
10.	Acquisition of Oakleaf Global Holdings

On July 28, 2011, we paid $432 million, net of cash received of $4 million and inclusive of certain adjustments, to acquire Oakleaf Global Holdings and its primary operations. Oakleaf provides outsourced waste and recycling services through a nationwide network of third-party haulers. The operations we acquired generated approximately $580 million in revenues in 2010. We acquired Oakleaf to advance our growth and transformation strategies and increase our national accounts customer base while enhancing our ability to provide comprehensive environmental solutions. For the three and nine months ended September 30, 2011, we incurred $1 million of acquisition-related costs, which are classified as Selling, general and administrative expense. Since the acquisition date, Oakleaf has recognized revenues of $112 million and net losses of less than $1 million, which are included in our Condensed Consolidated Statement of Operations. We have recorded a preliminary allocation of the purchase price to Oakleaf tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of July 28, 2011. The allocation of the purchase price shown in the table below is preliminary and subject to change based on the finalization of our detailed valuations. The preliminary purchase price allocation is as follows (in millions):


Accounts and other receivables	$	68
Other current assets		28
Property and equipment		77
Goodwill		320
Intangible assets		92
Accounts payable		(80	)
Accrued liabilities		(48	)
Deferred income taxes, net		(13	)
Other liabilities		(12	)

Total purchase price	$	432

The following table presents the preliminary allocation of the purchase price to intangible assets (amounts in millions, except for amortization periods):


			Weighted Average
			Amortization
			Periods
	Amount		(in Years)

Customer relationships	$	74		10.0
Vendor relationships		9		10.0
Trademarks		9		15.0

Total intangible assets subject to amortization	$	92		10.5

Goodwill of $320 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. Goodwill acquired will be allocated to our operating segments upon completion of our detailed valuations. Goodwill is not deductible for income tax purposes.

The following pro forma consolidated results of operations have been prepared as if the acquisition of Oakleaf occurred at January 1, 2010 (in millions, except per share amounts):


					Nine Months
	Three Months				Ended
	Ended September 30,				September 30,
	2011		2010		2011		2010

Operating revenues	$	3,566	$	3,379	$	10,287	$	9,740
Net income attributable to Waste Management, Inc.		272		239		689		660
Basic earnings per common share		0.58		0.50		1.46		1.37
Diluted earnings per common share		0.58		0.50		1.45		1.36