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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, 2002
WYETH SAVINGS PLAN - PUERTO RICO
(Full title of the Plan)
Wyeth
(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
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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.
Wyeth
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(Registrant)
By: /s/ Paul J. Jones
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Paul J. Jones
Vice President and Controller
Date: June 26, 2003
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Wyeth
Savings Plan - Puerto Rico Committee has duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.
WYETH SAVINGS PLAN - PUERTO RICO
By: /s/ Jack M. O'Connor
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Jack M. O'Connor
Member of the Wyeth
Savings Plan - Puerto Rico Committee
Date: June 26, 2003
WYETH SAVINGS PLAN - PUERTO RICO
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2002 and 2001
TOGETHER WITH THE REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
EMPLOYER IDENTIFICATION NUMBER - 13-2526821
PLAN NUMBER - 060
WYETH SAVINGS PLAN - PUERTO RICO
DECEMBER 31, 2002 and 2001
INDEX
Page
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Report of Independent Public Accountants
Statements of Net Assets Available for Plan Benefits
as of December 31, 2002 and 2001 1
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2002 2
Notes to Financial Statements 3 - 8
Supplemental Schedule:*
Item 4i - Schedule of Assets (Held at End of Year)
as of December 31, 2002 Schedule I
Consent of Independent Public Accountants
* Other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under ERISA have been
omitted because they are not applicable.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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To the Participants and Administrator of
Wyeth Savings Plan - Puerto Rico:
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
benefits of Wyeth Savings Plan - Puerto Rico (the "Plan") at December 31, 2002
and 2001, and the changes in net assets available for benefits for the year
ended December 31, 2002 in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets (Held
at End of Year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is 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. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 26, 2003
Wyeth Savings Plan - Puerto Rico
Statements of Net Assets Available for Plan Benefits
As of December 31, 2002 and 2001
December 31,
2002 2001
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Assets:
Investments, at fair value $45,587,575 $50,583,146
Loans to participants 6,335,690 5,942,791
Receivables:
Employer contribution 106,746 111,646
Participant contribution 325,917 346,864
Due from brokers for securities sold 40,311 183,932
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Total receivables 472,974 642,442
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Cash and cash equivalents 1,286,429 1,192,035
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Net Assets Available for Plan Benefits $53,682,668 $58,360,414
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The accompanying notes to financial statements are an integral part of these
statements.
- 1 -
Wyeth Savings Plan - Puerto Rico
Statement of Changes in Net Assets Available for Plan Benefits
For The Year Ended December 31, 2002
Reductions in net assets attributed to:
Investment Loss:
Net depreciation in fair value
of investments ($11,492,964)
Interest 1,270,859
Dividends 559,185
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Total investment loss (9,662,920)
Contributions:
Employer 2,589,793
Participant 8,188,214
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Total contributions 10,778,007
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Total additions 1,115,087
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Deductions from net assets attributed to:
Benefits paid to participants 5,792,833
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Net deductions (4,677,746)
Net Assets Available for Plan Benefits:
Beginning of Year 58,360,414
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End of Year $53,682,668
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The accompanying notes to financial statements are an integral part of this
statement.
- 2 -
WYETH SAVINGS PLAN - PUERTO RICO
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - PLAN DESCRIPTION
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The following description of the Wyeth Savings Plan - Puerto Rico (the "Plan")
only provides general information. Participants of the Plan should refer to the
Plan Document for a more detailed and complete description of the Plan's
provisions.
General
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The Plan, a defined profit sharing contribution plan, was approved and adopted
by the Board of Directors of Wyeth (the "Company") and became effective on
January 1, 1993. Effective March 11, 2002 the Company changed its name to Wyeth,
and accordingly, the Plan's name was changed to the Wyeth Savings Plan - Puerto
Rico. Full-time employees of the Company and its participating subsidiaries who
reside in Puerto Rico and are not subject to a collective bargaining agreement
("non-union") are eligible to participate in the Plan after attaining age 21, as
defined in the Plan. Part-time employees additionally must complete at least
1,000 hours during the first 12 months of employment or during any calendar year
following the year in which they are hired. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended, and the Puerto Rico Internal Revenue Code (the "PR Code").
