UPS PROJECTED PROFIT INCREASE DUE TO NEW TAX PLAN

[East coast navy]

I think we should be getting 1.00 to 1.50 raise a year on this next contract.... both part time and full time members... I don’t believe that is being greedy....especially with the long hours they want us to work

3 PT and 1 FT

 

[john chesney]

I HOPE THE TEAMSTERS WILL ASSERTAIN WHAT UPS EXPECTS THE IMPACT OF THE NEW TAX LAW TO HAVE ON UPS'S BOTTOM LINE. THEY SHOULD EVEN BE ABLE TO RUN A PROJECTION BASED ON LAST YEARS UPS FINANCIALS.

THE TEAMSTERS ALSO NEED TO ASK WHAT PROJECTED REVENUE INCREASE WILL RESULT FROM IMPLEMENTING THE NO SIGN AT BUSINESSES OR CHARGE FOR SIGNATURE CHANGE.

And Ups is trying to figure out how to add 10 stops per route per year

 

[35years]

That is not from the tax decrease alone.

FedEx may get $1.5 billion boost from tax cut

"But the shipping giant told investors in its earnings release that its annual profits for fiscal 2018 could increase by $4.40 to $5.50 a share, mainly due to a change in how it values deferred tax liabilities as well as the cut in the corporate tax rate to 21%."

And the lower corporate tax rate....

"The lower tax rate on its own will lead earnings to be as much as $1 a share higher, FedEx said."

This will result in a $268M increase in profit, not $1.5B on its own.

UPS expects a higher increase, $650M, so there you go.

But you see UPS will be able to take advantage of the same change in the tax bill that Fed-Ex calculated for itself...
This is in addition to the corporate tax rate cut to 21%
UPS's tax deferred liabilities will be valued differently as well as Fed-Ex.

Just as Fed-Ex expects a $268M increase in profit because of the corporate rate cut to 21%; but a TOTAL 1.5 Billion boost from the tax bill overall...
UPS can expect $650M from the corporate rate cut but a far larger TOTAL boost from the tax bill overall. So, perhaps a benefit of 2x that of the smaller Fed-Ex... which would mean a TOTAL boost from the bill of 3 Billion for UPS. So perhaps there are other things in the bill which East Coast Navy alluded to that brings the boost to 6 Billion.

"Apart from the significant drop in corporate tax rate, the new law allows these companies to deduct their capital expenditures from taxable income in the year of their occurrence, which was not allowed earlier. This aspect hugely favors companies like FedEx and UPS as they invest substantially toward capital expenditure.
Naturally, their tax bills for the year would be lowered significantly due to higher deductions. This, in turn, will leave more cash in the hands of these companies to fund their capital expenditures, acquisitions and share repurchases, among others...
In February, UPS raised its quarterly dividend by 6.4% to 83 cents per share ($3.32 on an annualized basis).

During the first nine months of the year, the company paid approximately $2.1 billion as dividend to shareholders. It also bought back bought back 12.3 million shares for about $1.4 billion in the same period."
At 52-Week Highs, Will FedEx & UPS Continue to Rally in 2018?

 

[zubenelgenubi]

Opening line at the contract negotiations:

Hey, UPS, wanna save more on taxes? Send summadat sweet skrilly scratch ovah hur.

 

[Catatonic]

Maybe sure up the pensions, signing bonus on top of all else, or something like that. A one time thing would be much better than an ongoing thing, because then we'd have people complaining concessions, once it goes away.

You say sure, I say shore.

 

[35years]

UPS was very involved in making this bill a reality.
Notice how many new buildings are being built this year, along with a huge buyback of stock (1.4B)...capital expenditures that are now deductible in the year of their occurrence.

 

[upschuck]

You say sure, I say shore.

Potato, potato

 

[Mugarolla]

But you see UPS will be able to take advantage of the same change in the tax bill that Fed-Ex calculated for itself...

Correct. But we do not know if they have the same, or similar, deferred tax liabilities as FedEx. This is where FedEx expects to save the other $1B. And this is, for the most part, only going to happen for one year.

UPS's tax deferred liabilities will be valued differently as well as Fed-Ex.

Correct. But what are they?

UPS has not said, and we do not know. We do not know if they are higher, lower, or if they even exist at all.

Just as Fed-Ex expects a $268M increase in profit because of the corporate rate cut to 21%; but a TOTAL 1.5 Billion boost from the tax bill overall...

Yes. Most of it coming from their deferred tax liabilities.

UPS can expect $650M from the corporate rate cut but a far larger TOTAL boost from the tax bill overall.

You cannot assume that without knowing what their deferred tax liabilities are. Just because Fedex's are huge, doesn't necessarily equate to UPS's being just as big, or bigger.

which would mean a TOTAL boost from the bill of 3 Billion for UPS.

