x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
58-2480149
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
55 Glenlake Parkway, N.E. Atlanta, Georgia
|
|
30328
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Class B common stock, par value $.01 per share
|
|
New York Stock Exchange
|
Floating Rate Senior Notes due 2020
|
|
New York Stock Exchange
|
1.625% Senior Notes due 2025
|
|
New York Stock Exchange
|
Large accelerated filer
x
|
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
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|
PART I
|
|
Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
|
|
Item 15.
|
Item 1.
|
Business
|
•
|
Continued rollout of telematics to our international delivery fleet to complement our telematics-enabled U.S. small package, freight forwarding and freight ground fleets. By the end of 2015, telematics was installed in close to 83,000 vehicles. Telematics helps UPS determine a truck’s performance and condition by capturing data on more than 200 related elements, including speed, RPM, oil pressure, seat belt use, number of times the vehicle is placed in reverse and idling time. Together, improved data and driver coaching help reduce fuel consumption, emissions and maintenance costs while improving driver safety. Additionally, customers experience more consistent pickup times and more reliable deliveries, thereby enhancing their profitability and competitiveness.
|
•
|
Expanded implementation of our On Road Integrated Optimization and Navigation system (ORION), which employs advanced algorithms to determine the optimal route for each delivery, while meeting service commitments. By the end of 2015, ORION was deployed to over 40,000 drivers.
|
•
|
Accelerated installations of our Next Generation Small Sort (NGSS) technology, which reduces the amount of memorization required to sort a package, thereby improving productivity and quality. Employees sort packages to bins tagged with flashing lights, rather than memorizing addresses, allowing us to dramatically reduce training time. NGSS has been deployed in about 300 sites globally.
|
•
|
Customers can select from same day, next day, two day and three day delivery alternatives. Many of these services offer options that enable customers to specify a time-of-day guarantee for their delivery (e.g., by 8:00 AM, 10:30 AM, noon, end of day, etc.).
|
•
|
In 2015, we expanded UPS Next Day Air Early (previously known as "UPS Next Day Air Early AM") service to over 4,000 additional ZIP Codes where previously only an end-of-day guarantee was available. This enhancement provides shippers and their customers the option of an earlier first-of-day delivery with commit times from 8:00 AM to 2:00 PM and enlarged our early delivery coverage. With this expansion, more of our customers can get critical shipments delivered earlier, across the U.S. and from around the world.
|
•
|
Customers can also leverage our extensive ground network to ship using our day-definite guaranteed ground service that serves every U.S. business and residential address. We deliver more ground packages than any other carrier, with average daily package volume of 13 million in the U.S., most within one to three business days.
|
•
|
We also offer UPS SurePost, an economy residential ground service for customers with non-urgent, lightweight residential shipments. UPS SurePost is a contractual residential ground service that combines the consistency and reliability of the UPS Ground network with final delivery often provided by the U.S. Postal Service.
|
•
|
Enhancing Cyber Week operations in the U.S. including ground and air pickup and delivery operations on Black Friday.
|
•
|
Adding weekend pickup, sort, and delivery operations as needed in the U.S. to smooth out geographical spikes in volume.
|
•
|
Utilizing additional aircraft and regional air hubs to add significant capacity to our air network during critical periods.
|
•
|
Adding new delivery vehicles and trailers to our fleet of 100,000 package cars, vans, tractors, trailers and other vehicles.
|
•
|
Automating facilities to expand our existing capabilities through enhanced technology.
|
•
|
Updating
www.ups.com
and expanding UPS communications to enhance the timeliness and relevance of alerts when service disruptions occur.
|
•
|
We offer more guaranteed time-definite express options (Express Plus, Express and Express Saver) than any other carrier.
|
•
|
In 2015, we undertook the largest one-time expansion in the history of UPS Worldwide Express service by adding coverage to more than 41,000 new postal codes around the world, creating earlier guaranteed-delivery options for customers that previously had only end-of-day guarantees. UPS Worldwide Express service offers guaranteed delivery on the next possible business day by 10:30 AM, noon or 2:00 PM, depending on the destination, and is available in 65 countries. We will continue this expansion in 2016, with plans to add UPS Worldwide Express service to additional countries and postal codes.
|
•
|
For international shipments that do not require express services, UPS Worldwide Expedited offers a reliable, deferred, guaranteed day-definite service option. In 2013, we tripled the coverage area for UPS Worldwide Expedited, providing delivery in two-to-five business days to more than 220 countries and territories. We expanded our origin footprint for this service in 2015 by adding two new countries, bringing the total origins to more than 80. This expansion helps our customers magnify their global reach and balance delivery speed with cost, no matter where they ship.
|
•
|
For cross-border ground package delivery, we offer UPS Transborder (Express, Expedited and Standard) delivery services within Europe, between the U.S. and Canada and between the U.S. and Mexico.
|
•
|
In 2013, we introduced UPS Worldwide Express Freight for palletized shipments over 150 pounds. This service was enhanced to include a total of 58 origins and 56 destinations in 2015, enabling our customers to send their palletized shipments to more markets throughout the world. More expansion is planned for 2016 with additional origin and destination countries. UPS Worldwide Express Freight leverages our unique combination of package and freight networks to provide industry leading transit times with a money-back guarantee.
|
•
|
We expanded the International Special Commodities program in 2015 with the addition of seven destination countries. Customers can now ship biological substances, dry ice and dangerous goods to and from more than 50 countries around the world.
|
•
|
During 2015, we added Trade Management Services to the UPS customs brokerage portfolio in Asia to facilitate customers' expansion opportunities. These services include: trade consulting, import/export technologies and managed services.
|
•
|
By the end of 2015, we expanded the UPS Access Point network coverage to over 15,000 locations across 11 countries including Canada and Mexico (U.S. locations excluded). We plan to further expand the UPS Access Point network to new countries in 2016.
|
•
|
We increased the availability of the UPS Mobile App for Apple iPhone® and Android devices to ten additional countries in 2015, for a total of 16 countries. The UPS Mobile App is now available in Austria, Belgium, Canada,
|
•
|
Distribution Services: Our comprehensive distribution services are provided through a global network of distribution centers that manage the flow of goods from receiving to storage and order processing to shipment. We also provide specialized services to streamline supply chains in the healthcare, high tech, retail, industrial manufacturing and aerospace industries. Together, these services allow companies to save time and money by minimizing capital investment and positioning products closer to their customers.
|
•
|
Post Sales: Post Sales services support goods after they have been delivered or installed in the field. The four core service offerings within Post Sales include: (1) Critical Parts Fulfillment; (2) Reverse Logistics; (3) Test, Repair, and Refurbish and (4) Network and Parts Planning. We leverage our global distribution network of over 950 field stocking locations to ensure that the right type and quantity of our customers’ stock is in the right locations to meet the needs of their end-customers. These solutions allow our customers to maximize service to their end-customers while reducing costs.
|
•
|
UPS Mail Innovations: UPS Mail Innovations offers an efficient, cost-effective method for sending lightweight parcels and flat mail to global addresses from the U.S. We pick up customers’ domestic and international mail, and then sort, post, manifest and expedite the secured mail containers to the destination postal service for last-mile delivery. In 2015, we launched UPS Mail Innovations Returns, an easy-to-use postal solution that combines the convenience of mailbox drop-off with the best-in-class speed, reliability and tracking of the UPS Mail Innovations network. Consumers can use their mailboxes to return lightweight parcels and the packages will flow through the UPS Mail Innovations network for delivery back to the shippers. UPS Mail Innovations Returns rounds out the industry-leading UPS Returns portfolio by giving consumers convenient postal access for returning lightweight shipments.
|
•
|
UPS Express Critical: UPS Express Critical provides a broad range of urgent global transportation options designed to complement UPS's core services and fill the gaps for late cut-offs, weekends and holidays. UPS Express Critical expanded its capabilities into Mexico in 2015. The initial time-critical service solutions offered for volume between the U.S. and Mexico as well as intra-Mexico are Next Flight Out, Charter, Hand Carry and Surface for lightweight to heavyweight shipments.
|
•
|
UPS, by ensuring strong demand for our services.
|
•
|
The economy, by enabling global commerce and making global supply chains more efficient and less expensive.
|
•
|
The environment, by enabling our global customers to leverage UPS’s network efficiency and thereby reduce the greenhouse gas emissions intensity of their supply chains.
|
•
|
Communities, by connecting individuals to global markets and providing the economic empowerment that can help facilitate positive social change.
|
•
|
One of Corporate Responsibility’s “100 Best Corporate Citizens” for the 6th consecutive year.
|
•
|
Recognized by Ethisphere Institute as one of the “World’s Most Ethical Companies” for the 9th consecutive year.
|
•
|
Recognized as a constituent of the Dow Jones Sustainability North America Index for the 11th consecutive year; in addition, we were included on the Dow Jones Sustainability World Index for the 3rd consecutive year.
|
•
|
Recognized as a constituent of the NASDAQ OMX Global Sustainability Index for the 6th consecutive year.
|
•
|
Achieved a disclosure score of 100% in response to the Carbon Disclosure Project. It is the 5th consecutive year we have achieved a rating at or above 99%.
|
•
|
Received a Climate Leadership Award for Excellence in Greenhouse Gas Management from the U.S. Environmental Protection Agency.
|
•
|
Local non-profits around the world received nearly 2.35 million hours of volunteer service from our employees participating in our Neighbor-to-Neighbor program.
|
•
|
The UPS Foundation, which oversees corporate citizenship efforts for the company, invested $111 million in donations of both cash and in-kind services to global causes primarily in four focus areas—community safety, environmental sustainability, diversity and volunteerism.
|
•
|
Our employees, both active and retired, contributed approximately $55 million to United Way which was matched by a corporate contribution of $8 million.
|
•
|
Through The UPS Foundation we have the opportunity to support our global communities to offset carbon, support clean water, reduce poverty and help individuals sustain their lives through the planting of trees. The UPS Global Forestry Initiative, which began in 2013, is the signature program of The UPS Foundation’s Environmental Focus area. By the end of 2015, we have supported the planting of five million trees worldwide.
|
•
|
We continued to aid communities impacted by disasters through our UPS Humanitarian Relief and Resilience program, by providing our logistics expertise, skilled volunteers, capacity building support and in-kind services. In 2015, we coordinated more than 350 humanitarian relief shipments across 50 countries and provided funding and logistics support to strengthen long-term recovery efforts of communities impacted by the Ebola Crisis, the Syrian Refugee Crisis and the Nepal Earthquake.
|
•
|
Nearly 6,700 teenagers and novice drivers in the U.S., Canada, the U.K., Germany and China participated in UPS Road Code. This safety program for new drivers features our employees as instructors – a role where they share driving knowledge and safety tips amassed over our long history of safe driving.
|
•
|
Personal Value.
Which is the foundation and forms the base of our health, wellness and safety culture.
|
•
|
Management Commitment and Employee Involvement.
Where employees take an active role in their own safety as well as their fellow workers and are supported by management. All operations management commit to providing a work environment that is conducive to the well-being and safety of our employees.
|
•
|
Work Site Analysis.
Which includes injury and auto crash data analysis, behavior observations and facility and equipment audits to identify gaps and develop solutions. Our operations managers are responsible for their employees’ safety results. We investigate every injury and auto crash and develop prevention activities.
|
•
|
Hazard Prevention and Control.
Where solutions are developed and documented to ensure identified risks have been mitigated.
|
•
|
Safety Education and Training.
Employees who are healthy and well-trained in proper methods are more safe and efficient in performing their jobs. Our approach starts with training the trainer. All trainers are certified to ensure that they have the skills and motivation to effectively instruct new employees. All new employees receive safety training during orientation and in the work area. In addition, each new driver receives extensive classroom and online instruction, as well as on-road training.
|
•
|
Wellness.
We have a "Five Being Habits" wellness program that turns health and wellness knowledge into actionable measures. These habits are designed to enable employees and their families to take positive steps toward healthy lifestyles. The "Five Being Habits" themes are: Fitness, Sleep, Hydration, Nutrition, and Stress Management.
|
•
|
Recognition.
We have a well-defined safe driving honor plan to recognize our drivers when they achieve accident-free milestones. We have more than 7,800 drivers enshrined in our coveted Circle of Honor for drivers who have driven 25 years or more without an avoidable auto crash.
|
•
|
Preventive Maintenance.
We
have a comprehensive Preventive Maintenance Program to ensure the safety of our fleet. Our fleet is managed and monitored electronically to ensure that each vehicle is serviced at a specific time to prevent malfunction or breakdown.
|
Item 1A.
|
Risk Factors
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Description
|
Owned and
Capital
Leases
|
|
Short-term
Leased or
Chartered
From
Others
|
|
On
Order
|
|
Under
Option
|
||||
Boeing 757-200F
|
75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Boeing 767-300ERF
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Airbus A300-600F
|
52
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Boeing MD-11F
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Boeing 747-400F
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Boeing 747-400BCF
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other
|
—
|
|
|
413
|
|
|
—
|
|
|
—
|
|
Total
|
237
|
|
|
413
|
|
|
—
|
|
|
—
|
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
High
|
|
Low
|
|
Close
|
|
Dividends
Declared
|
||||||||
2015:
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
$
|
114.25
|
|
|
$
|
96.59
|
|
|
$
|
96.94
|
|
|
$
|
0.73
|
|
Second Quarter
|
$
|
102.13
|
|
|
$
|
95.38
|
|
|
$
|
96.91
|
|
|
$
|
0.73
|
|
Third Quarter
|
$
|
103.43
|
|
|
$
|
94.46
|
|
|
$
|
98.69
|
|
|
$
|
0.73
|
|
Fourth Quarter
|
$
|
106.80
|
|
|
$
|
96.23
|
|
|
$
|
96.23
|
|
|
$
|
0.73
|
|
2014:
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
$
|
104.85
|
|
|
$
|
93.19
|
|
|
$
|
97.38
|
|
|
$
|
0.67
|
|
Second Quarter
|
$
|
104.30
|
|
|
$
|
95.57
|
|
|
$
|
102.66
|
|
|
$
|
0.67
|
|
Third Quarter
|
$
|
105.09
|
|
|
$
|
94.87
|
|
|
$
|
98.29
|
|
|
$
|
0.67
|
|
Fourth Quarter
|
$
|
113.10
|
|
|
$
|
94.05
|
|
|
$
|
111.17
|
|
|
$
|
0.67
|
|
|
Total Number
of Shares
Purchased(1)
|
|
Total Number
of Shares Purchased
as Part of Publicly
Announced Program
|
|
Average
Price Paid
Per Share
|
|
Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Program
(as of month-end)
|
||||||
October 1—October 31
|
4.3
|
|
|
4.3
|
|
|
$
|
102.94
|
|
|
$
|
1,680
|
|
November 1—November 30
|
0.9
|
|
|
0.8
|
|
|
104.17
|
|
|
1,596
|
|
||
December 1—December 31
|
1.5
|
|
|
1.5
|
|
|
101.08
|
|
|
1,441
|
|
||
Total October 1—December 31
|
6.7
|
|
|
6.6
|
|
|
$
|
102.66
|
|
|
|
(1)
|
Includes shares repurchased through our publicly announced share repurchase program and shares tendered to pay the exercise price and tax withholding on employee stock options.
|
|
12/31/2010
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
||||||||||||
United Parcel Service, Inc.
|
$
|
100.00
|
|
|
$
|
103.88
|
|
|
$
|
107.87
|
|
|
$
|
158.07
|
|
|
$
|
171.77
|
|
|
$
|
160.61
|
|
Standard & Poor’s 500 Index
|
$
|
100.00
|
|
|
$
|
102.11
|
|
|
$
|
118.43
|
|
|
$
|
156.77
|
|
|
$
|
178.22
|
|
|
$
|
180.67
|
|
Dow Jones Transportation Average
|
$
|
100.00
|
|
|
$
|
100.01
|
|
|
$
|
107.49
|
|
|
$
|
151.97
|
|
|
$
|
190.08
|
|
|
$
|
158.23
|
|
Item 6.
|
Selected Financial Data
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Selected Income Statement Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Domestic Package
|
$
|
36,747
|
|
|
$
|
35,851
|
|
|
$
|
34,074
|
|
|
$
|
32,856
|
|
|
$
|
31,717
|
|
International Package
|
12,149
|
|
|
12,988
|
|
|
12,429
|
|
|
12,124
|
|
|
12,249
|
|
|||||
Supply Chain & Freight
|
9,467
|
|
|
9,393
|
|
|
8,935
|
|
|
9,147
|
|
|
9,139
|
|
|||||
Total Revenue
|
58,363
|
|
|
58,232
|
|
|
55,438
|
|
|
54,127
|
|
|
53,105
|
|
|||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
31,028
|
|
|
32,045
|
|
|
28,557
|
|
|
33,102
|
|
|
27,575
|
|
|||||
Other
|
19,667
|
|
|
21,219
|
|
|
19,847
|
|
|
19,682
|
|
|
19,450
|
|
|||||
Total Operating Expenses
|
50,695
|
|
|
53,264
|
|
|
48,404
|
|
|
52,784
|
|
|
47,025
|
|
|||||
Operating Profit:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Domestic Package
|
4,767
|
|
|
2,859
|
|
|
4,603
|
|
|
459
|
|
|
3,764
|
|
|||||
International Package
|
2,137
|
|
|
1,677
|
|
|
1,757
|
|
|
869
|
|
|
1,709
|
|
|||||
Supply Chain and Freight
|
764
|
|
|
432
|
|
|
674
|
|
|
15
|
|
|
607
|
|
|||||
Total Operating Profit
|
7,668
|
|
|
4,968
|
|
|
7,034
|
|
|
1,343
|
|
|
6,080
|
|
|||||
Other Income and (Expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment income
|
15
|
|
|
22
|
|
|
20
|
|
|
24
|
|
|
44
|
|
|||||
Interest expense
|
(341
|
)
|
|
(353
|
)
|
|
(380
|
)
|
|
(393
|
)
|
|
(348
|
)
|
|||||
Income Before Income Taxes
|
7,342
|
|
|
4,637
|
|
|
6,674
|
|
|
974
|
|
|
5,776
|
|
|||||
Income Tax Expense
|
2,498
|
|
|
1,605
|
|
|
2,302
|
|
|
167
|
|
|
1,972
|
|
|||||
Net Income
|
$
|
4,844
|
|
|
$
|
3,032
|
|
|
$
|
4,372
|
|
|
$
|
807
|
|
|
$
|
3,804
|
|
Per Share Amounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic Earnings Per Share
|
$
|
5.38
|
|
|
$
|
3.31
|
|
|
$
|
4.65
|
|
|
$
|
0.84
|
|
|
$
|
3.88
|
|
Diluted Earnings Per Share
|
$
|
5.35
|
|
|
$
|
3.28
|
|
|
$
|
4.61
|
|
|
$
|
0.83
|
|
|
$
|
3.84
|
|
Dividends Declared Per Share
|
$
|
2.92
|
|
|
$
|
2.68
|
|
|
$
|
2.48
|
|
|
$
|
2.28
|
|
|
$
|
2.08
|
|
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
901
|
|
|
916
|
|
|
940
|
|
|
960
|
|
|
981
|
|
|||||
Diluted
|
906
|
|
|
924
|
|
|
948
|
|
|
969
|
|
|
991
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Selected Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and marketable securities
|
$
|
4,726
|
|
|
$
|
3,283
|
|
|
$
|
5,245
|
|
|
$
|
7,924
|
|
|
$
|
4,275
|
|
Total assets
|
38,311
|
|
|
35,440
|
|
|
35,553
|
|
|
38,818
|
|
|
34,077
|
|
|||||
Long-term debt
|
11,316
|
|
|
9,856
|
|
|
10,824
|
|
|
11,089
|
|
|
11,095
|
|
|||||
Shareowners’ equity
|
2,491
|
|
|
2,158
|
|
|
6,488
|
|
|
4,733
|
|
|
7,108
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015/ 2014
|
|
2014/ 2013
|
||||||||
Revenue (in millions)
|
$
|
58,363
|
|
|
$
|
58,232
|
|
|
$
|
55,438
|
|
|
0.2
|
%
|
|
5.0
|
%
|
Operating Expenses (in millions)
|
50,695
|
|
|
53,264
|
|
|
48,404
|
|
|
(4.8
|
)%
|
|
10.0
|
%
|
|||
Operating Profit (in millions)
|
$
|
7,668
|
|
|
$
|
4,968
|
|
|
$
|
7,034
|
|
|
54.3
|
%
|
|
(29.4
|
)%
|
Operating Margin
|
13.1
|
%
|
|
8.5
|
%
|
|
12.7
|
%
|
|
|
|
|
|||||
Average Daily Package Volume (in thousands)
|
18,324
|
|
|
18,016
|
|
|
16,938
|
|
|
1.7
|
%
|
|
6.4
|
%
|
|||
Average Revenue Per Piece
|
$
|
10.37
|
|
|
$
|
10.58
|
|
|
$
|
10.76
|
|
|
(2.0
|
)%
|
|
(1.7
|
)%
|
Net Income (in millions)
|
$
|
4,844
|
|
|
$
|
3,032
|
|
|
$
|
4,372
|
|
|
59.8
|
%
|
|
(30.6
|
)%
|
Basic Earnings Per Share
|
$
|
5.38
|
|
|
$
|
3.31
|
|
|
$
|
4.65
|
|
|
62.5
|
%
|
|
(28.8
|
)%
|
Diluted Earnings Per Share
|
$
|
5.35
|
|
|
$
|
3.28
|
|
|
$
|
4.61
|
|
|
63.1
|
%
|
|
(28.9
|
)%
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Operating Expenses:
|
|
|
|
|
|
||||||
Defined Benefit Plans Mark-to-Market Charge
|
$
|
118
|
|
|
$
|
1,062
|
|
|
$
|
—
|
|
Health & Welfare Plan Charges
|
—
|
|
|
1,102
|
|
|
—
|
|
|||
TNT Termination Fee and Related Expenses
|
—
|
|
|
—
|
|
|
284
|
|
|||
Gain Upon Liquidation of Foreign Subsidiary
|
—
|
|
|
—
|
|
|
(245
|
)
|
|||
Total Adjustments to Operating Expenses
|
118
|
|
|
2,164
|
|
|
39
|
|
|||
Income Tax Expense (Benefit) from the Items Above
|
(39
|
)
|
|
(807
|
)
|
|
(75
|
)
|
|||
Total Adjustments to Net Income
|
$
|
79
|
|
|
$
|
1,357
|
|
|
$
|
(36
|
)
|
|
|
Year Ended December 31,
|
||||||||||
Components of mark-to-market gain (loss) (in millions):
|
|
2015
|
|
2014
|
|
2013
|
||||||
Discount rates
|
|
$
|
1,624
|
|
|
$
|
(954
|
)
|
|
$
|
—
|
|
Return on assets
|
|
(1,550
|
)
|
|
42
|
|
|
—
|
|
|||
Demographic and assumption changes
|
|
(133
|
)
|
|
(150
|
)
|
|
—
|
|
|||
Reclassification of prior year unrecognized benefit cost
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|||
Total mark-to-market gain (loss)
|
|
$
|
(118
|
)
|
|
$
|
(1,062
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Weighted-average actuarial assumptions used to determine net periodic benefit cost:
|
|
2015
|
|
2014
|
|
2013
|
||||||
Expected rate of return on plan assets
|
|
8.66
|
%
|
|
8.66
|
%
|
|
8.69
|
%
|
|||
Actual rate of return on plan assets
|
|
0.37
|
%
|
|
9.45
|
%
|
|
8.36
|
%
|
|||
Discount rate used for net periodic benefit cost
|
|
4.36
|
%
|
|
5.24
|
%
|
|
4.38
|
%
|
|||
Discount rate at measurement date
|
|
4.81
|
%
|
|
4.36
|
%
|
|
5.24
|
%
|
•
|
Discount Rates
($1.624 billion pre-tax gain):
The weighted-average discount rate for our pension and postretirement medical plans increased from 4.36% at December 31, 2014 to 4.81% at December 31, 2015, primarily due to an increase in U.S. treasury yields and credit spreads on AA-rated corporate bonds in 2015.
