Shareowners' Equity and Noncontrolling Interest

A summary of the changes in shareowners' equity and noncontrolling interest comprising total equity for the quarters and six months ended June 30, 2015 and 2014 is provided below:



	Quarter Ended June 30,
	2015									2014
(Dollars in millions)	Share-owners' Equity			Non-controlling Interest			Total Equity			Share-owners' Equity			Non-controlling Interest			Total Equity
Equity, beginning of period	$	28,650		$	1,517		$	30,167		$	32,317		$	1,378		$	33,695
Comprehensive income for the period:
Net income	1,542			110			1,652			1,680			110			1,790
Total other comprehensive income	634			—			634			538			—			538
Total comprehensive income for the period	2,176			110			2,286			2,218			110			2,328
Common Stock issued under employee plans	112			—			112			125			—			125
Common Stock repurchased	—			—			—			(335		)	—			(335		)
Dividends on Common Stock	(543		)	—			(543		)	(512		)	—			(512		)
Dividends on ESOP Common Stock	(18		)	—			(18		)	(18		)	—			(18		)
Dividends attributable to noncontrolling interest	—			(61		)	(61		)	—			(44		)	(44		)
Purchase of subsidiary shares from noncontrolling interest	—			(4		)	(4		)	(10		)	(30		)	(40		)
Acquisition of noncontrolling interest	—			1			1			—			—			—
Disposition of noncontrolling interest	—			—			—			—			3			3
Redeemable noncontrolling interest	1			(1		)	—			—			(9		)	(9		)
Other	(1		)	(1		)	(2		)	—			—			—
Equity, end of period	$	30,377		$	1,561		$	31,938		$	33,785		$	1,408		$	35,193



	Six Months Ended June 30,
	2015									2014
(Dollars in millions)	Share-owners' Equity			Non-controlling Interest			Total Equity			Share-owners' Equity			Non-controlling Interest			Total Equity
Equity, beginning of period	$	31,213		$	1,351		$	32,564		$	31,866		$	1,353		$	33,219
Comprehensive income for the period:
Net income	2,968			182			3,150			2,893			203			3,096
Total other comprehensive (loss) income	84			(40		)	44			477			(7		)	470
Total comprehensive income for the period	3,052			142			3,194			3,370			196			3,566
Common Stock issued under employee plans	237			—			237			290			—			290
Common Stock repurchased	(3,000		)	—			(3,000		)	(670		)	—			(670		)
Dividends on Common Stock	(1,096		)	—			(1,096		)	(1,026		)	—			(1,026		)
Dividends on ESOP Common Stock	(37		)	—			(37		)	(36		)	—			(36		)
Dividends attributable to noncontrolling interest	—			(116		)	(116		)	—			(100		)	(100		)
Sale (purchase) of subsidiary shares from noncontrolling interest	11			10			21			(9		)	(6		)	(15		)
Acquisition of noncontrolling interest	—			173			173			—			—			—
Disposition of noncontrolling interest	—			(3		)	(3		)	—			3			3
Redeemable noncontrolling interest	(3		)	5			2			—			(38		)	(38		)
Other	—			(1		)	(1		)	—			—			—
Equity, end of period	$	30,377		$	1,561		$	31,938		$	33,785		$	1,408		$	35,193

On March 13, 2015, we entered into accelerated share repurchase (ASR) agreements with each of Goldman, Sachs & Co. (Goldman Sachs) and Morgan Stanley & Co. LLC (Morgan Stanley) to repurchase shares of our common stock for an aggregate purchase price of $2.65 billion. Each ASR agreement provides for the repurchase of our common stock based on the average of the daily volume-weighted average prices of our common stock during the term of such ASR agreement, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreement.

On March 13, 2015, we paid the aggregate purchase price and received an initial delivery of 18.6 million shares of common stock at a price of $121.24 per share, representing approximately 85% of the shares expected to be repurchased. The aggregate purchase price was recorded as a reduction to shareowners’ equity, consisting of a $2.25 billion increase in treasury stock and a $398 million decrease in additional paid-in capital. Upon final settlement of the ASR agreements, under certain circumstances, each of Goldman Sachs and Morgan Stanley may be required to deliver additional shares of common stock, or, under certain circumstances, we may be required to deliver shares of common stock or to make a cash payment, at our election, to Goldman Sachs and Morgan Stanley. The final settlement of the transactions under the ASR agreements is expected to occur no later than the fourth quarter of 2015 and may be accelerated at the option of Goldman Sachs or Morgan Stanley, as the case may be.

Each of the ASR agreements contains customary terms for these types of transactions, including the mechanisms to determine the number of shares or the amount of cash that will be delivered at settlement, the required timing of delivery upon settlement, the specific circumstances under which adjustments may be made to the repurchase transactions, the specific circumstances under which the repurchase transactions may be canceled prior to the scheduled maturity and various acknowledgments, representations and warranties made by the Company and Goldman Sachs or Morgan Stanley, as applicable, to one another.

