Rowan Transaction (Tables)

9 Months Ended

Sep. 30, 2019

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The provisional amounts for assets acquired and liabilities assumed are based on preliminary estimates of their fair values as of the Transaction Date and are as follows (in millions):


	Amounts Recognized as of Merger Date		Measurement Period Adjustments⁽¹⁾		Estimated Fair Value
Assets:
Cash and cash equivalents	$	931.9	$	—	$	931.9
Accounts receivable⁽²⁾	207.1		(2.6)		204.5
Other current assets	101.6		—		101.6
Long-term notes receivable from ARO	454.5		—		454.5
Investment in ARO	138.8		2.5		141.3
Property and equipment	2,989.8		(14.2)		2,975.6
Other assets	41.7		(1.8)		39.9
Liabilities:
Accounts payable and accrued liabilities	259.4		(0.3)		259.1
Current portion of long-term debt	203.2		—		203.2
Long-term debt	1,910.9		—		1,910.9
Other liabilities	376.3		37.2		413.5
Net assets acquired	2,115.6		(53.0)		2,062.6
Less: Merger consideration	(1,402.8)		—		(1,402.8)
Estimated bargain purchase gain	$	712.8	$	(53.0)	$	659.8

⁽¹⁾The measurement period adjustments reflect changes in the estimated fair values of certain assets and liabilities, primarily related to long-lived assets, deferred income taxes and uncertain tax positions. The measurement period adjustments were recorded to reflect new information obtained about facts and circumstances existing as of the Transaction Date and did not result from subsequent intervening events. These adjustments resulted in a $53.0 million decrease to the bargain purchase gain within current period earnings, which is included in other, net, in our condensed consolidated statement of operations for the three-month and nine-month periods ended September 30, 2019.

⁽²⁾Gross contractual amounts receivable totaled $208.3 million as of the Transaction Date.

Unaudited Pro Forma Impact

The following unaudited supplemental pro forma results present consolidated information as if the Rowan Transaction was completed on January 1, 2018. The pro forma results include, among others, (1) the amortization associated with acquired intangible assets and liabilities (2) a reduction in depreciation expense for adjustments to property and equipment (3) the amortization of premiums and discounts recorded on Rowan's debt (4) removal of the historical amortization of unrealized gains and losses related to Rowan's pension plans and (5) the amortization of basis differences in assets and liabilities of ARO. The pro forma results do not include any potential synergies or non-recurring charges that may result directly from the Rowan Transaction.


(in millions, except per share amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2019⁽¹⁾		2018		2019⁽¹⁾		2018
Revenues	$	552.0	$	624.0	$	1,729.5	$	1,952.0
Net loss	$	(151.1)	$	(250.0)	$	(795.2)	$	(607.1)
Loss per share - basic and diluted	$	(0.53)	$	(1.27)	$	(3.14)	$	(3.09)

⁽¹⁾Pro forma net loss and loss per share were adjusted to exclude an aggregate of $16.0 million and $85.4 million of transaction-related and integration costs incurred for the three-month and nine-month periods ended September 30, 2019, respectively. Additionally, pro forma net loss and loss per share exclude the measurement period adjustments and estimated gain on bargain purchase of $53.0 million and $659.8 million recognized during the three-month and nine-month periods ended September 30, 2019, respectively.