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Share Name | Share Symbol | Market | Type |
---|---|---|---|
United Parcel Service | NYSE:UPS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.5769 | 0.39% | 147.9669 | 148.72 | 146.81 | 146.83 | 2,607,559 | 01:00:00 |
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
58-2480149
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
|
|
|
55 Glenlake Parkway, NE Atlanta, Georgia
|
|
30328
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
PART I—FINANCIAL INFORMATION
|
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|
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Item 1.
|
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|
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Item 2.
|
||
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Item 3.
|
||
Item 4.
|
||
|
|
|
PART II—OTHER INFORMATION
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,059
|
|
|
$
|
2,730
|
|
Marketable securities
|
2,613
|
|
|
1,996
|
|
||
Accounts receivable, net
|
6,111
|
|
|
7,134
|
|
||
Other current assets
|
1,340
|
|
|
1,348
|
|
||
Total Current Assets
|
13,123
|
|
|
13,208
|
|
||
Property, Plant and Equipment, Net
|
18,251
|
|
|
18,352
|
|
||
Goodwill
|
3,427
|
|
|
3,419
|
|
||
Intangible Assets, Net
|
1,550
|
|
|
1,549
|
|
||
Non-Current Investments and Restricted Cash
|
485
|
|
|
473
|
|
||
Deferred Income Tax Assets
|
310
|
|
|
255
|
|
||
Other Non-Current Assets
|
1,193
|
|
|
1,055
|
|
||
Total Assets
|
$
|
38,339
|
|
|
$
|
38,311
|
|
LIABILITIES AND SHAREOWNERS’ EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Current maturities of long-term debt and commercial paper
|
$
|
2,816
|
|
|
$
|
3,018
|
|
Accounts payable
|
2,405
|
|
|
2,587
|
|
||
Accrued wages and withholdings
|
2,149
|
|
|
2,253
|
|
||
Hedge margin liabilities
|
582
|
|
|
717
|
|
||
Income taxes payable
|
133
|
|
|
147
|
|
||
Self-insurance reserves
|
652
|
|
|
657
|
|
||
Accrued group welfare and retirement plan contributions
|
559
|
|
|
525
|
|
||
Other current liabilities
|
665
|
|
|
792
|
|
||
Total Current Liabilities
|
9,961
|
|
|
10,696
|
|
||
Long-Term Debt
|
11,550
|
|
|
11,316
|
|
||
Pension and Postretirement Benefit Obligations
|
11,029
|
|
|
10,638
|
|
||
Deferred Income Tax Liabilities
|
72
|
|
|
115
|
|
||
Self-Insurance Reserves
|
1,811
|
|
|
1,831
|
|
||
Other Non-Current Liabilities
|
1,266
|
|
|
1,224
|
|
||
Shareowners’ Equity:
|
|
|
|
||||
Class A common stock (189 and 194 shares issued in 2016 and 2015)
|
2
|
|
|
2
|
|
||
Class B common stock (691 and 693 shares issued in 2016 and 2015)
|
7
|
|
|
7
|
|
||
Additional paid-in capital
|
—
|
|
|
—
|
|
||
Retained earnings
|
6,223
|
|
|
6,001
|
|
||
Accumulated other comprehensive loss
|
(3,606
|
)
|
|
(3,540
|
)
|
||
Deferred compensation obligations
|
44
|
|
|
51
|
|
||
Less: Treasury stock (1 share in 2016 and 2015)
|
(44
|
)
|
|
(51
|
)
|
||
Total Equity for Controlling Interests
|
2,626
|
|
|
2,470
|
|
||
Noncontrolling Interests
|
24
|
|
|
21
|
|
||
Total Shareowners’ Equity
|
2,650
|
|
|
2,491
|
|
||
Total Liabilities and Shareowners’ Equity
|
$
|
38,339
|
|
|
$
|
38,311
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||
2016
|
|
2015
|
2016
|
|
2015
|
|||||||||
Revenue
|
$
|
14,629
|
|
|
$
|
14,095
|
|
$
|
29,047
|
|
|
$
|
28,072
|
|
Operating Expenses:
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
7,738
|
|
|
7,502
|
|
15,591
|
|
|
15,066
|
|
||||
Repairs and maintenance
|
383
|
|
|
357
|
|
764
|
|
|
707
|
|
||||
Depreciation and amortization
|
555
|
|
|
510
|
|
1,107
|
|
|
1,016
|
|
||||
Purchased transportation
|
2,070
|
|
|
1,777
|
|
4,094
|
|
|
3,631
|
|
||||
Fuel
|
505
|
|
|
639
|
|
939
|
|
|
1,283
|
|
||||
Other occupancy
|
245
|
|
|
230
|
|
514
|
|
|
524
|
|
||||
Other expenses
|
1,095
|
|
|
1,120
|
|
2,177
|
|
|
2,212
|
|
||||
Total Operating Expenses
|
12,591
|
|
|
12,135
|
|
25,186
|
|
|
24,439
|
|
||||
Operating Profit
|
2,038
|
|
|
1,960
|
|
3,861
|
|
|
3,633
|
|
||||
Other Income and (Expense):
|
|
|
|
|
|
|
||||||||
Investment income and other
|
8
|
|
|
4
|
|
25
|
|
|
8
|
|
||||
Interest expense
|
(94
|
)
|
|
(86
|
)
|
(187
|
)
|
|
(173
|
)
|
||||
Total Other Income and (Expense)
|
(86
|
)
|
|
(82
|
)
|
(162
|
)
|
|
(165
|
)
|
||||
Income Before Income Taxes
|
1,952
|
|
|
1,878
|
|
3,699
|
|
|
3,468
|
|
||||
Income Tax Expense
|
683
|
|
|
648
|
|
1,299
|
|
|
1,212
|
|
||||
Net Income
|
$
|
1,269
|
|
|
$
|
1,230
|
|
$
|
2,400
|
|
|
$
|
2,256
|
|
Basic Earnings Per Share
|
$
|
1.43
|
|
|
$
|
1.37
|
|
$
|
2.71
|
|
|
$
|
2.50
|
|
Diluted Earnings Per Share
|
$
|
1.43
|
|
|
$
|
1.35
|
|
$
|
2.69
|
|
|
$
|
2.48
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
2016
|
|
2015
|
||||||||
Net Income
|
$
|
1,269
|
|
|
$
|
1,230
|
|
$
|
2,400
|
|
|
$
|
2,256
|
|
Change in foreign currency translation adjustment, net of tax
|
(31
|
)
|
|
101
|
|
(5
|
)
|
|
(203
|
)
|
||||
Change in unrealized gain (loss) on marketable securities, net of tax
|
2
|
|
|
(1
|
)
|
5
|
|
|
1
|
|
||||
Change in unrealized gain (loss) on cash flow hedges, net of tax
|
43
|
|
|
(159
|
)
|
(119
|
)
|
|
17
|
|
||||
Change in unrecognized pension and postretirement benefit costs, net of tax
|
27
|
|
|
20
|
|
53
|
|
|
52
|
|
||||
Comprehensive Income
|
$
|
1,310
|
|
|
$
|
1,191
|
|
$
|
2,334
|
|
|
$
|
2,123
|
|
|
Six Months Ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net income
|
$
|
2,400
|
|
|
$
|
2,256
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,107
|
|
|
1,016
|
|
||
Pension and postretirement benefit expense
|
537
|
|
|
539
|
|
||
Pension and postretirement benefit contributions
|
(89
|
)
|
|
(99
|
)
|
||
Self-insurance provision
|
(25
|
)
|
|
(22
|
)
|
||
Deferred tax (benefit) expense
|
(31
|
)
|
|
(140
|
)
|
||
Stock compensation expense
|
346
|
|
|
328
|
|
||
Other (gains) losses
|
(105
|
)
|
|
(51
|
)
|
||
Changes in assets and liabilities, net of effects of business acquisitions:
|
|
|
|
||||
Accounts receivable
|
1,054
|
|
|
880
|
|
||
Other current assets
|
230
|
|
|
301
|
|
||
Accounts payable
|
(310
|
)
|
|
(558
|
)
|
||
Accrued wages and withholdings
|
(73
|
)
|
|
(179
|
)
|
||
Other current liabilities
|
(356
|
)
|
|
14
|
|
||
Other operating activities
|
8
|
|
|
(46
|
)
|
||
Net cash from operating activities
|
4,693
|
|
|
4,239
|
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(963
|
)
|
|
(958
|
)
|
||
Proceeds from disposals of property, plant and equipment
