Shareholders’ Equity

The Company has authorized one billion shares of common stock and 500,000 shares of preferred stock, each with zero par value. No preferred stock has been issued. At December 31, 2018 and 2017, the Company had approximately 157.1 million shares and 158.7 million shares, respectively, of its common shares in treasury. Treasury stock of $5.3 billion and $5.5 billion at December 31, 2018 and 2017, respectively, is recorded at cost as a reduction of common stock.

At December 31, 2018 and 2017, the foreign currency translation adjustment component of AOCI included $40 million and $59 million of after-tax losses, respectively, pertaining to foreign currency-denominated debt designated as a net investment hedge (see Note 5 for more information).

The following tables set forth the changes in AOCI by component and the reclassifications out of AOCI for the years ended December 31, 2018 and 2017:



	Foreign Currency Translation Adjustment			Deferred Gain (Loss) on Hedging Activities			Pension and Other Postretirement Benefit Liabilities Adjustment			Unrealized Gain (Loss) on Investments			Accumulated Other Comprehensive Income (Loss)
							(In millions)
Balance at December 31, 2016	$	(2,102	)	$	6		$	(521	)	$	19		$	(2,598	)
Other comprehensive income before reclassifications	690			(35		)	243			—			898
Amounts reclassified from AOCI	—			47			55			(1		)	101
Tax effect	59			(1		)	(98		)	2			(38		)
Net of tax amount	749			11			200			1			961
Balance at December 31, 2017	$	(1,353	)	$	17		$	(321	)	$	20		$	(1,637	)
Other comprehensive income before reclassifications	(580		)	(19		)	124			(2		)	(477		)
Amounts reclassified from AOCI	(1		)	76			32			(2		)	105
Tax effect	(28		)	(13		)	(55		)	(1		)	(97		)
Net of tax amount	(609		)	44			101			(5		)	(469		)
Balance at December 31, 2018	$	(1,962	)	$	61		$	(220	)	$	15		$	(2,106	)

The change in foreign currency translation adjustment in 2018 is primarily due to the U.S. dollar appreciation, impacting the Euro and British Pound-denominated equities of the Company’s foreign subsidiaries while the change in 2017 is primarily due to the U.S. dollar depreciation, impacting the Euro and British Pound-denominated equities of the Company’s foreign subsidiaries.



	Amounts reclassified from AOCI Year Ended December 31									Affected line item in the consolidated statement of
Details about AOCI components	2018			2017			2016			earnings
	(In millions)
Foreign currency translation adjustment
	$	(1	)	$	—		$	(75	)	Other income/expense
	—			—			—			Tax
	$	(1	)	$	—		$	(75	)	Net of tax

Deferred loss (gain) on hedging activities
	$	113		$	45		$	82		Cost of products sold
	(36		)	2			18			Other income/expense
	(1		)	(1		)	2			Interest expense
	—			1			35			Revenues
	76			47			137			Total before tax
	(18		)	(18		)	(52		)	Tax on reclassifications
	$	58		$	29		$	85		Net of tax
Pension liability adjustment
Amortization of defined benefit pension items:
Prior service losses (credit)	$	(33	)	$	(57	)	$	(17	)	Other (income) expense - net
Actuarial losses	65			112			44			Other (income) expense - net
	32			55			27			Total before tax
	(8		)	(29		)	(5		)	Tax on reclassifications
	$	24		$	26		$	22		Net of tax
Unrealized loss (gain) on investments
	$	(2	)	$	(1	)	$	—		Other income/expense
	—			—			6			Asset impairment, exit, and restructuring costs
	—			—			—			Tax on reclassifications
	$	(2	)	$	(1	)	$	6		Net of tax