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, 1997
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
FOR COLLEAGUES IN PUERTO RICO
_______________________________
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
FOR COLLEAGUES IN PUERTO RICO
FINANCIAL STATEMENTS
DECEMBER 31, 1997
and DECEMBER 31, 1996
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
FOR COLLEAGUES IN PUERTO RICO
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, 1997 2
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1996 3
Statement of Changes in Net Assets Available
for Benefits with Fund Information for the
year ended December 31, 1997 4
Statement of Changes in Net Assets Available 5
for Benefits with Fund Information for the
year ended December 31, 1996
Notes to Financial Statements 6 - 10
Signatures 12
Exhibit I - Master Trust Statement of Net Assets
Available for Benefits with Fund
Information as of October 31, 1997 and 1996
Exhibit II - Master Trust Statement of Changes in Net
Assets Available for Benefits with Fund
Information for the years ended October 31,
1997 and 1996
Exhibit III - Notes to the Master Trust Financial Statements
* Additional Information (Plan):
Schedule I - Schedule of Assets Held for Investment Purposes
At December 31, 1997 - Plan
* Additional Information (Master Trust):
Schedule I - Schedule of Assets Held for Investment
Purposes at October 31, 1997 - 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, 1998
To the Participants and Administrator of
the Warner-Lambert Savings and Stock Plan
for Colleagues in Puerto Rico
In our opinion, the accompanying statements of net assets available
for benefits with fund information and the related statements of
changes in net assets available for benefits with fund information
present fairly, in all material respects, the net assets available
for benefits of the Warner-Lambert Savings and Stock Plan for
Colleagues in Puerto Rico at December 31, 1997 and 1996, 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 Employee Retirement Income Security Act of 1974. The
Fund Information in the statement of net assets available for
benefits with fund information and the statements of changes in net
assets available for benefits with fund information 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
<TABLE>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
FOR COLLEAGUES IN PUERTO RICO
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
(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 $ 5,812 $ 8,239 $ 1,693 $ 2,416 $ 146 $ 157 $ 210 $18,673
Participant loans
receivable 114 177 33 143 3 - - 470
-------- -------- ------- -------- ------------- -------- ------- -------
Net assets available for
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
benefits $ 5,926 $ 8,416 $ 1,726 $ 2,559 $ 149 $ 157 $ 210 $19,143
======== ======== ======= ======== ============= ======== ======= =======
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
FOR COLLEAGUES IN PUERTO RICO
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
(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 $ 3,573 $ 4,290 $ 1,314 $ 2,590 $ 144 $ 129 $ 114 $ 12,154
Participant loans
receivable 34 102 42 132 4 - 4 318
-------- -------- ------- -------- ------------- -------- ------- --------
Net assets available for
<S> <C> <C> <C> <C> <C> <C> <C> <C>
benefits $ 3,607 $ 4,392 $ 1,356 $ 2,722 $ 148 $ 129 $ 118 $ 12,472
======== ======== ======= ======== ============= ======== ======= ========
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
FOR COLLEAGUES IN PUERTO RICO
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
(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 $ 2,401 $ 2,984 $ 430 $ 147 $ 4 $ 27 $ 42 $ 6,035
Investment Income on
Participant Loans 6 17 4 4 1 - - 32
Contributions:
Participant - 1,276 236 469 65 67 66 2,179
Company 352 1 - 2 - - - 355
------- -------- ------- ------ --------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total additions $ 2,759 $ 4,278 $ 670 $ 622 $ 70 $ 94 $ 108 $ 8,601
------- -------- ------- ------ --------- -------- ------- --------
Deductions from net assets attributable to:
Distribution to participants (429) (801) (121) (420) (27) (27) (11) (1,836)
Administrative expenses (11) (45) (8) (24) (2) (2) (2) (94)
Interfund transfers - 592 (171) (341) (40) (37) (3) -
------- -------- ------- ------ --------- -------- ------- --------
Total deductions (440) (254) (300) (785) (69) (66) (16) (1,930)
------- -------- ------- ------ --------- -------- ------- --------
Increase/(decrease) in net
assets during the year 2,319 4,024 370 (163) 1 28 92 6,671
Net assets available for benefits:
Beginning of period 3,607 4,392 1,356 2,722 148 129 118 12,472
------- -------- ------- ------ --------- -------- ------- --------
End of period $ 5,926 $ 8,416 $ 1,726 $2,559 $ 149 $ 157 $ 210 $ 19,143
======= ======== ======= ====== ========= ======== ======= ========
The accompanying notes are an integral part of the financial statements
</TABLE>
<TABLE>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
FOR COLLEAGUES IN PUERTO RICO
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 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 $ 1,313 $ 1,484 $ 248 $ 157 $ 19 $ 14 $ 17 $ 3,252
Investment Income on
Participant Loans 3 9 4 7 - - - 23
Contributions:
Participant - 527 203 526 71 70 54 1,451
Company 254 - - - - - - 254
