Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
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, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 80,174,963 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 79,911 | $ 79,756 |
Trade accounts receivable, net | 263,534 | 254,877 |
Other receivables | 17,595 | 30,395 |
Inventories | 208,695 | 216,967 |
Other current assets | 62,894 | 82,527 |
Total current assets | 632,629 | 664,522 |
Investments | 2,210 | 252,609 |
Property, plant and equipment, net | 518,251 | 564,035 |
Goodwill | 391,657 | 400,367 |
Intangible assets, net | 44,380 | 53,043 |
Other assets | 97,997 | 126,621 |
Total assets | 1,687,124 | 2,061,197 |
Current liabilities: | ||
Short-term borrowings | 5,279 | 30,229 |
Current maturities of long-term debt | 20,760 | 25,084 |
Accounts payable | 119,991 | 136,018 |
Accrued compensation | 43,863 | 38,899 |
Income taxes payable | 7,329 | 4,408 |
Dividends payable | 0 | 4,105 |
Insurance liabilities | 12,154 | 11,420 |
Advances on contracts and other customer advances | 125,042 | 107,250 |
Due to unconsolidated affiliate | 0 | 7,733 |
Unit adjustment liability | 0 | 22,320 |
Other current liabilities | 128,519 | 118,657 |
Total current liabilities | 462,937 | 506,123 |
Long-term debt | 649,511 | 845,621 |
Deferred income taxes | 14,531 | 12,095 |
Insurance liabilities | 26,625 | 30,400 |
Retirement plan liabilities | 200,317 | 241,972 |
Due to unconsolidated affiliate | 0 | 13,674 |
Unit adjustment liability | 0 | 57,614 |
Other liabilities | 40,179 | 42,895 |
Total liabilities | 1,394,100 | 1,750,394 |
COMMITMENTS AND CONTINGENCIES | ||
HARSCO CORPORATION STOCKHOLDERS' EQUITY | ||
Preferred stock | 0 | 0 |
Common stock | 140,625 | 140,503 |
Additional paid-in capital | 170,716 | 170,699 |
Accumulated other comprehensive loss | (466,359) | (515,688) |
Retained earnings | 1,166,326 | 1,236,355 |
Treasury stock | (760,391) | (760,299) |
Total Harsco Corporation stockholders' equity | 250,917 | 271,570 |
Noncontrolling interests | 42,107 | 39,233 |
Total equity | 293,024 | 310,803 |
Total liabilities and equity | $ 1,687,124 | $ 2,061,197 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Revenues from continuing operations: | |||||
Service revenues | $ 239,057 | $ 272,463 | $ 714,177 | $ 852,100 | |
Product revenues | 128,730 | 155,871 | 376,824 | 483,560 | |
Total revenues | 367,787 | 428,334 | 1,091,001 | 1,335,660 | |
Costs and expenses from continuing operations: | |||||
Cost of services sold | 192,812 | 224,588 | 574,137 | 714,287 | |
Cost of products sold | 93,499 | 112,043 | 312,131 | 343,825 | |
Selling, general and administrative expenses | 50,249 | 64,526 | 150,553 | 186,891 | |
Research and development expenses | 910 | 1,057 | 2,748 | 3,490 | |
Loss on disposal of the Harsco Infrastructure Segment and transaction costs | 0 | 1,000 | 0 | 1,000 | |
Other expenses | 1,741 | 17,392 | 12,111 | 3,829 | |
Total costs and expenses | 339,211 | 420,606 | 1,051,680 | 1,253,322 | |
Operating income from continuing operations | 28,576 | 7,728 | 39,321 | 82,338 | |
Interest income | 673 | 264 | 1,760 | 951 | |
Interest expense | (13,756) | (11,110) | (39,924) | (34,812) | |
Change in fair value to the unit adjustment liability and loss on dilution and sale of equity method investment | (44,788) | (2,083) | (58,494) | (6,492) | |
Income (loss) from continuing operations before income taxes and equity income (loss) | (29,295) | (5,201) | (57,337) | 41,985 | |
Income tax expense | (5,079) | (6,985) | (14,913) | (26,945) | |
Equity in income (loss) of unconsolidated entities, net | 3,205 | 3,105 | 5,686 | (396) | |
Income (loss) from continuing operations | (31,169) | (9,081) | (66,564) | 14,644 | |
Discontinued operations: | |||||
Income (loss) on disposal of discontinued business | (592) | (637) | 1,788 | (849) | |
Income tax benefit (expense) related to discontinued business | 217 | 235 | (661) | 313 | |
Income (loss) from discontinued operations, net of tax | (375) | (402) | 1,127 | (536) | |
Net income (loss) | (31,544) | (9,483) | (65,437) | 14,108 | |
Less: Net (income) loss attributable to noncontrolling interests | (1,443) | 827 | (4,592) | (925) | |
Net income (loss) attributable to Harsco Corporation | (32,987) | (8,656) | (70,029) | 13,183 | |
Amounts attributable to Harsco Corporation common stockholders: | |||||
Income (loss) from continuing operations, net of tax | (32,612) | (8,254) | (71,156) | 13,719 | |
Income (loss) from discontinued operations, net of tax | (375) | (402) | 1,127 | (536) | |
Net income (loss) attributable to Harsco Corporation | $ (32,987) | $ (8,656) | $ (70,029) | $ 13,183 | |
Weighted-average shares of common stock outstanding (in shares) | 80,379 | 80,238 | 80,318 | 80,233 | |
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | $ (0.41) | $ (0.10) | $ (0.89) | $ 0.17 | |
Discontinued operations (in dollars per share) | 0 | (0.01) | 0.01 | (0.01) | |
Basic earnings (loss) per share attributable to Harsco Corporation common stockholders (in dollars per share) | $ (0.41) | $ (0.11) | $ (0.87) | [1] | $ 0.16 |
Diluted weighted-average shares of common stock outstanding (in shares) | 80,379 | 80,238 | 80,318 | 80,363 | |
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders: | |||||
Continuing operations (in dollars per share) | $ (0.41) | $ (0.10) | $ (0.89) | $ 0.17 | |
Discontinued operations (in dollars per share) | 0 | (0.01) | 0.01 | (0.01) | |
Diluted earnings (loss) per share attributable to Harsco Corporation common stockholders (in dollars per share) | (0.41) | (0.11) | (0.87) | [1] | 0.16 |
Cash dividends declared per common share (in dollars per share) | $ 0 | $ 0.205 | $ 0 | $ 0.615 | |
[1] | Does not total due to rounding |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (31,544) | $ (9,483) | $ (65,437) | $ 14,108 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of deferred income taxes of $(16,992) and $(27,680), and $(3,747) and $(855) for the three and nine months ended September 30, 2016 and 2015, respectively | 9,613 | (36,854) | 6,840 | (74,671) |
Net gain (loss) on cash flow hedging instruments, net of deferred income taxes of $(813) and $(398), and $(799) and $(1,337) for the three and nine months ended September 30, 2016 and 2015, respectively | 1,609 | 4,164 | (942) | 10,045 |
Pension liability adjustments, net of deferred income taxes of $336 and $(920), and $(466) and $(1,405) for the three and nine months ended June 30, 2016 and 2015, respectively | 10,712 | 19,580 | 43,007 | 27,796 |
Unrealized gain (loss) on marketable securities, net of deferred income taxes of $(9) and $(7), and $4 and $7 for the three and nine months ended September 30, 2016 and 2015, respectively | 14 | (8) | 11 | (12) |
Total other comprehensive income (loss) | 21,948 | (13,118) | 48,916 | (36,842) |
Total comprehensive loss | (9,596) | (22,601) | (16,521) | (22,734) |
Less: Comprehensive income attributable to noncontrolling interests | (1,448) | 1,917 | (4,179) | 1,270 |
Comprehensive loss attributable to Harsco Corporation | $ (11,044) | $ (20,684) | $ (20,700) | $ (21,464) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, deferred income taxes | $ (16,992) | $ (3,747) | $ (27,680) | $ (855) |
Net gain (loss) on cash flow hedging instruments, deferred income taxes | (813) | (799) | (398) | (1,337) |
Pension liability adjustments, deferred income taxes | 336 | (466) | (920) | (1,405) |
Unrealized gain (loss) on marketable securities, deferred income taxes | $ (9) | $ 4 | $ (7) | $ 7 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (65,437) | $ 14,108 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 98,284 | 110,343 |
Amortization | 10,003 | 9,003 |
Change in fair value to the unit adjustment liability and loss on dilution and sale of equity method investment | 58,494 | 6,492 |
Deferred income tax expense (benefit) | (2,015) | 9,998 |
Equity in (income) loss of unconsolidated entities, net | (5,686) | 396 |
Dividends from unconsolidated entities | 16 | 0 |
Contract estimated forward loss provision for Harsco Rail Segment | 40,050 | |
Other, net | (3,676) | (12,345) |
Changes in assets and liabilities: | ||
Accounts receivable | 4,055 | 9,161 |
Inventories | (24,295) | (36,472) |
Accounts payable | (10,831) | (3,346) |
Accrued interest payable | 6,245 | 7,658 |
Accrued compensation | 4,481 | (3,640) |
Advances on contracts and other customer advances | 15,352 | 7,548 |
Harsco 2011/2012 Restructuring Program accrual | 0 | (305) |
Other assets and liabilities | (20,285) | (29,497) |
Net cash provided by operating activities | 104,755 | 89,102 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (49,946) | (91,583) |
Proceeds from sales of assets | 7,178 | 20,777 |
Purchases of businesses, net of cash acquired | (26) | (7,705) |
Proceeds from sale of equity investment | 165,640 | 0 |
Payment of unit adjustment liability | 0 | (16,740) |
Other investing activities, net | 7,058 | (7,975) |
Net cash provided (used) by investing activities | 129,904 | (103,226) |
Cash flows from financing activities: | ||
Short-term borrowings, net | (1,527) | 1,211 |
Current maturities and long-term debt: | ||
Additions | 50,835 | 92,993 |
Reductions | (275,768) | (101,679) |
Cash dividends paid on common stock | (4,105) | (49,311) |
Dividends paid to noncontrolling interests | (1,702) | (1,559) |
Purchase of noncontrolling interests | (4,731) | (395) |
Common stock acquired for treasury | 0 | (12,143) |
Proceeds from cross-currency interest rate swap termination | 16,625 | 75,057 |
Deferred pension underfunding payment to unconsolidated affiliate | (20,640) | 0 |
Other financing activities, net | (946) | (2,607) |
Net cash provided (used) by financing activities | (241,959) | 1,567 |
Effect of exchange rate changes on cash | 7,455 | 7,708 |
Net increase (decrease) in cash and cash equivalents | 155 | (4,849) |
Cash and cash equivalents at beginning of period | 79,756 | 62,843 |
Cash and cash equivalents at end of period | $ 79,911 | $ 57,994 |
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, 2014 | $ 351,910 | $ 140,444 | $ (749,815) | $ 165,666 | $ 1,283,549 | $ (532,256) | $ 44,322 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss | 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 $(29,005) and $(5,529) in 2016 and 2015, respectively | (36,842) | (34,647) | (2,195) | ||||
Contributions from noncontrolling interests | 2,100 | 2,100 | |||||
Purchase of subsidiary shares from noncontrolling interest | (398) | (3) | (395) | ||||
Sale of investment in consolidated subsidiary | 200 | 200 | |||||
Vesting of restricted stock units and other stock grants, net 80,598 shares and net 31,147 shares in 2016 and 2015, respectively | (304) | 59 | (264) | (99) | |||
Treasury shares repurchased, 596,632 shares in 2015 | (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 |
Balances at Dec. 31, 2015 | 310,803 | 140,503 | (760,299) | 170,699 | 1,236,355 | (515,688) | 39,233 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss | (65,437) | (70,029) | 4,592 | ||||
Cash dividends declared: | |||||||
Noncontrolling interests | (1,702) | (1,702) | |||||
Total other comprehensive income (loss), net of deferred income taxes of $(29,005) and $(5,529) in 2016 and 2015, respectively | 48,916 | 49,329 | (413) | ||||
Purchase of subsidiary shares from noncontrolling interest | (4,731) | (5,128) | 397 | ||||
Vesting of restricted stock units and other stock grants, net 80,598 shares and net 31,147 shares in 2016 and 2015, respectively | (565) | 122 | (92) | (595) | |||
Amortization of unearned portion of stock-based compensation, net of forfeitures | 5,740 | 5,740 | |||||
Balances at Sep. 30, 2016 | $ 293,024 | $ 140,625 | $ (760,391) | $ 170,716 | $ 1,166,326 | $ (466,359) | $ 42,107 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash dividends declared per common share (in dollars per share) | $ 0 | $ 0.615 |
Other Comprehensive Income (Loss), Tax | $ (29,005) | $ (5,529) |
Vesting of restricted stock units and other (in shares) | 80,598 | 31,147 |
Common Stock Treasury | ||
Treasury shares repurchased | 0 | 596,632 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
