Equity Method Investments

In November 2013, the Company consummated the previously announced transaction to sell the Company's Harsco Infrastructure Segment into a strategic venture with Clayton, Dubilier & Rice ("CD&R") as part of a transaction that combined the Harsco Infrastructure Segment with Brand Energy & Infrastructure Services, Inc., which CD&R simultaneously acquired (the "Infrastructure Transaction"). As a result of the Infrastructure Transaction, the Company owns an approximate 29% equity interest in Brand Energy & Infrastructure Services Inc. and Subsidiaries ("Brand" or the "Infrastructure strategic venture") at both June 30, 2015 and December 31, 2014.

The book value of the Company's equity method investment in Brand at June 30, 2015 and December 31, 2014 was $259.9 million and $285.7 million, respectively. The Company records the Company's proportionate share of Brand's net income or loss one quarter in arrears. Brand's results of operations for the three months ended March 31, 2015 and 2014 and the six months ended March 31, 2015 and the period from November 27, 2013 through March 31, 2014, are summarized as follows:



(In thousands)	Three Months Ended March 31 2015			Three Months Ended March 31 2014			Six Months Ended March 31 2015			Period From November 27 2013 Through March 31 2014
Summarized Statement of Operations Information of Brand:
Net revenues	$	677,527		$	741,763		$	1,481,726		$	977,857
Gross profit	134,705			151,862			331,946			200,694
Net loss attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries	(26,418		)	(13,272		)	(12,201		)	(17,513		)

Harsco's equity in loss of Brand	(7,584		)	(3,518		)	(3,501		)	(4,748		)

The Company is required to make a quarterly payment to the Company's partner in the Infrastructure strategic venture, either (at the Company's election) (i) in cash, with total payments to equal approximately $22 million per year on a pre-tax basis (approximately $15 million per year after-tax), or (ii) in kind, through the transfer of approximately 2.5% of the Company's ownership interest in the Infrastructure strategic venture on an annual basis (the "unit adjustment liability"). The resulting liability is reflected in the caption, Unit adjustment liability, on the Company's Condensed Consolidated Balance Sheets. The Company will recognize the change in fair value to the unit adjustment liability each period until the Company is no longer required to make these payments or chooses not to make these payments. The change in fair value to the unit adjustment liability is a non-cash expense. For the three and six months ended June 30, 2015, the Company recognized $2.2 million and $4.4 million, respectively, of change in fair value to the unit adjustment liability, compared to $2.5 million and $5.0 million for the three and six months ended June 30, 2014, respectively.

The Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 include balances related to the unit adjustment liability of $87.0 million and $93.8 million, respectively, in the current and non-current captions, Unit adjustment liability. A reconciliation of beginning and ending balances related to the unit adjustment liability is included in Note 14, Derivative Instruments, Hedging Activities and Fair Value.

The Company intends to make these quarterly payments in cash and will continue to evaluate the implications of making payments in cash or in kind based upon performance of the Infrastructure strategic venture. In the future, should the Company decide not to make the cash payment, the value of both the equity method investment in Brand and the related unit adjustment liability may be impacted, and the change may be reflected in earnings in that period.

Balances related to transactions between the Company and Brand are as follows:



(In thousands)	June 30 2015		December 31 2014
Balances due from Brand	$	2,940	$	1,860
Balances due to Brand	29,702		28,311

These balances between the Company and Brand relate primarily to the funding of certain transferred defined benefit pension plan obligations through 2018. There is not expected to be any significant level of revenue or expense between the Company and Brand on an ongoing basis once all aspects of the Infrastructure Transaction have been finalized.