------- -------- ------- ------ ------------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total additions 1,570 2,020 455 690 90 84 71 4,980
------- -------- ------- ------ ------------- -------- ------- --------
Distributions from net assets attributable to:
Distribution to participants (302) (306) (152) (553) (20) (13) (5) (1,351)
Administrative expenses (10) (28) (7) (26) (2) (2) (1) (76)
Interfund transfers - 175 (75) (106) (12) (6) 24 -
------- -------- ------- ------ ------------- -------- ------- --------
Net deductions (312) (159) (234) (685) (34) (21) 18 (1,427)
------- -------- ------- ------ ------------- -------- ------- --------
Increase in net
assets during the year 1,258 1,861 221 5 56 63 89 3,553
Net assets available for benefits:
Beginning of period 2,349 2,531 1,135 2,717 92 66 29 8,919
------- -------- ------- ------ ------------- -------- ------- --------
End of period $ 3,607 $ 4,392 $ 1,356 $2,722 $ 148 $ 129 $ 118 $ 12,472
======= ======== ======= ====== ============= ======== ======= ========
The accompanying notes are an integral part of the financial statements
</TABLE>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
FOR COLLEAGUES IN PUERTO RICO
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The financial statements of the Warner-Lambert Savings and Stock
Plan for Colleagues in Puerto Rico (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 (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 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.
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 Warner-Lambert Company (the "Company") in
Puerto Rico 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
before-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 participation and
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 matching contributions are invested in the Warner-
Lambert Company Stock Fund.
In 1997, the Internal Revenue Service approved a Voluntary
Compliance Resolution ("VCR") submitted by Warner-Lambert Company
designed to make contributions to the accounts of thirty (30)
employees who were not notified on in a timely fashion of their
eligibility to participate in the Plan. In 1997, concurrent with
the VCR, contributions were to be credited to affected
participants' accounts in the same manner as their current
contributions. For employees who were not contributing to the Plan
at the time of the VCR, contributions would be invested in the
Fixed Income Fund. Corrective measures have been implemented to
ensure that the same operational defect will not subsequently
occur.
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. A
description of all of these funds 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.
INTERNATIONAL STOCK FUND - This fund invests primarily in stocks of
established growth companies outside the U.S., predominantly in
Europe, the Far East, Australia, Canada, as well as other areas, to
provide diversification of an international fund, as well as the
opportunity for long-term capital growth.
BALANCED FUND - This fund invests in a balanced mix of
approximately 60% stocks and 40% bonds, to provide long-term growth
of capital from stocks and current income from bonds.
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.
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 1997 and 1996 were $15,472 and
$9,504, respectively.
Participant Loans
Loans may not exceed the lesser of (1) fifty thousand dollars or
(2) 50% of the participant's before-tax account balance and the
vested account balance in the Company Stock Fund. Each loan must
be for a minimum of five hundred 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 last business day of the month
before 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 calendar year and only two
loans will be permitted to be outstanding at any time.
Benefit Payments
Upon retirement, total disability, or death, participant balances
in Savings Investment Funds and Company Stock Fund may be paid as a
lump sum payment, in annual installments, or as an annuity. If
employment is terminated for any other reason, participants are
entitled to lump-sum payment of participant balances in Savings
Investment Funds and, if vested, 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 - PUERTO RICO AND TAX STATUS OF THE PLAN:
The Bureau of Income Tax of the Department of the Treasury of the
Commonwealth of Puerto Rico has ruled that the Plan qualifies under
section 165(a) of the Puerto Rico Income Tax Act of 1954 ("The
Act") and is, therefore, not subject to tax under present income
tax law. The Plan, being exempt under Section 165(a) of the Act is
subject to the provision of Section 404, which requires the trust
to file an annual return stating income, receipts, disbursements,
and other pertinent information. Further, the Plan has received a
determination letter advising that the original plan and subsequent
amendments through October 1, 1993 are qualified under Section
165(a) of the Puerto Rico Income Tax Act of 1954, as amended, and
will be treated for purposes of Section 501(a) of the Internal
Revenue Code as an organization described in Section 401(a) of the
Internal Revenue Code by reason of Section 1022(i)(1) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended. The Company believes that the Plan is designed and is
currently being operated with the applicable requirements of the
Internal Revenue Code. Therefore no provision for income taxes has
been taken.
