United Parcel Service (UPS) 8-K UPS GENERATES SOLID 2nd QUARTER RESULTS

Exhibit 99.1

Contacts: Norman Black, Public Relations
404-828-7593
Teresa Finley, Investor Relations
404-828-7359

UPS GENERATES SOLID
2^nd QUARTER RESULTS

Export Revenue Rises 14%; LTL Shipments Climb 12%

     ATLANTA, July 24, 2007 — UPS (NYSE:UPS) today reported a solid 7.2% increase in diluted earnings per share for the second quarter to $1.04 on a 3.9% gain in revenue. Strong performance by the international package segment and encouraging trends in supply chain and freight overcame a challenging U.S. small package market.

     International export revenues jumped 14% on double-digit volume growth. UPS Freight less-than-truckload (LTL) revenue climbed 10.5% on a 12% increase in shipments.

     “The company’s total performance reflects the benefits of our truly global network,” said Mike Eskew, UPS’s chairman and CEO. “Strong gains in our international package segment offset a lack of growth in the U.S. business. We’re also executing well in our supply chain and freight business and are pleased with the profit improvements in this segment. We remain confident in the long-term growth prospects that the dynamic global marketplace offers UPS.”

Consolidated Results	2Q 2007			2Q 2006
Revenue	$	12.19	B	$	11.74	B
Operating profit	$	1.77	B	$	1.70	B
Operating margin		14.5	%		14.4	%
Average volume per day		15.03	M		14.97	M
Diluted earnings per share	$	1.04		$	0.97

     For the three months ended June 30, 2007, net income rose 4.1% to $1.1 billion. Operating margin increased to 14.5% with improvements in both the international package and supply chain and freight segments.

Cash Position

     UPS closed the quarter with $2.1 billion in cash and marketable securities. For the first six months, UPS also:

• Exceeded $2.3 billion in free cash flow.

• Purchased 21 million shares, reducing total shares outstanding by 1.7%.

• Paid $1.3 billion in dividends.

• Invested $1.2 billion in capital expenditures.

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U. S. Domestic Package	2Q 2007			2Q 2006
Revenue	$	7.58	B	$	7.46	B
Operating profit	$	1.19	B	$	1.23	B
Operating margin		15.7	%		16.5	%
Average volume per day		13.23	M		13.25	M

     Ground volume was flat during the quarter, reflecting declining growth rates in both industrial production and business-to-consumer shipments. Next Day Air^® volume increased 1.6% to partially offset a 4% decline in deferred air volume. Total U.S. revenue per piece remained firm, up 1.7%, with revenue per piece on ground volume rising 3%.

International Package	2Q 2007			2Q 2006
Revenue	$	2.50	B	$	2.23	B
Operating profit	$	475	M	$	414	M
Operating margin		19.0	%		18.5	%
Average volume per day		1.80	M		1.72	M

     Total export volume increased 10.4%. Europe posted a double-digit export volume gain, reflecting strong cross-border growth. Asia export volume jumped 25% with particularly strong growth out of China. For the segment, operating profit increased 14.7% and margins expanded 50 basis points to 19%.

Supply Chain and Freight	2Q 2007			2Q 2006
Revenue	$	2.11	B	$	2.04	B
Operating profit	$	98	M	$	47	M
Operating margin		4.6	%		2.3	%

     The forwarding and logistics business continues to benefit from the performance improvement initiatives launched in the second half of 2006. UPS Freight, which has been investing significantly to update customer service and technology systems, reported a strong gain in second quarter revenue to $549 million.

Outlook

     “We see increasing benefits for the company due to investments in both ground, air and ocean freight capabilities as well as further expansion globally of our small package business,” said Scott Davis, UPS’s vice chairman and CFO. “Toward the end of the year, we expect the small package market to more closely correlate to U.S. economic trends and as a result, we should see gradual volume growth in our U.S. package business.”

     UPS expects diluted earnings per share for the third quarter to fall within a range of $0.99 to $1.04 compared to the $0.96 reported for the prior-year period. Davis also reaffirmed the company’s annual target of a 6-to-10 percent increase in adjusted diluted earnings per share.

