF AMERICA, INC.
--------------------------------------
(Registrant)
By: _____________________________________
Robert J. Clanin
Senior Vice President,
Treasurer and
Chief Financial Officer
Date: November 13, 1997