UPS » Topics » Net Cash Used In Financing Activities

This excerpt taken from the UPS 10-Q filed May 7, 2009.

Net Cash Used In Financing Activities

We generated net cash from financing activities of $1.457 billion in the first three months of 2009, compared with a $3.342 billion cash outflow during the same period in 2008. Our primary use of cash in financing activities is to repurchase shares, pay dividends, and repay debt obligations.

We issued debt, net of repayments, of $2.236 billion in the first three months of 2009, and repaid debt, net of new issuances, of $1.247 billion in the first three months of 2008. Issuances of debt in each period consisted primarily of commercial paper and offerings of fixed rate senior notes (discussed further below). Repayments of debt consisted primarily of paydowns of commercial paper, scheduled principal payments on our capitalized lease obligations and early redemptions of certain tranches of UPS Notes. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

In March 2009, we completed an offering of $1.0 billion of 3.875% senior notes due April 2014, and $1.0 billion of 5.125% senior notes due April 2019. These notes pay interest semiannually, and we may redeem the notes at any time by paying the greater of the principal amount or a “make-whole” amount, plus accrued interest. After pricing and underwriting discounts, we received a total of $1.989 billion in cash proceeds from the offering. Because these notes were issued relatively late in the first quarter of 2009, we retained most of the proceeds in cash and cash equivalents on our balance sheet as of March 31, 2009. The proceeds from the offering will be used for general corporate purposes, including the reduction of our outstanding commercial paper balance.

In January 2008, we completed an offering of $1.750 billion of 4.50% senior notes due January 2013, $750 million of 5.50% senior notes due January 2018, and $1.500 billion of 6.20% senior notes due January 2038. After pricing and underwriting discounts, we received a total of $3.961 billion in cash proceeds from the offering. Our debt balance increased at the end of 2007 as a result of commercial paper issuances used to fund our withdrawal from the Central States Pension Fund. We ultimately repaid most of this commercial paper with the proceeds from the senior notes offering, as well as the $850 million U.S. federal tax refund received.

 

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Table of Contents

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

 

As a result of the uncertain economic environment, we have slowed our share repurchase activity during the first quarter of 2009. We currently intend to repurchase shares in 2009 at a rate that will at least offset the dilution from our stock compensation programs. We repurchased a total of 2.5 million shares of Class A and Class B common stock for $113 million for the first three months of 2009, compared with repurchases of 17.4 million shares for $1.235 billion for the first three months of 2008 ($116 million and $1.170 billion are reported on the cash flow statement for 2009 and 2008, respectively, due to the timing of settlements). As of March 31, 2009, we had $6.459 billion of our existing share repurchase authorization remaining.

The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We maintained our quarterly cash dividend payment at $0.45 per share in the first quarter of 2009, consistent with the rate in the first quarter of 2008. We expect to continue the practice of paying regular cash dividends.

Our total cash dividends paid for the first three months of 2009 declined to $438 million from $886 million in 2008. This decline was primarily as a result of two dividend payments being made in the first three months of 2008, compared with only one dividend payment being made in the first three months of 2009, due to a change in our dividend payment schedule. We also had a reduction in the number of outstanding shares, as a result of our share repurchase program.

The cash outflows in other financing activities primarily relate to hedging activities. In conjunction with the senior fixed rate debt offerings in the first quarter of 2009 and 2008, we settled several interest rate derivatives that were designated as hedges of these debt offerings, which resulted in cash outflows of $243 and $84 million in 2009 and 2008, respectively.

This excerpt taken from the UPS 10-Q filed Nov 7, 2008.

Net Cash Used In Financing Activities

Net cash used in financing activities increased to $5.037 billion in the first nine months of 2008 from $3.133 billion during the same period in 2007. Our primary use of cash in financing activities is to repurchase shares, pay dividends, and repay debt obligations. In January 2008, we announced a new financial policy regarding our capital structure to enhance shareowner value. We intend to manage our balance sheet to a target debt ratio of approximately 50%-60% funds from operations to total debt. In connection with this policy, the Board of Directors authorized an increase in our share repurchase authorization to $10.0 billion. The timing of our share repurchases will depend upon market conditions.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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Share repurchases may take the form of accelerated share repurchases, open market purchases, or other such methods as we deem appropriate. During the second quarter of 2008, we entered into an accelerated share repurchase program for $227 million. The program was completed by June 30, 2008, and a total of 3.3 million shares were retired. Additionally, during the second quarter of 2008, we entered into a forward purchase agreement for $220 million of shares, which was completed on July 31, 2008. A total of 3.6 million shares were repurchased under this agreement. Including the repurchases noted above, we repurchased a total of 48.5 million shares of Class A and Class B common stock for $3.299 billion for the nine months ended September 30, 2008, and 27.9 million shares for $2.027 billion for the nine months ended September 30, 2007 ($3.284 billion and $2.069 billion are reported on the cash flow statement for 2008 and 2007, respectively, due to the timing of settlements). As of September 30, 2008, we had $6.832 billion of our share repurchase authorization remaining.

