SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
- ---- THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
or
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO
---------------
---------------------
-------------------------------
COMMISSION FILE NUMBER 1-3608
-----------------------------
WARNER-LAMBERT SAVINGS AND STOCK PLAN
-------------------------------------
WARNER-LAMBERT COMPANY
----------------------
(Name of issuer of securities held pursuant to the plan)
201 Tabor Road
Morris Plains, New Jersey 07950
--------------------------------
(Address of issuer's principal executive offices
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND
DECEMBER 31, 199
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
INDEX TO FINANCIAL STATEMENTS
Page(s)
Report of Independent Accountants 1
Statement of Net Assets Available for
Benefits with Fund Information as of
December 31, 1996 2
Statement of Net Assets Available for
Benefits with Fund Information as of
December 31, 1995 3
Statement of Changes in Net Assets Available
for Benefits with Fund Information
for the year ended December 31, 1996 4
Statement of Changes in Net Assets Available
for Benefits with Fund Information
for the year ended December 31, 1995 5
Notes to Financial Statements 6 - 11
Exhibit I - Master Trust Statement of Net Assets
Available for Benefits with Fund
Information as of October 31, 1996 and 1995
Exhibit II - Master Trust Statement of Changes in Net
Assets Available for Benefits with
Fund Information for the years ended
October 31, 1996 and 1995
Exhibit III - Notes to the Master Trust Financial
Statements
* Additional Information (Master Trust):
Schedule I - Schedule of Assets Held for Investment
Purposes at October 31, 1996 - Master Trust
Schedule II - Schedule of Reportable Transactions
Consent of Independent Accountants
* Other schedules required by Section 2520.103-10 of the
Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA have been omitted because they are not
applicable
REPORT OF INDEPENDENT ACCOUNTANTS
May 30, 1997
To the Participants and Administrator of
the Warner-Lambert Savings and Stock Plan
In our opinion, the accompanying statements of net assets
available for benefits and the related statements of changes in
net assets available for benefits present fairly, in all
material respects, the net assets available for benefits of the
Warner-Lambert Savings and Stock Plan at December 31, 1996 and
1995, and the changes in net assets available for benefits for
the years then ended, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the plan's management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
additional information included in Schedules I and II of the
Master Trust is presented for purposes of additional analysis
and is not a required part of the basic financial statements but
is additional information required by ERISA. The Fund
Information in the statement of net assets available for
benefits and the statements of changes in net assets available
for benefits is presented for purposes of additional analysis
rather than to present the net assets available for plan
benefits and changes in net assets available for benefits of
each fund. Schedules I and II of the Master Trust and the Fund
Information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in
our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
(Dollars in thousands)
<TABLE>
W-L W-L
Company Colleague Fixed Combined Combined
Stock Stock S&P 500 Income Combined One-Step Income
Fund Fund Fund Fund Growth Funds Mix Funds Funds Total
------- -------- ------- ------ ------------ --------- ------- --------
Assets:
Investment in Warner-
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lambert Master Trust $348,078 $172,720 $104,155 $144,343 $ 83,640 $ 27,597 $ 404 $880,937
Participant loans
receivable 531 3,086 2,742 6,887 2 2 - 13,250
-------- -------- -------- -------- -------- -------- ------- --------
Net assets available
<S> <C> <C> <C> <C> <C> <C> <C> <C>
for benefits $348,609 $175,806 $106,897 $151,230 $ 83,642 $ 27,599 $ 404 $894,187
======== ======== ======== ======== ======== ======== ======= ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1995
(Dollars in thousands)
W-L W-L
Company Colleague Fixed Small-Cap
Stock Stock S&P 500 Income International Balanced Value
Fund Fund Fund Fund Fund Fund Fund Total
------- -------- ------- ------ ------------- -------- ------- --------
