株探米国株
英語
エドガーで原本を確認する
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to          
Commission File Number 001-03970
Enviri Logo Only.jpg
ENVIRI CORPORATION
(Exact name of registrant as specified in its charter) 
Delaware 23-1483991
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification number)
Two Logan Square
100-120 North 18th Street, 17th Floor,		 Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code  267-857-8715 
Harsco Corporation
Former name, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, par value $1.25 per share NVRI New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit).   Yes ☒  NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 ☒
 Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES ☐  NO ☒
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class  
Outstanding at July 31, 2023
Common stock, par value $1.25 per share   79,755,066

Table of Contents
ENVIRI CORPORATION
FORM 10-Q
INDEX
 
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2
Table of Contents
Glossary of Defined Terms

Unless the context requires otherwise, "Eviri," the "Company," "we," "our," or "us" refers to Enviri Corporation on a consolidated basis. The Company also uses several other terms in this Quarterly Report on Form 10-Q, which are further defined below:

Term Description
AOCI Accumulated Other Comprehensive Income (Loss)
AR Facility Trade receivables securitization facility
ASU Financial Accounting Standards Board Accounting Standards Update
CE Clean Earth reportable business segment
CERCLA Comprehensive Environmental Response, Compensation, and Liability Act of 1980
Consolidated Adjusted EBITDA EBITDA as calculated in accordance with the Company's Credit Agreement
Credit Agreement Credit Agreement governing the Senior Secured Credit Facilities
DEA United States Drug Enforcement Administration
Deutsche Bahn National railway company in Germany
DTSC California Department of Toxic Substances Control
EBITDA Earnings before interest, tax, depreciation and amortization
ESOL Stericycle Environmental Solutions business
FASB Financial Accounting Standards Board
HE Harsco Environmental reportable business segment
ICMS Type of value-added tax in Brazil
IKG The former Harsco Industrial IKG business
ISDA International Swaps and Derivatives Association
LIBOR London Interbank Offered Rates
Network Rail Infrastructure manager for most of the railway in the U.K.
New Term Loan $500 million term loan raised in March 2021 under the Senior Secured Credit Facilities, maturing on March 10, 2028
OCI Other Comprehensive Income (Loss)
PA DEP Pennsylvania Department of Environmental Protection
Rail The former Harsco Rail reportable business segment
Revolving Credit Facility $700 million multi-year revolving credit facility under the Senior Secured Credit Facilities
ROU Right of use
SBB Federal railway system of Switzerland
SCE Supreme Council for Environment in Bahrain
SEC Securities and Exchange Commission
Senior Notes 5.75% Notes due July 31, 2027
Senior Secured Credit Facilities Primary source of borrowings comprised of the New Term Loan and the Revolving Credit Facility
SOFR Secured Overnight Financing Rate
SPE The Company's wholly-owned bankruptcy-remote special purpose entity, which is used in connection with the AR Facility
SPRA State Revenue Authorities from the State of São Paulo, Brazil
TSDF Treatment, storage, and disposal facility permits issued under the Resource Conservation and Recovery Act
U.S. GAAP Accounting principles generally accepted in the U.S.
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PART I — FINANCIAL INFORMATION
ITEM 1.      FINANCIAL STATEMENTS

ENVIRI CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands) June 30
2023		 December 31
2022
ASSETS    
Current assets:    
Cash and cash equivalents $ 85,484  $ 81,332 
Restricted cash 3,882  3,762 
Trade accounts receivable, net 296,521  264,428 
Other receivables 41,941  25,379 
Inventories 84,644  81,375 
Prepaid expenses 22,142  30,583 
Current portion of assets held-for-sale 271,189  266,335 
Other current assets 19,121  14,541 
Total current assets 824,924  767,735 
Property, plant and equipment, net 649,662  656,875 
Right-of-use assets, net 98,662  101,253 
Goodwill 764,949  759,253 
Intangible assets, net 339,076  352,160 
Deferred income tax assets 14,804  17,489 
Assets held-for-sale 90,541  70,105 
Other assets 70,019  65,984 
Total assets $ 2,852,637  $ 2,790,854 
LIABILITIES    
Current liabilities:    
Short-term borrowings $ 3,853  $ 7,751 
Current maturities of long-term debt 14,595  11,994 
Accounts payable 212,570  205,577 
Accrued compensation 51,973  43,595 
Income taxes payable 5,337  3,640 
Current portion of operating lease liabilities 26,140  25,521 
Current portion of liabilities of assets held-for-sale 153,199  159,004 
Other current liabilities 139,300  140,199 
Total current liabilities 606,967  597,281 
Long-term debt 1,382,140  1,336,995 
Retirement plan liabilities 48,505  46,601 
Operating lease liabilities 73,537  75,246 
Liabilities of assets held-for-sale 6,358  9,463 
Environmental liabilities 26,494  26,880 
Deferred tax liabilities 33,425  30,069 
Other liabilities 47,804  45,277 
Total liabilities 2,225,230  2,167,812 
COMMITMENTS AND CONTINGENCIES
ENVIRI CORPORATION STOCKHOLDERS’ EQUITY    
Common stock 145,966  145,448 
Additional paid-in capital 232,463  225,759 
Accumulated other comprehensive loss (544,606) (567,636)
Retained earnings 1,593,477  1,614,441 
Treasury stock (849,808) (848,570)
Total Enviri Corporation stockholders’ equity 577,492  569,442 
Noncontrolling interests 49,915  53,600 
Total equity 627,407  623,042 
Total liabilities and equity $ 2,852,637  $ 2,790,854 
See accompanying notes to unaudited condensed consolidated financial statements.
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ENVIRI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
(In thousands, except per share amounts) 2023 2022 2023 2022
Revenues from continuing operations:    
Revenues $ 520,168  $ 481,052  $ 1,015,821  $ 933,849 
Costs and expenses from continuing operations:    
Cost of sales 406,627  403,199  807,315  780,218 
Selling, general and administrative expenses 76,850  67,935  148,785  137,088 
Research and development expenses 500  296  676  352 
Goodwill impairment charge —  104,580  —  104,580 
Property, plant and equipment impairment charge 14,099  —  14,099  — 
Other (income) expenses, net (2,223) 2,045  (8,374) 866 
Total costs and expenses 495,853  578,055  962,501  1,023,104 
Operating income (loss) from continuing operations 24,315  (97,003) 53,320  (89,255)
Interest income 1,567  693  3,022  1,337 
Interest expense (25,724) (16,692) (50,052) (31,784)
Facility fees and debt-related income (expense) (2,730) 2,149  (5,093) 1,617 
Defined benefit pension income (expense) (5,407) 2,247  (10,742) 4,657 
Income (loss) from continuing operations before income taxes and equity income (7,979) (108,606) (9,545) (113,428)
Income tax benefit (expense) from continuing operations (10,319) 3,115  (17,242) 1,894 
Equity income (loss) of unconsolidated entities, net (309) (114) (442) (245)
Income (loss) from continuing operations (18,607) (105,605) (27,229) (111,779)
Discontinued operations:    
Income (loss) from discontinued businesses 7,556  1,879  8,175  (37,218)
Income tax benefit (expense) from discontinued businesses (4,787) (770) (5,374) 5,821 
Income (loss) from discontinued operations, net of tax 2,769  1,109  2,801  (31,397)
Net income (loss) (15,838) (104,496) (24,428) (143,176)
Less: Net (income) loss attributable to noncontrolling interests 4,399  (1,095) 3,464  (2,254)
Net income (loss) attributable to Enviri Corporation $ (11,439) $ (105,591) $ (20,964) $ (145,430)
Amounts attributable to Enviri Corporation common stockholders:
Income (loss) from continuing operations, net of tax $ (14,208) $ (106,700) $ (23,765) $ (114,033)
Income (loss) from discontinued operations, net of tax 2,769  1,109  2,801  (31,397)
Net income (loss) attributable to Enviri Corporation common stockholders $ (11,439) $ (105,591) $ (20,964) $ (145,430)
Weighted-average shares of common stock outstanding 79,816  79,509  79,725  79,437 
Basic earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations $ (0.18) $ (1.34) $ (0.30) $ (1.44)
Discontinued operations 0.03  0.01  0.04 (0.40)
Basic earnings (loss) per share attributable to Enviri Corporation common stockholders $ (0.14)  (a) $ (1.33) $ (0.26) $ (1.83) (a)
Diluted weighted-average shares of common stock outstanding 79,816  79,509  79,725  79,437 
Diluted earnings (loss) per common share attributable to Enviri Corporation common stockholders:
Continuing operations $ (0.18) $ (1.34) $ (0.30) $ (1.44)
Discontinued operations 0.03  0.01  0.04 (0.40)
Diluted earnings (loss) per share attributable to Enviri Corporation common stockholders $ (0.14)  (a) $ (1.33) $ (0.26) $ (1.83) (a)
(a) Does not total due to rounding

See accompanying notes to unaudited condensed consolidated financial statements.
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ENVIRI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
Three Months Ended
  June 30
(In thousands) 2023 2022
Net income (loss) $ (15,838) $ (104,496)
Other comprehensive income (loss):    
Foreign currency translation adjustments, net of deferred income taxes of $1,139 and $(4,616) in 2023 and 2022, respectively
 10,589  (58,646)
Net gain (loss) on cash flow hedging instruments, net of deferred income taxes of $(1,529) and $(301)in 2023 and 2022, respectively
 4,434  720 
Pension liability adjustments, net of deferred income taxes of $(292) and $(312)in 2023 and 2022, respectively
 (627) 28,810 
Unrealized gain (loss) on marketable securities, net of deferred income taxes of $(2) and $4 in 2023 and 2022, respectively
 5  (10)
Total other comprehensive income (loss) 14,401  (29,126)
Total comprehensive income (loss) (1,437) (133,622)
Comprehensive (income) loss attributable to noncontrolling interests 6,234  1,808 
Comprehensive income (loss) attributable to Enviri Corporation $ 4,797  $ (131,814)
Six Months Ended
  June 30
(In thousands) 2023 2022
Net income (loss) $ (24,428) $ (143,176)
Other comprehensive income (loss):    
Foreign currency translation adjustments, net of deferred income taxes of $2,611 and $(6,454) in 2023 and 2022, respectively
 23,035  (61,493)
Net gain (loss) on cash flow hedging instruments, net of deferred income taxes of $(682) and $(631) in 2023 and 2022, respectively
 1,874  1,860 
Pension liability adjustments, net of deferred income taxes of $(710) and $(664) in 2023 and 2022, respectively
 (3,362) 42,528 
Unrealized gain (loss) on marketable securities, net of deferred income taxes of $(2) and $4 in 2023 and 2022
 6  (13)
Total other comprehensive income (loss) 21,553  (17,118)
Total comprehensive income (loss) (2,875) (160,294)
Less: Comprehensive (income) loss attributable to noncontrolling interests 4,941  1,131 
Comprehensive income (loss) attributable to Enviri Corporation $ 2,066  $ (159,163)

See accompanying notes to unaudited condensed consolidated financial statements.
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ENVIRI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
 Six Months Ended June 30
(In thousands) 2023 2022
Cash flows from operating activities:    
Net income (loss) $ (24,428) $ (143,176)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation 67,496  66,067 
Amortization 16,032  17,067 
Deferred income tax (benefit) expense 7,622  (10,396)
Equity (income) loss of unconsolidated entities, net 442  245 
Dividends from unconsolidated entities —  526 
(Gain) loss on early extinguishment of debt —  (2,254)
Goodwill impairment charge —  104,580 
Property, plant and equipment impairment charge 14,099  — 
Other, net 4,146  1,020 
Changes in assets and liabilities, net of acquisitions and dispositions of businesses:    
Accounts receivable (56,383) 87,607 
Income tax refunds receivable, reimbursable to seller —  7,687 
Inventories (7,952) (8,435)
Contract assets (3,535) 7,836 
Right-of-use assets 16,211  14,383 
Accounts payable 12,960  18,847 
Accrued interest payable (192) (740)
Accrued compensation 9,194  (5,884)
Advances on contracts (12,978) (13,626)
Operating lease liabilities (14,790) (14,095)
Retirement plan liabilities, net (5,468) (21,587)
Other assets and liabilities 5,714  12,067 
Net cash (used) provided by operating activities 28,190  117,739 
Cash flows from investing activities:    
Purchases of property, plant and equipment (66,341) (61,791)
Proceeds from sales of assets 1,439  6,591 
Expenditures for intangible assets (427) (100)
Proceeds from notes receivable 11,238  8,605 
Net proceeds (payments) from settlement of foreign currency forward exchange contracts (2,408) 4,999 
Payments for settlements of interest rate swaps —  (2,123)
Other investing activities, net 84  153 
Net cash used by investing activities (56,415) (43,666)
Cash flows from financing activities:    
Short-term borrowings, net 601  (31)
Current maturities and long-term debt:    
Additions 123,996  104,961 
Reductions (90,727) (152,861)
Contributions from noncontrolling interests 1,654  — 
Sale of noncontrolling interests —  1,901 
Stock-based compensation - Employee taxes paid (1,238) (1,698)
Payment of contingent consideration —  (6,915)
Net cash (used) provided by financing activities 34,286  (54,643)
Effect of exchange rate changes on cash and cash equivalents, including restricted cash (1,789) (5,751)
Net increase in cash and cash equivalents, including restricted cash 4,272  13,679 
Cash and cash equivalents, including restricted cash, at beginning of period 85,094  87,128 
Cash and cash equivalents, including restricted cash, at end of period $ 89,366  $ 100,807 
Supplementary cash flow information:
Change in accrual for purchases of property, plant and equipment included in accounts payable $ (3,170) $ 6,836 
See accompanying notes to unaudited condensed consolidated financial statements.
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ENVIRI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)
  Enviri Corporation Stockholders’ Equity    
Common Stock Additional Paid-in Capital Retained
Earnings		 Accumulated Other
Comprehensive
Loss		 Noncontrolling
Interests		  
(In thousands, except share  amounts) Issued Treasury Total
Balances, December 31, 2021
 $ 144,883  $ (846,622) $ 215,528  $ 1,794,510  $ (560,139) $ 57,610  $ 805,770 
Net income —  —  —  (39,839) —  1,159  (38,680)
Total other comprehensive income (loss), net of deferred income taxes of $(2,520)
 —  —  —  —  12,490  (482) 12,008 
Vesting of restricted stock units and other stock grants, net 176,253 shares
 378  (1,632) (378) —  —  —  (1,632)
Amortization of unearned portion of stock-based compensation, net of forfeitures —  —  3,629  —  —  —  3,629 
Balances, March 31, 2022
 145,261  (848,254) 218,779  1,754,671  (547,649) 58,287  781,095 
Net income —  —  —  (105,591) —  1,095  (104,496)
Total other comprehensive income, net of deferred income taxes of $(5,225)
 —  —  —  —  (26,223) (2,903) (29,126)
Contributions from noncontrolling interest —  —  —  —  —  1,900  1,900 
Stock appreciation rights exercised, net 16,671 shares
 29  (66) (29) —  —  —  (66)
Vesting of restricted stock units and other stock grants, net 23,224 shares
 29  —  (29) —  —  —  — 
Amortization of unearned portion of stock-based compensation, net of forfeitures —  —  2,396  —  —  —  2,396 
Balances, June 30, 2022
 $ 145,319  $ (848,320) $ 221,117  $ 1,649,080  $ (573,872) $ 58,379  $ 651,703 


  Enviri Corporation Stockholders’ Equity    
(In thousands, except share amounts) Common Stock Additional Paid-in Capital Retained
Earnings		 Accumulated Other
Comprehensive
Loss		 Noncontrolling
Interests		  
Issued Treasury Total
Balances, December 31, 2022
 $ 145,448  $ (848,570) $ 225,759  $ 1,614,441  $ (567,636) $ 53,600  $ 623,042 
Net income (loss) —  —  —  (9,525) —  935  (8,590)
Total other comprehensive income (loss), net of deferred income taxes of $1,901
 —  —  —  —  6,794  358  7,152 
Purchase of subsidiary shares from noncontrolling interest —  —  398  —  —  (398) — 
Vesting of restricted stock units and other stock grants, net 177,574 shares
 395  (1,108) (395) —  —  —  (1,108)
Amortization of unearned portion of stock-based compensation, net of forfeitures —  —  3,456  —  —  —  3,456 
Balances, March 31, 2023
 145,843  (849,678) 229,218  1,604,916  (560,842) 54,495  623,952 
Net income (loss) —  —  —  (11,439) —  (4,399) (15,838)
Total other comprehensive income (loss), net of deferred income taxes of $(684)
 —  —  —  —  16,236  (1,835) 14,401 
Contributions from noncontrolling interests —  —  —  —  —  1,654  1,654 
Vesting of restricted stock units and other stock grants, net 82,415 shares
 123  (130) (123) —  —  —  (130)
Amortization of unearned portion of stock-based compensation, net of forfeitures —  —  3,368  —  —  —  3,368 
Balances, June 30, 2023
 $ 145,966  $ (849,808) $ 232,463  $ 1,593,477  $ (544,606) $ 49,915  $ 627,407 
See accompanying notes to unaudited condensed consolidated financial statements.
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ENVIRI CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.     Basis of Presentation

Effective June 5, 2023, the corporate name of the Company was changed from Harsco Corporation to Enviri Corporation.

