<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 1-4448
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Baxter Healthcare Corporation of
Puerto Rico Savings and Investment Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Baxter International Inc.
One Baxter Parkway
Deerfield, IL 60015
(847) 948-2000
<PAGE>
BAXTER HEALTHCARE
CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Financial Statements and Supplemental Schedule
December 31, 1999 and 1998
<PAGE>
BAXTER HEALTHCARE CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Financial Statements and Supplemental Schedule
December 31, 1999 and 1998
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Page
Financial statements:
--------------------
Report of Independent Accountants........................................ 1
Statement of Net Assets Available for
Benefits as of December 31, 1999 and 1998............................... 2
Statement of Changes in Net Assets
Available for Benefits for the years ended
December 31, 1999 and 1998............................................. 3
Notes to Financial Statements............................................ 4-8
Supplemental Schedule:*
----------------------
Exhibit I - Schedule of Assets Held
for Investment Purposes as of December 31, 1999......................... 9
* Other schedules required by Section 2520.103-10 of the Department of Labor
Rules and Regulations for Reporting and Disclosure under ERISA have been
omitted because they are not applicable.
<PAGE>
Report of Independent Accountants
To the Participants and Administrative Committee of the
Baxter Healthcare Corporation of Puerto Rico
Savings and Investment Plan
In our opinion, the accompanying statement of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Baxter Healthcare Corporation of Puerto Rico Savings and Investment Plan
at December 31, 1999 and 1998, and the changes in net assets available for
benefits for the year then ended in conformity with accounting principles
generally accepted in the United States. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with auditing standards generally accepted in
the United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule and fund information are the responsibility of
the Plan's management. This supplemental schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
PricewaterhouseCoopers LLP
San Juan, Puerto Rico
May 24, 2000
1
<PAGE>
BAXTER HEALTHCARE CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Statement of Net Assets Available for Benefits
December 31, 1999 and 1998
--------------------------------------------------------------------------------
1999 1998
Assets:
Investments, at fair value:
Investments $17,812,729 $11,196,405
Participant loans 385,467 723,657
Cash 1,625 93
----------- -----------
Total assets 18,199,821 11,920,155
Liabilities:
Refunds and forfeitures due to employer 894 6,270
----------- -----------
Net assets available for benefits $18,198,927 $11,913,885
=========== ===========
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
BAXTER HEALTHCARE CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1999 and 1998
--------------------------------------------------------------------------------
1999 1998
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of assets $ 1,670,238 $ 854,217
Interest and dividends 78,950 88,976
----------- -----------
1,749,188 943,193
Less - investment expenses (3,361) -
----------- -----------
1,745,827 943,193
----------- -----------
Contributions:
Employer contributions 1,953,085 1,861,716
Employee contributions 4,001,956 4,132,280
----------- -----------
5,955,041 5,993,996
----------- -----------
Transfers from other plans - 5,346,055
----------- -----------
Total additions 7,700,868 12,283,244
Deductions from net assets attributed to:
Benefits paid 1,415,826 369,359
----------- -----------
Net increase 6,285,042 11,913,885
Net assets available for benefits:
Beginning of year 11,913,885 -
----------- -----------
End of year $18,198,927 $11,913,885
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
BAXTER HEALTHCARE CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
--------------------------------------------------------------------------------
1. General Description of the Plan
The following brief description of Baxter Healthcare Corporation of Puerto
Rico Savings and Investment Plan (the "Plan") is provided for general
information purposes only. Participants should refer to the Plan agreement
for more complete information.
General
The Plan is a defined contribution plan which became effective on January
1, 1998. The Plan covers substantially all employees of Baxter Healthcare
Corporation of Puerto Rico, Baxter Sales and Distribution Corporation,
Baxter Pharmacy Services Corporation, Perfusion Services of Baxter
Healthcare Corporation (for its Puerto Rico employees) and Baxter Caribe
Inc. (collectively, the "Company") who have one year of service. Baxter
Healthcare Corporation of Puerto Rico is the sponsor of the Plan. The Plan
was created for the purpose of providing retirement benefits to employees
and to encourage and assist employees in adopting a regular savings program
by means of payroll deductions through a plan that qualifies under the
applicable laws of the Commonwealth of Puerto Rico and the United States
Internal Revenue Code ("IRS"). The Plan is subject to the provisions of the
Employee Retirement Security Act of 1974 ("ERISA").
