UPS 2013 Annual Report Download - page 7

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International
International revenue rose 2.5 percent, bolstered by the
emerging recovery in Europe. Adjusted operating pro t3
declined slightly to $1.8 billion as customers continued to
trade down from premium express services to lower-yielding,
deferred products.
We increased our focus on growth opportunities in the
emerging markets. Last March, we formed a new team
dedicated to accelerating UPS’s investment in emerging
markets. In August, we created a new district to focus on the
potential of India, the Middle East and Africa—three areas of
the world that are expected to generate above-average growth
over the next few decades.
In 2013, UPS invested in key emerging markets with strategic
acquisitions designed to serve the needs of both local and
international customers. UPS purchased Union Pak de Costa
Rica, S.A. and brokerage company SEISA Brokerage in Costa
Rica, both of which had long-standing relationships with
UPS as Authorized Service Contractors. Half a world away,
UPS also acquired the remaining 49 percent stake in VN Post
Express, making it the  rst wholly owned global express
delivery company in Vietnam. We expect to continue
investing in emerging markets during 2014.
Supply Chain and Freight
The Supply Chain and Freight segment saw revenue decline
2.3 percent, with operating pro t down 7.4 percent from
the prior year adjusted results3, to $674 million. Operating
margin decreased to 7.5 percent in 2013, a 50 basis-point
decline from the prior year adjusted results3.
Freight Forwarding experienced challenges from the over-
capacity and reduced demand in the air-freight market, as
shippers traded down to slower modes. However, the segment
enjoyed positive pro t growth in ocean and brokerage services.
Our Logistics & Distribution group enjoyed solid revenue
growth in the mid-single digits, largely due to improvements
made in our healthcare, retail and UPS mail services. Our
operating margins expanded slightly as the group continued
to absorb the cost of technology and healthcare facility
05
Diluted Earnings
in dollars per share
2008 2009 2010 2011 2012 2013
GAAP
Adjusted3
0
1
2
3
4
5
Operating Margin
percent
GAAP
Adjusted3
0
3
6
9
12
15
2008 2009 2010 2011 2012 2013
3 See reconciliation of Non-GAAP financial measures on page A1.