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, 2015 Condensed Consolidated Balance Sheet information contained in this Quarterly Report on Form 10-Q was derived from the 2015 audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. (“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, 2015 . Operating results and cash flows for the three and nine months ended September 30, 2016 are not indicative of the results that may be expected for the year ending December 31, 2016 . Reclassifications Certain reclassifications have been made to prior year amounts to conform with current year classifications. Significant Accounting Policies - Revenue Recognition Product revenues are recognized when they are realized or realizable and when earned. Revenue is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company's price to the buyer is fixed or determinable and collectability is reasonably assured. Product revenues include the Harsco Industrial Segment and the product revenues of the Harsco Metals & Minerals and Harsco Rail Segments. Certain contracts within the Harsco Rail Segment, which meet specific criteria established in U.S. GAAP, are accounted for as long-term contracts. The Company recognizes revenues on two contracts from the federal railway system of Switzerland ("SBB") based on the percentage-of-completion (units-of-delivery) method of accounting, whereby revenues and estimated average costs of the units to be produced under the contracts are recognized as deliveries are made or accepted. Contract revenues and cost estimates are reviewed and revised, at a minimum quarterly, and adjustments are reflected in the accounting period as such amounts are determined. Change in Estimates Accounting for contracts using the percentage-of-completion method requires judgment relative to assessing risks, estimating contract revenues and costs (including estimating any liquidating damages or penalties related to performance) and making assumptions for schedule and technical items. Due to the number of years it may take to complete these contracts and the scope and nature of the work required to be performed on those contracts, estimating total sales and costs at completion is inherently complicated and subject to many variables and, accordingly estimates are subject to change. When adjustments in estimated total contract sales or estimated total costs are required, any changes from prior estimates are recognized in the current period for the inception-to-date effect of such changes. When estimates of total costs to be incurred on a contract, using the percentage-of-completion method, exceed estimates of total sales to be earned, a provision for the entire loss on the contract is recorded in the period in which the loss is determined. During the second quarter of 2016, as a result of increased vendor costs, ongoing discussions with SBB, and increased estimates for commissioning, certification and testing costs, as well as expected settlements with SBB, the Company concluded it will have a loss on the contracts with SBB. The majority of the equipment deliveries and related revenue recognition under these contracts are expected in 2017 through 2020. The Company recognized an estimated forward loss provision related to the SBB contracts of $40.1 million for the nine months ended September 30, 2016 in the caption Costs of products sold in the Condensed Consolidated Statements of Operations. There was no estimated forward loss provision at December 31, 2015. See Note 3, Accounts Receivable and Inventories, for additional information related to the SBB contracts. |
Recently Adopted and Recently I
Recently Adopted and Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2016 | |
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 2016 : On January 1, 2016, the Company adopted changes issued by the Financial Accounting Standards Board ("FASB") related to reporting extraordinary and unusual items. The changes simplified income statement presentation by eliminating the concept of extraordinary items. The changes became effective for the Company on January 1, 2016. The adoption of these changes did not have an impact on the Company's condensed consolidated financial statements. On January 1, 2016, the Company adopted changes issued by the FASB related to consolidation. The changes updated consolidation analysis and affected reporting entities that are required to evaluate whether they should consolidate certain legal entities. The changes became effective for the Company on January 1, 2016. The adoption of these changes did not have a material impact on the Company's condensed consolidated financial statements. On January 1, 2016, the Company adopted changes issued by the FASB related to simplifying the presentation of debt issuance costs. The changes required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that 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 became effective for the Company on January 1, 2016. The adoption of these changes resulted in the reclassification of approximately $8 million and approximately $10 million at September 30, 2016 and December 31, 2015 , respectively, in deferred financing costs from Other assets to Long-term debt on the Company's Condensed Consolidated Balance Sheets for all periods presented. On January 1, 2016, the Company adopted changes issued by the FASB 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 became effective for the Company on January 1, 2016. The adoption of these changes did not have a material impact on the Company's condensed consolidated financial statements. On January 1, 2016, the Company adopted changes issued by the FASB simplifying the accounting for measurement period adjustments for business combinations. The changes resulted 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 required additional disclosure related to such measurement period adjustments. The changes became effective for the Company on January 1, 2016. The adoption of these changes did not have an impact on the Company's condensed consolidated financial statements; however in the future will have an effect on how the Company reports adjustments to provisional amounts during the measurement period. 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. During 2016, the FASB clarified the implementation guidance for principal versus agent considerations, identifying performance obligations, accounting for intellectual property licenses, collectability, non-cash consideration and the presentation of sales and other similar taxes, as well as introduced practical expedients related to disclosures of remaining performance obligations. These changes become effective for the Company on January 1, 2018. Management is currently evaluating the impact of these changes on its condensed consolidated financial statements. 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 for the annual period ending December 31, 2016 and interim periods thereafter. Management has evaluated these changes and does not expect these changes will 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 November 2015, the FASB issued changes that require deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position. The changes apply to all entities that present a classified statement of financial position. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected. The changes become effective for the Company on January 1, 2017. Had these changes been adopted, the Company's working capital would have decreased by approximately $27 million and $38 million at September 30, 2016 and December 31, 2015 , respectively. In February 2016, the FASB issued changes in accounting for leases. The changes introduce a lessee model that brings most leases on the balance sheet. The changes also align many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. Furthermore, the changes address other concerns related to the current leases model such as eliminating the requirement in current guidance for an entity to use bright-line tests in determining lease classification. The changes also require lessors to increase the transparency of their exposure to changes in value of their residual assets and how they manage that exposure. The changes become effective for the Company on January 1, 2019. Management is currently evaluating the impact of these changes on its condensed consolidated financial statements. In March 2016, the FASB issued changes related to the simplification of several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The changes become effective for the Company on January 1, 2017. Management is currently evaluating the impact of these changes on its condensed consolidated financial statements and does not expect them to have a material impact. In August 2016, the FASB issued changes to address eight specific cash flow presentation issues with the objective of reducing diversity in practice. The issues identified include: debt prepayments or extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The changes become effective for the Company on January 1, 2018. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. |
Accounts Receivable and Invento
Accounts Receivable and Inventories | 9 Months Ended |
Sep. 30, 2016 | |
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 $ 276,625 $ 280,526 Less: Allowance for doubtful accounts (13,091 ) (25,649 ) Trade accounts receivable, net $ 263,534 $ 254,877 Other receivables (a) $ 17,595 $ 30,395 (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 decrease in Allowance for doubtful accounts in 2016 is due to the write-off of previously reserved accounts receivable balances. 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) 2016 2015 2016 2015 Provision for doubtful accounts related to trade accounts receivable $ (93 ) $ 10,005 $ 84 $ 10,615 Inventories consist of the following: (In thousands) September 30 December 31 Finished goods $ 30,198 $ 32,586 Work-in-process 30,273 30,959 Contracts-in-process 55,675 55,786 Raw materials and purchased parts 67,287 70,755 Stores and supplies 25,262 26,881 Inventories $ 208,695 $ 216,967 Contracts-in-process consist of the following: (In thousands) September 30 December 31 Contract costs accumulated to date 90,668 55,786 Estimated forward loss provisions for contracts-in-process (a) (34,993 ) — Contracts-in-process 55,675 55,786 (a) To the extent that the estimated forward loss provision exceeds accumulated contract costs it is included in the caption Other current liabilities on the Condensed Consolidated Balance Sheets. At September 30, 2016 this amount totaled $5.5 million . At September 30, 2016 and December 31, 2015 , the Company has $106.8 million and $82.7 million , respectively, of customer advances related to contracts-in-process. These amounts are included in the caption Advances on contracts and other customer advances on the Condensed Consolidated Balance Sheets. |
Equity Method Investments
Equity Method Investments | 9 Months Ended |
Sep. 30, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments In November 2013, the Company sold 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 retained an equity interest in Brand Energy & Infrastructure Service, Inc. and Subsidiaries ("Brand" or the "Infrastructure strategic venture") which was accounted for as an equity method investment in accordance with U.S. GAAP. The Company's equity interest in Brand at December 31, 2015 was approximately 29% . As part of the Infrastructure Transaction, the Company was 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 3% of the Company's ownership interest in the Infrastructure strategic venture on an annual basis (the "unit adjustment liability"). The Company recognized the change in fair value to the unit adjustment liability each period until the Company was no longer required to make these payments or chose not to make these payments. The change in fair value to the unit adjustment liability was a non-cash expense. In March 2016, the Company elected not to make the quarterly cash payments to the Company's partner in the Infrastructure strategic venture for the remainder of 2016. Instead, the Company transferred approximately 3% of its ownership interest in satisfaction of the Company's 2016 obligation related to the unit adjustment liability. As a result of not making the quarterly cash payments for 2016, the Company's ownership interest in the Infrastructure strategic venture decreased by approximately 3% and the value of the unit adjustment liability was updated to reflect this change. Accordingly, the book value of the Company's equity method investment in Brand decreased by $29.4 million and the unit adjustment liability decreased by $19.1 million . The resulting net loss of $10.3 million was recognized in the Condensed Consolidated Statement of Operations caption Change in fair value to the unit adjustment liability and loss on dilution and sale of equity method investment. This net loss was a non-cash expense. In September 2016, the Company entered into an Omnibus Agreement with CDR Bullseye Holdings, L.P., Bullseye G.P., LLC, Bullseye Partnership, L.P., Bullseye Holdings, L.P. and Brand Energy & Infrastructure Holdings, Inc. (the “Brand Entities”), pursuant to which the Brand Entities repurchased the Company's remaining approximate 26% interest in Brand. In exchange for the Company's interest, (i) the Company received $145 million in cash, net, and (ii) the requirement for the Company to fund certain obligations to Brand through 2018 were satisfied, the present value of which equaled $20.6 million . In addition, the Company received $1.4 million in accrued but unpaid fees, rent and expenses from the Brand Entities. As a result of the sale, the Company’s obligation to make quarterly payments related to the unit adjustment liability under the terms of a limited partnership agreement that governed the operation of the strategic venture terminated. The Company recognized a loss on the sale of its equity interest in Brand in the amount of $43.5 million which was reflected in the Condensed Consolidated Statement of Operations caption Change in fair value to unit adjustment liability and loss on dilution and sale of equity method investment. For the three and nine months ended September 30, 2016 , the Company recognized $1.3 million and $4.7 million , respectively, of change in fair value to the unit adjustment liability, exclusive of the fair value adjustment resulting from the decision not to make the quarterly payments in 2016 and the loss related to the sale of the Company's interest, in the Condensed Consolidated Statement of Operations caption Change in fair value to the unit adjustment liability and loss on dilution and sale of equity method investment. This compared to $2.1 million and $6.5 million for the three and nine months ended September 30, 2015 , respectively. The Condensed Consolidated Balance Sheet as of December 31, 2015 included balances related to the unit adjustment liability of $79.9 million 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 12, Derivative Instruments, Hedging Activities and Fair Value. The book value of the Company's equity method investment in Brand at December 31, 2015 was $250.1 million . The Company's proportionate share of Brand's net income or loss is recorded one quarter in arrears. Brand's results of operations are summarized as follows: Three Months Ended Nine Months Ended June 30 June 30 (In thousands) 2016 2015 2016 2015 Net revenues $ 782,415 $ 736,178 $ 2,333,561 $ 2,217,904 Gross profit 169,456 154,710 499,005 486,656 Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries 12,378 10,817 20,756 (1,384 ) Harsco's equity in income (loss) of Brand 3,205 3,105 5,686 (396 ) Balances related to transactions between the Company and Brand are as follows: (In thousands) September 30 December 31 Balances due from Brand $ — $ 1,557 Balances due to Brand 26 21,407 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
