Volkswagen (VLKAY)

Comprehensive income includes all changes in equity during a period except those that resulted from investments by or distributions to shareholders. Other comprehensive income refers to revenues, expenses, gains and losses that, under generally accepted accounting principles, are included in comprehensive income, but excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity. Components of our comprehensive income include net income and gains/losses associated with our short- and long-term investments.

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Comprehensive income for the years ended January 30, 2010, January 31, 2009, and February 2, 2008 is as follows (in thousands):

During fiscal 2009, we recognized a $0.5 million tax expense for the $1.3 million unrealized gain on auction rate securities. The resulting $0.8 million net gain is recorded in other comprehensive income. Unrealized gain on short-term marketable securities during fiscal 2009 was $132,000 and the related tax expense on this activity was not material. During fiscal 2008, we recognized a $0.8 million tax benefit for the $2.0 million unrealized loss on auction rate securities resulting in a $1.2 million net loss. Unrealized loss on short-term marketable securities during fiscal 2008 was $127,000 and the related tax benefit on this activity was not material. There were no unrealized gains or losses during fiscal 2007.

The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS 130), Reporting Comprehensive Income, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statement of Stockholders' Equity.  Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. 

The Company has no elements of "other comprehensive income" during the period ended January 31, 2010.

        The Company reports comprehensive income in accordance with "Comprehensive Income", Topic 220 of the FASB ASC. This guidance provides standards for the reporting and display of comprehensive income. Components of comprehensive income could include net income, foreign currency translation adjustments and gains or losses associated with investments available for sale. There was no difference between net income and comprehensive income for any of the periods presented.

Comprehensive income includes net income or loss and the unrealized gain or loss on securities available for sale, net of income taxes.

FASB ASC Topic 220, Comprehensive Income establishes standards for reporting and displaying comprehensive income and its components in the consolidated financial statements. Comprehensive income and loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Accumulated other comprehensive income arose from foreign currency translation adjustments.

A reconciliation of comprehensive loss is as follows:

Comprehensive income is composed of the Company’s earnings and other comprehensive income.  Other comprehensive income includes unrealized gains and losses on available-for-sale investments, foreign currency translation gains and losses on the net investment in self-sustaining operations and changes in the fair market value of derivate instruments designated as cash flow hedges, all net of income taxes.  Cumulative changes in other comprehensive income are included in accumulated other comprehensive income which is presented (if applicable) as a new category in shareholders’ equity.

We recorded comprehensive income of $639 million in the third quarter, consisting of $609 million of regular net earnings and $30 million of other comprehensive income. The most significant components of other comprehensive income in the quarter were currency translation adjustments on self-sustaining foreign subsidiaries, unrealized gains on the US dollar forward sales contracts and unrealized gains on marketable securities. Currency translation gains and losses are held in accumulated other comprehensive income, net of taxes, until they are realized, at which time they are included in net earnings. Unrealized gains and losses on the US dollar forward sales contracts, which are designated as cash flow hedges, are recorded in other comprehensive income until settlement. Marketable securities consist primarily of investments in publicly traded companies with whom we partner in exploration or development projects.