Exhibit 99.1

APPEALS COURT SUPPORTS UPS, REVERSES U.S. TAX COURT

ATLANTA, JUNE 21, 2001 -- The 11th U.S. Circuit Court of Appeals, in an
important ruling, today overturned a 1999 decision that UPS had improperly tried
to avoid federal income taxes when it restructured its program for providing
extra package insurance to its customers.

The appeals court said the IRS and Tax Court were wrong to brand UPS as
attempting a "sham transaction" to avoid its tax obligations. After reversing
the 1999 decision, the appellate court then remanded the case back to the U.S.
Tax Court, saying any claims by the IRS should be analyzed under provisions of
the Tax Code cited by UPS.

"The sophistication (of the insurance revisions) does not change the fact that
there was a real business that served the genuine need for customers to enjoy
loss coverage and for UPS to lower its liability exposure," the court majority
wrote in a 16-page opinion. "We therefore conclude that UPS's restructuring of
its excess-value business had both real economic effects and a business purpose,
and it therefore under our precedent had sufficient economic substance to merit
respect in taxation.

"For the foregoing reasons, we reverse the judgment against UPS and remand the
action to the Tax Court...."

Based on the original Aug. 9, 1999, decision of a Tax Court judge that applied
to the 1984 tax year, UPS estimated its potential liability at $1.8 billion for
all subsequent years if his ruling were allowed to stand. The company then
recorded a special tax assessment on its books of $1.786 billion, reducing its
income for the second quarter of 1999 by a net $1.442 billion. Without conceding
liability, UPS then paid $1.8 billion into a special account with the IRS,
pending a decision by the 11th Circuit Court of Appeals. The balance will remain
in place pending further proceedings on remand.

"This case was much more to us than a dispute over tax regulations and Tax Code
interpretations, because we hold nothing more sacred than our reputation," said
UPS Chairman and CEO Jim Kelly. "So we are extremely pleased the original
opinion has been reversed."

The case, known as UPS vs. Commissioner of Internal Revenue, was argued before
the 11th Circuit on March 7. The case focused on the manner in which UPS decided
to exit the excess value coverage business in 1984, creating a new, independent
company known as Overseas Partners Ltd., or OPL. OPL subsequently based itself
in Bermuda and over the years, grew into one of the largest re-insurance
companies in the world.

Prior to 1984, UPS provided excess value coverage itself. After creating and
spinning off OPL, UPS engaged another U.S. company, National Union Fire
Insurance Co., to provide the insurance purchased by UPS shippers.

The IRS argued in 1997 that UPS had created OPL solely to avoid federal taxes
and that UPS must pay federal taxes on OPL's income. UPS, for its part,
adamantly and consistently disputed the IRS' position, saying it had followed
all applicable laws and tax regulations in establishing OPL. The appeals court
ruled today "that OPL is an independently taxable entity that is not under UPS's
control."

Before and after the changes, UPS offered the lowest rates in the industry for
excess value coverage. To this day, a package with a value of $300 can be
insured at UPS for 70-cents, compared to $4 for the U.S. Postal Service, $2.50
for FedEx and $2.10 for DHL.

UPS is the world's largest express carrier and largest package delivery company,
serving more than 200 countries and territories around the world. Headquartered
in Atlanta, Ga., the company is located on the Web at www.ups.com. Earlier this
year, UPS was recognized by Fortune magazine as "America's Most Admired" package
and mail delivery company for the 18th consecutive year.

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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 involve certain risks and uncertainties,
including statements regarding the intent, belief or current expectations of UPS
and its management regarding the company's strategic directions, prospects and
future results. Certain factors may cause actual results to differ materially
from those contained in the forward-looking statements, including our
competitive environment, economic and other conditions in the markets in which
we operate, strikes, work stoppages and slowdowns, governmental regulation,
increases in aviation and motor fuel prices, the failure of proposed
acquisitions to be completed for any reason, 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.