|
•
|
Return on Assets
($1.550 billion pre-tax loss): In 2015, the actual 0.37% rate of return on plan assets fell short of our expected rate of return of 8.66%, primarily due to weak global equity markets.
|
•
|
Demographic and Assumption Changes
($133 million pre-tax loss): This represents the difference between actual and estimated participant data and demographic factors, including items such as health care cost trends, compensation rate increases, and rates of termination, retirement and mortality.
|
•
|
Reclassification of Prior Year Unrecognized Benefit Cost
($59 million pre-tax loss): Our mark-to-market accounting policy requires recognition of gains and losses in excess of a corridor equal to 10% of the plans' projected benefit obligations (or fair value of the plans' assets, if greater). The decrease in certain plans' projected benefit obligations resulted in a lower corridor, which required recognition of prior year unrecognized benefit costs for some of our plans.
|
•
|
Discount Rates
($954 million pre-tax loss): The weighted-average discount rate for our pension and postretirement medical plans declined from 5.24% at December 31, 2013 to 4.36% at December 31, 2014. This overall decline in discount rates was primarily driven by a 122 basis point decline in the 30 year Treasury bond rate, but was partially offset by an increase in credit spreads on AA-rated 30 year bonds.
|
•
|
Return on Assets
($42 million pre-tax gain): In 2014, the actual rate of return on plan assets of 9.45% exceeded our expected rate of return of 8.66%, primarily due to gains in the world equity markets.
|
•
|
Demographic and Assumption Changes
($150 million pre-tax loss): The implementation of new U.S. mortality tables in 2014 resulted in an increased participant life expectancy assumption, which increased the overall projected benefit obligation for our plans.
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015/ 2014
|
|
2014/ 2013
|
||||||||
Average Daily Package Volume (in thousands):
|
|
|
|
|
|
|
|
|
|
||||||||
Next Day Air
|
1,316
|
|
|
1,274
|
|
|
1,271
|
|
|
3.3
|
%
|
|
0.2
|
%
|
|||
Deferred
|
1,313
|
|
|
1,155
|
|
|
1,074
|
|
|
13.7
|
%
|
|
7.5
|
%
|
|||
Ground
|
12,969
|
|
|
12,893
|
|
|
12,060
|
|
|
0.6
|
%
|
|
6.9
|
%
|
|||
Total Avg. Daily Package Volume
|
15,598
|
|
|
15,322
|
|
|
14,405
|
|
|
1.8
|
%
|
|
6.4
|
%
|
|||
Average Revenue Per Piece:
|
|
|
|
|
|
|
|
|
|
||||||||
Next Day Air
|
$
|
19.66
|
|
|
$
|
20.42
|
|
|
$
|
20.12
|
|
|
(3.7
|
)%
|
|
1.5
|
%
|
Deferred
|
11.70
|
|
|
12.57
|
|
|
12.70
|
|
|
(6.9
|
)%
|
|
(1.0
|
)%
|
|||
Ground
|
7.98
|
|
|
7.85
|
|
|
7.96
|
|
|
1.7
|
%
|
|
(1.4
|
)%
|
|||
Total Avg. Revenue Per Piece
|
$
|
9.28
|
|
|
$
|
9.25
|
|
|
$
|
9.39
|
|
|
0.3
|
%
|
|
(1.5
|
)%
|
Operating Days in Period
|
254
|
|
|
253
|
|
|
252
|
|
|
|
|
|
|||||
Revenue (in millions):
|
|
|
|
|
|
|
|
|
|
||||||||
Next Day Air
|
$
|
6,570
|
|
|
$
|
6,581
|
|
|
$
|
6,443
|
|
|
(0.2
|
)%
|
|
2.1
|
%
|
Deferred
|
3,903
|
|
|
3,672
|
|
|
3,437
|
|
|
6.3
|
%
|
|
6.8
|
%
|
|||
Ground
|
26,274
|
|
|
25,598
|
|
|
24,194
|
|
|
2.6
|
%
|
|
5.8
|
%
|
|||
Total Revenue
|
$
|
36,747
|
|
|
$
|
35,851
|
|
|
$
|
34,074
|
|
|
2.5
|
%
|
|
5.2
|
%
|
Operating Expenses (in millions):
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Expenses
|
$
|
31,980
|
|
|
$
|
32,992
|
|
|
$
|
29,471
|
|
|
(3.1
|
)%
|
|
11.9
|
%
|
Defined Benefit Plans Mark-to-Market Charge
|
(62
|
)
|
|
(660
|
)
|
|
—
|
|
|
|
|
|
|||||
Health & Welfare Plan Charges
|
—
|
|
|
(990
|
)
|
|
—
|
|
|
|
|
|
|||||
Adjusted Operating Expenses
|
$
|
31,918
|
|
|
$
|
31,342
|
|
|
$
|
29,471
|
|
|
1.8
|
%
|
|
6.3
|
%
|
Operating Profit (in millions) and Operating Margin:
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Profit
|
$
|
4,767
|
|
|
$
|
2,859
|
|
|
$
|
4,603
|
|
|
66.7
|
%
|
|
(37.9
|
)%
|
Adjusted Operating Profit
|
$
|
4,829
|
|
|
$
|
4,509
|
|
|
$
|
4,603
|
|
|
7.1
|
%
|
|
(2.0
|
)%
|
Operating Margin
|
13.0
|
%
|
|
8.0
|
%
|
|
13.5
|
%
|
|
|
|
|
|||||
Adjusted Operating Margin
|
13.1
|
%
|
|
12.6
|
%
|
|
13.5
|
%
|
|
|
|
|
|
Volume
|
|
Rates /
Product Mix
|
|
Fuel
Surcharge
|
|
Total
Revenue
Change
|
||||
Revenue Change Drivers:
|
|
|
|
|
|
|
|
||||
2015/ 2014
|
2.2
|
%
|
|
2.7
|
%
|
|
(2.4
|
)%
|
|
2.5
|
%
|
2014/ 2013
|
6.8
|
%
|
|
(1.6
|
)%
|
|
—
|
%
|
|
5.2
|
%
|
|
Year Ended December 31,
|
|
% Point Change
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015/ 2014
|
|
2014/ 2013
|
|||||
Next Day Air / Deferred
|
4.8
|
%
|
|
10.2
|
%
|
|
10.7
|
%
|
|
(5.4
|
)%
|
|
(0.5
|
)%
|
Ground
|
5.5
|
%
|
|
7.1
|
%
|
|
7.2
|
%
|
|
(1.6
|
)%
|
|
(0.1
|
)%
|
•
|
We incurred higher employee compensation, largely resulting from an increase in average daily union labor hours (up 0.8%), union contractual wage rate increases and growth in the overall size of the workforce.
|
•
|
Employee benefit costs increased, largely due to increased employee healthcare, pension expense and workers compensation expense.
|
•
|
We incurred lower fuel expense in 2015 primarily due to lower fuel prices. This was partially offset by higher fuel usage (due to an increase in aircraft block hours and vehicle miles driven offset by an increase in average miles per gallon).
|
•
|
We incurred lower expenses associated with purchased transportation, primarily due to the decreased use of, and lower fuel surcharge rates passed to us from rail carriers and outside contract carriers.
|
•
|
These cost increases were also mitigated by certain network efficiency and productivity improvements, which resulted in a 0.4% reduction in the total adjusted cost per piece in 2015 compared with 2014. Productivity improvements have continued to be realized through adjusting our air and ground networks to better match volume levels and utilizing technology to increase package sorting and delivery efficiency. The continued deployment of ORION has contained the average daily vehicle miles driven (down 0.4%) even as package volume increased (up 1.8%).
|
•
|
We incurred higher employee compensation costs, largely resulting from an increase in average daily union labor hours (up 7.5%), union contractual wage rate increases, increased employee healthcare expenses and growth in the overall size of the workforce. The increase in labor hours was driven by volume growth, additional overtime and training hours during our fourth quarter holiday shipping season, and adverse weather conditions in early 2014.
|
•
|
We incurred higher expenses associated with outside contract carriers, due to volume growth, issues associated with the service performance of rail carriers, and the adverse weather conditions in early 2014.
|
•
|
These cost increases were partially offset by a reduction in worker's compensation expense, due to actuarial adjustments that were largely attributable to operational safety and claims management initiatives.
|
•
|
These cost increases were also mitigated by certain network efficiency and productivity improvements, which resulted in a 0.4% reduction in the total adjusted cost per piece in 2014 compared with 2013. We have continued to adjust our air and ground networks to better match higher volume levels, utilize technology to increase package sorting and delivery efficiency, and benefit from improved pick-up densities. These improvements allowed us to process increased volume (up 6.4%) at a faster rate than the increase in average daily aircraft block hours (up 2.4%) and vehicle miles driven (up 4.2%).
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015/ 2014
|
|
2014/ 2013
|
||||||||||
Average Daily Package Volume (in thousands):
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
1,575
|
|
|
1,579
|
|
|
1,499
|
|
|
(0.3
|
)%
|
|
5.3
|
%
|
|||||
Export
|
1,151
|
|
|
1,115
|
|
|
1,034
|
|
|
3.2
|
%
|
|
7.8
|
%
|
|||||
Total Avg. Daily Package Volume
|
2,726
|
|
|
2,694
|
|
|
2,533
|
|
|
1.2
|
%
|
|
6.4
|
%
|
|||||
Average Revenue Per Piece:
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
$
|
6.06
|
|
|
$
|
6.97
|
|
|
$
|
7.06
|
|
|
(13.1
|
)%
|
|
(1.3
|
)%
|
||
Export
|
31.10
|
|
|
33.98
|
|
|
35.18
|
|
|
(8.5
|
)%
|
|
(3.4
|
)%
|
|||||
Total Avg. Revenue Per Piece
|
$
|
16.63
|
|
|
$
|
18.15
|
|
|
$
|
18.54
|
|
|
(8.4
|
)%
|
|
(2.1
|
)%
|
||
Operating Days in Period
|
254
|
|
|
253
|
|
|
252
|
|
|
|
|
|
|||||||
Revenue (in millions):
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
$
|
2,425
|
|
|
$
|
2,784
|
|
|
$
|
2,667
|
|
|
(12.9
|
)%
|
|
4.4
|
%
|
||
Export
|
9,092
|
|
|
9,586
|
|
|
9,166
|
|
|
(5.2
|
)%
|
|
4.6
|
%
|
|||||
Cargo
|
632
|
|
|
618
|
|
|
596
|
|
|
2.3
|
%
|
|
3.7
|
%
|
|||||
Total Revenue
|
$
|
12,149
|
|
|
$
|
12,988
|
|
|
$
|
12,429
|
|
|
(6.5
|
)%
|
|
4.5
|
%
|
||
Operating Expenses (in millions):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses
|
$
|
10,012
|
|
|
$
|
11,311
|
|
|
$
|
10,672
|
|
|
(11.5
|
)%
|
|
6.0
|
%
|
||
Defined Benefit Plan Mark-to-Market Charge
|
(44
|
)
|
|
(200
|
)
|
|
—
|
|
|
|
|
|
|||||||
Health & Welfare Plan Charges
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
|
|
|
|||||||
Gain Upon Liquidation of Foreign Subsidiary
|
—
|
|
|
—
|
|
|
245
|
|
|
|
|
|
|||||||
TNT Termination Fee and Related Expenses
|
—
|
|
|
—
|
|
|
(284
|
)
|
|
|
|
|
|||||||
Adjusted Operating Expenses
|
$
|
9,968
|
|
|
$
|
11,083
|
|
|
$
|
10,633
|
|
|
(10.1
|
)%
|
|
4.2
|
%
|
||
Operating Profit (in millions) and Operating Margin:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Profit
|
$
|
2,137
|
|
|
$
|
1,677
|
|
|
$
|
1,757
|
|
|
27.4
|
%
|
|
(4.6
|
)%
|
||
Adjusted Operating Profit
|
$
|
2,181
|
|
|
$
|
1,905
|
|
|
$
|
1,796
|
|
|
14.5
|
%
|
|
6.1
|
%
|
||
Operating Margin
|
17.6
|
%
|
|
12.9
|
%
|
|
14.1
|
%
|
|
|
|
|
|||||||
Adjusted Operating Margin
|
18.0
|
%
|
|
14.7
|
%
|
|
14.5
|
%
|
|
|
|
|
|||||||
Currency Translation Benefit / (Cost)—(in millions)*:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
|
|
|
|
|
$
|
(880
|
)
|
|
$
|
(72
|
)
|
||||||
Operating Expenses
|
|
|
|
|
|
|
858
|
|
|
87
|
|
||||||||
Operating Profit
|
|
|
|
|
|
|
$
|
(22
|
)
|
|
$
|
15
|
|
*
|
Net of currency hedging; amount represents the change compared to the prior year.
|
|
Volume
|
|
Rates /
Product Mix
|
|
Fuel
Surcharge
|
|
Currency
|
|
Total
Revenue
Change
|
|||||
Revenue Change Drivers:
|
|
|
|
|
|
|
|
|
|
|||||
2015/ 2014
|
1.6
|
%
|
|
1.9
|
%
|
|
(3.2
|
)%
|
|
(6.8
|
)%
|
|
(6.5
|
)%
|
2014/ 2013
|
6.8
|
%
|
|
(1.7
|
)%
|
|
—
|
%
|
|
(0.6
|
)%
|
|
4.5
|
%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015/ 2014
|
|
2014/ 2013
|
||||||||||
Freight LTL Statistics:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue (in millions)
|
$
|
2,479
|
|
|
$
|
2,633
|
|
|
$
|
2,502
|
|
|
(5.8
|
)%
|
|
5.2
|
%
|
||
Revenue Per Hundredweight
|
$
|
22.94
|
|
|
$
|
22.64
|
|
|
$
|
22.05
|
|
|
1.3
|
%
|
|
2.7
|
%
|
||
Shipments (in thousands)
|
10,433
|
|
|
10,762
|
|
|
10,497
|
|
|
(3.1
|
)%
|
|
2.5
|
%
|
|||||
Shipments Per Day (in thousands)
|
41.2
|
|
|
42.5
|
|
|
41.5
|
|
|
(3.1
|
)%
|
|
2.5
|
%
|
|||||
Gross Weight Hauled (in millions of lbs)
|
10,808
|
|
|
11,632
|
|
|
11,348
|
|
|
(7.1
|
)%
|
|
2.5
|
%
|
|||||
Weight Per Shipment (in lbs)
|
1,036
|
|
|
1,081
|
|
|
1,081
|
|
|
(4.2
|
)%
|
|
—
|
%
|
|||||
Operating Days in Period
|
253
|
|
|
253
|
|
|
253
|
|
|
|
|
|
|||||||
Revenue (in millions):
|
|
|
|
|
|
|
|
|
|
||||||||||
Forwarding and Logistics
|
$
|
5,900
|
|
|
$
|
5,758
|
|
|
$
|
5,492
|
|
|
2.5
|
%
|
|
4.8
|
%
|
||
Freight
|
2,881
|
|
|
3,048
|
|
|
2,882
|
|
|
(5.5
|
)%
|
|
5.8
|
%
|
|||||
Other
|
686
|
|
|
587
|
|
|
561
|
|
|
16.9
|
%
|
|
4.6
|
%
|
|||||
Total Revenue
|
$
|
9,467
|
|
|
$
|
9,393
|
|
|
$
|
8,935
|
|
|
0.8
|
%
|
|
5.1
|
%
|
||
Operating Expenses (in millions):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses
|
$
|
8,703
|
|
|
$
|
8,961
|
|
|
$
|
8,261
|
|
|
(2.9
|
)%
|
|
8.5
|
%
|
||
Defined Benefit Plans Mark-to-Market Charge
|
(12
|
)
|
|
(202
|
)
|
|
—
|
|
|
|
|
|
|||||||
Health & Welfare Plan Charges
|
—
|
|
|
(84
|
)
|
|
—
|
|
|
|
|
|
|||||||
Adjusted Operating Expenses
|
$
|
8,691
|
|
|
$
|
8,675
|
|
|
$
|
8,261
|
|
|
0.2
|
%
|
|
5.0
|
%
|
||
Operating Profit (in millions) and Operating Margins:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Profit
|
$
|
764
|
|
|
$
|
432
|
|
|
$
|
674
|
|
|
76.9
|
%
|
|
(35.9
|
)%
|
||
Adjusted Operating Profit
|
$
|
776
|
|
|
$
|
718
|
|
|
$
|
674
|
|
|
8.1
|
%
|
|
6.5
|
%
|
||
Operating Margin
|
8.1
|
%
|
|
4.6
|
%
|
|
7.5
|
%
|
|
|
|
|
|||||||
Adjusted Operating Margin
|
8.2
|
%
|
|
7.6
|
%
|
|
7.5
|
%
|
|
|
|
|
|||||||
Currency Translation Benefit / (Cost)—(in millions)*:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
|
|
|
|
|
$
|
(249
|
)
|
|
$
|
(65
|
)
|
||||||
Operating Expenses
|
|
|
|
|
|
|
279
|
|
|
54
|
|
||||||||
Operating Profit
|
|
|
|
|
|
|
$
|
30
|
|
|
$
|
(11
|
)
|
*
|
Amount represents the change compared to the prior year.
