On her Twitter account, Olga Usvyatsky flagged a recent comment letter exchange between UPS & the Staff dealing with the potential impact of Russia’s invasion of Ukraine. The Staff’s comment focused on risk factor disclosure concerning the impact of changes in general economic conditions set forth on page 9 of the company’s Form 10-K. This excerpt from UPS’s response letter includes the Staff’s comment & the company’s response:
1.You refer to the adverse impact on your business due to geopolitical uncertainties and conflicts in the Russian Federation and Ukraine. Please describe the adverse impact of Russia’s invasion of the Ukraine on your business, including the impact on your operations and potential asset impairments.
Response to Comment 1:
The Company does not have any material business, operations or assets in Russia, Belarus or Ukraine, and has not been materially impacted by the actions of the Russian government. The Company’s total revenue from these three countries constitutes less than 1.0% of consolidated revenue.
As has been disclosed by the Company on its corporate website, www.ups.com, as a result of Russia’s invasion of Ukraine, the Company has temporarily suspended all shipping services to, from and within Ukraine, Belarus and Russia, until further notice. In addition, the Company has halted overflights of Russia, with no material impact on the Company’s costs.
If and when the actions of the Russian government are reasonably likely to materially impact the Company or its operations, the Company undertakes to include appropriate disclosures in its public filings.
The Staff had no further comments for UPS, but Olga’s tweet said that it was reasonable to assume other companies will be receiving similar comments. A quick search of the EDGAR database confirms that assumption was correct. A search for filing review correspondence containing the word “Ukraine” from 3/1 to 4/19 found two other issuers that had received publicly available comments relating to the Ukraine crisis. Here are links to response letters addressing Ukraine-related comments issued to ESAB Corp. and Teucrium Commodity Trust.
– John Jenkins