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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 years ended December 31, 2002
WYETH UNION SAVINGS PLAN
(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 Committee has duly caused this annual report to be signed on its
behalf by the undersigned, thereunto duly authorized.
WYETH UNION SAVINGS PLAN
By: /s/ Jack M. O'Connor
------------------------------
Jack M. O'Connor
Member of the
Wyeth Savings Plan Committee
Date: June 26, 2003
WYETH UNION SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2002 AND 2001
TOGETHER WITH THE REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
EMPLOYER IDENTIFICATION NUMBER - 13-2526821
PLAN NUMBER - 069
WYETH UNION SAVINGS PLAN
DECEMBER 31, 2002 AND 2001
INDEX
PAGE
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Report of Independent Public Accountants
Statements of Net Assets Available for Plan Benefits 1
as of December 31, 2002 and 2001
Statement of Changes in Net Assets Available for Plan Benefits 2
for the Year Ended December 31, 2002
Notes to Financial Statements 3 - 8
Supplemental Schedule:*
Item 4i - Schedule of Assets (Held at End of Year) Schedule I
as of December 31, 2002
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 Union Savings Plan:
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 Union Savings Plan (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 audits. 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 audits 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 Union Savings Plan
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 $47,123,289 $50,797,470
Loans to participants 1,297,782 1,121,410
Participant contributions receivable 138,334 143,618
Cash and cash equivalents 22,375 47,715
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Total Assets $48,581,780 $52,110,213
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Liabilities:
Due to brokers for securities purchased -- 24,563
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Net Assets Available for Plan Benefits $48,581,780 $52,085,650
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The accompanying notes to financial statements are an integral part of these
statements.
1
Wyeth Union Savings Plan
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 ($5,399,569)
Interest 1,413,647
Dividends 453,099
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Total investment loss (3,532,823)
Participant Contributions 3,876,997
Rollovers into Plan 52,776
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Total additions 396,950
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Deductions from net assets attributed to:
Benefits paid to participants 3,900,820
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Net deductions (3,503,870)
Net Assets Available for Plan Benefits
Beginning of Year 52,085,650
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End of Year $48,581,780
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The accompanying notes to financial statements are an integral part of this
statement.
2
WYETH UNION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - PLAN DESCRIPTION
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The following description of the Wyeth Union Savings Plan (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
- -------
The Plan, a defined contribution plan of Wyeth (the "Company"), is a voluntary
savings plan available to all eligible employees, as defined. Effective March
11, 2002, the Company changed its name to Wyeth, and accordingly, the Plan's
name was changed to the Wyeth Union Savings Plan. Employees become eligible to
participate after they have completed one month of regular employment, as
defined in the Plan. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"), as amended, and the Internal
Revenue Code (the "Code").
Employee Contributions
- ----------------------
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. Participants direct
the investment of their contributions into various investment options offered by
the Plan. 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.
Employer Contributions
- ----------------------
In accordance with negotiated union agreements effective December 31, 1996, no
Company matching contributions are made by the Company.
Vesting and Separation From Service
- -----------------------------------
Participants are fully vested at all times in their salary deferral and
after-tax contributions and rollovers plus actual earnings thereon.
3
Distributions
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Participants are entitled to withdraw all or any portion of their employee
contributions and vested employer contributions, subject to certain
restrictions, as defined. 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 before that age. Participants may qualify for financial
hardship withdrawals if they have an immediate and heavy financial need, as
determined by the Wyeth Savings Plan Committee (the "Committee"). Participants
are limited to one hardship withdrawal in any calendar year, provided they have
no other funds that are readily available to meet that need.
Upon termination of employment, participants are entitled to a distribution of
their vested account balance in one of three ways: lump-sum, a 50% joint and
survivor annuity, or monthly payments up to 360 months (subject to limits
imposed by the Internal Revenue Code).
Annuity payments and monthly payments commence as soon as practicable following
a request, but in no event later than April 1 in the year following the year in
which the participant turns 70 1/2 years of age.
Loans
- -----
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 of
up to $50,000. Participants in the Plan may borrow up to fifty percent (50%) of
their vested account balances. All loans must be repaid within five years except
for those used to acquire or construct a principal residence, which must be
repaid within fifteen years. Defaults on participants' loans during the year are
treated as distributions 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.
NOTE 2 - ACCOUNTING POLICIES
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Basis of Accounting
- -------------------
The accompanying financial statements have been prepared on the accrual basis of
accounting.
Investment Valuation
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Shares of participation in the various Vanguard Trust Company ("Vanguard")
mutual funds are recorded at their published net asset values. The guaranteed
investment contracts comprising the Stable Value Fund are recorded at contract
value (cost plus accrued interest), which approximates fair market value.
Loans are valued at cost which does not differ materially from fair market
value.
Investment transactions are recorded on a trade date basis.
4
Contributions
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Contributions from employees are accrued when deducted from payroll.
Benefits
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Benefits are recorded when paid.
Administrative Costs
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Substantially all administrative expenses 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.
