Target Hospitality (TH) 8-K Combined Financial Statements

Exhibit 99.5

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined financial information is prepared in accordance with Article 11 of Regulation S-X. The following unaudited pro forma condensed combined financial information presents the pro forma effects of the following transactions:

·the acquisition of Signor by Arrow Seller

·the combination of the Target Parent and Signor Parent financial statements resulting from both entities being under common control

·the reverse acquisition of Target Parent and Signor Parent by Platinum Eagle, collectively (the“Business Combination”); and

·the Debt Financing

Platinum Eagle is a blank check company incorporated on July 12, 2017 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Platinum Eagle has neither engaged in any operations nor generated any revenue to date. Based on its business activities, Platinum Eagle is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.

The following describes the above entities:

Target Parent

Target Parent was formed in September 2017. Target Parent, a limited liability company incorporated under the laws of Delaware, owns 100% of Target. Target Parent is owned by Algeco Global which is ultimately owned by a group of investment funds managed by TDR. On November 28, 2017, in a restructuring transaction of entities under common control of TDR and Algeco Global, Algeco Global conducted a carve-out transaction of Target and another subsidiary’s net assets from WSII and incorporated as a new division under the direct ownership of Target Parent effective as of December 22, 2017. Founded in 2006, Target is one of the largest suppliers of turnkey workforce services and housing solutions in North America. Target provides temporary living accommodations and comprehensive community services including: catering food services, maintenance, housekeeping, grounds-keeping, on-site security, overall workforce community management and laundry service.

Arrow Seller

Arrow Seller is a holding company owned by TDR through a group of its managed funds and related subsidiaries. On September 6, 2018, Arrow Seller acquired Signor, a limited liability company formed under the laws of the State of Delaware to own, develop, manage and operate workforce community facilities located primarily throughout Texas. Signor’s customers are primarily companies for which it provides workforce housing. Signor’s assets consist of housing facilities, equipment and infrastructure that provide workforce housing in oil and gas basins in the United States. The acquisition of Signor by Arrow Bidco was accounted for as a business combination under ASC 805 and Arrow Bidco recorded the assets acquired and liabilities assumed at fair value on a preliminary basis.

Description of the Business Combination

Pursuant to the terms of the Merger Agreements, Platinum Eagle, through its wholly-owned subsidiary, Topaz Holdings LLC, has agreed to acquire all of the equity interests of Target Parent and Signor Parent from the Algeco Seller and Arrow Seller, respectively, for approximately $1.311 billion, financed partly with Platinum Eagle’s IPO funds currently held in a trust account as well as leverage from a debt instrument and additional equity offering where necessary. Upon the closing of the business combination, Platinum Eagle will own 100% of Topaz Holdings LLC which will own 100% of Arrow Bidco, which will own 100% of each of Signor and Target, respectively, which will be sister companies below Arrow Bidco.

The Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, Platinum Eagle will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the business combination will be treated as the equivalent of Target Parent and Signor Parent issuing stock for the net assets of Platinum Eagle, accompanied by a recapitalization. The net assets of Platinum Eagle will be stated at historical cost, with no goodwill or other intangible assets recorded.

Prior to and on the closing of the business combination, Target Parent and Signor Parent are entities under ultimate TDR ownership resulting in common control. TDR is the ultimate parent of Target Parent; TDR owns 76% percent of Target Parent and the other 24% is held through TDR affiliated entities. TDR owns 100% of Arrow Seller. As a result of the common control of TDR, Target Parent and Signor parent have issued combined financial statements as of December 31, 2018. Upon the closing of the business combination, TDR will have majority ownership in the combined company. As such, the business combination assumes Target Parent and Signor Parent are “one” target versus separate targets to reflect the common control ownership by TDR. Target Parent and Signor Parent, deemed “one” target for purposes of the accounting acquirer determination, have been determined to be the accounting acquirer based on an evaluation of the following facts and circumstances:

·Target Parent and Signor Parent’s senior management will comprise the senior management of the combined company;

·TDR, through the Algeco and Arrow Sellers, will have the greatest voting interest in the combined entity;

·The combined company’s board of directors will initially consist of seven directors, four of which will be selected by TDR and two held by TDR;

·Target Parent and Signor Parent’s subsidiaries will comprise the ongoing operations of the combined company;

·Target Parent and Signor Parent are larger individually and in the aggregate than Platinum Eagle;

·The combined company’s headquarters will be that of Target Parent.