Again, you are assuming. You have no facts except what FedEx said. You are assuming that since UPS is about double the size of FedEx that their savings will be double.

So perhaps there are other things in the bill which East Coast Navy alluded to that brings the boost to 6 Billion.

Nope. He calculated the new corporate tax rate using UPS revenue, not profit.

FedEx said their profit will greatly increase based on two facts.

But the shipping giant told investors in its earnings release that its annual profits for fiscal 2018 could increase by $4.40 to $5.50 a share, mainly due to a change in how it values deferred tax liabilities as well as the cut in the corporate tax rate to 21%.

the new law allows these companies to deduct their capital expenditures from taxable income in the year of their occurrence

OK. So what are UPS's capital expenditures, or what did UPS say they will save, like FedEx did?

FedEx never attributed their higher profit due to deducting their capital expenditures. So it is probably minimal.

This aspect hugely favors companies like FedEx and UPS as they invest substantially toward capital expenditure.

What favors transportation companies like FedEx and UPS is huge deferred tax liabilities.

UPS was very involved in making this bill a reality.
Notice how many new buildings are being built this year, along with a huge buyback of stock (1.4B)...capital expenditures that are now deductible in the year of their occurrence.

These buildings were being built long before UPS even knew that the change in the tax law would come to fruition.

They needed these just to keep up. Buildings are over capacity everywhere.

And I think the timing was more because of the upcoming contract, crying no money left, more so than believing the tax law would change.

 

[Mugarolla]

But you see UPS will be able to take advantage of the same change in the tax bill that Fed-Ex calculated for itself...
This is in addition to the corporate tax rate cut to 21%
UPS's tax deferred liabilities will be valued differently as well as Fed-Ex.

Just as Fed-Ex expects a $268M increase in profit because of the corporate rate cut to 21%; but a TOTAL 1.5 Billion boost from the tax bill overall...
UPS can expect $650M from the corporate rate cut but a far larger TOTAL boost from the tax bill overall. So, perhaps a benefit of 2x that of the smaller Fed-Ex... which would mean a TOTAL boost from the bill of 3 Billion for UPS. So perhaps there are other things in the bill which East Coast Navy alluded to that brings the boost to 6 Billion.

"Apart from the significant drop in corporate tax rate, the new law allows these companies to deduct their capital expenditures from taxable income in the year of their occurrence, which was not allowed earlier. This aspect hugely favors companies like FedEx and UPS as they invest substantially toward capital expenditure.
Naturally, their tax bills for the year would be lowered significantly due to higher deductions. This, in turn, will leave more cash in the hands of these companies to fund their capital expenditures, acquisitions and share repurchases, among others...
In February, UPS raised its quarterly dividend by 6.4% to 83 cents per share ($3.32 on an annualized basis).

During the first nine months of the year, the company paid approximately $2.1 billion as dividend to shareholders. It also bought back bought back 12.3 million shares for about $1.4 billion in the same period."
At 52-Week Highs, Will FedEx & UPS Continue to Rally in 2018?

I'll take you one step further.

FedEx had a $1.8B deferred tax liability last year.

This is what FedEx predicted a huge profit from under the new tax law.

So, does UPS have just as high deferred tax liabilities as FedEx?

Nope. Far from it.

UPS did not report a deferred tax liability, they actually reported a deferred tax asset.

This actually hurts them, and will cost them under the new tax law, it will not help them.

Tax Bill Will Deliver a Corporate Earnings Gusher

You're comparing apples to oranges. One company has huge deferred tax liabilities and the other company has huge deferred tax assets.

Big difference under the new tax law.

 

[East coast navy]

I'll take you one step further.

FedEx had a $1.8B deferred tax liability last year.

This is what FedEx predicted a huge profit from under the new tax law.

View attachment 176011

So, does UPS have just as high deferred tax liabilities as FedEx?

Nope. Far from it.

UPS did not report a deferred tax liability, they actually reported a deferred tax asset.

This actually hurts them, and will cost them under the new tax law, it will not help them.

Tax Bill Will Deliver a Corporate Earnings Gusher

View attachment 176010

You're comparing apples to oranges. One company has huge deferred tax liabilities and the other company has huge deferred tax assets.

Big difference under the new tax law.

I know we are all throwing numbers but ups has been say something needed to be done last year with plan to make a economic reform... Ups then said they like what trumps ministrations is saying about better trade deals (TPP) and economic reform talks... Then congratulating the us goverment on passing a tax reform bill...

Didn’t hear Fed smith at fedex say anything like this...

This tax law will help ups more then fedex... Maybe this is why FedEx pulled out of the TPP...

