11-K 1 e11-k.txt PHARMACIA CORPORATION 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to________. Commission file number 1-2516 A. Full title of the plan and the address of the plan, if different from that of issuer named below: THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: PHARMACIA CORPORATION (fka Monsanto Company) 100 Route 206 North Peapack, New Jersey 07977 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee health plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN By: /s/ Alexandra van Horne -------------------------------------- Name: Alexandra van Horne, Chair Pharmacia Corporation Employee Benefits Plans Committee June 30, 2000 3 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN FINANCIAL STATEMENTS December 31, 1999 and 1998 4 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Index to Financial Statements December 31, 1999 and 1998
Page Report of Independent Accountants 1 FINANCIAL STATEMENTS: Statements of Net Assets Available for Plan Benefits as of December 31, 1999 and 1998 2 Statement of Changes in Net Assets Available for Plan Benefits for the year ended December 31, 1999 3 Notes to Financial Statements 4 SUPPLEMENTAL SCHEDULES: Schedule of Assets Held for Investment Purposes as of December 31, 1999 17 Schedule of Reportable Transactions for the year ended December 31, 1999 26
Note: Supplemental schedules required by the Employee Retirement Income Security Act of 1974 that have not been included herein are not applicable to the Pharmacia & Upjohn Employee Savings Plan. 5 Report of Independent Accountants To the Participants and Administrator of The Pharmacia & Upjohn Employee Savings Plan In our opinion, the accompanying statements of net assets available for plan benefits and the related statement of changes in net assets available for plan benefits present fairly, in all material respects, the net assets available for plan benefits of The Pharmacia & Upjohn Employee Savings Plan (the "Plan") at December 31, 1999 and 1998, and the changes in net assets available for plan benefits for the year ended December 31, 1999 in conformity with accounting principles generally accepted in the United States. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of Assets Held for Investment Purposes as of December 31, 1999 and Reportable Transactions for the year ended December 31, 1999 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PricewaterhouseCoopers LLP Florham Park, New Jersey May 26, 2000 6 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Statements of Net Assets Available for Plan Benefits
================================================================================================================= DECEMBER 31, 1999 1998 ----------------------------------------------------------------------------------------------------------------- ASSETS: Investments, at fair value $ 1,388,704,265 $ 1,407,135,496 Investments, at contract value 221,781,807 231,660,788 Receivables: Company contributions, net of forfeitures 29,204,436 23,561,193 Participant contributions - 1,970,150 Dividends and interest receivable 4,570,253 4,608,392 Due from insurance company - 5,756,586 ------------------- -------------------- Total receivables 33,774,689 35,896,321 ------------------- -------------------- Total assets 1,644,260,761 1,674,692,605 ------------------- -------------------- LIABILITIES: Notes payable 260,700,000 276,700,000 Interest payable 44,308,671 42,477,129 Other 882,410 503,343 ------------------- -------------------- Total liabilities 305,891,081 319,680,472 ------------------- -------------------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 1,338,369,680 $ 1,355,012,133 =================== ==================== -----------------------------------------------------------------------------------------------------------------
See accompanying notes to the financial statements. 2 7 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Statement of Changes in Net Assets Available for Plan Benefits
================================================================================================================= FOR THE YEAR ENDED DECEMBER 31, 1999 ----------------------------------------------------------------------------------------------------------------- Additions: Additions to net assets attributed to: Investment income: Net depreciation in fair value of investments $ (74,546,344) Interest 16,141,942 Dividends 52,907,058 Interest on participants' loans 2,388,915 --------------------- Total investment income (loss) (3,108,429) ---------------------- Contributions: Participant 50,174,952 Rollovers 6,286,142 Company, net of forfeitures 29,727,465 Asset transfers, net 46,524,705 --------------------- Total additions 129,604,835 --------------------- Deductions: Deductions from net assets attributed to: Benefits paid to participants 120,949,116 Interest on notes payable 25,298,172 --------------------- Total deductions 146,247,288 --------------------- Net decrease (16,462,453) --------------------- Net assets available for plan benefits: Beginning of year 1,355,012,133 --------------------- End of year $ 1,338,369,680 ===================== -----------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. 3 8 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998 1. DESCRIPTION OF PLAN The following brief description of the Pharmacia & Upjohn Company (the "Company") Employee Savings Plan (the "Plan") is provided only for general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. GENERAL The Company is the sponsor of the Plan and a wholly owned subsidiary of Pharmacia & Upjohn, Inc. ("P&U"). The Plan is a defined contribution plan with two component parts: a Section 401(k) plan and an Employee Stock Ownership Plan (the "ESOP"). The Plan covers substantially all domestic employees of P&U not otherwise covered by another defined contribution plan of P&U. ADMINISTRATION The Administrative Committee is responsible for administering Plan operations in accordance with ERISA plan documents. The Investment Committee is responsible for monitoring Plan investments. CONTRIBUTIONS Participants can elect to contribute on a before-tax or after-tax basis from 1% to 18%, in 1% increments, of their Base Pay, as defined in the Plan document. The Internal Revenue Code ("IRC") contains certain limits on participant contributions to a qualified plan, such as a $10,000 limit on a participant's before-tax contributions during the 1999 calendar year. Other limits also apply to highly compensated employees participating in the Plan. Participants may also elect to make rollover contributions to the Plan from other qualified defined contribution plans. Since 1990, matching contributions have been made through the ESOP. The Company matches 50% of participant contributions from 1% to 5% of Base Pay. The Company matching contributions are the basis for allocating shares of the Company's Series A Convertible Perpetual Preferred Stock ("Preferred Stock") to participants' accounts. Dividends paid to the participants' ESOP accounts are also allocated in Preferred Stock. Preferred Stock allocations are made at the $40.30 purchase price paid by the ESOP at its inception. The Company contributes to the ESOP cash amounts that are necessary to enable the Plan to make its regularly scheduled payments of principal and interest due on the ESOP's outstanding debt and to release Preferred Stock to cover allocations to participant accounts. Employer dividends paid to the ESOP on the Preferred Stock and certain other funds are also used to repay the debt incurred by the Plan to purchase the Preferred Stock from P&U at the inception of the leveraged ESOP (see Note 4). Prior to 1999 Plan year, the Company made a discretionary contribution to the Pharmacia & Upjohn Common Stock Fund (the "P&U Common Stock Fund") in an amount determined annually by the P&U Board of Directors. Effective for the 1999 Plan year, the Plan was amended to eliminate the discretionary contribution. As a result, no discretionary contributions were made to the Plan based upon participants' 1999 Plan year activity. 