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Advanced Drainage Systems 1. Looking at the footnotes, in your own words, what were the errors that occurred? 2. What did the Audit Committee conclude

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Advanced Drainage Systems 1. Looking at the footnotes, in your own words, what were the errors that occurred? 2. What did the Audit Committee conclude regarding the reliability of the financial statements? 3. What did The Company (Advanced Drainage Systems) do about the errors? 4. What was the beginning balance in Total Stockholders' Equity at April 1, 2012? 5. What was the total amount of the "cumulative restatement adjustment" (prior period adjustment)? 6. What was the adjusted balance in Total Stockholders' Equity at April 1, 2012? ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands, except per share data) 1. BACKGROUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Advanced Drainage Systems, Inc. and subsidiaries (collectively referred to as "ADS," the "Company," "we," "us" and "our"), incorporated in Delaware, designs, manufactures and markets high performance thermoplastic corrugated pipe and related water management products, primarily in North and South America and Europe. Our broad product line includes corrugated high density polyethylene (or "HDPE") pipe, polypropylene (or "PP) pipe and related water management products. Our fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, references to "year" pertain to our fiscal year. For example, 2015 refers to fiscal 2015, which is the period from April 1, 2014 to March 31, 2015. The Company is managed based primarily on the geographies in which it operates and reports results of operations in two reportable segments. The reportable segments are Domestic and International. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS Background In June of 2015, in connection with the preparation of the Company's consolidated annual financial statements for the fiscal year ended March 31, 2015, certain errors related to the Company's accounting treatment for its transportation and equipment leases and inventory methodology were identified. As the Company completed additional accounting review procedures, it identified additional errors related to long-lived assets, ADS Mexicana and certain other miscellaneous items. Due to these errors, as further described below, and based upon the recommendation of management, the Audit Committee of the Company's Board of Directors (the "Audit Committee") determined on August 14, 2015 that the Company's previously issued audited financial statements should no longer be relied upon. As a result of the foregoing the Company has restated its consolidated financial statements for the fiscal years ended March 31, 2014 and 2013, as well as the quarterly periods for the first three quarters of the fiscal year ended March 31, 2015 and for all of the quarterly periods in the fiscal year ended March 31, 2014. The restatement also affects periods prior to fiscal year 2013, with the cumulative effect of the errors reflected as an adjustment to the fiscal year 2013 opening stockholders' equity (deficit) balance. ADVANCED DRAINAGE SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) AND MEZZANINE EQUITY (Amounts in thousands) Common Stock in Common Stock Treasury Paid-In Shares Amount Capital Shares Amount Accumulated Other Retained Comprehensive Earnings Loss (Deficit) Total ADS Stockholders' (Deficit) Equity Non- controlling Interest in Subsidiaries Total Stockholders' (Deficit) Equity Balance at April 1, 2012, as previously reported 109,979 $ 11,957 $39,661 101,572 $(449,583) $ (1,375) $110,863 $ (288,477) $ 20,628 $ (267,849) Cumulative restatement adjustments __ - (1,006) - (1,150 (630) (2,786) (5,050) (7,836) Balance at April 1, 2012 (As Restated)") 109,979 $ 11,957 $38,655 101,572 $(449,583) $ (2,525) $110,233 $ (275,685) (291,263) $ 20,660 15,578 $ 2,520 23,180 1,444 2,603 (625) (625) (4,817) (4,817) Net income Other comprehensive income Redeemable convertible preferred stock dividends Common stock dividend ($ 0.10 per share) Dividend paid to noncontrolling interest holder Allocation of ESOP shares to participants for: Compensation Dividend Exercise of common stock options Redemption of common (713) - - (282) - - (110) (282) (110) (282) (110) 1,033 - - 1,033 - - (403) 805 (325) 66 - 1,436 (805) - - 419 - - 419 419 832 (141) 630 - 1,462 1,462 shares to exercise stock options Stock-based compensation Restricted stock awards Redemption of redeemable convertible preferred stock Purchase of common stock Adjustments to redeemable convertible preferred stock fair value measurement Adjustments to redeemable common stock fair value measurement To 120 - - 19 (249) (249) (249) - (5,869) (5,869) (5,869) - - - - (40,270)_ (40,270) (40,270) Balance March 31, 2013 (As Restated)) 109,979 $ 11,957 $ 40,026 $ 101,191 $ (448,571) $ (1,081) $ 79,202 $ (318,467) $ 18,544 $ (299,923) See Note 2. Restatement of Previously Issued Financial Statements. See accompanying notes to consolidated financial statements

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