XML 39 R18.htm IDEA: XBRL DOCUMENT
v3.20.4

SHAREOWNERS' EQUITY | 12 Months Ended
--- | ---
Dec. 31, 2020
Stockholders' Equity Note [Abstract] |
SHAREOWNERS' EQUITY | SHAREOWNERS' EQUITY Capital Stock, Additional Paid-In Capital, Retained Earnings and Non-Controlling Minority Interests We maintain two classes of common stock, which are distinguished from each other by their respective voting rights. Class A shares of UPS are entitled to 10 votes per share, whereas class B shares are entitled to one vote per share. Class A shares are primarily held by UPS employees and retirees, as well as trusts and descendants of the Company's founders, and these shares are fully convertible into class B shares at any time. Class B shares are publicly traded on the New York Stock Exchange ("NYSE") under the symbol “UPS”. Class A and B shares both have a $0.01 par value, and as of December 31, 2020, there were 4.6 billion class A shares and 5.6 billion class B shares authorized to be issued. Additionally, there are 200 million preferred shares authorized to be issued, with a par value of $0.01 per share. As of December 31, 2020, no preferred shares had been issued. The following is a rollforward of our common stock, additional paid-in capital, retained earnings and non-controlling minority interests accounts for the years ended December 31, 2020, 2019 and 2018 (in millions, except per share amounts):
| 2020 |  | 2019 |  | 2018
| Shares |  | Dollars |  | Shares |  | Dollars |  | Shares |  | Dollars
Class A Common Stock: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | 156 |  |  | $ | 2 |  |  | 163 |  |  | $ | 2 |  |  | 173 |  |  | $ | 2 |
Common stock purchases | — |  |  | — |  |  | (3) |  |  | — |  |  | (3) |  |  | — |
Stock award plans | 6 |  |  | — |  |  | 5 |  |  | — |  |  | 3 |  |  | — |
Common stock issuances | 4 |  |  | — |  |  | 3 |  |  | — |  |  | 4 |  |  | — |
Conversions of class A to class B common stock | (19) |  |  | — |  |  | (12) |  |  | — |  |  | (14) |  |  | — |
Class A shares issued at end of year | 147 |  |  | $ | 2 |  |  | 156 |  |  | $ | 2 |  |  | 163 |  |  | $ | 2 |
Class B Common Stock: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | 701 |  |  | $ | 7 |  |  | 696 |  |  | $ | 7 |  |  | 687 |  |  | $ | 7 |
Common stock purchases | (2) |  |  | — |  |  | (7) |  |  | — |  |  | (5) |  |  | — |
Conversions of class A to class B common stock | 19 |  |  | — |  |  | 12 |  |  | — |  |  | 14 |  |  | — |
Class B shares issued at end of year | 718 |  |  | $ | 7 |  |  | 701 |  |  | $ | 7 |  |  | 696 |  |  | $ | 7 |
Additional Paid-In Capital: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year |  |  | $ | 150 |  |  |  |  | $ | — |  |  |  |  | $ | — |
Stock award plans |  |  | 498 |  |  |  |  | 778 |  |  |  |  | 419 |
Common stock purchases |  |  | (217) |  |  |  |  | (1,005) |  |  |  |  | (859) |
Common stock issuances |  |  | 434 |  |  |  |  | 356 |  |  |  |  | 406 |
Option premiums received (paid) |  |  | — |  |  |  |  | 21 |  |  |  |  | 34 |
Balance at end of year |  |  | $ | 865 |  |  |  |  | $ | 150 |  |  |  |  | $ | — |
Retained Earnings: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year |  |  | $ | 9,105 |  |  |  |  | $ | 8,006 |  |  |  |  | $ | 5,852 |
Net income attributable to controlling interests |  |  | 1,343 |  |  |  |  | 4,440 |  |  |  |  | 4,791 |
Dividends ($4.04, $3.84, and $3.64 per share) (1) |  |  | (3,552) |  |  |  |  | (3,341) |  |  |  |  | (3,189) |
Common stock purchases |  |  | — |  |  |  |  | — |  |  |  |  | (141) |
Reclassification from AOCI pursuant to the early adoption of ASU 2018-02 |  |  | — |  |  |  |  | — |  |  |  |  | 735 |
Other |  |  | — |  |  |  |  | — |  |  |  |  | (42) |
Balance at end of year |  |  | $ | 6,896 |  |  |  |  | $ | 9,105 |  |  |  |  | $ | 8,006 |
Non-Controlling Interests: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year |  |  | $ | 16 |  |  |  |  | $ | 16 |  |  |  |  | $ | 30 |
Change in non-controlling interests |  |  | (4) |  |  |  |  | — |  |  |  |  | (14) |
Balance at end of year |  |  | $ | 12 |  |  |  |  | $ | 16 |  |  |  |  | $ | 16 |
