Equity

Earnings per share

Basic earnings per share is determined by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is similarly determined, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. Dilutive potential common shares consist principally of employee stock options issued by the Company, restricted stock units, and to a lesser extent, certain contingently issuable performance shares. Basic earnings per share is reconciled to diluted earnings per share in the following table. There were 5 million anti-dilutive potential common shares excluded from the reconciliation for the quarter and year-to-date periods ended September 30, 2017. There were 3 million anti-dilutive potential common shares excluded from the reconciliation for the quarter and year-to-date periods ended October 1, 2016, respectively.

Quarters ended September 30, 2017 and October 1, 2016:



(millions, except per share data)	Net income		Average shares outstanding	Earnings per share
2017
Basic	$	297	345	$	0.86
Dilutive potential common shares			3	(0.01		)
Diluted	$	297	348	$	0.85
2016
Basic	$	292	350	$	0.83
Dilutive potential common shares			4	(0.01		)
Diluted	$	292	354	$	0.82

Year-to-date periods ended September 30, 2017 and October 1, 2016:



(millions, except per share data)	Net income		Average shares outstanding	Earnings per share
2017
Basic	$	841	348	$	2.41
Dilutive potential common shares			3	(0.02		)
Diluted	$	841	351	$	2.39
2016
Basic	$	747	350	$	2.13
Dilutive potential common shares			4	(0.02		)
Diluted	$	747	354	$	2.11

In December 2015, the board of directors approved a new authorization to repurchase up to $1.5 billion of our common stock beginning in 2016 through December 2017. As of September 30, 2017, $558 million remains available under the authorization.

During the year-to-date period ended September 30, 2017, the Company repurchased approximately 7 million shares of common stock for a total of $516 million. During the year-to-date period ended October 1, 2016, the Company repurchased 6 million shares of common stock for a total of $426 million.

Comprehensive income

Comprehensive income includes net income and all other changes in equity during a period except those resulting from investments by or distributions to shareholders. Other comprehensive income consists of foreign currency translation adjustments, fair value adjustments associated with cash flow hedges and adjustments for net experience losses and prior service cost related to employee benefit plans.

Reclassifications out of AOCI for the quarter and year-to-date periods ended September 30, 2017 and October 1, 2016, consisted of the following:



(millions)
Details about AOCI components	Amount reclassified from AOCI						Line item impacted within Income Statement
	Quarter ended September 30, 2017			Year-to-date period ended September 30, 2017
(Gains) losses on cash flow hedges:
Foreign currency exchange contracts	$	—		$	(1	)	COGS
Interest rate contracts	3			8			Interest expense
	$	3		$	7		Total before tax
	(1		)	(2		)	Tax expense (benefit)
	$	2		$	5		Net of tax
Amortization of postretirement and postemployment benefits:
Net experience loss	$	—		$	1		See Note 9 for further details
	$	—		$	1		Total before tax
	—			—			Tax expense (benefit)
	$	—		$	1		Net of tax
Total reclassifications	$	2		$	6		Net of tax




(millions)
Details about AOCI components	Amount reclassified from AOCI						Line item impacted within Income Statement
	Quarter ended October 1, 2016			Year-to-date period ended October 1, 2016
(Gains) losses on cash flow hedges:
Foreign currency exchange contracts	$	(4	)	$	(11	)	COGS
Foreign currency exchange contracts	(1		)	(1		)	SGA
Interest rate contracts	2			10			Interest expense
Commodity contracts	3			10			COGS
	$	—		$	8		Total before tax
	(1		)	(4		)	Tax expense (benefit)
	$	(1	)	$	4		Net of tax
Amortization of postretirement and postemployment benefits:
Net experience loss	$	1		$	3		See Note 9 for further details
Prior service cost	1			3			See Note 9 for further details
	$	2		$	6		Total before tax
	(1		)	(1		)	Tax expense (benefit)
	$	1		$	5		Net of tax
Total reclassifications	$	—		$	9		Net of tax

Accumulated other comprehensive income (loss), net of tax, as of September 30, 2017 and December 31, 2016 consisted of the following:



(millions)	September 30, 2017			December 31, 2016
Foreign currency translation adjustments	$	(1,402	)	$	(1,505	)
Cash flow hedges — unrealized net gain (loss)	(62		)	(67		)
Postretirement and postemployment benefits:
Net experience loss	(13		)	(14		)
Prior service cost	11			11
Total accumulated other comprehensive income (loss)	$	(1,466	)	$	(1,575	)