4 9 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998 INVESTMENT OPTIONS Participant contributions received by the Plan are invested at the direction of the participants in accordance with the terms of the Plan document. Each participant may direct his or her contributions to the following fund options: (a) Income Fund, (b) American Balanced Fund, (c) Indexed Stock Fund, (d) Neuberger Berman Guardian Fund, (e) American Century Ultra Fund, (f) Templeton Foreign Fund, or (g) P&U Common Stock Fund (as of April 1, 1999), or (h) Any combination of the above, provided that a multiple of 1% is directed to each fund selected. Participants may elect to transfer or allocate their participant contribution balances and earnings thereon to any of the above funds. Company contributions (i.e., match and discretionary) and earnings thereon are only posted to the P&U Common Stock Fund and ESOP Fund. Upon completing ten years of employment service and attaining age 55, participants are allowed to transfer a portion (up to a specified percentage) of their P&U Common Stock Fund balance (i.e., pertaining to Company contributions and earnings thereon) and their ESOP Fund balance into the other investment fund options. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions, Company match and discretionary contributions, and plan earnings. Participants' accounts are valued on a daily basis. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account balance. VESTING Participants are always 100% vested in their contributions to the Plan and earnings thereon. Participants who have five or more years of employment service are 100% vested in their Company contribution accounts. Participants who have less than five years of employment service and one or more years of participation in the Plan have a non-forfeitable interest in the Company contributions and earnings thereon within the P&U Common Stock Fund and the ESOP Fund based on the following table: 5 10 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998
============================================================================= YEARS OF PARTICIPATION NON-FORFEITABLE PERCENTAGE ----------------------------------------------------------------------------- 1 but less than 2 33 1/3% 2 but less than 3 66 2/3% 3 or more 100% -----------------------------------------------------------------------------
Participants who cease participation in the Plan may be entitled to forfeited amounts if they re-participate in the Plan within 5 years. PARTICIPANT LOANS The Plan has a loan provision which allows participants to borrow from their fund accounts a minimum of $500 up to a maximum equal to the lesser of 50% of their vested account balance or $50,000 (reduced by the highest outstanding loan balance within the previous twelve months). Loan terms range from 1-5 years or up to 10 years for the purchase of a primary residence. Loans for the purchase of a home have a $3,000 minimum loan amount. The loans are secured by the balance in the participant's account and bear a pre-established interest rate. Interest is credited to the account of the participant. Repayments may not necessarily be made to the same fund from which amounts were borrowed. Repayments are credited to the applicable funds based on the participant's investment elections at the time of repayment. PAYMENT OF BENEFITS Participants who leave P&U may elect to receive their vested Plan balance. However, their P&U Common Stock Fund and ESOP accounts may be subject to forfeiture based upon years of participation and service. Benefits are paid either in cash or in cash and P&U common stock. P&U common stock is issued only with respect to the participant's accounts in the P&U Common Stock Fund and the ESOP Fund. Upon retirement or death, the full value of the participant's accounts is paid in either a lump sum, in installments or by the purchase of an annuity contract. If a participant elects to receive common stock, each share of the Preferred Stock (based on participant records) will be converted into 1.45 shares of P&U common stock. Participants may also elect to make in-service withdrawals subject to certain restrictions. 2. SUMMARY OF ACCOUNTING POLICIES METHOD OF ACCOUNTING The financial statements of the Plan have been prepared on the accrual basis of accounting. In September 1999, the American Institute of Certified Public Accountants issued Statement of Position 99-3 ("SOP 99-3"), "Accounting for and Reporting of Certain Defined Contribution Plan Investments and Other Disclosure Matters". SOP 99-3 simplifies the disclosure for certain investments and is effective for plan years ending after December 15, 1999 with earlier application encouraged. The Plan adopted SOP 99-3 effective for the plan year ended 6 11 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998 December 31, 1999. Accordingly, information previously required to be disclosed about participant-directed fund options is not presented in the Plan's 1999 financial statements. The Plan's 1998 financial statements have been presented to conform to the 1999 presentation. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION Shares of mutual funds are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. Common/collective trust funds are stated at redemption value as determined by the trustees of such funds based upon the underlying securities stated at fair value. Investments in money market instruments are generally short-term and are valued at cost, which approximates market. Investments in guaranteed investment contracts ("GICs") and synthetic investment contracts ("SICs") are reported at their contract value by the insurance companies and underlying banks, respectively, because these investments have fully benefit-responsive features (see Note 5). P&U Common Stock is valued at quoted market price as of the last business day of the Plan year. The value of outstanding participant loans is determined based on the outstanding principal balance as of the last day of the Plan year. P&U Preferred Stock is valued using the higher of the per-share stated value of $40.30 or the quoted market price of P&U common stock multiplied by 1.45 on the last business day of the Plan year. (Note: Preferred Stock share balances maintained by the Plan's trustee and recordkeeper are on a basis equal to one-thousandth of the share balance reflected on the Company's financial statements and the $40,300 stated value.) Purchases and sales of securities are reflected on a trade-date basis. Dividend income is recorded on the ex-dividend date. Income from other investments is recorded as earned on an accrual basis. The Plan presents in the statement of changes in net assets available for plan benefits, the net appreciation (depreciation) in the fair value of its investments which consists of the realized gains and losses and the unrealized appreciation (depreciation) on those investments. PAYMENT OF BENEFITS Benefit payments are recorded when paid. 7 12 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998 PLAN EXPENSES Effective January 1, 1999, the Plan was amended to allow outside service provider expenses (e.g., recordkeeping and trustee fees) incurred in the operation of the Plan to be charged to the Plan. However, the Company continued to pay these expenses during 1999 and received a reimbursement from the Plan for the applicable 1999 expenses in 2000. An accrual for this reimbursement is included in other liabilities as of December 31, 1999. Investment manager fees were paid by the Plan during 1999 and 1998 and are netted against investment income. FORFEITURES Forfeited amounts are used to pay expenses of the Plan, interest on debt incurred by the Plan and to reduce Company contributions. Forfeitures which have not been utilized amounted to $599,130 and $301,970 as of December 31, 1999 and 1998, respectively. RISKS AND UNCERTAINTIES The Plan provides for various investment options in any combination of stocks, mutual funds, common/collective trusts, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits. 3. INVESTMENTS The following presents investments that represent 5 percent or more of the Plan's net assets.
