UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-15403
A. Full title of the plan and the address of the plan, if different
from that of the Issuer named below:
M&I Retirement Program
B. Name of the issuer of the securities held pursuant to the plan and
the address of its principal executive office:
MARSHALL & ILSLEY CORPORATION
770 North Water Street
Milwaukee, Wisconsin 53202
Financial Statement and Exhibits
--------------------------------
(a) Financial Statements:
---------------------
M&I Retirement Plan
-------------------
Report of Independent Registered Public Accounting Firm.
Statements of Net Assets Available for Benefits
as of December 31, 2006 and 2005.
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 2006 and 2005.
Notes to Financial Statements as of and for the
Years Ended December 31, 2006 and 2005.
Supplemental Schedule, Form 5500, Schedule H,
Part IV, Line 4(i)
Schedule of Assets (Held at End of Year)
as of December 31, 2006.
(b) Exhibits:
---------
23 Consent of Independent Registered Public Accounting Firm -
Deloitte & Touche LLP
M&I Retirement Plan
Financial Statements as of and for the
Years Ended December 31, 2006 and 2005,
Supplemental Schedule as of December 31, 2006,
and Report of Independent Registered Public Accounting Firm
M&I RETIREMENT PLAN
TABLE OF CONTENTS
-----------------
Page
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for
Benefits as of December 31, 2006 and 2005 2
Statements of Changes in Net Assets
Available for Benefits for the
Years Ended December 31, 2006 and 2005 3
Notes to Financial Statements as of and for
the Years Ended December 31, 2006 and 2005 4-14
SUPPLEMENTAL SCHEDULE - 15
Form 5500, Schedule H, Part IV, Line 4i --
Schedule of Assets (Held at End of Year)
as of December 31, 2006 16
NOTE: All other schedules required by Section 2520.103-10
of the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been
omitted because they are not applicable.
[Deloitte & Touche LLP Letterhead]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustee and Participants of the
M&I Retirement Plan:
We have audited the accompanying statements of net assets available for
benefits of the M&I Retirement Plan (the "Plan") as of December 31, 2006
and 2005, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Plan is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also 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, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December
31, 2006 and 2005, and the changes in net assets available for benefits for
the years then ended in conformity with accounting principles generally
accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of
assets (held at end of year) as of December 31, 2006 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 schedule is
the responsibility of the Plan's management. Such schedule has been
subjected to the auditing procedures applied in our audit of the basic 2006
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic 2006 financial statements
taken as a whole.
/s/ Deloitte & Touche LLP
Milwaukee, Wisconsin
June 22, 2007
2
M&I RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2006 AND 2005
2006 2005
--------------- ---------------
ASSETS:
Investments - at fair value:
Master Trusts $ 769,051,701 $ 951,093,588
Investments 762,185,948 --
Loans to participants 385,449 348,547
-------------- --------------
Total investments 1,531,623,098 951,442,135
Receivables:
Employee contributions 1,903,555 1,677,296
Employer contributions, net of
forfeitures of $2,337,610 and
$1,681,955, respectively 43,690,284 43,628,339
Merged plans -- 6,647,976
Accrued income 730,028 --
-------------- --------------
Total receivables 46,323,867 51,953,611
-------------- --------------
Total assets 1,577,946,965 1,003,395,746
LIABILITIES -
Payables - pending trades 1,423,544 --
-------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS
AT FAIR VALUE 1,576,523,421 1,003,395,746
ADJUSTMENTS FROM FAIR VALUE TO CONTRACT
VALUE FOR FULLY BENEFIT-RESPONSIVE
INVESTMENT CONTRACTS 1,238,290 1,274,793
-------------- --------------
NET ASSETS AVAILABLE FOR BENEFITS $1,577,761,711 $1,004,670,539
============== ==============
See notes to financial statements.
