Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 11-K

 

 

 

x	ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2011

OR

 

¨	TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 1-4448

 

 

 

A.	Full title of the plan and the address of the plan, if different from that of the issuer named below:

Baxter International Inc. and Subsidiaries

Incentive Investment Plan

 

B.	Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Baxter International Inc.

One Baxter Parkway

Deerfield, IL 60015

(847) 948-2000

 

 

 

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Table of Contents

Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Financial Statements and Supplemental Schedule

December 31, 2011 and 2010

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Table of Contents

Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Index

December 31, 2011 and 2010

 

 

		Page(s)
Report of Independent Registered Public Accounting Firm			1
Financial Statements
Statements of Net Assets Available for Benefits as of December 31, 2011 and 2010			2
Statements of Changes in Net Assets Available for Benefits for the years ended December  31, 2011 and 2010			3
Notes to Financial Statements			4-14
Supplemental Information
Schedule H, Line 4i: Schedule of Assets (Held at End of Year) as of December 31, 2011			16-70

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Table of Contents

Report of Independent Registered Public Accounting Firm

To the Participants and Administrative Committee of

  the Baxter International Inc. and Subsidiaries Incentive Investment Plan

Deerfield, Illinois

We have audited the accompanying statements of net assets available for benefits of the Baxter International Inc. and Subsidiaries Incentive Investment Plan (“the Plan”) as of December 31, 2011 and 2010, and the related statements of changes in net assets available for benefits for the years then ended. 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 in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2011 and 2010, and the changes in net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule H, Line 4i - Schedule of Assets (Held at End of Year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic 2011 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic 2011 financial statements taken as a whole.

/s/ Crowe Horwath LLP

Oak Brook, Illinois

June 27, 2012

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Statements of Net Assets Available for Benefits

December 31, 2011 and 2010 (in thousands)

 

 

		2011				2010
Assets
Investments
Cash and cash equivalents		$	55,858			$	39,053
Common stock (including securities on loan of $1,108 in 2011 and $6,821 in 2010)			394,301				434,918
U.S. government and government agency issues (including securities on loan of $5,336 in 2011 and $4,523 in 2010)			21,865				20,064
Corporate and other obligations (including securities on loan of $7,072 in 2011 and $3,035 in 2010)			40,242				47,640
Commingled funds			335,027				359,352
Registered investment companies			214,074				185,116
Synthetic guaranteed investment contracts (including securities on loan of $214,376 in 2010)			743,892				724,396
Collateral held on loaned securities			13,782				230,444
Total investments at fair value			1,819,041				2,040,983
Receivables
Notes receivables from participants			40,514				39,926
Sponsor contributions			15,102				14,503
Accrued interest and dividends			1,869				1,901
Due from brokers for securities sold			16				875
			57,501				57,205
Total assets			1,876,542				2,098,188
Liabilities
Accounts payable			4,295				5,611
Due to brokers for securities purchased			81				—
Collateral to be paid on loaned securities			13,782				232,887
Total liabilities			18,158				238,498
Net assets available for benefits, reflecting investments at fair value			1,858,384				1,859,690
Adjustment from fair value to contract value for fully benefit-responsive investment contracts			(60,432	)			(49,603	)
Net assets available for benefits		$	1,797,952			$	1,810,087

The accompanying notes are an integral part of these financial statements.

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Statements of Changes in Net Assets Available for Benefits

For the Years Ended December 31, 2011 and 2010 (in thousands)

 

 

		2011				2010
Additions (reductions) to net assets attributed to
Investment income
Net (depreciation) appreciation in fair value of investments		$	(39,315	)		$	80,309
Interest			30,742				33,469
Dividends			12,405				10,717
Net investment income			3,832				124,495
Participant loan interest			1,811				1,999
Contributions
Sponsor			53,357				53,270
Participant			84,207				88,683
			137,564				141,953
Net additions			143,207				268,447
Deductions from net assets attributed to
Benefits paid			148,773				118,199
Plan expenses			6,569				5,610
Total deductions			155,342				123,809
Net (decrease) increase			(12,135	)			144,638
Net assets available for benefits
Beginning of year			1,810,087				1,665,449
End of year		$	1,797,952			$	1,810,087

The accompanying notes are an integral part of these financial statements.

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

1.	General Description of the Plan

The following description of the Baxter International Inc. and Subsidiaries Incentive Investment Plan (the Plan) is provided for general information purposes only. Participants should refer to the Plan document and summary plan description for more complete information. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

The Plan allows tax deferred contributions in compliance with Section 401(k) of the Internal Revenue Code. Eligible participants may make pre-tax contributions of up to 50% of their eligible annual compensation within certain limitations. Newly hired employees are deemed to have elected to contribute 3% of compensation (increased by 1% per year to a total of 6%) unless they make a contrary election. The Plan sponsor, Baxter International Inc. (Baxter or the Company), matches participant contributions up to a maximum of 3.5% of the employee’s compensation. Participant contributions and Plan sponsor matching contributions are fully vested and nonforfeitable at all times. The Company also contributes an additional non-matching 3% of compensation for employees that are not eligible to participate in the Company’s U.S. qualified defined benefit pension plan, which includes all new employees hired on or after January 1, 2007, and employees who had less than five years of service on January 1, 2007 and who elected to cease earning additional service in the pension plan and participate in the higher level of Company contributions in the Plan. The additional non-matching contribution becomes fully vested after three years of service. Forfeitures of nonvested accounts are used to reduce future employer contributions.

Participants may borrow up to the lesser of $50,000 or 50% of their vested account balance. The loans are secured by the balance in the participant’s account and bear interest at variable rates as outlined in the Plan agreement. The loans are reported at their unpaid principal balance plus any accrued but unpaid interest, with no allowance for credit losses, as repayments of principal and interest are received through payroll deductions and the notes are collateralized by the participant’s account balances.

Participants or their beneficiaries may elect lump-sum benefit payments, or benefits may be paid in installments. Shares of Baxter common stock may also be distributed in kind at the participant’s election. Subject to certain provisions specified in the Plan agreement, employed participants may withdraw their pre-tax contributions, matching contributions made prior to 2008, vested non-matching contributions and related earnings in cases of financial hardship and in certain other circumstances. In the case of a participant termination of death or disability, the entire vested amount is paid to the person or persons legally entitled thereto.

Each participant’s account is credited with the participant’s contributions and an allocation of the Company’s contributions and Plan earnings, and is charged with his or her withdrawals and an allocation of Plan-related expenses. Allocations are based on participant earnings or account balances, as defined in the Plan document. The net income of the Plan is posted to the participant’s accounts on a daily basis. Each participant directs the investment of his or her account to any of the investment options available under the Plan.

Upon enrollment in the Plan, a participant may direct contributions to any of 18 investment options: Stable Income Fund, Baxter Common Stock Fund, Composite Fund, General Equity Fund, S&P 500 Flagship Fund, International EAFE Equity Index Fund, Small Cap Fund, ten different Target Retirement Funds and the Self-Managed Fund. However, non-matching contributions may not be invested in the Baxter Common Stock Fund. In addition, certain participants may maintain shares received in connection with Baxter’s 1996 spin-off of Allegiance Corporation (Allegiance), which were subsequently converted into common shares of Cardinal Health Inc. (Cardinal) upon Cardinal’s acquisition of Allegiance in 1999. These shares are maintained in the Cardinal Health Common Stock Fund. Additionally, certain participants maintain shares in Edwards Lifesciences Corporation. These shares were placed into the Edwards Lifesciences Common Stock Fund in connection with Baxter’s 2000 spin-off of its cardiovascular business. Participants are not able to make contributions or transfer existing account balances to the Cardinal Health Common Stock Fund or the Edwards Lifesciences Common Stock Fund, but may make transfers out of these funds at any time.

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

2.	Summary of Significant Accounting Policies

Basis of Accounting

The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting. Accordingly, investment income is recognized when earned and expenses are recognized when incurred.

New Accounting Standards

In January 2010, the Financial Accounting Standards Board issued a new accounting standard effective for reporting periods beginning after December 15, 2010, which required an entity to separately present information related to purchases, sales, issuances and settlements in the reconciliation of fair value measurements classified as Level 3. The plan did not have any activity related to purchases, sales, issuances or settlements for fair value measurements classified as Level 3.