Consideration of $1.311 billion will consist of (A) Cash Consideration of $562 million and (B) the remaining $749 million will be paid to the Sellers in the form of shares of Target Hospitality common stock, par value $0.0001, with (i) 25.8 million shares delivered to the Algeco Seller and (ii) 49.1 million shares delivered to the Arrow Seller. The Cash Consideration shall come from the following sources: (1) the gross proceeds from the trust account, after giving effect to any and all redemptions; (2) the gross proceeds of new debt financings in an amount equal to at least $340 million; and (3) in each case upon the prior written consent of the Sellers, which may be granted in their sole discretion, at least $80 million gross proceeds from an Equity Offering and Backstop Offering. The Cash Consideration payable to the Algeco Seller will be increased to the extent any cash on the balance sheet of the combined business of Signor and Target, after giving effect to the business combination, the redemptions from the Trust Account, the proceeds from the Equity Offering and the proceeds from the Backstop Offering, if any, exceeds $5.0 million. In the event the Cash Consideration is increased, the Stock Consideration paid to Algeco Seller will be decreased on a dollar for dollar basis. Notwithstanding the foregoing, in no event shall the Cash Consideration be less than $562.0 million, but depending upon the amount of redemptions and additional equity raised through the Equity Offering and Backstop Offering, if any, the Cash Consideration and Stock Consideration will be adjusted accordingly.

The following represents the aggregate consideration (in thousands):

	As of December 31, 2018 (a)
Cash paid to Algeco Seller	$	563,137
Stock Issuance to Algeco Seller, at $10 per share	256,863
Stock Issuance to Arrow Seller, at $10 per share	491,000
Total Consideration	$	1,311,000

(a) Reflects subsequent changes to the trust account through the closing date of the transaction and actual redemptions.

Platinum Eagle has no specified maximum redemption threshold; however, the consummation of the business combination is conditioned upon, among other things, availability of at least $225 million of cash in the Company’s trust account, after giving effect to redemptions and equity offerings. Furthermore, in no event will the Company redeem public shares in an amount that would cause net tangible assets to be less than $5,000,001. The unaudited pro forma condensed combined financial information has been prepared based on actual redemptions.

Concurrently with the signing of the Merger Agreements, the Company entered into subscriptions to sell 8.0 million Common A Shares to investors. The table below has been updated to reflect this.

The following summarizes the pro forma common shares outstanding taking into consideration actual redemptions (in thousands):

	As of December 31, 2018 (a)
	Shares	%
Platinum Eagle Public Shareholders	14,322	14	%
Platinum Eagle Founders and Harry Sloan	3,034	3	%
Independent Directors	75	0	%
Total Platinum Eagle	17,431	17	%
Algeco Seller	25,686	26	%
Arrow Seller	49,100	49	%
Total TDR	74,786	75	%
PIPE Investor(s)	8,000	8	%
Total Shares at Closing [excluding shares held in escrow]	100,217	100	%
Other - Escrow Shares	5,016
Total Shares at Closing [including shares held in escrow]	105,233

(a) Reflects subsequent changes to the trust account through the closing date of the transaction and actual redemptions.

