UPS Settles With SEC Over Freight Business Valuation
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UPS Inc. has reached a $45 million settlement with the U.S. Securities and Exchange Commission over claims made by the agency that the parcel carrier improperly valued its freight business in its financial results reporting.
The case centered on SEC claims that UPS did not follow generally accepted accounting principles when it evaluated its less-than-truckload operations in 2019 and 2020, the SEC said Nov. 22 in a statement.
In particular, the SEC in its order said that UPS used an outside consultant to value the business without providing certain information, such as the company’s own internal analysis of the freight business.
Per the SEC, UPS didn’t inform the consultant it had concluded that “a prospective buyer would expect Freight to generate significantly less profit after it was sold because it would no longer benefit from synergies and other cost savings it was getting as part of UPS.”
The agency argued that UPS by improperly valuing its freight business misrepresented the LTL unit’s financial results during the time in question.
UPS neither admitted nor denied the SEC findings, but agreed to avoid such violations in the future, the SEC said.
“Had UPS properly valued Freight, its earnings and other reported items would have been materially lower,” the agency said.
UPS sold its freight business to TFI International in 2021 for $800 million.
The company didn’t immediately respond to a request for comment from Bloomberg.
UPS ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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