Wyeth · 8-K · For 3/13/02 · EX-13

Filed On 3/13/02   ·   SEC File 1-01225   ·   Accession Number 5187-2-3

Current Report   ·   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         3      8K 
 2: EX-13       Annual or Quarterly Report to Security Holders        68    418K 

EX-13   ·   Annual or Quarterly Report to Security Holders
Exhibit Table of Contents

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HIGHLIGHTS                                                                      

Years Ended December 31,                                                        
(In thousands except per share amounts)                                         

                                                                [Download Table]

                                                        2001               2000 
                                                                                
Net Revenue                                      $14,128,514        $13,213,671 

Income from Continuing Operations                                               
before Unusual Items*                              2,900,294          2,514,004 

Diluted Earnings per Share                                                      
before Unusual Items*                                   2.18               1.90 

Income (Loss) from Continuing Operations           2,285,294           (901,040)

Diluted Earnings (Loss) per Share from                                          
Continuing Operations                                   1.72              (0.69)

Dividends per Common Share                              0.92               0.92 

Total Assets                                      22,967,922         21,092,466 

Stockholders' Equity                               4,072,573          2,818,093 

                                                                [Download Table]

Contents                                                    
                                                            
Message to Stockholders                                    2

Strong Product Growth... for Today and Tomorrow            7

Wyeth's Pipeline for Growth                               28

Principal Products                                        30

Financial Review                                          31

Directors and Officers                                    67

Corporate Data                                            68

Mission, Vision and Values                               IBC

*For identification of each specific unusual item occurring in 2001 and 2000,   
refer to "2001, 2000 and 1999 Unusual Transactions" on page 60 within           
Management's Discussion and Analysis of Financial Condition and Results of      
Operations.                                                                     

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[PICTURE OF ROBERT ESSNER]                                                      
Robert Essner, President and Chief Executive Officer                            

MESSAGE TO STOCKHOLDERS                                                         

The change of our corporate name to Wyeth on March 11, 2002 clearly 
  signals the emergence of American Home Products Corporation (AHP) as a
top-tier global pharmaceutical company.                             

  Our outstanding results in 2001 - the year in which AHP celebrated its
    75th anniversary - reflect the strength of the Company and its products.
      Worldwide net revenue increased by 7 percent to more than $14 billion, and
   income from continuing operations - excluding unusual items detailed in
      the financial section of this report - grew by 15 percent for the year, to
$2.9 billion, the highest operating earnings in our history.        

  To maintain that momentum, we are intensifying our focus on innovative
first- and best-in-class medicines while making major investments in
   manufacturing and quality assurance across our global supply chain. Our
 employees are united in a common mission with shared values that will
 allow us to achieve an ambitious vision: to be recognized as the best
pharmaceutical company in the world.                                

   We foresee robust, long-term growth for Wyeth because the Company has a
unique combination of strategic assets that set us apart from our   
competitors:                                                        

-     STRONG FOUNDATION PRODUCTS - Our current product portfolio includes the   
 PREMARIN family of hormone replacement therapy (HRT) products - which
      became Wyeth's first $2 billion product line in 2001 - and EFFEXOR/EFFEXOR
      XR, our novel antidepressant, which reached $1.5 billion in sales in 2001.
    We also have some of the world's best-known consumer health care brands,
including ADVIL, CENTRUM and ROBITUSSIN.                            

-     SUCCESSFUL NEW PRODUCTS - In the last three years, Wyeth has launched nine
new products, and three of these have been among the most successful
prescription medication launches of all time: ENBREL, PREVNAR and   
    PROTONIX. These three products together produced sales of more than $2.2
      billion in 2001, and each has the potential to exceed $1 billion in annual
sales in the near future. Two important new products - FLUMIST, an  
   innovative intranasal influenza vaccine, and rhBMP-2, a locally applied
  recombinant protein therapy that induces bone growth - are expected to
reach the market during 2002.                                       

-     FAVORABLE PATENT SITUATION - With the success of our new products, Wyeth  
     has one of the lowest exposures to near-term patent expiration of all the
   major pharmaceutical companies, a tremendous competitive advantage. Our
    broad-based portfolio also means that our growth is not dependent on the
success or patent life of one or two products.                      

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-     ROBUST PIPELINE - We have built an impressive new product pipeline across 
    a wide range of therapeutic areas that address significant unmet medical
needs. We expect this pipeline to yield several new first- or       
best-in-class products by 2004-2005.                                

-     UNIQUE R&D TECHNOLOGY BASE - Wyeth is one of a select few major           
      pharmaceutical companies with significant research programs, manufacturing
 capabilities and marketed products in three discovery and development
     platforms: small molecules, proteins and vaccines. We also are one of the
world's largest biotechnology companies. This breadth of expertise  
provides unique research synergies and fuels our ability to explore 
multiple paths in the search for new therapies.                     

      All of these assets are driven by our most important resource: the talent,
  commitment and experience of our more than 52,000 employees around the
world.                                                              

RESULTS OF OPERATIONS                                               

     Wyeth's worldwide net revenue for 2001 grew to $14.1 billion, an increase
of 7 percent over 2000 net revenue. Excluding the negative impact of
  foreign exchange, worldwide net revenue increased by 9 percent for the
    year. Income and diluted earnings per share from continuing operations -
     including unusual items - were $2.3 billion and $1.72, respectively. This
      compares with a loss and diluted loss per share from continuing operations
of $901 million and $0.69, respectively, in 2000.                   

 The 2000 results included a $7.5 billion charge related to litigation
involving the diet drugs REDUX and PONDIMIN. In 2001, we took an    
      additional diet drug litigation charge of $950 million to cover additional
anticipated funding requirements for the nationwide, class action   
   settlement and other estimated costs associated with the litigation. On
      January 3, 2002, as a result of the completion of the appeals process, the
    class action settlement regarding the diet drugs received final judicial
approval.                                                           

    Excluding these and other unusual items from the 2001 and 2000 results -
   and including the dilutive effect of common stock equivalents in 2000 -
income and diluted                                                  

    Income from continuing operations grew by 15 percent for the year.

[PICTURE OF JOHN R. STAFFORD]                                       
John R. Stafford, Chairman of the Board                             

Pharmaceutical Net Revenue                                          
($ in millions)                                                     

[PLOT POINTS TO COME]                                               

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  earnings per share from continuing operations for 2001 increased by 15
percent to $2.9 billion and $2.18, respectively, compared with $2.5 
billion and $1.90, respectively, in 2000.                           

     In December 2001, Amgen Inc. and Immunex Corporation announced that Amgen
would acquire Immunex, a company in which Wyeth is the largest      
shareholder. Wyeth and Immunex co-promote ENBREL - the breakthrough 
     treatment for rheumatoid arthritis - in North America. Wyeth supports the
     acquisition and has agreed to vote its shares in favor of the transaction
      because we believe it will benefit the future growth of ENBREL. Wyeth will
   continue to co-promote ENBREL in North America, and we retain exclusive
international rights to the product.                                

WYETH PHARMACEUTICALS                                               

Wyeth's prescription pharmaceutical business, now called Wyeth      
     Pharmaceuticals, enjoyed strong growth in 2001. Worldwide net revenue for
human pharmaceuticals increased by 10 percent for the year to $10.9 
    billion. Excluding the negative impact of foreign exchange, the increase
was 12 percent for the year.                                        

      Sales of the PREMARIN family of HRT products continued to grow, surpassing
    $2 billion in worldwide sales in 2001, an increase of 11 percent for the
year. EFFEXOR/EFFEXOR XR reached $1.5 billion in worldwide sales for
2001 - a 33 percent increase over 2000 - with the addition of a new 
 indication in the United States for use in preventing the relapse and
recurrence of depression.                                           

  ENBREL achieved sales of $856 million - an increase of 24 percent over
 2000. In January 2002, ENBREL received a new indication in the United
States for the treatment of psoriatic arthritis, making it the first
     therapy approved for this painful condition. Wyeth also is investing more
 than $1 billion to increase ENBREL production capacity for the global
market.                                                             

PREVNAR, Wyeth's vaccine for the prevention of invasive pneumococcal
 disease, is the most successful vaccine ever launched. It has reached
nearly 95 percent of all eligible infants and toddlers in the United
      States after less than two years on the market. Sales of PREVNAR, launched
  in the first quarter of 2000, increased by 73 percent to $798 million.

    Wyeth's proton pump inhibitor (PPI), PROTONIX - licensed from Byk Gulden
      for marketing in the United States - more than tripled its 2000 U.S. sales
  to $561 million for 2001. It is the only PPI approved in both oral and
    intravenous formulations for gastroesophageal reflux disease in the U.S.
market.                                                             

 Other prescription pharmaceutical products with strong growth in 2001
      included CORDARONE I.V. (an anti-arrhythmic); ZOSYN/TAZOCIN (an injectable
     antibiotic); ALTACE (an angiotensin-converting-enzyme inhibitor); and our
recombinant therapies for hemophilia A and B, REFACTO and BENEFIX,  
respectively.                                                       

PREMARIN products exceeded $2 billion in global sales in 2001.      

WYETH CONSUMER HEALTHCARE                                           

     Wyeth Consumer Healthcare - the new name of our non-prescription consumer
  health care products division - recorded $2.4 billion in worldwide net
sales, a slight decrease versus 2000.                               

Research and Development Expenditures                               
($ in millions)                                                     

[PLOT POINTS TO COME]                                               

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    ADVIL, CENTRUM, CALTRATE and CHAP STICK experienced growth for the year,
      while sales of cough/cold/allergy products such as ROBITUSSIN and DIMETAPP
decreased.                                                          

    The division's brands remain some of the strongest and best known in the
world: Nine of our consumer products rank number one or two in their
    categories in the United States, and three of our global brands - ADVIL,
     CENTRUM and ROBITUSSIN - are among the top 12 consumer health care brands
worldwide.                                                          

FORT DODGE ANIMAL HEALTH                                            

The Fort Dodge Animal Health Division - whose name remains unchanged
    because it is highly recognized in its field and closely associated with
     its products - recorded worldwide net sales of $776 million, a decline of
2 percent for 2001. This was primarily due to a general weakening in
   livestock markets globally and continuing concerns about foot-and-mouth
     and mad cow diseases. However, Fort Dodge introduced an innovative canine
     heartworm preventative in the United States in 2001 that rapidly achieved
      robust sales. The new treatment, called PROHEART 6, provides six months of
protection from heartworm infection with a single injectable dose.  

INVESTING IN THE FUTURE                                             

    Wyeth continues to make substantial investments to support the Company's
    growth. Our research and development expenditures in 2001 totaled nearly
    $1.9 billion, and we expect that amount to exceed $2 billion in 2002. In
 addition, we are in the second year of a five-year capital investment
    initiative to expand our biopharmaceutical manufacturing capabilities in
the United States, and we are building a new $1.5 billion           
 biopharmaceutical development and manufacturing facility near Dublin,
      Ireland. We expect our total capital spending in the five-year period from
2001 through 2005 to reach $7 billion, the majority of which is for 
   increased production capacity - a clear indication of our confidence in
the future.                                                         

    In 2002, we will invest more than $300 million to support our number one
    operating objective - to make sure that our manufacturing and operations
     maintain high quality standards. Prior to our entry into a consent decree
with the U.S. Food and Drug Administration - focusing on Wyeth's    
compliance with current Good Manufacturing Practices - we began a   
companywide initiative to address these issues. Our efforts include 
      strengthening sustainable compliance by taking a more focused and rigorous
 approach to the creation and standardization of robust procedures and
    systems across our global supply chain and distribution network. Quality
     and sustainable compliance will continue to be the highest priorities for
Wyeth in the years ahead.                                           

    Our research and development expenditures in 2001 totaled nearly
$1.9 billion.                                               

    It is with great sadness that we note the passing of William F. Laporte,
Director Emeritus and former Chairman and President of American Home
    Products, in September 2001. Mr. Laporte was a tireless leader who spent
      his entire 63-year business career at AHP. He was instrumental in building
the Company into the global pharmaceutical leader it is today.      

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INSIDE WYETH                                                        

On May 1, 2001, Robert Essner, President of Wyeth, was elected Chief
      Executive Officer of the Company. John R. Stafford remains Chairman of the
    Board. In June 2001, Lawrence V. Stein was elected Senior Vice President
and Deputy General Counsel, and Jeffrey S. Sherman was elected Vice 
   President and Associate General Counsel. In February 2002, Ulf Wiinberg
    was appointed President of Wyeth Consumer Healthcare, and in March 2002,
Mary Katherine Wold was elected Vice President - Taxes.             

     In addition, two corporate officers retired in the past 12 months: Thomas
  G. Cavanagh, Vice President - Investor Relations, in March 2001, after
 more than 31 years of service to the Company; and Thomas M. Nee, Vice
     President - Taxes, after more than 15 years of service, in February 2002.
We thank these individuals for their valuable contributions.        

A BRIGHT FUTURE                                                     

      With the strategic assets that we have in place and the investments we are
     making for the future, Wyeth's growth potential has never been better. We
    remain confident that we will deliver strong results in 2002 and beyond.

      Our product portfolio is the most robust it has ever been. In 1997, we had
  a single billion-dollar franchise: PREMARIN. Just five years later, in
      2002, we expect to have two $2 billion franchises - PREMARIN and EFFEXOR -
      and two additional billion-dollar products, ENBREL and PREVNAR, which were
not even on the market in 1997. We have one of the lowest           
patent-expiration exposures in the industry. In addition, we have   
  unmatched research and development capabilities across the spectrum of
small molecules, proteins and vaccines.                             

      In the near future, Wyeth expects to be the largest vaccine company in the
world. We already are one of the largest global manufacturers of    
      biopharmaceutical products. Furthermore, with our broad and deep pipeline,
     we expect to introduce new products in 2004 and 2005 that will keep Wyeth
in the lead as an innovator of first- or best-in-class medicines.   

  We have the right people and the right business strategies in place to
   realize this enormous potential. By working toward a common mission and
   operating according to our values, we will achieve Wyeth's vision to be
the world's best pharmaceutical company.                            

 Given the events of 2001 that touched all of us, we want to thank our
     employees for their continued dedication and commitment to the success of
    the Company. We are particularly proud of the thousands of employees who
      contributed their time, effort and money to help the victims, families and
      rescue workers affected by the September 11 tragedy. It is the strength of
all of us, working together to move ahead, that will create a bright
    future. As we work, we have the satisfaction of knowing that our efforts
 are producing medicines that make a difference in the lives of people
around the world, every day.                                        

    Wyeth's vision is to be the world's best pharmaceutical company.

/s/ Robert Essner                                                   
Robert Essner, President and                                        
Chief Executive Officer                                             

/s/ John R. Stafford                                                
John R. Stafford, Chairman                                          
of the Board                                                        

March 11, 2002                                                      

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STRONG PRODUCT GROWTH ...                                                       
FOR TODAY AND TOMORROW                                                          

Outstanding brands, exciting new products and a rich research pipeline will     
drive Wyeth's growth.                                                           

[Photo] 

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Wyeth's product portfolio, with major brands such as PREMARIN, EFFEXOR XR,      
PREVNAR, ENBREL, PROTONIX, ADVIL and CENTRUM, is improving the quality of life  
for millions of people around the world. These foundation products are expected 
to produce strong sales growth over the next few years. During 2002, we         
anticipate that FLUMIST and rhBMP-2 will join our product lineup, with the      
potential to benefit millions of additional patients.                           

Wyeth also has one of the broadest and deepest new product pipelines in the     
pharmaceutical industry. Our scientists currently are exploring more than 60 new
therapies targeting significant medical conditions such as diabetes, breast     
cancer, multiple sclerosis, HIV, Alzheimer's disease and schizophrenia. Equally 
important, Wyeth's research and development efforts have the unique capability  
to take multiple paths toward discovering novel therapies.                      

This combination of strong existing products, promising research projects and   
wide-ranging scientific resources should continue to drive Wyeth's growth while 
addressing some of the world's most important medical needs.                    

Photo Caption:                                                                  
"I started taking PREMARIN after a hysterectomy, and it made an immediate       
difference in getting me back to normal. Now, more than 15 years later, I       
continue to lead an active life. I enjoy long-distance swimming, and I'm also a 
dancer. There's nothing I want to do that I can't do, and I credit PREMARIN for 
that."                                                                          

Marianne Anthe                                                                  
Philadelphia, Pennsylvania                                                      

Callout:                                                                        
More than 11 million women used a PREMARIN product last year for menopausal     
symptoms and osteoporosis.                                                      

PREMARIN: 60 YEARS AND GROWING                                                  
Sales of the PREMARIN family of products increased by 11 percent in 2001, and   
PREMARIN became the first Wyeth brand to surpass $2 billion in annual sales. In 
the United States alone, more than 11 million women used a PREMARIN product last
year for relief of menopausal symptoms and for osteoporosis prevention. The     
continuing popularity of PREMARIN is particularly remarkable for a brand that   
will celebrate 60 years on the market in 2002.                                  

To maintain this impressive legacy, Wyeth continues to enhance its hormone      
replacement therapy (HRT) franchise. We have filed regulatory submissions for   
lower dose formulations of PREMARIN and PREMARIN/MPA for the relief of vasomotor
symptoms related to menopause, as well as for the prevention of postmenopausal  
osteoporosis. We anticipate final regulatory approval for these low-dose        
products by the end of 2002.                                                    

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Additionally, in the second half of 2002, a New Drug Application (NDA) will be  
filed for an HRT product that combines PREMARIN with trimegestone, a novel      
progestin.                                                                      

While HRT is well-accepted by women in the United States, with about 30 percent 
to 35 percent of eligible women taking advantage of this therapy, the number of 
women using HRT in other parts of the developed world ranges from 20 percent to 
less than 5 percent. Wyeth is continuing its efforts to bring the benefits of   
HRT to millions of additional women worldwide through educational programs, new 
products and, in the case of Japan, local clinical trials.                      

EFFEXOR: TREATING A GLOBAL HEALTH PROBLEM                                       
Since its launch in 1994, EFFEXOR has helped millions of patients transform the 
despair of depression and generalized anxiety disorder (GAD) into the joy of    
everyday living. According to the World Health Organization, major depressive   
disorder affects an estimated 120 million people worldwide - making it the      
world's fourth greatest public health problem.                                  

Photo Caption:                                                                  
"I was always worried, even about the smallest things. EFFEXOR XR has helped    
reduce my anxiety so I can be `me' again. My family relationships have improved,
especially with my three boys. I'm more fun and productive, and I'm better able 
to deal with the worries of being a parent. EFFEXOR XR has restored me to the   
person I really am."                                                            

Elizabeth Duthie,  with son Kevin                                               
Oyster Bay, New York                                                            

Callout:                                                                        
EFFEXOR XR helps transform the despair of depression into the joy of everyday   
living.                                                                         

In 2001, EFFEXOR and EFFEXOR XR reached $1.5 billion in annual worldwide sales -
an increase of 33 percent over 2000. Momentum for EFFEXOR continues to build    
with the addition of new indications as well as its approval in dozens of       
countries for depression and GAD. EFFEXOR XR was approved by the U.S. Food and  
Drug Administration (FDA) in May 2001 for use in preventing the relapse and     
recurrence of depression. Also in 2001, Wyeth filed a supplemental NDA in the   
United States and Canada for the use of EFFEXOR XR in social anxiety disorder.  
Approval for this indication is expected before the end of 2002. Phase III      
clinical trials are under way to evaluate EFFEXOR XR for the treatment of panic 
disorder and for depression and GAD in pediatrics.                              

EFFEXOR/EFFEXOR XR is expected to maintain its strong growth performance over   
the next few years and is targeted to reach sales of $3 billion by the end of   
2004.                                                                           

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PREVNAR: REDUCING CHILDHOOD ILLNESSES                                           
PREVNAR is Wyeth's innovative 7-valent vaccine for the prevention of invasive   
pneumococcal disease, a major source of serious childhood illness. It is the    
most successful vaccine product ever launched, achieving cumulative sales of    
almost $1 billion in its first 18 months on the market. Sales in 2001 totaled   
nearly $800 million - up by 73 percent over 2000. More important, millions of   
infants and children have been vaccinated with PREVNAR, with immunization       
compliance rates reaching as high as 95 percent for all eligible infants and    
toddlers in the United States.                                                  

Callout:                                                                        
PREVNAR is preventing thousands of cases of serious pneumococcal disease in     
infants and children.                                                           

Photo Caption:                                                                  
As a mother, you want to do everything you can to make sure your baby is happy  
and healthy. When Alexa's doctor recommended PREVNAR, I saw it as an essential  
ingredient to ensure her continued well-being. Now I have the peace of mind of  
knowing that my daughter is protected against many serious childhood illnesses."

Elva Gomez, and daughter Alexa                                                  
Mountain View, California                                                       

Post-marketing studies show that PREVNAR has reduced the incidence of invasive  
pneumococcal disease caused by the seven serotypes contained in the vaccine by  
87 percent in infants under one year of age. The widespread use of PREVNAR in   
the United States has made a major impact in helping prevent an estimated 17,000
cases of invasive pneumococcal disease that occurred every year prior to the    
introduction of the vaccine. These invasive diseases, which can be associated   
with significant morbidity and mortality, include bacteremia, septicemia,       
bacteremic pneumonia and meningitis. The vaccine also has been approved in more 
than 45 other countries. Negotiations are under way in many of those countries  
concerning immunization recommendations and reimbursements, and we expect       
international use of the vaccine to grow significantly over the next few years. 

The PREVNAR story is far from over. Wyeth has a vaccine in Phase III clinical   
trials that combines a 9-valent version of the pneumococcal vaccine with        
MENINGITEC - Wyeth's successful meningococcal Group C vaccine. Research also is 
under way to study the use of a pneumococcal vaccine in high-risk adults and to 
expand the vaccine to include serotypes that are more prevalent in the          
developing world, where invasive pneumococcal disease kills an estimated 1.2    
million young children annually.                                                

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ENBREL: A BREAKTHROUGH FOR RHEUMATOID ARTHRITIS                                 

Since its introduction in 1998, ENBREL has been used by more than 100,000       
patients to relieve the symptoms of moderate to severe rheumatoid arthritis     
(RA), for inhibiting the progression of structural damage in the joints of early
stage RA patients and for treating juvenile RA. ENBREL achieved sales of $856   
million in 2001, a 24 percent increase over 2000. Wyeth co-promotes ENBREL in   
North America with Immunex Corporation and has exclusive international rights to
the product.                                                                    

Photo Caption:                                                                  
"I can remember times when I was hardly able to move because of my rheumatoid   
arthritis. I was physically and mentally drained. After I started using ENBREL, 
I felt like I had been reawakened. I began zipping around like a young man. Now 
I'm able to accomplish so much that I was missing out on, like painting. I feel 
terrific."                                                                      

George Beach                                                                    
Philadelphia, Pennsylvania                                                      

Callout:                                                                        
ENBREL helps control pain, swelling and other RA symptoms, allowing patients to 
lead active and productive lives.                                               

It is estimated that more than 6 million people are afflicted with rheumatoid   
arthritis worldwide. Additionally, 2 million people have a related condition    
called psoriatic arthritis - a painful chronic inflammatory disease             
characterized by both joint and skin manifestations. In January 2002, the FDA   
approved ENBREL for the treatment of psoriatic arthritis - the first therapy    
specifically approved to reduce the signs and symptoms of this condition. A     
regulatory submission for psoriatic arthritis in Europe was filed in late 2001. 
ENBREL currently is undergoing Phase II clinical trials in Europe as a treatment
for psoriasis. Additionally, in February 2002, ENBREL received European         
Commission approval for the treatment of early RA.                              

To meet the growing demand for this breakthrough biopharmaceutical therapy,     
Wyeth is investing more than $1 billion to increase production capacity at      
facilities in the United States and Ireland. These investments ultimately will  
create the capacity to support $4 billion in annual ENBREL sales. Commercial    
production from the expanded U.S. facility, located in West Greenwich, Rhode    
Island, should begin in the second half of 2002, which will substantially       
increase the availability of ENBREL for new patients.                           

PROTONIX: GROWING RELIEF FOR GERD                                               
PROTONIX, Wyeth's proton pump inhibitor for the treatment of gastroesophageal   
reflux disease (GERD), continued its strong growth in 2001. Licensed from Byk   
Gulden for marketing in the United States, PROTONIX                             

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achieved sales of $561 million in just its second year on the U.S. market -     
almost four times its 2000 sales. With FDA approval of PROTONIX I.V. in March   
2001, it also is the first and only proton pump inhibitor to be approved in both
oral and intravenous formulations for GERD - a condition caused by the chronic  
reflux, or backup, of stomach acid into the esophagus that can cause significant
tissue damage if left untreated.                                                

Wyeth continued to extend the product's treatment profile with the approval of  
PROTONIX tablets in June 2001 for the maintenance of healing erosive esophagitis
and the reduction in relapse rates of heartburn symptoms in patients with GERD. 
In addition, PROTONIX I.V. received approval for the treatment of pathological  
hypersecretion associated with Zollinger-Ellison Syndrome (ZES), which is       
characterized by chronic peptic ulcers caused by an oversecretion of stomach    
acid. Wyeth also submitted a supplemental NDA for PROTONIX tablets for treating 
ZES and is researching pediatric applications for PROTONIX.                     

Photo caption:                                                                  
"Since my doctor switched me to PROTONIX, I don't have the lingering acidity    
problems I had with other medications. In fact, I don't really think about my   
condition anymore. That's a big difference for me. I enjoy cooking, and now I   
don't have to adjust or eliminate seasonings in my favorite dishes. I can eat   
whatever I like."                                                               

William Abrams                                                                  
Maple Shade, New Jersey                                                         

Callout:                                                                        
PROTONIX provides effective relief for gastroesophageal reflux disease.         

OTHER GROWING PRODUCTS                                                          
While PREMARIN, EFFEXOR, PREVNAR, ENBREL and PROTONIX were major drivers of     
growth for Wyeth's prescription pharmaceutical business in 2001, a number of    
other products achieved significant results during the year, including:         

- CORDARONE I.V., an antiarrhythmic medication, continued to experience steady  
growth following the presentation of a major study demonstrating its superiority
for treating life-threatening arrhythmias. CORDARONE I.V. sales increased 31    
percent in 2001, to $244 million.                                               

- ZOSYN/TAZOCIN, a broad spectrum injectable antibiotic that is effective       
against serious infections, attained $427 million in sales - an 11 percent      
increase over 2000 - and now is available in 85 countries.                      

- ALTACE, an angiotensin-converting-enzyme (ACE) inhibitor co-promoted in the   
United States by Wyeth and King Pharmaceuticals, Inc., experienced a 65 percent 
increase in new prescriptions. ALTACE is the only ACE inhibitor with an         
indication to reduce the risk of stroke, heart attack and cardiovascular death  
in at-risk patients over age 55.                                                

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- REFACTO and BENEFIX, Wyeth's recombinant hemophilia treatments, reached       
combined global sales of $360 million in 2001. REFACTO AF, an enhanced version  
of the product made without the use of animal- or human-derived proteins in any 
part of the manufacturing process, began Phase III clinical trials in 2001.     

