=====================================================================
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)
=====================================================================
<PAGE>
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 -
<PAGE>
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 -
<PAGE>
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 -
<PAGE>
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 -
<PAGE>
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
<PAGE>
<TABLE>
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
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
- 7 -
<PAGE>
<TABLE>
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
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
- 8 -
<PAGE>
<TABLE>
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
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
- 9 -
<PAGE>
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 -
<PAGE>
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 -
<PAGE>
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 -
<PAGE>
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 -
<PAGE>
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 $139,518,120
N/A Bankers Trust (Delaware)
Contract 5.68% Due 9/15/95 10,810,443 10,810,443
N/A Metropolitan Life Insurance
GAC 7.95% Due 7/15/95 20,590,352 20,590,352
GAC 7.56% Due 1/15/95 17,250,874 17,250,874
GAC 3.71% Due 1/15/95 20,154,765 20,154,765
GAC 4.36% Due 9/15/96 5,062,354 5,062,354
N/A New York Life Insurance
GAC 7.75% Due 1/15/94 13,746,737 13,746,737
GAC 8.75% Due 3/15/94 46,486,696 46,486,696
GAC 3.60% Due 7/15/94 17,275,652 17,275,652
GAC 5.60% Due 7/15/97 27,212,677 27,212,677
N/A Ohio National Life Insurance
GAC 9.59% Due 3/15/94 1,580,115 1,580,115
N/A John Hancock Mutual Life Insurance
GAC 6.09% Due 9/15/95 20,340,042 20,340,042
GAC 4.63% Due 9/15/96 13,172,001 13,172,001
GAC 6.94% Due 7/15/97 22,046,676 22,046,676
GAC 6.0% Due 7/15/97 13,740,446 13,740,446
N/A Prudential Insurance
GIC 8.44% Due 7/15/94 15,523,131 15,523,131
GIC 5.50% Due 9/15/96 26,788,054 26,788,054
2,805,898 Fidelity Balanced Fund 37,299,603 37,570,982
1,408,028 Fidelity U.S. Equity
Portfolio 23,297,637 24,316,654
N/A Loans to Plan Participants
Rates ranging from 7.25%
to 11.5%. Due through
2014. 22,667,682 22,667,682
The accompanying notes to financial statements are an integral part of this
schedule.
- 14 -
<PAGE>
<TABLE>
American Home Products Corporation Savings Plan
Item 27d - Schedule of Reportable Transactions
Combined Funds (A)
Employer Identification Number - 13-252-6821
Plan Number - 045
Market
Purchase Selling Cost of Value of Net Gain
Description Price Price Asset Asset or Loss
<C> <C> <C> <C> <C> <C>
American Home Products Corp.$ 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.
</TABLE>
- 15 -
<PAGE>
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
