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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
(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
---------------------------------
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 SAVINGS PLAN
By: /s/ Jack M. O'Connor
----------------------------
Jack M. O'Connor
Member of the Wyeth
Savings Plan Committee
Date: June 26, 2003
WYETH 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 - 045
WYETH SAVINGS PLAN
DECEMBER 31, 2002 AND 2001
INDEX
Page
----
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
----------------------------------------
To the Participants and Administrator of
Wyeth 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 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 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
Statements of Net Assets Available for Plan Benefits
As of December 31, 2002 and 2001
December 31,
2002 2001
-------------- --------------
Assets:
Investments, at fair value $1,755,485,074 $2,048,266,624
Loans to participants 32,280,418 32,008,419
Receivables:
Employer contribution 1,672,944 1,508,635
Participant contribution 5,506,682 4,974,066
Due from brokers for securities sold -- 2,518,653
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Total receivables 7,179,626 9,001,354
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Cash and cash equivalents 73,406,963 84,524,298
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Total Assets $1,868,352,081 $2,173,800,695
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Liabilities:
Due to brokers for securities purchased 3,398,777 2,545,302
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Net Assets Available for Plan Benefits $1,864,953,304 $2,171,255,393
============== ==============
The accompanying notes to financial statements are an integral part of these
statements.
-1-
Wyeth 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 ($461,551,913)
Interest 36,362,559
Dividends 22,025,091
--------------
Total investment loss (403,164,263)
Contributions:
Employer 43,272,247
Participant 148,341,418
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Total contributions 191,613,665
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Rollovers into Plan 21,351,173
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Total reductions (190,199,425)
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Deductions from net assets attributed to:
Benefits paid to participants 116,102,664
--------------
Net deductions (306,302,089)
Net Assets Available for Plan Benefits
Beginning of Year 2,171,255,393
--------------
End of Year $1,864,953,304
==============
The accompanying notes to financial statements are an integral part of this
statement.
-2-
WYETH SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - PLAN DESCRIPTION
----------------
The following description of the Wyeth 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 profit sharing contribution plan, was approved and adopted
by the Board of Directors of Wyeth (the "Company") and became effective on April
1, 1985. Effective March 11, 2002, the Company changed its name to Wyeth, and
accordingly, the Plan's name was changed to the Wyeth Savings Plan. Full-time
(U.S. paid) employees of the U.S. Company and its participating U.S.
subsidiaries who 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 (U.S. paid) 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 qualified under the Internal Revenue Code (the "Code").
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. 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
Code, salary deferral contributions, total annual contributions, and the amount
of compensation that can be included for Plan purposes are subject to annual
limitations.
Rollovers into Plan
- -------------------
Participants may elect to rollover their balances into the Plan from qualified
plans of other employers, upon consent of the Plan administrator.
-3-
Vesting and Separation From Service
- -----------------------------------
Participants are fully vested at all times in their salary deferral, after-tax
contributions and rollovers 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 the Company
matching contributions according to the following schedule:
Vesting
Years of Continuous Service Percentage
--------------------------- ----------
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 $1,243,846 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 $308,207 and $47,385,
respectively.
Distributions
- -------------
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. 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 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 accounts if the participant's account balance is greater
than $5,000.
-4-
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.
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.
NOTE 2 - ACCOUNTING POLICIES
-------------------
Basis of Accounting
- -------------------
The accompanying financial statements are prepared on the accrual basis of
accounting.
Contributions
- -------------
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
- --------
Benefits are recorded when paid.
Investment Valuation
- --------------------
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 the Fidelity Management Trust
Company (the "Trustee") 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.
-5-
Administrative Costs
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All costs and expenses of administering the Plan are paid by the Company.
Risks and Uncertainties
- -----------------------
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
- ----------------
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.
Reclassification
- ----------------
Certain reclassifications have been made to the December 31, 2001 financial
statements to conform to the December 31, 2002 presentation.
NOTE 3 - INVESTMENT ELECTIONS
--------------------
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 guaranteed 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. There
are also several collective trusts and wrapper contracts (the purpose of
the wrapper contracts is to provide market and cash flow risk protection
to the Plan by maintaining the stable value of the investment and ensuring
the desired targeted return) in the fund. The investment contracts
underlying the Interest Income Fund 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 rates attributable to these contracts
approximated 5.90% for 2002 and 6.48% for 2001.
