Harsco Corporation
Annual Report 2016

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Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-KýANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2016ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission File Number 001-03970HARSCO CORPORATION(Exact name of registrant as specified in its charter)Delaware(State or other jurisdiction of incorporation or organization)23-1483991(I.R.S. employer identification number)350 Poplar Church Road, Camp Hill, Pennsylvania(Address of principal executive offices)17011(Zip Code)Registrant's telephone number, including area code 717-763-7064Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon stock, par value $1.25 per sharePreferred stock purchase rights New York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act: NONEIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No oIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ýIndicate 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 preceding12 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 ý No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and postedpursuant 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 and post suchfiles). Yes ý No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to thebest of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "largeaccelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.Large accelerated filer ý Accelerated filer o Non-accelerated filer o (Do not check if asmaller reporting company) Smaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ýThe aggregate market value of the Company's voting stock held by non-affiliates of the Company as of June 30, 2016 was $532,362,000Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date:Class Outstanding at January 31, 2017Common stock, par value $1.25 per share 80,182,217DOCUMENTS INCORPORATED BY REFERENCESelected portions of the 2017 Proxy Statement are incorporated by reference into Part III of this Report. Table of ContentsHARSCO CORPORATIONFORM 10-KINDEX PagePART I Item 1.Business. 1Item 1A.Risk Factors. 5Item 1B.Unresolved Staff Comments. 14Item 2.Properties. 14Item 3.Legal Proceedings. 14Item 4.Mine Safety Disclosures.14SupplementaryItem.Executive Officers of the Registrant (Pursuant to Instruction 3 to Item 401(b) of Regulation S-K). 15PART II Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities. 16Item 6.Selected Financial Data. 17Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations. 18Item 7A.Quantitative and Qualitative Disclosures About Market Risk. 39Item 8.Financial Statements and Supplementary Data. 40Item 9.Changes In and Disagreements With Accountants on Accounting and Financial Disclosure. 92Item 9A.Controls and Procedures. 92Item 9B.Other Information. 92PART III Item 10.Directors, Executive Officers and Corporate Governance. 93Item 11.Executive Compensation. 93Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 93Item 13.Certain Relationships and Related Transactions, and Director Independence. 93Item 14.Principal Accounting Fees and Services. 93PART IV Item 15.Exhibits, Financial Statement Schedules. 94Item 16.Form 10-K Summary.99SIGNATURES100 Table of ContentsPART IItem 1. Business.(a)General Development of BusinessHarsco Corporation (the "Company") is a diversified, multinational provider of industrial services and engineered products serving global industries that arefundamental to worldwide economic growth and infrastructure development. The Company's operations consist of three reportable segments: HarscoMetals & Minerals, Harsco Industrial and Harsco Rail. The Company has locations in approximately 30 countries, including the U.S. The Company wasincorporated in 1956.The Company's operations previously included the Harsco Infrastructure Segment. In November 2013, the Company consummated the sale of the Company'sHarsco Infrastructure Segment into a strategic venture with Clayton, Dubilier & Rice ("CD&R") as part of a transaction that combined the HarscoInfrastructure Segment with Brand Energy & Infrastructure Services, Inc., which CD&R simultaneously acquired. The Company contributed substantially allof the Company’s equity interests in, and the net assets of, the Harsco Infrastructure Segment to the strategic venture in exchange for approximately $300million in cash, subject to working capital and other adjustments, and an approximate 29% equity interest in the Infrastructure strategic venture. TheCompany’s equity interest in the Infrastructure strategic venture was accounted for under the equity method of accounting as prescribed by generallyaccepted accounting principles in the U.S.The Company's executive offices are located at 350 Poplar Church Road, Camp Hill, Pennsylvania 17011 and the Company's main telephone number is(717) 763-7064. The public may read and copy any material the Company files with the Securities and Exchange Commission ("SEC") at their PublicReference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by callingthe SEC at 1-800-SEC-0330. The Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and anyamendments to such reports filed with or furnished to the SEC under Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, areavailable free of charge on the SEC's Internet website at www.sec.gov and on the Company's Internet website at www.harsco.com as soon as reasonablypracticable after such reports are electronically filed with the SEC. The information posted on the Company's website is not incorporated into the Company'sSEC filings.The Company's principal lines of business and related principal business drivers are as follows:Principal Lines of Business Principal Business DriverslGlobal expertise in providing on-site services for material logistics,product quality improvement and resource recovery from iron, steel andmetals manufacturing; as well as value added environmental solutionsfor industrial co-products lGlobal metals production and capacity utilization lOutsourcing of services by metals producers lDemand for high-value specialty steel and ferro alloys lDemand for environmental solutions for metals and minerals wastestreams lDemand for industrial and infrastructure surface preparation andrestoration lDemand for residential roofing shingles lDemand for road making materialslAir-cooled heat exchangers lDemand in the natural gas, natural gas processing and petrochemicalmarketslIndustrial grating and high-security fencing products lIndustrial plant and warehouse construction and expansion lOff-shore drilling and new rig construction lHigh-security fencing requirements to protect major facilities andinfrastructurelHeat transfer products lDemand for commercial and institutional boilers and water heaterslRailway track maintenance services and equipment lGlobal railway track maintenance-of-way capital spending lOutsourcing of track maintenance and new track construction byrailroadsThe Company reports segment information using the "management approach," based on the way management organizes and reports the segments within theenterprise for making operating decisions and assessing performance. The Company's reportable segments are identified based upon differences in products,services and markets served. These segments and the types of products and services offered are more fully described in section (c) below.1 Table of ContentsIn 2016, 2015 and 2014, sales in the U.S. contributed total revenues of $0.6 billion, $0.8 billion and $0.9 billion, equal to approximately 42%, 44% and 43%of total revenues, respectively. The Company's sales in euro-currency countries contributed total revenues of $0.3 billion, $0.3 billion and $0.4 billion in2016, 2015 and 2014, equal to approximately 18%, 16% and 17% of total revenues, respectively. Sales in the U.K. contributed total revenues of $0.2 billion,$0.2 billion and $0.3 billion in 2016, 2015 and 2014, equal to approximately 11%, 13% and 12% of total revenues, respectively. There were no significantinter-segment revenues.(b)Financial Information about SegmentsFinancial information concerning segments is included in Note 16, Information by Segment and Geographic Area, in Part II, Item 8, "Financial Statementsand Supplementary Data," which information is incorporated herein by reference.(c)Narrative Description of Business(1) A narrative description of the businesses by reportable segment is as follows:Harsco Metals & Minerals Segment—67% of consolidated revenues for 2016The Harsco Metals & Minerals Segment is one of the world's largest providers of on-site services for material logistics, product quality improvement andresource recovery from iron, steel and metals manufacturing.The Minerals business extracts high-value metallic content from stainless steel by-products and also specializes in the development of minerals technologiesfor commercial applications, including agriculture fertilizers. The Minerals business also produces industrial abrasives and roofing granules from power-plantutility coal slag at a number of locations throughout the U.S. Harsco Minerals' BLACK BEAUTY® abrasives are used for industrial surface preparation, suchas rust removal and cleaning of bridges, ship hulls and various structures. Roofing granules are sold to residential roofing shingle manufacturers in the U.S.,primarily for the replacement roofing market. This business is one of the largest U.S. producers of slag abrasives and residential roofing granules.As part of the Harsco Metals & Minerals Segment's initiatives to develop new products and services, in particular environmental solutions, the Segment isinvolved with several initiatives and technology alliances focused on developing greater environmental sustainability through the recovery of resourcesfrom production by-products and waste streams.The Harsco Metals & Minerals Segment operates in approximately 30 countries. In 2016 and 2015, this Segment's revenues were generated in the followingregions: Percentage of RevenuesRegion 2016 2015Western Europe 40% 41%North America 26% 24%Latin America (a) 14% 14%Asia-Pacific 12% 12%Middle East and Africa 5% 5%Eastern Europe 3% 4%(a)Including Mexico.For 2016, 2015 and 2014, the Harsco Metals & Minerals Segment's percentage of the Company's consolidated revenues were 67%, 64% and 67%,respectively.The Company has announced its intention to pursue strategic options for the separation of the Harsco Metals & Minerals Segment from the rest of theCompany. There is no specific timetable related to this initiative and there can be no assurance that a sale, spin-off or any other transaction will take place.Harsco Industrial Segment—17% of consolidated revenues for 2016The Harsco Industrial Segment includes the Harsco Industrial Air-X-Changers, Harsco Industrial IKG and Harsco Industrial Patterson-Kelley businesses.Approximately 87% of this Segment's revenues originate in North America.Harsco Industrial Air-X-Changers is a leading supplier of custom-engineered and manufactured air-cooled heat exchangers for the natural gas, natural gasprocessing and petrochemical industries in the U.S. Harsco Industrial Air-X-Changers' heat exchangers are the primary apparatus used to condition natural gasduring recovery, compression and transportation from underground reserves through the major pipeline distribution channels. In January 2014, the Companyacquired Hammco Corporation ("Hammco"), a U.S. manufacturer of high specification air-cooled heat exchangers for the natural gas and petrochemicalprocessing markets.2 Table of ContentsHarsco Industrial IKG manufactures a varied line of industrial grating and high-security fencing products at several plants in the U.S. and international plantslocated in Mexico and China. These products include a full range of metal bar grating configurations, which are used mainly in industrial flooring, as well assafety and security applications in the energy, paper, chemical, refining and processing industries. Harsco Industrial IKG also produces GrateGuardTM, afencing solution for first-line physical security.Harsco Industrial Patterson-Kelley is a leading manufacturer of energy-efficient heat transfer products such as boilers and water heaters for commercial andinstitutional applications.For 2016, 2015 and 2014, this Segment's percentage of the Company's consolidated revenues were 17%, 21% and 20%, respectively.Harsco Rail Segment—16% of consolidated revenues for 2016The Harsco Rail Segment is a global provider of equipment, after-market parts and services for the maintenance, repair and construction of railway track. TheSegment's equipment and services support private and government-owned railroads and urban transit systems worldwide. In March 2015, the Companyacquired Protran Technology ("Protran"), a U.S. designer and producer of safety systems for transportation and industrial applications; and in April 2015, theCompany acquired JK Rail Products, LLC ("JK Rail"), a provider of after-market parts for railroad track maintenance.The Harsco Rail Segment's products are produced in three countries and products and services are provided worldwide. In 2016, 2015 and 2014, exportproduct sales from the U.S. for the Harsco Rail Segment were $67.9 million, $67.1 million and $104.9 million, respectively.For 2016, 2015 and 2014, the Harsco Rail Segment's percentage of the Company's consolidated revenues were 16%, 15% and 13%, respectively.(1)(i) The products and services of the Company are generated through a number of product groups. These product groups are more fully discussed inNote 16, Information by Segment and Geographic Area, in Part II, Item 8, "Financial Statements and Supplementary Data." The product groups thatcontributed 10% or more as a percentage of consolidated revenues in any of the last three fiscal years are set forth in the following table: Percentage of Consolidated RevenuesProduct Group 2016 2015 2014Outsourced, on-site services of material logistics, product quality improvement andresource recovery for iron, steel and metals manufacturing; as well as value addedenvironmental solutions for industrial co-products 67% 64% 67%Railway track maintenance services and equipment 16% 15% 13%Air-cooled heat exchangers 6% 11% 11%(1)(ii) New products and services are added from time to time; however, in 2016, 2015 and 2014 none required the investment of a material amount of theCompany's assets.(1)(iii) The manufacturing requirements of the Company's operations are such that no unusual sources of supply for raw materials are required. The rawmaterials used by the Company for its product manufacturing principally include steel and, to a lesser extent, aluminum, which are usually readily available.The profitability of the Company's manufactured products is affected by changing purchase prices of steel and other materials and commodities.(1)(iv) While the Company has a number of trademarks, patents and patent applications, it does not consider that any material part of its business isdependent upon them.(1)(v) The Company's Harsco Metals & Minerals Segment provides services which are usually subject to volume reductions at certain points of the year andthe Company furnishes products within the Harsco Industrial Segment that are seasonal in nature. As a result, the Company's revenues and results ofoperations for the first quarter ending March 31 and the fourth quarter ending December 31 may be lower than the second and third quarters. Additionally,the Company has historically generated the majority of its cash flows in the second half of the year. This is a result of normally higher income during thelatter part of the year. 3 Table of Contents(1)(vi) The practices of the Company relating to working capital are similar to those of other industrial service providers or manufacturers servicing bothdomestic and international industrial customers and commercial markets. These practices include the following:•Standard accounts receivable payment terms of 30 to 60 days, with progress or advance payments required for certain long-lead-time or large orders.Payment terms are slightly longer in certain international markets.•Standard accounts payable payment terms of 30 to 90 days.•Inventories are maintained in sufficient quantities to meet forecasted demand. Due to the time required to manufacture certain railway trackmaintenance equipment to customer specifications, inventory levels of this business tend to increase for an extended period of time during theproduction phase and decline when the equipment is sold.(1)(vii) In 2016, the Harsco Metals & Minerals Segment had one customer, and in 2015 and 2014 had two customers that each provided in excess of 10% ofthis Segment's revenues under multiple long-term contracts at several mill sites. The loss of any one of the contracts would not have a material adverse effectupon the Company's financial position or cash flows; however, it could have a significant effect on quarterly or annual results of operations. Additionally, adecline in economic conditions may further impact the ability of the Company's customers to meet their obligations to the Company on a timely basis andcould result in bankruptcy or receivership filings by any of such customers. If customers are unable to meet their obligations on a timely basis, or if theCompany is unable to collect amounts due from customers for any reason, it could adversely impact the realizability of receivables, the valuation ofinventories and the valuation of long-lived assets across the Company's businesses. As part of its credit risk management practices, the Company closelymonitors the credit standing and accounts receivable position of its customer base.The Harsco Industrial Segment had no customers in 2016, two customers in 2015 and one customer 2014 that provided in excess of 10% of the Segment'srevenues. The loss of any of these customers would not have a material adverse impact on the Company's financial positions or cash flows; however, it couldhave a material effect on quarterly or annual results of operations.The Harsco Rail Segment had one customer in 2016, two customers in 2015 and one customer in 2014 that provided in excess of 10% of the Segment'srevenues. The loss of any of these customers would not have a material adverse impact on the Company's financial positions or cash flows; however, it couldhave a material effect on quarterly or annual results of operations.(1)(viii) At December 31, 2016, the Company's metals services contracts had estimated future revenues of $2.7 billion at expected production levels,compared with $3.2 billion at December 31, 2015. This provides the Company with a substantial base of long-term revenues. The decrease is primarily due tothe timing of contract expiration and renewals; exited contracts associated with strategic actions from the Harsco Metals & Minerals Improvement Plan("Project Orion") related to the focus on underperforming contracts; and the impact of foreign currency translation. Approximately 24% of these revenues areexpected to be recognized by December 31, 2017; approximately 43% of these revenues are expected to be recognized between January 1, 2018 andDecember 31, 2020; approximately 14% of these revenues are expected to be recognized between January 1, 2021 and December 31, 2023; and theremaining revenues are expected to be recognized thereafter. There are no significant metals services contracts for which the estimated costs to complete thecontract currently exceed the estimated revenue to be realized included in the below estimated future revenues, though certain contracts may have lowernear-term operating margins due to continued reduced steel production and weaker commodity prices.At December 31, 2016, the Company had an estimated order backlog of $54.4 million in its Harsco Industrial Segment, compared with $72.9 million atDecember 31, 2015. This decrease is primarily due to continued low oil prices impacting capital expenditures and overall spending by customers in thenatural gas, natural gas processing and petrochemical industries. In addition, at December 31, 2016, the Harsco Rail Segment had an estimated order backlogof $273.0 million, compared with $292.1 million at December 31, 2015. This decrease is primarily due to shipments which were not replaced due todecreased demand, primarily in the U.S., during 2016. At December 31, 2016, $140.6 million or 43% of the Company's manufactured products order backlogis not expected to be filled in 2017. The remainder of this backlog is expected to be filled in 2018 and 2019. This is exclusive of long-term metals industryservices contracts, roofing granules and industrial abrasives products, and minerals and metal recovery technologies services.(1)(ix) At December 31, 2016, the Company had no material contracts that were subject to renegotiation of profits or termination at the election of the U.S.Government.(1)(x) The Company's competitive environment is complex because of the wide diversity of services and products provided and the global breadth and depthof markets served. No single service provider or manufacturer competes with the Company with respect to all services provided or products manufactured andsold. In general, on a global basis, the Company's segments are among the market leaders in their respective sectors and compete with a range of global,regional and local businesses of varying size and scope.4 Table of ContentsHarsco Metals & Minerals Segment—This Segment provides outsourced on-site services to the global metals industries in approximately 30 countries, withthe largest operations focused in the U.S., the U.K., France and Brazil. This Segment is one of the world's largest providers of these services. This Segment'skey competitive factors are innovative resource recovery solutions, significant industry experience, technology, safety performance, service and value. ThisSegment competes principally with a number of privately-held businesses for services outsourced by customers. Additionally, due to the nature of thisSegment's services, it encounters a certain degree of "competition" from customers' desire to perform similar services themselves instead of using anoutsourced solution.Harsco Industrial Segment—This Segment includes manufacturing businesses located principally in the U.S. with an increasing focus on internationalgrowth. Key competitive factors include quality, value, technology and energy-efficiency. Primary competitors are U.S.-based manufacturers of similarproducts. In January 2014, the Company acquired Hammco, a provider of process coolers for the natural gas, natural gas processing and petrochemicalindustries.Harsco Rail Segment—This Segment manufactures and sells highly-engineered railway track maintenance equipment produced primarily in the U.S. forcustomers throughout the world. Additionally, this Segment provides railway track maintenance services principally in the U.S. and the U.K. This Segment'skey competitive factors are quality, technology, customer service and value. Primary competitors for both products and services are privately-held globalbusinesses as well as certain regional competitors. In March 2015, the Company acquired Protran, a U.S. designer and producer of safety systems fortransportation and industrial applications; and in April 2015, the Company acquired JK Rail, a provider of after-market parts for railroad track maintenance.(1)(xi) The Company's expense for research and development activities was $4.3 million, $4.5 million and $5.5 million in 2016, 2015 and 2014,respectively. This excludes technology development and engineering costs classified in cost of services and products sold or selling, general andadministrative expense. For additional information regarding research and development activities, see Research and Development, in Part II, Item 7,"Management's Discussion and Analysis of Financial Condition and Results of Operations."(1)(xii) The Company has become subject to, as have others, stringent air and water quality control legislation. In general, the Company has not experiencedsubstantial difficulty complying with these environmental regulations, and does not anticipate making any material capital expenditures for environmentalcontrol facilities. While the Company expects that environmental regulations may expand, and that its expenditures for air and water quality control willcontinue, it cannot predict the effect on its business of such expanded regulations. For additional information regarding environmental matters see Note 12,Commitments and Contingencies, in Part II, Item 8, "Financial Statements and Supplementary Data."(1)(xiii) At December 31, 2016, the Company had approximately 9,400 employees.(d)Financial Information about Geographic AreasFinancial information concerning international and domestic operations is included in Note 16, Information by Segment and Geographic Area, in Part II,Item 8, "Financial Statements and Supplementary Data," which information is incorporated herein by reference. Export sales from the U.S. totaled $86.5million, $80.8 million and $134.0 million in 2016, 2015 and 2014, respectively.(e)Available InformationInformation is provided in Part I, Item 1 (a), "General Development of Business."Item 1A. Risk Factors.Set forth below are risks and uncertainties that could materially and adversely affect Harsco Corporation's (the "Company's") results of operations, financialcondition, liquidity and cash flows. The risks set forth below are not the only risks faced by the Company. The Company's business operations could also beaffected by other factors not presently known to the Company or factors that the Company currently does not consider to be material.Negative economic conditions may adversely impact demand for the Company's products and services, as well as the ability of the Company's customers tomeet their obligations to the Company on a timely basis.Negative economic conditions, including the tightening of credit in financial markets, can lead businesses to postpone spending, which may impact theCompany's customers, causing them to cancel, decrease or delay their existing and future orders with the Company. In addition, economic conditions mayfurther impact the ability of the Company's customers by either causing them to close locations serviced by the Harsco Metals & Minerals Segment, or causetheir financial condition to deteriorate to a point where they are unable to meet their obligations to the Company on a timely basis. One or more of theseevents could adversely impact the Company's operating results and realizability of receivables.5 Table of ContentsCyclical industry and economic conditions may adversely affect the Company's businesses.The Company's businesses are subject to general economic slowdowns and cyclical conditions in each of the industries served. In particular:•The Harsco Metals & Minerals Segment may be adversely impacted by continued slowdowns in steel mill production, excess production capacity,bankruptcy or receivership of steel producers and changes in outsourcing practices in the steel industry;•The resource recovery technologies business of the Harsco Metals & Minerals Segment can also be adversely impacted by continued slowdowns incustomer production or a reduction in the selling prices of its materials, which are market-based and vary based upon the current fair value of thecomponents being sold. Therefore, the revenue generated from the sale of such recycled materials varies based upon the fair value of the commoditycomponents being sold;•The industrial abrasives and roofing granules business of the Harsco Metals & Minerals Segment may be adversely impacted by reduced homeresales or economic conditions that slow the rate of residential roof replacement, or by slowdowns in the industrial and infrastructure refurbishmentindustries;•Decreasing oil prices may adversely impact purchasing by energy sector customers in the Harsco Industrial Segment;•The industrial grating products business of the Harsco Industrial Segment may be adversely impacted by slowdowns in non-residential constructionand industrial production;•The Harsco Rail Segment may be adversely impacted by developments in the railroad industry that lead to lower capital spending or reduced trackmaintenance spending; and•Capital constraints and increased borrowing costs may also adversely impact the financial position and operations of the Company's customersacross all business segments.Furthermore, realization of deferred tax assets is ultimately dependent on generating sufficient income in future periods to ensure recovery of those assets.The cyclicality of the Company's end markets and adverse economic conditions may negatively impact the future income levels that are necessary for theutilization of deferred tax assets.The seasonality of the Company's business may cause its quarterly results to fluctuate.The Company has historically generated the majority of its cash flows provided by operations in the second half of the year. This is a result of normallyhigher income during the second half of the year, as the Company's business tends to follow seasonal patterns. If the Company is unable to successfullymanage the cash flow and other effects of seasonality on the business, its results of operations may suffer.Increased customer concentration and related credit and commercial risks may adversely impact the Company's results of operations, financial conditionand cash flows.For the year ended December 31, 2016, the Company’s top five customers in the Harsco Metals & Minerals Segment accounted for approximately 34% ofrevenues in that segment and 23% of the Company’s total revenues.Certain of the several large customers in the Harsco Metals & Minerals Segment have significant accounts receivable balances. If a large customer were toexperience financial difficulty, or file for bankruptcy or receivership protection it could adversely impact the Company's results of operations, cash flows andasset valuations.Disputes with our largest customers, or customers with long-term contracts, could adversely affect the Company’s financial condition.The Company routinely enters into multiple contracts with its customers, many of which can be long-term contracts. For example, the Company is currentlyparty to multiple contracts in numerous countries with its largest customer, ArcelorMittal, which accounted for almost 10% of its total revenues for the yearended December 31, 2016. These contracts cover a variety of services and vary in contract length. From time to time, the Company may be negotiating theterms of current and potential future services to be rendered due to the scope and complexity of this relationship. Disagreements between the parties can ariseas a result of the scope and nature of the relationship and these ongoing negotiations.In addition, under long-term contracts, the Company may incur capital expenditures or other costs at the beginning of the contract that it expects to recoupthrough the life of the contract. Some of these contracts provide for advance payments to assist the Company in covering these costs and expenses. A disputewith a customer during the life of a long-term contract could impact the ability of the Company to receive these advance payments or otherwise recoupincurred costs and expenses.The Company's global presence subjects it to a variety of risks arising from doing business internationally.The Company operates in approximately 30 countries, generating 58% of its revenues outside of the U.S. (based on location of the facility generating therevenue) for the year ended December 31, 2016. In addition, as of December 31, 2016, approximately 75% of the Company’s property, plant and equipmentare located outside of the U.S. The Company's global6 Table of Contentsfootprint exposes it to a variety of risks that may adversely affect the Company's results of operations, financial condition, liquidity and cash flows. Theseinclude, but may not be limited to, the following:•periodic economic downturns in the countries in which the Company does business;•imposition of or increases in currency exchange controls and hard currency shortages;•customs matters and changes in trade policy or tariff regulations;•changes in regulatory requirements in the countries in which the Company does business;•changes in tax regulations, higher tax rates in certain jurisdictions and potentially adverse tax consequences including restrictions on repatriatingearnings, adverse tax withholding requirements and "double taxation;"•longer payment cycles and difficulty in collecting accounts receivable;•complexities in complying with a variety of U.S. and foreign government laws, controls and regulations;•political, economic and social instability, civil and political unrest, terrorist actions and armed hostilities in the regions or countries in which theCompany does business;•inflation rates in the countries in which the Company does business;•complying with complex labor laws in foreign jurisdictions;•laws in various international jurisdictions that limit the right and ability of subsidiaries to pay dividends and remit earnings to affiliated companiesunless specified conditions are met;•sovereign risk related to international governments, including, but may not be limited to, governments stopping interest payments or repudiatingtheir debt, nationalizing private businesses or altering foreign exchange regulations; and•uncertainties arising from local business practices, cultural considerations and international political and trade tensions.The Company has operations in several countries in the Middle East, including Bahrain, Egypt, Israel, Saudi Arabia and Oman, as well as India, some ofwhich have experienced armed hostilities and civil unrest. Additionally, these countries are geographically close to other countries that may have acontinued high risk of armed hostilities or civil unrest.If the Company is unable to successfully manage the risks associated with its global business, the Company's results of operations, financial condition,liquidity and cash flows may be negatively impacted.The Board of Directors (the "Board") has determined to explore strategic options for the separation of the Company’s Metals & Minerals Segment;however there can be no assurance that the Company will be successful in entering into or consummating a transaction or that any such transaction willyield additional value for stockholders.During 2015, the Company announced that the Board had authorized a process to explore a range of strategic options for the separation of the Company’sHarsco Metals & Minerals Segment from the Harsco Industrial and Rail Segments. There can be no assurances that any such process will result in a sale, spin-off or any other transaction being entered into or consummated. The process may be time-consuming, distracting to management and disruptive to theCompany's business operations, and if the Company is unable to effectively manage the process, the business, financial condition, and results of operationscould be adversely affected. In addition, identifying and evaluating potential strategic options may result in the incurrence of additional expenses.Any strategic decision will involve risks and uncertainties, and the Company cannot guarantee that any potential transaction or other strategic option, ifidentified, evaluated and consummated, will provide greater value to the Company's stockholders than that reflected in the current stock price. Any potentialtransaction would be dependent upon a number of factors that may be beyond the Company's control, including, among other factors, market conditions,industry trends and the interest of third parties in the Harsco Metals & Minerals Segment. The Company has not set a specific timetable for completion of this process and does not intend to discuss or disclose developments with respect to theprocess unless and until such time as the Board has approved a definitive course of action or otherwise deems disclosure to be required or appropriate. As aconsequence, perceived uncertainties related to the future of the Company’s Harsco Metals & Minerals Segment may result in the loss of potential businessopportunities and may make it more difficult for the Company to attract and retain qualified personnel and business partners.Due to the international nature of the Company's business, the Company could be adversely affected by violations of certain laws.The U.S. Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in non-U.S. jurisdictions generally prohibit companies and their intermediariesfrom making improper payments to officials for the purpose of obtaining or retaining business. The FCPA also imposes accounting standards andrequirements on publicly traded U.S. corporations and their foreign affiliates, which, among other things, are intended to prevent the diversion of corporatefunds to the payment of bribes and other improper payments, and to prevent the establishment of “off the books” slush funds from which improper payments7 Table of Contentscan be made. The Company may not always prevent reckless or criminal acts by its employees or agents and may be exposed to liability due to pre-acquisition conduct of employees or agents of businesses or operations the Company may acquire. Violations of these laws, or allegations of such violations,could disrupt the Company’s operations, involve significant management distraction and have a material adverse effect on the Company’s results ofoperations, financial condition and cash flows. If the Company is found to be liable for violations of these laws (either due to its own acts, out of inadvertenceor due to the acts or inadvertence of others), the Company could also be subject to severe criminal or civil penalties or other sanctions; disgorgement; furtherchanges or enhancements to its procedures, policies and controls; personnel changes and other remedial actions.Furthermore, the Company is subject to the export controls and economic embargo rules and regulations of the U.S., including the Export AdministrationRegulations and trade sanctions against embargoed countries, which are administered by the Office of Foreign Asset Control within the Department ofTreasury, as well as other laws and regulations administered by the Department of Commerce. These regulations limit the Company’s ability to market, sell,distribute or otherwise transfer its products to prohibited countries or persons. Failure to comply with these rules and regulations may result in substantialcivil and criminal penalties, including fines and disgorgement of profits, the imposition of a court-appointed monitor, the denial of export privileges anddebarment from participation in U.S. Government contracts.Exchange rate fluctuations may adversely impact the Company's business.Fluctuations in foreign exchange rates between the U.S. dollar and the approximately 25 other currencies in which the Company currently conducts businessmay adversely impact the Company's results of operations in any given fiscal period. The Company’s principal foreign currency exposures are in theEuropean Union ("EU"), the U.K. and Brazil. Given the structure of the Company's operations, an increase in the value of the U.S. dollar relative to the foreigncurrencies in which the Company earns its revenues generally has a negative impact on the translated amounts of the assets and liabilities, results ofoperations, and cash flows. The Company's foreign currency exposures increase the risk of volatility in its financial position, results of operations and cashflows. If currencies in the below regions change materially in relation to the U.S. dollar, the Company's financial position, results of operations, or cash flowsmay be materially affected.Compared with the corresponding full-year period in 2015, the average value of major currencies changed as follows in relation to the U.S. dollar during thefull-year 2016, impacting the Company's revenues and income:•British pound sterling weakened by 12%•euro weakened by less than 1%•Brazilian real weakened by 4%Compared with exchange rates at December 31, 2015, the value of major currencies at December 31, 2016 changed as follows:•British pound sterling weakened by 16%•euro weakened by 3%•Brazilian real strengthened by 22%To illustrate the effect of foreign exchange rate changes in certain key markets of the Company, in 2016 revenues would have been approximately 4% or $51million higher and operating income would have been approximately 5% or $3 million lower if the average exchange rates for 2015 were utilized. In asimilar comparison for 2015, revenues would have been approximately 10% or $170 million higher and operating income would have been approximately2% or $2 million greater if the average exchange rates for 2014 were utilized.Currency changes also result in assets and liabilities denominated in local currencies being translated into U.S. dollars at different amounts than at the priorperiod end. Generally, if the U.S. dollar weakens in relation to currencies in countries in which the Company does business, the translated amounts of therelated assets, liabilities, and therefore stockholders' equity, would increase. Conversely, if the U.S. dollar strengthens in relation to currencies in countries inwhich the Company does business, the translated amounts of the related assets, liabilities, and therefore stockholders' equity, would decrease.Although the Company engages in foreign currency exchange forward contracts and other hedging strategies to mitigate foreign exchange transactionalrisks, hedging strategies may not be successful or may fail to completely offset these risks. In addition, competitive conditions in the Company'smanufacturing businesses may limit the Company's ability to increase product prices in the face of adverse currency movement. Sales of productsmanufactured in the U.S. for the domestic and export markets may be affected by the value of the U.S. dollar relative to other currencies. Any long-termstrengthening of the U.S. dollar could depress demand for these products and reduce sales. Conversely, any long-term weakening of the U.S. dollar couldimprove demand for these products and increase sales.8 Table of ContentsEconomic conditions and regulatory changes following the United Kingdom’s referendum on withdrawal from the EU could impact on our business andresults of operations.In June 2016, a majority of voters in the U.K. approved a withdrawal from the EU in a national referendum (often referred to as Brexit). The referendum wasadvisory, and the terms of any withdrawal are subject to a negotiation period that could last at least two years after the government of the U.K. formallyinitiates a withdrawal process. Nevertheless, the referendum resulted in significant volatility in global stock markets and currency exchange rate fluctuationsthat resulted in the strengthening of the U.S. dollar against foreign currencies in which the Company conducts business. The referendum has createdsignificant uncertainty about the future relationship between the U.K. and the EU, including with respect to the laws and regulations that will apply as theU.K. determines which EU laws to replace or replicate in the event of a withdrawal. The referendum has also given rise to calls for the governments of otherEU member states to consider withdrawal.Our business, particularly the Company's Harsco Metals & Minerals Segment, whose headquarters is in the U.K., could be adversely impacted by the likelyexit of the U.K. from the EU. Adverse consequences such as deterioration in economic conditions and volatility in currency exchange rates could have anegative impact on our operations, financial condition and results of operations. In addition, incremental regulatory controls and regulations governing tradebetween the U.K. and the rest of the EU could have adverse consequences on the steel industry in the U.K. and/or the EU, and could negatively impact ouroperations and financial condition.The Company may lose customers or be required to reduce prices as a result of competition.The industries in which the Company operates are highly competitive:•The Harsco Metals & Minerals Segment is sustained mainly through contract renewals and new contract signings. The Company may be unable torenew contracts at historical price levels or to obtain additional contracts at historical rates as a result of competition. If the Company is unable torenew its contracts at the historical rates or renewals are made at reduced prices, or if its customers terminate their contracts, revenue and results ofoperations may decline.•The Harsco Industrial and Harsco Rail Segments compete with companies that manufacture similar products both internationally and domestically.Certain international competitors export their products into the U.S. and sell them at lower prices, which can be the result of lower labor costs andgovernment subsidies for exports. In addition, certain competitors may from time to time sell their products below their cost of production in anattempt to increase their market share. Such practices may limit the prices the Company can charge for its products and services. Unfavorable foreignexchange rates can also adversely impact the Company's ability to match the prices charged by international competitors. If the Company is unableto match the prices charged by competitors, it may lose customers.Restrictions imposed by the Company's credit facility and other financing arrangements may limit the Company's operating and financial flexibility.The agreements governing the Company's outstanding financing arrangements impose a number of restrictions. Under the Company's Senior Secured CreditFacility, the Company must comply with certain financial covenants on a quarterly basis. The covenants also place limitations on dividends, acquisitions,investments in joint ventures, unrestricted subsidiaries, indebtedness and the imposition of liens on the Company's assets. In the event of a default, theCompany's lenders and the counterparties to the Company's other financing arrangements could terminate their commitments to the Company and declare allamounts borrowed, together with accrued interests and fees, immediately due and payable. If this were to occur, the Company might not be able to pay theseamounts, or the Company might be forced to seek an amendment to the Company's financing arrangements which could make the terms of thesearrangements more onerous for the Company. In addition, this could also trigger an event of default under the cross-default provisions of the Company's otherobligations. As a result, a default under one or more of the existing or future financing arrangements could have significant consequences for the Company.The Company is exposed to counterparty risk in its derivative financial arrangements.The Company uses derivative financial instruments, such as interest rate swaps and foreign currency exchange forward contracts, for a variety of purposes.The Company uses interest rate swaps in conjunction with certain debt issuances in order to secure either a fixed or floating interest rate. The Company usesforeign currency exchange forward contracts as part of a worldwide program to minimize foreign currency operating income and balance sheet exposure. Inparticular, the Company uses foreign currency exchange forward contracts to hedge commitments, such as foreign currency debt, firm purchase commitmentsand foreign currency cash flows for certain export sales transactions. The unsecured contracts for foreign currency exchange forward contracts outstanding atDecember 31, 2016 mature at various times through 2018 and are with major financial institutions. The Company may also enter into derivative contracts tohedge commodity exposures.The failure of one or more counterparties to the Company's derivative financial instruments to fulfill their obligations could adversely affect the Company'sresults of operations, financial condition, liquidity and cash flows.9 Table of ContentsThe Company’s variable rate indebtedness subjects it to interest rate risk, which could cause the Company's debt service obligations to increasesignificantly.The Company's total debt at December 31, 2016 was $659.1 million. Of this amount, approximately 96% had variable rates of interest, and 4% had fixed ratesof interest. The weighted average interest rate of total debt was approximately 5.9%. At debt levels as of December 31, 2016, a one percentage point increasein variable interest rates would increase interest expense by $5.5 million per year. If the Company is unable to successfully manage its exposure to variableinterest rates, including through interest rates swaps that the Company has put into place, its debt service obligations may increase even though the amountborrowed remains the same, and in turn, its results of operations and financial condition may be negatively impacted.Additionally, whenever the Company refinances fixed rate debt, the new interest rates may negatively impact the Company's results of operations. Theinterest rates associated with new fixed rate debt are impacted by several factors including, but not limited to, market conditions, term of the borrowings andthe financial results and currency.The Company is subject to taxes in numerous jurisdictions. Legislative, regulatory and legal developments involving income taxes could materiallyadversely affect the Company’s results of operations and cash flows and impact the Company’s ability to compete abroad.The Company is subject to U.S. federal, U.S. state and international income, payroll, property, sales and use, value-added, fuel and other types of taxes innumerous jurisdictions. Significant judgment is required in determining the Company's worldwide provisions for income taxes. Changes in tax rates,enactments of new tax laws, revisions of tax regulations, and claims or litigation with taxing authorities could result in substantially higher taxes, andtherefore, could have a significant adverse effect on the Company's results of operations, financial condition and liquidity.Currently, a majority of the Company's revenue is generated from customers located outside the U.S., and a substantial portion of the Company's assets andemployees are located internationally. U.S. income tax and withholding taxes have not been provided on undistributed earnings for certain non-U.S.subsidiaries, as such earnings are indefinitely reinvested in the operations of those subsidiaries.The Executive Branch of the U.S. Government (the “Administration”) has expressed a desire to reform U.S. tax law to provide incentives for U.S. companiesthat expand the U.S. economy. These reforms include lowering the Corporate Tax Rate in an effort to stimulate the economy with significant GDP growth bycreating new jobs in the U.S. The Administration has proposed significant changes on the taxation of imports and exports as well as the taxation of incomeearned outside the U.S. In addition, there would be a change from a worldwide based tax system to a territorial tax system. The Company continues tomonitor legislation to be in position to fully understand the potential impact on the Company's operations and plan accordingly.The Company's defined benefit net periodic pension cost ("NPPC") is directly affected by the equity and bond markets. A downward trend in those marketscould adversely impact the Company's results of operations, financial condition and cash flows.In addition to the economic issues that directly affect the Company's businesses, changes in the performance of equity and bond markets, particularly in theU.K. and the U.S., impact actuarial assumptions used in determining annual NPPC, pension liabilities and the valuation of the assets in the Company'sdefined benefit pension plans. Financial market deterioration would most likely have a negative impact on the Company's NPPC and the pension assets andliabilities. This could result in a decrease to stockholders' equity and an increase in the Company's statutory funding requirements.In addition to the Company's defined benefit pension plans, the Company also participates in several multiemployer pension plans ("MEPPs") throughout theworld. Within the U.S., the Pension Protection Act of 2006 may require additional funding for MEPPs that could cause the Company to be subject to highercash contributions in the future. Additionally, market conditions and the number of participating employers remaining in each plan may affect the fundedstatus of MEPPs and consequently, any Company withdrawal liability, if applicable.A negative outcome on personal injury claims against the Company may adversely impact results of operations and financial condition.The Company has been named as one of many defendants (approximately 90 or more in most cases) in legal actions alleging personal injury from exposure toairborne asbestos over the past several decades. In their suits, the plaintiffs have named as defendants, among others, many manufacturers, distributors andinstallers of numerous types of equipment or products that allegedly contained asbestos. The majority of the asbestos complaints pending against theCompany have been filed in New York. Almost all of the New York complaints contain a standard claim for damages of $20 million or $25 million againstthe approximately 90 defendants, regardless of the individual plaintiff's alleged medical condition, and without specifically identifying any of theCompany’s products as the source of plaintiff's asbestos exposure. If the Company is found to be liable in any of these actions and the liability exceeds theCompany's insurance coverage, results of operations, cash flows and financial condition could be adversely affected.10 Table of ContentsThe nature of the Company’s products creates the possibility of significant product liability and warranty claims, which could harm its business.The Company’s customers use some of its products in potentially hazardous applications that can cause injury or loss of life and damage to property,equipment or the environment. In addition, the Company’s products are integral to the production process for some end-users and any failure of theCompany’s products could result in a suspension of operations. Accidents may occur at a location where the Company’s equipment and services have been orare being used. Investigations into such accidents, even if the Company and its products are ultimately found not to be the cause of such accidents, requirethe Company to expend significant time, effort and resources. The Company cannot be certain that its products will be completely free from defects. TheCompany may be named as a defendant in product liability or other lawsuits asserting potentially large claims. In addition, the Company cannot guaranteethat insurance will be available or adequate to cover any or all liabilities incurred. The Company also may not be able to maintain insurance in the future atlevels it believes are necessary and at rates it considers reasonable.Higher than expected claims under insurance policies, under which the Company retains a portion of the risk, could adversely impact results of operationsand cash flows.The Company retains a significant portion of the risk for property, workers' compensation, U.K. employers' liability, automobile and general and productliability losses. Reserves have been recorded that 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 topotential value, and current legal and legislative trends. If actual claims are higher than those projected by management, an increase to the Company'sinsurance reserves may be required and would be recorded as a charge to income in the period the need for the change was determined.Increases or decreases in purchase prices (or selling prices) or availability of steel or other materials and commodities may affect the Company'sprofitability.The profitability of the Company's manufactured products is affected by changing purchase prices of raw material, including steel and other materials andcommodities. If raw material costs associated with the Company's manufactured products increase and the costs cannot be transferred to the Company'scustomers, results of operations would be adversely affected. Additionally, decreased availability of steel or other materials could affect the Company'sability to produce manufactured products in a timely manner. If the Company cannot obtain the necessary raw materials for its manufactured products, thenrevenues, results of operations and cash flows could be adversely affected.Certain services performed by the Harsco Metals & Minerals Segment result in the recovery, processing and sale of recovered metals and minerals and otherhigh-value metal by-products to its customers. The selling price of the by-products material is market-based and varies based upon the current fair value of itscomponents. Therefore, the revenue amounts generated from the sale of such by-products material vary based upon the fair value of the commoditycomponents being sold.The success of the Company's strategic ventures depends on the satisfactory performance by strategic venture partners of their strategic ventureobligations.The Company enters into various strategic ventures as part of its strategic growth initiatives as well as to comply with local laws. Differences in opinions orviews between strategic venture partners can result in delayed decision-making or failure to agree on material issues which could adversely affect thebusiness and operations of the venture. From time to time in order to establish or preserve a relationship, or to better ensure venture success, the Companymay accept risks or responsibilities for the strategic venture that are not necessarily proportionate with the reward it expects to receive. The success of theseand other strategic ventures also depends, in large part, on the satisfactory performance by the Company's strategic venture partners of their strategic ventureobligations, including their obligation to commit working capital, equity or credit support as required by the strategic venture and to support theirindemnification and other contractual obligations.If the Company's strategic venture partners fail to satisfactorily perform their strategic venture obligations as a result of financial or other difficulties, thestrategic venture may be unable to adequately perform or deliver its contracted services. Under these circumstances, the Company may be required to makeadditional investments and provide additional services to ensure the adequate performance and delivery of the contracted services. These additionalobligations could result in reduced profits or, in some cases, increased liabilities or significant losses for the Company with respect to the strategic venture. Inaddition, although the Company generally performs due diligence with regard to potential strategic partners or ventures, a failure by a strategic venturepartner to comply with applicable laws, rules or regulations could negatively impact its business and, in the case of government contracts, could result infines, penalties, suspension or even debarment. Unexpected strategic venture developments could have a material adverse effect on results of operations,financial condition and cash flows.11 Table of ContentsThe Company is subject to various environmental laws, and the success of existing or future environmental claims against it could adversely impact theCompany's results of operations and cash flows.The Company's operations are subject to various federal, state, local and international laws, regulations and ordinances relating to the protection of health,safety and the environment, including those governing discharges to air and water, handling and disposal practices for solid and hazardous wastes, theremediation of contaminated sites and the maintenance of a safe workplace. These laws impose penalties, fines and other sanctions for non-compliance andliability for response costs, property damages and personal injury resulting from past and current spills, disposals or other releases of, or exposure to,hazardous materials. The Company could incur substantial costs as a result of non-compliance with or liability for remediation or other costs or damagesunder these laws. The Company may be subject to more stringent environmental laws in the future, and compliance with more stringent environmentalrequirements may require the Company to make material expenditures or subject it to liabilities that the Company currently does not anticipate.The Company is currently involved in a number of environmental remediation investigations and cleanups and, along with other companies, has beenidentified as a "potentially responsible party" for certain waste disposal sites under the federal "Superfund" law. At several sites, the Company is currentlyconducting environmental remediation, and it is probable that the Company will agree to make payments toward funding certain other of these remediationactivities. It also is possible that some of these matters will be decided unfavorably to the Company and that other sites requiring remediation will beidentified. Each of these matters is subject to various uncertainties, and 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’s ongoing operations are subject to extensive laws, regulations, rules and ordinances relating to safety, health and environmental mattersthat impose significant costs and liabilities on the Company, and future laws and governmental standards could increase these costs and liabilities.The Company is subject to a variety of international, federal, state and local laws and governmental regulations, rules and ordinances regulating the use ofcertain materials contained in its products and/or used in its manufacturing processes. Many of these laws and governmental standards provide for extensiveobligations that require the Company to incur significant compliance costs, and impose substantial monetary fines and/or criminal sanctions for violations.Furthermore, such laws and standards are subject to change and may become more stringent. Although it is not possible to predict changes in laws or othergovernmental standards, the development, proposal or adoption of more stringent laws or governmental standards may require the Company to change itsmanufacturing processes, for example by reducing or eliminating use of the regulated component or material in its manufacturing process. The Company maynot be able to develop a new manufacturing process to comply with such legal and regulatory changes without investing significant time and resources, if atall. In addition, such legal and regulatory changes may also affect buying decisions by the users of the Company’s products that contain regulated materialsor that involve the use of such materials in the manufacturing process. If applicable laws and governmental standards become more stringent, the Company’sresults of operations, liquidity and financial condition could be materially adversely affected.The Company maintains a workforce based upon current and anticipated workload. If the Company does not receive future contract awards or if theseawards are delayed, significant cost may result that could have a material adverse effect on results of operations, financial condition, liquidity and cashflows.The Company's estimates of future performance depend on, among other matters, whether and when the Company will receive certain new contract awards,including the extent to which the Company utilizes its workforce. The rate at which the Company utilizes its workforce is impacted by a variety of factors,including:•the ability to manage attrition;•the ability to forecast the need for services, which allows the Company to maintain an appropriately sized workforce;•the ability to transition employees from completed projects to new projects or between segments; and•the need to devote resources to non-revenue generating activities such as training or business development.12 Table of ContentsWhile the Company's estimates are based upon its good faith judgment, these estimates can be unreliable and may frequently change based on newlyavailable information. In the case of large-scale domestic and international projects where timing is often uncertain, it is particularly difficult to predictwhether and when the Company will receive a contract award. The uncertainty of contract award timing can present difficulties in matching the Company'sworkforce size with contract needs. If an expected contract award is delayed or not received, the Company could incur cost resulting from reductions in staffor redundancy of facilities or equipment that could have a material adverse effect on results of operations, financial condition, liquidity and cash flows.Increased information technology security threats and more sophisticated computer crime pose a risk to the Company's systems, networks, products andservices.The Company relies upon information technology systems and networks in connection with a variety of business activities, some of which are managed bythird parties. Additionally, the Company collects and stores data that is of a sensitive nature. The secure operation of these information technology systemsand networks, and the processing and maintenance of this data is critical to the Company's business operations and strategy. Information technology securitythreats - from user error to attacks designed to gain unauthorized access to the Company's systems, networks and data - are increasing in frequency andsophistication. Attacks may range from random attempts to coordinated and targeted attacks, including sophisticated computer crime and advancedpersistent threats. These threats pose a risk to the security of the Company's systems and networks and the confidentiality, availability and integrity of theCompany's data. Should an attack on the Company's information technology systems and networks succeed, it could expose the Company and theCompany's employees, customers, dealers and suppliers to misuse of information or systems, the compromising of confidential information, manipulation anddestruction of data, production downtimes and operations disruptions. The occurrence of any of these events could adversely affect the Company'sreputation, competitive position, business, results of operations and cash flows. In addition, such breaches in security could result in litigation, regulatoryaction, potential liability and the costs and operational consequences of implementing further data protection measures.The Company's intellectual property portfolio may not prevent competitors from independently developing similar or duplicative products and services.The Company's patents and other intellectual property may not prevent competitors from independently developing or selling similar or duplicative productsand services, and there can be no assurance that the resources invested by the Company to protect the Company's intellectual property will be sufficient orthat the Company's intellectual property portfolio will adequately deter misappropriation or improper use of the Company's technology. The Company couldalso face competition in some countries where the Company has not invested in an intellectual property portfolio. The Company may also face attempts togain unauthorized access to the Company's information technology systems or products for the purpose of improperly acquiring trade secrets or confidentialbusiness information. The theft or unauthorized use or publication of the Company's trade secrets and other confidential business information as a result ofsuch an incident could adversely affect the Company's competitive position and the value of the Company's investment in research and development. TheCompany may be unable to secure or retain ownership or rights to use data in certain software analytics or services offerings. In addition, the Company maybe the target of aggressive and opportunistic enforcement of patents by third parties, including non-practicing entities. Regardless of the merit of such claims,responding to infringement claims can be expensive and time-consuming. If the Company is found to infringe any third-party rights, the Company could berequired to pay substantial damages or could be enjoined from offering some of the Company's products and services. Also, there can be no assurances thatthe Company will be able to obtain or renew from third parties the licenses needed in the future, and there is no assurance that such licenses can be obtainedon reasonable terms.Union disputes or other labor matters could adversely affect the Company's operations and financial results.A significant portion of the Company's employees are represented by labor unions in a number of countries under various collective bargaining agreementswith varying durations and expiration dates. There can be no assurance that any current or future issues with the Company's employees will be resolved orthat the Company will not encounter future strikes, work stoppages or other types of conflicts with labor unions or the Company's employees. The Companymay not be able to satisfactorily renegotiate collective bargaining agreements in the U.S. and other countries when they expire. If the Company fails torenegotiate existing collective bargaining agreements, the Company could encounter strikes or work stoppages or other types of conflicts with labor unions.In addition, existing collective bargaining agreements may not prevent a strike or work stoppage at the Company's facilities in the future. The Company mayalso be subject to general country strikes or work stoppages unrelated to the Company's business or collective bargaining agreements. A work stoppage orother limitations on production at the Company's facilities for any reason could have an adverse effect on the Company's business, results of operations,financial condition and cash flows. In addition, many of the Company's customers and suppliers have unionized work forces. Strikes or work stoppagesexperienced by the Company's customers or suppliers could have an adverse effect on the Company's business, results of operations and financial condition.13 Table of ContentsIf the Company cannot generate future cash flows at a level sufficient to recover the net book value of any reporting units, the Company may be required torecord an impairment charge to earnings.As a result of the Company's goodwill impairment testing, the Company may be required to record future impairment charges to the extent it cannot generatefuture cash flows at a level sufficient to recover the net book value of any of the Company's reporting units. The Company's estimates of fair value are basedon assumptions about the future operating cash flows and growth rates of each reporting unit and discount rates applied to these cash flows. Based on theuncertainty of future growth rates, restructuring savings, and other assumptions used to estimate goodwill recoverability, future reductions in the Company'sexpected cash flows could cause a material non-cash goodwill impairment charge, which could have a material adverse effect on the Company's results ofoperations and financial condition.Item 1B. Unresolved Staff Comments.None.Item 2. Properties.Operations of Harsco Corporation and its subsidiaries are conducted at both owned and leased properties in domestic and international locations. TheCompany's executive offices are located at 350 Poplar Church Road, Camp Hill, Pennsylvania 17011 and are owned. The following table describes thelocation and principal use of the Company's more significant properties.Location Principal Products InterestHarsco Metals & Minerals Segment Taiyuan City, China Minerals and Resource Recovery Technologies LeasedTangshan, China Minerals and Resource Recovery Technologies LeasedRotherham, UK Minerals and Resource Recovery Technologies OwnedDrakesboro, Kentucky, U.S. Roofing Granules/Abrasives OwnedSarver, Pennsylvania, U.S. Minerals and Resource Recovery Technologies OwnedHarsco Rail Segment Columbia, South Carolina, U.S. Rail Maintenance Equipment OwnedLudington, Michigan, U.S. Rail Maintenance Equipment OwnedHarsco Industrial Segment Broken Arrow, Oklahoma, U.S. Heat Exchangers LeasedEast Stroudsburg, Pennsylvania, U.S. Heat Transfer Products OwnedChannelview, Texas, U.S. Industrial Grating Products OwnedGarrett, Indiana, U.S. Industrial Grating Products LeasedLeeds, Alabama, U.S. Industrial Grating Products OwnedQueretaro, Mexico Industrial Grating Products OwnedThe Harsco Metals business, which is part of the Harsco Metals & Minerals Segment, principally operates on customer-owned sites and has administrativeoffices in Camp Hill, Pennsylvania, and Leatherhead, U.K. The above table includes the principal properties owned or leased by the Company. The Companyalso operates from a number of other smaller plants, warehouses and offices in addition to the above. The Company considers all of its properties at whichoperations are currently performed to be in satisfactory condition and suitable for their intended use.Item 3. Legal Proceedings.Information regarding legal proceedings is included in Note 12, in Part II, Item 8, "Financial Statements and Supplementary Data."Item 4. Mine Safety Disclosures.Not applicable.14 Table of ContentsSupplementary Item. Executive Officers of the RegistrantSet forth below, at February 24, 2017, are the executive officers of the Company and certain information with respect to each of them. There are no familyrelationships among any of the executive officers.Name Age Position with the CompanyExecutive Officers: F. Nicholas Grasberger, III 53 President and Chief Executive OfficerPeter F. Minan 55 Senior Vice President and Chief Financial OfficerScott H. Gerson 46 Senior Vice President and Group President - Harsco IndustrialJeswant Gill 54 Senior Vice President and Group President - Harsco RailRussell C. Hochman 52 Senior Vice President and General Counsel, Chief Compliance Officer & Corporate SecretaryTracey L. McKenzie 49 Senior Vice President and Chief Human Resources OfficerF. Nicholas Grasberger, III - President and Chief Executive Officer since August 1, 2014, and became a member of the Board of Directors on April 29, 2014.Served as Senior Vice President and Chief Financial Officer from April 2013 to November 2014, and President and Chief Operating Officer from April 2014 toAugust 2014. Prior to joining the Company, Mr. Grasberger was Managing Director of Fenner Plc’s Precision Polymer division from March 2011 to April2013. From April 2009 to November 2009 he served as Executive Vice President and Chief Executive Officer of Armstrong Building Products. From January2005 to March 2009 he served as Senior Vice President and Chief Financial Officer of Armstrong World Industries, Inc. Prior to his employment withArmstrong, Mr. Grasberger served as Vice President and Chief Financial Officer of Kennametal Inc. and before that as Corporate Treasurer and Director of thecorporate planning process at H.J. Heinz Company. He started his career with USX Corporation.Peter F. Minan - Senior Vice President and Chief Financial Officer since November 11, 2014. Mr. Minan has an extensive background in global financialmanagement acquired through a nearly 30-year career with KPMG from 1983 to 2012. He became a partner at KPMG in 1993 and served as global leadpartner for several multi-national Fortune 500 industrial and consumer audits. His roles included National Managing Partner, U.S. Audit practice, and Partnerin Charge, Washington/Baltimore Audit practice. His most recent role was with Computer Sciences Corporation, where he served as Vice President ofEnterprise Risk Management and Internal Audit from 2012 to 2013.Scott H. Gerson - Senior Vice President and Group President–Harsco Industrial since January 25, 2011. Served as Vice President and Group President– HarscoIndustrial and Chief Information Officer from July 2010 to January 2011. Served as Chief Information Officer from April 2005 to July 2010. Prior to joiningthe Company in April 2005, Mr. Gerson was with Kulicke & Soffa Industries, Inc., where he served as IT director of their worldwide application services. Hehas also served in IT management capacities with Compaq Computers and TRW Inc.Jeswant Gill - Senior Vice President and Group President - Harsco Rail since November 2016. Prior to joining the Company Mr. Gill served as SeniorExecutive/Managing Director, Global Solutions of The Arcadia Group International, LLC from October 2015 to November 2016. From June 2014 toSeptember 2015 Mr. Gill served as Vice President and Executive Vice President, Industrial Segment of Kennametal, Inc. From January 2008 to May 2014 Mr.Gill worked for Ingersoll Rand Company Limited, acting as Vice President of Global Services, Industrial Technologies from January 2011 to May 2014, andas President of Security Technologies, Asia Pacific from January 2008 until December 2010. Prior to his employment with Ingersoll Rand Company Limited,Mr. Gill worked for Invensys, Johnson Controls Inc. and Schlumberger. Mr. Gill holds a B.S. in engineering physics and an MBA, both from Queen'sUniversity in Ontario, Canada.Russell C. Hochman - Senior Vice President and General Counsel, Chief Compliance Officer and Corporate Secretary. Prior to joining the Company in 2013he served in senior legal roles with Pitney Bowes Inc. and leading law firms based in New York. He holds a J.D. from Albany Law School of Union Universityand a B.A. from Cornell University.Tracey L. McKenzie - Senior Vice President and Chief Human Resources Officer. Prior to joining Harsco in September 2014, Ms. McKenzie served as GlobalHR Vice President for JLG Industries, a leader in the manufacturing sector for advanced aerial lift systems. Ms. McKenzie previously held executive levelHR positions in her native Australia, and worked at Pacific Scientific Aerospace (a division of Danaher). She moved to the U.S. in 2003, and holds an MBAfrom the University of New England and a bachelor's in business administration from Royal Melbourne Institute of Technology (RMIT). 