Equity Activity:

3 Months Ended

Mar. 31, 2014

Equity Activity:

Equity Activity:

7. Equity Activity:

Reclassifications and Taxes Related to Items of Other Comprehensive Income
(Dollars in millions)				Before Tax		Tax (Expense)/		Net of Tax
For the three months ended March 31, 2014:				Amount		Benefit		Amount
Other comprehensive income/(loss):
	Foreign currency translation adjustments		$	(61)	$	10	$	(51)
	Net changes related to available-for-sale securities:
		Unrealized gains/(losses) arising during the period	$	0	$	(0)	$	0
		Reclassification of (gains)/losses to other (income) and expense		4		(2)		3
		Subsequent changes in previously impaired securities arising during
		the period		—		—		—
	Total net changes related to available-for-sale securities		$	4	$	(2)	$	3
	Unrealized gains/(losses) on cash flow hedges:
		Unrealized gains/(losses) arising during the period	$	88	$	(33)	$	54
		Reclassification of (gains)/losses to:
		Cost of sales		26		(10)		16
		SG&A expense		2		0		2
		Other (income) and expense		(29)		11		(18)
		Interest expense		0		(0)		0
	Total unrealized gains/(losses) on cash flow hedges		$	87	$	(32)	$	55
	Retirement-related benefit plans(1):
		Prior service costs/(credits)	$	1	$	(0)	$	0
		Net (losses)/gains arising during the period		32		(11)		21
		Curtailments and settlements		4		(1)		3
		Amortization of prior service (credits)/costs		(29)		10		(20)
		Amortization of net (gains)/losses		649		(214)		434
	Total retirement-related benefit plans		$	656	$	(217)	$	439
Other comprehensive income/(loss)			$	687	$	(241)	$	446
(1) These AOCI components are included in the computation of net periodic pension cost. (See note 8, "Retirement-Related Benefits,"
for additional information.)

Reclassifications and Taxes Related to Items of Other Comprehensive Income
(Dollars in millions)				Before Tax		Tax (Expense)/		Net of Tax
For the three months ended March 31, 2013:				Amount		Benefit		Amount
Other comprehensive income/(loss):
	Foreign currency translation adjustments		$	(405)	$	(84)	$	(489)
	Net changes related to available-for-sale securities:
		Unrealized gains/(losses) arising during the period	$	(3)	$	1	$	(2)
		Reclassification of (gains)/losses to other (income) and expense		1		(0)		0
		Subsequent changes in previously impaired securities arising during
		the period		1		(0)		1
	Total net changes related to available-for-sale securities		$	(1)	$	0	$	(0)
	Unrealized gains/(losses) on cash flow hedges:
		Unrealized gains/(losses) arising during the period	$	360	$	(128)	$	232
		Reclassification of (gains)/losses to:
		Cost of sales		(9)		3		(6)
		SG&A expense		(10)		3		(7)
		Other (income) and expense		(37)		14		(23)
		Interest expense		0		—		0
	Total unrealized gains/(losses) on cash flow hedges		$	305	$	(108)	$	197
	Retirement-related benefit plans(1):
		Prior service costs/(credits)	$	33	$	(11)	$	22
		Net (losses)/gains arising during the period		(15)		5		(10)
		Curtailments and settlements		—		—		—
		Amortization of prior service (credits)/costs		(30)		10		(20)
		Amortization of net (gains)/losses		886		(293)		594
	Total retirement-related benefit plans		$	875	$	(289)	$	586
Other comprehensive income/(loss)			$	773	$	(480)	$	293
(1) These AOCI components are included in the computation of net periodic pension cost. (See note 8, "Retirement-Related Benefits,"
for additional information.)

Accumulated Other Comprehensive Income/(Loss) (net of tax)
						Net Change		Net Unrealized
		Net Unrealized		Foreign		Retirement-		Gains/(Losses)		Accumulated
		Gains/(Losses)		Currency		Related		on Available-		Other
		on Cash Flow		Translation		Benefit		For-Sale		Comprehensive
(Dollars in Millions)		Hedges		Adjustments*		Plans		Securities		Income/(Loss)
January 1, 2014		$	(165)	$	332	$	(21,767)	$	(1)	$	(21,602)
Other comprehensive income before
	reclassifications		54		(51)		21		0		24
Amount reclassified from accumulated
	other comprehensive income		1		0		417		3		421
Total change for the period			55		(51)		439		3		446
March 31, 2014		$	(111)	$	281	$	(21,328)	$	2	$	(21,156)
						Net Change		Net Unrealized
		Net Unrealized		Foreign		Retirement-		Gains/(Losses)		Accumulated
		Gains/(Losses)		Currency		Related		on Available-		Other
		on Cash Flow		Translation		Benefit		For-Sale		Comprehensive
(Dollars in Millions)		Hedges		Adjustments*		Plans		Securities		Income/(Loss)
January 1, 2013		$	(90)	$	1,733	$	(27,406)	$	4	$	(25,759)
Other comprehensive income before
	reclassifications		232		(489)		12		(1)		(245)
Amount reclassified from accumulated
	other comprehensive income		(35)		0		574		0		539
Total change for the period			197		(489)		586		(0)		293
March 31, 2013		$	107	$	1,243	$	(26,820)	$	4	$	(25,466)
* Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.