Baxter International (BAX) 10-K 23 Feb 10 2009 FY Annual report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Billions, except Share data	12 Months Ended Dec. 31, 2009	Jan. 31, 2010	Jun. 30, 2009
Document and Company Information [Abstract]
Entity Registrant Name	BAXTER INTERNATIONAL INC
Entity Central Index Key	0000010456
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$32
Entity Common Stock, Shares Outstanding		602,667,572

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current Assets
Cash and equivalents	$2,786	$2,131
Accounts and other current receivables	2,302	1,980
Inventories	2,557	2,361
Short-term deferred income taxes	226	251
Prepaid expenses and other	400	425
Total current assets	8,271	7,148
Property, Plant and Equipment, Net	5,159	4,609
Other Assets
Goodwill	1,825	1,654
Other intangible assets, net	513	390
Other	1,586	1,604
Total other assets	3,924	3,648
Total assets	17,354	15,405
Current Liabilities
Short-term debt	29	388
Current maturities of long-term debt and lease obligations	682	6
Accounts payable and accrued liabilities	3,753	3,241
Total current liabilities	4,464	3,635
Long-Term Debt and Lease Obligations	3,440	3,362
Other Long-Term Liabilities	2,030	2,117
Equity
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares in 2009 and 2008	683	683
Common stock in treasury, at cost, 82,523,243 shares in 2009 and 67,501,988 shares in 2008	(4,741)	(3,897)
Additional contributed capital	5,683	5,533
Retained earnings	7,343	5,795
Accumulated other comprehensive loss	(1,777)	(1,885)
Total Baxter International Inc. (Baxter) shareholders' equity	7,191	6,229
Noncontrolling interests	229	62
Total equity	7,420	6,291
Total liabilities and equity	$17,354	$15,405

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Equity
Common stock, par value	1	1
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	683,494,944	683,494,944
Treasury stock, shares	82,523,243	67,501,988

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Statements of Income [Abstract]
Net sales	$12,562	$12,348	$11,263
Cost of sales	6,037	6,218	5,744
Gross margin	6,525	6,130	5,519
Marketing and administrative expenses	2,731	2,698	2,521
Research and development expenses	917	868	760
Restructuring charge			70
Net interest expense	98	76	22
Other expense, net	45	26	18
Income before income taxes	2,734	2,462	2,128
Income tax expense	519	437	407
Net income	2,215	2,025	1,721
Less: Net income attributable to noncontrolling interests	10	11	14
Net income attributable to Baxter	$2,205	$2,014	$1,707
Net income attributable to Baxter per common share
Basic	3.63	3.22	2.65
Diluted	3.59	3.16	2.61
Weighted-average number of common shares outstanding
Basic	607	625	644
Diluted	614	637	654
Cash dividends declared per common share	1.07	0.913	0.72

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash Flows from Operations
Net income	$2,215	$2,025	$1,721
Adjustments
Depreciation and amortization	638	631	581
Deferred income taxes	267	280	126
Stock compensation	140	146	136
Realized excess tax benefits from stock issued under employee benefit plans	(96)	(112)
Infusion pump charges	27	125
Exit and other charges	133	31	70
Acquired in-process research and development		19	61
Average wholesale pricing litigation charge			56
Other	1	40	(19)
Changes in balance sheet items
Accounts and other current receivables	(167)	(98)	(278)
Inventories	(60)	(163)	(211)
Accounts payable and accrued liabilities	(85)	(239)	1
Restructuring payments	(45)	(50)	(27)
Other	(59)	(120)	88
Cash flows from operations	2,909	2,515	2,305
Cash Flows from Investing Activities
Capital expenditures (including additions to the pool of equipment placed with or leased to customers of $119 in 2009, $146 in 2008 and $166 in 2007)	(1,014)	(954)	(692)
Acquisitions of and investments in businesses and technologies	(156)	(99)	(112)
Divestitures and other	24	60	499
Cash flows from investing activities	(1,146)	(993)	(305)
Cash Flows from Financing Activities
Issuances of debt	872	671	584
Payments of obligations	(199)	(950)	(635)
(Decrease) increase in debt with original maturities of three months or less, net	(200)	200
Cash dividends on common stock	(632)	(546)	(704)
Proceeds and realized excess tax benefits from stock issued under employee benefit plans	381	680	639
Purchases of treasury stock	(1,216)	(1,986)	(1,855)
Other	(18)
Cash flows from financing activities	(1,012)	(1,931)	(1,971)
Effect of Foreign Exchange Rate Changes on Cash and Equivalents	(96)	1	25
Increase (Decrease) in Cash and Equivalents	655	(408)	54
Cash and Equivalents at Beginning of Year	2,131	2,539	2,485
Cash and Equivalents at End of Year	2,786	2,131	2,539
Other supplemental information
Interest paid, net of portion capitalized	113	159	119
Income taxes paid	$246	$247	$304

1_Consolidated Statements of Ca

Consolidated Statements of Cash Flows (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash Flows from Investing Activities
Additions to the pool of equipment placed with or leased to customers	$119	$146	$166

Consolidated Statements of Chan

Consolidated Statements of Changes In Equity and Comprehensive Income (USD $)
In Millions	Dec. 31, 2009 Common Stock	Dec. 31, 2008 Common Stock	Dec. 31, 2007 Common Stock	Dec. 31, 2006 Common Stock	12 Months Ended Dec. 31, 2009 Additional Contributed Capital	12 Months Ended Dec. 31, 2008 Additional Contributed Capital	12 Months Ended Dec. 31, 2007 Additional Contributed Capital	12 Months Ended Dec. 31, 2009 Common Stock in Treasury	12 Months Ended Dec. 31, 2008 Common Stock in Treasury	12 Months Ended Dec. 31, 2007 Common Stock in Treasury	Dec. 31, 2006 Common Stock in Treasury	12 Months Ended Dec. 31, 2009 Retained Earnings	12 Months Ended Dec. 31, 2008 Retained Earnings	12 Months Ended Dec. 31, 2007 Retained Earnings	12 Months Ended Dec. 31, 2009 Accumulated Other Comprehensive Loss	12 Months Ended Dec. 31, 2008 Accumulated Other Comprehensive Loss	12 Months Ended Dec. 31, 2007 Accumulated Other Comprehensive Loss	12 Months Ended Dec. 31, 2009 Noncontrolling Interests	12 Months Ended Dec. 31, 2008 Noncontrolling Interests	12 Months Ended Dec. 31, 2007 Noncontrolling Interests	12 Months Ended Dec. 31, 2009 Comprehensive Income	12 Months Ended Dec. 31, 2008 Comprehensive Income	12 Months Ended Dec. 31, 2007 Comprehensive Income
Beginning of year					$5,533	$5,297	$5,177	($3,897)	($2,503)	($1,433)		$5,795	$4,379	$3,271	($1,885)	($940)	($1,426)	$62	$91	$79
Beginning of year, Shares								68	50	33
Purchases of common stock								(1,216)	(1,986)	(1,855)
Purchases of common stock, shares								23	32	34
Stock issued under employee benefit plans and other								372	592	785
Stock issued under employee benefit plans and other,shares								(8)	(14)	(17)
Stock issued under employee benefit plans and other					150	236	120
Net income attributable to Baxter												2,205	2,014	1,707
Cash dividends declared on common stock												(648)	(571)	(463)
Stock issued under employee benefit plans and other												(9)		(136)
Net income attributable to noncontrolling interests																		10	11	14
Other comprehensive income (loss) attributable to Baxter															108	(957)	486
Adjustment to change measurement date for certain employee benefit plans, net of tax benefit of ($15)													(27)
Adjustment to change measurement date for certain employee benefit plans, net of tax expense of $8																12
Other comprehensive income (loss) attributable to noncontrolling interests																		3	(14)	12
Additions (reductions) in noncontrolling ownership interests, net																		160	(20)	(7)
Other activity with noncontrolling interests																		(6)	(6)	(7)
End of year	683	683	683	683	5,683	5,533	5,297	(4,741)	(3,897)	(2,503)	(1,433)	7,343	5,795	4,379	(1,777)	(1,885)	(940)	229	62	91
End of year, Shares	683	683	683	683				83	68	50	33
Comprehensive Income
Net income																					2,215	2,025	1,721
Other comprehensive income (loss), net of tax:
Currency translation adjustments, net of tax expense (benefit) of $98 in 2009, ($125) in 2008 and $89 in 2007																					197	(370)	259
Pension and other employee benefits, net of tax (benefit) expense of $(18) in 2009, ($319) in 2008 and $144 in 2007																					(54)	(591)	266
Hedges of net investments in foreign operations, net of tax benefit of ($19) in 2008 and ($27) in 2007																						(33)	(48)
Other hedging activities, net of tax (benefit) expense of ($1) in 2009, $2 in 2008 and $6 in 2007																					(36)	25	23
Marketable equity securities, net of tax expense of $2 in 2009 and tax benefit of ($1) in each of 2008 and 2007																					4	(2)	(2)
Total other comprehensive income (loss), net of tax																					111	(971)	498
Comprehensive income																					2,326	1,054	2,219
Less: Comprehensive income (loss) attributable to noncontrolling interests																					13	(3)	26
Comprehensive income attributable to Baxter																					$2,313	$1,057	$2,193

2_Consolidated Statements of Ch

Consolidated Statements of Changes In Equity and Comprehensive Income (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Retained Earnings
Other comprehensive income (loss), net of tax:
Tax (benefit) expense on adjustment to change measurement date for certain employee benefit plans		($15)
Accumulated Other Comprehensive Loss
Other comprehensive income (loss), net of tax:
Tax (benefit) expense on adjustment to change measurement date for certain employee benefit plans		8
Comprehensive Income
Other comprehensive income (loss), net of tax:
Tax expense (benefit) on currency translation adjustments	98	(125)	89
Tax (benefit) expense on pension and other employee benefits	(18)	(319)	144
Tax benefit on hedges of net investments in foreign operations		(19)	(27)
Tax (benefit) expense on other hedging activities	(1)	2	6
Tax expense (benefit) on marketable equity securities	$2	($1)	($1)