A summary of the changes in each component of accumulated other comprehensive income (loss), net of tax for the quarters and six months ended June 30, 2015 and 2014 is provided below:



(Dollars in millions)	Foreign Currency Translation			Defined Benefit Pension and Post- retirement Plans			Unrealized Gains (Losses) on Available-for-Sale Securities			Unrealized Hedging (Losses) Gains			Accumulated Other Comprehensive (Loss) Income
Quarter Ended June 30, 2015
Balance at March 31, 2015	$	(1,718	)	$	(5,537	)	$	344		$	(300	)	$	(7,211	)
Other comprehensive income (loss) before reclassifications, net	439			(4		)	4			49			488
Amounts reclassified, pretax	1			218			(26		)	43			236
Tax (benefit) expense reclassified	—			(82		)	8			(16		)	(90		)
Balance at June 30, 2015	$	(1,278	)	$	(5,405	)	$	330		$	(224	)	$	(6,577	)

Six Months Ended June 30, 2015
Balance at December 31, 2014	$	(1,051	)	$	(5,709	)	$	308		$	(209	)	$	(6,661	)
Other comprehensive (loss) income before reclassifications, net	(226		)	31			58			(83		)	(220		)
Amounts reclassified, pretax	(1		)	435			(54		)	100			480
Tax (benefit) expense reclassified	—			(162		)	18			(32		)	(176		)
Balance at June 30, 2015	$	(1,278	)	$	(5,405	)	$	330		$	(224	)	$	(6,577	)



(Dollars in millions)	Foreign Currency Translation		Defined Benefit Pension and Post- retirement Plans			Unrealized Gains (Losses) on Available-for-Sale Securities			Unrealized Hedging (Losses) Gains			Accumulated Other Comprehensive (Loss) Income
Quarter Ended June 30, 2014
Balance at March 31, 2014	$	71	$	(3,184	)	$	301		$	(129	)	$	(2,941	)
Other comprehensive income (loss) before reclassifications, net	424		(12		)	(28		)	80			464
Amounts reclassified, pretax	—		104			(6		)	13			111
Tax (benefit) expense reclassified	—		(35		)	5			(7		)	(37		)
Balance at June 30, 2014	$	495	$	(3,127	)	$	272		$	(43	)	$	(2,403	)

Six Months Ended June 30, 2014
Balance at December 31, 2013	$	170	$	(3,267	)	$	296		$	(79	)	$	(2,880	)
Other comprehensive income (loss) before reclassifications, net	322		1			(6		)	15			332
Amounts reclassified, pretax	3		208			(30		)	31			212
Tax (benefit) expense reclassified	—		(69		)	12			(10		)	(67		)
Balance at June 30, 2014	$	495	$	(3,127	)	$	272		$	(43	)	$	(2,403	)

Amounts reclassified related to our defined benefit pension and postretirement plans include amortization of prior service costs and transition obligations, and actuarial net losses recognized during each period presented. These costs are recorded as components of net periodic pension cost for each period presented (see Note 6 for additional details).

All noncontrolling interests with redemption features, such as put options, that are not solely within our control (redeemable noncontrolling interests) are reported in the mezzanine section of the Condensed Consolidated Balance Sheet, between liabilities and equity, at the greater of redemption value or initial carrying value. A summary of the changes in redeemable noncontrolling interest recorded in the mezzanine section of the Condensed Consolidated Balance Sheet for the quarters and six months ended June 30, 2015 and 2014 is provided below:



	Quarter Ended June 30,					Six Months Ended June 30,
(Dollars in millions)	2015			2014		2015			2014
Redeemable noncontrolling interest, beginning of period	$	135		$	137	$	140		$	111
Net income	3			1		4			7
Foreign currency translation	(2		)	2		(9		)	—
Dividends attributable to noncontrolling interest	—			—		(3		)	(3		)
Purchase of subsidiary shares from noncontrolling interest	(1		)	—		(1		)	—
Redeemable noncontrolling interest fair value adjustment	(1		)	—		3			—
Redeemable noncontrolling interest reclassification to noncontrolling interest	—			6		—			31
Redeemable noncontrolling interest, end of period	$	134		$	146	$	134		$	146

Changes in noncontrolling interests that do not result in a change of control and where there is a difference between fair value and carrying value are accounted for as equity transactions. A summary of these changes in ownership interests in subsidiaries and the pro-forma effect on Net income attributable to common shareowners had they been recorded through net income for the quarters and six months ended June 30, 2015 and 2014 is provided below:



	Quarter Ended June 30,					Six Months Ended June 30,
(Dollars in millions)	2015		2014			2015			2014
Net income attributable to common shareowners	$	1,542	$	1,680		$	2,968		$	2,893
Transfers to noncontrolling interests:
Increase in common stock for sale of subsidiary shares	—		—			23			4
Decrease in common stock for purchase of subsidiary shares	—		(10		)	(12		)	(13		)
Net income attributable to common shareowners after transfers to noncontrolling interests	$	1,542	$	1,670		$	2,979		$	2,884