U.S. and non-U.S. issuers of specified securities are subject to new U.S. tax basis reporting obligations under Section 6045B of the U.S. Internal Revenue Code of 1986, as amended (Code), which was enacted as part of the Energy Improvement and Extension Act of 2008. In general, effective January 1, 2011, if an issuer of a "specified security" takes an organizational action that affects the U.S. tax basis of that security, then the issuer, subject to certain exceptions, must file Form 8937 with the U.S. Internal Revenue Service (IRS) and furnish a copy of the form (or corresponding information statement) to its security holders or their nominees. As discussed below, an issuer is not required to file Form 8937 with the IRS or furnish a copy of the form to holders if the issuer posts the required information on its website. An issuer's failure to comply with such reporting obligations could give rise to significant penalties. If an issuer has not already done so, it should file Forms 8937 or post the required information on its website for 2011 organizational actions promptly.

Scope of Section 6045B Basis Reporting

The scope of the Section 6045B information reporting obligations is very broad. As noted, the new obligations apply both to U.S. and non-U.S. issuers of "specified securities." A "specified security" means any share of stock or any interest treated as stock (including American Depositary Receipts, or ADR) in a U.S. or non-U.S. corporation. For example, a non-U.S. issuer could be required to report information under Section 6045B not only with respect to its shares but also with respect to its ADRs. There are multiple triggers for Section 6054B reporting. In general, an issuer must comply with Section 6045B with respect to any organizational action that affects the U.S. tax basis of its securities. Such actions are not specifically enumerated in the Code or the implementing U.S. Treasury regulations, but include nontaxable stock distributions to shareholders, such as stock splits. In addition, depending on the U.S. income tax treatment of the organizational action, a merger, spin-off or certain cash distributions also could affect the tax basis of an issuer's securities and, accordingly, could require information reporting under Section 6045B.

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