==================================================================================================================== DECEMBER 31, 1999 1998 -------------------------------------------------------------------------------------------------------------------- Income Fund $ 245,099,642 $ 241,488,570 Neuberger Berman Guardian Fund (3,978,639 and 3,519,158 units, respectively) 73,604,822 78,899,515 Indexed Stock Fund (6,424,626 and 6,552,127 units, respectively) 261,238,026 220,118,917 American Century Ultra Fund (4,010,145 and 3,772,314 units, respectively) 183,584,440 126,033,009 P&U Common Stock (4,680,178 and 4,794,837 shares, respectively)* 210,608,010 271,507,645 P&U Preferred Stock (6,692,442 and 6,861,966 shares, respectively)* 436,681,847 563,410,319 --------------------------------------------------------------------------------------------------------------------
*Nonparticipant-directed 8 13 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998 During 1999, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $74,546,344 as follows:
===================================================================================== 1999 ------------------------------------------------------------------------------------- Mutual funds $ 47,262,961 Common Stock (54,239,326) Preferred Stock (113,228,095) Common/collective trust funds 45,658,116 --------------------- $ (74,546,344) ===================== -------------------------------------------------------------------------------------
4. NONPARTICIPANT-DIRECTED INVESTMENTS P&U COMMON STOCK FUND Effective April 1, 1999, the P&U Common Stock Fund was added as an investment option into which participants can direct their contributions and/or transfer existing balances. However, certain Company contribution balances (and earnings thereon) within the P&U Common Stock Fund can only be transferred out of the fund into other investment options after participants satisfy certain age and service requirements. Because the participant-directed and nonparticipant-directed components of this fund cannot be easily separated, all assets and activity within this fund have been disclosed as nonparticipant-directed for purposes of this report. Below are the net assets and significant components of the changes in net assets relating to the P&U Common Stock Fund:
====================================================================================================================== 1999 1998 ---------------------------------------------------------------------------------------------------------------------- Investments: Short-term investment funds $ 3,721,116 $ 1,599,289 Pharmacia & Upjohn, Inc. Common Stock 210,608,010 271,507,645 ------------------- -------------------- Total investments 214,329,126 273,106,934 Receivables: Dividends and interest receivable 15,251 7,923 Discretionary Company contribution - 2,543,195 Receivable from other investment funds 107,173 - Other receivables - 77,714 ------------------- -------------------- Total receivables 122,424 2,628,832 ------------------- -------------------- Liabilities: Payable to other investment funds - 39,382 Other liabilities 8,816 567 ------------------- -------------------- Total liabilities 8,816 39,949 ------------------- -------------------- Net assets available for plan benefits $ 214,442,734 $ 275,695,817 =================== ==================== ----------------------------------------------------------------------------------------------------------------------
9 14 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998
=========================================================================================================================== YEAR ENDED DECEMBER 31, 1999 --------------------------------------------------------------------------------------------------------------------------- Additions: Additions to net assets attributed to: Investment income: Net depreciation $ (54,239,326) Interest 1,430,237 Dividends 3,851,508 -------------------- Total investment income (loss) (48,957,581) -------------------- Participant contributions (including rollovers) 1,904,744 Loan repayments (principal and interest) 3,651,481 Transfers from other investment funds, net 15,007,032 ------------------- Total additions (28,394,324) -------------------- Deductions: Deductions from net assets attributed to: Benefits paid to participants (29,972,945) Loans to participants (2,885,814) -------------------- Total deductions (32,858,759) -------------------- Net decrease (61,253,083) Net assets available for plan benefits: Beginning of year 275,695,817 -------------------- End of year $ 214,442,734 =================== ---------------------------------------------------------------------------------------------------------------------------
ESOP AND NOTES PAYABLE On March 1, 1990, the ESOP borrowed $275 million from the Bank of New York through the issuance of amortizing notes. These notes, which are guaranteed by P&U, mature in 2004 and pay interest at an annual rate of 9.79%. The proceeds of this debt were paid to P&U to liquidate $275 million of an original $300 million loan from P&U to the ESOP. The remaining principal balance on these notes was $217,700,000 with unpaid interest of $21,312,830 and $239,700,000 with unpaid interest of $23,466,630 as of December 31, 1999 and 1998, respectively. As of March 1, 1990, the ESOP also issued a new note to P&U in settlement of the remaining balance on the original ESOP loan. This note, in the amount of $25 million, carries an interest rate of 6.25% per annum. Interest accrues and is payable, along with principal, no later than the maturity date of February 1, 2005. The balance of this note, including unpaid interest, was $45,388,998 and $42,719,057 at December 31, 1999 and 1998, respectively. 10 15 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998 Effective January 31, 1997, the ESOP and State Street Bank entered into an agreement, whereby the ESOP can borrow amounts that in the aggregate cannot exceed $95,000,000 (collectively the "New Loans"). Any such borrowings bear interest at 7.00% per annum and will be due no later than December 31, 2010. No interest shall be due until the maturity date of any New Loans. The proceeds of each New Loan are to be used to pay principal and interest then due on any existing ESOP loans. In relation to New Loans, the ESOP had drawings of $18,000,000 with unpaid interest of $2,606,843 and $12,000,000 with unpaid interest of $1,291,442 as of December 31, 1999 and 1998, respectively. Projected loan payments on the ESOP debt (net of future New Loans) are as follows: ==================================================== YEAR AMOUNT ---------------------------------------------------- 2000 $ 26,000,000 2001 22,166,448 2002 26,354,613 2003 31,868,377 2004 to 2010 154,310,562 ------------------- Total $ 260,700,000 =================== ---------------------------------------------------- Following are the net assets and significant components of the changes in net assets relating to the ESOP: 11 16 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998
