GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other identifiable indefinite lived intangibles are not amortized, but are subject to an annual impairment test, or more frequent testing if circumstances indicate that they may be impaired.

Goodwill:

We have two geographical reportable segments, "United States" and "International", both of which have goodwill. We have retroactively reclassified $4.3 million of goodwill related to Puerto Rico from the United States segment to the International segment. The changes in the carrying amount of goodwill since January 1, 2014, by reportable segment, were as follows:



In thousands
	United States			International			Total
Balance as of January 1, 2014	$	1,673,810		$	557,772		$	2,231,582
Goodwill acquired during the year	169,754			88,263			258,017
Purchase accounting allocation adjustments	(4,825		)	(17,595		)	(22,420		)
Changes due to foreign currency fluctuations	(2,337		)	(46,010		)	(48,347		)
Balance as of December 31, 2014	1,836,402			582,430			2,418,832
Goodwill acquired during the year	71,119			29,200			100,319
Purchase accounting allocation adjustments	(14,514		)	(412		)	(14,926		)
Goodwill other changes	—			(440		)	(440		)
Changes due to foreign currency fluctuations	(4,210		)	(52,121		)	(56,331		)
Balance at September 30, 2015	$	1,888,797		$	558,657		$	2,447,454

Current year adjustments to goodwill for certain 2014 acquisitions are primarily due to the finalization of intangible asset valuations.

During the quarter ended June 30, 2015, we performed our annual goodwill impairment evaluation for our three reporting units: Domestic Regulated and Compliance Services, Domestic Regulated Recall and Returns Management Services, and International Regulated and Compliance Services. We calculated fair value for our reporting units using an income method and validated those results using a market approach. Both the income and market approaches indicated no impairment to goodwill to any of our three reporting units.

Income Approach: The income approach uses expected future cash flows of each reporting unit and discounts those cash flows to present values. Expected future cash flows are calculated using management assumptions of internal growth, capital expenditures, and cost efficiencies. Future acquisitions are not included in the expected future cash flows. We use a discount rate based on our Company calculated weighted average cost of capital which is adjusted for each of our reporting units based on size risk premium and country risk premium. Significant assumptions used in the income approach include realization of future cash flows and the discount rate used to present value those cash flows.

The results of our goodwill impairment test using the income approach indicated the fair value of our Domestic Regulated and Compliance Services and Recall and Returns Management Services reporting units exceeded book value by a substantial amount; in excess of 100%. Our International Regulated and Compliance Services reporting units' fair value exceeded book value by approximately 88% and had $589.3 million in assigned goodwill at June 30, 2015.

Market Approach: Our market approach begins by calculating the market capitalization of the Company using the average stock price for the prior twelve months and the outstanding share count at June 30, 2015. We then look at the Company's Earnings Before Interest, Tax, Depreciation, and Amortization ("EBITDA"), adjusted for stock compensation expense and other items, such as changes in the fair value of contingent consideration, restructuring and plant conversion expenses, and litigation settlement, for the prior twelve months. The calculated market capitalization is divided by the modified EBITDA to arrive at a valuation multiple. The fair value of each reporting unit is then calculated by taking the product of the valuation multiple and the trailing twelve months' modified EBITDA of that reporting unit. The fair value was then compared to the reporting units' book value and determined to be in excess of the book value. We believe that starting with the fair value of the company as a whole is a reasonable measure as that fair value is then allocated to each reporting unit based on that reporting unit's individual earnings. A sustained drop in our stock price would have a negative impact to our fair value calculations. A temporary drop in earnings of a reporting unit would have a negative impact to our fair value calculations.

The results of our goodwill impairment test using the market approach corroborated the results of the impairment test under the income approach and indicated the fair value of our reporting units exceeded their respective book values by substantial amounts.

Other Intangible Assets:

As of September 30, 2015 and December 31, 2014, the values of other intangible assets were as follows:



In thousands
	September 30, 2015						December 31, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Value		Gross Carrying Amount		Accumulated Amortization		Net Value
Amortizable intangibles:
Covenants not-to-compete	$	8,343	$	6,404	$	1,939	$	8,474	$	5,688	$	2,786
Customer relationships	783,615		128,178		655,437		755,148		107,365		647,783
Tradenames	4,257		1,004		3,253		6,062		1,313		4,749
Technology	611		601		10		611		521		90
Other	501		64		437		539		35		504
Indefinite lived intangibles:
Operating permits	238,517		—		238,517		247,933		—		247,933
Tradenames	9,910		—		9,910		5,800		—		5,800
Total	$	1,045,754	$	136,251	$	909,503	$	1,024,567	$	114,922	$	909,645

The changes in the carrying amount of intangible assets since January 1, 2014 were as follows:



In thousands
	Total
Balance as of January 1, 2014	$	720,035
Intangible assets acquired during the year	277,041
Impairments during the year	(9,863		)
Amortization during the year	(32,692		)
Changes due to foreign currency fluctuations	(44,876		)
Balance as of December 31, 2014	909,645
Intangible assets acquired during the year	70,282
Impairments during the year	(2,414		)
Amortization during the year	(26,957		)
Changes due to foreign currency fluctuations	(41,053		)
Balance at September 30, 2015	$	909,503

During the quarter ended March 31, 2015 we wrote off $0.2 million in customer relationships, $1.2 million in operating permits, and $1.0 million in tradenames, due to rationalizing certain of our domestic and international operations (see Note 13 - Restructuring Charges). These expenses are reflected as part of SG&A on our Condensed Consolidated Statements of Income. Under generally accepted accounting principles, a fair value must be assigned to all acquired assets based on a theoretical "market participant" regardless of the acquirer's intended use for those assets. This accounting treatment can lead to the recognition of losses when a company disposes of acquired assets. We complete our annual impairment analysis of our indefinite lived intangibles during the quarter ended December 31 of each year, or more frequently, if circumstances indicate that they may be impaired.

Our finite-lived intangible assets are amortized over their useful lives. We have determined that our customer relationships have useful lives from 10 to 40 years based upon the type of customer, with a weighted average remaining useful life of 23.2 years. We have covenants not-to-compete intangibles with useful lives from 3 to 14 years, with a weighted average remaining useful life of 5.3 years. We have tradename intangibles with useful lives from 10 to 40 years, with a weighted average remaining useful life of 16.4 years. We have determined that our permits have indefinite lives due to our ability to renew these permits with minimal additional cost, and therefore these are not amortized.

During the quarters ended September 30, 2015 and 2014, the aggregate amortization expense was $9.2 million and $8.5 million, respectively. For the nine months ended September 30, 2015 and 2014, the aggregate amortization expense was $27.0 million and $24.2 million, respectively.

The estimated amortization expense for each of the next five years, assuming no additional amortizable intangible assets, is as follows for the years ended December 31:



In thousands
2015	$	35,839
2016	35,547
2017	35,422
2018	35,384
2019	35,363

Future amortization expense may fluctuate depending on changes in foreign currency rates, future acquisitions, or changes to the estimated amortizable life of the intangibles. The estimates for amortization expense noted above are based upon foreign exchange rates as of September 30, 2015.