We increased our quarterly cash dividend payment to $0.45 per share in 2008 from $0.42 per share in 2007, resulting in an increase in total cash dividends paid for the first nine months of 2008 to $1.781 billion from $1.698 billion in 2007. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

On November 6, 2008, the Board of Directors approved a $0.45 per share dividend to be paid on December 3, 2008 to shareowners of record on November 17, 2008. The Board of Directors had previously approved an earlier payment schedule for the November dividend declaration, as in past years this dividend was payable the following January. As a result, a total of five dividend payments will be made in 2008.

We issued debt, net of repayments, of $5 and $498 million in the first nine months of 2008 and 2007 respectively. Issuances of debt consisted primarily of commercial paper and a senior notes offering (discussed further below). Repayments of debt consisted primarily of paydowns of commercial paper, scheduled principal payments on our capitalized lease obligations and early redemptions of certain tranches of UPS Notes. Our debt balance increased at the end of 2007 as a result of commercial paper issuances used to fund our withdrawal from the Central States Pension Fund. In early 2008, we repaid most of this commercial paper with the proceeds from the senior notes offering, as well as the $850 million U.S. federal tax refund received.

In January 2008, we completed an offering of $1.750 billion of 4.50% senior notes due January 2013, $750 million of 5.50% senior notes due January 2018, and $1.500 billion of 6.20% senior notes due January 2038. All of the notes pay interest semiannually, and allow for redemption of the notes by UPS at any time by paying the greater of the principal amount or a “make-whole” amount, plus accrued interest. After pricing and underwriting discounts, we received a total of $3.961 billion in cash proceeds from the offering. During the first quarter of 2008, we settled certain derivatives that were designated as hedges of this notes offering, resulting in a cash outflow of $84 million (which is reported in other financing activities on the cash flow statement).

Additionally, in the first nine months of 2008, we called for the redemption of $298 million of notes issued under our UPS Notes program, and the associated swaps on the notes were terminated. In October 2008, an additional $31 million of notes were called. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

This excerpt taken from the UPS 10-Q filed Aug 8, 2008.

Net Cash Used In Financing Activities

Net cash used in financing activities increased to $3.986 billion in the first six months of 2008 from $2.215 billion during the same period in 2007. Our primary use of cash in financing activities is to repurchase shares, pay dividends, and repay debt obligations. In January 2008, we announced a new financial policy regarding our capital structure to enhance shareowner value. We intend to manage our balance sheet to a target debt ratio of approximately 50%-60% funds from operations to total debt. In connection with this policy, the Board of Directors authorized an increase in our share repurchase authorization to $10.0 billion. We intend to complete this level of share repurchases during 2008 and 2009.

Share repurchases may take the form of accelerated share repurchases, open market purchases, or other such methods as we deem appropriate. During the second quarter of 2008, we entered into an accelerated share repurchase program for $227 million. The program was completed by June 30, 2008, and a total of 3.3 million shares were retired. Additionally, during the second quarter of 2008, we entered into a forward purchase agreement for UPS Class B shares for $220 million, which was completed on July 31, 2008. A total of 3.6 million shares were repurchased under this agreement, approximately 0.8 million of which were in the second quarter of 2008. The cash outflow for the forward purchase agreement that had not been used on share repurchases as of June 30, 2008 was reported in other financing activities on the cash flow statement. Including the repurchases noted above, we repurchased a total of 35.7 million shares of Class A and Class B common stock for $2.486 billion for the six months ended June 30, 2008, and 21.0 million shares for $1.506 billion for the six months ended June 30, 2007 ($2.294 billion and $1.522 billion are reported on the cash flow statement for 2008 and 2007, respectively, due to the timing of settlements). As of June 30, 2008, we had $7.644 billion of our share repurchase authorization remaining.