That’s got to Make you think about it alittle...

I’m sorry... I’m with more on 35years more then you bro.

 

[Dr.Brownz]

I HOPE THE TEAMSTERS WILL ASSERTAIN WHAT UPS EXPECTS THE IMPACT OF THE NEW TAX LAW TO HAVE ON UPS'S BOTTOM LINE. THEY SHOULD EVEN BE ABLE TO RUN A PROJECTION BASED ON LAST YEARS UPS FINANCIALS.

THE TEAMSTERS ALSO NEED TO ASK WHAT PROJECTED REVENUE INCREASE WILL RESULT FROM IMPLEMENTING THE NO SIGN AT BUSINESSES OR CHARGE FOR SIGNATURE CHANGE.

TEAMSTERS NEED TO BEND THESE HOES OVER!!!

In an ideal world UPS would invest the money from the tax break to improve conditions for employees but that wont happen so the best we can hope for is a significant pay raise or even a one time bonus of some kind but you know a one time payout would affect how the company decides to hire new drivers (as in obviously trying to wait till after the bonus is paid to hire or whatever)

 

[Mugarolla]

I know we are all throwing numbers but ups has been say something needed to be done last year with plan to make a economic reform... Ups then said they like what trumps ministrations is saying about better trade deals (TPP) and economic reform talks... Then congratulating the us goverment on passing a tax reform bill...

Didn’t hear Fed smith at fedex say anything like this...

This tax law will help ups more then fedex... Maybe this is why FedEx pulled out of the TPP...

That’s got to Make you think about it alittle...

I’m sorry... I’m with more on 35years more then you bro.

Yes, UPS may benefit from TPP reform. But if you think it will benefit to the tune of $6B increase in profit, you're crazy.

And yes, we are throwing numbers out there.

The thing about numbers.....they don't lie and they can be fact checked as opposed to someone's opinion.

And yes, UPS congratulated Congress on tax reform because they are going to see a 14% jump in profit, just due to the tax law.

I would be thanking them too.

But, come on, $6B to $8B more?

That would be doubling their profit.

You just need to run the numbers, whether you agree with me or not. If you run the numbers, we will be at the same conclusion instead of you speculating.

Again, $650M to $670M, a 14% jump in profit, is nothing to sneeze at.

 

[Mugarolla]

Remember, this is exactly what FedEx said and why they expect a $1.5B jump in profit.

mainly due to a change in how it values deferred tax liabilities as well as the cut in the corporate tax rate to 21%.

Most of the increase is from tax deferred liabilities.

There are articles out there on how companies with tax deferred liabilities will receive a big windfall.

But, UPS has no tax deferred liabilities. They actually have net deferred tax assets. There are also articles out there explaining how this hurts companies.

I think Citibank actually is taking a $20B charge because of its deferred tax assets. No windfall there. Actually a loss.

Other changes in the tax law may help, or hurt, but FedEx did not mention them, so they are probably minimal.

I also posted some of the numbers, freely available and published by each company. Look them up yourself if you do not believe mine.

This is simple math and accounting. No speculation at at. We know the numbers, we know the new tax code.

It's basically plug and play for the numbers and final increase in profit.

 

[542thruNthru]

You say sure, I say shore.

@Indecisi0n Please censor this post. It's a malicious personal attack!

 

[East coast navy]

Remember, this is exactly what FedEx said and why they expect a $1.5B jump in profit.

mainly due to a change in how it values deferred tax liabilities as well as the cut in the corporate tax rate to 21%.

Most of the increase is from tax deferred liabilities.

There are articles out there on how companies with tax deferred liabilities will receive a big windfall.

But, UPS has no tax deferred liabilities. They actually have net deferred tax assets. There are also articles out there explaining how this hurts companies.

I think Citibank actually is taking a $20B charge because of its deferred tax assets. No windfall there. Actually a loss.

Other changes in the tax law may help, or hurt, but FedEx did not mention them, so they are probably minimal.

I also posted some of the numbers, freely available and published by each company. Look them up yourself if you do not believe mine.

This is simple math and accounting. No speculation at at. We know the numbers, we know the new tax code.

It's basically plug and play for the numbers and final increase in profit.

I’m sorry I disagree with you. Ups is going to make a butt load of money on this and they are Loving the fact you are tell me they are not. Right before contract time... LOVING IT!!

 

[East coast navy]

Remember, this is exactly what FedEx said and why they expect a $1.5B jump in profit.

mainly due to a change in how it values deferred tax liabilities as well as the cut in the corporate tax rate to 21%.

Most of the increase is from tax deferred liabilities.

There are articles out there on how companies with tax deferred liabilities will receive a big windfall.