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Baxter International Inc. (Baxter or the company) develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide. The company operates in three segments, which are described in Note12. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles (GAAP) requires the company to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. Basis of Consolidation The consolidated financial statements include the accounts of Baxter and its majority-owned subsidiaries, any minority-owned subsidiaries that Baxter controls, and variable interest entities (VIEs) in which Baxter is the primary beneficiary, after elimination of intercompany transactions. Revenue Recognition The company recognizes revenues from product sales and services when earned. Specifically, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred (or services have been rendered), the price is fixed or determinable, and collectibility is reasonably assured. For product sales, revenue is not recognized until title and risk of loss have transferred to the customer. The shipping terms for the majority of the companys revenue arrangements are FOB destination. The recognition of revenue is delayed if there are significant post-delivery obligations, such as training, installation or other services. Provisions for discounts, rebates to customers, chargebacks to wholesalers and returns are provided for at the time the related sales are recorded, and are reflected as a reduction of net sales. The company sometimes enters into arrangements in which it commits to delivering multiple products or services to its customers. In these cases, total arrangement consideration is allocated to the deliverables based on their relative selling prices. Then the allocated consideration is recognized as revenue in accordance with the principles described above. Selling prices are determined by applying a selling price hierarchy. Selling prices are determined using vendor specific objective evidence (VSOE), if it exists. Otherwise, selling prices are determined using third party evidence (TPE). If neither VSOE nor TPE is available, the company uses its best estimate of selling prices. Allowance for Doubtful Accounts In the normal course of business, the company provides credit to its customers, performs credit evaluations of these customers and maintains reserves for potential credit losses. In determining the amount of the allowance for doubtful accounts, the company considers, among other items, historical credit losses, the past due status of receivables, payment histo

Supplemental Financial Informat

Supplemental Financial Information
	12 Months Ended Dec. 31, 2009 USD / shares
Supplemental Financial Information [Abstract]
SUPPLEMENTAL FINANCIAL INFORMATION	NOTE2 SUPPLEMENTAL FINANCIAL INFORMATION Goodwill and Other Intangible Assets Goodwill The following is a summary of the activity in goodwill by segment. Medication (in millions) BioScience Delivery Renal Total December31, 2007 $ 587 $ 948 $ 155 $ 1,690 Additions 11 13 8 32 CTA (13 ) (44 ) (11 ) (68 ) December31, 2008 585 917 152 1,654 Additions 89 29 118 CTA 10 37 6 53 December31, 2009 $ 595 $ 1,043 $ 187 $ 1,825 Additional goodwill recognized in 2009 principally related to the consolidation of SIGMA within the Medication Delivery segment and the acquisition of Edwards CRRT within the Renal segment. See Note4 for further information regarding SIGMA and Edwards CRRT. As of December31, 2009, there were no accumulated goodwill impairment losses. Other Intangible Assets, Net Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. Intangible assets with indefinite useful lives are not material to the company. The following is a summary of the companys intangible assets subject to amortization. Developed technology, (in millions) including patents Other Total December31, 2009 Gross other intangible assets $ 904 $ 125 $ 1,029 Accumulated amortization (489 ) (58 ) (547 ) Other intangible assets, net $ 415 $ 67 $ 482 December31, 2008 Gross other intangible assets $ 777 $ 117 $ 894 Accumulated amortization (444 ) (67 ) (511 ) Other intangible assets, net $ 333 $ 50 $ 383 The amortization expense for intangible assets was $63million in 2009, $53million in 2008 and $57million in 2007. At December31, 2009, the anticipated annual amortization expense for intangible assets recorded as of December31, 2009 is $66million in 2010, $62million in 2011, $59million in 2012, $56million in 2013 and $52million in 2014. Other Long-Term Assets as of December31 (in millions) 2009 2008 Deferred income taxes $ 1,095 $ 1,132 Insurance receivables 49 58 Other long-term receivables 66 87 Other 376 327 Other long-term assets $ 1,586 $ 1,604 Accounts Payable and Accrued Liabilities as of December31 (in millions) 2009 2008 Accounts payable, principally trade $ 807 $ 829 Income taxes payable

Sale of Transfusion Therapies B

Sale of Transfusion Therapies Business
	12 Months Ended Dec. 31, 2009 USD / shares
Sale of Transfusion Therapies Business [Abstract]
SALE OF TRANSFUSION THERAPIES BUSINESS	NOTE3 SALE OF TRANSFUSION THERAPIES BUSINESS On February28, 2007, the company divested substantially all of the assets and liabilities of its Transfusion Therapies (TT) business to an affiliate of TPG Capital, L.P. (TPG) for $540million. TPG acquired the net assets of the TT business, including its product portfolio of manual and automated blood-collection products and storage equipment, as well as five manufacturing facilities, and established the new company as Fenwal Inc. (Fenwal). Cash proceeds were $473million, representing the $540million net of certain items, principally international receivables that were retained by the company post-divestiture. During 2007, the company recorded a net gain on the sale of the TT business of $58million. Of the net cash proceeds, $52million was allocated to transition agreements to provide post-divestiture manufacturing, distribution and support services to Fenwal because these agreements provide for below-market consideration for those services. In 2008, the company recorded an income adjustment to the gain of $16million as a result of the finalization of the net assets transferred in the divestiture. In connection with the TT divestiture, the company recorded a $35million charge in 2007 principally associated with severance and other employee-related costs. Reserve utilization through December31, 2009 was $25million. The reserve is expected to be substantially utilized by the end of 2010. TT business sales included in the BioScience segment totaled $79million in 2007 through the February 28 sale date. Post-divestiture revenue associated with the transition agreements with Fenwal totaled $74million, $174million and $144million in 2009, 2008 and 2007, respectively. Included in the post-divestiture revenue were $3million, $25million and $23million in 2009, 2008 and 2007, respectively, of deferred revenue related to the transition agreements, and as of December31, 2009, substantially all of the deferred revenue has been recognized. The gain on the sale of the TT business and the related charges and adjustments were recorded in other expense, net in the consolidated statements of income. These amounts along with the post-divestiture revenues were reported at the corporate headquarters level and were not allocated to a segment.

Acquisitions of and Investments

Acquisitions of and Investments in Businesses and Technologies
	12 Months Ended Dec. 31, 2009 USD / shares
Acquisitions of and Investments in Businesses and Technologies [Abstract]
ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES AND TECHNOLOGIES	NOTE4 ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES AND TECHNOLOGIES In 2009, 2008 and 2007, cash outflows related to the acquisitions of and investments in businesses and technologies totaled $156million, $99million and $112million, respectively. The following are the more significant acquisitions and investments, including licensing agreements that require significant contingent milestone payments, entered into in 2009, 2008 and 2007. 2009 SIGMA In April 2009, the company entered into an exclusive three-year distribution agreement with SIGMA covering the United States and international markets. The agreement, which enables Baxter to immediately provide SIGMAs SPECTRUM large volume infusion pumps to customers, as well as future products under development, complements Baxters infusion systems portfolio and next generation technologies. The arrangement also included a 40% equity stake in SIGMA, and an option to purchase the remaining equity of SIGMA, exercisable at any time over a three-year term. The arrangement included a $100million up-front payment and additional payments of up to $130million for the exercise of the purchase option as well as for SIGMAs achievement of specified regulatory and commercial milestones. Because Baxters option to purchase the remaining equity of SIGMA limits the ability of the existing equity holders to participate significantly in SIGMAs profits and losses, and because the existing equity holders have the ability to make decisions about SIGMAs activities that have a significant effect on SIGMAs success, the company concluded that SIGMA is a VIE. Baxter is the primary beneficiary of the VIE due to its exposure to the majority of SIGMAs expected losses or expected residual returns and the relationship between Baxter and SIGMA created by the exclusive distribution agreement, and the significance of that agreement. Accordingly, the company consolidated the financial statements of SIGMA beginning in April 2009 (the acquisition date), with the fair value of the equity owned by the existing SIGMA equity holders reported as noncontrolling interests. The creditors of SIGMA do not have recourse to the general credit of Baxter. The following table summarizes the preliminary allocation of fair value related to the arrangement at the acquisition date. (in millions) Assets Goodwill $ 87 IPRD 24 Other intangible assets 94 Purchase option (other long-term assets) 111 Other assets 30 Liabilities Contingent payments 62 Other liabilities 25 Noncontrolling interests 159 The amount allocated to IPRD is being accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation. The other intangible assets primarily relate to developed technology and are being amortized on a straight-line basis over an estimated average useful life of eight years. The fair value of the purchase option was estimated using the Black-Scholes model, and the fair value of the noncontrolling interests was estimated using a dis

Infusion Pump, Exit and Other C

Infusion Pump, Exit and Other Charges
	12 Months Ended Dec. 31, 2009 USD / shares
Infusion Pump, Exit and Other Charges [Abstract]
INFUSION PUMP, EXIT AND OTHER CHARGES	NOTE5 INFUSION PUMP, EXIT AND OTHER CHARGES Baxter has made and continues to make significant investments in assets, including inventory and PPE, which relate to potential new products or modifications to existing products. The companys ability to realize value from these investments is contingent on, among other things, regulatory approval and market acceptance of these new products. The company may not be able to realize the expected returns from these investments, potentially resulting in asset impairments in the future. Infusion Pump Charges The company remains in active dialogue with the FDA regarding various matters with respect to the companys COLLEAGUE infusion pumps, including the companys remediation plan and reviews of the companys facilities, processes and quality controls by the companys outside expert pursuant to the requirements of the companys Consent Decree. The outcome of these discussions with the FDA is uncertain and may impact the nature and timing of the companys actions and decisions with respect to the COLLEAGUE pump. The companys estimates of the costs related to these matters are based on the current remediation plan and information currently available. It is possible that substantial additional charges, including significant asset impairments, related to COLLEAGUE may be required in future periods, based on new information, changes in estimates, and modifications to the current remediation plan. While the company continues to work to resolve the issues associated with COLLEAGUE infusion pumps, there can be no assurance that additional costs or civil and criminal penalties will not be incurred, that additional regulatory actions with respect to the company will not occur, that the company will not face civil claims for damages from purchasers or users, that substantial additional charges or significant asset impairments may not be required, that sales of any other product may not be adversely affected, or that additional legislation or regulation will not be introduced that may adversely affect the companys operations and consolidated financial statements. COLLEAGUE and SYNDEO Infusion Pumps The company recorded charges and other costs of $27million, $125million, $14million, $94million and $77million in 2009, 2008, 2007, 2006 and 2005, respectively, related to issues associated with its COLLEAGUE and SYNDEO infusion pumps. The company stopped shipment of COLLEAGUE infusion pumps in July 2005 in the United States. Following a number of ClassI recalls (recalls at the highest priority level for the FDA) relating to the performance of the pumps, as well as the seizure litigation described in Note11, the company entered into a Consent Decree in June 2006. Additional ClassI recalls related to remediation and repair and maintenance activities were addressed by the company in 2007 and 2009. The Consent Decree provides for reviews of the companys facilities, processes and controls by the companys outside expert, followed by the FDA. In December 2007, following the outside experts review, the FDA conducted its inspection and remains in a dialogue with the company with respect to observat

