1

UPS Overview Investor Relations

August 2014

2

Safe Harbor

Cautionary Statement About Forward-Looking Statements This presentation contains forward-looking statements regarding our intent, belief and current expectations about our strategic direction, prospects and future results. Statements in the future tense, and all statements accompanied by terms such as “believe,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” “target,” “plan,” and variations thereof and similar terms are intended to be forward-looking statements. Such statements give our current expectations or forecasts of future events; they do not relate strictly to historical or current facts. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. These risks and uncertainties include, but are not limited to: general economic conditions, both in the U.S. and internationally; significant competition on a local, regional, national, and international basis; the existing complex and stringent regulation in the U.S. and internationally, changes to which can impact our business; increased security requirements that may increase our costs of operations and reduce operating efficiencies; legal, regulatory or market responses to global climate change; negotiation and ratification at labor contracts, strikes, work stoppages and slowdowns by our employees; the effects of changing prices of energy, including gasoline, diesel and jet fuel, and interruptions in supplies of these commodities; changes in exchange rates or interest rates; our ability to maintain the image of our brand; breaches in data security; disruptions to the Internet or our technology infrastructure; our ability to accurately forecast our future capital investment needs; exposure to changing economic, political and social developments in international and emerging markets; changes in business strategy, government regulations, or economic or market conditions that may result in further substantial impairment write-downs of our assets; increases in our expenses relating to employee health and retiree health and our contributions to pension benefits; the potential for various claims and litigation related to labor and employment, personal injury, property damage, business practices, environmental liability and other matters; our ability to realize the anticipated benefits from acquisitions, joint ventures or strategic alliances; our ability to manage insurance and claims expenses; and other risks discussed in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2013. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements. Information included in this presentation, including comparisons to prior periods, may reflect adjusted results. See appendix for reconciliations of adjusted results and other non-GAAP financial measures.

3

UPS Competitive Advantage is Sustainable Growth and Consistent

Results

• Respected brand and portfolio well positioned for global growth

• Worldwide integrated network – superior scale & efficiencies

• Know-how and intellectual property – 100 years of improvement, innovation and investment

• Consistent cash generation allows reinvestment in existing businesses and growth opportunities

• Culture of continual reinvention

4

Why UPS? • Transformative Growth Strategies

• Emerging Markets 6

• Global B2C Solutions 9

• Industry Specific Solutions 10

• Technology Enabled Operations 12

• Adapting & Retooling the Network

• Expanding Industry Leading Margins

• Network Advantages 15

• Efficient Network 16

• Technology Drives Efficiency Gains 17

• Pricing Strategy at UPS 18

• Capital Efficiency – A UPS Hallmark

• Strong Free Cash Flow 20

• Capital Expenditures Remain at Low Levels 21

• Distributions to Shareowners 22

• Record ROIC 24

• A Balanced Portfolio of Solutions

• U.S. Domestic 27

• International 31

• Supply Chain & Freight 36

• Expectations Going Forward

5

Transformative Growth Strategies

• Emerging Markets

• Global B2C Solutions

• Industry Specific Solutions

• Technology Enabled Operations

5

6

Middle Class Size 2008 and 2030

It is projected that by 2020, more

than 1 billion consumers will come from China and India alone.

Rising Middle Class will Drive Consumption Emerging Markets

Source: OECD, Standard Chartered Research 2010

100 mn 600 mn

1 bn

2030

2008

7

Emerging Markets Represent 75% of Growth Over the coming decade

Share of GDP growth, 2010–25

100% = US$50.2 trillion

74%

Developed economies

Emerging economies

26%

$113

2025

Emerging

Developed

$60

2010

$63

$23

Total GDP

US$, trillion

$53 $40

Emerging Markets

Source: MGI

8

Developing Emerging Markets since 1975 Emerging Markets

• Expansion outside the U.S. began in 1975

• Now serving more than 220 countries and territories with our Export products

• Exploring new opportunities in emerging markets

• Recent activities to support growth:

2013

• Expanded UPS Expedited product to all 220 countries and territories

• Acquired Vietnam joint venture company – 1st foreign owned carrier there

• Purchased Hungary based Healthcare distribution company CEMELOG

2014

• Brazil package delivery network expansion

• China Transcontinental Rail Forwarding service announced

9

On-line Retail is Growth Engine for Future Domestic Online Retail is forecast to grow over 4 times the rate of GDP

