Revenue per piece was up 2.7%, and included a decline of 260 basis points from fuel and a benefit of 140 basis points from currency. And finally, our international operating margin expanded 400 basis points. But when you have a lot of new people in your operations, sadly, we just weren't as productive as we should have been. Further, revenue growth in our International and Supply Chain & Freight segments was the highest quarterly growth we’ve seen in nearly three years. UPS posted adjusted earnings of $1 billion, or $1.15 a share, down from $1.2 billion, or $1.39 a share, in the comparable year-ago quarter and below the $1.24 a … If I talk to you about the cost of turnover, which I'm not going to do now, but the cost of turnover is high for our company. Thanks, good morning, everyone. UPS reported Q3 2020 earnings on October 28. Transformation 3.0 will focus on decreasing core operating expense. Could you just add some more color specifically mainly around some of the red dots that you guys came up with? Yeah, thanks for your question. So it’s a different type of spend going forward, but I don’t want to front run the Investor Conference next year. Steven, it's Scott. Thank you. But for next year, we’re going to sweat the investments that we’ve made. We’re over a $1 billion in casualty reserves. The commercial side of SMB was down, call it, 7% in the quarter, but the residential piece of SMB was up 62%. We are moving quickly in operationalizing our strategy under the better, not bigger framework. It's about the patient. We are making progress, but given the size of our business, it will take time to optimize our network to stop processes that have added cost and no customer value and to fully reach our potential. And it’s not just about putting more packages through our facilities on a per hour basis. Yes. So our business trends continue to be very strong coming out of our International business. Conversely, performance in our truckload brokerage unit had a negative impact to profit on a year over year basis due to continued market challenges. Thank you, Scott. Following our prepared remarks, we will take questions from those joining via the teleconference. Where you thought they'd be at this point of the cycle, the investment cycle for you? As we've unpeeled the layers of the onion, we've discovered an opportunity to sweat our assets in a more efficient way. The one comment I would make on the margin, which was outstanding and the profit growth in the third quarter. The webcast of today's call, along with the reconciliation of non-GAAP financial measures, are available on the UPS Investor Relations website. So to your point, it’s a balance. We are making progress, but given the size of our business, it will take time to optimize our network to stop processes that have added cost and no customer value, and to fully reach our potential. Please go ahead. Sweating the existing investments that we’ve made is a really good thing in next year. Our customers across all business segments are reinventing the ways they do business. Capital investments totaled $3.4 billion through September, and we expect full year capex of $5.6 billion and remain on track with our automation targets for 2020. Next, new legislation in 2019 for alternative fuel tax credits and reductions in management incentives, which together lowered operating expense last year by about $150 million, are not expected to repeat, and the acceleration of our time and transit and weekend operations initiatives. 2020 peak will have two more operating days than last year, and two full weeks between Cyber Week, and Christmas Week. We work with our customers to help them rethink their operations, be a buy-online-pickup-in-store, different timing for their promotions, a different availability of their packages, so a number of alternatives and options that we’ve been working through, a solution-based approach with our customers. Well, we are finalizing our capital plans as we speak. Yeah. Neither the information nor any opinion expressed in this transcript constitutes a solicitation of the purchase or sale of securities or commodities. But there are three, in particular, that -- Q4 headwinds. Many industrial businesses that UPS (ticker: UPS) delivers to are closed to help slow the spread of Covid-19. They’re putting on uniforms and they’re flying planes and driving package cars and delivering packages and sorting packages, and I’m just so proud of them. In the prior year period, GAAP results included a pre-tax charge for transformation cost of $63 million, equivalent to $0.06 on diluted earnings per share. Now clearly, we need to work with our customers to optimize the fixed investments that we've made, but we clearly have opportunities here to sweat the assets. But when you put that aside, is the incremental pull-through from those volumes that you’re getting on SMB where you thought they’d be at this point in this cycle — the investment cycle for you or are they better? While we saw positive B2B growth in healthcare and automotive, that growth was not able to offset weakness in other industrial sectors. Jack Atkins of Stephens. Allison Poliniak -- Wells Fargo Securities -- Analyst. And what this allows us to do actually is to, without debate or controversy, talk