PW EUCALYPTUS FUND, L.L.C.
Financial Statements
with Report of Independent Auditors
Period from November 22, 1999
(commencement of operations)
through December 31, 1999
<PAGE>
PW EUCALYPTUS FUND, L.L.C.
Financial Statements
with Report of Independent Auditors
Period from November 22, 1999
(commencement of operations)
through December 31, 1999
Contents
Report of Independent Auditors .................................... 1
Statement of Assets, Liabilities and Members' Capital ............ 2
Statement of Operations ........................................... 3
Statement of Changes in Members' Capital - Net Assets ............. 4
Schedule of Portfolio Investments ................................. 5
Notes to Financial Statements ..................................... 8
<PAGE>
Report of Independent Auditors
To the Members of PW Eucalyptus Fund, L.L.C.
We have audited the accompanying statement of assets, liabilities and members'
capital of PW Eucalyptus Fund, L.L.C., including the schedule of portfolio
investments, as of December 31, 1999, and the related statements of operations
and changes in members' capital - net assets for the period from November 22,
1999 (commencement of operations) to December 31, 1999. These financial
statements are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit 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. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the custodian and brokers. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PW Eucalyptus Fund, L.L.C. at
December 31, 1999, and the results of its operations and changes in its members'
capital - net assets for the period from November 22, 1999 to December 31, 1999,
in conformity with accounting principles generally accepted in the United
States.
/S/ERNST & YOUNG LLP
New York, New York
February 25, 2000
<PAGE>
PW Eucalyptus Fund, L.L.C.
Statement of Assets, Liabilities and Members' Capital
- --------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
ASSETS
Investments in securities, at value (Cost $38,347,320) $ 42,864,280
Cash and cash equivalents 7,472,755
Receivables:
Due from broker 2,171,733
Interest 63,909
- --------------------------------------------------------------------------------
Total Assets 52,572,677
- --------------------------------------------------------------------------------
LIABILITIES
Securities sold, not yet purchased, at value
(Proceeds of sales $2,170,537) 2,386,795
Payables:
Investments purchased, not settled 10,083,599
Management fee 40,821
Professional fees 35,000
Miscellaneous 6,995
- --------------------------------------------------------------------------------
Total Liabilities 12,553,210
- --------------------------------------------------------------------------------
Net Assets $ 40,019,467
- --------------------------------------------------------------------------------
MEMBERS' CAPITAL - NET ASSETS
Represented by:
Capital contributions $ 36,164,785
Accumulated net investment loss (217,452)
Accumulated net realized loss from investments (228,568)
Accumulated net unrealized appreciation from investments 4,300,702
- --------------------------------------------------------------------------------
Total Members' Capital - Net Assets $ 40,019,467
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Statement of Operations
- --------------------------------------------------------------------------------
Period from November 22, 1999
(commencement of operations) through December 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 93,258
- --------------------------------------------------------------------------------
Total Investment Income 93,258
- --------------------------------------------------------------------------------
EXPENSES
Organizational costs 219,432
Management fee 45,800
Professional fees 35,000
Administration fee 5,232
Miscellaneous 5,001
- --------------------------------------------------------------------------------
Total Operating Expenses 310,465
Interest expense 245
- --------------------------------------------------------------------------------
Total Expenses 310,710
- --------------------------------------------------------------------------------
Net Investment Loss (217,452)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)FROM INVESTMENTS
Net realized loss from investments (228,568)
Change in net unrealized appreciation from investments 4,300,702
