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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, 1994
Commission File Number 1-1225
------
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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<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
/s/John R. Considine
By: -------------------------
John R. Considine
Vice President - Finance
Date: June 27, 1995
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<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 - PUERTO RICO
/s/Thomas M. Nee
By: ---------------------------
Thomas M. Nee
Chairman of the American Home
Products Corporation Savings
Plan Committee
Date: June 27, 1995
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<PAGE>
AMERICAN HOME PRODUCTS CORPORATION
SAVINGS PLAN - PUERTO RICO
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 and 1993
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
EMPLOYER IDENTIFICATION NUMBER - 13-2526821
PLAN NUMBER - 060
- 4 -
<PAGE>
AMERICAN HOME PRODUCTS CORPORATION
SAVINGS PLAN - PUERTO RICO
DECEMBER 31, 1994 and 1993
INDEX
PAGE
----
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 6
Statement of Net Assets Applicable to Participants'
Equity as of December 31, 1994 and 1993 7 - 8
Statement of Changes in Net Assets Applicable
to Participants' Equity for the Year Ended
December 31, 1994 9
Notes to Financial Statements and Schedules as of
December 31, 1994 and 1993 10 - 14
SUPPLEMENTAL SCHEDULES:
I. Item 27a - Schedule of Assets Held for
Investment Purposes - as of
December 31, 1994 15
II. Item 27d - Schedule of Reportable Transactions -
for the year ended December 31, 1994 16
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
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<PAGE>
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 statements of net assets applicable to
participants' equity of the American Home Products Corporation Savings
Plan - Puerto Rico as of December 31, 1994 and 1993, and the related
statement of changes in net assets applicable to participants' equity
for the year ended December 31, 1994. 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 audits 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 applicable to
participants' equity of the American Home Products Corporation Savings
Plan - Puerto Rico as of December 31, 1994 and 1993, and the changes in
net assets applicable to participants' equity for the year ended
December 31, 1994, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules
of 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 fund information in the statement of net assets
applicable to participants' equity and statement of changes in net
assets applicable to participants' equity is presented for purposes of
additional analysis rather than to present the net assets applicable to
participants' equity of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
ARTHUR ANDERSEN LLP
New York, New York
June 22, 1995
<PAGE>
<TABLE>
American Home Products Corporation Savings Plan - Puerto Rico
Statement of Net Assets Applicable to Participants' Equity
As of December 31, 1994
<CAPTION>
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
- ------------
Investments at Market Value $ - $1,478,139 $1,023,101 $1,227,842 $3,729,082
Group Annuity And Other Investment
Contracts, at contract value 1,404,426 - - - 1,404,426
Receivable from American Home
Products Corporation 41,159 37,738 17,457 28,580 124,934
Other Receivables/(Payables) 33 (15,884) 11 25 (15,815)
---------- ---------- ---------- ---------- ----------
Net Assets Applicable to
Participants' Equity $1,445,618 $1,499,993 $1,040,569 $1,256,447 $5,242,627
========== ========== ========== ========== ==========
The accompanying notes to financial statements and schedules are an integral part of this statement.
</TABLE>
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<PAGE>
<TABLE>
American Home Products Corporation Savings Plan - Puerto Rico
Statement of Net Assets Applicable to Participants' Equity
As of December 31, 1993
Fidelity
<CAPTION> 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 Applicable to
Participants' Equity $679,550 $745,166 $495,873 $561,746 $2,482,335
======== ======== ======== ======== ==========
The accompanying notes to financial statements and schedules are an integral part of this statement.
</TABLE> - 8 -
<PAGE>
<TABLE>
American Home Products Corporation Savings Plan - Puerto Rico
Statement of Changes in Net Assets Applicable to Participants' Equity
For the Year Ended December 31, 1994
Fidelity
<CAPTION> Interest AHPC Common Fidelity U.S. Equity
Income Fund Stock Fund Balanced Fund Portfolio Total Funds
----------- ---------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Participant Contributions $ 596,482 $ 509,795 $ 475,652 $ 531,952 $2,113,881
Employer Contributions 209,139 292,089 171,447 210,362 883,037
-------- ---------- --------- ---------- ----------
Total contributions 805,621 801,884 647,099 742,314 2,996,918
Cash Dividends on Investments - 45,385 24,589 30,206 100,180
Interest on Group Annuity Contracts
and Other Investment Contracts and
Cash Equivalents 59,052 710 15 142 59,919
--------- --------- ---------- ---------- ---------
Total investment income 59,052 46,095 24,604 30,348 160,099
Net Appreciation/(Depreciation)of
Investments - 5,284 (65,541) (16,343) (76,600)
Withdrawals (98,605) (98,436) (61,466) (61,618) (320,125)
---------- --------- ---------- ---------- ---------
Net Increase in Net Assets 766,068 754,827 544,696 694,701 2,760,292
Net Assets Applicable to Participants'
Equity - January 1, 1994 679,550 745,166 495,873 561,746 2,482,335
--------- --------- ---------- ---------- ---------
Net Assets Applicable to Participants'
Equity - December 31, 1994 $1,445,618 $1,499,993 $1,040,569 $1,256,447 $5,242,627
========== ========== ========== ========== ==========
The accompanying notes to financial statements and schedules are an integral part of this statement.
</TABLE>
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<PAGE>
AMERICAN HOME PRODUCTS CORPORATION
SAVINGS PLAN - PUERTO RICO
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1994 and 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. Under the Code, salary deferral
contributions, and the amount of compensation that can be included for Plan
purposes are subject to annual limitations. 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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<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.
