(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 September 30, 2020:	Amount		Benefit		Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	(439)	$	247	$	(192)
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	$	(32)	$	8	$	(24)
Reclassification of (gains)/losses to:
Cost of services		(10)		2		(7)
Cost of sales		4		(1)		3
Cost of financing		6		(2)		5
SG&A expense		5		(1)		4
Other (income) and expense		(93)		23		(70)
Interest expense		19		(5)		14
Total unrealized gains/(losses) on cash flow hedges	$	(101)	$	26	$	(75)
Retirement-related benefit plans (1):
Prior service costs/(credits)	$	(1)	$	0	$	0
Net (losses)/gains arising during the period		0		0		0
Curtailments and settlements		21		(6)		14
Amortization of prior service (credits)/costs		0		1		1
Amortization of net (gains)/losses		586		(161)		425
Total retirement-related benefit plans	$	607	$	(167)	$	440
Other comprehensive income/(loss)	$	66	$	106	$	172

(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 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 (1):
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

(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 nine months ended September 30, 2020:	Amount		Benefit		Amount
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	(1,354)	$	260	$	(1,094)
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	$	(249)	$	63	$	(186)
Reclassification of (gains)/losses to:
Cost of services		(18)		5		(14)
Cost of sales		(14)		4		(10)
Cost of financing		21		(5)		16
SG&A expense		(12)		3		(9)
Other (income) and expense		(74)		19		(55)
Interest expense		60		(15)		45
Total unrealized gains/(losses) on cash flow hedges	$	(285)	$	73	$	(212)
Retirement-related benefit plans (1):
Prior service costs/(credits)	$	(5)	$	1	$	(3)
Net (losses)/gains arising during the period		65		(24)		41
Curtailments and settlements		42		(12)		30
Amortization of prior service (credits)/costs		1		2		3
Amortization of net (gains)/losses		1,722		(473)		1,249
Total retirement-related benefit plans	$	1,826	$	(507)	$	1,319
Other comprehensive income/(loss)	$	187	$	(175)	$	12

(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		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.


					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		(186)		(1,094)		37		0		(1,242)
Amount reclassified from accumulated other comprehensive income		(27)		—		1,281		—		1,255
Total change for the period	$	(212)	$	(1,094)	$	1,319	$	0	$	12
September 30, 2020	$	(391)	$	(4,794)	$	(23,399)	$	0	$	(28,584)

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