15 Table of ContentsPART IIItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Harsco Corporation common stock is listed on the New York Stock Exchange. At December 31, 2016, there were 80,174,963 shares outstanding. In 2016, theCompany's common stock traded in a range of $3.55 to $15.25 and closed at $13.60 at year-end. At December 31, 2016, there were approximately 19,100stockholders. The Company's Senior Secured Credit Facilities contain limitations on the payment of dividends. For additional information regarding HarscoCorporation's common stock market price and dividends declared, see Dividend Action, in Part II, Item 7, "Management's Discussion and Analysis ofFinancial Condition and Results of Operations," and Common Stock Price and Dividend Information, in Part II, Item 8, "Financial Statements andSupplementary Data." For additional information regarding the Company's equity compensation plans see Note 14, Stock-Based Compensation, in Part II,Item 8, "Financial Statements and Supplementary Data," and Part III, Item 11, "Executive Compensation." For additional information regarding theCompany's limitations on the payment of dividends, see Liquidity and Capital Resources, in Part II, Item 7, "Management's Discussion and Analysis ofFinancial Condition and Results of Operations" and Note 8, Debt and Credit Agreements, in Part II, Item 8, "Financial Statements and Supplementary Data."Stock Performance Graph*$100 invested on 12/31/11 in stock or index, including reinvestment of dividends. Fiscal year ending December31.Copyright© 2017 Standard & Poor's, a division of S&P Global. All rights reserved.Copyright© 2017 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. 12/1112/1212/1312/1412/1512/16Harsco Corporation100.00118.75146.42102.2145.2178.67S&P Midcap 400100.00117.88157.37172.74168.98204.03Dow Jones U.S. Diversified Industrials100.00120.81171.71173.51195.79217.2416 Table of ContentsItem 6. Selected Financial Data.Five-Year Statistical Summary(In thousands, except per share,employee information and percentages) 2016 2015 2014 2013 (a) 2012 Statement of operations information Revenues from continuingoperations $1,451,223 $1,723,092 $2,066,288 $2,895,970 $3,046,018 Amounts attributable to Harsco Corporation common stockholders Income (loss) from continuingoperations $(86,336) $7,168 $(22,281) $(231,356) $(258,889) Income (loss) from discontinuedoperations 669 (980) 110 (1,492) (919) Net income (loss) (85,667) 6,188 (22,171) (232,848) (259,808) Financial position and cash flow information Working capital $149,736 $158,399 $117,919 $229,599 $431,594 Total assets (b) 1,581,386 2,061,197 2,266,946 2,443,208 2,975,231 Long-term debt (b) 629,239 845,621 827,428 779,849 953,121 Total debt (b) 659,072 900,934 869,364 807,595 964,959 Depreciation and amortization 141,486 156,475 176,326 237,041 272,117 Capital expenditures (69,340) (123,552) (208,859) (245,551) (264,738) Cash provided by operatingactivities 159,785 121,507 226,727 187,659 198,594 Cash provided (used) by investingactivities 122,887 (130,373) (229,561) 63,281 (218,983) Cash provided (used) by financingactivities (292,273) 22,454 (21,794) (248,664) (4,546) Ratios Return on average equity (c) 29.5% 2.3% (4.0)% (30.0)% (22.2)% Current ratio (d) 1.3:1 1.3:1 1.2:1 1.4:1 1.7:1 Per share information attributable to Harsco Corporation common stockholders Basic—Income (loss) fromcontinuing operations $(1.07) $0.09 $(0.28) $(2.86) $(3.21) Income (loss) fromdiscontinued operations 0.01 (0.01) — (0.02) (0.01) Net income (loss) $(1.07)(e)$0.08 $(0.27)(e)$(2.88) $(3.22) Diluted—Income (loss) fromcontinuing operations $(1.07) $0.09 $(0.28) $(2.86) $(3.21) Income (loss) fromdiscontinued operations 0.01 (0.01) — (0.02) (0.01) Net income (loss) $(1.07)(e)$0.08 $(0.27)(e)$(2.88) $(3.22) Other information Book value per share (f) $1.72 $3.88 $4.36 $7.41 $10.64 Cash dividends declared per share — 0.666 0.820 0.820 0.820 Diluted weighted-average numberof shares outstanding 80,333 80,365 80,884 80,755 80,632 Number of employees 9,400 10,800 12,200 12,300 18,500 (a)Includes impacts of the Infrastructure Transaction consummated on November 26, 2013.(b)On January 1, 2016, the Company adopted changes issued by the Financial Accounting Standards Board related to simplifying the presentation of debt issuance costs. Thechanges required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debtliability. The Company reclassified debt issuance costs in the amount of $10.1 million, $2.3 million, $3.3 million and $4.3 million at December 31, 2015, 2014, 2013 and 2012,respectively.(c)Return on average equity is calculated by dividing income (loss) from continuing operations by average Harsco Corporation stockholders' equity throughout the year.(d)Current ratio is calculated by dividing total current assets by total current liabilities.(e)Does not total due to rounding.(f)Book value per share is calculated by dividing total equity by shares outstanding.17 Table of ContentsItem 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.The following discussion should be read in conjunction with the Consolidated Financial Statements of Harsco Corporation (the "Company") provided underPart II, Item 8, "Financial Statements and Supplementary Data," of this Annual Report on Form 10-K.Amounts included in this Item 7 of this Annual Report on Form 10-K are rounded in millions and all percentages are calculated based on actual amounts. Asa result, minor differences may exist due to rounding.Forward-Looking StatementsThe nature of the Company's business and the many countries in which it operates subject it to changing economic, competitive, regulatory andtechnological conditions, risks and uncertainties. In accordance with the "safe harbor" provisions of Section 27A of the Securities Act of 1933 and Section21E of the Securities Exchange Act of 1934, the Company provides the following cautionary remarks regarding important factors that, among others, couldcause future results to differ materially from the results contemplated by forward-looking statements, including the expectations and assumptions expressedor implied herein. Forward-looking statements contained herein could include, among other things, statements about management's confidence in andstrategies 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," "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 general economic conditions; (2) changes in currencyexchange rates, interest rates, commodity and fuel costs and capital costs;(3) changes in the performance of equity and bond markets that could affect, amongother things, the valuation of the assets in the Company's pension plans and the accounting for pension assets, liabilities and expenses; (4) changes ingovernmental laws and regulations, including environmental, occupational health and safety, tax and import tariff standards; (5) market and competitivechanges, including pricing pressures, market demand and acceptance for new products, services and technologies; (6) the Company's inability or failure toprotect its intellectual property rights from infringement in one or more of the many countries in which the Company operates; (7) failure to effectivelyprevent, detect or recover from breaches in the Company's cybersecurity infrastructure; (8) unforeseen business disruptions in one or more of the manycountries 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'sbusiness; (11) the Company's ability to successfully enter into new contracts and complete new acquisitions or strategic ventures in the time-framecontemplated, or at all; (12) the integration of the Company's strategic acquisitions; (13) the amount and timing of repurchases of the Company's commonstock, if any; (14) the prolonged recovery in global financial and credit markets and economic conditions generally, which could result in the Company'scustomers curtailing development projects, construction, production and capital expenditures, which, in turn, could reduce the demand for the Company'sproducts and services and, accordingly, the Company's revenues, margins and profitability; (15) the outcome of any disputes with customers, contractors andsubcontractors; (16) the financial condition of the Company's customers, including the ability of customers (especially those that may be highly leveragedand those with inadequate liquidity) to maintain their credit availability; (17) the Company's ability to successfully implement and receive the expectedbenefits of cost-reduction and restructuring initiatives, including the achievement of expected cost savings in the expected time frame; (18) implementationof environmental remediation matters; (19) risk and uncertainty associated with intangible assets; (20) the impact of a transaction, if any, resulting from theCompany's determination to explore strategic options for the separation of the Harsco Metals & Minerals Segment; and (21) other risk factors listed from timeto time in the Company's SEC reports. A further discussion of these, along with other potential risk factors, can be found in Part I, Item 1A, "Risk Factors," ofthis Annual Report on Form 10-K. The Company cautions that these factors may not be exhaustive and that many of these factors are beyond the Company'sability to control or predict. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The Company undertakes noduty to update forward-looking statements except as may be required by law.18 Table of ContentsExecutive OverviewIn November 2016, the Company entered into a new senior secured credit facility (the “Senior Secured Credit Facility”), consisting of a $400 millionRevolving Credit Facility and a $550 million term loan B facility (the "Term Loan Facility"). Upon closing of the Senior Secured Credit Facility, theCompany amended and extended the existing Revolving Credit Facility, repaid the existing term loan A facility and redeemed, satisfied and discharged the5.75% Senior Notes due 2018 (the “Notes”) in accordance with the indenture governing the Notes. As a result, a charge of $35.3 million was recorded duringthe fourth quarter of 2016 consisting principally of the cost of early extinguishment of the Notes and the write-off of unamortized deferred financing costsassociated with the Company’s existing Financing Agreements and the Notes. See Note 8, Debt and Credit Agreements, in Part II, Item 8, "FinancialStatements and Supplementary Data" for additional information.In September 2016, the Company sold its remaining approximate 26% equity interest in Brand Energy & Infrastructure Services ("Brand"). In exchange forthe Company's interest, (i) the Company received $145 million in cash, net, and (ii) the requirement for the Company to fund certain obligations to Brandthrough 2018 were satisfied, the present value of which equaled $20.6 million. As a result of the sale, the Company’s obligation to make quarterly paymentsrelated to the unit adjustment liability under the terms of a limited partnership agreement that governed the operation of the strategic venture terminated. TheCompany recognized a loss on the sale of its equity interest in Brand in the amount of $43.5 million, which was recognized in Change in fair value to unitadjustment liability and loss on dilution and sale of equity method investment on the Consolidated Statement of Operations. See Note 5, Equity MethodInvestments, in Part II, Item 8, "Financial Statements and Supplementary Data" for additional information.Although steel markets have demonstrated some improvement, the Harsco Metals & Minerals Segment continued to be negatively impacted by lowercustomer steel production, weak commodity prices and site exits during 2016. These impacts have been offset by the savings and benefits achieved as part ofthe Harsco Metals & Minerals Segment's Improvement Plan ("Project Orion") including lower compensation costs and the impact of exited underperformingcontracts. During the fourth quarter of 2015, Project Orion was expanded with additional targeted workforce and operational savings of $20 million to $25million. The majority of these benefits were realized during 2016. See Note 19, Restructuring Programs, in Part II, Item 8, "Financial Statements andSupplementary Data" for additional information. Also, results for 2015 included costs incurred by the Harsco Metals & Minerals Segment related to a steelmill customer liquidation, salt cake disposal costs and charges associated with a subcontractor settlement which decreased operating income by $24.9million. The Company remains focused on achieving additional cost reductions and operational improvements to enhance returns for the Harsco Metals &Minerals Segment.The Harsco Rail Segment recorded estimated forward loss provision of $45.1 million during 2016 related to the Company's contracts with the federal railwaysystem of Switzerland ("SBB"). The estimated forward loss provision resulted from increased vendor costs, ongoing discussions with SBB, and increasedestimates for commissioning, certification and testing costs, as well as expected settlements with SBB. See Note 4, Accounts Receivable and Inventories, inPart II, Item 8, "Financial Statements and Supplementary Data" for additional information. Also, results for 2015 included a $10.9 million foreign exchangegain that was not repeated in 2016. Additionally, the Harsco Rail Segment continues to be impacted by continued weakness in the North American market.While energy markets have demonstrated some fundamental improvement, the Harsco Industrial Segment’s air-cooled heat exchangers and industrial gratingbusinesses will lag the market given the lead time for capital expenditures to formalize into new projects for customers in the upstream, midstream, anddownstream oil and gas markets served by the Company to be constrained. Accordingly, these factors are expected to impact revenue and operating incomeduring the first half of 2017 in the Harsco Industrial Segment.The Company has announced its intention to pursue strategic options for the separation of the Harsco Metals & Minerals Segment from the rest of theCompany. A separation of the Harsco Metals & Minerals Segment would allow each of the Company's businesses to benefit from dedicated capital structures;execute tailored and flexible strategic priorities; and optimize capital return policies consistent with each business's unique priorities. There is no specifictimetable related to this initiative and there can be no assurance that a sale, spin-off or any other transaction will take place. The Company incurred $3.3million and $9.9 million of expenses during 2016 and 2015, respectively, related to the separation, which are included as part of Corporate in the Company'ssegment results.19 Table of ContentsRevenues by Segment(Dollars in millions) 2016 2015 Change %Harsco Metals & Minerals $965.5 $1,106.2 $(140.6) (12.7)%Harsco Industrial 247.5 357.3 (109.7) (30.7)Harsco Rail 238.1 259.7 (21.6) (8.3)Total Revenues $1,451.2 $1,723.1 $(271.9) (15.8)%Revenues by Region(Dollars in millions) 2016 2015 Change %Western Europe $418.6 $488.7 $(70.0) (14.3)%North America 654.3 807.7 (153.3) (19.0)Latin America (a) 164.3 181.6 (17.3) (9.5)Asia-Pacific 136.9 153.7 (16.9) (11.0)Middle East and Africa 46.7 52.3 (5.6) (10.6)Eastern Europe 30.3 39.1 (8.8) (22.5)Total Revenues $1,451.2 $1,723.1 $(271.9) (15.8)%(a)Includes Mexico.Revenues for the Company totaled $1.5 billion and $1.7 billion for 2016 and 2015, respectively. The change is primarily related to the impact of price andvolume changes across all segments; exited contracts in the Harsco Metals & Minerals Segment; and the impacts of foreign currency translation. Foreigncurrency translation decreased revenues by $51.0 million for 2016 in comparison with the prior year.Operating Income and Operating Margins by Segment(Dollars in millions) 2016 2015 Change %Harsco Metals & Minerals $81.6 $26.3 $55.3 210.5 %Harsco Industrial 23.2 57.0 (33.8) (59.3)Harsco Rail (17.5) 50.9 (68.4) (134.4)Corporate (b) (23.8) (45.7) 21.8 47.8Total Operating Income $63.5 $88.5 $(25.1) (28.3)% 2016 2015Harsco Metals & Minerals 8.5 % 2.4%Harsco Industrial 9.4 16.0Harsco Rail (7.4) 19.6Consolidated Operating Margin 4.4 % 5.1%(b)Corporate includes $3.3 million and $9.9 million of expenses related to the potential Harsco Metals & Minerals Segment separation for twelve months ended December 31, 2016and 2015, respectively.Operating income from continuing operations for 2016 was $63.5 million compared with operating income from continuing operations of $88.5 million in2015. Foreign currency translation increased Operating income by $3.4 million for 2016 in comparison to prior year. Refer to the segment discussions belowfor information pertaining to factors positively affecting and negatively impacting operating income.Harsco Metals & Minerals Segment:Significant Impacts on Revenues (In millions) Revenues—2015 $1,106.2Net impact of new contracts and lost contracts (including exited underperforming contracts). (67.2)Impact of foreign currency translation. (43.4)Net impacts of price/volume changes, primarily attributable to volume changes. (30.1)Revenues—2016 $965.5Factors Positively Affecting Operating Income:•Incremental Project Orion restructuring benefits related to compensation savings of approximately $15 million during 2016, associated with the lastphase of Project Orion.•The effect of new contracts, exited underperforming contracts and lower maintenance, fuel and pension costs.20 Table of Contents•Increased volumes in the roofing granules and industrial abrasives business, due partly to favorable weather conditions during 2016.•Costs incurred by the Harsco Metals & Minerals Segment related to a steel mill customer liquidation, salt cake disposal costs, charges associatedwith a subcontractor settlement and additional site exit costs. These items decreased operating income by $30.8 million during 2015 and did notrepeat in 2016.•Foreign currency translation in 2016 positively affected operating income for this segment compared with the prior year.Factors Negatively Impacting Operating Income:•Decreased global steel production. Overall, steel production by customers under services contracts, including the impact of exited contracts,decreased by 10% for 2016 compared with the prior year. Excluding the impact of exited contracts, steel production by customers under servicescontracts decreased by 2% for 2016 compared with the prior year.•Decreased income attributable to the impact of lost contracts and reduced nickel prices and demand. Nickel prices decreased 20% during 2016compared with the prior year.•Severance costs resulting from a probable site exit decreased operating income by $5.1 million during 2016.Harsco Industrial Segment:Significant Impacts on Revenues (In millions) Revenues—2015 $357.3Net impacts of price/volume changes, primarily attributable to volume changes. (106.4)Impact of foreign currency translation. (3.4)Revenues—2016 $247.5Factors Positively Affecting Operating Income:•Operating income was aided by $9.1 million of lower selling, general and administrative costs in 2016 compared with the prior year.•The effect of delivering the Mexico City International Airport security fencing order in 2016.Factors Negatively Impacting Operating Income:•Lower overall volumes in the air-cooled heat exchangers business, resulting in decreased operating income during 2016. These lower volumes areprimarily attributable to lower energy prices which impacted capital spending by customers in the oil and natural gas industries served by theCompany.•Lower volumes and higher material costs in the industrial grating products business.•2015 included gains from sales of assets of $3.6 million which did not repeat during 2016.Harsco Rail Segment:Significant Impacts on Revenues (In millions) Revenues—2015 $259.7Net impact of price/volume changes, primarily attributable to volume changes. (17.4)Impact of foreign currency translation. (4.2)Revenues—2016 $238.1Factors Positively Affecting Operating Income (Loss):•Increased sales of international equipment, spare parts and safety equipment.•Operating income (loss) was aided by $1.4 million of lower selling, general and administrative costs in 2016 compared with the prior year.Factors Negatively Impacting Operating Income (Loss):•During 2016, the Harsco Rail Segment recorded an estimated forward loss provision of $45.1 million related to the Company's contracts with SBB.See Note 4, Accounts Receivable and Inventories, in Part II, Item 8, "Financial Statements and Supplementary Data" for additional information.•Foreign currency gain of $10.9 million recognized during 2015 which did not repeat in 2016.•Decreased volumes in North America and a less favorable mix of equipment sales decreased operating income (loss) during 2016 compared with theprior year.•Lower volumes and higher costs for contract services decreased operating income (loss) during 2016 compared with the prior year.21 Table of ContentsOutlook, Trends and StrategiesDespite uncertainties in the global economy, along with the persistent challenges of global steel production and related pricing, as well as low oil prices, theCompany believes it is positioned to execute actions through a disciplined focus on return-based capital allocations and business portfolio strategies. TheCompany believes these actions will enable it to generate returns above its cost of capital with a balanced business portfolio without endangering itsfinancial profile with unreasonable leverage.These business portfolio strategies will continue to focus on improving the performance of the Harsco Metals & Minerals Segment while pursuing selectgrowth opportunities as global steel markets recover. For the Harsco Rail and Harsco Industrial Segments, the Company will focus on disciplined growthorganically, and through acquisitions, that improve these businesses' competitive positions in core or adjacent markets. The Company will continue topursue cost-reduction and efficiency initiatives, including Continuous Improvement, which have significantly reduced, and are expected to continue toreduce, the Company's cost structure and further enhance its financial strength without diminishing its services and products capabilities. As part of theseinitiatives, the Company will continue to focus on maintaining an active, lean corporate center that optimizes corporate costs while continuing to developvalue added activities to support the Company.The Company's expansion into targeted growth markets; its diversity of services and products in industries that are fundamental to global growth; its long-term mill services and minerals supply contracts; its differentiated technologies and innovations; its return based capital allocations and business portfoliostrategies; and its focus on executing cost reduction and efficiency initiatives, help mitigate the Company's overall long-term exposure to changes in theeconomic outlook in any single economy or industry. However, deterioration of global economies and industries could still have an adverse impact on theCompany's results of operations, financial condition and cash flows.The following significant items, risks, trends and strategies are expected to affect the Company in 2017 and beyond:•The Company will focus on providing returns above its cost of capital for its stockholders by balancing its portfolio of businesses, and by executingits strategic and operational practices with reasonable amounts of financial leverage.•The Company will continue to build and develop strong core capabilities and maintain an active and lean corporate center that balances costs withvalue added services.•The Company will assess capital needs in the context of operational trends and strategic initiatives. Management will be selective and disciplined inallocating capital by rigorously analyzing projects and utilizing a return-based capital allocation process.•The Company expects its operational effective income tax rate to approximate 39% to 41% in 2017.•The potential consequences related to uncertainty surrounding the United Kingdom's proposed exit from the European Union may have an impacton the Company results of operations, cash flows and asset valuations in any period particularly in the Harsco Metals & Minerals Segment. See PartI, Item 1A, Risk Factors for additional information.Harsco Metals & Minerals Segment:•Steel markets demonstrated some pricing improvement during 2016 and the Company expects modest improvements in demand, the effect of newcontracts, the continued benefits achieved as part of Project Orion and additional improvement initiatives to positively affect operating income inthe near term in the Harsco Metals & Minerals Segment. These improvements will be partially offset by possible site exits and the anticipated impactof foreign currency translation.•In addition to the benefits and discipline that resulted from Project Orion, the Company will continue to focus on ensuring that forecasted profitsand other requirements for contracts meet certain established standards and deliver returns above its cost of capital. In connection with this focus, thepossibility exists that the Company may take strategic actions that result in exit costs and non-cash asset impairment charges that may have anadverse effect on the Company's results of operations and liquidity.•In February 2016, the Company announced a new 15-year contract with China's largest steel maker with anticipated revenues totalingapproximately $125 million over the life of the contract. In March 2016, the Company secured a contract extension for steel mill services inBelgium with projected revenues totaling more than $100 million. During the third quarter of 2016, the Company announced expanded serviceswith Chile's largest steelmaker and a new contract in Egypt with projected revenues totaling more than $40 million and $35 million, respectively. InNovember 2016, the Company announced a multi-year expansion of steel mill services at a North American customer with projected revenuestotaling more than $50 million. Additionally, the Company recently announced two multi-year contracts for steel mill services in China and Brazilwith projected revenues totaling more than $100 million.22 Table of Contents•As the Company has previously disclosed, over the past several years the Company has been in discussions with officials at the Supreme Council forEnvironment in Bahrain ("Bahrain Council") with regard to a processing by-product ("salt cakes") located at Hafeera. During 2015, the Companyrecorded a charge of $7.0 million, payable over five to seven years, related to the estimated cost of processing and disposal of the salt cakes. TheCompany's Bahrain operations are operated under a strategic venture for which its strategic venture partner has a 35% minority interest. TheCompany is awaiting final approval from the Bahrain Council regarding the proposed processing and disposal method. If the Bahrain Council doesnot approve the proposed method or mandates alternative solutions, the Company’s estimated liability could change, and such change could bematerial in any one period.•During 2016, one of the Company's customers announced its intention to conduct a strategic review of its steel making operations in Europe,including the possibility of strategic collaborations through a joint venture with another major steel maker. Depending on the outcome of anypotential transactions, there could be a material impact on the Company's results of operations, cash flows and asset valuations in any one period.•One of the Company's customers in Australia has begun the process of voluntary administration under Australian law, the purpose of which is tofocus on long-term solvency. The customer is continuing its operations during the voluntary administration proceedings. The Company hadapproximately $5 million of receivables with the customer prior to the start of the voluntary administration and continues to believe that theseamounts are collectible, because the Company is viewed as an important supplier, continues to provide services to the customer and continues tocollect on post-administration invoices timely. However the administration process is uncertain in nature and length. No additional creditors'meeting is scheduled at this time. As such, a loss on the pre-administration receivables is reasonably possible, and if there was a change in theCompany's view on collectability, there could be a charge against income in future periods. Moreover, if the site were to close, additional costs maybe incurred and asset valuations may be impacted, which may be significant in any one period.Harsco Industrial Segment:•While energy markets have demonstrated some fundamental improvement, the Harsco Industrial Segment’s air-cooled heat exchangers andindustrial grating businesses will lag the market given the lead time for capital expenditures to formalize into new projects for customers in theupstream, midstream, and downstream oil and gas markets served by the Company to be constrained. Accordingly, these factors are expected toimpact revenue and operating income during the first half of 2017 in the Harsco Industrial Segment.•The Company is committed to maintaining recent efficiency gains in the air-cooled heat exchangers and industrial grating products businesses andimplementing additional improvements in response to the recent industry and economic challenges.•The Company will continue to focus on product innovation and development to drive strategic growth in its businesses. During 2016, the Companyintroduced GrateGuardTM, a new fencing solution for first-line physical security in the Industrial grating business. Additionally, the Companyrecently announced the launch of an all-new capability for remote indoor boiler monitoring that can be downloaded directly to wireless and desktopdevices.•The Company will focus on growing the Harsco Industrial Segment through disciplined organic expansion and acquisitions that improvecompetitive positioning in core markets or adjacent markets.Harsco Rail Segment:•The global demand for railway maintenance-of-way equipment, parts and services continues to be generally positive, though the North Americanmarket is experiencing weakness due to reduced capital and operating spending by Class I railways. •During April 2016, the Company was awarded a multi-year rail grinding services contract extension in the U.K. with anticipated revenues of at least$38 million. During December 2016, the Company announced new sales of railway track grinders for use in contract rail grinding programsthroughout North America. Additionally, during January 2017, the Company announced a new order to equip the entire Denver, Colorado regionalrailway fleet with enhanced safety systems.•In prior years, the Company secured two contract awards with initial contract values totaling approximately $200 million from SBB. The majority ofdeliveries under these contracts are anticipated to occur during 2017 through 2020. The Harsco Rail Segment recorded estimated forward lossprovisions of $40.1 million and $5.0 million during the second and fourth quarters of 2016, respectively, which resulted from increased vendorcosts, ongoing discussions with SBB, and increased estimates for commissioning, certification and testing costs, as well as expected settlements withSBB. It is possible that the Company's overall estimate of costs to complete these contracts may increase which would result in an additionalestimated forward loss provision at such time. See Note 1, Summary of Significant Accounting Policies - Revenue Recognition, in Part II, Item 8,"Financial Statements and Supplementary Data" for additional information.•The Company will focus on growing the Harsco Rail Segment through disciplined organic expansion and acquisitions that improve competitivepositioning in core markets or adjacent markets.23 Table of ContentsResults of Operations(In millions, except per share information and percentages) 2016 2015 2014Total revenues $1,451.2 $1,723.1 $2,066.3Cost of services and products sold 1,170.5 1,356.4 1,643.9Selling, general and administrative expenses 200.4 242.1 284.7Research and development expenses 4.3 4.5 5.5Loss on disposal of the Harsco Infrastructure Segment and transaction costs — 1.0 5.1Other expenses 12.6 30.6 57.8Operating income from continuing operations 63.5 88.5 69.3Interest income 2.5 1.6 1.7Interest expense (51.6) (46.8) (47.1)Loss on early extinguishment of debt (35.3) — —Change in fair value to the unit adjustment liability and loss on dilution and sale ofequity method investment (58.5) (8.5) (9.7)Income tax expense from continuing operations (6.6) (27.7) (30.4)Equity in income (loss) of unconsolidated entities, net 5.7 0.2 (1.6)Income (loss) from continuing operations (80.4) 7.3 (17.8)Income (loss) from discontinued operations 0.7 (1.0) 0.1Net income (loss) (79.8) 6.3 (17.7)Total other comprehensive income (loss) (93.6) 13.9 (163.2)Total comprehensive income (loss) (173.4) 20.3 (180.9)Diluted income (loss) per common share from continuing operations attributable toHarsco Corporation common stockholders (1.07) 0.09 (0.28)Effective income tax rate for continuing operations (8.4)% 79.5% 214.8%Comparative Analysis of Consolidated ResultsTotal RevenuesRevenues for 2016 decreased $271.9 million or 16% from 2015. This decrease was attributable to the following significant items:Changes in Revenues - 2016 vs. 2015 (In millions) Net impacts of price/volume changes in the Harsco Industrial Segment, primarily attributable to volume changes. $(106.4)Net impact of new contracts and lost contracts (including exited underperforming contracts) in the Harsco Metals & Minerals Segment. (67.2)Impact of foreign currency translation. (51.0)Net impacts of price/volume changes in the Harsco Metals & Minerals Segment, primarily attributable to volume changes. (30.1)Net impacts of price/volume changes, primarily attributable to volume changes in the Harsco Rail Segment. (17.4)Other. 0.2Total change in revenues - 2016 vs. 2015 $(271.9)Revenues for 2015 decreased $343.2 million or 17% from 2014. This decrease was attributable to the following significant items:Changes in Revenues - 2015 vs. 2014 (In millions) Impact of foreign currency translation. $(170.1)Net impact of new contracts and lost contracts (including exited underperforming contracts) in the Harsco Metals & Minerals Segment. (72.2)Net impacts of price/volume changes in the Harsco Industrial Segment, primarily attributable to volume changes. (50.8)Net impacts of price/volume changes in the Harsco Metals & Minerals Segment, primarily attributable to volume changes. (38.1)Net impacts of price/volume changes, primarily attributable to volume changes in the Harsco Rail Segment, including the effect of theProtran and JK Rail acquisitions. (11.8)Other. (0.2)Total change in revenues - 2015 vs. 2014 $(343.2)24 Table of ContentsCost of Services and Products SoldCost of services and products sold for 2016 decreased $185.9 million or 14% from 2015. This decrease was attributable to the following significant items:Change in Cost of Services and Products Sold - 2016 vs. 2015 (In millions) Decreased costs due to changes in revenues (exclusive of the effects of foreign currency translation and fluctuations in commoditycosts included in selling prices). $(165.3)Impact of foreign currency translation. (47.2)Other. (18.5)Increased costs due to estimated forward loss provision in the Harsco Rail Segment (a). 45.1Total Change in Cost of Services and Products Sold 2016 vs. 2015 $(185.9)(a)See Note 4, Accounts Receivable and Inventories, in Part II, Item 8, "Financial Statements and Supplementary Data" for additional information.Cost of services and products sold for 2015 decreased $287.5 million or 17% from 2014. This decrease was attributable to the following significant items:Change in Cost of Services and Products Sold - 2015 vs. 2014 (In millions) Impact of foreign currency translation. $(151.5)Decreased costs due to changes in revenues (exclusive of the effects of foreign currency translation and fluctuations in commoditycosts included in selling prices). (124.4)Other. (11.6)Total Change in Cost of Services and Products Sold 2015 vs. 2014 $(287.5)Selling, General and Administrative ExpensesSelling, general and administrative expenses for 2016 decreased $41.7 million or 17% from 2015. This decrease was primarily related to the impact ofreduced bad debt expense in the Harsco Metals & Minerals Segment; decreased agent and broker commissions in the Harsco Industrial Segment due to lowervolume; and foreign currency translation. Additionally, results for 2016 were also impacted by lower pension expense, professional fees and compensationcosts associated with Project Orion in the Harsco Metals & Minerals Segment and travel costs.Selling, general and administrative expenses for 2015 decreased $42.6 million or 15% from 2014. This decrease was primarily related to the impact of lowercompensation costs associated with Project Orion in the Harsco Metals & Minerals Segment, foreign currency translation, lower professional fees, anddecreased agent and broker commissions in the Harsco Rail and Industrial Segments, partially offset by increased bad debt expense due principally to aHarsco Metals & Minerals Segment's steel mill customer liquidation.Loss on Disposal of the Harsco Infrastructure Segment and Transaction CostsThe Company recorded a loss on disposal of the Harsco Infrastructure Segment and related transaction costs of $1.0 million and $5.1 million during 2015 and2014, respectively. See Note 3, Acquisitions, in Part II, Item 8, "Financial Statements and Supplementary Data" for additional information.Other ExpensesThis income statement classification includes: certain foreign currency gains, net gains on disposal of non-core assets, employee termination benefit costsand costs to exit activities. Additional information on Other expenses is included in Note 17, Other Expenses, in Part II, Item 8, “Financial Statements andSupplementary Data." During 2016, 2015 and 2014, the Company recorded pre-tax Other expenses of $12.6 million, $30.6 million and $57.8 million,respectively. The major components of this income statement caption are as follows: Other (Income) Expenses(In thousands) 2016 2015 2014Net gains $(1,764) $(10,613) $(6,718)Employee termination benefits costs 10,777 14,914 19,120Other costs to exit activities 440 13,451 4,908Impaired asset write-downs 399 8,170 39,455Foreign currency gains related to Harsco Rail Segment advances on contracts — (10,940) —Harsco Metals & Minerals Segment separation costs 3,235 9,922 —Subcontractor settlement — 4,220 —Other expense (467) 1,449 1,059Total $12,620 $30,573 $57,82425 Table of ContentsInterest Expense2016 vs. 2015Interest expense in 2016 was $51.6 million, an increase of $4.8 million or 10% compared with 2015. The increase primarily relates to $1.1 million of deferredfinancing costs expensed by the Company during the third quarter of 2016 related to payments for the Term Loan Facility and increased interest ratesassociated with the Company's borrowings, as well as other financing costs partially offset by lower debt levels. See Note 8, Debt and Credit Agreements, inPart II, Item 8, "Financial Statements and Supplementary Data" for additional information.2015 vs. 2014Interest expense in 2015 was $46.8 million, a decrease of $0.3 million or 1% compared with 2014. There were no individually significant items related to thechange in this Statement of Operations caption.Loss on Early Extinguishment of DebtIn November 2016, the Company entered into a New Credit Facility, consisting of a $400 million revolving credit facility and a $550 million term loan Bfacility. Upon closing of the New Credit Facility, the Company has amended and extended the existing Revolving Credit Facility, repaid the existing TermLoan Facility and has redeemed, satisfied and discharged the Notes in accordance with the indenture governing the Notes. As a result, a charge of $35.3million was recorded during the fourth quarter of 2016 consisting principally of the cost of early extinguishment of the Notes and the write-off ofunamortized deferred financing costs associated with the Company's existing Senior Secured Credit Facilities and the Notes. See Note 8, Debt and CreditAgreements, in Part II, Item 8, "Financial Statements and Supplementary Data" for additional information.Change in Fair Value to the Unit Adjustment Liability and Loss on Dilution and Sale of Equity Method InvestmentThe Change in fair value to the unit adjustment liability and loss on dilution and sale of equity method investment during 2016 increased $50.0 millioncompared with 2015. The increase relates to the loss associated with Company's first quarter of 2016 election not to make the quarterly cash payments to theCompany's partner in the Infrastructure strategic venture for the remainder of 2016 and the Company's third quarter of 2016 sale of its remaining equityinterest in the Infrastructure strategic venture. See Note 5, Equity Method Investments and Note 15, Financial Instruments, in Part II, Item 8, "FinancialStatements and Supplementary Data" for additional information.Income Tax Expense from Continuing Operations2016 vs. 2015Income tax expense from continuing operations in 2016 was $6.6 million, a decrease of $21.0 million compared with 2015. The effective income tax raterelating to continued operations for 2016 was (8.4)% versus 79.5% for 2015. The decrease in income tax expense and the change in the effective income taxrate related to continuing operations was primarily due to the change in the mix in earnings between international jurisdictions and the non-recurring loss onearly extinguishment of debt. Additionally, there was no income tax benefit realized from the loss on the sale of the Company's equity interest in Brand, as avaluation allowance of $16.1 million was established to offset the deferred tax assets on the resulting capital loss carryforward. There was also no income taxbenefit realized from the estimated forward loss provisions related to the SBB contracts, as a valuation allowance of $13.5 million was established to offsetthe deferred tax assets on the resulting loss carryforward, because the Company determined that it is not more likely than not that these benefits will berealized in the future.2015 vs. 2014Income tax expense from continuing operations in 2015 was $27.7 million, a decrease of $2.7 million compared with 2014 and the effective income tax raterelating to continued operations for 2015 was 79.5% versus 214.8% for 2014. The decrease in income tax expense and the change in the effective income taxrate related to continuing operations was primarily due to a reduction in restructuring and asset impairment charges in the Harsco Metals & Minerals Segmentfor which no tax benefit was recorded.See Note 11, Income Taxes, in Part II, Item 8, “Financial Statements and Supplementary Data" for additional information.26 Table of ContentsTotal Other Comprehensive Income (Loss)2016 vs. 2015Total other comprehensive loss was $93.6 million in 2016, compared with total other comprehensive income of $13.9 million in 2015. The major drivers forthis change were pension liability adjustments and foreign currency translation adjustments. The pension liability adjustments were the result of lower globalweighted average discount rates, principally for the U.K. plan, which decreased from 3.9% to 3.1% during the year. This was partially offset by actual returnson plan assets that were higher than expected returns. Foreign currency translation adjustments were negatively impacted by the continued strengthening ofthe U.S. dollar.2015 vs. 2014Total other comprehensive income was $13.9 million in 2015, compared with total other comprehensive loss of $163.2 million in 2014. The major drivers forthis change were pension liability adjustments, partially offset by foreign currency translation adjustments. The pension liability adjustments were the resultof higher global weighted average discount rates that increased from 3.7% to 3.9% during the year, partially offset by actual returns on plan assets that wereless than the expected returns. Foreign currency translation adjustments were negatively impacted by the strengthening of the U.S. dollar against mostcurrencies.Liquidity and Capital ResourcesOverviewIn November 2016, the Company entered into a Senior Secured Credit Facility, consisting of a $400 million Revolving Credit Facility and a $550 millionTerm Loan Facility. Upon closing of the Senior Secured Credit Facility, the Company amended and extended the existing Revolving Credit Facility, repaidthe existing term loan A facility and redeemed, satisfied and discharged the Notes in accordance with the indenture governing the Notes. As a result, a chargeof $35.3 million was recorded during the fourth quarter of 2016 consisting principally of the cost of early extinguishment of the Notes and the write-off ofunamortized deferred financing costs associated with the Company’s existing Financing Agreements and the Notes, and is reflected in the financing activitiessection of the Consolidated Statements of Cash Flows as a reduction of long-term debt.The Company has sufficient financial liquidity and borrowing capacity to support the strategies within each of our businesses. The Company currentlyexpects operational and business needs to be met by cash provided by operations supplemented with borrowings from time to time due to historical patternsof seasonal cash flow and for the funding of various projects. The Company continues to assess its capital needs in the context of operational trends andstrategic initiatives.The Company continues to implement and perform capital efficiency initiatives to enhance liquidity and working capital efficiency. These initiatives haveincluded: prudent allocation of capital spending to those projects where the highest results can be achieved; optimization of worldwide cash positions;reductions in discretionary spending; frequent evaluation of customer and business-partner credit risk; and Continuous Improvement initiatives aimed atimproving the effective and efficient use of working capital, particularly in accounts receivable and inventories.During 2016, the Company generated $159.8 million in operating cash flow, an increase from the $121.5 million generated in 2015.In 2016, the Company invested $69.3 million in capital expenditures, mostly for the Harsco Metals & Minerals Segment, compared with $123.6 million in2015. The Company generated $9.3 million in cash flow from asset sales in 2016 compared with $26.0 million in 2015. Asset sales have been a normal partof the Company's business model, primarily for the Harsco Metals & Minerals Segment.In September 2016, the Company received approximately $145 million in cash, net, from the sale of its remaining 26% equity interest in Brand. In 2016, theCompany received proceeds from the termination of cross-currency interest rate swaps ("CCIRs") of $16.6 million compared with $75.1 million in 2015. TheCompany paid $4.1 million and $65.7 million in dividends to stockholders in 2016 and 2015, respectively. The Company has suspended the quarterlydividend to preserve financial flexibility. The Board of Directors (the "Board") will continue to evaluate the Company's dividend policy each quarter.The Company's net cash borrowings decreased by $261.2 million in 2016 principally due to the utilization of operating cash flows, proceeds from thetermination of CCIRs and proceeds from the sale of the Company's equity interest in Brand. The Company’s consolidated net debt to consolidated adjustedearnings before interest, tax, depreciation and amortization ("EBITDA") ratio, as defined by the Credit Agreement, was 2.3 to 1.0 at December 31, 2016.27 Table of ContentsCash RequirementsThe following summarizes the Company's expected future payments related to contractual obligations and commercial commitments at December 31, 2016:Contractual Obligations and Commercial Commitments at December 31, 2016 (a) Payments Due by Period(In millions) Total Less than1 year 1-3years 3-5years After 5yearsShort-term borrowings $4.3 $4.3 $— $— $—Long-term debt (including current maturitiesand capital leases) 673.4 25.6 16.1 109.2 522.5Projected interest payments on long-term debt(b) 237.6 37.9 72.4 70.1 57.2Pension obligations (c) 22.9 22.9 — — —Operating leases (non-cancellable) 57.5 12.5 16.6 11.5 16.9Purchase obligations (d) 123.1 93.9 23.6 5.6 —Cross-currency interest rate swaps (e) — — — — —Foreign currency exchange forward contracts(f) — — — — —Total contractual obligations (g) $1,118.8 $197.1 $128.7 $196.4 $596.6(a)See Note 8, Debt and Credit Agreements; Note 9, Operating Leases; Note 10, Employee Benefit Plans; Note 11, Income Taxes; and Note 15, Financial Instruments, in Part II,Item 8, "Financial Statements and Supplementary Data," for additional information on short-term borrowings and long-term debt (including capital leases); operating leases;employee benefit plans; income taxes; CCIRs and foreign currency exchange forward contracts, respectively.(b)The total projected interest payments on long-term debt are based upon borrowings, interest rates and foreign currency exchange rates at December 31, 2016. The interest rates onvariable-rate debt and the foreign currency exchange rates are subject to changes beyond the Company's control and may result in actual interest expense and payments differingfrom the amounts projected above.(c)Amounts represent expected employer contributions to defined benefit pension plans for the next year.(d)Purchase obligations represent legally binding obligations to purchase property, plant and equipment, inventory and other commitments made in the normal course of business tomeet operations requirements.(e)Due to the nature of these CCIRs, based on December 31, 2016 fair values there would be net cash received of $0.4 million comprised of cash payments of $2.3 million and cashreceipts of $2.7 million. Accordingly, no amounts are included in the above table. The CCIRs are recorded on the Consolidated Balance Sheets at fair value.(f)Amounts represent the fair value of the foreign currency exchange contracts outstanding at December 31, 2016. Due to the nature of these contracts, based on fair values atDecember 31, 2016 there will be net cash received of $1.4 million comprised of cash payments of $600.9 million and cash receipts of $602.3 million. Accordingly, no amountsare included in the above table. The foreign currency exchange contracts are recorded on the Consolidated Balance sheets at fair value.(g)At December 31, 2016, in addition to the above contractual obligations, the Company had $5.7 million of potential long-term tax liabilities, including interest and penalties,related to uncertain tax positions. Because of the high degree of uncertainty regarding the future cash flows associated with these potential long-term tax liabilities, the Company isunable to estimate the years in which settlement will occur with the respective taxing authorities.Off-Balance Sheet ArrangementsThe following table summarizes the Company's contingent commercial commitments at December 31, 2016. These amounts are not included on theConsolidated Balance Sheets since there are no current circumstances known to management indicating that the Company will be required to make paymentson these contingent commercial commitments.Commercial Commitments at December 31, 2016 Amount of Commercial Commitment Expiration Per Period(In millions) Total Less than1 Year 1-3Years 3-5Years Over 5Years IndefiniteExpirationStandby letters of credit $92.2 $89.8 $2.4 $— $— $—Guarantees 60.1 3.8 — 6.6 8.6 41.1Performance bonds 127.0 101.6 3.2 20.6 — 1.6Other commercialcommitments 11.1 — — — — 11.1Total commercialcommitments $290.4 $195.2 $5.6 $27.2 $8.6 $53.8Certain commercial commitments that are of a continuous nature do not have an expiration date and are therefore considered to be indefinite in nature. SeeNote 15, Financial Instruments, in Part II, Item 8, "Financial Statements and Supplementary Data," for additional information.28 Table of ContentsSources and Uses of CashThe Company’s principal sources of liquidity are cash provided by operations and borrowings under its Senior Secured Credit Facility, augmented by cashproceeds from asset sales. The primary drivers of the Company’s cash flow from operations are the Company’s revenues and income. Cash returns on capitalinvestments made in the prior years, for which limited cash is currently required, are a significant source of cash provided by operations. Depreciationexpense related to these investments is a non-cash charge. The Company plans to redeploy discretionary cash for potential growth opportunities, such as disciplined organic growth and higher-return service contractsopportunities for the Harsco Metals & Minerals Segment, and strategic investments or possible acquisitions in the Harsco Rail and Harsco IndustrialSegments that improve competitive positioning in core markets or adjacent markets.Resources Available for Cash Requirements for Operational and Growth InitiativesIn addition to utilizing cash provided by operations and cash proceeds from asset sales, the Company has bank credit facilities available throughout theworld. The Company also utilizes capital leases to finance the acquisition of certain equipment when appropriate, which allows the Company to minimizecapital expenditures. The Company expects to continue to utilize all these sources to meet future cash requirements for operations and growth initiatives.On December 2, 2015, the Company entered into (i) an amendment and restatement agreement and (ii) a second amended and restated credit agreement(together, the “Financing Agreements”). The Financing Agreements increased the Company's overall borrowing capacity from $500 million to $600 millionby (i) amending and restating the Company’s then existing credit agreement, (ii) establishing a term loan A facility in an initial aggregate principal amountof $250 million, by converting a portion of the outstanding balance under the then existing credit agreement on a dollar-for-dollar basis and (iii) reducing theRevolving Credit Facility limit to $350 million.During September 2016, the Company received approximately $145 million in cash, net, from its sale of its remaining 26% equity interest in theInfrastructure strategic venture. The Company used these proceeds to repay $85.0 million on the term loan A facility and $60.0 million on the RevolvingCredit Facility. Related to the repayment of the term loan A facility, the Company expensed $1.1 million of previously deferred financing costs.In November 2016, the Company entered into the Senior Secured Credit Facility. Upon closing of the Senior Secured Credit Facility, the Company amendedand extended the existing Revolving Credit Facility, repaid the existing term loan A facility and redeemed, satisfied and discharged the Notes in accordancewith the indenture governing the Notes.Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 87.5 to 200 basis points over the base rate or 187.5 to 300basis points over the adjusted London Interbank Offered Rate ("LIBOR") as defined in the credit agreement governing the Senior Secured Credit Facility (the"Credit Agreement"). Any principal amount outstanding under the Revolving Credit Facility is due and payable on the maturity of the Revolving CreditFacility. The Revolving Credit Facility matures on November 2, 2021.Borrowings under the Term Loan Facility bear interest at a rate per annum ranging from 375 to 400 basis points over the base rate or 475 to 500 basis pointsover the adjusted LIBOR rate, subject to a 1% floor, as defined in the Credit Agreement. The Term Loan Facility requires scheduled quarterly payments,beginning in March 2017, each equal to 0.25% of the original principal amount of the loans under the Term Loan Facility. These payments are reduced bythe application of any prepayments, and any remaining balance is due and payable on the maturity of the Term Loan Facility. The Term Loan Facilitymatures on November 2, 2023.The Senior Secured Credit Facility imposes certain restrictions including, but not limited to, restrictions as to types and amounts of debt and liens that maybe incurred by the Company; limitations on increases in dividend payments and limitations on certain acquisitions by the Company.The obligations of the Company are guaranteed by substantially all of the Company’s current and future wholly-owned domestic subsidiaries (“Guarantors”).All obligations under the Senior Credit Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of theCompany’s assets and the assets of the Guarantors.In January 2017, the Company entered into a series of fixed-floating interest rate swaps that cover the period from 2018 through 2021, and had the effect ofconverting $300 million of the Term Loan Facility from floating-rate to fixed-rate. The fixed rates provided by the swaps replace the adjusted LIBOR rate inthe interest calculation, range from 1.65% for 2018 to 2.71% for 2021.29 Table of ContentsThe following table illustrates available credit at December 31, 2016:(In millions) Facility Limit OutstandingBalance Outstanding Letters ofCredit AvailableCreditMulti-year revolving credit facility $400.0 $98.0 $43.5 $258.5At December 31, 2016, the Company had $648.0 million of borrowings under the Senior Secured Credit Facility consisting of $550.0 million under the TermLoan Facility and $98.0 million under the Revolving Credit Facility. At December 31, 2016, of this balance, $642.5 million was classified as long-term debtand $5.5 million was classified as current maturities of long-term debt on the Consolidated Balance Sheet. At December 31, 2015, the Company had $415.0million of borrowings under the Senior Secured Credit Facilities consisting of $250.0 million under the term loan A facility and $165.0 million under theRevolving Credit Facility. At December 31, 2015, of this balance, $380.5 million was classified as long-term debt,$22.0 million was classified as short-term borrowings and $12.5 million was classified as current maturities of long-term debt on the Consolidated BalanceSheets. See Note 8, Debt and Credit Agreements, in Part II, Item 8, "Financial Statements and Supplementary Data," for additional information on theCompany's Credit Agreement.Working Capital PositionChanges in the Company's working capital are reflected in the following table:(Dollars in millions) December 31 2016 December 31 2015 Increase(Decrease)Current Assets Cash and cash equivalents $71.9 $79.8 $(7.9)Trade accounts receivable, net 236.6 254.9 (18.3)Other receivables, net 21.1 30.4 (9.3)Inventories 187.7 217.0 (29.3)Other current assets 60.5 82.5 (22.0)Total current assets 577.7 664.5 (86.8)Current Liabilities Short-term borrowings and current maturities 29.8 55.3 (25.5)Accounts payable 108.0 136.0 (28.1)Accrued compensation 46.7 38.9 7.8Income taxes payable 4.3 4.4 (0.1)Advances on contracts and other customer advances 117.3 107.3 10.1Due to unconsolidated affiliate — 7.7 (7.7)Unit adjustment liability — 22.3 (22.3)Other current liabilities 121.9 134.2 (12.3)Total current liabilities 428.0 506.1 (78.2)Working Capital $149.7 $158.4 $(8.7)Current Ratio (h) 1.3:1 1.3:1 (h)Calculated as Current assets / Current liabilitiesWorking capital decreased $8.7 million or 5.5% in 2016 due primarily to the following factors:•Working capital was negatively impacted by a decrease in Inventory of $29.3 million, primarily due to the estimated forward loss provisions relatedto the Company's Harsco Rail Segment's contracts with SBB which is recorded as a reduction of Contracts-in-process, a component of Inventory, aswell as the timing of inventory purchases in the Harsco Metals & Minerals Segment;•Working capital was negatively impacted by a decrease in Other current assets of $22.0 million, primarily due to the timing of current deferred taxassets and prepaid expenses;•Working capital was negatively impacted by a decrease in Trade accounts receivable, net, of $18.3 million, primarily due to timing of invoicing andcollections in the Harsco Metals & Minerals Segment, foreign currency translation and decreased sales in the Harsco Industrial Segment; and•Working capital was negatively impacted by an increase in Advances on contracts and other customer advances of $10.1 million, primarily receivedin the Harsco Rail Segment.These working capital decreases were partially offset by the following factors:•Working capital was positively affected by a decrease in Accounts payable of $28.1 million, primarily due to the timing of payments;•Working capital was positively affected by a decrease in Short-term borrowings and current maturities of long-term debt of $25.5 million, primarilydue to the expected timing of debt payments;30 Table of Contents•Working capital was positively affected by a decrease in the Unit adjustment liability of $22.3 million due to the sale of the Company's equityinterest in Brand. See Note 5, Equity Method Investments and Note 15, Financial Instruments, in Part II, Item 8, "Financial Statements andSupplementary Data" for additional information; and•Working capital was positively affected by a decrease in Other current liabilities of $12.3 million, primarily due to lower accrued commissions,lower accrued interest and the timing of other accruals.Certainty of Cash FlowsThe certainty of the Company's future cash flows is underpinned by the long-term nature of the Company's metals services contracts, the order backlog for theCompany's railway track maintenance services and equipment, and overall discretionary cash flows (operating cash flows plus cash from asset sales in excessof the amounts necessary for capital expenditures to maintain current revenue levels) generated by the Company. Historically, the Company has utilizedthese discretionary cash flows for growth-related capital expenditures, strategic acquisitions, debt repayment and dividend payments.The types of products and services that the Company provides are not subject to rapid technological change, which increases the stability of related cashflows. Additionally, the Company believes each business in its portfolio is a leader in the industries and major markets the Company serves. Due to thesefactors, the Company is confident in the Company's future ability to generate positive cash flows from operations.The Company has historically generated the majority of its cash flows in the second half of the year. Additionally, the Company’s cash flows have beennegatively impacted in the near term by reduced steel production, weaker commodity prices and demand, the impact of site exits in the Harsco Metals &Minerals Segment and low oil prices impacting capital expenditures and overall spending by customers in the natural gas, natural gas processing andpetrochemical industries.Cash Flow SummaryThe Company's cash flows from operating, investing and financing activities, as reflected on the Consolidated Statements of Cash Flows, are summarized inthe following table:(In millions) 2016 2015 2014Net cash provided (used) by: Operating activities $159.8 $121.5 $226.7Investing activities 122.9 (130.4) (229.6)Financing activities (292.3) 22.5 (21.8)Impact of exchange rate changes on cash 1.7 3.3 (6.1)Net change in cash and cash equivalents $(7.9) $16.9 $(30.8)Cash provided by operating activities — Net cash provided by operating activities in 2016 was $159.8 million, an increase of $38.3 million from 2015. Theincrease is primarily attributable to timing in inventory purchases, increases in accrued compensation and increases on advances on contracts; partially offsetby the timing of accounts receivable invoicing and collections and the timing of accounts payables. Net cash provided by operating activities in 2015 was$121.5 million, a decrease of $105.2 million from 2014. The decrease is primarily attributable to lower customer advances, and an increase in inventoryprimarily related to the SBB contracts in the Harsco Rail Segment, partially offset by the timing of accounts receivable invoicing and collections.Included in the Cash flows from operating activities section of the Consolidated Statement of Cash Flows is the caption, Other, net. In 2015, this captionincluded the Harsco Rail Segment foreign exchange gain which is reflected in the Effect of exchange rate changes on cash. In 2014, this caption consisted ofprincipally the impact of non-cash impaired asset write-downs related to the Harsco Metals & Minerals Segment.Also included in the Cash flows from operating activities section of the Consolidated Statements of Cash Flows is the caption, Other assets and liabilities. Forthe years ended December 31, 2016, 2015 and 2014, the decreases in this caption were$12.8 million, $6.0 million and $17.1 million, respectively. A summary of the major components of this caption for the periods presented is as follows:(In millions) 2016 2015 2014Net cash provided by (used in): Change in prepaid expenses $6.7 $— $(15.8) Change in non-current insurance accruals (5.0) (5.0) (6.1) Other (14.5)(i)(1.0) 4.8 Total $(12.8) $(6.0) $(17.1)(i)Other relates primarily to other accruals that are individually not significant.31 Table of ContentsCash provided (used) by investing activities — Net cash provided by investing activities in 2016 was $122.9 million, an increase of $253.3 million from2015. The increase is primarily due to the gross proceeds received from the sale of the Company's remaining 26% equity interest in Brand; a lower level ofcapital expenditures in the Harsco Metals & Minerals Segment, no payments for the unit adjustment liability; and an increase related to foreign currencyhedge settlements reported as Other investing activities. In 2015, net cash used by investing activities was $130.4 million, a decrease of$99.2 million from 2014. The net decrease was primarily due to a lower level of capital expenditures, primarily in the Harsco Metals & Minerals Segment; anet decrease in purchases of businesses which consisted of Protran and JK Rail in the Harsco Rail Segment in 2015 and Hammco in the Harsco IndustrialSegment in 2014; and an increase in proceeds from sales of assets, partially offset by the final working capital adjustment related to the InfrastructureTransaction which was received in 2014. Capital investments decreased $85.3 million compared with 2014.Cash provided (used) by financing activities — Net cash used by financing activities in 2016 was $292.3 million, an increase of $314.7 million from 2015. The change was primarily due to net cash payments on debt of $261.2 million in 2016 compared with $47.3 million in 2015; reduction in proceeds from thetermination of CCIRs and a deferred pension underfunding payment related to the Company's equity interest in Brand; partially offset by lower dividendspaid and no repurchases of the Company's common stock in 2016. In 2015, net cash provided by financing activities was $22.5 million, an increase of $44.2million from 2014. The change was primarily due to proceeds of $75.1 million from the termination of a CCIR, partially offset by an increase in the treasuryshares purchased under the Company's share repurchase program then in effect and a decrease in year-over-year net cash borrowings.Debt CovenantsThe Credit Agreement contains a consolidated net debt to consolidated adjusted EBITDA ratio covenant, which is not to exceed 4.0 to 1.0, and a minimumconsolidated adjusted EBITDA to consolidated interest charges ratio covenant, which is not to be less than 3.0 to 1.0. The consolidated net debt toconsolidated adjusted EBITDA ratio covenant is reduced to 3.75 to1.0 after December 31, 2016 and to 3.5 to 1.0 after December 31, 2017. At December 31,2016, the Company was in compliance with these covenants as the net leverage ratio was 2.3 