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Accumulated Other Comprehensive Income (Loss)
 9 Months Ended
Sep. 30, 2013
Equity [Abstract]  
Accumulated Other Comprehensive Income (Loss)
5. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) are as follows (in millions):

 

           Derivative     Defined        
     Currency     Financial     Benefit        
     Translation     Instruments,     Plans,        
     Adjustments     Net of Tax     Net of Tax     Total  

Balance at December 31, 2012

    $ 132      $ 42      $ (67 )    $ 107   

Accumulated other comprehensive income (loss) before reclassifications

      (59 )      (22 )      —          (81 ) 

Amounts reclassified from accumulated other comprehensive income (loss)

      (25 )      —          —          (25 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Balance at September 30, 2013

    $ 48      $ 20      $ (67 )    $ 1   
  

 

 

    

 

 

    

 

 

    

 

 

  

The components of amounts reclassified from accumulated other comprehensive income (loss) are as follows (in millions):

 

     Three Months Ended September 30,  
     2013     2012  
    

Currency
Translation
Adjustments

      Derivative
Financial
Instruments		     Defined
Benefit
Plans		      Total     Currency
Translation
Adjustments		      Derivative
Financial
Instruments		     Defined
Benefit
Plans		      Total  

Revenue

    $ —         $ (3 )    $ —         $ (3 )    $ —         $ 3      $ —         $ 3   

Cost of revenue

      —           7        —           7        —           11        —           11   

Other income (expense), net

      —           —          —           —          —           —          —           —     

Tax effect

      —           (2 )      —           (2 )      —           (4 )      —           (4 ) 
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

  
   $ —         $ 2      $ —         $ 2      $ —         $ 10      $ —         $ 10   
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

  

 

     Nine Months Ended September 30,  
     2013     2012  
     Currency
Translation
Adjustments		     Derivative
Financial
Instruments		     Defined
Benefit
Plans		      Total     Currency
Translation
Adjustments		      Derivative
Financial
Instruments		     Defined
Benefit
Plans		      Total  

Revenue

    $ —        $ (7 )    $ —         $ (7 )    $ —         $ 9      $ —         $ 9   

Cost of revenue

      —          8        —           8        —           22        —           22   

Other income (expense), net

      (25 )      —          —           (25 )      —           —          —           —     

Tax effect

      —          (1 )      —           (1 )      —           (9 )      —           (9 ) 
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

  
   $ (25 )    $ —        $ —         $ (25 )    $ —         $ 22      $ —         $ 22   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

  

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, currency translation adjustments resulting from the process of translating the entities’ financial statements into the reporting currency are reported in other comprehensive income or loss in accordance with ASC Topic 830 “Foreign Currency Matters” (“ASC Topic 830”). For the three months ended September 30, 2013 a majority of these local currencies strengthened against the U.S. dollar. This resulted in net other comprehensive income of $154 million upon the translation from local currencies to the U.S. dollar. However, for the nine months ended September 30, 2013 a majority of these local currencies weakened against the U.S. dollar resulting in a net other comprehensive loss of $59 million upon the translation from local currencies to the U.S. dollar. Due to the sale of a foreign subsidiary during the second quarter of 2013, $25 million of currency translation gains were reclassified from accumulated other comprehensive income (loss) into other income (expense), net in the Consolidated Statements of Income. For the three and nine months ended September 30, 2012, a majority of these local currencies strengthened against the U.S. dollar which resulted in other comprehensive income of $84 million and $28 million, respectively.

The effect of changes in the fair values of derivatives designated as cash flow hedges are accumulated in other comprehensive income (loss), net of tax, until the underlying transactions to which they are designed to hedge are realized. The movement in other comprehensive income (loss) from period to period will be the result of the combination of changes in fair value for open derivatives and the outflow of other comprehensive income (loss) related to cumulative changes in the fair value of derivatives that have settled in the current or prior periods. The accumulated effect was other comprehensive income of $48 million (net of tax of $17 million) and other comprehensive loss of $22 million (net of tax of $10 million) for the three and nine months ended September 30, 2013, respectively. The accumulated effect was other comprehensive income of $64 million (net of tax of $23 million) and $74 million (net of tax of $27 million) for the three and nine months ended September 30, 2012, respectively.