about the real opportunities to move and to get movement on the U.S. operating margin. Transformation 2.0 is about creating fewer but more impactful jobs. United Parcel Service (UPS) reports earnings on 1/27/2021. First, our initiatives to expand weekend operations and speed up the ground network. But as we start to pivot into this, through the fourth quarter into 2021, we’re going to be laying out tangible action plans that will show improvement in the operating margin, and then as we optimize our capital spending where it all translates into higher return on invested capital. And then we'll lay that out for you, so that you can hold us accountable to what we said we're going to do. For the third quarter, International generated operating profit of $972 million, an increase of 40.3%, led by elevated demand out of Asia. The customer wants a digital experience. But I think you can look for underlying continued improvement in the the RPP, ex-fuel and SurePost. ET, October 28, 2020. Moving over to International. And when you think of those customers, think of it like a pyramid. We have a question from the line of Allison Landry of Credit Suisse. We're leaning in on the wildly important areas of our business and tackling challenges head on. So you can do the math of what that might translate into savings. We understand that healthcare logistics isn't just about the package. Through platform partnerships, we are making it easier for SMBs to open a UPS account and access the world's largest small package network. We now think the operating margin in the back half of the year will be higher than the first half of the year. Brian will share more details about the quarter in a moment. In One Earnings Call, UPS CEO Makes Job Her Own Brooke Sutherland 7/30/2020. Please go ahead. And for that, I am really proud of this team and want to thank them for their hard work and efforts. The segment delivered another quarter of record operating profit, with double-digit positive year-over-year growth. And the growth came from our medium-sized businesses as well as our platform businesses. We executed extremely well within a tight capacity market and were able to meet high demand out of Asia. So it stepped down from Q2 to Q3 by about 50%. Just directionally, should we be thinking a $1 billion-plus or potentially multiple billions of cost savings here? While we are finishing Transformation 1.0, we have already begun Transformation 2.0, and we are road mapping Transformation 3.0 in preparation to launch next year. So obviously, we’re watching that very closely, but the overall business is sound. I just wanted to kind of maybe talk about a similar thing. We have a question from the line of David Vernon of Bernstein. [Technical Issues] the call and to ask a question. Thanks. But when you have a lot of new people in your operations, sadly, we just weren’t as productive as we should have been. Whenever UPS, Inc. posts new information to the site. Early involvement gives us valuable data and insights to design commercial distribution plans and manage the logistics for these complex products. One of the wildly important initiatives is people. And we will be at parity or better than the competition in 20 of the 25 most populated U.S. markets, and customers have noticed. From a customer-first perspective, there has been a step change in the composition of retail sales as e-commerce sales are now projected to make up more than 20% of all U.S. retail sales this year. Consolidated revenue in the quarter rose 15.9% from last year to $21.2 billion, and operating profit grew 9.9% from last year to $2.4 billion. So what does this mean for our business? And within platform or from the platform segment, that’s where DAP falls. So we’ve actually been controlling the volumes since July, and we’re doing that in a number of different ways. A few notable items on the income statement include other pension income was $327 million driven by last year's 17.6% return on pension assets and the discount rate was 90 basis points below last year. So, if you could just speak to how you’re balancing this and while at the same time trying to maximize asset utilization. Yes. Now I'll make a few comments regarding the balance of the year. Yes. We’d expect that to moderate in the fourth quarter. Is that what you're saying, if I'm understanding you correctly? Well, the one comment I would make on the margin, which was outstanding, and the profit growth in the third quarter, we did have surcharge in the third quarter because the capacity is just so tight. But I really want to work on the short term incentives. And that’s just a hint of what’s to come. And if you get ahead of our skis, you tumble down the mountain. During the quarter, we adjusted our network and took deliberate actions to better position UPS for the future. Thank you, Carol. We had $176 million of interest expense, which is above last year due to our $3.5 billion debt issuance in March. So Nando came back and said, "Carol, we send 462 reports to our operators every week to work." $100 million can move that U.S. operating margin in a meaningful way. And the operating margin has come in about 23% for the last two quarters. See United Parcel Service, Inc. (UPS) stock analyst estimates, including