Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | HARSCO CORP | |
Entity Central Index Key | 45,876 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 80,094,365 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
Current assets: | |||
Cash and cash equivalents | $ 57,994 | $ 62,843 | |
Trade accounts receivable, net | 298,235 | 325,104 | |
Other receivables | [1] | 23,293 | 28,145 |
Inventories | 210,296 | 178,922 | |
Other current assets | 90,897 | 88,465 | |
Total current assets | 680,715 | 683,479 | |
Investments | 266,707 | 288,505 | |
Property, plant and equipment, net | 583,707 | 663,244 | |
Goodwill | 406,338 | 416,155 | |
Intangible assets, net | 56,240 | 58,524 | |
Other assets | 120,947 | 159,320 | |
Total assets | 2,114,654 | 2,269,227 | |
Current liabilities: | |||
Short-term borrowings | 14,945 | 16,748 | |
Current maturities of long-term debt | 21,869 | 25,188 | |
Accounts payable | 135,723 | 146,506 | |
Accrued compensation | 45,894 | 53,780 | |
Income taxes payable | 5,880 | 1,985 | |
Dividends payable | 16,419 | 16,535 | |
Insurance liabilities | 12,408 | 12,415 | |
Advances on contracts | 118,586 | 117,398 | |
Due to unconsolidated affiliate | 7,832 | 8,142 | |
Unit adjustment liability | 22,320 | 22,320 | |
Other current liabilities | 144,504 | 144,543 | |
Total current liabilities | 546,380 | 565,560 | |
Long-term debt | 822,390 | 829,709 | |
Deferred income taxes | 9,913 | 6,379 | |
Insurance liabilities | 32,288 | 35,470 | |
Retirement plan liabilities | 306,040 | 350,889 | |
Due to unconsolidated affiliate | 21,081 | 20,169 | |
Unit adjustment liability | 61,194 | 71,442 | |
Other liabilities | 42,075 | 37,699 | |
Total liabilities | $ 1,841,361 | $ 1,917,317 | |
COMMITMENTS AND CONTINGENCIES | |||
HARSCO CORPORATION STOCKHOLDERS' EQUITY | |||
Preferred stock | $ 0 | $ 0 | |
Common stock | 140,503 | 140,444 | |
Additional paid-in capital | 169,109 | 165,666 | |
Accumulated other comprehensive loss | (566,903) | (532,256) | |
Retained earnings | 1,247,485 | 1,283,549 | |
Treasury stock | (760,299) | (749,815) | |
Total Harsco Corporation stockholders' equity | 229,895 | 307,588 | |
Noncontrolling interests | 43,398 | 44,322 | |
Total equity | 273,293 | 351,910 | |
Total liabilities and equity | $ 2,114,654 | $ 2,269,227 | |
[1] | Other receivables include insurance claim receivables, employee receivables, tax claim receivables, receivables from affiliates and other miscellaneous receivables not included in Trade accounts receivable, net. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Revenues from continuing operations: | |||||
Service revenues | $ 272,463 | $ 341,831 | $ 852,100 | $ 1,054,591 | |
Product revenues | 155,871 | 184,546 | 483,560 | 519,613 | |
Total revenues | 428,334 | 526,377 | 1,335,660 | 1,574,204 | |
Costs and expenses from continuing operations: | |||||
Cost of services sold | 224,588 | 282,907 | 714,287 | 873,747 | |
Cost of products sold | 112,043 | 125,831 | 343,825 | 361,954 | |
Selling, general and administrative expenses | 64,526 | 67,774 | 186,891 | 212,537 | |
Research and development expenses | 1,057 | 854 | 3,490 | 4,575 | |
Loss on disposal of the Harsco Infrastructure Segment and transaction costs | 1,000 | 54 | 1,000 | 4,653 | |
Other expenses | 17,392 | 513 | 3,829 | 27,373 | |
Total costs and expenses | 420,606 | 477,933 | 1,253,322 | 1,484,839 | |
Operating income from continuing operations | 7,728 | 48,444 | 82,338 | 89,365 | |
Interest income | 264 | 555 | 951 | 1,262 | |
Interest expense | (11,110) | (11,949) | (34,812) | (35,328) | |
Change in fair value to the unit adjustment liability | (2,083) | (2,398) | (6,492) | (7,417) | |
Income (loss) from continuing operations before income taxes and equity loss | (5,201) | 34,652 | 41,985 | 47,882 | |
Income tax expense | (6,985) | (13,925) | (26,945) | (24,079) | |
Equity in income (loss) of unconsolidated entities, net | 3,105 | 5,805 | (396) | 1,057 | |
Income (loss) from continuing operations | (9,081) | 26,532 | 14,644 | 24,860 | |
Discontinued operations: | |||||
Income (loss) on disposal of discontinued business | (637) | (640) | (849) | 452 | |
Income tax (expense) benefit related to discontinued business | 235 | 237 | 313 | (168) | |
Income (loss) from discontinued operations, net of tax | (402) | (403) | (536) | 284 | |
Net income (loss) | (9,483) | 26,129 | 14,108 | 25,144 | |
Less: Net (income) loss attributable to noncontrolling interests | 827 | (1,532) | (925) | (2,948) | |
Net income (loss) attributable to Harsco Corporation | (8,656) | 24,597 | 13,183 | 22,196 | |
Amounts attributable to Harsco Corporation common stockholders: | |||||
Income (loss) from continuing operations, net of tax | (8,254) | 25,000 | 13,719 | 21,912 | |
Income (loss) from discontinued operations, net of tax | (402) | (403) | (536) | 284 | |
Net income (loss) attributable to Harsco Corporation | $ (8,656) | $ 24,597 | $ 13,183 | $ 22,196 | |
Weighted-average shares of common stock outstanding | 80,238 | 80,918 | 80,233 | 80,873 | |
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | $ (0.10) | $ 0.31 | $ 0.17 | $ 0.27 | |
Discontinued operations (in dollars per share) | (0.01) | 0 | (0.01) | 0 | |
Basic earnings (loss) per share attributable to Harsco Corporation common stockholders (in dollars per share) | $ (0.11) | $ 0.30 | [1] | $ 0.16 | $ 0.27 |
Diluted weighted-average shares of common stock outstanding (in shares) | 80,238 | 81,099 | 80,363 | 81,093 | |
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | $ (0.10) | $ 0.31 | $ 0.17 | $ 0.27 | |
Discontinued operations (in dollars per share) | (0.01) | 0 | (0.01) | 0 | |
Diluted earnings (loss) per share attributable to Harsco Corporation common stockholders (in dollars per share) | (0.11) | 0.30 | [1] | 0.16 | 0.27 |
Cash dividends declared per common share (in dollars per share) | $ 0.205 | $ 0.205 | $ 0.615 | $ 0.615 | |
[1] | Does not total due to rounding. |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ (9,483) | $ 26,129 | $ 14,108 | $ 25,144 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of deferred income taxes of $(3,747) and $5,322, and $(855) and $4,862 for the three and nine months ended September 30, 2015 and 2014, respectively | (36,854) | (18,355) | (74,671) | (16,608) |
Net gain (loss) on cash flow hedging instruments, net of deferred income taxes of $(799) and $(458), and $(1,337) and $210 for the three and nine months ended September 30, 2015 and 2014, respectively | 4,164 | (1,244) | 10,045 | (3,111) |
Pension liability adjustments, net of deferred income taxes of $(2,384) and $(2,057), and $(3,344) and $(2,130) for the three and nine months ended September 30, 2015 and 2014, respectively | 19,580 | 18,211 | 27,796 | 18,887 |
Unrealized gain (loss) on marketable securities, net of deferred income taxes of $4 and $(1), and $7 and $(3) for the three and nine months ended September 30, 2015 and 2014, respectively | (8) | 2 | (12) | 6 |
Total other comprehensive loss | (13,118) | (1,386) | (36,842) | (826) |
Total comprehensive income (loss) | (22,601) | 24,743 | (22,734) | 24,318 |
Less: Comprehensive (income) loss attributable to noncontrolling interests | 1,917 | (877) | 1,270 | (1,879) |
Comprehensive income (loss) attributable to Harsco Corporation | $ (20,684) | $ 23,866 | $ (21,464) | $ 22,439 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Foreign currency translation adjustments, deferred income taxes | $ (3,747) | $ 5,322 | $ (855) | $ 4,862 |
Net gain (loss) on cash flow hedging instruments, deferred income taxes | (799) | (458) | (1,337) | 210 |
Pension liability adjustments, deferred income taxes | (2,384) | (2,057) | (3,344) | (2,130) |
Unrealized gain on marketable securities, deferred income taxes | $ 4 | $ (1) | $ 7 | $ (3) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 14,108 | $ 25,144 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 110,343 | 124,855 |
Amortization | 9,003 | 8,937 |
Change in fair value to the unit adjustment liability | 6,492 | 7,417 |
Deferred income tax expense | 9,998 | 4,054 |
Equity in (income) loss of unconsolidated entities, net | 396 | (1,057) |
Loss on disposal of Harsco Infrastructure Segment | 0 | 2,911 |
Other, net | (12,345) | 16,677 |
Changes in assets and liabilities: | ||
Accounts receivable | 9,161 | (38,349) |
Inventories | (36,472) | (22,772) |
Accounts payable | (3,346) | (18,250) |
Accrued interest payable | 7,658 | 8,741 |
Accrued compensation | (3,640) | 9,415 |
Advances on contracts | 7,548 | 96,041 |
Harsco 2011/2012 Restructuring Program accrual | (305) | (2,455) |
Other assets and liabilities | (29,497) | (36,019) |
Net cash provided by operating activities | 89,102 | 185,290 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (91,583) | (135,170) |
Proceeds from the Infrastructure Transaction | 0 | 15,699 |
Proceeds from sales of assets | 20,777 | 11,153 |
Purchases of business, net of cash acquired | (7,705) | (26,244) |
Payment of unit adjustment liability | (16,740) | (16,740) |
Other investing activities, net | (7,975) | 473 |
Net cash used by investing activities | (103,226) | (150,829) |
Cash flows from financing activities: | ||
Short-term borrowings, net | 1,211 | 3,971 |
Current maturities and long-term debt: | ||
Additions | 92,993 | 117,470 |
Reductions | (101,679) | (120,544) |
Cash dividends paid on common stock | (49,311) | (49,734) |
Dividends paid to noncontrolling interests | (1,559) | (2,186) |
Purchase of noncontrolling interests | 395 | 0 |
Common stock acquired for treasury | (12,143) | 0 |
Proceeds from cross-currency interest rate swap termination | 75,057 | 0 |
Other financing activities, net | (2,607) | 0 |
Net cash provided (used) by financing activities | 1,567 | (51,023) |
Effect of exchange rate changes on cash | 7,708 | (4,440) |
Net decrease in cash and cash equivalents | (4,849) | (21,002) |
Cash and cash equivalents at beginning of period | 62,843 | 93,605 |
Cash and cash equivalents at end of period | $ 57,994 | $ 72,603 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock Issued | Common Stock Treasury | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests |
Balances at Dec. 31, 2013 | $ 597,555 | $ 140,248 | $ (746,237) | $ 159,025 | $ 1,372,041 | $ (370,615) | $ 43,093 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 25,144 | 22,196 | 2,948 | ||||
Cash dividends declared: | |||||||
Common @ $0.615 per share | (49,763) | (49,763) | |||||
Noncontrolling interests | (2,319) | (2,319) | |||||
Total other comprehensive income (loss), net of deferred income taxes of $(5,529) and $2,939 in 2015 and 2014, respectively | (826) | 243 | (1,069) | ||||
Contributions from noncontrolling interests | 1,560 | 1,560 | |||||
Noncontrolling interests transferred in the Infrastructure Transaction | (905) | (905) | |||||
Vesting of restricted stock units and other, net 31,147 shares and 130,603 shares in 2015 and 2014, respectively | 1,550 | 195 | (712) | 2,067 | |||
Amortization of unearned portion of stock-based compensation, net of forfeitures | 3,881 | 3,881 | |||||
Balances at Sep. 30, 2014 | 575,877 | 140,443 | (746,949) | 164,973 | 1,344,474 | (370,372) | 43,308 |
Balances at Dec. 31, 2014 | 351,910 | 140,444 | (749,815) | 165,666 | 1,283,549 | (532,256) | 44,322 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 14,108 | 13,183 | 925 | ||||
Cash dividends declared: | |||||||
Common @ $0.615 per share | (49,247) | (49,247) | |||||
Noncontrolling interests | (1,559) | (1,559) | |||||
Total other comprehensive income (loss), net of deferred income taxes of $(5,529) and $2,939 in 2015 and 2014, respectively | (36,842) | (34,647) | (2,195) | ||||
Contributions from noncontrolling interests | 2,100 | 2,100 | |||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | (398) | (3) | (395) | ||||
Sale of investment in consolidated subsidiary | 200 | 200 | |||||
Vesting of restricted stock units and other, net 31,147 shares and 130,603 shares in 2015 and 2014, respectively | (304) | 59 | (264) | (99) | |||
Treasury shares repurchased, 596,632 shares | (10,220) | (10,220) | |||||
Amortization of unearned portion of stock-based compensation, net of forfeitures | 3,545 | 3,545 | |||||
Balances at Sep. 30, 2015 | $ 273,293 | $ 140,503 | $ (760,299) | $ 169,109 | $ 1,247,485 | $ (566,903) | $ 43,398 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash dividends declared per common share (in dollars per share) | $ 0.615 | $ 0.615 |
Other Comprehensive Income (Loss), Tax | $ (5,529) | $ 2,939 |
Vesting of restricted stock units and other (in shares) | 31,147 | 130,603 |
Treasury Stock, Shares, Retired | 596,632 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Harsco Corporation (the “Company”) has prepared these unaudited condensed consolidated financial statements based on Securities and Exchange Commission rules that permit reduced disclosure for interim periods. In the opinion of management, all adjustments (all of which are of a normal recurring nature) that are necessary for a fair statement are reflected in the unaudited condensed consolidated financial statements. The December 31, 2014 Condensed Consolidated Balance Sheet information contained in this Quarterly Report on Form 10-Q was derived from the 2014 audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for an annual report. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 , as revised in the Company's Current Report on Form 8-K filed on June 1, 2015. Operating results and cash flows for the three and nine months ended September 30, 2015 are not indicative of the results that may be expected for the year ending December 31, 2015 . |
Revised Financial Statements
Revised Financial Statements | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Revised Financial Statements | Revised Financial Statements During the first quarter of 2015, the Company identified an error that would have had the net effect of decreasing after-tax income by $7.5 million , related to an unasserted multiemployer pension plan withdrawal liability that should have been recorded by the Company in the fourth quarter of 2012. The Company became aware of the potential withdrawal liability during the first quarter of 2015 and followed the Company's standard procedure of engaging outside experts to determine the amount of potential liability. Based on these procedures, the Company determined it had triggered a partial withdrawal during the fourth quarter of 2012 due to a decrease in hours worked by the Company's employees who participate in the plan and that such amount should have been accrued in that period. The Company assessed the individual and aggregate impact of this error on the current year and all prior periods and determined that the cumulative effect of this error was material to both the first quarter and expected full-year 2015 results, but did not result in a material misstatement to any previously issued annual or quarterly financial statements. Accordingly, the Company is revising the relevant financial statements for all applicable periods and will revise additional financial statements as they appear in future filings. In connection with the revision, the Company additionally corrected all previously disclosed immaterial out-of-period adjustments, including tax adjustments. The impact of revising the Company’s Condensed Consolidated Balance Sheets, Condensed Statements of Operations and Condensed Consolidated Statements of Cash Flows for all periods presented are as follows: December 31, 2014 (In thousands) As Previously Reported Revision As Revised ASSETS Inventories $ 177,265 $ 1,657 $ 178,922 Total current assets 681,822 1,657 683,479 Other assets 155,551 3,769 159,320 Total assets 2,263,801 5,426 2,269,227 LIABILITIES Other liabilities $ 25,849 $ 11,850 $ 37,699 Total liabilities 1,905,467 11,850 1,917,317 HARSCO CORPORATION STOCKHOLDERS’ EQUITY Accumulated other comprehensive loss $ (532,491 ) $ 235 $ (532,256 ) Retained earnings 1,290,208 (6,659 ) 1,283,549 Total Harsco Corporation stockholders’ equity 314,012 (6,424 ) 307,588 Total equity 358,334 (6,424 ) 351,910 Total liabilities and equity 2,263,801 5,426 2,269,227 Three Months Ended September 30, 2014 (In thousands, except per share amounts) As Previously Reported Revision As Revised Costs and expenses from continuing operations: Cost of services sold $ 285,098 $ (2,191 ) $ 282,907 Selling, general and administrative expenses 68,289 (515 ) 67,774 Total costs and expenses 480,639 (2,706 ) 477,933 Operating income from continuing operations $ 45,738 $ 2,706 $ 48,444 Income from continuing operations before income taxes and equity income 31,946 2,706 34,652 Income tax expense (11,671 ) (2,254 ) (13,925 ) Equity in income of unconsolidated entities, net 5,295 510 5,805 Income from continuing operations 25,570 962 26,532 Net income 25,167 962 26,129 Net income attributable to Harsco Corporation 23,635 962 24,597 Amounts attributable to Harsco Corporation common stockholders: Income from continuing operations, net of tax $ 24,038 $ 962 $ 25,000 Net income attributable to Harsco Corporation common stockholders 23,635 962 24,597 Basic income per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.30 $ 0.01 $ 0.31 Basic income per share attributable to Harsco Corporation common stockholders 0.29 0.01 0.30 Diluted income per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.30 $ 0.01 $ 0.31 Diluted income per share attributable to Harsco Corporation common stockholders 0.29 0.01 0.30 Nine Months Ended September 30, 2014 (In thousands, except per share amounts) As Previously Reported Revision As Revised Revenues from continuing operations: Service revenues $ 1,054,040 $ 551 $ 1,054,591 Total revenues 1,573,653 551 1,574,204 Costs and expenses from continuing operations: Cost of services sold $ 875,898 $ (2,151 ) $ 873,747 Selling, general and administrative expenses 213,052 (515 ) 212,537 Research and development expenses 5,456 (881 ) 4,575 Loss on disposal of the Harsco Infrastructure Segment and transaction costs 5,607 (954 ) 4,653 Total costs and expenses 1,489,340 (4,501 ) 1,484,839 Operating income from continuing operations $ 84,313 $ 5,052 $ 89,365 Income from continuing operations before income taxes and equity income 42,830 5,052 47,882 Income tax expense (20,424 ) (3,655 ) (24,079 ) Income from continuing operations 23,463 1,397 24,860 Net income 23,747 1,397 25,144 Net income attributable to Harsco Corporation 20,799 1,397 22,196 Amounts attributable to Harsco Corporation common stockholders: Income from continuing operations, net of tax $ 20,515 $ 1,397 $ 21,912 Net income attributable to Harsco Corporation common stockholders 20,799 1,397 22,196 Basic income per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.25 $ 0.02 $ 0.27 Basic income per share attributable to Harsco Corporation common stockholders 0.26 0.01 0.27 Diluted earnings per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.25 $ 0.02 $ 0.27 Diluted income per share attributable to Harsco Corporation common stockholders 0.26 0.01 0.27 Nine Months Ended September 30, 2014 (In thousands) As Previously Reported Revision As Revised Net cash provided (used) by: Operating activities $ 184,409 $ 881 $ 185,290 Investing activities (149,948 ) (881 ) (150,829 ) As of September 30, 2015 , the cumulative impact of this revision was a $6.7 million reduction in retained earnings. The diluted loss per share from continuing operations decrease for the year ended December 31, 2014 was $0.03 . The diluted loss per share from continuing operations increase for the years ended December 31, 2013 and 2012 was $0.06 for both periods. The notes to the condensed consolidated financial statements for the three and nine months ended September 30, 2015 have been revised, as applicable. |
