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Previous: INTERNATIONAL HOME FOODS INC, PREM14A, 2000-06-30 |
Next: PACIFICARE HEALTH SYSTEMS INC /DE/, 11-K, EX-23, 2000-06-30 |
UNITED STATES
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
(Mark One)
| [X] | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE |
For the Fiscal Year ended December 31, 1999
OR
| [ ] | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE |
Commission File Number 000-21949
| A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
THE PACIFICARE HEALTH SYSTEMS, INC.
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
PacifiCare Health Systems, Inc.
Audited Financial Statements and
The PacifiCare Health Systems, Inc.
Year ended December 31, 1999
THE PACIFICARE HEALTH SYSTEMS, INC.
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
CONTENTS
| Report of Independent Auditors | 1 | |||
| Audited Financial Statements | ||||
| Statements of Net Assets Available for Benefits at December 31, 1999 and 1998 | 2 | |||
| Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 1999 | 3 | |||
| Notes to Financial Statements | 4 | |||
| Supplemental Schedules | ||||
| Schedule H, Line 4i: — Schedule of Assets Held for Investment Purposes at End of Year | 11 | |||
| Schedule H, Line 4j: — Schedule of Reportable Transactions | 14 | |||
| Signature | 15 | |||
| Exhibit Index | 16 | |||
| Exhibit 23 — Consent of Independent Auditors | 17 |
i
REPORT OF INDEPENDENT AUDITORS
PacifiCare Health Systems, Inc. as
We have audited the accompanying statements of net assets available for benefits of The PacifiCare Health Systems, Inc. Savings and Profit-Sharing Plan as of December 31, 1999 and 1998, and the related statement of changes in net assets available for benefits for the year ended December 31, 1999. 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 in accordance with auditing standards generally accepted in the United States. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of The PacifiCare Health Systems, Inc. Savings and Profit-Sharing Plan at December 31, 1999 and 1998, and the changes in its net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes at end of year as of December 31, 1999, and reportable transactions for the year then ended, are presented for purposes of additional analysis and are not a required part of the 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 our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.
| Ernst & Young LLP |
Orange County, California
1
THE PACIFICARE HEALTH SYSTEMS, INC.
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
| December 31, | |||||||||
| 1999 | 1998 | ||||||||
| Assets: | |||||||||
| Investments, at fair value | $ | 307,692,645 | $ | 168,898,802 | |||||
| Contributions receivable: | |||||||||
| Employee | 692,643 | 1,127,594 | |||||||
| Employer | 13,103,646 | 10,153,187 | |||||||
| Dividends receivable | 52,967 | 69,133 | |||||||
| Interest income receivable | 452,795 | 449,999 | |||||||
| Net assets available for benefits | $ | 321,994,696 | $ | 180,698,715 | |||||
See accompanying notes.
2
THE PACIFICARE HEALTH SYSTEMS, INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
| Additions | |||||
| Contributions: | |||||
| Employee | $ | 23,004,777 | |||
| Employer | 29,851,765 | ||||
| Net investment income: | |||||
| Interest income | 2,800,345 | ||||
| Dividends | 15,018,357 | ||||
| Net realized/unrealized appreciation | 20,377,781 | ||||
| Plan assets transferred | 85,129,175 | ||||
| Total additions | 176,182,200 | ||||
| Deductions | |||||
| Benefit and withdrawal payments to participants | 32,400,904 | ||||
| Administration fees | 2,485,315 | ||||
| Total deductions | 34,886,219 | ||||
| Net increase | 141,295,981 | ||||
| Net assets available for benefits: | |||||
| Beginning of year | 180,698,715 | ||||
| End of year | $ | 321,994,696 | |||
See accompanying notes.
