Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 24, 2017 | |
Entity Registrant Name | UNITED PARCEL SERVICE INC | |
Trading Symbol | UPS | |
Entity Central Index Key | 1,090,727 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 174,673,900 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 687,057,463 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 3,418 | $ 3,476 |
Marketable securities | 1,043 | 1,091 |
Accounts receivable, net | 6,937 | 7,695 |
Other current assets | 1,512 | 1,587 |
Total Current Assets | 12,910 | 13,849 |
Property, Plant and Equipment, Net | 20,988 | 18,800 |
Goodwill | 3,838 | 3,757 |
Intangible Assets, Net | 1,897 | 1,758 |
Non-Current Investments and Restricted Cash | 481 | 476 |
Deferred Income Tax Assets | 318 | 591 |
Other Non-Current Assets | 924 | 1,146 |
Total Assets | 41,356 | 40,377 |
Current Liabilities: | ||
Current maturities of long-term debt and commercial paper | 4,555 | 3,681 |
Accounts payable | 2,808 | 3,042 |
Accrued wages and withholdings | 2,439 | 2,317 |
Hedge margin liabilities | 48 | 575 |
Self-insurance reserves | 713 | 670 |
Accrued group welfare and retirement plan contributions | 640 | 598 |
Other current liabilities | 964 | 847 |
Total Current Liabilities | 12,167 | 11,730 |
Long-Term Debt | 14,355 | 12,394 |
Pension and Postretirement Benefit Obligations | 10,075 | 12,694 |
Deferred Income Tax Liabilities | 75 | 112 |
Self-Insurance Reserves | 1,740 | 1,794 |
Other Non-Current Liabilities | 1,405 | 1,224 |
Shareowners' Equity: | ||
Additional paid-in capital | 0 | 0 |
Retained earnings | 5,724 | 4,879 |
Accumulated other comprehensive loss | (4,224) | (4,483) |
Deferred compensation obligations | 37 | 45 |
Less: Treasury stock (1 share in 2017 and 2016) | (37) | (45) |
Total Equity for Controlling Interests | 1,509 | 405 |
Noncontrolling Interests | 30 | 24 |
Total Shareowners’ Equity | 1,539 | 429 |
Total Liabilities and Shareowners’ Equity | 41,356 | 40,377 |
Common Class A [Member] | ||
Shareowners' Equity: | ||
Common stock | 2 | 2 |
Total Equity for Controlling Interests | 2 | 2 |
Common Class B [Member] | ||
Shareowners' Equity: | ||
Common stock | 7 | 7 |
Total Equity for Controlling Interests | $ 7 | $ 7 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Treasury stock, shares | 1 | 1 | ||
Class A common stock | ||||
Common stock, shares issued | 176 | 180 | 185 | 194 |
Class B common stock | ||||
Common stock, shares issued | 687 | 689 | 689 | 693 |
STATEMENTS OF CONSOLIDATED INCO
STATEMENTS OF CONSOLIDATED INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 15,978 | $ 14,928 | $ 47,043 | $ 43,975 |
Operating Expenses: | ||||
Compensation and benefits | 8,221 | 7,857 | 24,457 | 23,448 |
Repairs and maintenance | 398 | 386 | 1,180 | 1,150 |
Depreciation and amortization | 572 | 554 | 1,688 | 1,661 |
Purchased transportation | 2,652 | 2,212 | 7,461 | 6,306 |
Fuel | 636 | 541 | 1,873 | 1,480 |
Other occupancy | 282 | 248 | 845 | 762 |
Other expenses | 1,182 | 1,096 | 3,504 | 3,273 |
Total Operating Expenses | 13,943 | 12,894 | 41,008 | 38,080 |
Operating Profit | 2,035 | 2,034 | 6,035 | 5,895 |
Other Income and (Expense): | ||||
Investment income and other | 20 | 13 | 49 | 38 |
Interest expense | (111) | (94) | (324) | (281) |
Total Other Income and (Expense) | (91) | (81) | (275) | (243) |
Income Before Income Taxes | 1,944 | 1,953 | 5,760 | 5,652 |
Income Tax Expense | 680 | 683 | 1,954 | 1,982 |
Net Income | $ 1,264 | $ 1,270 | $ 3,806 | $ 3,670 |
Basic Earnings Per Share (usd per share) | $ 1.45 | $ 1.44 | $ 4.36 | $ 4.15 |
Diluted Earnings Per Share (usd per share) | $ 1.45 | $ 1.44 | $ 4.34 | $ 4.13 |
STATEMENTS OF CONSOLIDATED COMP
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 1,264 | $ 1,270 | $ 3,806 | $ 3,670 |
Change in foreign currency translation adjustment, net of tax | 32 | (7) | 86 | (12) |
Change in unrealized gain (loss) on marketable securities, net of tax | 0 | (1) | 1 | 4 |
Change in unrealized gain (loss) on cash flow hedges, net of tax | (86) | (64) | (278) | (183) |
Change in unrecognized pension and postretirement benefit costs, net of tax | 32 | 27 | 450 | 80 |
Comprehensive Income | $ 1,242 | $ 1,225 | $ 4,065 | $ 3,559 |
STATEMENTS OF CONSOLIDATED CASH
STATEMENTS OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows From Operating Activities: | ||
Net Income | $ 3,806 | $ 3,670 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 1,688 | 1,661 |
Pension and postretirement benefit expense | 651 | 804 |
Pension and postretirement benefit contributions | (2,585) | (1,298) |
Self-insurance reserves | (17) | (38) |
Deferred tax (benefit) expense | 295 | (150) |
Stock compensation expense | 463 | 471 |
Other (gains) losses | (21) | (165) |
Changes in assets and liabilities, net of effects of business acquisitions: | ||
Accounts receivable | 818 | 782 |
Other current assets | 185 | 370 |
Accounts payable | (411) | (276) |
Accrued wages and withholdings | 117 | 46 |
Other current liabilities | (580) | (491) |
Other current liabilities | 9 | (23) |
Net cash from operating activities | 4,418 | 5,363 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (3,708) | (1,837) |
Proceeds from disposals of property, plant and equipment | 18 | 76 |
Purchases of marketable securities | (1,468) | (4,250) |
Sales and maturities of marketable securities | 1,582 | 4,038 |
Net (increase) decrease in finance receivables | (1) | 4 |
Cash paid for business acquisitions, net of cash and cash equivalents acquired | (61) | (3) |
Other investing activities | 20 | (55) |
Net cash used in investing activities | (3,618) | (2,027) |
Cash Flows From Financing Activities: | ||
Net change in short-term debt | (354) | (689) |
Proceeds from long-term borrowings | 5,328 | 4,018 |
Repayments of long-term borrowings | (2,450) | (2,323) |
Purchases of common stock | (1,346) | (2,007) |
Issuances of common stock | 177 | 196 |
Dividends | (2,085) | (1,987) |
Other financing activities | (184) | 11 |
Net cash used in financing activities | (914) | (2,781) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 56 | 14 |
Net Increase (Decrease) in Cash and Cash Equivalents | (58) | 569 |
Cash and Cash Equivalents: | ||
Beginning of period | 3,476 | 2,730 |
End of period | $ 3,418 | $ 3,299 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION AND ACCOUNTING POLICIES Principles of Consolidation In our opinion, the accompanying interim, unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of September 30, 2017 , our results of operations for the three and nine months ended September 30, 2017 and 2016 , and cash flows for the nine months ended September 30, 2017 and 2016 . The results reported in these consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any other period or the entire year. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 . For interim consolidated financial statement purposes, we provide for accruals under our various employee benefit plans for each three month period based on one quarter of the estimated annual expense. Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, accounts receivable, finance receivables and accounts payable approximate fair value as of September 30, 2017 . The fair values of our investment securities are disclosed in note 4 , our recognized multiemployer pension withdrawal liabilities in note 6 , our short and long-term debt in note 8 and our derivative instruments in note 13 . We utilized Level 1 inputs in the fair value hierarchy of valuation techniques to determine the fair value of our cash and cash equivalents, and Level 2 inputs to determine the fair value of our accounts receivable, finance receivables and accounts payable. Self-Insurance Accruals We self-insure costs associated with workers’ compensation claims, automotive liability, health and welfare and general business liabilities, up to certain limits. Insurance reserves are established for estimates of the loss that we will ultimately incur on reported claims, as well as estimates of claims that have been incurred but not yet reported. Recorded balances are based on reserve levels, which incorporate historical loss experience and judgments about the present and expected levels of cost per claim. Trends in actual experience are a significant factor in the determination of such reserves. Workers’ compensation, automobile liability and general liability insurance claims may take several years to completely settle. Consequently, actuarial estimates are required to project the ultimate cost that will be incurred to fully resolve the claims. A number of factors can affect the actual cost of a claim, including the length of time the claim remains open, trends in healthcare costs and the results of related litigation. Furthermore, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. Changes in state legislation with respect to workers' compensation can affect the adequacy of our self-insurance accruals. All of these factors can result in revisions to prior actuarial projections and produce a material difference between estimated and actual operating results. Prior to 2017, outside actuarial studies were performed semi-annually and we used the studies to estimate the liability in intervening quarters. Beginning in 2017, outside actuarial studies are now performed quarterly as we believe this provides us with better quarterly estimates of our outstanding workers' compensation liability. We sponsor a number of health and welfare insurance plans for our employees. These liabilities and related expenses are based on estimates of the number of employees and eligible dependents covered under the plans, anticipated medical usage by participants and overall trends in medical costs and inflation. Accounting Estimates The preparation of the accompanying interim, unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best information and actual results could differ materially from those estimates. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Adoption of New Accounting Standards In March 2016, the Financial Accounting Standards Board ("FASB") issued an accounting standards update that simplified the income tax accounting and cash flow presentation related to share-based compensation by requiring the recognition of all excess tax benefits and deficiencies directly on the income statement and classification as cash flows from operating activities on the statements of consolidated cash flows. This update also made several changes to the accounting for forfeitures and employee tax withholding on share-based compensation. This new guidance became effective for us in the first quarter of 2017 and we adopted the statements of consolidated cash flows presentation on a prospective basis. The impact to income tax expense in the statements of consolidated income was a benefit of $62 million for the nine months ended September 30, 2017 . There was no significant impact related to the adoption of the new accounting standard in the third quarter of 2017. Additionally, we have elected to continue estimating forfeitures expected to occur to determine the amount of compensation cost to be recognized each period. Other accounting pronouncements adopted during the periods covered by the consolidated financial statements did not have a material impact on our consolidated financial position, results of operations or cash flows. Accounting Standards Issued But Not Yet Effective In August 2017, the FASB issued an accounting standards update to enhance recognition of the economic results of hedging activities in the financial statements. In addition, this update makes certain targeted improvements to simplify the application of the hedge accounting guidance and increase transparency regarding the scope and results of its hedging activities. The guidance will generally be applied prospectively and becomes effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued an accounting standards update to provide clarity and reduce complexity on when to apply modification accounting to existing share-based payment awards. The guidance will generally be applied prospectively and becomes effective for us in the first quarter of 2018, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In March 2017, the FASB issued an accounting standards update to require the premium on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount would not be impacted by the proposed update. Under current generally accepted accounting principles (“GAAP”), premiums on callable debt securities are generally amortized over the contractual life of the security. Only in cases when an entity has a large number of similar securities is it allowed to consider estimates of principal prepayments. Amortization of the premium over the contractual life of the instrument can result in losses being recorded for the unamortized premium if the issuer exercises the call feature prior to maturity. The standard will be effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In March 2017, the FASB issued an accounting standards update to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The update requires employers to report the current service cost component in the same line item as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented separately from service cost and outside of income from operations. In accordance with the update, only the service cost component will be eligible for capitalization. The guidance in this update should be applied retrospectively for the presentation of service cost and other components of net benefit cost, and prospectively for the capitalization of the service cost component in assets, and becomes effective for us in the first quarter of 2018. As a result of this update, the net amount of interest cost, prior service cost and expected return on plan assets will be presented as other income. For the three months ended September 30, 2017 and 2016, non-service cost components amounted to a $216 and $105 million benefit ( $575 and $313 million for the nine months ended September 30, 2017 and 2016), respectively, which was recognized in "Compensation and benefits" on the statements of consolidated income. After adoption, the non-service cost components will be recognized in "Other Income and (Expense)" on the statements of consolidated income. In January 2017, the FASB issued an accounting standards update to simplify the accounting for goodwill impairment. The update removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The standard will be effective for us in the first quarter of 2020, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In November 2016, the FASB issued an accounting standards update that is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows. The update should be applied retrospectively and becomes effective for us in the first quarter of 2018, but early adoption is permitted. As a result of this update, restricted cash will be included within cash and cash equivalents on our statements of consolidated cash flows. As of September 30, 2017 and December 31, 2016, we classified $123 and $310 million in restricted cash on our consolidated balance sheets in "non-current investments and restricted cash", respectively. In August 2016, the FASB issued an accounting standards update that addresses the classification and presentation of specific cash flow issues that currently result in diverse practices. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance will generally be applied retrospectively and becomes effective for us in the first quarter of 2018, but early adoption is permitted. We are currently evaluating the impact of this standard on our statements of consolidated cash flows, but do not expect this standard to have a material impact. In February 2016, the FASB issued an accounting standards update that requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases with terms beyond twelve months. Although the distinction between operating and finance leases will continue to exist under the new standard, the recognition and measurement of expenses and cash flows will not change significantly from the current treatment. This new guidance requires modified retrospective application and becomes effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption on our consolidated financial position, results of operations, cash flows and related disclosures, as well as the impact of adoption on policies, practices and systems. As of December 31, 2016, we had $ 1.470 billion of future minimum operating lease commitments that are not currently recognized on our consolidated balance sheets. Therefore, we expect material changes to our consolidated balance sheets. In January 2016, the FASB issued an accounting standards update which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The amendment will be effective for us beginning the first quarter of 2018. At this time, we do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued an accounting standards update that changes the revenue recognition for companies that enter into contracts with customers to transfer goods or services. The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner depicting the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has also issued a number of updates to this standard. We are planning to adopt the standard on January 1, 2018. Companies may use either a full retrospective or a modified retrospective approach to adopt this standard. We expect to adopt the standard using a full retrospective approach. We are currently evaluating this standard and the related updates, including the impact of adoption on policies, practices and systems. At this stage in our evaluation, we have determined that revenue recognition will be accelerated for the transportation businesses as the standard requires revenue to be recognized as control is transferred to the customer over time rather than upon delivery. We are currently quantifying the impact of this change to the statements of consolidated income but do not expect it to be material. The standard also requires us to evaluate whether our businesses promise to transfer services to the customer itself (as a principal) or to arrange for services to be provided by another party (as an agent). To make that determination, the standard uses a control model rather than the risks-and-rewards model in current GAAP. Based on our evaluation of the control model, we determined that certain Supply Chain & Freight businesses act as the principal rather than the agent within their revenue arrangements. This change will require the affected businesses to report transportation revenue gross of associated purchase transportation costs rather than net of such amounts within the statements of consolidated income. We expect that this change will result in an approximately $720 million reclassification from operating expenses to revenue on the statement of consolidated income for the period ended December 31, 2016. This amount may change as we continue to evaluate other businesses. In addition to completing our review of contracts and quantifying the impacts on the consolidated financial statements, we are currently analyzing our internal control over financial reporting framework to determine if controls should be added or modified as a result of adopting this standard. In addition, we are currently reviewing the impacts of this standard on our footnote disclosures for periods subsequent to January 1, 2018. At this stage in our review of the disclosure requirements, we expect that the adoption of this standard will result in several additional disclosures, including but not limited to additional information around our performance obligations, the timing of revenue recognition, remaining performance obligations at period end, contract assets and liabilities, and significant judgments made that impact the amount and timing of revenue from our contracts with customers. Other accounting pronouncements issued, but not effective until after September 30, 2017 , are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION We issue employee share-based awards under the UPS Incentive Compensation Plan, which permits the grant of non-qualified and incentive stock options, stock appreciation rights, restricted stock and stock units, and restricted performance shares and performance units, to eligible employees (restricted stock and stock units, restricted performance shares and performance units are herein referred to as "Restricted Units"). Upon vesting, Restricted Units result in the issuance of the equivalent number of UPS class A common shares after required tax withholdings. Dividends accrued on Restricted Units are reinvested in additional Restricted Units at each dividend payable date, and are subject to the same vesting and forfeiture conditions as the underlying Restricted Units upon which they are earned. The primary compensation programs offered under the UPS Incentive Compensation Plan include the UPS Management Incentive Award program, the UPS Long-Term Incentive Performance Award program and the UPS Stock Option program. We also maintain an employee stock purchase plan which allows eligible employees to purchase shares of UPS class A common stock at a discount. Additionally, our matching contributions to the primary employee defined contribution savings plan are made in shares of UPS class A common stock. Management Incentive Award Program ("MIP") During the first quarter of 2017 , we granted Restricted Units under MIP to certain eligible management employees. Restricted Units granted under MIP generally vest over a five -year period with approximately 20% of the award vesting on January 15th of each of the years following the grant date (except in the case of death, disability or retirement, in which case immediate vesting occurs). The entire grant is expensed on a straight-line basis (less estimated forfeitures) ratably over the requisite service period. Based on the date that the eligible management population and performance targets were approved for MIP, we determined the award measurement date to be February 7, 2017 (for U.S.