<PAGE> 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
<PAGE> 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
<PAGE> 3
THE PHARMACIA & UPJOHN
EMPLOYEE SAVINGS PLAN
FINANCIAL STATEMENTS
December 31, 1999 and 1998
<PAGE> 4
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Index to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
Page
<S> <C>
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
</TABLE>
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.
<PAGE> 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
<PAGE> 6
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
=================================================================================================================
DECEMBER 31,
1999 1998
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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
=================== ====================
-----------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to the financial statements.
2
<PAGE> 7
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
=================================================================================================================
FOR THE YEAR ENDED
DECEMBER 31, 1999
-----------------------------------------------------------------------------------------------------------------
<S> <C>
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
=====================
-----------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 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
<PAGE> 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
<PAGE> 10
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
=============================================================================
YEARS OF PARTICIPATION NON-FORFEITABLE PERCENTAGE
-----------------------------------------------------------------------------
<S> <C>
1 but less than 2 33 1/3%
2 but less than 3 66 2/3%
3 or more 100%
-----------------------------------------------------------------------------
</TABLE>
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
<PAGE> 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
<PAGE> 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.
<TABLE>
<CAPTION>
====================================================================================================================
DECEMBER 31,
1999 1998
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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
--------------------------------------------------------------------------------------------------------------------
</TABLE>
*Nonparticipant-directed
8
<PAGE> 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:
<TABLE>
<CAPTION>
=====================================================================================
1999
-------------------------------------------------------------------------------------
<S> <C>
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)
=====================
-------------------------------------------------------------------------------------
</TABLE>
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:
<TABLE>
<CAPTION>
======================================================================================================================
1999 1998
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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
=================== ====================
----------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 14
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
===========================================================================================================================
YEAR ENDED
DECEMBER 31,
1999
---------------------------------------------------------------------------------------------------------------------------
<S> <C>
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
===================
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE> 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
<PAGE> 16
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
=============================================================================================================================
DECEMBER 31,
1999
-----------------------------------------------------------------------------------------------------------------------------
ALLOCATED UNALLOCATED TOTAL
--------- ----------- -----
<S> <C> <C> <C>
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
================= ================== =================
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
=============================================================================================================================
DECEMBER 31,
1998
-----------------------------------------------------------------------------------------------------------------------------
ALLOCATED UNALLOCATED TOTAL
--------- ----------- -----
<S> <C> <C> <C>
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
================== ================== =================
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 17
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
=============================================================================================================================
YEAR ENDED DECEMBER 31, 1999
-----------------------------------------------------------------------------------------------------------------------------
ALLOCATED UNALLOCATED TOTAL
--------- ----------- -----
<S> <C> <C> <C>
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
================== ================= =================
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE> 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.
<TABLE>
<CAPTION>
=========================================================================================================================
DECEMBER 31,
1999 1998
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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
=================== ====================
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
The following is a reconciliation of benefits paid to participants
according to the financial statements to Form 5500:
<TABLE>
<CAPTION>
==========================================================================================================
YEAR ENDED
DECEMBER 31, 1999
----------------------------------------------------------------------------------------------------------
<S> <C>
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
==================
-----------------------------------------------------------------------------------------------------------
</TABLE>
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
<PAGE> 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
<PAGE> 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
<PAGE> 21
SUPPLEMENTAL SCHEDULES
<PAGE> 22
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
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
---------------- ---------------
</TABLE>
------------------------------------------
* 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
<PAGE> 23
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
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
---------------- ---------------
</TABLE>
18
<PAGE> 24
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
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
</TABLE>
-------------------------------
*** 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
<PAGE> 25
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
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
</TABLE>
20
<PAGE> 26
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
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
</TABLE>
21
<PAGE> 27
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
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
</TABLE>
22
<PAGE> 28
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
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
</TABLE>
23
<PAGE> 29
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
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
---------------- ---------------
</TABLE>
24
<PAGE> 30
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
* Participant loans:
Participant loans Interest rate: 6% - 11% $ - $ 28,479,526
----------------- ----------------
Total Investments $ 1,071,059,220 $ 1,610,486,072
================= ================
</TABLE>
25
<PAGE> 31
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Reportable Transactions
For the Year Ended December 31, 1999
EIN# 38-1123360
Plan# 002
<TABLE>
<CAPTION>
(a) (b)
IDENTIFY OF PARTY DESCRIPTION OF NUMBER OF (c) (d)
INVOLVED ASSET TRANSACTIONS PURCHASE PRICE SELLING PRICE
<S> <C> <C> <C> <C>
State Street Bank & Short-Term 181 58,590,537 -
* Trust Company Investment Fund 332 - 56,712,412
</TABLE>
<TABLE>
<CAPTION>
(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)
<C> <C> <C> <C> <C>
- - 58,590,537 58,590,537 -
- - 56,712,412 56,712,412 -
</TABLE>
-------------------------------------------
* Represents a party-in-interest to the Plan
26
<PAGE> 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
