PFIZER INC
11-K, 2000-06-30
PHARMACEUTICAL PREPARATIONS
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 11-K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

 

(Mark One)

 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 1-3619

   

A.

Full title of the Plan and the address of the Plan, if different from that of the issuer named below:

   
 

PFIZER SAVINGS AND INVESTMENT PLAN
FOR EMPLOYEES RESIDENT IN PUERTO RICO

   

B.

Name of issuer of the securities held pursuant to the Plan and the address of its principal executive offices:

   
 

PFIZER INC.
235 EAST 42ND STREET
NEW YORK, NEW YORK 10017

 

 

PFIZER SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES RESIDENT IN PUERTO RICO
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1999

 

     Total 

Nonparticipant
      Directed

Participant 
   Directed 

Investments, at fair value:

     

Pfizer Inc. common stock:

     

Nonparticipant directed*, 531,688 shares, cost $3,035,521; Participant directed*, 552,788 shares, cost    $5,232,261

$35,178,233

$17,246,902

$17,931,331 

Other marketable securities**

2,946,106

--

2,946,106 

Interest-bearing deposits at cost which approximates fair value

    124,620

     39,279

     85,341 

Total investments

38,248,959

17,286,181

20,962,778 

       

Interest and other miscellaneous receivable/(payable)

290

809

(519)

Contributions receivable:

     

Employees

509,168

--

509,168 

Employers

    197,034

    197,034

        -- 

       

Net assets available for plan benefits-- Note 7


$38,955,451
===========

$17,484,024
===========

$21,471,427 
=========== 

       
       
       

*  Investments represent 5% or more of the Plan's net assets available for plan benefits.

** Individual investments are less than 5% of the Plan's net assets available for plan benefits.

 

 

See Notes to Financial Statements which are an integral part of these financial statements.

PFIZER SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES RESIDENT IN PUERTO RICO
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1998

 

     Total 

Nonparticipant
      Directed

Participant 
   Directed 

Investments, at fair value:

     

Pfizer Inc. common stock:

     

Nonparticipant directed*, 547,899 shares, cost $3,113,797; Participant directed*, 540,957 shares, cost $4,486,296

$45,369,125

$22,829,175 

$22,539,950

Other marketable securities**

2,634,501

-- 

2,634,501

Interest bearing deposits at cost which approximates fair value

     25,063

      2,437 

     22,626

Total investments

48,028,689

22,831,612 

25,197,077

       

Due (to)/from other funds

--

(168)

168

Interest and other miscellaneous receivable

6,071

110 

5,961

Contributions receivable:

     

Employees

512,257

-- 

512,257

Employers

    212,387

    212,387 

        --

       

Net assets available for plan benefits--Note 7


$48,759,404
===========

$23,043,941 
=========== 

$25,715,463
===========

 

*  Investments represent 5% or more of the Plan's net assets available for plan benefits.

** Individual investments are less than 5% of the Plan's net assets available for plan benefits.

 

 

See Notes to Financial Statements which are an integral part of these financial statements.

 

PFIZER SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES RESIDENT IN PUERTO RICO
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Year Ended December 31, 1999

 

     Total 

Nonparticipant 
      Directed 

Participant 
   Directed 

Net investment income:

     

Cash dividends:

     

Pfizer Inc. common stock

$   334,464 

$   165,465 

$   168,999 

Interest and dividends

    145,348 

      3,707 

    141,641 

 

479,812 

169,172 

310,640 

Investment management fees--Note 4

       (921)

         -- 

       (921)

 

478,891 

169,172 

309,719 

       

Realized gains on investments, net--Note 5:

     

Pfizer Inc. common stock

860,878 

531,312 

329,566 

Other marketable securities

    133,885 

         -- 

    133,885 

 

994,763 

531,312 

463,451 

Unrealized depreciation of investments, net--Note 6

(10,867,799)

 (5,503,997)

 (5,363,802)

 

 (9,394,145)

 (4,803,513)

 (4,590,632)

Contributions:

     

Employees

4,786,715 

-- 

4,786,715 

Employers

1,882,068 

1,882,068 

-- 

Withdrawals--Note 7

 (7,078,591)

 (2,638,472)

 (4,440,119)

 

   (409,808)

   (756,404)

    346,596 

Net decrease

(9,803,953)

(5,559,917)

(4,244,036)

Net assets available for plan benefits--Note 7:

     

Beginning of year

 48,759,404 

 23,043,941 

 25,715,463 

End of year

$38,955,451 
=========== 

$17,484,024 
=========== 

$21,471,427 
=========== 

       
       

 

See Notes to Financial Statements which are an integral part of these financial statements.

