2. Merger and Purchase Price Accounting The Merger Date fair value of consideration transferred was $1.3 billion, which consisted of share-based awards, cash and Covia common stock. The following table presents the purchase price accounting of the acquired assets and liabilities assumed as of the Merger Date including measurement period adjustments: June 1, 2018 (in thousands) Cash and cash equivalents $ 105,303 Inventories, net 108,005 Accounts receivable 159,373 Property, plant, and equipment, net 1,649,876 Intangible assets, net 136,222 Prepaid expenses and other assets 9,563 Other non-current assets 4,182 Total identifiable assets acquired 2,172,524 Debt 748,722 Other current liabilities 160,117 Deferred tax liability 199,627 Other long-term liabilities 45,169 Total liabilities assumed 1,153,635 Net identifiable assets acquired 1,018,889 Non-controlling interest 453 Goodwill 295,224 Total consideration transferred $ 1,313,660 The fair values were based on managements analysis, including work performed by third-party valuation specialists. A number of significant assumptions and estimates were involved in the application of valuation methods, including sales volumes and prices, royalty rates, production costs, tax rates, capital spending, discount rates, and working capital changes. Cash flow forecasts were generally based on Fairmount Santrols pre-Merger forecasts. Valuation methodologies used for the identifiable assets acquired and liabilities assumed utilize d Level 1, Level 2, and Level 3 inputs including quoted prices in active markets and discounted cash flows using current interest rates. The value of the acquired raw material inventory was valued using the cost approach. The fair value of work-in progress inventory and finish goods inventory is a function of the estimated selling price less the sum of any cost to complete, costs of disposal and a reasonable profit. We estimated the value of the acquired property, plant, and equipment using a combination of the market approach, cost approach and income approach. The carrying value of the debt approximated the fair value of the debt at the Merger Date. Accounts receivable, other current liabilities, non-current assets and other long-term liabilities, excluding asset retirement obligations and contingent consideration included in other long-term liabilities, were valued at the existing carrying values as they represented the estimated fair value of those items at the Merger Date based on managements judgment and estimates. Asset retirement obligations assumed and the related assets acquired were adjusted to reflect revised estimates of the future cost of dismantling, restoring, and reclaiming of certain sites. The contingent consideration arrangement in the form of earn-out payments, is related to the purchase of certain coating technology. The fair value of the earn-out was determined using a scenario-based method due to the linear nature of the consideration payments. The fair value of the acquired intangible assets and the related estimated useful lives at the Merger Date were the following: Approximate Fair Value Estimated (in thousands) Useful Life Customer relationships $ 73,000 6 years Railcar leasehold interests 40,914 1-15 years Trade name 17,000 1 year Technology 5,000 12 years Other 308 95 years Total approximate fair value $ 136,222 The fair value of the customer relationship intangible assets were determined using the With and Without Method which is an income approach and considers the time needed to rebuild the customer base. The fair value of the railcar leasehold interest was determined using the discounted cash flow method. The fair value of the trade name and technology intangible assets was determined using the Relief from Royalty Method, which is based on a search of comparable third party licensing agreements and internal discussions regarding the significance of the trade names and technology and the profitability of the associated revenue streams. Goodwill of $78.1 million and $217.1 million allocated to the Industrial and Energy reporting units, respectively, is attributable to the earnings potential of Fairmount Santrols product and plant portfolio, anticipated synergies, the assembled workforce of Fairmount Santrol, and other benefits that we believe will result from the Merger. During the third quarter of 2018 it was determined that the goodwill allocated to the Energy reporting unit was impaired and was written off in its entirety. Refer to Note 22 for additional information. None of the goodwill is deductible for income tax purposes. We assumed the outstanding stock-based equity awards, (the Award(s)) of Fairmount Santrol at the Merger Date. Each outstanding Award of Fairmount Santrol was converted to a Covia award with similar terms and conditions at the exchange ratio of 5:1. We recorded $40.4 million of Merger consideration for the value of Awards earned prior to the Merger Date. The remaining value represents post-Merger compensation expense of $10.4 million, which will be recognized over the remaining vesting period of the Awards. In addition, at June 1, 2018, we recorded $2.4 million of expense for Awards whose vesting was accelerated upon the change in control and certain other terms pursuant to the Merger agreement and, therefore, considered a Merger-related expense and recorded in other non-operating expense, net in the accompanying Condensed Consolidated Statements of Income (Loss). Refer to Note 13 for additional information. Pro Forma Condensed Combined Financial Information (Unaudited) The following unaudited pro forma condensed combined financial information presents our combined results as if the Merger had occurred on January 1, 2017. The unaudited pro forma financial information was prepared to give effect to events that are (i) directly attributable to the Merger; (ii) factually supportable; and (iii) expected to have a continuing impact on our results. All intercompany transactions during the periods presented have been eliminated in consolidation. These pro forma results include adjustments for interest expense that would have been incurred to finance the transaction and reflect purchase accounting adjustments for additional depreciation, depletion and amortization on acquired property, plant and equipment and intangible assets. The pro forma results exclude Merger-related transaction costs and expenses that were incurred in conjunction with the Merger in the three and six months ended June 30, 2018. Three Months Ended June 30, Six Months Ended June 30, 2018 2018 (in thousands, except per share data) Revenues $ 712,412 $ 1,355,571 Net income 61,455 137,320 Earnings per share  basic $ 0.50 $ 1.13 Earnings per share  diluted $ 0.49 $ 1.12 The unaudited pro-forma condensed combined financial information is presented for informational purposes only and is not intended to represent or to be indicative of the combined results of operations or financial position that would have been reported had the Merger been completed as of the date and for the period presented, and should not be taken as representative of our consolidated results of operations or financial condition following the Merger. In addition, the unaudited pro-forma condensed combined financial information is not intended to project the future financial position or results of operations of Covia.