- RAPAMUNE, our novel immunosuppressant for kidney transplantation, more than   
doubled its 2000 sales and was launched in 17 additional countries in 2001. More
than 7,000 transplant patients have used RAPAMUNE since its launch, and it now  
is used by more than 100 major U.S. transplant centers that account for 75      
percent of all transplants in the country.                                      

GROWING FOR THE FUTURE                                                          
While the strength of Wyeth's existing product portfolio is providing           
outstanding growth for the Company, our wide array of research programs holds   
the potential to dramatically accelerate our future growth. Included among the  
many projects in our development track are therapies that, if successful, could 
revolutionize the treatment of serious medical conditions.                      

Photo Caption:                                                                  
"I wrote my Ph.D. thesis on the evolution and mutation of the influenza virus 
so it's a thrill for me to be working on the FLUMIST vaccine - knowing that it  
should soon be available to help prevent this serious illness in adults and     
children."                                                                      

Debbie Buonagurio, Ph.D., Principal Research Scientist, Wyeth Research, shown in
the lab examining virus plaques, and in a field engaged in her favorite hobby,  
bird watching.                                                                  

Callout:                                                                        
Wyeth scientists are exploring vaccine therapies for serious bacterial and viral
diseases.                                                                       

DISCOVERING NEW VACCINES                                                        
The next exciting Wyeth product that we anticipate will reach the market is     
FLUMIST, an innovative influenza vaccine licensed from Aviron. FLUMIST is unique
because it is administered as an easy-to-use nasal spray. An application for    
regulatory approval in the United States was filed late in 2000, and FDA        
approval is anticipated this year - in time for FLUMIST to be available for the 
2002-2003 flu season.                                                           

Annual influenza outbreaks in the United States typically affect 10 percent to  
20 percent of the general population and cause an estimated 20,000 deaths. The  
efficacy of FLUMIST in children, combined with its easy-to-administer           
formulation, could have a substantial impact on these outbreaks.                

Wyeth also is applying its extensive experience in vaccine science to a variety 
of other bacterial and viral diseases.                                          

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Phase I trials are being conducted for a combination vaccine against respiratory
syncytial virus and parainfluenza - two serious respiratory illnesses - and for 
a herpes simplex vaccine. In addition, research is under way on                 
therapeutic/prophylactic vaccines for HIV.                                      

IMPROVING WOMEN'S HEALTH                                                        
Wyeth's global leadership in women's health research continues to focus on      
advances in hormone replacement therapy that could benefit millions of women    
around the world. A major research effort is under way at Wyeth's Women's Health
Research Institute to develop new therapies that utilize tissue-selective       
estrogens. These estrogens target receptors in specific tissue systems, such as 
bone, offering the opportunity to optimize the efficacy and tolerability of     
hormone therapies and to create a new treatment paradigm for postmenopausal     
women.                                                                          

In June 2001, Wyeth began Phase III clinical trials for bazedoxifene - a novel  
tissue-selective estrogen receptor modulator - for the prevention and treatment 
of postmenopausal osteoporosis. Phase III trials also have begun for a          
menopausal therapeutic that combines bazedoxifene and PREMARIN.                 

Photo Caption:                                                                  
"Our research in tissue-selective estrogens such as bazedoxifene could lead to a
new generation of hormone replacement therapies for postmenopausal women. I     
enjoy the challenge of moving a new therapy through the clinical process and    
proving that it works."                                                         

Barry Komm, Ph.D., Director, Cell Biology, Wyeth Research, pictured here        
pursuing his passion for woodworking, with son Mickey, and working at a DNA     
extractor in the lab.                                                           

Callout:                                                                        
Women's Health researchers at Wyeth are focusing on advances that could benefit 
millions of patients worldwide.                                                 

REPAIRING BONE                                                                  
Another Wyeth innovation anticipated to reach the market in 2002 is rhBMP-2, a  
recombinant protein therapy - locally applied - that induces bone growth. Wyeth 
has filed for regulatory approval for rhBMP-2 in the United States and Europe as
a treatment for long-bone fractures that require surgical management. In January
2002, the Orthopedic and Rehabilitation Devices Panel of the FDA recommended    
approval of an application from Medtronic Sofamor Danek, in collaboration with  
Wyeth, for the use of rhBMP-2 in spinal fusion surgery. This indication is for  
improvements in the surgical treatment of certain types of spinal degenerative  
disc diseases. The surgery uses rhBMP-2 in combination with a medical device to 
fuse vertebrae for the relief of lower back pain. This new procedure eliminates 
the need for - and the pain of - harvesting bone from the hip for spinal fusion 
surgery by using a collagen sponge                                              

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infused with rhBMP-2 to stimulate bone growth                                   
and fuse the vertebrae. Phase III clinical trials also are under way to test    
rhBMP-2 for dental/craniofacial surgical repair, and we expect to file an NDA   
for this application by the end of 2002.                                        

BATTLING CANCER                                                                 
CCI-779 is one of several potential therapies in Wyeth's oncology product       
pipeline designed to interfere with "signal transduction" - cellular processes  
that "tell" a cell when to divide. By inhibiting the signals for cell division, 
these compounds hold the potential to control tumor growth. CCI-779 is in Phase 
II clinical trials for the treatment of patients with breast cancer. Phase III  
trials for the treatment of renal cell carcinoma already are under way, and the 
FDA has designated the compound for "fast-track" development in this indication.

In July 2001, Wyeth announced an agreement to collaborate with Taxolog, Inc. to 
develop anti-tumor agents based on Taxolog's research into a class of compounds 
that appear to block cell division by disrupting essential intracellular        
mechanisms. In preclinical testing, the first of these compounds - MAC-321 -    
demonstrated outstanding activity in recognized animal models of human cancer.  

Photo Caption:                                                                  
"Having spent years as an endocrinologist treating patients with type II        
diabetes, I know that current therapies often have only limited effectiveness.  
I'm excited about the potential of ertiprotafib to help the millions of people  
affected by this life-threatening disease."                                     

Kelly Davis, M.D., Assistant Vice President, Clinical R&D, Wyeth Research,      
displaying her prized collection of majolica pottery, and giving a presentation 
on ertiprotafib.                                                                

Callout:                                                                        
Researchers in metabolic disorders at Wyeth are developing a potentially        
life-saving diabetes treatment.                                                 

FIGHTING DIABETES AND HEART DISEASE                                             
Non-insulin dependent diabetes mellitus (known as type II diabetes) affects     
millions of people worldwide, and more than 700,000 patients with the condition 
are diagnosed each year in the United States. In type II diabetes, tissues that 
normally react to insulin develop a "resistance" to its actions, allowing blood 
sugar levels to rise and altering vital processes in the body that can lead to  
kidney failure, nerve damage and blindness.                                     

Wyeth's metabolic disease researchers are developing a potentially life-saving  
treatment for type II diabetes called ertiprotafib (PTP-112) - a small molecule 
with a novel therapeutic action that keeps the insulin receptors "turned on" and
prolongs the body's responses to insulin. Ertiprotafib began Phase II clinical  
trials in both the United States and Europe in 2001.                            

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Wyeth's biotechnology resources also have created a recombinant protein therapy 
called rPSGL-Ig that is in Phase II clinical trials to evaluate its ability to  
accelerate clot destruction and prevent reperfusion injury following a heart    
attack.                                                                         

TARGETING ALZHEIMER'S DISEASE                                                   
One of Wyeth's most intriguing research efforts is targeted at Alzheimer's      
disease - a devastating condition that affects millions of older adults around  
the world and for which there is no current therapy that alters the onset or    
progression of the disease. Wyeth's Neuroscience group is taking a multi-pronged
approach that draws on the Company's resources in all three technology platforms
to tackle this difficult disease.                                               

One line of attack, being developed in conjunction with Elan Corporation,       
involves several types of immunotherapies that are designed to reduce and       
prevent the deposition of amyloid plaque in the brain - a substance believed to 
be associated with the progression of Alzheimer's disease. Although the first of
these projects has been discontinued, other immunotherapeutics are in           
preclinical development. In addition, Wyeth is developing a small molecule      
therapy, SRA-333, that takes a completely different approach to the symptomatic 
treatment of Alzheimer's disease. This experimental therapy is expected to begin
clinical trials before the end of this year.                                    

Wyeth's Neuroscience group has several other promising therapies in development,
including a treatment for schizophrenia that is in Phase I trials and a therapy 
for multiple sclerosis.                                                         

Photo Caption:                                                                  
"As a fitness professional, I encounter people every day who get discouraged    
about exercising because of soreness. Even after a lifetime of sports and       
fitness, I still get sore muscles. I advise people to start a new exercise      
program slowly, then build intensity and endurance. And I tell them that nothing
beats ADVIL to relieve muscle aches and get them back in the game."             

Denise Austin                                                                   
Washington, D.C.                                                                

Callout:                                                                        
ADVIL is one of the world's top consumer health care brands.                    

BUILDING STRONG CONSUMER HEALTH BRANDS                                          
Wyeth Consumer Healthcare continues to focus on building strong global brands.  
Three of our well-established product lines - ADVIL, CENTRUM and ROBITUSSIN -   
are among the top 12 consumer health care product franchises in the world. Other
key Wyeth Consumer Healthcare global brands include the CALTRATE family of      
calcium supplements, CHAP STICK and                                             

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PREPARATION H. After more than 100 years on the market, CHAP STICK product sales
grew by 13 percent in the United States last year. U.S. sales of PREPARATION H -
a product that has been available for almost 50 years - increased by 16 percent 
over 2000. The ADVIL Cold & Sinus family and CENTRUM PERFORMANCE, a premium     
multivitamin, also showed strong growth in the United States.                   

New products or line extensions launched during 2001 include two new ROBITUSSIN 
Syrup formulations, ROBITUSSIN Sunny Orange cough drops, PREPARATION H Wipes and
Children's ADVIL Blue Raspberry.                                                

Callout:                                                                        
PROHEART 6 provides six months of continuous protection from canine heartworm   
infection with a single dose.                                                   

Caption:                                                                        
"PROHEART 6 offers many advantages over traditional oral canine heartworm       
treatments. It is administered intravenously in a veterinarian's office, so     
PROHEART 6 eliminates concerns about owner compliance and whether a dosage was  
really absorbed or rejected by the animal. And we have an accurate record of    
exactly when each treatment was given."                                         

Tim Haevernick, D.V.M.                                                          
Veterinarian                                                                    
Mill Valley, California                                                         

BREAKTHROUGHS IN ANIMAL HEALTH                                                  
The highlight of 2001 for Wyeth's Fort Dodge Animal Health Division was the     
approval and launch in the United States of PROHEART 6 - an innovative canine   
heartworm preventative that is a breakthrough in animal health pharmaceuticals. 
Unlike traditional heartworm preventatives, PROHEART 6 provides six months of   
continuous protection from heartworm infection with a single injectable dose.   
PROHEART 6 achieved global sales of $84 million in 2001. A similar product has  
been approved in Australia, Japan and Italy.                                    

Fort Dodge received a conditional license in the United States to distribute its
first-in-class West Nile Virus vaccine for horses to protect against this       
sometimes fatal disease that has spread to more than 20 states. In Spain,       
BIODECTIN, which provides immunization against clostridial diseases and         
persistent treatment of parasites in sheep, was the first combination           
pharmaceutical and biological product ever registered in Europe.                

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WYETH'S PIPELINE FOR GROWTH                                                     

Shown here are some of the new products and new indications which are in        
post-Phase I clinical trials or have been submitted for regulatory approval.    

                                                        [Enlarge/Download Table]

                                                                           PHASE II      PHASE III        REGULATORY     
                                                                                                           REVIEW        

                                                                         Phase II:      Phase III:     Regulatory Review:
                                                                         Determination  Determination  Evaluation of     
                                                                         of safe and    of overall     safety and        
                                                                         effective      benefit/risk   efficacy data     
                                                                         dosage for an  ratio for an   by governmental   
                                                                         experimental   experimental   regulatory        
                                                                         medicine,      medicine,      agencies          
                                                                         generally      generally                        
                                                                         conducted in   conducted in                     
                                                                         hundreds of    thousands of                     
                                                                         patients       patients                         
                                                                                                                         
WOMEN'S HEALTH CARE                                                                                                      

BAZEDOXIFENE (TSE-424) Postmenopausal osteoporosis                             X              X                          

BAZEDOXIFENE/PREMARIN(R) Postmenopausal osteoporosis                           X              X                          

     Vasomotor symptoms of menopause                                           X              X                          

PREMARIN(R) LOW DOSE Postmenopausal osteoporosis                               X              X               X          

     Vasomotor symptoms of menopause                                           X              X               X          

PREMARIN(R)/MPA LOW DOSE Postmenopausal osteoporosis                           X              X               X          

     Vasomotor symptoms of menopause                                           X              X               X          

PREMARIN(R)/TRIMEGESTONE Postmenopausal osteoporosis                           X              X                          

     Vasomotor symptoms of menopause                                           X              X                          

TRIMEGESTONE/17(BETA)-ESTRADIOL Postmenopausal osteoporosis (EU)               X              X                          

     Vasomotor symptoms of menopause (EU)                                      X              X               X          

NEUROSCIENCE THERAPY                                                                                                     

EFFEXOR(R) XR Depression and generalized anxiety disorder in pediatrics        X              X                          

     Panic disorder                                                            X              X                          

     Social anxiety disorder (U.S. and Canada)                                 X              X               X          

VACCINES AND INFECTIOUS DISEASES                                                                                         

COLD-ADAPTED INFLUENZA VACCINE Liquid formulation                              X              X                          

FLUMIST(TM) INTRANASAL INFLUENZA VACCINE Frozen formulation                    X              X               X          

PREVNAR(R) Otitis media                                                        X              X               X          

ZOSYN(R) Nosocomial pneumonia q6h (U.S.)                                       X              X                          

9-VALENT PNEUMOCOCCAL AND MENINGOCOCCAL GROUP C CONJUGATE VACCINE              X              X                          

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                                                        [Enlarge/Download Table]

                                                                                       PHASE II  PHASE III  REGULATORY
                                                                                                              REVIEW  
                                                                                                                      
MUSCULOSKELETAL THERAPIES                                                                                             

ENBREL(R) Ankylosing spondylitis                                                           X         X                

     Psoriatic arthritis (EU)                                                              X         X           X    

     Psoriasis                                                                             X                          

J695 (ANTI-IL-12) Rheumatoid arthritis (joint with Abbott Laboratories)                    X                          

rhBMP-2 Dental/craniofacial                                                                X         X                

     Lumbar interbody spinal fusion (collaboration with Medtronic Sofamor Danek)           X         X           X    

     Lumbar posterolateral spinal fusion (collaboration with Medtronic Sofamor Danek)      X         X                

     Orthopedic trauma (long-bone fractures requiring surgery)                             X         X           X    

INTERNAL MEDICINE                                                                                                     

CORDARONE(R) AQ (AMIODARONE AQUEOUS) Recurrent ventricular fibrillation and unstable                                  
  ventricular tachycardia (U.S.)                                                           X         X                

ERTIPROTAFIB (PTP-112) Type II diabetes                                                    X                          

PROTONIX(R) ORAL Zollinger-Ellison Syndrome (U.S.)                                         X         X           X    

rhIL-11 Oral therapy in inflammatory bowel disease                                         X                          

rPSGL-Ig Acute coronary syndrome/acute myocardial infarction                               X                          

IMMUNOLOGY AND ONCOLOGY                                                                                               

CCI-779 Renal cell carcinoma                                                               X         X                

     Various solid tumors                                                                  X                          

MYLOTARG(R) Induction/consolidation in acute myeloid leukemia                              X                          

RAPAMUNE(R) Conversion in liver transplant                                                 X         X                

     Conversion in renal transplant                                                        X         X                

     Maintenance regimen in renal transplant (U.S.)                                        X         X           X    

     Pediatric usage                                                                       X         X                

HEMOPHILIA                                                                                                            

REFACTO(R) AF Hemophilia A                                                                 X         X                

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PRINCIPAL PRODUCTS                                                              

WYETH                                                                           
PHARMACEUTICALS                                                                 

HEMOPHILIA                                                          
BeneFIX                                                             
ReFacto                                                             

IMMUNOLOGY & ONCOLOGY                                               
Mylotarg                                                            
Neumega                                                             
Rapamune                                                            

INFECTIOUS DISEASES                                                 
Minocin                                                             
Minomycin                                                           
Pipracil                                                            
Suprax                                                              
Tazocin                                                             
Zosyn                                                               

INTERNAL MEDICINE                                                   
Altace (1)                                                          
Cordarone I.V.                                                      
Protonix                                                            
Protonix I.V.                                                       
Zebeta                                                              
Ziac                                                                
Zoton                                                               

MUSCULOSKELETAL                                                     
Enbrel (2)                                                          
Seltouch                                                            
Synvisc                                                             

NEUROSCIENCE                                                        
Efexor                                                              
Effexor                                                             
Effexor XR                                                          
Sonata                                                              

NUTRITIONALS                                                        
Materna                                                             
Nursoy                                                              
Progress                                                            
Progress Gold                                                       
Promil                                                              
Promil Gold                                                         
Promise                                                             
SMA                                                                 
SMA Gold                                                            
S-26                                                                
S-26 Gold                                                           

VACCINES                                                            
FluShield                                                           
HibTITER                                                            
Meningitec                                                          
Pnu-Imune 23                                                        
Prevenar                                                            
Prevnar                                                             

WOMEN'S HEALTH CARE                                                 
Alesse                                                              
Harmonet                                                            
Loette                                                              
Lo/Ovral                                                            
Minesse                                                             
Minulet                                                             
Premarin                                                            
Premphase                                                           
Prempro                                                             
Totelle                                                             
Tri-Minulet                                                         
Trinordiol                                                          
Triphasil                                                           

WYETH                                                                           
CONSUMER                                                                        
HEALTHCARE                                                                      

ANALGESICS                                                          
Advil                                                               
Anacin                                                              
Anadin                                                              
Children's Advil                                                    
Robaxin                                                             
Spalt                                                               

COUGH/COLD/ALLERGY                                                  
Advil Cold & Sinus                                                  
Dimetapp                                                            
Dristan                                                             
Robitussin                                                          
Robitussin Honey Products                                           

NUTRITIONAL SUPPLEMENTS                                             
Caltrate                                                            
Centrum                                                             
Centrum Jr.                                                         
Centrum Kids                                                        
Centrum Performance                                                 
Centrum Select                                                      
Centrum Silver                                                      
Polase                                                              
Solgar                                                              
Vitasprint B12                                                      

OTHER PRODUCTS                                                      
Anbesol                                                             
Chap Stick                                                          
FiberCon                                                            
Preparation H                                                       
Primatene                                                           

FORT DODGE                                                                      
ANIMAL HEALTH                                                                   

Biodectin                                                           
Bursine                                                             
Cydectin                                                            
Duramune                                                            
Duvaxyn                                                             
EtoGesic                                                            
Fel-O-Vax                                                           
Fluvac                                                              
LymeVax                                                             
Pentofel                                                            
Polyflex                                                            
Poulvac                                                             
ProHeart                                                            
Pyramid                                                             
Quest                                                               
Suvaxyn                                                             
ToDAY                                                               
ToMORROW                                                            
Torbugesic                                                          
Triangle                                                            
West Nile Virus Vaccine                                             

(1) Co-promoted with King Pharmaceuticals, Inc.                                 

(2) Co-promoted with Immunex Corporation                                        

The above principal products are identified as trademarks used by Wyeth and its 
subsidiaries.                                                                   

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FINANCIAL                                                                       
REVIEW                                                                          

Jerauld Skotnicki, Ph.D., Director, Discovery Chemical Sciences, Wyeth Research,
demonstrates the structure of the CCI-779 molecule.                             

                                                                [Download Table]
                                                           
Ten-Year Selected Financial Data                        32 

Consolidated Balance Sheets                             34 

Consolidated Statements of Operations                   35 

Consolidated Statements of Changes                         
in Stockholders' Equity                                 36 

Consolidated Statements of Cash Flows                   37 

Notes to Consolidated Financial Statements              38 

Report of Independent Public Accountants                55 

Management Report on Financial Statements               55 

Quarterly Financial Data (Unaudited)                    56 

Market Prices of Common Stock and Dividends             56 

Management's Discussion and Analysis of                    
Financial Condition and Results of Operations           57 

[BACKGROUND PICTURE OF JERAULD SKOTNICKI, Ph.D.]                                

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TEN-YEAR SELECTED FINANCIAL DATA                                                
(Dollar amounts in thousands except per share amounts)                          

                                                        [Enlarge/Download Table]

YEARS ENDED DECEMBER 31,                                                            2001             2000            1999     
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
SUMMARY OF NET REVENUE AND EARNINGS                                                                                           
Net revenue(1)(2)                                                           $ 14,128,514    $ 13,213,671     $ 11,815,138     
Income (loss) from continuing operations(1)(3)                                 2,285,294        (901,040)      (1,207,243)    
Diluted earnings (loss) per share from continuing operations(1)(3)(4)               1.72           (0.69)           (0.92)    
Dividends per common share                                                        0.9200          0.9200           0.9050     

YEAR-END FINANCIAL POSITION                                                                                                   
Current assets(1)                                                           $  9,766,753    $ 10,180,811     $ 12,384,778     
Current liabilities(1)(5)                                                      7,257,181       9,742,059        6,480,383     
Ratio of current assets to current liabilities(1)(5)                                1.35            1.05             1.91     
Total assets(1)                                                               22,967,922      21,092,466       23,123,756     
Long-term debt(1)(6)                                                           7,357,277       2,394,790        3,606,423     
Average stockholders' equity(5)                                                3,445,333       4,516,420        7,914,772     

STOCKHOLDERS -- OUTSTANDING SHARES                                                                                            
Number of common stockholders                                                     64,698          58,355           62,482     
Weighted average common shares outstanding used for                                                                           
   diluted earnings per share calculation (in thousands)(4)                    1,330,809       1,306,474        1,308,876     

EMPLOYMENT DATA(1)                                                                                                            
Number of employees at year end                                                   52,289          48,036           46,815     
Wages and salaries                                                          $  2,536,220    $  2,264,258     $  2,032,431     
Benefits (including social security taxes)                                       691,018         602,816          593,222     

32 Wyeth and Subsidiaries                                                       

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TEN-YEAR SELECTED FINANCIAL DATA (CONTINUED)                                    

                                                        [Enlarge/Download Table]

YEARS ENDED DECEMBER 31,                                                            1998             1997              1996      
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 
SUMMARY OF NET REVENUE AND EARNINGS                                                                                              
Net revenue(1)(2)                                                           $ 11,219,752     $ 12,027,541      $ 12,040,836      
Income (loss) from continuing operations(1)(3)                                 2,152,344        1,747,638         1,651,617      
Diluted earnings (loss) per share from continuing operations(1)(3)(4)               1.61             1.33              1.28      
Dividends per common share                                                        0.8700           0.8300            0.7825      

YEAR-END FINANCIAL POSITION                                                                                                      
Current assets(1)                                                           $ 10,698,188     $ 10,025,512      $ 10,310,256      
Current liabilities(1)(5)                                                      3,478,119        3,476,322         3,584,256      
Ratio of current assets to current liabilities(1)(5)                                3.08             2.88              2.88      
Total assets(1)                                                               20,224,231       19,851,517        19,924,666      
Long-term debt(1)(6)                                                           3,839,402        5,007,610         6,010,297      
Average stockholders' equity(5)                                                8,895,024        7,568,672         6,252,545      

STOCKHOLDERS -- OUTSTANDING SHARES                                                                                               
Number of common stockholders                                                     65,124           64,313            67,545      
Weighted average common shares outstanding used for                                                                              
   diluted earnings per share calculation (in thousands)(4)                    1,336,641        1,312,975         1,287,790      

EMPLOYMENT DATA(1)                                                                                                               
Number of employees at year end                                                   47,446           54,921            54,194      
Wages and salaries                                                          $  2,175,517     $  2,428,518      $  2,439,604      
Benefits (including social security taxes)                                       577,930          619,528           614,179      

                                                        [Enlarge/Download Table]

YEARS ENDED DECEMBER 31,                                                 1995           1994(7)            1993            1992  
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 
SUMMARY OF NET REVENUE AND EARNINGS                                                                                              
Net revenue(1)(2)                                                $ 11,391,497     $  8,828,732     $  8,261,276    $  7,819,957  
Income (loss) from continuing operations(1)(3)                      1,472,525        1,525,517        1,469,300       1,460,842  
Diluted earnings (loss) per share from continuing                                                                                
  operations(1)(3)(4)                                                    1.18             1.24             1.17            1.15  
Dividends per common share                                             0.7550           0.7350           0.7150          0.6650  

YEAR-END FINANCIAL POSITION                                                                                                      
Current assets(1)                                                $ 11,084,841     $ 11,321,682     $  4,807,684    $  4,552,077  
Current liabilities(1)(5)                                           3,929,940        4,291,452        1,584,411       1,492,717  
Ratio of current assets to current liabilities(1)(5)                     2.82             2.64             3.03            3.05  
Total assets(1)                                                    20,721,093       21,328,267        7,687,353       7,141,405  
Long-term debt(1)(6)                                                7,806,717        9,972,444          859,278         601,934  
Average stockholders' equity(5)                                     4,898,550        4,065,295        3,719,539       3,431,568  

STOCKHOLDERS -- OUTSTANDING SHARES                                                                                               
Number of common stockholders                                          68,763           71,223           72,664          73,064  
Weighted average common shares outstanding used for                                                                              
   diluted earnings per share calculation                                                                                        
   (in thousands)(4)                                                1,250,902        1,234,100        1,252,990       1,267,240  

EMPLOYMENT DATA(1)                                                                                                               
Number of employees at year end                                        58,957           70,300           51,399          50,653  
Wages and salaries                                               $  2,512,418     $  1,811,402     $  1,654,984    $  1,575,615  
Benefits (including social security taxes)                            641,169          439,572          396,045         367,899  

----------                                                                      

(1)  As a result of the sale of the Cyanamid Agricultural Products business on  
 June 30, 2000, amounts for the years 1994 through 1999 were restated to
reflect this business as a discontinued operation. Beginning in 1994, 
     current assets include the net assets of the discontinued business held for
sale related to the Cyanamid Agricultural Products business.          

(2)  The Company early adopted new authoritative accounting guidance as of      
January 1, 2001 reflecting certain rebates and sales incentives (i.e.,
 coupons and other rebate programs) as reductions of revenues instead of
     selling and marketing expenses. Net revenue for all prior periods presented
  has been reclassified to comply with the income statement classification
requirements of the new guidance.                                     

(3)  See Management's Discussion and Analysis of Financial Condition and Results
    of Operations for amounts related to gain on sale of Immunex common stock,
termination fee, litigation charges, goodwill impairment and special  
charges for the years ended December 31, 2001, 2000 and 1999.         

(4)  The weighted average common shares outstanding for diluted loss per share  
   for 2000 and 1999 did not include common stock equivalents, as the effect
would have been antidilutive.                                         

(5)  As a result of the litigation charges of $7,500,000 and $4,750,000 in 2000 
and 1999, respectively, related to the litigation brought against the 
Company regarding the use of the diet drugs REDUX or PONDIMIN, current
 liabilities have increased substantially in 2000 and 1999 compared with
 prior years, and the ratio of current assets to current liabilities and
   average stockholders' equity has decreased substantially in 2000 and 1999
compared with prior years.                                            

(6)  In the 2001 first quarter, the Company obtained a new $3,000,000 credit    
facility to support increased commercial paper borrowings and issued  
     $3,000,000 of Senior Notes. The proceeds from these borrowings are used for
     the Company's general corporate and working capital requirements, including
payments related to the REDUX and PONDIMIN diet drug litigation.      

