For the third quarter of 2021, GAAP results included after-tax transformation and other charges of $54 million or $0.06 per diluted share.
In the 17 months that I've been CEO, I've learned that no matter what comes our way, UPSers deliver.
Consolidated revenue rose 9.2% from last year to $23.2 billion, driven by another quarter of improved revenue quality across all three of our operating segments.
Consolidated operating profit grew 23.4% to $3 billion, driven by solid revenue growth and strong expense control.
We will now cover about 90% of the U.S. population on Saturday for both residential and commercial pickups and deliveries.
In the U.S., SMB average daily volume, including platforms, was up 10.9% year over year.
volume, up 380 basis points from one year ago.
And outside the U.S., SMB average daily volume growth was 3.9%.
And just on COVID-19 vaccines, we are on track to deliver more than 1 billion vaccine doses by the end of this year with 99.9% on-time delivery.
In the U.S. we drove a measurable improvement in productivity as PPH, or pieces per hour, increased by 2.5%.
Additionally, as Nando described at our June Investor Day, through our ongoing efforts to optimize loads in our trailers, cube utilization in the third quarter was up 520 basis points versus last year.
This helped us eliminate more than 10% of daily trailer loads year over year.
So to reduce turnover and improve productivity, we are converting around 1,000 part-time supervisor positions in our operations into nearly 400 full-time positions at no additional cost to our company.
Turning to what we refer to as Transformation 2.0 or plans to optimize our nonoperating expense.
We are on track to eliminate $500 million in nonoperating costs this year, with about $500 million of additional opportunity in 2022.
So far this year, we've generated a record $9.3 billion in free cash flow.
And we expect full-year 2021 return on invested capital to be around 29%, which is a 730-basis-point improvement from what we reported at the end of last year.
enabling qualified applicants to receive a job offer within 30 minutes of applying.
The 2022 increase will be 5.9%, reflecting the value of the services we offer and cost inflation pressures.
IHS is forecasting fourth-quarter global GDP will grow 3.8% and U.S. GDP is expected to grow 4.9%, which remain above historic GDP growth rates.
Moving to our third-quarter consolidated performance.
Consolidated revenue increased 9.2% to $23.2 billion.
Consolidated operating profit totaled $3 billion, 23.4% higher than last year.
Consolidated operating margin expanded to 12.8%, which was 150 basis points above last year, and diluted earnings per share was $2.71, and up 18.9% from the same period last year.
As we expected, average daily volume in the U.S. was down 540,000 pieces or 2.7% due to a decline in SurePost of 576,000 packages per day.
In fact, customer mix continued to be positive as higher-yielding SMB average daily volume, including platforms, was up 10.9%.
And in the third quarter, SMBs made up 27.4% of U.S. domestic volume, compared to 23.6% last year.
Regarding our delivery mix, our commercial business continued to recover and grew 6.8%, representing 42% of our volume in the third quarter, compared to 39% in the third quarter of last year.
For the quarter, U.S. domestic generated revenue of $14.2 billion, up 7.4%, driven by a 12% increase in revenue per piece with fuel driving 270 basis points of the revenue per piece growth rate.
Total expense grew 5.8% and with fuel driving 180 basis points of the year-over-year expense growth rate.
And in the third quarter, we made improvements in nearly every area of our operations, led by preload, which improved by 6.5%.
Combined, these improvements contributed to a decrease in direct labor hours per day of 5.1%.
The U.S. Domestic segment delivered $1.4 billion in operating profit, an increase of $281 million or 24.8% compared to last year, and operating margin expanded 140 basis points.
Due to tough year-over-year comparisons and some supply chain disruptions, growth in average daily volume moderated in the third quarter and was up 1.9%.
B2B average daily volume grew 3.8% on a year-over-year basis and offset a decline in B2C volume, which was down 2.3%.
On a two-year stack, total average daily volume was up 14%.
Total export average daily volume was up 1.3% on a year-over-year basis.
Export growth in Europe and the Americas offset a 4.8% decrease in export average daily volume out of Asia.
Relative to our plan, we had 137 fewer flights out of Asia than we anticipated.
For the quarter, international revenue was up 15.5% to $4.7 billion with strong growth across all regions.
Revenue per piece was up 14%, including a 500 basis point benefit from fuel.
In the third quarter, international delivered its fourth consecutive quarter of profits over $1 billion.
Operating profit was $1.1 billion, an increase of 14%, and operating margin was 23.5%.
Revenue increased 8.4% to $4.3 billion with all major business categories contributing to profit growth.
In the third quarter, supply chain solutions generated record operating profit of $448 million, and the operating margin was an impressive 10.5%.
Walking through the rest of the income statement, we had $177 million of interest expense.
Other pension income was $285 million.
And lastly, our effective tax rate came in at 22.3%, which was lower than last year due to favorable changes in jurisdictional tax rates and discrete items.
So far, in 2021, we have generated a record $11.8 billion in cash from operations and $9.3 billion in free cash flow.
And in the first nine months of this year, UPS has distributed $2.6 billion in dividends.
In August, we announced a $5 billion share repurchase plan.
with the intent to repurchase $500 million of shares in 2021, which we completed in the third quarter.
On a consolidated basis, we expect full-year 2021 revenue growth of around 13.8% year over year, which takes into account the divestiture of UPS freight.
Additionally, consolidated operating margin should be around 13%.
In U.S. domestic, we anticipate full-year 2021 revenue growth of about 12.7% with revenue growing faster than volume.
We anticipate the full-year 2021 U.S. operating margin will be around 10.5%.
And second, we are lapping more than $550 million in peak season surcharges in addition to the early customer pricing actions we implemented last year as a part of our revenue quality initiatives.
We expect full-year revenue growth of around 20.7%, with an operating margin of about 23.9%.
And in the supply chain solutions segment, we anticipate full-year revenue growth of around 10.3% and operating margin of about 10%.
Additionally, for the full year in 2021, we expect free cash flow to be around $10.5 billion, and return on invested capital will be around 29%.
Capital expenditures are now expected to be approximately $4.2 billion.
And lastly, our effective tax rate for the full year is expected to be about 22.5%.

Summary:
For the third quarter of 2021, GAAP results included after-tax transformation and other charges of $54 million or $0.06 per diluted share.
Consolidated revenue rose 9.2% from last year to $23.2 billion, driven by another quarter of improved revenue quality across all three of our operating segments.
And we expect full-year 2021 return on invested capital to be around 29%, which is a 730-basis-point improvement from what we reported at the end of last year.
Moving to our third-quarter consolidated performance.
Consolidated revenue increased 9.2% to $23.2 billion.
Consolidated operating margin expanded to 12.8%, which was 150 basis points above last year, and diluted earnings per share was $2.71, and up 18.9% from the same period last year.
On a consolidated basis, we expect full-year 2021 revenue growth of around 13.8% year over year, which takes into account the divestiture of UPS freight.
Additionally, for the full year in 2021, we expect free cash flow to be around $10.5 billion, and return on invested capital will be around 29%.
Capital expenditures are now expected to be approximately $4.2 billion.