Shareowners' Equity and Noncontrolling Interest

9 Months Ended

Sep. 30, 2016

Stockholders' Equity Note [Abstract]

Shareowners' Equity and Noncontrolling Interest [Text Block]

Shareowners' Equity and Noncontrolling Interest

A summary of the changes in shareowners' equity and noncontrolling interest comprising total equity for the quarters and nine months ended September 30, 2016 and 2015 is provided below:

	Quarter Ended September 30,
	2016									2015
(Dollars in millions)	Share-owners' Equity			Non-controlling Interest			Total Equity			Share-owners' Equity			Non-controlling Interest			Total Equity
Equity, beginning of period	$	29,090		$	1,558		$	30,648		$	30,377		$	1,561		$	31,938
Comprehensive income for the period:
Net income	1,480			91			1,571			1,362			99			1,461
Total other comprehensive (loss) income	(245		)	5			(240		)	(811		)	(23		)	(834		)
Total comprehensive income for the period	1,235			96			1,331			551			76			627
Common Stock issued - equity unit remarketing	—						—			1,100						1,100
Common Stock issued under employee plans	54						54			65						65
Common Stock repurchased	(649		)				(649		)	(1,000		)				(1,000		)
Dividends on Common Stock	(526		)				(526		)	(547		)				(547		)
Dividends on ESOP Common Stock	(19		)				(19		)	(19		)				(19		)
Dividends attributable to noncontrolling interest				(129		)	(129		)				(113		)	(113		)
Sale of subsidiary shares from noncontrolling interest	2			22			24			1			—			1
Acquisition of noncontrolling interest				29			29						—			—
Other	—			1			1			(3		)	2			(1		)
Equity, end of period	$	29,187		$	1,577		$	30,764		$	30,525		$	1,526		$	32,051

	Nine Months Ended September 30,
	2016									2015
(Dollars in millions)	Share-owners' Equity			Non-controlling Interest			Total Equity			Share-owners' Equity			Non-controlling Interest			Total Equity
Equity, beginning of period	$	27,358		$	1,486		$	28,844		$	31,213		$	1,351		$	32,564
Comprehensive income for the period:
Net income	4,042			271			4,313			4,330			281			4,611
Total other comprehensive (loss) income	(110		)	16			(94		)	(727		)	(63		)	(790		)
Total comprehensive income for the period	3,932			287			4,219			3,603			218			3,821
Common Stock issued - equity unit remarketing	—						—			1,100						1,100
Common Stock issued under employee plans	200						200			302						302
Common Stock repurchased	(685		)				(685		)	(4,000		)				(4,000		)
Dividends on Common Stock	(1,561		)				(1,561		)	(1,643		)				(1,643		)
Dividends on ESOP Common Stock	(56		)				(56		)	(56		)				(56		)
Dividends attributable to noncontrolling interest				(270		)	(270		)				(229		)	(229		)
(Purchase) sale of subsidiary shares from noncontrolling interest	(4		)	21			17			12			10			22
Acquisition of noncontrolling interest				63			63						173			173
Disposition of noncontrolling interest				—			—						(3		)	(3		)
Other	3			(10		)	(7		)	(6		)	6			—
Equity, end of period	$	29,187		$	1,577		$	30,764		$	30,525		$	1,526		$	32,051

On March 13, 2015, we entered into accelerated share repurchase (ASR) agreements to repurchase an aggregate of $2.65 billion of our common stock. Under the terms of the ASR agreements, we made the aggregate payments and received an initial delivery of 18.6 million shares of common stock, representing approximately 85% of the shares expected to be repurchased. On July 31, 2015, the shares associated with the remaining portion of the aggregate purchase were settled upon final delivery to us of approximately 4.2 million additional shares of common stock. Including the remaining shares settled on July 31, 2015, the final price under the ASR was $116.11 per share.

On August 3, 2015, we received approximately $1.1 billion from the proceeds of the previously disclosed remarketing of our 1.550% junior subordinated notes, which were originally issued as part of our equity units on June 18, 2012, and issued approximately 11.3 million shares of common stock to settle the purchase obligation of the holders of the equity units under the purchase contract entered into at the time of the original issuance of the equity units.

