EW · 10-Q · 2026Q2 · Full report

Litigation and Legal Risk

Edwards Lifesciences Corp · 2026-08-04 · Importance 71 · Surprise 60

The IRS is pursuing transfer-pricing adjustments involving Edwards’ Surgical/TAVR intercompany royalty transactions for tax years 2015–2017, with additional tax sought of $269.3 million before interest and a repatriation-tax offset. For 2018–2020, Final Notices of Proposed Adjustment would increase U.S. taxable income by $233.5 million, $625.3 million, $530.7 million, and $683.6 million across specified tax-election and intercompany-license matters. If no resolution is reached, Edwards expects the IRS to issue another notice in the third quarter of 2026 imposing 40% transfer-pricing penalties and to issue a Revenue Agent’s Report by the end of that quarter. The company intends to pursue administrative appeals and litigation, and an adverse resolution could materially affect its consolidated financial statements.

Key facts

• Certain litigation expenses were $6.3 million and $15.5 million during the three months ended June 30, 2026 and 2025, respectively, and $43.4 million and $26.4 million during the six months ended June 30, 2026 and 2025, respectively. source