earnings and revenue, EPS, upgrades and downgrades. So hopefully, COVID has settled down. We -- better at keeping our people safe, so we lower our casualty reserves. While our commercial business remained under pressure due to the economic downturn, during the quarter, we began to optimize our network and captured share in SMB, or small and medium-sized businesses. We're over $1 billion in casualty reserves. Domestic segments. Capital investments totaled $3.4 billion through September and we expect full year capex of $5.6 billion and remain on track with our automation targets for 2020. This morning, I'm pleased to discuss our achievements in the opportunities we see before us. When did that equation could have shift? Please go ahead. Together, those are about $150 million lap. The firm exceeded revenue and earnings expectations for the quarter. We’ve got time for one more question, if you would. That's clearly the U.S. small package business is going to grow. Jordan Alliger, Goldman Sachs. We had some pressures in the third quarter, which we discussed. Additionally, our approach calls for greater efficiency and requires that we lower our cost to serve. July 30, 2020. Well, the team has done a really great job of defining what it means. Our next question will come from the line of Brandon Oglenski of Barclays. In the U.S., consumer confidence has held up well. But I think you can look for underlying continued improvement in the RPP ex fuel and SurePost. We had this initiative called UPS Next and UPS Next was all about driving innovation in the company. So those, combined with the fastest ground ever that we'll finish off in Q4 investments, that's going to put pressure on the fourth quarter as we look forward. That decision cost us $179 million in the quarter. It's about value share growth. In many ways, UPSers are our first responder. We have a new leader over our U.S. These reports when filed are available on the UPS Investor Relations website and from the SEC. It is now my pleasure to turn the floor over to your host, Mr. Scott Childress, Investor Relations Officer. There is a big watch out, though, because of COVID. I wanted to — with the Better and then Bigger theme, I wanted to understand how you’re changing your incentive compensation in — to align with that. Just turning to the SMB initiatives, clearly, gaining some share there. And kind of going back to what you just mentioned about value share, is that something UPS can do by themselves if the rest of the industry is going to try to take share and kind of aggressively grow capacity and pursue that growth? The other thing I would ask you to also remember is as we grow outside of the United States, our International business tends to have an asset-light profile in most areas of the rest of the world. Looking ahead, our peak plans, volume management, and surcharge approach will also help promote a more optimized volume mix. That is not what I’m saying. We have more work to do and plan to provide additional detail about our actions during an Investor Day we will host in 2021 once the environment is more stable. If we’re losing non-nutritive sales, we’re okay with that. Appreciate it. And then, Carol, you made a — I had a great line last quarter about the Bs and referring to billions of cost savings. Carol, you talked about capex on the call, and I thought that was kind of interesting. Nando is just all over this, and productivity is going to be a laser focus of Transformation 3.0. In fact, many large retailers ran e-commerce sales events in mid-October and our network performed well during this period with high service levels and good productivity. The final piece of our strategy, innovation-driven, comes down to being better, not bigger. Overall, we are pleased with our results in the quarter. We have everyday heroes at UPS who are keeping the world’s supply chains moving and delivering what matters. If you look at the underlying health of the price and the quality of overall revenue, really, it's more than just pricing. The transportation company reported $2.28 EPS for the quarter, beating the consensus estimate of $1.86 by $0.42. David Ross -- Stifel Financial Corp. -- Analyst. The real money — and candidly, our non-operating expense was about $6 billion on an annual basis. Our fastest ground ever, weekend services and DAP complement each other enabling our customers to deliver what matters to their customers, speed and a better experience. Wall Street earnings estimates, as a result, fell over the past few weeks. We are seeing strong results in the International segment, too, with the international SMB volume up 9.9% during the quarter. So now, when you think about our SMB customers, think of them as medium, small, micro and platform. Three key items have underscored our performance. Carol, do you want to comment on the B? And next week, we will complete our fastest ground ever initiative eight months ahead of plan. What is — one more question, to the next caller, please. That was the first time we saw a positive number there in quite some time. Thanks. So if I told you that our casualty reserves that are driven by the workers' comp and either all the liability, Brian, they stand at how much? 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