Honeywell 2008 Annual Report Download - page 99

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
Note 7—Earnings (Loss) Per Share
The following table sets forth the computations of basic and diluted earnings (loss) per share:
2008 2007 2006
Basic Assuming
Dilution Basic Assuming
Dilution Basic Assuming
Dilution
Income
Income from continuing operations $ 2,792 $ 2,792 $ 2,444 $ 2,444 $ 2,078 $
Income from discontinued
operations, net of taxes — — — — 5
Net income $ 2,792 $ 2,792 $ 2,444 $ 2,444 $ 2,083 $
Average shares
Average shares outstanding 736,763,174 736,763,174 764,543,613 764,543,613 820,845,838 820,845,838
Dilutive securities issuable in
connection with stock plans — 6,767,253 — 9,683,868 — 5,432,435
Total average shares 736,763,174 743,530,427 764,543,613 774,227,481 820,845,838 826,278,273
Earnings (loss) per share of
common stock
Income from continuing operations $ 3.79 $ 3.76 $ 3.20 $ 3.16 $ 2.53 $
Income from discontinued
operations, net of taxes — — — — 0.01
Net income $ 3.79 $ 3.76 $ 3.20 $ 3.16 $ 2.54 $
In 2008, 2007 and 2006, the diluted earnings per share calculation excludes the effect of stock options when
the options' exercise prices exceed the average market price of the common shares during the period. In 2008,
2007 and 2006, the number of stock options not included in the computation were 17,825,720, 8,599,620 and
22,749,056, respectively. These stock options were outstanding at the end of each of the respective years.
Note 8—Accounts, Notes and Other Receivables
December 31,
2008 2007
Trade $ 5,893 $ 6,209
Other 422 359
6,315 6,568
Less—Allowance for doubtful accounts (186) (181)
$ 6,129 $ 6,387
Trade Accounts Receivable includes $1,195 and $1,084 million of unbilled balances under long-term
contracts as of December 31, 2008 and 2007, respectively. These amounts are billed in accordance with the
terms of the customer contracts to which they relate.
We sell interests in designated pools of trade accounts receivables to third parties. The sold receivables are
over-collateralized by $93 million at December 31, 2008 and we retain a subordinated interest in the pool of
receivables representing that over-collateralization as well as an undivided interest in the balance of the
receivables pools. The overcollateralization provides credit support to the purchasers of the receivable interest by
limiting their losses in the event that a portion of the receivables becomes uncollectable. New receivables are