 

PFIZER SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES RESIDENT IN PUERTO RICO
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Year Ended December 31, 1998

 

     Total 

Nonparticipant 
      Directed 

Participant 
   Directed 

Net investment income:

     

Cash dividends:

     

Pfizer Inc. common stock

$   277,614 

$   141,253 

$   136,361 

Interest and dividends

    125,796 

      3,383 

    122,413 

 

403,410 

144,636 

258,774 

Investment management fees--Note 4

       (121)

         -- 

       (121)

 

    403,289 

    144,636 

    258,653 

Realized gains on investments, net--Note 5:

     

Pfizer Inc. common stock

656,810 

389,407 

267,403 

Other marketable securities

    111,225 

         -- 

    111,225 

 

768,035 

389,407 

378,628 

Miscellaneous (expense)/income

(387)

(391)

Unrealized appreciation of investments, net--Note 6

 17,798,059 

  8,921,671 

  8,876,388 

 

 18,968,996 

  9,455,718 

  9,513,278 

Contributions:

     

Employees

4,045,538 

-- 

4,045,538 

Employers

1,737,449 

1,737,449 

-- 

Withdrawals--Note 7

 (6,600,226)

 (2,200,586)

 (4,399,640)

 

   (817,239)

   (463,137)

   (354,102)

Net increase

18,151,757 

8,992,581 

9,159,176 

Net assets available for plan benefits--Note 7:

     

Beginning of year

 30,607,647 

 14,051,360 

 16,556,287 

End of year

$48,759,404 
=========== 

$23,043,941 
=========== 

$25,715,463 
=========== 

       
       

 

See Notes to Financial Statements which are an integral part of these financial statements.

PFIZER SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES RESIDENT IN PUERTO RICO
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998

Note 1 - Summary Plan Description

General- The Pfizer Savings and Investment Plan for Employees Resident in Puerto Rico (the "Plan") is a defined contribution savings plan which was adopted on February 1, 1990. Participation in the Plan is open to all eligible employees of the Puerto Rico branches of Pfizer Pharmaceuticals, Inc., a subsidiary of Pfizer Inc. (the "Company") and Pfizer Corporation, an indirect wholly-owned subsidiary of the Company (individually and collectively, the "Companies"). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974.

Schneider Puerto Rico, formerly Namic Caribe, Inc., an affiliate of the Companies, was a participant in the Plan from January 1, 1997 until September 1998 when it was sold.

Under Puerto Rico law, any qualified plan involving pretax contributions or involving a cash or deferred arrangement must comply with one of two nondiscrimination tests. For the fiscal year ended December 31, 1999, the Plan complied with both discrimination tests.

In June 1999, Pfizer Inc. effected a three-for-one stock split in the form of a 200% stock dividend. The number of shares of Pfizer Inc. common stock held by the Plan as of December 31, 1998 has been restated to reflect the three-for-one stock split.

The following is a general description of certain provisions of the Plan. Refer to the Plan document for a complete description of the Plan.

Contributions - Each participant may make contributions on an after-tax basis and/or a before-tax basis (that is, choose to reduce his or her compensation and have the Companies contribute on his or her behalf). Before and after tax contributions are subject to certain restrictions under the Puerto Rico Income Tax Act of 1954, as amended. Contributions of up to 2% of compensation are matched 100% by the Companies and the next 4% is matched 50%. Employee contributions in excess of 6% are not matched.

