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 9 million and 6 million anti-dilutive potential common shares excluded from the reconciliation for the quarter and year-to-date periods ended June 30, 2018, respectively. There were 5 million anti-dilutive potential common shares excluded from the reconciliation for the quarter and year-to-date periods ended July 1, 2017, respectively.

Quarters ended June 30, 2018 and July 1, 2017:




(millions, except per share data)	Net income		Average shares outstanding	Earnings per share
2018
Basic	$	596	347	$	1.72
Dilutive potential common shares			1	(0.01		)
Diluted	$	596	348	$	1.71
2017
Basic	$	283	349	$	0.81
Dilutive potential common shares			3	(0.01		)
Diluted	$	283	352	$	0.80

Year-to-date periods ended June 30, 2018 and July 1, 2017:




(millions, except per share data)	Net income		Average shares outstanding	Earnings per share
2018
Basic	$	1,040	346	$	3.00
Dilutive potential common shares			2	(0.01		)
Diluted	$	1,040	348	$	2.99
2017
Basic	$	549	350	$	1.57
Dilutive potential common shares			3	(0.01		)
Diluted	$	549	353	$	1.56

In December 2017, the board of directors approved a new authorization to repurchase up to $1.5 billion of our common stock beginning in January 2018 through December 2019. As of June 30, 2018, $1.45 billion remains available under the authorization.

During the year-to-date period ended June 30, 2018, the Company repurchased less than 1 million shares of common stock for a total of $50 million. During the year-to-date period ended July 1, 2017, the Company repurchased 6 million shares of common stock for a total of $435 million, of which $390 million was paid and $45 million was payable at July 1, 2017.

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, net of related tax effects.

Reclassifications out of AOCI for the quarter and year-to-date periods ended June 30, 2018 and July 1, 2017, consisted of the following:



(millions)
Details about AOCI components	Amount reclassified from AOCI						Line item impacted within Income Statement
	Quarter ended June 30, 2018			Year-to-date period ended June 30, 2018
(Gains) losses on cash flow hedges:
Foreign currency exchange contracts	$	—		$	—		COGS
Interest rate contracts	2			4			Interest expense
	$	2		$	4		Total before tax
	(1		)	(1		)	Tax expense (benefit)
	$	1		$	3		Net of tax
Amortization of postretirement and postemployment benefits:
Net experience loss	$	(1	)	$	(2	)	OIE
	$	(1	)	$	(2	)	Total before tax
	—			—			Tax expense (benefit)
	$	(1	)	$	(2	)	Net of tax
Total reclassifications	$	—		$	1		Net of tax




(millions)
Details about AOCI components	Amount reclassified from AOCI					Line item impacted within Income Statement
	Quarter ended July 1, 2017		Year-to-date period ended July 1, 2017
(Gains) losses on cash flow hedges:
Foreign currency exchange contracts	$	—	$	(1	)	COGS
Foreign currency exchange contracts	—		—			SGA
Interest rate contracts	2		5			Interest expense
Commodity contracts	—		—			COGS
	$	2	$	4		Total before tax
	—		(1		)	Tax expense (benefit)
	$	2	$	3		Net of tax
Amortization of postretirement and postemployment benefits:
Net experience loss	$	—	$	1		See Note 8 for further details
Prior service cost	—		—			See Note 8 for further details
	$	—	$	1		Total before tax
	—		—			Tax expense (benefit)
	$	—	$	1		Net of tax
Total reclassifications	$	2	$	4		Net of tax

Accumulated other comprehensive income (loss), net of tax, as of June 30, 2018 and December 30, 2017 consisted of the following:



(millions)	June 30, 2018			December 30, 2017
Foreign currency translation adjustments	$	(1,473	)	$	(1,426	)
Cash flow hedges — unrealized net gain (loss)	(56		)	(61		)
Postretirement and postemployment benefits:
Net experience loss	32			34
Prior service cost	(4		)	(4		)
Total accumulated other comprehensive income (loss)	$	(1,501	)	$	(1,457	)