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
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, 1997 AND
DECEMBER 31, 1996
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, 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
for Benefits with Fund Information
for the year ended December 31, 1996 5
Notes to Financial Statements 6 - 11
Signatures 13
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
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 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
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
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 Combined Combined Combined
Stock Stock S&P 500 Income Growth One-Step Income
Fund Fund Fund Fund Funds Mix Funds Funds Total
------- -------- ------- ------ ----------- --------- -------- ---------
Assets:
Investment in Warner-
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lambert Master Trust $547,411 $329,373 $128,078 $137,795 $105,938 $ 36,388 $ 1,703 $1,286,686
Participant loans
receivable 632 4,161 2,893 7,100 1 - 11 14,798
-------- -------- -------- -------- -------- ------- ------- ----------
Net assets available
<S> <C> <C> <C> <C> <C> <C> <C> <C>
for benefits $548,043 $333,534 $130,971 $144,895 $105,939 $ 36,388 $ 1,714 $1,301,484
======== ======== ======== ======== ======== ======== ======= ==========
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, 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:
Investment in Warner-
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lambert Master Trust $348,078 $172,719 $104,154 $144,349 $ 83,638 $ 27,595 $ 404 $880,937
Participant loans
receivable 531 3,086 2,742 6,887 2 2 - 13,250
-------- -------- -------- -------- -------- -------- ------- --------
Net assets available
for benefits $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, 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 from the
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Warner-Lambert Master Trust $234,776 $123,728 $33,289 $ 8,506 $ 15,236 $ 5,353 $ 118 $421,006
Investment Income on
Participant Loans 48 493 147 204 142 52 - 1,086
Contributions:
Participant - 18,237 6,950 6,072 10,864 3,946 193 46,262
Company 8,569 13 19 43 15 3 - 8,662
------- -------- ------- ------- ---------- ------- ------- --------
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Total additions 243,393 142,471 40,405 14,825 26,257 9,354 311 477,016
------- -------- ------- ------- ---------- ------- ------- --------
Deductions from net assets attributable to:
Distributions to participants (31,151) (12,157) (6,392) (13,931) (3,773) (1,535) (26) (68,965)
Administrative expenses (12) (316) (114) (166) (100) (45) (1) (754)
Interfund transfers (12,796) 27,731 (9,824) (7,069) (85) 1,017 1,026 -
------- -------- ------- ------- ---------- ------- ------- --------
Total deductions (43,959) 15,258 (16,330) (21,106) (3,958) (563) 999 (69,719)
------- -------- ------- ------- ---------- ------- ------- --------
Increase/(decrease) in net assets
during the year 199,434 157,729 24,705 (6,341) 22,299 8,791 1,310 407,297
Net assets available for benefits:
Beginning of period 348,609 175,805 106,896 151,236 83,640 27,597 404 894,187
------- -------- ------- ------- ---------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
End of period $548,043 $333,534 $130,971 $144,895 $105,939 $36,388 $ 1,714 $1,301,484
======== ======== ======== ======== ========== ======= ======= ==========
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
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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
------- -------- ------- ------- ---------- ------- ------- --------
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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 -
------- -------- ------- -------- ---------- ------- ------- --------
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
-------- -------- ------- ------- ---------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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>
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 Warner-Lambert Company (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
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. Standard Company 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 in a timely fashion of their
eligibility to participate in the Plan. In 1997, concurrent with
the VCR, contributions were 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, the 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. Prior to October 1, 1997, 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, 1997, 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.
Small-Cap Stock 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 1997 and 1996 were $176,088 and
$144,526, 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.
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 - 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 Internal Revenue Code. 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, 1997 and 1996, the Plan has a 98.6% and 98.5%
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
recorded
Warner-Lambert
Savings and Stock Plan
Schedule of Assets
Held for Investment Purposes
at December 31, 1997
(dollars in thousands)
Current
Cost Value
-------- -----------
Investment in Warner-Lambert Master
Trust $578,782 $1,286,686
Participant loans - 14,798
-------- ----------
$578,782 $1,301,484
======== ==========
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, 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:
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
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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
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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
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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
-------- -------- ------- ------- ---------- --------- -------- ---------
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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)
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:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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:
<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
-------- ------- ------- ------ ----------- ------- ------- -------
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:
Beginning of period 202,849 86,359 82,078 157,747 49,758 19,665 0 598,456
-------- -------- -------- -------- ----------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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, October 31,
1997 1996
----------- -----------
Warner-Lambert Company Common Stock $1,017,643 $444,541
S&P 500 Fund 123,887 101,544
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 $ 428,136 $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> <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
</TABLE>
* 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
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
