Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 24, 2016 | |
Entity Registrant Name | UNITED PARCEL SERVICE INC | |
Trading Symbol | UPS | |
Entity Central Index Key | 1,090,727 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 183,295,098 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 689,360,373 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 3,299 | $ 2,730 |
Marketable securities | 2,059 | 1,996 |
Accounts receivable, net | 6,272 | 7,134 |
Other current assets | 1,223 | 1,348 |
Total Current Assets | 12,853 | 13,208 |
Property, Plant and Equipment, Net | 18,489 | 18,352 |
Goodwill | 3,436 | 3,419 |
Intangible Assets, Net | 1,537 | 1,549 |
Non-Current Investments and Restricted Cash | 485 | 473 |
Deferred Income Tax Assets | 456 | 255 |
Other Non-Current Assets | 1,086 | 1,055 |
Total Assets | 38,342 | 38,311 |
Current Liabilities: | ||
Current maturities of long-term debt and commercial paper | 3,820 | 3,018 |
Accounts payable | 2,287 | 2,587 |
Accrued wages and withholdings | 2,270 | 2,253 |
Hedge margin liabilities | 487 | 717 |
Income taxes payable | 164 | 147 |
Self-insurance reserves | 655 | 657 |
Accrued group welfare and retirement plan contributions | 591 | 525 |
Other current liabilities | 615 | 792 |
Total Current Liabilities | 10,889 | 10,696 |
Long-Term Debt | 11,506 | 11,316 |
Pension and Postretirement Benefit Obligations | 10,052 | 10,638 |
Deferred Income Tax Liabilities | 72 | 115 |
Self-Insurance Reserves | 1,794 | 1,831 |
Other Non-Current Liabilities | 1,262 | 1,224 |
Shareowners' Equity: | ||
Additional paid-in capital | 0 | 0 |
Retained earnings | 6,385 | 6,001 |
Accumulated other comprehensive loss | (3,651) | (3,540) |
Deferred compensation obligations | 44 | 51 |
Less: Treasury stock | (44) | (51) |
Total Equity for Controlling Interests | 2,743 | 2,470 |
Total Equity for Non-Controlling Interests | 24 | 21 |
Total Shareowners' Equity | 2,767 | 2,491 |
Total Liabilities and Shareowners' Equity | 38,342 | 38,311 |
Common Class A [Member] | ||
Shareowners' Equity: | ||
Common stock | 2 | 2 |
Total Equity for Controlling Interests | 2 | 2 |
Common Class B [Member] | ||
Shareowners' Equity: | ||
Common stock | 7 | 7 |
Total Equity for Controlling Interests | $ 7 | $ 7 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Treasury stock, shares | 1 | 1 | ||
Class A common stock | ||||
Common stock, shares issued | 185 | 194 | 196 | 201 |
Class B common stock | ||||
Common stock, shares issued | 689 | 693 | 696 | 705 |
STATEMENTS OF CONSOLIDATED INCO
STATEMENTS OF CONSOLIDATED INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenue | $ 14,928 | $ 14,237 | $ 43,975 | $ 42,309 |
Operating Expenses: | ||||
Compensation and benefits | 7,857 | 7,458 | 23,448 | 22,524 |
Repairs and maintenance | 386 | 362 | 1,150 | 1,069 |
Depreciation and amortization | 554 | 527 | 1,661 | 1,543 |
Purchased transportation | 2,212 | 1,926 | 6,306 | 5,557 |
Fuel | 541 | 617 | 1,480 | 1,900 |
Other occupancy | 248 | 241 | 762 | 765 |
Other expenses | 1,096 | 1,122 | 3,273 | 3,334 |
Total Operating Expenses | 12,894 | 12,253 | 38,080 | 36,692 |
Operating Profit | 2,034 | 1,984 | 5,895 | 5,617 |
Other Income and (Expense): | ||||
Investment income | 13 | 4 | 38 | 12 |
Interest expense | (94) | (83) | (281) | (256) |
Total Other Income and (Expense) | (81) | (79) | (243) | (244) |
Income Before Income Taxes | 1,953 | 1,905 | 5,652 | 5,373 |
Income Tax Expense | 683 | 648 | 1,982 | 1,860 |
Net Income | $ 1,270 | $ 1,257 | $ 3,670 | $ 3,513 |
Basic Earnings Per Share | $ 1.44 | $ 1.40 | $ 4.15 | $ 3.90 |
Diluted Earnings Per Share | $ 1.44 | $ 1.39 | $ 4.13 | $ 3.87 |
STATEMENTS OF CONSOLIDATED COMP
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,270 | $ 1,257 | $ 3,670 | $ 3,513 |
Change in foreign currency translation adjustment, net of tax | (7) | (141) | (12) | (344) |
Change in unrealized gain (loss) on marketable securities, net of tax | (1) | 0 | 4 | 1 |
Change in unrealized gain (loss) on cash flow hedges, net of tax | (64) | (11) | (183) | 6 |
Change in unrecognized pension and postretirement benefit costs, net of tax | 27 | 28 | 80 | 80 |
Comprehensive income | $ 1,225 | $ 1,133 | $ 3,559 | $ 3,256 |
STATEMENTS OF CONSOLIDATED CASH
STATEMENTS OF CONSOLIDATED CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows From Operating Activities: | ||
Net income | $ 3,670,000,000 | $ 3,513,000,000 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 1,661,000,000 | 1,543,000,000 |
Pension and postretirement benefit expense | 804,000,000 | 807,000,000 |
Pension and postretirement benefit contributions | (1,298,000,000) | (147,000,000) |
Self-insurance reserves | (38,000,000) | (148,000,000) |
Deferred taxes, credits and other | (150,000,000) | (198,000,000) |
Stock compensation expense | 471,000,000 | 452,000,000 |
Other (gains) losses | (165,000,000) | (79,000,000) |
Change in assets and liabilities, net of effect of acquisitions | ||
Accounts receivable | 782,000,000 | 738,000,000 |
Other current assets | 370,000,000 | 521,000,000 |
Accounts payable | (276,000,000) | (745,000,000) |
Accrued wages and withholdings | 46,000,000 | (5,000,000) |
Other current liabilities | (491,000,000) | 214,000,000 |
Other operating activities | (23,000,000) | (51,000,000) |
Net cash from operating activities | 5,363,000,000 | 6,415,000,000 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (1,837,000,000) | (1,648,000,000) |
Proceeds from disposals of property, plant, and equipment | 76,000,000 | 14,000,000 |
Purchases of marketable securities | (4,250,000,000) | (6,074,000,000) |
Sales and maturities of marketable securities | 4,038,000,000 | 4,821,000,000 |
Net decrease in finance receivables | 4,000,000 | (11,000,000) |
Cash paid for business acquisitions | (3,000,000) | (1,925,000,000) |
Other investing activities | (55,000,000) | (136,000,000) |
Net cash used in investing activities | (2,027,000,000) | (4,959,000,000) |
Cash Flows From Financing Activities: | ||
Net change in short-term debt | (689,000,000) | 3,546,000,000 |
Proceeds from long-term borrowings | 4,018,000,000 | 1,927,000,000 |
Repayments of long-term borrowings | (2,323,000,000) | (1,699,000,000) |
Purchases of common stock | (2,007,000,000) | (2,028,000,000) |
Issuances of common stock | 196,000,000 | 194,000,000 |
Dividends | (1,987,000,000) | (1,899,000,000) |
Other financing activities | 11,000,000 | (201,000,000) |
Net cash used in financing activities | (2,781,000,000) | (160,000,000) |
Effect Of Exchange Rate Changes On Cash And Cash Equivalents | 14,000,000 | (146,000,000) |
Net Increase In Cash And Cash Equivalents | 569,000,000 | 1,150,000,000 |
Cash And Cash Equivalents: | ||
Beginning of period | 2,730,000,000 | 2,291,000,000 |
End of period | $ 3,299,000,000 | $ 3,441,000,000 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Principles of Consolidation In our opinion, the accompanying interim, unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of September 30, 2016 , our results of operations for the three and nine months ended September 30, 2016 and 2015 , and cash flows for the nine months ended September 30, 2016 and 2015 . The results reported in these consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any other period or the entire year. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015 . For interim consolidated financial statement purposes, we provide for accruals under our various employee benefit plans and self-insurance reserves for each three month period based on one quarter of the estimated annual expense. Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no material impact on our financial position or results of operations. 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, 2016 . The fair values of our investment securities are disclosed in note 4 , recognized multiemployer pension withdrawal liabilities in note 6 , our short and long-term debt in note 9 and our derivative instruments in note 14 . 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 The preparation of the accompanying interim, unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best information and actual results could differ materially from those estimates. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Adoption of New Accounting Standards In May 2015, the Financial Accounting Standards Board ("FASB") issued an accounting standards update that changes the disclosure requirement for reporting investments at fair value. This update removes the requirement to categorize investments for which fair value is measured using the net asset value (“NAV”) per share practical expedient within the fair value hierarchy. These disclosures are limited to investments for which the entity has elected to measure fair value using the practical expedient. Substantially all of our Level 3 pension and postretirement benefit plan assets were measured using NAV as a practical expedient. This guidance became effective for us in the first quarter of 2016 and did not have a material impact on our consolidated financial position, results of operations or cash flows. In June 2014, the FASB issued an accounting standards update for companies that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. This guidance became effective for us in the first quarter of 2015 and did not have a material impact on our consolidated financial position, results of operations or cash flows. Other accounting pronouncements adopted during the periods covered by the consolidated financial statements did not have a material impact on our consolidated financial position, results of operations or cash flows. Accounting Standards Issued But Not Yet Effective In August 2016, the FASB issued an accounting standards update that addresses the classification and presentation of specific cash flow issues that currently result in diverse practices. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance will generally be applied retrospectively and becomes effective for us in the first quarter of 2018, but early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated cash flows, but do not expect this standard to have a material impact. In March 2016, the FASB issued an accounting standards update that simplifies the income tax accounting and cash flow presentation related to share-based compensation by requiring the recognition of all excess tax benefits and deficiencies directly on the income statement and classification as cash flows from operating activities on the statement of cash flows. This update also makes several changes to the accounting for forfeitures and employee tax withholding on share-based compensation. This new guidance becomes effective for us in the first quarter of 2017, but early adoption is permitted. At this time, we do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In February 2016, the FASB issued an accounting standards update that requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases with terms beyond twelve months. Although the distinction between operating and finance leases will continue to exist under the new standard, the recognition and measurement of expenses and cash flows will not change significantly from the current treatment. This new guidance requires modified retrospective application and becomes effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption on our consolidated financial position, results of operations, cash flows and related disclosures. We expect material changes to our consolidated financial position. In January 2016, the FASB issued an accounting standards update which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The amendment will be effective for us beginning the first quarter of 2018. At this time, we do not expect this accounting standards update to have a material impact on our consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued an accounting standards update that changes the revenue recognition for companies that enter into contracts with customers to transfer goods or services. This amended guidance requires revenue to be recognized in an amount that reflects the consideration to which the company expects to be entitled for those goods and services when the performance obligation has been satisfied. This amended guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and related cash flows arising from contracts with customers. In August 2015, the FASB issued an accounting standards update that defers the effective date of the new revenue recognition guidance for one year, to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted for periods beginning after December 15, 2016. In March 2016, the FASB issued an accounting standards update that further clarifies the May 2014 accounting standards update with respect to principle versus agent considerations in revenue from contracts with customers. In the second quarter of 2016, the FASB issued two accounting standard updates that provide additional guidance when identifying performance obligations and licenses as well as allowing for certain narrow scope improvements and practical expedients. These accounting standard updates have the same effective date as the original standard. The Company is planning to adopt the standard on January 1, 2018. Companies may use either a full retrospective or a modified retrospective approach to adopt this standard. Management is currently evaluating this standard and the related updates, including which transition approach to use, to determine the full impact of adoption. Other accounting pronouncements issued, but not effective until after September 30, 2016 , are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION We issue employee share-based awards under the UPS Incentive Compensation Plan, which permits the grant of nonqualified and incentive stock options, stock appreciation rights, restricted stock and stock units, and restricted performance shares and performance units, to eligible employees (restricted stock and stock units, restricted performance shares and performance units are herein referred to as "Restricted Units"). Upon vesting, Restricted Units result in the issuance of the equivalent number of UPS class A common shares after required tax withholdings. Dividends accrued on Restricted Units are reinvested in additional Restricted Units at each dividend payable date, and are subject to the same vesting and forfeiture conditions as the underlying Restricted Units upon which they are earned. The primary compensation programs offered under the UPS Incentive Compensation Plan include the UPS Management Incentive Award program, the UPS Long-Term Incentive Performance Award program and the UPS Stock Option program. We also maintain an employee stock purchase plan which allows eligible employees to purchase shares of UPS class A common stock at a discount. Additionally, our matching contributions to the primary employee defined contribution savings plan are made in shares of UPS class A common stock. Management Incentive Award Program ("MIP") During the first quarter of 2016 , we granted Restricted Units under MIP to certain eligible management employees. Restricted Units granted under MIP generally vest over a five-year period with approximately 20% of the award vesting on January 15th of each of the years following the grant date (except in the case of death, disability, or retirement, in which case immediate vesting occurs). The entire grant is expensed on a straight-line basis (less estimated forfeitures) ratably over the requisite service period. Based on the date that the eligible management population and performance targets were approved for MIP, we determined the award measurement date to be February 4, 2016 (for U.S.-based employees), March 2, 2016 (for management committee employees) and March 21, 2016 (for international-based employees); therefore, the Restricted Units awarded were valued for stock compensation expense purposes using the closing New York Stock Exchange price of $96.25 , $98.77 and $105.15 on those dates, respectively. Long-Term Incentive Performance Award Program ("LTIP") We award Restricted Units under LTIP to certain eligible management employees. The performance targets are equally-weighted among adjusted consolidated operating return on invested capital, growth in adjusted consolidated revenue and total shareowner return relative to a peer group of companies. These Restricted Units generally vest at the end of a three -year period (except in the case of death, disability, or retirement, in which case immediate vesting occurs on a prorated basis). The number of Restricted Units earned will be based on the percentage achievement of the performance targets established on the grant date. For the two-thirds of the award related to consolidated operating return on invested capital and growth in consolidated revenue, we recognize the grant-date fair value of these Restricted Units (less estimated forfeitures) as compensation expense ratably over the vesting period, based on the number of awards expected to be earned. Based on the date that the eligible management population and performance targets were approved for the 2016 LTIP Award, we determined the award measurement date to be March 24, 2016; therefore, the target Restricted Units awarded for this portion of the award were valued for stock compensation expense using the closing New York Stock Exchange price of $105.43 on that date. The remaining one-third of the award related to total shareowner return relative to a peer group is valued using a Monte Carlo model. The model utilized the following assumptions: expected volatility of 16.45% based on historical stock volatility, a risk-free rate of return of 1.01% and no expected dividend yield because the units earn dividend equivalents. This portion of the award was valued with a grant date fair value of $135.57 per unit and is recognized as compensation expense (less estimated forfeitures) ratably over the vesting period. During the third quarter of 2016, the UPS Compensation Committee approved changes to the compensation arrangements of certain executive officers. These changes include a one-time grant of additional Restricted Units that will vest over the same period as the 2016 LTIP award. Based on the date that the Compensation Committee approved this additional compensation, we determined the award measurement date to be September 16, 2016; therefore, the target Restricted Units awarded for the portion of the award related to consolidated operating return on invested capital and growth in consolidated revenue, were valued for stock compensation expense using the closing New York Stock Exchange price of $106.86 on that date. The remaining one-third of the award related to total shareowner return relative to a peer group is valued using a Monte Carlo model. The model utilized the following assumptions: expected volatility of 16.61% based on historical stock volatility, a risk-free rate of return of 0.81% and no expected dividend yield because the units earn dividend equivalents. This portion of the award was valued with a grant date fair value of $147.90 per unit and is recognized as compensation expense (less estimated forfeitures) ratably over the vesting period. Nonqualified Stock Options During the first quarter of 2016 , we granted nonqualified stock option awards to a limited group of eligible senior management employees under the UPS Stock Option program. Stock option awards generally vest over a five -year period with approximately 20% of the award vesting at each anniversary date of the grant (except in the case of death, disability, or retirement, in which case immediate vesting occurs). The options granted will expire ten years after the date of the grant. In the first quarter of 2016 and 2015 , we granted 0.2 million stock options, respectively, at a grant price of $98.77 and $ 101.93 , respectively. The grant price was based on the closing New York Stock Exchange price of March 2, 2016 and March 2, 2015, respectively. During the third quarter of 2016, the UPS Compensation Committee approved changes to the compensation arrangements of certain executive officers. These changes include a one-time grant of 0.1 million nonqualified stock options at a grant price of $106.86 pursuant to the terms and conditions of the UPS Stock Option program. The grant price was based on the closing New York Stock Exchange price of September 16, 2016. These stock options will vest ratably over five years with approximately 20% of the award vesting at each anniversary date of the grant (except in the case of death, disability, or retirement, in which case immediate vesting occurs). The options granted will expire ten years after the date of the grant. The weighted average fair value of our employee stock options granted, as determined by the Black-Scholes valuation model, was $14.09 for the third quarter 2016 award, $17.32 for the first quarter 2016 award and $ 18.07 for the 2015 award using the following assumptions: Q3 2016 Q1 2016 2015 Expected life (in years) 7.5 7.5 7.5 Risk-free interest rate 1.50 % 1.66 % 2.07 % Expected volatility 19.10 % 23.60 % 20.61 % Expected dividend yield 2.97 % 2.94 % 2.63 % Compensation expense for share-based awards recognized in net income for the three months ended September 30, 2016 and 2015 was $125 and $124 million pre-tax, respectively. Compensation expense for share-based awards recognized in net income for the nine months ended September 30, 2016 and 2015 was $471 and $ 452 million pre-tax, respectively. |