Recently Adopted and Recently I
Recently Adopted and Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted and Recently Issued Accounting Standards | Recently Adopted and Recently Issued Accounting Standards The following accounting standards have been adopted in 2015 : On January 1, 2015, the Company adopted changes issued by the Financial Accounting Standards Board (" FASB") related to reporting discontinued operations and the disclosure of disposals of components of an entity. The changes modify the criteria related to what transactions constitute discontinued operations and expand disclosure requirements. The adoption of these changes did not have a material impact on the Company's condensed consolidated 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 for recognizing revenue and develop a common revenue standard. The core principle of the changes is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The changes also require additional disclosures related to revenue recognition. In July 2015, the FASB deferred the effective date of these changes by one year, but will permit entities to adopt one year earlier. The changes become effective for the Company on January 1, 2018. Management is currently evaluating these changes. In August 2014, the FASB issued changes related to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The changes become effective for the Company on January 1, 2017. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. In January 2015, the FASB issued changes related to reporting extraordinary and unusual items. The changes simplify income statement presentation by eliminating the concept of extraordinary items. The changes become effective for the Company on January 1, 2016. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. In February 2015, the FASB issued changes related to consolidation. The changes update consolidation analysis and affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. The changes become effective for the Company on January 1, 2016. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. In April 2015, the FASB issued changes related to simplifying the presentation of debt issuance costs. The changes require 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 debt liability. In August 2015, the FASB added guidance about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. The changes become effective for the Company on January 1, 2016. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. In April 2015, the FASB issued changes related to the determination of whether a cloud computing arrangement includes a software license. If a cloud computing arrangement is determined to include a software license, then the customer accounts for the software license element consistent with the acquisition of other software licenses. If the arrangement is determined not to contain a software license, the customer should account for the arrangement as a service contract. The changes become effective for the Company on January 1, 2016. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. In July 2015, the FASB issued changes related to the simplification of the measurement of inventory. The changes require entities to measure most inventory at 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 or market. The changes do not apply to inventories that are measured using either the last-in, first-out method or the retail inventory method. The changes become effective for the Company on January 1, 2017. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. In September 2015, the FASB issued changes simplifying the accounting for measurement period adjustments for business combinations. The changes result in an acquirer no longer being required to retrospectively reflect adjustments to provisional amounts during the measurement period as if they were recognized as of the acquisition date. Instead the acquirer would record the effect of the change to the provisional amounts during the measurement period in which the adjustment is identified. The changes also require additional disclosure related to such measurement period adjustments. The changes become effective for the Company on January 1, 2016. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Acquisitions | Acquisitions In March 2015, the Company acquired Protran Technology ("Protran"), a U.S. designer and producer of safety systems for transportation and industrial applications; and in April 2015, the Company acquired JK Rail Products, LLC ("JK Rail"), a provider of after-market parts for railroad track maintenance. Protran and JK Rail have been included in the results of the Harsco Rail Segment. Inclusion of pro forma financial information for these transactions is not necessary as the acquisitions are immaterial. |
Accounts Receivable and Invento
Accounts Receivable and Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Accounts Receivable And Inventories | |
Accounts Receivable and Inventories | Accounts Receivable and Inventories Accounts receivable consist of the following: (In thousands) September 30 December 31 Trade accounts receivable $ 322,751 $ 340,223 Less: Allowance for doubtful accounts (24,516 ) (15,119 ) Trade accounts receivable, net $ 298,235 $ 325,104 Other receivables (a) $ 23,293 $ 28,145 (a) Other receivables include insurance claim receivables, employee receivables, tax claim receivables, receivables from affiliates and other miscellaneous receivables not included in Trade accounts receivable, net. The provision for doubtful accounts related to trade accounts receivable was as follows: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Provision for doubtful accounts related to trade accounts receivable $ 10,005 $ (170 ) $ 10,615 $ 7,176 The increase in the Allowance for doubtful accounts since December 31, 2014 and the Provision for doubtful accounts for the three and nine months ended September 30, 2015 relates to one European customer in the Harsco Metals & Minerals Segment which ceased operations and began the formal process of liquidation. Inventories consist of the following: (In thousands) September 30 December 31 Finished goods $ 35,898 $ 30,525 Work-in-process 69,938 28,690 Raw materials and purchased parts 75,927 87,985 Stores and supplies 28,533 31,722 Inventories $ 210,296 $ 178,922 |
Equity Method Investments
Equity Method Investments | 9 Months Ended |
Sep. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments In November 2013, the Company consummated the previously announced transaction to sell the Company's Harsco Infrastructure Segment into a strategic venture with Clayton, Dubilier & Rice ("CD&R") as part of 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 owns an approximate 29% equity interest in Brand Energy & Infrastructure Services Inc. and Subsidiaries ("Brand" or the "Infrastructure strategic venture") at both September 30, 2015 and December 31, 2014 . The book value of the Company's equity method investment in Brand at September 30, 2015 and December 31, 2014 was $264.2 million and $285.7 million , respectively. The Company records the Company's proportionate share of Brand's net income or loss one quarter in arrears. Brand's results of operations for the three months ended June 30, 2015 and 2014 and the nine months ended June 30, 2015 and the period from November 27, 2013 through June 30, 2014, are summarized as follows: (In thousands) Three Months Ended June 30 2015 Three Months Ended June 30 2014 Nine Months Ended June 30 2015 Period From November 27 2013 Through June 30 2014 Summarized Statement of Operations Information of Brand: Net revenues $ 736,178 $ 827,735 $ 2,217,904 $ 1,805,592 Gross profit 154,710 187,272 486,656 387,966 Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries 10,817 18,866 (1,384 ) 4,259 Harsco's equity in income (loss) of Brand 3,105 5,770 (396 ) 1,021 The Company is required to make a quarterly payment to the Company's partner in the Infrastructure strategic venture, 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 $15 million per year after-tax), or (ii) in kind, through the transfer of approximately 2.5% of the Company's ownership interest in the Infrastructure strategic venture on an annual basis (the "unit adjustment liability"). The resulting liability is reflected in the caption, Unit adjustment liability, on the Company's Condensed Consolidated Balance Sheets. The Company will recognize the change in fair value to the unit adjustment liability each period until the Company is no longer required to make these payments or chooses not to make these payments. The change in fair value to the unit adjustment liability is a non-cash expense. For the three and nine months ended September 30, 2015 , the Company recognized $2.1 million and $6.5 million , respectively, of change in fair value to the unit adjustment liability, compared to $2.4 million and $7.4 million for the three and nine months ended September 30, 2014 , respectively. The Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014 include balances related to the unit adjustment liability of $83.5 million and $93.8 million , respectively, in the current and non-current captions, Unit adjustment liability. A reconciliation of beginning and ending balances related to the unit adjustment liability is included in Note 14, Derivative Instruments, Hedging Activities and Fair Value. The Company intends to make these quarterly payments in cash and will continue to evaluate the implications of making payments in cash or in kind based upon performance of the Infrastructure strategic venture. In the future, should the Company decide not to make the cash payment, the value of both the equity method investment in Brand and the related unit adjustment liability may be impacted, and the change may be reflected in earnings in that period. Balances related to transactions between the Company and Brand are as follows: (In thousands) September 30 December 31 Balances due from Brand $ 2,330 $ 1,860 Balances due to Brand 28,913 28,311 These balances between the Company and Brand relate primarily to the funding of certain transferred defined benefit pension plan obligations through 2018. There is not expected to be any significant level of revenue or expense between the Company and Brand on an ongoing basis once all aspects of the Infrastructure Transaction have been finalized. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consists of the following: (In thousands) September 30 December 31 Land $ 11,065 $ 15,721 Land improvements 15,408 15,898 Buildings and improvements 201,213 205,409 Machinery and equipment 1,725,312 1,861,965 Construction in progress 55,657 87,414 Gross property, plant and equipment 2,008,655 2,186,407 Less: Accumulated depreciation (1,424,948 ) (1,523,163 ) Property, plant and equipment, net $ 583,707 $ 663,244 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following table reflects the changes in carrying amounts of goodwill by segment for the nine months ended September 30, 2015 : (In thousands) Harsco Metals & Minerals Segment Harsco Industrial Segment Harsco Rail Segment Consolidated Totals Balance at December 31, 2014 $ 400,006 $ 6,839 $ 9,310 $ 416,155 Changes to goodwill (a) (493 ) — 3,489 2,996 Foreign currency translation (12,813 ) — — (12,813 ) Balance at September 30, 2015 $ 386,700 $ 6,839 $ 12,799 $ 406,338 (a) Changes to goodwill in the Harsco Rail Segment relate to the acquisitions of Protran and JK Rail. See Note 4, Acquisitions. In addition, the change to goodwill in the Harsco Metals & Minerals Segment relates to the allocation of goodwill associated with the sale of the Company's Pakistan-based chromium operations. The Company’s 2014 annual goodwill impairment testing did not result in any impairment of the Company’s goodwill. The fair value of the Harsco Metals & Minerals Segment exceeded the carrying value by approximately 10%. The Company tests for goodwill impairment annually or more frequently if indicators of impairment exist, or if a decision is made to dispose of a business. The Company performs the annual goodwill impairment test as of October 1 and monitors for triggering events on an ongoing basis. The Company determined that, as of September 30, 2015 , no interim goodwill impairment testing was necessary. There can be no assurance that the Company’s annual goodwill impairment testing will not result in a charge to earnings. Should the Company’s analysis continue to indicate degradation in the overall markets served by the Harsco Metals & Minerals Segment, impairment losses for associated assets could be required. Any impairment could result in the write-down of the carrying value of goodwill to its implied fair value. Intangible assets included in the captions, Other current assets and Intangible assets, net, on the Condensed Consolidated Balance Sheets consist of the following: September 30, 2015 December 31, 2014 (In thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer related $ 155,416 $ 111,256 $ 157,530 $ 112,211 Non-compete agreements 1,097 1,047 1,107 1,039 Patents 5,912 5,474 6,079 5,399 Technology related 25,743 22,589 26,548 21,233 Trade names 8,308 4,077 7,745 3,733 Other 8,794 4,545 7,420 4,290 Total $ 205,270 $ 148,988 $ 206,429 $ 147,905 Amortization expense for intangible assets was as follows: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Amortization expense for intangible assets $ 2,286 $ 2,398 $ 6,602 $ 7,544 The estimated amortization expense for the next five fiscal years based on current intangible assets is as follows: (In thousands) 2015 2016 2017 2018 2019 Estimated amortization expense (b) $ 9,000 $ 8,750 $ 6,000 $ 5,750 $ 5,500 (b) These estimated amortization expense amounts do not reflect the potential effect of future foreign currency exchange fluctuations. |
Debt and Credit Agreements