Debt, Credit Facilities, and Co

Debt, Credit Facilities, and Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Debt, Credit Facilities, and Commitments and Contingencies [Abstract]
DEBT, CREDIT FACILITIES, AND COMMITMENTS AND CONTINGENCIES	NOTE6 DEBT, CREDIT FACILITIES, AND COMMITMENTS AND CONTINGENCIES Debt Outstanding At December31, 2009 and 2008, the company had the following debt outstanding. Effective as of December31 (in millions) interest rate1 20092 20082 4.75%notes due 2010 4.9% $ 500 $ 499 Variable-rate loan due 2010 0.8% 180 177 Variable-rate loan due 2012 0.6% 157 155 4.0%notes due 2014 4.2% 350 4.625%notes due 2015 4.8% 641 675 5.9%notes due 2016 6.0% 615 661 5.375%notes due 2018 5.5% 499 499 4.5%notes due 2019 4.7% 498 6.625%debentures due 2028 6.7% 136 154 6.25%notes due 2037 6.3% 499 499 Other 47 49 Total debt and capital lease obligations 4,122 3,368 Current portion (682) (6) Long-term portion $ 3,440 $ 3,362 1 Excludes the effect of related interest rate swaps, as applicable. 2 Book values include discounts, premiums and adjustments related to hedging instruments, as applicable. In addition, as further discussed below, the company had short-term debt totaling $29million at December31, 2009 and $388million at December31, 2008. Significant Debt Issuances In February 2009, the company issued $350million of senior unsecured notes, maturing in March 2014 and bearing a 4.0% coupon rate. In August 2009, the company issued $500million of senior unsecured notes, maturing in August 2019 and bearing a 4.5% coupon rate. In May 2008, the company issued $500million of senior unsecured notes, maturing in June 2018 and bearing a 5.375% coupon rate. In December 2007, the company issued $500million of senior unsecured notes, maturing in December 2037, and bearing a 6.25% coupon rate. The notes are redeemable, in whole or in part, at the companys option, subject to a make-whole redemption premium. In addition, during 2008, the company issued commercial paper, of which $200million was outstanding as of December31, 2008, with a weighted-average interest rate of 2.55%. There was no commercial paper outstanding as of December31, 2009. The net proceeds of the debt issuances noted above were used for general corporate purposes, including the repayment of $200million of outstanding commercial paper in 2009 and for the settlement of cross-currency swaps in 2008. See Note7 for further information regarding the settlement of cross-currency swaps. The debt instruments include certain covenants, including restrictions relating to the companys creation of secured debt. Future Minimum Lease Payments and Debt Maturities Debt maturities Operating and capital as of and for the years ended December31 (in millions) leases leases 2010 $ 163 $ 682 2011 138 7 2012 115

Financial Instruments and Relat

Financial Instruments and Related Fair Value Measurements
	12 Months Ended Dec. 31, 2009 USD / shares
Financial Instruments and Related Fair Value Measurements [Abstract]
FINANCIAL INSTRUMENTS AND RELATED FAIR VALUE MEASUREMENTS	NOTE7 FINANCIAL INSTRUMENTS AND RELATED FAIR VALUE MEASUREMENTS Receivable Securitizations Where economical, the company has entered into agreements with various financial institutions in which the entire interest in and ownership of the receivable is sold, principally consisting of trade receivables originated in Japan. The company had also entered into agreements in which undivided interests in certain pools of receivables were sold, principally consisting of hardware lease receivables originated in the United States and trade receivables originated in Europe. In November 2007, the company purchased the third party interest in the previously sold receivables under the companys European securitization facility, resulting in a net cash outflow of $157million, consisting of $225million of receivables and $68million of retained interests. The $157million net cash outflow was classified as an investing activity in the consolidated statement of cash flows. Subsequent cash collections from customers relating to these receivables are also classified in the investing section of the consolidated statements of cash flows, and totaled $14 million, $46million and $161million for the years ended 2009, 2008 and 2007, respectively. The European facility matured in November 2007 and was not renewed. The U.S.securitization facility matured in December 2007 and was not renewed. The company continues to service the receivables in its Japanese securitization arrangements. Servicing assets or liabilities are not recognized because the company receives adequate compensation to service the sold receivables. The Japanese securitization arrangement includes limited recourse provisions, which are not material. The securitization arrangements resulted in net cash outflows of $7million, $3million and $240million (of which $225million was classified as an investing activity and $15million as an operating activity in the consolidated statement of cash flows) in 2009, 2008 and 2007, respectively. A summary of the securitization activity is as follows. as of and for the years ended December31 (in millions) 2009 2008 2007 Sold receivables at beginning of year $ 154 $ 129 $ 348 Proceeds from sales of receivables 535 467 1,395 Purchase of interest in receivables in the European securitization facility (225 ) Cash collections (remitted to the owners of the receivables) (542 ) (470 ) (1,410 ) Foreign exchange 28 21 Sold receivables at end of year $ 147 $ 154 $ 129 The net gains and losses relating to the sales of receivables were immaterial for each year. Concentrations of Risk The company invests excess cash in certificates of deposit or money market funds and diversifies the concentration of cash among different financial institutions. With respect to financial instruments, where appropriate, the company has diversified its selection of counterparties, and has arranged colla

Common and Preferred Stock

Common and Preferred Stock
	12 Months Ended Dec. 31, 2009 USD / shares
Common and Preferred Stock [Abstract]
COMMON AND PREFERRED STOCK	NOTE8 COMMON AND PREFERRED STOCK Stock-Based Compensation The companys stock-based compensation generally includes stock options, performance share units (PSUs), restricted stock units (RSUs) and purchases under employee stock purchase plans. Shares issued relating to the companys stock-based plans are generally issued out of treasury stock. As of December31, 2009, approximately 28million authorized shares are available for future awards under the companys stock-based compensation plans. The following is a summary of the companys significant stock compensation plans. Stock Compensation Expense Stock compensation expense recognized in the consolidated statements of income was $140million, $146million and $136million in 2009, 2008 and 2007, respectively. The related tax benefit recognized was $40million, $46million and $46million in 2009, 2008 and 2007, respectively. Stock compensation expense is recorded at the corporate level and is not allocated to a segment. Approximately three-quarters of stock compensation expense is classified in marketing and administrative expenses, with the remainder classified in cost of sales and RD expenses. Costs capitalized in the consolidated balance sheet at December31, 2009 were not significant. Stock compensation expense is based on awards expected to vest, and therefore has been reduced by estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised in subsequent periods, if necessary, if actual forfeitures differ from those estimates. Stock Options Stock options are granted to employees and non-employee directors with exercise prices at least equal to 100% of the market value on the date of grant. Beginning in 2007, stock options granted generally vest in one-third increments over a three-year period. Options granted prior to 2007 generally cliff-vest 100% three years from the grant date. Stock options granted to non-employee directors generally cliff-vest 100% one year from the grant date. Stock options granted typically have a contractual term of 10years. The grant-date fair value, adjusted for estimated forfeitures, is recognized as expense on a straight-line basis over the substantive vesting period. The fair value of stock options is determined using the Black-Scholes model. The weighted-average assumptions used in estimating the fair value of stock options granted during each year, along with the weighted-average grant-date fair values, were as follows. years ended December 31 2009 2008 2007 Expected volatility 30% 24% 23% Expected life (in years) 4.5 4.5 4.5 Risk-free interest rate 1.8% 2.4% 4.5% Dividend yield 2.0% 1.5% 1.2% Fair value per stock option $12 $12 $13 The companys expected volatility assumption is based on an equal weighting of the historical volatility of Baxters stock and the implied volatility from traded options on Baxters stock. The expected life assumption is primarily based on the v

Retirement and Other Benefit Pr

Retirement and Other Benefit Programs
	12 Months Ended Dec. 31, 2009 USD / shares
Retirement and Other Benefit Programs [Abstract]
RETIREMENT AND OTHER BENEFIT PROGRAMS	NOTE9 RETIREMENT AND OTHER BENEFIT PROGRAMS The company sponsors a number of qualified and nonqualified pension plans for eligible employees. The company also sponsors certain unfunded contributory healthcare and life insurance benefits for substantially all domestic retired employees. As required by a new accounting standard, on December31, 2008, the company changed the measurement date for its defined benefit pension and other postemployment benefit (OPEB) plans from September 30 to December31, the companys fiscal year-end. The company elected to use the 15-month remeasurement approach, whereby a net-of-tax decrease to retained earnings of $27million was recognized on December31, 2008 equal to three-fifteenths of the net cost determined for the period from September30, 2007 to December31, 2008. The adjustment resulted in a net-of-tax increase to AOCI of $12million. The remaining twelve-fifteenths of the net cost was recognized as expense in 2008 as part of the net periodic benefit cost. Reconciliation of Pension and OPEB Plan Obligations, Assets and Funded Status The benefit plan information in the table below pertains to all of the companys pension and OPEB plans, both in the United States and in other countries. Pension benefits OPEB as of and for the years ended December31 (in millions) 2009 2008 2009 2008 Benefit obligations Beginning of period $ 3,475 $ 3,307 $ 477 $ 479 Effect of eliminating early measurement date 39 3 Service cost 87 86 5 5 Interest cost 219 202 30 30 Participant contributions 8 8 13 12 Actuarial loss (gain) 268 53 24 (17 ) Benefit payments (151 ) (153 ) (33 ) (35 ) Foreign exchange and other 59 (67 ) (10 ) End of period 3,965 3,475 506 477 Fair value of plan assets Beginning of period 2,381 2,998 Effect of eliminating early measurement date 33 Actual return on plan assets 377 (744 ) Employer contributions 170 287 20 23 Participant contributions 8 8 13 12 Benefit payments (151 ) (153 ) (33 ) (35 ) Foreign exchange and other 37 (48 ) End of period 2,822 2,381 Funded status at December 31 $ (1,143 ) $ (1,094 ) $ (506 ) $ (477 ) Amounts recognized in the consolidated balance sheets Noncurrent

