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Total Equity and Other Comprehensive Income
 9 Months Ended
Sep. 30, 2018
Other Comprehensive Income [Abstract]  
Total Equity and Other Comprehensive Income Disclosure
NOTE 11 TOTAL EQUITY AND OTHER COMPREHENSIVE INCOME

Activity in total equity for the nine months ended September 30, 2018 and 2017 follows:
Table 69: Rollforward of Total Equity
 
 
 
Shareholders’ Equity
 
  
  
 
In millions
Shares
Outstanding
Common
Stock

 
Common
Stock

Capital
Surplus -
Preferred
Stock

Capital
Surplus -
Common
Stock and
Other

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

 
Non-
controlling
Interests

Total Equity

 
Balance at January 1, 2017
485

 
$
2,709

$
3,977

$
12,674

$
31,670

$
(265
)
$
(5,066
)
 
$
1,155

$
46,854

 
Net income
 
 
 
 
 
3,258

 
 
 
39

3,297

 
Other comprehensive income (loss), net of tax
 
 
 
 
 
 
243

 
 
 
243

 
Cash dividends declared
 
 
 
 
 
 
 
 
 
 


 
Common ($1.85 per share)
 
 
 
 
 
(904
)
 
 
 
 
(904
)
 
Preferred
 
 
 
 
 
(181
)
 
 
 
 
(181
)
 
Preferred stock discount accretion
 
 
 
5

 
(5
)
 
 
 
 


 
Redemption of noncontrolling interests (a)
 
 
 
 
 
(19
)
 
 
 
(981
)
(1,000
)
 
Common stock activity (b)
 
 
1

 
9

 
 
 
 
 
10

 
Treasury stock activity
(9
)
 
 
 
(274
)
 
 
(1,396
)
 
 
(1,670
)
 
Other
 
 
 
 
(48
)
 
 
 
 
(149
)
(197
)
 
Balance at September 30, 2017 (c)
476

 
$
2,710

$
3,982

$
12,361

$
33,819

$
(22
)
$
(6,462
)
 
$
64

$
46,452

 
Balance at December 31, 2017
473

 
$
2,710

$
3,985

$
12,389

$
35,481

$
(148
)
$
(6,904
)
 
$
72

$
47,585

 
Cumulative effect of ASU adoptions (d)
 
 
 
 
 
(22
)
6

 
 
 
(16
)
 
Balance at January 1, 2018
473

 
$
2,710

$
3,985

$
12,389

$
35,459

$
(142
)
$
(6,904
)
 
$
72

$
47,569

 
Net income
 
 
 
 
 
3,964

 
 
 
31

3,995

 
Other comprehensive income (loss), net of tax
 
 
 
 
 
 
(1,118
)
 
 
 
(1,118
)
 
Cash dividends declared
 
 
 
 
 
 
 
 
 
 
 
 
Common ($2.45 per share)
 
 
 
 
 
(1,159
)
 
 
 
 
(1,159
)
 
Preferred
 
 
 
 
 
(181
)
 
 
 
 
(181
)
 
Preferred stock discount accretion
 
 
 
3

 
(3
)
 
 
 
 
 
 
Common stock activity (b)
 
 
 
 
10

 
 
 
 
 
10

 
Treasury stock activity
(11
)
 
 
 
(31
)
 
 
(1,867
)
 
 
(1,898
)
 
Other
 
 
 
(6
)
(51
)
 
 
 
 
(59
)
(116
)
 
Balance at September 30, 2018 (c)
462

 
$
2,710

$
3,982

$
12,317

$
38,080

$
(1,260
)
$
(8,771
)
 
$
44

$
47,102

 
(a)
See Note 15 Equity in our 2017 Form 10-K for additional information on the redemption of Perpetual Trust Securities.
(b)
Common stock activity totaled less than .5 million shares issued.
(c)
The par value of our preferred stock outstanding was less than $.5 million at each date and, therefore, is excluded from this presentation.
(d)
Represents the cumulative effect of adopting ASU 2014-09, ASU 2016-01, ASU 2017-12 and ASU 2018-02. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in our First Quarter 2018 Form 10-Q for additional detail on the adoption of these ASUs.

Warrants
  
We had 2.0 million and 3.5 million warrants outstanding at September 30, 2018 and December 31, 2017, respectively. As of September 30, 2018, each warrant entitles the holder to purchase one share of PNC common stock at an exercise price of $67.016 per share. In accordance with the terms of the warrants, the warrants are exercised on a non-cash net basis with the warrant holder receiving PNC common shares determined based on the excess of the market price of PNC common stock on the exercise date over the exercise price of the warrant. The outstanding warrants will expire as of December 31, 2018 and are considered in the calculation of diluted earnings per common share in Note 10 Earnings Per Share in this Report.

On October 4, 2018, PNC declared a quarterly common stock dividend of $.95 per share to shareholders of record as of October 17, 2018. In accordance with the terms of the warrants, the declaration of a dividend in excess of $.66 per share may result in an adjustment to the warrant exercise price and to the warrant share number. As a result of this dividend, the warrant exercise price was reduced from $67.016 to $66.861 per share on October 17, 2018 and the warrant share number remained 1.00.
Other Comprehensive Income

Details of other comprehensive income (loss) are as follows:
Table 70: Other Comprehensive Income (Loss)
 
Three months ended
September 30
 
 
Nine months ended
September 30
 
In millions
2018

2017

 
 
2018

2017

 
Net unrealized gains (losses) on non-OTTI securities
 
 
 
 
 
 
 
Increase in net unrealized gains (losses) on non-OTTI securities
$
(323
)
$
68

 
 
