| Equity Activity: Reclassifications and Taxes Related to Items of Other Comprehensive Income | | | | | | | | | | | | | | | | | | | | | | (Dollars in millions) | | Before Tax
Amount | | Tax (Expense)/
Benefit | | Net of Tax
Amount | | For the three months ended June 30, 2025: | | | | | Other comprehensive income/(loss): | | | | | | | | Foreign currency translation adjustments | | $ | (613) | | | $ | 399 | | | $ | (215) | | | Net changes related to available-for-sale securities: | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | (5) | | | $ | 1 | | | $ | (4) | | | Reclassification of (gains)/losses to other (income) and expense | | — | | | — | | | — | | | Total net changes related to available-for-sale securities | | $ | (5) | | | $ | 1 | | | $ | (4) | | | Unrealized gains/(losses) on cash flow hedges: | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | (82) | | | $ | 24 | | | $ | (59) | | Reclassification of (gains)/losses to: | | | | | | | | Cost of services | | 4 | | | (1) | | | 3 | | | Cost of sales | | 5 | | | (2) | | | 4 | | | Cost of financing | | 1 | | | 0 | | | 1 | | | SG&A expense | | 2 | | | (1) | | | 1 | | | Other (income) and expense | | (436) | | | 110 | | | (327) | | | Interest expense | | 6 | | | (1) | | | 4 | | | Total unrealized gains/(losses) on cash flow hedges | | $ | (501) | | | $ | 128 | | | $ | (373) | | Retirement-related benefit plans: (1) | | | | | | | | Prior service costs/(credits) | | $ | 0 | | | $ | 0 | | | $ | 0 | | Net gains/(losses) arising during the period | | 0 | | | 8 | | | 8 | | Curtailments and settlements | | 5 | | | (2) | | | 3 | | | Amortization of prior service costs/(credits) | | (2) | | | 1 | | | (1) | | | Amortization of net (gains)/losses | | 157 | | | (42) | | | 115 | | | Total retirement-related benefit plans | | $ | 160 | | | $ | (35) | | | $ | 125 | | | Other comprehensive income/(loss) | | $ | (959) | | | $ | 493 | | | $ | (466) | |
(1)These accumulated other comprehensive income (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
Amount | | Tax (Expense)/
Benefit | | Net of Tax
Amount | | For the three months ended June 30, 2024: | | | | | Other comprehensive income/(loss): | | | | | | | | Foreign currency translation adjustments | | $ | 2 | | | $ | (68) | | | $ | (66) | | | Net changes related to available-for-sale securities: | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | 1 | | | $ | 0 | | | $ | 0 | | | Reclassification of (gains)/losses to other (income) and expense | | — | | | — | | | — | | | Total net changes related to available-for-sale securities | | $ | 1 | | | $ | 0 | | | $ | 0 | | | Unrealized gains/(losses) on cash flow hedges: | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | 103 | | | $ | (28) | | | $ | 75 | | | Reclassification of (gains)/losses to: | | | | | | | | Cost of services | | (9) | | | 3 | | | (7) | | | Cost of sales | | (15) | | | 5 | | | (10) | | | Cost of financing | | 2 | | | 0 | | | 1 | | | SG&A expense | | (7) | | | 2 | | | (5) | | | Other (income) and expense | | (21) | | | 5 | | | (16) | | | Interest expense | | 8 | | | (2) | | | 6 | | | Total unrealized gains/(losses) on cash flow hedges | | $ | 61 | | | $ | (16) | | | $ | 45 | | Retirement-related benefit plans: (1) | | | | | | | | Prior service costs/(credits) | | $ | — | | | $ | — | | | $ | — | | Net gains/(losses) arising during the period | | 0 | | | 2 | | | 2 | | Curtailments and settlements | | 2 | | | (1) | | | 2 | | | Amortization of prior service costs/(credits) | | (2) | | | 0 | | | (1) | | | Amortization of net (gains)/losses | | 258 | | | (71) | | | 187 | | | Total retirement-related benefit plans | | $ | 259 | | | $ | (69) | | | $ | 190 | | | Other comprehensive income/(loss) | | $ | 322 | | | $ | (153) | | | $ | 169 | |
(1)These AOCI components are included in the computation of net periodic pension cost. Refer to note 18, “Retirement-Related Benefits,” for additional information. | | | | | | | | | | | | | | | | | | | | | | (Dollars in millions) | | Before Tax
Amount | | Tax (Expense)/
Benefit | | Net of Tax
