United Parcel Service, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

SHAREOWNERS' EQUITY (Tables)

SHAREOWNERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2017

Stockholders' Equity Note [Abstract]

The following is a rollforward of our common stock, additional paid-in capital and retained earnings accounts for the nine months ended September 30, 2017 and 2016 (in millions, except per share amounts):



	2017					2016
	Shares		Dollars			Shares		Dollars
Class A Common Stock
Balance at beginning of period	180		$	2		194		$	2
Common stock purchases	(3	)	—			(4	)	—
Stock award plans	4		—			5		—
Common stock issuances	2		—			2		—
Conversions of class A to class B common stock	(7	)	—			(12	)	—
Class A shares issued at end of period	176		$	2		185		$	2
Class B Common Stock
Balance at beginning of period	689		$	7		693		$	7
Common stock purchases	(9	)	—			(16	)	—
Conversions of class A to class B common stock	7		—			12		—
Class B shares issued at end of period	687		$	7		689		$	7
Additional Paid-In Capital
Balance at beginning of period			$	—				$	—
Stock award plans			283					423
Common stock purchases			(604		)			(811		)
Common stock issuances			268					233
Option premiums received (paid)			53					155
Balance at end of period			$	—				$	—
Retained Earnings
Balance at beginning of period			$	4,879				$	6,001
Net income attributable to common shareowners			3,806					3,670
Dividends ($2.49 and $2.34 per share)			(2,213		)			(2,093		)
Common stock purchases			(748		)			(1,193		)
Balance at end of period			$	5,724				$	6,385

Schedule of Accumulated Other Comprehensive Income (Loss)

The activity in AOCI for the nine months ended September 30, 2017 and 2016 is as follows (in millions):



	2017			2016
Foreign currency translation gain (loss):
Balance at beginning of period	$	(1,016	)	$	(897	)
Translation adjustment (net of tax effect of $(146) and $24)	86			(12		)
Balance at end of period	(930		)	(909		)
Unrealized gain (loss) on marketable securities, net of tax:
Balance at beginning of period	(1		)	(1		)
Current period changes in fair value (net of tax effect of $1 and $3)	2			4
Reclassification to earnings (no tax impact in either period)	(1		)	—
Balance at end of period	—			3
Unrealized gain (loss) on cash flow hedges, net of tax:
Balance at beginning of period	(45		)	67
Current period changes in fair value (net of tax effect of $(162) and $(15))	(269		)	(24		)
Reclassification to earnings (net of tax effect of $(6) and $(96))	(9		)	(159		)
Balance at end of period	(323		)	(116		)
Unrecognized pension and postretirement benefit costs, net of tax:
Balance at beginning of period	(3,421		)	(2,709		)
Remeasurement of plan assets and liabilities (net of tax effect of $214 and $0) ⁽¹⁾	356			—
Reclassification to earnings (net of tax effect of $56 and $48)	94			80
Balance at end of period	(2,971		)	(2,629		)
Accumulated other comprehensive income (loss) at end of period	$	(4,224	)	$	(3,651	)

⁽¹⁾See note 6 for further information about plan curtailments resulting in remeasurement of plan assets and liabilities.

Schedule of Reclassifications from Accumulated Other Comprehensive Income (Loss) to Earnings

Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and nine months ended September 30, 2017 and 2016 is as follows (in millions):



Three Months Ended September 30:
	Amount Reclassified from AOCI						Affected Line Item in the Income Statement
	2017			2016			Affected Line Item in the Income Statement
Unrealized gain (loss) on marketable securities:
Realized gain on sale of securities	$	1		$	—		Investment income
Income tax expense	—			—			Income tax expense
Impact on net income	1			—			Net income
Unrealized gain (loss) on cash flow hedges:
Interest rate contracts	(6		)	(7		)	Interest expense
Foreign exchange contracts	3			83			Revenue
Income tax (expense) benefit	1			(29		)	Income tax expense
Impact on net income	(2		)	47			Net income
Unrecognized pension and postretirement benefit costs:
Prior service costs	(50		)	(42		)	Compensation and benefits
Income tax benefit	19			15			Income tax expense
Impact on net income	(31		)	(27		)	Net income

Total amount reclassified for the period	$	(32	)	$	20		Net income



Nine Months Ended September 30:
	Amount Reclassified from AOCI						Affected Line Item in the Income Statement
	2017			2016			Affected Line Item in the Income Statement
Unrealized gain (loss) on marketable securities:
Realized gain on sale of securities	$	1		$	—		Investment income
Income tax expense	—			—			Income tax expense
Impact on net income	1			—			Net income
Unrealized gain (loss) on cash flow hedges:
Interest rate contracts	(20		)	(19		)	Interest expense
Foreign exchange contracts	35			274			Revenue
Income tax expense	(6		)	(96		)	Income tax expense
Impact on net income	9			159			Net income
Unrecognized pension and postretirement benefit costs:
Prior service costs	(150		)	(128		)	Compensation and benefits
Income tax benefit	56			48			Income tax expense
Impact on net income	(94		)	(80		)	Net income

Total amount reclassified for the period	$	(84	)	$	79		Net income

Schedule of Deferred Compensation and Treasury Stock Activity

Activity in the deferred compensation program for the nine months ended September 30, 2017 and 2016 is as follows (in millions):



	2017					2016
	Shares		Dollars			Shares		Dollars
Deferred Compensation Obligations:
Balance at beginning of period			$	45				$	51
Reinvested dividends			2					2
Benefit payments			(10		)			(9		)
Balance at end of period			$	37				$	44
Treasury Stock:
Balance at beginning of period	(1	)	$	(45	)	(1	)	$	(51	)
Reinvested dividends	—		(2		)	—		(2		)
Benefit payments	—		10			—		9
Balance at end of period	(1	)	$	(37	)	(1	)	$	(44	)