FTL, LTL, and Long Haul Trucking segments were $8.3 billion, $6.7 billion, and $1.2 billion, respectively, in the first nine months of 2016. The Company’s growth in the first nine months of 2016 was lower than its growth in the comparable periods in 2015 and 2015. UPS’s Global Logistics segment’s gross profit margin in the first nine months of 2016 was 15.3%, which was essentially unchanged from 15.4% in the first nine months of 2015. In the third quarter of 2016, the margin decreased to 14.6%, and there was a similar decrease in the fourth quarter of 2016 to 14.0%. The Global Logistics segment’s gross profit margin also includes UPS Freight’s operating results because UPS Freight is a part of Global Logistics segment. UPS’s transportation segment was up 8.4% over the first nine months of 2015 due to strong package volumes, which supported the segment’s increased pricing and were partially offset by the increased pricing of the Global Logistics segment. In the first nine months of 2016, package volume increased by 2.4% compared to the first nine months of 2015. The higher pricing that supported the higher volume was primarily due to an 8.5% increase in revenue per package compared to the same period in 2015. The increase in revenue per package was primarily due to higher rates associated with the Global Logistics segment and other segments. The transportation segment’s revenue per package increased by 4.4% year-over-year, primarily because the package volume increased, but also because pricing increased by 4.1%. Excluding fuel surcharges and higher fuel costs, UPS’s transportation segment had a 4.6% increase in revenue per package from the first nine months of 2015 to the first nine months of 2016. Excluding fuel surcharges and higher fuel costs, there was a 5.5% increase in revenue per package from the third quarter of 2016 to the first nine months of 2016. The Freight segment was up 8.8% for the first nine months of 2016. The segment’s revenue per package increased by 7.9% from the first nine months of 2015. In the first nine months of 2016, the Freight segment earned 28 cents per package. Excluding fuel surcharges and fuel costs, UPS Freight earned 10 cents per package for the first nine months of 2016. For the first nine months of 2016, UPS Freight provided service to approximately 34,000 shippers in 20 countries in Europe, the Middle East, Africa, North America, South America, Asia, and the Pacific Region. During the third quarter of 2016, UPS Freight launched its Freight Forwarding program in London, Germany, Austria, Switzerland, and Italy with a network of over 500 transportation partners from more than 50 countries, including 50 that serve these four countries. In North America, UPS Freight recently made a significant investment in its freight delivery network. In addition to adding new routes and offering same-day and next-day delivery, the company invested $17 million in its UPS Package Express network. UPS Freight has also upgraded and expanded its UPS Access point-to-point distribution network and its FedEx Ground fleet. UPS’s domestic retail segment was up 8.3% from the first nine months of 2015. Excluding fuel surcharges, revenue per package was up 4.4% for the first nine months of 2016. UPS’s domestic retail segment experienced strong consumer spending through the holidays, supported by robust holiday results in the December quarter. UPS Freight was up 7.9% for the first nine months of 2016. Excluding fuel surcharges, the segment earned 12 cents per package, including $1.17 in fuel savings per package compared to the same period in 2015. UPS was able to increase its operating margins in the third quarter of 2016 despite the fact that transportation pricing increased 4.1% year-over-year. This was due to the higher operating margins at UPS Freight, the segment that experienced the most significant pricing increase. UPS Freight’s average price per package increased by 3.2% year-over-year during the first nine months of 2016. Excluding fuel surcharges and higher fuel costs, the average price per package increased by 4.1%. The improvement in operating margins at UPS Freight was due to: • Increased revenue per package due to higher shipments in December, including heavy shipments. UPS Freight had a 14.5% increase in the average revenue per package in December 2016 compared to the same period in 2015. • Significant improvements in labor utilization, including labor efficiency at UPS Freight’s distribution centers, which helped improve operating costs per package by approximately 3.4%. • Cost improvements at the UPS Access Point-to-Point (AP-2) network and the FedEx Ground network. • Better inventory management. • Improved network performance at the FedEx Ground and UPS Access networks. UPS’s domestic retail segment continues to benefit from strong consumer spending throughout the year. Consumer spending in the December quarter was on par with the third quarter of 2015. Retail operating margins increased from 11.6% in 2015 to 12.4% in 2016. Within the domestic retail segment, FedEx Ground continues to experience very strong performance, which is driving significant increases in operating profits as a percentage of revenue. • UPS Freight launched its Freight Forwarding program in London, Germany, Austria, Switzerland, and Italy with a network of over 500 transportation partners from more than 50 countries, including 50 that serve these four countries. In North America, UPS Freight recently made a significant investment in its freight delivery network. In addition to adding new routes and offering same-day and next-day delivery, the company invested $17 million in its UPS Package Express network. UPS Freight has also upgraded and expanded its UPS Access point-to-point distribution network and its FedEx Ground fleet. • UPS Freight invested $10 million in its intermodal network during the first nine months of 2016. • UPS had significant customer wins throughout the year, particularly in the summer of 2016 when UPS Freight grew market share for the year-to-date period as compared to the first nine months of 2015. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, including statements regarding UPS’s consolidated financial condition, results of operations, credit quality, future commitments and plans, transportation segment’s operating margins and other non-UPS measures for the first nine months of 2016, revenues, expenses, liquidity, and capital allocation plans, and other non-financial items, such as capital expenditures, are forward-looking statements. These forward-looking statements are not historical facts, but rather reflect UPS’s current expectations regarding future events, many of which, by their nature, are inherently uncertain and beyond its control. All forward-looking statements included in this release are based on information available to UPS as of the date of this release, and UPS assumes no obligation to update any such forward-looking statements. Forward-looking statements are not guarantees of performance. Actual results could differ materially from those currently anticipated. Forward-looking statements, including the statements about UPS Freight’s pricing, shipment growth, and other projections of future performance, are subject to various risks and uncertainties that could cause actual results to differ materially from current expectations. Certain factors that could cause actual results to differ materially from those in the forward-looking statements include those factors listed in UPS’s filings with the Securities and Exchange Commission, including the factors described under the captions “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in UPS’s 2016 Form 10-K and the under the headings “Risks Related to UPS Freight” and “Risks Related to UPS Global Logistics” in UPS’s Form 10-K for the year ended December 31, 2015. Forward-looking statements speak only as of the date of this release. UPS undertakes no obligation to update or review any forward-looking statement in light of new information or future events, except as otherwise required by law. The UPS brand marks are used under license from UPS (NYSE: UPS) and are owned by UPS or its licensors. The PPS marks are used under license from PPS and are owned by UPS or its licensors. UPS Investor Relations at (800) 538-3847 or http://www.up.com/investor. UPS FREIGHT STATISTICS (Unaudited) Q3'16 Q2'16 Q1'16 Q4'15 Q3'15 Q2'15 Q1'15 Average Revenue per Package $4.48 $4.51 $4.60 $4.70 $4.66 $4.61 $4.58 Average Revenue per Package (Excluding Fuel Surcharges) $4.30 $4.32 $4.39 $4.46 $4.40 $4.36 $4.32 Average Rate for Truckload shipments in the Domestic Retail segment