Note 19.

Shareholders’ Equity

Common Equity

On October 17, 2016, the Board of Directors of Group Inc. (Board) declared a dividend of $0.65 per common share to be paid on December 29, 2016 to common shareholders of record on December 1, 2016.

The firm’s share repurchase program is intended to help maintain the appropriate level of common equity. The share repurchase program is effected primarily through regular open-market purchases (which may include repurchase plans designed to comply with Rule 10b5-1), the amounts and timing of which are determined primarily by the firm’s current and projected capital position, but which may also be influenced by general market conditions and the prevailing price and trading volumes of the firm’s common stock. Prior to repurchasing common stock, the firm must receive confirmation that the Federal Reserve Board does not object to such capital actions.

The table below presents the amount of common stock repurchased by the firm under the share repurchase program.


	September 2016
in millions, except per share amounts		Three Months Ended	Nine Months Ended
Common share repurchases		7.8	29.0

Average cost per share		$162.83	$157.54

Total cost of common share repurchases		$ 1,275	$ 4,569

Pursuant to the terms of certain share-based compensation plans, employees may remit shares to the firm or the firm may cancel restricted stock units (RSUs) or stock options to satisfy minimum statutory employee tax withholding requirements and the exercise price of stock options. Under these plans, during the nine months ended September 2016, 49,374 shares were remitted with a total value of $7 million, and the firm cancelled 6.1 million of RSUs with a total value of $920 million and 660,271 stock options with a total value of $106 million.

Preferred Equity

The tables below present details about the perpetual preferred stock issued and outstanding as of September 2016.


Series	Shares Authorized	Shares Issued	Shares Outstanding	Depositary Shares Per Share
A	50,000	30,000	29,999	1,000

B	50,000	32,000	32,000	1,000

C	25,000	8,000	8,000	1,000

D	60,000	54,000	53,999	1,000

E	17,500	7,667	7,667	N/A

F	5,000	1,615	1,615	N/A

I	34,500	34,000	34,000	1,000

J	46,000	40,000	40,000	1,000

K	32,200	28,000	28,000	1,000

L	52,000	52,000	52,000	25

M	80,000	80,000	80,000	25

N	31,050	27,000	27,000	1,000

O	26,000	26,000	26,000	25
Total	509,250	420,282	420,280

Series			Liquidation Preference	Redemption Value ($ in millions)
A			$ 25,000	$ 750

B			25,000	800

C			25,000	200

D			25,000	1,350

E			100,000	767

F			100,000	161

I			25,000	850

J			25,000	1,000

K			25,000	700

L			25,000	1,300

M			25,000	2,000

N			25,000	675

O			25,000	650
Total				$11,203

In the tables above:

•

Each share of non-cumulative Series A, Series B, Series C and Series D Preferred Stock issued and outstanding is redeemable at the firm’s option.

•

Each share of non-cumulative Series E and Series F Preferred Stock issued and outstanding is redeemable at the firm’s option, subject to certain covenant restrictions governing the firm’s ability to redeem the preferred stock without issuing common stock or other instruments with equity-like characteristics. See Note 16 for information about the replacement capital covenants applicable to the Series E and Series F Preferred Stock.

•

Each share of non-cumulative Series I Preferred Stock issued and outstanding is redeemable at the firm’s option beginning November 10, 2017.

•

Each share of non-cumulative Series J Preferred Stock issued and outstanding is redeemable at the firm’s option beginning May 10, 2023.

•

Each share of non-cumulative Series K Preferred Stock issued and outstanding is redeemable at the firm’s option beginning May 10, 2024.

•

Each share of non-cumulative Series L Preferred Stock issued and outstanding is redeemable at the firm’s option beginning May 10, 2019.

•

Each share of non-cumulative Series M Preferred Stock issued and outstanding is redeemable at the firm’s option beginning May 10, 2020.

•

In February 2016, Group Inc. issued 27,000 shares of Series N perpetual 6.30% Non-Cumulative Preferred Stock (Series N Preferred Stock). Each share of non-cumulative Series N Preferred Stock issued and outstanding is redeemable at the firm’s option beginning May 10, 2021.

•

In July 2016, Group Inc. issued 26,000 shares of Series O perpetual 5.30% Fixed-to-Floating Rate Non-Cumulative Preferred Stock (Series O Preferred Stock). Each share of non-cumulative Series O Preferred Stock issued and outstanding is redeemable at the firm’s option beginning November 10, 2026.

•

All shares have a par value of $0.01 per share and, where applicable, each share is represented by the specified number of depositary shares.

•

The redemption price per share for Series A through F Preferred Stock is the liquidation preference plus declared and unpaid dividends. The redemption price per share for Series I through O Preferred Stock is the liquidation preference plus accrued and unpaid dividends.