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 $ 10,906 $ 10,932 Land improvements 15,172 15,277 Buildings and improvements 189,864 191,356 Machinery and equipment 1,614,597 1,661,914 Construction in progress 23,656 36,990 Gross property, plant and equipment 1,854,195 1,916,469 Less: Accumulated depreciation (1,335,944 ) (1,352,434 ) Property, plant and equipment, net $ 518,251 $ 564,035 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 : (In thousands) Harsco Metals & Minerals Segment Harsco Industrial Segment Harsco Rail Segment Consolidated Totals Balance at December 31, 2015 $ 380,761 $ 6,806 $ 12,800 $ 400,367 Changes to goodwill — 33 226 259 Foreign currency translation (8,969 ) — — (8,969 ) Balance at September 30, 2016 $ 371,792 $ 6,839 $ 13,026 $ 391,657 The Company’s 2015 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 15% . 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, 2016 , 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 indicate further 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, 2016 December 31, 2015 (In thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer related $ 149,719 $ 113,482 $ 153,287 $ 111,227 Non-compete agreements 1,096 1,096 1,092 1,092 Patents 5,783 5,532 5,882 5,495 Technology related 25,836 25,343 25,559 23,089 Trade names 8,309 4,455 8,303 4,194 Other 8,663 5,118 8,701 4,669 Total $ 199,406 $ 155,026 $ 202,824 $ 149,766 Amortization expense for intangible assets was as follows: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2016 2015 2016 2015 Amortization expense for intangible assets $ 2,053 $ 2,286 $ 6,208 $ 6,602 The estimated amortization expense for the next five fiscal years based on current intangible assets is as follows: (In thousands) 2016 2017 2018 2019 2020 Estimated amortization expense (a) $ 8,000 $ 5,500 $ 5,250 $ 4,750 $ 4,500 (a) 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, 2016 | |
Debt Disclosure [Abstract] | |
Debt and Credit Agreements | Debt and Credit Agreements On December 2, 2015, the Company entered into (i) an amendment and restatement agreement (the “Amendment Agreement”) and (ii) a second amended and restated credit agreement (the “Credit Agreement” and, together with the Amendment Agreement, the “Financing Agreements”). The Financing Agreements increased the Company's overall borrowing capacity from $500 million to $600 million by (i) amending and restating the Company’s existing credit agreement, (ii) establishing a term loan facility in an initial aggregate principal amount of $250 million , by converting a portion of the outstanding balance under the Initial Credit Agreement on a dollar-for-dollar basis (such facility, the “Term Loan Facility”) and (iii) reducing the revolving credit facility limit to $350 million (the “Revolving Credit Facility”). During September 2016, the Company received approximately $145 million in cash, net, from its sale of its remaining 26% equity interest in the Infrastructure strategic venture. The Company used these proceeds to repay $85.0 million on its Term Loan Facility and $60.0 million on its Revolving Credit Facility. Related to the repayment of the Term Loan Facility, the Company expensed $1.1 million of previously deferred financing costs associated with the Term Loan Facility. The balance of the Company's Term Loan Facility was $158.8 million and $250.0 million at September 30, 2016 and December 31, 2015, respectively. The balance of the Company's Revolving Credit Facility was $40.0 million and $165.0 million at September 30, 2016 and December 31, 2015, respectively. In November 2016, the Company entered into a new senior secured credit facility (the “New Credit Facility”), consisting of a $400 million revolving credit facility and a $550 million term loan B facility. Upon closing of the New Credit Facility, the Company has amended and extended the existing Revolving Credit Facility, repaid the existing Term Loan Facility and will redeem, satisfy and discharge the 5.75% Senior Notes due 2018 (the “Notes”) in accordance with the indenture governing the Notes. As a result, an estimated charge of approximately $37 million will be recorded during the fourth quarter of 2016 consisting principally of the cost of early extinguishment of the Notes and the write-off of unamortized deferred financing costs associated with the Company’s existing Senior Secured Credit Facilities and the Notes. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2016 | |
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) 2016 2015 2016 2015 Service cost $ 945 $ 722 $ 405 $ 428 Interest cost 2,545 3,089 6,542 9,146 Expected return on plan assets (3,601 ) (4,203 ) (10,475 ) (12,630 ) Recognized prior service costs 16 20 44 47 Recognized loss 1,373 1,230 2,923 4,244 Settlement/curtailment losses 223 — — — Defined benefit pension plans net periodic pension cost (income) $ 1,501 $ 858 $ (561 ) $ 1,235 Nine Months Ended September 30 Defined Benefit Pension Plans Net Periodic Pension Cost U.S. Plans International Plans (In thousands) 2016 2015 2016 2015 Service costs $ 2,837 $ 2,167 $ 1,214 $ 1,320 Interest cost 7,635 9,268 20,649 27,475 Expected return on plan assets (10,803 ) (12,609 ) (33,157 ) (37,914 ) Recognized prior service costs 47 60 133 144 Recognized loss 4,117 3,689 9,283 12,700 Settlement/curtailment losses 223 — — — Defined benefit pension plans net periodic pension cost (income) $ 4,056 $ 2,575 $ (1,878 ) $ 3,725 The Company has changed the method utilized to estimate the 2016 service cost and interest cost components of net periodic pension cost ("NPPC") for defined benefit pension plans. The more precise application of discount rates for measuring both service costs and interest costs employs yield curve spot rates on a year-by-year expected cash flow basis, using the same yield curves that the Company has previously used. This change in method represented a change in accounting estimate and has been accounted for in the period of change. This change in method decreased the Company's NPPC by approximately $2 million and approximately $5 million for the three and nine months ended September 30, 2016 , respectively, compared to what NPPC would have been under the prior method. Three Months Ended Nine Months Ended Company Contributions September 30 September 30 (In thousands) 2016 2015 2016 2015 Defined benefit pension plans (U.S.) $ 471 $ 567 $ 1,411 $ 1,841 Defined benefit pension plans (International) 3,170 3,935 16,222 24,166 Multiemployer pension plans 494 570 1,520 1,876 Defined contribution pension plans 2,291 2,619 7,593 8,884 The Company's estimate of expected contributions to be paid during the remainder of 2016 for the U.S. and international defined benefit plans are $0.5 million and $3.4 million , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 was $5.1 million and $14.9 million , respectively, compared with $7.0 million and $26.9 million for the three and nine months ended September 30, 2015 , respectively. Additionally, there was no income tax benefit realized from the loss on the sale of the Company's equity method investment in the Infrastructure strategic venture, as a valuation allowance of $16.1 million was established to offset the deferred tax assets on the resulting capital loss carryforward, because the Company determined that it is not more likely than not that this benefit will be realized in the future. 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, 2016 was $6.0 million , including interest and penalties. Within the next twelve months, it is reasonably possible that no 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, 2016 | |
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 Company did not have any material accruals or record any material expenses related to environmental matters during the periods presented. The Company evaluates its liability for future environmental remediation costs on a quarterly basis. Although actual costs to be incurred at identified sites 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, 2016 , the principal amount of the tax assessment from the SPRA with regard to this case is approximately $2 million , with penalty, interest and fees assessed to date increasing such amount by an additional $23 million . Any change in the aggregate amount since the Company’s last Annual Report on Form 10-K for the year ended December 31, 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 $7.7 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 $1.8 million , with penalty and interest assessed through that date increasing such amount by an additional $5.9 million . All such amounts include the effect of foreign currency translation. The Company continues to believe 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, 2016 and December 31, 2015 , the Company has established reserves of $8.5 million and $6.9 million , respectively, on the Company's Condensed Consolidated Balance Sheets for amounts considered to be probable and estimable. 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, may, in the normal course of business, become involved in commercial disputes with subcontractors or customers. During the first quarter of 2015, a rail grinder manufactured by the Company's Harsco Rail Segment and operated by a subcontractor caught fire, causing a customer to incur monetary damages. A court-led investigation into the cause of the accident was performed, but the results did not ascribe liability to any particular party. Depending on the cause of the fire and the extent of insurance coverage, the Company's results of operations and cash flows may be impacted in future periods. Although results of operations and cash flows for a given period could be adversely affected by a negative outcome in these or other lawsuits, claims 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. Lima Refinery Litigation On April 8, 2016, Lima Refining Company filed a lawsuit against the Company in the District Court of Harris County, Texas related to a January 2015 explosion at an oil refinery operated by Lima Refining Company. The action seeks approximately $95 million in property damages and $250 million in lost profits and business interruption damages. The action alleges the explosion occurred because of a defect in a heat exchange cooler manufactured by Hammco Corporation ("Hammco") in 2009, prior to the Company’s acquisition of Hammco in 2014. The Company is vigorously contesting the allegations against it both as to liability for the accident and the amount of the claimed damages. As a result, the Company believes the situation will not result in a probable loss. The Company has both an indemnity right from the sellers of Hammco and liability insurance coverage under various primary and excess policies that the Company believes will be available, if necessary, to cover substantially all of any such liability that might ultimately be incurred in the above action. U.K. Health and Safety Executive Matter In the third quarter of 2016, a subsidiary in the Company’s Harsco Metals & Minerals Segment, along with one of its customers, was named as a co-defendant in an action brought by the U.K. Health and Safety Executive in the U.K. Crown Court Sitting at Kingston-Upon Hull. The action relates to a fatal accident involving one of the customer’s employees in 2010. The action seeks to levy a fine against the Company. The Company believes that it is not responsible for the accident and is defending the action vigorously. A loss provision related to this action has not been recorded in the Company’s condensed consolidated financial statements, because the Company believes that a loss is not probable. However, if the outcome of the proceedings is unfavorable, the Company does not believe that it would have a material adverse affect on the Company's financial condition, result of operations or cash flows. Other The Company is named as one of many defendants (approximately 90 or more in most cases) in legal actions in the U.S. alleging personal injury from exposure to airborne asbestos over the past several decades. In their suits, the plaintiffs have named as defendants, among others, many manufacturers, distributors and installers of numerous types of equipment or products that allegedly contained asbestos. 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, 2016 , there were 17,076 pending asbestos personal injury actions filed against the Company. Of those actions, 16,762 were filed in the New York Supreme Court (New York County), 111 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, 2016 , 16,743 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 19 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 U.S., the Company expects to continue to receive additional claims in the future. The Company intends to continue its practice of vigorously defending these claims and cases. At September 30, 2016 , the Company has obtained dismissal in 27,892 cases by stipulation or summary judgment prior to trial. It is not possible to predict the ultimate outcome of asbestos-related actions in the U.S. due to the unpredictable nature of this litigation, and no loss provision has been recorded in the Company's condensed consolidated financial statements because a loss contingency is not deemed probable or estimable. Despite this uncertainty, and although results of operations and cash flows for a given period could be adversely affected by asbestos-related actions, the Company does not expect that any costs that are reasonably possible to be incurred by the Company in connection with asbestos litigation would have a material adverse effect on the Company's financial condition, results of operations or cash flows. 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, 2015 for additional information on Accrued insurance and loss reserves. In addition, from time to time, the Company is subject to legal proceedings, claims, and litigation, including commercial and contract disputes and employment matters, arising in the ordinary course of business. The Company defends itself vigorously against any such claims. Although the outcome of these matters is currently not determinable, management expects that any losses that are probable or reasonably possible of being incurred as a result of these matters, which are in excess of amounts already accrued in the Company’s condensed consolidated balance sheets, would not be material to the financial statements as a whole. |