INVESTMENTS AND RESTRICTED CASH
INVESTMENTS AND RESTRICTED CASH | 9 Months Ended |
Sep. 30, 2016 | |
Marketable Securities [Abstract] | |
INVESTMENTS AND RESTRICTED CASH | INVESTMENTS AND RESTRICTED CASH The following is a summary of marketable securities classified as trading and available-for-sale as of September 30, 2016 and December 31, 2015 (in millions): Cost Unrealized Gains Unrealized Losses Estimated Fair Value September 30, 2016: Current trading marketable securities: Corporate debt securities $ 1,156 $ — $ — $ 1,156 Carbon credit investments (1) 433 — (150 ) 283 Total trading marketable securities $ 1,589 $ — $ (150 ) $ 1,439 Current available-for-sale securities: U.S. government and agency debt securities $ 321 $ 2 $ — $ 323 Mortgage and asset-backed debt securities 86 1 — 87 Corporate debt securities 203 2 — 205 Equity Securities 2 — — 2 Non-U.S. government debt securities 3 — — 3 Total available-for-sale marketable securities $ 615 $ 5 $ — $ 620 Total current marketable securities $ 2,204 $ 5 $ (150 ) $ 2,059 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. Investment Other-Than-Temporary Impairments We have concluded that no material other-than-temporary impairment losses existed as of September 30, 2016 . In making this determination, we considered the financial condition and prospects of the issuers, the magnitude of the losses compared with the investments’ cost, the length of time the investments have been in an unrealized loss position, the probability that we will be unable to collect all amounts due according to the contractual terms of the securities, the credit rating of the securities 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, 2016 , by contractual maturity, are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. Cost Estimated Fair Value Due in one year or less $ 1,227 $ 1,228 Due after one year through three years 453 454 Due after three years through five years 17 17 Due after five years 72 75 1,769 1,774 Equity and carbon credit investments 435 285 $ 2,204 $ 2,059 Non-Current Investments and Restricted Cash We had $ 444 and $ 442 million of restricted cash related to our self-insurance requirements as of September 30, 2016 and December 31, 2015 which is reported in non-current investments and restricted cash on the consolidated balance sheets. This restricted cash is primarily invested in money market funds. At September 30, 2016 and December 31, 2015 , we held a $19 million investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan. Additionally, we held escrowed cash related to the acquisition and disposition of certain assets of $22 and $12 million as of September 30, 2016 and December 31, 2015 , respectively. The amounts described above are classified as non-current investments and restricted cash on the consolidated balance sheets, while the quarterly change in investment fair value is recognized in investment income and other on the statements of consolidated income. Fair Value Measurements Marketable securities utilizing Level 1 inputs include active exchange-traded carbon credit investments and certain U.S. Government debt securities, as these securities have quoted prices in active markets. Marketable securities utilizing Level 2 inputs include asset-backed and equity securities and corporate, government, and municipal bonds. These securities are valued using market corroborated pricing, matrix pricing or other models that utilize observable inputs such as yield curves. We maintain holdings in certain investment partnerships that are measured at fair value utilizing Level 3 inputs (classified as other non-current investments in the tables below and as other non-current assets in the consolidated balance sheets). These partnership holdings do not have quoted prices, nor can they be valued using inputs based on observable market data. These investments are valued internally using a discounted cash flow model with two significant inputs: (1) the after-tax cash flow projections for each partnership and (2) the risk-adjusted discount rate consistent with the duration of the expected cash flows for each partnership. The weighted-average discount rates used to value these investments were 7.49% and 8.22% as of September 30, 2016 and December 31, 2015 , respectively. These inputs, and the resulting fair values, are updated on a quarterly basis. The following table presents information about our investments measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance September 30, 2016: Marketable Securities: U.S. government and agency debt securities $ 323 $ — $ — $ 323 Mortgage and asset-backed debt securities — 87 — 87 Corporate debt securities — 1,361 — 1,361 Equity securities — 2 — 2 Non-U.S. government debt securities — 3 — 3 Carbon credit investments 283 — — 283 Total marketable securities 606 1,453 — 2,059 Other non-current investments 19 — 18 37 Total $ 625 $ 1,453 $ 18 $ 2,096 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 The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the three months ended September 30, 2016 and 2015 (in millions): Marketable Securities Other Non-Current Investments Total Balance on July 1, 2016 $ — $ 22 $ 22 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (4 ) (4 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2016 $ — $ 18 $ 18 Marketable Securities Other Non-Current Investments Total Balance on July 1, 2015 $ — $ 48 $ 48 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 September 30, 2015 $ — $ 40 $ 40 The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the nine months ended September 30, 2016 and 2015 (in millions): Marketable Securities Other Investments Total Balance on January 1, 2016 $ — 32 32 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (14 ) (14 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2016 $ — $ 18 $ 18 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) — (24 ) (24 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2015 $ — $ 40 $ 40 There were no transfers of investments between Level 1 and Level 2 during the three and nine months ended September 30, 2016 and 2015 . |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of September 30, 2016 and December 31, 2015 consist of the following (in millions): 2016 2015 Vehicles $ 8,448 $ 8,111 Aircraft 15,742 15,815 Land 1,392 1,263 Buildings 3,432 3,280 Building and leasehold improvements 3,559 3,450 Plant equipment 8,257 8,026 Technology equipment 1,730 1,670 Equipment under operating leases 29 30 Construction-in-progress 596 273 43,185 41,918 Less: Accumulated depreciation and amortization (24,696 ) (23,566 ) $ 18,489 $ 18,352 We monitor all property, plant and equipment for any indicators of potential impairment. No impairment charges on property, plant and equipment were recorded during the three and nine months ended September 30, 2016 and 2015 . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Company-Sponsored Benefit Plans Information about net periodic benefit cost for our company-sponsored pension and postretirement benefit plans is as follows for the three and nine months ended September 30, 2016 and 2015 (in millions): U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2016 2015 2016 2015 2016 2015 Three Months Ended September 30: Service cost $ 353 $ 382 $ 7 $ 8 $ 12 $ 12 Interest cost 457 423 32 30 10 11 Expected return on assets (629 ) (622 ) (2 ) (5 ) (15 ) (15 ) Amortization of prior service cost 41 42 1 2 — — Net periodic benefit cost $ 222 $ 225 $ 38 $ 35 $ 7 $ 8 U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2016 2015 2016 2015 2016 2015 Nine Months Ended September 30: Service cost $ 1,059 $ 1,145 $ 21 $ 25 $ 37 $ 37 Interest cost 1,371 1,270 92 91 31 33 Expected return on assets (1,887 ) (1,866 ) (4 ) (13 ) (44 ) (46 ) Amortization of prior service cost 125 126 3 4 — 1 Net periodic benefit cost $ 668 $ 675 $ 112 $ 107 $ 24 $ 25 During the first nine months of 2016 , we contributed $ 1.227 billion and $71 million to our company-sponsored pension and U.S. postretirement medical benefit plans, respectively. We also expect to contribute $9 and $30 million over the remainder of the year to the pension and U.S. postretirement medical benefit plans, respectively. The UPS Retirement Plan (a single-employer defined benefit pension plan sponsored by UPS) was closed to new non-union participants effective July 1, 2016. The Company amended the UPS 401(k) Savings Plan so that employees who previously would have been eligible for participation in the UPS Retirement Plan will, in addition to current benefits under the UPS 401(k) Savings Plan, begin receiving a UPS Retirement Contribution. For employees eligible to receive the Retirement Contribution, UPS will contribute 3% to 8% of eligible pay to the UPS 401(k) Savings Plan based on years of vesting service and business unit. Contributions will be made annually in cash to the accounts of participants who are employed on December 31 of each calendar year and become vested after the employee reaches three complete years of service. Multiemployer Benefit Plans We contribute to a number of multiemployer defined benefit and health and welfare plans under terms of collective bargaining agreements that cover our union-represented employees. Our current collective bargaining agreements set forth the annual contribution increases allotted to the plans that we participate in, and we are in compliance with these contribution rates. These limitations on annual contribution rates will remain in effect throughout the terms of the existing collective bargaining agreements. As of September 30, 2016 and December 31, 2015 we had $ 867 and $872 million , respectively, recognized in "other non-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 46 years. Based on the borrowing rates currently available to the Company for long-term financing of a similar maturity, the fair value of this withdrawal liability as of September 30, 2016 and December 31, 2015 was $ 941 and $ 841 million , respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability. UPS was a contributing employer to the Central States Pension Fund (“CSPF”) until 2007 when we withdrew from the plan and fully funded our allocable share of unfunded vested benefits by paying a $6.1 billion withdrawal liability. Under a collective bargaining agreement with the International Brotherhood of Teamsters, UPS agreed to provide coordinating benefits in the UPS/IBT Full Time Employee Pension Plan (“UPS/IBT Plan”) for UPS participants retiring on or after January 1, 2008 in the event that benefits are lawfully reduced by the CSPF in the future. In December 2014, Congress passed the Multiemployer Pension Reform Act (“MPRA”), which for the first time ever allowed multiemployer pension plans to reduce benefit payments to retirees, subject to specific guidelines in the statute and government oversight. In September 2015, the CSPF submitted a proposed pension benefit reduction plan to the U.S. Department of the Treasury under the MPRA. The CSPF plan proposed to reduce retirement benefits to the CSPF participants, including UPS participants retiring on or after January 1, 2008. We vigorously challenged the proposed benefit reduction plan because we believed that it did not comply with the law and that certain actions by the CSPF were invalid. On May 6, 2016, the U.S. Department of the Treasury rejected the proposed plan submitted by the CSPF, stating that it failed to satisfy a number of requirements set forth in the MPRA. The CSPF has asserted that it will become insolvent in 2025 which could lead to the reduction of retirement benefits. Although there are numerous factors that could affect the CSPF’s status, if the CSPF were to become insolvent as they have projected , UPS may be required to provide coordinating benefits, thereby increasing the current projected benefit obligation for the UPS/IBT Plan by approximately $4 billion . The CSPF has said that it believes a legislative solution to its funding status is necessary, and we expect that the CSPF will continue to explore options to avoid insolvency. The potential obligation to pay coordinating benefits from the UPS/IBT Plan is subject to a number of uncertainties, including actions that may be taken by the CSPF, the federal government or others. These actions include whether the CSPF will submit a revised pension benefit reduction plan or otherwise seek federal government assistance, the extent to which benefits are paid by the Pension Benefit Guaranty Corporation, as well as the effect of discount rates and various other actuarial assumptions. The numerous uncertainties that exist regarding the ultimate resolution of the CSPF situation prevent us from making reliable estimates of the timing and amount, if any, of CSPF benefit reductions that could result in additional benefit obligations for the UPS/IBT Plan. Therefore, we have not recognized any liability for additional coordinating benefits of the UPS/IBT Plan, but the current projected benefit obligation could materially increase as these uncertainties are resolved. We will continue to assess the impact of these uncertainties on the projected benefit obligation of the UPS/IBT Plan in accordance with Accounting Standards Codification Topic 715 - Compensation - Retirement Benefits. Collective Bargaining Agreements As of December 31, 2015, we had approximately 266,000 employees employed under a national master agreement and various supplemental agreements with local unions affiliated with the Teamsters. In addition, our airline pilots, airline mechanics, ground mechanics and certain other employees are employed under other collective bargaining agreements. In 2014, the Teamsters ratified a new national master agreement (“NMA”) with UPS that will expire on July 31, 2018. The economic provisions in the NMA included wage rate increases, as well as increased contribution rates for healthcare and pension benefits. Most of these economic provisions were retroactive to August 1, 2013, which was the effective date of the NMA. During the first quarter of 2015, we remitted $ 53 million for these retroactive economic benefits. We have approximately 2,600 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association ("IPA"), which became amendable at the end of 2011. On June 30, 2016, the IPA and the Company announced a tentative agreement on a new five-year labor contract. On August 31, 2016, the IPA members voted to ratify the agreement. Terms of the agreement became effective September 1, 2016 and run through September 1, 2021. The economic provisions in the agreement included pay increases, a signing bonus and enhanced pension benefits. Our airline mechanics are covered by a collective bargaining agreement with Teamsters Local 2727, which became amendable November 1, 2013. We are currently in negotiations with Teamsters Local 2727 for a new agreement. In addition, approximately 3,100 of our auto and maintenance mechanics who are not employed under agreements with the Teamsters are employed under collective bargaining agreements with the International Association of Machinists and Aerospace Workers (“IAM”) that will expire on July 31, 2019. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 and December 31, 2015 (in millions): U.S. Domestic Package International Package Supply Chain & Freight Consolidated December 31, 2015: $ 715 $ 425 $ 2,279 $ 3,419 Acquired — — — — Currency / Other $ — $ — $ 17 $ 17 September 30, 2016: $ 715 $ 425 $ 2,296 $ 3,436 The change in goodwill for the Supply Chain & Freight segment 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. The following is a summary of intangible assets as of September 30, 2016 and December 31, 2015 (in millions): Gross Carrying Amount Accumulated Amortization Net Carrying Value September 30, 2016: Capitalized software $ 2,858 $ (2,103 ) $ 755 Licenses 130 (63 ) 67 Franchise rights 128 (88 ) 40 Customer relationships 511 (73 ) 438 Trade name 200 — 200 Trademarks, patents and other 58 (21 ) 37 Total Intangible Assets, Net $ 3,885 $ (2,348 ) $ 1,537 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 As of September 30, 2016 , 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. |
BUSINESS COMBINATIONS (Notes)
BUSINESS COMBINATIONS (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS In 2016 and 2015, we acquired several businesses that were not material, individually or in the aggregate, to our consolidated financial position or results of operations. These acquisitions were funded with cash from operations. In March 2015, we acquired Poltraf Sp z.o.o. ("Poltraf"), a Polish-based pharmaceutical logistics company recognized for its temperature-sensitive warehousing and transportation solutions. In May 2015 and June 2015, we acquired Parcel Pro, Inc. ("Parcel Pro") and the Insured Parcel Services division of G4S International Logistics ("IPS"), respectively. These businesses provide services and insurance coverage for the transport of high value luxury goods. In August 2015, we acquired Coyote Logistics Midco, Inc. ("Coyote"), a U.S.-based truckload freight brokerage company, for $1.829 billion . This acquisition allows us to expand our existing portfolio by adding large scale truckload freight brokerage and transportation management services to our Supply Chain & Freight reporting segment. In addition, we will continue to benefit from synergies in purchased transportation, backhaul utilization, cross-selling to customers, as well as technology systems and industry best practices. The acquisition was funded using cash from operations and issuances of commercial paper. The final purchase price allocation was completed in the third quarter of 2016 and there were no material adjustments recorded. The financial results of these acquired businesses are included in the Supply Chain & Freight segment from the date of acquisition and were not material to our results of operations. |
