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, 2000
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
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed by the undersigned hereunto duly
authorized.
The Pharmacia & Upjohn Employee Savings Plan
By: /s/ Peter J. McCauley
-----------------------
Peter J. McCauley
Director, Global Pension & Savings Plan
Secretary, Administrative Committee - U.S. Plans
Pharmacia Corporation
June 29, 2001
3
THE PHARMACIA & UPJOHN
EMPLOYEE SAVINGS PLAN
FINANCIAL STATEMENTS
December 31, 2000 and 1999
4
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Index to Financial Statements
December 31, 2000 and 1999
Page
----
Report of Independent Accountants 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits
as of December 31, 2000 and 1999 2
Statement of Changes in Net Assets Available for Plan Benefits
for the year ended December 31, 2000 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULES:
Schedule of Assets Held for Investment Purposes
At End of Year December 31, 2000 17
Schedule of Reportable Transactions
for the year ended December 31, 2000 26
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.
5
[PRICEWATERHOUSECOOPERS LETTERHEAD]
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
benefits of The Pharmacia & Upjohn Employee Savings Plan (the "Plan") at
December 31, 2000 and 1999, and the changes in net assets available for benefits
for the year ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States of America. 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 of America, 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 our opinion.
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 at Year End as of December 31, 2000 and Reportable
Transactions for the year ended December 31, 2000 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
-------------------------------
PricewaterhouseCoopers LLP
June 13, 2001
6
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
DECEMBER 31,
----------------------------------------
2000 1999
-------------- --------------
ASSETS:
Investments, at fair value $1,683,304,487 $1,388,704,265
Investments, at contract value 214,166,263 221,781,807
-------------- --------------
Total investments 1,897,470,750 1,610,486,072
-------------- --------------
Receivables:
Company contributions, net of forfeitures 33,568,691 29,204,436
Participant contributions 3,296,318 --
Dividends and interest receivable 4,564,239 4,570,253
Investments sold 1,043,145 --
-------------- --------------
Total receivables 42,472,393 33,774,689
-------------- --------------
Total assets 1,939,943,143 1,644,260,761
-------------- --------------
LIABILITIES:
Notes payable 234,700,000 260,700,000
Interest payable 45,975,096 44,308,671
Other 622,757 882,410
-------------- --------------
Total liabilities 281,297,853 305,891,081
-------------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,658,645,290 $1,338,369,680
============== ==============
See accompanying notes to the financial statements.
2
7
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for Plan Benefits
FOR THE YEAR ENDED
DECEMBER 31, 2000
--------------
Additions:
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 291,400,136
Interest 15,224,314
Dividends 60,531,707
Interest on participants' loans 2,555,587
--------------
Total investment income 369,711,744
Contributions:
Participant 71,158,334
Rollovers 7,315,938
Company, net of forfeitures 34,090,320
--------------
Total additions 482,276,336
--------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 138,041,527
Plan expenses 979,944
Interest on notes payable 22,979,255
--------------
Total deductions 162,000,726
--------------
Net increase 320,275,610
--------------
Net assets available for plan benefits:
Beginning of year 1,338,369,680
--------------
End of year $1,658,645,290
==============
See accompanying notes to the financial statements.
3
8
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
1. DESCRIPTION OF PLAN
The following brief description of the Pharmacia & Upjohn 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
Pharmacia Corporation (the "Company") is the sponsor of the Plan. 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 the Company not otherwise covered
by another defined contribution plan of the Company.
ADMINISTRATION
The Administrative Committee U.S. Plans is responsible for administering
Plan operations in accordance with ERISA plan documents. The Global
Benefits 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 Total 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 $10,500 limit on a
participant's before-tax contributions during the 2000 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 matching contributions are the basis for allocating shares of the
Company's Convertible Perpetual Preferred Stock ("Preferred Stock") to
participants' accounts. Dividends paid to the participants' ESOP accounts
are also allocated in Preferred Stock.
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 equivalent to the
Company match. The value of a share of Preferred Stock will be the closing
price of one share of Pharmacia common stock multiplied by a 1.7255
conversion factor.