Prior to redeeming preferred stock, the firm must receive confirmation that the Federal Reserve Board does not object to such capital actions. All series of preferred stock are pari passu and have a preference over the firm’s common stock on liquidation. Dividends on each series of preferred stock, excluding Series L, Series M and Series O Preferred Stock, if declared, are payable quarterly in arrears. Dividends on Series L, Series M and Series O Preferred Stock, if declared, are payable semi-annually in arrears from the issuance date to, but excluding, May 10, 2019, May 10, 2020 and November 10, 2026, respectively, and quarterly thereafter. The firm’s ability to declare or pay dividends on, or purchase, redeem or otherwise acquire, its common stock is subject to certain restrictions in the event that the firm fails to pay or set aside full dividends on the preferred stock for the latest completed dividend period.

During the nine months ended September 2016, the firm delivered a par amount of $1.32 billion (fair value of $1.04 billion) of APEX to the APEX Trusts in exchange for 9,833 shares of Series E Preferred Stock and 3,385 shares of Series F Preferred Stock for a total redemption value of $1.32 billion (net carrying value of $1.31 billion). Following the exchange, shares of Series E and Series F Preferred Stock were cancelled. The difference between the fair value of the APEX and the net carrying value of the preferred stock at the time of cancellation was $105 million and $266 million for the three and nine months ended September 2016, respectively, and was recorded in “Preferred stock dividends,” along with preferred dividends declared on the firm’s preferred stock. See Note 16 for further information about APEX.

The table below presents the dividend rates of the firm’s perpetual preferred stock as of September 2016.


Series		Dividend Rate
A		3 month LIBOR + 0.75%, with floor of 3.75% per annum

B		6.20% per annum

C		3 month LIBOR + 0.75%, with floor of 4.00% per annum

D		3 month LIBOR + 0.67%, with floor of 4.00% per annum

E		3 month LIBOR + 0.77%, with floor of 4.00% per annum

F		3 month LIBOR + 0.77%, with floor of 4.00% per annum

I		5.95% per annum

J		5.50% per annum to, but excluding, May 10, 2023; 3 month LIBOR + 3.64% per annum thereafter

K		6.375% per annum to, but excluding, May 10, 2024; 3 month LIBOR + 3.55% per annum thereafter

L		5.70% per annum to, but excluding, May 10, 2019; 3 month LIBOR + 3.884% per annum thereafter

M		5.375% per annum to, but excluding, May 10, 2020; 3 month LIBOR + 3.922% per annum thereafter

N		6.30% per annum

O		5.30% per annum to, but excluding, November 10, 2026 3 month LIBOR + 3.834% per annum thereafter

The tables below present preferred dividends declared on the firm’s preferred stock.


	Three Months Ended September
	2016			2015
Series		*per share*	*$ in millions*		per share	$ in millions
A		$ 239.58	$ 7		$ 236.98	$ 7

B		387.50	12		387.50	12

C		255.56	2		252.78	2

D		255.56	14		252.78	14

E		1,022.22	12		1,022.22	19

F		1,022.22	3		1,022.22	5

I		371.88	13		371.88	12

J		343.75	14		343.75	14

K		398.44	11		398.44	11

L		—	—		—	—

M		—	—		—	—

N		393.75	11		—	—
Total			$ 99			$ 96
	Nine Months Ended September
	2016			2015
Series		*per share*	*$ in millions*		per share	$ in millions
A		$ 713.54	$ 21		$ 710.94	$ 21

B		1,162.50	37		1,162.50	37

C		761.12	6		758.34	6

D		761.12	41		758.34	41

E		3,055.55	43		3,044.44	54

F		3,055.55	11		3,044.44	15

I		1,115.64	38		1,115.64	38

J		1,031.25	42		1,031.25	42

K		1,195.32	33		1,195.32	33

L		712.50	37		712.50	37

M		671.88	54		—	—

N		730.63	20		—	—
Total			$383			$324

In the tables above, the total preferred dividend amounts for Series E and Series F Preferred Stock for the three and nine months ended September 2016 include prorated dividends of $866.67 per share related to 4,861 shares of Series E Preferred Stock and 1,639 shares of Series F Preferred Stock, which were cancelled during the three months ended September 2016.

Accumulated Other Comprehensive Loss

The table below presents accumulated other comprehensive loss, net of tax, by type. In the table below, the beginning balance of accumulated other comprehensive loss for the current period has been adjusted to reflect the impact of reclassifying the cumulative debt valuation adjustment, net of tax, from retained earnings to accumulated other comprehensive loss. See Note 3 for further information about the adoption of ASU No. 2016-01.


$ in millions	Balance, beginning of year		Other comprehensive income/(loss) adjustments, net of tax		Balance, end of period
As of September 2016
Currency translation	$(587	)	$ (58	)	$(645	)

Debt valuation adjustment	305		(75	)	230

Pension and postretirement liabilities	(131	)	(36	)	(167	)
Accumulated other comprehensive loss, net of tax	$(413	)	$(169	)	$(582	)
As of December 2015
Currency translation	$(473	)	$(114	)	$(587	)

Pension and postretirement liabilities	(270	)	139		(131	)
Accumulated other comprehensive income/(loss), net of tax	$(743	)	$ 25		$(718	)