Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 25, 2018 | |
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 | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 166,955,793 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 693,388,926 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 4,214 | $ 3,320 |
Marketable securities | 720 | 749 |
Accounts receivable, net | 7,363 | 8,773 |
Current income taxes receivable | 307 | 1,573 |
Other current assets | 1,270 | 1,303 |
Total Current Assets | 13,874 | 15,718 |
Property, Plant and Equipment, Net | 23,901 | 22,118 |
Goodwill | 3,837 | 3,872 |
Intangible Assets, Net | 2,028 | 1,964 |
Non-Current Investments and Restricted Cash | 306 | 483 |
Deferred Income Tax Assets | 210 | 266 |
Other Non-Current Assets | 1,067 | 1,153 |
Total Assets | 45,223 | 45,574 |
Current Liabilities: | ||
Current maturities of long-term debt and commercial paper | 2,591 | 4,011 |
Accounts payable | 3,785 | 3,934 |
Accrued wages and withholdings | 2,549 | 2,608 |
Self-insurance reserves | 737 | 705 |
Accrued group welfare and retirement plan contributions | 655 | 677 |
Other current liabilities | 1,171 | 951 |
Total Current Liabilities | 11,488 | 12,886 |
Long-Term Debt | 20,120 | 20,278 |
Pension and Postretirement Benefit Obligations | 7,026 | 7,061 |
Deferred Income Tax Liabilities | 975 | 756 |
Self-Insurance Reserves | 1,665 | 1,765 |
Other Non-Current Liabilities | 1,593 | 1,804 |
Shareowners' Equity: | ||
Additional paid-in capital | 0 | 0 |
Retained earnings | 7,665 | 5,852 |
Accumulated other comprehensive loss | (5,346) | (4,867) |
Deferred compensation obligations | 31 | 37 |
Less: Treasury stock (1 share in 2018 and 2017) | (31) | (37) |
Total Equity for Controlling Interests | 2,328 | 994 |
Noncontrolling Interests | 28 | 30 |
Total Shareowners’ Equity | 2,356 | 1,024 |
Total Liabilities and Shareowners’ Equity | 45,223 | 45,574 |
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 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Treasury stock, shares | 1 | 1 | ||
Class A common stock | ||||
Common stock, shares issued | 168 | 173 | 178 | 180 |
Class B common stock | ||||
Common stock, shares issued | 693 | 687 | 688 | 689 |
STATEMENTS OF CONSOLIDATED INCO
STATEMENTS OF CONSOLIDATED INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 17,456 | $ 15,927 | $ 34,569 | $ 31,437 |
Operating Expenses: | ||||
Compensation and benefits | 9,024 | 8,284 | 18,069 | 16,595 |
Repairs and maintenance | 423 | 392 | 857 | 782 |
Depreciation and amortization | 542 | 562 | 1,138 | 1,116 |
Purchased transportation | 3,209 | 2,614 | 6,354 | 5,159 |
Fuel | 852 | 616 | 1,602 | 1,237 |
Other occupancy | 321 | 264 | 682 | 563 |
Other expenses | 1,312 | 1,158 | 2,574 | 2,331 |
Total Operating Expenses | 15,683 | 13,890 | 31,276 | 27,783 |
Operating Profit | 1,773 | 2,037 | 3,293 | 3,654 |
Other Income and (Expense): | ||||
Investment income and other | 302 | 193 | 596 | 388 |
Interest expense | (149) | (111) | (302) | (213) |
Total Other Income and (Expense) | 153 | 82 | 294 | 175 |
Income Before Income Taxes | 1,926 | 2,119 | 3,587 | 3,829 |
Income Tax Expense | 441 | 735 | 757 | 1,279 |
Net Income | $ 1,485 | $ 1,384 | $ 2,830 | $ 2,550 |
Basic Earnings Per Share | $ 1.71 | $ 1.59 | $ 3.27 | $ 2.92 |
Diluted Earnings Per Share | $ 1.71 | $ 1.58 | $ 3.25 | $ 2.91 |
STATEMENTS OF CONSOLIDATED COMP
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 1,485 | $ 1,384 | $ 2,830 | $ 2,550 |
Change in foreign currency translation adjustment, net of tax | (78) | 24 | (84) | 54 |
Change in unrealized gain (loss) on marketable securities, net of tax | 0 | 1 | (3) | 1 |
Change in unrealized gain (loss) on cash flow hedges, net of tax | 332 | (151) | 266 | (192) |
Change in unrecognized pension and postretirement benefit costs, net of tax | 38 | 386 | 77 | 418 |
Comprehensive Income | $ 1,777 | $ 1,644 | $ 3,086 | $ 2,831 |
STATEMENTS OF CONSOLIDATED CASH
STATEMENTS OF CONSOLIDATED CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows From Operating Activities: | ||
Net Income | $ 2,830 | $ 2,550 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 1,138 | 1,116 |
Pension and postretirement benefit expense | 308 | 463 |
Pension and postretirement benefit contributions | (92) | (2,530) |
Self-insurance reserves | (66) | (17) |
Deferred tax (benefit) expense | 142 | 180 |
Stock compensation expense | 378 | 345 |
Other (gains) losses | 180 | (11) |
Changes in assets and liabilities, net of effects of business acquisitions: | ||
Accounts receivable | 1,270 | 1,138 |
Other assets | 1,345 | 420 |
Accounts payable | (260) | (530) |
Accrued wages and withholdings | (9) | (13) |
Other liabilities | 22 | (458) |
Other liabilities | 14 | (32) |
Net cash from operating activities | 7,200 | 2,621 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (2,849) | (2,009) |
Proceeds from disposals of property, plant and equipment | 35 | 14 |
Purchases of marketable securities | (446) | (1,082) |
Sales and maturities of marketable securities | 453 | 1,111 |
Net (increase) decrease in finance receivables | (4) | (16) |
Cash paid for business acquisitions, net of cash and cash equivalents acquired | (2) | (57) |
Other investing activities | (7) | 14 |
Net cash used in investing activities | (2,820) | (2,025) |
Cash Flows From Financing Activities: | ||
Net change in short-term debt | 68 | (810) |
Proceeds from long-term borrowings | 513 | 3,815 |
Repayments of long-term borrowings | (2,014) | (1,220) |
Purchases of common stock | (521) | (898) |
Issuances of common stock | 125 | 132 |
Dividends | (1,507) | (1,389) |
Other financing activities | (271) | (186) |
Net cash used in financing activities | (3,607) | (556) |
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | (51) | 30 |
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 722 | 70 |
Cash, Cash Equivalents and Restricted Cash: | ||
Beginning of period | 3,769 | 3,921 |
End of period | $ 4,491 | $ 3,991 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION AND ACCOUNTING POLICIES Principles of Consolidation In our opinion, the accompanying interim, unaudited, consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") 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 June 30, 2018 , our results of operations for the three and six months ended June 30, 2018 and 2017 , and cash flows for the six months ended June 30, 2018 and 2017 . 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, 2017 . For interim consolidated financial statement purposes, we provide for accruals under our various employee benefit plans for each three month period based on one quarter of the estimated annual expense. 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 June 30, 2018 . The fair values of our investment securities are disclosed in note 5 , our recognized multiemployer pension withdrawal liabilities in note 7 , our short and long-term debt in note 9 and our derivative instruments in note 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 | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Adoption of New Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") that changes the revenue recognition for companies that enter into contracts with customers to transfer goods or services (" Revenue from Contracts with Customers") . The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner depicting the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has also issued a number of updates to this standard. Effective January 1, 2018, we adopted the requirements of this ASU using the full retrospective method. See note 3 for required disclosures pertaining to the new ASU. In November 2016, the FASB issued an ASU that is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows (" Restricted Cash") . As a result of this update, restricted cash is included within cash and cash equivalents on our statements of consolidated cash flows. Effective January 1, 2018, we adopted the requirements of this ASU retrospectively. In March 2017, the FASB issued an ASU to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost (" Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost") . The update requires employers to report the current service cost component in the same line item as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented separately from service cost and outside of income from operations. As a result of this update, the net amount of interest cost, prior service cost and expected return on plan assets is now presented as other income. Effective January 1, 2018, we adopted the requirements of this ASU retrospectively, as required. We have recast our consolidated financial statements from amounts previously reported due to the adoption of new revenue recognition, pension and restricted cash standards. Impacted consolidated balance sheet line items, which reflect the adoption of the new ASUs, are as follows (in millions): December 31, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Assets: Other current assets $ 1,133 $ 170 $ — $ — $ 1,303 Total current assets 15,548 170 — — 15,718 Deferred income tax assets 265 1 — — 266 Total Assets $ 45,403 $ 171 $ — $ — $ 45,574 Liabilities: Accounts payable $ 3,872 $ 62 $ — $ — $ 3,934 Accrued wages and withholdings 2,521 87 — — 2,608 Other current liabilities (1) 905 29 — — 934 Total current liabilities 12,708 178 — — 12,886 Deferred income tax liabilities 757 (1 ) — — 756 Shareowners' Equity: Retained earnings 5,858 (6 ) — — 5,852 Total Shareowners' Equity 1,030 (6 ) — — 1,024 Total Liabilities and Shareowners' Equity $ 45,403 $ 171 $ — $ — $ 45,574 (1) The caption "Other current liabilities" was presented separately from "Hedge margin liabilities" of $17 million in the Form 10-K at December 31, 2017. These captions have been collapsed in the consolidated balance sheets as of June 30, 2018 and December 31, 2017 included within this Form 10-Q. (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. The unaudited consolidated statement of operations, which reflects the adoption of the new ASUs, is as follows (in millions): Three months ended June 30, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Revenue $ 15,750 $ 177 $ — $ — $ 15,927 Operating Expenses: Compensation and benefits 8,105 — 179 — 8,284 Repairs and maintenance 392 — — — 392 Depreciation and amortization 562 — — — 562 Purchased transportation 2,443 171 — — 2,614 Fuel 616 — — — 616 Other occupancy 264 — — — 264 Other expenses 1,152 6 — — 1,158 Total Operating Expenses 13,534 177 179 — 13,890 Operating Profit 2,216 — (179 ) — 2,037 Other Income and (Expense): Investment income and other 14 — 179 — 193 Interest expense (111 ) — — — (111 ) Total Other Income and (Expense) (97 ) — 179 — 82 Income Before Income Taxes 2,119 — — — 2,119 Income Tax Expense 735 — — — 735 Net Income $ 1,384 $ — $ — $ — $ 1,384 Basic earnings per share $ 1.59 $ — $ — $ — $ 1.59 Diluted earnings per share $ 1.58 $ — $ — $ — $ 1.58 (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. Six months ended June 30, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Revenue $ 31,065 $ 372 $ — $ — $ 31,437 Operating Expenses: Compensation and benefits 16,236 — 359 — 16,595 Repairs and maintenance 782 — — — 782 Depreciation and amortization 1,116 — — — 1,116 Purchased transportation 4,809 350 — — 5,159 Fuel 1,237 — — — 1,237 Other occupancy 563 — — — 563 Other expenses 2,322 9 — — 2,331 Total Operating Expenses 27,065 359 359 — 27,783 Operating Profit 4,000 13 (359 ) — 3,654 Other Income and (Expense): Investment income and other 29 — 359 — 388 Interest expense (213 ) — — — (213 ) Total Other Income and (Expense) (184 ) — 359 — 175 Income Before Income Taxes 3,816 13 — — 3,829 Income Tax Expense 1,274 5 — — 1,279 Net Income $ 2,542 $ 8 $ — $ — $ 2,550 Basic earnings per share $ 2.91 $ 0.01 $ — $ — $ 2.92 Diluted earnings per share $ 2.90 $ 0.01 $ — $ — $ 2.91 (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. The unaudited impacted consolidated statement of cash flows line items, which reflect the adoption of the new ASUs, are as follows (in millions): Six months ended June 30, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Net Income $ 2,542 $ 8 $ — $ — $ 2,550 Adjustments to reconcile net income to net cash from operating activities: Deferred tax (benefit) expense 175 5 — — 180 Other assets 440 (20 ) — — 420 Accounts payable (534 ) 4 — — (530 ) Accrued wages and withholdings (18 ) 5 — — (13 ) Other liabilities (456 ) (2 ) — — (458 ) Cash flows from operating activities 2,621 — — — 2,621 Purchase of marketable securities (1,084 ) — — 2 (1,082 ) Net cash used in investing activities (2,027 ) — — 2 (2,025 ) Net decrease in cash, cash equivalents and restricted cash 68 — — 2 70 Cash, cash equivalents and restricted cash at the beginning of period 3,476 — — 445 3,921 Cash, cash equivalents and restricted cash at the end of period $ 3,544 $ — $ — $ 447 $ 3,991 (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. In February 2018, the FASB issued an ASU that allows a reclassification from accumulated other comprehensive income ("AOCI") to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Tax Act"). Effective January 1, 2018, we early adopted this ASU and elected to reclassify the income tax effects of the Tax Act from AOCI to retained earnings. This resulted in a $735 million increase to retained earnings and a $735 million decrease to AOCI. Our current accounting policy for releasing income tax effects from other comprehensive income is based on a portfolio approach. Other accounting pronouncements adopted during the periods covered by the consolidated financial statements did not have a material impact on our consolidated financial position, results of operations or cash flows. Accounting Standards Issued But Not Yet Effective In August 2017, the FASB issued an ASU to enhance recognition of the economic results of hedging activities in the financial statements. In addition, this update makes certain targeted improvements to simplify the application of the hedge accounting guidance and increase transparency regarding the scope and results of hedging activities. The guidance will generally be applied prospectively and becomes effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this ASU to have a material impact on our consolidated financial position, results of operations or cash flows. In March 2017, the FASB issued an ASU to require the premium on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount would not be impacted by the proposed update. Under U.S. GAAP, premiums on callable debt securities are generally amortized over the contractual life of the security. Only in cases when an entity has a large number of similar securities is it allowed to consider estimates of principal prepayments. Amortization of the premium over the contractual life of the instrument can result in losses being recorded for the unamortized premium if the issuer exercises the call feature prior to maturity. The standard will be effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this ASU to have a material impact on our consolidated financial position, results of operations or cash flows. In January 2017, the FASB issued an ASU to simplify the accounting for goodwill impairment. The update removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The standard will be effective for us in the first quarter of 2020, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this ASU to have a material impact on our consolidated financial position, results of operations or cash flows. In February 2016, the FASB issued an ASU that requires lessees to recognize a right-of-use asset and lease liability on their 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 and subsequent amendments to the original update to determine the full impact of its adoption on our consolidated financial position, results of operations, cash flows and related disclosures, as well as the impact of adoption on policies, practices and systems. We have reviewed and selected a new lease accounting system and are currently accumulating and processing lease data into the system. In addition, we are currently analyzing our internal control framework to determine if controls should be added or modified as a result of adopting this standard. Based on the preliminary evaluation of our lease portfolio, we believe the largest impact will be accounting for leases for real estate, as we have a large portfolio of leased properties that are currently accounted for as operating leases. As of December 31, 2017, we had $ 1.637 billion of future minimum operating lease commitments that are not currently recognized on our consolidated balance sheets. We expect material changes to our consolidated balance sheets as a result of the new standard. Other accounting pronouncements issued, but not effective until after June 30, 2018 , are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Revenue Recognition Substantially all of our revenues are from contracts associated with the pick-up, transportation and delivery of packages and freight (referred to hereafter as “transportation services”), whether carried out by or arranged by UPS, both domestically and internationally, which generally occurs over a short period of time. Additionally, we provide value-added logistics services to customers through our global network of company-owned and leased distribution centers and field stocking locations, both domestically and internationally. Disaggregation of Revenue Three Months Ended Six Months Ended 2018 2017 2018 2017 Revenue: Next Day Air $ 1,830 $ 1,752 $ 3,614 $ 3,417 Deferred 1,080 1,020 2,149 1,990 Ground 7,444 6,969 14,818 13,870 U.S. Domestic Package 10,354 9,741 20,581 19,277 Domestic 700 623 1,416 1,236 Export 2,747 2,426 5,419 4,763 Cargo & Other 155 122 300 246 International Package 3,602 3,171 7,135 6,245 Forwarding 1,659 1,347 3,264 2,613 Logistics 784 718 1,566 1,458 Freight 853 755 1,630 1,462 Other 204 195 393 382 Supply Chain & Freight 3,500 3,015 6,853 5,915 Consolidated revenue $ 17,456 $ 15,927 $ 34,569 $ 31,437 We account for a contract when both parties have approved the contract and are committed to perform their obligations, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. See note 2 for the adoption of new accounting standards. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the basis of revenue recognition in accordance with U.S. GAAP. To determine the proper revenue recognition method for contracts, we evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation. This evaluation requires judgment, and the decision to combine a group of contracts or separate the combined or single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. For most of our contracts, the customer contracts with us to provide distinct services within a contract, such as transportation services of their goods. The vast majority of our contracts with customers for transportation services include only one performance obligation, the transportation services themselves. However, if a contract is separated into more than one performance obligation, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We frequently sell standard transportation services with observable standalone sales prices. In these instances, the observable standalone sales are used to determine the standalone selling price. In certain business units, such as Logistics, we sell customized customer-specific solutions in which we provide a significant service of integrating a complex set of tasks and components into a single capability (even if that single capability results in the delivery of multiple units). Hence, the entire contract is accounted for as one performance obligation. In these cases we typically use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. Satisfaction of Performance Obligations We generally recognize revenue over time as we perform the services in the contract because of the continuous transfer of control to the customer. Our customers receive the benefit of our services as the goods are transported from one location to another. Further, if we were unable to complete delivery to the final location, another entity would not need to reperform the transportation service already performed. As control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We use the cost-to-cost measure of progress for our package delivery contracts because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including ancillary or accessorial fees and reductions for estimated customer incentives, are recorded proportionally as costs are incurred. Costs to fulfill include labor and other direct costs and an allocation of indirect costs. For our freight and freight forwarding contracts, an output method of progress based on time-in-transit is utilized as the timing of costs incurred does not best depict the transfer of control to the customer. In our Logistics business we have a right to consideration from customers in an amount that corresponds directly with the value to the customers of our performance completed to date, and as such we recognize revenue in the amount to which we have a right to invoice the customer. Variable Consideration It is common for our contracts to contain customer incentives, guaranteed service refunds or other provisions that can either increase or decrease the transaction price. These variable amounts are generally awarded upon achievement of certain incentive tiers or performance metrics. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts of revenue, which may be reduced by incentives or other contract provisions, in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based on an assessment of anticipated customer spending and all information (historical, current and forecasted) that is reasonably available to us. Contract Modifications Contracts are often modified to account for changes in the rates we charge our customers or to add additional distinct services. We consider contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that add additional distinct goods or services are treated as separate contracts. Contract modifications that do not add distinct goods or services typically change the price of existing services. These contract modifications will be accounted for prospectively as the remaining performance obligations are distinct. Payment Terms Under the typical payment terms of our customer contracts, the customer pays at periodic intervals (i.e., every 14 days, 30 days, 45 days, etc.) for shipments included on invoices received. Invoices are generated each week on the week-ending day, which is Saturday for the majority of our U.S. Domestic Package business, but could be another day depending on the business unit or the specific agreement with the customer. It is not customary business practice to extend payment terms past 90 days, and as such, we do not have a practice of including a significant financing component within our revenue contracts with customers. Principal vs. Agent Considerations In our transportation businesses, we utilize independent contractors and third-party carriers in the performance of some transportation services. U.S. GAAP requires us to evaluate whether our businesses themselves promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent) using a control model. Based on our evaluation of the control model, we determined that all of our major businesses act as the principal rather than the agent within their revenue arrangements. This required a change for certain of our Supply Chain & Freight businesses where previously revenue was reported net of associated purchased transportation costs. Revenue and the associated purchased transportation costs are now both reported on a gross basis within our statements of consolidated income. Accounts Receivable, Net Accounts receivable, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. Losses on accounts receivable are recognized when they are incurred, which requires us to make our best estimate of the probable losses inherent in our customer receivables at each balance sheet date. These estimates require consideration of historical loss experience, adjusted for current conditions, trends in customer payment frequency, and judgments about the probable effects of relevant observable data, including present economic conditions and the financial health of specific customers and market sectors. Our risk management process includes standards and policies for reviewing major account exposures and concentrations of risk. Our total provision for doubtful accounts charged to expense before recoveries during the quarters ended June 30, 2018 and 2017 was $29 and $24 million , respectively and $41 and $63 million during six months ended June 30, 2018 and 2017, respectively. Contract Assets and Liabilities Contract assets include billed and unbilled amounts resulting from in-transit packages, as we have an unconditional right to payment only once all performance obligations have been completed (i.e., packages have been delivered), and our right to payment is not solely based on the passage of time. Amounts may not exceed their net realizable value. Contract assets are generally classified as current and the full balance is converted each quarter based on the short-term nature of the transactions. Our contract liabilities consist of advance payments and billings in excess of revenue as well as deferred revenue. Advance payments and billings in excess of revenue represent payments received from our customers that will be earned over the contract term. Deferred revenue represents the amount of consideration due from customers related to in-transit shipments that has not yet been recognized as revenue based on our selected measure of progress. We classify advance payments and billings in excess of revenue as either current or long-term, depending on the period over which the advance payment will be earned. We classify deferred revenue as current based on the timing of when we expect to recognize revenue, which typically occurs within a short window after period-end. The full balance of deferred revenue is converted each quarter based on the short-term nature of the transactions. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. In order to determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that deferred revenue balance. Contract assets related to in-transit packages were $248 and $170 million at June 30, 2018 and December 31, 2017, respectively, net of deferred revenue related to in-transit packages of $231 and $174 million at June 30, 2018 and December 31, 2017, respectively. Contract assets are included within "Other current assets" in the consolidated balance sheets. Short-term contract liabilities related to advanced payments from customers were $8 and $31 million at June 30, 2018 and December 31, 2017, respectively. Short-term contract liabilities are included within "Other current liabilities" in the consolidated balance sheets. Long-term contract liabilities related to advanced payments from customers were $26 million at June 30, 2018 and $0 at December 31, 2017, respectively. Long-term contract liabilities are included within "Other Non-Current liabilities" in the consolidated balance sheets. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION We issue employee share-based awards under the UPS Incentive Compensation Plan, which permits the grant of non-qualified and incentive stock options, stock appreciation rights, restricted stock and stock units, and restricted performance shares and performance units to eligible employees (restricted stock and stock units, restricted performance shares and performance units are herein referred to as "Restricted Units"). Upon vesting, Restricted Units result in the issuance of the equivalent number of UPS class A common shares after required tax withholdings. Dividends accrued on Restricted Units are reinvested in additional Restricted Units at each dividend payable date, and are subject to the same vesting and forfeiture conditions as the underlying Restricted Units upon which they are earned. The primary compensation programs offered under the UPS Incentive Compensation Plan include the UPS Management Incentive Award program, the UPS Long-Term Incentive Performance Award program and the UPS Stock Option program. We also maintain an employee stock purchase plan which allows eligible employees to purchase shares of UPS class A common stock at a discount. Additionally, our matching contributions to the primary employee defined contribution savings plan are made in shares of UPS class A common stock. Management Incentive Award Program ("MIP") During the first quarter of 2018 , 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 or disability, 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 (except in the case of death, disability or retirement, in which case immediate expensing occurs). Based on the date that the eligible management population and performance targets were approved for MIP, we determined the award measurement date to be February 7, 2018 (for U.S.-based employees), March 1, 2018 (for management committee employees) and March 26, 2018 (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 $111.91 , $106.43 and $103.70 on those dates, respectively. Long-Term Incentive Performance Award Program ("LTIP") We award Restricted Units under LTIP to certain eligible management employees. The performance targets are equally-weighted among consolidated operating return on invested capital ("ROIC"), growth in currency-constant consolidated revenue and total shareowner return ("RTSR") relative to a peer group of companies. These Restricted Units generally vest at the end of a three -year period (except in the case of death, disability or retirement, in which case immediate vesting occurs on a prorated basis). The number of Restricted Units earned will be based on the percentage achievement of the performance targets established on the grant date. For the two-thirds of the award related to ROIC and growth in currency-constant consolidated revenue, we recognize the grant date fair value of these Restricted Units (less estimated forfeitures) as compensation expense ratably over the vesting period, based on the number of awards expected to be earned. The remaining one-third of the award related to RTSR is valued using a Monte Carlo model. We recognize the grant date fair value of this portion of the award as compensation expense (less estimated forfeitures) ratably over the vesting period. Based on the date that the eligible management population and performance targets were approved for the 2018 LTIP Award, we determined the award measurement date to be May 9, 2018; therefore, the target Restricted Units awarded for the ROIC and growth in currency-constant consolidated revenue portions of the award were valued for stock compensation expense using the closing New York Stock Exchange price of $111.40 on that date. The weighted-average assumptions used and the calculated weighted-average fair values of the RTSR portion of the LTIP awards granted in 2018 and 2017 are as follows: 2018 2017 Risk-free interest rate 2.61 % 1.46 % Expected volatility 16.51 % 16.59 % Weighted-average fair value of units granted $ 137.53 $ 119.29 Share payout 123.46 % 113.55 % There is no expected dividend yield as units earn dividend equivalents. Non-Qualified Stock Options During the first quarter of 2018 , we granted non-qualified stock option awards to a limited group of eligible senior management employees under the UPS Stock Option program. Stock option awards generally vest over a five -year period with approximately 20% of the award vesting at each anniversary date of the grant (except in the case of death or disability, in which case immediate vesting occurs). The options granted will expire ten years after the date of the grant. In the first quarter of 2018 , we granted 0.3 and 0.01 million stock options at a grant price of $106.43 and $104.45 , respectively, which is based on the closing New York Stock Exchange price on March 1, 2018 and March 22, 2018, respectively. In the first quarter of 2017, we granted 0.3 million stock options at a grant price of $ 106.87 , which is based on the closing New York Stock Exchange price on March 1, 2017. The fair value of each option grant is estimated using the Black-Scholes option pricing model. The weighted-average assumptions used and the calculated weighted-average fair values of options granted in 2018 and 2017 are as follows: 2018 2017 Expected dividend yield 2.93 % 2.89 % Risk-free interest rate 2.84 % 2.15 % Expected life (in years) 7.5 7.5 Expected volatility 16.72 % 17.81 % Weighted-average fair value of options granted $ 15.23 $ 14.70 Compensation expense for share-based awards recognized in "Compensation and benefits" on the statements of consolidated income for the three months ended June 30, 2018 and 2017 was $ 139 and $ 133 million, respectively. |
INVESTMENTS AND RESTRICTED CASH
INVESTMENTS AND RESTRICTED CASH | 6 Months Ended |
Jun. 30, 2018 | |
Marketable Securities [Abstract] | |
INVESTMENTS AND RESTRICTED CASH | CASH AND INVESTMENTS The following is a summary of marketable securities classified as trading and available-for-sale as of June 30, 2018 and December 31, 2017 (in millions): Cost Unrealized Gains Unrealized Losses Estimated Fair Value June 30, 2018: Current trading marketable securities: Corporate debt securities $ 75 $ — $ — $ 75 Equity securities 2 — — 2 Total trading marketable securities 77 — — 77 Current available-for-sale securities: U.S. government and agency debt securities 306 1 (4 ) 303 Mortgage and asset-backed debt securities 86 — (1 ) 85 Corporate debt securities 243 — (2 ) 241 Non-U.S. government debt securities 14 — — 14 Total available-for-sale marketable securities 649 1 (7 ) 643 Total current marketable securities $ 726 $ 1 $ (7 ) $ 720 Cost Unrealized Gains Unrealized Losses Estimated Fair Value December 31, 2017: Current trading marketable securities: Corporate debt securities $ 75 $ — $ — $ 75 Carbon credit investments (1) 77 16 — 93 Total trading marketable securities 152 16 — 168 Current available-for-sale securities: U.S. government and agency debt securities 286 — (3 ) 283 Mortgage and asset-backed debt securities 86 — — 86 Corporate debt securities 201 1 (1 ) 201 Equity securities 2 — — 2 Non-U.S. government debt securities 9 — — 9 Total available-for-sale marketable securities 584 1 (4 ) 581 Total current marketable securities $ 736 $ 17 $ (4 ) $ 749 (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 June 30, 2018 . In making this determination, we considered the financial condition and prospects of the issuer, the magnitude of the losses compared with the investments’ cost, the probability that we will be unable to collect all amounts due according to the contractual terms of the security, the credit rating of the security and our ability and intent to hold these investments until the anticipated recovery in market value occurs. Maturity Information The amortized cost and estimated fair value of marketable securities at June 30, 2018 , 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 $ 193 $ 193 Due after one year through three years 434 430 Due after three years through five years 24 23 Due after five years 73 72 724 718 Equity securities 2 2 $ 726 $ 720 Non-Current Investments and Restricted Cash Non-current investments and restricted cash is primarily associated with our self-insurance requirements. We entered into an escrow agreement with an insurance carrier to guarantee our self-insurance obligations. This agreement requires us to provide collateral to the insurance carrier, which is invested in various marketable securities and cash equivalents. Collateral provided is reflected in "Cash, Cash Equivalents and Restricted Cash" in the statements of consolidated cash flows. At June 30, 2018 and December 31, 2017 , we had $ 277 and $ 449 million in self-insurance investments and restricted cash, respectively. We held a $19 million investment in a variable life insurance policy to fund benefits for the UPS Excess Coordinating Benefit Plan at June 30, 2018 and December 31, 2017 . The quarterly change in investment fair value is recognized in "Investment income and other" on the statements of consolidated income. Additionally, we held escrowed cash related to the acquisition and disposition of certain assets, primarily real estate, of $10 and $ 15 million as of June 30, 2018 and December 31, 2017 , respectively. The amounts described above are classified as “Non-Current Investments and Restricted Cash” in the consolidated balance sheets. A reconciliation of cash and cash equivalents and restricted cash from the consolidated balance sheets to the statements of consolidated cash flows is shown below (in millions): June 30, 2018 December 31, 2017 June 30, 2017 Cash and cash equivalents $ 4,214 $ 3,320 $ 3,544 Restricted cash 277 449 447 Total cash, cash equivalents and restricted cash $ 4,491 $ 3,769 $ 3,991 Fair Value Measurements Marketable securities utilizing Level 1 inputs include active exchange-traded equity securities and equity index funds, and most U.S. government debt securities, as these securities all have quoted prices in active markets. Marketable securities utilizing Level 2 inputs include asset-backed securities, corporate bonds and municipal bonds. These securities are valued using market corroborated pricing, matrix pricing or other models that utilize observable inputs such as yield curves. We maintain holdings in certain investment partnerships that are measured at fair value utilizing Level 3 inputs (classified as “Other non-current investments” in the tables below, and as “Other Non-Current Assets” in the consolidated balance sheets). These partnership holdings do not have quoted prices, nor can they be valued using inputs based on observable market data. These investments are valued internally using a discounted cash flow model with two significant inputs: (1) the after-tax cash flow projections for each partnership, and (2) a risk-adjusted discount rate consistent with the duration of the expected cash flows for each partnership. The weighted-average discount rates used to value these investments were 8.11% and 7.56% as of June 30, 2018 and December 31, 2017 , respectively. These inputs, and the resulting fair values, are updated on a quarterly basis. The level 3 instruments measured on a recurring basis totaled $2 and $6 million as of June 30, 2018 and December 31, 2017 , respectively. The following table presents information about our investments measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017 , 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 June 30, 2018: Marketable Securities: U.S. government and agency debt securities $ 303 $ — $ — $ 303 Mortgage and asset-backed debt securities — 85 — 85 Corporate debt securities — 316 — 316 Equity securities — 2 — 2 Non-U.S. government debt securities — 14 — 14 Total marketable securities 303 417 — 720 Other non-current investments 19 — 2 21 Total $ 322 $ 417 $ 2 $ 741 December 31, 2017: Marketable Securities: U.S. government and agency debt securities $ 283 $ — $ — $ 283 Mortgage and asset-backed debt securities 86 — 86 Corporate debt securities — 276 — 276 Equity securities — 2 — 2 Non-U.S. government debt securities — 9 — 9 Carbon credit investments 93 — — 93 Total marketable securities 376 373 — 749 Other non-current investments 19 — 6 25 Total $ 395 $ 373 $ 6 $ 774 There were no transfers of investments between Level 1 and Level 2 during the three and six months ended June 30, 2018 and 2017 . |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of June 30, 2018 and December 31, 2017 consists of the following (in millions): 2018 2017 Vehicles $ 9,435 $ 9,365 Aircraft 16,811 16,248 Land 1,777 1,582 Buildings 4,195 4,035 Building and leasehold improvements 4,114 3,934 Plant equipment 9,952 9,387 Technology equipment 2,001 1,907 Equipment under operating leases — 29 Construction-in-progress 2,915 2,239 51,200 48,726 Less: Accumulated depreciation and amortization (27,299 ) (26,608 ) $ 23,901 $ 22,118 We continually monitor our aircraft fleet utilization in light of current and projected volume levels, aircraft fuel prices and other factors. Additionally, we monitor all other property, plant and equipment categories for any indicators that the carrying value of the assets may not be recoverable. No impairment charges on property, plant and equipment were recorded during the three and six months ended June 30, 2018 and 2017 . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [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 six months ended June 30, 2018 and 2017 (in millions): U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2018 2017 2018 2017 2018 2017 Three Months Ended June 30: Service cost $ 415 $ 389 $ 7 $ 7 $ 16 $ 14 Interest cost 450 462 26 28 11 10 Expected return on assets (800 ) (712 ) (2 ) (1 ) (19 ) (16 ) Amortization of prior service cost 48 48 2 2 — — Net periodic benefit cost $ 113 $ 187 $ 33 $ 36 $ 8 $ 8 U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2018 2017 2018 2017 2018 2017 Six Months Ended June 30: Service cost $ 831 $ 779 $ 14 $ 14 $ 32 $ 29 Interest cost 899 924 52 56 23 20 Expected return on assets (1,601 ) (1,424 ) (4 ) (3 ) (39 ) (32 ) Amortization of prior service cost 97 96 4 4 — — Net periodic benefit cost $ 226 $ 375 $ 66 $ 71 $ 16 $ 17 During the first six months of 2018 , we contributed $ 50 and $42 million to our company-sponsored pension and U.S. postretirement medical benefit plans, respectively. We currently expect to contribute $48 and $37 million over the remainder of the year to the pension and U.S. postretirement medical benefit plans, respectively. Subject to market conditions, we continually evaluate opportunities for additional discretionary pension contributions. The components of net periodic benefit cost other than current service cost are presented within “Investment income and other” in the statements of consolidated income. Plan Amendments and Curtailments In the quarter ended June 30, 2017, we amended the UPS Retirement Plan and the UPS Excess Coordinating Benefit Plan to cease accruals of additional benefits for future service and compensation for non-union participants effective January 1, 2023. We remeasured plan assets and pension benefit obligations for the affected pension plans as of June 30, 2017, resulting in a net actuarial gain of $569 million. This reflected a curtailment gain of $1.525 billion resulting from the benefit plan changes that was partially offset by net actuarial losses of $956 million, driven by a reduction of approximately 32 basis points in the discount rate compared to December 31, 2016, offset by actual assets returns approximately 275 basis points above our expected return as of the remeasurement date. The net curtailment gain reduced the actuarial loss recorded in "Accumulated other comprehensive loss" in the equity section of the consolidated balance sheets. As actuarial losses were within the corridor (defined as 10% of the greater of the fair value of plan assets and the plan's projected benefit obligation), there was no impact to the statements of consolidated income as a result of this remeasurement. Effective June 23, 2017, the Company amended the UPS 401(k) Savings Plan so that non-union employees who currently participate in the UPS Retirement Plan will, in addition to current benefits under the UPS 401(k) Savings Plan, earn a UPS Retirement Contribution beginning January 1, 2023. UPS will contribute 5% to 8% of eligible compensation to the UPS 401(k) Savings Plan based on years of vesting service. The amendment also provides for transition contributions for certain participants. There was no impact to the statements of consolidated income for the three and six months ended June 30, 2018 as a result of the above changes. Multiemployer Benefit Plans We contribute to a number of multiemployer defined benefit and health and welfare plans under the terms of collective bargaining agreements that cover our union-represented employees. Our current collective bargaining agreements set forth the annual contribution increases allotted to the plans that we participate in, and we are in compliance with these contribution rates. These limitations on annual contribution rates will remain in effect throughout the terms of the existing collective bargaining agreements. As of June 30, 2018 and December 31, 2017 we had $ 856 and $859 million , respectively, recorded in "Other non-current liabilities" as well as $8 million as of June 30, 2018 and December 31, 2017 , recorded in "Other current liabilities" on our consolidated balance sheets associated with our previous withdrawal from a multiemployer pension plan. This liability is payable in equal monthly installments over a remaining term of approximately 44 years. Based on the borrowing rates currently available to us for long-term financing of a similar maturity, the fair value of this withdrawal liability as of June 30, 2018 and December 31, 2017 was $ 841 and $ 921 million , respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of this liability. UPS was a contributing employer to the Central States Pension Fund (“CSPF”) until 2007 when we withdrew from the plan and fully funded our allocable share of unfunded vested benefits by paying a $6.1 billion withdrawal liability. Under a collective bargaining agreement with the International Brotherhood of Teamsters (“IBT”), UPS agreed to provide coordinating benefits in the UPS/IBT Full Time Employee Pension Plan (“UPS/IBT Plan”) for UPS participants whose last employer was UPS and who had not retired as of January 1, 2008 (“the UPS Transfer Group”) in the event that benefits are lawfully reduced by the CSPF in the future consistent with the terms of our withdrawal agreement with the CSPF. In December 2014, Congress passed the Multiemployer Pension Reform Act (“MPRA”), which for the first time ever allowed multiemployer pension plans to reduce benefit payments to retirees, subject to specific guidelines in the statute and government approval. In September 2015, the CSPF submitted a proposed pension benefit reduction plan to the U.S. Department of the Treasury under the MPRA. The CSPF plan proposed to reduce retirement benefits to the CSPF participants, including the UPS Transfer Group. We vigorously challenged the proposed benefit reduction plan because we believed that it did not comply with the law and that the CSPF failed to comply with its contractual obligation to obtain our consent to reduce benefits to the UPS Transfer Group under the terms of the withdrawal agreement with the CSPF. On May 6, 2016, the U.S. Department of the Treasury rejected the proposed plan submitted by the CSPF, stating that it failed to satisfy a number of requirements set forth in the MPRA. The CSPF has asserted that it will become insolvent in 2025 which could lead to the reduction of retirement benefits. Although there are numerous factors that could affect the CSPF’s funding status, if the CSPF were to become insolvent as they have projected, UPS may be required to provide coordinating benefits, thereby increasing the current projected benefit obligation for the UPS/IBT Plan by approximately $4 billion . The CSPF has said that it believes a legislative solution to its funding status is necessary, and we expect that the CSPF will continue to explore options to avoid insolvency. The potential obligation to pay coordinating benefits from the UPS/IBT Plan is subject to a number of significant uncertainties, including actions that may be taken by the CSPF, the federal government or others. These actions include whether the CSPF will submit a revised pension benefit reduction plan or otherwise seek federal government assistance, the extent to which benefits are paid by the Pension Benefit Guaranty Corporation and our ability to successfully defend our legal positions, as well as the effect of discount rates and various other actuarial assumptions. We account for this potential obligation under Accounting Standards Codification Topic 715- Compensation- Retirement Benefits (“ASC 715”). Under