Platinum Eagle Acquisition Corporation

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of December 31, 2018

(Amounts in thousands of U.S. dollars)

	Platinum Eagle (Historical)		Target Parent and Signor Parent (Historical)		Pro Forma Adjustments				Combined Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	498	$	12,194	$	364,245		2a	$	25,456
	—		—		331,466			2b	—
					(185,329		)	2n
	—		—		(7,385		)	2g	—
	—		—		(563,137		)	2j	—
	—		—		80,000			2k	—
					(7,096		)	2d
Accounts receivable, net	—		57,106		—				57,106
Prepaid expenses and other current assets	76		3,965		—				4,041
Notes due from affiliates	—		638		(638		)	2d	—
Notes due from officers	—		1,083		(1,083		)	2m	—
Total current assets	574		74,986		11,043				86,603
Restricted cash	—		257		—				257
Cash and investments held in trust accounts	330,379		—		1,087			2b	—
					(331,466		)	2b
Property, plant and equipment, net	—		312,441		—				312,441
Land held for investment	—		—		—				—
Goodwill	—		34,180		—				34,180
Intangible assets, net	—		127,383		—				127,383
Deferred tax assets	—		12,420		—				12,420
Deferred financing costs, net	—		2,865		(2,865		)	2c	—
					1,888			2b
Notes due from officers	—		500		(500		)	2m	—
Total assets	$	330,953	$	565,032	$	(320,813	)		$	575,172
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	21,597	$	—			$	21,597
Accrued expenses	1,059		23,300		(241		)	2c	59,477
	—		—		28,500			2l	—
	—		—		(3,334		)	2d	—
					10,193			2g	—
Deferred revenue and customer deposits	—		17,805		—				17,805
Current portion of long-term debt	—		2,446		—			—	2,446
Total current liabilities	1,059		65,148		35,118				101,325
	—		—		—				—
Long-term debt	—		20,564		366,133			2b	366,133
	—		—		(20,564		)	2c	—
Notes due to affiliate	—		108,047		(108,047		)	2d	—
Deferred underwriting compensation	11,375		—		(11,375		)	2g	—
Deferred revenue and customer deposits	—		19,571		—				19,571
Asset retirement obligation	—		2,610		—				2,610
Other non-current liabilities	—		101		—				101
Total liabilities	12,434		216,041		261,265				489,740
Class A ordinary shares subject to possible redemption; 31,351,920 shares at approximately $10.00 per share at December 31, 2018	313,519		—		(313,519		)	2e	—
Preferred shares	—		—		—				—
Class A ordinary shares	—		—		7			2i	8
	—		—		1			2f	—
Class B ordinary shares	1		—		(1		)	2f	—
Additional paid-in capital	996		—		128,190			2e, 2n	85,424
	—		—		17,940			2c	—
	—		—		103,647			2d	—
	—		—		5,090			2f	—
	—		—		(7,793		)	2g	—
	—		—		(563,137		)	2h	—
	—		—		(7		)	2i	—
	—		—		348,991			2j	—
	—		—		(28,500		)	2l	—
	—		—		80,000			2k	—
	—		—		(1,583		)	2m	—
Retained earnings	4,003		—		(5,090		)	2f	—
	—		—		1,087			2b	—
Total Shareholders’ Equity	$	5,000	$	—	$	80,432			$	85,432
Members’ Equity	$	—	$	348,991	$	(348,991	)	2j	$	—
Total liabilities and shareholders’ equity	$	330,953	$	565,032	$	(320,813	)		$	575,172

Platinum Eagle Acquisition Corporation

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the year ended December 31, 2018

(Amounts in thousands of U.S. dollars, except share and per share data)