Assets:
Investment in Warner-
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lambert Master Trust $229,849 $ 96,903 $ 87,374 $157,054 $ 25,162 $ 20,955 $ 28,670 $645,967
Participant loans
receivable 447 2,811 2,516 6,465 - - - 12,239
-------- -------- -------- -------- -------- -------- ------- --------
Net assets available
<S> <C> <C> <C> <C> <C> <C> <C> <C>
for benefits $230,296 $ 99,714 $ 89,890 $163,519 $ 25,162 $ 20,955 $28,670 $658,206
======== ======== ======== ======== ======== ======== ======= ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
(Dollars in thousands)
W-L W-L
Company Colleague Fixed Combined Combined
Stock Stock S&P 500 Income Combined One-Step Income
Fund Fund Fund Fund Growth Funds Mix Funds Funds Total
------- -------- ------- ------ ------------ --------- ------- --------
Additions to net assets attributable to:
Investment Income from the
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Warner-Lambert Master Trust $129,196 $ 60,473 $20,268 $ 8,899 $ 12,337 $ 3,459 $ 7 $234,639
Investment Income on
Participant Loans 39 347 166 244 142 51 - 989
Contributions:
Participant - 10,903 7,263 7,991 8,172 3,009 4 37,342
Company 7,856 - - - - - - 7,856
------- -------- ------- ------- ---------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total additions 137,091 71,723 27,697 17,134 20,651 6,519 11 280,826
------- -------- ------- ------- ---------- ------- ------- --------
Deductions from net assets attributable to:
Distributions to participants (14,530) (5,378) (5,723) (14,270) (2,750) (1,566) - (44,217)
Administrative expenses (10) (203) (111) (196) (75) (33) - (628)
Interfund transfers (4,238) 9,949 (4,857) (14,951) 11,982 1,722 393 0
------- -------- ------- -------- ---------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total deductions (18,778) 4,368 (10,691) (29,417) 9,157 123 393 (44,845)
------- -------- ------- ------- ---------- ------- ------- --------
Increase/(decrease) in net
assets during the year 118,313 76,091 17,006 (12,283) 29,808 6,642 404 235,981
Net assets available for benefits:
Beginning of period 230,296 99,714 89,890 163,519 53,832 20,955 - 658,206
-------- -------- ------- ------- ---------- ------- ------- --------
End of period $348,609 $175,805 $106,896 $151,236 $ 83,640 $27,597 $ 404 $894,187
======== ======== ======== ======== ========== ======= ======= ========
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
(Dollars in thousands)
W-L W-L
Company Colleague Fixed Small-Cap
Stock Stock S&P 500 Income International Balanced Value
Fund Fund Fund Fund Fund Fund Fund Total
------- --------- ------- ------ ------------- -------- -------- --------
Additions to net assets attributable to:
Investment income from the
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Warner-Lambert Master Trust $53,898 $ 21,884 $23,056 $ 9,658 $ 2,473 $ 3,818 $ 5,695 $120,482
Investment Income on
Participant Loans 31 256 125 230 66 44 56 808
Contributions:
Participant - 9,575 6,313 9,260 3,568 2,607 3,463 34,786
Company 7,544 - - - - - - 7,544
------- -------- ------- ------- ---------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total additions 61,473 31,715 29,494 19,148 6,107 6,469 9,214 163,620
------- -------- ------- ------- ---------- ------- ------- --------
Deductions from net assets attributable to:
Distributions to participants (12,669) (5,474) (4,675) (15,316) (963) (1,356) (1,052) (41,505)
Administrative expenses (11) (198) (113) (249) (35) (29) (34) (669)
Interfund transfers (5,523) (1,345) 2,015 543 (655) 1,626 3,339 0
------- -------- ------- ------- ---------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total deductions (18,203) (7,017) (2,773) (15,022) (1,653) 241 2,253 (42,174)
------- -------- ------- ------- ---------- ------- ------- --------
Increase in net assets
during the year 43,270 24,698 26,721 4,126 4,454 6,710 11,467 121,446
Net assets available for benefits:
Beginning of period 187,026 75,016 63,169 159,393 20,708 14,245 17,203 536,760
-------- -------- ------- ------- ---------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
End of period $230,296 $ 99,714 $89,890 $163,519 $ 25,162 $20,955 $28,670 $658,206
======== ======== ======= ======== ========== ======= ======= ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The financial statements of the Warner-Lambert Savings and Stock
Plan (the "Plan") are prepared on the accrual basis of
accounting.