The Company has prepared these unaudited condensed consolidated financial statements in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the SEC. Accordingly, the unaudited condensed consolidated financial statements do not include all information and disclosure required by U.S. GAAP for annual financial statements. The December 31, 2022 Condensed Consolidated Balance Sheet information contained in this Quarterly Report on Form 10-Q was derived from the 2022 audited consolidated financial statements.  These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, all adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in these unaudited condensed consolidated financial statements.

Liquidity

The Company’s cash flow forecasts, combined with existing cash and cash equivalents and borrowings available under the Senior Secured Credit Facilities, indicate sufficient liquidity to fund the Company’s operations for at least the next twelve months. As such, the Company’s unaudited consolidated financial statements have been prepared on the basis that it will continue as a going concern for a period extending beyond twelve months from the date the unaudited consolidated financial statements are issued. This assessment includes the expected ability to meet required financial covenants and the continued ability to draw down on the Senior Secured Credit Facilities (see Note 9).

Reclassifications

Certain reclassifications have been made to prior year amounts to conform with current year classifications. These reclassifications did not have a material impact on the Company's condensed consolidated financial statements, including the notes thereto.



2.     Recently Adopted and Recently Issued Accounting Standards

The following accounting standards have been adopted in 2023:

On January 1, 2023, the Company adopted changes issued by the FASB that clarify that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with accounting standards governing revenue from contracts with customers. The adoption of these changes did not have an immediate impact on the Company's consolidated financial statements, but will be applied prospectively to future business combinations.

On January 1, 2023, the Company adopted changes issued by the FASB that require a buyer in a supplier finance program, also referred to as reverse factoring, payables finance, or structured payables arrangements, to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude, by disclosing qualitative and quantitative information about the program. The adoption of these changes did not have a material impact on the Company's condensed consolidated financial statements, including the notes thereto.


3. Discontinued Operations

Harsco Rail Segment
The Company is in the process of selling its Rail business with a sale expected to occur in 2023. The intention to sell the business was first announced in the fourth quarter of 2021. The sales process was delayed in 2022 due to certain macroeconomic conditions, including rising interest rates. The former Harsco Rail Segment has historically been a separate reportable segment with primary operations in the United States, Europe and Asia Pacific.
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The former Harsco Rail Segment's balance sheet positions as of June 30, 2023 and December 31, 2022 are presented as Assets held-for-sale and Liabilities of assets held-for-sale in the Condensed Consolidated Balance Sheets and are summarized as follows:
(in thousands) June 30
2023		 December 31
2022
Trade accounts receivable, net $ 52,368  $ 41,049 
Other receivables 5,209  4,037 
Inventories 109,242  105,256 
Current portion of contract assets 68,167  84,848 
Other current assets 36,008  30,950 
Property, plant and equipment, net 44,392  41,004 
Right-of-use assets, net 6,412  5,635 
Goodwill 13,026  13,026 
Intangible assets, net 2,616  2,746 
Deferred income tax assets 2,701  6,887 
Noncurrent portion of contract assets 20,420  — 
Other assets 974  807 
Total Rail assets included in Assets held-for-sale $ 361,535  $ 336,245 
Accounts payable $ 52,561  $ 49,083 
Accrued compensation 2,534  1,211 
Current portion of operating lease liabilities 2,925  2,635 
Current portion of advances on contracts 34,089  45,037 
Other current liabilities 61,090  61,039 
Operating lease liabilities 3,472  3,121 
Deferred tax liabilities 2,368  5,480 
Other liabilities 518  861 
Total Rail liabilities included in Liabilities of assets held-for-sale $ 159,557  $ 168,467 

The results of the former Harsco Rail Segment are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for the six months ended June 30, 2023, and 2022. Certain key selected financial information included in Income (loss) from discontinued operations, net of tax, for the former Harsco Rail Segment is as follows:
Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Amounts directly attributable to the former Harsco Rail Segment:
Service revenues $ 10,765  $ 7,488  $ 18,485  $ 14,198 
Product revenues (a)
 78,083  64,364  135,415  109,477 
Cost of services sold 7,290  4,229  12,916  8,524 
Cost of products sold (a)
 60,762  52,548  106,505  125,094 
Income (loss) from discontinued businesses 9,315  5,163  12,066  (30,732)
Additional amounts allocated to the former Harsco Rail Segment:
  Selling, general and administrative expenses (b)
 $ 594  $ 1,862  $ 1,071  $ 3,511 
(a) Changes in product revenues and cost of products sold for 2023 compared with 2022 reflect, in part, estimated forward loss provisions and adjustments on certain long-term contracts, as discussed below.
(b) The Company includes costs to sell the Rail business in the caption Income (loss) from discontinued businesses on the Condensed Consolidated Statements of Operations.

The Company has retained corporate overhead expenses previously allocated to the former Harsco Rail Segment of $1.1 million and $2.1 million for each of the three and six months ended June 30, 2023 and 2022, respectively, as part of Selling, general and administrative expenses on the Condensed Consolidated Statements of Operations.

The Company's former Harsco Rail Segment is currently manufacturing highly-engineered equipment under large long-term fixed-price contracts with Network Rail, Deutsche Bahn, and SBB. The Company has previously recognized estimated forward loss provisions related to these contracts as additional costs in building the machines and continued supply chain related delays were encountered. The Company will continue to update its estimates to complete these contracts, which will include the effect of negotiations with the customer regarding price increases, change orders and extensions to delivery schedules.

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In the second quarter of 2023, the Company reversed a portion of its estimated forward loss provision adjustment in the amount of $23.6 million related to its Network Rail contract. The favorable adjustment was the result of an amendment to the contract with Network Rail in the second quarter which extended the delivery schedule for the machines and reduced the estimate of liquidated damages. The reduction in liquidated damages was recorded as an increase to revenue and contract assets. Partially offsetting this were higher estimated material, engineering and labor costs due to additional experience gained during the manufacturing process. For the three and six months ended June 30, 2022, the Company recorded forward loss provisions of $0.3 million and $24.5 million, respectively, for these contracts, principally for additional estimated contractual liquidated damages which were recorded as a reduction of revenue.

For the Deutsche Bahn contract, in the second quarter of 2023, the Company recorded an additional forward loss provision of $8.4 million. The additional loss provision was due to increased costs related to the critical European-based supplier that had filed for bankruptcy in the second quarter of 2022 and ceased operations during the second quarter of 2023, as well as an increase in estimated component costs and engineering costs. For the six months ended June 30, 2022, the Company recorded a forward loss provision totaling $7.4 million due principally to estimated contractual penalties that would be triggered by supplier delays and thus recorded as a reduction of revenue.

For the SBB contract, in the second quarter of 2023 the Company recorded an additional forward loss provision of $6.1 million. The additional forward loss provision was due to increased estimates for material, engineering and commissioning costs for the remaining vehicles. For the six months ended June 30, 2022, the Company recorded a forward loss provision totaling $3.5 million due to additional supply chain delays and cost overruns.

The estimated forward loss provisions represent the Company's best estimate based on currently available information. It is possible that the Company's overall estimate of liquidated damages, penalties and costs to complete these contracts may change, which would result in an additional estimated forward loss provision at such time.

As of June 30, 2023, the contracts with Network Rail, Deutsche Bahn and the second contract with SBB are 51%, 38% and 83% complete, respectively. The first contract with SBB has been completed.

The following is selected financial information included on the Condensed Consolidated Statements of Cash Flows attributable to the former Harsco Rail Segment:
Six Months Ended June 30
(In thousands) 2023 2022
Cash flows from investing activities
Purchases of property, plant and equipment $ 1,236  $ 1,031 


4.    Accounts Receivable and Note Receivable
Accounts receivable consist of the following:
(In thousands) June 30
2023		 December 31
2022
Trade accounts receivable $ 305,106  $ 272,775 
Less: Allowance for expected credit losses (8,585) (8,347)
Trade accounts receivable, net $ 296,521  $ 264,428 
Other receivables (a)
 $ 41,941  $ 25,379 
(a) Other receivables include employee receivables, insurance receivable, tax claims and refunds and other miscellaneous items not included in Trade accounts receivable, net.

The provision for expected credit losses related to trade accounts receivable was as follows:

  Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Provision for expected credit losses related to trade accounts receivable $ (113) $ (268) $ 394  $ 57 

At June 30, 2023, $13.6 million of the Company's trade accounts receivable were past due by twelve months or more, with $4.0 million of this amount reserved. There has been a recent increase in aged receivables for certain international customers within the HE segment. Collection of the remaining balance is still ultimately expected.

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One of HE’s steel mill customers in the Middle East has idled operations and has missed contractual progress payments. The Company has approximately $5.5 million of net receivables with this customer. The customer has indicated it plans to restart operations. Accordingly, the Company believes this amount is fully collectible; however, if there is an adverse change in the Company's view on collectability, there could be a charge against income in future periods.

Accounts Receivable Securitization Facility
In June 2022, the Company and its SPE entered into an AR Facility with PNC Bank, National Association ("PNC") to accelerate cash flows from trade accounts receivable. The AR Facility has a three-year term. The maximum purchase commitment by PNC is $150.0 million.

The total outstanding balance of trade receivables that have been sold and derecognized by the SPE is $150.0 million and $145.0 million as of June 30, 2023 and December 31, 2022, respectively. The SPE owned $79.0 million and $69.7 million of trade receivables as of June 30, 2023 and December 31, 2022, respectively, which is included in the caption Trade accounts receivable, net, on the Condensed Consolidated Balance Sheets. See Note 9, Debt and Credit Agreements, for AR Facility expenses incurred.

Proceeds received from the AR Facility were as follows and are included in cash from operating activities in the Condensed Consolidated Statements of Cash Flows:

Six Months Ended June 30
(In millions) 2023 2022
Upon execution in June 2022 $ —  $ 120.0 
Additional proceeds 5.0  — 
Total received $ 5.0  $ 120.0 

Factoring Arrangements
The Company maintains factoring arrangements with a financial institution to sell certain accounts receivable that are also accounted for as a sale of financial assets. The following table reflects balances for net amounts sold and program capacities for the arrangements:

(In millions) June 30
2023		 December 31
2022
Net amounts sold under factoring arrangements $ 15.2  $ 17.3 
Program capacities 32.2  31.4 

Note Receivable
In January 2020, the Company sold IKG for $85.0 million including cash and a note receivable, subject to post-closing adjustments. The note receivable from the buyer has a face value of $40.0 million, bearing interest at 2.50%, that is paid in kind and matures on January 31, 2027. Any unpaid principal, along with any accrued but unpaid interest is payable at maturity. Prepayment is required in case of a change in control or a percentage of excess cash flow, as defined in the note receivable agreement. Because there are no scheduled payments under the terms of the note receivable, the balance is classified as noncurrent as of June 30, 2023 and December 31, 2022, and is included in the caption Other assets on the Condensed Consolidated Balance Sheet. During the three and six months ended June 30, 2023, the Company received a payment of $11.2 million related to excess cash flow.
(In millions) June 30
2023		 December 31
2022
Note receivable, at amortized cost $ 13.4  $ 23.9 
Note receivable, fair value 15.1  23.8 


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5.    Inventories
Inventories consist of the following:
(In thousands) June 30
2023		 December 31
2022
Finished goods $ 14,411  $ 11,809 
Work-in-process 1,107  2,030 
Raw materials and purchased parts 26,927  27,946 
Stores and supplies 42,199  39,590 
Total inventories $ 84,644  $ 81,375 

6.     Property, Plant and Equipment
Property, plant and equipment ("PP&E") consist of the following:
(In thousands) June 30
2023		 December 31
2022
Land $ 72,090  $ 72,020 
Land improvements 16,907  16,750 
Buildings and improvements 208,666  217,926 
Machinery and equipment 1,566,383  1,513,238 
Uncompleted construction 78,420  84,472 
Gross property, plant and equipment 1,942,466  1,904,406 
Less: Accumulated depreciation (1,292,804) (1,247,531)
Property, plant and equipment, net $ 649,662  $ 656,875 

In the third quarter of 2020, a customer of HE in China ceased steel making operations at its steel mill site in order to relocate the operations to a new site, as a result of a government mandate to improve environmental conditions of the area, which led to HE having idled equipment on-site. The Company continues to provide services to the same customer at the new site. The customer had entered into an agreement with the government where it will receive compensation for the losses the customer has incurred as a result of the forced shutdown. The Company has continued discussions with the customer regarding compensation, including pursuing other avenues of recovery and seeking relief directly from the local government. Based on further discussions with the customer during the quarter ended June 30, 2023, the Company determined that recovery was no longer probable and recorded an impairment charge of $14.1 million related to the now abandoned equipment at the previous site, which is included in the caption Property, plant and equipment impairment charge in the Condensed Consolidated Statements of Operations.

7. Leases
The components of lease expense were as follows:
Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Finance leases:
Amortization expense $ 2,022  $ 979  $ 3,563  $ 1,957 
Interest on lease liabilities 578  182  932  365 
Operating leases 9,127  8,432  17,681  16,501 
Variable and short-term lease expense 13,602  11,986  25,688  25,329 
Sublease income (1) (1) (3) (3)
Total lease expense from continuing operations $ 25,328  $ 21,578  $ 47,861  $ 44,149 


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8.     Goodwill and Other Intangible Assets
The Company tests for goodwill impairment annually, or more frequently if indicators of impairment exist, or if a decision is made to dispose of a business.  The Company performs its annual goodwill impairment test as of October 1 and monitors for triggering events on an ongoing basis. During the three months ended June 30, 2022, there was a triggering event due to lower near-term earnings expectations due to the impacts of inflation. As a result, a goodwill impairment charge of $104.6 million was recorded for the Clean Earth reporting unit. This charge had no impact on the Company's cash flows or compliance with debt covenants.

