-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QG5YpVQiQzrki8OKprPEfaTkr+eLcJ3B6h423OUDR5krD2/dZADsYO2gE/ZdAo+h v2XfwaWC2bG9sgYpNfOq4Q== 0000950117-02-000993.txt : 20020430 0000950117-02-000993.hdr.sgml : 20020430 ACCESSION NUMBER: 0000950117-02-000993 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020416 ITEM INFORMATION: Acquisition or disposition of assets FILED AS OF DATE: 20020430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHARMACIA CORP /DE/ CENTRAL INDEX KEY: 0000067686 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 430420020 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02516 FILM NUMBER: 02625933 BUSINESS ADDRESS: STREET 1: 100 ROUTE 206 NORTH CITY: PEAPACK STATE: NJ ZIP: 07977 BUSINESS PHONE: 9089018000 MAIL ADDRESS: STREET 1: 100 ROUTE 206 NORTH CITY: PEAPACK STATE: NJ ZIP: 07977 FORMER COMPANY: FORMER CONFORMED NAME: MONSANTO CO DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MONSANTO CHEMICAL CO DATE OF NAME CHANGE: 19711003 8-K 1 a32568.txt PHARMACIA CORPORATION 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 --------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 16, 2002 PHARMACIA CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 1-2516 43-0420020 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 100 Route 206 North, Peapack, New Jersey 07977 (Address of Principal Executive Office) (Zip Code)
908-901-8000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) N/A - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 2. Pursuant to existing agreements, the company had rights from Sanofi-Synthelabo, Inc. (Sanofi) to manufacture, sell and market two products in North America: AMBIEN and KERLONE. AMBIEN is a prescription medicine used in the treatment of sleep disorders including insomnia. KERLONE, also a prescription medicine, is used in the treatment of hypertension and cardiovascular disease. Sales of AMBIEN and KERLONE, included in the company's results, were $902 million and $5 million for the year ended December 31, 2001, respectively. From inception of the agreements until December 31, 2001, Pharmacia recorded the sales and expenses of the products and similarly recorded any related assets and liabilities. At December 31, 2001, the company relinquished control over the products to Sanofi and accordingly Pharmacia deconsolidated the related operating assets and liabilities. Additionally, the company ceased recording sales and expenses of AMBIEN and KERLONE as of January 1, 2002. On April 16, 2002, Sanofi exercised its right to acquire all rights to the products in North America in accordance with the agreements. In connection with such acquisition, the company received a payment of $671 million for its interest. The cash is reflected on the following pro forma consolidated balance sheet, but the portion representing the gain on sale is not included in the pro forma consolidated statement of earnings due to its nonrecurring nature. In the second quarter of 2002, the company plans to record the gain resulting from this payment under the caption of "All other, net" on the company's consolidated statement of earnings. The following pro forma consolidated balance sheet and pro forma consolidated statement of earnings and the related explanatory notes reflect the impact of this transaction on the company's reported results as of and for the year ended December 31, 2001. The pro forma consolidated balance sheet reflects the transaction as if it were consummated at December 31, 2001. Accordingly, the adjustments to those balances give effect to all events that are directly attributable to the transaction regardless of whether they have a continuing impact or are nonrecurring. The pro forma consolidated statement of earnings reflects the transaction as if it were consummated at January 1, 2001, the beginning of the company's last fiscal year. All amounts of income and expense that are expected to have a continuing impact on the company are reflected as adjustments. Amounts that are not expected to have a continuing impact on the company's results will not be adjusted. The notes that follow the pro forma consolidated balance sheet and pro forma consolidated statement of earnings provide further explanation of the adjustment amounts as appropriate. The unaudited pro forma consolidated balance sheet and unaudited pro forma consolidated statement of earnings and the related explanatory notes should be read in conjunction with the historical consolidated financial statements and notes thereto and other information included in Pharmacia's 2001 Annual Report to Shareholders, which is incorporated by reference into Pharmacia's Annual Report on Form 10-K for 2001. The unaudited pro forma information presented below is for illustrative purposes only and is not necessarily indicative of the results of operations or financial position that would have actually occurred if the transaction had been consummated on the dates indicated or that may be obtained in the future. PHARMACIA CORPORATION UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2001 (DOLLARS IN MILLIONS)
Pharmacia Pro Forma Actual Adjustments Pro Forma - ------------------------------------------------------------------------------------------------------------- Cash and cash equivalents $ 1,276 A $ 536 $ 1,812 Short-term investments 119 -- 119 Short-term notes receivable-Monsanto 254 -- 254 Trade accounts receivables, net 2,434 -- 2,434 Inventories 1,684 -- 1,684 Deferred income taxes 932 -- 932 Receivables-Monsanto 87 -- 87 Other 880 -- 880 - ------------------------------------------------------------------------------------------------------------ Total Current Assets 7,666 536 8,202 Long-term investments 288 -- 288 Properties, net 4,875 -- 4,875 Goodwill, net of accumulated amortization 1,059 -- 1,059 Other intangible assets, net of accumulated amortization 444 -- 444 Other noncurrent assets 1,729 -- 1,729 Net assets of discontinued operations 6,316 -- 6,316 - ------------------------------------------------------------------------------------------------------------ Total Assets $22,377 $ 536 $22,913 Short-term debt $ 484 $ -- $ 484 Short-term notes payable-Monsanto 30 -- 30 Accounts payable 1,048 -- 1,048 Payables-Monsanto 44 -- 44 Compensation and compensated absences 501 -- 501 Dividends payable 180 -- 180 Income taxes payable 685 B 238 923 Other accrued liabilities 2,031 C (128) 1,903 - ------------------------------------------------------------------------------------------------------------ Total Current Liabilities 5,003 110 5,113 Long-term