Equity Activity (Tables)

3 Months Ended

Mar. 31, 2020

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 March 31, 2020:	Amount		Benefit		Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	(919)	$	(122)	$	(1,041)
Net changes related to available-for-sale securities:
Unrealized gains/(losses) arising during the period	$	0	$	0	$	0
Reclassification of (gains)/losses to other (income) and expense		—		—		—
Total net changes related to available-for-sale securities	$	0	$	0	$	0
Unrealized gains/(losses) on cash flow hedges:
Unrealized gains/(losses) arising during the period	$	(180)	$	45	$	(135)
Reclassification of (gains)/losses to:
Cost of services		(10)		2		(7)
Cost of sales		(9)		2		(6)
Cost of financing		8		(2)		6
SG&A expense		(10)		2		(7)
Other (income) and expense		89		(22)		67
Interest expense		22		(5)		16
Total unrealized gains/(losses) on cash flow hedges	$	(90)	$	23	$	(67)
Retirement-related benefit plans (1):
Prior service costs/(credits)	$	(4)	$	1	$	(3)
Net (losses)/gains arising during the period		8		(2)		6
Curtailments and settlements		8		(3)		6
Amortization of prior service (credits)/costs		1		1		1
Amortization of net (gains)/losses		570		(157)		412
Total retirement-related benefit plans	$	582	$	(160)	$	422
Other comprehensive income/(loss)	$	(427)	$	(260)	$	(686)

(1) These accumulated other comprehensive income/ (AOCI) components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” 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 March 31, 2019:	Amount		Benefit		Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	171	$	0	$	172
Net changes related to available-for-sale securities:
Unrealized gains/(losses) arising during the period	$	(1)	$	0	$	(1)
Reclassification of (gains)/losses to other (income) and expense		—		—		—
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	$	(352)	$	84	$	(268)
Reclassification of (gains)/losses to:
Cost of services		(10)		3		(7)
Cost of sales		(18)		5		(13)
Cost of financing		29		(7)		22
SG&A expense		(22)		6		(16)
Other (income) and expense		87		(22)		65
Interest expense		33		(8)		24
Total unrealized gains/(losses) on cash flow hedges	$	(254)	$	61	$	(193)
Retirement-related benefit plans (1):
Net (losses)/gains arising during the period	$	(4)	$	1	$	(2)
Curtailments and settlements		1		0		1
Amortization of prior service (credits)/costs		(3)		1		(2)
Amortization of net (gains)/losses		464		(130)		334
Total retirement-related benefit plans	$	458	$	(128)	$	330
Other comprehensive income/(loss)	$	375	$	(67)	$	308

(1) These AOCI components are included in the computation of net periodic pension cost. Refer to note 17, “Retirement-Related Benefits,” 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, 2020	$	(179)	$	(3,700)	$	(24,718)	$	0	$	(28,597)
Other comprehensive income before reclassifications		(135)		(1,041)		3		0		(1,174)
Amount reclassified from accumulated other comprehensive income		68		—		419		—		488
Total change for the period	$	(67)	$	(1,041)	$	422	$	0	$	(686)
March 31, 2020	$	(246)	$	(4,741)	$	(24,296)	$	0	$	(29,283)

* Foreign currency translation adjustments are presented gross except for any associated hedges which are presented 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, 2019	$	284	$	(3,690)	$	(26,083)	$	0	$	(29,490)
Other comprehensive income before reclassifications		(268)		172		(2)		(1)		(99)
Amount reclassified from accumulated other comprehensive income		75		—		333		—		407
Total change for the period	$	(193)	$	172	$	330	$	(1)	$	308
March 31, 2019	$	90	$	(3,519)	$	(25,753)	$	(1)	$	(29,182)

* Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.