UPS 2013 Annual Report Download - page 14

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2
Business Strategy
Customers leverage our broad array of logistics capabilities; global presence in North America, Europe, Asia and Latin
America; reliability; industry-leading technologies; and solutions expertise for competitive advantage in markets where they
choose to compete. We prudently invest to expand our integrated global network and our service portfolio. Technology
investments create user-friendly shipping, e-commerce, logistics management and visibility tools for our customers, while
supporting UPS’s ongoing efforts to increase operational efficiencies.
Our service portfolio and investments are rewarded with among the best returns on invested capital and operating
margins in the industry. We have a long history of sound financial management. Our consolidated balance sheet reflects
financial strength that few companies can match. As of December 31, 2013, we had a balance of cash and marketable securities
of approximately $5.245 billion and shareowners’ equity of $6.488 billion. Our Moody’s and Standard & Poor’s short-term
credit ratings are P-1 and A-1, respectively. Our Moody’s and Standard & Poor’s long-term credit ratings are Aa3 and A+,
respectively. We currently have a negative outlook from Standard & Poor’s and a stable outlook from Moody's. Cash
generation is a significant strength of UPS. This gives us strong capacity to service our obligations and allows for distributions
to shareowners, reinvestment in our businesses and the pursuit of growth opportunities.
We enable and are the beneficiaries of the following trends:
Expansion of Global Trade
Transcontinental and trade across borders is predicted to grow at rates that are in excess of the growth rates of U.S. and
global gross domestic production for the foreseeable future. As a result, U.S. and international economies are becoming more
inter-connected and dependent on foreign trade.
UPS plays an important role in global trade and is well positioned to take advantage of trade growth, wherever it occurs.
Our global presence and productivity enhancing technologies allow customers to expand into new markets. We advocate the
expansion of free trade, including the passage of regional trade pacts and the removal of trade barriers. Free trade is a catalyst
for job creation, economic growth and improved living standards; additionally, it propels our growth.
Emerging Market Growth
Emerging market opportunities continue to expand. Over the next 15 years, these markets are expected to represent
nearly three quarters of global GDP growth, and an increasing proportion of global trade. Emerging markets are
understandably a focus of investment and growth for our current customers; in addition, they will be a source of UPS’s next
generation of customers. To take advantage of these opportunities, UPS will continue to make long-term investments in
markets where our customers choose to grow. Over the past ten years, UPS has established a strong market presence in three
leading emerging markets: China, Poland, and Turkey. Going forward, the Middle East, Latin America, Africa, and Eastern
Europe will become increasingly important for UPS.
Taken together, these two trends (expanding global trade and emerging market growth) underscore why our international
business is a catalyst for UPS’s growth.
Increasing need for segment expertise in the integrated carrier space
We provide repeatable, scalable sector solutions for our customers. We invest in global capabilities and create value
propositions for certain industries where there is a fit between our customers’ needs and our offerings. Segments where we
bring differentiated value propositions include health care, high-tech, automotive & industrial manufacturing, retail,
government, professional and consumer services. By identifying impactful trends, challenges, and opportunities, we are able to
apply deep supply chain and segment-specific experience to benefit our customers. We incorporate our insights into our sales-
and-solution process, and share these insights in company-sponsored forums and publications. By continuing to learn and
share what we know, we not only maintain our competitiveness but also help our customers achieve their business objectives.