Acquisition of Infiltrator - On July 31, 2019 (the “Closing Date”), the Company completed its Acquisition of IWT pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) dated July 31, 2019. IWT manufactures and sells wastewater systems for homes and provides drainage chambers for septic and storm water management. The Acquisition will combine the Company's industry leading position in stormwater management with IWT's leading platform in onsite septic waste management. The Merger Agreement was funded through the new Senior Secured Credit Facilities as further described below.

The following table summarizes the preliminary consideration paid, net of cash acquired. The amounts below are preliminary and are subject to closing adjustments as outlined in the Merger Agreement.

(Amounts in thousands)	Amount
Total fair value of consideration transferred	$	1,128,489
Less: cash acquired		48,489
Total net cash consideration paid	$	1,080,000

The following table summarizes the consideration paid and the preliminary purchase price allocation of the assets acquired and liabilities assumed. Due to the recent closing of the Acquisition, on July 31, 2019, the purchase price allocation for assets acquired and liabilities assumed is preliminary and will be finalized when valuations are complete and final assessments of the fair value of acquired assets and assumed liabilities are completed. Such finalizations may result in material changes from the preliminary purchase price allocations. The Company’s estimates and assumptions are subject to change during the measurement period (up to one year from the Closing Date), as the Company finalizes the valuations of assets acquired and liabilities assumed.

(Amounts in thousands)	Amount
Cash	$	48,489
Total current assets, excluding cash		68,675
Property, plant and equipment, net		82,424
Goodwill		578,709
Intangible assets, net		475,000
Other assets		14,410
Total current liabilities		(26,495	)
Deferred tax liabilities		(109,846	)
Other liabilities		(2,877	)
Total fair value of consideration transferred	$	1,128,489

The preliminary goodwill of $578.7 million represents the excess of consideration transferred over the preliminary fair value of assets acquired and liabilities assumed and is attributable to expected revenue synergies, as well as operating efficiencies and cost savings. The Company does not expect any of this goodwill to be deductible for income tax purposes and is assessing the impact of the Acquisition on the Company’s reportable segments.

The preliminary purchase price excludes transaction costs. During the three months ended June 30, 2019, the Company incurred $4.2 million of transaction costs related to the Acquisition such as legal, accounting, valuation and other professional services. These costs are included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

The identifiable intangible assets recorded in connection with the closing of the Acquisition are based on preliminary valuations include customer relationships, patents and developed technology, and tradename and trademarks totaling $475.0 million. Customer relationships are expected to be amortized using an accelerated method over an estimated useful life of 15 years. Patents and developed technology and tradename and trademarks are expected to be amortized on a straight-line basis over the respective useful lives of 10 and 20 years.

The unaudited pro forma information for the three months ended June 30, 2019 and 2018 presented below includes the effects of the Acquisition as if it had been consummated as of April 1, 2018, with adjustments to give effect to pro forma events that are directly attributable to the Acquisition. Adjustments include those related to the amortization of acquired intangible assets, increases in interest expense due to additional borrowings incurred to finance the Acquisition, transaction costs, the elimination of transactions between the Company and IWT and the estimated tax impacts thereof. The three months ended June 30, 2019 supplemental pro forma earnings were adjusted to exclude transaction cost of $4.5 million incurred in the three months ended June 30, 2019. The June 30, 2018 supplemental pro forma earnings were adjusted to include these charges and an additional $12.5 million of transaction costs. The unaudited pro forma information does not reflect any operating efficiency or potential cost savings that could result from the

consolidation of IWT. Accordingly, the unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the actual results of the combined company if the Acquisition had occurred at the beginning of the period presented, nor is it indicative of the future results of operations.

	Three Months Ended June 30,
(Amounts in thousands)	2019			2018
Net sales	$	483,944		$	450,655
Net loss attributable to ADS		(222,156	)		(14,778	)

New Senior Secured Credit Facilities - On July 31, 2019, the Company entered into the Credit Agreement by and among the Company, as borrower, Barclays Bank PLC, as administrative agent, the several lenders from time to time party thereto, and Barclays Bank PLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers, joint bookrunners, syndication agents and documentation agents.