(7)  The 1994 information reflects the acquisition of American Cyanamid Company 
for the one-month period ended December 31, 1994.                     

                                                       Wyeth and Subsidiaries 33

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CONSOLIDATED BALANCE SHEETS                                                     
(In thousands except share and per share amounts)                               

                                                        [Enlarge/Download Table]

DECEMBER 31,                                                                                     2001                  2000 
----------------------------------------------------------------------------------------------------------------------------
                                                                                                                            
ASSETS                                                                                                                      
Cash and cash equivalents                                                                 $ 1,744,734           $ 2,644,306 
Marketable securities                                                                       1,281,988               341,031 
Accounts receivable less allowances (2001 -- $130,734 and 2000 -- $144,150)                 2,743,040             2,740,272 
Inventories                                                                                 1,754,971             1,531,727 
Other current assets including deferred taxes                                               2,242,020             2,923,475 
                                                                                          --------------------------------- 
TOTAL CURRENT ASSETS                                                                        9,766,753            10,180,811 
Property, plant and equipment:                                                                                              
   Land                                                                                       138,837               149,810 
   Buildings                                                                                3,294,004             2,694,612 
   Machinery and equipment                                                                  3,796,117             3,510,529 
   Construction in progress                                                                 1,715,493             1,223,282 
                                                                                          --------------------------------- 
                                                                                            8,944,451             7,578,233 
Less accumulated depreciation                                                               2,662,291             2,543,409 
                                                                                          --------------------------------- 
                                                                                            6,282,160             5,034,824 
Goodwill and other intangibles, net of accumulated amortization                                                             
   (2001 -- $1,895,670 and 2000 -- $1,739,368)                                              3,851,934             4,052,410 
Other assets including deferred taxes                                                       3,067,075             1,824,421 
                                                                                          --------------------------------- 
TOTAL ASSETS                                                                              $22,967,922           $21,092,466 
                                                                                          ================================= 
----------------------------------------------------------------------------------------------------------------------------
LIABILITIES                                                                                                                 
Loans payable                                                                             $ 2,097,354           $    58,717 
Trade accounts payable                                                                        672,457               595,233 
Accrued expenses                                                                            4,257,523             8,831,459 
Accrued federal and foreign taxes                                                             229,847               256,650 
                                                                                          --------------------------------- 
TOTAL CURRENT LIABILITIES                                                                   7,257,181             9,742,059 
Long-term debt                                                                              7,357,277             2,394,790 
Other noncurrent liabilities                                                                3,355,793             5,226,495 
Accrued postretirement benefits other than pensions                                           925,098               911,029 
                                                                                          --------------------------------- 
----------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY                                                                                                        
$2.00 convertible preferred stock, par value $2.50 per share; 5,000,000                                                     
   shares authorized                                                                               51                    55 
Common stock, par value $0.33 1/3 per share; 2,400,000,000 shares authorized                                                
   (outstanding shares: 2001 -- 1,320,570,000 and 2000 -- 1,311,774,000)                      440,190               437,258 
Additional paid-in capital                                                                  4,295,051             3,952,457 
Retained earnings (accumulated deficit)                                                       170,309              (899,118)
Accumulated other comprehensive loss                                                         (833,028)             (672,559)
                                                                                          --------------------------------- 
TOTAL STOCKHOLDERS' EQUITY                                                                  4,072,573             2,818,093 
                                                                                          --------------------------------- 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                $22,967,922           $21,092,466 
                                                                                          ================================= 

The accompanying notes are an integral part of these Consolidated Financial     
Statements.                                                                     

34 Wyeth and Subsidiaries                                                       

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CONSOLIDATED STATEMENTS OF OPERATIONS                                           
(In thousands except per share amounts)                                         

                                                        [Enlarge/Download Table]

YEARS ENDED DECEMBER 31,                                                               2001                2000                1999 
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                                                                                    
NET REVENUE                                                                    $ 14,128,514        $ 13,213,671        $ 11,815,138 
                                                                               ---------------------------------------------------- 
Cost of goods sold                                                                3,388,776           3,269,418           3,022,556 
Selling, general and administrative expenses                                      5,179,285           4,983,465           4,322,207 
Research and development expenses                                                 1,869,679           1,687,889           1,587,505 
Interest expense, net                                                               146,358              57,562             213,866 
Other income, net                                                                  (274,331)           (161,039)           (255,697)
Gain on sale of Immunex common stock                                                     --          (2,061,204)                 -- 
Termination fee                                                                          --          (1,709,380)                 -- 
Litigation charges                                                                  950,000           7,500,000           4,750,000 
Goodwill impairment                                                                      --             401,000                  -- 
Special charges                                                                          --             347,000              82,000 
                                                                               ---------------------------------------------------- 
Income (loss) from continuing operations before                                                                                     
   federal and foreign taxes                                                      2,868,747          (1,101,040)         (1,907,299)
Provision (benefit) for federal and foreign taxes                                   583,453            (200,000)           (700,056)
                                                                               ---------------------------------------------------- 
INCOME (LOSS) FROM CONTINUING OPERATIONS                                          2,285,294            (901,040)         (1,207,243)
Discontinued operations:                                                                                                            
   Income (loss) from operations of discontinued agricultural                                                                       
      products business (including federal and foreign taxes of                                                                     
      $57,289 and $1,551 for 2000 and 1999, respectively)                                --             103,346             (19,878)
   Loss on disposal of agricultural products business                                                                               
      (including federal and foreign tax charges of $855,248)                            --          (1,572,993)                 -- 
                                                                               ---------------------------------------------------- 
LOSS FROM DISCONTINUED OPERATIONS                                                        --          (1,469,647)            (19,878)
                                                                               ---------------------------------------------------- 
NET INCOME (LOSS)                                                              $  2,285,294        $ (2,370,687)       $ (1,227,121)
                                                                               ==================================================== 
BASIC EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS                     $       1.74        $      (0.69)       $      (0.92)
BASIC LOSS PER SHARE FROM DISCONTINUED OPERATIONS                                        --               (1.12)              (0.02)
                                                                               ---------------------------------------------------- 
BASIC EARNINGS (LOSS) PER SHARE                                                $       1.74        $      (1.81)       $      (0.94)
                                                                               ==================================================== 
DILUTED EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS                   $       1.72        $      (0.69)       $      (0.92)
DILUTED LOSS PER SHARE FROM DISCONTINUED OPERATIONS                                      --               (1.12)              (0.02)
                                                                               ---------------------------------------------------- 
DILUTED EARNINGS (LOSS) PER SHARE                                              $       1.72        $      (1.81)       $      (0.94)
                                                                               ==================================================== 

The accompanying notes are an integral part of these Consolidated Financial     
Statements.                                                                     

                                                       Wyeth and Subsidiaries 35

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY                      
(In thousands except per share amounts)                                         

                                                        [Enlarge/Download Table]

                                                    $2.00                               RETAINED      ACCUMULATED                 
                                              CONVERTIBLE              ADDITIONAL       EARNINGS            OTHER           TOTAL 
                                                PREFERRED     COMMON      PAID-IN   (ACCUMULATED    COMPREHENSIVE    STOCKHOLDERS'
                                                    STOCK      STOCK      CAPITAL        DEFICIT)            LOSS          EQUITY 
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  
Balance at January 1, 1999                            $64   $437,466   $3,072,874   $  6,432,729        $(328,337)    $ 9,614,796 
                                             =====================================================================================
Net loss                                                                              (1,227,121)                      (1,227,121)
Currency translation adjustments                                                                         (285,963)       (285,963)
Unrealized gains on marketable securities                                                                     815             815 
                                                                                                                     -------------
   Comprehensive loss                                                                                                  (1,512,269)
                                                                                                                     -------------
Cash dividends declared:                                                                                                          
   Preferred stock (per share: $2.00)                                                        (50)                             (50)
   Common stock (per share: $0.905)                                                   (1,183,571)                      (1,183,571)
Common stock acquired for treasury                            (6,409)     (39,505)    (1,012,385)                      (1,058,299)
Common stock issued for stock options                          3,376      230,894                                         234,270 
Conversion of preferred stock                                                                                                     
   and other exchanges                                 (3)       206      128,442         (8,775)                         119,870 
                                             -------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999                           61    434,639    3,392,705      3,000,827         (613,485)      6,214,747 
                                             =====================================================================================
----------------------------------------------------------------------------------------------------------------------------------
Net loss                                                                              (2,370,687)                      (2,370,687)
Currency translation adjustments                                                                          (70,496)        (70,496)
Unrealized gains on marketable securities                                                                  11,422          11,422 
                                                                                                                     -------------
   Comprehensive loss                                                                                                  (2,429,761)
                                                                                                                     -------------
Cash dividends declared:                                                                                                          
   Preferred stock (per share: $2.00)                                                        (46)                             (46)
   Common stock (per share: $0.92)                                                    (1,201,431)                      (1,201,431)
Common stock acquired for treasury                            (2,472)     (16,316)      (374,289)                        (393,077)
Common stock issued for stock options                          4,949      405,933                                         410,882 
Conversion of preferred stock                                                                                                     
   and other exchanges                                 (6)       142      170,135         (6,663)                         163,608 
International operations year end change                                                  53,171                           53,171 
                                             -------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2000                           55    437,258    3,952,457       (899,118)        (672,559)      2,818,093 
                                             =====================================================================================
----------------------------------------------------------------------------------------------------------------------------------
Net income                                                                             2,285,294                        2,285,294 
Currency translation adjustments                                                                         (166,200)       (166,200)
Unrealized gains on derivative contracts                                                                    7,865           7,865 
Unrealized losses on marketable securities                                                                 (2,134)         (2,134)
                                                                                                                     -------------
   Comprehensive income                                                                                                 2,124,825 
                                                                                                                     -------------
Cash dividends declared:                                                                                                          
   Preferred stock (per share: $2.00)                                                        (42)                             (42)
   Common stock (per share: $0.92)                                                    (1,211,012)                      (1,211,012)
Common stock issued for stock options                          2,774      221,857                                         224,631 
Conversion of preferred stock                                                                                                     
   and other exchanges                                 (4)       158      120,737         (4,813)                         116,078 
                                             -------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2001                          $51   $440,190   $4,295,051   $    170,309        $(833,028)    $ 4,072,573 
                                             =====================================================================================

The accompanying notes are an integral part of these Consolidated Financial     
Statements.                                                                     

36 Wyeth and Subsidiaries                                                       

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CONSOLIDATED STATEMENTS OF CASH FLOWS                                           
(In thousands)                                                                  

                                                        [Enlarge/Download Table]

YEARS ENDED DECEMBER 31,                                                               2001                2000                1999 
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                                                                                    
OPERATING ACTIVITIES                                                                                                                
Income (loss) from continuing operations                                        $ 2,285,294         $  (901,040)        $(1,207,243)
Adjustments to reconcile income (loss) from continuing                                                                              
   operations to net cash provided from/(used for) operating                                                                        
   activities of continuing operations:                                                                                             
   Litigation charges                                                               950,000           7,500,000           4,750,000 
   Gain on sale of Immunex common stock                                                  --          (2,061,204)                 -- 
   Goodwill impairment                                                                   --             401,000                  -- 
   Special charges                                                                       --             347,000              82,000 
   Gains on sales of assets                                                        (249,399)           (159,430)           (205,739)
   Depreciation                                                                     426,590             336,239             341,871 
   Amortization                                                                     181,139             198,810             199,307 
   Deferred income taxes                                                            267,820            (814,282)         (1,410,068)
   Diet drug litigation payments                                                 (7,257,882)         (3,966,845)           (117,581)
   Contributions to defined benefit pension plans                                  (429,710)            (17,554)            (14,259)
   Deconsolidation of Immunex                                                            --            (236,768)                 -- 
   Changes in working capital, net of businesses acquired,                                                                          
      sold or deconsolidated:                                                                                                       
      Accounts receivable                                                           (68,984)           (433,182)            164,588 
      Inventories                                                                  (273,063)             31,188            (115,699)
      Other current assets                                                         (395,764)            179,817            (170,478)
      Trade accounts payable and accrued expenses                                   277,009             270,518             (73,946)
      Accrued federal and foreign taxes                                             (14,654)           (393,330)           (121,227)
   Other items, net                                                                (145,231)            196,405             391,851 
                                                                                ----------------------------------------------------
Net cash provided from/(used for) continuing operations                          (4,446,835)            477,342           2,493,377 
Net cash provided from/(used for) discontinued operations                                --              77,600            (327,771)
                                                                                ----------------------------------------------------
NET CASH PROVIDED FROM/(USED FOR) OPERATING ACTIVITIES                           (4,446,835)            554,942           2,165,606 
                                                                                ====================================================
----------------------------------------------------------------------------------------------------------------------------------- 
INVESTING ACTIVITIES                                                                                                                
Purchases of property, plant and equipment                                       (1,924,265)         (1,681,906)           (937,435)
Proceeds from sale of agricultural products business                                     --           3,800,000                  -- 
Proceeds from sale of Immunex common stock                                               --           2,404,875                  -- 
Proceeds from sales of assets                                                       408,230             256,192             327,730 
Purchases of marketable securities                                               (2,703,252)           (677,802)           (789,846)
Proceeds from sales and maturities of marketable securities                       1,762,295             384,292             383,941 
                                                                                ----------------------------------------------------
NET CASH PROVIDED FROM/(USED FOR) INVESTING ACTIVITIES                           (2,456,992)          4,485,651          (1,015,610)
                                                                                ====================================================
----------------------------------------------------------------------------------------------------------------------------------- 
FINANCING ACTIVITIES                                                                                                                
Net proceeds from/(repayments of) debt                                            7,007,156          (3,080,381)          1,593,468 
Dividends paid                                                                   (1,211,054)         (1,201,477)         (1,183,621)
Purchases of common stock for treasury                                                   --            (393,077)         (1,058,299)
Exercises of stock options                                                          224,631             410,882             234,270 
                                                                                ----------------------------------------------------
NET CASH PROVIDED FROM/(USED FOR) FINANCING ACTIVITIES                            6,020,733          (4,264,053)           (414,182)
                                                                                ----------------------------------------------------
Effect of exchange rate changes on cash balances                                    (16,478)            (24,949)            (25,418)
                                                                                ----------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   (899,572)            751,591             710,396 
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                      2,644,306           1,892,715           1,182,319 
                                                                                ----------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR                                          $ 1,744,734         $ 2,644,306         $ 1,892,715 
                                                                                ====================================================

The accompanying notes are an integral part of these Consolidated Financial     
Statements.                                                                     
                                                       Wyeth and Subsidiaries 37

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                      

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

PRINCIPLES OF CONSOLIDATION: The accompanying Consolidated Financial      
Statements include the accounts of Wyeth (formerly American Home Products       
Corporation) and its majority-owned subsidiaries (the Company). 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.                                               

Effective January 1, 2000, the financial results of certain pharmaceutical
subsidiaries in Japan and India, which previously were included on an equity    
basis, were consolidated in the financial results of the Company due to changes 
which gave the Company the ability to exercise control over the operations of   
these affiliates. Also, effective January 1, 2000, the financial results of     
Immunex Corporation (Immunex), which previously were consolidated, were         
deconsolidated and included on an equity basis in the results of operations of  
the Company (see Note 2).                                                       

Prior to 2000, certain of the Company's international affiliates reported 
their results of operations on a one-month lag (year ended November 30), which  
allowed more time to compile results. In December 2000, the one-month lag was   
eliminated, primarily to reflect the results of these operations on a more      
timely basis. As a result, December 2000 income from continuing operations for  
these entities of $53.2 million was recorded directly to stockholders' equity.  

DESCRIPTION OF BUSINESS: The Company is a U.S.-based multi-national       
corporation engaged in the discovery, development, manufacture, distribution and
sale of a diversified line of products in two primary businesses:               
Pharmaceuticals and Consumer Health Care. Pharmaceuticals include branded and   
generic human ethical pharmaceuticals, biologicals, nutritionals, and animal    
biologicals and pharmaceuticals. Principal products include women's health care 
products, neuroscience therapies, cardiovascular products, infant nutritionals, 
gastroenterology drugs, anti-infectives, vaccines, biopharmaceuticals, oncology 
therapies, musculoskeletal therapies, hemophilia treatments and immunological   
products. Principal animal health products include vaccines, pharmaceuticals,   
endectocides and growth implants. Consumer Health Care products include         
analgesics, cough/cold/allergy remedies, nutritional supplements, herbal        
products, and hemorrhoidal, antacid, asthma and other relief items sold         
over-the-counter. The Company sells its diversified line of products to         
wholesalers, pharmacies, hospitals, physicians, retailers and other health care 
institutions located in various markets in more than 140 countries throughout   
the world. The Company is not dependent on any single customer or major group of
customers for its net revenue.                                                  

 The Company is not dependent on any one patent-protected product or line of
products for a substantial portion of its net revenue or results of operations. 
However, PREMARIN, one of the Company's conjugated estrogens products, which has
not had patent protection for many years, contributes significantly to net      
revenue and results of operations.                                              

EQUITY METHOD OF ACCOUNTING: The Company accounts for its investments in  
20%- to 50%-owned companies using the equity method. Accordingly, the Company's 
share of the earnings of these companies is included in Other income, net. The  
related equity investment is included in Other assets including deferred taxes. 
At December 31, 2001, Immunex was the Company's only material equity investment.
Immunex is a biopharmaceutical company that discovers, manufactures and markets 
therapeutic products for the treatment of cancer and musculoskeletal disorders  
such as rheumatoid arthritis. See Note 2 for discussion of Immunex-related      
transactions in 2001 and 2000.                                                  

  CASH EQUIVALENTS consist primarily of certificates of deposit, time 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 the short-term, highly liquid nature of cash     
equivalents.                                                                    

   MARKETABLE SECURITIES consist of U.S. government or agency issues, commercial
paper, time deposits and corporate bonds and are stated at fair value, which    
approximates cost due to the short-term, highly liquid nature of these          
securities (less than six months). All marketable securities are                
available-for-sale investments. The fair values are estimated based on current  
market prices.                                                                  

INVENTORIES are valued at the lower of cost or market. Inventories valued 
under the last-in, first-out (LIFO) method amounted to $319.9 million and $325.1
million at December 31, 2001 and 2000, respectively. The current value exceeded 
the LIFO value by $59.5 million and $59.7 million at December 31, 2001 and 2000,
respectively. The remaining inventories are valued primarily under the first-in,
first-out (FIFO) method.                                                        

Inventories at December 31 consisted of:                            

                                                                [Download Table]

(In thousands)                                         2001                 2000
--------------------------------------------------------------------------------
                                                                                
Finished goods                                   $  653,108           $  585,123
Work in progress                                    674,636              586,656
Materials and supplies                              427,227              359,948
                                                 -------------------------------
                                                 $1,754,971           $1,531,727
                                                 ===============================

PROPERTY, PLANT AND EQUIPMENT is carried at cost. Depreciation is provided
over the estimated useful lives of the related assets placed into service,      
principally on the straight-line method.                                        

GOODWILL AND OTHER INTANGIBLES: Goodwill is defined as the excess of cost 
over the fair value of net assets acquired and is amortized using the           
straight-line method over various periods ranging from 15 to 40 years. Other    
intangibles are recorded at cost and amortized from three to 10 years. The      
Company continually reviews goodwill and other intangibles to evaluate whether  
changes have occurred that would suggest such assets may be impaired. If        
circumstances suggest an impairment, undiscounted                               

38 Wyeth and Subsidiaries                                                       

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future cash flows of such assets acquired or purchased are estimated. If this   
estimate indicates that goodwill or other intangibles are not recoverable, the  
carrying value of the goodwill or other intangibles is reduced to fair value by 
the estimated shortfall of future cash flows on a discounted basis.             

As of January 1, 2002, the Company will implement new authoritative       
accounting guidance relating to both the initial recording and subsequent       
impairment testing of goodwill and other intangibles. Refer to "Recently Issued 
Accounting Standards" herein for discussion of the Company's implementation of  
this new guidance.                                                              

  DERIVATIVE FINANCIAL INSTRUMENTS: The Company currently manages its exposure
to certain market risks, including foreign exchange and interest rate risks,    
through the use of derivative financial instruments, and accounts for them in   
accordance with Statement of Financial Accounting Standards (SFAS) Nos. 133,    
Accounting for Derivative Instruments and Hedging Activities, and 138,          
Accounting for Certain Derivative Instruments and Certain Hedging Activities.   

   On the date that the Company enters into a derivative contract, it designates
the derivative as: (1) a hedge of the fair value of a recognized asset or       
liability (fair value hedge), (2) a hedge of a forecasted transaction or the    
variability of cash flows that are to be received or paid in connection with a  
recognized asset or liability (cash flow hedge), (3) a foreign currency fair    
value or cash flow hedge (foreign currency hedge) or (4) a derivative instrument
that is not designated for hedge accounting treatment. For derivative contracts 
that are designated and qualify as fair value hedges (including foreign currency
fair value hedges), the derivative instrument is marked-to-market with gains and
losses recognized in current period earnings to offset the respective losses and
gains recognized on the underlying exposure. For derivative contracts that are  
designated and qualify as cash flow hedges (including foreign currency cash flow
hedges), the effective portion of gains and losses on these contracts is        
reported as a component of accumulated other comprehensive income (loss) and    
reclassified into earnings in the same period the hedged transaction affects    
earnings. Any hedge ineffectiveness on cash flow hedges is immediately          
recognized in earnings. The Company also enters into derivative contracts that  
are not designated as hedging instruments. These derivative contracts are       
recorded at fair value with the gain or loss recognized in current period       
earnings. The Company does not hold any derivative instruments for trading      
purposes. See Note 7 for further description of the Company's specific programs 
to manage risk using derivative financial instruments.                          

  CURRENCY TRANSLATION: The majority of the Company's international operations
are translated into U.S. dollars using current foreign currency exchange rates  
with currency translation adjustments reflected in Accumulated other            
comprehensive loss in stockholders' equity. Currency translation adjustments    
comprise the majority of Accumulated other comprehensive loss on the            
Consolidated Balance Sheets and the Consolidated Statements of Changes in       
Stockholders' Equity. Currency translation adjustments related to international 
operations in highly inflationary economies are included in the results of      
operations.                                                                     

  REVENUE RECOGNITION: Revenue from the sale of Company products is recognized
in Net revenue upon shipment to customers. Provisions for certain rebates,      
product returns and discounts to customers are provided for as reductions in    
determining Net revenue in the same period the related sales are recorded.      

  Revenue under co-promotion agreements from the sale of products developed by
other companies, such as the Company's arrangement with Immunex to co-promote   
ENBREL and with King Pharmaceuticals, Inc. to co-promote ALTACE, is recorded as 
alliance revenue, which is included in Net revenue. Such alliance revenue is    
earned when the co-promoting company ships the product to a third party. Selling
and marketing expenses related to alliance revenue are included in Selling,     
general and administrative expenses.                                            

SHIPPING AND HANDLING COSTS, which include transportation to customers,   
transportation to distribution points, warehousing and handling costs, are      
included in Selling, general and administrative expenses. The Company typically 
does not charge customers for shipping and handling costs. Shipping and handling
costs were $228.9 million, $212.5 million and $204.5 million in 2001, 2000 and  
1999, respectively.                                                             

   REBATES AND SALES INCENTIVES, which are deducted to arrive at Net revenue,are
offered to customers based upon volume purchases, the attainment of market share
levels, sales support, government mandates, coupons and consumer discounts.     
Rebates and sales incentives accruals included in Accrued expenses at December  
31, 2001 and 2000 were $615.0 million and $482.7 million, respectively.         

                                                       Wyeth and Subsidiaries 39

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EARNINGS (LOSS) PER SHARE: The following table sets forth the         
computations of basic earnings (loss) per share and diluted earnings (loss) per 
share:                                                                          

                                                                [Download Table]

(In thousands except per share amounts)                                         
YEARS ENDED DECEMBER 31,                   2001            2000            1999 
--------------------------------------------------------------------------------
                                                                                
Income (loss) from continuing                                                   
   operations less preferred                                                    
   dividends                         $2,285,252     $  (901,086)    $(1,207,293)
Loss from                                                                       
   discontinued operations                   --      (1,469,647)        (19,878)
                                    --------------------------------------------
Net income (loss) less                                                          
   preferred dividends               $2,285,252     $(2,370,733)    $(1,227,171)
Denominator:                                                                    
   Weighted average common                                                      
   shares outstanding                 1,317,102       1,306,474       1,308,876 
                                    --------------------------------------------
Basic earnings (loss) per share                                                 
   from continuing operations        $     1.74     $     (0.69)    $     (0.92)
Basic loss per share from                                                       
   discontinued operations                   --           (1.12)          (0.02)
                                    --------------------------------------------
Basic earnings (loss) per share      $     1.74     $     (1.81)    $     (0.94)
                                    ============================================
Income (loss) from continuing                                                   
   operations                        $2,285,294     $  (901,040)    $(1,207,243)
Loss from                                                                       
   discontinued operations                   --      (1,469,647)        (19,878)
                                    --------------------------------------------
Net income (loss)                    $2,285,294     $(2,370,687)    $(1,227,121)
Denominator:                                                                    
   Weighted average common                                                      
   shares outstanding                 1,317,102       1,306,474       1,308,876 
   Common stock equivalents                                                     
   of outstanding stock options                                                 
   and deferred contingent                                                      
   common stock awards*                  13,707              --              -- 
                                    --------------------------------------------
Total shares*                         1,330,809       1,306,474       1,308,876 
                                    --------------------------------------------
Diluted earnings (loss) per                                                     
   share from continuing                                                        
   operations*                       $     1.72     $     (0.69)    $     (0.92)
Diluted loss per share from                                                     
   discontinued operations*                  --           (1.12)          (0.02)
                                    --------------------------------------------
Diluted earnings (loss)                                                         
   per share*                        $     1.72     $     (1.81)    $     (0.94)
                                    ============================================

* The total weighted average common shares outstanding for diluted loss         
per share for 2000 and 1999 did not include common stock equivalents,       
as the effect would have been antidilutive.                                 