Cash dividends on Preferred Stock shares allocated to participants'
accounts prior to January 1, 2000 are exchanged for additional shares of
Preferred Stock using the $40.30 per-share stated value (the purchase price
paid by the ESOP at its inception). Cash dividends on Preferred Stock
shares allocated to participants' accounts on or after January 1, 2000 are
exchanged for additional shares of Preferred Stock using the Pharmacia
common stock price multiplied by the 1.7255 conversion factor.
4
9
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
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
the Company at the inception of the leveraged ESOP (see Note 4).
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) Pharmacia Common Stock Fund, or
(h) Any combination of the above, provided that a minimum of five
percent and a multiple of one percent 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 matching contributions and earnings thereon are only posted to the
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 Pharmacia 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 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.
As of January 1, 2000, all Company contributions and earnings thereon are
100% vested for all active participants on or after to January 1, 2000.
5
10
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
Participants who terminated employment prior to January 1, 2000 with less
than five years of employment service and less than three years of
participation in the Plan are subject to the vesting schedule below:
YEARS OF PARTICIPATION NON-FORFEITABLE PERCENTAGE
---------------------- --------------------------
1 but less than 2 33 1/3%
2 but less than 3 66 2/3%
3 or more 100%
Participants who cease participation in the Plan may be entitled to
forfeited amounts if they re-participate in the Plan within five 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 the Company may elect to receive their vested Plan
balance. However, their Pharmacia Common Stock Fund and ESOP accounts may
be subject to forfeiture based upon years of participation and service (if
the participant terminated employment prior to January 1, 2000).
Benefits are paid either in cash or in cash and Pharmacia common stock.
Pharmacia common stock is issued only with respect to the participant's
accounts in the Pharmacia 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
1.7255 shares of Pharmacia common stock.
Participants may also elect to make in-service withdrawals subject to
certain restrictions.
MERGER OF PLAN SPONSOR
Effective March 31, 2000, Pharmacia & Upjohn, Inc. merged with the Monsanto
Company to form Pharmacia Corporation. As a result of the merger, each
share of Pharmacia & Upjohn common stock was exchanged for 1.19 shares of
Pharmacia Corporation common stock. In addition, each share of Pharmacia &
Upjohn Preferred Stock was exchanged for one share of
6
11
convertible perpetual preferred stock of Pharmacia Corporation. Amounts of
common shares presented as of December 31, 1999 throughout this document
represent Pharmacia & Upjohn shares prior to applying the 1.19 conversion
ratio and amounts of preferred shares presented as of December 31, 1999
represent the equivalent number of Pharmacia & Upjohn preferred shares.
2. SUMMARY OF ACCOUNTING POLICIES
METHOD OF ACCOUNTING
The financial statements of the Plan have been prepared on the accrual
basis of accounting.
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). Pharmacia 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.
Pharmacia Preferred Stock is valued using the higher of the per-share
stated value of $40.30 or the quoted market price of Pharmacia common stock
multiplied by 1.7255 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
12
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
PLAN EXPENSES
The Plan pays certain outside service provider expenses (e.g.,
recordkeeping and trustee fees) incurred in the operation of the Plan.
Investment manager fees are paid by the Plan and are netted against
investment income. Certain other expenses are paid by the Company.
FORFEITURES
Forfeited amounts are used to pay expenses of the Plan, interest on ESOP
debt incurred by the Plan and to reduce Company contributions. Forfeitures
which have not been utilized amounted to $21,630 and $599,130 as of
December 31, 2000 and 1999, 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 risk. 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.