3
M&I RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
2006 2005
--------------- ---------------
CONTRIBUTIONS:
Participants $ 50,712,947 $ 43,273,805
Employer 43,690,284 43,170,337
Participant rollovers 11,988,641 4,593,612
-------------- --------------
Total contributions 106,391,872 91,037,754
INVESTMENT INCOME:
Income from Master Trusts 107,093,281 45,495,866
Net appreciation in fair
value of investments 45,585,170 --
Dividends 8,402,947 --
Interest 4,804,451 22,107
-------------- --------------
Net investment income 165,885,849 45,517,973
-------------- --------------
DEDUCTIONS:
Benefits paid to participants (93,602,178) (57,185,639)
Administrative expenses (82,424) (14,437)
-------------- --------------
Total deductions (93,684,602) (57,200,076)
TRANSFERS IN DUE TO
PLAN MERGERS (Note 1) 394,498,053 6,647,976
-------------- --------------
NET INCREASE IN ASSETS AVAILABLE
FOR BENEFITS 573,091,172 86,003,627
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 1,004,670,539 918,666,912
-------------- --------------
End of year $1,577,761,711 $1,004,670,539
============== ==============
See notes to financial statements.
4
M&I RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
1. DESCRIPTION OF THE PLAN
The M&I Retirement Plan (the "Plan") is a defined contribution plan
which is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended (ERISA). Marshall & Ilsley
Corporation (the "Corporation") is the administrator of the Plan and
the Marshall & Ilsley Trust Company (the "Trustee"), a subsidiary of
the Corporation, is the trustee and recordkeeper of the Plan. The
Trustee holds all investments of the Plan.
The following descriptions of the Plan are provided for general
information purposes only. More complete information regarding the
Plan's provisions may be found in the plan document.
Plan Transfer and Mergers -- Effective February 16, 2006, the
components of the M&I Retirement Program -- M&I Retirement Plan and
the Employee Stock Ownership Plan were merged into a single plan. The
balance of the M&I Retirement Program -- Employee Stock Ownership
Plan of $372,983,777 was transferred and invested in the M&I
Corporation Common Stock fund investment option within the M&I
Retirement Plan.
On April 1, 2006, the Corporation completed the acquisition of Gold
Banc Corporation. All participants in the Gold Banc Corporation,
Inc. Employees' 401(k) Plan who were terminated due to a reduction in
force became 100% vested as of that date. Remaining participants
continued to be subject to the existing vesting schedule. The assets
of the Gold Banc Corporation, Inc. Employees' 401(k) Plan were merged
into the Plan. The Gold Banc Corporation, Inc. ESOP and Trust was
terminated, and participants could elect distribution options,
including rolling balances into the Plan. Total assets merged from
these plans were $20,039,077.
On January 3, 2006, the Corporation completed the acquisition of
AdminiSource Communications. All participants in the Adminisource
Communications 401(k) Profit Sharing Plan and Trust ("AdminiSource
Plan") became 100% vested as of that date, and the assets of the
AdminiSource Plan were merged into the Plan. Assets merged were
$1,363,720.
Other merger activity during 2006 totaled $111,479.
On November 18, 2005, the Corporation completed the acquisition of
LINK2GOV Corp. All participants in the LINK2GOV Corp. 401(k) Profit
Sharing Plan and Trust ("Link2Gov Plan") became 100% vested as of
that date. Effective December 31, 2005, the assets of the Link2Gov
Plan were merged into the Plan. Assets merged were $253,253.
On October 6, 2005, the Corporation completed the acquisition of
Brasfield Holdings, LLC. All participants in The Brasfield 401(k)
Plan ("Brasfield Plan") became 100% vested as of that date.
Effective December 31, 2005, the assets of the Brasfield Plan were
merged into the Plan. Assets merged were $806,950.
On August 11, 2005, the Corporation completed the acquisition of GHR
Systems, Inc. All participants in the GHR Systems, Inc. 401(k)
Profit Sharing Plan & Trust ("GHR Plan") became 100% vested as of
that date. Effective December 31, 2005, the assets of the GHR Plan
were merged into the Plan. Assets merged were $4,713,738.
5
On July 22, 2005, the Corporation completed the acquisition of
Med-i-Bank, Inc. All participants in the Med-i-Bank, Inc. 401(k)
Plan ("Med-i-Bank Plan") became 100% vested as of that date.
Effective December 31, 2005, the assets of the Med-i-Bank Plan were
merged into the Plan. Assets merged were $874,035.
Eligibility -- All employees of the Corporation and subsidiaries who
have completed one year of continuous service, as defined by the
Plan, are eligible to receive employer profit sharing contributions.
Employees may elect to make deferrals upon the date of hire.
Contributions -- Upon election to participate, the participant
designates under a salary reduction agreement the amount of the
annual contribution (0% to 50% of compensation, as defined), subject
to Internal Revenue Service (IRS) limitations. Employees may change
the amount of the annual contribution as often as they wish.