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain from Investments 4,072,134
- --------------------------------------------------------------------------------
INCREASE IN MEMBERS' CAPITAL DERIVED FROM OPERATIONS $ 3,854,682
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Statement of Changes in Members' Capital - Net Assets
- --------------------------------------------------------------------------------
Period from November 22, 1999 (commencement of
operations) through December 31, 1999
- --------------------------------------------------------------------------------
FROM INVESTMENT ACTIVITIES
Net investment loss $ (217,452)
Net realized loss from investments (228,568)
Change in net unrealized appreciation from investments 4,300,702
- --------------------------------------------------------------------------------
Net Increase in Members' Capital
Derived from Operations 3,854,682
- --------------------------------------------------------------------------------
MEMBERS' CAPITAL TRANSACTIONS
Proceeds from Member subscriptions 35,114,785
Proceeds from Manager subscriptions 1,050,000
- --------------------------------------------------------------------------------
Increase in Members' Capital Derived
from Capital Transactions 36,164,785
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MEMBERS' CAPITAL AT BEGINNING OF PERIOD -
- --------------------------------------------------------------------------------
MEMBERS' CAPITAL AT END OF PERIOD $ 40,019,467
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Schedule of Portfolio Investments
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December 31, 1999
Market Value Shares
- --------------------------------------------------------------------------------
COMMON STOCKS - 107.11 %
AGRICULTURAL BIOTECHNOLOGY - 4.43%
50,000 Monsanto Company $ 1,771,899
-------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS - 3.34%
20,000 Caliper Technologies Corp. * 1,335,000
-------------
DRUG DELIVERY SYSTEMS - 3.46%
40,000 ALZA Corp. * 1,385,000
-------------
MEDICAL - BIOMEDICAL/GENETICS - 21.10%
7,000 Affymetrix, Inc. * 1,187,816
1,200 Ares-Serono Group S.A. - (Switzerland) ** 2,548,885
22,500 Aviron * 355,793
28,200 Bio-Technology General Corp. * 430,050
70,000 Cell Genesys, Inc. * 896,910
32,000 Chiron Corporation * 1,356,000
15,000 Enzon, Inc. * 650,625
17,000 Incyte Pharmaceuticals, Inc. * 1,020,000
-------------
8,446,079
-------------
MEDICAL DRUGS - 58.12%
25,000 Altana AG - (Germany) ** 1,641,275
32,000 American Home Products Corp. 1,256,000
90,000 Banyu Pharmaceutical Co., Ltd. - (Japan) ** 1,393,679
30,000 Biochem Pharma, Inc. * 652,500
70,000 Eisai Co., Ltd. - (Japan) ** 1,343,852
28,000 Forest Laboratories, Inc. - Class A *, (a) 1,720,264
55,000 Fujisawa Pharmaceutical Co., Ltd. - (Japan) ** 1,332,617
104,000 Geltex Pharmaceuticals, Inc. * 1,332,552
32,000 Genzyme Corporation * 1,440,000
16,000 Lilly (Eli) & Co. (a) 1,064,000
69,100 Pharmacopeia, Inc. * 1,563,388
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
December 31, 1999
Market Value Shares
- --------------------------------------------------------------------------------
COMMON STOCKS
MEDICAL DRUGS (CONTINUED)
200 Roche Holding AG - Genusss - (Switzerland)** $ 2,361,467
60,000 Sanofi - Synthelabo S.A. - (France) *, ** 2,486,118
100,000 Shionogi & Co., Ltd. - (Japan) ** 1,212,447
25,000 Takeda Chemical Industries, Ltd. - (Japan) ** 1,233,452
35,000 Vertex Pharmaceuticals, Inc. * 1,225,000
------------
23,258,611
------------
THERAPEUTICS - 16.66%
6,000 Abgenix, Inc. * 795,000
32,600 Coulter Pharmaceutical, Inc. * 739,629
24,000 Gilead Sciences, Inc. * 1,299,000
42,500 Ilex Onocology, Inc. * 1,025,312
40,000 SangStat Medical Corp. * 1,190,000
50,000 Tularik, Inc. * 1,618,750
-------------
6,667,691
-------------
TOTAL COMMON STOCKS (Cost $ 38,347,320) $ 42,864,280
-------------
SECURITIES SOLD, NOT YET PURCHASED - (5.96%)
MEDICAL-BIOMEDICAL/GENETICS-(0.93%)
[Confidential Portion - Financials have been omitted and filed separately]
-------------
MEDICAL DRUGS - (1.29%)
[Confidential Portion - Financials have been omitted and filed separately]
-------------
MEDICAL INSTRUMENTS - (0.08%)
[Confidential Portion - Financials have been omitted and filed separately]
-------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
December 31, 1999
Market Value Shares