Contributions
Plan participants may authorize the Company to make payroll deductions
under the Plan ranging from 1% to 10% of their pre-tax monthly
compensation, limited to a maximum of $8,000 a year. The Company matches a
participant's savings contributions at the rate of 50 cents for each dollar
of a participant's pre-tax contribution, up to a maximum of 6% of a
participant's compensation. The Company may make additional distributions
in such amounts as the Company may determine.
Participant Accounts
Each participant's account is credited with the participant's contribution
and allocations of (a) the Company's contribution, and (b) Plan earnings.
Allocations are based on participant earnings or account balances, as
defined. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's vested account. The net income of
the Plan is posted to the participant's accounts on a quarterly basis.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching and discretionary
contributions portion of their accounts plus actual earnings thereon is
based on years of service. The contributions vest in accordance with the
following vesting schedule:
Years of Service Vesting %
1 20
2 40
3 60
4 80
5 or more 100
4
<PAGE>
BAXTER HEALTHCARE CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
--------------------------------------------------------------------------------
Employees are fully vested in the Company's matching contributions account,
regardless of years of service with the Company, upon attaining age 65 or
becoming disabled in accordance with the provisions of the Plan or die
while employed by the Company.
Forfeitures
The portion of any participant's matching contribution account which is not
vested will become a forfeiture upon such participant's termination of
employment and will be applied to reduce future Company's matching
contributions on a periodic basis. Forfeitures for the years ended December
31, 1999 and 1998 amounted to $11,716 and $5,998, respectively.
Investment Options
Upon enrollment in the Plan, a participant may elect to have his/her
contributions invested in one or more of the following investment funds:
Fund: Description:
Stable Income Fund The Fund invests primarily in
guaranteed investment contracts
from insurance companies and other
fixed income securities.
Composite Fund The Fund invests in stocks of U.S.
companies and government and
corporate bonds.
General Equity Fund The Fund invests in stocks from
U.S. companies that are considered
to have growth potential.
S&P 500 Equity Index Fund The Fund attempts to duplicate the
performance of the Standard and
Poor's 500 Index, which consists of
the stocks of 500 of the largest
companies in the U.S.
International EAFE Equity Index Fund The Fund invests in equities of
large companies in Europe,
Australia and the Far East.
Baxter Common Stock Fund The primary investment of this fund
is in Baxter International Inc.
Common Stock.
Participants may change their investment options quarterly.
5
<PAGE>
BAXTER HEALTHCARE CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
--------------------------------------------------------------------------------
Payments of Benefits
Plan participants can not request withdrawals from the Plan unless they are
59 1/2 years old or incur a financial hardship. If a participant suffers
financial hardship, as defined in the Plan agreement, the participant may
request a withdrawal only from his or her contributions. On termination of
service due to disability, retirement or other reasons, a participant may
elect to receive either a lump sum amount equal to their entire account
balance or installment payments. On termination of service due to other
reasons, participants are entitled to receive their vested account balance.
In the case of a participant termination because of death, the entire
vested amount is paid to the person or persons legally entitled thereto.
Plan Expenses and Administration
Banco Popular de Puerto Rico and State Street Bank and Trust Company serve
as trustees for the Plan.
The Administrative Committee is responsible for the general administration
of the Plan and for carrying out the provisions thereof. The Investment
Committee has authority, responsibility and control over the management of
the assets of the Plan. Members of both committees are appointed by the
Board of Directors of Baxter International Inc. ("Baxter"), the Company's
parent.
All expenses of the Plan are currently borne by the Plan.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method
of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Investments Valuation and Income Recognition
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which represent
their net asset value at year end. Baxter common stock is valued at its
quoted market price. Participant loans are valued at cost which
approximates fair value.
6
<PAGE>
BAXTER HEALTHCARE CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
--------------------------------------------------------------------------------
Plan investment return includes dividend and interest income, gains and
losses on sales of investments and unrealized appreciation or depreciation
of investments. The financial statements reflect the net appreciation in
the fair value of the Plan's investments. This net appreciation consists of
realized gains and losses calculated as the difference between proceeds
from a sales transaction and cost determined on a moving average basis, and
unrealized gains and losses calculated as the change in the fair value
between beginning of the year (or purchase date if later) and the end of
the year.
Purchases and sales of securities are recorded on the trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the declaration date.