DEBT AND FINANCING ARRANGEMENTS
DEBT AND FINANCING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
DEBT AND FINANCING ARRANGEMENTS | DEBT AND FINANCING ARRANGEMENTS The carrying value of our outstanding debt as of September 30, 2016 and December 31, 2015 consists of the following (in millions): Principal Amount Carrying Value Maturity 2016 2015 Commercial paper $ 3,759 2016 -2017 $ 3,759 $ 2,965 Fixed-rate senior notes: 1.125% senior notes 375 2017 374 372 5.50% senior notes 750 2018 776 787 5.125% senior notes 1,000 2019 1,060 1,064 3.125% senior notes 1,500 2021 1,634 1,613 2.45% senior notes 1,000 2022 1,031 991 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 474 474 8.375% debentures 276 2030 282 282 Pound Sterling notes: 5.50% notes 86 2031 80 92 5.125% notes 589 2050 563 638 Euro senior notes: 1.625% notes 781 2025 775 759 Floating rate senior notes 558 2020 556 544 Floating rate senior notes 833 2049-2066 824 600 Capital lease obligations 453 2016-3005 453 475 Facility notes and bonds 319 2016-2045 319 319 Other debt 29 2016-2022 29 22 Total debt 15,107 15,326 14,334 Less: Current maturities (3,820 ) (3,018 ) Long-term debt $ 11,506 $ 11,316 Debt Issuances In March, June and August 2016, we issued floating rate senior notes in principal amounts of $118 , $ 74 and $ 35 million, respectively. These notes bear interest at three-month LIBOR less 30 basis points and mature in 2066 . These notes are callable at various times after 30 years at a stated percentage of par value, and putable by the note holders at various times after one year at a stated percentage of par value. On October 19, 2016, we issued U.S. and Euro senior rate notes in two separate transactions. These senior notes consist of three separate series, as follows: • Two series of notes, each in the principal amount of $500 million, were issued. These notes bear interest at 2.4% and 3.4% fixed rates and are due November 2026 and November 2046 , respectively. Interest on these notes is payable semi-annually, in each case beginning May 15, 2017. Each note is callable at our option at a redemption price equal to the greater of 100% of the principal amount, or the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date at a benchmark treasury yield plus 10 and 15 basis points, respectively, and accrued interest. • Notes in the principal amount of €500 million ( $549 million ) were issued. These notes bear interest at a 1.0% fixed rate and are due November 2028 . Interest on these notes is payable annually, beginning November 15, 2017. The notes are callable at our option at a redemption price equal to the greater of 100% of the principal amount, or the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the date of redemption at a benchmark comparable German government bond yield plus 15 basis points and accrued interest. Sources of Credit We are authorized to borrow up to $ 10.0 billion under a U.S. commercial paper program and € 5.0 billion (in a variety of currencies) under a European commercial paper program. We had the following amounts outstanding under these programs as of September 30, 2016 : $ 2.580 billion with an average interest rate of 0.45% and € 1.056 billion ($ 1.179 billion) with an average interest rate of -0.35% . As of September 30, 2016 , we have classified the entire commercial paper balance as a current liability on our consolidated balance sheet. We maintain two credit agreements with a consortium of banks. One of these agreements provides revolving credit facilities of $1.5 billion, and expires on March 24, 2017 . Generally, amounts outstanding under this facility bear interest at a periodic fixed rate equal to LIBOR for the applicable interest period and currency denomination, plus an applicable margin. Alternatively, a fluctuating rate of interest equal to the highest of (1) JPMorgan Chase Bank’s publicly announced prime rate; (2) the Federal Funds effective rate plus 0.50% ; and (3) LIBOR for a one month interest period plus 1.00% , plus an applicable margin, may be used at our discretion. In each case, the applicable margin for advances bearing interest based on LIBOR is a percentage determined by quotations from Markit Group Ltd. for our 1-year credit default swap spread, subject to a minimum rate of 0.10% and a maximum rate of 0.75% . The applicable margin for advances bearing interest based on the prime rate is 1.00% below the applicable margin for LIBOR advances (but not lower than 0.00% ). We are also able to request advances under this facility based on competitive bids for the applicable interest rate. There were no amounts outstanding under this facility as of September 30, 2016 . The second agreement provides revolving credit facilities of $ 3.0 billion, and expires on March 25, 2021 . Generally, amounts outstanding under this facility bear interest at a periodic fixed rate equal to LIBOR for the applicable interest period and currency denomination, plus an applicable margin. Alternatively, a fluctuating rate of interest equal to the highest of (1) JPMorgan Chase Bank’s publicly announced prime rate; (2) the Federal Funds effective rate plus 0.50% ; and (3) LIBOR for a one month interest period plus 1.00% , plus an applicable margin, may be used at our discretion. In each case, the applicable margin for advances bearing interest based on LIBOR is a percentage determined by quotations from Markit Group Ltd. for our 1-year credit default swap spread, interpolated for a period from the date of determination of such credit default swap spread in connection with a new interest period until the latest maturity date of this facility then in effect (but not less than a period of one year). The minimum applicable margin rate is 0.10% and the maximum applicable margin rate is 0.75% per annum. The applicable margin for advances bearing interest based on the prime rate is 1.00% below the applicable margin for LIBOR advances (but not less than 0.00% ). We are also able to request advances under this facility based on competitive bids. There were no amounts outstanding under this facility as of September 30, 2016 . Debt Covenants Our existing debt instruments and credit facilities subject us to certain financial covenants. As of September 30, 2016 and for all prior periods, we have satisfied these financial covenants. These covenants limit the amount of secured indebtedness that we may incur, and limit the amount of attributable debt in sale-leaseback transactions, to 10% of net tangible assets. As of September 30, 2016 , 10% of net tangible assets was equivalent to $2.248 billion; however, we have no covered sale-leaseback transactions or secured indebtedness outstanding. We do not expect these covenants to have a material impact on our financial condition or liquidity. Fair Value of Debt Based on the borrowing rates currently available to the Company for long-term debt with similar terms and maturities, the fair value of long-term debt, including current maturities, was approximately $ 17.330 billion and $ 15.524 billion as of September 30, 2016 and December 31, 2015 , respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of all of our debt instruments. Contractual Commitments We have contractual obligations and commitments for the purchase of aircraft, vehicles, technology equipment and building and leasehold improvements. On October 27, 2016, we placed an order for 14 Boeing 747-8 freighters to be delivered between 2017 and 2020. The agreement also includes an option to purchase an additional 14 747-8 freighters. In addition, we have new purchase commitments for aircraft engines, equipment and hub automation and expansion projects. These new purchase commitments will provide additional capacity for increased demand for our air and ground shipping services. Including these additional obligations, the expected cash outflow to satisfy our total purchase commitments is as follows (in millions): 2016 (remaining) - $466 ; 2017 - $1,020 ; 2018 - $1,010 ; 2019 - $611 ; 2020 - $347 ; and thereafter - $65 . |
LEGAL PROCEEDINGS AND CONTINGEN
LEGAL PROCEEDINGS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS AND CONTINGENCIES | LEGAL PROCEEDINGS AND CONTINGENCIES We are involved in a number of judicial proceedings and other matters arising from the conduct of our business activities. Although there can be no assurance as to the ultimate outcome, we have generally denied, or believe we have a meritorious defense and will deny, liability in all litigation pending against us, including (except as otherwise noted herein) the matters described below, and we intend to defend vigorously each case. We have accrued for legal claims when, and to the extent that, amounts associated with the claims become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for those claims. For those matters as to which we are not able to estimate a possible loss or range of loss, we are not able to determine whether the loss will have a material adverse effect on our business, financial condition or results of operations or liquidity. For matters in this category, we have indicated in the descriptions that follow the reasons that we are unable to estimate the possible loss or range of loss. Judicial Proceedings We are a defendant in a number of lawsuits filed in state and federal courts containing various class action allegations under state wage-and-hour laws. At this time, we do not believe that any loss associated with these matters would have a material adverse effect on our financial condition, results of operations or liquidity. UPS and our subsidiary The UPS Store, Inc., are defendants in Morgate v. The UPS Store, Inc. et al., an action in the Los Angeles Superior Court brought on behalf of a certified class of all franchisees who chose to rebrand their Mail Boxes Etc. franchises to The UPS Store in March 2003. Plaintiff alleges that UPS and The UPS Store, Inc. misrepresented and omitted facts to the class about the market tests that were conducted before offering the class the choice of whether to rebrand to The UPS Store. Trial is scheduled for mid-2017. There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result from the remaining aspects of this case, including: (1) we are vigorously defending ourselves and believe we have a number of meritorious legal defenses; and (2) it remains uncertain what evidence of damages, if any, plaintiffs will be able to present. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. In AFMS LLC v. UPS and FedEx Corporation, a lawsuit filed in federal court in the Central District of California in August 2010, the plaintiff asserts that UPS and FedEx violated U.S. antitrust law by conspiring to refuse to negotiate with third-party negotiators retained by shippers and by individually imposing policies that prevent shippers from using such negotiators. The Court granted summary judgment motions filed by UPS and FedEx, entered judgment in favor of UPS and FedEx, and dismissed the case. Plaintiff appealed, and briefing is now complete before the Court of Appeals for the Ninth Circuit. The Antitrust Division of the U.S. Department of Justice (“DOJ”) opened a civil investigation of our policies and practices for dealing with third-party negotiators. We have cooperated with this investigation. We deny any liability with respect to these matters and intend to vigorously defend ourselves. There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result from these matters including: (1) the DOJ investigation is pending; (2) the Court granted our motion for summary judgment; and (3) the appeal remains pending. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from these matters or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. In Canada, four purported class-action cases were filed against us in British Columbia (2006); Ontario (2007) and Québec (2006 and 2013). The cases each allege inadequate disclosure concerning the existence and cost of brokerage services provided by us under applicable provincial consumer protection legislation and infringement of interest restriction provisions under the Criminal Code of Canada. The British Columbia class action was declared inappropriate for certification and dismissed by the trial judge. That decision was upheld by the British Columbia Court of Appeal in March 2010, which ended the case in our favor. The Ontario class action was certified in September 2011. Partial summary judgment was granted to us and the plaintiffs by the Ontario motions court. The complaint under the Criminal Code was dismissed. No appeal is being taken from that decision. The allegations of inadequate disclosure were granted and we are appealing that decision. The motion to authorize the 2006 Québec litigation as a class action was dismissed by the motions judge in October 2012; there was no appeal, which ended that case in our favor. The 2013 Québec litigation also has been dismissed. We deny all liability and are vigorously defending the one outstanding case in Ontario. There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result from this matter, including: (1) we are vigorously defending ourselves and believe that we have a number of meritorious legal defenses; and (2) there are unresolved questions of law and fact that could be important to the ultimate resolution of this matter. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. 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 asserts claims under various federal and state laws. The complaint also includes a claim that UPS violated the Assurance of Discontinuance it entered into with the New York Attorney General in 2005 concerning cigarette deliveries. Trial was held in September, 2016, and closing arguments were held on November 2, 2016. There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result from this case, including: (1) we are vigorously defending ourselves and believe we have a number of meritorious factual and legal defenses; and (2) it remains uncertain how the Court will resolve the State and City’s various claims and our defenses. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. On May 2, 2016, a purported shareowner derivative suit was filed in the Delaware Court of Chancery naming certain of UPS’s current and former officers and directors as defendants, alleging that they breached their fiduciary duties by failing to monitor UPS’s compliance with the Assurance of Discontinuance and other federal and state laws relating to cigarette deliveries. The Company’s and individual defendants’ motion to dismiss was heard in October, 2016. We are a defendant in various other lawsuits that arose in the normal course of business. We do not believe that the eventual resolution of these other lawsuits (either individually or in the aggregate), including any reasonably possible losses in excess of current accruals, will have a material adverse effect on our financial condition, results of operations or liquidity. Other Matters In August 2010, competition authorities in Brazil opened an administrative proceeding to investigate alleged anticompetitive behavior in the freight forwarding industry. Approximately 45 freight forwarding companies and individuals are named in the proceeding, including UPS, UPS SCS Transportes (Brasil) S.A., and a former employee in Brazil. UPS submitted its written defenses to these allegations in April 2014. We are cooperating with this investigation, and intend to continue to vigorously defend ourselves. There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result from this matter including: (1) we are vigorously defending the matter and believe that we have a number of meritorious legal defenses; (2) there are unresolved questions of law that could be of importance to the ultimate resolutions of this matter, including the calculation of any potential fine; and (3) there is uncertainty about the time period that is the subject of the investigation. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. |
SHAREOWNERS' EQUITY