Participants who will reach at least age 50 by the end of the plan
year have the ability to make pre-tax 401(k) catch-up contributions,
subject to IRS limitations. The Corporation will make a guaranteed
matching contribution of 50%, up to a maximum of 6% of the
participant's compensation. Effective beginning in the 2006 plan
year, participants can elect to make post-tax contributions to the
Plan through Roth 401(k) contributions.
Corporation profit sharing contribution percentages are discretionary
and are determined by the Board of Directors on an annual basis. The
Corporation made profit sharing contributions of 8% of eligible
compensation during the years ended December 31, 2006 and 2005.
Vesting -- All employee contributions and Corporation matching
contributions and related income are fully vested at all times.
Corporation profit sharing contributions vest at the earliest of the
following dates:
a. The date the participant completed at least 5 years of vesting
service, as defined by the Plan.
b. The date of the participant's death while employed by the
Corporation and subsidiaries.
c. The date of participant's attainment of age 65 or earlier
disability.
d. The date of termination of the Plan (or partial termination as
to participants affected thereby) or the date of complete
discontinuance of contributions by the Corporation at a time
when the participant is employed by the Corporation or by a
subsidiary.
e. The date the participant's employment terminates due to
reduction in force.
Benefit Payments -- Upon termination, death, retirement, in the event
of disability, as defined, or financial hardship, a participant or
beneficiary is entitled to withdraw his or her vested interest in a
lump sum payment. Participants who are 59 or older may take pretax
withdrawals for any reason. In addition, after-tax contributions
made before 1987 and former Valley Bancorporation employee balances
from the former Valley Bancorporation plan are available for
distribution.
6
Participant Accounts -- Individual accounts are maintained for each
of the Plan's participants. Each participant's account is credited
with the participant's contributions, the participant's share of
Corporation contributions, and allocations of the Plan's income
(loss). Any related administrative expenses based on participant
earnings or account balances are deducted from the participant's
account. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's vested account.
Investment Options -- Participants may direct their pretax and
matched, Roth 401(k), and Corporation profit sharing contributions
and any related earnings thereon into eighteen investment options
designated by the Plan's investment committee in 1% increments.
Participants are able to change their investment elections daily.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting -- The accompanying financial statements have
been prepared in accordance with accounting principles generally
accepted in the United States of America.
Accounting Estimates -- The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States of America requires the Plan's management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein and disclosure of contingent assets
and liabilities. Actual results could differ from those estimates.
Contributions -- Contributions from employees are recorded in the
period the employer makes corresponding payroll deductions.
Contributions from the employer are accrued based upon amounts
required to be contributed as determined by the Plan.
Investment Valuation and Income Recognition -- Investments are stated
at fair market value except for the Marshall & Ilsley Stable
Principal Fund (the "Fund"), which is stated at fair value and then
adjusted to contract value. The Fund invests in guaranteed
investment contracts. Fully benefit-responsive investment contracts
are valued at fair value. Under the terms of the investment
contracts, the crediting interest rate is determined semi-annually
based on the insurance company's applicable rate schedule. There are
no limitations on guarantees of the contracts.
Quoted market prices are used to value investments held by the Plan
as well as the underlying investments of Master Trusts in which the
Plan invests. Shares of mutual funds are valued at quoted market
prices, which represent the net asset value of shares held by the
Plan at year end.
Management fees and operating expenses charged to the Plan for
investments in the mutual funds are deducted from income earned on a
daily basis and are not separately reflected. Consequently,
management fees and operating expenses are reflected as a reduction
of investment return for such investments.
Participant loans are valued at unpaid principal amounts. Purchases
and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividend income is recorded
on the ex-dividend date.
Administrative Expenses -- Significantly all administrative expenses
for the Plan were paid by the Plan for the years ended December 31,
2006 and 2005. In 2006 and 2005, trustee fees were paid by the
Corporation.
7
Payment of Benefits -- Benefit payments to participants are recorded
upon distribution. There were no amounts allocated to participants
who elected benefit payments but were not yet paid as of December 31,
2006 and 2005.
Risks and Uncertainties -- The Plan utilizes various investment
instruments, including mutual funds and a common collective fund.
Investment securities, in general, are exposed to various risks, such
as, interest rate, credit, and overall market volatility. Due to the
level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes could
materially affect the amounts reported in the financial statements.
