UPS Qualified Stock Ownership Plan

   Financial Statements
   as of and for the Years Ended
   December 31, 2000 and 1999,
   Supplemental Schedules
   as of and for the Year Ended
   December 31, 2000,
   and Independent Auditors' Report



UPS QUALIFIED STOCK OWNERSHIP PLAN

TABLE OF CONTENTS
-------------------------------------------------------------------------------


                                                                           Page

INDEPENDENT AUDITORS' REPORT                                                  l

FINANCIAL STATEMENTS AS OF AND
  FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999:

  Statements of Net Assets Available for Benefits                             2

  Statements of Changes in Net Assets Available for Benefits                  3

  Notes to Financial Statements                                               4

SUPPLEMENTAL SCHEDULES AS OF AND FOR
  THE YEAR ENDED DECEMBER 31, 2000:

  Schedule of Assets Held for Investment Purposes at End of Year              8

  Schedule of Reportable Transactions                                         9

  Schedule of Realized Loss on Sale of Investments and
    Unrealized Depreciation in Fair Value of Investments                     10

Schedules  required under the Employee  Retirement  Income Security Act of 1974,
other than the  schedules  listed above,  are omitted  because of the absence of
conditions under which they are required.



INDEPENDENT AUDITORS' REPORT

Administrative Committee of UPS Qualified Stock Ownership Plan:

We have audited the accompanying statements of net assets available for benefits
of the UPS Qualified  Stock  Ownership Plan (the "Plan") as of December 31, 2000
and 1999,  and the related  statements  of changes in net assets  available  for
benefits  for  the  years  then  ended.  These  financial   statements  are  the
responsibility of the Plan  Administrative  Committee.  Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the net assets  available for benefits of the Plan as of December 31,
2000 and 1999,  and the changes in net assets  available  for  benefits  for the
years then ended in conformity with accounting  principles generally accepted in
the United States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental  schedules listed in the
Table of Contents are presented  for the purpose of additional  analysis and are
not a required part of the basic  financial  statements,  but are  supplementary
information  required by the  Department  of Labor's Rules and  Regulations  for
Reporting and Disclosure  under the Employee  Retirement  Income Security Act of
1974.  These  schedules  are  the  responsibility  of  the  Plan  Administrative
Committee. Such schedules have been subjected to the auditing procedures applied
in our audit of the basic 2000  financial  statements  and, in our opinion,  are
fairly stated in all material  respects when considered in relation to the basic
financial statements taken as a whole.



/s/ Deloitte & Touche LLP
May 1, 2001
Atlanta, Georgia




UPS QUALIFIED STOCK OWNERSHIP PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
-------------------------------------------------------------------------------

                                                        2000            1999
ASSETS

Investments                                         $655,645,416   $804,802,683

Receivables:
   Employer contributions                             16,902,195     15,367,595
   Dividends receivable                                1,917,283      3,535,480
                                                    ------------   ------------
        Total receivables                             18,819,478     18,903,075
                                                    ------------   ------------
NET ASSETS AVAILABLE FOR BENEFITS                   $674,464,894   $823,705,758
                                                    ============   ============

See notes to financial statements.






UPS QUALIFIED STOCK OWNERSHIP PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
----------------------------------------------------------------- -------------


                                                          2000          1999

NET ASSETS AVAILABLE FOR BENEFITS -
  Beginning of year                                   $823,705,758  $85,439,588
                                                      ------------  -----------

INCREASE IN PLAN ASSETS ATTRIBUTED TO:
   Employee transfers from UPS Savings Plan, net                -   110,452,753
   Employer contributions                              60,563,202    54,665,744
   Dividend income                                      7,805,740     6,555,653
                                                        ---------     ---------

        Total increase                                 68,368,942   171,674,150

DECREASE IN PLAN ASSETS ATTRIBUTED TO:
  Benefits paid to Plan participants                   26,862,327     3,088,292
  Employee transfers to UPS Savings Plan, net          69,894,655             -
                                                       ----------     ---------
        Total decrease                                 96,756,982     3,088,292

OTHER CHANGES IN NET ASSETS -
  Net (depreciation) appreciation in fair value of
    investments                                      (120,852,824)  569,680,312
                                                     ------------   -----------

NET (DECREASE) INCREASE IN PLAN ASSETS               (149,240,864)  738,266,170
                                                     ------------   -----------
NET ASSETS AVAILABLE FOR BENEFITS -
  End of year                                       $674,464,894   $823,705,758
                                                    ============   ============


See notes to financial statements.




UPS QUALIFIED STOCK OWNERSHIP
PLAN

NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999
---------------------------------


1.  DESCRIPTION OF THE PLAN

The UPS  Qualified  Stock  Ownership  Plan (the  "Plan") is a voluntary  defined
contribution  plan  established  for  employees of United Parcel  Service,  Inc.
("UPS") who are not members of a collective  bargaining unit and who satisfy the
participation requirements of the Plan. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA").

