BUSINESS COMBINATIONS

2014 Acquisitions

In 2014, the Company acquired the assets of two privately owned companies for approximately $16.1 million in cash, net of cash acquired. The purchase prices are subject to customary post-closing adjustments based upon finalized working capital amounts. The acquired companies have been integrated into the Technical Services and Lodging Services segments.

2013 Acquisitions

Evergreen

On September 13, 2013, the Company acquired all of the outstanding shares of Evergreen Oil, Inc. (“Evergreen”) for a final purchase price of $56.3 million in cash, net of cash acquired. Evergreen, headquartered in Irvine, California, specializes in the recovery and re-refining of used oil. Evergreen owns and operates one of the only oil re-refining operations in the Western United States and also offers other ancillary environmental services, including parts cleaning and containerized waste services, vacuum services and hazardous waste management services. The acquisition of Evergreen enables the Company to further penetrate the small quantity waste generator market and further expand its oil re-refining, oil recycling and waste treatment capabilities. Financial information and results of Evergreen have been recorded in the Company's consolidated financial statements since acquisition and are primarily included in the Oil Re-refining and Recycling segment.

Management determined the purchase price allocations based on estimates of the fair values of all tangible and intangible assets acquired and liabilities assumed. The Company believes that such information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The Company has finalized the purchase accounting for the acquisition of Evergreen. The impact of the purchase price measurement period adjustments and related tax impacts recorded in the current period was not material to the consolidated financial statements and accordingly the effects have not been retrospectively applied.

(3) BUSINESS COMBINATIONS (Continued)

The following table summarizes the recognized amounts of assets acquired and liabilities assumed at September 13, 2013 (in thousands):



	Preliminary Allocations			Measurement Period Adjustments			Final Allocations
Inventories and supplies	$	1,089		$	—		$	1,089
Prepaid and other current assets	1,291			(273		)	1,018
Property, plant and equipment	40,563			—			40,563
Permits and other intangibles	17,100			—			17,100
Deferred tax assets, less current portion	2,368			(2,368		)	—
Other assets	3,607			(239		)	3,368
Current liabilities	(6,198		)	(552		)	(6,750		)
Closure and post-closure liabilities	(659		)	—			(659		)
Remedial liabilities, less current portion	(2,103		)	463			(1,640		)
Other long-term liabilities	(1,139		)	(920		)	(2,059		)
Total identifiable net assets	55,919			(3,889		)	52,030
Goodwill	—			4,288			4,288
Total	$	55,919		$	399		$	56,318

2012 Acquisitions

Safety-Kleen

On December 28, 2012, the Company acquired 100% of the outstanding common shares of Safety-Kleen, Inc. ("Safety-Kleen") for approximately $1.26 billion in cash. The Company financed the purchase through a combination of approximately $305.0 million of existing cash, $369.3 million in net proceeds from the Company's public offering of 6.9 million shares of Clean Harbors common stock, and approximately $589.0 million in net proceeds from the Company's private placement of $600.0 million of 5.125% senior unsecured notes due 2021. During the years ended December 31, 2013 and 2012, the Company incurred acquisition-related costs of approximately $2.7 million and $6.3 million, respectively, in connection with the transaction which are included in selling, general and administrative expenses in the consolidated statements of income. Safety-Kleen, headquartered in Richardson, Texas, is the largest re-refiner and recycler of used oil in the world and the largest provider of parts cleaning and environmental services to commercial, industrial and automotive customers in North America. The acquisition of Safety-Kleen enables the Company to (i) penetrate the small quantity waste generator market, (ii) broaden its waste treatment capabilities to include re-refining waste oil and expanded recycling capabilities, (iii) drive a substantial increase in waste volumes into its existing waste disposal treatment network, (iv) capitalize on the growing demand for recycled products including re-refined oil, (v) enhance its commitment to sustainability, (vi) leverage the combined sales forces to maximize cross-selling opportunities, (vii) leverage operating efficiencies through the combined company and (viii) add to its cash flow.