Debt and Credit Agreements | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt and Credit Agreements | Debt and Credit Agreements In March 2012, the Company entered into an Amended and Restated Five Year Credit Agreement (the "Credit Agreement") providing for $525 million of borrowing capacity through a syndicate of 14 banks. On March 27, 2015, the Company entered into Amendment No. 3 ("Amendment No. 3") to the Credit Agreement. Amendment No. 3 provides for (i) $500 million of borrowing capacity, which the Company may request be increased to $550 million pending lenders’ agreement, through a syndicate of 11 banks; (ii) extension of the current termination date for the Credit Agreement from March 2, 2017 to June 2, 2019 upon successful completion of refinancing the Company's 2.7% notes due October 15, 2015; (iii) replacement of the existing consolidated debt to consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") ratio with a net debt to consolidated EBITDA ratio not to exceed 3.75 to 1.0 through March 31, 2016 and 3.5 to 1.0 thereafter; and (iv) modification to certain defined terms. During the three months ended March 31, 2015, the Company expensed $0.6 million of previously deferred financing costs associated with the Credit Agreement for banks which did not participate in Amendment No. 3 to the Credit Agreement. At September 30, 2015 , the Company was in compliance with all debt covenants as the total net debt to consolidated EBITDA ratio was 2.7 to 1.0, the proportion of subsidiary consolidated indebtedness to consolidated tangible assets was 0.8% and total consolidated EBITDA to consolidated interest charges was 6.3 to 1.0. At September 30, 2015 and December 31, 2014, the Company had $100.0 million and $98.5 million , respectively, of Credit Agreement borrowings outstanding. At September 30, 2015 and December 31, 2014, all such balances were classified as long-term borrowings in the Condensed Consolidated Balance Sheets. Classification of such balances is based on the Company's ability and intent to repay such amounts over the subsequent twelve months, as well as reflects the Company's ability and intent to borrow for a period longer than a year. To the extent the Company expects to repay any amounts within the subsequent twelve months, the amounts are classified as short-term borrowings. At September 30, 2015 , the Company's 2.7% notes due October 15, 2015 are classified as long-term debt on the Condensed Consolidated Balance Sheet based on the Company's ability and intent to refinance this debt on a long-term basis. On October 15, 2015, the Company repaid the 2.7% notes due October 15, 2015 by utilizing borrowings under the Credit Agreement. There was no change to the Company's overall debt position as a result of the repayment and the Company remains in compliance with all debt covenants. The expiration of the Credit Agreement, per the terms of Amendment No. 3, is currently March 2, 2017. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Three Months Ended September 30 Defined Benefit Pension Plans Net Periodic Pension Cost U.S. Plans International Plans (In thousands) 2015 2014 2015 2014 Service cost $ 722 $ 558 $ 428 $ 394 Interest cost 3,089 3,217 9,146 11,024 Expected return on plan assets (4,203 ) (4,196 ) (12,630 ) (12,743 ) Recognized prior service costs 20 22 47 46 Recognized loss 1,230 838 4,244 3,596 Defined benefit pension plans net periodic pension cost $ 858 $ 439 $ 1,235 $ 2,317 Nine Months Ended September 30 Defined Benefit Pension Plans Net Periodic Pension Cost U.S. Plans International Plans (In thousands) 2015 2014 2015 2014 Service costs $ 2,167 $ 1,675 $ 1,320 $ 1,213 Interest cost 9,268 9,651 27,475 32,948 Expected return on plan assets (12,609 ) (12,590 ) (37,914 ) (38,039 ) Recognized prior service costs 60 68 144 138 Recognized loss 3,689 2,514 12,700 10,732 Amortization of transition liability — — — 56 Defined benefit pension plans net periodic pension cost $ 2,575 $ 1,318 $ 3,725 $ 7,048 Three Months Ended Nine Months Ended Company Contributions September 30 September 30 (In thousands) 2015 2014 2015 2014 Defined benefit pension plans: United States $ 567 $ 5,909 $ 1,841 $ 7,057 International 3,935 4,226 24,166 25,963 Multiemployer pension plans 570 667 1,876 2,334 Defined contribution pension plans 2,619 3,322 8,884 10,321 The Company's estimate of expected contributions to be paid during the remainder of 2015 for the U.S. and international defined benefit plans are $0.6 million and $4.2 million , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax expense related to continuing operations for the three and nine months ended September 30, 2015 was $7.0 million and $26.9 million , respectively, compared with $13.9 million and $24.1 million for the three and nine months ended September 30, 2014 , respectively. An income 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, based on technical merits, including resolutions of any related appeals or litigation processes. The unrecognized income tax benefit at September 30, 2015 was $7.4 million , including interest and penalties. During the current quarter, there was a decrease of $7.1 million in unrecognized income tax benefit resulting from the adjustment by a foreign tax authority as a result of a tax audit. The unrecognized income tax benefit was related to a net operating loss carryforward that carried a full valuation allowance. As a result, the related deferred tax asset was decreased by the same amount. Within the next twelve months, it is reasonably possible that up to $1.2 million of unrecognized income tax benefits will be recognized upon settlement of tax examinations and the expiration of various statutes of limitations. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental The Company is involved in a number of environmental remediation investigations and cleanups and, along with other companies, has been identified as a “potentially responsible party” for certain waste disposal sites. While each of these matters is subject to various uncertainties, it is probable that the Company will agree to make payments toward funding certain of these activities and it is possible that some of these matters will be decided unfavorably to the Company. The Company has evaluated its potential liability, and its financial exposure is dependent upon such factors as the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the allocation of cost among potentially responsible parties, the years of remedial activity required and the remediation methods selected. The Condensed Consolidated Balance Sheets at September 30, 2015 and December 31, 2014 include accruals in Other current liabilities of $1.3 million and $1.2 million , respectively, for environmental matters. The amounts charged against pre-tax income related to environmental matters totaled $0.3 million and $0.8 million for the three and nine months ended September 30, 2015 , respectively. The amounts charged against pre-tax income related to environmental matters totaled $0.4 million and $1.7 million for the three and nine months ended September 30, 2014 , respectively. The Company evaluates its liability for future environmental remediation costs on a quarterly basis. Although actual costs to be incurred at identified sites in future periods may vary from the estimates (given inherent uncertainties in evaluating environmental exposures), the Company does not expect that any costs that are reasonably possible to be incurred by the Company in connection with environmental matters in excess of the amounts accrued would have a material adverse effect on the Company's financial condition, results of operations or cash flows. Brazilian Tax Disputes The Company is involved in a number of tax disputes with federal, state and municipal tax authorities in Brazil. These disputes are at various stages of the legal process, including the administrative review phase and the collection action phase, and include assessments of fixed amounts of principal and penalties, plus interest charges that increase at statutorily determined amounts per month and are assessed on the aggregate amount of the principal and penalties. In addition, the losing party at the collection action or court of appeals phase could be subject to a charge to cover statutorily mandated legal fees, which are generally calculated as a percentage of the total assessed amounts due, inclusive of penalty and interest. A large number of the claims relate to value-added ("ICMS") services and social security ("INSS") tax disputes. The largest proportion of the assessed amounts relate to ICMS claims filed by the State Revenue Authorities 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 in relation to services provided to a customer in the State between January 2004 and May 2005. As of September 30, 2015 , the principal amount of the tax assessment from the SPRA with regard to this case was approximately $2 million , with penalty, interest and fees assessed to date increasing such amount by an additional $17 million . Any change in the aggregate amount since the Company’s last Annual Report on Form 10-K for the year ended December 31, 2014 , as revised in the Company's Current Report on Form 8-K filed on June 1, 2015, is due to an increase in assessed interest and statutorily mandated legal fees for the period 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. The aggregate amount assessed by the tax authorities in August 2005 was $6.2 million (the amounts with regard to this claim are valued as of the date of the assessment since it has not yet reached the collection phase), composed of a principal amount of $1.5 million , with penalty and interest assessed through that date increasing such amount by an additional $4.7 million . All such amounts include the effect of foreign currency translation. The Company continues to believe it is not probable that it will incur a loss for these assessments by the SPRA. The Company also continues to believe that sufficient coverage for these claims exists as a result of the Company’s customer’s indemnification obligations and such customer’s pledge of assets in connection with the October 2009 notice, as required by Brazilian procedure. The Company intends to continue its practice of vigorously defending itself against these tax claims under various alternatives, including judicial appeal. The Company will continue to evaluate its potential liability with regard to these claims on a quarterly basis; however, it is not possible to predict the ultimate outcome of these tax-related disputes in Brazil. No loss provision has been recorded in the Company's condensed consolidated financial statements for the disputes described above because the loss contingency is not deemed probable, and the Company does not expect that any costs that are reasonably possible to be incurred by the Company in connection with Brazilian tax disputes would have a material adverse effect on the Company's financial condition, results of operations or cash flows. Brazilian Labor Disputes The Company is subject to collective bargaining and individual labor claims in Brazil through the Harsco Metals & Minerals Segment which allege, among other things, the Company's failure to pay required amounts for overtime and vacation at certain sites. The Company is vigorously defending itself against these claims; however, litigation is inherently unpredictable, particularly in foreign jurisdictions. While the Company does not currently expect that the ultimate resolution of these claims will have a material adverse effect on the Company’s financial condition, results of operations or cash flows, it is not possible to predict the ultimate outcome of these labor-related disputes. The Company is continuing to review all known labor claims and as of September 30, 2015 and December 31, 2014 , the Company has established reserves of $7.3 million and $8.6 million , respectively, on the Company's Condensed Consolidated Balance Sheets for amounts considered to be probable and estimable. The decrease in the reserves is primarily attributable to foreign currency translation. As the Company continues to evaluate these claims and takes actions to address them, the amount of established reserves may be impacted. Customer Disputes The Company, through its Harsco Metals & Minerals Segment, provides services through long-term service contracts on a number of sites worldwide. As the Company has previously disclosed, a subcontractor at the site of a large customer in the Harsco Metals & Minerals Segment had filed arbitration against the Company, claiming that it was owed monetary damages from the Company in connection with its processing certain materials. Additionally, related to this matter, the Company has brought suit against its customer which the Company believed had responsibility for any damages. During the third quarter of 2015, all parties involved reached a binding settlement agreement. The Company recorded a charge of $4.2 million related to its obligations under the settlement agreement. The Company, through its Harsco Metals & Minerals Segment, may, in the normal course of business, become involved in commercial disputes with other subcontractors or customers. 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 or proceedings, 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. Other The Company is named as one of many defendants (approximately 90 or more in most cases) in legal actions in the United States alleging personal injury from exposure to airborne asbestos over the past several decades. In their suits, the plaintiffs have named as defendants, among others, many manufacturers, distributors and installers of numerous types of equipment or products that allegedly contained asbestos. The Company believes that the claims against it are without merit. The Company has never been a producer, manufacturer or processor of asbestos fibers. Any asbestos-containing part of a Company product used in the past was purchased from a supplier and the asbestos encapsulated in other materials such that airborne exposure, if it occurred, was not harmful and is not associated with the types of injuries alleged in the pending actions. At September 30, 2015 , there were 17,221 pending asbestos personal injury actions filed against the Company. Of those actions, 16,893 were filed in the New York Supreme Court (New York County), 125 were filed in other New York State Supreme Court Counties and 203 were filed in courts located in other states. The complaints in most of those actions generally follow a form that contains a standard damages demand of $20 million or $25 million , regardless of the individual plaintiff’s alleged medical condition, and without identifying any specific Company product. At September 30, 2015 , 16,759 of the actions filed in New York Supreme Court (New York County) were on the Deferred/Inactive Docket created by the court in December 2002 for all pending and future asbestos actions filed by persons who cannot demonstrate that they have a malignant condition or discernible physical impairment. The remaining 134 cases in New York County are pending on the Active or In Extremis Docket created for plaintiffs who can demonstrate a malignant condition or physical impairment. The Company has liability insurance coverage under various primary and excess policies that the Company believes will be available, if necessary, to substantially cover any liability that might ultimately be incurred in the asbestos actions referred to above. The Company believes that a substantial portion of 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 United States, the Company expects to continue to receive additional claims in the future. The Company intends to continue its practice of vigorously defending these claims and cases. At September 30, 2015 , the Company has obtained dismissal in 27,679 cases by stipulation or summary judgment prior to trial. It is not possible to predict the ultimate outcome of asbestos-related actions in the United States due to the unpredictable nature of this litigation, and no loss provision has been recorded in the Company's condensed consolidated financial statements because a loss contingency is not deemed probable or estimable. Despite this uncertainty, and although results of operations and cash flows for a given period could be adversely affected by asbestos-related actions, the Company does not expect that any costs that are reasonably possible to be incurred by the Company in connection with asbestos litigation would have a material adverse effect on the Company's financial condition, results of operations or cash flows. The Company is subject to various other claims and legal proceedings covering a wide range of matters that arose in the ordinary course of business. In the opinion of management, all such matters are adequately covered by insurance or by established reserves, and, if not so covered, are without merit or are of such kind, or involve such amounts, as would not have a material adverse effect on the financial condition, 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 event can be reasonably estimated. Insurance reserves have been estimated based primarily upon actuarial calculations and reflect the undiscounted estimated liabilities for ultimate losses, including claims incurred but not reported. Inherent in these estimates are assumptions that are based on the Company's history of claims and losses, a detailed analysis of existing claims with respect to potential value, and current legal and legislative trends. If actual claims differ from those projected by management, changes (either increases or decreases) to insurance reserves may be required and would be recorded through income in the period the change was determined. When a recognized liability is covered by third-party insurance, the Company records an insurance claim receivable to reflect the covered liability. Insurance claim receivables are included in Other receivables on the Company's Condensed Consolidated Balance Sheets. See Note 1, Summary of Significant Accounting Policies, to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 , as revised in the Company's Current Report on Form 8-K filed on June 1, 2015, for additional information on Accrued Insurance and Loss Reserves. |
Reconciliation of Basic and Dil
Reconciliation of Basic and Diluted Shares | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Shares | Reconciliation of Basic and Diluted Shares Three Months Ended Nine Months Ended September 30 September 30 (In thousands, except per share amounts) 2015 2014 2015 2014 Income (loss) from continuing operations attributable to Harsco Corporation common stockholders $ (8,254 ) $ 25,000 $ 13,719 $ 21,912 Weighted-average shares outstanding - basic 80,238 80,918 80,233 80,873 Dilutive effect of stock-based compensation — 181 130 220 Weighted-average shares outstanding - diluted $ 80,238 $ 81,099 $ 80,363 $ 81,093 Earnings (loss) from continuing operations per common share, attributable to Harsco Corporation common stockholders: Basic $ (0.10 ) $ 0.31 $ 0.17 $ 0.27 Diluted $ (0.10 ) $ 0.31 $ 0.17 $ 0.27 The following average outstanding stock-based compensation units were not included in the computation of diluted earnings (loss) per share because the effect was antidilutive: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Restricted stock units 441 — — 103 Stock options 90 200 101 210 Stock appreciation rights 1,265 372 1,156 453 Performance share units 322 136 265 78 |
Derivative Instruments, Hedging
Derivative Instruments, Hedging Activities and Fair Value | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments, Hedging Activities And Fair Value Disclosure [Abstract] | |