- --------------------------------------------------------------------------------
SECURITIES SOLD, NOT YET PURCHASED - (continued)
THERAPEUTICS - (3.67%)
[Confidential Portion - Financials have been omitted and filed separately]
-------------
(1,467,490)
-------------
TOTAL SECURITIES SOLD,
NOT YET PURCHASED (Proceeds $ 2,170,537) (2,386,795)
-------------
LIABILITIES IN EXCESS OF OTHER ASSETS,
EXCLUDING SECURITIES SOLD, NOT
YET PURCHASED - (1.14 %) (458,018)
-------------
NET ASSETS - 100.00% $ 40,019,467
=============
(a) Partially or wholly held ($2,354,198) in a pledged account by the Custodian
as collateral for securities sold, not yet purchased.
* Non-income producing security.
** Foreign Security Market value quoted in U.S. dollars at prevailing exchange
rates.
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Notes to Financial Statements
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December 31, 1999
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1. Organization
PW Eucalyptus Fund, L.L.C. (the "Fund") was organized as a limited
liability company under the laws of Delaware on August 26, 1999. The Fund
is registered under the Investment Company Act of 1940 (the "1940 Act") as
a closed-end, non-diversified management investment company. The Fund's
investment objective is to seek long term capital appreciation. The Fund
pursues its investment objective by investing primarily in equity and
equity related securities of health sciences companies worldwide, with an
emphasis on companies in the biotechnology and pharmaceuticals sectors. The
Fund also may invest in securities of both established and emerging
companies, the securities of which may be denominated in foreign
currencies. Operations of the Fund commenced on November 22, 1999.
The Manager of the Fund is PW Eucalyptus Management, L.L.C. (the
"Manager"), a Delaware limited liability company. The Manager's capital
account balance at December 31, 1999 was $1,161,981. The Manager is a joint
venture between PW Fund Advisor, L.L.C. ("PWFA") and OrbiMed Advisors
L.L.C. ("OrbiMed"). PWFA is the managing member of the Manager and is an
indirect, wholly-owned subsidiary of Paine Webber Group Inc. and is
registered as an investment advisor under the Investment Advisers Act of
1940, as amended. Investment professionals employed by OrbiMed will manage
the Fund's investment portfolio on behalf of the Manager under the
supervision of PWFA's personnel. OrbiMed is also registered as an
investment advisor under the Investment Advisors Act of 1940, as amended.
The Fund's Manager, to the fullest extent permitted by applicable law, has
irrevocably delegated to a group of individuals ("Directors") its rights
and powers to manage and control the business affairs of the Fund,
including the exclusive authority to oversee and to establish policies
regarding the management, conduct and operation of the Fund's business. The
Directors have engaged the Manager to provide investment advice to, and
day-to-day management of, the Fund.
Initial and additional subscriptions for interests by eligible investors
may be accepted at such times as the Manager may determine and will
generally be accepted monthly. The Fund reserves the right to reject any
subscription for interests in the Fund. The Fund from time to time may
offer to repurchase interests pursuant to written tenders to Members. These
repurchases will be made at such times and on such terms as may be
determined by the Directors, in their complete and exclusive discretion.
The Manager expects that generally, beginning in December 2000, it will
recommend to the Directors that the Fund offer to repurchase interests from
Members twice each year, in June and December. Member's interests in the
Fund can only be transferred or assigned with the approval of the Manager.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Notes to Financial Statements
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December 31, 1999
- --------------------------------------------------------------------------------
2. Significant Accounting Policies
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the Manager to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. The Manager believes that the
estimates utilized in preparing the Fund's financial statements are
reasonable and prudent; however, actual results could differ from these
estimates.
