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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 - PUERTO RICO
(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)
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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
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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 - PUERTO RICO
By:
Thomas M. Nee
Chairman of the American Home
Products Corporation Savings
Plan Committee
Date: June 23, 1994
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AMERICAN HOME PRODUCTS CORPORATION
SAVINGS PLAN - PUERTO RICO
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1993
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
EMPLOYER IDENTIFICATION NUMBER - 13-2526821
PLAN NUMBER - 060
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AMERICAN HOME PRODUCTS CORPORATION
SAVINGS PLAN - PUERTO RICO
DECEMBER 31, 1993
INDEX
PAGE
Report of Independent Public Accountants 6
Statement of Net Assets Available for
Plan Benefits as of December 31, 1993 7
Statement of Changes in Net Assets Available
for Plan Benefits for the Year Ended
December 31, 1993 8
Notes to Financial Statements as of
December 31, 1993 9 - 12
Item 27a - Schedule of Assets Held for
Investment Purposes - Combined Funds as of
December 31, 1993 13
Item 27d - Schedule of Reportable Transactions -
Combined Funds for the year ended December 31, 1993 14
Consent of Independent Public Accountants 15
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Participants and Savings Plan Committee of the American Home
Products Corporation Savings Plan - Puerto Rico:
We have audited the accompanying statement of net assets available for
plan benefits of the American Home Products Corporation Savings Plan -
Puerto Rico as of December 31, 1993, 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 audit 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 audit provides 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 - Puerto
Rico as of December 31, 1993, 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
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<TABLE>
American Home Products Corporation Savings Plan - Puerto Rico
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 Total Funds
<S> <C> <C> <C> <C> <C>
Plan Assets
Cash and Cash Equivalents - $ 589 - - $ 589
Investments at Market Value - 703,768 $465,313 $519,102 1,688,183
Group Annuity Contract, at
contract value $629,769 - - - 629,769
Receivable from American Home
Products Corporation 45,537 40,809 30,560 42,102 159,008
Other Receivables 4,244 - - 542 4,786
Net Assets Available for Plan Benefits $679,550 $745,166 $495,873 $561,746 $2,482,335
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
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<TABLE>
American Home Products Corporation Savings Plan - Puerto Rico
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 Total Funds
<S> <C> <C> <C> <C> <C>
Participant Contributions $ 495,183 $ 470,062 $ 363,973 $ 385,044 $1,714,262
Employer Contributions 173,836 265,852 120,858 162,629 723,175
Total contributions 669,019 735,914 484,831 547,673 2,437,437
Cash Dividends on Investments - 13,031 25,174 12,001 50,206
Interest on Group Annuity Contracts
and Cash Equivalents 15,802 569 3 65 16,439
Total investment income 15,802 13,600 25,177 12,066 66,645
Realized/Unrealized Gains (Losses) - 3,719 (6,012) 7,819 5,526
Withdrawals (5,271) (8,067) (8,123) (5,812) (27,273)
Net Increase in Net Assets 679,550 745,166 495,873 561,746 2,482,335
Net Assets Available for Plan Benefits
- January 1, 1993 - - - - -
Net Assets Available for Plan Benefits
- December 31, 1993 $679,550 $745,166 $495,873 $561,746 $2,482,335
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
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AMERICAN HOME PRODUCTS CORPORATION
SAVINGS PLAN - PUERTO RICO
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1993
NOTE 1 - PLAN DESCRIPTION
The following description of the American Home Products Corporation
Savings Plan - Puerto Rico (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 November 19, 1992 and became
effective on January 1, 1993. Full or part-time employees of the
Company and its participating subsidiaries who reside in Puerto Rico
and are not a member of a recognized collective bargaining unit are
eligible to participate in the Plan after attaining age 21 and
completing one year of continuous service in which they have completed
at least 1,000 hours of service with the Company for which they work.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA") and the Internal Revenue 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. Salary deferral
contributions are subject to an annual limitation of the lessor of 10%
of compensation or $7,000. AHPC will contribute in cash to each
participant's account an amount equal to 50% of the first 6% of the
participant contributions to the Plan.
C. Vesting and Separation From Service
A participant is fully vested at all times in amounts in salary
deferral and after-tax contribution 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%
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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 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.
