ACQUISITIONS AND DIVESTITURES

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES

The following table summarizes the locations of our acquisitions for the years ended December 31, twelve months ended December 31, 2014, 2013 and 2012:

Acquisition Locations	2014	2013	2012
United States	17	13	17
Argentina	2	3	1
Brazil	3	2	1
Canada	2	3	—
Chile	3	1	3
Japan	2	3	1
Mexico	—	1	2
Portugal	5	2	1
Romania	3	6	2
Republic of Korea	1	—	—
Spain	3	3	8
United Kingdom	3	12	5
Total	44	49	41

During 2014, we completed 44 acquisitions, of which 17 were domestic and 27 were international businesses. Domestically, we acquired 100% of the stock of two regulated waste businesses, selected assets of eleven regulated waste businesses, three communication services business, and one recall and returns business.

Internationally, in Argentina, we acquired 100% of the stock of two regulated waste businesses. In Brazil, we acquired 100% of the stock of two regulated waste business and selected assets of one regulated waste business. In Canada, we acquired 100% of the stock of two communication solution businesses. In Chile, we acquired 100% of the stock of two regulated waste businesses, and 90% of the stock of another. In Japan, we acquired 100% of the stock of two regulated waste businesses. In Portugal, we acquired 100% of the stock of five regulated waste business. In Romania, we acquired selected assets of two regulated waste businesses and 100% of the stock of another. In Republic of Korea, which represents a new market for us, we acquired 75.5% of the stock of one regulated waste business. In Spain, we acquired 100% of the stock of one regulated waste business and selected assets of two regulated waste businesses. In the United Kingdom, we acquired 100% of the stock of two regulated waste businesses and selected assets of another.

We also increased our majority share in a previous acquisition in Japan to 100%.

The following table summarizes the aggregate purchase price paid for acquisitions and other adjustments of consideration to be paid for acquisitions during the years ended December 31, 2014, 2013 and 2012:

In thousands
	2014		2013		2012
Cash	$	374,321	$	161,936	$	224,367
Promissory notes	125,229		64,581		70,670
Deferred consideration	3,535		31,149		17,681
Contingent consideration	17,174		4,371		9,190
Total purchase price	$	520,259	$	262,037	$	321,908

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 twelve months ended December 31, 2014, we recognized a net increase in goodwill of $235.6 million excluding the effect of foreign currency translation (see Note 11 – Goodwill and Other Intangible Assets, in the Notes to the Consolidated Financial Statements). A net increase of $164.9 million was assigned to our United States reportable segment, and a net increase of $70.7 million was assigned to our International reportable segment. Approximately $125 million of the goodwill recognized during the twelve months ended December 31, 2014 will be deductible for income taxes.

During the twelve months ended December 31, 2014, we recognized a net increase in intangible assets from acquisitions of $276.8 million, excluding the effect of foreign currency translation. The changes include $117.2 million in the estimated fair value of acquired customer relationships with amortizable lives of 10 to 40 years, $158.1 million in permits with indefinite lives, and $1.2 million in tradename with an amortizable lives of 15 to 20 years, and $0.3 million in other intangibles with an amortizable life of 10 years.

The purchase prices for these acquisitions in excess of acquired tangible assets have been primarily allocated to goodwill and other intangibles and are preliminary, pending completion of certain intangible asset valuations and completion accounts. The following table summarizes the preliminary purchase price allocation for current period acquisitions and other adjustments to purchase price allocations during the years ended December 31, 2014, 2013 and 2012:

In thousands
	2014			2013			2012
Fixed assets	$	98,916		$	15,582		$	30,426
Intangibles	276,798			92,398			150,149
Goodwill	235,597			179,795			147,156
Accounts receivable	68,019			19,920			26,656
Accounts payable	(37,021		)	(8,910		)	(7,423		)
Environmental remediation liabilities	(32,383		)	—			—
Net other (liabilities)/ assets	(42,015		)	(11,030		)	3,869
Debt	(22,102		)	(7,512		)	(4,353		)
Net deferred tax liabilities	(18,769		)	(13,995		)	(20,186		)
Noncontrolling interests	(6,781		)	(4,211		)	(4,386		)
Total purchase price allocation	$	520,259		$	262,037		$	321,908

During the twelve months ended December 31, 2014, 2013 and 2012 the Company incurred $13.3 million, $10.3 million, and $7.9 million, respectively, of acquisition related expenses. These expenses are included with "Selling, general and administrative expenses" ("SG&A") on our Consolidated Statements of Income.

Included in the acquisitions discussed above for the quarter ended June 30, 2014 is the acquisition of 100% of the stock of PSC Environmental Services, LLC ("PSC Environmental"), which was consummated on April 22, 2014. Subject to various adjustments, the total consideration for the PSC Environmental acquisition was $284.2 million, of which $248.2 million was paid in cash, $30.0 million was paid by a two-year promissory note, and $6.0 million of the total purchase price represents contingent consideration which is based on Stericycle's expected future utilization of acquired net operating losses. A portion of the cash payment was applied to pay PSC Environmental’s indebtedness as of the closing date. As part of the PSC Environmental acquisition, we assumed $32.4 million in environmental remediation liabilities (see Note 13 - Environmental Remediation Liabilities, in the Notes to the Consolidated Financial Statements).

Included in the acquisitions discussed above for the quarter ended September 30, 2014 is the acquisition of 100% of the stock of Shiraishi-Sogyo Co. Ltd. ("Shiraishi"). Consideration for the acquisition of Shiraishi included the effective settlement of pre-existing loans we extended to Shiraishi for $15.7 million and the assumption of Shiraishi's bank debt of $4.7 million.

The results of operations of these acquired businesses have been included in the consolidated statements of income from the date of the acquisition. The pro forma revenues for the twelve months ended December 31, 2014 from the aggregate acquisitions during 2014 was approximately $364.5 million, which includes $219.5 million estimated impact to 2014 reported revenues. Our pro forma earnings include estimates for intangible asset amortization expense but does not include estimated synergies as the timing and realizability of synergies is uncertain. The following consolidated pro forma information on the impact of the 2014 acquisitions to our consolidated revenues is based on the assumption that these acquisitions all occurred on January 1, 2013:

In thousands
	Years Ended December 31,
	2014		2013
Revenues	$	2,700,614	$	2,507,314
Net income	331,330		317,609