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, 1994
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, 1994 AND
DECEMBER 31, 1993
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
INDEX TO FINANCIAL STATEMENTS
Page(s)
FINANCIAL STATEMENTS:
Report of Independent Accountants 1
Statement of Net Assets Available for Plan
Benefits with Fund Information as of
December 31, 1994 2
Statement of Net Assets Available for Plan
Benefits with Fund Information as of
December 31, 1993 3
Statement of Changes in Net Assets Available
for Plan Benefits with Fund Information
for the year ended December 31, 1994 4
Statement of Changes in Net Assets Available
for Plan Benefits with Fund Information
for the year ended December 31, 1993 5
Notes to Financial Statements 6 - 9
Exhibit I - Master Trust Statement of Net
Assets Available for Plan Benefits
with Fund Information as of
October 31, 1994 and 1993
Exhibit II - Master Trust Statement of Changes
in Net Assets Available for Plan
Benefits with Fund Information
for the years ended October 31,
1994 and 1993
Exhibit III - Notes to the Master Trust Financial
Statements
ADDITIONAL INFORMATION:
Schedule I* - Schedule of Assets Held for Investment at October
31, 1994
Schedule II* - Schedule of transactions involving an amount in
excess of 5% of the fair value of plan assets
* 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
June 20, 1995
To the Participants and Administrator of
the Warner-Lambert Savings and Stock Plan
In our opinion, the financial statements listed in the
accompanying index present fairly, in all material respects, the
net assets available for plan benefits of the Warner-Lambert
Savings and Stock Plan at December 31, 1994 and 1993, and the
changes in net assets available for plan benefits for the years
then ended in conformity with generally accepted accounting
principles. These financial statements are the responsibility
of the Plan's administrator; 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 the administrator, 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 is
presented for purposes of additional analysis and is not a
required part of the basic financial statements but is
additional information required by ERISA. The Fund Information
in the statement of net assets available for plan benefits and
the statement of changes in net assets available for plan
benefits is presented for purposes of additional analysis rather
than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund.
Schedules I and II and the Fund Information have been subjected
to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in
all material respects in relation to the basic financial
statements taken as a whole.
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
STATEMENT OF NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1994
(Dollars in thousands)
W-L W-L
Company Employee Fixed Small-Cap
Stock Stock S&P 500 Income International Balanced Value Combined
Fund Fund Fund Fund Fund Fund Fund Funds
------- -------- ------- ------ ------------- -------- ------- --------
Assets:
Investments in Warner-
Lambert Master Trust,
at market value
(cost $402,769) $186,647 $ 72,571 $ 60,936 $153,736 $ 20,708 $ 14,245 $17,203 $526,046
Participant loans
receivable 379 2,445 2,233 5,657 0 0 0 10,714
-------- -------- -------- -------- -------- -------- ------- --------
Net assets available
for plan benefits $187,026 $ 75,016 $ 63,169 $159,393 $ 20,708 $ 14,245 $17,203 $536,760
======== ======== ======== ======== ======== ======== ======= ========
The accompanying notes are an integral part
of the financial statements.
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
STATEMENT OF NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1993
(Dollars in thousands)
W-L W-L
Company Employee Fixed Small-Cap
Stock Stock S&P 500 Income International Balanced Value Combined
Fund Fund Fund Fund Fund Fund Fund Funds
------- -------- ------- ------ ------------- -------- ------- --------
Assets:
Investments in Warner-
Lambert Master Trust,
at market value
(cost $360,101) $172,429 $ 68,801 $ 63,176 $143,313 $ 9,413 $ 7,471 $ 8,611 $473,214
Participant loans
receivable 73 2,125 1,659 4,279 10 35 - 8,181
-------- -------- -------- -------- -------- -------- ------- --------
Net assets available
for plan benefits $172,502 $ 70,926 $ 64,835 $147,592 $ 9,423 $ 7,506 $ 8,611 $481,395
======== ======== ======== ======== ======== ======== ======= ========
The accompanying notes are an integral part
of the financial statements.
