Management uses these non-GAAP financial measures in making financial, operating and planning decisions.0%Total U.67 $ 1.S.4%$ - ,764 6.01Year Ended December 31, 2016As-Reported (GAAP)Defined Benefit Plans MTM ChargesImpact of TCJAAs-Adjusted (non-GAAP)Operating profit: U.6% 0.27.0%Fuel 817 638 179 28.08 $ 23.29 -0.27; Adjusted 4Q EPS of . Domestic Package$ 40,764 $ 38,301 $ 2,463 6.Consolidated Balance Sheets - December 31, 2017 and December 31, 2016(unaudited)(amounts in millions)December 31,December 31,20172016ASSETSCurrent Assets:Cash and marketable securities$ 4,069 $ 4,567 Other current assets 11,479 9,282 Total Current Assets 15,548 13,849 Property, Plant and Equipment 48,726 43,674 Less accumulated depreciation and amortization 26,608 24,874 22,118 18,800 Other Assets 7,737 7,728 $ 45,403 $ 40,377 LIABILITIES AND SHAREOWNERS' EQUITYCurrent Liabilities$ 12,708 $ 11,730 Long-Term Debt 20,278 12,394 Pension and Postretirement Benefit Obligations 7,061 12,694 Deferred Taxes, Credits and Other Liabilities 4,326 3,130 Shareowners' Equity 1,030 429 $ 45,403 $ 40,377 Amounts are subject to reclassification.61 $ 3.S.S. Mark-To-Market Pension and Postretirement Adjustments We recognize changes in the fair value of plan assets and net actuarial gains and losses in excess of a 10% corridor for company-sponsored pension and post-retirement obligations immediately as part of net periodic benefit غير مجاز مي باشدt.2%International Package 2,499 2,469 1.0%Total Other Operating Expenses$ 23,755 $ 20,669 $ 3,086 14.45)$ 5. Domestic Package$ 1,264 $ 1,338 -5.67$(0.0%Average Daily Package Volume (in thousands):U.97 0.4%International Package3,7533,33512. 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. Domestic Package:Next Day Air $ 19.04 $ 5.Detail of Other Operating Expenses - Year to Date(unaudited)(in millions)Twelve Months EndedDecember 3120172016Change% ChangeRepairs and Maintenance$ 1,600 $ 1,538 $ 62 4.4% United Parcel Service, Inc. dollar revenue, revenue per piece and operating profit is the period over period impact of currency fluctuations.7%Total revenue$ 65,872 ,906 8.com or pressroom. GAAP, utilizing the expected return on plan assets (8.Supplemental Analysis of Currency and UPS FreightCurrency Neutral Revenue Per Piece(unaudited)Three Months EndedCurrencyDecember 31Neutral20172016% ChangeCurrency2017*% ChangeAverage Revenue Per Piece:International Package:Domestic$ 6.26 2.S.41$ 16.2%$ 315$ 66,1878.6%Ground 14,061 13,515 546 4.4%International Package 13,338 12,350 988 8.0%Supply Chain & Freight:Forwarding and Logistics 7,981 6,793 1,188 17.85 3.4% over 4Q 2016, driven by Deferred Air and Ground. 2017 net income also excludes income tax benefits of 8 million attributable to the 2017 Tax Cuts and Jobs Act.64 $ 3.3%Freight 758 686 72 10.70$ (0. Reconciliation of GAAP and non-GAAP Revenue, Revenue Per Piece and As-Adjusted Currency Neutral Operating Profit (in millions, except Per Piece amounts):Three Months Ended December 312017 As-Reported (GAAP)2016 As-Reported (GAAP)% Change (GAAP)Currency Impact2017 Currency-Neutral (non-GAAP)% Change (non-GAAP)Average Revenue Per Piece:International Package:Domestic$ 6.8%LTL weight per shipment (in pounds) 1,076 1,054 22 2.Adjusted operating profit excludes the MTM pension charge. U.22 $ 18.2%$(0. We also use certain of these measures for the determination of incentive compensation award results.85 0.6% 80 840 19.651 billion, allocated between the U.57 13. 2016 net income and earnings per share amounts exclude the after-tax impact of the adjustments described in (1), which decreased net income by .7% over last year. Domestic Package$ 11,835 $ 10,913 $ 922 8. Domestic Package 4,280 3,017 1,263 41.2%Operating profit:U.7%Total other operating expenses$ 7,204 $ 6,037 $ 1,167 19.S. The blended average of the applicable statutory tax rates in 2017 and 2016 were 24. International Segment "Our International segment has generated four consecutive quarters of double-digit export growth," said Abney.5%Net income (2)$ 1,453 $ 1,434 $ 19 1. Domestic Package segment (7 million), International Package segment ( million), and Supply Chain & Freight segment (8 million).S.ups. The estimates are based on our initial analysis and current interpretation of the TCJA.30)$ 1.9%Export 28.2%Income tax expense 2,238 1,705 533 31.S.S.S.302.1% and 36. We believe free cash flow is an important indicator of how much cash is generated by regular business operations and we use it as a measure of incremental cash available to invest in our business, meet our debt obligations and return cash to shareowners.20 $ (0.0%Export 2,869 2,561 308 12.4%$ 0.43 11.0%Supply Chain & Freight 142 (139) 281 N/ATotal operating profit 1,494 (428) 1,922 N/AOther income (expense):Investment income and other 23 12 11 91.29 (0.5%Consolidated$ 10.6% to 0 million, the result of