3
THE PACIFICARE HEALTH SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Description of Plan
General
The PacifiCare Health Systems, Inc. Savings and Profit-Sharing Plan (the “Plan”), effective July 1, 1985, as amended, is a defined contribution profit-sharing plan that covers employees of PacifiCare Health Systems, Inc. and subsidiaries (the “Company”), and is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). The Plan was amended and restated in its entirety effective February 19, 1998 to establish a new investment fund that invests primarily in shares of the Company’s common stock, to include certain subsidiaries as sponsoring employers of the Plan, and to comply with certain amendments and changes to the Internal Revenue Code (the “Code”). Effective January 1, 1999, the Plan was amended and restated to make certain changes to the eligibility, contribution and vesting provisions of the Plan, to provide for the merger of the FHP International Corporation 401(k) Savings Plan (FHP Savings Plan) into the Plan, and to comply with the Internal Revenue Service Restructuring and Reform Act of 1998. As amended and restated, the Plan is intended to comply with Code sections 401, 401(k), 401(m)(ii), and 402(a), and is also an eligible individual account plan as defined in ERISA Section 407(d)(3), and provides for the acquisition and holding of qualifying employer securities, as defined in ERISA Section 401(d)(5). The assets of the following plans sponsored by subsidiaries of the Company were transferred into the Plan: PacifiCare of Washington, Inc. 401(k) Plan effective November 1, 1996; Preferred Solutions, Inc. 401(k) Plan, and D.P.A. Employees Investment Plan and Trust effective January 1, 1996. Employees are fully vested in contributions relating to these plans.
On February 14, 1997, the Company acquired FHP International Corporation. On December 31, 1998, FHP terminated the FHP Money Purchase Pension Plan (FHP Pension Plan) and the assets from the FHP Pension Plan were transferred to the Plan. On April 1, 1999, assets and liabilities attributable to the FHP employees contained in the FHP Savings Plan were transferred to the Plan. As a result of the transfers from the FHP Pension Plan and the FHP Savings Plan, assets totaling $85,129,175 were transferred to the Plan during 1999.
Former FHP Savings Plan participants are eligible to participate and are subject to all Plan benefit and contribution policies. Their transferred balances are vested in accordance with the terms of the old plan (fully vested for participants employed on or before July 1, 1990, vested after five years of service for participants employed thereafter). Their transferred balances also become fully vested if they achieve age 65, die, or become totally and permanently disabled while employed by the Company. Transferred balances from the FHP Pension Plan are fully vested.
At the Company’s June 24, 1999 annual meeting, the Company’s Class A and Class B common stockholders approved an amended and restated certificate of incorporation. The amended and restated certificate combined and reclassified the Company’s Class A and Class B common stock into a single class of voting common stock.
The following description of the Plan provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
Contributions and Benefits
Effective January 1, 1999, employees are eligible to participate in the Plan on the first day of the month after completing 75 days of service. Prior to January 1, 1999, employees were eligible to participate after 12 months of employment with 1,000 hours of service.
4
NOTES TO FINANCIAL STATEMENTS (Continued)
Participants may elect to defer the receipt of a portion (in whole percentages not less than 2%) of their compensation (deferred savings account). Effective January 1, 1999, participants could contribute up to 15% of their compensation (12% prior to January 1, 1999) subject to the limit of $10,000 in 1999 specified by Internal Revenue Code Section 402(g). If any participant’s compensation deferral for a year exceeds the maximum allowable for that year, the excess contribution is returned to the Company and then paid to the participant as taxable compensation. Furthermore, Code Section 401(k) and the Plan limit the amount certain highly compensated individuals may contribute, based on amounts contributed by lower compensated individuals.
Effective January 1, 1999, the Company makes annual mandatory contributions to participants’ accounts equal to 3% of all eligible compensation paid (2% prior to January 1, 1999) (profit-sharing account). Each participant’s profit-sharing account is credited with an amount equal to 3% of his or her eligible compensation received during the year.
The Company also contributes a matching amount on behalf of each participant equal to 50% of the amount of compensation deferred by each participant to a maximum of 3% of the participant’s eligible compensation (matching account).