ASC 715 we are required to provide a best estimate of various actuarial assumptions, including the eventual outcome of this matter, in measuring our pension benefit obligation at the December 31st measurement date. While we currently believe the most likely solution to this matter and the broader systemic problems facing multiemployer pension plans is intervention by the federal government, ASC 715 does not permit anticipation of changes in law in making a best estimate of pension liabilities. Our best estimate as of the measurement date of December 31, 2017 did not incorporate this solution. However, if a future change in law resulted in an obligation to provide coordinating benefits under the UPS/IBT Plan, it may be a significant event, and may require us to remeasure the plan assets and projected benefit obligation of the UPS/IBT Plan at the date the law is enacted. Our best estimate of the next most likely outcome to resolve the CSPF’s solvency concerns is that the CSPF will submit another MPRA filing to forestall insolvency without reducing benefits to the UPS Transfer Group. If the CSPF attempts to reduce benefits for the UPS Transfer Group under a MPRA filing, we would be in a strong legal position to prevent that from occurring given that these benefits cannot be reduced without our consent and such a reduction, without first exhausting reductions to other groups in the CSPF, would be contrary to the statute. Accordingly, our best estimate as of the measurement date of December 31, 2017, was that there is no liability to be recognized for additional coordinating benefits of the UPS/IBT Plan. However, the projected benefit obligation could materially increase as the uncertainties are resolved. We will continue to assess the impact of these uncertainties on the projected benefit obligation of the UPS/IBT Plan in accordance with ASC 715. Collective Bargaining Agreements As of December 31, 2017, we had approximately 280,000 employees employed under a national master agreement and various supplemental agreements with local unions affiliated with the Teamsters. These agreements ran through July 31, 2018. We reached tentative agreements with the Teamsters on two new five-year contracts in the U.S. Domestic Package and UPS Freight business units on June 21, 2018 and on July 13, 2018, respectively, while several local U.S. Domestic Package supplemental agreements require additional negotiation and approval before ratification occurs. We are in the process of ratifying the new national master agreements and negotiating and ratifying the related supplemental agreements, all of which will be retroactively effective as of August 1, 2018. As of the date of this filing, there can be no assurance that our efforts will be successful or that the ultimate resolution of these matters will not adversely affect our business, financial position, results of operations or liquidity. We have approximately 2,700 pilots who are employed under a collective bargaining agreement with the Independent Pilots Association ("IPA"), which runs through September 1, 2021. Our airline mechanics are covered by a collective bargaining agreement with Teamsters Local 2727, which became amendable November 1, 2013. We are currently in negotiations with Teamsters Local 2727. In addition, approximately 3,100 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 | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 and December 31, 2017 (in millions): U.S. Domestic Package International Package Supply Chain & Freight Consolidated December 31, 2017: $ 715 $ 435 $ 2,722 $ 3,872 Acquired — — — — Currency / Other — (11 ) (24 ) (35 ) June 30, 2018: $ 715 $ 424 $ 2,698 $ 3,837 The change in goodwill for both the International Package and Supply Chain & Freight segments was primarily due to the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. Dollar goodwill balances. The following is a summary of intangible assets as of June 30, 2018 and December 31, 2017 (in millions): Gross Carrying Amount Accumulated Amortization Net Carrying Value June 30, 2018: Capitalized software $ 3,507 $ (2,404 ) $ 1,103 Licenses 115 (23 ) 92 Franchise rights 145 (101 ) 44 Customer relationships 741 (182 ) 559 Trade name 200 — 200 Trademarks, patents and other 55 (25 ) 30 Total Intangible Assets, Net $ 4,763 $ (2,735 ) $ 2,028 December 31, 2017: Capitalized software $ 3,273 $ (2,310 ) $ 963 Licenses 114 (10 ) 104 Franchise rights 144 (97 ) 47 Customer relationships 776 (160 ) 616 Trade name 200 — 200 Trademarks, patents and other 71 (37 ) 34 Total Intangible Assets, Net $ 4,578 $ (2,614 ) $ 1,964 As of June 30, 2018 , we had a trade name with a carrying value of $ 200 million and licenses with a carrying value of $ 5 million, which are deemed to be indefinite-lived intangible assets and are included in the table above. Impairment tests for the finite-lived intangible assets are only performed when a triggering event occurs that may indicate that the carrying value of the intangible may not be recoverable. There was a $12 million impairment of a finite-lived asset in the second quarter of 2018. |
DEBT AND FINANCING ARRANGEMENTS
DEBT AND FINANCING ARRANGEMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
DEBT AND FINANCING ARRANGEMENTS | DEBT AND FINANCING ARRANGEMENTS The carrying value of our outstanding debt as of June 30, 2018 and December 31, 2017 consists of the following (in millions): Principal Amount Carrying Value Maturity 2018 2017 Commercial paper $ 2,530 2018 - 2019 $ 2,530 $ 3,203 Fixed-rate senior notes: 5.500% senior notes 750 2018 — 751 5.125% senior notes 1,000 2019 1,007 1,019 3.125% senior notes 1,500 2021 1,516 1,549 2.050% senior notes 700 2021 697 696 2.450% senior notes 1,000 2022 956 979 2.350% senior notes 600 2022 597 597 2.500% senior note 1,000 2023 993 992 2.800% senior note 500 2024 496 495 2.400% senior note 500 2026 497 497 3.050% senior note 1,000 2027 991 990 6.200% senior notes 1,500 2038 1,482 1,482 4.875% senior notes 500 2040 490 489 3.625% senior notes 375 2042 368 368 3.400% senior notes 500 2046 491 491 3.750 % senior notes 1,150 2047 1,136 1,135 Floating-rate senior notes: Floating-rate senior notes 350 2021 348 348 Floating-rate senior notes 400 2022 398 398 Floating-rate senior notes 500 2023 499 496 Floating-rate senior notes 1,043 2049-2067 1,030 1,032 8.375% Debentures: 8.375% debentures 424 2020 436 447 8.375% debentures 276 2030 281 282 Pound Sterling notes: 5.500% notes 88 2031 87 84 5.125% notes 600 2050 566 586 Euro senior notes: 0.375% notes 816 2023 810 832 1.625% notes 816 2025 811 833 1.000% notes 583 2028 579 595 1.500% notes 583 2032 578 594 Floating-rate senior notes 583 2020 581 598 Canadian senior notes: 2.125% notes 566 2024 563 593 Capital lease obligations 563 2018-3005 563 500 Facility notes and bonds 320 2029-2045 321 319 Other debt 13 2018-2022 13 19 Total debt $ 23,629 22,711 24,289 Less: Current maturities (2,591 ) (4,011 ) Long-term debt $ 20,120 $ 20,278 Commercial Paper We are authorized to borrow up to $ 10.0 billion under a U.S. commercial paper program and € 5.0 billion (in a variety of currencies) under a European commercial paper program. We had the following amounts outstanding under these programs as of June 30, 2018 : $ 2.343 billion with an average interest rate of 1.88% and € 160 million ($ 187 million) with an average interest rate of - 0.41% . As of June 30, 2018 , we have classified the entire commercial paper balance as a current liability on our consolidated balance sheets. Debt Classification We have classified our 5.125% senior notes due April 2019 with a principal balance of $1.0 billion as long-term debt based on our intent and ability to refinance the debt as of June 30, 2018. We have classified certain floating-rate senior notes that are putable by the note holders as long-term debt, due to our intent and ability to refinance the debt if the put option is exercised by the note holders. Debt Repayments On January 15, 2018, our $ 750 million 5.500% senior notes matured and were repaid in full. Sources of Credit We maintain two credit agreements with a consortium of banks. One of these agreements provides revolving credit facilities of $4.5 billion, and expires on March 22, 2019 . 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 June 30, 2018 . The second agreement provides revolving credit facilities of $ 3.0 billion, and expires on March 24, 2022 . Generally, amounts outstanding under this facility bear interest at a periodic fixed rate equal to LIBOR for the applicable interest period and currency denomination, plus an applicable margin. Alternatively, a fluctuating rate of interest equal to the highest of (1) JPMorgan Chase Bank’s publicly announced prime rate; (2) the Federal Funds effective rate plus 0.50% ; and (3) LIBOR for a one month interest period plus 1.00% , plus an applicable margin, may be used at our discretion. In each case, the applicable margin for advances bearing interest based on LIBOR is a percentage determined by quotations from Markit Group Ltd. for our 1-year credit default swap spread, interpolated for a period from the date of determination of such credit default swap spread in connection with a new interest period until the latest maturity date of this facility then in effect (but not less than a period of one year). The minimum applicable margin rate is 0.10% and the maximum applicable margin rate is 0.75% per annum. The applicable margin for advances bearing interest based on the prime rate is 1.00% below the applicable margin for LIBOR advances (but not less than 0.00% ). We are also able to request advances under this facility based on competitive bids. There were no amounts outstanding under this facility as of June 30, 2018 . Debt Covenants Our existing debt instruments and credit facilities subject us to certain financial covenants. As of June 30, 2018 and for all prior periods presented, we have satisfied these financial covenants. These covenants limit the amount of secured indebtedness that we may incur, and limit the amount of attributable debt in sale-leaseback transactions, to 10% of net tangible assets. As of June 30, 2018 , 10% of net tangible assets was equivalent to $2.787 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 debt with similar terms and maturities, the fair value of long-term debt, including current maturities, was approximately $ 23.405 and $ 25.206 billion as of June 30, 2018 and December 31, 2017 , respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of all of our debt instruments. |
LEGAL PROCEEDINGS AND CONTINGEN
LEGAL PROCEEDINGS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS AND CONTINGENCIES | LEGAL PROCEEDINGS AND CONTINGENCIES We are involved in a number of judicial proceedings and other matters arising from the conduct of our business activities. Although there can be no assurance as to the ultimate outcome, we have generally denied, or believe we have a meritorious defense and will deny, liability in all litigation pending against us, including (except as otherwise noted herein) the matters described below, and we intend to defend vigorously each case. We have accrued for legal claims when, and to the extent that, amounts associated with the claims become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts accrued for those claims. For those matters as to which we are not able to estimate a possible loss or range of loss, we are not able to determine whether the loss will have a material adverse effect on our business, financial condition or results of operations or liquidity. For matters in this category, we have indicated in the descriptions that follow the reasons that we are unable to estimate the possible loss or range of loss. Judicial Proceedings We are a defendant in a number of lawsuits filed in state and federal courts containing various class action allegations under state wage-and-hour laws. At this time, we do not believe that any loss associated with these matters would have a material adverse effect on our financial condition, results of operations or liquidity. UPS and our subsidiary The UPS Store, Inc. are defendants in Morgate v. The UPS Store, Inc. et al., an action in the Los Angeles Superior Court brought on behalf of a certified class of all franchisees who chose to rebrand their Mail Boxes Etc. franchises to The UPS Store in March 2003. Plaintiff alleges that UPS and The UPS Store, Inc. misrepresented and omitted facts to the class about the market tests that were conducted before offering the class the choice of whether to rebrand to The UPS Store. Defendants’ motion to decertify the class was granted in August 2017. The plaintiff has filed a notice of appeal, and further proceedings in the trial court are stayed pending resolution by the California Court of Appeal. In May 2018, we reached an agreement to resolve the case for an immaterial amount. Final resolution of this matter is subject to court approval. We are a defendant in Ryan Wright and Julia Zislin v. United Parcel Service Canada Ltd., an action brought on behalf of a certified class of customers in the Superior Court of Justice in Ontario, Canada. Plaintiffs filed suit in February 2007, alleging inadequate disclosure concerning the existence and cost of brokerage services provided by us under applicable provincial consumer protection legislation and infringement of interest restriction provisions under the Criminal Code of Canada. Partial summary judgment was granted to us and the plaintiffs by the Ontario motions court in August 2011, when it dismissed plaintiffs' complaint under the Criminal Code and granted plaintiffs' complaint of inadequate disclosure. We appealed the Court's decision pertaining to inadequate disclosure in September 2011. In June 2018, we reached an agreement to resolve the case for an immaterial amount. Final resolution of this matter is subject to court approval. In February 2015, the State and City of New York filed suit against UPS in the U.S. District Court for the Southern District of New York, arising from alleged shipments of cigarettes to New York State and City residents. The complaint asserted claims under various federal and state laws. The complaint also included a claim that UPS violated the Assurance of Discontinuance it entered into with the New York Attorney General in 2005 concerning cigarette deliveries. On March 24, 2017, the District Court issued an opinion and order finding liability against UPS on each of the plaintiffs’ causes of action. On May 25, 2017, the District Court issued a corrected opinion and order on liability and an order awarding the plaintiffs damages of $ 9.4 million and penalties of $ 237.6 million. An accrual of $ 9.4 million with respect to the damages awarded by the court is included on our consolidated balance sheets at June 30, 2018 . We estimate that the amount of losses could be up to $ 247 million, plus interest; however, the amount of penalties ultimately payable, if any, is subject to a variety of complex factors and potential outcomes that remain to be determined in future legal proceedings. Consequently, we are unable to reasonably estimate a likely amount of loss within that range. We strongly disagree with the District Court’s analysis and conclusions, and have appealed to the United States Court of Appeals for the Second Circuit. The briefing is now complete and we expect oral argument will be scheduled during 2018. Other Matters In October 2015, the DOJ informed us of an industry-wide inquiry into the transportation of mail under the United States Postal Service ("USPS") International Commercial Air contracts. In October 2017, we received a Civil Investigative Demand seeking certain information relating to our contracts. The DOJ has indicated it is investigating potential violations of the False Claims Act or other statutes. We are cooperating with the DOJ. We are unable to predict what action, if any, might be taken in the future by any government authorities as a result of their investigation. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. In August 2016, Spain’s National Markets and Competition Commission (“CNMC”) announced an investigation into 10 companies in the commercial delivery and parcel industry, including UPS, related to alleged agreements to allocate customers. In May 2017, UPS received a Statement of Objections issued by the CNMC. In July 2017, UPS received a Proposed Decision from the CNMC. On March 8, 2018, the CNMC adopted a final decision, finding an infringement and imposing a fine on UPS of € 19.2 million. In May 2018, UPS applied for a suspension of the implementation of the decision (including payment of the fine) and appealed the decision on the merits. The appeal is pending.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 2018 the Turkish competition authority (“Authority”) opened an investigation into nine companies (including UPS) in the small package industry related to alleged customer allocations in violation of Turkish competition law. In April 2018, the Authority consolidated this investigation with two other investigations involving similar allegations. The consolidated investigation involves a total of 32 companies, including UPS. The investigation is in its early stages. There are multiple factors that prevent us from being able to estimate the amount of loss, if any, that may result from this matter, including: (1) we are vigorously defending ourselves and believe that we have a number of meritorious legal defenses; and (2) there are unresolved questions of law and fact that could be important to the ultimate resolution of this matter. Accordingly, at this time, we are not able to estimate a possible loss or range of loss that may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial condition, results of operations or liquidity. We are a defendant in various other lawsuits that arose in the normal course of business. We do not believe that the eventual resolution of these other lawsuits (either individually or in the aggregate), including any reasonably possible losses in excess of current accruals, will have a material adverse effect on our financial condition, results of operations or liquidity. |
SHAREOWNERS' EQUITY
SHAREOWNERS' EQUITY | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018 , 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 June 30, 2018 , 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 six months ended June 30, 2018 and 2017 (in millions, except per share amounts): 2018 2017 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 173 $ 2 180 $ 2 Common stock purchases (2 ) — (2 ) — Stock award plans 3 — 4 — Common stock issuances 2 — 1 — Conversions of class A to class B common stock (8 ) — (5 ) — Class A shares issued at end of period 168 $ 2 178 $ 2 Class B Common Stock Balance at beginning of period 687 $ 7 689 $ 7 Common stock purchases (2 ) — (6 ) — Conversions of class A to class B common stock 8 — 5 — Class B shares issued at end of period 693 $ 7 688 $ 7 Additional Paid-In Capital Balance at beginning of period $ — $ — Stock award plans 170 157 Common stock purchases (383 ) (412 ) Common stock issuances 232 203 Option premiums received (paid) (19 ) 52 Balance at end of period $ — $ — Retained Earnings Balance at beginning of period $ 5,852 $ 4,880 Net income attributable to common shareowners 2,830 2,550 Dividends ($1.82 and $1.66 per share) (1,624 ) (1,495 ) Common stock purchases (128 ) (489 ) Reclassification from AOCI pursuant to the early adoption of ASU 2018-02 735 — Balance at end of period $ 7,665 $ 5,446 We repurchased 4.4 million shares of class A and class B common stock for $511 million during the six months ended June 30, 2018 , and 8.4 million shares for $901 million during the six months ended June 30, 2017 . In May 2016, the Board of Directors approved a share repurchase authorization of $8.0 billion, which has no expiration date. As of June 30, 2018 , we had $3.828 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 second quarter of 2018, we did not enter into any accelerated share repurchase transactions. In order to lower the average cost of acquiring shares in our ongoing share repurchase program, we periodically enter into structured repurchase agreements involving the use of capped call options for the purchase of UPS class B shares. We pay a fixed sum of cash upon execution of each agreement in exchange for the right to receive either a pre-determined amount of cash or stock. Upon expiration of each agreement, if the closing market price of our common stock is above the pre-determined price, we will have our initial investment returned with a premium in either cash or shares (at our election). If the closing market price of our common stock is at or below the pre-determined price, we will receive the number of shares specified in the agreement. We paid net premiums of $19 million during the first six months of 2018 and received $52 million during the first six months 2017 , related to entering into and settling capped call options for the purchase of class B shares. As of June 30, 2018 , we had outstanding options for the purchase of 0.7 million shares with a weighted average strike price of $99.98 per share that will settle during 2018. Accumulated Other Comprehensive Income (Loss) We recognize activity in AOCI for unrealized holding gains and losses on available-for-sale securities, foreign currency translation adjustments, unrealized gains and losses from derivatives that qualify as hedges of cash flows and unrecognized pension and postretirement benefit costs. Additionally, effective January 1, 2018, we early adopted an ASU that allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Act (see note 2 for further information). The activity in AOCI for the six months ended June 30, 2018 and 2017 is as follows (in millions): 2018 2017 Foreign currency translation gain (loss), net of tax: Balance at beginning of period $ (930 ) $ (1,016 ) Translation adjustment (net of tax effect of $25 and $(93)) (84 ) 54 Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 (47 ) — Balance at end of period (1,061 ) (962 ) Unrealized gain (loss) on marketable securities, net of tax: Balance at beginning of period (2 ) (1 ) Current period changes in fair value (net of tax effect of $(1) and $0) (4 ) 1 Reclassification to earnings (net of tax effect of $1 and $0) 1 — Balance at end of period (5 ) — Unrealized gain (loss) on cash flow hedges, net of tax: Balance at beginning of period (366 ) (45 ) Current period changes in fair value (net of tax effect of $67 and $(109)) 210 (181 ) Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 (79 ) — Reclassification to earnings (net of tax effect of $18 and $(7)) 56 (11 ) Balance at end of period (179 ) (237 ) Unrecognized pension and postretirement benefit costs, net of tax: Balance at beginning of period (3,569 ) (3,421 ) Remeasurement of plan assets and liabilities (net of tax effect of $0 and $214) (1) — 355 Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 (609 ) — Reclassification to earnings (net of tax effect of $24 and $37) 77 63 Balance at end of period (4,101 ) (3,003 ) Accumulated other comprehensive income (loss) at end of period $ (5,346 ) $ (4,202 ) (1) See note 7 for further information about plan curtailments resulting in remeasurement of plan assets and liabilities. Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and six months ended June 30, 2018 and 2017 is as follows (in millions): Three Months Ended June 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2018 2017 Unrealized gain (loss) on marketable securities: Realized loss on sale of securities $ — $ — Investment income and other Income tax (expense) benefit — — Income tax expense Impact on net income — — Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (6 ) (7 ) Interest expense Foreign exchange contracts (20 ) 7 Revenue Income tax (expense) benefit 6 — Income tax expense Impact on net income (20 ) — Net income Unrecognized pension and postretirement benefit costs: Prior service costs (50 ) (50 ) Investment income and other Income tax (expense) benefit 12 19 Income tax expense Impact on net income (38 ) (31 ) Net income Total amount reclassified for the period $ (58 ) $ (31 ) Net income Six Months Ended June 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2018 2017 Unrealized gain (loss) on marketable securities: Realized loss on sale of securities (2 ) — Investment income and other Income tax (expense) benefit 1 — Income tax expense Impact on net income (1 ) — Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (12 ) (14 ) Interest expense Foreign exchange contracts (62 ) 32 Revenue Income tax (expense) benefit 18 (7 ) Income tax expense Impact on net income (56 ) 11 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (101 ) (100 ) Investment income and other Income tax (expense) benefit 24 37 Income tax expense Impact on net income (77 ) (63 ) Net income Total amount reclassified for the period $ (134 ) $ (52 ) Net income Deferred Compensation Obligations and Treasury Stock Activity in the deferred compensation program for the six months ended June 30, 2018 and 2017 is as follows (in millions): 2018 2017 Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 37 $ 45 Reinvested dividends 1 1 Benefit payments (7 ) (10 ) Balance at end of period $ 31 $ 36 Treasury Stock: Balance at beginning of period (1 ) $ (37 ) (1 ) $ (45 ) Reinvested dividends — (1 ) — (1 ) Benefit payments — 7 — 10 Balance at end of period (1 ) $ (31 ) (1 ) $ (36 ) Noncontrolling Interests: We have noncontrolling interests in certain consolidated subsidiaries in our International Package and Supply Chain & Freight segments. Noncontrolling interests decreased $2 million and increased $6 million for the six months ended June 30, 2018 and 2017 , respectively. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We report our operations in three segments: U.S. Domestic Package operations, International Package operations and Supply Chain & Freight operations. Package operations represent our most significant business and are broken down into regional operations around the world. Regional operations managers are responsible for both domestic and export products within their geographic area. U.S. Domestic Package Domestic Package operations include the time-definite delivery of letters, documents and packages throughout the United States. International Package International Package operations include delivery to more than 220 countries and territories worldwide, including shipments wholly outside the United States, as well as shipments with either origin or destination outside the United States. Our International Package reporting segment includes the operations of our Europe, Asia, Americas and ISMEA (Indian Subcontinent, Middle East and Africa) operating segments. Supply Chain & Freight Supply Chain & Freight includes our Forwarding, Logistics, Coyote, Marken, UPS Mail Innovations, UPS Freight and other aggregated business units. Our Forwarding, Logistics and UPS Mail Innovations business units provide services in more than 200 countries and territories worldwide and include international air and ocean freight forwarding, customs brokerage, distribution and post-sales services, mail and consulting services. UPS Freight offers a variety of less-than-truckload ("LTL") and truckload ("TL") services to customers in North America. Coyote offers truckload brokerage services primarily in the United States. Marken is a global provider of supply chain solutions to the life sciences industry. Other aggregated business units within this segment include The UPS Store and UPS Capital. In evaluating financial performance, we focus on operating profit as a segment’s measure of profit or loss. Operating profit is before investment income and other, interest expense and income taxes. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies included in the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017 and updated in note 2 and note 3 for newly adopted accounting standards. Certain expenses are allocated between the segments using activity-based costing methods. Segment information for the three and six months ended June 30, 2018 and 2017 is as follows (in millions): Three Months Ended Six Months Ended 2018 2017 2018 2017 Revenue: U.S. Domestic Package $ 10,354 $ 9,741 $ 20,581 $ 19,277 International Package 3,602 3,171 7,135 6,245 Supply Chain & Freight 3,500 3,015 6,853 5,915 Consolidated $ 17,456 $ 15,927 $ 34,569 $ 31,437 Operating Profit: U.S. Domestic Package $ 939 $ 1,255 $ 1,695 $ 2,205 International Package 618 570 1,212 1,088 Supply Chain & Freight 216 212 386 361 Consolidated $ 1,773 $ 2,037 $ 3,293 $ 3,654 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The earnings per share amounts are the same for class A and class B common shares as the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2018 and 2017 (in millions, except per share amounts): Three Months Ended Six Months Ended 2018 2017 2018 2017 Numerator: Net income attributable to common shareowners $ 1,485 $ 1,384 $ 2,830 $ 2,550 Denominator: Weighted average shares 861 867 861 868 Deferred compensation obligations 1 1 1 1 Vested portion of restricted units 4 4 4 4 Denominator for basic earnings per share 866 872 866 873 Effect of dilutive securities: Restricted units 3 3 3 3 Stock options 1 1 1 1 Denominator for diluted earnings per share 870 876 870 877 Basic earnings per share $ 1.71 $ 1.59 $ 3.27 $ 2.92 Diluted earnings per share $ 1.71 $ 1.58 $ 3.25 $ 2.91 There were no antidilutive shares for the three months ended June 30, 2018 . Diluted earnings per share for the three months ended June 30, 2017 excluded the effect of 0.3 million shares of common stock ( 0.1 and 0.3 million for the six months ended June 30, 2018 and 2017 , 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 | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT | DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT Risk Management Policies Changes in fuel prices, interest rates and foreign exchange rates impact our results of operations. These exposures are actively monitored by management. To manage the impact of these exposures, we enter into a variety of derivative financial instruments. Our objective is to manage, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in foreign currency rates, commodity prices and interest rates. It is our policy and practice to use derivative financial instruments only to the extent necessary to manage exposures. As we use price sensitive instruments to hedge a certain portion of our existing and anticipated transactions, we expect that any loss in value 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. At June 30, 2018 and December 31, 2017 , we held cash collateral of $ 82 and $ 17 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. At June 30, 2018 and December 31, 2017 , $22 and $174 million , respectively, of additional collateral was required to be posted with our counterparties. Events such as a counterparty credit rating downgrade (depending on the ultimate rating level) could also allow us to take additional protective measures such as the early termination of trades. Alternatively, we could be required to provide additional collateral or terminate transactions with certain counterparties in the event of a downgrade of our credit rating. The amount of collateral required would be determined by the net fair value of the associated derivatives with each counterparty. We have not historically incurred, and do not expect to incur in the future, any losses as a result of counterparty default. The aggregate fair value of instruments not covered by the zero threshold bilateral collateral provisions were in a net liability position of $0 and $16 million at June 30, 2018 and December 31, 2017 , respectively. 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. In order to mitigate the impact of fuel surcharge imposed on us by outside carriers, we regularly adjust the rates we charge for our freight brokerage, inter-modal and truckload services. We periodically enter into derivative contracts on energy commodity products to manage the price risk associated with forecasted transactions involving refined fuels, principally jet-A, diesel and unleaded gasoline. The objective of the hedges is to reduce the variability of cash flows, due to changing fuel prices, associated with the forecasted transactions involving those products. We normally designate and account for these contracts as cash flow hedges of the underlying forecasted transactions involving these fuel products and, therefore, the resulting gains and losses from these hedges are recognized as a component of fuel expense or revenue when the underlying transactions occur. Foreign Currency Risk Management To protect against the reduction in value of forecasted foreign currency cash flows from our international package business, we maintain a foreign currency cash flow hedging program. Our most significant foreign currency exposures relate to the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. We hedge portions of our forecasted revenue denominated in foreign currencies with option and forward contracts. We normally designate and account for these contracts as cash flow hedges of anticipated foreign currency denominated revenue and, therefore, the resulting gains and losses from these hedges are recognized as a component of international package revenue when the underlying sales transactions occur. We also hedge portions of our anticipated cash settlements of intercompany transactions and interest payments on certain debt subject to foreign currency remeasurement using foreign currency forward contracts. We normally designate and account for these contracts as cash flow hedges of forecasted foreign currency denominated transactions; therefore, the resulting gains and losses from these hedges are recognized as a component of investment income and other when the underlying transactions are subject to currency remeasurement. We hedge our net investment in certain foreign operations with foreign currency denominated debt instruments. The use of foreign denominated debt as the hedging instrument allows the debt to be remeasured to foreign currency translation adjustment within AOCI to offset the translation risk from those investments. Any ineffective portion of net investment hedging is recognized as a component of investment income and other. Balances in the cumulative translation adjustment accounts remain until the sale or complete liquidation of the foreign entity. Interest Rate Risk Management Our indebtedness under our various financing arrangements creates interest rate risk. We use a combination of derivative instruments as part of our program to manage the fixed and floating interest rate mix of our total debt portfolio and related overall cost of borrowing. The notional amount, interest payment date and maturity date of the swaps match the terms of the associated debt being hedged. Interest rate swaps allow us to maintain a target range of floating-rate debt within our capital structure. We have designated and account for the majority of our interest rate swaps that convert fixed-rate interest payments into floating-rate interest payments as hedges of the fair value of the associated debt instruments. Therefore, the gains and losses resulting from fair value adjustments to the interest rate swaps and fair value adjustments to the associated debt instruments are recorded to interest expense in the period in which the gains and losses occur. We have designated and account for interest rate swaps that convert floating-rate interest payments into fixed-rate interest payments as cash flow hedges of the forecasted payment obligations. The gains and losses resulting from fair value adjustments to the interest rate swaps are recorded to AOCI. We periodically hedge the forecasted fixed-coupon interest payments associated with anticipated debt offerings by using forward starting interest rate swaps, interest rate locks or similar derivatives. These agreements effectively lock a portion of our interest rate exposure between the time the agreement is entered into and the date when the debt offering is completed, thereby mitigating the impact of interest rate changes on future interest expense. These derivatives are settled commensurate with the issuance of the debt, and any gain or loss upon settlement is amortized as an adjustment to the effective interest yield on the debt. Outstanding Positions As of June 30, 2018 and December 31, 2017 , the notional amounts of our outstanding derivative positions were as follows (in millions): June 30, 2018 December 31, 2017 Currency hedges: Euro EUR 4,642 EUR 4,942 British Pound Sterling GBP 1,778 GBP 1,736 Canadian Dollar CAD 1,410 CAD 1,259 Mexican Peso MXN — MXN 169 Singapore Dollar SGD 27 SGD 11 Interest rate hedges: Fixed to Floating Interest Rate Swaps USD 4,674 USD 5,424 Floating to Fixed Interest Rate Swaps USD 778 USD 778 Investment market price hedges: Marketable Securities EUR — EUR 64 As of June 30, 2018 , 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 June 30, December 31, June 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current assets Level 2 $ 46 $ 2 $ 22 $ — Interest rate contracts Other current assets Level 2 6 1 6 1 Foreign exchange contracts Other non-current assets Level 2 87 1 51 — Interest rate contracts Other non-current assets Level 2 14 59 3 43 Derivatives not designated as hedges: Foreign exchange contracts Other current assets Level 2 3 18 3 17 Foreign exchange contracts Other non-current assets Level 2 1 — 1 — Interest rate contracts Other non-current assets Level 2 22 26 22 26 Total Asset Derivatives $ 179 $ 107 $ 108 $ 87 Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of Offset had been Applied Liability Derivatives Balance Sheet Location June 30, December 31, June 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current liabilities Level 2 $ 35 $ 93 $ 11 $ 91 Foreign exchange contracts Other non-current liabilities Level 2 54 194 18 193 Interest rate contracts Other non-current liabilities Level 2 60 28 49 12 Derivatives not designated as hedges: Foreign exchange contracts Other current liabilities Level 2 1 1 1 — Investment market price contracts Other current liabilities Level 2 — 16 — 16 Foreign exchange contracts Other non-current liabilities Level 2 1 — 1 — Total Liability Derivatives $ 151 $ 332 $ 80 $ 312 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 six months ended June 30, 2018 and 2017 for those derivatives designated as cash flow hedges (in millions): Three Months Ended June 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2018 2017 Interest rate contracts $ 1 $ — Foreign exchange contracts 411 (243 ) Total $ 412 $ (243 ) Six Months Ended June 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2018 2017 Interest rate contracts $ 2 $ — Foreign exchange contracts 275 (290 ) Total $ 277 $ (290 ) As of June 30, 2018 , there are $ 38 million of pre-tax losses related to cash flow hedges that are currently deferred in AOCI that are expected to be reclassified to income over the 12 month period ended June 30, 2019 . The actual amounts that will be reclassified to income over the next 12 months will vary from this amount as a result of changes in market conditions. The maximum term over which we are hedging exposures to the variability of cash flow is approximately 14 years. The amount of ineffectiveness recognized in income on derivative instruments designated in cash flow hedging relationships was immaterial for the three and six months ended June 30, 2018 and 2017 . 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 six months ended June 30, 2018 and 2017 for those instruments designated as net investment hedges (in millions): Three Months Ended June 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2018 2017 Foreign denominated debt $ 218 $ (210 ) Total $ 218 $ (210 ) Six Months Ended June 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2018 2017 Foreign denominated debt $ 138 (247 ) Total $ 138 $ (247 ) The amount of ineffectiveness recognized in income on non-derivative instruments designated in net investment hedging relationships was immaterial for the three and six months ended June 30, 2018 and 2017 . 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 six months ended June 30, 2018 and 2017 (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 2018 2017 2018 2017 Three Months Ended June 30: Interest rate contracts Interest Expense $ (19 ) $ 2 Fixed-Rate Debt Interest Expense $ 19 $ (2 ) Six Months Ended June 30: Interest rate contracts Interest Expense $ (73 ) $ (22 ) Fixed-Rate Debt Interest Expense $ 73 $ 22 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 portions of our outstanding debt. 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 six months ended June 30, 2018 and 2017 (in millions): Derivative Instruments Not Designated in Hedging Relationships Location of Gain (Loss) Recognized in Income Amount of Gain (Loss) Recognized in Income 2018 2017 Three Months Ended June 30: Interest rate contracts Interest expense $ (2 ) $ (2 ) Foreign exchange contracts Investment income and other (67 ) 14 Investment market price contracts Investment income and other — (18 ) Total $ (69 ) $ (6 ) Six Months Ended June 30: Interest rate contracts Interest expense $ (4 ) $ (4 ) Foreign exchange contracts Investment income and other (59 ) $ 20 Investment market price contracts Investment income and other 16 8 Total $ (47 ) $ 24 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate decreased to 22.9% in the second quarter of 2018 from 34.7% in the same period of 2017 ( 21.1% year-to-date in 2018 compared to 33.4% in the same period of 2017). The decrease in our effective tax rate was primarily due to the impact of the Tax Act, discussed further below, which reduced the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. In addition, the recognition of excess tax benefits related to share-based compensation in income tax reduced our second quarter 2017 effective rate by 0.3% , with no effective rate impact during the second quarter of 2018 ( 1.3% year-to-date in 2018 compared to 1.6% in the same period of 2017). Other factors that impacted our effective tax rate in the second quarter and year-to-date periods of 2018 compared with the same periods of 2017 include favorable resolutions of uncertain tax positions, favorable U.S. state and local tax law changes and favorable tax provisions enacted in the Bipartisan Budget Act of 2018. As discussed in note 16, we recognized pre-tax transformation strategy costs of $ 263 million in the second quarter of 2018. As a result, we recorded an income tax benefit of $63 million. This benefit was generated at a higher average tax rate than the 2018 U.S. federal statutory rate primarily due to the effect of U.S. state and local taxes. As discussed in our Annual Report on Form 10-K for the year ended December 31, 2017 , we have recognized liabilities for uncertain tax positions. We reevaluate these uncertain tax positions on a quarterly basis. A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months. However, an estimate of the range of reasonably possible outcomes cannot be made. Items that may cause changes to unrecognized tax benefits include the timing of interest deductions and the allocation of income and expense between tax jurisdictions. These changes could result from the settlement of ongoing litigation, the completion of ongoing examinations, the expiration of the statute of limitations or other unforeseen circumstances. Tax Cuts and Jobs Act On December 22, 2017, the United States enacted into law the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code, including a permanent corporate rate reduction to 21% and a transition to a territorial international system effective in 2018. The Tax Act also includes provisions that affected 2017, including: (1) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries ("Transition Tax") that is payable over eight years; (2) requiring a remeasurement of all U.S. deferred tax assets and liabilities to the newly enacted corporate tax rate of 21% ; and (3) providing for additional first-year depreciation that allows full expensing of qualified property placed into service after September 27, 2017. In late December 2017, the SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the related accounting under U.S. GAAP. If a company's accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. Accordingly, we recorded provisional estimates in the year ended December 31, 2017 related to our Transition Tax liability, our change in indefinite reinvestment assertion for certain foreign subsidiaries and the remeasurement of our U.S. net deferred tax liabilities. To calculate the amount of Transition Tax, we must determine, in addition to other factors, the amount of post-1986 earnings and profits ("E&P") of the foreign subsidiaries as well as the amount of non-U.S. income taxes paid on such earnings. We were able to make a reasonable estimate of the Transition Tax and recorded a provisional liability of $310 million in the year ended December 31, 2017; however, there are certain factors that could impact our provisional estimate. First, several of our foreign subsidiaries have a fiscal year-end other than December 31, and E&P for these subsidiaries cannot be precisely calculated until their fiscal years conclude during 2018. Second, we continue to gather additional information needed to precisely estimate the impact of the Transition Tax on our U.S. state and local tax liabilities given the complexity of the relevant state laws. Finally, we expect additional regulatory guidance and technical clarifications from the U.S. Department of the Treasury and Internal Revenue Service that could change our provisional estimate of the Transition Tax. As the U.S. has moved to a territorial system, we have changed our indefinite reinvestment assertion with respect to the earnings of certain foreign subsidiaries. As a result, we recorded a provisional deferred tax liability and corresponding increase to deferred tax expense of $24 million in the year ended December 31, 2017. There are certain factors, discussed above with regard to the Transition Tax, which could also impact our provisional estimate for the change in indefinite reinvestment assertion. For all other foreign subsidiaries, we continue to assert that these earnings are indefinitely reinvested. We will continue to evaluate our indefinite reinvestment assertion for all foreign subsidiaries in light of the Tax Act and our provisional estimate is subject to change. For our net U.S. deferred tax liabilities, we recorded a provisional decrease of $ 606 million with a corresponding reduction to deferred tax expense of $ 606 million for the year ended December 31, 2017. While we are able to make a reasonable estimate of the impact of the reduction in corporate rate, it may be affected by other analysis related to the Tax Act, including, but not limited to, completing the analysis of our 2017 capital expenditures that qualify for full expensing and the state tax effect of adjustments made to federal temporary differences. We have not made any measurement period adjustments related to our provisional estimates through the second quarter of 2018. We are continuing to gather additional information to complete our accounting for these items and expect to complete our accounting within the prescribed measurement period. |
TRANSFORMATION STRATEGY (Notes)
TRANSFORMATION STRATEGY (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
