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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, 2003
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 17, 2004
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 17, 2004
WYETH SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2003 AND 2002
TOGETHER WITH THE REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
EMPLOYER IDENTIFICATION NUMBER - 13-2526821
PLAN NUMBER - 045
WYETH SAVINGS PLAN
DECEMBER 31, 2003 AND 2002
INDEX
Page
----
Report of Independent Registered Public Accounting Firm
Statements of Net Assets Available for Plan Benefits
as of December 31, 2003 and 2002 1
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2003 2
Notes to Financial Statements 3 - 9
Supplemental Schedule:*
Item 4i - Schedule of Assets (Held at End of Year)
as of December 31, 2003 Schedule I
Consent of Independent Registered Public Accounting Firm
* 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 REGISTERED PUBLIC ACCOUNTING FIRM
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To the Participants and Administrator of
Wyeth Savings Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Wyeth Savings Plan (the "Plan") at December 31, 2003 and 2002, and the
changes in net assets available for benefits for the year ended December 31,
2003 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 the standards of the Public Company Accounting
Oversights Board (United States) and auditing standards generally accepted in
the United States of America. 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,
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 17, 2004
Wyeth Savings Plan
Statements of Net Assets Available for Plan Benefits
As of December 31, 2003 and 2002
December 31,
2003 2002
-------------- --------------
Assets:
Investments, at fair value $2,230,449,637 $1,755,485,074
Loans to participants 30,874,918 32,280,418
Receivables:
Employer contribution 1,618,507 1,672,944
Participant contribution 5,301,574 5,506,682
Dividends 14,938 --
Due from brokers for securities sold 1,251,583 --
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Total receivables 8,186,602 7,179,626
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Cash and cash equivalents 19,885,529 73,406,963
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Total Assets $2,289,396,686 $1,868,352,081
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Liabilities:
Due to brokers for securities purchased -- 3,398,777
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Net Assets Available for Plan Benefits $2,289,396,686 $1,864,953,304
============== ==============
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, 2003
Additions to net assets attributed to:
Investment Gain:
Net appreciation in fair value
of investments $282,497,764
Interest 36,723,122
Dividends 22,528,678
Demutualization Proceeds 703,530
--------------
Total investment gain 342,453,094
Contributions:
Employer 39,685,819
Participant 137,668,242
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Total contributions 177,354,061
Rollovers into Plan 61,564,330
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Total additions 581,371,485
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Deductions from net assets attributed to:
Benefits paid to participants 155,932,020
Transfers out of Plan 996,083
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Total deductions 156,928,103
--------------
Net additions 424,443,382
Net Assets Available for Plan Benefits:
Beginning of Year 1,864,953,304
--------------
End of Year $2,289,396,686
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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 contribution profit sharing plan, was approved and adopted
by the Board of Directors of Wyeth (the "Company") and became effective on April
1, 1985. 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 to be eligible
to participate 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
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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
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 from qualified plans of other
employers into the Plan, upon consent of the Plan administrator.
- 3 -
Vesting and Separation From Service
- -----------------------------------
Participants are fully vested at all times in their salary deferral
contributions, after-tax contributions and rollover contributions plus 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
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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 an employee's 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 2003, forfeitures of $1,944,538 were used to offset
Company matching contributions. As of December 31, 2003 and 2002, the amount of
forfeitures available to offset future Company matching contributions totaled
$423,317 and $308,207, 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. 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 elect to defer
the distribution of their accounts if the participant's account balance is
greater than $5,000.
- 4 -
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 of
up to $50,000. 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
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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
- --------------------
The Wyeth Common Stock Fund and common stocks are 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 -
The following table presents investments:
December 31,
2003 2002
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Investments at Fair Value as Determined by
Net Asset Value
Mutual Funds $1,049,103,200 $ 737,086,434
Investments at Contract Value
Investment Contracts 693,218,361 575,846,810
Investments at Fair Value as Determined by
Quoted Market Price
Common Stocks 488,128,076 442,551,830
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Total Investments $2,230,449,637 $1,755,485,074
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Cash and Cash Equivalents
- -------------------------
Cash equivalents consist primarily of commercial paper, fixed-term deposits and
other short-term, highly liquid securities with original maturities of three
months or less and are stated at cost. The carrying value of cash equivalents
approximates fair value due to their short-term, highly liquid nature.
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.
- 6 -
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 2003 and 2002:
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
fund also contains a money market/STIF component within the underlying
investments, for the purpose of providing liquidity for fund transfers
and other participant-directed activity. 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 5.13% for 2003 and 5.90% for 2002.
Wyeth Common Stock Fund - consists primarily of Company common stock
and a money market component for purposes of providing liquidity.
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 primarily in
income-producing 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.