DECEMBER 31,
------------------------------------
2000 1999
------------ ------------
Neuberger Berman Guardian Fund (4,836,623 and 3,978,639 units,
respectively) $ 71,775,488 $ 73,604,822
Indexed Stock Fund (6,596,621 and 6,424,626 units, respectively) 243,745,143 261,238,026
American Century Ultra Fund (5,292,897 and 4,010,145 units,
respectively) 171,331,060 183,584,440
Pharmacia Common Stock (5,052,303 and 4,680,178 shares,
respectively)* 308,190,483 210,608,010
Pharmacia Preferred Stock (6,517,533 and 6,692,442 shares,
respectively)* 686,006,172 436,681,847
*Nonparticipant-directed
8
13
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
During 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $291,400,136 as follows:
2000
-------------
Mutual funds $ (78,044,734)
Common Stock 128,181,196
Preferred Stock 264,879,002
Common/collective trust funds (23,615,328)
-------------
$ 291,400,136
=============
4. NONPARTICIPANT-DIRECTED INVESTMENTS
PHARMACIA COMMON STOCK FUND
Effective April 1, 1999, the Pharmacia 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 Pharmacia Common Stock Fund can
only be transferred out of the fund into other investment options after
participants satisfy certain age and service requirements. 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 Pharmacia Common Stock Fund:
2000 1999
------------ ------------
Investments:
Short-term investment funds $ 1,747,268 $ 3,721,116
Pharmacia Common Stock 308,190,483 210,608,010
------------ ------------
Total investments 309,937,751 214,329,126
Receivables:
Dividends and interest receivable 14,993 15,251
Participant contributions 221,197 --
Receivable from other investment funds -- 107,173
Investments sold 1,036,379 --
------------ ------------
Total receivables 1,272,569 122,424
------------ ------------
Liabilities:
Payable to other investment funds 278,076 --
Other liabilities 1,885 8,816
------------ ------------
Total liabilities 279,961 8,816
------------ ------------
Net assets available for plan benefits $310,930,359 $214,442,734
============ ============
9
14
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
YEAR ENDED
DECEMBER 31, 2000
------------
Additions:
Additions to net assets attributed to:
Investment income:
Net appreciation $128,181,196
Interest 168,984
Dividends 3,690,575
------------
Total investment income 132,040,755
Participant contributions (including rollovers) 4,657,347
------------
Total additions 136,698,102
------------
Deductions:
Deductions from net assets attributed to:
Transfers to other investment funds, net 8,475,130
Benefits paid to participants 31,643,700
Plan expenses 91,647
------------
Total deductions 40,210,477
------------
Net increase 96,487,625
Net assets available for plan benefits:
Beginning of year 214,442,734
------------
End of year $310,930,359
============
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 the Company, mature in 2004 and pay interest at an annual rate of 9.79%.
The proceeds of this debt were paid to the Company to liquidate $275
million of an original $300 million loan from the Company to the ESOP. The
remaining principal balance on these notes was $189,700,000 with unpaid
interest of $18,571,630 and $217,700,000 with unpaid interest of
$21,312,830 as of December 31, 2000 and 1999, respectively.
As of March 1, 1990, the ESOP also issued a new note to the Company 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 $48,225,811 and $45,388,998 at December 31, 2000 and
1999, respectively.
10
15
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
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 $20,000,000 with unpaid interest of $4,177,655 and $18,000,000
with unpaid interest of $2,606,843 as of December 31, 2000 and 1999,
respectively.
Projected loan payments on the ESOP debt (net of future New Loans) are as
follows:
YEAR AMOUNT
---------------------------------------------
2001 $ 32,800,000
2002 38,871,645
2003 33,898,058
2004 39,456,269
2005 to 2010 89,674,028
------------------
Total $ 234,700,000
==================
Following are the net assets and significant components of the changes in net
assets relating to the ESOP:
11
16
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
DECEMBER 31,
2000
ALLOCATED UNALLOCATED TOTAL
------------ ------------ ------------
Investments:
Short-term investment funds $ -- $ 13,368,267 $ 13,368,267
Pharmacia Preferred Stock, convertible 306,352,473 379,653,699 686,006,172
------------ ------------ ------------
Total investments 306,352,473 393,021,966 699,374,439
------------ ------------ ------------
Receivables:
Dividends and interest receivable -- 4,372,180 4,372,180
Company contributions, net of forfeitures -- 33,568,691 33,568,691
Other receivables -- 5,348 5,348
------------ ------------ ------------