|
11
|
|
|
8
|
|
||
Purchases of marketable securities
|
(3,131
|
)
|
|
(4,553
|
)
|
||
Sales and maturities of marketable securities
|
2,340
|
|
|
2,840
|
|
||
Net (increase) decrease in finance receivables
|
(13
|
)
|
|
(13
|
)
|
||
Cash paid for business acquisitions, net of cash and cash equivalents acquired
|
(3
|
)
|
|
(90
|
)
|
||
Other investing activities
|
(35
|
)
|
|
(10
|
)
|
||
Net cash used in investing activities
|
(1,794
|
)
|
|
(2,776
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Net change in short-term debt
|
(1,781
|
)
|
|
2,319
|
|
||
Proceeds from borrowings
|
2,890
|
|
|
1,572
|
|
||
Repayments of borrowings
|
(1,134
|
)
|
|
(1,488
|
)
|
||
Purchases of common stock
|
(1,329
|
)
|
|
(1,348
|
)
|
||
Issuances of common stock
|
147
|
|
|
140
|
|
||
Dividends
|
(1,327
|
)
|
|
(1,270
|
)
|
||
Other financing activities
|
(50
|
)
|
|
(177
|
)
|
||
Net cash used in financing activities
|
(2,584
|
)
|
|
(252
|
)
|
||
Effect Of Exchange Rate Changes On Cash And Cash Equivalents
|
14
|
|
|
(72
|
)
|
||
Net Increase (Decrease) In Cash And Cash Equivalents
|
329
|
|
|
1,139
|
|
||
Cash And Cash Equivalents:
|
|
|
|
||||
Beginning of period
|
2,730
|
|
|
2,291
|
|
||
End of period
|
$
|
3,059
|
|
|
$
|
3,430
|
|
|
2016
|
|
2015
|
||
Expected life (in years)
|
7.5
|
|
|
7.5
|
|
Risk-free interest rate
|
1.66
|
%
|
|
2.07
|
%
|
Expected volatility
|
23.60
|
%
|
|
20.61
|
%
|
Expected dividend yield
|
2.94
|
%
|
|
2.63
|
%
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
June 30, 2016:
|
|
|
|
|
|
|
|
||||||||
Current trading marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
1,358
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,358
|
|
Carbon credit investments
(1)
|
431
|
|
|
—
|
|
|
(178
|
)
|
|
253
|
|
||||
Total trading marketable securities
|
$
|
1,789
|
|
|
$
|
—
|
|
|
$
|
(178
|
)
|
|
$
|
1,611
|
|
|
|
|
|
|
|
|
|
||||||||
Current available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency debt securities
|
$
|
339
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
343
|
|
Mortgage and asset-backed debt securities
|
77
|
|
|
1
|
|
|
—
|
|
|
78
|
|
||||
Corporate debt securities
|
573
|
|
|
2
|
|
|
—
|
|
|
575
|
|
||||
U.S. state and local municipal debt securities
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Equity Securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Non-U.S. government debt securities
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Total available-for-sale marketable securities
|
$
|
995
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
1,002
|
|
|
|
|
|
|
|
|
|
||||||||
Total current marketable securities
|
$
|
2,784
|
|
|
$
|
7
|
|
|
$
|
(178
|
)
|
|
$
|
2,613
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
Current trading marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
715
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
715
|
|
Non-U.S. government debt securities
(1)
|
363
|
|
|
—
|
|
|
—
|
|
|
363
|
|
||||
Carbon credit investments
(1)
|
347
|
|
|
9
|
|
|
(5
|
)
|
|
351
|
|
||||
Total trading marketable securities
|
$
|
1,425
|
|
|
$
|
9
|
|
|
$
|
(5
|
)
|
|
$
|
1,429
|
|
|
|
|
|
|
|
|
|
||||||||
Current available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency debt securities
|
$
|
341
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
340
|
|
Mortgage and asset-backed debt securities
|
74
|
|
|
1
|
|
|
(1
|
)
|
|
74
|
|
||||
Corporate debt securities
|
147
|
|
|
—
|
|
|
(1
|
)
|
|
146
|
|
||||
U.S. state and local municipal debt securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Equity securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Non-U.S. government debt securities
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Total available-for-sale marketable securities
|
$
|
569
|
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
|
$
|
567
|
|
|
|
|
|
|
|
|
|
||||||||
Total current marketable securities
|
$
|
1,994
|
|
|
$
|
10
|
|
|
$
|
(8
|
)
|
|
$
|
1,996
|
|
(1)
These investments are hedged with forward contracts that are not designated in hedging relationships. See Note 14 for offsetting statement of consolidated income impact.
|
|
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
$
|
1,816
|
|
|
$
|
1,816
|
|
Due after one year through three years
|
449
|
|
|
452
|
|
||
Due after three years through five years
|
15
|
|
|
15
|
|
||
Due after five years
|
71
|
|
|
75
|
|
||
|
2,351
|
|
|
2,358
|
|
||
Equity and carbon credit investments
|
433
|
|
|
255
|
|
||
|
$
|
2,784
|
|
|
$
|
2,613
|
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Balance
|
||||||||
June 30, 2016:
|
|
|
|
|
|
|
|
||||||||
Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency debt securities
|
$
|
343
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
343
|
|
Mortgage and asset-backed debt securities
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
||||
Corporate debt securities
|
—
|
|
|
1,932
|
|
|
—
|
|
|
1,932
|
|
||||
U.S. state and local municipal debt securities
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Equity securities
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Non-U.S. government debt securities
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Carbon credit investments
|
253
|
|
|
—
|
|
|
—
|
|
|
253
|
|
||||
Total marketable securities
|
596
|
|
|
2,017
|
|
|
—
|
|
|
2,613
|
|
||||
Other non-current investments
|
19
|
|
|
—
|
|
|
22
|
|
|
41
|
|
||||
Total
|
$
|
615
|
|
|
$
|
2,017
|
|
|
$
|
22
|
|
|
$
|
2,654
|
|
December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency debt securities
|
$
|
340
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
340
|
|
Mortgage and asset-backed debt securities
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||
Corporate debt securities
|
—
|
|
|
861
|
|
|
—
|
|
|
861
|
|
||||
U.S. state and local municipal debt securities
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Equity securities
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Non-U.S. government debt securities
|
—
|
|
|
366
|
|
|
—
|
|
|
366
|
|
||||
Carbon credit investments
|
351
|
|
|
—
|
|
|
—
|
|
|
351
|
|
||||
Total marketable securities
|
691
|
|
|
1,305
|
|
|
—
|
|
|
1,996
|
|
||||
Other non-current investments
|
19
|
|
|
—
|
|
|
32
|
|
|
51
|
|
||||
Total
|
$
|
710
|
|
|
$
|
1,305
|
|
|
$
|
32
|
|
|
$
|
2,047
|
|
|
Marketable
Securities
|
|
Other
Non-Current
Investments
|
|
Total
|