	Platinum Eagle (Historical)			Target Parent (Historical)			Signor (Unaudited) (3a)		Pro Forma Adjustments				Combined Pro Forma
REVENUE:
Services and lodging	$	—		$	186,865		$	61,242	$	—			$	248,107
Specialty rental	—			53,735			—		—				53,735
Total revenue	—			240,600			61,242		—				301,842
COSTS OF REVENUE:	—			—			—		—				—
Services and lodging	—			93,064			26,675		—				119,739
Specialty rental	—			10,372			—		—				10,372
Depreciation and amortization	$	—		$	31,610		$	3,988	$	1,530		3a	$	37,128
Loss on impairment	—			15,320			—		—			—	15,320
Gross profit	—			90,234			30,579		(1,530		)		119,283
OPERATING EXPENSES:
Selling, general, and administrative	1,618			41,340			3,360		(8,307		)	3g	38,946
	—			—			—		935			3h	—
Restructuring costs	—			8,593			—		—				8,593
Other depreciation and amortization	—			7,518			—		7,321			3a	14,839
Currency losses, net	—			149			—		—				149
Other expenses (income), net	—			(8,275		)	—		—				(8,275		)
Total operating expenses	1,618			49,325			3,360		(51		)		54,252
Operating (loss) income	(1,618		)	40,909			27,219		(1,479		)		65,031
OTHER (INCOME) EXPENSE:
Interest expense and other income, net	—			24,198			268		(23,101		)	3b	38,808
	—			—			—		34,308			3c	—
	—			—			—		3,135			3e	—
Other (income) expense, net	(5,629		)	—			—		5,629			3d	—
Other (income) expense, net	(5,629		)	24,198			268		19,971				38,808
Net income (loss) before income taxes	4,011			16,711			26,951		(21,450		)		26,223
Income tax (expense) benefit	—			(11,755		)	—		(2,302		)	3f	(14,057		)
Net income	$	4,011		$	4,956		$	26,951	$	(23,752	)		$	12,166
Net income per ordinary share, Class A - basic and diluted	$	0.17											$	0.12
Weighted average number of Class A ordinary shares outstanding - basic and diluted	32,500,000												100,217,035
Net loss per ordinary share, Class B - basic and diluted	$	(0.17	)
Weighted average number of Class B ordinary shares outstanding - basic and diluted	8,125,000

Note 1. Basis of Pro Forma Presentation

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 gives pro forma effect to the Business Combination and the related proposed financing transactions as if they had occurred on January 1, 2018. The unaudited pro forma condensed combined balance sheet as of December 31, 2018 assumes that the business combination and the related proposed financing transactions were completed on December 31, 2018.

The unaudited pro forma condensed combined balance sheet as of December 31, 2018 has been prepared using, and should be read in conjunction with, the following:

·Platinum Eagle’s audited year end balance sheet as of December 31, 2018 filed separately with the Securities and Exchange Commission “SEC”

·Target Parent and Signor Parent’s combined audited year end balance sheet as of December 31, 2018 included elsewhere in this filing.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 has been prepared using the following:

·Platinum Eagle’s audited statement of operations for the year ended December 31, 2018

·Target Parent and Signor Parent’s combined audited statement of operations for the year ended December 31, 2018 included elsewhere in this filing.

·Signor’s unaudited statement of operations for the period ended September 6, 2018 included elsewhere in previous filings.

All direct costs of the business combination will be recorded as an offset to additional-paid-in-capital, consistent with the accounting for equity recapitalizations. The unaudited pro forma condensed combined financial statements do not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the business combination.

The unaudited condensed pro forma adjustments reflecting the consummation of the business combination and related transactions are based on certain estimates and assumptions. These estimates and assumptions are based on information available as of the date of these unaudited pro forma condensed combined financial statements and may be revised as additional information becomes available. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material.

The unaudited pro forma condensed combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of what the actual results of operations and financial position would have been had the business combination and related transactions taken place on the dates indicated, nor do they purport to project the future consolidated results of operations or financial position of the combined company. They should be read in conjunction with the historical consolidated financial statements and notes thereto of Platinum Eagle and Combined Target Parent and Signor Parent.

The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are (1) directly attributable to the business combination, (2) factually supportable, and (3) with respect to the statement of operations, expected to have a continuing impact on the results of the combined company.

There were no significant intercompany balances or transactions between Platinum Eagle and the operating companies as of the date and for the period of these unaudited pro forma combined financial statements. All intercompany balances and transactions between Signor Parent and Target Parent have been eliminated within the audited combined financial statements.