Total receivables -- 37,946,219 37,946,219
------------ ------------ ------------
Liabilities:
Notes payable -- 234,700,000 234,700,000
Interest payable -- 45,975,096 45,975,096
------------ ------------ ------------
Total liabilities -- 280,675,096 280,675,096
------------ ------------ ------------
Net assets available for plan benefits $306,352,473 $150,293,089 $456,645,562
============ ============ ============
DECEMBER 31,
1999
ALLOCATED UNALLOCATED TOTAL
------------ ------------ ------------
Investments:
Short-term investment funds $ -- $ 13,583,734 $ 13,583,734
Pharmacia Preferred Stock, 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
============ ============ ============
12
17
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
YEAR ENDED DECEMBER 31, 2000
---------------------------------------------------------
ALLOCATED UNALLOCATED TOTAL
------------- ------------- -------------
Additions:
Additions to net assets attributed to:
Investment income:
Net appreciation $ 115,724,628 $ 149,154,374 $ 264,879,002
Interest -- 536,508 536,508
Dividends 6,807,987 9,760,450 16,568,437
------------- ------------- -------------
Total investment income 122,532,615 159,451,332 281,983,947
Company contributions, net of forfeitures -- 34,090,320 34,090,320
Allocation of 382,184 shares of Preferred Stock
for Company matching contributions 33,455,917 -- 33,455,917
------------- ------------- -------------
Total additions 155,988,532 193,541,652 349,530,184
------------- ------------- -------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants (14,798,168) -- (14,798,168)
Interest on notes payable -- (22,979,255) (22,979,255)
Transfers to other investment funds (591,570) -- (591,570)
Allocation of 382,184 shares of Preferred Stock
for Company matching contributions -- (33,455,917) (33,455,917)
------------- ------------- -------------
Total deductions (15,389,738) (56,435,172) (71,824,910)
------------- ------------- -------------
Net increase 140,598,794 137,106,480 277,705,274
Net assets available for plan benefits:
Beginning of year 165,753,679 13,186,609 178,940,288
------------- ------------- -------------
End of year $ 306,352,473 $ 150,293,089 $ 456,645,562
============= ============= =============
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, 2000 and 1999, the Plan
held GICs with a contract value of $30,147,174 and $40,474,517,
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, 2000 and 1999, SIC fair values
were $185,229,622 and $177,738,536, 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 2000 and 1999. 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
18
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
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.
DECEMBER 31,
--------------------------------------
2000 1999
----------------- ------------------
Net assets available for plan benefits per the financial statements $ 1,658,645,290 $ 1,338,369,680
Amounts allocated to withdrawing participants (1,075,946) (1,533,534)
----------------- ------------------
Net assets available for plan benefits per Form 5500 $ 1,657,569,344 $ 1,336,836,146
================= ==================
The following is a reconciliation of benefits paid to participants
according to the financial statements to Form 5500:
YEAR ENDED
DECEMBER 31, 2000
----------------
Benefits paid to participants per the financial statements $ 138,041,527
Add: Amounts allocated to withdrawing participants at December 31, 2000 1,075,946
Less: Amounts allocated to withdrawing participants at December 31, 1999 (1,533,534)
----------------
Benefits paid to participants per Form 5500 $ 137,583,939
================
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 Pharmacia common stock and preferred stock. At
December 31, 2000 and 1999, the Plan owned 5,052,303 and 4,680,178 shares
of Pharmacia Corporation common stock at a cost of $87,782,347 and
$75,850,797, respectively. At December 31, 2000 and 1999, the Plan owned
6,517,533 and 6,692,442 shares of Pharmacia Corporation preferred stock at
a cost of $262,656,580 and $269,705,413, respectively. In addition, Plan
funds are invested in a short-term investment fund as well as SICs issued
by State Street Bank & Trust Company, a trustee of the Plan. At December
31, 2000 and 1999, the fair value of the State Street Bank & Trust Company
short term investment account was $43,355,639 and $40,622,685, respectively
and the contract value of the SICs was $15,232,902 and $22,067,683,
respectively. At December
14
19
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
31, 1999, Plan funds were also invested in short-term investment funds
issued by the Bank of New York, a prior trustee of the Plan, the fair value
of which 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.