Valuation of Investments and Collateral

The fair value of Plan investments and collateral is determined as follows:

 

Cash and cash equivalents		These largely consist of a short-term investment fund and a money market fund, the fair value of which is based on the net asset value. The investment objectives for these funds are to provide safety for principal, daily liquidity and a competitive yield by investing in high quality instruments.
Common stock		Value based on closing prices on the valuation date in an active market on national securities exchanges.
U.S. government and government agency issues		Value based on reputable pricing vendors that typically use pricing matrices or models.
Corporate and other obligations		Value based on reputable pricing vendors that typically use pricing matrices or models.
Commingled funds		Value based on net asset values reported by the fund managers as of the Plan’s financial statement dates and recent transaction prices. The investment objectives of these funds are to track the performances of the S&P 500 (S&P 500 Flagship Fund); Europe, Australasia and the Far East (EAFE) (International EAFE Equity Index Fund); or Russell 2000 (Small Cap Fund) indexes. The underlying investments vary, with some holding diversified portfolios of domestic stocks and government agency bonds, and others holding collective investment funds. Each fund provides for daily redemptions by the Plan at reported net asset values per share, with no advance notice requirement. Refer to Note 6 for amounts invested in each of these funds.

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

Registered investment companies		Value based upon the closing price from a national security exchange on the valuation date.
Synthetic guaranteed investment contracts		Value based on the fair value of the underlying securities in the contract on the valuation date plus the fair value of wrapper contracts, which is calculated using a replacement cost approach. The underlying securities are valued based upon the methodologies described above. See below for more information.
Collateral held on loaned securities		Value based upon the net asset value per unit of the short-term investment funds where the collateral is invested. Refer to Note 7 for more information on the securities lending program.
Collateral to be paid on loaned securities		Value based on the fair value of the underlying securities loaned on the valuation date, plus an incremental margin.

Income Recognition

Plan investment return includes dividend and interest income, gains and losses on sales of investments and unrealized depreciation or appreciation of investments. Purchases and sales of investments are recorded on a trade date basis. Dividends are recorded on the ex-dividend date. Interest is earned on an accrual basis.

The financial statements reflect the net depreciation or appreciation in the fair value of the Plan’s investments. This net depreciation or appreciation consists of realized gains and losses calculated as the difference between proceeds from a sales transaction and cost determined on a moving average basis, and unrealized gains and losses calculated as the change in the fair value between beginning of the year (or purchase date if later) and the end of the year.

Synthetic Guaranteed Investment Contracts

The Plan holds synthetic guaranteed investment contracts (GICs) as part of the Stable Income Fund. The synthetic GICs provide for a fixed return on principal over a specified time through fully benefit-responsive contracts issued by Aegon Institutional Markets and Bank of America N.A. The portfolio of assets, overall of investment grade, underlying the synthetic GICs primarily includes cash and cash equivalents, U.S. government and government agency issues, and corporate and other obligations.

The fair value of the synthetic GICs equals the total of the fair value of the underlying assets plus the fair value of the wrapper contracts. The fair value of the wrapper contracts is computed using a replacement cost approach that incorporates a comparison of the current fee rate on similar wrapper contracts to the fee being paid by the Plan. Using this approach, the fair values of the wrapper contracts were a loss of $343,018 and a gain of $1.6 million at December 31, 2011 and 2010, respectively.

While Plan investments are presented at fair value in the Statements of Net Assets Available for Benefits, any material difference between the fair value of the Plan’s direct and indirect interests in fully benefit-responsive investment contracts and their contract value is presented as an adjustment line in the Statements of Net Assets Available for Benefits, because contract value is the relevant measurement attribute for that portion of the Plan’s net assets available for benefits. Contract value represents contributions, plus earnings, less participant withdrawals and administrative expenses. The wrapper contracts used by the Plan are fully benefit-responsive because the wrapper contract issuers are contractually obligated to make up any shortfall in the event that the underlying asset portfolio has been liquidated and is inadequate to cover participant withdrawals and transfers

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

at contract value. There are currently no reserves against contract values for credit risk of the contract issuers or any other risk. The contract value for the synthetic GICs was $683.5 million and $674.8 million at December 31, 2011 and 2010, respectively.

The crediting interest rate, which is reset quarterly, can never fall below zero. The crediting rate formula smoothes the impact of interest rate changes on participant returns by amortizing any difference between market value and book value over a period of years equal to the duration of the portfolio benchmark. The average yield on the synthetic GICs was approximately 2.9% and 3.5% at December 31, 2011 and 2010, respectively. The average interest rate credited to participants on the synthetic GICs was approximately 3.7% and 4.1% for the years ended December 31, 2011 and 2010. The credit ratings for Aegon Institutional Markets were AA- at both December 31, 2011 and 2010, and the credit ratings for Bank of America N.A. were A and A+ at December 31, 2011 and 2010, respectively.

Events that lead to market value withdrawals that exceed 20 percent of the contract value would limit the ability of the Plan to transact at contract value with participants. These events include restructurings, early retirement plans, divestitures, bankruptcies, or legal, tax or regulatory changes. The Plan sponsor believes that the occurrence of any such event is remote.

The wrapper providers can only terminate at a value different than contract value under an event of default (that was not remedied) such as failure to follow the terms of the contract. If a wrapper provider would like to exit the contract for another reason, the Plan can maintain the contract through an extended termination process designed to ensure continued benefit-responsive treatment for withdrawals.

Payment of Benefits

Benefits are recorded when paid.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related notes to the financial statements. Changes in such estimates may affect amounts reported in future periods.

Other

Due from or due to brokers for securities sold or purchased, respectively, represent the net cash value of security trades initiated but not yet settled at each respective year-end.

Risks and Uncertainties

The Plan provides for various investment options which invest in any combination of registered investment companies, U.S. government and government agency issues, corporate and other obligations, common stock, commingled funds, synthetic guaranteed investment contracts and short-term investments. Investment securities are exposed to various risks, such as interest rate, market, liquidity and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits. Individual participants’ accounts bear the risk of loss resulting from fluctuations in investment values.

Investments underlying the Plan’s synthetic GICs include securities with contractual cash flows, such as asset-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities, including securities backed by subprime mortgage loans. The value, liquidity and related income of these securities are sensitive to changes in economic conditions, including real estate values, delinquencies and/or defaults and may be adversely affected by shifts in the market’s perception of the issuers and changes in interest rates.

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

3.	Eligibility Requirements

Employees become eligible to participate in the Plan as of the first day of the month following the completion of thirty days of employment. Eligible employees are those who meet the following requirements:

 

A.

U.S. employees of Baxter or its subsidiaries which have adopted the Plan;

 

B.

U.S. employees not covered by a collective bargaining agreement unless the agreement provides for coverage under the Plan; and

 

C.

U.S. employees who are not leased employees.

 

4.	Administration of the Plan

State Street Bank and Trust Company (the Trustee) serves as trustee and ING Institutional Plan Services, LLC serves as recordkeeper for the Plan.

The Administrative Committee administers the Plan. The Investment Committee has authority, responsibility and control over the management of the assets of the Plan. Members of both committees are appointed by the Board of Directors of Baxter and are employees of Baxter.

Substantially all investment manager, trustee and administrative fees incurred in the administration of the Plan were paid from the assets of the Plan.

 

5.	Fair Value Measurements

The fair value hierarchy under the accounting standard for fair value measurements consists of the following three levels:

 

•

Level 1 - Quoted prices in active markets that the Plan has the ability to access for identical assets or liabilities;

 

•

Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market; and

 

•

Level 3 - Valuations using significant inputs that are unobservable in the market and include the use of judgment by the Plan’s management about the assumptions market participants would use in pricing the asset or liability.

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

The following tables summarize the bases used to measure the Plan’s financial instruments and liabilities that are carried at fair value on a recurring basis.

