Tax Cost Basis
On April 1, 2000, Edwards Lifesciences spun off from Baxter. At this time, shareholders were given 1 Edwards share for every 5 shares of Baxter stock. Below is some information to assist you in computing the tax basis. However, since individual situations vary greatly based on specific financial conditions, we recommend you contact your accountant or tax professional for the latest reporting guidelines appropriate to you.
|Baxter (Regular Way)||Edwards Lifesciences (When Issued)|
|March 31, 2000 closing price on the NYSE||$62.6875||$13.5625|
Mar. 31, 2000
Market Value (1)
Per Previous Share
of Baxter Common (2)
as a Percent
of Total (3)
to Determine New
Per Share Cost Basis (4)
To calculate the cost basis of your Baxter stock (BAX):
Multiply the original total cost of your Baxter stock by 0.95673 (or 95.673%). The result is the new cost basis of your Baxter stock. (To calculate the cost basis per share, please see the ratios under Multiplier to Determine New Per Share Cost Basis found in the table above.)
To calculate the cost basis of your Edwards Lifesciences stock (EW):
Multiply the original total cost of your Baxter stock by 0.04327 (or 4.327%). The result is the new cost basis of your Edwards Lifesciences stock. (To calculate the cost basis per share, please see the ratios under Multiplier to Determine New Per Share Cost Basis found in the table above.)
(1) The closing market price for each stock on March 31. The closing market price of Baxter common stock trading regular way. The closing market price of Edwards common stock trading when issued.
(2) Since Edwards shares are being distributed on a 1-for-5 basis, the per share market values must be adjusted by dividing by five (5) and the Baxter shares must be adjusted to reflect the value without the value of the Edwards shares.
(3) These fractions represent the $59.9750 value of one share of Baxter common stock and the $2.7125 value of one-fifth (1/5) share of Edwards common stock received for one (1) share of Baxter common stock, in relation to the sum of such values, $62.6875.
(4) Multiplier applicable to the previous per share tax basis for Baxter common stock to determine the new per share cost basis for each (Baxter and Edwards) stock. This multiplier is determined by multiplying the percentage in column 3 for Baxter by one (1) for one full share of Baxter stock and the percentage in column 3 by five (5) to determine a full share of Edwards common stock.
On May 27, 2010, Edwards issued a 100% stock dividend for purposes of effecting a two-for-one split of its common stock. In a two-for-one stock split, each shareholder receives one additional share of stock for each share owned as of the date of record. As an example, if you owned 100 shares of Edwards’ common stock prior to the date of record, you would own a total of 200 shares after the split became effective. At the same time, the stock price would be reduced by half.
On November 19, 2015, Edwards announced a two-for-one stock split to be issued as a 100% stock dividend. The record date was November 30, 2015. The distribution date was December 11, 2015. Edwards stock began trading on the NYSE at the new split-adjusted price on December 14, 2015.
Additional shares received pursuant to the stock split are deemed for U.S. tax purposes to have been acquired on the same date as the original shares. Each shareholder’s aggregate tax basis in the shares of common stock will not change as a result of the dividend. Following the dividend, each shareholder’s tax basis will be divided equally between the existing shares and the new shares distributed in connection with the dividend. For more detailed information, we recommend you consult your tax advisor.
To download the current IRS Form 8937: Report of Organizational Actions Affecting Basis of Securities click here.
David K. Erickson
Vice President, Investor Relations
phone: (949) 250-6826
Sr. Manager, Investor Relations
phone: (949) 250-2752