SHAREOWNERS' EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHAREOWNERS' EQUITY | SHAREOWNERS' EQUITY Capital Stock, Additional Paid-In Capital and Retained Earnings We maintain two classes of common stock, which are distinguished from each other primarily by their respective voting rights. Class A shares are entitled to 10 votes per share, whereas class B shares are entitled to one vote per share. Class A shares are primarily held by UPS employees and retirees, and these shares are fully convertible on a one-to-one basis into class B shares at any time. Class B shares are publicly traded on the New York Stock Exchange under the symbol “UPS”. Class A and B shares both have a $0.01 par value, and as of September 30, 2016 , there were 4.6 billion class A shares and 5.6 billion class B shares authorized to be issued. Additionally, there are 200 million preferred shares, with a $0.01 par value, authorized to be issued. As of September 30, 2016 , no preferred shares had been issued. The following is a rollforward of our common stock, additional paid-in capital and retained earnings accounts for the nine months ended September 30, 2016 and 2015 (in millions, except per share amounts): 2016 2015 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 194 $ 2 201 $ 2 Common stock purchases (4 ) — (3 ) — Stock award plans 5 — 4 — Common stock issuances 2 — 2 — Conversions of class A to class B common stock (12 ) — (8 ) — Class A shares issued at end of period 185 $ 2 196 $ 2 Class B Common Stock Balance at beginning of period 693 $ 7 705 $ 7 Common stock purchases (16 ) — (17 ) — Conversions of class A to class B common stock 12 — 8 — Class B shares issued at end of period 689 $ 7 696 $ 7 Additional Paid-In Capital Balance at beginning of period $ — $ — Stock award plans 423 391 Common stock purchases (811 ) (567 ) Common stock issuances 233 245 Option premiums received (paid) 155 (69 ) Balance at end of period $ — $ — Retained Earnings Balance at beginning of period $ 6,001 $ 5,726 Net income attributable to common shareowners 3,670 3,513 Dividends ($2.34 and $2.19 per share) (2,093 ) (2,000 ) Common stock purchases (1,193 ) (1,468 ) Balance at end of period $ 6,385 $ 5,771 We repurchased 19.3 million shares of class A and class B common stock for $2.004 billion during the nine months ended September 30, 2016 , and 20.2 million shares for $2.035 billion during the nine months ended September 30, 2015 . During the first quarter of 2016, we also exercised a capped call option that we entered into in 2015 for which we received 0.2 million UPS class B shares. The $25 million premium payment for this capped call option reduced shareowners' equity in 2015. In total, shares repurchased and received in the nine months ended September 30, 2016 were 19.5 million shares for $2.029 billion . In May 2016, the Board of Directors approved a share repurchase authorization of $8.0 billion, which has no expiration date. As of September 30, 2016 , we had $6.831 billion of this share repurchase authorization available. From time to time, we enter into share repurchase programs with large financial institutions to assist in our buyback of company stock. These programs allow us to repurchase our shares at a price below the weighted average UPS share price for a given period. During the third quarter of 2016, we entered into an accelerated share repurchase program which allowed us to repurchase 2.8 million shares for $ 300 million. The program was completed in September 2016. In order to lower the average cost of acquiring shares in our ongoing share repurchase program, we periodically enter into structured repurchase agreements involving the use of capped call options for the purchase of UPS class B shares. We pay a fixed sum of cash upon execution of each agreement in exchange for the right to receive either a pre-determined amount of cash or stock. Upon expiration of each agreement, if the closing market price of our common stock is above the pre-determined price, we will have our initial investment returned with a premium in either cash or shares (at our election). If the closing market price of our common stock is at or below the pre-determined price, we will receive the number of shares specified in the agreement. We received (paid) net premiums of $155 and $(69) million during the first nine months of 2016 and 2015 , respectively, related to entering into and settling capped call options for the purchase of class B shares. As of September 30, 2016 , we had no capped call options outstanding. Accumulated Other Comprehensive Income (Loss) We experience activity in Accumulated other comprehensive income (loss) ("AOCI") for unrealized holding gains and losses on available-for-sale securities, foreign currency translation adjustments, unrealized gains and losses from derivatives that qualify as hedges of cash flows and unrecognized pension and postretirement benefit costs. The activity in AOCI for the nine months ended September 30, 2016 and 2015 is as follows (in millions): 2016 2015 Foreign currency translation gain (loss): Balance at beginning of period $ (897 ) $ (457 ) Translation adjustment (net tax of $24 and no tax impact) (12 ) (344 ) Balance at end of period (909 ) (801 ) 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 $3 and $1) 4 1 Reclassification to earnings (no tax impact in either period) — — Balance at end of period 3 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 $(15) and $71) (24 ) 119 Reclassification to earnings (net of tax effect of $(96) and $(67)) (159 ) (113 ) Balance at end of period (116 ) 67 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 $48 and $51) 80 80 Balance at end of period (2,629 ) (3,118 ) Accumulated other comprehensive income (loss) at end of period $ (3,651 ) $ (3,851 ) Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and nine months ended September 30, 2016 and 2015 is as follows (in millions): Three Months Ended September 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2016 2015 Unrealized gain (loss) on cash flow hedges: Interest rate contracts $ (7 ) $ (6 ) Interest expense Foreign exchange contracts 83 67 Revenue Income tax (expense) benefit (29 ) (22 ) Income tax expense Impact on net income 47 39 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (42 ) (44 ) Compensation and benefits Income tax (expense) benefit 15 16 Income tax expense Impact on net income (27 ) (28 ) Net income Total amount reclassified for the period $ 20 $ 11 Net income Nine Months Ended September 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2016 2015 Unrealized gain (loss) on cash flow hedges: Interest rate contracts (19 ) (18 ) Interest expense Foreign exchange contracts — (25 ) Interest expense Foreign exchange contracts 274 223 Revenue Income tax (expense) benefit (96 ) (67 ) Income tax expense Impact on net income 159 113 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (128 ) (131 ) Compensation and benefits Income tax (expense) benefit 48 51 Income tax expense Impact on net income (80 ) (80 ) Net income Total amount reclassified for the period $ 79 $ 33 Net income Deferred Compensation Obligations and Treasury Stock Activity in the deferred compensation program for the nine months ended September 30, 2016 and 2015 is as follows (in millions): 2016 2015 Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 51 $ 59 Reinvested dividends 2 3 Benefit payments (9 ) (11 ) Balance at end of period $ 44 $ 51 Treasury Stock: Balance at beginning of period (1 ) $ (51 ) (1 ) $ (59 ) Reinvested dividends — (2 ) — (3 ) Benefit payments — 9 — 11 Balance at end of period (1 ) $ (44 ) (1 ) $ (51 ) Noncontrolling Interests: We have noncontrolling interests in certain consolidated subsidiaries in our International Package and Supply Chain & Freight segments. Noncontrolling interests increased $3 and $2 million for the nine months ended September 30, 2016 and 2015 , respectively. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We report our operations in three segments: U.S. Domestic Package operations, International Package operations and Supply Chain & Freight operations. Package operations represent our most significant business and are broken down into regional operations around the world. Regional operations managers are responsible for both domestic and export operations 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 U.S. export and U.S. import shipments. 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 the operations of our forwarding, logistics, Coyote, UPS Freight and other aggregated business units. Our forwarding, logistics and Coyote units provide services in more than 195 countries and territories worldwide, and include North American and international air and ocean freight forwarding, customs brokerage, truckload freight brokerage, distribution and post-sales services and mail and consulting services. UPS Freight offers a variety of less-than-truckload (“LTL”) and truckload (“TL”) services to customers in North America. 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, interest expense and income taxes. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies included in the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015 , with certain expenses allocated between the segments using activity-based costing methods. Segment information for the three and nine months ended September 30, 2016 and 2015 is as follows (in millions): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Revenue: U.S. Domestic Package $ 9,289 $ 8,860 $ 27,388 $ 26,482 International Package 3,024 2,959 9,015 8,974 Supply Chain & Freight 2,615 2,418 7,572 6,853 Consolidated $ 14,928 $ 14,237 $ 43,975 $ 42,309 Operating Profit: U.S. Domestic Package $ 1,252 $ 1,258 $ 3,587 $ 3,483 International Package 576 507 1,763 1,557 Supply Chain & Freight 206 219 545 577 Consolidated $ 2,034 $ 1,984 $ 5,895 $ 5,617 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2016 and 2015 (in millions, except per share amounts): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Numerator: Net income attributable to common shareowners $ 1,270 $ 1,257 $ 3,670 $ 3,513 Denominator: Weighted average shares 876 893 880 898 Deferred compensation obligations 1 1 1 1 Vested portion of restricted units 3 1 4 2 Denominator for basic earnings per share 880 895 885 901 Effect of dilutive securities: Restricted units 4 7 3 6 Stock options 1 1 1 1 Denominator for diluted earnings per share 885 903 889 908 Basic earnings per share $ 1.44 $ 1.40 $ 4.15 $ 3.90 Diluted earnings per share $ 1.44 $ 1.39 $ 4.13 $ 3.87 Diluted earnings per share for the three months ended September 30, 2016 and 2015 excluded the effect of 0.1 and 0.2 million shares of common stock, respectively ( 0.2 and 0.2 million for the nine months ended September 30, 2016 and 2015, respectively) that may be issued upon the exercise of employee stock options, because such effect would be antidilutive. |
DERIVATIVE INSTRUMENTS AND RISK
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT | DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT Risk Management Policies We are exposed to market risk, primarily related to foreign exchange rates, commodity prices and interest rates. These exposures are actively monitored by management. To manage the volatility relating to certain of these exposures, we enter into a variety of derivative financial instruments. Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency rates, commodity prices and interest rates. It is our policy and practice to use derivative financial instruments only to the extent necessary to manage exposures. As we use price sensitive instruments to hedge a certain portion of our existing and anticipated transactions, we expect that any loss in value for those instruments generally would be offset by increases in the value of those hedged transactions. We do not hold or issue derivative financial instruments for trading or speculative purposes. Credit Risk Management The forward contracts, swaps and options discussed below contain an element of risk that the counterparties may be unable to meet the terms of the agreements; however, we minimize such risk exposures for these instruments by limiting the counterparties to banks and financial institutions that meet established credit guidelines, and by monitoring counterparty credit risk to prevent concentrations of credit risk with any single counterparty. We have agreements with all of our active counterparties (covering the majority of our derivative positions) containing early termination rights and/or zero threshold bilateral collateral provisions whereby cash is required based on the net fair value of derivatives associated with those counterparties. Events such as a counterparty credit rating downgrade (depending on the ultimate rating level) could also allow us to take additional protective measures such as the early termination of trades. At September 30, 2016 and December 31, 2015 , we held cash collateral of $ 487 and $ 717 million, respectively, under these agreements; this collateral is included in "cash and cash equivalents" on the consolidated balance sheets and its use by UPS is not restricted. In connection with the zero threshold bilateral collateral provisions described above, we were not required to post any collateral with our counterparties as of September 30, 2016 and December 31, 2015 . As of those dates, there were no instruments in a net liability position that were not covered by the zero threshold bilateral collateral provisions. Additionally, in connection with the agreements described above, we could be required to terminate transactions with certain counterparties in the event of a downgrade of our credit rating. We have not historically incurred, and do not expect to incur in the future, any losses as a result of counterparty default. Accounting Policy for Derivative Instruments We recognize all derivative instruments as assets or liabilities in the consolidated balance sheets at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the derivative, based upon the exposure being hedged, as a cash flow hedge, a fair value hedge or a hedge of a net investment in a foreign operation. A cash flow hedge refers to hedging the exposure to variability in expected future cash flows that is attributable to a particular risk. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of AOCI, and reclassified into earnings in the same period during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, or hedge components excluded from the assessment of effectiveness, are recognized in the statements of consolidated income during the current period. A fair value hedge refers to hedging the exposure to changes in the fair value of an existing asset or liability on the consolidated balance sheets that is attributable to a particular risk. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument is recognized in the statements of consolidated income during the current period, as well as the offsetting gain or loss on the hedged item. A net investment hedge refers to the use of cross currency swaps, forward contracts or foreign currency denominated debt to hedge portions of our net investments in foreign operations. For hedges that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in the foreign currency translation adjustment within AOCI. The remainder of the change in value of such instruments is recorded in earnings. Types of Hedges Commodity Risk Management Currently, the fuel surcharges that we apply to our domestic and international package and LTL services are the primary means of reducing the risk of adverse fuel price changes on our business. We periodically enter into option contracts on energy commodity products to manage the price risk associated with forecasted transactions involving refined fuels, principally jet-A, diesel and unleaded gasoline. The objective of the hedges is to reduce the variability of cash flows, due to changing fuel prices, associated with the forecasted transactions involving those products. We normally designate and account for these contracts as cash flow hedges of the underlying forecasted transactions involving these fuel products and, therefore, the resulting gains and losses from these hedges are recognized as a component of fuel expense or revenue when the underlying transactions occur. Foreign Currency Risk Management To protect against the reduction in value of forecasted foreign currency cash flows from our international package business, we maintain a foreign currency cash flow hedging program. Our most significant foreign currency exposures relate to the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. We hedge portions of our forecasted revenue denominated in foreign currencies with option and forward contracts. We normally designate and account for these contracts as cash flow hedges of anticipated foreign currency denominated revenue and, therefore, the resulting gains and losses from these hedges are recognized as a component of international package revenue when the underlying sales transactions occur. We also hedge portions of our anticipated cash settlements of intercompany transactions and interest payments on certain debt subject to foreign currency remeasurement using foreign currency forward contracts. We normally designate and account for these contracts as cash flow hedges of forecasted foreign currency denominated transactions; therefore, the resulting gains and losses from these hedges are recognized as a component of investment income and other when the underlying transactions are subject to currency remeasurement. We hedge our net investment in certain foreign operations with foreign currency denominated debt instruments. The use of foreign denominated debt as the hedging instrument allows the debt to be remeasured to foreign currency translation adjustment within AOCI to offset the translation risk from those investments. Any ineffective portion of net investment hedging is recognized as a component of investment income and other. Balances in the cumulative translation adjustment accounts remain until the sale or complete liquidation of the foreign entity. Interest Rate Risk Management Our indebtedness under our various financing arrangements creates interest rate risk. We use a combination of derivative instruments as part of our program to manage the fixed and floating interest rate mix of our total debt portfolio and related overall cost of borrowing. The notional amount, interest payment date and maturity date of the swaps match the terms of the associated debt being hedged. Interest rate swaps allow us to maintain a target range of floating rate debt within our capital structure. We have designated and account for the majority of our interest rate swaps that convert fixed rate interest payments into floating rate interest payments as hedges of the fair value of the associated debt instruments. Therefore, the gains and losses resulting from fair value adjustments to the interest rate swaps and fair value adjustments to the associated debt instruments are recorded to interest expense in the period in which the gains and losses occur. We normally designate 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. We periodically hedge the forecasted fixed-coupon interest payments associated with anticipated debt offerings, 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, 2016 and December 31, 2015 , the notional amounts of our outstanding derivative positions were as follows (in millions): September 30, 2016 December 31, 2015 Currency hedges: British Pound Sterling GBP 925 GBP 1,140 Canadian Dollar CAD 936 CAD 177 Euro EUR 3,625 EUR 3,750 Indian Rupee INR 206 INR — Mexican Peso MXN 1,000 MXN 3,863 Japanese Yen JPY 3,233 JPY 20,000 Singapore Dollar SGD 23 SGD — 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 390 EUR 496 As of September 30, 2016, we had no outstanding commodity hedge positions. Balance Sheet Recognition and Fair Value Measurements The following table indicates the location on the consolidated balance sheets in which our derivative assets and liabilities have been recognized, the fair value hierarchy level applicable to each derivative type and the related fair values of those derivatives (in millions). The table is segregated between those derivative instruments that qualify and are designated as hedging instruments and those that are not, as well as by type of contract and whether the derivative is in an asset or liability position. We have master netting arrangements with substantially all of our counterparties giving us the right of offset for our derivative positions. However, we have not elected to offset the fair value positions of our derivative contracts recorded on our consolidated balance sheets. The columns labeled "Net Amounts if Right of Offset had been Applied" indicate the potential net fair value positions by type of contract and location on the consolidated balance sheets had we elected to apply the right of offset. Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of Offset had been Applied Asset Derivatives Balance Sheet Location September 30, December 31, September 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current assets Level 2 $ 174 $ 408 $ 173 $ 408 Foreign exchange contracts Other non-current assets Level 2 37 92 31 92 Interest rate contracts Other non-current assets Level 2 254 204 238 185 Derivatives not designated as hedges: Foreign exchange contracts Other current assets Level 2 1 2 1 — Investment market price contracts Other current assets Level 2 153 5 153 — Interest rate contracts Other non-current assets Level 2 67 57 59 53 Total Asset Derivatives $ 686 $ 768 $ 655 $ 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 September 30, December 31, September 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current liabilities Level 2 $ 2 $ — $ 1 $ — Foreign exchange contracts Other non-current liabilities Level 2 19 — 13 — Interest rate contracts Other non-current liabilities Level 2 16 19 — — Derivatives not designated as hedges: Foreign exchange contracts Other current liabilities Level 2 2 12 2 10 Investment market price contracts Other current liabilities Level 2 — 9 — 4 Interest rate contracts Other non-current liabilities Level 2 30 13 22 9 Total Liability Derivatives $ 69 $ 53 $ 38 $ 23 Our foreign currency, interest rate and investment market price derivatives are largely comprised of over-the-counter derivatives, which are primarily valued using pricing models that rely on market observable inputs such as yield curves, currency exchange rates and investment forward prices; therefore, these derivatives are classified as Level 2. Income Statement and AOCI Recognition The following table indicates the amount of gains and losses that have been recognized in AOCI for the three and nine months ended September 30, 2016 and 2015 for those derivatives designated as cash flow hedges (in millions): Three Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2016 2015 Interest rate contracts — $ (1 ) Foreign exchange contracts (27 ) 44 Total $ (27 ) $ 43 Nine Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2016 2015 Interest rate contracts $ (3 ) $ (1 ) Foreign exchange contracts (36 ) 191 Total $ (39 ) $ 190 As of September 30, 2016 , $ 100 million of pre-tax gains related to cash flow hedges that are currently deferred in AOCI are expected to be reclassified to income over the 12 month period ended September 30, 2017 . The actual amounts that will be reclassified to income over the next 12 months will vary from this amount as a result of changes in market conditions. The maximum term over which we are hedging exposures to the variability of cash flow is 16 years. The amount of ineffectiveness recognized in income on derivative instruments designated in cash flow hedging relationships was immaterial for the three and nine months ended September 30, 2016 and 2015 . 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, 2016 and 2015 for those instruments designated as net investment hedges (in millions): Three Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2016 2015 Foreign denominated debt $ (7 ) $ — Total $ (7 ) $ — Nine Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2016 2015 Foreign denominated debt $ (30 ) — Total $ (30 ) $ — The amount of ineffectiveness recognized in income on non-derivative instruments designated in net investment hedging relationships was immaterial for the three and nine months ended September 30, 2016 and 2015 . The following table indicates the amount and location in the statements of consolidated income in which derivative gains and losses, as well as the associated gains and losses on the underlying exposure, have been recognized for those derivatives designated as fair value hedges for the three and nine months ended September 30, 2016 and 2015 (in millions): Derivative Instruments in Fair Value Hedging Relationships Location of Gain (Loss) Recognized in Income Derivative Amount of Gain (Loss) Recognized in Income Hedged Items in Fair Value Hedging Relationships Location of Gain (Loss) Recognized In Income Hedged Items Amount of Gain (Loss) Recognized in Income 2016 2015 2016 2015 Three Months Ended September 30: Interest rate contracts Interest Expense $ (59 ) $ 80 Fixed-Rate Debt Interest Expense $ 59 $ (80 ) Nine Months Ended September 30: Interest rate contracts Interest Expense $ 56 $ 71 Fixed-Rate Debt Interest Expense $ (56 ) $ (71 ) Additionally, we maintain some interest rate swaps, foreign currency forwards and investment market price forward contracts that are not designated as hedges. These interest rate swap contracts are intended to provide an economic hedge of a portfolio of interest bearing receivables. These foreign exchange forward contracts are intended to provide an economic offset to foreign currency remeasurement and settlement risk for certain assets and liabilities on our consolidated balance sheets. These investment market price forward contracts are intended to provide an economic offset to fair value fluctuations of certain investments in marketable securities. We also periodically terminate interest rate swaps and foreign currency options by entering into offsetting swap and foreign currency positions with different counterparties. As part of this process, we de-designate our original swap and foreign currency contracts. These transactions provide an economic offset that effectively eliminates the effects of changes in market valuation. The following is a summary of the amounts recorded in the statements of consolidated income related to fair value changes and settlements of these interest rate swaps, foreign currency forward and investment market price forward contracts not designated as hedges for the three and nine months ended September 30, 2016 and 2015 (in millions): 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 September 30: Interest rate contracts Interest expense $ (2 ) $ (2 ) Foreign exchange contracts Other Operating Expenses — 2 Foreign exchange contracts Investment income and other (11 ) 14 Foreign exchange contracts Interest expense — (30 ) Investment market price contracts Investment income and other (28 ) (27 ) $ (41 ) $ (43 ) Nine Months Ended September 30: Interest rate contracts Interest expense $ (6 ) $ (5 ) Foreign exchange contracts Other Operating Expenses — 18 Foreign exchange contracts Investment income and other (117 ) 49 Foreign exchange contracts Interest expense — 6 Investment market price contracts Investment income and other 152 (36 ) $ 29 $ 32 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate increased to 35.0% in the third quarter of 2016 from 34.0% in the same period of 2015 ( 35.1% year-to-date in 2016 compared to 34.6% in the same period of 2015 ), primarily due to the prior year rate including $23 million of net discrete tax benefits related to adjustments of deferred tax balances, the U.S. tax liability accrual associated with a planned distribution of cash from a Canadian subsidiary to its U.S. parent and increases in our reserves for uncertain tax positions. During the reconciliation of our deferred tax balances in 2015 after filing our annual federal and state tax returns, we identified adjustments to be made in the prior years’ deferred tax balances. These deferred tax balances were adjusted in the quarter ended September 30, 2015, which resulted in a reduction of income tax expense of approximately $66 million . This adjustment was not material to the consolidated balance sheets or statements of consolidated income. In relation to our acquisition of Coyote (see note 8), we distributed approximately $500 million of cash held by a Canadian subsidiary to its U.S. parent during the fourth quarter of 2015. During the third quarter of 2015, and as a result of the intended distribution, we recorded income tax expense of approximately $21 million . As discussed in our Annual Report on Form 10-K for the year ended December 31, 2015 , 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 various state filing positions, the allocation of income and expense between tax jurisdictions and other transfer pricing matters. These changes could result from the settlement of ongoing litigation, the completion of ongoing examinations, the expiration of the statute of limitations or other unforeseen circumstances. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation In our opinion, the accompanying interim, unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly our financial position as of September 30, 2016 , our results of operations for the three and nine months ended September 30, 2016 and 2015 , and cash flows for the nine months ended September 30, 2016 and 2015 . The results reported in these consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any other period or the entire year. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015 . For interim consolidated financial statement purposes, we provide for accruals under our various employee benefit plans and self-insurance reserves for each three month period based on one quarter of the estimated annual expense. Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no material impact on our financial position or results of operations. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | 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, 2016 . The fair values of our investment securities are disclosed in note 4 , recognized multiemployer pension withdrawal liabilities in note 6 , our short and long-term debt in note 9 and our derivative instruments in note 14 . 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 | Accounting Estimates The preparation of the accompanying interim, unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best information and actual results could differ materially from those estimates. |
Change in Accounting Methodology | The preparation of the accompanying interim, unaudited, consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best information and actual results could differ materially from those estimates. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In May 2015, the Financial Accounting Standards Board ("FASB") issued an accounting standards update that changes the disclosure requirement for reporting investments at fair value. This update removes the requirement to categorize investments for which fair value is measured using the net asset value (“NAV”) per share practical expedient within the fair value hierarchy. These disclosures are limited to investments for which the entity has elected to measure fair value using the practical expedient. Substantially all of our Level 3 pension and postretirement benefit plan assets were measured using NAV as a practical expedient. This guidance became effective for us in the first quarter of 2016 and did not have a material impact on our consolidated financial position, results of operations or cash flows. In June 2014, the FASB issued an accounting standards update for companies that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. This guidance became effective for us in the first quarter of 2015 and did not have a material impact on our consolidated financial position, results of operations or cash flows. Other accounting pronouncements adopted during the periods covered by the consolidated financial statements did not have a material impact on our consolidated financial position, results of operations or cash flows. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Fair Value of Employee Stock Options Granted and Determined by Black-Scholes Valuation Model Assumptions | The weighted average fair value of our employee stock options granted, as determined by the Black-Scholes valuation model, was $14.09 for the third quarter 2016 award, $17.32 for the first quarter 2016 award and $ 18.07 for the 2015 award using the following assumptions: Q3 2016 Q1 2016 2015 Expected life (in years) 7.5 7.5 7.5 Risk-free interest rate 1.50 % 1.66 % 2.07 % Expected volatility 19.10 % 23.60 % 20.61 % Expected dividend yield 2.97 % 2.94 % 2.63 % |
INVESTMENTS AND RESTRICTED CA24
INVESTMENTS AND RESTRICTED CASH (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 and December 31, 2015 (in millions): Cost Unrealized Gains Unrealized Losses Estimated Fair Value September 30, 2016: Current trading marketable securities: Corporate debt securities $ 1,156 $ — $ — $ 1,156 Carbon credit investments (1) 433 — (150 ) 283 Total trading marketable securities $ 1,589 $ — $ (150 ) $ 1,439 Current available-for-sale securities: U.S. government and agency debt securities $ 321 $ 2 $ — $ 323 Mortgage and asset-backed debt securities 86 1 — 87 Corporate debt securities 203 2 — 205 Equity Securities 2 — — 2 Non-U.S. government debt securities 3 — — 3 Total available-for-sale marketable securities $ 615 $ 5 $ — $ 620 Total current marketable securities $ 2,204 $ 5 $ (150 ) $ 2,059 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. |
Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of marketable securities at September 30, 2016 , by contractual maturity, are shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. Cost Estimated Fair Value Due in one year or less $ 1,227 $ 1,228 Due after one year through three years 453 454 Due after three years through five years 17 17 Due after five years 72 75 1,769 1,774 Equity and carbon credit investments 435 285 $ 2,204 $ 2,059 |
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, 2016 and December 31, 2015 , and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in millions): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance September 30, 2016: Marketable Securities: U.S. government and agency debt securities $ 323 $ — $ — $ 323 Mortgage and asset-backed debt securities — 87 — 87 Corporate debt securities — 1,361 — 1,361 Equity securities — 2 — 2 Non-U.S. government debt securities — 3 — 3 Carbon credit investments 283 — — 283 Total marketable securities 606 1,453 — 2,059 Other non-current investments 19 — 18 37 Total $ 625 $ 1,453 $ 18 $ 2,096 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 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the nine months ended September 30, 2016 and 2015 (in millions): Marketable Securities Other Investments Total Balance on January 1, 2016 $ — 32 32 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (14 ) (14 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2016 $ — $ 18 $ 18 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) — (24 ) (24 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2015 $ — $ 40 $ 40 The following table presents the changes in the above Level 3 instruments measured on a recurring basis for the three months ended September 30, 2016 and 2015 (in millions): Marketable Securities Other Non-Current Investments Total Balance on July 1, 2016 $ — $ 22 $ 22 Transfers into (out of) Level 3 — — — Net realized and unrealized gains (losses): Included in earnings (in investment income and other) — (4 ) (4 ) Included in accumulated other comprehensive income (pre-tax) — — — Purchases — — — Sales — — — Balance on September 30, 2016 $ — $ 18 $ 18 Marketable Securities Other Non-Current Investments Total Balance on July 1, 2015 $ — $ 48 $ 48 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 September 30, 2015 $ — $ 40 $ 40 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment as of September 30, 2016 and December 31, 2015 consist of the following (in millions): 2016 2015 Vehicles $ 8,448 $ 8,111 Aircraft 15,742 15,815 Land 1,392 1,263 Buildings 3,432 3,280 Building and leasehold improvements 3,559 3,450 Plant equipment 8,257 8,026 Technology equipment 1,730 1,670 Equipment under operating leases 29 30 Construction-in-progress 596 273 43,185 41,918 Less: Accumulated depreciation and amortization (24,696 ) (23,566 ) $ 18,489 $ 18,352 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | Information about net periodic benefit cost for our company-sponsored pension and postretirement benefit plans is as follows for the three and nine months ended September 30, 2016 and 2015 (in millions): U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2016 2015 2016 2015 2016 2015 Three Months Ended September 30: Service cost $ 353 $ 382 $ 7 $ 8 $ 12 $ 12 Interest cost 457 423 32 30 10 11 Expected return on assets (629 ) (622 ) (2 ) (5 ) (15 ) (15 ) Amortization of prior service cost 41 42 1 2 — — Net periodic benefit cost $ 222 $ 225 $ 38 $ 35 $ 7 $ 8 U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2016 2015 2016 2015 2016 2015 Nine Months Ended September 30: Service cost $ 1,059 $ 1,145 $ 21 $ 25 $ 37 $ 37 Interest cost 1,371 1,270 92 91 31 33 Expected return on assets (1,887 ) (1,866 ) (4 ) (13 ) (44 ) (46 ) Amortization of prior service cost 125 126 3 4 — 1 Net periodic benefit cost $ 668 $ 675 $ 112 $ 107 $ 24 $ 25 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table indicates the allocation of goodwill by reportable segment as of September 30, 2016 and December 31, 2015 (in millions): U.S. Domestic Package International Package Supply Chain & Freight Consolidated December 31, 2015: $ 715 $ 425 $ 2,279 $ 3,419 Acquired — — — — Currency / Other $ — $ — $ 17 $ 17 September 30, 2016: $ 715 $ 425 $ 2,296 $ 3,436 |
Schedule of Intangible Assets (Excluding Goodwill) | The following is a summary of intangible assets as of September 30, 2016 and December 31, 2015 (in millions): Gross Carrying Amount Accumulated Amortization Net Carrying Value September 30, 2016: Capitalized software $ 2,858 $ (2,103 ) $ 755 Licenses 130 (63 ) 67 Franchise rights 128 (88 ) 40 Customer relationships 511 (73 ) 438 Trade name 200 — 200 Trademarks, patents and other 58 (21 ) 37 Total Intangible Assets, Net $ 3,885 $ (2,348 ) $ 1,537 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 |
DEBT AND FINANCING ARRANGEMEN28
DEBT AND FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The carrying value of our outstanding debt as of September 30, 2016 and December 31, 2015 consists of the following (in millions): Principal Amount Carrying Value Maturity 2016 2015 Commercial paper $ 3,759 2016 -2017 $ 3,759 $ 2,965 Fixed-rate senior notes: 1.125% senior notes 375 2017 374 372 5.50% senior notes 750 2018 776 787 5.125% senior notes 1,000 2019 1,060 1,064 3.125% senior notes 1,500 2021 1,634 1,613 2.45% senior notes 1,000 2022 1,031 991 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 474 474 8.375% debentures 276 2030 282 282 Pound Sterling notes: 5.50% notes 86 2031 80 92 5.125% notes 589 2050 563 638 Euro senior notes: 1.625% notes 781 2025 775 759 Floating rate senior notes 558 2020 556 544 Floating rate senior notes 833 2049-2066 824 600 Capital lease obligations 453 2016-3005 453 475 Facility notes and bonds 319 2016-2045 319 319 Other debt 29 2016-2022 29 22 Total debt 15,107 15,326 14,334 Less: Current maturities (3,820 ) (3,018 ) Long-term debt $ 11,506 $ 11,316 |
SHAREOWNERS' EQUITY (Tables)
SHAREOWNERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders Equity | The following is a rollforward of our common stock, additional paid-in capital and retained earnings accounts for the nine months ended September 30, 2016 and 2015 (in millions, except per share amounts): 2016 2015 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 194 $ 2 201 $ 2 Common stock purchases (4 ) — (3 ) — Stock award plans 5 — 4 — Common stock issuances 2 — 2 — Conversions of class A to class B common stock (12 ) — (8 ) — Class A shares issued at end of period 185 $ 2 196 $ 2 Class B Common Stock Balance at beginning of period 693 $ 7 705 $ 7 Common stock purchases (16 ) — (17 ) — Conversions of class A to class B common stock 12 — 8 — Class B shares issued at end of period 689 $ 7 696 $ 7 Additional Paid-In Capital Balance at beginning of period $ — $ — Stock award plans 423 391 Common stock purchases (811 ) (567 ) Common stock issuances 233 245 Option premiums received (paid) 155 (69 ) Balance at end of period $ — $ — Retained Earnings Balance at beginning of period $ 6,001 $ 5,726 Net income attributable to common shareowners 3,670 3,513 Dividends ($2.34 and $2.19 per share) (2,093 ) (2,000 ) Common stock purchases (1,193 ) (1,468 ) Balance at end of period $ 6,385 $ 5,771 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The activity in AOCI for the nine months ended September 30, 2016 and 2015 is as follows (in millions): 2016 2015 Foreign currency translation gain (loss): Balance at beginning of period $ (897 ) $ (457 ) Translation adjustment (net tax of $24 and no tax impact) (12 ) (344 ) Balance at end of period (909 ) (801 ) 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 $3 and $1) 4 1 Reclassification to earnings (no tax impact in either period) — — Balance at end of period 3 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 $(15) and $71) (24 ) 119 Reclassification to earnings (net of tax effect of $(96) and $(67)) (159 ) (113 ) Balance at end of period (116 ) 67 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 $48 and $51) 80 80 Balance at end of period (2,629 ) (3,118 ) Accumulated other comprehensive income (loss) at end of period $ (3,651 ) $ (3,851 ) |
