Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Note 22: Comprehensive Income |
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The components of total comprehensive income were as follows:
| (In Millions) | 2008 | 2007 | 2006 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Net income | $ | 5,292 | $ | 6,976 | $ | 5,044 | |||
| Other comprehensive income (loss) | (654) | 318 | 26 | ||||||
| Total comprehensive income | $ | 4,638 | $ | 7,294 | $ | 5,070 | |||
The components of other comprehensive income (loss) and related tax effects were as follows:
| 2008 | 2007 | 2006 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In Millions) | Before Tax | Tax | Net of Tax | Before Tax | Tax | Net of Tax | Before Tax | Tax | Net of Tax | ||||||||||||||||||
| Change in unrealized holding gain (loss) on investments | $ | (764) | $ | 279 | $ | (485) | $ | 420 | $ | (155) | $ | 265 | $ | 94 | $ | (33) | $ | 61 | |||||||||
| Less: adjustment for (gain) loss on investments included in net income | 34 | (12) | 22 | (85) | 31 | (54) | (75) | 27 | (48) | ||||||||||||||||||
| Change in unrealized holding gain (loss) on derivatives | (23) | 8 | (15) | 80 | (21) | 59 | 59 | (22) | 37 | ||||||||||||||||||
| Less: adjustment for amortization of (gain) loss on derivatives included in net income | (58) | 21 | (37) | (55) | 16 | (39) | 9 | (3) | 6 | ||||||||||||||||||
| Change in prior service costs | 5 | (2) | 3 | 4 | (1) | 3 | — | — | — | ||||||||||||||||||
| Change in actuarial loss | (220) | 78 | (142) | 106 | (22) | 84 | — | — | — | ||||||||||||||||||
| Minimum pension liability | — | — | — | — | — | — | (36) | 6 | (30) | ||||||||||||||||||
| Total other comprehensive income (loss) | $ | (1,026) | $ | 372 | $ | (654) | $ | 470 | $ | (152) | $ | 318 | $ | 51 | $ | (25) | $ | 26 | |||||||||
The components of accumulated other comprehensive income (loss), net of tax, were as follows:
| (In Millions) | 2008 | 2007 | ||||
|---|---|---|---|---|---|---|
| Accumulated net unrealized holding gain (loss) on available-for-sale investments | $ | (139) | $ | 324 | ||
| Accumulated net unrealized holding gain on derivatives | 48 | 100 | ||||
| Accumulated net prior service costs | (10) | (13) | ||||
| Accumulated net actuarial losses | (290) | (148) | ||||
| Accumulated transition obligation | (2) | (2) | ||||
| Total accumulated other comprehensive income (loss) | $ | (393) | $ | 261 |
For 2008, we reclassified $37 million of net deferred holding gains on derivatives from accumulated other comprehensive income (loss) to cost of sales and operating expenses related to our non-U.S.-currency capital purchase and operating cost hedging programs (gains of $39 million in 2007 and losses of $6 million in 2006). We estimate that we will reclassify less than $15 million of net derivative losses included in other accumulated comprehensive income (loss) into earnings within the next 12 months. For all periods presented, the portion of hedging instruments' gains or losses excluded from the assessment of effectiveness and the ineffective portions of hedges had an insignificant impact on earnings for cash flow hedges. Additionally, for all periods presented, there was not a significant impact on results of operations from discontinued cash flow hedges as a result of forecasted transactions that did not occur.
The estimated net prior service cost, actuarial loss, and transition obligation for the defined benefit plan that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost during fiscal year 2009 are $4 million, $28 million, and zero, respectively.