2.7% 3.5% 3.9%

5.8%

10.1%

14.3%

US Global

Expected Growth (CAGR) 2013 to 2018

GDP Retail Online Retail

4.1x

1.7x

Top 11 economies to grow

70% by 2016

1.4x

3.7x

Global B2C Solutions

Source: UPS Rates & Forecasting, eMarketer, Forrester

10

Retail Evolution and UPS’s Role

• Convergence of retail strategies

– Omni-channel solutions

• Deep collaboration with retailers

• UPS innovation delivers

– Enhances customer experience

– Expands portfolios; optimizing networks

• UPS My Choice® - 9 million members strong

– 185 million deliveries so far

• Reverse Logistics Solutions

– UPS Returns Portfolio

Industry-Specific

Solutions

11

The Healthcare Evolution at UPS

1999 2014

1999 Supply Chain

2000 Livingston Healthcare

2005 Louisville Campus

2006 Burlington,

ON

2008 Puerto Rico

2009 Roermond,

Netherlands

2011 Global Expansion

PharmaPort

2013 CEMELOG

2014 Polar Speed

2011 Merck Agreement Pieffe Acquisition

Industry-Specific

Solutions

12

Deploying Technology Enabled Solutions

Technology Enabled

Operations

Customer

• UPS Access Point ™

• UPS My Choice ®

• UPS OrderLink™

• UPS Delivery Intercept®

• UPS Mobile™ Apps

• UPS Paperless® lnvoice

• UPS Smart Pickup®

• Quantum View Notify®

• UPS Campus Ship®

• Flex® Global View

• Worldship®

Operations

• ORION

• Sure Post® Redirect

• Network Planning Tools

• UPS Telematics

• UPS Smart Pickup®

• Next Generation Small Sort

• Preload Simplification

• On-Demand Services

• Automation

• Package Level Detail

• DIAD

12

13

• Automation and Modernization

• Harmonize inside operations to market trends

• Improve on-road efficiency – ORION

• Collaboration with customer

• Expand solutions and portfolio – My Choice, Access Points

Adapting & Retooling the Network

“Expense Precedes Benefits”

14

Expanding Industry Leading Margins

15

Industry Leading Margins* Small Package Trailing 12 Months

* See Appendix slide 60 for reconciliation of trailing 12 month operating margin

Network Advantages

* Operating Margin is presented on an adjusted basis for all companies (trailing 12 months) and is not reflective of the Global Small Package market.

15

13.4%

9.7%

8.2%

3.5%

UPS DHL FDX TNT

16

Productivity Gains Across Economic Cycles

-12.0%

-7.0%

-2.0%

3.0%

8.0%

13.0%

2Q09 4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12 2Q13 4Q13 2Q14

U.S. Domestic Segment

2Q14 YOY

Domestic ADV 7.4%

Miles Driven 4.0%

Direct Labor Hours 6.0%

Domestic Block Hours 0.0%

Efficient Network

17

ORION Technology

Drives Efficiency

Gains

On-Road Integrated Optimization & Navigation

• Optimizes a driver’s route using:

− Advanced mathematical models

− Data from planning systems

− Customized map data

• Accounts for business rules, customer needs, and service commitments

• Allows “what if” analysis and decision making

• Proved effective during peak season

• Deployment Team increased to 700 dedicated UPSers

• Expedited implementation in 2014 to 45% of routes

Previous Route

ORION Route

18

Fairly Compensated for the Value UPS Creates Pricing

Strategy at UPS

• Take a long-term view

– Base rate increases of 2-3%

– Preserve relationship and avoid rebidding

• Sophisticated pricing tools using ABC and market data

• Reduce fuel surcharge volatility

• Targeted increases to lower weights and zones

• Revenue management to achieve ROIC targets

19

Capital Efficiency - A UPS Hallmark

• Strong Free Cash Flow to Continue

• Capital Expenditures Remain at Low Levels

• Distributions to Shareowners

• Record ROIC

20

Cash Flow History Adjusted YTD Free Cash Flow of $3.1B

Strong Free Cash Flow

$3.3

$4.3 $4.1

$3.1

$5.0 $5.4 $5.2

$1.0

$4.6

$0.0

$2.0

$4.0

$6.0

2007 2008 2009 2010 2011 2012 2013 2014*

Free C

ash

Flo

w

(B

illio

ns)

