UPS - Earnings call transcript Q1 2021 | United Parcel Service, Inc.

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Operator

Good morning. My name is Steven, and I will be your conference facilitator today. I would like to welcome everyone to the UPS Investor Relations First Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. And after the speakers' remarks, there will be a question-and-answer period. pleasure the my your over now Mr. host, is to floor turn to It Relations Officer. Investor Childress, Scott Sir, is the floor yours.

Scott Childress

Good morning, Call. Earnings First Quarter and welcome to the UPS XXXX

Joining and our Carol me our Newman, CFO. CEO; today are Brian Tomé,

our in begin, subject the comments described make the federal future operating detail our the securities performance we some within address and risks of Commission. forward-looking we'll and Relations are to from SEC. reports I available with you or which XX-K website today remind Form Before filed These are that company. the other to Investor Securities in our are and the filed, of laws uncertainties, statements are XXXX Exchange UPS on These and statements reports, the we want when and expectation results for

charges refer UPS with website. The measures reconciliation financial which and For Investor of results, the of Fund, of at Plan $X.X by States or of billion. an the pension $X.X as UPS to the million. adjusted Rescue mark-to-market mark-to-market the Central of of along was results the these benefit first our comprised GAAP of American well the the plan pension our Act, as driven our and share, billion available other XXXX, pension the exclude mark-to-market the after-tax liability quarter the Relations Unless net will the by IBT benefit after-tax elimination include benefit current comments a on sheet Together, primarily are webcast and liability enactment of of an Pension benefit today's $X.XX call pension transformation diluted Pension balance to transformation charges. remeasurement related and non-GAAP per other resulting billion, of The $XXX otherwise, $X.X reduced discount rate. stated

questions we will our remarks, via take teleconference. from joining Following those prepared the

possible the enter zero allow one wish we to your one question, so to only If that on question, phone queue. a to many Please press participate. ask may as then ask you as

may And the the over opportunity for ask You I'll turn to additional Carol. to question. queue call the rejoin an now,

Carol Tomé

you, everyone. Thank good and Scott, morning

more now drove a deliver I serving we and XXX,XXX our to the and our more how for change live all want which COVID-XX enormous UPSers business. to for pandemic, communities, conduct to are and We into what than thank year customers, each other. than matters continuing

by year rose by profit Consolidated at great Looking first exceeded to an last quarter, to and team. the our $X.X driven XX% billion macro from our and $XX.X our quarter billion. the in execution environment XXX% results operating expectations improving revenue grew

segment our profit reported International Freight. of record performance strong record in our a our first All double U.S. quarter segments in record Chain and operating profit We quarter. in the in operating margin digit first margin and segment, profits delivered Domestic operating Supply business and and

our Innovation bigger in our shown People our under is team framework. advancing First, results, better not Driven As strategy the Customer Led,

in we've our capabilities about the as capture the businesses and market matter and taking the hold. ground operations U.S., our Digital network, make up enhance and to year weekend the speed Program Access last these are to we while year improvements this continue known our and made DAP healthcare. expand customers discussed, First building that opportunities Customer small using capabilities sized those to best the As medium to like and is In most

piece with for of certain the larger end improvement year. of quarter. up other in quarter. quality new added accounts, on DAP results are outpacing this fact, well we the SMBs, the by the $X customers U.S., growth XX.X%, total the XX.X% revenue billion quarter, of our are Domestic hitting rate way high to in and first nearly actions average In Further all-time DAP target XXX,XXX revenue per and revenue during for This delivering the an we reached businesses, consecutive platform daily first our third our our growth mix volume including U.S.

our our digits leveraging SMB And all increased moving were volume at of by International daily solutions the international grew Export markets. more Looking XX% even first average segment, we we expand volume network. in was able customer regions, elevated commercial meet as double key other see XX.X% and in up agility ahead the to to and we volume quarter. demand opportunity DAP

Supply and our Freight Chain market quarter, responded the to segment well During demands.

our to this and business Freight track the of with on the TFI. commercial We we relationship by month end are our forward new UPS of complete look divestiture to

the the receiver improving we a customer improving that customers. the and Our both We've our words, the other includes journeys number experience are focus customer from on points of as end-to-end experience, addressing. candidly in to the pain shipper identified

Let Until me a recently, paying UPS was online give a an bill example. experience. customer poor you

our easy it SaaS industry particularly will we This new pay solution Once customers. leading for a billing our the global SMB old bills. deploying So replaced in make our which manage $X for million system customers application, to be first quarter. will with homegrown helpful and we implemented, UPS globally fully nearly their began

the by our Our global Customer digital network. First experience aspiration smart logistics powered experience billing is aspiration. best one to this A of provide aspect is simplified

within occurring Chain Another Supply our the and segment. is digitization that's Freight