E. Loans
The ability of participants to borrow funds from the plan has been
suspended pending further clarification of Puerto Rican Tax Act No. 17
from the Puerto Rico Department of Labor. As of December 31, 1993
there are no loans outstanding.
NOTE 2 - ACCOUNTING POLICIES
Investment Valuation
AHPC's common stock is recorded at the fair market value at December
31. Units of participation in the Fidelity Balanced Fund and the
Fidelity U.S. Equity Portfolio are recorded at their published net
asset value at December 31. The group annuity contract comprising the
Interest Income Fund is recorded at contract value (cost plus accrued
interest) based upon information supplied by the Trustee, which
approximates fair value.
Administrative Costs
All costs and expenses of administering the Plan are paid by AHPC.
Receivable from American Home Products Corporation
The receivable from AHPC at December 31, 1993 represents contributions
withheld from employees but not remitted to the Trustee until January
1994.
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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%.
The four investment funds 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 - is invested in a group annuity contract
issued by a major life insurance company which pays a specified
rate of interest for a fixed period of time and repays principal at
maturity. The fund and its contract 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.
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.
NOTE 4 - MANAGEMENT OF THE PLAN
The Plan is administered by the Committee, which is appointed by the
Board of Directors of AHPC. Banco Popular de Puerto Rico is the
Plan's Trustee. Towers, Perin, Forster & Crosby acts as recordkeeper
of the participant accounts.
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NOTE 5 - INCOME TAX STATUS
Puerto Rico
The Plan is designed to be a qualified profit-sharing plan under
Section 165(a) of the Puerto Rico Income Tax Act of 1954 (the "Act")
and the trust established under the Plan is intended to be tax-exempt
under Section 165(a) of the Act. The Company has obtained from the
Puerto Rico Treasury Department a favorable determination that the
Plan and the trust, as adopted, meet the requirements of the Act. The
principal income tax consequences of participation in the Plan, under
present law and proposed regulations, are discussed in the Plan
agreement and the Plan Prospectus.
Federal Income Tax Status
The Plan does not constitute a qualified profit-sharing plan under the
provisions of Section 401(a) of the Internal Revenue Code (the "Code")
and the "cash and deferred arrangement" incorporated in the Plan is
not intended to qualify under Section 401(k) of the Code. Pursuant to
Section 1022 (i)(1) of ERISA, however, the trust established
thereunder is exempt from Federal income tax under Section 501(a) of
the Code. An individual who is a bona fide resident of Puerto Rico
during the entire taxable year will not be subject to any Federal
income tax on income derived from sources within Puerto Rico.
Additional Federal income tax consequences are set forth in the Plan
agreement.
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.
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American Home Products Corporation Savings Plan - Puerto Rico
Combined Funds
Item 27a - Schedule of Assets Held
for Investment Purposes
as of December 31, 1993
Employer Identification Number - 13-2526821
Plan Number - 060
Number of
Shares or Market
Par Value Description Cost Value
10,869 American Home Products Corp.
Common Stock $691,426 $703,768
N/A John Hancock Mutual Life Insurance
GAC 5.80% Due 6/28/96 629,769 629,769
34,751 Fidelity Balanced Fund 471,183 465,313
30,541 Fidelity U.S. Equity
Portfolio 511,283 519,102
The accompanying notes to financial statements are an integral part of
this schedule.
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<TABLE>
American Home Products Corporation Savings Plan - Puerto Rico
Item 27d - Schedule of Reportable Transactions
Combined Funds (A)
For the year ended December 31, 1993
Employer Identification Number - 13-2526821
Plan Number - 060
Market
Purchase Selling Cost of Value Net Gain
Description Price Price Asset of Asset or Loss
<C> <C> <C> <C> <C> <C>
American Home Products
Corp. Common Stock
22 Purchases $704,949 $ - $704,949 $704,949 $ -
John Hancock Mutual
Life Insurance
GAC 5.80% Due 6/28/96
20 Purchases 648,032 - 648,032 648,032 -
1 Sale 31,469 - 31,469 31,469 -
Fidelity Balanced Fund
22 Purchases 456,725 - 456,725 456,725 -
Fidelity Equity Portfolio
21 Purchases 505,488 - 505,488 505,488 -
(A) Reportable transactions include transactions in excess of 5% of the value
of the first contribution to the Plan.
The accompanying notes to financial statements are an integral part of this
schedule.
</TABLE>
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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