$3.1

20

See slide 58 for Free Cash Flow Reconciliation

21

Capital Expenditure History at UPS Investing for growth while harvesting the benefits of prior investments

0.0%

2.0%

4.0%

6.0%

8.0%

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

$3,000.0

$3,500.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*2015*

CAPEX Remains at Low Level

Youngest Air Fleet at 15 years

Asia Infrastructure in place

Worldport All-Points Air Hub Expansion

Complete

Eight 767s in 2013 for Growth

*Estimated

22

A Growing Dividend for More Than 45 years Since IPO dividend growth averaged 10.3% CAGR

[VALUE] $0.76

$0.92

$1.12

$1.32

$1.52

$1.68 $1.80 $1.80

$1.88

$2.08

$2.28

$2.48

$2.68

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

$2.50

$2.75

2001 2002 2003 2004 2005 2006 2007 2008* 2009 2010 2011 2012 2013 2014**

Distributions to

Shareowners

Annual cash dividends paid since 1969

*2008 included five dividend payments (totaling $2.22/share) due to dividend payment schedule change

**Estimated

23

Target 100% Return to Shareholders $2.7B in stock repurchases planned for 2014

(Total Shareholder Distributions / Net Income*)

>100%

144%

88% 98%

148%

111%

78%

110%

40% 51%

85%

55% 48% 51% 55%

58%

97% 26%

23%

62% 37%

[VALUE]

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

2007 2008 2009 2010 2011 2012 2013 2014 Est.

Dividend Payout Ratio Stock Repurchase Ratio

Distributions to

Shareowners

*See slide 61 for a reconciliation of adjusted net income

24

23.9%

21.7%

15.2%

21.2%

24.2% 24.6%

27.6%

0.0%

10.0%

20.0%

30.0%

2007 2008 2009 2010 2011 2012 2013

Record ROIC

Equation: Adjusted After-Tax Operating Profit / Average Invested Capital Excludes MTM charge from Adjusted Ending Shareowner Equity; See Appendix slide 59 for adjusted ROIC and after-tax operating profit.

24

Return on Invested Capital at UPS

25

A Balanced Portfolio of Solutions

• U.S. Domestic

• International

• Supply Chain & Freight

26

Transformation

OPERATING PROFIT *

REVENUE

61% 23%

16%

2000

2Q14

64%

26%

10%

81%

14%

5%

88%

6%

6%

U.S. Domestic International SC&F

Revenue & Net

Income Diversification

* See Appendix slide 57 for reconciliation of adjusted operating profit for 2000 and 2Q14

27

U.S. Domestic

• B2C Growth

• Leverage Operational Technology

• ORION Implementation

• SurePost Redirect

• Strategic Capital Deployment

• Hub Modernization

• Capacity Expansion

28

The B2C Equation at UPS B2B Profitability is higher than B2C

Revenue per package

Cost per stop

Packages per stop

Delivery Density Key

to B2C Profits

Commercial Residential

28

29

UPS SurePost®

Redirect Using data and our Integrated Network to increase Delivery Density

Advantage of Single

Integrated Network

UPS Shipper

Customer Receives 1 Day Earlier

Redirect allows UPS to take advantage of its integrated network

UPS SurePost provides a low cost residential delivery option

Matching packages for delivery saves by increasing delivery density

Opportunities remain to expand the concept further

Redirect

30

2014 Network Enhancements Strategic Capital

Deployment

• Additional $500M CAPEX

• Hub modernization

• Sort automation

• Job simplification

• Facility expansions

• Legacy building retro-fit

31

International

• Emerging Markets

• Organizational Alignment

• Targeted Acquisitions

• Global B2C

• UPS Access Points / Kiala

• My Choice

• Sustained Growth

32

UPS Emerging Markets Evolution

1989 2014

Western Europe and Asia Pacific

expansion

2003

Foundational acquisitions followed by organic

growth

Core, Opportunity, and Maintenance

categories

China, Poland, Czech Republic, Turkey,

Hungary investments

Expansion of healthcare capabilities in China

(now 16 countries worldwide) Creation of ISMEA* District

*Indian Sub-continent, Middle East, and Africa

UPS Emerging

Market Strategy

33

Developing Emerging Markets since 1975 UPS

Emerging Market

Strategy

• Expansion outside the U.S. began in 1975

• Now serving more than 220 countries and territories with our Export products

• Exploring new opportunities in emerging markets

• Recent activities to support growth:

