UPS reports revised results (U.S)

On Jan. 30, 2008, UPS reported an 8pct increase in adjusted diluted earnings per share to USD 4.17 for the full year of 2007. Following the release of this information, in completing the company’s financial statements for 2007, UPS identified a state income tax benefit of USD 65 million that was incorrectly recorded in the fourth quarter.
The tax benefit was related to UPS’s withdrawal from the Central States multi-employer pension plan. This error was discovered by the company during its regular internal review process prior to the filing of its Form 10-K for 2007. Correcting this error has reduced adjusted diluted earnings per share to USD 4.11 for the full year, a 6.5pct increase over the prior year.
The correction has no impact on revenue, operating profit (loss), income (loss) before taxes or segment results for the fourth quarter or the full year of 2007, nor does it impact cash flow or liquidity.
For the 4th quarter, UPS originally reported adjusted diluted earnings per share of USD 1.13. The revised adjusted diluted earnings per share are USD 1.07.
On an unadjusted basis, UPS previously reported a loss per diluted share of USD 2.46 for the quarter and a diluted profit per share of USD 0.42 for the full year. Those figures now are a loss of USD 2.52 per share and a profit of USD 0.36, respectively.
UPS’s previous estimates for 2008 earnings per share remain unchanged at USD 0.94-to-USD 0.98 for the first quarter and USD 4.30-to-USD 4.50 for the full year, as does the company’s estimated effective tax rate for 2008 of approximately 36pct . On Jan. 30, 2008, UPS reported an 8pct increase in adjusted diluted earnings per share to USD 4.17 for the full year of 2007. Following the release of this information, in completing the company's financial statements for 2007, UPS identified a state income tax benefit of USD 65 million that was incorrectly recorded in the fourth quarter.
The tax benefit was related to UPS's withdrawal from the Central States multi-employer pension plan. This error was discovered by the company during its regular internal review process prior to the filing of its Form 10-K for 2007. Correcting this error has reduced adjusted diluted earnings per share to USD 4.11 for the full year, a 6.5pct increase over the prior year.
The correction has no impact on revenue, operating profit (loss), income (loss) before taxes or segment results for the fourth quarter or the full year of 2007, nor does it impact cash flow or liquidity.
For the 4th quarter, UPS originally reported adjusted diluted earnings per share of USD 1.13. The revised adjusted diluted earnings per share are USD 1.07.
On an unadjusted basis, UPS previously reported a loss per diluted share of USD 2.46 for the quarter and a diluted profit per share of USD 0.42 for the full year. Those figures now are a loss of USD 2.52 per share and a profit of USD 0.36, respectively.
UPS's previous estimates for 2008 earnings per share remain unchanged at USD 0.94-to-USD 0.98 for the first quarter and USD 4.30-to-USD 4.50 for the full year, as does the company's estimated effective tax rate for 2008 of approximately 36pct .
We supplement the reporting of our financial information determined under generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, including, as applicable, "as adjusted" operating profit, operating margin, pre-tax income, net income and earnings per share. We believe that these adjusted measures provide meaningful information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring operations because they exclude items that may not be indicative of or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. Furthermore, we use these adjusted financial measures to determine awards for our management personnel under our incentive compensation plans.
In the first quarter of 2007, we recorded a USD 221 million pre-tax impairment charge related to aircraft and a USD 68 million pre-tax charge related to cash payouts and the acceleration of stock compensation and certain retiree healthcare benefits for employees who accepted a voluntary separation opportunity. We recorded a USD 46 million pre-tax charge in the third quarter of 2007 related to the restructuring and disposal of certain operations in France within the Supply Chain & Freight segment. Additionally, in the fourth quarter of 2007, we recorded a USD 6.100 billion charge in our U.S. Domestic Package segment in connection with our withdrawal from the Central States, Southeast and Southwest Areas Pension Fund. We presented fourth quarter and full-year 2007 operating profit, operating margin, pre-tax income, net income and earnings per share excluding the impact of these items as we believe these adjusted measures better enable shareowners to focus on period-over-period operating performance. The underlying matters that produced the impairment charge, the pension withdrawal charge, and the charge related to the voluntary separation opportunity were unique, and we do not believe they are reflective of the types of charges that will affect future anticipated results. The restructuring charge reflected our exit of certain non-core lines of business in our Supply Chain & Freight operations, and we do not believe this charge is indicative of future operating results of our core forwarding, logistics and freight operations.
Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for GAAP operating profit, operating margin, net income and earnings per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the preceding reconciliations to corresponding GAAP financial measures, provide a more complete understanding of our business. We strongly encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.