Reconciliation of Basic and Dil
Reconciliation of Basic and Diluted Shares | 9 Months Ended |
Sep. 30, 2016 | |
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) 2016 2015 2016 2015 Income (loss) from continuing operations attributable to Harsco Corporation common stockholders $ (32,612 ) $ (8,254 ) $ (71,156 ) $ 13,719 Weighted-average shares outstanding - basic 80,379 80,238 80,318 80,233 Dilutive effect of stock-based compensation — — — 130 Weighted-average shares outstanding - diluted 80,379 80,238 80,318 80,363 Earnings (loss) from continuing operations per common share, attributable to Harsco Corporation common stockholders: Basic $ (0.41 ) $ (0.10 ) $ (0.89 ) $ 0.17 Diluted $ (0.41 ) $ (0.10 ) $ (0.89 ) $ 0.17 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) 2016 2015 2016 2015 Restricted stock units 922 441 770 — Stock options 90 90 90 101 Stock appreciation rights 1,567 1,265 1,432 1,156 Performance share units 801 322 649 265 |
Derivative Instruments, Hedging
Derivative Instruments, Hedging Activities and Fair Value | 9 Months Ended |
Sep. 30, 2016 | |
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 exchange forward contracts and cross-currency interest rate swaps ("CCIRs"), to manage certain foreign currency and interest rate exposures. Derivative instruments are viewed as risk management tools by the Company and are not used for trading or speculative purposes. All derivative instruments are recorded on the 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, 2016 , deferred gains and losses related to asset purchases are reclassified to earnings over 10 to 15 years from the balance sheet date, and those related to revenue are deferred until the revenue is recognized. The ineffective portion of all hedges, if any, is recognized currently in earnings. The fair value of outstanding derivative contracts recorded as assets and liabilities on the Condensed Consolidated Balance Sheets were as follows: Asset Derivatives Liability Derivatives (In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value September 30, 2016 Derivatives designated as hedging instruments: Foreign currency exchange forward contracts Other current assets $ 60 Other current liabilities $ 97 Cross-currency interest rate swaps Other assets 595 — Total derivatives designated as hedging instruments $ 655 $ 97 Derivatives not designated as hedging instruments : Foreign currency exchange forward contracts Other current assets $ 2,448 Other current liabilities $ 4,691 Asset Derivatives Liability Derivatives (In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value December 31, 2015 Derivatives designated as hedging instruments: Foreign currency exchange forward contracts Other current assets $ 1,640 $ — Cross-currency interest rate swaps Other assets 15,417 — Total derivatives designated as hedging instruments $ 17,057 $ — Derivatives not designated as hedging instruments : Foreign currency exchange forward contracts Other current assets $ 4,188 Other current liabilities $ 1,738 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 CCIRs and certain foreign currency exchange forward 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, 2016 or December 31, 2015 . The effect of derivative instruments on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Loss was as follows: Derivatives Designated as Hedging Instruments (a) (In thousands) Amount of Gain (Loss) Recognized in Other Comprehensive Income (“OCI”) on Derivative - Effective Portion Location of Gain Reclassified from Accumulated OCI into Income - Effective Portion Amount of Gain Reclassified from Accumulated OCI into Income - Effective Portion Location of Loss 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, 2016: Foreign currency exchange forward contracts $ 2,378 $ — $ — Cross-currency interest rate swaps 265 — Cost of services and products sold (232 ) (b) $ 2,643 $ — $ (232 ) Three Months Ended September 30, 2015: Foreign currency exchange forward contracts $ 2,532 Cost of services and products sold $ 78 $ — Cross-currency interest rate swaps 2,446 — Cost of services and products sold 13,087 (b) $ 4,978 $ 78 $ 13,087 (In thousands) Amount of Gain (Loss)Recognized in OCI on Derivative - Effective Portion Location of Gain 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 Gain Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Nine Months Ended September 30, 2016: Foreign currency forward exchange contracts $ 1,748 Product revenues / Cost of services and products sold $ 409 $ — Cross currency interest rate swaps (1,819 ) — Cost of services and products sold 3,987 (b) $ (71 ) $ 409 $ 3,987 Nine Months Ended September 30, 2015: Foreign currency forward exchange contracts $ 4,132 Cost of services and products sold $ 80 $ — Cross currency interest rate swaps 8,531 — Cost of services and products sold 24,739 (b) $ 12,663 $ 80 $ 24,739 (a) Reflects only the activity of the Company and excludes derivative designated as hedging instruments held by the Company's equity method investments. (b) These gains 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 Recognized in Income on Derivative for the Three Months Ended September 30 (c) (In thousands) 2016 2015 Foreign currency exchange forward contracts Cost of services and products sold $ 552 $ 2,724 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 (c) (In thousands) 2016 2015 Foreign currency forward exchange contracts Cost of services and products sold $ 2,292 $ (4,510 ) (c) These gains (losses) offset amounts recognized in cost of services and products sold principally as a result of intercompany or third party foreign currency exposures. Foreign Currency Exchange Forward Contracts The Company conducts business in multiple currencies and, accordingly, is subject to the inherent risks associated with foreign exchange rate movements. 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 exchange forward contracts outstanding are part of a worldwide program to minimize foreign currency exchange operating income and balance sheet exposure by offsetting foreign currency exposures of certain future payments between the Company and various subsidiaries, suppliers or customers. 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 exchange forward contracts are used to hedge commitments, such as foreign currency debt, firm purchase commitments and foreign currency cash flows for certain export sales transactions. The following tables summarize, by major currency, the contractual amounts of the Company’s foreign currency exchange forward contracts in U.S. dollars. 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 Exchange Forward Contracts Outstanding at September 30, 2016 : (In thousands) Type U.S. Dollar Equivalent Maturity Recognized Gain (Loss) British pounds sterling Sell $ 45,864 October 2016 $ 513 British pounds sterling Buy 1,088 October 2016 through December 2016 (9 ) Euros Sell 310,174 October 2016 through December 2016 (3,265 ) Euros Buy 155,478 October 2016 through January 2018 604 Other currencies Sell 45,658 October 2016 through September 2017 (135 ) Other currencies Buy 8,957 October 2016 through December 2016 11 Total $ 567,219 $ (2,281 ) Contracted Amounts of Foreign Currency Exchange Forward Contracts Outstanding at December 31, 2015 : (In thousands) Type U.S. Dollar Equivalent Maturity Recognized Gain (Loss) British pounds sterling Sell $ 43,511 January 2016 $ 822 British pounds sterling Buy 2,062 January 2016 (54 ) Euros Sell 336,397 January 2016 through December 2016 547 Euros Buy 167,037 January 2016 through August 2016 2,497 Other currencies Sell 35,426 January 2016 through March 2016 316 Other currencies Buy 7,981 January 2016 (38 ) Total $ 592,414 $ 4,090 In addition to foreign currency exchange forward contracts, the Company designates certain loans as hedges of net investments in international subsidiaries. The Company recorded pre-tax net losses of $9.0 million and $29.3 million during the three and nine months ended September 30, 2016 , respectively, and a pre-tax net loss of $2.2 million and a pre-tax net gain of $2.4 million during the three and nine months ended September 30, 2015 , respectively, into Accumulated other comprehensive loss . Cross-Currency Interest Rate Swaps The Company uses CCIRs in conjunction with certain debt issuances in order to secure a fixed local currency interest rate. Under these CCIRs, 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 CCIRs 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 CCIRs at September 30, 2016 : Interest Rates (In millions) Contractual Amount Receive Pay Maturing 2017 $ 3.4 Floating U.S. dollar rate Fixed rupee rate During March 2016, the Company effected the early termination of the British pound sterling CCIR with an original maturity date of 2020. The Company received $16.6 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: Level 2 Fair Value Measurements (In thousands) September 30 December 31 Assets Foreign currency exchange forward contracts $ 2,508 $ 5,828 Cross-currency interest rate swaps 595 15,417 Liabilities Foreign currency exchange forward contracts 4,788 1,738 The following table reconciles the beginning and ending balances for liabilities measured on a recurring basis using unobservable inputs (Level 3): Level 3 Liabilities—Unit Adjustment Liability (d) for the Nine Months Ended June 30 Nine Months Ended September 30 2016 2015 Balance at beginning of period $ 79,934 $ 93,762 Reduction in the fair value related to election not to make 2016 payments (19,145 ) — Sale of equity interest in Brand (65,461 ) — Payments — (16,740 ) Change in fair value to the unit adjustment liability 4,672 6,492 Balance at end of period $ — $ 83,514 (d) During the quarter ended March 31, 2016, the Company decided that it would not make the four quarterly payments to CD&R for 2016. This resulted in the Company revaluing the Unit Adjustment Liability. In September 2016, the Company sold its equity interest in Brand. See Note 4, 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 exchange forward contracts and CCIRs 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, 2016 and December 31, 2015 , the total fair value of long-term debt (excluding deferred financing costs), including current maturities, was $682.1 million and $834.6 million , respectively, compared with a carrying value of $678.1 million and $880.8 million , respectively. Fair values for debt are based on quoted market prices for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities (Level 2). |
Review of Operations by Segment
Review of Operations by Segment | 9 Months Ended |
Sep. 30, 2016 | |
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) 2016 2015 2016 2015 Revenues From Continuing Operations Harsco Metals & Minerals $ 247,691 $ 277,367 $ 730,923 $ 862,901 Harsco Industrial 63,422 91,199 191,561 281,883 Harsco Rail 56,674 59,768 168,517 190,876 Total revenues from continuing operations $ 367,787 $ 428,334 $ 1,091,001 $ 1,335,660 Operating Income (Loss) From Continuing Operations Harsco Metals & Minerals $ 24,066 $ (3,331 ) $ 61,934 $ 25,851 Harsco Industrial 6,312 13,934 20,083 45,380 Harsco Rail 4,599 7,786 (22,443 ) 40,819 Corporate (6,401 ) (10,661 ) (20,253 ) (29,712 ) Total operating income from continuing operations $ 28,576 $ 7,728 $ 39,321 $ 82,338 Depreciation and Amortization Harsco Metals & Minerals $ 30,255 $ 34,636 $ 91,942 $ 104,368 Harsco Industrial 1,827 1,855 5,395 4,507 Harsco Rail 1,441 1,476 4,236 4,670 Corporate 3,102 1,799 6,714 5,801 Total Depreciation and Amortization $ 36,625 $ 39,766 $ 108,287 $ 119,346 Capital Expenditures Harsco Metals & Minerals $ 15,272 $ 23,205 $ 43,997 $ 72,748 Harsco Industrial 1,817 3,662 4,113 12,467 Harsco Rail 497 374 1,636 1,599 Corporate 184 1,096 200 4,769 Total Capital Expenditures $ 17,770 $ 28,337 $ 49,946 $ 91,583 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) 2016 2015 2016 2015 Segment operating income $ 34,977 $ 18,389 $ 59,574 $ 112,050 General Corporate expense (6,401 ) (10,661 ) (20,253 ) (29,712 ) Operating income from continuing operations 28,576 7,728 39,321 82,338 Interest income 673 264 1,760 951 Interest expense (13,756 ) (11,110 ) (39,924 ) (34,812 ) Change in fair value to the unit adjustment liability and loss on dilution and sale of equity method investment (44,788 ) (2,083 ) (58,494 ) (6,492 ) Income (loss) from continuing operations before income taxes and equity income (loss) $ (29,295 ) $ (5,201 ) $ (57,337 ) $ 41,985 |