Derivative Instruments, Hedging Activities and Fair Value | Derivative Instruments, Hedging Activities and Fair Value Derivative Instruments and Hedging Activities The Company uses derivative instruments, including foreign currency forward exchange contracts, commodity contracts and cross-currency interest rate swaps, to manage certain foreign currency, commodity price and interest rate exposures. Derivative instruments are viewed as risk management tools by the Company and are not used for trading or speculative purposes. All derivative instruments are recorded on the Condensed Consolidated Balance Sheets at fair value. Changes in the fair value of derivatives used to hedge foreign currency denominated balance sheet items are reported directly in earnings, along with offsetting transaction gains and losses on the items being hedged. Derivatives used to hedge forecasted cash flows associated with foreign currency commitments or forecasted commodity purchases may be accounted for as cash flow hedges, as deemed appropriate, if the criteria for hedge accounting are met. Gains and losses on derivatives designated as cash flow hedges are deferred as a separate component of equity and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. Generally, at September 30, 2015 , these deferred gains and losses are reclassified to earnings over 10 to 15 years from the balance sheet date. The ineffective portion of all hedges, if any, is recognized currently in earnings. The fair values of outstanding derivative contracts recorded as assets and liabilities on the Condensed Consolidated Balance Sheets at September 30, 2015 and December 31, 2014 were as follows: Asset Derivatives Liability Derivatives (In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value September 30, 2015 Derivatives designated as hedging instruments: Foreign currency forward exchange contracts Other current assets $ 3,289 Other current liabilities $ 46 Cross-currency interest rate swaps Other assets 10,455 Other liabilities — Total derivatives designated as hedging instruments $ 13,744 $ 46 Derivatives not designated as hedging instruments : Foreign currency forward exchange contracts Other current assets $ 4,120 Other current liabilities $ 724 Asset Derivatives Liability Derivatives (In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value December 31, 2014 Derivatives designated as hedging instruments: Foreign currency forward exchange contracts Other current assets $ 420 Other current liabilities $ — Cross-currency interest rate swaps Other assets 52,989 Other liabilities 2,599 Total derivatives designated as hedging instruments $ 53,409 $ 2,599 Derivatives not designated as hedging instruments : Foreign currency forward exchange contracts Other current assets $ 4,065 Other current liabilities $ 4,618 All of the Company's derivatives are recorded in the Condensed Consolidated Balance Sheets at gross amounts and not offset. All of the Company's cross-currency interest rate swaps and certain foreign currency forward exchange contracts are transacted under International Swaps and Derivatives Association ("ISDA") documentation. Each ISDA master agreement permits the net settlement of amounts owed in the event of default. The Company's derivative assets and liabilities subject to enforceable master netting arrangements did not result in a net asset or net liability at either September 30, 2015 or December 31, 2014 . The effect of derivative instruments on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2015 and 2014 was as follows: Derivatives Designated as Hedging Instruments (In thousands) Amount of Gain (Loss) Recognized in Other Comprehensive Income (“OCI”) on Derivative - Effective Portion Location of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion Amount of Gain Reclassified from Accumulated OCI into Income - Effective Portion Location of Gain Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Amount of Loss Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Three Months Ended September 30, 2015: Foreign currency forward exchange contracts $ 2,517 Cost of services and products sold $ 78 $ — Cross-currency interest rate swaps 2,446 — Cost of services and products sold 13,087 (a) $ 4,963 $ 78 $ 13,087 Three Months Ended September 30, 2014: Foreign currency forward exchange contracts $ 77 $ — $ — Cross-currency interest rate swaps (863 ) — Cost of services and products sold 26,629 (a) $ (786 ) $ — $ 26,629 (In thousands) Amount of Gain (Loss)Recognized in Other Comprehensive Income (“OCI”) on Derivative - Effective Portion Location of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion Amount of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion Location of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Amount of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Nine Months Ended September 30, 2015: Foreign currency forward exchange contracts $ 2,851 Cost of services and products sold $ 80 $ — Cross currency interest rate swaps 8,531 — Cost of services and products sold 24,739 (a) $ 11,382 $ 80 $ 24,739 Nine Months Ended September 30, 2014: Foreign currency forward exchange contracts $ 97 Cost of services and products sold $ (3 ) $ — Cross currency interest rate swaps (3,418 ) — Cost of services and products sold 21,254 (a) $ (3,321 ) $ (3 ) $ 21,254 (a) These gains (losses) offset foreign currency fluctuation effects on the debt principal. Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivative Amount of Gain (Loss) Recognized in Income on Derivative for the Three Months Ended September 30 (a) (In thousands) 2015 2014 Foreign currency forward exchange contracts Cost of services and products sold $ 2,724 $ (1,126 ) Location of Gain (Loss) Recognized in Income on Derivative Amount of Gain (Loss) Recognized in Income on Derivative for the Nine Months Ended September 30 (a) (In thousands) 2015 2014 Foreign currency forward exchange contracts Cost of services and products sold $ (4,510 ) $ (704 ) (a) These gains (losses) offset amounts recognized in cost of services and products sold principally as a result of intercompany or third party foreign currency exposures. Foreign Currency Forward Exchange Contracts The 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 the functional currency. Foreign currency-denominated assets and liabilities are translated into U.S. dollars at the exchange rates existing at the respective balance sheet dates, and income and expense items are translated at the average exchange rates during the respective periods. The aggregate effects of translating the balance sheets of these subsidiaries are deferred and recorded in Accumulated other comprehensive loss, which is a separate component of equity. The Company uses derivative instruments to hedge cash flows related to foreign currency fluctuations. Foreign currency forward exchange contracts outstanding are part of a worldwide program to minimize foreign currency exchange operating income and balance sheet exposure by offsetting foreign currency exposures of certain future payments between the Company and various subsidiaries, suppliers or customers. These unsecured contracts are with major financial institutions. The Company may be exposed to credit loss in the event of non-performance by the contract counterparties. The Company evaluates the creditworthiness of the counterparties and does not expect default by them. Foreign currency forward exchange contracts are used to hedge commitments, such as foreign currency debt, 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 forward exchange contracts in U.S. dollars at September 30, 2015 and December 31, 2014 . The “Buy” amounts represent the U.S. dollar equivalent of commitments to purchase foreign currencies, and the “Sell” amounts represent the U.S. dollar equivalent of commitments to sell foreign currencies. The recognized gains and losses offset amounts recognized in cost of services and products sold principally as a result of intercompany or third party foreign currency exposures. Contracted Amounts of Foreign Currency Forward Exchange Contracts Outstanding at September 30, 2015 : (In thousands) Type U.S. Dollar Equivalent Maturity Recognized Gain (Loss) British pounds sterling Sell $ 73 October 2015 $ — British pounds sterling Buy 46,021 October 2015 961 Euros Sell 126,274 October 2015 through January 2016 (434 ) Euros Buy 198,565 October 2015 through April 2016 5,020 Other currencies Sell 50,164 October 2015 through May 2016 1,113 Other currencies Buy 15,487 October 2015 (21 ) Total $ 436,584 $ 6,639 Contracted Amounts of Foreign Currency Forward Exchange Contracts Outstanding at December 31, 2014 : (In thousands) Type U.S. Dollar Equivalent Maturity Recognized Gain (Loss) British pounds sterling Sell $ 37,943 January 2015 $ 179 British pounds sterling Buy 2,783 January 2015 (4 ) Euros Sell 193,370 January 2015 through March 2015 2,993 Euros Buy 194,084 January 2015 through March 2015 (3,767 ) Other currencies Sell 12,641 January 2015 through December 2015 439 Other currencies Buy 28,001 January 2015 through June 2015 27 Total $ 468,822 $ (133 ) In addition to foreign currency forward exchange contracts, the Company designates certain loans as hedges of net investments in international subsidiaries. The Company recorded pre-tax net losses of $2.2 million and pre-tax net gains of $2.4 million during the three and nine months ended September 30, 2015 , respectively, and pre-tax net gains of $15.1 million and $20.0 million during the three and nine months ended September 30, 2014 , respectively, into Accumulated other comprehensive loss . Cross-Currency Interest Rate Swaps The Company uses cross-currency interest rate swaps in conjunction with certain debt issuances in order to secure a fixed local currency interest rate. Under these cross-currency interest rate swaps, the Company receives 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 and the local currency, respectively. At maturity, there is also the payment of principal amounts between currencies. The cross-currency interest rate swaps are recorded on the Condensed Consolidated Balance 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 the caption, Accumulated other comprehensive loss. Changes in value attributed to the effect of foreign currency fluctuations are recorded in the Condensed Consolidated Statements of Operations and offset currency fluctuation effects on the debt principal. The following table indicates the contractual amounts of the Company's cross-currency interest rate swaps at September 30, 2015 : Interest Rates (In millions) Contractual Amount Receive Pay Maturing 2020 $ 220.0 Fixed U.S. dollar rate Fixed British pound sterling rate Maturing 2016 through 2017 7.1 Floating U.S. dollar rate Fixed rupee rate During August 2015, the Company effected the early termination of the euro cross-currency interest rate swap with an original maturity date of 2018. The Company received $75.1 million in cash related to this termination. There was no gain or loss recorded on the termination as any change in value attributable to the effect of foreign currency translation was previously recognized in the Condensed Consolidated Statements of Operations. Fair Value of Derivative Assets and Liabilities and Other Financial Instruments Fair 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 the measurement date (an exit price). The Company utilizes market data or assumptions that the Company believes market participants would use in valuing the asset 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 give the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • 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, including quoted 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 or corroborated 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 to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires 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 September 30, 2015 and December 31, 2014 : Level 2 Fair Value Measurements (In thousands) September 30 December 31 Assets Foreign currency forward exchange contracts $ 7,409 $ 4,485 Cross-currency interest rate swaps 10,455 52,989 Liabilities Foreign currency forward exchange contracts 770 4,618 Cross-currency interest rate swaps — 2,599 The following table reconciles the beginning and ending balances for liabilities measured on a recurring basis using unobservable inputs (Level 3) for the nine months ended September 30, 2015 and 2014 : Level 3 Liabilities—Unit Adjustment Liability (a) for the Nine Months Ended September 30 Nine Months Ended September 30 2015 2014 Balance at beginning of period $ 93,762 $ 106,343 Payments (16,740 ) (16,740 ) Change in fair value to the unit adjustment liability 6,492 7,417 Balance at end of period $ 83,514 $ 97,020 (a) See Note 6, Equity Method Investments, for additional information related to the unit adjustment liability. The Company primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs, such as forward rates, interest rates, the Company’s credit risk and counterparties’ credit risks, and which minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the ability to observe those inputs. Foreign currency forward exchange contracts and cross-currency interest rate swaps are classified as Level 2 fair value based upon pricing models using market-based inputs. Model inputs can be verified, and valuation techniques do not involve significant management judgment. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term borrowings approximate fair value due to the short-term maturities of these assets and liabilities. At September 30, 2015 and December 31, 2014 , the total fair value of long-term debt, including current maturities, was $841.1 million and $885.0 million , respectively, compared with a carrying value of $844.3 million and $854.9 million , respectively. Fair values 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 same remaining maturities. |
Review of Operations by Segment
Review of Operations by Segment | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Review of Operations by Segment | Review of Operations by Segment Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Revenues From Continuing Operations Harsco Metals & Minerals $ 277,367 $ 347,625 $ 862,901 $ 1,062,208 Harsco Industrial 91,199 105,591 281,883 310,696 Harsco Rail 59,768 73,161 190,876 201,300 Total revenues from continuing operations $ 428,334 $ 526,377 $ 1,335,660 $ 1,574,204 Operating Income (Loss) From Continuing Operations Harsco Metals & Minerals $ (3,331 ) $ 27,058 $ 25,851 $ 42,430 Harsco Industrial 13,934 15,955 45,380 49,955 Harsco Rail 7,786 13,976 40,819 33,001 Corporate (10,661 ) (8,545 ) (29,712 ) (36,021 ) Total operating income from continuing operations $ 7,728 $ 48,444 $ 82,338 $ 89,365 Depreciation and Amortization Harsco Metals & Minerals $ 34,636 $ 39,398 $ 104,368 $ 121,488 Harsco Industrial 1,855 1,168 4,507 3,712 Harsco Rail 1,476 1,387 4,670 4,135 Corporate 1,799 1,460 5,801 4,457 Total Depreciation and Amortization $ 39,766 $ 43,413 $ 119,346 $ 133,792 Capital Expenditures Harsco Metals & Minerals $ 23,205 $ 41,635 $ 72,748 $ 119,977 Harsco Industrial 3,662 4,392 12,467 5,867 Harsco Rail 374 583 1,599 2,549 Corporate 1,096 6,064 4,769 6,777 Total Capital Expenditures $ 28,337 $ 52,674 $ 91,583 $ 135,170 Reconciliation of Segment Operating Income to Income (Loss) From Continuing Operations Before Income Taxes and Equity Income (Loss) Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Segment operating income $ 18,389 $ 56,989 $ 112,050 $ 125,386 General Corporate expense (10,661 ) (8,545 ) (29,712 ) (36,021 ) Operating income from continuing operations 7,728 48,444 82,338 89,365 Interest income 264 555 951 1,262 Interest expense (11,110 ) (11,949 ) (34,812 ) (35,328 ) Change in fair value to unit adjustment liability (2,083 ) (2,398 ) (6,492 ) (7,417 ) Income (loss) from continuing operations before income taxes and equity income (loss) $ (5,201 ) $ 34,652 $ 41,985 $ 47,882 |
Other Expenses
Other Expenses | 9 Months Ended |
Sep. 30, 2015 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expenses | Other Expenses This Condensed Consolidated Statements of Operations caption includes certain foreign currency gains, net gains on disposal of non-core assets, restructuring program costs, impaired asset write-downs, employee termination benefit costs and costs to exit activities. Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Restructuring programs (see Note 18) $ — $ 276 $ — $ 8,815 Net gains (a) (1,747 ) (1,219 ) (8,479 ) (4,227 ) Foreign currency gains related to Harsco Rail Segment advances on contracts — — (10,940 ) — Bahrain salt cake disposal 7,000 — 7,000 — Subcontractor settlement (see Note 12) 4,220 — 4,220 — Impaired asset write-downs 731 590 731 14,670 Other (b) 7,188 866 11,297 8,115 Other expenses $ 17,392 $ 513 $ 3,829 $ 27,373 (a) Net gains result from the sales of redundant properties (primarily land, buildings and related equipment) and non-core assets. (b) Other includes employee termination benefit costs and costs to exit activities that are not directly related to the restructuring programs detailed in Note 18, Restructuring Programs. In 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 this change in policy, the Swiss franc experienced significant appreciation against the euro. During the three months ended March 31, 2015, the Company recognized $10.9 million in foreign currency gains primarily related to converting Swiss franc bank deposits to euros. This gain was associated with advances received for the Harsco Rail Segment's two contracts with the federal railway system of Switzerland. Over the past several years the Company has been in discussions with officials at the Supreme Council for Environment in Bahrain with regard to a processing by-product ("salt cakes") located at Hafeera. During the third quarter of 2015, the Company completed the assessment of options available for processing or removing the salt cakes. As a result, the Company has entered 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 strategic venture partner has a 35% minority interest. Accordingly, the net impact of the charge to the Company's Net income (loss) attributable to Harsco Corporation was $4.6 million . |
Components of Accumulated Other
