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segment and its Australian assets and operations are in our Subsea Projects segment.Our consolidated results of operations on an unaudited pro forma basis, as thoughAGR FO had been acquired on January 1, 2010, are as follows:(in millions, except per share figures) 2011 2010Pro forma revenue $ 2,385.6 $ 2,094.0Pro forma net income 239.5 200.8Pro forma diluted earnings per share 2.20 1.83The above amounts are based on certain assumptions and estimates that we believe arereasonable. The pro forma results reflect events occurring as a direct result of thepurchase and do not necessarily represent results which would have occurred if theacquisition had taken place on the basis assumed above, nor are they indicative of theresults of future combined operations.On December 27, 2011, we purchased Mechanica AS, a design and fabrication companyspecializing in remotely operated subsea tools for the offshore oil and gas industry, for$17 million. We have accounted for this acquisition by allocating the purchase price tothe assets acquired and liabilities assumed based on their estimated fair values at thedate of acquisition. Our goodwill, all nondeductible for income tax purposes, associatedwith the acquisition was $9 million, and other intangible assets were $5 million. Thispurchase price allocation is preliminary and based on information currently available tous, and is subject to change when we obtain final asset and liability valuations. As weacquired Mechanica AS late in December 2011, its results of operations are included inour consolidated statements of income from the date of acquisition, but the 2011 resultswere not material.We also made several smaller acquisitions during the periods presented.Except for AGR FO, the above acquisitions were not material. As a result, we have notincluded pro forma information related to those acquisitions in this report.Goodwill and Intangible Assets. In September 2011, the FASB issued an updateregarding goodwill impairment testing. Under the update, an entity has the option to firstassess qualitative factors to determine whether the existence of events or circumstancesleads to a determination that it is more likely than not that the fair value of a reporting unitis less than its carrying amount. Our reporting units are the operating units one levelbelow our business segments, except for ROVs and Asset Integrity, which are tested assingle reporting units. If, after assessing the totality of events or circumstances, an entitydetermines it is not more likely than not that the fair value of a reporting unit is less thanits carrying amount, performing the two-step impairment test is unnecessary. However, ifan entity concludes otherwise, then it is required to perform the first step of the two-stepimpairment test. This update is effective for us January 1, 2012, and earlier adoption ispermitted. We have elected to adopt this update early and we applied it in 2011. Theprovisions of the update have not had a material effect on our financial position or resultsof operations. We tested the goodwill attributable to each of our reporting units forimpairment as of December 31, 2010 and 2009 and concluded that there was noimpairment. We estimated fair value using discounted cash flow methodologies and34 Oceaneering International, Inc.