Stericycle is focused on driving long-term growth, profitability and delivering enhanced shareholder value.

As part of overall business strategy, in the third quarter of 2017, the Company initiated a comprehensive multi-year Business Transformation. Through December 31, 2019, the Company has incurred all the originally anticipated employee termination charges, including incremental charges related principally to executive management, in connection with its initial restructuring estimate.

During the year ended December 31, 2019, the Company recognized $5.5 million in charges related to executive and employee termination costs, of which $4.8 million was recognized within All Other and $0.7 million was recognized within the International RWCS reportable segment. These amounts are included in SG&A and will be paid out over approximately two years. As of December 31, 2019, approximately $3.0 million in future payments remained accrued.

During the year ended December 31, 2018, the Company recognized $3.7 million, of employee termination charges related to Business Transformation. The North America RWCS and International

RWCS reportable segments incurred $3.0 million and $0.3 million, respectively, with the remaining $0.4 million impacting All Other. These amounts were fully paid as of December 31, 2018.

In addition, during the year ended December 31, 2018, the Company recognized non-cash impairment charges of $9.1 million, of which $7.4 million related to software and $0.3 million related to other long-term assets in the North America RWCS reportable segment, that was included in COR and $1.4 million related to All Other, was included in SG&A, see Note 5 – Property, Plant and Equipment.

During the year ended December 31, 2017, the Company recognized employee termination charges of $11.5 million and non-cash impairment charges of $2.4 million related to software. The North America RWCS and International RWCS reportable segments incurred $5.5 million and $3.3 million, respectively, with the remaining $5.1 million impacting All Other. The remaining liability of $2.2 million at December 31, 2017, was paid in the first quarter of 2018.

We aim to achieve a culture of continuous improvement that will enhance its efficiency, effectiveness and competitiveness to improve its cost base and cash flow, and we have taken a number of actions to reduce operating costs and optimize operations. As part of these efforts, we seek to reduce network redundancies by consolidating facilities and restructuring the operations for efficiency.

In millions
	Year Ended December 31, 2019
	North America RWCS		International RWCS		All Other		Total
Included in COR
Exit costs - employee termination	$	-	$	0.2	$	0.4	$	0.6
Closure and exit costs - other		-		1.1		-		1.1
Impairment of property, plant and equipment		2.0		3.6		-		5.6
Total non-cash charges		2.0		3.6		-		5.6
Total included in COR		2.0		4.9		0.4		7.3
Included in SG&A
Exit costs - employee termination		0.4		0.7		0.6		1.7
Closure and exit costs - other		-		1.3		-		1.3
Impairment of property, plant and equipment		-		0.4		-		0.4
Impairment of intangibles		-		0.9		0.4		1.3
Total non-cash charges		-		1.3		0.4		1.7
Total included in SG&A		0.4		3.3		1.0		4.7
Total charges	$	2.4	$	8.2	$	1.4	$	12.0

The charges in the North America RWCS reportable segment related primarily to a site relocation.

The charges in the International RWCS reportable segment relate to site closures and facility exits undertaken in EMEA and LATAM.

The employee termination charges within All Other represent employee severance arising from reductions in headcount undertaken in the Company’s Domestic CRS business. The non-cash impairment of intangibles was recognized a result of the exit from a business line.

In millions
	Year Ended December 31, 2018
	North America RWCS		International RWCS		All Other		Total
Included in SG&A
Exit costs - employee termination	$	-	$	0.2	$	1.1	$	1.3
Closure and exit costs - other		4.2		5.9		3.7		13.8
Impairment and accelerated depreciation of property, plant and equipment		1.0		4.7		-		5.7
Impairment of intangibles		-		6.6		-		6.6
Total non-cash charges		1.0		11.3		-		12.3
Total included in SG&A		5.2		17.4		4.8		27.4
Total charges	$	5.2	$	17.4	$	4.8	$	27.4

The charges in the North America RWCS reportable segment related primarily to optimizing overall logistics and sales functions and lease exit costs for the consolidation of call centers in our Canadian CRS locations. Non-cash charges relate to accelerated depreciation associated with software.

The charges in the International RWCS reportable segment primarily related to closure, contract exit and other clean-up costs, associated with various sites in EMEA, Latin America and APAC. Non cash impairment charges related to long-lived assets, customer relationships, operating permits, and other intangibles, primarily in Latin America and APAC, and rationalization of a tradename in Europe.

The charges in All Other related to headcount reduction undertaken during the year and lease exit costs for the consolidation of call centers in Domestic CRS locations.

The employee termination payments were paid by the end of the fourth quarter of 2018.