 

						Basis of Fair Value Measurement
		Balance at December 31, 2011				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
(in thousands)
Assets
Cash and cash equivalents		$	55,858			$	—			$	55,858			$	—
Common stock:
Healthcare			201,587				201,587				—				—
Consumer products			55,827				55,827				—				—
Information technology			47,938				47,938				—				—
Financial services			21,838				21,838				—				—
Industrial services and materials			20,624				20,624				—				—
Energy			16,602				16,602				—				—
Other			29,885				29,885				—				—
Total common stock			394,301				394,301				—				—
U.S. government and government agency issues			21,865				—				21,865				—
Corporate and other obligations			40,242				—				40,242				—
Commingled funds			335,027				—				335,027				—
Registered investment companies:
Target retirement funds			199,777				199,777				—				—
Self-managed funds			11,830				11,830				—				—
Other			2,467				2,467				—				—
Total registered investment companies			214,074				214,074				—				—
Synthetic guaranteed investment contracts:
Corporate and other obligations			257,547				—				257,547				—
U.S. government and government agency issues			463,348				—				463,348				—
Cash and cash equivalents			23,347				17				23,330				—
Wrapper contracts			(343	)			—				—				(343	)
Other			(7	)			—				(7	)			—
Total synthetic guaranteed investment contracts			743,892				17				744,218				(343	)
Collateral held on loaned securities			13,782				—				13,782				—
Total assets		$	1,819,041			$	608,392			$	1,210,992			$	(343	)
Liability
Collateral to be paid on loaned securities		$	13,782			$	1,135			$	12,647			$	—

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

						Basis of Fair Value Measurement
		Balance at December 31, 2010				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
(in thousands)
Assets
Cash and cash equivalents		$	39,053			$	—			$	39,053			$	—
Common stock:
Healthcare			211,669				211,669				—				—
Consumer products			48,708				48,708				—				—
Information technology			46,526				46,526				—				—
Financial services			33,235				33,235				—				—
Industrial services and materials			35,358				35,358				—				—
Energy			28,737				28,737				—				—
Other			30,685				30,685				—				—
Total common stock			434,918				434,918				—				—
U.S. government and government agency issues			20,064				—				20,064				—
Corporate and other obligations			47,640				—				47,640				—
Commingled funds			359,352				—				359,352				—
Registered investment companies:
Target retirement funds			172,137				172,137				—				—
Self-managed funds			12,979				12,979				—				—
Total registered investment companies			185,116				185,116				—				—
Synthetic guaranteed investment contracts:
Corporate and other obligations			264,682				—				264,682				—
U.S. government and government agency issues			436,962				—				436,962				—
Cash and cash equivalents			21,120				—				21,120				—
Wrapper contracts			1,634				—				—				1,634
Other			(2	)			—				(2	)			—
Total synthetic guaranteed investment contracts			724,396				—				722,762				1,634
Collateral held on loaned securities			230,444				—				230,444				—
Total assets		$	2,040,983			$	620,034			$	1,419,315			$	1,634
Liability
Collateral to be paid on loaned securities		$	232,887			$	6,929			$	225,958			$	—

There were no transfers from Level 1 to Level 2 investments in 2011 or 2010.

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

The following table sets forth a summary of changes in the fair values of the Plan’s level 3 financial instruments.

 

(in thousands)		Wrapper Contracts
Balance at December 31, 2009		$	1,668
Unrealized losses (relating to assets held at end of year)			(34	)
Balance at December 31, 2010			1,634
Unrealized losses (relating to assets held at end of year)			(1,977	)
Balance at December 31, 2011		$	(343	)

The net unrealized losses from the wrapper contracts are excluded from the net (depreciation) appreciation reported for the plan, but instead are reflected in the change in the adjustment from fair value to contract value for fully benefit responsive contracts reported on the statements of net assets available for benefits.

See Valuation of Investments and Collateral in Note 2 above for a discussion of the methodologies used to determine the fair values of the Plan’s investments and collateral. These methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

 

6.	Investments

Investments representing five percent or more of the Plan’s net assets available for benefits at December 31, 2011 and 2010 are summarized as follows:

 

(in thousands, except per share data)		2011				2010
Baxter common stock, 2,921,806 shares and 3,077,924 shares at December 31, 2011 and 2010, respectively		$	144,571			$	155,805
State Street Global Advisors (SSgA) S&P 500 Flagship Fund			173,817				176,772
SSgA International EAFE Equity Index Fund			*				94,567
Baxter International Savings Trust Separate Account (Collateral held on loaned securities)			*				215,921

 

*

Does not meet 5% threshold.

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

Investments as of December 31, 2011 and 2010 are segregated into various investment fund options as follows:

 

		2011				2010
(in thousands)
Cash (available for investment)		$	6,861			$	6,637
Stable Income Fund			775,335				737,052
Baxter Common Stock Fund			144,639				157,521
Composite Fund			140,853				150,741
General Equity Fund			137,841				154,195
Cardinal Health Common Stock Fund			5,243				5,308
SSgA S&P 500 Flagship Fund			173,954				177,001
SSgA International EAFE Equity Index Fund			80,053				94,603
Edwards Lifesciences Common Stock Fund			17,747				22,526
SSgA Small Cap Fund			81,274				88,103
Self-Managed Fund			41,682				44,715
Target Retirement Funds			199,777				172,137
Collateral held on loaned securities			13,782				230,444
Total investments at fair value			1,819,041				2,040,983
Adjustment from fair value to contract value for Stable Income Fund			(60,432	)			(49,603	)
Total investments		$	1,758,609			$	1,991,380

Net (depreciation) appreciation in fair value for each significant class of investment, which includes realized and unrealized gains and losses, is as follows:

 

		2011				2010
(in thousands)
Baxter common stock		$	(1,295	)		$	(22,002	)
Other common stock			(22,315	)			34,999
U.S. government and government agency issues			1,154				205
Corporate and other obligations			1,031				2,549
Commingled funds			(11,490	)			45,909
Registered investment companies			(7,314	)			17,535
Collateral held on loaned securities			914				1,114
		$	(39,315	)		$	80,309

 

7.	Securities Lending Transactions

The Plan participates in a securities lending program with the Trustee. The program allows the Trustee to loan securities, which are assets of the Plan, to approved brokers (the Borrowers).

The Trustee requires the Borrowers, pursuant to a security loan agreement, to deliver collateral to secure each loan in an amount that is at least equal to the fair value of the securities loaned. The Plan bears the risk of loss with respect to any unfavorable change in fair value of the invested cash collateral. However, the Borrower bears the risk of loss related to the decrease in the fair value of the non-cash collateral and, therefore, would have to deliver additional securities to maintain the required collateral. In the event of default by the Borrower, the Trustee shall indemnify the Plan by purchasing replacement securities equal to the number of unreturned loaned securities or, if replacement securities are not able to be purchased, the Trustee shall credit the Plan for the market value of the unreturned securities. In each case, the Trustee would apply the proceeds from the collateral for such a loan to make the Plan whole.

 

12

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

The fair value of the investment of cash collateral received pursuant to securities lending transactions is reflected on the Statements of Net Assets Available for Benefits as an asset and the obligation to return the amount received is reflected as a liability.

As of December 31, 2010, the Plan had securities on loan with a fair market value of $228.8 million, with cash collateral received of $232.9 million, which was reflected at its fair value of $230.4 million. During 2010, $218.4 million was redeemed from the State Street Quality D Short-Term Investment Fund and held in a separate fund (Baxter International Savings Trust Separate Account) for liquidation due to an agreement between the Plan and the Trustee to terminate the securities lending program for the securities within the Stable Income Fund. As of December 31, 2010, the net asset value of the Baxter International Savings Trust Separate Account was $0.9929. As a result of the liquidation of this fund in 2011, a realized gain of $913,841 is reflected in the 2011 Statement of Changes in Net Assets Available for Benefits. As of December 31, 2011, the Plan had securities on loan with a fair market value of $13.5 million with cash collateral received of $13.8 million, which was invested in the State Street Quality D Short-Term Investment Fund. Investments underlying this fund primarily consisted of cash and cash equivalents and asset-backed securities and as of December 31, 2011, the net asset value of this fund was approximately $1.00 per unit. As of December 31, 2011 the cash collateral received is reflected at its fair value of $13.8 million in the 2011 Statements of Net Assets Available for Benefits.

Non-cash collateral of $2.0 million and $6.7 million received for securities on loan at December 31, 2011 and 2010, respectively, consisted of U.S. government and government agency issues held by the Trustee on behalf of the Plan. Non-cash collateral is not included with the collateral balance on the 2011 and 2010 Statement of Net Assets Available for Benefits because it may not be sold or repledged. A portion of the income generated upon investment of cash collateral is remitted to the Borrowers, and the remainder is allocated between the Plan and the Trustee in its capacity as a security agent. Securities lending income allocated to the Plan amounted to $57,249 and $424,446 for 2011 and 2010, respectively. Securities lending income is classified as interest income in the Statements of Changes in Net Assets Available for Benefits.

 

8.	Plan Termination

Although it has not expressed any intent to do so, the Plan sponsor has the right under the Plan to reduce, suspend or discontinue its contributions at any time and to terminate the Plan subject to the provisions of the ERISA. In the event the Plan terminates, the interest of each participating employee in the Plan shall become fully vested and such termination of the Plan would not reduce the interest of any participating employee or their beneficiaries accrued under the Plan up to the date of such termination.

