What's Actually 'Actual'

What's Actually 'Actual'

Copyright 2002, Traffic World Magazine

Your Feb. 25 correction to "Ready, Get Set ..." (Feb. 11) is itself in need of radical correction.

UPS now takes issue with having their 1999 net income reported as $883 million, a figure that is net of funds set aside to cover a 1999 U.S. Tax Court judgment against the company.

Yet in January 2000, UPS issued a press release and summary income statement that reported 1999 net income at $883 million, a 49.3 percent drop from the previous year. This figure reflected the recording of the "special tax assessment" of $1.786 billion that reduced the company's net income by $1.442 billion.

Apparently, this figure fell out of favor with the top brass. A year later in its 2000 annual report, UPS reported adjusted net income at $2.325 billion. Buried in a corresponding footnote is an indication that the figure excluded the $1.442 billion tax assessment charge. "Actual net income reported in 1999 was $883 million," the company conceded in the fine print. Perhaps it all depends on what the meaning of "actual" actually is.

In June 2001, the U.S. Court of Appeals overturned the 1999 tax court ruling. A UPS spokesman said that if the company regains some or all of the $1.786 billion held in escrow, it could use it for capital expenditures, new services or acquisitions.

On January 29, during a UPS webcast, CFO Scott Davis announced that the tax dispute would return to a federal tax court because the IRS missed a deadline to appeal to the Supreme Court. Kurt Kuehn, UPS vice president for investor relations, said that UPS may negotiate a settlement with the IRS but would not predict how long it will be until the matter is closed. Should the case be settled in complete favor of UPS, the company will recoup the $1.786 billion plus interest.

The numbers the Teamsters Union provided are accurate. Rather than simply repeat whatever is fed to them by UPS, Traffic World editors should be true to their craft and do some serious fact-checking in their reports. That goes for corrections as well.

Bret Caldwell

Director of communications

Teamsters Union

Washington, D.C.