Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Derivative Financial Instruments

Amounts related to cumulative basis adjustments for fair value hedges

($ in millions)
At December 31:	2021		2020
Short-term debt
Carrying amount of the hedged item	$	(227)	$	(1,302)
Cumulative hedging adjustments included in the carrying amount—assets/(liabilities)		(2)		(2)
Long-term debt
Carrying amount of the hedged item		(508)		(2,097)
Cumulative hedging adjustments included in the carrying amount—assets/(liabilities)*		(309)		(424)

* Includes ($302) million and ($353) million of hedging adjustments on discontinued hedging relationships at December 31, 2021 and 2020, respectively.

Effect of derivative instruments in the consolidated income statement

($ in millions)
									Gains/(Losses) of
	Total								Total Hedge Activity
For the year ended December 31:	2021		2020				2019		2021		2020		2019
Cost of services	$	19,147	$	17,689		$	19,009		$	43	$	23	$	68
Cost of sales		6,184		6,048	*		6,467	*		(16)		2		51
Cost of financing		534		577	*		704	*		1		12		(42)
SG&A expense		18,745		20,561			18,724			176		141		267
Other (income) and expense		873		802			(1,012)			(205)		101		(15)
Interest expense		1,155		1,288			1,344			3		35		(93)

* Reclassifed to conform to 2021 presentation.

($ in millions)
	Gain/(Loss) Recognized in Consolidated Income Statement
	Consolidated	Recognized on						Attributable to Risk
	Income Statement	Derivatives						Being Hedged (2)
For the year ended December 31:	Line Item	2021		2020		2019		2021		2020		2019
Derivative instruments in fair value hedges (1)
Interest rate contracts	Cost of financing	$	(1)	$	20	$	44	$	18	$	4	$	(32)
	Interest expense		(2)		58		98		53		11		(71)
Derivative instruments not designated as hedging instruments
Foreign exchange contracts	Other (income) and expense		(48)		1		(53)		N/A		N/A		N/A
Equity contracts	SG&A expense		201		142		214		N/A		N/A		N/A
Total		$	150	$	220	$	302	$	71	$	14	$	(103)

($ in millions)
	Gain/(Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income
							Consolidated	Reclassified						Amounts Excluded from
For the year ended	Recognized in OCI						Income Statement	from AOCI						Effectiveness Testing (3)
December 31:	2021		2020		2019		Line Item	2021		2020		2019		2021		2020		2019
Derivative instruments in cash flow hedges
Interest rate contracts	$	—	$	—	$	(168)	Cost of financing	$	(4)	$	(5)	$	(3)	$	—	$	—	$	—
							Interest expense		(13)		(13)		(8)		—		—		—
Foreign exchange contracts		344		(349)		(521)	Cost of services		43		23		68		—		—		—
							Cost of sales		(16)		2		51		—		—		—
							Cost of financing		(18)		(23)		(86)		—		—		—
							SG&A expense		(24)		0		53		—		—		—
							Other (income) and expense		(157)		101		39		—		—		—
							Interest expense		(52)		(65)		(190)		—		—		—
Instruments in net investment hedges (4)
Foreign exchange contracts		1,644		(2,127)		(95)	Cost of financing		—		—		—		6		16		35
							Interest expense		—		—		—		17		45		77
Total	$	1,989	$	(2,477)	$	(784)		$	(243)	$	21	$	(75)	$	23	$	60	$	112

⁽¹⁾ The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts.

⁽²⁾ The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period.

⁽³⁾ The company’s policy is to recognize all fair value changes in amounts excluded from effectiveness testing in net income each period.

⁽⁴⁾ Instruments in net investment hedges include derivative and non-derivative instruments with the amounts recognized in OCI providing an offset to the translation of foreign subsidiaries.

N/A–Not applicable