  RECENTLY ISSUED ACCOUNTING STANDARDS: In June 2001, the Financial Accounting
Standards Board (FASB) issued SFAS No. 142, Goodwill and Other Intangible       
Assets, which supersedes APB Opinion No. 17, Intangible Assets, and addresses   
how intangible assets that are acquired individually or with a group of other   
assets should be accounted for in financial statements upon their acquisition.  
The statement also addresses how goodwill and other intangibles should be       
accounted for after they have been initially recognized in the financial        
statements. With the adoption of SFAS No. 142, goodwill no longer is amortized  
over its estimated useful life but is subject to at least an annual assessment  
for impairment by applying a fair-value-based test. The same applies to other   
intangibles, which have been determined to have indefinite useful lives. Other  
intangibles with finite lives will continue to be amortized. The Company will   
adopt SFAS No. 142 as of January 1, 2002.                                       

 In accordance with the adoption of SFAS No. 142, as of January 1, 2002, the
Company will cease amortizing goodwill. Included in Selling, general and        
administrative expenses for 2001 was approximately $160.5 million ($153.9       
million after-tax or $0.12 per share-diluted) of goodwill amortization. The     
Company currently is assessing the impact the new impairment testing            
requirements may have on its financial position, results of operations and cash 
flows.                                                                          

  In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which superseded existing guidance. The       
provisions of SFAS No. 144 are effective for fiscal years beginning after       
December 15, 2001 and generally are to be applied prospectively. SFAS No. 144   
augments the criteria that would have to be met to classify an asset as         
held-for-sale and refines the guidance in determining fair value in measuring an
impairment. The statement also requires expected future operating losses from   
discontinued operations to be recorded in the period in which the losses are    
incurred (rather than as of the date management commits to a formal plan to     
dispose of a segment, as was previously required). In addition, the             
qualifications for dispositions to be considered discontinued operations have   
been expanded. The Company adopted this statement on January 1, 2002 and will   
prospectively comply with all criteria outlined in SFAS No. 144.                

 In April 2001, the Emerging Issues Task Force (EITF) reached a consensus on
Issue No. 00-25, Vendor Income Statement Characterization of Consideration Paid 
to a Reseller of the Vendor's Products. EITF No. 00-25 requires the cost of     
certain vendor considerations to be classified as a reduction of revenue rather 
than a marketing expense. The Company will adopt the provisions of EITF No.     
00-25 as of January 1, 2002. The adoption of EITF No. 00-25 will result in      
reclassifications of certain marketing expenses to revenues and will have no    
effect on income from continuing operations. The Company does not anticipate the
adoption of this consensus to significantly affect the growth rate of net       
revenues.                                                                       

 RECLASSIFICATIONS: Certain reclassifications have been made to the December
31, 2000 and 1999 Consolidated Financial Statements to conform with the December
31, 2001 presentation.                                                          

2. ACQUISITIONS, DIVESTITURES AND DISCONTINUED OPERATIONS                       

Discontinued Operations -- Cyanamid Agricultural Products                       

On March 20, 2000, the Company signed a definitive agreement with BASF          
Aktiengesellschaft (BASF) to sell the Cyanamid                                  

40 Wyeth and Subsidiaries                                                       

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Agricultural Products business which manufactures, distributes and sells crop   
protection and pest control products worldwide. On June 30, 2000, the sale was  
completed, and BASF paid the Company $3,800.0 million in cash and assumed       
certain debt. The Company recorded an after-tax loss on the sale of this        
business of $1,573.0 million or $1.20 per share-diluted and reflected this      
business as a discontinued operation in the 2000 first quarter. The loss on the 
sale included closing costs from the transaction and reflected operating income 
of the discontinued business from April 1, 2000 through June 30, 2000 (the      
disposal date). The loss on the sale was due primarily to a difference in the   
basis of the net assets sold for financial reporting purposes compared with the 
Company's basis in such net assets for tax purposes. This difference related,   
for the most part, to goodwill, which is not recognized for tax purposes. As a  
result, the transaction generated a taxable gain requiring the recording of a   
tax provision, in addition to a book loss related to a write-off of net assets  
in excess of the selling price. The Consolidated Financial Statements and       
related Notes for the period ended December 31, 1999 have been restated, where  
applicable, to reflect the Cyanamid Agricultural Products business as a         
discontinued operation.                                                         

Operating results of discontinued operations were as follows:             

(In thousands except per share amounts)                                         

                                                        [Enlarge/Download Table]

                                                              STATEMENT OF OPERATIONS  
                                                             ------------------------- 
Years Ended December 31,                                         2000             1999 
-------------------------------------------------------------------------------------- 
                                                                                       
Net revenue                                               $   546,790       $1,668,980 
                                                          ---------------------------- 
Income (loss) before federal and foreign taxes                160,635          (18,327)
Provision for federal and foreign taxes                        57,289            1,551 
                                                          ---------------------------- 
Income (loss) from operations of discontinued                                          
   agricultural products business                             103,346          (19,878)
Loss on disposal of agricultural products                                              
   business (including federal and foreign                                             
   tax charges of $855,248)                                (1,572,993)              -- 
                                                          ---------------------------- 
Loss from discontinued operations                         $(1,469,647)      $  (19,878)
                                                          ============================ 
Diluted loss per share from                                                            
   discontinued operations                                $     (1.12)      $    (0.02)
                                                          ============================ 


Immunex Transactions:                                                           

2001 Proposed Acquisition of Immunex by Amgen                                   

In December 2001, Amgen Inc. and Immunex signed a definitive agreement providing
for Amgen, the world's largest biotechnology company, to acquire Immunex in a   
merger transaction. Under the terms of the agreement, each share of Immunex     
common stock will be exchanged for 0.44 shares of Amgen common stock and $4.50  
in cash. The transaction has been structured as a tax-free reorganization, and  
Immunex shareholders will not be taxed to the extent that they receive Amgen    
stock.                                                                          

As part of the agreement, Amgen will acquire the 41% ownership in Immunex 
held by the Company at December 31, 2001 for the same consideration per share,  
providing the Company with over $1,000.0 million in cash and approximately an 8%
ownership in Amgen. The Company has agreed to vote its shares in favor of the   
transaction. The transaction is anticipated to close in the second half of 2002,
subject to approval by shareholders of both companies, as well as customary     
regulatory approvals. The Company and Immunex co-promote ENBREL in the United   
States and Canada with the Company having exclusive international rights to the 
product. The financial aspects of the existing licensing and marketing rights to
ENBREL remain unchanged.                                                        

2000 Transactions in Immunex Common Stock                                       

In October 2000, the Company increased its ownership in Immunex from            
approximately 53% to approximately 55% by converting a $450.0 million           
convertible subordinated note into 15,544,041 newly issued shares of common     
stock of Immunex. In November 2000, through a public equity offering, the       
Company sold 60.5 million shares of Immunex common stock, and Immunex sold 20   
million shares of newly issued Immunex common stock. Proceeds to the Company    
were approximately $2,404.9 million resulting in a gain on the sale of $2,061.2 
million ($1,414.9 million after-tax or $1.08 per share-diluted). Included in the
gain on the sale was a noncash pre-tax gain of $303.2 million ($200.2 million   
after-tax), representing the Company's increase in its proportionate share of   
the net book value of Immunex from Immunex's issuance of 20 million shares of   
its common stock at a price above the net book value per share owned by the     
Company. The Company used the net proceeds from the sale of its Immunex common  
stock to reduce outstanding commercial paper and for other general corporate    
purposes.                                                                       

The public equity offering reduced the Company's ownership in Immunex from
approximately 55% to approximately 41%, which represented the ownership at      
December 31, 2001 and 2000. As a result of the reduction in ownership below 50%,
the Company included the financial results of Immunex on an equity basis        
retroactive to January 1, 2000.                                                 

3. TERMINATION FEE, GOODWILL IMPAIRMENT AND SPECIAL CHARGES                     

Termination Fee                                                                 

On November 3, 1999, the Company and Warner-Lambert Company entered into an     
agreement to combine the two companies in a merger-of-equals transaction. On    
February 6, 2000, the merger agreement was terminated. The Company recorded     
income of $1,709.4 million ($1,111.1 million after-tax or $0.85 per             
share-diluted) resulting from the receipt of a $1,800.0 million termination fee 
provided for under the merger agreement offset, in part, by certain related     
expenses.                                                                       

Goodwill Impairment                                                             

Based on projected profitability and future cash flows associated with generic  
pharmaceuticals and the SOLGAR consumer health care product line, it was        
determined that goodwill related to                                             

                                               Wyeth and Subsidiaries 41

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these product lines, at December 31, 2000, was impaired. As a result, the       
Company recorded a charge of $401.0 million ($341.0 million after-tax or $0.26  
per share-diluted) in 2000 to write down the carrying value of goodwill, to fair
value, based upon discounted future cash flows.                                 

Special Charges:                                                                

Voluntary Market Withdrawals                                                    

In November 2000, the U.S. Food and Drug Administration (FDA) requested that the
pharmaceutical industry voluntarily stop producing and distributing products    
containing phenylpropanolamine (PPA). The Company immediately ceased global     
production and shipments of any products containing PPA and voluntarily withdrew
any such products from customer warehouses and retail store shelves. As a       
result, the Company recorded a special charge of $80.0 million ($52.0 million   
after-tax or $0.04 per share-diluted) to provide primarily for product returns  
and the write-off of inventory. The Company already had reformulated a majority 
of the products involved in the voluntary market withdrawal and began shipping  
these products in the United States at the end of November 2000. At December 31,
2001, all amounts provided for the PPA voluntary market withdrawal had been     
utilized.                                                                       

During the 1999 second quarter, the Company recorded a special charge     
aggregating $82.0 million ($53.0 million after-tax or $0.04 per share-diluted)  
for estimated costs associated with the suspension of shipments and the         
voluntary market withdrawal of ROTASHIELD, the Company's rotavirus vaccine. At  
December 31, 2001, all amounts provided for the ROTASHIELD voluntary market     
withdrawal had been utilized.                                                   

Product Discontinuations                                                        

During the 2000 fourth quarter, the Company recorded a special charge of $267.0 
million ($173.0 million after-tax or $0.13 per share-diluted) related to the    
discontinuation of certain products manufactured at the Company's Marietta,     
Pennsylvania and Pearl River, New York facilities. Approximately $227.1 million 
related to noncash costs for fixed asset impairments and inventory write-offs,  
with the remainder of the charge covering severance obligations, idle plant     
costs and contract termination costs. During 2001, approximately $7.8 million of
these costs were paid, leaving an accrual of $32.1 million at December 31, 2001.
The timing of the remaining costs to be incurred has been delayed as the Company
has continued to produce certain products in response to a potential market     
shortage for these products and the related medical necessity. As a result, the 
majority of the remaining costs will not be expended until 2003.                

Restructuring Charge and Related Asset Impairments                              

In December 1998, the Company recorded a special charge for restructuring and   
related asset impairments of $321.2 million ($224.8 million after-tax or $0.17  
per share-diluted) to recognize the costs of the reorganization of the          
pharmaceutical and nutritional supply chains (primarily in the Asian-Pacific and
Latin American regions), the reorganization of the U.S. pharmaceutical and      
consumer health care distribution systems, and a reduction in personnel from the
globalization of certain business units. The reorganization of the              
pharmaceutical and nutritional supply chains will result in the closure of 14   
plants (nine pharmaceutical and five nutritional). The reorganization of the    
U.S. pharmaceutical and consumer health care distribution systems resulted in   
the closure of three distribution centers. The restructuring ultimately will    
result in the elimination of 3,900 positions offset, in part, by 1,000 newly    
created positions in the same functions at other locations. The components of   
this charge were as follows: (i) personnel costs of $120.0 million, (ii) noncash
costs for fixed asset write-offs of $115.2 million and (iii) other closure/exit 
costs of $86.0 million. The noncash costs of $115.2 million reduced the carrying
value of the fixed assets to their estimated fair value, taking into            
consideration depreciation expected during the transition period, which was     
determined by experience with similar properties and external appraisals. These 
fixed assets, with a fair value of $11.6 million, have remained operational     
during the transition period of obtaining the necessary regulatory approvals to 
relocate these operations to new and existing facilities. Since these fixed     
assets have remained in use, depreciation was not suspended and will be         
recognized over the transition period. Other closure/exit costs are a direct    
result of the restructuring plan. The majority of the other closure/exit costs  
are anticipated to be paid after the facilities cease production and prior to   
disposition. These costs include non-cancelable operating leases, security,     
utilities, maintenance, property taxes and other related costs that will be paid
during the disposal period. Due to the specialized nature of these facilities,  
the majority of the costs will be paid over a two- to three-year period as      
product transfers are approved by regulatory authorities and manufacturing sites
are closed. However, delays in obtaining certain regulatory approvals and other 
closure delays will cause certain costs to be paid after that period.           

  At December 31, 2001, approximately 3,700 positions had been eliminated, and
two distribution centers owned by the Company and a leased distribution center  
had been closed. Of 14 manufacturing plants originally anticipated to be closed,
eight were closed in 2000 and two were closed during 2001. The Company currently
anticipates utilizing the remainder of the restructuring accruals in 2002,      
assuming no further delays in regulatory approvals.                             

42 Wyeth and Subsidiaries                                                       

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Activity in the restructuring accruals from continuing operations was as        
follows:                                                                        

                                                        [Enlarge/Download Table]

                                                PERSONNEL    FIXED ASSET  OTHER CLOSURE/               
(In thousands)                                      COSTS     WRITE-OFFS     EXIT COSTS          TOTAL 
------------------------------------------------------------------------------------------------------ 
                                                                                                       
Restructuring accruals at inception             $ 119,975      $ 115,225      $  86,000      $ 321,200 
Cash expenditures                                    (527)            --           (922)        (1,449)
Write-offs of fixed assets                             --       (115,225)            --       (115,225)
                                                ------------------------------------------------------ 
Restructuring accruals at December 31, 1998       119,448             --         85,078        204,526 
Cash expenditures                                 (64,695)            --         (5,817)       (70,512)
                                                ------------------------------------------------------ 
Restructuring accruals at December 31, 1999        54,753             --         79,261        134,014 
Cash expenditures                                 (48,504)            --        (19,626)       (68,130)
                                                ------------------------------------------------------ 
Restructuring accruals at December 31, 2000         6,249             --         59,635         65,884 
Redistributions                                    14,000             --        (14,000)            -- 
Cash expenditures                                 (11,212)            --        (15,016)       (26,228)
                                                ------------------------------------------------------ 
Restructuring accruals at December 31, 2001     $   9,037      $      --      $  30,619      $  39,656 
                                                ====================================================== 

 During the 2001 second quarter, the Company made redistribution adjustments
between categories to increase accrual balances for personnel costs by $14.0    
million and to decrease other closure/exit costs by $14.0 million. These        
redistributions were necessary due to higher than expected enhanced pension     
benefits and outplacement costs for non-U.S. employees, updated forecasts of    
employees within the affected facilities, and lower than expected other         
closure/exit costs. The original scope of the restructuring program remains     
substantially unchanged.                                                        

4. DEBT AND FINANCING ARRANGEMENTS                                              

The Company's debt at December 31 consisted of:                                 

                                                                [Download Table]

(In thousands)                                            2001           2000
-----------------------------------------------------------------------------
                                                                             
Commercial paper                                    $4,817,205     $  798,029
Notes payable:                                                               
   6.50% notes due 2002                                250,000        250,000
   5.875% notes due 2004                               500,000             --
   7.90% notes due 2005                              1,000,000      1,000,000
   6.25% notes due 2006                              1,000,000             --
   6.70% notes due 2011                              1,500,000             --
   7.25% debentures due 2023                           250,000        250,000
Pollution control and industrial revenue bonds:                              
   1.8% - 5.8% due 2006 - 2020                          83,950         85,150
Other debt:                                                                  
   0.5% - 17.0% due 2002 - 2009                         40,674         70,328
Fair value of interest rate swaps                       12,802             --
                                                -----------------------------
                                                     9,454,631      2,453,507
Less current portion                                 2,097,354         58,717
                                                -----------------------------
                                                    $7,357,277     $2,394,790
                                                =============================

The fair value of the Company's outstanding debt was $9,607.7 million and 
$2,506.6 million at December 31, 2001 and 2000, respectively. The fair value of 
the Company's outstanding debt was estimated based on market prices.            

The weighted average interest rate on the commercial paper outstanding at 
December 31, 2001 and 2000 was 2.09% and 6.45%, respectively. The commercial    
paper had original maturities that did not exceed 270 days and a weighted       
average remaining maturity of 37 days and 35 days at December 31, 2001 and 2000,
respectively.                                                                   

Revolving Credit Facilities                                                     

The Company maintains a $2,000.0 million credit facility, which supports        
borrowings under the commercial paper program and terminates on July 31, 2002.  
Since the $2,000.0 million credit facility terminates in less than one year,    
commercial paper outstanding of $1,817.2 million, supported by this facility,   
was classified as current debt in Loans payable as of December 31, 2001.        

In addition, in March 2001, the Company obtained new credit facilities    
totaling $6,000.0 million. The new credit facilities included a $3,000.0        
million, 364-day credit facility (which also supports borrowings under the      
commercial paper program) and a 364-day bridge facility to capital markets,     
which was terminated on March 30, 2001 as discussed below. Any borrowings under 
the new 364-day credit facility that are outstanding upon its termination in    
March 2002 are extendible for an additional year. The portion of commercial     
paper outstanding at December 31, 2001 supported by the $3,000.0 million,       
364-day credit facility was classified as Long-term debt since the Company      
intends, and has the ability, to refinance these obligations through the        
issuance of additional commercial paper or through the use of its $3,000.0      
million credit facility as described above.                                     

The proceeds from the credit facilities may be used to support commercial 
paper and the Company's general corporate and working capital requirements,     
including payments related to the REDUX and PONDIMIN diet drug litigation. The  
credit facilities contain substantially identical financial and other covenants,
representations, warranties, conditions and default provisions. At December 31, 
2001 and 2000, there were no borrowings outstanding under the facilities.       

                                                       Wyeth and Subsidiaries 43

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In March 2002, subsequent to the date of the "Report of Independent Public      
Accountants," the Company renewed the $3,000.0 million credit facility for an   
additional 364-day term and reduced the $2,000.0 million credit facility to     
$1,000.0 million until it matures on July 31, 2002.                             

Bridge Facility and Notes                                                       

The new credit facilities also included a $3,000.0 million, 364-day bridge      
facility, which was terminated when the Company issued $3,000.0 million of      
Senior Notes (the Notes) on March 30, 2001. These Notes consisted of three      
tranches, which pay interest semiannually on March 15 and September 15, in a    
transaction exempt from registration under the Securities Act of 1933, as       
amended (the Securities Act), pursuant to Rule 144A, as follows:                

- $500.0 million 5.875% Notes due March 15, 2004                          

- $1,000.0 million 6.25% Notes due March 15, 2006                         

- $1,500.0 million 6.70% Notes due March 15, 2011                         

As of June 15, 2001, pursuant to an exchange offer made by the Company,   
substantially all the Notes had been exchanged for new notes which have         
substantially identical terms and which have been registered under the          
Securities Act.                                                                 

 The interest rate payable on each series of Notes is subject to an increase
of 0.25 percentage points per level of downgrade in the Company's credit rating 
by Moody's or S&P. However, the total adjustment to the interest rate for the   
series of Notes cannot exceed two percentage points. There is no adjustment to  
the interest rate payable on each series of Notes for the first single level    
downgrade in the Company's credit rating by S&P. In the case of the $1,500.0    
million 6.70% Notes, the interest rate in effect on March 15, 2006 for such     
Notes will, thereafter, become the effective interest rate until maturity on    
March 15, 2011. The Company would incur a total of approximately $7.5 million of
additional annual interest expense for every 0.25 percentage point increase in  
the interest rate. If Moody's or S&P subsequently were to increase the Company's
credit rating, the interest rate payable on each series of Notes is subject to a
decrease of 0.25 percentage points for each level of credit rating increase. The
interest rate payable for the series of Notes cannot be reduced below the       
original coupon rate of each series of Notes.                                   

The Company entered into two $750.0 million notional amount interest rate 
swaps relating to the $1,500.0 million 6.70% Notes under which the Company      
effectively converted the fixed rate on these Notes to a floating rate of       
interest which is based on LIBOR. See Note 7 for further discussion of the      
interest rate swaps.                                                            

   In addition to the $3,000.0 million of Notes described above, the Company has
outstanding the following non-callable, unsecured and unsubordinated debt       
instruments:                                                                    

   - $250.0 million 6.50% Notes due October 2002, interest payments due on April
15 and October 15                                                     

- $1,000.0 million 7.90% Notes due February 2005, interest payments due on
February 15 and August 15                                             

- $250.0 million 7.25% debentures due March 2023, interest payments due on
March 1 and September 1                                               

   The aggregate maturities of debt during the next five years and thereafter at
December 31, 2001 are as follows:                                               

                                                                [Download Table]

(In thousands)                                                                  
--------------------------------------------------------------------------------
                                                                                
2002                                             $2,097,354                     
2003                                                  7,929                     
2004                                                505,917                     
2005                                              1,001,380                     
2006                                              1,012,480                     
Thereafter                                        1,829,571                     
                                                  ---------                     
                                                  6,454,631                     
Commercial paper classified as Long-term debt     3,000,000                     
                                                  ---------                     
Total debt                                       $9,454,631                     
                                                 ==========                     

 Interest payments in connection with the Company's debt obligations for the
years ended December 31, 2001, 2000 and 1999 amounted to $331.7 million, $343.0 
million and $294.8 million, respectively.                                       

Interest expense, net included interest income of $154.8 million, $181.3  
million and $129.4 million in 2001, 2000 and 1999, respectively. Interest       
capitalized in connection with capital projects was $94.3 million, $43.3 million
and $15.4 million in 2001, 2000 and 1999, respectively.                         

5. OTHER NONCURRENT LIABILITIES                                                 

Other noncurrent liabilities include reserves for the REDUX and PONDIMIN        
litigation (see Note 12), reserves relating to income taxes, environmental      
matters, product liability and other litigation, as well as restructuring,      
pension and other employee benefit liabilities, and minority interests.         

The Company has responsibility for environmental, safety and cleanup      
obligations under various local, state and federal laws, including the          
Comprehensive Environmental Response, Compensation and Liability Act, commonly  
known as Superfund. At December 31, 2001, the Company was a party to, or        
otherwise involved in, legal proceedings directed at the cleanup of 53 Superfund
sites.                                                                          

   It is the Company's policy to accrue for environmental cleanup costs if it is
probable that a liability has been incurred and an amount is reasonably         
estimable. In many cases, future environmental-related expenditures cannot be   
quantified with a reasonable degree of accuracy. Environmental expenditures that
relate to an existing condition caused by past operations that do not contribute
to current or future results of operations are expensed. As investigations and  
cleanups proceed, environmental-related liabilities are reviewed and adjusted as
additional information becomes available. The aggregate environmental-related   
accruals were $364.2 million and $378.6 million at December 31, 2001 and 2000,  
respectively. Environmental-related accruals have been recorded without giving  
effect to any possible future                                                   

44 Wyeth and Subsidiaries                                                       

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insurance proceeds or the timing of payments. See Note 12 for discussion of     
contingencies.                                                                  

In 2000, the Company introduced a new incentive program to employees, the 
Performance Incentive Award Program (PIA), which awards employees based on the  
Company's operating results and the individual employee's performance.          
Substantially all U.S. and Puerto Rico exempt employees, who are not subject to 
other incentive programs, and key international employees are eligible to       
receive cash awards under PIA. The value of PIA awards for 2001 and 2000 was    
$117.3 million and $94.7 million, respectively. In 1999, cash bonuses totaling  
$38.8 million were paid to key employees. Through 1998, the Company provided    
incentive awards under the Management Incentive Plan (MIP), which provided for  
cash and deferred contingent common stock awards to key employees. Deferred     
contingent common stock awards plus accrued dividends, related to the MIP       
program, totaling 875,206 shares were outstanding at December 31, 2001.         

6. PENSIONS AND OTHER POSTRETIREMENT BENEFITS                                   

PENSIONS: The Company sponsors various retirement plans for most full-time      
employees. These defined benefit and defined contribution plans cover all U.S.  
and certain international locations. Total pension expense from continuing      
operations for both defined benefit and defined contribution plans for 2001,    
2000 and 1999 was $141.9 million, $107.7 million and $95.5 million,             
respectively. Pension expense from continuing operations for defined            
contribution plans for 2001, 2000 and 1999 totaled $67.0 million, $62.9 million 
and $61.6 million, respectively.                                                

Pension plan benefits for defined benefit plans are based primarily on    
participants' compensation and years of credited service. Investment            
responsibility for the pension plan assets is assigned to outside investment    
managers and is limited to certain asset allocation criteria and investment     
guidelines established by the Company. Employees do not have any ability to     
determine the investment allocation of the pension plan assets.                 

Generally, contributions to defined contribution plans are based on a     
percentage of the employee's compensation. The Company's 401(k) savings plans   
have been established for substantially all U.S. employees. Certain employees   
are eligible to enroll in the plan on their hire date and can contribute between
1% and 16% of their annual pay. The Company provides a matching contribution to 
eligible participants of 50% on the first 6% of annual pay contributed to the   
plan, or a maximum of 3% of annual pay. Employees can direct their contributions
and the Company's matching contributions into any of the funds offered. These   
funds provide participants with a cross section of investing options, including 
the Company's common stock. All contributions to the Company's common stock,    
whether by employee or employer, can be transferred to other fund choices daily.

OTHER POSTRETIREMENT BENEFITS: The Company provides postretirement health 
care and life insurance benefits for retired employees of most domestic         
locations and Canada. Most full-time employees become eligible for these        
benefits after attaining specified age and service requirements.                