Contributions
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Participants may elect to make contributions to the Plan in whole percentages up
to a maximum of 16% of their covered compensation, as defined. Contributions can
be made on a before-tax basis ("salary deferral contributions"), an after-tax
basis ("after-tax contributions"), or a combination of both. The Company will
contribute an amount equal to 50% of the participant's contributions to the Plan
for contributions up to 6% of the participant's covered compensation.
Participants direct the investment of their contributions and Company
contributions into various investment options offered by the Plan. Under the PR
Code, total annual salary deferral contributions that can be included for Plan
purposes are subject to annual limitations.
Vesting and Separation From Service
- -----------------------------------
Participants are fully vested at all times in their salary deferral and
after-tax contributions plus actual earnings thereon. A participant is also
fully vested in Company matching contributions if the participant has at least
five years of continuous service, as defined. If participants have less than
five years of continuous service, such participants become vested in their
Company matching contributions according to the following schedule:
- 3 -
Vesting
Years of Continuous Service Percentage
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1 year completed 0%
2 years completed 25%
3 years completed 50%
4 years completed 75%
5 years completed 100%
Regardless of the number of years of continuous service, participants shall be
fully vested in their Company matching contributions account upon reaching age
65 or upon death, if earlier. If employment is terminated prior to full vesting,
the non-vested portion of the Company matching contributions is forfeited and
becomes available to satisfy future Company matching contributions. During 2002,
forfeitures of $45,772 were used to offset Company matching contributions. As of
December 31, 2002 and 2001, the amount of forfeitures available to offset future
Company matching contributions totaled $7,317 and $9,459, respectively.
Distributions
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Participants are entitled to withdraw all or any portion of their after-tax
contributions. Participants may make full or partial withdrawals of funds in any
of their accounts upon attaining age 59 1/2 or for financial hardship, as
defined in the Plan Document, before that age. Participants may qualify for
hardship withdrawals if they have an immediate and heavy financial need, as
determined by the Wyeth Savings Plan Committee - Puerto Rico (the "Committee").
Participants are limited to one non-hardship and one hardship withdrawal each
year. Participants may make hardship withdrawals provided they have no other
funds that are readily available to meet that need.
Upon termination of employment, participants are entitled to a lump-sum
distribution of their vested account balance. Participants can defer the
distribution of their account if the participant's account balance is greater
than $5,000 and if the participant is less than 70 1/2 years of age.
Loans
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Participants 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 borrower's 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 15 years. Defaults on participants' loans during the year
are treated as withdrawals and are fully taxable to the participants. The
interest rate charged on loans provides a return commensurate with a market
rate, or such other rate as permitted by government regulations as of the date
of the loan agreement.
- 4 -
NOTE 2 - ACCOUNTING POLICIES
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Basis of Accounting
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The accompanying financial statements are prepared on the accrual basis of
accounting.
Contributions
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Contributions from the employer are accrued based upon amounts required to be
funded under the provisions of the Plan. Contributions from employees are
accrued when deducted from payroll.
Benefits
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Benefits are recorded when paid.
Investment Valuation
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The Wyeth Common Stock Fund is recorded at fair market value. Shares in the
Fidelity Funds and the MSIFT Value Portfolio - Adviser Class are recorded at
fair market value, which is based on their published net asset value. The
investment contracts comprising the Interest Income Fund are recorded at
contract value based upon information provided by Fidelity Management Trust
Company ("Fidelity") which approximates fair market value (see also NOTE 3).
Loans are valued at cost which does not differ materially from fair market
value.
Investment transactions are recorded on a trade date basis.
Administrative Costs
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All costs and expenses of administering the Plan are paid by the Company.
