UPS 2012 Annual Report Download - page 6

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04
2012 Financial Performance
2012 was a year filled with opportunities and challenges.
Our bid to acquire TNT Express is probably the first to
come to mind. It would be an understatement to say
we were disappointed by the decision of the European
Commission to block the acquisition. While we viewed
the TNT transaction as part of a compelling growth
platform, UPS is moving on. We believe that the
opportunities unfolding around the world are far too
great for us to be deterred by any single development.
Our financial strength enables UPS to both evaluate
future prospects and continue to invest in our portfolio.
We intend to pursue growth opportunities—both
organically and through acquisitions—and continue
to roll out innovative solutions.
U.S. Domestic
Our U.S. Domestic performance demonstrated the
benefits of our coordinated sales strategies and opera-
tions initiatives. Revenue for the year grew 3.6 percent,
adjusted operating profit4 improved 6.4 percent and
adjusted operating margin4 expanded to 13.8 percent.
Growth was driven by residential shipments, an area
where we continued to leverage technology to serve
the market. Combined with the UPS integrated network,
this technology enables us to be more productive.
For example, we can now redirect a SurePost® package
to merge with an existing UPS delivery stop, increasing
density and reducing expense.
UPS My Choice®, the technology-enabled service we
deployed in October 2011, continues to exceed our
expectations. As of March 2013, the number of My
Choice subscribers stood at 2.5 million—and counting.
Our other service enhancements include the expansion
of the UPS Next Day Air® footprint here in the States.
Today, UPS delivers to more businesses and ZIP codes
overnight by 8:30 a.m. and 10:30 a.m. than anyone else.
International
2012 was a challenging year for our International
segment, given the weakness in global trade, the
European debt concerns, and declining shipment
weights from high-volume shippers. Still, UPS generated
UPS MY CHOICE
IS A WIN-WIN
UPS My Choice provides consumers with the visibility,
flexibility and control to manage home deliveries around
their busy lives, helping avoid the disappointment
associated with missed deliveries. In the first year alone,
we reduced multiple delivery attempts on over 500,000
packages due to operational efficiencies created by UPS
My Choice, resulting in a significantly improved delivery
experience for UPS My Choice members.
®
2012 REVENUE BY SEGMENT
61%
17%
22%
U.S. Domestic Package
International Package
Supply Chain and Freight