Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 20, 2020 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-15451 | |
Entity Registrant Name | United Parcel Service, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 58-2480149 | |
Entity Address, Street Address | 55 Glenlake Parkway N.E. | |
Entity Address, City | Atlanta, | |
Entity Address, State | GA | |
Entity Address, Postal Zip Code | 30328 | |
City Area Code | 404 | |
Local Phone Number | 828-6000 | |
Title of 12(b) Security | Class B common stock, par value $0.01 per share | |
Trading Symbol | UPS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001090727 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
0.375% Senior Notes due 2023 | ||
Title of 12(b) Security | 0.375% Senior Notes due 2023 | |
Trading Symbol | UPS23A | |
Security Exchange Name | NYSE | |
1.625% Senior Notes due 2025 | ||
Title of 12(b) Security | 1.625% Senior Notes due 2025 | |
Trading Symbol | UPS25 | |
Security Exchange Name | NYSE | |
1% Senior Notes due 2028 | ||
Title of 12(b) Security | 1% Senior Notes due 2028 | |
Trading Symbol | UPS28 | |
Security Exchange Name | NYSE | |
1.500% Senior Notes due 2032 | ||
Title of 12(b) Security | 1.500% Senior Notes due 2032 | |
Trading Symbol | UPS32 | |
Security Exchange Name | NYSE | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 149,181,469 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 715,216,514 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 8,839 | $ 5,238 |
Marketable securities | 402 | 503 |
Accounts receivable | 9,153 | 9,645 |
Less: Allowance for credit losses | (160) | (93) |
Accounts receivable, net | 8,993 | 9,552 |
Other current assets | 1,696 | 1,810 |
Total Current Assets | 19,930 | 17,103 |
Property, Plant and Equipment, Net | 32,164 | 30,482 |
Operating Lease Right-Of-Use Assets | 3,022 | 2,856 |
Goodwill | 3,816 | 3,813 |
Intangible Assets, Net | 2,289 | 2,167 |
Investments and Restricted Cash | 25 | 24 |
Deferred Income Tax Assets | 277 | 330 |
Other Non-Current Assets | 883 | 1,082 |
Total Assets | 62,406 | 57,857 |
Current Liabilities: | ||
Current maturities of long-term debt, commercial paper and finance leases | 2,382 | 3,420 |
Current maturities of operating leases | 560 | 538 |
Accounts payable | 5,609 | 5,555 |
Accrued wages and withholdings | 3,140 | 2,552 |
Self-insurance reserves | 1,128 | 914 |
Accrued group welfare and retirement plan contributions | 857 | 793 |
Other current liabilities | 1,780 | 1,641 |
Total Current Liabilities | 15,456 | 15,413 |
Long-Term Debt and Finance Leases | 23,336 | 21,818 |
Non-Current Operating Leases | 2,473 | 2,391 |
Pension and Postretirement Benefit Obligations | 9,630 | 10,601 |
Deferred Income Tax Liabilities | 2,145 | 1,632 |
Other Non-Current Liabilities | 3,760 | 2,719 |
Shareowners' Equity: | ||
Additional paid-in capital | 490 | 150 |
Retained earnings | 11,115 | 9,105 |
Accumulated other comprehensive loss | (6,022) | (5,997) |
Deferred compensation obligations | 20 | 26 |
Less: Treasury stock (0.4 shares in 2020 and 2019) | (20) | (26) |
Total Equity for Controlling Interests | 5,592 | 3,267 |
Noncontrolling interests | 14 | 16 |
Total Shareowners’ Equity | 5,606 | 3,283 |
Total Liabilities and Shareowners’ Equity | 62,406 | 57,857 |
Class A common stock | ||
Shareowners' Equity: | ||
Common stock | 2 | 2 |
Class B common stock | ||
Shareowners' Equity: | ||
Common stock | $ 7 | $ 7 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Treasury stock, shares | 0.4 | 0.4 |
Class A common stock | ||
Common stock, shares issued | 150 | 156 |
Class B common stock | ||
Common stock, shares issued | 714 | 701 |
STATEMENTS OF CONSOLIDATED INCO
STATEMENTS OF CONSOLIDATED INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | $ 21,238 | $ 18,318 | $ 59,732 | $ 53,526 |
Operating Expenses: | ||||
Compensation and benefits | 11,077 | 9,590 | 32,006 | 28,206 |
Depreciation and amortization | 677 | 587 | 1,986 | 1,730 |
Fuel | 618 | 824 | 1,878 | 2,451 |
Other occupancy | 376 | 346 | 1,114 | 1,039 |
Other expenses | 1,614 | 1,374 | 4,824 | 4,093 |
Total Operating Expenses | 18,875 | 16,190 | 54,085 | 47,861 |
Operating Profit | 2,363 | 2,128 | 5,647 | 5,665 |
Other Income and (Expense): | ||||
Investment income and other | 338 | 237 | 1,011 | 672 |
Interest expense | (176) | (159) | (526) | (487) |
Total Other Income and (Expense) | 162 | 78 | 485 | 185 |
Income Before Income Taxes | 2,525 | 2,206 | 6,132 | 5,850 |
Income Tax Expense | 568 | 456 | 1,442 | 1,304 |
Net Income | $ 1,957 | $ 1,750 | $ 4,690 | $ 4,546 |
Basic Earnings Per Share | $ 2.25 | $ 2.03 | $ 5.42 | $ 5.26 |
Diluted Earnings Per Share | $ 2.24 | $ 2.01 | $ 5.39 | $ 5.23 |
Repairs and maintenance | ||||
Operating Expenses: | ||||
Cost of goods sold | $ 576 | $ 485 | $ 1,693 | $ 1,392 |
Purchased transportation | ||||
Operating Expenses: | ||||
Cost of goods sold | $ 3,937 | $ 2,984 | $ 10,584 | $ 8,950 |
STATEMENTS OF CONSOLIDATED COMP
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 1,957 | $ 1,750 | $ 4,690 | $ 4,546 |
Change in foreign currency translation adjustment, net of tax | 65 | (48) | (66) | (28) |
Change in unrealized gain (loss) on marketable securities, net of tax | (2) | (3) | 3 | 6 |
Change in unrealized gain (loss) on cash flow hedges, net of tax | (195) | 206 | (92) | 270 |
Change in unrecognized pension and postretirement benefit costs, net of tax | 43 | 43 | 130 | 129 |
Comprehensive Income | $ 1,868 | $ 1,948 | $ 4,665 | $ 4,923 |
STATEMENTS OF CONSOLIDATED CASH
STATEMENTS OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows From Operating Activities: | ||
Net Income | $ 4,690 | $ 4,546 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 1,986 | 1,730 |
Pension and postretirement benefit expense | 481 | 566 |
Pension and postretirement benefit contributions | (1,307) | (2,321) |
Self-insurance reserves | 388 | (181) |
Deferred tax (benefit) expense | 566 | 43 |
Stock compensation expense | 508 | 716 |
Other (gains) losses | 164 | 46 |
Changes in assets and liabilities, net of effects of business acquisitions: | ||
Accounts receivable | 352 | 843 |
Other assets | 391 | 778 |
Accounts payable | (450) | (914) |
Accrued wages and withholdings | 1,330 | (506) |
Other liabilities | 120 | 393 |
Other liabilities | 64 | (46) |
Net cash from operating activities | 9,283 | 5,693 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (3,219) | (4,336) |
Proceeds from disposals of property, plant and equipment | 10 | 61 |
Purchases of marketable securities | (202) | (487) |
Sales and maturities of marketable securities | 309 | 817 |
Net change in finance receivables | 24 | 8 |
Cash paid for business acquisitions, net of cash and cash equivalents acquired | (13) | (6) |
Other investing activities | (15) | (84) |
Net cash used in investing activities | (3,106) | (4,027) |
Cash Flows From Financing Activities: | ||
Net change in short-term debt | (1,924) | (1,100) |
Proceeds from long-term borrowings | 5,003 | 4,802 |
Repayments of long-term borrowings | (2,746) | (2,411) |
Purchases of common stock | (224) | (751) |
Issuances of common stock | 214 | 161 |
Dividends | (2,528) | (2,397) |
Other financing activities | (351) | (158) |
Net cash used in financing activities | (2,556) | (1,854) |
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | (19) | 6 |
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 3,602 | (182) |
Cash, Cash Equivalents and Restricted Cash: | ||
Beginning of period | 5,238 | 4,367 |
End of period | $ 8,840 | $ 4,185 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION AND ACCOUNTING POLICIES Principles of Consolidation The accompanying interim unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These interim unaudited, consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of September 30, 2020, our results of operations for the three and nine months ended September 30, 2020 and 2019 and our cash flows for the nine months ended September 30, 2020 and 2019. The results reported in these interim unaudited, consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. The interim unaudited, 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, 2019. 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, 2020 and December 31, 2019. The fair values of our investment securities are disclosed in note 5, our recognized multiemployer pension withdrawal liabilities in note 7, our short- and long-term debt in note 9 and our derivative instruments in note 15. 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. Use of 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 these financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. In particular, a number of estimates have been and will continue to be affected by the ongoing COVID-19 pandemic. The severity, magnitude and duration of the pandemic, and the resulting economic consequences, remain uncertain, rapidly changing and difficult to predict. As a result, our accounting estimates and assumptions may change over time. Such changes could result in future impairments of goodwill, intangible assets, long-lived assets and investment securities, incremental credit losses on financial assets, decreases in the carrying amount of our tax assets, increases in our self-insurance liabilities or increases in our net pension and postretirement benefit obligations at the time of a measurement event. For interim unaudited, consolidated financial statement purposes, we provide for accruals under our various company-sponsored employee benefit plans for each three month period based on one quarter of the estimated annual expense. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") introducing an expected credit loss methodology for the measurement of financial assets not accounted for at fair value. The methodology replaced the probable, incurred loss model for those assets. We adopted this standard on January 1, 2020. Upon adoption, we updated our process for calculating our allowance for credit losses to include reasonable and supportable forecasts that could affect expected collectability. In the third quarter of 2020, we decreased our allowance for credit losses by $6 million (an increase of $44 million year to date) based upon our current forecasts that reflect slight improvements in the economic outlook. In January 2017, the FASB issued an ASU to simplify the accounting for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill using a hypothetical purchase price allocation. Under this ASU, goodwill impairment is the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. We adopted this standard on January 1, 2020. Upon adoption, this ASU did not have a material impact on our consolidated financial position, results of operations or cash flows. In March 2020, the FASB issued an ASU to temporarily ease the potential burden in accounting for reference rate reform. The update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. The guidance was effective upon issuance and generally can be applied through December 31, 2022. We are evaluating the potential impacts of reference rate reform on our various contractual positions to determine whether we may apply any of the practical expedients set forth in this update. For accounting standards adopted in the period ended September 30, 2019, refer to note 1 to our audited, consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019. Other accounting pronouncements adopted during the periods covered by the unaudited, 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 December 2019, the FASB issued an ASU to simplify the accounting for income taxes. The update removes certain exceptions to the general income tax principles. The update will be effective for us in the first quarter of 2021. We are evaluating the impact of its adoption on our consolidated financial statements and internal control over financial reporting environment, but do not expect this ASU to have a material impact on our consolidated financial position, results of operations or cash flows. Other accounting pronouncements issued before, but not effective until after, September 30, 2020, are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Revenue Recognition Substantially all of our revenues are from contracts associated with the pickup, transportation and delivery of packages and freight (“transportation services”), whether carried out by or arranged by UPS, either domestically or internationally, which generally occurs over a short period of time. Additionally, we provide value-added logistics services to customers, both domestically and internationally, through our global network of company-owned and leased distribution centers and field stocking locations. Disaggregation of Revenue Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue: Next Day Air $ 2,098 $ 2,146 $ 6,137 $ 6,160 Deferred 1,378 1,248 3,873 3,494 Ground 9,749 8,061 27,745 23,431 U.S. Domestic Package 13,225 11,455 37,755 33,085 Domestic 776 689 2,183 2,069 Export 3,153 2,673 8,538 7,972 Cargo & Other 158 132 454 417 International Package 4,087 3,494 11,175 10,458 Forwarding 1,753 1,472 4,897 4,384 Logistics 1,040 846 2,862 2,511 Freight 870 852 2,360 2,486 Other 263 199 683 602 Supply Chain & Freight 3,926 3,369 10,802 9,983 Consolidated revenue $ 21,238 $ 18,318 $ 59,732 $ 53,526 We account for a contract when both parties have approved the contract and are committed to perform their obligations, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the basis of revenue recognition in accordance with GAAP. To determine the proper revenue recognition method for contracts, we evaluate whether two or more contracts should be combined and accounted for as a single contract, and whether the combined or single contract should be accounted for as more than one performance obligation. This evaluation requires judgment, and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. Within most of our contracts, the customer contracts with us to provide distinct services, such as transportation services. The vast majority of our contracts with customers for transportation services include only one performance obligation; the transportation services themselves. However, if a contract is separated into more than one performance obligation, we allocate the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We frequently sell standard transportation services with observable standalone sales prices. In these instances, the observable standalone sales are used to determine the standalone selling price. In certain business units, such as Logistics, we sell customized, customer-specific solutions in which we integrate a complex set of tasks and components into a single capability (even if that single capability results in the delivery of multiple units). Hence, the entire contract is accounted for as one performance obligation. In these cases we typically use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. Satisfaction of Performance Obligations We generally recognize revenue over time as we perform the services in the contract because of the continuous transfer of control to the customer. Our customers receive the benefit of our services as the goods are transported from one location to another. Further, if we were unable to complete delivery to the final location, another entity would not need to re-perform the transportation service already performed. As control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We use the cost-to-cost measure of progress for our package delivery contracts because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including ancillary or accessorial fees and reductions for estimated customer incentives, are recorded proportionally as costs are incurred. Costs to fulfill include labor and other direct costs and an allocation of indirect costs. For our freight and freight forwarding contracts, an output method of progress based on time-in-transit is utilized as the timing of costs incurred does not best depict the transfer of control to the customer. In our Logistics business, we have a right to consideration from customers in an amount that corresponds directly with the value to the customers of our performance completed to date, and as such, we recognize revenue in the amount to which we have a right to invoice the customer. Variable Consideration It is common for our contracts to contain customer incentives, guaranteed service refunds or other provisions that can either increase or decrease the transaction price. These variable amounts are generally dependent upon achievement of certain incentive tiers or performance metrics. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts of revenue, which may be reduced by incentives or other contract provisions, in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based on an assessment of anticipated customer spending and all information (historical, current and forecasted) that is reasonably available to us. Contract Modifications Contracts are often modified to account for changes in the rates we charge our customers or to add additional distinct services. We consider contract modifications to exist when the modification either creates new, or changes the existing, enforceable rights and obligations. Contract modifications that add additional distinct goods or services are treated as separate contracts. Contract modifications that do not add distinct goods or services typically change the price of existing services. These contract modifications are accounted for prospectively as the remaining performance obligations are distinct. Payment Terms Under the typical payment terms of our customer contracts, the customer pays at periodic intervals, which are generally seven days within our U.S. Domestic Package business, for shipments included on invoices received. Invoices are generated each week on the week-ending day, which is Saturday for the majority of our U.S. Domestic Package business, but could be another day depending on the business unit or the specific agreement with the customer. It is not customary business practice to extend payment terms past 90 days, and as such, we do not have a practice of including a significant financing component within our contracts with customers. Principal vs. Agent Considerations In our transportation businesses, we utilize independent contractors and third-party carriers in the performance of some transportation services. GAAP requires us to evaluate, using a control model, whether our businesses themselves promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent). Based on our evaluation of the control model, we determined that all of our major businesses act as the principal rather than the agent within their revenue arrangements. Revenue and the associated purchased transportation costs are both reported on a gross basis within our statements of consolidated income. Accounts Receivable, Net Accounts receivable, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. Losses on accounts receivable are recognized when reasonable and supportable forecasts affect the expected collectability. This requires us to make our best estimate of the current expected losses inherent in our accounts receivable at each balance sheet date. These estimates require consideration of historical loss experience, adjusted for current conditions, forward looking indicators, trends in customer payment frequency and judgments about the probable effects of relevant observable data, including present and future economic conditions and the financial health of specific customers and market sectors. Our risk management process includes standards and policies for reviewing major account exposures and concentrations of risk. In the third quarter, we decreased our allowance for expected credit losses by $6 million (an increase of $44 million year to date) based upon current forecasts that reflect slight improvements in the economic outlook. Our allowance for credit losses as of September 30, 2020 and December 31, 2019 was $160 and $93 million, respectively. Amounts for credit losses charged to expense before recoveries during the three months ended September 30, 2020 and 2019 were $51 and $40 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $204 and $145 million, respectively. Contract Assets and Liabilities Contract assets include billed and unbilled amounts resulting from in-transit packages, as we have an unconditional right to payment only once all performance obligations have been completed (i.e., packages have been delivered), and our right to payment is not solely based on the passage of time. Amounts may not exceed their net realizable value. Contract assets are generally classified as current and the full balance is converted each quarter based on the short-term nature of the transactions. Contract liabilities consist of advance payments and billings in excess of revenue as well as deferred revenue. Advance payments and billings in excess of revenue represent payments received from our customers that will be earned over the contract term. Deferred revenue represents the amount of consideration due from customers related to in-transit shipments that has not yet been recognized as revenue based on our selected measure of progress. We classify advance payments and billings in excess of revenue as either current or long-term, depending on the period over which the advance payment will be earned. We classify deferred revenue as current based on the timing of when we expect to recognize revenue, which typically occurs within a short window after period-end. The full balance of deferred revenue is converted each quarter based on the short-term nature of the transactions. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. In order to determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that deferred revenue balance. Contract assets related to in-transit packages were $368 and $272 million at September 30, 2020 and December 31, 2019, respectively, net of deferred revenue related to in-transit packages of $463 and $264 million at September 30, 2020 and December 31, 2019, respectively. Contract assets are included within "Other current assets" in the consolidated balance sheets. Short-term contract liabilities related to advance payments from customers were $8 and $7 million at September 30, 2020 and December 31, 2019, respectively. Short-term contract liabilities are included within "Other current liabilities" in the consolidated balance sheets. Long-term contract liabilities related to advance payments from customers were $26 million at both September 30, 2020 and December 31, 2019. Long-term contract liabilities are included within "Other Non-Current Liabilities" in the consolidated balance sheets. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION We issue share-based awards under various incentive compensation plans, which permit 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") We award Restricted Units under the MIP to certain eligible management employees. For Restricted Units granted under the MIP prior to 2019, vesting generally occurs ratably over a five-year period 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 grant value is expensed on a straight-line basis (less estimated forfeitures) over the requisite service period (except in the case of death, disability or retirement, in which case immediate expensing occurs). These historical awards will continue to vest through 2023. Beginning with the MIP grant in the first quarter of 2019, Restricted Units vest one year following the grant date (except in the case of death, disability or retirement, in which case immediate vesting occurs). The grant value is expensed on a straight-line basis (less estimated forfeitures) over the requisite service period (except in the case of death, disability or retirement, in which case immediate expensing occurs). Based on the date that the eligible management population and performance targets were approved for the 2019 MIP, we determined the award measurement dates to be February 6, 2020 (for U.S.-based employees), February 12, 2020 (for executive management) and March 23, 2020 (for international-based employees); therefore, the Restricted Units awarded were valued for stock compensation expense purposes using the closing New York Stock Exchange ("NYSE") price of $106.51, $105.54 and $91.90 on those dates, respectively. Long-Term Incentive Performance Award Program ("LTIP") We award Restricted Units under the LTIP to certain eligible management employees. These Restricted Units generally vest at the end of a three-year performance 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 is based on the achievement of the performance targets established on the grant date. For awards granted prior to 2020, the performance targets are equally-weighted among consolidated operating return on invested capital ("ROIC"), growth in currency-constant consolidated revenue and total shareholder return ("RTSR") relative to a peer group of companies. For the two-thirds of the award related to ROIC 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. The remaining one-third of the award related to RTSR is valued using a Monte Carlo model. We recognize the grant date fair value of this portion of the award (less estimated forfeitures) as compensation expense ratably over the vesting period. Beginning with the LTIP grant that was made in the second quarter of 2020, the performance targets are equally weighted between adjusted earnings per share and adjusted cumulative free cash flow. The final number of Restricted Units earned will then be subject to adjustment based on RTSR relative to the Standard & Poors 500 Index ("S&P 500"). We determine the grant date fair value of the Restricted Units using a Monte Carlo model and recognize compensation expense (less estimated forfeitures) ratably over the vesting period, based on the number of awards expected to be earned. For the 2020 award, the LTIP will be subdivided into two measurement periods. The first measurement period will evaluate the achievement of the performance targets for the year 2020. The second measurement period will evaluate the achievement of the performance targets for the years 2021 through 2022. The performance targets for the second measurement period will be determined at a future date. Based on the date that the eligible management employees and performance targets were approved for the 2020 LTIP, we determined the award measurement date for the first measurement period to be May 13, 2020. The target Restricted Units awarded were valued at $91.65. In the second quarter, we awarded a one-time grant of Restricted Units to one participant that will vest over the same period as the 2020 LTIP. Based on the date that the Compensation Committee approved this award, we determined the award measurement date for the first measurement period to be June 1, 2020 and the target Restricted Units awarded were valued at $99.08 using a Monte Carlo valuation. In the third quarter of 2020, we awarded a one-time grant of Restricted Units to one participant that will vest over the same period as the 2020 LTIP. Based on the date that the Compensation Committee approved this award, we determined the award measurement date for the first measurement period to be August 12, 2020 and the target Restricted Units awarded were valued at $186.67 using a Monte Carlo valuation. The weighted-average assumptions used and the calculated weighted-average fair values of the first measurement period for the 2020 LTIP and the RTSR portion of the 2019 LTIP are as follows: 2020 2019 Risk-free interest rate 0.15 % 2.23 % Expected volatility 27.53 % 19.64 % Weighted-average fair value of units granted $ 92.77 $ 123.44 Share payout 101.00 % 115.04 % There is no expected dividend yield as units earn dividend equivalents. Non-Qualified Stock Options We grant non-qualified stock options 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 of the grant date (except in the case of death, disability or retirement, in which case immediate vesting occurs). The options granted expire 10 years after the date of the grant. In the first quarter, we granted 0.3 million stock options at a grant price of $105.54, which was the closing NYSE price on February 12, 2020. In the second quarter, we granted 0.1 million stock options at a grant price of $99.28, which was the closing NYSE price on June 1, 2020. 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 2020 and 2019 are as follows: 2020 2019 Expected dividend yield 3.51 % 2.94 % Risk-free interest rate 1.26 % 2.60 % Expected life (in years) 7.5 7.5 Expected volatility 19.25 % 17.79 % Weighted-average fair value of options granted $ 11.74 $ 16.34 Pre-tax compensation expense for share-based awards recognized in "Compensation and benefits" on the statements of consolidated income for the three months ended September 30, 2020 and 2019 was $140 and $203 million, respectively, and for the nine months ended September 30, 2020 and 2019 was $508 and $716 million |
CASH AND INVESTMENTS
CASH AND INVESTMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Marketable Securities [Abstract] | |
CASH AND INVESTMENTS | CASH AND INVESTMENTS The following is a summary of marketable securities classified as trading and available-for-sale as of September 30, 2020 and December 31, 2019 (in millions): Cost Unrealized Unrealized Estimated September 30, 2020: Current trading marketable securities: Equity securities $ 2 $ — $ — $ 2 Total trading marketable securities 2 — — 2 Current available-for-sale securities: U.S. government and agency debt securities 180 3 — 183 Mortgage and asset-backed debt securities 33 2 — 35 Corporate debt securities 167 4 — 171 Non-U.S. government debt securities 11 — — 11 Total available-for-sale marketable securities 391 9 — 400 Total current marketable securities $ 393 $ 9 $ — $ 402 Cost Unrealized Unrealized Estimated December 31, 2019: Current trading marketable securities: Corporate debt securities $ 112 $ — $ — $ 112 Equity securities 2 — — 2 Total trading marketable securities 114 — — 114 Current available-for-sale securities: U.S. government and agency debt securities 191 2 — 193 Mortgage and asset-backed debt securities 46 1 — 47 Corporate debt securities 130 3 — 133 Non-U.S. government debt securities 16 — — 16 Total available-for-sale marketable securities 383 6 — 389 Total current marketable securities $ 497 $ 6 $ — $ 503 Investment Impairments We have concluded that no material impairment losses existed as of September 30, 2020. In making this determination, we considered the financial condition and prospects of each issuer, the magnitude of the losses compared with the 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, 2020, 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 with or without prepayment penalties. Cost Estimated Due in one year or less $ 29 $ 30 Due after one year through three years 315 320 Due after three years through five years 8 8 Due after five years 39 42 391 400 Equity securities 2 2 $ 393 $ 402 Non-Current Investments and Restricted Cash We held a $22 and $21 million investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan at September 30, 2020 and December 31, 2019, respectively. The quarterly change in investment fair value is recognized in "Investment income and other" in the statements of consolidated income. Additionally, we held escrowed cash related to the acquisition and disposition of certain assets of $2 and $3 million as of September 30, 2020 and December 31, 2019, respectively. We previously held various marketable securities and cash equivalents as collateral under an escrow agreement to guarantee our self-insurance obligations. In 2019, we liquidated this investment balance and pledged the required collateral with a surety bond. At September 30, 2020 and December 31, 2019, we had $1 and $0 million, respectively, in restricted cash. A reconciliation of cash and cash equivalents and restricted cash from the consolidated balance sheets to the statements of consolidated cash flows is shown below (in millions): September 30, 2020 December 31, 2019 September 30, 2019 Cash and cash equivalents $ 8,839 $ 5,238 $ 4,040 Restricted cash 1 — 145 Total cash, cash equivalents and restricted cash $ 8,840 $ 5,238 $ 4,185 Fair Value Measurements Marketable securities valued 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 valued 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. The following table presents information about our investments measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions): Quoted Prices Significant Other Significant Balance September 30, 2020: Marketable Securities: U.S. government and agency debt securities $ 183 $ — $ — $ 183 Mortgage and asset-backed debt securities — 35 — 35 Corporate debt securities — 171 — 171 Equity securities — 2 — 2 Non-U.S. government debt securities — 11 — 11 Total marketable securities 183 219 — 402 Other non-current investments 22 — — 22 Total $ 205 $ 219 $ — $ 424 December 31, 2019: Marketable Securities: U.S. government and agency debt securities $ 193 $ — $ — $ 193 Mortgage and asset-backed debt securities — 47 — 47 Corporate debt securities — 245 — 245 Equity securities — 2 — 2 Non-U.S. government debt securities — 16 — 16 Total marketable securities 193 310 — 503 Other non-current investments 21 — 1 22 Total $ 214 $ 310 $ 1 $ 525 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of September 30, 2020 and December 31, 2019 consisted of the following (in millions): 2020 2019 Vehicles $ 10,604 $ 10,613 Aircraft 19,672 19,045 Land 2,146 2,087 Buildings 5,575 5,046 Building and leasehold improvements 4,888 4,898 Plant equipment 14,088 13,849 Technology equipment 2,695 2,206 Construction-in-progress 2,940 1,983 62,608 59,727 Less: Accumulated depreciation and amortization (30,444) (29,245) $ 32,164 $ 30,482 Property, plant and equipment purchased on account was $835 and $372 million as of September 30, 2020 and December 31, 2019, respectively. We continually monitor our aircraft fleet utilization in light of current and projected volume levels, aviation fuel prices and other factors. Additionally, we monitor all other property, plant and equipment categories for any indicators that the carrying value of the assets may not be recoverable. There were no material impairment charges during the nine months ended September 30, 2020 or 2019. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Company-Sponsored Benefit Plans Information about the net periodic benefit cost for our company-sponsored pension and postretirement benefit plans for the three and nine months ended September 30, 2020 and 2019 is as follows (in millions): U.S. Pension Benefits U.S. Postretirement International 2020 2019 2020 2019 2020 2019 Three Months Ended September 30: Service cost $ 463 $ 360 $ 7 $ 6 $ 17 $ 15 Interest cost 495 516 23 27 10 12 Expected return on assets (887) (782) (2) (2) (22) (19) Amortization of prior service cost 55 55 1 2 — — Net periodic benefit cost $ 126 $ 149 $ 29 $ 33 $ 5 $ 8 U.S. Pension Benefits U.S. Postretirement International 2020 2019 2020 2019 2020 2019 Nine Months Ended September 30: Service cost $ 1,390 $ 1,079 $ 22 $ 18 $ 50 $ 43 Interest cost 1,483 1,550 68 81 30 35 Expected return on assets (2,662) (2,347) (6) (6) (64) (57) Amortization of prior service cost 164 164 5 5 1 1 Net periodic benefit cost $ 375 $ 446 $ 89 $ 98 $ 17 $ 22 The components of net periodic benefit cost other than current service cost are presented within “Investment income and other” in the statements of consolidated income. During the first nine months of 2020, we contributed $1.1 billion and $242 million to our company-sponsored pension and U.S. postretirement medical benefit plans, respectively. We currently expect to contribute approximately $24 million over the remainder of the year to our pension benefit plans. Subject to market conditions, we continually evaluate opportunities for additional discretionary pension contributions. Multiemployer Benefit Plans We contribute to a number of multiemployer defined benefit and health and welfare plans under the 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, 2020 and December 31, 2019, we had $839 and $845 million, respectively, recorded in "Other Non-Current Liabilities" and $7 million as of both September 30, 2020 and December 31, 2019, 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 42 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, 2020 and December 31, 2019 was $991 and $929 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 CSPF 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. Under our withdrawal agreement with the CSPF, benefits to the UPS Transfer Group cannot be reduced without our consent and can only be reduced in accordance with applicable law. In December 2014, Congress passed the Multiemployer Pension Reform Act (“MPRA”). This change in law for the first time permitted 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 (“Treasury”). In May 2016, Treasury rejected the proposed plan submitted by the CSPF. In the first quarter of 2018, Congress established a Joint Select Committee to develop a recommendation to improve the solvency of multiemployer plans and the Pension Benefit Guaranty Corporation (“PBGC”) before a November 30, 2018 deadline. While the Committee’s efforts failed to meet its deadline, the Committee made significant progress towards finding solutions that will address the long-term solvency of multiemployer pension plans. In the third quarter of 2019, the U.S. House of Representatives passed the Rehabilitation for Multiemployer Pensions Act of 2019 to provide assistance to critical and declining multiemployer pension plans. Additionally, in 2020, the U.S. House of Representatives passed two versions of the Health and Economic Recovery Omnibus Emergency Solutions Act ("HEROES Act"), which would provide financial support to those same plans. These bills are with the U.S. Senate for consideration. UPS will continue to work with all stakeholders, including legislators and regulators, to implement an acceptable solution. The CSPF has said that it believes a legislative solution to its funded status is necessary or that it will become insolvent in 2025, and we expect that the CSPF will continue to explore options to avoid insolvency. Numerous factors could affect the CSPF’s funded status and UPS’s potential obligation to pay coordinating benefits under the UPS/IBT Plan. Any obligation to pay coordinating benefits will be subject to a number of significant uncertainties, including whether the CSPF submits a revised MPRA filing and the terms thereof, or whether it otherwise seeks federal government assistance, as well as the terms of any applicable legislation, the extent to which benefits are paid by the PBGC and our ability to successfully defend legal positions we may take in the future under the MPRA, including the suspension ordering provisions, our withdrawal agreement and other applicable law. We account for the potential obligation to pay coordinating benefits to the UPS Transfer Group under Accounting Standards Codification Topic 715- Compensation- Retirement Benefits (“ASC 715”), which requires us 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 outcome 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. As such, our best estimate of the next most likely outcome at the December 31, 2019 measurement date was that the CSPF would submit and implement another benefit reduction plan under the MPRA during 2020. We believe any MPRA filing would be designed to forestall insolvency by reducing benefits to participants other than the UPS Transfer Group to the maximum extent permitted, and then reducing benefits to the UPS Transfer Group by a lesser amount. We evaluated this outcome using a deterministic cash flow projection, reflecting updated estimated CSPF cash flows and investment earnings, the lack of legislative action and the absence of a MPRA filing by the CSPF in 2019. As a result, at the December 31, 2019 measurement date, the best estimate of our projected benefit obligation for coordinating benefits that may be required to be directly provided by the UPS/IBT Plan to the UPS Transfer Group was $2.6 billion. The future value of this estimate will be influenced by the terms and timing of any MPRA filing, changes in our discount rate, rate of return on assets and other actuarial assumptions, presumed solvency of the PBGC, as well as potential solutions resulting from federal government intervention. Any such event may result in a decrease or an increase in the best estimate of our projected benefit obligation. If the uncertainties are not resolved, it is reasonably possible that our projected benefit obligation could increase by approximately $2.2 billion at the December 31, 2020 measurement date, resulting in a total obligation for coordinating benefits of approximately $4.8 billion. If a future change in law occurs, it may be a significant event requiring an interim remeasurement of the UPS/IBT Plan at the date the law is enacted. We will continue to assess the impact of these uncertainties on our projected benefit obligation in accordance with ASC 715. Collective Bargaining Agreements We have approximately 290,000 employees employed under a national master agreement and various supplemental agreements with local unions affiliated with the Teamsters. The current National Master Agreement ("NMA") was ratified on April 28, 2019 and runs through July 31, 2023. Most of the economic provisions of the NMA are retroactive to August 1, 2018, which is the effective date of the NMA. The UPS Freight business unit national master agreement was ratified on November 11, 2018. We have approximately 2,900 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association ("IPA"). This collective bargaining agreement becomes amendable September 1, 2023. We have approximately 1,500 airline mechanics who are covered by a collective bargaining agreement with Teamsters Local 2727 which becomes amendable November 1, 2023. In addition, approximately 3,300 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”). The collective bargaining agreement with the IAM runs through July 31, 2024. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and December 31, 2019 (in millions): U.S. Domestic International Supply Chain & Consolidated December 31, 2019: $ 715 $ 416 $ 2,682 $ 3,813 Acquired — — — — Currency / Other — (2) 5 3 September 30, 2020: $ 715 $ 414 $ 2,687 $ 3,816 The change in goodwill for both the International Package and Supply Chain & Freight segments was primarily due to the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. Dollar goodwill balances. Goodwill Impairment We completed our annual goodwill impairment assessment for all reporting units and indefinite-lived intangible assets as of July 1, 2020 and determined that no impairments had occurred. We continue to monitor our reporting units and indefinite-lived intangible assets for indications of triggering events that would require an update to our annual impairment evaluation between the annual assessment date and December 31, 2020. There were no triggering events identified during the third quarter. The following is a summary of intangible assets as of September 30, 2020 and December 31, 2019 (in millions): Gross Carrying Accumulated Net Carrying September 30, 2020: Capitalized software $ 4,460 $ (2,890) $ 1,570 Licenses 156 (84) 72 Franchise rights 158 (112) 46 Customer relationships 720 (325) 395 Trade name 200 — 200 Trademarks, patents and other 23 (17) 6 Total Intangible Assets, Net $ 5,717 $ (3,428) $ 2,289 December 31, 2019: Capitalized software $ 4,125 $ (2,704) $ 1,421 Licenses 117 (64) 53 Franchise rights 146 (109) 37 Customer relationships 730 (282) 448 Trade name 200 — 200 Trademarks, patents and other 29 (21) 8 Total Intangible Assets, Net $ 5,347 $ (3,180) $ 2,167 As of September 30, 2020, we had a trade name with a carrying value of $200 million and licenses with a carrying value of $4 million, which are deemed to be indefinite-lived intangible assets and are included in the table above. Impairment tests for finite-lived intangible assets are performed when a triggering event occurs that may indicate that the carrying value of the intangible asset may not be recoverable. We have recorded $4 million in impairment charges for finite-lived intangible assets during 2020. There was no impairment in 2019. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASES We recognize a right-of-use ("ROU") asset and lease liability for all leases. Some of our leases contain both lease and non-lease components, which we have elected to treat as a single lease component. We have also elected not to recognize leases that have an original lease term, including reasonably certain renewal or purchase options, of twelve months or less in our consolidated balance sheets for all classes of underlying assets. Lease costs for short-term leases are recognized on a straight-line basis over the lease term. We elected the package of transition practical expedients for existing contracts, which allowed us to carry forward our historical assessments of whether contracts are, or contain, leases, lease classification and determination of initial direct costs. We lease property and equipment under finance and operating leases. We have finance and operating leases for package centers, airport facilities, warehouses, office space, aircraft, aircraft engines, information technology equipment (primarily mainframes, servers and copiers), vehicles and various other equipment used in operating our business. Certain leases for real estate and aircraft contain options to purchase, extend or terminate the lease. Determining the lease term and amount of lease payments to include in the calculation of the ROU asset and lease liability for leases containing options requires the use of judgment to determine whether the exercise of an option is reasonably certain and if the optional period and payments should be included in the calculation of the associated ROU asset and lease liability. In making this determination, we consider all relevant economic factors that would compel us to exercise or not exercise an option. When our leases contain future payments that are dependent on an index or rate, such as the consumer price index, we initially measure the lease liability and ROU asset using the index or rate at the commencement date. In subsequent periods, lease payments dependent on an index or rate are not remeasured. Rather, changes to payments due to a change in an index or rate are recognized in our statements of consolidated income in the period of the change. When available, we use the rate implicit in the lease to discount lease payments; however, the rate implicit in the lease is not readily determinable for substantially all of our leases. For these leases, we use an estimate of our incremental borrowing rate to discount lease payments based on information available at lease commencement. The incremental borrowing rate is derived using multiple inputs including our credit rating, the impact of full collateralization, lease term and denominated currency. The remaining lease terms vary from 1 month to 189 years. Aircraft In addition to the aircraft that we own, we have leases for 324 aircraft. Of these leased aircraft, 27 are classified as finance leases, 16 are classified as operating leases and the remaining 281 are classified as short-term leases. A majority of the obligations associated with the aircraft classified as finance leases have been legally defeased. Most of our long-term aircraft operating leases are operated by a third party to handle package and cargo volume in geographic regions where, due to government regulations, we are restricted from operating an airline. In order to meet customers' needs, we charter aircraft to handle package and cargo volume on certain international trade lanes and domestic routes. Due to the nature of these agreements, primarily being that either party can cancel the agreement with short notice, we have classified these as short-term leases. Additionally, the lease payments associated with these charter agreements are variable in nature based on the number of hours flown. Real Estate We have operating and finance leases for package centers, airport facilities, warehouses, office space and expansion facilities utilized during peak shipping periods. Many of our leases contain charges for common area maintenance or other expenses that are updated based on landlord estimates. Due to this variability, the cash flows associated with these charges are not included in the minimum lease payments used in determining the ROU asset and associated lease liability. Some of our real estate leases contain options to renew or extend the lease or terminate the lease before the expiration date. These options are factored into the determination of the lease term and lease payments when their exercise is considered to be reasonably certain. We also enter into real estate leases that contain lease incentives, such as tenant improvement allowances or move-in allowances, that are received or receivable at lease commencement. These incentives reduce lease payments for classification purposes and reduce the initial ROU asset. When lease incentives are receivable at lease commencement, they also reduce the initial lease liability. From time to time, we enter into leases with the intention of purchasing the property, either through purchase options with a fixed price or a purchase agreement negotiated contemporaneously with the lease agreement. We classify these leases as finance leases and include the purchase date and purchase price in the determination of the lease term and lease payments, respectively, when the option to exercise or purchase is reasonably certain. Transportation equipment and other equipment We enter into both long-term and short-term leases for transportation equipment to supplement our capacity or meet contractual demands. Some of these assets are leased on a month-to-month basis and the leases can be terminated without penalty. The lease term for these types of leases is determined by the length of the underlying customer contract or based on the judgment of the business unit. We also enter into multi-year leases for trailers to increase capacity during periods of high demand, which are typically only used for 90-120 days during the year. These leases are treated as short-term as the cumulative right-of-use is less than 12 months over the term of the contract. The remainder of our leases are primarily related to equipment used in our air operations, vehicles required to meet capacity needs during periods of higher demand for our shipping services, technology equipment and office equipment used in our facilities. Some of our transportation and technology equipment leases require us to make additional lease payments based on the underlying usage of the assets. Due to the variable nature of these costs, these are expensed as incurred and are not included in the ROU asset and lease liability. The components of lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows (in millions): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Operating lease costs $ 180 151 $ 527 $ 474 Finance lease costs: Amortization of assets 20 18 58 55 Interest on lease liabilities 4 5 14 14 Total finance lease costs 24 23 72 69 Variable lease costs 58 69 171 148 Short-term lease costs 260 194 716 633 Total lease costs $ 522 $ 437 $ 1,486 $ 1,324 Supplemental information related to leases and location within our consolidated balance sheets are as follows (in millions, except lease term and discount rate): September 30, December 31, Operating Leases: Operating lease right-of-use assets $ 3,022 $ 2,856 Current maturities of operating leases $ 560 $ 538 Non-current operating leases 2,473 2,391 Total operating lease liabilities $ 3,033 $ 2,929 Finance Leases: Property, plant and equipment, net $ 1,289 $ 1,502 Current maturities of long-term debt, commercial paper and finance leases $ 88 $ 181 Long-term debt and finance leases 323 317 Total finance lease liabilities $ 411 $ 498 Weighted average remaining lease term (in years): Operating leases 9.4 9.7 Finance leases 9.4 8.9 Weighted average discount rate: Operating leases 2.56 % 2.78 % Finance leases 4.25 % 4.03 % Supplemental cash flow information related to leases is as follows (in millions): Nine Months Ended 2020 2019 Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 508 $ 455 Operating cash flows from finance leases 11 11 Financing cash flows from finance leases 136 121 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 544 $ 144 Finance leases 50 61 Maturities of lease liabilities as of September 30, 2020 are as follows (in millions): Finance Leases Operating Leases 2020 $ 61 $ 148 2021 62 634 2022 56 541 2023 45 440 2024 37 323 Thereafter 252 1,504 Total lease payments 513 3,590 Less: Imputed interest (102) (557) Total lease obligations 411 3,033 Less: Current obligations (88) (560) Long-term lease obligations $ 323 $ 2,473 As of September 30, 2020, we have additional leases which have not commenced. These leases will commence in 2020 and 2021 when we are granted access to the property, such as when leasehold improvements are completed by the lessor or a certificate of occupancy is obtained. |
LEASES | LEASES We recognize a right-of-use ("ROU") asset and lease liability for all leases. Some of our leases contain both lease and non-lease components, which we have elected to treat as a single lease component. We have also elected not to recognize leases that have an original lease term, including reasonably certain renewal or purchase options, of twelve months or less in our consolidated balance sheets for all classes of underlying assets. Lease costs for short-term leases are recognized on a straight-line basis over the lease term. We elected the package of transition practical expedients for existing contracts, which allowed us to carry forward our historical assessments of whether contracts are, or contain, leases, lease classification and determination of initial direct costs. We lease property and equipment under finance and operating leases. We have finance and operating leases for package centers, airport facilities, warehouses, office space, aircraft, aircraft engines, information technology equipment (primarily mainframes, servers and copiers), vehicles and various other equipment used in operating our business. Certain leases for real estate and aircraft contain options to purchase, extend or terminate the lease. Determining the lease term and amount of lease payments to include in the calculation of the ROU asset and lease liability for leases containing options requires the use of judgment to determine whether the exercise of an option is reasonably certain and if the optional period and payments should be included in the calculation of the associated ROU asset and lease liability. In making this determination, we consider all relevant economic factors that would compel us to exercise or not exercise an option. When our leases contain future payments that are dependent on an index or rate, such as the consumer price index, we initially measure the lease liability and ROU asset using the index or rate at the commencement date. In subsequent periods, lease payments dependent on an index or rate are not remeasured. Rather, changes to payments due to a change in an index or rate are recognized in our statements of consolidated income in the period of the change. When available, we use the rate implicit in the lease to discount lease payments; however, the rate implicit in the lease is not readily determinable for substantially all of our leases. For these leases, we use an estimate of our incremental borrowing rate to discount lease payments based on information available at lease commencement. The incremental borrowing rate is derived using multiple inputs including our credit rating, the impact of full collateralization, lease term and denominated currency. The remaining lease terms vary from 1 month to 189 years. Aircraft In addition to the aircraft that we own, we have leases for 324 aircraft. Of these leased aircraft, 27 are classified as finance leases, 16 are classified as operating leases and the remaining 281 are classified as short-term leases. A majority of the obligations associated with the aircraft classified as finance leases have been legally defeased. Most of our long-term aircraft operating leases are operated by a third party to handle package and cargo volume in geographic regions where, due to government regulations, we are restricted from operating an airline. In order to meet customers' needs, we charter aircraft to handle package and cargo volume on certain international trade lanes and domestic routes. Due to the nature of these agreements, primarily being that either party can cancel the agreement with short notice, we have classified these as short-term leases. Additionally, the lease payments associated with these charter agreements are variable in nature based on the number of hours flown. Real Estate We have operating and finance leases for package centers, airport facilities, warehouses, office space and expansion facilities utilized during peak shipping periods. Many of our leases contain charges for common area maintenance or other expenses that are updated based on landlord estimates. Due to this variability, the cash flows associated with these charges are not included in the minimum lease payments used in determining the ROU asset and associated lease liability. Some of our real estate leases contain options to renew or extend the lease or terminate the lease before the expiration date. These options are factored into the determination of the lease term and lease payments when their exercise is considered to be reasonably certain. We also enter into real estate leases that contain lease incentives, such as tenant improvement allowances or move-in allowances, that are received or receivable at lease commencement. These incentives reduce lease payments for classification purposes and reduce the initial ROU asset. When lease incentives are receivable at lease commencement, they also reduce the initial lease liability. From time to time, we enter into leases with the intention of purchasing the property, either through purchase options with a fixed price or a purchase agreement negotiated contemporaneously with the lease agreement. We classify these leases as finance leases and include the purchase date and purchase price in the determination of the lease term and lease payments, respectively, when the option to exercise or purchase is reasonably certain. Transportation equipment and other equipment We enter into both long-term and short-term leases for transportation equipment to supplement our capacity or meet contractual demands. Some of these assets are leased on a month-to-month basis and the leases can be terminated without penalty. The lease term for these types of leases is determined by the length of the underlying customer contract or based on the judgment of the business unit. We also enter into multi-year leases for trailers to increase capacity during periods of high demand, which are typically only used for 90-120 days during the year. These leases are treated as short-term as the cumulative right-of-use is less than 12 months over the term of the contract. The remainder of our leases are primarily related to equipment used in our air operations, vehicles required to meet capacity needs during periods of higher demand for our shipping services, technology equipment and office equipment used in our facilities. Some of our transportation and technology equipment leases require us to make additional lease payments based on the underlying usage of the assets. Due to the variable nature of these costs, these are expensed as incurred and are not included in the ROU asset and lease liability. The components of lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows (in millions): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Operating lease costs $ 180 151 $ 527 $ 474 Finance lease costs: Amortization of assets 20 18 58 55 Interest on lease liabilities 4 5 14 14 Total finance lease costs 24 23 72 69 Variable lease costs 58 69 171 148 Short-term lease costs 260 194 716 633 Total lease costs $ 522 $ 437 $ 1,486 $ 1,324 Supplemental information related to leases and location within our consolidated balance sheets are as follows (in millions, except lease term and discount rate): September 30, December 31, Operating Leases: Operating lease right-of-use assets $ 3,022 $ 2,856 Current maturities of operating leases $ 560 $ 538 Non-current operating leases 2,473 2,391 Total operating lease liabilities $ 3,033 $ 2,929 Finance Leases: Property, plant and equipment, net $ 1,289 $ 1,502 Current maturities of long-term debt, commercial paper and finance leases $ 88 $ 181 Long-term debt and finance leases 323 317 Total finance lease liabilities $ 411 $ 498 Weighted average remaining lease term (in years): Operating leases 9.4 9.7 Finance leases 9.4 8.9 Weighted average discount rate: Operating leases 2.56 % 2.78 % Finance leases 4.25 % 4.03 % Supplemental cash flow information related to leases is as follows (in millions): Nine Months Ended 2020 2019 Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 508 $ 455 Operating cash flows from finance leases 11 11 Financing cash flows from finance leases 136 121 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 544 $ 144 Finance leases 50 61 Maturities of lease liabilities as of September 30, 2020 are as follows (in millions): Finance Leases Operating Leases 2020 $ 61 $ 148 2021 62 634 2022 56 541 2023 45 440 2024 37 323 Thereafter 252 1,504 Total lease payments 513 3,590 Less: Imputed interest (102) (557) Total lease obligations 411 3,033 Less: Current obligations (88) (560) Long-term lease obligations $ 323 $ 2,473 As of September 30, 2020, we have additional leases which have not commenced. These leases will commence in 2020 and 2021 when we are granted access to the property, such as when leasehold improvements are completed by the lessor or a certificate of occupancy is obtained. |
LEGAL PROCEEDINGS AND CONTINGEN
LEGAL PROCEEDINGS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
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. Although there can be no assurance as to the ultimate outcome, we have generally denied, or believe we have meritorious defenses and will deny, liability in all pending matters, including (except as otherwise noted herein) the matters described below, and we intend to vigorously defend each matter. We accrue amounts associated with legal proceedings when and to the extent a loss becomes probable and can be reasonably estimated. The actual costs of resolving legal proceedings may be substantially higher or lower than the amounts accrued on those claims. For matters as to which we are not able to estimate a possible loss or range of losses, we are not able to determine whether any such loss will have a material impact on our operations or financial condition. 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 losses. Judicial Proceedings 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 million and penalties of $238 million. Following an appeal, on November 7, 2019, the U.S. Court of Appeals for the Second Circuit issued an order awarding the plaintiffs damages of $19 million and penalties of $79 million. An accrual of $100 million with respect to this matter had previously been included on our consolidated balance sheets. The U.S. Supreme Court recently denied our petition for writ of certiorari, and we have now paid and fully satisfied this judgment. 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 any such matter will have a material impact on our operations or financial condition. One of these matters, Hughes v. UPS Supply Chain Solutions, Inc. and United Parcel Service, Inc. had previously been certified as a class action in Kentucky state court. In the second quarter of 2019, the court granted our motion for judgment on the pleadings related to the wage-and-hour claims. The plaintiffs have appealed this decision. Other Matters In October 2015, the Department of Justice ("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. An immaterial accrual with respect to this matter is included on our consolidated balance sheets. We do not believe that any loss from this matter would have a material impact on our operations or financial condition, although we are unable to predict what action, if any, might be taken in the future by any government authorities as a result of their investigation. In August 2016, Spain’s National Markets and Competition Commission (“CNMC”) announced 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 Proposed Decision from the CNMC. On March 8, 2018, the CNMC adopted a final decision, finding an infringement and imposing an immaterial fine on UPS. UPS appealed the decision and in September 2018, obtained a suspension of the implementation of the decision (including payment of the fine). The appeal is pending. We do not believe that any loss from this matter would have a material impact on our operations or financial condition. We are vigorously defending ourselves and believe that we have a number of meritorious legal defenses. There are also unresolved questions of law and fact that could be important to the ultimate resolution of this matter. In May 2020, the Environmental Protection Agency (the “EPA”) sent us an information request related to hazardous waste regulatory compliance at certain of our facilities. The EPA has indicated that it is investigating potential recordkeeping violations of the Resource Conservation and Recovery Act at those facilities. We are cooperating with the EPA. An immaterial accrual with respect to this matter is included in our consolidated balance sheets. We do not believe that any loss from this matter would have a material impact on our operations or financial condition, although we are unable to predict what action, if any, might be taken in the future by the EPA as a result of this request. We are a party in various other matters that arose in the normal course of business. We do not believe that the eventual resolution of these other matters (either individually or in the aggregate), including any reasonably possible losses in excess of current accruals, will have a material impact on our operations or financial condition. |
SHAREOWNERS' EQUITY
SHAREOWNERS' EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
SHAREOWNERS' EQUITY | SHAREOWNERS' EQUITY Capital Stock, Additional Paid-In Capital, Retained Earnings and Non-Controlling Minority Interest We maintain two classes of common stock, which are distinguished from each other by their respective voting rights. Class A shares of UPS are entitled to 10 votes per share, whereas class B shares are entitled to one vote per share. Class A shares are primarily held by UPS employees and retirees, as well as trusts and descendants of the Company's founders, and these shares are fully convertible into class B shares at any time. Class B shares are publicly traded on the NYSE under the symbol “UPS”. Class A and B shares both have a $0.01 par value, and as of September 30, 2020, there were 4.6 billion class A shares and 5.6 billion class B shares authorized to be issued. Additionally, there are 200 million preferred shares authorized to be issued, with a par value of $0.01 per share. As of September 30, 2020, no preferred shares had been issued. The following is a rollforward of our common stock, additional paid-in capital, retained earnings and non-controlling minority interest accounts for the three and nine months ended September 30, 2020 and 2019 (in millions, except per share amounts): Three Months Ended September 30: 2020 2019 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 157 $ 2 161 $ 2 Common stock purchases — — (1) — Stock award plans — — — — Common stock issuances 1 — 1 — Conversions of class A to class B common stock (8) — (4) — Class A shares issued at end of period 150 $ 2 157 $ 2 Class B Common Stock Balance at beginning of period 706 $ 7 698 $ 7 Common stock purchases — — (1) — Conversions of class A to class B common stock 8 — 4 — Class B shares issued at end of period 714 $ 7 701 $ 7 Additional Paid-In Capital Balance at beginning of period $ 255 $ 102 Common stock purchases — (251) Stock award plans 145 202 Common stock issuances 90 56 Option premiums paid — 20 Balance at end of period $ 490 $ 129 Retained Earnings Balance at beginning of period $ 10,032 $ 9,109 Net income attributable to common shareowners 1,957 1,750 Dividends ($1.01 and $0.96 per share) (1) (873) (825) Other (1) 3 Balance at end of period $ 11,115 $ 10,037 Non-Controlling Minority Interest Balance at beginning of period $ 13 $ 18 Change in non-controlling minority interest 1 (2) Balance at end of period $ 14 $ 16 (1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $28 and $27 million as of September 30, 2020 and September 30, 2019 respectively, that were settled in shares of class A common stock. Nine Months Ended September 30: 2020 2019 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 156 $ 2 163 $ 2 Common stock purchases — — (3) — Stock award plans 6 — 4 — Common stock issuances 3 — 2 — Conversions of class A to class B common stock (15) — (9) — Class A shares issued at end of period 150 $ 2 157 $ 2 Class B Common Stock Balance at beginning of period 701 $ 7 696 $ 7 Common stock purchases (2) — (4) — Conversions of class A to class B common stock 15 — 9 — Class B shares issued at end of period 714 $ 7 701 $ 7 Additional Paid-In Capital Balance at beginning of period $ 150 $ — Common stock purchases (217) (753) Stock award plans 215 584 Common stock issuances 342 277 Option premiums received (paid) — 21 Balance at end of period $ 490 $ 129 Retained Earnings Balance at beginning of period $ 9,105 $ 8,006 Net income attributable to common shareowners 4,690 4,546 Dividends ($3.03 and $2.88 per share) (1) (2,679) (2,518) Other (1) 3 Balance at end of period $ 11,115 $ 10,037 Non-Controlling Minority Interest Balance at beginning of period $ 16 $ 16 Change in non-controlling minority interest (2) — Balance at end of period $ 14 $ 16 (1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $151 and $121 million as of September 30, 2020 and September 30, 2019 respectively, that were settled in shares of class A common stock. In May 2016, the Board of Directors approved a share repurchase authorization of $8.0 billion for shares of class A and class B common stock, which has no expiration date. As of September 30, 2020, we had $2.1 billion of this share repurchase authorization available. Share repurchases may be in the form of accelerated share repurchase programs, open market purchases or other methods we deem appropriate. The timing of share repurchases will depend upon market conditions. Unless terminated earlier by the Board, the program will expire when we have purchased all shares authorized for repurchase under the program. We did not repurchase any shares under this program during the three months ended September 30, 2020. During the three months ended September 30, 2019, we repurchased 2.2 million shares of class A and class B common stock for $251 million. We repurchased 2.1 and 7.0 million shares of class A and class B common stock for $217 and $753 million during the nine months ended September 30, 2020 and 2019, respectively ($224 million and $751 million in repurchases for 2020 and 2019, respectively, are reported on the statements of consolidated cash flows due to the timing of settlements). From time to time, we enter into share repurchase programs with large financial institutions to assist in our buyback of company stock. These programs may allow us to repurchase our shares at a price below the weighted average share price for a given period. During 2020 and 2019, 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 predetermined amount of cash or stock. Upon expiration of each agreement, if the closing market price of our common stock is above the predetermined price, we will have our initial investment returned with a premium in either cash or shares (at our election). If the closing market price of our common stock is at or below the predetermined price, we will receive the number of shares specified in the agreement. We received net premiums of $20 and $21 million during the three and nine months ended September 30, 2019, respectively, related to entering into and settling capped call options for the purchase of class B shares. As of September 30, 2020, we had no capped call options outstanding. On April 28, 2020 we announced our intention to suspend stock repurchases. Movements in additional paid-in capital in respect of stock award plans comprise accruals for unvested awards, offset by adjustments for awards that vest during the period. The movements for the three and nine months ended September 30, 2020 were driven by changes in the vesting schedule for certain of our awards. Accumulated Other Comprehensive Income (Loss) We recognize activity in 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 three and nine months ended September 30, 2020 and 2019 was as follows (in millions): Three Months Ended September 30: 2020 2019 Foreign currency translation gain (loss), net of tax: Balance at beginning of period $ (1,209) $ (1,106) Translation adjustment (net of tax effect of $(14) and $41) 65 (48) Balance at end of period (1,144) (1,154) Unrealized gain (loss) on marketable securities, net of tax: Balance at beginning of period 9 7 Current period changes in fair value (net of tax effect of $0 and $1) (1) 2 Reclassification to earnings (net of tax effect of $0 and $(1)) (1) (5) Balance at end of period 7 4 Unrealized gain (loss) on cash flow hedges, net of tax: Balance at beginning of period 215 104 Current period changes in fair value (net of tax effect of $(53) and $79) (168) 251 Reclassification to earnings (net of tax effect of $(8) and $(14)) (27) (45) Balance at end of period 20 310 Unrecognized pension and postretirement benefit costs, net of tax: Balance at beginning of period (4,948) (3,820) Reclassification to earnings (net of tax effect of $13 and $14) 43 43 Balance at end of period (4,905) (3,777) Accumulated other comprehensive income (loss) at end of period $ (6,022) $ (4,617) Nine Months Ended September 30: 2020 2019 Foreign currency translation gain (loss), net of tax: Balance at beginning of period $ (1,078) $ (1,126) Translation adjustment (net of tax effect of $(15) and $43) (66) (28) Balance at end of period (1,144) (1,154) Unrealized gain (loss) on marketable securities, net of tax: Balance at beginning of period 4 (2) Current period changes in fair value (net of tax effect of $1 and $4) 6 11 Reclassification to earnings (net of tax effect of $(1) in both periods) (3) (5) Balance at end of period 7 4 Unrealized gain (loss) on cash flow hedges, net of tax: Balance at beginning of period 112 40 Current period changes in fair value (net of tax effect of $10 and $112) 33 355 Reclassification to earnings (net of tax effect of $(39) and $(27)) (125) (85) Balance at end of period 20 310 Unrecognized pension and postretirement benefit costs, net of tax: Balance at beginning of period (5,035) (3,906) Reclassification to earnings (net of tax effect of $40 and $41) 130 129 Balance at end of period (4,905) (3,777) Accumulated other comprehensive income (loss) at end of period $ (6,022) $ (4,617) Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and nine months ended September 30, 2020 and 2019 was as follows (in millions): Amount Reclassified from AOCI Affected Line Item in the Income Statement Three Months Ended September 30: 2020 2019 Unrealized gain (loss) on marketable securities: Realized gain (loss) on sale of securities $ 1 $ 6 Investment income and other Income tax (expense) benefit — (1) Income tax expense Impact on net income 1 5 Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (3) (3) Interest expense Foreign exchange contracts 38 62 Revenue Income tax (expense) benefit (8) (14) Income tax expense Impact on net income 27 45 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (56) (57) Investment income and other Income tax (expense) benefit 13 14 Income tax expense Impact on net income (43) (43) Net income Total amount reclassified for the period $ (15) $ 7 Net income Amount Reclassified from AOCI Affected Line Item in the Income Statement Nine Months Ended September 30: 2020 2019 Unrealized gain (loss) on marketable securities: Realized gain (loss) on sale of securities $ 4 $ 6 Investment income and other Income tax (expense) benefit (1) (1) Income tax expense Impact on net income 3 5 Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (9) (12) Interest expense Foreign exchange contracts 173 124 Revenue Income tax (expense) benefit (39) (27) Income tax expense Impact on net income 125 85 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (170) (170) Investment income and other Income tax (expense) benefit 40 41 Income tax expense Impact on net income (130) (129) Net income Total amount reclassified for the period $ (2) $ (39) Net income Deferred Compensation Obligations and Treasury Stock Activity in the deferred compensation program for the three and nine months ended September 30, 2020 and 2019 was as follows (in millions): 2020 2019 Three Months Ended September 30: Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 20 $ 25 Reinvested dividends — — Benefit payments — — Balance at end of period $ 20 $ 25 Treasury Stock: Balance at beginning of period — $ (20) — $ (25) Reinvested dividends — — — — Benefit payments — — — — Balance at end of period — $ (20) — $ (25) 2020 2019 Nine Months Ended September 30: Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 26 $ 32 Reinvested dividends 1 1 Benefit payments (7) (8) Balance at end of period $ 20 $ 25 Treasury Stock: Balance at beginning of period — $ (26) (1) $ (32) Reinvested dividends — (1) — (1) Benefit payments — 7 1 8 Balance at end of period — $ (20) — $ (25) |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We report our operations in three segments: U.S. Domestic Package, International Package and Supply Chain & Freight. 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 Forwarding, Logistics, Coyote, Marken, UPS Mail Innovations, UPS Freight and other aggregated business units. Our Forwarding, Logistics and UPS Mail Innovations business units provide services in more than 200 countries and territories worldwide and include international air and ocean freight forwarding, customs 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 United States. 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 audited, consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019, and in the "Results of Operations - Segment Review" section of Management's Discussion and Analysis included in this report. Certain expenses are allocated between the segments using activity-based costing methods. Segment information for the three and nine months ended September 30, 2020 and 2019 is as follows (in millions): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue: U.S. Domestic Package $ 13,225 $ 11,455 $ 37,755 $ 33,085 International Package 4,087 3,494 11,175 10,458 Supply Chain & Freight 3,926 3,369 10,802 9,983 Consolidated $ 21,238 $ 18,318 $ 59,732 $ 53,526 Operating Profit: U.S. Domestic Package $ 1,098 $ 1,216 $ 2,644 $ 3,090 International Package 966 667 2,288 1,858 Supply Chain & Freight 299 245 715 717 Consolidated $ 2,363 $ 2,128 $ 5,647 $ 5,665 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The earnings per share amounts are the same for class A and class B common shares as the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2020 and 2019 (in millions, except per share amounts): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Numerator: Net income attributable to common shareowners $ 1,957 $ 1,750 $ 4,690 $ 4,546 Denominator: Weighted average shares 864 858 861 859 Deferred compensation obligations — — — — Vested portion of restricted units 4 6 5 6 Denominator for basic earnings per share 868 864 866 865 Effect of dilutive securities: Restricted units 4 6 4 4 Stock options — — — — Denominator for diluted earnings per share 872 870 870 869 Basic earnings per share $ 2.25 $ 2.03 $ 5.42 $ 5.26 Diluted earnings per share $ 2.24 $ 2.01 $ 5.39 $ 5.23 There were no antidilutive shares for the three months ended September 30, 2020. Diluted earnings per share for the three months ended September 30, 2019 excluded the effect of 0.3 million shares of common stock that may be issued upon the exercise of employee stock options because such effect would have been antidilutive. Antidilutive shares for the nine months ended September 30, 2020 and 2019 were 0.8 and 0.7 million, respectively. |
DERIVATIVE INSTRUMENTS AND RISK
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT | DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT Risk Management Policies Changes in fuel prices, interest rates and foreign currency exchange rates impact our results of operations and we actively monitor these exposures. To manage the impact of these exposures, we may enter into a variety of derivative financial instruments. Our objective is to manage, 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 from 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 seek to minimize such risk exposures for these instruments by limiting the counterparties to banks and financial institutions that meet established credit guidelines and by monitoring counterparties 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. At September 30, 2020 and December 31, 2019, we held cash collateral of $319 and $495 million, respectively, under these agreements. This collateral is included in "Cash and cash equivalents" in the consolidated balance sheets and its use by UPS is not restricted. At each of September 30, 2020 and December 31, 2019, respectively, no collateral was required to be posted with our 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. Alternatively, 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. We have not historically incurred, and do not expect to incur in the future, any losses as a result of counterparty default. At September 30, 2020 and December 31, 2019 there were no instruments in a net liability position that were not covered by the zero threshold bilateral collateral provisions. 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. In order to mitigate the impact of fuel surcharges imposed on us by outside carriers, we regularly adjust the rates we charge for our freight brokerage, inter-modal and truckload services. 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 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. Balances in the cumulative translation adjustment accounts remain until the sale or substantially complete liquidation of the foreign entity, upon which they are recognized as a component of investment income and other. 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 these 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, 2020 and December 31, 2019, the notional amounts of our outstanding derivative positions were as follows (in millions): September 30, 2020 December 31, 2019 Currency hedges: Euro EUR 3,711 EUR 4,571 British Pound Sterling GBP 1,345 GBP 1,494 Canadian Dollar CAD 1,269 CAD 1,402 Hong Kong Dollar HKD 3,479 HKD 3,327 Interest rate hedges: Fixed to Floating Interest Rate Swaps USD 3,250 USD 3,674 Floating to Fixed Interest Rate Swaps USD 778 USD 778 As of September 30, 2020 and December 31, 2019, we had no outstanding commodity hedge positions. Balance Sheet Recognition The following table indicates the location in the consolidated balance sheets where 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). 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 in the 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 in 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 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 $ 121 $ 138 $ 116 $ 131 Interest rate contracts Other current assets Level 2 11 2 11 2 Foreign exchange contracts Other non-current assets Level 2 138 252 124 236 Interest rate contracts Other non-current assets Level 2 33 21 30 20 Derivatives not designated as hedges: Foreign exchange contracts Other current assets Level 2 2 7 2 7 Interest rate contracts Other current assets Level 2 7 — 6 — Interest rate contracts Other non-current assets Level 2 — 12 — 11 Total Asset Derivatives $ 312 $ 432 $ 289 $ 407 Fair Value Hierarchy Level Gross Amounts Presented in Net Amounts if Right of 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 $ 5 $ 7 $ — $ — Foreign exchange contracts Other non-current liabilities Level 2 14 16 — — Interest rate contracts Other non-current liabilities Level 2 14 11 11 10 Derivatives not designated as hedges: Foreign exchange contracts Other current liabilities Level 2 1 — 1 — Interest rate contracts Other current liabilities Level 2 4 — 3 — Interest rate contracts Other non- Level 2 — 3 — 2 Total Liability Derivatives $ 38 $ 37 $ 15 $ 12 Our foreign exchange, 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. At September 30, 2020 and December 31, 2019 we did not have any derivatives that were classified as Level 1 (valued using quoted prices in active markets for identical assets) or Level 3 (valued using significant unobservable inputs). Balance Sheet Location of Hedged Item in Fair Value Hedges The following table indicates the amounts that were recorded in the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of September 30, 2020 and December 31, 2019 (in millions): Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included Carrying Amount Cumulative Amount Carrying Amount Cumulative Amount September 30, 2020 September 30, 2020 December 31, 2019 December 31, 2019 Long-term debt and finance leases $ 2,828 $ 55 $ 3,234 $ 40 The cumulative amount of fair value hedging losses remaining for any hedged assets and liabilities for which hedge accounting has been discontinued as of September 30, 2020 is $9 million. These amounts will be recognized over the next 10 years. Income Statement and AOCI Recognition The following table indicates the amount of gains and (losses) that have been recognized in the income statement for the fair value and cash flow hedges, as well as the associated gain or (loss) for the underlying hedged item for fair value hedges for the three and nine months ended September 30, 2020 and 2019 (in millions): Three Months Ended Location and Amount of Gain (Loss) Recognized in Income 2020 2019 Revenue Interest Expense Revenue Interest Expense Gain or (loss) on fair value hedging relationships: Interest Contracts: Hedged items $ — $ 13 $ — $ (2) Derivatives designated as hedging instruments — (13) — 2 Gain or (loss) on cash flow hedging relationships: Interest Contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income — (3) — (3) Foreign Exchange Contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income 38 — 62 — Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded $ 38 $ (3) $ 62 $ (3) Nine Months Ended 2020 2019 Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Revenue Interest Expense Revenue Interest Expense Gain or (loss) on fair value hedging relationships: Interest Contracts: Hedged items $ — $ (21) $ — $ (47) Derivatives designated as hedging instruments — 21 — 47 Gain or (loss) on cash flow hedging relationships: Interest Contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income — (9) — (12) Foreign Exchange Contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income 173 — 124 — Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded $ 173 $ (9) $ 124 $ (12) 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, 2020 and 2019 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 Derivatives 2020 2019 Interest rate contracts $ (3) $ (1) Foreign exchange contracts (218) 331 Total $ (221) $ 330 Nine Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivatives 2020 2019 Interest rate contracts $ (6) $ 10 Foreign exchange contracts 49 457 Total $ 43 $ 467 As of September 30, 2020, there were $139 million of pre-tax gains related to cash flow hedges deferred in AOCI that are expected to be reclassified to income over the 12 month period ending September 30, 2021. 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 flows is approximately 12 years. 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, 2020 and 2019 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 2020 2019 Foreign denominated debt $ (139) $ 191 Total $ (139) $ 191 Nine Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt 2020 2019 Foreign denominated debt $ (92) $ 197 Total $ (92) $ 197 Additionally, we maintain interest rate swaps, foreign exchange forwards and investment market price forward contracts that are not designated as hedges. The interest rate swap contracts are intended to provide an economic hedge of portions of our outstanding debt. The 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. The 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 exchange forward contracts 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 exchange 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, 2020 and 2019 (in millions): Derivative Instruments Not Designated in Location of Gain (Loss) Amount of Gain (Loss) Recognized in Income 2020 2019 Three Months Ended September 30: Interest rate contracts Interest expense $ (2) $ (2) Foreign exchange contracts Investment income and other 34 (39) Total $ 32 $ (41) Nine Months Ended September 30: Interest rate contracts Interest expense $ (6) $ (6) Foreign exchange contracts Investment income and other (15) (59) Total $ (21) $ (65) |
INCOME TAXES
INCOME TAXES - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
INCOME TAXES | INCOME TAXES Our effective tax rate increased to 22.5% in the third quarter of 2020 from 20.7% in the same period of 2019 (23.5% year to date in 2020 compared to 22.3% in the same period of 2019). The recognition in income tax of excess tax benefits related to share-based compensation reduced our effective rate by 0.2% year to date in 2020 compared to 0.1% in the same period of 2019 (there was no significant impact in the third quarter of 2020 or 2019). Our effective tax rate increased in 2020 compared to 2019 primarily due to unfavorable changes in our uncertain tax positions. In addition, as discussed below, during the third quarter of 2019 our effective tax rate decreased due to a valuation allowance release. As of June 30, 2019, we maintained a valuation allowance against certain deferred tax assets, primarily related to foreign net operating loss carryforwards. As of each reporting date, we consider new evidence, both positive and negative, that could affect the future realization of deferred tax assets. During the third quarter of 2019, we determined that there was sufficient positive evidence to conclude that it is more likely than not that the deferred tax assets related to certain foreign net operating loss carryforwards will be realized. This conclusion is primarily related to achieving cumulative three-year income and anticipated future earnings within the relevant jurisdiction. Accordingly, we reversed the related valuation allowance and recognized a discrete tax benefit of approximately $62 million during the third quarter of 2019. As discussed in our Annual Report on Form 10-K for the year ended December 31, 2019, 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 statutes of limitations, additional regulatory guidance on the Tax Cuts and Jobs Act or other unforeseen circumstances. As discussed in note 17, we recognized pre-tax transformation strategy costs of $44 million in the third quarter of 2020 compared to $63 million in the same period of 2019 ($201 million year to date in 2020 compared to $207 million in the same period of 2019). As a result, we recorded an additional income tax benefit of $11 million in the third quarter of 2020 compared to $16 million in the same period of 2019 ($50 million year to date in 2020 and 2019). This benefit was generated at a higher average tax rate than the U.S. federal statutory tax rate primarily due to the effect of U.S. state and local taxes and foreign taxes. | |||
Transformation cost | $ 44 | $ 63 | $ 201 | $ 207 |
TRANSFORMATION STRATEGY (Notes)
TRANSFORMATION STRATEGY (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
TRANSFORMATION STRATEGY | TRANSFORMATION STRATEGY COSTS In the first quarter of 2018, we launched the first phase of a multi-year, enterprise-wide transformation strategy impacting our organization. Over the next several years additional phases will be implemented. The program includes investments, as well as changes in processes and technology, that impact global direct and indirect operating costs. The table below presents the transformation strategy costs for the three and nine months ended September 30, 2020 and 2019 (in millions): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Transformation Strategy Costs: Compensation and benefits $ 18 $ 41 $ 111 $ 149 Total other expenses 26 22 90 58 Total Transformation Strategy Costs $ 44 $ 63 $ 201 $ 207 Income Tax Benefit from Transformation Strategy Costs (11) (16) (50) (50) After Tax Transformation Strategy Costs $ 33 $ 47 $ 151 $ 157 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying interim unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These interim unaudited, consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of September 30, 2020, our results of operations for the three and nine months ended September 30, 2020 and 2019 and our cash flows for the nine months ended September 30, 2020 and 2019. The results reported in these interim unaudited, consolidated financial statements should not be regarded as indicative of results that may be expected for any other period or the entire year. The interim unaudited, 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, 2019. |
Fair Value of Financial Instruments | Fair Value of Financial InstrumentsThe carrying amounts of our cash and cash equivalents, accounts receivable, finance receivables and accounts payable approximate fair value as of September 30, 2020 and December 31, 2019. The fair values of our investment securities are disclosed in note 5, our recognized multiemployer pension withdrawal liabilities in note 7, our short- and long-term debt in note 9 and our derivative instruments in note 15. 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. |
Accounting Estimates | 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 these financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. In particular, a number of estimates have been and will continue to be affected by the ongoing COVID-19 pandemic. The severity, magnitude and duration of the pandemic, and the resulting economic consequences, remain uncertain, rapidly changing and difficult to predict. As a result, our accounting estimates and assumptions may change over time. Such changes could result in future impairments of goodwill, intangible assets, long-lived assets and investment securities, incremental credit losses on financial assets, decreases in the carrying amount of our tax assets, increases in our self-insurance liabilities or increases in our net pension and postretirement benefit obligations at the time of a measurement event. For interim unaudited, consolidated financial statement purposes, we provide for accruals under our various company-sponsored employee benefit plans for each three month period based on one quarter of the estimated annual expense. |
Change in Accounting Methodology | Use of 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 these financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. In particular, a number of estimates have been and will continue to be affected by the ongoing COVID-19 pandemic. The severity, magnitude and duration of the pandemic, and the resulting economic consequences, remain uncertain, rapidly changing and difficult to predict. As a result, our accounting estimates and assumptions may change over time. Such changes could result in future impairments of goodwill, intangible assets, long-lived assets and investment securities, incremental credit losses on financial assets, decreases in the carrying amount of our tax assets, increases in our self-insurance liabilities or increases in our net pension and postretirement benefit obligations at the time of a measurement event. For interim unaudited, consolidated financial statement purposes, we provide for accruals under our various company-sponsored employee benefit plans for each three month period based on one quarter of the estimated annual expense. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In June 2016, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") introducing an expected credit loss methodology for the measurement of financial assets not accounted for at fair value. The methodology replaced the probable, incurred loss model for those assets. We adopted this standard on January 1, 2020. Upon adoption, we updated our process for calculating our allowance for credit losses to include reasonable and supportable forecasts that could affect expected collectability. In the third quarter of 2020, we decreased our allowance for credit losses by $6 million (an increase of $44 million year to date) based upon our current forecasts that reflect slight improvements in the economic outlook. In January 2017, the FASB issued an ASU to simplify the accounting for goodwill impairment by eliminating the requirement to calculate the implied fair value of goodwill using a hypothetical purchase price allocation. Under this ASU, goodwill impairment is the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. We adopted this standard on January 1, 2020. Upon adoption, this ASU did not have a material impact on our consolidated financial position, results of operations or cash flows. In March 2020, the FASB issued an ASU to temporarily ease the potential burden in accounting for reference rate reform. The update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. The guidance was effective upon issuance and generally can be applied through December 31, 2022. We are evaluating the potential impacts of reference rate reform on our various contractual positions to determine whether we may apply any of the practical expedients set forth in this update. For accounting standards adopted in the period ended September 30, 2019, refer to note 1 to our audited, consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019. Other accounting pronouncements adopted during the periods covered by the unaudited, 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 December 2019, the FASB issued an ASU to simplify the accounting for income taxes. The update removes certain exceptions to the general income tax principles. The update will be effective for us in the first quarter of 2021. We are evaluating the impact of its adoption on our consolidated financial statements and internal control over financial reporting environment, but do not expect this ASU to have a material impact on our consolidated financial position, results of operations or cash flows. Other accounting pronouncements issued before, but not effective until after, September 30, 2020, are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. |
Investment Impairments | Investment Impairments We have concluded that no material impairment losses existed as of September 30, 2020. In making this determination, we considered the financial condition and prospects of each issuer, the magnitude of the losses compared with the 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. |
Cash and Cash Equivalents (Poli
Cash and Cash Equivalents (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Investment Impairments | Investment Impairments We have concluded that no material impairment losses existed as of September 30, 2020. In making this determination, we considered the financial condition and prospects of each issuer, the magnitude of the losses compared with the 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. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of Revenue Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue: Next Day Air $ 2,098 $ 2,146 $ 6,137 $ 6,160 Deferred 1,378 1,248 3,873 3,494 Ground 9,749 8,061 27,745 23,431 U.S. Domestic Package 13,225 11,455 37,755 33,085 Domestic 776 689 2,183 2,069 Export 3,153 2,673 8,538 7,972 Cargo & Other 158 132 454 417 International Package 4,087 3,494 11,175 10,458 Forwarding 1,753 1,472 4,897 4,384 Logistics 1,040 846 2,862 2,511 Freight 870 852 2,360 2,486 Other 263 199 683 602 Supply Chain & Freight 3,926 3,369 10,802 9,983 Consolidated revenue $ 21,238 $ 18,318 $ 59,732 $ 53,526 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Fair Value of Employee Stock Options Granted and Determined by Black-Scholes Valuation Model Assumptions | The weighted-average assumptions used and the calculated weighted-average fair values of the first measurement period for the 2020 LTIP and the RTSR portion of the 2019 LTIP are as follows: 2020 2019 Risk-free interest rate 0.15 % 2.23 % Expected volatility 27.53 % 19.64 % Weighted-average fair value of units granted $ 92.77 $ 123.44 Share payout 101.00 % 115.04 % 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 2020 and 2019 are as follows: 2020 2019 Expected dividend yield 3.51 % 2.94 % Risk-free interest rate 1.26 % 2.60 % Expected life (in years) 7.5 7.5 Expected volatility 19.25 % 17.79 % Weighted-average fair value of options granted $ 11.74 $ 16.34 |
CASH AND INVESTMENTS (Tables)
CASH AND INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and December 31, 2019 (in millions): Cost Unrealized Unrealized Estimated September 30, 2020: Current trading marketable securities: Equity securities $ 2 $ — $ — $ 2 Total trading marketable securities 2 — — 2 Current available-for-sale securities: U.S. government and agency debt securities 180 3 — 183 Mortgage and asset-backed debt securities 33 2 — 35 Corporate debt securities 167 4 — 171 Non-U.S. government debt securities 11 — — 11 Total available-for-sale marketable securities 391 9 — 400 Total current marketable securities $ 393 $ 9 $ — $ 402 Cost Unrealized Unrealized Estimated December 31, 2019: Current trading marketable securities: Corporate debt securities $ 112 $ — $ — $ 112 Equity securities 2 — — 2 Total trading marketable securities 114 — — 114 Current available-for-sale securities: U.S. government and agency debt securities 191 2 — 193 Mortgage and asset-backed debt securities 46 1 — 47 Corporate debt securities 130 3 — 133 Non-U.S. government debt securities 16 — — 16 Total available-for-sale marketable securities 383 6 — 389 Total current marketable securities $ 497 $ 6 $ — $ 503 |
Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of marketable securities at September 30, 2020, 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 with or without prepayment penalties. Cost Estimated Due in one year or less $ 29 $ 30 Due after one year through three years 315 320 Due after three years through five years 8 8 Due after five years 39 42 391 400 Equity securities 2 2 $ 393 $ 402 |
Cash and Cash Equivalents and Restricted Cash | A reconciliation of cash and cash equivalents and restricted cash from the consolidated balance sheets to the statements of consolidated cash flows is shown below (in millions): September 30, 2020 December 31, 2019 September 30, 2019 Cash and cash equivalents $ 8,839 $ 5,238 $ 4,040 Restricted cash 1 — 145 Total cash, cash equivalents and restricted cash $ 8,840 $ 5,238 $ 4,185 |
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, 2020 and December 31, 2019, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions): Quoted Prices Significant Other Significant Balance September 30, 2020: Marketable Securities: U.S. government and agency debt securities $ 183 $ — $ — $ 183 Mortgage and asset-backed debt securities — 35 — 35 Corporate debt securities — 171 — 171 Equity securities — 2 — 2 Non-U.S. government debt securities — 11 — 11 Total marketable securities 183 219 — 402 Other non-current investments 22 — — 22 Total $ 205 $ 219 $ — $ 424 December 31, 2019: Marketable Securities: U.S. government and agency debt securities $ 193 $ — $ — $ 193 Mortgage and asset-backed debt securities — 47 — 47 Corporate debt securities — 245 — 245 Equity securities — 2 — 2 Non-U.S. government debt securities — 16 — 16 Total marketable securities 193 310 — 503 Other non-current investments 21 — 1 22 Total $ 214 $ 310 $ 1 $ 525 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | There were no transfers of investments between Level 1 and Level 2 during the nine months ended September 30, 2020 or 2019. |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment as of September 30, 2020 and December 31, 2019 consisted of the following (in millions): 2020 2019 Vehicles $ 10,604 $ 10,613 Aircraft 19,672 19,045 Land 2,146 2,087 Buildings 5,575 5,046 Building and leasehold improvements 4,888 4,898 Plant equipment 14,088 13,849 Technology equipment 2,695 2,206 Construction-in-progress 2,940 1,983 62,608 59,727 Less: Accumulated depreciation and amortization (30,444) (29,245) $ 32,164 $ 30,482 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | Information about the net periodic benefit cost for our company-sponsored pension and postretirement benefit plans for the three and nine months ended September 30, 2020 and 2019 is as follows (in millions): U.S. Pension Benefits U.S. Postretirement International 2020 2019 2020 2019 2020 2019 Three Months Ended September 30: Service cost $ 463 $ 360 $ 7 $ 6 $ 17 $ 15 Interest cost 495 516 23 27 10 12 Expected return on assets (887) (782) (2) (2) (22) (19) Amortization of prior service cost 55 55 1 2 — — Net periodic benefit cost $ 126 $ 149 $ 29 $ 33 $ 5 $ 8 U.S. Pension Benefits U.S. Postretirement International 2020 2019 2020 2019 2020 2019 Nine Months Ended September 30: Service cost $ 1,390 $ 1,079 $ 22 $ 18 $ 50 $ 43 Interest cost 1,483 1,550 68 81 30 35 Expected return on assets (2,662) (2,347) (6) (6) (64) (57) Amortization of prior service cost 164 164 5 5 1 1 Net periodic benefit cost $ 375 $ 446 $ 89 $ 98 $ 17 $ 22 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table indicates the allocation of goodwill by reportable segment as of September 30, 2020 and December 31, 2019 (in millions): U.S. Domestic International Supply Chain & Consolidated December 31, 2019: $ 715 $ 416 $ 2,682 $ 3,813 Acquired — — — — Currency / Other — (2) 5 3 September 30, 2020: $ 715 $ 414 $ 2,687 $ 3,816 |
Schedule of Intangible Assets (Excluding Goodwill) | The following is a summary of intangible assets as of September 30, 2020 and December 31, 2019 (in millions): Gross Carrying Accumulated Net Carrying September 30, 2020: Capitalized software $ 4,460 $ (2,890) $ 1,570 Licenses 156 (84) 72 Franchise rights 158 (112) 46 Customer relationships 720 (325) 395 Trade name 200 — 200 Trademarks, patents and other 23 (17) 6 Total Intangible Assets, Net $ 5,717 $ (3,428) $ 2,289 December 31, 2019: Capitalized software $ 4,125 $ (2,704) $ 1,421 Licenses 117 (64) 53 Franchise rights 146 (109) 37 Customer relationships 730 (282) 448 Trade name 200 — 200 Trademarks, patents and other 29 (21) 8 Total Intangible Assets, Net $ 5,347 $ (3,180) $ 2,167 |
DEBT AND FINANCING ARRANGEMENTS
DEBT AND FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The carrying value of our outstanding debt as of September 30, 2020 and December 31, 2019 consisted of the following (in millions): Principal Carrying Value Maturity 2020 2019 Commercial paper $ 1,202 2021 $ 1,202 $ 3,234 Fixed-rate senior notes: 3.125% senior notes 1,500 2021 1,516 1,524 2.050% senior notes 700 2021 700 699 2.450% senior notes 1,000 2022 1,031 1,003 2.350% senior notes 600 2022 599 598 2.500% senior notes 1,000 2023 996 995 2.800% senior notes 500 2024 497 497 2.200% senior notes 400 2024 398 398 3.900% senior notes 1,000 2025 995 — 2.400% senior notes 500 2026 498 498 3.050% senior notes 1,000 2027 993 992 3.400% senior notes 750 2029 745 745 2.500% senior notes 400 2029 397 397 4.450% senior notes 750 2030 743 — 6.200% senior notes 1,500 2038 1,483 1,483 5.200% senior notes 500 2040 493 — 4.875% senior notes 500 2040 490 490 3.625% senior notes 375 2042 368 368 3.400% senior notes 500 2046 491 491 3.750% senior notes 1,150 2047 1,137 1,136 4.250% senior notes 750 2049 742 742 3.400% senior notes 700 2049 688 688 5.300% senior notes 1,250 2050 1,231 — Floating-rate senior notes: Floating-rate senior notes 350 2021 350 349 Floating-rate senior notes 400 2022 399 399 Floating-rate senior notes 500 2023 499 499 Floating-rate senior notes 1,039 2049-2067 1,027 1,028 8.375% Debentures: 8.375% debentures — 2020 — 426 8.375% debentures 276 2030 281 281 Pound Sterling notes: 5.500% notes 86 2031 85 86 5.125% notes 585 2050 554 566 Euro senior notes: 0.375% notes 820 2023 816 779 1.625% notes 820 2025 816 779 1.000% notes 585 2028 582 556 1.500% notes 585 2032 582 556 Floating-rate senior notes — 2020 — 559 Canadian senior notes: 2.125% notes 560 2024 558 571 Finance lease obligations 411 2020-2210 411 498 Facility notes and bonds 320 2029-2045 320 320 Other debt 5 2020-2025 5 8 Total debt $ 25,869 25,718 25,238 Less: Current maturities (2,382) (3,420) Long-term debt $ 23,336 $ 21,818 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease Cost | The components of lease expense for the three and nine months ended September 30, 2020 and 2019 were as follows (in millions): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Operating lease costs $ 180 151 $ 527 $ 474 Finance lease costs: Amortization of assets 20 18 58 55 Interest on lease liabilities 4 5 14 14 Total finance lease costs 24 23 72 69 Variable lease costs 58 69 171 148 Short-term lease costs 260 194 716 633 Total lease costs $ 522 $ 437 $ 1,486 $ 1,324 Supplemental cash flow information related to leases is as follows (in millions): Nine Months Ended 2020 2019 Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 508 $ 455 Operating cash flows from finance leases 11 11 Financing cash flows from finance leases 136 121 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 544 $ 144 Finance leases 50 61 |
Supplemental Balance Sheet | Supplemental information related to leases and location within our consolidated balance sheets are as follows (in millions, except lease term and discount rate): September 30, December 31, Operating Leases: Operating lease right-of-use assets $ 3,022 $ 2,856 Current maturities of operating leases $ 560 $ 538 Non-current operating leases 2,473 2,391 Total operating lease liabilities $ 3,033 $ 2,929 Finance Leases: Property, plant and equipment, net $ 1,289 $ 1,502 Current maturities of long-term debt, commercial paper and finance leases $ 88 $ 181 Long-term debt and finance leases 323 317 Total finance lease liabilities $ 411 $ 498 Weighted average remaining lease term (in years): Operating leases 9.4 9.7 Finance leases 9.4 8.9 Weighted average discount rate: Operating leases 2.56 % 2.78 % Finance leases 4.25 % 4.03 % |
Operating Leases Maturity Schedule | Maturities of lease liabilities as of September 30, 2020 are as follows (in millions): Finance Leases Operating Leases 2020 $ 61 $ 148 2021 62 634 2022 56 541 2023 45 440 2024 37 323 Thereafter 252 1,504 Total lease payments 513 3,590 Less: Imputed interest (102) (557) Total lease obligations 411 3,033 Less: Current obligations (88) (560) Long-term lease obligations $ 323 $ 2,473 |
Finance Leases Maturity Schedule | Maturities of lease liabilities as of September 30, 2020 are as follows (in millions): Finance Leases Operating Leases 2020 $ 61 $ 148 2021 62 634 2022 56 541 2023 45 440 2024 37 323 Thereafter 252 1,504 Total lease payments 513 3,590 Less: Imputed interest (102) (557) Total lease obligations 411 3,033 Less: Current obligations (88) (560) Long-term lease obligations $ 323 $ 2,473 |
SHAREOWNERS' EQUITY (Tables)
SHAREOWNERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders Equity | Three Months Ended September 30: 2020 2019 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 157 $ 2 161 $ 2 Common stock purchases — — (1) — Stock award plans — — — — Common stock issuances 1 — 1 — Conversions of class A to class B common stock (8) — (4) — Class A shares issued at end of period 150 $ 2 157 $ 2 Class B Common Stock Balance at beginning of period 706 $ 7 698 $ 7 Common stock purchases — — (1) — Conversions of class A to class B common stock 8 — 4 — Class B shares issued at end of period 714 $ 7 701 $ 7 Additional Paid-In Capital Balance at beginning of period $ 255 $ 102 Common stock purchases — (251) Stock award plans 145 202 Common stock issuances 90 56 Option premiums paid — 20 Balance at end of period $ 490 $ 129 Retained Earnings Balance at beginning of period $ 10,032 $ 9,109 Net income attributable to common shareowners 1,957 1,750 Dividends ($1.01 and $0.96 per share) (1) (873) (825) Other (1) 3 Balance at end of period $ 11,115 $ 10,037 Non-Controlling Minority Interest Balance at beginning of period $ 13 $ 18 Change in non-controlling minority interest 1 (2) Balance at end of period $ 14 $ 16 (1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $28 and $27 million as of September 30, 2020 and September 30, 2019 respectively, that were settled in shares of class A common stock. Nine Months Ended September 30: 2020 2019 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 156 $ 2 163 $ 2 Common stock purchases — — (3) — Stock award plans 6 — 4 — Common stock issuances 3 — 2 — Conversions of class A to class B common stock (15) — (9) — Class A shares issued at end of period 150 $ 2 157 $ 2 Class B Common Stock Balance at beginning of period 701 $ 7 696 $ 7 Common stock purchases (2) — (4) — Conversions of class A to class B common stock 15 — 9 — Class B shares issued at end of period 714 $ 7 701 $ 7 Additional Paid-In Capital Balance at beginning of period $ 150 $ — Common stock purchases (217) (753) Stock award plans 215 584 Common stock issuances 342 277 Option premiums received (paid) — 21 Balance at end of period $ 490 $ 129 Retained Earnings Balance at beginning of period $ 9,105 $ 8,006 Net income attributable to common shareowners 4,690 4,546 Dividends ($3.03 and $2.88 per share) (1) (2,679) (2,518) Other (1) 3 Balance at end of period $ 11,115 $ 10,037 Non-Controlling Minority Interest Balance at beginning of period $ 16 $ 16 Change in non-controlling minority interest (2) — Balance at end of period $ 14 $ 16 (1) The dividend per share amount is the same for both class A and class B common stock. Dividends include $151 and $121 million as of September 30, 2020 and September 30, 2019 respectively, that were settled in shares of class A common stock. |
Schedule of Accumulated Other Comprehensive Income (Loss) | The activity in AOCI for the three and nine months ended September 30, 2020 and 2019 was as follows (in millions): Three Months Ended September 30: 2020 2019 Foreign currency translation gain (loss), net of tax: Balance at beginning of period $ (1,209) $ (1,106) Translation adjustment (net of tax effect of $(14) and $41) 65 (48) Balance at end of period (1,144) (1,154) Unrealized gain (loss) on marketable securities, net of tax: Balance at beginning of period 9 7 Current period changes in fair value (net of tax effect of $0 and $1) (1) 2 Reclassification to earnings (net of tax effect of $0 and $(1)) (1) (5) Balance at end of period 7 4 Unrealized gain (loss) on cash flow hedges, net of tax: Balance at beginning of period 215 104 Current period changes in fair value (net of tax effect of $(53) and $79) (168) 251 Reclassification to earnings (net of tax effect of $(8) and $(14)) (27) (45) Balance at end of period 20 310 Unrecognized pension and postretirement benefit costs, net of tax: Balance at beginning of period (4,948) (3,820) Reclassification to earnings (net of tax effect of $13 and $14) 43 43 Balance at end of period (4,905) (3,777) Accumulated other comprehensive income (loss) at end of period $ (6,022) $ (4,617) Nine Months Ended September 30: 2020 2019 Foreign currency translation gain (loss), net of tax: Balance at beginning of period $ (1,078) $ (1,126) Translation adjustment (net of tax effect of $(15) and $43) (66) (28) Balance at end of period (1,144) (1,154) Unrealized gain (loss) on marketable securities, net of tax: Balance at beginning of period 4 (2) Current period changes in fair value (net of tax effect of $1 and $4) 6 11 Reclassification to earnings (net of tax effect of $(1) in both periods) (3) (5) Balance at end of period 7 4 Unrealized gain (loss) on cash flow hedges, net of tax: Balance at beginning of period 112 40 Current period changes in fair value (net of tax effect of $10 and $112) 33 355 Reclassification to earnings (net of tax effect of $(39) and $(27)) (125) (85) Balance at end of period 20 310 Unrecognized pension and postretirement benefit costs, net of tax: Balance at beginning of period (5,035) (3,906) Reclassification to earnings (net of tax effect of $40 and $41) 130 129 Balance at end of period (4,905) (3,777) Accumulated other comprehensive income (loss) at end of period $ (6,022) $ (4,617) |
Gains (Losses) Reclassified from AOCI | Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and nine months ended September 30, 2020 and 2019 was as follows (in millions): Amount Reclassified from AOCI Affected Line Item in the Income Statement Three Months Ended September 30: 2020 2019 Unrealized gain (loss) on marketable securities: Realized gain (loss) on sale of securities $ 1 $ 6 Investment income and other Income tax (expense) benefit — (1) Income tax expense Impact on net income 1 5 Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (3) (3) Interest expense Foreign exchange contracts 38 62 Revenue Income tax (expense) benefit (8) (14) Income tax expense Impact on net income 27 45 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (56) (57) Investment income and other Income tax (expense) benefit 13 14 Income tax expense Impact on net income (43) (43) Net income Total amount reclassified for the period $ (15) $ 7 Net income Amount Reclassified from AOCI Affected Line Item in the Income Statement Nine Months Ended September 30: 2020 2019 Unrealized gain (loss) on marketable securities: Realized gain (loss) on sale of securities $ 4 $ 6 Investment income and other Income tax (expense) benefit (1) (1) Income tax expense Impact on net income 3 5 Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (9) (12) Interest expense Foreign exchange contracts 173 124 Revenue Income tax (expense) benefit (39) (27) Income tax expense Impact on net income 125 85 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (170) (170) Investment income and other Income tax (expense) benefit 40 41 Income tax expense Impact on net income (130) (129) Net income Total amount reclassified for the period $ (2) $ (39) Net income |
Activity in Deferred Compensation Program | Activity in the deferred compensation program for the three and nine months ended September 30, 2020 and 2019 was as follows (in millions): 2020 2019 Three Months Ended September 30: Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 20 $ 25 Reinvested dividends — — Benefit payments — — Balance at end of period $ 20 $ 25 Treasury Stock: Balance at beginning of period — $ (20) — $ (25) Reinvested dividends — — — — Benefit payments — — — — Balance at end of period — $ (20) — $ (25) 2020 2019 Nine Months Ended September 30: Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 26 $ 32 Reinvested dividends 1 1 Benefit payments (7) (8) Balance at end of period $ 20 $ 25 Treasury Stock: Balance at beginning of period — $ (26) (1) $ (32) Reinvested dividends — (1) — (1) Benefit payments — 7 1 8 Balance at end of period — $ (20) — $ (25) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information for the three and nine months ended September 30, 2020 and 2019 is as follows (in millions): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue: U.S. Domestic Package $ 13,225 $ 11,455 $ 37,755 $ 33,085 International Package 4,087 3,494 11,175 10,458 Supply Chain & Freight 3,926 3,369 10,802 9,983 Consolidated $ 21,238 $ 18,318 $ 59,732 $ 53,526 Operating Profit: U.S. Domestic Package $ 1,098 $ 1,216 $ 2,644 $ 3,090 International Package 966 667 2,288 1,858 Supply Chain & Freight 299 245 715 717 Consolidated $ 2,363 $ 2,128 $ 5,647 $ 5,665 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and 2019 (in millions, except per share amounts): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Numerator: Net income attributable to common shareowners $ 1,957 $ 1,750 $ 4,690 $ 4,546 Denominator: Weighted average shares 864 858 861 859 Deferred compensation obligations — — — — Vested portion of restricted units 4 6 5 6 Denominator for basic earnings per share 868 864 866 865 Effect of dilutive securities: Restricted units 4 6 4 4 Stock options — — — — Denominator for diluted earnings per share 872 870 870 869 Basic earnings per share $ 2.25 $ 2.03 $ 5.42 $ 5.26 Diluted earnings per share $ 2.24 $ 2.01 $ 5.39 $ 5.23 |
DERIVATIVE INSTRUMENTS AND RI_2
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location [Table Text Block] | The following table indicates the amount of gains and (losses) that have been recognized in the income statement for the fair value and cash flow hedges, as well as the associated gain or (loss) for the underlying hedged item for fair value hedges for the three and nine months ended September 30, 2020 and 2019 (in millions): Three Months Ended Location and Amount of Gain (Loss) Recognized in Income 2020 2019 Revenue Interest Expense Revenue Interest Expense Gain or (loss) on fair value hedging relationships: Interest Contracts: Hedged items $ — $ 13 $ — $ (2) Derivatives designated as hedging instruments — (13) — 2 Gain or (loss) on cash flow hedging relationships: Interest Contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income — (3) — (3) Foreign Exchange Contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income 38 — 62 — Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded $ 38 $ (3) $ 62 $ (3) Nine Months Ended 2020 2019 Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Revenue Interest Expense Revenue Interest Expense Gain or (loss) on fair value hedging relationships: Interest Contracts: Hedged items $ — $ (21) $ — $ (47) Derivatives designated as hedging instruments — 21 — 47 Gain or (loss) on cash flow hedging relationships: Interest Contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income — (9) — (12) Foreign Exchange Contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income 173 — 124 — Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded $ 173 $ (9) $ 124 $ (12) |
Schedule of Notional Amounts of Outstanding Derivative Positions | As of September 30, 2020 and December 31, 2019, the notional amounts of our outstanding derivative positions were as follows (in millions): September 30, 2020 December 31, 2019 Currency hedges: Euro EUR 3,711 EUR 4,571 British Pound Sterling GBP 1,345 GBP 1,494 Canadian Dollar CAD 1,269 CAD 1,402 Hong Kong Dollar HKD 3,479 HKD 3,327 Interest rate hedges: Fixed to Floating Interest Rate Swaps USD 3,250 USD 3,674 Floating to Fixed Interest Rate Swaps USD 778 USD 778 |
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 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 $ 121 $ 138 $ 116 $ 131 Interest rate contracts Other current assets Level 2 11 2 11 2 Foreign exchange contracts Other non-current assets Level 2 138 252 124 236 Interest rate contracts Other non-current assets Level 2 33 21 30 20 Derivatives not designated as hedges: Foreign exchange contracts Other current assets Level 2 2 7 2 7 Interest rate contracts Other current assets Level 2 7 — 6 — Interest rate contracts Other non-current assets Level 2 — 12 — 11 Total Asset Derivatives $ 312 $ 432 $ 289 $ 407 Fair Value Hierarchy Level Gross Amounts Presented in Net Amounts if Right of 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 $ 5 $ 7 $ — $ — Foreign exchange contracts Other non-current liabilities Level 2 14 16 — — Interest rate contracts Other non-current liabilities Level 2 14 11 11 10 Derivatives not designated as hedges: Foreign exchange contracts Other current liabilities Level 2 1 — 1 — Interest rate contracts Other current liabilities Level 2 4 — 3 — Interest rate contracts Other non- Level 2 — 3 — 2 Total Liability Derivatives $ 38 $ 37 $ 15 $ 12 The following table indicates the amounts that were recorded in the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of September 30, 2020 and December 31, 2019 (in millions): Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included Carrying Amount Cumulative Amount Carrying Amount Cumulative Amount September 30, 2020 September 30, 2020 December 31, 2019 December 31, 2019 Long-term debt and finance leases $ 2,828 $ 55 $ 3,234 $ 40 |
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 for the three and nine months ended September 30, 2020 and 2019 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 Derivatives 2020 2019 Interest rate contracts $ (3) $ (1) Foreign exchange contracts (218) 331 Total $ (221) $ 330 Nine Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivatives 2020 2019 Interest rate contracts $ (6) $ 10 Foreign exchange contracts 49 457 Total $ 43 $ 467 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, 2020 and 2019 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 2020 2019 Foreign denominated debt $ (139) $ 191 Total $ (139) $ 191 Nine Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt 2020 2019 Foreign denominated debt $ (92) $ 197 Total $ (92) $ 197 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | 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, 2020 and 2019 (in millions): Derivative Instruments Not Designated in Location of Gain (Loss) Amount of Gain (Loss) Recognized in Income 2020 2019 Three Months Ended September 30: Interest rate contracts Interest expense $ (2) $ (2) Foreign exchange contracts Investment income and other 34 (39) Total $ 32 $ (41) Nine Months Ended September 30: Interest rate contracts Interest expense $ (6) $ (6) Foreign exchange contracts Investment income and other (15) (59) Total $ (21) $ (65) |
TRANSFORMATION STRATEGY x (Tabl
TRANSFORMATION STRATEGY x (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The table below presents the transformation strategy costs for the three and nine months ended September 30, 2020 and 2019 (in millions): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Transformation Strategy Costs: Compensation and benefits $ 18 $ 41 $ 111 $ 149 Total other expenses 26 22 90 58 Total Transformation Strategy Costs $ 44 $ 63 $ 201 $ 207 Income Tax Benefit from Transformation Strategy Costs (11) (16) (50) (50) After Tax Transformation Strategy Costs $ 33 $ 47 $ 151 $ 157 |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | ||
Allowance for credit losses, period increase (decrease) | $ (6) | $ 44 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Disaggregation of Revenue | |||||
Provisions for doubtful receivables | $ 51 | $ 40 | $ 204 | $ 145 | |
Contract with Customer, Liability, Current | 8 | 8 | $ 7 | ||
Revenues | 21,238 | 18,318 | 59,732 | 53,526 | |
Contract with Customer, Liability, Noncurrent | 26 | 26 | $ 26 | ||
Forwarding | |||||
Disaggregation of Revenue | |||||
Revenues | 1,753 | 1,472 | 4,897 | 4,384 | |
Logistics | |||||
Disaggregation of Revenue | |||||
Revenues | 1,040 | 846 | 2,862 | 2,511 | |
Freight | |||||
Disaggregation of Revenue | |||||
Revenues | 870 | 852 | 2,360 | 2,486 | |
Other | |||||
Disaggregation of Revenue | |||||
Revenues | 263 | 199 | 683 | 602 | |
U.S | Next Day Air | |||||
Disaggregation of Revenue | |||||
Revenues | 2,098 | 2,146 | 6,137 | 6,160 | |
U.S | Deferred | |||||
Disaggregation of Revenue | |||||
Revenues | 1,378 | 1,248 | 3,873 | 3,494 | |
U.S | Ground | |||||
Disaggregation of Revenue | |||||
Revenues | 9,749 | 8,061 | 27,745 | 23,431 | |
International | Domestic | |||||
Disaggregation of Revenue | |||||
Revenues | 776 | 689 | 2,183 | 2,069 | |
International | Export | |||||
Disaggregation of Revenue | |||||
Revenues | 3,153 | 2,673 | 8,538 | 7,972 | |
International | Cargo & Other | |||||
Disaggregation of Revenue | |||||
Revenues | 158 | 132 | 454 | 417 | |
Supply Chain & Freight | |||||
Disaggregation of Revenue | |||||
Revenues | 3,926 | 3,369 | 10,802 | 9,983 | |
U.S. Domestic Package | |||||
Disaggregation of Revenue | |||||
Revenues | 13,225 | 11,455 | 37,755 | 33,085 | |
International Package | |||||
Disaggregation of Revenue | |||||
Revenues | $ 4,087 | $ 3,494 | $ 11,175 | $ 10,458 |
Revenue Recognition - Narrative
Revenue Recognition - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||||
Allowance for credit losses, period increase (decrease) | $ (6) | $ 44 | |||
Allowance for credit losses | 160 | 160 | $ 93 | ||
Provisions for doubtful receivables | 51 | $ 40 | 204 | $ 145 | |
Contract assets | 368 | 368 | 272 | ||
Deferred revenue | 463 | 463 | 264 | ||
Contract with Customer, Liability, Current | 8 | 8 | 7 | ||
Contract with Customer, Liability, Noncurrent | $ 26 | $ 26 | $ 26 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Jun. 01, 2020 | Feb. 12, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Aug. 12, 2020 | May 13, 2020 | Mar. 23, 2020 | Feb. 06, 2020 |
Stockholders Equity Note [Line Items] | |||||||||||||
Stock compensation expense | $ 140 | $ 203 | $ 508 | $ 716 | |||||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 2,100 | 2,100 | |||||||||||
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | |||||||||||||
Stockholders Equity Note [Line Items] | |||||||||||||
Reclassification to earnings, tax effect | $ 0 | $ (1) | $ (1) | $ (1) | |||||||||
Management Incentive Award | |||||||||||||
Stockholders Equity Note [Line Items] | |||||||||||||
Award vesting period | 5 years | ||||||||||||
Closing New York Stock Exchange price | $ 105.54 | $ 91.90 | $ 106.51 | ||||||||||
Long-Term Incentive Performance Award | |||||||||||||
Stockholders Equity Note [Line Items] | |||||||||||||
Award vesting period | 3 years | ||||||||||||
Closing New York Stock Exchange price | $ 99.08 | $ 186.67 | |||||||||||
Weighted-average fair value of options granted (usd per share) | $ 92.77 | $ 123.44 | |||||||||||
Long-Term Incentive Performance Award | Restricted Units | |||||||||||||
Stockholders Equity Note [Line Items] | |||||||||||||
Closing New York Stock Exchange price | $ 91.65 | ||||||||||||
Nonqualified Stock Options | |||||||||||||
Stockholders Equity Note [Line Items] | |||||||||||||
Award vesting period | 5 years | ||||||||||||
Percentage of the award vesting at each anniversary date of the grant | 20.00% | ||||||||||||
Expiration period (in years) | 10 years | ||||||||||||
Stock options granted | 0.1 | 300,000 | |||||||||||
Weighted-average fair value of options granted (usd per share) | $ 99.28 | $ 105.54 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value of Employee Stock Options Granted as Determined by Black-Scholes Valuation Model Assumptions (Detail) - $ / shares | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Aug. 12, 2020 | Jun. 01, 2020 | May 13, 2020 | |
Nonqualified Stock Options | |||||
Stockholders Equity Note [Line Items] | |||||
Risk-free interest rate | 1.26% | 2.60% | |||
Expected volatility | 19.25% | 17.79% | |||
Weighted-average fair value of options granted (usd per share) | $ 11.74 | $ 16.34 | |||
Expected dividend yield | 3.51% | 2.94% | |||
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 | 0.15% | 2.23% | |||
Expected volatility | 27.53% | 19.64% | |||
Weighted-average fair value of options granted (usd per share) | $ 92.77 | $ 123.44 | |||
Expected dividend yield | 101.00% | 115.04% | |||
Closing New York Stock Exchange price | $ 186.67 | $ 99.08 | |||
Long-Term Incentive Performance Award | Restricted Units | |||||
Stockholders Equity Note [Line Items] | |||||
Closing New York Stock Exchange price | $ 91.65 |
CASH AND INVESTMENTS - Summary
CASH AND INVESTMENTS - Summary of Marketable Securities (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of Marketable Securities [Line Items] | ||
Debt Securities, Trading, Amortized Cost | $ 2 | $ 114 |
Trading Securities, Gross Unrealized Gain | 0 | 0 |
Trading Securities, Gross Unrealized Loss | 0 | 0 |
Debt Securities, Trading, and Equity Securities, FV-NI | 2 | 114 |
Available-for-sale Securities, Amortized Cost Basis | 391 | 383 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 9 | 6 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities, Current | 400 | 389 |
Total Amortized Cost | 393 | 497 |
Marketable Securities, Gross Unrealized Gain | 9 | 6 |
Marketable Securities, Gross Unrealized Loss | 0 | 0 |
Total Estimated Fair Value | 402 | 503 |
Corporate debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Debt Securities, Trading, Amortized Cost | 112 | |
Trading Securities, Gross Unrealized Gain | 0 | |
Trading Securities, Gross Unrealized Loss | 0 | |
Debt Securities, Trading, and Equity Securities, FV-NI | 112 | |
Available-for-sale Securities, Amortized Cost Basis | 167 | 130 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 4 | 3 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities, Current | 171 | 133 |
U.S. government and agency debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 180 | 191 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 3 | 2 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities, Current | 183 | 193 |
Mortgage and asset-backed debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 33 | 46 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 2 | 1 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities, Current | 35 | 47 |
Equity securities | ||
Schedule of Marketable Securities [Line Items] | ||
Debt Securities, Trading, Amortized Cost | 2 | 2 |
Trading Securities, Gross Unrealized Gain | 0 | 0 |
Trading Securities, Gross Unrealized Loss | 0 | 0 |
Debt Securities, Trading, and Equity Securities, FV-NI | 2 | 2 |
Non-U.S. government debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 11 | 16 |
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 | $ 11 | $ 16 |
CASH AND INVESTMENTS - Amortize
CASH AND INVESTMENTS - Amortized Cost and Estimated Fair Value of Marketable Securities by Contractual Maturity (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Cost | ||
Due in one year or less | $ 29 | |
Due after one year through three years | 315 | |
Due after three years through five years | 8 | |
Due after five years | 39 | |
Marketable Securities, Debt Maturities, Amortized Cost, Total | 391 | |
Equity securities | 2 | |
Total Amortized Cost | 393 | $ 497 |
Estimated Fair Value | ||
Due in one year or less | 30 | |
Due after one year through three years | 320 | |
Due after three years through five years | 8 | |
Due after five years | 42 | |
Marketable Securities, Debt Maturities, Fair Value, Total | 400 | |
Equity securities | 2 | |
Total Estimated Fair Value | $ 402 | $ 503 |
CASH AND INVESTMENTS - Addition
CASH AND INVESTMENTS - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Gain (Loss) on Securities [Line Items] | |||
Other than temporary impairment losses | $ 0 | ||
Investments and Restricted Cash | 25,000,000 | $ 24,000,000 | |
Restricted cash | 1,000,000 | 0 | $ 145,000,000 |
Transfer between level 1 and level 2 | 0 | $ 0 | |
cash held in escrow [Member] | |||
Gain (Loss) on Securities [Line Items] | |||
Restricted Cash and Cash Equivalents, Noncurrent | 2,000,000 | 3,000,000 | |
Variable life insurance policy | |||
Gain (Loss) on Securities [Line Items] | |||
Investments and Restricted Cash | $ 22,000,000 | $ 21,000,000 |
CASH AND INVESTMENTS - Cash Det
CASH AND INVESTMENTS - Cash Details (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 8,839 | $ 5,238 | $ 4,040 | |
Restricted cash | 1 | 0 | 145 | |
Total cash, cash equivalents and restricted cash | $ 8,840 | $ 5,238 | $ 4,185 | $ 4,367 |
CASH AND INVESTMENTS - Investme
CASH AND INVESTMENTS - Investments Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 424 | $ 525 |
Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 402 | 503 |
Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 183 | 193 |
Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 35 | 47 |
Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 171 | 245 |
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 | 11 | 16 |
Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 22 | 22 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 205 | 214 |
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 | 183 | 193 |
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 | 183 | 193 |
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 | 0 | 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) | Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 22 | 21 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 219 | 310 |
Significant Other Observable Inputs (Level 2) | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 219 | 310 |
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 | 35 | 47 |
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 | 171 | 245 |
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 | 11 | 16 |
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 | 0 | 1 |
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) | Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 1 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 62,608 | $ 59,727 |
Less: Accumulated depreciation and amortization | (30,444) | (29,245) |
Property, plant and equipment, net | 32,164 | 30,482 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 10,604 | 10,613 |
Aircraft | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 19,672 | 19,045 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,146 | 2,087 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 5,575 | 5,046 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 4,888 | 4,898 |
Plant equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 14,088 | 13,849 |
Technology equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,695 | 2,206 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 2,940 | $ 1,983 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Property, plant and equipment purchased on account | $ 835,000,000 | $ 372,000,000 | |
Impairment charges on property plant and equipment | $ 0 | $ 0 |
EMPLOYEE BENEFIT PLANS - Net Pe
EMPLOYEE BENEFIT PLANS - Net Periodic Benefit Cost for Pension and Postretirement Benefit Plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Pension Plan | U.S. Pension Benefits | ||||
Net Periodic Cost: | ||||
Service cost | $ 463 | $ 360 | $ 1,390 | $ 1,079 |
Interest cost | 495 | 516 | 1,483 | 1,550 |
Expected return on assets | (887) | (782) | (2,662) | (2,347) |
Amortization of prior service cost | 55 | 55 | 164 | 164 |
Net periodic benefit cost | 126 | 149 | 375 | 446 |
Defined Benefit Pension Plan | International Pension Benefits | ||||
Net Periodic Cost: | ||||
Service cost | 17 | 15 | 50 | 43 |
Interest cost | 10 | 12 | 30 | 35 |
Expected return on assets | (22) | (19) | (64) | (57) |
Amortization of prior service cost | 0 | 0 | 1 | 1 |
Net periodic benefit cost | 5 | 8 | 17 | 22 |
U.S. Postretirement Medical Benefits | U.S. Pension Benefits | ||||
Net Periodic Cost: | ||||
Service cost | 7 | 6 | 22 | 18 |
Interest cost | 23 | 27 | 68 | 81 |
Expected return on assets | (2) | (2) | (6) | (6) |
Amortization of prior service cost | 1 | 2 | 5 | 5 |
Net periodic benefit cost | $ 29 | $ 33 | $ 89 | $ 98 |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Detail) $ in Millions | Dec. 31, 2007USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($)Employees |
Defined Benefit Plan Disclosure [Line Items] | |||
Multiemployer Plans, Payment Term | 42 years | ||
Number of employees under a national master agreement and various supplemental agreements with local unions affiliated with Teamsters | Employees | 290,000 | ||
Number of pilots under a collective bargaining agreement with the Independent Pilots Association | Employees | 2,900 | ||
Ground mechanics employed under Teamster Local 272 | Employees | 1,500 | ||
Majority of ground mechanics not employed under agreements | Employees | 3,300 | ||
Multiemployer Plans, Pension [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Multi-employer Plans, Withdrawal Obligation, Fair Value Disclosure | $ 991 | $ 929 | |
Multiemployer Plans, Pension [Member] | Central States Pension Fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Payment of withdrawal liability | $ 6,100 | ||
Pension liability | 4,800 | 2,600 | |
Long term debt | Multiemployer Plans, Pension [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Multiemployer Plans, Withdrawal Obligation, Present Value | 839 | 845 | |
Other current liabilities | Multiemployer Plans, Pension [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Multiemployer Plans, Withdrawal Obligation, Present Value | 7 | $ 7 | |
Defined Benefit Pension Plan | U.S. Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amount contributed to company- sponsored benefit plans | 1,100 | ||
Estimated future employer contributions to defined benefit plan, current fiscal year | 24,000 | ||
U.S. Postretirement Medical Benefits | U.S. Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amount contributed to company- sponsored benefit plans | 242 | ||
Pro Forma | Maximum | Multiemployer Plans, Pension [Member] | Central States Pension Fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Benefit Obligation, Period Increase (Decrease) | $ 2,200 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Allocation of Goodwill by Reportable Segment (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 3,813 |
Acquired | 0 |
Currency / Other | 3 |
Ending balance | 3,816 |
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 | 416 |
Acquired | 0 |
Currency / Other | (2) |
Ending balance | 414 |
Supply Chain & Freight | |
Goodwill [Roll Forward] | |
Beginning balance | 2,682 |
Acquired | 0 |
Currency / Other | 5 |
Ending balance | $ 2,687 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Summary of Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,717 | $ 5,347 |
Accumulated Amortization | (3,428) | (3,180) |
Net Carrying Value | 2,289 | 2,167 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying value | 4 | |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying value | 200 | |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,460 | 4,125 |
Accumulated Amortization | (2,890) | (2,704) |
Net Carrying Value | 1,570 | 1,421 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 156 | 117 |
Accumulated Amortization | (84) | (64) |
Net Carrying Value | 72 | 53 |
Franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 158 | 146 |
Accumulated Amortization | (112) | (109) |
Net Carrying Value | 46 | 37 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 720 | 730 |
Accumulated Amortization | (325) | (282) |
Net Carrying Value | 395 | 448 |
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 | 23 | 29 |
Accumulated Amortization | (17) | (21) |
Net Carrying Value | $ 6 | $ 8 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Narratives) (Details) - USD ($) | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of goodwill and intangible asset | $ 0 | ||
Impairment of finite lived intangible assets | $ 4,000,000 | $ 0 | |
Trade name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Carrying value | 200,000,000 | ||
Licenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Carrying value | $ 4,000,000 |
DEBT AND FINANCING ARRANGEMEN_2
DEBT AND FINANCING ARRANGEMENTS - Carrying Value of Outstanding Debt (Detail) - USD ($) | Sep. 30, 2020 | Mar. 24, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 25,869,000,000 | ||
Total debt | 25,718,000,000 | $ 25,238,000,000 | |
Less current maturities | (2,382,000,000) | (3,420,000,000) | |
Long-Term Debt and Finance Leases | 23,336,000,000 | 21,818,000,000 | |
Commercial Paper | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 1,202,000,000 | ||
Total debt | 1,202,000,000 | 3,234,000,000 | |
Senior notes | 3.125% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,500,000,000 | ||
Debt instrument, stated interest rate | 3.125% | ||
Total debt | $ 1,516,000,000 | 1,524,000,000 | |
Senior notes | 2.050% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 700,000,000 | ||
Debt instrument, stated interest rate | 2.05% | ||
Total debt | $ 700,000,000 | 699,000,000 | |
Senior notes | 2.450% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,000,000,000 | ||
Debt instrument, stated interest rate | 2.45% | ||
Total debt | $ 1,031,000,000 | 1,003,000,000 | |
Senior notes | 2.350% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 600,000,000 | ||
Debt instrument, stated interest rate | 2.35% | ||
Total debt | $ 599,000,000 | 598,000,000 | |
Senior notes | 2.500% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,000,000,000 | ||
Debt instrument, stated interest rate | 2.50% | ||
Total debt | $ 996,000,000 | 995,000,000 | |
Senior notes | 2.800% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | ||
Debt instrument, stated interest rate | 2.80% | ||
Total debt | $ 497,000,000 | 497,000,000 | |
Senior notes | 2.200% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 400,000,000 | ||
Debt instrument, stated interest rate | 2.20% | ||
Total debt | $ 398,000,000 | 398,000,000 | |
Senior notes | 3.900% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,000,000,000 | $ 1,000,000,000 | |
Debt instrument, stated interest rate | 3.90% | 3.90% | |
Total debt | $ 995,000,000 | 0 | |
Senior notes | 2.400% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | ||
Debt instrument, stated interest rate | 2.40% | ||
Total debt | $ 498,000,000 | 498,000,000 | |
Senior notes | 3.050% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,000,000,000 | ||
Debt instrument, stated interest rate | 3.05% | ||
Total debt | $ 993,000,000 | 992,000,000 | |
Senior notes | 3.400% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 750,000,000 | ||
Debt instrument, stated interest rate | 3.40% | ||
Total debt | $ 745,000,000 | 745,000,000 | |
Senior notes | 2.500% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 400,000,000 | ||
Debt instrument, stated interest rate | 2.50% | ||
Total debt | $ 397,000,000 | 397,000,000 | |
Senior notes | 4.450% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 750,000,000 | $ 750,000,000 | |
Debt instrument, stated interest rate | 4.45% | 4.45% | |
Total debt | $ 743,000,000 | 0 | |
Senior notes | 6.200% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,500,000,000 | ||
Debt instrument, stated interest rate | 6.20% | ||
Total debt | $ 1,483,000,000 | 1,483,000,000 | |
Senior notes | 5.200% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | $ 500,000,000 | |
Debt instrument, stated interest rate | 5.20% | 5.20% | |
Total debt | $ 493,000,000 | 0 | |
Senior notes | 4.875% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | ||
Debt instrument, stated interest rate | 4.875% | ||
Total debt | $ 490,000,000 | 490,000,000 | |
Senior notes | 3.625% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 375,000,000 | ||
Debt instrument, stated interest rate | 3.625% | ||
Total debt | $ 368,000,000 | 368,000,000 | |
Senior notes | 3.400% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | ||
Debt instrument, stated interest rate | 3.40% | ||
Total debt | $ 491,000,000 | 491,000,000 | |
Senior notes | 3.750% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,150,000,000 | ||
Debt instrument, stated interest rate | 3.75% | ||
Total debt | $ 1,137,000,000 | 1,136,000,000 | |
Senior notes | 4.250% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 750,000,000 | ||
Debt instrument, stated interest rate | 4.25% | ||
Total debt | $ 742,000,000 | 742,000,000 | |
Senior notes | 3.400% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 700,000,000 | ||
Debt instrument, stated interest rate | 3.40% | ||
Total debt | $ 688,000,000 | 688,000,000 | |
Senior notes | 5.300% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,250,000,000 | $ 1,250,000,000 | |
Debt instrument, stated interest rate | 5.30% | 5.30% | |
Total debt | $ 1,231,000,000 | 0 | |
Senior notes | Floating-rate senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 350,000,000 | ||
Total debt | 350,000,000 | 349,000,000 | |
Senior notes | Floating-rate senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 400,000,000 | ||
Total debt | 399,000,000 | 399,000,000 | |
Senior notes | Floating-rate senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 500,000,000 | ||
Total debt | 499,000,000 | 499,000,000 | |
Senior notes | Floating-rate senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 1,039,000,000 | ||
Total debt | 1,027,000,000 | 1,028,000,000 | |
Senior notes | 8.375% debentures | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 0 | ||
Debt instrument, stated interest rate | 8.375% | ||
Total debt | $ 0 | 426,000,000 | |
Senior notes | 8.375% debentures | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 276,000,000 | ||
Debt instrument, stated interest rate | 8.375% | ||
Total debt | $ 281,000,000 | 281,000,000 | |
Senior notes | Canadian senior note 2.125% | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 560,000,000 | ||
Debt instrument, stated interest rate | 2.125% | ||
Total debt | $ 558,000,000 | 571,000,000 | |
Pound Sterling notes | 5.500% notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 86,000,000 | ||
Debt instrument, stated interest rate | 5.50% | ||
Total debt | $ 85,000,000 | 86,000,000 | |
Pound Sterling notes | 5.125% notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 585,000,000 | ||
Debt instrument, stated interest rate | 5.125% | ||
Total debt | $ 554,000,000 | 566,000,000 | |
Euro Senior Notes | 0.375% notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 820,000,000 | ||
Debt instrument, stated interest rate | 0.375% | ||
Total debt | $ 816,000,000 | 779,000,000 | |
Euro Senior Notes | 1.625% notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 820,000,000 | ||
Debt instrument, stated interest rate | 1.625% | ||
Total debt | $ 816,000,000 | 779,000,000 | |
Euro Senior Notes | 1.000% notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 585,000,000 | ||
Debt instrument, stated interest rate | 1.00% | ||
Total debt | $ 582,000,000 | 556,000,000 | |
Euro Senior Notes | 1.500% notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 585,000,000 | ||
Debt instrument, stated interest rate | 1.50% | ||
Total debt | $ 582,000,000 | 556,000,000 | |
Euro Senior Notes | Floating-rate senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 0 | ||
Total debt | 0 | 559,000,000 | |
Facility notes and bonds | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 320,000,000 | ||
Total debt | 320,000,000 | 320,000,000 | |
Other debt | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 5,000,000 | ||
Total debt | $ 5,000,000 | $ 8,000,000 |
DEBT AND FINANCING ARRANGEMEN_3
DEBT AND FINANCING ARRANGEMENTS - Additional Information (Detail) € in Millions | Jul. 15, 2020USD ($) | Jul. 15, 2020EUR (€) | Apr. 01, 2020USD ($) | Sep. 30, 2020USD ($)Credit_Agreements | Sep. 30, 2020EUR (€)Credit_Agreements | Mar. 24, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||||
Face value of debt instrument | $ 25,869,000,000 | ||||||
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 | $ 4,100,000,000 | ||||||
Sale-lease back outstanding | 0 | ||||||
Long-term debt fair value | 29,300,000,000 | $ 26,900,000,000 | |||||
Finance Lease, Liability | 411,000,000 | $ 498,000,000 | |||||
U.S. Commercial Paper Program | |||||||
Debt Instrument [Line Items] | |||||||
Commercial paper program, authorized to borrow | $ 10,000,000,000 | ||||||
Foreign Commercial Paper Program | |||||||
Debt Instrument [Line Items] | |||||||
Commercial paper program, authorized to borrow | € | € 5,000 | ||||||
Revolving Credit Facility Expiring In 2015 | |||||||
Debt Instrument [Line Items] | |||||||
Maturity | Dec. 8, 2020 | ||||||
Revolving credit facilities | $ 2,000,000,000 | ||||||
Amounts outstanding under this facility | $ 0 | ||||||
Revolving Credit Facility Expiring In 2015 | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin for base rate below LIBOR | 0.00% | ||||||
Revolving Credit Facility Expiring In 2015 | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin for base rate below LIBOR | 1.00% | ||||||
Revolving Credit Facility Expiring In 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facilities | $ 2,500,000,000 | ||||||
Amounts outstanding under this facility | $ 0 | ||||||
Revolving Credit Facility Expiring In 2017 | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin for base rate below LIBOR | 0.00% | ||||||
Revolving Credit Facility Expiring In 2017 | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin rates | 1.00% | ||||||
Applicable margin for base rate below LIBOR | 1.00% | ||||||
Senior notes | 2.350% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 2.35% | 2.35% | |||||
Face value of debt instrument | $ 600,000,000 | ||||||
Senior notes | 3.050% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 3.05% | 3.05% | |||||
Face value of debt instrument | $ 1,000,000,000 | ||||||
Senior notes | 3.900% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 3.90% | 3.90% | 3.90% | ||||
Face value of debt instrument | $ 1,000,000,000 | $ 1,000,000,000 | |||||
Senior notes | 4.450% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 4.45% | 4.45% | 4.45% | ||||
Face value of debt instrument | $ 750,000,000 | $ 750,000,000 | |||||
Senior notes | 5.200% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 5.20% | 5.20% | 5.20% | ||||
Face value of debt instrument | $ 500,000,000 | $ 500,000,000 | |||||
Senior notes | 5.300% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 5.30% | 5.30% | 5.30% | ||||
Face value of debt instrument | $ 1,250,000,000 | $ 1,250,000,000 | |||||
Senior notes | 3.400% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 3.40% | 3.40% | |||||
Face value of debt instrument | $ 750,000,000 | ||||||
Senior notes | 4.250% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 4.25% | 4.25% | |||||
Face value of debt instrument | $ 750,000,000 | ||||||
Senior notes | 2.500% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 2.50% | 2.50% | |||||
Face value of debt instrument | $ 400,000,000 | ||||||
Senior notes | 2.200% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 2.20% | 2.20% | |||||
Face value of debt instrument | $ 400,000,000 | ||||||
Senior notes | 3.400% senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 3.40% | 3.40% | |||||
Face value of debt instrument | $ 700,000,000 | ||||||
Senior notes | 8.375% debentures | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 8.375% | 8.375% | |||||
Face value of debt instrument | $ 276,000,000 | ||||||
Senior notes | 8.375% debentures | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate | 8.375% | 8.375% | |||||
Face value of debt instrument | $ 0 | ||||||
Repayments of Debt | $ 424,000,000 | ||||||
Euro Senior Notes | Floating-rate senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Face value of debt instrument | 0 | ||||||
Repayments of Debt | $ 566,000,000 | € 500 | |||||
Commercial Paper | |||||||
Debt Instrument [Line Items] | |||||||
Face value of debt instrument | 1,202,000,000 | ||||||
Commercial Paper | U.S. Commercial Paper Program | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 935,000,000 | ||||||
Debt, weighted average interest rate | 0.12% | 0.12% | |||||
Commercial Paper | Foreign Commercial Paper Program | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 267,000,000 | € 228 | |||||
Debt, weighted average interest rate | 0.28% | 0.28% | |||||
LIBOR rate | Revolving Credit Facility Expiring In 2015 | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin rates | 0.25% | ||||||
LIBOR rate | Revolving Credit Facility Expiring In 2015 | Maximum [Member] | |||||||
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% | ||||||
LIBOR | Revolving Credit Facility Expiring In 2015 | |||||||
Debt Instrument [Line Items] | |||||||
Applicable margin rates | 1.00% | ||||||
Federal Funds Rate | Revolving Credit Facility Expiring In 2015 | |||||||
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% |
LEASES - Narratives (Details)
LEASES - Narratives (Details) | 3 Months Ended |
Sep. 30, 2020aircraft | |
Lessee, Lease, Description [Line Items] | |
Number of lease aircrafts (aircraft) | 324 |
Number of lease aircrafts, finance (aircraft) | 27 |
Number of lease aircrafts, operating (aircraft) | 16 |
Number of lease aircrafts, short-term (aircraft) | 281 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 month |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 189 years |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease costs | $ 180 | $ 151 | $ 527 | $ 474 |
Amortization of assets | 20 | 18 | 58 | 55 |
Interest on lease liabilities | 4 | 5 | 14 | 14 |
Total finance lease costs | 24 | 23 | 72 | 69 |
Variable lease costs | 58 | 69 | 171 | 148 |
Short-term lease costs | 260 | 194 | 716 | 633 |
Total lease costs | $ 522 | $ 437 | $ 1,486 | $ 1,324 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Operating Leases: | ||
Operating lease right-of-use assets | $ 3,022,000,000 | $ 2,856,000,000 |
Current maturities of operating leases | 560,000,000 | 538,000,000 |
Non-current operating leases | 2,473,000,000 | 2,391,000,000 |
Total lease obligations | 3,033,000,000 | 2,929,000,000 |
Finance Leases: | ||
Finance Lease, Right-of-Use Asset | 1,289,000,000 | 1,502,000,000 |
Current maturities of long-term debt, commercial paper and finance leases | 88,000,000 | 181,000,000 |
Long-term debt and finance leases | 323,000,000 | 317,000,000 |
Total lease obligations | $ 411,000,000 | $ 498,000,000 |
Weighted average remaining lease term (in years): | ||
Operating leases | 9 years 4 months 24 days | 9 years 8 months 12 days |
Finance leases | 9 years 4 months 24 days | 8 years 10 months 24 days |
Weighted average discount rate: | ||
Operating leases | 2.56% | 2.78% |
Finance leases | 4.25% | 4.03% |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 508 | $ 455 |
Operating cash flows from finance leases | 11 | 11 |
Financing cash flows from finance leases | 136 | 121 |
Operating leases | 544 | 144 |
Finance leases | $ 50 | $ 61 |
LEASES - Maturity Schedule Afte
LEASES - Maturity Schedule After Adoption (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Finance Leases | ||
2020 | $ 61,000,000 | |
2021 | 62,000,000 | |
2022 | 56,000,000 | |
2023 | 45,000,000 | |
2024 | 37,000,000 | |
Thereafter | 252,000,000 | |
Total lease payments | 513,000,000 | |
Less: Imputed interest | (102,000,000) | |
Total lease obligations | 411,000,000 | $ 498,000,000 |
Less: Current obligations | (88,000,000) | (181,000,000) |
Long-term lease obligations | 323,000,000 | 317,000,000 |
Operating Leases | ||
2020 | 148,000,000 | |
2021 | 634,000,000 | |
2022 | 541,000,000 | |
2023 | 440,000,000 | |
2024 | 323,000,000 | |
Thereafter | 1,504,000,000 | |
Total lease payments | 3,590,000,000 | |
Less: Imputed interest | (557,000,000) | |
Total lease obligations | 3,033,000,000 | 2,929,000,000 |
Less: Current obligations | (560,000,000) | (538,000,000) |
Long-term lease obligations | $ 2,473,000,000 | $ 2,391,000,000 |
LEGAL PROCEEDINGS AND CONTING_2
LEGAL PROCEEDINGS AND CONTINGENCIES (Narratives) (Details) $ in Millions | Nov. 07, 2019USD ($) | May 25, 2017USD ($) | Aug. 31, 2016Defendants | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
U.S. District Court for the Southern District of New York | |||||
Loss Contingencies | |||||
Settlement amount | $ 19 | $ 9 | |||
Penalties related to settlement | $ 79 | $ 238 | |||
Loss Contingency Accrual | $ 100 | $ 100 | |||
CNMC | |||||
Loss Contingencies | |||||
Number of defendants | Defendants | 10 |
SHAREOWNERS' EQUITY - Additiona
SHAREOWNERS' EQUITY - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($)Classes_of_Common_StockVote$ / sharesshares | Sep. 30, 2019USD ($)shares | Sep. 30, 2020USD ($)Classes_of_Common_StockVote$ / sharesshares | Sep. 30, 2019USD ($)shares | May 31, 2016USD ($) | |
Stockholders Equity Note [Line Items] | |||||
Classes of Common Stock, Number | Classes_of_Common_Stock | 2 | 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 | |||
Payments for Repurchase of Common Stock | $ 224 | $ 751 | |||
Common stock authorized for purchase, amount | $ 8,000 | ||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 2,100 | 2,100 | |||
Change in non-controlling minority interest | 1 | $ (2) | (2) | 0 | |
Accelerated Share Repurchases, Settlement (Payment) or Receipt | $ 0 | $ 0 | |||
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 | |||
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 | |||
Class A and B Common Stock | |||||
Stockholders Equity Note [Line Items] | |||||
Total of Class A and Class B common stock, repurchased, value | $ 251 | $ 217 | $ 753 | ||
Common stock purchases | shares | 0 | 2,200,000 | 2,100,000 | 7,000,000 | |
Options Held [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Option premiums received | $ 20 | $ 21 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares | 0 | 0 | |||
Net Income [Member] [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
TotalOtherComprehensiveIncomeReclassification, Net of Tax | $ (15) | 7 | $ (2) | (39) | |
Unrealized gain (loss) on cash flow hedges, net of tax: | |||||
Stockholders Equity Note [Line Items] | |||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | (8) | (14) | (39) | (27) | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | 27 | 45 | 125 | 85 | |
Unrealized gain (loss) on cash flow hedges, net of tax: | Income Tax Expense Benefit [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | (8) | (14) | (39) | (27) | |
Unrealized gain (loss) on cash flow hedges, net of tax: | Net Income [Member] [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | 27 | 45 | 125 | 85 | |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Income Tax Expense Benefit [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | 13 | 14 | 40 | 41 | |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Net Income [Member] [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Reclassification to earnings (net of tax effect of $_ and $12) | (43) | (43) | (130) | (129) | |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | Investment Income and Other | |||||
Stockholders Equity Note [Line Items] | |||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), Reclassification Adjustment from AOCI, before Tax | (56) | (57) | (170) | (170) | |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Reclassification to earnings, tax effect | 0 | (1) | (1) | (1) | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 1 | 5 | 3 | 5 | |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | Income Tax Expense Benefit [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Reclassification to earnings, tax effect | 0 | (1) | (1) | (1) | |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | Net Income [Member] [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 1 | 5 | 3 | 5 | |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | Investment Income and Other | |||||
Stockholders Equity Note [Line Items] | |||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | 1 | 6 | 4 | 6 | |
Foreign Exchange Contracts | Unrealized gain (loss) on cash flow hedges, net of tax: | Revenue | |||||
Stockholders Equity Note [Line Items] | |||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 38 | 62 | 173 | 124 | |
Interest Contracts | Unrealized gain (loss) on cash flow hedges, net of tax: | Interest Expense | |||||
Stockholders Equity Note [Line Items] | |||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | $ (3) | $ (3) | $ (9) | $ (12) |
Roll-forward of Common Stock, A
Roll-forward of Common Stock, Additional Paid-in Capital, Retained Earnings Accounts and Noncontrolling Interest (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 3,267 | |||
Net income attributable to common shareowners | $ 1,957 | $ 1,750 | 4,690 | $ 4,546 |
Balance at end of period | 5,592 | 5,592 | ||
Non-Controlling Minority Interest | ||||
Balance at beginning of period | 13 | 18 | 16 | 16 |
Change in non-controlling minority interest | 1 | (2) | (2) | 0 |
Balance at end of period | $ 14 | $ 16 | $ 14 | $ 16 |
Common stock, cash paid for dividends, per share | $ 1.01 | $ 0.96 | $ 3.03 | $ 2.88 |
Dividends, common stock | $ 28 | $ 27 | $ 151 | $ 121 |
Class A common stock | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period, shares | 156 | |||
Balance at end of period, shares | 150 | 150 | ||
Class B common stock | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period, shares | 701 | |||
Balance at end of period, shares | 714 | 714 | ||
Common Stock | Class A common stock | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 2 | $ 2 | $ 2 | $ 2 |
Balance at beginning of period, shares | 157 | 161 | 156 | 163 |
Common stock purchases | $ 0 | $ 0 | $ 0 | $ 0 |
Common stock purchases, shares | 0 | (1) | 0 | (3) |
Stock award plans | $ 0 | $ 0 | $ 0 | $ 0 |
Stock award plans, shares | 0 | 0 | 6 | 4 |
Common stock issuances | $ 0 | $ 0 | $ 0 | $ 0 |
Common stock issuances, shares | 1 | 1 | 3 | 2 |
Conversions of class A to class B common stock | $ 0 | $ 0 | $ 0 | $ 0 |
Conversions of Class A to Class B common stock, shares | 8 | 4 | (15) | (9) |
Balance at end of period | $ 2 | $ 2 | $ 2 | $ 2 |
Balance at end of period, shares | 150 | 157 | 150 | 157 |
Common Stock | Class B common stock | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 7 | $ 7 | $ 7 | $ 7 |
Balance at beginning of period, shares | 706 | 698 | 701 | 696 |
Common stock purchases | $ 0 | $ 0 | $ 0 | $ 0 |
Common stock purchases, shares | 0 | (1) | (2) | (4) |
Conversions of class A to class B common stock | $ 0 | $ 0 | $ 0 | $ 0 |
Conversions of Class A to Class B common stock, shares | (8) | (4) | (15) | (9) |
Balance at end of period | $ 7 | $ 7 | $ 7 | $ 7 |
Balance at end of period, shares | 714 | 701 | 714 | 701 |
Additional Paid-In Capital | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 255 | $ 102 | $ 150 | $ 0 |
Common stock purchases | (217) | (753) | ||
Stock award plans | 0 | (251) | 215 | 584 |
Common stock issuances | 90 | 56 | 342 | 277 |
Option premiums paid | 0 | 20 | 0 | 21 |
Balance at end of period | 490 | 129 | 490 | 129 |
Stock award plans | 145 | 202 | ||
Retained Earnings | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | 10,032 | 9,109 | 9,105 | 8,006 |
Net income attributable to common shareowners | 1,957 | 1,750 | 4,690 | 4,546 |
Balance at end of period | 11,115 | 10,037 | 11,115 | 10,037 |
Dividends ($1.01 and $0.96 per share) (1) | (873) | (825) | (2,679) | (2,518) |
Other | $ (1) | $ 3 | $ (1) | $ 3 |
Activity in Accumulated Other C
Activity in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | $ (5,997) | |||
Translation adjustment (net of tax effect of $(14) and $41) | $ 65 | $ (48) | (66) | $ (28) |
Current period changes in fair value (net of tax effect of $0 and $1) | (2) | (3) | 3 | 6 |
Current period changes in fair value (net of tax effect of $(53) and $79) | (195) | 206 | (92) | 270 |
Balance at end of period | (6,022) | (4,617) | (6,022) | (4,617) |
Foreign currency translation gain (loss): | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (1,209) | (1,106) | (1,078) | (1,126) |
Translation adjustment (net of tax effect of $(14) and $41) | 65 | (48) | (66) | (28) |
Balance at end of period | (1,144) | (1,154) | (1,144) | (1,154) |
Aggregate adjustment for the period, tax | (14) | 41 | (15) | 43 |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | 9 | 7 | 4 | (2) |
Current period changes in fair value (net of tax effect of $0 and $1) | (1) | 2 | 6 | 11 |
Reclassification to earnings (net of tax effect of $0 and $(1)) | (1) | (5) | (3) | (5) |
Balance at end of period | 7 | 4 | 7 | 4 |
Current period changes in fair value, tax effect | 0 | 1 | 1 | 4 |
Reclassification to earnings, tax effect | 0 | (1) | (1) | (1) |
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | 215 | 104 | 112 | 40 |
Current period changes in fair value (net of tax effect of $(53) and $79) | (168) | 251 | 33 | 355 |
Reclassification to earnings (net of tax effect of $(8) and $(14)) | (27) | (45) | (125) | (85) |
Balance at end of period | 20 | 310 | 20 | 310 |
Current period changes in fair value, tax effect | (53) | 79 | 10 | 112 |
Reclassification to earnings, tax effect | (8) | (14) | (39) | (27) |
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (4,948) | (3,820) | (5,035) | (3,906) |
Remeasurement of plan assets and liabilities (net of tax effect of $0 and $214) (1) | 43 | 43 | 130 | 129 |
Balance at end of period | (4,905) | (3,777) | (4,905) | (3,777) |
Reclassification to earnings, tax effect | 13 | 14 | 40 | 41 |
Income Tax Expense Benefit [Member] | Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification to earnings, tax effect | 0 | (1) | (1) | (1) |
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 | (8) | (14) | (39) | (27) |
Net Income [Member] [Member] | Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification to earnings (net of tax effect of $0 and $(1)) | (1) | (5) | (3) | (5) |
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 $(8) and $(14)) | $ (27) | $ (45) | $ (125) | $ (85) |
SHAREOWNERS' EQUITY - Gains (Lo
SHAREOWNERS' EQUITY - Gains (Losses) Reclassified from AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
TotalOtherComprehensiveIncomeReclassification, Net of Tax | $ (15) | $ 7 | $ (2) | $ (39) |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Reclassification to earnings, tax effect | 0 | (1) | (1) | (1) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 1 | 5 | 3 | 5 |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Reclassification to earnings, tax effect | 0 | (1) | (1) | (1) |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 1 | 5 | 3 | 5 |
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 | 6 | 4 | 6 |
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Reclassification to earnings, tax effect | (8) | (14) | (39) | (27) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | 27 | 45 | 125 | 85 |
Unrealized gain (loss) on cash flow hedges, net of tax: | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Reclassification to earnings, tax effect | (8) | (14) | (39) | (27) |
Unrealized gain (loss) on cash flow hedges, net of tax: | Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | 27 | 45 | 125 | 85 |
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 | (3) | (3) | (9) | (12) |
Unrealized gain (loss) on cash flow hedges, net of tax: | Foreign exchange contracts | Revenue | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | 38 | 62 | 173 | 124 |
Accumulated Defined Benefit Plans Adjustment [Member] | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | 13 | 14 | 40 | 41 |
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 | (43) | (43) | (130) | (129) |
Accumulated Defined Benefit Plans Adjustment [Member] | Investment Income and Other | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), Reclassification Adjustment from AOCI, before Tax | $ (56) | $ (57) | $ (170) | $ (170) |
SHAREOWNERS' EQUITY - Activity
SHAREOWNERS' EQUITY - Activity in Deferred Compensation Program (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 3,267 | |||
Balance at beginning of period | 0.4 | |||
Balance at end of period | $ 5,592 | $ 5,592 | ||
Balance at end of period | 0.4 | 0.4 | ||
Treasury Stock [Member] | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ (20) | $ (25) | $ (26) | $ (32) |
Balance at beginning of period | 0 | 0 | 0 | (1) |
Reinvested dividends | $ 0 | $ 0 | $ (1) | $ (1) |
Reinvested dividends | 0 | 0 | 0 | 0 |
Benefit payments | 0 | 0 | 0 | 1 |
Benefit payments | $ 0 | $ 0 | $ (7) | $ (8) |
Balance at end of period | $ (20) | $ (25) | $ (20) | $ (25) |
Balance at end of period | 0 | 0 | 0 | 0 |
Deferred Compensation Obligations | ||||
Stockholders Equity Note [Roll Forward] | ||||
Balance at beginning of period | $ 20 | $ 25 | $ 26 | $ 32 |
Reinvested dividends | 0 | 0 | 1 | 1 |
Benefit payments | 0 | 0 | (7) | (8) |
Balance at end of period | $ 20 | $ 25 | $ 20 | $ 25 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2020SegmentsCountries_and_Territories | |
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 | 200 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 21,238 | $ 18,318 | $ 59,732 | $ 53,526 |
Operating Profit | 2,363 | 2,128 | 5,647 | 5,665 |
U.S. Domestic Package | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 13,225 | 11,455 | 37,755 | 33,085 |
Operating Profit | 1,098 | 1,216 | 2,644 | 3,090 |
International Package | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 4,087 | 3,494 | 11,175 | 10,458 |
Operating Profit | 966 | 667 | 2,288 | 1,858 |
Supply Chain & Freight | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 3,926 | 3,369 | 10,802 | 9,983 |
Operating Profit | $ 299 | $ 245 | $ 715 | $ 717 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net income attributable to common shareowners | $ 1,957 | $ 1,750 | $ 4,690 | $ 4,546 |
Denominator: | ||||
Weighted average shares | 864 | 858 | 861 | 859 |
Deferred compensation obligations | 0 | 0 | 0 | 0 |
Vested portion of restricted shares | 4 | 6 | 5 | 6 |
Denominator for basic earnings per share | 868 | 864 | 866 | 865 |
Effect of dilutive securities: | ||||
Denominator for diluted earnings per share | 872 | 870 | 870 | 869 |
Basic earnings per share (usd per share) | $ 2.25 | $ 2.03 | $ 5.42 | $ 5.26 |
Diluted earnings per share (usd per share) | $ 2.24 | $ 2.01 | $ 5.39 | $ 5.23 |
Restricted performance units | ||||
Effect of dilutive securities: | ||||
Incremental common shares attributable to share-based payment arrangements | 4 | 6 | 4 | 4 |
Stock option plans | ||||
Effect of dilutive securities: | ||||
Incremental common shares attributable to share-based payment arrangements | 0 | 0 | 0 | 0 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Stock Option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
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 | 0.3 | 0.8 | 0.7 |
DERIVATIVE INSTRUMENTS AND RI_3
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Collateral received under contractual provisions | $ 319,000,000 | $ 319,000,000 | $ 495,000,000 |
Derivative net liability position | 0 | 0 | 0 |
Commodity Asset | $ 0 | 0 | 0 |
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 | $ 139,000,000 | ||
Maximum term over hedging exposures to the variability of cash flow | 12 years | ||
Derivative Instrument Recognition Period | 10 years | ||
Cash Collateral from Counterparties [Abstract] | $ 0 | $ 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Derivative [Line Items] | |||
Derivatives classified as Level 1 or Level 3 | 0 | 0 | 0 |
Significant Other Observable Inputs (Level 2) | |||
Derivative [Line Items] | |||
Liability Derivatives | 38,000,000 | 38,000,000 | 37,000,000 |
Derivative Asset, Fair Value, Gross Asset | 312,000,000 | 312,000,000 | 432,000,000 |
Significant Unobservable Inputs (Level 3) | |||
Derivative [Line Items] | |||
Derivatives classified as Level 1 or Level 3 | 0 | 0 | $ 0 |
Long-term debt and finance leases | Not Designated as Hedging Instrument | Fair Value | |||
Derivative [Line Items] | |||
Liability Derivatives | $ 9,000,000 | $ 9,000,000 |
Notional Amounts of Outstanding
Notional Amounts of Outstanding Derivative Positions (Detail) € in Millions, £ in Millions, $ in Millions, $ in Millions, $ in Millions | Sep. 30, 2020EUR (€) | Sep. 30, 2020GBP (£) | Sep. 30, 2020CAD ($) | Sep. 30, 2020HKD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019GBP (£) | Dec. 31, 2019CAD ($) | Dec. 31, 2019HKD ($) | Dec. 31, 2019USD ($) |
Derivative [Line Items] | ||||||||||
Derivative, notional amount | € 3,711 | £ 1,345 | $ 1,269 | $ 3,479 | € 4,571 | £ 1,494 | $ 1,402 | $ 3,327 | ||
Fixed to Floating Interest Rate Swaps | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative, notional amount | $ 3,250 | $ 3,674 | ||||||||
Floating to Fixed Interest Rate Swaps | ||||||||||
Derivative [Line Items] | ||||||||||
Derivative, notional amount | $ 778 | $ 778 |
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, 2020 | Dec. 31, 2019 |
Asset Derivatives | ||
Asset Derivatives | $ 312 | $ 432 |
Net Amounts if Right of Offset had been Applied | 289 | 407 |
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 38 | 37 |
Net Amounts if Right of Offset had been Applied | 15 | 12 |
Designated as Hedging Instrument | Foreign exchange contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 121 | 138 |
Net Amounts if Right of Offset had been Applied | 116 | 131 |
Designated as Hedging Instrument | Foreign exchange contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 138 | 252 |
Net Amounts if Right of Offset had been Applied | 124 | 236 |
Designated as Hedging Instrument | Foreign exchange contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 5 | 7 |
Net Amounts if Right of Offset had been Applied | 0 | 0 |
Designated as Hedging Instrument | Foreign exchange contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 14 | 16 |
Net Amounts if Right of Offset had been Applied | 0 | 0 |
Designated as Hedging Instrument | Interest rate contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 11 | 2 |
Net Amounts if Right of Offset had been Applied | 11 | 2 |
Designated as Hedging Instrument | Interest rate contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 33 | 21 |
Net Amounts if Right of Offset had been Applied | 30 | 20 |
Designated as Hedging Instrument | Interest rate contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 14 | 11 |
Net Amounts if Right of Offset had been Applied | 11 | 10 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 2 | 7 |
Net Amounts if Right of Offset had been Applied | 2 | 7 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 1 | 0 |
Net Amounts if Right of Offset had been Applied | 1 | 0 |
Not Designated as Hedging Instrument | Interest rate contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 7 | 0 |
Net Amounts if Right of Offset had been Applied | 6 | 0 |
Not Designated as Hedging Instrument | Interest rate contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 0 | 12 |
Net Amounts if Right of Offset had been Applied | 0 | 11 |
Not Designated as Hedging Instrument | Interest rate contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 4 | 0 |
Net Amounts if Right of Offset had been Applied | 3 | 0 |
Not Designated as Hedging Instrument | Interest rate contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 0 | 3 |
Net Amounts if Right of Offset had been Applied | $ 0 | $ 2 |
DERIVATIVE INSTRUMENTS AND RI_4
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Fair Value Derivative Balance Sheet Location (Details) - Designated as Hedging Instrument - Long-term debt and finance leases - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying Amount | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives | $ 2,828 | $ 3,234 |
Fair Value | ||
Derivatives, Fair Value [Line Items] | ||
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | $ 55 | $ 40 |
DERIVATIVE INSTRUMENTS AND RI_5
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Income Statement and AOCI Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedged items | $ 0 | $ 0 | $ 0 | $ 0 |
Derivatives designated as hedging instruments | 0 | 0 | 0 | 0 |
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded | 38 | 62 | 173 | 124 |
Revenue | Interest Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain or (loss) reclassified from accumulated other comprehensive income | 0 | 0 | 0 | 0 |
Revenue | Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain or (loss) reclassified from accumulated other comprehensive income | 38 | 62 | 173 | 124 |
Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedged items | 13 | (2) | (21) | (47) |
Derivatives designated as hedging instruments | (13) | 2 | 21 | 47 |
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded | (3) | (3) | (9) | (12) |
Interest Expense | Interest Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain or (loss) reclassified from accumulated other comprehensive income | (3) | (3) | (9) | (12) |
Interest Expense | Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain or (loss) reclassified from accumulated other comprehensive income | $ 0 | $ 0 | $ 0 | $ 0 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments in Cash Flow Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivatives | $ (221) | $ 330 | $ 43 | $ 467 |
Derivative Instruments in Cash Flow Hedging Relationships | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivatives | (3) | (1) | (6) | 10 |
Derivative Instruments in Cash Flow Hedging Relationships | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivatives | (218) | 331 | 49 | 457 |
Non-derivative Instruments in Net Investment Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivatives | (139) | 191 | (92) | 197 |
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 Derivatives | $ (139) | $ 191 | $ (92) | $ 197 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ 32 | $ (41) | $ (21) | $ (65) |
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 | $ 34 | $ (39) | $ (15) | $ (59) |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax | ||||
Effective tax rate | 22.50% | 20.70% | 23.50% | 22.30% |
Effective income tax rate reconciliation, excess tax benefit | 0.00% | 0.00% | 0.20% | 0.10% |
Transformation cost | $ 44 | $ 63 | $ 201 | $ 207 |
Income tax benefit from transformation strategy | 11 | 16 | 50 | 50 |
Income tax benefit | $ (568) | (456) | $ (1,442) | $ (1,304) |
Decrease to valuation allowance | $ (62) |
TRANSFORMATION STRATEGY (Detail
TRANSFORMATION STRATEGY (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | ||||
Compensation and benefits | $ 18 | $ 41 | $ 111 | $ 149 |
Total other expenses | 26 | 22 | 90 | 58 |
Total Transformation Strategy Costs | 44 | 63 | 201 | 207 |
Income Tax Benefit from Transformation Strategy Costs | (11) | (16) | (50) | (50) |
After Tax Transformation Strategy Costs | $ 33 | $ 47 | $ 151 | $ 157 |