Amount | | For the six months ended June 30, 2025: | | | | | Other comprehensive income/(loss): | | | | | | | | Foreign currency translation adjustments | | $ | (956) | | | $ | 602 | | | $ | (354) | | | Net changes related to available-for-sale securities: | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | 2 | | | $ | (1) | | | $ | 2 | | | Reclassification of (gains)/losses to other (income) and expense | | — | | | — | | | — | | | Total net changes related to available-for-sale securities | | $ | 2 | | | $ | (1) | | | $ | 2 | | | Unrealized gains/(losses) on cash flow hedges: | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | (141) | | | $ | 40 | | | $ | (101) | | Reclassification of (gains)/losses to: | | | | | | | | Cost of services | | 5 | | | (1) | | | 4 | | | Cost of sales | | (2) | | | 1 | | | (2) | | | Cost of financing | | 2 | | | (1) | | | 2 | | | SG&A expense | | (2) | | | 0 | | | (1) | | | Other (income) and expense | | (758) | | | 191 | | | (567) | | | Interest expense | | 12 | | | (3) | | | 9 | | | Total unrealized gains/(losses) on cash flow hedges | | $ | (883) | | | $ | 227 | | | $ | (656) | | Retirement-related benefit plans: (1) | | | | | | | | Prior service costs/(credits) | | $ | 0 | | | $ | 0 | | | $ | 0 | | Net gains/(losses) arising during the period | | 0 | | | 8 | | | 8 | | | Curtailments and settlements | | 7 | | | (2) | | | 5 | | | Amortization of prior service costs/(credits) | | (4) | | | 1 | | | (2) | | | Amortization of net (gains)/losses | | 308 | | | (83) | | | 225 | | | Total retirement-related benefit plans | | $ | 311 | | | $ | (76) | | | $ | 236 | | | Other comprehensive income/(loss) | | $ | (1,525) | | | $ | 753 | | | $ | (772) | |
(1)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
Amount | | Tax (Expense)/
Benefit | | Net of Tax
Amount | | For the six months ended June 30, 2024: | | | | | Other comprehensive income/(loss): | | | | | | | | Foreign currency translation adjustments | | $ | 57 | | | $ | (222) | | | $ | (165) | | | 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 | | $ | 279 | | | $ | (75) | | | $ | 204 | | | Reclassification of (gains)/losses to: | | | | | | | | Cost of services | | (14) | | | 4 | | | (10) | | | Cost of sales | | (27) | | | 9 | | | (18) | | | Cost of financing | | 3 | | | (1) | | | 2 | | | SG&A expense | | (10) | | | 3 | | | (7) | | | Other (income) and expense | | 58 | | | (15) | | | 44 | | | Interest expense | | 17 | | | (4) | | | 13 | | | Total unrealized gains/(losses) on cash flow hedges | | $ | 307 | | | $ | (79) | | | $ | 227 | | Retirement-related benefit plans: (1) | | | | | | | | Prior service costs/(credits) | | $ | — | | | $ | — | | | $ | — | | Net gains/(losses) arising during the period | | 1 | | | 2 | | | 2 | | | Curtailments and settlements | | 4 | | | (1) | | | 3 | | | Amortization of prior service costs/(credits) | | (4) | | | 1 | | | (3) | | | Amortization of net (gains)/losses | | 519 | | | (143) | | | 376 | | | Total retirement-related benefit plans | | $ | 520 | | | $ | (141) | | | $ | 379 | | | Other comprehensive income/(loss) | | $ | 885 | | | $ | (442) | | | $ | 442 | |
(1)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) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (Dollars in millions) | | Foreign Currency Translation Adjustments (1) | | Net Unrealized
Gains/(Losses)
on Available-
For-Sale
Securities | | Net Unrealized
Gains/(Losses)
on Cash Flow
Hedges | | Net Change
Retirement-
Related
Benefit
Plans | | Accumulated Other Comprehensive Income/(Loss) | | January 1, 2025 | | $ | (3,512) | | | $ | 0 | | | $ | 237 | | | $ | (11,994) | | | $ | (15,269) | | | Other comprehensive income before reclassifications | | (354) | | | 2 | | | (101) | | | 8 | | | (445) | | | Amount reclassified from accumulated other comprehensive income | | — | | | — | | | (555) | | | 228 | | | (328) | | | Total change for the period | | $ | (354) | | | $ | 2 | | | $ | (656) | | | $ | 236 | | | $ | (772) | | | June 30, 2025 | | $ | (3,865) | | | $ | 2 | | | $ | (419) | | | $ | (11,759) | | | $ | (16,041) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (Dollars in millions) | | Foreign Currency Translation Adjustments (1) | | Net Unrealized
Gains/(Losses)
on Available-
For-Sale
Securities | | Net Unrealized
Gains/(Losses)
on Cash Flow
Hedges | | Net Change
Retirement-
Related
Benefit
Plans | | Accumulated Other Comprehensive Income/(Loss) | | January 1, 2024 | | $ | (3,488) | | | $ | (1) | | | $ | (106) | | | $ | (15,165) | | | $ | (18,761) | | | Other comprehensive income before reclassifications | | (165) | | | 1 | | | 204 | | | 2 | | | 42 | | | Amount reclassified from accumulated other comprehensive income | | — | | | — | | | 24 | | | 377 | | | 400 | | | Total change for the period | | $ | (165) | | | $ | 1 | | | $ | 227 | | | $ | 379 | | | $ | 442 | | | June 30, 2024 | | $ | (3,653) | | | $ | (1) | | | $ | 121 | | | $ | (14,786) | | | $ | (18,319) | |
(1)Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.
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