| Equity Activity |
9. 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, 2019: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss): | | | | | | | | | | Foreign currency translation adjustments | | $ | (509) | | $ | (109) | | $ | (618) | Net changes related to available-for-sale securities: | | | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | 3 | | $ | (1) | | $ | 2 | Reclassification of (gains)/losses to other (income) and expense | | | — | | | — | | | — | Total net changes related to available-for-sale securities | | $ | 3 | | $ | (1) | | $ | 2 | Unrealized gains/(losses) on cash flow hedges: | | | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | (439) | | $ | 110 | | $ | (329) | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (22) | | | 6 | | | (17) | Cost of sales | | | (10) | | | 3 | | | (7) | Cost of financing | | | 21 | | | (5) | | | 15 | SG&A expense | | | (11) | | | 3 | | | (8) | Other (income) and expense | | | 447 | | | (112) | | | 334 | Interest expense | | | 64 | | | (16) | | | 48 | Total unrealized gains/(losses) on cash flow hedges | | $ | 49 | | $ | (12) | | $ | 36 | Retirement-related benefit plans (1): | | | | | | | | | | Net (losses)/gains arising during the period | | $ | 0 | | $ | 0 | | $ | 0 | Curtailments and settlements | | | 3 | | | (1) | | | 2 | Amortization of prior service (credits)/costs | | | (3) | | | 3 | | | (1) | Amortization of net (gains)/losses | | | 461 | | | (128) | | | 333 | Total retirement-related benefit plans | | $ | 461 | | $ | (127) | | $ | 335 | Other comprehensive income/(loss) | | $ | 4 | | $ | (249) | | $ | (245) |
| (1) | These AOCI components are included in the computation of net periodic pension cost. Refer to note 10, “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, 2018: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss): | | | | | | | | | | Foreign currency translation adjustments | | $ | (22) | | $ | (22) | | $ | (44) | 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 | | $ | (46) | | $ | 11 | | $ | (35) | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (1) | | | 0 | | | (1) | Cost of sales | | | (8) | | | 3 | | | (6) | Cost of financing* | | | 18 | | | (5) | | | 14 | SG&A expense | | | (7) | | | 2 | | | (5) | Other (income) and expense | | | 8 | | | (2) | | | 6 | Interest expense* | | | 18 | | | (5) | | | 14 | Total unrealized gains/(losses) on cash flow hedges | | $ | (18) | | $ | 4 | | $ | (14) | Retirement-related benefit plans (1): | | | | | | | | | | Prior service costs/(credits) | | $ | 0 | | $ | 0 | | $ | 0 | Net (losses)/gains arising during the period | | | (1) | | | 1 | | | (1) | Curtailments and settlements | | | 2 | | | 0 | | | 1 | Amortization of prior service (credits)/costs | | | (18) | | | 5 | | | (13) | Amortization of net (gains)/losses | | | 737 | | | (196) | | | 540 | Total retirement-related benefit plans | | $ | 719 | | $ | (191) | | $ | 527 | Other comprehensive income/(loss) | | $ | 678 | | $ | (209) | | $ | 470 |
* Reclassified to conform to current period presentation. | (1) | These AOCI components are included in the computation of net periodic pension cost. Refer to note 10, “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, 2019: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss): | | | | | | | | | | Foreign currency translation adjustments | | $ | (333) | | $ | (72) | | $ | (405) | 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 | | $ | (798) | | $ | 196 | | $ | (601) | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (52) | | | 13 | | | (38) | Cost of sales | | | (40) | | | 11 | | | (29) | Cost of financing | | | 73 | | | (18) | | | 55 | SG&A expense | | | (45) | | | 12 | | | (33) | Other (income) and expense | | | 331 | | | (83) | | | 248 | Interest expense | | | 150 | | | (38) | | | 112 | Total unrealized gains/(losses) on cash flow hedges | | $ | (380) | | $ | 93 | | $ | (287) | Retirement-related benefit plans (1): | | | | | | | | | | Net (losses)/gains arising during the period | | $ | 113 | | $ | (23) | | $ | 90 | Curtailments and settlements | | | 7 | | | (1) | | | 6 | Amortization of prior service (credits)/costs | | | (9) | | | 4 | | | (5) | Amortization of net (gains)/losses | | | 1,385 | | | (380) | | | 1,005 | Total retirement-related benefit plans | | $ | 1,496 | | $ | (401) | | $ | 1,095 | Other comprehensive income/(loss) | | $ | 784 | | $ | (380) | | $ | 404 |