Risks and Uncertainties
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The Plan's assets consist of various investments which are exposed to various
risks, such as interest rate, market and credit. Due to the level of risk
associated with certain investment securities and the level of uncertainty
related to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term would materially
affect participants' account balances and the amounts reported in the statements
of net assets available for plan benefits and the statement of changes in net
assets available for plan benefits.
Use of Estimates
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The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States and necessarily include
amounts based on judgments and estimates made by management. Actual results
could differ from those estimates.
- 5 -
NOTE 3 - INVESTMENT ELECTIONS
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Participants can elect to invest amounts credited to their account in any of
eight investment funds offered by the Plan and transfer amounts between these
funds at any time during the year. Investment elections must be made in
multiples of 10%. Transfers between funds must be made in whole percentages
and/or in an amount of at least $250.
The eight investment options are as follows for 2002 and 2001:
Interest Income Fund - consists primarily of investment contracts issued by
life insurance companies which pay a specified rate of interest for a fixed
period of time and repay principal at maturity. The investment contracts are
guaranteed by the issuing insurance carrier. However, the Committee has
established guidelines that provide that investment contracts be placed with
companies rated Aa3 or higher by Moody's and AA- or higher by Standard &
Poor's. 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
average blended yield and crediting interest rate attributable to these
contracts approximated 5.56% for 2002 and 6.24% for 2001.
Wyeth Common Stock Fund - consists primarily of Company common stock.
Purchases and sales of Wyeth common stock are made in the open market.
Participants have full voting rights for equivalent shares purchased at
their direction under the Plan.
Fidelity Magellan Fund - consists of shares in a mutual fund managed by
Fidelity Management & Research Company that seeks long-term capital
appreciation by actively managing investments in the stocks of companies
that the investment manager believes possess above average growth potential.
Fidelity Balanced Fund - consists of shares 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 International Growth & Income Fund - consists of shares in a mutual
fund managed by Fidelity Management & Research Company that seeks long-term
growth and current income by investing in assets, of which at least 65% are
in securities of issuers that have their principal business activities
outside of the United States.
Fidelity Spartan U.S. Equity Index Fund - consists of shares 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
stocks of companies that make up the Standard & Poor's 500 Index.
Fidelity Low-Priced Stock Fund - consists of shares in a mutual fund managed
by Fidelity Management & Research Company that invests primarily in domestic
and international small capitalization equities.
- 6 -
MSIFT Value Portfolio - Adviser Class - consists of shares in a mutual fund
managed by Morgan Stanley Investments, LLP. which seeks long-term returns by
investing in stocks of large and mid-sized companies.
NOTE 4 - MANAGEMENT OF THE PLAN
----------------------
The Plan is administered by the Committee, which was appointed by the Board of
Directors of the Company. Banco Popular de Puerto Rico is the Plan's trustee.
Fidelity Management Trust Company was appointed by the Committee as recordkeeper
and custodian, and is a party-in-interest to the Plan.
NOTE 5 - RELATED-PARTY TRANSACTIONS
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Certain Plan investments are shares of mutual funds managed by Fidelity. As
stated in NOTE 4. Fidelity is the recordkeeper and custodian of the Plan and
therefore, these transactions qualify as party-in-interest transactions.
NOTE 6 - PLAN AMENDMENTS
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The Plan was amended in 2002 for certain administrative enhancements.
NOTE 7 - INCOME TAX STATUS
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Puerto Rico
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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 letter dated December 20, 1993 stating that the Plan is in
compliance with the Act. It has also received verification dated April 2, 1998
from the Puerto Rico Treasury Department stating that all plan amendments
through January 1, 1996 will not effect the favorable determination previously
issued on December 20, 1993. The Plan has been amended since receiving the
determination letter and subsequent notification. However, the Plan
administrator believes that the Plan and the trust continue to meet the
requirements of the Act.
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.
- 7 -
NOTE 8 - 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 Company contribution amounts and
are entitled to full distribution of such amounts.
