These accumulated other comprehensive income (AOCI) components are included in the computation of net periodic pension cost and include the impact of a one-time, non-cash pension settlement charge of $5.9 billion ($4.4 billion net of tax) in the third quarter of 2022. Refer to note 18, “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 September 30, 2021:	Amount		Benefit		Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	(114)	$	(120)	$	(234)
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	$	109	$	(28)	$	82
Reclassification of (gains)/losses to:
Cost of services		(12)		3		(9)
Cost of sales		(1)		1		(1)
Cost of financing		6		(1)		4
SG&A expense		1		0		1
Other (income) and expense		22		(6)		17
Interest expense		16		(4)		12
Total unrealized gains/(losses) on cash flow hedges	$	141	$	(35)	$	106
*Retirement-related benefit plans:**
Prior service costs/(credits)	$	0	$	0	$	0
Net (losses)/gains arising during the period		1		0		1
Curtailments and settlements		13		(4)		9
Amortization of prior service (credits)/costs		3		0		3
Amortization of net (gains)/losses		638		(174)		464
Total retirement-related benefit plans	$	656	$	(178)	$	478
Other comprehensive income/(loss)	$	683	$	(333)	$	350

*	These AOCI components are included in the computation of net periodic pension cost. Refer to note 18, “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 nine months ended September 30, 2022:	Amount		Benefit		Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	799	$	(784)	$	14
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	$	449	$	(118)	$	332
Reclassification of (gains)/losses to:
Cost of services		(32)		8		(24)
Cost of sales		(71)		20		(50)
Cost of financing		19		(5)		14
SG&A expense		(28)		8		(20)
Other (income) and expense		51		(13)		38
Interest expense		64		(16)		48
Total unrealized gains/(losses) on cash flow hedges	$	453	$	(116)	$	338
*Retirement-related benefit plans:**
Prior service costs/(credits)	$	408	$	(99)	$	309
Net (losses)/gains arising during the period		63		(20)		43
Curtailments and settlements		5,931		(1,491)		4,440
Amortization of prior service (credits)/costs		16		(4)		12
Amortization of net (gains)/losses		1,305		(364)		941
Total retirement-related benefit plans	$	7,722	$	(1,978)	$	5,745
Other comprehensive income/(loss)	$	8,973	$	(2,877)	$	6,096

These AOCI components are included in the computation of net periodic pension cost and include the impact of a one-time, non-cash pension settlement charge of $5.9 billion ($4.4 billion net of tax) in the third quarter of 2022. Refer to note 18, “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 nine months ended September 30, 2021:	Amount		Benefit		Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	463	$	(304)	$	160
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	$	262	$	(66)	$	196
Reclassification of (gains)/losses to:
Cost of services		(33)		8		(25)
Cost of sales		30		(8)		23
Cost of financing		17		(4)		13
SG&A expense		32		(8)		24
Other (income) and expense		187		(47)		140
Interest expense		48		(12)		36
Total unrealized gains/(losses) on cash flow hedges	$	545	$	(138)	$	407
*Retirement-related benefit plans:**
Prior service costs/(credits)	$	0	$	0	$	0
Net (losses)/gains arising during the period		23		4		27
Curtailments and settlements		46		(14)		32
Amortization of prior service (credits)/costs		8		0		8
Amortization of net (gains)/losses		1,929		(526)		1,403
Total retirement-related benefit plans	$	2,006	$	(537)	$	1,469
Other comprehensive income/(loss)	$	3,014	$	(978)	$	2,035

*	These AOCI components are included in the computation of net periodic pension cost. Refer to note 18, “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, 2022	$	(18)	$	(3,362)	$	(19,854)		$	(1)	$	(23,234)
Other comprehensive income before reclassifications		332		14		352			(1)		697
Amount reclassified from accumulated other comprehensive income		6		—		5,393	**		—		5,399
Total change for the period	$	338	$	14	$	5,745		$	(1)	$	6,096
September 30, 2022	$	320	$	(3,347)	$	(14,110)		$	(1)	$	(17,138)

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

**	Includes the impact of a one-time, non-cash pension settlement charge of $5.9 billion ($4.4 billion net of tax) in the third quarter of 2022. Refer to note 18, “Retirement-Related Benefits,” for additional information.


					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, 2021	$	(456)	$	(4,665)	$	(24,216)	$	0	$	(29,337)
Other comprehensive income before reclassifications		196		160		26		0		382
Amount reclassified from accumulated other comprehensive income		211		—		1,442		—		1,654
Total change for the period	$	407	$	160	$	1,469	$	0	$	2,035
September 30, 2021	$	(49)	$	(4,505)	$	(22,747)	$	(1)	$	(27,302)

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