The Company may also contribute an additional amount (discretionary profit-sharing account) at its sole discretion, as determined by the Company’s Board of Directors, based on the financial success of the Company. The Company contributed $12,000,000 for the year ended December 31, 1999. The Company’s discretionary contribution is allocated to the accounts of active participants who have completed 1,000 or more hours of service to the Plan year in question, in proportion to their eligible compensation. Pursuant to this allocation, eligible compensation is limited to $81,000 in 1999.
Participants are immediately and fully vested in their 3% profit-sharing account and deferred savings account. Effective January 1, 1999, participants vest in their matching account and discretionary profit-sharing accounts at the rate of 25% per year. Prior to January 1, 1999, participants vested in these accounts at the rate of 10% per year for the first four years of service and 20% per year for the next three years of service. Participants become fully vested in their matching account in the event of death, disability or reaching normal retirement age. Forfeited balances of terminated participants’ nonvested accounts are used to reduce future Company contributions. The balance of forfeited nonvested accounts was $19,764 and $350,512 as of December 31, 1999 and 1998, respectively.
The income of the Plan, together with any gains or losses in the value of the investments, increases or decreases participants’ accounts proportionately based on the relationship of their account balances to total account balances.
No amounts are payable prior to the participant’s normal retirement, death, disability or termination of employment. In cases of termination, the participant may elect to defer payment until five years after the normal retirement date, age 65. Retirement and disability payments greater than $5,000 may be paid in a lump sum, an annuity, or in substantially equal installments. All payments less than $5,000 will be paid in a lump sum.
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 will become 100% vested in their accounts. The fully vested accounts would become payable as determined by the Administrative Committee.
5
NOTES TO FINANCIAL STATEMENTS (Continued)
Participant Loans
Plan participants may borrow, as a loan from their accumulated contributions, a minimum of $1,000 and up to a maximum of the lesser of $50,000 or 50% of their vested account balance. Loan terms generally range from 1 to 5 years or up to 10 years for hardship circumstances as defined by the Plan. The loans are collateralized by the balance in the participant’s account and bear interest at 2% above the current prime rate. Principal and interest are paid ratably through biweekly payroll deductions.
2. Summary of Significant Accounting Policies
Valuation of Investments
Investments in mutual funds are carried at fair value based on the quoted market price of the underlying investments.
Quoted market prices are used to value common stocks, corporate bonds and U.S. securities.
Investments in participating units in Wells Fargo Bank’s short-term income fund are stated at redemption price which approximates cost.
Participant loans are recorded at cost, which approximates fair value at December 31, 1999 and 1998.
Investment Income
Interest and dividends are recorded as earned. Realized and unrealized net investment gains or losses are recorded based on the cost of units held by the Plan and fluctuations in the fair value of the underlying investments. Purchases and sales of investments are reflected on the trade dates.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Reclassifications
Certain reclassifications of the 1998 financial statement accounts were made to conform to the 1999 financial statement presentation.
3. Administration of Plan Assets
The assets of the Plan are administered by the Plan’s Administrative Committee, appointed by the Company’s Board of Directors, with the assistance of the Trustee, Wells Fargo Bank (“Wells Fargo”). Under the trust agreement, the Trustee holds the trust assets and makes payments as directed by the Administrative Committee. Discretion as to investment decisions for the Plan’s profit-sharing and discretionary profit-sharing accounts lies with the Administrative Committee, which is assisted by an investment advisor. Participants are permitted to direct the investment of their deferred savings and matching accounts among investment options selected by the Administrative Committee (see Note 4). The Plan pays all administrative expenses.
6
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Investment Options
Deferred savings and matching accounts of each participant are held by the Trustee in one or more of ten investment options (seven in 1998) selected by the participant. Effective January 1, 1999, participants could choose from the following investment options:
PacifiCare Common Stock Fund
In 1998, the Plan was amended to offer participants the opportunity to invest in Class B common stock of the Company. On June 24, 1999, the Company’s Class A and Class B common stockholders approved an amended and restated certificate of incorporation which combined and reclassified the Company’s Class A and B common stock into a single class of voting common stock.