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015/ 2014
|
|
2014/ 2013
|
||||||||||
Operating Expenses (in millions):
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and Benefits:
|
$
|
31,028
|
|
|
$
|
32,045
|
|
|
$
|
28,557
|
|
|
(3.2
|
)%
|
|
12.2
|
%
|
||
Defined Benefit Plans Mark-to-Market Charge
|
(118
|
)
|
|
(1,062
|
)
|
|
—
|
|
|
|
|
|
|||||||
Health & Welfare Plan Charges
|
—
|
|
|
(1,102
|
)
|
|
—
|
|
|
|
|
|
|||||||
Adjusted Compensation and Benefits
|
30,910
|
|
|
29,881
|
|
|
28,557
|
|
|
3.4
|
%
|
|
4.6
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Repairs and Maintenance
|
1,400
|
|
|
1,371
|
|
|
1,240
|
|
|
2.1
|
%
|
|
10.6
|
%
|
|||||
Depreciation and Amortization
|
2,084
|
|
|
1,923
|
|
|
1,867
|
|
|
8.4
|
%
|
|
3.0
|
%
|
|||||
Purchased Transportation
|
8,043
|
|
|
8,460
|
|
|
7,486
|
|
|
(4.9
|
)%
|
|
13.0
|
%
|
|||||
Fuel
|
2,482
|
|
|
3,883
|
|
|
4,027
|
|
|
(36.1
|
)%
|
|
(3.6
|
)%
|
|||||
Other Occupancy
|
1,022
|
|
|
1,044
|
|
|
950
|
|
|
(2.1
|
)%
|
|
9.9
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Expenses:
|
4,636
|
|
|
4,538
|
|
|
4,277
|
|
|
2.2
|
%
|
|
6.1
|
%
|
|||||
TNT Termination Fee and Related Expenses
|
—
|
|
|
—
|
|
|
(284
|
)
|
|
|
|
|
|||||||
Gain Upon Liquidation of Foreign Subsidiary
|
—
|
|
|
—
|
|
|
245
|
|
|
|
|
|
|||||||
Adjusted Other Expenses
|
4,636
|
|
|
4,538
|
|
|
4,238
|
|
|
2.2
|
%
|
|
7.1
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Operating Expenses
|
$
|
50,695
|
|
|
$
|
53,264
|
|
|
$
|
48,404
|
|
|
(4.8
|
)%
|
|
10.0
|
%
|
||
Adjusted Total Operating Expenses
|
$
|
50,577
|
|
|
$
|
51,100
|
|
|
$
|
48,365
|
|
|
(1.0
|
)%
|
|
5.7
|
%
|
||
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency Translation Cost / (Benefit)*
|
|
|
|
|
|
|
$
|
(1,137
|
)
|
|
$
|
(141
|
)
|
*
|
Amount represents the change compared to the prior year.
|
•
|
Adjusted pension costs increased $333 million in 2015, due to increased expenses in both company-sponsored pension plans (largely due to lower discount rates used to determine ongoing pension cost for 2015) and multiemployer pension plans (due to both increased contribution rates and higher union labor hours).
|
•
|
Health and welfare costs increased $275 million in 2015, largely due to contractual contribution rate increases and higher union labor hours.
|
•
|
Workers compensation expense increased $36 million in 2015. Insurance reserves are established for estimates of the loss that we will ultimately incur on reported worker's compensation claims, as well as estimates of claims that have been incurred but not reported, and take into account a number of factors including our history of claim losses, payroll growth and the impact of safety improvement initiatives. In 2015, we experienced less favorable actuarial expense adjustments than the prior year as well as increased program costs and taxes.
|
•
|
Vacation, holiday and excused absence expense increased $32 million in 2015, due to an increase in the overall number of employees and increased vacation entitlements earned based on employees' years of service; however, these factors were partially offset by the impact of currency exchange rates.
|
•
|
Adjusted health and welfare costs increased $221 million in 2014, largely due to higher medical claims in company-sponsored plans, increased contributions to multiemployer plans and the impact of several provisions of the Patient Protection and Affordable Care Act of 2010. The growth in multiemployer plan contributions was impacted by contractual contribution rate increases and higher union labor hours.
|
•
|
Payroll taxes increased $73 million in 2014, primarily as a result of higher union labor hours, union wage rate increases and higher management incentive compensation payments.
|
•
|
Vacation, holiday and excused absence expense increased $41 million in 2014, due to an increase in the overall number of employees and increased vacation entitlements earned based on employees' years of service.
|
•
|
Adjusted pension costs declined $23 million in 2014, as a decrease in the expense for company-sponsored pension plans (largely due to higher discount rates used to determine pension cost for 2014) was largely offset by higher contributions to multiemployer pension plans (due to both increased contribution rates and higher union labor hours).
|
•
|
Workers compensation expense decreased $69 million in 2014, impacting all segments. Insurance reserves are established for estimates of the loss that we will ultimately incur on reported worker's compensation claims, as well as estimates of claims that have been incurred but not reported, and take into account a number of factors including our history of claim losses, payroll growth and the impact of safety improvement initiatives. In 2014, we experienced favorable actuarial expense adjustments as the frequency and severity of claims was less than previously projected, due to the impact of ongoing operational safety improvement and claim management initiatives.
|
•
|
U.S. Domestic Package expense decreased $322 million in 2015, primarily due to the decreased use of, and lower fuel surcharge rates passed to us from rail carriers and outside contract carriers. Additionally, adverse weather conditions in the early months of 2014 resulted in the additional use of outside contract carriers, which impacted the comparison with 2015.
|
•
|
International Package expense decreased $64 million in 2015, primarily due to to the impact of currency exchange rate movements and lower fuel surcharges passed from outside transportation providers. These factors were partially offset by international volume growth.
|
•
|
UPS Freight expense decreased $68 million in 2015, largely due to decreased LTL shipments and fuel efficiency, and the resulting decreased use of, and lower fuel surcharges passed to us from, outside transportation carriers.
|
•
|
The expense for Forwarding and Logistics and other businesses increased $37 million in 2015 primarily due to the acquisition of Coyote; however, this was offset by the impact of decreased volume and tonnage in our international and North American air freight businesses, the impact of currency exchange movements and lower fuel surcharges passed to us from outside transportation providers.
|
•
|
Our U.S. Domestic Package segment incurred a $474 million increase in expense in 2014, primarily due to (1) higher fees paid to the U.S. Postal Service associated with the volume growth in our SurePost product; (2) the increased use of, and higher rates passed to us from, rail carriers; and (3) the increased use of outside contract carriers, which was impacted by volume growth and rail carrier service issues; additionally, adverse weather conditions in the early months of 2014 resulted in the additional use of outside contract carriers. Approximately $177 million of the increase, or 37% of the total increase for the year, was attributable to the fourth quarter as a result of high seasonal volume.
|
•
|
Our International Package segment incurred a $203 million increase in expense in 2014, primarily due to higher costs incurred for the use of outside transportation providers, which was impacted by strong international volume growth.
|
•
|
Our UPS Freight business incurred a $68 million increase in expense in 2014, largely due to increased LTL and brokerage volume, and the resulting increased use of, and higher rates passed to us from, outside transportation carriers.
|
•
|
The purchased transportation expense for our forwarding and logistics business increased $229 million in 2014, largely due to increased volume and tonnage in our international air freight, North American air freight, and ocean forwarding businesses.
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015/ 2014
|
|
2014/ 2013
|
||||||||
Investment Income
|
$
|
15
|
|
|
$
|
22
|
|
|
$
|
20
|
|
|
(31.8
|
)%
|
|
10.0
|
%
|
Interest Expense
|
$
|
(341
|
)
|
|
$
|
(353
|
)
|
|
$
|
(380
|
)
|
|
(3.4
|
)%
|
|
(7.1
|
)%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015/ 2014
|
|
2014/ 2013
|
||||||||
Income Tax Expense :
|
$
|
2,498
|
|
|
$
|
1,605
|
|
|
$
|
2,302
|
|
|
55.6
|
%
|
|
(30.3
|
)%
|
Income Tax Impact of:
|
|
|
|
|
|
|
|
|
|
||||||||
Defined Benefit Plans Mark-to-Market Charge
|
39
|
|
|
392
|
|
|
—
|
|
|
|
|
|
|||||
Health & Welfare Plan Charges
|
—
|
|
|
415
|
|
|
—
|
|
|
|
|
|
|||||
TNT Termination Fee and Related Expenses
|
—
|
|
|
—
|
|
|
107
|
|
|
|
|
|
|||||
Gain Upon Liquidation of Foreign Subsidiary
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
|
|
|
|||||
Adjusted Income Tax Expense
|
$
|
2,537
|
|
|
$
|
2,412
|
|
|
$
|
2,377
|
|
|
5.2
|
%
|
|
1.5
|
%
|
Effective Tax Rate
|
34.0
|
%
|
|
34.6
|
%
|
|
34.5
|
%
|
|
|
|
|
|||||
Adjusted Effective Tax Rate
|
34.0
|
%
|
|
35.5
|
%
|
|
35.4
|
%
|
|
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Income
|
$
|
4,844
|
|
|
$
|
3,032
|
|
|
$
|
4,372
|
|
Non-cash operating activities(a)
|
4,122
|
|
|
5,901
|
|
|
3,318
|
|
|||
Pension and postretirement plan contributions (UPS-sponsored plans)
|
(1,229
|
)
|
|
(1,258
|
)
|
|
(212
|
)
|
|||
Settlement of postretirement benefit obligation
|
—
|
|
|
(2,271
|
)
|
|
—
|
|
|||
Hedge margin receivables and payables
|
170
|
|
|
421
|
|
|
67
|
|
|||
Income tax receivables and payables
|
(6
|
)
|
|
(224
|
)
|
|
(155
|
)
|
|||
Changes in working capital and other non-current assets and liabilities
|
(418
|
)
|
|
91
|
|
|
54
|
|
|||
Other operating activities
|
(53
|
)
|
|
34
|
|
|
(140
|
)
|
|||
Net cash from operating activities
|
$
|
7,430
|
|
|
$
|
5,726
|
|
|
$
|
7,304
|
|
(a)
|
Represents depreciation and amortization, gains and losses on derivative transactions and foreign exchange, deferred income taxes, provisions for uncollectible accounts, pension and postretirement benefit expense, stock compensation expense, and other non-cash items.
|
•
|
We paid $2.271 billion in 2014 to settle postretirement benefit obligations for certain union employees.
|
•
|
We paid $176 million in 2014 for retroactive economic benefits under the collective bargaining agreement that were related to the period between August through December of 2013.
|
•
|
During 2014, we received cash tax benefits of $920 million from the items described above (through reduced U.S. Federal and state quarterly income tax payments).
|
•
|
We paid $53 million in 2015 for additional retroactive economic benefits under the collective bargaining agreement and we received $20 million of cash tax benefits (through reduced U.S. Federal and state quarterly income tax payments) from the payment.
|
•
|
In 2015, we made discretionary contributions to our three primary company-sponsored U.S. pension plans totaling $1.030 billion.
|
•
|
In 2014, we made discretionary contributions to our three primary company-sponsored U.S. pension plans totaling $1.042 billion.
|
•
|
In 2013, we did not have any required, nor make any discretionary, contributions to our primary company-sponsored pension plans in the U.S.
|
•
|
The remaining contributions in the 2013 through 2015 period were largely due to contributions to our international pension plans and U.S. postretirement medical benefit plans.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net cash used in investing activities
|
$
|
(5,309
|
)
|
|
$
|
(2,801
|
)
|
|
$
|
(2,114
|
)
|
Capital Expenditures:
|
|
|
|
|
|
||||||
Buildings and facilities
|
$
|
(996
|
)
|
|
$
|
(808
|
)
|
|
$
|
(483
|
)
|
Aircraft and parts
|
(27
|
)
|
|
(44
|
)
|
|
(478
|
)
|
|||
Vehicles
|
(936
|
)
|
|
(1,061
|
)
|
|
(662
|
)
|
|||
Information technology
|
(420
|
)
|
|
(415
|
)
|
|
(442
|
)
|
|||
|
$
|
(2,379
|
)
|
|
$
|
(2,328
|
)
|
|
$
|
(2,065
|
)
|
Capital Expenditures as a % of Revenue
|
4.1
|
%
|
|
4.0
|
%
|
|
3.7
|
%
|
|||
Other Investing Activities:
|
|
|
|
|
|
||||||
Proceeds from disposals of property, plant and equipment
|
$
|
26
|
|
|
$
|
53
|
|
|
$
|
104
|
|
Net decrease in finance receivables
|
$
|
5
|
|
|
$
|
44
|
|
|
$
|
39
|
|
Net (purchases) sales of marketable securities
|
$
|
(1,027
|
)
|
|
$
|
(419
|
)
|
|
$
|
9
|
|
Cash received (paid) for business acquisitions and dispositions
|
$
|
(1,904
|
)
|
|
$
|
(88
|
)
|
|
$
|
(22
|
)
|
Other investing activities
|
$
|
(30
|
)
|
|
$
|
(63
|
)
|
|
$
|
(179
|
)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net cash used in financing activities
|
$
|
(1,565
|
)
|
|
$
|
(5,161
|
)
|
|
$
|
(7,807
|
)
|
Share Repurchases:
|
|
|
|
|
|
||||||
Cash expended for shares repurchased
|
$
|
(2,702
|
)
|
|
$
|
(2,695
|
)
|
|
$
|
(3,838
|
)
|
Number of shares repurchased
|
(26.8
|
)
|
|
(26.4
|
)
|
|
(43.2
|
)
|
|||
Shares outstanding at year-end
|
886
|
|
|
905
|
|
|
923
|
|
|||
Percent reduction in shares outstanding
|
(2.1
|
)%
|
|
(2.0
|
)%
|
|
(3.1
|
)%
|
|||
Dividends:
|
|
|
|
|
|
||||||
Dividends declared per share
|
$
|
2.92
|
|
|
$
|
2.68
|
|
|
$
|
2.48
|
|
Cash expended for dividend payments
|
$
|
(2,525
|
)
|
|
$
|
(2,366
|
)
|
|
$
|
(2,260
|
)
|
Borrowings:
|
|
|
|
|
|
||||||
Net borrowings (repayments) of debt principal
|
$
|
3,588
|
|
|
$
|
(169
|
)
|
|
$
|
(1,775
|
)
|
Other Financing Activities:
|
|
|
|
|
|
||||||
Cash received for common stock issuances
|
$
|
249
|
|
|
$
|
274
|
|
|
$
|
491
|
|
Other financing activities
|
$
|
(175
|
)
|
|
$
|
(205
|
)
|
|
$
|
(425
|
)
|
Capitalization:
|
|
|
|
|
|
||||||
Total debt outstanding at year-end
|
$
|
14,334
|
|
|
$
|
10,779
|
|
|
$
|
10,872
|
|
Total shareowners’ equity at year-end
|
2,491
|
|
|
2,158
|
|
|
6,488
|
|
|||
Total capitalization
|
$
|
16,825
|
|
|
$
|
12,937
|
|
|
$
|
17,360
|
|
Debt to Total Capitalization %
|
85.2
|
%
|
|
83.3
|
%
|
|
62.6
|
%
|
Commitment Type
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
After 2020
|
|
Total
|
||||||||||||||
Capital Leases
|
$
|
72
|
|
|
$
|
73
|
|
|
$
|
61
|
|
|
$
|
59
|
|
|
$
|
53
|
|
|
$
|
392
|
|
|
$
|
710
|
|
Operating Leases
|
324
|
|
|
263
|
|
|
197
|
|
|
125
|
|
|
84
|
|
|
266
|
|
|
1,259
|
|
|||||||
Debt Principal
|
2,978
|
|
|
377
|
|
|
751
|
|
|
1,000
|
|
|
547
|
|
|
8,039
|
|
|
13,692
|
|
|||||||
Debt Interest
|
296
|
|
|
296
|
|
|
282
|
|
|
257
|
|
|
231
|
|
|
3,856
|
|
|
5,218
|
|
|||||||
Purchase Commitments
|
257
|
|
|
119
|
|
|
53
|
|
|
24
|
|
|
15
|
|
|
11
|
|
|
479
|
|
|||||||
Pension Fundings
|
1,161
|
|
|
—
|
|
|
292
|
|
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
1,453
|
|
|||||||
Other Liabilities
|
23
|
|
|
10
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||||
Total
|
$
|
5,111
|
|
|
$
|
1,138
|
|
|
$
|
1,641
|
|
|
$
|
1,465
|
|
|
$
|
930
|
|
|
$
|
12,564
|
|
|
$
|
22,849
|
|
•
|
Partial Plan Curtailment
: We recorded a $112 million pre-tax curtailment loss due to the elimination of future service benefit accruals. This curtailment loss represents the accelerated recognition of unamortized prior service costs.
|
•
|
Remeasurement of Postretirement Obligation
: We recorded a $746 million pre-tax loss due to the remeasurement of the postretirement benefit obligations of the affected UPS-sponsored health and welfare benefit plans.
|
•
|
Settlement
: We recorded a $208 million pre-tax settlement loss, which represents the recognition of unamortized actuarial losses associated with the postretirement obligation for the NMA Group.
|
•
|
Liability Transfer
: We have removed a significant liability from our balance sheet, which helps to reduce uncertainty around potential changes to healthcare laws and regulations, control the volatility of healthcare inflation, and removes the risk associated with providing future retiree healthcare.
|
•
|
Negotiated Healthcare Costs:
Using the model of a defined contribution plan allows us to negotiate our contributions towards healthcare costs going forward, and provides more certainty of costs over the contract period.
|
•
|
Minimize Impact of Healthcare Law Changes:
Multiemployer plans have several advantages under the Patient Protection and Affordable Care Act of 2010, including reduced transitional fees and the ability to limit the impact of future excise taxes.
|
•
|
Mitigate Demographic Issues:
This helps reduce the potential impact of increased early retirements by employees.
|
Pension Plans
|
25 Basis Point
Increase
|
|
25 Basis Point
Decrease
|
||||
Discount Rate:
|
|
|
|
||||
Effect on ongoing net periodic benefit cost
|
$
|
(63
|
)
|
|
$
|
66
|
|
Effect on net periodic benefit cost for amounts recognized outside the 10% corridor
|
(86
|
)
|
|
1,048
|
|
||
Effect on projected benefit obligation
|
(1,490
|
)
|
|
1,651
|
|
||
Return on Assets:
|
|
|
|
||||
Effect on ongoing net periodic benefit cost
(1)
|
(73
|
)
|
|
73
|
|
||
Effect on net periodic benefit cost for amounts recognized outside the 10% corridor
(2)
|
(46
|
)
|
|
47
|
|
||
|
|
|
|
||||
Postretirement Medical Plans
|
|
|
|
||||
Discount Rate:
|
|
|
|
||||
Effect on ongoing net periodic benefit cost
|
3
|
|
|
(3
|
)
|
||
Effect on net periodic benefit cost for amounts recognized outside the 10% corridor
|
(11
|
)
|
|
13
|
|
||
Effect on accumulated postretirement benefit obligation
|
(57
|
)
|
|
67
|
|
||
Health Care Cost Trend Rate:
|
|
|
|
||||
Effect on ongoing net periodic benefit cost
|
1
|
|
|
(1
|
)
|
||
Effect on net periodic benefit cost for amounts recognized outside the 10% corridor
|
11
|
|
|
(11
|
)
|
||
Effect on accumulated postretirement benefit obligation
|
17
|
|
|
(19
|
)
|
(1)
|
Amount calculated based on 25 basis point increase / decrease in the expected return on assets.
|
(2)
|
Amount calculated based on 25 basis point increase / decrease in the actual return on assets.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
Shock-Test Result
As of December 31,
|
||||||
(in millions)
|
2015
|
|
2014
|
||||
Change in Fair Value:
|
|
|
|
||||
Currency Derivatives
(1)
|
$
|
(435
|
)
|
|
$
|
(229
|
)
|
Change in Annual Interest Expense:
|
|
|
|
||||
Variable Rate Debt
(2)
|
$
|
44
|
|
|
$
|
15
|
|
Interest Rate Derivatives
(2)
|
$
|
66
|
|
|
$
|
81
|
|
(1)
|
The potential change in fair value from a hypothetical 10% weakening of the U.S. Dollar against local currency exchange rates across all maturities.
|
(2)
|
The potential change in annual interest expense resulting from a hypothetical 100 basis point increase in short-term interest rates, applied to our variable rate debt and swap instruments (excluding hedges of anticipated debt issuances).
