NOTE 3 – ACQUISITIONS, DIVESTITURES, AND ASSETS HELD FOR SALE

Acquisitions

Domestically, we acquired selected assets and liabilities of fifteen secure information destruction businesses, selected assets and liabilities of three regulated waste businesses, one communication services business, and 100% of the stock of two regulated waste businesses.

Internationally, we acquired selected assets and liabilities of regulated waste businesses: one in the Republic of Korea, two in Spain, two in Romania, and one in the United Kingdom. We also acquired selected assets and liabilities of three secure information destruction businesses in Australia, and 100% of the stock of another in Spain.

The acquisitions were all considered to be business combinations under the guidance.

The following table summarizes the locations of our acquisitions for the years ended December 31, 2016, 2015 and 2014:

Acquisition Locations	2016		2015		2014
United States		21		19		17
Argentina		—		—		2
Australia		3		—		0
Brazil		—		2		3
Canada		—		2		2
Chile		—		—		3
Ireland		—		1		—
Japan		—		—		2
Mexico		—		3		—
Netherlands		—		2		—
Portugal		—		—		5
Republic of Korea		1		6		1
Romania		2		4		3
Spain		3		4		3
United Kingdom		1		—		3
Total		31		43		44

The following table summarizes the acquisition date fair value of consideration transferred for acquisitions completed during the years ended December 31, 2016, 2015 and 2014:

In thousands
	2016		2015		2014
Cash	$	55,388	$	2,420,764	$	373,820
Promissory notes		40,938		64,124		125,245
Deferred consideration		4,094		3,172		3,889
Contingent consideration		988		10,070		17,174
Total purchase price	$	101,408	$	2,498,130	$	520,128

For financial reporting purposes, our acquisitions were accounted for using the acquisition method of accounting. These acquisitions resulted in the recognition of goodwill in our financial statements reflecting the premium paid to acquire businesses that we believe are complementary to our existing operations and fit our growth strategy. During the year ended December 31, 2016, we recognized an increase in goodwill of $52.8 million related to current year acquisitions, excluding the effect of foreign currency translation. Approximately $40.3 million of the goodwill recognized during the year ended December 31, 2016 will be deductible for income taxes.

During the year ended December 31, 2016, we recognized an increase in intangible assets from current year acquisitions of $35.6 million, excluding the effect of foreign currency translation. We recognized $34.6 million for the estimated fair value of acquired customer relationships with amortizable lives of 10 to 40 years and $1.0 million for covenant not-to-compete agreements with amortizable lives of 5 years.

The fair value of consideration transferred in a business combination is allocated to the tangible and intangible assets assumed at the acquisition date, with the remaining unallocated amount recorded as goodwill. The allocations of the acquisition price for recent acquisitions have been prepared on a preliminary basis, pending completion of certain intangible asset valuations and finalization of the opening balance sheet. The following table summarizes the preliminary purchase price allocation for current period acquisitions during the year ended December 31, 2016:

In thousands
	2016			2015			2014
Fixed assets	$	13,079		$	196,164		$	96,868
Intangibles		35,564			1,016,774			249,414
Goodwill		52,769			1,450,950			258,017
Accounts receivable		3,155			135,758			65,509
Net other assets/ (liabilities)		171			18,843			(11,359	)
Current liabilities		(933	)		(90,133	)		(64,396	)
Debt		(188	)		(4,955	)		(22,423	)
Environmental remediation liabilities		—			—			(32,383	)
Net deferred tax liabilities		(2,209	)		(225,271	)		(12,338	)
Noncontrolling interest		—			—			(6,781	)
Total purchase price allocation	$	101,408		$	2,498,130		$	520,128

During the years ended December 31, 2016, 2015 and 2014, the Company incurred $9.6 million, $39.1 million, and $13.3 million, respectively, of acquisition related expenses. These expenses are included within SG&A on the Consolidated Statements of Income. The results of operations of these acquired businesses have been included on the Consolidated Statements of Income from the date of the acquisition. Pro forma results of operations for these acquisitions are not presented because the pro forma effects, individually or in the aggregate, were not material to the Company’s consolidated results of operations.

On October 1, 2015, we acquired Shred-it International ULC, an Alberta unlimited liability corporation ("SII"), Shredit JV LP, an Ontario limited partnership ("Shredit JV"), Boost GP Corp., an Ontario corporation ("Boost GP"), and Boost Holdings LP, an Ontario limited partnership (together with SII, Shred-it JV and Boost GP, "Shred-it"). Shred-it is the global leader in secure information destruction, a highly complementary service to our regulated waste and compliance services and provides operational synergies stemming from our core competencies in route logistics and lean management systems. The aggregate purchase price was $2.3 billion in cash.

The following table summarizes the adjustments to the consideration transferred for prior year acquisitions and primarily includes $9.5 million of additional cash consideration paid in March 2016 as part of the final working capital adjustments for the 2015 Shred-it acquisition:

In thousands
Cash	$	8,529
Promissory notes		(1,790	)
Total purchase price	$	6,739

During 2016, we recorded various adjustments to our provisional amounts related to the Shred-it and other prior year acquisitions. The following table summarizes these adjustments by major assets acquired and liabilities assumed:

In thousands
	Shred-it Acquisition			Other Prior Year Acquisitions			Total
Fixed assets	$	45,423		$	7,215		$	52,638
Intangibles		153,056			15,923			168,979
Goodwill		(152,833	)		(8,356	)		(161,189	)
Accounts receivable		(3,585	)		(2,898	)		(6,483	)
Net other assets/ (liabilities)		(65	)		(756	)		(821	)
Current liabilities		(13,348	)		(2,177	)		(15,525	)
Net deferred tax liabilities		(19,006	)		(11,854	)		(30,860	)
Total purchase price allocation	$	9,642		$	(2,903	)	$	6,739

The following table summarizes the completed purchase price allocation by major asset acquired and liabilities assumed for the acquisition of Shred-it:

In thousands
	Shred-it Acquisition
Fixed assets	$	219,673
Intangibles		1,108,056
Goodwill		1,180,213
Accounts receivable		113,956
Net other assets/ (liabilities)		16,673
Current liabilities		(85,526	)
Net deferred tax liabilities		(239,511	)
Total purchase price allocation	$	2,313,534

As of December 31, 2016, purchase accounting has been completed for all of our 2015 acquisitions.

Divestitures

In Q4 2016, we sold certain assets in the United Kingdom for $0.8 million resulting in a pretax loss of $1.6 million ($1.3 million, net of tax) which is included in SG&A on the Consolidated Statements of Income.

Assets and Liabilities Held for Sale

As of December 31, 2016, certain of our international operations met the criteria to be classified as held for sale. We recorded a $25.5 million impairment charge in SG&A on the Consolidated Statements of Income to adjust the carrying value of the asset groups to their fair value less estimated costs to sell. The assets and liabilities of the disposal groups are presented in assets held for sale and liabilities held for sale on the consolidated balance sheet.

The following table presents information related to the major classes of assets and liabilities that were classified as held for sale on the Consolidated Balance Sheet at December 31, 2016:

In thousands
Accounts receivable	$	2,556
Inventory		223
Prepaid expenses		271
Fixed assets		4,915
Goodwill		80
Intangibles		753
Other assets		336
Assets held for sale	$	9,134

Current portion of l-t debt	$	998
Account payable		928
Accrued liabilities		605
Other current liabilities		1
Deferred income taxes		326
Liabilities held for sale	$	2,858

We determined that the operations included in the table above did not meet the criteria to be classified as discontinued operations under the applicable guidance.