Equity Activity:

9 Months Ended

Sep. 30, 2013

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, 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," on
pages 32 to 34 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, 2012:				Amount		Benefit		Amount
Other comprehensive income/(loss):
	Foreign currency translation adjustments		$	501	$	56	$	557
	Net changes related to available-for-sale securities:
		Unrealized gains/(losses) arising during the period	$	11	$	(4)	$	6
		Reclassification of (gains)/losses to other (income) and expense		(27)		11		(17)
		Subsequent changes in previously impaired securities arising during
		the period		(7)		3		(4)
	Total net changes related to available-for-sale securities		$	(24)	$	9	$	(15)
	Unrealized gains/(losses) on cash flow hedges:
		Unrealized gains/(losses) arising during the period	$	(54)	$	10	$	(43)
		Reclassification of (gains)/losses to:
		Cost of sales		(6)		(1)		(7)
		SG&A expense		(5)		1		(4)
		Other (income) and expense		(103)		40		(63)
		Interest expense		2		(1)		1
	Total unrealized gains/(losses) on cash flow hedges		$	(165)	$	50	$	(116)
	Retirement-related benefit plans(1):
		Prior service costs/(credits)	$	0	$	0	$	0
		Net (losses)/gains arising during the period		1		(1)		0
		Curtailments and settlements		(2)		1		(1)
		Amortization of prior service (credits)/costs		(37)		15		(23)
		Amortization of net (gains)/losses		613		(238)		375
	Total retirement-related benefit plans		$	575	$	(224)	$	351
Other comprehensive income/(loss)			$	887	$	(109)	$	778
(1) These AOCI components are included in the computation of net periodic pension cost. (See note 8, "Retirement-Related Benefits," on
pages 32 to 34 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," on
pages 32 to 34 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, 2012:				Amount		Benefit		Amount
Other comprehensive income/(loss):
	Foreign currency translation adjustments		$	164	$	9	$	172
	Net changes related to available-for-sale securities:
		Unrealized gains/(losses) arising during the period	$	13	$	(5)	$	8
		Reclassification of (gains)/losses to other (income) and expense		(43)		17		(26)
		Subsequent changes in previously impaired securities arising during
		the period		20		(8)		12
	Total net changes related to available-for-sale securities		$	(10)	$	4	$	(6)
	Unrealized gains/(losses) on cash flow hedges:
		Unrealized gains/(losses) arising during the period	$	65	$	(35)	$	31
		Reclassification of (gains)/losses to:
		Cost of sales		(22)		(1)		(23)
		SG&A expense		(21)		5		(16)
		Other (income) and expense		(209)		81		(128)
		Interest expense		6		(2)		4
	Total unrealized gains/(losses) on cash flow hedges		$	(181)	$	48	$	(133)
	Retirement-related benefit plans(1):
		Prior service costs/(credits)	$	0	$	0	$	0
		Net (losses)/gains arising during the period		66		(24)		41
		Curtailments and settlements		(1)		1		(1)
		Amortization of prior service (credits)/costs		(112)		41		(70)
		Amortization of net (gains)/losses		1,846		(684)		1,161
	Total retirement-related benefit plans		$	1,799	$	(667)	$	1,132
Other comprehensive income/(loss)			$	1,771	$	(606)	$	1,165
(1) These AOCI components are included in the computation of net periodic pension cost. (See note 8, "Retirement-Related Benefits," on
pages 32 to 34 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, 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)
						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, 2012		$	71	$	1,767	$	(23,737)	$	13	$	(21,885)
Other comprehensive income before
	reclassifications		31		172		41		20		264
Amount reclassified from accumulated
	other comprehensive income		(164)		0		1,090		(26)		900
Total change for the period			(133)		172		1,132		(6)		1,165
September 30, 2012		$	(61)	$	1,939	$	(22,606)	$	7	$	(20,720)
* Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.