   Although the Company sold the Cyanamid Agricultural Products business in 2000
(see Note 2), which was accounted for as a discontinued operation, the pensions 
and other postretirement benefits were excluded from the sale for U.S. plans    
since employees of the Cyanamid Agricultural Products business accrued benefits 
in plans that encompassed other business segments. Except for one pension plan  
in Germany, all international plans will continue to be maintained by the       
Company to pay benefits that were accrued prior to the sale. Accordingly,       
projected benefit obligations, fair value of plan assets and (prepaid)/accrued  
benefit costs were not restated, except to reflect the sale of the pension plan 
in Germany. However, components of net periodic benefit cost from continuing    
operations were restated to reflect the Cyanamid Agricultural Products business 
as a discontinued operation.                                                    

The change in projected benefit obligation, change in plan assets,        
reconciliation of funded status and amounts recognized in the Consolidated      
Balance Sheets for the Company's defined benefit plans (principally U.S. plans) 
for 2001 and 2000 were as follows:                                              

                                                        [Enlarge/Download Table]

                                                                     PENSIONS               OTHER POSTRETIREMENT BENEFITS   
                                                         -----------------------------     -------------------------------- 
CHANGE IN PROJECTED BENEFIT OBLIGATION (In thousands)              2001           2000               2001              2000 
--------------------------------------------------------------------------------------------------------------------------- 
                                                                                                                            
Projected benefit obligation at January 1                    $3,210,575     $3,005,665         $1,020,330        $1,076,298 
Consolidation of Japan benefit plan                                  --        186,327                 --                -- 
Service cost                                                     78,634         74,656             24,179            20,460 
Interest cost                                                   226,786        225,248             76,966            77,666 
Service and interest cost -- discontinued operations                 --          3,074                 --             2,189 
Amendments                                                        9,796         11,235                 --            16,952 
Net actuarial loss/(gain)                                       104,938         71,158            227,758           (72,589)
Curtailments/settlements                                             --        (39,826)                --           (24,289)
Benefits paid                                                  (284,603)      (296,613)           (78,516)          (75,900)
Currency translation adjustment                                 (30,094)       (30,349)              (632)             (457)
                                                             -------------------------------------------------------------- 
Projected benefit obligation at December 31                  $3,316,032     $3,210,575         $1,270,085        $1,020,330 
                                                             ============================================================== 

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\                                                                               

                                                        [Enlarge/Download Table]


                                                        PENSIONS              OTHER POSTRETIREMENT BENEFITS 
                                             ----------------------------     ----------------------------- 
CHANGE IN PLAN ASSETS (In thousands)                2001             2000             2001             2000 
----------------------------------------------------------------------------------------------------------- 
                                                                                                            
Fair value of plan assets at January 1       $ 2,816,016      $ 3,001,154               --               -- 
Consolidation of Japan benefit plan                   --           76,089               --               -- 
Actual return on plan assets                    (213,908)          34,607               --               -- 
Amendments                                         6,754               --               --               -- 
Company contributions                            429,710           17,554      $    78,516      $    75,900 
Benefits paid                                   (284,603)        (296,613)         (78,516)         (75,900)
Currency translation adjustment                  (15,347)         (16,775)              --               -- 
                                             -------------------------------------------------------------- 
Fair value of plan assets at December 31     $ 2,738,622      $ 2,816,016      $        --      $        -- 
                                             ============================================================== 

                                                        [Enlarge/Download Table]


                                                        PENSIONS              OTHER POSTRETIREMENT BENEFITS 
(In thousands)                               --------------------------       ----------------------------- 
RECONCILIATION OF FUNDED STATUS                   2001             2000               2001             2000 
----------------------------------------------------------------------------------------------------------- 
                                                                                                            
Funded status                              $   577,410      $   394,559        $ 1,270,085      $ 1,020,330 
Unrecognized net actuarial loss               (603,051)         (44,225)          (243,292)         (15,603)
Unrecognized prior service cost                (57,193)         (60,502)           (16,695)         (18,698)
Unrecognized net transition obligation          (5,301)          (8,266)                --               -- 
                                           ---------------------------------------------------------------- 
(Prepaid)/accrued benefit costs            $   (88,135)     $   281,566        $ 1,010,098      $   986,029 
                                           ================================================================ 


                                                                [Download Table]

                                                      PENSIONS          
(In thousands)                            ----------------------------  
AMOUNTS RECOGNIZED IN THE                                               
CONSOLIDATED BALANCE SHEETS                       2001             2000 
----------------------------------------------------------------------- 
                                                                        

Prepaid benefit cost                       $  (212,967)     $    (8,537)
Accrued benefit liability                      124,832          290,103 

 In December 2001, the Company made a $400.0 million funding contribution to
the U.S. Non-bargaining defined benefit pension plan (largest U.S. plan) due    
primarily to the decrease in the plan assets and, as a result, the anticipation 
of future statutory funding requirements. The decline in the global equity      
markets that occurred during 2001 contributed significantly to the decrease in  
the plan assets. The impact of the negative market returns was attributable to  
most of the increase in the unrecognized net actuarial loss since the difference
between the expected return and actual return on plan assets is deferred. The   
net actuarial loss for other postretirement benefits of $227.8 million in 2001  
resulted primarily from a change in the assumption for future increases in per  
capita cost of health care benefits and other changes in actuarial assumptions. 

There were no plan assets for the Company's other postretirement benefit  
plans at December 31, 2001 and 2000 as postretirement benefits are funded by the
Company when claims are paid. The current portion of the accrued benefit        
liability for other postretirement benefits was $85.0 million and $75.0 million 
at December 31, 2001 and 2000, respectively.                                    

At December 31, 2001 and 2000, the accumulated benefit obligations, which 
represent the obligations of the defined benefit plans if the plans were        
terminated and before considering plan assets, were $2,971.8 million and        
$2,934.0 million, respectively.                                                 

  Assumptions used in developing the projected benefit obligations at December
31 were as follows:                                                             

                                                        [Enlarge/Download Table]

                                                                       PENSIONS                     OTHER POSTRETIREMENT BENEFITS   
WEIGHTED AVERAGE ASSUMPTIONS                                  ----------------------------        --------------------------------- 
AT DECEMBER 31,                                               2001       2000         1999        2001           2000          1999 
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                                                                                    
Discount rate                                                 7.25%       7.5%        7.75%       7.25%           7.5%         7.75%
Rate of compensation increase                                  4.0%       4.0%         4.5%         --             --            -- 
Expected return on plan assets                                9.25%       9.5%         9.5%         --             --            -- 
Increases in per capita cost of health care benefits                                                                                
   that gradually decreases and is held constant                                                                                    
   thereafter beginning in 2005                                 --         --           --    9.5%-5.0%      7.0%-5.0%     7.5%-5.0%

The assumed health care cost trend rates have a significant effect on the 
amounts reported. A one percentage point increase in the assumed health care    
cost trend rates would increase the postretirement benefit obligation by $146.4 
million and the total service and interest cost components from continuing      
operations by $13.7 million. A one percentage point decrease in the             

46 Wyeth and Subsidiaries                                                       

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assumed health care cost trend rates would decrease the postretirement benefit  
obligation by $122.3 million and the total service and interest cost components 
from continuing operations by $11.3 million.                                    

  Net periodic benefit cost from continuing operations for 2001, 2000 and 1999
of the Company's defined benefit plans (principally U.S. plans) was as follows: 

                                                        [Enlarge/Download Table]

                                                                     PENSIONS                     OTHER POSTRETIREMENT BENEFITS    
COMPONENTS OF NET PERIODIC BENEFIT COST               ------------------------------------     ------------------------------------
FROM CONTINUING OPERATIONS (In thousands)                  2001           2000         1999         2001          2000         1999
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
Service cost                                          $  78,634      $  74,656    $  69,056    $  24,179     $  20,460    $  23,001
Interest cost                                           226,786        225,248      211,971       76,966        77,666       74,871
Expected return on plan assets                         (246,449)      (270,131)    (260,323)          --            --           --
Amortization of prior service cost                       11,720         10,704       10,734        2,003           330          339
Amortization of transition obligation                     1,999          2,184        1,114           --            --           --
Recognized net actuarial loss                             2,250          2,091        2,827          127           134        6,852
Curtailment gain                                             --             --       (1,502)          --            --           --
                                                      -----------------------------------------------------------------------------
Net periodic benefit cost from continuing operations  $  74,940      $  44,752    $  33,877    $ 103,275     $  98,590    $ 105,063
                                                      =============================================================================

Net periodic pension benefit cost from continuing operations was higher in
2001 compared with 2000 due primarily to the decrease in the expected return on 
plan assets of the U.S. pension plans. The fair value of the U.S. pension plan  
assets between 2000 and 1999 decreased by $270.2 million, which negatively      
affected the amount of expected return on plan assets for 2001. Net periodic    
pension benefit cost from continuing operations was higher in 2000 compared with
1999 due primarily to consolidating a subsidiary in Japan effective January 1,  
2000 (see Note 1).                                                              

 As a result of the sale of the Cyanamid Agricultural Products business, the
Company realized a curtailment gain related to the pension plans of $25.5       
million. This curtailment gain was recorded in Loss on disposal of agricultural 
products business.                                                              

7. DERIVATIVE INSTRUMENTS AND FOREIGN CURRENCY RISK MANAGEMENT PROGRAMS         

As of January 1, 2001, the Company adopted SFAS Nos. 133 and 138, which require 
that all derivative financial instruments be measured at fair value and be      
recognized as assets or liabilities on the balance sheet with changes in the    
fair value of the derivatives recognized in either income (loss) from continuing
operations or accumulated other comprehensive income (loss), depending on the   
timing and designated purpose of the derivative. The fair value of forward      
contracts and interest rate swaps reflects the present value of the future      
potential gain if settlement were to take place on December 31, 2001, with the  
fair value of option contracts reflecting the present value of future cash flows
if the contract were settled on December 31, 2001. The impact on the Company's  
financial position, results of operations and cash flows, upon adoption of these
pronouncements, was immaterial.                                                 

  The Company currently engages in two primary programs to manage its exposure
to foreign currency risk. The two programs and the corresponding derivative     
contracts outstanding as of December 31, 2001 were as follows:                  

1.  Short-term foreign exchange forward contracts and swap contracts are used to
 neutralize month-end balance sheet exposures. These contracts essentially
take the opposite currency position of that projected in the month-end  
  balance sheet to counterbalance the effect of any currency movement. These
    derivative instruments are not designated as hedges and are recorded at fair
value with any gains or losses recognized in current period earnings in 
accordance with the requirements of SFAS Nos. 133 and 138. In 2001, the 
 Company recorded a gain of $28.7 million in Other income, net relating to
gains and losses on these foreign exchange forward contracts and swap   
contracts. The $28.7 million consists of gains and losses from contracts
  settled during 2001, as well as contracts outstanding at December 31, 2001
that are recorded at fair value.                                        

2.  The Company uses foreign currency put options and foreign currency forward  
 contracts in its cash flow hedging program to cover foreign currency risk
    related to international intercompany inventory sales. These instruments are
 designated as cash flow hedges, and, in accordance with SFAS Nos. 133 and
138, any unrealized gains or losses are included in accumulated other   
comprehensive income (loss) with the corresponding asset or liability   
recorded in the balance sheet. As of December 31, 2001, $4.4 million    
 after-tax of net gains relating to these cash flow hedges was included in
Accumulated other comprehensive loss with the corresponding             
assets/liabilities recorded in Other current assets including deferred  
taxes/Accrued expenses. The unrealized net gains in Accumulated other   
  comprehensive loss will be reclassified into the Consolidated Statement of
Operations when the intercompany inventory is sold to a third party. As 
 such, the Company anticipates recognizing these net gains during the next
   six months. Put option contracts outstanding as of December 31, 2001 expire
no later than June 2002.                                                

     Occasionally the Company purchases foreign currency put options outside
of the cash flow hedging program to protect additional intercompany     
inventory sales. These put                                              

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options do not qualify as cash flow hedges under SFAS Nos. 133 and 138 and
were recorded at fair value with all gains or losses, which were not      
significant, recognized in current period earnings immediately.           

  In addition to the programs identified above, the Company has entered into a
foreign exchange forward contract to hedge against foreign exchange fluctuations
on a yen denominated long-term intercompany loan to the Company's Japanese      
subsidiary. The forward contract has been designated as and qualifies for       
foreign currency cash flow hedge accounting treatment. As of December 31, 2001, 
the Company had recorded gains of $3.5 million after-tax in Accumulated other   
comprehensive loss relating to this foreign exchange forward contract.          

   The Company also has entered into interest rate swaps to manage interest rate
exposures. The Company strives to achieve a desired balance between fixed-rate  
and floating-rate debt and has entered into two effective fair value interest   
rate swaps on its $1,500.0 million 6.70% Notes to ensure this desired balance   
between fixed-rate and floating-rate debt. The interest rate swaps effectively  
converted a portion of the Company's fixed-rate debt into floating-rate debt.   
Interest expense on the $1,500.0 million 6.70% Notes is adjusted to include the 
payments made or received under the interest rate swap agreements. The fair     
value of the swaps relating to the $1,500.0 million 6.70% Notes, as of December 
31, 2001, excluding accrued interest, was an asset of $12.8 million and has been
recorded in Other assets including deferred taxes with the corresponding        
adjustment recorded to the underlying 6.70% Notes in Long-term debt.            

8. CAPITAL STOCK                                                                

There were 2,400,000,000 shares of common stock and 5,000,000 shares of         
preferred stock authorized at December 31, 2001 and 2000. Of the authorized     
preferred shares, there is a series of shares (20,486 and 21,948 outstanding at 
December 31, 2001 and 2000, respectively) which is designated as $2.00          
convertible preferred stock. Each share of the $2.00 series is convertible at   
the option of the holder into 36 shares of common stock. This series may be     
called for redemption at $60.00 per share plus accrued dividends.               

 On October 7, 1999, the Company's Board of Directors declared a dividend of
one preferred share purchase right for each share of common stock outstanding on
October 18, 1999. The rights also apply to all future stock issuances. Each     
right permits the holder, under certain circumstances and upon the occurrence of
certain events, to purchase from the Company one one-thousandth of a share of   
Series A Junior Participating Preferred Stock of the Company (the Series A      
Preferred Stock) at an exercise price of $225 per one one-thousandth of a share 
of Series A Preferred Stock under a Rights Plan relating to such Series A       
Preferred Stock. The 5,000,000 shares of preferred stock authorized will be used
for the exercise of any preferred share purchase rights. The Rights Plan has    
provisions that are triggered if any person or group acquires beneficial        
ownership of 15% or more of the outstanding common stock or acquires the Company
in a merger or other business combination (an Acquiring Person). In such event, 
stockholders (other than the Acquiring Person) would receive stock of the       
Company or the Acquiring Person, as the case may be, having a market value of   
twice the exercise price along with substantially increased voting and dividend 
rights, among other things. The rights expire on October 7, 2009, and prior to  
there being an Acquiring Person, the Company may redeem the rights issued under 
the Rights Plan for $0.01 per right. The Company can, for so long as the rights 
are then redeemable, supplement or amend the Rights Plan in any respect without 
the approval of any holders of the rights. At any time after the rights are no  
longer redeemable, the Company may supplement or amend the Rights Plan in       
certain respects provided that no such supplement or amendment shall adversely  
affect the interests of the holders of Rights Certificates as such (other than  
an Acquiring Person or an Affiliate or Associate of an Acquiring Person).       

Changes in outstanding common shares during 2001, 2000 and 1999 were as   
follows:                                                                        

                                                                [Download Table]

(In thousands except shares of                                               
preferred stock)                         2001           2000            1999 
---------------------------------------------------------------------------- 
                                                                             
Balance at January 1                1,311,774      1,303,916       1,312,399 
Issued for stock options                8,550         15,123          10,589 
Purchases of common stock                                                    
   for treasury                            --         (7,414)        (19,226)
Conversions of preferred stock                                               
   (1,462, 2,293 and 1,239                                                   
   shares in 2001, 2000 and                                                  
   1999, respectively) and                                                   
   other exchanges                        246            149             154 
                                    ---------------------------------------- 
Balance at December 31              1,320,570      1,311,774       1,303,916 
                                    ======================================== 

  The Company has a common stock repurchase program under which the Company is
authorized to repurchase common shares. At December 31, 2001, the Company was   
authorized to repurchase 6,492,460 common shares in the future.                 

9. STOCK OPTIONS                                                                

The Company has one Stock Option Plan and four Stock Incentive Plans. No further
grants may be made under the Stock Option Plan or the Stock Incentive Plan      
approved in 1990. Under the Stock Incentive Plans, options to purchase a maximum
of 181,000,000 shares may be granted at prices not less than 100% of the fair   
market value of the Company's common stock on the date the option is granted. At
December 31, 2001, there were 19,974,293 shares available for future grants     
under the Stock Incentive Plans. In January 2002, the Board of Directors        
adopted, subject to stockholder approval at the Company's annual meeting on     
April 25, 2002, the 2002 Stock Incentive Plan under which 65,000,000 shares are 
available for future grants.                                                    

48 Wyeth and Subsidiaries                                                       

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The plans provide for the granting of incentive stock options as defined  
under the Internal Revenue Code. Under the plans, grants may be made to selected
officers and employees of non-qualified stock options with a 10-year term or    
incentive stock options with a term not exceeding 10 years. The plans also      
provide for the granting of stock appreciation rights (SAR), which entitle the  
holder to receive shares of the Company's common stock or cash equal to the     
excess of the market price of the common stock over the exercise price when     
exercised. At December 31, 2001, there were no outstanding SARs.                

  Each Stock Incentive Plan allows for, among other things, the issuance of up
to 8,000,000 shares (24,000,000 shares in the aggregate for all Stock Incentive 
Plans) as restricted stock awards. Restricted stock awards representing 290,995,
148,900 and 148,850 units were granted in 2001, 2000 and 1999, respectively,    
under the plans to certain employees, including key executives. Most of these   
units are converted to shares of restricted stock based on the achievement of   
certain performance criteria related to performance years 1999 through 2005. The
remaining units are converted generally at the end of four years.               

  Under the Stock Option Plan for Non-Employee Directors, a maximum of 250,000
shares may be granted to non-employee directors at 100% of the fair market value
of the Company's common stock on the date of the grant. Stock options granted to
non-employee directors were 36,000, 21,000 and 21,000 in 2001, 2000 and 1999,   
respectively. Shares available for future grants at December 31, 2001 were      
172,000.                                                                        

   Under the 1994 Restricted Stock Plan for Non-Employee Directors, a maximum of
100,000 restricted shares may be granted to non-employee directors. The         
restricted shares granted to each non-employee director are not delivered prior 
to the end of a five-year restricted period. At December 31, 2001, 64,800 shares
were available for future grants.                                               

Stock option information related to the plans was as follows:             

                                                        [Enlarge/Download Table]

                                                           WEIGHTED                      Weighted                      Weighted
                                                            AVERAGE                       Average                       Average
                                                           EXERCISE                      Exercise                      Exercise
STOCK OPTIONS                                   2001          PRICE            2000         Price            1999         Price
-------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               
Outstanding at January 1                  82,751,313         $43.74      85,244,130        $39.13      75,790,629        $30.53
Granted                                   28,360,196          56.89      16,496,678         56.51      21,945,755         62.00
Canceled                                  (2,558,655)         57.36      (3,866,134)        58.32      (1,903,601)        51.83
Exercised (2001 --                                                                                                             
    $14.52 to $62.31 per share)           (8,549,782)         26.74     (15,123,361)        27.90     (10,588,653)        22.76
                                         -----------                     ----------                    ----------              
Outstanding at December 31                                                                                                     
   (2001 -- $14.52 to                                                                                                          
   $65.19 per share)                     100,003,072          48.57      82,751,313         43.74      85,244,130         39.13
                                         -----------                     ----------                    ----------              

Exercisable at December 31                57,205,798          41.93      51,830,094         35.31      52,789,450         28.27
                                         -----------                     ----------                    ----------              

The following table summarizes information regarding stock options    
outstanding at December 31, 2001:                                               

                                                        [Enlarge/Download Table]

                               OPTIONS OUTSTANDING                                              OPTIONS EXERCISABLE               
--------------------------------------------------------------------------------------       -------------------------------------
                                             WEIGHTED AVERAGE         WEIGHTED AVERAGE                            WEIGHTED AVERAGE
       RANGE OF                 NUMBER              REMAINING                 EXERCISE             NUMBER                 EXERCISE
EXERCISE PRICES            OUTSTANDING       CONTRACTUAL LIFE                    PRICE        EXERCISABLE                    PRICE
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  
$14.52 to 19.99             11,672,218              2.4 years                   $17.90         11,672,218                   $17.90
 20.00 to 29.99              4,253,391              3.9 years                    26.34          4,253,391                    26.34
 30.00 to 39.99             12,442,005              4.8 years                    36.18         12,442,005                    36.18
 40.00 to 49.99                624,588              7.1 years                    45.93            446,583                    46.22
 50.00 to 59.99             52,067,568              8.4 years                    55.25         16,380,958                    52.38
 60.00 to 65.19             18,943,302              7.6 years                    62.30         12,010,643                    62.33
                           -----------                                                         ----------                         
                           100,003,072              6.9 years                    48.57         57,205,798                    41.93
                           ===========                                                         ==========                         

 The Company accounts for stock-based compensation using the intrinsic value
method. Accordingly, no compensation expense has been recognized for stock      
options. If compensation expense for the Company's stock options issued in 2001,
2000                                                                            

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and 1999 had been determined based on the fair value method of accounting, the  
Company's net income (loss) and earnings (loss) per share would have been       
adjusted to the pro forma amounts indicated below:                              

                                                                [Download Table]

(In thousands except                                                               
per share amounts)                   2001                2000                 1999 
-----------------------------------------------------------------------------------
                                                                                   
Net income (loss)                                                                  
   less preferred                                                                  
   dividends:                                                                      
     As-reported            $   2,285,252       $  (2,370,733)       $  (1,227,171)
     Pro forma                  2,084,564          (2,520,657)          (1,312,238)
Basic earnings                                                                     
   (loss) per share:                                                               
     As-reported            $        1.74       $       (1.81)       $       (0.94)
     Pro forma                       1.58               (1.93)               (1.00)
Net income (loss):                                                                 
     As-reported            $   2,285,294       $  (2,370,687)       $  (1,227,121)
     Pro forma                  2,084,606          (2,520,611)          (1,312,188)
Diluted earnings                                                                   
   (loss) per share*:                                                              
     As-reported            $        1.72       $       (1.81)       $       (0.94)
     Pro forma                       1.57               (1.93)               (1.00)

* The total weighted average common shares outstanding for diluted loss per     
share for 2000 and 1999 did not include common stock equivalents, as the effect 
would have been antidilutive.                                                   

The fair value of issued stock options is estimated on the date of grant  
using a variant of the Black-Scholes option pricing model incorporating the     
following assumptions for stock options granted in 2001, 2000 and 1999,         
respectively: expected volatility (the amount by which the stock price is       
expected to fluctuate) of 32.1%, 31.2% and 25.0%; expected dividend yield of    
1.6%, 1.6% and 2.2%; risk-free interest rate of 4.8%, 6.3% and 5.6%; and        
expected life of five, five and four years. The weighted average fair value of  
stock options granted during 2001, 2000 and 1999 was $17.76, $18.76 and $14.36  
per option share, respectively.                                                 

10. ACCUMULATED OTHER COMPREHENSIVE LOSS                                        

Accumulated other comprehensive loss consists of changes in foreign currency    
translation adjustments, net unrealized gains on derivative contracts and net   
unrealized gains (losses) on marketable securities. The following table sets    
forth the changes in each component of Accumulated other comprehensive loss:    

                                                        [Enlarge/Download Table]

                                           FOREIGN       NET UNREALIZED       NET UNREALIZED          ACCUMULATED 
                                          CURRENCY             GAINS ON    GAINS (LOSSES) ON                OTHER 
                                       TRANSLATION           DERIVATIVE           MARKETABLE        COMPREHENSIVE 
(In thousands)                         ADJUSTMENTS(1)         CONTRACTS(2)        SECURITIES                 LOSS 
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
Balance January 1, 1999                  $(329,004)                 --               $   667            $(328,337)
Period change                             (285,963)                 --                   815             (285,148)
                                        --------------------------------------------------------------------------
Balance December 31, 1999                 (614,967)                 --                 1,482             (613,485)
Period change                              (70,496)                 --                11,422              (59,074)
                                        --------------------------------------------------------------------------
Balance December 31, 2000                 (685,463)                 --                12,904             (672,559)
Period change                             (166,200)              $7,865               (2,134)            (160,469)
                                        --------------------------------------------------------------------------
Balance December 31, 2001                $(851,663)              $7,865              $10,770            $(833,028)
                                        ==========================================================================

(1) Income taxes are generally not provided for foreign currency translation    
adjustments, as such adjustments relate to permanent investments in             
international subsidiaries.                                                     

(2) Deferred income tax provided for net unrealized gains on derivative         
contracts in 2001 was $1,000.                                                   

11. INCOME TAXES                                                                

The provision (benefit) for federal and foreign income taxes from continuing    
operations consisted of:                                                        

                                                                [Download Table]

(In thousands)                                                   
YEARS ENDED DECEMBER 31,          2001         2000         1999 
-----------------------------------------------------------------
                                                                 
Current:                                                         
   Federal                    $(96,805)   $ 321,484   $  290,020 
   Foreign                     412,438      292,798      419,992 
                              -----------------------------------
                               315,633      614,282      710,012 
Deferred:                                                        
   Federal                     270,144     (836,883)  (1,399,709)
   Foreign                      (2,324)      22,601      (10,359)
                              -----------------------------------
                               267,820     (814,282)  (1,410,068)
                              -----------------------------------
                              $583,453    $(200,000)  $ (700,056)
                              ===================================

Net deferred tax assets inclusive of valuation allowances for certain     
deferred tax assets were reflected on the Consolidated Balance Sheets at        
December 31 as follows:                                                         

                                                                [Download Table]

(In thousands)                                 2001         2000
----------------------------------------------------------------
                                                                
Net current deferred tax assets          $1,526,690   $2,595,662
Net noncurrent deferred tax assets        1,583,599      795,441
                                         -----------------------
Net deferred tax assets                  $3,110,289   $3,391,103
                                         =======================

Deferred income taxes are provided for temporary differences between the  
financial reporting basis and the tax basis of the Company's assets and         
liabilities. Deferred tax assets result principally from the recording of       
certain accruals and reserves, which currently are not deductible for tax       
purposes, as well as net operating loss carryforwards generated primarily from  
deductible payments associated with the REDUX and PONDIMIN diet drug            

50 Wyeth and Subsidiaries                                                       

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litigation. Deferred tax liabilities result principally from tax on earnings    
expected to be remitted to the United States and the use of accelerated         
depreciation for tax purposes.                                                  

The components of the Company's deferred tax assets and liabilities at    
December 31 were as follows:                                                    

                                                                [Download Table]

(In thousands)                                     2001            2000 
----------------------------------------------------------------------- 
                                                                        
Deferred tax assets:                                                    
   Diet drug product litigation accruals    $   650,192     $ 2,857,951 
   Product litigation and environmental                                 
     liabilities and other accruals             660,282         760,827 
   Postretirement, pension and other                                    
     employee benefits                          536,676         592,709 
   Net operating loss and other tax                                     
     credit carryforwards                     1,756,522           4,134 
   Goodwill impairment                           52,837          60,000 
   Restructuring and product                                            
     discontinuations                           113,638         129,143 
   Inventory reserves                           127,175          94,393 
   Investments and advances                      31,869          38,894 
   Research and development costs               554,521              -- 
   Intangibles                                   58,538          51,568 
   Other                                         40,375          63,437 
                                            --------------------------- 
Total deferred tax assets                     4,582,625       4,653,056 
                                            --------------------------- 
Deferred tax liabilities:                                               
   Tax on earnings expected to be                                       
     remitted to the United States             (700,000)       (700,000)
   Depreciation                                (370,916)       (277,512)
   Pension benefits and other                                           
     employee benefits                         (140,004)        (54,751)
   Equity investments                          (110,204)       (102,945)
   Other                                       (101,630)        (75,592)
                                            --------------------------- 
Total deferred tax liabilities               (1,422,754)     (1,210,800)
                                            --------------------------- 
Deferred tax asset valuation allowances         (49,582)        (51,153)
                                            --------------------------- 
Net deferred tax assets                     $ 3,110,289     $ 3,391,103 
                                            =========================== 

Valuation allowances have been established for certain deferred tax assets
related to environmental liabilities and other operating accruals as the Company
determined that it was more likely than not that these benefits will not be     
realized. During 2001 and 2000, the valuation allowance decreased by $1.6       
million and $100.3 million, respectively. The decrease of the valuation         
allowance in 2000 related to a reduction in net operating loss carryforwards as 
a result of the deconsolidation of Immunex (see Note 2).                        

   The Company has provided $700.0 million of federal income taxes on unremitted
earnings from its international subsidiaries that may be remitted back to the   
United States. Federal income taxes were not provided on unremitted earnings    
expected to be permanently reinvested internationally. If federal income taxes  
were provided, they would approximate $380.0 million.                           

