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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
June 30, 2000 1-1225
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Date of Report (Date of Earliest Event Reported) (Commission File Number)
AMERICAN HOME PRODUCTS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 13-2526821
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
Five Giralda Farms, Madison, N.J. 07940
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (973) 660-5000
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Item 2. Acquisition or Disposition of Assets
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Effective June 30, 2000, American Home Products Corporation (the
"Company") substantially completed the sale (the "Transaction") of its
Cyanamid Agricultural Products business to BASF Aktiengesellschaft
("BASF"). The Company issued a press release on June 30, 2000
regarding this transaction. The press release is attached hereto as
Exhibit 99.2. The Cyanamid Agricultural Products business
manufactures, distributes and sells crop protection and pest control
products, such as herbicides, insecticides and fungicides.
The sale was made pursuant to a Purchase Agreement dated as of
March 20, 2000 (Exhibit 10.1 hereof), and the First Amendment to the
Purchase Agreement, dated as of June 30, 2000 (Exhibit 10.2 hereof),
each of which is incorporated herein by reference. Under the terms of
the Purchase Agreement, as amended, BASF paid the Company $3.8 billion
in cash and assumed certain debt. The Company recorded an after-tax
loss on the sale of this business of $1,573.0 million or $1.19 per
share-diluted in the 2000 first quarter. The loss on the sale included
closing costs, which were more than offset by after-tax operating
income of the Cyanamid Agricultural Products business of $86.0 million
from April 1, 2000 through June 30, 2000. However, the loss on the
sale is due primarily to a difference in the basis of the net assets
sold for financial reporting purposes compared to the Company's basis
in such net assets for tax purposes. The difference related, for the
most part, to goodwill that is not recognized for tax purposes. As a
result, the transaction generated a taxable gain, requiring the
recording of a tax provision, in addition to requiring a write-off of
net assets in excess of the selling price.
The selling price and terms of the Purchase Agreement, as amended,
were determined based upon arms-length negotiations between the
Company and BASF. No material relationship existed between Company and
BASF or any of their respective affiliates, directors, officers or
associates of any such directors or officers.
Item 7. Financial Statements, Pro Forma Information and Exhibits
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(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Unaudited Pro Forma Consolidated Financial Information
The unaudited pro forma consolidated statement of operations and
related loss per share data for the year ended December 31, 1999 is
based upon the Company's historical results from continuing
operations, adjusted to reflect the impact of the Transaction as if it
had occurred on January 1, 1999.
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The unaudited pro forma consolidated statement of operations for
the year ended December 31, 1999 is not necessarily indicative of the
Company's consolidated results of operations had the Transaction
reflected therein actually been consummated on January 1, 1999, nor is
it necessarily indicative of the Company's consolidated results of
operations for any subsequent period.
An unaudited pro forma consolidated balance sheet as of March 31,
2000 and an unaudited pro forma consolidated statement of operations
for the three months ended March 31, 2000 will not be filed since the
Cyanamid Agricultural Products business is reflected as a discontinued
operation in the Company's unaudited consolidated financial
information as of March 31, 2000 included in the first quarter Form
10-Q filed with the Securities and Exchange Commission ("SEC") on May
15, 2000. In addition, the Company's unaudited consolidated financial
information for the period ended June 30, 2000 will reflect the
completion of the Transaction.
Further, the only required adjustment to the March 31, 2000 historical
consolidated balance sheet, filed with the SEC, necessary to reflect
the disposition of the Cyanamid Agricultural Products business would
be to reflect the $3.8 billion of proceeds received, $2,944.8 million
on an after-tax basis, and the resulting application of the proceeds
to pay down outstanding commercial paper debt. Similarly, the only
required adjustment to the March 31, 2000 historical consolidated
income from continuing operations would be to reflect a reduction of
$42.1 million of interest expense resulting from the pro forma pay
down of commercial paper debt. This adjustment results in a pro forma
income and diluted earnings per share from continuing operations of
$1,773.4 million and $1.34, respectively, for the three month period
ended March 31, 2000.
(c) Exhibits
10.1 Purchase Agreement by and among American Cyanamid Company,
American Home Products Corporation, and BASF
Aktiengesellschaft, dated as of March 20, 2000 is
incorporated by reference to Exhibit 10.1 of the Company's
Quarterly Report on Form 10-Q for the quarter ended March
31, 2000.
(Confidential treatment requested - confidential portions
have been omitted and filed separately with the Commission)
10.2 First Amendment to the Purchase Agreement, dated as of June
30, 2000, by and among American Cyanamid Company, American
Home Products Corporation, and BASF Aktiengesellschaft.
(Confidential treatment requested - confidential portions
have been omitted and filed separately with the Commission)
99.1 Press Release dated March 21, 2000.
99.2 Press Release dated June 30, 2000.
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<TABLE>
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
(In thousands, except per share amounts)
<CAPTION>
Less: Agricultural
Historical Products Business Pro Forma
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(1) (2)(3)
<S> <C> <C> <C>
Net Sales $13,550,176 $1,668,980 $11,881,196
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Cost of goods sold 3,692,522 669,966 3,022,556
Selling, general and administrative expenses 5,039,862 651,597 4,388,265
Research and development expenses 1,739,960 152,455 1,587,505
Interest expense, net 213,866 0 213,866
Other (income) expense, net (237,408) 18,289 (255,697)
Litigation charge 4,750,000 0 4,750,000
Special charges 277,000 195,000 82,000
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15,475,802 1,687,307 13,788,495
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Loss before federal and foreign taxes (1,925,626) (18,327) (1,907,299)
Provision (benefit) for taxes:
Federal (1,190,395) (80,706) (1,109,689)
Foreign 491,890 82,257 409,633
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(698,505) 1,551 (700,056)
Net Loss ($1,227,121) ($19,878) ($1,207,243)
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Basic Loss per Share ($0.94) ($0.92)
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Diluted Loss per Share ($0.94) ($0.92)
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Average number of shares - basic (thousands) 1,308,876 1,308,876
Average number of shares - diluted (thousands) 1,308,876 1,308,876
See notes to unaudited pro forma consolidated statement of operations.
</TABLE>
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
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1. Represents the statement of operations for the Cyanamid Agricultural Products
business for the year ended December 31, 1999.
2. Included in the historical statement of operations and pro forma balances are
continuing costs of approximately $24.0 million. Such costs include certain
administrative, postretirement benefit, and overhead expenses that had been
previously allocated to the Cyanamid Agricultural Products business.
3. Assuming the proceeds from the Transaction were received on January 1, 1999,
such net proceeds, after tax, of $2,944.8 million would have been used to pay
down outstanding commercial paper with a weighted average interest rate of
5.72%. By paying down such debt, the Company would have reduced interest
expense by approximately $168.4 million for the year ended December 31, 1999.
This adjustment would result in a pro forma net loss and diluted loss per
share of $1,097.8 million and $0.84, respectively for the year ended December
31, 1999.
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Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN HOME PRODUCTS CORPORATION
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(Registrant)
By /s/ Paul J. Jones
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Paul J. Jones
Vice President and Comptroller
(Duly Authorized Signatory
and Chief Accounting Officer)
Date: July 17, 2000
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Exhibit Index
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Exhibit No. Description
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10.2 First Amendment to the Purchase Agreement, dated as of June 30, 2000
by and among American Cyanamid Company, American Home Products
Corporation, and BASF Aktiengesellschaft.
(Confidential treatment requested - confidential portions have been
omitted and filed separately with the Commission)
99.1 Press Release dated March 21, 2000.
99.2 Press Release dated June 30, 2000.
EX-1