Components of Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss | Components of Accumulated Other Comprehensive Loss Accumulated other comprehensive loss is included on the Condensed Consolidated Statements of Equity. The components of Accumulated other comprehensive loss, net of the effect of income taxes, and activity for the nine months ended September 30, 2014 and 2015 was as follows: Components of Accumulated Other Comprehensive Income (Loss) - Net of Tax (In thousands) Cumulative Foreign Exchange Translation Adjustments Effective Portion of Derivatives Designated as Hedging Instruments Cumulative Unrecognized Actuarial Losses on Pension Obligations Unrealized Loss on Marketable Securities Total Balance at December 31, 2013 $ 6,110 $ (7,023 ) $ (369,682 ) $ (20 ) $ (370,615 ) Other comprehensive income (loss) before reclassifications (13,650 ) (a) (3,114 ) (b) 5,878 (a) 6 (10,880 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 3 12,377 — 12,380 Other comprehensive income (loss) from equity method investee (1,511 ) — 632 — (879 ) Amounts reclassified from accumulated other comprehensive loss in connection with the Infrastructure Transaction (1,447 ) — — — (1,447 ) Total other comprehensive income (loss) (16,608 ) (3,111 ) 18,887 6 (826 ) Less: Other comprehensive (income) loss attributable to noncontrolling interests 1,088 (19 ) — — 1,069 Other comprehensive income (loss) attributable to Harsco Corporation (15,520 ) (3,130 ) 18,887 6 243 Balance at September 30, 2014 $ (9,410 ) $ (10,153 ) $ (350,795 ) $ (14 ) $ (370,372 ) Components of Accumulated Other Comprehensive Income (Loss) - Net of Tax (In thousands) Cumulative Foreign Exchange Translation Adjustments Effective Portion of Derivatives Designated as Hedging Instruments Cumulative Unrecognized Actuarial Losses on Pension Obligations Unrealized Loss on Marketable Securities Total Balance at December 31, 2014 $ (39,938 ) $ (9,025 ) $ (483,278 ) $ (15 ) $ (532,256 ) Other comprehensive income (loss) before reclassifications (61,537 ) (a) 10,801 (b) 12,012 (a) (12 ) (38,736 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 52 15,188 — 15,240 Other comprehensive income (loss) from equity method investee (13,134 ) (808 ) 596 — (13,346 ) Total other comprehensive income (loss) (74,671 ) 10,045 27,796 (12 ) (36,842 ) Less: Other comprehensive loss attributable to noncontrolling interests 2,187 8 — — 2,195 Other comprehensive income (loss) attributable to Harsco Corporation (72,484 ) 10,053 27,796 (12 ) (34,647 ) Balance at September 30, 2015 $ (112,422 ) $ 1,028 $ (455,482 ) $ (27 ) $ (566,903 ) (a) Principally foreign currency fluctuation. (b) Net change from periodic revaluations. Amounts reclassified from accumulated other comprehensive loss are as follows: (In thousands) Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Affected Caption in the Condensed Consolidated Statements of Operations September 30 September 30 September 30 September 30 Amortization of defined benefit pension items: Actuarial losses (c) $ 4,000 $ 11,942 $ 2,900 $ 8,576 Selling, general and administrative expenses Actuarial losses (c) 1,473 4,447 1,534 4,670 Cost of services and products sold Prior-service costs (c) 31 93 24 70 Selling, general and administrative expenses Prior-service costs (c) 36 111 45 136 Cost of services and products sold Total before tax 5,540 16,593 4,503 13,452 Tax benefit (466 ) (1,405 ) (357 ) (1,075 ) Total reclassification of defined benefit pension items, net of tax $ 5,074 $ 15,188 $ 4,146 $ 12,377 Amortization of cash flow hedging instruments (c) : Foreign currency forward exchange contracts $ 78 $ 80 $ 2 $ 4 Cost of services and products sold Tax benefit (28 ) (28 ) — (1 ) Total reclassification of cash flow hedging instruments $ 50 $ 52 $ 2 $ 3 (c) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See Note 10, Employee Benefit Plans, for additional details. |
Restructuring Programs
Restructuring Programs | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Programs | Restructuring Programs In recent years, the Company has instituted restructuring programs to balance short-term profitability goals with long-term strategies. A primary objective of these programs has been to establish platforms upon which the affected businesses can grow with reduced fixed investment and generate annual operating expense savings. The restructuring programs have been instituted in response to the continuing impact of global financial and economic uncertainty on the Company’s end markets. Restructuring costs incurred in these programs were recorded as part of the caption, Other expenses, of the Condensed Consolidated Statements of Operations. The timing of associated cash payments is dependent on the type of restructuring cost and can extend over a multi-year period. Project Orion Under the Harsco Metals & Minerals Segment Improvement Plan ("Project Orion"), the Harsco Metals & Minerals Segment made organizational and process improvement changes that are expected to improve return on capital and deliver a higher and more consistent level of service to customers. These changes include improving several core processes and simplifying the organizational structure. Annual recurring benefits under Project Orion are expected to be approximately $37 million . The restructuring accrual for Project Orion at September 30, 2015 and the activity for the nine months ended September 30, 2015 were as follows: (In thousands) Accrual at December 31 2014 Other Adjustments Cash Expenditures Foreign Currency Translation Accrual at September 30 2015 Employee termination benefit costs $ 7,668 $ (1,003 ) $ (3,930 ) $ (85 ) $ 2,650 Total $ 7,668 $ (1,003 ) $ (3,930 ) $ (85 ) $ 2,650 The remaining accrual related to Project Orion is expected to paid, principally, through 2015 with the remainder in the first half of 2016. Prior Restructuring Programs The remaining accrual for prior restructuring programs was $2.0 million and $2.4 million at September 30, 2015 and December 31, 2014 , respectively. The remaining accrual relates primarily to exit activity costs for lease terminations expected to be paid over the remaining life of the leases. |
Revised Financial Statements (T
Revised Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The impact of revising the Company’s Condensed Consolidated Balance Sheets, Condensed Statements of Operations and Condensed Consolidated Statements of Cash Flows for all periods presented are as follows: December 31, 2014 (In thousands) As Previously Reported Revision As Revised ASSETS Inventories $ 177,265 $ 1,657 $ 178,922 Total current assets 681,822 1,657 683,479 Other assets 155,551 3,769 159,320 Total assets 2,263,801 5,426 2,269,227 LIABILITIES Other liabilities $ 25,849 $ 11,850 $ 37,699 Total liabilities 1,905,467 11,850 1,917,317 HARSCO CORPORATION STOCKHOLDERS’ EQUITY Accumulated other comprehensive loss $ (532,491 ) $ 235 $ (532,256 ) Retained earnings 1,290,208 (6,659 ) 1,283,549 Total Harsco Corporation stockholders’ equity 314,012 (6,424 ) 307,588 Total equity 358,334 (6,424 ) 351,910 Total liabilities and equity 2,263,801 5,426 2,269,227 Three Months Ended September 30, 2014 (In thousands, except per share amounts) As Previously Reported Revision As Revised Costs and expenses from continuing operations: Cost of services sold $ 285,098 $ (2,191 ) $ 282,907 Selling, general and administrative expenses 68,289 (515 ) 67,774 Total costs and expenses 480,639 (2,706 ) 477,933 Operating income from continuing operations $ 45,738 $ 2,706 $ 48,444 Income from continuing operations before income taxes and equity income 31,946 2,706 34,652 Income tax expense (11,671 ) (2,254 ) (13,925 ) Equity in income of unconsolidated entities, net 5,295 510 5,805 Income from continuing operations 25,570 962 26,532 Net income 25,167 962 26,129 Net income attributable to Harsco Corporation 23,635 962 24,597 Amounts attributable to Harsco Corporation common stockholders: Income from continuing operations, net of tax $ 24,038 $ 962 $ 25,000 Net income attributable to Harsco Corporation common stockholders 23,635 962 24,597 Basic income per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.30 $ 0.01 $ 0.31 Basic income per share attributable to Harsco Corporation common stockholders 0.29 0.01 0.30 Diluted income per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.30 $ 0.01 $ 0.31 Diluted income per share attributable to Harsco Corporation common stockholders 0.29 0.01 0.30 Nine Months Ended September 30, 2014 (In thousands, except per share amounts) As Previously Reported Revision As Revised Revenues from continuing operations: Service revenues $ 1,054,040 $ 551 $ 1,054,591 Total revenues 1,573,653 551 1,574,204 Costs and expenses from continuing operations: Cost of services sold $ 875,898 $ (2,151 ) $ 873,747 Selling, general and administrative expenses 213,052 (515 ) 212,537 Research and development expenses 5,456 (881 ) 4,575 Loss on disposal of the Harsco Infrastructure Segment and transaction costs 5,607 (954 ) 4,653 Total costs and expenses 1,489,340 (4,501 ) 1,484,839 Operating income from continuing operations $ 84,313 $ 5,052 $ 89,365 Income from continuing operations before income taxes and equity income 42,830 5,052 47,882 Income tax expense (20,424 ) (3,655 ) (24,079 ) Income from continuing operations 23,463 1,397 24,860 Net income 23,747 1,397 25,144 Net income attributable to Harsco Corporation 20,799 1,397 22,196 Amounts attributable to Harsco Corporation common stockholders: Income from continuing operations, net of tax $ 20,515 $ 1,397 $ 21,912 Net income attributable to Harsco Corporation common stockholders 20,799 1,397 22,196 Basic income per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.25 $ 0.02 $ 0.27 Basic income per share attributable to Harsco Corporation common stockholders 0.26 0.01 0.27 Diluted earnings per common share attributable to Harsco Corporation common stockholders: Continuing operations $ 0.25 $ 0.02 $ 0.27 Diluted income per share attributable to Harsco Corporation common stockholders 0.26 0.01 0.27 Nine Months Ended September 30, 2014 (In thousands) As Previously Reported Revision As Revised Net cash provided (used) by: Operating activities $ 184,409 $ 881 $ 185,290 Investing activities (149,948 ) (881 ) (150,829 ) |
Accounts Receivable and Inven28
Accounts Receivable and Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounts Receivable And Inventories | |
Schedule of accounts receivable | Accounts receivable consist of the following: (In thousands) September 30 December 31 Trade accounts receivable $ 322,751 $ 340,223 Less: Allowance for doubtful accounts (24,516 ) (15,119 ) Trade accounts receivable, net $ 298,235 $ 325,104 Other receivables (a) $ 23,293 $ 28,145 (a) Other receivables include insurance claim receivables, employee receivables, tax claim receivables, receivables from affiliates and other miscellaneous receivables not included in Trade accounts receivable, net. |
Schedule of provision for doubtful accounts related to trade accounts receivable | The provision for doubtful accounts related to trade accounts receivable was as follows: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Provision for doubtful accounts related to trade accounts receivable $ 10,005 $ (170 ) $ 10,615 $ 7,176 |
Schedule of inventories | Inventories consist of the following: (In thousands) September 30 December 31 Finished goods $ 35,898 $ 30,525 Work-in-process 69,938 28,690 Raw materials and purchased parts 75,927 87,985 Stores and supplies 28,533 31,722 Inventories $ 210,296 $ 178,922 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Brand's results of operations for the three months ended June 30, 2015 and 2014 and the nine months ended June 30, 2015 and the period from November 27, 2013 through June 30, 2014, are summarized as follows: (In thousands) Three Months Ended June 30 2015 Three Months Ended June 30 2014 Nine Months Ended June 30 2015 Period From November 27 2013 Through June 30 2014 Summarized Statement of Operations Information of Brand: Net revenues $ 736,178 $ 827,735 $ 2,217,904 $ 1,805,592 Gross profit 154,710 187,272 486,656 387,966 Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries 10,817 18,866 (1,384 ) 4,259 Harsco's equity in income (loss) of Brand 3,105 5,770 (396 ) 1,021 |
Schedule of Related Party Transactions | Balances related to transactions between the Company and Brand are as follows: (In thousands) September 30 December 31 Balances due from Brand $ 2,330 $ 1,860 Balances due to Brand 28,913 28,311 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Property, plant and equipment consists of the following: (In thousands) September 30 December 31 Land $ 11,065 $ 15,721 Land improvements 15,408 15,898 Buildings and improvements 201,213 205,409 Machinery and equipment 1,725,312 1,861,965 Construction in progress 55,657 87,414 Gross property, plant and equipment 2,008,655 2,186,407 Less: Accumulated depreciation (1,424,948 ) (1,523,163 ) Property, plant and equipment, net $ 583,707 $ 663,244 |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amounts of goodwill by segment | The following table reflects the changes in carrying amounts of goodwill by segment for the nine months ended September 30, 2015 : (In thousands) Harsco Metals & Minerals Segment Harsco Industrial Segment Harsco Rail Segment Consolidated Totals Balance at December 31, 2014 $ 400,006 $ 6,839 $ 9,310 $ 416,155 Changes to goodwill (a) (493 ) — 3,489 2,996 Foreign currency translation (12,813 ) — — (12,813 ) Balance at September 30, 2015 $ 386,700 $ 6,839 $ 12,799 $ 406,338 (a) Changes to goodwill in the Harsco Rail Segment relate to the acquisitions of Protran and JK Rail. See Note 4, Acquisitions. In addition, the change to goodwill in the Harsco Metals & Minerals Segment relates to the allocation of goodwill associated with the sale of the Company's Pakistan-based chromium operations. |
Schedule of intangible assets by class | Intangible assets included in the captions, Other current assets and Intangible assets, net, on the Condensed Consolidated Balance Sheets consist of the following: September 30, 2015 December 31, 2014 (In thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer related $ 155,416 $ 111,256 $ 157,530 $ 112,211 Non-compete agreements 1,097 1,047 1,107 1,039 Patents 5,912 5,474 6,079 5,399 Technology related 25,743 22,589 26,548 21,233 Trade names 8,308 4,077 7,745 3,733 Other 8,794 4,545 7,420 4,290 Total $ 205,270 $ 148,988 $ 206,429 $ 147,905 |
Schedule of amortization expense | Amortization expense for intangible assets was as follows: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Amortization expense for intangible assets $ 2,286 $ 2,398 $ 6,602 $ 7,544 |
Schedule of estimated amortization expense | The estimated amortization expense for the next five fiscal years based on current intangible assets is as follows: (In thousands) 2015 2016 2017 2018 2019 Estimated amortization expense (b) $ 9,000 $ 8,750 $ 6,000 $ 5,750 $ 5,500 (b) These estimated amortization expense amounts do not reflect the potential effect of future foreign currency exchange fluctuations. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of net benefit costs | Three Months Ended September 30 Defined Benefit Pension Plans Net Periodic Pension Cost U.S. Plans International Plans (In thousands) 2015 2014 2015 2014 Service cost $ 722 $ 558 $ 428 $ 394 Interest cost 3,089 3,217 9,146 11,024 Expected return on plan assets (4,203 ) (4,196 ) (12,630 ) (12,743 ) Recognized prior service costs 20 22 47 46 Recognized loss 1,230 838 4,244 3,596 Defined benefit pension plans net periodic pension cost $ 858 $ 439 $ 1,235 $ 2,317 Nine Months Ended September 30 Defined Benefit Pension Plans Net Periodic Pension Cost U.S. Plans International Plans (In thousands) 2015 2014 2015 2014 Service costs $ 2,167 $ 1,675 $ 1,320 $ 1,213 Interest cost 9,268 9,651 27,475 32,948 Expected return on plan assets (12,609 ) (12,590 ) (37,914 ) (38,039 ) Recognized prior service costs 60 68 144 138 Recognized loss 3,689 2,514 12,700 10,732 Amortization of transition liability — — — 56 Defined benefit pension plans net periodic pension cost $ 2,575 $ 1,318 $ 3,725 $ 7,048 |
Schedule of contributions to pension plans | Three Months Ended Nine Months Ended Company Contributions September 30 September 30 (In thousands) 2015 2014 2015 2014 Defined benefit pension plans: United States $ 567 $ 5,909 $ 1,841 $ 7,057 International 3,935 4,226 24,166 25,963 Multiemployer pension plans 570 667 1,876 2,334 Defined contribution pension plans 2,619 3,322 8,884 10,321 |
Reconciliation of Basic and D33
Reconciliation of Basic and Diluted Shares (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted shares | Three Months Ended Nine Months Ended September 30 September 30 (In thousands, except per share amounts) 2015 2014 2015 2014 Income (loss) from continuing operations attributable to Harsco Corporation common stockholders $ (8,254 ) $ 25,000 $ 13,719 $ 21,912 Weighted-average shares outstanding - basic 80,238 80,918 80,233 80,873 Dilutive effect of stock-based compensation — 181 130 220 Weighted-average shares outstanding - diluted $ 80,238 $ 81,099 $ 80,363 $ 81,093 Earnings (loss) from continuing operations per common share, attributable to Harsco Corporation common stockholders: Basic $ (0.10 ) $ 0.31 $ 0.17 $ 0.27 Diluted $ (0.10 ) $ 0.31 $ 0.17 $ 0.27 |
Schedule of antidilutive securities excluded from computation of earnings per share | The following average outstanding stock-based compensation units were not included in the computation of diluted earnings (loss) per share because the effect was antidilutive: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Restricted stock units 441 — — 103 Stock options 90 200 101 210 Stock appreciation rights 1,265 372 1,156 453 Performance share units 322 136 265 78 |
Derivative Instruments, Hedgi34
Derivative Instruments, Hedging Activities and Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments, Hedging Activities And Fair Value Disclosure [Abstract] | |
Schedule of fair value of outstanding derivative contracts | The fair values of outstanding derivative contracts recorded as assets and liabilities on the Condensed Consolidated Balance Sheets at September 30, 2015 and December 31, 2014 were as follows: Asset Derivatives Liability Derivatives (In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value September 30, 2015 Derivatives designated as hedging instruments: Foreign currency forward exchange contracts Other current assets $ 3,289 Other current liabilities $ 46 Cross-currency interest rate swaps Other assets 10,455 Other liabilities — Total derivatives designated as hedging instruments $ 13,744 $ 46 Derivatives not designated as hedging instruments : Foreign currency forward exchange contracts Other current assets $ 4,120 Other current liabilities $ 724 Asset Derivatives Liability Derivatives (In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value December 31, 2014 Derivatives designated as hedging instruments: Foreign currency forward exchange contracts Other current assets $ 420 Other current liabilities $ — Cross-currency interest rate swaps Other assets 52,989 Other liabilities 2,599 Total derivatives designated as hedging instruments $ 53,409 $ 2,599 Derivatives not designated as hedging instruments : Foreign currency forward exchange contracts Other current assets $ 4,065 Other current liabilities $ 4,618 |