Investment options - Each participant in the Plan elects to have his or her contributions invested in any one or any combination of six investment funds. These funds are described below:

Fund A 

-

Intermediate U.S. Treasury notes and bonds

Fund B

-

A collective index fund of corporate common stocks that seeks to mirror the performance of the S&P 500 index

Fund C

-

Common stock of the Company

Fund E

-

An index mutual fund of common stocks of companies with market capitalization averaging approximately $500 million

Fund F

-

A collective index fund of common stocks of large, well-established companies whose price-to-book ratios are, as a whole, typically below the average for the S&P 500 index and whose dividends are typically higher than the average for the S&P 500 index

Fund G

-

A collective index fund of common stocks of large, well-established companies whose price-to-book ratios are, as a whole, typically above the average for the S&P 500 index and whose dividends are typically lower than average for the S&P 500 index

 

 

Note 1 - Summary Plan Description (continued)

The trustee of the Plan, Banco Popular de Puerto Rico, manages investments in certain investment funds and therefore, is deemed a related party. The Plan's trust agreement provides that any portion of any of the funds may, pending its permanent investment or distribution, be invested in short-term investments.

Eligibility and Vesting - Substantially all employees of the Companies who are resident in Puerto Rico are eligible to participate in the Plan beginning on the first payroll run of the following month (following quarter prior to 1999), after date of hire, or the beginning of any month or payroll period thereafter. A participant is immediately vested in the full value of his or accounts (i.e., participant and employer contributions).

Payment of Benefits - Upon separation from service, retirement, or disability, a participant may elect to receive a lump sum distribution currently or at any time up to the later of 13 months from separation or age 65, subject to the provisions of the plan. In the event of a participant's death, a spouse beneficiary may elect payment currently or defer payments until the later of when the participant would have reached age 65 or 13 months from date of death. A nonspouse beneficiary may defer payment up until 13 months from the date of death.

Withdrawals - A participant in the Plan may withdraw all or part of his or her account balance subject to the provisions of the Plan.

Termination - The Companies expect to continue the Plan indefinitely, but necessarily reserve the right to amend, suspend or discontinue it in whole or in part, at any time, by action of the Companies' Boards of Directors. In the event of termination of the Plan, each participant shall receive the full value of his or her account balance as though he or she had retired as of the date of such termination. No part of the invested assets established pursuant to the Plan will at any time revert to the Companies.

Note 2 - Summary of Significant Accounting Policies

Basis of Accounting - The financial statements of the Plan are prepared on the accrual basis of accounting. For treatment of benefits payable, refer to Note 7. Certain reclassifications have been made to the 1998 financial statements 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 at the date of the financial statements. Actual results could differ from those estimates.

Investment Valuation - Pfizer Inc. common stock is valued at the closing market price on the last business day of the year. U. S. Government securities are recorded at fair value based on market or dealer quotes. Collective index funds and the mutual fund are recorded at fair value based on the closing market prices of the underlying investments held by the fund on the last business day of the year. Interest-bearing deposits are recorded at cost, which approximates fair value.

 

Note 2 - Summary of Significant Accounting Policies (continued)

Security Transactions - Purchases and sales of securities are reflected on a trade-date basis. Realized gains and losses on sales of investments represent the difference between the net proceeds received and the cost of the investments (average cost if less than the entire investment is sold).

Unrealized Appreciation/(Depreciation) of Investments - Unrealized appreciation/(depreciation) of investments for the year represents the difference between the cost of the investments and their fair value at the end of the year. Additionally, it reflects the reversal of the unrealized appreciation/(depreciation) as of the end of the prior year.

Net Investment Income - Dividend income is recorded on the ex-dividend date. Interest income is recorded as earned.

Note 3 - Income Taxes

No provision has been made for Puerto Rico income tax in reliance upon a determination letter issued by the Puerto Rico Department of Treasury, which states that the Plan meets the requirements of Section 165(a) of the Puerto Rico Income Tax Act of 1954 and that the trust established thereunder is entitled to exemption.