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes [Abstract]
INCOME TAXES	NOTE10 INCOME TAXES Income Before Income Tax Expense by Category years ended December31 (in millions) 2009 2008 2007 United States $ 445 $ 262 $ 96 International 2,289 2,200 2,032 Income before income taxes $ 2,734 $ 2,462 $ 2,128 Income Tax Expense years ended December31 (in millions) 2009 2008 2007 Current United States Federal $ 67 $ $ 7 State and local (4 ) 2 1 International 189 155 273 Current income tax expense 252 157 281 Deferred United States Federal 186 174 196 State and local 24 29 24 International 57 77 (94 ) Deferred income tax expense 267 280 126 Income tax expense $ 519 $ 437 $ 407 Deferred Tax Assets and Liabilities as of December31 (in millions) 2009 2008 Deferred tax assets Accrued expenses $ 173 $ 190 Retirement benefits 570 549 Alternative minimum tax credit 67 71 Tax credits and net operating losses 254 433 Asset basis differences 46 Valuation allowances (144 ) (140 ) Total deferred tax assets 920 1,149 Deferred tax liabilities Subsidiaries unremitted earnings 177 159 Asset basis differences 31 Other 5 21 Total deferred tax liabilities 213 180 Net deferred tax asset $ 707 $ 969 At December31, 2009, the company had U.S.operating loss carryforwards totaling $14million and foreign tax credit carryforwards totaling $84million. The operating loss carryforwards expire between 2020 and 2022. The foreign tax credits principally expire in 2018. At December31, 2009, the company had foreign net operating loss carryforwards totaling $554million. Of this amount, $35million expires in 2010, $7million expires in 2011, $7million expires in 2012, $12million expires in 2013, $12million expires in 2014, $5million expires in 2015, $37million expires after 2015 and $439million has no expiration date. Realization of these operating loss and tax credit carryforwards depends on generating sufficient taxable income in future periods. A valuation allowance of $144million and $140million was recorded at December31, 2009 and December31, 2008, respectively, to reduce the deferred tax assets associated with net operating loss and tax credit carryforwards, as well as amortizable assets in loss entities, because the comp

Legal Proceedings

Legal Proceedings
	12 Months Ended Dec. 31, 2009 USD / shares
Legal Proceedings [Abstract]
LEGAL PROCEEDINGS	NOTE11 LEGAL PROCEEDINGS Baxter is involved in product liability, patent, commercial, and other legal proceedings that arise in the normal course of the companys business. The company records a liability when a loss is considered probable and the amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate, the minimum amount in the range is accrued. If a loss is not probable or a probable loss cannot be reasonably estimated, no liability is recorded. Baxter has established reserves for certain of the matters discussed below. The company is not able to estimate the amount or range of any loss for certain of the legal contingencies for which there is no reserve or additional loss for matters already reserved. While the liability of the company in connection with the claims cannot be estimated with any certainty and although the resolution in any reporting period of one or more of these matters could have a significant impact on the companys results of operations and cash flows for that period, the outcome of these legal proceedings is not expected to have a material adverse effect on the companys consolidated financial position. While the company believes that it has valid defenses in these matters, litigation is inherently uncertain, excessive verdicts do occur, and the company may in the future incur material judgments or enter into material settlements of claims. In addition to the matters described below, the company remains subject to other potential administrative and legal actions. With respect to regulatory matters, these actions may lead to product recalls, injunctions to halt manufacture and distribution, and other restrictions on the companys operations and monetary sanctions. With respect to intellectual property, the company may be exposed to significant litigation concerning the scope of the companys and others rights. Such litigation could result in a loss of patent protection or the ability to market products, which could lead to a significant loss of sales, or otherwise materially affect future results of operations. Patent Litigation Sevoflurane Litigation Since 2000, Baxters generic sevoflurane has been the subject of several patent infringement actions initiated by Abbott Laboratories and Central Glass Company. The initial lawsuit in the United States was resolved in Baxters favor in 2007 by the Court of Appeals for the Federal Circuits decision that the asserted patent was invalid. In 2009, a lawsuit filed in Japan was also resolved in Baxters favor by the appellate courts determination that Baxters generic sevoflurane did not infringe the Japanese patent at issue. Related actions remain pending in the U.S.and Colombia. A patent infringement action is pending in the U.S.D.C. for the Northern District of Illinois on a second patent owned by Abbott and Central Glass. In September 2009, the District Court granted summary judgment of non-infringement in favor of Baxter. Abbott has requested reconsideration of this ruling. In 2007, Abbott brought a patent infringement action against Baxter in the Cali Circ

Segment Information

Segment Information
	12 Months Ended Dec. 31, 2009 USD / shares
Segment Information [Abstract]
SEGMENT INFORMATION	NOTE12 SEGMENT INFORMATION Baxter operates in three segments, each of which is a strategic business that is managed separately because each business develops, manufactures and markets distinct products and services. The segments and a description of their products and services are as follows: The BioScience business processes recombinant and plasma-based proteins to treat hemophilia and other bleeding disorders; plasma-based therapies to treat immune deficiencies, alpha 1-antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions; products for regenerative medicine, such as biosurgery products; and vaccines. The Medication Delivery business manufactures intravenous (IV)solutions and administration sets, premixed drugs and drug-reconstitution systems, pre-filled vials and syringes for injectable drugs, IV nutrition products, infusion pumps, and inhalation anesthetics, as well as products and services related to pharmacy compounding, drug formulation and packaging technologies. The Renal business provides products to treat end-stage renal disease, or irreversible kidney failure. The business manufactures solutions and other products for peritoneal dialysis, a home-based therapy, and also distributes products for hemodialysis, which is generally conducted in a hospital or clinic. The company uses more than one measurement and multiple views of data to measure segment performance and to allocate resources to the segments. However, the dominant measurements are consistent with the companys consolidated financial statements and, accordingly, are reported on the same basis in this report. The company evaluates the performance of its segments and allocates resources to them primarily based on pre-tax income along with cash flows and overall economic returns. Intersegment sales are generally accounted for at amounts comparable to sales to unaffiliated customers, and are eliminated in consolidation. The accounting policies of the segments are substantially the same as those described in the summary of significant accounting policies in Note1. Certain items are maintained at the corporate level (Corporate) and are not allocated to a segment. They primarily include most of the companys debt and cash and equivalents and related net interest expense, certain foreign exchange fluctuations (principally relating to intercompany receivables, payables and loans denominated in a foreign currency) and the majority of the foreign currency hedging activities, corporate headquarters costs, stock compensation expense, certain non-strategic investments and related income and expense, certain employee benefit plan costs, certain nonrecurring gains and losses, certain IPRD charges, certain other charges (such as cost optimization, restructuring and certain litigation-related charges), deferred income taxes, certain litigation liabilities and related insurance receivables, and the revenues and costs related to the manufacturing, distribution and other transition agreements with Fenwal. All of the companys Other net sales in the table below relate to the agreements with Fenwal. With respect to deprecia

Quarterly Financial Results and

Quarterly Financial Results and Market for the Companys Stock (Unaudited)
	12 Months Ended Dec. 31, 2009 USD / shares
Quarterly Financial Results and Market for the Company's Stock (Unaudited) [Abstract]
QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANY'S STOCK (UNAUDITED)	NOTE13 QUARTERLY FINANCIAL RESULTS AND MARKET FOR THE COMPANYS STOCK (UNAUDITED) First Second Third Fourth Full years ended December31 (in millions, except per share data) quarter quarter quarter quarter year 2009 Net sales $ 2,824 $ 3,123 $ 3,145 $ 3,470 $ 12,562 Gross margin 1,488 1,638 1,632 1,767 6,525 Net income attributable to Baxter1 516 587 530 572 2,205 Earnings per common share1 Basic 0.84 0.97 0.88 0.95 3.63 Diluted 0.83 0.96 0.87 0.94 3.59 Dividends declared 0.26 0.26 0.26 0.29 1.07 Market price High 60.50 52.96 58.53 59.50 60.50 Low 48.57 46.41 52.34 53.92 46.41 2008 Net sales $ 2,877 $ 3,189 $ 3,151 $ 3,131 $ 12,348 Gross margin 1,380 1,627 1,521 1,602 6,130 Net income attributable to Baxter2 429 544 472 569 2,014 Earnings per common share2 Basic 0.68 0.87 0.76 0.92 3.22 Diluted 0.67 0.85 0.74 0.91 3.16 Dividends declared 0.2175 0.2175 0.2175 0.26 0.9125 Market price High 64.91 63.94 71.15 67.30 71.15 Low 55.41 59.33 63.83 48.50 48.50 1 The third quarter of 2009 included a $54million charge associated with the discontinuation of the companys SOLOMIX drug delivery system in development and a $27million charge primarily related to planned retirement costs associated with the SYNDEO PCA Syringe Pump. The fourth quarter of 2009 included a $79million charge related to the companys cost optimization efforts. Refer to Note5 for further information regarding these charges. 2 The first quarter of 2008 included a $53million charge related to the COLLEAGUE infusion pump. The third quarter of 2008 included a $72million charge related to COLLEAGUE infusion pumps, a $31million impairment charge associated with the discontinuation of the CLEARSHOT pre-filled syringe program and a $12million IPRD charge. Refer to Notes4 and 5 for further information regarding these charges. The fourth quarter of 2008 included a $7million IPRD charge. Baxter common stock is listed on

Valuation and Qualifying Accoun

Valuation and Qualifying Accounts
	12 Months Ended Dec. 31, 2009 USD / shares
Valuation And Qualifying Accounts [Abstract]
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS	Schedule Of Valuation And Qualifying Accounts Disclosure SCHEDULEII Additions Charged/ Balance at Charged to (Credited) Balance at Valuation and Qualifying Accounts Beginning Costs and to Other Deductions End of (in millions of dollars) of Period Expenses Accounts(1) From Reserves Period Year ended December31, 2009: Allowance for doubtful accounts $ 103 12 15 (12 ) $ 118 Inventory reserves $ 247 147 24 (145 ) $ 273 Deferred tax asset valuation allowance $ 140 8 12 (16 ) $ 144 Year ended December31, 2008: Allowance for doubtful accounts $ 134 2 (17 ) (16 ) $ 103 Inventory reserves $ 212 158 (11 ) (112 ) $ 247 Deferred tax asset valuation allowance $ 196 8 (18 ) (46 ) $ 140 Year ended December31, 2007: Allowance for doubtful accounts $ 127 6 13 (12 ) $ 134 Inventory reserves $ 180 139 3 (110 ) $ 212 Deferred tax asset valuation allowance $ 234 32 (8 ) (62 ) $ 196 (1) Valuation accounts of acquired or divested companies and foreign currency translation adjustments. Reserves are deducted from assets to which they apply.