NOTE 3 - INVESTMENT ELECTIONS
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Participants can elect to invest amounts credited to their account in any of six
investment funds described below and transfer amounts between 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 six investment options during 2002 were as follows:
Stable Value Fund
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This fund traditionally invested in guaranteed investment contracts maturing
within five years, a Vanguard fixed income and money market mutual fund, and the
Vanguard Retirement Savings Trust ("RST"). The interest rate payable to Plan
participants in this fund will be a rate which reflects a blended rate of the
total investments made by the fund. The average blended yield and crediting
interest rate attributable to the fund approximated 5.27% and 4.17% for 2002 and
2001, respectively. On December 31, 2002, the Stable Value Fund closed.
Participant balances were transferred to the RST. On January 1, 2003, the RST
became an investment option available to Plan participants.
5
Vanguard Balanced Index Fund
- ----------------------------
This fund primarily invests in long-term corporate debt instruments, common
stocks, and U.S. government obligations.
Vanguard 500 Index Fund
- -----------------------
This fund primarily invests in common stocks of large public companies that seek
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.
Wyeth Common Stock Fund
- -----------------------
This fund consists primarily of Wyeth 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.
Vanguard Small-Cap Index Fund
- -----------------------------
This fund primarily invests in small capitalization stocks, those with a market
value of less than $1.5 billion, that seek to provide investment results that
correspond to the total return performance of the stocks of companies that make
up the Russell 2000 Index.
Vanguard Total International Stock Index Fund
- ---------------------------------------------
This fund invests in three Vanguard International Index Funds; a European Fund,
a Pacific Fund and an Emerging Markets Fund.
NOTE 4 - MANAGEMENT OF THE PLAN
----------------------
The Plan is administered by the Committee, which was appointed by the Board of
Directors of the Company. Vanguard was appointed by the Committee as Trustee,
recordkeeper, and custodian and is a party-in-interest to the Plan.
NOTE 5 - PLAN AMENDMENTS
---------------
The Plan was amended effective January 1, 2002 to comply with certain provisions
of the Economic Growth and Tax Relief Reconciliation Act of 2001.
6
NOTE 6 - RELATED-PARTY TRANSACTIONS
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Certain Plan investments are shares of mutual funds managed by Vanguard. As
stated in NOTE 4, Vanguard is the trustee of the Plan, and therefore these
transactions qualify as party-in-interest transactions.
NOTE 7 - FEDERAL INCOME TAX STATUS
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The Plan obtained its latest determination letter on March 3, 2003, in which the
Internal Revenue Service stated that the Plan, as designed and including
amendments through February 20, 2002, was in compliance with the applicable
requirements of the Code. However, the Plan administrator believes that the
Plan, as currently designed, is being operated in compliance with the applicable
requirements of the Code. Therefore, no provision for income taxes has been
made.
NOTE 8 - PLAN TERMINATION
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Although it has not expressed any intention to do so, the Company has the right
under the Plan to terminate or discontinue employee 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 accounts and are entitled to full distribution of such amounts.
NOTE 9 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
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The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500:
2002 2001
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Net Assets Available for Plan Benefits per
Financial Statements $48,581,780 $52,085,650
Amounts Allocated to Withdrawing Participanta (105,257) (9,462)
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Net Assets Available for Plan Benefits per
the Form 5500 $48,476,523 $52,076,188
7
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
December 31, 2002
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Benefits paid to participants per the financial
statements $3,900,820
Add: Amounts allocated to withdrawing participants
at December 31, 2002 105,257
Less: Amounts allocated to withdrawing
participants at December 31, 2001 (9,462)
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Benefits paid to participants per the Form 5500 $3,996,615
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
NOTE 10 - INVESTMENTS
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The fair 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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Vanguard Balanced Index Fund $6,092,106 $7,128,108
Vanguard 500 Index Fund $13,868,020 $17,946,065
Vanguard Retirement Savings Trust $26,041,767 --
Stable Value Fund -- $25,070,831
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
($5,399,569) as follows:
Mutual Funds ($5,197,064)
Wyeth Common Stock Fund (202,505)
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Total ($5,399,569)
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8
Schedule I
Wyeth Union Savings Plan
Schedule H Item 4i - Schedule of Assets (Held at End of Year)
As of December 31, 2002
Employer Identification Number - 13-2526821
Plan Number - 069
Identity of Issuer Description of Investment Cost** Current Value
- ------------------ ------------------------- ------ -------------
Collective Trust:
- -----------------
Vanguard Trust Company* Vanguard Retirement Savings Trust $26,041,767
Mutual Funds:
- -------------
Vanguard Trust Company* Vanguard Balanced Index Fund
389,271 shares $6,092,106
Vanguard Trust Company* Vanguard Total International Stock Index Fund
9,702 shares $74,905
Vanguard Trust Company* Vanguard 500 Index Fund
170,893 shares $13,868,020
Vanguard Trust Company* Vanguard Small-Cap Index Fund
22,229 shares $348,121
Wyeth* Common Stock
- ------
18,673 shares $698,370
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Total Investments Per
Statement of Net Assets
Available for Plan Benefits $47,123,289
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Loans to Plan Participants* Rates ranging from 5.25% to 10.5% $1,297,782
===========
Due through 2018
* Represents a party-in-interest to the Plan
** Cost not required for participant directed investments.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
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 Union Savings
Plan, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 26, 2003