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     UPS, which celebrates its 100^th anniversary in 2007, is the world’s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS’s stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at UPS.com. To get UPS news direct, visitpressroom.ups.com/RSS.

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EDITOR’S NOTE:UPS Chairman and CEO Mike Eskew and Vice Chairman and CFO Scott Davis will discuss second quarter results with investors and analysts during a conference call today at 8:30 a.m. EDT. That conference call is open to listeners through a live Webcast. To access the call, go towww.shareholder.com/UPS and click on “Earnings Webcast.”

     We supplement the reporting of our financial information determined under generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, including, as applicable, “as adjusted” operating profit, operating margin, pre-tax income, net income and earnings per share. We believe that these adjusted measures provide meaningful information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring operations because they exclude items that may not be indicative of or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. Furthermore, we use these adjusted financial measures to determine awards for our management personnel under our incentive compensation plans. We also provide the amount of our free cash flow to supplement our cash flow determined under GAAP. We define free cash flow as net cash from operating activities adjusted for capital expenditures, proceeds from disposals of property, plant and equipment, net change in finance receivables and other investing activities. We believe free cash flow is an important measure in assessing the generation of cash for discretionary investments and dividends.

     In the first quarter of 2007, we recorded a $221 million pre-tax impairment charge related to aircraft and a $68 million pre-tax charge related to cash payouts and the acceleration of stock compensation and certain retiree healthcare benefits for employees who accepted a voluntary separation opportunity. We presented first quarter 2007 operating profit, operating margin, pre-tax income, net income and earnings per share excluding the impact of these items as we believe these adjusted measures better enable shareowners to focus on period-over-period operating performance. The underlying matters that produced the impairment charge and the charge related to the voluntary separation opportunity were unique, and we do not believe they are reflective of the types of charges that will affect future anticipated results.

     Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies�� non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for GAAP operating profit, operating margin, net income and earnings per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the preceding reconciliations to corresponding GAAP financial measures, provide a more complete understanding of our business. We strongly encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

     Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company’s strategic directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, governmental regulations, our competitive environment, strikes, work stoppages and slowdowns, increases in aviation and motor fuel prices, cyclical and seasonal fluctuations in our operating results, and other risks discussed in the company’s Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated herein by reference.

United Parcel Service, Inc.

Selected Financial Data — Second Quarter
(unaudited)

	Three Months Ended
	June 30,						Change
	2007			2006			$			%
(amounts in millions, except per share data)
Statement of Income Data:
Revenue:
U.S. Domestic Package	$	7,579		$	7,462		$	117			1.6	%
International Package		2,500			2,233			267			12.0	%
Supply Chain & Freight		2,110			2,041			69			3.4	%
Total revenue		12,189			11,736			453			3.9	%
Operating expenses:
Compensation and benefits		6,327			5,990			337			5.6	%
Other		4,097			4,051			46			1.1	%
Total operating expenses		10,424			10,041			383			3.8	%
Operating profit:
U.S. Domestic Package		1,192			1,234			(42	)		-3.4	%
International Package		475			414			61			14.7	%
Supply Chain & Freight		98			47			51			108.5	%
Total operating profit		1,765			1,695			70			4.1	%
Other income (expense):
Investment income		28			23			5			21.7	%
Interest expense		(61	)		(54	)		(7	)		13.0	%
Total other income (expense)		(33	)		(31	)		(2	)		6.5	%
Income before income taxes		1,732			1,664			68			4.1	%
Income taxes		628			603			25			4.1	%
Net income	$	1,104		$	1,061		$	43			4.1	%
Net income as a percentage of revenue		9.1	%		9.0	%
Per share amounts
Basic earnings per share	$	1.04		$	0.98		$	0.06			6.1	%
Diluted earnings per share	$	1.04		$	0.97		$	0.07			7.2	%
Weighted-average shares outstanding
Basic		1,060			1,087			(27	)		-2.5	%
Diluted		1,066			1,092			(26	)		-2.4	%

Certain prior year amounts have been reclassified to conform to the current year presentation. 1

United Parcel Service, Inc.