State Street Global Advisors Small Cap Fund
Funds are invested in shares of a registered investment company that invests in stocks of small capitalization companies.
T. Rowe Price International Stock Fund
Funds are invested in shares of a registered investment company that invests in stocks of companies located outside of the United States.
Putnam Voyager Fund
Funds are invested in shares of a registered investment company that invests in small-to- medium-sized companies and larger, well-established companies.
Vanguard 500 Index Fund
Funds are invested in shares of a registered investment company that matches the S&P 500 index.
Fidelity Equity Income Fund
Funds are invested in shares of a registered investment company that invests in income-producing equity securities.
Managed Assets
Assets are managed by a company that specializes in the management of conservative, balanced portfolios using high-quality value-oriented stocks and short-to-intermediate-term fixed income securities.
PacifiCare Income Fund
Funds are invested in shares of registered investment companies that invest in fixed-income securities.
Wells Fargo Short-Term Income Fund
Funds are invested in participating units of a pooled fund that invests in high-quality money market instruments.
7
NOTES TO FINANCIAL STATEMENTS (Continued)
Montag & Caldwell Balanced Fund
During 1999, the Plan added an additional option, which provides for investments in shares of a registered investment company that invests in a balanced portfolio of 60% growth-oriented stocks and 40% short-to-intermediate-term fixed income securities.
Effective January 1, 1999, participants may change their investment options daily (once each quarter in 1998).
Prior to October 1999, the profit-sharing and discretionary profit-sharing accounts of each participant were invested in the Managed Assets option by the Administrative Committee. Beginning October 1, 1999, participants directed their accounts to be allocated between the ten investment options offered.
5. Investments
During 1999 and 1998, the Plan held investments managed by an investment management company that invested in common stocks, corporate and foreign bonds and U.S. government securities in addition to mutual fund shares offered by several registered investment companies and participating units in Wells Fargo Bank’s Short-Term Income Fund based upon the guidance provided by the investment advisor.
The following presents investments that represent 5% or more of the Plan’s net assets:
| December 31, | ||||||||
| 1999 | 1998 | |||||||
| Putnam Voyager Fund Class A | $ | 93,003,658 | $ | 35,980,282 | ||||
| Fidelity Equity Income Fund #23 | $ | 40,817,431 | — | |||||
| Vanguard Institutional Index Fund #94 | $ | 16,870,429 | — | |||||
| T. Rowe Price International Stock Fund #37 | $ | 28,743,818 | — | |||||
| Putnam Income Fund Class A #A04 | $ | 18,575,657 | $ | 4,695,025 | ||||
| PacifiCare Health Systems, Inc. common stock | $ | 17,767,190 | — | |||||
| Putnam Growth & Income Fund | — | $ | 23,343,783 | |||||
| Putnam Global Growth Fund Class A | — | $ | 16,390,175 | |||||
The Plan’s investments (including investments bought, sold and held during the year) appreciated (depreciated) in fair value during 1999 as follows:
| Investments at fair value as determined by quoted market prices: | |||||
| Common stocks | $ | (7,022,468 | ) | ||
| Corporate bonds | (387,618 | ) | |||
| U.S. government securities | (1,820,207 | ) | |||
| Mutual funds | 29,608,074 | ||||
| Net appreciation in fair value of investments | $ | 20,377,781 | |||
Investments in Wells Fargo Short-Term Income Funds are party-in-interest transactions with the Trustee for which a statutory exemption exists. At December 31, 1999 and 1998, the Plan held $13,181,593 and $3,659,885 in participating units, respectively (at cost, which approximates fair value). During the year ended December 31, 1999, the Plan purchased $182,927,510, sold $173,015,454 and reinvested $544,672 of interest income in participating units of this fund.