2013

• Expanded UPS Expedited product to all 220 countries and territories

• Acquired Vietnam joint venture company – 1st foreign owned carrier there

• Purchased Hungary based Healthcare distribution company CEMELOG

2014

• Brazil package delivery network expansion

• China Transcontinental Rail Forwarding service announced

34

UPS Access Point / Kiala Network Convenience for retailers, shippers and consumers

United Kingdom UPS Access Point Access points: 2,600 now 3,000 planned by 3Q14

France Kiala Point Access points: 4,300

Spain Kiala Point Access points: 1,200

Netherlands Kiala Point Access points: 700

Germany UPS Paket Shop Access points: 2,400 now 3,000 planned by 3Q14

Belgium Kiala Point Access points: 850

Global B2C Requires Unique

Solutions

2014: Canada Open 800 Locations: 1,000 by 12/31/15

35

International Export Volume Trends

FedEx’s 10 Year CAGR = +3.4%

UPS’ 10 Year CAGR = +7.3%

Sustained Growth

Source: Company quarterly reports Note: FedEx in fiscal quarters

300

500

700

900

1,100

1,300

2Q04 2Q05 2Q06 2Q07 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14

36

• Industry Specific Solutions

• Healthcare Distribution

• High-Tech / Retail Expansions

• Reverse Logistics Solutions

Supply Chain & Freight

37

Supply Chain & Freight – Growing Opportunities

Ocean Retail Mail Brokerage Healthcare

Air Freight

Supply Chain Finance

Insurance Distribution Freight

Organizational Synergy

38

Industry Specific Solutions – Healthcare

1999 2014

1999 Supply Chain

2000 Livingston Healthcare

2005 Louisville Campus

2006 Burlington,

ON

2008 Puerto Rico

2009 Roermond,

Netherlands

2011 Global Expansion

PharmaPort

2013 CEMELOG

2014 Polar Speed

2011 Merck Agreement Pieffe Acquisition

Long-term Growth

Opportunities

39

Global Healthcare Integrated Distribution Network More than 40 dedicated facilities globally… and growing

Over 6 million square feet AMERICAS

Atlanta, GA Dallas, TX

Durham, NC Harrisburg, PA

Los Angeles, CA Louisville, KY

Louisville, KY Air Hub Memphis, TN

Miami, FL Air Hub Newark, DE

Ontario, CA Air Hub Philadelphia, PA Air Hub

Reno, NV Calgary, AB

Mount Pearl, NL Toronto, ON

Winnipeg, MB Bogota, CO Goiania, BR

Sao Paulo, BR Mexico City, MX San Juan, PR Santiago, CL

ASIA PACIFIC

Beijing, CN Hangzhou, CN

Int’l Air Hub – CN Intra-Asia Air Hub – CN

Shanghai, CN Singapore, SG Sydney, AU

Long-term Growth

Opportunities

EUROPE

Cologne Air Hub Milan, IT Rome, IT

Roermond, NL Venlo, NL Madrid, ES

Multiple Locations, UK Warsaw, PL

Budapest, HU Istanbul, TR

Current UPS Facilities UPS Air Hub

40

Expectations Going Forward

41

2014 Outlook

Management Guidance on 7/29/2014

Adj EPS

FY14: Lowered guidance to $4.90-$5.00, an increase of 7-9%; Original guidance EPS $5.05-$5.30

• Acceleration of U.S. volume growth & peak preparations will drive additional cost – total of $175M, +$75 more than original guidance

• Anticipate strong 2H14 with all three segments projected to increase operating profit

• 4Q EPS growth to be stronger than 3Q due to ramp-up of expense (3Q) and Y/Y comps (4Q)

Domestic

• ADV to grow just over 5%; Black Friday op day will lower ADV growth in 4Q by about 160 bps • Revenue per package is projected to decline 1% • Margin approx. 14%, expected to expand over LY, but will be constrained by increased investments in

capacity & additional operating cost to support the acceleration of U.S. ADV & peak ramp up. Also continued excess cost due to poor rail performance