Other Expenses
Other Expenses | 9 Months Ended |
Sep. 30, 2016 | |
Other Income and Expenses [Abstract] | |
Other Expenses | Other Expenses The major components of this Condensed Consolidated Statements of Operations caption are as follows: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2016 2015 2016 2015 Employee termination benefit costs $ 1,790 $ 3,454 $ 8,756 $ 5,962 Harsco Metals & Minerals Segment separation costs 1 — 3,298 — Net gains (a) (608 ) (1,747 ) (1,365 ) (8,479 ) Foreign currency gains related to Harsco Rail Segment advances on contracts and other customer advances — — — (10,940 ) Bahrain salt cake disposal — 7,000 — 7,000 Subcontractor settlement — 4,220 — 4,220 Other 558 4,465 1,422 6,066 Other expenses $ 1,741 $ 17,392 $ 12,111 $ 3,829 (a) Net gains result from the sales of redundant properties (primarily land, buildings and related equipment) and non-core assets. |
Components of Accumulated Other
Components of Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2016 | |
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, 2015 and 2016 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, 2014 $ (39,938 ) $ (9,025 ) $ (483,278 ) $ (15 ) $ (532,256 ) Other comprehensive income (loss) before reclassifications (61,537 ) (a) 10,905 (b) 12,012 (a) (12 ) (38,632 ) Realized (gains) losses reclassified from accumulated other comprehensive loss, net of tax — (52 ) 15,188 — 15,136 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 ) 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, 2015 $ (125,561 ) $ (400 ) $ (389,696 ) $ (31 ) $ (515,688 ) Other comprehensive income (loss) before reclassifications (23,744 ) (a) (1,915 ) (b) 32,067 (a) 11 6,419 Realized (gains) losses reclassified from accumulated other comprehensive loss, net of tax — (258 ) 12,168 — 11,910 Realized (gains) losses reclassified from accumulated other comprehensive loss in connection with loss on dilution of equity method investment (See Note 4, Equity Method Investments) 28,641 1,636 (1,534 ) — 28,743 Other comprehensive income (loss) from equity method investee 1,943 (405 ) 306 — 1,844 Total other comprehensive income (loss) 6,840 (942 ) 43,007 11 48,916 Less: Other comprehensive (income) loss attributable to noncontrolling interests 420 (7 ) — — 413 Other comprehensive income (loss) attributable to Harsco Corporation 7,260 (949 ) 43,007 11 49,329 Balance at September 30, 2016 $ (118,301 ) $ (1,349 ) $ (346,689 ) $ (20 ) $ (466,359 ) (a) Principally foreign currency fluctuation. (b) Net change from periodic revaluations. Realized (gains) losses reclassified from accumulated other comprehensive loss are as follows: (In thousands) 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 cash flow hedging instruments: Foreign currency exchange forward contracts $ — $ — $ (408 ) $ — Product revenues Foreign currency exchange forward contracts — (78 ) (1 ) (80 ) Cost of services and products sold Total before tax — (78 ) (409 ) (80 ) Tax expense — 28 151 28 Total reclassification of cash flow hedging instruments, net of tax $ — $ (50 ) $ (258 ) $ (52 ) Amortization of defined benefit pension items: Actuarial losses (c) $ 2,042 $ 4,000 $ 6,703 $ 11,942 Selling, general and administrative expenses Actuarial losses (c) 2,253 1,473 6,696 4,447 Cost of services and products sold Prior-service costs (benefits) (c) (5 ) 31 (9 ) 93 Selling, general and administrative expenses Prior-service costs (c) 66 36 190 111 Cost of services and products sold Settlement/curtailment losses 223 — 223 — Selling, general and administrative expenses Total before tax 4,579 5,540 13,803 16,593 Tax benefit (601 ) (466 ) (1,635 ) (1,405 ) Total reclassification of defined benefit pension items, net of tax $ 3,978 $ 5,074 $ 12,168 $ 15,188 (c) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See Note 8, Employee Benefit Plans, for additional details. Realized (gains) losses reclassified from accumulated other comprehensive loss in connection with loss on dilution and sale of equity method investment are as follows: (In thousands) Three Months Ended Nine Months Ended Affected Caption in the Condensed Consolidated Statements of Operations September 30 September 30 Foreign exchange translation adjustments $ 40,525 $ 45,405 Change in fair value to the adjustment liability and loss on dilution and sale of equity method investment Cash flow hedging instruments 2,425 2,593 Change in fair value to the adjustment liability and loss on dilution and sale of equity method investment Defined benefit pension obligations (2,198 ) (2,433 ) Change in fair value to the adjustment liability and loss on dilution and sale of equity method investment Total before tax 40,752 45,565 Tax benefit (d) (15,046 ) (16,822 ) Total amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution and sale of equity method investment $ 25,706 $ 28,743 (d) For the three months ended September 30, 2016 the tax benefit was not recognized in the condensed consolidated statement of operations since a valuation allowance was established against the resulting deferred tax assets. See Note 9, Income Taxes, for additional information. |
Restructuring Programs
Restructuring Programs | 9 Months Ended |
Sep. 30, 2016 | |
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's Improvement Plan ("Project Orion"), the Harsco Metals & Minerals Segment made organizational and process improvement changes that are expected to improve its 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. During the fourth quarter of 2015, Project Orion was expanded with additional targeted workforce and operational savings of $20 million to $25 million . The majority of these benefits are expected to be realized in 2016. The restructuring accrual for Project Orion at September 30, 2016 and the activity for the nine months ended September 30, 2016 were as follows: (In thousands) Employee Termination Benefit Costs Balance, December 31, 2015 $ 5,807 Cash expenditures (4,796 ) Foreign currency translation 60 Other adjustments (84 ) Balance, September 30, 2016 $ 987 The remaining accrual related to Project Orion is expected to be paid principally in the fourth quarter of 2016. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2015 Condensed Consolidated Balance Sheet information contained in this Quarterly Report on Form 10-Q was derived from the 2015 audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. (“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, 2015 . Operating results and cash flows for the three and nine months ended September 30, 2016 are not indicative of the results that may be expected for the year ending December 31, 2016 . |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year amounts to conform with current year classifications. |
Significant Accounting Policies - Revenue Recognition | Significant Accounting Policies - Revenue Recognition Product revenues are recognized when they are realized or realizable and when earned. Revenue is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company's price to the buyer is fixed or determinable and collectability is reasonably assured. Product revenues include the Harsco Industrial Segment and the product revenues of the Harsco Metals & Minerals and Harsco Rail Segments. Certain contracts within the Harsco Rail Segment, which meet specific criteria established in U.S. GAAP, are accounted for as long-term contracts. The Company recognizes revenues on two contracts from the federal railway system of Switzerland ("SBB") based on the percentage-of-completion (units-of-delivery) method of accounting, whereby revenues and estimated average costs of the units to be produced under the contracts are recognized as deliveries are made or accepted. Contract revenues and cost estimates are reviewed and revised, at a minimum quarterly, and adjustments are reflected in the accounting period as such amounts are determined. |
Change in Estimates | Change in Estimates Accounting for contracts using the percentage-of-completion method requires judgment relative to assessing risks, estimating contract revenues and costs (including estimating any liquidating damages or penalties related to performance) and making assumptions for schedule and technical items. Due to the number of years it may take to complete these contracts and the scope and nature of the work required to be performed on those contracts, estimating total sales and costs at completion is inherently complicated and subject to many variables and, accordingly estimates are subject to change. When adjustments in estimated total contract sales or estimated total costs are required, any changes from prior estimates are recognized in the current period for the inception-to-date effect of such changes. When estimates of total costs to be incurred on a contract, using the percentage-of-completion method, exceed estimates of total sales to be earned, a provision for the entire loss on the contract is recorded in the period in which the loss is determined. |
Recently Adopted and Recently Issued Accounting Standards | Recently Adopted and Recently Issued Accounting Standards The following accounting standards have been adopted in 2016 : On January 1, 2016, the Company adopted changes issued by the Financial Accounting Standards Board ("FASB") related to reporting extraordinary and unusual items. The changes simplified income statement presentation by eliminating the concept of extraordinary items. The changes became effective for the Company on January 1, 2016. The adoption of these changes did not have an impact on the Company's condensed consolidated financial statements. On January 1, 2016, the Company adopted changes issued by the FASB related to consolidation. The changes updated consolidation analysis and affected reporting entities that are required to evaluate whether they should consolidate certain legal entities. The changes became effective for the Company on January 1, 2016. The adoption of these changes did not have a material impact on the Company's condensed consolidated financial statements. On January 1, 2016, the Company adopted changes issued by the FASB related to simplifying the presentation of debt issuance costs. The changes required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that 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 became effective for the Company on January 1, 2016. The adoption of these changes resulted in the reclassification of approximately $8 million and approximately $10 million at September 30, 2016 and December 31, 2015 , respectively, in deferred financing costs from Other assets to Long-term debt on the Company's Condensed Consolidated Balance Sheets for all periods presented. On January 1, 2016, the Company adopted changes issued by the FASB 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 became effective for the Company on January 1, 2016. The adoption of these changes did not have a material impact on the Company's condensed consolidated financial statements. On January 1, 2016, the Company adopted changes issued by the FASB simplifying the accounting for measurement period adjustments for business combinations. The changes resulted 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 required additional disclosure related to such measurement period adjustments. The changes became effective for the Company on January 1, 2016. The adoption of these changes did not have an impact on the Company's condensed consolidated financial statements; however in the future will have an effect on how the Company reports adjustments to provisional amounts during the measurement period. 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. During 2016, the FASB clarified the implementation guidance for principal versus agent considerations, identifying performance obligations, accounting for intellectual property licenses, collectability, non-cash consideration and the presentation of sales and other similar taxes, as well as introduced practical expedients related to disclosures of remaining performance obligations. These changes become effective for the Company on January 1, 2018. Management is currently evaluating the impact of these changes on its condensed consolidated financial statements. 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 for the annual period ending December 31, 2016 and interim periods thereafter. Management has evaluated these changes and does not expect these changes will 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 November 2015, the FASB issued changes that require deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position. The changes apply to all entities that present a classified statement of financial position. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected. The changes become effective for the Company on January 1, 2017. Had these changes been adopted, the Company's working capital would have decreased by approximately $27 million and $38 million at September 30, 2016 and December 31, 2015 , respectively. In February 2016, the FASB issued changes in accounting for leases. The changes introduce a lessee model that brings most leases on the balance sheet. The changes also align many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. Furthermore, the changes address other concerns related to the current leases model such as eliminating the requirement in current guidance for an entity to use bright-line tests in determining lease classification. The changes also require lessors to increase the transparency of their exposure to changes in value of their residual assets and how they manage that exposure. The changes become effective for the Company on January 1, 2019. Management is currently evaluating the impact of these changes on its condensed consolidated financial statements. In March 2016, the FASB issued changes related to the simplification of several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The changes become effective for the Company on January 1, 2017. Management is currently evaluating the impact of these changes on its condensed consolidated financial statements and does not expect them to have a material impact. In August 2016, the FASB issued changes to address eight specific cash flow presentation issues with the objective of reducing diversity in practice. The issues identified include: debt prepayments or extinguishment costs; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The changes become effective for the Company on January 1, 2018. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. |