Investor place of on our we is quoting. during the We'll to driving reinstating why improve efforts our value customers our more and That's service to We high telephone from new customers' online the across the market talk for that digital chain. based simplification our about the June know led reliability by guarantees Day. entire moving are experience our We This value network. UPS Analyst quotes experiences U.S.

count world. the destinations. are vaccines, to carrier it for that intend technology Worldwide and services and us distances expertise, ice on shippers receivers Day delivery. origins and services over to to for Air And kits can We be and COVID-XX all great global as and reliable our enabling Express the network move vaccine, dry Next relates around

where service and matter digital million premiere as and UPS deliver achieve about is efforts combination demand service environment most an in X.X Led economic The shipments, industry discussed, countries important reopening supply, the about government an than being more XXX more industry and utilized industry should This million being is customer to by delivered positioning and we Brian spending our we've our market to doses Further, to continue outpacing remain are that is GDP provide expect remarks. of will time for to U.S. we've creates the friction foreseeable this our future. of leading levels week, are growth. dynamic consumer delivery. XX.X% our programs. boosted last remove higher, us stimulus experience are of demand the forecasts economies imbalance People supply in future for vaccine As revived on and part his and territories of cover capabilities the firm. pricing outlook strategy. XX

a the success people culture. has Our the in of quarter in of customers. Every UPSers. to of commitment lot supporting first UPSer and new strength due a We've our our our play was to role the hired

movable we training that road. taking mobile So employee safety safety have We've training. U.S., provide to rapidly we it classroom and program the by the on we units country. the created and These deployed within can trailers. across In be truly on re-imagined learning need focus lab know a units our driver's

are with training other mobile difference. a technologies, vehicle safety along Our making

this and programs safety globally advance to far we our around will frequency employee world. continue we've So year X.X% improved the accident by auto

Driven. Moving to Innovation

invested years past we in open the several new introduced facilities. new Over automation, and have technology

in We starting and responsive are the be more additional The reap productivity from be in benefits demand now to we've investments. changes to network to us efficient. gained these more flexibility enables

all nearly do. In a virtuous improved fact, in we operating We the more but make compared to quarter first in have major to productivity year a transformation last categories, aim not just project. productivity cycle, to

excellence, focused here conference. during about more share and our we'll laser are details our on operational We efforts

Let sheet is me of take on to which and rating. principles, strong core moment maintaining five a credit balance a one our touch

area strides moment. reducing the great have leverage in share owner's a improving financial We and made the will share equity. by on this this Brian details in

upcoming look And see ahead. Investor and details to strategy is more I'll with gaining traction Day. Brian. our Analyst and to even call sharing now over the opportunities Our you the we turn We at forward

Brian Newman

comments our will then on Thanks, the Carol share cash I'll economic returns, new next up with law. and review pension I'll today, lastly macro reform our areas and with a my good results, and starting morning. and quarter wrap trends, outlook some In on four first I cover comments

is Okay, expected X.X%. support to quarter macro to GDP improvement is let's GDP in the continue up Global to X.X% over and indicators economic start with how is fourth unfold. it be quarter in shown XXXX. a first XXXX. U.S. the recovery of and Key to up significant strong have Both finish projected the expected

three factors. on Forecasts are moving higher based

global First vaccine is the with rollout. the progress

reopen. encouraging. the to XXXX. for also projections Full of grow to to full U.S. U.S. X.X%. grow the IHS currently favorable time following for industry is U.S. we up most X.X% U.S. grow to market year ran is and X.X% orders, a of which basis. and expected economy commercial year Carol now According years expected sales a ratio, capacity as the retail from is electronic to on the company are low about industrial passage And down of prior for the XX.X% U.S. and We grow and and is our to imbalance the outlook sales third COVID, sales mentioned. sales to recent to when between to forecasted view for of to inventory X.X starting Second is growth and X.X the demand mail stimulus. are GDP averages, historic government is use production anticipated for at be global the are online and a year as proxy is XX.X% GDP these continue three expected full year-over-year side economies expect a the in XX% The In number between nominal XX.X%

margin consolidated XX% per XXX% billion, higher Operating to our year; last the profit expanded total best revenue consolidated performance; first earnings in up quarters quarter to last our XXX% operating period billion. was share which and $X.X $XX.X year. margin same diluted consolidated than is up from Moving XX XX.X%, increased $X.XX,

productivity total day. million take segments. XX.X% Average In combination look a daily to our of volume network. a a due the revenue increased our per let's our U.S. success of packages the running efforts to domestic, initiatives at XX.X the of Now year-over-year quality impact and was

turning platforms larger March to volume including daily increased BXB for in weakness offset mix residential our and shipments growth, be our growth other average X.X% XX% year-over-year. fourth late and ground quarter remain XX.X% Additionally, bright quarter positive. strengthened BXB average consecutive Conversely, air positive. Overall BXB SMBs increase. for delivered the and automotive year-over-year. volume grew reaching BXC and segments. unable Both products. total continued customers accounted of yet accelerated SMB commercial XX.X% spots in volume volume the to and were with Healthcare shipments daily mid-single-digit declined they Total across

by piece. surcharges. the generated improvements efforts, XX.X% and growth U.S. volume growth by revenue average which quarter, were revenue extremely revenue Domestic demand-related $XX SMB and pleased volume We of up with quality driven strong average For daily our were in driven daily per billion,

