Also Approves Stock Repurchase Authorization; Company Announces Financing Plan for TNT Acquisition
WILMINGTON, Del., May 3, 2012 -- The UPS (NYSE:UPS) Board of Directors today declared a regular quarterly dividend and approved a $5 billion stock repurchase authorization.
Meeting in regular session following the company's annual shareowners' meeting, the Board declared a regular quarterly dividend of $0.57 per share on all outstanding Class A and Class B shares. The dividend is payable May 30, 2012, to shareholders of record on May 14, 2012, and reflects a 10% increase over last year.
The new share repurchase authorization has no expiration date and replaces one originally announced in 2008.
UPS also announced several financial steps designed to facilitate the acquisition of TNT Express N.V. (NYSE Euronext:TNTE) while maintaining its commitment to a strong balance sheet and returns to shareowners.
UPS expects to use approximately $5 billion of available cash and issue about $1.8 billion in new debt to finance the acquisition of TNT Express. Compared to the company's initial guidance, this represents a $2 billion increase in cash used to fund the acquisition.
In addition, the company revised guidance for share repurchases. UPS plans to spend $1.5 billion on share repurchases in 2012 and expects the same level of activity in 2013.
"UPS's legacy of financial strength allows us to complete the acquisition of TNT primarily using cash," said UPS Chairman and CEO Scott Davis. "At the same time, UPS remains committed to its policy of shareowner returns through dividends and share repurchases. We believe this acquisition creates a global leader in the logistics industry, enhancing long-term growth for UPS investors."
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UPS and TNT Express announced on March 19 a definitive all-cash offer of €9.50 per ordinary share of TNT, valuing the deal at roughly $6.8 billion. The acquisition, which must be reviewed by European Union regulatory authorities, is expected to close in the third quarter.
In deciding to use a combination of cash and debt, the company said it would determine details of maturity and a timetable for the new issuance at a later date.
UPS (NYSE:UPS) is a global leader in logistics, offering a broad range of solutions including the transportation of packages and freight; the facilitation of international trade, and the deployment of advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the Web at UPS.com and its corporate blog can be found at blog.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS.
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This is a press release by United Parcel Service, Inc., pursuant to the provisions of Section 4 Paragraph 3 of the Decree on Public Takeover Bids (Besluit Openbare Biedingen Wft) in connection with the intended public offer by United Parcel Service, Inc. or a wholly owned subsidiary of United Parcel Service, Inc. for all the issued and outstanding ordinary shares in the capital of TNT Express N.V. For the avoidance of doubt, this is not a certain funds announcement as referred to in Section 7 Paragraph 4 of the Decree on Public Takeover Bids (Besluit Openbare Biedingen Wft), which will be made ultimately on 11 May 2012 in accordance with the applicable rules. This announcement does not constitute an offer, or any solicitation of any offer, to buy or subscribe for any securities in TNT Express N.V. Any offer will be made only by means of an offer memorandum. This announcement is not for release, publication or distribution, in whole or in part, in or into, directly or indirectly, Australia, Canada or Japan.
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. 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. 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, our competitive environment, increased security requirements, strikes, work stoppages and slowdowns, changes in energy prices, governmental regulations 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.