Equity Method Investments

As a result of the Infrastructure Transaction, the Company owns an approximate 29% equity interest in Brand at December 31, 2015. See Note 3, Acquisitions and Dispositions, for additional information related to the Infrastructure Transaction.

The book value of the Company's equity method investment in Brand at December 31, 2015 and 2014 was $250.1 million and $285.7 million, respectively. The Company's initial underlying equity in the net assets of Brand, upon consummation of the Infrastructure Transaction, was approximately $225 million. The difference between the initial fair value of the Company's equity method investment in Brand and the Company's underlying equity in the net assets of Brand was determined to be equity method goodwill and is not amortized. No instances of impairment were noted on the Company's equity method investment at December 31, 2015.

The Company's proportionate share of Brand's net income or loss is recorded one quarter in arrears. Accordingly, the Consolidated Statement of Operations for the year ended December 31, 2013 does not include any amounts related to the Infrastructure strategic venture in the caption, Equity in income (loss) of unconsolidated entities, net. Brand's summarized balance sheet information at September 30, 2015 and 2014 and summarized statement of operations information for the year ended September 30, 2015 and the period from November 27, 2013 through September 30, 2014 are summarized as follows:




(In thousands)	September 30 2015		September 30 2014
Summarized Balance Sheet Information of Brand:
Current assets	$	806,510	$	815,809
Property and equipment , net	894,537		923,056
Other noncurrent assets	1,519,722		1,594,669
Total assets	$	3,220,769	$	3,333,534

Short-term borrowings, including current portion of long-term debt	$	68,687	$	68,748
Other current liabilities	397,759		360,714
Long-term debt	1,736,081		1,747,522
Other noncurrent liabilities	383,638		406,636
Total liabilities	2,586,165		2,583,620
Equity	634,604		749,914
Total liabilities and equity	$	3,220,769	$	3,333,534



(In thousands)	Year Ended September 30 2015		Period From November 27 2013 Through September 30 2014 (a)
Summarized Statement of Operations Information of Brand:
Net revenues	$	2,976,471	$	2,559,556
Gross profit	649,596		559,376
Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries	605		(4,848		)
Harsco's equity in income (loss) of Brand	175		(1,595		)

(a) The Company's equity method investment in Brand began on November 26, 2013; accordingly, there is only approximately ten months of related equity income (loss). The results of the Harsco Infrastructure Segment from January 1, 2013 through the date of closing are reported in the Company's results of operations for 2013.

The Company is required to make quarterly payments 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 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 years ended December 31, 2015 and 2014, the Company recognized $8.5 million and $9.7 million, respectively, of change in fair value to the unit adjustment liability.

The Consolidated Balance Sheets as of December 31, 2015 and 2014 include balances related to the unit adjustment liability of $79.9 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 15, Financial Instruments.

The Company will continue to evaluate the implications of making payments in cash or in kind based upon performance of the Infrastructure strategic venture and the Company's liquidity and capital resources. 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)	December 31 2015		December 31 2014
Balances due from Brand	$	1,557	$	1,860
Balances due to Brand	21,407		28,311

The remaining balances between the Company and Brand, at December 31, 2015, relate primarily to transition services and 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 on-going basis once all aspects of the Infrastructure Transaction have been finalized.