Reconciliations between the Company's effective tax rate and the U.S.     
statutory rate from continuing operations, excluding the diet drug litigation   
charges in 2001, 2000 and 1999 (see Note 12), the effect of the termination fee 
in 2000 (see Note 3), gain on the sale of Immunex common stock in 2000 (see Note
2), goodwill impairment in 2000 (see Note 3) and special charges in 2000 and    
1999 (see Note 3), were as follows:                                             

                                                                [Download Table]

TAX RATE                                                    
YEARS ENDED DECEMBER 31,           2001      2000      1999 
------------------------------------------------------------
                                                            
U.S. statutory rate                35.0%     35.0%     35.0%
Effect of Puerto Rico and Ireland                           
   manufacturing operations        (9.1)     (8.6)     (9.0)
Research credits                   (2.1)     (1.7)     (1.4)
Goodwill amortization               1.2       1.5       1.8 
Other, net                         (0.9)     (0.7)      0.7 
                                   -----     -----     -----
Effective tax rate from                                     
   continuing operations           24.1%     25.5%     27.1%
                                   =====     =====     =====

Including the effect of the 2001 litigation charge (which had a 35.3% tax 
benefit), the overall effective tax rate from continuing operations in 2001 was 
20.3%. Including the effect of the termination fee and the gain on the sale of  
Immunex common stock in 2000 (which had tax provisions of 35.0% and 31.4%,      
respectively), and the tax benefits associated with the 2000 litigation charge, 
goodwill impairment and special charges (with effective rates of 28.3%, 15.0%   
and 35.2%, respectively), the overall effective tax rate from continuing        
operations in 2000 was an 18.2% tax benefit. Including the effect of the 1999   
litigation charge and special charge (which had 30.8% and 35.4% of tax benefits,
respectively), the overall effective tax rate from continuing operations in 1999
was a 36.7% tax benefit. The difference in the tax benefits related to the 2000 
and 1999 litigation charges versus the statutory rate of 35.0% was caused by    
provisions of $500.0 million and $200.0 million in 2000 and 1999, respectively, 
for additional federal income taxes, net of tax credits, that may be paid if the
Company remits certain international earnings, taxed at a lower rate than in the
United States, to the United States for diet drug litigation settlement         
payments.                                                                       

Total income tax payments, net of tax refunds, for continuing and         
discontinued operations in 2001, 2000 and 1999 amounted to $493.6 million,      
$1,038.3 million and $717.2 million, respectively.                              

12. CONTINGENCIES AND LITIGATION CHARGES                                        

The Company is involved in various legal proceedings, including product         
liability and environmental matters of a nature considered normal to its        
business (see Note 5 for discussion of environmental matters). It is the        
Company's policy to accrue for amounts related to these legal matters if it is  
probable that a liability has been incurred and an amount is reasonably         
estimable.                                                                      

  The Company has been named as a defendant in numerous legal actions relating
to the diet drugs REDUX or PONDIMIN, which the Company estimated were used in   
the United States, prior to their 1997 voluntary market withdrawal, by          

                                                     Wyeth and Subsidiaries 51

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approximately 5.8 million people. These actions allege, among other things, that
the use of REDUX and/or PONDIMIN, independently or in combination with the      
prescription drug phentermine (which the Company did not manufacture, distribute
or market), caused certain serious conditions, including valvular heart disease.

On October 7, 1999, the Company announced a nationwide, class action      
settlement (the settlement) to resolve litigation brought against the Company   
regarding the use of the diet drugs REDUX or PONDIMIN. The settlement covers all
claims arising out of the use of REDUX or PONDIMIN, except for claims of primary
pulmonary hypertension (PPH), and is open to all REDUX or PONDIMIN users in the 
United States, regardless of whether they have lawsuits pending.                

On November 23, 1999, U.S. District Judge Louis C. Bechtle granted        
preliminary approval of the settlement and directed that notice of the          
settlement terms be provided to class members. The notice program began in      
December 1999. In early May 2000, the district court held a hearing on the      
fairness of the terms of the settlement, with an additional one-day hearing on  
August 10, 2000. On August 28, 2000, Judge Bechtle issued an order approving the
settlement. Several appeals were taken from that order to the U.S. Court of     
Appeals for the Third Circuit. All but one of those appeals was withdrawn during
2001, and, on August 15, 2001, the Third Circuit affirmed the approval of the   
settlement. When no petitions to the U.S. Supreme Court for certiorari were     
filed by January 2, 2002, the settlement was deemed to have received final      
judicial approval on January 3, 2002.                                           

Payments by the Company related to the settlement are made into settlement
Funds A and B (the settlement funds). Fund A is intended to cover refunds,      
medical screening costs, additional medical services and cash payments,         
education and research costs, and administration costs. Fund B will compensate  
claimants with significant heart valve disease. Payments to provide settlement  
benefits, if needed, may continue for approximately 16 years after final        
judicial approval. Payments to the settlement funds in 2001, 2000 and 1999 were 
$936.7 million, $383.0 million and $75.0 million, respectively.                 

  Diet drug users choosing to opt out of the settlement class were required to
do so by March 30, 2000. The Company has resolved the claims of the majority of 
these initial opt outs and continues to resolve the claims of the remaining     
individuals.                                                                    

The settlement agreement also gives class members who participate in the  
settlement the opportunity to opt out of the settlement at two later stages,    
although there are restrictions on the nature of claims they can pursue outside 
of the settlement. Class members who are diagnosed with certain levels of       
valvular regurgitation within a specified time frame can opt out following their
diagnosis and prior to receiving any further benefits under the settlement      
(intermediate opt outs). Class members who are diagnosed with certain levels of 
regurgitation and who elect to remain in the settlement, but who later develop a
more severe valvular condition, may opt out at the time the more serious        
condition develops (back-end opt outs). Under either of these latter two opt out
alternatives, class members may not seek or recover punitive damages, may sue   
only for the condition giving rise to the opt out right, and may not rely on    
verdicts, judgments or factual findings made in other lawsuits.                 

On January 18, 2002, as collateral for the Company's financial obligations
under the settlement, the Company established a security fund in the amount of  
$370.0 million and recorded such amount in Other assets including deferred      
taxes. The funds are owned by the Company and will earn interest income for the 
Company while residing in the security fund. The Company will be required to    
deposit an additional $180.0 million in the security fund if the Company's      
credit rating, as reported by both Moody's and S&P, falls below investment      
grade.                                                                          

The Company recorded an initial litigation charge of $4,750.0 million     
($3,287.5 million after-tax or $2.51 per share-diluted), net of insurance, in   
connection with the REDUX and PONDIMIN litigation in 1999, an additional charge 
of $7,500.0 million in 2000 ($5,375.0 million after-tax or $4.11 per            
share-diluted), and a third litigation charge of $950.0 million ($615.0 million 
after-tax or $0.46 per share-diluted) in the 2001 third quarter. The combination
of these three charges represents the estimated total amount required to resolve
all diet drug litigation, including anticipated funding requirements for the    
nationwide, class action settlement, anticipated costs to resolve the claims of 
any members of the settlement class who in the future may exercise an           
intermediate or back-end opt out right, costs to resolve the claims of PPH      
claimants and initial opt out claimants, and administrative and litigation      
expenses.                                                                       

At December 31, 2001, $1,857.7 million of the litigation accrual remained;
$1,150.0 million and $707.7 million were included in Accrued expenses and Other 
noncurrent liabilities, respectively. At December 31, 2000, $8,165.6 million of 
the litigation accrual remained; $5,900.0 million and $2,265.6 million were     
included in Accrued expenses and Other noncurrent liabilities, respectively.    
Payments to the nationwide, class action settlement funds, individual settlement
payments, legal fees and other items were $7,257.9 million, $3,966.8 million and
$117.6 million for 2001, 2000 and 1999, respectively.                           

  The Company is self-insured against ordinary product liability risks and has
liability coverage, in excess of certain limits and subject to certain policy   
ceilings, from various insurance carriers.                                      

  In the opinion of the Company, although the outcome of any legal proceedings
cannot be predicted with certainty, the ultimate liability of the Company in    
connection with its legal proceedings will not have a material adverse effect on
the Company's financial position but could be material to the results of        
operations and cash flows in any one accounting period.                         

52 Wyeth and Subsidiaries                                                       

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 The Company leases certain property and equipment for varying periods under
operating leases. Future minimum rental payments under non-cancelable operating 
leases from continuing operations with terms in excess of one year in effect at 
December 31, 2001 are as follows:                                               

                                                                [Download Table]

(In thousands)                                                  
----------------------------------------------------------------
                                                                
2002                                                    $ 80,845
2003                                                      74,312
2004                                                      55,546
2005                                                      50,214
2006                                                      46,687
Thereafter                                                35,289
                                                        --------
Total rental commitments                                $342,893
                                                        ========

   Rental expense from continuing operations for all operating leases was $133.7
million, $128.2 million and $135.1 million in 2001, 2000 and 1999, respectively.

13. COMPANY DATA BY OPERATING AND GEOGRAPHIC SEGMENT                            

The Company has three reportable segments: Pharmaceuticals, Consumer Health Care
and Corporate. The Company's Pharmaceuticals and Consumer Health Care reportable
segments are strategic business units that offer different products and         
services. The reportable segments are managed separately because they           
manufacture, distribute and sell distinct products and provide services, which  
require various technologies and marketing strategies. The Company is not       
dependent on any single customer or major group of customers for its net revenue
(see Note 1).                                                                   

 The Pharmaceuticals segment manufactures, distributes and sells branded and
generic human ethical pharmaceuticals, biologicals, nutritionals, and animal    
biologicals and pharmaceuticals. Principal products include women's health care 
products, neuroscience therapies, cardiovascular products, infant nutritionals, 
gastroenterology drugs, anti-infectives, vaccines, biopharmaceuticals, oncology 
therapies, musculoskeletal therapies, hemophilia treatments and immunological   
products. Principal animal health products include vaccines, pharmaceuticals,   
endectocides and growth implants.                                               

The Consumer Health Care segment manufactures, distributes and sells      
over-the-counter health care products whose principal products include          
analgesics, cough/cold/allergy remedies, nutritional supplements, herbal        
products, and hemorrhoidal, antacid, asthma and other relief items.             

Corporate is responsible for the treasury, tax and legal operations of the
Company's businesses and maintains and/or incurs certain assets, liabilities,   
expenses, gains and losses related to the overall management of the Company     
which are not allocated to the other reportable segments.                       

   The accounting policies of the segments described above are the same as those
described in "Summary of Significant Accounting Policies" in Note 1. The Company
evaluates the performance of the Pharmaceuticals and Consumer Health Care       
reportable segments based on income from continuing operations before taxes     
which includes goodwill amortization, gains on the sales of non-corporate assets
and certain other items. Corporate includes special charges, interest expense   
and interest income, gains on the sales of investments and other corporate      
assets, including the sale of Immunex common stock, the Warner-Lambert Company  
termination fee, certain litigation provisions, including the REDUX and PONDIMIN
litigation charges, goodwill impairment and other miscellaneous items.          

COMPANY DATA BY OPERATING SEGMENT                                               

                                                                [Download Table]

(In millions)                                                         
YEARS ENDED DECEMBER 31,             2001          2000          1999 
--------------------------------------------------------------------- 
NET REVENUE FROM                                                      
CUSTOMERS(1)                                                          
                                                                      
Pharmaceuticals               $  11,716.5   $  10,772.6   $   9,469.7 
Consumer Health Care              2,412.0       2,441.1       2,345.4 
                              --------------------------------------- 
Consolidated Total            $  14,128.5   $  13,213.7   $  11,815.1 
                              ======================================= 
INCOME (LOSS) FROM                                                    
CONTINUING                                                            
OPERATIONS BEFORE                                                     
TAXES(2)                                                              
Pharmaceuticals               $   3,503.5   $   2,919.5   $   2,538.6 
Consumer Health Care                592.1         626.6         594.6 
Corporate(3)                     (1,226.9)     (4,647.1)     (5,040.5)
                              --------------------------------------- 
Consolidated Total            $   2,868.7   $  (1,101.0)  $  (1,907.3)
                              ======================================= 

DEPRECIATION AND                                                      
AMORTIZATION EXPENSE                                                  
Pharmaceuticals               $     539.1   $     458.8   $     465.6 
Consumer Health Care                 53.1          61.0          57.3 
Corporate                            15.5          15.2          18.3 
                              --------------------------------------- 
Consolidated Total            $     607.7   $     535.0   $     541.2 
                              ======================================= 

EXPENDITURES FOR                                                      
LONG-LIVED ASSETS                                                     
Pharmaceuticals               $   1,827.7   $   1,720.1   $   1,038.9 
Consumer Health Care                 67.8          38.4          66.8 
Corporate                           178.0          55.0          31.4 
                              --------------------------------------- 
Consolidated Total            $   2,073.5   $   1,813.5   $   1,137.1 
                              ======================================= 

TOTAL ASSETS                                                          
AT DECEMBER 31,                                                       
Pharmaceuticals(4)            $  13,820.3   $  12,388.6   $  11,101.4 
Consumer Health Care              1,736.3       1,697.2       1,864.4 
Net assets -- discontinued                                            
   business held for sale            --            --         4,192.3 
Corporate                         7,411.3       7,006.7       5,965.7 
                              --------------------------------------- 
Consolidated Total            $  22,967.9   $  21,092.5   $  23,123.8 
                              ======================================= 

                                                       Wyeth and Subsidiaries 53

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COMPANY DATA BY GEOGRAPHIC SEGMENT                                              

                                                                [Download Table]

(In millions)                                                     
YEARS ENDED DECEMBER 31,            2001         2000         1999
------------------------------------------------------------------
NET REVENUE FROM                                                  
CUSTOMERS(1)(5)                                                   
                                                                  
United States                  $ 9,029.0    $ 8,045.1    $ 7,214.2
United Kingdom                     694.4        898.1        745.1
Other International              4,405.1      4,270.5      3,855.8
                               -----------------------------------
Consolidated Total             $14,128.5    $13,213.7    $11,815.1
                               ===================================
LONG-LIVED ASSETS                                                 
AT DECEMBER 31,(5)                                                
United States                  $ 7,583.4    $ 6,228.8    $ 6,379.7
Ireland                            652.7        386.2        326.8
Other International              2,482.6      2,688.6      2,498.0
                               -----------------------------------
Consolidated Total             $10,718.7    $ 9,303.6    $ 9,204.5
                               ===================================

-----------                                                                     

(1)  2000 and 1999 were restated to reflect the early adoption of new           
    authoritative accounting guidance as of January 1, 2001 reflecting certain
   rebates and sales incentives (i.e., coupons and other rebate programs) as
reductions of revenues instead of selling and marketing expenses.     

(2)  Income (loss) from continuing operations before taxes included goodwill    
     amortization for 2001, 2000 and 1999 as follows: Pharmaceuticals -- $136.8,
$147.8 and $154.3 and Consumer Health Care -- $23.7, $31.8 and $32.7, 
respectively.                                                         

(3)  2001, 2000 and 1999 Corporate included litigation charges of $950.0,       
 $7,500.0 and $4,750.0, respectively, relating to the litigation brought
  against the Company regarding the use of the diet drug products REDUX or
  PONDIMIN. The charges provide for all anticipated payments in connection
    with the nationwide, class action settlement, anticipated costs to resolve
 the claims of any members of the settlement class who in the future may
  exercise an intermediate or back-end opt out right, costs to resolve the
   claims of PPH claimants and initial opt out claimants, and administrative
and litigation expenses, net of insurance (see Note 12). The charges  
related to the Pharmaceuticals operating segment.                     

2000 Corporate also included:                                         

-    Income of $1,709.4 resulting from the receipt of a $1,800.0      
termination fee provided for under the merger agreement with
       Warner-Lambert Company offset, in part, by certain related expenses
(see Note 3).                                               

  -    Income of $2,061.2 relating to the Company selling a portion of its
       investment in Immunex common stock in a public equity offering with
        Immunex (see Note 2). The transaction related to the Pharmaceuticals
operating segment.                                          

    -    Goodwill impairment of $401.0 related to the goodwill associated with
       generic pharmaceuticals and the SOlGAR consumer health care product
  line. The charge related to the operating segments as follows:
          Pharmaceuticals -- $231.0 and Consumer Health Care -- $170.0 (see Note
3).                                                         

-    A special charge of $80.0 related to the voluntary ceasing of    
          production and subsequent market withdrawal of products containing PPA
          (see Note 3). The charge related to the Consumer Health Care operating
segment.                                                    

  -    A special charge of $267.0 related to costs associated with certain
    product discontinuations (see Note 3). The charge related to the
Pharmaceuticals operating segment.                          

1999 Corporate also included a special charge of $82.0 related to the 
    suspension of shipments and the voluntary market withdrawal of ROTASHIELD,
 the Company's rotavirus vaccine (see Note 3). The charge related to the
Pharmaceuticals operating segment.                                    

(4)  2001 and 2000 included an equity investment in Immunex of $845.4 and       
$759.2, respectively. Immunex was a consolidated subsidiary in 1999.  

(5)  Other than the United States and the United Kingdom, no other country in   
    which the Company operates had net revenue of 5% or more of the respective
     consolidated total. Other than the United States and Ireland, no country in
which the Company operates had long-lived assets of 5% or more of the 
 respective consolidated total. The basis for attributing net revenue to
     geographic areas is the location of the customer. Long-lived assets consist
     of property, plant and equipment, goodwill and other intangibles, and other
   assets, excluding deferred taxes, net investments in equity companies and
other investments.                                                    

54 Wyeth and Subsidiaries                                                       

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                        

To the Board of Directors and Stockholders of Wyeth:                            

We have audited the accompanying consolidated balance sheets of Wyeth     
(formerly American Home Products Corporation -- a Delaware corporation) and     
subsidiaries as of December 31, 2001 and 2000, and the related consolidated     
statements of operations, changes in stockholders' equity and cash flows for    
each of the three years in the period ended December 31, 2001. These financial  
statements are the responsibility of the Company's management. Our              
responsibility is to express an opinion on these financial statements based on  
our audits.                                                                     

We conducted our audits in accordance with auditing standards generally   
accepted in the United States. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An 
audit also includes assessing the accounting principles used and significant    
estimates made by management, as well as evaluating the overall financial       
statement presentation. We believe that our audits provide a reasonable basis   
for our opinion.                                                                

   In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wyeth and subsidiaries as of   
December 31, 2001 and 2000, and the results of their operations and cash flows  
for each of the three years in the period ended December 31, 2001 in conformity 
with accounting principles generally accepted in the United States.             

Arthur Andersen LLP                                                             
New York, New York                                                              
January 24, 2002                                                                

MANAGEMENT REPORT ON FINANCIAL STATEMENTS                                       

Management has prepared and is responsible for the Company's Consolidated 
Financial Statements and related Notes to Consolidated Financial Statements.    
They 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. All financial information in this Annual      
Report is consistent with the financial statements.                             

The Company maintains internal accounting control systems and related     
policies and procedures designed to provide reasonable assurance that assets are
safeguarded, that transactions are executed in accordance with management's     
authorization and are properly recorded, and that accounting records may be     
relied upon for the preparation of financial statements and other financial     
information. The design, monitoring and revision of internal accounting control 
systems involve, among other things, management's judgment with respect to the  
relative cost and expected benefits of specific control measures. The Company   
also maintains an internal auditing function, which evaluates and formally      
reports on the adequacy and effectiveness of internal accounting controls,      
policies and procedures.                                                        

The Company's financial statements have been audited by independent public
accountants who have expressed their opinion with respect to the fairness of    
these statements.                                                               

The Audit Committee of the Board of Directors, composed of non-employee   
directors, meets periodically with the independent public accountants and       
internal auditors to evaluate the effectiveness of the work performed by them in
discharging their respective responsibilities and to assure their independent   
and free access to the Committee.                                               

John R. Stafford          Robert Essner      Kenneth J. Martin                  
Chairman of the Board     President and      Senior Vice President              
          Chief Executive    and Chief Financial
Officer            Officer  

                                                       Wyeth and Subsidiaries 55

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QUARTERLY FINANCIAL DATA (UNAUDITED)                                            

                                                        [Enlarge/Download Table]

                                                                       FIRST QUARTER  SECOND QUARTER  THIRD QUARTER  FOURTH QUARTER 
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)                                         2001            2001           2001            2001 
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Net revenue                                                               $3,449,176      $3,216,420     $3,736,250     $ 3,726,668 
Gross profit                                                               2,650,573       2,425,379      2,856,328       2,807,458 
Income from continuing operations(1)                                         733,554         476,996        252,072         822,672 
Diluted earnings per share from continuing operations(1)                        0.55            0.36           0.19            0.62 
Net income(1)                                                                733,554         476,996        252,072         822,672 

                                                        [Enlarge/Download Table]

                                                                       FIRST QUARTER  SECOND QUARTER  THIRD QUARTER  FOURTH QUARTER 
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)                                         2000            2000           2000            2000 
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Net revenue(2)                                                            $3,195,852      $3,026,215     $3,503,605     $ 3,487,999 
Gross profit(2)                                                            2,413,860       2,255,173      2,658,346       2,616,874 
Income (loss) from continuing operations(1)(3)                             1,746,009         412,734        762,100      (3,821,883)
Diluted earnings (loss) per share from continuing operations(1)(3)(4)           1.32            0.31           0.58           (2.91)
Net income (loss)(1)(3)(5)                                                   276,362         412,734        762,100      (3,821,883)

(1)   Third Quarter 2001 and Fourth Quarter 2000 included litigation charges of 
   $615,000 after-tax and $0.46 per share-diluted and $5,375,000 after-tax
    and $4.10 per share-diluted, respectively, in connection with litigation
    brought against the Company regarding the use of the diet drugs REDUX or
PONDIMIN.                                                           

Fourth Quarter 2000 also included:                                  

    - Income of $1,414,859 after-tax and $1.08 per share-diluted
         related to the Company selling a portion of its investment in
          Immunex common stock in a public equity offering with Immunex.

 - Goodwill impairment of $341,000 after-tax and $0.26 per
         share-diluted related to the goodwill associated with generic
       pharmaceuticals and the SOLGAR consumer health care product
line.                                               

- A special charge of $52,000 after-tax and $0.04 per   
        share-diluted related to the voluntary ceasing of production
  and subsequent voluntary market withdrawal of products
containing PPA.                                     

- A special charge of $173,000 after-tax and $0.13 per  
          share-diluted related to costs associated with certain product
discontinuations.                                   

(2)   First, Second, Third and Fourth Quarters 2000 were restated to reflect the
    early adoption of new authoritative accounting guidance as of January 1,
   2001 reflecting certain rebates and sales incentives (i.e., coupons and
   other rebate programs) as reductions of revenues instead of selling and
marketing expenses.                                                 

(3)   First Quarter 2000 included income of $1,111,097 after-tax and $0.84 per  
    share-diluted resulting from the receipt of a $1,800,000 termination fee
provided for under the merger agreement with Warner-Lambert Company 
offset, in part, by certain related expenses.                       

(4)   The weighted average common shares outstanding for diluted loss per share 
    for the Fourth Quarter 2000 did not include common stock equivalents, as
     the effect would have been antidilutive. In addition, the sum of the 2000
      diluted earnings (loss) per share from continuing operations did not equal
    the full year 2000 diluted loss per share from continuing operations for
the same reason.                                                    

(5)   As of the 2000 First Quarter, the Company reflected the Cyanamid          
 Agricultural Products business, which was sold on June 30, 2000, as a
      discontinued operation and recorded a loss on disposal of such business of
$1,572,993, net of tax charges of $855,248.                         

MARKET PRICES OF COMMON STOCK AND DIVIDENDS                                     

                                                        [Enlarge/Download Table]

                                2001 RANGE OF PRICES*                               2000 Range of Prices*           
                       -----------------------------------------           -----------------------------------------
                                                       DIVIDENDS                                           Dividends
                         HIGH               LOW        PER SHARE             High              Low         per Share
--------------------------------------------------------------------------------------------------------------------
                                                                                                                    
First quarter          $62.50            $52.00            $0.23           $56.25           $39.38             $0.23
Second quarter          63.80             54.06             0.23            61.63            50.94              0.23
Third quarter           62.31             53.20             0.23            60.13            50.38              0.23
Fourth quarter          62.25             55.70             0.23            65.25            53.50              0.23

* Prices are those of the New York Stock Exchange--Composite Transactions.      

56 Wyeth and Subsidiaries                                                       

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF                                         
FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                   

The following commentary should be read in conjunction with the Consolidated    
Financial Statements and Notes to Consolidated Financial Statements on pages 34 
to 54.                                                                          

RESULTS OF OPERATIONS                                                           

Basis of Presentation                                                           

Management's discussion and analysis of results of operations for 2001 vs. 2000 
and 2000 vs. 1999 are presented on an as-reported basis, except for Net revenue 
variation explanations between 2000 and 1999, which are presented on an         
as-reported and pro forma basis. Effective January 1, 2000, the financial       
results of certain pharmaceutical subsidiaries in Japan and India, which        
previously were included on an equity basis, were consolidated in the financial 
results of the Company. The financial results of Immunex, which previously were 
consolidated in the financial results of the Company, were deconsolidated and   
included on an equity basis, retroactive to January 1, 2000, within the         
pharmaceuticals segment. Accordingly, alliance revenue was recorded in 2001 and 
2000 for co-promotion agreements between the Company and Immunex. The 2000 vs.  
1999 pro forma net revenue percentage changes reflect the respective            
consolidation and deconsolidation of these subsidiaries and include alliance    
revenue from Immunex, assuming all transactions occurred as of January 1, 1999. 
Neither the consolidation nor the deconsolidation of these subsidiaries had any 
effect on income from continuing operations in 2000.                            

  In addition, the Company early adopted new authoritative accounting guidance
as of January 1, 2001 reflecting certain rebates and sales incentives (i.e.,    
coupons and other rebate programs) as reductions of revenues instead of selling 
and marketing expenses. Financial information for all prior periods presented   
has been reclassified to comply with the income statement classification        
requirements of the new guidance. These reclassifications had no effect on total
net revenue growth between the periods presented. However, consumer health care 
net revenue growth for 2000 vs. 1999 was 3% without the reclassification        
adjustments as compared with the as-reported growth rate of 4%.                 

