United Parcel Service Annual Report 2019

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United Parcel Service Annual Report 2019

Form 10-K (NYSE:UPS)

Published: February 21st, 2019

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United Parcel Service (UPS) Historical Annual Reports 2002-2024

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2024

United Parcel Service (UPS) 10-K Annual Report - Feb 20th, 2024

1.0mb

2023

United Parcel Service (UPS) 10-K Annual Report - Feb 21st, 2023

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2022

United Parcel Service (UPS) 10-K Annual Report - Feb 22nd, 2022

169kb

2021

United Parcel Service (UPS) 10-K Annual Report - Feb 22nd, 2021

172kb

2020

United Parcel Service (UPS) 10-K Annual Report - Feb 20th, 2020

185kb

2018

United Parcel Service (UPS) 10-K Annual Report - Feb 21st, 2018

208kb

2017

United Parcel Service (UPS) 10-K Annual Report - Feb 21st, 2017

1.5mb

2016

United Parcel Service (UPS) 10-K Annual Report - Feb 25th, 2016

168kb

2015

United Parcel Service (UPS) 10-K Annual Report - Feb 27th, 2015

168kb

2014

United Parcel Service (UPS) 10-K Annual Report - Feb 28th, 2014

168kb

2013

United Parcel Service (UPS) 10-K Annual Report - Feb 28th, 2013

169kb

2012

United Parcel Service (UPS) 10-K Annual Report - Feb 27th, 2012

797kb

2011

United Parcel Service (UPS) 10-K Annual Report - Feb 28th, 2011

720kb

2010

United Parcel Service (UPS) 10-K Annual Report - Feb 26th, 2010

688kb

2009

United Parcel Service (UPS) 10-K Annual Report - Feb 27th, 2009

631kb

2008

United Parcel Service (UPS) 10-K Annual Report - Feb 29th, 2008

575kb

2007

United Parcel Service (UPS) 10-K Annual Report - Mar 1st, 2007

597kb

2006

United Parcel Service (UPS) 10-K Annual Report - Mar 14th, 2006

587kb

2005

United Parcel Service (UPS) 10-K Annual Report - Mar 14th, 2005

533kb

2004

United Parcel Service (UPS) 10-K Annual Report - Mar 5th, 2004

535kb

2003

United Parcel Service (UPS) 10-K Annual Report - Mar 6th, 2003

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2002

United Parcel Service (UPS) 10-K Annual Report - Mar 29th, 2002

511kb

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

FOR ANNUAL AND TRANSITION REPORTS

PURSUANT TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Mark One)

x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

or

¡§

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

Commission file number 001-15451

____________________________________

United Parcel Service, Inc.

Delaware

58-2480149

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

55 Glenlake Parkway, N.E. Atlanta, Georgia

30328

(Address of Principal Executive Offices)

(Zip Code)

(404) 828-6000

(Registrant¡¯s telephone number, including area code)

_______________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on Which Registered

Class B common stock, par value $.01 per share

New York Stock Exchange

Floating-Rate Senior Notes due 2020

New York Stock Exchange

1.625% Senior Notes due 2025

New York Stock Exchange

1% Senior Notes due 2028

New York Stock Exchange

0.375% Senior Notes due 2023

New York Stock Exchange

1.500% Senior Notes due 2032

New York Stock Exchange

_________________________________

Securities registered pursuant to Section 12(g) of the Act:

Class A common stock, par value $.01 per share

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

x

No ¡§

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes

¡§

No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that

the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¡§

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such

shorter period that the registrant was required to submit such files). Yes x No ¡§

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant¡¯s knowledge, in definitive proxy or information

statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company or an emerging growth company. See definition of ¡°accelerated filer¡±,

¡°large accelerated filer¡±, ¡°smaller reporting company¡± and "emerging growth company" in Rule 12b-2 of the Exchange Act. Check one:

Large accelerated filer x

Accelerated filer ¡§

Non-accelerated filer ¡§

Smaller reporting company ¡§

Emerging growth company ¡§

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to

Section 13(a) of the Exchange Act. ¡§

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

¡§

No x

The aggregate market value of the class B common stock held by non-affiliates of the registrant was $73,643,493,685 as of June 30, 2018 . The registrant¡¯s class A common stock is not listed on a national securities

exchange or traded in an organized over-the-counter market, but each share of the registrant¡¯s class A common stock is convertible into one share of the registrant¡¯s class B common stock.

As of February 6, 2019, there were 164,239,863 outstanding shares of class A common stock and 695,989,113 outstanding shares of class B common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant¡¯s definitive proxy statement for its annual meeting of shareowners scheduled for

May 9, 2019 are incorporated by reference into Part III of this report.

