United Parcel Service (UPS) Risk Factor Changes

Furthermore, many countries and U.S.

Increased regulation relating to GHG emissions in the U.S.

In addition, in January 2026, the U.S.

International regulations also continue to increase and could materially increase our operating and other costs.

Regulations related to climate change, including reporting obligations, could materially increase our operating costs.

We are subject to complex and stringent aviation, transportation, environmental, security, labor, employment, safety, privacy, disclosure and data protection and other governmental laws, regulations and policies, both…

We regularly assess the carrying values of our assets relative to their estimated fair values.

Our business requires significant capital investments, including in aircraft, vehicles, technology, facilities and sortation and other equipment.

We monitor and manage foreign currency exchange rate and interest rate exposures, and use derivative instruments to mitigate the impact of changes in these rates on our financial condition and results of operations; h…

We conduct business in many countries, with a significant portion of our revenue derived from operations outside the United States.

Fuel and energy costs have a significant impact on our operations.

We have significant international operations and, as a result, we are exposed to changing economic, political and social developments in several countries which are beyond our control.

The increased severity or frequency of certain weather conditions (including as a result of climate change) or other natural or man-made disasters, including storms, floods, fires, wind gusts, earthquakes, rising temp…

Moreover, we may determine that it is in our best interests to prioritize other investments over the achievement of our goals based on economic, regulatory, business strategy or other factors.

Furthermore, methodologies for reporting climate-related information may change and previously reported information may need to be adjusted to reflect new reporting protocols or regulations.

Our ability to meet our goals will depend in part on significant technological advancements, many of which are beyond our control.

The effects of climate change have presented and will continue to present financial and operational risks to our business, both directly and indirectly.

The effects of global climate change could materially adversely affect us.

To date we are unaware of any material data breach or cybersecurity incident, including an information system disruption, although we cannot provide any assurances that a material event or impact will not occur in the…

Accordingly, we may be unable to anticipate these risks or implement adequate measures to recognize, detect or prevent the occurrence of any of the events described above.

IT (ours, as well as those of our franchisees, acquired businesses, and third-party service providers) have been and will continue to be susceptible to damage, disruptions and shutdowns due to programming errors, defe…

We rely on information technology networks and systems and other operational technologies to operate our business, including the internet and internally developed systems and applications, as well as certain technolog…

A significant cybersecurity incident, increased data protection regulations, or other information technology related risks, could materially adversely affect us.

As a result of concerns about global terrorism and physical security, various governments have adopted and may adopt additional heightened security requirements, significantly increasing our operating costs.

Many of our U.S.

Some of our other larger customers can account for a relatively significant portion of our volume and revenues in a particular quarter or year.

Changes in our relationships with any of our significant customers, including as a result of our strategy to reduce volume from our largest customer or the loss or reduction in business from one or more other customer…

Our industry continues to rapidly evolve.

Changes or continued uncertainty in general economic conditions, in the U.S.

Our business, financial condition and results of operations are and will remain subject to numerous risks and uncertainties.

that we may not be willing or able to pass such costs along to our customers.

We have significant international operations and, as a result, we are exposed to changing economic, political and social developments in a number of countries, all of which are beyond our control.

In addition, we continue to strive to lower our cost to serve, including labor costs, through various strategic initiatives.

with us to one of our competitors, demand pricing concessions, request enhanced services that increase our costs, or develop their own logistics capabilities.

For the year ended December 31, 2024, one customer, Amazon.com, Inc.

$182 million in asset impairment charges during the fourth quarter of 2025.

currency exchange rates and interest rates cannot always be predicted or effectively hedged, and may have a material adverse effect on us.

damaged, employees may be injured, or our costs to operate our business may increase, any of which could have a material adverse effect on us.

identify, mitigate and/or eliminate future breaches or cybersecurity incidents may require significant additional effort and expense and may not be successful.

In addition, we are increasing our utilization of artificial intelligence ("AI") to optimize our operations, improve the customer experience and support decision-making.

physical receipt of packages, move and track packages through our operations, efficiently plan deliveries, execute billing processes, provide information to package recipients, manage employee data and track and repor…

In addition, our Network Reconfiguration and Efficiency Reimagined initiatives have led to, and are expected to continue to lead to, consolidations of our facilities and workforce, as well as an end-to-end process red…

additional information on the operational and financial impacts arising from this strategy, see "Management’s Discussion and Analysis of Financial Condition and Results of Operations".

Our strategy includes planned volume declines from our largest customer, Amazon.com, Inc.