TRANSFORMATION STRATEGY | TRANSFORMATION STRATEGY In the first quarter of 2018, we launched the first phase of a multi-year, enterprise-wide transformation strategy that is expected to impact our organization. Over the course of the next few years additional phases will be implemented. The program includes investments impacting global direct and indirect operating costs, as well as changes in processes and technology. As part of this multi-phased transformation strategy, in April 2018, we announced that a select group of non-operations, retirement-eligible U.S. management employees were informed of their eligibility for participation in a special Voluntary Retirement Plan (VRP). Under the VRP, eligible employees were offered a financial buyout to retire. Those who have elected to participate in the voluntary retirement program will separate in phases to maintain an orderly transition. The special VRP offer does not change the design, or eligibility for, UPS retirement plans. This initiative will reduce headcount and lower ongoing operating expense. During the quarter ended June 30, 2018, we recorded a pre-tax charge of $ 192 million related to severance pay and benefits. The charge is included within the "Compensation and benefits" line item in the statements of consolidated income. In addition, a $ 71 million pre-tax charge for other transformation related costs was also recorded. There were no comparable costs for the first six months of 2017. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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 ("U.S. GAAP") 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 June 30, 2018 , our results of operations for the three and six months ended June 30, 2018 and 2017 , and cash flows for the six months ended June 30, 2018 and 2017 . 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, 2017 . For interim consolidated financial statement purposes, we provide for accruals under our various employee benefit plans for each three month period based on one quarter of the estimated annual expense. 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 | 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 June 30, 2018 . The fair values of our investment securities are disclosed in note 5 , our recognized multiemployer pension withdrawal liabilities in note 7 , our short and long-term debt in note 9 and our derivative instruments in note 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 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") that changes the revenue recognition for companies that enter into contracts with customers to transfer goods or services (" Revenue from Contracts with Customers") . The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner depicting the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has also issued a number of updates to this standard. Effective January 1, 2018, we adopted the requirements of this ASU using the full retrospective method. See note 3 for required disclosures pertaining to the new ASU. In November 2016, the FASB issued an ASU that is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows (" Restricted Cash") . As a result of this update, restricted cash is included within cash and cash equivalents on our statements of consolidated cash flows. Effective January 1, 2018, we adopted the requirements of this ASU retrospectively. In March 2017, the FASB issued an ASU to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost (" Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost") . The update requires employers to report the current service cost component in the same line item as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented separately from service cost and outside of income from operations. As a result of this update, the net amount of interest cost, prior service cost and expected return on plan assets is now presented as other income. Effective January 1, 2018, we adopted the requirements of this ASU retrospectively, as required. We have recast our consolidated financial statements from amounts previously reported due to the adoption of new revenue recognition, pension and restricted cash standards. Impacted consolidated balance sheet line items, which reflect the adoption of the new ASUs, are as follows (in millions): December 31, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Assets: Other current assets $ 1,133 $ 170 $ — $ — $ 1,303 Total current assets 15,548 170 — — 15,718 Deferred income tax assets 265 1 — — 266 Total Assets $ 45,403 $ 171 $ — $ — $ 45,574 Liabilities: Accounts payable $ 3,872 $ 62 $ — $ — $ 3,934 Accrued wages and withholdings 2,521 87 — — 2,608 Other current liabilities (1) 905 29 — — 934 Total current liabilities 12,708 178 — — 12,886 Deferred income tax liabilities 757 (1 ) — — 756 Shareowners' Equity: Retained earnings 5,858 (6 ) — — 5,852 Total Shareowners' Equity 1,030 (6 ) — — 1,024 Total Liabilities and Shareowners' Equity $ 45,403 $ 171 $ — $ — $ 45,574 (1) The caption "Other current liabilities" was presented separately from "Hedge margin liabilities" of $17 million in the Form 10-K at December 31, 2017. These captions have been collapsed in the consolidated balance sheets as of June 30, 2018 and December 31, 2017 included within this Form 10-Q. (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. The unaudited consolidated statement of operations, which reflects the adoption of the new ASUs, is as follows (in millions): Three months ended June 30, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Revenue $ 15,750 $ 177 $ — $ — $ 15,927 Operating Expenses: Compensation and benefits 8,105 — 179 — 8,284 Repairs and maintenance 392 — — — 392 Depreciation and amortization 562 — — — 562 Purchased transportation 2,443 171 — — 2,614 Fuel 616 — — — 616 Other occupancy 264 — — — 264 Other expenses 1,152 6 — — 1,158 Total Operating Expenses 13,534 177 179 — 13,890 Operating Profit 2,216 — (179 ) — 2,037 Other Income and (Expense): Investment income and other 14 — 179 — 193 Interest expense (111 ) — — — (111 ) Total Other Income and (Expense) (97 ) — 179 — 82 Income Before Income Taxes 2,119 — — — 2,119 Income Tax Expense 735 — — — 735 Net Income $ 1,384 $ — $ — $ — $ 1,384 Basic earnings per share $ 1.59 $ — $ — $ — $ 1.59 Diluted earnings per share $ 1.58 $ — $ — $ — $ 1.58 (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. Six months ended June 30, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Revenue $ 31,065 $ 372 $ — $ — $ 31,437 Operating Expenses: Compensation and benefits 16,236 — 359 — 16,595 Repairs and maintenance 782 — — — 782 Depreciation and amortization 1,116 — — — 1,116 Purchased transportation 4,809 350 — — 5,159 Fuel 1,237 — — — 1,237 Other occupancy 563 — — — 563 Other expenses 2,322 9 — — 2,331 Total Operating Expenses 27,065 359 359 — 27,783 Operating Profit 4,000 13 (359 ) — 3,654 Other Income and (Expense): Investment income and other 29 — 359 — 388 Interest expense (213 ) — — — (213 ) Total Other Income and (Expense) (184 ) — 359 — 175 Income Before Income Taxes 3,816 13 — — 3,829 Income Tax Expense 1,274 5 — — 1,279 Net Income $ 2,542 $ 8 $ — $ — $ 2,550 Basic earnings per share $ 2.91 $ 0.01 $ — $ — $ 2.92 Diluted earnings per share $ 2.90 $ 0.01 $ — $ — $ 2.91 (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. The unaudited impacted consolidated statement of cash flows line items, which reflect the adoption of the new ASUs, are as follows (in millions): Six months ended June 30, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Net Income $ 2,542 $ 8 $ — $ — $ 2,550 Adjustments to reconcile net income to net cash from operating activities: Deferred tax (benefit) expense 175 5 — — 180 Other assets 440 (20 ) — — 420 Accounts payable (534 ) 4 — — (530 ) Accrued wages and withholdings (18 ) 5 — — (13 ) Other liabilities (456 ) (2 ) — — (458 ) Cash flows from operating activities 2,621 — — — 2,621 Purchase of marketable securities (1,084 ) — — 2 (1,082 ) Net cash used in investing activities (2,027 ) — — 2 (2,025 ) Net decrease in cash, cash equivalents and restricted cash 68 — — 2 70 Cash, cash equivalents and restricted cash at the beginning of period 3,476 — — 445 3,921 Cash, cash equivalents and restricted cash at the end of period $ 3,544 $ — $ — $ 447 $ 3,991 (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. In February 2018, the FASB issued an ASU that allows a reclassification from accumulated other comprehensive income ("AOCI") to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Tax Act"). Effective January 1, 2018, we early adopted this ASU and elected to reclassify the income tax effects of the Tax Act from AOCI to retained earnings. This resulted in a $735 million increase to retained earnings and a $735 million decrease to AOCI. Our current accounting policy for releasing income tax effects from other comprehensive income is based on a portfolio approach. Other accounting pronouncements adopted during the periods covered by the consolidated financial statements did not have a material impact on our consolidated financial position, results of operations or cash flows. Accounting Standards Issued But Not Yet Effective In August 2017, the FASB issued an ASU to enhance recognition of the economic results of hedging activities in the financial statements. In addition, this update makes certain targeted improvements to simplify the application of the hedge accounting guidance and increase transparency regarding the scope and results of hedging activities. The guidance will generally be applied prospectively and becomes effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this ASU to have a material impact on our consolidated financial position, results of operations or cash flows. In March 2017, the FASB issued an ASU to require the premium on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount would not be impacted by the proposed update. Under U.S. GAAP, premiums on callable debt securities are generally amortized over the contractual life of the security. Only in cases when an entity has a large number of similar securities is it allowed to consider estimates of principal prepayments. Amortization of the premium over the contractual life of the instrument can result in losses being recorded for the unamortized premium if the issuer exercises the call feature prior to maturity. The standard will be effective for us in the first quarter of 2019, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this ASU to have a material impact on our consolidated financial position, results of operations or cash flows. In January 2017, the FASB issued an ASU to simplify the accounting for goodwill impairment. The update removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The standard will be effective for us in the first quarter of 2020, but early adoption is permitted. We are currently evaluating this update to determine the full impact of its adoption but do not expect this ASU to have a material impact on our consolidated financial position, results of operations or cash flows. In February 2016, the FASB issued an ASU that requires lessees to recognize a right-of-use asset and lease liability on their 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 and subsequent amendments to the original update to determine the full impact of its adoption on our consolidated financial position, results of operations, cash flows and related disclosures, as well as the impact of adoption on policies, practices and systems. We have reviewed and selected a new lease accounting system and are currently accumulating and processing lease data into the system. In addition, we are currently analyzing our internal control framework to determine if controls should be added or modified as a result of adopting this standard. Based on the preliminary evaluation of our lease portfolio, we believe the largest impact will be accounting for leases for real estate, as we have a large portfolio of leased properties that are currently accounted for as operating leases. As of December 31, 2017, we had $ 1.637 billion of future minimum operating lease commitments that are not currently recognized on our consolidated balance sheets. We expect material changes to our consolidated balance sheets as a result of the new standard. Other accounting pronouncements issued, but not effective until after June 30, 2018 , are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. |
RECENT ACCOUNTING PRONOUNCEME24
RECENT ACCOUNTING PRONOUNCEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Impacted consolidated balance sheet line items, which reflect the adoption of the new ASUs, are as follows (in millions): December 31, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Assets: Other current assets $ 1,133 $ 170 $ — $ — $ 1,303 Total current assets 15,548 170 — — 15,718 Deferred income tax assets 265 1 — — 266 Total Assets $ 45,403 $ 171 $ — $ — $ 45,574 Liabilities: Accounts payable $ 3,872 $ 62 $ — $ — $ 3,934 Accrued wages and withholdings 2,521 87 — — 2,608 Other current liabilities (1) 905 29 — — 934 Total current liabilities 12,708 178 — — 12,886 Deferred income tax liabilities 757 (1 ) — — 756 Shareowners' Equity: Retained earnings 5,858 (6 ) — — 5,852 Total Shareowners' Equity 1,030 (6 ) — — 1,024 Total Liabilities and Shareowners' Equity $ 45,403 $ 171 $ — $ — $ 45,574 (1) The caption "Other current liabilities" was presented separately from "Hedge margin liabilities" of $17 million in the Form 10-K at December 31, 2017. These captions have been collapsed in the consolidated balance sheets as of June 30, 2018 and December 31, 2017 included within this Form 10-Q. (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. The unaudited consolidated statement of operations, which reflects the adoption of the new ASUs, is as follows (in millions): Three months ended June 30, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Revenue $ 15,750 $ 177 $ — $ — $ 15,927 Operating Expenses: Compensation and benefits 8,105 — 179 — 8,284 Repairs and maintenance 392 — — — 392 Depreciation and amortization 562 — — — 562 Purchased transportation 2,443 171 — — 2,614 Fuel 616 — — — 616 Other occupancy 264 — — — 264 Other expenses 1,152 6 — — 1,158 Total Operating Expenses 13,534 177 179 — 13,890 Operating Profit 2,216 — (179 ) — 2,037 Other Income and (Expense): Investment income and other 14 — 179 — 193 Interest expense (111 ) — — — (111 ) Total Other Income and (Expense) (97 ) — 179 — 82 Income Before Income Taxes 2,119 — — — 2,119 Income Tax Expense 735 — — — 735 Net Income $ 1,384 $ — $ — $ — $ 1,384 Basic earnings per share $ 1.59 $ — $ — $ — $ 1.59 Diluted earnings per share $ 1.58 $ — $ — $ — $ 1.58 (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. Six months ended June 30, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Revenue $ 31,065 $ 372 $ — $ — $ 31,437 Operating Expenses: Compensation and benefits 16,236 — 359 — 16,595 Repairs and maintenance 782 — — — 782 Depreciation and amortization 1,116 — — — 1,116 Purchased transportation 4,809 350 — — 5,159 Fuel 1,237 — — — 1,237 Other occupancy 563 — — — 563 Other expenses 2,322 9 — — 2,331 Total Operating Expenses 27,065 359 359 — 27,783 Operating Profit 4,000 13 (359 ) — 3,654 Other Income and (Expense): Investment income and other 29 — 359 — 388 Interest expense (213 ) — — — (213 ) Total Other Income and (Expense) (184 ) — 359 — 175 Income Before Income Taxes 3,816 13 — — 3,829 Income Tax Expense 1,274 5 — — 1,279 Net Income $ 2,542 $ 8 $ — $ — $ 2,550 Basic earnings per share $ 2.91 $ 0.01 $ — $ — $ 2.92 Diluted earnings per share $ 2.90 $ 0.01 $ — $ — $ 2.91 (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash. The unaudited impacted consolidated statement of cash flows line items, which reflect the adoption of the new ASUs, are as follows (in millions): Six months ended June 30, 2017 As previously reported Adjustments (a) Adjustments (b) Adjustments (c) As Recast Net Income $ 2,542 $ 8 $ — $ — $ 2,550 Adjustments to reconcile net income to net cash from operating activities: Deferred tax (benefit) expense 175 5 — — 180 Other assets 440 (20 ) — — 420 Accounts payable (534 ) 4 — — (530 ) Accrued wages and withholdings (18 ) 5 — — (13 ) Other liabilities (456 ) (2 ) — — (458 ) Cash flows from operating activities 2,621 — — — 2,621 Purchase of marketable securities (1,084 ) — — 2 (1,082 ) Net cash used in investing activities (2,027 ) — — 2 (2,025 ) Net decrease in cash, cash equivalents and restricted cash 68 — — 2 70 Cash, cash equivalents and restricted cash at the beginning of period 3,476 — — 445 3,921 Cash, cash equivalents and restricted cash at the end of period $ 3,544 $ — $ — $ 447 $ 3,991 (a) Recast to reflect the adoption of Revenue from Contracts with Customers. (b) Recast to reflect the adoption of Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. (c) Recast to reflect the adoption of Restricted Cash |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of Revenue Three Months Ended Six Months Ended 2018 2017 2018 2017 Revenue: Next Day Air $ 1,830 $ 1,752 $ 3,614 $ 3,417 Deferred 1,080 1,020 2,149 1,990 Ground 7,444 6,969 14,818 13,870 U.S. Domestic Package 10,354 9,741 20,581 19,277 Domestic 700 623 1,416 1,236 Export 2,747 2,426 5,419 4,763 Cargo & Other 155 122 300 246 International Package 3,602 3,171 7,135 6,245 Forwarding 1,659 1,347 3,264 2,613 Logistics 784 718 1,566 1,458 Freight 853 755 1,630 1,462 Other 204 195 393 382 Supply Chain & Freight 3,500 3,015 6,853 5,915 Consolidated revenue $ 17,456 $ 15,927 $ 34,569 $ 31,437 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 assumptions used and the calculated weighted-average fair values of the RTSR portion of the LTIP awards granted in 2018 and 2017 are as follows: 2018 2017 Risk-free interest rate 2.61 % 1.46 % Expected volatility 16.51 % 16.59 % Weighted-average fair value of units granted $ 137.53 $ 119.29 Share payout 123.46 % 113.55 % The fair value of each option grant is estimated using the Black-Scholes option pricing model. The weighted-average assumptions used and the calculated weighted-average fair values of options granted in 2018 and 2017 are as follows: 2018 2017 Expected dividend yield 2.93 % 2.89 % Risk-free interest rate 2.84 % 2.15 % Expected life (in years) 7.5 7.5 Expected volatility 16.72 % 17.81 % Weighted-average fair value of options granted $ 15.23 $ 14.70 |
INVESTMENTS AND RESTRICTED CA27
INVESTMENTS AND RESTRICTED CASH (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Marketable Securities [Abstract] | |
Available-for-sale Securities | The following is a summary of marketable securities classified as trading and available-for-sale as of June 30, 2018 and December 31, 2017 (in millions): Cost Unrealized Gains Unrealized Losses Estimated Fair Value June 30, 2018: Current trading marketable securities: Corporate debt securities $ 75 $ — $ — $ 75 Equity securities 2 — — 2 Total trading marketable securities 77 — — 77 Current available-for-sale securities: U.S. government and agency debt securities 306 1 (4 ) 303 Mortgage and asset-backed debt securities 86 — (1 ) 85 Corporate debt securities 243 — (2 ) 241 Non-U.S. government debt securities 14 — — 14 Total available-for-sale marketable securities 649 1 (7 ) 643 Total current marketable securities $ 726 $ 1 $ (7 ) $ 720 Cost Unrealized Gains Unrealized Losses Estimated Fair Value December 31, 2017: Current trading marketable securities: Corporate debt securities $ 75 $ — $ — $ 75 Carbon credit investments (1) 77 16 — 93 Total trading marketable securities 152 16 — 168 Current available-for-sale securities: U.S. government and agency debt securities 286 — (3 ) 283 Mortgage and asset-backed debt securities 86 — — 86 Corporate debt securities 201 1 (1 ) 201 Equity securities 2 — — 2 Non-U.S. government debt securities 9 — — 9 Total available-for-sale marketable securities 584 1 (4 ) 581 Total current marketable securities $ 736 $ 17 $ (4 ) $ 749 (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 June 30, 2018 , 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 $ 193 $ 193 Due after one year through three years 434 430 Due after three years through five years 24 23 Due after five years 73 72 724 718 Equity securities 2 2 $ 726 $ 720 |
Cash and Cash Equivalents and Restricted Cash | A reconciliation of cash and cash equivalents and restricted cash from the consolidated balance sheets to the statements of consolidated cash flows is shown below (in millions): June 30, 2018 December 31, 2017 June 30, 2017 Cash and cash equivalents $ 4,214 $ 3,320 $ 3,544 Restricted cash 277 449 447 Total cash, cash equivalents and restricted cash $ 4,491 $ 3,769 $ 3,991 |
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 June 30, 2018 and December 31, 2017 , 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 June 30, 2018: Marketable Securities: U.S. government and agency debt securities $ 303 $ — $ — $ 303 Mortgage and asset-backed debt securities — 85 — 85 Corporate debt securities — 316 — 316 Equity securities — 2 — 2 Non-U.S. government debt securities — 14 — 14 Total marketable securities 303 417 — 720 Other non-current investments 19 — 2 21 Total $ 322 $ 417 $ 2 $ 741 December 31, 2017: Marketable Securities: U.S. government and agency debt securities $ 283 $ — $ — $ 283 Mortgage and asset-backed debt securities 86 — 86 Corporate debt securities — 276 — 276 Equity securities — 2 — 2 Non-U.S. government debt securities — 9 — 9 Carbon credit investments 93 — — 93 Total marketable securities 376 373 — 749 Other non-current investments 19 — 6 25 Total $ 395 $ 373 $ 6 $ 774 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | There were no transfers of investments between Level 1 and Level 2 during the three and six months ended June 30, 2018 and 2017 . |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment as of June 30, 2018 and December 31, 2017 consists of the following (in millions): 2018 2017 Vehicles $ 9,435 $ 9,365 Aircraft 16,811 16,248 Land 1,777 1,582 Buildings 4,195 4,035 Building and leasehold improvements 4,114 3,934 Plant equipment 9,952 9,387 Technology equipment 2,001 1,907 Equipment under operating leases — 29 Construction-in-progress 2,915 2,239 51,200 48,726 Less: Accumulated depreciation and amortization (27,299 ) (26,608 ) $ 23,901 $ 22,118 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [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 six months ended June 30, 2018 and 2017 (in millions): U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2018 2017 2018 2017 2018 2017 Three Months Ended June 30: Service cost $ 415 $ 389 $ 7 $ 7 $ 16 $ 14 Interest cost 450 462 26 28 11 10 Expected return on assets (800 ) (712 ) (2 ) (1 ) (19 ) (16 ) Amortization of prior service cost 48 48 2 2 — — Net periodic benefit cost $ 113 $ 187 $ 33 $ 36 $ 8 $ 8 U.S. Pension Benefits U.S. Postretirement Medical Benefits International Pension Benefits 2018 2017 2018 2017 2018 2017 Six Months Ended June 30: Service cost $ 831 $ 779 $ 14 $ 14 $ 32 $ 29 Interest cost 899 924 52 56 23 20 Expected return on assets (1,601 ) (1,424 ) (4 ) (3 ) (39 ) (32 ) Amortization of prior service cost 97 96 4 4 — — Net periodic benefit cost $ 226 $ 375 $ 66 $ 71 $ 16 $ 17 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table indicates the allocation of goodwill by reportable segment as of June 30, 2018 and December 31, 2017 (in millions): U.S. Domestic Package International Package Supply Chain & Freight Consolidated December 31, 2017: $ 715 $ 435 $ 2,722 $ 3,872 Acquired — — — — Currency / Other — (11 ) (24 ) (35 ) June 30, 2018: $ 715 $ 424 $ 2,698 $ 3,837 |
Schedule of Intangible Assets (Excluding Goodwill) | The following is a summary of intangible assets as of June 30, 2018 and December 31, 2017 (in millions): Gross Carrying Amount Accumulated Amortization Net Carrying Value June 30, 2018: Capitalized software $ 3,507 $ (2,404 ) $ 1,103 Licenses 115 (23 ) 92 Franchise rights 145 (101 ) 44 Customer relationships 741 (182 ) 559 Trade name 200 — 200 Trademarks, patents and other 55 (25 ) 30 Total Intangible Assets, Net $ 4,763 $ (2,735 ) $ 2,028 December 31, 2017: Capitalized software $ 3,273 $ (2,310 ) $ 963 Licenses 114 (10 ) 104 Franchise rights 144 (97 ) 47 Customer relationships 776 (160 ) 616 Trade name 200 — 200 Trademarks, patents and other 71 (37 ) 34 Total Intangible Assets, Net $ 4,578 $ (2,614 ) $ 1,964 |
DEBT AND FINANCING ARRANGEMEN31