to 1.0 and interest coverage ratio was 5.1 to 1.0. Based onbalances and covenants in effect at December 31, 2016, the Company could increase net debt by $447.6 million (although the Company only has $258.5million available credit remaining under the Revolving Credit Facility), and still be in compliance with these debt covenants. Alternatively, keeping allother factors constant, the Company's adjusted EBITDA could decrease by $109.1 million and the Company would still be within these debt covenants. TheCompany expects to continue to be in compliance with these debt covenants for at least the next twelve months.Cash ManagementThe Company has various cash management systems throughout the world that centralize cash in various bank accounts where it is economically justifiableand legally permissible to do so. These centralized cash balances are then redeployed to other operations to reduce short-term borrowings and to financeworking capital needs or capital expenditures. Due to the transitory nature of cash balances, they are normally invested in bank deposits that can bewithdrawn 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 variouscountries in which the Company operates. The Company monitors the creditworthiness of banks and when appropriate will adjust banking operations toreduce or eliminate exposure to less credit-worthy banks. The Company plans to continue the strategy of targeted, prudent investing for strategic purposes forthe foreseeable future and to make more efficient use of existing investments.At December 31, 2016, the Company's consolidated cash and cash equivalents included $70.5 million held by non-U.S. subsidiaries. At December 31, 2016,less than 10% of the Company's consolidated cash and cash equivalents had regulatory restrictions that would preclude the transfer of funds with and amongsubsidiaries. The cash and cash equivalents held by non-U.S. subsidiaries also included $26.7 million held in consolidated strategic ventures. The strategicventure 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 ongoingworking capital needs and continued growth of the Company's non-U.S. operations.The Company's financial position and debt capacity should enable it to meet current and future requirements. The Company continues to assess its capitalneeds in the context of operational trends and strategic initiatives.32 Table of ContentsApplication of Critical Accounting PoliciesThe Company's discussion and analysis of its financial condition and results of operations are based upon the consolidated financial statements, which havebeen prepared in accordance with generally accepted accounting principles in the U.S. ("U.S. GAAP"). The preparation of these consolidated financialstatements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On anongoing basis, the Company evaluates the estimates, including those related to defined benefit pension benefits, notes and accounts receivable, goodwill,long-lived asset impairment, inventories, revenue recognition - long-term contracts, insurance reserves and income taxes. The impact of changes in theseestimates, as necessary, is reflected in the respective segment's results of operations in the period of the change. The Company bases estimates on historicalexperience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for makingjudgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimatesunder different outcomes, assumptions or conditions.The Company believes the following critical accounting policies are affected by the Company's more significant judgments and estimates used in thepreparation of the consolidated financial statements. Management has discussed the development and selection of the critical accounting estimates describedbelow with the Audit Committee of the Board and they have reviewed the Company's disclosures relating to these estimates in this Management's Discussionand Analysis of Financial Condition and Results of Operations. These items should be read in conjunction with Note 1, Summary of Significant AccountingPolicies, in Part II, Item 8, "Financial Statements and Supplementary Data."Defined Benefit Pension BenefitsThe Company has defined benefit pension plans in several countries. The largest of these plans are in the U.K. and the U.S. The Company's funding policy forthese plans is to contribute amounts sufficient to meet the minimum funding pursuant to U.K. and U.S. statutory requirements, plus any additional amountsthat the Company may determine to be appropriate.Changes in the discount rate assumption and the actual performance of plan assets compared with the expected long-term rate of return on plan assets are theprimary drivers in the change in funded status of the Company's defined benefit pension plans. These factors are components of actuarial loss (gain) andimpact the amount recognized in Other comprehensive income (loss), as such actuarial changes are not reflected directly on the Consolidated Statements ofOperations, but amortized over time in accordance with U.S. GAAP.Critical Estimate—Defined Benefit Pension BenefitsAccounting for defined benefit pension plans requires the use of actuarial assumptions. The principal assumptions used include the discount rate and theexpected long-term rate of return on plan assets. Each assumption is reviewed annually and represents management's best estimate at that time. Theassumptions are selected to represent the average expected experience over time, and may differ in any one year from actual experience due to changes incapital markets and the overall economy. These differences will impact the amount of unfunded benefit obligation and the expense recognized.The discount rates used in calculating the Company's projected benefit obligations at the December 31, 2016 measurement date for the U.K. and U.S. definedbenefit pension plans were 2.7% and 4.0%, respectively, and the global weighted-average discount rate was 3.1%. The discount rates selected represent level-equivalent rates using the yield curve spot rates on a year-by-year expected cash flow basis, using yield curves of high-quality corporate bonds. Annual netperiodic pension cost ("NPPC") is determined using the discount rates at the beginning of the year. The discount rates for 2016 expense were 3.8% for theU.K. plan, 4.2% for the U.S. plans and 3.9% for the global weighted-average of plans.The expected long-term rate of return on plan assets is determined by evaluating the asset return expectations with the Company's advisors as well as actual,long-term, historical results of asset returns for the pension plans. Generally the NPPC increases as the expected long-term rate of return on assets decreases.For 2017 and 2016, the global weighted-average expected long-term rate of return on asset assumption is 6.2% and 6.7%, respectively. This rate wasdetermined based on a model of expected asset returns for an actively managed portfolio.33 Table of ContentsChanges in NPPC may occur in the future due to changes in actuarial assumptions, and due to changes in returns on plan assets resulting from financialmarket conditions. Holding all other assumptions constant, using December 31, 2016 plan data, a one-quarter percent increase or decrease in the discount rateand the expected long-term rate of return on plan assets would increase or decrease annual 2016 pre-tax defined benefit NPPC as follows:Approximate Changes in Pre-tax Defined Benefit Net Periodic Pension Cost U.S. Plans U.K. PlanDiscount rate One-quarter percent increase Increase of $0.1 million Decrease of $0.4 millionOne-quarter percent decrease Decrease of $0.1 million Increase of $0.3 millionExpected long-term rate of return on plan assets One-quarter percent increase Decrease of $0.5 million Decrease of $1.7 millionOne-quarter percent decrease Increase of $0.5 million Increase of $1.7 millionIncreases or decreases to the net pension obligations may be required should circumstances that affect these estimates change. Additionally, certain eventscould result in the pension obligation changing at a time other than the annual measurement date. This would occur when a benefit plan is amended or whenplan curtailments or settlements occur.The Company has changed the method utilized to estimate the service cost and interest cost components of NPPC for defined benefit pension plans for 2016and later. The more precise application of discount rates for measuring both service costs and interest costs employs yield curve spot rates on a year-by-yearexpected cash flow basis, using the same yield curves that the Company has previously used. This change in method represented a change in accountingestimate and has been accounted for in the period of change. This change in method decreased the Company's NPPC by approximately $7 million for 2016,compared to what NPPC would have been under the prior method.See Note 10, Employee Benefit Plans, in Part II, Item 8, "Financial Statements and Supplementary Data," for additional information.Notes and Accounts ReceivableNotes and accounts receivable are stated at net realizable value through the use of an allowance for doubtful accounts. The allowance for doubtful accounts ismaintained for estimated losses resulting from the inability or unwillingness of customers to make required payments. The Company has policies andprocedures in place requiring customers to be evaluated for creditworthiness prior to the execution of new service contracts or shipments of products. Thesereviews are structured to minimize the Company's risk related to realizability of receivables. Despite these policies and procedures, the Company may attimes still experience collection problems and potential bad debts due to economic conditions within certain industries (e.g., steel industry), countries orregions in which the Company operates. At December 31, 2016 and 2015, trade accounts receivable of $236.6 million and $254.9 million, respectively, werenet of reserves of $11.8 million and $25.6 million, respectively.Critical Estimate—Notes and Accounts ReceivableA considerable amount of judgment is required to assess the realizability of receivables, including the current creditworthiness of each customer, relatedaging of past due balances and the facts and circumstances surrounding any non-payment. The Company did not make any significant provisions for baddebts during 2016. The Company's provisions for bad debts during 2015 and 2014 were $13.0 million and $9.9 million, respectively.On a monthly basis, customer accounts are analyzed for collectability. Reserves are established based upon a specific-identification method as well ashistorical collection experience, as appropriate. The Company also evaluates specific accounts when it becomes aware of a situation in which a customer maynot be able to meet its financial obligations due to a deterioration in financial condition, credit ratings, bankruptcy or receivership. The reserves are based onthe facts available to the Company and are re-evaluated and adjusted as additional information becomes available. Reserves are also determined by usingpercentages (based upon experience) applied to certain aged receivable categories. Specific issues are discussed with corporate management, and anysignificant changes in reserve amounts or the write-off of balances must be approved by specifically designated corporate personnel. All approved items aremonitored to ensure they are recorded in the proper period. Additionally, any significant changes in reserve balances are reviewed to ensure the propercorporate approval has occurred.34 Table of ContentsIf the financial condition of the Company's customers were to deteriorate, resulting in their inability to make payments, additional allowances may berequired. Conversely, an improvement in a customer's ability to make payments could result in a decrease of the allowance for doubtful accounts. Changes inthe allowance for doubtful accounts related to both of these situations would be recorded through Operating income (loss) from continuing operations in theperiod the change was determined. As previously disclosed, during the fourth quarter of 2013, the Company recorded a bad debt reserve of$2.6 million on receivables with a large steel mill customer who filed for protection under the Marzano Law. During the second quarter of 2014, the customerterminated its contract with the Company under the provisions of the Marzano Law. As a result, during the second quarter of 2014, the Company recorded anadditional bad debt reserve of $3.9 million on the remaining pre-receivership receivables with this customer. During 2014, the Company recorded a bad debtreserve of $2.6 million for one of its Canadian steel mill customers that filed for receivership protection during the course of the year as the Company haspreviously disclosed. The amount of the bad debt reserve for this customer represents the full pre-receivership balance. As previously disclosed during 2015,one of the Company's steel mill customers in Europe ceased operations and began a formal process of liquidation in late 2015. The Company had recordedbad debt reserves of approximately $13 million related to this customer during 2015.The Company has not materially changed the methodology for calculating allowances for doubtful accounts for the years presented. See Note 4, AccountsReceivable and Inventories, in Part II, Item 8, "Financial Statements and Supplementary Data," for additional information.GoodwillThe Company's goodwill balances were $382.3 million and $400.4 million at December 31, 2016 and 2015, respectively. The Company performs the annualgoodwill impairment test as of October 1. The Company has five reporting units (only three of which have goodwill associated with them as of December 31,2016). The Company's reporting units with goodwill are the Harsco Metals & Minerals Segment, the Harsco Rail Segment and the air-cooled heat exchangerbusiness of the Harsco Industrial Segment. Almost all of the Company's goodwill is allocated to the Harsco Metals & Minerals Segment.Critical Estimate—GoodwillIn accordance with U.S. GAAP, goodwill is not amortized and is tested for impairment at least annually or more frequently if indicators of impairment exist orif a decision is made to dispose of a business. Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as anoperating segment or one level below an operating segment for which discrete financial information is available. A significant amount of judgment isinvolved in determining if an indicator of impairment has occurred. Such indicators may include declining cash flows or operating losses at the reporting unitlevel, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a lossof key personnel, or a more likely than not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of,among others.The evaluation of potential goodwill impairment involves comparing the current fair value of each reporting unit to the net book value, including goodwill.The Company uses a discounted cash flow model (“DCF model”) to estimate the current fair value of reporting units, as management believes forecastedoperating cash flows are the best indicator of current fair value. A number of significant assumptions and estimates are involved in the preparation of DCFmodels, including future revenues and operating margin growth, the weighted-average cost of capital (“WACC”), tax rates, capital spending, pensionfunding, the impact of strategic business initiatives, and working capital projections. These assumptions and estimates may vary significantly amongreporting units. DCF models are based on approved long-range plans for the early years and historical relationships and projections for later years. WACCrates are derived from internal and external factors including, but not limited to, the average market price of the Company's stock, shares outstanding, bookvalue of the Company's debt, the long-term risk free interest rate, and both market and size-specific risk premiums. Due to the many variables noted aboveand the relative size of the Company's goodwill, differences in assumptions may have a material impact on the results of the Company's annual goodwillimpairment testing. If the net book value of a reporting unit were to exceed the current fair value, the second step of the goodwill impairment test wouldcurrently be required to determine if an impairment existed and the amount of goodwill impairment to record, if any. The second step of the goodwillimpairment test compares the net book value of a reporting unit's goodwill with the implied fair value of that goodwill. The implied fair value of goodwillrepresents the excess of fair value of the reporting unit over the fair value amounts assigned to all of the assets and liabilities of the reporting unit if it were tobe acquired in a hypothetical business combination, and the current fair value of the reporting unit represented the purchase price. The second step of thegoodwill impairment test requires the utilization of valuation experts.The performance of the Company’s 2016 annual impairment tests did not result in any impairment of the Company’s goodwill.For the Company's 2016 annual goodwill impairment test, the average annual revenue growth rates over the duration of the DCF models ranged from 1.7% to4.8%. The WACCs used in the 2016 annual goodwill impairment test ranged from 9.25% to 10.75%.35 Table of ContentsThe Harsco Metals & Minerals Segment reporting unit's fair value at October 1, 2016 was approximately 12% more than the net book value. Significantassumptions utilized in the DCF model include a WACC of 10.75%, an average annual revenue growth rate of 1.7% and average annual cash flow growth rateof 0.6%. Should there be degradation in the overall markets served by the Harsco Metals & Minerals Segment, it may result in an impairment of the HarscoMetal & Minerals Segment goodwill.It is important to note that fair values that could be realized in an actual transaction, including the Company's announced intention to pursue strategicoptions for the separation of the Harsco Metals & Minerals Segment from the rest of the Company, could differ materially from those used to evaluate theannual goodwill impairment test. The Company has not materially changed its methodology for goodwill impairment testing for the years presented. SeeNote 1, Summary of Significant Accounting Policies and Note 7, Goodwill and Other Intangible Assets, in Part II, Item 8, “Financial Statements andSupplementary Data,” for additional information.Long-lived Asset ImpairmentLong-lived assets are reviewed for impairment when events and circumstances indicate that the book value of an asset may be impaired. The amounts chargedagainst pre-tax income from continuing operations related to impaired long-lived assets included in Other expenses on the Consolidated Statements ofOperations were $0.4 million, $8.2 million and $39.5 million in 2016, 2015 and 2014 respectively. The decrease in long-lived asset impairments in 2016 wasdue primarily to a decreased number of site exits in the Harsco Metals & Minerals Segment upon substantial completion of actions associated with ProjectOrion. The decrease in long-lived asset impairments in 2015 was due primarily to higher long-lived asset impairments in 2014 in the Harsco Metals &Minerals Segment as part of Project Orion.Critical Estimate—Asset ImpairmentThe determination of a long-lived asset impairment involves significant judgments based upon short-term and long-term projections of future assetperformance. If the undiscounted cash flows associated with an asset (or asset group) do not exceed the asset's book value, impairment loss estimates wouldbe based upon the difference between the book value and fair value of the asset. The fair value is generally based upon the Company's estimate of the amountthat the assets could be bought or sold for in a transaction between willing parties. If quoted market prices for the asset or similar assets are unavailable, thefair value estimate is generally calculated using a DCF model. Should circumstances change that affect these estimates, additional impairment charges maybe required and would be recorded through income in the period the change was determined.The Company has not materially changed the methodology for calculating long-lived asset impairments for the years presented. U.S. GAAP requiresconsideration of all valuation techniques for which market participant inputs can be obtained without undue cost and effort. The use of a DCF modelcontinues to be an appropriate method for determining fair value; however, methodologies such as quoted market prices must also be evaluated. See Note 17,Other Expenses, in Part II, Item 8, "Financial Statements and Supplementary Data," for additional information.InventoriesInventories are stated at the lower of cost or market. Inventory balances are adjusted for estimated obsolete or unmarketable inventory equal to the differencebetween the cost of inventory and its estimated market value. At December 31, 2016 and 2015, inventories of $187.7 million and $217.0 million,respectively, are net of lower of cost or market reserves and obsolescence reserves of $10.6 million and $10.8 million, respectively.Certain contracts within the Harsco Rail Segment, which meet specific criteria established in U.S. GAAP, are accounted for as long-term contracts. Inventoriesrelated to these contracts are considered Contracts-in-process and represent a separate component of Inventories. At December 31, 2016 and 2015, Contracts-in-process of $54.0 million and $55.8 million, respectively, were included in Inventories. Contracts-in-process at December 31, 2016 were net of estimatedforward loss-provisions related to these contacts of $36.2 million. No estimated forward loss provision was made at December 31, 2015.Critical Estimate—InventoriesIn assessing the realization of inventory balances, the Company is required to make judgments as to future demand and compare these with current orcommitted inventory levels. If actual market conditions are determined to be less favorable than those projected by management, additional inventory write-downs may be required and would be recorded through Operating income (loss) from continuing operations in the period the determination is made.Additionally, the Company records reserves to adjust a substantial portion of its U.S. inventory balances to the last-in, first-out ("LIFO") method of inventoryvaluation. In adjusting these reserves throughout the year, the Company estimates its year-end inventory costs and quantities. At December 31 of each year,the reserves are adjusted to reflect actual year-end inventory costs and quantities. During periods of inflation, LIFO expense usually increases and duringperiods of deflation it decreases. These year-end adjustments resulted in pre-tax income of $1.2 million in 2016, pre-tax expense of $0.1 million in 2015 andpre-tax expense of $1.4 million in 2014.36 Table of ContentsThe Company has not materially changed the methodology for calculating inventory reserves for the years presented. See Note 4, Accounts Receivable andInventories, in Part II, Item 8, "Financial Statements and Supplementary Data," for additional information.Revenue Recognition - Long-term ContractsCertain contracts within the Harsco Rail Segment, which meet specific criteria established in U.S. GAAP, are accounted for as long-term contracts, under thepercentage-of-completion (units-of-delivery) method of accounting.Critical Estimate—Revenue Recognition - Long-term ContractsAccounting for contracts using the percentage-of-completion method requires significant judgment relative to assessing risks, estimating contract revenuesand costs (including estimating any liquidating damages or penalties related to performance) and making assumptions for schedule and technical items. Dueto the number of years it may take to complete these contracts and the scope and nature of the work required to be performed on those contracts, estimatingtotal sales and costs at completion is inherently complicated and subject to many variables. Accordingly, estimates are subject to change as experience isgained, and as more information is obtained, even though the scope of the work under the contract may not have changed. When adjustments in estimatedtotal contract sales or estimated total costs are required, any changes from prior estimates are recognized in the current period for the inception-to-date effectof such changes. When estimates of total costs to be incurred on a contract using the percentage-of-completion method exceed estimates of total sales to beearned, a provision for the entire loss on the contract is recorded in the period in which the loss is determined.During 2016, as a result of increased vendor costs, ongoing discussions with SBB, and increased estimates for commissioning, certification and testing costs,as well as expected settlements with SBB, the Company concluded it will have a loss on the contracts with SBB. The Company recognized an estimatedforward loss provision related to the SBB contracts of$45.1 million for the year ended December 31, 2016 in Costs of products sold on the Consolidated Statements of Operations. There was no estimated forwardloss provision at December 31, 2015 or 2014. The estimated forward loss provision represents the Company's best estimate based on currently availableinformation. It is possible that the Company's overall estimate of costs to complete these contracts may change which would result in an adjustment to theestimated forward loss provision at such time, but the Company is unable to estimate any further possible loss or range of loss at December 31, 2016.Insurance ReservesThe Company retains a significant portion of the risk for U.S. workers' compensation, U.K. employers' liability, automobile, general and product liabilitylosses. At December 31, 2016 and 2015, the Company recorded liabilities of $37.1 million and $41.8 million, respectively, related to both asserted andunasserted insurance claims. At December 31, 2016 and 2015,$3.5 million and $3.4 million, respectively, was included in insurance liabilities related to claims covered by insurance carriers for which a correspondingreceivable has been recorded.Critical Estimate—Insurance ReservesInsurance reserves have been recorded based upon actuarial calculations that reflect the undiscounted estimated liabilities for ultimate losses, includingclaims incurred but not reported. Inherent in these estimates are assumptions that are based on the Company's history of claims and losses, a detailed analysisof 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 Operating income (loss) from continuingoperations in the period the change was determined. During 2016, 2015 and 2014, the Company recorded a retrospective insurance reserve adjustment thatdecreased pre-tax insurance expense from continuing operations for self-insured programs by $5.4 million,$8.5 million and $7.0 million, respectively. The Company has programs in place to improve claims experience, such as disciplined claim and insurancelitigation management and a focused approach to workplace safety.The Company has not materially changed the methodology for calculating insurance reserves for the years presented. There are currently no known trends,demands, commitments, events or uncertainties that are reasonably likely to occur that would materially affect the methodology or assumptions describedabove. See Note 1, Summary of Significant Accounting Policies, in Part II, Item 8, "Financial Statements and Supplementary Data," for additionalinformation.37 Table of ContentsIncome TaxesThe Company's income tax expense, deferred tax assets and liabilities and reserves for uncertain tax positions reflect management's best estimate of taxes tobe paid. The Company is subject to various international, federal, state and local income taxes in jurisdictions where the Company operates. In determiningincome tax expense, the Company makes its best estimate of the annual effective income tax rate at the end of each quarter and applies that rate to year-to-date income (loss) before income taxes to arrive at the year-to-date income tax provision (exclusive of loss jurisdictions for which no tax benefit is realizablewith any discrete tax items recorded separately). At December 31, 2016, 2015 and 2014, the Company's annual effective income tax rate on income fromcontinuing operations was (8.4)%, 79.5% and 214.8%, respectively.Critical Estimate—Income TaxesAnnual effective income tax rates are estimated by giving recognition to currently enacted tax rates, tax holidays, tax credits, capital losses, and taxdeductions as well as certain exempt income and non-deductible expenses for all jurisdictions where the Company operates. Quarterly income tax provisionsincorporate any change in the year-to-date provision from the previous quarterly periods.The Company records deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making suchdeterminations, the Company considers all available evidence, including future reversals of existing deferred tax liabilities, projected future taxable income,feasible and prudent tax planning strategies and recent financial operating results. In the event the Company was to determine that it would be able to realizedeferred tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance would be made that would reduce theprovision for income taxes.Valuation allowances of $146.1 million and $110.7 million at December 31, 2016 and 2015, respectively, related principally to deferred tax assets for U.K.pension liabilities, net operating loss carryforwards, capital losses, currency translation and foreign investment tax credits that are uncertain as torealizability. In 2016, the Company recorded a valuation allowance of$16.1 million related to loss on sale of the Company's equity interest in Brand, $13.5 million related to estimated forward loss provisions related to the SBBcontracts, and current year pension adjustments of $19.2 million recorded through Accumulated other comprehensive loss. This was partially offset by thereduction from the effects of foreign currency translation adjustments and the decrease related to U.K. and France tax rate changes. In 2015, the Companyrecorded a net decrease in the valuation allowance of $16.1 million related to current year pension adjustments recorded through Accumulated othercomprehensive loss, the current year decrease from the currency translation in the amount of $11.5 million, and$6.3 million decrease related to a U.K. tax rate change. This was offset by a net increase of $13.2 million related to losses in certain jurisdictions where theCompany determined that it is more likely than not that these assets will not be realized.A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination,including resolutions of any related appeals or litigation processes, based on its technical merits. The unrecognized tax benefits at December 31, 2016 and2015 were $4.6 million and $5.1 million, respectively, excluding accrued interest and penalties. The unrecognized tax benefit may decrease as a result of thelapse of statute of limitations or as a result of final settlement and resolution of outstanding tax matters in various state and international jurisdictions.The Company has not provided U.S. income taxes on certain non-U.S. subsidiaries' undistributed earnings, as such amounts are permanently reinvestedoutside the U.S. The Company evaluates future financial projections for its most significant subsidiaries, the need to reinvest earnings locally and the overallcash requirements of the Company. Based upon this evaluation, the Company determined that certain undistributed earnings from non-U.S. subsidiaries areindefinitely reinvested. The Company believes that it can generate sufficient cash flows to avoid the one-time tax costs associated with repatriation ofundistributed earnings to the U.S. from prior periods. At December 31, 2016 and 2015, such earnings were approximately $528 million and $547 million,respectively. It is not practical to determine the deferred income tax liability on these earnings if, in the future, they are remitted to the U.S. because theincome tax liability to be incurred, if any, is dependent on circumstances existing when remittance occurs.The Company has not materially changed the methodology for calculating income tax expense, deferred tax assets and liabilities and reserves for uncertaintax positions for the years presented or for quarterly periods. See Note 11, Income Taxes, in Part II, Item 8, "Financial Statements and Supplementary Data,"for additional information.38 Table of ContentsResearch and DevelopmentInternal funding for research and development was as follows: Research and Development Expenses(In millions) 2016 2015 2014Harsco Metals & Minerals $0.9 $0.9 $1.4Harsco Industrial 1.5 1.7 1.6Harsco Rail 1.9 1.9 2.5Total Research and Development $4.3 $4.5 $5.5The amounts shown exclude technology development and engineering costs classified in cost of services sold; cost of products sold; or selling, general andadministrative expenses.Recently Adopted and Recently Issued Accounting StandardsInformation on recently adopted and recently issued accounting standards is included in Note 2, Recently Adopted and Recently Issued AccountingStandards, in Part II, Item 8, "Financial Statements and Supplementary Data."Dividend ActionThe Board normally reviews the dividend policy and the dividend rate on a quarterly basis.The Company paid one cash dividend of $0.05125 per share in 2016. This dividend was paid on February 16, 2016.Item 7A. Quantitative and Qualitative Disclosures about Market Risk.See Part I, Item 1A, "Risk Factors," for quantitative and qualitative disclosures about market risk.39 Table of ContentsItem 8. Financial Statements and Supplementary Data.Index to Consolidated Financial Statements and Supplementary Data PageConsolidated Financial Statements of Harsco Corporation: Management's Report on Internal Control Over Financial Reporting41Report of Independent Registered Public Accounting Firm42Consolidated Balance Sheets43Consolidated Statements of Operations44Consolidated Statements of Comprehensive Income (Loss)45Consolidated Statements of Cash Flows46Consolidated Statements of Changes in Equity48Notes to Consolidated Financial Statements49 Supplementary Data (Unaudited): Two-Year Summary of Quarterly Results91Common Stock Price and Dividend Information9240 Table of ContentsManagement's Report on Internal Control Over Financial ReportingManagement of Harsco Corporation, together with its consolidated subsidiaries (the "Company"), is responsible for establishing and maintaining adequateinternal control over financial reporting, as defined in Securities Exchange Act Rule 13a-15(f) or 15d-15(e). The Company's internal control over financialreporting is a process designed under the supervision of the Company's principal executive and principal financial officers to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of the Company's consolidated financial statements for external reporting purposes inaccordance with accounting principles generally accepted in the United States of America.The Company's internal control over financial reporting includes policies and procedures that:•Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of theCompany;•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements inaccordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Companyare being made only in accordance with authorizations of management and the directors of the Company; and•Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company'sassets that could have a material effect on the Company's consolidated financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies and procedures may deteriorate.Management has assessed the effectiveness of its internal control over financial reporting at December 31, 2016 based on the framework established inInternal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on thisassessment, management has determined that the Company's internal control over financial reporting was effective at December 31, 2016.The effectiveness of the Company's internal control over financial reporting at December 31, 2016 has been audited by PricewaterhouseCoopers LLP, anindependent registered public accounting firm, as stated in their report appearing in this Annual Report on Form 10-K, which expresses an unqualifiedopinion on the effectiveness of the Company's internal control over financial reporting at December 31, 2016./s/ F. NICHOLAS GRASBERGER, III /s/ PETER F. MINANF. Nicholas Grasberger, IIIPresident and Chief Executive Officer Peter F. MinanSenior Vice President and Chief Financial OfficerFebruary 24, 2017 February 24, 201741 Table of ContentsReport of Independent Registered Public Accounting FirmTo the Stockholders of Harsco Corporation:In our opinion, the consolidated financial statements, listed in the accompanying index, present fairly, in all material respects, the financial position ofHarsco Corporation at December 31, 2016 and December 31, 2015, and the results of their operations and their cash flows for each of the three years in theperiod ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion,the financial statement schedule listed in the accompanying index appearing under Item 15(a)(2) presents fairly, in all material respects, the information setforth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all materialrespects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for thesefinancial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control overfinancial reporting based on our integrated audit. We conducted our audits in accordance with the standards of the Public Company Accounting OversightBoard (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements arefree of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financialstatements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accountingprinciples used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control overfinancial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, andtesting and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such otherprocedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for the presentation and classificationof certain cash receipts and cash payments in the statement of cash flows due to the adoption of ASU 2016-15, Statement of Cash Flows (Topic 230) in 2016. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania February 24, 201742 Table of ContentsHARSCO CORPORATIONCONSOLIDATED BALANCE SHEETS(In thousands, except share amounts) December 31 2016 December 31 2015ASSETS Current assets: Cash and cash equivalents $71,879 $79,756Trade accounts receivable, net 236,554 254,877Other receivables 21,053 30,395Inventories 187,681 216,967Other current assets 60,523 82,527Total current assets 577,690 664,522Investments 1,944 252,609Property, plant and equipment, net 490,255 564,035Goodwill 382,251 400,367Intangible assets, net 41,567 53,043Other assets 87,679 126,621Total assets $1,581,386 $2,061,197LIABILITIES Current liabilities: Short-term borrowings $4,259 $30,229Current maturities of long-term debt 25,574 25,084Accounts payable 107,954 136,018Accrued compensation 46,658 38,899Income taxes payable 4,301 4,408Dividends payable — 4,105Insurance liabilities 11,850 11,420Advances on contracts and other customer advances 117,329 107,250Due to unconsolidated affiliate — 7,733Unit adjustment liability — 22,320Other current liabilities 110,029 118,657Total current liabilities 427,954 506,123Long-term debt 629,239 845,621Deferred income taxes 2,621 12,095Insurance liabilities 25,265 30,400Retirement plan liabilities 319,597 241,972Due to unconsolidated affiliate — 13,674Unit adjustment liability — 57,614Other liabilities 39,147 42,895Total liabilities 1,443,823 1,750,394COMMITMENTS AND CONTINGENCIES HARSCO CORPORATION STOCKHOLDERS' EQUITY Preferred stock, Series A junior participating cumulative preferred stock — —Common stock, par value $1.25 (issued 112,499,874 and 112,405,302 shares at December 31, 2016 and 2015, respectively) 140,625 140,503Additional paid-in capital 172,101 170,699Accumulated other comprehensive loss (606,722) (515,688)Retained earnings 1,150,688 1,236,355Treasury stock, at cost (32,324,911 and 32,310,937 shares at December 31, 2016 and 2015, respectively) (760,391) (760,299)Total Harsco Corporation stockholders' equity 96,301 271,570Noncontrolling interests 41,262 39,233Total equity 137,563 310,803Total liabilities and equity $1,581,386 $2,061,197See accompanying notes to consolidated financial statements.43 Table of ContentsHARSCO CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS Years ended December 31 (In thousands, except per share amounts) 2016 2015 2014 Revenues from continuing operations: Service revenues $939,129 $1,092,725 $1,366,246 Product revenues 512,094 630,367 700,042 Total revenues 1,451,223 1,723,092 2,066,288 Costs and expenses from continuing operations: Cost of services sold 759,120 909,995 1,149,360 Cost of products sold 411,343 446,366 494,510 Selling, general and administrative expenses 200,391 242,112 284,737 Research and development expenses 4,280 4,510 5,467 Loss on disposal of the Harsco Infrastructure Segment and transaction costs — 1,000 5,103 Other expenses 12,620 30,573 57,824 Total costs and expenses 1,387,754 1,634,556 1,997,001 Operating income from continuing operations 63,469 88,536 69,287 Interest income 2,475 1,574 1,702 Interest expense (51,584) (46,804) (47,111) Loss on early extinguishment of debt (35,337) — — Change in fair value to the unit adjustment liability and loss on dilution and sale of equity methodinvestment (58,494) (8,491) (9,740) Income (loss) from continuing operations before income taxes and equity income (loss) (79,471) 34,815 14,138 Income tax expense (6,637) (27,678) (30,366) Equity in income (loss) of unconsolidated entities, net 5,686 175 (1,558) Income (loss) from continuing operations (80,422) 7,312 (17,786) Discontinued operations: Income (loss) on disposal of discontinued business 1,061 (1,553) 176 Income tax (expense) benefit related to discontinued business (392) 573 (66) Income (loss) from discontinued operations 669 (980) 110 Net income (loss) (79,753) 6,332 (17,676) Less: Net income attributable to noncontrolling interests (5,914) (144) (4,495) Net income (loss) attributable to Harsco Corporation $(85,667) $6,188 $(22,171) Amounts attributable to Harsco Corporation common stockholders: Income (loss) from continuing operations, net of tax $(86,336) $7,168 $(22,281) Income (loss) from discontinued operations, net of tax 669 (980) 110 Net income (loss) attributable to Harsco Corporation common stockholders $(85,667) $6,188 $(22,171) Weighted average shares of common stock outstanding 80,333 80,234 80,884 Basic earnings (loss) per share attributable to Harsco Corporation common stockholders:Continuing operations $(1.07) $0.09 $(0.28) Discontinued operations 0.01 (0.01) — Basic earnings (loss) per share attributable to Harsco Corporation common stockholders $(1.07)(a)$0.08 $(0.27)(a) Diluted weighted average shares of common stock outstanding 80,333 80,365 80,884 Diluted earnings (loss) per share attributable to Harsco Corporation common stockholders:Continuing operations $(1.07) $0.09 $(0.28) Discontinued operations 0.01 (0.01) — Diluted earnings (loss) per share attributable to Harsco Corporation common stockholders $(1.07)(a)$0.08 $(0.27)(a)(a)Does not total due to rounding.See accompanying notes to consolidated financial statements.44 Table of ContentsHARSCO CORPORATIONCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Years ended December 31(In thousands) 2016 2015 2014Net income (loss) $(79,753) $6,332 $(17,676)Other comprehensive income (loss): Foreign currency translation adjustments, net of deferred income taxes of $(13,670), $(2,314) and$7,151 in 2016, 2015 and 2014, respectively (21,560) (88,255) (47,695)Net gain (loss) on cash flow hedging instruments, net of deferred income taxes of $(544), $(975) and$(338) in 2016, 2015 and 2014, respectively (682) 8,617 (1,957)Pension liability adjustments, net of deferred income taxes of $34, $1,443 and $17,554 in 2016, 2015and 2014, respectively (71,398) 93,582 (113,596)Unrealized gain (loss) on marketable securities, net of deferred income taxes of $(16), $10 and $(3) in2016, 2015 and 2014, respectively 26 (16) 5Total other comprehensive income (loss) (93,614) 13,928 (163,243)Total comprehensive income (loss) (173,367) 20,260 (180,919)Less: Comprehensive (income) loss attributable to noncontrolling interests (3,334) 2,496 (2,893)Comprehensive income (loss) attributable to Harsco Corporation $(176,701) $22,756 $(183,812)See accompanying notes to consolidated financial statements.45 Table of ContentsHARSCO CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31(In thousands) 2016 2015 2014Cash flows from operating activities: Net income (loss) $(79,753) $6,332 $(17,676)Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation 129,083 144,652 164,588Amortization 12,403 11,823 11,738Change in fair value to the unit adjustment liability and loss on dilution and sale of equitymethod investment 58,494 8,491 9,740Contract estimated forward loss provision for Harsco Rail Segment 45,050 — —Loss on early extinguishment of debt 35,337 — —Deferred income tax expense (benefit) (7,654) 5,174 7,241Equity in (income) loss of unconsolidated entities, net (5,686) (175) 1,558Dividends from unconsolidated entities 16 28 —Loss on disposal of the Harsco Infrastructure Segment — — 2,911Other, net 2,085 (6,429) 39,376Changes in assets and liabilities, net of acquisitions and dispositions of businesses:Accounts receivable 16,041 41,650 6,475Inventories (12,313) (44,806) (20,788)Accounts payable (20,285) (401) (29,416)Accrued interest payable (3,197) (2,753) 70Accrued compensation 8,865 (10,319) 5,699Advances on contracts and other customer advances 14,485 (795) 92,769Retirement plan liabilities, net (20,420) (24,593) (27,775)Harsco 2011/2012 Restructuring Program accrual — (398) (2,672)Other assets and liabilities (12,766) (5,974) (17,111)Net cash provided by operating activities 159,785 121,507 226,727Cash flows from investing activities: Purchases of property, plant and equipment (69,340) (123,552) (208,859)Proceeds from the Infrastructure Transaction — — 15,699Proceeds from sales of assets 9,305 25,966 14,976Purchase of businesses, net of cash acquired* (26) (7,788) (26,336)Payment of unit adjustment liability — (22,320) (22,320)Proceeds from sale of equity investment 165,640 — —Other investing activities, net 17,308 (2,679) (2,721)Net cash provided (used) by investing activities 122,887 (130,373) (229,561)Cash flows from financing activities: Short-term borrowings, net (2,350) 18,875 8,851Current maturities and long-term debt: Additions 720,727 427,996 177,499Reductions (979,567) (399,533) (131,007)Cash dividends paid on common stock (4,105) (65,730) (66,322)Dividends paid to noncontrolling interests (1,702) (4,498) (2,186)Purchase of noncontrolling interests (4,731) (395) —Common stock acquired for treasury — (12,143) (941)Proceeds from cross-currency interest rate swap termination 16,625 75,057 —Deferred pension underfunding payment to unconsolidated affiliate (20,640) (7,688) (7,688)Deferred financing costs (16,530) (9,487) —Net cash provided (used) by financing activities (292,273) 22,454 (21,794)Effect of exchange rate changes on cash 1,724 3,325 (6,134)Net increase (decrease) in cash and cash equivalents (7,877) 16,913 (30,762)Cash and cash equivalents at beginning of period 79,756 62,843 93,605Cash and cash equivalents at end of period $71,879 $79,756 $62,843 46 Table of ContentsHARSCO CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) Years ended December 31(In thousands) 2016 2015 2014*Purchase of businesses, net of cash acquired Working capital $— $(560) $(1,107)Property, plant and equipment — (72) (330)Goodwill — (3,490) (6,839)Intangible Assets — (4,078) (17,575)Other noncurrent assets and liabilities, net (26) 412 (485)Net cash used to acquire businesses $(26) $(7,788) $(26,336)See accompanying notes to consolidated financial statements.47 Table of ContentsHARSCO CORPORATIONCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(In thousands, except share and per shareamounts) Common Stock AdditionalPaid-inCapital RetainedEarnings Accumulated OtherComprehensiveIncome (Loss) NoncontrollingInterests Issued Treasury TotalBalances, January 1, 2014 $140,248 $(746,237) $159,025 $1,372,041 $(370,615) $43,093 $597,555Net income (loss) (22,171) 4,495 (17,676)Cash dividends declared: Common @ $0.82 per share (66,321) (66,321)Noncontrolling interests (2,319) (2,319)Total other comprehensive loss, net ofdeferred income taxes of $24,364 (161,641) (1,602) (163,243)Contributions from noncontrolling interests 1,560 1,560Noncontrolling interests transferred in theInfrastructure Transaction (See Note 5, EquityMethod Investment) (905) (905)Vesting of restricted stock units and otherstock grants, net 130,925 shares 196 (714) 2,069 1,551Treasury shares repurchased, 150,000 shares (2,864) (2,864)Amortization of unearned stock-based,compensation, net of forfeitures 4,572 4,572Balances, December 31, 2014 140,444(749,815)165,6661,283,549(532,256)44,322351,910Net income 6,188 144 6,332Cash dividends declared: Common @ $0.666 per share (a) (53,382) (53,382)Noncontrolling interests (4,498) (4,498)Total other comprehensive income (loss), netof deferred income taxes of $(1,836) 16,568 (2,640) 13,928Contributions from noncontrolling interests 2,100 2,100Purchase of subsidiary shares fromnoncontrolling interest (3) (395) (398)Sale of investment in consolidated subsidiary 200 200Vesting of restricted stock units and otherstock grants, net 31,147 shares 59 (264) (99) (304)Treasury shares repurchased, 596,632 shares (10,220) (10,220)Amortization of unearned stock-basedcompensation, net of forfeitures 5,135 5,135Balances, December 31, 2015 140,503 (760,299)170,6991,236,355(515,688)39,233310,803Net income (loss) (85,667) 5,914 (79,753)Cash dividends declared: Noncontrolling interests (1,702) (1,702)Total other comprehensive loss, net ofdeferred income taxes of $(14,196) (91,034) (2,580) (93,614)Purchase of subsidiary shares fromnoncontrolling interest (5,128) 397 (4,731)Vesting of restricted stock units and otherstock grants, net 80,598 shares 122 (92) (1,194) (1,164)Amortization of unearned stock-basedcompensation, net of forfeitures 7,724 7,724Balances, December 31, 2016 $140,625 $(760,391)$172,101$1,150,688$(606,722)$41,262$137,563(a)In November 2015, the Company reduced the quarterly dividend to $0.051 per share.See accompanying notes to consolidated financial statements.48 Table of ContentsHARSCO CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. Summary of Significant Accounting PoliciesConsolidationThe consolidated financial statements include all accounts of Harsco Corporation (the "Company"), all entities in which the Company has a controllingvoting interest and variable interest entities required to be consolidated in accordance with generally accepted accounting principles in the U.S.("U.S. GAAP"). Intercompany accounts and transactions have been eliminated among consolidated entities.The Company's management has evaluated all activity of the Company and concluded that subsequent events are properly reflected in the Company'sconsolidated financial statements and notes as required by U.S. GAAP.ReclassificationsCertain reclassifications have been made to prior year amounts to conform with current year classifications.Cash and Cash EquivalentsCash and cash equivalents include cash on hand, demand deposits and short-term investments that are highly liquid in nature and have an original maturityof three months or less.InventoriesInventories are stated at the lower of cost or market. Inventories in the U.S. are principally accounted for using the last-in, first-out ("LIFO") method. TheCompany's remaining inventories are accounted for using the first-in, first-out ("FIFO") or average cost methods. See Note 4, Accounts Receivable andInventories, for additional information.DepreciationProperty, plant and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using, principally, the straight-line method.When property, plant and equipment is retired from service, the cost of the retirement is charged to the allowance for depreciation to the extent of theaccumulated depreciation and the balance is charged to income. Long-lived assets to be disposed of by sale are not depreciated while they are classified asheld-for-sale.LeasesThe Company leases certain property and equipment under noncancelable lease agreements. All lease agreements are evaluated and classified as either anoperating or capital lease in accordance with U.S. GAAP. A lease is classified as a capital lease if any of the following criteria are met: transfer of ownership tothe Company by the end of the lease term; the lease contains a bargain purchase option; the lease term is equal to or greater than 75% of the asset's economiclife; or the present value of future minimum lease payments is equal to or greater than 90% of the asset's fair market value. Operating lease expense isrecognized ratably over the lease term, including rent abatement periods and rent holidays. See Note 6, Property, Plant and Equipment, and Note 8, Debt andCredit Agreements, for additional information on capital leases and Note 9, Operating Leases, for additional information on operating leases.Goodwill and Other Intangible AssetsIn accordance with U.S. GAAP, goodwill is not amortized and is tested for impairment annually, or more frequently if indicators of impairment exist, or if adecision is made to dispose of a business. Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as anoperating segment or one level below for which discrete financial information is available. A significant amount of judgment is involved in determining if anindicator of impairment has occurred. Such indicators may include declining cash flows or operating losses at the reporting unit level, a significant adversechange in legal factors or business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, or a morelikely than not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of, among others.The Company performs the annual goodwill impairment test as of October 1. The Company has five reporting units, only three of which have goodwillassociated with them as of December 31, 2016. Almost all of the Company's goodwill is included in the Harsco Metals & Minerals Segment.49 Table of ContentsThe evaluation of potential goodwill impairment involves comparing the current fair value of each reporting unit to the net book value, including goodwill.The Company uses a discounted cash flow model (“DCF model”) to estimate the current fair value of reporting units, as management believes forecastedoperating cash flows are the best indicator of current fair value. A number of significant assumptions and estimates are involved in the preparation of DCFmodels including future revenues and operating margin growth, the weighted-average cost of capital (“WACC”), tax rates, capital spending, pension funding,the impact of business initiatives, and working capital projections. These assumptions and estimates may vary significantly among reporting units. DCFmodels are based on approved long-range plans for the early years and historical relationships and projections for later years. WACC rates are derived frominternal and external factors including, but not limited to, the average market price of the Company's stock, shares outstanding, book value of the Company'sdebt, the long-term risk free interest rate, and both market and size-specific risk premiums. Due to the many variables noted above and the relative size of theCompany's goodwill, differences in assumptions may have a material impact on the results of the Company's annual goodwill impairment testing. If the netbook value of a reporting unit were to exceed the current fair value, the second step of the goodwill impairment test would currently be required to determineif an impairment existed and the amount of goodwill impairment to record, if any. The second step of the goodwill impairment test compares the net bookvalue of a reporting unit's goodwill with the implied fair value of that goodwill. The implied fair value of goodwill represents the excess of fair value of thereporting unit over the fair value amounts assigned to all of the assets and liabilities of the reporting unit if it were to be acquired in a hypothetical businesscombination and the current fair value of the reporting unit represented the purchase price. As necessary, the Company may use valuation experts to assistwith the second step of the goodwill impairment test.See Note 7, Goodwill and Other Intangible Assets, for additional information.Impairment of Long-Lived Assets (Other than Goodwill)Long-lived assets are reviewed for impairment when events and circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets are reviewed for impairment when events and circumstances indicate the book value of an asset may be impaired. The Company's policy is todetermine if an impairment loss exists when it is determined that the carrying amount of the asset exceeds the sum of the expected undiscounted future cashflows resulting from use of the asset, and its eventual disposition. Impairment losses are measured as the amount by which the carrying amount of the assetexceeds its fair value, normally as determined in either open market transactions or through the use of a DCF model. Long-lived assets to be disposed of arereported at the lower of the carrying amount or fair value less cost to sell. See Note 17, Other Expenses, for additional information.Deferred Financing CostsThe Company has incurred debt issuance costs which are recognized as Long-term debt on the Consolidated Balance Sheets. Debt issuance costs areamortized and recognized as interest expense over the contractual term of the related indebtedness or shorter period if appropriate based upon contractualterms. Whenever indebtedness is modified from its original terms, an evaluation is made whether an accounting modification or extinguishment has occurredin order to determine the accounting treatment for debt issuance costs related to the debt modification.On January 1, 2016, the Company adopted changes issued by the Financial Accounting Standards Board (the "FASB") which required that debt issuancecosts related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability. See Note 2,Recently Adopted and Recently Issued Accounting Standards for additional information.Revenue RecognitionService revenues and product revenues are recognized when they are realized or realizable and when earned. Revenue is realized or realizable and earnedwhen all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company'sprice to the buyer is fixed or determinable and collectability is reasonably assured. Service revenues include the service components of the Harsco Metals &Minerals and Harsco Rail Segments. Product revenues include the Harsco Industrial Segment and the product revenues of the Harsco Metals & Minerals andHarsco Rail Segments.Harsco Metals & Minerals Segment—This Segment provides services predominantly on a long-term, volume-of-production contract basis. Contracts mayinclude both fixed monthly fees as well as variable fees based upon specific services provided to the customer. The fixed-fee portion is recognizedperiodically as earned (normally monthly) over the contractual period. The variable-fee portion is recognized as services are performed and differs fromperiod to period based upon the actual provision of services. This Segment also sells industrial abrasives and roofing granule products. Product revenues arerecognized generally when title and risk of loss transfer, and when all revenue recognition criteria have been met. Title and risk of loss for domesticshipments generally transfer to the customer at the point of shipment. For export sales, title and risk of loss transfer in accordance with the internationalcommercial terms included in the specific customer contract.50 Table of ContentsHarsco Industrial Segment—This Segment sells industrial grating products, high-security fencing, heat exchangers, and heat transfer products. Productrevenues are generally recognized when title and risk of loss transfer, and when all of the revenue recognition criteria have been met. Title and risk of loss fordomestic shipments generally transfer to the customer at the point of shipment. For export sales, title and risk of loss transfer in accordance with theinternational commercial terms included in the specific customer contract or purchase order.Harsco Rail Segment—This Segment sells railway track maintenance equipment, after-market parts and provides railway track maintenance services. Productrevenue is recognized generally when title and risk of loss transfer, and when all of the revenue recognition criteria have been met. Title and risk of loss fordomestic shipments generally transfer to the customer at the point of shipment. For export sales, title and risk of loss transfer in accordance with theinternational commercial terms included in the specific customer contract. Revenue may be recognized subsequent to the transfer of title and risk of loss forcertain product sales, if the specific sales contract includes a customer acceptance clause that provides for different timing. In those situations, revenue isrecognized after transfer of title and risk of loss and after customer acceptance.Certain contracts within the Harsco Rail Segment, which meet specific criteria established in U.S. GAAP, are accounted for as long-term contracts. TheCompany recognizes revenues on two contracts from the federal railway system of Switzerland ("SBB") based on the percentage-of-completion (units-of-delivery) method of accounting, whereby revenues and estimated average costs of the units to be produced under the contracts are recognized as deliveriesare made or accepted. Contract revenues and cost estimates are reviewed and revised, at a minimum quarterly, and adjustments are reflected in the accountingperiod as such amounts are determined. See Note 4, Accounts Receivable and Inventories, for additional information.Accounting for contracts using the percentage-of-completion method requires judgment relative to assessing risks, estimating contract revenues and costs(including estimating any liquidating damages or penalties related to performance) and making assumptions for schedule and technical items. Due to thenumber of years it may take to complete these contracts and the scope and nature of the work required to be performed on those contracts, estimating totalsales and costs at completion is inherently complicated and subject to many variables and, accordingly estimates are subject to change. When adjustments inestimated total contract sales or estimated total costs are required, any changes from prior estimates are recognized in the current period for the inception-to-date effect of such changes. When estimates of total costs to be incurred on a contract, using the percentage-of-completion method, exceed estimates of totalsales to be earned, a provision for the entire loss on the contract is recorded in the period in which the loss is determined.Services are predominantly on a long-term, time-and-materials contract basis. Revenue is recognized when earned as services are performed within the long-term contracts.Income TaxesThe Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for theexpected future tax consequences of the events that have been included in the consolidated financial statements. Under this method, deferred tax assets andliabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect forthe year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in theperiod that includes the enactment date.The Company records deferred tax assets to the extent that the Company believes that these assets will more likely than not be realized. In making suchdeterminations, the Company considers all available positive and negative evidence, including future reversals of existing deferred tax liabilities, projectedfuture taxable income, tax planning strategies and recent financial results. In the event the Company was to determine that it would be able to realize deferredincome tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance would be made that would reduce theprovision for income taxes.The Company prepares and files tax returns based on interpretation of tax laws and regulations and records its provision for income taxes based on theseinterpretations. Uncertainties may exist in estimating the Company's tax provisions and in filing tax returns in the many jurisdictions in which the Companyoperates, and as a result these interpretations may give rise to an uncertain tax position. The tax benefit from an uncertain tax position is recognized when itis more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on itstechnical merits. Each subsequent period the Company determines if existing or new uncertain tax positions meet a more likely than not recognitionthreshold and adjust accordingly.The Company recognizes interest and penalties related to unrecognized tax benefits within Income tax expense in the accompanying ConsolidatedStatements of Operations. Accrued interest and penalties are included in Other liabilities on the Consolidated Balance Sheets.51 Table of ContentsIn general, it is the practice and the intention of the Company to reinvest the undistributed earnings of its non-U.S. subsidiaries. Should the Companyrepatriate future earnings, such amounts would become subject to U.S. taxation upon remittance of dividends and under certain other circumstances, therebygiving recognition to current tax expense and to international tax credits.The significant assumptions and estimates described in the preceding paragraphs are important contributors to the effective tax rate each year.See Note 11, Income Taxes, for additional information.Accrued Insurance and Loss ReservesThe Company retains a significant portion of the risk for U.S. workers' compensation, U.K. employers' liability, automobile, general and product liabilitylosses. During 2016, 2015 and 2014, the Company recorded insurance expense from continuing operations related to these lines of coverage of $15.0million, $13.6 million and $19.1 million, respectively. Reserves have been recorded that reflect the undiscounted estimated liabilities including claimsincurred but not reported. When a recognized liability is covered by third-party insurance, the Company records an insurance claim receivable to reflect thecovered liability. Changes in the estimates of the reserves are included in net income (loss) in the period determined. During 2016, 2015 and 2014, theCompany recorded retrospective insurance reserve adjustments that decreased pre-tax insurance expense from continuing operations for self-insuredprograms by $5.4 million, $8.5 million and $7.0 million, respectively. At December 31, 2016 and 2015, the Company has recorded liabilities of $37.1million and $41.8 million, respectively, related to both asserted as well as unasserted insurance claims. Included in the balances at December 31, 2016 and2015 were $3.5 million and$3.4 million, respectively, of recognized liabilities covered by insurance carriers. Amounts estimated to be paid within one year have been included incurrent caption, Insurance liabilities, with the remainder included in non-current caption, Insurance liabilities, on the Consolidated Balance Sheets.WarrantiesThe Company has recorded product warranty reserves of $6.3 million, $7.8 million and $8.9 million at December 31, 2016, 2015 and 2014, respectively. TheCompany provides for warranties of certain products as they are sold. The following table summarizes the warranty activity for 2016, 2015 and 2014:(In thousands) 2016 2015 2014Warranty reserves, beginning of the year $7,844 $8,886 $9,548Accruals for warranties issued during the year 6,439 3,656 3,208Reductions related to pre-existing warranties (5,611) (3,042) (2,680)Warranties paid (2,372) (1,629) (1,186)Other (principally foreign currency translation) (19) (27) (4)Warranty reserves, end of the year $6,281 $7,844 $8,886Warranty expense and payments are incurred principally in the Harsco Industrial and Harsco Rail Segments. Warranty activity may vary from year to yeardepending upon the mix of revenues and contractual terms related to product warranties.Foreign Currency TranslationThe financial statements of the Company's subsidiaries outside the U.S., except for those subsidiaries located in highly inflationary economies and thoseentities for which the U.S. dollar is the currency of the primary economic environment in which the entity operates, are measured using the local currency asthe functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rates at the balance sheet date. Resulting translationadjustments are recorded in the cumulative translation adjustment account, a separate component of Accumulated other comprehensive loss on theConsolidated Balance Sheets. Income and expense items are translated at average monthly exchange rates. Gains and losses from foreign currencytransactions are included in Operating income (loss) from continuing operations. For subsidiaries operating in highly inflationary economies, and thoseentities for which the U.S. dollar is the currency of the primary economic environment in which the entity operates, gains and losses on foreign currencytransactions and balance sheet translation adjustments are included in Operating income (loss) from continuing operations.Financial Instruments and HedgingThe Company has operations throughout the world that are exposed to fluctuations in related foreign currencies in the normal course of business. TheCompany seeks to reduce exposure to foreign currency fluctuations through the use of forward exchange contracts. The Company does not hold or issuefinancial instruments for trading purposes, and it is the Company's policy to prohibit the use of derivatives for speculative purposes. The Company has aForeign Currency Risk Management Committee that meets periodically to monitor foreign currency risks.52 Table of ContentsThe Company executes foreign currency exchange forward contracts to hedge transactions for firm purchase commitments, to hedge variable cash flows offorecasted transactions and for export sales denominated in foreign currencies. These contracts are generally for 90 days or less; however, where appropriate,longer-term contracts may be utilized. For those contracts that are designated as qualified cash flow hedges, gains or losses are recorded in Accumulated othercomprehensive loss on the Consolidated Balance Sheets.Amounts recorded in Accumulated other comprehensive loss on the Consolidated Balance Sheets are reclassified into operations in the same period orperiods during which the hedged forecasted transaction affects income. The cash flows from these contracts are classified consistent with the cash flows fromthe transaction being hedged (e.g., the cash flows related to contracts to hedge the purchase of fixed assets are included in cash flows from investingactivities, etc.). The Company also enters into certain forward exchange contracts that are not designated as hedges. Gains and losses on these contracts arerecognized in operations based on changes in fair market value. For fair value hedges of a firm commitment, the gain or loss on the derivative and theoffsetting gain or loss on the hedged firm commitment are recognized currently in operations.See Note 15, Financial Instruments, for additional information.Earnings Per ShareBasic earnings per share are calculated using the weighted-average shares of common stock outstanding, while diluted earnings per share reflect the dilutiveeffects of stock-based compensation. Dilutive securities are not included in the computation of loss per share when the Company reports a net loss fromcontinuing operations as the impact would be anti-dilutive. All share and per share amounts are restated for any stock splits and stock dividends that occurprior to the issuance of the financial statements.See Note 13, Capital Stock, for additional information.Use of Estimates in the Preparation of Financial StatementsThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts ofrevenues and expenses. Actual results could differ from those estimates.2. Recently Adopted and Recently Issued Accounting StandardsThe following accounting standards have been adopted in 2016:On January 1, 2016, the Company adopted changes issued by the FASB related to reporting extraordinary and unusual items. The changes simplified incomestatement presentation by eliminating the concept of extraordinary items. The changes