Net Revenue                                                                     

Worldwide net revenue increased 7% to $14.1 billion for 2001 on an as-reported  
basis. Worldwide net revenue increased 12% to $13.2 billion for 2000 on an      
as-reported basis. After adjusting for the consolidation and deconsolidation of 
the subsidiaries identified above, and including alliance revenue from Immunex, 
pro forma worldwide net revenue for 2000 increased 13% due primarily to higher  
worldwide sales of pharmaceuticals.                                             

The following table sets forth 2001, 2000 and 1999 worldwide net revenue  
results by operating segment together with the percentage changes in            
"As-Reported" and "Pro Forma" (where applicable) worldwide net revenue from     
prior years:                                                                    

                                                        [Enlarge/Download Table]

                                                                                   2001 VS. 2000             2000 vs. 1999        
                                                                                   -------------    ------------------------------

(Dollar amounts in millions)               YEARS ENDED DECEMBER 31,                  As-Reported                                  
                               --------------------------------------------           % Increase    As-Reported         Pro Forma 
NET REVENUE                         2001              2000             1999            (Decrease)    % Increase        % Increase 
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  
Operating Segment:                                                                                                                
  Pharmaceuticals              $11,716.5         $10,772.6        $ 9,469.7                    9%            14%               16%
  Consumer Health Care           2,412.0           2,441.1          2,345.4                   (1)%            4%                4%
                               ---------------------------------------------------------------------------------------------------
  Consolidated Net Revenue     $14,128.5         $13,213.7        $11,815.1                    7%            12%               13%
                               ===================================================================================================

2001 VS. 2000                                                                   

Worldwide pharmaceutical net revenue increased 9% (10% for human                
pharmaceuticals) for 2001. Excluding the negative impact of foreign exchange,   
worldwide pharmaceutical net revenue increased 11% for 2001. U.S. pharmaceutical
net revenue increased 15% for 2001 due primarily to higher sales of PROTONIX    
(introduced in the 2000 second quarter), PREVNAR (introduced in the 2000 first  
quarter), EFFEXOR XR (as a result of higher volume and market share of new      
prescriptions as well as expanded indications), PREMARIN products and CORDARONE 
I.V., and alliance revenue offset, in part, by lower sales of ZIAC (due to      
generic competition) and generic products (discontinuance of certain oral       
generics).                                                                      

  International pharmaceutical net revenue decreased 1% for 2001 due primarily
to lower sales of MENINGITEC and animal health products offset, in part, by     
higher sales of EFFEXOR XR (as a result of higher volume and market share of new
prescriptions, as well as expanded indications), ENBREL (internationally the    
Company has exclusive marketing rights to ENBREL), ZOTON and infant             
nutritionals. Sales of MENINGITEC, the Company's meningococcal meningitis       
vaccine, decreased as compared with the prior year, as it was used in 2000 to   
vaccinate nearly all children and adolescents in the United Kingdom. The product
currently is being launched in 10 other European countries; however, the Company
does not currently anticipate that any of these markets, individually, will     
provide sales volume equivalent to that generated in the United Kingdom. The    
decline in animal health product revenues was due primarily to a general        
continued weakening in the livestock markets and continuing concerns about      
foot-and-mouth and mad cow diseases.                                            

 Worldwide consumer health care net revenue decreased 1% for 2001. Excluding
the negative impact of foreign exchange, worldwide consumer health care net     
revenue was unchanged for                                                       

                                                       Wyeth and Subsidiaries 57

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2001. U.S. consumer health care net revenue was unchanged for 2001 as a result  
of higher sales of CHAP STICK, CALTRATE and ADVIL being offset by lower sales of
cough/cold/allergy products and FLEXAGEN.                                       

International consumer health care net revenue decreased 3% for 2001 due  
primarily to the divestiture of two international non-core products which       
occurred early in 2001, as well as lower sales of cough/cold/allergy products.  
These decreases were partially offset by higher sales of CENTRUM products,      
CALTRATE and ADVIL.                                                             

2000 VS. 1999                                                                   

Worldwide pharmaceutical net revenue increased 14% on an as-reported basis and  
16% (primarily human pharmaceuticals) on a pro forma basis for 2000. Excluding  
the negative impact of foreign exchange, pro forma worldwide pharmaceutical net 
revenue increased 19% for 2000. Pro forma U.S. pharmaceutical net revenue       
increased 22% for 2000 due primarily to higher sales of PREVNAR (introduced in  
the 2000 first quarter), EFFEXOR XR (as a result of higher volume and market    
share of new prescriptions, as well as expanded indications), PROTONIX          
(introduced in the 2000 second quarter), PREMARIN products and animal health    
products, and alliance revenue offset, in part, by lower sales of LODINE (due to
generic competition) and factor VIII.                                           

  Pro forma international pharmaceutical net revenue increased 7% for 2000 due
primarily to higher sales of MENINGITEC (introduced in the United Kingdom in the
1999 fourth quarter), EFFEXOR XR (as a result of higher volume and market share 
of new prescriptions, as well as expanded indications) and REFACTO (introduced  
in the 1999 second quarter).                                                    

   Worldwide consumer health care net revenue increased 4% on an as-reported and
pro forma basis for 2000. Excluding the negative impact of foreign exchange,    
worldwide consumer health care net revenue increased 6% for 2000. U.S. consumer 
health care net revenue increased 5% for 2000 due primarily to higher sales of  
CENTRUM products (including Centrum Performance, which was launched in the      
United States in the 1999 fourth quarter), cough/cold/allergy products, CHAP    
STICK and FLEXAGEN (introduced in the United States in the 2000 second quarter).

International consumer health care net revenue increased 2% for 2000 due  
primarily to higher sales of CENTRUM products and CALTRATE offset, in part, by  
lower sales of ANACIN.                                                          

   The following table sets forth the percentage changes in 2001 as-reported and
2000 pro forma worldwide net revenue by operating segment and geographic area   
compared with the prior year, including the effect volume, price and foreign    
exchange had on these percentage changes:                                       

                                                        [Enlarge/Download Table]

                                      % Increase (Decrease)                               % Increase (Decrease)            
                                  Years Ended December 31, 2001                    Years Ended December 31, 2000(1)(2)     
                          ----------------------------------------------        -------------------------------------------
                                                    Foreign    Total Net                               Foreign   Total Net 
                          Volume       Price       Exchange      Revenue        Volume     Price      Exchange     Revenue 
---------------------------------------------------------------------------------------------------------------------------
                                                                                                                           
PHARMACEUTICALS                                                                                                            
United States                 10%          5%            --           15%           15%        7%           --          22%
International                  4%          1%            (6)%         (1)%          14%       --            (7)%         7%
                          -----------------------------------------------       -------------------------------------------
Total                          8%          3%            (2)%          9%           15%        4%           (3)%        16%
                          ===============================================       ===========================================
CONSUMER HEALTH CARE                                                                                                       
United States                 (2)%         2%            --           --             4%        1%           --           5%
International                 (1)%         3%            (5)%         (3)%           4%        3%           (5)%         2%
                          -----------------------------------------------       -------------------------------------------
Total                         (2)%         2%            (1)%         (1)%           4%        2%           (2)%         4%
                          ===============================================       ===========================================
TOTAL                                                                                                                      
United States                  8%          4%            --           12%           13%        5%           --          18%
International                  4%          1%            (6)%         (1)%          12%        1%           (7)%         6%
                          -----------------------------------------------       -------------------------------------------
Total                          6%          3%            (2)%          7%           13%        3%           (3)%        13%
                          ===============================================       ===========================================

(1)   Effective January 1, 2000, the financial results of certain subsidiaries  
  in Japan and India, which previously were included on an equity basis,
      were consolidated in the results of the Company. Also effective January 1,
      2000, the financial results of Immunex, which previously were consolidated
 in the results of the Company, were deconsolidated and included on an
equity basis. Accordingly, alliance revenue was recorded in 2000 for
 co-promotion agreements between the Company and Immunex. The 2000 pro
     forma net revenue percentage changes reflect the respective consolidation
  and deconsolidation of these subsidiaries and include alliance revenue
   from Immunex, assuming all transactions occurred as of January 1, 1999.
    Neither the consolidation nor the deconsolidation of these subsidiaries,
 nor the inclusion of alliance revenue from Immunex, had any effect on
income from continuing operations in 2000.                          

(2)   2000 was restated to reflect the early adoption of new authoritative      
    accounting guidance as of January 1, 2001 reflecting certain rebates and
    sales incentives (i.e., coupons and other rebate programs) as reductions
of revenues instead of selling and marketing expenses.              

58 Wyeth and Subsidiaries                                                       

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Operating Expenses                                                              

2001 VS. 2000                                                                   

COST OF GOODS SOLD, as a percentage of Net revenue, decreased to 24.0% for 2001 
compared with 24.7% for 2000. Excluding alliance revenue, cost of goods sold, as
a percentage of net sales, for 2001 was 24.5%, a 0.6% decrease from 25.1% in    
2000. The margin improvement resulted from a favorable mix of higher margin     
products in both the pharmaceuticals and consumer health care segments and lower
royalty expenses offset, in part, by increased costs associated with improving  
the U.S. production supply chain processes.                                     

   SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, as a percentage of Net revenue,
decreased to 36.7% for 2001 compared with 37.7% for 2000. The lower ratio of    
selling, general and administrative expenses resulted from non-recurring launch 
expenses, primarily media, related to pharmaceutical product launches in 2000,  
and lower co-promotion expenses for ZIAC, due to reduced sales as a result of   
generic competition. This ratio improvement was partially offset by an increase 
in selling and marketing expenses in the Company's animal health division to    
support the domestic launch of PROHEART 6, a new single dose, canine heartworm  
preventative product.                                                           

RESEARCH AND DEVELOPMENT EXPENSES increased 11% for 2001 due primarily to 
increased headcount and other research operating expenses, including higher     
chemical and material costs, and ongoing clinical trials of pharmaceuticals in  
several therapeutic categories. These increases were partially offset by lower  
costs resulting from the timing of payments pursuant to certain pharmaceutical  
collaborations and lower payments under licensing agreements. Pharmaceutical    
research and development expenditures accounted for 96%, 96% and 95% of total   
research and development expenditures in 2001, 2000 and 1999, respectively.     
Pharmaceutical research and development expenses, as a percentage of worldwide  
pharmaceutical net revenue, exclusive of infant nutritional sales and alliance  
revenue, were 17%, 16% and 17% in 2001, 2000 and 1999, respectively.            

2000 VS. 1999                                                                   

COST OF GOODS SOLD, as a percentage of Net revenue, decreased to 24.7% for
2000 compared with 25.6% for 1999. Excluding alliance revenue,cost of goods     
sold, as a percentage of net sales, for 2000 was 25.1%, a 0.5% decrease from    
1999. A favorable mix of higher margin products in the pharmaceuticals segment  
was offset, in part, by an increase in royalty expenses and costs associated    
with improving the production and supply chain processes at certain             
international sites.                                                            

   SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, as a percentage of Net revenue,
increased to 37.7% for 2000 compared with 36.6% for 1999. Higher selling,       
general and administrative expenses were due primarily to increased selling and 
marketing expenses supporting higher field sales headcount and salaries,        
promotional efforts for recent product launches and rapid growth products, and  
direct-to-consumer programs. The increase in the ratio of these expenses, as a  
percentage of Net revenue, was offset, in part, by deconsolidating Immunex in   
2000 as these expenses carried a higher expense ratio and by consolidating Japan
and India in 2000 as their expense ratio was lower than the Company overall.    

RESEARCH AND DEVELOPMENT EXPENSES increased 6% for 2000 due primarily to  
certain advancements and ongoing clinical trials of pharmaceuticals in several  
therapeutic categories, as well as additional payments for existing licensing   
agreements offset, in part, by lower costs as a result of deconsolidating       
Immunex in 2000.                                                                

Interest Expense and Other Income                                               

2001 VS. 2000                                                                   

INTEREST EXPENSE, NET increased substantially for 2001 due primarily to higher  
weighted average debt outstanding, as compared with 2000. Weighted average debt 
outstanding during 2001 and 2000 was $7,270.9 million and $3,853.0              
million,respectively. The increase in interest expense was partially offset by  
higher capitalized interest resulting from additional capital projects,         
recognized during 2001, and lower interest rates on outstanding commercial      
paper.                                                                          

   OTHER INCOME, NET increased 70% for 2001 due primarily to lower non-recurring
charges (as described below in the 2000 vs. 1999 Other income, net analysis),   
higher gains on the sales of non-strategic assets and higher equity income.     

2000 VS. 1999                                                                   

INTEREST EXPENSE, NET decreased 73% for 2000 due primarily to an increase in    
interest income as a result of higher cash and cash equivalents, as well as     
lower debt resulting from the payoff of the $1,000.0 million of 7.70% notes on  
February 15, 2000. In addition, on June 30, 2000, the Company used a portion of 
the proceeds from the sale of the Cyanamid Agricultural Products business to pay
down a substantial portion of the outstanding commercial paper borrowings.      
Weighted average debt outstanding during 2000 and 1999 was $3,853.0 million and 
$4,889.0 million, respectively.                                                 

OTHER INCOME, NET decreased 37% for 2000 due primarily to non-recurring   
charges(including: payments for access to various pharmaceutical collaborations,
costs associated with a consent decree entered into with the FDA in the 2000    
third quarter (described below) and costs related to a product discontinuation) 
and lower gains on the sales of non-strategic assets offset, in part, by an     
insurance recovery of environmental costs, higher equity income and lower Year  
2000 conversion costs. In conjunction with the consent decree identified above, 
the Company recorded a pre-tax charge of $56.1 million which included payments  
to the U.S. government and charges associated with actions required by the FDA  
based on an inspection of the Marietta, Pennsylvania and Pearl River, New York  
facilities. Pursuant to the consent decree, the Company will have a             
comprehensive                                                                   

                                                     Wyeth and Subsidiaries 59

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inspection performed by expert consultants to determine compliance with current 
Good Manufacturing Practices.                                                   

2001, 2000 and 1999 Unusual Transactions                                        

During the 2001 third quarter, the Company recorded a charge of $950.0 million  
($615.0 million after-tax or $0.46 per share-diluted) relating to the litigation
brought against the Company regarding the use of the diet drugs Redux or        
Pondimin. An initial litigation charge of $4,750.0 million ($3,287.5 million    
after-tax or $2.51 per share-diluted) was recorded in the 1999 third quarter    
followed by an additional litigation charge of $7,500.0 million ($5,375.0       
million after-tax or $4.11 per share-diluted) recorded in the 2000 fourth       
quarter. The combination of these three charges represents the estimated total  
amount required to resolve all diet drug litigation, including all anticipated  
funding requirements for the nationwide, class action settlement and costs to   
resolve the claims of any members of the settlement class who in the future may 
exercise an intermediate or back-end opt out right. Additionally, these charges 
will cover any remaining administrative and legal expenses and costs associated 
with the resolution of the claims of the initial opt outs and primary pulmonary 
hypertension claimants (see Note 12 to the Consolidated Financial Statements and
the "Liquidity, Financial Condition and Capital Resources" section herein for   
further discussion relating to the Company's additional financing requirements  
for the future settlement payments).                                            

During the 2000 first quarter, the Company and Warner-Lambert Company     
terminated their merger agreement. The Company recorded income of $1,709.4      
million ($1,111.1 million after-tax or $0.85 per share-diluted) in income from  
continuing operations resulting from the receipt of a $1,800.0 million          
termination fee provided for under the merger agreement offset, in part, by     
certain related expenses (see Note 3 to the Consolidated Financial Statements). 

  In November 2000, the Company and Immunex completed a public equity offering
allowing the Company to sell 60.5 million shares of Immunex common stock.       
Proceeds to the Company were $2,404.9 million, resulting in a gain on the sale  
of $2,061.2 million ($1,414.9 million after-tax or $1.08 per share-diluted). The
Company used the net proceeds from the sale of its Immunex common stock to      
reduce outstanding commercial paper and for other general corporate purposes    
(see Note 2 to the Consolidated Financial Statements).                          

  In November 2000, in accordance with an FDA request, the Company immediately
ceased global production and shipments of any products containing PPA and       
voluntarily withdrew any such products from customer warehouses and retail store
shelves. As a result, the Company recorded a special charge of $80.0 million    
($52.0 million after-tax or $0.04 per share-diluted) to provide primarily for   
product returns and the write-off of inventory (see Note 3 to the Consolidated  
Financial Statements).                                                          

During the 2000 fourth quarter, the Company recorded a special charge of  
$267.0 million ($173.0 million after-tax or $0.13 per share-diluted) related to 
the discontinuation of certain products. The special charge provided for fixed  
asset impairments, inventory write-offs, severance obligations, idle plant costs
and contract termination costs (see Note 3 to the Consolidated Financial        
Statements).                                                                    

At December 31, 2000, the Company performed goodwill and other intangible 
reviews and noted that projected profitability and future cash flows associated 
with generic pharmaceuticals and the SOLGAR consumer health care product line   
would not be sufficient to recover the remaining goodwill related to these      
product lines. As a result, the Company recorded a charge of $401.0 million     
($341.0 million after-tax or $0.26 per share-diluted) to write down the carrying
value of goodwill related to these product lines, to fair value, representing   
discounted future cash flows (see Note 3 to the Consolidated Financial          
Statements).                                                                    

During the 1999 second quarter, the Company recorded a special charge     
aggregating $82.0 million ($53.0 million after-tax or $0.04 per share-diluted)  
for estimated costs associated with the suspension of shipments and the         
voluntary market withdrawal of ROTASHIELD, the Company's rotavirus vaccine (see 
Note 3 to the Consolidated Financial Statements).                               

60 Wyeth and Subsidiaries                                                       

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Income (Loss) from Continuing Operations before Taxes                           

The following table sets forth worldwide income (loss) from continuing          
operations before taxes by operating segment together with the percentage       
changes from the comparable periods in the prior year on an as-reported basis:  

                                                        [Enlarge/Download Table]

                                                                                      2001 VS. 2000     2000 vs. 1999
(Dollar amounts in millions)                     YEARS ENDED DECEMBER 31,             -------------     -------------
INCOME (LOSS) FROM CONTINUING        ---------------------------------------------      % Increase       % Increase  
OPERATIONS BEFORE TAXES(1)                2001             2000              1999        (Decrease)       (Decrease) 
---------------------------------------------------------------------------------------------------------------------
                                                                                                                     
Operating Segment:                                                                                                   
   Pharmaceuticals                   $ 3,503.5       $  2,919.5        $  2,538.6               20%              15% 
   Consumer Health Care                  592.1            626.6             594.6               (6)%              5% 
                                     --------------------------------------------------------------------------------
                                       4,095.6          3,546.1           3,133.2               15%              13% 
   Corporate(2)                       (1,226.9)        (4,647.1)         (5,040.5)             (74)%             (8)%
                                     --------------------------------------------------------------------------------
   Total(3)                          $ 2,868.7        $(1,101.0)        $(1,907.3)              --              (42)%
                                     ================================================================================

(1)   Income (loss) from continuing operations before taxes included goodwill   
     amortization for 2001, 2000 and 1999 as follows: Pharmaceuticals--$136.8,
$147.8 and $154.3 and Consumer Health Care--$23.7, $31.8 and $32.7, 
respectively.                                                       

(2)   2001, 2000 and 1999 Corporate included litigation charges of $950.0,      
   $7,500.0 and $4,750.0, respectively, relating to the litigation brought
      against the Company regarding the use of the diet drugs REDUX or PONDIMIN.
   The charges provide for all anticipated payments in connection with the
 nationwide, class action settlement, anticipated costs to resolve the
claims of any members of the settlement class who in the future may 
    exercise an intermediate or back-end opt out right, costs to resolve the
     claims of PPH claimants and initial opt out claimants, and administrative
and litigation expenses, net of insurance.                          

2000 Corporate also included:                                       

     - Income of $1,709.4 resulting from the receipt of a $1,800.0
        termination fee provided for under the merger agreement with
      Warner-Lambert Company offset, in part, by certain related
expenses.                                           

        - Income of $2,061.2 related to the Company selling a portion of
     its investment in Immunex common stock in a public equity
offering with Immunex.                              

- Goodwill impairment of $401.0 related to the goodwill 
  associated with generic pharmaceuticals and the SOLGAR
consumer health care product line.                  

       - A special charge of $80.0 related to the voluntary ceasing of
   production and subsequent market withdrawal of products
containing PPA.                                     

     - A special charge of $267.0 related to costs associated with
certain product discontinuations.                   

 1999 Corporate also included a special charge of $82.0 related to the
      suspension of shipments and the voluntary market withdrawal of ROTASHIELD,
the Company's rotavirus vaccine.                                    

  Excluding the 2001, 2000 and 1999 litigation charges, 2000 termination
fee, 2000 gain on the sale of Immunex common stock, 2000 goodwill   
  impairment, and 2000 and 1999 special charges, Corporate expenses, net
increased 63% for 2001 and decreased 19% for 2000.                  

(3)   Excluding the 2001, 2000 and 1999 litigation charges, 2000 termination    
fee, 2000 gain on the sale of Immunex common stock, 2000 goodwill   
impairment, and 2000 and 1999 special charges, total income from    
 continuing operations before taxes increased 13% for 2001 and 15% for
2000.                                                               

The following explanations of changes in income (loss) from continuing    
operations before taxes, by operating segment, for 2001 compared with 2000, and 
2000 compared with 1999, exclude items listed in footnote (2) to the table      
above:                                                                          

PHARMACEUTICALS                                                                 

Worldwide pharmaceutical income from continuing operations before taxes   
increased 20% (22% for human pharmaceuticals) for 2001 due primarily to higher  
U.S. net revenue (favorable product mix) and other income, net (primarily lower 
non- recurring charges and higher gains on asset sales) offset, in part, by     
higher selling, general and administrative expenses and research and development
expenses. Higher selling, general and administrative expenses were due primarily
to increased promotional expenses to support existing product lines and sales   
force expansion offset, in part, by a decrease in marketing expenses related to 
product launches that occurred in 2000.                                         

Worldwide pharmaceutical income from continuing operations before taxes   
increased 15% (11% for human pharmaceuticals) for 2000 due primarily to higher  
worldwide net revenue (including alliance revenue) offset, in part, by higher   
selling, general and administrative expenses, research and development expenses,
and other expenses (primarily non-recurring charges). Higher selling, general   
and administrative expenses were due primarily to increased media and           
promotional expenses to support product launches and existing product lines     
through increased headcount.                                                    

CONSUMER HEALTH CARE                                                            

   Worldwide consumer health care income from continuing operations before taxes
decreased 6% for 2001 due primarily to lower worldwide sales and lower other    
income, net (primarily lower gains on sales of non-strategic assets). Worldwide 
consumer health care income from continuing operations before taxes increased 5%
for 2000 due primarily to higher worldwide sales.                               

CORPORATE                                                                       

Corporate expenses, net increased 63% for 2001 due primarily to higher    
interest expense, net and lower other income related to                         

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an insurance recovery of environmental costs recorded in 2000 offset, in part,  
by lower general and administrative expenses.                                   

Corporate expenses, net decreased 19% for 2000 due primarily to lower     
interest expense, net and current year insurance recoveries related to          
environmental costs offset, in part, by lower gains on sales of non-strategic   
assets, higher general and administrative expenses, and costs related to a      
product discontinuation.                                                        

Effective Tax Rate                                                              

The effective tax rate for 2001 was 24.1% compared with 25.5% for 2000 and 27.1%
for 1999. The downward trend in the effective tax rates was due primarily to an 
increased benefit from manufacturing in lower taxed jurisdictions and higher    
research credits.                                                               

Income (Loss) and Diluted Earnings (Loss) per Share from Continuing Operations  

Income and diluted earnings per share from continuing operations in 2001 were   
$2,285.3 million and $1.72, respectively, compared with a loss and diluted loss 
per share from continuing operations of $901.0 million and $0.69 in 2000,       
respectively. Loss and diluted loss per share from continuing operations in 1999
were $1,207.2 million and $0.92, respectively. The income (loss) from continuing
operations for 2001, 2000 and 1999 included the following unusual items:        

                                                        [Enlarge/Download Table]

                                                                                          Diluted Earnings (Loss) Per      
                                                         Income (Loss)                       Share From Continuing         
                                               From Continuing Operations                         Operations               
(In millions, except per share amounts)   --------------------------------------     --------------------------------------
YEARS ENDED DECEMBER 31,                       2001          2000          1999           2001          2000          1999 
---------------------------------------------------------------------------------------------------------------------------
                                                                                                                           
Income from continuing operations                                                                                          
   before unusual items and including                                                                                      
   the dilutive effect of common                                                                                           
   stock equivalents (CSE)                $ 2,900.3     $ 2,514.0     $ 2,133.3      $    2.18     $    1.90     $    1.61 
Dilutive effect of CSE*                          --            --            --             --          0.02          0.02 
                                          --------------------------------------     --------------------------------------

                                          $ 2,900.3     $ 2,514.0     $ 2,133.3      $    2.18     $    1.92     $    1.63 
Warner-Lambert Company                                                                                                     
   termination fee                               --       1,111.1            --             --          0.85            -- 
Gain on sale of Immunex                                                                                                    
   common stock                                  --       1,414.9            --             --          1.08            -- 
Redux and Pondimin diet drug                                                                                               
   litigation charges                        (615.0)     (5,375.0)     (3,287.5)         (0.46)        (4.11)        (2.51)
Goodwill impairment                              --        (341.0)           --             --         (0.26)           -- 
Special charges:                                                                                                           
   Voluntary market withdrawals                  --         (52.0)        (53.0)            --         (0.04)        (0.04)
   Product discontinuations                      --        (173.0)           --             --         (0.13)           -- 
                                          --------------------------------------     --------------------------------------

Income (loss) from continuing                                                                                              
   operations                             $ 2,285.3     $  (901.0)    $(1,207.2)     $    1.72     $   (0.69)    $   (0.92)
                                          ======================================     ======================================

*     The $0.02 per share benefit represents the impact on income from          
continuing operations of excluding the dilutive effect of CSE. 2001 
   diluted earnings per share from continuing operations of $2.18 includes
the dilutive impact of CSE.                                         

  For further details related to the items listed in the table above, refer to
the discussion of "2001, 2000 and 1999 Unusual Transactions" herein.            

Excluding all unusual items from the 2001 and 2000 results listed in the  
table above and including the $0.02 per share dilutive effect of common stock   
equivalents in the 2000 results, both income and diluted earnings per share from
continuing operations in 2001 increased 15% compared with 2000. The increases   
were due primarily to higher U.S. pharmaceutical net revenue and higher other   
income, net offset, in part, by higher selling, general and administrative      
expenses, research and development expenses, and interest expense, net.         

Excluding all unusual items from the 2000 and 1999 results listed in the  
table above and including the $0.02 per share dilutive effect of common stock   
equivalents in 2000 and 1999 results, both income and diluted earnings per share
from continuing operations in 2000 increased 18% compared with 1999. The        
increases were due primarily to higher worldwide sales of pharmaceuticals and   
lower interest expense, net offset, in part, by higher selling, general and     
administrative expenses and research and development expenses.                  

Discontinued Operations                                                         

On June 30, 2000, the Company announced that it had completed the sale of the   
Cyanamid Agricultural Products business to BASF. Under the terms of the         
definitive agreement, BASF paid the Company $3,800.0 million in cash and assumed
certain debt. As a result, the Company recorded an after-tax loss on the sale   

62 Wyeth and Subsidiaries                                                       

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of this business of $1,573.0 million or $1.20 per share-diluted and reflected   
this business as a discontinued operation beginning in the 2000 first quarter   
and restated all prior periods presented (see Note 2 to the Consolidated        
Financial Statements).                                                          

LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES                            

CASH AND CASH EQUIVALENTS decreased $899.6 million, while total debt increased  
by $7,001.1 million in 2001. The activity of these cash flows during 2001       
related primarily to the following items:                                       

-  Payments of $7,257.9 million related to the REDUX and PONDIMIN   
   litigation. These payments were financed primarily from borrowing
   activities. As discussed in Note 12 to the Consolidated Financial
    Statements, during 1999, the Company announced a nationwide, class
     action settlement to resolve litigation brought against the Company
    regarding the use of the diet drugs REDUX or PONDIMIN. Payments to
        provide settlement benefits, if needed, may continue for approximately
   16 years after final judicial approval. Payments made to date and
        future payments related to the diet drug litigation are anticipated to
        be financed through existing cash resources, cash flows from operating
     activities, additional commercial paper borrowings, as well as term
        debt financings and international earnings remitted back to the United
States, if necessary.                                         

-  Capital expenditures of $1,924.3 million due primarily to new    
  production capacity expansion worldwide, including biotechnology
 facilities, research and development facilities, and to improve
       compliance of U.S. supply chain processes. A similar level of capital
expenditures is expected to continue in 2002.                 

