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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, 1995
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, 1996
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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, 1996
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<PAGE>
AMERICAN HOME PRODUCTS CORPORATION
SAVINGS PLAN - PUERTO RICO
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 and 1994
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
EMPLOYER IDENTIFICATION NUMBER - 13-2526821
PLAN NUMBER - 060
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<PAGE>
AMERICAN HOME PRODUCTS CORPORATION
SAVINGS PLAN - PUERTO RICO
DECEMBER 31, 1995 and 1994
INDEX
PAGE
------
Report of Independent Public Accountants
Statements of Net Assets Applicable to Participants'
Equity as of December 31, 1995 and 1994 7 - 8
Statement of Changes in Net Assets Applicable to
Participants' Equity for the Year Ended
December 31, 1995 9
Notes to Financial Statements as of
December 31, 1995 and 1994 10 - 14
Supplemental Schedules:
I. Item 27a - Schedule of Assets Held for
Investment Purposes as of
December 31, 1995 15
II. Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1995 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, 1995 and 1994, and the related statement of
changes in net assets applicable to participants' equity for the year ended
December 31, 1995. These financial statements and the supplemental
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 applicable to participants' equity
of the American Home Products Corporation Savings Plan - Puerto Rico as of
December 31, 1995 and 1994, and the changes in net assets applicable to
participants' equity for the year ended December 31, 1995, 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 statements 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 and changes in 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 19, 1996
<PAGE>
<TABLE>
American Home Products Corporation Savings Plan - Puerto Rico
Statement of Net Assets Applicable to Participants' Equity
As of December 31, 1995
<CAPTION> Receivable
Fidelity from Cyanamid-
Interest AHPC Common Fidelity U.S. Equity P.R. Employees'
Income Fund Stock Fund Balanced Fund Portfolio Savings Plan Total Funds
----------- ----------- ------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investments, at Market Value $ - $3,409,651 $1,508,578 $2,206,189 $ - $7,124,418
Group Annuity and Other Investment
Contracts, at market Value 2,316,309 - - - - 2,316,309
Receivable from Cyanamid Puerto Rico
Employees' Savings Plan, (Note 1) - - - - 11,432,598 11,432,598
Receivable from American Home
Products Corporation 133,387 406 38,141 26,975 - 198,909
Other Receivables/(Payables) (21,499) (85,683) (127) 103,293 - (4,016)
----------- ---------- ---------- ----------- ----------- -----------
Net Assets Applicable to
Participants' Equity $2,428,197 $3,324,374 $1,546,592 $2,336,457 $11,432,598 $21,068,218
========== ========== ========== ========== =========== ============
</TABLE>
The accompanying notes to financial statements are an integral
part of this statement.
-7-
<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>
Investments, at Market Value $ - $1,478,139 $1,023,101 $1,227,842 $3,729,082
Group Annuity and Other Investment
Contracts, at Market 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
========== =========== =========== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral
part of this statement.
<PAGE> - 8 -
<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, 1995
<CAPTION>
Receivable
from
Fidelity Cyanamid PR
Interest AHPC Common Fidelity U.S. Equity Employees'
Income Fund Stock Fund Balanced Fund Portfolio Savings Plan Total Funds
----------- ----------- ------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Participant Contributions $ 769,426 $ 606,174 $423,483 $512,243 $ - $2,311,326
Employer Contributions 248,366 315,507 151,175 198,860 - 913,908
Dividends/Income on Investments - 88,101 56,996 58,567 - 203,664
Interest on Group Annuity and
Other Investment Contracts and
Cash Equivalent 107,962 1,089 219 204 - 109,474
Net Appreciation of Investments - 1,024,232 117,925 475,813 - 1,617,970
Transfer in from Cyanamid Puerto Rico
Employees' Savings Plan - - - - 11,432,598 11,432,598
Total Additions 1,125,754 2,035,103 749,798 1,245,687 11,432,548 16,588,940
--------- ---------- -------- --------- ---------- ----------
Deductions:
Distributions to Participants (248,065) (194,488) (161,671) (159,125) - (763,349)
Net Additions Prior to --------- --------- --------- --------- ---------- ----------
Interfund Transfers 877,689 1,840,615 588,127 1,086,562 11,432,598 15,825,591
Transfers Between Other Funds 104,890 (16,234) (82,104) (6,552) - -
Net Deductions 982,579 1,824,381 506,023 1,080,010 11,432,598 15,825,591
Net Assets Applicable to Participants'
Equity - January 1, 1995 1,445,618 1,499,993 1,040,569 1,256,447 - 5,242,627
---------- ---------- --------- --------- ----------- -----------
Net Assets Applicable to Participants'
Equity - December 31, 1995 $2,428,197 $3,324,374 $1,546,592 $2,336,457 $11,432,598 $21,068,218
========== ========== ========== ========== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral
part of this statement.