became effective for the Company on January 1, 2016. The adoptionof these changes did not have an impact on the Company's consolidated financial statements.On January 1, 2016, the Company adopted changes issued by the FASB related to consolidation. The changes updated consolidation analysis and affectedreporting entities that are required to evaluate whether they should consolidate certain legal entities. The changes became effective for the Company onJanuary 1, 2016. The adoption of these changes did not have an impact on the Company's consolidated financial statements.On January 1, 2016, the Company adopted changes issued by the FASB related to simplifying the presentation of debt issuance costs. The changes requiredthat debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debtliability. In August 2015, the FASB added guidance about the presentation and subsequent measurement of debt issuance costs associated with line-of-creditarrangements. The changes became effective for the Company on January 1, 2016. The adoption of these changes resulted in the reclassification ofapproximately $10 million in deferred financing costs from Other assets to Long-term debt on the Company's consolidated balance sheets for all periodspresented. The Company recorded approximately $9 million of additional deferred financing costs, net, during 2016 associated with the Company's debtrefinancing. See Note 8, Debt and Credit Agreements, for additional information.53 Table of ContentsOn January 1, 2016, the Company adopted changes issued by the FASB related to the determination of whether a cloud computing arrangement includes asoftware license. If a cloud computing arrangement is determined to include a software license, then the customer accounts for the software license elementconsistent with the acquisition of other software licenses. If the arrangement is determined not to contain a software license, the customer should account forthe arrangement as a service contract. The changes became effective for the Company on January 1, 2016. The adoption of these changes did not have amaterial impact on the Company's consolidated financial statements.On January 1, 2016, the Company adopted changes issued by the FASB simplifying the accounting for measurement period adjustments for businesscombinations. The changes resulted in an acquirer no longer being required to retrospectively reflect adjustments to provisional amounts during themeasurement period as if they were recognized as of the acquisition date. Instead the acquirer would record the effect of the change to the provisionalamounts during the measurement period in which the adjustment is identified. The changes also required additional disclosure related to such measurementperiod adjustments. The changes became effective for the Company on January 1, 2016. The adoption of these changes did not have an impact on theCompany's consolidated financial statements; however in the future will have an effect on how the Company reports adjustments to provisional amountsduring the measurement period.In August 2014, the FASB issued changes related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability tocontinue as a going concern and to provide related footnote disclosures. The change became effective for the Company for the annual period endingDecember 31, 2016. The adoption of this change did not have an impact on the Company's consolidated financial statements.In August 2016, the FASB issued changes to address eight specific cash flow presentation issues with the objective of reducing diversity in practice. Theissues identified include: debt prepayments or extinguishment costs; contingent consideration payments made after a business combination; proceeds fromthe settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies);distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and applicationof the predominance principle. During the fourth quarter of 2016, Management early adopted these changes. As a result of the adoption, the only change tothe Consolidated statement of cash flows is that all cash costs related to the early extinguishment of the 5.75% Senior Notes due 2018 (the “Notes”) arereflected as financing activities, whereas prior to the adoption, some companies classified such costs as operating activities. The adoption of these changesdid not have any impact in the previously issued financial statements.The following accounting standards have been issued and become effective for the Company at a future date:In May 2014, the FASB issued changes related to the recognition of revenue from contracts with customers. The changes clarify the principles forrecognizing revenue and develop a common revenue standard. The core principle of the changes is that an entity should recognize revenue to depict thetransfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange forthose goods or services. The changes also require additional disclosures related to revenue recognition. In July 2015, the FASB deferred the effective date ofthese changes by one year, but will permit entities to adopt one year earlier. During 2016, the FASB clarified the implementation guidance for principalversus agent considerations, identifying performance obligations, accounting for intellectual property licenses, collectability, non-cash consideration, thepresentation of sales and other similar taxes, introduced practical expedients related to disclosures of remaining performance obligations and other technicalcorrections and improvements. These changes become effective for the Company on January 1, 2018. Management has not yet finalized its evaluation, butcurrently believes the most significant impact will be with regard to the timing of revenue recognition associated with the air-cooled heat exchanger productgroup of the Harsco Industrial Segment and certain equipment sales in the Harsco Rail Segment. The Company currently recognizes revenues on sucharrangements upon the completion of the efforts associated with these arrangements, but as a result of these changes, revenue from these arrangements will berecognized over time and increase revenue in earlier periods. Management continues to evaluate the effect of the new standard.In July 2015, the FASB issued changes related to the simplification of the measurement of inventory. The changes require entities to measure most inventoryat the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost ormarket. The changes do not apply to inventories that are measured using either the LIFO method or the retail inventory method. The changes becomeeffective for the Company on January 1, 2017. Management has determined that these changes will not have a material impact on the Company'sconsolidated financial statements.54 Table of ContentsIn November 2015, the FASB issued changes that require deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financialposition. The changes apply to all entities that present a classified statement of financial position. The current requirement that deferred tax assets andliabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected. The changes become effective for the Companyon January 1, 2017. Had these changes been adopted, the Company's working capital would have decreased by approximately $27 million and $38 million atDecember 31, 2016 and December 31, 2015, respectively.In February 2016, the FASB issued changes in accounting for leases. The changes introduce a lessee model that brings most leases on the balance sheet. Thechanges also align many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. Furthermore, thechanges address other concerns related to the current leases model such as eliminating the requirement in current guidance for an entity to use bright-linetests in determining lease classification. The changes also require lessors to increase the transparency of their exposure to changes in value of their residualassets and how they manage that exposure. The changes become effective for the Company on January 1, 2019. Management is currently evaluating theimpact of these changes on its consolidated financial statements.In March 2016, the FASB issued changes amending the accounting for stock-based compensation and requiring excess tax benefits and shortfalls to berecognized as a component of income tax expense rather than equity. These changes also require excess tax benefits and shortfalls to be presented as anoperating activity on the Consolidated statement of cash flows and allows an entity to make an accounting policy election to either estimate expectedforfeitures or to account for them as they occur. These changes are effective for reporting periods beginning after December 15, 2016, with early adoptionpermitted. The Company will adopt these changes in the first quarter of 2017 by recording the cumulative impact of applying these changes to retainedearnings, which will be approximately $1 million, related to the Company electing to not estimate forfeitures on stock compensation plans but ratherrecognize forfeitures as they occur. The inclusion of excess tax benefits and shortfalls as a component of the Company’s income tax expense will increasevolatility within the provision for income taxes as the amount of excess tax benefits or deficiencies from stock-based compensation awards are dependent onthe Company's stock price at the date an award vests. Had the Company adopted these changes at the beginning of 2016, income tax expense would not havebeen materially impacted for 2016.In October 2016, the FASB issued changes which eliminate the requirement to defer the recognition of current and deferred income taxes for an intra-entityasset transfer until the asset has been sold to an outside party. Under the new guidance, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The changes become effective for the Company on January 1, 2018 and are to beapplied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.Management is currently evaluating the impact of these changes on its consolidated financial statements.In November 2016, the FASB issued changes that add or clarify guidance on the classification and presentation of restricted cash in the statement of cashflows. The changes become effective for the Company on January 1, 2019 with early adoption permitted. Management has determined that these changes willnot have a material impact on the Company's consolidated financial statements.3. AcquisitionsIn January 2014, the Company acquired Hammco Corporation ("Hammco"), a U.S. manufacturer of high specification air-cooled heat exchangers for thenatural gas and petrochemical processing markets. Hammco has been included in the results of the Harsco Industrial Segment. In March 2015, the Companyacquired Protran Technology ("Protran"), a U.S. designer and producer of safety systems for transportation and industrial applications; and in April 2015, theCompany acquired JK Rail Products, LLC ("JK Rail"), a provider of after-market parts for railroad track maintenance. Protran and JK Rail have been includedin the results of the Harsco Rail Segment. Inclusion of pro forma financial information for these transactions is not necessary as the acquisitions areimmaterial. The purchase price allocations for these acquisitions are final. 55 Table of Contents4. Accounts Receivable and InventoriesAccounts receivable consist of the following:(In thousands) December 31 2016 December 31 2015Trade accounts receivable $248,354 $280,526Less: Allowance for doubtful accounts (11,800) (25,649)Trade accounts receivable, net $236,554 $254,877 Other receivables (a) $21,053 $30,395(a)Other receivables include insurance claim receivables, employee receivables, tax claim receivables and other miscellaneous receivables not included in Trade accounts receivable,netThe decrease in Allowance for doubtful accounts in 2016 is due to the write-off of a previously reserved accounts receivable balances.The following table reflects the provision for doubtful accounts related to trade accounts receivable for the years ended December 31, 2016, 2015 and 2014: Years Ended December 31(In thousands) 2016 2015 2014Provision for doubtful accounts related to trade accounts receivable $(38) $13,047 $9,892Inventories consist of the following:(In thousands) December 31 2016 December 31 2015Finished goods $26,464 $32,586Work-in-process 22,815 30,959Contracts-in-process 54,044 55,786Raw materials and purchased parts 61,450 70,755Stores and supplies 22,908 26,881Total inventories $187,681 $216,967Valued at lower of cost or market: LIFO basis $79,933 $102,309FIFO basis 64,742 64,760Average cost basis 43,006 49,898Total inventories $187,681 $216,967Inventories valued on the LIFO basis at December 31, 2016 and 2015 were approximately $33 million and $32 million, respectively, less than the amounts ofsuch inventories valued at current costs. During 2016, as a result of reducing certain inventory quantities valued on a LIFO basis, net income (loss) decreasedfrom that which would have been recorded under the FIFO basis of valuation by $1.3 million. During 2015 there was no significant impact on net income(loss) as a result of reducing certain inventory quantities valued on a LIFO basis. During 2014, as a result of reducing certain inventory quantities valued onthe LIFO basis, net income (loss) decreased from that which would have been recorded under the FIFO basis of valuation by $0.1 million.Contracts-in-process consist of the following:(In thousands) December 31 2016 December 31 2015Contract costs accumulated to date $90,276 $55,786Estimated forward loss provisions for contracts-in-process (b) (36,232) —Contracts-in-process (c) $54,044 $55,786(b)To the extent that the estimated forward loss provision exceeds accumulated contract costs it is included in Other current liabilities on the Consolidated Balance Sheets. AtDecember 31, 2016 this amount totaled $6.7 million.(c)At December 31, 2016 and December 31, 2015, the Company has $101.1 million and $82.7 million, respectively, of customer advances related to contracts-in-process. Theseamounts are included in Advances on contracts on the Consolidated Balance Sheets.56 Table of ContentsDuring 2016, as a result of increased vendor costs, ongoing discussions with SBB, and increased estimates for commissioning, certification and testing costs,as well as expected settlements with SBB, the Company concluded it will have a loss on the contracts with SBB. The Company recognized an estimatedforward loss provision related to the SBB contracts of$45.1 million for the year ended December 31, 2016 in Costs of products sold on the Consolidated Statements of Operations. There was no estimated forwardloss provision at December 31, 2015 or 2014. The estimated forward loss provision represents the Company's best estimate best on currently availableinformation. It is possible that the Company's overall estimate of costs to complete these contracts may increase which would result in an additionalestimated forward loss provision at such time, but the Company is unable to estimate any further possible loss or range of loss at December 31, 2016.The Company recognized $0.2 million and $1.9 million of revenue for the contracts with SBB for the years endedDecember 31, 2016 and 2015, respectively, under the percentage-of-completion (units-of-delivery) method. The Company recognized no revenue for thecontract with SBB for the year ended December 31, 2014. These revenues did not have a material impact on the Company's gross margins or results ofoperations for these periods. The Company has not yet recognized any revenue associated with the major equipment deliveries under the contracts with SBB.The majority of the equipment deliveries and related revenue recognition under these contracts are expected in 2017 through 2020.5. Equity Method InvestmentsIn November 2013, the Company sold the Company's Harsco Infrastructure Segment into a strategic venture with Clayton, Dubilier & Rice ("CD&R") as partof a transaction that combined the Harsco Infrastructure Segment with Brand Energy & Infrastructure Services, Inc., which CD&R simultaneously acquired(the "Infrastructure Transaction"). As a result of the Infrastructure Transaction, the Company retained an equity interest in Brand Energy & InfrastructureService, Inc. and Subsidiaries ("Brand" or the "Infrastructure strategic venture") which was accounted for as an equity method investment in accordance withU.S. GAAP.As part of the Infrastructure Transaction, the Company was required to make a quarterly payment to the Company's partner in the Infrastructure strategicventure, either (at the Company's election) (i) in cash, with total payments to equal approximately $22 million per year on a pre-tax basis (approximately $15million per year after-tax), or (ii) in kind, through the transfer of approximately 3% of the Company's ownership interest in the Infrastructure strategic ventureon an annual basis (the "unit adjustment liability"). The Company recognized the change in fair value to the unit adjustment liability each period until theCompany was no longer required to make these payments or chose not to make these payments. The change in fair value to the unit adjustment liability was anon-cash expense.In March 2016, the Company elected not to make the quarterly cash payments to the Company's partner in the Infrastructure strategic venture for theremainder of 2016. Instead, the Company transferred approximately 3% of its ownership interest in satisfaction of the Company's 2016 obligation related tothe unit adjustment liability. As a result of not making the quarterly cash payments for 2016, the Company's ownership interest in the Infrastructure strategicventure decreased by approximately 3% and the value of the unit adjustment liability was updated to reflect this change. Accordingly, the book value of theCompany's equity method investment in Brand decreased by $29.4 million and the unit adjustment liability decreased by$19.1 million. The resulting net loss of $10.3 million was recognized in Change in fair value to the unit adjustment liability and loss on dilution and sale ofequity method investment on the Consolidated Statement of Operations. This net loss was a non-cash expense.In September 2016, the Company entered into an Omnibus Agreement with CDR Bullseye Holdings, L.P., Bullseye G.P., LLC, Bullseye Partnership, L.P.,Bullseye Holdings, L.P. and Brand Energy & Infrastructure Holdings, Inc. (the “Brand Entities”), pursuant to which the Brand Entities repurchased theCompany's remaining approximate 26% interest in Brand.In exchange for the Company's interest, (i) the Company received $145 million in cash, net, and (ii) the requirement for the Company to fund certainobligations to Brand through 2018 were satisfied, the present value of which equaled $20.6 million. In addition, the Company received $1.4 million inaccrued but unpaid fees, rent and expenses from the Brand Entities. As a result of the sale, the Company’s obligation to make quarterly payments related tothe unit adjustment liability under the terms of a limited partnership agreement that governed the operation of the strategic venture terminated. The Companyrecognized a loss on the sale of its equity interest in Brand in the amount of $43.5 million which was reflected in Change in fair value to unit adjustmentliability and loss on dilution and sale of equity method investment on the Consolidated Statement of Operations.The Company's equity interest in Brand and book value of the equity investment in Brand at December 31, 2015 were approximately 29% and $250.1million, respectively. The Company's initial underlying equity in the net assets of Brand, upon consummation of the Infrastructure Transaction, wasapproximately $225 million. The difference between the initial fair value57 Table of Contentsof the Company's equity method investment in Brand and Company's underlying equity in the net assets of Brand was determined to be equity methodgoodwill and was not amortized.The Company's proportionate share of Brand's net income or loss is recorded one quarter in arrears. Brand's summarized balance sheet information at June 30,2016 and September 30, 2015 and summarized statement of operations information for the period from October 1, 2015 through June 30, 2016, the yearended September 30, 2015 and the period fromNovember 27, 2013 through September 30, 2014 are summarized as follows:(In thousands) June 30 2016 September 30 2015Summarized Balance Sheet Information of Brand: Current assets $896,933 $806,510Property and equipment , net 884,979 894,537Other noncurrent assets 1,454,951 1,519,722Total assets $3,236,863 $3,220,769 Short-term borrowings, including current portion of long-term debt $14,402 $68,687Other current liabilities 341,979 397,759Long-term debt 1,857,162 1,736,081Other noncurrent liabilities 351,714 383,638Total liabilities 2,565,257 2,586,165Equity 671,606 634,604Total liabilities and equity $3,236,863 $3,220,769(In thousands) Period From October1, 2015 Through June30 2016 (a) Year EndedSeptember 30 2015 Period FromNovember 27 2013Through September30 2014 (b)Summarized Statement of Operations Information of Brand: Net revenues $2,333,561 $2,976,471 $2,559,556Gross profit 499,005 649,596 559,376Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. andSubsidiaries 20,756 605 (4,848)Harsco's equity in income (loss) of Brand 5,686 175 (1,595)(a)The Company's equity method investment in Brand was sold in September 2016; accordingly equity income (loss) was recorded for the period from October 1, 2015 throughJune 30, 2016.(b)The Company's equity method investment in Brand began on November 26, 2013; accordingly, there is only approximately ten months of related equity income (loss). Theresults of the Harsco Infrastructure Segment from January 1, 2013 through the date of closing are reported in the Company's results of operations for 2013.For the years ended 2016, 2015 and 2014, the Company recognized $4.7 million, $8.5 million and $9.7 million, respectively, of change in fair value to theunit adjustment liability, exclusive of the fair value adjustment resulting from the decision not to make the quarterly payments in 2016 and the loss related tothe sale of the Company's interest, in Change in fair value to the unit adjustment liability and loss on dilution and sale of equity method investment on theConsolidated Statement of Operations. The Consolidated Balance Sheets as of December 31, 2015 included balances related to the unit adjustment liabilityof $79.9 million in the current and non-current captions, Unit adjustment liability. As a result of the sale of the Company's equity interest in Brand, there wereno remaining balances related to the unit adjustment liability at December 31, 2016. A reconciliation of beginning and ending balances related to the unitadjustment liability is included in Note 15, Financial Instruments.Balances related to transactions between the Company and Brand are as follows:(In thousands) December 31 2016 December 31 2015Balances due from Brand $— $1,557Balances due to Brand — 21,407The balances between the Company and Brand, at December 31, 2015, related primarily to transition services and the funding of certain transferred definedbenefit pension plan obligations through 2018. As part of the Omnibus Agreement, all remaining balances between Brand and the Company were settledthrough payment.58 Table of Contents6. Property, Plant and EquipmentProperty, plant and equipment consist of the following:(In thousands) EstimatedUseful Lives December 31 2016 December 31 2015Land — $10,606 $10,932Land improvements 5-20 years 15,032 15,277Buildings and improvements (a) 5-40 years 185,657 191,356Machinery and equipment 3-20 years 1,525,156 1,661,914Uncompleted construction — 21,035 36,990Gross property, plant and equipment 1,757,486 1,916,469Less: Accumulated depreciation (1,267,231) (1,352,434)Property, plant and equipment, net $490,255 $564,035(a) Buildings and improvements include leasehold improvements that are amortized over the shorter of their useful lives or the initial term of the lease.Included in the amounts are $8.7 million and $16.0 million of property, plant and equipment under capital leases at December 31, 2016 and 2015,respectively.7. Goodwill and Other Intangible AssetsGoodwill by SegmentThe following table reflects the changes in carrying amounts of goodwill by segment for the years ended December 31, 2016 and 2015:(In thousands) Harsco Metals& MineralsSegment HarscoIndustrialSegment HarscoRailSegment ConsolidatedTotalsBalance at December 31, 2014 $400,006 $6,839 $9,310 $416,155Changes to goodwill (493) (33) 3,490(a)2,964Foreign currency translation (18,752) — — (18,752)Balance at December 31, 2015 380,761 6,806 12,800 400,367Changes to goodwill — 33 226 259Foreign currency translation (18,375) — — (18,375)Balance at December 31, 2016 $362,386 $6,839 $13,026 $382,251(a)Changes to goodwill in the Harsco Rail Segment relate to the acquisitions of Protran and JK Rail. See Note 3, Acquisitions, for additional information.The Company's methodology for determining reporting unit fair value is described in Note 1, Summary of Significant Accounting Policies. Performance ofthe Company's 2016 annual impairment test did not result in impairment of any of the Company's reporting units.Intangible AssetsIntangible assets totaled $41.6 million, net of accumulated amortization of $153.5 million at December 31, 2016 and$53.1 million, net of accumulated amortization of $148.7 million at December 31, 2015. The following table reflects these intangible assets by majorcategory: December 31, 2016 December 31, 2015(In thousands) Gross CarryingAmount AccumulatedAmortization Gross CarryingAmount AccumulatedAmortizationCustomer related $146,840 $112,610 $153,287 $111,227Patents 5,729 5,534 5,882 5,495Technology related 25,687 25,634 25,559 23,089Trade names 8,306 4,529 8,303 4,194Other 8,512 5,200 8,701 4,669Total $195,074 $153,507 $201,732 $148,67459 Table of ContentsAmortization expense for intangible assets was $7.9 million, $8.8 million and $9.9 million for 2016, 2015 and 2014, respectively. The following table showsthe estimated amortization expense for the next five fiscal years based on current intangible assets.(In thousands) 2017 2018 2019 2020 2021Estimated amortization expense (b) $5,000 $4,750 $4,500 $4,250 $4,000(b)These estimated amortization expense amounts do not reflect the potential effect of future foreign currency exchange rate fluctuations.8. Debt and Credit AgreementsThe Company has a multi-year revolving credit facility (the "Revolving Credit Facility") that is available for use throughout the world. The following tableillustrates the amount outstanding under the Revolving Credit Facility and available credit at December 31, 2016. December 31, 2016(In thousands) FacilityLimit OutstandingBalance OutstandingLetters of Credit AvailableCreditRevolving Credit Facility (a U.S.-based program) $400,000 $98,000 $43,549 $258,451On December 2, 2015, the Company entered into (i) an amendment and restatement agreement and (ii) a second amended and restated credit agreement(together, the “Financing Agreements”). The Financing Agreements increased the Company's overall borrowing capacity from $500 million to $600 millionby (i) amending and restating the Company’s then existing credit agreement, (ii) establishing a term loan A facility in an initial aggregate principal amountof $250 million, by converting a portion of the outstanding balance under the then existing credit agreement on a dollar-for-dollar basis and (iii) reducing theRevolving Credit Facility limit to $350 million.During September 2016, the Company received approximately $145 million in cash, net, from its sale of its remaining 26% equity interest in theInfrastructure strategic venture. The Company used these proceeds to repay $85.0 million on the term loan A facility and $60.0 million on the RevolvingCredit Facility. Related to the repayment of the term loan A facility, the Company expensed $1.1 million of previously deferred financing costs.In November 2016, the Company entered into a new senior secured credit facility (the “Senior Secured Credit Facility”), consisting of a $400 millionRevolving Credit Facility and a $550 million term loan B facility (the "Term Loan Facility"). Upon closing of the Senior Secured Credit Facility, theCompany amended and extended the existing Revolving Credit Facility, repaid the existing term loan A facility and redeemed, satisfied and discharged theNotes in accordance with the indenture governing the Notes. As a result, a charge of $35.3 million was recorded during the fourth quarter of 2016 consistingprincipally of the cost of early extinguishment of the Notes and the write-off of unamortized deferred financing costs associated with the Company’s existingFinancing Agreements and the Notes, and is reflected in the financing activities section of the Consolidated Statements of Cash Flows as a reduction of long-term debt.Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 87.5 to 200 basis points over the base rate or 187.5 to 300basis points over the adjusted London Interbank Offered Rate ("LIBOR") as defined in the credit agreement governing the Senior Secured Credit Facility (the"Credit Agreement"). Any principal amount outstanding under the Revolving Credit Facility is due and payable on the maturity of the Revolving CreditFacility. The Revolving Credit Facility matures on November 2, 2021. Additionally, upon the completion of the potential sale or separation of the HarscoMetals & Minerals Segment, the Revolving Credit Facility would be reduced, if necessary, to reflect a consolidated net debt to consolidated adjustedEBITDA ratio of 2.5 to 1.0 on a pro-forma basis.Borrowings under the Term Loan Facility bear interest at a rate per annum ranging from 375 to 400 basis points over the base rate or 475 to 500 basis pointsover the adjusted LIBOR rate, subject to a 1% floor, as defined in the Credit Agreement. The Term Loan Facility requires scheduled quarterly payments, eachequal to 0.25% of the original principal amount of the loans under the Term Loan Facility made on the closing date. These payments are reduced by theapplication of any prepayments, and any remaining balance is due and payable on the maturity of the Term Loan Facility. The Term Loan Facility matures onNovember 2, 2023.The Credit Agreement requires certain mandatory prepayments of the Term Loan Facility, subject to certain exceptions, based on net cash proceeds of certainsales or distributions of assets, as well as certain casualty and condemnation events, in some cases subject to reinvestment rights and certain other exceptions;net cash proceeds of any issuance of debt, excluded permitted debt issuances; and a percentage of excess cash flow, as defined by the Credit Agreement,during a fiscal year.60 Table of ContentsThe Senior Secured Credit Facility imposes certain restrictions including, but not limited to, restrictions as to types and amounts of debt of liens that may beincurred by the Company; limitations on increases in dividend payments and limitations on certain acquisitions by the Company.With respect to the Senior Secured Facility, the obligations of the Company are guaranteed by substantially all of the Company’s current and future wholly-owned domestic subsidiaries (“Guarantors”). All obligations under the Senior Credit Facility, and the guarantees of those obligations, are secured, subject tocertain exceptions, by substantially all of the Company’s assets and the assets of the Guarantors.In January 2017, the Company entered into a series of fixed-floating interest rate swaps that cover the period from 2018 through 2021, and had the effect ofconverting $300 million of the Term Loan Facility from floating-rate to fixed-rate. The fixed rates provided by the swaps replace the adjusted LIBOR rate inthe interest calculation, range from 1.65% for 2018 to 2.71% for 2021.At December 31, 2016, the Company had $648.0 million of borrowings under the Senior Secured Credit Facility consisting of $550.0 million under the TermLoan Facility and $98.0 million under the Revolving Credit Facility. At December 31, 2016, of these balances $642.5 million was classified as Long-termdebt and $5.5 million was classified as Current maturities of long-term debt on the Consolidated Balance Sheets. At December 31, 2015, the Company had$415.0 million of borrowings under the Financing Agreements consisting of $250.0 million under the term loan A facility and $165.0 million under theRevolving Credit Facility. At December 31, 2015, of these balances $380.5 million was classified as Long-term debt, $22.0 million was classified as Short-term borrowings and $12.5 million was classified as Current maturities of long-term debt on the Consolidated Balance Sheets.Short-term borrowings amounted to $4.3 million and $30.2 million at December 31, 2016 and 2015, respectively. At December 31, 2016, Short-termborrowings consist primarily of bank overdrafts. At December 31, 2015, Short-term borrowings consist primarily of $22.0 million of Revolving CreditFacility borrowings and bank overdrafts. The weighted-average interest rate for short-term borrowings at December 31, 2016 and 2015 was 6.2% and 4.3%,respectively.Long-term debt consists of the following:(In thousands) December 31 2016 December 31 20155.75% notes due May 15, 2018 $— $449,005Senior Secured Credit Facilities: Term Loan A Facility with an interest rate of 2.9% at December 31, 2015 — 250,000Term Loan B Facility with an interest rate of 6.0% at December 31, 2016 550,000 Revolving Credit Facility with an average interest rate of 3.6% and 3.2% at December 31, 2016 and 2015,respectively 98,000 143,000Other financing payable (including capital leases) in varying amounts due principally through 2017 with aweighted-average interest rate of 5.7% and 5.6% at December 31, 2016 and 2015, respectively 25,410 38,830Total debt obligations 673,410 880,835Less: deferred financing costs (18,597) (10,130)Total debt obligations, net of deferred financing costs 654,813 870,705Less: current maturities of long-term debt (25,574) (25,084)Long-term debt $629,239 $845,621The maturities of long-term debt for the four years following December 31, 2017 are as follows:(In thousands) 2018 $9,9242019 6,2172020 5,6642021 103,531Cash payments for interest on debt were $49.6 million, $44.4 million and $44.2 million in 2016, 2015 and 2014, respectively.The Credit Agreement contains a consolidated net debt to consolidated adjusted earnings before interest, tax, depreciation and amortization ("EBITDA")ratio covenant, which is not to exceed 4.0 to 1.0, and a minimum consolidated adjusted EBITDA to consolidated interest charges ratio covenant, which is notto be less than 3.0 to 1.0. The consolidated net debt to consolidated adjusted EBITDA ratio covenant is reduced to 3.75 to 1.0 after December 31, 2016 and to3.5 to 1.0 after December 31, 2017. At December 31, 2016, the Company was in compliance with these and all other covenants.61 Table of Contents9. Operating LeasesThe Company leases certain property and equipment under noncancelable operating leases. Rental expense under such operating leases was $16.9 million,$18.9 million and $19.7 million in 2016, 2015 and 2014, respectively.Future minimum payments under operating leases with noncancelable terms are as follows:(In thousands) 2017 $12,4822018 9,1872019 7,4292020 6,4342021 5,040After 2021 16,932Total minimum rentals to be received in the future under noncancelable subleases at December 31, 2016 are $1.1 million.10. Employee Benefit PlansPension BenefitsThe Company has defined benefit pension plans covering a substantial number of employees. The defined benefits for salaried employees generally are basedon years of service and the employee's level of compensation during specified periods of employment. Defined benefit pension plans covering hourlyemployees generally provide benefits of stated amounts for each year of service. The multiemployer pension plans ("MEPPs"), in which the Companyparticipates, provide benefits to certain unionized employees. The Company's funding policy for qualified plans is consistent with statutory regulations andcustomarily equals the amount deducted for income tax purposes. Periodic voluntary contributions are made, as recommended, by the Company's PensionCommittee. The Company's policy is to amortize prior service costs of defined benefit pension plans over the average future service period of active planparticipants.For most U.S. defined benefit pension plans and a majority of international defined benefit pension plans, accrued service is no longer granted. In place ofthese plans, the Company has established defined contribution plans providing for the Company to contribute a specified matching amount for participatingemployees' contributions to the plan. For U.S. employees, this match is made on employee contributions up to 4% of eligible compensation. Additionally,the Company may provide a discretionary contribution for eligible employees. There have been no discretionary contributions provided for the years 2016,2015 and 2014. For non-U.S. employees, this match is up to 6% of eligible compensation with an additional 2% going towards insurance and administrativecosts.Net periodic pension cost ("NPPC") for U.S. and international plans for 2016, 2015 and 2014 is as follows: U.S. Plans International Plans(In thousands) 2016 2015 2014 2016 2015 2014Defined benefit pension plans: Service cost $3,783 $2,889 $2,233 $1,585 $1,648 $1,610Interest cost 10,165 12,357 12,868 26,822 36,282 43,230Expected return onplan assets (14,402) (16,812) (16,786) (42,979) (50,091) (49,927)Recognized priorservice costs 63 81 90 189 188 184Recognized losses 5,493 4,919 3,352 12,002 16,875 14,102Settlement/curtailmentloss (gain) 276 — — 79 (23) 60Defined benefit pensionplan cost (income) 5,378 3,434 1,757 (2,302) 4,879 9,259Multiemployer pensionplans 636 853 1,199 1,368 1,463 1,762Defined contributionplans 3,833 3,921 4,704 5,807 6,765 8,033Net periodic pensioncost $9,847 $8,208 $7,660 $4,873 $13,107 $19,05462 Table of ContentsThe change in the financial status of the defined benefit pension plans and amounts recognized on the Consolidated Balance Sheets at December 31, 2016and 2015 are as follows: U.S. Plans International Plans(In thousands) 2016 2015 2016 2015Change in benefit obligation: Benefit obligation at beginning of year $307,390 $325,319 $900,104 $1,049,603Service cost 3,783 2,889 1,585 1,648Interest cost 10,165 12,357 26,822 36,282Plan participants' contributions — — 68 61Amendments — — — 47Actuarial (gain) loss 5,223 (14,417) 194,469 (85,028)Settlements/curtailments — — (1,527) (250)Benefits paid (20,909) (18,758) (32,079) (38,197)Effect of foreign currency — — (137,082) (64,062)Benefit obligation at end of year $305,652 $307,390 $952,360 $900,104Change in plan assets: Fair value of plan assets at beginning of year $208,870 $233,350 $755,966 $791,045Actual return on plan assets 15,289 (8,011) 105,027 22,602Employer contributions 2,021 2,289 17,192 27,402Plan participants' contributions — — 68 61Settlements/curtailments — — (1,527) (250)Benefits paid (20,909) (18,758) (31,485) (37,693)Effect of foreign currency — — (112,498) (47,201)Fair value of plan assets at end of year $205,271 $208,870 $732,743 $755,966 Funded status at end of year $(100,381) $(98,520) $(219,617) $(144,138)Amounts recognized on the Consolidated Balance Sheets for defined benefit pension plans consist of the following at December 31, 2016 and 2015: U.S. Plans International Plans December 31 December 31(In thousands) 2016 2015 2016 2015Noncurrent assets $668 $229 $1,118 $1,229Current liabilities 2,278 2,072 505 479Noncurrent liabilities 98,771 96,678 220,230 144,888Accumulated other comprehensive loss before tax 161,075 162,571 434,868 376,641Amounts recognized in Accumulated other comprehensive loss, before tax, for defined benefit pension plans consist of the following at December 31, 2016and 2015: U.S. Plans International Plans(In thousands) 2016 2015 2016 2015Net actuarial loss $161,042 $162,475 $433,626 $375,725Prior service cost 33 96 1,242 916Total $161,075 $162,571 $434,868 $376,641The estimated amounts that will be amortized from Accumulated other comprehensive loss into defined benefit pension plan NPPC in 2017 are as follows:(In thousands) U.S. Plans International PlansNet actuarial loss $5,701 $15,627Prior service cost 33 175Total $5,734 $15,802The Company's estimate of expected contributions to be paid in 2017 for the U.S. and international defined benefit plans are $6.3 million and $16.6 million,respectively.63 Table of ContentsFuture Benefit PaymentsThe expected benefit payments for defined benefit pension plans over the next ten years are as follows:(In millions) 2017 2018 2019 2020 2021 2022-2026U.S. Plans $19.8 $19.3 $19.0 $19.0 $19.0 $95.0International Plans 32.7 33.6 34.5 35.9 37.4 203.2Net Periodic Pension Cost and Defined Benefit Pension Obligation AssumptionsThe weighted-average actuarial assumptions used to determine the defined benefit pension plan NPPC for 2016, 2015 and 2014 were as follows: U.S. PlansDecember 31 International PlansDecember 31 Global Weighted-AverageDecember 31 2016 2015 2014 2016 2015 2014 2016 2015 2014Discount rates 4.2% 3.9% 4.7% 3.8% 3.7% 4.7% 3.9% 3.7% 4.7%Expected long-term ratesof return on plan assets 7.3% 7.5% 7.5% 6.5% 6.8% 6.8% 6.7% 7.0% 7.0%Rates of compensationincrease 3.0% 3.0% 3.0% 3.2% 3.2% 3.4% 3.2% 3.2% 3.4%The expected long-term rates of return on defined benefit pension plan assets for the 2017 NPPC are 7.3% for the U.S. plans and 5.9% for the internationalplans. The expected global long-term rate of return on assets for 2017 is 6.2%.The weighted-average actuarial assumptions used to determine the defined benefit pension plan obligations atDecember 31, 2016 and 2015 were as follows: U.S. Plans International Plans Global Weighted-Average December 31 December 31 December 31 2016 2015 2016 2015 2016 2015Discount rates 4.0% 4.2% 2.8% 3.8% 3.1% 3.9%Rates of compensation increase —% 3.0% 3.3% 3.2% 3.3% 3.2%The U.S. discount rate was determined using a yield curve that was produced from a universe containing approximately 700 U.S. dollar-denominated, AA-graded corporate bonds, all of which were noncallable (or callable with make-whole provisions), and excluding the10% of the bonds with the highest yieldsand the 10% with the lowest yields within each maturity group. The discount rate was then developed as the level-equivalent rate that would produce thesame present value as that using spot rates to discount the projected benefit payments. For international plans, the discount rate is aligned to corporate bondyields in the local markets, normally AA-rated corporations. The process and selection seeks to approximate the cash inflows with the timing and amounts ofthe expected benefit payments.The Company changed the method utilized to estimate the service cost and interest cost components of NPPC for defined benefit pension plans for 2016 andlater. The more precise application of discount rates for measuring both service costs and interest costs employs yield curve spot rates on a year-by-yearexpected cash flow basis, using the same yield curves that the Company has previously used. This change in method represents a change in accountingestimate and has been accounted for in the period of change. This change in method decreased the Company's NPPC by approximately $7 million for 2016,compared to what NPPC would have been under the prior method.Accumulated Benefit ObligationThe accumulated benefit obligation for all defined benefit pension plans at December 31, 2016 and 2015 was as follows: U.S. Plans International Plans December 31 December 31(In millions) 2016 2015 2016 2015Accumulated benefit obligation $305.7 $307.4 $946.3 $894.864 Table of ContentsDefined Benefit Pension Plans with Accumulated Benefit Obligation in Excess of Plan AssetsThe projected benefit obligation, accumulated benefit obligation and fair value of plan assets for defined benefit pension plans with accumulated benefitobligations in excess of plan assets at December 31, 2016 and 2015 were as follows: U.S. Plans International Plans December 31 December 31(In millions) 2016 2015 2016 2015Projected benefit obligation $296.7 $297.5 $913.0 $876.9Accumulated benefit obligation 296.7 297.5 910.0 871.9Fair value of plan assets 195.6 198.8 694.9 731.6The asset allocations attributable to the Company's U.S. defined benefit pension plans at December 31, 2016 and 2015, and the long-term target allocation ofplan assets, by asset category, are as follows: Target Long-TermAllocation Percentage of Plan AssetsDecember 31U.S. Plans Asset Category 2016 2015Domestic equity securities 33%-43% 39.7% 37.2%International equity securities 14%-24% 18.5% 18.5%Fixed income securities 28%-38% 30.9% 32.6%Cash and cash equivalents Less than 5% 1.0% 1.7%Other (a) 5%-15% 9.9% 10.0%(a)Investments within this caption include diversified global asset allocation funds.Defined benefit pension plan assets are allocated among various categories of equities, fixed income securities and cash and cash equivalents withprofessional investment managers whose performance is actively monitored. The primary investment objective is long-term growth of assets in order to meetpresent and future benefit obligations. The Company periodically conducts an asset/liability modeling study and accordingly adjusts investments amongand within asset categories to ensure the long-term investment strategy is aligned with the profile of benefit obligations.The Company reviews the long-term expected return on asset assumption on a periodic basis taking into account a variety of factors including the historicalinvestment returns achieved over a long-term period, the targeted allocation of plan assets and future expectations based on a model of asset returns for anactively managed portfolio. The model simulates 1,000 different capital market results over 20 years. For both 2017 and 2016, the expected return-on-assetassumption for U.S. defined benefit pension plans was 7.3%.The U.S. defined benefit pension plans' assets include 450,000 shares of the Company's common stock at bothDecember 31, 2016 and 2015, valued at $6.1 million and $3.5 million, respectively. These shares represented 3.0% and 1.7% of total U.S. plan assets atDecember 31, 2016 and 2015, respectively. There was less than $0.1 million of dividends paid to the U.S. defined benefit pension plan on the Company'scommon stock during 2016. Dividends paid to the U.S. defined benefit pension plan on the Company's common stock amounted to $0.4 million in 2015.The asset allocations attributable to the Company's international defined benefit pension plans at December 31, 2016 and 2015 and the long-term targetallocation of plan assets, by asset category, are as follows:International Plans Asset Category Target Long-TermAllocation Percentage of Plan AssetsDecember 31 2016 2015Equity securities 32.5% 37.1% 33.7%Fixed income securities 42.5% 43.9% 43.3%Cash and cash equivalents — 0.3% 0.3%Other (b) 25.0% 18.7% 22.7%(b) Investments within this caption include diversified growth funds, real estate funds and infrastructure funds.International defined benefit pension plan assets at December 31, 2016 in the U.K. defined benefit pension plan amounted to approximately 94% of theinternational defined benefit pension plan assets. The U.K. plan assets are allocated among various categories of equities, fixed income securities and cashand cash equivalents with professional investment managers whose performance is actively monitored. The primary investment objective is long-term growthof assets in order to meet present and future benefit obligations. The Company periodically conducts asset/liability modeling studies and accordingly adjustsinvestment amounts within asset categories to ensure the long-term investment strategy is aligned with the profile of benefit obligations.65 Table of ContentsFor the international long-term rate of return assumption, the Company considered the current level of expected returns in risk-free investments (primarilygovernment bonds); the historical level of the risk premium associated with other asset classes in which the portfolio is invested; and the expectations forfuture returns of each asset class and plan expenses. The expected return for each asset class was then weighted based on the target asset allocation to developthe expected long-term rate of return on assets. The 2017 and 2016, the expected return on asset assumption for the U.K. plan was 5.8% and 6.6%,respectively. The remaining international defined benefit pension plans, with plant assets representing approximately 6% of the international defined benefitpension plan assets, are under the guidance of professional investment managers and have similar investment objectives.The fair values of the Company's U.S. defined benefit pension plans' assets at December 31, 2016 by asset class are as follows:(In thousands) Total Level 1 Level 2Domestic equities: Common stocks $27,339 $27,339 $—Mutual funds—equities 54,102 9,928 44,174International equities—mutual funds 37,948 37,948 —Fixed income investments: U.S. Treasuries and collateralized securities 14,240 — 14,240Corporate bonds and notes 11,457 11,457 —Mutual funds—bonds 37,745 11,927 25,818Other—mutual funds 20,346 20,346 —Cash and money market accounts 2,094 2,094 —Total $205,271 $121,039 $84,232The fair values of the Company's U.S. defined benefit pension plans' assets at December 31, 2015 by asset class are as follows:(In thousands) Total Level 1 Level 2Domestic equities: Common stocks $35,619 $35,619 $—Mutual funds—equities 42,093 11,595 30,498International equities—mutual funds 38,787 38,787 —Fixed income investments: U.S. Treasuries and collateralized securities 15,506 — 15,506Corporate bonds and notes 12,987 12,987 —Mutual funds—bonds 39,594 12,094 27,500Other—mutual funds 20,803 20,803 —Cash and money market accounts 3,481 3,481 —Total $208,870 $135,366 $73,504The fair values of the Company's international defined benefit pension plans' assets at December 31, 2016 by asset class are as follows:(In thousands) Total Level 1 Level 2 Level 3Equity securities: Mutual funds—equities $272,070 $— $272,070 $—Fixed income investments: Mutual funds—bonds 314,098 — 314,098 —Insurance contracts 7,657 — 7,657 —Other: Real estate funds/limited partnerships 23,714 — 23,714 —Other mutual funds 113,345 — 113,345 —Cash and money market accounts 1,859 1,859 — —Total $732,743 $1,859 $730,884 $—66 Table of ContentsThe fair values of the Company's international defined benefit pension plans' assets at December 31, 2015 by asset class are as follows:(In thousands) Total Level 1 Level 2 Level 3Equity securities: Mutual funds—equities $255,937 $— $255,937 $—Fixed income investments: Mutual funds—bonds 320,259 — 320,259 —Insurance contracts 7,306 — 7,306 —Other: Real estate funds / limited partnerships 52,313 — 27,951 24,362Other mutual funds 117,646 — 117,646 —Cash and money market accounts 2,505 2,505 — —Total $755,966 $2,505 $729,099 $24,362The following table summarizes changes in the fair value of Level 3 assets in international defined benefit pension plans for 2016, 2015 and 2014:Level 3 Asset Changes for the Twelve Months Ended December 31 (In thousands) 2016 2015 2014Real Estate Limited Partnership: Balance at beginning of year $24,362 $22,647 $20,423Contributions to partnership — 109 385Cash distributions received — (10,062) (1,614)Actual return related to plan assets (2,387) 11,668 3,453Liquidation of investment (21,975) — —Balance at end of year $— $24,362 $22,647Following is a description of the valuation methodologies used for the defined benefit pension plans' investments measured at fair value:•Level 1 Fair Value Measurements—Investments in interest-bearing cash are stated at cost, which approximates fair value. The fair values of moneymarket accounts and certain mutual funds are based on quoted net asset values of the shares held by the plan at year-end. The fair values ofdomestic and international stocks and corporate bonds, notes and convertible debentures are valued at the closing price reported in the activemarket on which the individual securities are traded.•Level 2 Fair Value Measurements—The fair values of investments in mutual funds for which quoted net asset values in an active market are notavailable are valued by the investment advisor based on the current market values of the underlying assets of the mutual fund based oninformation reported by the investment consistent with audited financial statements of the mutual fund. Further information concerning thesemutual funds may be obtained from their separate audited financial statements. Investments in U.S. Treasury notes and collateralized securities arevalued based on yields currently available on comparable securities of issuers with similar credit ratings.•Level 3 Fair Value Measurements—Real estate limited partnership interests are valued by the general partners based on the underlying assets. Thelimited partnership interests are valued using unobservable inputs and have been classified within Level 3 of the fair value hierarchy.Multiemployer Pension PlansThe Company, through the Harsco Metals & Minerals Segment, contributes to several MEPPs under the terms of collective-bargaining agreements that coverunion-represented employees, many of whom are temporary in nature. The Company's total contributions to MEPPs were $2.0 million, $2.5 million and $3.0million for the years ended December 31, 2016, 2015 and 2014, respectively.67 Table of Contents11. Income TaxesIncome (loss) from continuing operations before income taxes and equity income (loss) as reported on the Consolidated Statements of Operations consists ofthe following:(In thousands) 2016 2015 2014U.S. $(99,939) $16,169 $22,951International 20,468 18,646 (8,813)Total income (loss) from continuing operations before income taxes and equity income(loss) $(79,471) $34,815 $14,138Income tax expense as reported on the Consolidated Statements of Operations consists of the following:(In thousands) 2016 2015 2014Income tax expense (benefit): Currently payable: U.S. federal $(4,088) $408 $5,622U.S. state 365 546 557International 18,014 23,095 14,569Total income taxes currently payable 14,291 24,049 20,748Deferred U.S. federal (8,195) 2,651 3,447Deferred U.S. state 2,238 812 893Deferred international (1,697) 166 5,278Total income tax expense $6,637 $27,678 $30,366Cash payments for income taxes were $14.6 million, $18.9 million and $36.0 million for 2016, 2015 and 2014, respectively.A reconciliation of the normal expected statutory U.S. federal income tax expense (benefit) to the actual income tax expense as reported on the ConsolidatedStatements of Operations is as follows:(In thousands) 2016 2015 2014U.S. federal income tax $(27,815) $12,185 $4,949U.S. state income taxes, net of federal income tax benefit (355) 496 713U.S. domestic manufacturing deductions and credits (661) (2,504) (1,882)Capital loss on sale of equity interest in Brand with no realizable tax benefit 16,106 — —Difference in effective tax rates on international earnings and remittances 2,006 5,095 4,397Uncertain tax position contingencies and settlements (1,886) 1,416 (5,298)Changes in realization on beginning of the year deferred tax assets 1,978 923 2,283Forward Loss Provisions in SBB Contract with no realizable tax benefits 15,768 — —Restructuring and impairment charges with no realizable tax benefits — 8,508 21,969U.S. non-deductible expenses 724 874 1,216(Income) loss related to the Infrastructure Transaction (644) 580 2,592Cumulative effect of change in statutory tax rates/laws (388) 340 246Income (loss) from unconsolidated entities 2,098 62 (587)Other, net (294) (297) (232)Total income tax expense $6,637 $27,678 $30,366At December 31, 2016, 2015 and 2014, the Company's annual effective income tax rate on income from continuing operations was (8.4)%, 79.5% and214.8%, respectively.The Company’s international income from continuing operations before income taxes and equity income (loss) was$20.5 million and $18.6 million for the years ended December 31, 2016 and 2015, respectively. This includes the estimated forward loss provision related tothe SBB contracts of $45.1 million in 2016 and non-recurring impairment charges of$24.3 million in 2015, on which no tax benefit was recognized because the losses occurred in entities where it is not more likely than not that the tax benefitwill be realized. The Company’s differences in effective tax rates on international earnings and remittances for 2016 and 2015 was $2.0 million and $5.1million, respectively. This decrease is primarily due to the change in the mix of earnings between jurisdictions. The above factors together with the non-recurring expiration of statute of limitations for uncertain tax positions in certain jurisdictions and the realization on beginning of year deferred tax assets in2016 decreased the Company’s total international income tax expense, including discrete items, from $23.3 million in 2015 to $16.3 million in 2016.68 Table of ContentsThe Company's loss from continuing operations before income taxes and equity income (loss) attributable to the U.S. was $99.9 million for the year endedDecember 31, 2016 compared to income from continuing operations before income taxes and equity (loss) attributable to the U.S. of $16.2 million for theyear ended December 31, 2015. The loss in 2016 is due principally to the capital loss on the sale of the Company’s equity interest in Brand and the loss onearly extinguishment of debt. A valuation allowance of $16.1 million was established for the deferred tax asset resulting from the capital loss on the sale ofthe Company's equity interest in Brand, because it is not more likely than not that the benefit will be realized in the future. However, the net operating losscreated by the loss on early extinguishment of debt will be realized through a carryback to prior years with taxable income. The Company expects to havetaxable income in future periods in the U.S.The tax effects of the temporary differences giving rise to the Company's deferred tax assets and liabilities at December 31, 2016 and 2015 are as follows: 2016 2015(In thousands) Asset Liability Asset LiabilityDepreciation and amortization $— $10,089 $— $11,474Expense accruals 23,300 — 24,538 —Inventories 6,611 — 5,588 —Provision for receivables 1,015 — 1,049 —Deferred revenue — 1,852 — 1,904Operating loss carryforwards 80,178 — 77,151 —Foreign tax credit carryforwards 26,347 — 19,199 —Capital loss carryforwards 18,163 — 2,102 —Pensions 74,506 — 66,675 —Currency adjustments 17,597 — 28,589 —Equity investment in Infrastructure strategic venture — — — 10,688Unit adjustment liability — — 29,491 —Post-retirement benefits 760 — 869 —Stock based compensation 5,812 — 4,790 —Other 7,206 — 3,656 —Subtotal 261,495 11,941 263,697 24,066Valuation allowance (146,097) — (110,680) —Total deferred income taxes $115,398 $11,941 $153,017 $24,066The deferred tax asset and liability balances recognized on the Consolidated Balance Sheets at December 31, 2016 and 2015 are as follows:(In thousands) 2016 2015Other current assets $27,415 $38,899Other assets 78,944 102,914Other current liabilities 281 767Deferred income taxes 2,621 12,095At December 31, 2016, the tax-effected amount of net operating loss carryforwards ("NOLs") totaled $80.2 million. Tax-effected NOLs from internationaloperations are $68.6 million. Of that amount, $56.7 million can be carried forward indefinitely, and $11.9 million will expire at various times between 2017and 2032. Tax-effected U.S. state NOLs are $11.6 million. Of that amount, $1.4 million expire at various times between 2017 and 2020, $3.6 million expire atvarious times between 2021 and 2025, $3.3 million expire at various times between 2026 and 2030, and $3.3 million expire at various times between 2031and 2036. At December 31, 2016, the tax-effected amount of capital loss carryforwards totaled $18.2 million which expire between 2018 and 2021.69 Table of ContentsThe valuation allowances of $146.1 million and $110.7 million at December 31, 2016 and 2015, respectively, related principally to deferred tax assets forpension liabilities, NOLs, capital losses, foreign currency translation and foreign investment tax credits that are uncertain as to realizability. In 2016, theCompany recorded a valuation allowance of$16.1 million related to capital loss on sale of the Company's equity interest in Brand, $13.5 million related to estimated forward loss provisions related tothe SBB contracts, and current year pension adjustments of $19.2 million recorded through Accumulated other comprehensive loss. This was partially offsetby the reduction from the effects of foreign currency translation adjustments and the decrease related to U.K. and France tax rate changes. In 2015, theCompany recorded a net decrease in the valuation allowance of $16.1 million related to pension adjustments recorded through Accumulated othercomprehensive loss, the decrease from foreign currency translation in the amount of $11.5 million and a $6.3 million decrease related to a U.K. tax ratechange. This was partially offset by a net increase of $13.2 million related to losses in certain jurisdictions where the Company determined that it is morelikely than not that these assets will not be realized.The Company has not provided U.S. income taxes on certain non-U.S. subsidiaries' undistributed earnings as such amounts are indefinitely reinvested outsidethe U.S. At December 31, 2016 and 2015, such earnings were approximately $528 million and $547 million, respectively. It is not practical to determine thedeferred income tax liability on these earnings if, in the future, they are remitted to the U.S. because the income tax liability to be incurred, if any, isdependent on circumstances existing when remittance occurs.The Company recognizes accrued interest and penalty expense related to unrecognized income tax benefits in income tax expense. During 2016 and 2014,the Company recognized an income tax benefit of $1.7 million and $2.1 million, respectively, for interest and penalties primarily due to the expiration ofstatutes of limitation and resolution of examinations. The Company did not recognize any income tax benefit for interest and penalties during 2015. TheCompany has accrued $1.1 million,$2.8 million and $2.8 million for the payment of interest and penalties at December 31, 2016, 2015 and 2014 respectively.A reconciliation of the change in the unrecognized income tax benefits balance from January 1, 2014 to December 31, 2016 is as follows:(In thousands) UnrecognizedIncome TaxBenefits DeferredIncome TaxBenefits UnrecognizedIncome TaxBenefits, Net ofDeferred IncomeTax BenefitsBalances, January 1, 2014 $17,549 $(198) $17,351Additions for tax positions related to the current year (includes currency translationadjustment) 288 (2) 286Additions for tax positions related to prior years (includes currency translationadjustment) 156 (55) 101Other reductions for tax positions related to prior years (3,056) — (3,056)Statutes of limitation expirations (2,481) 143 (2,338)Balance at December 31, 2014 12,456 (112) 12,344Additions for tax positions related to the current year (includes currency translationadjustment) (483) (2) (485)Additions for tax positions related to prior years (includes currency translationadjustment) 1,249 (4) 1,245Other reductions for tax positions related to prior years (7,846) — (7,846)Statutes of limitation expirations (173) 59 (114)Settlements (42) 15 (27)Balance at December 31, 2015 5,161 (44) 5,117Additions for tax positions related to the current year (includes currency translationadjustment) 744 (1) 743Additions for tax positions related to prior years (includes currency translationadjustment) 358 (14) 344Other reductions for tax positions related to prior years (837) — (837)Statutes of limitation expirations (817) 27 (790)Settlements (27) 2 (25)Total unrecognized income tax benefits that, if recognized, would impact the effectiveincome tax rate at December 31, 2016 $4,582 $(30) $4,552Included in the other reductions for tax positions related to prior year for 2015 is $7.8 million resulting from the adjustment by a foreign tax authority as aresult of tax audit. The unrecognized tax benefit was related to a net operating loss carryforward that carried a full valuation allowance. As a result, the relateddeferred tax asset was decreased by the same amount.70 Table of ContentsWithin the next twelve months, it is reasonably possible that up to $0.9 million of unrecognized income tax benefits will be recognized upon settlement oftax examinations and the expiration of various statutes of limitations.The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. With few exceptions, the Company is no longersubject to U.S and international income tax examinations by tax authorities through 2010.12. Commitments and ContingenciesEnvironmentalThe 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 waste disposal sites. While each of these matters is subject to various uncertainties, it is probable that the Companywill agree to make payments toward funding certain of these activities and it is possible that some of these matters will be decided unfavorably to theCompany. The Company has evaluated its potential liability, and its financial exposure is dependent upon such factors as the continuing evolution ofenvironmental 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 did not have any material accruals or record any materialexpenses related to environmental matters during the periods presented.The Company evaluates its liability for future environmental remediation costs on a quarterly basis. Although actual costs to be incurred at identified sites infuture periods may vary from the estimates (given inherent uncertainties in evaluating environmental exposures), the Company does not expect that any coststhat are reasonably possible to be incurred by the Company in connection with environmental matters in excess of the amounts accrued would have amaterial adverse effect on the Company's financial condition, results of operations or cash flows.Brazilian Tax DisputesThe 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 thelegal 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. Inaddition, 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 aregenerally calculated as a percentage of the total assessed amounts due, inclusive of penalty and interest. A large number of the claims relate to value-added("ICMS"), services and social security tax disputes. The largest proportion of the assessed amounts relate to ICMS claims filed by the State RevenueAuthorities from the State of São Paulo, Brazil (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 inrelation to services provided to a customer in the State between January 2004 and May 2005. As of December 31, 2016, the principal amount of the taxassessment from the SPRA with regard to this case is approximately $2 million, with penalty, interest and fees assessed to date increasing such amount by anadditional $23 million. Any change in the aggregate amount since the Company's last Annual Report on Form 10-K, as revised on Form 8-K filed on June 1,2015, is due to an increase in assessed interest and statutorily mandated legal fees for the year, as well as foreign currency translation.Another ICMS tax case involving the SPRA refers to the tax period from January 2002 to December 2003, and is still pending at the administrative phase,where the aggregate amount assessed by the tax authorities in August 2005 was $7.8 million (the amounts with regard to this claim are valued as of the dateof the assessment since it has not yet reached the collection phase), composed of a principal amount of $1.8 million, with penalty and interest assessedthrough that date increasing such amount by an additional $5.9 million. All such amounts include the effect of foreign currency translation.The Company continues to believe that it is not probable it will incur a loss for these assessments by the SPRA. The Company also continues to believe thatsufficient coverage for these claims exists as a result of the Company's customer's indemnification obligations and such customer's pledge of assets inconnection with the October 2009 notice, as required by Brazilian law.