15
20
SUPPLEMENTAL SCHEDULES
21
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
EIN# 38-1123360
Plan# 002
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF
(a) IDENTITY OF ISSUE, BORROWER, INTEREST, COLLATERAL, PAR, OR (d) (e)
LESSOR, OR SIMILAR PARTY MATURITY COST CURRENT VALUE
Common Stock:
* Pharmacia Corporation Common stock, $2.00 par value;
5,052,303 shares $ 87,782,347 $ 308,190,483
--------------------- ---------------------
Total common stock $ 87,782,347 $ 308,190,483
--------------------- ---------------------
Preferred stock:
* Pharmacia Corporation
convertible - unallocated Preferred stock, $.01 par value;
3,606,973 shares $ 145,361,012 $ 379,653,699
* Pharmacia Corporation
convertible - allocated Preferred stock, $.01 par value;
2,910,560 shares 117,295,568 306,352,473
--------------------- ---------------------
Total preferred stock $ 262,656,580 $ 686,006,172
--------------------- ---------------------
Mutual Funds:
American Century Ultra Mutual fund: 5,292,897 units $ 173,922,200 $ 171,331,060
American Balanced Mutual fund: 4,068,225 units 59,875,319 62,935,443
Neuberger Berman Guardian Mutual fund: 4,836,623 units 96,837,708 71,775,488
Templeton Foreign Mutual fund: 6,364,381 units 62,632,522 65,807,701
--------------------- ---------------------
Total mutual funds $ 393,267,749 $ 371,849,692
--------------------- ---------------------
Common/Collective Trust Funds:
Barclays Global Investors Common/Collective Trust Fund:
Equity Index Fund 6,596,621 units $ 139,915,433 $ 243,745,143
--------------------- ---------------------
Total Common/Collective Trust Fund $ 139,915,433 $ 243,745,143
--------------------- ---------------------
Short-Term Investment Funds:
* State Street Bank & Trust Co.
Short-Term Investment Fund Money market fund $ 43,355,639 $ 43,355,639
--------------------- ---------------------
Total Short-Term Investment Funds $ 43,355,639 $ 43,355,639
===================== =====================
------------------
* Represents a party-in-interest to the Plan.
17
22
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
EIN# 38-1123360
Plan# 002
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF
(a) IDENTITY OF ISSUE, BORROWER, INTEREST, COLLATERAL, PAR, OR (d) (e)
LESSOR, OR SIMILAR PARTY MATURITY COST CURRENT VALUE
Guaranteed investment contracts - insurance companies:
American Int'l Life ICON
Contract No. GIC-18305 Interest rate: 5.73%
Maturity date: 11/06/2003 $ 7,891,160 $ 7,891,160
John Hancock Mutual Life Ins. Co.
Contract No. GAC-14500 Interest rate: 5.90% 7,792,528 7,792,528
Maturity date: 02/10/2004
New York Life Insurance Co.
Contract No. GA30681 Interest rate: 6.75% 6,329,548 6,329,548
Maturity Date: 04/02/2001
Principal Mutual Life Ins. Co.
Contract No. 4238722 Interest rate: 7.03% 5,083,389 5,083,389
Maturity date: 09/29/2003
Travelers Insurance Co.
Contract No. GR17755 Interest rate: 7.10% 3,050,549 3,050,549
Maturity date: 07/31/2003 --------------------- -------------------
Total Guaranteed Investment Contracts - Contract Value $ 30,147,174 $ 30,147,174
===================== ===================
18
23
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
EIN# 38-1123360
Plan# 002
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF
(a) IDENTITY OF ISSUE, BORROWER, INTEREST, COLLATERAL, PAR, OR (d) (e)
LESSOR, OR SIMILAR PARTY MATURITY COST CURRENT VALUE
Synthetic Investment Contracts**:
AIG Financial Products
(3 contracts)
Contract No. 143308 Wrapper Contract $ 34
GT 1996-4 A4 298,784
