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Comprehensive Income
9 Months Ended
Sep. 30, 2011
Comprehensive Income [Abstract] 
Comprehensive Income
5. Comprehensive Income
The components of comprehensive income are as follows (in millions):
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2011     2010     2011     2010  
Net income
  $ 528     $ 404     $ 1,412     $ 1,222  
Currency translation adjustments
    (117 )     92       (25 )     16  
Changes in derivative financial instruments, net of tax
    (71 )     84       (29 )     3  
 
                       
Comprehensive income
    340       580       1,358       1,241  
Comprehensive loss attributable to noncontrolling interest
    (4 )     —       (8 )     (5 )
 
                       
Comprehensive income attributable to Company
  $ 344     $ 580     $ 1,366     $ 1,246  
 
                       
The Company’s reporting currency is the U.S. dollar. A majority of the Company’s international entities in which there is a substantial investment have the local currency as their functional currency. As a result, translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in Other Comprehensive Income in accordance with ASC Topic 830 “Foreign Currency Matters” (“ASC Topic 830”). For the three months ended September 30, 2011, a majority of these local currencies weakened against the U.S. dollar resulting in a net decrease to Other Comprehensive Income of $117 million upon the translation of their financial statements from their local currency to the U.S. dollar. For the nine months ended September 30, 2011, foreign exchange movements have been insignificant with the majority of the local currencies strengthening slightly, offset by a slightly weaker Canadian dollar, resulting in a net decrease to Other Comprehensive Income of $25 million.
The effect of changes in the fair values of derivatives designated as cash flow hedges are accumulated in Other Comprehensive Income, net of tax, until the underlying transactions to which they are designed to hedge are realized. The movement in Other Comprehensive Income from period to period will be the result of the combination of changes in fair value for open derivatives and the outflow of accumulated Other Comprehensive Income related to the fair value of derivatives that have settled in the current or prior periods. The accumulated effect is a decrease in Other Comprehensive Income of $71 million (net of tax of $28 million) and $29 million (net of tax of $12 million) for the three and nine months ended September 30, 2011, respectively.