On November 11, 2015, we entered into ASR agreements to repurchase an aggregate of $6 billion of our common stock utilizing the net after-tax proceeds from the sale of Sikorsky. The ASR agreements provide 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 agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements. Under the terms of the ASR agreements, we made the aggregate payments and received an initial delivery of approximately 51.9 million shares of our common stock, representing approximately 85% of the shares expected to be repurchased. The shares associated with the remaining portion of the aggregate purchase price have been settled over six tranches. On January 19, 2016, the shares associated with the remaining portion of the first tranche of the aggregate purchase were settled upon final delivery to us of approximately 2.1 million shares of common stock. On September 14 and 15, 2016, the shares associated with the remaining portion of the remaining five tranches of the aggregate purchase were settled upon final delivery to us of approximately 8 million additional shares of common stock. Including the remaining shares associated with the six tranches settled in 2016, the final price under the November 11, 2015 ASR was $96.74 per share.

A summary of the changes in each component of accumulated other comprehensive (loss) income, net of tax for the quarters and nine months ended September 30, 2016 and 2015 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 September 30, 2016
Balance at June 30, 2016	$	(2,685	)	$	(4,999	)	$	317		$	(117	)	$	(7,484	)
Other comprehensive (loss) income before reclassifications, net	(364		)	4			30			(5		)	(335		)
Amounts reclassified, pre-tax	(1		)	127			(20		)	32			138
Tax (benefit) expense reclassified	—			(47		)	8			(9		)	(48		)
Balance at September 30, 2016	$	(3,050	)	$	(4,915	)	$	335		$	(99	)	$	(7,729	)
Nine Months Ended September 30, 2016
Balance at December 31, 2015	$	(2,438	)	$	(5,135	)	$	293		$	(339	)	$	(7,619	)
Other comprehensive (loss) income before reclassifications, net	(612		)	(21		)	87			138			(408		)
Amounts reclassified, pre-tax	—			381			(72		)	139			448
Tax (benefit) expense reclassified	—			(140		)	27			(37		)	(150		)
Balance at September 30, 2016	$	(3,050	)	$	(4,915	)	$	335		$	(99	)	$	(7,729	)

(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 September 30, 2015
Balance at June 30, 2015	$	(1,278	)	$	(5,405	)	$	330		$	(224	)	$	(6,577	)
Other comprehensive income (loss) before reclassifications, net	(913		)	73			(48		)	(111		)	(999		)
Amounts reclassified, pre-tax	—			216			(2		)	64			278
Tax (benefit) expense reclassified	—			(81		)	7			(16		)	(90		)
Balance at September 30, 2015	$	(2,191	)	$	(5,197	)	$	287		$	(287	)	$	(7,388	)
Nine Months Ended September 30, 2015
Balance at December 31, 2014	$	(1,051	)	$	(5,709	)	$	308		$	(209	)	$	(6,661	)
Other comprehensive (loss) income before reclassifications, net	(1,139		)	104			10			(194		)	(1,219		)
Amounts reclassified, pre-tax	(1		)	651			(56		)	164			758
Tax (benefit) expense reclassified	—			(243		)	25			(48		)	(266		)
Balance at September 30, 2015	$	(2,191	)	$	(5,197	)	$	287		$	(287	)	$	(7,388	)

Amounts reclassified that relate 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 7 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. The increase in the value of redeemable noncontrolling interest in our Condensed Consolidated Balance Sheet as of September 30, 2016 is primarily related to the acquisition of a majority interest in an Italian heating products and services company by UTC Climate, Controls & Security during the quarter ended June 30, 2016.

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. For the quarter and nine months ended September 30, 2016, the pro-forma impact on Net income attributable to common shareowners would have been an increase of $2 million and a decrease of $4 million, respectively, had the changes been recorded through net income. For the quarter and nine months ended September 30, 2015 the pro-forma impact on Net income attributable to common shareowners would have been an increase of $1 million and $12 million, respectively, had the changes been recorded through net income.