============================================================================================================================= DECEMBER 31, 1999 ----------------------------------------------------------------------------------------------------------------------------- ALLOCATED UNALLOCATED TOTAL --------- ----------- ----- Investments: Short-term investment funds $ - $ 13,583,734 $ 13,583,734 Pharmacia & Upjohn, Inc. Preferred Stock, Series A convertible 165,753,679 270,928,168 436,681,847 ----------------- ------------------ ----------------- Total investments 165,753,679 284,511,902 450,265,581 ----------------- ------------------ ----------------- Receivables: Dividends and interest receivable - 4,455,913 4,455,913 Company contributions, net of forfeitures - 29,204,436 29,204,436 Other receivables - 23,029 23,029 ----------------- ------------------ ----------------- Total receivables - 33,683,378 33,683,378 ----------------- ------------------ ----------------- Liabilities: Notes payable - 260,700,000 260,700,000 Interest payable - 44,308,671 44,308,671 ----------------- ------------------ ----------------- Total liabilities - 305,008,671 305,008,671 ----------------- ------------------ ----------------- Net assets available for plan benefits $ 165,753,679 $ 13,186,609 $ 178,940,288 ================= ================== ================= -----------------------------------------------------------------------------------------------------------------------------
============================================================================================================================= DECEMBER 31, 1998 ----------------------------------------------------------------------------------------------------------------------------- ALLOCATED UNALLOCATED TOTAL --------- ----------- ----- Investments: Short-term investment funds $ - $ 13,827,436 $ 13,827,436 Pharmacia & Upjohn, Inc. Preferred Stock, Series A convertible 185,954,691 377,455,628 563,410,319 ------------------ ------------------ ----------------- Total investments 185,954,691 391,283,064 577,237,755 ------------------ ------------------ ----------------- Receivables: Dividends and interest receivable - 4,477,600 4,477,600 Company contributions, net of forfeitures - 21,017,998 21,017,998 Other receivables - 8,849 8,849 ------------------ ------------------ ----------------- Total receivables - 25,504,447 25,504,447 ------------------ ------------------ ----------------- Liabilities: Notes payable - 276,700,000 276,700,000 Interest payable - 42,477,129 42,477,129 ------------------ ------------------ ----------------- Total liabilities - 319,177,129 319,177,129 ------------------ ------------------ ----------------- Net assets available for plan benefits $ 185,954,691 $ 97,610,382 $ 283,565,073 ================== ================== ================= -----------------------------------------------------------------------------------------------------------------------------
12 17 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998
============================================================================================================================= YEAR ENDED DECEMBER 31, 1999 ----------------------------------------------------------------------------------------------------------------------------- ALLOCATED UNALLOCATED TOTAL --------- ----------- ----- Additions: Additions to net assets attributed to: Investment income: Net depreciation $ (32,077,242) $ (81,150,853) $ (113,228,095) Interest - 512,009 512,009 Dividends 5,976,550 11,066,957 17,043,507 ------------------ ------------------ ------------------ Total investment income (loss) (26,100,692) (69,571,887) (95,672,579) ------------------ ------------------ ------------------ Company contributions, net of forfeitures - 29,727,465 29,727,465 Allocation of 295,497 shares of Preferred Stock for Company matching contributions 19,281,179 - 19,281,179 ----------------- ------------------ ------------------ Total additions (6,819,513) (39,844,422) (46,663,935) ------------------ ------------------ ------------------ Deductions: Deductions from net assets attributed to: Benefits paid to participants (12,807,446) - (12,807,446) Interest on notes payable - (25,298,172) (25,298,172) Transfers to other investment funds (574,053) - (574,053) Allocation of 295,497 shares of Preferred Stock for Company matching contributions - (19,281,179) (19,281,179) ------------------ ----------------- ------------------ Total deductions (13,381,499) (44,579,351) (57,960,850) ------------------ ----------------- ------------------ Net decrease (20,201,012) (84,423,773) (104,624,785) Net assets available for plan benefits: Beginning of year 185,954,691 97,610,382 283,565,073 ------------------ ----------------- ----------------- End of year $ 165,753,679 $ 13,186,609 $ 178,940,288 ================== ================= ================= -----------------------------------------------------------------------------------------------------------------------------
5. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES The Income Fund consists primarily of benefit responsive GICs and SICs. The contract value of the GICs and SICs represents the cost or book-value of the contract plus accrued interest. At December 31, 1999 and 1998, the Plan held GICs with a contract value of $40,474,517 and $79,920,660, respectively. The contract value of the SICs represents fair value of the underlying asset plus the book-value of the wrapper contract associated with the underlying asset. At December 31, 1999 and 1998, SIC fair values were $177,738,536 and $142,561,482, respectively. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuers or otherwise. The average portfolio yield and crediting interest rates were approximately 6% for 1999 and 1998. The crediting interest rate for GICs is based on a formula agreed upon with the issuers and is maintained for the life of the contract. For SICs, the rate is based on a formula which consists of the yield to maturity, duration, and the book and market values. The rate for SICs is periodically reset, usually quarterly, and cannot be reset below 0%. 13 18 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998 6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for plan benefits according to the financial statements to Form 5500.
