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Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
2013 Financial Report
97
The following table provides an analysis of the changes in our more significant investments valued using significant unobservable inputs
(including those reported as part of Liabilities of discontinued operations):
Year Ended December 31,
U.S. Qualified Pension Plans International Pension Plans
Private Equity Funds Other Insurance Contracts Other
(MILLIONS OF DOLLARS) 2013 2012 2013 2012 2013 2012 2013 2012
Fair value, beginning $ 866 $ 920 $757 $656 $348 $366 $389 $348
Actual return on plan assets:
Assets held, ending 75 429 61 15 88(14)
Assets sold during the period ——(6) ————5
Purchases, sales and settlements, net (119)(58) 45 40 (41)(5) 63 50
Transfer into/(out of) Level 3 ————(16)(5) 58 —
Exchange rate changes ————(6) (16)2—
Fair value, ending $ 822 $ 866 $825 $757 $300 $348 $520 $389
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.
Basis of Presentation and Significant Accounting Policies: Fair Value. For a description of the risks associated with estimates and
assumptions, see Note 1C. Basis of Presentation and 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 review the methodologies, inputs and outputs of third-party pricing services for reasonableness.
The following table provides the long-term target asset allocations ranges and the percentage of the fair value of plan assets for benefit plans:
As of December 31,
Target
Allocation Percentage Percentage of Plan Assets
(PERCENTAGES) 2013 2013 2012
U.S. qualified pension plans
Cash and cash equivalents 0-10 2.8% 2.9%
Equity securities 35-55 51.5%45.9%
Debt securities 30-55 30.7%35.5%
Real estate and other investments 5-18 15.0%15.7%
Total 100%100%100%
International pension plans
Cash and cash equivalents 0-10 2.8% 3.9%
Equity securities 35-55 51.9%51.6%
Debt securities 30-55 29.0%31.0%
Real estate and other investments 5-18 16.3%13.5%
Total 100%100%100.0%
U.S. postretirement plans
Cash and cash equivalents 0-5 4.0% 4.4%
Equity securities 10-35 21.7%20.1%
Debt securities 5-30 13.0%15.5%
Real estate, insurance contracts and other investments 55-70 61.3%60.0%
Total 100%100%100%
The plans assets are managed with the objectives of minimizing pension expense and cash contributions over the long term. We utilize long-
term asset allocation ranges in the management of our plans’ invested assets. Our long-term return expectations are developed based on a