UPS entered into an agreement in principle with its largest customer to significantly reduce the volume delivered for them by mid-2026. This deliberate shift aims to increase focus on growing higher-yielding volume, with expected reductions in U.S. Domestic Package revenue during 2025.

UPS is beginning a network reconfiguration within the U.S., expected to lead to facility consolidations, workforce reductions, and end-to-end process redesign through 2027. These initiatives are expected to yield approximately $1.0 billion in annualized savings, beginning in 2025.

The acquisition of Estafeta, a leading domestic small package provider in Mexico, is expected to close in the first half of 2025, subject to customary regulatory reviews and approvals. This acquisition is expected to grow the company's international operations.

As part of the 'Fit to Serve' initiative, UPS reduced its workforce by approximately 14,000 positions, primarily within management, during 2024. This initiative aimed to right-size the business and create a more efficient operating model.

The Efficiency Reimagined initiatives are an end-to-end process redesign being undertaken to align organizational processes to the network reconfiguration. These initiatives are expected to yield approximately $1.0 billion in annualized savings, which we expect to begin realizing during 2025.

In September 2024, UPS finalized the previously announced divestiture of its truckload brokerage business ('Coyote'). This divestiture aligns with the company's strategy to focus on core operations.

The agreement in principle with Amazon.com, Inc. will provide for a reduction in their volume by more than 50% by June 2026. The company is making certain business and operational changes intended to match the workforce to activity and eliminate stranded costs.

The company relies on information technology networks and systems and other operational technologies. A significant cybersecurity incident, or increased data protection regulations, could materially adversely affect the company.

The effects of climate change present financial and operational risks to the business, both directly and indirectly. The company has publicly stated its intention to reduce our carbon emissions, including our goal to achieve carbon neutrality in our global operations by 2050 and our other short- and mid-term environmental sustainability goals.

The industry continues to rapidly evolve, including demands for faster deliveries, increased visibility into shipments and development of other services. The company expects to continue to face significant local, regional, national and international competition.

The company's service portfolio allows customers of all sizes to choose their most appropriate option. Increasingly, customers benefit from capabilities and solutions that integrate services beyond package delivery.

The company believes that its integrated global air and ground network is the most extensive in the industry. It provides all types of package services through a single pickup and delivery network that can be configured to meet customers' needs.

The company executed on Network of the Future initiatives, which are intended to enhance the efficiency of the network through automation and operational sort consolidation.

Cost per piece increased 0.6% for the year and non-GAAP adjusted cost per piece increased 0.8%, as expense increases, driven by an increase in compensation and benefits expense, outpaced growth in average daily volume.

Efficiency Reimagined initiatives are an end-to-end process redesign being undertaken to align organizational processes to the network reconfiguration. These initiatives are expected to yield approximately $1.0 billion in annualized savings, which we expect to begin realizing during 2025.

The company is moving from a scanning to a sensing network through its Smart Package Smart Facility RFID initiative, which is helping reduce manual scans and enhance package visibility for customers.

Investments in technology are expected to provide enhanced quality of reporting for both internal and external purposes in part through simplification and standardization of data to better enable migration into cloud-based tools and automation of manual activities.

The company identified certain areas of the business that were reliant on outdated technologies, and determined that continued use of these legacy technologies would likely increase maintenance costs and that investments into new technologies would enhance our ability to leverage our data and allow us to establish a more flexible system architecture.

Capital expenditures were $3.9 billion in 2024 and approximately $1.3 billion was spent related to projects which support our environmental sustainability goals. Total capital expenditures decreased in 2024 compared to 2023.

During 2024, the company returned cash to shareholders in the form of dividends of $6.52 per share, for a total of $5.4 billion, and $500 million of share repurchases. For the year, capital expenditures were $3.9 billion.

The company has $1.7 billion of USD and EUR fixed-rate senior notes that mature in 2025. We intend to repay or refinance these amounts when due.

In 2024, capital expenditures were $3.9 billion and approximately $1.3 billion was spent related to projects which support our environmental sustainability goals.

The company has publicly stated its intention to reduce our carbon emissions, including our goal to achieve carbon neutrality in our global operations by 2050 and our other short- and mid-term environmental sustainability goals.

The board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of human capital matters. Effective oversight is accomplished through a variety of methods and processes including regular updates and discussions around human capital transformation efforts, technology initiatives impacting the workforce, health and safety matters, employee survey results related to culture and other matters, hiring and retention, employee backgrounds, labor relations and contract negotiations, compensation and benefits, succession planning and employee training initiatives.

Within the International package segment, challenging macroeconomic conditions led to a slight volume decline.

The company has been, and may in the future be, adversely impacted by changes in general economic conditions resulting from geopolitical uncertainty and/or conflicts in or arising from the countries and regions where we operate, including the European Union, Ukraine, the Russian Federation, the Middle East and the Trans-Pacific region.

Industry growth, or lack thereof, may further increase competition. As a result, opportunities for growth could be limited or competitors may improve their financial capacity and strengthen their competitive positions.