Pfizer 2010 Annual Report Download - page 100

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
16. Earnings per Common Share Attributable to Common Shareholders
Basic and diluted EPS were computed using the following common share data:
YEAR ENDED DECEMBER 31,
(IN MILLIONS) 2010 2009 2008
EPS Numerator—Basic:
Income from continuing operations $8,298 $8,630 $8,049
Less: Net income attributable to noncontrolling interests 32 923
Income from continuing operations attributable to Pfizer Inc. 8,266 8,621 8,026
Less: Preferred stock dividends—net of tax 223
Income from continuing operations attributable to Pfizer Inc. common shareholders 8,264 8,619 8,023
Discontinued operations—net of tax (9) 14 78
Net income attributable to Pfizer Inc. common shareholders $8,255 $8,633 $8,101
EPS Numerator—Diluted:
Income from continuing operations attributable to Pfizer Inc. common shareholders and
assumed conversions $8,266 $8,621 $8,026
Discontinued operations—net of tax (9) 14 78
Net income attributable to Pfizer Inc. common shareholders and assumed conversions $8,257 $8,635 $8,104
EPS Denominator:
Weighted-average number of common shares outstanding—Basic 8,036 7,007 6,727
Common-share equivalents: stock options, stock issuable under employee compensation
plans and convertible preferred stock 38 38 23
Weighted-average number of common shares outstanding—Diluted 8,074 7,045 6,750
Stock options that had exercise prices greater than the average market price of our
common stock issuable under employee compensation plans(a) 413 400 489
(a) These common stock equivalents were outstanding during 2010, 2009 and 2008 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 $394 million in 2010, $364 million in 2009 and $370 million in 2008. This table shows future minimum
rental commitments under non-cancelable operating leases as of December 31 for the following years:
(MILLIONS OF DOLLARS) 2011 2012 2013 2014 2015
AFTER
2015
Lease commitments $185 $158 $138 $113 $95 $756
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
self-insuring 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).
19. Legal Proceedings and Contingencies
We and certain of our subsidiaries are involved in various patent, product liability, consumer, commercial, securities, environmental
and tax litigations and claims; government investigations; and other legal proceedings that arise from time to time in the ordinary
course of our business. We do not believe any of them will have a material adverse effect on our financial position.
We record accruals for income tax contingencies to the extent that we conclude that a tax position is not sustainable under a “more-
likely-than-not” standard, and we record our estimate of the potential tax benefits in one tax jurisdiction that could result from the
98 2010 Financial Report