Acquisitions and Dispositions (Tables)

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Summary of assets acquired and liabilities assumed

The preliminary fair value recorded for the assets acquired and liabilities assumed for ESOL is as follows:

	Preliminary Valuation
(In millions)	April 6 2020		Measurement Period Adjustments		September 30 2020
Cash and cash equivalents	$	0.4	$	—	$	0.4
Trade accounts receivable	124.1		(0.9)		123.2
Inventory	5.0		—		5.0
Other current assets	0.7		(0.4)		0.3
Property, plant and equipment	105.3		—		105.3
Right-of-use assets	56.0		—		56.0
Goodwill	152.0		(8.1)		143.9
Intangible assets	161.0		—		161.0
Other assets	0.2		—		0.2
Accounts payable	(48.6)		(0.4)		(49.0)
Accrued expenses	(17.5)		—		(17.5)
Current portion of operating lease liabilities	(16.6)		—		(16.6)
Other current liabilities	(6.4)		—		(6.4)
Environmental liabilities	(24.4)		—		(24.4)
Deferred income taxes	(15.5)		—		(15.5)
Operating lease liabilities	(39.4)		—		(39.4)
Total identifiable net assets of ESOL	436.3		(9.8)		426.5
Non-compete agreement	2.5		—		2.5
Total identifiable net assets of ESOL, including non-compete agreement	$	438.8	$	(9.8)	$	429.0

The fair value recorded for the assets acquired and liabilities assumed for Clean Earth is as follows:    

	Final
(In millions)	June 28 2019		Measurement Period Adjustments (a)		September 30 2020
Cash and cash equivalents (b)	$	42.8	$	(39.2)	$	3.6
Trade accounts receivable, net	63.7		(1.2)		62.5
Other receivables	0.8		1.3		2.1
Other current assets	8.7		(1.4)		7.3
Property, plant and equipment	75.6		1.4		77.0
Right-of-use assets	14.4		11.4		25.8
Goodwill	313.8		16.8		330.6
Intangible assets	261.1		(18.9)		242.2
Other assets	4.0		(2.8)		1.2
Accounts payable	(23.0)		(0.1)		(23.1)
Acquisition consideration payable (b)	(39.2)		39.2		—
Other current liabilities	(18.0)		(1.7)		(19.7)
Net deferred taxes liabilities	(51.2)		5.5		(45.7)
Operating lease liabilities	(11.1)		(8.4)		(19.5)
Other liabilities	(6.5)		(2.1)		(8.6)
Total identifiable net assets of Clean Earth	$	635.9	$	(0.2)	$	635.7

(a)     The measurement period adjustments did not have a material impact on the Company's previously reported operating results.

(b)     Acquisition consideration payable represents a portion of the cash consideration not paid out until July 2019.

Preliminary valuation of identifiable intangible assets and amortization periods

The following table details the preliminary valuation of identifiable intangible assets and amortization periods for ESOL and the non-compete agreement entered into by the Company upon acquisition of ESOL:

		Preliminary Valuation
(Dollars in millions)	Weighted-Average Amortization Period	April 6 2020		Measurement Period Adjustments		September 30 2020
Permits and rights	22 years	$	138.0	$	—	$	138.0
Customer relationships	10 years	23.0		—		23.0
Total identifiable intangible assets of ESOL		161.0		—		161.0
Non-compete agreement	4 years	2.5		—		2.5
Total identifiable intangible assets acquired		$	163.5	$	—	$	163.5

The following table details the valuation of identifiable intangible assets and amortization periods for Clean Earth:

		Final
(In millions)	Weighted-Average Amortization Period	Preliminary Valuation June 28, 2019		Measurement Period Adjustments (c)		September 30 2020
Permits	18 years	$	176.1	$	(6.0)	$	170.1
Customer relationships	8 years	33.4		(12.9)		20.5
Air rights	Usage based (d)	25.6		—		25.6
Trade names	12 years	26.0		—		26.0
Total identifiable intangible assets of Clean Earth		$	261.1	$	(18.9)	$	242.2

(c)     The measurement period adjustments did not have a material impact on the Company's previously reported operating results.

(d)     The Company estimates that based on current usage that the expected useful life would be 27 years.

Pro forma information

	Three Months Ended				Nine Months Ended
	September 30				September 30
(In millions)	2020		2019		2020		2019
Pro forma revenues	$	509.4	$	572.7	$	1,486.2	$	1,650.3
Pro forma net income attributed to Harsco Corporation (including discontinued operations) (e)	(1.8)		434.9		1.0		440.9

(e) Pro forma net income for the three and nine months ended September 30, 2019 includes a $417.5 million after-tax gain on the sale of AXC.

Balance sheet positions and financial information included in net income from discontinued operations and statements of cash flows

Certain key selected financial information included in net income (loss) from discontinued operations for the former Harsco Industrial Segment is as follows:

	Three Months Ended				Nine Months Ended
	September 30				September 30
(In millions)	2020		2019		2020		2019
Amounts for the former Harsco Industrial Segment:
Total revenues	$	—	$	39,855	$	10,203	$	274,037
Cost of products sold	—		28,174		8,082		201,188
Gain on sale from discontinued business	—		527,980		18,371		527,980
Income (loss) from discontinued business	(716)		803		(593)		24,877
Additional amounts allocated to the former Harsco Industrial Segment:
Selling, general and administrative expenses (f)	$	521	$	1,994	$	1,710	$	5,521
Interest expense (g)	—		—		—		11,237
Loss on early extinguishment of debt (h)	—		5,314		—		5,314

(f) The Company has allocated directly attributable transaction costs to discontinued operations. In addition, this caption includes costs directly attributable to retained contingent liabilities of the Harsco Industrial Segment.

(g) The Company has allocated interest expense, including a portion of the amount reclassified into income for the Company's interest rate swaps and amortization of deferred financing costs resulting from the AXC disposal, as part of discontinued operations.

(h) The Company has allocated the $5.3 million write-off of deferred financing costs to discontinued operations as it is directly attributable to the mandatory repayment of the Original Term Loan that resulted from the AXC disposal.    

The following is selected financial information included on the Company's Condensed Consolidated Statements of Cash Flows attributable to the former Harsco Industrial Segment:

	Nine Months Ended
	September 30
(In millions)	2020		2019
Non-cash operating items
Depreciation and amortization	$	—	$	3,301
Cash flows from investing activities
Purchases of property, plant and equipment	106		6,151