Accounts Receivable and Inven26
Accounts Receivable and Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounts Receivable And Inventories | |
Schedule of accounts receivable | Accounts receivable consist of the following: (In thousands) September 30 December 31 Trade accounts receivable $ 276,625 $ 280,526 Less: Allowance for doubtful accounts (13,091 ) (25,649 ) Trade accounts receivable, net $ 263,534 $ 254,877 Other receivables (a) $ 17,595 $ 30,395 (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) 2016 2015 2016 2015 Provision for doubtful accounts related to trade accounts receivable $ (93 ) $ 10,005 $ 84 $ 10,615 |
Schedule of inventories | Inventories consist of the following: (In thousands) September 30 December 31 Finished goods $ 30,198 $ 32,586 Work-in-process 30,273 30,959 Contracts-in-process 55,675 55,786 Raw materials and purchased parts 67,287 70,755 Stores and supplies 25,262 26,881 Inventories $ 208,695 $ 216,967 |
Schedule of contracts-in-process | Contracts-in-process consist of the following: (In thousands) September 30 December 31 Contract costs accumulated to date 90,668 55,786 Estimated forward loss provisions for contracts-in-process (a) (34,993 ) — Contracts-in-process 55,675 55,786 (a) To the extent that the estimated forward loss provision exceeds accumulated contract costs it is included in the caption Other current liabilities on the Condensed Consolidated Balance Sheets. At September 30, 2016 this amount totaled $5.5 million . |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Brand's results of operations are summarized as follows: Three Months Ended Nine Months Ended June 30 June 30 (In thousands) 2016 2015 2016 2015 Net revenues $ 782,415 $ 736,178 $ 2,333,561 $ 2,217,904 Gross profit 169,456 154,710 499,005 486,656 Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries 12,378 10,817 20,756 (1,384 ) Harsco's equity in income (loss) of Brand 3,205 3,105 5,686 (396 ) |
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 $ — $ 1,557 Balances due to Brand 26 21,407 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 $ 10,906 $ 10,932 Land improvements 15,172 15,277 Buildings and improvements 189,864 191,356 Machinery and equipment 1,614,597 1,661,914 Construction in progress 23,656 36,990 Gross property, plant and equipment 1,854,195 1,916,469 Less: Accumulated depreciation (1,335,944 ) (1,352,434 ) Property, plant and equipment, net $ 518,251 $ 564,035 |
Goodwill and Other Intangible29
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2016 : (In thousands) Harsco Metals & Minerals Segment Harsco Industrial Segment Harsco Rail Segment Consolidated Totals Balance at December 31, 2015 $ 380,761 $ 6,806 $ 12,800 $ 400,367 Changes to goodwill — 33 226 259 Foreign currency translation (8,969 ) — — (8,969 ) Balance at September 30, 2016 $ 371,792 $ 6,839 $ 13,026 $ 391,657 |
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, 2016 December 31, 2015 (In thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer related $ 149,719 $ 113,482 $ 153,287 $ 111,227 Non-compete agreements 1,096 1,096 1,092 1,092 Patents 5,783 5,532 5,882 5,495 Technology related 25,836 25,343 25,559 23,089 Trade names 8,309 4,455 8,303 4,194 Other 8,663 5,118 8,701 4,669 Total $ 199,406 $ 155,026 $ 202,824 $ 149,766 |
Schedule of amortization expense | Amortization expense for intangible assets was as follows: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2016 2015 2016 2015 Amortization expense for intangible assets $ 2,053 $ 2,286 $ 6,208 $ 6,602 |
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) 2016 2017 2018 2019 2020 Estimated amortization expense (a) $ 8,000 $ 5,500 $ 5,250 $ 4,750 $ 4,500 (a) 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, 2016 | |
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) 2016 2015 2016 2015 Service cost $ 945 $ 722 $ 405 $ 428 Interest cost 2,545 3,089 6,542 9,146 Expected return on plan assets (3,601 ) (4,203 ) (10,475 ) (12,630 ) Recognized prior service costs 16 20 44 47 Recognized loss 1,373 1,230 2,923 4,244 Settlement/curtailment losses 223 — — — Defined benefit pension plans net periodic pension cost (income) $ 1,501 $ 858 $ (561 ) $ 1,235 Nine Months Ended September 30 Defined Benefit Pension Plans Net Periodic Pension Cost U.S. Plans International Plans (In thousands) 2016 2015 2016 2015 Service costs $ 2,837 $ 2,167 $ 1,214 $ 1,320 Interest cost 7,635 9,268 20,649 27,475 Expected return on plan assets (10,803 ) (12,609 ) (33,157 ) (37,914 ) Recognized prior service costs 47 60 133 144 Recognized loss 4,117 3,689 9,283 12,700 Settlement/curtailment losses 223 — — — Defined benefit pension plans net periodic pension cost (income) $ 4,056 $ 2,575 $ (1,878 ) $ 3,725 |
Schedule of contributions to pension plans | Three Months Ended Nine Months Ended Company Contributions September 30 September 30 (In thousands) 2016 2015 2016 2015 Defined benefit pension plans (U.S.) $ 471 $ 567 $ 1,411 $ 1,841 Defined benefit pension plans (International) 3,170 3,935 16,222 24,166 Multiemployer pension plans 494 570 1,520 1,876 Defined contribution pension plans 2,291 2,619 7,593 8,884 |
Reconciliation of Basic and D31
Reconciliation of Basic and Diluted Shares (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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) 2016 2015 2016 2015 Income (loss) from continuing operations attributable to Harsco Corporation common stockholders $ (32,612 ) $ (8,254 ) $ (71,156 ) $ 13,719 Weighted-average shares outstanding - basic 80,379 80,238 80,318 80,233 Dilutive effect of stock-based compensation — — — 130 Weighted-average shares outstanding - diluted 80,379 80,238 80,318 80,363 Earnings (loss) from continuing operations per common share, attributable to Harsco Corporation common stockholders: Basic $ (0.41 ) $ (0.10 ) $ (0.89 ) $ 0.17 Diluted $ (0.41 ) $ (0.10 ) $ (0.89 ) $ 0.17 |
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) 2016 2015 2016 2015 Restricted stock units 922 441 770 — Stock options 90 90 90 101 Stock appreciation rights 1,567 1,265 1,432 1,156 Performance share units 801 322 649 265 |
Derivative Instruments, Hedgi32
Derivative Instruments, Hedging Activities and Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments, Hedging Activities And Fair Value Disclosure [Abstract] | |
Schedule of fair value of outstanding derivative contracts | The fair value of outstanding derivative contracts recorded as assets and liabilities on the Condensed Consolidated Balance Sheets were as follows: Asset Derivatives Liability Derivatives (In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value September 30, 2016 Derivatives designated as hedging instruments: Foreign currency exchange forward contracts Other current assets $ 60 Other current liabilities $ 97 Cross-currency interest rate swaps Other assets 595 — Total derivatives designated as hedging instruments $ 655 $ 97 Derivatives not designated as hedging instruments : Foreign currency exchange forward contracts Other current assets $ 2,448 Other current liabilities $ 4,691 Asset Derivatives Liability Derivatives (In thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value December 31, 2015 Derivatives designated as hedging instruments: Foreign currency exchange forward contracts Other current assets $ 1,640 $ — Cross-currency interest rate swaps Other assets 15,417 — Total derivatives designated as hedging instruments $ 17,057 $ — Derivatives not designated as hedging instruments : Foreign currency exchange forward contracts Other current assets $ 4,188 Other current liabilities $ 1,738 |
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 was as follows: Derivatives Designated as Hedging Instruments (a) (In thousands) Amount of Gain (Loss) Recognized in Other Comprehensive Income (“OCI”) on Derivative - Effective Portion Location of Gain Reclassified from Accumulated OCI into Income - Effective Portion Amount of Gain Reclassified from Accumulated OCI into Income - Effective Portion Location of Loss 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, 2016: Foreign currency exchange forward contracts $ 2,378 $ — $ — Cross-currency interest rate swaps 265 — Cost of services and products sold (232 ) (b) $ 2,643 $ — $ (232 ) Three Months Ended September 30, 2015: Foreign currency exchange forward contracts $ 2,532 Cost of services and products sold $ 78 $ — Cross-currency interest rate swaps 2,446 — Cost of services and products sold 13,087 (b) $ 4,978 $ 78 $ 13,087 (In thousands) Amount of Gain (Loss)Recognized in OCI on Derivative - Effective Portion Location of Gain 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 Gain Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing Nine Months Ended September 30, 2016: Foreign currency forward exchange contracts $ 1,748 Product revenues / Cost of services and products sold $ 409 $ — Cross currency interest rate swaps (1,819 ) — Cost of services and products sold 3,987 (b) $ (71 ) $ 409 $ 3,987 Nine Months Ended September 30, 2015: Foreign currency forward exchange contracts $ 4,132 Cost of services and products sold $ 80 $ — Cross currency interest rate swaps 8,531 — Cost of services and products sold 24,739 (b) $ 12,663 $ 80 $ 24,739 (a) Reflects only the activity of the Company and excludes derivative designated as hedging instruments held by the Company's equity method investments. (b) These gains 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 Recognized in Income on Derivative for the Three Months Ended September 30 (c) (In thousands) 2016 2015 Foreign currency exchange forward contracts Cost of services and products sold $ 552 $ 2,724 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 (c) (In thousands) 2016 2015 Foreign currency forward exchange contracts Cost of services and products sold $ 2,292 $ (4,510 ) (c) 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 CCIRs at September 30, 2016 : Interest Rates (In millions) Contractual Amount Receive Pay Maturing 2017 $ 3.4 Floating U.S. dollar rate Fixed rupee rate The following tables summarize, by major currency, the contractual amounts of the Company’s foreign currency exchange forward contracts in U.S. dollars. 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 Exchange Forward Contracts Outstanding at September 30, 2016 : (In thousands) Type U.S. Dollar Equivalent Maturity Recognized Gain (Loss) British pounds sterling Sell $ 45,864 October 2016 $ 513 British pounds sterling Buy 1,088 October 2016 through December 2016 (9 ) Euros Sell 310,174 October 2016 through December 2016 (3,265 ) Euros Buy 155,478 October 2016 through January 2018 604 Other currencies Sell 45,658 October 2016 through September 2017 (135 ) Other currencies Buy 8,957 October 2016 through December 2016 11 Total $ 567,219 $ (2,281 ) Contracted Amounts of Foreign Currency Exchange Forward Contracts Outstanding at December 31, 2015 : (In thousands) Type U.S. Dollar Equivalent Maturity Recognized Gain (Loss) British pounds sterling Sell $ 43,511 January 2016 $ 822 British pounds sterling Buy 2,062 January 2016 (54 ) Euros Sell 336,397 January 2016 through December 2016 547 Euros Buy 167,037 January 2016 through August 2016 2,497 Other currencies Sell 35,426 January 2016 through March 2016 316 Other currencies Buy 7,981 January 2016 (38 ) Total $ 592,414 $ 4,090 |
Schedule of fair value of financial instruments | The following table indicates the fair value hierarchy of the financial instruments of the Company: Level 2 Fair Value Measurements (In thousands) September 30 December 31 Assets Foreign currency exchange forward contracts $ 2,508 $ 5,828 Cross-currency interest rate swaps 595 15,417 Liabilities Foreign currency exchange forward contracts 4,788 1,738 |
