Kindred Healthcare, Inc. and PharMerica Corporation
Cost Basis Allocation
On July 31, 2007, Kindred Healthcare, Inc. (“KND” or the “Company”) and AmerisourceBergen Corporation completed the spin-offs and subsequent combination of their institutional pharmacy services businesses to form PharMerica Corporation (“PMC”). Following the spin-offs, the institutional pharmacy services businesses were merged with subsidiaries of PMC. In the merger, each holder of KND common stock received 0.3660241 shares of PMC common stock for each share of KND common stock.
As a consequence of the spin-offs and merger, the cost basis of KND common stock held by you will be apportioned between your KND common stock and the shares of PMC common stock that you received, in proportion to the fair market value of such shares.
The following is an example of the allocation of your cost basis:
| August 1, 2007 Common Stock Fair Market Value: |
KND |
$20.78 |
| August 1, 2007 Common Stock Fair Market Value: |
PMC |
$17.12 |
| Allocation |
||
| KND (1 share) |
$20.78 |
76.82% |
| PMC (0.3660241 shares) |
$ 6.27 |
23.18% |
| Total |
$27.05 |
100.00% |
Therefore, allocation of cost basis would be 76.82% to KND common stock and 23.18% to PMC common stock. If you acquired KND shares on different dates or at different prices, you should perform this allocation for each holding.
The above example reflects the average of the high and the low of August
1, 2007 trading of both KND and PMC on the NYSE. The Company recommends
that you consult with your tax advisor in determining your allocation
of basis between KND and PMC common shares.
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