 

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

 

We increased our quarterly cash dividend payment to $0.45 per share in 2008 from $0.42 per share in 2007, resulting in an increase in total cash dividends paid for the first six months of 2008 to $1.337 billion from $1.266 billion in 2007. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

In January 2008, the Board of Directors approved an earlier payment schedule for the dividend typically declared in November of each year. Beginning in 2008 and going forward, that dividend is expected to be paid in December instead of the following January. As a result, we expect that a total of five dividend payments will be made in 2008.

We repaid debt, net of borrowings, of $170 million in the first six months of 2008, compared with debt issuance, net of repayments, of $498 million in the first six months of 2007. Repayments of debt consisted primarily of paydowns of commercial paper, scheduled principal payments on our capitalized lease obligations and early redemptions of certain tranches of UPS Notes. Our debt balance increased at the end of 2007 as a result of commercial paper issuances used to fund our withdrawal from the Central States Pension Fund. In early 2008, we repaid most of this commercial paper with the use of the proceeds from a senior notes offering (discussed further below), as well as the $850 million U.S. federal tax refund received.

In January 2008, we completed an offering of $1.750 billion of 4.50% senior notes due January 2013, $750 million of 5.50% senior notes due January 2018, and $1.500 billion of 6.20% senior notes due January 2038. All of the notes pay interest semiannually, and allow for redemption of the notes by UPS at any time by paying the greater of the principal amount or a “make-whole” amount, plus accrued interest. After pricing and underwriting discounts, we received a total of $3.961 billion in cash proceeds from the offering. During the first quarter of 2008, we settled certain derivatives that were designated as hedges of this notes offering, resulting in a cash outflow of $84 million (which is reported in other financing activities on the cash flow statement).

Additionally, in the first six months of 2008, we called for the redemption of $239 million of notes issued under our UPS Notes program, and the associated swaps on the notes were terminated. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

This excerpt taken from the UPS 10-Q filed May 9, 2008.

Net Cash Used In Financing Activities

Net cash used in financing activities increased to $3.342 billion in the first three months of 2008 from $1.474 billion during the same period in 2007. Our primary use of cash in financing activities is to repurchase shares, pay dividends, and repay debt obligations. In January 2008, we announced a new financial policy regarding our capital structure to enhance shareowner value. Prospectively, we intend to manage our balance sheet to a target debt ratio of approximately 50%-60% funds from operations to total debt. In connection with this policy, the Board of Directors authorized an increase in our share repurchase authorization to $10.0 billion. We intend to complete this level of share repurchases within two years. Share repurchases may take the form of an accelerated share repurchase program, open market purchases, or other such methods as we deem appropriate. We repurchased a total of 17.4 million shares of Class A and Class B common stock for $1.235 billion for the three months ended March 31, 2008, and 8.9 million shares for $642 million for the three months ended

 

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

 

March 31, 2007 ($1.170 billion and $669 million are reported on the cash flow statement for 2008 and 2007, respectively, due to the timing of settlements). As of March 31, 2008, we had $8.895 billion of our share repurchase authorization remaining.

We increased our quarterly cash dividend payment to $0.45 per share in 2008 from $0.42 per share in 2007, resulting in an increase in total cash dividends paid to $886 million from $830 million. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

We repaid debt, net of borrowings, of $1.247 billion and $13 million during the first quarter of 2008 and 2007, respectively. Repayments of debt consisted primarily of paydowns of commercial paper, scheduled principal payments on our capitalized lease obligations and early redemptions of certain tranches of UPS Notes. Our debt balance increased at the end of 2007 as a result of commercial paper issuances used to fund our withdrawal from the Central States Pension Fund. In early 2008, we repaid most of this commercial paper with the use of the proceeds from a senior notes offering (discussed further below), as well as the $850 million U.S. federal tax refund received.

In January 2008, we completed an offering of $1.750 billion of 4.50% senior notes due January 2013, $750 million of 5.50% senior notes due January 2018, and $1.500 billion of 6.20% senior notes due January 2038. All of the notes pay interest semiannually, and allow for redemption of the notes by UPS at any time by paying the greater of the principal amount or a “make-whole” amount, plus accrued interest. After pricing and underwriting discounts, we received a total of $3.961 billion in cash proceeds from the offering. During the first quarter of 2008, we settled certain derivatives that were designated as hedges of this notes offering, resulting in a cash outflow of $84 million (which is reported in other financing activities on the cash flow statement).