As piece a reported ground result revenue up of with our per per year-over-year XX.X% grew actions, XX.X%. revenue piece

by the Turning Cost up non-peak growth, fastest frequency, to on XX.X%. network rose And positive revenue accident expenses enabled outstanding peak per operations. Carol's the This and quarter growth planned and operating fourth an self-insurance in training, the our through two into factors: ever quarter, efforts across unnecessary back costs; technology lower-than-expected did his notably comments Most control costs to ground our analytics job were to team was about casualty increases. prevent transitioning enabled make Nando primarily which us productivity initiatives and building significantly benefit expense and and piece first from reducing improvements expense in costs safety X.X%, weekend quarter. incidents generated network. above leverage. driven additional the

segment delivered increase margin operating So last billion $X.X year, expanded an profit, to to $X.X compared and domestic in in or summary, billion the of operating U.S. XXX% XX.X%.

in segments and customers strong, with International; capacity our network over volume more larger global XXX-X demand. XX% Asia saw demonstrates both to of support To Volume our capacity flexibility was more of terms added with Moving performance over our total the growing capabilities. match customer average the air results even daily of XX%. flights and excellent, XX.X%. We outbound very demand, up because growth were across we to growth SMBs and with

year-over-year was basis. volume exports up grew daily driven were Asia volume BXB export and was retail, a XX.X% exports XX.X%, and up by total overall average XX.X% XX%, the while XX.X%, automotive on up sectors. Europe BXC high-tech grew

year-over-year. strong regions all piece X.X% up piece cost billion, per We with For leverage the operating over XX.X% generated quarter, XX%. XX.X% per International to revenue up with revenue growing in $X.X revenue quarter was and of the

For $X.X an margin and increase the expanded XX.X%. billion, delivered XX.X% International first of operating of operating quarter, to

& Looking segment was and generated Market billion, and the business Chain margin. increased had at Supply $X.X revenue and profit demand XX.X% growth. nearly and profit to units Freight; elevated all record operating revenue

$XXX way, and the as near air by was Asia from biopharma bottom-line of deliveries. outbound lane the discrete driven was of at implantable Growth expense. margin rate and came Supply led $XXX rest top strong and on as million profit quarter, well Forwarding X.X%. activities broad-based we our to growth during $XXX and tax And pension the health the for generated statement, million vaccine while COVID-XX and Other operating first for Chain lab and of income device the highest million, income items. In effective ocean. the the all ever. Freight biologics through delivered Walking due care in quarter lastly, XX.X% & growth providing interest medical operating service customers, was perfect both had

let's to and returns. shareowner Now turn cash

bottom was lastly, $X.X $XXX $X.X UPS in billion line cash strong from distributed drove a XXX% dividends. this for And on We period the in focus in cash year, Free billion, quarter. cash flow increase results the has generated million flow operations. year-over-year. so far Our

revenue XXXX. and We we there other this not earnings time. the guidance uncertainty the so at for outlook ahead interrupt recovery, diluted that pandemic per could our related are to is factors share Moving still recognize to or providing

expect we Freight and second billion. our expect UPS end, reaffirming that capital capital to quarter, we allocation be we close of the plans. mentioned, to are sale the Carol during To about expenditures As $X today, still

repayment. We law. this year repurchase effective of long-term billion early March for our plans in XX.X%. we expected American on in no repaid Rescue and $X.X the XX, of quarter billion have debt April another And first the of repaid be since time, debt, rates, around signed to billion pension is reduction $X.X to billion at We the to maturities pension eliminates our the debt in through in And, The certain related passage target achieving $X for in rate the shares and XXXX current tax Act the remeasure result remainder Plan multiemployer have significantly our triggered into Fund. year-end. plans a coordinating Pension liability of balance becoming to The This Central IBT was insolvent law the at turn, sheet XXXX. law from potential protects which UPS was States our discount liability. us Pension $X.X increased plan in benefits lastly,

is Additional information Appendix presentation. of section in available the earnings today's

obligations Investor executing lines. As you are June you. And our moving Analyst sheet X and principle, significantly business our please more is a liability the performance, core our our laser-focused on billion. sharing positive The look Thank have a and forward our to Combined open pension have repayments with operator, ratios and closing, direction. reduction debt UPS leverage mentioned, strong are strategy improved. absolutely at we a balance In reduced $X.X in and Day. we long-term by Carol improving in with