broad, accelerated growth combined with expanded yields.27 $ (0. United Parcel Service, Inc. The tax benefit was primarily due to the TCJA's reduction in the corporate tax rate that resulted in a remeasurement of our net deferred tax liability.69$ (0.9%Deferred 1,868 1,827 41 2. "The strong economic outlook and UPS's high return on invested capital generates a unique opportunity to create additional long-term value by increasing capital investments.5%International Package (1) 760 706 54 7.4%$ 0.3%Total operating profit 7,529 5,467 2,062 37.S.2%$ - $ 4,917 -0.01UPS Increases Investments for Growth in 2018 Announces Full-Year 2018 Adjusted EPS Guidance Range of .6%Income before income taxes (1)$ 7,948 $ 7,787 $ 161 2.4%Supply Chain & Freight 913 724 26.86 5.1%LTL gross weight hauled (in millions of pounds) 10,782 10,167 615 6.Selected Financial Data - Fourth Quarter(unaudited)Three Months EndedDecember 3120172016Change% Change(amounts in millions, except per share data)Statement of Income Data:Revenue:U. 2016 operating profit and consolidated income before income taxes exclude the impact of an increase in pension expense due to a mark-to-market loss recognized outside of a 10% corridor of .3%$(0.S.31 $ 5. Domestic Package 9. This adjusted net periodic benefit غير مجاز مي باشدt (3 million in 2017 and ,074 million in 2016) is comparable to the accounting for our defined benefit plans in our quarterly reporting under U.S. In addition, results include a mark-to-market (MTM) non-cash, pre-tax pension charge of 0 million which represents an after-tax charge of <~PostContent~>. Forward-Looking Statements Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.S.5%Diluted earnings per share (2)$ 6.65%in 2017 and 8.27 $ (0. Currency-Neutral Revenue, Revenue per Piece and Operating Profit We supplement the reporting of our revenue, revenue per piece and operating profit with similar non-GAAP measures that exclude the period-over-period impact of foreign currency exchange rate changes and hedging activities. 4Q 2017Adjusted4Q 20174Q 2016Adjusted4Q 2016Revenue,241 M,683 MOperating profit (loss)2 M0 M$(139) M9 M For the Supply Chain and Freight segment in 4Q 2017: Revenue increased 21% over 4Q 2016, the result of deeper alignment with preferred customers, strengthened revenue management initiatives and improved market conditions.4%Diluted earnings per share (2)$ 1.27 $ (0.0%Total other income (expense) (106) (88) (18)20.Announces Positive 2018 Outlook Revenue Growth Tops 11% for 4Q17 and 8% for Full-Year 20174Q17 EPS of .5 billion to ." Additionally, we periodically disclose free cash flow, free cash flow excluding discretionary pension contributions, as well as currency-neutral revenue, revenue per piece and operating profit. Saturday operations provided additional capacity and flexibility during the quarter. Premium Next Day Air shipment growth continued to be strong at 4.27 $ (0.1%Total operating profit (1) 8,329 8,118 211 2.4% 0.1%LTL revenue per LTL hundredweight$ 24.S.S.Company made capital expenditures of . All regions of the world contributed to the expansion.31$ 5.7%Supply Chain & Freight3,2412,68320.19$ 9.03)$ 6. We expect to unlock significant resources, which will be available for accelerated investments in our network and create additional opportunities for our people.7%Total International Package 13,338 12,350 988 8.4%$ -$ 40,7646. federal jurisdiction and various U.63 $ 0. dollar revenue, revenue per piece and operating profit by the current period average exchange rates to derive current period local currency revenue, revenue per piece and operating profit.61$ 0.4%Total U.63 Fourth-quarter 2017 GAAP results include a benefit of <~PostContent~>.m.26 3.9529.5%Freight 2,998 2,736 262 9.4% on Higher Package Demand and Yields 2017 EPS of .7%Other income (expense):Investment income and other 72 50 22 44.1 million shares for approximately .06 $ 10.9%International Package 2,464 2,044 420 20.64 $ 0.02)$ 10.22 $ 16.5029.5%Deferred 12. Our momentum, transformative actions and the economic catalyst from the Tax Cuts and Jobs Act (TCJA), position UPS for growth in 2018 and beyond.S.S.2%$ -$ 4,917-0.Record deliveries for Peak Season of 762 million, materially above last year and over plan.4%Total operating profit$ 2,294$ 2,2233.5%International Package7607067.0%Deferred 4,421 4,082 339 8. Adjusted diluted earnings per share for this period includes the dilutive effect of these same shares because we are reporting adjusted net income after excluding the mark-to-market pension and postretirement adjustment.9%, respectively.2%$ 0.673 billion. S.S.4% per share over the prior year.853.2%$ (52)$ 18,77710.7%Supply Chain & Freight 3,241 2,683 20.54 N/AWeighted-average shares outstanding:Basic 867 876 (9)-1.4%International Package 3,753 3,335 418 12.Selected Operating Data - Year to