8
NOTES TO FINANCIAL STATEMENTS (Continued)
6. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the changes in net assets relating to nonparticipant-directed investments is as follows:
| December 31, | ||||||||
| 1999 | 1998 | |||||||
| Common stock | $ | — | $ | 46,843,037 | ||||
| Corporate debt | — | 3,302,186 | ||||||
| U.S. Government Securities | — | 25,640,224 | ||||||
| Short-term income fund | — | 3,567,187 | ||||||
| Interest and dividends receivable | — | 519,132 | ||||||
| $ | — | $ | 79,871,766 | |||||
| Year Ended | |||||
| December 31, | |||||
| 1999 | |||||
| Change in net assets: | |||||
| Contributions | $ | 20,273,381 | |||
| Interest income | 1,689,218 | ||||
| Dividends | 703,179 | ||||
| Net realized/unrealized depreciation | (3,717,112 | ) | |||
| Benefits and withdrawal payments to participants | (8,436,944 | ) | |||
| Administration fees | (550,278 | ) | |||
| Transfers to participant-directed investments | (89,833,210 | ) | |||
| $ | (79,871,766 | ) | |||
7. Income Tax Status
The Plan received a determination letter from the Internal Revenue Service dated January 25, 1996, stating that the Plan is qualified, in form, under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. Subsequent amendments have been structured to, and are intended to, maintain the Plan’s tax qualified status.
8. Reconciliation to Form 5500
Net assets available for benefits and benefit payments as recorded in these financial statements differ from amounts reported in the Company’s Form 5500 as filed with the Department of Labor. In these financial statements, pursuant to accounting principles generally accepted in the United States, accrued benefits payable of $644,409 and $686,008 at December 31, 1999 and 1998, respectively, are not recognized until paid.
9. Subsequent Events
On February 29, 2000, the Plan eliminated two existing funds, the Putnam Income Fund and the Palley Needleman Fund. On March 1, 2000, the Plan added a new investment option, the Western Asset Intermediate Portfolio Fund. This new fund replaces the Putnam Income Fund. Montag & Caldwell Balanced Fund was also added as an investment option during 1999 and replaces the Palley Needleman Fund.
9
Supplemental Schedules
10
PACIFICARE HEALTH SYSTEMS, Inc.
EIN: 33-0064895 Plan: 001
Schedule H, Line 4i: — Schedule of Assets Held for Investment Purposes at End of Year
| Shares or | Current | |||||||||
| Par Value | Identity of Issue | Cost | Value | |||||||
| Mutual Funds | ||||||||||
| 763,228 | Fidelity Equity Income Fund #23 | $ | 39,150,757 | $ | 40,817,431 | |||||
| 3,003,994 | Putnam Voyager Fund Class A | 64,557,342 | 93,003,658 | |||||||
| 133,471 | State Street Global Advisor Small Cap Fund #339 | 2,417,362 | 2,681,433 | |||||||
| 125,889 | Vanguard Institutional Index Fund #94 | 15,860,542 | 16,870,429 | |||||||
| 2,920,701 | Putnam Income Fund Class A #A04 | 19,199,647 | 18,575,657 | |||||||
| 1,510,448 | T. Rowe Price International Stock Fund #37 | 23,046,713 | 28,743,818 | |||||||