||||||
Balance on April 1, 2016
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
27
|
|
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gains (losses):
|
|
|
|
|
|
||||||
Included in earnings (in investment income and other)
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|||
Included in accumulated other comprehensive income (pre-tax)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance on June 30, 2016
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Marketable
Securities
|
|
Other
Non-Current
Investments
|
|
Total
|
||||||
Balance on April 1, 2015
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
56
|
|
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gains (losses):
|
|
|
|
|
|
||||||
Included in earnings (in investment income and other)
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|||
Included in accumulated other comprehensive income (pre-tax)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance on June 30, 2015
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
48
|
|
|
|
|
|
|
|
||||||
|
Marketable
Securities
|
|
Other
Investments
|
|
Total
|
||||||
Balance on January 1, 2016
|
$
|
—
|
|
|
32
|
|
|
32
|
|
||
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gains (losses):
|
|
|
|
|
|
||||||
Included in earnings (in investment income and other)
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|||
Included in accumulated other comprehensive income (pre-tax)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance on June 30, 2016
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
22
|
|
|
|
|
|
|
|
||||||
|
Marketable
Securities
|
|
Other
Investments
|
|
Total
|
||||||
Balance on January 1, 2015
|
$
|
—
|
|
|
64
|
|
|
64
|
|
||
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gains (losses):
|
|
|
|
|
|
||||||
Included in earnings (in investment income and other)
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
|||
Included in accumulated other comprehensive income (pre-tax)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance on June 30, 2015
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
48
|
|
|
2016
|
|
2015
|
||||
Vehicles
|
$
|
8,242
|
|
|
$
|
8,111
|
|
Aircraft
|
15,820
|
|
|
15,815
|
|
||
Land
|
1,290
|
|
|
1,263
|
|
||
Buildings
|
3,378
|
|
|
3,280
|
|
||
Building and leasehold improvements
|
3,558
|
|
|
3,450
|
|
||
Plant equipment
|
8,191
|
|
|
8,026
|
|
||
Technology equipment
|
1,699
|
|
|
1,670
|
|
||
Equipment under operating leases
|
29
|
|
|
30
|
|
||
Construction-in-progress
|
393
|
|
|
273
|
|
||
|
42,600
|
|
|
41,918
|
|
||
Less: Accumulated depreciation and amortization
|
(24,349
|
)
|
|
(23,566
|
)
|
||
|
$
|
18,251
|
|
|
$
|
18,352
|
|
|
U.S. Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International
Pension Benefits
|
||||||||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||||||
Three Months Ended June 30:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
353
|
|
|
$
|
381
|
|
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
13
|
|
|
$
|
13
|
|
Interest cost
|
457
|
|
|
424
|
|
|
30
|
|
|
30
|
|
|
11
|
|
|
11
|
|
||||||
Expected return on assets
|
(629
|
)
|
|
(622
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(15
|
)
|
|
(16
|
)
|
||||||
Amortization of prior service cost
|
42
|
|
|
42
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Net periodic benefit cost
|
$
|
223
|
|
|
$
|
225
|
|
|
$
|
37
|
|
|
$
|
35
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International
Pension Benefits
|
||||||||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||||||
Six Months Ended June 30:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
706
|
|
|
$
|
763
|
|
|
$
|
14
|
|
|
$
|
17
|
|
|
$
|
25
|
|
|
$
|
25
|
|
Interest cost
|
914
|
|
|
847
|
|
|
60
|
|
|
61
|
|
|
21
|
|
|
22
|
|
||||||
Expected return on assets
|
(1,258
|
)
|
|
(1,244
|
)
|
|
(2
|
)
|
|
(8
|
)
|
|
(29
|
)
|
|
(31
|
)
|
||||||
Amortization of prior service cost
|
84
|
|
|
84
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
1
|
|
||||||
Net periodic benefit cost
|
$
|
446
|
|
|
$
|
450
|
|
|
$
|
74
|
|
|
$
|
72
|
|
|
$
|
17
|
|
|
$
|
17
|
|
|
U.S. Domestic
Package
|
|
International
Package
|
|
Supply Chain &
Freight
|
|
Consolidated
|
||||||||
December 31, 2015:
|
$
|
715
|
|
|
$
|
425
|
|
|
$
|
2,279
|
|
|
$
|
3,419
|
|
Acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Currency / Other
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
8
|
|
June 30, 2016:
|
$
|
715
|
|
|
$
|
427
|
|
|
$
|
2,285
|
|
|
$
|
3,427
|
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
||||||
June 30, 2016:
|
|
|
|
|
|
||||||
Capitalized software
|
$
|
2,865
|
|
|
$
|
(2,123
|
)
|
|
$
|
742
|
|
Licenses
|
211
|
|
|
(135
|
)
|
|
76
|
|
|||
Franchise rights
|
128
|
|
|
(86
|
)
|
|
42
|
|
|||
Customer relationships
|
509
|
|
|
(59
|
)
|
|
450
|
|
|||
Trade name
|
200
|
|
|
—
|
|
|
200
|
|
|||
Trademarks, patents and other
|
58
|
|
|
(18
|
)
|
|
40
|
|
|||
Total Intangible Assets, Net
|
$
|
3,971
|
|
|
$
|
(2,421
|
)
|
|
$
|
1,550
|
|
December 31, 2015:
|
|
|
|
|
|
||||||
Capitalized software
|
$
|
2,739
|
|
|
$
|
(2,026
|
)
|
|
$
|
713
|
|
Licenses
|
189
|
|
|
(116
|
)
|
|
73
|
|
|||
Franchise rights
|
125
|
|
|
(83
|
)
|
|
42
|
|
|||
Customer relationships
|
511
|
|
|
(35
|
)
|
|
476
|
|
|||
Trade name
|
200
|
|
|
—
|
|
|
200
|
|
|||
Trademarks, patents and other
|
61
|
|
|
(16
|
)
|
|
45
|
|
|||
Total Intangible Assets, Net
|
$
|
3,825
|
|
|
$
|
(2,276
|
)
|
|
$
|
1,549
|
|
|
Principal
Amount
|
|
|
|
Carrying Value
|
||||||||
|
|
Maturity
|
|
2016
|
|
2015
|
|||||||
Commercial paper
|
$
|
2,751
|
|
|
2016
|
|
$
|
2,749
|
|
|
$
|
2,965
|
|
Fixed-rate senior notes:
|
|
|
|
|
|
|
|
||||||
1.125% senior notes
|
375
|
|
|
2017
|
|
375
|
|
|
372
|
|
|||
5.50% senior notes
|
750
|
|
|
2018
|
|
784
|
|
|
787
|
|
|||
5.125% senior notes
|
1,000
|
|
|
2019
|
|
1,073
|
|
|
1,064
|
|
|||
3.125% senior notes
|
1,500
|
|
|
2021
|
|
1,656
|
|
|
1,613
|
|
|||
2.45% senior notes
|
1,000
|
|
|
2022
|
|
1,042
|
|
|
991
|
|
|||
6.20% senior notes
|
1,500
|
|
|
2038
|
|
1,481
|
|
|
1,481
|
|
|||
4.875% senior notes
|
500
|
|
|
2040
|
|
489
|
|
|
489
|
|
|||
3.625% senior notes
|
375
|
|
|
2042
|
|
367
|
|
|
367
|
|
|||
8.375% Debentures:
|
|
|
|
|
|
|
|
||||||
8.375% debentures
|
424
|
|
|
2020
|
|
480
|
|
|
474
|
|
|||
8.375% debentures
|
276
|
|
|
2030
|
|
282
|
|
|
282
|
|
|||
Pound Sterling notes:
|
|
|
|
|
|
|
|
||||||