 

9.	Tax Status of the Plan

The Internal Revenue Service (IRS) has determined and informed the Plan sponsor by a letter dated July 19, 2006 that the Plan is designed in accordance with applicable sections of the Internal Revenue Code (the IRC). The Plan has been amended since the date of the determination letter. The Plan sponsor believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan’s financial statements. The Plan has requested from the IRS an updated determination letter, but has not yet received it as of the date of this report.

 

13

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Notes to Financial Statements

December 31, 2011 and 2010

 

 

10.	Related Parties

Parties-in-interest are defined under Department of Labor regulations as any fiduciary of the Plan, any party rendering service to the Plan, the employer, and certain others.

At December 31, 2011 and 2010, the Plan held units of participation in certain commingled funds, shares of common stock, units of registered investment companies, and short-term investment funds of State Street Bank and Trust Company, the Plan trustee; shares of common stock and bonds of Baxter, the Plan sponsor; loans with participants; units of registered investment companies managed by Pacific Investment Management Company, an investment manager for the Plan; shares of common stock and units of registered investment companies managed by AllianceBernstein, an investment manager for the Plan; units of registered investment companies managed by Loomis Sayles, an investment manager for the Plan; shares of common stock, bonds, and interest rate wrapper contracts of Bank of America, issuer of the Plan’s fully benefit-responsive contracts; interest rate wrapper contracts of Aegon Institutional Markets, issuer of the Plan’s fully benefit-responsive contracts; and units of registered investment companies in various affiliates of ING Institutional Plan Services, LLC, the recordkeeper. These transactions are allowable party-in-interest transactions under ERISA and the regulations promulgated thereunder.

Fees paid by the Plan for investment management, recordkeeping and consulting services, also qualify as party-in-interest transactions and are included in Plan expenses in the accompanying financial statements. The Company pays certain expenses for the administration of the Plan. These transactions are exempt from the party-in interest transaction prohibitions of ERISA.

 

14

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SUPPLEMENTAL SCHEDULE

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Table of Contents

Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Cash & Cash Equivalents:
*		SSGA Money Market Fund		Short-Term Investment Fund			—				8,494,617
*		State Street Bank & Trust Co		Short-Term Investment Fund			—				47,363,765
		Cash and cash equivalents								$	55,858,382
**		Common Stock:
		3Dicon Corp		Common Stock			—				10,094
		3M Company		Common Stock			—				10,295
		8X8 Inc		Common Stock			—				3,170
		ABB Ltd Sponsored ADR		Common Stock			—				16,368
		Abbott Laboratories		Common Stock			—				150,962
		Abbott Laboratories		Common Stock			—				1,111,005
		Acadia Pharmaceuticals Inc		Common Stock			—				243
		Access Pharmaceuticals Inc		Common Stock			—				14,033
		Acclaim Entertainment Inc		Common Stock			—				—
		Accretive Health Inc		Common Stock			—				5,745
		ACE Ltd		Common Stock			—				1,489,355
		Acme Packet Inc		Common Stock			—				12,364
		AcordaTherapeutics Inc		Common Stock			—				11,920
		Activision Blizzard Inc		Common Stock			—				26,389
		Adaptive Broadband Corp		Common Stock			—				—
		Adarna Energy Corp		Common Stock			—				—
		Adept Technology Inc		Common Stock			—				1,176
		Adolor Corp		Common Stock			—				2,315
		Advanced Micro Devices Inc		Common Stock			—				5,940
		Advanced Optics Electronics Inc		Common Stock			—				—
		Advansource Biomaterials Corp		Common Stock			—				65
		Advanta Corp		Common Stock			—				—
		Advantage Oil & Gas Ltd		Common Stock			—				1,035
		Adventrx Pharmaceuticals Inc		Common Stock			—				590
		Aegean Marine Petroleum Network Inc		Common Stock			—				4,080
		AES Corp		Common Stock			—				1,149,802
		Aeterna Zentaris Inc		Common Stock			—				924
		Affymax Inc		Common Stock			—				6,610
		Aflac Inc		Common Stock			—				24,483
		Agco Corp		Common Stock			—				12,891
		Agenus Inc New		Common Stock			—				1,474
		Agilent Technologies		Common Stock			—				1,770,247
		AGL Res Inc		Common Stock			—				16,904
		Agnico Eagle Mines Ltd		Common Stock			—				68,667
		Agrium Inc I		Common Stock			—				8,389
		AK Steel Hldg Corp		Common Stock			—				4,144
		Aksys Ltd		Common Stock			—				2
		Alcatel Lucent Spon ADR		Common Stock			—				6,087
		Alcoa Inc		Common Stock			—				41,960
		Alexco Resource Corp		Common Stock			—				20,430

 

16

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost  (1)				Current Value
		Alexion Pharmaceuticals		Common Stock			—				933,874
		Alexza Pharmaceuticals Inc		Common Stock			—				1,411
		ALJ Regl Hldgs Inc		Common Stock			—				390
		All Amern Gold Corp		Common Stock			—				115
		Allergan Inc		Common Stock			—				2,182,499
		Alliance Pharmaceutical Corp New		Common Stock			—				5
*		AllianceBernstein Hldg L P Unit Ltd		Common Stock			—				5,958
		Allied Irish Banks		Common Stock			—				136
		Alliqua Inc		Common Stock			—				300
		Allos Therapeutics Inc		Common Stock			—				7,121
		Allscripts Healthcare Solutions Inc		Common Stock			—				9,129
		Allstate Corp		Common Stock			—				11,061
		Almaden Minerals Ltd		Common Stock			—				12,600
		Alnylam Pharmaceuticals Inc		Common Stock			—				815
		Alon USA Energy Inc		Common Stock			—				4,791
		Alpha Nat Res Inc		Common Stock			—				6,129
		Altair Nanotechnologies Inc		Common Stock			—				165
		Alternative Living Services		Common Stock			—				—
		Altria Group Inc		Common Stock			—				153,792
		Aluminum Corp China		Common Stock			—				184
		Alvarion Ltd		Common Stock			—				455
		Amarin Corp		Common Stock			—				8,876
		Amazon.com Inc		Common Stock			—				52,796
		Amazon.com Inc		Common Stock			—				4,377,448
		Amcore Finl Inc		Common Stock			—				—
		Amdocs Ltd		Common Stock			—				5,706
		Ameren Corp		Common Stock			—				3,353
		American Cap Agy Corp		Common Stock			—				25,333
		American Cap Ltd		Common Stock			—				18,044
		American Elec Pwr Co		Common Stock			—				37,909
		American Express Co		Common Stock			—				5,612
		American Express Co		Common Stock			—				1,943,117
		American Intl Group Inc		Common Stock			—				1,394
		American Intl Group Inc		Common Stock			—				6,450
		American Lithium Minerals Inc		Common Stock			—				390
		American Tower Corp		Common Stock			—				4,829
		American Tower Corp		Common Stock			—				2,329,883
		Amerigas Partners LP Uts Rpstg Ltd		Common Stock			—				9,641
		Amern Super Conductor Corp		Common Stock			—				11,070
		Amgen Inc		Common Stock			—				62,757
		Amn Healthcare Svcs Inc		Common Stock			—				5,759
		Ampliphi Biosciences Corp		Common Stock			—				1,072
		AMR Corp		Common Stock			—				2,546
		Amstem Corp		Common Stock			—				30
		Amwest Imaging Inc		Common Stock			—				350
		Amylin Pharm Inc		Common Stock			—				5,690
		Anadarko Petroleum		Common Stock			—				3,817
		Anadarko Petroleum		Common Stock			—				719,838
		Andrea Electronics Corp		Common Stock			—				47

 

