A. Significant accounting policies
B. Accounting changes
C. Acquisitions/divestitures
D. Fair value
E. Financial instruments (excluding derivatives)
F. Inventories
G. Financing receivables
H. Plant, rental machines and other property
R. Earnings per share of common stock
The following table presents the computation of basic and diluted earnings per share of common stock.
| For the year ended December 31: | 2008 | 2007 | 2006 |
|---|---|---|---|
| Weighted-average number of shares on which earnings per share calculations are based: | |||
| BASIC: | 1,359,769,923 | 1,423,039,793 | 1,530,806,987 |
| Add — incremental shares under stock compensation plans | 20,190,885 | 22,730,971 | 18,074,331 |
| Add — incremental shares associated with Accelerated Share Repurchase agreements | — | 1,891,095 | — |
| Add — incremental shares associated with convertible notes | — | 1,362,191 | 3,273,706 |
| Add — incremental shares associated with contingently issuable shares | 1,812,328 | 1,546,529 | 1,380,360 |
| Assuming dilution | 1,381,773,136 | 1,450,570,579 | 1,553,535,384 |
| ($ in millions except per share amounts) | 2008 | 2007 | 2006 |
|---|---|---|---|
| BASIC: | |||
| Income from continuing operations | $12,334 | $10,418 | $9,416 |
| Income/(loss) from discontinued operations | — | (00) | 76 |
| NET INCOME FROM TOTAL OPERATIONS ON WHICH BASIC EARNINGS PER SHARE IS CALCULATED | $12,334 | $10,418 | $9,492 |
| ASSUMING DILUTION: | |||
| Income from continuing operations | $12,334 | $10,418 | $9,416 |
| Less — net income applicable to contingently issuable shares | 1 | — | — |
| Income/(loss) from discontinued operations | — | (00) | 76 |
| NET INCOME FROM TOTAL OPERATIONS ON WHICH DILUTED EARNINGS PER SHARE IS CALCULATED | $12,333 | $10,418 | $9,492 |
| Earnings/(loss) per share of common stock: | |||
| ASSUMING DILUTION: | |||
| Continuing operations | $8.93 | $7.18 | $6.06 |
| Discontinued operations | — | (0.00) | 0.05 |
| Total assuming dilution | $8.93 | $7.18 | $6.11 |
| BASIC: | |||
| Continuing operations | $9.07 | $7.32 | $6.15 |
| Discontinued operations | — | (0.00) | 0.05 |
| Total basic | $9.07 | $7.32 | $6.20 |
Weighted-average stock options to purchase 42,981,463 common shares in 2008, 62,782,516 common shares in 2007 and 157,942,283 common shares in 2006 were outstanding, but were not included in the computation of diluted earnings per share because the exercise price of the options was greater than the average market price of the common shares for the full year, and therefore, the effect would have been antidilutive.