Date(unaudited)Twelve Months EndedDecember 3120172016Change% ChangeRevenue (in millions):U.08 5.Selected Cash Flow Data(unaudited)Net Increase (Decrease) in Cash and Cash EquivalentsPreliminaryYear-to-Date(amounts in millions)December 31Cash flows from operating activities$ 1,479 Cash flows used in investing activities (4,975)Cash flows from financing activities 3,287 Effect of exchange rate changes on cash and cash equivalents 53 Net increase (decrease) in cash and cash equivalents$ (156)Reconciliation of Free Cash Flow (non-GAAP)PreliminaryYear-to-Date(amounts in millions)December 31Cash flows from operating activities$ 1,479 Capital expenditures (5,227)Proceeds from disposals of PP&E 24 Net change in finance receivables 5 Other investing activities 1 Free cash flow (non-GAAP)$ (3,718)Discretionary pension contributions 7,291 Free cash flow, excluding discretionary pension contributions (non-GAAP)$ 3,573 Amounts are subject to reclassification. The non-adjusted net periodic benefit غير مجاز مي باشدt reflects the actual return on plan assets (12.57$ 15.7% and revenue of 9.08 $ 5. jurisdictions, by the adjustments.3%Basic earnings per share (2)$ 1.11 $ 19.34% in 2016). 4Q 2017 operating profit was 5 million; 4Q adjusted operating profit increased 7.2%Consolidated volume (in millions) 5,087 4,868 219 4. Full-year 2017 Consolidated Results Total revenue increased 8.5%$ (0.Adjusted operating profit excludes the MTM pension charge.865.8%Average Revenue Per Piece:U.6%8084019.S.Adjusted diluted EPS excludes the impact of both MTM pension charge and TCJA income tax benefit.22$ 16.3%Total operating expenses 17,335 17,359 (24)-0.74 13.31 5.67. Domestic segment in 4Q 2017: Revenue increased 2 million or 8.904.0%Basic earnings per share (2)$ 6. Tax Cuts and Jobs Act of 2017 On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted that significantly revises U.S.S. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, governmental regulations (including tax laws and regulations), our competitive environment, changes in the facts or assumptions underlying our health and pension benefit funding obligations, negotiation and ratification of labor contracts, strikes, work stoppages and slowdowns, changes in aviation and motor fuel prices, cyclical and seasonal fluctuations in our operating results, and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated herein by reference.4%Ground 7. Our non-GAAP financial information does not represent a comprehensive basis of accounting.6%$ 377 $ 8,706 7. Domestic Package$ (570)$ 1,908$ -$ 1,338 International Package281425 -706 Supply Chain & Freight(139)318 -179 Total operating profit$ (428)$ 2,651$ -$ 2,223 Income Taxes$ (277)$ 978$ -$ 701Net income(loss)$ (239)$ 1,673$ -$ 1,434Diluted weighted avg.4%Average Daily Package Volume (in thousands):U. Free Cash Flow We supplement the reporting of cash flows from operating activities with free cash flow and free cash flow excluding discretionary pension contributions, non-GAAP liquidity measures.ups.5% United Parcel Service, Inc.65% in 2016) and the discount rate used to determine net periodic benefit غير مجاز مي باشدt (4.8%Total revenue 18,829 16,931 1,898 11.3%Export 28.84 7.4%Diluted 875 887 (12)-1.12 8.17 3. "That execution, combined with our growth strategy and the investments we've made over the last three-and-a-half years, produced results that exceeded expectations.69 30.53 $ 10.50 29.053.75 Note: Certain amounts may not compute due to rounding.5%Operating weekdays252253 (1)-0.69 30.22 2.6%Purchased Transportation 10,989 9,129 1,860 20.67 4.9%.8%* Amounts adjusted for Defined Benefit Plans MTM charges** Amounts adjusted for Defined Benefit Plans MTM charges and period over period foreign currency exchange rate and hedging differencesUPS Freight Selected Operating Data - Fourth Quarter (unaudited)Three Months EndedDecember 3120172016Change% ChangeLTL revenue (in millions)$ 653 $ 604 $ 49 8. Improved market conditions combined with revenue-quality improvements and structural غير مجاز مي باشدt-reduction programs produced strong results.9%LTL revenue per LTL hundredweight$ 24.3%Net income$ 4,910 $ 3,431 $ 1,479 43.50 (1.During the quarter, the company delivered 1. To access the call, go to and click on "Earnings Webcast. The equivalent measures determined in accordance with GAAP are also referred to as "reported" or "unadjusted. ET, February 1, 2018. Non-GAAP financial measures should be considered in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP.7%Other expenses 1,535 1,350 185 13.09)-0. To get UPS news direct, follow @UPS_News on Twitter.7%Total U.90 0.4%$ -$ 11,8358.5%Supply Chain & Freight 3,241 2,683 558 20.0% 325 13,663 10.Full-year 2017 diluted EPS of .30 $ 0.7%LTL gross weight hauled (in millions of pounds) 2,651 2,578 73 2.2%$ 315 ,187 8.5%Consolidated$ 10.2%Ground 17,069 16,142 927 