Schedule of effect of derivative instruments | The effect of derivative instruments on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2015 and 2014 was as follows: Derivatives Designated as Hedging Instruments (In thousands) Amount of Gain (Loss) Recognized in Other Comprehensive Income (“OCI”) on Derivative - Effective Portion Location of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion Amount of Gain Reclassified from Accumulated OCI into Income - Effective Portion Location of Gain Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Amount of Loss Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Three Months Ended September 30, 2015: Foreign currency forward exchange contracts $ 2,517 Cost of services and products sold $ 78 $ — Cross-currency interest rate swaps 2,446 — Cost of services and products sold 13,087 (a) $ 4,963 $ 78 $ 13,087 Three Months Ended September 30, 2014: Foreign currency forward exchange contracts $ 77 $ — $ — Cross-currency interest rate swaps (863 ) — Cost of services and products sold 26,629 (a) $ (786 ) $ — $ 26,629 (In thousands) Amount of Gain (Loss)Recognized in Other Comprehensive Income (“OCI”) on Derivative - Effective Portion Location of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion Amount of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion Location of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Amount of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Nine Months Ended September 30, 2015: Foreign currency forward exchange contracts $ 2,851 Cost of services and products sold $ 80 $ — Cross currency interest rate swaps 8,531 — Cost of services and products sold 24,739 (a) $ 11,382 $ 80 $ 24,739 Nine Months Ended September 30, 2014: Foreign currency forward exchange contracts $ 97 Cost of services and products sold $ (3 ) $ — Cross currency interest rate swaps (3,418 ) — Cost of services and products sold 21,254 (a) $ (3,321 ) $ (3 ) $ 21,254 (a) These gains (losses) offset foreign currency fluctuation effects on the debt principal. Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivative Amount of Gain (Loss) Recognized in Income on Derivative for the Three Months Ended September 30 (a) (In thousands) 2015 2014 Foreign currency forward exchange contracts Cost of services and products sold $ 2,724 $ (1,126 ) Location of Gain (Loss) Recognized in Income on Derivative Amount of Gain (Loss) Recognized in Income on Derivative for the Nine Months Ended September 30 (a) (In thousands) 2015 2014 Foreign currency forward exchange contracts Cost of services and products sold $ (4,510 ) $ (704 ) (a) These gains (losses) offset amounts recognized in cost of services and products sold principally as a result of intercompany or third party foreign currency exposures. |
Summary of notional amount of foreign currency exchange contracts and cross-currency interest rate swaps | The following table indicates the contractual amounts of the Company's cross-currency interest rate swaps at September 30, 2015 : Interest Rates (In millions) Contractual Amount Receive Pay Maturing 2020 $ 220.0 Fixed U.S. dollar rate Fixed British pound sterling rate Maturing 2016 through 2017 7.1 Floating U.S. dollar rate Fixed rupee rate The following tables summarize, by major currency, the contractual amounts of the Company’s foreign currency forward exchange contracts in U.S. dollars at September 30, 2015 and December 31, 2014 . The “Buy” amounts represent the U.S. dollar equivalent of commitments to purchase foreign currencies, and the “Sell” amounts represent the U.S. dollar equivalent of commitments to sell foreign currencies. The recognized gains and losses offset amounts recognized in cost of services and products sold principally as a result of intercompany or third party foreign currency exposures. Contracted Amounts of Foreign Currency Forward Exchange Contracts Outstanding at September 30, 2015 : (In thousands) Type U.S. Dollar Equivalent Maturity Recognized Gain (Loss) British pounds sterling Sell $ 73 October 2015 $ — British pounds sterling Buy 46,021 October 2015 961 Euros Sell 126,274 October 2015 through January 2016 (434 ) Euros Buy 198,565 October 2015 through April 2016 5,020 Other currencies Sell 50,164 October 2015 through May 2016 1,113 Other currencies Buy 15,487 October 2015 (21 ) Total $ 436,584 $ 6,639 Contracted Amounts of Foreign Currency Forward Exchange Contracts Outstanding at December 31, 2014 : (In thousands) Type U.S. Dollar Equivalent Maturity Recognized Gain (Loss) British pounds sterling Sell $ 37,943 January 2015 $ 179 British pounds sterling Buy 2,783 January 2015 (4 ) Euros Sell 193,370 January 2015 through March 2015 2,993 Euros Buy 194,084 January 2015 through March 2015 (3,767 ) Other currencies Sell 12,641 January 2015 through December 2015 439 Other currencies Buy 28,001 January 2015 through June 2015 27 Total $ 468,822 $ (133 ) |
Schedule of fair value of financial instruments | The following table indicates the fair value hierarchy of the financial instruments of the Company at September 30, 2015 and December 31, 2014 : Level 2 Fair Value Measurements (In thousands) September 30 December 31 Assets Foreign currency forward exchange contracts $ 7,409 $ 4,485 Cross-currency interest rate swaps 10,455 52,989 Liabilities Foreign currency forward exchange contracts 770 4,618 Cross-currency interest rate swaps — 2,599 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table reconciles the beginning and ending balances for liabilities measured on a recurring basis using unobservable inputs (Level 3) for the nine months ended September 30, 2015 and 2014 : Level 3 Liabilities—Unit Adjustment Liability (a) for the Nine Months Ended September 30 Nine Months Ended September 30 2015 2014 Balance at beginning of period $ 93,762 $ 106,343 Payments (16,740 ) (16,740 ) Change in fair value to the unit adjustment liability 6,492 7,417 Balance at end of period $ 83,514 $ 97,020 (a) See Note 6, Equity Method Investments, for additional information related to the unit adjustment liability. |
Review of Operations by Segme35
Review of Operations by Segment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of operations by segment | Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Revenues From Continuing Operations Harsco Metals & Minerals $ 277,367 $ 347,625 $ 862,901 $ 1,062,208 Harsco Industrial 91,199 105,591 281,883 310,696 Harsco Rail 59,768 73,161 190,876 201,300 Total revenues from continuing operations $ 428,334 $ 526,377 $ 1,335,660 $ 1,574,204 Operating Income (Loss) From Continuing Operations Harsco Metals & Minerals $ (3,331 ) $ 27,058 $ 25,851 $ 42,430 Harsco Industrial 13,934 15,955 45,380 49,955 Harsco Rail 7,786 13,976 40,819 33,001 Corporate (10,661 ) (8,545 ) (29,712 ) (36,021 ) Total operating income from continuing operations $ 7,728 $ 48,444 $ 82,338 $ 89,365 Depreciation and Amortization Harsco Metals & Minerals $ 34,636 $ 39,398 $ 104,368 $ 121,488 Harsco Industrial 1,855 1,168 4,507 3,712 Harsco Rail 1,476 1,387 4,670 4,135 Corporate 1,799 1,460 5,801 4,457 Total Depreciation and Amortization $ 39,766 $ 43,413 $ 119,346 $ 133,792 Capital Expenditures Harsco Metals & Minerals $ 23,205 $ 41,635 $ 72,748 $ 119,977 Harsco Industrial 3,662 4,392 12,467 5,867 Harsco Rail 374 583 1,599 2,549 Corporate 1,096 6,064 4,769 6,777 Total Capital Expenditures $ 28,337 $ 52,674 $ 91,583 $ 135,170 |
Reconciliation of segment operating income to income from continuing operations before income taxes and equity income | Reconciliation of Segment Operating Income to Income (Loss) From Continuing Operations Before Income Taxes and Equity Income (Loss) Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Segment operating income $ 18,389 $ 56,989 $ 112,050 $ 125,386 General Corporate expense (10,661 ) (8,545 ) (29,712 ) (36,021 ) Operating income from continuing operations 7,728 48,444 82,338 89,365 Interest income 264 555 951 1,262 Interest expense (11,110 ) (11,949 ) (34,812 ) (35,328 ) Change in fair value to unit adjustment liability (2,083 ) (2,398 ) (6,492 ) (7,417 ) Income (loss) from continuing operations before income taxes and equity income (loss) $ (5,201 ) $ 34,652 $ 41,985 $ 47,882 |
Other Expenses (Tables)
Other Expenses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Income and Expenses [Abstract] | |
Schedule of other expenses | This Condensed Consolidated Statements of Operations caption includes certain foreign currency gains, net gains on disposal of non-core assets, restructuring program costs, impaired asset write-downs, employee termination benefit costs and costs to exit activities. Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2015 2014 2015 2014 Restructuring programs (see Note 18) $ — $ 276 $ — $ 8,815 Net gains (a) (1,747 ) (1,219 ) (8,479 ) (4,227 ) Foreign currency gains related to Harsco Rail Segment advances on contracts — — (10,940 ) — Bahrain salt cake disposal 7,000 — 7,000 — Subcontractor settlement (see Note 12) 4,220 — 4,220 — Impaired asset write-downs 731 590 731 14,670 Other (b) 7,188 866 11,297 8,115 Other expenses $ 17,392 $ 513 $ 3,829 $ 27,373 (a) Net gains result from the sales of redundant properties (primarily land, buildings and related equipment) and non-core assets. (b) Other includes employee termination benefit costs and costs to exit activities that are not directly related to the restructuring programs detailed in Note 18, Restructuring Programs. |
Components of Accumulated Oth37
Components of Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of Accumulated other comprehensive loss, net of the effect of income taxes, and activity for the nine months ended September 30, 2014 and 2015 was as follows: Components of Accumulated Other Comprehensive Income (Loss) - Net of Tax (In thousands) Cumulative Foreign Exchange Translation Adjustments Effective Portion of Derivatives Designated as Hedging Instruments Cumulative Unrecognized Actuarial Losses on Pension Obligations Unrealized Loss on Marketable Securities Total Balance at December 31, 2013 $ 6,110 $ (7,023 ) $ (369,682 ) $ (20 ) $ (370,615 ) Other comprehensive income (loss) before reclassifications (13,650 ) (a) (3,114 ) (b) 5,878 (a) 6 (10,880 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 3 12,377 — 12,380 Other comprehensive income (loss) from equity method investee (1,511 ) — 632 — (879 ) Amounts reclassified from accumulated other comprehensive loss in connection with the Infrastructure Transaction (1,447 ) — — — (1,447 ) Total other comprehensive income (loss) (16,608 ) (3,111 ) 18,887 6 (826 ) Less: Other comprehensive (income) loss attributable to noncontrolling interests 1,088 (19 ) — — 1,069 Other comprehensive income (loss) attributable to Harsco Corporation (15,520 ) (3,130 ) 18,887 6 243 Balance at September 30, 2014 $ (9,410 ) $ (10,153 ) $ (350,795 ) $ (14 ) $ (370,372 ) Components of Accumulated Other Comprehensive Income (Loss) - Net of Tax (In thousands) Cumulative Foreign Exchange Translation Adjustments Effective Portion of Derivatives Designated as Hedging Instruments Cumulative Unrecognized Actuarial Losses on Pension Obligations Unrealized Loss on Marketable Securities Total Balance at December 31, 2014 $ (39,938 ) $ (9,025 ) $ (483,278 ) $ (15 ) $ (532,256 ) Other comprehensive income (loss) before reclassifications (61,537 ) (a) 10,801 (b) 12,012 (a) (12 ) (38,736 ) Amounts reclassified from accumulated other comprehensive loss, net of tax — 52 15,188 — 15,240 Other comprehensive income (loss) from equity method investee (13,134 ) (808 ) 596 — (13,346 ) Total other comprehensive income (loss) (74,671 ) 10,045 27,796 (12 ) (36,842 ) Less: Other comprehensive loss attributable to noncontrolling interests 2,187 8 — — 2,195 Other comprehensive income (loss) attributable to Harsco Corporation (72,484 ) 10,053 27,796 (12 ) (34,647 ) Balance at September 30, 2015 $ (112,422 ) $ 1,028 $ (455,482 ) $ (27 ) $ (566,903 ) (a) Principally foreign currency fluctuation. (b) Net change from periodic revaluations. |
Reclassification out of Accumulated Other Comprehensive Income | Amounts reclassified from accumulated other comprehensive loss are as follows: (In thousands) Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Affected Caption in the Condensed Consolidated Statements of Operations September 30 September 30 September 30 September 30 Amortization of defined benefit pension items: Actuarial losses (c) $ 4,000 $ 11,942 $ 2,900 $ 8,576 Selling, general and administrative expenses Actuarial losses (c) 1,473 4,447 1,534 4,670 Cost of services and products sold Prior-service costs (c) 31 93 24 70 Selling, general and administrative expenses Prior-service costs (c) 36 111 45 136 Cost of services and products sold Total before tax 5,540 16,593 4,503 13,452 Tax benefit (466 ) (1,405 ) (357 ) (1,075 ) Total reclassification of defined benefit pension items, net of tax $ 5,074 $ 15,188 $ 4,146 $ 12,377 Amortization of cash flow hedging instruments (c) : Foreign currency forward exchange contracts $ 78 $ 80 $ 2 $ 4 Cost of services and products sold Tax benefit (28 ) (28 ) — (1 ) Total reclassification of cash flow hedging instruments $ 50 $ 52 $ 2 $ 3 (c) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See Note 10, Employee Benefit Plans, for additional details. |
Restructuring Programs (Tables)
Restructuring Programs (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The restructuring accrual for Project Orion at September 30, 2015 and the activity for the nine months ended September 30, 2015 were as follows: (In thousands) Accrual at December 31 2014 Other Adjustments Cash Expenditures Foreign Currency Translation Accrual at September 30 2015 Employee termination benefit costs $ 7,668 $ (1,003 ) $ (3,930 ) $ (85 ) $ 2,650 Total $ 7,668 $ (1,003 ) $ (3,930 ) $ (85 ) $ 2,650 |
Revised Financial Statements (N
Revised Financial Statements (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Out-of-period adjustment, net affect on after-tax income | $ 7,500 | ||||
Retained earnings | $ 1,283,549 | $ 1,247,485 | |||
Out-of-period adjustment net affect on diluted earnings per share (in dollars per share) | $ 0.03 | $ 0.06 | $ 0.06 | ||
Revision | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Retained earnings | $ (6,659) | $ (6,659) |
Revised Financial Statements (D
Revised Financial Statements (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
ASSETS | ||||
Inventories | $ 210,296 | $ 178,922 | ||
Total current assets | 680,715 | 683,479 | ||
Other assets | 120,947 | 159,320 | ||
Total assets | 2,114,654 | 2,269,227 | ||
LIABILITIES | ||||
Other liabilities | 42,075 | 37,699 | ||
Total liabilities | 1,841,361 | 1,917,317 | ||
HARSCO CORPORATION STOCKHOLDERS' EQUITY | ||||
Accumulated other comprehensive loss | (566,903) | (532,256) | $ (370,372) | $ (370,615) |
Retained earnings | 1,247,485 | 1,283,549 | ||
Total Harsco Corporation stockholders’ equity | 229,895 | 307,588 | ||
Total equity | 273,293 | 351,910 | $ 575,877 | $ 597,555 |
Total liabilities and equity | 2,114,654 | 2,269,227 | ||
As Previously Reported | ||||
ASSETS | ||||
Inventories | 177,265 | |||
Total current assets | 681,822 | |||
Other assets | 155,551 | |||
Total assets | 2,263,801 | |||
LIABILITIES | ||||
Other liabilities | 25,849 | |||
Total liabilities | 1,905,467 | |||
HARSCO CORPORATION STOCKHOLDERS' EQUITY | ||||
Accumulated other comprehensive loss | (532,491) | |||
Retained earnings | 1,290,208 | |||
Total Harsco Corporation stockholders’ equity | 314,012 | |||
Total equity | 358,334 | |||
Total liabilities and equity | 2,263,801 | |||
Revision | ||||
ASSETS | ||||
Inventories | 1,657 | |||
Total current assets | 1,657 | |||
Other assets | 3,769 | |||
Total assets | 5,426 | |||
LIABILITIES | ||||
Other liabilities | 11,850 | |||
Total liabilities | 11,850 | |||
HARSCO CORPORATION STOCKHOLDERS' EQUITY | ||||
Accumulated other comprehensive loss | 235 | |||
Retained earnings | $ (6,659) | (6,659) | ||
Total Harsco Corporation stockholders’ equity | (6,424) | |||
Total equity | (6,424) | |||
Total liabilities and equity | $ 5,426 |
Revised Financial Statements 41
Revised Financial Statements (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Revenues from continuing operations: | |||||
Service revenues | $ 272,463 | $ 341,831 | $ 852,100 | $ 1,054,591 | |
Total revenues | 428,334 | 526,377 | 1,335,660 | 1,574,204 | |
Costs and expenses from continuing operations: | |||||
Cost of services sold | 224,588 | 282,907 | 714,287 | 873,747 | |
Selling, general and administrative expenses | 64,526 | 67,774 | 186,891 | 212,537 | |
Research and development expenses | 1,057 | 854 | 3,490 | 4,575 | |
Loss on disposal of the Harsco Infrastructure Segment and transaction costs | 1,000 | 54 | 1,000 | 4,653 | |
Total costs and expenses | 420,606 | 477,933 | 1,253,322 | 1,484,839 | |
Operating income from continuing operations | 7,728 | 48,444 | 82,338 | 89,365 | |
Income from continuing operations before income taxes and equity income | (5,201) | 34,652 | 41,985 | 47,882 | |
Income tax expense | (6,985) | (13,925) | (26,945) | (24,079) | |
Equity in income (loss) of unconsolidated entities, net | 3,105 | 5,805 | (396) | 1,057 | |
Income from continuing operations | (9,081) | 26,532 | 14,644 | 24,860 | |
Net income | (9,483) | 26,129 | 14,108 | 25,144 | |
Net income attributable to Harsco Corporation | (8,656) | 24,597 | 13,183 | 22,196 | |
Amounts attributable to Harsco Corporation common stockholders: | |||||
Income (loss) from continuing operations, net of tax | $ (8,254) | $ 25,000 | $ 13,719 | $ 21,912 | |
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | $ (0.10) | $ 0.31 | $ 0.17 | $ 0.27 | |