Adoption of New Accounting Guidance -- The financial statements
reflect the retroactive adoption of Financial Accounting Standards
Board Staff Position, FSP AAG INV-1 and SOP 94-4-1, Reporting of
Fully Benefit-Responsive Contracts Held by Certain Investment
Companies Subject to the AICPA Investment Company Guide and
Defined-Contribution Health and Welfare and Pension Plans (the
"FSP"). As required by the FSP, the statements of net assets
available for benefits presents investment contracts at fair value as
well as an additional line item showing an adjustment of fully
benefit responsive contracts from fair value to contract value. The
statement of changes in net assets available for benefits is
presented on a contract value basis and was not affected by the
adoption of the FSP.
3. INVESTMENTS
The Plan's investments that represented 5% or more of the Plan's net
assets available for benefits as of December 31, 2006, are as
follows:
Marshall Intermediate Bond Fund* $ 90,649,501
Marshall Large Cap Growth & Income Fund* 99,707,266
M&I Master Trust -- Growth Balanced Fund* 124,481,874
M&I Master Trust -- Aggressive Stock Fund* 115,683,304
Vanguard Institutional Index Fund 161,052,180
M&I Stable Principal Fund* 99,589,121
M&I Master Trust -- Common Stock Fund* 483,014,635
* Represents party-in-interest
During the year ended December 31, 2006, the Plan's investments
(including gains and losses on investments bought and sold, as well
as held during the year) appreciated in value as follows:
Mutual funds $ 45,585,170
-------------
Net appreciation in fair
value of investments $ 45,585,170
=============
4. INTEREST IN MASTER TRUSTS
During 2005, the Plan's investments were commingled with the assets
of the M&I Retirement Program -- Employee Stock Ownership Plan in the
M&I Retirement Program Master Trust ("Master Trust"). Investment
income of the Master Trust was allocated to the participating plans
based on the individual participant balances. Upon merger of the M&I
Retirement Program -- Employee Stock Ownership Plan, as described in
Note 1, the Master Trust was dissolved.
8
The assets of the Plan were commingled and are not segregated in the
accounts of the trusts. The market value of the assets held in the
Master Trust as of December 31, 2005, is as follows:
M&I Retirement Program Master Trust
Investments:
Cash $ 37,004
Marshall Funds Mutual Funds:*
Intermediate Bond 93,781,483
Mid-Cap Growth 48,373,398
Mid-Cap Value 19,522,137
Large Cap Growth & Income 97,130,966
Large Cap Value 25,885,990
International Stock 36,348,286
M&I Master Trust -- Growth Balanced Fund* 97,369,207
M&I Master Trust -- Moderate Balanced Fund* 3,418,422
M&I Master Trust -- Aggressive Balanced Fund* 6,520,745
M&I Master Trust -- Aggressive Stock Fund* 94,931,423
M&I Master Trust -- Diversified Stock Fund* 10,546,969
Vanguard Institutional Index Fund 139,675,430
Managers Special Equity Fund 33,812,010
MFS Massachusetts Growth Fund 12,960,151
Nicholas Fund 44,860,061
M&I Stable Principal Fund* 90,097,738
Goldman Sachs Small-Cap Value Fund 17,428,614
M&I Master Trust -- Common Stock Fund* 438,727,812
Accrued income 659,518
Pending trades (1,666,372)
---------------
Total assets of the M&I Retirement Program
Master Trust -- fair value 1,310,420,992
Adjustment from fair value to contract
value for fully benefit-responsive
investment contracts 1,274,793
---------------
Total assets of the M&I Retirement Program
Master Trust $ 1,311,695,785
===============
* Represents party-in-interest
Allocations of the M&I Retirement Program Master Trust to
participating plans as of December 31, 2005, is as follows:
M&I Retirement Program --
M&I Retirement Plan $ 951,093,588 72.58 %
M&I Retirement Program --
Employee Stock Ownership Plan 359,327,404 27.42
-------------- -------
Total assets of the M&I Retirement
Program Master Trust at fair value $1,310,420,992 100.00 %
============== =======
9
M&I Retirement Program Master Trust income and its allocation to the
participating plans for the year ended December 31, 2005, is as
follows:
Dividend and interest income $ 19,785,365
Net appreciation in the fair value
of investments -- by type:
Mutual funds 21,470,760
Master trusts 4,099,711
--------------
Total M&I Retirement
Master Trust income $ 45,355,836
==============
M&I Retirement Program --
M&I Retirement Plan $ 45,495,866 100.31 %
M&I Retirement Program --
