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)

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]



Three Months Ended June 30:	2022			2021
	Shares	Dollars		Shares	Dollars
Class A Common Stock
Balance at beginning of period	140	$	2	148	$	2

Stock award plans	2	—		2	—

Conversions of class A to class B common stock	(4)	—		(6)	—
Class A shares issued at end of period	138	$	2	144	$	2
Class B Common Stock
Balance at beginning of period	734	$	7	722	$	7
Common stock purchases	(6)	—		—	—
Conversions of class A to class B common stock	4	—		6	—
Class B shares issued at end of period	732	$	7	728	$	7
Additional Paid-In Capital
Balance at beginning of period		$	1,231		$	1,049
Common stock purchases		(983)			—
Stock award plans		212			193
Common stock issuances		113			87


Balance at end of period		$	573		$	1,329
Retained Earnings
Balance at beginning of period		$	17,433		$	10,748
Net income attributable to common shareowners		2,849			2,676
Dividends ($1.52 and $1.02 per share) (1)		(1,327)			(893)
Other		3			—
Balance at end of period		$	18,958		$	12,531
Non-Controlling Minority Interest
Balance at beginning of period		$	18		$	12
Change in non-controlling minority interest		3			5
Balance at end of period		$	21		$	17
(1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $44 and $33 million as of June 30, 2022 and 2021, respectively, that were settled in shares of class A common stock.


Six Months Ended June 30:	2022			2021
	Shares	Dollars		Shares	Dollars
Class A Common Stock:
Balance at beginning of period	138	$	2	147	$	2

Stock award plans	6	—		6	—
Common stock issuances	1	—		1	—
Conversions of class A to class B common stock	(7)	—		(10)	—
Class A shares outstanding at end of period	138	$	2	144	$	2
Class B Common Stock:
Balance at beginning of period	732	$	7	718	$	7
Common stock purchases	(7)	—		—	—
Conversions of class A to class B common stock	7	—		10	—
Class B shares outstanding at end of period	732	$	7	728	$	7
Additional Paid-In Capital:
Balance at beginning of period		$	1,343		$	865
Common stock purchases		(1,243)			—
Stock award plans		177			223
Common stock issuances		296			241
Balance at end of period		$	573		$	1,329
Retained Earnings:
Balance at beginning of period		$	16,179		$	6,896
Net income attributable to controlling interests		5,511			7,468
Dividends ($3.04 and $2.04 per share) (1)		(2,733)			(1,831)
Other		1			(2)
Balance at end of period		$	18,958		$	12,531
Non-Controlling Interests:
Balance at beginning of period		$	16		$	12
Change in non-controlling interest		5			5
Balance at end of period		$	21		$	17
(1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $166 and $113 million as of June 30, 2022 and 2021, respectively, that were settled in shares of class A common stock.

Schedule of Accumulated Other Comprehensive Income (Loss)

The activity in accumulated other comprehensive income for the three and six months ended June 30, 2022 and 2021 was as follows (in millions):



Three Months Ended June 30:	2022		2021
Foreign Currency Translation Gain (Loss), Net of Tax:
Balance at beginning of period	$	(1,202)	$	(1,063)
Translation adjustment (net of tax effect of $7 and $(1))	(245)		48
Balance at end of period	(1,447)		(1,015)
Unrealized Gain (Loss) on Marketable Securities, Net of Tax:
Balance at beginning of period	(7)		2
Current period changes in fair value (net of tax effect of $0 and $0)	(1)		—
Reclassification to earnings (net of tax effect of $0 and $0)	—		(1)
Balance at end of period	(8)		1
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax:
Balance at beginning of period	26		(109)
Current period changes in fair value (net of tax effect of $89 and $(14))	283		(43)
Reclassification to earnings (net of tax effect of $(16) and $(1))	(49)		(3)
Balance at end of period	260		(155)
Unrecognized Pension and Postretirement Benefit Costs, Net of Tax:
Balance at beginning of period	(2,074)		(3,489)
Net actuarial gain (loss) resulting from remeasurements of plan assets and liabilities (net of tax effect of $0 and $495)	—		1,569
Reclassification to earnings (net of tax effect of $6 and $8)	18		25
Balance at end of period	(2,056)		(1,895)
Accumulated other comprehensive income (loss) at end of period	$	(3,251)	$	(3,064)