Master Trust Arrangement
The assets of the Plan have been commingled with the assets of
the Warner-Lambert Savings and Stock Plan for Colleagues in
Puerto Rico (collectively referred to as "the Plans"), for
investment and administrative purposes in the Warner-Lambert
Company Master Trust (the "Master Trust"). The Plans do not own
specific Master Trust assets but rather maintain an undivided
beneficial interest in such assets. Each Plans' interest in the
Trust is credited or charged for contributions, transfers and
distributions. Realized gains and losses and changes in net
unrealized appreciation or depreciation on investments were
allocated to the Plans based upon each Plans' beneficial interest
in the net assets of the Master Trust.
Expenses
All expenses incurred are borne by the Plan.
NOTE 2 - DESCRIPTION OF THE PLAN:
The Plan is a defined contribution profit-sharing savings plan
covering employees of the Company and its domestic affiliates and
subsidiary companies who meet certain eligibility and
participation requirements. The following brief description of
the Plan is provided for general information purposes only.
Participants should refer to the Plan agreement for more complete
information.
Contributions
Participants may elect to contribute into the Plan from a minimum
of 1% up to a maximum of 15% of their basic earnings each year.
Participants have the option of contributing on a before-tax
basis and/or an after-tax basis. The Company contributes for
each participant an amount equal to 35% and 25% of such
participant's pre-tax and after-tax contributions, respectively,
limited to those participant contributions less than or equal to
6% of the participant's basic earnings. Based upon the vesting
requirements of the Plan, additional lump-sum matching
contributions are recorded each year of 25% to 65% of such
participants' contributions, up to 6% of base earnings, based
upon growth in the Company's earnings-per-share versus the prior
year. All Company contributions are invested in the Warner-
Lambert Company Stock Fund.
Investment Options
Participants can elect to have their contributions invested in
any of the funds noted below, with the exception of the Warner-
Lambert Company Stock Fund. At age fifty-five, participants can
transfer assets out of the Company Stock Fund to other investment
funds. Prior to October 1, 1996, participants were able to
invest in the following seven funds: Warner-Lambert Company Stock
Fund, Warner-Lambert Colleague Stock Fund, S&P 500 Fund, Fixed
Income Fund, Balanced Fund, Small-Cap Value Fund and
International Stock Fund. As of October 1, 1996, seventeen
additional investment options were added. For financial
presentation purposes, some of the funds below have been
combined, based on their investment objectives. A description of
all investment options are as follows:
Warner-Lambert Company Stock Fund - This fund invests employer
contributions in Warner-Lambert Company common stock.
Warner-Lambert Colleague Stock Fund - This fund invests in
Warner-Lambert common stock, to provide an additional opportunity
to participate in the performance of Warner-Lambert Company
common stock.
S&P 500 Fund - This fund invests in substantially all common
stocks that make up the S&P 500 to match, as closely as possible,
the performance of the S&P 500 Composite Stock Index.
Fixed Income Fund - This fund invests in marketable fixed income
securities, as well as a diversified mix of guaranteed investment
contracts, bank investment contracts, structured investment
contracts, and separate account contracts issued by high-quality
companies, to provide stability of principal value, minimal
credit risk and current income.
COMBINED GROWTH FUNDS
Small-Cap Value Fund - This fund invests in stocks of small
companies believed to be undervalued at the time of purchase and
have potential for capital growth, to provide long-term capital
growth.
International Stock Fund - This fund invests primarily in stocks
of established growth companies outside the U.S., predominantly
in Europe, the Far East, Australia and Canada, as well as other
areas, to provide the diversification of an international fund,
as well as the opportunity for long-term capital growth.
Equity Income Fund - This fund invests in common stocks of
established companies that pay above-average dividends, and have
prospects of future dividend increases, primarily to provide a
high level of dividend income, and secondarily, capital growth.
Value Fund - This fund invests in common stocks deemed to be
undervalued or out of favor in the marketplace, primarily to
provide long-term capital growth and, secondarily, income.
Mid-Cap Growth Fund - This fund invests in stocks of medium-sized
companies with attractive growth prospects and established
operating histories, to provide long-term capital growth.
European Stock Fund - This fund invests in stocks of emerging and
established European companies which seek to benefit from
opportunities created by economic integration in Western Europe
and potential new markets in Eastern Europe, to provide the
diversification of an international fund as well as the
opportunity for long-term capital growth.
OTC Fund - This fund invests in stocks of small, growth-oriented,
or undervalued companies traded in the over-the-counter market,
to provide long-term capital growth using a combined growth and
value approach.