Operator

Thank you.

come now question a Our will line We Morgan go Ravi the question-and-answer Instructions] conduct Please first from Shankar [Operator session. with ahead. of Stanley. will

Ravi Shankar

– X.X? the saw get X% the savings the base some on that cost you. morning that you've Analyst little cost Good Kind Can of of the the there? June that color and what buckets in Carol of And program Thank ahead outlined are if is Thank the categories everyone. looking a X.X to Day. transformation kind up you. can of going? you transformation to of share part how you more Xth the

Carol Tomé

and outlook where forward our give Analyst perspective. will for Day, looking your Ravi, on we're to doing more color question. a what the much forward-looking we including you June Investor Thanks, We're from productivity

from an think see our virtuous about event, quarter. to the results And words, we from other to want as we a in actually starting productivity, really a you first transformation As move event in we're cycle. away that

We at in the about operating nearly delivery. think in look hub really improvement packages when in about had in our our in our operations. every business, saw in productivity We per we category. And I our hour. in per you performance, our it's theater, sort, productivity packages drove If productivity hour operating

improved route technology. ORION Our driven large our density year-on-year, by in part

you we we at going the path year, were beginning more you what drive out at We're business refer in the to It's in And well lot productivity transformation productivity million and the Investor we're give taking on told $XXX as non-operations Brian? in the we're to What One of So Day. that that to down to to regard. X.X. a our expense color area. of relates that doing our more you non-operations. comment

plan by We that year. the on end result and we will are the deliver of

Operator

the Please come Allison Our question go of Suisse. Credit next line will from ahead. of Landry

Allison Landry

Thanks. morning. Good

domestic terms the in balance XX.X imply QX of trends margin QX applied full QX normal in to if of of Just year to the sequential I margins sort to year, segment the range. a seems XX.X% for so the

is if mean, costs Thank the of about of that headwinds way And potential might what the to mix the right or the sequential I you. that be quarters a some curious, it? So year? drag think remaining during are not,

Brian Newman

Brian. It's that. Allison. Hi, take I'll

taken to domestic November, your future. costs it this costs the good get So out U.S. say business. of I in applying those from pulling year, Nando And history the very quickly. of the and question team that a planning time to operating the job one for about the a quite reason the I December peak be did out quite is that to a careful historically is we've bit would caveat

So only growth was was XX%. the over RPP CPP and X%

this We're to history just is spread. the be would careful the point year. eight expanding domestic So, extrapolating I future. you confident an about had margin

Allison Landry

you. Thank great. Okay,

Brian Newman

Allison. Thanks,

Operator

of Chris Citi. the of Please ahead. Our next go line will question Wetherbee come from

Chris Wetherbee

I morning. Good pick up on last is could that. productivity point, into Maybe thanks. that I so CPP Brian, going plus X%. Hi, Yes. guess

with as level sustainable going You going going forward? is the of but that cost obviously did How cost level well. to with pricing environment, job you of Obviously, a control? to really good piece on we are understand increase that cost be decelerating, with controls volume per able maintain what's

Brian Newman

Thanks, labor, those returned to Chris, out accelerated able of lot which on do a the the were the reasons. of CPP the of – were we limit rentals, X%. to Chris. temporary basis, an the Look growth taking to we

a there It’s As lot goes and Carol is mentioned, non-op operating. combination our of into a costs. that

leverage going to more to going X% We’re that We’re Is of throughout the going drive in continue system. to June. about the have number a forward? conversation

So confident I and the talk leverage about as going continue in we much future, with in were to performance won’t the but ability our quarter the pleased operating forward.

Chris Wetherbee

All right. Thanks.

Brian Newman

Chris. right, All

Operator

will of Tom ahead, Our from go sir. next Please the question line UBS. of come Wadewitz

Tom Wadewitz

Good on Domestic Yes. another for question you just margin. morning,

think to first been us was flat, I than debate. a you do a with that's I lot BXB, improvement? strong. results. news you about think that's important of work key you’ve Pricing but of gave So year-over-year that better seen. guess, How for obviously, in were the what drivers good point And was the quarter most

on drivers, of I Thank domestic think how you most got And key you. some program. important drivers whether think you of the how or have do think million But about of those the was those in key the of do whether you're cost you're takeout you runway kind left just kind you early $XXX improvement? much from what year-over-year?