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
(Dollars in thousands)
W-L W-L
Company Employee Fixed Inter- Small-Cap
Stock Stock S&P 500 Income national Balanced Value Combined
Fund Fund Fund Fund Fund Fund Fund Funds
------- -------- ------- ------ --------- -------- ------- --------
Interest in increase in
net assets from
investment activities
in the Warner-Lambert
Master Trust, including
$582 of interest income
on participant loans $ 29,247 $ 11,385 $ 879 $ 9,258 $ (292) $ (184) $ (227) $ 50,066
Contributions
Participant - 11,098 6,293 10,019 3,331 2,198 2,812 35,751
Company 7,696 - - - - - - 7,696
------- -------- ------- ------- ------ ------- ------- --------
Total contributions 7,696 11,098 6,293 10,019 3,331 2,198 2,812 43,447
Distributions to
participants 11,659 5,086 4,424 14,738 571 598 383 37,459
Administrative expenses 9 217 116 276 28 20 23 689
Interfund transfers (10,751) (13,090) (4,298) 7,538 8,845 5,343 6,413 0
------- -------- ------- ------- ------ ------- ------- --------
Increase/(decrease) in
net assets during the
year 14,524 4,090 (1,666) 11,801 11,285 6,739 8,592 55,365
Net assets available for
plan benefits
Beginning of period 172,502 70,926 64,835 147,592 9,423 7,506 8,611 481,395
-------- -------- ------- ------- ------- ------ ------- --------
<c >
End of period $187,026 $ 75,016 $63,169 $159,393 $20,708 $14,245 $17,203 $536,760
======== ======== ======= ======== ======= ======= ======= ========
The accompanying notes are an integral part
of the financial statements.
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars in thousands)
W-L W-L
Company Employee Fixed Small-Cap
Stock Stock S&P 500 Income International Balanced Value Combined
Fund Fund Fund Fund Fund Fund Fund Funds
------- -------- ------- ------ ------------- -------- ------- --------
Interest in increase in
net assets from
investment activities
in the Warner-Lambert
Master Trust, including
$291 of interest income
on participant loans $ 3,744 $ (409)$ 6,190 $11,241 $ 552 $ 132 $ 274 $ 21,724
Contributions
Participant - 12,582 6,220 10,286 136 108 123 29,455
Company 13,695 - - - - - - 13,695
------- -------- ------- ------- ---------- ------- ------- --------
Total contributions 13,695 12,582 6,220 10,286 136 108 123 43,150
Distributions to
participants 21,483 6,931 5,040 20,294 5 5 8 53,766
Administrative expenses 248 208 174 290 3 2 2 927
Interfund transfers 5,270 11,840 433 6,697 (8,743) (7,273) (8,224) 0
------- -------- ------- ------- ---------- ------- ------- --------
Increase/(decrease) in
net assets during the
year (9,562) (6,806) 6,763 (5,754) 9,423 7,506 8,611 10,181
Net assets available for
plan benefits
Beginning of period 182,064 77,732 58,072 153,346 0 0 0 471,214
-------- -------- ------- ------- ---------- ------- ------- --------
End of period $172,502 $ 70,926 $64,835 $147,592 $ 9,423 $ 7,506 $ 8,611 $481,395
======== ======== ======= ======= ========== ======= ======= ========
The accompanying notes are an integral part
of the financial statements.
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 are maintained in the Warner-Lambert
Company Master Trust (the "Master Trust") on a commingled basis
with the assets of the Puerto Rico Plan. These assets have been
commingled for investment purposes. Employer contributions and
benefit payments are identified with each participating plan
whereas earnings and expenses were allocated proportionately to
the plans by the trustee on a basis equivalent to the
proportionate units of participation. The Master Trust has an
October 31 year end.