Emerging Markets Stock Fund - This fund invests in stocks of
companies in the developing markets of Latin America, the Far
East, Europe and Africa, to provide a high level of long-term
capital growth.
Capital Opportunity Fund - This fund invests in a concentrated
portfolio of stocks of 30 to 50 U.S. companies, with a flexible
investment strategy that allows for both growth and value of
small, medium-sized, and large companies, to provide a high level
of long-term capital growth.
Health Sciences Fund - This fund invests primarily in the common
stocks of companies engaged in the research, development,
production, or distribution of health-related products and
services, to provide long-term capital growth.
New America Growth Fund - This fund invests primarily in the
common stocks of U.S. companies in service industries, such as
health care, financial services and food services, to provide
long-term capital growth.
New Horizons Fund - This fund invests in common stocks of small,
rapidly growing companies in a broad range of industries, early
in the corporate life cycle, to provide long-term capital growth.
Science & Technology Fund - This fund invests in common stocks of
companies that are expected to benefit from the development,
advancement, and use of science and technology, such as those in
computer, electronics, biotechnology and chemical industries, to
provide long-term capital growth.
COMBINED ONE-STEP MIX FUNDS
Balanced Fund - This fund invests in a balanced mix of
approximately 60% stocks and 40% bonds, to provide long-term
growth of capital and current income.
Spectrum Income Fund - This fund invests in a managed mix of T.
Rowe Price funds, including four U.S. bond funds, an
international bond fund, and a money market fund, to provide
higher income from a managed mix of funds.
Spectrum Growth Fund - This fund invests in a managed mix of T.
Rowe Price funds, including five U.S. stock funds, an
international stock fund and a money market fund, to provide
long-term growth of capital and income from a managed mix of
funds.
Personal Strategy Income Fund - This fund invests in a
diversified mix of approximately 40% stocks, 40% bonds and 20%
money market securities, to provide the highest total return over
time consistent with a primary emphasis on income (bonds) and a
secondary emphasis on capital appreciation(stocks).
Personal Strategy Growth Fund - This fund invests in a
diversified mix of approximately 80% stocks and 20% bonds and
money market securities, to provide the highest total return over
time consistent with a primary emphasis on capital appreciation
and a secondary emphasis on income.
COMBINED INCOME FUNDS
New Income Fund - This fund invests in U.S. Treasury securities,
corporate bonds, and bank obligations with medium to long-term
maturity dates, to provide a high level of income over the long
term consistent with preservation of capital.
High Yield Fund - This fund invests primarily in longer-term,
lower-quality corporate ("junk") bonds that have an average
maturity of approximately 10 years, primarily to provide a high
level of income and, secondarily, capital growth.
Changes in the participants' allocations relating to their
contributions and the allocation of past contributions and
earnings can be requested at any time. A participant may also
suspend contributions or withdraw from the Plan at any time,
subject to certain restrictions and penalties.
Vesting
Generally, participating employees become fully vested in Company
contributions made on their behalf to the Plan after completing
three years of Plan membership or five years of service.
Forfeitures reduce contributions otherwise due from the Company.
Forfeitures for the plan years 1996 and 1995 were $144,526 and
$161,540, respectively.
Participant Loans
Loans may not exceed the lesser of (1) fifty thousand dollars or
(2) 50% of the participant's before-tax balance. Each loan must
be for a minimum of one thousand dollars. All loans will be
repaid with interest at a rate that is equal to the prime rate
effective at the close of business on the first business day of
the quarter in which the loan is taken. Such rate remains in
effect for the life of the loan. The term of the loan shall not
exceed 48 months. A participant may take only one loan per year
and only two loans will be permitted to be outstanding at any
time. Participants may borrow from both the before-tax account
balance and the vested account balance in the Company Stock Fund.
Plan Termination
In the event of termination of the Plan, or if there is a
complete discontinuance of contributions under the Plan, all
rights of participants in accumulated investments credited to
them become fully vested. If the Plan is terminated by
resolution of the Warner-Lambert Company Board of Directors, the
balance in accumulated investments credited to each participant
shall be distributed to the participant.