The Company incurred the following divestiture losses, net of (gains), which are included in the Consolidated Statements of (Loss) Income:

In millions
	Year Ended December 31,
	2019			2018		2017
North America RWCS Segment
CRS businesses	$	6.5		$	-	$	-
U.S. clean room business		-			6.9		-
Total North America RWCS charges		6.5			6.9		-
International RWCS Segment
Mexico operations		43.2			-		-
Chile operations		19.0			-		-
U.K. TextAnywhere business		(5.1	)		-		-
U.K. hazardous waste business		0.7			5.9		6.8
U.K. patient transport business		(0.3	)		-		5.7
South Africa operations		-			-		(3.0	)
Total International RWCS charges, net		57.5			5.9		9.5
All Other
CRS businesses		39.0			-		-
Total	$	103.0		$	12.8	$	9.5

During the year ended December 31, 2019 the Company completed the sales of its TAS business in North America and its retail pharmaceutical returns business in the U.S. and Puerto Rico for total cash consideration of $36.4 million, resulting in total losses of $45.5 million, of which $6.5 million related to North America RWCS and $39.0 million related to All Other.

In connection with the sale agreement for the TAS business, the Company entered into a TSA with the buyer for a period of up to 15 months. The Company allocated and deferred $5.1 million of the proceeds, which will be recognized over the duration of the TSA period offsetting the expenses incurred to deliver the TSA services that are not reimbursed by the buyer.

During the year ended December 31, 2018, the Company completed the sale of the non-core clean room business realizing proceeds of $17.0 million, resulting in impairment charges and subsequent loss on disposal totaling $6.9 million.

During the year ended December 31, 2019, the Company had the following divestiture activity:

During the year ended December 31, 2018, the Company completed the sale of its hazardous waste business in the U.K. for proceeds of $11.5 million of which $8.2 million was received in cash and $3.0 million was held in escrow, until it was received in August 2019. The Company recognized impairment charges and subsequent loss on disposal totaling $16.5 million, including impairment charges of $3.8 million in 2016.

During the year ended December 31, 2017, the Company completed the divestiture of its operations in South Africa for proceeds of $7.3 million, resulting in a gain of $3.0 million.

In addition during the year ended December 31, 2017, the Company completed the divestiture of certain assets associated with its patient transport business in the U.K. for proceeds of $1.2 million, resulting in a net loss of $5.7 million.

On February 6, 2020, the Company entered into the Purchase Agreement to sell its Domestic Environmental Solutions business to Harsco Corporation, exclusive of the Retained Business.

Subject to the terms and conditions of the Purchase Agreement, the Buyer has agreed to purchase all of the outstanding equity interests of the Company’s Domestic Environmental Solutions subsidiary. Both the Company and Buyer have agreed to indemnify the other party for losses arising from certain breaches of the Purchase Agreement and other liabilities, subject to certain limitations.

The purchase price for the Transaction is approximately $462.5 million, and subject to adjustment based on the ESOL Disposal Group’s net working capital at closing and other adjustments as defined in the Purchase Agreement. The Transaction is anticipated to result in a loss which is currently not estimable. The expected charge is based on the Company’s current estimate of the proceeds that will be allocated to the disposal transaction as it evaluates the terms of the HSA agreement negotiated with the Buyer concurrently with the Transaction, the net assets that will be disposed of and an allocation of goodwill based on the relative fair value of the ESOL Disposal Group to the Domestic Environmental Solutions reporting unit. The remaining goodwill will be allocated to the Retained Business which the Company anticipates will become part of the Domestic Healthcare Compliance Services reporting unit once the transaction closes.

The Purchase Agreement contains customary representations, warranties and covenants related to the Business and the Transaction. Between the date of the Purchase Agreement and the completion of the Transaction, the Company has agreed to conduct the ordinary course of the ESOL Disposal Group business consistent with past practices in all material respects and has agreed to certain other operating covenants with respect to the ESOL Disposal Group business as set forth more fully in the Purchase Agreement. The Purchase Agreement includes customary termination provisions, including if the closing of the Transaction has not occurred on or before November 6, 2020 (which may be extended until February 6, 2021, if needed, to obtain applicable regulatory approvals). Both the Company and the Buyer have agreed to indemnify the other party for losses arising from certain breaches of the Purchase Agreement and other liabilities, subject to certain limitations.

In connection with the closing of the Transaction, the Company and Buyer will enter into certain additional ancillary agreements, including a transition services agreement. The Company and Buyer will also enter into a long-term subcontracted HSA with respect to the Company's Retained Business. The Company currently provides integrated waste compliance services to healthcare customers, including medical and hazardous waste disposal services. The Company will continue to be the integrated waste services provider to these customers and has subcontracted with the Buyer to performed hazardous waste services, including collection, transportation and disposal for the Company, as necessary.