During 1993, T. Rowe Price Associates, Inc. replaced State Street
Bank and Trust Company of Boston as trustee, recordkeeper and
investment manager. Effective with the change in trustee,
earnings and expenses are now recorded directly to the
participant accounts rather than on an allocation basis.
Valuation of Investments
Investments are presented on a current value basis, with the
exception of group annuity and investment contracts. These
contracts are valued at contract value representing contributions
made under the contracts, plus interest at the contract rate,
less funds withdrawn. Investments in securities traded on a
national exchange are valued based upon the last published
quotations for the last business day of the year.
Investment Income
Dividend and interest income is recorded by the trustee as
earned. Realized gains and losses from the sale of securities
are accounted for as of the trade date. In calculating such
amounts, the cost of investments sold was determined on the basis
of the moving average acquisition cost by the trustee.
Expenses
All expenses incurred in the administration of the Plan,
including audit fees, recordkeeping expenses and all other costs
incurred in the administration of the Plan and Master Trust are
borne by the Plan. In addition, administrative expenses of the
trustee, brokerage commissions, transfer taxes and all other
charges incurred in connection with the purchase and sale of
securities are also absorbed by the Plan.
NOTE 2 - DESCRIPTION OF THE PLAN:
The Plan is a defined contribution profit-sharing-savings plan
covering employees of the Company and its domestic affiliates and
subsidiary companies who meet certain eligibility and
participation requirements. The following brief description of
the Plan is provided for general information purposes only.
Participants should refer to the Plan agreement for more complete
information. The Plan is comprised of seven investment funds as
follows:
WARNER-LAMBERT COMPANY STOCK FUND - Employer contributions are
invested in Warner-Lambert Common Stock.
WARNER-LAMBERT EMPLOYEE STOCK FUND - Employee contributions are
invested in Warner-Lambert Common Stock. Prior to January 1,
1994, contributions were invested at a 10% discount with the
remaining 10% contributed by the Company into the Warner-Lambert
Company Stock fund. Effective January 1, 1994, the discount has
been eliminated.
S&P 500 FUND - Employee contributions may be invested in
substantially all stocks comprising the Standard & Poor's 500
Stock Index.
FIXED INCOME FUND - Employee contributions may be invested in
investments such as contracts with insurance companies, bonds,
preferred stocks, or certificates of deposit.
INTERNATIONAL STOCK FUND - Employee contributions are invested in
the common stocks of large, established non-U.S. companies
outside of the United States.
BALANCED FUND - Employee contributions are invested in a
diversified mix of approximately 60% stocks and 40% bonds.
SMALL-CAP VALUE FUND - Employee contributions are invested in
primarily common stocks of small companies which are believed to
be undervalued at the time of purchase and to have potential for
capital appreciation.
Participants may elect to contribute into the Plan from a minimum
of 1% up to a maximum of 15% of their basic earnings (as defined
by the Plan) each year. Participants have the option of
contributing on a before-tax basis, an after-tax basis, or a
combination of both methods. Effective January 1, 1994, the
Company contributes for each participant an amount equal to 35%
(25% in 1993) and 25% of such participant's pre-tax and after-tax
contributions, respectively, limited to those participant
contributions less than or equal to 6% of the participant's basic
earnings. Based upon the vesting requirements of the Plan,
additional lump-sum matching contributions are recorded each year
of 25% to 75% of such participants' contributions, up to 6% of
base earnings, based upon growth in the Company's earnings-per-
share versus the prior year. All Company contributions are
invested in the Warner-Lambert Company Stock Fund. Participants
can elect to have their contributions invested in any of the
funds noted above 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.
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. 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
and have not been significant.
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. Any loan 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. Only one loan may be taken per year and only
two loans will be permitted to be outstanding for a participant
at any time. Participants may borrow from both the before-tax
account balance and the vested account balance in the Company
Stock Fund.
