Pfizer 2008 Annual Report Download - page 84

Notes to Consolidated Financial Statements
Pfizer Inc and Subsidiary Companies
16. Earnings per Common Share
Basic and diluted EPS were computed using the following common share data:
YEAR ENDED DECEMBER 31,
(MILLIONS OF DOLLARS) 2008 2007 2006
EPS Numerator—Basic:
Income from continuing operations $8,026 $8,213 $11,024
Less: Preferred stock dividends—net of tax 345
Income available to common shareholders from continuing operations 8,023 8,209 11,019
Discontinued operations:
Income/(loss) from discontinued operations—net of tax (2) (3) 433
Gains/(losses) on sales of discontinued operations—net of tax 80 (66) 7,880
Discontinued operations—net of tax 78 (69) 8,313
Net income available to common shareholders $8,101 $8,140 $19,332
EPS Denominator—Basic:
Weighted-average number of common shares outstanding 6,727 6,917 7,242
EPS Numerator—Diluted:
Income from continuing operations $8,026 $8,213 $11,024
Less: ESOP contribution—net of tax —23
Income available to common shareholders from continuing operations 8,026 8,211 11,021
Discontinued operations:
Income/(loss) from discontinued operations—net of tax (2) (3) 433
Gains/(losses) on sales of discontinued operations—net of tax 80 (66) 7,880
Discontinued operations—net of tax 78 (69) 8,313
Net income available to common shareholders $8,104 $8,142 $19,334
EPS Denominator—Diluted:
Weighted-average number of common shares outstanding 6,727 6,917 7,242
Common-share equivalents—stock options, stock issuable under employee
compensation plans and convertible preferred stock 23 22 32
Weighted-average number of common shares outstanding and common-share
equivalents 6,750 6,939 7,274
Stock options that had exercise prices greater than the average market price of our
common stock issuable under employee compensation plans(a) 489 514 552
(a) These common stock equivalents were outstanding during 2008, 2007 and 2006, but were not included in the computation of diluted EPS for those
years because their inclusion would have had an anti-dilutive effect.
17. Lease Commitments
We lease properties and equipment for use in our operations. In addition to rent, the leases may require us to pay directly for taxes,
insurance, maintenance and other operating expenses, or to pay higher rent when operating expenses increase. Rental expense,
net of sublease income, was $370 million in 2008, $398 million in 2007 and $420 million in 2006. This table shows future minimum
rental commitments under noncancellable operating leases as of December 31 for the following years:
(MILLIONS OF DOLLARS) 2009 2010 2011 2012 2013
AFTER
2013
Lease commitments $205 $172 $121 $96 $85 $854
18. Insurance
Our insurance coverage reflects market conditions (including cost and availability) existing at the time it is written, and our decision
to obtain insurance coverage or to self-insure varies accordingly. Depending upon the cost and availability of insurance and the
nature of the risk involved, the amount of self-insurance may be significant. The cost and availability of coverage have resulted in
our decision to self-insure certain exposures, including product liability. If we incur substantial liabilities that are not covered by
insurance or substantially exceed insurance coverage and that are in excess of existing accruals, there could be a material adverse
effect on our results of operations in any particular period (see Note 19. Legal Proceedings and Contingencies).
82 2008 Financial Report