========================================================================================================================= DECEMBER 31, 1999 1998 ------------------------------------------------------------------------------------------------------------------------- Net assets available for plan benefits per the financial statements $ 1,338,369,680 $ 1,355,012,133 Amounts allocated to withdrawing participants (1,533,534) (1,409,013) ------------------- -------------------- Net assets available for plan benefits per Form 5500 $ 1,336,836,146 $ 1,353,603,120 =================== ==================== -------------------------------------------------------------------------------------------------------------------------
The following is a reconciliation of benefits paid to participants according to the financial statements to Form 5500:
========================================================================================================== YEAR ENDED DECEMBER 31, 1999 ---------------------------------------------------------------------------------------------------------- Benefits paid to participants per the financial statements $ 120,949,116 Add: Amounts allocated to withdrawing participants at December 31, 1999 1,533,534 Less: Amounts allocated to withdrawing participants at December 31, 1998 (1,409,013) ------------------ Benefits paid to participants per Form 5500 $ 121,073,637 ================== -----------------------------------------------------------------------------------------------------------
Amounts allocated to withdrawing participants are recorded on Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date. 7. RELATED-PARTY TRANSACTIONS The Plan holds shares of P&U common stock. At December 31, 1999 and 1998, the Plan owned 4,680,178 and 4,794,837 shares of Pharmacia & Upjohn, Inc. common stock at a cost of $75,850,797 and $65,768,467, respectively. In addition, Plan funds are invested in a short-term investment fund as well as SICs issued by Street Bank & Trust Company, a trustee of the Plan. At December 31, 1999 and 1998, the fair value of the State Street Bank & Trust Company short term investment account was $40,622,685 and $25,254,508, respectively and the contract value of the SICs was $22,067,683 and $24,518,083, respectively. At December 31, 1999, Plan funds were also invested in short-term investment funds issued by the Bank of New York, a trustee of 14 19 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998 the Plan. The fair value of the Bank of New York investment at December 31, 1999 was $2,433,421. 8. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would become 100 percent vested in their entire plan balance (including match and discretionary contributions and earnings thereon). 9. TAX STATUS OF THE PLAN The Plan obtained its latest determination letter on April 18, 1996, in which the Internal Revenue Service indicated that the Plan, as then designed, was in compliance with the applicable requirements of the IRC. The Plan has been amended since receiving the determination letter. However, the Company believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan's financial statements. 10. ASSET TRANSFERS, NET The Company merged with SUGEN Inc. during 1999. Effective December 1, 1999, the SUGEN Inc. 401(k) Plan (the "SUGEN Plan") assets were merged into the Plan and $5,381,607 was transferred from the SUGEN Plan into the Plan. Effective December 1, 1999, the Pharmacia U.S. Inc. Employee Savings Plan (the "Pharmacia U.S. Inc. Plan") was merged into the Plan. Related to this plan merger, the statement of net assets available for plan benefits as of December 31, 1999 includes $42,373,142 in investments that were merged into the Plan from the Pharmacia U.S. Inc. Plan. In addition, the Asset transfers, net line item within the statement of changes in net assets available for plan benefits includes an asset transfer into the Plan of $41,143,098 representing the value of the Pharmacia U.S. Inc. Plan as of the effective date of the plan merger. 11. SUBSEQUENT EVENTS Effective January 1, 2000, the Company amended the Plan as follows: - Compensation for purposes of computing participants' contributions to the Plan changed from Base Pay to Total Pay, as defined in the Plan. - Active participants in the Plan as of January 1, 2000 and thereafter are 100% vested in their Company contributions and earnings thereon. - The Company will match 100% of participant contributions, from 1% to 5% of Total Pay, in the form of Preferred Stock within the ESOP. The Plan will allocate shares of Preferred Stock to participants such that, at the time of allocation, the total value of the shares allocated is 15 20 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Notes to Financial Statements December 31, 1999 and 1998 equivalent to the Company match. The value of a share of Preferred Stock will be the closing price of one share of P&U common stock multiplied by the 1.45 conversion factor. - Cash dividends on Preferred Stock allocated to participants' accounts prior to January 1, 2000 will continue to be replaced with additional shares of Preferred Stock using the $40.30 per-share stated value for a share of Preferred Stock. Cash dividends on Preferred Stock allocated to participants' accounts on or after January 1, 2000 will be replaced with additional shares of Preferred Stock using the P&U common stock price multiplied by the 1.45 conversion factor. Effective March 31, 2000, the Company merged with the Monsanto Company to form Pharmacia Corporation. As a result of the merger, the P&U Common Stock Fund received 1.19 shares of Pharmacia common stock for each share of P&U common stock. In addition, each share of P&U Preferred Stock was converted into one share of convertible perpetual preferred stock of Pharmacia Corporation. The Pharmacia Corporation preferred stock is convertible into 1.7255 shares of Pharmacia Corporation common stock. 