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

The following discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements as well as the audited consolidated financial statements of the Company, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 which includes additional information about the Company’s critical accounting policies, contractual obligations, practices and the transactions that support the financial results, and provides a more comprehensive summary of the Company’s outlook, trends and strategies for 2026 and beyond.

Forward-Looking Statements
The nature of the Company's business, together with the number of countries in which it operates, subject it to changing economic, competitive, regulatory and technological conditions, risks and uncertainties. In accordance with the "safe harbor" provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Company provides the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the results contemplated by forward-looking statements, including the expectations and assumptions expressed or implied herein. Forward-looking statements contained herein could include, among other things, statements about the expected timing, completion and effects of the transactions contemplated by the Agreement and Plan of Merger, dated as of November 20, 2025 (the "Merger Agreement") and the Separation Agreement, dated as of November 20, 2025 (the "Separation Agreement"), statements about management's confidence in and strategies for performance; expectations for new and existing products, technologies and opportunities and expectations regarding growth, sales, cash flows, and earnings. Forward-looking statements can be identified by the use of such terms as "may," "could," "expect," "anticipate," "intend," "believe," "likely," "estimate," "outlook," "plan", "contemplate", "project", "target" 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)the Company's ability to complete the transactions contemplated by the Merger Agreement and the Separation Agreement on the terms expected in a timely manner or at all;
(2)the possibility that the Merger and Separation may not ultimately achieve the expected benefits;
(3)the Company's ability to successfully enter into new contracts and complete new acquisitions, divestitures, or strategic ventures in the time-frame contemplated or at all;
(4)the Company’s inability to comply with applicable environmental laws and regulations;
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(5)the Company’s inability to obtain, renew, or maintain compliance with its operating permits or license agreements;
(6)various economic, business, and regulatory risks associated with the waste management industry;
(7)the seasonal nature of the Company's business;
(8)risks caused by customer concentration, fixed-price and long-term customer contracts, especially those related to complex engineered equipment and the competitive nature of the industries in which the Company operates;
(9)the outcome of any disputes with customers, contractors and subcontractors;
(10)the financial condition of the Company's customers, including the ability of customers (especially those that may be highly leveraged or have inadequate liquidity) to maintain their credit availability;
(11)higher than expected claims under the Company’s insurance policies, or losses that are uninsurable or that exceed existing insurance coverage;
(12)market and competitive changes, including pricing pressures, market demand and acceptance for new products, services and technologies; changes in currency exchange rates, interest rates, commodity and fuel costs and capital costs;
(13)the Company's ability to negotiate, complete, and integrate strategic transactions and joint ventures with strategic partners;
(14)the Company’s ability to effectively retain key management and employees, including due to unanticipated changes to demand for the Company’s services, disruptions associated with labor disputes, and increased operating costs associated with union organizations;
(15)the Company's inability or failure to protect its intellectual property rights from infringement in one or more of the many countries in which the Company operates;
(16)failure to effectively prevent, detect or recover from breaches in the Company's cybersecurity infrastructure;
(17)changes in the worldwide business environment in which the Company operates, including changes in general economic and industry conditions and cyclical slowdowns impacting the steel and aluminum industries;
(18)fluctuations in exchange rates between the U.S. dollar and other currencies in which the Company conducts business;
(19)unforeseen business disruptions in one or more of the many countries in which the Company operates due to changes in economic conditions, changes in governmental laws and regulations, including environmental, occupational health and safety, tax and import tariff standards and amounts; political instability, civil disobedience, armed hostilities, public health issues or other calamities;
(20)liability for and implementation of environmental remediation matters;
(21)product liability and warranty claims associated with the Company’s operations;
(22)the Company’s ability to comply with financial covenants and obligations to financial counterparties;
(23)the Company’s outstanding indebtedness and exposure to derivative financial instruments that may be impacted by, among other factors, changes in interest rates;
(24)tax liabilities and changes in tax laws;
(25)changes in the performance of equity and bond markets that could affect, among other things, the valuation of the assets in the Company's pension plans and the accounting for pension assets, liabilities and expenses;
(26)risk and uncertainty associated with intangible assets; and the other risk factors listed from time to time in the Company's SEC reports.

A further discussion of these, along with other potential risk factors, can be found in Part I, Item 1A, "Risk Factors," of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and in Part II, Item 1A, "Risk Factors" of this Quarterly Report on Form 10-Q. The Company cautions that these factors may not be exhaustive and that many of these factors are beyond the Company's ability to control or predict. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. The Company undertakes no duty to update forward-looking statements except as may be required by law.
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Executive Overview

The Company is a market-leading, global provider of environmental solutions for industrial, retail and medical waste streams and innovative equipment and technology for the rail sector. Today, the Company is principally an environmental solutions company that provides services to manage, recycle and beneficially reuse waste and byproduct materials across many industries. The Company was incorporated in 1956 and has locations in approximately 30 countries, including the U.S.

The Company's operations consist of three reportable segments: Harsco Environmental, Clean Earth and Harsco Rail. HE operates primarily under long-term contracts, providing critical environmental services and material processing to the global steel and metals industries, including zero waste solutions for manufacturing byproducts within the metals industry. CE provides specialty waste processing, treatment, recycling and beneficial reuse solutions for customers in the industrial, retail, healthcare and construction industries across a variety of waste needs, including hazardous, non-hazardous and contaminated soils and dredged materials. Rail is a provider of highly engineered maintenance equipment, after-market parts and safety and diagnostic systems and contracting solutions, which support railroad and transit customers worldwide.

As disclosed in Part I, Item 1A: Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, the Company’s business is subject to risks related to doing business internationally, including tariff policy or tariff regulation, as well as international political and trade tensions. In 2025, the U.S. government announced tariffs on goods imported into the U.S. from most countries and multiple nations countered with tariffs and other actions in response. Subsequently, the U.S. government has negotiated trade agreements with certain countries while negotiations with others are ongoing. Additionally, in early 2025, the European Union (the "EU") announced plans to lower import quotas and implement anti-dumping duties against various countries that have imported certain steel products into the region. In October 2025, the European Commission formally proposed significant actions to protect its steel industry, including a sizable reduction in steel import quotas and a meaningful tariff increase on above-quota imports. These proposals require EU parliament and council approvals, which are anticipated in 2026. These efforts by the EU are intended to support a healthy industrial manufacturing base in the region. Also, the military conflict in the Middle East has led to volatile energy prices globally and higher costs for consumers. The Company continues to assess its ability to pass on higher energy prices to its customers and any impacts energy price volatility will have on demand, as well as the impact of these tariffs on its businesses.

On November 20, 2025, the Company entered into definitive agreements with Veolia Environnement S.A., a French société anonyme ("Veolia"), whereby Veolia will acquire 100% of the Clean Earth business (the "Merger") for aggregate cash consideration of over $3.0 billion pursuant to the terms of the Merger Agreement. Immediately prior to the closing of the Merger, the Company will execute a series of reorganizational transactions and the Separation, following which the Harsco Environmental and Harsco Rail segments will be indirectly owned by a standalone publicly traded company ("New Enviri"). The transactions contemplated by the Separation Agreement and the Merger Agreement are on track to close in the second quarter of 2026, subject to customary regulatory approvals, with closing expected on June 1, 2026. These transactions are not expected to result in any material cash tax expense to Enviri or New Enviri.

On February 23, 2026, the Company amended its Senior Secured Credit Facilities to extend the maturity of its $50.0 million non-extended revolving credit facility from March 10, 2026 to the earlier of (i) July 1, 2026, and (ii) the closing date on which the Clean Earth segment is sold to Veolia in connection with the Merger Agreement