17

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Annaly Mortgage Management Inc		Common Stock			—				257,908
		Anthera Pharmaceuticals Inc		Common Stock			—				107,450
		Anworth Mtg Asset Corp		Common Stock			—				1,922
		AOL Inc		Common Stock			—				211
		Apache Corp		Common Stock			—				9,966
		Apollo Group Inc		Common Stock			—				3,232
		Apollo Invt Corp		Common Stock			—				14,575
		Apple Inc		Common Stock			—				2,764,935
		Apple Inc		Common Stock			—				6,201,612
		Applied Materials Inc		Common Stock			—				10,282
		Applied Materials Inc		Common Stock			—				808,352
		Applied Materials Inc		Common Stock			—				1,036,892
		Apptech Corp		Common Stock			—				—
		Apricus Biosciences Inc		Common Stock			—				4,644
		Aqua America Inc		Common Stock			—				2,560
		Aradigm Corp		Common Stock			—				368
		Arch Coal Inc		Common Stock			—				6,971
		Archer Daniels Midland		Common Stock			—				23,183
		Archer Daniels Midland		Common Stock			—				1,062,360
		Ar Cos Dorados Holdings Inc		Common Stock			—				35,027
		Arena Pharmaceuticals Inc		Common Stock			—				9,350
		Ariad Pharmaceutical Inc		Common Stock			—				37,791
		Arm Holdings Plc		Common Stock			—				11,068
		ARM Holdings Plc		Common Stock			—				492,039
		Arrowhead Resh Corp		Common Stock			—				1,994
		Artificial Life Inc		Common Stock			—				140
		AsiaPulp & Paper Co Ltd		Common Stock			—				—
		Aspenbio Pharma Inc		Common Stock			—				155
		Astrazeneca Plc		Common Stock			—				2,083
		Astropower Inc		Common Stock			—				—
		AT&T Inc		Common Stock			—				167,733
		Atlantic Power Corp		Common Stock			—				2,935
		ATP Oil & Gas Corp		Common Stock			—				44,160
		Atwood Oceanics Inc		Common Stock			—				3,979
		ATX Communications Inc		Common Stock			—				—
		Augme Technologies Inc		Common Stock			—				56,280
		Aurico Gold Inc		Common Stock			—				16,781
		Aurizon Mines Ltd		Common Stock			—				9,860
		Automatic Data Processing Inc		Common Stock			—				37,662
		Avago Technologies		Common Stock			—				989,222
		Avalon Rare Metals Inc		Common Stock			—				474
		Avanir Pharmaceuticals		Common Stock			—				2,440
		AVI Biopharma Inc		Common Stock			—				10,281
		Axia Group Inc		Common Stock			—				—
		Axion Power International Inc		Common Stock			—				1,080
		Babcock & Wilcox Co		Common Stock			—				9,656
		Babson Cap Partn Invs Tr		Common Stock			—				31,700
		Backweb Technologies Ltd		Common Stock			—				170
		Baidu Inc		Common Stock			—				2,055,238

 

18

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Baidu Inc		Common Stock			—				83,742
		Banco Latino-Americano De ercio Exterior Sa		Common Stock			—				14,124
		Banco Santander SA		Common Stock			—				6,836
		Bank New York Mellon Corp		Common Stock			—				15,825
*		Bank of America Corp		Common Stock			—				358,790
*		Bank of America Corp		Common Stock			—				713,513
		Barclays		Common Stock			—				33,388
		Bard CR Inc		Common Stock			—				47,453
		Barrick Gold Corp		Common Stock			—				339,743
*		Baxter International Inc		Common Stock			—				143,185,079
*		Baxter International Inc		Common Stock			—				1,385,860
		Bayer AG		Common Stock			—				16,495
		BB Liquidating Inc		Common Stock			—				2
		BB Liquidating Inc		Common Stock			—				105
		BB&T Corp		Common Stock			—				1,167,446
		BCE Inc		Common Stock			—				1,667,233
		Beacon Pwr Corp		Common Stock			—				79
		Bed Bath & Beyond Inc		Common Stock			—				923,638
		Benchmark Electrs Inc		Common Stock			—				1,616
		Berkshire Hathaway Inc		Common Stock			—				186,935
		Best Buy Inc		Common Stock			—				16,542
		Beyond Corp New		Common Stock			—				—
		Big Bear Mng Corp		Common Stock			—				26
		Biodel Inc		Common Stock			—				732
		Bioelectronics Corp		Common Stock			—				308
		Biomedical Technology Solutions Hldgs Inc		Common Stock			—				76
		Biomerica Inc		Common Stock			—				6,720
		Biomoda Inc		Common Stock			—				297
		Biosante Pharmaceuticals Inc		Common Stock			—				5,974
		Bizauctions Inc		Common Stock			—				—
		Black Hills Corp		Common Stock			—				3,694
		Blackrock Inc		Common Stock			—				1,109,337
		Blackstone Group LP		Common Stock			—				22,416
		Blavod Extreme Spirits		Common Stock			—				50
		BMW		Common Stock			—				915,785
		Boeing Co		Common Stock			—				33,543
		Boeing Co		Common Stock			—				1,950,132
		Bombardier Inc		Common Stock			—				3,987
		Borgwarner Inc		Common Stock			—				1,397,922
		Boston Scientific		Common Stock			—				1,068
		BP Amoco Plc		Common Stock			—				40,524
		Brandywine Rlty Tr		Common Stock			—				2,421
		Bridgepoint Ed Inc		Common Stock			—				9,729
		Briggs & Stratton Corp		Common Stock			—				2,788
		Bristol Myers Squibb		Common Stock			—				42,406
		Bristol Myers Squibb		Common Stock			—				1,520,501
		Broad Corp		Common Stock			—				17,029
		Broadridge Financial Solutions LLC		Common Stock			—				1,691
		Broadwind Energy Inc		Common Stock			—				68

 

19

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Brookfield Asset Mgmt Inc		Common Stock			—				6,870
		Brookfield Infrastructure Partners LP		Common Stock			—				9,376
		Brookfield Residential Pptys Inc		Common Stock			—				8
		Brooks Automation Inc		Common Stock			—				2,587
		Buckeye Partners LP		Common Stock			—				25,592
		Burberry Group		Common Stock			—				953,118
		Cadence Pharmaceuticals Inc		Common Stock			—				9,954
		Calamp Corp		Common Stock			—				115,816
		Calgon Carbon Corp		Common Stock			—				1,885
		Camden Ppty		Common Stock			—				11,699
		Cameco Corp		Common Stock			—				18,953
		Cameron Intl Corp		Common Stock			—				3,837
		Canadian Natural Resources		Common Stock			—				7,474
		Canadian Solar Inc		Common Stock			—				40
		Cannabis Science Inc		Common Stock			—				86
		Capital One Financial Corp		Common Stock			—				1,036,113
		Capitalsource Inc		Common Stock			—				13,052
		Capitol Bancorp Ltd		Common Stock			—				67
		Capstead Mtg Corp		Common Stock			—				12,439
		Capstone Turbine Corp		Common Stock			—				116
		Carbonite Inc		Common Stock			—				1,110
		Cardinal Communications Inc		Common Stock			—				—
		Cardinal Health Inc		Common Stock			—				5,206,974
		Cardinal Health Inc		Common Stock			—				80,012
		Carefusion Corp		Common Stock			—				25,918
		Carmax Inc		Common Stock			—				6,096
		Carnival Corp		Common Stock			—				9,792
		Cast Corp		Common Stock			—				2,371
		Caterpillar Inc		Common Stock			—				190,558
		CBL & Assoc Pptys Inc		Common Stock			—				1,727
		CDC Corporation		Common Stock			—				106
		Cedar Fair LP		Common Stock			—				1,109
		Celgene Corp		Common Stock			—				2,364,111
		Celgene Corp		Common Stock			—				28,933
		Cell Israel Ltd		Common Stock			—				7,842
		Cell Therapeutics Inc		Common Stock			—				5,624
		Cemex SA		Common Stock			—				3,127
		Cenovus Energy Inc		Common Stock			—				5,069
		Central Fd Cda		Common Stock			—				30,414
		Centurytel Inc		Common Stock			—				8,932
		Ceragon Networks Ltd		Common Stock			—				2,695
		Cereplast Inc		Common Stock			—				5,400
		Cerner Corp		Common Stock			—				11,025
		Cerus Corp		Common Stock			—				3,640
		Charles Schwab Corp		Common Stock			—				935,518
		Charter Inc		Common Stock			—				—
		Cheniere Energy Partners L P		Common Stock			—				813
		Chesapeake Energy Corporation		Common Stock			—				367,344
		Chevron Corp		Common Stock			—				225,995

 