Schedule of Reclassifications from Accumulated Other Comprehensive Income (Loss) to Earnings | Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and nine months ended September 30, 2016 and 2015 is as follows (in millions): Three Months Ended September 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2016 2015 Unrealized gain (loss) on cash flow hedges: Interest rate contracts $ (7 ) $ (6 ) Interest expense Foreign exchange contracts 83 67 Revenue Income tax (expense) benefit (29 ) (22 ) Income tax expense Impact on net income 47 39 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (42 ) (44 ) Compensation and benefits Income tax (expense) benefit 15 16 Income tax expense Impact on net income (27 ) (28 ) Net income Total amount reclassified for the period $ 20 $ 11 Net income Nine Months Ended September 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2016 2015 Unrealized gain (loss) on cash flow hedges: Interest rate contracts (19 ) (18 ) Interest expense Foreign exchange contracts — (25 ) Interest expense Foreign exchange contracts 274 223 Revenue Income tax (expense) benefit (96 ) (67 ) Income tax expense Impact on net income 159 113 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (128 ) (131 ) Compensation and benefits Income tax (expense) benefit 48 51 Income tax expense Impact on net income (80 ) (80 ) Net income Total amount reclassified for the period $ 79 $ 33 Net income |
Schedule of Deferred Compensation and Treasury Stock Activity | Activity in the deferred compensation program for the nine months ended September 30, 2016 and 2015 is as follows (in millions): 2016 2015 Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 51 $ 59 Reinvested dividends 2 3 Benefit payments (9 ) (11 ) Balance at end of period $ 44 $ 51 Treasury Stock: Balance at beginning of period (1 ) $ (51 ) (1 ) $ (59 ) Reinvested dividends — (2 ) — (3 ) Benefit payments — 9 — 11 Balance at end of period (1 ) $ (44 ) (1 ) $ (51 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information for the three and nine months ended September 30, 2016 and 2015 is as follows (in millions): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Revenue: U.S. Domestic Package $ 9,289 $ 8,860 $ 27,388 $ 26,482 International Package 3,024 2,959 9,015 8,974 Supply Chain & Freight 2,615 2,418 7,572 6,853 Consolidated $ 14,928 $ 14,237 $ 43,975 $ 42,309 Operating Profit: U.S. Domestic Package $ 1,252 $ 1,258 $ 3,587 $ 3,483 International Package 576 507 1,763 1,557 Supply Chain & Freight 206 219 545 577 Consolidated $ 2,034 $ 1,984 $ 5,895 $ 5,617 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 and 2015 (in millions, except per share amounts): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Numerator: Net income attributable to common shareowners $ 1,270 $ 1,257 $ 3,670 $ 3,513 Denominator: Weighted average shares 876 893 880 898 Deferred compensation obligations 1 1 1 1 Vested portion of restricted units 3 1 4 2 Denominator for basic earnings per share 880 895 885 901 Effect of dilutive securities: Restricted units 4 7 3 6 Stock options 1 1 1 1 Denominator for diluted earnings per share 885 903 889 908 Basic earnings per share $ 1.44 $ 1.40 $ 4.15 $ 3.90 Diluted earnings per share $ 1.44 $ 1.39 $ 4.13 $ 3.87 |
DERIVATIVE INSTRUMENTS AND RI32
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | As of September 30, 2016 and December 31, 2015 , the notional amounts of our outstanding derivative positions were as follows (in millions): September 30, 2016 December 31, 2015 Currency hedges: British Pound Sterling GBP 925 GBP 1,140 Canadian Dollar CAD 936 CAD 177 Euro EUR 3,625 EUR 3,750 Indian Rupee INR 206 INR — Mexican Peso MXN 1,000 MXN 3,863 Japanese Yen JPY 3,233 JPY 20,000 Singapore Dollar SGD 23 SGD — 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 390 EUR 496 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table indicates the location on the consolidated balance sheets in which our derivative assets and liabilities have been recognized, the fair value hierarchy level applicable to each derivative type and the related fair values of those derivatives (in millions). The table is segregated between those derivative instruments that qualify and are designated as hedging instruments and those that are not, as well as by type of contract and whether the derivative is in an asset or liability position. We have master netting arrangements with substantially all of our counterparties giving us the right of offset for our derivative positions. However, we have not elected to offset the fair value positions of our derivative contracts recorded on our consolidated balance sheets. The columns labeled "Net Amounts if Right of Offset had been Applied" indicate the potential net fair value positions by type of contract and location on the consolidated balance sheets had we elected to apply the right of offset. Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of Offset had been Applied Asset Derivatives Balance Sheet Location September 30, December 31, September 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current assets Level 2 $ 174 $ 408 $ 173 $ 408 Foreign exchange contracts Other non-current assets Level 2 37 92 31 92 Interest rate contracts Other non-current assets Level 2 254 204 238 185 Derivatives not designated as hedges: Foreign exchange contracts Other current assets Level 2 1 2 1 — Investment market price contracts Other current assets Level 2 153 5 153 — Interest rate contracts Other non-current assets Level 2 67 57 59 53 Total Asset Derivatives $ 686 $ 768 $ 655 $ 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 September 30, December 31, September 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current liabilities Level 2 $ 2 $ — $ 1 $ — Foreign exchange contracts Other non-current liabilities Level 2 19 — 13 — Interest rate contracts Other non-current liabilities Level 2 16 19 — — Derivatives not designated as hedges: Foreign exchange contracts Other current liabilities Level 2 2 12 2 10 Investment market price contracts Other current liabilities Level 2 — 9 — 4 Interest rate contracts Other non-current liabilities Level 2 30 13 22 9 Total Liability Derivatives $ 69 $ 53 $ 38 $ 23 |
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, 2016 and 2015 for those derivatives designated as cash flow hedges (in millions): Three Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2016 2015 Interest rate contracts — $ (1 ) Foreign exchange contracts (27 ) 44 Total $ (27 ) $ 43 Nine Months Ended September 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2016 2015 Interest rate contracts $ (3 ) $ (1 ) Foreign exchange contracts (36 ) 191 Total $ (39 ) $ 190 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, 2016 and 2015 for those instruments designated as net investment hedges (in millions): Three Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2016 2015 Foreign denominated debt $ (7 ) $ — Total $ (7 ) $ — Nine Months Ended September 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2016 2015 Foreign denominated debt $ (30 ) — Total $ (30 ) $ — |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table indicates the amount and location in the statements of consolidated income in which derivative gains and losses, as well as the associated gains and losses on the underlying exposure, have been recognized for those derivatives designated as fair value hedges for the three and nine months ended September 30, 2016 and 2015 (in millions): Derivative Instruments in Fair Value Hedging Relationships Location of Gain (Loss) Recognized in Income Derivative Amount of Gain (Loss) Recognized in Income Hedged Items in Fair Value Hedging Relationships Location of Gain (Loss) Recognized In Income Hedged Items Amount of Gain (Loss) Recognized in Income 2016 2015 2016 2015 Three Months Ended September 30: Interest rate contracts Interest Expense $ (59 ) $ 80 Fixed-Rate Debt Interest Expense $ 59 $ (80 ) Nine Months Ended September 30: Interest rate contracts Interest Expense $ 56 $ 71 Fixed-Rate Debt Interest Expense $ (56 ) $ (71 ) 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, 2016 and 2015 (in millions): 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 September 30: Interest rate contracts Interest expense $ (2 ) $ (2 ) Foreign exchange contracts Other Operating Expenses — 2 Foreign exchange contracts Investment income and other (11 ) 14 Foreign exchange contracts Interest expense — (30 ) Investment market price contracts Investment income and other (28 ) (27 ) $ (41 ) $ (43 ) Nine Months Ended September 30: Interest rate contracts Interest expense $ (6 ) $ (5 ) Foreign exchange contracts Other Operating Expenses — 18 Foreign exchange contracts Investment income and other (117 ) 49 Foreign exchange contracts Interest expense — 6 Investment market price contracts Investment income and other 152 (36 ) $ 29 $ 32 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Mar. 24, 2016 | Mar. 21, 2016 | Mar. 02, 2016 | Feb. 04, 2016 | |
Stockholders Equity Note [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Cycle Period | 3 years | |||||||||
Stock compensation expense | $ 125 | $ 124,000,000 | $ 471,000,000 | $ 452,000,000 | ||||||
Employee Stock Option [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Grant price of stock options and RPU | $ 14.09 | $ 17.32 | $ 18.07 | |||||||
Nonqualified Stock Options [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Percentage of the award vesting at each anniversary date of the grant | 20.00% | |||||||||
Expiration period (in years) | 10 years | |||||||||
Stock options granted | 0.2 | 0.2 | ||||||||
Grant price of stock options and RPU | $ 98.77 | $ 101.93 | ||||||||
Award vesting period | 5 years | |||||||||
Period from grant date to expiration | 10 years | |||||||||
Nonqualified Stock Options [Member] | Executive Officer [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Percentage of the award vesting at each anniversary date of the grant | 20.00% | |||||||||
Stock options granted | 0.1 | |||||||||
Award vesting period | 5 years | |||||||||
Long-Term Incentive Performance Award [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Closing New York Stock Exchange price | $ 105.43 | |||||||||
Award vesting period | 3 years | |||||||||
Expected volatility | 16.45% | |||||||||
Risk-free interest rate | 1.01% | |||||||||
Grant date fair value | $ 135.57 | $ 135.57 | ||||||||
Long-Term Incentive Performance Award [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Closing New York Stock Exchange price | $ 106.86 | 106.86 | ||||||||
Expected volatility | 16.61% | |||||||||
Risk-free interest rate | 0.81% | |||||||||
Grant date fair value | $ 147.90 | $ 147.90 | ||||||||
Management Incentive Award [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Percentage of the award vesting at each anniversary date of the grant | 20.00% | |||||||||
Closing New York Stock Exchange price | $ 105.15 | $ 98.77 | $ 96.25 | |||||||
Award vesting period | 5 years |
Fair Value of Employee Stock Op
Fair Value of Employee Stock Options Granted as Determined by Black-Scholes Valuation Model Assumptions (Detail) - Nonqualified Stock Options [Member] | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | |
Stockholders Equity Note [Line Items] | |||
Expected life (in years) | 7 years 6 months | 7 years 6 months | 7 years 6 months |
Risk-free interest rate | 1.50% | 1.66% | 2.07% |
Expected volatility | 19.10% | 23.60% | 20.61% |
Expected dividend yield | 2.97% | 2.94% | 2.63% |
Summary of Marketable Securitie
Summary of Marketable Securities (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | $ 1,589 | $ 1,425 |
Trading Securities, Gross Unrealized Gain | 0 | 9 |
Trading Securities, Gross Unrealized Loss | (150) | (5) |
Trading Securities | 1,439 | 1,429 |
Available-for-sale Securities, Amortized Cost Basis | 615 | 569 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 5 | 1 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | (3) |
Available-for-sale Securities, Current | 620 | 567 |
Total Amortized Cost | 2,204 | 1,994 |
Marketable Securities, Gross Unrealized Gain | 5 | 10 |
Marketable Securities, Gross Unrealized Loss | (150) | (8) |
Total Estimated Fair Value | 2,059 | 1,996 |
U.S. government and agency debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 321 | 341 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 2 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | (1) |
Available-for-sale Securities, Current | 323 | 340 |
Mortgage and asset-backed debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 86 | 74 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | 1 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | (1) |
Available-for-sale Securities, Current | 87 | 74 |
Corporate debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | 1,156 | 715 |
Trading Securities, Gross Unrealized Gain | 0 | 0 |
Trading Securities, Gross Unrealized Loss | 0 | 0 |
Trading Securities | 1,156 | 715 |
Available-for-sale Securities, Amortized Cost Basis | 203 | 147 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 2 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | (1) |
Available-for-sale Securities, Current | 205 | 146 |
U.S. state and local municipal debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 2 | |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |
Available-for-sale Securities, Current | 2 | |
Equity Securities [Member] | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 2 | 2 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities, Current | 2 | 2 |
Foreign Government Debt Securities [Member] | ||
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | 363 | |
Trading Securities, Gross Unrealized Gain | 0 | |
Trading Securities, Gross Unrealized Loss | 0 | |
Trading Securities | 363 | |
Available-for-sale Securities, Amortized Cost Basis | 3 | 3 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 0 |
Available-for-sale Securities, Current | 3 | 3 |
Carbon Credit Investments [Member] | ||
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | 433 | 347 |
Trading Securities, Gross Unrealized Gain | 0 | 9 |
Trading Securities, Gross Unrealized Loss | (150) | (5) |
Trading Securities | $ 283 | $ 351 |
INVESTMENTS AND RESTRICTED CA36
INVESTMENTS AND RESTRICTED CASH - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Gain (Loss) on Investments [Line Items] | ||
Restricted Cash and Investments, Noncurrent | $ 485 | $ 473 |
Fair Value Inputs, Discount Rate | 7.49% | 8.22% |
cash held in escrow [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Restricted Cash and Cash Equivalents, Noncurrent | $ 22 | $ 12 |
Self-insurance requirements [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Restricted Cash and Investments, Noncurrent | 444 | 442 |
Variable life insurance policy | ||
Gain (Loss) on Investments [Line Items] | ||
Restricted Cash and Investments, Noncurrent | $ 19 | $ 19 |
Amortized Cost and Estimated Fa
Amortized Cost and Estimated Fair Value of Marketable Securities by Contractual Maturity (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Cost | ||
Due in one year or less | $ 1,227 | |
Due after one year through three years | 453 | |
Due after three years through five years | 17 | |
Due after five years | 72 | |
Marketable Securities, Debt Maturities, Amortized Cost, Total | 1,769 | |
Equity securities | 435 | |
Total Amortized Cost | 2,204 | $ 1,994 |
Estimated Fair Value | ||
Due in one year or less | 1,228 | |
Due after one year through three years | 454 | |
Due after three years through five years | 17 | |
Due after five years | 75 | |
Marketable Securities, Debt Maturities, Fair Value, Total | 1,774 | |
Equity securities | 285 | |
Total Estimated Fair Value | $ 2,059 | $ 1,996 |
Investments Measured at Fair Va
Investments Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 2,096 | $ 2,047 |
Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2,059 | 1,996 |
Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 323 | 340 |
Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 87 | 74 |
Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,361 | 861 |
Marketable securities | U.S. state and local municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 2 |
Marketable securities | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2 | 2 |
Marketable securities | Foreign Government Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 3 | 366 |
Marketable securities | Carbon Credit Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 283 | 351 |
Other Long-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 37 | 51 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 625 | 710 |
Fair Value, Inputs, Level 1 | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 606 | 691 |
Fair Value, Inputs, 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 | 323 | 340 |
Fair Value, Inputs, 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 |
Fair Value, Inputs, Level 1 | Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 1 | Marketable securities | U.S. state and local municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 1 | Marketable securities | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 1 | Marketable securities | Foreign Government Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 1 | Marketable securities | Carbon Credit Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 283 | 351 |
Fair Value, Inputs, Level 1 | Other Long-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 19 | 19 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,453 | 1,305 |
Fair Value, Inputs, Level 2 | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,453 | 1,305 |
Fair Value, 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 |
Fair Value, 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 | 87 | 74 |
Fair Value, Inputs, Level 2 | Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,361 | 861 |
Fair Value, Inputs, Level 2 | Marketable securities | U.S. state and local municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 2 |
Fair Value, Inputs, Level 2 | Marketable securities | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2 | 2 |
Fair Value, Inputs, Level 2 | Marketable securities | Foreign Government Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 3 | 366 |
Fair Value, Inputs, Level 2 | Marketable securities | Carbon Credit Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 2 | Other Long-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 18 | 32 |