Basic earnings per share attributable to Harsco Corporation common stockholders (in dollars per share) | (0.11) | 0.30 | [1] | 0.16 | 0.27 |
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | (0.10) | 0.31 | 0.17 | 0.27 | |
Diluted earnings per share attributable to Harsco Corporation common stockholders (in dollars per share) | $ (0.11) | $ 0.30 | [1] | $ 0.16 | $ 0.27 |
As Previously Reported | |||||
Revenues from continuing operations: | |||||
Service revenues | $ 1,054,040 | ||||
Total revenues | 1,573,653 | ||||
Costs and expenses from continuing operations: | |||||
Cost of services sold | $ 285,098 | 875,898 | |||
Selling, general and administrative expenses | 68,289 | 213,052 | |||
Research and development expenses | 5,456 | ||||
Loss on disposal of the Harsco Infrastructure Segment and transaction costs | 5,607 | ||||
Total costs and expenses | 480,639 | 1,489,340 | |||
Operating income from continuing operations | 45,738 | 84,313 | |||
Income from continuing operations before income taxes and equity income | 31,946 | 42,830 | |||
Income tax expense | (11,671) | (20,424) | |||
Equity in income (loss) of unconsolidated entities, net | 5,295 | ||||
Income from continuing operations | 25,570 | 23,463 | |||
Net income | 25,167 | 23,747 | |||
Net income attributable to Harsco Corporation | 23,635 | 20,799 | |||
Amounts attributable to Harsco Corporation common stockholders: | |||||
Income (loss) from continuing operations, net of tax | $ 24,038 | $ 20,515 | |||
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | $ 0.30 | $ 0.25 | |||
Basic earnings per share attributable to Harsco Corporation common stockholders (in dollars per share) | 0.29 | 0.26 | |||
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | 0.30 | 0.25 | |||
Diluted earnings per share attributable to Harsco Corporation common stockholders (in dollars per share) | $ 0.29 | $ 0.26 | |||
Revision | |||||
Revenues from continuing operations: | |||||
Service revenues | $ 551 | ||||
Total revenues | 551 | ||||
Costs and expenses from continuing operations: | |||||
Cost of services sold | $ (2,191) | (2,151) | |||
Selling, general and administrative expenses | (515) | (515) | |||
Research and development expenses | (881) | ||||
Loss on disposal of the Harsco Infrastructure Segment and transaction costs | (954) | ||||
Total costs and expenses | (2,706) | (4,501) | |||
Operating income from continuing operations | 2,706 | 5,052 | |||
Income from continuing operations before income taxes and equity income | 2,706 | 5,052 | |||
Income tax expense | (2,254) | (3,655) | |||
Equity in income (loss) of unconsolidated entities, net | 510 | ||||
Income from continuing operations | 962 | 1,397 | |||
Net income | 962 | 1,397 | |||
Net income attributable to Harsco Corporation | 962 | 1,397 | |||
Amounts attributable to Harsco Corporation common stockholders: | |||||
Income (loss) from continuing operations, net of tax | $ 962 | $ 1,397 | |||
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | $ 0.01 | $ 0.02 | |||
Basic earnings per share attributable to Harsco Corporation common stockholders (in dollars per share) | 0.01 | 0.01 | |||
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | 0.01 | 0.02 | |||
Diluted earnings per share attributable to Harsco Corporation common stockholders (in dollars per share) | $ 0.01 | $ 0.01 | |||
[1] | Does not total due to rounding. |
Revised Financial Statements 42
Revised Financial Statements (Details 3) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Net cash provided (used) by: | ||
Operating activities | $ 89,102 | $ 185,290 |
Investing activities | $ (103,226) | (150,829) |
As Previously Reported | ||
Net cash provided (used) by: | ||
Operating activities | 184,409 | |
Investing activities | (149,948) | |
Revision | ||
Net cash provided (used) by: | ||
Operating activities | 881 | |
Investing activities | $ (881) |
Accounts Receivable and Inven43
Accounts Receivable and Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Accounts receivable | ||||||
Trade accounts receivable | $ 322,751 | $ 322,751 | $ 340,223 | |||
Less: Allowance for doubtful accounts | (24,516) | (24,516) | (15,119) | |||
Trade accounts receivable, net | 298,235 | 298,235 | 325,104 | |||
Other receivables | [1] | 23,293 | 23,293 | 28,145 | ||
Provision for doubtful accounts related to trade accounts receivable | 10,005 | $ (170) | 10,615 | $ 7,176 | ||
Inventories | ||||||
Finished goods | 35,898 | 35,898 | 30,525 | |||
Work-in-process | 69,938 | 69,938 | 28,690 | |||
Raw materials and purchased parts | 75,927 | 75,927 | 87,985 | |||
Stores and supplies | 28,533 | 28,533 | 31,722 | |||
Inventories | $ 210,296 | $ 210,296 | $ 178,922 | |||
[1] | Other receivables include insurance claim receivables, employee receivables, tax claim receivables, receivables from affiliates and other miscellaneous receivables not included in Trade accounts receivable, net. |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Change in fair value to the unit adjustment liability | $ (2,083) | $ (2,398) | $ (6,492) | $ (7,417) | ||
Unit adjustment liability | 83,500 | 83,500 | $ 93,800 | |||
Infrastructure Transaction Strategic Venture | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment, carrying value | $ 264,200 | $ 264,200 | $ 285,700 | |||
Total annual payments to acquire joint venture, before tax | $ 22,000 | |||||
Total annual payments to acquire joint venture, after tax | $ 15,000 | |||||
Transfer of ownership interest | 2.50% | |||||
Harsco Infrastructure Segment | Infrastructure Transaction Strategic Venture | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage of ownership in Brand | 29.00% | 29.00% |
Equity Method Investments (De45
Equity Method Investments (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 | |
Summarized Statement of Operations Information of Brand: | ||||||||
Net revenues | $ 736,178 | $ 827,735 | $ 1,805,592 | $ 2,217,904 | ||||
Gross profit | 154,710 | 187,272 | 387,966 | 486,656 | ||||
Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries | 10,817 | 18,866 | 4,259 | (1,384) | ||||
Equity in income (loss) of unconsolidated entities, net | $ 3,105 | $ 5,805 | $ (396) | $ 1,057 | ||||
Infrastructure Transaction Strategic Venture | ||||||||
Summarized Statement of Operations Information of Brand: | ||||||||
Equity in income (loss) of unconsolidated entities, net | $ 3,105 | $ 5,770 | $ 1,021 | $ (396) |
Equity Method Investments (De46
Equity Method Investments (Details 3) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Balances due from Brand | $ 2,330 | $ 1,860 |
Balances due to Brand | $ 28,913 | $ 28,311 |
Property, Plant and Equipment47
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment | ||
Gross property, plant and equipment | $ 2,008,655 | $ 2,186,407 |
Less: Accumulated depreciation | (1,424,948) | (1,523,163) |
Property, plant and equipment, net | 583,707 | 663,244 |
Land | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | 11,065 | 15,721 |
Land improvements | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | 15,408 | 15,898 |
Buildings and improvements | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | 201,213 | 205,409 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | 1,725,312 | 1,861,965 |
Uncompleted construction | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | $ 55,657 | $ 87,414 |
Goodwill and Other Intangible48
Goodwill and Other Intangible Assets (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($) | ||
Changes in carrying amounts of goodwill | ||
Balance at December 31, 2014 | $ 416,155 | |
Changes to goodwill | 2,996 | [1] |
Foreign currency translation | (12,813) | |
Balance at September 30, 2015 | 406,338 | |
Harsco Metals & Minerals Segment | ||
Changes in carrying amounts of goodwill | ||
Balance at December 31, 2014 | 400,006 | |
Changes to goodwill | (493) | [1] |
Foreign currency translation | (12,813) | |
Balance at September 30, 2015 | 386,700 | |
Harsco Industrial Segment | ||
Changes in carrying amounts of goodwill | ||
Balance at December 31, 2014 | 6,839 | |
Changes to goodwill | 0 | [1] |
Foreign currency translation | 0 | |
Balance at September 30, 2015 | 6,839 | |
Harsco Rail Segment | ||
Changes in carrying amounts of goodwill | ||
Balance at December 31, 2014 | 9,310 | |
Changes to goodwill | 3,489 | [1] |
Foreign currency translation | 0 | |
Balance at September 30, 2015 | $ 12,799 | |
[1] | Changes to goodwill in the Harsco Rail Segment relate to the acquisitions of Protran and JK Rail. See Note 4, Acquisitions. In addition, the change to goodwill in the Harsco Metals & Minerals Segment relates to the allocation of goodwill associated with the sale of the Company's Pakistan-based chromium operations. |
Goodwill and Other Intangible49
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Intangible Assets, by category | ||||||
Gross Carrying Amount | $ 205,270 | $ 205,270 | $ 206,429 | |||
Accumulated Amortization | 148,988 | 148,988 | 147,905 | |||
Amortization expense for intangible assets | 2,286 | $ 2,398 | 6,602 | $ 7,544 | ||
Estimated amortization expense for next 5 years | ||||||
2,015 | [1] | 9,000 | 9,000 | |||
2,016 | [1] | 8,750 | 8,750 | |||
2,017 | [1] | 6,000 | 6,000 | |||
2,018 | [1] | 5,750 | 5,750 | |||
2,019 | [1] | 5,500 | 5,500 | |||
Customer related | ||||||
Intangible Assets, by category | ||||||
Gross Carrying Amount | 155,416 | 155,416 | 157,530 | |||
Accumulated Amortization | 111,256 | 111,256 | 112,211 | |||
Non-compete agreements | ||||||
Intangible Assets, by category | ||||||
Gross Carrying Amount | 1,097 | 1,097 | 1,107 | |||
Accumulated Amortization | 1,047 | 1,047 | 1,039 | |||
Patents | ||||||
Intangible Assets, by category | ||||||
Gross Carrying Amount | 5,912 | 5,912 | 6,079 | |||
Accumulated Amortization | 5,474 | 5,474 | 5,399 | |||
Technology related | ||||||
Intangible Assets, by category | ||||||
Gross Carrying Amount | 25,743 | 25,743 | 26,548 | |||
Accumulated Amortization | 22,589 | 22,589 | 21,233 | |||
Trade names | ||||||
Intangible Assets, by category | ||||||
Gross Carrying Amount | 8,308 | 8,308 | 7,745 | |||
Accumulated Amortization | 4,077 | 4,077 | 3,733 | |||
Other | ||||||
Intangible Assets, by category | ||||||
Gross Carrying Amount | 8,794 | 8,794 | 7,420 | |||
Accumulated Amortization | $ 4,545 | $ 4,545 | $ 4,290 | |||
[1] | These estimated amortization expense amounts do not reflect the potential effect of future foreign currency exchange fluctuations. |
Debt and Credit Agreements (Det
Debt and Credit Agreements (Details) | Apr. 01, 2016 | Mar. 27, 2015USD ($)bank | Mar. 31, 2012USD ($)bank | Mar. 31, 2015USD ($) | Mar. 31, 2016 | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | |||||||
Financing costs expensed | $ 600,000 | ||||||
Senior Notes | 2.7% Notes due October 15, 2015 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate (in percent) | 2.70% | 2.70% | |||||
Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 500,000,000 | $ 525,000,000 | |||||
Number of lenders | bank | 11 | 14 | |||||
Contingent increase to maximum borrowing capacity | $ 550,000,000 | ||||||
Calculated total net debt to consolidated EBITDA ratio | 2.7 | ||||||
Calculated proportion of subsidiary consolidated indebtedness to consolidated tangible assets (percent) | 0.80% | ||||||
Calculated total consolidated EBITDA to consolidated interest charges | 6.3 | ||||||
Outstanding borrowings | $ 100,000,000 | $ 98,500,000 | |||||
Line of Credit | Scenario, Forecast [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Net debt to consolidated EBITDA ratio | 3.5 | 3.75 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined benefit plans: | ||||
Multiemployer pension plans | $ 570 | $ 667 | $ 1,876 | $ 2,334 |
Defined contribution pension plans | 2,619 | 3,322 | 8,884 | 10,321 |
U. S. Plans | ||||
Defined benefit plans: | ||||
Service cost | 722 | 558 | 2,167 | 1,675 |
Interest cost | 3,089 | 3,217 | 9,268 | 9,651 |
Expected return on plan assets | (4,203) | (4,196) | (12,609) | (12,590) |
Recognized prior service costs | 20 | 22 | 60 | 68 |
Recognized loss | 1,230 | 838 | 3,689 | 2,514 |
Defined Benefit Plan, Amortization of Transition Obligations (Assets) | 0 | 0 | ||
Defined benefit plans net periodic pension cost | 858 | 439 | 2,575 | 1,318 |
Defined benefit pension plan | 567 | 5,909 | 1,841 | 7,057 |
Anticipated contributions to defined benefit pension plans during the remainder of the fiscal year | 600 | |||
International Plans | ||||
Defined benefit plans: | ||||
Service cost | 428 | 394 | 1,320 | 1,213 |
Interest cost | 9,146 | 11,024 | 27,475 | 32,948 |
Expected return on plan assets | (12,630) | (12,743) | (37,914) | (38,039) |
Recognized prior service costs | 47 | 46 | 144 | 138 |
Recognized loss | 4,244 | 3,596 | 12,700 | 10,732 |
Defined Benefit Plan, Amortization of Transition Obligations (Assets) | 0 | 56 | ||
Defined benefit plans net periodic pension cost | 1,235 | 2,317 | 3,725 | 7,048 |
Defined benefit pension plan | $ 3,935 | $ 4,226 | 24,166 | $ 25,963 |
Anticipated contributions to defined benefit pension plans during the remainder of the fiscal year | $ 4,200 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 6,985 | $ 13,925 | $ 26,945 | $ 24,079 |
Unrecognized income tax benefits including interest and penalties | 7,400 | 7,400 | ||
Tax Adjustments, Settlements, and Unusual Provisions | 7,100 | |||
Portion of unrecognized income tax benefits, expected to be recognized upon settlement of tax examinations and the expiration of various statutes of limitations within next twelve months | $ 1,200 | $ 1,200 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Aug. 31, 2005USD ($) | Sep. 30, 2015USD ($)claimcase | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)claimdefendantcase | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Commitments and Contingencies | ||||||
Litigation Settlement, Amount | $ (4,220) | $ 0 | $ (4,220) | $ 0 | ||
Environmental | ||||||
Commitments and Contingencies | ||||||
Accruals for environmental matters | 1,300 | 1,300 | $ 1,200 | |||
Charges related to environmental matters | 300 | $ 400 | 800 | $ 1,700 | ||
Brazilian Tax Disputes - Jan 2004 through May 2005 | Sao Paulo State Revenue Authority | ||||||
Commitments and Contingencies | ||||||
Damages sought - principal | 2,000 | |||||
Damages sought - interest, penalties and fees | 17,000 | |||||
Brazilian Tax Disputes - Jan 2002 through Dec 2003 | Sao Paulo State Revenue Authority | ||||||
Commitments and Contingencies | ||||||
Damages sought - principal | $ 1,500 | |||||
Damages sought - interest, penalties and fees | 4,700 | |||||
Amount of damages sought | $ 6,200 | |||||
Brazilian Labor Claims | ||||||
Commitments and Contingencies | ||||||
Loss contingency reserves | $ 7,300 | $ 7,300 | $ 8,600 | |||
Other | ||||||
Commitments and Contingencies | ||||||
Approximate number of defendants that includes the company named in legal actions | defendant | 90 | |||||
Number of pending claims | claim | 17,221 | 17,221 | ||||
Number of claims dismissed to date by stipulation or summary judgment prior to trial | case | 27,679 | |||||
Other | Minimum | ||||||
Commitments and Contingencies | ||||||
Amount of damages sought | $ 20,000 | |||||
Other | Maximum | ||||||
Commitments and Contingencies | ||||||
Amount of damages sought | $ 25,000 | |||||
Other | Active or In Extremis docket | ||||||
Commitments and Contingencies | ||||||
Number of pending claims | claim | 134 | 134 | ||||
Other | New York County as managed by the New York Supreme Court | ||||||
Commitments and Contingencies | ||||||
Number of pending claims | case | 16,893 | 16,893 | ||||
Other | New York County as managed by the New York Supreme Court | Pending And Future Litigation, Deferred Or Inactive Docket | ||||||
Commitments and Contingencies | ||||||
Number of pending claims | claim | 16,759 | 16,759 | ||||
Other | New York State Supreme Court, Counties Excluding New York County | ||||||
Commitments and Contingencies | ||||||
Number of pending claims | case | 125 | 125 | ||||
Other | Courts Located In States Other Than New York | ||||||
Commitments and Contingencies | ||||||
Number of pending claims | case | 203 | 203 |
Reconciliation of Basic and D54
Reconciliation of Basic and Diluted Shares Reconciliation of Basic and Diluted Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Income (loss) from continuing operations, net of tax | $ (8,254) | $ 25,000 | $ 13,719 | $ 21,912 |
Weighted-average shares outstanding - basic | 80,238 | 80,918 | 80,233 | 80,873 |
Dilutive effect of stock-based compensation | 0 | 181 | 130 | 220 |
Weighted-average shares outstanding - diluted | 80,238 | 81,099 | 80,363 | 81,093 |
Earnings (loss) from continuing operations per common share, attributable to Harsco Corporation common stockholders: | ||||
Basic (in dollars per share) | $ (0.10) | $ 0.31 | $ 0.17 | $ 0.27 |
Diluted (in dollars per share) | $ (0.10) | $ 0.31 | $ 0.17 | $ 0.27 |
Reconciliation of Basic and D55
Reconciliation of Basic and Diluted Shares (Details 2) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restricted stock units | ||||
Antidilutive securities | ||||
Number of securities not included in computation of diluted earnings per share (in shares) | 441 | 0 | 0 | 103 |
Stock options | ||||
Antidilutive securities | ||||
Number of securities not included in computation of diluted earnings per share (in shares) | 90 | 200 | 101 | 210 |
Stock appreciation rights | ||||
Antidilutive securities | ||||
Number of securities not included in computation of diluted earnings per share (in shares) | 1,265 | 372 | 1,156 | 453 |
Performance share units | ||||
Antidilutive securities | ||||
Number of securities not included in computation of diluted earnings per share (in shares) | 322 | 136 | 265 | 78 |
Derivative Instruments, Hedgi56
Derivative Instruments, Hedging Activities and Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Designated as hedging instrument | ||
Derivative contracts | ||
Asset Derivatives | $ 13,744 | $ 53,409 |
Liability Derivatives | $ 46 | 2,599 |
Designated as hedging instrument | Minimum | ||
Derivative contracts | ||
Period over which gains and losses are reclassified to earnings | 10 years | |