Carol Tomé

you. Well, then turn start, over I’ll to maybe it Brian, and

the not that first in States with daily average our you And network. XX% better, that's growth saw the of United volume quarter talk our about optimizing driven the really the over hold framework. in you’re us large heard bigger You've take line, about And growth by XX% in to bottom growth you a And have to small we RPP in contributor was in and did when well, that. quarter. and going the the RPP, medium-sized just leverage a businesses. That

too, laying candidly the network So we optimizing leaning really saw for those customers offering, for is to our those winning growth a end-to-end in our present in going and us, two the opportunity health that network great forward. SMB are care, the quality future combination. XX% outside with like the with that – revenue We opportunities the business. the them. growth, Coupled International opportunities of better our United same States growth to That’s the growth

value in network, equation, of leaning big big optimizing day, cost equation attractive areas as the to doing have have a will productivity to run virtuous forward, that a we’re winning to that’s the it and what and those part from we And out to going want but in productivity a well. are should part So a most those a areas better business. us value was be perspective. growth be Every you of certainly We of here. the cycle

that about and You casualty quarter. the the real might casualty had impact just in talk

Brian Newman

year. saw we’re casualty. $XX to million we Tom, Yes, focused accident. on was so a It And benefit the in really about prior relative

to of mentioned, some Some the challenge auto as was QX. the industry. been leveraging last accidents has that at lapping after But in we’re X Tier Carol go severity telematics, that technology, and frequency

and the systemic arduous Additionally, to comp, that’s and workers’ our turnover really teams the driven goes piece That’s that. attack training effort about casualty. other going that into are by

So demonstrated we’re don’t seeing improvement. overnight, but those turn trends some

Operator

Please next question Amit the come Mehrotra ahead. Our of Bank. line go Deutsche from of will

Amit Mehrotra

Thanks.

million I initiatives just, the Carol, to just Just that non-operating in SMB point, relative then UPS the key you have. productivity the savings? quality of on so productivity, And think, was on number and net revenue growth is the what domestic $XXX to SMB

lot invested in fastest obviously time in You’ve transit, a ground ever.

versus decide main to of in competitor you issues guess. delivery these and Just has the cost intended, service or context, Pun if And in that USPS see what Ground direct Sunday go you do further see up Fastest route? cost injection need outside postal the absorption your something I fixed to invest in of that you kind like if the investments that wondering Ever? stacking products just after how

Carol Tomé

Yes.

the I’ll the part latter question. take So of

is investments speed but customers year the made no are finish that line to responding our to we here. there last transit, up our So in time

in we transit. continue invest to time in So

We are our deliveries. expanding weekend

October demanding XX% our through to our of the was the to of we’re We delivery thing we’ll Investor our weekend our are Day. UPS at that know allows increasing because go quarter. which will that. But let increase us details get was about customers U.S. this about by the coverage to we’re the June Saturday what redirected you in and doing, population Our the growth of product of SurePost the But that network, love delivery density. XX% SurePost product. ADB into is SurePost first cool back XX% because

So to great how that’s way about grow a think Sunday. can we

we’ll middle as of expanding So We productivity. week. going see is expanding the flatten eliminate to of great about in the some the in network the really if of we’re the really in don’t of across have business. our out well. can you the we in causing talk our deliveries days time enough in our how week some we deleverage Conference, And lumpiness some demand, productivity the network be forward lumpiness the look Sunday the because And get can we Investor this morning, actually we but to we middle that by the to June seven the network can

we’ll you algorithm through walk So Day. at Investor June our that

Brian Newman

million of $X we million That’s we and takeout, will $XXX out, the take next plan. roughly first which the $XX is in our spent start. on quarter, exactly took There in on be we year. out. a committed $XXX And of In the topic non-op XXXX million cost more billion

voluntary separation about was to participated headcount have So VSSP, of X,XXX that tracking the the program. driver in associated. we’re The that deliver severance million that $XXX big

million. committed $XXX on-track to and the we’re So

Carol Tomé

capital-light, about cool thing the network that the leveraging it? seven-day isn’t it’s is And

Brian Newman

Yes.

Carol Tomé

We’ll like package some Yes, have have we’ll it’s We’ll capital-light, have into more more drivers. pretty some I cards, network. but put to expense that. some to some more the have operators,

Brian Newman

investment. of type Different

Carol Tomé

on Yes, It’s like it’s different item different. statement… income line a the

Brian Newman

right. That's

Carol Tomé

expense a of can get lever we off than on coming depreciation It’s all the right and day quality. expense revenue long operations capital. the …rather to that

Amit Mehrotra

on good Love Congrats Appreciate the quarter. it. it. Thanks, guys.

Brian Newman

Thanks.

