Pfizer 2009 Annual Report Download - page 83

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Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
(a) Fair values are determined based on valuation techniques categorized as follows: Level 1 means the use of quoted prices for identical instruments
in active markets; Level 2 means the use of quoted prices for similar instruments in active markets or quoted prices for identical or similar
instruments in markets that are not active or are directly or indirectly observable; Level 3 means the use of unobservable inputs.
(b) Reflects postretirement plan assets, which support a portion of our U.S. retiree medical plans.
The following table presents an analysis of changes during 2009 in Level 3 plan assets, by plan asset category, for our U.S.
qualified pension plans and international pension plans using significant unobservable inputs to measure fair value:
ACTUAL RETURN ON PLAN ASSETS
(MILLIONS OF DOLLARS)
FAIR VALUE,
BEGINNING
OF YEAR
ASSETS HELD,
END OF YEAR
ASSETS SOLD
DURING THE
PERIOD
PURCHASES,
SALES AND
SETTLEMENTS,
NET
TRANSFER
INTO/(OUT OF)
LEVEL 3
EXCHANGE
RATE
CHANGES
FAIR
VALUE,
END OF
YEAR
U.S. qualified pension plans:
Equity securities:
Global equity securities $ 4 $ 2 $ (2) $ 5 $— $ — $ 9
Debt securities:
Government bonds 27 1 — (2) — — 26
Corporate debt securities 26 1 (1) (11) — — 15
Other investments:
Private equity funds 821 (44) 19 47 — — 843
Other 356 (21) 3 116 — — 454
Total Level 3 plan assets $1,234 $(61) $ 19 $155 $ — $ — $1,347
International pension plans:
Equity securities:
Global equity securities $ 72 $ 15 $(25) $ (32) $— $ 3 $ 33
Equity commingled funds 29 (5) — (6) — 2 20
Debt securities:
Corporate debt securities 4 — — (1) 2 — 5
Other investments:
Private equity funds 26 (4) — 8 — 4 34
Insurance contracts 309 11 — (30) 6 50 346
Other 122 (10) — — 4 11 127
Total Level 3 plan assets $ 562 $ 7 $(25) $ (61) $12 $70 $ 565
As of December 31, 2009, the following methods and assumptions were used to estimate the fair value of our pension and
postretirement plans’ assets:
•Cash and cash equivalents, Equity commingled funds, Fixed-income commingled funds—observable prices.
•Global equity securities—quoted market prices.
•Government bonds, Corporate debt securities—observable market prices.
•Other investments—principally unobservable prices adjusted by cash contributions and distributions.
2009 Financial Report 81