$
(1,129
)
$
304

 
Less: Net gains (losses) realized as a yield adjustment reclassified to investment
    securities interest income
3

10

 
 
9

20

 
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
(2
)
(3
)
 
 
(13
)
3

 
Net increase (decrease), pre-tax
(324
)
61

 
 
(1,125
)
281

 
Effect of income taxes
73

(20
)
 
 
259

(103
)
 
Net increase (decrease), after-tax
(251
)
41

 
 
(866
)
178

 
Net unrealized gains (losses) on OTTI securities
 
 
 
 
 
 
 
Increase in net unrealized gains (losses) on OTTI securities
(1
)
66

 
 
16

165

 
Less: OTTI losses realized on securities reclassified to noninterest income
 


 
 


(1
)
 
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
 


 
 
 
2

 
Net increase (decrease), pre-tax
(1
)
66

 
 
16

164

 
Effect of income taxes
1

(22
)
 
 
(4
)
(60
)
 
Net increase (decrease), after-tax
—

44

 
 
12

104

 
Net unrealized gains (losses) on cash flow hedge derivatives
 
 
 
 
 
 
 
Increase in net unrealized gains (losses) on cash flow hedge derivatives
(62
)
(2
)
 
 
(317
)
15

 
Less: Net gains (losses) realized as a yield adjustment reclassified to loan interest income
6

38

 
 
43

128

 
Less: Net gains (losses) realized as a yield adjustment reclassified to investment
    securities interest income
2

5

 
 
9

16

 
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
1

2

 
 
8

5

 
Net increase (decrease), pre-tax
(71
)
(47
)
 
 
(377
)
(134
)
 
Effect of income taxes
17

17

 
 
87

49

 
Net increase (decrease), after-tax
(54
)
(30
)
 
 
(290
)
(85
)
 
Pension and other postretirement benefit plan adjustments
 
 
 
 
 
 
 
Net pension and other postretirement benefit activity
 


 
 
66

(38
)
 
Amortization of actuarial loss (gain) reclassified to other noninterest expense
1

12

 
 
3

36

 
Amortization of prior service cost (credit) reclassified to other noninterest expense
 
(1
)
 
 
1

(4
)
 
Net increase (decrease), pre-tax
1

11

 
 
70

(6
)
 
Effect of income taxes
 
(4
)
 
 
(16
)
2

 
Net increase (decrease), after-tax
1

7

 
 
54

(4
)
 
Other
 
 
 
 
 
 
 
PNC’s portion of BlackRock’s OCI
(22
)
4

 
 
(37
)
26

 
Net investment hedge derivatives
17

(26
)
 
 
47

(76
)
 
Foreign currency translation adjustments and other
(12
)
28

 
 
(35
)
82

 
Net increase (decrease), pre-tax
(17
)
6

 
 
(25
)
32

 
Effect of income taxes
1

8

 
 
(3
)
18

 
Net increase (decrease), after-tax
(16
)
14

 
 
(28
)
50

 
Total other comprehensive income (loss), pre-tax
(412
)
97

 
 
(1,441
)
337

 
Total other comprehensive income (loss), tax effect
92

(21
)
 
 
323

(94
)
 
Total other comprehensive income (loss), after-tax
$
(320
)
$
76

 
 
$
(1,118
)
$
243

 
Table 71: Accumulated Other Comprehensive Income (Loss) Components
 
In millions, after-tax
Net unrealized gains (losses) on non-OTTI securities

 
Net unrealized gains (losses) on OTTI securities

 
Net unrealized gains (losses) on cash flow hedge derivatives

 
Pension and other postretirement benefit plan adjustments

 
Other

 
Total

 
Balance at June 30, 2017
$
189

 
$
166

 
$
278

 
$
(564
)
 
$
(167
)
 
$
(98
)
 
Net activity
41

 
44

 
(30
)
 
7

 
14

 
76

 
Balance at September 30, 2017
$
230

 
$
210

 
$
248

 
$
(557
)
 
$
(153
)
 
$
(22
)
 
Balance at June 30, 2018
$
(494
)
 
$
227

 
$
(52
)
 
$
(489
)
 
$
(132
)
 
$
(940
)
 
Net activity
(251
)
 
 
 
(54
)
 
1

 
(16
)
 
(320
)
 
Balance at September 30, 2018
$
(745
)
 
$
227

 
$
(106
)
 
$
(488
)
 
$
(148
)
 
$
(1,260
)
 
Balance at December 31, 2016
$
52

 
$
106

 
$
333

 
$
(553
)
 
$
(203
)
 
$
(265
)
 
Net activity
178

 
104

 
(85
)
 
(4
)
 
50

 
243

 
Balance at September 30, 2017
$
230

 
$
210

 
$
248

 
$
(557
)
 
$
(153
)
 
$
(22
)
 
Balance at December 31, 2017
$
62

 
$
215

 
$
151

 
$
(446
)
 
$
(130
)
 
$
(148
)
 
Cumulative effect of adopting ASU 2018-02 (a)
59

 
 
 
33

 
(96
)
 
10

 
6

 
Balance at January 1, 2018
121

 
215

 
184

 
(542
)
 
(120
)
 
(142
)
 
Net activity
(866
)
 
12

 
(290
)
 
54

 
(28
)
 
(1,118
)
 
Balance at September 30, 2018
$
(745
)
 
$
227

 
$
(106
)
 
$
(488
)
 
$
(148
)
 
$
(1,260
)
 

(a)
Represents the cumulative impact of adopting ASU 2018-02 which permits the reclassification to retained earnings of the income tax effects stranded within AOCI. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in our First Quarter 2018 Form 10-Q for additional detail on this adoption.