Effective January 1, 1997 and October 1, 1998, the Plan was amended and the Companies obtained another determination letter from the Puerto Rico Department of Treasury which states that the Plan still meets the above requirements. The Plan administrator and the Plan's legal and tax counsel believe that the Plan is designed and is currently being operated in compliance with all the applicable requirements. Therefore, no provision has been made for Puerto Rico income taxes.

Contributions made to the Plan by the Companies, including before-tax contributions made on the employees' behalf by the Companies and the appreciation on all funds in the employees' account, are not taxable to the employees under Puerto Rico income tax law while these amounts remain in the Plan.

Note 4 - Administrative Costs

Except for certain investment management fees, all costs and expenses of administering the Plan are assumed by the Companies.

 

Note 5 - Realized Gains on Investments

The aggregate net proceeds and cost used in the calculation of the net realized gains on investments are as follows:

 

            December 31, 1999            

 

Net Proceeds

      Cost

Realized Gain

Pfizer Inc. common stock

$1,064,305

$  203,427

$860,878

Collective funds

64,190

19,865

44,325

U.S. Government securities

877,601

859,455

18,146

Mutual fund

   1,807,558

 1,736,144

       71,414

 

$3,813,654
============

$2,818,891
==========

$994,763
=============

       
 

             December 31, 1998           

 

Net Proceeds

    Cost

Realized Gain

Pfizer Inc. common stock

$  819,968

$163,158

$656,810

Collective funds

150,856

69,093

81,763

U.S. Government securities

323,920

309,941

13,979

Mutual fund

     402,326

 386,843

       15,483

 

$1,697,070
============

$929,035
========

$768,035
=============

Note 6 - Unrealized Appreciation/(Depreciation) of Investments

The change in the amount of unrealized appreciation/(depreciation) was as follows:

 

            Aggregate Unrealized           

 

December 31,
       1999 

December 31,
        1998

Change 
During 1999 

       

Pfizer Inc. common stock

$26,910,451 

$37,769,032

$(10,858,581)

Collective funds

688,516 

538,744

149,772 

U.S. Government securities

-- 

29,586

(29,586)

Mutual fund

    (79,447)

      49,957

    (129,404)

 

$27,519,520 
=========== 

$38,387,319
============

$(10,867,799)
============ 

 

            Aggregate Unrealized           

 

December 31,
       1998 

December 31,
        1997

Change 
During 1998 

       

Pfizer Inc. common stock

$37,769,032 

$20,086,731

$17,682,301 

Collective funds

538,744 

407,736

131,008 

U.S. Government securities

29,586 

41,631

(12,045)

Mutual fund

     49,957 

     53,162

     (3,205)

 

$38,387,319 
=========== 

$20,589,260
===========

$17,798,059 
=========== 

 

Note 7 - Withdrawals and Reconciliation with Form 5500

For financial statement purposes, participant withdrawals and distributions are recorded when paid rather than when processed and approved for payment. Therefore, the net assets available for Plan benefits as of December  31, 1999 do not reflect a reduction for the following benefits payable to participants who had requested withdrawals as of December 31, but which were not distributed until the subsequent year:

Nonparticipant directed fund

$11,222

Participant directed funds

$31,553

 

$42,775
=======

For the purpose of Form 5500, such withdrawals and distributions are recorded when processed and approved for payment. Therefore, benefits payable to participants who have requested withdrawals are reported as benefit expense on Form 5500 for those years.

SCHEDULE 1
PFIZER SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES RESIDENT IN PUERTO RICO
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1999

 

Interest
  Rate  

Maturity
  Date  

Number of
Shares or
  Units  

   Cost   

Fair
    Value  

Nonparticipant Directed

         

Pfizer Inc.* Common Stock

--

--

531,688

$3,035,521

$17,246,902

Banco Popular de Puerto Rico*, Time Deposit

5.28%

--

--

    39,279

     39,279

Total nonparticipant directed investments

     


$3,074,800
==========


$17,286,181
===========

           

Participant Directed

         

Pfizer Inc.* Common Stock

--

--

552,788

$5,232,261

$17,931,331

           

Collective funds:

         