(1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $178, $147 and $178 million for 2020, 2019 and 2018, respectively, that were settled in shares of class A common stock. In May 2016, the Board of Directors approved a share repurchase authorization of $8.0 billion for shares of class A and class B common stock, which has no expiration date. As of December 31, 2020, we had $2.1 billion of this share repurchase authorization available. Share repurchases may be in the form of accelerated share repurchase programs, open market purchases or other methods we deem appropriate. The timing of share repurchases will depend upon market conditions. Unless terminated earlier by the Board, the program will expire when we have purchased all shares authorized for repurchase under the program. On April 28, 2020, we announced our intention to suspend stock repurchases. For the years ended December 31, 2020, 2019 and 2018, we repurchased a total of 2.1, 9.1 and 8.9 million shares of class A and class B common stock for $217 million, $1.0 and $1.0 billion, respectively ($224 million, $1.0 and $1.0 billion in repurchases for 2020, 2019 and 2018, respectively, are reported on the statements of consolidated cash flows due to the timing of settlements). In order to lower the average cost of acquiring shares in our ongoing share repurchase program, we periodically enter into structured repurchase agreements involving the use of capped call options for the purchase of UPS class B shares. We pay a fixed sum of cash upon execution of each agreement in exchange for the right to receive either a predetermined amount of cash or stock. Upon expiration of each agreement, if the closing market price of our common stock is above the predetermined price, we will have our initial investment returned with a premium in either cash or shares (at our election). If the closing market price of our common stock is at or below the pre-determined price, we will receive the number of shares specified in the agreement. We received net premiums of $21 and $34 million during the years ended December 31, 2019 and 2018, respectively, related to entering into and settling capped call options for the purchase of class B shares. As of December 31, 2020, we had no capped call options outstanding, nor did we enter into any of these structured repurchase agreements during the year. Movements in additional paid-in capital in respect of stock award plans comprise accruals for unvested awards, offset by adjustments for awards that vest during the period. The movement year over year was driven by changes in the vesting schedule for certain of our awards. Accumulated Other Comprehensive Income (Loss) We recognize activity in AOCI for foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale securities, unrealized gains and losses from derivatives that qualify as hedges of cash flows and unrecognized pension and postretirement benefit costs. The activity in AOCI for the years ended December 31, 2020, 2019 and 2018 was as follows (in millions):
| 2020 |  | 2019 |  | 2018
Foreign Currency Translation Gain (Loss), Net of Tax: |  |  |  |  |
Balance at beginning of year | $ | (1,078) |  |  | $ | (1,126) |  |  | $ | (930) |
Translation adjustment (net of tax effect of $(36), $10 and $37) | 97 |  |  | 48 |  |  | (149) |
Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 | — |  |  | — |  |  | (47) |
Balance at end of year | $ | (981) |  |  | $ | (1,078) |  |  | $ | (1,126) |
Unrealized Gain (Loss) on Marketable Securities, Net of Tax: |  |  |  |  |
Balance at beginning of year | $ | 4 |  |  | $ | (2) |  |  | $ | (2) |
Current period changes in fair value (net of tax effect of $1, $4 and $(1)) | 6 |  |  | 11 |  |  | (3) |
Reclassification to earnings (net of tax effect of $(1), $(1) and $1) | (4) |  |  | (5) |  |  | 3 |
Balance at end of year | $ | 6 |  |  | $ | 4 |  |  | $ | (2) |
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax: |  |  |  |  |
Balance at beginning of year | $ | 112 |  |  | $ | 40 |  |  | $ | (366) |
Current period changes in fair value (net of tax effect of $(61), $61 and $135) | (192) |  |  | 195 |  |  | 429 |
Reclassification to earnings (net of tax effect of $(45), $(39) and $18) | (143) |  |  | (123) |  |  | 56 |
Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 | — |  |  | — |  |  | (79) |
Balance at end of year | $ | (223) |  |  | $ | 112 |  |  | $ | 40 |
Unrecognized Pension and Postretirement Benefit Costs, Net of Tax: |  |  |  |  |