---------
Total Contract Value $ 298,818 298,818
Interest rate: 6.68%
Maturity date: 03/15/2001
Contract No. 180162 Wrapper Contract (1,048)
American Express 97-1 (A) 5,056,373
---------
Total Contract Value 5,055,325 5,055,325
Interest rate: 5.95%
Maturity date: 09/16/2002
Contract No. 212753 Wrapper Contract 66,812
First USA 1997-6 (A) FUSAM 7,063,397
---------
Total Contract Value 7,130,209 7,130,209
Interest rate: 5.40%
Maturity date: 07/17/2002
Chase Manhattan Bank
(6 contracts)
Contract No. 400176 Wrapper Contract (8,345)
Sears 96-1 (A) SCAMT 3,129,705
---------
Total Contract Value 3,121,360 3,121,360
Interest rate: 6.99%
Maturity date: 03/15/2002
Contract No. 400180 Wrapper Contract (80,184)
FH R 1697 PH 7,516,350
---------
Total Contract Value 7,436,166 7,436,166
Interest rate: 7.10%
Maturity date: 02/18/2003
------------------
** 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
24
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
EIN# 38-1123360
Plan# 002
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF
(a) IDENTITY OF ISSUE, BORROWER, INTEREST, COLLATERAL, PAR, OR (d) (e)
LESSOR, OR SIMILAR PARTY MATURITY COST CURRENT VALUE
Contract No. 401271 Wrapper Contract 3,225
CITIBANK CC TRST 98-1 A
CCIMT 5,130,970
--------------------
Total Contract Value 5,134,195 5,134,195
Interest rate: 4.89%
Maturity date: 01/15/2001
Contract No. 401079 Wrapper Contract 10,904
Autonation 00-A (A3) ANRC
MBIA 5,101,626
--------------------
Total Contract Value 5,112,530 5,112,530
Interest rate: 5.91%
Maturity date: 01/15/2003
Contract No. 401080 Wrapper Contract 5,230
FH 1615 G 5.5% 12/07 CMO
PAC-1 4,569,290
--------------------
Total Contract Value 4,574,520 4,574,520
Interest rate: 6.01%
Maturity date: 01/15/2003
Contract No. 434193 Wrapper Contract (241,798)
FEDHMLN: 6.875% 1/15/05 5,361,607
--------------------
Total Contract Value 5,119,809 5,119,809
Interest rate: 7.13%
Maturity date: 01/17/2005
Deutsche Bank AG (2 contracts)
Contract No. FID-PUP-2 Wrapper Contract
Fannie Mae 5.125% 2/13/04 (85,586)
--------------------
Total Contract Value 6,026,167
Interest rate: 6.18% 5,940,581 5,940,581
Maturity date: 02/13/2004
Contract No. FID-PUP-1 Wrapper Contract 128,931
FN93 225-TH 6% 6/23 PAC-I 7,004,340
--------------------
Total Contract Value 7,133,271 7,133,271
Interest rate: 5.55%
Maturity date: 06/25/2007
20
25
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
EIN# 38-1123360
Plan# 002
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF
IDENTITY OF ISSUE, BORROWER, INTEREST, COLLATERAL, PAR, OR (d) (e)
(a) LESSOR, OR SIMILAR PARTY MATURITY COST CURRENT VALUE
Monumental Life Ins. Co ABS
Insurance Co. (8 contracts)
Contract No. BDA00379TR-02 Wrapper Contract 11,362
Premier Auto Trust 1998-1 A4 4,108,270
--------------------
Total Contract Value 4,119,632 4,119,632
Interest rate: 5.70%
Maturity date: 04/08/2002
Contract No. BDA00379TR-04 Wrapper Contract 34,712
Chase Manhattan Auto Trust
1998-B 4,402,762
--------------------
Total Contract Value 4,437,474 4,437,474
Interest rate: 5.25%
Maturity date: 09/16/2002
Contract No. BDA00379TR-05 Wrapper Contract 76,930
Gen. Elec. Mtn. 5.35% 11/18/02 5,037,414
--------------------
Total Contract Value 5,114,344 5,114,344
Interest rate: 4.93%
Maturity date: 11/18/2002
Contract No. BDA00379TR-07 Wrapper Contract 52,707
DISCOVER 1999-1 (A) DCMT 7,078,905
--------------------
Total Contract Value 7,131,612 7,131,612
Interest rate: 5.33%
Maturity date: 02/15/2002
Contract No. BDA00379TR-09 Wrapper Contract 35,575
FN 94-30H 6.25% 11/22 CMO PACI 5,038,542
--------------------
Total Contract Value 5,074,117 5,074,117
Interest rate: 5.94%
Maturity date: 04/25/2007
Contract No. BDA00379TR-14 Wrapper Contract
DCAT00-D A3 6.66% 1 05 (68,482)
4,072,020
--------------------
Total Contract Value 4,003,538 4,003,538
Interest rate: 6.79%
Maturity date: 09/08/2003
21
26
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
EIN# 38-1123360
Plan# 002
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF
IDENTITY OF ISSUE, BORROWER, INTEREST, COLLATERAL, PAR, OR (d) (e)
(a) LESSOR, OR SIMILAR PARTY MATURITY COST CURRENT VALUE
Contract No. BDA00379TR-13 Wrapper Contract (197,601)
FNR 98-36 PM 6.25% 5,076,042
--------------------
Total Contract Value 4,878,441 4,878,441
Interest rate: 7.19%
Maturity date: 10/18/2006
Contract No. BDA00379TR-11 Wrapper Contract (254,911)
FEDHMLN 7% 2/15/2003 10,537,844
--------------------
Total Contract Value 10,282,933 10,282,933
Interest rate: 6.95%
Maturity date: 02/18/2003
Morgan Guaranty (3 contracts) Wrapper Contract (59,371)
Contract No. Upjohn2A MBNA 97-F (A) MBNAM 6,075,680
--------------------
Total Contract Value 6,016,309 6,016,309
Interest rate: 6.69%
Maturity date: 06/17/2002
Contract No. Upjohn04 Wrapper Contract 9,203
Newcourt 1998-1 (A3) NETS 2,347,528
--------------------
Total Contract Value 2,356,731 2,356,731
Interest rate: 5.29%
Maturity date: 12/20/2001
Contract No. Upjohn05A Wrapper Contract
CSFB 00-C1 A1 7.235% (120,011)
5,126,848
--------------------
Total Contract Value 5,006,837 5,006,837
Interest rate: 7.05%
Maturity date: 07/15/2008
Rabobank Nederland (3 contracts) Wrapper Contract 41,690
Contract No. UPJ109801 FH R1630 PG 5.75 4/20 PAC-I 4,706,954
--------------------
Total Contract Value 4,748,644 4,748,644
Interest rate: 5.15%
Maturity date: 11/15/2002
Contract No. UPJ110001 Wrapper Contract (31,290)
CARAT (GM) 2000-2 (A4)
CARAT 4,043,452
-------------------
Total Contract Value 4,012,162 4,012,162
Interest rate: 6.58%
Maturity date: 12/16/2002
22
27
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
EIN# 38-1123360
Plan# 002
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF
IDENTITY OF ISSUE, BORROWER, INTEREST, COLLATERAL, PAR, OR (d) (e)
(a) LESSOR, OR SIMILAR PARTY MATURITY COST CURRENT VALUE
Contract No. UPJ050001 Wrapper Contract (257,971)
USTN 5.75% 4/30/03 7,163,016
--------------------
Total Contract Value 6,905,045 6,905,045
Interest rate: 6.89%
Maturity date: 04/30/2003
* State Street Bank & Trust Co. Wrapper Contract 6,335
(4 contracts) FNR 1993-41 PG 2,898,165
--------------------
Contract No. 98114 Total Contract Value 2,904,500 2,904,500
Interest rate: 5.88%
Maturity date: 06/25/2002
Contract No. 98006 Wrapper Contract 10,971
FHR 1564 G 3,341,987
--------------------
Total Contract Value 3,352,958 3,352,958
Interest rate: 5.82%
Maturity date: 02/18/2003
Contract No. 98054 Wrapper Contract 8,700
FHR 1618 G 3,946,820
--------------------
Total Contract Value 3,955,520 3,955,520
Interest rate: 5.87%
Maturity date: 06/15/2003
Contract No. 98115 Wrapper Contract 12,968
FHR 1606 G 5,006,956
--------------------
Total Contract Value 5,019,924 5,019,924
Interest rate: 5.84%
Maturity date: 10/15/2002
UBS AG
(5 contracts)
Contract No. 2315 Wrapper Contract (10,475)
AMCAR 1997-D A3 3,414,769
-------------------
Total Contract Value 3,404,294 3,404,294
Interest rate: 6.73%
Maturity date: 10/07/2002
23
------------------
* Represents a party-in-interest to the Plan.
