NOBLE CORPORATION PLC EIN: 98-0619597 ATTACHMENT TO IRS FORM 8937 – PART II REPORT OF ORGANIZATIONAL ACTIONS AFFECTING BASIS OF SECURITIES 14. Describe the organizational action and, if applicable, the date of the action or the date against which shareholders’ ownership is measured for the action. On August 1, 2014, Noble Corporation plc (“NE”) distributed pro rata all of the ordinary shares of Paragon Offshore plc (“Paragon”) to NE’s shareholders (the “Spin-Off”). NE’s ordinary shares trade under the ticker symbol “NE” on the New York Stock Exchange (“NYSE”), whereas Paragon ordinary shares began to trade under the ticker symbol, “PGN” on the NYSE on August 4, 2014. In the Spin-Off, each holder of NE ordinary shares received one Paragon ordinary share for every three NE ordinary shares held by such holder as of the record date of July 23, 2014 (with cash being received in lieu of any fractional Paragon ordinary shares). 15. Describe the quantitative effect of the organizational action on the basis of the security in the hands of a U.S. taxpayer as an adjustment per share or as a percentage of old basis. As a result of the Spin-Off, NE shareholders will be required to allocate the aggregate basis in their NE ordinary shares held immediately before the Spin-Off among such NE ordinary shares and the Paragon ordinary shares received in the Spin-Off (including any fractional shares of Paragon stock deemed received) in proportion to their relative fair market values immediately after the Spin-Off. U.S. Federal tax law is not clear as to the method of determining the fair market value of the shares of NE and Paragon. One approach is to use the average of the highest and lowest quoted trading prices on the NYSE for each share of NE and Paragon on the first trading date on which both NE and Paragon shares traded on the NYSE after the Spin-Off. If this method is used, the pre-Spin-Off aggregate tax basis in the NE ordinary shares would be allocated 87.685% to NE ordinary shares and 12.315% to Paragon ordinary shares. 16. Describe the calculation of the change in basis and the data that supports the calculation, such as the market values of securities and the valuation dates. The allocation of tax basis between NE ordinary shares and Paragon ordinary shares, as outlined above, is based on the average of the highest and lowest quoted trading prices on the NYSE for each share of NE and Paragon on August 4, 2014, or the first trading date on which both NE and Paragon shares traded on the NYSE after the Spin-Off. Such averages were $26.82 for NE and $11.30 for Paragon on such date. 17. List the applicable Internal Revenue Code section(s) and subsection(s) upon which the tax treatment is based. The applicable Internal Revenue Code sections upon which the above tax treatment is based are sections 355, 358, 368, and 1001. 18. Can any resulting loss be recognized? NE received private letter rulings from the U.S. Internal Revenue Service in October 2013 and an opinion from Baker Botts L.L.P. (which opinion relied, in part, on the continued validity of the private letter rulings), in each case, substantially to the effect that the Spin-Off qualifies under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended. Assuming the Spin-Off so qualifies, no gain or loss will be recognized, and no amount will be included in income by NE shareholders on the receipt of Paragon ordinary shares pursuant to Section 355(a)(1). However, an NE shareholder that receives cash in lieu of fractional Paragon ordinary shares will recognize gain or loss under Section 1001 based on the difference between the basis of the fractional shares deemed received and the amount of cash actually received. 19. Provide any other information necessary to implement the adjustment, such as the reportable tax year. The Spin-Off occurred in the 2014 taxable year of NE.
© Copyright 2020 ExploreDoc