Operator

question line Fargo. of go will next the of Wells Please come Our from ahead. Poliniak Allison

Allison Poliniak

Good morning.

think internal grab on a the understand Just that of initiatives out want more SMB internal to there? how But you space year the think the to in markets? International, thoughts to on maybe International. efforts International in those I days. macro. you specifically of early through would bit benefiting called white evolving you touch in from But the more Any clearly trying International, expand

Carol Tomé

Yes.

States, growth We’re we United of creating what from business the on Access could have the into Digital scratching International in Platform. what which a without capital is the perspective we a just do surface lot putting by the

about aren’t very We there outside International the really U.S. We’re this introducing in that platform But want sell States. into our through our excited customers businesses. today. to United the

that to we’ll But Allison. So kicking And Conference. the Scott can investing of June talk be number I are major big about other a this underway, there efforts a way. have going to keep hate we’re in but to Investor the all down at June,

bit, color. little a for we’ll you type hold give and So more

Allison Poliniak

Great. Thank you.

Operator

go Our ahead. next of question will Please Research. come from the line Scott Group Wolfe of

Scott Group

thanks. Hi, Morning.

about to So ask of some drivers. revenue the I want

positive, just funky us April International? and so second meaningfully BXB BXC volumes would mix give going you U.S. Maybe think, can forward. the some with should and be about thoughts thinking going gets And how trends? are on BXB, quarter, volume overall just volume you BXC right, the forward. then that, in the So you And

So higher you. growth that going the even a on drive does RPP forward? year-over-year Thank basis

Brian Newman

Scott. Thanks,

in it. From perspective, good down take comping I’ll a a to quarter So is your and terms BXC the second year we’re trend April BXB. XX% BXB, last start. of off in point And about

of it would expect down in quarter month of actually come we So In X%. the first the back. but the U.S., side March it X.X% to was the up in was still business the commercial

side first were domestically. quarter. in it the there that back the of was So BXB Internationally, signs plus life coming we on actually XX% posted

believe give our XX%, residential in will than as next another the more think the U.S. and about So commercial so the down back the that'll be is we come business the of side in quarter, density the attractive our reason that comps positive. commercial side us to side, obviously

Carol Tomé

think And expect revenue than given the volume, the as faster build the I volumes. just and of grow your it's model, to funkiness you just important, year-over-year comparisons

Scott Group

you color volumes, give overall color; any be have can are would you BXC do great. volumes up, Any down, down? But up, us

Carol Tomé

BXC volumes are up.

Brian Newman

are. Yes. They

Scott Group

you, guys. Great. Thank

Brian Newman

Thanks.

Operator

of Our next go the Please Bank Ken will of Hoexter come of ahead. question line from America.

Ken Hoexter

Hi, Congrats morning. good great. and

little a I clarify Carol. maybe just growth. there, that So last just comment bit that guess, future on to

expecting and of that – the despite Ground to bit. International for your still on the positive is given BXB thoughts, the growth rebound and BXC a focusing starting still the Maybe kind that or because you're rebound? still So growth there Or to that double-digit you last point. And lockdowns lockdowns? at not of the just all Just growing then yet against clarify in of are Europe up rest XX% Export more year? – see seeing

Brian Newman

maybe part handle first picking comment, can in second. expect take on the but the we quarter, I'll ADB certainly Ken, From perspective, maybe the the up last growth. saw just positive XX% first a growth not and growth, positive So Carol we the yes,

Carol Tomé

as all in on side, we about, of the Export talked geographies And up the International was United outside States. our business

our As business, export our XX% our it is biggest relates Europe over the to of European volume part outstanding of in had Export export the up we business. itself, XX%. making And business

might really the interesting seeing U.K. what we're Europe to comment on just International really I matters our So in performance. the U.K., it's

strong. quite is business U.K. Domestic Our

alone. intercontinent. disruption, U.K. But export not Brexit to candidly, through some out to tried work intercontinent. we’ve work Brexit business that had the Export of of U.K. has We're the disruption, is there's the Our through. outside been great, Everybody to the

Operator

ahead. of Please JPMorgan. from come line next Our question the of Brian Ossenbeck will go

Brian Ossenbeck

question. Thanks good taking for the Hey, morning.

positive. mentioned starting back of bit last It density a the go I productivity turn sounds the Clearly, a a things a metric moving to know, of lot are really a wanted hard delivery to was other on. to headwind. is for you quarter, second. is to like This improve. mix corner Just

So be can stop it, think you that density just and it's care type take that more stop is something mix? you mix appreciated. expect what independent you on you do would of Or – less what density residential Any that of of about do is have? thoughts to about that can business going you improve and

Carol Tomé

and for the quarter third it last improved Sure. year-on-year, If we was look at year. delivery but both from slightly the quarter, density fourth down of

control don't want to or mix a on We change the part just say. our delivery be So the change. good. want the we density. rely to in Clearly, destiny should mix trends sequential that's I to of of density improve But are

delivery got underway pilots if to pilots our Investor of we those we've so June can at and we'll touch Day. some improve And see a density, of number upon

Brian Ossenbeck

it, to you. Okay. Look then. forward Thank

Carol Tomé

you. Thank

Operator

Please Our from line Jordan come next Sachs. Goldman question the of Alliger of will go ahead.