At December 31, 2018, the Founder Group held 8.1 million founder shares. Prior to the closing of the Business Combination, the Founder Group will transfer 80,000 founder shares to the Company’s independent directors leaving the founders with approximately 8 million founder shares. As a condition to the closing of the business combination, Arrow Seller, Target Hospitality and the Founder Group will enter into an Earnout Agreement, in which the Founder Group will be entitled to up to 8.0 million shares. These shares will be placed in escrow and released as certain conditions are met or achieved. If Platinum Eagle delivers at least the Minimum Proceeds, the Founder Group shall be entitled to retain at Closing a minimum of 3 million Founder Shares (as defined in the Earnout Agreement) (if Gross Proceeds equal $225 million) and a maximum of 6 million Founder Shares (if Gross Proceeds equal $325 million) and if Gross Proceeds are more than $225 million and less than $325 million, such number shall be pro-rated such that the Founder Shares shall be calculated as (i) 3 million plus (ii) the product of (a) 3 million multiplied by (b) a fraction, the numerator of which is the amount by which Gross Proceeds exceeds $225 million and the denominator of which is $100 million. The balance of the Founder Shares not retained at Closing shall be placed in an escrow account at Closing to be released to the Founder Group in accordance with the terms and conditions of the Earnout Agreement as follows: at any time during the period of three years following the Closing Date, (i) if the closing price of the shares of Target Hospitality exceeds $12.50 per share for 20 out of any 30 consecutive trading days, 50% will be released to the Founder Group and (ii) if the closing price of the shares of Target Hospitality exceeding $15.00 per share for 20 out of any 30 consecutive trading days, the remaining 50% will be released to the Founder Group. The shares expected to be retained by the Founder Group based on the redemptions exercised of 3.0 million have been included in the pro forma shares outstanding. The remaining 5.0 million to be placed into escrow will no longer be beneficially owned by the Founder Group are excluded from the Founder Group’s ownership in the pro forma capitalization but are included in the total pro forma shares outstanding since such shares are generally considered legally outstanding and not subject to cancellation unless the earnout terms pursuant to the Earnout Agreement are not met.

The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the Platinum Eagle and the operating companies filed consolidated income tax returns during the periods presented.

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of Platinum Eagle’s shares outstanding, assuming the business combination and related transactions occurred on January 1, 2018.

Note 2. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

The pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of December 31, 2018 are as follows:

a)Reflects the net proceeds of $364.2 million of cash proceeds from borrowing and/or the issuance of the new Debt Financing to fund the consideration as part of the business combination. Gross proceeds of $380.0 million offset by debt borrowing/issuance costs of $12.5 million and a bond issuance discount of $3.3 million.. The deferred financing costs of $1.9 million associated to the ABL Facility have been classified as an asset to be amortized over the life of the ABL Facility while the deferred financing costs of $10.6 million associated with the Bridge Facility will be presented as a reduction to the gross debt outstanding and amortized over the life of the Bridge Facility. The bond discount is reflected as a reduction to the gross debt and will be amortized through interest expense over the life of the Bridge Facility.

b)Reflects the reclassification of $331.5 million of cash and cash equivalents held in the Platinum Eagle’s trust account that becomes available for transaction consideration, transaction expenses, redemption of public shares and the operating activities following the Business Combination. The cash and cash equivalents held within the Platinum Eagle trust account includes an additional $1.1 million of interest earned on the trust cash subsequent to December 31, 2018 through the closing date of the transaction.

c)Reflects the settlement of $20.5 million of principal for Target Parent’s ABL revolving credit facility and $0.2 million in accrued interest at Closing. This debt is settled through equity and will be paid out of Algeco Seller proceeds at closing which does not impact the cash balance of Target Parent. Also reflects the settlement of $2.9 million of associated deferred financing costs which will be settled through equity as a noncash transaction at closing.