Employee Stock Ownership Plan (140,030) (0.31)
-------------- -------
Total income of M&I Retirement
Program Master Trust $ 45,355,836 100.00 %
============== =======
M&I Retirement Program Master Trust income and its allocation to the
participating plans for the period January 1, 2006 through February
16, 2006, is as follows:
Dividend and interest income $ 973,190
Net appreciation in the fair value
of investments -- by type:
Mutual funds 26,582,871
--------------
Total M&I Retirement
Master Trust income $ 27,556,061
==============
M&I Retirement Program --
M&I Retirement Plan $ 23,547,269 85.45 %
M&I Retirement Program --
Employee Stock Ownership Plan 4,008,792 14.55
-------------- -------
Total income of M&I Retirement
Program Master Trust $ 27,556,061 100.00 %
============== =======
Certain of the Plan's investment assets are held in trust accounts at
the Trustee and consist of undivided interests in investments. These
master trust accounts (the "Master Trusts") are established by the
Corporation and administered by the Trustee. Use of the Master Trust
permits the commingling of the Plan's assets with the assets of the
NYCE 401(k) Plan and the Missouri State Bank & Trust Company
Retirement Savings Plan for investment and administrative purposes.
Although assets of all three plans are commingled in the Master
Trusts, the Trustee maintains supporting records for the purpose of
allocating the net gain or loss of the investment account to the
participating plans. The net investment income of the investment
assets is allocated by the Trustee to each participating plan based
on the relationship of the interest of each plan to the total of the
interests of the participating plans.
10
The Plan's investments and income in the Master Trusts at December
31, 2006 and 2005, respectively, are summarized as follows:
M&I Master Trust -- Aggressive Stock Fund
2006 2005
--------------- ---------------
Investments -- whose fair
value is determined based
on quoted market prices --
mutual funds $ 116,363,654 $ 95,327,165
-------------- --------------
Net assets of the M&I Master Trust --
Aggressive Stock Fund $ 116,363,654 $ 95,327,165
============== ==============
Plan's interest in net assets
of the M&I Master Trust --
Aggressive Stock Fund $ 115,683,304 $ 94,225,463
============== ==============
Plan's interest in M&I Master Trust --
Aggressive Stock Fund as a
percentage of the total 99.42 % 98.84 %
============== ==============
Dividend and interest income $ 942,819 $ 840,833
Net appreciation in the fair
value of investments --
mutual funds 14,455,227 6,841,738
-------------- --------------
Total M&I Master Trust -- Aggressive
Stock Fund income $ 15,398,046 $ 7,682,571
============== ==============
M&I Master Trust -- Growth Balanced Fund
2006 2005
--------------- ---------------
Investments -- whose fair
value is determined based
on quoted market prices --
mutual funds $ 127,634,361 $ 100,303,141
-------------- --------------
Net assets of the M&I Master Trust --
Growth Balanced Fund $ 127,634,361 $ 100,303,141
============== ==============
Plan's interest in net assets
of the M&I Master Trust --
Growth Balanced Fund $ 124,481,874 $ 94,548,841
============== ==============
Plan's interest in M&I Master Trust --
Growth Balanced Fund as a
percentage of the total 97.53 % 94.26 %
============== ==============
Dividend and interest income $ 2,724,630 $ 2,167,638
Net appreciation in the fair
value of investments --
mutual funds 10,296,520 4,096,064
-------------- --------------
Total M&I Master Trust --
Growth Balanced Fund income $ 13,021,150 $ 6,263,702
============== ==============
11
M&I Master Trust -- Aggressive Balanced Fund
2006 2005
--------------- ---------------
Investments -- whose fair
value is determined based on
quoted market prices --
mutual funds $ 18,624,234 $ 8,511,436
-------------- --------------
Net assets of the M&I Master Trust --
Aggressive Balanced Fund $ 18,624,234 $ 8,511,436
============== ==============
Plan's interest in net assets
of the M&I Master Trust --
Aggressive Balanced Fund $ 16,613,782 $ 6,190,974
============== ==============
Plan's interest in M&I Master Trust --
Aggressive Balanced Fund as
a percentage of the total 89.21 % 72.74 %
============== ==============
Dividend and interest income $ 243,808 $ 112,596
Net appreciation in the fair
value of investments --