Jordan Alliger

I guys sure it little price know place. which you I'm the all it, core in still Day, discuss that on you And expected? hi. And maybe of renegotiation room profitability. on the revenue you is part as you helping Yes, how contract on going where are are talked Thanks. do in mentioned stuff it aspect, have I think Analyst process? you'll far a touch bit surcharges think about I Can the is have? you Is but the much quality? through, how Mix

Carol Tomé

And our we So through negotiate have up have contracts those year. for a very a matter, as challenging contracts through managing renewals demand Kate every course, that, of up environment. this renewals, contract masterful come we come number team that those. when done team, in for of job a renewal longer-term and of And those

Jordan Alliger

the – you And going Is it there certain that? two, of around three-year through a terms would time any of contracts? is ideas in So frame process like a runway?

Carol Tomé

never year, ends. come staggered are a have for maturities. number contracts there because I we up every of that It mean, renewal

virtuous this well. I as a cycle is So think

Jordan Alliger

Thank you.

Operator

from Please question Our next come of Schneeberger the Oppenheimer. line of will ahead. go Scott

Scott Schneeberger

there's going you of the Thanks a please like International. little very vaccine a bit sounds momentum much. Carol, could on It elaborate lot distribution?

Just curious magnitude? the of program and the about the profitability characteristics Thanks.

Carol Tomé

think a can product, health includes vaccines. which talk care is And business to to I the very of business, broadly health nutritive overall but appropriate it's about me our we about the profitability our for talk Well, business. care don't

has the a had principally top of that the ever. we commented, label UPS performance Brian as inside. to attributes battery on vaccines, money As label best top appreciate, do value-added line bottom-line Premier goes is can the a vaccines. of and make the because you package. We The special on

delivery. So that time we’re precious that and the it to our track throughout make and package want on-time get package center XX.X% sure we to can stood able dosing it their We up And to to sites a watch is that network. network. these throughout wherever we vaccines, on they command do with wherever is are

a to by value there’s is defined pay add clearly, customers So for. are and value what willing the

profitability helps understand the that segment. of that you So hopefully,

Operator

go will line of question Cowen. next Helane Our Please the from of come Becker ahead.

Helane Becker

Thank time, everybody. you for the

pension. this is go of the all does into for funded you pension green bring XXXX? questions for year, the your of on does due And the yellow fully XXXX. end couple What pension and And now? status? XX% mean funded a to Brian, that I on the were Just change that – to you the changes the contributions at think on plan – reds your

Brian Newman

combination, for yes, So, billion. green. of Central Helane a liability measures go we benefit most the State our $X.X The saw into was of reversal

to billion, had was combined remeasure at end $XXX the also the of million. IBT with close another the asset plan $X quarter. the That returns We to

the billion. So $X.X that's

The So actually that's liabilities reduction will us. be the XXX%. funded in IBT funded plan, a status, at for

going P&L base, forward, asset a from about forward. that's a we'll going on a basis $XX cost aside the million from a And see benefit So positive. quarterly P&L reduced perspective, the service

it sheet on balance funded when a both impact status, as benefit. remeasure liability a we rates. well as discount we as So that far based as P&L And update has

down, the up moves and clearly, for that So was liability moves favorable us. but

Carol Tomé

its plan. XX% is Brian, I the XX% pension think, number, number the all relative for [indiscernible]

Brian Newman

specific, For all pension plans. talking Obviously, I yes. was Yes. IBT

all to still across pension three close we're plans. So XX%, Helane,

Helane Becker

much. very Thank you great. That's Okay.

Brian Newman

you. Thank

Operator

ahead. come of will Our Barclays. of line Oglenski next go question Please from Brandon the

Brandon Oglenski

question. morning, my Good you thank everyone, Hey. and taking for

steal I for don't to call do want meeting, your Brian, a the analyst So, but we here. thunder have June

changes explicitly here, the talk ahead, do You of cash capital share about with going you of especially lot repurchases these have now. and pension you guys priorities no said as on So a can side?

going you thought talk process So the forward? through like can

Brian Newman

Yes, happy to Brandon.