Securities transactions, including related revenue and expenses, are
recorded on a trade-date basis and dividends are recorded on an ex-dividend
date basis. Interest income is recorded on the accrual basis. Realized
gains and losses from security and foreign currency transactions are
calculated on the identified cost basis.
Cash and cash equivalents consist of monies invested in money market funds
and are accounted for at cost plus accrued interest as reported by the
money market funds.
a. Portfolio Valuation
Net asset value of the Fund will be determined as of the close of business
at the end of any fiscal period in accordance with the valuation principles
set forth below or as may be determined from time to time pursuant to
policies established by the Directors.
Domestic exchange traded securities and NASDAQ listed equity securities
will be valued at their last composite sales prices as reported on the
exchanges where such securities are traded. If no sales of such securities
are reported on a particular day, the securities will be valued based upon
their composite bid prices for securities held long, or their composite ask
prices for securities sold short, as reported by such exchanges. Securities
traded on a foreign securities exchange will be valued at their last sales
prices on the exchange where such securities are primarily traded, or in
the absence of a reported sale on a particular day, at their bid prices, in
the case of securities held long, or ask prices, in the case of securities
sold short, as reported by such exchange. Listed options will be valued
using last sales prices as reported by the exchange with the highest
reported daily volume for such options or, in the absence of any sales on a
particular day, at their bid prices as reported by the exchange with the
highest volume on the last day a trade was reported. Other securities for
which market quotations are readily available will be valued at their bid
prices, or ask prices in the case of securities sold short, as obtained
from one or more dealers making markets for such securities. If market
quotations are not readily available, securities and other assets will be
valued at fair value as determined in good faith by, or under the
supervision of, the Directors.
Debt securities will be valued in accordance with the procedures described
above, which with respect to such securities may include the use of
valuations furnished by a pricing service which employs a matrix to
determine valuations for normal institutional size trading units. The
Directors will periodically monitor the reasonableness of valuations
provided by any such pricing service. Debt securities with remaining
maturities of 60 days or less, absent unusual circumstances, will be valued
at amortized cost, so long as such valuation is determined by the Directors
to represent fair value.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Notes to Financial Statements
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December 31, 1999
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All assets and liabilities initially expressed in foreign currencies will
be converted into U.S. dollars using foreign exchange rates provided by a
pricing service compiled as of 4:00 p.m. London time. Trading in foreign
securities generally is completed, and the values of such securities are
determined, prior to the close of securities markets in the U.S. Foreign
exchange rates are also determined prior to such close.
On occasion, the values of such securities and exchange rates may be
affected by events occurring between the time which determination of such
values or exchange rates are made and the time that the net asset value of
the Fund is determined. When such events materially affect the values of
securities held by the Fund or its liabilities, such securities and
liabilities will be valued at fair value as determined in good faith by, or
under the supervision of, the Directors.
Foreign-denominated assets may involve more risks than domestic
transactions, including currency risk, political and economic risk,
regulatory risk, and market risk. Risks may arise from the potential
inability of a counterparty to meet the terms of a contract and from
unanticipated movements in the value of foreign currencies relative to the
U.S. dollar.