In the first quarter of 2008, we called for redemption $78 million of notes issued under our UPS Notes program, and the associated swaps on the notes were terminated. We anticipate approximately $111 million of our UPS Notes program will be redeemed in the second quarter of 2008. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

This excerpt taken from the UPS 10-Q filed Nov 9, 2007.

Net Cash Used In Financing Activities

Net cash used in financing activities increased to $3.133 billion in the first nine months of 2007 from $2.777 billion during the same period in 2006. Our primary use of cash in financing activities is to repurchase shares, pay dividends, and repay debt obligations. We repurchased a total of 27.9 million shares of Class A and Class B common stock for $2.027 billion in the first nine months of 2007, and 26.5 million shares for $1.993 billion in the first nine months of 2006 (share repurchases of $2.069 billion in 2007 and $2.041 billion in 2006 are reported on the cash flow statement, due to the timing of settlements). On October 30, 2007, the Company announced that the Board of Directors approved an increase in our share repurchase authorization to $2.0 billion, which replaced the remaining amounts available under our February 2007 authorization.

We increased our quarterly cash dividend payment to $0.42 per share in 2007 from $0.38 per share in 2006, resulting in an increase in total cash dividends paid to $1.698 billion from $1.569 billion. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

We issued debt (net of repayments) of $498 million in 2007 compared with $703 million in 2006. Issuances of debt consisted primarily of commercial paper and borrowings under our UPS Notes program. Repayments of debt consisted of scheduled principal payments on our capitalized lease obligations and principal payments on

 

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

 

debt related to our investment in certain equity-method partnerships. Borrowings and repayments of commercial paper are impacted by the timing and amount of share repurchases, pension fundings, and working capital changes, among other items. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

In connection with our tentative withdrawal from the Central States multi-employer pension plan (discussed further in the “Contingencies” section), we anticipate issuing debt or borrowing on our existing credit facilities to fund the $6.1 billion withdrawal liability. This funding is expected to occur in the fourth quarter of 2007, upon ratification by the Teamsters of the tentative agreement. As this withdrawal liability payment is deductible for income tax purposes, we anticipate substantially reduced estimated 2007 tax payments and potentially reduced 2008 estimated tax payments.

This excerpt taken from the UPS 10-Q filed Aug 8, 2007.

Net Cash Used In Financing Activities

Net cash used in financing activities decreased to $2.215 billion in the first six months of 2007 from $2.847 billion during the same period in 2006. Our primary use of cash in financing activities is to repurchase shares, pay dividends, and repay debt obligations. On February 8, 2007, the Board of Directors approved an increase in our share repurchase authorization to $2.0 billion, which replaced the remaining amounts available under our July 2006 authorization. We repurchased a total of 21.0 million shares of Class A and Class B common stock for $1.506 billion in the first six months of 2007, and 17.8 million shares for $1.392 billion in the first six months of 2006 (share repurchases of $1.522 billion in 2007 and $1.421 billion in 2006 are reported on the cash flow statement, due to the timing of settlements). As of June 30, 2007, we had $741 million of our share repurchase authorization remaining.

We increased our quarterly cash dividend payment to $0.42 per share in 2007 from $0.38 per share in 2006, resulting in an increase in total cash dividends paid to $1.266 billion from $1.168 billion. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

We issued debt, net of repayments, of $498 million in 2007, primarily consisting of commercial paper. In 2006, we had a net repayment of debt of $347 million. Repayments of debt consisted of scheduled principal payments on our capitalized lease obligations and principal payments on debt related to our investment in certain equity-method partnerships. Issuances of debt consisted primarily of commercial paper and borrowings under our UPS Notes program. Borrowings and repayments of commercial paper are impacted by the timing and amount of share repurchases, pension fundings, and working capital changes, among other items. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

This excerpt taken from the UPS 10-Q filed May 10, 2007.

Net Cash Used In Financing Activities

Net cash used in financing activities decreased to $1.474 billion in the first three months of 2007 from $1.797 billion during the same period in 2006. Our primary use of cash in financing activities is to repurchase shares, pay dividends, and repay debt obligations. On February 8, 2007, the Board of Directors approved an increase in our share repurchase authorization to $2.0 billion, which replaced the remaining amounts available under our July 2006 authorization. We repurchased a total of 8.9 million shares of Class A and Class B common stock for $642 million in the first three months of 2007, and 11.3 million shares for $860 million in the first three months of 2006 (share repurchases of $669 million in 2007 and $867 million in 2006 are reported on the cash flow statement, due to the timing of settlements). As of March 31, 2007, we had $1.605 billion of our share repurchase authorization remaining.