20

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Chevron Corp		Common Stock			—				136,681
		Chimera Invt Corp		Common Stock			—				32,586
		China Automotive Sys Inc		Common Stock			—				2,376
		China Direct Inc		Common Stock			—				84
		China Energy Svgs Technology Inc		Common Stock			—				—
		China Green Agriculture Inc		Common Stock			—				4,686
		China Shen Zhou Mng & Res Inc		Common Stock			—				756
		China Sunergy Co Ltd		Common Stock			—				15
		China Yuchai International Ltd		Common Stock			—				41,370
		Chipotle Mexican Grill Inc		Common Stock			—				11,821
		Chipotle Mexican Grill Inc		Common Stock			—				1,679,630
		Churchill Downs Inc		Common Stock			—				5,416
		Ciena Corp New Delaware		Common Stock			—				24
		Cigna Corp		Common Stock			—				4,200
		Cintas Corp		Common Stock			—				2,785
		Cintas Corp		Common Stock			—				422,987
		Circuit City Stores Inc		Common Stock			—				—
		Cisco Systems		Common Stock			—				211,858
		Cisco Systems		Common Stock			—				2,024,593
		Citadel Broadcasting Corp		Common Stock			—				—
		Citigroup Inc		Common Stock			—				1,078,666
		Citigroup Inc		Common Stock			—				154,068
		CitrixSystems Inc		Common Stock			—				12,144
		City Bank		Common Stock			—				32
		Clarent Corp		Common Stock			—				—
		Clean Energy Fuels Corp		Common Stock			—				79,121
		Cleco Corp		Common Stock			—				114,300
		Cliffs Nat Res Inc		Common Stock			—				75
		Cloud Peak Energy Inc		Common Stock			—				2,898
		Coach Inc		Common Stock			—				1,532,879
		Coca Cola Co		Common Stock			—				155,546
		Coca Cola Co		Common Stock			—				960,826
		Coeur D Alene Mines Corp		Common Stock			—				21,123
		Cognex Corp		Common Stock			—				7,158
		Cognizant Tech Solutions		Common Stock			—				1,151,210
		Coinstar Inc		Common Stock			—				5,477
		Coldwater Creek Inc		Common Stock			—				2,360
		Collective Brands Inc		Common Stock			—				20,837
		Colonial Bancgroup		Common Stock			—				—
		Columbia Laboratories Inc		Common Stock			—				1,500
		Comcast Corp		Common Stock			—				1,077,475
		Commtouch Software Limited		Common Stock			—				1,352
		Concho Resources		Common Stock			—				1,347,387
		Conoco Phillips		Common Stock			—				200,772
		Consol Energy Inc		Common Stock			—				953
		Consolidated Edison Hldg Co Inc		Common Stock			—				77,264
		Constellation Brands Inc		Common Stock			—				6,201
		Constellation Energy Group		Common Stock			—				1,626
		Constellation Energy Partners LLC		Common Stock			—				11,760

 

21

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Corelogic Inc		Common Stock			—				647
		Corning Inc		Common Stock			—				16,117
		Corporate Executive Brd Co		Common Stock			—				1,715
		Cortex Pharmaceuticals Inc		Common Stock			—				383
		Costco Wholesale Corp		Common Stock			—				7,895
		Costco Wholesale Corp		Common Stock			—				2,454,896
		Covidien Plc		Common Stock			—				893,764
		Covidien Plc		Common Stock			—				7,742
		Credit Suisse		Common Stock			—				6,570
		Credit Suisse		Common Stock			—				797,948
		Cree Inc		Common Stock			—				61,712
		Crocs Inc		Common Stock			—				13,958
		Cross Timbers Royalty Trust		Common Stock			—				733
		Cryptologic Limited Shs		Common Stock			—				474
		CSX Corp		Common Stock			—				5,613
		Ctrip Intl Ltd		Common Stock			—				25,272
		Cui Global Inc		Common Stock			—				95
		Cummins Inc		Common Stock			—				8,802
		CVR Partners LP		Common Stock			—				12,410
		CVS Caremark Corp		Common Stock			—				1,212,639
		CVS Corp		Common Stock			—				26,021
		Cyber-Care Inc		Common Stock			—				—
		Cyclacel Pharmaceuticals Inc		Common Stock			—				590
		Cytori Therapeutics Inc		Common Stock			—				935
		Cytosorbents Corp		Common Stock			—				1,200
		Cytrx Corp		Common Stock			—				2,520
		Dan River Inc		Common Stock			—				—
		Daulton Cap Corp		Common Stock			—				30
		Daystar Technologies Inc		Common Stock			—				3
		Decisionpoint Sys Inc		Common Stock			—				8
		Deckers Outdoor		Common Stock			—				34,007
		Deere & Co		Common Stock			—				85,126
		Delcath Systems Inc		Common Stock			—				4,188
		Dell Inc		Common Stock			—				2,414
		Delta Airlines Inc		Common Stock			—				710,507
		Delta Pete Corp		Common Stock			—				14
		Denbury Res Inc		Common Stock			—				20,219
		Dendreon Corp		Common Stock			—				135,759
		Denison Mines Corp		Common Stock			—				5,000
		Derma Sciences Inc		Common Stock			—				90,581
		Devon Energy Corp		Common Stock			—				1,047,383
		Devon Energy Corp		Common Stock			—				20,770
		Devry Inc		Common Stock			—				1,942
		Diamond Offshore Drilling Inc		Common Stock			—				829
		Diana Containerships Inc		Common Stock			—				218
		Diana Shipping Inc		Common Stock			—				16,678
		Digerati Technologies Inc		Common Stock			—				20
		Digital Angel Corp New		Common Stock			—				1,278
		Discover Finl Svcs		Common Stock			—				6,960

 

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Discovery Laboratories Inc		Common Stock			—				64
		Divine Inc		Common Stock			—				—
		Dolby Laboratories Inc		Common Stock			—				4,577
		Dollar General Corp		Common Stock			—				165
		Dollar Tree Inc		Common Stock			—				12,467
		Dominion Resources Inc		Common Stock			—				52,709
		Doral Finl Corp		Common Stock			—				48
		Dow Chemical Co		Common Stock			—				37,688
		Downey Finl Corp		Common Stock			—				—
		Dryships Inc		Common Stock			—				15,202
		DuPont		Common Stock			—				16,801
		Duke Energy Corp New		Common Stock			—				145,549
		Duke Realty Corp		Common Stock			—				5,423
		Dunkin Brands Group		Common Stock			—				608,264
		Dupont		Common Stock			—				762,249
		Dynamic Materials Corp		Common Stock			—				32,578
		Dynegy Incl		Common Stock			—				69
		ETrade Finl Corp		Common Stock			—				5,906
		Eagle Bulk Shipping Inc		Common Stock			—				94
		Eagle Rock Energy Partners LP		Common Stock			—				17,802
		Eastman Kodak Co		Common Stock			—				22,978
		Eaton Corp		Common Stock			—				13,059
		Eb2B commerce Inc		Common Stock			—				—
		Ebay Inc		Common Stock			—				8,007
		Ecolocap Solutions Inc		Common Stock			—				6
		E-commerce China Dangdang Inc		Common Stock			—				3,960
		Ecopetrol SA Spon		Common Stock			—				11,130
		EDAP Tms S.A.		Common Stock			—				51,038
		Edwards Lifesciences Corp		Common Stock			—				17,579,717
		Edwards Lifesciences Corp		Common Stock			—				245,046
		Elan Corp Plc		Common Stock			—				14,015
		Eldorado Gold Corp		Common Stock			—				13,710
		Elephant Talk Communications Corp		Common Stock			—				7,950
		Eline Entertainment Group Inc		Common Stock			—				—
		EMC Corp		Common Stock			—				2,442,899
		EMC Corp		Common Stock			—				21,325
		Emcore Corp		Common Stock			—				1,726
		Emergent Biosolutions Inc		Common Stock			—				5,052
		Emerson Electric Co		Common Stock			—				55,193
		Emulex Corp New		Common Stock			—				789
		Enbridge Energy Partners L P		Common Stock			—				3,319
		Enbridge Inc		Common Stock			—				3,741
		Encana Corp		Common Stock			—				14,883
		Energy Conversion Devices Inc		Common Stock			—				2
		Energy Transfer Partners LP		Common Stock			—				54,113
		Energysolutions Inc Depositary Sh		Common Stock			—				309
		Enerplus Corporation		Common Stock			—				12,888
		Enron Corp		Common Stock			—				—
		Ens Co Plc Sponsored		Common Stock			—				2,399

 