DEBT AND FINANCING ARRANGEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The carrying value of our outstanding debt as of June 30, 2018 and December 31, 2017 consists of the following (in millions): Principal Amount Carrying Value Maturity 2018 2017 Commercial paper $ 2,530 2018 - 2019 $ 2,530 $ 3,203 Fixed-rate senior notes: 5.500% senior notes 750 2018 — 751 5.125% senior notes 1,000 2019 1,007 1,019 3.125% senior notes 1,500 2021 1,516 1,549 2.050% senior notes 700 2021 697 696 2.450% senior notes 1,000 2022 956 979 2.350% senior notes 600 2022 597 597 2.500% senior note 1,000 2023 993 992 2.800% senior note 500 2024 496 495 2.400% senior note 500 2026 497 497 3.050% senior note 1,000 2027 991 990 6.200% senior notes 1,500 2038 1,482 1,482 4.875% senior notes 500 2040 490 489 3.625% senior notes 375 2042 368 368 3.400% senior notes 500 2046 491 491 3.750 % senior notes 1,150 2047 1,136 1,135 Floating-rate senior notes: Floating-rate senior notes 350 2021 348 348 Floating-rate senior notes 400 2022 398 398 Floating-rate senior notes 500 2023 499 496 Floating-rate senior notes 1,043 2049-2067 1,030 1,032 8.375% Debentures: 8.375% debentures 424 2020 436 447 8.375% debentures 276 2030 281 282 Pound Sterling notes: 5.500% notes 88 2031 87 84 5.125% notes 600 2050 566 586 Euro senior notes: 0.375% notes 816 2023 810 832 1.625% notes 816 2025 811 833 1.000% notes 583 2028 579 595 1.500% notes 583 2032 578 594 Floating-rate senior notes 583 2020 581 598 Canadian senior notes: 2.125% notes 566 2024 563 593 Capital lease obligations 563 2018-3005 563 500 Facility notes and bonds 320 2029-2045 321 319 Other debt 13 2018-2022 13 19 Total debt $ 23,629 22,711 24,289 Less: Current maturities (2,591 ) (4,011 ) Long-term debt $ 20,120 $ 20,278 |
SHAREOWNERS' EQUITY (Tables)
SHAREOWNERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 six months ended June 30, 2018 and 2017 (in millions, except per share amounts): 2018 2017 Shares Dollars Shares Dollars Class A Common Stock Balance at beginning of period 173 $ 2 180 $ 2 Common stock purchases (2 ) — (2 ) — Stock award plans 3 — 4 — Common stock issuances 2 — 1 — Conversions of class A to class B common stock (8 ) — (5 ) — Class A shares issued at end of period 168 $ 2 178 $ 2 Class B Common Stock Balance at beginning of period 687 $ 7 689 $ 7 Common stock purchases (2 ) — (6 ) — Conversions of class A to class B common stock 8 — 5 — Class B shares issued at end of period 693 $ 7 688 $ 7 Additional Paid-In Capital Balance at beginning of period $ — $ — Stock award plans 170 157 Common stock purchases (383 ) (412 ) Common stock issuances 232 203 Option premiums received (paid) (19 ) 52 Balance at end of period $ — $ — Retained Earnings Balance at beginning of period $ 5,852 $ 4,880 Net income attributable to common shareowners 2,830 2,550 Dividends ($1.82 and $1.66 per share) (1,624 ) (1,495 ) Common stock purchases (128 ) (489 ) Reclassification from AOCI pursuant to the early adoption of ASU 2018-02 735 — Balance at end of period $ 7,665 $ 5,446 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The activity in AOCI for the six months ended June 30, 2018 and 2017 is as follows (in millions): 2018 2017 Foreign currency translation gain (loss), net of tax: Balance at beginning of period $ (930 ) $ (1,016 ) Translation adjustment (net of tax effect of $25 and $(93)) (84 ) 54 Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 (47 ) — Balance at end of period (1,061 ) (962 ) Unrealized gain (loss) on marketable securities, net of tax: Balance at beginning of period (2 ) (1 ) Current period changes in fair value (net of tax effect of $(1) and $0) (4 ) 1 Reclassification to earnings (net of tax effect of $1 and $0) 1 — Balance at end of period (5 ) — Unrealized gain (loss) on cash flow hedges, net of tax: Balance at beginning of period (366 ) (45 ) Current period changes in fair value (net of tax effect of $67 and $(109)) 210 (181 ) Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 (79 ) — Reclassification to earnings (net of tax effect of $18 and $(7)) 56 (11 ) Balance at end of period (179 ) (237 ) Unrecognized pension and postretirement benefit costs, net of tax: Balance at beginning of period (3,569 ) (3,421 ) Remeasurement of plan assets and liabilities (net of tax effect of $0 and $214) (1) — 355 Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 (609 ) — Reclassification to earnings (net of tax effect of $24 and $37) 77 63 Balance at end of period (4,101 ) (3,003 ) Accumulated other comprehensive income (loss) at end of period $ (5,346 ) $ (4,202 ) (1) See note 7 for further information about plan curtailments resulting in remeasurement of plan assets and liabilities. |
Schedule of Reclassifications from Accumulated Other Comprehensive Income (Loss) to Earnings | Detail of the gains (losses) reclassified from AOCI to the statements of consolidated income for the three and six months ended June 30, 2018 and 2017 is as follows (in millions): Three Months Ended June 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2018 2017 Unrealized gain (loss) on marketable securities: Realized loss on sale of securities $ — $ — Investment income and other Income tax (expense) benefit — — Income tax expense Impact on net income — — Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (6 ) (7 ) Interest expense Foreign exchange contracts (20 ) 7 Revenue Income tax (expense) benefit 6 — Income tax expense Impact on net income (20 ) — Net income Unrecognized pension and postretirement benefit costs: Prior service costs (50 ) (50 ) Investment income and other Income tax (expense) benefit 12 19 Income tax expense Impact on net income (38 ) (31 ) Net income Total amount reclassified for the period $ (58 ) $ (31 ) Net income Six Months Ended June 30: Amount Reclassified from AOCI Affected Line Item in the Income Statement 2018 2017 Unrealized gain (loss) on marketable securities: Realized loss on sale of securities (2 ) — Investment income and other Income tax (expense) benefit 1 — Income tax expense Impact on net income (1 ) — Net income Unrealized gain (loss) on cash flow hedges: Interest rate contracts (12 ) (14 ) Interest expense Foreign exchange contracts (62 ) 32 Revenue Income tax (expense) benefit 18 (7 ) Income tax expense Impact on net income (56 ) 11 Net income Unrecognized pension and postretirement benefit costs: Prior service costs (101 ) (100 ) Investment income and other Income tax (expense) benefit 24 37 Income tax expense Impact on net income (77 ) (63 ) Net income Total amount reclassified for the period $ (134 ) $ (52 ) Net income |
Schedule of Deferred Compensation and Treasury Stock Activity | Activity in the deferred compensation program for the six months ended June 30, 2018 and 2017 is as follows (in millions): 2018 2017 Shares Dollars Shares Dollars Deferred Compensation Obligations: Balance at beginning of period $ 37 $ 45 Reinvested dividends 1 1 Benefit payments (7 ) (10 ) Balance at end of period $ 31 $ 36 Treasury Stock: Balance at beginning of period (1 ) $ (37 ) (1 ) $ (45 ) Reinvested dividends — (1 ) — (1 ) Benefit payments — 7 — 10 Balance at end of period (1 ) $ (31 ) (1 ) $ (36 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information for the three and six months ended June 30, 2018 and 2017 is as follows (in millions): Three Months Ended Six Months Ended 2018 2017 2018 2017 Revenue: U.S. Domestic Package $ 10,354 $ 9,741 $ 20,581 $ 19,277 International Package 3,602 3,171 7,135 6,245 Supply Chain & Freight 3,500 3,015 6,853 5,915 Consolidated $ 17,456 $ 15,927 $ 34,569 $ 31,437 Operating Profit: U.S. Domestic Package $ 939 $ 1,255 $ 1,695 $ 2,205 International Package 618 570 1,212 1,088 Supply Chain & Freight 216 212 386 361 Consolidated $ 1,773 $ 2,037 $ 3,293 $ 3,654 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 six months ended June 30, 2018 and 2017 (in millions, except per share amounts): Three Months Ended Six Months Ended 2018 2017 2018 2017 Numerator: Net income attributable to common shareowners $ 1,485 $ 1,384 $ 2,830 $ 2,550 Denominator: Weighted average shares 861 867 861 868 Deferred compensation obligations 1 1 1 1 Vested portion of restricted units 4 4 4 4 Denominator for basic earnings per share 866 872 866 873 Effect of dilutive securities: Restricted units 3 3 3 3 Stock options 1 1 1 1 Denominator for diluted earnings per share 870 876 870 877 Basic earnings per share $ 1.71 $ 1.59 $ 3.27 $ 2.92 Diluted earnings per share $ 1.71 $ 1.58 $ 3.25 $ 2.91 |
DERIVATIVE INSTRUMENTS AND RI35
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | As of June 30, 2018 and December 31, 2017 , the notional amounts of our outstanding derivative positions were as follows (in millions): June 30, 2018 December 31, 2017 Currency hedges: Euro EUR 4,642 EUR 4,942 British Pound Sterling GBP 1,778 GBP 1,736 Canadian Dollar CAD 1,410 CAD 1,259 Mexican Peso MXN — MXN 169 Singapore Dollar SGD 27 SGD 11 Interest rate hedges: Fixed to Floating Interest Rate Swaps USD 4,674 USD 5,424 Floating to Fixed Interest Rate Swaps USD 778 USD 778 Investment market price hedges: Marketable Securities EUR — EUR 64 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of Offset had been Applied Asset Derivatives Balance Sheet Location June 30, December 31, June 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current assets Level 2 $ 46 $ 2 $ 22 $ — Interest rate contracts Other current assets Level 2 6 1 6 1 Foreign exchange contracts Other non-current assets Level 2 87 1 51 — Interest rate contracts Other non-current assets Level 2 14 59 3 43 Derivatives not designated as hedges: Foreign exchange contracts Other current assets Level 2 3 18 3 17 Foreign exchange contracts Other non-current assets Level 2 1 — 1 — Interest rate contracts Other non-current assets Level 2 22 26 22 26 Total Asset Derivatives $ 179 $ 107 $ 108 $ 87 Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of Offset had been Applied Liability Derivatives Balance Sheet Location June 30, December 31, June 30, December 31, Derivatives designated as hedges: Foreign exchange contracts Other current liabilities Level 2 $ 35 $ 93 $ 11 $ 91 Foreign exchange contracts Other non-current liabilities Level 2 54 194 18 193 Interest rate contracts Other non-current liabilities Level 2 60 28 49 12 Derivatives not designated as hedges: Foreign exchange contracts Other current liabilities Level 2 1 1 1 — Investment market price contracts Other current liabilities Level 2 — 16 — 16 Foreign exchange contracts Other non-current liabilities Level 2 1 — 1 — Total Liability Derivatives $ 151 $ 332 $ 80 $ 312 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following table indicates the amount of gains and losses that have been recognized in AOCI within foreign currency translation adjustment for the three and six months ended June 30, 2018 and 2017 for those instruments designated as net investment hedges (in millions): Three Months Ended June 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2018 2017 Foreign denominated debt $ 218 $ (210 ) Total $ 218 $ (210 ) Six Months Ended June 30: Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt (Effective Portion) 2018 2017 Foreign denominated debt $ 138 (247 ) Total $ 138 $ (247 ) The following table indicates the amount of gains and losses that have been recognized in AOCI for the three and six months ended June 30, 2018 and 2017 for those derivatives designated as cash flow hedges (in millions): Three Months Ended June 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2018 2017 Interest rate contracts $ 1 $ — Foreign exchange contracts 411 (243 ) Total $ 412 $ (243 ) Six Months Ended June 30: Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) 2018 2017 Interest rate contracts $ 2 $ — Foreign exchange contracts 275 (290 ) Total $ 277 $ (290 ) |
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 six months ended June 30, 2018 and 2017 (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 2018 2017 2018 2017 Three Months Ended June 30: Interest rate contracts Interest Expense $ (19 ) $ 2 Fixed-Rate Debt Interest Expense $ 19 $ (2 ) Six Months Ended June 30: Interest rate contracts Interest Expense $ (73 ) $ (22 ) Fixed-Rate Debt Interest Expense $ 73 $ 22 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 six months ended June 30, 2018 and 2017 (in millions): Derivative Instruments Not Designated in Hedging Relationships Location of Gain (Loss) Recognized in Income Amount of Gain (Loss) Recognized in Income 2018 2017 Three Months Ended June 30: Interest rate contracts Interest expense $ (2 ) $ (2 ) Foreign exchange contracts Investment income and other (67 ) 14 Investment market price contracts Investment income and other — (18 ) Total $ (69 ) $ (6 ) Six Months Ended June 30: Interest rate contracts Interest expense $ (4 ) $ (4 ) Foreign exchange contracts Investment income and other (59 ) $ 20 Investment market price contracts Investment income and other 16 8 Total $ (47 ) $ 24 |
RECENT ACCOUNTING PRONOUNCEME36
RECENT ACCOUNTING PRONOUNCEMENTS - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Hedge margin liabilities | $ 82 | $ 82 | $ 17 | ||
Income Tax Expense (Benefit) | |||||
Income tax benefit | (441) | $ (735) | (757) | $ (1,279) | |
Retained earnings | 7,665 | 7,665 | 5,852 | ||
Accumulated other comprehensive loss | (5,346) | (4,202) | (5,346) | (4,202) | (4,867) |
Non-Current Investments and Restricted Cash | 306 | 306 | 483 | ||
Operating Leases, Future Minimum Payments Due | 1,637 | ||||
Revenues | 17,456 | 15,927 | 34,569 | 31,437 | |
Operating expenses | $ 15,683 | $ 13,890 | $ 31,276 | $ 27,783 | |
Restatement | |||||
Income Tax Expense (Benefit) | |||||
Retained earnings | 735 | ||||
Accumulated other comprehensive loss | $ 735 |
RECENT ACCOUNTING PRONOUNCEME37
RECENT ACCOUNTING PRONOUNCEMENTS - Balance Sheet Impact (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Other current assets | $ 1,270 | $ 1,303 |
Total Current Assets | 13,874 | 15,718 |
Deferred income tax assets | 210 | 266 |
Total Assets | 45,223 | 45,574 |
Liabilities: | ||
Accounts payable | 3,785 | 3,934 |
Accrued wages and withholdings | 2,549 | 2,608 |
Other current liabilities | 934 | |
Total Current Liabilities | 11,488 | 12,886 |
Deferred income tax liabilities | 975 | 756 |
Shareowners' Equity: | ||
Retained earnings | 7,665 | 5,852 |
Total Shareowners’ Equity | 2,356 | 1,024 |
Total Liabilities and Shareowners’ Equity | $ 45,223 | 45,574 |
Previously Reported | ||
Assets | ||
Other current assets | 1,133 | |
Total Current Assets | 15,548 | |
Deferred income tax assets | 265 | |
Total Assets | 45,403 | |
Liabilities: | ||
Accounts payable | 3,872 | |
Accrued wages and withholdings | 2,521 | |
Other current liabilities | 905 | |
Total Current Liabilities | 12,708 | |
Deferred income tax liabilities | 757 | |
Shareowners' Equity: | ||
Retained earnings | 5,858 | |
Total Shareowners’ Equity | 1,030 | |
Total Liabilities and Shareowners’ Equity | 45,403 | |
Restatement | ||
Shareowners' Equity: | ||
Retained earnings | 735 | |
ASU 2014-09 | Restatement | ||
Assets | ||
Other current assets | 170 | |
Total Current Assets | 170 | |
Deferred income tax assets | 1 | |
Total Assets | 171 | |
Liabilities: | ||
Accounts payable | 62 | |
Accrued wages and withholdings | 87 | |
Other current liabilities | 29 | |
Total Current Liabilities | 178 | |
Deferred income tax liabilities | (1) | |
Shareowners' Equity: | ||
Retained earnings | (6) | |
Total Shareowners’ Equity | (6) | |
Total Liabilities and Shareowners’ Equity | $ 171 |
RECENT ACCOUNTING PRONOUNCEME38
RECENT ACCOUNTING PRONOUNCEMENTS - Income Statement Impact (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 17,456 | $ 15,927 | $ 34,569 | $ 31,437 |
Operating Expenses: | ||||
Compensation and benefits | 9,024 | 8,284 | 18,069 | 16,595 |
Repairs and maintenance | 423 | 392 | 857 | 782 |
Depreciation and amortization | 542 | 562 | 1,138 | 1,116 |
Purchased transportation | 3,209 | 2,614 | 6,354 | 5,159 |
Fuel | 852 | 616 | 1,602 | 1,237 |
Other occupancy | 321 | 264 | 682 | 563 |
Other expenses | 1,312 | 1,158 | 2,574 | 2,331 |
Operating expenses | 15,683 | 13,890 | 31,276 | 27,783 |
Operating Profit | 1,773 | 2,037 | 3,293 | 3,654 |
Other Income and (Expense): | ||||
Investment income and other | 302 | 193 | 596 | 388 |
Interest expense | (149) | (111) | (302) | (213) |
Total Other Income and (Expense) | 153 | 82 | 294 | 175 |
Income Before Income Taxes | 1,926 | 2,119 | 3,587 | 3,829 |
Income Tax Expense | 441 | 735 | 757 | 1,279 |
Net Income | $ 1,485 | $ 1,384 | $ 2,830 | $ 2,550 |
Basic Earnings Per Share | $ 1.71 | $ 1.59 | $ 3.27 | $ 2.92 |
Diluted Earnings Per Share | $ 1.71 | $ 1.58 | $ 3.25 | $ 2.91 |
Previously Reported | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 15,750 | $ 31,065 | ||
Operating Expenses: | ||||
Compensation and benefits | 8,105 | 16,236 | ||
Repairs and maintenance | 392 | 782 | ||
Depreciation and amortization | 562 | 1,116 | ||
Purchased transportation | 2,443 | 4,809 | ||
Fuel | 616 | 1,237 | ||
Other occupancy | 264 | 563 | ||
Other expenses | 1,152 | 2,322 | ||
Operating expenses | 13,534 | 27,065 | ||
Operating Profit | 2,216 | 4,000 | ||
Other Income and (Expense): | ||||
Investment income and other | 14 | 29 | ||
Interest expense | (111) | (213) | ||
Total Other Income and (Expense) | (97) | (184) | ||
Income Before Income Taxes | 2,119 | 3,816 | ||
Income Tax Expense | 735 | 1,274 | ||
Net Income | $ 1,384 | $ 2,542 | ||
Basic Earnings Per Share | $ 1.59 | $ 2.91 | ||
Diluted Earnings Per Share | $ 1.58 | $ 2.90 | ||
Restatement | ASU 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 177 | $ 372 | ||
Operating Expenses: | ||||
Compensation and benefits | 0 | 0 | ||
Repairs and maintenance | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | ||
Purchased transportation | 171 | 350 | ||
Fuel | 0 | 0 | ||
Other occupancy | 0 | 0 | ||
Other expenses | 6 | 9 | ||
Operating expenses | 177 | 359 | ||
Operating Profit | 0 | 13 | ||
Other Income and (Expense): | ||||
Investment income and other | 0 | 0 | ||
Interest expense | 0 | 0 | ||
Total Other Income and (Expense) | 0 | 0 | ||
Income Before Income Taxes | 0 | 13 | ||
Income Tax Expense | 0 | 5 | ||
Net Income | $ 0 | $ 8 | ||
Basic Earnings Per Share | $ 0 | $ 0.01 | ||
Diluted Earnings Per Share | $ 0 | $ 0.01 | ||
Restatement | ASU 2017-07 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 0 | $ 0 | ||
Operating Expenses: | ||||
Compensation and benefits | 179 | 359 | ||
Repairs and maintenance | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | ||
Purchased transportation | 0 | 0 | ||
Fuel | 0 | 0 | ||
Other occupancy | 0 | 0 | ||
Other expenses | 0 | 0 | ||
Operating expenses | 179 | 359 | ||
Operating Profit | (179) | (359) | ||
Other Income and (Expense): | ||||
Investment income and other | 179 | 359 | ||
Interest expense | 0 | 0 | ||
Total Other Income and (Expense) | 179 | 359 | ||
Income Before Income Taxes | 0 | 0 | ||
Income Tax Expense | 0 | 0 | ||
Net Income | $ 0 | $ 0 | ||
Basic Earnings Per Share | $ 0 | $ 0 | ||
Diluted Earnings Per Share | $ 0 | $ 0 |
RECENT ACCOUNTING PRONOUNCEME39
RECENT ACCOUNTING PRONOUNCEMENTS - Cash Flow Impact (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net Income | $ 1,485 | $ 1,384 | $ 2,830 | $ 2,550 |
Deferred tax (benefit) expense | 142 | 180 | ||
Other assets | 1,345 | 420 | ||
Accounts payable | (260) | (530) | ||
Accrued wages and withholdings | (9) | (13) | ||
Other liabilities | 22 | (458) | ||
Net cash from operating activities | 7,200 | 2,621 | ||
Purchases of marketable securities | (446) | (1,082) | ||
Net cash used in investing activities | (2,820) | (2,025) | ||
Net decrease in cash, cash equivalents and restricted cash | 722 | 70 | ||
Beginning of period | 3,769 | 3,921 | ||
End of period | $ 4,491 | 3,991 | $ 4,491 | 3,991 |
Previously Reported | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net Income | 1,384 | 2,542 | ||
Deferred tax (benefit) expense | 175 | |||
Other assets | 440 | |||
Accounts payable | (534) | |||
Accrued wages and withholdings | (18) | |||
Other liabilities | (456) | |||
Net cash from operating activities | 2,621 | |||
Purchases of marketable securities | (1,084) | |||
Net cash used in investing activities | (2,027) | |||
Net decrease in cash, cash equivalents and restricted cash | 68 | |||
Beginning of period | 3,476 | |||
End of period | 3,544 | 3,544 | ||
ASU 2014-09 | Restatement | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net Income | 0 | 8 | ||
Deferred tax (benefit) expense | 5 | |||
Other assets | (20) | |||
Accounts payable | 4 | |||
Accrued wages and withholdings | 5 | |||
Other liabilities | (2) | |||
Net cash from operating activities | 0 | |||
Net cash used in investing activities | 0 | |||
Net decrease in cash, cash equivalents and restricted cash | 0 | |||
Beginning of period | 0 | |||
End of period | 0 | 0 | ||
ASU 2016-18 | Restatement | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net Income | 0 | |||
Net cash from operating activities | 0 | |||
Purchases of marketable securities | 2 | |||
Net cash used in investing activities | 2 | |||
Net decrease in cash, cash equivalents and restricted cash | 2 | |||
Beginning of period | 445 | |||
End of period | $ 447 | $ 447 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of Revenue | ||||
Revenues | $ 17,456 | $ 15,927 | $ 34,569 | $ 31,437 |
Forwarding | ||||
Disaggregation of Revenue | ||||
Revenues | 1,659 | 1,347 | 3,264 | 2,613 |
Logistics | ||||
Disaggregation of Revenue | ||||
Revenues | 784 | 718 | 1,566 | 1,458 |
Freight | ||||
Disaggregation of Revenue | ||||
Revenues | 853 | 755 | 1,630 | 1,462 |
Other | ||||
Disaggregation of Revenue | ||||
Revenues | 204 | 195 | 393 | 382 |
U.S | Next Day Air | ||||
Disaggregation of Revenue | ||||
Revenues | 1,830 | 1,752 | 3,614 | 3,417 |
U.S | Deferred | ||||
Disaggregation of Revenue | ||||
Revenues | 1,080 | 1,020 | 2,149 | 1,990 |
U.S | Ground | ||||
Disaggregation of Revenue | ||||
Revenues | 7,444 | 6,969 | 14,818 | 13,870 |
International | ||||
Disaggregation of Revenue | ||||
Revenues | 3,602 | 3,171 | 7,135 | 6,245 |
International | Domestic | ||||
Disaggregation of Revenue | ||||
Revenues | 700 | 623 | 1,416 | 1,236 |
International | Export | ||||
Disaggregation of Revenue | ||||
Revenues | 2,747 | 2,426 | 5,419 | 4,763 |
International | Cargo & Other | ||||
Disaggregation of Revenue | ||||
Revenues | 155 | 122 | 300 | 246 |
Supply Chain & Freight | Supply Chain & Freight | ||||
Disaggregation of Revenue | ||||
Revenues | 3,500 | 3,015 | 6,853 | 5,915 |
U.S. Domestic Package | U.S | ||||
Disaggregation of Revenue | ||||
Revenues | $ 10,354 | $ 9,741 | $ 20,581 | $ 19,277 |
Revenue Recognition - Narrative
Revenue Recognition - Narratives (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | |||||
Provisions for doubtful receivables | $ 29,000,000 | $ 24,000,000 | $ 41,000,000 | $ 63,000,000 | |
Contract assets | 248,000,000 | 248,000,000 | $ 170,000,000 | ||
Deferred revenue | 231,000,000 | 231,000,000 | 174,000,000 | ||
Contract liability, current | 8,000,000 | 8,000,000 | 31,000,000 | ||
Contract liability, noncurrent | $ 26,000,000 | $ 26,000,000 | $ 0 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Mar. 22, 2018 | Mar. 01, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 26, 2018 | Feb. 07, 2018 | Mar. 24, 2017 |
Stockholders Equity Note [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Cycle Period | 3 years | |||||||||
Stock compensation expense | $ 139 | $ 133 | $ 378 | $ 345 | ||||||
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 | $ 106.43 | $ 103.70 | $ 111.91 | |||||||
Award vesting period | 5 years | |||||||||
Long-Term Incentive Performance Award | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Closing New York Stock Exchange price | $ 111.40 | |||||||||
Weighted-average fair value of options granted (usd per share) | $ 137.53 | $ 119.29 | ||||||||
Nonqualified Stock Options [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Percentage of the award vesting at each anniversary date of the grant | 20.00% | |||||||||
Expiration period (in years) | 10 years | |||||||||
Award vesting period | 5 years | |||||||||
Stock options granted | 0 | 300,000 | 300,000 | |||||||