3_Summary of Significant Accoun

Summary of Significant Accounting Policies (Detail)
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies (Detail) [Abstract]
Organization, Consolidation, and Presentation of Financial Statements	Nature of Operations Baxter International Inc. (Baxter or the company) develops, manufactures and markets products that save and sustain the lives of people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide. The company operates in three segments, which are described in Note12. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles (GAAP) requires the company to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. Basis of Consolidation The consolidated financial statements include the accounts of Baxter and its majority-owned subsidiaries, any minority-owned subsidiaries that Baxter controls, and variable interest entities (VIEs) in which Baxter is the primary beneficiary, after elimination of intercompany transactions.
Revenue Recognition	Revenue Recognition The company recognizes revenues from product sales and services when earned. Specifically, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred (or services have been rendered), the price is fixed or determinable, and collectibility is reasonably assured. For product sales, revenue is not recognized until title and risk of loss have transferred to the customer. The shipping terms for the majority of the companys revenue arrangements are FOB destination. The recognition of revenue is delayed if there are significant post-delivery obligations, such as training, installation or other services. Provisions for discounts, rebates to customers, chargebacks to wholesalers and returns are provided for at the time the related sales are recorded, and are reflected as a reduction of net sales. The company sometimes enters into arrangements in which it commits to delivering multiple products or services to its customers. In these cases, total arrangement consideration is allocated to the deliverables based on their relative selling prices. Then the allocated consideration is recognized as revenue in accordance with the principles described above. Selling prices are determined by applying a selling price hierarchy. Selling prices are determined using vendor specific objective evidence (VSOE), if it exists. Otherwise, selling prices are determined using third party evidence (TPE). If neither VSOE nor TPE is available, the company uses its best estimate of selling prices.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts In the normal course of business, the company provides credit to its customers, performs credit evaluations of these customers and maintains reserves for potential credit losses. In determining the amount of the allowance for doubtful accounts, the company considers, among other items, historical credit losses, the past due status of receivables, payment histories and other customer-specific information. Receivables are written off when the company determines they are uncollectible. Credit losses, when realized, have been within the range of the companys allowance for doubtful accounts. The allowance for doubtful accounts was $118million at December31, 2009 and $103million at December31, 2008.
Product Warranties	Product Warranties The company provides for the estimated costs relating to product warranties at the time the related revenue is recognized. The cost is determined based on actual company experience for the same or similar products, as well as other relevant information. Product warranty liabilities are adjusted based on changes in estimates.
Cash and Equivalents	Cash and Equivalents Cash and equivalents include cash, certificates of deposit and money market funds with an original maturity of three months or less.
Inventories	Inventories as of December31 (in millions) 2009 2008 Raw materials $ 598 $ 600 Work in process 842 737 Finished goods 1,117 1,024 Inventories $ 2,557 $ 2,361 Inventories are stated at the lower of cost (first-in, first-out method) or market value. Market value for raw materials is based on replacement costs, and market value for work in process and finished goods is based on net realizable value. The inventory amounts above are stated net of reserves for excess and obsolete inventory, which totaled $273million at December31, 2009 and $247million at December31, 2008.
Property, Plant and Equipment, Net	Property, Plant and Equipment, Net as of December31 (in millions) 2009 2008 Land $ 163 $ 154 Buildings and leasehold improvements 1,921 1,743 Machinery and equipment 5,962 5,425 Equipment with customers 1,039 916 Construction in progress 975 783 Total property, plant and equipment, at cost 10,060 9,021 Accumulated depreciation and amortization (4,901 ) (4,412 ) Property, plant and equipment (PPE), net $ 5,159 $ 4,609 Depreciation and amortization expense is calculated using the straight-line method over the estimated useful lives of the related assets, which range from 20 to 50years for buildings and improvements and from three to 15years for machinery and equipment. Leasehold improvements are amortized over the life of the related facility lease (including any renewal periods, if appropriate) or the asset, whichever is shorter. Baxter capitalizes in machinery and equipment certain computer software and software development costs incurred in connection with developing or obtaining software for internal use. Capitalized software costs are amortized on a straight-line basis over the estimated useful lives of the software. Straight-line and accelerated methods of depreciation are used for income tax purposes. Depreciation and amortization expense was $557million in 2009, $553million in 2008 and $501million in 2007. Repairs and maintenance expense was $251million in 2009, $242million in 2008 and $227million in 2007.
Acquisitions	Acquisitions Results of operations of acquired companies are included in the companys results of operations as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values at the date of the acquisition. Contingent consideration is recognized at the estimated fair value on the acquisition date. Any purchase price in excess of these net assets is recorded as goodwill. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values.
Research and Development	Research and Development Research and development (RD) costs are expensed as incurred. Acquired in-process RD (IPRD) is the value assigned to acquired technology or products under development which have not received regulatory approval and have no alternative future use. Valuations are generally completed for business acquisitions using a discounted cash flow analysis, incorporating the stage of completion. The most significant estimates and assumptions inherent in a discounted cash flow analysis include the amount and timing of projected future cash flows, the discount rate used to measure the risks inherent in the future cash flows, the assessment of the assets life cycle, and the competitive and other trends impacting the asset, including consideration of technical, legal, regulatory, economic and other factors. Each of these factors can significantly affect the value of the IPRD. Payments made to third parties subsequent to regulatory approval are capitalized and amortized over the remaining useful life of the related asset, and are classified as intangible assets. Beginning in 2009, as discussed further below, the company adopted a new accounting standard for accounting for business combinations. Under the new accounting standard, acquired IPRD included in a business combination is capitalized as an indefinite-lived intangible asset and is no longer expensed at the time of the acquisition. Development costs incurred after the acquisition are expensed as incurred. Upon receipt of regulatory approval of the related technology or product, the indefinite-lived intangible asset is then accounted for as a finite-lived intangible asset and amortized on a straight-line basis over its estimated useful life. If the RD project is abandoned, the indefinite-lived asset is charged to expense.
Impairment Reviews	Impairment Reviews Goodwill Goodwill is not amortized, but is subject to an impairment review annually and whenever indicators of impairment exist. An impairment would occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. The company measures goodwill for impairment based on its reportable segments, which are BioScience, Medication Delivery and Renal. An impairment charge would be recorded for the difference between the carrying value and the present value of estimated future cash flows discounted using a risk-free market rate adjusted for a market participants view of similar companies and perceived risks in the cash flows, which represents the estimated fair value of the reporting unit. Other Long-Lived Assets The company reviews the carrying amounts of long-lived assets other than goodwill for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Examples of such a change in circumstances include a significant decrease in market price, a significant adverse change in the extent or manner in which an asset is being used, or a significant adverse change in the legal or business climate. In evaluating recoverability, the company groups assets and liabilities at the lowest level such that the identifiable cash flows relating to the group are largely independent of the cash flows of other assets and liabilities. The company then compares the carrying amounts of the assets or asset groups with the related estimated undiscounted future cash flows. In the event impairment exists, an impairment charge would be recorded as the amount by which the carrying amount of the asset or asset group exceeds the fair value. Depending on the asset and the availability of information, fair value may be determined by reference to estimated selling values of assets in similar condition, or by using a discounted cash flow model. In addition, the remaining amortization period for the impaired asset would be reassessed and, if necessary, revised.
Earnings Per Share	Earnings Per Share The numerator for both basic and diluted earnings per share (EPS) is net income attributable to Baxter. The denominator for basic EPS is the weighted-average number of common shares outstanding during the period. The dilutive effect of outstanding employee stock options, performance share units, restricted stock units and restricted stock is reflected in the denominator for diluted EPS using the treasury stock method. The following is a reconciliation of basic shares to diluted shares. years ended December31 (in millions) 2009 2008 2007 Basic shares 607 625 644 Effect of dilutive securities 7 12 10 Diluted shares 614 637 654 The computation of diluted EPS excluded employee stock options to purchase 16million, 8million and 11million shares in 2009, 2008 and 2007, respectively, because the assumed proceeds were greater than the average market price of the companys common stock, resulting in an anti-dilutive effect on diluted EPS.
Shipping and Handling Costs	Shipping and Handling Costs Shipping costs, which are costs incurred to physically move product from Baxters premises to the customers premises, are classified as marketing and administrative expenses. Handling costs, which are costs incurred to store, move and prepare products for shipment, are classified as cost of sales. Approximately $220million in 2009, $237million in 2008 and $231million in 2007 of shipping costs were classified in marketing and administrative expenses.
Income Taxes	Income Taxes Deferred taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting based on enacted tax laws and rates. The company maintains valuation allowances unless it is more likely than not that all or a portion of the deferred tax asset will be realized. With respect to uncertain tax positions, the company determines whether the position is more likely than not to be sustained upon examination, based on the technical merits of the position. Any tax position that meets the more-likely-than-not recognition threshold is measured and recognized in the consolidated financial statements at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The liability relating to uncertain tax positions is classified as current in the consolidated balance sheets to the extent the company anticipates making a payment within one year. Interest and penalties associated with income taxes are classified in the income tax expense line in the consolidated statements of income and were not material.
Foreign Currency Translation	Foreign Currency Translation Currency translation adjustments (CTA) related to foreign operations are principally included in other comprehensive income (OCI). For foreign operations in highly inflationary economies, translation gains and losses are included in other expense, net, and were not material.
Accumulated Other Comprehensive Income	Accumulated Other Comprehensive Income Comprehensive income includes all changes in shareholders equity that do not arise from transactions with shareholders, and consists of net income, CTA, pension and other employee benefits, realized net losses on hedges of net investments in foreign operations, unrealized gains and losses on cash flow hedges and unrealized gains and losses on unrestricted available-for-sale marketable equity securities. The net-of-tax components of accumulated other comprehensive income (AOCI), a component of shareholders equity, were as follows. as of December31 (in millions) 2009 2008 2007 CTA $ 164 $ (30 ) $ 326 Pension and other employee benefits (1,188 ) (1,134 ) (555 ) Hedges of net investments in foreign operations (757 ) (757 ) (724 ) Other hedging activities 3 39 14 Marketable equity securities 1 (3 ) (1 ) Accumulated other comprehensive loss $ (1,777 ) $ (1,885 ) $ (940 )
Derivatives and Hedging Activities	Derivatives and Hedging Activities All derivative instruments are recognized as either assets or liabilities at fair value in the consolidated balance sheets and are classified as short-term or long-term based on the scheduled maturity of the instrument. Based upon the exposure being hedged, the company designates its hedging instruments as cash flow or fair value hedges. For each derivative instrument that is designated and effective as a cash flow hedge, the gain or loss on the derivative is accumulated in AOCI and then recognized in earnings consistent with the underlying hedged item. Option premiums or net premiums paid are initially recorded as assets and reclassified to OCI over the life of the option, and then recognized in earnings consistent with the underlying hedged item. Cash flow hedges are classified in other expense, net, cost of sales, and net interest expense, and primarily relate to a hedge of U.S.Dollar-denominated debt issued by a foreign subsidiary, forecasted intercompany sales denominated in foreign currencies and anticipated issuances of debt, respectively. For each derivative instrument that is designated and effective as a fair value hedge, the gain or loss on the derivative is recognized immediately to earnings, and offsets the gain or loss on the underlying hedged item. Fair value hedges are classified in net interest expense, as they hedge the interest rate risk associated with certain of the companys fixed-rate debt. For each derivative or nonderivative instrument that is designated and effective as a hedge of a net investment in a foreign operation, the gain or loss is recorded in OCI, with any hedge ineffectiveness recorded immediately in net interest expense. As with CTA, upon sale or liquidation of an investment in a foreign entity, the amount attributable to that entity and accumulated in AOCI would be removed from AOCI and reported as part of the gain or loss in the period during which the sale or liquidation of the investment occurs. For derivative instruments that are not designated as hedges, the change in fair value, which substantially offsets the change in book value of the hedged items, is recorded directly to other expense, net. If it is determined that a derivative or nonderivative hedging instrument is no longer highly effective as a hedge, the company discontinues hedge accounting prospectively. If the company removes the cash flow hedge designation because the hedged forecasted transactions are no longer probable of occurring, any gains or losses are immediately reclassified from AOCI to earnings. Gains or losses relating to terminations of effective cash flow hedges in which the forecasted transactions are still probable of occurring are deferred and recognized consistent with the income or loss recognition of the underlying hedged items. If the company terminates a fair value hedge, an amount equal to the cumulative fair value adjustment to the hedged items at the date of termination is amortized to earnings over the remaining term of the hedged item. Derivatives, including those that are not designated as a hedge, are principally classified in the operat
New Accounting Standards	Reclassifications Certain reclassifications have been made to conform the prior period consolidated financial statements and notes to the current period presentation, including reclassifications related to the companys adoption of a new accounting standard related to noncontrolling interests. Changes in Accounting Standards Business Combinations On January1, 2009, the company adopted a new accounting standard which changes the accounting for business combinations in a number of significant respects. The key changes include the expansion of transactions that qualify as business combinations, the capitalization of IPRD as an indefinite-lived asset, the recognition of certain acquired contingent assets and liabilities at fair value, the expensing of acquisition costs, the expensing of costs associated with restructuring the acquired company, the recognition of contingent consideration at fair value on the acquisition date, the recognition of post-acquisition date changes in deferred tax asset valuation allowances and acquired income tax uncertainties as income tax expense or benefit, and the expansion of disclosure requirements. This standard was applicable for acquisitions made by the company on or after January1, 2009, including the April 2009 consolidation of Sigma International General Medical Apparatus, LLC (SIGMA) and the August 2009 acquisition of certain assets of Edwards Lifesciences Corporation (Edwards CRRT) related to the hemofiltration business, also known as Continuous Renal Replacement Therapy (CRRT). Refer to Note4 for further information regarding SIGMA and Edwards CRRT. Noncontrolling Interests On January1, 2009, the company adopted a new accounting standard which changes the accounting and reporting of noncontrolling interests (historically referred to as minority interests). The standard requires that noncontrolling interests be presented in the consolidated balance sheets within equity, but separate from Baxter shareholders equity, and that the amount of consolidated net income attributable to Baxter and to the noncontrolling interests be clearly identified and presented in the consolidated statements of income. Any losses in excess of the noncontrolling interests equity interest continue to be allocated to the noncontrolling interest. Purchases or sales of equity interests that do not result in a change of control are accounted for as equity transactions. Upon a loss of control the interest sold, as well as any interest retained, is measured at fair value, with any gain or loss recognized in earnings. In partial acquisitions, when control is obtained, 100% of the assets and liabilities, including goodwill, are recognized at fair value as if the entire target company had been acquired. The new standard was applied prospectively as of January1, 2009, except for the presentation and disclosure requirements, which have been applied retrospectively for prior periods presented. Prior to the adoption of the new standard, the noncontrolling interests share of net income was included in other expense, net in the consolidated statements of income and the noncontrolling interests equity was included in o