5.88$ -$ 5.4Q 2017 diluted EPS of . Domestic Package$ 3,017$ 1,908$ -$ 4,925 International Package2,044425 -2,469 Supply Chain & Freight406318 -724 Total operating profit$ 5,467$ 2,651$ -$ 8,118 Income Taxes$ 1,705$ 978$ -$ 2,683Net income$ 3,431$ 1,673$ -$ 5,104Diluted earnings per share$ 3." Consolidated Results4Q 2017Adjusted4Q 20174Q 2016Adjusted4Q 2016Revenue,829 M,931 MOperating profit (loss),494 M,294 M$(428) M,223 MDiluted earnings (loss) per share.Operating profit includes additional expense from investments in new technology, customer solutions and automated capacity expansion of about million. The difference between the current period reported U.6%Total International Package 16.S.85 0.61; Adjusted 2017 EPS of .27)$ 1. 4Q 2017Adjusted4Q 20174Q 2016Adjusted4Q 2016Revenue,835 M,913 MOperating profit (loss)7 M,264 M$(570) M,338 M For the U. "Our growth opportunities are accelerating," said Richard Peretz, UPS chief financial officer.0%32513,66310.28 28.4Q 2017 operating profit of 2 million; adjusted operating profit was 0 million.1%Other occupancy 310 275 35 12. 2016 operating profit and consolidated income before income taxes exclude the impact of an increase in pension expense due to a mark-to-market loss recognized outside of a 10% corridor of .2%LTL shipments (in thousands) 2,464 2,447 17 0. We also believe this non-GAAP measure provides investors additional useful information when evaluating our cash flows from operating activities. Currency-neutral revenue, revenue per piece and operating profit are calculated by dividing current period reported U.12)$ 16.81% in 2016).5%5.S.48 9.S.68 $ 1.27)$ 1.34% in 2017 and 4.2%; currency-neutral revenue was up 10.3%Consolidated 20,030 19,090 940 4.50 -3.5 39.4%Total International Package$ 16.1%Income before income taxes 7,148 5,136 2,012 39.50 29.4%Per share amounts:Basic earnings (loss) per share$ 1. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company's strategic directions, prospects and future results, involve certain risks and uncertainties.6%Supply Chain & Freight (1) 270 179 91 50. Domestic Package 9.04 2. Domestic Package:Next Day Air $ 18. corporate income tax law by, among other things, reducing the corporate income tax rate to 21% and implementing a modified territorial tax system, that includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries.8% (10) 11,760 14. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide.S. Domestic Package$ 4,917$ 4,925-0.853.6%Supply Chain & Freight11,77010,25514.S.3 1.5% (1) 2017 operating profit and consolidated income before income taxes exclude the impact of an increase in pension expense due to a mark-to-market loss recognized outside of a 10% corridor of 0 million, allocated between the U.S.Selected Operating Data - Fourth Quarter(unaudited)Three Months EndedDecember 3120172016Change% ChangeRevenue (in millions):U.Selected Financial Data - Year to Date(unaudited)Twelve Months EndedDecember 3120172016Change% Change(amounts in millions, except per share data)Statement of Income Data:Revenue:U.0%Total International Package 3,457 3,193 264 8.4%International Package:Domestic 2,645 2,441 204 8.8 billion.5%Cargo and Other 526 535 (9)-1.3%.69)-5.06$ 10.0%Depreciation and Amortization 2,282 2,224 58 2.00)-3.0%Supply Chain & Freight 11,770 10,255 1,515 14.3%Total U.5%As adjusted income data:Operating profit:U.S.5%$ -$ 1,264-5.S.67Three Months Ended December 31, 2016As-Reported (GAAP)Defined Benefit Plans MTM ChargesImpact of TCJAAs-Adjusted (non-GAAP)Operating profit (loss): U.2%Operating expenses:Compensation and benefits 10,131 11,322 (1,191)-10.5%LTL shipments per day (in thousands) 40.26 4.1%Consolidated$ 10.2 billion during the year. Domestic Package 627 (570) 1,197 N/AInternational Package 725 281 444 158.8%Export 1,395 1,210 185 15.38-5. Demand for UPS Ground rose in the fourth quarter with volume growth of 5.9 billion, an increase of 6.23 3.4%International Package:Domestic 1,859 1,815 44 2. That call is open to others through a live Webcast.8%Ground 8,501 7,778 723 9.S.8% (25) 3,216 19. Repurchased 16.9%, as higher base-rate pricing and fuel surcharges offset headwinds from customer and product mix.4%Total operating profit$ 2,294 $ 2,223 3.0 billion, mostly dedicated to investments in new technology, aircraft and automated capacity.57 $ 15.3 0.9%Earnings Per Share and Share Data - Year to Date(unaudited)Twelve Months Ended(amounts in millions, except per share data)December 3120172016Numerator:Net income$ 4,910 $ 3,431 Denominator:Weighted-average shares 865 878 Deferred compensation obligations 1 1 Vested portion of restricted units 5 4 Denominator for basic earnings per share 871 883 Effect of dilutive securities:Restricted units 3 3 Stock options 1 1 Denominator for diluted earnings per share 875 887 Basic earnings per share$ 5.4%Total operating profit$ 