14. 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 June 30, 2020: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss): | | | | | | | | | | Foreign currency translation adjustments | | $ | 4 | | $ | 135 | | $ | 139 | 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 | | $ | (36) | | $ | 9 | | $ | (26) | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | 1 | | | 0 | | | 1 | Cost of sales | | | (9) | | | 3 | | | (7) | Cost of financing | | | 7 | | | (2) | | | 5 | SG&A expense | | | (7) | | | 2 | | | (5) | Other (income) and expense | | | (70) | | | 18 | | | (52) | Interest expense | | | 19 | | | (5) | | | 15 | Total unrealized gains/(losses) on cash flow hedges | | $ | (94) | | $ | 25 | | $ | (70) | Retirement-related benefit plans (1): | | | | | | | | | | Prior service costs/(credits) | | $ | — | | $ | 0 | | $ | 0 | Net (losses)/gains arising during the period | | | 57 | | | (22) | | | 35 | Curtailments and settlements | | | 13 | | | (4) | | | 9 | Amortization of prior service (credits)/costs | | | 0 | | | 1 | | | 1 | Amortization of net (gains)/losses | | | 566 | | | (155) | | | 411 | Total retirement-related benefit plans | | $ | 637 | | $ | (180) | | $ | 457 | Other comprehensive income/(loss) | | $ | 548 | | $ | (21) | | $ | 527 |
| (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 June 30, 2019: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss): | | | | | | | | | | Foreign currency translation adjustments | | $ | 5 | | $ | 37 | | $ | 42 | Net changes related to available-for-sale securities: | | | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | (2) | | $ | 0 | | $ | (1) | Reclassification of (gains)/losses to other (income) and expense | | | — | | | — | | | — | Total net changes related to available-for-sale securities | | $ | (2) | | $ | 0 | | $ | (1) | Unrealized gains/(losses) on cash flow hedges: | | | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | (6) | | $ | 2 | | $ | (4) | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (20) | | | 5 | | | (15) | Cost of sales | | | (11) | | | 3 | | | (8) | Cost of financing | | | 25 | | | (6) | | | 18 | SG&A expense | | | (12) | | | 3 | | | (9) | Other (income) and expense | | | (202) | | | 51 | | | (151) | Interest expense | | | 52 | | | (13) | | | 39 | Total unrealized gains/(losses) on cash flow hedges | | $ | (175) | | $ | 45 | | $ | (129) | Retirement-related benefit plans (1): | | | | | | | | | | Net (losses)/gains arising during the period | | $ | 116 | | $ | (25) | | $ | 92 | Curtailments and settlements | | | 3 | | | 0 | | | 3 | Amortization of prior service (credits)/costs | | | (3) | | | 0 | | | (3) | Amortization of net (gains)/losses | | | 460 | | | (123) | | | 337 | Total retirement-related benefit plans | | $ | 576 | | $ | (147) | | $ | 430 | Other comprehensive income/(loss) | | $ | 405 | | $ | (64) | | $ | 340 |
| (1) | These 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 six months ended June 30, 2020: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss): | | | | | | | | | | Foreign currency translation adjustments | | $ | (915) | | $ | 13 | | $ | (902) | 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 | | $ | (216) | | $ | 55 | | $ | (162) | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (9) | | | 2 | | | (6) | Cost of sales | | | (18) | | | 5 | | | (13) | Cost of financing | | | 15 | | | (4) | | | 11 | SG&A expense | | | (17) | | | 4 | | | (13) | Other (income) and expense | | | 19 | | | (5) | | | 15 | Interest expense | | | 41 | | | (10) | | | 31 | Total unrealized gains/(losses) on cash flow hedges | | $ | (184) | | $ | 47 | | $ | (137) | Retirement-related benefit plans (1): | | | | | | | | | | Prior service costs/(credits) | | $ | (4) | | $ | 1 | | $ | (3) | Net (losses)/gains arising during the period | | | 65 | | | (24) | | | 41 | Curtailments and settlements | | | 21 | | | (6) | | | 15 | Amortization of prior service (credits)/costs | | | 1 | | | 1 | | | 2 | Amortization of net (gains)/losses | | | 1,136 | | | (312) | | | 824 | Total retirement-related benefit plans | | $ | 1,219 | | $ | (341) | | $ | 879 | Other comprehensive income/(loss) | | $ | 121 | | $ | (281) | | $ | (160) |
| (1) | These 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 six months ended June 30, 2019: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss): | | | | | | | | | | Foreign currency translation adjustments | | $ | 176 | | $ | 38 | | $ | 214 | 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 | | $ | (359) | | $ | 87 | | $ | (272) | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (29) | | | 8 | | | (22) | Cost of sales | | | (30) | | | 8 | | | (21) | Cost of financing | | | 53 | | | (13) | | | 40 | SG&A expense | | | (34) | | | 9 | | | (25) | Other (income) and expense | | | (115) | | | 29 | | | (86) | Interest expense | | | 86 | | | (22) | | | 64 | Total unrealized gains/(losses) on cash flow hedges | | $ | (429) | | $ | 106 | | $ | (323) | Retirement-related benefit plans (1): | | | | | | | | | | Net (losses)/gains arising during the period | | $ | 113 | | $ | (24) | | $ | 89 | Curtailments and settlements | | | 4 | | | 0 | | | 4 | Amortization of prior service (credits)/costs | | | (6) | | | 1 | | | (5) | Amortization of net (gains)/losses | | | 924 | | | (252) | | | 671 | Total retirement-related benefit plans | | $ | 1,035 | | $ | (275) | | $ | 760 | Other comprehensive income/(loss) | | $ | 779 | | $ | (131) | | $ | 649 |
| (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 | | | (162) | | | (902) | | | 38 | | | 1 | | | (1,025) | Amount reclassified from accumulated other comprehensive income | | | 25 | | | — | | | 841 | | | — | | | 866 | Total change for the period | | $ | (137) | | $ | (902) | | $ | 879 | | $ | 1 | | $ | (160) | June 30, 2020 | | $ | (316) | | $ | (4,602) | | $ | (23,839) | | $ | 1 | | $ | (28,757) |
* 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 | | | (272) | | | 214 | | | 89 | | | (2) | | | 29 | Amount reclassified from accumulated other comprehensive income | | | (51) | | | — | | | 671 | | | — | | | 620 | Total change for the period | | $ | (323) | | $ | 214 | | $ | 760 | | $ | (2) | | $ | 649 | June 30, 2019 | | $ | (39) | | $ | (3,477) | | $ | (25,323) | | $ | (2) | | $ | (28,841) |
* Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.
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