-based employees), March 1, 2017 (for management committee employees) and March 27, 2017 (for international-based employees); therefore, the Restricted Units awarded were valued for stock compensation expense purposes using the closing New York Stock Exchange price of $105.69 , $106.87 and $104.78 on those dates, respectively. Long-Term Incentive Performance Award Program ("LTIP") We award Restricted Units under LTIP to certain eligible management employees. The performance targets are equally-weighted among consolidated operating return on invested capital, growth in currency-constant consolidated revenue and total shareowner return ("RTSR") relative to a peer group of companies. These Restricted Units generally vest at the end of a three -year period (except in the case of death, disability, or retirement, in which case immediate vesting occurs on a prorated basis). The number of Restricted Units earned will be based on the percentage achievement of the performance targets established on the grant date. For the two-thirds of the award related to consolidated operating return on invested capital and growth in currency-constant consolidated revenue, we recognize the grant date fair value of these Restricted Units (less estimated forfeitures) as compensation expense ratably over the vesting period, based on the number of awards expected to be earned. Based on the date that the eligible management population and performance targets were approved for the 2017 LTIP Award, we determined the award measurement date to be March 24, 2017; therefore, the target Restricted Units awarded for this portion of the award were valued for stock compensation expense using the closing New York Stock Exchange price of $105.05 on that date. The remaining one-third of the award related to RTSR is valued using a Monte Carlo model. This portion of the award was valued with a grant date fair value of $119.29 per unit and is recognized as compensation expense (less estimated forfeitures) ratably over the vesting period. The weighted-average assumptions used and the calculated weighted-average fair values of the RTSR portion of the LTIP awards granted in 2017 and 2016 are as follows: 2017 2016 Risk-free interest rate 1.46 % 1.00 % Expected volatility 16.59 % 16.46 % Weighted-average fair value of units granted $ 119.29 $ 136.18 Share payout 113.55 % 129.08 % There is no expected dividend yield as units earn dividend equivalents. Non-Qualified Stock Options During the first quarter of 2017 , we granted non-qualified stock option awards to a limited group of eligible senior management employees under the UPS Stock Option program. Stock option awards generally vest over a five -year period with approximately 20% of the award vesting at each anniversary date of the grant (except in the case of death, disability, or retirement, in which case immediate vesting occurs). The options granted will expire ten years after the date of the grant. In the first quarter of 2017 , we granted 0.3 million stock options at a grant price of $106.87 , which is based on the closing New York Stock Exchange price on March 1, 2017. In the first and third quarter of 2016, we granted 0.2 and 0.1 million stock options at a grant price of $ 98.77 and $106.86 , respectively. The grant price was based on the closing New York Stock Exchange price on March 2, 2016 and September 16, 2016, respectively. The fair value of each option grant is estimated using the Black-Scholes option pricing model. The weighted-average assumptions used and the calculated weighted-average fair values of options granted in 2017 and 2016 are as follows: 2017 2016 Expected dividend yield 2.89 % 2.95 % Risk-free interest rate 2.15 % 1.62 % Expected life (in years) 7.5 7.5 Expected volatility 17.81 % 22.40 % Weighted-average fair value of options granted $ 14.70 $ 16.46 Compensation expense for share-based awards recognized in "Compensation and benefits" on the statements of consolidated income for the three months ended September 30, 2017 and 2016 was $ 118 and $ 125 million, respectively. Compensation expense for share-based awards recognized in "Compensation and benefits" on the statements of consolidated income for the nine months ended September 30, 2017 and 2016 was $ 463 and $ 471 million, respectively. |
INVESTMENTS AND RESTRICTED CASH
INVESTMENTS AND RESTRICTED CASH | 9 Months Ended |
Sep. 30, 2017 | |
Marketable Securities [Abstract] | |
INVESTMENTS AND RESTRICTED CASH | INVESTMENTS AND RESTRICTED CASH The following is a summary of marketable securities classified as trading and available-for-sale as of September 30, 2017 and December 31, 2016 (in millions): Cost Unrealized Gains Unrealized Losses Estimated Fair Value September 30, 2017: Current trading marketable securities: Corporate debt securities $ 159 $ — $ — $ 159 Carbon credit investments (1) 241 46 — 287 Total trading marketable securities $ 400 $ 46 $ — $ 446 Current available-for-sale securities: U.S. government and agency debt securities $ 286 $ — $ (1 ) $ 285 Mortgage and asset-backed debt securities 90 — — 90 Corporate debt securities 210 1 — 211 U.S. state and local municipal debt securities — — — — Equity securities 2 — — 2 Non-U.S. government debt securities 9 — — 9 Total available-for-sale marketable securities $ 597 $ 1 $ (1 ) $ 597 Total current marketable securities $ 997 $ 47 $ (1 ) $ 1,043 Cost Unrealized Gains Unrealized Losses Estimated Fair Value December 31, 2016: Current trading marketable securities: Corporate debt securities $ 427 $ — $ — $ 427 Carbon credit investments (1) 80 10 — 90 Total trading marketable securities $ 507 $ 10 $ — $ 517 Current available-for-sale securities: U.S. government and agency debt securities $ 314 $ — $ (2 ) $ 312 Mortgage and asset-backed debt securities 90 1 — 91 Corporate debt securities 167 — (1 ) 166 Equity securities 2 — — 2 Non-U.S. government debt securities 3 — — 3 Total available-for-sale marketable securities $ 576 $ 1 $ (3 ) $ 574 Total current marketable securities $ 1,083 $ 11 $ (3 ) $ 1,091 (1) These investments are hedged with forward contracts that are not designated in hedging relationships. See Note 13 for offsetting statement of consolidated income impact. Investment Other-Than-Temporary Impairments We have concluded that no material other-than-temporary impairment losses existed as of September 30, 2017 . In making this determination, we considered the financial condition and prospects of the issuer, the magnitude of the losses compared with the investments’ cost, the probability that we will be unable to collect all amounts due according to the contractual terms of the security, the credit rating of the security and our ability and intent to hold these investments until the anticipated recovery in market value occurs. Maturity Information The amortized cost and estimated fair value of marketable securities at September 30, 2017 , by contractual maturity, are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. Cost Estimated Fair Value Due in one year or less $ 218 $ 218 Due after one year through three years 443 442 Due after three years through five years 18 18 Due after five years 75 76 754 754 Equity and carbon credit investments 243 289 $ 997 $ 1,043 Non-Current Investments and Restricted Cash Non-current investments and restricted cash is primarily associated with our self-insurance requirements. We entered into an escrow agreement with an insurance carrier to guarantee our self-insurance obligations. This agreement requires us to provide collateral to the insurance carrier, which is invested in various marketable securities. Collateral provided is reflected in "Other investing activities" in the statements of consolidated cash flows. At September 30, 2017 and December 31, 2016 , we had $ 448 and $ 445 million in self-insurance investments and restricted cash, respectively. We held a $19 and $18 million investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan at September 30, 2017 and December 31, 2016 , respectively. The quarterly change in investment fair value is recognized in "Investment income and other" on the statements of consolidated income. Additionally, we held escrowed cash related to the acquisition and disposition of certain assets, primarily real estate, of $14 and $ 13 million as of September 30, 2017 and December 31, 2016 , respectively. The amounts described above are classified as “Non-Current Investments and Restricted Cash” in the consolidated balance sheets. Fair Value Measurements Marketable securities utilizing Level 1 inputs include active exchange-traded equity securities and equity index funds, and most U.S. government debt securities, as these securities all have quoted prices in active markets. Marketable securities utilizing Level 2 inputs include asset-backed securities, corporate bonds and municipal bonds. These securities are valued using market corroborated pricing, matrix pricing or other models that utilize observable inputs such as yield curves. We maintain holdings in certain investment partnerships that are measured at fair value utilizing Level 3 inputs (classified as “Other non-current investments” in the tables below, and as “Other Non-Current Assets” in the consolidated balance sheets). These partnership holdings do not have quoted prices, nor can they be valued using inputs based on observable market data. These investments are valued internally using a discounted cash flow model with two significant inputs: (1) the after-tax cash flow projections for each partnership, and (2) a risk-adjusted discount rate consistent with the duration of the expected cash flows for each partnership. The weighted-average discount rates used to value these investments were 7.78% and 8.06% as of September 30, 2017 and December 31, 2016 , respectively. These inputs, and the resulting fair values, are updated on a quarterly basis. The following table presents information about our investments measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance September 30, 2017: Marketable Securities: U.S. government and agency debt securities $ 285 $ — $ — $ 285 Mortgage and asset-backed debt securities — 90 — 90 Corporate debt securities 21 349 — 370 Equity securities — 2 — 2 Non-U.S. government debt securities — 9 — 9 Carbon credit investments 287 — — 287 Total marketable securities 593 450 — 1,043 Other non-current investments 19 — 8 27 Total $ 612 $ 450 $ 8 $ 1,070 December 31, 2016: Marketable Securities: U.S. government and agency debt securities $ 312 $ — $ — $ 312 Mortgage and asset-backed debt securities — 91 — 91 Corporate debt securities — 593 — 593 Equity securities — 2 — 2 Non-U.S. government debt securities — 3 — 3 Carbon credit investments 90 — — 90 Total marketable securities 402 689 — 1,091 Other non-current investments 18 — 13 31 Total $ 420 $ 689 $ 13 $ 1,122 The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the three months ended September 30, 2017 and 2016 (in millions): Marketable Securities Other Non-Current Investments Total Balance on July 1, 2017 $ — $ 9 $ 9 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (1 ) (1 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2017 $ — $ 8 $ 8 Marketable Securities Other Non-Current Investments Total Balance on July 1, 2016 $ — $ 22 $ 22 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (4 ) (4 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2016 $ — $ 18 $ 18 The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the nine months ended September 30, 2017 and 2016 (in millions): Marketable Securities Other Investments Total Balance on January 1, 2017 $ — 13 13 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (5 ) (5 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2017 $ — $ 8 $ 8 Marketable Securities Other Investments Total Balance on January 1, 2016 $ — 32 32 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (14 ) (14 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2016 $ — $ 18 $ 18 There were no transfers of investments between Level 1 and Level 2 during the three and nine months ended September 30, 2017 and 2016 . |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of September 30, 2017 and December 31, 2016 consist of the following (in millions): 2017 2016 Vehicles $ 9,124 $ 8,638 Aircraft 15,708 15,653 Land 1,568 1,397 Buildings 3,789 3,439 Building and leasehold improvements 3,796 3,612 Plant equipment 8,850 8,430 Technology equipment 1,858 1,741 Equipment under operating leases 29 29 Construction-in-progress 2,482 735 47,204 43,674 Less: Accumulated depreciation and amortization (26,216 ) (24,874 ) $ 20,988 $ 18,800 We continually monitor our aircraft fleet utilization in light of current and projected volume levels, aircraft fuel prices and other factors. Additionally, we monitor our other property, plant and equipment categories for any indicators that the carrying value of the assets may not be recoverable. No impairment charges on property, plant and equipment were recorded during the three and nine months ended September 30, 2017 and 2016 . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Company-Sponsored Benefit Plans Information about net periodic benefit cost for our company-sponsored pension and postretirement benefit plans is as follows for the three and nine months ended September 30, 2017 and 2016 (in millions): U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2017 2016 2017 2016 2017 2016 Three Months Ended September 30: Service cost $ 382 $ 353 $ 7 $ 7 $ 15 $ 12 Interest cost 445 457 28 32 10 10 Expected return on assets (730 ) (629 ) (2 ) (2 ) (17 ) (15 ) Amortization of prior service cost 48 41 1 1 1 — Net periodic benefit cost $ 145 $ 222 $ 34 $ 38 $ 9 $ 7 U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2017 2016 2017 2016 2017 2016 Nine Months Ended September 30: Service cost $ 1,161 $ 1,059 $ 21 $ 21 $ 44 $ 37 Interest cost 1,369 1,371 84 92 30 31 Expected return on assets (2,154 ) (1,887 ) (5 ) (4 ) (49 ) (44 ) Amortization of prior service cost 144 125 5 3 1 — Net periodic benefit cost $ 520 $ 668 $ 105 $ 112 $ 26 $ 24 During the first nine months of 2017 , we contributed $ 2.359 billion and $226 million to our company-sponsored pension and U.S. postretirement medical benefit plans, respectively. We currently expect to contribute $18 and $15 million over the remainder of the year to the pension and U.S. postretirement medical benefit plans, respectively. Subject to market conditions, we continually evaluate opportunities for additional discretionary pension contributions. Plan Amendments and Curtailments The UPS Retirement Plan was closed to new non-union participants effective July 1, 2016. In the quarter ended June 30, 2017, we amended the UPS Retirement Plan and the UPS Excess Coordinating Benefit Plan (single-employer defined benefit pension plans sponsored by UPS) to cease accruals of additional benefits for future service and compensation for non-union participants effective January 1, 2023. We remeasured plan assets and pension benefit obligations for the affected pension plans as of June 30, 2017, resulting in a net actuarial gain of $569 million. This reflected a curtailment gain of $1.525 billion resulting from the benefit plan changes that was partially offset by net actuarial losses of $956 million, driven by a reduction of approximately 32 basis points in the discount rate compared to December 31, 2016, offset by actual assets returns approximately 275 basis points above our expected return as of the remeasurement date. The net curtailment gain reduced the actuarial loss recorded in "Accumulated other comprehensive loss" in the equity section of the consolidated balance sheet. As actuarial losses were within the corridor (defined as 10% of the greater of the fair value of plan assets and the plan's projected benefit obligation), there was no impact to the statement of consolidated income for the quarter ended June 30, 2017. Effective July 1, 2016, the Company amended the UPS 401(k) Savings Plan so that employees who would have been eligible for participation in the UPS Retirement Plan instead began earning a UPS Retirement Contribution. For employees eligible to receive the Retirement Contribution, UPS contributes 3% to 8% of eligible pay to the UPS 401(k) Savings Plan based on years of vesting service and business unit. Contributions are made annually in cash to the accounts of participants who are employed on December 31st of each calendar year. Effective June 23, 2017, the Company amended the UPS 401(k) Savings Plan so that non-union employees who currently participate in the UPS Retirement Plan will, in addition to current benefits under the UPS 401(k) Savings Plan, earn a UPS Retirement Contribution beginning January 1, 2023. UPS will contribute 5% to 8% of eligible compensation to the UPS 401(k) Savings Plan based on years of vesting service. The amendment also provides for transition contributions for certain participants. There was no impact to the statement of consolidated income for the quarter ended June 30, 2017 as a result of the above changes. Multiemployer Benefit Plans We contribute to a number of multiemployer defined benefit and health and welfare plans under terms of collective bargaining agreements that cover our union-represented employees. Our current collective bargaining agreements set forth the annual contribution increases allotted to the plans that we participate in, and we are in compliance with these contribution rates. These limitations on annual contribution rates will remain in effect throughout the terms of the existing collective bargaining agreements. As of September 30, 2017 and December 31, 2016 we had $ 861 and $866 million , respectively, recorded in "Other Non-Current Liabilities," as well as $ 7 and $6 million as of September 30, 2017 and December 31, 2016 , respectively, recorded in "Other current liabilities," on our consolidated balance sheets associated with our previous withdrawal from a multiemployer pension plan. This liability is payable in equal monthly installments over a remaining term of approximately 45 years. Based on the borrowing rates currently available to us for long-term financing of a similar maturity, the fair value of this withdrawal liability as of September 30, 2017 and December 31, 2016 was $ 891 and $ 861 million , respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability. UPS was a contributing employer to the Central States Pension Fund (“CSPF”) until 2007 when we withdrew from the plan and fully funded our allocable share of unfunded vested benefits by paying a $6.1 billion withdrawal liability. Under a collective bargaining agreement with the International Brotherhood of Teamsters (“IBT”), UPS agreed to provide coordinating benefits in the UPS/IBT Full Time Employee Pension Plan (“UPS/IBT Plan”) for UPS participants whose last employer was UPS and who had not retired as of January 1, 2008 (“the UPS Transfer Group”) in the event that benefits are lawfully reduced by the CSPF in the future consistent with the terms of our withdrawal agreement with the CSPF. In December 2014, Congress passed the Multiemployer Pension Reform Act (“MPRA”), which for the first time ever allowed multiemployer pension plans to reduce benefit payments to retirees, subject to specific guidelines in the statute and government approval. In September 2015, the CSPF submitted a proposed pension benefit reduction plan to the U.S. Department of the Treasury under the MPRA. The CSPF plan proposed to reduce retirement benefits to the CSPF participants, including the UPS Transfer Group. We vigorously challenged the proposed benefit reduction plan because we believed that it did not comply with the law and that the CSPF failed to comply with its contractual obligation to obtain our consent to reduce benefits to the UPS Transfer Group under the terms of the withdrawal agreement with the CSPF. On May 6, 2016, the U.S. Department of the Treasury rejected the proposed plan submitted by the CSPF, stating that it failed to satisfy a number of requirements set forth in the MPRA. The CSPF has asserted that it will become insolvent in 2025 which could lead to the reduction of retirement benefits. Although there are numerous factors that could affect the CSPF’s funding status, if the CSPF were to become insolvent as they have projected, UPS may be required to provide coordinating benefits, thereby increasing the current projected benefit obligation for the UPS/IBT Plan by approximately $4 billion . The CSPF has said that it believes a legislative solution to its funding status is necessary, and we expect that the CSPF will continue to explore options to avoid insolvency. The potential obligation to pay coordinating benefits from the UPS/IBT Plan is subject to a number of significant uncertainties, including actions that may be taken by the CSPF, the federal government or others. These actions include whether the CSPF will submit a revised pension benefit reduction plan or otherwise seek federal government assistance, the extent to which benefits are paid by the Pension Benefit Guaranty Corporation and our ability to successfully defend our legal positions, as well as the effect of discount rates and various other actuarial assumptions. We account for this potential obligation under Accounting Standards Codification Topic 715- Compensation- Retirement Benefits (“ASC 715”). Under ASC 715 we are required to provide a best estimate of various actuarial assumptions, including the eventual outcome of this matter, in measuring our pension benefit obligation at the December 31st measurement date. While we currently believe the most likely solution to this matter and the broader systemic problems facing multiemployer pension plans is intervention by the federal government, ASC 715 does not permit anticipation of changes in law in making a best estimate of pension liabilities. Our best estimate as of the measurement date of December 31, 2016 does not incorporate this solution. Rather, our best estimate of the next most likely outcome to resolve the CSPF’s solvency concerns is that the CSPF will make another MPRA filing to forestall insolvency without reducing benefits to the UPS Transfer Group. If the CSPF attempts to reduce benefits for the UPS Transfer Group under a MPRA filing we would be in a strong legal position to prevent that from occurring given that these benefits cannot be reduced without our consent and such a reduction, without first exhausting reductions to other groups in the CSPF, would be contrary to the statute. Accordingly, our best estimate as of the measurement date of December 31, 2016 is that there is no liability to be recognized for additional coordinating benefits of the UPS/IBT Plan. However, the projected benefit obligation could materially increase as these uncertainties are resolved. We will continue to assess the impact of these uncertainties on the projected benefit obligation of the UPS/IBT Plan in accordance with ASC 715. Collective Bargaining Agreements As of December 31, 2016, we had approximately 268,000 employees employed under a national master agreement and various supplemental agreements with local unions affiliated with the Teamsters. During 2014, the Teamsters ratified a new national master agreement (“NMA”) with UPS that will expire on July 31, 2018. The economic provisions in the NMA included wage rate increases, as well as increased contribution rates for healthcare and pension benefits. We have approximately 2,600 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association ("IPA"). During 2016, the IPA members voted to ratify a new five-year labor contract. Terms of the agreement became effective September 1, 2016 and run through September 1, 2021. The economic provisions in the agreement included pay increases, a signing bonus and enhanced pension benefits. Our airline mechanics are covered by a collective bargaining agreement with Teamsters Local 2727, which became amendable November 1, 2013. We are currently in negotiations with Teamsters Local 2727. In addition, approximately 3,000 of our auto and maintenance mechanics who are not employed under agreements with the Teamsters are employed under collective bargaining agreements with the International Association of Machinists and Aerospace Workers (“IAM”) that will expire on July 31, 2019. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The following table indicates the allocation of goodwill by reportable segment as of September 30, 2017 and December 31, 2016 (in millions): U.S. Domestic Package International Package Supply Chain & Freight Consolidated December 31, 2016: $ 715 $ 407 $ 2,635 $ 3,757 Acquired — 18 25 43 Currency / Other — 14 24 38 September 30, 2017: $ 715 $ 439 $ 2,684 $ 3,838 The goodwill acquired in the Supply Chain & Freight segment was predominately related to our January 2017 acquisition of Freightex Ltd. ("Freightex"), a U.K.-based asset-light provider of truckload, less-than truckload and specialized over-the-road services. The acquisition of Freightex was paid for with cash from operations. The acquisition of Freightex was not material to our consolidated financial position or results of operations. The remaining goodwill acquired in the Supply Chain & Freight segment was related to other, smaller acquisitions immaterial to our consolidated financial position or results of operations. The goodwill acquired in the International Package segment was related to our June 2017 acquisition of Eirpost Group Unlimited Company ("Nightline"), an Ireland-based express delivery and logistics company. The acquisition of Nightline was paid for with cash from operations. The acquisition of Nightline was not material to our consolidated financial position or results of operations. In December 2016, we acquired Maze 1 Limited ("Marken"), a global provider of supply chain solutions to the life sciences industry and leader in clinical trials material storage and distribution, for approximately $570 million. As of September 30, 2017, we had no material changes to our estimated fair values of assets acquired and liabilities assumed. The financial results of Marken are included in the Supply Chain & Freight segment from the date of acquisition and were not material to our results of operations. The estimates of the fair value of assets acquired and liabilities assumed are subject to change based on the completion of purchase accounting. The purchase price allocation for acquired companies can be modified for up to one year from the date of acquisition. The remaining change in goodwill for both the International Package and Supply Chain & Freight segments was due to immaterial purchase accounting adjustments and the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. Dollar goodwill balances. Goodwill Impairment and Annual Assessment Date Change During the third quarter of 2017, we changed the measurement date of our annual goodwill impairment test from October 1st to July 1st. This change better aligns the timing of the goodwill impairment test with our long-term business planning process. The change was not material to our consolidated financial statements as it did not result in the delay, acceleration or avoidance of an impairment charge. We completed our annual goodwill impairment valuation for all reporting units and indefinite lived intangible assets as of July 1, 2017, and determined that goodwill is not impaired. We will continue to monitor each reporting unit for triggering events that might require an update to our annual impairment evaluation between the annual assessment date and December 31, 2017. There were no triggering events identified during the third quarter of 2017. The following is a summary of intangible assets as of September 30, 2017 and December 31, 2016 (in millions): Gross Carrying Amount Accumulated Amortization Net Carrying Value September 30, 2017: Capitalized software $ 3,192 $ (2,269 ) $ 923 Licenses 165 (71 ) 94 Franchise rights 128 (95 ) 33 Customer relationships 751 (141 ) 610 Trade name 200 — 200 Trademarks, patents and other 72 (35 ) 37 Total Intangible Assets, Net $ 4,508 $ (2,611 ) $ 1,897 December 31, 2016: Capitalized software $ 2,933 $ (2,157 ) $ 776 Licenses 131 (70 ) 61 Franchise rights 128 (90 ) 38 Customer relationships 724 (85 ) 639 Trade name 200 — 200 Trademarks, patents and other 67 (23 ) 44 Total Intangible Assets, Net $ 4,183 $ (2,425 ) $ 1,758 As of September 30, 2017 , we had a trade name with a carrying value of $ 200 million and licenses with a carrying value of $ 5 million, which are deemed to be indefinite-lived intangible assets and are included in the table above. |
DEBT AND FINANCING ARRANGEMENTS
DEBT AND FINANCING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT AND FINANCING ARRANGEMENTS | DEBT AND FINANCING ARRANGEMENTS The carrying value of our outstanding debt as of September 30, 2017 and December 31, 2016 consists of the following (in millions): Principal Amount Carrying Value Maturity 2017 2016 Commercial paper $ 4,120 2017-2018 $ 4,120 $ 3,250 Fixed-rate senior notes: 1.125% senior notes 375 2017 375 374 5.50% senior notes 750 2018 755 769 5.125% senior notes 1,000 2019 1,027 1,043 3.125% senior notes 1,500 2021 1,567 1,584 2.40% senior notes 500 2026 497 497 2.45% senior notes 1,000 2022 989 986 2.35% senior notes 600 2022 596 — 6.20% senior notes 1,500 2038 1,482 1,481 4.875% senior notes 500 2040 489 489 3.625% senior notes 375 2042 368 367 3.40% senior notes 500 2046 491 491 Floating rate senior notes 400 2022 398 — 8.375% Debentures: 8.375% debentures 424 2020 453 461 8.375% debentures 276 2030 282 282 Pound Sterling notes: 5.50% notes 89 2031 84 76 5.125% notes 609 2050 582 535 Euro senior notes: 1.625% notes 827 2025 822 732 1.00% notes 591 2028 587 523 Floating rate senior notes 591 2020 589 525 Canadian senior notes: 2.125% notes 603 2024 600 — Floating rate senior notes 979 2049-2067 969 824 Capital lease obligations 450 2017-3005 450 447 Facility notes and bonds 320 2029-2045 320 319 Other debt 18 2017-2022 18 20 Total debt $ 18,897 18,910 16,075 Less: Current maturities (4,555 ) (3,681 ) Long-term debt $ 14,355 $ 12,394 Debt Classification We have classified our 5.50% senior notes due January 2018 with a principal balance of $ 750 million as a long-term liability, based on our intent and ability to refinance the debt as of September 30, 2017 . We have also classified certain floating rate senior notes that are putable by the note holders as a long-term liability, due to our intent and ability to refinance the debt if the put option is exercised by the note holders. Debt Issuances In March, we issued floating rate senior notes in principal amount of $147 million. These notes bear interest at three-month LIBOR less 30 basis points and mature in 2067 . These notes are callable at various times after 30 years at a stated percentage of par value, and putable by the note holders at various times after one year at a stated percentage of par value. On May 16, 2017 we issued U.S. senior rate notes. These senior notes consist of two separate series, as follows: • Two series of notes, in the principle amounts of $ 600 and $ 400 million, were issued. These notes bear interest at a 2.35% fixed rate and at a three-month LIBOR plus 38 basis points, respectively, and mature May 2022. Interest on the fixed rate senior notes will be paid semi-annually, beginning November 2017. Interest on the floating rate senior notes will be paid quarterly beginning August 2017. The 2.35% notes are callable at our option at a redemption price equal to the greater of 100% of the principal amount, or the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semi-annual basis at the discount rate of the treasury rate plus 10 basis points and accrued interest. The floating rate senior notes are not callable. On May 18, 2017 we issued Canadian senior notes. These senior notes consist of a single series as follows: • Notes in the principal amount of C$ 750 million ($ 547 million), which bear interest at a 2.125% fixed interest rate and mature May 2024. Interest on the notes is payable semi-annually beginning November 2017. The notes are callable at our option, in whole or in part at the Government of Canada yield plus 21.5 basis points, and on or after the par call date, at par value. Commercial Paper We are authorized to borrow up to $ 10.0 billion under a U.S. commercial paper program and € 5.0 billion (in a variety of currencies) under a European commercial paper program. We had the following amounts outstanding under these programs as of September 30, 2017 : $ 2.775 billion with an average interest rate of 1.07% and € 1.139 billion ($ 1.345 billion) with an average interest rate of -0.41% . As of September 30, 2017 , we have classified the entire commercial paper balance as a current liability on our consolidated balance sheet. Sources of Credit We maintain two credit agreements with a consortium of banks. One of these agreements provides revolving credit facilities of $1.5 billion, and expires on March 23, 2018 . Generally, amounts outstanding under this facility bear interest at a periodic fixed rate equal to LIBOR for the applicable interest period and currency denomination, plus an applicable margin. Alternatively, a fluctuating rate of interest equal to the highest of (1) JPMorgan Chase Bank’s publicly announced prime rate; (2) the Federal Funds effective rate plus 0.50% ; and (3) LIBOR for a one month interest period plus 1.00% , plus an applicable margin, may be used at our discretion. In each case, the applicable margin for advances bearing interest based on LIBOR is a percentage determined by quotations from Markit Group Ltd. for our 1-year credit default swap spread, subject to a minimum rate of 0.10% and a maximum rate of 0.75% . The applicable margin for advances bearing interest based on the prime rate is 1.00% below the applicable margin for LIBOR advances (but not lower than 0.00% ). We are also able to request advances under this facility based on competitive bids for the applicable interest rate. There were no amounts outstanding under this facility as of September 30, 2017 . The second agreement provides revolving credit facilities of $ 3.0 billion, and expires on March 24, 2022 . Generally, amounts outstanding under this facility bear interest at a periodic fixed rate equal to LIBOR for the applicable interest period and currency denomination, plus an applicable margin. Alternatively, a fluctuating rate of interest equal to the highest of (1) JPMorgan Chase Bank’s publicly announced prime rate; (2) the Federal Funds effective rate plus 0.50% ; and (3) LIBOR for a one month interest period plus 1.00% , plus an applicable margin, may be used at our discretion. In each case, the applicable margin for advances bearing interest based on LIBOR is a percentage determined by quotations from Markit Group Ltd. for our 1-year credit default swap spread, interpolated for a period from the date of determination of such credit default swap spread in connection with a new interest period until the latest maturity date of this facility then in effect (but not less than a period of one year). The minimum applicable margin rate is 0.10% and the maximum applicable margin rate is 0.75% per annum. The applicable margin for advances bearing interest based on the prime rate is 1.00% below the applicable margin for LIBOR advances (but not less than 0.00% ). We are also able to request advances under this facility based on competitive bids. There were no amounts outstanding under this facility as of September 30, 2017 . Debt Covenants Our existing debt instruments and credit facilities subject us to certain financial covenants. As of September 30, 2017 and for all prior periods presented, we have satisfied these financial covenants. These covenants limit the amount of secured indebtedness that we may incur, and limit the amount of attributable debt in sale-leaseback transactions, to 10% of net tangible assets. As of September 30, 2017 , 10% of net tangible assets was equivalent to $2.345 billion; however, we have no covered sale-leaseback transactions or secured indebtedness outstanding. We do not expect these covenants to have a material impact on our financial condition or liquidity. Fair Value of Debt Based on the borrowing rates currently available to the Company for long-term debt with similar terms and maturities, the fair value of long-term debt, including current maturities, was approximately $ 19.746 and $ 17.134 billion as of September 30, 2017 and December 31, 2016 , respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of all of our debt instruments. |
LEGAL PROCEEDINGS AND CONTINGEN
LEGAL PROCEEDINGS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS AND CONTINGENCIES | LEGAL PROCEEDINGS AND CONTINGENCIES We are involved in a number of judicial proceedings and other matters arising from the conduct of our business activities. Although there can be no assurance as to the ultimate outcome, we have generally denied, or believe we have a meritorious defense and will deny, liability in all litigation pending against us, including (except as otherwise noted herein) the matters described below, and we intend to defend vigorously each case. We have accrued for legal claims when, and to the extent that, amounts associated with the claims become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for those claims. For those matters as to which we are not able to estimate a possible loss or range of loss, we are not able to determine whether the loss will have a material adverse effect on our business, financial condition or results of operations or liquidity. For matters in this category, we have indicated in the descriptions that follow the reasons that we are unable to estimate the possible loss or range of loss. Judicial Proceedings We are a defendant in a number of lawsuits filed in state and federal courts containing various class action allegations under state wage-and-hour laws. At this time, we do not believe that any loss associated with these matters would have a material adverse effect on our financial condition, results of operations or liquidity. UPS and our subsidiary The UPS Store, Inc. are defendants in Morgate v. The UPS Store, Inc. et al., an action in the Los Angeles Superior Court brought on behalf of a certified class of all franchisees who chose to rebrand their Mail Boxes Etc. franchises to The UPS Store in March 2003. Plaintiff alleges that UPS and The UPS Store, Inc. misrepresented and omitted facts to the class about the market tests that were conducted before offering the class the choice of whether to rebrand to The UPS Store. Defendants’ motion to decertify the class was granted in August 2017. The plaintiff has filed a notice of appeal, and further proceedings in the trial court are stayed pending resolution by the California Court of Appeal. There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result from the remaining aspects of this case, including: (1) we are vigorously defending ourselves and believe we have a number of meritorious legal defenses; (2) it remains uncertain what evidence of damages, if any, plaintiffs will be able to present; and (3) plaintiff’s notice of appeal is pending. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. In AFMS LLC v. UPS and FedEx Corporation, a lawsuit filed in federal court in the Central District of California in August 2010, the plaintiff asserts that UPS and FedEx violated U.S. antitrust law by conspiring to refuse to negotiate with third-party negotiators retained by shippers and by individually imposing policies that prevent shippers from using such negotiators. The Court granted summary judgment motions filed by UPS and FedEx, entered judgment in favor of UPS and FedEx, and dismissed the case. Plaintiff appealed to the Court of Appeals for the Ninth Circuit. In August 2017, the Ninth Circuit affirmed the District Court's order dismissing the case. AFMS filed a petition for rehearing in September 2017, which was denied. The Antitrust Division of the U.S. Department of Justice (“DOJ”) opened a civil investigation of our policies and practices for dealing with third-party negotiators. We have cooperated with this investigation, although the DOJ has not communicated with us for over five years. We deny any liability with respect to these matters and intend to vigorously defend ourselves in the event that any of these proceedings were to continue. There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result from these matters including: (1) the DOJ investigation may be pending; and (2) AFMS may seek discretionary review by the U.S. Supreme Court. If AFMS does not seek discretionary review or it is denied, its case is concluded. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from these matters or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. We are a defendant in Ryan Wright and Julia Zislin v. United Parcel Service Canada Ltd., an action brought on behalf of a certified class of customers in the Superior Court of Justice in Ontario, Canada. Plaintiffs filed suit in February 2007, alleging inadequate disclosure concerning the existence and cost of brokerage services provided by us under applicable provincial consumer protection legislation and infringement of interest restriction provisions under the Criminal Code of Canada. Partial summary judgment was granted to us and the plaintiffs by the Ontario motions court in August 2011, when it dismissed plaintiffs' complaint under the Criminal Code and granted plaintiffs' complaint of inadequate disclosure. We appealed the Court's decision pertaining to inadequate disclosure in September 2011. In October 2017, we reached an agreement in principle to resolve the case for an immaterial amount. Final resolution of this matter is subject to the negotiation, execution and delivery of a settlement agreement and court approval. In February 2015, the State and City of New York filed suit against UPS in the U.S. District Court for the Southern District of New York, arising from alleged shipments of cigarettes to New York State and City residents. The complaint asserted claims under various federal and state laws. The complaint also included a claim that UPS violated the Assurance of Discontinuance it entered into with the New York Attorney General in 2005 concerning cigarette deliveries. On March 24, 2017, the District Court issued an opinion and order finding liability against UPS on each of the plaintiffs’ causes of action. On May 25, 2017, the District Court issued a corrected opinion and order on liability and an order awarding the plaintiffs damages of $ 9.4 million and penalties of $ 237.6 million. An accrual of $ 9.4 million with respect to the damages awarded by the court is included on our consolidated balance sheet at September 30, 2017 . We estimate that the amount of losses could be up to $ 247 million, plus interest; however, the amount of penalties ultimately payable, if any, is subject to a variety of complex factors and potential outcomes that remain to be determined in future legal proceedings. Consequently, we are unable to reasonably estimate a likely amount of loss within that range. We strongly disagree with the District Court’s analysis and conclusions, and have appealed to the United States Court of Appeals for the Second Circuit. UPS filed its opening brief with the Appellate Court in October 2017. Other Matters In October 2015, the DOJ informed us of an industry-wide inquiry into the transportation of mail under the United States Postal Service ("USPS") International Commercial Air contracts. In October 2017, we received a Civil Investigative Demand seeking certain information relating to our contracts. The DOJ has indicated it is investigating potential violations of the False Claims Act or other statutes. We are cooperating with the DOJ. The Company is unable to predict what action, if any, might be taken in the future by any government authorities as a result of their investigation. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. In August 2016, Spain’s National Markets and Competition Commission (“CNMC”) opened an investigation into 10 companies in the commercial delivery and parcel industry, including UPS, related to alleged nonaggression agreements to allocate customers. In May 2017, UPS received a Statement of Objections issued by the CNMC. In July 2017, UPS received a Decision Proposal from the CNMC. These documents do not prejudge the final decision (which is subject to appeal) as to facts or law. There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result from this matter, including: (1) we are vigorously defending ourselves and believe that we have a number of meritorious legal defenses; and (2) there are unresolved questions of law and fact that could be important to the ultimate resolution of this matter. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. We are a defendant in various other lawsuits that arose in the normal course of business. We do not believe that the eventual resolution of these other lawsuits (either individually or in the aggregate), including any reasonably possible losses in excess of current accruals, will have a material adverse effect on our financial condition, results of operations or liquidity. |
SHAREOWNERS' EQUITY
SHAREOWNERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