23

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Enterprise Products Pptns LP		Common Stock			—				71,468
		Entravision Conmunications Corp		Common Stock			—				234
		Entremed Inc		Common Stock			—				35
		EOG Resources Inc		Common Stock			—				1,352,055
		Epix Pharmaceuticals Inc		Common Stock			—				7
		Estee Lauder Companies		Common Stock			—				1,956,374
		Evergreen Solar Inc		Common Stock			—				84
		Exelixis Inc		Common Stock			—				8,234
		Exelon Corp		Common Stock			—				48,149
		Exelon Corp		Common Stock			—				1,024,012
		Exeter Resource Corp		Common Stock			—				10,440
		Exide Technologies		Common Stock			—				2,630
		Expedia Inc		Common Stock			—				900
		Express Scripts Inc		Common Stock			—				1,818,970
		Express Scripts Inc		Common Stock			—				4,469
		Extorre Gold Mines Limited		Common Stock			—				29,520
		Exxon Mobil Corp		Common Stock			—				62,258
		Exxon Mobil Corp		Common Stock			—				2,671,158
		Fairpoint Communications Inc		Common Stock			—				—
		Family Dollar Stores Inc		Common Stock			—				2,998
		Fastenal Co		Common Stock			—				6,542
		Federal Natl Mtg Assn		Common Stock			—				4,024
		Fedex Corp		Common Stock			—				8,351
		Ferrellgas Partners LP		Common Stock			—				5,971
		Fifth St Fin Corp		Common Stock			—				28,710
		Finisar Corp		Common Stock			—				4,186
		First American Financial Corp		Common Stock			—				634
		First China Pharmaceutical Group Inc		Common Stock			—				540
		First Physicians Cap Group Inc		Common Stock			—				—
		First Solar Inc		Common Stock			—				12,322
		Flagstar Bancorp Inc		Common Stock			—				508
		Flextronics International		Common Stock			—				5,660
		Flextronics Ltd		Common Stock			—				876,200
		Fluor Corp New		Common Stock			—				2,554
		Fmi Holdings Ltd		Common Stock			—				3
		Focus Gold Corp		Common Stock			—				405
		Food Technology Svc Inc		Common Stock			—				2,600
		Ford Motor Co		Common Stock			—				208,141
		FortressInvt Group LLC		Common Stock			—				1,690
		Forward Inds		Common Stock			—				167
		Foster Wheeler AG		Common Stock			—				16,269
		Franklin Res Inc		Common Stock			—				25,555
		Freddie Mac		Common Stock			—				3,869
		Freeport Mcmoran Copper & Gold Inc.		Common Stock			—				66,110
		Fresenius Kabi Pharmaceuticals Hldg Inc		Common Stock			—				—
		Frontier Communications Corp		Common Stock			—				8,139
		Fuel Sys Solutions Inc		Common Stock			—				2,061
		Fuel Tech Inc		Common Stock			—				513
		Fusion-Io		Common Stock			—				1,694

 

24

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Table of Contents

Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Futuremedia Plc		Common Stock			—				—
		Gamco Global Gold Nat Res		Common Stock			—				3,685
		Gas Nat Inc		Common Stock			—				3,426
		Gazoo Energy Group Inc		Common Stock			—				25
		Geeknet Inc		Common Stock			—				3,802
		General Dynamics Corp		Common Stock			—				9,962
		General Electric Co		Common Stock			—				1,173,078
		General Electric Co		Common Stock			—				430,004
		General Mills Inc		Common Stock			—				72,738
		General Motors Co		Common Stock			—				817,018
		General Motors Co		Common Stock			—				20,270
		General Steel Hldgs Inc		Common Stock			—				890
		Generex Biotechnology Corp		Common Stock			—				975
		Genetic Technologies Ltd		Common Stock			—				30
		Geopharma Inc		Common Stock			—				4
		Geron Corp		Common Stock			—				1,480
		Giant Interactive Group Inc		Common Stock			—				1,416
		Gilead Sciences Inc		Common Stock			—				56,770
		Glaxosmithkline Plc		Common Stock			—				2,282
		GMX Res Inc		Common Stock			—				250
		Gold Amern Mng Corp		Common Stock			—				155
		Goldbrook Ventures Inc		Common Stock			—				6,776
		Gold Corp Inc New		Common Stock			—				13,357
		Goldman Sachs Group		Common Stock			—				532,894
		Goldman Sachs Group		Common Stock			—				88,616
		Google Inc		Common Stock			—				4,182,054
		Google Inc		Common Stock			—				54,902
		Grace W R & Co Del		Common Stock			—				9,184
		Grand Pacaraima Gold Corp		Common Stock			—				2
		Great Basin Gold		Common Stock			—				12,754
		Great Wolf Resorts Inc		Common Stock			—				290
		Green Earth Technologies Inc		Common Stock			—				5,400
		Green Mtn Coffee Roasters Inc		Common Stock			—				11,213
		Greenhunter Energy Inc		Common Stock			—				—
		Grid Pete Corp		Common Stock			—				5
		GSI Technology Inc		Common Stock			—				2,340
		Guess? Inc		Common Stock			—				1,074
		Halliburton Co		Common Stock			—				17,255
		Halozyme Therapeutics Inc		Common Stock			—				71,648
		Hansen Natural Corp		Common Stock			—				2,211
		Hanwha Solarone Company Ltd		Common Stock			—				10
		Harley Davidson Inc		Common Stock			—				1,261,751
		Harley Davidson Inc		Common Stock			—				3,887
		Hartford Finl Svcs Group Inc		Common Stock			—				2,099
		Hasbro Inc		Common Stock			—				2,870
		Hauppague Digital		Common Stock			—				1,200
		HCP Inc		Common Stock			—				17,556
		Headwaters Inc		Common Stock			—				2,775
		Health Care Reit Inc		Common Stock			—				5,452

 

25

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Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Healthwarehouse		Common Stock			—				148
		Hecla Mining Co		Common Stock			—				5,230
		Helix Energy Solutions Group Inc		Common Stock			—				3,555
		Hellenic Telem		Common Stock			—				164
		Henry Jack & Associates Inc		Common Stock			—				6,251
		Hercules Offshore Inc		Common Stock			—				35,964
		Hewlett-Packard Co		Common Stock			—				36,097
		Hollyfrontier Corporation		Common Stock			—				7,020
		Home Depot Inc		Common Stock			—				118,132
		Home Solutions Amer Inc		Common Stock			—				—
		Honeywell International Inc		Common Stock			—				1,983,955
		Honeywell International Inc		Common Stock			—				32,721
		Horizon Lines Inc		Common Stock			—				174
		Hospira Inc		Common Stock			—				7,350
		Howard Hughes Corp		Common Stock			—				1,148
		HPC Pos Sys		Common Stock			—				1,312
		HSBC Holdings Plc		Common Stock			—				23,451
		HSN Inc Del		Common Stock			—				435
		Hugoton Rty Tr Tex		Common Stock			—				12,362
		Human Genome Sciences Inc		Common Stock			—				50,429
		Huntington Bancshares Inc		Common Stock			—				25,926
		Hydrogenics Corporation		Common Stock			—				378
		Hyperdynamics Corp		Common Stock			—				12,740
		Iac/Interactivecrp		Common Stock			—				1,321
		IBM		Common Stock			—				3,221,144
		IBM		Common Stock			—				27,582
		ICG Group Inc		Common Stock			—				579
		Idearc Inc		Common Stock			—				—
		IGO Inc		Common Stock			—				39
		Illinois Tool Works		Common Stock			—				13,798
		Illumina Inc		Common Stock			—				635,353
		Imaging3 Inc		Common Stock			—				18,177
		Imation Corp		Common Stock			—				573
		Imax Corp		Common Stock			—				3,666
		Immunocellular Therapeutics Ltd		Common Stock			—				490
		Immunomedics Inc		Common Stock			—				3,330
		Incyte Genomics Inc		Common Stock			—				26,943
		Indevus Pharmaceuticals Inc		Common Stock			—				—
		India Globalization Cap Inc		Common Stock			—				2,890
		Indymac Bancorp Inc		Common Stock			—				—
		Infinera Corp		Common Stock			—				18,758
		Infosys Technologies Limited		Common Stock			—				2,569
		ING Prime Rate Tr		Common Stock			—				6,277
		Ingles Mkts Inc		Common Stock			—				15,060
		Inhibitex Inc		Common Stock			—				32,820
		Inovio Biomedical Corp		Common Stock			—				2,054
		Inplay Technologies Inc		Common Stock			—				—
		Insmed Incorporated		Common Stock			—				756
		Insys Therapeutics Inc		Common Stock			—				288

 

