UPS 2015 Annual Report Download - page 132
Download and view the complete annual report
Please find page 132 of the 2015 UPS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122 -
123 -
124 -
125 -
126 -
127 -
128 -
129 -
130 -
131 -
132 -
133 -
134 -
135 -
136 -
137 -
138 -
139 -
140 -
141 -
142 -
143
-
144
-
145
-
146
-
147
-
148
 |
 |
UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
120
The following table indicates the amount and location in the statements of consolidated income in which derivative gains and
losses, as well as the associated gains and losses on the underlying exposure, have been recognized for those derivatives designated
as fair value hedges for the years ended December 31, 2015 and 2014 (in millions):
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)
Additionally, we maintain some interest rate swaps, foreign currency forwards, investment market price forwards and
commodity contracts that are not designated as hedges. These interest rate swap contracts are intended to provide an economic
hedge of portions of our outstanding debt. These foreign exchange forward contracts are intended to provide an economic offset to
foreign currency remeasurement risks for certain assets and liabilities in our consolidated balance sheets. These investment market
price forward contracts are intended to provide an economic offset to fair value fluctuations of certain investments in marketable
securities. These commodity contracts are intended to provide a short-term economic offset to fuel expense changes due to price
fluctuations.
We also periodically terminate interest rate swaps and foreign currency options by entering into offsetting swap and foreign
currency positions with different counterparties. As part of this process, we de-designate our original swap and foreign currency
contracts. These transactions provide an economic offset that effectively eliminates the impact of changes in market valuation.
The following is a summary of the amounts recorded in the statements of consolidated income related to fair value changes
and settlements of these foreign currency forwards, interest rate swaps, and commodity contracts not designated as hedges for the
years ended December 31, 2015 and 2014 (in millions):
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