Balance at beginning of year | $ | (5,035) |  |  | $ | (3,906) |  |  | $ | (3,569) |
Net actuarial gain (loss) and prior service cost resulting from remeasurements of plan assets and liabilities (net of tax effect of $(1,885), $(979)and $(355)) | (5,984) |  |  | (3,117) |  |  | (1,117) |
Reclassification to earnings (net of tax effect of $1,607, $626 and $439) | 5,104 |  |  | 1,988 |  |  | 1,389 |
Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 | — |  |  | — |  |  | (609) |
Balance at end of year | $ | (5,915) |  |  | $ | (5,035) |  |  | $ | (3,906) |
Accumulated other comprehensive income (loss) at end of year | $ | (7,113) |  |  | $ | (5,997) |  |  | $ | (4,994) |
Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the years ended December 31, 2020, 2019 and 2018 was as follows (in millions):
| Amount Reclassified from AOCI |  | Affected Line Item in the Income Statement
| 2020 |  | 2019 |  | 2018 |
Unrealized Gain (Loss) on Marketable Securities: |  |  |  |  |  |
Realized gain (loss) on sale of securities | $ | 5 |  |  | $ | 6 |  |  | $ | (4) |  |  | Investment income (expense) and other
Income tax (expense) benefit | (1) |  |  | (1) |  |  | 1 |  |  | Income tax expense
Impact on net income | 4 |  |  | 5 |  |  | (3) |  |  | Net income
Unrealized Gain (Loss) on Cash Flow Hedges: |  |  |  |  |  |  |
Interest rate contracts | (8) |  |  | (15) |  |  | (24) |  |  | Interest expense
Foreign currency exchange contracts | 196 |  |  | 177 |  |  | (50) |  |  | Revenue
Income tax (expense) benefit | (45) |  |  | (39) |  |  | 18 |  |  | Income tax expense
Impact on net income | 143 |  |  | 123 |  |  | (56) |  |  | Net income
Unrecognized Pension and Postretirement Benefit Costs: |  |  |  |  |  |
Prior service costs | (227) |  |  | (227) |  |  | (201) |  |  | Investment income (expense) and other
Remeasurement of benefit obligation | (6,484) |  |  | (2,387) |  |  | (1,627) |  |  | Investment income (expense) and other
Income tax (expense) benefit | 1,607 |  |  | 626 |  |  | 439 |  |  | Income tax expense
Impact on net income | (5,104) |  |  | (1,988) |  |  | (1,389) |  |  | Net income
Total amount reclassified for the year | $ | (4,957) |  |  | $ | (1,860) |  |  | $ | (1,448) |  |  | Net income
Deferred Compensation Obligations and Treasury Stock We maintain a deferred compensation plan whereby certain employees were previously able to elect to defer the gains on stock option exercises by deferring the shares received upon exercise into a rabbi trust. The shares held in this trust are classified as treasury stock, and the liability to participating employees is classified as “Deferred compensation obligations” in the shareowners’ equity section of the consolidated balance sheets. The number of shares needed to settle the liability for deferred compensation obligations is included in the denominator in both the basic and diluted earnings per share calculations. Employees are generally no longer able to defer the gains from stock options exercised subsequent to December 31, 2004. Activity in the deferred compensation program for the years ended December 31, 2020, 2019 and 2018 is as follows (in millions):
| 2020 |  | 2019 |  | 2018
| Shares |  | Dollars |  | Shares |  | Dollars |  | Shares |  | Dollars
Deferred Compensation Obligations: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year |  |  | $ | 26 |  |  |  |  | $ | 32 |  |  |  |  | $ | 37 |
Reinvested dividends |  |  | 1 |  |  |  |  | 2 |  |  |  |  | 2 |
Benefit payments |  |  | (7) |  |  |  |  | (8) |  |  |  |  | (7) |
Balance at end of year |  |  | $ | 20 |  |  |  |  | $ | 26 |  |  |  |  | $ | 32 |
Treasury Stock: |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | — |  |  | $ | (26) |  |  | (1) |  |  | $ | (32) |  |  | (1) |  |  | $ | (37) |
Reinvested dividends | — |  |  | (1) |  |  | — |  |  | (2) |  |  | — |  |  | (2) |
Benefit payments | — |  |  | 7 |  |  | 1 |  |  | 8 |  |  | — |  |  | 7 |
Balance at end of year | — |  |  | $ | (20) |  |  | — |  |  | $ | (26) |  |  | (1) |  |  | $ | (32) |

X
- References No definition available. + Details
Name: | us-gaap_StockholdersEquityNoteAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
Name: | us-gaap_StockholdersEquityNoteDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration