-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, liWQrpqf6QlvInC4b2CayBeAveJ+DNYODD/oXPeGaT/ENuHVPJxBL7+kN/6JPzF2 6MzjJkfD1oLXLqwuaO7ZVg== 0000005187-94-000013.txt : 19940711 0000005187-94-000013.hdr.sgml : 19940711 ACCESSION NUMBER: 0000005187-94-000013 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN HOME PRODUCTS CORP CENTRAL INDEX KEY: 0000005187 STANDARD INDUSTRIAL CLASSIFICATION: 2834 IRS NUMBER: 132526821 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01225 FILM NUMBER: 94536911 BUSINESS ADDRESS: STREET 1: 5 GIRALDA FARMS CITY: MADISON STATE: NJ ZIP: 07940 BUSINESS PHONE: 201-660-5000 11-K 1 FORM 11-K US SAVINGS PLAN ===================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15 (d) of the Securities Exchange Act of 1934 for the year ended December 31, 1993 AMERICAN HOME PRODUCTS CORPORATION SAVINGS PLAN (Full title of the Plan) AMERICAN HOME PRODUCTS CORPORATION (Name of Issuer of the securities held pursuant to the Plan) Five Giralda Farms Madison, New Jersey 07940 (Address of principal executive office) ===================================================================== SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN HOME PRODUCTS CORPORATION By: John R. Considine Vice President - Finance Date June 23, 1994 - 2 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the American Home Products Corporation Savings Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN HOME PRODUCTS CORPORATION SAVINGS PLAN By: Thomas M. Nee Chairman of the American Home Products Corporation Savings Plan Committee Date: June 23, 1994 - 3 - AMERICAN HOME PRODUCTS CORPORATION SAVINGS PLAN FINANCIAL STATEMENTS AS OF DECEMBER 31, 1993 AND 1992 TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS EMPLOYER IDENTIFICATION NUMBER - 13-2526821 PLAN NUMBER - 045 - 4 - AMERICAN HOME PRODUCTS CORPORATION SAVINGS PLAN DECEMBER 31, 1993 AND 1992 INDEX PAGE Report of Independent Public Accountants 6 Statement of Net Assets Available for Plan Benefits as of December 31, 1993 7 Statement of Net Assets Available for Plan Benefits as of December 31, 1992 8 Statement of Changes in Net Assets Available for Plan Benefits for the Year Ended December 31, 1993 9 Notes to Financial Statements as of December 31, 1993 and 1992 10 - 13 Item 27a - Schedule of Assets Held for Investment Purposes - Combined Funds as of December 31, 1993 14 Item 27d - Schedule of Reportable Transactions - Combined Funds for the year ended December 31, 1993 15 Consent of Independent Public Accountants 16 - 5 - REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Participants and Savings Plan Committee of the American Home Products Corporation Savings Plan: We have audited the accompanying statements of net assets available for plan benefits of the American Home Products Corporation Savings Plan as of December 31, 1993 and 1992, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 1993. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules 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 American Home Products Corporation Savings Plan as of December 31, 1993 and 1992, and the changes in net assets available for plan benefits for the year ended December 31, 1993, in conformity with generally accepted accounting principles. Our audit was made 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 and reportable transactions are presented for purposes 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 supplemental schedules have been subjected to the auditing procedures applied in the audit 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. ARTHUR ANDERSEN & CO. New York, New York June 23, 1994 American Home Products Corporation Savings Plan Statement of Net Assets Available for Plan Benefits December 31, 1993 Fidelity Interest AHPC Common Fidelity U.S. Equity Income Fund Stock Fund Balanced Fund Portfolio Loan Fund Total Funds Plan Assets Cash and Cash Equivalents $2,690,635 $952,113 $ 0 $ 0 $ 0 $3,642,748 Investments at Market Value 0 139,518,120 37,570,982 24,316,654 0 201,405,756 Group Annuity and Other Investment Contracts, at Contract Value 291,781,015 0 0 0 0 291,781,015 Receivable from AHPC 1,875,601 1,069,963 509,336 449,660 0 3,904,560 Loans to Plan Participants 0 0 0 0 22,667,682 22,667,682 Net Assets Available for Plan Benefits $296,347,251 $141,540,196 $38,080,318 $24,766,314 $22,667,682 $523,401,761 The accompanying notes to financial statements are an integral part of this statement.
- 7 - American Home Products Corporation Savings Plan Statement of Net Assets Available for Plan Benefits December 31, 1992 Fidelity Interest AHPC Common Fidelity U.S. Equity Income Fund Stock Fund Balanced Fund Portfolio Loan Fund Total Funds Plan Assets Cash and Cash Equivalents $ 867,397 $1,153,226 $ 0 $ 0 $ 0 $ 2,020,623 Investments at Market Value 0 134,040,481 9,103,559 10,009,869 0 153,153,909 Group Annuity and Other Investment Contracts, at Contract Value 272,071,910 0 0 0 0 272,071,910 Receivable from AHPC 1,756,442 1,187,768 191,851 232,127 0 3,368,188 Loans to Plan Participants 0 0 0 0 18,196,341 18,196,341 Net Assets Available for Plan Benefits $274,695,749 $136,381,475 $9,295,410 $10,241,996 $18,196,341 $448,810,971 The accompanying notes to financial statements are an integral part of this statement.
- 8 - American Home Products Corporation Savings Plan Statement of Changes in Net Assets Available for Plan Benefits For the Year Ended December 31, 1993 Fidelity Interest AHPC Common Fidelity U.S. Equity Income Fund Stock Fund Balanced Fund Portfolio Loan Fund Total Funds Additions: Participant Contributions $25,891,189 $15,499,427 $5,815,269 $5,946,800 $ 0 $53,152,685 Employer Contributions 8,362,482 7,488,937 1,552,471 1,686,261 0 19,090,151 Cash Dividend Income on Investments 0 5,998,882 2,413,174 778,532 0 9,190,588 Interest on Group Annuity and Other Investment Contracts and Cash Equivalents 18,867,274 46,776 0 0 0 18,914,050 Realized/Unrealized Gains (Losses) on Investments 0 (4,934,492) 576,553 821,886 0 (3,536,053) Total Additions 53,120,945 24,099,530 10,357,467 9,233,479 0 96,811,421 Deductions: Withdrawals (15,273,926) (5,796,434) (1,700,286) (813,745) 0 (23,584,391) Transfer (to) from Other Funds (13,738,436) (12,404,823) 20,039,091 6,104,168 0 0 Loans Originated (7,993,521) (3,511,545) (419,467) (574,957) 12,499,490 0 Loan Repayments 5,536,440 2,771,993 508,103 575,373 (8,028,149) 1,363,760 Total Deductions (31,469,443) (18,940,809) 18,427,441 5,290,839 4,471,341 (22,220,631) Net Additions 21,651,502 5,158,721 28,784,908 14,524,318 4,471,341 74,590,790 Net Assets Available for Plan Benefits: Beginning of the year 274,695,749 136,381,475 9,295,410 10,241,996 18,196,341 448,810,971 End of the year $296,347,251 $141,540,196 $38,080,318 $24,766,314 $22,667,682 $523,401,761 The accompanying notes to financial statements are an integral part of this statement.
- 9 - AMERICAN HOME PRODUCTS CORPORATION SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 1993 AND 1992 NOTE 1 - PLAN DESCRIPTION The following description of the American Home Products Corporation Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. A. General The Plan, a defined contribution profit-sharing plan, was approved and adopted by the Board of Directors of American Home Products Corporation ("AHPC" or the "Company") on February 28, 1985 and became effective on April 1, 1985. Full or part-time (U.S. paid) employees of the Company and its participating subsidiaries who are not subject to a collective bargaining agreement are eligible to participate in the Plan after age 21. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Code (the "Code"). B. Contributions A participant may elect to make contributions to the Plan in whole percentages up to a maximum of 16% of the participant's compensation, as defined in the Plan. Contributions can be made on a before-tax basis ("salary deferral contributions"), an after-tax basis ("after-tax contributions"), or a combination of both. AHPC will contribute in cash to each participant's account an amount equal to 50% of the participant's contributions to the Plan, for contributions up to 6% of the participant's compensation. Under the Code, salary deferral contributions, total annual contributions, and the amount of compensation that can be included for Plan purposes are subject to annual limitations. C. Vesting and Separation From Service A participant is fully vested at all times in amounts in salary deferral and after-tax accounts. A participant is also fully vested in Company matching contributions if the participant has at least five years of continuous service, as defined by the Plan. If a participant has less than five years of continuous service, such participant becomes vested in their matching contributions account according to the following vesting schedule: Vesting Years of Continuous Service Percentage 1 year completed 0% 2 years completed 25% 3 years completed 50% 4 years completed 75% - 10 - Regardless of the number of years of continuous service, a participant shall be fully vested and receive funds attributable to their matching contribution account upon reaching their 65th birthday or upon death, if earlier. In the event a participant's employment with AHPC is terminated prior to full vesting, they shall receive the vested portion. The non-vested portion of such account is forfeited and becomes available to AHPC to satisfy future Company matching contributions. D. Withdrawals A participant is entitled to withdraw all or any portion of their account attributable to after-tax contributions. A participant may make full or partial withdrawals of funds in any of their accounts on attaining age 59 1/2 or for financial hardship before that age. Participants may qualify for financial hardship withdrawals if they have an immediate and heavy financial need, as defined in the Plan, and have no other funds readily available to meet that need. Participants are limited to one hardship and one non-hardship (e.g. after age 59 1/2 or from the participant's after-tax contribution account) withdrawal each year. A participant cannot make a hardship withdrawal of the earnings on their before-tax account balances which are credited on or after January 1, 1989. E. Loans An employee who has participated in the Plan for at least one year and has a vested account balance of at least $2,000 may borrow from the vested portion of their account, subject to certain maximum amounts. An employee may have outstanding up to two general purpose loans and one loan to acquire or construct a principal residence. All loans must be repaid within 5 years except for those used to acquire or construct a principal residence. F. Amendments to the Plan There were two amendments to the Plan during 1993, regarding the eligibility requirements of employees and the addition of Intelligent Medical Systems, Inc. (acquired by the Company in 1992) employees to the Plan. The effect of these amendments on the net assets available for plan benefits was not material. NOTE 2 - ACCOUNTING POLICIES Investment Valuation