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue
|
$
|
58,363
|
|
|
$
|
58,232
|
|
|
$
|
55,438
|
|
Operating Expenses:
|
|
|
|
|
|
||||||
Compensation and benefits
|
31,028
|
|
|
32,045
|
|
|
28,557
|
|
|||
Repairs and maintenance
|
1,400
|
|
|
1,371
|
|
|
1,240
|
|
|||
Depreciation and amortization
|
2,084
|
|
|
1,923
|
|
|
1,867
|
|
|||
Purchased transportation
|
8,043
|
|
|
8,460
|
|
|
7,486
|
|
|||
Fuel
|
2,482
|
|
|
3,883
|
|
|
4,027
|
|
|||
Other occupancy
|
1,022
|
|
|
1,044
|
|
|
950
|
|
|||
Other expenses
|
4,636
|
|
|
4,538
|
|
|
4,277
|
|
|||
Total Operating Expenses
|
50,695
|
|
|
53,264
|
|
|
48,404
|
|
|||
Operating Profit
|
7,668
|
|
|
4,968
|
|
|
7,034
|
|
|||
Other Income and (Expense):
|
|
|
|
|
|
||||||
Investment income
|
15
|
|
|
22
|
|
|
20
|
|
|||
Interest expense
|
(341
|
)
|
|
(353
|
)
|
|
(380
|
)
|
|||
Total Other Income and (Expense)
|
(326
|
)
|
|
(331
|
)
|
|
(360
|
)
|
|||
Income Before Income Taxes
|
7,342
|
|
|
4,637
|
|
|
6,674
|
|
|||
Income Tax Expense
|
2,498
|
|
|
1,605
|
|
|
2,302
|
|
|||
Net Income
|
$
|
4,844
|
|
|
$
|
3,032
|
|
|
$
|
4,372
|
|
Basic Earnings Per Share
|
$
|
5.38
|
|
|
$
|
3.31
|
|
|
$
|
4.65
|
|
Diluted Earnings Per Share
|
$
|
5.35
|
|
|
$
|
3.28
|
|
|
$
|
4.61
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net Income
|
$
|
4,844
|
|
|
$
|
3,032
|
|
|
$
|
4,372
|
|
Change in foreign currency translation adjustment, net of tax
|
(440
|
)
|
|
(331
|
)
|
|
(260
|
)
|
|||
Change in unrealized gain (loss) on marketable securities, net of tax
|
(1
|
)
|
|
1
|
|
|
(7
|
)
|
|||
Change in unrealized gain (loss) on cash flow hedges, net of tax
|
6
|
|
|
280
|
|
|
67
|
|
|||
Change in unrecognized pension and postretirement benefit costs, net of tax
|
489
|
|
|
(3,084
|
)
|
|
3,094
|
|
|||
Comprehensive Income (Loss)
|
$
|
4,898
|
|
|
$
|
(102
|
)
|
|
$
|
7,266
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash Flows From Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
4,844
|
|
|
$
|
3,032
|
|
|
$
|
4,372
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
2,084
|
|
|
1,923
|
|
|
1,867
|
|
|||
Pension and postretirement benefit expense
|
1,189
|
|
|
3,040
|
|
|
1,115
|
|
|||
Pension and postretirement benefit contributions
|
(1,229
|
)
|
|
(1,258
|
)
|
|
(212
|
)
|
|||
Settlement of postretirement benefit obligation
|
—
|
|
|
(2,271
|
)
|
|
—
|
|
|||
Self-insurance reserves
|
(80
|
)
|
|
(201
|
)
|
|
34
|
|
|||
Deferred tax expense
|
540
|
|
|
385
|
|
|
(246
|
)
|
|||
Stock compensation expense
|
574
|
|
|
536
|
|
|
513
|
|
|||
Other (gains) losses
|
(185
|
)
|
|
218
|
|
|
35
|
|
|||
Changes in assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(452
|
)
|
|
(523
|
)
|
|
(515
|
)
|
|||
Other current assets
|
414
|
|
|
112
|
|
|
(13
|
)
|
|||
Accounts payable
|
(147
|
)
|
|
276
|
|
|
218
|
|
|||
Accrued wages and withholdings
|
(63
|
)
|
|
106
|
|
|
416
|
|
|||
Other current liabilities
|
(6
|
)
|
|
317
|
|
|
(140
|
)
|
|||
Other operating activities
|
(53
|
)
|
|
34
|
|
|
(140
|
)
|
|||
Net cash from operating activities
|
7,430
|
|
|
5,726
|
|
|
7,304
|
|
|||
Cash Flows From Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(2,379
|
)
|
|
(2,328
|
)
|
|
(2,065
|
)
|
|||
Proceeds from disposals of property, plant and equipment
|
26
|
|
|
53
|
|
|
104
|
|
|||
Purchases of marketable securities
|
(7,415
|
)
|
|
(3,525
|
)
|
|
(2,948
|
)
|
|||
Sales and maturities of marketable securities
|
6,388
|
|
|
3,106
|
|
|
2,957
|
|
|||
Net decrease in finance receivables
|
5
|
|
|
44
|
|
|
39
|
|
|||
Cash paid for business acquisitions
|
(1,904
|
)
|
|
(88
|
)
|
|
(22
|
)
|
|||
Other investing activities
|
(30
|
)
|
|
(63
|
)
|
|
(179
|
)
|
|||
Net cash used in investing activities
|
(5,309
|
)
|
|
(2,801
|
)
|
|
(2,114
|
)
|
|||
Cash Flows From Financing Activities:
|
|
|
|
|
|
||||||
Net change in short-term debt
|
2,529
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from long-term borrowings
|
3,783
|
|
|
1,525
|
|
|
100
|
|
|||
Repayments of long-term borrowings
|
(2,724
|
)
|
|
(1,694
|
)
|
|
(1,875
|
)
|
|||
Purchases of common stock
|
(2,702
|
)
|
|
(2,695
|
)
|
|
(3,838
|
)
|
|||
Issuances of common stock
|
249
|
|
|
274
|
|
|
491
|
|
|||
Dividends
|
(2,525
|
)
|
|
(2,366
|
)
|
|
(2,260
|
)
|
|||
Other financing activities
|
(175
|
)
|
|
(205
|
)
|
|
(425
|
)
|
|||
Net cash used in financing activities
|
(1,565
|
)
|
|
(5,161
|
)
|
|
(7,807
|
)
|
|||
Effect Of Exchange Rate Changes On Cash And Cash Equivalents
|
(117
|
)
|
|
(138
|
)
|
|
(45
|
)
|
|||
Net Increase (Decrease) In Cash And Cash Equivalents
|
439
|
|
|
(2,374
|
)
|
|
(2,662
|
)
|
|||
Cash And Cash Equivalents:
|
|
|
|
|
|
||||||
Beginning of period
|
2,291
|
|
|
4,665
|
|
|
7,327
|
|
|||
End of period
|
$
|
2,730
|
|
|
$
|
2,291
|
|
|
$
|
4,665
|
|
Cash Paid During The Period For:
|
|
|
|
|
|
||||||
Interest (net of amount capitalized)
|
$
|
345
|
|
|
$
|
366
|
|
|
$
|
409
|
|
Income taxes
|
$
|
1,913
|
|
|
$
|
1,524
|
|
|
$
|
2,712
|
|
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Current trading marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
715
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
715
|
|
Non-U.S. government debt securities
|
363
|
|
|
—
|
|
|
—
|
|
|
363
|
|
||||
Carbon credit investments
|
347
|
|
|
9
|
|
|
(5
|
)
|
|
351
|
|
||||
Total trading marketable securities
|
1,425
|
|
|
9
|
|
|
(5
|
)
|
|
1,429
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Current available-for-sale marketable securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency debt securities
|
$
|
341
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
340
|
|
Mortgage and asset-backed debt securities
|
74
|
|
|
1
|
|
|
(1
|
)
|
|
74
|
|
||||
Corporate debt securities
|
147
|
|
|
—
|
|
|
(1
|
)
|
|
146
|
|
||||
U.S. state and local municipal debt securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Equity securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Non-U.S. government debt securities
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Total available-for-sale marketable securities
|
569
|
|
|
1
|
|
|
(3
|
)
|
|
567
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total current marketable securities
|
$
|
1,994
|
|
|
$
|
10
|
|
|
$
|
(8
|
)
|
|
$
|
1,996
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
2014
|
|
|
|
|
|
|
|
||||||||
Current trading marketable securities:
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
388
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
388
|
|
Non-U.S. government debt securities
|
42
|
|
|
—
|
|
|
—
|
|
|
42
|
|
||||
Carbon credit investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total trading marketable securities
|
430
|
|
|
—
|
|
|
—
|
|
|
430
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Current available-for-sale marketable securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency debt securities
|
$
|
321
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
321
|
|
Mortgage and asset-backed debt securities
|
89
|
|
|
1
|
|
|
(1
|
)
|
|
89
|
|
||||
Corporate debt securities
|
146
|
|
|
—
|
|
|
—
|
|
|
146
|
|
||||
U.S. state and local municipal debt securities
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Equity securities
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Non-U.S. government debt securities
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Total available-for-sale marketable securities
|
562
|
|
|
2
|
|
|
(2
|
)
|
|
562
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total current marketable securities
|
$
|
992
|
|
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
992
|
|
|
|
|
|
|
|
|
|
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||||||
U.S. government and agency debt securities
|
$
|
168
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
168
|
|
|
$
|
(1
|
)
|
Mortgage and asset-backed debt securities
|
—
|
|
|
—
|
|
|
28
|
|
|
(1
|
)
|
|
28
|
|
|
(1
|
)
|
||||||
Corporate debt securities
|
—
|
|
|
—
|
|
|
50
|
|
|
(1
|
)
|
|
50
|
|
|
(1
|
)
|
||||||
U.S. state and local municipal debt securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Non-U.S. government debt securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Carbon credit investments
|
189
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
189
|
|
|
(5
|
)
|
||||||
Other investment securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total marketable securities
|
$
|
357
|
|
|
$
|
(6
|
)
|
|
$
|
78
|
|
|
$
|
(2
|
)
|
|
$
|
435
|
|
|
$
|
(8
|
)
|
|
Cost
|
|
Estimated
Fair Value
|
||||
Due in one year or less
|
$
|
1,131
|
|
|
$
|
1,131
|
|
Due after one year through three years
|
425
|
|
|
423
|
|
||
Due after three years through five years
|
14
|
|
|
15
|
|
||
Due after five years
|
75
|
|
|
74
|
|
||
|
1,645
|
|
|
1,643
|
|
||
Equity and other investment securities
|
349
|
|
|
353
|
|
||
|
$
|
1,994
|
|
|
$
|
1,996
|
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency debt securities
|
$
|
340
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
340
|
|
Mortgage and asset-backed debt securities
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||
Corporate debt securities
|
—
|
|
|
861
|
|
|
—
|
|
|
861
|
|
||||
U.S. state and local municipal debt securities
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Equity securities
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Non-U.S. government debt securities
|
—
|
|
|
366
|
|
|
—
|
|
|
366
|
|
||||
Carbon credit investments
|
351
|
|
|
—
|
|
|
—
|
|
|
351
|
|
||||
Total marketable securities
|
691
|
|
|
1,305
|
|
|
—
|
|
|
1,996
|
|
||||
Other non-current investments
|
19
|
|
|
—
|
|
|
32
|
|
|
51
|
|
||||
Total
|
$
|
710
|
|
|
$
|
1,305
|
|
|
$
|
32
|
|
|
$
|
2,047
|
|
|
|
|
|
|
|
|
|
||||||||
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
2014
|
|
|
|
|
|
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government and agency debt securities
|
$
|
321
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
321
|
|
Mortgage and asset-backed debt securities
|
—
|
|
|
89
|
|
|
—
|
|
|
89
|
|
||||
Corporate debt securities
|
—
|
|
|
534
|
|
|
—
|
|
|
534
|
|
||||
U.S. state and local municipal debt securities
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Equity securities
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Non-U.S. government debt securities
|
—
|
|
|
44
|
|
|
—
|
|
|
44
|
|
||||
Total marketable securities
|
321
|
|
|
671
|
|
|
—
|
|
|
992
|
|
||||
Other investments
|
19
|
|
|
—
|
|
|
64
|
|
|
83
|
|
||||
Total
|
$
|
340
|
|
|
$
|
671
|
|
|
$
|
64
|
|
|
$
|
1,075
|
|
|
Marketable
Securities
|
|
Other
Investments
|
|
Total
|
||||||
Balance on January 1, 2014
|
$
|
—
|
|
|
$
|
110
|
|
|
$
|
110
|
|
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gains (losses):
|
|
|
|
|
|
||||||
Included in earnings (in investment income)
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
|||
Included in accumulated other comprehensive income (pre-tax)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance on December 31, 2014
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
64
|
|
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gains (losses):
|
|
|
|
|
|
||||||
Included in earnings (in investment income)
|
—
|
|
|
(32
|
)
|
|
(32
|
)
|
|||
Included in accumulated other comprehensive income (pre-tax)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Purchases
|
—
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance on December 31, 2015
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
32
|
|
|
2015
|
|
2014
|
||||
Vehicles
|
$
|
8,111
|
|
|
$
|
7,542
|
|
Aircraft
|
15,815
|
|
|
15,801
|
|
||
Land
|
1,263
|
|
|
1,145
|
|
||
Buildings
|
3,280
|
|
|
3,276
|
|
||
Building and leasehold improvements
|
3,450
|
|
|
3,266
|
|
||
Plant equipment
|
8,026
|
|
|
7,649
|
|
||
Technology equipment
|
1,670
|
|
|
1,608
|
|
||
Equipment under operating leases
|
30
|
|
|
34
|
|
||
Construction-in-progress
|
273
|
|
|
299
|
|
||
|
41,918
|
|
|
40,620
|
|
||
Less: Accumulated depreciation and amortization
|
(23,566
|
)
|
|
(22,339
|
)
|
||
|
$
|
18,352
|
|
|
$
|
18,281
|
|
|
U.S. Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International
Pension Benefits
|
||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
Net Periodic Benefit Cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Service cost
|
$
|
1,527
|
|
|
$
|
1,137
|
|
|
$
|
1,349
|
|
|
$
|
34
|
|
|
$
|
62
|
|
|
$
|
103
|
|
|
$
|
48
|
|
|
$
|
43
|
|
|
$
|
47
|
|
Interest cost
|
1,694
|
|
|
1,604
|
|
|
1,449
|
|
|
117
|
|
|
152
|
|
|
185
|
|
|
44
|
|
|
49
|
|
|
44
|
|
|||||||||
Expected return on assets
|
(2,489
|
)
|
|
(2,257
|
)
|
|
(2,147
|
)
|
|
(17
|
)
|
|
(25
|
)
|
|
(33
|
)
|
|
(61
|
)
|
|
(61
|
)
|
|
(55
|
)
|
|||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Transition obligation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Prior service cost
|
168
|
|
|
169
|
|
|
172
|
|
|
5
|
|
|
—
|
|
|
4
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|||||||||
Actuarial (gain) loss
|
70
|
|
|
991
|
|
|
—
|
|
|
17
|
|
|
767
|
|
|
—
|
|
|
31
|
|
|
48
|
|
|
—
|
|
|||||||||
Curtailment and settlement loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(5
|
)
|
|||||||||
Net periodic benefit cost
|
$
|
970
|
|
|
$
|
1,644
|
|
|
$
|
823
|
|
|
$
|
156
|
|
|
$
|
1,312
|
|
|
$
|
259
|
|
|
$
|
63
|
|
|
$
|
84
|
|
|
$
|
33
|
|
|
U.S. Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International
Pension Benefits
|
|||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|||||||||
Discount rate
|
4.40
|
%
|
|
5.32
|
%
|
|
4.42
|
%
|
|
4.18
|
%
|
|
4.89
|
%
|
|
4.21
|
%
|
|
3.56
|
%
|
|
4.35
|
%
|
|
4.00
|
%
|
Rate of compensation increase
|
4.29
|
%
|
|
4.29
|
%
|
|
4.16
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
3.08
|
%
|
|
3.22
|
%
|
|
3.03
|
%
|
Expected return on assets
|
8.75
|
%
|
|
8.75
|
%
|
|
8.75
|
%
|
|
8.75
|
%
|
|
8.75
|
%
|
|
8.75
|
%
|
|
6.03
|
%
|
|
6.29
|
%
|
|
6.90
|
%
|
|
U.S. Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International
Pension Benefits
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||
Discount rate
|
4.86
|
%
|
|
4.40
|
%
|
|
4.79
|
%
|
|
4.18
|
%
|
|
3.51
|
%
|
|
3.56
|
%
|
Rate of compensation increase
|
4.29
|
%
|
|
4.29
|
%
|
|
N/A
|
|
|
N/A
|
|
|
3.04
|
%
|
|
3.08
|
%
|
|
Increase (Decrease) in the Projected Benefit Obligation
|
||||||
|
Pension Benefits
|
|
Postretirement Medical Benefits
|
||||
One basis point increase in discount rate
|
$
|
(60
|
)
|
|
$
|
(2
|
)
|
One basis point decrease in discount rate
|
$
|
66
|
|
|
$
|
3
|
|
|
1% Increase
|
|
1% Decrease
|
||||
Effect on total of service cost and interest cost
|
$
|
4
|
|
|
$
|
(4
|
)
|
Effect on postretirement benefit obligation
|
$
|
73
|
|
|
$
|
(79
|
)
|
|
U.S. Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International
Pension Benefits
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Funded Status:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets
|
$
|
28,887
|
|
|
$
|
28,828
|
|
|
$
|
130
|
|
|
$
|
259
|
|
|
$
|
1,014
|
|
|
$
|
1,042
|
|
Benefit obligation
|
(36,846
|
)
|
|
(37,521
|
)
|
|
(2,673
|
)
|
|
(2,883
|
)
|
|
(1,219
|
)
|
|
(1,274
|
)
|
||||||
Funded status recognized at December 31
|
$
|
(7,959
|
)
|
|
$
|
(8,693
|
)
|
|
$
|
(2,543
|
)
|
|
$
|
(2,624
|
)
|
|
$
|
(205
|
)
|
|
$
|
(232
|
)
|
Funded Status Recognized in our Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other non-current assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
25
|
|
Other current liabilities
|
(16
|
)
|
|
(17
|
)
|
|
(98
|
)
|
|
(102
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||||
Pension and postretirement benefit obligations
|
(7,943
|
)
|
|
(8,676
|
)
|
|
(2,445
|
)
|
|
(2,522
|
)
|
|
(250
|
)
|
|
(254
|
)
|
||||||
Net liability at December 31
|
$
|
(7,959
|
)
|
|
$
|
(8,693
|
)
|
|
$
|
(2,543
|
)
|
|
$
|
(2,624
|
)
|
|
$
|
(205
|
)
|
|
$
|
(232
|
)
|
Amounts Recognized in AOCI:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrecognized net prior service cost
|
$
|
(954
|
)
|
|
$
|
(1,122
|
)
|
|
$
|
(26
|
)
|
|
$
|
(32
|
)
|
|
$
|
(4
|
)
|
|
$
|
(7
|
)
|
Unrecognized net actuarial gain (loss)
|
(3,263
|
)
|
|
(3,752
|
)
|
|
32
|
|
|
(89
|
)
|
|
(103
|
)
|
|
(103
|
)
|
||||||
Gross unrecognized cost at December 31
|
(4,217
|
)
|
|
(4,874
|
)
|
|
6
|
|
|
(121
|
)
|
|
(107
|
)
|
|
(110
|
)
|
||||||
Deferred tax assets (liabilities) at December 31
|
1,585
|
|
|
1,833
|
|
|
(2
|
)
|
|
45
|
|
|
26
|
|
|
29
|
|
||||||
Net unrecognized cost at December 31
|
$
|
(2,632
|
)
|
|
$
|
(3,041
|
)
|
|
$
|
4
|
|
|
$
|
(76
|
)
|
|
$
|
(81
|
)
|
|
$
|
(81
|
)
|
|
Projected Benefit Obligation
Exceeds the Fair Value of Plan Assets
|
|
Accumulated Benefit Obligation
Exceeds the Fair Value of Plan Assets
|
||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||
U.S. Pension Benefits:
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
$
|
36,846
|
|
|
$
|
37,521
|
|
|
$
|
36,846
|
|
|
$
|
37,521
|
|
Accumulated benefit obligation
|
34,210
|
|
|
34,725
|
|
|
34,210
|
|
|
34,725
|
|
||||
Fair value of plan assets
|
28,887
|
|
|
28,828
|
|
|
28,887
|
|
|
28,828
|
|
||||
International Pension Benefits:
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation
|
$
|
493
|
|
|
$
|
510
|
|
|
$
|
477
|
|
|
$
|
474
|
|
Accumulated benefit obligation
|
416
|
|
|
426
|
|
|
401
|
|
|
398
|
|
||||
Fair value of plan assets
|
247
|
|
|
261
|
|
|
232
|
|
|
232
|
|
|
U.S. Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International
Pension
Benefits
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Benefit Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Projected benefit obligation at beginning of year
|
$
|
37,521
|
|
|
$
|
29,508
|
|
|
$
|
2,883
|
|
|
$
|
4,046
|
|
|
$
|
1,274
|
|
|
$
|
1,076
|
|
Service cost
|
1,527
|
|
|
1,137
|
|
|
34
|
|
|
62
|
|
|
48
|
|
|
43
|
|
||||||
Interest cost
|
1,694
|
|
|
1,604
|
|
|
117
|
|
|
152
|
|
|
44
|
|
|
49
|
|
||||||
Gross benefits paid
|
(1,056
|
)
|
|
(924
|
)
|
|
(262
|
)
|
|
(255
|
)
|
|
(30
|
)
|
|
(26
|
)
|
||||||
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
21
|
|
|
15
|
|
|
6
|
|
|
5
|
|
||||||
Plan amendments
|
—
|
|
|
5
|
|
|
—
|
|
|
65
|
|
|
(2
|
)
|
|
—
|
|
||||||
Actuarial (gain)/loss
|
(2,840
|
)
|
|
6,191
|
|
|
(120
|
)
|
|
1,069
|
|
|
13
|
|
|
194
|
|
||||||
Foreign currency exchange rate changes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
|
(103
|
)
|
||||||
Curtailments and settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,271
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
38
|
|
||||||
Projected benefit obligation at end of year
|
$
|
36,846
|
|
|
$
|
37,521
|
|
|
$
|
2,673
|
|
|
$
|
2,883
|
|
|
$
|
1,219
|
|
|
$
|
1,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International
Pension
Benefits
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Fair Value of Plan Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets at beginning of year
|
$
|
28,828
|
|
|
$
|
26,224
|
|
|
$
|
259
|
|
|
$
|
355
|
|
|
$
|
1,042
|
|
|
$
|
931
|
|
Actual return on plan assets
|
67
|
|
|
2,471
|
|
|
—
|
|
|
22
|
|
|
43
|
|
|
106
|
|
||||||
Employer contributions
|
1,048
|
|
|
1,057
|
|
|
111
|
|
|
122
|
|
|
70
|
|
|
79
|
|
||||||
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
21
|
|
|
15
|
|
|
3
|
|
|
3
|
|
||||||
Gross benefits paid
|
(1,056
|
)
|
|
(924
|
)
|
|
(261
|
)
|
|
(255
|
)
|
|
(30
|
)
|
|
(26
|
)
|
||||||
Foreign currency exchange rate changes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
(79
|
)
|
||||||
Curtailments and settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(2
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
30
|
|
||||||
Fair value of plan assets at end of year
|
$
|
28,887
|
|
|
$
|
28,828
|
|
|
$
|
130
|
|
|
$
|
259
|
|
|
$
|
1,014
|
|
|
$
|
1,042
|
|
•
|
Hedge Funds:
We maintain plan assets invested in hedge funds that pursue multiple strategies to diversify risk and reduce volatility. Investments in hedge funds are valued using reported net asset values as of
December 31
. These assets are primarily invested in a portfolio of diversified, direct investments and funds of hedge funds. Most of these funds allow redemptions either quarterly or semi-annually after a two to three month notice period, while other funds allow for redemption after only a brief notification period with no restriction on redemption frequency. At
December 31, 2015
, unfunded commitments to these hedge funds totaling approximately $
234
million are expected to be contributed over the remaining investment period, typically ranging between two and four years.