During the six months ended June 30, 2023, the Company determined that there were no events or indicators present that would indicate that it was more-likely-than-not that its reporting units' fair values were less than their carrying amounts, which would require a further interim impairment analysis.  However, a continued economic downturn, including continued cost inflation and labor shortages, as well as rising interest rates, could impact the Company's future projected cash flows and discount rates used to estimate fair value, which could result in an impairment charge to any of the Company's reporting units in a future period.

9. Debt and Credit Agreements

Long-term debt consists of the following:
(In thousands) June 30
2023		 December 31
2022
Senior Secured Credit Facilities:
New Term Loan $ 490,000  $ 492,500 
Revolving Credit Facility 410,000  370,000 
5.75% Senior Notes
 475,000  475,000 
Other financing payable (including finance leases) in varying amounts 35,323  26,661 
Total debt obligations 1,410,323  1,364,161 
Less: deferred financing costs (13,588) (15,172)
Total debt obligations, net of deferred financing costs 1,396,735  1,348,989 
Less: current maturities of long-term debt (14,595) (11,994)
Long-term debt $ 1,382,140  $ 1,336,995 
The Senior Secured Credit Facilities contain a consolidated net debt to Consolidated Adjusted EBITDA ratio covenant, which is not to exceed 5.50x for the quarter ended June 30, 2023 and through and including the quarter ending December 31, 2023 and then decreasing quarterly until reaching 4.00x on December 31, 2024. The total net leverage ratio covenant applicable to the third quarter of 2024 and earlier is subject to a 0.50x decrease upon divestiture of Rail. The Company's required coverage of consolidated interest charges is set at a minimum of 2.75x through the end of 2024 (subject to an increase to 3.00x upon closing of the divestiture of Rail).

At June 30, 2023, the Company was in compliance with its debt covenants under the Senior Secured Credit Facilities, with a total net debt to Consolidated Adjusted EBITDA ratio of 4.63x and a total interest coverage ratio of 3.01x. The Company believes it will continue to maintain compliance with these covenants based on its current outlook. However, the Company's estimates of compliance with these covenants could change in the future with a continued deterioration in economic conditions, higher than forecasted interest rate increases, the timing of working capital including the collection of receivables or an inability to successfully execute its plans by quarter to realize increased pricing and to implement cost reduction initiatives that substantially mitigate the impacts of inflation and other factors adversely impacting its realized operating margins.
Facility Fees and Debt-Related Income (Expense)
The components of the Condensed Consolidated Statements of Operations caption Facility fees and debt-related income (expense) were as follows:
Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Gain on extinguishment of debt $ —  $ 2,254  $ —  $ 2,254 
Unused debt commitment and amendment fees —  (6) (12) (538)
Securitization and factoring fees (2,730) (99) (5,081) (99)
Facility fees and debt-related income (expense) $ (2,730) $ 2,149  $ (5,093) $ 1,617 

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10.  Employee Benefit Plans
  Three Months Ended
June 30
Defined Benefit Pension Plan Net Periodic Pension Cost (Benefit) U.S. Plans International Plans
(In thousands) 2023 2022 2023 2022
Service costs $ —  $ —  $ 308  $ 417 
Interest costs 2,543  1,429  7,538  4,128 
Expected return on plan assets (1,750) (2,698) (7,784) (9,720)
Recognized prior service costs —  —  115  113 
Recognized actuarial losses 1,150  1,183  3,579  3,313 
Defined benefit pension plan net periodic pension cost (benefit) $ 1,943  $ (86) $ 3,756  $ (1,749)
  Six Months Ended
June 30
Defined Benefit Pension Plans Net Periodic Pension Cost (Benefit) U.S. Plans International Plans
(In thousands) 2023 2022 2023 2022
Service costs $ —  $ —  $ 615  $ 849 
Interest costs 5,086  2,858  14,952  8,522 
Expected return on plan assets (3,500) (5,397) (15,441) (20,104)
Recognized prior service costs —  —  229  233 
Recognized actuarial losses 2,301  2,366  7,098  6,857 
Defined benefit pension plans net periodic pension cost (benefit) $ 3,887  $ (173) $ 7,453  $ (3,643)

Cash contributions to U.S. and international defined benefit pension plans totaled $0.8 million and $15.3 million for the six months ended June 30, 2023, respectively. The Company's estimate of expected cash contributions to be paid during the remainder of 2023 for the U.S. and international defined benefit pension plans is $1.0 million and $8.8 million, respectively.
11.     Income Taxes 

Income tax expense related to continuing operations for the three and six months ended June 30, 2023 was $10.3 million and $17.2 million, respectively. Income tax benefit related to continuing operations for the three and six months ended June 30, 2022 was $3.1 million and $1.9 million, respectively. The change in the income tax expense for the three and six months ended June 30, 2023 compared with the income tax benefit for the three and six months ended June 30, 2022 is the result of improved business performance in the CE segment, the gain on the relocation of an HE site, the increased disallowed interest expense in the U.S. resulting from higher interest expense on the Company's Senior Secured Credit Facilities, a valuation allowance for a deferred tax asset in a certain foreign entity of $3.7 million, as well as the tax benefit on a portion of the CE goodwill impairment in 2022 not recurring in 2023.

The Company has historically calculated its quarterly tax provision based on its best estimate of the full year tax rate applicable to the quarter. For the three and six months ended June 30, 2023, due to the insignificant amount of pre-tax book loss relative to the size of permanent book-tax differences and a varying net income/(loss) pattern projected for the year, the Company’s tax provision estimate was determined using an actual year-to-date method. In the prior year, the estimate was based on the forecasted full year rate.

The reserve for uncertain tax positions on June 30, 2023 was $4.3 million, including interest and penalties.  Within the next twelve months, it is reasonably possible that $1.3 million unrecognized income tax benefits will be recognized upon settlement of tax examinations and the expiration of various statutes of limitations.


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12.   Commitments and Contingencies

Environmental        
The Company is involved in a number of environmental remediation investigations and cleanups and, along with other companies, has been identified as a “potentially responsible party” for certain byproduct disposal sites.  While each of these matters is subject to various uncertainties, it is probable that the Company will agree to make payments toward funding certain of these activities, and it is possible that some of these matters will be decided unfavorably to the Company.  The Company has evaluated its potential liability and its financial exposure is dependent upon such factors as the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the allocation of cost among potentially responsible parties, the years of remedial activity required and the remediation methods selected. 

The Company evaluates its liability for future environmental remediation costs on a quarterly basis. Although actual costs to be incurred at identified sites in future periods may vary from the estimates (given inherent uncertainties in evaluating environmental exposures), the Company does not expect that any costs that are reasonably possible to be incurred by the Company in connection with environmental matters in excess of the amounts accrued would have a material adverse effect on the Company's financial condition, results of operations or cash flows.

The following table summarizes information related to the location and undiscounted amount of the Company's environmental liabilities:

(In thousands) June 30
2023		 December 31
2022
Current portion of environmental liabilities (a)
 $ 7,135  $ 7,120 
Long-term environmental liabilities 26,494  26,880 
Total environmental liabilities $ 33,629  $ 34,000 
(a)    The current portion of environmental liabilities is included in the caption Other current liabilities on the Condensed Consolidated Balance Sheets.

Legal Proceedings

In the ordinary course of business, the Company is a defendant or party to various claims and lawsuits, including those discussed below. Unless stated otherwise below, the Company has not determined a loss to be probable or estimable for these legal proceedings.

On March 28, 2018, the United States Environmental Protection Agency (the “EPA”) conducted an inspection of ESOL’s off-site waste management facility in Detroit, MI. On November 23, 2021, the EPA proposed a civil penalty of $390,092 as part of a proposed Administrative Consent Order for alleged improper air emissions at the site. The allegations in the proposed Administrative Consent Order and civil penalty relate exclusively to the period prior the Company’s purchase of the ESOL business. The Company and EPA have reached an agreement, in principle, to settle the EPA's claim, and a consent order is expected to be finalized during the three months ended September 30, 2023. The agreement, in principle, includes a payment of $270,000 from the Company, which was recorded as a liability during the quarter ended June 30, 2023. It is possible that part of this obligation may be satisfied through a supplemental environmental project agreed upon by the parties. While it is the Company's position that any loss related to this issue will be recoverable under indemnity rights under the ESOL purchase agreement and representations and warranties insurance policies purchased by the Company, there can be no assurance that the Company's position will ultimately prevail.

On January 27, 2020, the EPA issued a Notice of Potential Liability to the Company, along with several other companies, concerning the Newtown Creek Superfund Site located in Kings and Queens Counties in New York. The Notice alleges certain facilities formerly owned or operated by subsidiaries of the Company may have resulted in the discharge of hazardous substances into Newtown Creek or its Dutch Kills tributary. The site has been subject to CERCLA response activities since approximately 2011. The U.S. EPA expects to propose a sitewide cleanup plan no sooner than 2024 and announced in July 2021 that it would defer its decision on a potential early action response for the lower two miles of the Creek until the sitewide studies are completed. The Company is one of approximately twenty (20) Potentially Responsible Parties ("PRPs") that have received notices, though it is believed other PRPs may exist. The Company vigorously contests the allegations of the Notice and currently does not believe that this matter will have a material effect on the Company’s financial position or results from operations.

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On June 25 and 26, 2018, the DTSC conducted a compliance enforcement inspection of ESOL’s facility in Rancho Cordova, California, which was then owned by Stericycle, Inc. On February 14, 2020, the DTSC filed an action in the Superior Court for the State of California, Sacramento Division, alleging violations of California’s Hazardous Waste Control Law and the facility’s hazardous waste permit arising from the inspection. On August 27, 2020, the DTSC issued a Notice of Denial of Hazardous Waste Facility Permit Application, denying the renewal of the facility's hazardous waste permit. The Company has exhausted its legal challenges to the denial of the Hazardous Waste facility permit, and the hazardous waste facility is in the process of closing. The Company continues to utilize the site for non-hazardous waste and is evaluating additional potential alternate uses for the site. The DTSC investigation and compliance issues leading to the compliance tier assignment were ongoing well before the Company's acquisition of the ESOL business, and the Company was aware of the investigation and many of the issues raised in the investigation at the time of the purchase. Accordingly, the Company is indemnified for certain fines and other costs and expenses associated with this matter by Stericycle, Inc. The Company has not accrued any amounts in respect of these alleged violations and cannot estimate the reasonably possible loss or the range of reasonably possible losses that it may incur.

The Company has had ongoing meetings with the SCE over processing salt cakes, a processing byproduct, stored at the Al Hafeerah site. The Company’s Bahrain operations that produced the salt cakes has ceased operations. An Environmental Impact Assessment and Technical Feasibility Study for facilities to process the salt cakes was approved by the SCE during the first quarter of 2018. Commissioning of the facilities was completed during the third quarter of 2021 and the processing of the salt cakes has commenced. The Company's current reserve of $5.7 million at June 30, 2023 continues to represent the Company's best estimate of the ultimate costs to be incurred to resolve this matter. The Company continues to evaluate this reserve and any future change in estimated costs which could be material to the Company’s results of operations in any one period.

On July 27, 2018, Brazil’s Federal and Rio de Janeiro State Public Prosecution Offices (MPF and MPE) filed a Civil Public Action against one of the Company's customers (CSN), the Company’s Brazilian subsidiary, the Municipality of Volta Redonda, Brazil, and the Instituto Estadual do Ambiente (local environmental protection agency) seeking the implementation of various measures to limit and reduce the accumulation of customer-owned slag at the site in Brazil. On August 6, 2018 the 3rd Federal Court in Volta Redonda granted the MPF and MPE an injunction against the same parties requiring, among other things, CSN and the Company’s Brazilian subsidiary to limit the volume of slag sent to the site. Because the customer owns the site and the slag located on the site, the Company believes that complying with this injunction is the steel producer’s responsibility.  On March 18, 2019 the Court issued an order fining the Company 5,000 Brazilian reais per day (or approximately $1 thousand per day) and CSN 20,000 Brazilian reais per day (or approximately $4 thousand per day) until the requirements of the injunction are met. On November 1, 2019 the Court issued an additional order increasing the fines assessed to the Company to 25,000 Brazilian reais per day (or approximately $5 thousand per day) and raising the fines assessed to CSN to 100,000 Brazilian reais per day (or approximately $21 thousand per day). The Court also assessed an additional joint fine of 10,000,000 Brazilian reais (or approximately $2.1 million) against CSN and the Company. The Company is appealing the fines and the underlying injunction.  Both the Company and CSN continue to have discussions with the Prosecution Offices and governmental authorities on the injunction and the possible resolution of the underlying case. Beginning on March 25, 2022, the Courts entered a series of orders suspending the litigation proceedings as well as the accrual of interest and penalties while the parties discuss a possible resolution of the matter. The Company does not believe that a loss relating to this matter is probable or estimable at this point.

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On October 19, 2018, local environmental authorities issued an enforcement action against the Company concerning the Company’s operations at a customer site in Ijmuiden, Netherlands. The enforcement action alleged violations of the Company’s environmental permit at the site, which restricts the release of any visible dust emissions. On January 12, 2022, the Administrative Supreme Court upheld the Company’s challenge of these enforcement actions as they relate to the slag tipping area of the site. As a result, all fines asserted against the Company to date have been invalidated and all fines paid to date have been reimbursed. This order is not appealable. On or about October 14, 2021, the Company received a subpoena and two indictments on this matter before the Amsterdam District Court in the Netherlands. The Amsterdam Public Prosecutor’s Office issued the two indictments against the Company, alleging violations in connection with dust releases and/or events alleged to have occurred in 2018 through May 2020 at the site. The action cites provisions which permit fines for the alleged infractions and seeks €100,000 in fines with a smaller amount held in abeyance. On February 2, 2022, the prosecutor announced that they would further investigate residents’ claims related to this matter. On February 25, 2022, the Amsterdam District Court ruled that the Company was liable for only one alleged violation and that this alleged violation was unintentional. The court issued a fine of €5,000, to be held in abeyance. Both the Company and the Public Prosecutor’s Office have appealed this ruling. The Company is vigorously contesting all allegations against it and is also working with its customer to ensure the control of emissions. The Company has contractual indemnity rights from its customer that it believes will substantially cover any fines or penalties.

On November 5, 2020, a worker suffered a fatal injury at a site owned by the Company’s customer, Gerdau Ameristeel US, Inc., in Midlothian, TX. Although the Company was not directly involved in the accident, the worker was employed by a sub-contractor of a sub-contractor of the Company. The worker’s family filed suit in the 125th Judicial District Court of Harris County, TX against multiple parties, including the Company, seeking monetary damages. On May 11, 2023, the parties completed a formal settlement agreement, settling the claims brought by the worker's family. The Company paid its insurance deductible of $5.0 million and has recorded an indemnification receivable from its customer for the recovery of certain losses based upon the contractual indemnity rights. There can be no assurances that the Company's position will ultimately prevail; however, any financial statement impact is not expected to be material.

