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, 2023

Stockholders' Equity Note [Abstract]

The following is a rollforward of our common stock, additional paid-in capital, retained earnings and non-controlling interests accounts for the three and nine months ended September 30, 2023 and 2022 (in millions, except per share amounts):


Three Months Ended September 30:	2023			2022
	Shares	Dollars		Shares	Dollars
Class A Common Stock
Balance at beginning of period	132	$	2	138	$	2
Stock award plans	1	—		(1)	—
Common stock issuances	1	—		1	—
Conversions of class A to class B common stock	(4)	—		(3)	—
Class A shares issued at end of period	130	$	2	135	$	2
Class B Common Stock
Balance at beginning of period	723	$	7	732	$	7
Common stock purchases	(5)	—		(5)	—
Conversions of class A to class B common stock	4	—		3	—
Class B shares issued at end of period	722	$	7	730	$	7
Additional Paid-In Capital
Balance at beginning of period		$	—		$	573
Stock award plans		14			233
Common stock purchases		(123)			(903)
Common stock issuances		115			97
Other (1)		(6)			—
Balance at end of period		$	—		$	—
Retained Earnings
Balance at beginning of period		$	21,584		$	18,958
Net income attributable to common shareowners		1,127			2,584
Dividends ($1.62 and $1.52 per share) (2)		(1,384)			(1,316)
Common stock purchases		(627)			(48)
Other		(1)			(1)
Balance at end of period		$	20,699		$	20,177
Non-Controlling Interest
Balance at beginning of period		$	18		$	21
Change in non-controlling interest		(6)			(1)
Balance at end of period		$	12		$	20
(1) Includes a 1% excise tax applicable to share repurchases. (2) The dividend per share amount is the same for both class A and class B common stock. Dividends included $43 and $41 million as of September 30, 2023 and 2022, respectively, that were settled in shares of class A common stock.


Nine Months Ended September 30:	2023			2022
	Shares	Dollars		Shares	Dollars
Class A Common Stock:
Balance at beginning of period	134	$	2	138	$	2
Stock award plans	4	—		5	—
Common stock issuances	2	—		2	—
Conversions of class A to class B common stock	(10)	—		(10)	—
Class A shares issued at end of period	130	$	2	135	$	2
Class B Common Stock:
Balance at beginning of period	725	$	7	732	$	7
Common stock purchases	(13)	—		(12)	—
Conversions of class A to class B common stock	10	—		10	—
Class B shares issued at end of period	722	$	7	730	$	7
Additional Paid-In Capital:
Balance at beginning of period		$	—		$	1,343
Stock award plans		391			410
Common stock purchases		(750)			(2,146)
Common stock issuances		370			393
Other (1)		(11)			—
Balance at end of period		$	—		$	—
Retained Earnings:
Balance at beginning of period		$	21,326		$	16,179
Net income attributable to controlling interests		5,103			8,095
Dividends ($4.86 and $4.56 per share) (2)		(4,230)			(4,049)
Common stock purchases		(1,500)			(48)
Other		—			—
Balance at end of period		$	20,699		$	20,177
Non-Controlling Interests:
Balance at beginning of period		$	17		$	16
Change in non-controlling interest		(5)			4
Balance at end of period		$	12		$	20
(1) Includes a 1% excise tax applicable to share repurchases. (2) The dividend per share amount is the same for both class A and class B common stock. Dividends include $196 and $207 million as of September 30, 2023 and 2022, 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 (loss) for the three and nine months ended September 30, 2023 and 2022 was as follows (in millions):


Three Months Ended September 30:	2023		2022
Foreign Currency Translation Gain (Loss), Net of Tax:
Balance at beginning of period	$	(1,346)	$	(1,447)
Translation adjustment (net of tax effect of $0 and $4)	(96)		(263)

Balance at end of period	(1,442)		(1,710)
Unrealized Gain (Loss) on Marketable Securities, Net of Tax:
Balance at beginning of period	(20)		(8)
Current period changes in fair value (net of tax effect of $(1) and $(1))	(2)		(4)
Reclassification to earnings (net of tax effect of $0 and $0)	—		1
Balance at end of period	(22)		(11)
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax:
Balance at beginning of period	10		260
Current period changes in fair value (net of tax effect of $44 and $110)	138		350
Reclassification to earnings (net of tax effect of $(8) and $(21))	(27)		(69)
Balance at end of period	121		541
Unrecognized Pension and Postretirement Benefit Costs, Net of Tax:
Balance at beginning of period	(218)		(2,056)

Reclassification to earnings (net of tax effect of $7 and $5)	21		18
Balance at end of period	(197)		(2,038)
Accumulated other comprehensive income (loss) at end of period	$	(1,540)	$	(3,218)