SHAREOWNERS' EQUITY | SHAREOWNERS' EQUITY Capital Stock, Additional Paid-In Capital and Retained Earnings We maintain two classes of common stock, which are distinguished from each other primarily by their respective voting rights. Class A shares 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, and these shares are fully convertible on a one-to-one basis into class B shares at any time. Class B shares are publicly traded on the New York Stock Exchange under the symbol “UPS”. Class A and B shares both have a $0.01 par value, and as of September 30, 2017 , 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, with a $0.01 par value, authorized to be issued. As of September 30, 2017 , no preferred shares had been issued. The following is a rollforward of our common stock, additional paid-in capital and retained earnings accounts for the nine months ended September 30, 2017 and 2016 (in millions, except per share amounts): 2017 2016 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 180 $ 2 194 $ 2 Common stock purchases (3 ) — (4 ) — Stock award plans 4 — 5 — Common stock issuances 2 — 2 — Conversions of class A to class B common stock (7 ) — (12 ) — Class A shares issued at end of period 176 $ 2 185 $ 2 Class B Common Stock Balance at beginning of period 689 $ 7 693 $ 7 Common stock purchases (9 ) — (16 ) — Conversions of class A to class B common stock 7 — 12 — Class B shares issued at end of period 687 $ 7 689 $ 7 Additional Paid-In Capital Balance at beginning of period $ — $ — Stock award plans 283 423 Common stock purchases (604 ) (811 ) Common stock issuances 268 233 Option premiums received (paid) 53 155 Balance at end of period $ — $ — Retained Earnings Balance at beginning of period $ 4,879 $ 6,001 Net income attributable to common shareowners 3,806 3,670 Dividends ($2.49 and $2.34 per share) (2,213 ) (2,093 ) Common stock purchases (748 ) (1,193 ) Balance at end of period $ 5,724 $ 6,385 We repurchased 12.3 million shares of class A and class B common stock for $1.352 billion during the nine months ended September 30, 2017 , and 19.3 million shares for $2.004 billion during the nine months ended September 30, 2016 . In May 2016, the Board of Directors approved a share repurchase authorization of $8.0 billion, which has no expiration date. As of September 30, 2017 , we had $4.803 billion of this share repurchase authorization available. From time to time, we enter into share repurchase programs with large financial institutions to assist in our buyback of company stock. These programs allow us to repurchase our shares at a price below the weighted average UPS share price for a given period. During the third quarter of 2017, we did not enter into any accelerated share repurchase transactions. 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 pre-determined amount of cash or stock. Upon expiration of each agreement, if the closing market price of our common stock is above the pre-determined 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 $53 and $155 million during the first nine months of 2017 and 2016 , respectively, related to entering into and settling capped call options for the purchase of class B shares. As of September 30, 2017 , we had outstanding options for the purchase of 0.5 million shares with a weighted average strike price of $97.57 per share that will settle in the fourth quarter of 2017. Accumulated Other Comprehensive Income (Loss) We recognize activity in Accumulated Other Comprehensive Income (Loss) ("AOCI") for unrealized holding gains and losses on available-for-sale securities, foreign currency translation adjustments, 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 nine months ended September 30, 2017 and 2016 is as follows (in millions): 2017 2016 Foreign currency translation gain (loss): Balance at beginning of period $ (1,016 ) $ (897 ) Translation adjustment (net of tax effect of $(146) and $24) 86 (12 ) Balance at end of period (930 ) (909 ) Unrealized gain (loss) on marketable securities, net of tax: Balance at beginning of period (1 ) (1 ) Current period changes in fair value (net of tax effect of $1 and $3) 2 4 Reclassification to earnings (no tax impact in either period) (1 ) — Balance at end of period — 3 Unrealized gain (loss) on cash flow hedges, net of tax: Balance at beginning of period (45 ) 67 Current period changes in fair value (net of tax effect of $(162) and $(15)) (269 ) (24 ) Reclassification to earnings (net of tax effect of $(6) and $(96)) (9 ) (159 ) Balance at end of period (323 ) (116 ) Unrecognized pension and postretirement benefit costs, net of tax: Balance at beginning of period (3,421 ) (2,709 ) Remeasurement of plan assets and liabilities (net of tax effect of $214 and $0) (1) 356 — Reclassification to earnings (net of tax effect of $56 and $48) 94 80 Balance at end of period (2,971 ) (2,629 ) Accumulated other comprehensive income (loss) at end of period $ (4,224 ) $ (3,651 ) (1) See note 6 for further information about plan curtailments resulting in remeasurement of plan assets and liabilities. Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and nine months ended September 30, 2017 and 2016 is as follows (in millions): Three Months Ended September 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2017 2016 Unrealized gain (loss) on marketable securities: Realized gain on sale of securities $ 1 $ — Investment income Income tax expense — — Income tax expense Impact on net income 1 — Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (6 ) (7 ) Interest expense Foreign exchange contracts 3 83 Revenue Income tax (expense) benefit 1 (29 ) Income tax expense Impact on net income (2 ) 47 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (50 ) (42 ) Compensation and benefits Income tax benefit 19 15 Income tax expense Impact on net income (31 ) (27 ) Net income Total amount reclassified for the period $ (32 ) $ 20 Net income Nine Months Ended September 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2017 2016 Unrealized gain (loss) on marketable securities: Realized gain on sale of securities $ 1 $ — Investment income Income tax expense — — Income tax expense Impact on net income 1 — Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (20 ) (19 ) Interest expense Foreign exchange contracts 35 274 Revenue Income tax expense (6 ) (96 ) Income tax expense Impact on net income 9 159 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (150 ) (128 ) Compensation and benefits Income tax benefit 56 48 Income tax expense Impact on net income (94 ) (80 ) Net income Total amount reclassified for the period $ (84 ) $ 79 Net income Deferred Compensation Obligations and Treasury Stock Activity in the deferred compensation program for the nine months ended September 30, 2017 and 2016 is as follows (in millions): 2017 2016 Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 45 $ 51 Reinvested dividends 2 2 Benefit payments (10 ) (9 ) Balance at end of period $ 37 $ 44 Treasury Stock: Balance at beginning of period (1 ) $ (45 ) (1 ) $ (51 ) Reinvested dividends — (2 ) — (2 ) Benefit payments — 10 — 9 Balance at end of period (1 ) $ (37 ) (1 ) $ (44 ) Noncontrolling Interests: We have noncontrolling interests in certain consolidated subsidiaries in our International Package and Supply Chain & Freight segments. Noncontrolling interests increased $6 and $3 million for the nine months ended September 30, 2017 and 2016 , respectively. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We report our operations in three segments: U.S. Domestic Package operations, International Package operations and Supply Chain & Freight operations. Package operations represent our most significant business and are broken down into regional operations around the world. Regional operations managers are responsible for both domestic and export products within their geographic area. U.S. Domestic Package Domestic Package operations include the time-definite delivery of letters, documents and packages throughout the United States. International Package International Package operations include delivery to more than 220 countries and territories worldwide, including shipments wholly outside the United States, as well as shipments with either origin or destination outside the United States. Our International Package reporting segment includes the operations of our Europe, Asia, Americas and ISMEA (Indian Subcontinent, Middle East and Africa) operating segments. Supply Chain & Freight Supply Chain & Freight includes our Forwarding, Logistics, Coyote, Marken, UPS Mail Innovations, UPS Freight and other aggregated business units. Our Forwarding and Logistics units provide services in more than 195 countries and territories worldwide and include international air and ocean freight forwarding, customs brokerage, truckload freight brokerage, distribution and post-sales services, mail and consulting services. UPS Freight offers a variety of less-than-truckload ("LTL") and truckload ("TL") services to customers in North America. Coyote offers truckload brokerage services primarily in the U.S. Marken is a global provider of supply chain solutions to the life sciences industry. Other aggregated business units within this segment include The UPS Store and UPS Capital. In evaluating financial performance, we focus on operating profit as a segment’s measure of profit or loss. Operating profit is before investment income and other, interest expense and income taxes. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies included in the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2016 , with certain expenses allocated between the segments using activity-based costing methods. Segment information for the three and nine months ended September 30, 2017 and 2016 is as follows (in millions): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Revenue: U.S. Domestic Package $ 9,649 $ 9,289 $ 28,929 $ 27,388 International Package 3,364 3,024 9,585 9,015 Supply Chain & Freight 2,965 2,615 8,529 7,572 Consolidated $ 15,978 $ 14,928 $ 47,043 $ 43,975 Operating Profit: U.S. Domestic Package $ 1,182 $ 1,252 $ 3,653 $ 3,587 International Package 627 576 1,739 1,763 Supply Chain & Freight 226 206 643 545 Consolidated $ 2,035 $ 2,034 $ 6,035 $ 5,895 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2017 and 2016 (in millions, except per share amounts): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Numerator: Net income attributable to common shareowners $ 1,264 $ 1,270 $ 3,806 $ 3,670 Denominator: Weighted average shares 864 876 867 880 Deferred compensation obligations 1 1 1 1 Vested portion of restricted units 4 3 4 4 Denominator for basic earnings per share 869 880 872 885 Effect of dilutive securities: Restricted units 4 4 3 3 Stock options 1 1 1 1 Denominator for diluted earnings per share 874 885 876 889 Basic earnings per share $ 1.45 $ 1.44 $ 4.36 $ 4.15 Diluted earnings per share $ 1.45 $ 1.44 $ 4.34 $ 4.13 There were no antidilutive securities for the three months ended September 30, 2017. Diluted earnings per share for the three months ended September 30, 2016 excluded the effect of 0.1 million shares of common stock ( 0.2 million for the nine months ended September 30, 2017 and 2016 ), that may be issued upon the exercise of employee stock options because such effect would be antidilutive. |
DERIVATIVE INSTRUMENTS AND RISK
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT | DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT Risk Management Policies We are exposed to market risk, primarily related to foreign exchange rates, commodity prices and interest rates. These exposures are actively monitored by management. To manage the volatility relating to certain of these exposures, we enter into a variety of derivative financial instruments. Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency rates, commodity prices and interest rates. It is our policy and practice to use derivative financial instruments only to the extent necessary to manage exposures. As we use price sensitive instruments to hedge a certain portion of our existing and anticipated transactions, we expect that any loss in value for those instruments generally would be offset by increases in the value of those hedged transactions. We do not hold or issue derivative financial instruments for trading or speculative purposes. Credit Risk Management The forward contracts, swaps and options discussed below contain an element of risk that the counterparties may be unable to meet the terms of the agreements; however, we minimize such risk exposures for these instruments by limiting the counterparties to banks and financial institutions that meet established credit guidelines, and by monitoring counterparty credit risk to prevent concentrations of credit risk with any single counterparty. We have agreements with all of our active counterparties (covering the majority of our derivative positions) containing early termination rights and/or zero threshold bilateral collateral provisions whereby cash is required based on the net fair value of derivatives associated with those counterparties. Events such as a counterparty credit rating downgrade (depending on the ultimate rating level) could also allow us to take additional protective measures such as the early termination of trades. At September 30, 2017 and December 31, 2016 , we held cash collateral of $ 48 and $ 575 million, respectively, under these agreements; this collateral is included in "Cash and cash equivalents" on the consolidated balance sheets and its use by UPS is not restricted. In connection with the agreements described above, we could be required to provide additional collateral or terminate transactions with certain counterparties in the event of a downgrade of our credit rating. The amount of collateral required would be determined by the net fair value of the associated derivatives with each counterparty. At September 30, 2017 and December 31, 2016 , $104 million and $0 , respectively, of additional collateral was required to be posted with our counterparties. The aggregate fair value of instruments not covered by the zero threshold bilateral collateral provisions were in a net liability position of $47 and $10 million at September 30, 2017 and December 31, 2016 , respectively. We have not historically incurred, and do not expect to incur in the future, any losses as a result of counterparty default. Accounting Policy for Derivative Instruments We recognize all derivative instruments as assets or liabilities in the consolidated balance sheets at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the derivative, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge or a hedge of a net investment in a foreign operation. A cash flow hedge refers to hedging the exposure to variability in expected future cash flows that is attributable to a particular risk. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of AOCI, and reclassified into earnings in the same period during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, or hedge components excluded from the assessment of effectiveness, are recognized in the statements of consolidated income during the current period. A fair value hedge refers to hedging the exposure to changes in the fair value of an existing asset or liability on the consolidated balance sheets that is attributable to a particular risk. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument is recognized in the statements of consolidated income during the current period, as well as the offsetting gain or loss on the hedged item. A net investment hedge refers to the use of cross currency swaps, forward contracts or foreign currency denominated debt to hedge portions of our net investments in foreign operations. For hedges that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in the foreign currency translation adjustment within AOCI. The remainder of the change in value of such instruments is recorded in earnings. Types of Hedges Commodity Risk Management Currently, the fuel surcharges that we apply to our domestic and international package and LTL services are the primary means of reducing the risk of adverse fuel price changes on our business. We periodically enter into option contracts on energy commodity products to manage the price risk associated with forecasted transactions involving refined fuels, principally jet-A, diesel and unleaded gasoline. The objective of the hedges is to reduce the variability of cash flows, due to changing fuel prices, associated with the forecasted transactions involving those products. We normally designate and account for these contracts as cash flow hedges of the underlying forecasted transactions involving these fuel products and, therefore, the resulting gains and losses from these hedges are recognized as a component of fuel expense or revenue when the underlying transactions occur. Foreign Currency Risk Management To protect against the reduction in value of forecasted foreign currency cash flows from our international package business, we maintain a foreign currency cash flow hedging program. Our most significant foreign currency exposures relate to the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. We hedge portions of our forecasted revenue denominated in foreign currencies with option and forward contracts. We normally designate and account for these contracts as cash flow hedges of anticipated foreign currency denominated revenue and, therefore, the resulting gains and losses from these hedges are recognized as a component of international package revenue when the underlying sales transactions occur. We also hedge portions of our anticipated cash settlements of intercompany transactions and interest payments on certain debt subject to foreign currency remeasurement using foreign currency forward contracts. We normally designate and account for these contracts as cash flow hedges of forecasted foreign currency denominated transactions; therefore, the resulting gains and losses from these hedges are recognized as a component of investment income and other when the underlying transactions are subject to currency remeasurement. We hedge our net investment in certain foreign operations with foreign currency denominated debt instruments. The use of foreign denominated debt as the hedging instrument allows the debt to be remeasured to foreign currency translation adjustment within AOCI to offset the translation risk from those investments. Any ineffective portion of net investment hedging is recognized as a component of investment income and other. Balances in the cumulative translation adjustment accounts remain until the sale or complete liquidation of the foreign entity. Interest Rate Risk Management Our indebtedness under our various financing arrangements creates interest rate risk. We use a combination of derivative instruments as part of our program to manage the fixed and floating interest rate mix of our total debt portfolio and related overall cost of borrowing. The notional amount, interest payment date and maturity date of the swaps match the terms of the associated debt being hedged. Interest rate swaps allow us to maintain a target range of floating rate debt within our capital structure. We have designated and account for the majority of our interest rate swaps that convert fixed rate interest payments into floating rate interest payments as hedges of the fair value of the associated debt instruments. Therefore, the gains and losses resulting from fair value adjustments to the interest rate swaps and fair value adjustments to the associated debt instruments are recorded to interest expense in the period in which the gains and losses occur. We have designated and account for interest rate swaps that convert floating rate interest payments into fixed rate interest payments as cash flow hedges of the forecasted payment obligations. The gains and losses resulting from fair value adjustments to the interest rate swaps are recorded to AOCI. We periodically hedge the forecasted fixed-coupon interest payments associated with anticipated debt offerings by using forward starting interest rate swaps, interest rate locks or similar derivatives. These agreements effectively lock a portion of our interest rate exposure between the time the agreement is entered into and the date when the debt offering is completed, thereby mitigating the impact of interest rate changes on future interest expense. These derivatives are settled commensurate with the issuance of the debt, and any gain or loss upon settlement is amortized as an adjustment to the effective interest yield on the debt. Outstanding Positions As of September 30, 2017 and December 31, 2016 , the notional amounts of our outstanding derivative positions were as follows (in millions): September 30, 2017 December 31, 2016 Currency hedges: Euro EUR 4,141 EUR 3,702 British Pound Sterling GBP 1,758 GBP 1,380 Canadian Dollar CAD 1,244 CAD 1,053 Indian Rupee INR — INR 76 Mexican Peso MXN 166 MXN — Japanese Yen JPY 3,363 JPY 3,972 Singapore Dollar SGD 15 SGD 32 Interest rate hedges: Fixed to Floating Interest Rate Swaps $ 5,799 $ 5,799 Floating to Fixed Interest Rate Swaps $ 778 $ 778 Investment market price hedges: Marketable Securities EUR 204 EUR 76 As of September 30, 2017 , we had no outstanding commodity hedge positions. Balance Sheet Recognition and Fair Value Measurements The following table indicates the location on the consolidated balance sheets in which our derivative assets and liabilities have been recognized, the fair value hierarchy level applicable to each derivative type and the related fair values of those derivatives (in millions). The table is segregated between those derivative instruments that qualify and are designated as hedging instruments and those that are not, as well as by type of contract and whether the derivative is in an asset or liability position. We have master netting arrangements with substantially all of our counterparties giving us the right of offset for our derivative positions. However, we have not elected to offset the fair value positions of our derivative contracts recorded on our consolidated balance sheets. The columns labeled "Net Amounts if Right of Offset had been Applied" indicate the potential net fair value positions by type of contract and location on the consolidated balance sheets had we elected to apply the right of offset. Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of Offset had been Applied Asset Derivatives Balance Sheet Location September 30, December 31, September 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current assets Level 2 $ 21 $ 176 $ 15 $ 176 Interest rate contracts Other current assets Level 2 4 — 4 — Foreign exchange contracts Other non-current assets Level 2 3 131 — 126 Interest rate contracts Other non-current assets Level 2 88 137 75 119 Derivatives not designated as hedges: Foreign exchange contracts Other current assets Level 2 — 1 — 1 Interest rate contracts Other non-current assets Level 2 34 42 33 40 Total Asset Derivatives $ 150 $ 487 $ 127 $ 462 Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of Offset had been Applied Liability Derivatives Balance Sheet Location September 30, December 31, September 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current liabilities Level 2 $ 62 $ — $ 56 $ — Interest rate contracts Other current liabilities Level 2 — 1 — 1 Foreign exchange contracts Other non-current liabilities Level 2 155 6 152 1 Interest rate contracts Other non-current liabilities Level 2 18 21 5 3 Derivatives not designated as hedges: Foreign exchange contracts Other current liabilities Level 2 — — — — Investment market price contracts Other current liabilities Level 2 47 10 47 10 Interest rate contracts Other non-current liabilities Level 2 5 7 4 5 Total Liability Derivatives $ 287 $ 45 $ 264 $ 20 Our foreign currency, interest rate and investment market price derivatives are largely comprised of over-the-counter derivatives, which are primarily valued using pricing models that rely on market observable inputs such as yield curves, currency exchange rates and investment forward prices; therefore, these derivatives are classified as Level 2. Income Statement and AOCI Recognition The following table indicates the amount of gains and losses that have been recognized in AOCI for the three and nine months ended September 30, 2017 and 2016 for those derivatives designated as cash flow hedges (in millions): Three Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2017 2016 Interest rate contracts $ — $ — Foreign exchange contracts (141 ) (27 ) Total $ (141 ) $ (27 ) Nine Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2017 2016 Interest rate contracts $ — $ (3 ) Foreign exchange contracts (431 ) (36 ) Total $ (431 ) $ (39 ) As of September 30, 2017 , there are $ 108 million of pre-tax losses related to cash flow hedges that are currently deferred in AOCI that are expected to be reclassified to income over the 12 month period ended September 30, 2018 . The actual amounts that will be reclassified to income over the next 12 months will vary from this amount as a result of changes in market conditions. The maximum term over which we are hedging exposures to the variability of cash flow is approximately 15 years. The amount of ineffectiveness recognized in income on derivative instruments designated in cash flow hedging relationships was immaterial for the three and nine months ended September 30, 2017 and 2016 . The following table indicates the amount of gains and losses that have been recognized in AOCI within foreign currency translation adjustment for the three and nine months ended September 30, 2017 and 2016 for those instruments designated as net investment hedges (in millions): Three Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2017 2016 Foreign denominated debt $ (142 ) $ (7 ) Total $ (142 ) $ (7 ) Nine Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2017 2016 Foreign denominated debt $ (389 ) (30 ) Total $ (389 ) $ (30 ) The amount of ineffectiveness recognized in income on non-derivative instruments designated in net investment hedging relationships was immaterial for the three and nine months ended September 30, 2017 and 2016 . The following table indicates the amount and location in the statements of consolidated income in which derivative gains and losses, as well as the associated gains and losses on the underlying exposure, have been recognized for those derivatives designated as fair value hedges for the three and nine months ended September 30, 2017 and 2016 (in millions): Derivative Instruments in Fair Value Hedging Relationships Location of Gain (Loss) Recognized in Income Derivative Amount of Gain (Loss) Recognized in Income Hedged Items in Fair Value Hedging Relationships Location of Gain (Loss) Recognized In Income Hedged Items Amount of Gain (Loss) Recognized in Income 2017 2016 2017 2016 Three Months Ended September 30: Interest rate contracts Interest Expense $ (18 ) $ (59 ) Fixed-Rate Debt Interest Expense $ 18 $ 59 Nine Months Ended September 30: Interest rate contracts Interest Expense $ (41 ) $ 56 Fixed-Rate Debt Interest Expense $ 41 $ (56 ) Additionally, we maintain some interest rate swaps, foreign currency forwards and investment market price forward contracts that are not designated as hedges. These interest rate swap contracts are intended to provide an economic hedge of a portfolio of interest bearing receivables. These foreign exchange forward contracts are intended to provide an economic offset to foreign currency remeasurement and settlement risk for certain assets and liabilities on our consolidated balance sheets. These investment market price forward contracts are intended to provide an economic offset to fair value fluctuations of certain investments in marketable securities. We also periodically terminate interest rate swaps and foreign currency options by entering into offsetting swap and foreign currency positions with different counterparties. As part of this process, we de-designate our original swap and foreign currency contracts. These transactions provide an economic offset that effectively eliminates the effects of changes in market valuation. The following is a summary of the amounts recorded in the statements of consolidated income related to fair value changes and settlements of these interest rate swaps, foreign currency forward and investment market price forward contracts not designated as hedges for the three and nine months ended September 30, 2017 and 2016 (in millions): Derivative Instruments Not Designated in Hedging Relationships Location of Gain (Loss) Recognized in Income Amount of Gain (Loss) Recognized in Income 2017 2016 Three Months Ended September 30: Interest rate contracts Interest expense $ (2 ) $ (2 ) Foreign exchange contracts Investment income and other 14 (11 ) Investment market price contracts Investment income and other (45 ) (28 ) $ (33 ) $ (41 ) Nine Months Ended September 30: Interest rate contracts Interest expense $ (6 ) $ (6 ) Foreign exchange contracts Investment income and other 34 $ (117 ) Investment market price contracts Investment income and other (37 ) 152 $ (9 ) $ 29 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate was 35.0% in the third quarter of 2017 and 2016 ( 33.9% year-to-date in 2017 compared to 35.1% in the same period of 2016). In the first quarter of 2017, we adopted a new accounting standard that requires the recognition of excess tax benefits related to share-based compensation in income tax expense (see note 2 ), which resulted in discrete tax benefits for the nine months ended September 30, 2017 of $ 62 million and reduced our year-to-date effective tax rate by 1.1% . There was no significant impact related to the adoption of the new accounting standard in the third quarter of 2017. As discussed in our Annual Report on Form 10-K for the year ended December 31, 2016 , we have recognized liabilities for uncertain tax positions. We reevaluate these uncertain tax positions on a quarterly basis. A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months. However, an estimate of the range of reasonably possible outcomes cannot be made. Items that may cause changes to unrecognized tax benefits include the timing of interest deductions and the allocation of income and expense between tax jurisdictions. These changes could result from the settlement of ongoing litigation, the completion of ongoing examinations, the expiration of the statute of limitations or other unforeseen circumstances. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation In our opinion, the accompanying interim, unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of September 30, 2017 , our results of operations for the three and nine months ended September 30, 2017 and 2016 , and cash flows for the nine months ended September 30, 2017 and 2016 . The results reported in these consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any other period or the entire year. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 . For interim consolidated financial statement purposes, we provide for accruals under our various employee benefit plans for each three month period based on one quarter of the estimated annual expense. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, accounts receivable, finance receivables and accounts payable approximate fair value as of September 30, 2017 . The fair values of our investment securities are disclosed in note 4 , our recognized multiemployer pension withdrawal liabilities in note 6 , our short and long-term debt in note 8 and our derivative instruments in note 13 . We utilized Level 1 inputs in the fair value hierarchy of valuation techniques to determine the fair value of our cash and cash equivalents, and Level 2 inputs to determine the fair value of our accounts receivable, finance receivables and accounts payable. |
Self Insurance Accrual | Self-Insurance Accruals We self-insure costs associated with workers’ compensation claims, automotive liability, health and welfare and general business liabilities, up to certain limits. Insurance reserves are established for estimates of the loss that we will ultimately incur on reported claims, as well as estimates of claims that have been incurred but not yet reported. Recorded balances are based on reserve levels, which incorporate historical loss experience and judgments about the present and expected levels of cost per claim. Trends in actual experience are a significant factor in the determination of such reserves. Workers’ compensation, automobile liability and general liability insurance claims may take several years to completely settle. Consequently, actuarial estimates are required to project the ultimate cost that will be incurred to fully resolve the claims. A number of factors can affect the actual cost of a claim, including the length of time the claim remains open, trends in healthcare costs and the results of related litigation. Furthermore, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. Changes in state legislation with respect to workers' compensation can affect the adequacy of our self-insurance accruals. All of these factors can result in revisions to prior actuarial projections and produce a material difference between estimated and actual operating results. Prior to 2017, outside actuarial studies were performed semi-annually and we used the studies to estimate the liability in intervening quarters. Beginning in 2017, outside actuarial studies are now performed quarterly as we believe this provides us with better quarterly estimates of our outstanding workers' compensation liability. We sponsor a number of health and welfare insurance plans for our employees. These liabilities and related expenses are based on estimates of the number of employees and eligible dependents covered under the plans, anticipated medical usage by participants and overall trends in medical costs and inflation. |
Accounting Estimates | Accounting Estimates The preparation of the accompanying interim, unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best information and actual results could differ materially from those estimates. |
Change in Accounting Methodology | The preparation of the accompanying interim, unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best information and actual results could differ materially from those estimates. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In March 2016, the Financial Accounting Standards Board ("FASB") issued an accounting standards update that simplified the income tax accounting and cash flow presentation related to share-based compensation by requiring the recognition of all excess tax benefits and deficiencies directly on the income statement and classification as cash flows from operating activities on the statements of consolidated cash flows. This update also made several changes to the accounting for forfeitures and employee tax withholding on share-based compensation. This new guidance became effective for us in the first quarter of 2017 and we adopted the statements of consolidated cash flows presentation on a prospective basis. The impact to income tax expense in the statements of consolidated income was a benefit of $62 million for the nine months ended September 30, 2017 . There was no significant impact related to the adoption of the new accounting standard in the third quarter of 2017. Additionally, we have elected to continue estimating forfeitures expected to occur to determine the amount of compensation cost to be recognized each period. Other accounting pronouncements adopted during the periods covered by the consolidated financial statements did not have a material impact on our consolidated financial position, results of operations or cash flows. Accounting Standards Issued But Not Yet Effective In August 2017, the FASB issued an accounting standards update to enhance recognition of the economic results of hedging activities in the financial statements. In addition, this update makes certain targeted improvements to simplify the application of the hedge accounting guidance and increase transparency regarding the scope and results of its hedging activities. The guidance will generally be applied prospectively and becomes effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued an accounting standards update to provide clarity and reduce complexity on when to apply modification accounting to existing share-based payment awards. The guidance will generally be applied prospectively and becomes effective for us in the first quarter of 2018, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In March 2017, the FASB issued an accounting standards update to require the premium on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount would not be impacted by the proposed update. Under current generally accepted accounting principles (“GAAP”), premiums on callable debt securities are generally amortized over the contractual life of the security. Only in cases when an entity has a large number of similar securities is it allowed to consider estimates of principal prepayments. Amortization of the premium over the contractual life of the instrument can result in losses being recorded for the unamortized premium if the issuer exercises the call feature prior to maturity. The standard will be effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In March 2017, the FASB issued an accounting standards update to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The update requires employers to report the current service cost component in the same line item as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented separately from service cost and outside of income from operations. In accordance with the update, only the service cost component will be eligible for capitalization. The guidance in this update should be applied retrospectively for the presentation of service cost and other components of net benefit cost, and prospectively for the capitalization of the service cost component in assets, and becomes effective for us in the first quarter of 2018. As a result of this update, the net amount of interest cost, prior service cost and expected return on plan assets will be presented as other income. For the three months ended September 30, 2017 and 2016, non-service cost components amounted to a $216 and $105 million benefit ( $575 and $313 million for the nine months ended September 30, 2017 and 2016), respectively, which was recognized in "Compensation and benefits" on the statements of consolidated income. After adoption, the non-service cost components will be recognized in "Other Income and (Expense)" on the statements of consolidated income. In January 2017, the FASB issued an accounting standards update to simplify the accounting for goodwill impairment. The update removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The standard will be effective for us in the first quarter of 2020, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In November 2016, the FASB issued an accounting standards update that is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows. The update should be applied retrospectively and becomes effective for us in the first quarter of 2018, but early adoption is permitted. As a result of this update, restricted cash will be included within cash and cash equivalents on our statements of consolidated cash flows. As of September 30, 2017 and December 31, 2016, we classified $123 and $310 million in restricted cash on our consolidated balance sheets in "non-current investments and restricted cash", respectively. In August 2016, the FASB issued an accounting standards update that addresses the classification and presentation of specific cash flow issues that currently result in diverse practices. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance will generally be applied retrospectively and becomes effective for us in the first quarter of 2018, but early adoption is permitted. We are currently evaluating the impact of this standard on our statements of consolidated cash flows, but do not expect this standard to have a material impact. In February 2016, the FASB issued an accounting standards update that requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases with terms beyond twelve months. Although the distinction between operating and finance leases will continue to exist under the new standard, the recognition and measurement of expenses and cash flows will not change significantly from the current treatment. This new guidance requires modified retrospective application and becomes effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption on our consolidated financial position, results of operations, cash flows and related disclosures, as well as the impact of adoption on policies, practices and systems. As of December 31, 2016, we had $ 1.470 billion of future minimum operating lease commitments that are not currently recognized on our consolidated balance sheets. Therefore, we expect material changes to our consolidated balance sheets. In January 2016, the FASB issued an accounting standards update which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The amendment will be effective for us beginning the first quarter of 2018. At this time, we do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued an accounting standards update that changes the revenue recognition for companies that enter into contracts with customers to transfer goods or services. The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner depicting the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has also issued a number of updates to this standard. We are planning to adopt the standard on January 1, 2018. Companies may use either a full retrospective or a modified retrospective approach to adopt this standard. We expect to adopt the standard using a full retrospective approach. We are currently evaluating this standard and the related updates, including the impact of adoption on policies, practices and systems. At this stage in our evaluation, we have determined that revenue recognition will be accelerated for the transportation businesses as the standard requires revenue to be recognized as control is transferred to the customer over time rather than upon delivery. We are currently quantifying the impact of this change to the statements of consolidated income but do not expect it to be material. The standard also requires us to evaluate whether our businesses promise to transfer services to the customer itself (as a principal) or to arrange for services to be provided by another party (as an agent). To make that determination, the standard uses a control model rather than the risks-and-rewards model in current GAAP. Based on our evaluation of the control model, we determined that certain Supply Chain & Freight businesses act as the principal rather than the agent within their revenue arrangements. This change will require the affected businesses to report transportation revenue gross of associated purchase transportation costs rather than net of such amounts within the statements of consolidated income. We expect that this change will result in an approximately $720 million reclassification from operating expenses to revenue on the statement of consolidated income for the period ended December 31, 2016. This amount may change as we continue to evaluate other businesses. In addition to completing our review of contracts and quantifying the impacts on the consolidated financial statements, we are currently analyzing our internal control over financial reporting framework to determine if controls should be added or modified as a result of adopting this standard. In addition, we are currently reviewing the impacts of this standard on our footnote disclosures for periods subsequent to January 1, 2018. At this stage in our review of the disclosure requirements, we expect that the adoption of this standard will result in several additional disclosures, including but not limited to additional information around our performance obligations, the timing of revenue recognition, remaining performance obligations at period end, contract assets and liabilities, and significant judgments made that impact the amount and timing of revenue from our contracts with customers. Other accounting pronouncements issued, but not effective until after September 30, 2017 , are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Fair Value of Employee Stock Options Granted and Determined by Black-Scholes Valuation Model Assumptions | The fair value of each option grant is estimated using the Black-Scholes option pricing model. The weighted-average assumptions used and the calculated weighted-average fair values of options granted in 2017 and 2016 are as follows: 2017 2016 Expected dividend yield 2.89 % 2.95 % Risk-free interest rate 2.15 % 1.62 % Expected life (in years) 7.5 7.5 Expected volatility 17.81 % 22.40 % Weighted-average fair value of options granted $ 14.70 $ 16.46 The weighted-average assumptions used and the calculated weighted-average fair values of the RTSR portion of the LTIP awards granted in 2017 and 2016 are as follows: 2017 2016 Risk-free interest rate 1.46 % 1.00 % Expected volatility 16.59 % 16.46 % Weighted-average fair value of units granted $ 119.29 $ 136.18 Share payout 113.55 % 129.08 % |
INVESTMENTS AND RESTRICTED CA23
INVESTMENTS AND RESTRICTED CASH (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Marketable Securities [Abstract] | |
Available-for-sale Securities | The following is a summary of marketable securities classified as trading and available-for-sale as of September 30, 2017 and December 31, 2016 (in millions): Cost Unrealized Gains Unrealized Losses Estimated Fair Value September 30, 2017: Current trading marketable securities: Corporate debt securities $ 159 $ — $ — $ 159 Carbon credit investments (1) 241 46 — 287 Total trading marketable securities $ 400 $ 46 $ — $ 446 Current available-for-sale securities: U.S. government and agency debt securities $ 286 $ — $ (1 ) $ 285 Mortgage and asset-backed debt securities 90 — — 90 Corporate debt securities 210 1 — 211 U.S. state and local municipal debt securities — — — — Equity securities 2 — — 2 Non-U.S. government debt securities 9 — — 9 Total available-for-sale marketable securities $ 597 $ 1 $ (1 ) $ 597 Total current marketable securities $ 997 $ 47 $ (1 ) $ 1,043 Cost Unrealized Gains Unrealized Losses Estimated Fair Value December 31, 2016: Current trading marketable securities: Corporate debt securities $ 427 $ — $ — $ 427 Carbon credit investments (1) 80 10 — 90 Total trading marketable securities $ 507 $ 10 $ — $ 517 Current available-for-sale securities: U.S. government and agency debt securities $ 314 $ — $ (2 ) $ 312 Mortgage and asset-backed debt securities 90 1 — 91 Corporate debt securities 167 — (1 ) 166 Equity securities 2 — — 2 Non-U.S. government debt securities 3 — — 3 Total available-for-sale marketable securities $ 576 $ 1 $ (3 ) $ 574 Total current marketable securities $ 1,083 $ 11 $ (3 ) $ 1,091 (1) These investments are hedged with forward contracts that are not designated in hedging relationships. See Note 13 for offsetting statement of consolidated income impact. |
Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of marketable securities at September 30, 2017 , by contractual maturity, are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. Cost Estimated Fair Value Due in one year or less $ 218 $ 218 Due after one year through three years 443 442 Due after three years through five years 18 18 Due after five years 75 76 754 754 Equity and carbon credit investments 243 289 $ 997 $ 1,043 |
Fair Value, Assets Measured on Recurring Basis | The following table presents information about our investments measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance September 30, 2017: Marketable Securities: U.S. government and agency debt securities $ 285 $ — $ — $ 285 Mortgage and asset-backed debt securities — 90 — 90 Corporate debt securities 21 349 — 370 Equity securities — 2 — 2 Non-U.S. government debt securities — 9 — 9 Carbon credit investments 287 — — 287 Total marketable securities 593 450 — 1,043 Other non-current investments 19 — 8 27 Total $ 612 $ 450 $ 8 $ 1,070 December 31, 2016: Marketable Securities: U.S. government and agency debt securities $ 312 $ — $ — $ 312 Mortgage and asset-backed debt securities — 91 — 91 Corporate debt securities — 593 — 593 Equity securities — 2 — 2 Non-U.S. government debt securities — 3 — 3 Carbon credit investments 90 — — 90 Total marketable securities 402 689 — 1,091 Other non-current investments 18 — 13 31 Total $ 420 $ 689 $ 13 $ 1,122 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the three months ended September 30, 2017 and 2016 (in millions): Marketable Securities Other Non-Current Investments Total Balance on July 1, 2017 $ — $ 9 $ 9 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (1 ) (1 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2017 $ — $ 8 $ 8 Marketable Securities Other Non-Current Investments Total Balance on July 1, 2016 $ — $ 22 $ 22 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (4 ) (4 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2016 $ — $ 18 $ 18 The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the nine months ended September 30, 2017 and 2016 (in millions): Marketable Securities Other Investments Total Balance on January 1, 2017 $ — 13 13 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (5 ) (5 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2017 $ — $ 8 $ 8 Marketable Securities Other Investments Total Balance on January 1, 2016 $ — 32 32 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (14 ) (14 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2016 $ — $ 18 $ 18 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment as of September 30, 2017 and December 31, 2016 consist of the following (in millions): 2017 2016 Vehicles $ 9,124 $ 8,638 Aircraft 15,708 15,653 Land 1,568 1,397 Buildings 3,789 3,439 Building and leasehold improvements 3,796 3,612 Plant equipment 8,850 8,430 Technology equipment 1,858 1,741 Equipment under operating leases 29 29 Construction-in-progress 2,482 735 47,204 43,674 Less: Accumulated depreciation and amortization (26,216 ) (24,874 ) $ 20,988 $ 18,800 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | Information about net periodic benefit cost for our company-sponsored pension and postretirement benefit plans is as follows for the three and nine months ended September 30, 2017 and 2016 (in millions): U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2017 2016 2017 2016 2017 2016 Three Months Ended September 30: Service cost $ 382 $ 353 $ 7 $ 7 $ 15 $ 12 Interest cost 445 457 28 32 10 10 Expected return on assets (730 ) (629 ) (2 ) (2 ) (17 ) (15 ) Amortization of prior service cost 48 41 1 1 1 — Net periodic benefit cost $ 145 $ 222 $ 34 $ 38 $ 9 $ 7 U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2017 2016 2017 2016 2017 2016 Nine Months Ended September 30: Service cost $ 1,161 $ 1,059 $ 21 $ 21 $ 44 $ 37 Interest cost 1,369 1,371 84 92 30 31 Expected return on assets (2,154 ) (1,887 ) (5 ) (4 ) (49 ) (44 ) Amortization of prior service cost 144 125 5 3 1 — Net periodic benefit cost $ 520 $ 668 $ 105 $ 112 $ 26 $ 24 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table indicates the allocation of goodwill by reportable segment as of September 30, 2017 and December 31, 2016 (in millions): U.S. Domestic Package International Package Supply Chain & Freight Consolidated December 31, 2016: $ 715 $ 407 $ 2,635 $ 3,757 Acquired — 18 25 43 Currency / Other — 14 24 38 September 30, 2017: $ 715 $ 439 $ 2,684 $ 3,838 |
Schedule of Intangible Assets (Excluding Goodwill) | The following is a summary of intangible assets as of September 30, 2017 and December 31, 2016 (in millions): Gross Carrying Amount Accumulated Amortization Net Carrying Value September 30, 2017: Capitalized software $ 3,192 $ (2,269 ) $ 923 Licenses 165 (71 ) 94 Franchise rights 128 (95 ) 33 Customer relationships 751 (141 ) 610 Trade name 200 — 200 Trademarks, patents and other 72 (35 ) 37 Total Intangible Assets, Net $ 4,508 $ (2,611 ) $ 1,897 December 31, 2016: Capitalized software $ 2,933 $ (2,157 ) $ 776 Licenses 131 (70 ) 61 Franchise rights 128 (90 ) 38 Customer relationships 724 (85 ) 639 Trade name 200 — 200 Trademarks, patents and other 67 (23 ) 44 Total Intangible Assets, Net $ 4,183 $ (2,425 ) $ 1,758 |
DEBT AND FINANCING ARRANGEMEN27
DEBT AND FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The carrying value of our outstanding debt as of September 30, 2017 and December 31, 2016 consists of the following (in millions): Principal Amount Carrying Value Maturity 2017 2016 Commercial paper $ 4,120 2017-2018 $ 4,120 $ 3,250 Fixed-rate senior notes: 1.125% senior notes 375 2017 375 374 5.50% senior notes 750 2018 755 769 5.125% senior notes 1,000 2019 1,027 1,043 3.125% senior notes 1,500 2021 1,567 1,584 2.40% senior notes 500 2026 497 497 2.45% senior notes 1,000 2022 989 986 2.35% senior notes 600 2022 596 — 6.20% senior notes 1,500 2038 1,482 1,481 4.875% senior notes 500 2040 489 489 3.625% senior notes 375 2042 368 367 3.40% senior notes 500 2046 491 491 Floating rate senior notes 400 2022 398 — 8.375% Debentures: 8.375% debentures 424 2020 453 461 8.375% debentures 276 2030 282 282 Pound Sterling notes: 5.50% notes 89 2031 84 76 5.125% notes 609 2050 582 535 Euro senior notes: 1.625% notes 827 2025 822 732 1.00% notes 591 2028 587 523 Floating rate senior notes 591 2020 589 525 Canadian senior notes: 2.125% notes 603 2024 600 — Floating rate senior notes 979 2049-2067 969 824 Capital lease obligations 450 2017-3005 450 447 Facility notes and bonds 320 2029-2045 320 319 Other debt 18 2017-2022 18 20 Total debt $ 18,897 18,910 16,075 Less: Current maturities (4,555 ) (3,681 ) Long-term debt $ 14,355 $ 12,394 |
SHAREOWNERS' EQUITY (Tables)
SHAREOWNERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders Equity | The following is a rollforward of our common stock, additional paid-in capital and retained earnings accounts for the nine months ended September 30, 2017 and 2016 (in millions, except per share amounts): 2017 2016 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 180 $ 2 194 $ 2 Common stock purchases (3 ) — (4 ) — Stock award plans 4 — 5 — Common stock issuances 2 — 2 — Conversions of class A to class B common stock (7 ) — (12 ) — Class A shares issued at end of period 176 $ 2 185 $ 2 Class B Common Stock Balance at beginning of period 689 $ 7 693 $ 7 Common stock purchases (9 ) — (16 ) — Conversions of class A to class B common stock 7 — 12 — Class B shares issued at end of period 687 $ 7 689 $ 7 Additional Paid-In Capital Balance at beginning of period $ — $ — Stock award plans 283 423 Common stock purchases (604 ) (811 ) Common stock issuances 268 233 Option premiums received (paid) 53 155 Balance at end of period $ — $ — Retained Earnings Balance at beginning of period $ 4,879 $ 6,001 Net income attributable to common shareowners 3,806 3,670 Dividends ($2.49 and $2.34 per share) (2,213 ) (2,093 ) Common stock purchases (748 ) (1,193 ) Balance at end of period $ 5,724 $ 6,385 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The activity in AOCI for the nine months ended September 30, 2017 and 2016 is as follows (in millions): 2017 2016 Foreign currency translation gain (loss): Balance at beginning of period $ (1,016 ) $ (897 ) Translation adjustment (net of tax effect of $(146) and $24) 86 (12 ) Balance at end of period (930 ) (909 ) Unrealized gain (loss) on marketable securities, net of tax: Balance at beginning of period (1 ) (1 ) Current period changes in fair value (net of tax effect of $1 and $3) 2 4 Reclassification to earnings (no tax impact in either period) (1 ) — Balance at end of period — 3 Unrealized gain (loss) on cash flow hedges, net of tax: Balance at beginning of period (45 ) 67 Current period changes in fair value (net of tax effect of $(162) and $(15)) (269 ) (24 ) Reclassification to earnings (net of tax effect of $(6) and $(96)) (9 ) (159 ) Balance at end of period (323 ) (116 ) Unrecognized pension and postretirement benefit costs, net of tax: Balance at beginning of period (3,421 ) (2,709 ) Remeasurement of plan assets and liabilities (net of tax effect of $214 and $0) (1) 356 — Reclassification to earnings (net of tax effect of $56 and $48) 94 80 Balance at end of period (2,971 ) (2,629 ) Accumulated other comprehensive income (loss) at end of period $ (4,224 ) $ (3,651 ) (1) See note 6 for further information about plan curtailments resulting in remeasurement of plan assets and liabilities. |
Schedule of Reclassifications from Accumulated Other Comprehensive Income (Loss) to Earnings | Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and nine months ended September 30, 2017 and 2016 is as follows (in millions): Three Months Ended September 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2017 2016 Unrealized gain (loss) on marketable securities: Realized gain on sale of securities $ 1 $ — Investment income Income tax expense — — Income tax expense Impact on net income 1 — Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (6 ) (7 ) Interest expense Foreign exchange contracts 3 83 Revenue Income tax (expense) benefit 1 (29 ) Income tax expense Impact on net income (2 ) 47 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (50 ) (42 ) Compensation and benefits Income tax benefit 19 15 Income tax expense Impact on net income (31 ) (27 ) Net income Total amount reclassified for the period $ (32 ) $ 20 Net income Nine Months Ended September 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2017 2016 Unrealized gain (loss) on marketable securities: Realized gain on sale of securities $ 1 $ — Investment income Income tax expense — — Income tax expense Impact on net income 1 — Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (20 ) (19 ) Interest expense Foreign exchange contracts 35 274 Revenue Income tax expense (6 ) (96 ) Income tax expense Impact on net income 9 159 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (150 ) (128 ) Compensation and benefits Income tax benefit 56 48 Income tax expense Impact on net income (94 ) (80 ) Net income Total amount reclassified for the period $ (84 ) $ 79 Net income |
Schedule of Deferred Compensation and Treasury Stock Activity | Activity in the deferred compensation program for the nine months ended September 30, 2017 and 2016 is as follows (in millions): 2017 2016 Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 45 $ 51 Reinvested dividends 2 2 Benefit payments (10 ) (9 ) Balance at end of period $ 37 $ 44 Treasury Stock: Balance at beginning of period (1 ) $ (45 ) (1 ) $ (51 ) Reinvested dividends — (2 ) — (2 ) Benefit payments — 10 — 9 Balance at end of period (1 ) $ (37 ) (1 ) $ (44 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information for the three and nine months ended September 30, 2017 and 2016 is as follows (in millions): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Revenue: U.S. Domestic Package $ 9,649 $ 9,289 $ 28,929 $ 27,388 International Package 3,364 3,024 9,585 9,015 Supply Chain & Freight 2,965 2,615 8,529 7,572 Consolidated $ 15,978 $ 14,928 $ 47,043 $ 43,975 Operating Profit: U.S. Domestic Package $ 1,182 $ 1,252 $ 3,653 $ 3,587 International Package 627 576 1,739 1,763 Supply Chain & Freight 226 206 643 545 Consolidated $ 2,035 $ 2,034 $ 6,035 $ 5,895 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2017 and 2016 (in millions, except per share amounts): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Numerator: Net income attributable to common shareowners $ 1,264 $ 1,270 $ 3,806 $ 3,670 Denominator: Weighted average shares 864 876 867 880 Deferred compensation obligations 1 1 1 1 Vested portion of restricted units 4 3 4 4 Denominator for basic earnings per share 869 880 872 885 Effect of dilutive securities: Restricted units 4 4 3 3 Stock options 1 1 1 1 Denominator for diluted earnings per share 874 885 876 889 Basic earnings per share $ 1.45 $ 1.44 $ 4.36 $ 4.15 Diluted earnings per share $ 1.45 $ 1.44 $ 4.34 $ 4.13 |
DERIVATIVE INSTRUMENTS AND RI31
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | As of September 30, 2017 and December 31, 2016 , the notional amounts of our outstanding derivative positions were as follows (in millions): September 30, 2017 December 31, 2016 Currency hedges: Euro EUR 4,141 EUR 3,702 British Pound Sterling GBP 1,758 GBP 1,380 Canadian Dollar CAD 1,244 CAD 1,053 Indian Rupee INR — INR 76 Mexican Peso MXN 166 MXN — Japanese Yen JPY 3,363 JPY 3,972 Singapore Dollar SGD 15 SGD 32 Interest rate hedges: Fixed to Floating Interest Rate Swaps $ 5,799 $ 5,799 Floating to Fixed Interest Rate Swaps $ 778 $ 778 Investment market price hedges: Marketable Securities EUR 204 EUR 76 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of Offset had been Applied Asset Derivatives Balance Sheet Location September 30, December 31, September 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current assets Level 2 $ 21 $ 176 $ 15 $ 176 Interest rate contracts Other current assets Level 2 4 — 4 — Foreign exchange contracts Other non-current assets Level 2 3 131 — 126 Interest rate contracts Other non-current assets Level 2 88 137 75 119 Derivatives not designated as hedges: Foreign exchange contracts Other current assets Level 2 — 1 — 1 Interest rate contracts Other non-current assets Level 2 34 42 33 40 Total Asset Derivatives $ 150 $ 487 $ 127 $ 462 Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of Offset had been Applied Liability Derivatives Balance Sheet Location September 30, December 31, September 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current liabilities Level 2 $ 62 $ — $ 56 $ — Interest rate contracts Other current liabilities Level 2 — 1 — 1 Foreign exchange contracts Other non-current liabilities Level 2 155 6 152 1 Interest rate contracts Other non-current liabilities Level 2 18 21 5 3 Derivatives not designated as hedges: Foreign exchange contracts Other current liabilities Level 2 — — — — Investment market price contracts Other current liabilities Level 2 47 10 47 10 Interest rate contracts Other non-current liabilities Level 2 5 7 4 5 Total Liability Derivatives $ 287 $ 45 $ 264 $ 20 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following table indicates the amount of gains and losses that have been recognized in AOCI within foreign currency translation adjustment for the three and nine months ended September 30, 2017 and 2016 for those instruments designated as net investment hedges (in millions): Three Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2017 2016 Foreign denominated debt $ (142 ) $ (7 ) Total $ (142 ) $ (7 ) Nine Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2017 2016 Foreign denominated debt $ (389 ) (30 ) Total $ (389 ) $ (30 ) The following table indicates the amount of gains and losses that have been recognized in AOCI for the three and nine months ended September 30, 2017 and 2016 for those derivatives designated as cash flow hedges (in millions): Three Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2017 2016 Interest rate contracts $ — $ — Foreign exchange contracts (141 ) (27 ) Total $ (141 ) $ (27 ) Nine Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2017 2016 Interest rate contracts $ — $ (3 ) Foreign exchange contracts (431 ) (36 ) Total $ (431 ) $ (39 ) |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table indicates the amount and location in the statements of consolidated income in which derivative gains and losses, as well as the associated gains and losses on the underlying exposure, have been recognized for those derivatives designated as fair value hedges for the three and nine months ended September 30, 2017 and 2016 (in millions): Derivative Instruments in Fair Value Hedging Relationships Location of Gain (Loss) Recognized in Income Derivative Amount of Gain (Loss) Recognized in Income Hedged Items in Fair Value Hedging Relationships Location of Gain (Loss) Recognized In Income Hedged Items Amount of Gain (Loss) Recognized in Income 2017 2016 2017 2016 Three Months Ended September 30: Interest rate contracts Interest Expense $ (18 ) $ (59 ) Fixed-Rate Debt Interest Expense $ 18 $ 59 Nine Months Ended September 30: Interest rate contracts Interest Expense $ (41 ) $ 56 Fixed-Rate Debt Interest Expense $ 41 $ (56 ) The following is a summary of the amounts recorded in the statements of consolidated income related to fair value changes and settlements of these interest rate swaps, foreign currency forward and investment market price forward contracts not designated as hedges for the three and nine months ended September 30, 2017 and 2016 (in millions): Derivative Instruments Not Designated in Hedging Relationships Location of Gain (Loss) Recognized in Income Amount of Gain (Loss) Recognized in Income 2017 2016 Three Months Ended September 30: Interest rate contracts Interest expense $ (2 ) $ (2 ) Foreign exchange contracts Investment income and other 14 (11 ) Investment market price contracts Investment income and other (45 ) (28 ) $ (33 ) $ (41 ) Nine Months Ended September 30: Interest rate contracts Interest expense $ (6 ) $ (6 ) Foreign exchange contracts Investment income and other 34 $ (117 ) Investment market price contracts Investment income and other (37 ) 152 $ (9 ) $ 29 |
RECENT ACCOUNTING PRONOUNCEME32
RECENT ACCOUNTING PRONOUNCEMENTS - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Tax Expense (Benefit) | |||||
Income tax benefit | $ (680) | $ (683) | $ (1,954) | $ (1,982) | |
Investment income | 216 | 105 | 575 | 313 | |
Non-Current Investments and Restricted Cash | 481 | 481 | $ 476 | ||
Operating Leases, Future Minimum Payments Due | 1,470 | ||||
Revenues | 15,978 | 14,928 | 47,043 | 43,975 | |
Operating expenses | 13,943 | 12,894 | 41,008 | $ 38,080 | |
Self Insurance Program | |||||
Income Tax Expense (Benefit) | |||||
Non-Current Investments and Restricted Cash | $ 123 | 123 | 310 | ||
Restatement | |||||
Income Tax Expense (Benefit) | |||||
Income tax benefit | $ 0 | $ 62 | |||
Revenues | 720 | ||||
Operating expenses | $ (720) |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 27, 2017 | Mar. 24, 2017 | Mar. 01, 2017 | Feb. 07, 2017 | |
Stockholders Equity Note [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Cycle Period | 3 years | ||||||||
Stock compensation expense | $ 118 | $ 125 | $ 463 | $ 471 | |||||
Management Incentive Award [Member] | |||||||||
Stockholders Equity Note [Line Items] | |||||||||
Percentage of the award vesting at each anniversary date of the grant | 20.00% | ||||||||
Closing New York Stock Exchange price | $ 104.78 | $ 106.87 | $ 105.69 | ||||||
Award vesting period | 5 years | ||||||||
Long-Term Incentive Performance Award | |||||||||
Stockholders Equity Note [Line Items] | |||||||||
Closing New York Stock Exchange price | $ 105.05 | ||||||||
Weighted-average fair value of options granted (usd per share) | $ 119.29 | $ 136.18 | |||||||
Grant date fair value | $ 119.29 | $ 119.29 | |||||||
Nonqualified Stock Options [Member] | |||||||||
Stockholders Equity Note [Line Items] | |||||||||
Percentage of the award vesting at each anniversary date of the grant | 20.00% | ||||||||
Expiration period (in years) | 10 years | ||||||||
Award vesting period | 5 years | ||||||||
Stock options granted | 100,000 | 0.2 | 300,000 | ||||||
Weighted-average fair value of options granted (usd per share) | $ 106.86 | $ 98.77 | $ 106.87 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value of Employee Stock Options Granted as Determined by Black-Scholes Valuation Model Assumptions (Detail) - $ / shares | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Nonqualified Stock Options [Member] | ||
Stockholders Equity Note [Line Items] | ||
Risk-free interest rate | 2.15% | 1.62% |
Expected volatility | 17.81% | 22.40% |
Weighted-average fair value of options granted (usd per share) | $ 14.70 | $ 16.46 |
Expected dividend yield | 2.89% | 2.95% |
Expected life (in years) | 7 years 6 months | 7 years 6 months |
Long-Term Incentive Performance Award | ||
Stockholders Equity Note [Line Items] | ||
Risk-free interest rate | 1.46% | 1.00% |
Expected volatility | 16.59% | 16.46% |
Weighted-average fair value of options granted (usd per share) | $ 119.29 | $ 136.18 |
Expected dividend yield | 113.55% | 129.08% |
Summary of Marketable Securitie
Summary of Marketable Securities (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | $ 400 | $ 507 |
Trading Securities, Gross Unrealized Gain | 46 | 10 |
Trading Securities, Gross Unrealized Loss | 0 | 0 |
Trading Securities | 446 | 517 |
Available-for-sale Securities, Amortized Cost Basis | 597 | 576 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | 1 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | (1) | (3) |
Available-for-sale Securities, Current | 597 | 574 |
Total Amortized Cost | 997 | 1,083 |
Marketable Securities, Gross Unrealized Gain | 47 | 11 |
Marketable Securities, Gross Unrealized Loss | (1) | (3) |
Total Estimated Fair Value | 1,043 | 1,091 |
Corporate debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | 159 | 427 |
Trading Securities, Gross Unrealized Gain | 0 | 0 |
Trading Securities, Gross Unrealized Loss | 0 | 0 |
Trading Securities | 159 | 427 |
Available-for-sale Securities, Amortized Cost Basis | 210 | 167 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | (1) |
Available-for-sale Securities, Current | 211 | 166 |
Carbon credit investments | ||