So our thought process principal hasn't perspective. from changed a

of supply health perspective. will business. the in Obviously, And type the of those we’re putting to investments form The in OpEx we're domestic allocation just the in going the business growth in businesses. not from first invest returns, and with investments be and take chain to care, capital and continue an international of new capabilities CapEx. that SaaS improving are will the into There

we'll dividend. conference. June in discussion committed We'll do the We're to the capital a that. So have

And want flexibility which on. Carol have forward. the obviously, we're don't front But making that don’t run evaluate improving I said we'll and sheet, currently. discussion. to last that to as any call, on then good balance shares continue look that we strides So the repo, plans share of going And the to repurchase

Brandon Oglenski

you. Thank

Operator

go Our Daiwa. ahead. Nathan Jairam line of next will from of the question Please come

Jairam Nathan

my Hi. question. taking for Thanks

I last your to new with wanted thinking competition others. and So the regard just DoorDash with understand companies to some mile Uber, like

competition aggressive have have So do you pretty the enter and last see companies last noticed especially second the to use coexist mile the to and as we USPS side price here, yourself, been and these some UPS industry, on markets. these

wanted just process understand thought the to kind I So here? of

Carol Tomé

doing them kick the are And piece a Yes. capabilities to that to describe continue are the when that Long one to to headquartered enabling most down Investor can gone because the And competitive chain. or pie. our headquartered to by wants D.C. the going the your time matter today, the be matter Conference that we're investing our not customers to And more time, talk there – we but we're are on offer serve. we that I'm road sorry the players in hopefully that wasting job June to set capabilities investing customers of are in we in without that to days want services to again, those as the most. Memphis want going to everybody supply at you and about we we of are out coming the little and And the is headquartered Coast. West our lots Washington, eat, into in keep the those those that pie the of

Jairam Nathan

you. Thank Okay.

Operator

line have follow-up a Markets. of KeyBanc Capital of ahead. Todd from Please We the go Fowler

Todd Fowler

on morning. about Hey. Great. to – Thanks care big SMB you opportunity quarter. U.S. question. taking the Domestic It for like really sounds the contributors health and Can kind Good that within opportunity, talk this longer-term the were you're with as balance growth you the focus growth about SMB where how your existing initiatives? progress some between in at think those the business your accounts healthcare? And and we do of legacy with Thanks. that then in of

Carol Tomé

care first health which to take grew were very desire which And with and SMB if large they retailers. enterprise at many our those on does have growthy. large mid-teens. we quarter, not I our focus much those customers, appreciate are look we large the accounts, enterprise Our relationship very accounts, away In they grow the

So compared against. we were that's up very growthy to what

we improvements; that on we and to make But well. can customer continue can experience where in will where and XX an invest experience we customer are improvements, And based June discovered we're looking at about customer So really journeys, stickiness end-to-end our have enterprise – as Day. based more get customers. true for are And our SMB with as on as those those we'll those customers. that Investor journeys customers at they our for feedback, talk

Todd Fowler

Thank you. Okay.

Operator

of line Bank. from Amit follow-up a of have we Deutsche the Mehrotra And

Amit Mehrotra

for follow-up. Thanks taking Hey. the

that to related Just SMB.

is SMB, a but if a that. quarters And you're I I willing it's business XX%. Domestic can update I base. lot, on your maybe us given a of don’t a little obviously, think growing because, Obviously, few ago, on revenue, Amazon just percentage as talked is to growing smaller customers think, I'm your big discuss off Amazon if if about largest. us than it percentage of was do – this, Carol, you discussion, topic that you what that's faster know Wondering you was to but maybe what enterprise the of update a a And bit? of SMB wondering could your

Carol Tomé

is the Well, tell as percent of SMB total XX%. I'll you a

wait delighted year, nice think of We're in And we with so So do to a that. I end at we'll every there. just disclose Amazon penetration that. shown we've the increase

Amit Mehrotra

right. very Okay. you Thank much. All

Scott Childress

time go, we before one question more for Stephen, morning. probably got we've this

Operator

Alrighty.

ahead, of go Our Please sir. final line David question Bernstein. will the of come Vernon from

David Vernon

the success is about initiatives? Are good of could volume of to on bigger on revenue result operating not degree at a churn the see you're Hey, pricing customer And commercial morning. date you me decent Question to starting a and comment quality as any side leverage? better for the growing in. house. Thanks in approach your on squeezing based rethinking you whether of

Carol Tomé

is see a in to expect coming that to When a And retail. their think that delighted we're that and way, it meaningful perspective, about and business, commercial we we our the us. back. start largest segments we for business a open the love be come commercial stores, from retailers we as back great serve to segment So would

continuing forward to commercial the we coming economy So back our as well. to business recover look and

Operator

I'd like sir. you, for Childress, over Scott back remarks, Mr. Thank to host, to closing the please. turn any our floor

Scott Childress

you our have concludes call, hope to joining and great This we a Stephen. for thank you, day. and that Thank us you. want everyone Thank

United Parcel Service (UPS) 27 Apr 212021 Q1 Earnings call transcript