AHPC's common stock is recorded at fair market value at December 31. Units of participation in the Fidelity Balanced Fund and the Fidelity U.S. Equity Index Portfolio are recorded at their published net asset value at December 31. The group annuity and other contracts comprising the Interest Income Fund are recorded at contract value (cost plus accrued interest) based upon information supplied by the Trustee, which approximates fair value. - 11 - Administrative Costs All costs and expenses of administering the Plan are paid by AHPC. Loan Fund Defaults on participants' loans during the year are treated as withdrawals and are fully taxable to participants. Receivable from American Home Products Corporation The receivable from AHPC at December 31, 1993 and 1992 represents contributions and loan repayments withheld from employees but not remitted to Fidelity until January 1994 and 1993, respectively. NOTE 3 - INVESTMENTS A participant can elect to have amounts credited to their account invested in any of four investment funds. Elections must be made in multiples of 25% in such a way that the combination of share percentages totals 100%. A participant may transfer all, or any part, of the value of their account invested in any of the investment funds to another fund in multiples of 25% or in an amount of at least $250. The four investment options are: A. AHPC Common Stock Fund - consists primarily of AHPC common stock. Purchases and sales of AHPC common stock are made in the open market. Participants have full voting rights for shares purchased at their direction under the Plan. B. Interest Income Fund - consists primarily of group annuity contracts issued by major life insurance companies and other contracts which pay a specified rate of interest for a fixed period of time and repay principal at maturity. The fund and its contracts are not guaranteed by the Company or any other institution. However, the AHPC Savings Plan Committee (the "Committee") has established guidelines that provide that contracts be placed with companies rated AA or higher by Moody's and Standard & Poors. The interest rate payable to Plan participants in this fund will be a rate which reflects a blend of the total investments made by the fund. The overall annual return in the Fund was approximately 6.9% for 1993 and 7.5% for 1992. C. Fidelity Balanced Fund - consists of units invested in a mutual fund managed by Fidelity Management & Research Company which is invested in high yielding securities, including common stocks, preferred stocks and bonds with at least 25% of the Fund's assets in fixed income senior securities. D. Fidelity U.S. Equity Portfolio - consists of units invested in a mutual fund managed by Fidelity Management & Research Company that seeks to provide investment results that correspond to the total return performance of the companies that make up the Standard & Poor's 500 Index. - 12 - NOTE 4 - MANAGEMENT OF THE PLAN The Plan is administered by the Committee, which is appointed by the Board of Directors of AHPC. Effective April 1, 1992, Fidelity Management Trust Company was appointed by the Committee as Trustee and record keeper. NOTE 5 - FEDERAL INCOME TAX STATUS The Plan is designed to be a qualified profit-sharing plan under the provisions of Section 401(a) of the Code and the trust established under the Plan is intended to be exempt from federal income tax under the provisions of Section 501(a) of the Code. Therefore, no tax provision is recorded by the Plan. The Plan incorporates a "cash or deferred" arrangement on a salary deferral basis which is intended to satisfy additional qualification requirements under Section 401(k) of the Code. The Plan obtained its latest determination letter on April 19, 1990, which the Internal Revenue Service stated that the Plan, as then designed, met the applicable requirements of the Code. The Plan has been amended since receiving this determination letter. However, the Plan administrator and the Plan's counsel believe that the Plan continues to be designed and operated in compliance with the applicable requirements of the Code. Therefore, they believe that the Plan continues to be qualified and the