Shareowners’ Equity and Noncontrolling Interest

A summary of the changes in shareowners’ equity and noncontrolling interest comprising total equity for the quarters and six months ended June 30, 2013 and 2012 is provided below:



	Quarter Ended June 30,
	2013									2012
(Dollars in millions)	Share-owners’ Equity			Non-controlling Interest			Total Equity			Share-owners’ Equity			Non-controlling Interest			Total Equity
Equity, beginning of period	$	26,194		$	1,369		$	27,563		$	22,492		$	1,057		$	23,549
Comprehensive income (loss) for the period:
Net income	1,560			93			1,653			1,328			94			1,422
Total other comprehensive loss	(133		)	(5		)	(138		)	(674		)	(27		)	(701		)
Total comprehensive income for the period	1,427			88			1,515			654			67			721
Common Stock issued under employee plans	201						201			104						104
Common Stock repurchased	(335		)				(335		)	—						—
Equity Units Issuance	—						—			(216		)				(216		)
Dividends on Common Stock	(465		)				(465		)	(413		)				(413		)
Dividends on ESOP Common Stock	(17		)				(17		)	(16		)				(16		)
Dividends attributable to noncontrolling interest				(71		)	(71		)				(72		)	(72		)
Purchase of subsidiary shares from noncontrolling interest	(18		)	(1		)	(19		)	—			(2		)	(2		)
Sale of subsidiary shares in noncontrolling interest	—			5			5			—			20			20
Acquisition of noncontrolling interest				—			—						47			47
Disposition of noncontrolling interest				(5		)	(5		)				—			—
Redeemable noncontrolling interest in subsidiaries’ earnings				(2		)	(2		)				(7		)	(7		)
Redeemable noncontrolling interest in total other comprehensive income				2			2						7			7
Change in redemption value of put options	—						—			(1		)				(1		)
Redeemable noncontrolling interest reclassification to noncontrolling interest				(3		)	(3		)				4			4
Equity, end of period	$	26,987		$	1,382		$	28,369		$	22,604		$	1,121		$	23,725



	Six Months Ended June 30,
	2013									2012
(Dollars in millions)	Share-owners’ Equity			Non-controlling Interest			Total Equity			Share-owners’ Equity			Non-controlling Interest			Total Equity
Equity, beginning of period	$	25,914		$	1,155		$	27,069		$	21,880		$	940		$	22,820
Comprehensive income (loss) for the period:
Net income	2,826			175			3,001			1,658			171			1,829
Total other comprehensive loss	(552		)	(26		)	(578		)	(185		)	(19		)	(204		)
Total comprehensive income for the period	2,274			149			2,423			1,473			152			1,625
Common Stock issued under employee plans	452						452			333						333
Common Stock repurchased	(670		)				(670		)	—						—
Equity Units Issuance	—						—			(216		)				(216		)
Dividends on Common Stock	(930		)				(930		)	(825		)				(825		)
Dividends on ESOP Common Stock	(34		)				(34		)	(32		)				(32		)
Dividends attributable to noncontrolling interest				(127		)	(127		)				(130		)	(130		)
Purchase of subsidiary shares from noncontrolling interest	(19		)	(10		)	(29		)	(8		)	(3		)	(11		)
Sale of subsidiary shares in noncontrolling interest	—			242			242			—			35			35
Acquisition of noncontrolling interest				—			—						55			55
Disposition of noncontrolling interest				(5		)	(5		)				(4		)	(4		)
Redeemable noncontrolling interest in subsidiaries’ earnings				(2		)	(2		)				(11		)	(11		)
Redeemable noncontrolling interest in total other comprehensive income				6			6						8			8
Change in redemption value of put options	—						—			(1		)				(1		)
Redeemable noncontrolling interest reclassification to noncontrolling interest				(26		)	(26		)				79			79
Equity, end of period	$	26,987		$	1,382		$	28,369		$	22,604		$	1,121		$	23,725

As of January 1, 2013, we adopted the provisions of the FASB issued Accounting Standards Update ("ASU") No. 2013-02, "Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." As a result of this adoption, we have disclosed below the significant items reclassified to net income in their entirety during the period.