On March 22, 2022, the EPA issued a Notice of Intent to File an Administrative Complaint (NOI) alleging violations of the federal Emergency Planning and Community Right-to-Know Act at the Company’s facilities in Tacoma, WA and Kent, WA. The NOI relates exclusively or almost exclusively to the period when Stericycle owned and operated the sites. The NOI proposes a penalty of $3,000,000. The Company is currently reviewing the veracity of the allegations and the corresponding proposed penalty amount and has recorded a liability of $600,000 as its best estimate to resolve this matter. While it is the Company’s position that it has recourse for some or all liabilities, if any, that arise from this matter under the ESOL purchase agreement and representations and warranties insurance policies purchased by the Company, there can be no assurances that the Company’s position will ultimately prevail.

On March 21, 2022, the Company received a draft penalty matrix from the PA DEP concerning alleged reporting, monitoring and related issues at the Company’s Hatfield, PA site prior to the time the Company acquired the site from Stericycle, Inc. The draft penalty matrix proposed a penalty of $1,000,000. On June 29, 2022, the PA DEP issued a draft Consent Assessment of Civil Penalty ("CACP") related to the alleged issues at the site. The Company and PA DEP entered into a CACP on November 9, 2022, settling the PA DEP's claims for $239,500, which was recorded as a liability.

DEA Investigation
Prior to the Company’s acquisition of ESOL, Stericycle, Inc. notified the Company that the DEA had served an administrative subpoena on Stericycle, Inc. and executed a search warrant at a facility in Rancho Cordova, California and an administrative inspection warrant at a facility in Indianapolis, Indiana. The Company has determined that the DEA and the DTSC have launched investigations involving, at least in part, the ESOL business of collecting, transporting, and destroying controlled substances from retail customers that transferred from Stericycle, Inc. to the Company. The Company is cooperating with these inquiries, which relate primarily to the period before the Company owned the ESOL business. Since the acquisition of the ESOL business, the Company has performed a vigorous review of ESOL’s compliance program related to controlled substances and has made material changes to the manner in which controlled substances are transported from retail customers to DEA-registered facilities for destruction. Pursuant to an agreement with Stericyle, the Company has contractual recourse for any material loss the Company has determined is reasonably possible. The Company has not accrued any amounts in respect of these investigations and does not believe a loss is reasonably possible.

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Brazilian Tax Disputes
The Company is involved in a number of tax disputes with federal, state and municipal tax authorities in Brazil. These disputes are at various stages of the legal process, including the administrative review phase and the collection action phase, and include assessments of fixed amounts of principal and penalties, plus interest charges that increase at statutorily determined amounts per month and are assessed on the aggregate amount of the principal and penalties. In addition, the losing party, at the collection action or court of appeals phase, could be subject to a charge to cover statutorily mandated legal fees, which are generally calculated as a percentage of the total assessed amounts due, inclusive of penalty and interest. Many of the claims relate to ICMS, services and social security tax disputes. The largest proportion of the assessed amounts relate to ICMS claims filed by the SPRA, encompassing the period from January 2002 to May 2005.

In October 2009, the Company received notification of the SPRA’s final administrative decision regarding the levying of ICMS in the State of São Paulo in relation to services provided to a customer in the State between January 2004 and May 2005.  As of June 30, 2023 the principal amount of the tax assessment from the SPRA with regard to this case is approximately $1.3 million, with penalty, interest and fees assessed to date increasing such amount by an additional $18.7 million.  On June 4, 2018, the Appellate Court of the State of Sao Paulo ruled in favor of the SPRA but ruled that the assessed penalty should be reduced to approximately $1.3 million. After calculating the interest accrued on the penalty, the Company estimates that this ruling reduces the current overall potential liability for this case to approximately $7.6 million. All such amounts include the effect of foreign currency translation. The Company has appealed the ruling in favor of the SPRA to the Superior Court of Justice. Due to multiple court precedents in the Company’s favor, as well as the Company’s ability to appeal, the Company does not believe a loss is probable.

Another ICMS tax case involving the SPRA refers to the tax period from January 2002 to December 2003. In December 2018, the administrative tribunal hearing the case upheld the Company's liability. The aggregate amount assessed by the tax authorities in August 2005 was $5.2 million (the amounts with regard to this claim are valued as of the date of the assessment since it has not yet reached the collection phase), composed of a principal amount of $1.2 million, with penalty and interest assessed through that date increasing such amount by an additional $4.0 million.  On December 6, 2018, the administrative tribunal reduced the applicable penalties to $0.9 million. After calculating the interest accrued on the current penalty, the Company estimates that the current overall liability for this case to be approximately $5.8 million. All such amounts include the effect of foreign currency translation. The Company has appealed to the judicial phase at the Third Trial Court of the District of Cubatão, State of São Paulo. On October 14, 2022, the District Court issued a decision holding that the Company is not liable for the taxes at issue. The SPRA appealed this decision on December 28, 2022 and this appeal is pending review by the Appellate Court of the State of São Paulo. Due to multiple court precedents in the Company's favor, the Company does not believe a loss is probable.
The Company continues to believe that sufficient coverage for these claims exists as a result of the indemnification obligations of the Company's customer and such customer’s pledge of assets in connection with the October 2009 notice, as required by Brazilian law.
On December 30, 2020, the Company received an assessment from the municipal authority in Ipatinga, Brazil alleging $2.2 million in unpaid service taxes from the period 2015 to 2020. After calculating the interest and penalties accrued, the Company estimates that the current overall potential liability for this case to be approximately $3.7 million. On January 18, 2021, the Company filed a challenge to the assessment. Due to the multiple defenses that are available, the Company does not believe a loss is probable.
The Company intends to continue its practice of vigorously defending itself against these tax claims under various alternatives, including judicial appeal. The Company will continue to evaluate its potential liability with regard to these claims on a quarterly basis; however, it is not possible to predict the ultimate outcome of these tax-related disputes in Brazil. No loss provision has been recorded in the Company's condensed consolidated financial statements for the disputes described above because the loss contingency is not deemed probable, and the Company does not expect that any costs that are reasonably possible to be incurred by the Company in connection with Brazilian tax disputes would have a material adverse effect on the Company's financial condition, results of operations or cash flows.
Other
The Company is named as one of many defendants (approximately 90 or more in most cases) in legal actions in the U.S. alleging personal injury from exposure to airborne asbestos over the past several decades.  In their suits, the plaintiffs have named as defendants, among others, many manufacturers, distributors and installers of numerous types of equipment or products that allegedly contained asbestos.

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The Company believes that the claims against it are without merit. The Company has never been a producer, manufacturer or processor of asbestos fibers. Any asbestos-containing part of a Company product used in the past was purchased from a supplier and the asbestos encapsulated in other materials such that airborne exposure, if it occurred, was not harmful and is not associated with the types of injuries alleged in the pending actions.
At June 30, 2023, there were 17,259 pending asbestos personal injury actions filed against the Company.  Of those actions, 16,602 were filed in the New York Supreme Court (New York County), 115 were filed in other New York State Supreme Court Counties and 542 were filed in courts located in other states.
The complaints in most of those actions generally follow a form that contains a standard damages demand of $20 million or $25 million, regardless of the individual plaintiff’s alleged medical condition, and without identifying any specific Company product.
At June 30, 2023, 16,549 of the actions filed in New York Supreme Court (New York County) were on the Deferred/Inactive Docket created by the court in December 2002 for all pending and future asbestos actions filed by persons who cannot demonstrate that they have a malignant condition or discernible physical impairment. The remaining 53 cases in New York County are pending on the Active or In Extremis Docket created for plaintiffs who can demonstrate a malignant condition or physical impairment.
The Company has liability insurance coverage under various primary and excess policies that the Company believes will be available, if necessary, to substantially cover any liability that might ultimately be incurred in the asbestos actions referred to above. The costs and expenses of the asbestos actions are being paid by the Company's insurers.
In view of the persistence of asbestos litigation in the U.S., the Company expects to continue to receive additional claims in the future. The Company intends to continue its practice of vigorously defending these claims and cases. At June 30, 2023, the Company has obtained dismissal in approximately 28,432 cases by stipulation or summary judgment prior to trial.
It is not possible to predict the ultimate outcome of asbestos-related actions in the U.S. due to the unpredictable nature of this litigation, and no loss provision has been recorded in the Company's condensed consolidated financial statements because a loss contingency is not deemed probable or estimable. Despite this uncertainty, and although results of operations and cash flows for a given period could be adversely affected by asbestos-related actions, the Company does not expect that any costs that are reasonably possible to be incurred by the Company in connection with asbestos litigation would have a material adverse effect on the Company's financial condition, results of operations or cash flows.
The Company is subject to various other claims and legal proceedings covering a wide range of matters that arose in the ordinary course of business. In the opinion of management, all such matters are adequately covered by insurance or by established reserves, and, if not so covered, are without merit or are of such kind, or involve such amounts, as would not have a material adverse effect on the financial position, results of operations or cash flows of the Company.
Insurance reserves are recorded when it is probable that a liability has been incurred for a particular event and the amount of loss associated with the event can be reasonably estimated. Self-insurance reserves have been estimated based primarily upon actuarial calculations and reflect the undiscounted estimated liabilities for ultimate losses, including claims incurred but not reported. Inherent in these estimates are assumptions that are based on the Company's history of claims and losses, a detailed analysis of existing claims with respect to potential value, and current legal and legislative trends. If actual claims differ from those projected by management, changes (either increases or decreases) to insurance reserves may be required and would be recorded through income in the period the change was determined. When a recognized liability has been determined to be covered by third-party insurance, the Company records an insurance claim receivable to reflect the covered liability. Insurance claim receivables are included in Other receivables on the Company's Condensed Consolidated Balance Sheets. See Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for additional information on Accrued insurance and loss reserves.


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13.  Reconciliation of Basic and Diluted Shares
Three Months Ended Six Months Ended
June 30 June 30
(In thousands, except per share amounts) 2023 2022 2023 2022
Income (loss) from continuing operations attributable to Enviri Corporation common stockholders $ (14,208) $ (106,700) $ (23,765) $ (114,033)
Weighted-average shares outstanding:
Weighted-average shares outstanding - basic 79,816  79,509  79,725  79,437 
Dilutive effect of stock-based compensation —  —  —  — 
Weighted-average shares outstanding - diluted 79,816  79,509  79,725  79,437 
Earnings (loss) from continuing operations per common share, attributable to Enviri Corporation common stockholders:
Basic $ (0.18) $ (1.34) $ (0.30) $ (1.44)
Diluted $ (0.18) $ (1.34) $ (0.30) $ (1.44)

The following average outstanding stock-based compensation units were not included in the computation of diluted earnings per share because the effect was either antidilutive or the market conditions for the performance share units were not met:
Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Restricted stock units 1,023  797  1,012  811 
Stock appreciation rights 2,429  2,193  2,451  2,422 
Performance share units 1,411  1,128  1,402  1,177 



14.   Derivative Instruments, Hedging Activities and Fair Value

Derivative Instruments and Hedging Activities
The Company uses derivative instruments, including foreign currency exchange forward contracts and interest rate swaps to manage certain foreign currency and interest rate exposures.  Derivative instruments are viewed as risk management tools by the Company and are not used for trading or speculative purposes. All derivative instruments are recorded on the Company's Condensed Consolidated Balance Sheets at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The Company primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information.  Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs, such as forward rates, interest rates, the Company’s credit risk and counterparties’ credit risks, and which minimize the use of unobservable inputs.  The Company is able to classify fair value balances based on the ability to observe those inputs.  Foreign currency exchange forward contracts and interest rate swaps are based upon pricing models using market-based inputs (Level 2).  Model inputs can be verified and valuation techniques do not involve significant management judgment.
The fair value of outstanding derivative contracts recorded as assets and liabilities on the Company's Condensed Consolidated Balance Sheets was as follows:
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(In thousands) Balance Sheet Location Fair Value of Derivatives Designated as Hedging Instruments Fair Value of Derivatives Not Designated as Hedging Instruments Total Fair Value
June 30, 2023        
Asset derivatives (Level 2):
Foreign currency exchange forward contracts Other current assets $ 34  $ 4,295  $ 4,329 
Interest rate swaps Other current assets 3,110  —  3,110 
Total   $ 3,144  $ 4,295  $ 7,439 
Liability derivatives (Level 2):
Foreign currency exchange forward contracts Other current liabilities $ 753  $ 2,964  $ 3,717 
Interest rate swaps Other liabilities 710  —  710 
Total $ 1,463  $ 2,964  $ 4,427 
December 31, 2022        
Asset derivatives (Level 2):
Foreign currency exchange forward contracts Other current assets $ 1,042  $ 2,154  $ 3,196 
Total   $ 1,042  $ 2,154  $ 3,196 
Liability derivatives (Level 2):
Foreign currency exchange forward contracts Other current liabilities $ 577  $ 4,796  $ 5,373 
Total $ 577  $ 4,796  $ 5,373 

All of the Company's derivatives are recorded on the Condensed Consolidated Balance Sheets at gross amounts and do not offset. All of the Company's interest rate swaps and certain foreign currency exchange forward contracts are transacted under ISDA documentation. Each ISDA master agreement permits the net settlement of amounts owed in the event of default. The Company's derivative assets and liabilities subject to enforceable master netting arrangements, if offset, would have resulted in a net asset of $0.5 million and a net liability of $0.1 million at June 30, 2023 and December 31, 2022, respectively.
The effect of derivative instruments on the Company's Condensed Consolidated Statements of Comprehensive Income (Loss) was as follows:
Derivatives Designated as Hedging Instruments
Amount Recognized in
OCI on Derivatives		 Amount Reclassified from
AOCI into Income - Effective Portion or Equity
Three Months Ended Three Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Foreign currency exchange forward contracts $ (438) $ 957  $ 866  $ (998)
Interest rate swaps 6,152  —  (617) 1,061 
  $ 5,714  $ 957  $ 249  $ 63 
Amount Recognized in
OCI on Derivatives		 Amount Reclassified from
AOCI into Income - Effective Portion or Equity
Six Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Foreign currency exchange forward contracts $ (1,121) $ 1,966  $ 1,277  $ (1,586)
Interest rate swaps 3,265  —  (865) 2,111 
  $ 2,144  $ 1,966  $ 412  $ 525 
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The location and amount of gain (loss) recognized on the Company's Condensed Consolidated Statements of Operations was as follows:
Three Months Ended
June 30
2023 2022
(In thousands) Interest Expense Income (Loss) from Discontinued Businesses Interest Expense Income (Loss) from Discontinued Businesses
Total amounts in the Condensed Consolidated Statement of Operations in which the effects of derivatives designated as hedging instruments are recorded $ (25,724) $ 7,556  $ (16,692) $ 1,879 
Interest rate swaps:
Gain or (loss) reclassified from AOCI into income 617  —  (1,061) — 
Amount recognized in earnings due to ineffectiveness —  —  720  — 
Foreign exchange contracts:
Gain or (loss) reclassified from AOCI into income —  (866) —  998 

Six Months Ended
June 30
2023 2022
(In thousands) Interest Expense Income (Loss) from Discontinued Businesses Interest Expense Income (Loss) from Discontinued Businesses
Total amounts in the Condensed Consolidated Statement of Operations in which the effects of derivatives designated as hedging instruments are recorded $ (50,052) $ 8,175  $ (31,784) $ (37,218)
Interest rate swaps:
Gain or (loss) reclassified from AOCI into income 865  —  (2,111) — 
Amount recognized in earnings due to ineffectiveness —  —  1,611  — 
Foreign exchange contracts:
Gain or (loss) reclassified from AOCI into income —  (1,277) —  1,586 

Derivatives Not Designated as Hedging Instruments
  Location of Gain (Loss) Recognized in Income on Derivatives
Amount of Gain (Loss) Recognized in Income on Derivatives (a)
Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Foreign currency exchange forward contracts Cost of services and products sold $ 4,862  $ 18,234  $ 1,565  $ 22,072 
(a)      These gains (losses) offset amounts recognized in cost of services and products sold principally as a result of intercompany or third party foreign currency exposures.