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<PAGE>
AMERICAN HOME PRODUCTS CORPORATION
SAVINGS PLAN - PUERTO RICO
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 and 1994
NOTE 1 - PLAN DESCRIPTION
----------------
The following description of the American Home Products Corporation Savings
Plan - Puerto Rico (the "Plan") only provides general information.
Participants should refer to the Plan document for a more detailed and
complete description of the Plan's provisions.
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 agreement (non-union) 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. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA") and the Internal Revenue Code.
Effective December 31, 1995, the non-union participants (transferred
participants) of the Cyanamid Puerto Rico Employees' Savings Plan (the "ACY
Plan") were included in the Plan. The assets attributable to these
participants are reflected as a receivable from the ACY Plan at December 31,
1995. On January 9, 1996 the Plan received amounts due from the ACY Plan
and invested them in the Interest Income Fund. Thereafter, the transferred
participants could elect to transfer their account balance into the Plan's
investment options, in accordance with the Plan's provisions. The
transferred participants account balances became fully vested at the date of
transfer. Future Company matching contributions will vest according to the
Plan's provisions, unless the transferred participants completed three or
more years of service, in which case all future contributions will be vested
at the better of each plan's vesting schedule.
Contributions
- -------------
Participants may elect to make contributions to the Plan in whole
percentages up to a maximum of 16% of the participants' 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 Puerto Rico Internal
Revenue Code of 1994 (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.
Vesting and Separation From Service
- -----------------------------------
Participants are fully vested at all times in amounts in salary deferral and
after-tax contribution accounts. Participant are also fully vested in
Company matching contributions if the participant has at least five years of
continuous service, as defined by the Plan. If participants have less than
five years of continuous service, such participants become 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%
Regardless of the number of years of continuous service, participants 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 participants' employment with AHPC is terminated prior to full
vesting, they shall be entitled to receive the vested portion of their
account balance. The non-vested portion of such account is forfeited and
becomes available to AHPC to satisfy future Company matching contributions.
Withdrawals
- -----------
Participants are entitled to withdraw all or any portion of their account
attributable to after-tax contributions. Participants may make full or
partial withdrawals of funds in any of their accounts upon attaining age
591/2 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.
Upon termination of employment, participants are entitled to a lump sum
distribution of their vested account balance. An election must be made to
defer the distribution to a later date if the participants' account balance
is greater than $3,500 and of the participants' less than 70 1/2 years of
age.
At December 31, 1995 and 1994, approximately $163,964 and $88,403,
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.
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<PAGE>
Loans
- -----
Employees who have a vested account balance of at least $2,000 may borrow
from the vested portion of their account, subject to certain maximum
amounts. Participants in the Plan may borrow up to 50% of their vested
account balances. Each loan is secured by the borrowers' vested interest in
their account balance. Participants 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.
Participants 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 of 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.
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 included in the Interest Income
Fund is recorded at market value based upon information supplied by Banco
Popular de Puerto Rico (the "Trustee").
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 appreciation of investments in the
accompanying financial statements.
The net change in the difference between cost and current market value of
investments held, is reflected in net appreciation 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, 1995 and 1994 represents
contributions withheld from employees but not remitted to the Trustee until
1996 and 1995, respectively.