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | 241 | 80 |
Trading Securities, Gross Unrealized Gain | 46 | 10 |
Trading Securities, Gross Unrealized Loss | 0 | 0 |
Trading Securities | 287 | 90 |
U.S. government and agency debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 286 | 314 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | (1) | (2) |
Available-for-sale Securities, Current | 285 | 312 |
Mortgage and asset-backed debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 90 | 90 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 1 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities, Current | 90 | 91 |
U.S. state and local municipal debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 0 | |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |
Available-for-sale Securities, Current | 0 | |
Equity securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 2 | 2 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities, Current | 2 | 2 |
Non-U.S. government debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 9 | 3 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities, Current | $ 9 | $ 3 |
Amortized Cost and Estimated Fa
Amortized Cost and Estimated Fair Value of Marketable Securities by Contractual Maturity (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Cost | ||
Due in one year or less | $ 218 | |
Due after one year through three years | 443 | |
Due after three years through five years | 18 | |
Due after five years | 75 | |
Marketable Securities, Debt Maturities, Amortized Cost, Total | 754 | |
Equity securities | 243 | |
Total Amortized Cost | 997 | $ 1,083 |
Estimated Fair Value | ||
Due in one year or less | 218 | |
Due after one year through three years | 442 | |
Due after three years through five years | 18 | |
Due after five years | 76 | |
Marketable Securities, Debt Maturities, Fair Value, Total | 754 | |
Equity securities | 289 | |
Total Estimated Fair Value | $ 1,043 | $ 1,091 |
INVESTMENTS AND RESTRICTED CA37
INVESTMENTS AND RESTRICTED CASH - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Gain (Loss) on Investments [Line Items] | ||
Non-Current Investments and Restricted Cash | $ 481 | $ 476 |
Fair Value Inputs, Discount Rate | 7.78% | 8.06% |
cash held in escrow [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Restricted Cash and Cash Equivalents, Noncurrent | $ 14 | $ 13 |
Self-insurance requirements [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Non-Current Investments and Restricted Cash | 448 | 445 |
Variable life insurance policy | ||
Gain (Loss) on Investments [Line Items] | ||
Non-Current Investments and Restricted Cash | $ 19 | $ 18 |
Investments Measured at Fair Va
Investments Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 1,070 | $ 1,122 |
Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,043 | 1,091 |
Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 285 | 312 |
Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 90 | 91 |
Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 370 | 593 |
Marketable securities | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2 | 2 |
Marketable securities | Non-U.S. government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 9 | 3 |
Marketable securities | Carbon credit investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 287 | 90 |
Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 27 | 31 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 612 | 420 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 593 | 402 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 285 | 312 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 21 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Non-U.S. government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Carbon credit investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 287 | 90 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 19 | 18 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 450 | 689 |
Significant Other Observable Inputs (Level 2) | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 450 | 689 |
Significant Other Observable Inputs (Level 2) | Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 90 | 91 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 349 | 593 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2 | 2 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Non-U.S. government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 9 | 3 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Carbon credit investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 8 | 13 |
Significant Unobservable Inputs (Level 3) | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Non-U.S. government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Carbon credit investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 8 | $ 13 |
Changes in Level 3 Instruments
Changes in Level 3 Instruments Measured on a Recurring Basis (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | $ 9 | $ 22 | $ 13 | $ 32 |
Transfers into (out of) Level 3 | 0 | 0 | 0 | 0 |
Net realized and unrealized gains (losses): | ||||
Included in earnings (in investment income and other) | (1) | (4) | (5) | (14) |
Included in accumulated other comprehensive income (pre-tax) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Ending Balance | 8 | 18 | 8 | 18 |
Marketable Securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 0 | 0 | 0 | 0 |
Transfers into (out of) Level 3 | 0 | 0 | 0 | 0 |
Net realized and unrealized gains (losses): | ||||
Included in earnings (in investment income and other) | 0 | 0 | 0 | 0 |
Included in accumulated other comprehensive income (pre-tax) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Ending Balance | 0 | 0 | 0 | 0 |
Other Non-Current Investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 9 | 22 | 13 | 32 |
Transfers into (out of) Level 3 | 0 | 0 | 0 | 0 |
Net realized and unrealized gains (losses): | ||||
Included in earnings (in investment income and other) | (1) | (4) | (5) | (14) |
Included in accumulated other comprehensive income (pre-tax) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Ending Balance | $ 8 | $ 18 | $ 8 | $ 18 |
Property Plant and Equipment (D
Property Plant and Equipment (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 47,204 | $ 43,674 |
Less: Accumulated depreciation and amortization | (26,216) | (24,874) |
Property, plant and equipment, net | 20,988 | 18,800 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 9,124 | 8,638 |
Aircraft | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 15,708 | 15,653 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,568 | 1,397 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 3,789 | 3,439 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 3,796 | 3,612 |
Plant equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 8,850 | 8,430 |
Technology equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,858 | 1,741 |
Equipment under operating leases | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 29 | 29 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 2,482 | $ 735 |
Property Plant and Equipment -
Property Plant and Equipment - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Impairment charges on property plant and equipment | $ 0 | $ 0 | $ 0 | $ 0 |
Net Periodic Benefit Cost for P
Net Periodic Benefit Cost for Pension and Postretirement Benefit Plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
U.S. Pension Benefits | ||||
Net Periodic Cost: | ||||
Service cost | $ 382 | $ 353 | $ 1,161 | $ 1,059 |
Interest cost | 445 | 457 | 1,369 | 1,371 |
Expected return on assets | (730) | (629) | (2,154) | (1,887) |
Amortization of: | ||||
Amortization of prior service cost | 48 | 41 | 144 | 125 |
Net periodic benefit cost | 145 | 222 | 520 | 668 |
U.S. Postretirement Medical Benefits | ||||
Net Periodic Cost: | ||||
Service cost | 7 | 7 | 21 | 21 |
Interest cost | 28 | 32 | 84 | 92 |
Expected return on assets | (2) | (2) | (5) | (4) |
Amortization of: | ||||
Amortization of prior service cost | 1 | 1 | 5 | 3 |
Net periodic benefit cost | 34 | 38 | 105 | 112 |
International Pension Benefits | ||||
Net Periodic Cost: | ||||
Service cost | 15 | 12 | 44 | 37 |
Interest cost | 10 | 10 | 30 | 31 |
Expected return on assets | (17) | (15) | (49) | (44) |
Amortization of: | ||||
Amortization of prior service cost | 1 | 0 | 1 | 0 |
Net periodic benefit cost | $ 9 | $ 7 | $ 26 | $ 24 |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)Employees | Sep. 30, 2017USD ($)Employees | Jun. 30, 2017 | Dec. 31, 2016USD ($)Employees | Dec. 31, 2007USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined benefit plan, net actuarial gain | $ 569 | ||||
Defined benefit plan, curtailments | 1,525 | ||||
Defined benefit plan, net actuarial loss | $ 956 | ||||
Defined benefit plan, assumptions used calculating benefit obligation, discount rate | 3.20% | ||||
Defined benefit plan,actual return on plan assets | 2.75% | ||||
Actuarial gain loss corridor threshold | 10.00% | 10.00% | |||
Multiemployer Plans, Payment Term | 45 years | ||||
Number of employees under a national master agreement and various supplemental agreements with local unions affiliated with Teamsters | Employees | 268,000 | ||||
Number of pilots under a collective bargaining agreement with the Independent Pilots Association | Employees | 2,600 | 2,600 | |||
Majority of ground mechanics not employed under agreements | Employees | 3,000 | 3,000 | |||
Central States Pension Fund | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Withdrawal liability | $ 6,100 | ||||
Pension liability | $ 4,000 | $ 4,000 | |||
Multiemployer Plans, Pension [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Multi-employer Plans, Withdrawal Obligation, Fair Value Disclosure | 891 | 891 | $ 861 | ||
Other noncurrent liabilities | Multiemployer Plans, Pension [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Multiemployer Plans, Withdrawal Obligation, Present Value | 861 | 861 | 866 | ||
Other current liabilities | Multiemployer Plans, Pension [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Multiemployer Plans, Withdrawal Obligation, Present Value | $ 7 | $ 7 | $ 6 | ||
Minimum [Member] | Employees | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contribution percentage | 3.00% | ||||
Minimum [Member] | Non-union employees | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contribution percentage | 5.00% | ||||
Maximum [Member] | Employees | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contribution percentage | 8.00% | ||||
Maximum [Member] | Non-union employees | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contribution percentage | 8.00% | ||||
U.S. Pension Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Amount contributed to company- sponsored benefit plans | $ 2,359 | ||||
International Pension Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Estimated future employer contributions to defined benefit plan, current fiscal year | 18 | ||||
U.S. Postretirement Medical Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Amount contributed to company- sponsored benefit plans | $ 226 | ||||
Estimated future employer contributions to defined benefit plan, current fiscal year | 15 |
Allocation of Goodwill by Repor
Allocation of Goodwill by Reportable Segment (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 3,757 |
Acquired | 43 |
Currency / Other | 38 |
Ending balance | 3,838 |
U.S. Domestic Package | |
Goodwill [Roll Forward] | |
Beginning balance | 715 |
Acquired | 0 |
Currency / Other | 0 |
Ending balance | 715 |
International Package | |
Goodwill [Roll Forward] | |
Beginning balance | 407 |
Acquired | 18 |
Currency / Other | 14 |
Ending balance | 439 |
Supply Chain & Freight | |
Goodwill [Roll Forward] | |
Beginning balance | 2,635 |
Acquired | 25 |
Currency / Other | 24 |
Ending balance | $ 2,684 |
Summary of Intangible Assets (D
Summary of Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,508 | $ 4,183 |
Accumulated Amortization | (2,611) | (2,425) |
Net Carrying Value | 1,897 | 1,758 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying value | 5 | |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying value | 200 | |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,192 | 2,933 |
Accumulated Amortization | (2,269) | (2,157) |
Net Carrying Value | 923 | 776 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 165 | 131 |
Accumulated Amortization | (71) | (70) |
Net Carrying Value | 94 | 61 |
Franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 128 | 128 |
Accumulated Amortization | (95) | (90) |
Net Carrying Value | 33 | 38 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 751 | 724 |
Accumulated Amortization | (141) | (85) |
Net Carrying Value | 610 | 639 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 200 | 200 |
Accumulated Amortization | 0 | 0 |
Net Carrying Value | 200 | 200 |
Trademarks, patents and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 72 | 67 |
Accumulated Amortization | (35) | (23) |
Net Carrying Value | $ 37 | $ 44 |
GOODWILL AND INTANGIBLE ASSET46
GOODWILL AND INTANGIBLE ASSETS Narratives (Details) $ in Millions | 1 Months Ended |
Dec. 31, 2016USD ($) | |
Marken | |
Business Acquisition [Line Items] | |
Total consideration | $ 570 |
Carrying Value of Outstanding D
Carrying Value of Outstanding Debt (Detail) CAD in Millions | 9 Months Ended | ||||
Sep. 30, 2017USD ($) | May 15, 2017USD ($) | May 15, 2017CAD | May 11, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 18,897,000,000 | ||||
Debt instrument, stated interest rate | 8.375% | ||||
Total debt | $ 18,910,000,000 | $ 16,075,000,000 | |||
Less current maturities | (4,555,000,000) | (3,681,000,000) | |||
Long-Term Debt | 14,355,000,000 | 12,394,000,000 | |||
Commercial Paper | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 4,120,000,000 | ||||
Maturity - Minimum Date | Mar. 31, 2017 | ||||
Maturity - Maximum Date | Dec. 31, 2018 | ||||
Total debt | $ 4,120,000,000 | 3,250,000,000 | |||
Senior notes | 1.125% senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 375,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2017 | ||||
Debt instrument, stated interest rate | 1.125% | ||||
Total debt | $ 375,000,000 | 374,000,000 | |||
Senior notes | 5.50% stated rate | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 750,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2018 | ||||
Debt instrument, stated interest rate | 5.50% | ||||
Total debt | $ 755,000,000 | 769,000,000 | |||
Senior notes | 5.125% stated rate | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 1,000,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2019 | ||||
Debt instrument, stated interest rate | 5.125% | ||||
Total debt | $ 1,027,000,000 | 1,043,000,000 | |||
Senior notes | 3.125% stated rate | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 1,500,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2021 | ||||
Debt instrument, stated interest rate | 3.125% | ||||
Total debt | $ 1,567,000,000 | 1,584,000,000 | |||
Senior notes | 2.40% senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 500,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2026 | ||||
Debt instrument, stated interest rate | 2.40% | ||||
Total debt | $ 497,000,000 | 497,000,000 | |||
Senior notes | 2.45% senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 1,000,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2022 | ||||
Debt instrument, stated interest rate | 2.45% | ||||
Total debt | $ 989,000,000 | 986,000,000 | |||
Senior notes | 2.35% senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 600,000,000 | $ 600,000,000 | |||
Maturity - Maximum Date | Dec. 31, 2022 | ||||
Debt instrument, stated interest rate | 2.35% | 2.35% | |||
Total debt | $ 596,000,000 | 0 | |||
Senior notes | 6.20% stated rate | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 1,500,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2038 | ||||
Debt instrument, stated interest rate | 6.20% | ||||
Total debt | $ 1,482,000,000 | 1,481,000,000 | |||
Senior notes | 4.875% stated rate | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 500,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2040 | ||||
Debt instrument, stated interest rate | 4.875% | ||||
Total debt | $ 489,000,000 | 489,000,000 | |||
Senior notes | 3.625% senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 375,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2042 | ||||
Debt instrument, stated interest rate | 3.625% | ||||
Total debt | $ 368,000,000 | 367,000,000 | |||
Senior notes | 3.40% senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 500,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2046 | ||||
Debt instrument, stated interest rate | 3.40% | ||||
Total debt | $ 491,000,000 | 491,000,000 | |||
Senior notes | Floating rate senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 400,000,000 | $ 400,000,000 | |||
Maturity - Maximum Date | Dec. 31, 2022 | ||||
Total debt | $ 398,000,000 | 0 | |||
Senior notes | 8.375% debentures | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 424,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2029 | ||||
Debt instrument, stated interest rate | 8.375% | ||||
Total debt | $ 453,000,000 | 461,000,000 | |||
Senior notes | 8.375% debentures | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 276,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2030 | ||||
Total debt | $ 282,000,000 | 282,000,000 | |||
Senior notes | Canadian senior note 2.125% | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 603,000,000 | $ 547,000,000 | CAD 750 | ||
Maturity - Maximum Date | Dec. 31, 2024 | ||||
Debt instrument, stated interest rate | 2.125% | 2.125% | 2.125% | ||
Total debt | $ 600,000,000 | 0 | |||
Senior notes | Floating rate senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 979,000,000 | ||||
Maturity - Minimum Date | Dec. 31, 2049 | ||||
Maturity - Maximum Date | Dec. 31, 2067 | ||||
Total debt | $ 969,000,000 | 824,000,000 | |||
Capital Lease Obligations | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 450,000,000 | ||||
Maturity - Minimum Date | Dec. 31, 2017 | ||||
Maturity - Maximum Date | Dec. 31, 3005 | ||||
Total debt | $ 450,000,000 | 447,000,000 | |||
Pound Sterling notes | 5.50% notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 89,000,000 | ||||
Maturity - Maximum Date | Dec. 31, 2031 | ||||
Debt instrument, stated interest rate | 5.50% | ||||
Total debt | $ 84,000,000 | 76,000,000 | |||
Pound Sterling notes | 5.125% notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 609,000,000 | ||||
Maturity - Maximum Date | Jan. 1, 2022 | ||||
Debt instrument, stated interest rate | 5.125% | ||||
Total debt | $ 582,000,000 | 535,000,000 | |||
Euro Senior Notes | 1.625% Euro Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 827,000,000 | ||||
Debt instrument, stated interest rate | 1.625% | ||||
Total debt | $ 822,000,000 | 732,000,000 | |||
Euro Senior Notes | 1.00% notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 591,000,000 | ||||
Debt instrument, stated interest rate | 1.00% | ||||
Total debt | $ 587,000,000 | 523,000,000 | |||
Euro Senior Notes | Floating rate senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | 591,000,000 | ||||
Total debt | 589,000,000 | 525,000,000 | |||
Facility notes and bonds | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 320,000,000 | ||||
Maturity - Minimum Date | Dec. 31, 2029 | ||||
Maturity - Maximum Date | Dec. 31, 2045 | ||||
Total debt | $ 320,000,000 | 319,000,000 | |||
Other debt | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Face Amount | $ 18,000,000 | ||||
Maturity - Minimum Date | Dec. 31, 2017 | ||||
Maturity - Maximum Date | Dec. 31, 2022 | ||||
Total debt | $ 18,000,000 | $ 20,000,000 |
DEBT AND FINANCING ARRANGEMEN48
DEBT AND FINANCING ARRANGEMENTS - Additional Information (Detail) € in Millions, CAD in Millions | May 15, 2017USD ($) | May 11, 2017USD ($) | Sep. 30, 2017EUR (€)Credit_Agreements | Sep. 30, 2017USD ($)Credit_Agreements | May 15, 2017CAD | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate | 8.375% | 8.375% | ||||
Face value of debt instrument | $ 18,897,000,000 | |||||
Number of credit agreements | Credit_Agreements | 2 | 2 | ||||
Covenants limit, amount of secured indebtedness and debt in sale-leaseback transactions, percentage of net tangible assets | 10.00% | 10.00% | ||||
Covenants that limit the amount of secured indebtedness and amount of attributable debt in sale-leaseback transactions, net tangible assets amount | $ 2,345,000,000 | |||||
Sale-lease back outstanding | 0 | |||||
Secured debt outstanding | 0 | |||||
Long-term debt fair value | 19,746,000,000 | $ 17,134,000,000 | ||||
U.S. Commercial Paper Program | ||||||
Debt Instrument [Line Items] | ||||||
Commercial paper program, authorized to borrow | 10,000,000,000 | |||||
Total debt | $ 2,775,000,000 | |||||
Debt, weighted average interest rate | 1.07% | 1.07% | ||||
Foreign Commercial Paper Program | ||||||
Debt Instrument [Line Items] | ||||||
Commercial paper program, authorized to borrow | € | € 5,000 | |||||
Debt, weighted average interest rate | (0.41%) | (0.41%) | ||||
Revolving Credit Facility Expiring In 2015 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity | Mar. 23, 2018 | |||||
Revolving credit facilities | $ 1,500,000,000 | |||||
Applicable margin for base rate below LIBOR | 1.00% | 1.00% | ||||
Revolving Credit Facility Expiring In 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity | Mar. 24, 2022 | |||||
Revolving credit facilities | $ 3,000,000,000 | |||||
Applicable margin for base rate below LIBOR | 1.00% | 1.00% | ||||
Revolving Credit Facility Expiring In 2017 | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin for base rate below LIBOR | 0.00% | 0.00% | ||||
Senior notes | 2.35% senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate | 2.35% | 2.35% | 2.35% | |||
Face value of debt instrument | $ 600,000,000 | $ 600,000,000 | ||||
Debt Instrument, Redemption percentage | 100.00% | |||||
Senior notes | 1.125% senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate | 1.125% | 1.125% | ||||
Face value of debt instrument | $ 375,000,000 | |||||
Senior notes | Floating Rate Senior Notes Due 2067 | ||||||
Debt Instrument [Line Items] | ||||||
Face value of debt instrument | 147,000,000 | |||||
Maturity | Dec. 31, 2067 | |||||
Call period (in years) | 30 years | |||||
Put period (in years) | 1 year | |||||
Senior notes | Floating rate senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Face value of debt instrument | $ 400,000,000 | $ 400,000,000 | ||||
Senior notes | Canadian senior note 2.125% | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate | 2.125% | 2.125% | 2.125% | 2.125% | ||
Face value of debt instrument | $ 547,000,000 | $ 603,000,000 | CAD 750 | |||
