UPS 2005 Annual Report Download - page 7
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UPS Annual Report 2005
• Grow our small package business by at least
market rates in the United States and faster than
market rates in other major regions of the world
• Aggressively expand freight services in
specifi c markets
• Focus our supply chain activities on the
high tech, health care and retail sectors where
connectivity across all UPS businesses is strong
• Operate a sustainable enterprise that balances
the economic, social and environmental
consequences of our business practices
Our growth strategy aims to create deeper connections
with our customers. When we walk into their offi ces
today, we ask questions like:
• What do you need?
• What’s in your way?
• Where do you go to market?
• Where would you like to go to market?
• What channels would you like to use to
get to that market?
We’re thinking about their businesses holistically and
putting together integrated solutions that help them
run their organizations better.
At UPS we believe stronger customer relationships lead
to growth, and we operate according to that belief. Our
products and services are deeply embedded in the fabric
of our customers’ businesses. The ultimate purpose…
to make our customers more successful. In doing that,
we become more successful too.
Michael L. Eskew
Chairman and Chief Executive Offi cer
(1) Includes an after-tax charge upon adoption of FAS 133 of $26 million or $0.02 per share.
(2) Includes after-tax effects of a gain related to a charge in vacation policy, a restructuring
charge, a charge upon adoption of FAS 142, and the settlement of a previously established tax
assessment liability. The net effect of these items was to increase net income by $760 million
or $0.67 per share.
(3) Includes the after-tax effects of a gain on the sale of Mail Technologies, a gain on the sale
of Aviation Technologies, an investment impairment charge, and a gain on the redemption of
long-term debt. Also includes credits to income tax expense due to resolution of various tax
contingencies, a favorable ruling on the treatment of jet engine maintenance costs, and a lower
effective state tax rate. The net effect of these items was to increase net income by $126 million
or $0.11 per share.
(4) Includes the after-tax effects of an impairment charge on Boeing 727, 747 and McDonnell
Douglas DC-8 aircraft and related parts and engines and a charge to pension expense resulting
from the consolidation of data collection systems. Also includes credits to income tax expense
related to the resolution of various tax matters, the removal of a portion of the valuation
allowance on certain deferred tax assets on net operating loss carry forwards, and an adjustment
for identifi ed tax contingency matters. The net effect of these items was to increase net income
by $32 million or $0.03 per share.
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5
Chief Executive Offi cer Letter