UPS 2011 Annual Report Download - page 113

UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We are cooperating with each of these investigations, and intend to continue to vigorously defend ourselves.
There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result
from these matters including (1) we are vigorously defending each matter and believe that we have a number of
meritorious legal defenses; (2) there are unresolved questions of law that could be of importance to the ultimate
resolutions of these matters, including the calculation of any potential fine; and (3) there is uncertainty about the
time period that is the subject of the investigations. Accordingly, at this time, we are not able to estimate a
possible loss or range of loss that may result from these matters or to determine whether such loss, if any, would
have a material adverse effect on our financial condition, results of operations or liquidity.
In January 2008, a class action complaint was filed in the United States District Court for the Eastern
District of New York alleging price-fixing activities relating to the provision of freight forwarding services. UPS
was not named in this case. In July 2009, the plaintiffs filed a first amended complaint naming numerous global
freight forwarders as defendants. UPS and UPS Supply Chain Solutions are among the 60 defendants named in
the amended complaint. We intend to vigorously defend ourselves in this case. There are multiple factors that
prevent us from being able to estimate the amount of loss, if any, that may result from these matters including:
(1) the magistrate judge recommended that the district court grant our motion to dismiss, with leave to amend,
and the scope of the plaintiffs’ claims is therefore unclear; (2) the scope and size of the proposed class is
ill-defined; (3) there are significant legal questions about the adequacy and standing of the putative class
representatives; and (4) we believe that we have a number of meritorious legal defenses. Accordingly, at this
time, we are not able to estimate a possible loss or range of loss that may result from these matters or to
determine whether such loss, if any, would have a material adverse effect on our financial condition, results of
operations or liquidity.
We are a defendant in various other lawsuits that arose in the normal course of business. We do not believe
that the eventual resolution of these other lawsuits (either individually or in the aggregate), including any
reasonably possible losses in excess of current accruals, will have a material adverse effect on our financial
condition, results of operations or liquidity.
NOTE 10. SHAREOWNERS’ EQUITY
Capital Stock, Additional Paid-In Capital, and Retained Earnings
We maintain two classes of common stock, which are distinguished from each other by their respective
voting rights. Class A shares of UPS are entitled to 10 votes per share, whereas class B shares are entitled to one
vote per share. Class A shares are primarily held by UPS employees and retirees, as well as trusts and
descendants of the Company’s founders, and these shares are fully convertible into class B shares at any time.
Class B shares are publicly traded on the New York Stock Exchange (“NYSE”) under the symbol “UPS.”
Class A and B shares both have a $0.01 par value, and as of December 31, 2011, there were 4.6 billion class A
shares and 5.6 billion class B shares authorized to be issued. Additionally, there are 200 million preferred shares
authorized to be issued, with a par value of $0.01 per share; as of December 31, 2011, no preferred shares had
been issued.
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