5.50% notes
|
89
|
|
|
2031
|
|
82
|
|
|
92
|
|
|||
5.125% notes
|
611
|
|
|
2050
|
|
574
|
|
|
638
|
|
|||
Euro Senior notes:
|
|
|
|
|
|
|
|
||||||
1.625% notes
|
778
|
|
|
2025
|
|
771
|
|
|
759
|
|
|||
Floating rate senior notes
|
555
|
|
|
2020
|
|
553
|
|
|
544
|
|
|||
Floating rate senior notes
|
798
|
|
|
2049-2066
|
|
790
|
|
|
600
|
|
|||
Capital lease obligations
|
466
|
|
|
2016-3005
|
|
466
|
|
|
475
|
|
|||
Facility notes and bonds
|
320
|
|
|
2016-2045
|
|
319
|
|
|
319
|
|
|||
Other debt
|
32
|
|
|
2016-2022
|
|
33
|
|
|
22
|
|
|||
Total Debt
|
14,100
|
|
|
|
|
14,366
|
|
|
14,334
|
|
|||
Less: Current Maturities
|
|
|
|
|
(2,816
|
)
|
|
(3,018
|
)
|
||||
Long-term Debt
|
|
|
|
|
$
|
11,550
|
|
|
$
|
11,316
|
|
|
2016
|
|
2015
|
||||||||||
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
||||||
Class A Common Stock
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
194
|
|
|
2
|
|
|
201
|
|
|
$
|
2
|
|
|
Common stock purchases
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||
Stock award plans
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||
Common stock issuances
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||
Conversions of class A to class B common stock
|
(8
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||
Class A shares issued at end of period
|
189
|
|
|
2
|
|
|
199
|
|
|
$
|
2
|
|
|
Class B Common Stock
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
693
|
|
|
$
|
7
|
|
|
705
|
|
|
$
|
7
|
|
Common stock purchases
|
(10
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
||
Conversions of class A to class B common stock
|
8
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||
Class B shares issued at end of period
|
691
|
|
|
7
|
|
|
698
|
|
|
$
|
7
|
|
|
Additional Paid-In Capital
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
||
Stock award plans
|
|
|
289
|
|
|
|
|
265
|
|
||||
Common stock purchases
|
|
|
(561
|
)
|
|
|
|
(392
|
)
|
||||
Common stock issuances
|
|
|
168
|
|
|
|
|
173
|
|
||||
Option premiums received (paid)
|
|
|
104
|
|
|
|
|
(46
|
)
|
||||
Balance at end of period
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
||
Retained Earnings
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
$
|
6,001
|
|
|
|
|
$
|
5,726
|
|
||
Net income attributable to common shareowners
|
|
|
2,400
|
|
|
|
|
2,256
|
|
||||
Dividends ($1.56 and $1.46 per share)
|
|
|
(1,409
|
)
|
|
|
|
(1,348
|
)
|
||||
Common stock purchases
|
|
|
(769
|
)
|
|
|
|
(966
|
)
|
||||
Balance at end of period
|
|
|
$
|
6,223
|
|
|
|
|
$
|
5,668
|
|
|
2016
|
|
2015
|
||||
Foreign currency translation gain (loss):
|
|
|
|
||||
Balance at beginning of period
|
$
|
(897
|
)
|
|
$
|
(457
|
)
|
Translation adjustment (no tax impact in either period)
|
(5
|
)
|
|
(203
|
)
|
||
Balance at end of period
|
(902
|
)
|
|
(660
|
)
|
||
Unrealized gain (loss) on marketable securities, net of tax:
|
|
|
|
||||
Balance at beginning of period
|
(1
|
)
|
|
—
|
|
||
Current period changes in fair value (net of tax effect of $4 and $0)
|
5
|
|
|
1
|
|
||
Reclassification to earnings (no tax impact in either period)
|
—
|
|
|
—
|
|
||
Balance at end of period
|
4
|
|
|
1
|
|
||
Unrealized gain (loss) on cash flow hedges, net of tax:
|
|
|
|
||||
Balance at beginning of period
|
67
|
|
|
61
|
|
||
Current period changes in fair value (net of tax effect of $(5) and $56)
|
(7
|
)
|
|
91
|
|
||
Reclassification to earnings (net of tax effect of $(67) and $(45))
|
(112
|
)
|
|
(74
|
)
|
||
Balance at end of period
|
(52
|
)
|
|
78
|
|
||
Unrecognized pension and postretirement benefit costs, net of tax:
|
|
|
|
||||
Balance at beginning of period
|
(2,709
|
)
|
|
(3,198
|
)
|
||
Reclassification to earnings (net of tax effect of $33 and $35)
|
53
|
|
|
52
|
|
||
Balance at end of period
|
(2,656
|
)
|
|
(3,146
|
)
|
||
Accumulated other comprehensive income (loss) at end of period
|
$
|
(3,606
|
)
|
|
$
|
(3,727
|
)
|
Three Months Ended June 30:
|
|
|
|
|
|
||||
|
Amount Reclassified from AOCI
|
|
Affected Line Item in the Income Statement
|
||||||
|
2016
|
|
2015
|
|
|||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
||||
Interest rate contracts
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
|
Interest expense
|
Foreign exchange contracts
|
—
|
|
|
11
|
|
|
Interest expense
|
||
Foreign exchange contracts
|
85
|
|
|
77
|
|
|
Revenue
|
||
Income tax (expense) benefit
|
(29
|
)
|
|
(31
|
)
|
|
Income tax expense
|
||
Impact on net income
|
50
|
|
|
51
|
|
|
Net income
|
||
Unrecognized pension and postretirement benefit costs:
|
|
|
|
|
|
||||
Prior service costs
|
(43
|
)
|
|
(44
|
)
|
|
Compensation and benefits
|
||
Income tax (expense) benefit
|
16
|
|
|
18
|
|
|
Income tax expense
|
||
Impact on net income
|
(27
|
)
|
|
(26
|
)
|
|
Net income
|
||
Total amount reclassified for the period
|
$
|
23
|
|
|
$
|
25
|
|
|
Net income
|
Six Months Ended June 30:
|
|
|
|
|
|
||||
|
Amount Reclassified from AOCI
|
|
Affected Line Item in the Income Statement
|
||||||
|
2016
|
|
2015
|
|
|||||
Unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
||||
Interest rate contracts
|
(12
|
)
|
|
(12
|
)
|
|
Interest expense
|
||
Foreign exchange contracts
|
—
|
|
|
(25
|
)
|
|
Interest expense
|
||
Foreign exchange contracts
|
191
|
|
|
156
|
|
|
Revenue
|
||
Income tax (expense) benefit
|
(67
|
)
|
|
(45
|
)
|
|
Income tax expense
|
||
Impact on net income
|
112
|
|
|
74
|
|
|
Net income
|
||
Unrecognized pension and postretirement benefit costs:
|
|
|
|
|
|
||||
Prior service costs
|
(86
|
)
|
|
(87
|
)
|
|
Compensation and benefits
|
||
Income tax (expense) benefit
|
33
|
|
|
35
|
|
|
Income tax expense
|
||
Impact on net income
|
(53
|
)
|
|
(52
|
)
|
|
Net income
|
||
Total amount reclassified for the period
|
$
|
59
|
|
|
$
|
22
|
|
|
Net income
|
|
2016
|
|
2015
|
||||||||||
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|||||||
Deferred Compensation Obligations:
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
|
$
|
51
|
|
|
|
|
$
|
59
|
|
||
Reinvested dividends
|
|
|
1
|
|
|
|
|
2
|
|
||||
Benefit payments
|
|
|
(8
|
)
|
|
|
|
(11
|
)
|
||||
Balance at end of period
|
|
|
$
|
44
|
|
|
|
|
$
|
50
|
|
||
Treasury Stock:
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
(1
|
)
|
|
$
|
(51
|
)
|
|
(1
|
)
|
|
$
|
(59
|
)
|
Reinvested dividends
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
||
Benefit payments
|
—
|
|
|
8
|
|
|
—
|
|