-6-
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 that invests 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.
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. Fidelity Management Trust Company 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. The Plan was
also amended in 2002 for certain administrative enhancements.
-7-
NOTE 6 - FEDERAL INCOME TAX STATUS
-------------------------
The Plan obtained its latest determination letter on March 3, 2003, in which the
Internal Revenue Service stated that the Plan, as amended effective February 20,
2002, was in compliance with the applicable requirements of the Code. The Plan
has been amended since receiving the determination letter. 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 7 - RELATED-PARTY TRANSACTIONS
--------------------------
Certain Plan investments are shares of mutual funds managed by Fidelity
Management Trust Company. As stated in NOTE 4, Fidelity Management Trust Company
is the Trustee and therefore, these transactions qualify as party-in-interest
transactions.
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
-----------
The fair market value of individual investments that represent 5% or more of the
Plan's total net assets are as follows:
2002 2001
---- ----
Wyeth Common Stock Fund $442,551,830 $665,657,464
Fidelity Spartan U.S. Equity Index Fund $235,478,355 $308,313,690
Fidelity Magellan Fund $205,407,763 $264,432,062
Fidelity Balanced Fund $139,210,068 $149,831,361
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
($461,551,913) as follows:
Wyeth Common Stock Fund ($287,973,337)
Mutual Funds (173,578,576)
-------------
Total ($461,551,913)
=============
-8-
Schedule I
Wyeth 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 - 045
Identity of Issuer Description of Investment Cost** Current Value
- ------------------ ------------------------- ------ -------------
Investment Contracts:
- ---------------------
Bank of America Mutual Fund $82,712,496
Wrapper Contract ($2,694,438)
Canada Life Insurance GIC 7.20% Due 9/15/05 $23,439,065
John Hancock Mutual Life Insurance GIC 6.05% Due 12/15/04 $19,248,072
Massachussetts Mutual Life Insurance GIC 6.82% Due 9/15/03 $18,818,308
Metropolitan Life Insurance GIC 4.24% Due 12/15/08 $36,049,182
Monumental Life Insurance GIC 6.56% Due 6/16/03 $26,699,099
GIC 3.56% Due 12/15/06 $18,020,713
GIC 6.22% Due 6/15/07 $11,743,531
New York Life Insurance GIC 7.10% Due 12/15/05 $36,958,458
Principal Mutual Life Insurance GIC 5.95% Due 3/15/07 $22,883,475
Travelers Insurance GIC 7.40% Due 3/15/05 $24,749,441
GIC 7.05% Due 6/15/05 $25,132,655
GIC 6.13% Due 3/31/08 $22,257,065
CDC Financial Products Collective Trust 5.24% $69,335,020
Wrapper Contract ($3,486,721)
Morgan Stanley Collective Trust 4.78% $10,568,299
SEI Financial Management Collective Trust 5.02% $62,056,049
State Street Bank and Trust Collective Trust 5.25% $75,429,367
Wrapper Contract ($4,072,326)
* Represents a Party-in-interest to the Plan.
**Cost not required for participant directed investments.
Schedule I
(Continued)
Wyeth 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 - 045
Identity of Issuer Description of Investment Cost** Current Value
- ------------------ ------------------------- ------ -------------
Wyeth* Common Stock
- ------
11,830,984 shares $442,551,830
Mutual Funds:
- -------------
Fidelity Management Trust Company* Magellan Fund
2,601,415 shares $205,407,763
Fidelity Management Trust Company* Balanced Fund
10,474,798 shares $139,210,068
Fidelity Management Trust Company* International Growth & Income Fund
3,533,636 shares $59,435,761
Fidelity Management Trust Company* Spartan U.S. Equity Index Fund
7,559,498 shares $235,478,355
Fidelity Management Trust Company* Low-Priced Stock Fund
3,070,148 shares $77,275,615
Morgan Stanley Investments, LLP. MSIFT Value Portfolio - Adviser Class
1,742,171 shares $20,278,872
--------------
Total Investments per Statement
of Net Assets Available for Plan Benefits $1,755,485,074
==============
Loans to Plan Participants* Rates ranging from 5.25% to 10.5%
Due through 2018 $32,280,418
==============
* 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 Savings Plan, which
appears in this Form 11-K.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 26, 2003