Schedule of the reconciliation of liabilities measured on a recurring basis using unobservable inputs | The following table reconciles the beginning and ending balances for liabilities measured on a recurring basis using unobservable inputs (Level 3): Level 3 Liabilities—Unit Adjustment Liability (d) for the Nine Months Ended June 30 Nine Months Ended September 30 2016 2015 Balance at beginning of period $ 79,934 $ 93,762 Reduction in the fair value related to election not to make 2016 payments (19,145 ) — Sale of equity interest in Brand (65,461 ) — Payments — (16,740 ) Change in fair value to the unit adjustment liability 4,672 6,492 Balance at end of period $ — $ 83,514 (d) During the quarter ended March 31, 2016, the Company decided that it would not make the four quarterly payments to CD&R for 2016. This resulted in the Company revaluing the Unit Adjustment Liability. In September 2016, the Company sold its equity interest in Brand. See Note 4, Equity Method Investments, for additional information related to the unit adjustment liability. |
Review of Operations by Segme33
Review of Operations by Segment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of operations by segment | Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2016 2015 2016 2015 Revenues From Continuing Operations Harsco Metals & Minerals $ 247,691 $ 277,367 $ 730,923 $ 862,901 Harsco Industrial 63,422 91,199 191,561 281,883 Harsco Rail 56,674 59,768 168,517 190,876 Total revenues from continuing operations $ 367,787 $ 428,334 $ 1,091,001 $ 1,335,660 Operating Income (Loss) From Continuing Operations Harsco Metals & Minerals $ 24,066 $ (3,331 ) $ 61,934 $ 25,851 Harsco Industrial 6,312 13,934 20,083 45,380 Harsco Rail 4,599 7,786 (22,443 ) 40,819 Corporate (6,401 ) (10,661 ) (20,253 ) (29,712 ) Total operating income from continuing operations $ 28,576 $ 7,728 $ 39,321 $ 82,338 Depreciation and Amortization Harsco Metals & Minerals $ 30,255 $ 34,636 $ 91,942 $ 104,368 Harsco Industrial 1,827 1,855 5,395 4,507 Harsco Rail 1,441 1,476 4,236 4,670 Corporate 3,102 1,799 6,714 5,801 Total Depreciation and Amortization $ 36,625 $ 39,766 $ 108,287 $ 119,346 Capital Expenditures Harsco Metals & Minerals $ 15,272 $ 23,205 $ 43,997 $ 72,748 Harsco Industrial 1,817 3,662 4,113 12,467 Harsco Rail 497 374 1,636 1,599 Corporate 184 1,096 200 4,769 Total Capital Expenditures $ 17,770 $ 28,337 $ 49,946 $ 91,583 |
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) 2016 2015 2016 2015 Segment operating income $ 34,977 $ 18,389 $ 59,574 $ 112,050 General Corporate expense (6,401 ) (10,661 ) (20,253 ) (29,712 ) Operating income from continuing operations 28,576 7,728 39,321 82,338 Interest income 673 264 1,760 951 Interest expense (13,756 ) (11,110 ) (39,924 ) (34,812 ) Change in fair value to the unit adjustment liability and loss on dilution and sale of equity method investment (44,788 ) (2,083 ) (58,494 ) (6,492 ) Income (loss) from continuing operations before income taxes and equity income (loss) $ (29,295 ) $ (5,201 ) $ (57,337 ) $ 41,985 |
Other Expenses (Tables)
Other Expenses (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of other expenses | The major components of this Condensed Consolidated Statements of Operations caption are as follows: Three Months Ended Nine Months Ended September 30 September 30 (In thousands) 2016 2015 2016 2015 Employee termination benefit costs $ 1,790 $ 3,454 $ 8,756 $ 5,962 Harsco Metals & Minerals Segment separation costs 1 — 3,298 — Net gains (a) (608 ) (1,747 ) (1,365 ) (8,479 ) Foreign currency gains related to Harsco Rail Segment advances on contracts and other customer advances — — — (10,940 ) Bahrain salt cake disposal — 7,000 — 7,000 Subcontractor settlement — 4,220 — 4,220 Other 558 4,465 1,422 6,066 Other expenses $ 1,741 $ 17,392 $ 12,111 $ 3,829 (a) Net gains result from the sales of redundant properties (primarily land, buildings and related equipment) and non-core assets. |
Components of Accumulated Oth35
Components of Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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, 2015 and 2016 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, 2014 $ (39,938 ) $ (9,025 ) $ (483,278 ) $ (15 ) $ (532,256 ) Other comprehensive income (loss) before reclassifications (61,537 ) (a) 10,905 (b) 12,012 (a) (12 ) (38,632 ) Realized (gains) losses reclassified from accumulated other comprehensive loss, net of tax — (52 ) 15,188 — 15,136 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 ) 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, 2015 $ (125,561 ) $ (400 ) $ (389,696 ) $ (31 ) $ (515,688 ) Other comprehensive income (loss) before reclassifications (23,744 ) (a) (1,915 ) (b) 32,067 (a) 11 6,419 Realized (gains) losses reclassified from accumulated other comprehensive loss, net of tax — (258 ) 12,168 — 11,910 Realized (gains) losses reclassified from accumulated other comprehensive loss in connection with loss on dilution of equity method investment (See Note 4, Equity Method Investments) 28,641 1,636 (1,534 ) — 28,743 Other comprehensive income (loss) from equity method investee 1,943 (405 ) 306 — 1,844 Total other comprehensive income (loss) 6,840 (942 ) 43,007 11 48,916 Less: Other comprehensive (income) loss attributable to noncontrolling interests 420 (7 ) — — 413 Other comprehensive income (loss) attributable to Harsco Corporation 7,260 (949 ) 43,007 11 49,329 Balance at September 30, 2016 $ (118,301 ) $ (1,349 ) $ (346,689 ) $ (20 ) $ (466,359 ) (a) Principally foreign currency fluctuation. (b) Net change from periodic revaluations. |
Reclassification out of Accumulated Other Comprehensive Income | Realized (gains) losses reclassified from accumulated other comprehensive loss are as follows: (In thousands) 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 cash flow hedging instruments: Foreign currency exchange forward contracts $ — $ — $ (408 ) $ — Product revenues Foreign currency exchange forward contracts — (78 ) (1 ) (80 ) Cost of services and products sold Total before tax — (78 ) (409 ) (80 ) Tax expense — 28 151 28 Total reclassification of cash flow hedging instruments, net of tax $ — $ (50 ) $ (258 ) $ (52 ) Amortization of defined benefit pension items: Actuarial losses (c) $ 2,042 $ 4,000 $ 6,703 $ 11,942 Selling, general and administrative expenses Actuarial losses (c) 2,253 1,473 6,696 4,447 Cost of services and products sold Prior-service costs (benefits) (c) (5 ) 31 (9 ) 93 Selling, general and administrative expenses Prior-service costs (c) 66 36 190 111 Cost of services and products sold Settlement/curtailment losses 223 — 223 — Selling, general and administrative expenses Total before tax 4,579 5,540 13,803 16,593 Tax benefit (601 ) (466 ) (1,635 ) (1,405 ) Total reclassification of defined benefit pension items, net of tax $ 3,978 $ 5,074 $ 12,168 $ 15,188 (c) These accumulated other comprehensive loss components are included in the computation of net periodic pension costs. See Note 8, Employee Benefit Plans, for additional details. |
Reclassification from accumulated other comprehensive loss in connection with loss on dilution of equity investment [Table Text Block] | Realized (gains) losses reclassified from accumulated other comprehensive loss in connection with loss on dilution and sale of equity method investment are as follows: (In thousands) Three Months Ended Nine Months Ended Affected Caption in the Condensed Consolidated Statements of Operations September 30 September 30 Foreign exchange translation adjustments $ 40,525 $ 45,405 Change in fair value to the adjustment liability and loss on dilution and sale of equity method investment Cash flow hedging instruments 2,425 2,593 Change in fair value to the adjustment liability and loss on dilution and sale of equity method investment Defined benefit pension obligations (2,198 ) (2,433 ) Change in fair value to the adjustment liability and loss on dilution and sale of equity method investment Total before tax 40,752 45,565 Tax benefit (d) (15,046 ) (16,822 ) Total amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution and sale of equity method investment $ 25,706 $ 28,743 (d) For the three months ended September 30, 2016 the tax benefit was not recognized in the condensed consolidated statement of operations since a valuation allowance was established against the resulting deferred tax assets. See Note 9, Income Taxes, for additional information. |
Restructuring Programs (Tables)
Restructuring Programs (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The restructuring accrual for Project Orion at September 30, 2016 and the activity for the nine months ended September 30, 2016 were as follows: (In thousands) Employee Termination Benefit Costs Balance, December 31, 2015 $ 5,807 Cash expenditures (4,796 ) Foreign currency translation 60 Other adjustments (84 ) Balance, September 30, 2016 $ 987 |
Basis of Presentation Change in
Basis of Presentation Change in Estimates (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contract estimated forward loss provision for Harsco Rail Segment | $ 40,050 | $ 0 |
Recently Adopted and Recently38
Recently Adopted and Recently Issued Accounting Standards Details (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Accounting Changes and Error Corrections [Abstract] | ||
Deferred Finance Costs, Net | $ 8 | $ 10 |
Change in Working Capital | $ 27 | $ 38 |
Accounts Receivable and Inven39
Accounts Receivable and Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Accounts receivable | |||||
Trade accounts receivable | $ 276,625 | $ 276,625 | $ 280,526 | ||
Less: Allowance for doubtful accounts | (13,091) | (13,091) | (25,649) | ||
Trade accounts receivable, net | 263,534 | 263,534 | 254,877 | ||
Other receivables | 17,595 | 17,595 | 30,395 | ||
Provision for doubtful accounts related to trade accounts receivable | (93) | $ 10,005 | 84 | $ 10,615 | |
Inventories | |||||
Finished goods | 30,198 | 30,198 | 32,586 | ||
Work-in-process | 30,273 | 30,273 | 30,959 | ||
Contracts-in-process | 55,675 | 55,675 | 55,786 | ||
Raw materials and purchased parts | 67,287 | 67,287 | 70,755 | ||
Stores and supplies | 25,262 | 25,262 | 26,881 | ||
Inventories | 208,695 | 208,695 | 216,967 | ||
Inventory for Contracts | |||||
Contract costs accumulated to date | 90,668 | 90,668 | 55,786 | ||
Estimated loss provisions for contracts-in-process | (34,993) | (34,993) | 0 | ||
Contracts-in-process | 55,675 | 55,675 | 55,786 | ||
Loss provision that exceeds accumulated contract costs | 5,500 | 5,500 | |||
Customer Advances and Deposits | $ 106,800 | $ 106,800 | $ 82,700 |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Nov. 30, 2013 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | |||||||
Decrease in investment | $ 29,400 | ||||||
Equity in income of unconsolidated entities, net | $ (3,205) | $ (3,105) | (5,686) | $ 396 | |||
Proceeds from sale of equity interest | 145,000 | ||||||
Payments of Merger Related Costs, Financing Activities | 20,640 | 0 | |||||
Change in Fair Value of the Unit Adjustment Liability, exclusive of not making quarterly payments | (1,300) | (2,100) | (4,700) | (6,500) | |||
Unit adjustment liability | $ 79,900 | ||||||
Unit Adjustment Liability, Infrastructure Transaction | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Unit adjustment liability decrease | 19,145 | 0 | |||||
Infrastructure Transaction Strategic Venture | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
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 | 3.00% | ||||||
Equity in income of unconsolidated entities, net | (3,205) | $ (3,105) | (5,686) | $ 396 | |||
Accrued Liabilities | $ 1,400 | 1,400 | |||||
Equity Method Investment, Realized Gain (Loss) on Disposal | $ 43,500 | ||||||
Equity method investment, carrying value | $ 250,100 | ||||||
Infrastructure Transaction Strategic Venture | Harsco Infrastructure | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Percentage of ownership in Brand | 26.00% | 26.00% | 26.00% | 29.00% | |||
Equity in income of unconsolidated entities, net | $ 10,300 |
Equity Method Investments (De41
Equity Method Investments (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Summarized Statement of Operations Information of Brand: | ||||
Net revenues | $ 782,415 | $ 736,178 | $ 2,333,561 | $ 2,217,904 |
Gross profit | 169,456 | 154,710 | 499,005 | 486,656 |
Net income (loss) attributable to Brand Energy & Infrastructure Services, Inc. and Subsidiaries | 12,378 | 10,817 | 20,756 | (1,384) |
Equity in income (loss) of unconsolidated entities, net | 3,205 | 3,105 | 5,686 | (396) |
Infrastructure Transaction Strategic Venture | ||||
Summarized Statement of Operations Information of Brand: | ||||
Equity in income (loss) of unconsolidated entities, net | $ 3,205 | $ 3,105 | $ 5,686 | $ (396) |
Equity Method Investments (De42
Equity Method Investments (Details 3) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Balances due from Brand | $ 0 | $ 1,557 |
Balances due to Brand | $ 26 | $ 21,407 |
Property, Plant and Equipment43
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment | ||
Gross property, plant and equipment | $ 1,854,195 | $ 1,916,469 |
Less: Accumulated depreciation | (1,335,944) | (1,352,434) |
Property, plant and equipment, net | 518,251 | 564,035 |
Land | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | 10,906 | 10,932 |
Land improvements | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | 15,172 | 15,277 |
Buildings and improvements | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | 189,864 | 191,356 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | 1,614,597 | 1,661,914 |
Construction in progress | ||
Property, Plant and Equipment | ||
Gross property, plant and equipment | $ 23,656 | $ 36,990 |