NOTE 3 - TAX STATUS OF THE PLAN:
The Internal Revenue Service ("IRS") issued a favorable
determination letter to the Plan, dated September 20, 1995,
indicating that the Plan documentation as reviewed by the IRS
satisfied the requirements of Section 401(a) of the Internal
Revenue Code. The Company believes that the Plan is designed and
is currently being operated in compliance with the applicable
requirements of the IRC. Accordingly, no provision has been made
for federal income taxes.
NOTE 4 - PLAN ADMINISTRATION:
The Retirement and Savings Plan Committee of the Warner-Lambert
Company Board of Directors (the "Committee") monitors and reports
on the selection and termination of trustees and investment
managers and on the investment activity and performance. The
Committee also implements the overall asset allocation guidelines
as established by the Board of Directors and decides on benefit
appeals. The Investment Committee, established by the Warner-
Lambert Company Board of Directors, is responsible for the daily
administration of the Plan, including oversight of plan
investments, plan trustees and investment managers.
NOTE 5 - MASTER TRUST FINANCIAL INFORMATION:
At December 31, 1996 and 1995, the Plan has a 98.5% and 98.6%
interest, respectively, in the Master Trust. The financial
statements for the Master Trust are prepared on the modified cash
basis. The financial statements for the years ended October 31,
1996 and 1995 follow.
The Plan's financial statements have been adjusted for November
and December activity. All adjustments necessary to reflect the
Plan's financial statements on an accrual basis have been
recorded
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Warner-Lambert Investment Committee has duly caused
this annual report to be signed by the undersigned thereunto duly
authorized.
WARNER-LAMBERT SAVINGS
AND STOCK PLAN
Date: June 11, 1997 By: /s/ Ernest J. Larini
--------------------
Ernest J. Larini
Chairman
Warner-Lambert Investment
Committee
<TABLE>
EXHIBIT I
1 of 2
WARNER-LAMBERT COMPANY
MASTER TRUST
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
AS OF OCTOBER 31, 1996
(Dollars in thousands)
W-L W-L
Company Colleague Fixed Combined Combined
Stock Stock S&P 500 Income Combined One-Step Income
Fund Fund Fund Fund Growth Funds Mix Funds Funds Total
------- -------- ------- ------ ------------- --------- -------- ---------
Assets:
Investments at fair value:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Warner-Lambert Common Stock $298,471 $146,070 $ - $ - $ - $ - $ - $ 444,541
Equity Funds - - 101,544 - 76,773 25,806 218 204,341
Short-term investments - - - 3,477 - - - 3,477
Investments at contract value:
Group annuity contracts - - - 49,462 - - - 49,462
Investment contracts - - - 94,647 - - - 94,647
-------- -------- ------- ------- ---------- ------- ------- ---------
Net assets available for
<S> <C> <C> <C> <C> <C> <C> <C> <C>
benefits $298,471 $146,070 $101,544 $147,586 $ 76,773 $25,806 $ 218 $ 796,468
======== ======== ======== ======== ========== ======= ======== =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EXHIBIT I
2 of 2
WARNER-LAMBERT COMPANY
MASTER TRUST
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
AS OF OCTOBER 31, 1995
(Dollars in thousands)
W-L W-L
Company Colleague Fixed Small-Cap
Stock Stock S&P 500 Income International Balanced Value
Fund Fund Fund Fund Fund Fund Fund Total
------- --------- ------- ------ ------------- -------- --------- ---------
Assets:
Investments at fair value:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Warner-Lambert Common Stock $202,849 $ 86,363 $ - $ - $ - $ - $ - $ 289,212
Equity Funds - - 82,082 - 23,490 19,666 26,270 151,508
Short-term investments - - - 4,084 - - - 4,084
Investments at contract value:
Group annuity contracts - - - 64,614 - - - 64,614
Investment contracts - - - 89,056 - - - 89,056
-------- -------- ------- ------- ---------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Assets 202,849 86,363 82,082 157,754 23,490 19,666 26,270 598,474
Liabilities:
Accrued Administrative Expenses - (4) (4) (7) (1) (1) (1) (18)
-------- -------- ------- ------- ---------- ------- -------- --------
Net assets available for
benefits $202,849 $ 86,359 $82,078 $157,747 $ 23,489 $19,665 $ 26,269 $ 598,456
======== ======== ======= ======== ========== ======= ======== =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EXHIBIT II
1 of 2
WARNER-LAMBERT COMPANY
MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1996
(Dollars in thousands)
W-L W-L
Company Colleague Fixed Combined Combined
Stock Stock S&P 500 Income Combined One-Step Income
Fund Fund Fund Fund Growth Funds Mix Funds Funds Total
-------- --------- ------- ------ ------------- --------- ------- --------