We increased our quarterly cash dividend payment to $0.42 per share in 2007 from $0.38 per share in 2006, resulting in an increase in total cash dividends paid to $830 million from $763 million. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

We repaid debt, net of borrowings, of $13 and $207 million during the first quarter of 2007 and 2006, respectively. Repayments of debt consisted primarily of paydowns of commercial paper, scheduled principal payments on our capitalized lease obligations and principal payments on debt related to our investment in certain equity-method partnerships. Issuances of debt consisted primarily of commercial paper and borrowings under our UPS Notes program. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

This excerpt taken from the UPS 10-K filed Mar 1, 2007.

Net Cash Used In Financing Activities

 

Net cash used in financing activities was $3.851, $4.175, and $2.014 billion in 2006, 2005, and 2004, respectively. Our primary uses of cash in financing activities have been to repurchase stock, pay dividends, and repay long-term debt. In July 2006, the Board of Directors authorized an additional $2.0 billion for future share repurchases, in addition to the amount remaining under our August 2005 share repurchase authorization. We repurchased a total of 32.6 million shares of Class A and Class B common stock for $2.455 billion in 2006 ($2.460 billion reported on statement of cash flows due to timing of settlements), and 33.9 million shares for $2.479 billion in 2005. As of December 31, 2006, we had $936 million of our share repurchase authorization remaining; in February 2007, the Board of Directors approved an increase in our share repurchase authorization to $2.0 billion, which replaced the remaining amounts available under our July 2006 authorization. On February 8, 2007, our Board declared a dividend of $0.42 per share, which is payable on March 6, 2007 to shareowners of record on February 20, 2007.

 

We increased our quarterly cash dividend payment to $0.38 per share in 2006 from $0.33 per share in 2005, resulting in an increase in total cash dividends paid to $1.577 billion from $1.391 billion. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

 

Issuances of debt during 2006 consisted primarily of issuances of commercial paper, UPS Notes, and facility notes and bonds. Repayments of debt consisted primarily of scheduled principal payments on our capital lease obligations and principal payments on debt related to our investment in certain equity-method partnerships. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

 

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Index to Financial Statements
This excerpt taken from the UPS 10-Q filed Nov 6, 2006.

Net Cash Used In Financing Activities

Net cash used in financing activities increased to $2.777 billion in the first nine months of 2006 from $2.671 billion during the comparable period of 2005, primarily due to increased dividend payments and share repurchases. We repurchased a total of 26.5 million shares of class A and class B common stock for $2.041 billion in the first nine months of 2006, and 26.8 million shares for $1.954 billion in the first nine months of 2005. In July 2006, the Board of Directors authorized an additional $2.0 billion for future share repurchases.

We increased our quarterly cash dividend payment to $0.38 per share in 2006 from $0.33 per share in 2005, resulting in an increase in total cash dividends paid to $1.569 billion from $1.392 billion. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

Issuances of debt during the first nine months of 2006 consisted of issuances of commercial paper and debt related to our investment in certain equity-method real estate partnerships. Repayments of debt consisted primarily of scheduled principal payments on our capitalized lease obligations and principal payments on debt related to our investment in equity-method real estate partnerships. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

 

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This excerpt taken from the UPS 10-Q filed Aug 4, 2006.

Net Cash Used In Financing Activities

Net cash used in financing activities increased to $2.847 billion in the first six months of 2006 from $2.648 billion during 2005, primarily due to increased dividend payments, repayments of debt, and share repurchases. We repurchased a total of 17.8 million shares of Class A and Class B common stock for $1.421 billion in the first six months of 2006, and 19.0 million shares for $1.405 billion in the first six months of 2005. In July 2006, the Board of Directors authorized an additional $2.0 billion for future share repurchases.

We increased our quarterly cash dividend payment to $0.38 per share in 2006 from $0.33 per share in 2005, resulting in an increase in total cash dividends paid to $1.168 billion from $1.033 billion. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

Issuances of debt during the first six months of 2006 consisted of debt related to our investment in certain equity-method real estate partnerships. Repayments of debt consisted primarily of paydowns of commercial

 

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paper, scheduled principal payments on our capitalized lease obligations and principal payments on debt related to our investment in equity-method real estate partnerships. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

This excerpt taken from the UPS 10-Q filed May 10, 2006.

Net Cash Used In Financing Activities

Net cash used in financing activities increased to $1.797 billion in the first three months of 2006 from $1.769 billion during 2005, primarily due to increased share repurchases and dividend payments. In August 2005, the Board of Directors authorized an additional $2.0 billion for future share repurchases, in addition to the amount remaining under our October 2004 share repurchase authorization. We repurchased a total of 11.3 million shares of Class A and Class B common stock for $867 million in the first three months of 2006, and 10.3 million shares for $785 million in the first three months of 2005. As of March 31, 2006, we had $477 million of our share repurchase authorization remaining.

We increased our quarterly cash dividend payment to $0.38 per share in 2006 from $0.33 per share in 2005, resulting in an increase in total cash dividends paid to $763 million from $671 million. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

We did not issue any debt during the first three months of 2006. Repayments of debt consisted primarily of paydowns of commercial paper, scheduled principal payments on our capitalized lease obligations and principal payments on debt related to our investment in certain equity-method real estate partnerships. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

This excerpt taken from the UPS 10-K filed Mar 14, 2006.

Net Cash Used In Financing Activities

 

Net cash used in financing activities was $4.175, $2.014, and $2.110 billion in 2005, 2004, and 2003, respectively. Our primary uses of cash in financing activities have been to repurchase stock, pay dividends, and repay long-term debt. In August 2005, the Board of Directors authorized an additional $2.0 billion for future share repurchases, in addition to the amount remaining under our October 2004 share repurchase authorization. We repurchased a total of 33.9 million shares of Class A and Class B common stock for $2.479 billion in 2005, and 18.1 million shares for $1.310 billion in 2004. As of December 31, 2005, we had $1.338 billion of our share repurchase authorization remaining.

 

We increased our quarterly cash dividend payment to $0.33 per share in 2005 from $0.28 per share in 2004, resulting in an increase in total cash dividends paid to $1.391 billion from $1.208 billion. The declaration of

 

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Index to Financial Statements

dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

 

During 2005, we repaid $589 million in debt, primarily consisting of paydowns of commercial paper, scheduled principal payments on capital lease obligations, and repayments of debt that was previously assumed with the acquisitions of Lynx Express Ltd. and Overnite Corp. Issuances of debt were $128 million in 2005, and consisted primarily of loans related to our investment in certain equity-method real estate partnerships. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

 

This excerpt taken from the UPS 10-Q filed Nov 9, 2005.

Net Cash Used In Financing Activities

 

Net cash used in financing activities increased to $2.671 billion in the first nine months of 2005 from $2.345 billion during 2004, primarily due to increased share repurchases and dividend payments. In August 2005, the Board of Directors authorized an additional $2.0 billion for future share repurchases, in addition to the amount remaining under our October 2004 share repurchase authorization. We repurchased a total of 26.8 million shares of Class A and Class B common stock for $1.954 billion in the first nine months of 2005, and 15.5 million shares for $1.092 billion in the first nine months of 2004. As of September 30, 2005, we had $1.864 billion of our share repurchase authorization remaining.

 

We increased our quarterly cash dividend payment to $0.33 per share in 2005 from $0.28 per share in 2004, resulting in an increase in total cash dividends paid to $1.392 billion from $1.209 billion. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

 

During the first nine months of 2005, we issued $815 million in debt, primarily consisting of commercial paper, due to the timing of cash payments for acquisitions and benefit plan fundings. Repayments of debt consisted primarily of scheduled principal payments on our capitalized lease obligations and principal payments on debt related to our investment in certain equity-method real estate partnerships. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

 

This excerpt taken from the UPS 10-Q filed Aug 9, 2005.

Net Cash Used In Financing Activities

 

Net cash used in financing activities increased to $2.652 billion in the first six months of 2005 from $1.473 billion during 2004, primarily due to increased share repurchases, dividend payments, and repayments of debt. In October 2004, the Board of Directors authorized a total of $2.0 billion for future share repurchases. We repurchased a total of 19.0 million shares of Class A and Class B common stock for $1.405 billion in the first six months of 2005, and 10.5 million shares for $745 million in 2004. As of June 30, 2005, we had $413 million of our share repurchase authorization remaining.

