XML 31 R19.htm IDEA: XBRL DOCUMENT
v3.21.2

SHAREOWNERS' EQUITY | 9 Months Ended
--- | ---
Sep. 30, 2021
Stockholders' Equity Note [Abstract] |
SHAREOWNERS' EQUITY | SHAREOWNERS' EQUITY Capital Stock, Additional Paid-In Capital, Retained Earnings and Non-Controlling Minority Interests We are authorized to issue two classes of common stock, which are distinguished from each other primarily 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 NYSE under the symbol “UPS”. Class A and B shares both have a $0.01 par value, and as of September 30, 2021, 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 September 30, 2021, 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 three and nine months ended September 30, 2021 and 2020 (in millions, except per share amounts):
Three Months Ended September 30: | 2021 |  | 2020
| Shares |  | Dollars |  | Shares |  | Dollars
Class A Common Stock |  |  |  |  |  |  |
Balance at beginning of period | 144 |  |  | $ | 2 |  |  | 157 |  |  | $ | 2 |
Stock award plans | (1) |  |  | — |  |  | — |  |  | — |
Common stock issuances | 1 |  |  | — |  |  | 1 |  |  | — |
Conversions of class A to class B common stock | (3) |  |  | — |  |  | (8) |  |  | — |
Class A shares issued at end of period | 141 |  |  | $ | 2 |  |  | 150 |  |  | $ | 2 |
Class B Common Stock |  |  |  |  |  |  |
Balance at beginning of period | 728 |  |  | $ | 7 |  |  | 706 |  |  | $ | 7 |
Common stock purchases | (3) |  |  | — |  |  | — |  |  | — |
Conversions of class A to class B common stock | 3 |  |  | — |  |  | 8 |  |  | — |
Class B shares issued at end of period | 728 |  |  | $ | 7 |  |  | 714 |  |  | $ | 7 |
Additional Paid-In Capital |  |  |  |  |  |  |
Balance at beginning of period |  |  | $ | 1,329 |  |  |  |  | $ | 255 |
Common stock purchases |  |  | (500) |  |  |  |  | — |
Stock award plans |  |  | 176 |  |  |  |  | 145 |
Common stock issuances |  |  | 83 |  |  |  |  | 90 |
Balance at end of period |  |  | $ | 1,088 |  |  |  |  | $ | 490 |
Retained Earnings |  |  |  |  |  |  |
Balance at beginning of period |  |  | $ | 12,531 |  |  |  |  | $ | 10,032 |
Net income attributable to common shareowners |  |  | 2,329 |  |  |  |  | 1,957 |
Dividends ($1.02 and $1.01 per share) (1) |  |  | (887) |  |  |  |  | (873) |
Other |  |  | — |  |  |  |  | (1) |
Balance at end of period |  |  | $ | 13,973 |  |  |  |  | $ | 11,115 |
Non-Controlling Minority Interest |  |  |  |  |  |  |
Balance at beginning of period |  |  | $ | 17 |  |  |  |  | $ | 13 |
Change in non-controlling minority interest |  |  | (1) |  |  |  |  | 1 |
Balance at end of period |  |  | $ | 16 |  |  |  |  | $ | 14 |
(1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $27 and $28 million as of September 30, 2021 and 2020, respectively, that were settled in shares of class A common stock.
Nine Months Ended September 30: | 2021 |  | 2020
| Shares |  | Dollars |  | Shares |  | Dollars
Class A Common Stock |  |  |  |  |  |  |
Balance at beginning of period | 147 |  |  | $ | 2 |  |  | 156 |  |  | $ | 2 |
Stock award plans | 5 |  |  | — |  |  | 6 |  |  | — |
Common stock issuances | 2 |  |  | — |  |  | 3 |  |  | — |
Conversions of class A to class B common stock | (13) |  |  | — |  |  | (15) |  |  | — |
Class A shares issued at end of period | 141 |  |  | $ | 2 |  |  | 150 |  |  | $ | 2 |
Class B Common Stock |  |  |  |  |  |  |
Balance at beginning of period | 718 |  |  | $ | 7 |  |  | 701 |  |  | $ | 7 |
Common stock purchases | (3) |  |  | — |  |  | (2) |  |  | — |
Conversions of class A to class B common stock | 13 |  |  | — |  |  | 15 |  |  | — |
Class B shares issued at end of period | 728 |  |  | $ | 7 |  |  | 714 |  |  | $ | 7 |
Additional Paid-In Capital |  |  |  |  |  |  |
Balance at beginning of period |  |  | $ | 865 |  |  |  |  | $ | 150 |
Common stock purchases |  |  | (500) |  |  |  |  | (217) |
Stock award plans |  |  | 399 |  |  |  |  | 215 |
Common stock issuances |  |  | 324 |  |  |  |  | 342 |
Balance at end of period |  |  | $ | 1,088 |  |  |  |  | $ | 490 |
Retained Earnings |  |  |  |  |  |  |
Balance at beginning of period |  |  | $ | 6,896 |  |  |  |  | $ | 9,105 |
Net income attributable to controlling interests |  |  | 9,797 |  |  |  |  | 4,690 |
Dividends ($3.06 and $3.03 per share) (1) |  |  | (2,718) |  |  |  |  | (2,679) |
Other |  |  | (2) |  |  |  |  | (1) |
Balance at end of period |  |  | $ | 13,973 |  |  |  |  | $ | 11,115 |
Non-Controlling Interests |  |  |  |  |  |  |
Balance at beginning of period |  |  | $ | 12 |  |  |  |  | $ | 16 |
Change in non-controlling minority interest |  |  | 4 |  |  |  |  | (2) |
Balance at end of period |  |  | $ | 16 |  |  |  |  | $ | 14 |
(1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $140 and $151 million as of September 30, 2021 and 2020 respectively, that were settled in shares of class A common stock.
