United Parcel Service Inc. profited enough from euro-dollar trades related to its proposed purchase of TNT Express NV to make up for the breakup fee incurred when regulators blocked the deal.
UPS converted dollars into euros throughout 2012 in anticipation of using cash for half of the 5.16 billion-euro ($6.6 billion) deal, with a surge in the last half when the euro was "quite low, in the $1.20s," Chief Financial Officer Kurt Kuehn said yesterday in a phone interview.
"Once we realized the deal wasn't going through, we moved it back to dollars in March" and put a hedge in place to protect the trade, said Andy Dolny, UPS's treasurer and head of investor relations. During the quarter the swap was made, the euro had an average value of $1.32. That compares with $1.2860 in 2012, when it reached a yearly low of $1.2043 in July.
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