 

We increased our quarterly cash dividend payment to $0.33 per share in 2005 from $0.28 per share in 2004, resulting in an increase in total cash dividends paid to $1.033 billion from $903 million. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

 

During the first six months of 2005, we repaid $513 million in debt, primarily consisting of commercial paper and scheduled principal payments on our capitalized lease obligations. Issuances of debt consisted primarily of commercial paper and debt issued upon our investment in certain equity-method real estate

 

21


UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

 

partnerships. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

 

This excerpt taken from the UPS 8-K filed May 17, 2005.

Net Cash Used In Financing Activities

 

Net cash used in financing activities was $2.014, $2.110 and $2.090 billion in 2004, 2003 and 2002, respectively. Our primary use of cash in financing activities has been to repurchase stock, pay dividends, and repay long-term debt. In October 2004, a total of $2.0 billion was authorized for share repurchases as part of our continuing share repurchase program. As of December 31, 2004, $1.817 billion of this authorization was available for future share repurchases. We repurchased a total of $1.310 billion of common stock in 2004.

 

We increased our cash dividends per share to $1.12 in 2004 from $0.92 in 2003, resulting in an increase in total cash dividends paid to $1.208 billion from $956 million. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends. In February 2005, the Board of Directors declared a $0.33 per share dividend, which represents a 17.9% increase over the $0.28 previous quarterly dividend. The dividend is payable on March 9, 2005 to shareowners of record on February 22, 2005.

 

During 2004, we repaid $468 million in debt, primarily consisting of $264 million in commercial paper, $56 million in redemptions of UPS Notes, $57 million in scheduled principal payments on capital lease obligations, and $60 million for the redemption of our Singapore Dollar notes issue. Issuances of debt primarily consisted of $735 million in commercial paper and $41 million in UPS Notes. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

 

This excerpt taken from the UPS 10-Q filed May 10, 2005.

Net Cash Used In Financing Activities

 

Net cash used in financing activities increased to $1.772 billion in the first quarter of 2005 from $915 million during 2004, primarily due to increased share repurchases, dividend payments, and repayments of debt.

 

20


UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

 

In October 2004, the Board of Directors authorized a total of $2.0 billion for future share repurchases. We repurchased a total of 10.3 million shares of Class A and Class B common stock for $785 million in 2005, and 5.4 million shares for $379 million in 2004. As of March 31, 2005, we had $1.032 billion of our share repurchase authorization remaining.

 

We increased our quarterly cash dividend payment to $0.33 per share in 2005 from $0.28 per share in the first quarter of 2004, resulting in an increase in total cash dividends paid to $671 million from $590 million. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends.

 

During the first quarter of 2005, we repaid $388 million in debt, primarily consisting of commercial paper and scheduled principal payments on our capitalized lease obligations. Issuances of debt consisted primarily of commercial paper and debt issued upon our investment in certain equity-method real estate partnerships. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

 

This excerpt taken from the UPS 10-K filed Mar 14, 2005.

Net Cash Used In Financing Activities

 

Net cash used in financing activities was $2.014, $2.110 and $2.090 billion in 2004, 2003 and 2002, respectively. Our primary use of cash in financing activities has been to repurchase stock, pay dividends, and repay long-term debt. In October 2004, a total of $2.0 billion was authorized for share repurchases as part of our continuing share repurchase program. As of December 31, 2004, $1.817 billion of this authorization was available for future share repurchases. We repurchased a total of $1.310 billion of common stock in 2004.

 

We increased our cash dividends per share to $1.12 in 2004 from $0.92 in 2003, resulting in an increase in total cash dividends paid to $1.208 billion from $956 million. The declaration of dividends is subject to the discretion of the Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future prospects, and other relevant factors. We expect to continue the practice of paying regular cash dividends. In February 2005, the Board of Directors declared a $0.33 per share dividend, which represents a 17.9% increase over the $0.28 previous quarterly dividend. The dividend is payable on March 9, 2005 to shareowners of record on February 22, 2005.

 

During 2004, we repaid $468 million in debt, primarily consisting of $264 million in commercial paper, $56 million in redemptions of UPS Notes, $57 million in scheduled principal payments on capital lease obligations, and $60 million for the redemption of our Singapore Dollar notes issue. Issuances of debt primarily consisted of $735 million in commercial paper and $41 million in UPS Notes. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of borrowing when planning for future issuances and non-scheduled repayments of debt.

 

"Net Cash Used In Financing Activities" elsewhere:

TPG, N.V. (TNT)
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