Shareholders’ Equity

Changes in certain components of shareholders’ equity were as follows:



	Common Stock Issued at Par Value		Capital in Excess of Par Value			Retained Earnings			Deferred Compensation			Treasury Stock
(Millions of dollars)	Common Stock Issued at Par Value		Capital in Excess of Par Value			Retained Earnings			Deferred Compensation			Shares (in thousands)		Amount
Balance at September 30, 2014	$	333	$	2,198		$	12,105		$	19		(140,770	)	$	(8,601	)
Net income	—		—			695			—			—		—
Cash dividends:
Common ($2.40 per share)	—		—			(485		)	—			—		—
Common stock issued for:
Share-based compensation and other plans, net	—		30			(2		)	1			2,839		(6		)
Acquisitions	—		2,083			—			—			15,959		368
Share-based compensation	—		164			—			—			—		—
Common stock held in trusts, net	—		—			—			—			5		—
Balance at September 30, 2015	$	333	$	4,475		$	12,314		$	20		(121,967	)	$	(8,239	)
Net income	—		—			976			—			—		—
Cash dividends:
Common ($2.64 per share)	—		—			(562		)	—			—		—
Common stock issued for:
Share-based compensation and other plans, net	—		27			(1		)	2			2,607		26
Share-based compensation	—		191			—			—			—		—
Common stock held in trusts, net	—		—			—			—			(11	)	—
Balance at September 30, 2016	$	333	$	4,693		$	12,727		$	22		(119,371	)	$	(8,212	)
Net income	—		—			1,100			—			—		—
Cash dividends:
Common ($2.92 per share)	—		—			(645		)	—			—		—
Preferred	—		—			(70		)	—			—		—
Common stock issued for:
Public equity offerings	14		4,810			—			—			—		—
Share-based compensation and other plans, net	—		(65		)	(1		)	(3		)	1,908		6
Share-based compensation	—		180			—			—			—		—
Common stock held in trusts, net	—		—			—			—			7		—
Repurchase of common stock	—		—			—			—			(1,289	)	(220		)
Balance at September 30, 2017	$	347	$	9,619		$	13,111		$	19		(118,745	)	$	(8,427	)

Common stock held in trusts represents rabbi trusts in connection with deferred compensation under the Company’s employee salary and bonus deferral plan and directors’ deferral plan.

Accelerated Share Repurchase Agreement

Using proceeds received from the divestiture of the Respiratory Solutions business in the first quarter of fiscal year 2017, the Company repurchased approximately 1.3 million shares of its common stock under an accelerated share repurchase agreement. The repurchased shares were recorded as a $220 million increase to Common stock in treasury.

Common and Preferred Stock Offerings

In May 2017 and in connection with the Company's pending agreement to acquire C.R. Bard, Inc. ("Bard"), which is further discussed in Note 9, the Company completed registered public offerings of equity securities including:


•	14.025 million shares of the Company's common stock for net proceeds of $2.4 billion (gross proceeds of $2.5 billion).

•

2.475 million shares of the Company's mandatory convertible preferred stock (ownership is held in the form of depositary shares, each representing a 1/20th interest in a share of preferred stock) for net proceeds of $2.4 billion (gross proceeds of $2.5 billion). If and when declared, dividends on the mandatory convertible preferred stock will be payable on a cumulative basis at an annual rate of 6.125% on the liquidation preference of $1,000 per preferred share ($50 per depositary share). The shares of preferred stock are convertible to a minimum of 11.7 million and up to a maximum of 14.0 million shares of Company common stock at an exchange ratio that is based on the market price of the Company’s common stock at the date of conversion, and no later than the mandatory conversion date of May 1, 2020.

The Company will use the net proceeds from these offerings to finance a portion of the cash consideration payable upon the closing of the Bard acquisition, which the Company expects to occur in the fourth calendar quarter of 2017.

The components and changes of Accumulated other comprehensive income (loss) were as follows:



(Millions of dollars)	Total			Foreign Currency Translation			Benefit Plans			Cash Flow Hedges
Balance at September 30, 2014	$	(1,001	)	$	(270	)	$	(705	)	$	(26	)
Other comprehensive loss before reclassifications, net of taxes	(787		)	(692		)	(80		)	(16		)
Amounts reclassified into income, net of taxes	50			—			44			6
Balance at September 30, 2015	$	(1,738	)	$	(961	)	$	(741	)	$	(36	)
Other comprehensive loss before reclassifications, net of taxes	(251		)	(50		)	(190		)	(11		)
Amounts reclassified into income, net of taxes	60			—			48			12
Balance at September 30, 2016	$	(1,929	)	$	(1,011	)	$	(883	)	$	(35	)
Other comprehensive income before reclassifications, net of taxes	140			11			121			8
Amounts reclassified into income, net of taxes	66			—			58			8
Balance at September 30, 2017	$	(1,723	)	$	(1,001	)	$	(703	)	$	(18	)

The amount of foreign currency translation recognized in other comprehensive income during the year ended September 30, 2017 included net losses relating to net investment hedges, as further discussed in Note 13. The amount recognized in other comprehensive income during the year ended September 30, 2017 relating to cash flow hedges represented a net gain on forward starting interest rate swaps, which is further discussed in Note 13.

The tax impacts for amounts recognized in other comprehensive income before reclassifications were as follows:



(Millions of dollars)	2017			2016		2015
Benefit Plans
Income tax (provision) benefit for net gains (losses) recorded in other comprehensive income	$	(60	)	$	79	$	47

Cash Flow Hedges
Income tax (provision) benefit for net gains (losses) recorded in other comprehensive income	$	(5	)	$	7	$	10

Reclassifications out of Accumulated other comprehensive income (loss) relating to benefit plans and cash flow hedges in 2017, 2016 and 2015 were immaterial to the Company's consolidated financial results