Weighted-average fair value of options granted (usd per share) | $ 104.45 | $ 106.43 | $ 106.87 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value of Employee Stock Options Granted as Determined by Black-Scholes Valuation Model Assumptions (Detail) - $ / shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Nonqualified Stock Options [Member] | ||
Stockholders Equity Note [Line Items] | ||
Risk-free interest rate | 2.84% | 2.15% |
Expected volatility | 16.72% | 17.81% |
Weighted-average fair value of options granted (usd per share) | $ 15.23 | $ 14.70 |
Expected dividend yield | 2.93% | 2.89% |
Expected life (in years) | 7 years 6 months | 7 years 6 months |
Long-Term Incentive Performance Award | ||
Stockholders Equity Note [Line Items] | ||
Risk-free interest rate | 2.61% | 1.46% |
Expected volatility | 16.51% | 16.59% |
Weighted-average fair value of options granted (usd per share) | $ 137.53 | $ 119.29 |
Expected dividend yield | 123.46% | 113.55% |
Summary of Marketable Securitie
Summary of Marketable Securities (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | $ 77 | $ 152 |
Trading Securities, Gross Unrealized Gain | 0 | 16 |
Trading Securities, Gross Unrealized Loss | 0 | 0 |
Trading Securities | 77 | 168 |
Available-for-sale Securities, Amortized Cost Basis | 649 | 584 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | 1 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | (7) | (4) |
Available-for-sale Securities, Current | 643 | 581 |
Total Amortized Cost | 726 | 736 |
Marketable Securities, Gross Unrealized Gain | 1 | 17 |
Marketable Securities, Gross Unrealized Loss | (7) | (4) |
Total Estimated Fair Value | 720 | 749 |
Corporate debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | 75 | 75 |
Trading Securities, Gross Unrealized Gain | 0 | 0 |
Trading Securities, Gross Unrealized Loss | 0 | 0 |
Trading Securities | 75 | 75 |
Available-for-sale Securities, Amortized Cost Basis | 243 | 201 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 1 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | (2) | (1) |
Available-for-sale Securities, Current | 241 | 201 |
Carbon credit investments | ||
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | 77 | |
Trading Securities, Gross Unrealized Gain | 16 | |
Trading Securities, Gross Unrealized Loss | 0 | |
Trading Securities | 93 | |
U.S. government and agency debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 306 | 286 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | (4) | (3) |
Available-for-sale Securities, Current | 303 | 283 |
Mortgage and asset-backed debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 86 | 86 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | (1) | 0 |
Available-for-sale Securities, Current | 85 | 86 |
Equity securities | ||
Schedule of Marketable Securities [Line Items] | ||
Trading Securities, Short-term Investments, Amortized Cost | 2 | |
Trading Securities, Gross Unrealized Gain | 0 | |
Trading Securities, Gross Unrealized Loss | 0 | |
Trading Securities | 2 | |
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 | |
Non-U.S. government debt securities | ||
Schedule of Marketable Securities [Line Items] | ||
Available-for-sale Securities, Amortized Cost Basis | 14 | 9 |
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 | $ 14 | $ 9 |
Amortized Cost and Estimated Fa
Amortized Cost and Estimated Fair Value of Marketable Securities by Contractual Maturity (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Cost | ||
Due in one year or less | $ 193 | |
Due after one year through three years | 434 | |
Due after three years through five years | 24 | |
Due after five years | 73 | |
Marketable Securities, Debt Maturities, Amortized Cost, Total | 724 | |
Equity securities | 2 | |
Total Amortized Cost | 726 | $ 736 |
Estimated Fair Value | ||
Due in one year or less | 193 | |
Due after one year through three years | 430 | |
Due after three years through five years | 23 | |
Due after five years | 72 | |
Marketable Securities, Debt Maturities, Fair Value, Total | 718 | |
Equity securities | 2 | |
Total Estimated Fair Value | $ 720 | $ 749 |
INVESTMENTS AND RESTRICTED CA46
INVESTMENTS AND RESTRICTED CASH - Additional Information (Detail) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Gain (Loss) on Investments [Line Items] | |||
Non-Current Investments and Restricted Cash | $ 306,000,000 | $ 483,000,000 | |
Fair Value Inputs, Discount Rate | 8.11% | 7.56% | |
Fair value of unobservable assets measured on a recurring basis | $ 2,000,000 | 6,000,000 | |
Transfer between level 1 and level 2 | 0 | $ 0 | |
cash held in escrow [Member] | |||
Gain (Loss) on Investments [Line Items] | |||
Restricted Cash and Cash Equivalents, Noncurrent | 10,000,000 | 15,000,000 | |
Self-insurance requirements [Member] | |||
Gain (Loss) on Investments [Line Items] | |||
Non-Current Investments and Restricted Cash | 277,000,000 | 449,000,000 | |
Variable life insurance policy | |||
Gain (Loss) on Investments [Line Items] | |||
Non-Current Investments and Restricted Cash | $ 19,000,000 | $ 19,000,000 |
INVESTMENTS AND RESTRICTED CA47
INVESTMENTS AND RESTRICTED CASH - Cash Details (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 4,214 | $ 3,320 | $ 3,544 | |
Restricted cash | 277 | 449 | 447 | |
Total cash, cash equivalents and restricted cash | $ 4,491 | $ 3,769 | $ 3,991 | $ 3,921 |
Investments Measured at Fair Va
Investments Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 741 | $ 774 |
Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 720 | 749 |
Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 303 | 283 |
Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 85 | 86 |
Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 316 | 276 |
Marketable securities | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2 | 2 |
Marketable securities | Non-U.S. government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 14 | 9 |
Marketable securities | Carbon credit investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 93 | |
Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 21 | 25 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 322 | 395 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 303 | 376 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 303 | 283 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Non-U.S. government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Marketable securities | Carbon credit investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 93 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 19 | 19 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 417 | 373 |
Significant Other Observable Inputs (Level 2) | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 417 | 373 |
Significant Other Observable Inputs (Level 2) | Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 85 | 86 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 316 | 276 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2 | 2 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Non-U.S. government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 14 | 9 |
Significant Other Observable Inputs (Level 2) | Marketable securities | Carbon credit investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Significant Other Observable Inputs (Level 2) | Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 2 | 6 |
Significant Unobservable Inputs (Level 3) | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Mortgage and asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Non-U.S. government debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Marketable securities | Carbon credit investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Significant Unobservable Inputs (Level 3) | Other Non-Current Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 2 | $ 6 |
Property Plant and Equipment (D
Property Plant and Equipment (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 51,200 | $ 48,726 |
Less: Accumulated depreciation and amortization | (27,299) | (26,608) |
Property, plant and equipment, net | 23,901 | 22,118 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 9,435 | 9,365 |
Aircraft | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 16,811 | 16,248 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,777 | 1,582 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 4,195 | 4,035 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 4,114 | 3,934 |
Plant equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 9,952 | 9,387 |
Technology equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,001 | 1,907 |
Equipment under operating leases | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 0 | 29 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 2,915 | $ 2,239 |
Property Plant and Equipment -
Property Plant and Equipment - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Impairment charges on property plant and equipment | $ 0 | $ 0 | $ 0 | $ 0 |
Net Periodic Benefit Cost for P
Net Periodic Benefit Cost for Pension and Postretirement Benefit Plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Defined Benefit Pension Plan | U.S. Pension Benefits | ||||
Net Periodic Cost: | ||||
Service cost | $ 415 | $ 389 | $ 831 | $ 779 |
Interest cost | 450 | 462 | 899 | 924 |
Expected return on assets | (800) | (712) | (1,601) | (1,424) |
Amortization of prior service cost | 48 | 48 | 97 | 96 |
Net periodic benefit cost | 113 | 187 | 226 | 375 |
Defined Benefit Pension Plan | International Pension Benefits | ||||
Net Periodic Cost: | ||||
Service cost | 16 | 14 | 32 | 29 |
Interest cost | 11 | 10 | 23 | 20 |
Expected return on assets | (19) | (16) | (39) | (32) |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Net periodic benefit cost | 8 | 8 | 16 | 17 |
U.S. Postretirement Medical Benefits | ||||
Net Periodic Cost: | ||||
Service cost | 7 | 7 | 14 | 14 |
Interest cost | 26 | 28 | 52 | 56 |
Expected return on assets | (2) | (1) | (4) | (3) |
Amortization of prior service cost | 2 | 2 | 4 | 4 |
Net periodic benefit cost | $ 33 | $ 36 | $ 66 | $ 71 |
EMPLOYEE BENEFIT PLANS - Additi
EMPLOYEE BENEFIT PLANS - Additional Information (Detail) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($)Employees | Dec. 31, 2007USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, net actuarial gain | $ 569 | ||
Defined benefit plan, curtailments | 1,525 | ||
Defined benefit plan, net actuarial loss | $ 956 | ||
Defined benefit plan, assumptions used calculating benefit obligation, discount rate | 0.32% | ||
Defined benefit plan,actual return on plan assets | 2.75% | ||
Actuarial gain loss corridor threshold | 10.00% | ||
Multiemployer Plans, Payment Term | 44 years | ||
Number of employees under a national master agreement and various supplemental agreements with local unions affiliated with Teamsters | Employees | 280,000 | ||
Number of pilots under a collective bargaining agreement with the Independent Pilots Association | Employees | 2,700 | ||
Majority of ground mechanics not employed under agreements | Employees | 3,100 | ||
Central States Pension Fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Withdrawal liability | $ 6,100 | ||
Pension liability | $ 4,000 | ||
Multiemployer Plans, Pension [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Multi-employer Plans, Withdrawal Obligation, Fair Value Disclosure | 841 | $ 921 | |
Other noncurrent liabilities | Multiemployer Plans, Pension [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Multiemployer Plans, Withdrawal Obligation, Present Value | 856 | 859 | |
Other current liabilities | Multiemployer Plans, Pension [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Multiemployer Plans, Withdrawal Obligation, Present Value | $ 8 | $ 8 | |
Minimum [Member] | Non-union employees | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contribution percentage | 5.00% | ||
Maximum [Member] | Non-union employees | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contribution percentage | 8.00% | ||
Defined Benefit Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Estimated future employer contributions to defined benefit plan, current fiscal year | 48 | ||
Defined Benefit Pension Plan | U.S. Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amount contributed to company- sponsored benefit plans | $ 50 | ||
U.S. Postretirement Medical Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amount contributed to company- sponsored benefit plans | $ 42 | ||
Estimated future employer contributions to defined benefit plan, current fiscal year | 37 |
Allocation of Goodwill by Repor
Allocation of Goodwill by Reportable Segment (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 3,872 |
Acquired | 0 |
Currency / Other | (35) |
Ending balance | 3,837 |
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 | 435 |
Acquired | 0 |
Currency / Other | (11) |
Ending balance | 424 |
Supply Chain & Freight | |
Goodwill [Roll Forward] | |
Beginning balance | 2,722 |
Acquired | 0 |
Currency / Other | (24) |
Ending balance | $ 2,698 |
Summary of Intangible Assets (D
Summary of Intangible Assets (Detail) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,763 | $ 4,578 |
Accumulated Amortization | (2,735) | (2,614) |
Net Carrying Value | 2,028 | 1,964 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying value | 5 | |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying value | 200 | |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,507 | 3,273 |
Accumulated Amortization | (2,404) | (2,310) |
Net Carrying Value | 1,103 | 963 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 115 | 114 |
Accumulated Amortization | (23) | (10) |
Net Carrying Value | 92 | 104 |
Franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 145 | 144 |
Accumulated Amortization | (101) | (97) |
Net Carrying Value | 44 | 47 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 741 | 776 |
Accumulated Amortization | (182) | (160) |
Net Carrying Value | 559 | 616 |
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 | 55 | 71 |
Accumulated Amortization | (25) | (37) |
Net Carrying Value | $ 30 | $ 34 |
GOODWILL AND INTANGIBLE ASSET55
GOODWILL AND INTANGIBLE ASSETS (Narratives) (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment of finite lived intangible assets | $ 12 |
Carrying Value of Outstanding D
Carrying Value of Outstanding Debt (Detail) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jan. 15, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 23,629,000,000 | ||
Debt instrument, stated interest rate | 8.375% | ||
Total debt | $ 22,711,000,000 | $ 24,289,000,000 | |
Less current maturities | (2,591,000,000) | (4,011,000,000) | |
Long-Term Debt | 20,120,000,000 | 20,278,000,000 | |
Commercial Paper | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 2,530,000,000 | ||
Maturity - Minimum Date | Mar. 31, 2017 | ||
Maturity - Maximum Date | Dec. 31, 2018 | ||
Total debt | $ 2,530,000,000 | 3,203,000,000 | |
Senior notes | 5.50% stated rate | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 750,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2018 | ||
Debt instrument, stated interest rate | 5.50% | 5.50% | |
Total debt | $ 0 | 751,000,000 | |
Senior notes | 5.125% stated rate | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,000,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2019 | ||
Debt instrument, stated interest rate | 5.125% | ||
Total debt | $ 1,007,000,000 | 1,019,000,000 | |
Senior notes | 3.125% stated rate | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,500,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2021 | ||
Debt instrument, stated interest rate | 3.125% | ||
Total debt | $ 1,516,000,000 | 1,549,000,000 | |
Senior notes | 2.050% senior notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 700,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2021 | ||
Debt instrument, stated interest rate | 2.05% | ||
Total debt | $ 697,000,000 | 696,000,000 | |
Senior notes | 2.400% senior note | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2026 | ||
Total debt | $ 497,000,000 | 497,000,000 | |
Senior notes | 3.050% senior notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,000,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2027 | ||
Debt instrument, stated interest rate | 3.05% | ||
Total debt | $ 991,000,000 | 990,000,000 | |
Senior notes | 2.45% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,000,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2022 | ||
Debt instrument, stated interest rate | 2.45% | ||
Total debt | $ 956,000,000 | 979,000,000 | |
Senior notes | 2.350% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 600,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2022 | ||
Debt instrument, stated interest rate | 2.35% | ||
Total debt | $ 597,000,000 | 597,000,000 | |
Senior notes | 2.500% senior notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,000,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2023 | ||
Debt instrument, stated interest rate | 2.50% | ||
Total debt | $ 993,000,000 | 992,000,000 | |
Senior notes | 2.800% senior notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2024 | ||
Debt instrument, stated interest rate | 2.80% | ||
Total debt | $ 496,000,000 | 495,000,000 | |
Senior notes | 6.20% stated rate | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,500,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2038 | ||
Debt instrument, stated interest rate | 6.20% | ||
Total debt | $ 1,482,000,000 | 1,482,000,000 | |
Senior notes | 4.875% stated rate | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2040 | ||
Debt instrument, stated interest rate | 4.875% | ||
Total debt | $ 490,000,000 | 489,000,000 | |
Senior notes | 3.625% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 375,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2042 | ||
Debt instrument, stated interest rate | 3.625% | ||
Total debt | $ 368,000,000 | 368,000,000 | |
Senior notes | 3.400% senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2046 | ||
Debt instrument, stated interest rate | 3.40% | ||
Total debt | $ 491,000,000 | 491,000,000 | |
Senior notes | 3.750% senior notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,150,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2047 | ||
Debt instrument, stated interest rate | 3.75% | ||
Total debt | $ 1,136,000,000 | 1,135,000,000 | |
Senior notes | Floating Rate Senior Notes 2 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 350,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2021 | ||
Total debt | $ 348,000,000 | 348,000,000 | |
Senior notes | 8.375% debentures | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 424,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2029 | ||
Debt instrument, stated interest rate | 8.375% | ||
Total debt | $ 436,000,000 | 447,000,000 | |
Senior notes | 8.375% debentures | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 276,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2030 | ||
Total debt | $ 281,000,000 | 282,000,000 | |
Senior notes | Canadian senior note 2.125% | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 566,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2024 | ||
Debt instrument, stated interest rate | 2.125% | ||
Total debt | $ 563,000,000 | 593,000,000 | |
Senior notes | Floating rate senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 400,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2022 | ||
Total debt | $ 398,000,000 | 398,000,000 | |
Senior notes | Floating Rate Senior Notes 3 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 500,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2023 | ||
Total debt | $ 499,000,000 | 496,000,000 | |
Senior notes | Floating Rate Senior Notes 4 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 1,043,000,000 | ||
Maturity - Minimum Date | Dec. 31, 2049 | ||
Maturity - Maximum Date | Dec. 31, 2067 | ||
Total debt | $ 1,030,000,000 | 1,032,000,000 | |
Capital Lease Obligations | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 563,000,000 | ||
Maturity - Minimum Date | Dec. 31, 2018 | ||
Maturity - Maximum Date | Dec. 31, 3005 | ||
Total debt | $ 563,000,000 | 500,000,000 | |
Pound Sterling notes | 5.500% notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 88,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2031 | ||
Debt instrument, stated interest rate | 5.50% | ||
Total debt | $ 87,000,000 | 84,000,000 | |
Pound Sterling notes | 5.125% notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 600,000,000 | ||
Maturity - Maximum Date | Jan. 1, 2022 | ||
Debt instrument, stated interest rate | 5.125% | ||
Total debt | $ 566,000,000 | 586,000,000 | |
Euro Senior Notes | 0.375% Euro Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 816,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2023 | ||
Debt instrument, stated interest rate | 0.375% | ||
Total debt | $ 810,000,000 | 832,000,000 | |
Euro Senior Notes | 1.625% Euro Senior Notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 816,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2025 | ||
Debt instrument, stated interest rate | 1.625% | ||
Total debt | $ 811,000,000 | 833,000,000 | |
Euro Senior Notes | 1.000% notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 583,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2028 | ||
Debt instrument, stated interest rate | 1.00% | ||
Total debt | $ 579,000,000 | 595,000,000 | |
Euro Senior Notes | 1.500% Euro Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 583,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2032 | ||
Debt instrument, stated interest rate | 1.50% | ||
Total debt | $ 578,000,000 | 594,000,000 | |
Euro Senior Notes | Floating-rate senior notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 583,000,000 | ||
Maturity - Maximum Date | Dec. 31, 2020 | ||
Total debt | $ 581,000,000 | 598,000,000 | |
Facility notes and bonds | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 320,000,000 | ||
Maturity - Minimum Date | Dec. 31, 2029 | ||
Maturity - Maximum Date | Dec. 31, 2045 | ||
Total debt | $ 321,000,000 | 319,000,000 | |
Other debt | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 13,000,000 | ||
Maturity - Minimum Date | Dec. 31, 2018 | ||
Maturity - Maximum Date | Dec. 31, 2022 | ||
Total debt | $ 13,000,000 | $ 19,000,000 |
DEBT AND FINANCING ARRANGEMEN57
DEBT AND FINANCING ARRANGEMENTS - Additional Information (Detail) € in Millions | Jan. 15, 2018USD ($) | May 11, 2017 | Jun. 30, 2018USD ($)Credit_Agreements | Jun. 30, 2018EUR (€)Credit_Agreements | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||||
Debt instrument, stated interest rate | 8.375% | 8.375% | |||
Face value of debt instrument | $ 23,629,000,000 | ||||
Number of credit agreements | Credit_Agreements | 2 | 2 | |||
Covenants limit, amount of secured indebtedness and debt in sale-leaseback transactions, percentage of net tangible assets | 10.00% | 10.00% | |||
Covenants that limit the amount of secured indebtedness and amount of attributable debt in sale-leaseback transactions, net tangible assets amount | $ 2,787,000,000 | ||||
Sale-lease back outstanding | 0 | ||||
Secured debt outstanding | 0 | ||||
Long-term debt fair value | 23,405,000,000 | $ 25,206,000,000 | |||
U.S. Commercial Paper Program | |||||
Debt Instrument [Line Items] | |||||
Commercial paper program, authorized to borrow | $ 10,000,000,000 | ||||
Foreign Commercial Paper Program | |||||
Debt Instrument [Line Items] | |||||
Commercial paper program, authorized to borrow | € | € 5,000 | ||||
Revolving Credit Facility Expiring In 2015 | |||||
Debt Instrument [Line Items] | |||||
Maturity | Mar. 22, 2019 | ||||
Revolving credit facilities | $ 4,500,000,000 | ||||
Applicable margin for base rate below LIBOR | 1.00% | ||||
Revolving Credit Facility Expiring In 2017 | |||||
Debt Instrument [Line Items] | |||||
Maturity | Mar. 24, 2022 | ||||
Revolving credit facilities | $ 3,000,000,000 | ||||
Applicable margin for base rate below LIBOR | 1.00% | ||||
Revolving Credit Facility Expiring In 2017 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin for base rate below LIBOR | 0.00% | ||||
Senior notes | 2.350% senior notes | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, stated interest rate | 2.35% | 2.35% | |||