• 4Q Y/Y Profit growth should outpace 3Q (Peak ramp-up/comps)

International

• ADV growth 4-6% • Revenue increase slightly slower pace than volume; non-premium continues to outpace premium • Profit to grow at low double-digit pace compared to LY • Some margin expansion

SC&F • Revenue mid-single digit growth • Margin around 8% • Profit growth mid-teens

GDP assumptions: US = 1.7%; Global= 2.8%

Lowered Guidance to

$4.90-$5.00, an increase of

7-9%

42

Appendix

I. Latest Results

II. 2013 Peak Season

III. Additional Information

IV. Financial Reconciliations

V. Glossary

43

2Q14 Consolidated Results

*See slide 57 for Operating Expense and Profit Reconciliation **See slide 61 for Adjusted Net Income and EPS Reconciliation

(In millions, except EPS) 2Q14 $ Change % Change

Revenue $14,268 $761 5.6%

Operating Expenses* $12,455 $690 5.9%

Operating Profit* $1,813 $71 4.1%

Net Income** $1,119 $48 4.5%

Diluted EPS** $1.21 $0.08 7.1%

44

Strong Financial Position Strong Free Cash Flow–

A UPS Hallmark

YTD June 30, 2014

• $1.0 billion in Free Cash Flow

• Distribution to Shareholders

• Paid $1.2B in dividends, an increase of 8.1% per share

• Repurchased 13.7M shares for approximately $1.4B

• Total Returns to Shareowners $2.6B & 130% of Net Income

*See slide 61 for Adjusted Net Income and EPS Reconciliation

45

• 5-year contract effective until 7/31/18

• Increases in wages, pension & health and welfare, while remaining cost

competitive

• Cost inflation for wages, health & welfare, and pension less than the last

contract

• Effective wage and benefit increase per hour less than 2%, with modest

volume growth

• Migration to defined contribution healthcare plan for all FT & PT teamsters

• Operations flexibility to adapt to changing marketplace

UPS Labor Contract Good for Customers, Employees and Shareowners

2013 Teamster Contract

46

1.26 1.30 1.29

1.32 1.31 1.35

1.45 1.42 1.43

1.47 1.52

1.69

1.20

1.30

1.39

1.49

1.58

1.68

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Peak Season Average Daily Volume (ADV) Seasonality*

Peak Volume Growth Exceeded Expectations 2013 peak seasonality was considerably stronger than previously experienced

The highest seasonal

peak recorded in history • Planned peak ADV

growth was 8%

• Actual peak ADV

growth was 14%

• Peak day occurred

six days later than expected

Network Capacity

Challenged Drove Cost

Higher

*Seasonality = Peak ADV ÷ Total Year ADV; Peak Season is defined as the days after Thanksgiving and before Christmas

47

Our Response to Peak Season 2013 Additional $500M in Capital

Expenditure Projects

• Improve peak planning collaboration with high-impact customers

• Increase visibility of shipments prior to arrival at UPS facilities

• Hub modernization and capacity expansion

• Expedited ORION rollout to 45% of driver routes by year-end

• Improved customer communication of package location and status

• 2014 operating expenses to increase $100M

48

Modular Capacity Enhancements

• Portable Distribution Center (PDC)

• Mobile units with up to 10 car positions

• Containing roller conveyors

• Designed to attach to existing facilities

• Peak Car Positions (PCP)

• Modified cargo container with 9 car positions

• Short-term solution that is movable with forklift

• Mobile Distribution Center (MDC) Villages

• Low cost alternate operating locations

• Temporary facilities for up to 90 car positions

• Used during technology retro-fit at legacy

buildings

Examples of UPS Mobile Capacity

49

UPS Alternative Fuel / Advanced Technology Fleet Additional

Information

Total Vehicles (US & International) = 3,647*

International Total: 1,082

Propane Vehicles: 847

Compressed Natural Gas Vehicles: 85

Ethanol: 62

Electric Vehicles: 63

Biomethane Vehicles: 19

Hybrid Electric Vehicles: 6

U.S. Total: 2,565

Compressed Natural Gas Vehicles: 930

Liquid Natural Gas Vehicles: 684

Hybrid Electric Vehicles: 380

Composite Vehicles: 400

Electric Vehicles: 102

Hydraulic Hybrid Vehicles: 41

Propane Vehicles: 28

*As of 7/29/2014

50

UPS Global Snapshot Additional Information

• 395,000 employees

• 318,000 U.S. / 77,000 International

• Domestic & International

• 16.9 million packages/day

• 220+ countries and territories; every address in North America and Europe

• More than 96,000 delivery vehicles

• 530 total aircraft:

