Equity Activity:

9 Months Ended

Sep. 30, 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 September 30, 2014:				Amount		Benefit		Amount
Other comprehensive income/(loss):
	Foreign currency translation adjustments		$	(1,126)	$	(271)	$	(1,397)
	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		0		0		0
		Subsequent changes in previously impaired securities arising during
		the period		—		—		—
	Total net changes related to available-for-sale securities		$	0	$	0	$	0
	Unrealized gains/(losses) on cash flow hedges:
		Unrealized gains/(losses) arising during the period	$	524	$	(182)	$	342
		Reclassification of (gains)/losses to:
		Cost of sales		4		(1)		3
		SG&A expense		(3)		1		(2)
		Other (income) and expense		57		(22)		35
		Interest expense		1		0		1
	Total unrealized gains/(losses) on cash flow hedges		$	582	$	(204)	$	378
	Retirement-related benefit plans(1):
		Prior service costs/(credits)	$	0	$	0	$	0
		Net (losses)/gains arising during the period		1		0		1
		Curtailments and settlements		7		(2)		5
		Amortization of prior service (credits)/costs		(29)		10		(19)
		Amortization of net (gains)/losses		635		(212)		423
	Total retirement-related benefit plans		$	615	$	(205)	$	409
Other comprehensive income/(loss)			$	71	$	(680)	$	(609)
(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 September 30, 2013:				Amount		Benefit		Amount
Other comprehensive income/(loss):
	Foreign currency translation adjustments		$	382	$	86	$	468
	Net changes related to available-for-sale securities:
		Unrealized gains/(losses) arising during the period	$	3	$	(1)	$	1
		Reclassification of (gains)/losses to other (income) and expense		(5)		2		(3)
		Subsequent changes in previously impaired securities arising during
		the period		1		0		1
	Total net changes related to available-for-sale securities		$	(1)	$	0	$	(1)
	Unrealized gains/(losses) on cash flow hedges:
		Unrealized gains/(losses) arising during the period	$	(409)	$	144	$	(265)
		Reclassification of (gains)/losses to:
		Cost of sales		17		(7)		10
		SG&A expense		(13)		5		(9)
		Other (income) and expense		(30)		12		(19)
		Interest expense		0		0		0
	Total unrealized gains/(losses) on cash flow hedges		$	(436)	$	153	$	(282)
	Retirement-related benefit plans(1):
		Prior service costs/(credits)	$	0	$	0	$	0
		Net (losses)/gains arising during the period		105		(36)		68
		Curtailments and settlements		0		0		0
		Amortization of prior service (credits)/costs		(28)		10		(18)
		Amortization of net (gains)/losses		872		(304)		568
	Total retirement-related benefit plans		$	949	$	(331)	$	618
Other comprehensive income/(loss)			$	895	$	(91)	$	804
(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 nine months ended September 30, 2014:				Amount		Benefit		Amount
Other comprehensive income/(loss):
	Foreign currency translation adjustments		$	(848)	$	(241)	$	(1,090)
	Net changes related to available-for-sale securities:
		Unrealized gains/(losses) arising during the period	$	1	$	0	$	1
		Reclassification of (gains)/losses to other (income) and expense		5		(2)		3
		Subsequent changes in previously impaired securities arising during
		the period		––		––		––
	Total net changes related to available-for-sale securities		$	6	$	(2)	$	4
	Unrealized gains/(losses) on cash flow hedges:
		Unrealized gains/(losses) arising during the period	$	596	$	(213)	$	383
		Reclassification of (gains)/losses to:
		Cost of sales		53		(18)		35
		SG&A expense		5		0		5
		Other (income) and expense		33		(13)		20
		Interest expense		1		0		1
	Total unrealized gains/(losses) on cash flow hedges		$	687	$	(244)	$	443
	Retirement-related benefit plans(1):
		Prior service costs/(credits)	$	1	$	0	$	0
		Net (losses)/gains arising during the period		48		(16)		32
		Curtailments and settlements		20		(7)		14
		Amortization of prior service (credits)/costs		(88)		29		(58)
		Amortization of net (gains)/losses		1,923		(644)		1,279
	Total retirement-related benefit plans		$	1,905	$	(638)	$	1,266
Other comprehensive income/(loss)			$	1,749	$	(1,126)	$	623
(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 nine months ended September 30, 2013:				Amount		Benefit		Amount
Other comprehensive income/(loss):
	Foreign currency translation adjustments		$	(959)	$	(21)	$	(980)
	Net changes related to available-for-sale securities:
		Unrealized gains/(losses) arising during the period	$	0	$	(1)	$	0
		Reclassification of (gains)/losses to other (income) and expense		(5)		2		(3)
		Subsequent changes in previously impaired securities arising during
		the period		3		(1)		2
	Total net changes related to available-for-sale securities		$	(1)	$	0	$	(1)
	Unrealized gains/(losses) on cash flow hedges:
		Unrealized gains/(losses) arising during the period	$	(58)	$	25	$	(33)
		Reclassification of (gains)/losses to:
		Cost of sales		15		(6)		9
		SG&A expense		(29)		10		(18)
		Other (income) and expense		(115)		45		(71)
		Interest expense		0		0		0
	Total unrealized gains/(losses) on cash flow hedges		$	(188)	$	74	$	(114)
	Retirement-related benefit plans(1):
		Prior service costs/(credits)	$	33	$	(11)	$	21
		Net (losses)/gains arising during the period		300		(103)		197
		Curtailments and settlements		0		0		0
		Amortization of prior service (credits)/costs		(86)		30		(57)
		Amortization of net (gains)/losses		2,623		(901)		1,721
	Total retirement-related benefit plans		$	2,869	$	(986)	$	1,883
Other comprehensive income/(loss)			$	1,721	$	(933)	$	788
(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		383		(1,090)		32		1		(674)
Amount reclassified from accumulated
	other comprehensive income		61		0		1,235		3		1,299
Total change for the period			443		(1,090)		1,267		4		623
September 30, 2014		$	277	$	(758)	$	20,501	$	3	$	(20,978)
						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		(33)		(980)		218		2		(793)
Amount reclassified from accumulated
	other comprehensive income		(81)		0		1,664		(3)		1,580
Total change for the period			(114)		(980)		1,883		(1)		788
September 30, 2013		$	(204)	$	752	$	(25,523)	$	3	$	(24,971)
*	Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.