Equity Activity (Tables)

9 Months Ended

Sep. 30, 2016

Equity Activity:

Schedule of Reclassifications and Taxes Related to Items of Other Comprehensive Income

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, 2016:	Amount			Benefit			Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	(99	)	$	50		$	(49	)
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	(1		)	0			(1		)
Total net changes related to available-for-sale securities	$	(2	)	$	1		$	(1	)
Unrealized gains/(losses) on cash flow hedges:
Unrealized gains/(losses) arising during the period	$	35		$	(14	)	$	21
Reclassification of (gains)/losses to:
Cost of sales	4			(2		)	2
SG&A expense	(2		)	(1		)	(3		)
Other (income) and expense	6			(2		)	4
Interest expense	7			(3		)	4
Total unrealized gains/(losses) on cash flow hedges	$	50		$	(22	)	$	29
Retirement-related benefit plans(1):
Net (losses)/gains arising during the period	$	11		$	(5	)	$	6
Curtailments and settlements	4			(1		)	3
Amortization of prior service (credits)/costs	(28		)	9			(19		)
Amortization of net (gains)/losses	696			(225		)	471
Total retirement-related benefit plans	$	683		$	(222	)	$	461
Other comprehensive income/(loss)	$	632		$	(192	)	$	440

(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, 2015:	Amount			Benefit			Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	(1,015	)	$	(28	)	$	(1,043	)
Net changes related to available-for-sale securities:
Unrealized gains/(losses) arising during the period	$	(102	)	$	39		$	(63	)
Reclassification of (gains)/losses to other (income) and expense	0			0			0
Total net changes related to available-for-sale securities	$	(101	)	$	39		$	(62	)
Unrealized gains/(losses) on cash flow hedges:
Unrealized gains/(losses) arising during the period	$	36		$	(9	)	$	27
Reclassification of (gains)/losses to:
Cost of sales	(46		)	13			(33		)
SG&A expense	(43		)	13			(30		)
Other (income) and expense	(185		)	71			(114		)
Interest expense	0			0			0
Total unrealized gains/(losses) on cash flow hedges	$	(237	)	$	88		$	(149	)
Retirement-related benefit plans(1):
Prior service costs/(credits)	$	0		$	0		$	0
Net (losses)/gains arising during the period	(2		)	1			(1		)
Curtailments and settlements	11			(4		)	7
Amortization of prior service (credits)/costs	(25		)	8			(16		)
Amortization of net (gains)/losses	823			(281		)	542
Total retirement-related benefit plans	$	807		$	(275	)	$	531
Other comprehensive income/(loss)	$	(547	)	$	(176	)	$	(724	)

(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, 2016:	Amount			Benefit			Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	(109	)	$	411		$	303
Net changes related to available-for-sale securities:
Unrealized gains/(losses) arising during the period	$	(36	)	$	14		$	(22	)
Reclassification of (gains)/losses to other (income) and expense	36			(14		)	22
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	$	(221	)	$	82		$	(139	)
Reclassification of (gains)/losses to:
Cost of sales	14			(7		)	7
SG&A expense	1			(3		)	(1		)
Other (income) and expense	(6		)	2			(4		)
Interest expense	17			(6		)	10
Total unrealized gains/(losses) on cash flow hedges	$	(195	)	$	68		$	(127	)
Retirement-related benefit plans(1):
Net (losses)/gains arising during the period	$	(57	)	$	20		$	(37	)
Curtailments and settlements	19			(7		)	12
Amortization of prior service (credits)/costs	(81		)	29			(52		)
Amortization of net (gains)/losses	2,079			(735		)	1,344
Total retirement-related benefit plans	$	1,960		$	(693	)	$	1,267
Other comprehensive income/(loss)	$	1,656		$	(213	)	$	1,442

(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, 2015:	Amount			Benefit			Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	(1,365	)	$	(227	)	$	(1,593	)
Net changes related to available-for-sale securities:
Unrealized gains/(losses) arising during the period	$	(85	)	$	33		$	(52	)
Reclassification of (gains)/losses to other (income) and expense	0			0			0
Total net changes related to available-for-sale securities	$	(85	)	$	33		$	(52	)
Unrealized gains/(losses) on cash flow hedges:
Unrealized gains/(losses) arising during the period	$	467		$	(166	)	$	301
Reclassification of (gains)/losses to:
Cost of sales	(154		)	46			(109		)
SG&A expense	(124		)	36			(88		)
Other (income) and expense	(565		)	217			(348		)
Interest expense	0			0			0
Total unrealized gains/(losses) on cash flow hedges	$	(376	)	$	132		$	(243	)
Retirement-related benefit plans(1):
Prior service costs/(credits)	$	6		$	(2	)	$	4
Net (losses)/gains arising during the period	14			(5		)	9
Curtailments and settlements	19			(6		)	12
Amortization of prior service (credits)/costs	(76		)	26			(50		)
Amortization of net (gains)/losses	2,479			(846		)	1,633
Total retirement-related benefit plans	$	2,441		$	(833	)	$	1,608
Other comprehensive income/(loss)	$	616		$	(895	)	$	(280	)

(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)

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, 2016	$	100		$	(3,463	)	$	(26,248	)	$	5		$	(29,607	)
Other comprehensive income before reclassifications	(139		)	303			(25		)	(22		)	117
Amount reclassified from accumulated other comprehensive income	12			0			1,292			22			1,326
Total change for the period	(127		)	303			1,267			0			1,442
September 30, 2016	$	(28	)	$	(3,161	)	$	(24,981	)	$	4		$	(28,164	)

*  Foreign currency translation adjustments are presented gross except for any associated hedges which are presented 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, 2015	$	392		$	(1,742	)	$	(26,509	)	$	(15	)	$	(27,875	)
Other comprehensive income before reclassifications	301			(1,593		)	25			(52		)	(1,319		)
Amount reclassified from accumulated other comprehensive income	(544		)	0			1,583			0			1,039
Total change for the period	(243		)	(1,593		)	1,608			(52		)	(280		)
September 30, 2015	$	148		$	(3,335	)	$	(24,901	)	$	(67	)	$	(28,155	)

*  Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.