The Plan became effective January 1, 1998. The Plan was established to provide a
matching  contribution  to those  employees of UPS who make  elective  deferrals
under the UPS Savings Plan and to invest that matching  contribution entirely in
UPS  common  stock.  The  Plan  allows  for  UPS  to  match,   through  employer
contributions to the Plan, 100% of pre-tax contributions made to the UPS Savings
Plan  up to a  maximum  of  3%  of  each  participant's  eligible  compensation.
Effective  November 23, 1998,  the Plan also  permits  participants  to transfer
after-tax  and pre-tax  amounts  from the UPS  Savings  Plan to the Plan for the
purpose of investing  such amounts in UPS common stock.  The Plan does not allow
for direct employee contributions.

Any amounts transferred from the UPS Savings Plan to the Plan may be transferred
back to the UPS Savings Plan at any time. Additionally, if a Plan participant is
at least 45 years of age and has 10 or more years of  employment  with UPS,  the
participant may transfer all or any portion of the matching contribution made by
UPS to the  UPS  Savings  Plan at any  time.  In the  event  a Plan  participant
transfers  amounts from the Plan to the UPS Savings Plan, the  participant  must
wait at least one year  from the date of the last  transfer  to the UPS  Savings
Plan before transferring such amounts back to the Plan.

The Plan does not  permit  withdrawals  or  distributions  except in the case of
termination of employment or upon the death or total and permanent disability of
the participant.  Any distribution  from the Plan ordinarily will be made in the
form of whole shares of UPS common  stock,  with any  fractional  shares paid in
cash. However, a participant may request that the entire distribution be made in
cash. A participant  receiving UPS common stock at a time when such stock is not
readily tradable on an established securities market may require UPS to purchase
the stock by giving  written  notice to UPS  within 60 days  after the stock was
distributed or within the first 60 days of the following calendar year.

Effective  March 17, 1999, the Plan was amended to limit transfers into the Plan
such that immediately following the transfer, a participant's  investment in the
Plan cannot exceed 20% of the participant's  combined investment balances in the
UPS Savings Plan and the Plan. However,  notwithstanding the foregoing, matching
contributions continue to be made in UPS common stock.

Effective July 20, 1999, the Plan was amended to suspend further  transfers from
the  UPS  Savings  Plan  to  the  Plan  until  further   notice  from  the  Plan
Administrative  Committee.  Effective  May 15,  2000,  the  Plan  Administrative
Committee authorized the resumption of such transfers.

Effective  May 1, 2000,  the UPS Savings Plan was amended to allow  employees to
become eligible to participate on the first day of the month  coinciding with or
immediately following the date he or she has completed a period of service of at
least  six  months.   Accordingly,   these  individuals  are  also  eligible  to
participate in the Plan.

At  December  31,  2000 and 1999,  the  number of  participants  in the Plan was
approximately  46,000  and  42,000,  respectively.  The  provisions  of the Plan
provide that a participant is 100% vested in both amounts  transferred  from the
UPS Savings Plan and employer-matching contributions at all times.

Although it has not  expressed  any intent to do so, UPS has the right under the
Plan to  discontinue  its  contributions  at any time and to terminate  the Plan
subject to the provisions of ERISA.

All expenses incident to the operation of the Plan are paid by UPS.

Each  participant's  account is  credited/debited  with transfers of participant
contributions  from/to the UPS Savings Plan,  matching  contributions  from UPS,
Plan earnings (losses), and distributions.

2.  SIGNIFICANT ACCOUNTING POLICIES

Basis of  Accounting  - The Plan's  financial  statements  are  prepared  on the
accrual basis of accounting.

Use of Estimates - The  preparation of financial  statements in conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts of net assets available for benefits and changes therein. Actual results
could  differ  from those  estimates.  The Plan  invests  in UPS  common  stock.
Investment  securities,  in  general,  are  exposed  to various  risks,  such as
interest  rate,  credit and overall  market  volality.  Due to the level of risk
associated with certain investment  securities,  it is reasonably  possible that
changes in the value of  investment  securities  will occur in the near term and
that such changes could materially affect the amounts reported in the statements
of net assets available for plan benefits.

3.  INVESTMENTS

Investments  consist of 11,147,935 and  11,663,807  shares of UPS Class A common
stock at December 31, 2000 and 1999, respectively.  The investment in UPS common
stock is carried at fair value of $58.813 and $69.00 per share at  December  31,
2000 and 1999,  respectively.  The value of each share of Class A  common  stock
held by the Plan at December  31, 2000 and 1999 is equal to the price of a share
of Class B common  stock as  reported by the New York Stock  Exchange.  The Plan
owns three different  types of UPS Class A common stock.  The different types of
Class  A  common  stock  are  identical  except  for  the  applicable   transfer
restriction  periods.  Class A-1 and A-2 share are convertible and  transferable
into Class B shares at December 31, 2000,  but were  restricted for a portion of
2000. Class A-3 shares are not convertible and transferable  into Class B shares
until May 3, 2001. At December 31, 2000, the Plan owned 3,997,528  shares of UPS
Class A-3 common stock. Total fair value of UPS Class A common stock held by the
Plan  at  December  31,  2000  and  1999  is  $655,645,416   and   $804,802,683,
respectively.