| 34,369 | Allegheny Fund | 657,038 | 671,226 | |||||||
| Total Mutual Funds | 164,889,401 | 201,363,652 | ||||||||
| Common Stocks | ||||||||||
| 30,700 | Albertsons Inc. | 1,409,500 | 990,075 | |||||||
| 14,100 | American Home Products Corp. | 556,180 | 553,425 | |||||||
| 24,850 | AT&T Corp. | 1,041,355 | 1,262,691 | |||||||
| 19,050 | Bank of America Corp. | 1,407,286 | 956,072 | |||||||
| 14,300 | Baxter International Inc. | 863,704 | 898,219 | |||||||
| 23,300 | Bestfoods | 1,110,328 | 1,224,706 | |||||||
| 28,716 | BP Amoco PLC-SPONS ADR | 1,104,509 | 1,703,218 | |||||||
| 24,800 | Cardinal Health Inc. | 1,532,237 | 1,187,300 | |||||||
| 15,900 | Caterpillar Inc. | 903,575 | 748,294 | |||||||
| 29,250 | Citigroup Inc. | 1,262,684 | 1,628,859 | |||||||
| 30,800 | Compaq Computer Corp. | 817,472 | 833,525 | |||||||
| 8,100 | Computer Sciences Corp. | 523,331 | 766,462 | |||||||
| 22,200 | Dayton Hudson Corp. | 1,283,986 | 1,630,312 | |||||||
| 18,000 | Diageo PLC-SPONS ADR | 782,407 | 576,000 | |||||||
| 21,700 | Emerson Electric Co. | 1,260,058 | 1,245,037 | |||||||
| 16,369 | Exxon Mobile Corp. | 1,096,680 | 1,318,727 | |||||||
| 19,800 | Fannie Mae | 1,390,338 | 1,236,262 | |||||||
| 30,000 | Fleet Boston Financial Corp. | 1,037,838 | 1,044,375 | |||||||
| 12,000 | Ford Motor Co. | 780,849 | 639,750 | |||||||
| 40,700 | Fort James Co. | 1,591,223 | 1,114,162 | |||||||
| 24,100 | Gannett Co. | 853,167 | 1,965,656 | |||||||
| 22,200 | GTE Corp. | 1,451,552 | 1,566,487 | |||||||
| 10,500 | Hewlett Packard Co. | 678,851 | 1,194,375 | |||||||
| 15,700 | Honeywell International Inc. | 708,719 | 905,694 | |||||||
| 5,000 | Intel Corp. | 416,550 | 411,563 | |||||||
| 13,000 | IBM Corp. | 280,746 | 1,402,375 | |||||||
| 4,000 | Kimberly Clark Corp. | 259,009 | 261,750 | |||||||
| 6,000 | Lowes Cos Inc. | 352,110 | 358,500 | |||||||
| 43,500 | Masco Corp. | 810,061 | 1,103,813 | |||||||
| 22,887 | MCI Worldcom Inc. | 508,814 | 1,214,441 | |||||||
| 3,000 | Merrill Lynch & Co Inc. | 237,367 | 249,938 | |||||||
11
EIN: 33-0064895 Plan: 001
Schedule H, Line 4i: — Schedule of Assets Held for Investment Purposes at End of Year
| Shares or | Current | |||||||||
| Par Value | Identity of Issue | Cost | Value | |||||||
| 48,000 | Nordstrom Inc. | $ | 1,347,075 | $ | 1,263,000 | |||||
| *335,230 | PacifiCare Health Systems Inc. | 22,134,572 | 17,767,190 | |||||||
| 13,400 | Praxair Inc. | 576,926 | 674,188 | |||||||
| 15,200 | Providian Financial Corp. | 765,198 | 1,384,150 | |||||||
| 25,200 | SBC Communications Inc. | 814,206 | 1,228,500 | |||||||
| 27,300 | Schlumberger Ltd. | 1,887,725 | 1,532,213 | |||||||
| 27,800 | TJX Companies Inc. | 671,859 | 568,163 | |||||||
| 16,207 | Total Fina SA | 550,513 | 1,122,335 | |||||||
| 5,285 | Transocean Sedco Forex Inc. | — | 178,048 | |||||||
| 48,500 | USX Marathon Group | 1,466,968 | 1,197,344 | |||||||
| 31,080 | Washington Mutual Inc. | 402,100 | 804,195 | |||||||
| *26,000 | Wells Fargo & Co. (New) | 1,115,273 | 1,051,375 | |||||||