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 theultimate outcome of these tax-related disputes in Brazil. No loss provision has been recorded in the Company's consolidated financial statements for thedisputes described above because the loss contingency is not deemed probable, and the Company does not expect that any costs that are reasonably possibleto be incurred by the Company in connection with Brazilian tax disputes would have a material adverse effect on the Company's financial condition, resultsof operations or cash flows.71 Table of ContentsBrazilian Labor DisputesThe Company is subject to collective bargaining and individual labor claims in Brazil through the Harsco Metals & Minerals Segment which allege, amongother things, the Company's failure to pay required amounts for overtime and vacation at certain sites. The Company is vigorously defending itself againstthese claims; however, litigation is inherently unpredictable, particularly in foreign jurisdictions. While the Company does not currently expect that theultimate resolution of these claims will have a material adverse effect on the Company’s financial condition, results of operations or cash flows, it is notpossible to predict the ultimate outcome of these labor-related disputes. The Company is continuing to review all known labor claims and as of December 31, 2016 and 2015, the Company has established reserves of $7.9 millionand $6.9 million, respectively, on the Consolidated Balance Sheets for amounts considered to be probable and estimable. As the Company continues toevaluate these claims and takes actions to address them, the amount of established reserves may be impacted.Customer DisputesThe Company, through its Harsco Metals & Minerals Segment, may, in the normal course of business, become involved in commercial disputes withsubcontractors or customers.During the first quarter of 2015, a rail grinder manufactured by the Company's Harsco Rail Segment and operated by a subcontractor caught fire, causing acustomer to incur monetary damages. Depending on the cause of the fire and the extent of insurance coverage, the Company's results of operations and cashflows may be impacted in future periods.Although results of operations and cash flows for a given period could be adversely affected by a negative outcome in these or other lawsuits, claims orproceedings, management believes that the ultimate outcome of these matters will not have a material adverse effect on the Company's financial condition,results of operations or cash flows.Lima Refinery LitigationOn April 8, 2016, Lima Refining Company filed a lawsuit against the Company in the District Court of Harris County, Texas related to a January 2015explosion at an oil refinery operated by Lima Refining Company. The action seeks approximately more than $106 million in property damages andapproximately $289 million in lost profits and business interruption damages. The action alleges the explosion occurred because of a defect in a heatexchange cooler manufactured by Hammco in 2009, prior to the Company’s acquisition of Hammco in 2014. The Company is vigorously contesting theallegations against it both as to liability for the accident and the amount of the claimed damages. As a result, the Company believes the situation will notresult in a probable loss. The Company has both an indemnity right from the sellers of Hammco and liability insurance coverage under various primary andexcess policies that the Company believes will be available, if necessary, to cover substantially all of any such liability that might ultimately be incurred inthe above action.U.K. Health and Safety Executive MatterIn the third quarter of 2016, a subsidiary in the Company’s Harsco Metals & Minerals Segment, along with one of its customers, was named as a co-defendantin an action brought by the U.K. Health and Safety Executive in the U.K. Crown Court Sitting at Kingston-Upon Hull. The action relates to a fatal accidentinvolving one of the customer’s employees in 2010. The action seeks to levy a fine against the Company. The Company believes that it is not responsible forthe accident and is defending the action vigorously. A loss provision related to this action has not been recorded in the Company’s consolidated financialstatements, because the Company believes that a loss is not probable. However, if the outcome of the proceedings is unfavorable, the Company does notbelieve that it would have a material adverse effect on the Company's financial condition, result of operations or cash flows.OtherThe 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 fromexposure 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.The Company believes that the claims against it are without merit. The Company has never been a producer, manufacturer or processor of asbestos fibers. Anyasbestos-containing part of a Company product used in the past was purchased from a supplier and the asbestos encapsulated in other materials such thatairborne exposure, if it occurred, was not harmful and is not associated with the types of injuries alleged in the pending actions.At December 31, 2016, there were 17,090 pending asbestos personal injury actions filed against the Company. Of those actions, 16,757 were filed in the NewYork Supreme Court (New York County), 111 were filed in other New York State Supreme Court Counties and 222 were filed in courts located in other states.72 Table of ContentsThe complaints in most of those actions generally follow a form that contains a standard damages demand of $20 million or $25 million, regardless of theindividual plaintiff's alleged medical condition, and without identifying any specific Company product.At December 31, 2016, 16,742 of the actions filed in New York Supreme Court (New York County) were on the Deferred/Inactive Docket created by the courtin December 2002 for all pending and future asbestos actions filed by persons who cannot demonstrate that they have a malignant condition or discerniblephysical impairment. The remaining 15 cases in New York County are pending on the Active or In Extremis Docket created for plaintiffs who candemonstrate 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, tosubstantially cover any liability that might ultimately be incurred in the asbestos actions referred to above. The Company believes that a substantial portionof the costs and expenses of the asbestos actions will be 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 intendsto continue its practice of vigorously defending these claims and cases. At December 31, 2016, the Company has obtained dismissal in 27,903 cases bystipulation 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 lossprovision has been recorded in the Company's consolidated financial statements because a loss contingency is not deemed probable or estimable. Despitethis uncertainty, and although results of operations and cash flows for a given period could be adversely affected by asbestos-related actions, the Companydoes not expect that any costs that are reasonably possible to be incurred by the Company in connection with asbestos litigation would have a materialadverse 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 theopinion of management, all such matters are adequately covered by insurance or by established reserves, and, if not so covered, are without merit or are ofsuch 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 liabilities are recorded when it is probable that a liability has been incurred for a particular event and the amount of loss associated with the eventcan be reasonably estimated. Insurance reserves have been estimated based primarily upon actuarial calculations and reflect the undiscounted estimatedliabilities for ultimate losses, including claims incurred but not reported. Inherent in these estimates are assumptions that are based on the Company's historyof claims and losses, a detailed analysis of existing claims with respect to potential value, and current legal and legislative trends. If actual claims differ fromthose projected by management, changes (either increases or decreases) to insurance reserves may be required and would be recorded through income in theperiod the change was determined. When a recognized liability is covered by third-party insurance, the Company records an insurance claim receivable toreflect the covered liability. Insurance claim receivables are included in Other receivables on the Consolidated Balance Sheets. See Note 1, Summary ofSignificant Accounting Policies, for additional information.13. Capital StockThe authorized capital stock of the Company consists of 150,000,000 shares of common stock and 4,000,000 shares of preferred stock, both having a parvalue of $1.25 per share. The preferred stock is issuable in series with terms as fixed by the Board of Directors (the "Board"). No preferred stock has beenissued. Under the Company's Preferred Stock Purchase Rights Agreement (the "Agreement"), the Board authorized and declared a dividend distribution of oneright for each share of common stock outstanding on the record date. The rights may only be exercised if, among other things and with certain exceptions, aperson or group has acquired 15% or more of the Company's common stock without the prior approval of the Board. Each right entitles the holder to purchase1/100th share of Harsco Series A Junior Participating Cumulative Preferred Stock at an exercise price of $230. Once the rights become exercisable, the holderof a right will be entitled, upon payment of the exercise price, to purchase a number of shares of common stock calculated to have a value of two times theexercise price of the right. The rights expire on October 9, 2017, do not have voting power, and may be redeemed by the Company at a price of $0.001 perright at any time until the 10th business day following public announcement that a person or group has accumulated 15% or more of the Company's commonstock. The Agreement also includes an exchange feature. At December 31, 2016 and 2015, 801,750 and 800,944 shares, respectively, of $1.25 par valuepreferred stock were reserved for issuance upon exercise of the rights.73 Table of ContentsThe Company's share repurchase program expired on January 31, 2015. The Board had previously authorized the repurchase of shares of common stock asfollows: Shares Authorized forPurchaseJanuary 1 SharesPurchased Plan Expiration SharesAuthorized forPurchaseDecember 312014 2,000,000 150,000 — 1,850,0002015 1,850,000 596,632 1,253,368 —The following table summarizes the Company's common stock: SharesIssued TreasuryShares (a) OutstandingSharesOutstanding, January 1, 2014 112,198,693 31,519,768 80,678,925Issuance of vested restricted stock units 65,851 4,418 61,433Stock appreciation rights exercised 9,213 2,985 6,228Other stock grants 83,591 20,327 63,264Treasury shares purchased — 150,000 (150,000)Outstanding, December 31, 2014 112,357,348 31,697,498 80,659,850Issuance of vested restricted stock units 47,954 16,807 31,147Treasury shares purchased — 596,632 (596,632)Outstanding, December 31, 2015 112,405,302 32,310,937 80,094,365Issuance of vested restricted stock units 94,572 13,974 80,598Outstanding, December 31, 2016 112,499,874 32,324,911 80,174,963(a)The Company repurchases shares in connection with the issuance of shares under stock-based compensation programs and in accordance with Board authorized share repurchaseprograms.The following is a reconciliation of the average shares of common stock used to compute basic earnings per common share to the shares used to computediluted earnings per common share as shown on the Consolidated Statements of Operations:(In thousands, except per share data) 2016 2015 2014Income (loss) from continuing operations attributable to Harsco Corporation commonstockholders $(86,336) $7,168 $(22,281) Weighted-average shares outstanding—basic 80,333 80,234 80,884Dilutive effect of stock-based compensation — 131 —Weighted-average shares outstanding—diluted 80,333 80,365 80,884Income (loss) from continuing operations per common share, attributable to Harsco Corporation common stockholders:Basic $(1.07) $0.09 $(0.28) Diluted $(1.07) $0.09 $(0.28)The following average outstanding stock-based compensation units were not included in the computation of diluted earnings per share because the effect wasantidilutive:(In thousands) 2016 2015 2014Restricted stock units 810 — 301Stock options 89 98 188Stock appreciation rights 1,458 1,142 912Performance share units 684 278 —74 Table of Contents14. Stock-Based CompensationThe 2013 Equity and Incentive Compensation Plan (the "2013 Plan") authorizes the issuance of up to 6,800,000 shares of the Company's common stock foruse in paying incentive compensation awards in the form of stock options or other equity awards such as restricted stock, restricted stock units ("RSUs"),stock appreciation rights ("SARs"), or performance share units ("PSUs"). Of the 6,800,000 shares authorized, a maximum of 3,400,000 shares may be issued forawards other than option rights or SARs, as defined in the 2013 Plan. The 2016 Non-Employee Directors' Long-Term Equity Compensation Plan (the "2016Plan") authorizes the issuance of up to 400,000 shares of the Company's common stock for equity awards. Both plans have been approved by the Company'sstockholders. At December 31, 2016, there were 3,651,413 shares available for granting equity awards under the 2013 Plan, of which 1,779,549 shares wereavailable for awards other than option rights or SARs. At December 31, 2016, there were 290,002 shares available for granting equity awards under the 2016Plan.Restricted Stock UnitsThe Company's Board approves the granting of performance-based RSUs as the long-term equity component of director, officer and certain key employeecompensation. The RSUs require no payment from the recipient and compensation cost is measured based on the market price of the Company's commonstock on the grant date and is generally recorded over the vesting period. RSUs granted to officers and certain key employees in 2012, and prior, vested on apro-rata basis over a three-year period or upon obtainment of specified retirement criteria. RSUs granted to officers and certain key employees in 2013, either"cliff" vest at the end of three years or upon obtainment of specified retirement criteria. RSUs granted to officers and certain key employees in 2014 and 2015,either "cliff" vest at the end of three years, upon obtainment of specified retirement or years of service criteria. RSUs granted to officers and certain keyemployees in 2016 either vest on a pro-rata basis over three years or upon obtainment of specified retirement or years of service criteria. Upon vesting, eachRSU is exchanged for an equal number of shares of the Company's common stock. The vesting period for RSUs granted to non-employee directors is oneyear, and each RSU is exchanged for an equal number of shares of the Company's common stock following the termination of the participant's service as adirector. RSUs do not have an option for cash payment.The following table summarizes RSUs issued and the compensation expense recorded for the years ended December 31, 2016, 2015 and 2014: RSUs (a) Weighted AverageFair Value Expense(Dollars in thousands, except per unit) 2016 2015 2014Directors: 2013 46,287 $20.60 $— $— $3182014 36,840 $24.80 — 311 6022015 59,985 $15.69 314 627 —2016 109,998 $7.00 513 — —Employees: 2011 17,250 $23.55 — — 32012 141,486 $18.75 — (71)(b)1512013 170,582 $20.63 66 87 3252014 190,832 $25.21 669 504 1,1142015 239,679 $16.53 880 919 —2016 536,773 $7.09 995 — —Total $3,437 $2,377 $2,513(a)Represents number of awards originally issued.(b)Represents the impact of forfeitures during 2015.RSU activity for the year ended December 31, 2016 was as follows: Number of Shares Weighted AverageGrant-DateFair ValueNon-vested at December 31, 2015 438,358 $19.12Granted 646,771 $7.08Vested (102,256) $17.65Forfeited (55,791) $13.90Non-vested at December 31, 2016 927,082 $11.19At December 31, 2016, the total unrecognized compensation cost related to non-vested RSUs was $4.0 million, which will be recognized over a weighted-average period of 1.8 years. There was a $1.1 million decrease in excess tax benefits from RSUs recognized in 2016. There was no change in excess taxbenefits from RSUs recognized in 2015 and 2014.75 Table of ContentsStock Appreciation RightsThe Company may grant SARs to officers and certain key employees under the 2013 Plan. The SARs generally vest on a pro-rata basis from one to five yearsfrom the grant date or upon specified retirement or years of service criteria, and expire no later than ten years after the grant date. The exercise price of theSARs is the fair value on the grant date. Upon exercise, shares of Company's common stock are issued based on the increase in the fair value of theCompany's common stock over the exercise price of the SAR. SARs do not have an option for cash payment.During 2014, the Company issued SARs covering 51,900 shares in April, 255,090 shares in May, 31,405 shares in July, 84,290 shares in August, 15,808shares in September and 12,401 shares in November under the 2013 Plan. During 2015, the Company issued SARs covering 532,615 shares in May under the2013 Plan. During 2016, the Company issued SARS covering 554,719 shares in May, and 21,686 shares in November under the 2013 Plan.The fair value of each SAR grant was estimated on the grant date using a Black-Scholes pricing model with the following assumptions: Risk-free Interest rate Dividend Yield Expected Life(Years) Volatility SAR Grant Price Fair Value of SARMay 2013 Grant 1.17% 3.61% 6.5 44.1% $22.70 $6.86June 2013 Grant 1.41% 3.56% 6.5 44.1% $23.03 $7.07November 2013 Grant 1.91% 3.13% 6.5 43.8% $26.22 $8.60April 2014 Grant 1.98% 3.53% 6.0 44.3% $23.25 $7.25May 2014 Grant (1st) 1.90% 3.16% 6.0 43.2% $25.93 $8.16May 2014 Grant (2nd) 1.82% 3.05% 6.0 42.8% $26.92 $8.47July 2014 Grant 2.00% 3.24% 6.0 41.2% $25.27 $7.55August 2014 Grant 1.92% 3.27% 6.0 41.2% $25.11 $7.46September 2014 Grant 2.03% 3.50% 6.0 40.6% $23.43 $6.72November 2014 Grant 1.78% 4.00% 6.0 38.6% $20.48 $5.17May 2015 Grant 1.70% 4.96% 6.0 35.8% $16.53 $3.39May 2016 Grant 1.39% —% 6.0 42.1% $7.00 $2.93November 2016 Grant 1.74% —% 6.0 43.8% $12.25 $5.38SARs activity for the years ended December 31, 2016 was as follows: Number of Shares Weighted AverageExercise Price Aggregate IntrinsicValue (in millions) (c)Outstanding, December 31, 2015 1,100,410 $20.55 $—Granted 576,405 $7.20 Forfeited/Expired (140,942) $17.58 Outstanding, December 31, 2016 1,535,873 $15.81 $3.4(c)Intrinsic value is defined as the difference between the current market value and the exercise price, for those SARs where the market price exceeds the exercise price.No SARs were exercised in 2016 and 2015. The total intrinsic value of SARs exercised in 2014 was $0.2 million.The following table summarizes information concerning outstanding and exercisable SARs at December 31, 2016: SARs Outstanding SARs ExercisableRange of exercisable prices Vested Non-vested Weighted-AverageExercise Price perShare Weighted-AverageRemainingContractual Life inYears Number Exercisable Weighted-AverageExercise Price perShare$7.00 - $12.25 — 538,862 $7.21 9.36 — $—$16.53 - $22.70 274,632 414,447 $18.44 7.56 274,632 $18.53$23.03 - $26.92 246,717 61,215 $25.00 7.41 246,717 $25.18 521,349 1,014,524 $15.81 7.81 521,349 $21.68Total compensation expense related to SARs was $1.7 million, $1.2 million and $1.0 million for the years ended December 31, 2016, 2015 and 2014,respectively. At December 31, 2016, outstanding SARs have a weighted-average remaining contractual life of 7.81 years and $3.4 million of intrinsic value.Vested and currently exercisable SARs have a weighted-average remaining contractual life of 7.50 years and no aggregate intrinsic value as the exercise pricefor all vested and exercisable76 Table of ContentsSARs exceeds the current market value. At December 31, 2016, total unrecognized compensation expense related to non-vested SARs was $2.5 million,which is expected to be recognized over a weighted average period of 1.7 years.Weighted-average grant date fair value of non-vested SARs for the years ended December 31, 2016 was as follows: Number of Shares Weighted-AverageGrant Date Fair ValueNon-vested shares, December 31, 2015 852,099 $5.04Granted 576,405 $3.02Vested (328,965) $5.40Forfeited (85,015) $4.28Non-vested shares, December 31, 2016 1,014,524 $3.84Performance Share UnitsBeginning in 2014, the Company granted PSUs to officers and certain key employees that may be earned based on the Company's total shareholder returnover the three-year performance period. PSUs are paid out at the end of each performance period based on the Company’s performance, which is measured bydetermining the percentile rank of the total shareholder return of the Company's common stock in relation to the total shareholder return of a specific peergroup of companies. For PSUs issued in 2014 and 2015, the peer group of companies utilized was the S&P Midcap 400 Index. For PSUs issued in 2016, thepeer group of companies utilized is the S&P 600 Industrial Index. The payment of PSUs following the performance period will be based in accordance withthe scale set forth in the PSU agreements, and may range from 0% to 200% of the initial grant. PSUs do not have an option for cash payment.During the year ended December 31, 2014, the Company granted 15,700 shares in April, 82,526 shares in May, 11,487 shares in July, 26,550 shares inAugust, 4,980 shares in September and 3,906 shares in November under the 2013 Plan. During the year ended December 31, 2015, the Company granted237,063 shares in May under the 2013 Plan. During the year ended December 31, 2016, the Company granted 527,249 shares in May and 9,524 shares inNovember under the 2013 plan. The fair value of PSUs granted was estimated on the grant date using a Monte Carlo pricing model with the followingassumptions: Risk-free Interest rate Dividend Yield Expected Life(Years) Volatility Fair Value of PSUApril 2014 Grant 0.75% —% 2.73 34.3% $18.00May 2014 Grant (1st) 0.70% —% 2.65 31.8% $25.26May 2014 Grant (2nd) 0.63% —% 2.61 30.1% $27.53July 2014 Grant 0.74% —% 2.42 26.9% $22.31August 2014 Grant 0.67% —% 2.42 26.9% $21.86September 2014 Grant 0.72% —% 2.29 25.7% $15.26November 2014 Grant 0.55% —% 2.10 26.3% $7.42May 2015 Grant 0.83% —% 2.65 28.5% $14.48May 2016 Grant 0.84% —% 2.65 33.3% $7.19November 2016 Grant 0.96% —% 2.14 35.2% $17.84Total compensation expense related to PSUs was $2.5 million, $1.4 million and $0.9 million for the years ended December 31, 2016, 2015 and 2014,respectively. At December 31, 2016, total unrecognized compensation expense related to non-vested PSUs was $3.3 million, which is expected to berecognized over a weighted average period of 1.7 years.A summary of the Company's non-vested PSU activity during the years ending December 31, 2016 was as follows: Number of Shares Weighted-AverageGrant Date FairValueNon-vested shares, December 31, 2015 315,212 $16.94Granted 536,773$7.38Forfeited (63,217)$12.78Cancellations (d) (96,206) $21.69Non-vested shares, December 31, 2016 692,562$9.25(d)The measurement period for PSUs issued in 2014 ended on December 31, 2016. The Company's total shareholder return compared to the peer group of companies resulted in noshares being issued because no PSUs were earned.77 Table of ContentsStock OptionsThe Company may grant incentive stock options and nonqualified stock options to officers, certain key employees and non-employee directors under theplans noted above. The stock options would generally vest three years from the grant date, which is the date the Board approved the grants, and expire nolater than seven years after the grant date. The exercise price of the stock option would be fair value on the grant date. Upon exercise, a new share ofCompany common stock is issued for each stock option. Stock option activity for the years ended December 31, 2016 was as follows: Number of Shares Weighted AverageExercise Price AggregateIntrinsic Value(in millions)(e)Outstanding, December 31, 2015 90,000 $31.75 $—Forfeited/Expired (35,000) $31.75 $—Outstanding, December 31, 2016 55,000 $31.75 $—(e)Intrinsic value is defined as the difference between the current market value and the exercise price, for those options where the market price exceeds the exercise price.There was no compensation expense related to stock options in 2016 and 2015. Compensation expense related to stock options totaled less than $0.1 millionin 2014. At December 31, 2016 and 2015, there was no unrecognized compensation expense related to non-vested stock options. There were no stock optionsexercised and no net cash proceeds from the exercise of stock options in 2016, 2015 and 2014.The following table summarizes information concerning outstanding and exercisable options at December 31, 2016: Stock Options Outstanding Stock Options ExercisableRange of ExercisablePrices Vested Non-vested Weighted AverageExercisePrice PerShare Weighted AverageRemainingContractualLife inYears NumberExercisable Weighted AverageExercisePrice PerShare$31.75 - $31.75 55,000 — $31.75 1.1 55,000 $31.75During 2014, the Company issued 27,672 common shares to the Interim Chief Executive Officer as part of his compensation agreement. These shares vestedimmediately and were not subject to any holding period restrictions. The fair value of these other stock grants were based on the market price of theCompany's stock at the grant date. Expense recognized in 2014 for these other stock grants totaled $0.7 million. In addition, 55,919 common shares wereissued to other officers and key employees to settle previous fully-vested liability-based long-term incentive award programs.15. Financial InstrumentsOff-Balance Sheet RiskAs collateral for the Company's performance and to insurers, the Company is contingently liable under standby letters of credit, bonds and bank guarantees inthe amounts of $273.1 million, $232.5 million and $269.4 million at December 31, 2016, 2015 and 2014, respectively. The increase at December 31, 2016primarily relates to letters of credit and issuance of surety bonds related to the SBB rail order in the Harsco Rail Segment. The decrease at December 31, 2015primarily relates to the expiration of several guarantees and lower negotiated amounts for certain insurance letters of credit. These standby letters of credit,bonds and bank guarantees are generally in force for up to 3 years. Certain issues have no scheduled expiration date. The Company pays fees to variousbanks and insurance companies that range from 0.4% to 3.5% per annum of the instrument's face value. If the Company were required to obtain replacementstandby letters of credit, bonds and bank guarantees at December 31, 2016 for those currently outstanding, it is the Company's opinion that the replacementcosts would be within the present fee structure.The Company has currency exposures in approximately 30 countries. The Company's primary foreign currency exposures during 2016 were in the EuropeanUnion, the U.K. and Brazil.Off-Balance Sheet Risk—Third-Party GuaranteesDuring June 2014, the Company provided a guarantee to Brand as part of the net working capital settlement related to the Infrastructure Transaction, forcertain matters occurring prior to closing. The remaining term of this guarantee is four years at December 31, 2016. The maximum potential amount of futurepayments related to this guarantee is approximately $3 million at December 31, 2016. There is no recognition of this potential future payment in theconsolidated financial statements as the Company believes the potential for making this payment is remote.78 Table of ContentsThe Company provided an environmental indemnification for property from a lease that terminated in 2006. The term of this guarantee is indefinite, and theCompany would be required to perform under the guarantee only if an environmental matter was discovered on the property relating to the time the Companyleased the property. The Company is not aware of any environmental issues related to this property. The maximum potential amount of future payments(undiscounted) related to this guarantee is estimated to be $3.0 million at December 31, 2016, 2015 and 2014. There is no recognition of this potential futurepayment in the consolidated financial statements as the Company believes the potential for making this payment is remote.Any liabilities related to the Company's obligation to stand ready to act on third-party guarantees are included, Other current liabilities or Other liabilities (asappropriate), on the Consolidated Balance Sheets. Any recognition of these liabilities did not have a material impact on the Company's financial position orresults of operations for 2016, 2015 or 2014.In the normal course of business, legal indemnifications are provided related primarily to the performance of the Company's products and services and patentand trademark infringement of the products and services sold. These indemnifications generally relate to the performance (regarding function, not price) ofthe respective products or services and therefore no liability is recognized related to the fair value of such guarantees.Derivative Instruments and Hedging ActivitiesThe Company uses derivative instruments, including foreign currency exchange forward contracts and cross-currency interest rate swaps ("CCIRs"), tomanage certain foreign currency and interest rate exposures. Derivative instruments are viewed as risk management tools by the Company and are not usedfor trading or speculative purposes.All derivative instruments are recorded on the Consolidated Balance Sheets at fair value. Changes in the fair value of derivatives used to hedge foreigncurrency 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 or forecasted commodity purchases may be accounted for ascash flow hedges, as deemed appropriate, if the criteria for hedge accounting are met. Gains and losses on derivatives designated as cash flow hedges aredeferred in Accumulated other comprehensive loss, a separate component of equity, and reclassified to earnings in a manner that matches the timing of theearnings impact of the hedged transactions. Generally, at December 31, 2016, deferred gains and losses related to asset purchases are reclassified to earningsover 10 to 15 years from the balance sheet date and those related to revenue are deferred until the revenue is recognized. The ineffective portion of all hedges,if any, is recognized currently in earnings.The fair value of outstanding derivative contracts recorded as assets and liabilities on the Consolidated Balance Sheets at December 31, 2016 and 2015 wasas follows: Asset Derivatives Liability Derivatives(In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair ValueDecember 31, 2016 Derivatives designated as hedging instruments:Foreign currency exchange forward contracts Other current assets $473 Other current liabilities $166Cross-currency interest rate swaps Other current assets 514 —Total derivatives designated as hedging instruments $987 $166 Derivatives not designated as hedging instruments:Foreign currency exchange forward contracts Other current assets $4,459 Other current liabilities $3,372 Asset Derivatives Liability Derivatives(In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair ValueDecember 31, 2015 Derivatives designated as hedging instruments:Foreign currency exchange forward contracts Other current assets $1,640 $—Cross-currency interest rate swaps Other assets 15,417 —Total derivatives designated as hedging instruments $17,057 $— Derivatives not designated as hedging instruments:Foreign currency exchange forward contracts Other current assets $4,188 Other current liabilities $1,73879 Table of ContentsAll of the Company's derivatives are recorded on the Consolidated Balance Sheets at gross amounts and not offset. All of the Company's CCIRs and certainforeign currency exchange forward contracts are transacted under International Swaps and Derivatives Association ("ISDA") documentation. Each ISDAmaster agreement permits the net settlement of amounts owed in the event of default. The Company's derivative assets and liabilities subject to enforceablemaster netting arrangements did not result in a net asset or net liability at either December 31, 2016 or 2015.The effect of derivative instruments on the Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Income (Loss) during2016, 2015 and 2014 was as follows:Derivatives Designated as Hedging Instruments(In thousands) Amount ofGain (Loss)Recognized inOtherComprehensiveIncome("OCI") onDerivative—EffectivePortion Location of Gain(Loss) Reclassifiedfrom AccumulatedOCI into Income—EffectivePortionAmount ofGain (Loss)ReclassifiedfromAccumulatedOCI intoIncome—EffectivePortion Location of Gain(Loss) Recognizedin Income onDerivative—IneffectivePortionand AmountExcluded fromEffectivenessTestingAmount ofGain (Loss)Recognizedin Incomeon Derivative—IneffectivePortion andAmountExcludedfrom EffectivenessTesting Twelve Months Ended December 31, 2016:Foreign currency exchange forwardcontracts $1,884 Cost of services andproducts sold$410 $— Cross-currency interest rate swaps (1,549) — Cost of services andproducts sold4,042(a) $335 $410 $4,042 Twelve Months Ended December 31, 2015:Foreign currency exchange forwardcontracts $2,532 Cost of services andproducts sold$53 $— Cross-currency interest rate swaps 9,012 — Cost of services andproducts sold30,359(a) $11,544 $53 $30,359 Twelve Months Ended December 31, 2014:Foreign currency exchange forwardcontracts $358 Cost of services andproducts sold$4 $— Cross-currency interest rate swaps (1,977) — Cost of services andproducts sold39,823(a) $(1,619) $4 $39,823 (a)These gains (losses) offset foreign currency fluctuation effects on the debt principal.Derivatives Not Designated as Hedging Instruments Location of Loss Recognized in Incomeon Derivative Amount of Gain (Loss) Recognized in Income on Derivative for theTwelve Months Ended December 31(b)(In thousands) 2016 2015 2014Foreign currency exchange forward contracts Cost of services and products sold $15,875 $(158) $(2,307)(b)These gains (losses) offset amounts recognized in cost of service and products sold principally as a result of intercompany or third-party foreign currency exposures.Foreign Currency Exchange Forward ContractsThe Company conducts business in multiple currencies and, accordingly, is subject to the inherent risks associated with foreign exchange rate movements.The financial position and results of operations of substantially all of the Company's foreign subsidiaries are measured using the local currency as thefunctional currency. Foreign currency-denominated assets and liabilities are translated into U.S. dollars at the exchange rates existing at the respectivebalance sheet dates, and income and expense items are translated at the average exchange rates during the respective periods. The aggregate effects oftranslating the balance sheets of these subsidiaries are deferred and recorded in Accumulated other comprehensive loss, which is a separate component ofequity.The Company uses derivative instruments to hedge cash flows related to foreign currency fluctuations. Foreign currency exchange forward contractsoutstanding are part of a worldwide program to minimize foreign currency exchange operating income and balance sheet exposure by offsetting foreigncurrency exposures of certain future payments between the Company and various subsidiaries, suppliers or customers. The unsecured contracts are with majorfinancial institutions. The Company80 Table of Contentsmay be exposed to credit loss in the event of non-performance by the contract counterparties. The Company evaluates the creditworthiness of thecounterparties and does not expect default by them. Foreign currency exchange forward contracts are used to hedge commitments, such as foreign currencydebt, firm purchase commitments and foreign currency cash flows for certain export sales transactions.The following tables summarize, by major currency, the contractual amounts of the Company's foreign currency exchange forward contracts in U.S. dollars atDecember 31, 2016 and 2015. The "Buy" amounts represent the U.S. dollar equivalent of commitments to purchase foreign currencies, and the "Sell" amountsrepresent the U.S. dollar equivalent of commitments to sell foreign currencies. The recognized gains and losses offset amounts recognized in cost of servicesand products sold principally as a result of intercompany or third-party foreign currency exposures.Contracted Amounts of Foreign Currency Exchange Forward Contracts Outstanding at December 31, 2016:(In thousands) Type U.S. DollarEquivalent Maturity RecognizedGain (Loss)British pounds sterling Sell $55,120 January 2017 $(228)British pounds sterling Buy 827 March 2017 (14)Euros Sell 326,797 January 2017 through December 2017 628Euros Buy 171,578 January 2017 through January 2018 (468)Other currencies Sell 43,455 January 2017 through September 2017 1,477Other currencies Buy 3,106 March 2017 (1)Total $600,883 $1,394Contracted Amounts of Foreign Currency Exchange Forward Contracts Outstanding at December 31, 2015:(In thousands) Type U.S. DollarEquivalent Maturity RecognizedGain (Loss)British pounds sterling Sell $43,511 January 2016 $822British pounds sterling Buy 2,062 January 2016 (54)Euros Sell 336,397 January 2016 through December 2016 547Euros Buy 167,037 January 2016 through August 2016 2,497Other currencies Sell 35,426 January 2016 through March 2016 316Other currencies Buy 7,981 January 2016 (38)Total $592,414 $4,090In 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 losses of $37.5 million, pre-tax net gains of $2.7 million and pre-tax net gains of $22.6 million related to hedges of netinvestments during 2016, 2015 and 2014, respectively, in Accumulated other comprehensive loss.Cross-Currency Interest Rate SwapsThe Company uses CCIRs in conjunction with certain debt issuances in order to secure a fixed local currency interest rate. Under these CCIRs, the Companyreceives interest based on a fixed or floating U.S. dollar rate and pays interest on a fixed local currency rate based on the contractual amounts in dollars andthe local currency, respectively. At maturity, there is also the payment of principal amounts between currencies. The CCIRs are recorded on the ConsolidatedBalance Sheets at fair value, with changes in value attributed to the effect of the swaps' interest spread and changes in the credit worthiness of the counter-parties recorded in Accumulated other comprehensive loss. Changes in value attributed to the effect of foreign currency fluctuations are recorded on theConsolidated Statements of Operations and offset currency fluctuation effects on the debt principal. The following table indicates the contractual amounts ofthe Company's CCIRs: ContractualAmounts Interest Rates(In millions) Receive PayMaturing 2017 $2.7 Floating U.S. dollar rate Fixed rupee rateDuring March 2016, the Company effected the early termination of the British pound sterling CCIR with an original maturity date of 2020. The Companyreceived $16.6 million in cash related to this termination. During August 2015, the Company effected the early termination of the euro CCIR with an originalmaturity date of 2018. The Company received $75.1 million in cash related to this termination. Euro denominated foreign currency exchange forwardcontracts were entered into later in 2015 that provide similar protection from changes in foreign exchange rates to the terminated CCIR contract. There wasno gain or loss recorded on these terminations as any change in value attributable to the effect of foreign currency translation was previously recognized onthe Consolidated Statements of Operations.81 Table of ContentsFair Value of Derivative Assets and Liabilities and Other Financial InstrumentsFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date (an exit price). The Company utilizes market data or assumptions that the Company believes market participants would use in valuing theasset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique.The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources(observable inputs) and (2) an entity's own assumptions about market participant assumptions based on the best information available in the circumstances(unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active marketsfor identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are describedbelow:•Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.•Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, includingquoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active;inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from orcorroborated by observable market data by correlation or other means.•Level 3—Inputs that are both significant to the fair value measurement and unobservable.In instances in which multiple levels of inputs are used to measure fair value, hierarchy classification is based on the lowest level input that is significant tothe fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entiretyrequires judgment, and considers factors specific to the asset or liability.The following table indicates the fair value hierarchy of the financial instruments of the Company at December 31, 2016 and 2015:Level 2 Fair Value Measurements(In thousands) December 31 2016 December 31 2015Assets Foreign currency exchange forward contracts $4,932 $5,828Cross-currency interest rate swaps 514 15,417Liabilities Foreign-currency forward exchange contracts 3,538 1,738The following table reconciles the beginning and ending balances for liabilities measured on a recurring basis using unobservable inputs (Level 3) for theyears ended December 31, 2016 and 2015:Level 3 Liabilities—Unit Adjustment Liability (c) for the Twelve Months Ended December 31 (In thousands) 2016 2015 Balance at beginning of year $79,934 $93,762 Reduction in the fair value related to election not to make 2016 payments (19,145) — Sale of equity interest in Brand (65,461) — Payments — (22,320) Change in fair value to the unit adjustment liability 4,672 8,491 Balance at end of year $— $79,934(d)(c)See Note 5, Equity Method Investments, for additional information.(d)Does not total due to rounding.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'scredit risk and counterparties' credit risks, and which minimize the use of unobservable inputs. The Company is able to classify fair value balances based onthe ability to observe those inputs. Foreign currency exchange forward contracts and CCIRs are classified as Level 2 fair value based upon pricing modelsusing market-based inputs. Model inputs can be verified, and valuation techniques do not involve significant management judgment.82 Table of ContentsThe carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term borrowings approximate fairvalue due to the short-term maturities of these assets and liabilities. At December 31, 2016 and 2015, the total fair value of long-term debt, including currentmaturities, was $682.9 million and $834.6 million, respectively, compared with a carrying value of $673.4 million and $880.8 million, respectively. Fairvalues for debt are based on quoted market prices (Level 1) for the same or similar issues or on the current rates offered to the Company for debt of the sameremaining maturities.Concentrations of Credit RiskFinancial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accountsreceivable. The Company places cash and cash equivalents with high-quality financial institutions and, by policy, limits the amount of credit exposure toany single institution.Concentrations of credit risk with respect to accounts receivable are generally limited in the Harsco Industrial Segments. However, the Company's HarscoMetals & Minerals Segment and, to a lesser extent, the Harsco Rail Segment have several large customers throughout the world with significant accountsreceivable balances. Consolidation in the global steel or rail industries could result in an increase in concentration of credit risk for the Company.The Company generally does not require collateral or other security to support customer receivables. If a receivable from one or more of the Company's largercustomers becomes uncollectible, it could have a material effect on the Company's results of operations or cash flows.16. Information by Segment and Geographic AreaThe Company reports information about operating segments using the "management approach," which is based on the way management organizes andreports the segments within the enterprise for making operating decisions and assessing performance. The Company's reportable segments are identifiedbased upon differences in products, services and markets served.In 2016, the Company had three reportable segments. These segments and the types of products and services offered include the following:Harsco Metals & Minerals SegmentGlobal expertise in providing on-site services for material logistics, product quality improvement and resource recovery from iron, steel and metalsmanufacturing; as well as value added environmental solutions for industrial co-products. Major customers include steel mills and asphalt roofingmanufacturers.Harsco Industrial SegmentMajor products include air-cooled heat exchangers; industrial grating; high-security fencing and boilers and water heaters. Major customers includeindustrial plants and the non-residential, commercial and public construction and retrofit markets; and the natural gas, natural gas processing andpetrochemical industries.Harsco Rail SegmentThis Segment manufactures railway track maintenance equipment and provides track maintenance services. The major customers include private andgovernment-owned railroads and urban mass transit systems worldwide.Other InformationThe measurement basis of segment profit or loss is operating income (loss). There are no significant inter-segment sales. Corporate assets, at December 31,2016 and 2015, include principally cash, prepaid taxes, fair value of derivative instruments and U.S. deferred income taxes. In addition, Corporate assets atDecember 31, 2015 included the Company's equity method investment in Brand. Countries with revenues from unaffiliated customers or net property, plantand equipment of ten percent or more of the consolidated totals (in at least one period presented) are as follows:83 Table of ContentsInformation by Geographic Area (a) Revenues from Unaffiliated Customers Year Ended December 31(In thousands) 2016 2015 2014U.S. $614,327 $758,820 $880,884U.K. 156,552 217,011 257,885All Other 680,344 747,261 927,519Totals including Corporate $1,451,223 $1,723,092 $2,066,288(a)Revenues are attributed to individual countries based on the location of the facility generating the revenue. Property, Plant and Equipment, Net Balances at December 31(In thousands) 2016 2015 2014U.S. $125,386 $142,506 $151,397China 90,288 97,305 102,842Brazil 62,597 57,381 69,515All Other 211,984 266,843 339,490Totals including Corporate $490,255 $564,035 $663,244No single customer provided in excess of 10% of the Company's consolidated revenues in 2016, 2015 and 2014.In 2016, the Harsco Metals & Minerals Segment had one customer and in 2015 and 2014 two customers that each provided in excess of 10% of thisSegment's revenues under multiple long-term contracts at several mill sites. Should additional consolidations occur involving some of the steel industry'slarger companies which are customers of the Company, it would result in an increase in concentration of credit risk for the Company. The loss of any one ofthe contracts would not have a material adverse effect upon the Company's financial position or cash flows; however, it could have a significant effect onquarterly or annual results of operations.In 2016, the Harsco Industrial Segment had no customers, in 2015 two customers and in 2014 one customer that provided in excess of 10% of the Segment'srevenues. In 2016 and 2014, the Harsco Rail Segment had one customer; and in 2015 two customers that provided in excess of 10% of the Segment'srevenues. The loss of any of these customers would not have a material adverse impact on the Company's financial positions or cash flows; however, it couldhave a material effect on quarterly or annual results of operations.Operating Information by Segment: Twelve Months Ended December 31(In thousands) 2016 2015 2014Revenues Harsco Metals & Minerals $965,540 $1,106,162 $1,378,142Harsco Industrial 247,542 357,256 412,532Harsco Rail 238,107 259,674 275,614Corporate 34 — —Total Revenues $1,451,223 $1,723,092 $2,066,288Operating Income (Loss) Harsco Metals & Minerals $81,634 $26,289 $13,771Harsco Industrial 23,182 57,020 64,114Harsco Rail (17,527) 50,896 37,137Corporate (23,820) (45,669) (45,735)Total Operating Income (Loss) $63,469 $88,536 $69,287 84 Table of Contents Twelve Months Ended December 31(In thousands) 2016 2015 2014Total Assets Harsco Metals & Minerals $1,181,755 $1,294,673 $1,476,538Harsco Industrial 107,987 119,830 127,591Harsco Rail 204,477 219,753 169,035Corporate 87,167 426,941 493,782Total Assets $1,581,386 $2,061,197 $2,266,946Depreciation and Amortization Harsco Metals & Minerals $120,611 $136,579 $159,844Harsco Industrial 7,223 6,266 4,928Harsco Rail 5,383 6,093 5,591Corporate 8,269 7,537 5,963Total Depreciation and Amortization $141,486 $156,475 $176,326Capital Expenditures Harsco Metals & Minerals $62,322 $99,563 $187,665Harsco Industrial 5,118 17,382 9,298Harsco Rail 1,696 1,957 3,120Corporate 204 4,650 8,776Total Capital Expenditures $69,340 $123,552 $208,859Reconciliation of Segment Operating Income to Consolidated Income (Loss) From Continuing Operations Before Income Taxes and Equity Income(Loss): Twelve Months Ended December 31(In thousands) 2016 2015 2014Segment operating income $87,289 $134,205 $115,022General Corporate expense (23,820) (45,669) (45,735)Operating income from continuing operations 63,469 88,536 69,287Interest income 2,475 1,574 1,702Interest expense (51,584) (46,804) (47,111)Loss on early extinguishment of debt (35,337) — —Change in fair value to the unit adjustment liability and loss on dilution and sale of equitymethod investment (58,494) (8,491) (9,740)Income (loss) from continuing operations before income taxes and equity income (loss) $(79,471) $34,815 $14,138Information about Products and Services: Revenues from Unaffiliated Customers Twelve Months Ended December 31(In thousands) 2016 2015 2014Key Product and Services Groups Global expertise in providing on-site services of material logistics, product qualityimprovement and resource recovery for iron, steel and metals manufacturing; as well asvalue added environmental solutions for industrial co-products $965,540 $1,106,162 $1,378,142Railway track maintenance services and equipment 238,107 259,674 275,614Industrial grating and fencing products 115,914 129,869 139,711Air-cooled heat exchangers 93,616 186,243 226,529Heat transfer products 38,012 41,144 46,292General Corporate 34 — —Consolidated Revenues $1,451,223 $1,723,092 $2,066,288 85 Table of Contents17. Other ExpensesDuring 2016, 2015 and 2014, the Company recorded pre-tax other expenses from continuing operations of $12.6 million, $30.6 million and $57.8 million,respectively. The major components of this Consolidated Statements of Operations caption are as follows:(In thousands) 2016 2015 2014Net gains $(1,764) $(10,613) $(6,718)Employee termination benefit costs 10,777 14,914 19,120Other costs to exit activities 440 13,451 4,908Impaired asset write-downs 399 8,170 39,455Foreign currency gains related to Harsco Rail Segment advances on contracts — (10,940) —Harsco Metals & Minerals Segment separation costs 3,235 9,922 —Subcontractor settlement — 4,220 —Other expense (467) 1,449 1,059Total $12,620 $30,573 $57,824Net GainsNet gains result from the sales of redundant properties (primarily land, buildings and related equipment) and non-core assets. In 2016, gains related to assetssold principally in Western Europe, North America and Latin America. In 2015, gains related to assets sold principally in North America and Latin America.In 2014, gains related to assets sold primarily in North America and Latin America. Net Gains(In thousands) 2016 2015 2014Harsco Metals & Minerals Segment $(1,828) $(7,059) $(3,538)Harsco Industrial Segment 64 (3,554) (2,077)Corporate — — (1,103)Total $(1,764) $(10,613) $(6,718)Cash proceeds associated with these gains are included in Proceeds from sales of assets, in the cash flows from investing activities section of the ConsolidatedStatements of Cash Flows.Employee Termination Benefit CostsCosts and the related liabilities associated with involuntary termination benefit costs associated with one-time benefit arrangements provided as part of anexit or disposal activity are recognized by the Company when a formal plan for reorganization is approved at the appropriate level of management andcommunicated to the affected employees. Additionally, costs associated with ongoing benefit arrangements, or in certain countries where statutoryrequirements dictate a minimum required benefit, are recognized when they are probable and estimable.The employee termination benefits costs in 2016 related principally to the Harsco Metals & Minerals Segment, including a probable site exit and the impactof Harsco Metals & Minerals Segment's Improvement Plan ("Project Orion"), primarily in Western Europe, Latin America and North America. The employeetermination benefits costs in 2015 related principally to the Harsco Metals & Minerals Segment, including the impact of Project Orion, primarily in WesternEurope, North America and Asia Pacific. Additionally, employee termination benefits costs were incurred at Corporate. The employee termination benefitscosts in 2014 related primarily to the Harsco Metals & Minerals Segment, including the impact of Project Orion, primarily in Latin America and WesternEurope. Employee Termination Benefit Costs(In thousands) 2016 2015 2014Harsco Metals & Minerals Segment $8,491 $11,454 $18,169Harsco Industrial Segment 947 561 421Harsco Rail Segment 297 145 185Corporate 1,042 2,754 345Total $10,777 $14,914 $19,12086 Table of ContentsOther Costs to Exit ActivitiesCosts associated with exit or disposal activities are recognized as follows:•Costs to terminate a contract that is not a capital lease are recognized when an entity terminates the contract or when an entity ceases using theright conveyed by the contract. This includes the costs to terminate the contract before the end of its term or the costs that will continue to beincurred under the contract for its remaining term without economic benefit to the entity (e.g., lease run-out costs).•Other costs associated with exit or disposal activities (e.g., costs to consolidate or close facilities and relocate equipment or employees) arerecognized and measured at their fair value in the period in which the liability is incurred.In 2016, $0.4 million of exit costs were incurred, principally in North America and Western Europe.In 2015, $13.5 million of exit costs were incurred, principally in the Harsco Metals & Minerals Segment, primarily related to the Middle East, North America,Latin America and Western Europe.Other costs to exit activities during 2015 include costs associated with the Company's exit of operations in Bahrain. Over the past several years the Companyhas been in discussions with officials at the Supreme Council for Environment in Bahrain with regard to a processing by-product ("salt cakes") located atHafeera. During 2015, the Company completed the assessment of options available for processing or removing the salt cakes. As a result, the Company hasentered into a service agreement with a third party for processing the salt cakes and recorded a charge of $7.0 million, payable over five to seven years,related to the estimated cost of processing and disposal. The Company's Bahrain operations are operated under a strategic venture for which its strategicventure partner has a 35% minority interest. Accordingly, the net impact of the charge to the Company's net income (loss) attributable to the Company was$4.6 million.In 2014, $4.9 million of exit costs were incurred, principally in the Harsco Metals & Minerals Segment, primarily related to North America and WesternEurope, partially offset at Corporate by gains from currency translation adjustments recognized in earnings related to historic Harsco Infrastructure Segmententities which were not included as part of the Infrastructure Transaction and retained by the Company. The currency translation adjustments are non-cashitems recognized when the Company has substantially liquidated the related investment in a foreign entity. Costs to Exit Activities(In thousands) 2016 2015 2014Harsco Metals & Minerals Segment $220 $12,638 $6,395Harsco Industrial Segment 40 — —Corporate 180 813 (1,487)Total $440 $13,451 $4,908Impaired Asset Write-downsImpaired asset write-downs are measured as the amount by which the carrying amount of assets exceeds their fair value. Fair value is estimated based upon theexpected future realizable cash flows including anticipated selling prices. Non-cash impaired asset write-downs are included in, Other, net, on theConsolidated Statements of Cash Flows as adjustments to reconcile net income (loss) to net cash provided by operating activities.In 2016, $0.4 million, of impaired asset write-downs were incurred principally in the Harsco Metals & Minerals Segment, mostly in the Asia Pacific region. In2015, $8.2 million of impaired asset write-downs were incurred in the Harsco Metals & Minerals Segment, mostly in North America, Middle East and Africaand the Asia Pacific region. In 2014, $39.5 million of impaired asset write-downs were incurred, principally in the Harsco Metals & Minerals Segment andmostly in Western Europe, the Middle East and Africa and the Asia Pacific region as part of Project Orion. Impaired Asset Write-downs(In thousands) 2016 2015 2014Harsco Metals & Minerals Segment $399 $8,170 $38,791Harsco Industrial Segment — — 74Harsco Rail Segment — — 590Total $399 $8,170 $39,45587 Table of ContentsForeign Currency Gains Related to Harsco Rail Segment Advances on ContractsIn January 2015, the Swiss National Bank ended its policy of maintaining a stable exchange rate between the Swiss franc and the euro. As a result of thischange in policy, the Swiss franc experienced significant appreciation against the euro. During 2015, the Company recognized $10.9 million in foreigncurrency gains primarily related to converting Swiss franc bank deposits to euros. This gain was associated with advances received for the Harsco RailSegment's two contracts with the SBB. Harsco Metals & Minerals Segment Separation CostsThe Company has announced its intention to pursue strategic options for the separation of the Harsco Metals & Minerals Segment from the rest of theCompany. In 2016 and 2015, the Company incurred $3.2 million and $9.9 million of expenses related to the strategic review of this initiative, respectively.Subcontractor SettlementA subcontractor at the site of a large customer in the Harsco Metals & Minerals Segment had filed arbitration against the Company, claiming that it was owedmonetary damages from the Company in connection with its processing certain materials. Additionally, related to this matter, the Company has brought suitagainst its customer which the Company believed had responsibility for any damages. During 2015, all parties involved reached a binding settlementagreement. The Company recorded a charge of $4.2 million related to its obligations under the settlement agreement.18. Components of Accumulated Other Comprehensive LossAccumulated other comprehensive loss is included on the Consolidated Statements of Stockholders' Equity. The components of Accumulated othercomprehensive loss, net of the effect of income taxes, and activity for the years ended December 31, 2016 and 2015 are as follows: Components of Accumulated Other Comprehensive Income (Loss) - Net of Tax(In thousands) CumulativeForeign ExchangeTranslationAdjustments Effective Portionof DerivativesDesignated asHedgingInstruments CumulativeUnrecognizedActuarial Losseson PensionObligations Unrealized Loss onMarketableSecurities TotalBalance at December 31, 2014 $(39,938) $(9,025) $(483,278) $(15) $(532,256)Other comprehensive income (loss) beforereclassifications (66,305)(a)9,796(b)72,796(c)(16) 16,271Other comprehensive income (loss) from equitymethod investee (21,950)(1,232)596—(22,586)Amounts reclassified from accumulated othercomprehensive loss, net of tax — 53 20,190 — 20,243Total other comprehensive income (loss) (88,255) 8,617 93,582 (16) 13,928Less: Other comprehensive loss attributable tononcontrolling interests 2,632 8 — — 2,640Other comprehensive income (loss) attributable toHarsco Corporation (85,623) 8,625 93,582 (16) 16,568Balance at December 31, 2015 $(125,561) $(400) $(389,696) $(31) $(515,688)88 Table of Contents Components of Accumulated Other Comprehensive Income (Loss) - Net of Tax(In thousands) CumulativeForeign ExchangeTranslationAdjustments Effective Portionof DerivativesDesignated asHedgingInstruments CumulativeUnrecognizedActuarial Losseson PensionObligations Unrealized Loss onMarketableSecurities TotalBalance at December 31, 2015 $(125,561) $(400) $(389,696) $(31) $(515,688)Other comprehensive income (loss) beforereclassifications (53,301)(a)(1,650)(b)(86,181)(c)26 (141,106)Amounts reclassified from accumulated othercomprehensive loss, net of tax 1,157 (263) 16,011 — 16,905Realized (gains) losses reclassified fromaccumulated other comprehensive loss inconnection with loss on dilution of equity methodinvestment (See Note 5, Equity MethodInvestments) 28,641 1,636 (1,534) — 28,743Other comprehensive income (loss) from equitymethod investee 1,943 (405) 306 — 1,844Total other comprehensive income (loss) (21,560) (682) (71,398) 26 (93,614)Less: Other comprehensive loss attributable tononcontrolling interests 2,587 (7) — — 2,580Other comprehensive income (loss) attributable toHarsco Corporation (18,973) (689) (71,398) 26 (91,034)Balance at December 31, 2016 $(144,534) $(1,089) $(461,094) $(5) $(606,722)(a)Principally foreign currency fluctuation.(b)Principally net change from periodic revaluations.(c)Principally changes due to annual actuarial remeasurements.Amounts reclassified from accumulated other comprehensive loss for 2016 and 2015 are as follows: Year EndedDecember 31 2016 Year EndedDecember 312015 Affected Caption on the Consolidated Statements ofOperations(In thousands) Amortization of defined benefit pension items (d):Actuarial losses $8,490 $15,810 Selling, general and administrative expensesActuarial losses 9,005 5,984 Cost of services and products soldPrior-service costs (11) 121 Selling, general and administrative expensesPrior-service costs 263 148 Cost of services and products soldSettlement/curtailment losses 355 — Selling, general and administrative expensesTotal before tax 18,102 22,063 Tax benefit (2,091) (1,873) Total reclassification of defined benefit pension items,net of tax $16,011 $20,190 Amortization of cash flow hedging instruments:Foreign currency exchange forward contracts $(408) $— Product revenuesForeign currency exchange forward contracts (2) 81 Cost of services and products soldTotal before tax (410) 81 Tax benefit 147 (28) Total reclassification of cash flow hedginginstruments $(263) $53 Recognition of cumulative foreign exchange translation adjustments:Foreign exchange translation adjustments, before tax $1,157 $— Other expensesTax benefit — — Total reclassification of cumulative foreign exchangetranslation adjustments $1,157 $— (d)These accumulated other comprehensive loss components are included in the computation of NPPC. See Note 10, Employee Benefit Plans, for additional information.89 Table of ContentsRealized (gains) losses reclassified from accumulated other comprehensive loss in connection with loss on dilution and sale of equity method investment areas follows:(In thousands) Twelve MonthsEnded Affected Caption on theConsolidated Statements of Operations December 31 2016 Foreign exchange translation adjustments $45,405 Change in fair value to the adjustment liability and loss ondilution and sale of equity method investmentCash flow hedging instruments 2,593 Change in fair value to the adjustment liability and loss ondilution and sale of equity method investmentDefined benefit pension obligations (2,433) Change in fair value to the adjustment liability and loss ondilution and sale of equity method investmentTotal before tax 45,565 Tax benefit (e) (16,822) Total amounts reclassified from accumulated other comprehensive loss inconnection with loss on dilution and sale of equity method investment $28,743 (e)For the year ended December 31, 2016 the tax benefit was not recognized on the Consolidated Statement of Operations since a valuation allowance was established against theresulting deferred tax assets. See Note 11, Income Taxes, for additional information.19. Restructuring ProgramsIn recent years, the Company has instituted restructuring programs to balance short-term profitability goals with long-term strategies. A primary objective ofthese programs has been to establish platforms upon which the affected businesses can grow with reduced fixed investment and generate annual operatingexpense savings. The restructuring programs have been instituted in response to the continuing impact of global financial and economic uncertainty on theCompany’s end markets. Restructuring costs incurred in these programs were recorded in, Other expenses, of the Consolidated Statements of Operations. Thetiming of associated cash payments is dependent on the type of restructuring cost and can extend over a multi-year period.Project OrionUnder Project Orion, the Harsco Metals & Minerals Segment made organizational and process improvement changes that are expected to improve its returnon capital and deliver a higher and more consistent level of service to customers. These changes include improving several core processes and simplifyingthe organizational structure. During the fourth quarter of 2015, Project Orion was expanded with additional targeted workforce and operational savings of$20 million to $25 million. The majority of these benefits have been realized in 2016.The restructuring accrual for Project Orion at December 31, 2016 and 2015 and the activity for the years ended December 31, 2016 and 2015 were as follows:(In thousands) Employee TerminationBenefit CostsBalance January 1, 2015 $7,668Expense incurred 5,070Other adjustments (1,003)Cash expenditures (5,854)Foreign currency translation (74)Balance, December 31, 2015 5,807Other adjustments (47)Cash expenditures (5,413)Foreign currency translation 29Balance, December 31, 2016 $376 90 Table of ContentsTwo-Year Summary of Quarterly Results (Unaudited)(In millions, except per share amounts) 2016 (a) Quarterly First Second Third Fourth Revenues $353.3 $369.9 $367.8 $360.2 Gross profit (b) 70.2 53.0 81.5 76.0 Net loss attributable to Harsco Corporation (10.9) (26.2) (33.0) (15.6) Basic loss per share attributable to Harsco Corporation common stockholders:Continuing operations $(0.13) $(0.35) $(0.41) $(0.19) Discontinued operations (c) — 0.02 — (0.01) Basic loss per share attributable to HarscoCorporation common stockholders $(0.14)(d)$(0.33) $(0.41) $(0.19)(d)Diluted loss per share attributable to Harsco Corporation common stockholders:Continuing operations $(0.13) $(0.35) $(0.41) $(0.19) Discontinued operations (c) — 0.02 — (0.01) Diluted loss per share attributable to HarscoCorporation common stockholders $(0.14)(d)$(0.33) $(0.41) $(0.19)(d) 2015 (a) Quarterly First Second Third Fourth Revenues $451.6 $455.7 $428.3 $387.4 Gross profit (b) 90.5 95.3 91.7 89.2 Net income (loss) attributable to Harsco Corporation 15.3 6.6 (8.7) (7.0) Basic earnings (loss) per share attributable to Harsco Corporation common stockholders:Continuing operations $0.20 $0.08 $(0.10) $(0.08) Discontinued operations (c) (0.01) — (0.01) (0.01) Basic earnings (loss) per share attributable to HarscoCorporation common stockholders $0.19 $0.08 $(0.11) $(0.09) Diluted earnings (loss) per share attributable to Harsco Corporation common stockholders:Continuing operations $0.20 $0.08 $(0.10) $(0.08) Discontinued operations (c) (0.01) — (0.01) (0.01) Diluted earnings (loss) per share attributable toHarsco Corporation common stockholders $0.19 $0.08 $(0.11) $(0.09) (a)Sum of the quarters may not equal the total year due to rounding.(b)Gross profit is defined as Revenues less costs and expenses associated directly with or allocated to products sold or services rendered.(c)Discontinued operations related principally to the Gas Technologies Segment which was sold in the fourth quarter of 2007.(d)Does not total due to rounding.91 Table of ContentsCommon Stock Price and Dividend Information(Unaudited) Market Price Per Share Dividends DeclaredPer Share High Low 2016 First quarter $7.75 $3.55 $—Second quarter 7.56 5.00 —Third quarter 11.18 6.55 —Fourth quarter 15.25 9.05 —2015 First quarter $19.12 $14.50 $0.205Second quarter 17.80 15.31 0.205Third quarter 18.00 8.71 0.205Fourth quarter 12.54 7.69 0.051Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.None.Item 9A. Controls and Procedures.Based on the evaluation required by Securities Exchange Act Rules 13a-15(b) and 15d-15(b), the Company's management, including the Chief ExecutiveOfficer and Chief Financial Officer, conducted an evaluation of the effectiveness of disclosure controls and procedures, as defined in Securities Exchange ActRules 13a-15(e) and 15d-15(e), at December 31, 2016. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that thedisclosure controls and procedures were effective at December 31, 2016. There were no changes in internal control over financial reporting that havematerially affected, or are reasonably likely to materially affect, internal control over financial reporting during the fourth quarter of 2016.Management's Report on Internal Controls Over Financial Reporting is included in Part II, Item 8, "Financial Statements and Supplementary Data." Theeffectiveness of the Company's internal control over financial reporting at December 31, 2016 has been audited by PricewaterhouseCoopers LLP, anindependent registered public accounting firm, as stated in the Report of Independent Registered Public Accounting Firm appearing in Part II, Item 8,"Financial Statements and Supplementary Data."Item 9B. Other Information.None.92 Table of ContentsPART IIIItem 10. Directors, Executive Officers and Corporate Governance.The information regarding executive officers of the Company required by this Item is set forth as a Supplementary Item, titled "Executive Officers of theRegistrant," at the end of Part I of this Annual Report on Form 10-K (pursuant to Instruction 3 to Item 401(b) of Regulation S-K) and is incorporated herein byreference. The other information required by this Item is incorporated herein by reference from the disclosures that will be included under the sectionsentitled "Corporate Governance," "Proposal 1: Election of Directors - Nominees for Director," "Meetings and Committees of the Board," "Report of the AuditCommittee" and "Section 16(a) Beneficial Ownership Reporting Compliance" of the Company's Definitive Proxy Statement for its 2017 Annual Meeting ofStockholders (the "2017 Proxy Statement"), which will be filed pursuant to SEC Regulation 14A not later than 120 days after the end of the Company's fiscalyear ended December 31, 2016.The Company's Code of Conduct (the "Code"), which applies to all officers, directors and employees of the Company, may be found on the Company'sInternet website, www.harsco.com. The Company intends to disclose on its website any amendments to the Code or any waiver from a provision of the Codegranted to an executive officer or director of the Company. The Code is available in print, without charge, to any person who requests it. To request a copy ofthe Code please contact the Company's Senior Director—Corporate Communications at (717) 730-3683.Item 11. Executive Compensation.The information regarding compensation of executive officers and directors required by this Item is incorporated herein by reference from the disclosures thatwill be included under the sections entitled "Compensation Discussion and Analysis - Executive Summary," "Discussion and Analysis of 2016Compensation" and "Non-Employee Director Compensation" of the 2017 Proxy Statement. The other information required by this Item is incorporated hereinby reference from the disclosures that will be included under the sections entitled "Compensation Committee Interlocks and Insider Participation" and"Compensation Committee Report" of the 2017 Proxy Statement.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The information regarding security ownership of certain beneficial owners and management required by this Item is incorporated herein by reference from thedisclosures that will be included under the section entitled "Share Ownership of Directors, Management and Certain Beneficial Owners" of the 2017 ProxyStatement.Equity compensation plan information is incorporated herein by reference from the disclosures that will be included under the section entitled "EquityCompensation Plan Information (As of December 31, 2016)" of the 2017 Proxy Statement.Item 13. Certain Relationships and Related Transactions, and Director Independence.The information regarding certain relationships and related transactions required by this Item is incorporated herein by reference from the disclosures thatwill be included under the section entitled "Transactions with Related Persons" of the 2017 Proxy Statement. The information regarding directorindependence required by this Item is incorporated herein by reference from the disclosures that will be included under the section entitled "CorporateGovernance" of the 2017 Proxy Statement.Item 14. Principal Accounting Fees and Services.The information regarding principal accounting fees and services required by this Item is incorporated herein by reference from the disclosures that will beincluded under the sections entitled "Report of the Audit Committee" and "Fees Billed by the Independent Auditors for Audit and Non-Audit Services" of the2017 Proxy Statement.93 Table of ContentsPART IVItem 15. Exhibits, Financial Statement Schedules.(a)1. The Index to Consolidated Financial Statements and Supplementary Data is located under Part II, Item 8, "Financial Statements andSupplementary Data." PageIndex to Consolidated Financial Statements and Supplementary Data402. The following financial statement schedule should be read in conjunction with the Consolidated Financial Statements under Part II, Item 8,"Financial Statements and Supplementary Data": PageSchedule II—Valuation and Qualifying Accounts for the years 2016, 2015 and 201495Financial statement schedules other than that listed above are omitted because the required information is not applicable, or because the information requiredis included in the consolidated financial statements.94 Table of ContentsSCHEDULE II. VALUATION AND QUALIFYING ACCOUNTSContinuing Operations(In thousands)COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E Additions Additions (Deductions) Description Balance atBeginning ofPeriod Charged toCost andExpenses Due toCurrencyTranslationAdjustments Other Balance at Endof PeriodFor the year 2016: Allowance for Doubtful Accounts $25,649 $(38) $(320) $(13,491)(a)$11,800Deferred Tax Assets—Valuation Allowance 110,680 38,490 (6,323) 3,250 146,097For the year 2015: Allowance for Doubtful Accounts $15,119 $13,047 $(1,585) $(932) $25,649Deferred Tax Assets—Valuation Allowance 131,422 13,175 (11,519) (22,398)(b)110,680For the year 2014: Allowance for Doubtful Accounts $6,638 $9,892 $(969) $(442) $15,119Deferred Tax Assets—Valuation Allowance 127,164 24,332 (9,254) (10,820) 131,422(a)Includes the write-off of previously reserved accounts receivable balances.