Shareholders' Equity

3 Months Ended

Apr. 04, 2020

Shareholders' Equity

Shareholders' Equity

Note 10. Shareholders’ Equity

A reconciliation of Shareholder’s equity is presented below:

									Accumulated
									Other		Total
	Common		Capital		Treasury		Retained		Comprehensive		Shareholders’
(In millions)	Stock		Surplus		Stock		Earnings		Loss		Equity
Balance at January 4, 2020	$	29	$	1,674	$	(20)	$	5,682	$	(1,847)	$	5,518
Net income		—		—		—		50		—		50
Other comprehensive loss		—		—		—		—		(12)		(12)
Share-based compensation activity		—		37		—		—		—		37
Dividends declared		—		—		—		(5)		—		(5)
Purchases of common stock		—		—		(54)		—		—		(54)
Balance at April 4, 2020	$	29	$	1,711	$	(74)	$	5,727	$	(1,859)	$	5,534
Balance at December 29, 2018	$	30	$	1,646	$	(129)	$	5,407	$	(1,762)	$	5,192
Net income		—		—		—		179		—		179
Other comprehensive income		—		—		—		—		26		26
Share-based compensation activity		—		43		—		—		—		43
Dividends declared		—		—		—		(5)		—		(5)
Purchases of common stock		—		—		(202)		—		—		(202)
Balance at March 30, 2019	$	30	$	1,689	$	(331)	$	5,581	$	(1,736)	$	5,233

Dividends per share of common stock were $0.02 for both the first quarter of 2020 and 2019.

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:

	Three Months Ended
	April 4,		March 30,
(In thousands)	2020		2019
Basic weighted-average shares outstanding		228,311		234,839
Dilutive effect of stock options		616		1,598
Diluted weighted-average shares outstanding		228,927		236,437

Stock options to purchase 7.5 million and 3.1 million shares of common stock are excluded from the calculation of diluted weighted-average shares outstanding for the first quarter of 2020 and  2019, respectively, as their effect would have been anti-dilutive.

Accumulated Other Comprehensive Loss and Other Comprehensive Income (Loss)

The components of Accumulated other comprehensive loss are presented below:

	Pension and		Foreign		Deferred		Accumulated
	Postretirement		Currency		Gains (Losses)		Other
	Benefits		Translation		on Hedge		Comprehensive
(In millions)	Adjustments		Adjustments		Contracts		Loss
Balance at January 4, 2020	$	(1,811)	$	(36)	$	—	$	(1,847)
Other comprehensive loss before reclassifications		—		(40)		(8)		(48)
Reclassified from Accumulated other comprehensive loss		37		—		(1)		36
Balance at April 4, 2020	$	(1,774)	$	(76)	$	(9)	$	(1,859)
Balance at December 29, 2018	$	(1,727)	$	(32)	$	(3)	$	(1,762)
Other comprehensive income before reclassifications		—		3		3		6
Reclassified from Accumulated other comprehensive loss		21		—		(1)		20
Balance at March 30, 2019	$	(1,706)	$	(29)	$	(1)	$	(1,736)

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

	April 4, 2020						March 30, 2019
			Tax						Tax
	Pre-Tax		(Expense)		After-Tax		Pre-Tax		(Expense)		After-Tax
(In millions)	Amount		Benefit		Amount		Amount		Benefit		Amount
Three Months Ended
Pension and postretirement benefits adjustments:
Amortization of net actuarial loss*	$	46	$	(10)	$	36	$	25	$	(5)	$	20
Amortization of prior service cost*		2		(1)		1		1		—		1
Pension and postretirement benefits adjustments, net		48		(11)		37		26		(5)		21
Deferred gains (losses) on hedge contracts:
Current deferrals		(9)		1		(8)		4		(1)		3
Reclassification adjustments		(1)		—		(1)		(1)		—		(1)
Deferred gains (losses) on hedge contracts, net		(10)		1		(9)		3		(1)		2
Foreign currency translation adjustments		(37)		(3)		(40)		1		2		3
Total	$	1	$	(13)	$	(12)	$	30	$	(4)	$	26

*These components of other comprehensive income (loss) are included in the computation of net periodic pension cost (credit). See Note 16 of our 2019 Annual Report on Form 10-K for additional information.