United Parcel Service

Jeremy Gogel
3-2-2006
Finance 4201
 Stock Profile
Last Trade:74.71
Day's Range:74.63 - 75.9152
Wk Range:66.10 - 79.97
Volume:2,858,600
Avg Vol (3m):2,577,950
Market Cap:82.45B
P/E (ttm):21.54 (24.22 Ind avg.)
EPS (ttm):3.47 (1.04 Ind avg.)
Div & Yield:1.52 (2.00%)

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 World’s Largest Package
Delivery Company
•Started in 1907 in Seattle.
•2005 Annual Revenue $33.4 billion
• Deliver 13.6 million packages daily (150
packages per second)
• 7.9 million daily customers
• Reaches more than 200 countries/territories
worldwide
• Every address in the United States
• UPS has more than 88,000 vehicles
• Approximately 360,000 employees
• UPS is the 11th largest airline in the World (581
aircraft owned)

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What can BROWN do for you?

UPS has three different business segments

• US Package Operation
International Package Operation
Non-Package Unit (UPS Supply Chain Solutions)

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UPS Package Services
U.S. Services International Services
UPS Next Day Air® Early A.M.® UPS Worldwide ExpressSM
UPS Next Day Air® UPS Worldwide Express PlusSM
UPS Next Day Air Saver® UPS Worldwide ExpressSM NA1
UPS 2nd Day Air A.M.® UPS Express Saver 
UPS 2nd Day Air  UPS WorldEaseSM
3 Day Select® UPS Worldwide ExpeditedSM
UPS Guaranteed Ground  UPS Standard 

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 Domestic Segment
•Ground volume increased 4 percent (408,000 packages) per day.
•Revenue per piece was up 2.1 percent
•New technology had a negative impact on profitability of about $150
million
•Growth is focused on better alignment of resources, cross-selling of
integrated solutions and expansion of the product portfolio

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 International Segment
•International operations achieved large gains in 2004
•Favorable currency translation accounted for only $54
million of the $412 million increase in profits
•Operating profit was over $1 billion for the first time and
•Operating margins increased to 16.6%; best in industry

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 Global Leader in Supply Chain Services

Supply Chain Solutions

International Trade Management Consulting 
Logistics and Distribution 
Transportation Management and Freight Forwarding 
Service Parts Logistics 
Financial Services
Global Trade Finance 
Export-import Lending 
Electronic Services
UPS Internet Shipping 
UPS OnLine® WorldShip®

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 Supply Chain Solutions
•UPS Supply Chain Solutions is the largest business unit within the
non-package segment.
•Total supply chain spending around the world is over $3 trillion.
Only about 10 percent is currently outsourced. The outsourced
market, however, is growing at a 12 percent annual rate.
•UPS has targeted several industries where it sees substantial supply
chain management growth opportunities, including the health care,
automotive, high-tech, retail, consumer, and government sectors.

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 Growth Opportunities
•UPS invests hundreds of millions of dollars annually for facilities, vehicles, and aircraft.
•Construction continued on the expansion of the company’s automated air hub in Cologne,
Germany — the largest hub outside the United States.
•UPS is extending its presence in Asia. UPS has gained 12 additional air routes to more
extensively serve parts of China, Japan, and Hong Kong.
•Network improvements reduced transit times by one day on ground service between 20
metropolitan areas, including Atlanta, Baltimore/Washington, D.C., Chicago, Dallas,
Houston, Kansas City, Los Angeles, Philadelphia, and Pittsburgh.
•UPS will continue enhancing transit times in 2005 and beyond.

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 UPS USPS FDX Deutsche Post Industry
Market Cap: 83.12B N/A 33.56B N/A 1.19B
Employ­ees: N/A 346,410 215,838 704,716 3.21K
Qtrly Rev
Growth (yoy): 21.50% N/A 10.30% N/A 18.80%
Revenue (ttm): 42.58B 60.74B 30.85B 69.91B 1.53B
Gross Margin
(ttm): 100.00% N/A 67.17% N/A 32.11%
EBITDA (ttm): 7.76B N/A 4.17B N/A 111.30M
Oper Margins
(ttm): 14.43% N/A 8.67% N/A 5.85%
Net Income
(ttm): 3.87B 2.17B 1.58B 1.45B 16.66M
EPS (ttm): 3.468 N/A 5.114 N/A 0.83
P/E (ttm): 21.72 N/A 21.59 N/A 23.8
PEG (5 yr
expected): 1.36 N/A 1.18 N/A 1.47
P/S (ttm): 1.95 N/A 1.09 N/A 0.64

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 Valuation
Beta: .49
Growth Rate: 7% (I think this is low)
Rate of Return: 8%
Value: $100 per share

Buffett: $80.28 (7% for first 10, 2% thereafter)

Analysts: $85.36-$91.96 for fiscal 2006.

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 Recommendation
Hold
Why?
•I really like the dividend;
its increased by 81% since 2003.
•I think UPS can capitalize on the
increasing supply chain market.
•Very little risk, but still room for
growth.

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Questions?

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