Pfizer 2013 Annual Report Download - page 99

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Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
98
2013 Financial Report
diversified, global investment strategy that takes into account historical experience, as well as the impact of portfolio diversification, active
portfolio management, and our view of current and future economic and financial market conditions. As market conditions and other factors
change, we may adjust our targets accordingly and our asset allocations may vary from the target allocations.
Our long-term asset allocation ranges reflect our asset class return expectations and tolerance for investment risk within the context of the
respective plans’ long-term benefit obligations. These ranges are supported by analysis that incorporates historical and expected returns by
asset class, as well as volatilities and correlations across asset classes and our liability profile. This analysis, referred to as an asset-liability
analysis, also provides an estimate of expected returns on plan assets, as well as a forecast of potential future asset and liability balances.
The investment managers of certain separately managed accounts may be permitted to use derivative securities as described in each
respective investment management agreement.
Investment performance is reviewed on a monthly basis in total, as well as by asset class and individual manager, relative to one or more
benchmarks. Investment performance and detailed statistical analysis of both investment performance and portfolio holdings are conducted, a
large portion of which is presented to senior management on a quarterly basis. Periodic formal meetings are held with each investment
manager to review the investments.
E. Cash Flows
It is our practice to fund amounts for our qualified pension plans that are at least sufficient to meet the minimum requirements set forth in
applicable employee benefit laws and local tax laws.
The following table provides the expected future cash flow information related to our benefit plans:
Pension Plans
(MILLIONS OF DOLLARS) U.S. Qualified
U.S. Supplemental
(Non-Qualified) International Postretirement Plans
Expected employer contributions:
2014 $ 6 $ 150 $305 $246
Expected benefit payments:
2014 $ 828 $ 150 $390 $286
2015 792 123 398 285
2016 803 107 410 293
2017 868 110 418 303
2018 958 124 429 311
2019–2023 4,579 490 2,314 1,661
The table reflects the total U.S. and international plan benefits projected to be paid from the plans or from our general assets under the current
actuarial assumptions used for the calculation of the benefit obligation and, therefore, actual benefit payments may differ from projected
benefit payments.
F. Defined Contribution Plans
We have savings and investment plans in several countries, including the U.S., U.K., Italy, Japan and Canada. For the majority of U.S. plans,
employees may contribute a portion of their salaries and bonuses to the plans, and we match, largely in company stock or company stock
units, a portion of the employee contributions. In the U.S., the matching contributions in company stock are sourced through open market
purchases. Employees are permitted to subsequently diversify all or any portion of their company matching contribution. We recorded charges
related to our plans of $266 million in 2013, $297 million in 2012 and $288 million in 2011.
Note 12. Equity
A. Common Stock
We purchase our common stock through privately negotiated transactions or in open market purchases as circumstances and prices warrant.
Purchased shares under each of the share-purchase plans, which are authorized by our Board of Directors, are available for general corporate
purposes. On December 12, 2011, we announced that the Board of Directors had authorized a $10 billion share-purchase plan, which was
exhausted in the first quarter of 2013. On November 1, 2012, we announced that the Board of Directors had authorized an additional $10
billion share-purchase plan, which became effective on November 30, 2012 and was exhausted in October 2013. On June 27, 2013, we
announced that the Board of Directors had authorized an additional $10 billion share-purchase plan, and share purchases commenced
thereunder in October 2013.