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 Company Board of Directors, the balance in
accumulated investments credited to each participant shall be
distributed to the participant.
NOTE 3 - FEDERAL INCOME TAX STATUS:
The Internal Revenue Service ("IRS") issued a favorable
determination letter to the Plan, dated April 1, 1986, indicating
that the Plan documentation as reviewed by the IRS satisfied the
requirements of Section 401(a) of the Internal Revenue Code. An
IRS determination letter has not yet been obtained for certain
amendments, however, the Plan Administrator and management
believe a favorable determination will be received. Accordingly,
the earnings of the Plan are exempt from taxation and 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, 1994, the Plan has a 98.7% interest in the Master
Trust. The financial statements for the Master Trust are
prepared on the modified cash basis. The financial statements
for the year ended October 31, 1994 follow.
The Plan's financial statements have been adjusted for November
and December activity. All adjustments necessary to reflect the
Plan's financial statements on an accrual basis have been
recorded.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Warner-Lambert Investment Committee has duly caused
this annual report to be signed by the undersigned thereunto duly
authorized.
WARNER-LAMBERT SAVINGS
AND STOCK PLAN
Date: June 27, 1995 By: /s/ Ernest J. Larini
Ernest J. Larini
Chairman
Warner-Lambert Investment
Committee
EXHIBIT INDEX
Exhibit I - Master Trust Statements of Net Assets
Available for Plan Benefits with Fund
Information as of October 31, 1994 and 1993
Exhibit II - Master Trust Statements of Changes in
Net Assets Available for Plan Benefits with
Fund Information for the years ended October 31,
1994 and 1993
Exhibit III - Notes to the Master Trust Financial
Statements
Schedule I Schedule of Assets Held for Investment at
October 31, 1994
Schedule II Schedule of party-in-interest transactions
and transactions involving an amount in
excess of 5% of the fair value of plan
assets
Consent of Independent Accountants
EXHIBIT I
1 of 2
WARNER-LAMBERT COMPANY
MASTER TRUST
SAVINGS AND STOCK PLAN
STATEMENT OF NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF OCTOBER 31, 1994
(Dollars in thousands)
W-L W-L
Company Employee Fixed Small-Cap
Stock Stock S&P 500 Income International Balanced Value Combined
Fund Fund Fund Fund Fund Fund Fund Funds
------- -------- ------- ------ ------------- -------- -------- --------
Assets:
Investments in Warner-
Lambert Common Stock,
3,389,439 shares
(cost $132,615) $186,218 $ 72,233 $ - $ - $ - $ - $ - $258,451
Beneficial interest in
group annuity contracts
(cost equals market) - - - 60,821 - - - 60,821
Beneficial interest in
investment contracts
(cost equals market) - - - 83,983 - - - 83,983
Equity Funds (cost - - 62,754 - 21,235 14,314 17,138 115,441
$111,083)
Short-term investments
(cost equals market) - - - 10,377 - - - 10,377
-------- -------- ------- ------- ---------- ------- -------- --------
Total Investments 186,218 72,233 62,754 155,181 21,235 14,314 17,138 529,073
Assets available for plan
benefits 186,218 72,233 62,754 155,181 21,235 14,314 17,138 529,073
Liabilities:
Accrued Administrative - 6 5 12 2 1 1 27
Expenses -------- -------- ------- ------- ---------- ------- -------- --------
Net assets available for
plan benefits $186,218 $ 72,227 $62,749 $155,169$ 21,233 $14,313 $ 17,137 $529,046
======== ======== ======= ======= ========== ======= ======== ========
The accompanying notes are an integral part
of the financial statements.
