NOTE 2 – ACQUISITIONS

The following table summarizes the locations of our acquisitions for the six months ended June 30, 2016:

Acquisition Locations	2016
United States		11
Republic of Korea		1
Romania		2
Spain		2
United Kingdom		1
Total		17

During the quarter ended March 31, 2016, we completed seven acquisitions. Domestically, we acquired 100% of the stock of one regulated waste business and selected assets of four secure information destruction businesses. Internationally, we acquired selected assets of one regulated waste business in Romania and one in Spain.

During the quarter ended June 30, 2016, we completed ten acquisitions. Domestically, we acquired selected assets of three regulated waste businesses and three secure information destruction businesses. Internationally, we acquired selected assets of one regulated waste business in each of the Republic of Korea, Romania, Spain and the United Kingdom.

The following table summarizes the acquisition date fair value of consideration transferred for acquisitions completed during the six months ended June 30, 2016:

In thousands
	Six Months Ended June 30, 2016
Cash	$	32,651
Promissory notes		23,238
Deferred consideration		1,545
Contingent consideration		75
Total purchase price	$	57,509

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 six months ended June 30, 2016, we recognized an increase in goodwill of $33.6 million related to current year acquisitions, excluding the effect of foreign currency translation, of which $29.2 million was assigned to our Domestic Regulated Waste and Compliance Services (“Domestic RCS”) reportable segment and $4.4 million was assigned to our International Regulated Waste and Compliance Services (“International RCS”) reportable segment (see Note 9 – Goodwill and Other Intangible Assets). Approximately $28.8 million of the goodwill recognized from current year acquisitions will be deductible for tax purposes.

During the six months ended June 30, 2016, we recognized an increase in intangible assets from current year acquisitions of $18.9 million, excluding the effect of foreign currency translation. We recognized $18.1 million for the estimated fair value of acquired customer relationships with amortizable lives of 10 to 40 years, and $0.8 million for a covenant not-to-compete with an amortizable life of 5 years.

The fair value of consideration transferred in business combinations is allocated to the tangible and intangible assets acquired and liabilities 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 six months ended June 30, 2016:

In thousands
	Six Months Ended June 30, 2016
Fixed assets	$	5,069
Intangibles		18,853
Goodwill		33,593
Accounts receivable		1,275
Net other assets/ (liabilities)		8
Current liabilities		(239	)
Net deferred tax liabilities		(1,050	)
Total purchase price allocation	$	57,509

During the six months ended June 30, 2016 and 2015, the Company incurred $5.6 million and $6.3 million, respectively, of acquisition related expenses. These expenses are included in “Selling, general and administrative expenses” (“SG&A”) on our Condensed Consolidated Statements of Income. The results of operations of these acquired businesses have been included in the Condensed 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.

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 during the six months ended June 30, 2016 as part of the final working capital adjustment for the 2015 Shred-it acquisition:

In thousands
	Six Months Ended June 30, 2016
Cash	$	9,446
Promissory notes		(1,789	)
Total purchase price	$	7,657

The following table summarizes these adjustments by major assets acquired and liabilities assumed for prior year acquisitions:

In thousands
	Shred-it Acquisition			Other Prior Year Acquisitions			Total Changes
Fixed assets	$	31,861		$	(165	)	$	31,696
Intangibles		277,000			17,792			294,792
Goodwill		(209,958	)		(14,165	)		(224,123	)
Accounts receivable		(1,085	)		776			(309	)
Net other assets		—			147			147
Current liabilities		(713	)		(1,343	)		(2,056	)
Net deferred tax liabilities		(87,637	)		(4,853	)		(92,490	)
Total purchase price allocation	$	9,468		$	(1,811	)	$	7,657

During the second quarter of 2016, we recorded various adjustments to our provisional amounts for the Shred-it acquisition. The transactions have been accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The purchase price allocation is preliminary until we complete our assessment. As of June 30, 2016, the following recognized amounts are subject to change:

·	amounts for certain balances included in working capital pending receipt of certain information that could affect provisional amounts recorded;

·	amounts for intangibles assets and property, plant and equipment, pending finalization of valuation efforts as well as the completion of procedures confirming the existence and condition of certain property, plant and equipment assets;

·	amounts for income tax liabilities, pending finalization of estimates and assumptions in respect of certain tax aspects of the transaction; and

·	amount of goodwill pending the completion of the valuation of the assets acquired and liabilities assumed.

We will finalize the amounts recognized as we obtain the information necessary to complete the analysis. We expect to finalize these amounts as soon as possible but no later than one year from the acquisition date. We do not anticipate material changes in the purchase price allocation of other prior year acquisitions.