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United Parcel Service Jeremy Gogel 3-2-2006 Finance 4201

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  • United Parcel Service

    Jeremy Gogel 3-2-2006 Finance 4201

    UPS | UPS_PPT_template_print_032703_emp

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    Stock ProfileLast Trade:74.71Day's Range:74.63 - 75.9152Wk Range:66.10 - 79.97Volume:2,858,600Avg Vol (3m):2,577,950Market Cap:82.45BP/E (ttm):21.54EPS (ttm):3.47Div & Yield:1.52 (2.00%)

    (24.22 Ind avg.)(1.04 Ind avg.)

    UPS | UPS_PPT_template_print_032703_emp

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    Worlds Largest Package Delivery Company

    Started in 1907 in Seattle.2005 Annual Revenue $33.4 billion Deliver 13.6 million packages daily (150 packages per second) 7.9 million daily customers Reaches more than 200 countries/territories worldwide Every address in the United States UPS has more than 88,000 vehicles Approximately 360,000 employees UPS is the 11th largest airline in the World (581 aircraft owned)

    UPS | UPS_PPT_template_print_032703_emp

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    UPS | UPS_PPT_template_print_032703_emp

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    What can BROWN do for you?UPS has three different business segments US Package Operation International Package OperationNon-Package Unit (UPS Supply Chain Solutions)

    UPS | UPS_PPT_template_print_032703_emp

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    UPS Package ServicesInternational Services UPS Worldwide ExpressSM UPS Worldwide Express PlusSM UPS Worldwide ExpressSM NA1 UPS Express Saver UPS WorldEaseSM UPS Worldwide ExpeditedSM UPS Standard U.S. Services UPS Next Day Air Early A.M. UPS Next Day Air UPS Next Day Air Saver UPS 2nd Day Air A.M. UPS 2nd Day Air 3 Day Select UPS Guaranteed Ground

    UPS | UPS_PPT_template_print_032703_emp

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    Domestic SegmentGround volume increased 4 percent (408,000 packages) per day.Revenue per piece was up 2.1 percentNew technology had a negative impact on profitability of about $150 millionGrowth is focused on better alignment of resources, cross-selling of integrated solutions and expansion of the product portfolio

    UPS | UPS_PPT_template_print_032703_emp

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    International SegmentInternational operations achieved large gains in 2004 Favorable currency translation accounted for only $54million of the $412 million increase in profitsOperating profit was over $1 billion for the first time and Operating margins increased to 16.6%; best in industry

    UPS | UPS_PPT_template_print_032703_emp

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    Global Leader in Supply Chain ServicesSupply Chain Solutions International Trade ManagementConsulting Logistics and Distribution Transportation Managementand Freight Forwarding Service Parts Logistics Financial Services Global Trade Finance Export-import Lending Electronic Services UPS Internet Shipping UPS OnLine WorldShip

    UPS | UPS_PPT_template_print_032703_emp

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    Supply Chain SolutionsUPS Supply Chain Solutions is the largest business unit within the non-package segment.Total supply chain spending around the world is over $3 trillion. Only about 10 percent is currently outsourced. The outsourced market, however, is growing at a 12 percent annual rate.UPS has targeted several industries where it sees substantial supply chain management growth opportunities, including the health care, automotive, high-tech, retail, consumer, and government sectors.

    UPS | UPS_PPT_template_print_032703_emp

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    Growth OpportunitiesUPS invests hundreds of millions of dollars annually for facilities, vehicles, and aircraft.Construction continued on the expansion of the companys automated air hub in Cologne, Germany the largest hub outside the United States.UPS is extending its presence in Asia. UPS has gained 12 additional air routes to more extensively serve parts of China, Japan, and Hong Kong. Network improvements reduced transit times by one day on ground service between 20 metropolitan areas, including Atlanta, Baltimore/Washington, D.C., Chicago, Dallas, Houston, Kansas City, Los Angeles, Philadelphia, and Pittsburgh. UPS will continue enhancing transit times in 2005 and beyond.

    UPS | UPS_PPT_template_print_032703_emp

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    UPS | UPS_PPT_template_print_032703_emp

  • UPS | UPS_PPT_template_print_032703_emp

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    ValuationBeta: .49Growth Rate: 7% (I think this is low)Rate of Return: 8%Value: $100 per share

    Buffett: $80.28 (7% for first 10, 2% thereafter)

    Analysts: $85.36-$91.96 for fiscal 2006.

    UPS | UPS_PPT_template_print_032703_emp

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    RecommendationHoldWhy?I really like the dividend; its increased by 81% since 2003.I think UPS can capitalize on the increasing supply chain market.Very little risk, but still room for growth.

    UPS | UPS_PPT_template_print_032703_emp

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    Questions?

    UPS | UPS_PPT_template_print_032703_emp