Additions to net assets attributable to:
Investment Income:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income $ 40 $ 342 $ 167 $ 254 $ 139 $ 52 $ - $ 994
Dividend income 6,430 2,886 - 9,449 2,069 1,037 - 21,871
Net realized gain on
securities sold 12,386 4,922 4,691 - 2,100 685 - 24,784
Changes in unrealized
appreciation 86,927 40,195 15,572 - 5,801 1,574 - 150,069
-------- ------- ------- ------ ----------- ------- ------- -------
105,783 48,345 20,430 9,703 10,109 3,348 - 197,718
Contributions:
Participant 287 13,405 8,652 10,543 9,105 3,372 1 45,365
Company 8,042 - - - - - - 8,042
-------- ------- ------- ------ ----------- ------- ------- -------
8,329 13,405 8,652 10,543 9,105 3,372 1 53,407
-------- ------- ------- ------ ----------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total additions 114,112 61,750 29,082 20,246 19,214 6,720 1 251,125
-------- ------- ------- ------ ----------- ------- ------- -------
Deductions from net assets attributable to:
Distributions to participants (14,276) (8,290) (6,979) (17,564) (3,627) (1,690) - (52,426)
Administrative expenses (19) (219) (116) (225) (74) (34) - (687)
Interfund transfers (4,195) 6,470 (2,521) (12,618) 11,502 1,145 217 0
-------- ------- ------- ------- ----------- ------- ------- -------
Total deductions (18,490) (2,039) (9,616) (30,407) 7,801 (579) 217 (53,113)
-------- ------- ------- ------- ----------- ------- ------- -------
Increase/(decrease) in net
assets during the year 95,622 59,711 19,466 (10,161) 27,015 6,141 218 198,012
Net assets available for benefits:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of period 202,849 86,359 82,078 157,747 49,758 19,665 0 598,456
-------- -------- -------- -------- ----------- -------- ------- --------
End of period $298,471 $146,070 $101,544 $147,586 $ 76,773 $25,806 $ 218 $796,468
======== ======== ======== ======== =========== ======== ======= ========
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
EXHIBIT II
2 of 2
WARNER-LAMBERT COMPANY
MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1995
(Dollars in thousands)
W-L W-L
Company Colleague Fixed Small-Cap
Stock Stock S&P 500 Income International Balanced Value
Fund Fund Fund Fund Fund Fund Fund Total
-------- -------- ------- ------ ------------- -------- -------- --------
Additions to net assets attributable to:
Investment Income:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income $ 31 $ 248 $ 120 $ 227 $ 66 $ 42 $ 52 $ 786
Dividend income 6,196 2,460 - 9,739 1,273 1,009 1,259 21,936
Net realized gain on
securities sold 11,589 3,331 1,303 - (162) 74 126 16,261
Changes in unrealized
appreciation(depreciation) 9,847 5,070 15,355 - (949) 1,638 2,350 33,311
-------- ------- ------- ------- ----------- ------- ------- -------
27,663 11,109 16,778 9,966 228 2,763 3,787 72,294
Contributions:
Participant 202 11,894 7,355 11,797 4,220 2,939 3,799 42,206
Company 7,751 - - - - - - 7,751
-------- ------- ------- ------- ----------- ------- ------- -------
7,953 11,894 7,355 11,797 4,220 2,939 3,799 49,957
-------- ------- ------- ------- ----------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total additions 35,616 23,003 24,133 21,763 4,448 5,702 7,586 122,251
-------- ------- ------- ------- ----------- ------- ------- -------
Deductions from net assets attributable to:
Distributions to participants (13,645) (8,184) (6,174) (19,565) (1,448) (1,685) (1,392) (52,093)
Administrative expenses (22) (226) (119) (284) (35) (29) (33) (748)
Interfund transfers (5,318) (461) 1,489 664 (709) 1,364 2,971 0
-------- ------- ------- ------- ----------- ------- ------- -------
Total deductions (18,985) (8,871) (4,804) (19,185) (2,192) (350) 1,546 (52,841)
-------- ------- ------- ------- ----------- ------- ------- -------
Increase in net assets
<S> <C> <C> <C> <C> <C> <C> <C> <C>
during the year 16,631 14,132 19,329 2,578 2,256 5,352 9,132 69,410
Net assets available for benefits:
Beginning of period 186,218 72,227 62,749 155,169 21,233 14,313 17,137 529,046
-------- ------- ------- -------- ----------- ------- -------- --------
End of period $202,849 $86,359 $82,078 $157,747 $ 23,489 $19,665 $ 26,269 $598,456
======== ======= ======= ======== =========== ======= ======== ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
Exhibit III
WARNER-LAMBERT COMPANY
MASTER TRUST
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Financial Statement Presentation
The financial statements of the Warner-Lambert Company Master
Trust (the "Master Trust") include the assets of the Warner-
Lambert Savings and Stock Plan and the Warner-Lambert Savings and
Stock Plan for Colleagues in Puerto Rico (collectively the
"Plans") and are prepared on a modified cash basis of accounting.