EXHIBIT I
2 of 2
WARNER-LAMBERT COMPANY
MASTER TRUST
STATEMENT OF NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
AS OF OCTOBER 31, 1993
(Dollars in thousands)
W-L W-L
Company Employee Fixed
Stock Stock S&P 500 Income Combined
Fund Fund Fund Fund Funds
------- -------- ------- ------ --------
Assets:
Investments, at market
value:
Warner-Lambert Common
Stock, 3,717,542
shares (cost $133,087) $183,267 $ 75,102 $ - $ - $ 258,369
Beneficial interest
in group annuity
contracts (cost
equals market) - - - 106,256 106,256
Equity securities
(cost $69,957) - - 70,873 - 70,873
Short-term investments
(cost equals market) - - - 42,652 42,652
-------- -------- -------- -------- --------
Total Investments 183,267 75,102 70,873 148,908 478,150
Interest receivable - 23 6 12 41
-------- -------- -------- -------- -------
Assets available
for plan benefits $183,267 $ 75,125 $ 70,879 $148,920 $478,191
Liabilities:
Accrued administrative
expenses - 27 26 54 107
-------- -------- -------- -------- --------
Net assets available
for plan benefits $183,267 $ 75,098 $ 70,853 $148,866 $478,084
======== ======== ======== ======== ========
The accompanying notes are an integral part
of the financial statements.
EXHIBIT II
1 of 2
WARNER-LAMBERT COMPANY
MASTER TRUST
SAVINGS AND STOCK PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1994
(Dollars in thousands)
W-L W-L
Company Employee Fixed Small-Cap
Stock Stock S&P 500 Income International Balanced Value Combined
Fund Fund Fund Fund Fund Fund Fund Funds
-------- -------- ------- ------ ------------- -------- ------- --------
Income from investments:
Interest income $ 13 $ 215 $ 79 $ 152 $ 40 $ 25 $ 29 $ 553
Dividend income 6,121 2,449 0 9,160 198 408 223 18,559
Net realized gain on
securities sold 16,598 5,214 286 0 77 (40) 2 22,137
Changes in unrealized
appreciation
(depreciation) (341) 888 1,997 0 1,221 (195) 325 3,895
-------- ------- ------- ------ ----------- ------- ------ -------
Increase in net assets
from investment
activities 22,391 8,766 2,362 9,312 1,536 198 579 45,144
Contributions:
Participant 74 16,470 7,837 13,075 3,212 2,181 2,702 45,551
Company 8,718 - - - - - - 8,718
-------- ------- ------- ------ ----------- ------- ------ -------
Total contributions 8,792 16,470 7,837 13,075 3,212 2,181 2,702 54,269
Distributions to
participants 12,672 8,429 5,991 18,254 883 777 639 47,645
Administrative expenses 21 271 125 321 27 19 22 806
Interfund transfers 15,539 19,407 12,187 (2,491) (17,395) (12,730)(14,517) 0
-------- ------- ------- ------ ----------- ------- ------ -------
Increase/(decrease) in
net assets during
the year 2,951 (2,871) (8,104) 6,303 21,233 14,313 17,137 50,962
Net assets available for
plan benefits
Beginning of period 183,267 75,098 70,853 148,866 0 0 0 478,084
-------- ------- ------- ------ ----------- ------- ------ --------
End of period $186,218 $72,227 $62,749 $155,169 $ 21,233 $14,313 $17,137 $529,046
======== ======= ======= ====== =========== ======= ======= ========
The accompanying notes are an integral part
of the financial statements.
