UPS to Cancel A380 Order

UPS (NYSE:UPS) today announced its intent to cancel later this year an order for 10 Airbus A380 freighters.

The final cancellation decision will be formally presented to Airbus on the first date specified under an agreement reached last week that gives either party the right to terminate the order.

Last week's agreement specified a revised delivery schedule that delayed UPS's first A380 jumbo freighter from 2010 to 2012. UPS originally expected its first freighter in 2009.

UPS had intended to complete an internal study of whether it could wait until 2012 for the aircraft, but now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane.

"Based on our previous discussions, we had felt that 2012 was a reasonable estimate of when Airbus could supply this plane," said David Abney, UPS's chief operating officer and president of UPS Airlines. "We no longer are confident that Airbus can adhere to that schedule. UPS has built one of the largest airlines in the world in order to ensure reliable service to our customers, and we're confident we have the resources to continue doing so in the future."

UPS, Airbus Revise A380 Agreement

UPS (NYSE:UPS) and Airbus signed an agreement yesterday that sets out a timetable for deciding the status of UPS's order for the freighter version of the A380. The agreement specifies changed delivery dates for the A380F and provides for possible termination of the original purchase agreement by either party later in 2007.

Deliveries of UPS's first 10 A380s were originally scheduled to begin in 2009 and run through 2012.

"UPS's decision to purchase the A380 freighter was based on a lengthy evaluation of our future network needs to meet customer demands across a variety of global trade lanes," said Bob Lekites, UPS's vice president of Airline and International Operations. "Those needs still exist and UPS has been carefully evaluating various options since Airbus announced production delays late last year. This agreement will provide us additional time to evaluate our network requirements and make a decision once and for all as to how best to ensure service to our customers."

Epps Retires as President of The UPS Foundation

UPS (NYSE:UPS) today announced the appointment of Lisa Hamilton, a Public Affairs manager in Washington, D.C., as the next president of The UPS Foundation, succeeding the retiring Evern Cooper Epps.

Hamilton will take the reins of The UPS Foundation in March. A native of Atlanta, she earned a BS degree in Commerce from the University of Virginia and a Juris Doctor degree from the University of Michigan. She has been with UPS for 10 years and before her current post, served as The UPS Foundation's program director.

Founded in 1951 and based in Atlanta, The UPS Foundation donates more than $45 million annually to charitable organizations worldwide. The UPS Foundation's major initiatives include programs that support global volunteerism, literacy programs and hunger relief. In recent years, the company has focused on expanding its philanthropy and volunteer programs outside the United States in tandem with the company's business expansion.

Epps, a native of Detroit, joined UPS 32 years ago and has served as president of The UPS Foundation since 1998. Only the fourth president in the Foundation's 55-year history, she has guided the organization through a period of significant growth and change.

During her tenure, The UPS Foundation focused its giving into three primary areas: volunteerism, hunger and literacy.

In the area of volunteerism, a key effort has been helping non-profits better manage their own networks of volunteers through streamlined management techniques and technology tools. More than $12.3 million has been contributed to support such projects at both the national and local levels. Through these strategies, charitable partners have succeeded in attracting additional recruits from more diverse pools of volunteers; improved retention rates for their volunteers, and helped volunteers become more effective in actually delivering social services.

The heart of UPS's philanthropic outreach is the company's Neighbor to Neighbor program, which experienced a dramatic expansion under Epps' guidance. This program mobilizes UPS employees and their families to serve as volunteers in their communities. It provides UPS employees and their families with hands-on volunteer opportunities where they live and work and is part of an ongoing company-wide effort to heighten awareness for community needs and promote the importance of volunteerism.

Last year, UPS employees donated more than 950,000 hours in volunteer activities around the world.

In recent years, Epps turned her focus toward the development of a global strategy for The UPS Foundation as UPS experienced rapid international expansion and growth. Over the past five years, contributions outside of the United States have grown from $385,000 to more than $4 million annually. And employee volunteerism has skyrocketed thanks to a new effort that the company calls Global Volunteer Week. Last year, more than 23,000 UPS people in Asia and Latin America, Europe and the United States participated in at least one activity over the seven days, contributing more than 154,000 hours of service.