The Northern Trust Company*, Stock Index Fund

--

--

7,833

396,614

1,060,851

The Northern Trust Company*, Growth Equity Index Fund

--

--

13,117

138,999

157,850

The Northern Trust Company*, Value Index Fund

--

--

7,268

   136,430

    141,858

Total collective funds

     

   672,043
==========

1,360,559
===========

Mutual funds:

         

Vanguard Fund

--

--

164,601

1,653,135

1,573,582

The Northern Trust Company*, Small Company Index Mutual Fund

--

--

947

    11,859

     11,965

Total mutual funds

     

1,664,994
==========

1,585,547
===========

Time Deposits:

         

Banco Popular de Puerto Rico*

5.28%

--

--

4,682

4,682

Banco Popular de Puerto Rico*

5.28%

--

--

7,149

7,149

Banco Popular de Puerto Rico*

5.28%

--

--

71,208

71,208

Banco Popular de Puerto Rico*

5.28%

--

--

2,270

2,270

Banco Popular de Puerto Rico*

5.28%

--

--

        32

         32

Total time deposits

     

85,341
==========

85,341
===========

           

Total participant directed investments

     


$7,654,639
==========

$20,962,778
===========

           

*Party-in-interest

         

 

See accompanying independent auditors' report.

 

SCHEDULE 2
PFIZER SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES RESIDENT IN PUERTO RICO
SCHEDULE OF REPORTABLE TRANSACTIONS
Year Ended December 31, 1999

Investments Purchased

Number of
Transactions

Number of
 Shares  

  Cost 

   

Interest-bearing Deposit:

         

Banco Popular de Puerto Rico, Time Deposits (1)

279

--

$10,688,401

   

Investments Disposed

Number of
Transactions

Number of
 Shares  

  Cost 

Fair
   Value   

Realized
Gain/
 (Loss) 

Interest-bearing Deposit:

         

Banco Popular de Puerto   Rico, Time Deposits (1)

142

--

$10,589,789

$10,589,789

--

 

         


(1) Banco Popular de Puerto Rico is a "party-in-interest" of the Plan.

 

 

See accompanying independent auditors' report.

INDEPENDENT AUDITORS' REPORT

 

To the Administrative Committee
Pfizer Savings and Investment Plan for
  Employees Resident in Puerto Rico:

 

We have audited the accompanying statements of net assets available for plan benefits of the Pfizer Savings and Investment Plan for Employees Resident in Puerto Rico (the Plan) as of December 31, 1999 and 1998, and the related statements of changes in net assets available for plan benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 1999 and 1998, and the changes in net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of (1) assets held for investment purposes and (2) reportable transactions, as of and 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. The Fund information in the statements of net assets available for plan benefits and the statements of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each Fund. The supplemental schedules and Fund information 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/ KPMG LLP

 

KPMG LLP

May 5, 2000

Stamp No. 1461068 Puerto Rico
Society of Certified Public Accountants was
affixed to the record copy of this report.

 

SIGNATURES

 

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Savings and Investment Plan Committee have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.

PFIZER SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES RESIDENT IN PUERTO RICO

 

By:  /s/ Louis Prado

 
 
 

Louis Prado
   General Manager,
   Pfizer Pharmaceuticals, Inc.
   Chair, Savings and Investment
   Plan Committee

 

Date:  June 30, 2000

 

 

EXHIBIT 23

CONSENT OF INDEPENDENT AUDITORS

 

To the Administrative Committee
Pfizer Savings and Investment Plan for
 Employees Resident in Puerto Rico:

 

We consent to the use of our report included herein and incorporated by reference in the Registration Statement on Form S-8 dated November 18, 1991 (File No. 33-44053) of our report dated May 5, 2000, relating to the statements of net assets available for plan benefits of the Pfizer Savings and Investment Plan for Employees Resident in Puerto Rico as of December 31, 1999 and 1998, and the related statements of changes in net assets available for plan benefits for the years then ended, which report appears in the December 31, 1999 annual report on Form 11-K of the Pfizer Savings and Investment Plan for Employees Resident in Puerto Rico.

 

/s/ KPMG LLP

 

KPMG LLP

 

San Juan, Puerto Rico
June 30, 2000

 

 



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