The Fund does not isolate the portion of operations resulting from changes
in foreign exchange rates on investments from the fluctuations arising from
changes in market prices of foreign securities held. Such fluctuations are
included in net realized and unrealized gain or loss from investments. Net
realized exchange gain or loss from foreign currency transactions represent
net foreign exchange gain or loss from forward foreign currency contracts,
disposition of foreign currencies, currency gain or loss realized between
the trade and settlement dates on security transactions, and the difference
between the amount of net investment income recorded on the Fund's
accounting records and the U.S. dollar equivalent amounts actually received
or paid. Net unrealized foreign exchange gain or loss arises from changes
in value of assets and liabilities, other than investments in securities,
as a result of changes in exchange rates.
b. Fund Expenses
The Fund will bear all expenses incurred in the business of the Fund,
including, but not limited to, the following: all costs and expenses
related to portfolio transactions and positions for the Fund's account;
legal fees; accounting and auditing fees; costs of insurance; registration
expenses; certain offering costs and organization costs; and expenses of
meetings of Directors and Members.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Notes to Financial Statements
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December 31, 1999
- --------------------------------------------------------------------------------
c. Income Taxes
No provision for the payment of Federal, state or local income taxes has
been provided on the profits of the Fund. Each Member is individually
required to report on its own tax returns its distributive share of the
Fund's taxable income or loss.
3. Management Fee, Profit Allocation, Related Party Transactions and Other
PWFA provides certain management and administrative services to the Fund,
including, among other things, providing office space and other support
services to the Fund. In consideration for such services, the Fund will pay
PWFA a monthly management fee at an annual rate of 1.25% of the Fund's net
assets for the month, excluding assets attributable to the Manager's
capital account (the "Fee"). The Fee is debited against the Members'
capital accounts, excluding the Manager. A portion of the fee will be paid
by PWFA to an affiliate of OrbiMed Advisors L.L.C.
PaineWebber Incorporated ("PWI", a wholly-owned subsidiary of Paine Webber
Group Inc.) acts as a placement agent for the Fund, without special
compensation from the Fund, and will bear its own costs associated with its
activities as placement agent. Placement fees, if any, charged on
contributions are debited against the contribution amounts to arrive at a
net subscription amount.
The Fund may execute portfolio transactions through PWI. During the period
ended December 31, 1999, PWI did not earn brokerage commissions from
portfolio transactions executed on behalf of the Fund.
The increase (or decrease) in Members' capital derived from operations (net
profit) is initially allocated to the capital accounts of all Members on a
pro-rata basis. At the end of the twelve month period following the
admission of a Member to the Fund, and generally at the end of each fiscal
year thereafter, the Manager is entitled to an incentive allocation (the
"Incentive Allocation") of 20% of the net profits, if any, that would have
been credited to the Member's capital account for such period. The
Incentive Allocation will be made only with respect to net profits that
exceed any net losses previously charged to the account of such Member who
have not been offset by any net profits subsequently credited to the
account of the Member. There was no Incentive Allocation recorded in the
financial statements for the period ended December 31, 1999, because a
twelve month period had not lapsed for any individual Member.
Each Director, who is not an "interested person" of the Fund, as defined by
the 1940 Act, receives an annual retainer of $5,000 plus a fee for each
meeting attended. Any Director who is an "interested person" does not
receive any annual or other fee from the Fund. All Directors are reimbursed
by the Fund for all reasonable out-of-pocket expenses incurred by them in
performing their duties. In 1999, these expenses were assumed by PWFA on
behalf of the Fund.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Notes to Financial Statements
- --------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
3. Management Fee, Profit Allocation, Related Party Transactions and Other
(continued)
PFPC Trust Company (an affiliate of PNC Bank, N.A.) serves as custodian of
the Fund's assets and provides custodial services for the Fund. PFPC Trust
Company entered into a service agreement whereby PNC Bank, N.A. provides
securities clearance functions.
PFPC Inc. (also an affiliate of PNC Bank, N.A.) serves as Administrator and
Accounting Agent to the Fund, and in that capacity provides certain
accounting, record keeping, tax and investor related services. PFPC Inc.
receives a monthly fee primarily based upon aggregate net assets of the
Fund.
4. Securities Transactions
Aggregate purchases and sales of investment securities, for the year ended
December 31, 1999, amounted to $41,644,953 and $5,361,803, respectively.
