UPS 2008 Annual Report Download - page 97

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Supply Chain & Freight
Supply Chain & Freight includes our forwarding and logistics operations, UPS Freight, and other
aggregated business units. Our forwarding and logistics business provides services in more than 175 countries
and territories worldwide, and includes supply chain design and management, freight distribution, customs
brokerage, mail and consulting services. UPS Freight offers a variety of LTL and TL services to customers in
North America. Other aggregated business units within this segment include Mail Boxes, Etc. (the franchisor of
Mail Boxes, Etc. and The UPS Store) and UPS Capital.
In evaluating financial performance, we focus on operating profit as a segment’s measure of profit or loss.
Operating profit is before investment income, interest expense, and income taxes. The accounting policies of the
reportable segments are the same as those described in the summary of accounting policies (see Note 1), with
certain expenses allocated between the segments using activity-based costing methods. Unallocated assets are
comprised primarily of cash, marketable securities, short-term investments, and certain real estate investments.
Segment information as of, and for the years ended, December 31 is as follows (in millions):
2008 2007 2006
Revenue:
U.S. Domestic Package .......................................... $31,278 $30,985 $30,456
International Package ............................................ 11,293 10,281 9,089
Supply Chain & Freight .......................................... 8,915 8,426 8,002
Consolidated ............................................... $51,486 $49,692 $47,547
Operating Profit (Loss):
U.S. Domestic Package .......................................... $ 3,907 $ (1,531) $ 4,923
International Package ............................................ 1,580 1,831 1,710
Supply Chain & Freight .......................................... (105) 278 2
Consolidated ............................................... $ 5,382 $ 578 $ 6,635
Assets:
U.S. Domestic Package .......................................... $18,796 $23,756 $19,274
International Package ............................................ 5,723 5,994 5,496
Supply Chain & Freight .......................................... 6,775 7,606 7,150
Unallocated .................................................... 585 1,686 1,290
Consolidated ............................................... $31,879 $39,042 $33,210
Depreciation and Amortization Expense:
U.S. Domestic Package .......................................... $ 1,031 $ 979 $ 989
International Package ............................................ 588 546 547
Supply Chain & Freight .......................................... 195 220 212
Consolidated ............................................... $ 1,814 $ 1,745 $ 1,748
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