Baxter International Inc. (BAX) | Property, Plant and Equipment

Property, Plant and Equipment Accounting Policy

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 50 years for buildings and improvements and from three to 15 years 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 $572 million in 2011, $592 million in 2010 and $557 million in 2009. Repairs and maintenance expense was $269 million in 2011, $254 million in 2010 and $251 million in 2009.

Source: Baxter International Inc., Annual Report

Property, Plant and Equipment Disclosure

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Baxter International Inc., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

		Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
	Land
	Buildings and leasehold improvements
	Machinery and equipment
	Equipment with customers
	Construction in progress
	Property, plant and equipment, at cost
	Accumulated depreciation and amortization
	Property, plant and equipment (PP&E), net

Source: Based on data from Baxter International Inc. Annual Reports

Item	Description	The company
Land	Carrying amount as of the balance sheet date of real estate held for productive use. This excludes land held for sale.	Baxter International Inc.'s land increased from 2009 to 2010 and from 2010 to 2011.
Buildings and leasehold improvements	Carrying amount as of the balance sheet date of long-lived, depreciable assets that include building structures held for productive use including any addition, improvement, or renovation to the structure, such as interior masonry, interior flooring, electrical, and plumbing.	Baxter International Inc.'s buildings and leasehold improvements increased from 2009 to 2010 and from 2010 to 2011.
Machinery and equipment	Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services.	Baxter International Inc.'s machinery and equipment increased from 2009 to 2010 and from 2010 to 2011.
Equipment with customers	The amount of lessor property subject to or available for lease, at cost adjusted for any previously recognized impairment charges, by major property class, as of the balance sheet date.	Baxter International Inc.'s equipment with customers increased from 2009 to 2010 and from 2010 to 2011.
Construction in progress	Carrying amount at the balance sheet date of long-lived asset under construction that include construction costs to date on capital projects that have not been completed and assets being constructed that are not ready to be placed into service.	Baxter International Inc.'s construction in progress declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
Property, plant and equipment, at cost	Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation.	Baxter International Inc.'s property, plant and equipment, at cost increased from 2009 to 2010 and from 2010 to 2011.
Property, plant and equipment (PP&E), net	Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment.	Baxter International Inc.'s property, plant and equipment (PP&E), net increased from 2009 to 2010 and from 2010 to 2011.

Property, Plant and Equipment Ratios (Summary)

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Baxter International Inc., Property, Plant and Equipment Ratios

	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
Average age	%	%	%	%	%
Estimated total useful life (years)
Estimated age, time elapsed since purchase (years)
Estimated remaining life (years)

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient.	Baxter International Inc.'s average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then slightly improved from 2010 to 2011.
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors.	Baxter International Inc.'s estimated total useful life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	Baxter International Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011.
Estimated remaining life		Baxter International Inc.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.

Average Age

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	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization
Property, plant and equipment, at cost
Land
Ratio
Average age¹	%	%	%	%	%

2011 Calculations

¹ Average age = 100 × Accumulated depreciation and amortization ÷ (Property, plant and equipment, at cost – Land)
= 100 × ÷ ( – ) = %

Ratio	Description	The company
Average age	As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient.	Baxter International Inc.'s average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then slightly improved from 2010 to 2011.

Estimated Total Useful Life

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		Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
	Selected Financial Data (USD $ in millions)
	Property, plant and equipment, at cost
	Land
	Depreciation and amortization expense
	Ratio
	Estimated total useful life (years)¹

2011 Calculations

¹ Estimated total useful life (years) = (Property, plant and equipment, at cost – Land) ÷ Depreciation and amortization expense
= ( – ) ÷ =

Ratio	Description	The company
Estimated total useful life	Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors.	Baxter International Inc.'s estimated total useful life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.

Estimated Age, Time Elapsed Since Purchase

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		Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
	Selected Financial Data (USD $ in millions)
	Accumulated depreciation and amortization
	Depreciation and amortization expense
	Ratio
	Time elapsed since purchase (years)¹

2011 Calculations

¹ Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense
= ÷ =

Ratio	Description	The company
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	Baxter International Inc.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011.

Estimated Remaining Life

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		Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
	Selected Financial Data (USD $ in millions)
	Property, plant and equipment (PP&E), net
	Land
	Depreciation and amortization expense
	Ratio
	Estimated remaining life (years)¹

2011 Calculations

¹ Estimated remaining life (years) = (Property, plant and equipment (PP&E), net – Land) ÷ Depreciation and amortization expense
= ( – ) ÷ =

Ratio	Description	The company
Estimated remaining life		Baxter International Inc.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.

Baxter International Inc. (BAX) | Analysis of Property, Plant and Equipment

Property, Plant and Equipment Accounting Policy

Property, Plant and Equipment Disclosure

Property, Plant and Equipment Ratios (Summary)

Average Age

Estimated Total Useful Life

Estimated Age, Time Elapsed Since Purchase

Estimated Remaining Life

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