Applicable margin rates | 0.215% | |||||
Senior notes | 5.50% stated rate | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate | 5.50% | 5.50% | ||||
Face value of debt instrument | $ 750,000,000 | |||||
Commercial Paper, Euro Denominated [Member] | U.S. Commercial Paper Program | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | € 1,139 | $ 1,345,000,000 | ||||
LIBOR rate | Revolving Credit Facility Expiring In 2015 [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 0.10% | |||||
LIBOR rate | Revolving Credit Facility Expiring In 2015 [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 0.75% | |||||
LIBOR rate | Revolving Credit Facility Expiring In 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 1.00% | |||||
LIBOR rate | Revolving Credit Facility Expiring In 2017 | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 0.10% | |||||
LIBOR rate | Revolving Credit Facility Expiring In 2017 | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 0.75% | |||||
Citibank base rate | Revolving Credit Facility Expiring In 2015 [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 0.00% | |||||
Citibank base rate | Revolving Credit Facility Expiring In 2015 [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 1.00% | |||||
Federal Funds Rate | Revolving Credit Facility Expiring In 2015 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 0.50% | |||||
Federal Funds Rate | Revolving Credit Facility Expiring In 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 0.50% | |||||
LIBOR | Senior notes | Floating Rate Senior Notes Due 2067 | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 0.30% | |||||
LIBOR | Senior notes | Floating rate senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin rates | 0.38% |
LEGAL PROCEEDINGS AND CONTING49
LEGAL PROCEEDINGS AND CONTINGENCIES (Narratives) (Details) - USD ($) | May 25, 2017 | Sep. 30, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Settlement amount | $ 9,400,000 | |
Penalties related to settlement | $ 237,600,000 | |
Loss Contingency Accrual | $ 9,400,000 | |
Estimated losses | $ 247,000,000 |
SHAREOWNERS' EQUITY - Additiona
SHAREOWNERS' EQUITY - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)optionVoteClasses_of_Common_Stock$ / sharesshares | Sep. 30, 2017USD ($)optionVote$ / sharesshares | Sep. 30, 2016USD ($)shares | May 01, 2016USD ($) | |
Stockholders Equity Note [Line Items] | ||||
Classes of Common Stock, Number | Classes_of_Common_Stock | 2 | |||
Preferred stock, shares authorized | shares | 200,000,000 | 200,000,000 | ||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||
Preferred stock, issued | shares | 0 | 0 | ||
Common stock authorized for purchase, amount | $ | $ 8,000 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ | $ 4,803 | $ 4,803 | ||
Noncontrolling Interest, Period Increase (Decrease) | $ | $ 6 | $ 3 | ||
Class A common stock | ||||
Stockholders Equity Note [Line Items] | ||||
Votes per common share | Vote | 10 | 10 | ||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | shares | 4,600,000,000 | 4,600,000,000 | ||
Total of Class A and Class B common stock, repurchased, value | $ | $ 0 | $ 0 | ||
Common stock purchases | shares | 3,000,000 | 4,000,000 | ||
Class B common stock | ||||
Stockholders Equity Note [Line Items] | ||||
Votes per common share | Vote | 1 | 1 | ||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized | shares | 5,600,000,000 | 5,600,000,000 | ||
Total of Class A and Class B common stock, repurchased, value | $ | $ 0 | $ 0 | ||
Common stock purchases | shares | 9,000,000 | 16,000,000 | ||
Class A and B Common Stock | ||||
Stockholders Equity Note [Line Items] | ||||
Total of Class A and Class B common stock, repurchased, value | $ | $ 1,352 | $ 2,004 | ||
Common stock purchases | shares | 12,300,000 | 19,300,000 | ||
Options Held [Member] | ||||
Stockholders Equity Note [Line Items] | ||||
Option premiums received | $ | $ 53 | $ 155 | ||
Number of options open | option | 500,000 | 500,000 | ||
Forward Contract Indexed to Issuer's Equity, Forward Rate Per Share | $ / shares | $ 97.57 |
Roll-forward of Common Stock, A
Roll-forward of Common Stock, Additional Paid-in Capital, and Retained Earnings Accounts (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 405 | |||
Net income attributable to common shareowners | $ 1,264 | $ 1,270 | 3,806 | $ 3,670 |
Balance at end of period | 1,509 | $ 1,509 | ||
Common stock, cash paid for dividends, per share | $ 2.49 | $ 2.34 | ||
Class A common stock | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 2 | $ 2 | ||
Balance at beginning of period, shares | 180 | 194 | ||
Common stock purchases | $ 0 | $ 0 | ||
Common stock purchases, shares | (3) | (4) | ||
Stock award plans | $ 0 | $ 0 | ||
Stock award plans, shares | 4 | 5 | ||
Common stock issuances | $ 0 | $ 0 | ||
Common stock issuances, shares | 2 | 2 | ||
Conversions of class A to class B common stock | $ 0 | $ 0 | ||
Conversions of Class A to Class B common stock, shares | (7) | (12) | ||
Balance at end of period | $ 2 | $ 2 | $ 2 | $ 2 |
Balance at end of period, shares | 176 | 185 | 176 | 185 |
Class B common stock | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 7 | $ 7 | ||
Balance at beginning of period, shares | 689 | 693 | ||
Common stock purchases | $ 0 | $ 0 | ||
Common stock purchases, shares | (9) | (16) | ||
Conversions of class A to class B common stock | $ 0 | $ 0 | ||
Conversions of Class A to Class B common stock, shares | (7) | (12) | ||
Balance at end of period | $ 7 | $ 7 | $ 7 | $ 7 |
Balance at end of period, shares | 687 | 689 | 687 | 689 |
Additional Paid-in Capital | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 0 | $ 0 | ||
Common stock purchases | (604) | (811) | ||
Stock award plans | 283 | 423 | ||
Common stock issuances | 268 | 233 | ||
Option premiums received (paid) | 53 | 155 | ||
Balance at end of period | $ 0 | $ 0 | 0 | 0 |
Retained Earnings | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | 4,879 | 6,001 | ||
Common stock purchases | (748) | (1,193) | ||
Net income attributable to common shareowners | 3,806 | 3,670 | ||
Balance at end of period | $ 5,724 | $ 6,385 | 5,724 | 6,385 |
Dividends ($2.49 and $2.34 per share) | $ (2,213) | $ (2,093) |
Activity in Accumulated Other C
Activity in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | $ (4,483) | |||
Translation adjustment (net of tax effect of $(146) and $24) | $ 32 | $ (7) | 86 | $ (12) |
Current period changes in fair value (net of tax effect of $1 and $3) | 0 | (1) | 1 | 4 |
Current period changes in fair value (net of tax effect of $(162) and $(15)) | (86) | (64) | (278) | (183) |
Balance at end of period | (4,224) | (3,651) | (4,224) | (3,651) |
Foreign currency translation gain (loss): | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (1,016) | (897) | ||
Translation adjustment (net of tax effect of $(146) and $24) | 86 | (12) | ||
Balance at end of period | (930) | (909) | (930) | (909) |
Unrealized gain (loss) on marketable securities, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (1) | (1) | ||
Current period changes in fair value (net of tax effect of $1 and $3) | 2 | 4 | ||
Balance at end of period | 0 | 3 | 0 | 3 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 0 | 0 | ||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 1 | 0 | ||
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (45) | 67 | ||
Current period changes in fair value (net of tax effect of $(162) and $(15)) | (269) | (24) | ||
Reclassification to earnings (net of tax effect of $(6) and $(96)) | (9) | (159) | ||
Balance at end of period | (323) | (116) | (323) | (116) |
Reclassification to earnings, tax effect | (6) | (96) | ||
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (3,421) | (2,709) | ||
Remeasurement of plan assets and liabilities (net of tax effect of $214 and $0) | 356 | 0 | ||
Reclassification to earnings (net of tax effect of $56 and $48) | 94 | 80 | ||
Balance at end of period | (2,971) | (2,629) | (2,971) | (2,629) |
Income Tax Expense Benefit [Member] | Unrealized gain (loss) on marketable securities, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 0 | 0 | 0 | 0 |
Income Tax Expense Benefit [Member] | Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification to earnings, tax effect | 1 | (29) | (6) | (96) |
Income Tax Expense Benefit [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Tax | 19 | 15 | 56 | 48 |
Net Income [Member] [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
TotalOtherComprehensiveIncomeReclassification, Net of Tax | (32) | 20 | (84) | 79 |
Net Income [Member] [Member] | Unrealized gain (loss) on marketable securities, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 1 | 0 | 1 | 0 |
Net Income [Member] [Member] | Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification to earnings (net of tax effect of $(6) and $(96)) | 2 | (47) | (9) | (159) |
Net Income [Member] [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification to earnings (net of tax effect of $56 and $48) | (31) | (27) | (94) | (80) |
Labor and Related Expense [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), before Tax | (50) | (42) | (150) | (128) |
Foreign exchange contracts | Interest Expense | Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 3 | 83 | ||
Foreign exchange contracts | Revenue [Member] | Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 35 | 274 | ||
Interest rate contracts | Interest Expense | Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | $ (6) | $ (7) | $ (20) | $ (19) |
Activity in Accumulated Other53
Activity in Accumulated Other Comprehensive Income (Loss) (Phantoms) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (4,224) | $ (3,651) | $ (4,224) | $ (3,651) | $ (4,483) | |
Change in foreign currency translation adjustment, net of tax | 32 | (7) | 86 | (12) | ||
Foreign currency translation gain (loss): | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (930) | (909) | (930) | (909) | (1,016) | $ (897) |
Change in foreign currency translation adjustment, net of tax | 86 | (12) | ||||
Aggregate adjustment for the period, tax | (146) | 24 | ||||
Unrealized gain (loss) on marketable securities, net of tax: | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 0 | 3 | 0 | 3 | (1) | (1) |
Current period changes in fair value, tax effect | 1 | 3 | ||||
Reclassification to earnings, tax effect | 0 | 0 | ||||
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (323) | (116) | (323) | (116) | (45) | 67 |
Current period changes in fair value, tax effect | (162) | (15) | ||||
Reclassification to earnings, tax effect | (6) | (96) | ||||
Accumulated Defined Benefit Plans Adjustment [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (2,971) | $ (2,629) | (2,971) | (2,629) | $ (3,421) | $ (2,709) |
Reclassification to earnings, tax effect | 56 | 48 | ||||
Other Comprehensive Income (Loss), Finalization of Pension and Other Postretirement Benefit Plan Valuation, Tax | $ 214 | $ 0 |
Activity in Deferred Compensati
Activity in Deferred Compensation Program (Detail) - USD ($) shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Stockholders Equity Note [Roll Forward] | ||
Balance at beginning of period | (1) | |
Balance at end of period | (1) | |
Balance at beginning of period | $ 405 | |
Balance at end of period | $ 1,509 | |
Treasury Stock [Member] | ||
Stockholders Equity Note [Roll Forward] | ||
Balance at beginning of period | (1) | (1) |
Reinvested dividends | 0 | 0 |
Benefit payments | 0 | 0 |
Balance at end of period | (1) | (1) |
Balance at beginning of period | $ (45) | $ (51) |
Reinvested dividends | (2) | (2) |
Benefit payments | 10 | 9 |
Balance at end of period | (37) | (44) |
Deferred Compensation Obligations | ||
Stockholders Equity Note [Roll Forward] | ||
Balance at beginning of period | 45 | 51 |
Reinvested dividends | (2) | (2) |
Benefit payments | 10 | 9 |
Balance at end of period | $ 37 | $ 44 |
SHAREOWNERS' EQUITY Amounts Rec
SHAREOWNERS' EQUITY Amounts Reclassified from AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
TotalOtherComprehensiveIncomeReclassification, Net of Tax | $ (32) | $ 20 | $ (84) | $ 79 |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 0 | 0 | ||
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 0 | 0 | 0 | 0 |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Investment income and other | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | 1 | 0 | 1 | 0 |
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Reclassification to earnings, tax effect | (6) | (96) | ||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Net of Tax | 9 | 159 | ||
Unrealized gain (loss) on cash flow hedges, net of tax: | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Reclassification to earnings, tax effect | 1 | (29) | (6) | (96) |
Unrealized gain (loss) on cash flow hedges, net of tax: | Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Net of Tax | (2) | 47 | 9 | 159 |
Unrealized gain (loss) on cash flow hedges, net of tax: | Interest rate contracts | Interest Expense | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | (6) | (7) | (20) | (19) |
Unrealized gain (loss) on cash flow hedges, net of tax: | Foreign exchange contracts | Interest Expense | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 3 | 83 | ||
Unrealized gain (loss) on cash flow hedges, net of tax: | Foreign exchange contracts | Revenue [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 35 | 274 | ||
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, Net of Tax | 94 | 80 | ||
Accumulated Defined Benefit Plans Adjustment [Member] | Labor and Related Expense [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), before Tax | (50) | (42) | (150) | (128) |
Accumulated Defined Benefit Plans Adjustment [Member] | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Tax | 19 | 15 | 56 | 48 |
Accumulated Defined Benefit Plans Adjustment [Member] | Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, Net of Tax | $ (31) | $ (27) | $ (94) | $ (80) |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) | 3 Months Ended |
Sep. 30, 2017Countries_and_TerritoriesSegments | |
Segment Reporting Information [Line Items] | |
Operating Segments, Number | Segments | 3 |
International Package | Minimum | |
Segment Reporting Information [Line Items] | |
Number of countries and territories in which service is rendered | 220 |
Supply Chain & Freight | Minimum | |
Segment Reporting Information [Line Items] | |
Number of countries and territories in which service is rendered | 195 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 15,978 | $ 14,928 | $ 47,043 | $ 43,975 |
Operating Profit | 2,035 | 2,034 | 6,035 | 5,895 |
U.S. Domestic Package | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 9,649 | 9,289 | 28,929 | 27,388 |
Operating Profit | 1,182 | 1,252 | 3,653 | 3,587 |
International Package | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 3,364 | 3,024 | 9,585 | 9,015 |
Operating Profit | 627 | 576 | 1,739 | 1,763 |
Supply Chain & Freight | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,965 | 2,615 | 8,529 | 7,572 |
Operating Profit | $ 226 | $ 206 | $ 643 | $ 545 |
Computation of Basic and Dilute
Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net income attributable to common shareowners | $ 1,264 | $ 1,270 | $ 3,806 | $ 3,670 |
Denominator: | ||||
Weighted average shares | 864 | 876 | 867 | 880 |
Deferred compensation obligations | 1 | 1 | 1 | 1 |
Vested portion of restricted shares | 4 | 3 | 4 | 4 |
Denominator for basic earnings per share | 869 | 880 | 872 | 885 |
Effect of dilutive securities: | ||||
Denominator for diluted earnings per share | 874 | 885 | 876 | 889 |
Basic earnings per share (usd per share) | $ 1.45 | $ 1.44 | $ 4.36 | $ 4.15 |
Diluted earnings per share (usd per share) | $ 1.45 | $ 1.44 | $ 4.34 | $ 4.13 |
Restricted performance units | ||||
Effect of dilutive securities: | ||||
Incremental common shares attributable to share-based payment arrangements | 4 | 4 | 3 | 3 |
Stock option plans | ||||
Effect of dilutive securities: | ||||
Incremental common shares attributable to share-based payment arrangements | 1 | 1 | 1 | 1 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Shares excluded from diluted earnings per share that may be issued upon the exercise of employee stock options because such effect would be antidilutive | 0 | 100,000 | 200,000 | 200,000 |
DERIVATIVE INSTRUMENTS AND RI60
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Collateral received under contractual provisions | $ 48 | $ 575 |
Derivative net liability position | 47 | 10 |
Pre-tax losses related to cash flow hedges that are currently deferred in AOCI and are expected to be reclassified to income within twelve months | $ 108 | |
Maximum term over hedging exposures to the variability of cash flow | 15 years | |
Change in Credit Rating | ||
Derivative [Line Items] | ||
Derivative, Additional Collateral, Obligation to Return Cash | $ 104 | $ 0 |
Notional Amounts of Outstanding
Notional Amounts of Outstanding Derivative Positions (Detail) € in Millions, ₨ in Millions, ¥ in Millions, £ in Millions, SGD in Millions, MXN in Millions, CAD in Millions, $ in Millions | Sep. 30, 2017EUR (€) | Sep. 30, 2017USD ($) | Sep. 30, 2017GBP (£) | Sep. 30, 2017SGD | Sep. 30, 2017MXN | Sep. 30, 2017INR (₨) | Sep. 30, 2017CAD | Sep. 30, 2017JPY (¥) | Dec. 31, 2016EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2016GBP (£) | Dec. 31, 2016SGD | Dec. 31, 2016MXN | Dec. 31, 2016INR (₨) | Dec. 31, 2016CAD | Dec. 31, 2016JPY (¥) |
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | € 4,141 | £ 1,758 | SGD 15 | MXN 166 | ₨ 0 | CAD 1,244 | ¥ 3,363 | € 3,702 | £ 1,380 | SGD 32 | MXN 0 | ₨ 76 | CAD 1,053 | ¥ 3,972 | ||
Fixed to Floating Interest Rate Swaps | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | $ 5,799 | $ 5,799 | ||||||||||||||
Floating to Fixed Interest Rate Swaps | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | $ 778 | $ 778 | ||||||||||||||
Investment market price contracts | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Derivative, Notional Amount | € | € 204 | € 76 |
Location on the Balance Sheet o
Location on the Balance Sheet of Derivative Assets and Liabilities (Detail) - Fair Value, Inputs, Level 2 - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Asset Derivatives | ||
Asset Derivatives | $ 150 | $ 487 |
Net Amounts if Right of Offset had been Applied | 127 | 462 |
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 287 | 45 |
Net Amounts if Right of Offset had been Applied | 264 | 20 |
Designated as Hedging Instrument | Foreign exchange contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 21 | 176 |
Net Amounts if Right of Offset had been Applied | 15 | 176 |
Designated as Hedging Instrument | Foreign exchange contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 3 | 131 |
Net Amounts if Right of Offset had been Applied | 0 | 126 |
Designated as Hedging Instrument | Foreign exchange contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 62 | 0 |
Net Amounts if Right of Offset had been Applied | 56 | 0 |
Designated as Hedging Instrument | Foreign exchange contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 155 | 6 |
Net Amounts if Right of Offset had been Applied | 152 | 1 |
Designated as Hedging Instrument | Interest rate contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 4 | 0 |
Net Amounts if Right of Offset had been Applied | 4 | 0 |
Designated as Hedging Instrument | Interest rate contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 88 | 137 |
Net Amounts if Right of Offset had been Applied | 75 | 119 |
Designated as Hedging Instrument | Interest rate contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 0 | (1) |
Net Amounts if Right of Offset had been Applied | 0 | 1 |
Designated as Hedging Instrument | Interest rate contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 18 | 21 |
Net Amounts if Right of Offset had been Applied | 5 | 3 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 0 | 1 |
Net Amounts if Right of Offset had been Applied | 0 | 1 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 0 | 0 |
Net Amounts if Right of Offset had been Applied | 0 | 0 |
Not Designated as Hedging Instrument | Interest rate contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 34 | 42 |
Net Amounts if Right of Offset had been Applied | 33 | 40 |
Not Designated as Hedging Instrument | Interest rate contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 5 | 7 |
Net Amounts if Right of Offset had been Applied | 4 | 5 |
Not Designated as Hedging Instrument | Investment market price contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 47 | 10 |
Net Amounts if Right of Offset had been Applied | $ 47 | $ 10 |
Amount and Location in the Inco
Amount and Location in the Income Statement for Derivatives Designed as Cash Flow Hedges (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments in Cash Flow Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | $ (141) | $ (27) | $ (431) | $ (39) |
Derivative Instruments in Cash Flow Hedging Relationships | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | 0 | 0 | 0 | (3) |
Derivative Instruments in Cash Flow Hedging Relationships | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | (141) | (27) | (431) | (36) |
Non-derivative Instruments in Net Investment Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | (142) | (7) | (389) | (30) |
Non-derivative Instruments in Net Investment Hedging Relationships | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | $ (142) | $ (7) | $ (389) | $ (30) |
Amount and Location in the In64
Amount and Location in the Income Statement for Derivatives Designated as Fair Value Hedges (Detail) - Fair Value Hedging - Interest Expense - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Amount of Gain (Loss) Recognized in Income | $ (18) | $ (59) | $ (41) | $ 56 |
Fixed-Rate Debt | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedged Items Amount of Gain (Loss) Recognized in Income | $ 18 | $ 59 | $ 41 | $ (56) |
Amount Recorded in Income State
Amount Recorded in Income Statements for Foreign Currency Forward Contracts Not Designated as Hedges (Detail) - Not Designated as Hedging Instrument - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (33) | $ (41) | $ (9) | $ 29 |
Interest rate contracts | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | (2) | (2) | (6) | (6) |
Foreign exchange contracts | Investment income and other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | 14 | (11) | 34 | (117) |
Investment market price contracts | Investment income and other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (45) | $ (28) | $ (37) | $ 152 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 35.00% | 35.00% | 33.90% | 35.10% |
Adjustment to income tax expense | $ 62 | |||
Change in effective income tax rate | 1.10% |