- 7 -
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 - DEMUTUALIZATION
---------------
Principal Financial Group ("Principal") and Prudential Life Insurance Company
("Prudential"), custodians of terminated defined contribution plans of which
Wyeth is the successor both operated as mutual insurance companies. A mutual
insurance company is considered to be owned by policyholders whose insurance
contracts embody their rights as insureds and as members of the mutual insurance
company. In order to enhance their financial flexibility and to improve access
to capital markets, Principal and Prudential became stock companies. In
accordance with IRS and Department of Labor rulings, the proceeds of the
demutualization shares of Principal and Prudential are to be used for the
benefit of participants and offset a portion of the Company matching
contributions. At December 31, 2003, Principal and Prudential stocks held by the
Plan were valued at $580,643, and $122,887, respectively.
NOTE 6 - PLAN AMENDMENTS
---------------
The Plan was amended in 2003 for certain administrative reasons.
NOTE 7 - 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.
- 8 -
NOTE 8 - 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 9 - PLAN TERMINATION
----------------
Although it has not expressed any intention to do so, the Company reserves 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 10 - 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:
2003 2002
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Wyeth Common Stock Fund $487,424,546 $442,551,830
Fidelity Spartan U.S. Equity Index Fund $314,301,817 $235,478,355
Fidelity Magellan Fund $271,546,789 $205,407,763
Fidelity Balanced Fund $192,448,087 $139,210,068
Fidelity Low-Priced Stock Fund $140,113,576 $ 77,275,615*
* In 2003, the Fidelity Low-Priced Stock Fund exceeded 5% of the Plan's total
net assets, but in 2002 it was less than 5%.
During 2003, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$282,497,764 as follows:
Wyeth Common Stock $ 62,887,997
Mutual Funds 219,609,767
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Total $282,497,764
============
- 9 -
Schedule I
Wyeth Savings Plan
Schedule H Item 4i - Schedule of Assets (Held at End of Year)
As of December 31, 2003
Employer Identification Number - 13-2526821
Plan Number - 045
Identity of Issuer Description of Investment Cost** Current Value
- ------------------ ------------------------- ------ -------------
Investment Contracts:
- ---------------------
Bank of America Mutual Fund 5.14% $112,688,104
Wrapper Contract ($2,814,288)
Canada Life Insurance GIC 7.20% Due 9/15/05 $25,126,677
John Hancock Mutual Life Insurance GIC 6.05% Due 12/15/04 $20,412,580
Metropolitan Life Insurance GIC 4.24% Due 12/15/08 $37,577,667
GIC 4.15% Due 6/15/09 $20,631,388
Monumental Life Insurance GIC 3.56% Due 12/15/06 $18,662,250
GIC 6.22% Due 6/15/07 $12,473,978
New York Life Insurance GIC 7.10% Due 12/15/05 $19,843,255
GIC 3.00% Due 3/31/09 $35,567,294
Principal Mutual Life Insurance GIC 5.95% Due 3/15/07 $24,242,316
GIC 4.07% Due 12/17/07 $37,461,104
GIC 4.09% Due 12/15/09 $20,035,174
Travelers Insurance GIC 7.40% Due 3/15/05 $26,580,899
GIC 7.05% Due 6/15/05 $26,904,507
GIC 6.13% Due 3/31/08 $23,621,423
CDC Financial Products Collective Trust 4.96% $85,287,544
Wrapper Contract ($2,816,510)
Morgan Stanley Collective Trust 4.63% $16,256,345
SEI Financial Management Collective Trust 3.46% $53,222,586
State Street Bank and Trust Collective Trust 5.09% $85,542,369
Wrapper Contract ($3,288,301)
* 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, 2003
Employer Identification Number - 13-2526821
Plan Number - 045
Identity of Issuer Description of Investment Cost** Current Value
- ------------------ ------------------------- ------ -------------
Common Stocks:
- --------------
Wyeth* Common Stock
11,480,649 shares $487,424,546
Principal Financial Group Common Stock
17,558 shares $580,643
Prudential Financial Inc. Common Stock
2,942 shares $122,887
Mutual Funds:
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Fidelity Management Trust Company* Magellan Fund
2,778,256 shares $271,546,789
Fidelity Management Trust Company* Balanced Fund
11,489,438 shares $192,448,087
Fidelity Management Trust Company* International Growth & Income Fund
4,080,910 shares $97,615,359
Fidelity Management Trust Company* Spartan U.S. Equity Index Fund
7,975,179 shares $314,301,817
Fidelity Management Trust Company* Low-Priced Stock Fund
4,005,534 shares $140,113,576
Morgan Stanley MSIFT Value Portfolio - Adviser Class
2,143,718 shares $33,077,572
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Total Investments per Statement
of Net Assets Available for Plan Benefits $2,230,449,637
==============
Loans to Plan Participants* Rates ranging from 5.0% to 10.5%
Due through 2019 $30,874,918
==============
* Represents a party-in-interest to the Plan.
**Cost not required for participant directed investments.
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (Nos. 33-45324, 33-57339, 333-108312, 333-111093, and
333-112450), 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 17, 2004 relating to the financial statements
of the Wyeth Savings Plan, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 17, 2004