Nine Months Ended September 30:	2023		2022
Foreign currency translation gain (loss), net of tax:
Balance at beginning of period	$	(1,446)	$	(1,162)
Translation adjustment (net of tax effect of $(13) and $11)	1		(548)
Reclassification to earnings (net of tax effect of $0 and $0)	3		—
Balance at end of period	(1,442)		(1,710)
Unrealized gain (loss) on marketable securities, net of tax:
Balance at beginning of period	(11)		(1)
Current period changes in fair value (net of tax effect of $(5) and $(3))	(13)		(11)
Reclassification to earnings (net of tax effect of $1 and $0)	2		1
Balance at end of period	(22)		(11)
Unrealized gain (loss) on cash flow hedges, net of tax:
Balance at beginning of period	167		(17)
Current period changes in fair value (net of tax effect of $22 and $222)	69		705
Reclassification to earnings (net of tax effect of $(36) and $(46))	(115)		(147)
Balance at end of period	121		541
Unrecognized pension and postretirement benefit costs, net of tax:
Balance at beginning of period	(259)		(2,098)
Net actuarial gain (loss) resulting from remeasurements of plan assets and liabilities (net of tax effect of $0 and $11)	—		31
Reclassification to earnings (net of tax effect of $20 and $8)	62		29
Balance at end of period	(197)		(2,038)
Accumulated other comprehensive income (loss) at end of period	$	(1,540)	$	(3,218)

Gains (Losses) Reclassified from AOCI

Detail of the gains (losses) reclassified from accumulated other comprehensive income (loss) to the statements of consolidated income for the three and nine months ended September 30, 2023 and 2022 is as follows (in millions):


	Amount Reclassified from AOCI(1)				Affected Line Item in the Income Statement
Three Months Ended September 30:	2023		2022




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	(6)		(4)		Interest expense
Foreign currency exchange contracts	41		94		Revenue

Income tax (expense) benefit	(8)		(21)		Income tax expense
Impact on net income	27		69		Net income
Unrecognized Pension and Postretirement Benefit Costs:
Prior service costs	(28)		(23)		Investment income and other


Income tax (expense) benefit	7		5		Income tax expense
Impact on net income	(21)		(18)		Net income
Total amount reclassified for the period	$	6	$	50	Net income
(1) Accumulated other comprehensive income (loss)


	Amount Reclassified from AOCI(1)				Affected Line Item in the Income Statement
Nine Months Ended September 30:	2023		2022
Unrealized Gain (Loss) on Foreign Currency Translation:
Realized gain (loss) on business wind-down	$	(3)	$	—	Other expenses
Income tax (expense) benefit	—		—		Income tax expense
Impact on net income	(3)		—		Net income
Unrealized gain (loss) on marketable securities:
Realized gain (loss) on sale of securities	(3)		(1)		Investment income and other
Income tax (expense) benefit	1		—		Income tax expense
Impact on net income	(2)		(1)		Net income
Unrealized gain (loss) on cash flow hedges:
Interest rate contracts	(9)		(9)		Interest expense
Foreign currency exchange contracts	160		202		Revenue

Income tax (expense) benefit	(36)		(46)		Income tax expense
Impact on net income	115		147		Net income
Unrecognized pension and postretirement benefit costs:
Prior service costs	(82)		(70)		Investment income and other

Curtailment of benefit obligation	—		33		Investment income and other
Income tax (expense) benefit	20		8		Income tax expense
Impact on net income	(62)		(29)		Net income
Total amount reclassified for the period	$	48	$	117	Net income
(1) Accumulated other comprehensive income (loss)

Activity in Deferred Compensation Program

Activity in the deferred compensation program for the three and nine months ended September 30, 2023 and 2022 was as follows (in millions):


	2023			2022
Three Months Ended September 30:	Shares	Dollars		Shares	Dollars
Deferred Compensation Obligations:
Balance at beginning of period		$	9		$	12
Reinvested dividends		—			—
Benefit payments		—			—
Balance at end of period		$	9		$	12
Treasury Stock:
Balance at beginning of period	—	$	(9)	—	$	(12)
Reinvested dividends	—	—		—	—
Benefit payments	—	—		—	—
Balance at end of period	—	$	(9)	—	$	(12)


	2023			2022
Nine Months Ended September 30:	Shares	Dollars		Shares	Dollars
Deferred Compensation Obligations:
Balance at beginning of period		$	13		$	16
Reinvested dividends		—			1
Benefit payments		(4)			(5)
Balance at end of period		$	9		$	12
Treasury Stock:
Balance at beginning of period	—	$	(13)	—	$	(16)
Reinvested dividends	—	—		—	(1)
Benefit payments	—	4		—	5
Balance at end of period	—	$	(9)	—	$	(12)