Use of Estimates
- ----------------
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires the plan administrator to
make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclose contingent assets and liabilities at the date
of the financial statements and the reported amounts of additions and
deductions during the reporting period. Actual results may differ from
these estimates.
NOTE 3 - INVESTMENTS
-----------
Participants can elect to have amounts credited to their account invested in
any of four investment funds. Elections could be made in multiples of 25%.
Participants could transfer all, or part, of the value of their account
invested in any of the investment funds to another fund in multiples of 25%.
Beginning January 1, 1996, participants can make elections in multiples of
10%.
The four investment funds are:
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.
Interest Income Fund - consists of both a group annuity contract issued by a
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. The overall annual return in the fund was
approximately 5.8% for 1995 and 4.1% for 1994.
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.
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 AHPC Savings Plan 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. The Plan has been amended since receiving the
determination letter in connection with the transfer of assets and
liabilities relating to the ACY Plan. 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.
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<PAGE>
U.S. 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. 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 the employee
contributions in their accounts and are entitled to full distribution of
such amounts.
NOTE 7 - INVESTMENTS
-----------
The fair value of individual investments that represent 5% or more of the
Plan's total net assets at December 31 are as follows:
1995 1994
----------- -----------
American Home Products Corp.
Common Stock, 34,771 and 23,556
shares, respectively $3,409,651 $1,478,139
John Hancock Mutual Life
Insurance
GIC 5.80% Due 6/28/96 788,705 745,468
American Express Trust Company
Collective Funds - Income
Fund I 1,527,604 658,958
Fidelity Balanced Fund 1,508,578 1,023,101
Fidelity U.S. Equity Portfolio 2,206,189 1,227,842
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<PAGE>
<TABLE>
SCHEDULE I
American Home Products Corporation Savings Plan - Puerto Rico
Item 27a - Schedule of Assets Held
for Investment Purposes
as of December 31, 1995
Employer Identification Number - 13-2526821
Plan Number - 060
<CAPTION>
Cost/
Description of Contract Current
(a)(b)Identity of Issuer (c) Investment (d) Value (e) Value
- ----------------------- --------------- --------- ----------
<S> <C> <C> <C>
Common Stock:
- ------------
* American Home Products Corp.
Common Stock,
par value
$.33 1/3 per share 34,771 Shares $2,367,846 $3,409,651
Group Annuity and Investment Contracts:
- --------------------------------------
John Hancock Mutual Life Insurance
GAC 5.80% Due 6/28/96 - 788,705 788,705
American Express Trust Company 77,057 Units 1,460,233 1,527,604
Collective Funds - Income
Fund I ------------- ---------
Subtotal 2,248,938 2,316,309
Mutual Funds:
- --------------
*Fidelity Balanced Fund 111,581 Units 1,462,206 1,508,578
*Fidelity U.S. Equity Portfolio 129,727 Units 1,738,900 2,206,189
</TABLE>
* These assets are a related party interest.
The accompanying notes to financial statements are an integral
part of this schedule.
- 13 -
<PAGE>
<TABLE>
SCHEDULE II
American Home Products Corporation Savings Plan - Puerto Rico
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1995
Employer Identification Number - 13-2526821
Plan Number - 060
<CAPTION>
(h) Current
f) Expenses Value of
(c) (d) Incurred Assets on
(b) Identity of Party Purchase Selling (e) Lease with (g) Cost Transaction (i) Net Gain
and Description Price Price Rentals Transaction of Asset Date (Loss)
- ----------------------- --------- --------- --------- ------------ --------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
American Home Products Corp.
Common Stock
24 Purchases $840,499 0 0 0 $840,499 $840,499 0
American Express Trust Company
Collective Funds - Income Fund I
23 Purchases 771,370 0 0 0 771,370 771,370 0
Fidelity Balanced Fund
20 Purchases 340,952 0 0 0 340,952 340,952 0
Fidelity U.S. Equity Portfolio
21 Purchases 455,108 0 0 0 455,108 455,108 0
</TABLE>
(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 are an integral
part of this schedule.
- 14 -
<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, 1996
- 15 -
