United Parcel Service, Inc. (NYSE:UPS) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 08:30 am ET

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United Parcel Service, Inc. (NYSE:UPS) Q2 2020 Earnings Conference Call - Final Transcript

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Executive
Carol B. Tome

from last year to $2.3 billion, led by outstanding results in the international segment. While our US operating margin declined by 170 basis points from last year, largely due to certain expense items that Brian will explain, we were pleased with 580 basis points of sequential improvement from what we reported in the first quarter.

Let me share with you how I've been spending my time since onboarding as CEO. I thought I knew USafter 17 years on the Board. But I've been diving in and believe me, when you get to dive deeper, this company is even more impressive than I imagined. Our global network is best-in-class, and our people are the hardest working people I've ever met. We also have many opportunities.

In our 113 year history, UShas become a trusted global logistics leader. But what got us where we are today will not get us to where we need to go in the future. Our customers are changing, our competitors are changing, and the rate of change is accelerating. As we evaluate new market realities, we will be making decisions faster based on data and analytics. With an emphasis on optimizing our existing network and the investments we've made. We will have a laser focus on creating value for our share owners, with the goal of increasing the rates of return on the capital we invest. It's all about becoming better, not bigger.

We have 5 core USprinciples that underpin our actions. Our first principle is our values. These values were established by our founder, Jim Casey, and give us an enduring foundation for success. Our values include integrity, safety, teamwork and service, and are the core of who we are and what we do.

Our second principle is our dividend, which is a hallmark of our financial strength. We are committed to continuing nearly 50 years of stability and growth in the dividends we pay. Our third guiding principle is retaining a strong investment-grade credit rating, ensuring that we have financial flexibility needed to competitively run our business.

Next is brand relevance. And by relevance, we mean leading by example, taking actions to support our customers and communities, promote diversity and inclusion, sponsor racial equality and shape a healthier planet.

And finally, our fifth principle is the importance of employee ownership, which supports valuable and lasting employee and retiree engagement. Outside of these 5 core principles, everything else in our portfolio is under review, and I mean everything.

While it is early in the process, the good news is that we already have the right strategy in place. Customer first, people-led, innovation-driven. Customer first is about removing friction when doing business with US Speeding up time and transit and improving the moments that matter, so we create greater loyalty to be measured by gains in our Net Promoter Score. In support of this effort, we have accelerated our plans to improve time in transit, making the US ground network faster in thousands of the most important