4_Supplemental Financial Inform

Supplemental Financial Information (Detail)
	12 Months Ended Dec. 31, 2009 USD / shares
Supplemental Financial Information (Detail) [Abstract]
Goodwill and Other Intangible Assets	Goodwill and Other Intangible Assets Goodwill The following is a summary of the activity in goodwill by segment. Medication (in millions) BioScience Delivery Renal Total December31, 2007 $ 587 $ 948 $ 155 $ 1,690 Additions 11 13 8 32 CTA (13 ) (44 ) (11 ) (68 ) December31, 2008 585 917 152 1,654 Additions 89 29 118 CTA 10 37 6 53 December31, 2009 $ 595 $ 1,043 $ 187 $ 1,825 Additional goodwill recognized in 2009 principally related to the consolidation of SIGMA within the Medication Delivery segment and the acquisition of Edwards CRRT within the Renal segment. See Note4 for further information regarding SIGMA and Edwards CRRT. As of December31, 2009, there were no accumulated goodwill impairment losses. Other Intangible Assets, Net Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. Intangible assets with indefinite useful lives are not material to the company. The following is a summary of the companys intangible assets subject to amortization. Developed technology, (in millions) including patents Other Total December31, 2009 Gross other intangible assets $ 904 $ 125 $ 1,029 Accumulated amortization (489 ) (58 ) (547 ) Other intangible assets, net $ 415 $ 67 $ 482 December31, 2008 Gross other intangible assets $ 777 $ 117 $ 894 Accumulated amortization (444 ) (67 ) (511 ) Other intangible assets, net $ 333 $ 50 $ 383 The amortization expense for intangible assets was $63million in 2009, $53million in 2008 and $57million in 2007. At December31, 2009, the anticipated annual amortization expense for intangible assets recorded as of December31, 2009 is $66million in 2010, $62million in 2011, $59million in 2012, $56million in 2013 and $52million in 2014.
Other Long-Term Assets	Other Long-Term Assets as of December31 (in millions) 2009 2008 Deferred income taxes $ 1,095 $ 1,132 Insurance receivables 49 58 Other long-term receivables 66 87 Other 376 327 Other long-term assets $ 1,586 $ 1,604
Accounts Payable and Accrued Liabilities	Accounts Payable and Accrued Liabilities as of December31 (in millions) 2009 2008 Accounts payable, principally trade $ 807 $ 829 Income taxes payable 375 255 Deferred income taxes 482 265 Common stock dividends payable 174 161 Employee compensation and withholdings 494 478 Property, payroll and certain other taxes 201 177 Other 1,220 1,076 Accounts payable and accrued liabilities $ 3,753 $ 3,241
Other Long-Term Liabilities	Other Long-Term Liabilities as of December31 (in millions) 2009 2008 Pension and other employee benefits $ 1,688 $ 1,595 Litigation reserves 45 63 Other 297 459 Other long-term liabilities $ 2,030 $ 2,117
Net Interest Expense	Net Interest Expense years ended December31 (in millions) 2009 2008 2007 Interest costs $ 145 $ 165 $ 136 Interest costs capitalized (28 ) (17 ) (12 ) Interest expense 117 148 124 Interest income (19 ) (72 ) (102 ) Net interest expense $ 98 $ 76 $ 22
Other Expense, Net	Other Expense, Net years ended December31 (in millions) 2009 2008 2007 Equity method investments $ 12 $ 14 $ 13 Foreign exchange (51 ) (29 ) 3 Securitization and factoring arrangements 11 19 14 Impairment charges 54 31 Gain on sale of Transfusion Therapies business, related charges and adjustments (16 ) (23 ) Other 19 7 11 Other expense, net $ 45 $ 26 $ 18