Foreign Currency Exchange Forward Contracts
The Company conducts business in multiple currencies and, accordingly, is subject to the inherent risks associated with foreign exchange rate movements.  Foreign currency-denominated assets and liabilities are translated into U.S. dollars at the exchange rates existing at the respective consolidated balance sheet dates, and income and expense items are translated at the average exchange rates during the respective periods. 

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The Company uses derivative instruments to hedge cash flows related to foreign currency fluctuations.  Foreign currency exchange forward contracts outstanding are part of a worldwide program to minimize foreign currency exchange operating income and balance sheet exposure by offsetting foreign currency exposures of certain future payments between the Company and various subsidiaries, suppliers or customers.  The unsecured contracts are with major financial institutions. The Company may be exposed to credit loss in the event of non-performance by the contract counterparties. The Company evaluates the creditworthiness of the counterparties and does not expect default by them.  Foreign currency exchange forward contracts are used to hedge commitments, such as foreign currency debt, firm purchase commitments and foreign currency cash flows for certain export sales transactions.
Changes in the fair value of derivatives used to hedge foreign currency denominated balance sheet items are reported directly in earnings, along with offsetting transaction gains and losses on the items being hedged. Derivatives used to hedge forecasted cash flows associated with foreign currency commitments may be accounted for as cash flow hedges, as deemed appropriate, if the criteria for hedge accounting are met.  Gains and losses on derivatives designated as cash flow hedges are deferred in AOCI, a separate component of equity, and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. The ineffective portion of all hedges, if any, is recognized currently in earnings.
The recognized gains and losses offset amounts recognized in cost of services and products sold principally as a result of intercompany or third-party foreign currency exposures. At June 30, 2023 and December 31, 2022, the notional amounts of foreign currency exchange forward contracts were $588.6 million and $573.8 million, respectively. These contracts are primarily denominated in British Pound Sterling and Euros and mature through 2025.
In addition to foreign currency exchange forward contracts, the Company designates certain loans as hedges of net investments in international subsidiaries. The Company recorded pre-tax net gains of $1.1 million and $1.5 million for the three months and six months ended ended June 30, 2023 and pre-tax net losses of $0.6 million and $1.2 million for the three months and six months ended ended June 30, 2022, respectively, in AOCI.

Interest Rate Swaps
The Company uses interest rate swaps in conjunction with certain variable rate debt issuances in order to secure a fixed interest rate. Changes in the fair value attributed to the effect of the swaps’ interest spread and changes in the credit worthiness of the counter-parties are recorded in AOCI and are reclassified into income as interest payments are made.

The Company had a series of interest rate swaps that matured in 2022 and had the effect of converting $200.0 million of the Term Loan Facility from floating-rate to fixed-rate. The fixed rates provided by the swaps replaced the adjusted LIBOR rate in the interest calculation to 3.12% for 2022.

In the first quarter of 2023, the Company entered into a new series of interest rate swaps with a scheduled maturity of December 2025. The swaps have the effect of converting $300.0 million of the New Term Loan from a floating interest rate to a fixed interest rate and are classified as cash flow hedges. The fixed rates provided by these swaps, ranging from 4.17% to 4.21%, replace the adjusted SOFR rate in the interest calculation.

Fair Value of Other Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term borrowings approximate fair value due to the short-term maturities of these assets and liabilities. At June 30, 2023 and December 31, 2022, the total fair value of long-term debt and current maturities (excluding deferred financing costs) was $1,337.2 million and $1,227.6 million, respectively, compared with a carrying value of $1,410.3 million and $1,364.2 million, respectively.  Fair values for debt are based on pricing models using market-based inputs (Level 2) for similar issues or on the current rates offered to the Company for debt of the same remaining maturities.


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15. Review of Operations by Segment 
  Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Revenues From Continuing Operations    
Harsco Environmental $ 289,593  $ 277,599  $ 562,782  $ 539,650 
Clean Earth 230,575  203,453  453,039  394,199 
Total Revenues From Continuing Operations $ 520,168  $ 481,052  $ 1,015,821  $ 933,849 
Operating Income (Loss) From Continuing Operations
Harsco Environmental $ 12,733  $ 23,547  $ 35,018  $ 41,814 
Clean Earth 23,034  (111,668) 39,505  (112,965)
Corporate (11,452) (8,882) (21,203) (18,104)
Total Operating Income (Loss) From Continuing Operations $ 24,315  $ (97,003) $ 53,320  $ (89,255)
Depreciation
Harsco Environmental $ 28,354  $ 27,467  $ 55,914  $ 55,539 
Clean Earth 5,547  4,536  10,474  9,637 
Corporate 556  460  1,108  891 
Total Depreciation $ 34,457  $ 32,463  $ 67,496  $ 66,067 
Amortization
Harsco Environmental $ 1,008  $ 1,714  $ 2,007  $ 3,542 
Clean Earth 6,113  6,131  12,142  12,206 
Corporate (a)
 946  636  1,883  1,319 
Total Amortization $ 8,067  $ 8,481  $ 16,032  $ 17,067 
Capital Expenditures
Harsco Environmental $ 38,540  $ 23,585  $ 55,091  $ 48,375 
Clean Earth 4,974  3,550  9,804  10,246 
Corporate 110  1,172  210  2,138 
Total Capital Expenditures $ 43,624  $ 28,307  $ 65,105  $ 60,759 
(a) Amortization expense on Corporate relates to the amortization of deferred financing costs.

Reconciliation of Segment Operating Income to Income (Loss) From Continuing Operations Before Income Taxes and Equity Income
  Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Segment operating income (loss) $ 35,767  $ (88,121) $ 74,523  $ (71,151)
General Corporate expense (11,452) (8,882) (21,203) (18,104)
Operating income (loss) from continuing operations 24,315  (97,003) 53,320  (89,255)
Interest income 1,567  693  3,022  1,337 
Interest expense (25,724) (16,692) (50,052) (31,784)
Facility fees and debt-related income (expense) (2,730) 2,149  (5,093) 1,617 
Defined benefit pension income (5,407) 2,247  (10,742) 4,657 
Income (loss) from continuing operations before income taxes and equity income $ (7,979) $ (108,606) $ (9,545) $ (113,428)


16. Revenues

The Company recognizes revenues to depict the transfer of promised services and products to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services and products. Revenues from continuing operations include service revenues from HE and CE and product revenues from HE. Revenue from the Rail business is included in Income (loss) from discontinued businesses.

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A summary of the Company's revenues by primary geographical markets as well as by key product and service groups is as follows:
Three Months Ended
June 30, 2023
(In thousands) Harsco Environmental Segment
Clean Earth
Segment		 Consolidated Totals
Primary Geographical Markets (a):
North America $ 81,616  $ 230,575  $ 312,191 
Western Europe 107,318  —  107,318 
Latin America (b)
 42,180  —  42,180 
Asia-Pacific 32,339  —  32,339 
Middle East and Africa 21,117  —  21,117 
Eastern Europe 5,023  —  5,023 
Total Revenues $ 289,593  $ 230,575  $ 520,168 
Key Product and Service Groups:
Environmental services related to resource recovery for metals manufacturing and related logistical services $ 242,638  $ —  $ 242,638 
Ecoproducts 40,504  —  40,504 
Environmental systems for aluminum dross and scrap processing 6,451  —  6,451 
Hazardous waste processing solutions —  197,506  197,506 
Soil and dredged materials processing and reuse solutions —  33,069  33,069 
Total Revenues $ 289,593  $ 230,575  $ 520,168 

Three Months Ended
June 30, 2022
(In thousands) Harsco Environmental Segment Clean Earth
Segment		 Consolidated Totals
Primary Geographical Markets (a):
North America $ 80,709  $ 203,453  $ 284,162 
Western Europe 99,591  —  99,591 
Latin America (b)
 39,202  —  39,202 
Asia-Pacific 31,950  —  31,950 
Middle East and Africa 20,762  —  20,762 
Eastern Europe 5,385  —  5,385 
Total Revenues $ 277,599  $ 203,453  $ 481,052 
Key Product and Service Groups:
Environmental services related to resource recovery for metals manufacturing and related logistical services $ 236,165  $ —  $ 236,165 
Ecoproducts 38,083  —  38,083 
Environmental systems for aluminum dross and scrap processing 3,351  —  3,351 
Hazardous waste processing solutions —  170,817  170,817 
Soil and dredged materials processing and reuse solutions —  32,636  32,636 
Total Revenues $ 277,599  $ 203,453  $ 481,052 
Six Months Ended
June 30, 2023
(In thousands) Harsco Environmental Segment Clean Earth
Segment		 Consolidated Totals
Primary Geographical Markets (a):
North America $ 160,089  $ 453,039  $ 613,128 
Western Europe 208,704  —  208,704 
Latin America (b)
 83,135  —  83,135 
Asia-Pacific 61,300  —  61,300 
Middle East and Africa 39,522  —  39,522 
Eastern Europe 10,032  —  10,032 
Total Revenues $ 562,782  $ 453,039  $ 1,015,821 
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Six Months Ended
June 30, 2023
(In thousands) Harsco Environmental Segment Clean Earth
Segment		 Consolidated Totals
Key Product and Service Groups:
Environmental services related to resource recovery for metals manufacturing and related logistical services $ 471,999  $ —  $ 471,999 
Ecoproducts 78,906  —  78,906 
Environmental systems for aluminum dross and scrap processing 11,877  —  11,877 
Hazardous waste processing solutions —  383,618  383,618 
Soil and dredged materials processing and reuse solutions —  69,421  69,421 
Total Revenues $ 562,782  $ 453,039  $ 1,015,821 
Six Months Ended
June 30, 2022
(In thousands) Harsco Environmental Segment
Clean Earth
Segment		 Consolidated Totals
Primary Geographical Markets (a):
North America $ 151,788  $ 394,199  $ 545,987 
Western Europe 201,670  —  201,670 
Latin America (b)
 75,007  —  75,007 
Asia-Pacific 60,018  —  60,018 
Middle East and Africa 40,648  —  40,648 
Eastern Europe 10,519  —  10,519 
Total Revenues $ 539,650  $ 394,199  $ 933,849 
Key Product and Service Groups:
Environmental services related to resource recovery for metals manufacturing and related logistical services $ 463,854  $ —  $ 463,854 
Ecoproducts 70,048  —  70,048 
Environmental systems for aluminum dross and scrap processing 5,748  —  5,748 
Hazardous waste processing solutions —  329,824  329,824 
Soil and dredged materials processing and reuse solutions —  64,375  64,375 
Total Revenues $ 539,650  $ 394,199  $ 933,849 
(a)     Revenues are attributed to individual countries based on the location of the facility generating the revenue.
(b)     Includes Mexico.

The Company may receive payments in advance of earning revenue (advances on contracts), which are included in Other current liabilities and Other liabilities on the Condensed Consolidated Balance Sheets. The Company may recognize revenue in advance of being able to contractually invoice the customer (contract assets), which is included in Other current assets and Other assets on the Condensed Consolidated Balance Sheets. Contract assets are transferred to Trade accounts receivable, net, when the right to payment becomes unconditional. Contract assets and advances on contracts are reported as a net position, on a contract-by-contract basis, at the end of each reporting period.

The Company had contract assets totaling $5.3 million at both June 30, 2023 and December 31, 2022. The Company had advances on contracts totaling $5.2 million and $6.8 million at June 30, 2023 and December 31, 2022, respectively. During the three and six months ended June 30, 2023, the Company recognized $2.2 million and $5.5 million, respectively, of revenue related to amounts previously included in advances on contracts. During the three and six months ended June 30, 2022, the Company recognized $7.7 million and $10.5 million, respectively, of revenue related to amounts previously included in advances on contracts.

At June 30, 2023, HE had remaining, fixed, unsatisfied performance obligations where the expected contract duration exceeds one year totaling $66.6 million. Of this amount, $20.8 million is expected to be fulfilled by June 30, 2024, $20.6 million by June 30, 2025, $12.4 million by June 30, 2026, $6.2 million by June 30, 2027 and the remainder thereafter. These amounts exclude any variable fees, fixed fees subject to indexation and any performance obligations expected to be satisfied within one year.
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17.   Other (Income) Expenses, Net

The major components of this Condensed Consolidated Statements of Operations caption were as follows:
  Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Employee termination benefit costs $ 120  $ 605  $ 654  $ 297 
Other costs (income) for exit activities (a)
 (2,353) 477  (8,560) 1,058 
Impaired asset write-downs —  296  —  355 
Net gains —  (92) (230) (1,904)
Other 10  759  (238) 1,060 
Other (income) expenses, net $ (2,223) $ 2,045  $ (8,374) $ 866 
(a) Includes a $3.0 million and $9.8 million net gain recognized related to a lease modification during the three and six months ended June 30, 2023, respectively, that resulted in lease incentive for the Company to relocate an HE site prior to the end of the expected lease term.

18. Components of Accumulated Other Comprehensive Loss
AOCI is included on the Condensed Consolidated Statements of Stockholders' Equity. The components of AOCI, net of the effect of income taxes, and activity for the six months ended June 30, 2022 and 2023 were as follows:
Components of AOCI, Net of Tax
(In thousands) Cumulative Foreign Exchange Translation Adjustments Effective Portion of Derivatives Designated as Hedging Instruments Cumulative Unrecognized Actuarial Losses on Pension Obligations Unrealized Gain (Loss) on Marketable Securities Total
Balance at December 31, 2021
 $ (134,889) $ (3,024) $ (422,248) $ 22  $ (560,139)
OCI before reclassifications (61,493) (a) 1,692  (b) 33,697  (a) (13) (26,117)
Amounts reclassified from AOCI, net of tax —  168  8,831  —  8,999 
Total OCI (61,493) 1,860  42,528  (13) (17,118)
Less: OCI attributable to noncontrolling interests 3,385  —  —  —  3,385 
OCI attributable to Enviri Corporation (58,108) 1,860  42,528  (13) (13,733)
Balance at June 30, 2022
 $ (192,997) $ (1,164) $ (379,720) $ 9  $ (573,872)

Components of AOCI, Net of Tax
(In thousands) Cumulative Foreign Exchange Translation Adjustments Effective Portion of Derivatives Designated as Hedging Instruments Cumulative Unrecognized Actuarial Losses on Pension Obligations Unrealized Gain (Loss) on Marketable Securities Total
Balance at December 31, 2022 $ (213,104) $ 157  $ (354,699) $ 10  $ (567,636)
OCI before reclassifications 23,035  (a) 1,554  (b) (12,405) (a) 6  12,190 
Amounts reclassified from AOCI, net of tax —  320  9,043  —  9,363 
Total OCI 23,035  1,874  (3,362) 6  21,553 
Less: OCI attributable to noncontrolling interests 1,477  —  —  —  1,477 
OCI attributable to Enviri Corporation 24,512  1,874  (3,362) 6  23,030 
Balance at June 30, 2023 $ (188,592) $ 2,031  $ (358,061) $ 16  $ (544,606)
(a)    Principally foreign currency fluctuation.
(b)     Net change from periodic revaluations.