The Plans are defined contribution profit-sharing-savings plans,
subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"), as amended.
The assets of the Plans have been commingled for investment and
administrative purposes in the Master Trust. Accordingly, the
Plans do not own specific Master Trust assets but rather maintain
an undivided beneficial interest in such assets. Each Plan's
interest in the Trust is credited or charged for contributions,
transfers and distributions. Realized gains and losses and
changes in net unrealized appreciation or depreciation on
investments were allocated to the Plans based upon each Plan's
beneficial interest in the net assets of the Master Trust.
Valuation of Investments
Investments in securities traded on a national exchange are
valued based upon the last published quotations for the last
business day of the year. Shares of equity funds are valued at
cost which is equal to market value. Other government securities
and short-term investments are valued at market value. The fully
benefit-responsive group annuity and investment contracts, the
principal and interest of which are guaranteed, are valued at
contract value representing contributions made under the
contracts, plus interest at the contract rate, less funds
withdrawn. Contract value is equal to fair value. The average
annual yield and average annual crediting interest rate of these
investments for the year ended 12/31/96 was 6.13% and 6.43%,
respectively, and for the year ended 12/31/95 was 6.69%.
Investment Income
Dividend and interest income are recorded by the trustee as
earned. Realized gains and losses from the sale of securities
are accounted for as of the trade date. In calculating such
amounts, the cost of investments sold is determined on a basis of
the moving average acquisition cost.
Expenses
All expenses incurred are borne by the Plans.
NOTE 2 - TAX STATUS OF THE MASTER TRUST:
The Plans in the Master Trust are intended to be qualified plans
under Section 401(a) of the Internal Revenue Code, and the Master
Trust established thereunder is entitled to exemption from
federal income tax under the provisions of Section 501(a) of the
Code. Accordingly, no provision for federal income tax has been
made.
Schedule I
Warner-Lambert Company
Master Trust
Schedule of Assets Held for Investment Purposes
October 31, 1996
(Dollars in thousands)
Cost Fair Value
------ ----------
Warner-Lambert Company Common Stock $176,560 $444,541
S&P 500 Fund 67,707 101,544
T. Rowe Price Balance Fund 21,257 24,273
T. Rowe Price Capital Opportunity Fund 197 193
T. Rowe Price Emerging Markets Stock Fund 573 556
T. Rowe Price Equity Income Fund 2,161 2,175
T. Rowe Price European Stock Fund 357 358
T. Rowe Price Health Sciences Fund 610 591
T. Rowe Price High Yield Fund 188 187
T. Rowe Price International Stock Fund 26,000 28,683
T. Rowe Price Mid-Cap Growth Fund 2,920 2,874
T. Rowe Price New America Growth Fund 495 490
T. Rowe Price New Horizons Fund 2,926 2,845
T. Rowe Price New Income Fund 30 31
T. Rowe Price OTC Fund 1,375 1,347
T. Rowe Price Personal Strategy Growth Fund 330 331
T. Rowe Price Personal Strategy Income Fund 290 293
T. Rowe Price Science & Technology Fund 979 967
T. Rowe Price Small-Cap Value Fund 27,399 33,667
T. Rowe Price Spectrum Growth Fund 672 668
T. Rowe Price Spectrum Income Fund 240 241
T. Rowe Price Value Fund 2,024 2,027
Beneficial Interest in Group Annuity Contracts:
Canada Life Assurance Co. annuity
contract P-45881 (7.24% minimum annual
