United Parcel Service : UBS Global Industrials and Transportation Conference Presentation

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UPS is positioned to capitalize on global megatrends that offer high-quality revenue growth, incremental earnings growth and more opportunity to create shareowner value.

Taking actions to raise margins:

• Part of that effort involves working with customers who are willing to compensate UPS for the value we offer.
• Not all growth is equal… focused on the best revenue opportunities… whether B2C or B2B… targeting higher value shipments that offer greater margin opportunity… rather than low- value commodity shipments.
• Growth in the right sectors: SMBs, healthcare, B2B /B2C e-commerce, manufacturing and expanding in high growth international markets.
• Introduced new solutions… like eFulfillment and Ware2Go… to attract high-quality revenue growth from SMB customers… and optimize customer and product mix to support margin improvement objectives.

Mid-cyclewith our Transformationinitiatives… our investments in technology and automated hubs are starting to pay off… providing enhanced productivity and more real-time flexibility.

• Confident that we will achieve our goal of 30-35% efficiency improvement when compared to more traditional buildings.

Continue rewarding shareownerswith growth in dividends of about 5.5% … and anticipate….

share buybacks of around $1 billion for 2019.

• UPS has provided a stable or growing dividend for almost 50 years.
• Amongst the transport industry, UPS creates a strong dividend yield.

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We are executing our strategies and initiatives in today's dynamic trade environment.

Success is due to:

• Our ability to help customers adapt to changing conditions
• Leveraging the flexibility that is built into the network. For example, in the first quarter:
• • While revenue was down in the Supply Chain and Freight segment, we leaned in on our asset-light services from Forwarding and Coyote… tightly controlling costs and producing strong profit growth.
  • Within the airline… the flexibility in our network and the full capabilities of our fleet… enabled UPS to manage block hours below the rate of ADV growth, adding to network efficiency.

And throughout the network, flexibility and cost efficiencies are improving as new facilities come online and average daily volume grows across products.

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We believe the acceleration of delivery expectations to next day delivery will be a net benefit to UPS. Many e-commerce retailers are offering next day delivery…ex: Walmart, Home Depot, Target and Amazon.

• Few transportation companies have national next day delivery capabilities that can match UPS.
• Air sorts… internationally and in the U.S… already completely automated.
• Operate a global fleet of 547 aircraft and will take delivery of ten more planes this year… both 747-8's and 767's … adding capacity and capabilities to the network.
• Integrated air and ground network offers unmatched flexibility… in many cases we can utilize our ground network to deliver next day volume without the use of aircraft.
• U.S. regional air hubs were also completely redesigned, adding increased flexibility to the domestic network.
• And in the U.S… UPS next day services are available to shippers of all sizes… and available with robust SMB e-commerce solutions like eFulfillment and Ware2Go.
• These solutions help SMB customers establish a local market presence thereby shortening transit times and reducing costs.

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