Waste Management 2011 Annual Report Download - page 205

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
and administrative” expenses. Since the acquisition date, Oakleaf has recognized revenues of $265 million and net
income of less than $1 million, which are included in our Consolidated Statement of Operations.
The following table shows adjustments to the preliminary allocation of the purchase price of Oakleaf to
tangible and intangible assets acquired and liabilities assumed based on their estimated fair value from
September 30, 2011 to December 31, 2011 (in millions):
September 30, 2011 Adjustments(a) December 31, 2011
Accounts and other receivables ............ $ 68 $ 2 $ 70
Other current assets ..................... 28 — 28
Property and equipment .................. 77 (5) 72
Goodwill ............................. 320 7 327
Other intangible assets ................... 92 (5) 87
Accounts payable ....................... (80) (2) (82)
Accrued liabilities ...................... (48) — (48)
Deferred income taxes, net ............... (13) 3 (10)
Other liabilities ........................ (12) — (12)
Total purchase price .................. $432 $— $432
(a) The purchase price adjustments relate primarily to changes in the valuation of the customer and vendor
relationships and evaluation of physical and market conditions of equipment.
The purchase price allocation is still preliminary and may change. The following table presents the
preliminary allocation of the purchase price to intangible assets (amounts in millions, except for amortization
periods):
Amount
Weighted Average
Amortization
Periods (in Years)
Customer relationships ........................................ $74 10.0
Vendor relationships .......................................... 4 10.0
Trademarks ................................................. 9 15.0
Total intangible assets subject to amortization .................... $87 10.5
Goodwill of $327 million was calculated as the excess of the consideration paid over the net assets recognized
and represents the future economic benefits arising from other assets acquired that could not be individually identified
and separately recognized. Goodwill is a result of expected synergies from combining the Company’s operations with
Oakleaf’s national accounts customer base and vendor network. The vendor-hauler network expands our partnership
with third-party service providers. In many cases we can provide vendor-haulers with opportunities to maintain and
increase their business by utilizing our extensive post-collection network. We believe this will generate significant
benefits for the Company and for the vendor-haulers. Based on our preliminary valuation, goodwill has been assigned
to our four geographic Groups as they are expected to benefit from the synergies of the combination.
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