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Acquisitions and Dispositions | 9 Months Ended
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Sep. 30, 2021
Business Combinations [Abstract] |
Acquisitions and Dispositions | Acquisitions and Dispositions ESOL On April 6, 2020 the Company completed the acquisition of 100% of ESOL, an established hazardous waste transportation, processing and services provider with a comprehensive portfolio of disposal solutions for customers primarily across the industrial, retail and healthcare markets from Stericycle, Inc. for $429.0 million of cash consideration, inclusive of post-closing adjustments. In addition, as part of the acquisition, the Company entered into a non-compete agreement with Stericycle, Inc. The fair value recorded for the assets acquired and liabilities assumed for ESOL is as follows:
|  | Final
(In millions) |  | April 6 2020 |  | Measurement Period Adjustments |  | September 30 2021
Cash and cash equivalents |  | $ | 0.4 |  |  | $ | — |  |  | $ | 0.4 |
Trade accounts receivable |  | 124.1 |  |  | (1.5) |  |  | 122.6 |
Inventory |  | 5.0 |  |  | — |  |  | 5.0 |
Other current assets |  | 0.7 |  |  | (0.7) |  |  | — |
Property, plant and equipment |  | 105.3 |  |  | (3.9) |  |  | 101.4 |
Right-of-use assets |  | 56.0 |  |  | — |  |  | 56.0 |
Goodwill |  | 152.0 |  |  | 1.3 |  |  | 153.3 |
Intangible assets |  | 161.0 |  |  | — |  |  | 161.0 |
Other assets |  | 0.2 |  |  | — |  |  | 0.2 |
Accounts payable |  | (48.6) |  |  | (1.5) |  |  | (50.1) |
Accrued expenses |  | (17.5) |  |  | (1.8) |  |  | (19.3) |
Current portion of operating lease liabilities |  | (16.6) |  |  | — |  |  | (16.6) |
Other current liabilities |  | (6.4) |  |  | (0.2) |  |  | (6.6) |
Environmental liabilities |  | (24.4) |  |  | — |  |  | (24.4) |
Deferred income taxes |  | (15.5) |  |  | (1.5) |  |  | (17.0) |
Operating lease liabilities |  | (39.4) |  |  | — |  |  | (39.4) |
Total identifiable net assets of ESOL |  | 436.3 |  |  | (9.8) |  |  | 426.5 |
Non-compete agreement |  | 2.5 |  |  | — |  |  | 2.5 |
Total identifiable net assets of ESOL, including non-compete agreement |  | $ | 438.8 |  |  | $ | (9.8) |  |  | $ | 429.0 |
The goodwill is primarily attributed to expected operational efficiencies and synergies from the expanded geographical scale of hazardous waste processing facilities resulting from combining the ESOL business with the existing Clean Earth business of the Company, as well as the value associated with the assembled workforce of ESOL. The Company expects $36.8 million of goodwill to be deductible for income tax purposes through 2030. The following table details the valuation of identifiable intangible assets and amortization periods for ESOL and the non-compete agreement entered into by the Company upon acquisition of ESOL:
|  |  |  | Final
(Dollars in millions) |  | Weighted-Average Amortization Period |  | April 6 2020 |  | Measurement Period Adjustments |  | September 30 2021
Permits and rights |  | 22 years |  | $ | 138.0 |  |  | $ | — |  |  | $ | 138.0 |
Customer relationships |  | 10 years |  | 23.0 |  |  | — |  |  | 23.0 |
Total identifiable intangible assets of ESOL |  |  |  | 161.0 |  |  | — |  |  | 161.0 |
Non-compete agreement |  | 4 years |  | 2.5 |  |  | — |  |  | 2.5 |
Total identifiable intangible assets acquired |  |  |  | $ | 163.5 |  |  | $ | — |  |  | $ | 163.5 |
The Company valued the identifiable intangible assets using methodologies under the income approach including the multi-period excess earnings method, the distributor method, and the with-and-without method. The three and nine months ended September 30, 2020 include ESOL direct acquisition and integration costs of $10.6 million and $41.0 million, respectively, which are included in the Selling, general and administrative expenses, within the Corporate function, in the Company's Condensed Consolidated Statements of Operations. In addition to the acquisition and integration costs reflected in the Company's Condensed Consolidated Statements of Operations, the debt issuance costs associated with the issuance of debt to fund the acquisition are reflected, net of amortization subsequent to the acquisition date, as Long-term debt on the Company's Condensed Consolidated Balance Sheets. Clean Earth On June 28, 2019, the Company acquired 100% of the outstanding stock of Clean Earth, one of the largest U.S. providers of specialty waste processing and beneficial reuse solutions for hazardous wastes, contaminated materials and dredged volumes, for an enterprise valuation of approximately $625 million on a cash free, debt free basis, subject to normal working capital adjustments. The Company transferred approximately $628 million of cash consideration and agreed to reimburse the sellers for any usage of assumed net operating losses in a post-closing period for up to five years. Pro forma financial information The pro forma information below gives effect to the ESOL acquisition as if it had been completed on January 1, 2019. The pro forma information is not necessarily indicative of the Company’s results of operations had the acquisition been completed on the above date, nor is it necessarily indicative of future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition and does not reflect the additional revenue opportunities following the acquisition. The pro forma information below includes the adjustments necessary to reflect additional depreciation and amortization expense based on the estimated fair value and useful lives of intangible assets and fixed assets acquired; includes additional interest expense of approximately $4.7 million for the nine months ended September 30, 2020 on the acquisition related borrowings used to finance the acquisition and excludes certain directly attributable acquisition and integration costs. In addition, the historical ESOL results include $8.9 million for the nine months ended September 30, 2020 of corporate expenses charged to ESOL from Stericycle.
|  |  |  | Nine Months Ended
|  |  |  | September 30
(In millions) |  |  |  | 2020 |  |
Pro forma revenues |  |  |  | $ | 1,486.2 |  |  |
Pro forma net income (loss) attributed to Harsco Corporation (including discontinued operations) (a) |  |  |  | 1.0 |  |  |
(a) Pro forma net income includes the after tax gain on the sale of IKG of approximately $9 million for the nine months ended September 30, 2020. Harsco Industrial Segment In January 2020 the Company sold IKG, and together with the 2019 sales of AXC and PK, this completed the divestiture of the former Harsco Industrial Segment originally announced in May 2019. The Harsco Industrial Segment has historically been a separate reportable segment with primary operations in North America and Latin America. In accordance with U.S. GAAP, the results of the former Harsco Industrial Segment are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for the three and nine months ended September 30, 2020. Certain key selected financial information included in net income (loss) from discontinued operations for the former Harsco Industrial Segment is as follows:
|  | Three Months Ended |  | Nine Months Ended
|  | September 30 |  | September 30
(In millions) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Amounts for the former Harsco Industrial Segment:
Total revenues |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 10,203 |
Cost of products sold |  | — |  |  | — |  |  | — |  |  | 8,082 |
Gain on sale from discontinued business |  | — |  |  | — |  |  | — |  |  | 18,371 |
Income (loss) from discontinued business |  | (856) |  |  | (716) |  |  | (2,859) |  |  | (593) |
Additional amounts allocated to the former Harsco Industrial Segment:
Selling, general and administrative expenses (b) |  | $ | 856 |  |  | $ | 521 |  |  | $ | 2,859 |  |  | $ | 1,710 |
(b) The Company has allocated directly attributable transaction costs to discontinued operations. In addition, this caption includes costs directly attributable to retained contingent liabilities of the Harsco Industrial Segment.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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