8,329 $ 8,118 2. Given the significant complexity of the Act, anticipated guidance from the U.27)Diluted earnings (loss) per share$ 1.5%$(0.1 0. Examples of items for which we may make adjustments include but are not limited to: amounts related to mark-to-market gains or losses (non-cash); settlement of contingencies; gains or losses associated with mergers, acquisitions, divestitures and other structural changes; charges related to restructuring programs; asset impairments (non-cash); amounts related to changes in tax regulations or positions; pension and postretirement related items; and debt modifications. Shipments surged beyond network capacity during Cyber-periods driving additional operating غير مجاز مي باشدt of 5 million.5% (1) 2017 operating profit and consolidated income before income taxes exclude the impact of an increase in pension expense due to a mark-to-market loss recognized outside of a 10% corridor of 0 million, allocated between the U. * Information on non-GAAP financial measures is attached to this press release.9%2017 As-Adjusted (non-GAAP) 2016 As-Adjusted (non-GAAP) % Change (non-GAAP)Currency Impact2017 As-Adjusted Currency-Neutral (non-GAAP)% Change (non-GAAP)As-Adjusted Operating Profit:U.0%Interest expense (453) (381) (72)18.95 29.4%Export28. Domestic Package segment (. Weighted-Average Shares Outstanding and Diluted Earnings per Share The computation of weighted-average shares outstanding and diluted earnings per share for the fourth quarter of 2016 excludes the effect of certain incentive compensation awards because they were anti-dilutive in consideration of our reported net loss.01.63 2. We believe diluted earnings per share excluding the tax benefit is useful in evaluating our ongoing operating performance for the current period to that of other periods presented. Domestic Package$ 4,917 $ 4,925 -0. United Parcel Service, Inc.5%International Package:Domestic 6.S.S.58 4.42 $ 1. Domestic Package 40,764 38,301 2,463 6.3%Total International Package 3,109 2,845 264 9. * Information on non-GAAP financial measures is attached to this press release.908 billion), International Package segment (5 million), and Supply Chain & Freight segment (8 million).64 -2.19 $ 9.1%Operating weekdays6161 - 0.5%Other 23,755 20,669 3,086 14. dollar revenue, revenue per piece and operating profit and the derived current period U. Domestic Package$ 4,280$ 637$ -$ 4,917 International Package2,46435 -2,499 Supply Chain & Freight785128 -913 Total operating profit$ 7,529$ 800$ -$ 8,329 Income Taxes$ 2,238$ 193$ 258$ 2,689Net income$ 4,910$ 607$ (258)$ 5,259Diluted earnings per share$ 5.27$ 0.7%LTL shipments per day (in thousands) 40.0%Supply Chain & Freight 270 179 50.com and its corporate blog can be found atlongitudes.2%* Amounts adjusted for Defined Benefit Plans MTM charges** Amounts adjusted for Defined Benefit Plans MTM charges and period over period foreign currency exchange rate and hedging differencesUPS Freight Selected Operating Data - Year to Date(unaudited)Twelve Months EndedDecember 3120172016Change% ChangeLTL revenue (in millions)$ 2,596 $ 2,384 $ 212 8. United Parcel Service, Inc.37, which includes about 0 million of additional pre-tax pension expense due to lower discount rates.Aircraft Fleet - As of December 31, 2017(unaudited)Owned andLeases & ChartersDescriptionCapital Leasesfrom OthersOn OrderUnder OptionOperating:Boeing 757-200 75 - - - Boeing 767-300 59 - - - Boeing 767-300BCF 2 - 1 - Airbus A300-600 52 - - - Boeing MD-11 37 - - - Boeing 747-400F 11 - - - Boeing 747-400BCF 2 - - - Boeing 747-8F 3 - 11 14 Other - 340 - - Total 241 340 12 14 Contacts:Steve Gaut, Public Relations 404-828-8787Scott Childress, Investor Relations404-828-7957. Domestic Package:Next Day Air 1,460 1,379 81 5.06% in 2016)and the discount rate used to measure the projected benefit obligation at the December 31 measurement date (3.21 5. Domestic Package (1)$ 1,264 $ 1,338 (74)-5.Detail of Other Operating Expenses - Fourth Quarter(unaudited)(in millions)Three Months EndedDecember 3120172016Change% ChangeRepairs and maintenance$ 420 $ 388 $ 32 8.18)-1. Domestic Package 16,921 16,245 676 4.27)$ 1. shares8765881Diluted earnings (loss) per share$ (0.4%0.64-2." 