As of December 31, 2013, the Company finalized the purchase accounting for the acquisition of Safety-Kleen. The purchase accounting measurement period adjustments were applied retrospectively to the December 31, 2012 balance sheet. Management determined the purchase price allocations based on estimates of the fair values of all tangible and intangible assets acquired and liabilities assumed. The Company believes that such information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed.

(3) BUSINESS COMBINATIONS (Continued)

The following table summarizes the recognized amounts of assets acquired and liabilities assumed at December 28, 2012 (in thousands):



	Preliminary Allocations			Measurement Period Adjustments			Final Allocations
Inventories and supplies	$	102,339		$	5,037		$	107,376
Other current assets (i)	152,245			3,429			155,674
Property, plant and equipment	514,712			1,290			516,002
Permits and other intangibles	421,400			17,227			438,627
Other assets	4,985			(647		)	4,338
Current liabilities	(192,652		)	(13,589		)	(206,241		)
Closure and post-closure liabilities, less current portion	(15,774		)	8,221			(7,553		)
Remedial liabilities, less current portion	(38,370		)	(9,931		)	(48,301		)
Deferred taxes, unrecognized tax benefits and other long-term liabilities	(128,375		)	9,044			(119,331		)
Total identifiable net assets	820,510			20,081			840,591
Goodwill (ii)	436,749			(14,056		)	422,693
Total (iii)	$	1,257,259		$	6,025		$	1,263,284

_______________________


(i)	The fair value of the assets acquired includes customer receivables with an aggregate fair value of $137.6 million. Combined gross amounts due were $142.7 million.


(ii)	Goodwill represents the excess of the fair value of the net assets acquired over the purchase price. Based on the final purchase price allocations, goodwill of $173.2 million, $174.1 million and $75.4 million has been recorded in the Oil Re-refining and Recycling, SK Environmental Services and Industrial and Field Services segments, respectively, and will not be deductible for tax purposes.


(iii)	The $6.0 million increase in the purchase price in 2013 was due to finalization of the net working capital balance (excluding cash) as of the closing date.

The Company determined that separate disclosure of Safety-Kleen’s revenues and earnings is impracticable for the year ended December 31, 2013 due to the integration of Safety-Kleen’s operations into the Company upon acquisition. No revenue, expense, income or loss of Safety-Kleen was included in the Company's consolidated statements of income for the year ended December 31, 2012 due to the immateriality of the operating results subsequent to the December 28, 2012 acquisition date.

The following unaudited pro forma combined summary financial information presented below gives effect to the following transactions as if they had occurred as of January 1, 2011, and assumes that there were no material, non-recurring pro forma adjustments directly attributable to: (i) the acquisition of Safety-Kleen, (ii) the sale of 6.9 million shares of the Company's common stock, (iii) the issuance of $600.0 million aggregate principal amount of 5.125% senior unsecured notes due 2021, and (iv) the payment of related fees and expenses (in thousands).



	2012
Pro forma combined revenues	$	3,529,592
Pro forma combined net income	$	125,425

This pro forma financial information is not necessarily indicative of the Company's consolidated operating results that would have been reported had the transactions been completed as described herein, nor is such information necessarily indicative of the Company's consolidated results for any future period.

(3) BUSINESS COMBINATIONS (Continued)

Other 2012 Acquisitions

In addition to Safety-Kleen, the Company made three other acquisitions in 2012. The combined purchase price for these other acquisitions was approximately $108.9 million, including the assumption and payment of debt of $7.7 million and post-closing adjustments of $2.1 million based upon finalization of the working capital balances as of the closing date. Acquisition related costs of $0.4 million were included in selling, general and administrative expenses in the Company's consolidated statements of income for the year ended December 31, 2012.

The following unaudited pro forma combined financial data presents information as if the three other 2012 acquisitions had been acquired as of January 1, 2011 and assumes that there were no material, non-recurring pro forma adjustments directly attributable to those acquisitions. The pro forma financial information does not necessarily reflect the actual results that would have been reported had the Company and those three other acquisitions been combined during the periods presented, nor is it necessarily indicative of the future results of operations of the combined companies (in thousands).



	2012
Pro forma combined revenues	$	2,268,621
Pro forma combined net income	$	130,322