|
11
|
|
||
Balance at end of period
|
(1
|
)
|
|
$
|
(44
|
)
|
|
(1
|
)
|
|
$
|
(50
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
U.S. Domestic Package
|
$
|
9,015
|
|
|
$
|
8,808
|
|
|
$
|
18,099
|
|
|
$
|
17,622
|
|
International Package
|
3,077
|
|
|
3,045
|
|
|
5,991
|
|
|
6,015
|
|
||||
Supply Chain & Freight
|
2,537
|
|
|
2,242
|
|
|
4,957
|
|
|
4,435
|
|
||||
Consolidated
|
$
|
14,629
|
|
|
$
|
14,095
|
|
|
$
|
29,047
|
|
|
$
|
28,072
|
|
Operating Profit:
|
|
|
|
|
|
|
|
||||||||
U.S. Domestic Package
|
$
|
1,233
|
|
|
$
|
1,201
|
|
|
$
|
2,335
|
|
|
$
|
2,225
|
|
International Package
|
613
|
|
|
552
|
|
|
1,187
|
|
|
1,050
|
|
||||
Supply Chain & Freight
|
192
|
|
|
207
|
|
|
339
|
|
|
358
|
|
||||
Consolidated
|
$
|
2,038
|
|
|
$
|
1,960
|
|
|
$
|
3,861
|
|
|
$
|
3,633
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareowners
|
$
|
1,269
|
|
|
$
|
1,230
|
|
|
$
|
2,400
|
|
|
$
|
2,256
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares
|
881
|
|
|
899
|
|
|
883
|
|
|
901
|
|
||||
Deferred compensation obligations
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Vested portion of restricted units
|
4
|
|
|
1
|
|
|
3
|
|
|
1
|
|
||||
Denominator for basic earnings per share
|
886
|
|
|
901
|
|
|
887
|
|
|
903
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Restricted units
|
3
|
|
|
6
|
|
|
4
|
|
|
7
|
|
||||
Stock options
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Denominator for diluted earnings per share
|
890
|
|
|
908
|
|
|
892
|
|
|
911
|
|
||||
Basic earnings per share
|
$
|
1.43
|
|
|
$
|
1.37
|
|
|
$
|
2.71
|
|
|
$
|
2.50
|
|
Diluted earnings per share
|
$
|
1.43
|
|
|
$
|
1.35
|
|
|
$
|
2.69
|
|
|
$
|
2.48
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Currency hedges:
|
|
|
|
|
|
||
British Pound Sterling
|
GBP
|
983
|
|
|
GBP
|
1,140
|
|
Canadian Dollar
|
CAD
|
919
|
|
|
CAD
|
177
|
|
Euro
|
EUR
|
3,492
|
|
|
EUR
|
3,750
|
|
Indian Rupee
|
INR
|
284
|
|
|
INR
|
—
|
|
Mexican Peso
|
MXN
|
117
|
|
|
MXN
|
3,863
|
|
Japanese Yen
|
JPY
|
8,200
|
|
|
JPY
|
20,000
|
|
|
|
|
|
|
|
||
Interest rate hedges:
|
|
|
|
|
|
||
Fixed to Floating Interest Rate Swaps
|
$
|
5,799
|
|
|
$
|
5,799
|
|
Floating to Fixed Interest Rate Swaps
|
$
|
778
|
|
|
$
|
778
|
|
|
|
|
|
|
|
||
Investment market price hedges:
|
|
|
|
|
|
||
Marketable Securities
|
EUR
|
465
|
|
|
EUR
|
496
|
|
|
|
|
Fair Value Hierarchy Level
|
|
Gross Amounts Presented in
Consolidated Balance Sheets
|
|
Net Amounts if Right of
Offset had been Applied
|
||||||||||||
Asset Derivatives
|
Balance Sheet Location
|
|
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
|||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
Level 2
|
|
$
|
245
|
|
|
$
|
408
|
|
|
$
|
244
|
|
|
$
|
408
|
|
Foreign exchange contracts
|
Other non-current assets
|
|
Level 2
|
|
71
|
|
|
92
|
|
|
66
|
|
|
92
|
|
||||
Interest rate contracts
|
Other non-current assets
|
|
Level 2
|
|
312
|
|
|
204
|
|
|
297
|
|
|
185
|
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
Level 2
|
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Investment market price contracts
|
Other current assets
|
|
Level 2
|
|
181
|
|
|
5
|
|
|
181
|
|
|
—
|
|
||||
Interest rate contracts
|
Other non-current assets
|
|
Level 2
|
|
78
|
|
|
57
|
|
|
68
|
|
|
53
|
|
||||
Total Asset Derivatives
|
|
|
|
|
$
|
888
|
|
|
$
|
768
|
|
|
$
|
856
|
|
|
$
|
738
|
|
|
|
|
Fair Value Hierarchy Level
|
|
Gross Amounts Presented in
Consolidated Balance Sheets
|
|
Net Amounts if Right of
Offset had been Applied
|
||||||||||||
Liability Derivatives
|
Balance Sheet Location
|
|
|
June 30,
2016 |
|
December 31,
2015 |
|
June 30,
2016 |
|
December 31,
2015 |
|||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current liabilities
|
|
Level 2
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
Other non-current liabilities
|
|
Level 2
|
|
13
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Interest rate contracts
|
Other non-current liabilities
|
|
Level 2
|
|
15
|
|
|
19
|
|
|
—
|
|
|
—
|
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current liabilities
|
|
Level 2
|
|
15
|
|
|
12
|
|
|
14
|
|
|
10
|
|
||||
Investment market price contracts
|
Other current liabilities
|
|
Level 2
|
|
—
|
|
|
9
|
|
|
—
|
|
|
4
|
|
||||
Interest rate contracts
|
Other non-current liabilities
|
|
Level 2
|
|
38
|
|
|
13
|
|
|
28
|
|
|
9
|
|
||||
Total Liability Derivatives
|
|
|
|
|
$
|
85
|
|
|
$
|
53
|
|
|
$
|
53
|
|
|
$
|
23
|
|
Three Months Ended June 30:
|
|
|
|
|
||||
Non-derivative Instruments in Net Investment Hedging Relationships
|
|
Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion)
|
||||||
|
2016
|
|
2015
|
|||||
Foreign denominated debt
|
|
$
|
62
|
|
|
$
|
—
|
|
Total
|
|
$
|
62
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Six Months Ended June 30:
|
|
|
|
|
||||
Non-derivative Instruments in Net Investment Hedging Relationships
|
|
Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion)
|
||||||
|
2016
|
|
2015
|
|||||
Foreign denominated debt
|
|
$
|
(23
|
)
|
|
—
|
|
|
Total
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
Derivative Instruments
in Fair Value
Hedging Relationships
|
Location of Gain (Loss) Recognized in Income
|
|
Derivative Amount of Gain (Loss) Recognized in Income
|
|
Hedged Items in
Fair Value
Hedging
Relationships
|
|
Location of
Gain (Loss)
Recognized In
Income
|
|
Hedged Items Amount of Gain (Loss)
Recognized in Income
|
||||||||||||
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
||||||||||||
Three Months Ended June 30:
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate contracts
|
Interest Expense
|
|
$
|
20
|
|
|
$
|
(64
|
)
|
|
Fixed-Rate
Debt
|
|
Interest
Expense
|
|
$
|
(20
|
)
|
|
$
|
64
|
|
Six Months Ended June 30:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Interest rate contracts
|
Interest
Expense
|
|
$
|
115
|
|
|
$
|
(9
|
)
|
|
Fixed-Rate
Debt and
Capital Leases
|
|
Interest
Expense
|
|
$
|
(115
|
)
|
|
$
|
9
|
|
Derivative Instruments Not Designated in
Hedging Relationships
|
Location of Gain (Loss)
Recognized in Income
|
|
Amount of Gain (Loss)
Recognized in Income
|
||||||
|
2016
|
|
2015
|
||||||
Three Months Ended June 30:
|
|
|
|
|
|
||||
Interest rate contracts
|
Interest expense
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Foreign exchange contracts
|
Other Operating Expenses
|
|
—
|
|
|
(5
|
)
|
||
Foreign exchange contracts
|
