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Shareholders' Equity
 12 Months Ended
Dec. 29, 2018
Shareholders' Equity  
Shareholders' Equity

 

Note 10. Shareholders’ Equity

 

Capital Stock

We have authorization for 15 million shares of preferred stock with a par value of $0.01 and 500 million shares of common stock with a par value of $0.125.  Outstanding common stock activity is presented below:

 

(In thousands)

 

 

 
2018

 
2017

 
2016

Balance at beginning of year

 

 

 
261,471

 
270,287

 
274,228

Share repurchases

 

 

 
(29,094)

 
(11,917)

 
(6,898)

Share-based compensation activity

 

 

 
3,244

 
3,101

 
2,957

 

 

 

 

 

 

 

 

 

Balance at end of year

 

 

 
235,621

 
261,471

 
270,287

 

 

 

 

 

 

 

 

 

 

Earnings Per Share

We calculate basic and diluted earnings per share (EPS) based on net income, which approximates income available to common shareholders for each period.  Basic EPS is calculated using the two-class method, which includes the weighted-average number of common shares outstanding during the period and restricted stock units to be paid in stock that are deemed participating securities as they provide nonforfeitable rights to dividends.  Diluted EPS considers the dilutive effect of all potential future common stock, including stock options.

 

The weighted-average shares outstanding for basic and diluted EPS are as follows:

 

(In thousands)

 

 

 
2018

 
2017

 
2016

Basic weighted-average shares outstanding

 

 

 
250,196

 
266,380

 
270,774

Dilutive effect of stock options

 

 

 
3,041

 
2,370

 
1,591

 

 

 

 

 

 

 

 

 

Diluted weighted-average shares outstanding

 

 

 
253,237

 
268,750

 
272,365

 

 

 

 

 

 

 

 

 

 

In 2018, 2017 and 2016, stock options to purchase 1.3 million, 1.6 million and 2.0 million shares, respectively, of common stock are excluded from the calculation of diluted weighted-average shares outstanding as their effect would have been anti-dilutive.

 

Accumulated Other Comprehensive Loss

The components of Accumulated other comprehensive loss are presented below:

 

(In millions)

 

Pension and
Postretirement
Benefits
Adjustments

 

Foreign
Currency
Translation
Adjustments

 

Deferred
Gains (Losses)
on Hedge
Contracts

 

Accumulated
Other
Comprehensive
Loss

Balance at December 31, 2016

$
(1,505)

$
(96)

$
(4)

$
(1,605)

Other comprehensive income before reclassifications

 
16

 
107

 
8

 
131

Reclassified from Accumulated other comprehensive loss

 
93

 

—

 
6

 
99

 

 

 

 

 

 

 

 

 

Balance at December 30, 2017

$
(1,396)

$
11

$
10

$
(1,375)

Other comprehensive income before reclassifications

 
(198)

 
(49)

 
(8)

 
(255)

Reclassified from Accumulated other comprehensive loss

 
124

 
6

 
(5)

 
125

Reclassification of stranded tax effects

 
(257)

 

—

 

—

 
(257)

 

 

 

 

 

 

 

 

 

Balance at December 29, 2018

$
(1,727)

$
(32)

$
(3)

$
(1,762)

 

 

 

 

 

 

 

 

 

 

In 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows entities to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) from accumulated other comprehensive loss to retained earnings. The stranded tax effects are comprised of the tax amounts included in accumulated other comprehensive loss at the previous U.S. federal corporate tax rate of 35%, for which the related deferred tax asset or liability was remeasured at the new U.S. federal corporate tax rate of 21% in the fourth quarter of 2017. We elected to early adopt this standard in the fourth quarter of 2018, which resulted in an increase to accumulated other comprehensive loss of $257 million, with an offsetting increase to retained earnings.

 

Other Comprehensive Income (Loss)

The before and after-tax components of other comprehensive income (loss) are presented below

 

 

 

2018

 

2017

 

2016

(In millions)

 

Pre-Tax
Amount

 

Tax
(Expense)
Benefit

 

After-
Tax
Amount

 

Pre-Tax
Amount

 

Tax
(Expense)
Benefit

 

After-
Tax
Amount

 

Pre-Tax
Amount

 

Tax
(Expense)
Benefit

 

After-
Tax
Amount

Pension and postretirement benefits adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses)

$
(248)

$
58

$
(190)

$
18

$
(1)

$
17

$
(382)

$
135

$
(247)

Amortization of net actuarial loss*

 
152

 
(35)

 
117

 
136

 
(48)

 
88

 
104

 
(39)

 
65

Amortization of prior service cost (credit)*

 
9

 
(2)

 
7

 
7

 
(2)

 
5

 
(7)

 
4

 
(3)

Recognition of prior service credit (cost)

 
(20)

 
5

 
(15)

 
(1)

 

—

 
(1)

 
12

 
(5)

 
7

Business disposition

 
7

 

—

 
7

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension and postretirement benefits adjustments, net

 
(100)

 
26

 
(74)

 
160

 
(51)

 
109

 
(273)

 
95

 
(178)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 
(46)

 
(3)

 
(49)

 
100

 
7

 
107

 
(36)

 
(13)

 
(49)

Business disposition

 
6

 

—

 
6

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments, net

 
(40)

 
(3)

 
(43)

 
100

 
7

 
107

 
(36)

 
(13)

 
(49)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred gains (losses) on hedge contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current deferrals

 
(8)

 

—

 
(8)

 
10

 
(2)

 
8

 
11

 
(4)

 
7

Reclassification adjustments

 
(7)

 
2

 
(5)

 
7

 
(1)

 
6

 
17

 
(4)

 
13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred gains (losses) on hedge contracts, net

 
(15)

 
2

 
(13)

 
17

 
(3)

 
14

 
28

 
(8)

 
20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$
(155)

$
25

$
(130)

$
277

$
(47)

$
230

$
(281)

$
74

$
(207)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*These components of other comprehensive income (loss) are included in the computation of net periodic pension cost. See Note 14 for additional information.