Designated as hedging instrument | Maximum | ||
Derivative contracts | ||
Period over which gains and losses are reclassified to earnings | 15 years | |
Designated as hedging instrument | Foreign currency forward exchange contracts | Other current assets | ||
Derivative contracts | ||
Asset Derivatives | $ 3,289 | 420 |
Designated as hedging instrument | Foreign currency forward exchange contracts | Other current liabilities | ||
Derivative contracts | ||
Liability Derivatives | 46 | 0 |
Designated as hedging instrument | Cross currency interest rate swaps | Other assets | ||
Derivative contracts | ||
Asset Derivatives | 10,455 | 52,989 |
Designated as hedging instrument | Cross currency interest rate swaps | Noncurrent liabilities | ||
Derivative contracts | ||
Liability Derivatives | 0 | 2,599 |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward exchange contracts | Other current assets | ||
Derivative contracts | ||
Asset Derivatives | 4,120 | 4,065 |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward exchange contracts | Other current liabilities | ||
Derivative contracts | ||
Liability Derivatives | $ 724 | $ 4,618 |
Derivative Instruments, Hedgi57
Derivative Instruments, Hedging Activities and Fair Value (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Effect of derivative instruments | |||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative - Effective Portion | $ 4,963 | $ (786) | $ 11,382 | $ (3,321) | |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion | 78 | 0 | 80 | (3) | |
Amount of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing | 13,087 | 26,629 | 24,739 | 21,254 | |
Foreign currency forward exchange contracts | |||||
Effect of derivative instruments | |||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative - Effective Portion | 2,517 | 77 | 2,851 | 97 | |
Amount of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing | 0 | 0 | 0 | 0 | |
Foreign currency forward exchange contracts | Cost of services and products sold | |||||
Effect of derivative instruments | |||||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion | 78 | 0 | 80 | (3) | |
Derivatives Not Designated as Hedging Instruments | |||||
Amount of Gain (Loss) Recognized in Income on Derivative | [1] | 2,724 | (1,126) | (4,510) | (704) |
Cross currency interest rate swaps | |||||
Effect of derivative instruments | |||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative - Effective Portion | 2,446 | (863) | 8,531 | (3,418) | |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion | 0 | 0 | 0 | 0 | |
Cross currency interest rate swaps | Cost of services and products sold | |||||
Effect of derivative instruments | |||||
Amount of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing | [2] | $ 13,087 | $ 26,629 | $ 24,739 | $ 21,254 |
[1] | These gains (losses) offset amounts recognized in cost of services and products sold principally as a result of intercompany or third party foreign currency exposures. | ||||
[2] | These gains (losses) offset foreign currency fluctuation effects on the debt principal. |
Derivative Instruments, Hedgi58
Derivative Instruments, Hedging Activities and Fair Value (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Foreign Currency Derivatives | |||||
Pre-tax net gains (losses) on certain loans designated as hedges of net investments in foreign subsidiaries | $ 2,200 | $ (15,100) | $ 2,400 | $ (20,000) | |
Foreign currency forward exchange contracts | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 436,584 | 436,584 | $ 468,822 | ||
Recognized Gain (Loss) | 6,639 | (133) | |||
Foreign currency forward exchange contracts | British pounds sterling | Sell | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 73 | 73 | 37,943 | ||
Recognized Gain (Loss) | 0 | 179 | |||
Foreign currency forward exchange contracts | British pounds sterling | Buy | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 46,021 | 46,021 | 2,783 | ||
Recognized Gain (Loss) | 961 | (4) | |||
Foreign currency forward exchange contracts | Euros | Sell | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 126,274 | 126,274 | 193,370 | ||
Recognized Gain (Loss) | (434) | 2,993 | |||
Foreign currency forward exchange contracts | Euros | Buy | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 198,565 | 198,565 | 194,084 | ||
Recognized Gain (Loss) | 5,020 | (3,767) | |||
Foreign currency forward exchange contracts | Other currencies | Sell | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 50,164 | 50,164 | 12,641 | ||
Recognized Gain (Loss) | 1,113 | 439 | |||
Foreign currency forward exchange contracts | Other currencies | Buy | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | $ 15,487 | 15,487 | $ 28,001 | ||
Recognized Gain (Loss) | $ (21) | $ 27 |
Derivative Instruments, Hedgi59
Derivative Instruments, Hedging Activities and Fair Value (Details 4) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Derivatives Designated as Hedging Instruments | ||
Proceeds from cross-currency interest rate swap termination | $ 75,057,000 | $ 0 |
Maturing 2020 | Designated as hedging instrument | ||
Derivatives Designated as Hedging Instruments | ||
Contractual Amount | 220,000,000 | |
Maturing 2016 through 2017 | Designated as hedging instrument | ||
Derivatives Designated as Hedging Instruments | ||
Contractual Amount | $ 7,100,000 |
Derivative Instruments, Hedgi60
Derivative Instruments, Hedging Activities and Fair Value (Details 5) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Unit Adjustment Liability, Infrastructure Transaction | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | [1] | $ 93,762 | $ 106,343 | |
Payments | [1] | (16,740) | (16,740) | |
Change in fair value to the unit adjustment liability | [1] | 6,492 | 7,417 | |
Balance at end of period | [1] | 83,514 | $ 97,020 | |
Fair value measurements recurring | Level 2 | ||||
Assets | ||||
Foreign currency forward exchange contracts | 7,409 | $ 4,485 | ||
Cross-currency interest rate swaps | 10,455 | 52,989 | ||
Liabilities | ||||
Foreign currency forward exchange contracts | 770 | 4,618 | ||
Cross-currency interest rate swaps | $ 0 | $ 2,599 | ||
[1] | See Note 6, Equity Method Investments, for additional information related to the unit adjustment liability. |
Derivative Instruments, Hedgi61
Derivative Instruments, Hedging Activities and Fair Value (Details 6) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Derivative Instruments, Hedging Activities And Fair Value Disclosure [Abstract] | ||
Net derivative asset subject to master netting arrangements | $ 0 | |
Long-term debt, including current maturities | ||
Fair value of long-term debt | $ 841,100 | 885,000 |
Carrying value of long-term debt | $ 844,300 | $ 854,900 |
Review of Operations by Segme62
Review of Operations by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Operations by segment | ||||
Total revenues | $ 428,334 | $ 526,377 | $ 1,335,660 | $ 1,574,204 |
Operating income from continuing operations | 7,728 | 48,444 | 82,338 | 89,365 |
Interest income | 264 | 555 | 951 | 1,262 |
Interest expense | (11,110) | (11,949) | (34,812) | (35,328) |
Change in fair value to the unit adjustment liability | (2,083) | (2,398) | (6,492) | (7,417) |
Income (loss) from continuing operations before income taxes and equity loss | (5,201) | 34,652 | 41,985 | 47,882 |
Depreciation and Amortization | 39,766 | 43,413 | 119,346 | 133,792 |
Capital Expenditures | 28,337 | 52,674 | 91,583 | 135,170 |
Total reportable segments | ||||
Operations by segment | ||||
Operating income from continuing operations | 18,389 | 56,989 | 112,050 | 125,386 |
Harsco Metals & Minerals Segment | ||||
Operations by segment | ||||
Total revenues | 277,367 | 347,625 | 862,901 | 1,062,208 |
Operating income from continuing operations | (3,331) | 27,058 | 25,851 | 42,430 |
Depreciation and Amortization | 34,636 | 39,398 | 104,368 | 121,488 |
Capital Expenditures | 23,205 | 41,635 | 72,748 | 119,977 |
Harsco Industrial Segment | ||||
Operations by segment | ||||
Total revenues | 91,199 | 105,591 | 281,883 | 310,696 |
Operating income from continuing operations | 13,934 | 15,955 | 45,380 | 49,955 |
Depreciation and Amortization | 1,855 | 1,168 | 4,507 | 3,712 |
Capital Expenditures | 3,662 | 4,392 | 12,467 | 5,867 |
Harsco Rail Segment | ||||
Operations by segment | ||||
Total revenues | 59,768 | 73,161 | 190,876 | 201,300 |
Operating income from continuing operations | 7,786 | 13,976 | 40,819 | 33,001 |
Depreciation and Amortization | 1,476 | 1,387 | 4,670 | 4,135 |
Capital Expenditures | 374 | 583 | 1,599 | 2,549 |
Corporate [Member] | ||||
Operations by segment | ||||
Operating income from continuing operations | (10,661) | (8,545) | (29,712) | (36,021) |
Depreciation and Amortization | 1,799 | 1,460 | 5,801 | 4,457 |
Capital Expenditures | $ 1,096 | $ 6,064 | $ 4,769 | $ 6,777 |
Other Expenses (Details)
Other Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Restructuring Charges | $ 0 | $ 276 | $ 0 | $ 8,815 | |
Net gains | [1] | (1,747) | (1,219) | (8,479) | (4,227) |
Foreign currency gains related to Harsco Rail Segment advances on contracts | 0 | 0 | (10,940) | 0 | |
Other nonrecurring expense | 7,000 | 0 | 7,000 | 0 | |
Litigation Settlement, Amount | 4,220 | 0 | 4,220 | 0 | |
Impaired asset write-downs | 731 | 590 | 731 | 14,670 | |
Other | [2] | 7,188 | 866 | 11,297 | 8,115 |
Other expenses | $ 17,392 | $ 513 | $ 3,829 | $ 27,373 | |
Strategic venture partner ownership interest in Bahrain operations | 35.00% | 35.00% | |||
Parent | |||||
Other nonrecurring expense | $ 4,600 | ||||
Minimum | |||||
Service agreement payment period | 5 years | ||||
Maximum | |||||
Service agreement payment period | 7 years | ||||
[1] | Net gains result from the sales of redundant properties (primarily land, buildings and related equipment) and non-core assets. | ||||
[2] | Other includes employee termination benefit costs and costs to exit activities that are not directly related to the restructuring programs detailed in Note 18, Restructuring Programs. |
Components of Accumulated Oth64
Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Components of Accumulated Other Comprehensive Income [Roll Forward] | |||||
Beginning balance | $ (532,256) | $ (370,615) | |||
Other comprehensive income (loss) before reclassifications | (38,736) | (10,880) | |||
Amounts reclassified from accumulated other comprehensive loss | 15,240 | 12,380 | |||
Amounts Reclassified From Other Comprehensive Income, Net of Tax, Equity Method Investee | (13,346) | (879) | |||
Reclassification From Accumulated Other Comprehensive Income, Current Period, Net Of Tax, Amounts Related To Asset Impairment Loss Recognized in Acquisitions and Dispositions | (1,447) | ||||
Total other comprehensive loss | $ (13,118) | $ (1,386) | (36,842) | (826) | |
Less: Other Comprehensive loss attributable to noncontrolling interests | 2,195 | 1,069 | |||
Other comprehensive income (loss) attributable to Harsco Corporation | (34,647) | 243 | |||
Ending balance | (566,903) | (370,372) | (566,903) | (370,372) | |
Cumulative Foreign Exchange Translation Adjustments | |||||
Components of Accumulated Other Comprehensive Income [Roll Forward] | |||||
Beginning balance | (39,938) | 6,110 | |||
Other comprehensive income (loss) before reclassifications | [1] | (61,537) | (13,650) | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |||
Amounts Reclassified From Other Comprehensive Income, Net of Tax, Equity Method Investee | (13,134) | (1,511) | |||
Reclassification From Accumulated Other Comprehensive Income, Current Period, Net Of Tax, Amounts Related To Asset Impairment Loss Recognized in Acquisitions and Dispositions | (1,447) | ||||
Total other comprehensive loss | (74,671) | (16,608) | |||
Less: Other Comprehensive loss attributable to noncontrolling interests | 2,187 | 1,088 | |||
Other comprehensive income (loss) attributable to Harsco Corporation | (72,484) | (15,520) | |||
Ending balance | (112,422) | (9,410) | (112,422) | (9,410) | |
Effective Portion of Deriviatives Designated as Hedging Instruments | |||||
Components of Accumulated Other Comprehensive Income [Roll Forward] | |||||
Beginning balance | (9,025) | (7,023) | |||
Other comprehensive income (loss) before reclassifications | [2] | 10,801 | (3,114) | ||
Amounts reclassified from accumulated other comprehensive loss | 52 | 3 | |||
Amounts Reclassified From Other Comprehensive Income, Net of Tax, Equity Method Investee | (808) | 0 | |||
Reclassification From Accumulated Other Comprehensive Income, Current Period, Net Of Tax, Amounts Related To Asset Impairment Loss Recognized in Acquisitions and Dispositions | 0 | ||||
Total other comprehensive loss | 10,045 | (3,111) | |||
Less: Other Comprehensive loss attributable to noncontrolling interests | 8 | (19) | |||
Other comprehensive income (loss) attributable to Harsco Corporation | 10,053 | (3,130) | |||
Ending balance | 1,028 | (10,153) | 1,028 | (10,153) | |
Cumulative Unrecognized Actuarial Losses on Pension Obligations | |||||
Components of Accumulated Other Comprehensive Income [Roll Forward] | |||||
Beginning balance | (483,278) | (369,682) | |||
Other comprehensive income (loss) before reclassifications | [1] | 12,012 | 5,878 | ||
Amounts reclassified from accumulated other comprehensive loss | 15,188 | 12,377 | |||
Amounts Reclassified From Other Comprehensive Income, Net of Tax, Equity Method Investee | 596 | 632 | |||
Reclassification From Accumulated Other Comprehensive Income, Current Period, Net Of Tax, Amounts Related To Asset Impairment Loss Recognized in Acquisitions and Dispositions | 0 | ||||
Total other comprehensive loss | 27,796 | 18,887 | |||
Less: Other Comprehensive loss attributable to noncontrolling interests | 0 | 0 | |||
Other comprehensive income (loss) attributable to Harsco Corporation | 27,796 | 18,887 | |||
Ending balance | (455,482) | (350,795) | (455,482) | (350,795) | |
Unrealized Loss on Marketable Securities | |||||
Components of Accumulated Other Comprehensive Income [Roll Forward] | |||||
Beginning balance | (15) | (20) | |||
Other comprehensive income (loss) before reclassifications | (12) | 6 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |||
Amounts Reclassified From Other Comprehensive Income, Net of Tax, Equity Method Investee | 0 | 0 | |||
Reclassification From Accumulated Other Comprehensive Income, Current Period, Net Of Tax, Amounts Related To Asset Impairment Loss Recognized in Acquisitions and Dispositions | 0 | ||||
Total other comprehensive loss | (12) | 6 | |||
Less: Other Comprehensive loss attributable to noncontrolling interests | 0 | 0 | |||
Other comprehensive income (loss) attributable to Harsco Corporation | (12) | 6 | |||
Ending balance | $ (27) | $ (14) | $ (27) | $ (14) | |
[1] | Principally foreign currency fluctuation. | ||||
[2] | Net change from periodic revaluations. |
Components of Accumulated Oth65
Components of Accumulated Other Comprehensive Loss Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||
Selling, general and administrative expenses | $ 64,526 | $ 67,774 | $ 186,891 | $ 212,537 | |
Income (loss) from continuing operations before income taxes and equity loss | (5,201) | 34,652 | 41,985 | 47,882 | |
Income tax expense | (6,985) | (13,925) | (26,945) | (24,079) | |
Net income | (9,483) | 26,129 | 14,108 | 25,144 | |
Amount Reclassified from Accumulated Other Comprehensive Loss | Cumulative Unrecognized Actuarial Losses on Pension Obligations | |||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||
Income (loss) from continuing operations before income taxes and equity loss | 5,540 | 4,503 | 16,593 | 13,452 | |
Income tax expense | (466) | (357) | (1,405) | (1,075) | |
Net income | 5,074 | 4,146 | 15,188 | 12,377 | |
Amount Reclassified from Accumulated Other Comprehensive Loss | Actuarial losses | |||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||
Selling, general and administrative expenses | [1] | 4,000 | 2,900 | 11,942 | 8,576 |
Cost of services and products sold | [1] | 1,473 | 1,534 | 4,447 | 4,670 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Prior service costs | |||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||
Selling, general and administrative expenses | [1] | 31 | 24 | 93 | 70 |
Cost of services and products sold | [1] | 36 | 45 | 111 | 136 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Effective Portion of Deriviatives Designated as Hedging Instruments | |||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||
Income tax expense | [1] | (28) | 0 | (28) | (1) |
Net income | [1] | 50 | 2 | 52 | 3 |
Foreign currency forward exchange contracts | Amount Reclassified from Accumulated Other Comprehensive Loss | Effective Portion of Deriviatives Designated as Hedging Instruments | |||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||
Cost of services and products sold | [1] | $ 78 | $ 2 | $ 80 | $ 4 |
[1] | These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See Note 10, Employee Benefit Plans, for additional details. |
Restructuring Programs (Details
Restructuring Programs (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Restructuring Program 2011 and 2012 | |
Restructuring accrual related activity | |
Accrual at December 31 2014 | $ 2,400 |
Accrual at September 30 2015 | 2,000 |
Harsco Metals & Minerals Segment | Harsco Metals & Minerals Improvement Plan (Project Orion) [Member] | |
Restructuring accrual related activity | |
Accrual at December 31 2014 | 7,668 |
Other Adjustments | (1,003) |
Cash Expenditures | (3,930) |
Foreign Currency Translation | (85) |
Accrual at September 30 2015 | 2,650 |
Harsco Metals & Minerals Segment | Harsco Metals & Minerals Improvement Plan (Project Orion) [Member] | Other Restructuring [Member] | |
Restructuring Programs | |
Effect of Future Earnings, Annualized Basis | 37,000 |
Harsco Metals & Minerals Segment | Harsco Metals & Minerals Improvement Plan (Project Orion) [Member] | Employee Severance [Member] | |
Restructuring accrual related activity | |
Accrual at December 31 2014 | 7,668 |
Other Adjustments | (1,003) |
Cash Expenditures | (3,930) |
Foreign Currency Translation | (85) |
Accrual at September 30 2015 | $ 2,650 |