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, 2015

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, 2015 and 2014 (in millions, except per share amounts):



	2015					2014
	Shares		Dollars			Shares		Dollars
Class A Common Stock
Balance at beginning of period	201		$	2		212		$	2
Common stock purchases	(3	)	—			(4	)	—
Stock award plans	4		—			4		—
Common stock issuances	2		—			2		—
Conversions of class A to class B common stock	(8	)	—			(11	)	—
Class A shares issued at end of period	196		$	2		203		$	2
Class B Common Stock
Balance at beginning of period	705		$	7		712		$	7
Common stock purchases	(17	)	—			(17	)	—
Conversions of class A to class B common stock	8		—			11		—
Class B shares issued at end of period	696		$	7		706		$	7
Additional Paid-In Capital
Balance at beginning of period			$	—				$	—
Stock award plans			391					359
Common stock purchases			(567		)			(630		)
Common stock issuances			245					218
Option premiums received (paid)			(69		)			53
Balance at end of period			$	—				$	—
Retained Earnings
Balance at beginning of period			$	5,726				$	6,925
Net income attributable to common shareowners			3,513					2,579
Dividends ($2.19 and $2.01 per share)			(2,000		)			(1,863		)
Common stock purchases			(1,468		)			(1,412		)
Balance at end of period			$	5,771				$	6,229

Schedule of Accumulated Other Comprehensive Income (Loss)

The activity in AOCI for the nine months ended September 30, 2015 and 2014 is as follows (in millions):



	2015			2014
Foreign currency translation gain (loss):
Balance at beginning of period	$	(457	)	$	(126	)
Translation adjustment (net of tax effect of $0 and $11)	(344		)	(248		)
Balance at end of period	(801		)	(374		)
Unrealized gain (loss) on marketable securities, net of tax:
Balance at beginning of period	—			(1		)
Current period changes in fair value (net of tax effect of $1 and $1)	1			1
Reclassification to earnings (no tax impact in either period)	—			—
Balance at end of period	1			—
Unrealized gain (loss) on cash flow hedges, net of tax:
Balance at beginning of period	61			(219		)
Current period changes in fair value (net of tax effect of $71 and $77)	119			129
Reclassification to earnings (net of tax effect of $(67) and $24)	(113		)	40
Balance at end of period	67			(50		)
Unrecognized pension and postretirement benefit costs, net of tax:
Balance at beginning of period	(3,198		)	(114		)
Reclassification to earnings (net of tax effect of $51 and $447)	80			742
Remeasurement of plan assets and liabilities (net of tax effect of $0 and $(488))	—			(815		)
Balance at end of period	(3,118		)	(187		)
Accumulated other comprehensive income (loss) at end of period	$	(3,851	)	$	(611	)

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




Nine Months Ended September 30:
	Amount Reclassified from AOCI						Affected Line Item in the Income Statement
	2015			2014			Affected Line Item in the Income Statement
Unrealized gain (loss) on marketable securities:
Realized gain (loss) on sale of securities	$	—		$	—		Investment income
Income tax (expense) benefit	—			—			Income tax expense
Impact on net income	—			—			Net income
Unrealized gain (loss) on cash flow hedges:
Interest rate contracts	(18		)	(17		)	Interest expense
Foreign exchange contracts	(25		)	(15		)	Interest expense
Foreign exchange contracts	223			(32		)	Revenue
Income tax (expense) benefit	(67		)	24			Income tax expense
Impact on net income	113			(40		)	Net income
Unrecognized pension and postretirement benefit costs:
Prior service costs	(131		)	(123		)	Compensation and benefits
Settlement and curtailment loss	—			(320		)	Compensation and benefits
Remeasurement of benefit obligation	—			(746		)	Compensation and benefits
Income tax (expense) benefit	51			447			Income tax expense
Impact on net income	(80		)	(742		)	Net income

Total amount reclassified for the period	$	33		$	(782	)	Net income

Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and nine months ended September 30, 2015 and 2014 is as follows (in millions):



Three Months Ended September 30:
	Amount Reclassified from AOCI						Affected Line Item in the Income Statement
	2015			2014			Affected Line Item in the Income Statement
Unrealized gain (loss) on marketable securities:
Realized gain (loss) on sale of securities	$	—		$	—		Investment income
Income tax (expense) benefit	—			—			Income tax expense
Impact on net income	—			—			Net income
Unrealized gain (loss) on cash flow hedges:
Interest rate contracts	(6		)	(6		)	Interest expense
Foreign exchange contracts	—			(43		)	Interest expense
Foreign exchange contracts	67			(11		)	Revenue
Income tax (expense) benefit	(22		)	23			Income tax expense
Impact on net income	39			(37		)	Net income
Unrecognized pension and postretirement benefit costs:
Prior service costs	(44		)	(44		)	Compensation and benefits
Settlement and curtailment loss	—			—			Compensation and benefits
Remeasurement of benefit obligation	—			—			Compensation and benefits
Income tax (expense) benefit	16			17			Income tax expense
Impact on net income	(28		)	(27		)	Net income

Total amount reclassified for the period	$	11		$	(64	)	Net income

Schedule of Deferred Compensation and Treasury Stock Activity

Activity in the deferred compensation program for the nine months ended September 30, 2015 and 2014 is as follows (in millions):



	2015					2014
	Shares		Dollars			Shares		Dollars
Deferred Compensation Obligations:
Balance at beginning of period			$	59				$	69
Reinvested dividends			3					2
Benefit payments			(11		)			(12		)
Balance at end of period			$	51				$	59
Treasury Stock:
Balance at beginning of period	(1	)	$	(59	)	(1	)	$	(69	)
Reinvested dividends	—		(3		)	—		(2		)
Benefit payments	—		11			—		12
Balance at end of period	(1	)	$	(51	)	(1	)	$	(59	)

for the nine months ended September 30, 2015 and 2014, respectively, mainly due to noncontrolling interests associated with acquisitions during the period.