Fair Value, Inputs, Level 3 | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, 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 |
Fair Value, 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 |
Fair Value, Inputs, Level 3 | Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 | Marketable securities | U.S. state and local municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 | Marketable securities | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 | Marketable securities | Foreign Government Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 | Marketable securities | Carbon Credit Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 | Other Long-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 18 | $ 32 |
Changes in Level 3 Instruments
Changes in Level 3 Instruments Measured on a Recurring Basis (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | $ 22 | $ 48 | $ 32 | $ 64 |
Transfers into (out of) Level 3 | 0 | 0 | 0 | 0 |
Net realized and unrealized gains (losses): | ||||
Included in earnings (in investment income) | (4) | (8) | (14) | (24) |
Included in accumulated other comprehensive income (pre-tax) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Ending Balance | 18 | 40 | 18 | 40 |
Marketable securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 0 | 0 | 0 | 0 |
Transfers into (out of) Level 3 | 0 | 0 | 0 | 0 |
Net realized and unrealized gains (losses): | ||||
Included in earnings (in investment income) | 0 | 0 | 0 | 0 |
Included in accumulated other comprehensive income (pre-tax) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Ending Balance | 0 | 0 | 0 | 0 |
Other Long-term Investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | 22 | 48 | 32 | 64 |
Transfers into (out of) Level 3 | 0 | 0 | 0 | 0 |
Net realized and unrealized gains (losses): | ||||
Included in earnings (in investment income) | (4) | (8) | (14) | (24) |
Included in accumulated other comprehensive income (pre-tax) | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Ending Balance | $ 18 | $ 40 | $ 18 | $ 40 |
Property Plant and Equipment (D
Property Plant and Equipment (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | $ 43,185,000,000 | $ 43,185,000,000 | $ 41,918,000,000 | ||
Less: Accumulated depreciation and amortization | (24,696,000,000) | (24,696,000,000) | (23,566,000,000) | ||
Property, plant and equipment, net | 18,489,000,000 | 18,489,000,000 | 18,352,000,000 | ||
Impairment charges on property plant and equipment | 0 | $ 0 | 0 | $ 0 | |
Vehicles [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 8,448,000,000 | 8,448,000,000 | 8,111,000,000 | ||
Aircraft (including aircraft under capital leases) [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 15,742,000,000 | 15,742,000,000 | 15,815,000,000 | ||
Land [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 1,392,000,000 | 1,392,000,000 | 1,263,000,000 | ||
Buildings [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 3,432,000,000 | 3,432,000,000 | 3,280,000,000 | ||
Building and leasehold improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 3,559,000,000 | 3,559,000,000 | 3,450,000,000 | ||
Plant Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 8,257,000,000 | 8,257,000,000 | 8,026,000,000 | ||
Technology equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 1,730,000,000 | 1,730,000,000 | 1,670,000,000 | ||
Equipment under operating leases [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 29,000,000 | 29,000,000 | 30,000,000 | ||
Construction-in-progress [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | $ 596,000,000 | $ 596,000,000 | $ 273,000,000 |
Net Periodic Benefit Cost for P
Net Periodic Benefit Cost for Pension and Postretirement Benefit Plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
U.S. Pension Benefits | ||||
Net Periodic Cost: | ||||
Service cost | $ 353 | $ 382 | $ 1,059 | $ 1,145 |
Interest cost | 457 | 423 | 1,371 | 1,270 |
Expected return on assets | (629) | (622) | (1,887) | (1,866) |
Amortization of: | ||||
Prior service cost | 41 | 42 | 125 | 126 |
Net periodic benefit cost | 222 | 225 | 668 | 675 |
U.S. Postretirement Medical Benefits | ||||
Net Periodic Cost: | ||||
Service cost | 7 | 8 | 21 | 25 |
Interest cost | 32 | 30 | 92 | 91 |
Expected return on assets | (2) | (5) | (4) | (13) |
Amortization of: | ||||
Prior service cost | 1 | 2 | 3 | 4 |
Net periodic benefit cost | 38 | 35 | 112 | 107 |
International Pension Benefits | ||||
Net Periodic Cost: | ||||
Service cost | 12 | 12 | 37 | 37 |
Interest cost | 10 | 11 | 31 | 33 |
Expected return on assets | (15) | (15) | (44) | (46) |
Amortization of: | ||||
Prior service cost | 0 | 0 | 0 | 1 |
Net periodic benefit cost | $ 7 | $ 8 | $ 24 | $ 25 |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Employees | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)Employees | Dec. 31, 2007USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Number of employees under a national master agreement and various supplemental agreements with local unions affiliated with Teamsters | Employees | 266,000 | ||||
Remittance of retroactive economic benefits | $ (46) | $ 5 | |||
Majority of ground mechanics not employed under agreements | Employees | 3,100 | ||||
Multiemployer Plans, Payment Term | 46 years | ||||
Number of pilots under a collective bargaining agreement with the Independent Pilots Association | Employees | 2,600 | ||||
International Pension Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Amount contributed to company- sponsored benefit plans | $ 1,227 | ||||
Estimated future employer contributions to defined benefit plan, current fiscal year | 9 | ||||
U.S. Postretirement Medical Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Amount contributed to company- sponsored benefit plans | $ 71 | ||||
Estimated future employer contributions to defined benefit plan, current fiscal year | 30 | ||||
Multiemployer Plans, Pension [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Multiemployer Plans, Withdrawal Obligation, Present Value | $ 867 | $ 872 | |||
Multi-employer Plans, Withdrawal Obligation, Fair Value Disclosure | 941 | $ 841 | |||
National Master Agreement (NMA) [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Remittance of retroactive economic benefits | $ 53 | ||||
Central States Pension Fund | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Withdrawal liability | $ 6,100 | ||||
Pension liability | $ 4,000 | ||||
Minimum [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contribution percentage | 3.00% | ||||
Maximum [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contribution percentage | 8.00% |
Allocation of Goodwill by Repor
Allocation of Goodwill by Reportable Segment (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 3,419 |
Acquired | 0 |
Currency / Other | 17 |
Ending balance | 3,436 |
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 | 425 |
Acquired | 0 |
Currency / Other | 0 |
Ending balance | 425 |
Supply Chain & Freight | |
Goodwill [Roll Forward] | |
Beginning balance | 2,279 |
Acquired | 0 |
Currency / Other | 17 |
Ending balance | $ 2,296 |
Summary of Intangible Assets (D
Summary of Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,885 | $ 3,825 |
Accumulated Amortization | (2,348) | (2,276) |
Net Carrying Value | 1,537 | 1,549 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,858 | 2,739 |
Accumulated Amortization | (2,103) | (2,026) |
Net Carrying Value | 755 | 713 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 130 | 189 |
Accumulated Amortization | (63) | (116) |
Net Carrying Value | 67 | 73 |
Franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 128 | 125 |
Accumulated Amortization | (88) | (83) |
Net Carrying Value | 40 | 42 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 511 | 511 |
Accumulated Amortization | (73) | (35) |
Net Carrying Value | 438 | 476 |
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 | 58 | 61 |
Accumulated Amortization | (21) | (16) |
Net Carrying Value | 37 | $ 45 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying value | 4 | |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying value | $ 200 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (Details) $ in Millions | 1 Months Ended |
Aug. 31, 2015USD ($) | |
Coyote Logistics [Member] | |
Business Acquisition [Line Items] | |
Consideration to be paid for business acquisition | $ 1,829 |
Carrying Value of Outstanding D
Carrying Value of Outstanding Debt (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 15,107 | |
Total debt | 15,326 | $ 14,334 |
Less current maturities | (3,820) | (3,018) |
Long-Term Debt | 11,506 | 11,316 |
Commercial Paper | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 3,759 | |
Maturity - Minimum Date | Dec. 31, 2016 | |
Maturity - Maximum Date | Dec. 31, 2017 | |
Total debt | $ 3,759 | 2,965 |
Senior notes | 5.50% stated rate | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 750 | |
Maturity - Maximum Date | Jan. 15, 2018 | |
Debt instrument, stated interest rate | 5.50% | |
Total debt | $ 776 | 787 |
Senior notes | 5.125% stated rate | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 1,000 | |
Maturity - Maximum Date | Apr. 15, 2019 | |
Debt instrument, stated interest rate | 5.125% | |
Total debt | $ 1,060 | 1,064 |
Senior notes | Debentures 8 Point 375 Percent Due 2030 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | 276 | |
Total debt | 282 | 282 |
Senior notes | 3.125% stated rate | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 1,500 | |
Maturity - Maximum Date | Jan. 15, 2021 | |
Debt instrument, stated interest rate | 3.125% | |
Total debt | $ 1,634 | 1,613 |
Senior notes | 6.20% stated rate | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 1,500 | |
Maturity - Maximum Date | Jan. 15, 2038 | |
Debt instrument, stated interest rate | 6.20% | |
Total debt | $ 1,481 | 1,481 |
Senior notes | 4.875% stated rate | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 500 | |
Maturity - Maximum Date | Nov. 15, 2040 | |
Debt instrument, stated interest rate | 4.875% | |
Total debt | $ 489 | 489 |
Senior notes | A1125SeniorNotes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 375 | |
Maturity - Maximum Date | Oct. 1, 2017 | |
Debt instrument, stated interest rate | 1.125% | |
Total debt | $ 374 | 372 |
Senior notes | 2.45% senior notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 1,000 | |
Maturity - Maximum Date | Oct. 1, 2022 | |
Debt instrument, stated interest rate | 2.45% | |
Total debt | $ 1,031 | 991 |
Senior notes | 3.625% senior notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 375 | |
Maturity - Maximum Date | Oct. 1, 2042 | |
Debt instrument, stated interest rate | 3.625% | |
Total debt | $ 367 | 367 |
Senior notes | Debentures 8 Point 375 Percent Due 2020 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | 424 | |
Total debt | 474 | 474 |
Senior notes | Floating rate senior notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 833 | |
Maturity - Minimum Date | Jan. 1, 2049 | |
Maturity - Maximum Date | Jan. 1, 2066 | |
Total debt | $ 824 | 600 |
Debentures [Member] | 8.375% debentures due 2030 | ||
Debt Instrument [Line Items] | ||
Maturity - Maximum Date | Jan. 1, 2030 | |
Debt instrument, stated interest rate | 8.375% | |
Debentures [Member] | 8.375% debentures due 2020 | ||
Debt Instrument [Line Items] | ||
Maturity - Minimum Date | Jan. 1, 2020 | |
Debt instrument, stated interest rate | 8.375% | |
Capital Lease Obligations | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 453 | |
Maturity - Minimum Date | Dec. 31, 2016 | |
Maturity - Maximum Date | Jan. 1, 3005 | |
Total debt | $ 453 | 475 |
Pound Sterling notes | Pound Sterling Notes 5 Point 5 Percent | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 86 | |
Maturity - Maximum Date | Jan. 1, 2031 | |
Debt instrument, stated interest rate | 5.50% | |
Total debt | $ 80 | 92 |
Pound Sterling notes | Pound Sterling Notes 5 Point 13 Percent | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | 589 | |
Total debt | $ 563 | 638 |
Pound Sterling notes | Pound Sterling Notes 5 Point 125 Percent | ||
Debt Instrument [Line Items] | ||
Maturity - Maximum Date | Jan. 1, 2050 | |
Debt instrument, stated interest rate | 5.125% | |
Euro Senior Notes | 1.625% Euro Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 781 | |
Long-term Debt | $ 775 | 759 |
Maturity - Maximum Date | Nov. 15, 2025 | |
Debt instrument, stated interest rate | 0.00% | |
Euro Senior Notes | Floating Rate Euro Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 558 | |
Long-term Debt | $ 556 | 544 |
Maturity - Maximum Date | Jul. 15, 2020 | |
Facility notes and bonds | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 319 | |
Maturity - Minimum Date | Jan. 1, 2016 | |
Maturity - Maximum Date | Jan. 1, 2045 | |
Total debt | $ 319 | 319 |
Other debt | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 29 | |
Maturity - Minimum Date | Jan. 1, 2016 | |
Maturity - Maximum Date | Jan. 1, 2022 | |
Total debt | $ 29 | $ 22 |
DEBT AND FINANCING ARRANGEMEN47
DEBT AND FINANCING ARRANGEMENTS - Additional Information (Detail) € in Millions, $ in Millions | Oct. 19, 2016EUR (€) | Aug. 31, 2016 | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2016EUR (€)Credit_Agreements | Sep. 30, 2016EUR (€)Credit_Agreements | Oct. 19, 2016USD ($) | Sep. 30, 2016USD ($)Credit_Agreements | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | |||||||||
Face value of debt instrument | $ 15,107 | ||||||||
Number of credit agreements | Credit_Agreements | 2 | 2 | 2 | ||||||
Covenants limit, amount of secured indebtedness and debt in sale-leaseback transactions, percentage of net tangible assets | 10.00% | 10.00% | 10.00% | ||||||
Covenants that limit the amount of secured indebtedness and amount of attributable debt in sale-leaseback transactions, net tangible assets amount | $ 2,248 | ||||||||
Sale-lease back outstanding | 0 | ||||||||
Secured debt outstanding | 0 | ||||||||
Long-term debt fair value | 17,330 | $ 15,524 | |||||||
U.S. Commercial Paper Program | |||||||||
Debt Instrument [Line Items] | |||||||||
Commercial paper program, authorized to borrow | 10,000 | ||||||||
Total debt | $ 2,580 | ||||||||
Debt, weighted average interest rate | 0.45% | 0.45% | 0.45% | ||||||
Foreign Commercial Paper Program | |||||||||
Debt Instrument [Line Items] | |||||||||
Commercial paper program, authorized to borrow | € | € 5,000 | € 5,000 | |||||||
Debt, weighted average interest rate | (0.35%) | (0.35%) | (0.35%) | ||||||
Revolving Credit Facility Expiring In 2015 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving credit facilities | $ 1,500 | ||||||||
Maturity | Mar. 24, 2017 | ||||||||
Applicable margin for base rate below LIBOR | 1.00% | 1.00% | 1.00% | ||||||
Revolving Credit Facility Expiring In 2017 | |||||||||
Debt Instrument [Line Items] | |||||||||
Revolving credit facilities | $ 3,000 | ||||||||
Maturity | Mar. 25, 2021 | ||||||||
Applicable margin for base rate below LIBOR | 1.00% | 1.00% | 1.00% | ||||||
Revolving Credit Facility Expiring In 2017 | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin for base rate below LIBOR | 0.00% | 0.00% | 0.00% | ||||||
Senior notes | Subsequent Event | Euro | |||||||||
Debt Instrument [Line Items] | |||||||||
Face value of debt instrument | € 500 | $ 549 | |||||||
Debt instrument, stated interest rate | 1.00% | 1.00% | |||||||
Maturity | Nov. 30, 2028 | ||||||||
Senior notes | Floating Rate Senior Notes Due 2066 | |||||||||
Debt Instrument [Line Items] | |||||||||
Face value of debt instrument | $ 0 | $ 118 | $ 35 | ||||||
Call period (in years) | 30 years | ||||||||
Put period (in years) | 1 year | ||||||||
Maturity | Dec. 31, 2066 | ||||||||
Senior notes | Tranche I | Subsequent Event | USD | |||||||||
Debt Instrument [Line Items] | |||||||||
Face value of debt instrument | $ 500 | ||||||||
Debt instrument, stated interest rate | 2.40% | 2.40% | |||||||
Maturity | Nov. 30, 2026 | ||||||||
Senior notes | Tranche II | Subsequent Event | USD | |||||||||
Debt Instrument [Line Items] | |||||||||
Face value of debt instrument | $ 500 | ||||||||
Debt instrument, stated interest rate | 3.40% | 3.40% | |||||||
Maturity | Nov. 30, 2046 | ||||||||
Commercial Paper, Euro Denominated [Member] | U.S. Commercial Paper Program | |||||||||
Debt Instrument [Line Items] | |||||||||
Total debt | € 1,056 | € 1,056 | $ 1,179 | ||||||
LIBOR rate | Revolving Credit Facility Expiring In 2015 [Member] | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.10% | ||||||||
LIBOR rate | Revolving Credit Facility Expiring In 2015 [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.75% | ||||||||
LIBOR rate | Revolving Credit Facility Expiring In 2017 | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 1.00% | ||||||||
LIBOR rate | Revolving Credit Facility Expiring In 2017 | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.10% | ||||||||
LIBOR rate | Revolving Credit Facility Expiring In 2017 | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.75% | ||||||||
Citibank base rate | Revolving Credit Facility Expiring In 2015 [Member] | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.00% | ||||||||
Citibank base rate | Revolving Credit Facility Expiring In 2015 [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 1.00% | ||||||||
Federal Funds Rate | Revolving Credit Facility Expiring In 2015 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.50% | ||||||||
Federal Funds Rate | Revolving Credit Facility Expiring In 2017 | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.50% | ||||||||
LIBOR | Senior notes | Floating Rate Senior Notes Due 2066 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturity | Dec. 31, 2066 | Dec. 31, 2066 | |||||||
Applicable margin rates | 0.30% | 0.30% | 0.30% | ||||||
Treasury Yield | Senior notes | Tranche I | Subsequent Event | USD | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.10% | ||||||||
Treasury Yield | Senior notes | Tranche II | Subsequent Event | USD | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.15% | ||||||||
German Government Bond | Senior notes | Subsequent Event | Euro | |||||||||
Debt Instrument [Line Items] | |||||||||
Applicable margin rates | 0.15% |
DEBT AND FINANCING ARRANGEMEN48
DEBT AND FINANCING ARRANGEMENTS - Purchase Commitments (Details) - Boeing 747-8 | Oct. 27, 2016aircraft | Sep. 30, 2016USD ($) |
Long-term Purchase Commitment [Line Items] | ||
2,016 | $ 466 | |
2,017 | 1,020 | |
2,018 | 1,010 | |
2,019 | 611 | |
2,020 | 347 | |
Thereafter | $ 65 | |
Subsequent Event | ||
Long-term Purchase Commitment [Line Items] | ||
Number of aircrafts | aircraft | 14 |
LEGAL PROCEEDINGS AND CONTING49
LEGAL PROCEEDINGS AND CONTINGENCIES (Loss Contingencies) (Details) | 1 Months Ended | 24 Months Ended |
Aug. 31, 2010Freight_Forwarding_Companies | Dec. 31, 2007Cases | |
Loss Contingencies [Line Items] | ||
Number of Freight Forwarding Companies | Freight_Forwarding_Companies | 45 | |
Loss Contingency, New Claims Filed, Number | Cases | 4 |
LEGAL PROCEEDINGS AND CONTING50
LEGAL PROCEEDINGS AND CONTINGENCIES (Details) | 1 Months Ended | 9 Months Ended | 24 Months Ended |
Aug. 31, 2010Freight_Forwarding_Companies | Sep. 30, 2016Cases | Dec. 31, 2007Cases | |
Commitments and Contingencies Disclosure [Abstract] | |||
