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UPS Sets $1 Billion+ Expansion of Global Air Hub

UPS Airlines, launched in 1988, is the 9th largest airline in the world. For more information about UPS Airlines, view our UPS Airlines media kit. Go to the Media Kit Learn more about The Worldport Expansion. Learn more

Strong Growth in International & Domestic Express Business Fuels Demand for Additional Hub Capacity

LOUISVILLE, May 17, 2006 - Four years after opening the most technologically advanced air package sorting hub in the world, UPS (NYSE:UPS) today announced a dramatic expansion that will increase sorting capacity over the next five years by 60 percent to 487,000 packages per hour.

The expansion plan for UPS Worldport^SM, the sophisticated mega hub at the heart of the company's global transportation network, calls for the addition of three aircraft load/unload "wings" to the hub building followed by the installation of high-speed conveyor and computer control systems.

"We anticipate strong growth in global trade to continue for years to come," said Mike Eskew, UPS's chairman and CEO. "Expanding the centerpiece of our worldwide infrastructure is absolutely necessary to support the long-term needs of our customers."

The expansion plan reflects continued robust growth in UPS's air package volume around the world. In the United States, the overnight package market is strong, generally tracking with the Gross Domestic Product. UPS Next Day Air® package volume has grown on average almost 5% since 2003. The strength of global trade also is having a significant impact. For UPS, international import volume into the United States has grown at a double-digit rate for the last four years.

While the final configuration of the work has yet to be set, the expansion will cost at least $1 billion. Work will begin later this year and be completed by 2010. Despite the mammoth size of Worldport, the innovative "smart label" technology that drives its sort process can propel packages through the building's 197 miles of conveyors in as little as eight minutes.

The movement of packages through the vast facility is synchronized by a sophisticated system of cameras that read the detailed information encoded on package labels, triggering a network of computer-activated sorting and tracking devices that process 59 million database transactions every hour with near-perfect reliability.

The expansion is expected to create more than 5,000 additional jobs. Many of those workers will be eligible to participate in the Metropolitan College program in which UPS and Kentucky jointly pay for the higher education of employees.

"UPS Worldport has a significant economic impact on Louisville and Kentucky even beyond the creation of UPS jobs," said Bob Lekites, UPS's Louisville-based vice president of airline and international operations. "More than 90 companies have moved to Louisville in recent years just to be close to Worldport. So this additional investment will create a better Louisville and a better Kentucky and we're extremely pleased with the support we've received from Gov. Ernie Fletcher and Louisville Mayor Jerry Abramson."

The expansion will increase Worldport's footprint by 1.1 million square feet to 5.1 million square feet - the equivalent of more than 113 football fields. The project also will embrace construction of new ramp space to accommodate the giant A380 and 747-400 cargo planes now on order, plus a new vehicle loading facility for the ground network that serves Louisville.

The Worldport project is the latest of several expansion moves to accommodate international and domestic air growth. Since the start of 2005, the company has announced plans to begin operating an air hub in China by 2007; significantly expanded the capacity of its intra-Asia air hub in the Philippines, and completed the expansion of its European air hub in Cologne/Bonn, Germany, doubling that facility's sort capacity.

Worldport is the home base of UPS Airlines, the ninth largest airline in the world with 275 aircraft. UPS air operations encompass over 1,800 flight segments each day and reach into nearly 800 gateways around the world.

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, 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.

Learn more about the Worldport Expansion.

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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.

• Mark Giuffre
  502-329-3060
  
• Norman Black
  404-828-7593