In May 2016, the Board of Directors approved a share repurchase authorization for $8.0 billion of class A and class B common stock. We did not repurchase any shares under this program during the three months ended September 30, 2020. We repurchased 2.1 million shares of class A and class B common stock for $217 million during the nine months ended September 30, 2020 ($224 million in repurchases are reported on the statements of consolidated cash flows due to the timing of settlements). We did not repurchase any shares under this program during the three and nine months ended September 30, 2021. In August 2021, the Board of Directors terminated this authorization and approved a new share repurchase authorization for $5.0 billion. We repurchased 2.6 million shares of class B common stock for $500 million under an accelerated stock repurchase transaction during the three and nine months ended September 30, 2021. As of September 30, 2021, we had $4.5 billion of our 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 of Directors, our program will expire when we have purchased all shares authorized for repurchase under the program. 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. 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 three and nine months ended September 30, 2021 and 2020 was as follows (in millions):
Three Months Ended September 30: | 2021 |  | 2020
Foreign Currency Translation Gain (Loss), Net of Tax: |  |  |
Balance at beginning of period | $ | (1,015) |  |  | $ | (1,209) |
Translation adjustment (net of tax effect of $8 and $(14)) | (106) |  |  | 65 |
Balance at end of period | (1,121) |  |  | (1,144) |
Unrealized Gain (Loss) on Marketable Securities, Net of Tax: |  |  |
Balance at beginning of period | 1 |  |  | 9 |
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 | 1 |  |  | 7 |
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax: |  |  |
Balance at beginning of period | (155) |  |  | 215 |
Current period changes in fair value (net of tax effect of $40 and $(53)) | 126 |  |  | (168) |
Reclassification to earnings (net of tax effect of $(5) and $(8)) | (14) |  |  | (27) |
Balance at end of period | (43) |  |  | 20 |
Unrecognized Pension and Postretirement Benefit Costs, Net of Tax: |  |  |
Balance at beginning of period | (1,895) |  |  | (4,948) |
Reclassification to earnings (net of tax effect of $9 and $13) | 29 |  |  | 43 |
Balance at end of period | (1,866) |  |  | (4,905) |
Accumulated other comprehensive income (loss) at end of period | $ | (3,029) |  |  | $ | (6,022) |
Nine Months Ended September 30: | 2021 |  | 2020
Foreign currency translation gain (loss), net of tax: |  |  |
Balance at beginning of period | $ | (981) |  |  | $ | (1,078) |
Translation adjustment (net of tax effect of $37 and $(15)) | (140) |  |  | (66) |
Balance at end of period | (1,121) |  |  | (1,144) |
Unrealized gain (loss) on marketable securities, net of tax: |  |  |
Balance at beginning of period | 6 |  |  | 4 |
Current period changes in fair value (net of tax effect of $0 and $1) | (1) |  |  | 6 |
Reclassification to earnings (net of tax effect of $0 and $(1)) | (4) |  |  | (3) |
Balance at end of period | 1 |  |  | 7 |
Unrealized gain (loss) on cash flow hedges, net of tax: |  |  |
Balance at beginning of period | (223) |  |  | 112 |
Current period changes in fair value (net of tax effect of $65 and $10) | 207 |  |  | 33 |
Reclassification to earnings (net of tax effect of $(9) and $(39)) | (27) |  |  | (125) |
Balance at end of period | (43) |  |  | 20 |
Unrecognized pension and postretirement benefit costs, net of tax: |  |  |
Balance at beginning of period | (5,915) |  |  | (5,035) |
Net actuarial gain (loss) resulting from remeasurements of plan assets and liabilities (net of tax effect of $2,039 and $0) | 6,470 |  |  | — |
Reclassification to earnings (net of tax effect of $(763) and $40) | (2,421) |  |  | 130 |