mutual funds 1,610,942 417,238
-------------- --------------
Total M&I Master Trust --
Aggressive Balanced
Fund income $ 1,854,750 $ 529,834
============== ==============
M&I Master Trust -- Moderate Balanced Fund
2006 2005
--------------- ---------------
Investments -- whose fair
value is determined based
on quoted market prices --
mutual funds $ 8,164,618 $ 4,840,861
-------------- --------------
Net assets of the M&I Master Trust --
Moderate Balanced Fund $ 8,164,618 $ 4,840,861
============== ==============
Plan's interest in net assets
of the M&I Master Trust --
Moderate Balanced Fund $ 6,880,572 $ 2,991,809
============== ==============
Plan's interest in M&I Master Trust --
Moderate Balanced Fund as
a percentage of the total 84.27 % 61.80 %
============== ==============
Dividend and interest income $ 179,817 $ 118,277
Net appreciation in the fair
value of investments --
mutual funds 370,800 109,334
-------------- --------------
Total M&I Master Trust --
Moderate Balanced
Fund income $ 550,617 $ 227,611
============== ==============
12
M&I Master Trust -- Diversified Stock Fund
2006 2005
--------------- ---------------
Investments -- whose fair
value is determined based
on quoted market prices --
mutual funds $ 23,233,811 $ 11,196,528
-------------- --------------
Net assets of the M&I Master Trust --
Diversified Stock Fund $ 23,233,811 $ 11,196,528
============== ==============
Plan's interest in net assets
of the M&I Master Trust --
Diversified Stock Fund $ 22,377,534 $ 9,867,745
============== ==============
Plan's interest in M&I Master Trust --
Diversified Stock Fund as
a percentage of the total 96.31 % 88.13 %
============== ==============
Dividend and interest income $ 227,035 $ 116,545
Net appreciation in the fair
value of investments --
mutual funds 2,384,163 774,757
-------------- --------------
Total M&I Master Trust --
Diversified Stock
Fund income $ 2,611,198 $ 891,302
============== ==============
M&I Master Trust -- Common Stock Fund
2006 2005
--------------- ---------------
Investments -- whose fair
value is determined based
on quoted market prices --
common stock $ 483,516,733 $ 438,991,418
-------------- --------------
Net assets of the M&I Master Trust --
Common Stock Fund $ 483,516,733 $ 438,991,418
============== ==============
Plan's interest in net assets
of the M&I Master Trust --
Common Stock Fund $ 483,014,635 $ 96,488,052
============== ==============
Plan's interest in M&I Master Trust --
Common Stock Fund as a
percentage of the total 99.90 % 21.98 %
============== ==============
Dividend and interest income $ 10,761,089 $ 9,654,107
Net appreciation (depreciation)
in the fair value of
investments -- mutual funds 48,675,405 (52,330,986)
-------------- --------------
Total M&I Master Trust -- Common
Stock Fund income (loss) $ 59,436,494 $ (42,676,879)
============== ==============
At December 31, 2006 and 2005, the M&I Master Trust -- Common Stock
Fund held 10,024,546 and 10,157,841 shares, respectively, of common
stock of the Corporation, the sponsoring employer, with a cost basis
of $142,705,068 and $131,799,672, respectively. During the year
ended December 31, 2006, the M&I Master Trust -- Common Stock Fund
recorded dividend income of $10,702,171.
13
5. FEDERAL INCOME TAX STATUS
The Plan has obtained a determination letter from the IRS dated
December 20, 2005, approving the Plan as qualified for tax-exempt
status. The Plan has been amended since receiving the determination
letter. However, the Corporation believes that the Plan is currently
designed and operated in compliance with the applicable requirements
of the Internal Revenue Code and the Plan and related trust continue
to be tax-exempt. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
6. EXEMPT PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are shares of mutual funds, a common
collective fund, and Master Trusts managed by the Trustee, as well as
common stock of the Corporation. The Corporation is the trustee as
defined by the Plan and, therefore, these transactions qualify as
exempt party-in-interest transactions. Fees paid by the Plan for
investment management services were included as a reduction of the
return earned on each fund.
7. LOANS TO PARTICIPANTS
The Plan does not offer new loans to active participants. All
existing loans are as a result of plan mergers due to acquisitions.