| 42,500 | Williams Cos Inc. | 1,230,314 | 1,298,906 | |||||||
| 23,600 | Xerox Corp. | 584,860 | 535,425 | |||||||
| Total Common Stocks | 61,860,075 | 62,797,095 | ||||||||
| Corporate Bonds | ||||||||||
| 1,000,000 | Amoco Corp. 6.5% due 8/01/07 | 1,055,090 | 957,420 | |||||||
| 500,000 | AT&T 5.625% due 3/15/04 | 502,195 | 472,500 | |||||||
| 500,000 | AT&T Corp 7.5% due 6/01/06 | 561,215 | 505,710 | |||||||
| 500,000 | Banc One Corp 7.0% due 3/25/02 | 502,410 | 499,700 | |||||||
| 325,000 | BankAmerica Corp 7.5% due 10/15/02 | 347,038 | 327,087 | |||||||
| 200,000 | BP America Inc. 9.375% due 11/01/00 | 222,228 | 204,396 | |||||||
| 500,000 | Ford Motor Credit Cp 6.625% due 6/30/03 | 513,415 | 491,825 | |||||||
| 1,000,000 | General Electric 6.5% due 11/01/06 | 1,047,500 | 956,350 | |||||||
| Total Corporate Bonds | 4,751,091 | 4,414,988 | ||||||||
| U.S. Government Securities | ||||||||||
| 177,338 | FHLMC Multiclass Mtg 5.75% due 4/15/11 | 164,204 | 176,285 | |||||||
| 172,846 | FNMA REMIC 92-193GB 7.0% due 1/25/06 | 181,164 | 172,761 | |||||||
| 7,697 | FNMA REMIC 93-15E 6.75% due 1/25/05 | 7,917 | 7,663 | |||||||
| 50,092 | FNMA REMIC 93-82C 6.0% due 7/25/15 | 49,983 | 49,810 | |||||||
| 96,730 | GNMA 11 Pool #210419 8.0% due 4/20/17 | 102,050 | 97,964 | |||||||
| 619,588 | GNMA 11 Pool #383247 7.0% due 8/20/24 | 630,431 | 600,090 | |||||||
| 50,816 | GNMA Pool #255800 9.0% due 7/15/18 | 53,294 | 53,547 | |||||||
| 25,878 | GNMA Pool #284915 9.0% due 3/15/20 | 27,496 | 27,221 | |||||||
| 266,570 | GNMA Pool #291100 9.0% due 5/15/20 | 283,064 | 280,397 | |||||||
| 127,934 | GNMA Pool #308018 8.5% due 4/15/21 | 134,291 | 132,051 | |||||||
| 121,687 | GNMA Pool #310888 9.0% due 6/15/21 | 130,319 | 127,846 | |||||||
| 137,457 | GNMA Pool #311088 9.0% due 7/15/21 | 147,680 | 144,415 | |||||||
| 213,821 | GNMA Pool #311458 8.0% due 6/15/22 | 220,369 | 216,761 | |||||||
| 342,390 | GNMA Pool #311581 8.0% due 11/15/22 | 360,366 | 347,098 | |||||||
12
EIN: 33-0064895 Plan: 001
Schedule H, Line 4i: — Schedule of Assets Held for Investment Purposes at End of Year
| Shares or | Current | |||||||||
| Par Value | Identity of Issue | Cost | Value | |||||||
| 153,000 | GNMA Pool #319100 8.0% due 5/15/22 | $ | 158,547 | $ | 155,104 | |||||
| 77,216 | GNMA Pool #319134 8.5% due 4/15/22 | 79,243 | 79,701 | |||||||
| 31,446 | GNMA Pool #320086 8.0% due 7/15/22 | 33,264 | 31,879 | |||||||
| 195,512 | GNMA Pool #323135 8.0% due 6/15/22 | 203,516 | 198,200 | |||||||
| 202,719 | GNMA Pool #328105 8.0% due 8/15/22 | 213,235 | 205,506 | |||||||
| 31,868 | GNMA Pool #330100 7.5% due 2/15/23 | 32,565 | 31,669 | |||||||
| 92,374 | GNMA Pool #342434 7.5% due 1/15/23 | 91,594 | 91,796 | |||||||
| 120,383 | GNMA Pool #342515 9.0% due 3/15/23 | 126,703 | 126,151 | |||||||
| 380,155 | GNMA Pool #363217 7.5% due 3/15/24 | 393,698 | 377,996 | |||||||
| 36,441 | GNMA Pool #370508 7.0% due 2/15/09 | 34,938 | 36,065 | |||||||