|
•
|
Risk Parity Funds:
We maintain plan assets invested in risk parity strategies in order to provide diversification and balance risk / return objectives. Investments in risk parity funds are valued using reported net asset values as of
December 31
. These strategies reflect a multi-asset class balanced risk approach generally consisting of equity, interest rates, credit, and commodities. These funds allow for monthly redemptions with only a brief notification period. No unfunded commitments existed with respect to these funds as of
December 31, 2015
.
|
•
|
Real Estate and Private Equity Funds:
We maintain plan assets invested in limited partnership interests in various private equity and real estate funds. These private equity and real estate investment funds are valued using fair values per the most recent partnership audited financial reports, adjusted as appropriate for any lag between the date of the financial reports and
December 31
. The real estate and private equity investments consist of U.S. and non-U.S. investments and are broadly diversified. Limited provision exists for the redemption of these interests by the limited partners that invest in these funds until the end of the term of the partnerships, typically ranging between
10
and
15
years from the date of inception. An active secondary market exists for similar partnership interests, although no particular value (discount or premium) can be guaranteed. At
December 31, 2015
, unfunded commitments to such limited partnerships totaling approximately $
1.855
billion are expected to be contributed over the remaining investment period, typically ranging between three and six years.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Assets
|
|
Percentage of
Plan Assets -
2015
|
|
Target
Allocation
2015
|
|||||||||
Asset Category (U.S. Plans):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
$
|
716
|
|
|
$
|
95
|
|
|
$
|
—
|
|
|
$
|
811
|
|
|
2.8
|
%
|
|
0-5
|
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Large Cap
|
2,542
|
|
|
1,704
|
|
|
—
|
|
|
4,246
|
|
|
|
|
|
|||||
U.S. Small Cap
|
310
|
|
|
42
|
|
|
—
|
|
|
352
|
|
|
|
|
|
|||||
Emerging Markets
|
1,271
|
|
|
155
|
|
|
—
|
|
|
1,426
|
|
|
|
|
|
|||||
Global Equity
|
2,935
|
|
|
—
|
|
|
—
|
|
|
2,935
|
|
|
|
|
|
|||||
International Equity
|
2,308
|
|
|
781
|
|
|
—
|
|
|
3,089
|
|
|
|
|
|
|||||
Total Equity Securities
|
9,366
|
|
|
2,682
|
|
|
—
|
|
|
12,048
|
|
|
41.5
|
|
|
35-55
|
||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Government Securities
|
3,257
|
|
|
212
|
|
|
—
|
|
|
3,469
|
|
|
|
|
|
|||||
Corporate Bonds
|
—
|
|
|
3,682
|
|
|
279
|
|
|
3,961
|
|
|
|
|
|
|||||
Global Bonds
|
—
|
|
|
147
|
|
|
586
|
|
|
733
|
|
|
|
|
|
|||||
Municipal Bonds
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
|
|
|
|
|||||
Total Fixed Income Securities
|
3,257
|
|
|
4,077
|
|
|
865
|
|
|
8,199
|
|
|
28.2
|
|
|
25-35
|
||||
Other Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Hedge Funds
|
—
|
|
|
—
|
|
|
3,617
|
|
|
3,617
|
|
|
12.5
|
|
|
5-15
|
||||
Private Equity
|
—
|
|
|
—
|
|
|
1,415
|
|
|
1,415
|
|
|
4.9
|
|
|
1-10
|
||||
Real Estate
|
126
|
|
|
155
|
|
|
1,567
|
|
|
1,848
|
|
|
6.4
|
|
|
1-10
|
||||
Structured Products
(1)
|
—
|
|
|
324
|
|
|
—
|
|
|
324
|
|
|
1.1
|
|
|
0-5
|
||||
Risk Parity Funds
|
—
|
|
|
—
|
|
|
755
|
|
|
755
|
|
|
2.6
|
|
|
1-10
|
||||
Total U.S. Plan Assets
|
$
|
13,465
|
|
|
$
|
7,333
|
|
|
$
|
8,219
|
|
|
$
|
29,017
|
|
|
100.0
|
%
|
|
|
Asset Category (International Plans):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
$
|
9
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
25
|
|
|
2.5
|
|
|
0-5
|
|
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Local Markets Equity
|
133
|
|
|
107
|
|
|
—
|
|
|
240
|
|
|
|
|
|
|||||
U.S. Equity
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
|
|
|
|||||
Emerging Markets
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
|
|
|
|||||
International / Global Equity
|
84
|
|
|
92
|
|
|
—
|
|
|
176
|
|
|
|
|
|
|||||
Total Equity Securities
|
249
|
|
|
199
|
|
|
—
|
|
|
448
|
|
|
44.1
|
|
|
50-65
|
||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Local Government Bonds
|
72
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
|
|
|
|||||
Corporate Bonds
|
56
|
|
|
93
|
|
|
—
|
|
|
149
|
|
|
|
|
|
|||||
Total Fixed Income Securities
|
128
|
|
|
93
|
|
|
—
|
|
|
221
|
|
|
21.8
|
|
|
15-35
|
||||
Other Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Real Estate
|
—
|
|
|
111
|
|
|
—
|
|
|
111
|
|
|
10.9
|
|
|
0-17
|
||||
Other
|
—
|
|
|
160
|
|
|
49
|
|
|
209
|
|
|
20.7
|
|
|
0-20
|
||||
Total International Plan Assets
|
$
|
386
|
|
|
$
|
579
|
|
|
$
|
49
|
|
|
$
|
1,014
|
|
|
100.0
|
%
|
|
|
Total Plan Assets
|
$
|
13,851
|
|
|
$
|
7,912
|
|
|
$
|
8,268
|
|
|
$
|
30,031
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Assets
|
|
Percentage of
Plan Assets -
2014
|
|
Target
Allocation
2014
|
|||||||||
Asset Category (U.S. Plans):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
$
|
744
|
|
|
$
|
1,028
|
|
|
$
|
—
|
|
|
$
|
1,772
|
|
|
6.1
|
%
|
|
0-5
|
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Large Cap
|
2,066
|
|
|
2,082
|
|
|
—
|
|
|
4,148
|
|
|
|
|
|
|||||
U.S. Small Cap
|
322
|
|
|
44
|
|
|
—
|
|
|
366
|
|
|
|
|
|
|||||
Emerging Markets
|
1,270
|
|
|
116
|
|
|
—
|
|
|
1,386
|
|
|
|
|
|
|||||
Global Equity
|
2,788
|
|
|
—
|
|
|
—
|
|
|
2,788
|
|
|
|
|
|
|||||
International Equity
|
1,154
|
|
|
792
|
|
|
—
|
|
|
1,946
|
|
|
|
|
|
|||||
Total Equity Securities
|
7,600
|
|
|
3,034
|
|
|
—
|
|
|
10,634
|
|
|
36.6
|
|
|
35-55
|
||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Government Securities
|
4,541
|
|
|
239
|
|
|
—
|
|
|
4,780
|
|
|
|
|
|
|||||
Corporate Bonds
|
6
|
|
|
2,921
|
|
|
269
|
|
|
3,196
|
|
|
|
|
|
|||||
Global Bonds
|
—
|
|
|
159
|
|
|
613
|
|
|
772
|
|
|
|
|
|
|||||
Municipal Bonds
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
|
|
|
|
|||||
Total Fixed Income Securities
|
4,547
|
|
|
3,419
|
|
|
882
|
|
|
8,848
|
|
|
30.4
|
|
|
25-35
|
||||
Other Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Hedge Funds
|
—
|
|
|
—
|
|
|
3,595
|
|
|
3,595
|
|
|
12.4
|
|
|
5-15
|
||||
Private Equity
|
—
|
|
|
—
|
|
|
1,323
|
|
|
1,323
|
|
|
4.5
|
|
|
1-10
|
||||
Real Estate
|
412
|
|
|
47
|
|
|
1,307
|
|
|
1,766
|
|
|
6.1
|
|
|
1-10
|
||||
Structured Products
(1)
|
—
|
|
|
332
|
|
|
—
|
|
|
332
|
|
|
1.1
|
|
|
0-5
|
||||
Risk Parity Funds
|
—
|
|
|
—
|
|
|
817
|
|
|
817
|
|
|
2.8
|
|
|
1-10
|
||||
Total U.S. Plan Assets
|
$
|
13,303
|
|
|
$
|
7,860
|
|
|
$
|
7,924
|
|
|
$
|
29,087
|
|
|
100.0
|
%
|
|
|
Asset Category (International Plans):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
$
|
6
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
32
|
|
|
3.1
|
|
|
0-5
|
|
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Local Markets Equity
|
145
|
|
|
105
|
|
|
—
|
|
|
250
|
|
|
|
|
|
|||||
U.S. Equity
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
|
|
|
|||||
Emerging Markets
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
|
|
|
|||||
International / Global Equity
|
82
|
|
|
95
|
|
|
—
|
|
|
177
|
|
|
|
|
|
|||||
Total Equity Securities
|
263
|
|
|
200
|
|
|
—
|
|
|
463
|
|
|
44.3
|
|
|
50-65
|
||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Local Government Bonds
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
|
|
|
|||||
Corporate Bonds
|
55
|
|
|
94
|
|
|
—
|
|
|
149
|
|
|
|
|
|
|||||
Total Fixed Income Securities
|
133
|
|
|
94
|
|
|
—
|
|
|
227
|
|
|
21.8
|
|
|
15-35
|
||||
Other Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Real Estate
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
|
10.4
|
|
|
0-17
|
||||
Other
|
—
|
|
|
159
|
|
|
53
|
|
|
212
|
|
|
20.4
|
|
|
0-20
|
||||
Total International Plan Assets
|
$
|
402
|
|
|
$
|
587
|
|
|
$
|
53
|
|
|
$
|
1,042
|
|
|
100.0
|
%
|
|
|
Total Plan Assets
|
$
|
13,705
|
|
|
$
|
8,447
|
|
|
$
|
7,977
|
|
|
$
|
30,129
|
|
|
|
|
|
|
Corporate
Bonds
|
|
Hedge
Funds
|
|
Real
Estate
|
|
Private
Equity
|
|
Global Bonds
|
|
Risk Parity Funds
|
|
Other
|
|
Total
|
||||||||||||||||
Balance on January 1, 2014
|
$
|
223
|
|
|
$
|
3,738
|
|
|
$
|
1,091
|
|
|
$
|
1,397
|
|
|
$
|
—
|
|
|
$
|
756
|
|
|
$
|
55
|
|
|
$
|
7,260
|
|
Actual Return on Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Assets Held at End of Year
|
—
|
|
|
71
|
|
|
104
|
|
|
11
|
|
|
—
|
|
|
61
|
|
|
(2
|
)
|
|
245
|
|
||||||||
Assets Sold During the Year
|
—
|
|
|
(9
|
)
|
|
23
|
|
|
126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
||||||||
Purchases
|
108
|
|
|
1,043
|
|
|
350
|
|
|
166
|
|
|
735
|
|
|
—
|
|
|
—
|
|
|
2,402
|
|
||||||||
Sales
|
(62
|
)
|
|
(1,248
|
)
|
|
(261
|
)
|
|
(377
|
)
|
|
(122
|
)
|
|
—
|
|
|
—
|
|
|
(2,070
|
)
|
||||||||
Transfers Into (Out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Balance on December 31, 2014
|
$
|
269
|
|
|
$
|
3,595
|
|
|
$
|
1,307
|
|
|
$
|
1,323
|
|
|
$
|
613
|
|
|
$
|
817
|
|
|
$
|
53
|
|
|
$
|
7,977
|
|
Actual Return on Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Assets Held at End of Year
|
(8
|
)
|
|
62
|
|
|
79
|
|
|
(39
|
)
|
|
11
|
|
|
(62
|
)
|
|
(4
|
)
|
|
39
|
|
||||||||
Assets Sold During the Year
|
—
|
|
|
39
|
|
|
45
|
|
|
149
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
231
|
|
||||||||
Purchases
|
22
|
|
|
283
|
|
|
545
|
|
|
347
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
1,327
|
|
||||||||
Sales
|
(4
|
)
|
|
(362
|
)
|
|
(409
|
)
|
|
(365
|
)
|
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
(1,306
|
)
|
||||||||
Transfers Into (Out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Balance on December 31, 2015
|
$
|
279
|
|
|
$
|
3,617
|
|
|
$
|
1,567
|
|
|
$
|
1,415
|
|
|
$
|
586
|
|
|
$
|
755
|
|
|
$
|
49
|
|
|
$
|
8,268
|
|
|
U.S. Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International Pension
Benefits
|
||||||
Prior service cost / (benefit)
|
$
|
166
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
U.S.
Pension Benefits
|
|
U.S. Postretirement
Medical Benefits
|
|
International Pension
Benefits
|
||||||
Expected Employer Contributions:
|
|
|
|
|
|
||||||
2016 to plan trusts
|
$
|
1,161
|
|
|
$
|
—
|
|
|
$
|
55
|
|
2016 to plan participants
|
16
|
|
|
101
|
|
|
3
|
|
|||
Expected Benefit Payments:
|
|
|
|
|
|
||||||
2016
|
$
|
1,067
|
|
|
$
|
237
|
|
|
$
|
23
|
|
2017
|
1,168
|
|
|
236
|
|
|
23
|
|
|||
2018
|
1,278
|
|
|
232
|
|
|
26
|
|
|||
2019
|
1,398
|
|
|
232
|
|
|
29
|
|
|||
2020
|
1,529
|
|
|
228
|
|
|
32
|
|
|||
2021 - 2025
|
9,822
|
|
|
1,005
|
|
|
222
|
|
•
|
Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
|
•
|
If we negotiate to cease participating in a multiemployer plan, we may be required to pay that plan an amount based on our allocable share of its underfunded status, referred to as a "withdrawal liability". However, cessation of participation in a multiemployer plan and subsequent payment of any withdrawal liability is subject to the collective bargaining process.
|
•
|
If any of the multiemployer pension plans in which we participate enter critical status, and our contributions are not sufficient to satisfy any rehabilitation plan funding schedule, we could be required under the Pension Protection Act of 2006 to make additional surcharge contributions to the multiemployer pension plan in the amount of five to ten percent of the existing contributions required by our labor agreement. Such surcharges would cease upon the ratification of a new collective bargaining agreement, and could not recur unless a plan re-entered critical status at a later date.
|
|
EIN / Pension
Plan
|
|
Pension
Protection Act
Zone Status
|
|
FIP / RP Status
Pending /
|
|
(in millions)
UPS Contributions and Accruals
|
|
Surcharge
|
||||||||||||
Pension Fund
|
Number
|
|
2015
|
|
2014
|
|
Implemented
|
|
2015
|
|
2014
|
|
2013
|
|
Imposed
|
||||||
Alaska Teamster-Employer Pension Plan
|
92-6003463-024
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
No
|
Automotive Industries Pension Plan
|
94-1133245-001
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
4
|
|
|
5
|
|
|
4
|
|
|
No
|
|||
Central Pennsylvania Teamsters Defined Benefit Plan
|
23-6262789-001
|
|
Green
|
|
Green
|
|
No
|
|
36
|
|
|
33
|
|
|
30
|
|
|
No
|
|||
Eastern Shore Teamsters Pension Fund
|
52-0904953-001
|
|
Green
|
|
Green
|
|
No
|
|
4
|
|
|
4
|
|
|
4
|
|
|
No
|
|||
Employer-Teamsters Local Nos. 175 & 505 Pension Trust Fund
|
55-6021850-001
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
11
|
|
|
10
|
|
|
9
|
|
|
No
|
|||
Hagerstown Motor Carriers and Teamsters Pension Fund
|
52-6045424-001
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
7
|
|
|
6
|
|
|
5
|
|
|
No
|
|||
I.A.M. National Pension Fund / National Pension Plan
|
51-6031295-002
|
|
Green
|
|
Green
|
|
No
|
|
29
|
|
|
27
|
|
|
27
|
|
|
No
|
|||
International Brotherhood of Teamsters Union Local No. 710 Pension Fund
|
36-2377656-001
|
|
Green
|
|
Green
|
|
No
|
|
106
|
|
|
89
|
|
|
88
|
|
|
No
|
|||
Local 705, International Brotherhood of Teamsters Pension Plan
|
36-6492502-001
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
91
|
|
|
69
|
|
|
68
|
|
|
No
|
|||
Local 804 I.B.T. & Local 447 I.A.M.—UPS Multiemployer Retirement Plan
|
51-6117726-001
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
97
|
|
|
92
|
|
|
88
|
|
|
No
|
|||
Milwaukee Drivers Pension Trust Fund
|
39-6045229-001
|
|
Green
|
|
Green
|
|
No
|
|
35
|
|
|
32
|
|
|
29
|
|
|
No
|
|||
New England Teamsters & Trucking Industry Pension Fund
|
04-6372430-001
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
110
|
|
|
108
|
|
|
102
|
|
|
No
|
|||
New York State Teamsters Conference Pension and Retirement Fund
|
16-6063585-074
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
86
|
|
|
81
|
|
|
72
|
|
|
No
|
|||
Teamster Pension Fund of Philadelphia and Vicinity
|
23-1511735-001
|
|
Yellow
|
|
Yellow
|
|
Yes/Implemented
|
|
53
|
|
|
50
|
|
|
46
|
|
|
No
|
|||
Teamsters Joint Council No. 83 of Virginia Pension Fund
|
54-6097996-001
|
|
Yellow
|
|
Yellow
|
|
Yes/Implemented
|
|
57
|
|
|
52
|
|
|
49
|
|
|
No
|
|||
Teamsters Local 639—Employers Pension Trust
|
53-0237142-001
|
|
Green
|
|
Green
|
|
No
|
|
48
|
|
|
45
|
|
|
41
|
|
|
No
|
|||
Teamsters Negotiated Pension Plan
|
43-6196083-001
|
|
Green
|
|
Yellow
|
|
No
|
|
30
|
|
|
27
|
|
|
26
|
|
|
No
|
|||
Truck Drivers and Helpers Local Union No. 355 Retirement Pension Plan
|
52-6043608-001
|
|
Yellow
|
|
Yellow
|
|
Yes/Implemented
|
|
17
|
|
|
16
|
|
|
14
|
|
|
No
|
|||
United Parcel Service, Inc.—Local 177, I.B.T. Multiemployer Retirement Plan
|
13-1426500-419
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
83
|
|
|
85
|
|
|
68
|
|
|
No
|
|||
Western Conference of Teamsters Pension Plan
|
91-6145047-001
|
|
Green
|
|
Green
|
|
No
|
|
646
|
|
|
604
|
|
|
553
|
|
|
No
|
|||
Western Pennsylvania Teamsters and Employers Pension Fund
|
25-6029946-001
|
|
Red
|
|
Red
|
|
Yes/Implemented
|
|
26
|
|
|
24
|
|
|
23
|
|
|
No
|
|||
All Other Multiemployer Pension Plans
|
|
|
|
|
|
|
|
|
42
|
|
|
53
|
|
|
45
|
|
|
|
|||
|
|
|
|
|
|
|
Total Contributions
|
|
$
|
1,623
|
|
|
$
|
1,517
|
|
|
$
|
1,396
|
|
|
|
|
(in millions)
UPS Contributions and Accruals
|
||||||||||
Health and Welfare Fund
|
2015
|
|
2014
|
|
2013
|
||||||
Central States, South East & South West Areas Health and Welfare Fund
|
$
|
2,081
|
|
|
$
|
1,306
|
|
|
$
|
505
|
|
Teamsters Western Region & Local 177 Health Care Plan
|
515
|
|
|
239
|
|
|
—
|
|
|||
Health & Welfare Insurance Fund Teamsters Local 653
|
6
|
|
|
5
|
|
|
—
|
|
|||
Bay Area Delivery Drivers
|
34
|
|
|
32
|
|
|
29
|
|
|||
Central Pennsylvania Teamsters Health & Pension Fund
|
23
|
|
|
21
|
|
|
20
|
|
|||
Delta Health Systems—East Bay Drayage Drivers
|
27
|
|
|
24
|
|
|
24
|
|
|||
Employer—Teamster Local Nos. 175 & 505
|
10
|
|
|
9
|
|
|
9
|
|
|||
Joint Council #83 Health & Welfare Fund
|
28
|
|
|
26
|
|
|
24
|
|
|||
Local 191 Teamsters Health Fund
|
11
|
|
|
11
|
|
|
9
|
|
|||
Local 401 Teamsters Health & Welfare Fund
|
7
|
|
|
7
|
|
|
6
|
|
|||
Local 804 Welfare Trust Fund
|
75
|
|
|
70
|
|
|
67
|
|
|||
Milwaukee Drivers Pension Trust Fund—Milwaukee Drivers Health and Welfare Trust Fund
|
34
|
|
|
32
|
|
|
31
|
|
|||
Montana Teamster Employers Trust
|
7
|
|
|
7
|
|
|
6
|
|
|||
New York State Teamsters Health & Hospital Fund
|
53
|
|
|
51
|
|
|
46
|
|
|||
North Coast Benefit Trust
|
8
|
|
|
9
|
|
|
8
|
|
|||
Northern California General Teamsters (DELTA)
|
108
|
|
|
96
|
|
|
84
|
|
|||
Northern New England Benefit Trust
|
42
|
|
|
39
|
|
|
35
|
|
|||
Oregon / Teamster Employers Trust
|
31
|
|
|
29
|
|
|
28
|
|
|||
Teamsters 170 Health & Welfare Fund
|
15
|
|
|
15
|
|
|
12
|
|
|||
Teamsters Benefit Trust
|
36
|
|
|
40
|
|
|
38
|
|
|||
Teamsters Local 251 Health & Insurance Plan
|
13
|
|
|
12
|
|
|
11
|
|
|||
Teamsters Local 404 Health & Insurance Plan
|
7
|
|
|
7
|
|
|
6
|
|
|||
Teamsters Local 638 Health Fund
|
39
|
|
|
35
|
|
|
32
|
|
|||
Teamsters Local 639—Employers Health & Pension Trust Funds
|
26
|
|
|
26
|
|
|
24
|
|
|||
Teamsters Local 671 Health Services & Insurance Plan
|
15
|
|
|
14
|
|
|
13
|
|
|||
Teamsters Union 25 Health Services & Insurance Plan
|
46
|
|
|
44
|
|
|
37
|
|
|||
Teamsters Union Local 677 Health Services & Insurance Plan
|
10
|
|
|
9
|
|
|
8
|
|
|||
Truck Drivers and Helpers Local 355 Baltimore Area Health & Welfare Fund
|
15
|
|
|
15
|
|
|
13
|
|
|||
Utah-Idaho Teamsters Security Fund
|
25
|
|
|
22
|
|
|
18
|
|
|||
Washington Teamsters Welfare Trust
|
44
|
|
|
36
|
|
|
35
|
|
|||
All Other Multiemployer Health and Welfare Plans
|
95
|
|
|
64
|
|
|
44
|
|
|||
Total Contributions
|
$
|
3,486
|
|
|
$
|
2,352
|
|
|
$
|
1,222
|
|
•
|
Partial Plan Curtailment
: We recorded a $
112
million pre-tax curtailment loss due to the elimination of future service benefit accruals. This curtailment loss represents the accelerated recognition of unamortized prior service costs.