"Evern has led the Foundation through its most dynamic period of growth and change and in the process she has touched millions of lives," said Mike Eskew, UPS chairman and CEO. "Perhaps her most important legacy is the global perspective she has brought to the Foundation, which will be a key focus in the coming years."

In addition to her Foundation duties, Epps has served in leadership roles in a number of community organizations including the Northwest Georgia Girl Scouts Council; the National Urban League; United Way of America; the Points of Light Foundation; the Metro Atlanta YMCA; the Center for Corporate Citizenship at Boston College; the Andrew Young School of Policy, and the Metro Atlanta Chamber of Commerce. She also is an appointed member of President George W. Bush's Council on Service and Civic Participation and plans to continue her work with that organization.

The UPS Foundation pursues its initiatives by identifying specific projects where its support can help produce a measurable social impact. Visit community.ups.com for more information about UPS's community involvement.

UPS Board Nominates New Director Gary L. Crittenden

The Board of Directors of UPS (NYSE:UPS) announced the nomination of a new director to stand for election at the annual shareowners' meeting in May.

The new candidate is Gary L. Crittenden, executive vice president and chief financial officer of the American Express Co. He assumed those positions in June 2000 and is a member of the American Express Global Leadership Team, the company's senior-most management group. Crittenden serves as a key advisor on strategic and financial matters worldwide as well as representing American Express to investors, lenders and rating agencies.

"We are pleased to nominate an executive of Gary's caliber for election to our Board," said Mike Eskew, UPS's chairman and CEO. "UPS will benefit greatly from his skills and experience in global finance and strategy."

Crittenden, 53, began his career in consulting with Bain & Company, where he worked on a range of strategic projects in the United States and Germany. Prior to joining American Express, he also worked as the chief financial officer of Monsanto and Sears Roebuck Co.

Crittenden holds a BS degree in management from Brigham Young University and an MBA from Harvard. He currently serves on the Board of Directors of Staples Inc.

In announcing Crittenden's nomination, the Board also disclosed that a long-time independent director, Gary MacDougal, would not stand for re-election in accordance with the company's corporate governance guidelines. The guidelines state that a director should not be nominated for election once he or she attains the age of 70. MacDougal, the former chairman and CEO of Mark Controls Corp., currently is the senior member of the UPS Board, having become a director in 1973.

"It is impossible to overstate the contributions of Gary MacDougal," said Eskew. "Gary brought an essential outside perspective as well as global view to UPS when it was a private, much-smaller U.S. company. And he's the type of individual who constantly challenges everyone to think outside the box. UPS will miss Gary and I will miss Gary."

MacDougal served as the chairman and CEO of Mark Controls from 1969 to 1987. Prior to that, he was a partner at McKinsey & Co., an international management consulting firm. In 1989, MacDougal was appointed by President George H.W. Bush as a delegate and alternate representative in the U.S. delegation to the United Nations. He currently serves as a director of the Bulgarian American Enterprise Fund.

A former U.S. Navy officer, MacDougal earned a bachelor's degree in engineering at UCLA and an MBA degree from Harvard. He serves as an advisory director of Saratoga Partners, a New York-based venture capital fund.

The current directors who will seek re-election to the Board include Mike Eskew; Scott Davis; Michael J. Burns; Stuart E. Eizenstat; James P. Kelly; Ann M. Livermore; Victor A. Pelson; Carol B. Tome; John W. Thompson, and Ben Verwaayen. John Beystehner, who retired on Jan. 2 as UPS's chief operating officer, is not seeking re-election.

The annual shareowners' meeting will be held May 10, 2007. The Board of Directors has fixed the close of business on March 12, 2007, as the record date for determining holders of UPS common stock entitled to notice of, and to vote at, the annual meeting.

UPS, which celebrates its 100th birthday 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