UPS continues to focus on improving the global communities in which we do business every day. We are constantly reviewing our processes to make sure we are reducing our environmental footprint. This includes examining how we drive, fly and conduct business worldwide. In 2006, we continued to gain new recognition and introduce new initiatives that will help us achieve our sustainability goals for the year 2007. Following are key developments and examples of new initiatives that are helping us achieve our sustainability goals.

Economic Sustainability

• Included in the Dow Jones Sustainability Index for the fifth consecutive year and the FTSE4Good Index for the third consecutive time.
• In 2006, UPS produced record revenue, operating profit and earnings per share.

Community Investment

• In 2006, volunteers collectively logged more than 959,000 hours worldwide through the company's Neighbor to Neighbor volunteer program.
• Encouraged participation in the third annual UPS Global Volunteer Week, during which more than 23,000 employees volunteered 154,000 hours in more than 50 countries.
• In 2006, The UPS Foundation's global contributions totaled US$45.9 million.
• UPS, its employees and retirees pledged US$59.3 million to United Way's 2006 campaign. The pledge marks the seventh consecutive year UPS is United Way's top contributor.
• Named the most socially responsible company among all companies in FORTUNE magazine's "America's Most Admired" survey.
• Included in Business Ethics magazine's 100 Best Corporate Citizens. During 2006, UPS was the only delivery company to make the list.

Workforce Investment and Acknowledgments

• Invested US$24.4 billion in our employees worldwide. This investment includes US$8.6 billion in indirect pay, including income protection, healthcare benefits and retirement plans. It also includes US$113 million (401(k)) SavingsPLUS stock matches.
• Ranked one of the best places to launch a career by BusinessWeek magazine.

Ground and Air Fleet Initiatives

• Continued to add modern, wide-body aircraft including six A300-600s and five MD-11s to our fleet, which improves the overall efficiency of the air network and offers environmental benefits as well. These benefits include increased fuel economy and reduced noise and fuel emissions.
• UPS continues to develop and use sophisticated aircraft routing technology to improve the fuel efficiency and environmental performance of the UPS Airlines – the eighth largest airline in the world.
• Continued to enhance the UPS ground fleet with our "rolling laboratory" philosophy – using our alternative-fuel fleet as a way to learn how new technologies and advancements can be adapted for use in a large delivery fleet. This included purchasing 50 next-generation hybrid electric vehicles that will operate in Dallas, Phoenix, Houston and Atlanta. Additionally, UPS is working with the U.S. Environmental Protection Agency and others to test the world's first fully hydraulic hybrid urban delivery vehicle.

Infrastructure Initiatives

• Continuing the implementation of UPS Package Flow Technologies, which optimize delivery routes. This includes a suite of hardware and software designed, in part, to help UPS plan the most effective and fuel-efficient route for our delivery vehicles. During 2006, the company was able to shave 28.5 million miles off of delivery routes in the U.S.

Recycling

• Recycled 2.7 million pounds of electronic equipment from our own operations. Since the program began in 2000, UPS has recycled 19.7 million pounds of electronic equipment.
• Recycled 36,800 tons of solid waste materials including metals, plastics, paper, corrugated materials, pallets and wood waste. Additionally, UPS purchased 36,300 tons of materials with recycled content.