|
•
|
Remeasurement of Postretirement Obligation
: We recorded a $
746
million pre-tax loss due to the remeasurement of the postretirement benefit obligations of the affected UPS-sponsored health and welfare benefit plans.
|
•
|
Settlement
: We recorded a $
208
million pre-tax settlement loss, which represents the recognition of unamortized actuarial losses associated with the postretirement obligation for the NMA Group.
|
|
U.S. Domestic
Package
|
|
International
Package
|
|
Supply Chain &
Freight
|
|
Consolidated
|
||||||||
Balance on January 1, 2014
|
$
|
6
|
|
|
$
|
420
|
|
|
$
|
1,764
|
|
|
$
|
2,190
|
|
Acquired
|
—
|
|
|
52
|
|
|
13
|
|
|
65
|
|
||||
Currency / Other
|
—
|
|
|
(23
|
)
|
|
(48
|
)
|
|
(71
|
)
|
||||
Balance on December 31, 2014
|
$
|
6
|
|
|
$
|
449
|
|
|
$
|
1,729
|
|
|
$
|
2,184
|
|
Acquired
|
709
|
|
|
—
|
|
|
585
|
|
|
1,294
|
|
||||
Currency / Other
|
—
|
|
|
(24
|
)
|
|
(35
|
)
|
|
(59
|
)
|
||||
Balance on December 31, 2015
|
$
|
715
|
|
|
$
|
425
|
|
|
$
|
2,279
|
|
|
$
|
3,419
|
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
|
Weighted-
Average
Amortization
Period
(in years)
|
||||||
December 31, 2015
|
|
|
|
|
|
|
|
||||||
Capitalized software
|
$
|
2,739
|
|
|
$
|
(2,026
|
)
|
|
$
|
713
|
|
|
5.0
|
Licenses
|
189
|
|
|
(116
|
)
|
|
73
|
|
|
6.1
|
|||
Franchise rights
|
125
|
|
|
(83
|
)
|
|
42
|
|
|
20.0
|
|||
Customer relationships
|
511
|
|
|
(35
|
)
|
|
476
|
|
|
10.3
|
|||
Trade name
|
200
|
|
|
—
|
|
|
200
|
|
|
NA
|
|||
Trademarks, patents, and other
|
61
|
|
|
(16
|
)
|
|
45
|
|
|
7.8
|
|||
Total Intangible Assets, Net
|
$
|
3,825
|
|
|
$
|
(2,276
|
)
|
|
$
|
1,549
|
|
|
5.1
|
December 31, 2014
|
|
|
|
|
|
|
|
||||||
Capitalized software
|
$
|
2,641
|
|
|
$
|
(1,997
|
)
|
|
$
|
644
|
|
|
|
Licenses
|
217
|
|
|
(133
|
)
|
|
84
|
|
|
|
|||
Franchise rights
|
117
|
|
|
(77
|
)
|
|
40
|
|
|
|
|||
Customer relationships
|
123
|
|
|
(66
|
)
|
|
57
|
|
|
|
|||
Trademarks, patents, and other
|
31
|
|
|
(9
|
)
|
|
22
|
|
|
|
|||
Total Intangible Assets, Net
|
$
|
3,129
|
|
|
$
|
(2,282
|
)
|
|
$
|
847
|
|
|
|
Coyote Assets Acquired and (Liabilities) Assumed
|
|
||
Cash and cash equivalents
|
$
|
18
|
|
Accounts receivable
|
249
|
|
|
Other current assets
|
1
|
|
|
Property, plant, and equipment
|
17
|
|
|
Goodwill
|
1,233
|
|
|
Intangible assets
|
664
|
|
|
Other non-current assets
|
2
|
|
|
Accounts payable and other current liabilities
|
(132
|
)
|
|
Other non-current liabilities
|
(11
|
)
|
|
Deferred tax liability
|
(212
|
)
|
|
Total purchase price
|
$
|
1,829
|
|
|
Principal
|
|
|
|
Carrying Value
|
||||||||
|
Amount
|
|
Maturity
|
|
2015
|
|
2014
|
||||||
Commercial paper
|
$
|
2,965
|
|
|
2016
|
|
$
|
2,965
|
|
|
$
|
772
|
|
Fixed-rate senior notes:
|
|
|
|
|
|
|
|
||||||
1.125% senior notes
|
375
|
|
|
2017
|
|
372
|
|
|
369
|
|
|||
5.50% senior notes
|
750
|
|
|
2018
|
|
787
|
|
|
802
|
|
|||
5.125% senior notes
|
1,000
|
|
|
2019
|
|
1,064
|
|
|
1,076
|
|
|||
3.125% senior notes
|
1,500
|
|
|
2021
|
|
1,613
|
|
|
1,616
|
|
|||
2.45% senior notes
|
1,000
|
|
|
2022
|
|
991
|
|
|
976
|
|
|||
6.20% senior notes
|
1,500
|
|
|
2038
|
|
1,481
|
|
|
1,481
|
|
|||
4.875% senior notes
|
500
|
|
|
2040
|
|
489
|
|
|
489
|
|
|||
3.625% senior notes
|
375
|
|
|
2042
|
|
367
|
|
|
367
|
|
|||
8.375% Debentures:
|
|
|
|
|
|
|
|
||||||
8.375% debentures
|
424
|
|
|
2020
|
|
474
|
|
|
480
|
|
|||
8.375% debentures
|
276
|
|
|
2030
|
|
282
|
|
|
282
|
|
|||
Pound Sterling Notes:
|
|
|
|
|
|
|
|
||||||
5.50% notes
|
98
|
|
|
2031
|
|
92
|
|
|
97
|
|
|||
5.125% notes
|
670
|
|
|
2050
|
|
638
|
|
|
673
|
|
|||
Euro Senior Notes:
|
|
|
|
|
|
|
|
||||||
1.625% notes
|
765
|
|
|
2025
|
|
759
|
|
|
—
|
|
|||
Floating rate senior notes
|
547
|
|
|
2020
|
|
544
|
|
|
—
|
|
|||
Floating rate senior notes
|
606
|
|
|
2049 – 2065
|
|
600
|
|
|
458
|
|
|||
Capital lease obligations
|
475
|
|
|
2016 – 3005
|
|
475
|
|
|
505
|
|
|||
Facility notes and bonds
|
320
|
|
|
2016 – 2045
|
|
319
|
|
|
320
|
|
|||
Other debt
|
21
|
|
|
2016 – 2022
|
|
22
|
|
|
16
|
|
|||
Total debt
|
$
|
14,167
|
|
|
|
|
14,334
|
|
|
10,779
|
|
||
Less: current maturities
|
|
|
|
|
(3,018
|
)
|
|
(923
|
)
|
||||
Long-term debt
|
|
|
|
|
$
|
11,316
|
|
|
$
|
9,856
|
|
|
Principal
|
|
|
|
Average Effective Interest Rate
|
||||||
|
Value
|
|
Maturity
|
|
2015
|
|
2014
|
||||
3.875% senior notes
|
$
|
1,000
|
|
|
2014
|
|
—
|
%
|
|
0.94
|
%
|
1.125% senior notes
|
$
|
375
|
|
|
2017
|
|
0.68
|
%
|
|
0.60
|
%
|
5.50% senior notes
|
$
|
750
|
|
|
2018
|
|
2.54
|
%
|
|
2.49
|
%
|
5.125% senior notes
|
$
|
1,000
|
|
|
2019
|
|
2.06
|
%
|
|
1.97
|
%
|
3.125% senior notes
|
$
|
1,500
|
|
|
2021
|
|
1.04
|
%
|
|
1.06
|
%
|
2.45% senior notes
|
$
|
1,000
|
|
|
2022
|
|
0.87
|
%
|
|
0.82
|
%
|
•
|
$
276
million of the debentures have a maturity of
April 1, 2030
. These debentures have an
8.375%
interest rate until
April 1, 2020
, and, thereafter, the interest rate will be
7.62%
for the final
10
years. These debentures are redeemable in whole or in part at our option at any time. The redemption price is equal to the greater of
100%
of the principal amount and accrued interest, or the sum of the present values of the remaining scheduled payout of principal and interest thereon discounted to the date of redemption (at a benchmark treasury yield plus five basis points) plus accrued interest.
|
•
|
$
424
million of the debentures have a maturity of
April 1, 2020
. These debentures are not subject to redemption prior to maturity.
|
|
2015
|
|
2014
|
||||
Vehicles
|
$
|
74
|
|
|
$
|
86
|
|
Aircraft
|
2,289
|
|
|
2,289
|
|
||
Buildings
|
207
|
|
|
197
|
|
||
Accumulated amortization
|
(849
|
)
|
|
(781
|
)
|
||
Property, plant and equipment subject to capital leases
|
$
|
1,721
|
|
|
$
|
1,791
|
|
•
|
Bonds with a principal balance of $
149
million issued by the Louisville Regional Airport Authority associated with our Worldport facility in Louisville, Kentucky. The bonds, which are due in
January 2029
, bear interest at a variable rate, and the average interest rates for
2015
and
2014
were
0.03%
and
0.05%
, respectively.
|
•
|
Bonds with a principal balance of $
42
million and due in
November 2036
issued by the Louisville Regional Airport Authority associated with our air freight facility in Louisville, Kentucky. The bonds bear interest at a variable rate, and the average interest rates for
2015
and
2014
were
0.02%
and
0.05%
, respectively.
|
•
|
Bonds with a principal balance of $
29
million issued by the Dallas / Fort Worth International Airport Facility Improvement Corporation associated with our Dallas, Texas airport facilities. The bonds are due in
May 2032
and bear interest at a variable rate, however the variable cash flows on the obligation have been swapped to a fixed
5.11%
.
|
•
|
Bonds with a principal balance of $
100
million issued by the Delaware County, Pennsylvania Industrial Development Authority associated with our Philadelphia, Pennsylvania airport facilities. The bonds, which were due in
December 2015
, had a variable interest rate, and the average interest rates for
2015
and
2014
were
0.02%
and
0.04%
, respectively. As of December 2015, these
$100
million bonds were repaid in full.
|
•
|
In
September 2015
, we entered into an agreement with the Delaware County, Pennsylvania Industrial Development Authority, associated with our Philadelphia, Pennsylvania airport facilities, for bonds issued with a principal balance of
$100
million. These bonds, which are due September 2045, bear interest at a variable rate. The average interest rate for 2015 was
0.00%
.
|
•
|
Notes with a principal amount of
£66
million accrue interest at a
5.50%
fixed rate, and are due in
February 2031
. These notes are not callable.
|
•
|
Notes with a principal amount of £
455
million accrue interest at a
5.125%
fixed rate, and are due in
February 2050
.
These notes are callable at our option at a redemption price equal to the greater of 100% of the principal amount and accrued interest, or the sum of the present values of the remaining scheduled payout of principal and interest thereon discounted to the date of redemption at a benchmark U.K. government bond yield plus 15 basis points and accrued interest.
|
•
|
Notes with a principal amount of
€500
million accrue interest at a variable rate equal to three-month EURIBOR plus 43 basis points and are due in July 2020. Interest is payable quarterly on the notes, commencing April 15, 2016. These notes are not callable.
|
•
|
Notes with a principal amount of
€700
million accrue interest at a
1.625%
fixed rate and are due in November 2025. Interest is payable annually on the notes, commencing November 15, 2016. These notes are callable at our option at a redemption price equal to the greater of 100% of the principal amount, or the sum of the present values of the remaining scheduled payout of principal and interest thereon discounted to the date of redemption at a benchmark German government bond yield plus 20 basis points and accrued interest.
|
Year
|
Capital
Leases
|
|
Operating
Leases
|
|
Debt
Principal
|
|
Purchase
Commitments
|
||||||||
2016
|
$
|
72
|
|
|
$
|
324
|
|
|
$
|
2,978
|
|
|
$
|
257
|
|
2017
|
73
|
|
|
263
|
|
|
377
|
|
|
119
|
|
||||
2018
|
61
|
|
|
197
|
|
|
751
|
|
|
53
|
|
||||
2019
|
59
|
|
|
125
|
|
|
1,000
|
|
|
24
|
|
||||
2020
|
53
|
|
|
84
|
|
|
547
|
|
|
15
|
|
||||
After 2020
|
392
|
|
|
266
|
|
|
8,039
|
|
|
11
|
|
||||
Total
|
710
|
|
|
$
|
1,259
|
|
|
$
|
13,692
|
|
|
$
|
479
|
|
|
Less: imputed interest
|
(235
|
)
|
|
|
|
|
|
|
|||||||
Present value of minimum capitalized lease payments
|
475
|
|
|
|
|
|
|
|
|||||||
Less: current portion
|
(46
|
)
|
|
|
|
|
|
|
|||||||
Long-term capitalized lease obligations
|
$
|
429
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|||||||||
Class A Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
201
|
|
|
$
|
2
|
|
|
212
|
|
|
$
|
2
|
|
|
225
|
|
|
$
|
3
|
|
Common stock purchases
|
(4
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(8
|
)
|
|
(1
|
)
|
|||
Stock award plans
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|||
Common stock issuances
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|||
Conversions of class A to class B common stock
|
(11
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|||
Class A shares issued at end of year
|
194
|
|
|
$
|
2
|
|
|
201
|
|
|
$
|
2
|
|
|
212
|
|
|
$
|
2
|
|
Class B Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
705
|
|
|
$
|
7
|
|
|
712
|
|
|
$
|
7
|
|
|
729
|
|
|
$
|
7
|
|
Common stock purchases
|
(23
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|||
Conversions of class A to class B common stock
|
11
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|||
Class B shares issued at end of year
|
693
|
|
|
$
|
7
|
|
|
705
|
|
|
$
|
7
|
|
|
712
|
|
|
$
|
7
|
|
Additional Paid-In Capital:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|||
Stock award plans
|
|
|
492
|
|
|
|
|
656
|
|
|
|
|
554
|
|
||||||
Common stock purchases
|
|
|
(791
|
)
|
|
|
|
(918
|
)
|
|
|
|
(768
|
)
|
||||||
Common stock issuances
|
|
|
316
|
|
|
|
|
309
|
|
|
|
|
307
|
|
||||||
Option premiums received (paid)
|
|
|
(17
|
)
|
|
|
|
(47
|
)
|
|
|
|
(93
|
)
|
||||||
Balance at end of year
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|||
Retained Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
$
|
5,726
|
|
|
|
|
$
|
6,925
|
|
|
|
|
$
|
7,997
|
|
|||
Net income attributable to controlling interests
|
|
|
4,844
|
|
|
|
|
3,032
|
|
|
|
|
4,372
|
|
||||||
Dividends ($2.92, $2.68 and $2.48 per share)
|
|
|
(2,649
|
)
|
|
|
|
(2,487
|
)
|
|
|
|
(2,367
|
)
|
||||||
Common stock purchases
|
|
|
(1,920
|
)
|
|
|
|
(1,744
|
)
|
|
|
|
(3,077
|
)
|
||||||
Balance at end of year
|
|
|
$
|
6,001
|
|
|
|
|
$
|
5,726
|
|
|
|
|
$
|
6,925
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Foreign Currency Translation Gain (Loss):
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
(457
|
)
|
|
$
|
(126
|
)
|
|
$
|
134
|
|
Reclassification to earnings (no tax impact in any period)
|
—
|
|
|
—
|
|
|
(161
|
)
|
|||
Translation adjustment (net of tax effect of $0, $105, and $(5))
|
(440
|
)
|
|
(331
|
)
|
|
(99
|
)
|
|||
Balance at end of year
|
(897
|
)
|
|
(457
|
)
|
|
(126
|
)
|
|||
Unrealized Gain (Loss) on Marketable Securities, Net of Tax:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
—
|
|
|
(1
|
)
|
|
6
|
|
|||
Current period changes in fair value (net of tax effect of $(1), $1, and $(3))
|
(1
|
)
|
|
2
|
|
|
(4
|
)
|
|||
Reclassification to earnings (net of tax effect of $0, $0, and $(2))
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|||
Balance at end of year
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
61
|
|
|
(219
|
)
|
|
(286
|
)
|
|||
Current period changes in fair value (net of tax effect of $103, $133, and $1)
|
171
|
|
|
220
|
|
|
1
|
|
|||
Reclassification to earnings (net of tax effect of $(99), $35, and $39)
|
(165
|
)
|
|
60
|
|
|
66
|
|
|||
Balance at end of year
|
67
|
|
|
61
|
|
|
(219
|
)
|
|||
Unrecognized Pension and Postretirement Benefit Costs, Net of Tax:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(3,198
|
)
|
|
(114
|
)
|
|
(3,208
|
)
|
|||
Reclassification to earnings (net of tax effect of $97, $870, and $67)
|
195
|
|
|
1,462
|
|
|
111
|
|
|||
Net actuarial gain (loss) and prior service cost resulting from remeasurements of plan assets and liabilities (net of tax effect of $197, $(2,714), and $1,786)
|
294
|
|
|
(4,546
|
)
|
|
2,983
|
|
|||
Balance at end of year
|
(2,709
|
)
|
|
(3,198
|
)
|
|
(114
|
)
|
|||
Accumulated other comprehensive income (loss) at end of year
|
$
|
(3,540
|
)
|
|
$
|
(3,594
|
)
|
|
$
|
(460
|
)
|
|
2015 Amount Reclassified from AOCI
|
|
2014 Amount Reclassified from AOCI
|
|
2013 Amount Reclassified from AOCI
|
|
Affected Line Item in the Income Statement
|
||||||
Foreign Currency Translation Gain (Loss):
|
|
|
|
|
|
|
|
||||||
Liquidation of foreign subsidiary
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
161
|
|
|
Other expenses
|
Impact on net income
|
—
|
|
|
—
|
|
|
161
|
|
|
Net income
|
|||
Unrealized Gain (Loss) on Marketable Securities:
|
|
|
|
|
|
|
|
||||||
Realized gain (loss) on sale of securities
|
—
|
|
|
1
|
|
|
5
|
|
|
Investment income
|
|||
Income tax (expense) benefit
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
Income tax expense
|
|||
Impact on net income
|
—
|
|
|
1
|
|
|
3
|
|
|
Net income
|
|||
Unrealized Gain (Loss) on Cash Flow Hedges:
|
|
|
|
|
|
|
|
||||||
Interest rate contracts
|
(24
|
)
|
|
(23
|
)
|
|
(22
|
)
|
|
Interest expense
|
|||
Foreign exchange contracts
|
(25
|
)
|
|
(48
|
)
|
|
18
|
|
|
Interest expense
|
|||
Foreign exchange contracts
|
313
|
|
|
(24
|
)
|
|
(53
|
)
|
|
Revenue
|
|||
Commodity contracts
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
Fuel expense
|
|||
Income tax (expense) benefit
|
(99
|
)
|
|
35
|
|
|
39
|
|
|
Income tax expense
|
|||
Impact on net income
|
165
|
|
|
(60
|
)
|
|
(66
|
)
|
|
Net income
|
|||
Unrecognized Pension and Postretirement Benefit Costs:
|
|
|
|
|
|
|
|
||||||
Prior service costs
|
(174
|
)
|
|
(170
|
)
|
|
(178
|
)
|
|
Compensation and benefits
|
|||
Curtailment and settlement loss
|
—
|
|
|
(356
|
)
|
|
—
|
|
|
Compensation and benefits
|
|||
Remeasurement of benefit obligation
|
(118
|
)
|
|
(1,806
|
)
|
|
—
|
|
|
Compensation and benefits
|
|||
Income tax (expense) benefit
|
97
|
|
|
870
|
|
|
67
|
|
|
Income tax expense
|
|||
Impact on net income
|
(195
|
)
|
|
(1,462
|
)
|
|
(111
|
)
|
|
Net income
|
|||
|
|
|
|
|
|
|
|
||||||
Total amount reclassified for the period
|
$
|
(30
|
)
|
|
$
|
(1,521
|
)
|
|
$
|
(13
|
)
|
|
Net income
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|||||||||
Deferred Compensation Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
$
|
59
|
|
|
|
|
$
|
69
|
|
|
|
|
$
|
78
|
|
|||
Reinvested dividends
|
|
|
3
|
|
|
|
|
2
|
|
|
|
|
4
|
|
||||||
Options exercise deferrals
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Benefit payments
|
|
|
(11
|
)
|
|
|
|
(12
|
)
|
|
|
|
(13
|
)
|
||||||
Balance at end of year
|
|
|
$
|
51
|
|
|
|
|
$
|
59
|
|
|
|
|
$
|
69
|
|
|||
Treasury Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
(1
|
)
|
|
$
|
(59
|
)
|
|
(1
|
)
|
|
$
|
(69
|
)
|
|
(1
|
)
|
|
$
|
(78
|
)
|
Reinvested dividends
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Options exercise deferrals
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Benefit payments
|
—
|
|
|
11
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
13
|
|
|||
Balance at end of year
|
(1
|
)
|
|
$
|
(51
|
)
|
|
(1
|
)
|
|
$
|
(59
|
)
|
|
(1
|
)
|
|
$
|
(69
|
)
|
|
Shares
(in thousands)
|
|
Weighted Average
Grant Date
Fair Value
|
|
Weighted Average Remaining
Contractual Term
(in years)
|
|
Aggregate Intrinsic
Value (in millions)
|
|||||
Nonvested at January 1, 2015
|
11,559
|
|
|
$
|
82.58
|
|
|
|
|
|
||
Vested
|
(5,867
|
)
|
|
80.27
|
|
|
|
|
|
|||
Granted
|
5,118