But, UPS has no tax deferred liabilities. They actually have net deferred tax assets. There are also articles out there explaining how this hurts companies.

I think Citibank actually is taking a $20B charge because of its deferred tax assets. No windfall there. Actually a loss.

Other changes in the tax law may help, or hurt, but FedEx did not mention them, so they are probably minimal.

I also posted some of the numbers, freely available and published by each company. Look them up yourself if you do not believe mine.

This is simple math and accounting. No speculation at at. We know the numbers, we know the new tax code.

It's basically plug and play for the numbers and final increase in profit.

So you mean to tell me Fedex gains more money in tax cuts then ups? Then Why is ups thanking Trump and not Fedex?

If it smells like fish, it’s fish!

 

[Mugarolla]

I’m sorry I disagree with you.

Don't be sorry. I have always said that I never have an issue with agreeing to disagree with someone.

Ups is going to make a butt load of money on this

Yes, but hundreds of millions, not billions.

they are Loving the fact you are tell me they are not.

They know they are not. They don't care what I tell you.

Do you want to pretend that they are going to get billions and then we strike to get some of this non-existent money?

Right before contract time... LOVING IT!!

UPS cannot hide from the investors, or us, what they will gain from the new tax law.

It is simple math. Run the numbers. I'm sure Hoffa's negotiating team have already run them.

But, it is millions, not billions.

So you mean to tell me Fedex gains more money in tax cuts then ups?

Yes.

I don't expect everyone, or fault anyone, for not fully understanding tax law and accounting. It is not for everyone.

Again, FedEx will get almost all of its windfall from its deferred tax liabilities.

Analysis | FedEx Good News Gets Even Better With Big-League Tax Cut: Gadfly

Quoted from the article....

That FedEx of all companies would start running the numbers before the tax bill has even become law isn’t surprising. CEO Fred S is a major fundraiser for Republicans and earlier this year was pitching his own version of tax reform. The biggest reason for the 2018 boost is the revaluation of net deferred tax liabilities, according to the company.

UPS has no deferred tax liabilities, so they will not see this boost that FedEx gets.

UPS actually has tax deferred assets, and this hurts them. It will hurt a lot of companies, not just UPS. Any company with deferred tax assets. Read on.

Tax Bill Will Deliver a Corporate Earnings Gusher

Citigroup Inc., which has by far the biggest pile of deferred U.S. tax assets, at $43 billion, has estimated that it will have to take a $20 billion earnings charge. Fannie Mae and Freddie Mac, which normally hand all their earnings over to the Treasury Department, have cut a deal to retain $3 billion each in order to cover the tax-asset-related losses they expect to face. Other big losers, according to a handy roundup assembled last week by MarketWatch's Francine McKenna, include General Motors Co., American International Group Inc., Bank of America Corp. and Ford Motor Co.

Unlike UPS, FedEx has huge deferred tax liabilities.

But most big corporations don't have giant piles of deferred tax assets. They're far more likely to have giant piles of deferred tax liabilities -- which means that the new tax law will, along with cutting their taxes going forward, deliver a big one-time boost to 2017 earnings as the lower corporate tax rate shrinks the value of those liabilities. Of the 200 largest U.S. corporations, ranked by market cap, only five have net deferred tax assets of more than $5 billion. Twenty-eight have net deferred tax liabilities bigger than that.

UPS will only see a boost from the reduced Corporate Tax Rate.

Again, hundreds of millions, not billions.

Then Why is ups thanking Trump and not Fedex?

You think that making an additional $1.5B, that Fred S would be thanking Trump. I cannot answer whether he did or not.

UPS is getting an extra $650M, and they thanked him.

Go figure.

 

[cachmeifucan]

That's the scary part they offer 1000 bonus to ft employees and 500 to part time employee. Then they cut language and other deeper issues that most people with less then 5 years care about then the contract passes and all IL get after taxes is 650. We need better language and no split raise

 

[Staydryitsraining]

They are record profitable. This means anything conceded including even paying a dollar for our health insurance is profit for them. When they actually loose money then talks of giving up or paying for something should happen.

 

[Frankie's Friend]

But, come on, $6B to $8B more?

That would be doubling their profit.

You just need to run the numbers, whether you agree with me or not. If you run the numbers, we will be at the same conclusion instead of you speculating.

Again, $650M to $670M, a 14% jump in profit, is nothing to sneeze at.

Their net profit or their actual profit made before they started spending it on infrastructure, technology (to reduce the workforce and hours thereof), etc, etc, etc?
It was allegedly 9 billion in 2016 not <>5 bil. So it is not "doubling" as you assert. How many of us (bargaining unit) actually know the true profit amount? I would say there are a very few that have a close hypothesis.