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, 1998
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, 1998
and DECEMBER 31, 1999
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
FOR COLLEAGUES IN PUERTO RICO
INDEX TO FINANCIAL STATEMENTS
Page(s)
=======
Report of Independent Accountants 2
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1998 3
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1997 4
Statement of Changes in Net Assets Available
for Benefits with Fund Information for the
year ended December 31, 1998 5
Statement of Changes in Net Assets Available 6
for Benefits with Fund Information for the
year ended December 31, 1997
Notes to Financial Statements 7 - 11
* Additional Information:
Schedule I - Schedule of Assets Held for Investment
Purposes At December 31, 1998 12
Signature 13
Exhibit I - Master Trust Statement of Net Assets
Available for Benefits with Fund
Information as of October 31, 1998
and 1997 14 - 15
Exhibit II - Master Trust Statement of Changes in
Net Assets Available for Benefits with
Fund Information for the years ended
October 31, 1998 and 1997 16 - 17
Exhibit III - Notes to the Master Trust Financial
Statements 18 - 19
Consent of Independent Accountants 20
* 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
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, 1998 and 1997, 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 Schedule I is presented for purposes of additional analysis and
is not a required part of the basic financial statements but is additional
information required by the 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.
Schedule I 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.
May 19, 1999
<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, 1998
(Dollars in Thousands)
W-L W-L
Company Colleague Fixed Small-Cap
Stock Stock Loan S&P 500 Income International Balanced Value
Fund Fund Fund Fund Fund Fund Fund Fund Total
------- --------- ------- ------ --------- ------------ -------- -------- -------
Assets:
Investment in Warner-
Lambert Master Trust,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
at fair value $ 10,925 $ 16,449 $ - $ 1,993 $ 2,111 $ 170 $ 223 $ 191 $ 32,062
Participant loans - - 782 - - - - - 782
Receivables:
Participant contributions - 26 - 1 6 - - - 33
Company contributions 6 - - - - - - - 6
-------- -------- ------- ------- -------- ---------- -------- ------- --------
Net assets available for
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
benefits $ 10,931 $ 16,475 $ 782 $ 1,994 $ 2,117 $ 170 $ 223 $ 191 $ 32,883
======== ======== ======= ======= ======== ========== ======== ======= ========
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, 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-
Lambert Master Trust, at
<S> <C> <C> <C> <C> <C> <C> <C> <C>
fair value $ 5,812 $ 8,239 $ 1,693 $ 2,416 $ 146 $ 157 $ 210 $18,673
Participant loans 114 177 33 143 3 - - 470
-------- -------- ------- -------- ------------- -------- ------- -------
Net assets available for
<S> <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 CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1998
(Dollars in Thousands)
W-L Co. W-L Colleague Fixed Int'l Small-Cap
Stock Stock Loan S&P 500 Income Stock Balanced Value
Fund 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> <C>
Warner-Lambert Master Trust $ 4,984 $ 6,976 $ - $ 477 $ 139 $ 25 $ 27 $ (20) $12,608
Investment income from
participant loans 16 29 - 2 3 - - - 50
Contributions:
Participant - 2,201 - 288 403 57 64 59 3,072
Company 873 - - - 20 - - - 893
Loan repayments 98 173 (326) 22 27 1 3 2 -
------- -------- ------- ------- -------- -------- -------- ------- -------
Total additions 5,971 9,379 (326) 789 592 83 94 41 16,623
------- -------- ------- ------- -------- -------- -------- ------- -------
Distributions from net assets attributable to:
Distributions to participants (600) (1,345) (30) (339) (411) (31) (16) (15) (2,787)
Loan issuances (247) (320) 668 (32) (63) - (4) (2) -
Administrative expenses (5) (63) - (7) (17) (1) (2) (1) (96)
Interfund transfers (114) 408 470 (143) (543) (30) (6) (42) -
------- -------- ------- ------- -------- ------- -------- ------- -------
Total deductions (966) (1,320) 1,108 (521) (1,034) (62) (28) (60) (2,883)
------- -------- ------- ------- -------- -------- -------- ------- -------
Increase(decrease) in net
assets during the year 5,005 8,059 782 268 (442) 21 66 (19) 13,740
Net assets available for benefits:
Beginning of period 5,926 8,416 - 1,726 2,559 149 157 210 19,143
------- -------- ------- ------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
End of period $ 10,931 $ 16,475 $ 782 $ 1,994 $ 2,117 $ 170 $ 223 $ 191 $32,883
======== ======== ======= ======= ======== ======== ======== ======== =======
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 from
participant loans 6 17 4 4 1 - - 32
Contributions:
Participant - 1,276 236 469 65 67 66 2,179
Company 352 1 - 2 - - - 355
------- -------- ------- ------ --------- -------- ------- --------
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
------- -------- ------- ------ --------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
FOR COLLEAGUES IN PUERTO RICO
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands)
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 Warner-Lambert Company Stock Fund into 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, East Asia, 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 1998 and 1997 were $24 and $15,
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 Warner-Lambert 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.