16 21 SUPPLEMENTAL SCHEDULES 22 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes December 31, 1999
EIN# 38-1123360 Plan# 002 (c) (b) DESCRIPTION OF INVESTMENT INCLUDING IDENTIFY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) (e) (a) LESSOR, OR SIMILAR PARTY COLLATERAL PAR, OR MATURITY COST CURRENT VALUE Common Stock: * Pharmacia & Upjohn, Inc. Common stock, $.01 par value; 4,680,178 shares $ 75,850,797 $ 210,608,010 ----------------- --------------- Total common stock 75,850,797 210,608,010 ----------------- --------------- Preferred stock: * Pharmacia & Upjohn, Inc. Series A Preferred stock, $.01 par value; convertible - unallocated 4,152,156 shares 167,331,887 270,928,168 * Pharmacia & Upjohn, Inc. Series A Preferred stock, $.01 par value; convertible - allocated 2,540,286 shares 102,373,526 165,753,679 ---------------- --------------- Total preferred stock $ 269,705,413 $ 436,681,847 ---------------- --------------- Mutual Funds: American Century Ultra Mutual fund: 4,010,145 units 117,314,268 183,584,440 American Balanced Mutual fund: 3,422,976 units 50,897,561 49,359,312 Neuberger Berman Guardian Mutual fund: 3,978,639 units 86,875,428 73,604,822 Templeton Foreign Mutual fund: 5,549,121 units 53,759,618 62,261,134 Fidelity Magellan ** Mutual fund: 109,210 units 11,126,965 14,921,330 Vanguard Wellington ** Mutual fund: 219,664 units 6,010,331 6,141,804 Invesco Total Return ** Mutual fund: 88,778 units 2,308,561 2,568,369 Invesco Value Equity ** Mutual fund: 102,882 units 2,637,005 2,771,634 Brandywine Fund ** Mutual fund: 84,731 units 2,899,777 3,633,251 Templeton Foreign ** Mutual fund: 46,709 units 470,334 524,067 ---------------- --------------- Total mutual funds $ 334,299,848 $ 399,370,163 ---------------- ---------------
------------------------------------------ * Represents a party-in-interest to the Plan ** These assets relate to the merger of the Pharmacia U.S. Inc. Employee Savings Plan into the Plan and were subsequently liquidated in 2000. 17 23 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes December 31, 1999
EIN# 38-1123360 Plan# 002 (c) (b) DESCRIPTION OF INVESTMENT INCLUDING IDENTIFY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) (e) (a) LESSOR, OR SIMILAR PARTY COLLATERAL PAR, OR MATURITY COST CURRENT VALUE Common/Collective Trust Funds: Barclays Global Investors Common/Collective Trust Fund: 6,424,626 units 117,094,662 261,238,026 Invesco Stable Value Fund ** Common/Collective Trust Fund: 6,802,601 units 6,802,601 6,802,601 Bankers Trust Pyramid Common/Collective Trust Fund: Open End GIC Fund ** 2,467,824 units 2,467,824 2,467,824 ---------------- --------------- Total Common/Collective Trust Fund $ 126,365,087 $ 270,508,451 ---------------- --------------- Short-Term Investment Funds: * State Street Bank & Trust Co. Short-Term Investment Fund Money market fund 40,622,847 40,622,847 * Bank of New York Short-Term Investment Fund ** Money market fund 2,433,421 2,433,421 ---------------- --------------- Total Short-Term Investment Funds $ 43,056,268 $ 43,056,268 ---------------- --------------- Guaranteed investment contracts - insurance companies: American Int'l Life ICON Contract No. GIC 18305 Interest rate: 5.73% Maturity date: 11/06/2003 $ 7,463,502 $ 7,463,502 Combined Insurance Contract No. CG-1058 Interest rate: 6.64% Maturity Date: 11/15/2000 6,155,061 6,155,061 John Hancock Mutual Life Ins. Co. Contract No. GAC-14500 Interest rate: 5.90% Maturity date: 02/10/2004 7,358,482 7,358,482 New York Life Insurance Co. Contract No. GA30681 Interest rate: 6.75% Maturity Date: 04/02/2001 6,329,221 6,329,221 Principal Mutual Life Ins. Co. Contract No. 42387201 Interest rate: 6.67% Maturity date: 01/31/2000 6,311,211 6,311,211 Sun Life Assurance Co.-Canada Contract No. S-0746-G Interest rate: 7.65% Maturity date: 04/03/2000 6,857,040 6,857,040 ---------------- --------------- Total Guaranteed Investment Contracts - Contract Value $ 40,474,517 $ 40,474,517 ---------------- ---------------
18 24 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes December 31, 1999