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Amounts reclassified from AOCI were as follows:
(In thousands) Three Months Ended Six Months Ended Location on the Condensed Consolidated Statements of Operations
June 30 June 30
2023 2022 2023 2022
Amortization of cash flow hedging instruments:
Foreign currency exchange forward contracts $ 866  $ (998) $ 1,277  $ (1,586) Income (loss) from discontinued businesses
Interest rate swaps (617) 1,061  (865) 2,111  Interest expense
Total before taxes 249  63  412  525 
Income taxes (53) (233) (92) (357)
Total reclassification of cash flow hedging instruments, net of tax $ 196  $ (170) $ 320  $ 168 
Amortization of defined benefit pension items (c):
Actuarial losses $ 4,729  $ 4,496  $ 9,399  $ 9,223  Defined benefit pension income (expense)
Prior service costs 115  113  229  233  Defined benefit pension income (expense)
Total before taxes 4,844  4,609  9,628  9,456 
Income taxes (293) (312) (585) (625)
Total reclassification of defined benefit pension items, net of tax $ 4,551  $ 4,297  $ 9,043  $ 8,831 
(c)    These AOCI components are included in the computation of net periodic pension costs. See Note 10, Employee Benefit Plans, for additional details.



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ITEM 2.                 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements as well as the audited consolidated financial statements of the Company, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 which includes additional information about the Company’s critical accounting policies, contractual obligations, practices and the transactions that support the financial results, and provides a more comprehensive summary of the Company’s outlook, trends and strategies for 2023 and beyond.
Certain amounts included in Item 2 of this Quarterly Report on Form 10-Q are rounded in millions and all percentages are calculated based on actual amounts.  As a result, minor differences may exist due to rounding.
Forward-Looking Statements
The nature of the Company's business, together with the number of countries in which it operates, subject it to changing economic, competitive, regulatory and technological conditions, risks and uncertainties. In accordance with the "safe harbor" provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, the Company provides the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the results contemplated by forward-looking statements, including the expectations and assumptions expressed or implied herein. Forward-looking statements contained herein could include, among other things, statements about management's confidence in and strategies for performance; expectations for new and existing products, technologies and opportunities and expectations regarding growth, sales, cash flows, and earnings. Forward-looking statements can be identified by the use of such terms as "may," "could," "expect," "anticipate," "intend," "believe," "likely," "estimate," "outlook," "plan" or other comparable terms.
Factors that could cause actual results to differ, perhaps materially, from those implied by forward-looking statements include, but are not limited to: (1) changes in the worldwide business environment in which the Company operates, including changes in general economic conditions or health conditions; (2) changes in currency exchange rates, interest rates, commodity and fuel costs and capital costs; (3) changes in the performance of equity and bond markets that could affect, among other things, the valuation of the assets in the Company's pension plans and the accounting for pension assets, liabilities and expenses; (4) changes in governmental laws and regulations, including environmental, occupational health and safety, tax and import tariff standards and amounts; (5) market and competitive changes, including pricing pressures, market demand and acceptance for new products, services and technologies; (6) the Company's inability or failure to protect its intellectual property rights from infringement in one or more of the many countries in which the Company operates; (7) failure to effectively prevent, detect or recover from breaches in the Company's cybersecurity infrastructure; (8) unforeseen business disruptions in one or more of the many countries in which the Company operates due to political instability, civil disobedience, armed hostilities, public health issues or other calamities; (9) disruptions associated with labor disputes and increased operating costs associated with union organization; (10) the seasonal nature of the Company's business; (11) the Company's ability to successfully enter into new contracts and complete new acquisitions or strategic ventures in the time-frame contemplated, or at all; (12) the Company's ability to negotiate, complete, and integrate strategic transactions; (13) failure to complete a process for the divestiture of the Rail segment, on satisfactory terms, or at all; (14) potential severe volatility in the capital or commodity markets; (15) failure to retain key management and employees; (16) the outcome of any disputes with customers, contractors and subcontractors; (17) the financial condition of the Company's customers, including the ability of customers (especially those that may be highly leveraged, have inadequate liquidity) to maintain their credit availability; (18) implementation of environmental remediation matters; (19) risk and uncertainty associated with intangible assets; (20) the risk that the Company may be unable to implement fully and successfully the expected incremental actions at the Clean Earth Segment due to market conditions or otherwise and may fail to deliver the expected resulting benefits; and (21) other risk factors listed from time to time in the Company's SEC reports. A further discussion of these, along with other potential risk factors, can be found in Part II, Item 1A, "Risk Factors," below, as well as in Part I, Item 1A, "Risk Factors," of the Company's Annual Report on Form 10-K for the year ended December 31, 2022. The Company cautions that these factors may not be exhaustive and that many of these factors are beyond the Company's ability to control or predict. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The Company undertakes no duty to update forward-looking statements except as may be required by law.
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Executive Overview

The Company is a market-leading, global provider of environmental solutions for industrial, retail and medical waste streams. The Company's operations consist of two reportable segments: Harsco Environmental and Clean Earth. HE operates primarily under long-term contracts, providing critical environmental services and material processing to the global steel and metals industries, including zero waste solutions for manufacturing byproducts within the metals industry. CE provides specialty waste processing, treatment, recycling and beneficial reuse solutions for customers in the industrial, retail, healthcare and construction industries across a variety of waste needs, including hazardous, non-hazardous and contaminated soils and dredged materials. The Company has locations in approximately 30 countries, including the U.S. The Company was incorporated in 1956.

On June 5, 2023, the Company's corporate name was changed from Harsco Corporation to Enviri Corporation. The new name and brand identity reflect the Company’s transformation over the past four years into a single-thesis environmental solutions company that provides services to manage, recycle and beneficially reuse waste and byproduct materials across many industries.

The Company maintains a positive long-term outlook across its businesses supported by favorable underlying growth characteristics in its businesses and investments by the Company to further supplement growth. The Company's view for the remainder of 2023 and beyond is supported by the below factors, which should be considered in the context of other risks, trends and strategies in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

•HE: 2023 operating results are expected to be modestly above 2022 results as positive impacts from higher service pricing, net of inflation, cost and operational improvement initiatives and higher environmental services and products demand at certain sites, including those linked to growth investments, are expected to be offset by the impacts of foreign exchange translation and lower commodity prices related to certain service contracts. The global steel market has experienced a period of volatility in recent quarters due to the Russia-Ukraine conflict and the resulting energy crisis in Europe, as well as inventory management through the steel industry supply-chain and a change to the economic conditions due to rising interest rates. Underlying business conditions appear to have stabilized in early 2023 and these external factors are not anticipated to have a material impact on performance in 2023. Over the longer-term, the Company expects HE to grow as a result of economic growth that supports higher global steel consumption, as well as investments and innovation that support the environmental solutions needs of customers.

•CE: 2023 operating results are anticipated to improve meaningfully compared to 2022, as a result of higher services pricing, net of inflation, cost and operational improvements and a modest increase in environmental services demand across certain end-markets. These benefits include pricing and operating cost initiatives implemented during 2022, along with additional improvements initiated in 2023. Longer-term, the Company expects this segment to benefit from positive underlying market trends, supported by increased environmental regulation, further growth opportunities, lower capital requirements and its attractive asset position, as well as from the less cyclical and recurring nature of this business.
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Results of Operations

Segment Results
Three Months Ended Six Months Ended
June 30 June 30
(In millions, except percentages) 2023 2022 2023 2022
Revenues:
Harsco Environmental $ 289.6  $ 277.6  $ 562.8  $ 539.7 
Clean Earth 230.6  203.5  453.0  394.2 
Total Revenues $ 520.2  $ 481.1  $ 1,015.8  $ 933.8 
Operating income (loss):
Harsco Environmental $ 12.7  $ 23.5  $ 35.0  $ 41.8 
Clean Earth 23.0  (111.7) 39.5  (113.0)
     Corporate (11.5) (8.9) (21.2) (18.1)
Total operating income (loss) $ 24.3  $ (97.0) $ 53.3  $ (89.3)
Operating margin:
Harsco Environmental 4.4  % 8.5  % 6.2  % 7.7  %
Clean Earth 10.0  % (54.9) % 8.7  % (28.7) %
Consolidated operating margin 4.7  % (20.2) % 5.2  % (9.6) %

Harsco Environmental Segment:
Significant Effects on Revenues (In millions)
 Three Months Ended Six Months Ended
Revenues — June 30, 2022
 $ 277.6  $ 539.7 
Net effects of price/volume changes, primarily attributable to volume changes and service mix 14.1  37.6 
Impact of foreign currency translation (4.2) (17.2)
Net impact of new and lost contracts 2.0  2.6 
Other 0.1  0.1 
Revenues — June 30, 2023
 $ 289.6  $ 562.8 
The following factors contributed to the changes in operating income during the three and six months ended June 30, 2023.

Factors Positively Affecting Operating Income:
•A net gain of $3.0 million and $9.8 million was recognized during the three and six months ended June 30, 2023, respectively, related to a lease modification that resulted in a lease incentive for a site relocation in the U.S.
•Operating income was moderately impacted by increased revenue under environmental services contracts due, in part, to higher overall service levels at certain sites for the three and six months ended June 30, 2023, partially offset by lower commodity prices related to certain service contracts.
•Higher core service revenues from the Altek Group also positively impacted operating income by $1.9 million and $4.1 million during the three and six months ended June 30, 2023, respectively.

Factors Negatively Impacting Operating Income:
•An impairment charge of $14.1 million was recorded during the three months ended June 30, 2023 related to abandoned equipment at an HE site in China.
•The impact of cost increases related to raw materials, labor, maintenance, and freight due to inflation at various sites for the three months and six months ended June 30, 2023.
•Foreign currency translation reduced operating income by $1.2 million and $2.2 million during the three and six months ended June 30, 2023, respectively.

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Clean Earth Segment:

Significant Effects on Revenues (In millions) Three Months Ended Six Months Ended
Revenues — June 30, 2022
 $ 203.5  $ 394.2 
Net effects of price/volume changes, principally price 21.1  52.8 
Impact of pricing settlement 6.0  6.0 
Revenues — June 30, 2023
 $ 230.6  $ 453.0 

The following factors contributed to the changes in operating income (loss) during the three and six months ended June 30, 2023.

Factors Positively Affecting Operating Income:
•Favorable changes in pricing and mix in the hazardous waste business, in addition to operational cost reduction initiatives, partially offset by the impact of cost inflation on labor and disposal costs, of $21.6 million and $38.8 million during the three months and six months ended June 30, 2023, respectively.
•Operating income was positively impacted by $6.0 million during the three months and six months ended June 30, 2023 due to the settlement of a pricing dispute over services performed in prior periods in the hazardous waste business.
•Favorable changes in pricing and mix in the soil and dredged materials business, partially offset by cost increases, primarily in labor and disposal, of $2.7 million and $4.5 million during the three and six months ended June 30, 2023, respectively.
•A goodwill impairment charge of $104.6 million was recorded during the three months ended June 30, 2022.

Factors Negatively Impacting Operating Income:
•Higher selling, general and administrative expenses ("SG&A") of $4.4 million and $6.2 million during the three and six months ended June 30, 2023, respectively, primarily related to higher incentive compensation expense and professional fees.

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Consolidated Results
June 30
  Three Months Ended Six Months Ended
(In millions, except per share amounts and percentages) 2023 2022 2023 2022
Revenues $ 520.2  $ 481.1  $ 1,015.8  $ 933.8 
Cost of sales 406.6  403.2  807.3  780.2 
Selling, general and administrative expenses 76.9  67.9  148.8  137.1 
Research and development expenses 0.5  0.3  0.7  0.4 
Goodwill impairment charge —  104.6  —  104.6 
Property, plant and equipment impairment charge 14.1  —  14.1  — 
Other (income) expenses, net (2.2) 2.0  (8.4) 0.9 
Operating income (loss) from continuing operations 24.3  (97.0) 53.3  (89.3)
Interest income 1.6  0.7  3.0  1.3 
Interest expense (25.7) (16.7) (50.1) (31.8)
Facility fees and debt-related income (expense) (2.7) 2.1  (5.1) 1.6 
Defined benefit pension income (expense) (5.4) 2.2  (10.7) 4.7 
Income (loss) from continuing operations before income taxes and equity income (8.0) (108.6) (9.5) (113.4)
Income tax benefit (expense) from continuing operations (10.3) 3.1  (17.2) 1.9 
Equity income (loss) of unconsolidated entities, net (0.3) (0.1) (0.4) (0.2)
Income (loss) from continuing operations (18.6) (105.6) (27.2) (111.8)
Income (loss) from discontinued businesses 7.6  1.9  8.2  (37.2)
Income tax benefit (expense) related to discontinued operations (4.8) (0.8) (5.4) 5.8 
Income (loss) from discontinued operations, net of tax 2.8  1.1  2.8  (31.4)
Net income (loss) (15.8) (104.5) (24.4) (143.2)
Total other comprehensive income (loss) 14.4  (29.1) 21.6  (17.1)
Total comprehensive income (loss) (1.4) (133.6) (2.9) (160.3)
Diluted earnings (loss) per common share from continuing operations attributable to Enviri Corporation common stockholders $ (0.18) $ (1.34) $ (0.30) $ (1.44)
Effective income tax rate for continuing operations (129.3) % 2.9  % (180.6) % 1.7  %

Comparative Analysis of Consolidated Results

Revenues
Revenues for the three months ended June 30, 2023 increased by $39.1 million, or 8.1%, from the three months ended June 30, 2022. Revenues for the six months ended June 30, 2023 increased by $82.0 million, or 8.8%, from the six months ended June 30, 2022. Foreign currency translation decreased revenues by $4.2 million and $17.2 million for the three and six months ended June 30, 2023, compared with the same period in the prior year. Refer to the discussion of segment results above for information pertaining to factors positively affecting and negatively impacting revenues.

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Cost of Sales
Cost of sales for the three months ended June 30, 2023 increased $3.4 million, or 0.8%, from the three months ended June 30, 2022. Costs of sales for the six months ended June 30, 2023 increased $27.1 million, or 3.5%, from the six months ended June 30, 2022. The changes in cost of sales were attributable to the following significant items:
Three Months Six Months
(In millions) Ended Ended
Change in costs due to changes in revenues volume $ 12.4  $ 38.8 
Changes in costs due to change in prices, including materials, labor, fuel, transportation and maintenance (2.0) 9.1 
Impact of foreign currency translation (3.2) (14.3)
Other (3.8) (6.5)
Total change in cost of services and products sold — 2023 vs. 2022
 $ 3.4  $ 27.1 

Selling, General and Administrative Expenses
SG&A for the three months ended June 30, 2023 increased $8.9 million, or 13.1%, from the three months ended June 30, 2022. SG&A for the six months ended June 30, 2023 increased $11.7 million, or 8.5%, from the six months ended June 30, 2022. The increase in the three months and six months ended June 30, 2023 is due principally to higher compensation costs of $6.6 million and $10.3 million, respectively, mainly from incentive compensation costs primarily contributed by the Company's Corporate and CE segments.

Goodwill Impairment Charge
In the second quarter of 2022, the Company recorded a goodwill impairment charge of $104.6 million in the CE segment. See Note 8, Goodwill and Other Intangible Assets, in Part I, Item 1, Financial Statements for further discussion regarding the goodwill impairment charge.

