Also Approves Stock Repurchase Authorization; Company Announces Financing Plan for TNT Acquisition
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, which reflects a 10 percent increase approved in February, is payable May 30, 2012, to shareholders of record on May 14, 2012.
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.”
UPS and TNT Express announced on March 19 a definitive all-cash offer of EUR 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 new debt, the company said it would determine details of maturity and a timetable for the new issuance at a later date.
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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.