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, 1997 and 1996, the Plan has a 1.4% and 1.5%
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,
1997 and 1996 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 made
Warner-Lambert
Savings and Stock Plan
for Colleagues in Puerto Rico
Schedule of Assets
Held for Investment Purposes
at December 31, 1997
(dollars in thousands)
Current
Cost Value
-------- -----------
Investment in Warner-Lambert Master
Trust $9,382 $18,673
Participant loans - 465
------- --------
$9,382 $19,138
======== =======
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 FOR COLLEAGUES
IN PUERTO RICO
Date: June 11, 1998 By: /s/
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, 1997
(Dollars in thousands)
W-L W-L
Company Colleague Fixed Combined Combined Combined
Stock Stock S&P 500 Income Growth One-Step Income
Fund Fund Fund Fund Fund Mix Fund Funds Total
------- --------- ------- ------ ------------- -------- --------- ---------
Assets:
Investments at fair value:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Warner-Lambert Common Stock $ 643,205 $ 374,438 $ - $ - $ - $ - $ - $1,017,643
Equity Funds - - 123,887 - 103,217 34,132 1,570 262,806
Short-term investments - - - 14,654 - - - 14,654
Investments at contract value:
Group annuity contracts - - - 42,258 - - - 42,258
Investment contracts - - - 87,418 - - - 87,418
--------- --------- -------- -------- ---------- -------- -------- ----------
Net assets available for
<S> <C> <C> <C> <C> <C> <C> <C> <C>
benefits $ 643,205 $ 374,438 $123,887 $144,330 $ 103,217 $ 34,132 $ 1,570 $1,424,779
========= ========= ======== ======== ========== ======== ======== ==========
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, 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 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, 1997
(Dollars in thousands)
W-L W-L
Company Colleague Fixed Combined Combined Combined
Stock Stock S&P 500 Income Growth One-Step Income
Fund Fund Fund Fund Funds Mix Funds Funds Total
-------- -------- ------- ------ ----------- --------- -------- --------
Additions to net assets attributable to:
Investment Income:
Interest income $ 52 $ 477 $ 156 $ 216 $ 145 $ 54 $ - $ 1,100
Dividend income 6,889 3,661 - 8,680 3,910 1,263 62 24,465
Net realized gain on
securities sold 33,663 20,284 9,539 - 3,778 1,303 2 68,569
Changes in unrealized
<S> <C> <C> <C> <C> <C> <C> <C> <C>
appreciation 335,750 178,234 21,766 - 10,150 2,686 31 548,617
-------- -------- ------- ------- ---------- --------- -------- ---------
Contributions:
Participant - 17,972 7,267 6,829 10,560 3,895 174 46,697
Company 8,767 14 19 62 15 3 - 8,880
-------- -------- ------- ------- ---------- --------- -------- ---------
8,969 17,986 7,286 6,891 10,575 3,898 174 55,577
-------- -------- ------- ------- ---------- --------- -------- ---------
Total additions 385,121 220,642 38,747 15,787 28,558 9,204 269 698,328
-------- -------- ------- ------- ---------- --------- -------- ---------
Deductions from net assets attributable to:
Distributions to participants (30,138) (13,323) (6,680) (13,418) (4,007) (1,717) (18) (69,301)
Administrative expenses (21) (291) (108) (171) (84) (40) (1) (716)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interfund transfers (10,228) 21,340 (9,616) (5,454) 1,977 879 1,102 -
-------- -------- ------- ------- ---------- --------- -------- ---------
Total deductions (40,387) 7,726 (16,404) (19,043) (2,114) (878) 1,083 (70,017)
-------- -------- ------- ------- ---------- --------- -------- ---------
Increase/(decrease) in net assets
during the year 344,734 228,368 22,343 (3,256) 26,444 8,326 1,352 628,311
Net assets available for benefits:
Beginning of period 298,471 146,070 101,544 147,586 76,773 25,806 218 796,468
-------- -------- ------- ------- ---------- --------- -------- ---------
End of period $643,205 $374,438 $123,887 $144,330 $ 103,217 $ 34,132 $ 1,570 $1,424,779
======== ======== ======== ======== ========== ========= ======== ==========
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, 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:
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
-------- ------- ------- ------ ----------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
-------- ------- ------- ------ ----------- ------- ------- -------
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
-------- ------- ------- ------- ----------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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:
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>
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.
Distributions to participants include net loan activity.
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 approximates 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 approximates fair value. The
average annual yield and average annual crediting interest rate
of these investments for each of the years ended 12/31/97 and
12/31/96 was 6%.