Six Months Ended June 30:	2022		2021
Foreign currency translation gain (loss), net of tax:
Balance at beginning of period	$	(1,162)	$	(981)
Translation adjustment (net of tax effect of $7 and $29)	(285)		(34)
Balance at end of period	(1,447)		(1,015)
Unrealized gain (loss) on marketable securities, net of tax:
Balance at beginning of period	(1)		6
Current period changes in fair value (net of tax effect of $(2) and $0)	(7)		(1)
Reclassification to earnings (net of tax effect of $0 and $0)	—		(4)
Balance at end of period	(8)		1
Unrealized gain (loss) on cash flow hedges, net of tax:
Balance at beginning of period	(17)		(223)
Current period changes in fair value (net of tax effect of $112 and $25)	355		81
Reclassification to earnings (net of tax effect of $(25) and $(4))	(78)		(13)
Balance at end of period	260		(155)
Unrecognized pension and postretirement benefit costs, net of tax:
Balance at beginning of period	(2,098)		(5,915)
Net actuarial gain (loss) resulting from remeasurements of plan assets and liabilities (net of tax effect of $11 and $2,039)	31		6,470
Reclassification to earnings (net of tax effect of $3 and $(772))	11		(2,450)
Balance at end of period	(2,056)		(1,895)
Accumulated other comprehensive income (loss) at end of period	$	(3,251)	$	(3,064)

Gains (Losses) Reclassified from AOCI

Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and six months ended June 30, 2022 and 2021 is as follows (in millions):



	Amount Reclassified from AOCI				Affected Line Item in the Income Statement
Three Months Ended June 30:	2022		2021
Unrealized Gain (Loss) on Marketable Securities:
Realized gain (loss) on sale of securities	$	—	$	1	Investment income and other
Income tax (expense) benefit	—		—		Income tax expense
Impact on net income	—		1		Net income
Unrealized Gain (Loss) on Cash Flow Hedges:
Interest rate contracts	(2)		(3)		Interest expense
Foreign currency exchange contracts	67		7		Revenue
Income tax (expense) benefit	(16)		(1)		Income tax expense
Impact on net income	49		3		Net income
Unrecognized Pension and Postretirement Benefit Costs:
Prior service costs	(24)		(36)		Investment income and other
Prior service credit for divested business	—		69		Other expenses
Plan amendments for divested business	—		(66)		Other expenses

Income tax (expense) benefit	6		8		Income tax expense
Impact on net income	(18)		(25)		Net income
Total amount reclassified for the period	$	31	$	(21)	Net income


	Amount Reclassified from AOCI				Affected Line Item in the Income Statement
Six Months Ended June 30:	2022		2021




Unrealized gain (loss) on marketable securities:
Realized gain (loss) on sale of securities	$	—	$	4	Investment income and other
Income tax (expense) benefit	—		—		Income tax expense
Impact on net income	—		4		Net income
Unrealized gain (loss) on cash flow hedges:
Interest rate contracts	(5)		(5)		Interest expense
Foreign currency exchange contracts	108		22		Revenue
Income tax (expense) benefit	(25)		(4)		Income tax expense
Impact on net income	78		13		Net income
Unrecognized pension and postretirement benefit costs:
Prior service costs	(47)		(71)		Investment income and other
Prior service credit for divested business	—		69		Other expenses
Plan amendments for divested business	—		(66)		Other expenses
Remeasurement of benefit obligation	—		3,290		Investment income and other
Curtailment of benefit obligation	33		—		Investment income and other
Income tax (expense) benefit	3		(772)		Income tax expense
Impact on net income	(11)		2,450		Net income

Total amount reclassified for the period	$	67	$	2,467	Net income

Activity in Deferred Compensation Program

Activity in the deferred compensation program for the three and six months ended June 30, 2022 and 2021 was as follows (in millions):



	2022			2021
Three Months Ended June 30:	Shares	Dollars		Shares	Dollars
Deferred Compensation Obligations:
Balance at beginning of period		$	12		$	15
Reinvested dividends		1			1
Benefit payments		(1)			—
Balance at end of period		$	12		$	16
Treasury Stock:
Balance at beginning of period	—	$	(12)	—	$	(15)
Reinvested dividends	—	(1)		—	(1)
Benefit payments	—	1		—	—
Balance at end of period	—	$	(12)	—	$	(16)



	2022			2021
Six Months Ended June 30:	Shares	Dollars		Shares	Dollars
Deferred Compensation Obligations:
Balance at beginning of period		$	16		$	20
Reinvested dividends		1			1
Benefit payments		(5)			(5)
Balance at end of period		$	12		$	16
Treasury Stock:
Balance at beginning of period	—	$	(16)	—	$	(20)
Reinvested dividends	—	(1)		—	(1)
Benefit payments	—	5		—	5
Balance at end of period	—	$	(12)	—	$	(16)