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 March 31, 2021: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss): | | | | | | | | | | Foreign currency translation adjustments | | $ | 549 | | $ | (228) | | $ | 321 | 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 | | $ | 187 | | $ | (47) | | $ | 140 | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (14) | | | 3 | | | (10) | Cost of sales | | | 22 | | | (6) | | | 16 | Cost of financing | | | 6 | | | (2) | | | 4 | SG&A expense | | | 15 | | | (4) | | | 11 | Other (income) and expense | | | 116 | | | (29) | | | 87 | Interest expense | | | 16 | | | (4) | | | 12 | Total unrealized gains/(losses) on cash flow hedges | | $ | 347 | | $ | (88) | | $ | 259 | Retirement-related benefit plans (1): | | | | | | | | | | Prior service costs/(credits) | | $ | 0 | | $ | 0 | | $ | 0 | Net (losses)/gains arising during the period | | | 20 | | | (6) | | | 14 | Curtailments and settlements | | | 17 | | | (5) | | | 12 | Amortization of prior service (credits)/costs | | | 3 | | | 0 | | | 3 | Amortization of net (gains)/losses | | | 648 | | | (177) | | | 471 | Total retirement-related benefit plans | | $ | 689 | | $ | (189) | | $ | 500 | Other comprehensive income/(loss) | | $ | 1,586 | | $ | (505) | | $ | 1,080 |
| (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, 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 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, 2021 | | $ | (456) | | $ | (4,665) | | $ | (24,216) | | $ | 0 | | $ | (29,337) | Other comprehensive income before reclassifications | | | 140 | | | 321 | | | 14 | | | 0 | | | 475 | Amount reclassified from accumulated other comprehensive income | | | 119 | | | — | | | 486 | | | — | | | 606 | Total change for the period | | $ | 259 | | $ | 321 | | $ | 500 | | $ | 0 | | $ | 1,080 | March 31, 2021 | | $ | (197) | | $ | (4,343) | | $ | (23,716) | | $ | (1) | | $ | (28,257) |
* 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, 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.
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