UNITED PARCEL SERVICE, INC.

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

PART I

Item 1.

Business

1

Overview

1

Strategy

1

Reporting Segments and Products & Services

2

Our People

6

Competition

6

Competitive Strengths

6

Government Regulation

7

Where You Can Find More Information

Item 1A.

Item 1B.

Item 2.

8

10

18

18

Risk Factors

Unresolved Staff Comments

Properties

Operating Facilities

18

Fleet

19

19

Item 3.

Legal Proceedings

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

Shareowner Return Performance Graph

20

Item 6.

Selected Financial Data

21

22

Item 7.

Management¡¯s Discussion and Analysis of Financial Condition and Results of Operations

23

Overview

23

Items Affecting Comparability

24

U.S. Domestic Package Operations

28

International Package Operations

33

Supply Chain & Freight Operations

37

Consolidated Operating Expenses

41

Other Income and (Expense)

45

Income Tax Expense

47

Liquidity and Capital Resources

49

Collective Bargaining Agreements

55

New Accounting Pronouncements

Rate Adjustments

55

Critical Accounting Policies and Estimates

56

55

Item 7A.

Item 8.

Quantitative and Qualitative Disclosures about Market Risk

Financial Statements and Supplementary Data

62

64

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

136

Item 9A.

Item 9B.

Controls and Procedures

Other Information

136

137

Item 10.

Directors, Executive Officers and Corporate Governance

139

Item 11.

Item 12.

Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

140

140

Item 13.

Item 14.

Certain Relationships and Related Transactions, and Director Independence

Principal Accounting Fees and Services

140

140

Item 15.

Exhibits and Financial Statement Schedules

141

Item 16.

Form 10-K Summary

141

PART III

PART IV

PART I

Cautionary Statement About Forward-Looking Statements

This report, our Annual Report to Shareowners and our other filings with the Securities and Exchange Commission (¡°SEC¡±) contain certain ¡°forwardlooking statements¡± within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in the future tense, and all statements

accompanied by terms such as ¡°believe,¡± ¡°project,¡± ¡°expect,¡± ¡°estimate,¡± ¡°assume,¡± ¡°intend,¡± ¡°anticipate,¡± ¡°target,¡± ¡°plan¡± and variations thereof and similar

terms, are intended to be forward-looking statements. Forward-looking statements are made subject to the safe harbor protections of the federal securities

laws pursuant to Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

From time to time, we also include written or oral forward-looking statements in other publicly disclosed materials. Such statements relate to our

intent, belief and current expectations about our strategic direction prospects and future results, and give our current expectations or forecasts of 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 such forward-looking statements because such statements speak only as of

the date when made.

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 are described in Part I, ¡°Item 1A. Risk Factors¡± 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.

Item 1. Business

Overview

United Parcel Service, Inc. (¡°UPS¡±) was founded in 1907 as a private messenger and delivery service in Seattle, Washington. Today, we are the

world¡¯s largest package delivery company, a leader in the U.S. less-than-truckload industry and a premier provider of global supply chain management

solutions. We operate one of the largest airlines in the world, as well as the world¡¯s largest fleet of alternative-powered vehicles. We deliver packages

each business day for 1.5 million shipping customers to 9.1 million receivers ("consignees") in over 220 countries and territories. In 2018, we delivered an

average of 20.7 million pieces per day, or a total of 5.2 billion packages. Total revenue in 2018 was $71.861 billion.

We serve the global market for logistics services, which includes transportation, distribution, contract logistics, ground freight, ocean freight, air

freight, customs brokerage, insurance and financing. We have three reporting segments: U.S. Domestic Package and International Package, which

together we refer to as our global small package operations, and Supply Chain & Freight, all of which are described below.

Strategy

Our market strategy is to provide customers with advanced logistics solutions made possible by a broad portfolio of differentiated services and

capabilities expertly assembled and integrated into our customers¡¯ businesses. This approach, supported by our efficient and globally balanced multimodal

network, enables us to deliver value to our customers and thereby build lasting partnerships with them.

Customers are able to leverage our broad portfolio of logistics capabilities comprised of: our balanced global presence in North America, Europe,

Middle East, Africa, Asia Pacific and Latin America; reliability; and industry-leading technologies and solutions expertise for competitive advantage in

markets where they choose to compete.

We continue to invest in the expansion of the UPS business to serve our existing and prospective customers with a full range of advanced

logistics products, services and capabilities across an ever-increasing geographical and industry footprint. Achieving our objectives has required new

methods and innovative approaches to logistics services, including the acquisition and creation of platform-based businesses, specialized healthcare

services such as Marken¡¯s clinical trial capabilities, a full range of brokerage and transportation insurance services, retail offerings such as UPS My

Choice and more.

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