• 237 UPS aircraft

• 293 chartered aircraft

• 9.4 million daily customers (1.5 million pick-up, 7.9 million delivery)

• Supply Chain & Freight

• Approximately 528 facilities in more than 120 countries / approx. 31 million square feet

• More than 40 dedicated Healthcare facilities / greater than 6 million square feet

UPS Pressroom Fact Sheet - March 2014

51

UPS EMEA Region Snapshot Additional Information

• 44,000 employees

• Europe Operations

• More than 400 operating facilities

• 56 countries and territories

• About 8,800 delivery vehicles

• Airline

• Air Hub located in Cologne/Bonn (Germany)

• 270 Intra-Europe daily flight segments

• More than 100 Intercontinental daily flight segments

• More than 50 Intra-Europe airports served

• 13 Intercontinental airports served

UPS Pressroom Fact Sheet - July 2014

52

Import/export + Domestic

Import/export only

Embargoed/suspended countries

• Evolution of Small Package Market

• Pan-European Trade Creates Growth

• Expansive Product Portfolio

• Express & Expedited

• Express Freight

• Domestic Service in over 40 countries

UPS EMEA: Europe Middle East Africa

50% of international revenue

originates in EMEA Region

80-85% stays in EMEA

53

UPS Asia Region Snapshot Additional Information

• 15,652 Employees

• Asia Operations

• 5,874 operating facilities

• More than 40 countries and territories

• More than 1,900 delivery vehicles

• Airline

• Air Hubs located in Shanghai, Shenzhen, and Hong Kong

• 230 Intra-Asia Pacific weekly flight segments

• 137 International weekly flight segments

• 20 Intra-Asia Pacific airports served

UPS Pressroom Fact Sheet - April 2014

54

Import/export + Domestic

Import/export only

Embargoed countries

20% of international revenue originates in Asia Region

• Intra Asia Trade

• Targeted Emerging Markets

• Import/export service to

every non-embargoed country

• Contractual Domestic Service

• China • Hong Kong • Japan • Australia • Malaysia • Singapore

UPS Asia

55

UPS Americas Region Snapshot (excludes U.S. Domestic)

Additional Information

• More than 18,600 employees, contractors & service providers

• Americas Operations

• Every address in Canada and more than 50 countries and territories in Latin

America and the Caribbean

• More than 4,000 delivery vehicles

• More than 120 Brokerage Operations

• Airline

• Air Hubs located in Hamilton, Mirabel, Calgary, Vancouver, Winnipeg, Toronto and

Miami

• More than 187 Intra-Americas daily flight segments

• More than 40 International daily flight segments

• More than 76 Intra-Americas airports served

UPS Pressroom Fact Sheet - 2013

56

• Near Sourcing

• Trade Agreements: Colombia, Panama

• Americas Region: US exports, Canada, Latin America

• Import/export service to every non-embargoed country

• Domestic Service

• Canada • Mexico • Argentina • Brazil

• Chile

Import/export + Domestic

Import/export only

Embargoed countries

UPS Americas

30% of international revenue

originates in Americas region

57

Operating Expense and Profit Reconciliation Financial Reconciliations

*Adjusted

(amounts in millions) 2000*

% of Adj

Op Profit 2Q14

% of Op

Profit

GAAP Operating Income 4,512$ 747$

U.S. Domestic Package 3,929 209

Teamster Arbitration 59 -

Transfer postretirment benefit obligations to MEP - 957

Adjusted U.S. Domestic Package Op Profit 3,988 88% 1,166 64%

International package 277 444

Transfer postretirment benefit obligations to MEP - 27

Adjusted International Package Op Profit 277 6% 471 26%

SC&F or Non-Package 306 94

Gain on Sale of UPS Truck Leasing (49) -

Transfer postretirment benefit obligations to MEP - 82

Adjusted SC&F Operating Profit 257 6% 176 10%

Adjusted Operating Income 4,522$ 1,813$

(amounts in millions) 2Q14 2Q13 % Chg

Total operating expenses (Adjusted) 12,455 11,765 5.9%

Less: Transfer heatlhcare coverage to MEP 1,066 -

Total operating expenses (GAAP) 13,521$ 11,765$ 14.9%

58

Free Cash Flow Reconciliation Financial Reconciliations

(unaudited)