Property, Plant and Equipment Impairment Charge
During the three months ended June 30, 2023, the Company recorded an impairment charge of $14.1 million in the HE segment. See Note 6, Property, Plant and Equipment in Part I, Financial Statements for further discussion regarding the impairment.

Other (Income) Expenses, Net
The major components of this Condensed Consolidated Statements of Operations caption are as follows:
  Three Months Ended Six Months Ended
June 30 June 30
(In thousands) 2023 2022 2023 2022
Employee termination benefit costs $ 120  $ 605  $ 654  $ 297 
Other (income) costs for exit activities (a)
 (2,353) 477  (8,560) 1,058 
Impaired asset write-downs —  296  —  355 
Net gains —  (92) (230) (1,904)
Other 10  759  (238) 1,060 
Other (income) expenses, net $ (2,223) $ 2,045  $ (8,374) $ 866 
(a) Includes $3.0 million and $9.8 million net gain related to a lease modification that resulted in a lease incentive to the Company during the three and six months ended June 30, 2023, respectively, as discussed above in the HE Segment results.

Interest Expense
Interest expense during the three months ended June 30, 2023 increased $9.0 million, compared with the three months ended June 30, 2022. Interest expense during the six months ended June 30, 2023 increased by $18.3 million, compared with the six months ended June 30, 2022. The increase during the three and six months ended June 30, 2023 primarily relates to higher weighted average interest rates charged on the Company's Senior Secured Credit Facilities.
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Facility Fees and Debt-Related Income (Expense)
During the three and six months ended June 30, 2023, the Company recognized expense of $2.7 million and $5.1 million, respectively, which included fees primarily related to the Company's AR Facility. See Note 9, Debt and Credit Agreements, in Part I, Item 1, Financial Statements.

During the three and six months ended June 30, 2022, the Company recognized income of $2.1 million and $1.6 million, respectively, which included a $2.3 million gain on the repurchase of $25.0 million in Senior Notes recognized during the quarter ended June 30, 2022, partially offset by fees and other costs related to amending the Company's Senior Secured Credit Facilities, in addition to AR Facility fees.

Defined Benefit Pension Income (Expense)
Defined benefit pension expense for the three and six months ended June 30, 2023 was $5.4 million and $10.7 million, respectively, compared with defined benefit pension income of $2.2 million and $4.7 million for the three and six months ended June 30, 2022, respectively. This change is primarily related to the impact of higher discount rates applied to the Company's 2023 plan obligations and a lower return on plan assets in the current year due to lower plan asset values at December 31, 2022.

Income Tax Expense
Income tax expense from continuing operations for the three and six months ended June 30, 2023 was $10.3 million and $17.2 million, respectively. Income tax benefit from continuing operations for the three and six months ended June 30, 2022 was $3.1 million and $1.9 million, respectively. The change in the income tax expense for the three and six months ended June 30, 2023 compared with the income tax benefit for the three and six months ended June 30, 2022 is the result of improved business performance in CE, the gain on the relocation of an HE site, the increased disallowed interest expense in the U.S. resulting from higher interest expense on the Company's Senior Secured Credit Facilities, a valuation allowance for a deferred tax asset in a certain foreign entity of $3.7 million, as well as the tax benefit on a portion of the CE goodwill impairment in 2022 not recurring in 2023.

Income (Loss) from Continuing Operations
Loss from continuing operations was $18.6 million and $27.2 million for the three and six months ended June 30, 2023, respectively. Loss from continuing operations was $105.6 million and $111.8 million for the three and six months ended June 30, 2022. The primary drivers for these decreases in losses are noted above.

Income (Loss) from Discontinued Operations
The operating results of the former Harsco Rail Segment and costs directly attributable to the sale of the business have been reflected as discontinued operations in the Company's Condensed Consolidated Statement of Operations for all periods presented. In addition, this caption includes costs directly attributable to retained contingent liabilities of other previously disposed businesses. The increase in income during the six months ended June 30, 2023 was related primarily to the recognition of a net favorable estimated forward loss provision of $9.1 millions related to the Company's large long-term contracts with SBB, Network Rail and Deutsche Bahn under the former Harsco Rail segment recorded during the six months ended June 30, 2023, compared to an unfavorable forward estimated loss provisions of $35.4 million during the six months ended June 30, 2022 for these contracts. The increase in income during the three months ended June 30, 2023, compared to June 30, 2022, is due to the favorable forward estimated loss provision and higher spare parts sales, partially offset by unfavorable adjustments to other smaller contracts. It is possible that the Company's overall estimate of liquidated damages, penalties and costs to complete these and other contracts may increase, which would result in an additional estimated forward loss provision at such time. See Note 3, Discontinued Operations, in Part I, Item 1, Financial Statements.

Total Other Comprehensive Income (Loss)
Total other comprehensive income was $14.4 million and $21.6 million in the three and six months ended June 30, 2023, respectively, compared with total other comprehensive losses of $29.1 million and $17.1 million in the three and six months ended June 30, 2022, respectively. The primary driver of this change is the fluctuation of the U.S. dollar against certain currencies inclusive of the impact of foreign currency translation of cumulative unrecognized actuarial losses on the Company's pension obligations.

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Liquidity and Capital Resources
Cash Flow Summary
The Company currently expects to have sufficient financial liquidity and borrowing capacity to support the strategies within each of its businesses and its current operating and debt service needs. The Company currently expects operational and business needs to be met by cash provided by operations supplemented with borrowings from time to time, principally under the Senior Secured Credit Facilities. The Company supplements the cash provided by operations with borrowings from time to time due to historical patterns of seasonal cash flow and the funding of various projects. The Company regularly assesses capital needs in the context of operational trends and strategic initiatives.

The Company’s cash flows from operating, investing and financing activities, as reflected on the Condensed Consolidated Statements of Cash Flows, are summarized in the following table:
  Six Months Ended
June 30
(In millions) 2023 2022
Net cash provided (used) by:    
Operating activities $ 28.2  $ 117.7 
Investing activities (56.4) (43.7)
Financing activities 34.3  (54.6)
Effect of exchange rate changes on cash and cash equivalents, including restricted cash (1.8) (5.8)
Net change in cash and cash equivalents, including restricted cash $ 4.3  $ 13.7 
Net cash provided by operating activities — Net cash provided by operating activities in the first six months of 2023 was $28.2 million, a decrease in cash flows of $89.5 million from the first six months of 2022 primarily related to the sale of $120.0 million of the Company's accounts receivable through its AR Facility during the six months ended June 30, 2022. This decrease partially offsets higher year-to-date June 30, 2023 cash net income, compared to the prior year, due to improved business performance.

Net cash used by investing activities — Net cash used by investing activities in the first six months of 2023 was $56.4 million, an increase of $12.7 million from the cash used during the first six months of 2022. The increase is primarily due to increased 2023 capital expenditures, principally for HE, lower proceeds received from the sale of assets during 2023, and net payments made from the settlement of foreign currency forward exchange contract, partially offset by higher proceeds received from the Company's note receivable.

Net cash (used) provided by financing activities — Net cash provided by financing activities in the first six months of 2023 was $34.3 million, compared to net cash used by financing activities of $(54.6) million the first six months of 2022. The change was primarily due to increased net borrowings of $33.9 million in the first six months of 2023, compared to net repayments of $47.9 million during the six months ended June 30, 2022.

Sources and Uses of Cash
The Company’s principal sources of liquidity are cash provided by operations on an annual basis and borrowings under the Senior Secured Credit Facilities, augmented by cash proceeds from asset sales. In addition, the Company has other bank credit facilities available throughout the world.  The Company expects to continue to utilize all of these sources to meet future cash requirements for operations and growth initiatives.

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Summary of Senior Secured Credit Facilities and Notes:
(In millions)
 June 30
2023		 December 31
2022
By type:
     New Term Loan $ 490.0  $ 492.5 
     Revolving Credit Facility 410.0  370.0 
5.75% Senior Notes 475.0  475.0 
     Total $ 1,375.0  $ 1,337.5 
By classification:
Current $ 5.0  $ 5.0 
Long-term 1,370.0  1,332.5 
Total $ 1,375.0  $ 1,337.5 

  June 30, 2023
(In millions) Facility Limit Outstanding
Balance		 Outstanding Letters of Credit Available
Credit
Revolving credit facility (a U.S.-based program) $ 700.0  $ 410.0  $ 35.8  $ 254.2 

Debt Covenants
The Senior Secured Credit Facilities contain a consolidated net debt to Consolidated Adjusted EBITDA ratio covenant, which is not to exceed 5.50x for the quarter ended June 30, 2023 and through and including the quarter ending December 31, 2023 and then decreasing quarterly until reaching 4.00x on December 31, 2024. The total net leverage ratio covenant applicable to the third quarter of 2024 and earlier is subject to a 0.50x decrease upon divestiture of the former Harsco Rail segment.  The Company's required coverage of consolidated interest charges is set at a minimum of 2.75x through the end of 2024 (subject to an increase to 3.00x upon closing of the divestiture of the former Harsco Rail Segment).

At June 30, 2023, the Company was in compliance with these covenants, as the total net debt to Consolidated Adjusted EBITDA ratio was 4.63x and total interest coverage ratio was 3.01x. Based on balances and covenants in effect at June 30, 2023, the Company could increase net debt by $248.7 million and remain in compliance with these debt covenants. Alternatively, Consolidated Adjusted EBITDA could decrease by $24.3 million or interest expense could increase by $8.9 million and the Company would remain in compliance with these covenants at June 30, 2023. The Company believes it will continue to maintain compliance with these covenants based on its current outlook.  However, the Company’s estimates of compliance with these covenants could change in the future with a continued deterioration in economic conditions, higher than forecasted interest rate increases, the timing of working capital, including the collection of receivables, or an inability to successfully execute its plans by quarter to realize increased pricing and to implement cost reduction initiatives that substantially mitigate the impacts of inflation and other factors adversely impacting its realized operating margins.

AR Facility
The Company maintains a trade receivables securitization facility to accelerate cash flows from trade accounts receivable. Under the AR Facility, the Company and its designated subsidiaries continuously sell their trade receivables as they are originated to the wholly-owned bankruptcy-remote SPE. The SPE transfers ownership and control of qualifying receivables to PNC up to a maximum purchase commitment of $150.0 million. During the six months ended June 30, 2023, the Company received proceeds of $5.0 million and related to the facility.

Cash Management
The Company has various cash management systems throughout the world that centralize cash in various bank accounts where it is economically justifiable and legally permissible to do so. These centralized cash balances are then redeployed to other operations to reduce short-term borrowings and to finance working capital needs or capital expenditures. Due to the transitory nature of cash balances, they are normally invested in bank deposits that can be withdrawn at will or in very liquid short-term bank time deposits and government obligations. The Company's policy is to use the largest banks in the various countries in which the Company operates. The Company monitors the creditworthiness of banks and, when appropriate, will adjust banking operations to reduce or eliminate exposure to less creditworthy banks.

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At June 30, 2023, the Company's consolidated cash and cash equivalents included $83.7 million held by non-U.S. subsidiaries and approximately 17.8% of the Company's consolidated cash and cash equivalents had regulatory restrictions that would preclude the transfer of funds with and among subsidiaries. Non-U.S. subsidiaries also held $15.9 million of cash and cash equivalents in consolidated strategic ventures. The strategic venture agreements may require strategic venture partner approval to transfer funds with and among subsidiaries. While the Company's remaining non-U.S. cash and cash equivalents can be transferred with and among subsidiaries, the majority of these non-U.S. cash balances will be used to support the ongoing working capital needs and continued growth of the Company's non-U.S. operations.


Recently Adopted and Recently Issued Accounting Standards
 
Information on recently adopted and recently issued accounting standards is included in Note 2, Recently Adopted and Recently Issued Accounting Standards, in Part I, Item 1, Financial Statements.


ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Market risks have not changed significantly from those disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.


ITEM 4.        CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of June 30, 2023, an evaluation was performed, under the supervision and with the participation of the Company’s management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a – 15 under the Securities and Exchange Act of 1934, as amended. Based upon that evaluation, such officers concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities and Exchange Act of 1934, as amended (1) is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (2) is accumulated and communicated to the Company's management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting during the Company's most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.


PART II — OTHER INFORMATION 


ITEM 1.        LEGAL PROCEEDINGS
Information on legal proceedings is included in Note 12, Commitments and Contingencies, in Part I, Item 1, Financial Statements.

ITEM 1A.     RISK FACTORS
The Company's risk factors as of June 30, 2023 have not changed materially from those described in Part 1, Item 1A, "Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The following exhibits are included as part of this report by reference:
None.

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ITEM 6.        EXHIBITS

Exhibit
Number		   Description
3.1
3.2
10.1
10.2
10.3
31.1  
31.2
32  
101.Def Definition Linkbase Document
101.Pre Presentation Linkbase Document
101.Lab Labels Linkbase Document
101.Cal Calculation Linkbase Document
101.Sch Schema Document
101.Ins   Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
      ENVIRI CORPORATION
      (Registrant)
       
DATE August 2, 2023   /s/ PETER F. MINAN
      Peter F. Minan
      Senior Vice President and Chief Financial Officer
      (On behalf of the registrant and as Principal Financial Officer)
DATE August 2, 2023   /s/ SAMUEL C. FENICE
      Samuel C. Fenice
      Vice President and Corporate Controller
      (Principal Accounting Officer)
42
EX-3.1 2 exhibit31restatedcertifi.htm EX-3.1 exhibit31restatedcertifi
















































































CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION Harsco Corporation, a corporation duly organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Corporation") does hereby certify that: 1. The Restated Certificate of Incorporation of the Corporation is hereby amended by changing Article FIRST, so that, as amended said Article shall read as follows: The name of the Corporation is Enviri Corporation. 2. The foregoing amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporate Law of the State of Delaware. IN WITNESS WHEREOF, the Corporation has caused this certificate to be executed by its duly authorized officer as of this 5th day of June, 2023. By; _j�'etJ.��:._::::::_L'Jj Name: Title: Corporate Secretary

 
EX-10.1 3 exhibit101omnibusagreement.htm EX-10.1 Document
Exhibit 10.1
OMNIBUS AMENDMENT

This OMNIBUS AMENDMENT (this “Amendment”), dated as of June 30, 2023, is the:

(i) FIRST AMENDMENT TO RECEIVABLES PURCHASE AGREEMENT, among HARSCO RECEIVABLES LLC, as seller (the “Seller”), ENVIRI CORPORATION (F/K/A HARSCO CORPORATION), as initial servicer (in such capacity, the “Servicer”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as administrative agent (in such capacity, the “Administrative Agent”) and a purchaser; and

(ii) FIRST AMENDMENT TO PURCHASE AND CONTRIBUTION AGREEMENT, among the Servicer, VARIOUS ENTITIES LISTED ON THE SIGNATURE PAGES HERETO AS ORIGINATORS (each an “Originator”; and collectively, the “Originators”), and HARSCO RECEIVABLES LLC, as buyer (in such capacity, the “Buyer”).