4Q 2017Adjusted4Q 20174Q 2016Adjusted4Q 2016Revenue,753 M,335 MOperating profit5 M0 M1 M6 M For the International segment in 4Q 2017: The segment reported revenue growth of 13% driven by premium products. The deferred income tax effects of these mark-to-market pension and postretirement adjustments are calculated by multiplying the statutory tax rates applicable in each tax jurisdiction, including the U. 2017 net income also excludes income tax benefits of 8 million attributable to the 2017 Tax Cuts and Jobs Act. Treasury about implementing the Act, and the potential for additional guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board related to the Act, our estimates may be refined in the future.78-2.2% Reconciliation of GAAP and non-GAAP Liquidity Measures (in millions)Year Ended December 31Net Increase (Decrease) in Cash and Cash Equivalents2017Cash flows from operating activities$ 1,479Cash flows used in investing activities(4,975)Cash flows from financing activities3,287Effect of exchange rate changes on cash and cash equivalents53Net (decrease) in cash and cash equivalents$ (156)Reconciliation of Free Cash Flow (non-GAAP)2017Cash flows from operating activities (GAAP)$ 1,479Capital expenditures(5,227)Proceeds from disposals of PP&E24Net change in finance receivables5Other investing activities1Free cash flow (non-GAAP)$ (3,718)Discretionary pension contributions7,291Free cash flow, excluding discretionary pension contributions (non-GAAP)$ 3,573 United Parcel Service, Inc.592.2%International Package2,4992,4691. "We made significant progress on key capacity investments in 2017. Domestic Package:Next Day Air $ 7,088 $ 6,752 $ 336 5.2%3752,87416.S.2%$ 81$ 2,3756.01 $ 5.4%Total International Package$ 16.27).4 40.50-3.67 International Export Shipments Rose 16% in 4Q17, Full-Year up 15% Supply Chain & Freight Profit Jumps with Strong Revenue Growth of 21% U.1% 2 915 26.0%Deferred 12.3%Earnings Per Share and Share Data - Fourth Quarter (unaudited)Three Months Ended(amounts in millions, except per share data)December 3120172016Numerator:Net income (loss)$ 1,104 $ (239)Denominator:Weighted-average shares 861 870 Deferred compensation obligations 1 1 Vested portion of restricted units 5 5 Denominator for basic earnings (loss) per share 867 876 Effect of dilutive securities:Restricted units 4 - Stock options 1 - Denominator for diluted earnings (loss) per share 872 876 Basic earnings (loss) per share$ 1.2% United Parcel Service, Inc.23 2.Paid dividends of .8%Total operating profit (1) 2,294 2,223 71 3.7% 2017 As-Adjusted (non-GAAP) 2016 As-Adjusted (non-GAAP) % Change (non-GAAP)Currency Impact2017 As-Adjusted Currency-Neutral (non-GAAP)% Change (non-GAAP)As-Adjusted Operating Profit: U.5% (27) 3,726 11.453.5%Purchased transportation 3,528 2,823 705 25.05 3.S. Domestic Package$ 1,264$ 1,338-5. In the prior-year period, the company reported non-cash, after-tax charges of .5%Other 211 184 27 14.2%International Package (1) 2,499 2,469 30 1.5%$ - $ 1,264 -5.7%Total revenue$ 65,872$ 60,9068.9%Total revenue$ 18,829 ,931 11.08$ 5. Domestic Package$ 40,764 ,301 6.25 0.2%International Package:Domestic 1,714 1,635 79 4. Reconciliation of GAAP and non-GAAP Financial Measures 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.27; adjusted diluted EPS of .8% 1 271 51.5%International Package 760 706 7.9%Deferred 1,400 1,351 49 3.2%Supply Chain & Freight (1) 913 724 189 26.Our guidance includes TCJA benefits that will increase net income and cash flow.4%As adjusted income data:Operating profit:U.89 Diluted earnings per share$ 5.8%* Amounts adjusted for period over period foreign currency exchange rate and hedging differencesCurrency Neutral Revenue(unaudited)Twelve Months EndedCurrencyDecember 31Neutral20172016% ChangeCurrency2017*% ChangeRevenue (in millions):U.81% in 2017 and 4.S.1%Consolidated$ 10.8%Total revenue 65,872 60,906 4,966 8.5%Operating weekdays 254 255 (1)-0.44 $ 0. Supply Chain and Freight Segment The Supply Chain and Freight segment produced record full-year and fourth-quarter results with double-digit expansion in both revenue and adjusted operating profit.2828.8%Total International Package 3,753 3,335 418 12.S.03)$ 6.5%Total U.0%Total Supply Chain & Freight 11,770 10,255 1,515 14.30 2.4%International Package 13,338 12,350 8.1%Net income as a percentage of revenue7.04 2.9%Ground 8. We calculate free cash flow as cash flows from operating activities less capital expenditures, proceeds from disposals of property, plant and equipment, and plus or minus the net changes in finance receivables and other investing activities. Domestic Revenue up 8.8% Reconciliation of GAAP and non-GAAP Revenue, Revenue Per Piece and As-Adjusted Currency Neutral Operating Profit (in millions, except Per Piece amounts):Year Ended December 312017 As-Reported (GAAP)2016 As-Reported (GAAP)% Change (GAAP)Currency Impact2017 Currency-Neutral (non-GAAP)% Change (non-GAAP)Average Revenue Per Piece:International Package:Domestic$ 6.9%* Amounts adjusted for period over period foreign currency exchange rate and hedging differencesAs-Adjusted Currency Neutral Operating Profit(unaudited)Three Months EndedAs-Adjusted CurrencyDecember 31Neutral2017*2016*% ChangeCurrency2017**% ChangeAs-Adjusted Operating profit (in millions):U.9%Total revenue$ 18,829$ 16,93111.1%Net income (2)$ 5,259 $ 5,104 $ 155 3. Reconciliation of GAAP and non-GAAP Income Statement Data (in millions, except EPS amounts):Three Months Ended