debt 2,612 -- 2,612 Guarantee of ESOP debt 119 -- 119 Postretirement benefit obligation 996 -- 996 Deferred income taxes 143 -- 143 Other noncurrent liabilities 1,114 -- 1,114 - ------------------------------------------------------------------------------------------------------------ Total Liabilities 9,987 110 10,097 - ------------------------------------------------------------------------------------------------------------ Preferred stock 258 -- 258 Common stock 2,970 -- 2,970 Capital in excess of par value 3,499 -- 3,499 Retained earnings 11,586 D 426 12,012 ESOP-related accounts (294) -- (294) Treasury stock (2,789) -- (2,789) Accumulated other comprehensive loss: Cumulative translation adjustments (2,892) -- (2,892) Unrealized investment gains, net 142 -- 142 Minimum pension liability adjustment (96) -- (96) Unrealized hedging instrument gains 6 -- 6 - ------------------------------------------------------------------------------------------------------------ Total Shareholders' Equity 12,390 426 12,816 - ------------------------------------------------------------------------------------------------------------ Total Liabilities And Shareholders' Equity $22,377 $ 536 $22,913 - ------------------------------------------------------------------------------------------------------------
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS A - To adjust for the receipt of $671 for Pharamacia's interest on April 16, 2002 and the payment of $135 for the settlement of balances payable to Sanofi. B - To reflect estimated taxes due on the gain for the sale of Pharmacia's interest at December 31, 2001. C - To adjust for the amounts payable to Sanofi net of the equity in the product rights. D - To adjust for the retained earnings effect of the aforementioned balance sheet items as follows: Pre-tax gain $ 664 Estimated income tax payable at December 31, 2001 (238) ------ Total $ 426 ===== PHARMACIA CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2001 (DOLLARS IN MILLIONS, EXCEPT PER-SHARE DATA)
Pharmacia Pro Forma Actual Adjustments Pro Forma - -------------------------------------------------------------------------------------------------------------- Net Sales $13,837 A $(907) $12,930 Cost of products sold 2,949 B (218) 2,731 Research and development 2,263 -- 2,263 Selling, general and administrative 6,034 C (36) 5,998 Amortization of goodwill 103 -- 103 Merger and restructuring 673 -- 673 Interest expense 255 -- 255 Interest income (110) -- (110) All other, net 83 D (220) (137) Provision for income taxes 296 E (164) F 132 - -------------------------------------------------------------------------------------------------------------- Earnings from continuing operations $ 1,291 $(269) $ 1,022 - -------------------------------------------------------------------------------------------------------------- Earnings from continuing operations per common share: Basic earnings from continuing operations $ 0.98 G $ 0.78 Diluted earnings from continuing operations 0.97 G 0.77 Total shares (in millions): Basic 1,298 1,298 Diluted 1,322 1,322 - --------------------------------------------------------------------------------------------------------------
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS A - To adjust for net sales of AMBIEN of $902 and KERLONE of $5 for the year ended December 31, 2001. B - To adjust for cost of products sold of AMBIEN of $217 and $1 of KERLONE for the year ended December 31, 2001. C - To adjust for promotional expenses of $29 and distribution costs of $7 for the year ended December 31, 2001. D - To adjust for net payments made to Sanofi for the year ended December 31, 2001. E - Taxes have been estimated at 38 percent based on U.S. federal and state statutory rates for earnings from continuing operations associated with AMBIEN and KERLONE. F - As a result of adjusting the tax provision as described in Note E, the pro forma consolidated statement of earnings reflects an effective tax rate of approximately 11 percent. However, the company believes that this rate is not indicative of current operations and expects an effective rate of approximately 25 percent to be realized during the fiscal year ending 2002. G - Earnings from continuing operations per common share: Basic earnings per share (EPS) is computed by dividing the earnings measure by the weighted average number of shares of common stock outstanding. Diluted EPS is computed assuming the exercise of stock options, conversion of preferred stock and the issuance of stock as incentive compensation to certain employees. Also in the diluted computations, earnings from continuing operations and net earnings are reduced by an incremental contribution to the Employee Stock Ownership Plan (ESOP). This contribution is the after-tax difference between the income the ESOP would have received in preferred stock dividends and the dividend on the common shares assumed to have been outstanding. The assumed conversion of stock options having an exercise price higher than the weighted average market price of the underlying share is not taken into account in the diluted EPS computation as the effect would be antidilutive. The following table reconciles the numerators and denominators of the basic and diluted earnings per share computations.
2001 Basic 2001 Diluted -------------------- --------------------- (Share amounts in millions) Actual Pro forma Actual Pro forma - ---------------------------------------------------------------------------------------------------------- EPS numerator: Earnings from continuing operations $1,291 $1,022 $1,291 $1,022 Less: Preferred stock dividends, net of tax (13) (13) -- -- Less: ESOP contribution, net of tax -- -- (8) (8) ---------------------------------------------- Earnings from continuing operations available to common shareholders $1,278 $1,009 $1,283 $1,014 --------------------------------------------- EPS denominator: Average common shares outstanding 1,298 1,298 1,298 1,298 Effect of dilutive securities: Stock options and stock warrants -- -- 12 12 Convertible instruments and incentive compensation -- -- 12 12 ---------------------------------------------- Total shares 1,298 1,298 1,322 1,322 ---------------------------------------------- Earnings from continuing operations per share $ 0.98 $ 0.78 $ 0.97 $ 0.77
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PHARMACIA CORPORATION (Registrant) Date: April 30, 2002 /s/ R.G. THOMPSON --------------------- R.G. Thompson Senior Vice President and Corporate Controller -----END PRIVACY-ENHANCED MESSAGE-----