GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

NOTE 11 – GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill:

The changes in the carrying amount of goodwill since January 1, 2016, by reportable segment and for the “Other” category (see Note 14 – Segment Reporting), were as follows:

In thousands
	Domestic and Canada RCS ^(a)			International RCS ^(b)			Other			Total
Balance as of January 1, 2016	$	2,842,711		$	632,491		$	282,975		$	3,758,177
Goodwill acquired during year		41,517			8,381			2,871			52,769
Purchase accounting adjustments		(77,247	)		(78,894	)		(5,048	)		(161,189	)
Goodwill write-offs related to disposition and amounts reclassified to assets held for sale		—			(7,486	)		—			(7,486	)
Changes due to foreign currency fluctuations		4,820			(56,071	)		—			(51,251	)
Balance as of December 31, 2016		2,811,801			498,421			280,798			3,591,020
Goodwill acquired during the period		14,434			4,698			4,615			23,747
Purchase accounting adjustments		(13,885	)		(2,147	)		1,530			(14,502	)
Goodwill write-offs related to disposition and amounts reclassified to assets held for sale		—			(8,935	)		—			(8,935	)
Changes due to foreign currency fluctuations		12,645			34,599			—			47,244
Balance as of September 30, 2017	$	2,824,995		$	526,636		$	286,943		$	3,638,574

(a)

Domestic and Canada Regulated Waste and Compliance Services (“Domestic and Canada RCS”)

(b)

International Regulated Waste and Compliance Services (“International RCS”)

Current period adjustments to goodwill for certain prior year acquisitions are primarily due to the finalization of intangible asset valuations among other opening balance sheet adjustments.

Other Intangible Assets:

At September 30, 2017 and December 31, 2016, the values of other intangible assets were as follows:

In thousands
	September 30, 2017						December 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Value		Gross Carrying Amount		Accumulated Amortization		Net Value
Amortizable intangibles:
Customer relationships	$	1,600,141	$	352,140	$	1,248,001	$	1,553,398	$	261,306	$	1,292,092
Covenants not-to-compete		7,899		5,674		2,225		9,491		6,371		3,120
Tradenames		5,988		1,724		4,264		5,708		1,365		4,343
Other		17,854		3,278		14,576		19,076		2,526		16,550
Indefinite-lived intangibles:
Operating permits		231,819		—		231,819		229,396		—		229,396
Tradenames		317,193		—		317,193		316,472		—		316,472
Total	$	2,180,894	$	362,816	$	1,818,078	$	2,133,541	$	271,568	$	1,861,973

The changes in the carrying amount of intangible assets since January 1, 2016 were as follows:

In thousands
Balance as of January 1, 2016	$	1,842,561
Intangible assets acquired during the year		35,564
Valuation adjustments for prior year acquisitions		168,979
Intangible write-offs due to disposition and amounts reclassified to assets held for sale		(15,961	)
Impairments during the year		(1,406	)
Intangible amortization during the year		(129,300	)
Changes due to foreign currency fluctuations		(38,464	)
Balance as of December 31, 2016		1,861,973
Intangible assets acquired during the period		15,495
Valuation adjustments for prior year acquisitions		7,806
Intangible write-offs due to disposition and amounts reclassified to assets held for sale		(2,800	)
Impairments during the period		(11,971	)
Intangible amortization during the period		(88,475	)
Changes due to foreign currency fluctuations		36,050
Balance as of September 30, 2017	$	1,818,078

Our indefinite-lived intangible assets include permits and certain tradenames. We have determined that our permits and certain tradenames have indefinite lives due to our ability to renew them with minimal additional cost, and therefore these are not amortized.

Our finite-lived intangible assets are amortized over their useful lives. We have determined that our customer relationships have useful lives ranging from 5 to 40 years based upon the type of customer and a weighted average remaining useful life of 14.8 years. We have covenants not-to-compete with useful lives ranging from 5 to 14 years and a weighted average remaining useful life of 2.8 years. We have tradename with useful lives ranging from 10 to 40 years and a weighted average remaining useful life of 15.7 years. Other intangibles mainly consist of landfill air rights and have a weighted average remaining useful life of 16.9 years.

For the three and nine months ended September 30, 2017, we recognized $5.8 million and $12.0 million, respectively, of impairment charges as part of SG&A on the Condensed Consolidated Statements of Income (Loss). For more details, see Note 4 – Restructuring, Contract Exit and Plant Conversion Expenses.

During the three months ended September 30, 2017 and 2016, the aggregate intangible amortization expense was $29.9 million and $33.1 million, respectively. For the nine months ended September 30, 2017 and 2016, the aggregate intangible amortization expense was $88.5 million and $102.3 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
2017	$	118,983
2018		118,681
2019		118,407
2020		117,620
2021		117,180

The estimates for amortization expense noted above are based upon foreign exchange rates at September 30, 2017.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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