December 31, 2017As-Reported (GAAP)Defined Benefit Plans MTM ChargesImpact of TCJAAs-Adjusted (non-GAAP)Operating profit: U.41 $ 16.70 per diluted share.4%Export 28.6%Other 791 726 65 9.2% to .4%Fuel 2,690 2,118 572 27.S.65 0.9 billion on shipment growth and yield expansion.4%Export 10,167 9,374 793 8.7%Interest expense (129) (100) (29)29.87 United Parcel Service, Inc. Conference Call Information UPS CEO David Abney and CFO Richard Peretz will discuss fourth-quarter results with investors and analysts during a conference call at 8:30 a.S.37 UPS (NYSE:UPS) today announced fourth quarter 2017 earnings.29)$ 6.45 3. United Parcel Service, Inc. Domestic Package$ 11,835$ 10,9138.6930. (2) 2017 net income and earnings per share amounts exclude the after-tax impact of the adjustments described in (1), which decreased net income by 7 million. Therefore, our non-GAAP financial information may not be comparable to similarly titled measures reported by other companies.8% 127151.0%Cargo and Other 145 137 8 5.7%LTL shipments (in thousands) 10,203 9,954 249 2. Domestic Package (1)$ 4,917 $ 4,925 $ (8)-0.2%Export 28.22 16.90 4. We evaluate the performance of our International Package and Supply Chain and Freight businesses on a currency-neutral basis.3%$ (0.1%Operating profit:U.2%Revenue:U.2%$ (52),777 10.S.2%Operating expenses:Compensation and benefits 34,588 34,770 (182)-0. 2016 diluted earnings per share is based on weighted-average shares outstanding of 881 million, which includes the effect of 5 million dilutive shares and share equivalents.S.8%Consolidated$ 18,829 $ 16,931 $ 1,898 11.5%(27)3,72611.9%Total operating expenses 58,343 55,439 2,904 5. We believe free cash flow excluding discretionary pension contributions is an important indicator of how much cash is generated by regular business operations and we use it to monitor our cash flow performance.19 $ 9.61 $ 3. Reconciliation of GAAP and non-GAAP Income Statement Data (in millions, except EPS amounts):Year Ended December 31, 2017As-Reported (GAAP)Defined Benefit Plans MTM ChargesImpact of TCJAAs-Adjusted (non-GAAP)Operating profit: U.40 $ (0.6%Supply Chain & Freight 11,770 10,255 14. The company can be found on the web atups.90$ -$ 1.908 billion), International Package segment (5 million), and Supply Chain & Freight segment (8 million).4%Export 1,598 1,378 220 16.4%Total International Package$ 16.0% United Parcel Service, Inc. Revenue per piece increased 2.9% as customers selected faster delivery options. Domestic Package segment (7 million), International Package segment ( million), and Supply Chain & Freight segment (8 million).S. (2) 2017 net income and earnings per share amounts exclude the after-tax impact of the adjustments described in (1), which decreased net income by 7 million.75 $ 0.64 2.5%Supply Chain & Freight:Forwarding and Logistics 2,272 1,813 459 25.45% in 2017 and 6.38 (1.0%Weighted-average shares outstanding:Basic 871 883 (12)-1.Tonnage gains in Freight Forwarding, UPS Freight and Coyote Logistics contributed to improved top-line results.59 2. 2016 net income and earnings per share amounts exclude the after-tax impact of the adjustments described in (1), which decreased net income by .34 3.0%Diluted earnings per share$ 5.Supplemental Analysis of Currency and UPS FreightCurrency Neutral Revenue Per Piece(unaudited)Twelve Months EndedCurrencyDecember 31Neutral20172016% ChangeCurrency2017*% ChangeAverage Revenue Per Piece:International Package:Domestic$ 6.14 11.651 billion, allocated between the U.9%$ (0.673 billion.2%Consolidated$ 10. However, bottom line results were muted by additional peak operating expenses due to cyber-period volume surges and short-term غير مجاز مي باشدts related to capacity projects yet to come on-line. state and non-U. Domestic Package segment (.19 7.5%Supply Chain & Freight 785 406 379 93.86 0.8%Consolidated$ 65,872 $ 60,906 $ 4,966 8.6%Per share amounts:Basic earnings per share$ 5.2% 375 2,874 16. Export shipment growth surged 16% per day.4%International Package:Domestic 739 637 102 16.30 0.6%0.63 $ 23.57 0.57 15.90 per diluted share related to mark-to-market pension charges.7%Operating weekdays 63 63 - 0.0%Supply Chain & Freight27017950.8%Total U. Domestic Package$ 40,764$ 38,3016.23 2.4%Supply Chain & Freight91372426.87$ 1." UPS expects 2018 adjusted diluted earnings per share to be in a range of .1%291526. We believe currency-neutral revenue, revenue per piece and operating profit information allows users of our financial statements to understand growth trends in our products and results.6%$ 377$ 8,7067.S. We believe that these non-GAAP measures provide additional meaningful information to assist users of our financial statements in understanding our financial results, cash flows and assessing our ongoing performance because they exclude items that may not be indicative of, or are unrelated to, our underlying operations and may provide a useful baseline for analyzing trends in our underlying businesses.87 $ 1. