UPS 2013 Annual Report Download - page 26

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We have adopted a written Code of Business Conduct that applies to all of our directors, officers and employees,
including our principal executive officer and senior financial officers. It is available in the governance section of the investor
relations website, located at www.investors.ups.com. In the event that we make changes in, or provide waivers from, the
provisions of the Code of Business Conduct that the SEC requires us to disclose, we intend to disclose these events in the
governance section of our investor relations website.
Our Corporate Governance Guidelines and the charters for our Audit Committee, Compensation Committee and
Nominating and Corporate Governance Committee are also available in the governance section of the investor relations
website.
Our sustainability report, which describes our activities that support our commitment to acting responsibly and
contributing to society, is available at www.sustainability.ups.com. We provide the addresses to our Internet sites solely for the
information of investors. We do not intend for any addresses to be active links or to otherwise incorporate the contents of any
website into this report.
Item 1A. Risk Factors
You should carefully consider the following factors, which could materially affect our business, financial condition or
results of operations. You should read these Risk Factors in conjunction with “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in Item 7 and our Consolidated Financial Statements and related notes in
Item 8.
General economic conditions, both in the U.S. and internationally, may adversely affect our results of operations.
We conduct operations in over 220 countries and territories. Our U.S. and international operations are subject to normal
cycles affecting the economy in general, as well as the local economic environments in which we operate. The factors that
create cyclical changes to the economy and to our business are beyond our control, and it may be difficult for us to adjust our
business model to mitigate the impact of these factors. In particular, our business is affected by levels of industrial production,
consumer spending and retail activity, and our business, financial position and results of operations could be materially affected
by adverse developments in these aspects of the economy.
We face significant competition which could adversely affect our business, financial position and results of operations.
We face significant competition on a local, regional, national and international basis. Our competitors include the postal
services of the U.S. and other nations, various motor carriers, express companies, freight forwarders, air couriers and others.
Competition may also come from other sources in the future. Some of our competitors have cost and organizational structures
that differ from ours and may offer services and pricing terms that we may not be willing or able to offer. If we are unable to
timely and appropriately respond to competitive pressures, our business, financial position and results of operations could be
adversely affected.
The transportation industry continues to consolidate and competition remains strong. As a result of consolidation, our
competitors may increase their market share and improve their financial capacity, and may strengthen their competitive
positions. Business combinations could also result in competitors providing a wider variety of services and products at
competitive prices, which could adversely affect our financial performance.
Changes in our relationships with our significant customers, including the loss or reduction in business from one or more
of them, could have an adverse impact on us.
No single customer accounts for 10% or more of our consolidated revenue. We do not believe the loss of any single
customer would materially impair our overall financial condition or results of operations; however, collectively, some of these
large customers might account for a relatively significant portion of the growth in revenue in a particular quarter or year. These
customers can drive the growth in revenue for particular services based on factors such as: new customer product launches; the
seasonality associated with the fourth quarter holiday season; business mergers and acquisitions; and the overall fast growth of
a customer's underlying business. These customers could choose to divert all or a portion of their business with us to one of our
competitors, demand pricing concessions for our services, require us to provide enhanced services that increase our costs, or
develop their own shipping and distribution capabilities. If these factors drove some of our large customers to cancel all or a
portion of their business relationships with us, it could materially impact the growth in our business and the ability to meet our
current and long-term financial forecasts.