Participant loans are presented at cost, which approximates fair
value. For administrative purposes a loan fund has been created.
Benefit Payments
Upon retirement, total disability, or death, participants may elect
to have account balances paid as a lump sum payment or in annual
installments, or they can purchase an annuity contract. If
employment is terminated for any other reason, participants can
elect to have a lump-sum payment of participant account balances in
the Warner-Lambert Company Stock Fund if vested, and all other
savings investment funds.
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, 1998 and 1997, the Plan has a 1.6% and 1.4%
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,
1998 and 1997 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
SCHEDULE I
Warner-Lambert
Savings and Stock Plan
for Colleagues in Puerto Rico
Schedule of Assets
Held for Investment Purposes
at December 31, 1998
(Dollars in Thousands)
Current
Cost Value
-------- -----------
Investment in Warner-Lambert Master
Trust $12,851 $ 32,101
Participant loans - 782
(Interest rate 6.0% - 10.0%) ------- --------
(Maturity dates 1/1/1999 - 12/31/2003) $12,851 $ 32,883
======= =======
SIGNATURE
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 3, 1999 By: /s/ Ernest J. Larini
--------------------------
Ernest J. Larini
Chairman
Warner-Lambert Investment
Committee
EXHIBIT I
1 of 2
<TABLE>
WARNER-LAMBERT COMPANY
MASTER TRUST
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS WITH FUND INFORMATION
AS OF OCTOBER 31, 1998
(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
------- -------- ------- ------ ------------ --------- -------- ---------
Investments at fair value:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Warner-Lambert Common Stock $978,159 $641,202 $ - $ - $ - $ - $ - $1,619,361
Equity Funds - - 138,238 - 104,183 42,962 5,038 290,421
Short-term investments - - - 45,653 - - - 45,653
Investments at contract value:
Group annuity contracts - - - 39,334 - - - 39,334
Investment contracts - - - 76,807 - - - 76,807
-------- -------- -------- -------- ---------- -------- ------- ----------
Net assets available for
<S> <C> <C> <C> <C> <C> <C> <C> <C>
benefits $978,159 $641,202 $138,238 $161,794 $ 104,183 $ 42,962 $ 5,038 $2,071,576
======== ======== ======== ======== ========== ======== ======== ==========
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, 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
------- --------- ------- ------ ---------- --------- --------- ---------
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 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, 1998
(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:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income $ 63 $ 620 $ 133 $ 167 $ 118 $ 49 $ 2 $ 1,152
Dividend income 7,952 4,949 - 8,728 6,424 1,727 255 30,035
Realized gain(loss) on
securities sold 78,878 54,425 13,900 - 4,237 1,745 (17) 153,168
Unrealized appreciation
(depreciation) 318,252 201,058 12,704 - (13,089) 433 (299) 519,059
Contributions:
Participant - 27,064 7,013 6,024 12,407 4,328 296 57,132
Company 19,234 7 6 - 13 1 - 19,261
Loan repayments 417 4,693 1,016 1,304 853 347 15 8,645
-------- -------- ------- ------ --------- -------- ------- ---------
Total additions 424,796 292,816 34,772 16,223 10,963 8,630 252 788,452
-------- -------- ------- ------ --------- -------- ------- ---------
Deductions from net assets attributable to:
Distributions to participants (57,022) (27,867) (11,896) (20,400) (7,962) (4,628) (382) (130,157)
Loan issuances (668) (6,264) (1,068) (1,492) (676) (359) (18) (10,545)
Administrative expenses (21) (475) (120) (169) (109) (56) (3) (953)
Interfund transfers (32,131) 8,554 (7,337) 23,302 (1,250) 5,243 3,619 -
-------- -------- ------- ------- --------- -------- ------- --------
Total deductions (89,842) (26,052) (20,421) 1,241 (9,997) 200 3,216 (141,655)
-------- -------- ------- ------- --------- -------- ------- --------
Increase in net assets during
the year 334,954 266,764 14,351 17,464 966 8,830 3,468 646,797
Net assets available for benefits:
Beginning of period 643,205 374,438 123,887 144,330 103,217 34,132 1,570 1,424,779
-------- -------- ------- ------- --------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
End of period $978,159 $ 641,202 $138,238 $161,794 $ 104,183 $ 42,962 $ 5,038 $2,071,576
======== ========= ======== ======== ========= ======== ======= ==========
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, 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:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
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)
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
-------- -------- ------- ------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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>
Exhibit III
WARNER-LAMBERT COMPANY
MASTER TRUST
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
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 traded on a national exchange are valued based upon the last
published quotations for the last business day of the year. Short-term
investments are valued at cost which approximates 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 12/31/98 and 12/31/97 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,
1998 1998 1997
---------- -----------
Warner-Lambert Company Common Stock $1,619,361 $1,017,643
S&P 500 Fund 138,238 123,887
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.
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 (Nos. 33-12209
and 33-49244) of Warner-Lambert Company of our report dated May 19, 1999
appearing on page 2 of this Form 11-K.
PRICEWATERHOUSECOOPERS LLP
Florham Park, New Jersey
June 3, 1999
