UPS 2006 Annual Report Download - page 4

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“Synchronizing this world of global commerce
is our vision ... a vision that supports current
products and services, as well as guides our
longer-term initiatives.”
DEAR FELLOW SHAREOWNERS,
World trade is growing at an unprecedented pace
as goods move around the globe more quickly
and more freely than ever. Companies of all sizes
are tapping new markets for their products.
Consumers, empowered by technology, are seeking
more choices and more services. Businesses are
becoming more responsive, more effective, and more
focused on satisfying the demands of customers
for an increasingly personalized experience. Synchro-
nizing this world of global commerce is our vision ...
a vision that supports current products and services,
as well as guides our longer-term initiatives.
Before I talk about what lies ahead, let me put 2006
into perspective. UPS reported the highest revenue,
profi t, and earnings per share in our history. More
specifi cally, revenue increased 11.7 percent, reaching
$47.5 billion; operating profi t of $6.6 billion was
up 8.0 percent; and diluted earnings per share were
$3.86, an increase of 11.2 percent. These results
refl ect the strong performance of our small package
operations around the world.
It was also a year in which we continued to build
a strong foundation for long-term growth, high-
lighted by the integration of acquisitions across our
business units. These included LYNX Express in the
United Kingdom, Stolica S.A. in Poland, and Menlo
Worldwide Forwarding and Overnite in the United
States. While much of this activity was successful,
some of the integrations presented challenges. We
are confi dent, however, that the expanded capa-
bilities these acquisitions bring will help UPS better
meet all our customers’ shipping needs.
GLOBAL SMALL PACKAGE
Our global small package operations performed
exceptionally well, delivering a record of nearly
4 billion packages and letters in 2006. We expand-
ed upon our industry-leading margins, attaining a
new high of 16.8 percent for the year. We will con-
tinue to invest in our small package business. For
example, in 2006 we began a fi ve-year, $1 billion
expansion of UPS Worldport®, our fl agship global
air hub in Louisville, KY. This effort will increase
sorting capacity by 60 percent to accommodate
the volume growth driven by the increase in
international trade.
The U.S. small package business posted a 9.6 percent
increase in operating profi ts to $4.9 billion. The year
was characterized by investments in service expan-
sions and visibility solutions for our customers. In
early 2006, we unveiled the most signifi cant upgrade
of our U.S. ground package delivery network ever,
Michael L. Eskew
Chairman and Chief Executive Offi cer
2