EIN# 38-1123360 Plan# 002 (c) (b) DESCRIPTION OF INVESTMENT INCLUDING IDENTIFY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) (e) (a) LESSOR, OR SIMILAR PARTY COLLATERAL PAR, OR MATURITY COST CURRENT VALUE Synthetic Investment Contracts***: AIG Financial Products (3 contracts) Contract No. 143308 Wrapper Contract 2,422 Green Tree Mfd. Housing 1996-4 2,608,677 --------------- Total Contract Value $ 2,611,099 $ 2,611,099 Interest rate: 6.42% Maturity date: 01/15/2001 Contract No. 180162 Wrapper Contract 117,421 American Express Credit Trust 4,960,622 --------------- Total Contract Value 5,078,043 5,078,043 Interest rate: 5.95% Maturity date: 09/16/2002 Contract No. 212753 Wrapper Contract 256,823 FUSAM 1997-6 A 6,940,897 --------------- Total Contract Value 7,197,720 7,197,720 Interest rate: 5.39% Maturity date: 07/17/2002 Chase Manhattan Bank (5 contracts) Contract No. 400176 Wrapper Contract (6,638) Sears Credit Account Master Trust 96-1 4,979,378 --------------- Total Contract Value 4,972,740 4,972,740 Interest rate: 7.00% Maturity date: 03/15/2002 Contract No. 400180 Wrapper Contract (40,820) Freddie Mac 1697 PH 7,408,576 --------------- Total Contract Value 7,367,756 7,367,756 Interest rate: 7.10% Maturity date: 02/18/2003
------------------------------- *** A synthetic investment contract is comprised of two components, an underlying asset and a wrapper contract. The underlying asset is valued at representative quoted market prices. The wrapper contract is valued as the difference between the fair value of the underlying asset and the contract value. Contract value represents contributions made under the contract, plus earnings, less Plan withdrawals and administrative expenses. The wrapper contract guarantees the Plan contract value. 19 25 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes December 31, 1999
EIN# 38-1123360 Plan# 002 (c) (b) DESCRIPTION OF INVESTMENT INCLUDING IDENTIFY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) (e) (a) LESSOR, OR SIMILAR PARTY COLLATERAL PAR, OR MATURITY COST CURRENT VALUE Contract No. 401271 Wrapper Contract 101,691 Citi Bank Credit Card Master Trust 98-1 5,072,218 --------------- Total Contract Value 5,173,909 5,173,909 Interest rate: 4.89% Maturity date: 01/15/2001 Contract No. 401079 Wrapper Contract 128,394 Green Tree Mfd. Housing 1998-2 4,921,300 --------------- Total Contract Value 5,049,694 5,049,694 Interest rate: 6.07% Maturity date: 02/02/2004 Contract No. 401080 Wrapper Contract 62,450 Freddie Mac 1615 G 4,962,652 --------------- Total Contract Value 5,025,102 5,025,102 Interest rate: 6.01% Maturity date: 01/15/2003 Deutsche Bank AG (2 contracts) Contract No. FID-PUP-2 Wrapper Contract 133,198 FANNIEMAE 5.125% 2/13/04 5,757,127 --------------- Total Contract Value 5,890,325 5,890,325 Interest rate: 6.18% Maturity date: 02/13/2004 Contract No. FID-PUP-1 Wrapper Contract 457,828 FN93 225-TH 6% 6/23 PAC-I 6,702,500 --------------- Total Contract Value 7,160,328 7,160,328 Interest rate: 5.55% Maturity date: 06/25/2007 Monumental Life Ins. Co ABS Insurance Co. (5 contracts) Contract No. BDA00379TR-02 Wrapper Contract 67,356 Premier Auto Trust 1998-1 A4 4,954,142 --------------- Total Contract Value 5,021,498 5,021,498 Interest rate: 5.70% Maturity date: 03/06/2002
20 26 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes December 31, 1999
EIN# 38-1123360 Plan# 002 (c) (b) DESCRIPTION OF INVESTMENT INCLUDING IDENTIFY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) (e) (a) LESSOR, OR SIMILAR PARTY COLLATERAL PAR, OR MATURITY COST CURRENT VALUE Contract No. BDA00379TR-04 Wrapper Contract 115,924 Chase Manhattan Auto Trust 1998-B 4,943,539 --------------- Total Contract Value 5,059,463 5,059,463 Interest rate: 5.23% Maturity date: 08/15/2002 Contract No. BDA00379TR-05 Wrapper Contract 261,259 G.E. Capital Corp 5.35% 11/18/98 4,870,614 --------------- Total Contract Value 5,131,873 5,131,873 Interest rate: 5.00% Maturity date: 11/18/2002 Contract No. BDA00379TR-07 Wrapper Contract 207,940 DISCOVER 1999-1 (A) DCMT 6,921,755 --------------- Total Contract Value 7,129,695 7,129,695 Interest rate: 5.33% Maturity date: 02/15/2002 Contract No. BDA00379TR-09 Wrapper Contract 252,106 FN 94-30H 6.25% 11/22 CMO PACI 4,836,941 --------------- Total Contract Value 5,089,047 5,089,047 Interest rate: 5.94% Maturity date: 04/25/2007 Morgan Guaranty (5 contracts) Contract No. Upjohn#1 Wrapper Contract 3,892 Mercantile Credit Card Trust 1995-1 9,186,620 --------------- Total Contract Value 9,190,512 9,190,512 Interest rate: 6.12% Maturity date: 11/15/2000 Contract No. Upjohn2A Wrapper Contract 27,139 MBNA Credit Card Trust 1997-F 5,987,780 --------------- Total Contract Value 6,014,919 6,014,919 Interest rate: 6.69% Maturity date: 06/17/2000
21 27 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes December 31, 1999
EIN# 38-1123360 Plan# 002 (c) (b) DESCRIPTION OF INVESTMENT INCLUDING IDENTIFY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) (e) (a) LESSOR, OR SIMILAR PARTY COLLATERAL PAR, OR MATURITY COST CURRENT VALUE Contract No. Upjohn03 Wrapper Contract (10,742) Ford Auto Loan Master Trust 1995-1 5,121,278 --------------- Total Contract Value 5,110,536 5,110,536 Interest rate: 6.89% Maturity date: 08/15/2000 Contract No. Upjohn04 Wrapper Contract 209,818 New Court Equipment Lease 1998 6,801,208 --------------- Total Contract Value 7,011,026 7,011,026 Interest rate: 5.28% Maturity date: 02/20/2002 Contract No. Upjohn05 Wrapper Contract 79,728 FNMA 6.5% 08/04 5,068,403 --------------- Total Contract Value 5,148,131 5,148,131 Interest rate: 6.42% Maturity date: 08/16/2004 Rabobank Nederland (2 contracts) Contract No. UPJ019701 Wrapper Contract (82) Olympic Auto Trust 1996-A A4 567,515 --------------- Total Contract Value 567,433 567,433 Interest rate: 6.17% Maturity date: 03/15/2000 Contract No. UPJ109801 Wrapper Contract 138,660 FH 1630 PG 5.75 4/20 PAC-I 4,930,208 --------------- Total Contract Value 5,068,868 5,068,868 Interest rate: 5.15% Maturity date: 11/15/2002 * State Street Bank & Trust Co. (5 contracts) Contract No. 96036 Wrapper Contract 746 Western Fin. Auto Trust 1996-C 2,041,762 --------------- Total Contract Value 2,042,508 2,042,508 Interest rate: 6.40% Maturity date: 09/20/2000
