Pfizer 2011 Annual Report Download - page 91

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Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
An analysis of changes in our more significant investments valued using significant unobservable inputs follows:
(MILLIONS OF DOLLARS)
FAIR VALUE
BEGINNING
OF YEAR
ACTUAL RETURN ON PLAN
ASSETS PURCHASES,
SALES AND
SETTLEMENTS,
NET
TRANSFER
INTO/(OUT OF)
LEVEL 3
EXCHANGE
RATE
CHANGES
FAIR
VALUE,
END OF
YEAR
ASSETS
HELD,
END OF YEAR
ASSETS SOLD
DURING THE
PERIOD
2011
U.S. qualified pension plans:
Private equity funds $899 $(246) $55 $212 $ — $ — $920
Other 465 24 (6) 173 — — 656
International pension plans:
Insurance contracts 366 8 — (12) (15) 19 366
Other 215 (4) — 120 12 6 349
2010
U.S. qualified pension plans:
Private equity funds 843 45 42 (31) — — 899
Other 454 21 — (10) — — 465
International pension plans:
Insurance contracts 346 12 — (10) 52 (34) 366
Other 127 (3) — 37 58 (4) 215
A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely
heavily on estimates and assumptions. For a description of our general accounting policies associated with developing fair value
estimates, see Note 1E. Significant Accounting Policies: Fair Value. For a description of the risks associated with estimates and
assumptions, see Note 1C. Significant Accounting Policies: Estimates and Assumptions.
Specifically, 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 inputs that are significant to the estimation of fair value. These unobservable inputs could
include, for example, the investment managers’ assumptions about earnings multiples and future cash flows.
We periodically review the methodologies, inputs and outputs of third-party pricing services for reasonableness.
The long-term target asset allocations ranges and the percentage of the fair value of plan assets for benefit plans follow:
AS OF DECEMBER 31,
TARGET
ALLOCATION
PERCENTAGE PERCENTAGE OF PLAN ASSETS
(PERCENTAGES) 2011 2011 2010
U.S. qualified pension plans:
Cash and cash equivalents 0-5 17.6 11.3
Equity securities 25-50 36.0 42.2
Debt securities 30-55 30.4 33.6
Real estate and other investments 10-15 16.0 12.9
Total 100 100.0 100.0
International pension plans:
Cash and cash equivalents 0-5 4.4 7.7
Equity securities 25-50 50.0 49.8
Debt securities 30-55 32.9 31.6
Real estate and other investments 10-15 12.7 10.9
Total 100 100.0 100.0
U.S. postretirement plans:
Cash and cash equivalents 0-5 4.6 2.9
Equity securities 5-20 9.7 11.3
Debt securities 5-20 8.1 8.9
Real estate, insurance contracts and other investments 65-80 77.6 76.9
Total 100 100.0 100.0
90 2011 Financial Report