UPS Board Increases Dividend, Names Scott Davis a Director

ATLANTA, Feb. 9, 2006 - The Board of Directors of UPS (NYSE:UPS), citing its confidence in the company’s financial position and prospects for growth, today increased the quarterly dividend from 33-cents per share to 38-cents per share on all outstanding Class A and Class B shares.

The Board also announced it had appointed Scott Davis, UPS’s chief financial officer, to serve as a director. Davis will replace Lea Soupata, who retired last month as UPS’s senior vice president for human resources. Davis will stand for election to a regular one-year term at the annual shareowners meeting in May.

The increase is the fourth dividend boost in the past three years, pushing up the payout by 81% from 21-cents per share since February 2003. The new dividend is payable March 7, 2006, to shareholders of record on Feb. 21, 2006.

“UPS generates exceptional cash flow and has raised its dividend in nine of the last 10 years,” said Mike Eskew, UPS chairman and CEO. “Moving forward, we are confident that the company will continue to produce consistent, strong growth.”

The Board’s decision to increase the quarterly dividend follows a record performance by the company in 2005 with diluted earnings per share rising 18.4%, and predictions of a strong 2006 with total earnings per share expected to climb 11-to-16%. The company also expects to continue generating substantial free cash flow in 2006.

Davis, 54, has served as UPS’s chief financial officer since 2001. He joined the company in 1986 after UPS acquired II Morrow, an Oregon high tech firm. A native of Oregon, Davis had served as the chief financial officer and then CEO of II Morrow. Davis is a Certified Public Accountant and serves as a director of the Federal Reserve Bank of Atlanta and on the Board of Honeywell International, Inc.

UPS 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.

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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.

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Norman Black

Public Relations

UPS

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