(b)Includes a decrease of $16.1 million related to pension adjustments recorded through Accumulated other comprehensive loss and a $6.3 million decrease related to a U.K. tax ratechange.95 Table of ContentsListing of Exhibits Filed with Form 10-K Description of Exhibit2(a) Purchase Agreement, dated as of September 15, 2013, by and among Harsco Corporation, on behalf of itself and the other sellers namedtherein, Bullseye, Inc., on behalf of itself and the other buyers named therein, Bullseye Investors, Inc. and CD&R Bullseye Holdings,L.P. (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2013, CommissionFile Number 001-03970). The registrant has omitted certain immaterial schedules and exhibits to this exhibit pursuant to the provisionsof Regulation S-K, Item 601(b)(2). The registrant will furnish a copy of any of the omitted schedules and exhibits to the Securities andExchange Commission upon request.2(b) Omnibus Agreement dated September 15, 2016 (incorporated by reference to the Company's Current Report on Form 8-K datedSeptember 15, 2016, Commission file No. 001-03970).3(a) Restated Certificate of Incorporation (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the period endedJune 30, 2013, Commission File Number 001-03970).3(b) Certificate of Designation filed September 25, 1997 (incorporated by reference to the Company's Annual Report on Form 10-K for theperiod ended December 31, 1997, Commission File Number 001-03970).3(c) Certificate of Amendment to the Restated Certificate of Incorporation, dated April 29, 2015 (incorporated by reference to the Company'sCurrent Report on Form 8-K/A dated May 22, 2015, Commission File Number 001-03970).3(d) By-laws, as amended October 28, 2014 (incorporated by reference to the Company's Current Report on Form 8-K dated October 28,2014, Commission File Number 001-03970).4(a) Preferred Stock Purchase Rights Agreement (incorporated by reference to Registration Statement on Form 8-A dated October 2, 1987,Commission File Number 001-03970).4(b) Rights Agreement, dated as of September 25, 2007, by and between Harsco Corporation and Mellon Investor Services LLC, as RightsAgent (incorporated by reference to the Company's Current Report on Form 8-K dated September 26, 2007, Commission FileNumber 001-03970).4(c) Debt and Equity Securities (incorporated by reference to the Company's Registration Statement on Form S-3 dated December 15, 1994,Registration No. 33-56885). Material Contracts—Credit and Underwriting Agreements10(a)(i) Amended and Restated Five-Year Credit Agreement, dated March 2, 2012, among Harsco Corporation, the lenders named therein,Citibank, N.A., as administrative agent, RBS Securities Inc., as syndication agent, and the Bank of Tokyo-Mitsubishi UFJ, Ltd., HSBCBank USA, National Association, ING Bank N.V., Dublin Branch, JPMorgan Chase Bank, N.A. and Lloyds TSB Bank PLC, asdocumentation agents (incorporated by reference to the Company's Current Report on Form 8-K dated March 7, 2012, Commission FileNo. 001-03970).10(a)(ii) Amendment No. 1, dated September 12, 2013, to the Amended and Restated Five-Year Credit Agreement, dated March 2, 2012, amongHarsco Corporation, the lenders named therein, Citibank, N.A., as administrative agent, RBS Securities Inc., as syndication agent, andthe Bank of Tokyo-Mitsubishi UFJ, Ltd., HSBC Bank USA, National Association, ING Bank N.V., Dublin Branch, JPMorgan ChaseBank, N.A. and Lloyds TSB Bank PLC, as documentation agents (incorporated by reference to the Company's Quarterly Report on Form10-Q for the period ended September 30, 2013, Commission File Number 001-03970).10(a)(iii) Amendment No. 2, dated December 20, 2013, to the Amended and Restated Five-Year Credit Agreement, dated March 2, 2012, amongHarsco Corporation, the lenders named therein, Citibank, N.A., as administrative agent, RBS Securities Inc., as syndication agent, andthe Bank of Tokyo-Mitsubishi UFJ, Ltd., HSBC Bank USA, National Association, ING Bank N.V., Dublin Branch, JPMorgan ChaseBank, N.A. and Lloyds TSB Bank PLC, as documentation agents (incorporated by reference to the Company's Annual Report on Form10-K for the fiscal year ended December 31, 2014, Commission File Number 001-03970).10(a)(iv) Amendment No. 3, dated as of March 27, 2015, to the Amended and Restated Five-Year Credit Agreement among Harsco Corporation, aDelaware corporation, as Borrower, the Lenders party thereto and Citibank, N.A., as Administrative Agent (incorporated by reference tothe Company's Current Report on Form 8-K filed April 1, 2015, Commission File Number 001-03970).10(a)(v) Amendment and Restatement Agreement, dated as of December 2, 2015, among Harsco Corporation, the subsidiaries of the Companyparty thereto, Citibank N.A., as administrative agent, the other agents party thereto and the lenders party thereto including SecondAmended and Restated Credit Agreement, dated as of December 2, 2015, among Harsco Corporation, the lenders named therein,Citibank, N.A. and Royal Bank of Canada, as issuing lenders, and Citibank N.A., as administrative agent and as collateral agent(incorporated by reference to the Company's Current Report on Form 8-K dated December 4, 2015, Commission File No. 001-03970).96 Table of Contents Description of Exhibit10(a)(vi) Amendment and Restatement Agreement and First Amendment to Guarantee and Collateral Agreement, dated as of November 2, 2016,among the Company, the subsidiaries of the Company party thereto, Citibank N.A., as administrative agent and collateral agent and thelenders party thereto (incorporated by reference to the Company's Current Report on Form 8-K filed November 8, 2016, Commission fileNo. 001-03970). Material Contracts—Management Contracts and Compensatory Plans10(b) Harsco Corporation Supplemental Retirement Benefit Plan as amended and restated January 1, 2009 (incorporated by reference to theCompany's Annual Report on Form 10-K, for the period ended December 31, 2008, Commission File Number 001-03970).10(c) Trust Agreement between Harsco Corporation and Dauphin Deposit Bank and Trust Company dated July 1, 1987 relating to theSupplemental Retirement Benefit Plan (incorporated by reference to the Company's Annual Report on Form 10-K for the period endedDecember 31, 1987, Commission File Number 001-03970).10(d) Restricted Stock Units Agreement (incorporated by reference to the Company's Current Report on Form 8-K dated January 23, 2007,Commission File Number 001-03970).10(e) Restricted Stock Units Agreement for International Employees (incorporated by reference to the Company's Annual Report on Form 10-K for the period ended December 31, 2007, Commission File Number 001-03970).10(f) Stock Option Contract (incorporated by reference to the Company's Current Report on Form 8-K dated January 31, 2011, CommissionFile Number 001-03970).10(g) Harsco Corporation 2013 Equity and Incentive Compensation Plan (incorporated by reference to the Company's Current Report onForm 8-K dated April 26, 2013, Commission File Number 001-03970).10(h) Harsco Corporation Form of Restricted Stock Units Agreement (effective for grants on and after May 10, 2013) (incorporated byreference to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2013, Commission File Number 001-03970).10(i) Harsco Corporation Form of Stock Appreciation Rights Agreement (effective for grants on and after May 10, 2013) (incorporated byreference to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2013, Commission File Number 001-03970).10(j)(i) Harsco Corporation 1995 Non-Employee Directors' Stock Plan as Amended and Restated at January 27, 2004 (incorporated by referenceto Proxy Statement dated March 23, 2004 on Exhibit A, pages A-1 through A-9, Commission File Number 001-03970).10(j)(ii) Amendment No. 1 to the Harsco Corporation 1995 Non-Employee Directors' Stock Plan (incorporated by reference to the Company'sAnnual Report on Form 10-K for the period ended December 31, 2008, Commission File Number 001-03970).10(k) Harsco Corporation Form of Restricted Stock Units Agreement (Directors) (incorporated by reference to the Company's Current Reporton Form 8-K dated April 26, 2005, Commission File Number 001-03970).10(l)(i) Harsco Corporation Deferred Compensation Plan for Non-Employee Directors (as Amended and Restated as of December 31, 2008)(incorporated by reference to the Company's Annual Report on Form 10-K for the period ended December 31, 2008, Commission FileNumber 001-03970).10(l)(ii) First Amendment to the Harsco Corporation Deferred Compensation Plan for Non Employee Directors.10(m) Settlement and Consulting Agreement (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the period endedMarch 31, 2003, Commission File Number 001-03970).10(n) Harsco Non-Qualified Retirement Savings & Investment Plan Part B—Amendment and Restatement as of January 1, 2009 (incorporatedby reference to the Company's Annual Report on Form 10-K for the period ended December 31, 2008, Commission File Number 001-03970).10(o) Form of Change in Control Severance Agreement (incorporated by reference to the Company's Quarterly Report on Form 10-Q for theperiod ended September 30, 2014, Commission File Number 001-03970).10(p) Notification Letter to F. Nicholas Grasberger, III dated March 20, 2013 (incorporated by reference to the Company's Quarterly Report onForm 10-Q for the period ended March 31, 2013, Commission File Number 001-03970).10(q) Notification Letter to David Everitt dated March 14, 2014 (incorporated by reference to the Company's Quarterly Report on Form 10-Qfor the period ended March 31, 2014, Commission File Number 001-03970).10(r) Notification Letter to F. N. Grasberger dated April 8, 2014 (incorporated by reference to the Company's Quarterly Report on Form 10-Qfor the period ended June 30, 2014, Commission File Number 001-03970).10(s) Notification Letter to F. N. Grasberger dated August 1, 2014 (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2014, Commission File Number 001-03970).97 Table of Contents Description of Exhibit10(t) Form of Restricted Stock Units Agreement (effective for grants on or after April 28, 2014) (incorporated by reference to the Company'sQuarterly Report on Form 10-Q for the period ended June 30, 2014, Commission File Number 001-03970).10(u) Form of Stock Appreciation Rights Agreement (effective for grants on or after April 28, 2014) (incorporated by reference to theCompany's Quarterly Report on Form 10-Q for the period ended June 30, 2014, Commission File Number 001-03970).10(v) Form of Performance Share Units Agreement (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the periodended June 30, 2014, Commission File Number 001-03970).10(w) Separation Agreement and General Release, dated May 11, 2015, between Harsco Corporation and A. Verona Dorch (incorporated byreference to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2015, Commission File Number 001-03970).10(x) Separation Agreement and General Release, dated August 5, 2015, between Harsco Corporation and Richard E. Lundgren, Jr.(incorporated by reference to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2015, Commission FileNumber 001-03970).10(y) Form of Performance Share Units Agreement (effective for grants on or after April 28, 2015) (incorporated by reference to the Company'sQuarterly Report on Form 10-Q for the period ended March 31, 2015, Commission File Number 001-03970).10(z) Form of Restricted Stock Units Agreement (effective for grants on or after April 28, 2015) (incorporated by reference to the Company'sQuarterly Report on Form 10-Q for the period ended March 31, 2015, Commission File Number 001-03970).10(aa) Form of Stock Appreciation Rights Agreement (effective for grants on or after April 28, 2015) (incorporated by reference to theCompany's Quarterly Report on Form 10-Q for the period ended March 31, 2015, Commission File Number 001-03970).10(bb) Separation Agreement and General Release, dated August 15, 2016, between Harsco Corporation and Scott W. Jacoby (incorporated byreference to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2016, Commission File Number 001-03970).10(cc)(i) 2016 Non-Employee Directors' Long-Term Equity Compensation Plan (incorporated by reference to the Company's Form S-8 dated May6, 2016, Commission File Number 001-03970).10(cc)(ii) First Amendment to 2016 Non-Employee Directors' Long-Term Equity Compensation Plan (incorporated by reference to the Company'sQuarterly Report on Form 10-Q for the period ended June 30, 2016, Commission File Number 001-03970).10(dd) Form of Restricted Stock Units Agreement (Non-Employee Director) (incorporated by reference to the Company's Quarterly Report onForm 10-Q for the period ended June 30, 2016, Commission File Number 001-03970).10(ee) Form of Performance Share Units Agreement (effective for grants on or after April 26, 2016) (incorporated by reference to the Company'sQuarterly Report on Form 10-Q for the period ended March 31, 2016, Commission File Number 001-03970).10(ff) Form of Restricted Stock Units Agreement (effective for grants on or after April 26, 2016) (incorporated by reference to the Company'sQuarterly Report on Form 10-Q for the period ended March 31, 2016, Commission File Number 001-03970).10(gg) Form of Stock Appreciation Rights Agreement (effective for grants on or after April 26, 2016) (incorporated by reference to theCompany's Quarterly Report on Form 10-Q for the period ended March 31, 2016, Commission File Number 001-03970).10(hh) Form of Performance Share Units Agreement (effective for grants on or after February 16, 2017).10(ii) Form of Restricted Stock Units Agreement (effective for grants on or after February 16, 2017).10(jj) Form of Stock Appreciation Rights Agreement (effective for grants on or after February 16, 2017). Director Indemnity Agreements10(kk)(i) K. G. Eddy (incorporated by reference to the Company's Current Report on Form 8-K dated August 27, 2004, Commission FileNumber 001-03970).10(kk)(ii) T. D. Growcock (incorporated by reference to the Company's Current Report on Form 8-K dated August 27, 2004, same as shown for K.G. Eddy, Commission File Number 001-03970).10(kk)(iii) S. E. Graham (incorporated by reference to the Company's Current Report on Form 8-K dated August 27, 2004, same as shown for K. G.Eddy, Commission File Number 001-03970).10(kk)(iv) D. C. Everitt (incorporated by reference to the Company's Current Report on Form 8-K dated August 27, 2004, same as shown for K. G.Eddy, Commission File Number 001-03970).98 Table of Contents Description of Exhibit10(kk)(v) J. F. Earl (incorporated by reference to the Company's Current Report on Form 8-K dated August 27, 2004, same as shown for K. G.Eddy, Commission File Number 001-03970).10(kk)(vi) E. La Roche (incorporated by reference to the Company's Current Report on Form 8-K dated August 27, 2004, same as shown for K. G.Eddy, Commission File Number 001-03970).10(kk)(vii) P. C. Widman (incorporated by reference to the Company's Current Report on Form 8-K dated August 27, 2004, same as shown for K. G.Eddy, Commission File Number 001-03970).12 Computation of Ratios of Earnings to Fixed Charges.21 Subsidiaries of the Registrant.23 Consent of Independent Registered Public Accounting Firm.31.1 Certification Pursuant to Rule 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (ChiefExecutive Officer).31.2 Certification Pursuant to Rule 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (ChiefFinancial Officer).32 Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (ChiefExecutive Officer and Chief Financial Officer).101 The following financial statements from Harsco Corporation's Annual Report on Form 10-K for the year ended December 31, 2016,formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements ofOperations; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statements of Changes in Equity; (v) theConsolidated Statements of Comprehensive Income (Loss) and (vi) the Notes to Consolidated Financial Statements.Exhibits other than those listed above are omitted for the reason that they are either not applicable or not material.Item 16. Form 10-K Summary.None.99 Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. HARSCO CORPORATION(Registrant)DATEFebruary 24, 2017 /s/ PETER F. MINAN Peter F. MinanChief Financial Officer(Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.Signature Capacity Date/s/ F. NICHOLAS GRASBERGER, III President, Chief Executive Officer and Director (PrincipalExecutive Officer) February 24, 2017F. Nicholas Grasberger, III /s/ PETER F. MINAN Senior Vice President and Chief Financial Officer (PrincipalFinancial and Accounting Officer) February 24, 2017Peter F. Minan /s/ DAVID C. EVERITT Non-Executive Chairman and Director February 24, 2017David C. Everitt /s/ JAMES F. EARL Director February 24, 2017James F. Earl /s/ KATHY G. EDDY Director February 24, 2017Kathy G. Eddy /s/ STUART E. GRAHAM Director February 24, 2017Stuart E. Graham /s/ TERRY D. GROWCOCK Director February 24, 2017Terry D. Growcock /s/ ELAINE LA ROCHE Director February 24, 2017Elaine La Roche /s/ PHILLIP C. WIDMAN Director February 24, 2017Phillip C. Widman 100 Exhibit 10(hh)HARSCO CORPORATIONPERFORMANCE SHARE UNITS AGREEMENT(FORM)This PERFORMANCE SHARE UNITS AGREEMENT (this “Agreement”) is made as of _________ ___, 20__, by andbetween Harsco Corporation, a Delaware corporation, and _________________ (the “Grantee”).1.Certain Definitions. Capitalized terms used, but not otherwise defined, in this Agreement will have the meaningsgiven to such terms in the Company’s 2013 Equity and Incentive Compensation Plan (the “Plan”).2.Grant of PSUs. Subject to and upon the terms, conditions and restrictions set forth in this Agreement, including,without limitation, Exhibit A attached hereto (the “Non-Competition Agreement”), and any additional terms and conditions for theGrantee's country (Grantees outside the United States only) set forth in the attached Exhibit B which forms part of this Agreement,and in the Plan, the Company has granted to the Grantee, as of _________ ___, 20__ (the “Date of Grant”), a target number of__________ performance-based Restricted Stock Units (“PSUs”). Notwithstanding anything in this Section 2 or otherwise in thisAgreement to the contrary, the Grantee acknowledges and agrees to be bound by the restrictive covenant terms, conditions andprovisions in the Non-Competition Agreement as a “Grantee” as referred to therein.3.Restrictions on Transfer of PSUs. Subject to Section 15 of the Plan, neither the PSUs granted hereby nor anyinterest therein or in the Common Stock related thereto shall be transferable prior to payment to the Grantee pursuant to Section 5hereof other than by will or pursuant to the laws of descent and distribution.4.Vesting of PSUs.(a)Subject to the terms and conditions of Section 4 and Section 5 hereof and Exhibit C hereto, the Grantee’s right toreceive Common Stock in settlement of the PSUs shall become nonforfeitable with respect to (i) 0% to 200% of thePSUs on the basis of the RTSR achievement during the Performance Period as set forth in the Statement ofManagement Objectives attached hereto as Exhibit C (the “Earned PSUs”). The Earned PSUs will be determined onthe date following the end of the Performance Period on which the Committee determines the level of attainment of theManagement Objectives for the Performance Period, which date must occur within 60 days after the end of thePerformance Period (the “Committee Determination Date”). Except as otherwise provided herein, the Grantee’s rightto receive Common Stock in settlement of the PSUs is contingent upon his or her remaining in the continuous employof the Company or a Subsidiary until the end of the Performance Period.(b)For purposes of this Agreement:(i)“Continuously employed” (or substantially similar term) means the absence of any interruption or termination ofthe Grantee’s employment with the Company or with a Subsidiary of the Company. Continuous employmentshall not be considered interrupted or terminated in the case of sick leave, military leave or any other leave Exhibit 10(hh)of absence approved by the Company or in the case of transfers between locations of the Company and itsSubsidiaries;(ii)“Management Objectives” means the threshold, target and maximum goals established by the Committee for thePerformance Period with respect to RTSR, as described in the Statement of Management Objectives. Noadjustment of the Management Objectives shall be permitted in respect of any PSUs granted to the Grantee if atthe Date of Grant he or she is a Covered Employee if such adjustment would result in the PSUs failing toqualify as a Qualified Performance-Based Award.(iii)“Performance Period” means the three-year period commencing January 1, 2017 and ending on December 31,2019.(iv)“Relative Total Stockholder Return” or “RTSR” has the meaning as set forth in the Statement of ManagementObjectives.(c)Notwithstanding the other provisions of this Section 4:(i)If the Grantee dies or becomes Disabled during any calendar year of the Performance Period while the Granteeis continuously employed by the Company or any of its Subsidiaries (the “Death/Disability Year”), providedthat the PSUs have not previously been forfeited or become nonforfeitable at such time, then (notwithstandinganything in the Statement of Management Objectives to the contrary): (A) the Performance Period will bedeemed to have ended on December 31 of the Death/Disability Year (the “Death/Disability MeasurementDate”); (B) the PSUs will continue to be eligible to become nonforfeitable (and payable in accordance withSection 5 hereof) as if the Grantee continued to be employed until the end of the Death/Disability MeasurementDate; (C) the Earned PSUs will be determined based on RTSR achievement from the start of the PerformancePeriod through the Death/Disability Measurement Date based on the S&P 600® Industrials Index as constitutedon the Death/Disability Measurement Date; (D) the ending stock price for Total Stockholder Returndetermination purposes will be based on the average closing stock price for the 30 calendar days immediatelypreceding the January 1st immediately following the Death/Disability Measurement Date on the principal stockexchange on which the stock then trades; and (E) the Earned PSUs will be determined on the date following theDeath/Disability Measurement Date on which the Committee determines the level of attainment of theManagement Objectives for the shortened Performance Period, which date must occur within 60 days after theDeath/Disability Measurement Date.(ii)If the Grantee retires from the Company prior to the Committee Determination Date (A) at age 62 or older whilecontinuously employed by the Company or any of its Subsidiaries or (B) at or after such time as the Grantee’sage (minimum of age 55), plus full years of continuous employment by the Company or any of its Subsidiaries,equals 75, provided that the PSUs have not previously been forfeited or become nonforfeitable at such time,then the PSUs will continue to be eligible to become nonforfeitable in accordance with this Section 4 (andpayable in accordance with Section 5 hereof) as if the Grantee continued to be employed until the end of thePerformance Period.(d)(i)Notwithstanding Section 4(a) or Section 4(c) above, if at any time before the Committee Determination Date orforfeiture of the PSUs, and while the Grantee is Exhibit 10(hh)continuously employed by the Company or a Subsidiary, a Change in Control occurs, provided that the PSUshave not previously been forfeited or become nonforfeitable at such time, then (except to the extent that aReplacement Award is provided to the Grantee in accordance with Section 4(e)(ii) to continue, replace orassume the PSUs covered by this Agreement (the “Replaced Award”)) the PSUs will become nonforfeitableand payable to the Grantee in accordance with Section 5 hereof as follows (notwithstanding anything in theStatement of Management Objectives to the contrary): (A) the Performance Period will be deemed to haveended on the date of the Change in Control (the “CIC Measurement Date”); (B) the Earned PSUs will bedetermined based on RTSR achievement from the start of the Performance Period through the CICMeasurement Date based on the S&P 600® Industrials Index as constituted on the CIC Measurement Date; (D)the ending stock price for Total Stockholder Return determination purposes will be based on the average closingstock price for the 30 calendar days immediately preceding the CIC Measurement Date on the principal stockexchange on which the stock then trades; and (E) the Earned PSUs will be determined on the date of theChange in Control.(ii)For purposes of this Agreement, a “Replacement Award” means an award (A) of the same type (e.g.,performance-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the valueof the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor inthe Change in Control or another entity that is affiliated with the Company or its successor following theChange in Control or is payable solely in cash, (D) if the Grantee holding the Replaced Award is subject toU.S. federal income tax under the Code, the tax consequences of which to such Grantee under the Code are notless favorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms andconditions of which are not less favorable to the Grantee holding the Replaced Award than the terms andconditions of the Replaced Award (including the provisions that would apply in the event of a subsequentChange in Control). A Replacement Award may be granted only to the extent it does not result in the ReplacedAward or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Withoutlimiting the generality of the foregoing, the Replacement Award may take the form of a continuation of theReplaced Award if the requirements of the two preceding sentences are satisfied. The determination of whetherthe conditions of this Section 4(e)(ii) are satisfied will be made by the Committee, as constituted immediatelybefore the Change in Control, in its sole discretion.(iii)If, upon receiving a Replacement Award, the Grantee’s employment with the Company or a Subsidiary (or anyof their successors) (as applicable, the “Successor”) is subsequently terminated by the Grantee for Good Reasonor by the Successor without Cause within a period of two years after the Change in Control, 100% of theReplacement Award will become nonforfeitable and payable with respect to the performance-based restrictedstock units covered by such Replacement Award.(iv)A termination by the Grantee for “Good Reason” means Grantee’s termination of his or her employment withthe Successor as a result of the occurrence of any of the following: (A) a change in the Grantee’s principallocation of employment that is greater than 50 miles from such location as of the date of this Agreement withoutthe Grantee’s consent; provided, however, that the Grantee hereby acknowledges that the Grantee may berequired to engage in travel in connection with the Exhibit 10(hh)performance of the Grantee’s duties and that such travel shall not constitute a change in the Grantee’s principallocation of employment for purposes hereof; (B) a material diminution in the Grantee’s base compensation; (C)a change in the Grantee’s position with the Successor without the Grantee’s consent such that there is a materialdiminution in the Grantee’s authority, duties or responsibilities; or (D) any other action or inaction thatconstitutes a material breach by the Successor of the agreement, if any, under which the Grantee providesservices to the Successor or its subsidiaries. Notwithstanding the foregoing, the Grantee’s termination of theGrantee’s employment with the Successor as a result of the occurrence of any of the foregoing shall notconstitute a termination for “Good Reason” unless (X) the Grantee gives the Successor written notice of suchoccurrence within 90 days of such occurrence and such occurrence is not cured by the Successor within 30 daysof the date on which such written notice is received by the Successor and (Y) the Grantee actually terminates hisor her employment with the Successor prior to the 365th day following such occurrence.(v)A termination by the Successor without “Cause” means the Successor’s termination of the Grantee’semployment with the Successor under circumstances that do not involve or relate to the occurrence of any of thefollowing: (A) an act or acts of personal dishonesty taken by the Grantee and intended to result in substantialpersonal enrichment of the Grantee at the expense of the Company; (B) repeated failure by the Grantee todevote reasonable attention and time during normal business hours to the business and affairs of the Companyor to use the Grantee’s reasonable best efforts to perform faithfully and efficiently the responsibilities assigned tothe Grantee (provided that such failure is demonstrated to be willful and deliberate on the Grantee’s part and isnot remedied in a reasonable period of time after receipt of written notice from the Company); or (C) theconviction of the Grantee of a felony.(e)The PSUs shall be forfeited to the extent they fail to become nonforfeitable as of the Committee Determination Dateand, except as otherwise provided in this Section 4, if the Grantee ceases to be employed by the Company or aSubsidiary at any time prior to such PSUs becoming nonforfeitable, or to the extent they are forfeited under Section 16hereof.5.Form and Time of Payment of Earned PSUs.(a)Payment for the PSUs, after and to the extent they have become nonforfeitable, shall be made in the form of shares ofCommon Stock. Payment shall be made within 70 days following the date that the PSUs become nonforfeitablepursuant to Section 4 hereof.(b)Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Common Stock maybe issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.(c)The Company’s obligations to the Grantee with respect to the PSUs will be satisfied in full upon the issuance ofCommon Stock corresponding to such PSUs.6.Dividend Equivalents, Voting, and Other Rights. Exhibit 10(hh)(a)The Grantee shall have no rights of ownership in the Common Stock underlying the PSUs and no right to vote theCommon Stock underlying the PSUs until the date on which the shares of Common Stock underlying the PSUs areissued or transferred to the Grantee pursuant to Section 5 above.(b)From and after the Date of Grant and until the earlier of (i) the time when the PSUs become nonforfeitable and are paidin accordance with Section 5 hereof or (ii) the time when the Grantee’s right to receive Common Stock in payment ofthe PSUs is forfeited in accordance with Section 4 hereof, on the date that the Company pays a cash dividend (if any)to holders of Common Stock generally, the Grantee shall become entitled to receive (subject to the following sentence)a number of additional whole PSUs determined by dividing (x) the product of (1) the dollar amount of the cashdividend paid per share of Common Stock on such date and (2) the total number of PSUs (including dividendequivalents) previously credited to the Grantee as of such date, by (y) the Market Value per Share on such date. Suchdividend equivalents (if any) shall be subject to the same terms and conditions and shall be paid or forfeited in the samemanner and at the same time as the PSUs to which the dividend equivalents were credited.(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of theCompany to deliver shares of Common Stock in the future, and the rights of the Grantee will be no greater than that ofan unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of theCompany under this Agreement.7.Adjustments. The PSUs and their terms under this Agreement are subject to mandatory adjustment under the terms ofSection 11 of the Plan.8.Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes inconnection with the delivery to the Grantee of Common Stock or any other payment to the Grantee or any other payment or vestingevent under this Agreement, the Grantee hereby authorizes withholding from payroll and any other amounts payable to the Grantee,including amounts payable hereunder, and otherwise agrees to make adequate provision for, any sums required to satisfy such taxwithholding obligations of the Company. The Company shall have no obligation to make delivery or payment hereunder until the taxwithholding obligations of the Company have been satisfied by the Grantee. If all or any part of such withholding requirement besatisfied by retention by the Company of a portion of the Common Stock to be delivered to the Grantee or by delivering to theCompany other shares of Common Stock held by the Grantee, the shares so retained shall be credited against such withholdingrequirement at the Market Value per Share of such Common Stock on the date of such delivery. In no event will the market value ofthe Common Stock to be withheld and/or delivered pursuant to this Section 8 to satisfy applicable withholding taxes exceed theminimum amount of taxes required to be withheld, unless otherwise agreed to by the Grantee, provided, however, that such amountshall not exceed the statutory maximum withholding rates.9.Compliance With Law. The Company shall make reasonable efforts to comply with all applicable federal and statesecurities laws; provided, however, notwithstanding any other provision of the Plan and this Agreement, the Company shall not beobligated to issue any Common Stock pursuant to this Agreement if the issuance thereof would result in a violation of any such law. Exhibit 10(hh)10.Compliance With Section 409A of the Code. To the extent applicable, it is intended that this Agreement and thePlan comply with the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a mannerconsistent with this intent, and any provision that would cause this Agreement or the Plan to fail to satisfy Section 409A of the Codeshall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to theextent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee).11.Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed,temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of theTreasury or the Internal Revenue Service. Except as expressly provided in this Agreement, capitalized terms used herein will have themeaning ascribed to such terms in the Plan.12.No Employment Rights. The grant of the PSUs under this Agreement to the Grantee is a voluntary, discretionaryaward being made on a one-time basis and it does not constitute a commitment to make any future awards. The grant of the PSUs andany payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similarallowance, except as otherwise required by law. Nothing contained in this Agreement shall confer upon the Grantee any right to beemployed or remain employed by the Company or any of its Subsidiaries, nor limit or affect in any manner the right of the Company orany of its Subsidiaries to terminate the employment or adjust the compensation of the Grantee.13.Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement or the Plan shallnot be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or otherbenefit or compensation plan maintained by the Company or any of its Subsidiaries and shall not affect the amount of any lifeinsurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or any of itsSubsidiaries.14.Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent thatthe amendment is applicable hereto; provided, however, that (a) no amendment shall adversely affect the rights of the Grantee underthis Agreement without the Grantee’s written consent, and (b) the Grantee’s consent shall not be required to an amendment that isdeemed necessary by the Company to ensure compliance with Section 409A of the Code.15.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason bya court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, andthe remaining provisions hereof shall continue to be valid and fully enforceable.16.Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of anyinconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to thePlan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determineany questions which arise in connection with this Agreement. In addition, the PSUs shall be subject to the terms and conditions of theCompany’s clawback policy in effect on the Date of Grant as if such PSUs were “Incentive-Based Compensation” (as such term isdefined in such clawback policy). Exhibit 10(hh)17.Successors and Assigns. Without limiting Section 3 hereof, the provisions of this Agreement shall inure to thebenefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and thesuccessors and assigns of the Company.18.Acknowledgement. The Grantee acknowledges that the Grantee (a) has received a copy of the Plan, (b) has had anopportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and thePlan and (d) agrees to such terms and conditions.19.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to bean original but all of which together will constitute one and the same agreement.[signature page follows]IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officerand the Grantee has executed this Agreement, effective as of the day and year first above written. HARSCO CORPORATION By:/s/ F. Nicholas Grasberger IIIName:F. Nicholas Grasberger IIITitle:President and CEOThe undersigned hereby acknowledges receipt of an executed version of this Agreement and accepts the award of PSUsgranted hereunder on the terms and conditions set forth herein and in the Plan (including the terms of the Non-Competition Agreement,attached hereto as Exhibit A). GRANTEE By:______________Name: Exhibit 10(hh)EXHIBIT ANon-Competition Agreement1.Grant. Grantee acknowledges that Grantee has access to the confidential and proprietary trade secret information of HarscoCorporation, including its subsidiaries, joint ventures, and operating divisions (the “Company”), as further described below(“Confidential/Proprietary Trade Secret Information”). Further, Grantee acknowledges that Grantee derives significant value fromthe Company and from the Confidential/Proprietary Trade Secret Information provided during the term of employment with theCompany, which enables Grantee to optimize the performance of the Company’s performance and Grantee’s own personal,professional, and financial benefit. In consideration of the grant described in the award agreement (the “Agreement”) to which theseterms, conditions and provisions (the “Non-Competition Agreement”) are attached as an exhibit, Grantee agrees that, duringGrantee's employment by the Company, and for a period of twelve (12) months after the cessation of such employment for anyreason (both such periods collectively referred to as the “Restricted Period”), Grantee will not, directly or indirectly, engage in anyof the following competitive activities:(a)For Grantee or on behalf of any other corporation, business, partnership, individual, or other entity, directly or indirectly solicit,divert, contract with, or attempt to solicit, divert, or contract with, any customer with whom Grantee had Material Contact duringthe final two (2) years of Grantee’s employment with the Company concerning any products or services that are similar to thosethat Grantee was responsible for or were otherwise involved with during Grantee’s employment with the Company. Forpurposes of this Non-Competition Agreement, the Grantee will have had “Material Contact” with a customer if: (i) Grantee hadbusiness dealings with the customer on the Company’s behalf; (ii) Grantee was responsible for supervising or coordinating thedealings between the Company and the customer; or (iii) Grantee obtained Confidential/Proprietary Trade Secret Informationabout the customer as a result of Grantee’s association with the Company;(b)Within the geographic territory where Grantee was employed by the Company, obtained knowledge of Confidential/ProprietaryTrade Secret Information, or had contact with the Company's customers, become employed by or otherwise render services to(as a director, employee, contractor or consultant) or have any ownership interest in any business which is engaged in offeringthe same or similar products or services as, or otherwise competes with those Company, including its subsidiaries and operatingunit(s) with which Grantee was employed or in any way involved during the last twelve (12) months of employment with theCompany; or(c)(i) induce, offer, assist, encourage or suggest that another business or enterprise offer employment to or enter into a consultingarrangement with any employee, agent or representative of the Company or (ii) induce, offer, assist, encourage or suggest thatany employee, agent or representative of the Company, including its subsidiaries and joint ventures, terminate his or heremployment or business affiliation with the Company or accept employment with any other business or enterprise.(d)Confidential/Proprietary Trade Secret Information.(i)Grantee agrees to keep secret and confidential all Confidential/Proprietary Trade Secret Information (further describedbelow) acquired by Grantee while employed by the Company or concerning the business and affairs of the Company, itsvendors, its customers, and its affiliates (whether of a business, commercial or technological nature), and further agrees thatGrantee will not disclose any such Confidential/Proprietary Trade Secret Information so acquired to any individual, partner,company, firm, corporation or other person or use the same in any manner other than in connection with the business andaffairs of the Company and its affiliates. Except in the performance of services for the Company, the Grantee will not, forso long as the Confidential/Proprietary Trade Secret Information remains so designated under applicable law, use, disclose,reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer the Confidential/Proprietary TradeSecret Information or any portion thereof. Exhibit 10(hh)(ii)For purposes of this Non-Competition Agreement, “Confidential/Proprietary Trade Secret Information” includes allinformation of a confidential or proprietary nature that relates to the business, products, services, research or developmentof the Company, and its affiliates or their respective suppliers, distributors, customers, independent contractors or otherbusiness relations. Confidential/Proprietary Trade Secret Information also includes, but is not limited to, the following: (A)internal business information (including information relating to strategic and staffing plans and practices, business, training,financial, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and businessmethods and customer and supplier lists); (B) identities of, individual requirements of, specific contractual arrangementswith and information about, the Company’s suppliers, distributors, customers, independent contractors or other businessrelations and their confidential information; (C) trade secrets, copyrightable works and other confidential information(including ideas, formulas, recipes, compositions, inventions, innovations, improvements, developments, methods, know-how, manufacturing and production processes and techniques, research and development information, compilations of dataand analyses, data and databases relating thereto, techniques, systems, records, manuals, documentation, models, drawings,specifications, designs, plans, proposals, reports and all similar or related information whether patentable or unpatentableand whether or not reduced to practice); (D) other intellectual property rights of the Company, or any of its affiliates; and(E) any other information that would constitute a trade secret under the Pennsylvania Uniform Trade Secrets Act, asamended from time to time (or any successor). The term “Confidential/Proprietary Trade Secret Information” also includesany information or data described above which the Company obtains from another party and which the Company treats asproprietary or designates as trade secrets, whether or not owned or developed by the Company.(iii)All documents and materials supplied to Grantee or developed by Grantee in the course of, or as a result of Grantee’semployment at the Company whether in hard copy, electronic format or otherwise shall be the sole property of theCompany. Grantee will at any time upon the request of the Company and in any event promptly upon termination ofGrantee’s employment or relationship with the Company, but in any event no later than five (5) business days after suchtermination, deliver all such materials to the Company and will not retain any originals or copies of such materials, whetherin hard copy form or as computerized and/or electronic records. Except to the extent approved by the Company or requiredby Grantee’s bona fide job duties for the Company, the Grantee also agrees that Grantee will not copy or remove from theCompany’s place of business or the place of business of a customer of the Company, property or information belonging tothe Company or the customer or entrusted to the Company or the customer. In addition, the Grantee agrees that Granteewill not provide any such materials to any competitor of or entity seeking to compete with the Company unless specificallyapproved in writing by the Company. Notwithstanding anything in paragraph 1(d)(3) of this Non-Competition Agreementto the contrary, if the Company needs to take legal action to secure such return delivery of such materials, Grantee shall beresponsible for all legal fees, costs and expenses incurred by the Company in doing so.2.Subsequent Employment.(a)Advise the Company of New Employment. In the event of a cessation of Grantee’s employment with the Company, and duringthe Restricted Period described in paragraph 1 above, Grantee agrees to disclose to the Company, the name and address of anynew employer or business affiliation within ten (10) calendar days of Grantee’s accepting such position. In the event thatGrantee fails to notify the Company of such new employment or business affiliation as required above, the Restricted Periodwill be extended by a period equal to the period of nondisclosure. (b)Grantee’s Ability to Earn Livelihood. Grantee acknowledges that, in the event of a cessation of Grantee’s employment with theCompany, for any reason and at any time, the provisions of paragraph 1 of this Non-Competition Agreement will notunreasonably restrict Grantee’s ability to earn a living. Grantee and the Company acknowledge that Grantee’s rights have beenlimited by this Non-Competition Agreement only to Exhibit 10(hh)the extent reasonably necessary to protect the legitimate interests of the Company in its Confidential/Proprietary Trade SecretInformation.3.Enforcement. Grantee agrees that if Grantee violates the covenants and agreements set forth in this Non-Competition Agreement,the Company would suffer irreparable harm, and that such harm to the Company may be impossible to measure in monetarydamages. Accordingly, in addition to any other remedies which the Company may have at law or in equity, the Company will havethe right to have all obligations, undertakings, agreements, covenants and other provisions of this Non-Competition Agreementspecifically performed by Grantee, and the Company will have the right to obtain preliminary and permanent injunctive relief tosecure specific performance, and to prevent a breach or contemplated breach, of this Non-Competition Agreement. In such event,the Company will be entitled to an accounting and repayment of all profits, compensation, remunerations or benefits which Granteeor others, directly or indirectly, have realized or may realize as a result of, growing out of, or in conjunction with any violation ofthis Non-Competition Agreement. Such remedies will be an addition to and not in limitation of any injunctive relief or other rightsor remedies to which the Company is or may be entitled at law or in equity. In the event that the Company obtains any requestedrelief in any action brought to enforce the terms of this Non-Competition Agreement through court proceedings, the Company willbe entitled to reimbursement for all legal fees, costs and expenses incident to enforcement.4.Severability. If any section, paragraph, term or provision of this Non-Competition Agreement, or the application thereof, isdetermined by a competent court or tribunal to be invalid or unenforceable, then the other parts of such section, paragraph, term orprovision will not be affected thereby and will be given full force and effect without regard to the invalid or unenforceable portions,and the section, paragraph, term or provision of this Non-Competition Agreement will be deemed modified to the extent necessaryto render it valid and enforceable.5.Miscellaneous.(a)Employment.(i)This Non-Competition Agreement does not constitute a guarantee of employment and termination of employment will notaffect the enforceability of this Non-Competition Agreement.(ii)Grantee agrees that if Grantee is transferred from the entity or division which was Grantee’s employer at the time Granteesigned this Non-Competition Agreement to employment by another division or another company that is a subsidiary oraffiliate of Harsco Corporation, and Grantee has not entered into a superseding agreement with the new employer coveringthe subject matter of this Non-Competition Agreement, then this Non-Competition Agreement will continue in effect andthe Grantee’s new employer will be termed “the Company” for all purposes hereunder and will have the right to enforcethis Non-Competition Agreement as Grantee’s employer. In the event of any subsequent transfer, Grantee’s new employerwill succeed to all rights under this Non-Competition Agreement so long as such employer will be Harsco Corporation orone of its subsidiaries or affiliates and so long as this Non-Competition Agreement has not been superseded.(b)Headings. The headings contained in this Non-Competition Agreement are inserted for convenience of reference only, and willnot be deemed to be a part of this Non-Competition Agreement for any purposes, and will not in any way define or affect themeaning, construction or scope of any of the provisions of this Non-Competition Agreement.(c)Governing Law. This Non-Competition Agreement will be construed under the laws of the Commonwealth of Pennsylvania,without regard to its conflict of law provisions, and the parties consent and agree that the federal and state courts of theCommonwealth of Pennsylvania will have exclusive jurisdiction over any dispute relating to this Non-Competition Agreement.(d)Supplemental Nature of this Non-Competition Agreement. The restrictions set forth in paragraph 1 of this Non-CompetitionAgreement will be in addition to any other such restrictive covenants agreed to through Exhibit 10(hh)separate agreements, if any, between Grantee and the Company and will survive the exercise of the equity award evidenced bythe Agreement.(e)Waiver. The failure by the Company to enforce any right or remedy available to it under this Non-Competition Agreement willnot be construed to be a waiver of such right or remedy with respect to any other prior, concurrent or subsequent breach orfailure. No waiver of rights under this Non-Competition Agreement will be effective unless made in writing with specificreference to this Non-Competition Agreement.(f)Notification. Grantee agreed that the Company may notify any third party about Grantee’s obligations under this Non-Competition Agreement until such time as Grantee has performed all of Grantee’s obligations hereunder. Upon the Company’srequest, Grantee agrees to provide the Company with information, including, but not limited to, supplying details of Grantee’ssubsequent employment, sufficient to verify that Grantee has not breached, or is not breaching, any covenant in this Non-Competition Agreement.(g)Acknowledgments.(i)Grantee acknowledges and agrees that this Non-Competition Agreement is in consideration of, (A) the grant evidenced bythe Agreement, (B) access to Confidential/Proprietary Trade Secret Information, as required by Grantee's job duties, and (C)access to important customer relationships and the associated customer goodwill of the Company.(ii)Grantee acknowledges that he or she has carefully read and considered the provisions of this Non-Competition Agreement,and that this Non-Competition Agreement is reasonable as to time and scope and activities prohibited, given the Company’sneed to protect its interests and given the consideration provided to Grantee in the form of the grant evidenced by theAgreement.(iii)Grantee acknowledges that he or she has had an opportunity to consult with an independent legal counsel of Grantee’schoosing, and accept the grant contained in the Agreement and continuing employment on the terms set forth in this Non-Competition Agreement. Exhibit 10(hh)EXHIBIT BAdditional Terms and Conditions for International EmployeesTERMS AND CONDITIONSThis Exhibit B (this “Exhibit”), which is part of the Agreement, contains additional terms and conditions that govern the PSUs grantedto the Grantee under the Plan if he or she resides outside the United States. The terms and conditions in Part A apply to all Granteesoutside the United States. The country-specific terms and conditions and/or notifications in Part B will also apply to the Grantee if heor she resides in one of the countries listed below. Unless otherwise defined, capitalized terms used but not defined in this Exhibit havethe meanings set forth in the Plan and/or the Agreement.NOTIFICATIONSThis Exhibit also includes information regarding exchange controls and certain other issues of which the Grantee should be aware withrespect to participation in the Plan. The information is based on the exchange control, securities and other laws in effect in therespective countries as of February 2016. Such laws are often complex and change frequently. As a result, the Company stronglyrecommends that the Grantee not rely on the information in this Exhibit as the only source of information relating to the consequencesof his or her participation in the Plan because the information may be out of date at the time that the Grantee vests in the PSUs or sellshares of Common Stock acquired under the Plan.In addition, the information contained herein is general in nature and may not apply to the Grantee’s particular situation, and theCompany is not in a position to assure the Grantee of a particular result. Accordingly, the Grantee is advised to seek appropriateprofessional advice as to how the relevant laws in his or her country may apply to the Grantee’s situation.Finally, if the Grantee is a citizen or resident, or is considered a resident, of a country other than the one in which he or she is currentlyworking, or transferred employment after the PSUs were granted to him or her, the information contained herein may not beapplicable. In addition, the Company shall, in its sole discretion, determine to what extent the additional terms and conditions includedherein will apply to you under these circumstances.A. ALL NON-U.S. COUNTRIES ADDITIONAL TERMS AND CONDITIONSThe following additional terms and conditions will apply to the Grantee if he or she resides in any country outside the United States.Responsibility for Taxes. The following section replaces Section 8 of the Agreement in its entirety:The Grantee acknowledges that, regardless of any action taken by the Company or, if different, the Grantee’s employer (the“Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Grantee’s participation in the Plan and legally applicable to the Grantee (“Tax-Related Items”) is andremains the Grantee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. The Granteefurther acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment ofany Tax-Related Items in connection with any aspect of the PSU, including, but not limited to, the grant, vesting or settlement of thePSUs, the subsequent sale of shares of Common Stock acquired pursuant to such settlement and the receipt of any dividends and/orany dividend Exhibit 10(hh)equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the PSUs toreduce or eliminate the Grantee’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Grantee is subject toTax-Related Items in more than one jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholdingevent, as applicable, the Grantee acknowledges that the Company and/or the Employer (or former employer, as applicable) may berequired to withhold or account for Tax-Related Items in more than one jurisdiction.Prior to any relevant taxable or tax withholding event, as applicable, the Grantee agrees to make adequate arrangements satisfactory tothe Company and/or the Employer to satisfy all Tax-Related Items. In this regard, the Grantee authorizes the Company and/or theEmployer to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following methods: (i)requiring payment by the Grantee to the Company, on demand, by cash, check or other method of payment as may be determinedacceptable by the Company; or (ii) withholding from the Grantee’s wages or other cash compensation paid to the Grantee by theCompany and/or the Employer; or (iii) withholding from proceeds of the sale of shares of Common Stock acquired at vesting of thePSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on the Grantee’s behalf pursuant to thisauthorization) without further consent; or (ii) withholding shares of Common Stock issuable at vesting of the PSUs.Depending on the withholding method, the Company and/or the Employer may withhold or account for Tax-Related Items byconsidering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates,in which case the Grantee will receive a refund of any over-withheld amount in cash and will have no entitlement to the CommonStock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, theGrantee is deemed to have been issued the full number of shares of Common Stock subject to the vested PSUs, notwithstanding that anumber of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items.Finally, the Grantee agrees to pay the Company or the Employer any amount of Tax-Related Items that the Company or the Employermay be required to withhold or account for as a result of the Grantee’s participation in the Plan that cannot be satisfied by the meanspreviously described. The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of Common Stock, ifthe Grantee fails to comply with the Grantee’s obligations in connection with the Tax-Related Items.Nature of Grant. In accepting the grant, the Grantee acknowledges, understands and agrees that: (1) the Plan is established voluntarilyby the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time,to the extent permitted by the Plan; (2) all decisions with respect to future PSU or other grants, if any, will be at the sole discretion ofthe Company; (3) the Grantee is voluntarily participating in the Plan; (4) the PSU and the shares of Common Stock subject to the PSUare not intended to replace any pension rights or compensation; (5) the future value of the underlying shares of Common Stock isunknown, indeterminable and cannot be predicted with certainty; (6) no claim or entitlement to compensation or damages shall arisefrom forfeiture of the PSUs resulting from the termination of the Grantee’s employment or other service relationship (for any reasonwhatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Grantee is employedor the terms of the Grantee’s employment agreement, if any), and in consideration of the grant of the PSUs to which the Grantee isotherwise not entitled, the Grantee irrevocably agrees never to institute any claim against the Company, any of its Subsidiaries or theEmployer, waives the Grantee’s ability, if any, to bring any such claim, and releases the Company, its Subsidiaries and the Employerfrom any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, byparticipating in the Plan, the Grantee shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any andall documents Exhibit 10(hh)necessary to request dismissal or withdrawal of such claim; (7) for purposes of the PSUs, the Grantee’s employment or servicerelationship will be considered terminated as of the date the Grantee is no longer actively providing services to the Company or one ofits Subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employmentlaws in the jurisdiction where the Grantee is employed or providing services or the terms of the Grantee’s employment or serviceagreement, if any) and unless otherwise expressly provided in these Terms and Conditions or determined by the Company, theGrantee’s right to vest in the PSUs under the Plan, if any, will terminate as of such date and will not be extended by any notice period(e.g., the Grantee’s period of service would not include any contractual notice period or any period of “garden leave” or similar periodmandated under employment laws in the jurisdiction where the Grantee is employed or providing services or the terms of the Grantee’semployment or service agreement, if any); the Company shall have the exclusive discretion to determine when the Grantee is no longeractively providing services for purposes of the Grantee’s PSU grant (including whether the Grantee may still be considered tobe providing services while on an approved leave of absence); (8) unless otherwise provided in the Plan or by the Company in itsdiscretion, the PSUs and the benefits evidenced by these Terms and Conditions do not create any entitlement to have the PSUs or anysuch benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection withany corporate transaction affecting the shares of the Company; (9) the PSUs and the shares of Common Stock subject to the PSUs, andthe income and value of same, are not part of normal or expected compensation for any purpose, including, without limitation,calculating severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pensionor retirement or welfare benefits or similar payments; and (10) the Grantee acknowledges and agrees that neither the Company, theEmployer nor any subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between theGrantee’s local currency and the United States Dollar that may affect the value of the PSUs or of any amounts due to the Granteepursuant to the settlement of the PSUs or the subsequent sale of any shares of Common Stock acquired upon settlement.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making anyrecommendations regarding the Grantee’s participation in the Plan, or the Grantee’s acquisition or sale of the underlying shares ofCommon Stock. The Grantee is hereby advised to consult with the Grantee’s own personal tax, legal and financial advisors regardingthe Grantee’s participation in the Plan before taking any action related to the Plan.Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or otherform, including email, of the Grantee’s personal data as described in the Agreement and any other PSU grant materials (“Data”)by and among, as applicable, the Employer, the Company and its subsidiaries and affiliates for the exclusive purpose ofimplementing, administering and managing the Grantee’s participation in the Plan.The Grantee understands that the Company and the Employer may hold certain personal information about the Grantee,including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social insurance number orother identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of allPSUs or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Grantee’sfavor, for the exclusive purpose of implementing, administering and managing the Plan.The Grantee understands that Data will be transferred to the Company’s stock transfer agent and/or broker, or such other stockplan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation,administration and management of the Plan. The Grantee understands that the recipients of the Data may be located in the UnitedStates or Exhibit 10(hh)elsewhere (including outside the EEA), and that the recipients’ country (e.g., the United States) may have different data privacylaws and protections than the Grantee’s country. The Grantee understands that the Grantee may request a list with the names andaddresses of any potential recipients of the Data by contacting the Grantee’s local human resources representative. The Granteeauthorizes the Company, the Company’s stock transfer agent and/or broker, and any other possible recipients which may assist theCompany (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain andtransfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Grantee’sparticipation in the Plan. The Grantee understands that Data will be held only as long as is necessary to implement, administer andmanage the Grantee’s participation in the Plan. The Grantee understands that the Grantee may, at any time, view Data, requestadditional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdrawthe consents herein, in any case without cost, by contacting in writing the Grantee’s local human resources representative.Further, the Grantee understands that the Grantee is providing the consents herein on a purely voluntary basis. If the Granteedoes not consent, or if the Grantee later seeks to revoke the Grantee’s consent, the Grantee’s employment status or service andcareer with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing the Grantee’sconsent is that the Company would not be able to grant the Grantee PSUs or other equity awards or administer or maintain suchawards. Therefore, the Grantee understands that refusing or withdrawing the Grantee’s consent may affect the Grantee’s ability toparticipate in the Plan. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent,the Grantee understands that the Grantee may contact the Grantee’s local human resources representative.Governing Law and Venue. The PSU grant and the provisions of the Agreement are governed by, and subject to, the internalsubstantive laws of the State of Delaware, United States of America (with the exception of its conflict of law provisions).For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or theAgreement, the parties hereby submit to and consent to the exclusive jurisdiction of the Commonwealth of Pennsylvania in the UnitedStates of America and agree that such litigation shall be conducted only in the courts of Cumberland County, the Commonwealth ofPennsylvania, or the federal courts for the United States of America for the Middle District of Pennsylvania, and no other courts, wherethis grant is made and/or to be performed.Compliance with Law. The following section supplements Section 9 of the Agreement:Notwithstanding any other provision of the Plan or the Agreement, unless there is an available exemption from any registration,qualification or other legal requirement applicable to the shares of Common Stock, the Company shall not be required to deliver anyshares issuable upon settlement of the PSUs prior to the completion of any registration or qualification of the shares under any local,state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and ExchangeCommission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from anylocal, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolutediscretion, deem necessary or advisable. The Grantee understands that the Company is under no obligation to register or qualify theshares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority forthe issuance or sale of the shares. Further, the Grantee agrees that Company shall have unilateral authority to amend the Plan and theAgreement without the Grantee’s consent to the extent necessary to comply with securities or other laws applicable to issuance ofshares. Exhibit 10(hh)Language. If the Grantee has received the Agreement or any other document related to the Plan translated into a language other thanEnglish and if the meaning of the translated version is different than the English version, the English version will control.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to current orfuture participation in the Plan by electronic means, including email. The Grantee hereby consents to receive such documents byelectronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by theCompany or a third party designated by the Company.Severability. The provisions of these Terms and Conditions are severable and if any one or more provisions are determined to beillegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.Imposition of Other Requirements. Subject to Section 14 of the Agreement, the Company reserves the right to impose otherrequirements on the Grantee’s participation in the Plan, on the PSUs and on any shares of Common Stock acquired under the Plan, tothe extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Grantee to signany additional agreements or undertakings that may be necessary to accomplish the foregoing.Waiver. The Grantee acknowledges that a waiver by the Company of breach of any provision of these Terms and Conditions shall notoperate or be construed as a waiver of any other provision of these Terms and Conditions, or of any subsequent breach by the Granteeor any other Participant.B. COUNTRY-SPECIFIC ADDITIONAL TERMS AND CONDITIONS AND NOTIFICATIONSAUSTRALIATERMS AND CONDITIONSSettlement of PSUs. Notwithstanding anything to the contrary in the Agreement, due to local regulatory requirements, upon thevesting of the PSUs, the Grantee will receive a cash payment in an amount equal to the value of the shares of Common Stockunderlying the vested PSUs on the vesting date. As long as the Grantee resides in Australia, he or she may not receive or hold sharesof Common Stock in connection with the PSUs under the Plan. Accordingly, any provisions in the Agreement referring to issuance ofshares of Common Stock shall not be applicable to the Grantee as long as he or she resides in Australia.NOTIFICATIONSExchange Control Information. Exchange control reporting is required for cash transactions exceeding $10,000 and internationalfund transfers. The Australian bank assisting with the transaction will file the report. If there is no Australian bank involved in thetransfer, Grantee will be required to file the report.BELGIUMNOTIFICATIONSTax Reporting Information. Grantee is required to report any bank accounts opened and maintained outside of Belgium on his or herannual Belgian tax return. Exhibit 10(hh)BRAZILTERMS AND CONDITIONSCompliance with Law. By accepting the PSUs, the Grantee acknowledges that he or she agrees to comply with applicable Brazilianlaws and pay any and all applicable taxes associated with the vesting of the PSUs, the receipt of any dividends, and the sale of sharesof Common Stock acquired under the Plan.NOTIFICATIONSExchange Control Information. If the Grantee is resident or domiciled in Brazil, he or she will be required to submit annually adeclaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights isequal to or greater than US $100,000. Assets and rights that must be reported include shares of Common Stock.CHINATERMS AND CONDITIONSSettlement of PSUs. Notwithstanding anything to the contrary in the Agreement, due to local regulatory requirements, upon thevesting of the PSUs, the Grantee will receive a cash payment in China via the Company’s local Chinese payroll in an amount equal tothe value of the shares of Common Stock underlying the vested PSUs on the vesting date. As long as the Grantee resides in China, heor she may not receive or hold shares of Common Stock in connection with the PSUs under the Plan. Accordingly, any provisions inthe Agreement referring to issuance of shares of Common Stock shall not be applicable to the Grantee as long as he or she resides inChina.FRANCETERMS AND CONDITIONSConsent to Receive Information in English. By accepting the grant of the PSUs, the Grantee confirms having read and understoodthe Plan and the Agreement, which were provided in the English language. The Grantee accepts the terms of those documentsaccordingly.En acceptant cette attribution gratuite d’actions, le Grantee confirme avoir lu et compris le Plan et ce Contrat, incluant tous leurstermes et conditions, qui ont été transmis en langue anglaise. Le Grantee accepte les dispositions de ces documents en connaissancede cause.NOTIFICATIONSTax Notification. The PSUs are not intended to be French tax-qualified. Please be aware that the Company intends that anyoutstanding PSUs granted to you pursuant to the 1995 Executive Incentive Compensation Plan Sub-plan for Restricted Stock UnitsGranted to Participants in France will continue to meet the requirements for qualified status under French law; therefore, different termsand conditions will apply to such outstanding PSUs. Please refer to the Restricted Stock Unit Agreement for Employees in Franceapplicable to your grant for further details.Exchange Control Notification. The Grantee may hold shares of Common Stock acquired under the Plan outside of France providedthat he or she declares all foreign accounts (including any accounts that were opened or closed during the tax year) on his or her annualFrench income tax return. Exhibit 10(hh)INDIATERMS AND CONDITIONSThe Grantee hereby agrees that it shall hold the shares of the Common Stock pursuant to this Agreement and the Plan, at all times inaccordance with the applicable laws in India, including but not limited to the (Indian) Foreign Exchange Management (Transfer orIssue of Any Foreign Security) Regulations, 2004 (and as amended or replaced), relevant master circulars, directions, notificationsissued in this regard by the Reserve Bank of India from time to time and shall carry out the necessary reporting with the Reserve Bankof India at all stages of granting and vesting, if and as may be required. The Grantee agrees to indemnify the Company and/orSubsidiary of the Company with respect to any non-compliance and/or non-adherence by the Grantee of any of the applicable laws inIndia arising out of holding of the shares of the Common Stock by the Grantee. The Grantee shall declare the holding of shares of the Common Stock, if and as may be necessary, in its income for taxation purposesand agrees to indemnify the Company and/or Subsidiary of the Company with respect to any and all taxes that it shall be obligated topay with respect to the shares of the Common Stock such as including but not limited to income tax, capital gain taxes etc., under thisAgreement and which may arise as a result of the sale of the shares of the Common Stock and the transactions contemplatedhereunder. LUXEMBOURGNOTIFICATIONSExchange Control Information. Grantee understands that Grantee is required to report any inward remittances of funds to theBanque Centrale de Luxembourg and/or the Service Central de la Statistique et des Études Économiques within 15 working daysfollowing the month during which the transaction occurred unless such payment is reported by a Luxembourg-resident financialinstitution.THE NETHERLANDSTERMS AND CONDITIONSNon-Competition Agreement. The non-competition agreement entered into between the Company and the Grantee shall be inaddition to any non-compete arrangements between the Grantee and his or her employer.SWITZERLANDTERMS AND CONDITIONSVesting: With the acceptance of a Grant, the Grantee expressly acknowledges that any RSU, PSU and/or SAR shall not give theGrantee any right or entitlement until such Grant is fully vested. The Grant remains fully discretionary until full vesting.Continuous Employment: In Switzerland, “continuously employed” (or substantially similar term) means the absence of anyinterruption or termination (issuance of termination notice) of the Grantee’s employment with the Company or with a Subsidiary of theCompany. Continuous employment shall not be considered interrupted or terminated in the case of sick leave, military leave or anyother leave of absence approved by the Company for which compensation needs to be paid by the Company or salary replacementbenefits are granted by any insurance or in the case of transfers between locations of the Company and its Subsidiaries. For theavoidance of any doubt, continuous employment ends in any case Exhibit 10(hh)with the end of the employment, even if any salary replacement benefits continue to be paid by any insurance, pension scheme orsocial security.Retirement: For the purpose of the Plan, only a retirement under the rules and conditions of the Swiss pension scheme of theSubsidiary employing the Grantee shall qualify as retirement for the purpose of vesting of RSU, PSU or termination of SAR, and onlyif such retirements is (A) at age 62 or older while employed by the Company or any of its Subsidiaries; or (B) at or after such time asthe Grantee’s age (minimum of age 55), plus full years of continuous employment by the Company or any of its Subsidiaries, equals75.Disability: For purposes of the Plan, the Grantee shall be considered “Disabled” if the Grantee is unable to engage in any substantialgainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death orqualifies as permanent full disability under the applicable Swiss social security and/or pension lawsNon-Competition Agreement: For the avoidance of any doubt, any non-competition agreement entered into between the Grantee andthe Company in connection with the Plan and grants thereunder shall be in addition to any non-competition agreement agreed betweenthe Grantee and the employing Subsidiary and shall not replace such non-competition agreement.NOTIFICATIONSExchange Control Notification. The Grantee may hold shares of Common Stock acquired under the Plan outside of Switzerlandprovided that he or she declares all foreign accounts (including any accounts that were opened or closed during the tax year) on his orher annual Swiss tax declaration.UNITED ARAB EMIRATESNOTIFICATIONSSecurities Law Notice. PSUs under the Plan are granted only to select executive officers and other employees of the Company and itssubsidiaries for the purpose of providing such eligible persons with incentives and rewards for performance. The Agreement, includingthis Exhibit, the Plan and any documents the Grantee may receive in connection with the PSUs are intended for distribution to sucheligible persons and must not be delivered to, or relied on, by any other person.The Emirates Securities and Commodities Authority, the Central Bank, the Ministry of Economy and the Dubai Department ofEconomic Development do not have any responsibility for reviewing or verifying any documents in connection with the Plan nor havethey reviewed or approved the Plan or the Agreement. The securities to which this statement relates may be illiquid and/or subject torestrictions on their resale. The Grantee and/or prospective purchasers of the securities offered should conduct their own due diligenceon the securities.If the Grantee does not understand the contents of the Agreement, including this Exhibit, or the Plan, the Grantee should consult anauthorized financial adviser.UNITED KINGDOMTERMS AND CONDITIONSU.K. Sub-Plan. The terms of the U.K. Sub-plan apply to the PSUs. Exhibit 10(hh)EXHIBIT CStatement of Management ObjectivesThis Statement of Management Objectives applies to the performance-based Restricted Stock Units granted to the Grantee on the Dateof Grant and applies with respect to the Performance Share Units Agreement between the Company and the Grantee (the“Agreement”). Capitalized terms used in the Agreement that are not specifically defined in this Statement of Management Objectiveshave the meanings assigned to them in the Agreement or in the Plan, as applicable.Section 1. Definitions. For purposes hereof:•“Peer Group” means S&P 600® Industrials Index.