Investment income and other
|
|
(65
|
)
|
|
33
|
|
||
Foreign exchange contracts
|
Interest expense
|
|
—
|
|
|
36
|
|
||
Investment market price contracts
|
Investment income and other
|
|
25
|
|
|
(7
|
)
|
||
|
|
|
$
|
(42
|
)
|
|
$
|
55
|
|
Six Months Ended June 30:
|
|
|
|
|
|
||||
Interest rate contracts
|
Interest expense
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
Foreign exchange contracts
|
Other Operating Expenses
|
|
—
|
|
|
16
|
|
||
Foreign exchange contracts
|
Investment income and other
|
|
(106
|
)
|
|
35
|
|
||
Foreign exchange contracts
|
Interest expense
|
|
—
|
|
|
36
|
|
||
Investment market price contracts
|
Investment income and other
|
|
180
|
|
|
(9
|
)
|
||
|
|
|
$
|
70
|
|
|
$
|
75
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||
|
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
||||||||||
Revenue (in millions)
|
$
|
14,629
|
|
|
$
|
14,095
|
|
|
3.8
|
%
|
|
$
|
29,047
|
|
|
$
|
28,072
|
|
|
3.5
|
%
|
Operating Expenses (in millions)
|
12,591
|
|
|
12,135
|
|
|
3.8
|
%
|
|
25,186
|
|
|
24,439
|
|
|
3.1
|
%
|
||||
Operating Profit (in millions)
|
$
|
2,038
|
|
|
$
|
1,960
|
|
|
4.0
|
%
|
|
$
|
3,861
|
|
|
$
|
3,633
|
|
|
6.3
|
%
|
Operating Margin
|
13.9
|
%
|
|
13.9
|
%
|
|
|
|
13.3
|
%
|
|
12.9
|
%
|
|
|
||||||
Average Daily Package Volume (in thousands)
|
17,687
|
|
|
17,210
|
|
|
2.8
|
%
|
|
17,761
|
|
|
17,338
|
|
|
2.4
|
%
|
||||
Average Revenue Per Piece
|
$
|
10.57
|
|
|
$
|
10.61
|
|
|
(0.4
|
)%
|
|
$
|
10.48
|
|
|
$
|
10.59
|
|
|
(1.0
|
)%
|
Net Income (in millions)
|
$
|
1,269
|
|
|
$
|
1,230
|
|
|
3.2
|
%
|
|
$
|
2,400
|
|
|
$
|
2,256
|
|
|
6.4
|
%
|
Basic Earnings Per Share
|
$
|
1.43
|
|
|
$
|
1.37
|
|
|
4.4
|
%
|
|
$
|
2.71
|
|
|
$
|
2.50
|
|
|
8.4
|
%
|
Diluted Earnings Per Share
|
$
|
1.43
|
|
|
$
|
1.35
|
|
|
5.9
|
%
|
|
$
|
2.69
|
|
|
$
|
2.48
|
|
|
8.5
|
%
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
|||||||||||
Average Daily Package Volume (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Next Day Air
|
1,311
|
|
|
1,241
|
|
|
5.6
|
%
|
|
1,289
|
|
|
1,235
|
|
|
4.4
|
%
|
||||
Deferred
|
1,129
|
|
|
1,132
|
|
|
(0.3
|
)%
|
|
1,163
|
|
|
1,175
|
|
|
(1.0
|
)%
|
||||
Ground
|
12,489
|
|
|
12,192
|
|
|
2.4
|
%
|
|
12,606
|
|
|
12,255
|
|
|
2.9
|
%
|
||||
Total Avg. Daily Package Volume
|
14,929
|
|
|
14,565
|
|
|
2.5
|
%
|
|
15,058
|
|
|
14,665
|
|
|
2.7
|
%
|
||||
Average Revenue Per Piece:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Next Day Air
|
$
|
19.51
|
|
|
$
|
20.03
|
|
|
(2.6
|
)%
|
|
$
|
19.47
|
|
|
$
|
20.07
|
|
|
(3.0
|
)%
|
Deferred
|
12.44
|
|
|
12.12
|
|
|
2.6
|
%
|
|
12.19
|
|
|
11.89
|
|
|
2.5
|
%
|
||||
Ground
|
8.11
|
|
|
8.12
|
|
|
(0.1
|
)%
|
|
8.10
|
|
|
8.16
|
|
|
(0.7
|
)%
|
||||
Total Avg. Revenue Per Piece
|
$
|
9.44
|
|
|
$
|
9.45
|
|
|
(0.1
|
)%
|
|
$
|
9.39
|
|
|
$
|
9.46
|
|
|
(0.7
|
)%
|
Operating Days in Period
|
64
|
|
|
64
|
|
|
|
|
128
|
|
|
127
|
|
|
|
||||||
Revenue (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Next Day Air
|
$
|
1,637
|
|
|
$
|
1,591
|
|
|
2.9
|
%
|
|
$
|
3,212
|
|
|
$
|
3,148
|
|
|
2.0
|
%
|
Deferred
|
899
|
|
|
878
|
|
|
2.4
|
%
|
|
1,814
|
|
|
1,774
|
|
|
2.3
|
%
|
||||
Ground
|
6,479
|
|
|
6,339
|
|
|
2.2
|
%
|
|
13,073
|
|
|
12,700
|
|
|
2.9
|
%
|
||||
Total Revenue
|
$
|
9,015
|
|
|
$
|
8,808
|
|
|
2.4
|
%
|
|
$
|
18,099
|
|
|
$
|
17,622
|
|
|
2.7
|
%
|
Operating Expenses (in millions)
|
$
|
7,782
|
|
|
$
|
7,607
|
|
|
2.3
|
%
|
|
$
|
15,764
|
|
|
$
|
15,397
|
|
|
2.4
|
%
|
Operating Profit (in millions)
|
$
|
1,233
|
|
|
$
|
1,201
|
|
|
2.7
|
%
|
|
$
|
2,335
|
|
|
$
|
2,225
|
|
|
4.9
|
%
|
Operating Margin
|
13.7
|
%
|
|
13.6
|
%
|
|
|
|
12.9
|
%
|
|
12.6
|
%
|
|
|
|
Volume
|
|
Rates /
Product Mix
|
|
Fuel
Surcharge
|
|
Total Revenue
Change
|
||||
Net Revenue Change Drivers:
|
|
|
|
|
|
|
|
||||
Second quarter 2016 vs. 2015
|
2.5
|
%
|
|
1.0
|
%
|
|
(1.1
|
)%
|
|
2.4
|
%
|
Year-to-date 2016 vs. 2015
|
3.5
|
%
|
|
0.3
|
%
|
|
(1.1
|
)%
|
|
2.7
|
%
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||
|
2016
|
|
2015
|
|
% Point
|
|
2016
|
|
2015
|
|
% Point
|
||||||
Next Day Air / Deferred
|
2.8
|
%
|
|
4.5
|
%
|
|
(1.7
|
)%
|
|
3.0
|
%
|
|
4.9
|
%
|
|
(1.9
|
)%
|
Ground
|
4.4
|
%
|
|
5.3
|
%
|
|
(0.9
|
)%
|
|
4.7
|
%
|
|
5.8
|
%
|
|
(1.1
|
)%
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||||
|
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
||||||||||||
Average Daily Package Volume (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domestic
|
1,599
|
|
|
1,530
|
|
|
4.5
|
%
|
|
1,558
|
|
|
1,553
|
|
|
0.3
|
%
|
||||||
Export
|
1,159
|
|
|
1,115
|
|
|
3.9
|
%
|
|
1,145
|
|
|
1,120
|
|
|
2.2
|
%
|
||||||
Total Avg. Daily Package Volume
|
2,758
|
|
|
2,645
|
|
|
4.3
|
%
|
|
2,703
|
|
|
2,673
|
|
|
1.1
|
%
|
||||||
Average Revenue Per Piece:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domestic
|
$
|
6.07
|
|
|
$
|
6.13
|
|
|
(1.0
|
)%
|
|
$
|
5.99
|
|
|
$
|
6.11
|
|
|
(2.0
|
)%
|
||
Export
|
31.36
|
|
|
31.99
|
|
|
(2.0
|
)%
|
|
30.90
|
|
|
31.52
|
|
|
(2.0
|
)%
|
||||||
Total Avg. Revenue Per Piece
|
$
|
16.70
|
|
|
$
|
17.03
|
|
|
(1.9
|
)%
|
|
$
|
16.54
|
|
|
$
|
16.76
|
|
|
(1.3
|
)%
|
||
Operating Days in Period
|
64
|
|
|
64
|
|
|
|
|
128
|
|
|
127
|
|
|
|
||||||||
Revenue (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domestic
|
$
|
621
|
|
|
$
|
600
|
|
|
3.5
|
%
|
|
$
|
1,195
|
|
|
$
|
1,205
|
|
|
(0.8
|
)%
|
||
Export
|
2,326
|
|
|
2,283
|
|
|
1.9
|
%
|
|
4,529
|
|
|
4,483
|
|
|
1.0
|
%
|
||||||
Cargo and Other
|
130
|
|
|
162
|
|
|
(19.8
|
)%
|
|
267
|
|
|
327
|
|
|
(18.3
|
)%
|
||||||
Total Revenue
|
$
|
3,077
|
|
|
$
|
3,045
|
|
|
1.1
|
%
|
|
$
|
5,991
|
|
|
$
|
6,015
|
|
|
(0.4
|
)%
|
||
Operating Expenses (in millions)
|
$
|
2,464
|
|
|
$
|
2,493
|
|
|
(1.2
|
)%
|
|
$
|
4,804
|
|
|
$
|
4,965
|
|
|
(3.2
|
)%
|
||
Operating Profit (in millions)
|
$
|
613
|
|
|
$
|
552
|
|
|
11.1
|
%
|
|
$
|
1,187
|
|
|
$
|
1,050
|
|
|
13.0
|
%
|
||
Operating Margin
|
19.9
|
%
|
|
18.1
|
%
|
|
|
|
19.8
|
%
|
|
17.5
|
%
|
|
|
||||||||
Currency Benefit / (Cost) – (in millions)*:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Revenue
|
|
|
|
|
$
|
(15
|
)
|
|
|
|
|
|
$
|
(74
|
)
|
||||||||
Operating Expenses
|
|
|
|
|
17
|
|
|
|
|
|
|
74
|
|
||||||||||
Operating Profit
|
|
|
|
|
$
|
2
|
|
|
|
|
|
|
$
|
—
|
|
||||||||
* Net of currency hedging; amount represents the change in currency translation compared to the prior year.