A summary of the changes in each component of accumulated other comprehensive loss, net of tax for the six months ended June 30, 2013 are provided below:



(Dollars in millions)	Foreign Currency Translation			Defined Benefit Pension and Post- retirement Plans			Unrealized Gains (Losses) on Available-for-Sale Securities			Unrealized Hedging (Losses) Gains			Accumulated Other Comprehensive (Loss) Income
Balance at December 31, 2012	$	654		$	(6,250	)	$	145		$	3		$	(5,448	)
Other comprehensive (loss) income before reclassifications	(794		)	38			82			(120		)	(794		)
Amounts reclassified from accumulated other comprehensive (loss) income	(32		)	290			(33		)	17			242
Balance at June 30, 2013	$	(172	)	$	(5,922	)	$	194		$	(100	)	$	(6,000	)

Details of the reclassification out of accumulated other comprehensive loss for the quarter and six months ended June 30, 2013 is provided below:



Details about Accumulated Other Comprehensive Loss Components Reclassified to Net Income (Dollars in millions)	Quarter Ended June 30, 2013			Six Months Ended June 30, 2013			Affected Line item in the Condensed Consolidated Statement of Comprehensive Income
	Income (Expense)			Income (Expense)
Foreign Currency Translation:
Recognized due to business disposition	$	36		$	32		Other income, net
Defined Benefit Pension and Post-retirement Plans:
Amortization of prior-service costs and transition obligation	$	12		$	24		Note (1)
Recognized actuarial net loss	(239		)	(478		)	Note (1)
Total before tax	(227		)	(454		)
Tax benefit	83			164			Income tax expense
Net of tax	$	(144	)	$	(290	)
Unrealized Gains on Available-for-Sale Securities:
Realized gain on sale of securities, before tax	$	27		$	54		Other income, net
Tax expense	(11		)	(21		)	Income tax expense
Net of tax	$	16		$	33
Unrealized Hedging (Losses) Gains:
Foreign exchange contracts	$	(15	)	$	(23	)	Product sales
Other contracts	—			2			Other income, net
Total before tax	(15		)	(21		)
Tax benefit	3			4			Income tax expense
Net of tax	$	(12	)	$	(17	)

(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 7 for additional details).

All noncontrolling interests with redemption features, such as put options, that are not solely within our control (redeemable noncontrolling interests) are reported in the mezzanine section of the Condensed Consolidated Balance Sheet, between liabilities and equity, at the greater of redemption value or initial carrying value. A summary of the changes in redeemable noncontrolling interest recorded in the mezzanine section of the Condensed Consolidated Balance Sheet for the quarters and six months ended June 30, 2013 and 2012 is provided below:



	Quarter Ended June 30,						Six Months Ended June 30,
(Dollars in millions)	2013			2012			2013			2012
Redeemable noncontrolling interest, beginning of period	$	255		$	243		$	238		$	358
Net income	1			7			2			11
Foreign currency translation, net	(2		)	(7		)	(6		)	(8		)
Dividends attributable to noncontrolling interest	—			—			(3		)	(11		)
Purchase of subsidiary shares from noncontrolling interest	—			(2		)	—			(34		)
Disposition of noncontrolling interest	(82		)	—			(82		)	—
Change in redemption value of put options	—			1			—			1
Redeemable noncontrolling interest reclassification to noncontrolling interest	2			(4		)	25			(79		)
Redeemable noncontrolling interest, end of period	$	174		$	238		$	174		$	238

Changes in noncontrolling interests that do not result in a change of control and where there is a difference between fair value and carrying value are accounted for as equity transactions. A summary of these changes in ownership interests in subsidiaries and the effect on shareowners’ equity for the quarters and six months ended June 30, 2013 and 2012 is provided below:



	Quarter Ended June 30,					Six Months Ended June 30,
(Dollars in millions)	2013			2012		2013			2012
Net income attributable to common shareowners	$	1,560		$	1,328	$	2,826		$	1,658
Transfers to noncontrolling interests:
Decrease in common stock for purchase of subsidiary shares	(18		)	—		(19		)	(8		)
Change from net income attributable to common shareowners and transfers to noncontrolling interests	$	1,542		$	1,328	$	2,807		$	1,650