|
|
|
100.63
|
|
|
|
|
|
|||
Reinvested Dividends
|
359
|
|
|
N/A
|
|
|
|
|
|
|||
Forfeited / Expired
|
(157
|
)
|
|
90.23
|
|
|
|
|
|
|||
Nonvested at December 31, 2015
|
11,012
|
|
|
$
|
90.71
|
|
|
1.37
|
|
$
|
1,060
|
|
Restricted Units Expected to Vest
|
10,783
|
|
|
$
|
90.77
|
|
|
1.36
|
|
$
|
1,038
|
|
|
Shares
(in thousands)
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Weighted Average Remaining
Contractual Term
(in years)
|
|
Aggregate Intrinsic
Value (in millions)
|
|||||
Nonvested at January 1, 2015
|
815
|
|
|
$
|
96.98
|
|
|
|
|
|
||
Vested
|
(57
|
)
|
|
96.90
|
|
|
|
|
|
|||
Granted
|
912
|
|
|
96.64
|
|
|
|
|
|
|||
Reinvested Dividends
|
43
|
|
|
N/A
|
|
|
|
|
|
|||
Forfeited / Expired
|
(98
|
)
|
|
96.81
|
|
|
|
|
|
|||
Nonvested at December 31, 2015
|
1,615
|
|
|
$
|
96.80
|
|
|
1.62
|
|
$
|
155
|
|
Performance Units Expected to Vest
|
1,547
|
|
|
$
|
96.80
|
|
|
1.62
|
|
$
|
149
|
|
|
Shares
(in thousands)
|
|
Weighted Average
Exercise
Price
|
|
Weighted Average Remaining
Contractual Term
(in years)
|
|
Aggregate Intrinsic
Value (in millions)
|
|||||
Outstanding at January 1, 2015
|
3,691
|
|
|
$
|
75.07
|
|
|
|
|
|
||
Exercised
|
(1,060
|
)
|
|
73.25
|
|
|
|
|
|
|||
Granted
|
160
|
|
|
101.93
|
|
|
|
|
|
|||
Forfeited / Expired
|
(20
|
)
|
|
72.47
|
|
|
|
|
|
|||
Outstanding at December 31, 2015
|
2,771
|
|
|
$
|
77.33
|
|
|
2.94
|
|
$
|
53
|
|
Options Vested and Expected to Vest
|
2,771
|
|
|
$
|
77.33
|
|
|
2.94
|
|
$
|
53
|
|
Exercisable at December 31, 2015
|
2,451
|
|
|
$
|
75.31
|
|
|
2.27
|
|
$
|
51
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Expected dividend yield
|
2.63
|
%
|
|
2.56
|
%
|
|
2.75
|
%
|
|||
Risk-free interest rate
|
2.07
|
%
|
|
2.40
|
%
|
|
1.38
|
%
|
|||
Expected life in years
|
7.5
|
|
|
7.5
|
|
|
7.5
|
|
|||
Expected volatility
|
20.61
|
%
|
|
24.26
|
%
|
|
24.85
|
%
|
|||
Weighted average fair value of options granted
|
$
|
18.07
|
|
|
$
|
20.48
|
|
|
$
|
15.50
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Exercise Price Range
|
Shares
(in thousands)
|
|
Average Life
(in years)
|
|
Average
Exercise
Price
|
|
Shares
(in thousands)
|
|
Average
Exercise
Price
|
||||||
$55.01 - $70.00
|
218
|
|
|
3.94
|
|
$
|
62.48
|
|
|
218
|
|
|
$
|
62.48
|
|
$70.01 - $80.00
|
1,320
|
|
|
2.53
|
|
72.14
|
|
|
1,266
|
|
|
71.96
|
|
||
$80.01 - $90.00
|
947
|
|
|
1.52
|
|
81.23
|
|
|
884
|
|
|
81.11
|
|
||
$90.01 - $105.00
|
286
|
|
|
8.74
|
|
99.75
|
|
|
83
|
|
|
98.36
|
|
||
|
2,771
|
|
|
2.94
|
|
$
|
77.33
|
|
|
2,451
|
|
|
$
|
75.31
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
||||||
U.S. Domestic Package
|
$
|
36,747
|
|
|
$
|
35,851
|
|
|
$
|
34,074
|
|
International Package
|
12,149
|
|
|
12,988
|
|
|
12,429
|
|
|||
Supply Chain & Freight
|
9,467
|
|
|
9,393
|
|
|
8,935
|
|
|||
Consolidated
|
$
|
58,363
|
|
|
$
|
58,232
|
|
|
$
|
55,438
|
|
Operating Profit:
|
|
|
|
|
|
||||||
U.S. Domestic Package
|
$
|
4,767
|
|
|
$
|
2,859
|
|
|
$
|
4,603
|
|
International Package
|
2,137
|
|
|
1,677
|
|
|
1,757
|
|
|||
Supply Chain & Freight
|
764
|
|
|
432
|
|
|
674
|
|
|||
Consolidated
|
$
|
7,668
|
|
|
$
|
4,968
|
|
|
$
|
7,034
|
|
Assets:
|
|
|
|
|
|
||||||
U.S. Domestic Package
|
$
|
21,701
|
|
|
$
|
20,708
|
|
|
$
|
19,052
|
|
International Package
|
7,858
|
|
|
7,850
|
|
|
8,460
|
|
|||
Supply Chain & Freight
|
7,728
|
|
|
6,004
|
|
|
6,564
|
|
|||
Unallocated
|
1,024
|
|
|
878
|
|
|
1,477
|
|
|||
Consolidated
|
$
|
38,311
|
|
|
$
|
35,440
|
|
|
$
|
35,553
|
|
Depreciation and Amortization Expense:
|
|
|
|
|
|
||||||
U.S. Domestic Package
|
$
|
1,408
|
|
|
$
|
1,276
|
|
|
$
|
1,229
|
|
International Package
|
475
|
|
|
478
|
|
|
473
|
|
|||
Supply Chain & Freight
|
201
|
|
|
169
|
|
|
165
|
|
|||
Consolidated
|
$
|
2,084
|
|
|
$
|
1,923
|
|
|
$
|
1,867
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
U.S. Domestic Package:
|
|
|
|
|
|
||||||
Next Day Air
|
$
|
6,570
|
|
|
$
|
6,581
|
|
|
$
|
6,443
|
|
Deferred
|
3,903
|
|
|
3,672
|
|
|
3,437
|
|
|||
Ground
|
26,274
|
|
|
25,598
|
|
|
24,194
|
|
|||
Total U.S. Domestic Package
|
36,747
|
|
|
35,851
|
|
|
34,074
|
|
|||
International Package:
|
|
|
|
|
|
||||||
Domestic
|
2,425
|
|
|
2,784
|
|
|
2,667
|
|
|||
Export
|
9,092
|
|
|
9,586
|
|
|
9,166
|
|
|||
Cargo
|
632
|
|
|
618
|
|
|
596
|
|
|||
Total International Package
|
12,149
|
|
|
12,988
|
|
|
12,429
|
|
|||
Supply Chain & Freight:
|
|
|
|
|
|
||||||
Forwarding and Logistics
|
5,900
|
|
|
5,758
|
|
|
5,492
|
|
|||
Freight
|
2,881
|
|
|
3,048
|
|
|
2,882
|
|
|||
Other
|
686
|
|
|
587
|
|
|
561
|
|
|||
Total Supply Chain & Freight
|
9,467
|
|
|
9,393
|
|
|
8,935
|
|
|||
Consolidated
|
$
|
58,363
|
|
|
$
|
58,232
|
|
|
$
|
55,438
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
United States:
|
|
|
|
|
|
||||||
Revenue
|
$
|
45,309
|
|
|
$
|
43,840
|
|
|
$
|
41,772
|
|
Long-lived assets
|
$
|
18,196
|
|
|
$
|
15,902
|
|
|
$
|
15,651
|
|
International:
|
|
|
|
|
|
||||||
Revenue
|
$
|
13,054
|
|
|
$
|
14,392
|
|
|
$
|
13,666
|
|
Long-lived assets
|
$
|
5,828
|
|
|
$
|
6,105
|
|
|
$
|
6,297
|
|
Consolidated:
|
|
|
|
|
|
||||||
Revenue
|
$
|
58,363
|
|
|
$
|
58,232
|
|
|
$
|
55,438
|
|
Long-lived assets
|
$
|
24,024
|
|
|
$
|
22,007
|
|
|
$
|
21,948
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
1,634
|
|
|
$
|
932
|
|
|
$
|
2,181
|
|
U.S. State and Local
|
88
|
|
|
103
|
|
|
205
|
|
|||
Non-U.S.
|
236
|
|
|
185
|
|
|
162
|
|
|||
Total Current
|
1,958
|
|
|
1,220
|
|
|
2,548
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
U.S. Federal
|
469
|
|
|
427
|
|
|
(242
|
)
|
|||
U.S. State and Local
|
65
|
|
|
(11
|
)
|
|
(22
|
)
|
|||
Non-U.S.
|
6
|
|
|
(31
|
)
|
|
18
|
|
|||
Total Deferred
|
540
|
|
|
385
|
|
|
(246
|
)
|
|||
Total Income Tax Expense
|
$
|
2,498
|
|
|
$
|
1,605
|
|
|
$
|
2,302
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
6,348
|
|
|
$
|
3,819
|
|
|
$
|
6,040
|
|
Non-U.S.
|
994
|
|
|
818
|
|
|
634
|
|
|||
Total Income Before Income Taxes:
|
$
|
7,342
|
|
|
$
|
4,637
|
|
|
$
|
6,674
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Statutory U.S. federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
U.S. state and local income taxes (net of federal benefit)
|
1.7
|
|
|
1.2
|
|
|
2.1
|
|
Non-U.S. tax rate differential
|
(1.2
|
)
|
|
(2.4
|
)
|
|
(1.3
|
)
|
Nondeductible/nontaxable items
|
0.2
|
|
|
1.3
|
|
|
(0.2
|
)
|
U.S. federal tax credits
|
(1.3
|
)
|
|
(1.5
|
)
|
|
(1.2
|
)
|
Other
|
(0.4
|
)
|
|
1.0
|
|
|
0.1
|
|
Effective income tax rate
|
34.0
|
%
|
|
34.6
|
%
|
|
34.5
|
%
|
|
2015
|
|
2014
|
||||
Fixed assets and capitalized software
|
$
|
(4,776
|
)
|
|
$
|
(4,816
|
)
|
Other
|
(699
|
)
|
|
(424
|
)
|
||
Deferred tax liabilities
|
(5,475
|
)
|
|
(5,240
|
)
|
||
|
|
|
|
||||
Pension and postretirement benefits
|
3,915
|
|
|
4,722
|
|
||
Loss and credit carryforwards
|
261
|
|
|
250
|
|
||
Insurance reserves
|
730
|
|
|
745
|
|
||
Stock compensation
|
256
|
|
|
242
|
|
||
Other
|
650
|
|
|
630
|
|
||
Deferred tax assets
|
5,812
|
|
|
6,589
|
|
||
Deferred tax assets valuation allowance
|
(197
|
)
|
|
(208
|
)
|
||
Deferred tax asset (net of valuation allowance)
|
5,615
|
|
|
6,381
|
|
||
|
|
|
|
||||
Net deferred tax asset
|
$
|
140
|
|
|
$
|
1,141
|
|
|
|
|
|
||||
Amounts recognized in the consolidated balance sheets:
|
|
|
|
||||
Non-current deferred tax assets
|
$
|
255
|
|
|
$
|
1,219
|
|
Non-current deferred tax liabilities
|
(115
|
)
|
|
(78
|
)
|
||
Net deferred tax asset
|
$
|
140
|
|
|
$
|
1,141
|
|
|
2015
|
|
2014
|
||||
U.S. state and local operating loss carryforwards
|
$
|
894
|
|
|
$
|
815
|
|
U.S. state and local credit carryforwards
|
$
|
53
|
|
|
$
|
52
|
|
|
Tax
|
|
Interest
|
|
Penalties
|
||||||
Balance at January 1, 2013
|
$
|
232
|
|
|
$
|
53
|
|
|
$
|
4
|
|
Additions for tax positions of the current year
|
15
|
|
|
—
|
|
|
—
|
|
|||
Additions for tax positions of prior years
|
20
|
|
|
9
|
|
|
2
|
|
|||
Reductions for tax positions of prior years for:
|
|
|
|
|
|
||||||
Changes based on facts and circumstances
|
(67
|
)
|
|
(23
|
)
|
|
(1
|
)
|
|||
Settlements during the period
|
(8
|
)
|
|
1
|
|
|
—
|
|
|||
Lapses of applicable statute of limitations
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Balance at December 31, 2013
|
191
|
|
|
40
|
|
|
4
|
|
|||
Additions for tax positions of the current year
|
15
|
|
|
—
|
|
|
—
|
|
|||
Additions for tax positions of prior years
|
51
|
|
|
13
|
|
|
—
|
|
|||
Reductions for tax positions of prior years for:
|
|
|
|
|
|
||||||
Changes based on facts and circumstances
|
(74
|
)
|
|
(8
|
)
|
|
—
|
|
|||
Settlements during the period
|
(10
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Lapses of applicable statute of limitations
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Balance at December 31, 2014
|
172
|
|
|
42
|
|
|
3
|
|
|||
Additions for tax positions of the current year
|
24
|
|
|
—
|
|
|
—
|
|
|||
Additions for tax positions of prior years
|
45
|
|
|
21
|
|
|
3
|
|
|||
Reductions for tax positions of prior years for:
|
|
|
|
|
|
||||||
Changes based on facts and circumstances
|
(85
|
)
|
|
(8
|
)
|
|
—
|
|
|||
Settlements during the period
|
(6
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Lapses of applicable statute of limitations
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at December 31, 2015
|
$
|
148
|
|
|
$
|
53
|
|
|
$
|
6
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income attributable to common shareowners
|
$
|
4,844
|
|
|
$
|
3,032
|
|
|
$
|
4,372
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares
|
896
|
|
|
913
|
|
|
937
|
|
|||
Deferred compensation obligations
|
1
|
|
|
1
|
|
|
1
|
|
|||
Vested portion of restricted shares
|
4
|
|
|
2
|
|
|
2
|
|
|||
Denominator for basic earnings per share
|
901
|
|
|
916
|
|
|
940
|
|
|||
Effect of Dilutive Securities:
|
|
|
|
|
|
||||||
Restricted performance units
|
4
|
|
|
7
|
|
|
7
|
|
|||
Stock options
|
1
|
|
|
1
|
|
|
1
|
|
|||
Denominator for diluted earnings per share
|
906
|
|
|
924
|
|
|
948
|
|
|||
Basic Earnings Per Share
|
$
|
5.38
|
|
|
$
|
3.31
|
|
|
$
|
4.65
|
|
Diluted Earnings Per Share
|
$
|
5.35
|
|
|
$
|
3.28
|
|
|
$
|
4.61
|
|
|
|
|
2015
|
|
2014
|
||
Currency Hedges:
|
|
|
|
|
|
||
Euro
|
EUR
|
|
3,750
|
|
|
2,833
|
|
British Pound Sterling
|
GBP
|
|
1,140
|
|
|
1,149
|
|
Canadian Dollar
|
CAD
|
|
177
|
|
|
293
|
|
Indian Rupee
|
INR
|
|
—
|
|
|
85
|
|
Malaysian Ringgit
|
MYR
|
|
—
|
|
|
150
|
|
Mexican Peso
|
MXN
|
|
3,863
|
|
|
152
|
|
Japanese Yen
|
JPY
|
|
20,000
|
|
|
—
|
|
|
|
|
|
|
|
||
Interest Rate Hedges:
|
|
|
|
|
|
||
Fixed to Floating Interest Rate Swaps
|
USD
|
|
5,799
|
|
|
5,799
|
|
Floating to Fixed Interest Rate Swaps
|
USD
|
|
778
|
|
|
779
|
|
Interest Rate Basis Swaps
|
USD
|
|
—
|
|
|
1,500
|
|
|
|
|
|
|
|
||
Investment Market Price Hedges:
|
|
|
|
|
|
||
Marketable Securities
|
EUR
|
|
496
|
|
|
—
|
|
|
|
|
Gross Amounts Presented in
Consolidated Balance Sheets |
|
Net Amounts if Right of
Offset had been Applied |
||||||||||||
Asset Derivatives
|
Balance Sheet Location
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
$
|
408
|
|
|
$
|
204
|
|
|
$
|
408
|
|
|
$
|
204
|
|
Foreign exchange contracts
|
Other non-current assets
|
|
92
|
|
|
229
|
|
|
92
|
|
|
229
|
|
||||
Interest rate contracts
|
Other non-current assets
|
|
204
|
|
|
227
|
|
|
185
|
|
|
194
|
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Other current assets
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Investment market price contracts
|
Other current assets
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest rate contracts
|
Other non-current assets
|
|
57
|
|
|
59
|
|
|
53
|
|
|
57
|
|
||||
Total Asset Derivatives
|
|
|
$
|
768
|
|
|
$
|
721
|
|
|
$
|
738
|
|
|
$
|
686
|
|
Derivative Instruments in Cash Flow Hedging Relationships
|
|
Amount of Gain (Loss) Recognized in AOCI on
Derivative (Effective Portion)
|
||||||
|
2015
|
|
2014
|
|||||
Interest rate contracts
|
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
Foreign exchange contracts
|
|
275
|
|
|
358
|
|
||
Total
|
|
$
|
274
|
|
|
$
|
353
|
|
Non-derivative Instruments in Net Investment Hedging Relationships
|
|
Amount of Gain (Loss) Recognized in AOCI on
Debt (Effective Portion) |
||||||
|
2015
|
|
2014
|
|||||
Foreign denominated debt
|
|
$
|
(33
|
)
|
|
$
|
—
|
|
Total
|
|
$
|
(33
|
)
|
|
$
|
—
|
|
Derivative Instruments
in Fair Value Hedging
Relationships
|
|
Location of
Gain (Loss)
Recognized in
Income
|
|
Amount of Gain (Loss)
Recognized in Income
|
|
Hedged Items in
Fair Value Hedging
Relationships
|
|
Location of
Gain (Loss)
Recognized in
Income
|
|
Amount of Gain (Loss)
Recognized in Income
|
||||||||||||
|
|
2015
|
|
2014
|
|
|
|
2015
|
|
2014
|
||||||||||||
Interest rate contracts
|
|
Interest Expense
|
|
$
|
(7
|
)
|
|
$
|
90
|
|
|
Fixed-Rate Debt
and Capital Leases
|
|
Interest Expense
|
|
$
|
7
|
|
|
$
|
(90
|
)
|
Derivative Instruments Not Designated in
Hedging Relationships
|
|
Location of Gain
(Loss) Recognized
in Income
|
|
Amount of Gain (Loss) Recognized in Income
|
||||||
|
|
2015
|
|
2014
|
||||||
Commodity contracts
|
|
Fuel Expense
|
|
$
|
(2
|
)
|
|
$
|
(15
|
)
|
Foreign exchange contracts
|
|
Other Operating Expenses
|
|
22
|
|
|
27
|
|
||
Foreign exchange contracts
|
|
Investment Income
|
|
43
|
|
|
7
|
|
||
Investment market price contracts
|
|
Investment Income
|
|
(5
|
)
|
|
—
|
|
||
Foreign exchange contracts
|
|
Interest Expense
|
|
(14
|
)
|
|
—
|
|
||
Interest rate contracts
|
|
Interest Expense
|
|
(7
|
)
|
|
(5
|
)
|
||
Total
|
|
|
|
$
|
37
|
|
|
$
|
14
|
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
2015
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Foreign Exchange Contracts
|
|
$
|
—
|
|
|
$
|
502
|
|
|
$
|
—
|
|
|
$
|
502
|
|
Investment Market Price Contracts
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Interest Rate Contracts
|
|
—
|
|
|
261
|
|
|
—
|
|
|
261
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
768
|
|
|
$
|
—
|
|
|
$
|
768
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign Exchange Contracts
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Investment Market Price Contracts
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||
Interest Rate Contracts
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
2014
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Foreign Exchange Contracts
|
|
$
|
—
|
|
|
$
|
435
|
|
|
$
|
—
|
|
|
$
|
435
|
|
Investment Market Price Contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest Rate Contracts
|
|
—
|
|
|
286
|
|
|
—
|
|
|
286
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
721
|
|
|
$
|
—
|
|
|
$
|
721
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign Exchange Contracts
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
34
|
|
Investment Market Price Contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest Rate Contracts
|
|
—
|
|
|
43
|
|
|
—
|
|
|
43
|
|
||||
Total
|
|
$
|
—
|
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
77
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Domestic Package
|
$
|
8,814
|
|
|
$
|
8,488
|
|
|
$
|
8,808
|
|
|
$
|
8,668
|
|
|
$
|
8,860
|
|
|
$
|
8,691
|
|
|
$
|
10,265
|
|
|
$
|
10,004
|
|
International Package
|
2,970
|
|
|
3,127
|
|
|
3,045
|
|
|
3,252
|
|
|
2,959
|
|
|
3,183
|
|
|
3,175
|
|
|
3,426
|
|
||||||||
Supply Chain & Freight
|
2,193
|
|
|
2,164
|
|
|
2,242
|
|
|
2,348
|
|
|
2,418
|
|
|
2,416
|
|
|
2,614
|
|
|
2,465
|
|
||||||||
Total revenue
|
13,977
|
|
|
13,779
|
|
|
14,095
|
|
|
14,268
|
|
|
14,237
|
|
|
14,290
|
|
|
16,054
|
|
|
15,895
|
|
||||||||
Operating Profit (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Domestic Package
|
1,024
|
|
|
927
|
|
|
1,201
|
|
|
209
|
|
|
1,258
|
|
|
1,279
|
|
|
1,284
|
|
|
444
|
|
||||||||
International Package
|
498
|
|
|
438
|
|
|
552
|
|
|
444
|
|
|
507
|
|
|
460
|
|
|
580
|
|
|
335
|
|
||||||||
Supply Chain & Freight
|
151
|
|
|
148
|
|
|
207
|
|
|
94
|
|
|
219
|
|
|
215
|
|
|
187
|
|
|
(25
|
)
|
||||||||
Total operating profit
|
1,673
|
|
|
1,513
|
|
|
1,960
|
|
|
747
|
|
|
1,984
|
|
|
1,954
|
|
|
2,051
|
|
|
754
|
|
||||||||
Net Income
|
$
|
1,026
|
|
|
$
|
911
|
|
|
$
|
1,230
|
|
|
$
|
454
|
|
|
$
|
1,257
|
|
|
$
|
1,214
|
|
|
$
|
1,331
|
|
|
$
|
453
|
|
Net Income Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
1.13
|
|
|
$
|
0.99
|
|
|
$
|
1.37
|
|
|
$
|
0.49
|
|
|
$
|
1.40
|
|
|
$
|
1.33
|
|
|
$
|
1.49
|
|
|
$
|
0.50
|
|
Diluted
|
$
|
1.12
|
|
|
$
|
0.98
|
|
|
$
|
1.35
|
|
|
$
|
0.49
|
|
|
$
|
1.39
|
|
|
$
|
1.32
|
|
|
$
|
1.48
|
|
|
$
|
0.49
|
|
•
|
A mark-to-market loss of $
1.062
billion on our pension and postretirement benefit plans related to the remeasurement of plan assets and liabilities recognized outside of a 10% corridor (allocated as follows—U.S. Domestic Package $
660
million, International Package $
200
million, Supply Chain & Freight $
202
million). This loss reduced net income by $
670
million, and basic and diluted earnings per share by $
0.74
.