Number of Freight Forwarding Companies | Freight_Forwarding_Companies | 45 | ||
Loss Contingency, New Claims Filed, Number | 4 | ||
Number of Outstanding Cases | 1 |
SHAREOWNERS' EQUITY - Additiona
SHAREOWNERS' EQUITY - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016USD ($)optionVoteClasses_of_Common_Stock$ / sharesshares | Sep. 30, 2016USD ($)optionVote$ / sharesshares | Sep. 30, 2015USD ($)shares | Dec. 31, 2015USD ($) | Feb. 14, 2013USD ($) | |
Stockholders Equity Note [Line Items] | |||||
Classes of Common Stock, Number | Classes_of_Common_Stock | 2 | ||||
Preferred stock, shares authorized | shares | 200,000,000 | 200,000,000 | |||
Preferred stock, par value | $ / shares | $ 0.01 | $ 0.01 | |||
Preferred stock, issued | shares | 0 | 0 | |||
Total of Class A and Class B common stock, repurchased, value | $ 2,029 | ||||
Common stock authorized for purchase, amount | $ 8,000 | ||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 6,831 | $ 6,831 | |||
Common stock purchases | shares | 19,500,000 | ||||
Noncontrolling Interest, Period Increase (Decrease) | $ 3 | $ 2 | |||
Class A common stock | |||||
Stockholders Equity Note [Line Items] | |||||
Votes per common share | Vote | 10 | 10 | |||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized | shares | 4,600,000,000 | 4,600,000,000 | |||
Total of Class A and Class B common stock, repurchased, value | $ 0 | $ 0 | |||
Common stock purchases | shares | 4,000,000 | 3,000,000 | |||
Class B common stock | |||||
Stockholders Equity Note [Line Items] | |||||
Votes per common share | Vote | 1 | 1 | |||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | |||
Common stock, shares authorized | shares | 5,600,000,000 | 5,600,000,000 | |||
Total of Class A and Class B common stock, repurchased, value | $ 0 | $ 0 | |||
Common stock purchases | shares | 16,000,000 | 17,000,000 | |||
Class A and B Common Stock | |||||
Stockholders Equity Note [Line Items] | |||||
Total of Class A and Class B common stock, repurchased, value | $ 2,004 | $ 2,035 | |||
Common stock purchases | shares | 19,300,000 | 20,200,000 | |||
accelerated share repurchase program [Domain] | |||||
Stockholders Equity Note [Line Items] | |||||
Total of Class A and Class B common stock, repurchased, value | $ 300 | ||||
Common stock purchases | shares | 2,800,000 | ||||
Call Option [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Option premiums received (paid) | $ (25) | ||||
Call Option [Member] | Class B common stock | |||||
Stockholders Equity Note [Line Items] | |||||
Total of Class A and Class B common stock, repurchased, value | $ 0 | ||||
Options Held [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Option premiums received (paid) | $ (155) | $ 69 | |||
Number of options open | option | 0 | 0 |
Roll-forward of Common Stock, A
Roll-forward of Common Stock, Additional Paid-in Capital, and Retained Earnings Accounts (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Stockholders Equity Note [Roll Forward] | |||||
Common stock purchases | (19.5) | ||||
Balance at beginning of period | $ 2,470 | ||||
Net income | $ 1,270 | $ 1,257 | 3,670 | $ 3,513 | |
Common stock purchases | (2,029) | ||||
Balance at end of period | $ 2,743 | $ 2,743 | $ 2,470 | ||
Class A common stock | |||||
Stockholders Equity Note [Roll Forward] | |||||
Balance at beginning of period | 194 | 201 | 201 | ||
Common stock purchases | (4) | (3) | |||
Stock award plans | 5 | 4 | |||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | $ 0 | $ 0 | |||
Common stock issuances | 2 | 2 | |||
Conversions of Class A to Class B common stock | (12) | (8) | |||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 0 | $ 0 | |||
Balance at end of period | 185 | 196 | 185 | 196 | 194 |
Balance at beginning of period | $ 2 | $ 2 | $ 2 | ||
Common stock issuances | 0 | 0 | |||
Common stock purchases | 0 | 0 | |||
Balance at end of period | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 |
Class B common stock | |||||
Stockholders Equity Note [Roll Forward] | |||||
Balance at beginning of period | 693 | 705 | 705 | ||
Common stock purchases | (16) | (17) | |||
Conversions of Class A to Class B common stock | (12) | (8) | |||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 0 | $ 0 | |||
Balance at end of period | 689 | 696 | 689 | 696 | 693 |
Balance at beginning of period | $ 7 | $ 7 | $ 7 | ||
Common stock purchases | 0 | 0 | |||
Balance at end of period | $ 7 | $ 7 | 7 | 7 | 7 |
Additional Paid-in Capital | |||||
Stockholders Equity Note [Roll Forward] | |||||
Balance at beginning of period | 0 | 0 | 0 | ||
Stock award plans | 423 | 391 | |||
Common stock issuances | 233 | 245 | |||
Option premiums received (paid) | 155 | (69) | |||
Common stock purchases | (811) | (567) | |||
Balance at end of period | 0 | 0 | 0 | 0 | 0 |
Retained Earnings | |||||
Stockholders Equity Note [Roll Forward] | |||||
Balance at beginning of period | 6,001 | 5,726 | 5,726 | ||
Net income | 3,670 | 3,513 | |||
Dividends ($0.57 and $0.52 per share) | (2,093) | (2,000) | |||
Common stock purchases | (1,193) | (1,468) | |||
Balance at end of period | $ 6,385 | $ 5,771 | $ 6,385 | $ 5,771 | $ 6,001 |
Common stock, cash paid for dividends, per share | $ 2.34 | $ 2.19 |
Activity in Accumulated Other C
Activity in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | $ (3,540) | |||
Aggregate adjustment for the period (net of tax effect of $0 and $(9)) | $ (7) | $ (141) | (12) | $ (344) |
Current period changes in fair value (net of tax effect of $0, and $2) | (1) | 0 | 4 | 1 |
Current period changes in fair value (net of tax effect of $(25) and $(32)) | (64) | (11) | (183) | 6 |
Balance at end of period | (3,651) | (3,851) | (3,651) | (3,851) |
Foreign currency translation gain (loss): | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (897) | (457) | ||
Aggregate adjustment for the period (net of tax effect of $0 and $(9)) | (12) | (344) | ||
Balance at end of period | (909) | (801) | (909) | (801) |
Unrealized gain (loss) on marketable securities, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (1) | 0 | ||
Current period changes in fair value (net of tax effect of $0, and $2) | 4 | 1 | ||
Reclassification to earnings (net of tax effect of $(1) and $(4)) | 0 | 0 | ||
Balance at end of period | 3 | 1 | 3 | 1 |
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | 67 | 61 | ||
Current period changes in fair value (net of tax effect of $(25) and $(32)) | (24) | 119 | ||
Reclassification to earnings (net of tax effect of $0 and $(6)) | (159) | (113) | ||
Balance at end of period | (116) | 67 | (116) | 67 |
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (2,709) | (3,198) | ||
Reclassification to earnings (net of tax effect of $16 and $28) | 80 | 80 | ||
Balance at end of period | $ (2,629) | $ (3,118) | $ (2,629) | $ (3,118) |
Activity in Accumulated Other54
Activity in Accumulated Other Comprehensive Income (Loss) (Phantoms) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (3,651) | $ (3,851) | $ (3,651) | $ (3,851) | $ (3,540) | |
Change in foreign currency translation adjustment, net of tax | (7) | (141) | (12) | (344) | ||
Foreign currency translation gain (loss): | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (909) | (801) | (909) | (801) | (897) | $ (457) |
Change in foreign currency translation adjustment, net of tax | (12) | (344) | ||||
Aggregate adjustment for the period, tax | 24 | 0 | ||||
Unrealized gain (loss) on marketable securities, net of tax: | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 3 | 1 | 3 | 1 | (1) | 0 |
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Net of Tax | 0 | 0 | ||||
Current period changes in fair value, tax effect | 3 | 1 | ||||
Reclassification to earnings, tax effect | 0 | 0 | ||||
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (116) | 67 | (116) | 67 | 67 | 61 |
Current period changes in fair value, tax effect | (15) | 71 | ||||
Reclassification to earnings, tax effect | (96) | (67) | ||||
Accumulated Defined Benefit Plans Adjustment [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (2,629) | $ (3,118) | (2,629) | (3,118) | $ (2,709) | $ (3,198) |
Reclassification to earnings, tax effect | 48 | 51 | ||||
Other Comprehensive Income (Loss), Finalization of Pension and Other Postretirement Benefit Plan Valuation, Tax | $ 0 | $ 0 |
Activity in Deferred Compensati
Activity in Deferred Compensation Program (Detail) - USD ($) shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Stockholders Equity Note [Roll Forward] | ||
Balance at beginning of period | (1) | |
Balance at end of period | (1) | |
Balance at beginning of period | $ 2,470 | |
Balance at end of period | $ 2,743 | |
Treasury Stock [Member] | ||
Stockholders Equity Note [Roll Forward] | ||
Balance at beginning of period | (1) | (1) |
Reinvested dividends | 0 | 0 |
Benefit payments | 0 | 0 |
Balance at end of period | (1) | (1) |
Balance at beginning of period | $ (51) | $ (59) |
Reinvested dividends | (2) | (3) |
Benefit payments | 9 | 11 |
Balance at end of period | (44) | (51) |
Deferred Compensation Obligations | ||
Stockholders Equity Note [Roll Forward] | ||
Balance at beginning of period | 51 | 59 |
Reinvested dividends | 2 | 3 |
Benefit payments | (9) | (11) |
Balance at end of period | $ 44 | $ 51 |
SHAREOWNERS' EQUITY Amounts Rec
SHAREOWNERS' EQUITY Amounts Reclassified from AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
TotalOtherComprehensiveIncomeReclassification, Net of Tax | $ 20 | $ 11 | $ 79 | $ 33 |
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Tax | (96) | (67) | ||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Net of Tax | 159 | 113 | ||
Unrealized gain (loss) on cash flow hedges, net of tax: | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Tax | (29) | (22) | (96) | (67) |
Unrealized gain (loss) on cash flow hedges, net of tax: | Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Net of Tax | 47 | 39 | 159 | 113 |
Unrealized gain (loss) on cash flow hedges, net of tax: | Interest Rate Contract [Member] | Interest Expense [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | (7) | (6) | (19) | (18) |
Unrealized gain (loss) on cash flow hedges, net of tax: | Foreign Exchange Contract [Member] | Interest Expense [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | 0 | (25) | ||
Unrealized gain (loss) on cash flow hedges, net of tax: | Foreign Exchange Contract [Member] | Revenue [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | 83 | 67 | 274 | 223 |
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, Net of Tax | 80 | 80 | ||
Accumulated Defined Benefit Plans Adjustment [Member] | LaborAndRelatedExpense [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), before Tax | (42) | (44) | (128) | (131) |
Accumulated Defined Benefit Plans Adjustment [Member] | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax | 15 | 16 | 48 | 51 |
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 | $ (27) | $ (28) | $ (80) | $ (80) |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) | 3 Months Ended |
Sep. 30, 2016Countries_and_TerritoriesSegments | |
Segment Reporting Information [Line Items] | |
Operating Segments, Number | Segments | 3 |
International Package | Minimum | |
Segment Reporting Information [Line Items] | |
Number of countries and territories in which service is rendered | 220 |
Supply Chain & Freight | Minimum | |
Segment Reporting Information [Line Items] | |
Number of countries and territories in which service is rendered | 195 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 14,928 | $ 14,237 | $ 43,975 | $ 42,309 |
Operating Income (Loss) | 2,034 | 1,984 | 5,895 | 5,617 |
U.S. Domestic Package | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 9,289 | 8,860 | 27,388 | 26,482 |
Operating Income (Loss) | 1,252 | 1,258 | 3,587 | 3,483 |
International Package | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 3,024 | 2,959 | 9,015 | 8,974 |
Operating Income (Loss) | 576 | 507 | 1,763 | 1,557 |
Supply Chain & Freight | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,615 | 2,418 | 7,572 | 6,853 |
Operating Income (Loss) | $ 206 | $ 219 | $ 545 | $ 577 |
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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||||
Net income attributable to common shareowners | $ 1,270 | $ 1,257 | $ 3,670 | $ 3,513 |
Denominator: | ||||
Weighted average shares | 876 | 893 | 880 | 898 |
Deferred compensation obligations | 1 | 1 | 1 | 1 |
Vested portion of restricted shares | 3 | 1 | 4 | 2 |
Denominator for basic earnings per share | 880 | 895 | 885 | 901 |
Effect of dilutive securities: | ||||
Denominator for diluted earnings per share | 885 | 903 | 889 | 908 |
Basic earnings per share | $ 1.44 | $ 1.40 | $ 4.15 | $ 3.90 |
Diluted earnings per share | $ 1.44 | $ 1.39 | $ 4.13 | $ 3.87 |
Restricted performance units | ||||
Effect of dilutive securities: | ||||
Incremental common shares attributable to share-based payment arrangements | 4 | 7 | 3 | 6 |
Stock option plans | ||||
Effect of dilutive securities: | ||||
Incremental common shares attributable to share-based payment arrangements | 1 | 1 | 1 | 1 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Shares excluded from diluted earnings per share that may be issued upon the exercise of employee stock options because such effect would be antidilutive | 0.1 | 0.2 | 0.2 | 0.2 |
DERIVATIVE INSTRUMENTS AND RI61
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Collateral received under contractual provisions | $ 487 | $ 717 |
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 | $ 100 | |
Maximum term over hedging exposures to the variability of cash flow | 16 years |
Notional Amounts of Outstanding
Notional Amounts of Outstanding Derivative Positions (Detail) € in Millions, ₨ in Millions, ¥ in Millions, £ in Millions, MXN in Millions, CAD in Millions, $ in Millions | Sep. 30, 2016EUR (€) | Sep. 30, 2016USD ($) | Sep. 30, 2016GBP (£) | Sep. 30, 2016JPY (¥) | Sep. 30, 2016INR (₨) | Sep. 30, 2016CAD | Sep. 30, 2016MXN | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | Dec. 31, 2015GBP (£) | Dec. 31, 2015JPY (¥) | Dec. 31, 2015INR (₨) | Dec. 31, 2015CAD | Dec. 31, 2015MXN |
Derivative [Line Items] | ||||||||||||||
Derivative, Notional Amount | € 3,625 | £ 925 | ¥ 3,233 | ₨ 206 | CAD 936 | MXN 1,000 | € 3,750 | £ 1,140 | ¥ 20,000 | ₨ 0 | CAD 177 | MXN 3,863 | ||
Fixed to Floating Interest Rate Swaps | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative, Notional Amount | $ 5,799 | $ 5,799 | ||||||||||||
Floating to Fixed Interest Rate Swaps | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative, Notional Amount | 778 | 778 | ||||||||||||
Price Risk Derivative [Member] | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative, Notional Amount | $ 390 | $ 496 |
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, 2016 | Dec. 31, 2015 |
Asset Derivatives | ||
Asset Derivatives | $ 686 | $ 768 |
Derivative Asset, Fair Value, Net | 655 | 738 |
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 69 | 53 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 38 | 23 |
Designated as Hedging Instrument | Foreign Exchange Contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 174 | 408 |
Derivative Asset, Fair Value, Net | 173 | 408 |
Designated as Hedging Instrument | Foreign Exchange Contracts | Other noncurrent assets | ||
Asset Derivatives | ||
Asset Derivatives | 37 | 92 |
Derivative Asset, Fair Value, Net | 31 | 92 |
Designated as Hedging Instrument | Foreign Exchange Contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 2 | 0 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 1 | 0 |
Designated as Hedging Instrument | Foreign Exchange Contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 19 | 0 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 13 | 0 |
Designated as Hedging Instrument | Interest Rate Contracts | Other noncurrent assets | ||
Asset Derivatives | ||
Asset Derivatives | 254 | 204 |
Derivative Asset, Fair Value, Net | 238 | 185 |
Designated as Hedging Instrument | Interest Rate Contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 16 | 19 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 0 | 0 |
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 1 | 2 |
Derivative Asset, Fair Value, Net | 1 | 0 |
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 2 | 12 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 2 | 10 |
Not Designated as Hedging Instrument | Price Risk Derivative [Member] | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 153 | 5 |
Derivative Asset, Fair Value, Net | 153 | 0 |
Not Designated as Hedging Instrument | Price Risk Derivative [Member] | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 0 | 9 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 0 | 4 |
Not Designated as Hedging Instrument | Interest Rate Contracts | Other noncurrent assets | ||
Asset Derivatives | ||
Asset Derivatives | 67 | 57 |
Derivative Asset, Fair Value, Net | 59 | 53 |
Not Designated as Hedging Instrument | Interest Rate Contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 30 | 13 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | $ 22 | $ 9 |
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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net Investment Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | $ (7) | $ 0 | $ (30) | $ 0 |
Net Investment Hedging [Member] | Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | (7) | 0 | (30) | 0 |
Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | (27) | 43 | (39) | 190 |
Cash Flow Hedging [Member] | Interest Rate Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | 0 | (1) | (3) | (1) |
Cash Flow Hedging [Member] | Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | $ (27) | $ 44 | $ (36) | $ 191 |
Amount and Location in the In65
Amount and Location in the Income Statement for Derivatives Designated as Fair Value Hedges (Detail) - Fair Value Hedging - Interest Expense [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Interest Rate Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (59) | $ 80 | $ 56 | $ 71 |
Fixed-Rate Debt and Capital Leases | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ 59 | $ (80) | $ (56) | $ (71) |
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, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (41) | $ (43) | $ 29 | $ 32 |
Foreign Exchange Contracts | Other Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | 0 | 2 | 0 | 18 |
Foreign Exchange Contracts | Investment Income [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | (11) | 14 | (117) | 49 |
Foreign Exchange Contracts | Interest Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | 0 | (30) | 0 | 6 |
Price Risk Derivative [Member] | Investment Income [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | (28) | (27) | 152 | (36) |
Interest Rate Contract [Member] | Interest Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (2) | $ (2) | $ (6) | $ (5) |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Other Income Tax Data [Line Items] | ||||||
Effective tax rate | 35.00% | 34.00% | 35.10% | 34.60% | ||
Adjustment to income tax expense | $ (66) | $ 23 | ||||
Income tax expense | $ 683 | 648 | $ 1,982 | $ 1,860 | ||
Coyote Logistics [Member] | ||||||
Other Income Tax Data [Line Items] | ||||||
Distribution of cash held by subsidiary | $ 500 | |||||
Income tax expense | $ 21 |