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
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, 1998 AND
DECEMBER 31, 199
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
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
for Benefits with Fund Information
for the year ended December 31, 1997 6
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
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, 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
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 Combined Combined Combined
Stock Stock Loan S&P 500 Income Growth One-Step Income
Fund Fund Fund Fund Fund Funds Mix Funds Funds Total
------- -------- ---- ------- ------ ----------- --------- -------- ---------
Assets:
Investment in Warner-
<S> <C> <c <C> <C> <C> <C> <C> <C> <C>
Lambert Master Trust, $914,366 $595,190 - $153,936 $159,393 $120,495 $ 47,100 $5,626 $1,996,106
at fair value
Participant loans - - 14,930 - - - - - 14,930
Receivables:
Participant contributions - 434 - 12 35 7 5 - 493
Employer contributions 25 - - - - - - - 25
-------- -------- ------ -------- -------- -------- -------- ------- ---------
Net assets available
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
for benefits $914,391 $595,624 $14,930 $153,948 $159,428 $120,502 $ 47,105 $ 5,626 $2,011,554
======== ======== ======= ======== ======== ======== ======== ======= ==========
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, 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
at fair value
Participant loans 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 CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
(Dollars in Thousands)
W-L W-L
Company Colleague Fixed Combined Combined Combined
Stock Stock Loan S&P 500 Income Growth One-Step Income
Fund 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 $446,522 $277,495 $ - $35,252 $ 8,707 $ 4,939 $ 5,892 $ 109 $ 778,916
Investment income from
participant loans 50 610 - 130 160 111 50 5 1,116
Contributions:
Participant - 26,299 - 6,869 5,563 12,192 4,318 329 55,570
Company 18,484 7 - 6 88 13 1 - 18,599
Loan repayments 346 4,619 (8,482) 1,035 1,227 844 393 18 -
------- ------- ------- ------ ------- -------- ------ -------- --------
Total additions 465,402 309,030 (8,482) 43,292 15,745 18,099 10,654 461 854,201
------- ------- ------- ------ ------- -------- ------- -------- --------
Deductions from net assets attributable to:
Distributions to participants (61,861) (31,657) (1,719) (11,817) (23,555) (7,565) (4,839) (368) (143,381)
Loan issuances (439) (6,389) 10,333 (1,003) (1,385) (714) (384) (19) -
Administrative expenses (11) (375) - (97) (123) (92) (50) (2) (750)
Interfund transfers (36,743) (8,519) 14,798 (7,398) 23,851 4,835 5,336 3,840 -
------- -------- ------- ------- ------- -------- ------- ------- --------
Total deductions (99,054) (46,940) 23,412 (20,315) (1,212) (3,536) 63 3,451 (144,131)
------- -------- ------- ------- ------- -------- ------- ------- --------
Increase(decrease) in net
assets during the year 366,348 262,090 14,930 22,977 14,533 14,563 10,717 3,912 710,070
Net assets available for benefits:
Beginning of period 548,043 333,534 - 130,971 144,895 105,939 36,388 1,714 1,301,484
------- -------- ------- ------- ------- -------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
End of period $914,391 $595,624 $14,930 $153,948 $159,428 $ 120,502 $47,105 $ 5,626 $2,011,554
======== ======== ======= ======== ======== ========= ======= ======= ==========
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>
Warner-Lambert Master Trust $234,776 $123,728 $33,289 $ 8,506 $ 15,236 $ 5,353 $ 118 $421,006
Investment income from
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
------- -------- ------- ------- ---------- ------- ------- --------
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>
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
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 (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 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") 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 Warner-
Lambert Company Stock Fund into other investment funds. Participants are able
to invest in the following twenty-four funds, some of which have been combined
for financial statement purposes based on their investment objectives:
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, East
Asia, 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, East Asia, 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 1998 and 1997 were $301 and $176, 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 Warner-
Lambert Company Stock Fund. 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 - 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, 1998 and 1997, the Plan has a 98.4% and 98.6% interest,
respectively, in the Master Trust. The financial statements for the Master
Trust are prepared on the modified cash basis. The financial statements for
the years ended October 31, 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 recorded
Schedule I
Warner-Lambert
Savings and Stock Plan
Schedule of Assets
Held for Investment Purposes
at December 31, 1998
(Dollars in Thousands)
Current
Cost Value
-------- -----------
Investment in Warner-Lambert Master
Trust $707,522 $1,996,624
Participant loans - 14,930
(Interest rate 6.0%-10.0%) -------- ----------
(Maturity dates 1/1/1999-12/31/2003) $707,522 $2,011,554
======== ==========
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
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 Growtn 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 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, 33-49244 and 333-78645) 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