-  Dividends totaling $1,211.1 million consisting primarily of the  
         Company's annual common stock dividend of $0.92 per share that provided
the Company's stockholders with an approximate yield of 1.5%. 

    -  Net marketable security purchases, throughout 2001, of $941.0 million
to support an effective cash management strategy.             

-  Contributions to fund the Company's defined benefit pension plans
totaling $429.7 million.                                      

-  An increase in other current assets, excluding deferred taxes, of
$395.8 million primarily for anticipated tax refunds.         

-  An increase in inventories of $273.1 million primarily related to
planning for expected product demand.                         

These cash uses were partially offset by other net cash generated by      
operations of $3,909.6 million, proceeds from sales of assets of $408.2 million,
proceeds from the exercise of stock options of $224.6 million and the proceeds  
from borrowing activities identified above.                                     

ADDITIONAL LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCE INFORMATION      

At December 31, 2001, the carrying value of cash equivalents approximated fair  
value due to the short-term, highly liquid nature of cash equivalents, which    
have original maturities of three months or less. Interest rate fluctuations    
would not have a significant effect on the fair value of cash equivalents held  
by the Company.                                                                 

The Company maintains a $2,000.0 million credit facility, which supports  
borrowings under the commercial paper program and terminates on July 31, 2002.  
Since the $2,000.0 million credit facility terminates in less than one year,    
commercial paper outstanding of $1,817.2 million, supported by this facility,   
was classified as current debt in Loans payable as of December 31, 2001. In     
March 2001, the Company obtained an additional revolving credit facility of     
$3,000.0 million to support its commercial paper program. The Company offers its
commercial paper in a very liquid market commensurate with its short-term credit
ratings from Moody's (P2), S&P (A1) and Fitch (A1). In March 2002, subsequent to
the date of the "Report of Independent Public Accountants," the Company renewed 
the $3,000.0 million credit facility for an additional 364-day term, and reduced
the $2,000.0 million credit facility to $1,000.0 million until it matures on    
July 31, 2002.                                                                  

In March 2001, the Company issued three tranches of Notes in a transaction
exempt from registration under the Securities Act, pursuant to Rule 144A, as    
follows:                                                                        

-  $500.0 million 5.875% Notes due March 15, 2004                   

-  $1,000.0 million 6.25% Notes due March 15, 2006                  

-  $1,500.0 million 6.70% Notes due March 15, 2011                  

 The interest rate payable on each series of Notes is subject to an increase
of 0.25 percentage points per level of downgrade in the Company's credit rating 
by Moody's or S&P. However, the total adjustment to the interest rate for the   
series of Notes cannot exceed two percentage points. There is no adjustment to  
the interest rate payable on each series of Notes for the first single level    
downgrade in the Company's credit rating by S&P. In the case of the $1,500.0    
million 6.70% Notes, the interest rate in effect on March 15, 2006 for such     
Notes will, thereafter, become the effective interest rate until maturity on    
March 15, 2011. The Company would incur a total of approximately $7.5 million of
additional annual interest expense for every 0.25 percentage point increase in  
the interest rate. If Moody's or S&P subsequently were to increase the Company's
credit rating, the interest rate payable on each series of Notes would be       
subject to a decrease of 0.25 percentage points for each level of credit rating 
increase. The interest rate payable for the series of Notes cannot be reduced   
below the original coupon rate of each series of Notes.                         

 In addition to the Notes issued in March 2001, the Company has outstanding:
$250.0 million 6.50% Notes due October                                          

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2002, $1,000.0 million 7.90% Notes due February 2005 and $250.0 million 7.25%   
debentures due March 2023.                                                      

The Company has a common stock repurchase program under which the Company 
is authorized, at December 31, 2001, to repurchase 6,492,460 additional shares  
in the future. Depending upon market conditions, among other things, the Company
may make limited repurchases of its common stock to offset stock issuances in   
connection with exercises of stock options during 2002.                         

Management remains confident that cash flows from operating activities and
available financing resources will be adequate to fund the Company's operations,
pay all amounts related to the REDUX and PONDIMIN diet drug litigation, pay     
dividends, maintain the ongoing programs of capital expenditures, including the 
amount already committed at December 31, 2001 of $851.6 million, and repay both 
the principal and interest on its outstanding obligations, without requiring the
disposition of any significant strategic core assets or businesses.             

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                      

The Company is exposed to market risk from changes in foreign currency exchange 
rates and interest rates that could impact its financial position, results of   
operations and cash flows. The Company manages its exposure to these market     
risks through its regular operating and financing activities and, when deemed   
appropriate, through the use of derivative financial instruments. The Company   
uses derivative financial instruments as risk management tools and not for      
trading purposes. In addition, derivative financial instruments are entered into
with a diversified group of major financial institutions in order to manage the 
Company's exposure to non-performance on such instruments.                      

FOREIGN CURRENCY RISK MANAGEMENT: The Company generates a portion of Net  
revenue from sales to customers located outside the United States, principally  
in Europe. International sales are generated mostly from international          
subsidiaries in the local countries with the sales typically denominated in the 
local currency of the respective country. These subsidiaries also incur most of 
their expenses in the local currency. Accordingly, most international           
subsidiaries use the local currency as their functional currency. International 
business, by its nature, is subject to risks including, but not limited to:     
differing economic conditions, changes in political climate, differing tax      
structures, other regulations and restrictions, and foreign exchange rate       
volatility. Accordingly, future results could be adversely impacted by changes  
in these or other factors.                                                      

The Company has established programs to protect against adverse changes in
exchange rates due to foreign currency volatility. The Company believes that the
foreign currency risks to which it is exposed are not reasonably likely to have 
a material adverse effect on the Company's financial position, results of       
operations or cash flows due to the high concentration of sales in the United   
States. No single foreign currency accounted for 5% or more of 2001 or 2000     
worldwide net revenue, except for the British pound sterling, which accounted   
for 5% and 7% of 2001 and 2000 worldwide net revenue, respectively. On January  
1, 2002, 12 member countries of the European Union adopted the Euro as a new    
common legal currency. Collectively, these countries accounted for 11% of both  
2001 and 2000 worldwide Net revenue.                                            

INTEREST RATE RISK MANAGEMENT: The fair value of the Company's fixed-rate 
long-term debt is sensitive to changes in interest rates. Interest rate changes 
result in gains/losses in the market value of this debt due to differences      
between the market interest rates and rates at the inception of the debt        
obligation. The Company manages this exposure to interest rate changes primarily
through the use of interest rate swaps. The Company has swapped an appropriate  
amount of its fixed rate debt into variable rate debt to maintain a             
fixed-to-variable ratio of approximately 1 to 1 on its total debt position,     
consistent with the Company's debt management philosophy.                       

At December 31, 2001, the notional/contract amounts, carrying values and  
fair values of the Company's financial instruments were as follows:             

                                                                [Download Table]

(Dollar amounts in millions)         Notional/                                  
DESCRIPTION                    Contract Amount     Carrying Value     Fair Value
--------------------------------------------------------------------------------
                                                                                
Forward contracts(1)                  $  438.8           $   17.9       $   17.9
Option contracts(1)                      796.4               12.9           12.9
Interest rate swaps                    1,500.0               12.8           12.8
Outstanding debt(2)                    9,445.5            9,454.6        9,607.7

(1)   If the value of the U.S. dollar were to increase or decrease by 10%, in   
relation to all hedged foreign currencies, the net receivable on the
    forward and option contracts would decrease or increase by approximately
$68.6.                                                              

(2)   If the interest rates were to increase or decrease by one percentage      
    point, the fair value of the outstanding debt would increase or decrease
by approximately $215.1.                                            

The estimated fair values approximate amounts at which these financial    
instruments could be exchanged in a current transaction between willing parties.
Therefore, fair values are based on estimates using present value and other     
valuation techniques that are significantly affected by the assumptions used    
concerning the amount and timing of estimated future cash flows and discount    
rates that reflect varying degrees of risk. Specifically, the fair value of     
forward contracts and interest rate swaps reflects the                          

64 Wyeth and Subsidiaries                                                       

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present value of the future potential gain if settlement were to take place on  
December 31, 2001; the fair value of option contracts reflects the present value
of future cash flows if the contracts were settled on December 31, 2001; and the
fair value of outstanding debt instruments reflects a current yield valuation   
based on observed market prices as of December 31, 2001.                        

FORWARD-LOOKING INFORMATION AND FACTORS THAT MAY AFFECT FUTURE RESULTS          

This Annual Report, including management's discussion and analysis set forth    
herein, contains certain forward-looking statements, including, among other     
things, statements regarding the Company's results of operations, future impact 
of presently known trends, Euro currency, competition, liquidity, financial     
condition and capital resources, PREMARIN, ENBREL supply, MENINGITEC sales,     
foreign currency and interest rate risk, the nationwide, class action settlement
relating to REDUX and PONDIMIN, and additional litigation charges related to    
REDUX and PONDIMIN including those for opt outs. These forward-looking          
statements are based on current expectations of future events that involve risks
and uncertainties, including, without limitation, risks associated with the     
inherent uncertainty of pharmaceutical research, product development,           
manufacturing and commercialization, and economic conditions, including interest
and currency exchange rate fluctuations, the impact of competitive or generic   
products, product liability and other types of lawsuits, the impact of          
legislative and regulatory compliance and product approval obtainment, and      
patents. From time to time, we also may provide oral or written forward-looking 
statements in other materials we release to the public. However, the Company    
assumes no obligation to publicly update any forward-looking statements, whether
as a result of new information, future events or otherwise. Certain additional  
factors which could cause the Company's actual results to differ materially from
expected and historical results have been identified by the Company in Exhibit  
99 to the Company's 2000 Annual Report on Form 10-K, and the Company's 2001     
Annual Report on Form 10-K, which will be filed by April 1, 2002, as well as the
sections identified below.                                                      

FUTURE IMPACT OF PRESENTLY KNOWN TRENDS                                         

PENSION ASSETS AND OTHER POSTRETIREMENT PLAN ASSUMPTIONS                        

As a result of the recent retraction in the global equity markets, the Company  
has experienced a significant reduction in the market value of assets held by   
the Company's pension plan. The Company's pension plan assets also were         
decreased by the normal annual benefit payments, which historically have been   
offset by the positive actual return on plan assets. In order to mitigate the   
decline, the Company made a $400.0 million funding contribution to the U.S.     
Non-bargaining pension plan in December 2001. Despite the contribution, the     
market value decline is expected to negatively impact pension expense in 2002.  
In addition, based on an annual internal study of actuarial assumptions, the    
expected long-term rate of return on plan assets and discount rate both have    
been decreased by 25 basis points to 9.25% and 7.25%, respectively. As a result 
of these developments, the 2002 net periodic benefit cost for pensions is       
anticipated to be approximately $40.0 million to $50.0 million higher than in   
2001.                                                                           

The Company also has reviewed the principal actuarial assumptions relating
to its other postretirement plan. In response to the recent increase in health  
care costs in the United States, the Company has increased the health care cost 
trend rate to 9.5% for 2001, decreasing to 5.0% by 2005. In reviewing           
postretirement claims data and other related assumptions, the Company believes  
that this trend rate increase appropriately reflects the trend aspects of the   
Company's postretirement plan as of December 31, 2001. As a result of the       
increase in the health care cost trend rate, the 2002 net periodic benefit cost 
for other postretirement benefits is anticipated to be approximately $10.0      
million to $20.0 million higher than in 2001.                                   

PROPOSED ACQUISITION OF IMMUNEX BY AMGEN                                        

In December 2001, Amgen Inc. and Immunex signed a definitive agreement providing
for Amgen to acquire Immunex in a merger transaction. The terms of the agreement
require that each share of Immunex common stock be exchanged for 0.44 shares of 
Amgen common stock and $4.50 in cash. Upon completion of the merger transaction,
the Company would receive over $1,000.0 million in cash proceeds, based upon the
number of shares the Company owned of Immunex as of December 31, 2001. The      
Company may use these cash proceeds to repay outstanding debt obligations, fund 
ongoing programs of capital expenditures or fund other working capital          
requirements.                                                                   

POTENTIAL TAX REFUND                                                            

On October 5, 2001, the U.S. District Court for the District of Columbia entered
judgment in favor of the Company in Boca Investerings Partnership v. U.S., in   
which the Company challenged the disallowance by the Internal Revenue Service   
(IRS) of a capital loss deduction in 1990 related to a partnership investment.  
The Court ordered the IRS to refund the tax paid, approximately $226.0 million, 
together with interest. The IRS has appealed the decision and, as a result, the 
Company has not recognized this anticipated refund in its 2001 Consolidated     
Financial Statements.                                                           

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS                                  

As of January 1, 2002, the Company adopted SFAS No. 142, Goodwill and Other     
Intangible Assets, which requires, among other things, the ceasing of           
amortization of goodwill and certain indefinite lived intangibles. In accordance
with the adoption of SFAS No. 142, the Company will cease amortizing goodwill.  
Included in Selling, general and administrative expenses for 2001               

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was approximately $160.5 million ($153.9 million after-tax or $0.12 per         
share-diluted) of goodwill amortization. The Company currently is assessing the 
impact the new impairment testing requirements may have on its financial        
position, results of operations and cash flows.                                 

In April 2001, the EITF reached a consensus on Issue No. 00-25, Vendor    
Income Statement Characterization of Consideration Paid to a Reseller of the    
Vendor's Products. EITF No. 00-25 requires the cost of certain vendor           
considerations be classified as a reduction of revenue rather than a marketing  
expense. The Company will adopt the provisions of EITF No. 00-25 effective      
January 1, 2002. The adoption of EITF No. 00-25 will result in reclassifications
of certain marketing expenses to revenues and will have no effect on income from
continuing operations. The Company does not anticipate the adoption of this     
consensus to significantly affect the growth rate of net revenues.              

CRITICAL ACCOUNTING POLICIES                                                    

The Company does not consider any specific accounting policies to be critical to
the economic success of the entity. The Company does not participate in, nor has
created, any off-balance sheet financing or other off-balance sheet special     
purpose entities, other than operating leases. In addition, the Company does not
enter into any derivative financial instruments for trading purposes and uses   
derivative financial instruments solely for managing its exposure to certain    
market risks from changes in foreign currency exchange rates and interest rates.

Euro Currency                                                                   

On January 1, 2002, Euro banknotes and coins were introduced in 12 of the 15    
member states of the European Union. The new common legal currency replaces the 
individual national currencies that currently are being withdrawn. The Company  
has effectively converted to the new single currency by identifying critical    
areas affected by the change and by successfully implementing programs to       
facilitate transition. The costs related to the Euro conversion and transition  
period did not have a material adverse effect on the Company's financial        
position, results of operations or cash flows.                                  

Competition                                                                     

The Company operates in the highly competitive pharmaceutical and consumer      
health care industries. The Company is not dependent on any one patent-protected
product or line of products for a substantial portion of its net revenues or    
results of operations. PREMARIN, the Company's principal conjugated estrogens   
product manufactured from pregnant mare's urine, and related products PREMPRO   
and PREMPHASE (which are single tablet combinations of the conjugated estrogens 
in PREMARIN and the progestin medroxyprogesterone acetate), are the leaders in  
their categories and contribute significantly to net revenue and results of     
operations. PREMARIN's natural composition is not subject to patent protection  
(although PREMPRO has patent protection). The principal uses of PREMARIN,       
PREMPRO and PREMPHASE are to manage the symptoms of menopause and to prevent    
osteoporosis, a condition involving a loss of bone mass in postmenopausal women.
Estrogen-containing products manufactured by other companies have been marketed 
for many years for the treatment of menopausal symptoms, and several of these   
products also have an approved indication for the prevention of osteoporosis.   
During the past several years, other manufacturers have introduced products for 
the treatment and/or prevention of osteoporosis. New products containing        
different estrogens than those found in PREMPRO and PREMPHASE and having many   
forms of the same indications also have been introduced. Some companies have    
attempted to obtain approval for generic versions of PREMARIN. These products,  
if approved, would be routinely substitutable for PREMARIN and related products 
under many state laws and third-party insurance payer plans. In May 1997, the   
FDA announced that it would not approve certain synthetic estrogen products as  
generic equivalents of PREMARIN given known compositional differences between   
the active ingredient of these products and PREMARIN. Although the FDA has not  
approved any generic equivalent to PREMARIN to date, PREMARIN will continue to  
be subject to competition from existing and new competing estrogen and other    
products for its approved indications and may be subject to generic competition 
from either synthetic or natural conjugated estrogens products in the future. At
least one other company has announced that it is in the process of developing a 
generic version of PREMARIN from the same natural source, and the Company       
currently cannot predict the timing or outcome of these or any other efforts.   

   The Company has been experiencing inconsistent results on dissolution testing
of certain dosage strengths of PREMARIN and is working with the FDA to resolve  
this issue. Until this issue is resolved, supply shortages of one or more dosage
strengths may occur. Although these shortages may adversely affect PREMARIN     
sales in one or more accounting periods, the Company believes that, as a result 
of current adequate inventory levels and the Company's enhanced process         
controls, testing protocols and an ongoing formulation improvement project,     
overall PREMARIN family sales will not be significantly impacted.               

ENBREL Supply                                                                   

Although the market demand for ENBREL is increasing, the sales growth currently 
is constrained by limits on the existing source of supply. This is expected to  
continue until the retrofitting of a Rhode Island facility is completed and     
approved, which is expected to occur in 2002. If the market demand continues to 
grow, there may be further supply constraints even after the Rhode Island       
facility begins producing ENBREL. The current plan for the longer term includes 
a new manufacturing facility, which is being constructed in Ireland.            

66 Wyeth and Subsidiaries                                                       

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DIRECTORS AND OFFICERS                                                          

BOARD OF DIRECTORS                                                              

John R. Stafford (1)                                                            
Chairman of the Board                                                           

Clifford L. Alexander, Jr. (2,4)                                                
President, Alexander & Associates, Inc.                                         

Frank A. Bennack, Jr. (1,3,5)                                                   
President and Chief Executive Officer, The Hearst Corporation                   

Richard L. Carrion (3,5)                                                        
Chairman, President and Chief Executive Officer, Popular, Inc.                  
and Banco Popular de Puerto Rico                                                

Robert Essner (1)                                                               
President and Chief Executive Officer                                           

John D. Feerick (2,3)                                                           
Dean, Fordham University School of Law                                          

John P. Mascotte (2,3,5)                                                        
Retired President and Chief Executive Officer, Blue Cross                       
and Blue Shield of Kansas City, Inc.                                            

Mary Lake Polan, M.D., Ph.D., M.P.H. (2,4)                                      
Chairman and Professor, Department of Gynecology and Obstetrics,                
Stanford University School of Medicine                                          

Ivan G. Seidenberg (1,4,5)                                                      
President and Co-Chief Executive Officer, Verizon Communications, Inc.          

Walter V. Shipley (3,5)                                                         
Retired Chairman of the Board, The Chase Manhattan Corporation                  

John R. Torell III (2,4)                                                        
Partner                                                                         
Core Capital Group                                                              

DIRECTOR EMERITUS                                                               

John W. Culligan                                                                
Retired -- Former Chairman of the Board                                         

PRINCIPAL CORPORATE                                                             
OFFICERS                                                                        

John R. Stafford (6,7,8,9,10)                                                   
Chairman of the Board                                                           

Robert Essner (6,7,8,9,10)                                                      
President and Chief Executive Officer                                           

Louis L. Hoynes, Jr. (6,7,8,9,10)                                               
Executive Vice President and General Counsel                                    

L. Patrick Gage, Ph.D. (6,7,8,9)                                                
Senior Vice President -- Science and Technology                                 

Kenneth J. Martin (6,7,8,9,10)                                                  
Senior Vice President and Chief Financial Officer                               

Bernard J. Poussot (6,7,8,9)                                                    
Senior Vice President                                                           

Lawrence V. Stein (7,8)                                                         
Senior Vice President and Deputy General Counsel                                

John B. Adams                                                                   
Vice President -- Corporate Development                                         

Egon E. Berg                                                                    
Vice President and Associate General Counsel                                    

Bruce Fadem                                                                     
Vice President -- Corporate Information Services and Chief Information Officer  

Leo C. Jardot                                                                   
Vice President -- Government Relations                                          

Paul J. Jones (7,8)                                                             
Vice President and Comptroller                                                  

Rene R. Lewin (6,7,8,9,10)                                                      
Vice President -- Human Resources                                               

Jack M. O'Connor (9)                                                            
Vice President and Treasurer                                                    

Marily H. Rhudy (6,8)                                                           
Vice President -- Public Affairs                                                

Jeffrey S. Sherman                                                              
Vice President and Associate General Counsel                                    

Steven A. Tasher (7)                                                            
Vice President -- Environmental Affairs and Facilities Operations,              
and Associate General Counsel                                                   

Justin R. Victoria                                                              
Vice President -- Investor Relations                                            

Mary Katherine Wold (9)                                                         
Vice President -- Taxes                                                         

Eileen M. Lach                                                                  
Secretary and Associate                                                         
General Counsel -- International                                                

PRINCIPAL DIVISION AND SUBSIDIARY OFFICERS                                      

Fort Dodge Animal Health Division                                               
E. Thomas Corcoran (6,8)                                                        
President                                                                       

Specialty Pharmaceuticals Division                                              
David G. Strunce                                                                
President                                                                       

Wyeth Consumer Healthcare                                                       
Ulf Wiinberg (6,7,8,9)                                                          
President                                                                       

Wyeth Consumer Healthcare International                                         
Bruce I. Macphail (8)                                                           
President                                                                       

Wyeth Consumer Healthcare U.S.                                                  
Douglas A. Rogers (8)                                                           
President                                                                       

Wyeth Pharmaceuticals                                                           
Bernard J. Poussot (6,7,8,9)                                                    
President                                                                       

Wyeth Pharmaceuticals -- Europe, Middle East and Africa                         
Robert N. Power (8)                                                             
President                                                                       

Wyeth Pharmaceuticals -- Intercontinental Region                                
Mark M. Larsen (8)                                                              
President                                                                       

Wyeth Pharmaceuticals -- North America                                          
Joseph M. Mahady (6,8)                                                          
President                                                                       

Wyeth Research                                                                  
L. Patrick Gage, Ph.D. (6,7,8,9)                                                
President                                                                       

Wyeth Vaccines and Nutrition                                                    
Kevin L. Reilly                                                                 
President                                                                       

(1) Executive Committee                                                     
(2) Audit Committee                                                         
(3) Compensation and Benefits Committee                                     
(4) Corporate Issues Committee                                              
(5) Nominating and Governance Committee                                     
(6) Management Committee                                                    
(7) Law/Regulatory Review Committee                                         
(8) Operations Committee                                                    
(9) Human Resources and Benefits Committee                                  
(10) Retirement Committee                                                     

                                                       Wyeth and Subsidiaries 67

EX-13
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CORPORATE DATA                                                                  

EXECUTIVE OFFICES                                                               
Wyeth                                                                           
Five Giralda Farms                                                              
Madison, NJ 07940                                                               
(973) 660-5000                                                                  

STOCK TRADING INFORMATION                                                       
Wyeth stock is listed on the New York Stock Exchange (ticker symbol: WYE).      

INDEPENDENT PUBLIC ACCOUNTANTS                                                  
Arthur Andersen LLP                                                             
1345 Avenue of the Americas                                                     
New York, NY 10105                                                              

ANNUAL MEETING                                                                  
The Annual Meeting of Stockholders will be held on Thursday, April 25, 2002 at  
the Headquarters Plaza Hotel in Morristown, New Jersey.                         

STOCKHOLDER ACCOUNT INFORMATION                                                 
The Bank of New York is the transfer agent, registrar, dividend disbursing agent
and dividend reinvestment agent for the Company. Stockholders of record with    
questions about lost certificates, lost or missing dividend checks, or          
notification of change of address should contact:                               
The Bank of New York                                                            
P.O. Box 11002                                                                  
Church Street Station                                                           
New York, NY 10286                                                              
(800) 565-2067 (Inside the United States and Canada)                            
(610) 312-5303 (Outside the United States and Canada)                           
For the hearing impaired: (888) 269-5221 (TDD)                                  
Via e-mail: shareowner-svcs@bankofny.com                                        
Internet address: www.stockbny.com                                              

BUYDIRECT STOCK PURCHASE AND SALE PLAN                                          
The BuyDIRECT plan provides stockholders of record and new investors with a     
convenient way to make cash purchases of the Company's common stock and to      
automatically reinvest dividends. Inquiries should be directed to The Bank of   
New York.                                                                       

FORM 10-K                                                                       
A copy of the Company's Annual Report on Form 10-K may be obtained by any       
stockholder without charge through The Bank of New York.                        

EQUAL EMPLOYMENT OPPORTUNITY                                                    
Our established affirmative action and equal employment programs demonstrate our
long-standing commitment to provide job and promotional opportunities for all   
qualified persons regardless of age, color, disability, national origin, race,  
religion, sex, sexual orientation, status as a Vietnam-era veteran or a special 
disabled veteran, or any military uniformed services obligation.                

POLICY ON HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION                           
Copies of the Company's "Policy on Health, Safety and Environmental Protection" 
and "2000 Environmental and Safety Report" may be obtained upon                 
written request to:                                                             
Wyeth                                                                           
Department of Environment and Safety                                            
Five Giralda Farms                                                              
Madison, NJ 07940                                                               

WYETH ON THE INTERNET                                                           
Wyeth's Internet address is:                                                    
www.wyeth.com                                                                   

TRADEMARKS                                                                      
Product designations appearing in differentiated type are trademarks.           

                                              Design: Arnold Saks Associates
                                                Major Photography: Mark Tuschman
68 Wyeth and Subsidiaries                       Text: Fulton Communications     

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 8-K Filing		Date		First		Last			Other Filings
		12/31/94		33					11-K, 10-K
		1/1/99		36		58
		10/7/99		48		52			8-K
		10/18/99		48
		11/3/99		41					8-K
		11/23/99		52
		12/31/99		33		50			11-K, 10-K
		1/1/00		38		58
		2/6/00		41
		2/15/00		59
		3/20/00		40
		3/30/00		52
		4/1/00		41
		6/30/00		33		62			10-Q, 8-K
		8/10/00		52
		8/28/00		52
		12/31/00		33		60			10-K405, 11-K
		1/1/01		33		58
		3/30/01		43		44
		5/1/01		6
		6/15/01		44
		8/15/01		52
		10/5/01		65
		12/15/01		40
		12/31/01		33		65			10-K405, 11-K, 10-K/A
		1/1/02		39		66
		1/2/02		52
		1/3/02		3		52
		1/18/02		52
		1/24/02		55
		3/11/02		2		6			8-K
Filed On / Filed As Of / For The Period Ended		3/13/02							8-K/A, 8-K
		4/1/02		65
		4/25/02		48		68			DEF 14A
		7/31/02		43		63
		3/15/04		44		63
		3/15/06		44		63			DEF 14A
		10/7/09		48
		3/15/11		44		63
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