|
|
|
|
|
|
|
|
Volume
|
|
Rates /
Product Mix
|
|
Fuel
Surcharge
|
|
Currency
|
|
Total Revenue
Change
|
|||||
Net Revenue Change Drivers:
|
|
|
|
|
|
|
|
|
|
|||||
Second quarter 2016 vs. 2015
|
4.3
|
%
|
|
(1.1
|
)%
|
|
(1.7
|
)%
|
|
(0.4
|
)%
|
|
1.1
|
%
|
Year-to-date 2016 vs. 2015
|
1.9
|
%
|
|
0.7
|
%
|
|
(1.8
|
)%
|
|
(1.2
|
)%
|
|
(0.4
|
)%
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||||
|
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
||||||||||||
Freight LTL Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue (in millions)
|
$
|
600
|
|
|
$
|
647
|
|
|
(7.3
|
)%
|
|
$
|
1,164
|
|
|
$
|
1,256
|
|
|
(7.3
|
)%
|
||
Revenue Per Hundredweight
|
$
|
23.47
|
|
|
$
|
22.81
|
|
|
2.9
|
%
|
|
$
|
23.36
|
|
|
$
|
22.79
|
|
|
2.5
|
%
|
||
Shipments (in thousands)
|
2,540
|
|
|
2,728
|
|
|
(6.9
|
)%
|
|
4,956
|
|
|
5,302
|
|
|
(6.5
|
)%
|
||||||
Shipments Per Day (in thousands)
|
39.7
|
|
|
42.6
|
|
|
(6.9
|
)%
|
|
38.7
|
|
|
41.7
|
|
|
(7.2
|
)%
|
||||||
Gross Weight Hauled (in millions of lbs)
|
2,556
|
|
|
2,836
|
|
|
(9.9
|
)%
|
|
4,982
|
|
|
5,512
|
|
|
(9.6
|
)%
|
||||||
Weight Per Shipment (in lbs)
|
1,006
|
|
|
1,040
|
|
|
(3.3
|
)%
|
|
1,005
|
|
|
1,040
|
|
|
(3.4
|
)%
|
||||||
Operating Days in Period
|
64
|
|
|
64
|
|
|
|
|
128
|
|
|
127
|
|
|
|
||||||||
Revenue (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Forwarding and Logistics
|
$
|
1,659
|
|
|
$
|
1,319
|
|
|
25.8
|
%
|
|
$
|
3,245
|
|
|
$
|
2,649
|
|
|
22.5
|
%
|
||
Freight
|
693
|
|
|
752
|
|
|
(7.8
|
)%
|
|
1,349
|
|
|
1,462
|
|
|
(7.7
|
)%
|
||||||
Other
|
185
|
|
|
171
|
|
|
8.2
|
%
|
|
363
|
|
|
324
|
|
|
12.0
|
%
|
||||||
Total Revenue
|
$
|
2,537
|
|
|
$
|
2,242
|
|
|
13.2
|
%
|
|
$
|
4,957
|
|
|
$
|
4,435
|
|
|
11.8
|
%
|
||
Operating Expenses (in millions):
|
$
|
2,345
|
|
|
$
|
2,035
|
|
|
15.2
|
%
|
|
$
|
4,618
|
|
|
$
|
4,077
|
|
|
13.3
|
%
|
||
Operating Profit (in millions):
|
$
|
192
|
|
|
$
|
207
|
|
|
(7.2
|
)%
|
|
$
|
339
|
|
|
$
|
358
|
|
|
(5.3
|
)%
|
||
Operating Margin
|
7.6
|
%
|
|
9.2
|
%
|
|
|
|
6.8
|
%
|
|
8.1
|
%
|
|
|
||||||||
Currency Benefit / (Cost) – (in millions)*:
|
|
|
|
$
|
|
|
|
|
|
$
|
|||||||||||||
Revenue
|
|
|
|
|
$
|
(9
|
)
|
|
|
|
|
|
$
|
(32
|
)
|
||||||||
Operating Expenses
|
|
|
|
|
12
|
|
|
|
|
|
|
38
|
|
||||||||||
Operating Profit
|
|
|
|
|
$
|
3
|
|
|
|
|
|
|
$
|
6
|
|
||||||||
* Amount represents the change in currency translation compared to the prior year.
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||||
|
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
||||||||||||
Operating Expenses (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Compensation and Benefits
|
$
|
7,738
|
|
|
$
|
7,502
|
|
|
3.1
|
%
|
|
$
|
15,591
|
|
|
$
|
15,066
|
|
|
3.5
|
%
|
||
Repairs and Maintenance
|
383
|
|
|
357
|
|
|
7.3
|
%
|
|
764
|
|
|
707
|
|
|
8.1
|
%
|
||||||
Depreciation and Amortization
|
555
|
|
|
510
|
|
|
8.8
|
%
|
|
1,107
|
|
|
1,016
|
|
|
9.0
|
%
|
||||||
Purchased Transportation
|
2,070
|
|
|
1,777
|
|
|
16.5
|
%
|
|
4,094
|
|
|
3,631
|
|
|
12.8
|
%
|
||||||
Fuel
|
505
|
|
|
639
|
|
|
(21.0
|
)%
|
|
939
|
|
|
1,283
|
|
|
(26.8
|
)%
|
||||||
Other Occupancy
|
245
|
|
|
230
|
|
|
6.5
|
%
|
|
514
|
|
|
524
|
|
|
(1.9
|
)%
|
||||||
Other Expenses
|
1,095
|
|
|
1,120
|
|
|
(2.2
|
)%
|
|
2,177
|
|
|
2,212
|
|
|
(1.6
|
)%
|
||||||
Total Operating Expenses
|
$
|
12,591
|
|
|
$
|
12,135
|
|
|
3.8
|
%
|
|
$
|
25,186
|
|
|
$
|
24,439
|
|
|
3.1
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency (Benefit) / Cost - (in millions)*
|
|
|
|
|
$
|
(29
|
)
|
|
|
|
|
|
$
|
(112
|
)
|
||||||||
* Amount represents the change in currency translation compared to the prior year.
|
|
|
|
|
|
|
•
|
Health and welfare costs increased $80 million for the second quarter ($175 million year-to-date), largely due to increased contributions to multiemployer plans resulting from contractual contribution rate increases, an overall increase in the size of the workforce and one additional operating day year-to-date.
|
•
|
Pension expense increased $20 million for the second quarter ($43 million year-to-date), primarily due to additional expense for multiemployer pension plans, which were impacted by contractual contribution rate increases and one additional operating day year-to-date.
|
•
|
Vacation, holiday and excused absence expense increased $20 million for the second quarter ($39 million year-to-date), due to salary increases, growth in the overall size of the workforce and one additional operating day year-to-date.
|
•
|
Workers' compensation expense decreased $2 million in the second quarter ($28 million year-to-date). Insurance reserves are established for estimates of the loss that we will ultimately incur on reported workers' compensation claims, as well as estimates of claims that have been incurred but not reported, and take into account a number of factors including our history of claim losses, payroll growth and the impact of safety improvement initiatives. In 2016, we have experienced more favorable actuarial adjustments compared with 2015, resulting in decreased expense.
|
•
|
Expense for our forwarding and logistics business increased $300 million in the second quarter ($515 million year-to-date), due to the acquisition of Coyote and increased volume and rates for mail services; these items were partially offset by the impact of decreased volume and tonnage in our international and North American air freight and ocean businesses and the impact of currency exchange rate movements.
|
•
|
Expense for our International Package segment increased $17 million in the second quarter ($27 million year-to-date), primarily due to the increased usage of third party carriers; these items were partially offset by the impact of currency exchange rate movements as well as lower fuel surcharges passed to us from outside transportation providers.
|
•
|
Expense for our U.S. Domestic Package segment decreased $9 million for the second quarter ($34 million year-to-date), primarily due to lower fuel surcharges passed to us from rail carriers and outside contract carriers.
|
•
|
Expense for our UPS Freight business decreased $15 million in the second quarter ($42 million year-to-date), due to a decrease in LTL shipments and lower fuel surcharges passed to us from outside transportation providers.