| (1) | These AOCI components are included in the computation of net periodic pension cost. Refer to note 10, “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, 2018: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss): | | | | | | | | | | Foreign currency translation adjustments | | $ | (535) | | $ | (128) | | $ | (663) | Net changes related to available-for-sale securities: | | | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | (2) | | $ | 1 | | $ | (1) | Reclassification of (gains)/losses to other (income) and expense | | | — | | | — | | | — | Total net changes related to available-for-sale securities | | $ | (2) | | $ | 1 | | $ | (1) | Unrealized gains/(losses) on cash flow hedges: | | | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | (134) | | $ | 39 | | $ | (95) | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (29) | | | 7 | | | (22) | Cost of sales | | | 15 | | | (4) | | | 11 | Cost of financing* | | | 56 | | | (14) | | | 42 | SG&A expense | | | 14 | | | (4) | | | 10 | Other (income) and expense | | | 301 | | | (76) | | | 225 | Interest expense* | | | 52 | | | (13) | | | 39 | Total unrealized gains/(losses) on cash flow hedges | | $ | 274 | | $ | (63) | | $ | 210 | Retirement-related benefit plans (1): | | | | | | | | | | Prior service costs/(credits) | | $ | (1) | | $ | 0 | | $ | (1) | Net (losses)/gains arising during the period | | | 83 | | | (22) | | | 60 | Curtailments and settlements | | | 7 | | | (2) | | | 5 | Amortization of prior service (credits)/costs | | | (55) | | | 15 | | | (40) | Amortization of net (gains)/losses | | | 2,231 | | | (607) | | | 1,624 | Total retirement-related benefit plans | | $ | 2,264 | | $ | (616) | | $ | 1,648 | Other comprehensive income/(loss) | | $ | 2,001 | | $ | (807) | | $ | 1,194 |
* Reclassified to conform to current period presentation. | (1) | These AOCI components are included in the computation of net periodic pension cost. Refer to note 10, “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, 2019 | | $ | 284 | | $ | (3,690) | | $ | (26,083) | | $ | 0 | | $ | (29,490) | Other comprehensive income before reclassifications | | | (601) | | | (405) | | | 89 | | | 1 | | | (916) | Amount reclassified from accumulated other comprehensive income | | | 315 | | | — | | | 1,005 | | | — | | | 1,320 | Total change for the period | | $ | (287) | | $ | (405) | | $ | 1,095 | | $ | 1 | | $ | 404 | September 30, 2019 | | $ | (3) | | $ | (4,095) | | $ | (24,988) | | $ | 0 | | $ | (29,086) |
* 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, 2018 | | $ | 35 | | $ | (2,834) | | $ | (23,796) | | $ | 3 | | $ | (26,592) | Cumulative effect of a change in accounting principle** | | | 5 | | | 46 | | | (2,471) | | | (2) | | | (2,422) | Other comprehensive income before reclassifications | | | (95) | | | (663) | | | 65 | | | (1) | | | (695) | Amount reclassified from accumulated other comprehensive income | | | 305 | | | — | | | 1,584 | | | — | | | 1,889 | Total change for the period | | $ | 210 | | $ | (663) | | $ | 1,648 | | $ | (1) | | $ | 1,194 | September 30, 2018 | | $ | 250 | | $ | (3,451) | | $ | (24,618) | | $ | 0 | | $ | (27,820) |
* Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. ** Reflects the adoption of the FASB guidance on stranded tax effects, hedging and financial instruments. Refer to note 2, “Accounting Changes.” Stock Repurchases The Board of Directors authorizes the company to repurchase IBM common stock. At September 30, 2019, $2,008 million of Board common stock repurchase authorization was available. The company suspended its share repurchase program effective with the close of the Red Hat acquisition in order to focus on reducing debt related to the acquisition.
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