In early  February  2000,  UPS announced an offer to purchase up to  100,893,277
shares of Class A-1 common stock for $60 per share.  The actual number of shares
of UPS Class A-1 common stock held by the Plan that were to be validly  tendered
and accepted for purchase by UPS was 396,192.



4.  PLAN ADMINISTRATION

The Plan Administrator is an Administrative Committee, which is appointed by and
serves at the  pleasure of the Board of  Directors  of UPS.  The  Administrative
Committee is currently  comprised of three members who are  responsible  for the
Plan's  operations.  The  members are Michael  Connell,  Corporate  Compensation
Manager, UPS; Thomas W. Delbrook,  Corporate Treasury Manager, UPS; and Clifford
L. Hinds,  Corporate  Financial  Reports,  Plans, and Accounting  Manager,  UPS.
Citistreet  (formerly State Street Bank & Trust Company) provides  recordkeeping
and  administrative  services to the Plan.  First Union National Bank of Georgia
acts as the Trustee for the assets of the Plan.

5.  TAX STATUS

The Plan has not received a letter of  determination  from the Internal  Revenue
Service which states that the Plan is designed in accordance with the applicable
sections of the Internal Revenue Code ("IRC").  However,  the Plan Administrator
and the Plan's tax counsel  believe  that the Plan is designed  and is currently
being operated in compliance with the applicable requirements of the IRC.

6.  TRANSFER OF PLAN ASSETS TO AND FROM THE UPS SAVINGS PLAN

During 2000 and 1999, participants  transferred account balances from and to the
UPS  Savings  Plan.  Transfers  from the UPS  Savings  Plan for the years  ended
December  31,  2000 and  1999  were  $958,414  and  $124,593,692,  respectively.
Transfers to the UPS Savings Plan for the year ended  December 31, 2000 and 1999
were $70,853,069 and $14,140,939, respectively.



                             SUPPLEMENTAL SCHEDULES

                        (See Independent Auditors'Report)





UPS QUALIFIED STOCK OWNERSHIP PLAN

SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2000
-------------------------------------------------------------------------------

                                                                                  
                                     Description of Investment
    Identity of Issuer,               Including Maturity Date,
     Borrower, Lessor,              Rate of Interest, Collateral,                            Current
     or Similar Party                 Par, or Maturity Value                    Cost          Value

*United Parcel Service, Inc.  11,147,935 shares of Class A Common Stock     $243,402,553   $655,645,416
                                                                            ============   ============

*Party-in-interest to the Plan







UPS QUALIFIED STOCK OWNERSHIP PLAN

SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 2000
----------------------------------------------------------------------------------------------------------------------

                                                                                                   
                                                                                                          Current
                                                                                                         Value of
                                                                                                         Asset on
           Identity of                     Description of         Purchase      Selling      Cost of    Transaction
          Party Involved                       Asset               Price         Price        Asset         Date        Net Gain

Series of Transactions:
First Union National Bank of Georgia   UPS Class A common stock  $69,448,283               $69,448,283  $69,448,283
First Union National Bank of Georgia   UPS Class A common stock               $97,752,727   63,442,048   63,442 048   $34,310,679





UPS QUALIFIED STOCK OWNERSHIP PLAN

SCHEDULE OF REALIZED LOSS ON SALE OF INVESTMENTS AND
UNREALIZED DEPRECIATION IN FAIR VALUE OF INVESTMENTS1
YEAR ENDED DECEMBER 31, 2000
-------------------------------------------------------------------------------



Realized loss on sale of investments:
  Aggregate proceeds                                                $97,752,727
  Aggregate carrying amount                                         112,404,795
                                                                    -----------
     Total                                                          (14,652,068)

Unrealized depreciation in fair
  value of investments                                             (106,200,756)
                                                                   ------------
      Total                                                       $(120,852,824)
                                                                  =============



1 Measurement  criteria for this schedule  conform with the  requirements of the
annual report Form 5500. The amount of realized loss and unrealized depreciation
are determined by using the fair value at January 1, 2000 and fair value at sale
date for realized loss or December 31, 2000 for unrealized depreciation.





SIGNATURES

The Plan.  Pursuant to the requirements of the Securities  Exchange Act of 1934,
the trustees (or other  persons who  administer  the Plan) have duly caused this
annual  report to be  signed on its  behalf  by the  undersigned  hereunto  duly
authorized.


                                  UPS Qualified Stock Ownership Plan
                                  /s/ Clifford L.Hinds
                                  ----------------------------------
                                  Clifford L. Hinds
                                  Administrative Committee Member
                                  June 28, 2001




                                  Exhibit Index


Consent of Deloitte & Touche LLP