FORM 10-K

55 Note 9. 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) 2017 2016 2015 Balance at beginning of year 270,287 274,228 276,582 Stock repurchases (11,917) (6,898) (5,197) Share-based compensation activity 3,101 2,957 2,843 Balance at end of year 261,471 270,287 274,228 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) 2017 2016 2015 Basic weighted-average shares outstanding 266,380 270,774 276,682 Dilutive effect of stock options 2,370 1,591 2,045 Diluted weighted-average shares outstanding 268,750 272,365 278,727 In 2017, 2016 and 2015, stock options to purchase 1.6 million, 2.0 million and 2.1 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 January 2, 2016 $ (1,327) $ (47) $ (24) $ (1,398) Other comprehensive income (loss) before reclassifications (240) (49) 7 (282) Reclassified from Accumulated other comprehensive loss 62 — 13 75 Other comprehensive income (loss) (178) (49) 20 (207) 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 Other comprehensive income 109 107 14 230 Balance at December 30, 2017 $ (1,396) $ 11 $ 10 $ (1,375)