Equity

3 Months Ended

Jul. 03, 2021

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. There were 7 million and 11 million anti-dilutive potential common shares excluded from the calculation for the quarter and year-to-date periods ended July 3, 2021. There were 8 million and 7 million anti-dilutive potential common shares excluded from the calculation for the quarter and year-to-date periods ended June 27, 2020. Please refer to the Consolidated Statement of Income for basic and diluted earnings per share for the quarter and year-to-date periods ended July 3, 2021 and June 27, 2020.

Share repurchases

In February 2020, the board of directors approved a new authorization to repurchase up to $1.5 billion of our common stock through December 2022. During the quarter ended July 3, 2021, the Company did not repurchase any shares of common stock. During the year-to-date period ended July 3, 2021, the Company repurchased approximately 4 million shares of common stock for a total of $240 million. During the quarter and year-to-date periods ended June 27, 2020, the Company did not repurchase any shares of common stock.

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, adjustments for net experience losses and prior service cost related to employee benefit plans, and adjustments for unrealized gains and losses on available-for-sale securities, net of related tax effects.

Reclassifications out of Accumulated other comprehensive income (AOCI) for the quarter and year-to-date periods ended July 3, 2021 and June 27, 2020, consisted of the following:


(millions)
Details about AOCI components	Amount reclassified from AOCI				Line item impacted within Income Statement
	Quarter ended July 3, 2021		Year-to-date period ended July 3, 2021
(Gains) losses on cash flow hedges:


Interest rate contracts (a)	$	10	$	15	Interest expense

	$	10	$	15	Total before tax
	(3)		(4)		Tax expense (benefit)
	$	7	$	11	Net of tax
Amortization of postretirement and postemployment benefits:
Net experience (gain) loss (b)	$	(1)	$	(2)	OIE

	$	(1)	$	(2)	Total before tax
	1		1		Tax expense (benefit)
	$	—	$	(1)	Net of tax





Total reclassifications	$	7	$	10	Net of tax



(millions)
Details about AOCI components	Amount reclassified from AOCI				Line item impacted within Income Statement
	Quarter ended June 27, 2020		Year-to-date period ended June 27, 2020
(Gains) losses on cash flow hedges:


Interest rate contracts (a)	$	5	$	7	Interest expense

	$	5	$	7	Total before tax
	(2)		(2)		Tax expense (benefit)
	$	3	$	5	Net of tax
Amortization of postretirement and postemployment benefits:
Net experience loss (b)	$	(1)	$	(2)	OIE
Prior service cost (b)	(1)		(1)		OIE
	$	(2)	$	(3)	Total before tax
	1		1		Tax expense (benefit)
	$	(1)	$	(2)	Net of tax





Total reclassifications	$	2	$	3	Net of tax

(a) See Derivative instruments and fair value measurements note

(b) See Employee benefits note

Accumulated other comprehensive income (loss), net of tax, as of July 3, 2021 and January 2, 2021 consisted of the following:


(millions)	July 3, 2021		January 2, 2021
Foreign currency translation adjustments	$	(1,637)	$	(1,668)
Cash flow hedges — unrealized net gain (loss)	(17)		(57)
Postretirement and postemployment benefits:
Net experience gain (loss)	1		2
Prior service credit (cost)	(12)		(12)
Available-for-sale securities unrealized net gain (loss)	2		3
Total accumulated other comprehensive income (loss)	$	(1,663)	$	(1,732)