Face value of debt instrument | $ 600,000,000 | ||||
Senior notes | 5.125% stated rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, stated interest rate | 5.125% | 5.125% | |||
Face value of debt instrument | $ 1,000,000,000 | ||||
Senior notes | 5.50% stated rate | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, stated interest rate | 5.50% | 5.50% | 5.50% | ||
Face value of debt instrument | $ 750,000,000 | ||||
Repayments of Debt | $ 750,000,000 | ||||
Commercial Paper | |||||
Debt Instrument [Line Items] | |||||
Face value of debt instrument | 2,530,000,000 | ||||
Commercial Paper | U.S. Commercial Paper Program | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 2,343,000,000 | ||||
Debt, weighted average interest rate | 1.88% | 1.88% | |||
Commercial Paper | Foreign Commercial Paper Program | |||||
Debt Instrument [Line Items] | |||||
Total debt | $ 187,000,000 | € 0 | |||
Debt, weighted average interest rate | 0.41% | 0.41% | |||
LIBOR rate | Revolving Credit Facility Expiring In 2015 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rates | 0.10% | ||||
LIBOR rate | Revolving Credit Facility Expiring In 2015 | 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 | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rates | 0.00% | ||||
Citibank base rate | Revolving Credit Facility Expiring In 2015 | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rates | 1.00% | ||||
Federal Funds Rate | Revolving Credit Facility Expiring In 2015 | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rates | 0.50% | ||||
Federal Funds Rate | Revolving Credit Facility Expiring In 2017 | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rates | 0.50% | ||||
LIBOR | Senior notes | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rates | 0.38% |
LEGAL PROCEEDINGS AND CONTING58
LEGAL PROCEEDINGS AND CONTINGENCIES (Narratives) (Details) € in Millions, $ in Millions | Mar. 08, 2018EUR (€) | May 25, 2017USD ($) | Apr. 30, 2018Defendants | Aug. 31, 2016Defendants | Jun. 30, 2018USD ($) |
U.S. District Court for the Southern District of New York | |||||
Loss Contingencies | |||||
Settlement amount | $ 9.4 | ||||
Penalties related to settlement | $ 237.6 | ||||
Loss Contingency Accrual | $ 9.4 | ||||
Estimated losses | $ 247 | ||||
CNMC | |||||
Loss Contingencies | |||||
Settlement amount | € | € 19.2 | ||||
Number of defendants | Defendants | 10 | ||||
Turkish Competition Authority | |||||
Loss Contingencies | |||||
Number of defendants | Defendants | 32 |
SHAREOWNERS' EQUITY - Additiona
SHAREOWNERS' EQUITY - Additional Information (Detail) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Jun. 30, 2018USD ($)optionVoteClasses_of_Common_Stock$ / sharesshares | Jun. 30, 2017USD ($)shares | May 01, 2016USD ($) | |
Stockholders Equity Note [Line Items] | |||
Classes of Common Stock, Number | Classes_of_Common_Stock | 2 | ||
Preferred stock, shares authorized | shares | 200,000,000 | ||
Preferred stock, par value | $ / shares | $ 0.01 | ||
Preferred stock, issued | shares | 0 | ||
Common stock authorized for purchase, amount | $ | $ 8,000 | ||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ | $ 3,828 | ||
Noncontrolling Interest, Period Increase (Decrease) | $ | $ 2 | $ 6 | |
Class A common stock | |||
Stockholders Equity Note [Line Items] | |||
Votes per common share | Vote | 10 | ||
Common stock, par value | $ / shares | $ 0.01 | ||
Common stock, shares authorized | shares | 4,600,000,000 | ||
Total of Class A and Class B common stock, repurchased, value | $ | $ 0 | $ 0 | |
Common stock purchases | shares | 2,000,000 | 2,000,000 | |
Class B common stock | |||
Stockholders Equity Note [Line Items] | |||
Votes per common share | Vote | 1 | ||
Common stock, par value | $ / shares | $ 0.01 | ||
Common stock, shares authorized | shares | 5,600,000,000 | ||
Total of Class A and Class B common stock, repurchased, value | $ | $ 0 | $ 0 | |
Common stock purchases | shares | 2,000,000 | 6,000,000 | |
Class A and B Common Stock | |||
Stockholders Equity Note [Line Items] | |||
Total of Class A and Class B common stock, repurchased, value | $ | $ 511 | $ 901 | |
Common stock purchases | shares | 4,400,000 | 8,400,000 | |
Options Held [Member] | |||
Stockholders Equity Note [Line Items] | |||
Option premiums received | $ | $ (19) | $ 52 | |
Number of options open | option | 700,000 | ||
Forward Contract Indexed to Issuer's Equity, Forward Rate Per Share | $ / shares | $ 99.98 |
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 | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stockholders Equity Note [Roll Forward] | ||||||
Balance at beginning of period | $ 994 | |||||
Net income attributable to common shareowners | $ 1,485 | $ 1,384 | 2,830 | $ 2,550 | ||
Balance at end of period | 2,328 | $ 2,328 | ||||
Common stock, cash paid for dividends, per share | $ 1.82 | $ 1.66 | ||||
Class A common stock | ||||||
Stockholders Equity Note [Roll Forward] | ||||||
Balance at beginning of period | $ 2 | $ 2 | ||||
Balance at beginning of period, shares | 173 | 180 | ||||
Common stock purchases | $ 0 | $ 0 | ||||
Common stock purchases, shares | (2) | (2) | ||||
Stock award plans | $ 0 | $ 0 | ||||
Stock award plans, shares | 3 | 4 | ||||
Common stock issuances | $ 0 | $ 0 | ||||
Common stock issuances, shares | 2 | 1 | ||||
Conversions of class A to class B common stock | $ 0 | $ 0 | ||||
Conversions of Class A to Class B common stock, shares | (8) | (5) | ||||
Balance at end of period | $ 2 | $ 2 | $ 2 | $ 2 | ||
Balance at end of period, shares | 168 | 178 | 168 | 178 | ||
Class B common stock | ||||||
Stockholders Equity Note [Roll Forward] | ||||||
Balance at beginning of period | $ 7 | $ 7 | ||||
Balance at beginning of period, shares | 687 | 689 | ||||
Common stock purchases | $ 0 | $ 0 | ||||
Common stock purchases, shares | (2) | (6) | ||||
Conversions of class A to class B common stock | $ 0 | $ 0 | ||||
Conversions of Class A to Class B common stock, shares | (8) | (5) | ||||
Balance at end of period | $ 7 | $ 7 | $ 7 | $ 7 | ||
Balance at end of period, shares | 693 | 688 | 693 | 688 | ||
Additional Paid-in Capital | ||||||
Stockholders Equity Note [Roll Forward] | ||||||
Balance at beginning of period | $ 0 | $ 0 | ||||
Common stock purchases | (383) | (412) | ||||
Stock award plans | 170 | 157 | ||||
Common stock issuances | 232 | 203 | ||||
Option premiums received (paid) | (19) | 52 | ||||
Balance at end of period | $ 0 | $ 0 | 0 | 0 | ||
Retained Earnings | ||||||
Stockholders Equity Note [Roll Forward] | ||||||
Balance at beginning of period | 5,852 | 4,880 | ||||
Common stock purchases | (128) | (489) | ||||
Net income attributable to common shareowners | 2,830 | 2,550 | ||||
Balance at end of period | $ 7,665 | $ 5,446 | 7,665 | 5,446 | ||
Dividends ($0.91 and $0.83 per share) | $ (1,624) | $ (1,495) | ||||
Reclassification from AOCI pursuant to the early adoption of ASU 2018-02 | $ 735 | $ 0 |
Activity in Accumulated Other C
Activity in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | $ (4,867) | |||
Translation adjustment (net of tax effect of $(9) and $(14)) | $ (78) | $ 24 | (84) | $ 54 |
Current period changes in fair value (net of tax effect of $(1) and $0) | 0 | 1 | (3) | 1 |
Current period changes in fair value (net of tax effect of $(33) and $(17)) | 332 | (151) | 266 | (192) |
Balance at end of period | (5,346) | (4,202) | (5,346) | (4,202) |
Foreign currency translation gain (loss): | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (930) | (1,016) | ||
Translation adjustment (net of tax effect of $(9) and $(14)) | (84) | 54 | ||
Balance at end of period | (1,061) | (962) | (1,061) | (962) |
Unrealized gain (loss) on marketable securities, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (2) | (1) | ||
Current period changes in fair value (net of tax effect of $(1) and $0) | (4) | 1 | ||
Balance at end of period | (5) | 0 | (5) | 0 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 1 | 0 | ||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | (1) | 0 | ||
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (366) | (45) | ||
Current period changes in fair value (net of tax effect of $(33) and $(17)) | 210 | (181) | ||
Reclassification to earnings (net of tax effect of $12 and $(7)) | 56 | (11) | ||
Balance at end of period | (179) | (237) | (179) | (237) |
Reclassification to earnings, tax effect | 18 | (7) | ||
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance at beginning of period | (3,569) | (3,421) | ||
Remeasurement of plan assets and liabilities (net of tax effect of $0 and $214) (1) | 0 | 355 | ||
Reclassification to earnings (net of tax effect of $12 and $18) | 77 | 63 | ||
Balance at end of period | (4,101) | (3,003) | (4,101) | (3,003) |
Income Tax Expense Benefit [Member] | Unrealized gain (loss) on marketable securities, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 0 | 1 | 0 | |
Income Tax Expense Benefit [Member] | Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification to earnings, tax effect | 6 | 0 | 18 | (7) |
Income Tax Expense Benefit [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | 12 | 19 | 24 | 37 |
Net Income [Member] [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
TotalOtherComprehensiveIncomeReclassification, Net of Tax | (58) | (31) | (134) | (52) |
Net Income [Member] [Member] | Unrealized gain (loss) on marketable securities, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 0 | (1) | 0 | |
Net Income [Member] [Member] | Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification to earnings (net of tax effect of $12 and $(7)) | 20 | 0 | 56 | (11) |
Net Income [Member] [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification to earnings (net of tax effect of $12 and $18) | (38) | (31) | (77) | (63) |
Labor and Related Expense [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), Reclassification Adjustment from AOCI, before Tax | (50) | (50) | (101) | (100) |
Foreign exchange contracts | Interest Expense | Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | (20) | 7 | (62) | 32 |
Interest rate contracts | Interest Expense | Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | $ (6) | $ (7) | $ (12) | $ (14) |
Activity in Accumulated Other62
Activity in Accumulated Other Comprehensive Income (Loss) (Phantoms) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance at beginning of period | $ (4,867) | |||||
Change in foreign currency translation adjustment, net of tax | $ (78) | $ 24 | (84) | $ 54 | ||
Balance at end of period | (5,346) | (4,202) | (5,346) | (4,202) | ||
Foreign currency translation gain (loss): | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance at beginning of period | (930) | (1,016) | ||||
Change in foreign currency translation adjustment, net of tax | (84) | 54 | ||||
Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 | $ (47) | $ 0 | ||||
Balance at end of period | (1,061) | (962) | (1,061) | (962) | ||
Aggregate adjustment for the period, tax | 25 | (93) | ||||
Unrealized gain (loss) on marketable securities, net of tax: | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance at beginning of period | (2) | (1) | ||||
Balance at end of period | (5) | 0 | (5) | 0 | ||
Current period changes in fair value, tax effect | (1) | 0 | ||||
Reclassification to earnings, tax effect | 1 | 0 | ||||
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance at beginning of period | (366) | (45) | ||||
Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 | (79) | 0 | ||||
Balance at end of period | (179) | (237) | (179) | (237) | ||
Current period changes in fair value, tax effect | 67 | (109) | ||||
Reclassification to earnings, tax effect | 18 | (7) | ||||
Accumulated Defined Benefit Plans Adjustment [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance at beginning of period | (3,569) | (3,421) | ||||
Reclassification to retained earnings pursuant to the early adoption of ASU 2018-02 | $ (609) | $ 0 | ||||
Balance at end of period | $ (4,101) | $ (3,003) | (4,101) | (3,003) | ||
Reclassification to earnings, tax effect | 24 | 37 | ||||
Other Comprehensive Income (Loss), Defined Benefit Plan, Adjustment for Settlement or Curtailment Gain (Loss), Tax | $ 0 | $ 214 |
Activity in Deferred Compensati
Activity in Deferred Compensation Program (Detail) - USD ($) shares in Millions, $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Stockholders Equity Note [Roll Forward] | ||
Balance at beginning of period | (1) | |
Balance at end of period | (1) | |
Balance at beginning of period | $ 994 | |
Balance at end of period | $ 2,328 | |
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 | $ (37) | $ (45) |
Reinvested dividends | (1) | (1) |
Benefit payments | 7 | 10 |
Balance at end of period | (31) | (36) |
Deferred Compensation Obligations | ||
Stockholders Equity Note [Roll Forward] | ||
Balance at beginning of period | 37 | 45 |
Reinvested dividends | (1) | (1) |
Benefit payments | 7 | 10 |
Balance at end of period | $ 31 | $ 36 |
SHAREOWNERS' EQUITY Amounts Rec
SHAREOWNERS' EQUITY Amounts Reclassified from AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
TotalOtherComprehensiveIncomeReclassification, Net of Tax | $ (58) | $ (31) | $ (134) | $ (52) |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 1 | 0 | ||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | (1) | 0 | ||
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | 0 | 1 | 0 | |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Net Income [Member] [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 0 | (1) | 0 | |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | Investment income and other | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | 0 | (2) | 0 | |
Unrealized gain (loss) on cash flow hedges, net of tax: | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Reclassification to earnings, tax effect | 18 | (7) | ||
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Net of Tax | (56) | 11 | ||
Unrealized gain (loss) on cash flow hedges, net of tax: | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Reclassification to earnings, tax effect | 6 | 0 | 18 | (7) |
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 | (20) | 0 | (56) | 11 |
Unrealized gain (loss) on cash flow hedges, net of tax: | Interest rate contracts | Interest Expense | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | (6) | (7) | (12) | (14) |
Unrealized gain (loss) on cash flow hedges, net of tax: | Foreign exchange contracts | Interest Expense | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | (20) | 7 | (62) | 32 |
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 | 77 | 63 | ||
Accumulated Defined Benefit Plans Adjustment [Member] | Labor and Related Expense [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), Reclassification Adjustment from AOCI, before Tax | (50) | (50) | (101) | (100) |
Accumulated Defined Benefit Plans Adjustment [Member] | Income Tax Expense Benefit [Member] | ||||
AmountsReclassifiedFromAOCI [Line Items] | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | 12 | 19 | 24 | 37 |
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 | $ (38) | $ (31) | $ (77) | $ (63) |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2018Countries_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 | 200 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 17,456 | $ 15,927 | $ 34,569 | $ 31,437 |
Operating Profit | 1,773 | 2,037 | 3,293 | 3,654 |
U.S. Domestic Package | ||||
Segment Reporting Information [Line Items] | ||||
Operating Profit | 939 | 1,255 | 1,695 | 2,205 |
International Package | ||||
Segment Reporting Information [Line Items] | ||||
Operating Profit | 618 | 570 | 1,212 | 1,088 |
Supply Chain & Freight | ||||
Segment Reporting Information [Line Items] | ||||
Operating Profit | 216 | 212 | 386 | 361 |
U.S | U.S. Domestic Package | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 10,354 | 9,741 | 20,581 | 19,277 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 3,602 | 3,171 | 7,135 | 6,245 |
Supply Chain & Freight | Supply Chain & Freight | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 3,500 | $ 3,015 | $ 6,853 | $ 5,915 |
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 | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator: | ||||
Net income attributable to common shareowners | $ 1,485 | $ 1,384 | $ 2,830 | $ 2,550 |
Denominator: | ||||
Weighted average shares | 861 | 867 | 861 | 868 |
Deferred compensation obligations | 1 | 1 | 1 | 1 |
Vested portion of restricted shares | 4 | 4 | 4 | 4 |
Denominator for basic earnings per share | 866 | 872 | 866 | 873 |
Effect of dilutive securities: | ||||
Denominator for diluted earnings per share | 870 | 876 | 870 | 877 |
Basic earnings per share (usd per share) | $ 1.71 | $ 1.59 | $ 3.27 | $ 2.92 |
Diluted earnings per share (usd per share) | $ 1.71 | $ 1.58 | $ 3.25 | $ 2.91 |
Restricted performance units | ||||
Effect of dilutive securities: | ||||
Incremental common shares attributable to share-based payment arrangements | 3 | 3 | 3 | 3 |
Stock option plans | ||||
Effect of dilutive securities: | ||||
Incremental common shares attributable to share-based payment arrangements | 1 | 1 | 1 | 1 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
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 | 300,000 | 0 | 300,000 |
DERIVATIVE INSTRUMENTS AND RI69
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Collateral received under contractual provisions | $ 82 | $ 17 |
Derivative net liability position | 0 | 16 |
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 | $ 38 | |
Maximum term over hedging exposures to the variability of cash flow | 14 years | |
Change in Credit Rating | ||
Derivative [Line Items] | ||
Derivative, Additional Collateral, Obligation to Return Cash | $ 22 | $ 174 |
Notional Amounts of Outstanding
Notional Amounts of Outstanding Derivative Positions (Detail) € in Millions, £ in Millions, $ in Millions, $ in Millions, $ in Millions, $ in Millions | Jun. 30, 2018USD ($) | Jun. 30, 2018GBP (£) | Jun. 30, 2018SGD ($) | Jun. 30, 2018CAD ($) | Jun. 30, 2018MXN ($) | Jun. 30, 2018EUR (€) | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2017SGD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2017EUR (€) |
Derivative [Line Items] | ||||||||||||
Derivative, Notional Amount | £ 1,778 | $ 27 | $ 1,410 | $ 0 | € 4,642 | £ 1,736 | $ 11 | $ 1,259 | $ 169 | € 4,942 | ||
Fixed to Floating Interest Rate Swaps | ||||||||||||
Derivative [Line Items] | ||||||||||||
Derivative, Notional Amount | $ 4,674 | $ 5,424 | ||||||||||
Floating to Fixed Interest Rate Swaps | ||||||||||||
Derivative [Line Items] | ||||||||||||
Derivative, Notional Amount | $ 778 | $ 778 | ||||||||||
Investment market price contracts | ||||||||||||
Derivative [Line Items] | ||||||||||||
Derivative, Notional Amount | € | € 0 | € 64 |
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 | Jun. 30, 2018 | Dec. 31, 2017 |
Asset Derivatives | ||
Asset Derivatives | $ 179 | $ 107 |
Net Amounts if Right of Offset had been Applied | 108 | 87 |
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 151 | 332 |
Net Amounts if Right of Offset had been Applied | 80 | 312 |
Designated as Hedging Instrument | Foreign exchange contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 46 | 2 |
Net Amounts if Right of Offset had been Applied | 22 | 0 |
Designated as Hedging Instrument | Foreign exchange contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 87 | 1 |
Net Amounts if Right of Offset had been Applied | 51 | 0 |
Designated as Hedging Instrument | Foreign exchange contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 35 | 93 |
Net Amounts if Right of Offset had been Applied | 11 | 91 |
Designated as Hedging Instrument | Foreign exchange contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 54 | 194 |
Net Amounts if Right of Offset had been Applied | 18 | 193 |
Designated as Hedging Instrument | Interest rate contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 6 | 1 |
Net Amounts if Right of Offset had been Applied | 6 | 1 |
Designated as Hedging Instrument | Interest rate contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 14 | 59 |
Net Amounts if Right of Offset had been Applied | 3 | 43 |
Designated as Hedging Instrument | Interest rate contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 60 | 28 |
Net Amounts if Right of Offset had been Applied | 49 | 12 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Other current assets | ||
Asset Derivatives | ||
Asset Derivatives | 3 | 18 |
Net Amounts if Right of Offset had been Applied | 3 | 17 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 1 | 0 |
Net Amounts if Right of Offset had been Applied | 1 | 0 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 1 | 1 |
Net Amounts if Right of Offset had been Applied | 1 | 0 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Other non-current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 1 | 0 |
Net Amounts if Right of Offset had been Applied | 1 | 0 |
Not Designated as Hedging Instrument | Interest rate contracts | Other non-current assets | ||
Asset Derivatives | ||
Asset Derivatives | 22 | 26 |
Net Amounts if Right of Offset had been Applied | 22 | 26 |
Not Designated as Hedging Instrument | Investment market price contracts | Other current liabilities | ||
Derivative Liabilities [Abstract] | ||
Liability Derivatives | 0 | 16 |
Net Amounts if Right of Offset had been Applied | $ 0 | $ 16 |
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 | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments in Cash Flow Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | $ 412 | $ (243) | $ 277 | $ (290) |
Derivative Instruments in Cash Flow Hedging Relationships | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | 1 | 0 | 2 | 0 |
Derivative Instruments in Cash Flow Hedging Relationships | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | 411 | (243) | 275 | (290) |
Non-derivative Instruments in Net Investment Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | 218 | (210) | 138 | (247) |
Non-derivative Instruments in Net Investment Hedging Relationships | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | $ 218 | $ (210) | $ 138 | $ (247) |
Amount and Location in the In73
Amount and Location in the Income Statement for Derivatives Designated as Fair Value Hedges (Detail) - Fair Value Hedging - Interest Expense - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Amount of Gain (Loss) Recognized in Income | $ (19) | $ 2 | $ (73) | $ (22) |
Fixed-Rate Debt | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedged Items Amount of Gain (Loss) Recognized in Income | $ 19 | $ (2) | $ 73 | $ 22 |
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 | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (69) | $ (6) | $ (47) | $ 24 |
Interest rate contracts | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | (2) | (2) | (4) | (4) |
Foreign exchange contracts | Investment income and other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | (67) | 14 | (59) | 20 |
Investment market price contracts | Investment income and other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ 0 | $ (18) | $ 16 | $ 8 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax | |||||
Effective tax rate | 22.90% | 34.70% | 21.10% | 33.40% | |
Effective income tax rate reconciliation, excess tax benefit | 0.00% | 0.30% | 1.30% | 1.60% | |
Income tax benefit | $ (441) | $ (735) | $ (757) | $ (1,279) | |
Deferred Tax Liabilities, Undistributed Foreign Earnings | $ 310 | ||||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit) | 24 | ||||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Transition Tax For Accumulated Foreign Earnings, Provisional Income Tax Expense | $ 606 | ||||
VRT | Retirement benefits | |||||
Income Tax | |||||
Transformation cost | 263 | ||||
Income tax benefit | $ 63 |
TRANSFORMATION STRATEGY (Detail
TRANSFORMATION STRATEGY (Details) | 3 Months Ended |
Jun. 30, 2018USD ($) | |
Restructuring and Related Activities [Abstract] | |
Severance pay and benefits | $ 192,000,000 |
Other transformation related costs | $ 71 |