NOTE 9 - INVESTMENTS
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The fair market value of individual investments that represent 5% or more of the
Plan's total net assets are as follows:
2002 2001
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Wyeth Common Stock Fund $15,050,695 $14,213,308
Fidelity Spartan U.S. Equity Index Fund $5,107,358 $6,855,767
Fidelity Balanced Fund $4,333,260 $4,970,143
Fidelity Magellan Fund -- $3,474,697
Monumental Life Insurance 4.95% Due 6/15/04 $3,154,340 --
Monumental Life Insurance 4.95% Due 6/15/06 -- $3,005,167
Metropolitan Life Insurance 4.60% Due 12/15/03 $3,005,920 --
Metropolitan Life Insurance 4.60% Due 12/15/05 -- $6,005,549
During 2002, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value by
($11,492,964) as follows:
Wyeth Common Stock Fund (8,403,123)
Mutual Funds (3,089,841)
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Total ($11,492,964)
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- 8 -
Schedule I
Wyeth Savings Plan - Puerto Rico
Schedule H Item 4i - Schedule of Assets (Held At End of Year)
As of December 31, 2002
Employer Identification Number - 13-2526821
Plan Number - 060
Identity of Issuer Description of Investment Cost** Current Value
- ------------------- ------------------------- ------ -------------
Investment Contracts:
- ---------------------
John Hancock Mutual Life Insurance GIC 5.42% Due 6/15/07 $2,640,840
Metropolitan Life Insurance GIC 4.60% Due 12/15/05 $3,005,920
Metropolitan Life Insurance GIC 6.10% Due 12/15/05 $1,201,071
Metropolitan Life Insurance GIC 4.24% Due 6/15/08 $1,351,907
Monumental Life Insurance GIC 4.95% Due 6/15/06 $3,154,340
New York Life Insurance GIC 6.91% Due 12/15/04 $1,854,139
Principal Mutual Life Insurance GIC 4.01% Due 12/17/07 $1,502,426
Travelers Insurance GIC 6.51% Due 12/15/06 $2,387,237
Wyeth* Common Stock
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402,425 shares $15,050,695
* Represents a party-in-interest to the Plan
**Cost not required for participant directed investments.
Schedule I
(Continued)
Wyeth Savings Plan - Puerto Rico
Schedule H Item 4i - Schedule of Assets (Held At End of Year)
As of December 31, 2002
Employer Identification Number - 13-2526821
Plan Number - 060
Identity of Issuer Description of Investment Cost** Current Value
- ------------------- ------------------------- ------ -------------
Mutual Funds:
Fidelity Management Trust Company* Magellan Fund
33,031 shares $2,608,099
Fidelity Management Trust Company* Balanced Fund
326,054 shares $4,333,260
Fidelity Management Trust Company* International Growth & Income Fund
31,006 shares $521,529
Fidelity Management Trust Company* Spartan U.S. Equity Index Fund
163,960 shares $5,107,358
Fidelity Management Trust Company* Low-Priced Stock Fund
27,711 shares $697,476
Morgan Stanley Investments, LLP. MSIFT Value Portfolio - Adviser Class
14,715 shares $171,278
Total Investments per Statement of
Net Assets Available for Plan Benefits $45,587,575
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Loans to Plan Participants* Rates ranging from 5.25% to 10.5%
Due through 2017 $6,335,690
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* Represents a party-in-interest to the Plan
**Cost not required for participant directed investments.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
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We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (Nos. 33-45324 and 33-57339), Form S-4 (No. 333-59642),
and Form S-8 (Nos. 2-96127, 33-24068, 33-41434, 33-53733, 33-55449, 33-45970,
33-14458, 33-50149, 33-55456, 333-15509, 333-76939, 333-67008, 333-64154,
333-59668, 333-89318, 333-98619 and 333-98623) of Wyeth of our report dated June
26, 2003 relating to the financial statements of the Wyeth Savings Plan - Puerto
Rico, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 26, 2003