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||
|
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment income and other
|
$
|
8
|
|
|
$
|
4
|
|
|
100.0
|
%
|
|
$
|
25
|
|
|
$
|
8
|
|
|
NA
|
|
Interest expense
|
$
|
(94
|
)
|
|
$
|
(86
|
)
|
|
9.3
|
%
|
|
$
|
(187
|
)
|
|
$
|
(173
|
)
|
|
8.1
|
%
|
|
Three Months Ended
June 30, |
|
Change
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||||||
|
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income Tax Expense
|
$
|
683
|
|
|
$
|
648
|
|
|
5.4
|
%
|
|
$
|
1,299
|
|
|
$
|
1,212
|
|
|
7.2
|
%
|
Effective Tax Rate
|
35.0
|
%
|
|
34.5
|
%
|
|
|
|
35.1
|
%
|
|
34.9
|
%
|
|
|
|
Six Months Ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
Net income
|
$
|
2,400
|
|
|
$
|
2,256
|
|
Non-cash operating activities (a)
|
1,829
|
|
|
1,670
|
|
||
Pension and postretirement benefit contributions (UPS-sponsored plans)
|
(89
|
)
|
|
(99
|
)
|
||
Hedge margin receivables and payables
|
136
|
|
|
202
|
|
||
Income tax receivables and payables
|
45
|
|
|
115
|
|
||
Changes in working capital and other non-current assets and liabilities
|
364
|
|
|
141
|
|
||
Other operating activities
|
8
|
|
|
(46
|
)
|
||
Net cash from operating activities
|
$
|
4,693
|
|
|
$
|
4,239
|
|
(a)
|
Represents depreciation and amortization, gains and losses on derivative transactions and foreign exchange, deferred income taxes, provisions for uncollectible accounts, pension and postretirement benefit expense, stock compensation expense, and other non-cash items.
|
|
Six Months Ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
Net cash used in investing activities
|
$
|
(1,794
|
)
|
|
$
|
(2,776
|
)
|
|
|
|
|
||||
Capital Expenditures:
|
|
|
|
||||
Buildings and facilities
|
$
|
(473
|
)
|
|
$
|
(387
|
)
|
Aircraft and parts
|
(14
|
)
|
|
(12
|
)
|
||
Vehicles
|
(282
|
)
|
|
(341
|
)
|
||
Information technology
|
(194
|
)
|
|
(218
|
)
|
||
|
$
|
(963
|
)
|
|
$
|
(958
|
)
|
|
|
|
|
||||
Capital Expenditures as a % of Revenue
|
(3.3
|
)%
|
|
(3.4
|
)%
|
||
|
|
|
|
||||
Other Investing Activities:
|
|
|
|
||||
Proceeds from disposals of property, plant and equipment
|
$
|
11
|
|
|
$
|
8
|
|
Net (increase) decrease in finance receivables
|
$
|
(13
|
)
|
|
$
|
(13
|
)
|
Net (purchases), sales and maturities of marketable securities
|
$
|
(791
|
)
|
|
$
|
(1,713
|
)
|
Cash paid for business acquisitions, net of cash and cash equivalents acquired
|
$
|
(3
|
)
|
|
$
|
(90
|
)
|
Other investing activities
|
$
|
(35
|
)
|
|
$
|
(10
|
)
|
|
Six Months Ended
June 30, |
||||||
2016
|
|
2015
|
|||||
Net cash used in financing activities
|
$
|
(2,584
|
)
|
|
$
|
(252
|
)
|
Share Repurchases:
|
|
|
|
||||
Cash expended for shares repurchased
|
$
|
(1,329
|
)
|
|
$
|
(1,348
|
)
|
Number of shares repurchased
|
13.3
|
|
|
13.5
|
|
||
Shares outstanding at period end
|
879
|
|
|
896
|
|
||
Percent reduction in shares outstanding
|
(0.8
|
)%
|
|
(1.0
|
)%
|
||
Dividends:
|
|
|
|
||||
Dividends declared per share
|
$
|
1.56
|
|
|
$
|
1.46
|
|
Cash expended for dividend payments
|
$
|
(1,327
|
)
|
|
$
|
(1,270
|
)
|
Borrowings:
|
|
|
|
||||
Net borrowings of debt principal
|
$
|
(25
|
)
|
|
$
|
2,403
|
|
Other Financing Activities:
|
|
|
|
||||
Cash received for common stock issuances
|
$
|
147
|
|
|
$
|
140
|
|
Other financing activities
|
$
|
(50
|
)
|
|
$
|
(177
|
)
|
Capitalization (as of March 31 each year):
|
|
|
|
||||
Total debt outstanding at period end
|
$
|
14,366
|
|
|
$
|
13,152
|
|
Total shareowners’ equity at period end
|
2,650
|
|
|
1,968
|
|
||
Total capitalization
|
$
|
17,016
|
|
|
$
|
15,120
|
|
Debt to Total Capitalization %
|
84.4
|
%
|
|
87.0
|
%
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Currency Derivatives
|
$
|
285
|
|
|
$
|
490
|
|
Interest Rate Derivatives
|
337
|
|
|
229
|
|
||
Investment Market Price Derivatives
|
181
|
|
|
(4
|
)
|
||
|
$
|
803
|
|
|
$
|
715
|
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Total Number
of Shares
Purchased(1)
|
|
Average
Price Paid
Per Share
|
|
Total Number
of Shares Purchased
as Part of Publicly
Announced Program
|
|
Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Program
|
||||||
April 1 – April 30, 2016
|
1.8
|
|
|
$
|
105.19
|
|
|
1.5
|
|
|
$
|
604
|
|
May 1 – May 31, 2016
|
3.6
|
|
|
103.50
|
|
|
3.5
|
|
|
7,662
|
|
||
June 1– June 30, 2016
|
1.5
|
|
|
104.55
|
|
|
1.5
|
|
|
7,505
|
|
||
Total April 1 – June 30, 2016
|
6.9
|
|
|
$
|
104.13
|
|
|
6.5
|
|
|
|
(1)
|
Includes shares repurchased through our publicly announced share repurchase programs and shares tendered to pay the exercise price and tax withholding on employee stock options.
|
Item 6.
|
Exhibits
|
|
|
|
|||
3.1
|
|
|
—
|
|
Form of Restated Certificate of Incorporation of United Parcel Service, Inc. (incorporated by reference to Exhibit 3.2 to Form 8-K filed on May 12, 2010).
|
|
|
|
|||
3.2
|
|
|
—
|
|
Amended and Restated Bylaws of United Parcel Service, Inc. as of February 14, 2013 (incorporated by reference to Exhibit 3.1 to Form 8-K, filed on February 19, 2013).
|
|
|
|
|
|
|
4.1
|
|
|
—
|
|
Form of Note for Floating Rate Senior Notes due March 15, 2066 (incorporated by reference to Exhibit 4.1 to Form 8-K filed on April 1, 2016).
|
|
|
|
|
|
|
†10.1
|
|
|
|
|
Amendment No. 1 to UPS Retirement Plan, as Amended and Restated, effective as of June 30, 2016.
|
|
|
|
|
|
|
11
|
|
|
—
|
|
Statement regarding Computation of per Share Earnings (incorporated by reference to Note 13 in “Item 1. Financial Statements” of this quarterly report on Form 10-Q).
|
|
|
|
|||
†12
|
|
|
—
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|||
†31.1
|
|
|
—
|
|
Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|||
†31.2
|
|
|
—
|
|
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|||
†32.1
|
|
|
—
|
|
Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|||
†32.2
|
|
|
—
|
|
Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|||
†101
|
|
|
—
|
|
The following financial information from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Statements of Consolidated Income, (iii) the Statements of Consolidated Comprehensive Income, (iv) the Statements of Consolidated Cash Flows, and (v) the Notes to the Consolidated Financial Statements.
|
†
|
Filed herewith.
|
|
|
UNITED PARCEL SERVICE, INC.
(Registrant)
|
||
|
|
|
||
Date:
|
August 5, 2016
|
By:
|
|
/
S
/ RICHARD N. PERETZ
|
|
|
|
|
Richard N. Peretz
|
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
(Duly Authorized Officer and
Principal Accounting Officer)
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1 Year United Parcel Service Chart |
1 Month United Parcel Service Chart |
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