The loans are repayable through payroll deductions and were written
with original terms of one to twenty-five years. The interest rate
was based on prevailing market conditions and is fixed over the life
of the note. Interest rates on participant loans at December 31,
2006 and 2005, ranged from 4.00% and 10.50%.
8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The reconciliation of net assets available for benefits and changes
in net assets available for benefits per the financial statements to
the Form 5500 as of and for the year ended December 31, 2006, is as
follows:
Statement of net assets available for benefits:
Net assets available for benefits
per the financial statements $ 1,577,761,711
Adjustments from contract value to fair
value for fully benefit-responsive
investment contracts (1,238,290)
---------------
Net assets available for benefits per
the Form 5500 -- at fair value $ 1,576,523,421
===============
Statement of changes in net assets available for benefits:
Increase in net assets per the
financial statements $ 573,091,172
Adjustment from contract value to
fair value for fully benefit-responsive
investment contracts (1,238,290)
---------------
Net income per Form 5500 $ 571,852,882
===============
14
9. FORFEITURES
Forfeited nonvested accounts are used to reduce Corporation
contributions. Forfeitures of $2,337,610 and $1,681,955 were used to
reduce Corporation contributions during 2006 and 2005, respectively.
These forfeitures relate to the nonvested portions of the employer
profit sharing contributions.
10. PLAN TERMINATION
Although it has not expressed any intention to do so, the Corporation
has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions set forth in
ERISA. In the event that the Plan is terminated, all participants
would be 100 percent vested in their accounts.
11. SUBSEQUENT EVENT
In early April 2007, the Corporation announced its plan to separate
Marshall & Ilsley Corporation and Metavante Corporation into two
separate publicly traded companies. This transaction, which is
contingent upon satisfaction of various closing conditions, is
expected to close in the fourth quarter of 2007. The closing
conditions include approval of Marshall & Ilsley Corporation
shareholders, who will be asked to vote on the proposed transaction
at a special meeting that will be held on a date to be announced,
obtaining a favorable ruling from the Internal Revenue Service and
other regulatory approvals. The impact of this proposed transaction
on the Plan is currently unknown.
* * * * * *
15
SUPPLEMENTAL SCHEDULE
16
M&I RETIREMENT PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i --
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2006
Description of Investment,
Including Maturity Date,
Rate of Interest, Collateral, Current
Issuer and Par or Maturity Value Value
---------------------- ------------------------------ -------------
Cash $ 2,470
Marshall Intermediate
Bond Fund* Registered Investment Company 90,649,501
Marshall Mid-Cap
Growth Fund* Registered Investment Company 54,526,668
Marshall Mid-Cap
Value Fund* Registered Investment Company 26,582,348
Marshall Large Cap Growth
& Income Fund* Registered Investment Company 99,707,266
Marshall Large Cap
Value Fund* Registered Investment Company 34,612,464
Marshall International
Stock Fund* Registered Investment Company 64,724,215
M&I Master Trust -- Growth
Balanced Fund* Master Trust 124,481,874
M&I Master Trust -- Moderate
Balanced Fund* Master Trust 6,880,572
M&I Master Trust -- Aggressive
Balanced Fund* Master Trust 16,613,782
M&I Master Trust -- Aggressive
Stock Fund* Master Trust 115,683,304
M&I Master Trust -- Diversified
Stock Fund* Master Trust 22,377,534
Vanguard Institutional
Index Fund Registered Investment Company 161,052,180
Managers Special
Equity Fund Registered Investment Company 39,146,301
MFS Massachusetts
Growth Fund Registered Investment Company 14,017,631
Nicholas Fund Registered Investment Company 46,923,584
M&I Stable
Principal Fund* Common Collective Fund 99,589,121
Goldman Sachs Small-Cap
Value Fund Registered Investment Company 30,600,234
M&I Master Trust -- Common
Stock Fund* Master Trust 483,014,635
Various Participants Participant Loans (at interest
rates of 4% - 10.5%) 385,449
M&I Corporation
Common Stock* Common Stock 26,942
Other Various 25,023
---------------
$ 1,531,623,098
===============
* Represents party-in-interest
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed by the undersigned thereunto
duly authorized.
M&I Retirement Plan
/s/ Paul J. Renard
____________________________
Paul J. Renard
Senior Vice President,
Director of Human Resources
of the Marshall & Ilsley
Corporation and a Member
of the Committee of the
M&I Retirement Program
Date: June 29, 2007