(amounts in millions) 2007* 2008* 2009 2010* 2011 2012 2013 YTD 2014*

Net cash from operations 6,123$ 7,198$ 5,285$ 3,835$ 7,073$ 7,216$ 7,304$ 3,904$

Capital expenditures (2,820) (2,636) (1,602) (1,389) (2,005) (2,153) (2,065) (813)

Proceeds from disposals of PP&E 85 147 60 304 27 95 104 10

Net change in finance receivables (39) (49) 261 108 184 101 39 13

Other investing activities1

(44) (358) 53 230 (257) 94 (179) (43)

3,305$ 4,302$ 4,057$ 3,088$ 5,022$ 5,353$ 5,203$ 3,071$

1Note: excludes the cash paid or received for business acquisitions or dispositions

*Adjusted

2007 - $6.100 billion Central States multiemployer pension plan withdrawal payment; $1.100 billion tax benefit related to the withdrawal payment.

2008 - $1.228 billion tax benefit related to Central States multiemployer pension plan withdrawal payment.

2010 - Net cash from operations was impacted by $1.466 billion after tax discretionary pension contributions.

2014 - Net cash from operations was impacted by $2.062 billion after tax payment for the Teamster healthcare coverage.

59

ROIC Reconciliation* Financial Reconciliations

*Excluding MTM charge from adjusted Ending Shareowner’s Equity

(amounts in millions)

2008 -

Adjusted

2008 -

GAAP

2009 -

Adjusted

2009 -

GAAP

2010 -

Adjusted

2010 -

GAAP

2011 -

Adjusted

2011 -

GAAP

2012 -

Adjusted

2012 -

GAAP

2013 -

Adjusted

2013 -

GAAP

Operating Profit 6,086 1,619 3,705 3,508 5,722 5,641 6,874 6,080 7,070 1,343 7,073 7,034

Less: Taxes (2,046) (772) (1,333) (1,261) (1,999) (2,082) (2,364) (2,076) (2,439) (230) (2,504) (2,427)

After-Tax Op Profit 4,040 847 2,372 2,247 3,723 3,559 4,510 4,004 4,631 1,113 4,569 4,607

Beginning LT Debt 7,506 7,506 7,797 7,797 8,668 8,668 10,491 10,491 11,095 11,095 11,089 11,089

Ending LT Debt 7,797 7,797 8,668 8,668 10,491 10,491 11,095 11,095 11,089 11,089 10,824 10,824

Beginning Shareowners' Equity 12,183 12,183 6,780 6,780 7,696 7,696 8,047 8,047 7,108 7,108 4,733 4,733

Ending Shareowners' Equity 9,783 6,780 7,871 7,696 8,204 8,047 7,615 7,108 8,315 4,733 6,452 6,488

Average Invested Capital 18,635 17,133 15,558 15,471 17,530 17,451 18,624 18,371 18,804 17,013 16,549 16,567

Return on Invested Capital 21.7% 4.9% 15.2% 14.5% 21.2% 20.4% 24.2% 21.8% 24.6% 6.5% 27.6% 27.8%

Net Income 3,658 655 2,143 1,968 3,495 3,338 4,311 3,804 4,389 807 4,336 4,372

Return on Equity 33.3% 6.9% 29.3% 27.2% 44.0% 42.4% 55.1% 50.2% 56.9% 13.6% 77.5% 77.9%

60

UPS Small Package Adjusted Operating Margin Reconciliation

Financial Reconciliations

Notes about competitors’ margin information used in this presentation: • FDX figures through F4Q14; excludes Freight and Office • TNT Express figures through 2Q14; Not currency adjusted. • DP DHL figures through 2Q14; exclude Mail, Logistics, Financial Services and Consolidated (Express Only); Restated figure excludes restructuring • Sources include FedEx, TNT and DP DHL web sites

