2. MERGER WITH THE PPG CHEMICALS BUSINESS

On January 28, 2013, Axiall Corporation ("Axiall") completed a series of transactions that resulted in our acquisition of substantially all the assets and liabilities of PPG Industries, Inc.'s ("PPG") business related to the production of chlorine, caustic soda and related chemicals, ("the Merged Business") and the related financings (collectively the "Transactions"). The operations of the Merged Business are included in our financial results from January 28, 2013, the closing date of the merger.

The purchase price of the Merged Business of approximately $2.8 billion consists of: (i) shares of our common stock received by PPG shareholders valued at approximately $1.8 billion, based on the closing stock sale price of $50.24 on the last trade date prior to the closing date of the merger; (ii) debt assumed of approximately $967.0 million; and (iii) the assumption of other liabilities, including pension liabilities and other post-retirement obligations. We manage the Merged Business as part of our chlorovinyls business, and have reported the results of operations of the Merged Business as part of our chlorovinyls reporting segment since January 28, 2013.

In connection with the Transactions, through December 31, 2013, we have paid approximately $56.3 million in fees and expenses, which included: (i) approximately $30.3 million of debt issuance costs, of which approximately $19.3 million was deferred; and (ii) approximately $26.0 million of related professional and legal fees.

Goodwill recognized from the acquisition of the Merged Business is primarily due to the increase in size and economies of scale of the merged companies, a significant increase in chlorine production flexibility, an increase in natural gas integration and strategic, geographic and product synergies. Approximately $5.9 million of the goodwill recognized in the merger is expected to be deductible for tax purposes. The fair value of the noncontrolling interest in TCI was estimated based on the present value of estimated future cash flows from TCI attributable to our minority partner's ownership percentage of TCI. The allocation of the purchase price to assets acquired and liabilities assumed, is set forth in the table below:

*(In millions)*	Amounts Recognized as of the Aquisition Date			Measurement Period Adjustments ⁽¹⁾			Final Allocation as of December 31, 2013

Cash and cash equivalents	$	26.7		$	-		$	26.7
Receivables		236.7			(2.4	)		234.3
Inventories		72.0			5.1			77.1
Prepaid expenses and other		11.9			(4.3	)		7.6
Property, plant and equipment		957.3			(30.4	) ⁽²⁾		926.9
Goodwill		1,454.3			118.4			1,572.7
Intangible assets		1,224.2			(18.4	) ⁽³⁾		1,205.8
Other assets		42.5			(0.3	)		42.2
Accounts payable		(97.8	)		1.2			(96.6	)
Income taxes payable		(4.7	)		-			(4.7	)
Accrued compensation		(20.6	)		-			(20.6	)
Other accrued taxes		(12.1	)		11.9			(0.2	)
Other accrued liabilities		(58.0	)		(4.5	)		(62.5	)
Deferred income taxes		(614.9	)		(66.5	) ⁽⁴⁾		(681.4	)
Pensions and other postretirement benefits		(279.0	)		26.7	⁽⁵⁾		(252.3	)
Other non-current liabilities		(67.9	)		(10.6	)		(78.5	)
Debt assumed		(967.0	)		-			(967.0	)
Noncontrolling interest		(130.3	)		0.3			(130.0	)


Total net assets acquired	$	1,773.3		$	26.2	⁽⁶⁾	$	1,799.5

⁽¹⁾: The measurement period adjustments did not have a significant impact on our consolidated net income for the quarters within the year ended December 31, 2013. Therefore, we did not retrospectively adjust those prior periods.
⁽²⁾: Primarily consists of the adjustments to the fair value of location-specific property, plant and equipment.
⁽³⁾: Primarily consists of the fair value of supply contracts, offset by adjustments to customer relationship intangible assets.
⁽⁴⁾: Deferred income taxes resulting from the revaluation of acquired assets and liabilities.
⁽⁵⁾: Primarily relates to the fair value of pension related assets that are being transferred with the merger and the resulting impact on the funded status of the pension liability.
⁽⁶⁾: Primarily relates to additional consideration based on the final funding status of certain pension plans, partly offset by a favorable net working capital settlement.

Summary Pro Forma Information. The following unaudited pro forma information reflects our consolidated results of operations as if the Transactions had taken place on January 1, 2012. The pro forma information includes primarily adjustments for depreciation based on the estimated fair value of the property, plant and equipment acquired in the merger, amortization of acquired intangible assets and interest expense on the debt we incurred to finance the Transactions. The pro forma information is not necessarily indicative of the results of operations that we would have reported had the Transactions closed on January 1, 2012, nor is it necessarily indicative of future results.

	Year Ended December 31,

*(In millions, except per share data)*	2013			2012
Net sales	$	4,773.7		$	4,977.4
Net income attributable to Axiall	$	162.7	^(a)	$	271.8	^(b)
Earnings per share from net income attributable to Axiall:
Basic	$	2.33		$	3.88
Diluted	$	2.31		$	3.87

^(a): In addition to the normal pro forma adjustments associated with the Transactions, this amount excludes: (i) the $25.9 million gain on acquisition of controlling interest in PHH; (ii) $13.4 million related to the inventory fair value purchase accounting adjustment; and (iii) $11.0 million related to the expensing of financing fees related to a $688.0 million bridge loan used in the Transactions.
^(b): In addition to the normal pro forma adjustments associated with the Transactions, this amount includes: (i) the $25.9 million gain on acquisition of controlling interest in PHH; (ii) $13.4 million related to the inventory fair value purchase accounting adjustment; and (iii) $11.0 million related to the expensing of financing fees related to a $688.0 million bridge loan used in the Transactions.

Disclosure of revenues and earnings of the Merged Business since January 28, 2013 on a stand-alone basis is not practicable as the Merged Business is not being operated as a stand-alone business.

Increase of Authorized Shares of Common Stock. In connection with the Transactions and effective January 28, 2013, the Company increased the number of authorized shares of Company common stock from 100 million shares to 200 million shares.