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends.4%International Package 3,753 3,335 12. Domestic Package$ 627$ 637$ -$ 1,264 International Package72535 -760 Supply Chain & Freight142128 -270 Total operating profit$ 1,494$ 800$ -$ 2,294 Income Taxes$ 284$ 193$ 258$ 735Net income$ 1,104$ 607$ (258)$ 1,453Diluted earnings per share$ 1.9%$(0. Adjusted operating profit excludes the MTM pension charge. Domestic Segment The Domestic segment is transforming its network to take full advantage of structural changes in the direct-to-consumer market. "We achieved our 2017 adjusted earnings-per-share target through exceptionally strong revenue and yield growth, coupled with benefits from our network investments and portfolio initiatives," said David Abney, UPS chairman and CEO.8%(10)11,76014.03 to . Capital expenditures planned between .12)$ 16.com.75 45.9%Total other income (expense) (381) (331) (50)15.9%Deferred 1,429 1,301 128 9.S.4%Other Expenses 5,039 4,623 416 9.07)-0.64 $ 3. The derived current period local currency revenue, revenue per piece and operating profit are then multiplied by the average foreign exchange rates used to translate the comparable results for each month in the prior year period (including the period over period impact of foreign currency revenue hedging activities).0%Other Occupancy 1,155 1,037 118 11.173.29-0. Domestic Package$ 11,835 ,913 8.91 7.3%Consolidated 24,054 22,744 1,310 5.30 per share attributable to the TCJA. Domestic Package:Next Day Air 1,660 1,582 78 4.9%International Package:Domestic 6.7%* Amounts adjusted for period over period foreign currency exchange rate and hedging differencesAs-Adjusted Currency Neutral Operating Profit(unaudited)Twelve Months EndedAs-Adjusted CurrencyDecember 31Neutral2017*2016*% ChangeCurrency2017**% ChangeAs-Adjusted Operating profit (in millions):U.4%International Package13,33812,3508. We supplement the presentation of our operating profit, operating margin, pre-tax income, net income and earnings per share with similar non-GAAP measures that exclude the impact of the portion of net periodic benefit غير مجاز مي باشدt represented by the gains and losses recognized in excess of the 10% corridor and the related income tax effects.4%Total operating profit $ 8,329$ 8,1182.2 3.85 3.61; adjusted diluted EPS was . Domestic Package 11,835 10,913 922 8.4%$ - ,835 8.5 billion packages, up 5.53$ 10.2%* Amounts adjusted for period over period foreign currency exchange rate and hedging differencesCurrency Neutral Revenue(unaudited)Three Months EndedCurrencyDecember 31Neutral20172016% ChangeCurrency2017*% ChangeRevenue (in millions):U. Currency-neutral operating profit increased 19% on an adjusted basis.0%LTL weight per shipment (in pounds) 1,057 1,021 36 3.2%Consolidated volume (in millions) 1,515 1,433 82 5.54 N/ADiluted earnings (loss) per share$ 1.4%Total International Package 16. For the total company in 4Q 2017: Revenue increased 11.2%Income before income taxes (1)$ 2,188 $ 2,135 $ 53 2.74 45.78 $ 0.7%Total Supply Chain & Freight 3,241 2,683 558 20.02)$ 10.2%Export28.S. Net Income and diluted earnings per share as adjusted, excluding the benefit from TCJA of 8 million, is a non-GAAP measure." About UPS UPS (NYSE:UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business.2%Depreciation and amortization 594 563 31 5. These investments enable UPS to execute our strategy and we are Forklift DC Motor Suppliers well-positioned for 2018 and beyond.3%Ground 29,255 27,467 1,788 6. We believe this adjusted net periodic benefit غير مجاز مي باشدt provides important supplemental information that reflects the anticipated long-term غير مجاز مي باشدt of our defined benefit plans, and provides a benchmark for historical defined benefit غير مجاز مي باشدt trends that may provide useful comparison of year-to-year financial performance without considering the short-term impact of changes in market interest rates, equity prices, and similar factors.26 4.45)$ 5.63 Note: Certain amounts may not compute due to rounding.5713.8%Revenue:U.2%$ (0.5%Other 7,204 6,037 1,167 19. Domestic Package:Next Day Air $ 1,905 $ 1,834 $ 71 3.S.53 $ 10.85 $ 0.9%Average Revenue Per Piece:U.8%(25)3,21619.9%-1.0%Diluted 872 876 (4)-0. Domestic Package 20,597 19,551 1,046 5.5%Income (loss) before income taxes 1,388 (516) 1,904 N/AIncome tax expense (benefit) 284 (277) 561 N/ANet income (loss)$ 1,104 $ (239)$ 1,343 N/ANet income (loss) as a percentage of revenue5.2%$ 81 $ 2,375 6.78 -2.4%Consolidated$ 10.38 -5.89 $ 1.632.2%$ 0.03 to .27)Detail of shares outstanding as of December 31, 2017:Class A shares 172 Class B shares 687 Total shares outstanding 859 United Parcel Service, Inc.4%Total International Package$ 16.