At December 31, 1994 and 1993, approximately $88,403 and $12,823,
respectively, of the net assets applicable to participants' equity represents
the accumulated vested benefits of participants who have withdrawn from the
plan but have not yet been paid.
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
-----
A participant in the Plan may borrow up to 50% of their vested account
balances. Each loan is secured by the borrower's vested interest in their
account balance. A participant 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, which must be repaid within 10 years. A
participant may not borrow from the plan more than once every six months.
Defaults on participants' loans during the year are treated as a taxable
distribution for the outstanding balance. The interest rate charged will be
one which provides a return commensurate with a market rate, or such other
rate as permitted by government regulations or releases. There are no loans
outstanding as of December 31, 1994 and 1993.
NOTE 2 - ACCOUNTING POLICIES
--------------------
Investment Valuation
- --------------------
AHPC's common stock fund 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.
Investment transactions are recorded on a trade date basis for transactions
recorded by the Trustee. Net realized gains and losses on investments are
determined, for accounting purposes, on a moving weighted average basis as of
the trade date and are included in net (depreciation)/appreciation of
investments in the accompanying financial statements.
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<PAGE>
The net change in the difference between cost and current market value of
investments held is reflected in net appreciation/(depreciation) of
investments in the statement of changes in net assets applicable to
participants' equity.
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, 1994 and 1993 represents
contributions withheld from employees but not remitted to the Trustee until
January 1995 and 1994, 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%.
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 - consists of both a group annuity contract issued by
a major life insurance company, and a pooled separate account of
guaranteed insurance contracts 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.
- 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. Banco Popular de Puerto Rico is the Plan's Trustee.
Towers, Perin, Forster & Crosby acts as recordkeeper of the participant
accounts.
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 covers all plan amendments through
January 1, 1993. There were no plan amendments subsequent to this date. 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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<PAGE>
NOTE 7 - INVESTMENTS
-----------
The fair market of individual investments that represent 5% or more of the
Plan's total net assets of December 31, 1994 and 1993 are as follows:
1994 1993
---------- ---------
American Home Products Corp. $1,478,139 $703,768
Common Stock, 23,556 and 10,869
shares, respectively
John Hancock Mutual Life
Insurance (at contract value)
GIC 5.80% 6/28/96 745,468 629,769
IDS Trust Company 658,958 -
pooled separate account of
guaranteed insurance contracts
with interest rates ranging from
4.54% to 9.66% and with maturities
extending from 1995 through 2001.
Fidelity Balanced Fund 1,023,101 465,313
Fidelity U.S. Equity Portfolio 1,227,842 519,102
- 14 -
<PAGE>
SCHEDULE I
<TABLE>
American Home Products Corporation Savings Plan - Puerto Rico
Combined Funds
Item 27a - Schedule of Assets Held
for Investment Purposes
as of December 31, 1994
Employer Identification Number - 13-2526821
Plan Number - 060
<CAPTION> Cost/
Description of Contract Current
Identity of Issuer Investment Value Value
--------------- --------- --------
<C> <C> <C> <C>
Common Stock:
- -------------
American Home Products Corp.
Common Stock 23,556 Shares $1,460,566 $1,478,139
Group Annuity and Investment Contracts:
- ---------------------------------------
John Hancock Mutual Life Insurance
GAC 5.80% Due 6/28/96 745,468 745,468
IDS Trust Company 17,633 Units 658,958 658,958
pooled separate account of
guaranteed insurance contracts
with interest rates ranging
from 4.54% to 9.66% and maturities
from 1995 through 2001.
Mutual Funds:
- ------------
Fidelity Balanced Fund 83,246 Units 1,094,655 1,023,101
Fidelity U.S. Equity Portfolio 72,610 Units 1,236,364 1,227,842
The accompanying notes to financial statements and schedules are an integral
part of this schedule.
</TABLE>
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<PAGE>
SCHEDULE II
<TABLE>
American Home Products Corporation Savings Plan - Puerto Rico
Item 27d - Schedule of Reportable Transactions
For the year ended December 31, 1994
Employer Identification Number - 13-2526821
Plan Number - 060
<CAPTION> (h) Current
(f) Expenses Value of
(c) (d) Incurred Assets on
(a&b) Identify of Party Purchase Selling (e) Lease with (g) Cost Transaction (i) Net Gain
and Description Price Price Rentals Transactions of Assets Date or (Loss)
- ------------------------ -------- ------- --------- ------------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
American Home Products Corp.
Common Stock
28 Purchases $773,285 0 0 0 $773,285 $773,285 0
IDS Trust Company
28 Purchases 658,958 0 0 0 658,958 658,958 0
Fidelity Balanced Fund
29 Purchases 645,203 0 0 0 645,203 645,203 0
Fidelity Equity Portfolio
29 Purchases 716,800 0 0 0 716,800 716,800 0
(A) Reportable transactions are those purchases and sales of the same security which individually or
in the aggregate, exceed 5% of the total plan net assets as of the beginning of the plan year.
The accompanying notes to financial statements and schedules are an integral part of this schedule.
</TABLE>
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<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 Statements No. 33-45324 and 33-57339 and Form S-8
Registration Statements No. 2-96127, 33-53733, 33-55449, 33-14458,
33-45970, 33-50149, 33-24068, 33-41434 and 33-55456.
ARTHUR ANDERSEN LLP
New York, New York
June 27, 1995