EXHIBIT II
2 of 2
WARNER-LAMBERT COMPANY
MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR PLAN BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1993
(Dollars in thousands)
W-L W-L
Company Employee Fixed
Stock Stock S&P 500 Income Combined
Fund Fund Fund Fund Funds
-------- -------- ------- -------- --------
Income from investments:
Interest income $ 25 $ 46 $ 22 $ 8,605 $ 8,698
Dividend income 5,709 2,543 1,509 1,954 11,715
Net realized gain on
securities sold 8,415 2,927 18,870 2,018 32,230
Changes in unrealized
(depreciation) (4,498) (3,696) (11,776) (930) (20,900)
-------- -------- -------- -------- ---------
Increase in net assets
from investment
activities 9,651 1,820 8,625 11,647 31,743
Contributions:
Participant - 15,665 6,679 11,921 34,265
Company 17,843 - - - 17,843
-------- -------- -------- -------- --------
Total contributions 17,843 15,665 6,679 11,921 52,108
Distributions to
participants 22,688 9,156 6,499 23,089 61,432
Administrative expenses 315 181 184 300 980
Interfund transfers 0 14,637 (6,702) (7,935) 0
-------- -------- -------- ------- --------
Increase/(decrease) in
net assets during
the year 4,491 (6,489) 15,323 8,114 21,439
Net assets available for
plan benefits:
Beginning of period 178,776 81,587 55,530 140,752 456,645
-------- -------- -------- -------- --------
End of period $183,267 $ 75,098 $ 70,853 $148,866 $478,084
======== ======== ======== ======== ========
The accompanying notes are an integral part
of the financial statements.
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 ("Puerto Rico Plan")
(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.
During 1993, T. Rowe Price Associates, Inc. replaced State Street
Bank and Trust Company of Boston as the trustee. Effective with
the change in trustee, realized gains and losses and changes in
net unrealized appreciation or depreciation on investments are
now recorded directly to the participant accounts rather than on
an allocation basis.
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. Other government securities and short-
term investments are valued at market value. The 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. Mutual shares of pooled
investment funds are valued at cost which is equal to market
value.
Investment Income
Dividend and interest income are recorded by the trustee as
earned. Realized gains and losses from the sale of securities
are accounted for as of the trade date. In calculating such
amounts, the cost of investments sold is determined on a basis of
the moving average acquisition cost.
ERISA requires the Company to report investment transactions on a
current value basis of accounting versus a historical basis of
moving average cost which is utilized for the financial
statements under generally accepted accounting principles.
Expenses
All expenses incurred in the administration of the Master Trust
and the related Plans, including audit fees, recordkeeping
expenses, administrative expenses of the Trustee, brokerage
commissions, transfer taxes and other charges incurred in
connection with the purchase and sale of securities are borne by
the Master Trust and are paid out of the fund to which such
charges relate.
Recently Issued Financial Accounting Standards
The American Institute of Certified Public Accountants has issued
SOP94-4 "Reporting of Investment Contracts Held by Health and
Welfare Benefit Plans and Defined Contribution Pension Plans".
This statement requires that the plans outlined above report
fully benefit-responsive investment contracts at contract value
and all other investment contracts at fair value. This
requirement will be effective for the 1995 plan year. Management
does not believe that adopting this new accounting standard will
have a significant impact on the plan.
NOTE 2 - FEDERAL INCOME TAX STATUS:
Participating plans in the Master Trust are intended to be
qualified plans under Section 401(a) of the Internal Revenue
Code, and the Master Trust established thereunder is entitled to
exemption from federal income tax under the provisions of Section
501(a) of the Code. Accordingly, no provision for federal income
tax has been made.
Schedule I
Warner-Lambert Company
Master Trust
Schedule of Assets Held for Investment
October 31, 1994
(Dollars in thousands)
Units or Fair Value
Face Value Description Amount Percent Cost
3,389,439 Warner-Lambert Company $258,451 48.8% $132,615
9,593,178 T. Rowe Price Equity Funds 115,441 21.8 111,083
Beneficial Interest in
Group Annuity Contracts:
Life Insurance Company of Virginia
annuity contract GS-2755 (5.6% minimum
annual effective rate) guaranteed
through 12/17/98 $4,171 0.8% $4,171
Lincoln National Pension Co. annuity
contract GA-9672 (7.35% minimum annual
effective rate) guaranteed through
5/27/99 2,549 0.5 2,549
Metropolitan Life Insurance Co. annuity
contract GAC-12456-069, principal and
interest (8.03% minimum annual effective
rate) guaranteed through 5/31/96 30,318 5.7 30,318
New York Life Insurance Co. annuity
contract GA-06948-001 (7.3% minimum
annual effective rate) guaranteed
through 8/17/98 10,332 2.0 10,332
New York Life Insurance Co. annuity
contract GA-06948-002 (7.41% minimum
annual effective rate) guaranteed
through 9/17/99 2,548 0.5 2,548
Peoples Security annuity contract
BDA00461FR (7.73% minimum annual effective
rate) guaranteed through 5/17/99 2,008 0.4 2,008
Security Life of Denver Insurance Co.