Capitalized terms used but not otherwise defined herein (including such terms used above) have the respective meanings assigned thereto in the Receivables Purchase Agreement described below.
BACKGROUND

A.    The Seller, the Servicer, PNC and PNC Capital Markets LLC have entered into that certain Receivables Purchase Agreement, dated as of June 24, 2022 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Receivables Purchase Agreement”);

B.    The Servicer, the Originators and the Buyer have entered into that certain Purchase and Contribution Agreement, dated as of June 24, 2022 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Purchase and Contribution Agreement” and together with the Receivables Purchase Agreement, the “Agreements”);

C.    Enviri Corporation (f/k/a Harsco Corporation) (“Enviri”), as the performance guarantor (in such capacity, the “Performance Guarantor”), is a party to that certain Performance Guaranty, dated as of June 24, 2022, in favor of the Administrative Agent for the benefit of the Secured Parties (as may be amended, restated, supplemented or otherwise modified from time to time, the “Performance Guaranty”);

D.    Effective as of June 5, 2023 (the “Subject Name Change Effective Date”), Harsco Corporation changed its name to Enviri Corporation (the “Subject Name Change”); and

E.    The parties hereto desire to amend the Agreements, in each case, as set forth herein.

AMENDMENT

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:


1.Amendments to the Receivables Purchase Agreement. The Receivables Purchase Agreement is hereby amended as follows by replacing all references in the Receivables Purchase Agreement to “Harsco Corporation” with references to “Enviri Corporation”.

2.Amendments to the Purchase and Contribution Agreement. The Purchase and Contribution Agreement is hereby amended as follows:

(a)All references in the Purchase and Contribution Agreement to “Harsco Corporation” shall be replaced by references to “Enviri Corporation”.

(b)Schedule I to the Purchase and Contribution Agreement is hereby replaced in its entirety with Schedule I attached hereto.

(c)Schedule II to the Purchase and Contribution Agreement is hereby replaced in its entirety with Schedule II attached hereto.

(d)Schedule III to the Purchase and Contribution Agreement is hereby replaced in its entirety with Schedule III attached hereto.

(e)Schedule IV to the Purchase and Contribution Agreement is hereby replaced in its entirety with Schedule IV attached hereto.

(f)Schedule V to the Purchase and Contribution Agreement is hereby replaced in its entirety with Schedule V attached hereto.

3.Notice; Consent.

(a)Notice of Name Change. The Servicer hereby provides notice of the occurrence of the Subject Name Change effective as of the Subject Name Change Effective Date and requests that each of the parties hereto acknowledge and consent to the occurrence of the Subject Name Change effective as of the Subject Name Change Effective Date.

(b)Consent to Subject Name Change. Subject to the terms and conditions of this Amendment, including the accuracy of each of the representations and warranties set forth herein, each of the parties hereto hereby: (i) acknowledges receipt of the notice set forth in Section 3(a) above, (ii) consents to the occurrence of the Subject Name Change effective as of the Subject Name Change Effective Date and (iii) waives any notice requirement set forth in the Agreements, whether as a prerequisite or condition precedent to the effectiveness of the Subject Name Change or otherwise.



(c)General Limitations. The foregoing limited consent shall be strictly limited to their terms. Consistent with the foregoing, nothing contained herein shall be deemed to be a consent to any party to the Transaction Documents failing to perform its obligations under the Transaction Documents other than solely to the extent set forth above. Notwithstanding anything to the contrary herein or in the Transaction Documents, by executing this Amendment, no party hereto is now waiving or consenting to, nor has it agreed to waive or consent to in the future (i) the modification or breach of any provision of the Transaction Documents, other than as expressly set forth in Sections 3(a) and 3(b) above, (ii) any Purchase and Contribution Termination Event, Unmatured Purchase and Contribution Termination Event, Event of Default or Unmatured Event of Default under the Agreements or the other Transaction Documents (whether presently or subsequently existing or arising), other than as expressly set forth in Sections 3(a) and 3(b) above or (iii) any rights, powers or remedies presently or subsequently available to any of the parties hereto or any other Person against the Seller, any Originator or the Servicer under any Agreement, any of the other Transaction Documents, applicable law or otherwise, relating to any matter other than solely to the extent expressly consented to herein, each of which rights, powers or remedies is hereby specifically and expressly reserved and continue.

(d)No Waiver of Indemnification, Etc. Without limiting the generality of the foregoing and for the avoidance of doubt, the parties hereto are not hereby waiving or releasing, nor have they agreed to waive or release in the future, any right or claim to indemnification or reimbursement by, or damages from, the Seller, any Originator or the Servicer or any other Person under any Transaction Document, including without limitation, for any liability, obligation, loss, damage, penalty, judgment, settlement, cost, expense or disbursement resulting or arising directly or indirectly from the Subject Name Change.

4.Additional Agreements. The parties hereto hereby agree to the terms set forth on Schedule VI attached hereto.

5.Representations and Warranties of the Seller, Servicer, Originators and Buyer. The Seller, Servicer, each of the Originators, and the Buyer each hereby represent and warrant to each of the parties hereto as of the date hereof as follows:

(a)Representations and Warranties. Immediately after giving effect to this Amendment, each of the representations and warranties made by it under the applicable Agreements and each of the Transaction Documents to which it is a party are true and correct in all material respects as of the date hereof (unless stated to relate to an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date).

(b)Enforceability. The execution and delivery by it of this Amendment, and the performance of its obligations under this Amendment, the applicable Agreements, as amended hereby, and the other Transaction Documents to which it is a party, are within its organizational powers and have been duly authorized by all necessary organizational action on its part. This Amendment, the applicable Agreements, as amended hereby, and the other Transaction Documents to which it is a party are (assuming due authorization and execution by the other parties thereto) are its valid and legally binding obligations, enforceable in accordance with its respective terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) as such enforceability may be limited by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.



(c)No Default. Immediately after giving effect to this Amendment and the transactions contemplated hereby, no Purchase and Contribution Termination Event, Unmatured Purchase and Contribution Termination Event, Event of Default or Unmatured Event of Default exists or shall exist.

6.Entire Agreement. Except as otherwise amended hereby, all of the other terms and provisions of each Agreement are and shall remain in full force and effect and the Agreements, as amended and supplemented by this Amendment, is hereby ratified and confirmed by the parties hereto. After this Amendment becomes effective, (i) all references in the Receivables Purchase Agreement (or in any other Transaction Document) to “this Agreement”, “hereof”, “herein” or words of similar effect referring to the Receivables Purchase Agreement shall be deemed to be references to the Receivables Purchase Agreement as amended by this Amendment and (ii) all references in the Purchase and Contribution Agreement (or in any other Transaction Document) to “this Agreement”, “hereof”, “herein” or words of similar effect referring to the Purchase and Contribution Agreement shall be deemed to be references to the Purchase and Contribution Agreement as amended by this Amendment. This Amendment contains the entire understanding of the parties with respect to the provisions of the Agreements amended and supplemented hereby and may not be modified except in writing signed by all parties. This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any provision of either Agreement other than as set forth herein.

7.Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart hereof by facsimile or other electronic means shall be equally effective as delivery of an originally executed counterpart. The words “execution”, “executed”, “signed”, “signature”, and words of like import in this Amendment and the other Transaction Documents shall be deemed to include electronic signatures or electronic records, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

8.Severability. Any provisions of this Amendment which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

9.Effectiveness. This Amendment shall become effective subject to the conditions precedent that the Administrative Agent shall have received the following (or waived the receipt thereof in writing):

(a)counterparts to this Amendment executed by each of the parties hereto;

(b)evidence of filing of the UCC-3 amendment described in Section 10 hereof;



(c)such officer certificates as the Administrative Agent may reasonably request;

(d)a certificate of good standing (or similar) with respect to Enviri from Enviri’s jurisdiction of organization; and

(e)lien search reports with respect to Enviri in Delaware.

10.Authorization to File Financing Statement Amendment. Upon the effectiveness of this Amendment, each of the parties hereto hereby authorize the Administrative Agent to file (at the expense of the Seller) a UCC-3 amendment in substantially the form of Exhibit A hereto amending the UCC-1 financing statement identified on Exhibit B hereto.

11.Governing Law.

(a)THIS AMENDMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF, EXCEPT TO THE EXTENT THAT THE PERFECTION, THE EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF ADMINISTRATIVE AGENT OR ANY PURCHASER IN THE SOLD ASSETS OR SELLER COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK).

(b)EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO (I) WITH RESPECT TO THE SELLER AND THE SERVICER, THE EXCLUSIVE JURISDICTION, AND (II) WITH RESPECT TO EACH OF THE OTHER PARTIES HERETO, THE NON-EXCLUSIVE JURISDICTION, IN EACH CASE, OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT OR ANY OTHER TRANSACTION DOCUMENT, AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING (I) IF BROUGHT BY THE SELLER, THE SERVICER OR ANY AFFILIATE THEREOF, SHALL BE HEARD AND DETERMINED, AND (II) IF BROUGHT BY ANY OTHER PARTY TO THIS AMENDMENT OR ANY OTHER TRANSACTION DOCUMENT, MAY BE HEARD AND DETERMINED, IN EACH CASE, IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. NOTHING IN THIS CLAUSE SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY OTHER PURCHASER PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST THE SELLER OR THE SERVICER OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF OTHER JURISDICTIONS. EACH OF THE SELLER AND THE SERVICER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH OF THE SELLER AND THE SERVICER CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO IT AT ITS ADDRESS SPECIFIED IN SCHEDULE III OF THE RECEIVABLES PURCHASE AGREEMENT. NOTHING IN THIS CLAUSE SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY OTHER PURCHASER PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AMENDMENT OR ANY OTHER TRANSACTION DOCUMENT.



12.Section Headings. The various headings of this Amendment are included for convenience only and shall not affect the meaning or interpretation of this Amendment, the Agreements or any provision hereof or thereof.

13.Reaffirmation of Performance Guaranty. After giving effect to this Amendment and each of the transactions contemplated hereby, all of the provisions of the Performance Guaranty shall remain in full force and effect and the Performance Guarantor hereby ratifies and affirms the Performance Guaranty and acknowledges that the Performance Guaranty has continued and shall continue in full force and effect in accordance with its terms.

[SIGNATURE PAGES FOLLOW]



IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.



HARSCO RECEIVABLES LLC,
as the Seller and as the Buyer
By: /s/ Michael Kolinsky
Name: Michael Kolinsky
Title: Vice President
ENVIRI CORPORATION,
as the Servicer, as an Originator and as the Performance Guarantor
By: /s/ Michael Kolinsky
Name: Michael Kolinsky
Title: Vice President - Treasurer, Tax and Real Estate
HARSCO CLEAN EARTH HOLDINGS, LLC, as an Originator
By:
Name:
Title:
21ST CENTURY ENVIRONMENTAL
MANAGEMENT OF NEVADA, LLC
21ST CENTURY ENVIRONMENTAL
MANAGEMENT, LLC OF RHODE ISLAND
ADVANCED REMEDIATION & DISPOSAL
TECHNOLOGIES OF DELAWARE, LLC
AERC ACQUISITION CORPORATION
ALLIED ENVIRONMENTAL GROUP, LLC
ALLWORTH, LLC
BURLINGTON ENVIRONMENTAL, LLC
CEHI ACQUISITION, LLC
CEI HOLDING, LLC


CHEMICAL POLLUTION CONTROL OF
FLORIDA, LLC
CHEMICAL RECLAMATION SERVICES, LLC
CHEMICAL POLLUTION CONTROL, LLC OF
NEW YORK
CLEAN EARTH ENVIRONMENTAL
SERVICES, INC.
AES ASSET ACQUISITION CORPORATION
CLEAN EARTH ENVIRONMENTAL
SOLUTIONS, INC.
CLEAN EARTH, LLC
CLEAN EARTH HOLDINGS, LLC
CLEAN EARTH SPECIALTY WASTE
SOLUTIONS, INC.
CLEAN EARTH OF ALABAMA, INC.
CLEAN EARTH OF CARTERET, LLC
CLEAN EARTH DREDGING TECHNOLOGIES, LLC CLEAN EARTH OF GEORGIA, LLC
CLEAN EARTH OF GREATER WASHINGTON,
LLC
CLEAN EARTH OF MARYLAND, LLC
CLEAN EARTH OF NEW CASTLE, LLC
CLEAN EARTH OF NORTH JERSEY, INC.
CLEAN EARTH OF PHILADELPHIA, LLC
CLEAN EARTH OF SOUTHEAST PENNSYLVANIA, LLC
CLEAN EARTH OF SOUTHERN FLORIDA, LLC
CLEAN EARTH OF WILLIAMSPORT, LLC
CLEAN EARTH OF MICHIGAN, LLC
CLEAN ROCK PROPERTIES LTD.
ESOL TOPCO LLC
GENERAL ENVIRONMENTAL
MANAGEMENT OF RANCHO CORDOVA LLC
LUNTZ ACQUISITION (DELAWARE), LLC
NORTHLAND ENVIRONMENTAL, LLC
NORTRU, LLC
PHILIP RECLAMATION SERVICES,
HOUSTON, LLC
PSC ENVIRONMENTAL SERVICES LLC
PSC RECOVERY SYSTEMS, LLC
REAL PROPERTY ACQUISITION LLC
REPUBLIC ENVIRONMENTAL RECYCLING (NEW JERSEY), INC.


REPUBLIC ENVIRONMENTAL SYSTEMS
(PENNSYLVANIA), LLC
REPUBLIC ENVIRONMENTAL SYSTEMS
(TRANSPORTATION GROUP), LLC
RHO-CHEM, LLC
SOLVENT RECOVERY, LLC
GARDNER ROAD OIL, LLC
CLEAN EARTH MOBILE SERVICES, LLC
CLEAN EARTH OF PUERTO RICO, LLC
ENVIRONMENTAL SOIL MANAGEMENT,
INC.
ENVIRONMENTAL SOIL MANAGEMENT OF NEW YORK, LIMITED LIABILITY COMPANY MKC ACQUISITION CORPORATION,
CLEAN EARTH CORPORATE SERVICES, LLC CLEAN EARTH GOVERNMENT SERVICES, LLC,
as Originators
By:__/s/ Sarah Kowalczyk
Name: Sarah Kowalczyk
Title: Secretary




PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:______________________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,


as a Purchaser
By:______________________________________
Name:
Title:



EX-31.1 4 nvri-ex311_2023xq2.htm EX-31.1 Document

Exhibit 31.1
 
ENVIRI CORPORATION
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, F. Nicholas Grasberger, III, certify that:
1.              I have reviewed this Quarterly Report on Form 10-Q of Enviri Corporation;
2.              Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.              Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.              The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)         Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)         Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.              The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 
August 2, 2023  
   
/s/ F. NICHOLAS GRASBERGER III  
F. Nicholas Grasberger III
  
Chairman, President and Chief Executive Officer  

EX-31.2 5 nvri-ex312_2023xq2.htm EX-31.2 Document

Exhibit 31.2
 
ENVIRI CORPORATION
CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Peter F. Minan, certify that:
1.              I have reviewed this Quarterly Report on Form 10-Q of Enviri Corporation;
2.              Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.              Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.              The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; 
(b)         Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)         Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 
5.              The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 
August 2, 2023  
   
/s/ PETER F. MINAN  
Peter F. Minan  
Senior Vice President and Chief Financial Officer  

EX-32 6 nvri-ex32_2023xq2.htm EX-32 Document


Exhibit 32

ENVIRI CORPORATION
CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Enviri Corporation (the "Company") on Form 10-Q for the period ending June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
August 2, 2023
/s/ F. NICHOLAS GRASBERGER III
F. Nicholas Grasberger III
Chairman, President and Chief Executive Officer
/s/ PETER F. MINAN
Peter F. Minan
Senior Vice President and Chief Financial Officer
A signed original of this written statement required by Section 906 has been provided to Enviri Corporation and will be retained by Enviri Corporation and furnished to the Securities and Exchange Commission or its staff upon request.