Contributions
Employee and Company matching contributions are recorded in the plan year
period in which the Company makes the payroll deductions from the
participant's earnings.
Transfer of Assets to Other Plans
Company employees or retirees may elect to transfer their savings to other
plans qualified by the Puerto Rico Department of the Treasury or by the
IRS.
Payment of Benefits
Benefits are recorded when paid.
3. Investments
The following presents the Plan's investments that represent five percent
or more of the Plan's net assets at December 31, 1999:
<TABLE>
<CAPTION>
1999 1998
# of # of
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Mutual Funds:
Stable income 1,084,773 $3,470,865 791,799 $2,425,116
Composite 485,258 2,640,281 371,603 1,911,781
General Equity 306,231 2,770,518 232,057 1,893,003
S&P 500 Equity Index 2,290,361 6,923,698 1,583,146 3,940,955
Common stock - Baxter International Inc. 225,475 1,177,136 137,659 729,991
Participant - loans - - - 723,657
</TABLE>
7
<PAGE>
BAXTER HEALTHCARE CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
December 31, 1999 and 1998
--------------------------------------------------------------------------------
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $1,670,238 as follows:
Mutual funds $1,686,033
Common stock (15,795)
----------
$1,670,238
==========
4. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to reduce, suspend or discontinue its contributions at
any time and to terminate the Plan subject to the provisions of ERISA. In
the event the Plan terminates, the interest of each participating employee
in the Plan shall be fully vested and such termination shall not reduce the
interest of any participating employee or their beneficiaries accrued under
the Plan up to the date of such termination.
5. Tax Status
The Puerto Rico Department of Treasury has determined and informed the
Company by a letter dated January 1, 1998, that the Plan is designed in
accordance with Section 1165(e) of the Puerto Rico Internal Revenue Code of
1994, as amended, and is, therefore, exempt from income taxes.
On October 29, 1999, the Company obtained a favorable determination letter
from the Internal Revenue Services stating that the Plan is in compliance
with the Internal Revenue Code regulations.
6. Transfer of Assets
Included in total transfers from other plans, for the year ended December
31, 1999 are net assets of $5,346,055, which were transferred from the BOC
Group, Inc. Savings Investment Plan (the "BOC Plan") due to the acquisition
of Baxter Caribe, Inc. by Baxter. Loans are limited to those outstanding at
the time the BOC Plan's assets were transferred.
7. Related Parties
At December 31, 1999 and 1998, the Plan held shares of common stock of
Baxter, the Company's parent and units of participation in certain
investment funds of State Street Bank and Trust Company, one of the Plan's
Trustee. These transactions are allowable party-in-interest transactions
under ERISA and the regulations promulgated thereunder.
8
<PAGE>
SUPPLEMENTAL SCHEDULE
EXHIBIT I
BAXTER HEALTHCARE CORPORATION OF PUERTO RICO
SAVINGS AND INVESTMENT PLAN
Item 27 (a) - Form 5500, Schedule of Assets Held for Investment Purposes
December 31, 1999 and 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) (b) Identity of issue (c) Description of Investment (d) Cost (e) Current Value
<S> <C> <C> <C> <C>
State Street Bank and Trust Company:
Stable Income Fund 1,084,772.666 units $ 3,246,468 $ 3,470,865
Composite Fund 485,258.203 units 2,444,764 2,640,281
General Equity Fund 306,230.732 units 2,458,674 2,770,518
S&P 500 Equity Index Fund 2,290,360.888 units 5,605,571 6,923,698
International EAFE Equity Index Fund 490,547.819 units 656,098 830,231
* Baxter Common Stock Common stock - 225,474.758 1,109,833 1,177,136
* Participant Loans Maturing 1/1/99 - 4/15/2010;
8% to 11% 385,467 385,467
* Banco Popular de Puerto Rico Bank account 1,625 1,625
----------- -----------
$15,908,500 $18,199,821
=========== ===========
* Party in-interest
</TABLE>
9
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Plan Administrator has duly caused this annual report to be signed on its behalf
by the undersigned thereunto duly authorized.
BAXTER HEALTHCARE CORPORATION OF
PUERTO RICO SAVINGS AND INVESTMENT PLAN
Date: July 5, 2000 By: /S/ Brian P. Anderson
---------------------
Brian P. Anderson
Senior Vice President and
Chief Financial Officer