5_Infusion Pump, Exit and Other

Infusion Pump, Exit and Other Charges (Detail)
	12 Months Ended Dec. 31, 2009 USD / shares
Infusion Pump, Exit and Other Charges (Details) [Abstract]
Infusion Pump, Exit and Other Charges	Baxter has made and continues to make significant investments in assets, including inventory and PPE, which relate to potential new products or modifications to existing products. The companys ability to realize value from these investments is contingent on, among other things, regulatory approval and market acceptance of these new products. The company may not be able to realize the expected returns from these investments, potentially resulting in asset impairments in the future. Infusion Pump Charges The company remains in active dialogue with the FDA regarding various matters with respect to the companys COLLEAGUE infusion pumps, including the companys remediation plan and reviews of the companys facilities, processes and quality controls by the companys outside expert pursuant to the requirements of the companys Consent Decree. The outcome of these discussions with the FDA is uncertain and may impact the nature and timing of the companys actions and decisions with respect to the COLLEAGUE pump. The companys estimates of the costs related to these matters are based on the current remediation plan and information currently available. It is possible that substantial additional charges, including significant asset impairments, related to COLLEAGUE may be required in future periods, based on new information, changes in estimates, and modifications to the current remediation plan. While the company continues to work to resolve the issues associated with COLLEAGUE infusion pumps, there can be no assurance that additional costs or civil and criminal penalties will not be incurred, that additional regulatory actions with respect to the company will not occur, that the company will not face civil claims for damages from purchasers or users, that substantial additional charges or significant asset impairments may not be required, that sales of any other product may not be adversely affected, or that additional legislation or regulation will not be introduced that may adversely affect the companys operations and consolidated financial statements. COLLEAGUE and SYNDEO Infusion Pumps The company recorded charges and other costs of $27million, $125million, $14million, $94million and $77million in 2009, 2008, 2007, 2006 and 2005, respectively, related to issues associated with its COLLEAGUE and SYNDEO infusion pumps. The company stopped shipment of COLLEAGUE infusion pumps in July 2005 in the United States. Following a number of ClassI recalls (recalls at the highest priority level for the FDA) relating to the performance of the pumps, as well as the seizure litigation described in Note11, the company entered into a Consent Decree in June 2006. Additional ClassI recalls related to remediation and repair and maintenance activities were addressed by the company in 2007 and 2009. The Consent Decree provides for reviews of the companys facilities, processes and controls by the companys outside expert, followed by the FDA. In December 2007, following the outside experts review, the FDA conducted its inspection and remains in a dialogue with the company with respect to observations from its inspection as well as the validati
Restructuring Charges	2007 Restructuring Charge In 2007, the company recorded a restructuring charge of $70million principally associated with the consolidation of certain commercial and manufacturing operations outside of the United States. Based on a review of current and future capacity needs, the company decided to integrate several facilities to reduce the companys cost structure and optimize operations, principally in the Medication Delivery segment. Included in the charge was $17million related to asset impairments, principally to write down PPE based on market data for the assets. Also included in the charge was $53million for cash costs, principally pertaining to severance and other employee-related costs associated with the elimination of approximately 1% of the companys total workforce. Reserve utilization related to the 2007 program was $22million, $14million and $5million in 2009, 2008 and 2007, respectively. As of the end of 2009, the 2007 restructuring reserve has been substantially utilized. 2004 Restructuring Charge In 2004, the company recorded a restructuring charge of $543million principally associated with the companys decision to implement actions to reduce the companys overall cost structure and to drive sustainable improvements in financial performance. Included in the 2004 charge was $196million relating to asset impairments, almost all of which was to write down PPE. Also included in the 2004 charge was $347million for cash costs, principally pertaining to severance and other employee-related costs. Reserve utilization related to the 2004 program was $5million, $28million and $22million in 2009, 2008 and 2007, respectively. As of the end of 2009, the 2004 restructuring reserve has been substantially utilized.

6_Debt, Credit Facilities, and

Debt, Credit Facilities, and Commitments and Contingencies (Detail)
	12 Months Ended Dec. 31, 2009 USD / shares
Debt, Credit Facilities, and Commitments and Contingencies (Detail) [Abstract]
Debt Outstanding and Significant Debt Issuances	Debt Outstanding At December31, 2009 and 2008, the company had the following debt outstanding. Effective as of December31 (in millions) interest rate1 20092 20082 4.75%notes due 2010 4.9% $ 500 $ 499 Variable-rate loan due 2010 0.8% 180 177 Variable-rate loan due 2012 0.6% 157 155 4.0%notes due 2014 4.2% 350 4.625%notes due 2015 4.8% 641 675 5.9%notes due 2016 6.0% 615 661 5.375%notes due 2018 5.5% 499 499 4.5%notes due 2019 4.7% 498 6.625%debentures due 2028 6.7% 136 154 6.25%notes due 2037 6.3% 499 499 Other 47 49 Total debt and capital lease obligations 4,122 3,368 Current portion (682) (6) Long-term portion $ 3,440 $ 3,362 1 Excludes the effect of related interest rate swaps, as applicable. 2 Book values include discounts, premiums and adjustments related to hedging instruments, as applicable. In addition, as further discussed below, the company had short-term debt totaling $29million at December31, 2009 and $388million at December31, 2008. Significant Debt Issuances In February 2009, the company issued $350million of senior unsecured notes, maturing in March 2014 and bearing a 4.0% coupon rate. In August 2009, the company issued $500million of senior unsecured notes, maturing in August 2019 and bearing a 4.5% coupon rate. In May 2008, the company issued $500million of senior unsecured notes, maturing in June 2018 and bearing a 5.375% coupon rate. In December 2007, the company issued $500million of senior unsecured notes, maturing in December 2037, and bearing a 6.25% coupon rate. The notes are redeemable, in whole or in part, at the companys option, subject to a make-whole redemption premium. In addition, during 2008, the company issued commercial paper, of which $200million was outstanding as of December31, 2008, with a weighted-average interest rate of 2.55%. There was no commercial paper outstanding as of December31, 2009. The net proceeds of the debt issuances noted above were used for general corporate purposes, including the repayment of $200million of outstanding commercial paper in 2009 and for the settlement of cross-currency swaps in 2008. See Note7 for further information regarding the settlement of cross-currency swaps. The debt instruments include certain covenants, including restrictions relating to the companys creation of secured debt.
Future Minimum Lease Payments and Debt Maturities	Future Minimum Lease Payments and Debt Maturities Debt maturities Operating and capital as of and for the years ended December31 (in millions) leases leases 2010 $ 163 $ 682 2011 138 7 2012 115 161 2013 100 4 2014 92 358 Thereafter 194 2,867 Total obligations and commitments 802 4,079 Interest on capital leases, discounts and premiums, and adjustments relating to hedging instruments n/a 43 Long-term debt and lease obligations $ 802 $ 4,122
Credit Facilities	Credit Facilities The company had $2.8billion of cash and equivalents at December31, 2009. The companys primary revolving credit facility has a maximum capacity of $1.5billion and matures in December 2011. As of December31, 2009, there were no outstanding borrowings under this facility. The company also maintains a Euro-denominated credit facility with a maximum capacity of approximately $435million at December31, 2009, which matures in January 2013. As of December31, 2009, there were no outstanding borrowings under this facility. As of December31, 2008, there was $164million outstanding under this facility, which was repaid in 2009. The companys facilities enable the company to borrow funds on an unsecured basis at variable interest rates, and contain various covenants, including a maximum net-debt-to-capital ratio. At December31, 2009, the company was in compliance with the financial covenants in these agreements. The non-performance of any financial institution supporting either of the credit facilities would reduce the maximum capacity of these facilities by each institutions respective commitment. The company also maintains other credit arrangements, which totaled $454million at December31, 2009 and $409million at December31, 2008. Borrowings outstanding under these facilities totaled $29million at December31, 2009 and $24million at December31, 2008.
Leases	Leases The company leases certain facilities and equipment under capital and operating leases expiring at various dates. The leases generally provide for the company to pay taxes, maintenance, insurance and certain other operating costs of the leased property. Most of the operating leases contain renewal options. Operating lease rent expense was $172million in 2009, $161million in 2008 and $157million in 2007.
Collaborative Arrangements	Collaborative Arrangements On January1, 2009, the company adopted a new accounting standard related to collaborative arrangements, which was required to be applied retrospectively to all periods presented for all collaborative arrangements existing as of the effective date. The adoption of this new standard did not result in a change to the companys historical consolidated financial statements. In the normal course of business, Baxter enters into collaborative arrangements with third parties. Certain of these collaborative arrangements include joint operating activities involving active participation by both partners, where both Baxter and the other entity are exposed to risks and rewards dependent on the commercial success of the activity. These collaborative arrangements exist in all three of the companys segments, take a number of forms and structures, principally pertain to the joint development and commercialization of new products, and are designed to enhance and expedite long-term sales and profitability growth. The collaborative arrangements can broadly be grouped into two categories: those relating to new product development, and those relating to existing commercial products. New Product Development Arrangements The companys joint new product development and commercialization arrangements generally provide that Baxter license certain rights to manufacture, market or distribute a specified technology or product under development. Baxters consideration for the rights generally consists of some combination of up-front payments, ongoing RD cost reimbursements, royalties, and contingent payments relating to the achievement of specified pre-clinical, clinical, regulatory approval or sales milestones. Joint steering committees often exist to manage the various stages and activities of the arrangement. Control over the RD activities may be shared or may be performed by Baxter. Baxter generally controls the commercialization phase, sometimes purchasing raw materials from the collaboration partner. During the development phase, Baxters RD costs are expensed as incurred. These costs may include RD cost reimbursements to the partner, as well as up-front and milestone payments to the partner prior to the date the product receives regulatory approval. Milestone payments made to the partner subsequent to regulatory approval are capitalized as other intangible assets and amortized to cost of sales over the estimated useful life of the related asset. Royalty payments are expensed as cost of sales when they become due and payable. Any purchases of raw materials from the partner during the development stage are expensed as RD, while such purchases during the commercialization phase are capitalized as inventory and recognized as cost of sales when the related finished products are sold. Baxter generally records the amount invoiced to the third-party customer for the finished product as sales, as Baxter is the principal and primary obligor in the arrangement. Payments to collaborative partners classified in cost of sales were not significant in 2009, 2008 and 2007. Payments to collaborative partners classified in RD
Other Commitments and Contingencies	Other Commitments and Contingencies Joint Development and Commercialization Arrangements In addition to the new product development arrangements discussed above, the company has entered into certain other arrangements which include contingent milestone payments. At December31, 2009, the companys unfunded milestone payments associated with all of its arrangements totaled $812million. This total excludes any contingent royalties. Based on the companys projections, any contingent payments made in the future will be more than offset over time by the estimated net future cash flows relating to the rights acquired for those payments. The majority of the contingent payments relate to arrangements in the BioScience segment. Included in the total are contingent milestone payments of $220million relating to arrangements entered into during 2008 and 2007 that are discussed in Note4. Aside from the items discussed in Note4, significant collaborations relate to the development of hard and soft tissue-repair products to position the company to enter the orthobiologic market, the development of longer-acting forms of blood clotting proteins to treat hemophilia A and other arrangements. Indemnifications During the normal course of business, Baxter makes indemnities, commitments and guarantees pursuant to which the company may be required to make payments related to specific transactions. Indemnifications include: (i)intellectual property indemnities to customers in connection with the use, sales or license of products and services; (ii)indemnities to customers in connection with losses incurred while performing services on their premises; (iii)indemnities to vendors and service providers pertaining to claims based on negligence or willful misconduct; and (iv)indemnities involving the representations and warranties in certain contracts. In addition, under Baxters Amended and Restated Certificate of Incorporation, and consistent with Delaware General Corporation Law, the company has agreed to indemnify its directors and officers for certain losses and expenses upon the occurrence of certain prescribed events. The majority of these indemnities, commitments and guarantees do not provide for any limitation on the maximum potential for future payments that the company could be obligated to make. To help address some of these risks, the company maintains various insurance coverages. Based on historical experience and evaluation of the agreements, the company does not believe that any significant payments related to its indemnifications will result, and therefore the company has not recorded any associated liabilities. Legal Contingencies Refer to Note11 for a discussion of the companys legal contingencies.