related trust tax exempt as of December 31, 1993. NOTE 6 - PLAN TERMINATION Although it has not expressed any intention 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 will become 100% vested in their accounts. - 13 - American Home Products Corporation Savings Plan Combined Funds Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1993 Employer Identification Number - 13-2526821 Plan Number - 045 Number of Shares or Par Value Description Cost Market Value 2,154,720 American Home Products Corp. Common Stock $157,422,270 $139,518,120 N/A Bankers Trust (Delaware) Contract 5.68% Due 9/15/95 10,810,443 10,810,443 N/A Metropolitan Life Insurance GAC 7.95% Due 7/15/95 20,590,352 20,590,352 GAC 7.56% Due 1/15/95 17,250,874 17,250,874 GAC 3.71% Due 1/15/95 20,154,765 20,154,765 GAC 4.36% Due 9/15/96 5,062,354 5,062,354 N/A New York Life Insurance GAC 7.75% Due 1/15/94 13,746,737 13,746,737 GAC 8.75% Due 3/15/94 46,486,696 46,486,696 GAC 3.60% Due 7/15/94 17,275,652 17,275,652 GAC 5.60% Due 7/15/97 27,212,677 27,212,677 N/A Ohio National Life Insurance GAC 9.59% Due 3/15/94 1,580,115 1,580,115 N/A John Hancock Mutual Life Insurance GAC 6.09% Due 9/15/95 20,340,042 20,340,042 GAC 4.63% Due 9/15/96 13,172,001 13,172,001 GAC 6.94% Due 7/15/97 22,046,676 22,046,676 GAC 6.0% Due 7/15/97 13,740,446 13,740,446 N/A Prudential Insurance GIC 8.44% Due 7/15/94 15,523,131 15,523,131 GIC 5.50% Due 9/15/96 26,788,054 26,788,054 2,805,898 Fidelity Balanced Fund 37,299,603 37,570,982 1,408,028 Fidelity U.S. Equity Portfolio 23,297,637 24,316,654 N/A Loans to Plan Participants Rates ranging from 7.25% to 11.5%. Due through 2014. 22,667,682 22,667,682 The accompanying notes to financial statements are an integral part of this schedule. - 14 - American Home Products Corporation Savings Plan Item 27d - Schedule of Reportable Transactions Combined Funds (A) Employer Identification Number - 13-252-6821 Plan Number - 045 Market Purchase Selling Cost of Value of Net Gain Description Price Price Asset Asset or Loss American Home Products Corp.$ 32,803,512 $ - $ 32,803,512 $ 32,803,512 $ - Common Stock - 28,672,849 25,484,062 28,672,849 3,188,787 John Hancock Mutual Life Insurance 2 Purchases GAC 6.09% Due 9/15/95 13,000,000 - 13,000,000 13,000,000 - GAC 4.63% Due 9/15/96 13,000,000 - 13,000,000 13,000,000 - 21 Sales GAC 6.09% Due 9/15/95 - 15,318,872 15,318,872 15,318,872 - Fidelity U.S. Government Reserve Pool 186 Purchases 144,973,208 - 144,973,208 144,973,208 - 236 Sales - 143,214,822 143,214,822 143,214,822 - Fidelity Balanced Fund 33,912,302 - 33,912,302 33,912,302 - - 6,021,432 5,876,455 6,021,432 144,977 Metropolitan Life Insurance 11 Purchases GAC 4.36% Due 9/15/96 5,000,000 - 5,000,000 5,000,000 - GAC 3.71% Due 1/15/95 23,500,000 - 23,500,000 23,500,000 - 21 Sales GAC 9.00% Due 1/15/93 - 13,370,123 13,370,123 13,370,123 - GAC 7.95% Due 7/15/95 - 15,209,275 15,209,275 15,209,275 - GAC 7.56% Due 1/15/95 - 12,572,679 12,572,679 12,572,679 - GAC 3.71% Due 1/15/95 - 3,610,448 3,610,448 3,610,448 - Prudential Insurance 1 Purchase GIC 5.50% Due 9/15/96 1,842,921 - 1,842,921 1,842,921 - 21 Sales GIC 8.44% Due 7/15/94 - 20,456,571 20,456,571 20,456,571 - New York Life Insurance 14 Purchases GAC 3.60% Due 7/15/94 17,000,000 - 17,000,000 17,000,000 - GAC 5.60% Due 7/15/97 27,200,000 - 27,200,000 27,200,000 - 22 Sales GAC 7.75% Due 1/15/94 - 2,257,239 2,257,239 2,257,239 - GAC 8.75% Due 3/15/94 - 7,594,652 7,594,652 7,594,652 - GAC 5.60% Due 7/15/97 - 1,200,000 1,200,000 1,200,000 - Fidelity Equity Portfolio 17,969,471 - 17,969,471 17,969,471 - - 4,484,573 4,336,285 4,484,573 148,288 (A) Reportable transactions include transactions in excess of 5% of total Plan assets as of the beginning of the Plan year. The accompanying notes to financial statements are an integral part of this schedule.
- 15 - CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K into the American Home Products Corporation previously filed Form S-3 Registration Statement No. 33-45324 and Form S-8 Registration Statements No. 2-96127, 33-14458, 33-45970, 33-50149, 33-24068, 33-41434 and 33-55456. ARTHUR ANDERSEN & CO. New York, New York June 27, 1994 -----END PRIVACY-ENHANCED MESSAGE-----