•“Relative Total Stockholder Return” or “RTSR” means the percentile rank of the Company’s Total StockholderReturn among the Total Stockholder Returns of all members of the Peer Group, ranked in descending order, at the endof the Performance Period.•“Total Stockholder Return” means, with respect to the Common Stock and the common stock of each of the membersof the Peer Group, a rate of return reflecting stock price appreciation, plus the reinvestment of dividends in additionalshares of stock on the ex-dividend date, from the beginning of the Performance Period through the end of thePerformance Period. For purposes of calculating Total Stockholder Return for each of the Company and the membersof the Peer Group, the beginning stock price will be based on the average closing stock price for the 30 calendar daysimmediately preceding January 1, 2016 on the principal stock exchange on which the stock then traded and the endingstock price will be based on the average closing stock price for the 30 calendar days immediately preceding January 1,2019 on the principal stock exchange on which the stock then trades.Section 2. Performance Matrix.From 0% to 200% of the PSUs will be earned based on achievement of the Management Objectives measured by RTSRduring the Performance Period as follows:Performance LevelRelative Total Stockholder ReturnPSUs EarnedBelow ThresholdRanked below 25th percentile0%ThresholdRanked at 25th percentile25%TargetRanked at 50th percentile100%MaximumRanked at or above 75th percentile200%Notwithstanding anything in this Statement of Management Objectives or the Agreement to the contrary, no PSUs will be earned bythe Grantee if Total Stockholder Return for the Company for the Performance Period is negative.Section 3. Number of PSUs Earned. Following the Performance Period, on the Committee Determination Date, the Committee shalldetermine whether and to what extent the goals relating to the Management Objectives have been satisfied for the Performance Periodand shall determine the number of PSUs that shall become nonforfeitable hereunder and under the Agreement on the basis of thefollowing:•Below Threshold. If, upon the conclusion of the Performance Period, RTSR for the Performance Period falls below thethreshold level, as set forth in the Performance Matrix, no PSUs shall become nonforfeitable. Exhibit 10(hh)•Threshold. If, upon the conclusion of the Performance Period, RTSR for the Performance Period equals the thresholdlevel, as set forth in the Performance Matrix, 25% of the PSUs (rounded down to the nearest whole number of PSUs)shall become nonforfeitable.•Between Threshold and Target. If, upon the conclusion of the Performance Period, RTSR for the Performance Periodexceeds the threshold level, but is less than the target level, as set forth in the Performance Matrix, a percentage between25% and 100% (determined on the basis of straight-line mathematical interpolation) of the PSUs (rounded down to thenearest whole number of PSUs) shall become nonforfeitable.•Target. If, upon the conclusion of the Performance Period, RTSR for the Performance Period equals the target level, asset forth in the Performance Matrix, 100% of the PSUs shall become nonforfeitable.•Between Target and Maximum. If, upon the conclusion of the Performance Period, RTSR for the Performance Periodexceeds the target level, but is less than the maximum level, as set forth in the Performance Matrix, a percentagebetween 100% and 200% (determined on the basis of straight-line mathematical interpolation) of the PSUs (roundeddown to the nearest whole number of PSUs) shall become nonforfeitable.•Equals or Exceeds Maximum. If, upon the conclusion of the Performance Period, RTSR for the Performance Periodequals or exceeds the maximum level, as set forth in the Performance Matrix, 200% of the PSUs shall becomenonforfeitable.Before all or any portion of any Qualified Performance-Based Award of PSUs shall become nonforfeitable or paid in accordance withthis Statement of Management Objectives or the Agreement, the Committee shall determine in writing that the Management Objectiveshave been satisfied. Exhibit 10(ii)HARSCO CORPORATIONRESTRICTED STOCK UNITS AGREEMENT(FORM)This RESTRICTED STOCK UNITS AGREEMENT (this “Agreement”) is made as of _________ ___, 20__, by andbetween Harsco Corporation, a Delaware corporation, and _________________ (the “Grantee”).1.Certain Definitions. Capitalized terms used, but not otherwise defined, in this Agreement will have the meaningsgiven to such terms in the Company’s 2013 Equity and Incentive Compensation Plan (the “Plan”).2.Grant of RSUs. Subject to and upon the terms, conditions and restrictions set forth in this Agreement, including,without limitation, Exhibit A attached hereto (the “Non-Competition Agreement”), and any additional terms and conditions for theGrantee's country (Grantees outside the United States only) set forth in the attached Exhibit B which forms part of this Agreement,and in the Plan the Company has granted to the Grantee, as of _________ ___, 20__ (the “Date of Grant”), __________ RestrictedStock Units (“RSUs”). Each RSU shall represent the right of the Grantee to receive one share of Common Stock subject to and uponthe terms and conditions of this Agreement. Notwithstanding anything in this Section 2 or otherwise in this Agreement to the contrary,the Grantee acknowledges and agrees to be bound by the restrictive covenant terms, conditions and provisions in the Non-CompetitionAgreement as a “Grantee” as referred to therein.3.Restrictions on Transfer of RSUs. Subject to Section 15 of the Plan, neither the RSUs granted hereby nor anyinterest therein or in the Common Stock related thereto shall be transferable prior to payment to the Grantee pursuant to Section 5hereof other than by will or pursuant to the laws of descent and distribution.4.Vesting of RSUs. [Subject to the terms and conditions of this Agreement and the Plan, the RSUs covered by thisAgreement shall vest as described in this Section. One-third of the RSUs shall vest on the first anniversary of the Date of Grant if theGrantee remains in the continuous employ of the Company or one of its Subsidiaries from the Date of Grant through such firstanniversary. An additional one-third of the RSUs shall vest on each subsequent anniversary of the Date of Grant, through the thirdanniversary of the Date of Grant, when 100% of the RSUs shall vest, if the Grantee remains in the continuous employ of the Companyor one of its Subsidiaries from the Date of Grant through each such anniversary.](a)The RSUs covered by this Agreement shall vest and become nonforfeitable and payable to the Grantee pursuant toSection 5 hereof as follows, provided you have continuously been employed with the Company or a Subsidiarythrough such respective Vesting Date:Percentage of RSU VestingVesting Date33.3%(a) One Year from Grant Date33.3%(b) Two Years from Grant Date33.3%(c) Three Years From Grant Date Exhibit 10(ii)Any RSUs that do not so become nonforfeitable on a Vesting Date will be forfeited, including, except as provided inSection 4(b) or Section 4(d) below, if the Grantee ceases to be continuously employed by the Company or aSubsidiary prior to a Vesting Date. For purposes of this Agreement, “continuously employed” (or substantially similarterm) means the absence of any interruption or termination of the Grantee’s employment with the Company or with aSubsidiary of the Company. Continuous employment shall not be considered interrupted or terminated in the case ofsick leave, military leave or any other leave of absence approved by the Company or in the case of transfers betweenlocations of the Company and its Subsidiaries.(b)Notwithstanding Section 4(a) above, all of the RSUs shall become nonforfeitable and payable to the Grantee pursuantto Section 5 hereof upon the occurrence of any of the following events (each, a “Paying Event”) at a time when theRSUs have not been forfeited (to the extent the RSUs have not previously become nonforfeitable):(i)the Grantee’s death or becoming Disabled while the Grantee is continuously employed by the Company or anyof its Subsidiaries; or(ii)the Grantee’s retirement (A) at age 62 or older while continuously employed by the Company or any of itsSubsidiaries; or (B) at or after such time as the Grantee’s age (minimum of age 55), plus full years of continuousemployment by the Company or any of its Subsidiaries, equals 75.(c)For purposes of this Section 4, the Grantee shall be considered “Disabled” if the Grantee is: (i) unable to engage in anysubstantial gainful activity by reason of any medically determinable physical or mental impairment which can beexpected to result in death or can be expected to last for a continuous period of not less than twelve months, or (ii) byreason of any medically determinable physical or mental impairment which can be expected to result in death or can beexpected to last for a continuous period of not less than twelve months, receiving income replacement benefits for aperiod of not less than three months under an accident and health plan covering employees of the Company.(d)(i)Notwithstanding Section 4(a) above, if at any time before a Vesting Date or forfeiture of the RSUs, and whilethe Grantee is continuously employed by the Company or a Subsidiary, a Change in Control occurs, then theunvested RSUs will become nonforfeitable and payable to the Grantee in accordance with Section 5 hereof,except to the extent that a Replacement Award is provided to the Grantee in accordance with Section 4(d)(ii) tocontinue, replace or assume the RSUs covered by this Agreement (the “Replaced Award”).(ii)For purposes of this Agreement, a “Replacement Award” means an award (A) of the same type (e.g., time-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of theReplaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in theChange in Control or another entity that is affiliated with the Company or its successor following the Change inControl or is payable solely in cash, (D) if the Grantee holding the Replaced Award is subject to U.S. federalincome tax under the Code, the tax consequences of which to such Grantee under the Code are not lessfavorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms andconditions of which are not less favorable to the Grantee holding the Replaced Award than the terms andconditions of the Replaced Award Exhibit 10(ii)(including the provisions that would apply in the event of a subsequent Change in Control). A ReplacementAward may be granted only to the extent it does not result in the Replaced Award or Replacement Awardfailing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of theforegoing, the Replacement Award may take the form of a continuation of the Replaced Award if therequirements of the two preceding sentences are satisfied. The determination of whether the conditions of thisSection 4(d)(ii) are satisfied will be made by the Committee, as constituted immediately before the Change inControl, in its sole discretion.(iii)If, upon receiving a Replacement Award, the Grantee’s employment with the Company or a Subsidiary (or anyof their successors) (as applicable, the “Successor”) is subsequently terminated by the Grantee for Good Reasonor by the Successor without Cause within a period of two years after the Change in Control, 100% of theReplacement Award will become nonforfeitable and payable with respect to the time-based restricted stock unitscovered by such Replacement Award.(iv)A termination by the Grantee for “Good Reason” means Grantee’s termination of his or her employment withthe Successor as a result of the occurrence of any of the following: (A) a change in the Grantee’s principallocation of employment that is greater than 50 miles from such location as of the date of this Agreement withoutthe Grantee’s consent; provided, however, that the Grantee hereby acknowledges that the Grantee may berequired to engage in travel in connection with the performance of the Grantee’s duties and that such travel shallnot constitute a change in the Grantee’s principal location of employment for purposes hereof; (B) a materialdiminution in the Grantee’s base compensation; (C) a change in the Grantee’s position with the Successorwithout the Grantee’s consent such that there is a material diminution in the Grantee’s authority, duties orresponsibilities; or (D) any other action or inaction that constitutes a material breach by the Successor of theagreement, if any, under which the Grantee provides services to the Successor or its subsidiaries.Notwithstanding the foregoing, the Grantee’s termination of the Grantee’s employment with the Successor as aresult of the occurrence of any of the foregoing shall not constitute a termination for “Good Reason” unless (X)the Grantee gives the Successor written notice of such occurrence within 90 days of such occurrence and suchoccurrence is not cured by the Successor within 30 days of the date on which such written notice is received bythe Successor and (Y) the Grantee actually terminates his or her employment with the Successor prior to the365th day following such occurrence.(v)A termination by the Successor without “Cause” means the Successor’s termination of the Grantee’semployment with the Successor under circumstances that do not involve or relate to the occurrence of any of thefollowing: (A) an act or acts of personal dishonesty taken by the Grantee and intended to result in substantialpersonal enrichment of the Grantee at the expense of the Company; (B) repeated failure by the Grantee todevote reasonable attention and time during normal business hours to the business and affairs of the Companyor to use the Grantee’s reasonable best efforts to perform faithfully and efficiently the responsibilities assigned tothe Grantee (provided that such failure is demonstrated to be willful and deliberate on the Grantee’s part and isnot remedied in a reasonable period of time after receipt of written notice from the Company); or (C) theconviction of the Grantee of a felony. Exhibit 10(ii)5.Form and Time of Payment of RSUs.(a)Payment for the RSUs, after and to the extent they have become nonforfeitable, shall be made in the form of shares ofCommon Stock. Except as provided in Section 5(b) or 5(c), payment shall be made within 10 days following the datethat the RSUs become nonforfeitable pursuant to Section 4 hereof.(b)If the RSUs become nonforfeitable (i) by reason of the occurrence of a Change in Control as described in Section 4(d),and if the Change in Control does not constitute a “change in control” for purposes of Section 409A(a)(2)(A)(v) of theCode, or (ii) by reason of a termination of the Grantee’s employment by reason of retirement, and if such terminationdoes not constitute a “separation from service” for purposes of Section 409A(a)(2)(A)(i) of the Code, then payment forRSUs will be made upon the earliest of (v) the Grantee’s “separation from service” with the Company and itsSubsidiaries (determined in accordance with Section 409A(a)(2)(A)(i) of the Code), (w) the Vesting Date for suchRSUs, (x) the Grantee’s death, (y) the occurrence of a Change in Control that constitutes a “change in control” forpurposes of Section 409A(a)(2)(A)(v) of the Code, or (z) the Grantee’s becoming Disabled.(c)If the RSUs become payable on the Grantee’s “separation from service” with the Company and its Subsidiaries withinthe meaning of Section 409A(a)(2)(A)(i) of the Code (including by reason of the Grantee’s retirement as described inSection 4(b)(ii), due to the termination of the Grantee’s employment under the conditions specified in Section 4(d)(iii)of this Agreement or by reason of Section 5(b)) and the Grantee is a “specified employee” as determined pursuant toprocedures adopted by the Company in compliance with Section 409A of the Code, then payment for the RSUs shallbe made on the earlier of the first day of the seventh month after the date of the Grantee’s “separation from service”with the Company and its Subsidiaries within the meaning of Section 409A(a)(2)(A)(i) of the Code or the Grantee’sdeath.(d)Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Common Stock maybe issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.(e)The Company’s obligations to the Grantee with respect to the RSUs will be satisfied in full upon the issuance ofCommon Stock corresponding to such RSUs.6.Dividend Equivalents; Voting and Other Rights.(a)The Grantee shall have no rights of ownership in the Common Stock underlying the RSUs and no right to vote theCommon Stock underlying the RSUs until the date on which the shares of Common Stock underlying the RSUs areissued or transferred to the Grantee pursuant to Section 5 above.(b)From and after the Date of Grant and until the earlier of (i) the time when the RSUs become nonforfeitable and are paidin accordance with Section 5 hereof or (ii) the time when the Grantee’s right to receive Common Stock in payment ofthe RSUs is forfeited in accordance with Section 4 hereof, on the date that the Company pays a cash dividend (if any)to holders of Common Stock generally, the Grantee shall be entitled to a current cash Exhibit 10(ii)payment equal to the value of the product of (x) the dollar amount of the cash dividend paid per share of CommonStock on such date and (y) the total number of RSUs covered by this Agreement. Such dividend equivalents (if any)shall be paid in cash during the vesting period for the RSUs.(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of theCompany to deliver shares of Common Stock in the future, and the rights of the Grantee will be no greater than that ofan unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of theCompany under this Agreement.7.Adjustments. The RSUs are subject to mandatory adjustment under the terms of Section 11 of the Plan.8.Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes inconnection with the delivery to the Grantee of Common Stock or any other payment to the Grantee or any other payment or vestingevent under this Agreement, the Grantee hereby authorizes withholding from payroll and any other amounts payable to the Grantee,including amounts payable hereunder, and otherwise agrees to make adequate provision for, any sums required to satisfy such taxwithholding obligations of the Company. The Company shall have no obligation to make delivery or payment hereunder until the taxwithholding obligations of the Company have been satisfied by the Grantee. If all or any part of such withholding requirement besatisfied by retention by the Company of a portion of the Common Stock to be delivered to the Grantee or by delivering to theCompany other shares of Common Stock held by the Grantee, the shares so retained shall be credited against such withholdingrequirement at the Market Value per Share of such Common Stock on the date of such delivery. In no event will the market value ofthe Common Stock to be withheld and/or delivered pursuant to this Section 8 to satisfy applicable withholding taxes exceed theminimum amount of taxes required to be withheld, unless otherwise agreed to by the Grantee, provided, however, that such amountshall not exceed the statutory maximum withholding rates.9.Compliance With Law. The Company shall make reasonable efforts to comply with all applicable federal and statesecurities laws; provided, however, notwithstanding any other provision of the Plan and this Agreement, the Company shall not beobligated to issue any Common Stock pursuant to this Agreement if the issuance thereof would result in a violation of any such law.10.Compliance With Section 409A of the Code. To the extent applicable, it is intended that this Agreement and thePlan comply with the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a mannerconsistent with this intent, and any provision that would cause this Agreement or the Plan to fail to satisfy Section 409A of the Codeshall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to theextent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee).11.Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed,temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of theTreasury or the Internal Revenue Service. Except as expressly provided in this Agreement, capitalized terms used herein will have themeaning ascribed to such terms in the Plan. Exhibit 10(ii)12.No Employment Rights. The grant of the RSUs under this Agreement to the Grantee is a voluntary, discretionaryaward being made on a one-time basis and it does not constitute a commitment to make any future awards. The grant of the RSUs andany payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similarallowance, except as otherwise required by law. Nothing contained in this Agreement shall confer upon the Grantee any right to beemployed or remain employed by the Company or any of its Subsidiaries, nor limit or affect in any manner the right of the Company orany of its Subsidiaries to terminate the employment or adjust the compensation of the Grantee.13.Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement or the Plan shallnot be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or otherbenefit or compensation plan maintained by the Company or any of its Subsidiaries and shall not affect the amount of any lifeinsurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or any of itsSubsidiaries.14.Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent thatthe amendment is applicable hereto; provided, however, that (a) no amendment shall adversely affect the rights of the Grantee underthis Agreement without the Grantee’s written consent, and (b) the Grantee’s consent shall not be required to an amendment that isdeemed necessary by the Company to ensure compliance with Section 409A of the Code.15.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason bya court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, andthe remaining provisions hereof shall continue to be valid and fully enforceable.16.Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of anyinconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to thePlan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determineany questions which arise in connection with this Agreement. In addition, the RSUs shall be subject to the terms and conditions of theCompany’s clawback policy in effect on the Date of Grant as if such RSUs were “Incentive-Based Compensation” (as such term isdefined in such clawback policy).17.Successors and Assigns. Without limiting Section 3 hereof, the provisions of this Agreement shall inure to thebenefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and thesuccessors and assigns of the Company.18.Acknowledgement. The Grantee acknowledges that the Grantee (a) has received a copy of the Plan, (b) has had anopportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and thePlan and (d) agrees to such terms and conditions.19.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to bean original but all of which together will constitute one and the same agreement.[signature page follows] Exhibit 10(ii)IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officerand the Grantee has executed this Agreement, effective as of the day and year first above written. HARSCO CORPORATION By:/s/ F. Nicholas Grasberger IIIName:F. Nicholas Grasberger IIITitle:President and CEOThe undersigned hereby acknowledges receipt of an executed version of this Agreement and accepts the award of RSUsgranted hereunder on the terms and conditions set forth herein and in the Plan (including the terms of the Non-Competition Agreement,attached hereto as Exhibit A). GRANTEE By:______________Name: Exhibit 10(ii)EXHIBIT ANon-Competition Agreement1.Grant. Grantee acknowledges that Grantee has access to the confidential and proprietary trade secret information of HarscoCorporation, including its subsidiaries, joint ventures, and operating divisions (the “Company”), as further described below(“Confidential/Proprietary Trade Secret Information”). Further, Grantee acknowledges that Grantee derives significant value fromthe Company and from the Confidential/Proprietary Trade Secret Information provided during the term of employment with theCompany, which enables Grantee to optimize the performance of the Company’s performance and Grantee’s own personal,professional, and financial benefit. In consideration of the grant described in the award agreement (the “Agreement”) to which theseterms, conditions and provisions (the “Non-Competition Agreement”) are attached as an exhibit, Grantee agrees that, duringGrantee's employment by the Company, and for a period of twelve (12) months after the cessation of such employment for anyreason (both such periods collectively referred to as the “Restricted Period”), Grantee will not, directly or indirectly, engage in anyof the following competitive activities:(a)For Grantee or on behalf of any other corporation, business, partnership, individual, or other entity, directly or indirectly solicit,divert, contract with, or attempt to solicit, divert, or contract with, any customer with whom Grantee had Material Contact duringthe final two (2) years of Grantee’s employment with the Company concerning any products or services that are similar to thosethat Grantee was responsible for or were otherwise involved with during Grantee’s employment with the Company. Forpurposes of this Non-Competition Agreement, the Grantee will have had “Material Contact” with a customer if: (i) Grantee hadbusiness dealings with the customer on the Company’s behalf; (ii) Grantee was responsible for supervising or coordinating thedealings between the Company and the customer; or (iii) Grantee obtained Confidential/Proprietary Trade Secret Informationabout the customer as a result of Grantee’s association with the Company;(b)Within the geographic territory where Grantee was employed by the Company, obtained knowledge of Confidential/ProprietaryTrade Secret Information, or had contact with the Company's customers, become employed by or otherwise render services to(as a director, employee, contractor or consultant) or have any ownership interest in any business which is engaged in offeringthe same or similar products or services as, or otherwise competes with those Company, including its subsidiaries and operatingunit(s) with which Grantee was employed or in any way involved during the last twelve (12) months of employment with theCompany; or(c)(i) induce, offer, assist, encourage or suggest that another business or enterprise offer employment to or enter into a consultingarrangement with any employee, agent or representative of the Company or (ii) induce, offer, assist, encourage or suggest thatany employee, agent or representative of the Company, including its subsidiaries and joint ventures, terminate his or heremployment or business affiliation with the Company or accept employment with any other business or enterprise.(d)Confidential/Proprietary Trade Secret Information.(i)Grantee agrees to keep secret and confidential all Confidential/Proprietary Trade Secret Information (further describedbelow) acquired by Grantee while employed by the Company or concerning the business and affairs of the Company, itsvendors, its customers, and its affiliates (whether of a business, commercial or technological nature), and further agrees thatGrantee will not disclose any such Confidential/Proprietary Trade Secret Information so acquired to any individual, partner,company, firm, corporation or other person or use the same in any manner other than in connection with the business andaffairs of the Company and its affiliates. Except in the performance of services for the Company, the Grantee will not, for solong as the Confidential/Proprietary Trade Secret Information remains so designated under applicable law, use, disclose,reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer the Confidential/Proprietary TradeSecret Information or any portion thereof. Exhibit 10(ii)(ii)For purposes of this Non-Competition Agreement, “Confidential/Proprietary Trade Secret Information” includes allinformation of a confidential or proprietary nature that relates to the business, products, services, research or development ofthe Company, and its affiliates or their respective suppliers, distributors, customers, independent contractors or otherbusiness relations. Confidential/Proprietary Trade Secret Information also includes, but is not limited to, the following: (A)internal business information (including information relating to strategic and staffing plans and practices, business, training,financial, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and businessmethods and customer and supplier lists); (B) identities of, individual requirements of, specific contractual arrangementswith and information about, the Company’s suppliers, distributors, customers, independent contractors or other businessrelations and their confidential information; (C) trade secrets, copyrightable works and other confidential information(including ideas, formulas, recipes, compositions, inventions, innovations, improvements, developments, methods, know-how, manufacturing and production processes and techniques, research and development information, compilations of dataand analyses, data and databases relating thereto, techniques, systems, records, manuals, documentation, models, drawings,specifications, designs, plans, proposals, reports and all similar or related information whether patentable or unpatentableand whether or not reduced to practice); (D) other intellectual property rights of the Company, or any of its affiliates; and (E)any other information that would constitute a trade secret under the Pennsylvania Uniform Trade Secrets Act, as amendedfrom time to time (or any successor). The term “Confidential/Proprietary Trade Secret Information” also includes anyinformation or data described above which the Company obtains from another party and which the Company treats asproprietary or designates as trade secrets, whether or not owned or developed by the Company.(iii)All documents and materials supplied to Grantee or developed by Grantee in the course of, or as a result of Grantee’semployment at the Company whether in hard copy, electronic format or otherwise shall be the sole property of theCompany. Grantee will at any time upon the request of the Company and in any event promptly upon termination ofGrantee’s employment or relationship with the Company, but in any event no later than five (5) business days after suchtermination, deliver all such materials to the Company and will not retain any originals or copies of such materials, whetherin hard copy form or as computerized and/or electronic records. Except to the extent approved by the Company or requiredby Grantee’s bona fide job duties for the Company, the Grantee also agrees that Grantee will not copy or remove from theCompany’s place of business or the place of business of a customer of the Company, property or information belonging tothe Company or the customer or entrusted to the Company or the customer. In addition, the Grantee agrees that Grantee willnot provide any such materials to any competitor of or entity seeking to compete with the Company unless specificallyapproved in writing by the Company. Notwithstanding anything in paragraph 1(d)(3) of this Non-Competition Agreement tothe contrary, if the Company needs to take legal action to secure such return delivery of such materials, Grantee shall beresponsible for all legal fees, costs and expenses incurred by the Company in doing so.2.Subsequent Employment.(a)Advise the Company of New Employment. In the event of a cessation of Grantee’s employment with the Company, and duringthe Restricted Period described in paragraph 1 above, Grantee agrees to disclose to the Company, the name and address of anynew employer or business affiliation within ten (10) calendar days of Grantee’s accepting such position. In the event thatGrantee fails to notify the Company of such new employment or business affiliation as required above, the Restricted Periodwill be extended by a period equal to the period of nondisclosure. (b)Grantee’s Ability to Earn Livelihood. Grantee acknowledges that, in the event of a cessation of Grantee’s employment with theCompany, for any reason and at any time, the provisions of paragraph 1 of this Non-Competition Agreement will notunreasonably restrict Grantee’s ability to earn a living. Grantee and the Company acknowledge that Grantee’s rights have beenlimited by this Non-Competition Agreement only to the extent reasonably necessary to protect the legitimate interests of theCompany in its Confidential/Proprietary Trade Secret Information. Exhibit 10(ii)3.Enforcement. Grantee agrees that if Grantee violates the covenants and agreements set forth in this Non-Competition Agreement,the Company would suffer irreparable harm, and that such harm to the Company may be impossible to measure in monetarydamages. Accordingly, in addition to any other remedies which the Company may have at law or in equity, the Company will havethe right to have all obligations, undertakings, agreements, covenants and other provisions of this Non-Competition Agreementspecifically performed by Grantee, and the Company will have the right to obtain preliminary and permanent injunctive relief tosecure specific performance, and to prevent a breach or contemplated breach, of this Non-Competition Agreement. In such event,the Company will be entitled to an accounting and repayment of all profits, compensation, remunerations or benefits which Granteeor others, directly or indirectly, have realized or may realize as a result of, growing out of, or in conjunction with any violation ofthis Non-Competition Agreement. Such remedies will be an addition to and not in limitation of any injunctive relief or other rightsor remedies to which the Company is or may be entitled at law or in equity. In the event that the Company obtains any requestedrelief in any action brought to enforce the terms of this Non-Competition Agreement through court proceedings, the Company willbe entitled to reimbursement for all legal fees, costs and expenses incident to enforcement.4.Severability. If any section, paragraph, term or provision of this Non-Competition Agreement, or the application thereof, isdetermined by a competent court or tribunal to be invalid or unenforceable, then the other parts of such section, paragraph, term orprovision will not be affected thereby and will be given full force and effect without regard to the invalid or unenforceable portions,and the section, paragraph, term or provision of this Non-Competition Agreement will be deemed modified to the extent necessaryto render it valid and enforceable.5.Miscellaneous.(a)Employment.(i)This Non-Competition Agreement does not constitute a guarantee of employment and termination of employment will notaffect the enforceability of this Non-Competition Agreement.(ii)Grantee agrees that if Grantee is transferred from the entity or division which was Grantee’s employer at the time Granteesigned this Non-Competition Agreement to employment by another division or another company that is a subsidiary oraffiliate of Harsco Corporation, and Grantee has not entered into a superseding agreement with the new employer coveringthe subject matter of this Non-Competition Agreement, then this Non-Competition Agreement will continue in effect and theGrantee’s new employer will be termed “the Company” for all purposes hereunder and will have the right to enforce thisNon-Competition Agreement as Grantee’s employer. In the event of any subsequent transfer, Grantee’s new employer willsucceed to all rights under this Non-Competition Agreement so long as such employer will be Harsco Corporation or one ofits subsidiaries or affiliates and so long as this Non-Competition Agreement has not been superseded.(b)Headings. The headings contained in this Non-Competition Agreement are inserted for convenience of reference only, and willnot be deemed to be a part of this Non-Competition Agreement for any purposes, and will not in any way define or affect themeaning, construction or scope of any of the provisions of this Non-Competition Agreement.(c)Governing Law. This Non-Competition Agreement will be construed under the laws of the Commonwealth of Pennsylvania,without regard to its conflict of law provisions, and the parties consent and agree that the federal and state courts of theCommonwealth of Pennsylvania will have exclusive jurisdiction over any dispute relating to this Non-Competition Agreement.(d)Supplemental Nature of this Non-Competition Agreement. The restrictions set forth in paragraph 1 of this Non-CompetitionAgreement will be in addition to any other such restrictive covenants agreed to through separate agreements, if any, betweenGrantee and the Company and will survive the exercise of the equity award evidenced by the Agreement. Exhibit 10(ii)(e)Waiver. The failure by the Company to enforce any right or remedy available to it under this Non-Competition Agreement willnot be construed to be a waiver of such right or remedy with respect to any other prior, concurrent or subsequent breach orfailure. No waiver of rights under this Non-Competition Agreement will be effective unless made in writing with specificreference to this Non-Competition Agreement.(f)Notification. Grantee agreed that the Company may notify any third party about Grantee’s obligations under this Non-Competition Agreement until such time as Grantee has performed all of Grantee’s obligations hereunder. Upon the Company’srequest, Grantee agrees to provide the Company with information, including, but not limited to, supplying details of Grantee’ssubsequent employment, sufficient to verify that Grantee has not breached, or is not breaching, any covenant in this Non-Competition Agreement.(g)Acknowledgments.(i)Grantee acknowledges and agrees that this Non-Competition Agreement is in consideration of, (A) the grant evidenced bythe Agreement, (B) access to Confidential/Proprietary Trade Secret Information, as required by Grantee's job duties, and (C)access to important customer relationships and the associated customer goodwill of the Company.(ii)Grantee acknowledges that he or she has carefully read and considered the provisions of this Non-Competition Agreement,and that this Non-Competition Agreement is reasonable as to time and scope and activities prohibited, given the Company’sneed to protect its interests and given the consideration provided to Grantee in the form of the grant evidenced by theAgreement.(iii)Grantee acknowledges that he or she has had an opportunity to consult with an independent legal counsel of Grantee’schoosing, and accept the grant contained in the Agreement and continuing employment on the terms set forth in this Non-Competition Agreement. Exhibit 10(ii)EXHIBIT BAdditional Terms and Conditions for International EmployeesTERMS AND CONDITIONSThis Exhibit B (this “Exhibit”), which is part of the Agreement, contains additional terms and conditions that govern the RSUs grantedto the Grantee under the Plan if he or she resides outside the United States. The terms and conditions in Part A apply to all Granteesoutside the United States. The country-specific terms and conditions and/or notifications in Part B will also apply to the Grantee if heor she resides in one of the countries listed below. Unless otherwise defined, capitalized terms used but not defined in this Exhibit havethe meanings set forth in the Plan and/or the Agreement.NOTIFICATIONSThis Exhibit also includes information regarding exchange controls and certain other issues of which the Grantee should be aware withrespect to participation in the Plan. The information is based on the exchange control, securities and other laws in effect in therespective countries as of April 2016. Such laws are often complex and change frequently. As a result, the Company stronglyrecommends that the Grantee not rely on the information in this Exhibit as the only source of information relating to the consequencesof his or her participation in the Plan because the information may be out of date at the time that the Grantee vests in the RSUs or sellshares of Common Stock acquired under the Plan.In addition, the information contained herein is general in nature and may not apply to the Grantee’s particular situation, and theCompany is not in a position to assure the Grantee of a particular result. Accordingly, the Grantee is advised to seek appropriateprofessional advice as to how the relevant laws in his or her country may apply to the Grantee’s situation.Finally, if the Grantee is a citizen or resident, or is considered a resident, of a country other than the one in which he or she is currentlyworking, or transferred employment after the RSUs were granted to him or her, the information contained herein may not beapplicable. In addition, the Company shall, in its sole discretion, determine to what extent the additional terms and conditions includedherein will apply to you under these circumstances.A. ALL NON-U.S. COUNTRIES ADDITIONAL TERMS AND CONDITIONSThe following additional terms and conditions will apply to the Grantee if he or she resides in any country outside the United States.Responsibility for Taxes. The following section replaces Section 8 of the Agreement in its entirety:The Grantee acknowledges that, regardless of any action taken by the Company or, if different, the Grantee’s employer (the“Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Grantee’s participation in the Plan and legally applicable to the Grantee (“Tax-Related Items”) is andremains the Grantee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. The Granteefurther acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment ofany Tax-Related Items in connection with any aspect of the RSU, including, but not limited to, the grant, vesting or settlement of theRSUs, the subsequent sale of shares of Exhibit 10(ii)Common Stock acquired pursuant to such settlement and the receipt of any dividends and/or any dividend equivalents; and (2) do notcommit to and are under no obligation to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate the Grantee’sliability for Tax-Related Items or achieve any particular tax result. Further, if the Grantee is subject to Tax-Related Items in more thanone jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable, the Granteeacknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account forTax-Related Items in more than one jurisdiction.Prior to any relevant taxable or tax withholding event, as applicable, the Grantee agrees to make adequate arrangements satisfactory tothe Company and/or the Employer to satisfy all Tax-Related Items. In this regard, the Grantee authorizes the Company and/or theEmployer to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following methods: (i)requiring payment by the Grantee to the Company, on demand, by cash, check or other method of payment as may be determinedacceptable by the Company; or (ii) withholding from the Grantee’s wages or other cash compensation paid to the Grantee by theCompany and/or the Employer; or (iii) withholding from proceeds of the sale of shares of Common Stock acquired at vesting of theRSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on the Grantee’s behalf pursuant to thisauthorization) without further consent; or (ii) withholding shares of Common Stock issuable at vesting of the RSUs.Depending on the withholding method, the Company and/or the Employer may withhold or account for Tax-Related Items byconsidering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates,in which case the Grantee will receive a refund of any over-withheld amount in cash and will have no entitlement to the CommonStock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, theGrantee is deemed to have been issued the full number of shares of Common Stock subject to the vested RSUs, notwithstanding that anumber of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items.Finally, the Grantee agrees to pay the Company or the Employer any amount of Tax-Related Items that the Company or the Employermay be required to withhold or account for as a result of the Grantee’s participation in the Plan that cannot be satisfied by the meanspreviously described. The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of Common Stock, ifthe Grantee fails to comply with the Grantee’s obligations in connection with the Tax-Related Items.Nature of Grant. In accepting the grant, the Grantee acknowledges, understands and agrees that: (1) the Plan is established voluntarilyby the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time,to the extent permitted by the Plan; (2) all decisions with respect to future RSU or other grants, if any, will be at the sole discretion ofthe Company; (3) the Grantee is voluntarily participating in the Plan; (4) the RSU and the shares of Common Stock subject to the RSUare not intended to replace any pension rights or compensation; (5) the future value of the underlying shares of Common Stock isunknown, indeterminable and cannot be predicted with certainty; (6) no claim or entitlement to compensation or damages shall arisefrom forfeiture of the RSUs resulting from the termination of the Grantee’s employment or other service relationship (for any reasonwhatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Grantee is employedor the terms of the Grantee’s employment agreement, if any), and in consideration of the grant of the RSUs to which the Grantee isotherwise not entitled, the Grantee irrevocably agrees never to institute any claim against the Company, any of its Subsidiaries or theEmployer, waives the Grantee’s ability, if any, to bring any such claim, and releases the Company, its Subsidiaries and the Employerfrom any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, byparticipating in the Plan, the Grantee shall be Exhibit 10(ii)deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissalor withdrawal of such claim; (7) for purposes of the RSUs, the Grantee’s employment or service relationship will be consideredterminated as of the date the Grantee is no longer actively providing services to the Company or one of its Subsidiaries (regardless ofthe reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction wherethe Grantee is employed or providing services or the terms of the Grantee’s employment or service agreement, if any) and unlessotherwise expressly provided in these Terms and Conditions or determined by the Company, the Grantee’s right to vest in the RSUsunder the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., the Grantee’s period ofservice would not include any contractual notice period or any period of “garden leave” or similar period mandated under employmentlaws in the jurisdiction where the Grantee is employed or providing services or the terms of the Grantee’s employment or serviceagreement, if any); the Company shall have the exclusive discretion to determine when the Grantee is no longer actively providingservices for purposes of the Grantee’s RSU grant (including whether the Grantee may still be considered to be providing services whileon an approved leave of absence); (8) unless otherwise provided in the Plan or by the Company in its discretion, the RSUs and thebenefits evidenced by these Terms and Conditions do not create any entitlement to have the RSUs or any such benefits transferred to,or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transactionaffecting the shares of the Company; (9) the RSUs and the shares of Common Stock subject to the RSUs, and the income and value ofsame, are not part of normal or expected compensation for any purpose, including, without limitation, calculating severance,resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement orwelfare benefits or similar payments; and (10) the Grantee acknowledges and agrees that neither the Company, the Employer nor anysubsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between the Grantee’s local currencyand the United States Dollar that may affect the value of the RSUs or of any amounts due to the Grantee pursuant to the settlement ofthe RSUs or the subsequent sale of any shares of Common Stock acquired upon settlement.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making anyrecommendations regarding the Grantee’s participation in the Plan, or the Grantee’s acquisition or sale of the underlying shares ofCommon Stock. The Grantee is hereby advised to consult with the Grantee’s own personal tax, legal and financial advisors regardingthe Grantee’s participation in the Plan before taking any action related to the Plan.Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or otherform, including email, of the Grantee’s personal data as described in the Agreement and any other RSU grant materials (“Data”)by and among, as applicable, the Employer, the Company and its subsidiaries and affiliates for the exclusive purpose ofimplementing, administering and managing the Grantee’s participation in the Plan.The Grantee understands that the Company and the Employer may hold certain personal information about the Grantee,including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social insurance number orother identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of allRSUs or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Grantee’sfavor, for the exclusive purpose of implementing, administering and managing the Plan.The Grantee understands that Data will be transferred to the Company’s stock transfer agent and/or broker, or such other stockplan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation,administration and management of the Plan. Exhibit 10(ii)The Grantee understands that the recipients of the Data may be located in the United States or elsewhere (including outside theEEA), and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than theGrantee’s country. The Grantee understands that the Grantee may request a list with the names and addresses of any potentialrecipients of the Data by contacting the Grantee’s local human resources representative. The Grantee authorizes the Company, theCompany’s stock transfer agent and/or broker, and any other possible recipients which may assist the Company (presently or in thefuture) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, inelectronic or other form, for the sole purpose of implementing, administering and managing the Grantee’s participation in thePlan. The Grantee understands that Data will be held only as long as is necessary to implement, administer and manage theGrantee’s participation in the Plan. The Grantee understands that the Grantee may, at any time, view Data, request additionalinformation about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw theconsents herein, in any case without cost, by contacting in writing the Grantee’s local human resources representative. Further,the Grantee understands that the Grantee is providing the consents herein on a purely voluntary basis. If the Grantee does notconsent, or if the Grantee later seeks to revoke the Grantee’s consent, the Grantee’s employment status or service and career withthe Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing the Grantee’s consent is thatthe Company would not be able to grant the Grantee RSUs or other equity awards or administer or maintain such awards.Therefore, the Grantee understands that refusing or withdrawing the Grantee’s consent may affect the Grantee’s ability toparticipate in the Plan. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent,the Grantee understands that the Grantee may contact the Grantee’s local human resources representative.Governing Law and Venue. The RSU grant and the provisions of the Agreement are governed by, and subject to, the internalsubstantive laws of the State of Delaware in the United States of America (with the exception of its conflict of law provisions).For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or theAgreement, the parties hereby submit to and consent to the exclusive jurisdiction of the Commonwealth of Pennsylvania in the UnitedStates of America and agree that such litigation shall be conducted only in the courts of Cumberland County, the Commonwealth ofPennsylvania, or the federal courts for the United States of America for the Middle District of Pennsylvania, and no other courts, wherethis grant is made and/or to be performed.Compliance with Law. The following section supplements Section 9 of the Agreement:Notwithstanding any other provision of the Plan or the Agreement, unless there is an available exemption from any registration,qualification or other legal requirement applicable to the shares of Common Stock, the Company shall not be required to deliver anyshares issuable upon settlement of the RSUs prior to the completion of any registration or qualification of the shares under any local,state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and ExchangeCommission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from anylocal, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolutediscretion, deem necessary or advisable. The Grantee understands that the Company is under no obligation to register or qualify theshares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority forthe issuance or sale of the shares. Further, the Grantee agrees that Company shall have unilateral authority to amend the Plan and theAgreement without the Grantee’s consent to the extent necessary to comply with securities or other laws applicable to issuance ofshares. Exhibit 10(ii)Language. If the Grantee has received the Agreement or any other document related to the Plan translated into a language other thanEnglish and if the meaning of the translated version is different than the English version, the English version will control.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to current orfuture participation in the Plan by electronic means, including email. The Grantee hereby consents to receive such documents byelectronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by theCompany or a third party designated by the Company.Severability. The provisions of these Terms and Conditions are severable and if any one or more provisions are determined to beillegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.Imposition of Other Requirements. Subject to Section 14 of the Agreement, the Company reserves the right to impose otherrequirements on the Grantee’s participation in the Plan, on the RSUs and on any shares of Common Stock acquired under the Plan, tothe extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Grantee to signany additional agreements or undertakings that may be necessary to accomplish the foregoing.Waiver. The Grantee acknowledges that a waiver by the Company of breach of any provision of these Terms and Conditions shall notoperate or be construed as a waiver of any other provision of these Terms and Conditions, or of any subsequent breach by the Granteeor any other Participant.B. COUNTRY-SPECIFIC ADDITIONAL TERMS AND CONDITIONS AND NOTIFICATIONSAUSTRALIATERMS AND CONDITIONSSettlement of RSUs. Notwithstanding anything to the contrary in the Agreement, due to local regulatory requirements, upon thevesting of the RSUs, the Grantee will receive a cash payment in an amount equal to the value of the shares of Common Stockunderlying the vested RSUs on a vesting date. As long as the Grantee resides in Australia, he or she may not receive or hold shares ofCommon Stock in connection with the RSUs under the Plan. Accordingly, any provisions in the Agreement referring to issuance ofshares of Common Stock shall not be applicable to the Grantee as long as he or she resides in Australia. Exhibit 10(ii)NOTIFICATIONSExchange Control Information. Exchange control reporting is required for cash transactions exceeding $10,000 and internationalfund transfers. The Australian bank assisting with the transaction will file the report. If there is no Australian bank involved in thetransfer, Grantee will be required to file the report.BELGIUMNOTIFICATIONSTax Reporting Information. Grantee is required to report any bank accounts opened and maintained outside of Belgium on his or herannual Belgian tax return.BRAZILTERMS AND CONDITIONSCompliance with Law. By accepting the RSUs, the Grantee acknowledges that he or she agrees to comply with applicable Brazilianlaws and pay any and all applicable taxes associated with the vesting of the RSUs, the receipt of any dividends, and the sale of sharesof Common Stock acquired under the Plan.NOTIFICATIONSExchange Control Information. If the Grantee is resident or domiciled in Brazil, he or she will be required to submit annually adeclaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights isequal to or greater than US $100,000. Assets and rights that must be reported include shares of Common Stock.CHINATERMS AND CONDITIONSSettlement of RSUs. Notwithstanding anything to the contrary in the Agreement, due to local regulatory requirements, upon thevesting of the RSUs, the Grantee will receive a cash payment in China via the Company’s local Chinese payroll in an amount equal tothe value of the shares of Common Stock underlying the vested RSUs on a vesting date. As long as the Grantee resides in China, he orshe may not receive or hold shares of Common Stock in connection with the RSUs under the Plan. Accordingly, any provisions in theAgreement referring to issuance of shares of Common Stock shall not be applicable to the Grantee as long as he or she resides inChina.FRANCETERMS AND CONDITIONSConsent to Receive Information in English. By accepting the grant of the RSUs, the Grantee confirms having read and understoodthe Plan and the Agreement, which were provided in the English language. The Grantee accepts the terms of those documentsaccordingly.En acceptant cette attribution gratuite d’actions, le Grantee confirme avoir lu et compris le Plan et ce Contrat, incluant tous leurstermes et conditions, qui ont été transmis en langue anglaise. Le Grantee accepte les dispositions de ces documents en connaissancede cause.NOTIFICATIONSTax Notification. The RSUs are not intended to be French tax-qualified. Please be aware that the Company intends that anyoutstanding RSUs granted to you pursuant to the 1995 Executive Incentive Compensation Plan Sub-plan for Restricted Stock UnitsGranted to Participants in France will continue to Exhibit 10(ii)meet the requirements for qualified status under French law; therefore, different terms and conditions will apply to such outstandingRSUs. Please refer to the Restricted Stock Unit Agreement for Employees in France applicable to your grant for further details.Exchange Control Notification. The Grantee may hold shares of Common Stock acquired under the Plan outside of France providedthat he or she declares all foreign accounts (including any accounts that were opened or closed during the tax year) on his or her annualFrench income tax return.INDIATERMS AND CONDITIONSThe Grantee hereby agrees that it shall hold the shares of the Common Stock pursuant to this Agreement and the Plan, at all times inaccordance with the applicable laws in India, including but not limited to the (Indian) Foreign Exchange Management (Transfer orIssue of Any Foreign Security) Regulations, 2004 (and as amended or replaced), relevant master circulars, directions, notificationsissued in this regard by the Reserve Bank of India from time to time and shall carry out the necessary reporting with the Reserve Bankof India at all stages of granting and vesting, if and as may be required. The Grantee agrees to indemnify the Company and/orSubsidiary of the Company with respect to any non-compliance and/or non-adherence by the Grantee of any of the applicable laws inIndia arising out of holding of the shares of the Common Stock by the Grantee. The Grantee shall declare the holding of shares of the Common Stock, if and as may be necessary, in its income for taxation purposesand agrees to indemnify the Company and/or Subsidiary of the Company with respect to any and all taxes that it shall be obligated topay with respect to the shares of the Common Stock such as including but not limited to income tax, capital gain taxes etc., under thisAgreement and which may arise as a result of the sale of the shares of the Common Stock and the transactions contemplatedhereunder. LUXEMBOURGNOTIFICATIONSExchange Control Information. Grantee understands that Grantee is required to report any inward remittances of funds to theBanque Centrale de Luxembourg and/or the Service Central de la Statistique et des Études Économiques within 15 working daysfollowing the month during which the transaction occurred unless such payment is reported by a Luxembourg-resident financialinstitution.THE NETHERLANDSTERMS AND CONDITIONSNon-Competition Agreement. The non-competition agreement entered into between the Company and the Grantee shall be inaddition to any non-compete arrangements between the Grantee and his or her employer.SWITZERLANDTERMS AND CONDITIONSVesting: With the acceptance of a Grant, the Grantee expressly acknowledges that any RSU, PSU and/or SAR shall not give theGrantee any right or entitlement until such Grant is fully vested. The Grant remains fully discretionary until full vesting. Exhibit 10(ii)Continuous Employment: In Switzerland, “continuously employed” (or substantially similar term) means the absence of anyinterruption or termination (issuance of termination notice) of the Grantee’s employment with the Company or with a Subsidiary of theCompany. Continuous employment shall not be considered interrupted or terminated in the case of sick leave, military leave or anyother leave of absence approved by the Company for which compensation needs to be paid by the Company or salary replacementbenefits are granted by any insurance or in the case of transfers between locations of the Company and its Subsidiaries. For theavoidance of any doubt, continuous employment ends in any case with the end of the employment, even if any salary replacementbenefits continue to be paid by any insurance, pension scheme or social security.Retirement: For the purpose of the Plan, only a retirement under the rules and conditions of the Swiss pension scheme of theSubsidiary employing the Grantee shall qualify as retirement for the purpose of vesting of RSU, PSU or termination of SAR, and onlyif such retirements is (A) at age 62 or older while employed by the Company or any of its Subsidiaries; or (B) at or after such time asthe Grantee’s age (minimum of age 55), plus full years of continuous employment by the Company or any of its Subsidiaries, equals75.Disability: For purposes of the Plan, the Grantee shall be considered “Disabled” if the Grantee is unable to engage in any substantialgainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death orqualifies as permanent full disability under the applicable Swiss social security and/or pension laws.Non-Competition Agreement: For the avoidance of any doubt, any non-competition agreement entered into between the Grantee andthe Company in connection with the Plan and grants thereunder shall be in addition to any non-competition agreement agreed betweenthe Grantee and the employing Subsidiary and shall not replace such non-competition agreement.NOTIFICATIONSExchange Control Notification. The Grantee may hold shares of Common Stock acquired under the Plan outside of Switzerlandprovided that he or she declares all foreign accounts (including any accounts that were opened or closed during the tax year) on his orher annual Swiss tax declaration.UNITED ARAB EMIRATESNOTIFICATIONSSecurities Law Notice. RSUs under the Plan are granted only to select executive officers and other employees of the Company and itssubsidiaries for the purpose of providing such eligible persons with incentives and rewards for performance. The Agreement, includingthis Exhibit, the Plan and any documents the Grantee may receive in connection with the RSUs are intended for distribution to sucheligible persons and must not be delivered to, or relied on, by any other person.The Emirates Securities and Commodities Authority, the Central Bank, the Ministry of Economy and the Dubai Department ofEconomic Development do not have any responsibility for reviewing or verifying any documents in connection with the Plan nor havethey reviewed or approved the Plan or the Agreement. The securities to which this statement relates may be illiquid and/or subject torestrictions on their resale. The Grantee and/or prospective purchasers of the securities offered should conduct their own due diligenceon the securities. Exhibit 10(ii)If the Grantee does not understand the contents of the Agreement, including this Exhibit, or the Plan, the Grantee should consult anauthorized financial adviser.UNITED KINGDOMTERMS AND CONDITIONSU.K. Sub-Plan. The terms of the U.K. Sub-plan apply to the RSUs. Exhibit 10(jj)HARSCO CORPORATIONSTOCK APPRECIATION RIGHTS AGREEMENT(FORM)This STOCK APPRECIATION RIGHTS AGREEMENT (this “Agreement”) is made as of _________ ___, 20__, by andbetween Harsco Corporation, a Delaware corporation and _________________ (the “Grantee”).1.Certain Definitions. Capitalized terms used, but not otherwise defined, in this Agreement will have the meaningsgiven to such terms in the Company’s 2013 Equity and Incentive Compensation Plan (the “Plan”). In addition, for purposes of thisAgreement, “Base Price” means $__________, which was the Market Value per Share of the Common Stock on _________ ___,20__ (the “Date of Grant”).2.Grant of SARs. Subject to and upon the terms, conditions and restrictions set forth in this Agreement, including,without limitation, Exhibit A attached hereto (the “Non-Competition Agreement”), and any additional terms and conditions for theGrantee's country (Grantees outside the United States only) set forth in the attached Exhibit B which forms part of this Agreement,and in the Plan the Company has granted to the Grantee, as of the Date of Grant, __________ Free-Standing Appreciation Rights(“SARs”). The SARs represent the right of the Grantee to receive shares of Common Stock in an amount equal to 100% of the Spreadon the date on which the SARs are exercised. Notwithstanding anything in this Section 2 or otherwise in this Agreement to thecontrary, the Grantee acknowledges and agrees to be bound by the restrictive covenant terms, conditions and provisions in the Non-Competition Agreement as a “Grantee” as referred to therein.3.Vesting of SARs.(a)Subject to the terms and conditions of this Agreement and the Plan, the SARs covered by this Agreementshall become exercisable as described in this Section. One-third of the SARs shall become exercisable on the first anniversary ofthe Date of Grant if the Grantee remains in the continuous employ of the Company or one of its Subsidiaries from the Date ofGrant through such first anniversary. An additional one-third of the SARs shall become exercisable on each subsequentanniversary of the Date of Grant, through the third anniversary of the Date of Grant, when 100% of the SARs shall have becomeexercisable, if the Grantee remains in the continuous employ of the Company or one of its Subsidiaries from the Date of Grantthrough each such anniversary. For purposes of this Agreement, “continuous employ” (or substantially similar term) means theabsence of any interruption or termination of the Grantee’s employment with the Company or with a Subsidiary of the Company.Continuous employment shall not be considered interrupted or terminated in the case of sick leave, military leave or any other leaveof absence approved by the Company or in the case of transfers between locations of the Company and its Subsidiaries.