effective rate) guaranteed through
6/21/00 $4,102 $4,102
Life Insurance Company of Georgia
annuity contract GA-351-GIC (7.23%
minimum annual effective rate)
guaranteed through 5/10/00 6,661 6,661
Life Insurance Company of Georgia
annuity contract GA-356-GIC (6.23%
minimum annual effective rate)
guaranteed through 6/12/00 1,990 1,990
Life Insurance Company of Virginia
annuity contract GS-2755 (5.6% minimum
annual effective rate) guaranteed
through 12/17/98 4,652 4,652
Life Insurance Company of Virginia
annuity contract GS-2868 (6.84% minimum
annual effective rate) guaranteed
through 9/18/00 4,405 4,405
Lincoln National Pension Co. annuity
contract GA-9672 (7.35% minimum annual
effective rate) guaranteed through
5/27/99 2,937 2,937
New York Life Insurance Co. annuity
contract GA-06948-001 (7.3% minimum
annual effective rate) guaranteed
through 8/17/98 11,895 11,895
New York Life Insurance Co. annuity
contract GA-06948-002 (7.41% minimum
annual effective rate) guaranteed
through 9/17/99 2,940 2,940
Peoples Security annuity contract
BDA00461FR (7.73% minimum annual effective
rate) guaranteed through 5/17/99 2,330 2,330
Security Life of Denver Insurance Co.
annuity contract FA-0272, principal and
interest (5.7% minimum annual effective
rate) guaranteed through 6/16/00 3,450 3,450
Sun Life Insurance Company of America
annuity contract 4376 (6.8% minimum
annual effective rate) guaranteed
through 6/17/97 4,100 4,100
Beneficial Interest in Investment Contracts:
Bankers Trust Co. investment contract
93-644, principal and interest (4.8%
annual effective rate at 10/31/96)
maturing on 9/30/98 $ 28,978 $ 28,978
Deutsche Bank investment contract WAR-1
(7.25% annual effective rate at 10/31/96)
maturing on 3/31/00 29,614 29,614
State Street Bank investment contract
96028 (6.50% annual effective interest
rate at 10/31/96) 36,055 36,055
Short-Term Investments
State Street Bank Money Fund $ 3,454 $ 3,454
State Street Bank Short-Term Interest 23 23
TOTAL INVESTMENTS $482,876 $796,468
======== ========
<TABLE>
Schedule II
-----------
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS* FOR THE
TWELVE MONTHS ENDED OCTOBER 31, 1996
(Dollars in thousands)
Expense Current
Incurred Value on
Party Description Purchase Selling Lease with Cost Transaction Net Gain
Involved of Asset Price Price Rental Transaction of Asset Date (loss)
- -------- ----------- ----------- ---------- ------ ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
T.Rowe Warner-Lambert $23,434,506 $ 8,854,678 -- -- $28,987,774 $32,289,184 $3,301,410
Price Common Stock
T. Rowe Peoples Security 1,996,321 35,862,253 -- -- 37,858,574 37,858,574 --
Price GIC
T. Rowe Provident Life 1,593,450 29,213,412 -- -- 30,806,862 30,806,862 --
Price GIC
<S> <C> <C> <C> <C> <C> <C> <C>
T. Rowe State Street Bank 36,054,463 -- -- -- 36,054,463 36,054,463 --
Price GIC
* Transactions or series of transactions in excess of 5% of the current value of the Plans assets as of October 31, 1996, as
defined in Section 2520.103-6 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA
</TABLE>
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the
Prospectus constituting part of the Registration Statement on
Form S-8 ( Registration No. 33-12209) of Warner-Lambert Company
of our report dated May 30, 1997 appearing in the Annual Report
of Warner-Lambert Company Savings and Stock Plan, which is
incorporated in this annual report on Form 11-K.
PRICE WATERHOUSE LLP
4 Headquarters Plaza North
Morristown, New Jersey 07962
June 11, 1997