22 28 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes December 31, 1999
EIN# 38-1123360 Plan# 002 (c) (b) DESCRIPTION OF INVESTMENT INCLUDING IDENTIFY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) (e) (a) LESSOR, OR SIMILAR PARTY COLLATERAL PAR, OR MATURITY COST CURRENT VALUE Contract No. 98114 Wrapper Contract 41,521 Fannie Mae 1993-41 PG 5,102,425 --------------- Total Contract Value 5,143,946 5,143,946 Interest rate: 5.87% Maturity date: 06/25/2002 Contract No. 98006 Wrapper Contract 64,097 Freddie Mac 1564 G 4,783,000 --------------- Total Contract Value 4,847,097 4,847,097 Interest rate: 5.81% Maturity date: 02/18/2003 Contract No. 98054 Wrapper Contract 75,889 Freddie Mac 1618 G 4,939,975 --------------- Total Contract Value 5,015,864 5,015,864 Interest rate: 5.87% Maturity date: 07/15/2003 Contract No. 98115 Wrapper Contract 83,327 Freddie Mac 1606 G 4,934,941 --------------- Total Contract Value 5,018,268 5,018,268 Interest rate: 5.84% Maturity date: 10/15/2002 UBS AG (6 contracts) Contract No. 2315 Wrapper Contract 1,932 Americredit Auto Trust 1997-D 5,497,122 --------------- Total Contract Value 5,499,054 5,499,054 Interest rate: 6.73% Maturity date: 09/05/2002 Contract No. 2316 Wrapper Contract 109,512 Dayton Hudson Credit Card Trust 97-1 5,364,764 --------------- Total Contract Value 5,474,276 5,474,276 Interest rate: 6.55% Maturity date: 10/25/2002 Contract No. 2419 Wrapper Contract 3,781 Case Equipment Loan Trust 1997 1,696,087 --------------- Total Contract Value 1,699,868 1,699,868 Interest rate: 5.95% Maturity date: 02/15/2001
23 29 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes December 31, 1999
EIN# 38-1123360 Plan# 002 (c) (b) DESCRIPTION OF INVESTMENT INCLUDING IDENTIFY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) (e) (a) LESSOR, OR SIMILAR PARTY COLLATERAL PAR, OR MATURITY COST CURRENT VALUE Contract No. 2472 Wrapper Contract 36,818 Fannie Mae 1994-85 E 3,909,596 --------------- Total Contract Value 3,946,414 3,946,414 Interest rate: 5.46% Maturity date: 12/26/2001 Contract No. 2605 Wrapper Contract 267,030 HELLER 99-PHI (A1) HFCMC CMBS 4,682,057 --------------- Total Contract Value 4,949,087 4,949,087 Interest rate: 5.99% Maturity date: 02/15/2008 Contract No. 2718 Wrapper Contract 20,759 FHLMC 6.250% 10/15/02 5,020,672 --------------- Total Contract Value 5,041,431 5,041,431 Interest rate: 6.47% Maturity date: 10/15/2002 West Deutsche Landesbank (3 contracts) Contract No. WLB6023 Wrapper Contract 4,152 Conti Home Equity Loan 1997-4 1,566,122 --------------- Total Contract Value 1,570,274 1,570,274 Interest rate: 5.89% Maturity date: 07/15/2000 Contract No. WLB6113 Wrapper Contract 239,401 CMAC 98-C2 A1 4,736,557 --------------- Total Contract Value 4,975,958 4,975,958 Interest rate: 5.69% Maturity date: 02/15/2006 Contract No. WLB6146 Wrapper Contract 54,021 PP&L 1999-1 (A4) PPL 4,959,507 --------------- Total Contract Value 5,013,528 5,013,528 ---------------- --------------- Interest rate: 6.75% Maturity date: 12/26/2003 Total Synthetic Investment Contracts - Contract Value $ 181,307,290 $ 181,307,290 ---------------- --------------- Total Investment Contracts $ 221,781,807 $ 221,781,807 ---------------- ---------------
24 30 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Assets Held for Investment Purposes December 31, 1999
EIN# 38-1123360 Plan# 002 (c) (b) DESCRIPTION OF INVESTMENT INCLUDING IDENTIFY OF ISSUE, BORROWER, MATURITY DATE, RATE OF INTEREST, (d) (e) (a) LESSOR, OR SIMILAR PARTY COLLATERAL PAR, OR MATURITY COST CURRENT VALUE * Participant loans: Participant loans Interest rate: 6% - 11% $ - $ 28,479,526 ----------------- ---------------- Total Investments $ 1,071,059,220 $ 1,610,486,072 ================= ================
25 31 THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN Schedule of Reportable Transactions For the Year Ended December 31, 1999 EIN# 38-1123360 Plan# 002
(a) (b) IDENTIFY OF PARTY DESCRIPTION OF NUMBER OF (c) (d) INVOLVED ASSET TRANSACTIONS PURCHASE PRICE SELLING PRICE State Street Bank & Short-Term 181 58,590,537 - * Trust Company Investment Fund 332 - 56,712,412
(f) (h) (i) (e) EXPENSE INCURRED (g) CURRENT VALUE OF ASSET NET GAIN OR LEASE RENTAL WITH TRANSACTION COST OF ASSET ON TRANSACTION DATE (LOSS) - - 58,590,537 58,590,537 - - - 56,712,412 56,712,412 -
------------------------------------------- * Represents a party-in-interest to the Plan 26 32 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-34344) of Pharmacia Corporation of our report dated May 26, 2000 relating to the financial statements of the Pharmacia & Upjohn Employee Savings Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP Florham Park, New Jersey June 30, 2000