d)Reflects the settlement of affiliated notes payable and receivable. Affiliated amounts to be settled consist of $0.6 million of affiliated notes receivable and $108.0 million of notes due to affiliates as well as the corresponding $3.3 million of interest accrued and not paid. $0.6 million of affiliated notes receivable will be settled through a noncash equity settlement. The balance of interest accrued and a portion of the notes due to affiliates will be settled in cash amounting to $7.1 million with the remaining $104.3 million being settled through an equity transaction.

e)Represents the reclassification of $313.5 million of common stock subject to possible redemption to permanent equity. Of the total $313.5 million of common stock subject to redemption, $128.1 million was reclassed to permanent equity net of $185.3 million of redemptions.

f)Reflects the reclassification of $1 thousand for the par value of Platinum Eagle Common B shares to the par account for Common A shares to account for the conversion of all outstanding Common B to Common A (refer to Note 4 herein) and elimination of $5.1 million of Platinum Eagle’s historical retained earnings inclusive of the incremental interest accrued within the trust account through the closing date of the transaction.

g)Transaction costs of $38.3 million expected to be incurred related to the closing of the business combination exclusive of any bond discount. Of that amount, $7.4 million relates to the cash settlement of deferred underwriting compensation incurred as part of Platinum Eagle’s IPO to be paid upon the consummation of a business combination ($2.4 of previously accrued underwriting will be accrued and paid subsequent to the transaction and $1.9 million was forgiven and will settled through additional paid in capital), $1.5 million relates to equity placement agent fees, $17.0 million relates to legal, bankers, accounting, pipe issuance and other fees (of which $7.8 million to be accrued at close as reflected and remaining $8.3 million was either paid or already accrued in the historical financials). The remaining amount consists of deferred financing costs of $12.5 million discussed in note 2(a) herein.

h)Reflects the payment of $563.1 million of cash consideration paid to the Algeco Seller in connection with the business combination. The calculation of cash consideration to the Algeco Seller is the sum of any available cash from the proceeds of the debt financing, trust account, and private placement proceeds less transaction costs and redemptions.

i)Reflects the recapitalization of Target Parent and Signor Parent as the issuance of 74.8 million shares of common stock at $0.0001 par value after considering redemptions.

j)Reflects the recapitalization of Target Parent and Signor Parent.

k)Reflects cash proceeds from private placement sale of 8.0 million Class A common shares for $80 million.

l)Reflects $28.5 million of bonuses to be paid to certain key executives for management of the business for the period prior to the business combination as well a certain bonus payments to former owners of Target. These amounts will be paid by Algeco seller upon the closing of the transaction and are reflected as an accrued liability and a decrease to transferred retained earnings.

m)Reflects the forgiveness of Target Parent officer loans which will be settled through equity and forgiven as of the Closing.

n)Reflects $185.3 million withdrawal of funds from the trust account to fund the redemption of 18.2 million shares of common stock at approximately $10.20 per share. Class A Ordinary shares of Platinum Eagle that were not redeemed were rolled over into Class A shares of our common stock.

Note 3. Unaudited Pro Forma Condensed Combined Statements of Operations

The pro forma adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018:

a)The acquisition of Signor on September 7, 2018 was recorded as a business combination under ASC 805. As Signor was deemed the predecessor in the acquisition, Signor Parent prepared blacklined historical financials as of and for the period from September 7 through September 30, 2018 to separate the predecessor and successor periods. The audited combined financial statements of Target Parent and Signor Parent do not reflect the historical statement of operations of the predecessor. As such, to properly reflect the full year of Signor and Signor Parent activity as if the transaction had taken place at the beginning of the year, we have included the unaudited statement of operations of Signor from January 1, 2018 through September 6, 2018.

Incremental depreciation and amortization expense as a result of the transaction were recorded in the income statements. Incremental amortization expense of $7.3 million for the year ended December 31, 2018 within “Other depreciation and amortization” line. The estimated $96.2 million fair value of customer relationships was determined using an income approach — multi period excess earnings method and are expected to amortize over nine years. Incremental depreciation expenses of $1.5 million for the year ended December 31, 2018 was recorded in “Depreciation and amortization”. The assumptions surrounding depreciation were that the stepped up values of fixed assets were depreciated over the lesser of the estimated remaining useful life that was assessed by the valuation firm or the standard useful lives of the asset based on the Company’s fixed asset depreciation policy.