28
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
EIN# 38-1123360
Plan# 002
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF
IDENTITY OF ISSUE, BORROWER, INTEREST, COLLATERAL, PAR, OR (d) (e)
(a) LESSOR, OR SIMILAR PARTY MATURITY COST CURRENT VALUE
Contract No. 2316 Wrapper Contract (55,231)
Dayton Hudson 97-1 (A) DHMT 5,540,104
--------------------
Total Contract Value 5,484,873 5,484,873
Interest rate: 6.55%
Maturity date: 10/25/2002
Contract No. 2472 Wrapper Contract 5,975
FNR 1994-85 E 1,776,263
--------------------
Total Contract Value 1,782,238 1,782,238
Interest rate: 5.46%
Maturity date: 12/26/2001
Contract No. 2605 Wrapper Contract 37,743
HFCMC 99-PHI (A1) 6.5% 4,562,674
--------------------
Total Contract Value 4,600,417 4,600,417
Interest rate: 5.99%
Maturity date: 02/15/2008
Contract No. 2718 Wrapper Contract (70,705)
FHLMC GLBL 6.250% 10/15/02 5,120,673
--------------------
Total Contract Value 5,049,968 5,049,968
Interest rate: 6.47%
Maturity date: 10/15/2002
West Deutsche Landesbank Wrapper Contract 33,267
(4 contracts) CMAC 98-C2 A1 5.8% 3/06 4,249,792
--------------------
Contract No. WLB6113 Total Contract Value 4,283,059 4,283,059
Interest rate: 5.86%
Maturity date: 07/15/2005
Contract No. WLB6146 Wrapper Contract (79,979)
PP&L 1999-1 (A4) PPL 5,011,521 5,091,500
--------------------
Total Contract Value 5,011,521
Interest rate: 6.76%
Maturity date: 12/26/2003
Contract No. WLB6205 Wrapper Contract (43,472)
PNC Student Ln 97-2 (A5)
PNCSL 4,066,687
--------------------
Total Contract Value 4,023,215 4,023,215
Interest rate: 7.21%
Maturity date: 07/25/2002
24
29
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000
EIN# 38-1123360
Plan# 002
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE, RATE OF
(a) IDENTITY OF ISSUE, BORROWER, INTEREST, COLLATERAL, PAR, OR (d) (e)
LESSOR, OR SIMILAR PARTY MATURITY COST CURRENT VALUE
Contract No. WLB6202 Wrapper Contract (137,350)
FHR 1243 P 7.2% 4/07 PAC-I 5,139,349
--------------
Total Contract Value 5,001,999 5,001,999
-------------- --------------
Interest rate: 7.46%
Maturity date: 06/15/2006
Total Synthetic Investment Contracts - Contract Value $ 184,019,089 $ 184,019,089
-------------- --------------
Total Investment Contracts $ 214,166,263 $ 214,166,263
-------------- --------------
Participant loans:
Participant loans Interest rate: 7% - 10.5% $ - $ 30,157,358
-------------- --------------
Total Investments $1,141,144,011 $1,897,470,750
============== ==============
25
30
THE PHARMACIA & UPJOHN EMPLOYEE SAVINGS PLAN
Schedule of Reportable Transactions
For the Year Ended December 31, 2000
(a) (b)
IDENTIFY OF DESCRIPTION OF NUMBER OF (c) (d) (e)
PARTY INVOLVED ASSET TRANSACTIONS PURCHASE PRICE SELLING PRICE LEASE RENTAL
-------------- ----- ------------ -------------- ------------- ------------
* Pharmacia Pharmacia 20 22,507,086 - -
Corporation Corporation 110 - 48,476,491 -
Common Stock
* State Street Short-Term 209 108,124,262 - -
Bank & Trust Investment Fund 315 - 110,313,575 -
Company
(f) (h)
EXPENSE CURRENT VALUE OF (i)
INCURRED WITH (g) ASSET ON NET GAIN OR
TRANSACTION COST OF ASSET TRANSACTION DATE (LOSS)
----------- ------------- ---------------- ------
- 22,507,086 22,507,086 -
- 13,472,384 48,476,491 35,004,107
- 108,124,262 108,124,262 -
- 110,313,575 110,313,575 -
------------------
* Represents a party-in-interest to the Plan.
26
31
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 June 13, 2001 relating to the financial statements of the Pharmacia &
Upjohn Employee Savings Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 29, 2001