(b)Notwithstanding Section 3(a) above, the SARs granted hereby shall become immediately exercisable in fullif at any time during the continuous employment of the Grantee with the Company or a Subsidiary of the Company and prior to thetermination of the SARs any of the following events occur:(i)the Grantee’s death or becoming Disabled while the Grantee is continuously employed by the Companyor any of its Subsidiaries; or Exhibit 10(jj)(ii)the Grantee’s retirement (A) at age 62 or older while continuously employed by the Company or any ofits Subsidiaries; or (B) at or after such time as the Grantee’s age (minimum of age 55), plus full years ofcontinuous employment by the Company or any of its Subsidiaries, equals 75.(c)For purposes of this Section 3, the Grantee shall be considered “Disabled” if the Grantee is: (i) unable toengage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can beexpected to result in death or can be expected to last for a continuous period of not less than twelve months, or (ii) by reason of anymedically determinable physical or mental impairment which can be expected to result in death or can be expected to last for acontinuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three monthsunder an accident and health plan covering employees of the Company.(d)(i)Notwithstanding Section 3(a) above, if at any time before the third anniversary of the Date of Grant orthe termination of the SARs, and while the Grantee is continuously employed by the Company or a Subsidiary, aChange in Control occurs, then the SARs will become fully exercisable, except to the extent that a Replacement Awardis provided to the Grantee in accordance with Section 3(d)(ii) to continue, replace or assume the SARs covered by thisAgreement (the “Replaced Award”).(ii)For purposes of this Agreement, a “Replacement Award” means an award (A) of the same type (e.g.,time-based stock appreciation rights) as the Replaced Award, (B) that has a value at least equal to the value of theReplaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change inControl or another entity that is affiliated with the Company or its successor following the Change in Control or ispayable solely in cash, (D) if the Grantee holding the Replaced Award is subject to U.S. federal income tax under theCode, the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than thetax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to theGrantee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisionsthat would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to theextent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt fromSection 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the formof a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. Thedetermination of whether the conditions of this Section 3(d)(ii) are satisfied will be made by the Committee, asconstituted immediately before the Change in Control, in its sole discretion.(iii)If, upon receiving a Replacement Award, the Grantee’s employment with the Company or aSubsidiary (or any of their successors) (as applicable, the “Successor”) is subsequently terminated by the Grantee forGood Reason or by the Successor without Cause within a period of two years after the Change in Control, 100% of theReplacement Award will become exercisable with respect to the time-based stock appreciation rights covered by suchReplacement Award.(iv)A termination by the Grantee for “Good Reason” means Grantee’s termination of his or heremployment with the Successor as a result of the occurrence of any of the following: (A) a change in the Grantee’sprincipal location of employment that is greater than 50 miles from such location as of the date of this Agreementwithout the Exhibit 10(jj)Grantee’s consent; provided, however, that the Grantee hereby acknowledges that the Grantee may be required toengage in travel in connection with the performance of the Grantee’s duties and that such travel shall not constitute achange in the Grantee’s principal location of employment for purposes hereof; (B) a material diminution in theGrantee’s base compensation; (C) a change in the Grantee’s position with the Successor without the Grantee’s consentsuch that there is a material diminution in the Grantee’s authority, duties or responsibilities; or (D) any other action orinaction that constitutes a material breach by the Successor of the agreement, if any, under which the Grantee providesservices to the Successor or its subsidiaries. Notwithstanding the foregoing, the Grantee’s termination of the Grantee’semployment with the Successor as a result of the occurrence of any of the foregoing shall not constitute a terminationfor “Good Reason” unless (X) the Grantee gives the Successor written notice of such occurrence within 90 days ofsuch occurrence and such occurrence is not cured by the Successor within 30 days of the date on which such writtennotice is received by the Successor and (Y) the Grantee actually terminates his or her employment with the Successorprior to the 365th day following such occurrence.(v)A termination by the Successor without “Cause” means the Successor’s termination of the Grantee’semployment with the Successor under circumstances that do not involve or relate to the occurrence of any of thefollowing: (A) an act or acts of personal dishonesty taken by the Grantee and intended to result in substantial personalenrichment of the Grantee at the expense of the Company; (B) repeated failure by the Grantee to devote reasonableattention and time during normal business hours to the business and affairs of the Company or to use the Grantee’sreasonable best efforts to perform faithfully and efficiently the responsibilities assigned to the Grantee (provided thatsuch failure is demonstrated to be willful and deliberate on the Grantee’s part and is not remedied in a reasonable periodof time after receipt of written notice from the Company); or (C) the conviction of the Grantee of a felony.4.Exercise of SARs.(a)To the extent exercisable as provided in Section 3 of this Agreement, the SARs may be exercised in whole orin part by delivery to the Company of a notice in form and substance satisfactory to the Company specifying the number of SARs tobe exercised and the date of exercise.(b)Upon exercise, the Company will issue to the Grantee, with respect to the number of SARs that are exercised,the number of shares of Common Stock that equals the Market Value per Share of Common Stock on the date of exercise dividedinto the Spread, rounded down to the nearest whole share.5.Termination of SARs. Both exercisable and nonexercisable SARs shall terminate, as provided below, after the endof the earliest to occur of the following periods:(a)90 days after the Grantee ceases to be an employee of the Company or a Subsidiary, unless the Granteeceases to be such employee in a manner described in clause (b), (c), (d) or (e) of this Section;(b)One year after the Grantee’s becoming Disabled, if the Grantee becomes Disabled while continuouslyemployed by the Company or a Subsidiary;(c)One year after the death of the Grantee, if the Grantee dies while continuously employed by the Company ora Subsidiary or within the period specified in clause (b) above or clause (d) below if applicable to the Grantee; Exhibit 10(jj)(d)One year after the Grantee retires from continuous employment with the Company or a Subsidiary if (i) theGrantee is at the time of such retirement at least age 62, or (ii) when the Grantee retires, the Grantee’s age, plus full years ofcontinuous employment by the Company or any of its Subsidiaries, equals 75;(e)One year after the Grantee ceases to be an employee of the Successor under the conditions specified inSection 3(d) of this Agreement; and(f)Ten years from the Date of Grant.6.Transferability. Subject to Section 15 of the Plan, no SAR or any interest therein shall be transferable prior toexercise pursuant to Section 4 hereof other than by will or pursuant to the laws of descent and distribution and may be exercisedduring the Grantee’s lifetime only by the Grantee or, in the event of the Grantee’s legal incapacity to do so, by the Grantee’s guardianor legal representative acting on behalf of the Grantee in a fiduciary capacity under state law or court supervision.7.Compliance with Law. The SARs shall not be exercisable if such exercise would involve a violation of anyapplicable federal or state securities law, and the Company hereby agrees to make reasonable efforts to comply with any applicablefederal and state securities laws.8.Adjustments. The SARs are subject to mandatory adjustment under the terms of Section 11 of the Plan.9.Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes inconnection with the delivery to the Grantee of Common Stock or any other payment to the Grantee or any other payment or vestingevent under this Agreement, the Grantee hereby authorizes withholding from payroll and any other amounts payable to the Grantee,including amounts payable hereunder, and otherwise agrees to make adequate provision for, any sums required to satisfy such taxwithholding obligations of the Company. The Company shall have no obligation to make delivery or payment hereunder until the taxwithholding obligations of the Company have been satisfied by the Grantee. If all or any part of such withholding requirement besatisfied by retention by the Company of a portion of the Common Stock to be delivered to the Grantee or by delivering to theCompany other shares of Common Stock held by the Grantee, the shares so retained shall be credited against such withholdingrequirement at the Market Value per Share of such Common Stock on the date of such delivery. In no event will the market value ofthe Common Stock to be withheld and/or delivered pursuant to this Section 9 to satisfy applicable withholding taxes exceed theminimum amount of taxes required to be withheld, unless otherwise agreed to by the Grantee, provided, however, that such amountshall not exceed the statutory maximum withholding rates.10.No Employment Rights. The grant of the SARs under this Agreement to the Grantee is a voluntary, discretionaryaward being made on a one-time basis and it does not constitute a commitment to make any future awards. The grant of the SARs andany payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similarallowance, except as otherwise required by law. Nothing in this Agreement will give the Grantee any right to continue employmentwith the Company or any Subsidiary, as the case may be, or interfere in any way with the right of the Company or a Subsidiary toterminate the employment of the Grantee at any time.11.Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement or the Plan shallnot be taken into account in determining any benefits to which the Grantee Exhibit 10(jj)may be entitled under any profit‑sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiaryand shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan coveringemployees of the Company or a Subsidiary.12.Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent thatthe amendment is applicable hereto; provided, however, that (a) no amendment shall adversely affect the rights of the Grantee underthis Agreement without the Grantee’s written consent, and (b) the Grantee’s consent shall not be required to an amendment that isdeemed necessary by the Company to ensure compliance with Section 409A of the Code.13.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason bya court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, andthe remaining provisions hereof shall continue to be valid and fully enforceable.14.Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of anyinconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to thePlan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determineany questions which arise in connection with this Agreement. In addition, the SARs shall be subject to the terms and conditions of theCompany’s clawback policy in effect on the Date of Grant as if such SARs were “Incentive-Based Compensation” (as such term isdefined in such clawback policy).15.Successors and Assigns. Without limiting Section 6 hereof, the provisions of this Agreement shall inure to thebenefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and thesuccessors and assigns of the Company.16.Acknowledgement. The Grantee acknowledges that the Grantee (a) has received a copy of the Plan, (b) has had anopportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and thePlan and (d) agrees to such terms and conditions.17.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to bean original but all of which together will constitute one and the same Agreement.[signature page follows] Exhibit 10(jj)IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officerand the Grantee has executed this Agreement, effective as of the day and year first above written. HARSCO CORPORATION By:/s/ F. Nicholas Grasberger IIIName:F. Nicholas Grasberger IIITitle:President and CEOThe undersigned hereby acknowledges receipt of an executed version of this Agreement and accepts the award of SARsgranted hereunder on the terms and conditions set forth herein and in the Plan (including the terms of the Non-Competition Agreement,attached hereto as Exhibit A). GRANTEE By:______________Name: Exhibit 10(jj)EXHIBIT ANon-Competition Agreement1.Grant. Grantee acknowledges that Grantee has access to the confidential and proprietary trade secret information of HarscoCorporation, including its subsidiaries, joint ventures, and operating divisions (the “Company”), as further described below(“Confidential/Proprietary Trade Secret Information”). Further, Grantee acknowledges that Grantee derives significant value fromthe Company and from the Confidential/Proprietary Trade Secret Information provided during the term of employment with theCompany, which enables Grantee to optimize the performance of the Company’s performance and Grantee’s own personal,professional, and financial benefit. In consideration of the grant described in the award agreement (the “Agreement”) to which theseterms, conditions and provisions (the “Non-Competition Agreement”) are attached as an exhibit, Grantee agrees that, duringGrantee's employment by the Company, and for a period of twelve (12) months after the cessation of such employment for anyreason (both such periods collectively referred to as the “Restricted Period”), Grantee will not, directly or indirectly, engage in anyof the following competitive activities:(a)For Grantee or on behalf of any other corporation, business, partnership, individual, or other entity, directly or indirectly solicit,divert, contract with, or attempt to solicit, divert, or contract with, any customer with whom Grantee had Material Contact duringthe final two (2) years of Grantee’s employment with the Company concerning any products or services that are similar to thosethat Grantee was responsible for or were otherwise involved with during Grantee’s employment with the Company. Forpurposes of this Non-Competition Agreement, the Grantee will have had “Material Contact” with a customer if: (i) Grantee hadbusiness dealings with the customer on the Company’s behalf; (ii) Grantee was responsible for supervising or coordinating thedealings between the Company and the customer; or (iii) Grantee obtained Confidential/Proprietary Trade Secret Informationabout the customer as a result of Grantee’s association with the Company;(b)Within the geographic territory where Grantee was employed by the Company, obtained knowledge of Confidential/ProprietaryTrade Secret Information, or had contact with the Company's customers, become employed by or otherwise render services to(as a director, employee, contractor or consultant) or have any ownership interest in any business which is engaged in offeringthe same or similar products or services as, or otherwise competes with those Company, including its subsidiaries and operatingunit(s) with which Grantee was employed or in any way involved during the last twelve (12) months of employment with theCompany; or(c)(i) induce, offer, assist, encourage or suggest that another business or enterprise offer employment to or enter into a consultingarrangement with any employee, agent or representative of the Company or (ii) induce, offer, assist, encourage or suggest thatany employee, agent or representative of the Company, including its subsidiaries and joint ventures, terminate his or heremployment or business affiliation with the Company or accept employment with any other business or enterprise.(d)Confidential/Proprietary Trade Secret Information.(i)Grantee agrees to keep secret and confidential all Confidential/Proprietary Trade Secret Information (further describedbelow) acquired by Grantee while employed by the Company or concerning the business and affairs of the Company, itsvendors, its customers, and its affiliates (whether of a business, commercial or technological nature), and further agrees thatGrantee will not disclose any such Confidential/Proprietary Trade Secret Information so acquired to any individual, partner,company, firm, corporation or other person or use the same in any manner other than in connection with the business andaffairs of the Company and its affiliates. Except in the performance of services for the Company, the Grantee will not, forso long as the Confidential/Proprietary Trade Secret Information remains so designated under applicable law, use, disclose,reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or transfer the Confidential/Proprietary TradeSecret Information or any portion thereof. Exhibit 10(jj)(ii)For purposes of this Non-Competition Agreement, “Confidential/Proprietary Trade Secret Information” includes allinformation of a confidential or proprietary nature that relates to the business, products, services, research or developmentof the Company, and its affiliates or their respective suppliers, distributors, customers, independent contractors or otherbusiness relations. Confidential/Proprietary Trade Secret Information also includes, but is not limited to, the following: (A)internal business information (including information relating to strategic and staffing plans and practices, business, training,financial, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and businessmethods and customer and supplier lists); (B) identities of, individual requirements of, specific contractual arrangementswith and information about, the Company’s suppliers, distributors, customers, independent contractors or other businessrelations and their confidential information; (C) trade secrets, copyrightable works and other confidential information(including ideas, formulas, recipes, compositions, inventions, innovations, improvements, developments, methods, know-how, manufacturing and production processes and techniques, research and development information, compilations of dataand analyses, data and databases relating thereto, techniques, systems, records, manuals, documentation, models, drawings,specifications, designs, plans, proposals, reports and all similar or related information whether patentable or unpatentableand whether or not reduced to practice); (D) other intellectual property rights of the Company, or any of its affiliates; and(E) any other information that would constitute a trade secret under the Pennsylvania Uniform Trade Secrets Act, asamended from time to time (or any successor). The term “Confidential/Proprietary Trade Secret Information” also includesany information or data described above which the Company obtains from another party and which the Company treats asproprietary or designates as trade secrets, whether or not owned or developed by the Company.(iii)All documents and materials supplied to Grantee or developed by Grantee in the course of, or as a result of Grantee’semployment at the Company whether in hard copy, electronic format or otherwise shall be the sole property of theCompany. Grantee will at any time upon the request of the Company and in any event promptly upon termination ofGrantee’s employment or relationship with the Company, but in any event no later than five (5) business days after suchtermination, deliver all such materials to the Company and will not retain any originals or copies of such materials, whetherin hard copy form or as computerized and/or electronic records. Except to the extent approved by the Company or requiredby Grantee’s bona fide job duties for the Company, the Grantee also agrees that Grantee will not copy or remove from theCompany’s place of business or the place of business of a customer of the Company, property or information belonging tothe Company or the customer or entrusted to the Company or the customer. In addition, the Grantee agrees that Granteewill not provide any such materials to any competitor of or entity seeking to compete with the Company unless specificallyapproved in writing by the Company. Notwithstanding anything in paragraph 1(d)(3) of this Non-Competition Agreementto the contrary, if the Company needs to take legal action to secure such return delivery of such materials, Grantee shall beresponsible for all legal fees, costs and expenses incurred by the Company in doing so.2.Subsequent Employment.(a)Advise the Company of New Employment. In the event of a cessation of Grantee’s employment with the Company, and duringthe Restricted Period described in paragraph 1 above, Grantee agrees to disclose to the Company, the name and address of anynew employer or business affiliation within ten (10) calendar days of Grantee’s accepting such position. In the event thatGrantee fails to notify the Company of such new employment or business affiliation as required above, the Restricted Periodwill be extended by a period equal to the period of nondisclosure. (b)Grantee’s Ability to Earn Livelihood. Grantee acknowledges that, in the event of a cessation of Grantee’s employment with theCompany, for any reason and at any time, the provisions of paragraph 1 of this Non-Competition Agreement will notunreasonably restrict Grantee’s ability to earn a living. Grantee and the Company acknowledge that Grantee’s rights have beenlimited by this Non-Competition Agreement only to Exhibit 10(jj)the extent reasonably necessary to protect the legitimate interests of the Company in its Confidential/Proprietary Trade SecretInformation.3.Enforcement. Grantee agrees that if Grantee violates the covenants and agreements set forth in this Non-Competition Agreement,the Company would suffer irreparable harm, and that such harm to the Company may be impossible to measure in monetarydamages. Accordingly, in addition to any other remedies which the Company may have at law or in equity, the Company will havethe right to have all obligations, undertakings, agreements, covenants and other provisions of this Non-Competition Agreementspecifically performed by Grantee, and the Company will have the right to obtain preliminary and permanent injunctive relief tosecure specific performance, and to prevent a breach or contemplated breach, of this Non-Competition Agreement. In such event,the Company will be entitled to an accounting and repayment of all profits, compensation, remunerations or benefits which Granteeor others, directly or indirectly, have realized or may realize as a result of, growing out of, or in conjunction with any violation ofthis Non-Competition Agreement. Such remedies will be an addition to and not in limitation of any injunctive relief or other rightsor remedies to which the Company is or may be entitled at law or in equity. In the event that the Company obtains any requestedrelief in any action brought to enforce the terms of this Non-Competition Agreement through court proceedings, the Company willbe entitled to reimbursement for all legal fees, costs and expenses incident to enforcement.4.Severability. If any section, paragraph, term or provision of this Non-Competition Agreement, or the application thereof, isdetermined by a competent court or tribunal to be invalid or unenforceable, then the other parts of such section, paragraph, term orprovision will not be affected thereby and will be given full force and effect without regard to the invalid or unenforceable portions,and the section, paragraph, term or provision of this Non-Competition Agreement will be deemed modified to the extent necessaryto render it valid and enforceable.5.Miscellaneous.(a)Employment.(i)This Non-Competition Agreement does not constitute a guarantee of employment and termination of employment will notaffect the enforceability of this Non-Competition Agreement.(ii)Grantee agrees that if Grantee is transferred from the entity or division which was Grantee’s employer at the time Granteesigned this Non-Competition Agreement to employment by another division or another company that is a subsidiary oraffiliate of Harsco Corporation, and Grantee has not entered into a superseding agreement with the new employer coveringthe subject matter of this Non-Competition Agreement, then this Non-Competition Agreement will continue in effect andthe Grantee’s new employer will be termed “the Company” for all purposes hereunder and will have the right to enforcethis Non-Competition Agreement as Grantee’s employer. In the event of any subsequent transfer, Grantee’s new employerwill succeed to all rights under this Non-Competition Agreement so long as such employer will be Harsco Corporation orone of its subsidiaries or affiliates and so long as this Non-Competition Agreement has not been superseded.(b)Headings. The headings contained in this Non-Competition Agreement are inserted for convenience of reference only, and willnot be deemed to be a part of this Non-Competition Agreement for any purposes, and will not in any way define or affect themeaning, construction or scope of any of the provisions of this Non-Competition Agreement.(c)Governing Law. This Non-Competition Agreement will be construed under the laws of the Commonwealth of Pennsylvania,without regard to its conflict of law provisions, and the parties consent and agree that the federal and state courts of theCommonwealth of Pennsylvania will have exclusive jurisdiction over any dispute relating to this Non-Competition Agreement.(d)Supplemental Nature of this Non-Competition Agreement. The restrictions set forth in paragraph 1 of this Non-CompetitionAgreement will be in addition to any other such restrictive covenants agreed to through Exhibit 10(jj)separate Non-Competition Agreements, if any, between Grantee and the Company and will survive the vesting or exercise ofthe equity award evidenced by the Agreement.(e)Waiver. The failure by the Company to enforce any right or remedy available to it under this Non-Competition Agreement willnot be construed to be a waiver of such right or remedy with respect to any other prior, concurrent or subsequent breach orfailure. No waiver of rights under this Non-Competition Agreement will be effective unless made in writing with specificreference to this Non-Competition Agreement.(f)Notification. Grantee agreed that the Company may notify any third party about Grantee’s obligations under this Non-Competition Agreement until such time as Grantee has performed all of Grantee’s obligations hereunder. Upon the Company’srequest, Grantee agrees to provide the Company with information, including, but not limited to, supplying details of Grantee’ssubsequent employment, sufficient to verify that Grantee has not breached, or is not breaching, any covenant in this Non-Competition Agreement.(g)Acknowledgments.(i)Grantee acknowledges and agrees that this Non-Competition Agreement is in consideration of, (A) the grant evidenced bythe Agreement, (B) access to Confidential/Proprietary Trade Secret Information, as required by Grantee's job duties, and (C)access to important customer relationships and the associated customer goodwill of the Company.(ii)Grantee acknowledges that he or she has carefully read and considered the provisions of this Non-Competition Agreement,and that this Non-Competition Agreement is reasonable as to time and scope and activities prohibited, given the Company’sneed to protect its interests and given the consideration provided to Grantee in the form of the grant evidenced by theAgreement.(iii)Grantee acknowledges that he or she has had an opportunity to consult with an independent legal counsel of Grantee’schoosing, and accept the grant contained in the Agreement and continuing employment on the terms set forth in this Non-Competition Agreement. Exhibit 10(jj)EXHIBIT BAdditional Terms and Conditions for International EmployeesTERMS AND CONDITIONSThis Exhibit B (this “Exhibit”), which is part of the Agreement, contains additional terms and conditions that govern the SARs grantedto the Grantee under the Plan if he or she resides outside the United States. The terms and conditions in Part A apply to all Granteesoutside the United States. The country-specific terms and conditions and/or notifications in Part B will also apply to the Grantee if heor she resides in one of the countries listed below. Unless otherwise defined, capitalized terms used but not defined in this Exhibit havethe meanings set forth in the Plan and/or the Agreement.NOTIFICATIONSThis Exhibit also includes information regarding exchange controls and certain other issues of which the Grantee should be aware withrespect to participation in the Plan. The information is based on the exchange control, securities and other laws in effect in therespective countries as of April 2016. Such laws are often complex and change frequently. As a result, the Company stronglyrecommends that the Grantee not rely on the information in this Exhibit as the only source of information relating to the consequencesof his or her participation in the Plan because the information may be out of date at the time that the Grantee exercises the SARs or sellshares of Common Stock acquired under the Plan.In addition, the information contained herein is general in nature and may not apply to the Grantee’s particular situation, and theCompany is not in a position to assure the Grantee of a particular result. Accordingly, the Grantee is advised to seek appropriateprofessional advice as to how the relevant laws in his or her country may apply to the Grantee’s situation.Finally, if the Grantee is a citizen or resident, or is considered a resident, of a country other than the one in which he or she is currentlyworking, or transferred employment after the SARs were granted to him or her, the information contained herein may not beapplicable. In addition, the Company shall, in its sole discretion, determine to what extent the additional terms and conditions includedherein will apply to you under these circumstances.A. ALL NON-U.S. COUNTRIES ADDITIONAL TERMS AND CONDITIONSThe following additional terms and conditions will apply to the Grantee if he or she resides in any country outside the United States.Responsibility for Taxes. The following section replaces Section 9 of the Agreement in its entirety:The Grantee acknowledges that, regardless of any action taken by the Company or, if different, the Grantee’s employer (the“Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Grantee’s participation in the Plan and legally applicable to the Grantee (“Tax-Related Items”) is andremains the Grantee’s responsibility and may exceed the amount actually withheld by the Company or the Employer. The Granteefurther acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment ofany Tax-Related Items in connection with any aspect of the SARs, including, but not limited to, the grant, vesting or exercise of theSARs, the subsequent sale of shares of Common Stock acquired pursuant to such exercise and the receipt of any dividends; and (ii) donot Exhibit 10(jj)commit to and are under no obligation to structure the terms of the grant or any aspect of the SARs to reduce or eliminate the Grantee’sliability for Tax-Related Items or achieve any particular tax result. Further, if the Grantee is subject to Tax-Related Items in more thanone jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable, the Granteeacknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account forTax-Related Items in more than one jurisdiction.Prior to the relevant taxable or tax withholding event, as applicable, the Grantee agrees to make adequate arrangements satisfactory tothe Company and/or the Employer to satisfy all Tax-Related Items. In this regard, the Grantee authorizes the Company and/or theEmployer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by any one or acombination of the following methods: (i) requiring payment by the Grantee to the Company, on demand, by cash, check or othermethod of payment as may be determined acceptable by the Company; or (ii) withholding from the Grantee’s wages or other cashcompensation paid to the Grantee by the Company and/or the Employer; or (iii) withholding from proceeds of the sale of shares ofCommon Stock acquired at exercise of the SARs either through a voluntary sale or through a mandatory sale arranged by theCompany (on the Grantee’s behalf pursuant to this authorization) without further consent; or (ii) withholding shares of Common Stockissuable at exercise of the SARs.Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicableminimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case theGrantee will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. Ifthe obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, the Grantee is deemed tohave been issued the full number of shares of Common Stock subject to the exercised SARs, notwithstanding that a number of theshares of Common Stock are held back solely for the purpose of paying the Tax-Related Items.Finally, the Grantee agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or theEmployer may be required to withhold or account for as a result of the Grantee’s participation in the Plan that cannot be satisfied by themeans previously described. The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of CommonStock, if the Grantee fails to comply with his or her obligations in connection with the Tax-Related Items.Nature of Grant. In accepting the SARs, the Grantee acknowledges, understands and agrees that: (1) the Plan is establishedvoluntarily by the Company, it is discretionary in nature, and may be amended, suspended or terminated by the Company at any time,to the extent permitted by the Plan; (2) all decisions with respect to future SARs or other grants, if any, will be at the sole discretion ofthe Company; (3) the Grantee is voluntarily participating in the Plan; (4) the SARs and any shares of Common Stock acquired underthe Plan are not intended to replace any pension rights or compensation; (5) the future value of the shares of Common Stockunderlying the SARs is unknown, indeterminable and cannot be predicted with certainty; (6) if the underlying shares of CommonStock do not increase in value, the SARs will have no value; (7) if the Grantee exercises the SARs and acquires shares of CommonStock, the value of such shares of Common Stock may increase or decrease in value, even below the Base Price; (8) no claim orentitlement to compensation or damages shall arise from forfeiture of the SARs resulting from the termination of the Grantee’semployment or other service relationship (for any reason whatsoever, whether or not later found to be invalid or in breach ofemployment laws in the jurisdiction where the Grantee is employed or providing services or the terms of the Grantee’s employment orservice agreement, if any), and in consideration of the grant of the SARs to which the Grantee is otherwise not entitled, the Granteeirrevocably agrees never to institute any claim against the Company, any of its Exhibit 10(jj)subsidiaries or affiliates or the Employer, waives his or her ability, if any, to bring any such claim, and releases the Company, itssubsidiaries and affiliates and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by acourt of competent jurisdiction, then, by participating in the Plan, the Grantee shall be deemed irrevocably to have agreed not to pursuesuch claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim; (9) for purposes ofthe SARs, the Grantee’s employment or service relationship will be considered terminated as of the date the Grantee is no longeractively providing services to the Company or one of its subsidiaries and affiliates (regardless of the reason for such termination andwhether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Grantee is employed orproviding services or the terms of the Grantee’s employment or service agreement, if any), and unless otherwise expressly provided inthe Agreement or determined by the Company, (i) the Grantee’s right to vest in the SARs under the Plan, if any, will terminate as ofsuch date and will not be extended by any notice period (e.g., the Grantee’s period of service would not include any contractual noticeperiod or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where the Grantee isemployed or providing services or the terms of the Grantee’s employment or service agreement, if any); and (ii) the period (if any)during which the Grantee may exercise the SARs after such termination of the Grantee's employment or service relationship willcommence on the date the Grantee ceases to actively provide services and will not be extended by any notice period mandated underemployment laws in the jurisdiction where the Grantee is employed or providing services or terms of the Grantee’s employment orservice agreement, if any; and (iii) the Company shall have the exclusive discretion to determine when the Grantee is no longeractively providing services for purposes of his or her SARs grant (including whether the Grantee may still be considered tobe providing services while on a leave of absence); (10) unless otherwise provided in the Plan or by the Company in its discretion, theSARs and the benefits evidenced by the Agreement do not create any entitlement to have the SARs or any such benefits transferred to,or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transactionaffecting the shares of the Company; (11) the SARs and any shares of Common Stock acquired under the Plan and the income andvalue of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating anyseverance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension, orretirement or welfare benefits or similar payments; and (12) the Grantee acknowledges and agrees that neither the Company, theEmployer nor any Subsidiary of the Company shall be liable for any foreign exchange rate fluctuation between the Grantee’s localcurrency and the United States Dollar that may affect the value of the SARs or of any amounts due to the Grantee pursuant to theexercise of the SARs or the subsequent sale of any shares of Common Stock acquired upon exercise of the SARs.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making anyrecommendations regarding the Grantee’s participation in the Plan, or the Grantee’s acquisition or sale of the underlying shares ofCommon Stock. The Grantee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding hisor her participation in the Plan before taking any action related to the Plan.Data Privacy. The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or otherform, including email, of the Grantee’s personal data as described in the Agreement and any other SARs grant materials (“Data”)by and among, as applicable, the Employer, the Company and its subsidiaries and affiliates for the exclusive purpose ofimplementing, administering and managing the Grantee’s participation in the Plan.The Grantee understands that the Company and the Employer may hold certain personal information about the Grantee,including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social insurance number orother identification number, salary, nationality, job Exhibit 10(jj)title, any shares of stock or directorships held in the Company, details of all SARs or any other entitlement to shares of stockawarded, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the exclusive purpose of implementing,administering and managing the Plan.The Grantee understands that Data will be transferred to the Company’s stock transfer agent and/or broker, or such other stockplan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation,administration and management of the Plan. The Grantee understands that the recipients of the Data may be located in the UnitedStates or elsewhere (including outside the EEA), and that the recipient’s country (e.g., the United States) may have different dataprivacy laws and protections than the Grantee’s country. The Grantee understands that he or she may request a list with the namesand addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Granteeauthorizes the Company, the Company’s stock transfer agent and /or broker, and any other possible recipients which may assistthe Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retainand transfer the Data, in electronic or other form, for the sole purposes of implementing, administering and managing theGrantee’s participation in the Plan. The Grantee understands that Data will be held only as long as is necessary to implement,administer and manage the Grantee’s participation in the Plan. The Grantee understands that he or she may, at any time, viewData, request additional information about the storage and processing of Data, require any necessary amendments to Data orrefuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resourcesrepresentative. Further, the Grantee understands that he or she is providing the consents herein on a purely voluntary basis. If theGrantee does not consent, or if the Grantee later seeks to revoke his or her consent, his or her employment status or service andcareer with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing the Grantee’sconsent is that the Company would not be able to grant the Grantee SARs or other equity awards or administer or maintain suchawards. Therefore, the Grantee understands that refusing or withdrawing his or her consent may affect the Grantee’s ability toparticipate in the Plan. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent,the Grantee understands that he or she may contact his or her local human resources representative.Governing Law and Venue. The SARs grant and the provisions of the Agreement are governed by, and subject to, the internalsubstantive laws of the State of Delaware in the United States of America (with the exception of its conflict of law provisions).For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or theAgreement, the parties hereby submit to and consent to the exclusive jurisdiction of the Commonwealth of Pennsylvania in the UnitedStates of America and agree that such litigation shall be conducted only in the courts of Cumberland County, the Commonwealth ofPennsylvania, or the federal courts for the United States of America for the Middle District of Pennsylvania, and no other courts, wherethis grant is made and/or to be performed.Compliance with Law. The following provision supplements Section 7 of the Agreement:Notwithstanding any other provision of the Plan or the Agreement, unless there is an available exemption from any registration,qualification or other legal requirement applicable to the shares of Common Stock, the Company shall not be required to deliver anyshares of Common Stock issuable upon exercise of the SARs prior to the completion of any registration or qualification of the sharesunder any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities andExchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearancefrom any local, state, federal or foreign governmental agency, which Exhibit 10(jj)registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. The Granteeunderstands that the Company is under no obligation to register or qualify the shares with the SEC or any state or foreign securitiescommission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, theGrantee agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without the Grantee’s consent tothe extent necessary to comply with securities or other laws applicable to issuance of shares.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to current orfuture participation in the Plan by electronic means, including email. The Grantee hereby consents to receive such documents byelectronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by theCompany or a third party designated by the Company.Language. If the Grantee has received the Agreement or any other document related to the SARs and/or the Plan translated into alanguage other than English and if the meaning of the translated version is different than the English version, the English version willcontrol.Severability. The provisions of the Agreement are severable and if any one or more provisions are determined to be illegal orotherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Grantee’s participation inthe Plan, on the SARs and on any shares of Common Stock purchased upon exercise of the SARs, to the extent the Companydetermines it is necessary or advisable for legal or administrative reasons, and to require the Grantee to sign any additional agreementsor undertakings that may be necessary to accomplish the foregoing.Waiver. The Grantee acknowledges that a waiver by the Company of breach of any provision of the Agreement shall not operate orbe construed as a waiver of any other provision of the Agreement, or of any subsequent breach by the Grantee or any other Participant.B. COUNTRY-SPECIFIC ADDITIONAL TERMS AND CONDITIONS AND NOTIFICATIONSAUSTRALIATERMS AND CONDITIONSSettlement of SARs. Notwithstanding anything to the contrary in the Agreement, due to local regulatory requirements, upon thevesting of the SARs, the Grantee will receive a cash payment in an amount equal to the value of the shares of Common Stockunderlying the vested SARs on a vesting date. As long as the Grantee resides in Australia, he or she may not receive or hold shares ofCommon Stock in connection with the SARs under the Plan. Accordingly, any provisions in the Agreement referring to issuance ofshares of Common Stock shall not be applicable to the Grantee as long as he or she resides in Australia. Exhibit 10(jj)NOTIFICATIONSExchange Control Information. Exchange control reporting is required for cash transactions exceeding $10,000 and internationalfund transfers. The Australian bank assisting with the transaction will file the report. If there is no Australian bank involved in thetransfer, Grantee will be required to file the report.BELGIUMNOTIFICATIONSTax Reporting Information. Grantee is required to report any bank accounts opened and maintained outside of Belgium on his or herannual Belgian tax return.BRAZILTERMS AND CONDITIONSCompliance with Law. By accepting the SARs, the Grantee acknowledges that he or she agrees to comply with applicable Brazilianlaws and pay any and all applicable taxes associated with the exercise of the SARs, the receipt of any dividends, and the sale of sharesof Common Stock acquired under the Plan.NOTIFICATIONSExchange Control Information. If the Grantee is resident or domiciled in Brazil, he or she will be required to submit annually adeclaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights isequal to or greater than US $100,000. Assets and rights that must be reported include shares of Common Stock.CHINATERMS AND CONDITIONSSettlement of SARs. Notwithstanding anything to the contrary in the SARs Agreement, due to local regulatory requirements, upon thevesting of the SARs the Grantee will receive a cash payment in China via the Company local Chinese payroll in an amount equal tothe value of the shares of Common Stock underlying the vested SARs on the vesting date. As long as the Grantee resides in China, heor she may not receive or hold shares of Common Stock in connection with the SARs under the Plan. Accordingly, any provisions inthe Agreement referring to issuance of shares of Common Stock shall not be applicable to the Grantee as long as he or she resides inChina.FRANCETERMS AND CONDITIONSConsent to Receive Information in English. By accepting the grant of the SARs, the Grantee confirms having read and understoodthe Plan and the Agreement, which were provided in the English language. The Grantee accepts the terms of those documentsaccordingly.En acceptant cette attribution gratuite d’actions, le Grantee confirme avoir lu et compris le Plan et ce Contrat, incluant tous leurs termeset conditions, qui ont été transmis en langue anglaise. Le Grantee accepte les dispositions de ces documents en connaissance de cause.NOTIFICATIONSTax Notification. The SARs are not intended to be French tax-qualified.Exchange Control Notification. The Grantee may hold shares of Common Stock acquired under the Plan outside of France providedthat he or she declares all foreign accounts (including any accounts that Exhibit 10(jj)were opened or closed during the tax year) on his or her annual French income tax return.INDIATERMS AND CONDITIONSThe Grantee hereby agrees that it shall hold the shares of the Common Stock pursuant to this Agreement and the Plan, at all times inaccordance with the applicable laws in India, including but not limited to the (Indian) Foreign Exchange Management (Transfer orIssue of Any Foreign Security) Regulations, 2004 (and as amended or replaced), relevant master circulars, directions, notificationsissued in this regard by the Reserve Bank of India from time to time and shall carry out the necessary reporting with the Reserve Bankof India at all stages of granting and vesting, if and as may be required. The Grantee agrees to indemnify the Company and/orSubsidiary of the Company with respect to any non-compliance and/or non-adherence by the Grantee of any of the applicable laws inIndia arising out of holding of the shares of the Common Stock by the Grantee. The Grantee shall declare the holding of shares of the Common Stock, if and as may be necessary, in its income for taxation purposesand agrees to indemnify the Company and/or Subsidiary of the Company with respect to any and all taxes that it shall be obligated topay with respect to the shares of the Common Stock such as including but not limited to income tax, capital gain taxes etc., under thisAgreement and which may arise as a result of the sale of the shares of the Common Stock and the transactions contemplatedhereunder. LUXEMBOURGNOTIFICATIONSExchange Control Information. Grantee understands that Grantee is required to report any inward remittances of funds to theBanque Centrale de Luxembourg and/or the Service Central de la Statistique et des Études Économiques within 15 working daysfollowing the month during which the transaction occurred unless such payment is reported by a Luxembourg-resident financialinstitution.THE NETHERLANDSTERMS AND CONDITIONSNon-Competition Agreement. The non-competition agreement entered into between the Company and the Grantee shall be inaddition to any non-compete arrangements between the Grantee and his or her employer.SWITZERLANDTERMS AND CONDITIONSVesting: With the acceptance of a Grant, the Grantee expressly acknowledges that any RSU, PSU and/or SAR shall not give theGrantee any right or entitlement until such Grant is fully vested. The Grant remains fully discretionary until full vesting.Continuous Employment: In Switzerland, “continuously employed” (or substantially similar term) means the absence of anyinterruption or termination (issuance of termination notice) of the Grantee’s employment with the Company or with a Subsidiary of theCompany. Continuous employment shall not be considered interrupted or terminated in the case of sick leave, military leave or anyother leave of absence approved by the Company for which compensation needs to be paid by the Company or salary replacementbenefits are granted by any insurance or in the case of transfers between locations of the Exhibit 10(jj)Company and its Subsidiaries. For the avoidance of any doubt, continuous employment ends in any case with the end of theemployment, even if any salary replacement benefits continue to be paid by any insurance, pension scheme or social security.Retirement: For the purpose of the Plan, only a retirement under the rules and conditions of the Swiss pension scheme of theSubsidiary employing the Grantee shall qualify as retirement for the purpose of vesting of RSU, PSU or termination of SAR, and onlyif such retirements is (A) at age 62 or older while employed by the Company or any of its Subsidiaries; or (B) at or after such time asthe Grantee’s age (minimum of age 55), plus full years of continuous employment by the Company or any of its Subsidiaries, equals75.Disability: For purposes of the Plan, the Grantee shall be considered “Disabled” if the Grantee is unable to engage in any substantialgainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death orqualifies as permanent full disability under the applicable Swiss social security and/or pension laws.Non-Competition Agreement: For the avoidance of any doubt, any non-competition agreement entered into between the Grantee andthe Company in connection with the Plan and grants thereunder shall be in addition to any non-competition agreement agreed betweenthe Grantee and the employing Subsidiary and shall not replace such non-competition agreement.NOTIFICATIONSExchange Control Notification. The Grantee may hold shares of Common Stock acquired under the Plan outside of Switzerlandprovided that he or she declares all foreign accounts (including any accounts that were opened or closed during the tax year) on his orher annual Swiss tax declaration.UNITED ARAB EMIRATESNOTIFICATIONSSecurities Law Notice. SARs under the Plan are granted only to select executive officers and other employees of the Company and itssubsidiaries for the purpose of providing such eligible persons with incentives and rewards for performance. The Agreement, includingthis Exhibit, the Plan and any documents the Grantee may receive in connection with the SARs are intended for distribution to sucheligible persons and must not be delivered to, or relied on, by any other person.The Emirates Securities and Commodities Authority, the Central Bank, the Ministry of Economy and the Dubai Department ofEconomic Development do not have any responsibility for reviewing or verifying any documents in connection with the Plan nor havethey reviewed or approved the Plan or the Agreement. The securities to which this statement relates may be illiquid and/or subject torestrictions on their resale. The Grantee and/or prospective purchasers of the securities offered should conduct their own due diligenceon the securities.If the Grantee does not understand the contents of the Agreement, including this Exhibit, or the Plan, the Grantee should consult anauthorized financial adviser.UNITED KINGDOMTERMS AND CONDITIONSU.K. Sub-Plan. The terms of the U.K. Sub-plan apply to the SARs. Exhibit 10(l)(ii)FIRST AMENDMENTto theHARSCO CORPORATIONDeferred Compensation Plan for Non-Employee DirectorsWHEREAS, Harsco Corporation (the “Company”) has previously adopted the Deferred Compensation Plan for Non-Employee Directors (the “Plan”) pursuant to which eligible members of its Board of Directors may elect to defer receipt of all or anyportion of the compensation payable to them for services rendered to the Company as Directors; andWHEREAS, the Company has reserved the right to amend the Plan pursuant to Section 16 of the Plan; andWHEREAS, the Company desires to amend the Plan to clarify the forms of compensation which may be deferred under thePlan; andNOW, THEREFORE, the Plan is hereby amended as follows:1.Section 2 of the Plan is revised in its entirety to read as follows:2. Deferrable Compensation. A Non-Employee Director may elect to defer receipt of all, any part or none of the aggregatecompensation payable by the Corporation for services rendered as a Director, including the annual base retainer, CommitteeChairman annual retainer increment, attendance fees for board and committee meetings, grants under the 2016 Non-EmployeeDirectors’ Long-Term Equity Compensation Plan, including but not limited to Restricted Stock Units (“RSUs”) and other feesfor special services (in the aggregate, the “Director's Fees”).2.The first sentence of Section 3 of the Plan is revised in its entirety to read as follows:3. Election To Defer. A Non-Employee Director who desires to defer receipt of all or a portion of his Director's Fees in anycalendar year shall so notify the Corporation's Pension Committee in writing before the first day of the calendar year,specifying on a form supplied by the Committee (a) the dollar amount or percentage of the Director's Fees to be deferred, (b)the deferral period, (c) the form of payment, and (d) the notional investment direction.3.Section 5(a) of the Plan is revised in its entirety to read as follows:(a) Accounts: At the time a Non-Employee Director elects to defer the receipt of compensation pursuant to Paragraph 3 above,he shall also direct the amount of the deferral to be notionally invested in an Interest-Bearing Account and the amount to benotionally invested in a Harsco Stock Account. Notwithstanding the foregoing, the deferral of a RSU shall automatically benotionally invested in a Harsco Stock Account once such RSUs have become vested. Pursuant to such investment direction,the deferral amounts shall be credited to the appropriate accounts as set forth below:4.Section 5(a)(ii) of the Plan is revised in its entirety to read as follows:(ii) Harsco Stock Account: To the extent that a Non-Employee Director elects a notional investment in a Harsco Stock Account(or a RSU deferral is automatically notionally invested in a Harsco Stock Account), the Corporation shall credit a Harsco StockAccount established in his name with units (including fractions), the number of which shall be obtained by dividing the amountof the deferred Director's Fees or vested RSUs for that period to be so invested, by the Fair Market Value of the Corporation'scommon stock on the day immediately preceding the date such Exhibit 10(l)(ii)credit is to be made to the Account (i.e. February 14 for the February 15 credit date). This credit shall occur on a quarterlybasis, as of each February 15, May 15, August 15 and November 15, for fees earned during the quarterly period ending on theday immediately preceding such crediting date.5.The first sentence of Section 5(c) of the Plan is revised in its entirety to read as follows:Except with respect to the investment of a RSU deferral, a Non-Employee Director may transfer all or part of the amount inone account to the other account by irrevocable written notice to the Corporation's Pension Committee.IN WITNESS WHEREOF, the Company has caused this First Amendment to be duly executed this 26 day of April, 2016. Exhibit 12HARSCO CORPORATIONComputation of Ratios of Earnings to Fixed Charges YEARS ENDED DECEMBER 31(In thousands)2016 (a) 2015 (a) 2014 (a) 2013 (a) 2012 (a) Pre-tax income (loss) from continuingoperations attributable to Harscoshareholders$(79,699)(b)$34,846 $8,085 $(199,381)(c)$(227,211)(d)Add: Consolidated Fixed Charges computedbelow63,649 62,720 67,181 78,637 80,073 Net adjustments for unconsolidated entities(5,670) (147) 1,558 (1,511) (256) Net adjustments for capitalized interest194 466 (46) 53 128 Consolidated Earnings Available for FixedCharges$(21,526)(b)$97,885 $76,778 $(122,202)(c)$(147,266)(d) Consolidated Fixed Charges: Interest expense per financial statements (e)$51,584 $46,804 $47,111 $49,654 $47,381 Interest expense capitalized— — 541 577 476 Portion of rentals (1/3) representing areasonable approximation of the interestfactor12,065 15,916 19,529 28,406 32,216 Consolidated Fixed Charges$63,649 $62,720 $67,181 $78,637 $80,073 Consolidated Ratio of Earnings to FixedCharges—(b)(f)1.56 1.14 —(c)(g)—(d)(h)(a)Does not include interest related to uncertain tax position obligations.(b)During 2016, the Company recorded pre-tax charges of $43.5 million related to the sale of the Company's equity interest in Brand; pre-tax chargesof $45.1 million related to an estimated forward loss provision related to the Company's contracts with the federal railway system of Switzerland;and pre-tax charges of $35.3 million loss on early extinguishment of debt.(c)During 2013, the Company recorded a $272.3 million, non-cash pre-tax long-lived asset impairment charge.(d)In the fourth quarter of 2012, the Company incurred a $265.0 million, pre-tax goodwill impairment charge.(e)Includes amortization of debt discount.(f)For the year ended December 31, 2016, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $85.2 millionto achieve a coverage of 1:1.(g)For the year ended December 31, 2013, the ratio coverage was less than 1:1. We would have needed to generate additional earnings of $200.8million to achieve a coverage of 1:1.(h)For the year ended December 31, 2012, the ratio coverage was less that 1:1. We would have needed to generate additional earnings of $227.3million to achieve a coverage of 1:1. HARSCO CORPORATION Exhibit 21Subsidiaries of Registrant SubsidiaryCountry of IncorporationOwnership Percentage Harsco Metals Argentina S.A.Argentina100%Harsco (Australia) Pty. LimitedAustralia100%Harsco Industrial Air-X-Changers Pty. Ltd.Australia100%Harsco Metals Australia Pty. Ltd.Australia100%Harsco Metals Australia Holding Investment Co. Pty. Ltd.Australia100%Harsco Rail Pty. Ltd.Australia100%Harsco Minerals Austria GmbHAustria100%AluServ Middle East W.L.L.Bahrain65%Harsco Belgium S.P.R.L.Belgium100%Harsco Metals Belgium S.A.Belgium100%Harsco Metals Emirates MaatschapBelgium65%Harsco Rail Emirates Maatschap/Societe de Droit CommunBelgium100%Harsco Brazil Investments SPRLBelgium100%Harsco Chile Investments SPRLBelgium100%Harsco do Brasil Participacoes e Servicos Siderurgicos Ltda.Brazil100%Harsco Metals LimitadaBrazil100%Harsco Minerais LimitadaBrazil100%Harsco Rail LtdaBrazil100%Heckett Comercio de Rejeitos Industriais, Importacao e Exportacao LtdaBrazil100%Harsco Canada Corporation Societe Harsco CanadaCanada100%Harsco Canada General Partner LimitedCanada100%Harsco Canada Limited PartnershipCanada100%Harsco Nova Scotia Holding CorporationCanada100%Harsco Metals Chile S.A.Chile100%Harsco Metals (Ningbo) Co. Ltd.China70%Harsco (Tangshan) Metallurgical Materials Technology Co.,LTD.China65%Harsco Metals Zhejiang Co. Ltd.China70%JiangSu Harsco Industrial Grating Company LimitedChina100%Shanxi TISCO-Harsco Technology Co., Ltd.China60%Harsco APAC Rail Machinery (Beijing) Co., Ltd.China100%Harsco Technology China Co., Ltd.China100%Harsco Infrastructure CZ s.r.oCzech Republic100%Czech Slag - Nova Hut s.r.o.Czech Republic65%Harsco Metals CZ s.r.oCzech Republic100%Harsco Metals Middle East FZEDubai100%Harsco Metals Egypt L.L.C.Egypt100%Heckett Bahna Co. For Industrial Operations S.A.E.Egypt65%Heckett MultiServ Bahna S.A.E.Egypt65%Slag Processing Company Egypt (SLAR) S.A.E.Egypt60%MultiServ OyFinland100% HARSCO CORPORATION Exhibit 21Subsidiaries of Registrant SubsidiaryCountry of IncorporationOwnership PercentageHarsco Minerals France S.A.S.France100%Harsco France S.A.S.France100%Harsco Metals & Minerals SASFrance100%Harsco Minerals Deutschland GmbHGermany100%Harsco Rail Europe GmbHGermany100%Harsco Metals Germany GmbhGermany100%Harsco (Gibraltar) Holding LimitedGibraltar100%Harsco Metals Guatemala S.A.Guatemala100%Harsco China Holding Company LimitedHong Kong100%Harsco Industrial Grating China Holding Co. Ltd.Hong Kong70%Harsco Infrastructure Hong Kong Ltd.Hong Kong100%Harsco India Metals Private LimitedIndia99.99%Harsco India Private Ltd.India91.75%Harsco India Services Private Ltd.India100%Harsco Track Machines and Services Private LimitedIndia100%Harsco Metals Italia S.R.L.Italy100%Ilserv S.R.L.Italy65%Harsco Metals Nord Italia S.R.L.Italy100%Harsco Luxembourg S.a.r.lLuxembourg100%Harsco Metals Luxembourg S.A.Luxembourg100%Harsco Metals Luxequip S.A.Luxembourg100%Excell Americas Holdings Ltd S.a.r.L.Luxembourg100%Harsco Americas Investments S.a.r.l.Luxembourg100%Harsco International Finance S.a.r.l.Luxembourg100%Excell Africa Holdings Ltd SarlLuxembourg100%Ballagio S.A.R.L.Luxembourg100%Harsco Metals Kemaman Sdn BhdMalaysia100%Harsco Industrial IKG de Mexico, S.A. de C.V.Mexico100%Harsco Metals de Mexico S.A. de C.V.Mexico100%Irving, S.A. de C.V.Mexico100%Harsco Asia Investment B.V.Netherlands100%Harsco Asia China Investment B.V.Netherlands100%Harsco Asia Pacific Investment B.V.Netherlands100%GasServ (Netherlands) VII B.V.Netherlands100%Harsco (Mexico) Holdings B.V.Netherlands100%Harsco Infrastructure Industrial Services B.V.Netherlands100%Harsco Infrastructure B.V.Netherlands100%Harsco Infrastructure Construction Services B.V.Netherlands100%Harsco Infrastructure Logistic Services B.V.Netherlands100%Harsco Investments Europe B.V.Netherlands100%Harsco Metals Holland B.V.Netherlands100%Harsco Metals Transport B.V.Netherlands100% HARSCO CORPORATION Exhibit 21Subsidiaries of Registrant SubsidiaryCountry of IncorporationOwnership PercentageHunnebeck Nederland B.V.Netherlands100%Harsco Metals Oostelijk Staal International B.V.Netherlands100%Harsco Minerals Europe B.V.Netherlands100%Harsco Nederland Slag B.V.Netherlands100%Heckett MultiServ China B.V.Netherlands100%Heckett MultiServ Far East B.V.Netherlands100%MultiServ International B.V.Netherlands100%MultiServ Finance BVNetherlands100%Slag Reductie (Pacific) B.V.Netherlands100%Slag Reductie Nederland B.V.Netherlands100%Harsco (Peru) Holdings B.V.Netherlands100%Harsco Europa B.V.Netherlands100%Harsco Finance B.V.Netherlands100%SGB Industrial Services BVNetherlands100%Harsco Infrastructure SSH BVNetherlands100%Minerval Metallurgic Additives BVNetherlands100%Harsco Metals SteelServ LimitedNew Zealand50%Harsco Infrastructure Norge A.S.Norway100%Harsco Metals Norway A.S.Norway100%Harsco Minerals Arabia LLC (FZC)Oman100%Harsco Steel Mill Trading Arabia LLCOman100%Harsco Metals Peru S.A.Peru100%Harsco Metals Polska SP Z.O.O.Poland100%Harsco Metals CTS Prestacao de Servicos Tecnicos e Aluguer de Equipamentos LDAUnipessoalPortugal100%Harsco Metals Saudi Arabia Ltd.Saudi Arabia55%Harsco Metals D.O.O. SmederevoSerbia100%Harsco Infrastructure Slovensko s.r.o.Slovak Republic100%Harsco Metals Slovensko s.r.o.Slovak Republic100%Harsco Minerali d.o.o.Slovenia100%Harsco Metals RSA Africa (Pty.) Ltd.South Africa100%Harsco Metals South Africa (Pty.) Ltd.South Africa100%Harsco Metals SRH Mill Services (Pty.) Ltd.South Africa100%Harsco Metals SteelServ (Pty.) Ltd.South Africa100%Harsco Metals Ilanga Pty. Ltd.South Africa100%MultiServ Technologies (South Africa) (Pty.) Ltd.South Africa100%Harsco Infrastructure South Africa (Pty.) Ltd.South Africa100%Heckett MultiServ (FS) Pty LtdSouth Africa100%Harsco Metal Reclamation SPV (Pty.) Ltd.South Africa100%Harsco Metals Gesmafesa S.A.Spain100%Harsco Metals Intermetal S.A.Spain100%Harsco Metals Lycrete S.A.Spain100%Harsco Metals Reclamet S.A.Spain100%Harsco Infrastructure Sverige A.B.Sweden100% HARSCO CORPORATION Exhibit 21Subsidiaries of Registrant SubsidiaryCountry of IncorporationOwnership PercentageHarsco Metals Sweden A.B.Sweden100%Montanus Industriforvaltning A.B.Sweden100%MultiServe (Sweden) A.B.Sweden100%MultiServe Technologies (Sweden) A.B.Sweden100%Harsco Rail Switzerland GmbHSwitzerland100%Harsco Switzerland Finance GmbHSwitzerland100%Harsco Switzerland Holdings GmbHSwitzerland100%Harsco Metals (Thailand) Company Ltd.Thailand100%Harsco Sun Demiryolu Ekipmanlari Uretim Ve Ticaret Limited SirketiTurkey51%Faber Prest LimitedU.K.100%Fourninezero Ltd.U.K.100%Harsco (U.K.) LimitedU.K.100%Harsco (UK) Group LtdU.K.100%Harsco (UK) Holdings LtdU.K.100%Harsco (York Place) LimitedU.K.100%Harsco Fairerways Limited PartnershipU.K.100%Harsco Fairestways Limited PartnershipU.K.100%Harsco Fairways PartnershipU.K.100%Harsco Higherlands Limited PartnershipU.K.100%Harsco Highestlands Limited PartnershipU.K.100%Harsco Infrastructure Group Ltd.U.K.100%Harsco Infrastructure Services Ltd.U.K.100%Harsco Investment Ltd.U.K.100%Harsco Leatherhead LimitedU.K.100%Harsco Metals 385 LtdU.K.100%Harsco Metals Group LimitedU.K.100%Harsco Metals Holdings LimitedU.K.100%Harsco Mole Valley LimitedU.K.100%Harsco Rail LimitedU.K.100%Harsco Surrey LimitedU.K.100%MultiServ Investment LimitedU.K.100%SGB Investments Ltd.U.K.100%Short Brothers (Plant) Ltd.U.K.100%Harsco Global Sourcing LimitedU.K.100%Harsco Metals 373 LtdU.K.100%Heckett LimitedU.K.100%Harsco Metals LtdU.K.100%Masterclimbers LtdU.K.100%Harsco Track Technologies LtdU.K.100%MultiServ LimitedU.K.100%MultiServ Logistics LimitedU.K.100%The Slag Reduction Company LimitedU.K.100%Cuplok LimitedU.K.100%Extraguard LimitedU.K.100%Parker Scaffolding Co LimitedU.K.100% Rovacabin LimitedU.K.100%HARSCO CORPORATION Exhibit 21Subsidiaries of Registrant SubsidiaryCountry of IncorporationOwnership PercentageScaffolding (Great Britain) LimitedU.K.100%SGB Holdings LimitedU.K.100%SGB Middle East LimitedU.K.100%SGB Services (Scaffolding) LimitedU.K.100%Harsco Defense Holding, LLCU.S.A.100%Harsco Financial Holdings, Inc.U.S.A.100%Harsco Holdings, Inc.U.S.A.100%Harsco Infrastructure Holdings, Inc.U.S.A.100%Harsco Metals Holding LLCU.S.A.100%Harsco Metals Intermetal LLCU.S.A.100%Harsco Metals Investment LLCU.S.A.100%Harsco Metals Operations LLCU.S.A.100%Harsco Metals SRI LLCU.S.A.100%Harsco Metals VB LLCU.S.A.100%Harsco Metro Rail, LLCU.S.A.100%Harsco Minerals Technologies LLCU.S.A.100%Harsco Minnesota Finance, Inc.U.S.A.100%Harsco Minnesota LLCU.S.A.100%Harsco Rail, LLCU.S.A.100%Harsco Technologies LLCU.S.A.100%Protran Technology LLCU.S.A100%Companies in which Harsco Corporation does not exert management control are not consolidated. These companies are listed below as unconsolidatedentities.Company NameCountry of IncorporationOwnershipPercentage P.T. Purna Baja HarscoIndonesia40% Exhibit 23CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statement on Forms S‑8 (Nos. 333-13175, 333-13173, 333-59832, 333-70710, 333-114958, 333-188448, and 333-211203) of Harsco Corporation of our report dated February 24, 2017 relating to the financial statements,financial statement schedule, and the effectiveness of internal control over financial reporting, which appears in this Form 10‑K./s/PricewaterhouseCoopers LLPPhiladelphia, PennsylvaniaFebruary 24, 2017 Exhibit 31.1 HARSCO CORPORATIONCERTIFICATION 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 Annual Report on Form 10-K of Harsco 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 thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial 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 inExchange 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, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, 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 oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal 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 theeffectiveness 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 recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’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 reasonablylikely 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 controlover financial reporting. February 24, 2017 /s/ F. NICHOLAS GRASBERGER, IIIF. Nicholas Grasberger, IIIPresident and Chief Executive Officer Exhibit 31.2 HARSCO CORPORATIONCERTIFICATION 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 Annual Report on Form 10-K of Harsco 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 thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial 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 inExchange 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, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, 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 oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal 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 theeffectiveness 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 recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially 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 theregistrant’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 reasonablylikely 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 controlover financial reporting. February 24, 2017 /s/ PETER F. MINANPeter F. MinanSenior Vice President and Chief Financial Officer Exhibit 32HARSCO CORPORATIONCERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Harsco Corporation (the "Company") on Form 10-K for the period ending December 31, 2016, as filed with theSecurities 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 ofthe 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.February 24, 2017/s/ F. NICHOLAS GRASBERGER, IIIF. Nicholas Grasberger, IIIPresident and Chief Executive Officer/s/ PETER F. MINANPeter F. MinanSenior Vice President and Chief Financial OfficerA signed original of this written statement required by Section 906 has been provided to Harsco Corporation and will be retained by Harsco Corporation andfurnished to the Securities and Exchange Commission or its staff upon request.

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