| 200,952 | GNMA Pool #371046 8.5% due 2/15/24 | 215,016 | 206,916 | |||||||
| 436,915 | GNMA Pool #387189 7.0% due 2/15/24 | 450,023 | 425,302 | |||||||
| 65,616 | GNMA Pool #390623 9.0% due 5/15/24 | 67,995 | 68,746 | |||||||
| 186,666 | GNMA Pool #392802 9.25% due 12/15/24 | 198,566 | 196,746 | |||||||
| 281,863 | GNMA Pool #327245 8.0% due 8/15/22 | 294,811 | 285,739 | |||||||
| 730,311 | GNMA Pool #339401 7.0% due 11/15/22 | 748,569 | 711,710 | |||||||
| 361,416 | GNMA Pool #356688 7.0% due 7/15/23 | 370,564 | 352,088 | |||||||
| 777,400 | GNMA Pool #377973 7.0% due 3/15/24 | 788,089 | 756,736 | |||||||
| 1,000,000 | US Treasury Note 5.75% due 8/15/03 | 1,006,563 | 979,060 | |||||||
| 3,300,000 | US Treasury Note 5.875% due 8/15/03 | 3,362,262 | 3,245,352 | |||||||
| 2,700,000 | US Treasury Note 6.25% due 2/15/04 | 2,988,984 | 2,656,962 | |||||||
| 2,900,000 | US Treasury Note 6.375% due 2/15/07 | 2,904,013 | 2,905,452 | |||||||
| 1,400,000 | US Treasury Note 6.5% due 5/15/05 | 1,474,375 | 1,400,434 | |||||||
| 3,700,000 | US Treasury Note 7.25% due 8/15/04 | 4,015,801 | 3,817,956 | |||||||
| Total U.S. Government Securities | 22,745,562 | 21,777,175 | ||||||||
| Participant Loans Receivable | ||||||||||
| *4,158,142 | Participant loans 7% to 12% through 2013 | — | 4,158,142 | |||||||
| Short-term Income Fund | ||||||||||
| *13,181,593 | Wells Fargo Bank Short-Term Income Fund | 13,181,593 | 13,181,593 | |||||||
| Total Investments | $ | 307,692,645 | ||||||||
13
PACIFICARE HEALTH SYSTEMS, INC.
EIN: 33-0064895 Plan: 001
Schedule H, Line 4j: — Schedule of Reportable Transactions
| Current Value | ||||||||||||||||||||||
| of Asset on | ||||||||||||||||||||||
| Identity of | Purchase | Selling | Transaction | Net Gain | ||||||||||||||||||
| Party Involved | Description of Assets | Price | Price | Cost of Asset | Date | (Loss) | ||||||||||||||||
| Non participant — directed accounts: | ||||||||||||||||||||||
| Category (i) — single transaction in excess of 5% of plan assets: | ||||||||||||||||||||||
| Wells Fargo Bank | Short-term income fund | $ | 9,261,447 | — | $ | 9,261,447 | $ | 9,261,447 | — | |||||||||||||
| Category (iii) — single transaction in excess of 5% of plan assets: | ||||||||||||||||||||||
| Wells Fargo Bank | Short-term income fund | $ | 44,631,449 | — | $ | 44,631,449 | $ | 44,631,449 | — | |||||||||||||
| — | 47,325,989 | 47,325,989 | 47,325,989 | — | ||||||||||||||||||
There were no category (ii) or (iv) reportable transactions during 1999.
14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee of the Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE PACIFICARE HEALTH SYSTEMS, INC. | |
| SAVINGS AND PROFIT-SHARING PLAN |
Date: June 29, 2000
| By: |
/s/ MARY C. LANGSDORF |
| Mary C. Langsdorf | |
| Interim Chief Financial Officer, | |
| Senior Vice President of Finance | |
| and Corporate Controller | |
| (Principal Accounting Officer) |
15
EXHIBIT INDEX
Exhibit 23 Consent of Independent Auditors
16
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