annuity contract FA-0272, principal and
interest (5.7% minimum annual effective
rate) guaranteed through 6/16/00 4,762 0.9 4,762
Sun Life Insurance Company of America
annuity contract 4376 (6.8% minimum
annual effective rate) guaranteed
through 6/17/97 4,133 0.8 4,133
-------- --------
TOTAL $ 60,821 $ 60,821
Schedule I
Warner-Lambert Company
Master Trust
Schedule of Assets Held for Investment
October 31, 1994
(Dollars in thousands)
Units or Fair Value
Face Value Description Amount Percent Cost
Beneficial Interest in
Investment Contracts:
Bankers Trust Co. investment contract
93-644, principal and interest (4.85%
annual effective rate at 10/31/94)
maturing on 3/31/98 $26,263 5.0% $26,263
Peoples Security investment contract
BDA00054TR (6.11% annual effective
rate at 10/31/94) 31,962 6.0 31,962
Provident Life and Accident Insurance
Co. investment contract 630-05699
(7.44% annual effective rate at
10/31/94) maturing on 3/31/00 25,758 4.9 25,758
--------- --------
TOTAL $ 83,983 $ 83,983
OTHER $ 10,377 2.0% $ 10,377
--------- --------
TOTAL INVESTMENT $529,073 $398,879
========= ========
Schedule II
-----------
WARNER-LAMBERT
SAVINGS AND STOCK PLAN
SCHEDULE OF TRANSACTIONS INVOLVING AN AMOUNT IN EXCESS OF 5%
OF THE FAIR VALUE OF PLAN ASSETS FOR THE
TWELVE MONTHS ENDED OCTOBER 31, 1994
(Dollars in thousands)
Current
Value on
Party Description Number of Number of Purchase Selling Cost Transaction Net Gain
Involved of Asset Transactions Shares Price Price of Asset Date (loss)
T. Rowe Warner-Lambert 853 539,461 $37,760
Price Common Stock 853 867,563 $ 60,043 $ 32,432 $ 60,043 $ 27,611
T. Rowe S&P 500 Mutual Fund 386 1,379,338 14,951
Price 386 2,340,887 25,384 25,097 25,384 287
T. Rowe ISF Mutual Fund 310 1,910,244 23,101
Price 310 260,974 3,222 3,145 3,222 77
T. Rowe Bankers Trust Co. investment
Price contract 93-644, principal
and interest (4.85% annual
effective rate at 10/31/94)
maturing on 3/31/98 1 25,000
T. Rowe Peoples Security investment
Price contract BDA00054TR (6.11%
annual effective rate at
10/31/94) various maturity
dates 1 30,623
T. Rowe Provident Life and Accident
Price Insurance Co. investment
contract 630-05699 (7.44%
annual effective rate at
10/31/94) maturing on 3/31/00 1 25,000
T. Rowe Peoples Security Annuity
Price Contract BDA00043TR (5.6%
minimum annual effective
rate) guaranteed through
1/1/94 1 30,623 30,000 30,623 623
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 June 20, 1995 appearing
in the Annual Report of Warner-Lambert Company Savings and Stock Plan, which is
incorporated in this annual report on Form 11-K.
PRICE WATERHOUSE LLP
4 Headquarters Plaza North
Morristown, New Jersey 07962
June 28, 1995