In thousands	Fair Value		Estimated Life	Annual Amortization		Amount recorded at 12/31/18		Incremental 12.31.18 Amount
Buildings	$	35,171	7	$	5,024	$	2,039	$	2,985
Land Improvements	$	10,280	15	$	685	$	397	$	289
Furniture, fixtures, and equipment	$	9,561	7	$	1,366	$	545	$	821
Automobiles and trucks	$	503	7	$	72	$	59	$	13
Capital leases	$	863	7	$	123	$	146	$	(23	)
Land	$	11,179	—	$	—	$	—	$	—
CIP	$	10,773	—	$	—	$	—	$	—
Total tangible fixed assets	$	78,330		$	7,271	$	3,185	$	4,085

In thousands	Fair Value		Estimated Life	Annual Amortization		Amount recorded at 12.31.2018		Incremental 12.31.18 Amount
Customer Relationships	$	96,225	9	$	10,692	$	3,371	$	7,321

b)Represents the elimination of $23.1 million of historical net interest expense associated with third party and intercompany debt instruments that are being repaid as part of the Business Combination as described partially in notes 2(c) and for the year ended December 31, 2018.

c)Represents interest expense of $30.0 million for the year ended December 31, 2018 associated with the new debt issued in connection with the business combination as described in note 2(a) above as if the debt had been issued as of January 1, 2018. The interest was computed on the gross proceeds of the New ABL and Bridge Facility based on the rates found within the final term sheets for each of the respective facilities. The ABL Facility agreement contains two options for computing the interest rate including (a) Libor plus an applicable margin and another for base rate and an applicable margin. The Company used the Libor interest rate for ABL Facility as that rate is currently lower than the base interest rate. The interest rate for the New ABL Facility was calculated using the December 28, 2018 one month Libor of 2.52% and an applicable stated margin of 2.5% for a total calculated interest rate of 5.02%. The Bridge Facility interest rate was a stated 9.5%. No other material terms were associated with the calculation of interest for the New ABL and Bridge Facilities. These assumptions are summarized in the table in note 3(e) below.

d)Represents the elimination of $5.6 million of interest income on Platinum Eagle’s trust account for the year ended December 31, 2018.

e)Represents amortization of $2.5 million of deferred financing costs and $0.7 of bond discount for year ended December 31, 2018 associated with the new debt issued in connection with the business combination as described above as if the debt had been issued as of January 1, 2018. The deferred financing costs and bond discount were based on the final term sheet and included rates for upfront, underwriting, and agency fees for the New ABL Facility commitment and takeout fees and final pricing for the Bridge Facility. These costs were amortized over the expected term of 5 years or 60 months. Total deferred financing fees and bond discount of $15.8 million as described in note 2(a) consists of $1.9 million and $13.9 million (including the bond discount of $3.3 million) for the New ABL Facility and Bridge Facility using assumptions shown below:

(in thousands, except for interest rate and term)

Financing	Facility Size		Amount expected to be drawn at close		Term (years)	Effective Interest rates		Variable Deferred financing fees		Fixed Deferred financing fees		Total Deferred financing fees		Net Proceeds
New ABL Facility	$	125,000	$	40,000	5	5.02	%	1.50	%	$	50	$	1,888	$	38,113
Bridge Facility	$	340,000	$	340,000	5	9.50	%	3.25	%	$	82	$	13,867	$	326,133
	$	465,000	$	380,000						$	132	$	15,755	$	364,245

Refer to note 3(c) above for discussion of interest expense associated with the new debt financing.

f)As part of the business combination transactions, these entities will be part of a new combined company that will be subject to income tax. The Company recorded a tax effect of the 2018 operations herein and have also recorded a tax effected on the pro forma GAAP adjustments recorded used an estimated statutory blended rate of 24.2% for the year ended December 31, 2018.

g)Reflects the elimination of $8.3 million in non-recurring transaction costs incurred for the year ended December 31, 2018 that are directly related to the Business Combination.

h)Certain executives signed new employment agreements directly related to the Business Combination. These employment agreements resulted in $0.9 million of incremental cost over the prior year and consisted of cash, stock, and bonus. These amounts are all factually known and calculable.