The Credit Agreement provides for a term loan facility in an initial aggregate principal amount of up to $1.3 billion (the “Term Loan Facility”), a revolving credit facility in an initial aggregate principal amount of up to $350 million (the “Revolving Credit Facility”), a letter of credit sub-facility in the initial aggregate available amount of up to $50 million, as a sublimit of such Revolving Credit Facility (the “L/C Facility”) and a swing line sub-facility in the aggregate available amount of up to $50 million, as a sublimit of the Revolving Credit Facility (together with the Term Loan Facility, the Revolving Credit Facility and the L/C Facility, the “Senior Secured Credit Facility”).

On the Closing Date, the Company borrowed under the Credit Agreement which was used to (i) finance the Merger Consideration paid in connection with the closing of the Acquisition, (ii) repay the total outstanding amount as of the Closing Date under the Company’s PNC Credit Agreement, (iii) repay outstanding amounts of existing indebtedness incurred by IWT under its outstanding credit facility in effect prior to the Acquisition, and (iv) pay certain transaction fees and expenses associated with the Acquisition and the Credit Agreement.

The Term Loan Facility must be repaid in equal quarterly installments commencing on January 1, 2020 and continuing on the first day of each consecutive April, July, October and January thereafter. To the extent not previously paid, all then-outstanding amounts under the Term Loan Facility are due and payable on the maturity date of the Term Loan Facility, which is seven years from the Closing Date. Borrowings under the Revolving Credit Facility are available beginning on the Closing Date and, to the extent not previously paid, all then-outstanding amounts under the Revolving Credit Facility are due and payable on the maturity date of the Revolving Credit Facility, which is five years from the Closing Date.

At the option of the Company, borrowings under the Term Loan Facility and under the Revolving Credit Facility (subject to certain limitations) bear interest at either a base rate (as determined pursuant to the Credit Agreement) or at a Eurocurrency Rate (as defined in the Credit Agreement), plus the applicable margin as set forth therein from time to time. In the case of the Revolving Credit Facility, the applicable margin is based on the Company’s consolidated senior secured net leverage ratio (as defined in the Credit Agreement). All borrowings under the Term Loan Facility used to finance the Merger Consideration as described above initially bear interest at a Eurocurrency Rate applicable to Eurocurrency Loans (as defined in the Credit Agreement) denominated in U.S. Dollars. Beginning 53 days after the Closing Date, the applicable margin for the Term Loan Facility will be increased by 25 basis points every thirty days following the Closing Date until the earlier of (i) the Marketing Commencement Date (as defined in the Credit Agreement) or (ii) 113 days after the Closing Date.

The Company has agreed to secure all of its obligations under the Credit Agreement by granting a first priority lien on substantially all of its assets (subject to certain exceptions and limitations), and each of Stormtech, LLC, Advanced Drainage of Ohio, Inc. and Infiltrator Water Technologies, LLC (collectively the “Guarantors”) has agreed to guarantee the obligations of the Company under the Credit Agreement and to

secure the obligations thereunder by granting a first priority lien in substantially all of such Guarantor’s assets (subject to certain exceptions and limitations).

Repayment of Prudential Senior Notes - On July 29, 2019, the Company repaid in full all of its and its subsidiaries indebtedness and other obligations totaling $104.4 million under that certain Second Amended and Restated Private Shelf Agreement, dated as of June 22, 2017 (as amended the “Shelf Note Agreement”) of the Company’s Senior Notes (“Senior Notes”), by and among the Company, as issuer, the guarantors from time to time a party thereto, PGIM, Inc., as a purchaser and the other purchasers from time to time a party thereto (the “Shelf Noteholders”). The Company repaid the outstanding indebtedness under the Shelf Note Agreement using borrowings from the PNC Credit Agreement as in effect as of July 29, 2019. Concurrently with the repayment, the Shelf Noteholders authorized and directed PNC Bank, National Association, in its capacity as Collateral Agent (as defined in the Shelf Note Agreement) to release the security interests and liens securing the Shelf Note Agreement and the Shelf Note Agreement was terminated.

Repayment of PNC Credit Agreement - On the Closing Date, using borrowings of the new Term Loan Facility the Company repaid in full all of its and its subsidiaries indebtedness and other obligations totaling $239.2 million under the PNC Credit Agreement. Concurrently with the repayment, all security interests and liens held by the Collateral Agent (as defined in the PNC Credit Agreement) securing the PNC Credit Agreement were terminated and released and the PNC Credit Agreement was terminated.