Business Description

1 Overview 1 Strategy 1 Competitive Strengths 2 Products and Services; Reporting Segments 3 Human Capital 4 Customers 5 Competition 5 Government Regulation 6 Where You Can Find More Information 8 Item 1A. Risk Factors 9 Item 1B. Unresolved Staff Comments 16 Item 1C. Cybersecurity 17 Item 2. Properties 18 Operating Facilities 18 Fleet 18 Item 3. Legal Proceedings 18 Item 4. Mine Safety Disclosures 19 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 Shareowner Return Performance Graph 21 Item 6. [Reserved] 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Overview 23 Supplemental Information - Items Affecting Comparability 25 U.S. Domestic Package Operations 30 International Package Operations 33 Supply Chain Solutions ("SCS") Operations 35 Consolidated Operating Expenses 37 Other Income and (Expense) 40 Income Tax Expense 41 Liquidity and Capital Resources 42 Collective Bargaining Agreements 47 New Accounting Pronouncements 47 Critical Accounting Estimates 48 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 55 Item 8. Financial Statements and Supplementary Data 57 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 125 Item 9A. Controls and Procedures 125 Item 9B. Other Information 127 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 127 PART III Item 10. Directors, Executive Officers and Corporate Governance 128 Item 11. Executive Compensation 129 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 129 Item 13. Certain Relationships and Related Transactions, and Director Independence 129 Item 14. Principal Accountant Fees and Services 129 PART IV Item 15. Exhibits and Financial Statement Schedules 130 Item 16. Form 10-K Summary 130 PART I Introductory Note In this Annual Report on Form 10-K ("Annual Report" and "this report"), the "Company," "we," "us" and "our" refer to United Parcel Service, Inc. ("UPS"). With regard to the Company’s segments, "we," "us" and "our" may also refer to the segment being discussed. Unless the context indicates otherwise, whenever we refer in this Annual Report to a particular year, we mean our calendar year ended or ending December 31. Cautionary Statement About Forward-Looking Statements This report and our other filings with the Securities and Exchange Commission ("SEC") contain and in the future may contain "forward-looking statements." Statements other than those of current or historical fact, and all statements accompanied by terms such as "will," "believe," "project," "expect," "estimate," "assume," "intend," "anticipate," "target," "plan" and similar terms, are intended to be forward-looking statements. From time to time, we also include written or oral forward-looking statements in other publicly disclosed materials. Such statements may relate to our intent, belief, forecasts of, or current expectations about our strategic direction, prospects, future results or future events; they do not relate strictly to historical or current facts. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any forward-looking statements because such statements speak only as of the date when made and the future, by its very nature, cannot be predicted with certainty. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. These risks and uncertainties include, but are not limited to, those described in Part I, "Item 1A. Risk Factors" and elsewhere in this report and may also be described from time to time in our future reports filed with the SEC. You should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations or the occurrence of unanticipated events after the date of those statements, except as required by law.…