Is the Reverse Stock Split a taxable event to pre-Reverse Stock Split holders of Ensco Class A ordinary shares?

Specific Tax Considerations for U.S. pre-Reverse Stock Split Holders of Ensco Class A Ordinary Shares

1) Is the Reverse Stock Split taxable to pre-Reverse Stock Split holders of Ensco Class A ordinary shares?

Ensco intends for the Reverse Stock Split to qualify as a ‘‘recapitalization’’ within the meaning of Section 368(a) of the Internal Revenue Code for U.S. federal income tax purposes. On the basis that the Reverse Stock Split so qualifies, Ensco shareholders whose pre-Reverse Stock Split Ensco Class A ordinary shares are exchanged in the Reverse Stock Split will not recognize gain or loss for U.S. federal income tax purposes, except to the extent of cash, if any, received in lieu of a fractional Ensco Class A ordinary share (which fractional share will be treated as received and then exchanged for such cash).

For further discussion please see the Internal Revenue Service Form 8937, available at this link and the discussion under the heading “Material United States Federal Income Tax Consequences of the Transaction” in the joint proxy statement available at this link.

2) How can I determine the cost basis for the Ensco Class A ordinary shares that I receive in the Reverse Stock Split?

An Ensco shareholder’s aggregate tax basis in the post-Reverse Stock Split Ensco Class A ordinary shares received in the Reverse Stock Split, including any fractional share treated as being received and then exchanged for cash, would be the same as such shareholder’s aggregate tax basis of the pre-Reverse Stock Split ordinary shares of Ensco exchanged in the Reverse Stock Split. Ensco shareholders who hold their pre-Reverse Stock Split Class A ordinary shares of Ensco with differing bases should consult their tax advisors with regard to identifying the bases of the particular post-Reverse Stock Split Ensco Class A ordinary shares received in the Reverse Stock Split.

3) How can I determine the gain or loss on my shares for the cash received in lieu of fractional shares?

In general, an Ensco shareholder who receives cash in lieu of a fractional Ensco Class A ordinary share in the Reverse Stock Split will be treated as having received a fractional share in the Reverse Stock Split and then as having received the cash in exchange for the fractional share and should generally recognize capital gain or loss equal to the difference between the amount of the cash received in lieu of the fractional share and such shareholder’s tax basis allocable to such fractional share in addition (in the case of any former Rowan shareholders) to any capital gain or loss recognized as a result of the Transaction. Any such capital gain or loss will generally be a long-term capital gain or loss if the Ensco Class A ordinary share exchanged for the fractional Ensco Class A ordinary share in the Reverse Stock Split was held for more than one year at the time the fractional share is sold.

Specific Tax Considerations for non-U.S. pre-Reverse Stock Split Holders of Ensco Class A Ordinary Shares

In general, provided that the Reverse Stock Split qualifies as a ‘‘recapitalization’’ within the meaning of Section 368(a) of the Internal Revenue Code for U.S. federal income tax purposes, Ensco shareholders whose pre-Reverse Stock Split Ensco Class A ordinary shares are exchanged in the Reverse Stock Split will not recognize gain or loss for U.S. federal income tax purposes, although certain non-U.S. holders who are otherwise subject to U.S. tax may be subject to U.S. tax on cash received in lieu of fractional shares. For further discussion, please see the discussion under the heading “Material United States Federal Income Tax Consequences of the Transaction” in the joint proxy statement available at this link.

ALL HOLDERS OF PRE-REVERSE STOCK SPLIT ENSCO CLASS A SHARES SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IN LIGHT OF THEIR PARTICULAR SITUATIONS, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAW OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.