8-KOther Events

UNITED PARCEL SERVICE INC 8-K Report, Corporate Update (May 17, 2005)

Filed May 17, 2005For Securities:UPS

Summary

United Parcel Service, Inc. (UPS) has filed an 8-K report to announce a significant change in its business segment reporting structure, effective for the fiscal year commencing January 1, 2005. The company has transitioned from three reporting segments (U.S. Domestic Package, International Package, and Non-package) to a new structure comprising U.S. Domestic Package, International Package, and Supply Chain Solutions. This change is primarily an accounting and reporting adjustment and does not impact total consolidated revenue or operating profit for prior periods. The company has restated prior period financial data for the three years ended December 31, 2004, to reflect these new segment definitions for enhanced clarity and comparability.

Key Highlights

  • 1UPS is updating its business segment reporting to a new structure: U.S. Domestic Package, International Package, and Supply Chain Solutions, effective fiscal year 2005.
  • 2The previous 'Non-package' segment has been replaced by the 'Supply Chain Solutions' segment.
  • 3The new 'Supply Chain Solutions' segment consolidates freight services, logistics operations (including former UPS Freight Services and UPS Logistics Group, and Menlo Worldwide Forwarding), Mail Boxes, Etc., UPS Capital, mail, and consulting services.
  • 4Prior period financial data (for the years ended December 31, 2004, 2003, and 2002) has been restated to align with the new segment reporting.
  • 5The restatement of prior periods primarily involves reclassifying revenue and expenses related to the former excess value package insurance business into the U.S. Domestic and International Package segments.
  • 6Intersegment operating profit previously in the 'Non-package' segment has been eliminated within the U.S. domestic package segment.
  • 7This change is a reporting adjustment and did not impact UPS's total consolidated revenue or operating profit for the restated periods.

Frequently Asked Questions

The main purpose of this 8-K filing is to announce and explain a change in United Parcel Service's (UPS) business segment reporting structure. The company is moving from reporting three segments to a new structure of three segments, which affects how its operations are categorized and reported, effective from the 2005 fiscal year.

Previously, UPS reported its business in three segments: U.S. Domestic Package, International Package, and Non-package. The new structure, effective January 1, 2005, renames the 'Non-package' segment to 'Supply Chain Solutions' and reallocates certain revenues and expenses, particularly those related to former excess value package insurance and intersegment profits, into the U.S. Domestic and International Package segments.

No, UPS explicitly states that this change is primarily an accounting and reporting adjustment. The changes in segment reporting did not impact the company's total consolidated revenue or operating profit for the periods that have been restated (the three years ended December 31, 2004).

The 'Supply Chain Solutions' segment now includes UPS's freight services and logistics operations (formerly UPS Freight Services and UPS Logistics Group, including the acquired Menlo Worldwide Forwarding), Mail Boxes, Etc. (franchisor of Mail Boxes, Etc. and The UPS Store), UPS Capital, mail, and consulting and professional services.