26

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Table of Contents

Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Intel Corp		Common Stock			—				135,002
		Intermune Inc		Common Stock			—				378
		International Game Technology		Common Stock			—				1,204
		International Tower Hill Mines		Common Stock			—				4,360
		Internet Holders		Common Stock			—				14,042
		Interoil Corp		Common Stock			—				19,429
		Interval Leisure Group Inc		Common Stock			—				163
		Intl Fuel Tech Inc		Common Stock			—				884
		Intl Speedway		Common Stock			—				1,014
		Intuitive Surgical Inc		Common Stock			—				926
		Invensense Inc		Common Stock			—				5,976
		Invesco Ltd		Common Stock			—				1,167,012
		Invesco Van Kampen Sr Ine		Common Stock			—				12,134
		Invo Bioscience Inc		Common Stock			—				20
		IPG Photonics Corp		Common Stock			—				6,435
		Ironwood Gold Corp		Common Stock			—				1,707
		Irvine Sensors Corp		Common Stock			—				60
		Ivanhoe Energy		Common Stock			—				7,616
		Ivax Diagnostics Inc		Common Stock			—				2,200
		JA Solar Hldgs Co Ltd		Common Stock			—				1,777
		Jabil Circuit Inc		Common Stock			—				19,713
		JDS Uniphase Corp		Common Stock			—				9,260
		Jensen Portfolio Inc		Common Stock			—				62,891
		Jetblue Awys Corp		Common Stock			—				11,180
		John Bean Technologies Corp		Common Stock			—				343
		Johnson & Johnson		Common Stock			—				152,466
		Johnson & Johnson		Common Stock			—				1,182,367
		Johnson & Johnson		Common Stock			—				1,736,297
		Johnson Controls		Common Stock			—				1,514,767
		Johnson Ctls Inc		Common Stock			—				38,773
		Joy Global Inc		Common Stock			—				5,623
		JPMorgan Chase & Co		Common Stock			—				2,259,946
		JPMorgan Chase & Co		Common Stock			—				50,028
		Juniper Networks Inc		Common Stock			—				48,372
		K Swiss Inc		Common Stock			—				5,840
		Kandi Technologies Corp		Common Stock			—				7,400
		KB Homes		Common Stock			—				8,569
		Keegan Res Inc		Common Stock			—				13,405
		Kellogg Company		Common Stock			—				14,296
		Kennametal Inc		Common Stock			—				6,099
		Keryx Biopharmaceuticals Inc		Common Stock			—				3,985
		Key Corp New		Common Stock			—				7,690
		Khd Humboldt Wedag Intl (Dt) Ag		Common Stock			—				2,229
		Kilroy Realty Corp		Common Stock			—				2,423
		Kimberly Clark Corp		Common Stock			—				29,424
		Kinder Morgan Energy Partners		Common Stock			—				265,284
		Kinder Morgan Mgmt		Common Stock			—				7,852
		Kinross Gold Corp		Common Stock			—				20,520
		Knightsbridge Tank		Common Stock			—				14,746

 

27

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Table of Contents

Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Kobex Minerals Inc		Common Stock			—				610
		Kodiak Oil & Gas Corp		Common Stock			—				30,400
		Kohl’s Corp		Common Stock			—				56,903
		Kraft Foods Inc		Common Stock			—				63,216
		Krispy Kreme Doughnuts Inc		Common Stock			—				6,540
		Kronos Worldwide Inc		Common Stock			—				75
		KV Pharmaceutical Co		Common Stock			—				1,029
		L-3 Communications Hldgs Inc		Common Stock			—				36,728
		Laboratory Corp of America Hldgs		Common Stock			—				17,194
		Lakes Entmt Inc		Common Stock			—				9,250
		LDK Solar Co Ltd		Common Stock			—				3,264
		Leap Wireless Intl Inc		Common Stock			—				—
		Legacy Resvs LP		Common Stock			—				2,823
		Lehman Bros Hldgs Corp		Common Stock			—				52
		Level 3 Communications Inc		Common Stock			—				5,658
		Liberator Med Hldgs Inc		Common Stock			—				618
		Life Technologies Corp		Common Stock			—				1,010,962
		Life Technologies Corp		Common Stock			—				3,891
		Lifeline Biotechnologies Inc		Common Stock			—				—
		Li-Ion Motors Corp		Common Stock			—				348
		Lilly Eli & Co		Common Stock			—				2,551
		Limelight Networks Inc		Common Stock			—				2,146
		Limited Brands Inc		Common Stock			—				10,088
		Linkedin Corp		Common Stock			—				659,770
		Linkedin Corp		Common Stock			—				945
		Linn Energy LLC		Common Stock			—				113,730
		Linux Gold Corp		Common Stock			—				150
		Live Nation Entertainment Inc		Common Stock			—				141
		Lloyds Banking Group		Common Stock			—				3,140
		Loral Space & Communcations Ltd		Common Stock			—				—
		Lowes Cos		Common Stock			—				34,730
		Lowes Cos		Common Stock			—				600,102
		Lowes Cos		Common Stock			—				1,070,625
		LPBP Inc		Common Stock			—				—
		LSI Logic Corp		Common Stock			—				541
		Lululemon Athletica		Common Stock			—				1,132,024
		Lumber Liquidators Hldgs Inc		Common Stock			—				20,397
		LVMH Moet Hennessy		Common Stock			—				352,417
		Lynas Corporation		Common Stock			—				536
		LyondellBasell		Common Stock			—				276,036
		LyondellBasell		Common Stock			—				16,245
		M2003 Plc Sponsored ADR		Common Stock			—				—
		Mahanagar Tel Nigam Ltd		Common Stock			—				161
		Mako Surgical Corp		Common Stock			—				7,563
		Mammoth Energy Group Inc New		Common Stock			—				—
		Manhattan Pharmaceuticals Inc		Common Stock			—				1
		Manhattan Scientific Inc		Common Stock			—				4,539
		Manitex Intl Inc		Common Stock			—				2,968
		Manitowoc Inc		Common Stock			—				1,746

 

28

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Table of Contents

Baxter International Inc. and Subsidiaries

Incentive Investment Plan

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Employer Identification Number: 36-0781620 and Plan Number 023

December 31, 2011

 

 

Identity of Issue				Description of Investment		Cost (1)				Current Value
		Mannkind Corp		Common Stock			—				26,250
		Marathon Oil Corp		Common Stock			—				41,980
		Marathon Oil Corp		Common Stock			—				547,961
		Marathon Petroleum Corp		Common Stock			—				198,970
		Marathon Petroleum Corp		Common Stock			—				23,852
		Markel Corp Hldg Co		Common Stock			—				34,832
		Marsh & McLennan Cos		Common Stock			—				1,033,970
		Masco Corp		Common Stock			—				4,978
		Mastercard Inc		Common Stock			—				3,292,719
		Mastercard Inc		Common Stock			—				29,826
		Maxwell Tech Inc		Common Stock			—				9,744
		McDonalds Corp		Common Stock			—				36,504
		McDonalds Corp		Common Stock			—				2,031,901
		Mead Johnson Nutrition Co		Common Stock			—				1,486,991
		Medclean Technologies Inc		Common Stock			—				240
		Medical Marijuana Inc		Common Stock			—				187
		Medicines Co		Common Stock			—				9,320
		Medtronic Inc		Common Stock			—				8,408
		Melco Pbl Entmnt Ltd		Common Stock			—				3,367
		Merck & Co Inc		Common Stock			—				1,443,215
		Merck & Co Inc		Common Stock			—				119,858
		Merge Healthcare Inc		Common Stock			—				2,425
		Metabolix Inc		Common Stock			—				2,275
		Metalico Inc		Common Stock			—				1,935
		MetLife Inc		Common Stock			—				942,574
		MetLife Inc		Common Stock			—				1,507,810
		MetLife Inc		Common Stock			—				312
		MFA Finl Inc		Common Stock			—				8,091
		MFC Industrial Ltd		Common Stock			—				720
		Mgic Invst Corp		Common Stock			—				41,969
		MGM Mirage		Common Stock			—				8,688
		Micro Imaging Technology Inc		Common Stock			—				120
		Micron Technology		Common Stock			—				629
		Microsoft Corp		Common Stock			—				107,958
		Microsoft Corp		Common Stock			—				1,146,384
		Microsoft Corp		Common Stock			—				2,551,794
		Microvision Inc		Common Stock			—				7,200
		Miller Energy Res Inc		Common Stock			—				29,295
		Miller Herman Inc		Common Stock			—				1,845
		Mindspeed Technologies Inc		Common Stock			—				27
		Minefinders Ltd Corp		Common Stock			—				10,600
		Mirant Corp		Common Stock			—				—
		Miravant Medical Technology		Common Stock			—				—
		Modern Energy Corp		Common Stock			—				20
		Molecular Insight Pharmaceuticals Inc		Common Stock			—				—
		Moly Corp Inc		Common Stock			—				2,878
		Momenta Pharmaceuticals Inc		Common Stock