Note 4. Earnings (Loss) Per Share

Pro Forma Weighted Average Shares (Basic and Diluted)

The following pro forma weighted average shares calculations have been performed for the year ended December 31, 2018. The unaudited condensed combined pro forma earnings (loss) per share (“EPS”), basic and diluted, are computed by dividing income (loss) by the weighted-average number of shares of common stock outstanding during the period.

The Unaudited Pro Forma Combined Share Information is derived from, and should be read in conjunction with, the Unaudited Pro Forma Condensed Combined Financial Information and related notes included elsewhere in this filing.

The Unaudited Pro Forma Combined Share Information does not purport to represent what the actual operations would have been had the Pro Forma transactions been completed or to forecast results of operations that may be achieved after the Pro Forma transactions. The unaudited pro forma earnings (loss) per share information below does not purport to represent what the value of would have been had the Pro Forma transactions been completed nor the earnings (loss) per share for any future date or period.

Prior to the Business Combination, Platinum Eagle had two classes of shares: Class A ordinary shares and Class B ordinary shares. The Class B ordinary shares are held by the Founders and Harry Sloan. As part of the transactions leading to the Business Combination, Platinum Eagle will re-domesticate in Delaware. On the effective date of the domestication, the currently issued and outstanding Class A ordinary shares and Class B ordinary shares, will automatically convert by operation of law, on a one-for-one basis, into shares of Platinum Eagle Delaware Class A common stock and Platinum Eagle Delaware Class B common stock, respectively. In connection with the Closing, each currently issued and outstanding share of Platinum Eagle Delaware Class B common stock will automatically convert on a one-for-one basis (subject to adjustment pursuant to the Interim Domestication Charter), into shares of Platinum Eagle Delaware Class A common stock, in accordance with the terms of the Interim Domestication Charter. Immediately thereafter, each currently issued and outstanding share of Platinum Eagle Delaware Class A common stock will automatically convert by operation of law, on a one-for-one basis, into shares of Target Hospitality.

Platinum Eagle has 10,833,333 outstanding Public Warrants sold during the initial public offering and 5,333,334 outstanding warrants sold in private placement to purchase an aggregate of 16,166,667 Class A ordinary shares as of December 31, 2018. The Warrants are exercisable at $11.50 per share amounts which exceeds the current market price of common stock. These warrants are considered anti-dilutive and excluded from the earnings per share calculation when the exercise price exceeds the average market value of the common stock price during the applicable period. As a result, pro forma diluted earnings (loss) per shares is the same as pro forma basic earnings (loss) per share for the periods presented.

In thousands, except per share data	Year ended December 31, 2018
Pro forma net income attributable to common shareholders	$	12,166
Basic and Diluted weighted average shares outstanding	100,217
Pro Forma Basic and Diluted Earnings Per Share	$	0.12
Pro Forma Basic and Diluted Weighted Average Shares
Platinum Eagle Public Shareholders	14,322
Platinum Eagle Founders and Harry Sloan	3,034
Independent Directors	75
Total Platinum Eagle	17,431
Algeco Seller	25,686
Arrow Seller	49,100
Total TDR	74,786
PIPE Investor(s)	8,000
Total Pro Forma Basic and Diluted Weighted Average Shares [excluding shares held in escrow]	100,217
Other - Escrow Shares	5,016
Total Pro Forma Basic and Diluted Weighted Average Shares [including shares held in escrow]	105,233