7_Financial Instruments and Rel

Financial Instruments and Related Fair Value Measurements (Detail)
	12 Months Ended Dec. 31, 2009 USD / shares
Financial Instruments and Related Fair Value Measurements (Detail) [Abstract]
Receivable Securitizations	Receivable Securitizations Where economical, the company has entered into agreements with various financial institutions in which the entire interest in and ownership of the receivable is sold, principally consisting of trade receivables originated in Japan. The company had also entered into agreements in which undivided interests in certain pools of receivables were sold, principally consisting of hardware lease receivables originated in the United States and trade receivables originated in Europe. In November 2007, the company purchased the third party interest in the previously sold receivables under the companys European securitization facility, resulting in a net cash outflow of $157million, consisting of $225million of receivables and $68million of retained interests. The $157million net cash outflow was classified as an investing activity in the consolidated statement of cash flows. Subsequent cash collections from customers relating to these receivables are also classified in the investing section of the consolidated statements of cash flows, and totaled $14 million, $46million and $161million for the years ended 2009, 2008 and 2007, respectively. The European facility matured in November 2007 and was not renewed. The U.S.securitization facility matured in December 2007 and was not renewed. The company continues to service the receivables in its Japanese securitization arrangements. Servicing assets or liabilities are not recognized because the company receives adequate compensation to service the sold receivables. The Japanese securitization arrangement includes limited recourse provisions, which are not material. The securitization arrangements resulted in net cash outflows of $7million, $3million and $240million (of which $225million was classified as an investing activity and $15million as an operating activity in the consolidated statement of cash flows) in 2009, 2008 and 2007, respectively. A summary of the securitization activity is as follows. as of and for the years ended December31 (in millions) 2009 2008 2007 Sold receivables at beginning of year $ 154 $ 129 $ 348 Proceeds from sales of receivables 535 467 1,395 Purchase of interest in receivables in the European securitization facility (225 ) Cash collections (remitted to the owners of the receivables) (542 ) (470 ) (1,410 ) Foreign exchange 28 21 Sold receivables at end of year $ 147 $ 154 $ 129 The net gains and losses relating to the sales of receivables were immaterial for each year.
Concentrations of Risk	Concentrations of Risk The company invests excess cash in certificates of deposit or money market funds and diversifies the concentration of cash among different financial institutions. With respect to financial instruments, where appropriate, the company has diversified its selection of counterparties, and has arranged collateralization and master-netting agreements to minimize the risk of loss. While the current economic downturn has not meaningfully impacted the companys ability to collect receivables, the company continues to do business with certain foreign governments which have recently experienced credit rating downgrades and may become unable to pay for our products or services.
Foreign Currency and Interest Rate Risk Management	Foreign Currency and Interest Rate Risk Management The company operates on a global basis and is exposed to the risk that its earnings, cash flows and equity could be adversely impacted by fluctuations in foreign exchange and interest rates. The companys hedging policy attempts to manage these risks to an acceptable level based on the companys judgment of the appropriate trade-off between risk, opportunity and costs. The company is primarily exposed to foreign exchange risk with respect to recognized assets and liabilities, forecasted transactions and net assets denominated in the Euro, Japanese Yen, British Pound, Australian Dollar, Canadian Dollar, Brazilian Real and Colombian Peso. The company manages its foreign currency exposures on a consolidated basis, which allows the company to net exposures and take advantage of any natural offsets. In addition, the company uses derivative and nonderivative instruments to further reduce the net exposure to foreign exchange. Gains and losses on the hedging instruments offset losses and gains on the hedged transactions and reduce the earnings and equity volatility resulting from foreign exchange. Market volatility and currency fluctuations may reduce the benefits of the companys natural hedges and limit the companys ability to cost-effectively hedge these exposures. The company is also exposed to the risk that its earnings and cash flows could be adversely impacted by fluctuations in interest rates. The companys policy is to manage interest costs using a mix of fixed- and floating-rate debt that the company believes is appropriate. To manage this mix in a cost-efficient manner, the company periodically enters into interest rate swaps in which the company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional amount. The company does not hold any instruments for trading purposes and none of the companys outstanding derivative instruments contain credit-risk-related contingent features. Cash Flow Hedges The company may use options, including collars and purchased options, forwards and cross-currency swaps to hedge the foreign exchange risk to earnings relating to forecasted transactions denominated in foreign currencies and recognized assets and liabilities. The company periodically uses forward-starting interest rate swaps and treasury rate locks to hedge the risk to earnings associated with movements in interest rates relating to anticipated issuances of debt. Certain other firm commitments and forecasted transactions are also periodically hedged. Cash flow hedges primarily relate to forecasted intercompany sales denominated in foreign currencies, a hedge of U.S.Dollar-denominated debt issued by a foreign subsidiary and anticipated issuances of debt. The notional amounts of foreign exchange contracts, cross-currency swaps (used to hedge U.S.Dollar-denominated debt issued by a foreign subsidiary) and interest rate contracts were $1.2billion, $500million and $200million, respectively, as of December31, 2009. The maximum term over which the company has cash flow
Fair Value Measurements	Fair Value Measurements On January1, 2008, the company adopted a new accounting standard relating to assets and liabilities that are measured at fair value on a recurring basis. The standard clarifies the definition of fair value whenever another standard requires or permits assets or liabilities to be measured at fair value. Specifically, the standard clarifies that fair value should be based on the assumptions market participants would use when pricing the asset or liability, and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. On January1, 2009, the company completed the adoption of the accounting standard for fair value measurements as it related to nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis. The fair value hierarchy under the accounting standard for fair value measurements consists of the following three levels: Level1 Quoted prices in active markets that the company has the ability to access for identical assets or liabilities; Level2 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 Level3 Valuations using significant inputs that are unobservable in the market and include the use of judgment by the companys management about the assumptions market participants would use in pricing the asset or liability. The following table summarizes the bases used to measure financial assets and liabilities that are carried at fair value on a recurring basis in the consolidated balance sheets. Basis of fair value measurement Quoted prices in active markets for Significant other Significant Balance at identical assets observable inputs unobservableinputs (in millions) December31, 2009 (Level 1) (Level 2) (Level 3) Assets Foreign currency hedges $ 20 $ $ 20 $ Interest rate hedges 85 85 Equity securities 13 13 Total assets $ 118 $ 13 $ 105 $ Liabilities Foreign currency hedges $ 112 $ $ 112 $ Interest rate hedges 1 1 Contingent payments related toSIGMA 59 59 Total liabilities $ 172 $ $ 113 $ 59 Basis of fair value measurement Quoted prices in active markets for Significant other Significant Balance at identical assets observable inputs unobservableinputs (in millions)

Common Stock and Preferred Stoc

Common Stock and Preferred Stock (Detail)
	12 Months Ended Dec. 31, 2009 USD / shares
Common and Preferred Stock (Detail) [Abstract]
Stock-Based Compensation	Stock-Based Compensation The companys stock-based compensation generally includes stock options, performance share units (PSUs), restricted stock units (RSUs) and purchases under employee stock purchase plans. Shares issued relating to the companys stock-based plans are generally issued out of treasury stock. As of December31, 2009, approximately 28million authorized shares are available for future awards under the companys stock-based compensation plans. The following is a summary of the companys significant stock compensation plans. Stock Compensation Expense Stock compensation expense recognized in the consolidated statements of income was $140million, $146million and $136million in 2009, 2008 and 2007, respectively. The related tax benefit recognized was $40million, $46million and $46million in 2009, 2008 and 2007, respectively. Stock compensation expense is recorded at the corporate level and is not allocated to a segment. Approximately three-quarters of stock compensation expense is classified in marketing and administrative expenses, with the remainder classified in cost of sales and RD expenses. Costs capitalized in the consolidated balance sheet at December31, 2009 were not significant. Stock compensation expense is based on awards expected to vest, and therefore has been reduced by estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised in subsequent periods, if necessary, if actual forfeitures differ from those estimates. Stock Options Stock options are granted to employees and non-employee directors with exercise prices at least equal to 100% of the market value on the date of grant. Beginning in 2007, stock options granted generally vest in one-third increments over a three-year period. Options granted prior to 2007 generally cliff-vest 100% three years from the grant date. Stock options granted to non-employee directors generally cliff-vest 100% one year from the grant date. Stock options granted typically have a contractual term of 10years. The grant-date fair value, adjusted for estimated forfeitures, is recognized as expense on a straight-line basis over the substantive vesting period. The fair value of stock options is determined using the Black-Scholes model. The weighted-average assumptions used in estimating the fair value of stock options granted during each year, along with the weighted-average grant-date fair values, were as follows. years ended December 31 2009 2008 2007 Expected volatility 30% 24% 23% Expected life (in years) 4.5 4.5 4.5 Risk-free interest rate 1.8% 2.4% 4.5% Dividend yield 2.0% 1.5% 1.2% Fair value per stock option $12 $12 $13 The companys expected volatility assumption is based on an equal weighting of the historical volatility of Baxters stock and the implied volatility from traded options on Baxters stock. The expected life assumption is primarily based on the vesting terms of the stock option, his
Stock Repurchase Programs	Stock Repurchase Programs As authorized by the board of directors, the company repurchases its stock from time to time depending on the companys cash flows, net debt level and market conditions. The company purchased 23million shares for $1.2billion in 2009, 32million shares for $2.0billion in 2008 and 34million shares for $1.9billion in 2007. In March 2008, the board of directors authorized the repurchase of up to $2.0billion of the companys common stock. There is no remaining availability under the March 2008 authorization as of December31, 2009. In July 2009, the board of directors authorized the repurchase of up to an additional $2.0billion of the companys common stock. At December31, 2009, $1.95billion remained available under the July 2009 authorization.
Cash Dividends	Cash Dividends Beginning in 2007, the company converted from an annual to a quarterly dividend and increased the dividend by 15% on an annualized basis, to $0.1675 per share per quarter. In November 2007, the board of directors declared a quarterly dividend of $0.2175 per share ($0.87 per share on an annualized basis), representing an increase of 30% over the previous quarterly rate. In November 2008, the board of directors declared a quarterly dividend of $0.26 per share ($1.04 per share on an annualized basis), representing an increase of 20% over the previous quarterly rate. In November 2009, the board of directors declared a quarterly dividend of $0.29 per share ($1.16 per share on an annualized basis), which was paid on January5, 2010 to shareholders of record as of December10, 2009. This dividend represented an increase of 12% over the previous quarterly rate of $0.26 per share.