At December 31, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes. At December 31, 1999, accumulated net unrealized appreciation on
investments was $4,300,702, consisting of $5,879,612 gross unrealized
appreciation and $1,578,910 gross unrealized depreciation.
5. Short-Term Borrowings
The Fund has the ability to trade on margin and, in that connection,
borrows funds from brokers and banks for investment purposes. Trading in
equity securities on margin involves an initial cash requirement
representing at least 50% of the underlying security's value with respect
to transactions in U.S. markets and varying percentages with respect to
transactions in foreign markets. The Act requires the Fund to satisfy an
asset coverage requirement of 300% of its indebtedness, including amounts
borrowed, measured at the time the Fund incurs the indebtedness. The Fund
pledges securities as collateral for the margin borrowings, which are
maintained in a segregated account held by the Custodian. The Fund had no
borrowings outstanding at December 31, 1999.
6. Financial Instruments with Off-Balance Sheet Risk or Concentrations of
Credit Risk
In the normal course of business, the Fund may trade various financial
instruments and enter into various investment activities with off-balance
sheet risk. These financial instruments include forward and futures
contracts, options and sales of securities sold, not yet purchased.
Generally, these financial instruments represent future commitments to
purchase or sell other financial instruments at specific terms at specified
future dates.
<PAGE>
PW Eucalyptus Fund, L.L.C.
Notes to Financial Statements
- --------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
6. Financial Instruments with Off-Balance Sheet Risk or Concentrations of
Credit Risk (continued)
Each of these financial instruments contains varying degrees of off-balance
sheet risk whereby changes in the market value of the securities underlying
the financial instruments may be in excess of the amounts recognized in the
statement of assets, liabilities and members' capital.
Securities sold short, not yet purchased represents obligations of the
Membership to deliver specified securities and thereby creates a liability
to purchase such securities in the market at prevailing prices.
Accordingly, these transactions result in off-balance sheet risk as the
Membership's ultimate obligation to satisfy the sale of securities sold,
not yet purchased may exceed the amount indicated in the statement of
assets, liabilities and members' capital. The cash due from broker is
primarily related to securities sold, not yet purchased; its use is
therefore restricted until the securities are purchased.
During the year ended December 31, 1999, the Fund did not trade any forward
or futures contracts or options.
7. Financial Highlights
The following represents the ratios to average net assets and other
supplemental information for the period indicated:
<TABLE>
<CAPTION>
PERIOD FROM NOVEMBER 22, 1999
(COMMENCEMENT OF OPERATIONS) TO
DECEMBER 31, 1999
------------------------------
<S> <C>
Ratio of net investment loss to average net assets -6.11%*
Ratio of operating expenses to average net assets 8.74%*
Ratio of interest expense to average net assets .01%*
Portfolio turnover rate 10.94%
Total return 8.62%**
Average debt ratio .28%
* Annualized.
** Total return assumes a purchase of a member interest in the Fund on the
first day and a sale of the Fund interest on the last day of the period
noted, after Incentive Allocation to the Manager and does not reflect the
deduction of placement fees, if any, incurred when subscribing to the Fund.
Total returns for a period of less than a full year are not annualized.
</TABLE>
<PAGE>
PW Eucalyptus Fund, L.L.C.
Notes to Financial Statements
- --------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
8. Subsequent Events
Effective January 1, 2000 the Fund received additional Member capital
contributions of $40,940,637. Effective February 1, 2000, the Fund received
additional Member capital contributions of $33,291,430.
9. Year 2000 (unaudited)
PFPC Inc. experienced no significant disruptions in mission critical
information technology and non-information technology systems and believes
those systems successfully responded to the Year 2000 date change. PFPC
Inc. is not aware of any material problems resulting from Year 2000 issues,
either with its products, its internal systems, or the products and
services of third parties. PFPC Inc. will continue to monitor its mission
critical computer applications and those of its suppliers and vendors
throughout the Year 2000 to ensure that any latent Year 2000 matters that
may arise are addressed promptly.