Selected Operating Data — Second Quarter
(unaudited)

	Three Months Ended
	June 30,				Change
	2007		2006		$ / #			%
Revenue (in millions):
U.S. Domestic Package:
Next Day Air	$	1,684	$	1,687	$	(3	)		-0.2	%
Deferred		792		822		(30	)		-3.6	%
Ground		5,103		4,953		150			3.0	%
Total U.S. Domestic Package		7,579		7,462		117			1.6	%
International Package:
Domestic		517		473		44			9.3	%
Export		1,834		1,614		220			13.6	%
Cargo		149		146		3			2.1	%
Total International Package		2,500		2,233		267			12.0	%
Supply Chain & Freight:
Forwarding and Logistics		1,465		1,444		21			1.5	%
Freight		549		510		39			7.6	%
Other		96		87		9			10.3	%
Total Supply Chain & Freight		2,110		2,041		69			3.4	%
Consolidated	$	12,189	$	11,736	$	453			3.9	%
Consolidated volume (in millions)		962		958		4			0.4	%
Operating weekdays		64		64
Average Daily Package Volume (in thousands):
U.S. Domestic Package:
Next Day Air		1,260		1,240		20			1.6	%
Deferred		899		936		(37	)		-4.0	%
Ground		11,071		11,074		(3	)		0.0	%
Total U.S. Domestic Package		13,230		13,250		(20	)		-0.2	%
International Package:
Domestic		1,077		1,062		15			1.4	%
Export		724		656		68			10.4	%
Total International Package		1,801		1,718		83			4.8	%
Consolidated		15,031		14,968		63			0.4	%
Average Revenue Per Piece:
U.S. Domestic Package:
Next Day Air	$	20.88	$	21.26	$	(0.38	)		-1.8	%
Deferred		13.77		13.72		0.05			0.4	%
Ground		7.20		6.99		0.21			3.0	%
Total U.S. Domestic Package		8.95		8.80		0.15			1.7	%
International Package:
Domestic		7.50		6.96		0.54			7.8	%
Export		39.58		38.44		1.14			3.0	%
Total International Package		20.40		18.98		1.42			7.5	%
Consolidated	$	10.32	$	9.97	$	0.35			3.5	%

Certain prior year amounts have been reclassified to conform to the current year presentation. 2

United Parcel Service, Inc.

Selected Financial Data — Year to Date
(unaudited)

	Six Months Ended
	June 30,						Change
	2007			2006			$			%
(amounts in millions, except per share data)
Statement of Income Data:
Revenue:
U.S. Domestic Package	$	15,131		$	14,925		$	206			1.4	%
International Package		4,885			4,394			491			11.2	%
Supply Chain & Freight		4,079			3,938			141			3.6	%
Total revenue		24,095			23,257			838			3.6	%
Operating expenses:
Compensation and benefits		12,668			12,009			659			5.5	%
Other		8,304			7,998			306			3.8	%
Total operating expenses		20,972			20,007			965			4.8	%
Operating profit:
U.S. Domestic Package		2,133			2,419			(286	)		-11.8	%
International Package		846			809			37			4.6	%
Supply Chain & Freight		144			22			122			554.5	%
Total operating profit		3,123			3,250			(127	)		-3.9	%
Other income (expense):
Investment income		42			46			(4	)		-8.7	%
Interest expense		(110	)		(102	)		(8	)		7.8	%
Total other income (expense)		(68	)		(56	)		(12	)		21.4	%
Income before income taxes		3,055			3,194			(139	)		-4.4	%
Income taxes		1,108			1,158			(50	)		-4.3	%
Net income	$	1,947		$	2,036		$	(89	)		-4.4	%
Net income as a percentage of revenue		8.1	%		8.8	%
Per share amounts
Basic earnings per share	$	1.83		$	1.87		$	(0.04	)		-2.1	%
Diluted earnings per share	$	1.82		$	1.86		$	(0.04	)		-2.2	%
Weighted average shares outstanding
Basic		1,065			1,091			(26	)		-2.4	%
Diluted		1,070			1,096			(26	)		-2.4	%
As adjusted income data:
U.S. Domestic Package (1)	$	2,345		$	2,419		$	(74	)		-3.1	%
International Package (1)		915			809			106			13.1	%
Supply Chain & Freight (1)		152			22			130			590.9	%
Total operating profit		3,412			3,250			162			5.0	%
Income before income taxes (1)	$	3,344		$	3,194		$	150			4.7	%
Net income (2)	$	2,131		$	2,036		$	95			4.7	%
Basic earnings per share (2)	$	2.00		$	1.87		$	0.13			7.0	%
Diluted earnings per share (2)	$	1.99		$	1.86		$	0.13			7.0	%

(1) 2007 adjusted operating profit and income before income taxes exclude an impairment charge on Boeing 727 and 747 aircraft, and related engines and parts, of $221 million ($159 million U.S. Domestic Package and $62 million International Package), due to the acceleration of the planned retirement of these aircraft.

2007 adjusted operating profit and income before income taxes also exclude a charge related to the special voluntary separation opportunity (“SVSO”), which was offered to approximately 640 employees who work in non-operating functions. The SVSO was accepted by 195, or 30%, of the eligible employees during the first quarter. As a result, we have recorded a charge to expense of $68 million ($53 million U.S. Domestic Package, $7 million International Package, and $8 million Supply Chain & Freight), to reflect the cash payout and the acceleration of stock compensation and certain retiree healthcare benefits under the SVSO program.

(2) First quarter net income and earnings per share amounts exclude the after-tax impact of the charges described in (1), which total $184 million.

Certain prior year amounts have been reclassified to conform to the current year presentation. 3

United Parcel Service, Inc.

Selected Operating Data — Year to Date
(unaudited)

	Six Months Ended
	June 30,				Change
	2007		2006		$ / #			%
Revenue (in millions):
U.S. Domestic Package:
Next Day Air	$	3,337	$	3,371	$	(34	)		-1.0	%
Deferred		1,594		1,653		(59	)		-3.6	%
Ground		10,200		9,901		299			3.0	%
Total U.S. Domestic Package		15,131		14,925		206			1.4	%
International Package:
Domestic		1,028		939		89			9.5	%
Export		3,581		3,175		406			12.8	%
Cargo		276		280		(4	)		-1.4	%
Total International Package		4,885		4,394		491			11.2	%
Supply Chain & Freight:
Forwarding and Logistics		2,851		2,783		68			2.4	%
Freight		1,037		987		50			5.1	%
Other		191		168		23			13.7	%
Total Supply Chain & Freight		4,079		3,938		141			3.6	%
Consolidated	$	24,095	$	23,257	$	838			3.6	%
Consolidated volume (in millions)		1,930		1,922		8			0.4	%
Operating weekdays		128		128
Average Daily Package Volume (in thousands):
U.S. Domestic Package:
Next Day Air		1,253		1,247		6			0.5	%
Deferred		918		944		(26	)		-2.8	%
Ground		11,089		11,093		(4	)		0.0	%
Total U.S. Domestic Package		13,260		13,284		(24	)		-0.2	%
International Package:
Domestic		1,095		1,076		19			1.8	%
Export		723		656		67			10.2	%
Total International Package		1,818		1,732		86			5.0	%
Consolidated		15,078		15,016		62			0.4	%
Average Revenue Per Piece:
U.S. Domestic Package:
Next Day Air	$	20.81	$	21.12	$	(0.31	)		-1.5	%
Deferred		13.57		13.68		(0.11	)		-0.8	%
Ground		7.19		6.97		0.22			3.2	%
Total U.S. Domestic Package		8.91		8.78		0.13			1.5	%
International Package:
Domestic		7.33		6.82		0.51			7.5	%
Export		38.70		37.81		0.89			2.4	%
Total International Package		19.81		18.56		1.25			6.7	%
Consolidated	$	10.23	$	9.91	$	0.32			3.2	%

Certain prior year amounts have been reclassified to conform to the current year presentation. 4

United Parcel Service, Inc.

Reconciliation of Free Cash Flow
(unaudited)

	Preliminary
	Year-to-Date
	June 30, 2007
(amounts in millions)
Net cash from operations	$	3,597
Capital expenditures		(1,206	)
Proceeds from disposals of PP&E		34
Net change in finance receivables		24
Other investing activities		(97	)
Free cash flow	$	2,352

Amounts are subject to reclassification.

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