|
•
|
A pre-tax charge of $
36
million associated with the remeasurement and settlement of postretirement health and welfare benefit obligations for certain employees covered by collective bargaining agreements (allocated as follows—U.S. Domestic Package $
33
million, International Package $
1
million, Supply Chain & Freight $
2
million). This charge reduced net income by $
22
million, and basic and diluted earnings per share by $
0.02
.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Name and Office
|
|
Age
|
|
Principal Occupation
and Employment For
the Last Five Years
|
|
David P. Abney
Chief Executive Officer
|
|
60
|
|
|
Chief Executive Officer ( 2014 - present), Senior Vice President and Chief Operating Officer (2007 - 2014).
|
James J. Barber, Jr.
Senior Vice President and President, UPS International
|
|
55
|
|
|
Senior Vice President and President, UPS International (2013 - present), President and Chief Operating Officer, UPS Europe, Middle East, and Africa (2010 - 2013).
|
David A. Barnes
Senior Vice President, Chief Information and
Global Business Services Officer
|
|
60
|
|
|
Senior Vice President and Chief Information and Global Business Services Officer (2014 - present), Senior Vice President, Chief Information Officer (2005-2014).
|
Teresa M. Finley
Senior Vice President, Global Marketing
|
|
55
|
|
|
Senior Vice President of Global Marketing (2015 - Present), Corporate Controller and Treasurer (2010 - 2015), International CFO (2010).
|
Alan Gershenhorn
Executive Vice President and Chief Commercial Officer
|
|
57
|
|
|
Executive Vice President and Chief Commercial Officer (2014 - present), Senior Vice President, Worldwide Sales, Marketing and Strategy (2011 - 2014).
|
Myron Gray
Senior Vice President and President, United States
Operations
|
|
58
|
|
|
Senior Vice President and President, United States Operations (2014 - present), Senior Vice President, United States Operations (2009 - 2014).
|
Kate Gutmann
Senior Vice President, Worldwide Sales and Solutions
|
|
47
|
|
|
Senior Vice President, Worldwide Sales and Solutions (2014 - present), President, Worldwide Sales (2011 - 2014).
|
Teri P. McClure
Senior Vice President and Chief Legal, Communications,
and Human Resources Officer
|
|
52
|
|
|
Senior Vice President and Chief Legal, Communications, and Human Resources Officer (2015 - 2016), Senior Vice President of Legal, Compliance and Public Affairs, General Counsel and Corporate Secretary (2006 - 2014).
|
Richard N. Peretz
Senior Vice President, Chief Financial Officer and Treasurer
|
|
54
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer (2015 - present), Corporate Controller and Treasurer (2014-2015), Corporate Controller (2013 - 2015), Vice President of Corporate Finance and Accounting (2008 - 2013).
|
Mark Wallace
Senior Vice President, Global Engineering and Sustainability
|
|
53
|
|
|
Senior Vice President, Global Engineering and Sustainability (2015 - present), President, Global Logistics & Distribution (2013 - 2015), Corporate U.S. Engineering Coordinator (2012 - 2013), Corporate I.E. International Coordinator (2007 - 2012).
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
UNITED PARCEL SERVICE, INC.
|
||
(REGISTRANT)
|
||
|
|
|
By:
|
|
/
S
/ DAVID P. ABNEY
|
|
|
David P. Abney
|
|
|
Chairman and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ D
AVID
P. A
BNEY
|
|
Chairman, Chief Executive Officer and Director (Principal Executive Officer)
|
|
February 23, 2016
|
David P. Abney
|
|
|
|
|
|
|
|
|
|
/
S
/ R
ODNEY
C. A
DKINS
|
|
Director
|
|
February 22, 2016
|
Rodney C. Adkins
|
|
|
|
|
|
|
|
|
|
/
S
/ M
ICHAEL
J. B
URNS
|
|
Director
|
|
February 23, 2016
|
Michael J. Burns
|
|
|
|
|
|
|
|
|
|
/
S
/ D. S
COTT
D
AVIS
|
|
Director
|
|
February 23, 2016
|
D. Scott Davis
|
|
|
|
|
|
|
|
|
|
/
S
/ W
ILLIAM
R. J
OHNSON
|
|
Director
|
|
February 22, 2016
|
William R. Johnson
|
|
|
|
|
|
|
|
|
|
/
S
/ Dr. C
ANDACE
K
ENDLE
|
|
Director
|
|
February 22, 2016
|
Candace Kendle
|
|
|
|
|
|
|
|
|
|
/
S
/ A
NN
M. L
IVERMORE
|
|
Director
|
|
February 22, 2016
|
Ann M. Livermore
|
|
|
|
|
|
|
|
|
|
/
S
/ R
UDY
H. P. M
ARKHAM
|
|
Director
|
|
February 22, 2016
|
Rudy H. P. Markham
|
|
|
|
|
|
|
|
|
|
/
S
/ RICHARD N. PERETZ
|
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Senior Vice President, Chief Financial Officer and Treasurer
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February 23, 2016
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Richard N. Peretz
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(Principal Financial and Accounting Officer)
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S
/ C
LARK
T. R
ANDT
, J
R
.
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Director
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February 20, 2016
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Clark T. Randt, Jr.
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S
/ J
OHN
T. S
TANKEY
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Director
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February 22, 2016
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John T. Stankey
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S
/ C
AROL
B. T
OMÉ
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Director
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February 22, 2016
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Carol B. Tomé
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/S/
K
EVIN
M. W
ARSH
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Director
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February 20, 2016
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Kevin M. Warsh
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Exhibit
No.
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Description
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2.1
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—
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Termination Agreement, dated as of January 22, 2013, between United Parcel Service, Inc. and TNT Express N.V. (incorporated by reference to Exhibit 2.3 to the 2012 Annual Report on Form 10-K)
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3.1
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—
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Form of Restated Certificate of Incorporation of United Parcel Service, Inc. (incorporated by reference to Exhibit 3.2 to Form 8-K filed on May 12, 2010).
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3.2
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—
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Amended and Restated Bylaws of United Parcel Service, Inc. as of February 14, 2013 (incorporated by reference to Exhibit 3.1 to Form 8-K, filed on February 19, 2013).
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4.1
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—
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Indenture relating to 8
3
/
8
% Debentures due April 1, 2020 (incorporated by reference to Exhibit 4(c) to Registration Statement No. 33-32481, filed December 7, 1989).
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4.2
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—
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Indenture dated as of December 18, 1997 relating to 8
3
/
8
% Debentures due 2030 (incorporated by reference to Exhibit T-3C to Form T-3 filed December 18, 1997).
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4.3
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—
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Indenture dated as of January 26, 1999 (incorporated by reference to Exhibit 4.1 to Pre-Effective Amendment No. 1 to Form S-3 (No. 333-08369), filed on January 26, 1999).
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4.4
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—
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Form of Supplemental Indenture dated as of March 27, 2000 to Indenture dated January 26, 1999 (incorporated by reference to Exhibit 4.2 to Post-Effective Amendment No. 1 to Form S-3 (No. 333-08369-01), filed on March 15, 2000).
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4.5
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—
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Form of Second Supplemental Indenture dated as of September 21, 2001 to Indenture dated January 26, 1999 (incorporated by reference to Exhibit 4 to Form 10-Q for the Quarter Ended September 30, 2001).
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4.6
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—
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Form of Indenture dated as of August 26, 2003 (incorporated by reference to Exhibit 4.1 to Form S-3 (No. 333-108272), filed on August 27, 2003).
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4.7
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—
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Form of First Supplemental Indenture dated as of November 15, 2013 to Indenture dated as of August 26, 2003 (incorporated by reference to Exhibit 4.2 to Form S-3ASR (No. 333-192369) filed on November 15, 2013).
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4.8
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—
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Form of Note for 5.50% Senior Notes due January 15, 2018 (incorporated by reference to Exhibit 4.2 to Form 8-K filed on January 15, 2008).
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4.9
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—
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Form of Note for 6.20% Senior Notes due January 15, 2038 (incorporated by reference to Exhibit 4.3 to Form 8-K filed on January 15, 2008).
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4.10
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—
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Form of Note for 5.125% Senior Notes due April 1, 2019 (incorporated by reference to Exhibit 4.2 to Form 8-K filed on March 24, 2009).
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4.11
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—
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Form of Note for 3.125% Senior Notes due January 15, 2021 (incorporated by reference to Exhibit 4.1 to Form 8-K filed on November 12, 2010).
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4.12
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—
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Form of Note for 4.875% Senior Notes due November 15, 2040 (incorporated by reference to Exhibit 4.2 to Form 8-K filed on November 12, 2010).
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4.13
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—
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Form of Note for 1.125% Senior Notes due October 1, 2017 (incorporated by reference to Exhibit 4.1 to Form 8-K filed on September 27, 2012).
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4.14
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—
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Form of Note for 2.450% Senior Notes due October 1, 2022 (incorporated by reference to Exhibit 4.2 to Form 8-K filed on September 27, 2012).
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4.15
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—
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Form of Note for 3.625% Senior Notes due October 1, 2042 (incorporated by reference to Exhibit 4.3 to Form 8-K filed on September 27, 2012).
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4.16
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—
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Form of Note for Floating Rate Senior Notes due December 15, 2064 (incorporated by reference to Exhibit 4.3 to Form 8-K filed on December 15, 2014).
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4.17
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—
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Form of Note for Floating Rate Senior Notes due September 15, 2065 (incorporated by reference to Exhibit 4.1 to Form 8-K filed on September 17, 2015).
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4.18
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—
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Form of Note for Floating Rate Senior Notes due July 15, 2020 (incorporated by reference to Exhibit 4.1 and Exhibit 4.2 to Form 8-K filed on November 20, 2015).
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4.19
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—
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Form of Note for 1.625% Senior Notes due November 15, 2025 (incorporated by reference to Exhibit 4.1 and Exhibit 4.2 to Form 8-K filed on November 20, 2015).
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4.20
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—
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Form of Note for Floating Rate Senior Notes due September 15, 2065 (incorporated by reference to Exhibit 4.1 to Form 8-K filed on December 15, 2015).
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10.1
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—
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UPS Retirement Plan, as Amended and Restated, effective as of January 1, 2014 (incorporated by reference to Exhibit 10.1 to the 2014 Annual Report on Form 10-K).
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10.2
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—
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UPS Savings Plan, as Amended and Restated, effective as of January 1, 2014 (incorporated by reference to Exhibit 10.2 to the 2014 Annual Report on Form 10-K).
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(1) Amendment Number One to the UPS Savings Plan Amendment and Restated (incorporated by reference to Exhibit 10.2 to the registration statement on Form S-8 (No. 333-208151), filed on November 20, 2015).
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10.3
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—
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Credit Agreement (364-Day Facility) dated March 27, 2015 among United Parcel Service, Inc., the initial lenders named therein, J.P. Morgan Securities LLC, Citigroup Global Markets, Inc., Barclays Bank PLC, BNP Paribas Securities Corp. and SG Americas Securities, LLC as joint lead arrangers and joint bookrunners, Barclays Bank PLC, BNP Paribas and Société Générale as co-documentation agents, Citibank, N.A. as syndication agent, and JPMorgan Chase Bank, N.A. as administrative agent (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2015).
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10.4
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—
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Credit Agreement (5 Year Facility) dated March 27, 2015 among United Parcel Service, Inc., the initial lenders named therein, J.P. Morgan Securities LLC, Citigroup Global Markets, Inc., Barclays Bank PLC, BNP Paribas Securities Corp. and SG Americas Securities, LLC as joint lead arrangers and joint bookrunners, Barclays Bank PLC, BNP Paribas and Société Générale as co-documentation agents, Citibank, N.A. as syndication agent, and JPMorgan Chase Bank, N.A. as administrative agent (incorporated by reference to Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2015).
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10.5
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—
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UPS Excess Coordinating Benefit Plan, as amended and restated, effective as of January 1, 2012 (incorporated by reference to Exhibit 10.5 to the 2012 Annual Report on Form 10-K).
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10.6
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—
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United Parcel Service, Inc. 2012 Omnibus Incentive Compensation Plan (incorporated by reference to Annex II to the Definitive Proxy Statement, filed on March 12, 2012).
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(1) Form of Long-Term Incentive Performance Award Agreement (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2011).
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(2) Form of Non-Management Director Restricted Stock Unit Award (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2010).
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(3) UPS Management Incentive Program Terms and Conditions effective as of January 1, 2011 (incorporated by reference to Exhibit 10.10(3) to the 2010 Annual Report on Form 10-K).
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(4) UPS Stock Option Program Terms and Conditions effective as of January 1, 2012 (incorporated by reference to Exhibit 10.7(4) to the 2011 Annual Report on Form 10-K).
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(5) UPS Long-Term Incentive Performance Program Terms and Conditions effective as of January 1, 2012 (incorporated by reference to Exhibit 10.7(5) to the 2011 Annual Report on Form 10-K).
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10.7
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—
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Form of UPS Deferred Compensation Plan (incorporated by reference to Exhibit 10.11 to the 2010 Annual Report on Form 10-K).
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(1) Amendment No. 1 to the UPS Deferred Compensation Plan (incorporated by reference to Exhibit 10.7(1) to the 2012 Annual Report on Form 10-K).
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10.8
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—
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United Parcel Service, Inc. Nonqualified Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.1 to the registration statement on Form S-8 (No. 333-34054), filed on April 5, 2000).
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10.9
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—
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Discounted Employee Stock Purchase Plan, as amended and restated, effective October 1, 2002.
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(1) Amendment No. 1 to the Discounted Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.12(1) to the 2005 Annual Report on Form 10-K).
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(2) Amendment No. 2 to the Discounted Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.13(2) to the 2009 Annual Report on Form 10-K).
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(3) Amendment No. 3 to the Discounted Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.9(3) to the 2012 Annual Report on Form 10-K).
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10.10
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—
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2015 Omnibus Incentive Compensation Plan (incorporated by reference to Annex A to the Definitive Proxy Statement filed on March 24, 2015).
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11
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—
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Statement regarding Computation of per Share Earnings (incorporated by reference to note 14 to Part I, Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K).
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†12
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—
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Ratio of Earnings to Fixed Charges.
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†21
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—
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Subsidiaries of the Registrant.
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†23
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—
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Consent of Deloitte & Touche LLP.
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†31.1
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—
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Certificate of the Chief Executive Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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†31.2
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Certificate of the Chief Financial Officer Pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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†32.1
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—
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Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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†32.2
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Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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†101
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The following financial information from the Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements.
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†
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Filed herewith.
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Year Ended December 31,
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2015
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2014
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2013
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2012
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2011
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Earnings:
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Income before income taxes
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$
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7,342
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$
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4,637
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$
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6,674
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$
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974
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$
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5,776
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Add: Interest expense
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341
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353
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380
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393
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348
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Add: Interest factor in rental expense
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223
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225
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192
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206
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210
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Total earnings
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$
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7,906
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$
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5,215
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$
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7,246
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$
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1,573
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$
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6,334
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Fixed charges:
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Interest expense
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$
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341
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$
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353
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$
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380
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$
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393
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$
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348
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Interest capitalized
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13
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11
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14
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18
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17
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Interest factor in rental expense
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223
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225
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192
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206
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210
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Total fixed charges
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$
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577
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$
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589
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$
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586
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$
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617
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$
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575
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Ratio of earnings to fixed charges
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13.7
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8.9
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12.4
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2.5
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11.0
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Name of Subsidiary
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Jurisdiction of Organization
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BT Property Holdings, Inc.
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Delaware
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BT Realty II, Inc.
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Maryland
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BT Realty, Inc.
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Maryland
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C.C. & E.I., L.L.C.
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Delaware
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Coyote Logistics Midco, Inc.
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Delaware
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United Parcel Service Canada Ltd.
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Canada
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United Parcel Service Co.
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Delaware
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United Parcel Service France SNC
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France
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United Parcel Service General Services Co.
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Delaware
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United Parcel Service of America, Inc.
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Delaware
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United Parcel Service, Inc.
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Ohio
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United Parcel Service, Inc.
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Delaware
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UPICO Corporation
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Delaware
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UPINSCO, Inc.
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Virgin Islands
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UPS Asia Group Pte. Ltd.
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Singapore
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United Parcel Service Deutschland Inc and Co OHG
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Germany
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UPS Expedited Mail Services, Inc.
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Delaware
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UPS Global Treasury Plc
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United Kingdom
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UPS Ground Freight, Inc.
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Virginia
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UPS Limited
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United Kingdom
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UPS Parcel Delivery Service Limited
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Hong Kong
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UPS SCS GmbH & Co OHG
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Germany
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UPS SCS Holding Limited
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Hong Kong
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UPS SCS, Inc.
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Canada
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UPS Supply Chain Solutions, Inc.
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Delaware
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UPS Worldwide Forwarding, Inc.
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Delaware
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1.
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I have reviewed this annual report on Form 10-K of United Parcel Service, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/
S
/ D
AVID
P. A
BNEY
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David P. Abney
Chairman and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of United Parcel Service, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/
S
/ RICHARD N. PERETZ
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Richard N. Peretz
Senior Vice President, Chief Financial Officer and Treasurer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
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/
S
/ D
AVID
P. A
BNEY
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David P. Abney
Chairman and Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
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/
S
/ RICHARD N. PERETZ
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Richard N. Peretz
Senior Vice President, Chief Financial Officer and Treasurer
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