Investment Income
Dividend and interest income are recorded by T. Rowe Price (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.
Note 3 - SIGNIFICANT INVESTMENTS:
The following investments represent over 5% of the assets held
for investment purposes by the Master Trust at October 31, 1997:
Fair Value
Warner-Lambert Company Common Stock $1,017,643
S&P 500 Fund 123,887
Note 4 - Trust 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 Master Trust, including oversight of plan
investments, plan trustees and investment managers.
Schedule I
Warner-Lambert Company
Master Trust
Schedule of Assets Held for Investment Purposes
October 31, 1997
(Dollars in thousands)
Cost Fair Value
Warner-Lambert Company Common Stock $ 100,763 $1,017,643
S&P 500 Fund 68,272 123,887
T. Rowe Price Balance Fund 22,518 27,930
T. Rowe Price Capital Opportunity Fund 324 349
T. Rowe Price Emerging Markets Stock Fund 1,463 1,297
T. Rowe Price Equity Income Fund 7,749 8,536
T. Rowe Price European Stock Fund 1,476 1,637
T. Rowe Price Health Sciences Fund 1,027 1,144
T. Rowe Price High Yield Fund 1,069 1,091
T. Rowe Price International Stock Fund 22,520 25,583
T. Rowe Price Mid-Cap Growth Fund 5,642 6,267
T. Rowe Price New America Growth Fund 1,016 1,114
T. Rowe Price New Horizons Fund 4,733 4,949
T. Rowe Price New Income Fund 469 479
T. Rowe Price Small-Cap Stock Fund 2,853 3,310
T. Rowe Price Personal Strategy Growth Fund 1,336 1,447
T. Rowe Price Personal Strategy Income Fund 649 658
T. Rowe Price Science & Technology Fund 2,797 2,774
T. Rowe Price Small-Cap Value Fund 28,444 40,711
T. Rowe Price Spectrum Growth Fund 2,941 3,102
T. Rowe Price Spectrum Income Fund 984 995
T. Rowe Price Value Fund 4,761 5,546
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 4,101 4,101
Life Insurance Company of Georgia
annuity contract GA-351-GIC (7.23%
minimum annual effective rate)
guaranteed through 5/10/00 7,142 7,142
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 4,912 4,912
Life Insurance Company of Virginia
annuity contract GS-2868 (6.84% minimum
annual effective rate) guaranteed
through 9/18/00 4,706 4,706
Lincoln National Pension Co. annuity
contract GA-9672 (7.35% minimum annual
effective rate) guaranteed through
5/27/99 3,153 3,153
New York Life Insurance Co. annuity
contract GA-06948-001 (7.3% minimum
annual effective rate) guaranteed
through 11/03/98 7,687 7,687
New York Life Insurance Co. annuity
contract GA-06948-002 (7.41% minimum
annual effective rate) guaranteed
through 9/17/99 3,158 3,158
Peoples Security annuity contract
BDA00461FR (7.73% minimum annual effective
rate) guaranteed through 5/17/99 2,510 2,510
Security Life of Denver Insurance Co.
annuity contract FA-0272, principal and
interest (5.7% minimum annual effective
rate) guaranteed through 6/16/00 2,899 2,899
Beneficial Interest in Investment Contracts:
Bankers Trust Co. investment contract
93-644, principal and interest (5.0%
annual effective rate at 10/31/97)
maturing on 9/30/98 22,450 22,450
Deutsche Bank investment contract WAR-1
(7.11% annual effective rate at 10/31/97)
maturing on 3/31/00 31,713 31,713
State Street Bank investment contract
96028 (6.54% annual effective interest
rate at 10/31/97) 33,255 33,255
Short-Term Investments:
State Street Bank Money Fund 14,602 14,602
State Street Bank Short-Term Interest 52 52
_________ __________
TOTAL INVESTMENTS $ 422,906 $1,424,779
========= ==========
<TABLE>
Schedule II
-----------
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS* FOR THE
TWELVE MONTHS ENDED OCTOBER 31, 1997
(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 59,007,971 - - - 59,007,971 59,007,971 -
Price Common Stock
<S> <C> <C> <C> <C> <C> <C> <C>
T. Rowe Warner-Lambert - 53,773,434 - - 14,312,201 14,312,201 39,461,233
Price Common Stock
* Transactions or series of transactions in excess of 5% of the current
value of the Plan's 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, 1998 appearing on page 1 of this Form 11-K.
PRICE WATERHOUSE LLP
400 Campus Drive
Florham Park, New Jersey 07932
June 11, 1998