Balance at end of period | (1,866) |  |  | (4,905) |
Accumulated other comprehensive income (loss) at end of period | $ | (3,029) |  |  | $ | (6,022) |
Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and nine months ended September 30, 2021 and 2020 is as follows (in millions):
| Amount Reclassified from AOCI |  | Affected Line Item in the Income Statement
Three Months Ended September 30: | 2021 |  | 2020 |
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 | (3) |  |  | (3) |  |  | Interest expense
Foreign currency exchange contracts | 22 |  |  | 38 |  |  | Revenue
Income tax (expense) benefit | (5) |  |  | (8) |  |  | Income tax expense
Impact on net income | 14 |  |  | 27 |  |  | Net income
Unrecognized Pension and Postretirement Benefit Costs: |  |  |  |  |
Prior service costs | (38) |  |  | (56) |  |  | Investment income and other
Prior service credit for divested business | — |  |  | — |  |  | Other expenses
Plan amendments for divested business | — |  |  | — |  |  | Other expenses
Income tax (expense) benefit | 9 |  |  | 13 |  |  | Income tax expense
Impact on net income | (29) |  |  | (43) |  |  | Net income
Total amount reclassified for the period | $ | (15) |  |  | $ | (15) |  |  | Net income
| Amount Reclassified from AOCI |  | Affected Line Item in the Income Statement
Nine Months Ended September 30: | 2021 |  | 2020 |
Unrealized gain (loss) on marketable securities: |  |  |  |  |
Realized gain (loss) on sale of securities | $ | 4 |  |  | $ | 4 |  |  | Investment income and other
Income tax (expense) benefit | — |  |  | (1) |  |  | Income tax expense
Impact on net income | 4 |  |  | 3 |  |  | Net income
Unrealized gain (loss) on cash flow hedges: |  |  |  |  |
Interest rate contracts | (8) |  |  | (9) |  |  | Interest expense
Foreign currency exchange contracts | 44 |  |  | 173 |  |  | Revenue
Income tax (expense) benefit | (9) |  |  | (39) |  |  | Income tax expense
Impact on net income | 27 |  |  | 125 |  |  | Net income
Unrecognized pension and postretirement benefit costs: |  |  |  |  |
Prior service costs | (109) |  |  | (170) |  |  | 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
Income tax (expense) benefit | (763) |  |  | 40 |  |  | Income tax expense
Impact on net income | 2,421 |  |  | (130) |  |  | Net income
Total amount reclassified for the period | $ | 2,452 |  |  | $ | (2) |  |  | 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 three and nine months ended September 30, 2021 and 2020 was as follows (in millions):
| 2021 |  | 2020
Three Months Ended September 30: | Shares |  | Dollars |  | Shares |  | Dollars
Deferred Compensation Obligations: |  |  |  |  |  |  |
Balance at beginning of period |  |  | $ | 16 |  |  |  |  | $ | 20 |
Reinvested dividends |  |  | — |  |  |  |  | — |
Benefit payments |  |  | — |  |  |  |  | — |
Balance at end of period |  |  | $ | 16 |  |  |  |  | $ | 20 |
Treasury Stock: |  |  |  |  |  |  |
Balance at beginning of period | — |  |  | $ | (16) |  |  | — |  |  | $ | (20) |
Reinvested dividends | — |  |  | — |  |  | — |  |  | — |
Benefit payments | — |  |  | — |  |  | — |  |  | — |
Balance at end of period | — |  |  | $ | (16) |  |  | — |  |  | $ | (20) |
| 2021 |  | 2020
Nine Months Ended September 30: | Shares |  | Dollars |  | Shares |  | Dollars
Deferred Compensation Obligations: |  |  |  |  |  |  |
Balance at beginning of period |  |  | $ | 20 |  |  |  |  | $ | 26 |
Reinvested dividends |  |  | 1 |  |  |  |  | 1 |
Benefit payments |  |  | (5) |  |  |  |  | (7) |
Balance at end of period |  |  | $ | 16 |  |  |  |  | $ | 20 |
Treasury Stock: |  |  |  |  |  |  |
Balance at beginning of period | — |  |  | $ | (20) |  |  | — |  |  | $ | (26) |
Reinvested dividends | — |  |  | (1) |  |  | — |  |  | (1) |
Benefit payments | — |  |  | 5 |  |  | — |  |  | 7 |
Balance at end of period | — |  |  | $ | (16) |  |  | — |  |  | $ | (20) |

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