(amounts in millions) 3Q13 4Q13 1Q14 2Q14 TTM

GAAP Operating Income

U.S. Domestic Package 1,186$ 1,200$ 927$ 209$ 3,522$

U.S. Domestic Package Adjusted 1,186$ 1,200$ 927$ 1,166$ 4,479$

International Package 417$ 537$ 438$ 444$ 1,836$

International Package Adjusted 417$ 537$ 438$ 471$ 1,863$

Adjusted Small Package Operating Income 1,603$ 1,737$ 1,365$ 1,637$ 6,342$

Revenue

U.S. Domestic Package 8,254 9,308 8,488 8,668 34,718

International Package 3,017 3,372 3,127 3,252 12,768

Total Small Package 11,271$ 12,680$ 11,615$ 11,920$ 47,486$

U.S Domestic Operating Margin* 14.4% 12.9% 10.9% 13.5% 12.9%

International Operating Margin* 13.8% 15.9% 14.0% 14.5% 14.6%

Adjusted Operating Margin* 14.2% 13.7% 11.8% 13.7% 13.4%

61

Adjusted Net Income and EPS Reconciliation Financial Reconciliations

*2008 reflects four declared dividends

(amounts in millions, except per share amounts) 2008* 2009 2010 2011 2012 2013 1Q14 2Q14

GAAP Net Income 655$ 1,968$ 3,338$ 3,804$ 807$ 4,372$ 911$ 454$

Transfer postretirment benefit obligations to MEP -$ -$ -$ -$ -$ -$ -$ 665$

TNT Termination Fee and Related Expenses (net of tax) - - - - - 177 - -

Gain Upon Liquidation of Foreign Subsidiary (net of tax) - - - - - (213) - -

MEPP withdrawal liability (net of tax) - - - - 559 - - -

Pension Mark to Market (net of tax) 2,428 11 75 527 3,023 - - -

Supply Chain & Freight Goodwill Impairment Charge 548 - - - - - - -

International Intangible Impairment Charge 27 - - - - - - -

Aircraft Impairment Charges - 181 - - - - - -

Restructuring Charges - - 98 - - - - -

Currency Remeasurement Charge - 77 - - - - - -

Real Estate Gain - - (109) (33) - - - -

German Business Sale - - 51 - - - - -

Gain on Sale of UPS Logistics Technologies - - (71) - - - - -

Tax-Effect of Above Items - (94) 37 13 - - - -

Other Adjustments to Tax Expense - - 76 - - - - -

Adjusted Net Income 3,658$ 2,143$ 3,495$ 4,311$ 4,389$ 4,336$ 911$ 1,119$

Divided By: Diluted WAVG Shares Outstanding 1,022 1,004 1,003 991 969 948 931 927

Adjusted Diluted Earnings Per Share 3.58$ 2.13$ 3.48$ 4.35$ 4.53$ 4.57$ 0.98$ 1.21$

GAAP Diluted Earnings Per Share 0.64$ 1.96$ 3.33$ 3.84$ 0.83$ 4.61$ 0.98$ 0.49$

Shareholder Distributions

Dividends 1,853$ 1,819$ 1,909$ 2,086$ 2,243$ 2,368$ 626$ 627$

Share Repurchases 3,558 569 809 2,669 1,638 3,846 659 704

Total 5,411$ 2,388$ 2,718$ 4,755$ 3,881$ 6,213$ 1,285$ 1,331$

51% 85% 55% 48% 51% 55%

97% 26.6% 23% 62% 37% 89%

62

Glossary

Definition Definition Definition

ABC Activity Based Costing EMEA Europe, Middle East, and Africa

LTL Less-Than-Truckload

ADV Average Daily Volume EPS Earnings Per Share MTM Mark-To-Market pension revaluation

B2B Business To Business retail channel

FSC Fuel Sur-Charge ORION On-Road Integrated Optimization and Navigation

B2C Business To Consumer retail channel

GDP Gross Domestic Product ROIC Return On Invested Capital

B2R Business To Retail store distribution channel

IAF International Air Freight SC&F Supply Chain and Freight segment

CAGR Compound Annual Growth Rate

IP Industrial Production TTM Trailing Twelve Months

DIAD Delivery Information Acquisition Device

IPO Initial Public Offering

63

UPS Overview Investor Relations

August 2014