UPS 2011 Annual Report Download - page 5

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UPS 2011 ANNUAL REPORT
03
UPS delivered another year of
stellar performance in 2011.
In more than 220 countries and territories around the
world, our employees provided logistics solutions and
served customers with reliability that is unmatched in
our industry.
UPS achieved record earnings per share (EPS) in 2011,
well surpassing our previous peak in 2007. Our operating
margin and free cash flow are the envy of our industry.
The financial results of our business segments
demonstrated our adaptability.
•OurU.S.Domesticsegmentproducedstrong
revenue growth, the highest operating profit since
2007, and significant margin expansion in a slow
growth environment.
• UPSInternationaloperationsachievedrecord
revenues on strong volume growth that continued
to outpace the market. This performance was quite
impressive given tumultuous economic conditions
around the world in 2011.
• IntheSupplyChainandFreightsegment,we
upgraded our capabilities, and continued to
achieve new highs in operating profit with
balanced contributions from all business units.
AtourInvestorConferencein2011,weshowedthat
UPS is the market leader in cutting-edge technologies
and unique customer solutions. We also announced
aggressive long-term targets. Some of these targets are:
EPSgrowthof10to15percent,ROICinexcessof
25percent,andFreeCashFlowconversiongreaterthan
100 percent of net income. Our performance and our
focus on shareholder returns makes UPS a blue-chip
stock that belongs in any investment portfolio.
UPS Strategy
As I mentioned in my letter last year, the UPS strategy has
three key tenets: create value for our customers, transform
our business, and invest for growth. In 2011, we executed
this strategy and the results were rewarding.
CreatingValue
Duringthepastyear,UPSintroducedavarietyof
innovative solutions.
To support the needs of the fast growing Business-
to-Consumer(B-to-C)market,welaunched
UPS My ChoiceSM in the United States. This ground-
breaking offering allows the receivers of UPS shipments
to control aspects of the delivery. We are pleased with
how this product has been received. After unveiling
UPSMyChoiceinOctober2011,thenumberofnew
subscribers approached 750,000 by the end of the year.
To assist our customers with reverse logistics, we
introduced UPS Returns® Exchange and UPS Returns®
Pack and Collect. These two unique solutions provide
retailers in North America and Europe with new and
cost-efficient ways to process returns.