Goodwill and Other Intangible44
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Changes in carrying amounts of goodwill | ||
Balance at December 31, 2015 | $ 400,367 | |
Changes to goodwill | 259 | |
Foreign currency translation | (8,969) | |
Balance at September 30, 2016 | 391,657 | |
Harsco Metals & Minerals Segment | ||
Changes in carrying amounts of goodwill | ||
Balance at December 31, 2015 | 380,761 | |
Changes to goodwill | 0 | |
Foreign currency translation | (8,969) | |
Balance at September 30, 2016 | 371,792 | |
Percentage of fair value exceeded the carrying value | 15.00% | |
Harsco Industrial Segment | ||
Changes in carrying amounts of goodwill | ||
Balance at December 31, 2015 | 6,806 | |
Changes to goodwill | 33 | |
Foreign currency translation | 0 | |
Balance at September 30, 2016 | 6,839 | |
Harsco Rail Segment | ||
Changes in carrying amounts of goodwill | ||
Balance at December 31, 2015 | 12,800 | |
Changes to goodwill | 226 | |
Foreign currency translation | 0 | |
Balance at September 30, 2016 | $ 13,026 |
Goodwill and Other Intangible45
Goodwill and Other Intangible Assets (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Intangible Assets, by category | |||||
Gross Carrying Amount | $ 199,406 | $ 199,406 | $ 202,824 | ||
Accumulated Amortization | 155,026 | 155,026 | 149,766 | ||
Amortization expense for intangible assets | 2,053 | $ 2,286 | 6,208 | $ 6,602 | |
Estimated amortization expense for next 5 years | |||||
2,016 | 8,000 | 8,000 | |||
2,017 | 5,500 | 5,500 | |||
2,018 | 5,250 | 5,250 | |||
2,019 | 4,750 | 4,750 | |||
2,020 | 4,500 | 4,500 | |||
Customer related | |||||
Intangible Assets, by category | |||||
Gross Carrying Amount | 149,719 | 149,719 | 153,287 | ||
Accumulated Amortization | 113,482 | 113,482 | 111,227 | ||
Non-compete agreements | |||||
Intangible Assets, by category | |||||
Gross Carrying Amount | 1,096 | 1,096 | 1,092 | ||
Accumulated Amortization | 1,096 | 1,096 | 1,092 | ||
Patents | |||||
Intangible Assets, by category | |||||
Gross Carrying Amount | 5,783 | 5,783 | 5,882 | ||
Accumulated Amortization | 5,532 | 5,532 | 5,495 | ||
Technology related | |||||
Intangible Assets, by category | |||||
Gross Carrying Amount | 25,836 | 25,836 | 25,559 | ||
Accumulated Amortization | 25,343 | 25,343 | 23,089 | ||
Trade names | |||||
Intangible Assets, by category | |||||
Gross Carrying Amount | 8,309 | 8,309 | 8,303 | ||
Accumulated Amortization | 4,455 | 4,455 | 4,194 | ||
Other | |||||
Intangible Assets, by category | |||||
Gross Carrying Amount | 8,663 | 8,663 | 8,701 | ||
Accumulated Amortization | $ 5,118 | $ 5,118 | $ 4,669 |
Debt and Credit Agreements (Det
Debt and Credit Agreements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Nov. 03, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 02, 2015 | Dec. 01, 2015 | |
Debt Instrument [Line Items] | ||||||||
Proceeds from sale of equity interest | $ 145,000,000 | |||||||
Repayment of debt | 275,768,000 | $ 101,679,000 | ||||||
Carrying value of long-term debt | $ 678,100,000 | $ 880,800,000 | ||||||
Scenario, Forecast | ||||||||
Debt Instrument [Line Items] | ||||||||
Cost of early extinguishment and write-off of unamortized deferred financing costs | $ 37,000,000 | |||||||
Harsco Infrastructure | Infrastructure Transaction Strategic Venture | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of ownership | 26.00% | 26.00% | 29.00% | |||||
Term Loan | Term Loan Facility 2015 | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount | $ 250,000,000 | |||||||
Repayment of debt | $ 85,000,000 | |||||||
Carrying value of long-term debt | $ 158,800,000 | $ 250,000,000 | ||||||
Term Loan | New Credit Facility | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount | $ 550,000,000 | |||||||
Senior Notes | 5.75% Senior Notes due 2018 | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 5.75% | |||||||
Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity | $ 350,000,000 | $ 600,000,000 | $ 500,000,000 | |||||
Deferred financing costs | 1,100,000 | |||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Carrying value of long-term debt | 40,000,000 | $ 165,000,000 | ||||||
Revolving Credit Facility | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Current borrowing capacity | $ 400,000,000 | |||||||
Revolving Credit Facility | New Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayment of debt | $ 60,000,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Defined benefit plans: | ||||
Decrease in Net Periodic Pension Cost Due to Change in Method | $ 2,000 | $ 5,000 | ||
Multiemployer pension plans | 494 | $ 570 | 1,520 | $ 1,876 |
Defined contribution pension plans | 2,291 | 2,619 | 7,593 | 8,884 |
U. S. Plans | ||||
Defined benefit plans: | ||||
Service cost | 945 | 722 | 2,837 | 2,167 |
Interest cost | 2,545 | 3,089 | 7,635 | 9,268 |
Expected return on plan assets | (3,601) | (4,203) | (10,803) | (12,609) |
Recognized prior service costs | 16 | 20 | 47 | 60 |
Recognized loss | 1,373 | 1,230 | 4,117 | 3,689 |
Settlement/curtailment losses | 223 | 0 | 223 | 0 |
Defined benefit plans net periodic pension cost | 1,501 | 858 | 4,056 | 2,575 |
Defined benefit pension plan | 471 | 567 | 1,411 | 1,841 |
Anticipated contributions to defined benefit pension plans during the remainder of the fiscal year | 500 | |||
International Plans | ||||
Defined benefit plans: | ||||
Service cost | 405 | 428 | 1,214 | 1,320 |
Interest cost | 6,542 | 9,146 | 20,649 | 27,475 |
Expected return on plan assets | (10,475) | (12,630) | (33,157) | (37,914) |
Recognized prior service costs | 44 | 47 | 133 | 144 |
Recognized loss | 2,923 | 4,244 | 9,283 | 12,700 |
Settlement/curtailment losses | 0 | 0 | 0 | 0 |
Defined benefit plans net periodic pension cost | (561) | 1,235 | (1,878) | 3,725 |
Defined benefit pension plan | $ 3,170 | $ 3,935 | 16,222 | $ 24,166 |
Anticipated contributions to defined benefit pension plans during the remainder of the fiscal year | $ 3,400 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 5,079,000 | $ 6,985,000 | $ 14,913,000 | $ 26,945,000 |
Valuation Allowances and Reserves, Balance | 16,100,000 | 16,100,000 | ||
Unrecognized income tax benefits including interest and penalties | 6,000,000 | 6,000,000 | ||
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 | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Aug. 31, 2005USD ($) | Sep. 30, 2016USD ($)claimdefendantcase | Apr. 08, 2016USD ($) | Dec. 31, 2015USD ($) | |
Lima Refinery Litigation | ||||
Commitments and Contingencies | ||||
Loss Contingency damages sought | $ 95 | |||
Lima Refinery property damages | $ 250 | |||
Brazilian Tax Disputes - Jan 2004 through May 2005 | Sao Paulo State Revenue Authority | ||||
Commitments and Contingencies | ||||
Damages sought - principal | $ 2 | |||
Damages sought - interest, penalties and fees | 23 | |||
Brazilian Tax Disputes - Jan 2002 through Dec 2003 | Sao Paulo State Revenue Authority | ||||
Commitments and Contingencies | ||||
Damages sought - principal | $ 1.8 | |||
Damages sought - interest, penalties and fees | 5.9 | |||
Amount of damages sought | $ 7.7 | |||
Brazilian Labor Claims | ||||
Commitments and Contingencies | ||||
Loss contingency reserves | $ 8.5 | $ 6.9 | ||
Other | ||||
Commitments and Contingencies | ||||
Approximate number of defendants that includes the company named in legal actions | defendant | 90 | |||
Number of pending claims | claim | 17,076 | |||
Number of claims dismissed to date by stipulation or summary judgment prior to trial | case | 27,892 | |||
Other | Active or In Extremis docket | ||||
Commitments and Contingencies | ||||
Number of pending claims | claim | 19 | |||
Other | Minimum | ||||
Commitments and Contingencies | ||||
Amount of damages sought | $ 20 | |||
Other | Maximum | ||||
Commitments and Contingencies | ||||
Amount of damages sought | $ 25 | |||
Other | New York County as managed by the New York Supreme Court | ||||
Commitments and Contingencies | ||||
Number of pending claims | case | 16,762 | |||
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 | 16,743 | |||
Other | New York State Supreme Court, Counties Excluding New York County | ||||
Commitments and Contingencies | ||||
Number of pending claims | case | 111 | |||
Other | Courts Located In States Other Than New York | ||||
Commitments and Contingencies | ||||
Number of pending claims | case | 203 |
Reconciliation of Basic and D50
Reconciliation of Basic and Diluted Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Income (loss) from continuing operations, net of tax | $ (32,612) | $ (8,254) | $ (71,156) | $ 13,719 |
Weighted-average shares outstanding - basic (in shares) | 80,379 | 80,238 | 80,318 | 80,233 |
Dilutive effect of stock-based compensation (in shares) | 0 | 0 | 0 | 130 |
Weighted-average shares outstanding - diluted (in shares) | 80,379 | 80,238 | 80,318 | 80,363 |
Earnings (loss) from continuing operations per common share, attributable to Harsco Corporation common stockholders: | ||||
Basic (in dollars per share) | $ (0.41) | $ (0.10) | $ (0.89) | $ 0.17 |
Diluted (in dollars per share) | $ (0.41) | $ (0.10) | $ (0.89) | $ 0.17 |
Reconciliation of Basic and D51
Reconciliation of Basic and Diluted Shares (Details 2) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Restricted stock units | ||||
Antidilutive securities | ||||
Number of securities not included in computation of diluted earnings per share (in shares) | 922 | 441 | 770 | 0 |
Stock options | ||||
Antidilutive securities | ||||
Number of securities not included in computation of diluted earnings per share (in shares) | 90 | 90 | 90 | 101 |
Stock appreciation rights | ||||
Antidilutive securities | ||||
Number of securities not included in computation of diluted earnings per share (in shares) | 1,567 | 1,265 | 1,432 | 1,156 |
Performance share units | ||||
Antidilutive securities | ||||
Number of securities not included in computation of diluted earnings per share (in shares) | 801 | 322 | 649 | 265 |
Derivative Instruments, Hedgi52
Derivative Instruments, Hedging Activities and Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Designated as hedging instrument | ||
Derivative contracts | ||
Asset Derivatives | $ 655 | $ 17,057 |
Liability Derivatives | $ 97 | 0 |
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 | $ 60 | 1,640 |
Designated as hedging instrument | Foreign currency forward exchange contracts | Other current liabilities | ||
Derivative contracts | ||
Liability Derivatives | 97 | 0 |
Designated as hedging instrument | Cross currency interest rate swaps | Other assets | ||
Derivative contracts | ||
Asset Derivatives | 595 | 15,417 |
Designated as hedging instrument | Cross currency interest rate swaps | Noncurrent liabilities | ||
Derivative contracts | ||
Liability Derivatives | 0 | 0 |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward exchange contracts | Other current assets | ||
Derivative contracts | ||
Asset Derivatives | 2,448 | 4,188 |
Derivatives Not Designated as Hedging Instruments | Foreign currency forward exchange contracts | Other current liabilities | ||
Derivative contracts | ||
Liability Derivatives | $ 4,691 | $ 1,738 |
Derivative Instruments, Hedgi53
Derivative Instruments, Hedging Activities and Fair Value (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Effect of derivative instruments | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative - Effective Portion | $ 2,643 | $ 4,978 | $ (71) | $ 12,663 |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income - Effective Portion | 0 | 78 | 409 | 80 |
Amount of Gain (Loss) Recognized in Income on Derivative - Ineffective Portion and Amount Excluded from Effectiveness Testing | (232) | 13,087 | 3,987 | 24,739 |
Foreign currency forward exchange contracts | ||||
Effect of derivative instruments | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative - Effective Portion | 2,378 | 2,532 | 1,748 | 4,132 |
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 | 0 | 78 | 409 | 80 |
Derivatives Not Designated as Hedging Instruments | ||||
Amount of Gain (Loss) Recognized in Income on Derivative | 552 | 2,724 | 2,292 | (4,510) |
Cross currency interest rate swaps | ||||
Effect of derivative instruments | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative - Effective Portion | 265 | 2,446 | (1,819) | 8,531 |
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 | $ (232) | $ 13,087 | $ 3,987 | $ 24,739 |
Derivative Instruments, Hedgi54
Derivative Instruments, Hedging Activities and Fair Value (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Foreign Currency Derivatives | |||||
Pre-tax net gains (losses) on certain loans designated as hedges of net investments in foreign subsidiaries | $ (9,000) | $ (2,200) | $ (29,300) | $ 2,400 | |
Proceeds from cross-currency interest rate swap termination | 16,625 | 75,057 | |||
Foreign currency forward exchange contracts | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 567,219 | 567,219 | $ 592,414 | ||
Recognized Gain (Loss) | (2,281) | 4,090 | |||
Foreign currency forward exchange contracts | British pounds sterling | Sell | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 45,864 | 45,864 | 43,511 | ||
Recognized Gain (Loss) | 513 | 822 | |||
Foreign currency forward exchange contracts | British pounds sterling | Buy | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 1,088 | 1,088 | 2,062 | ||
Recognized Gain (Loss) | (9) | (54) | |||
Foreign currency forward exchange contracts | Euros | Sell | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 310,174 | 310,174 | 336,397 | ||
Recognized Gain (Loss) | (3,265) | 547 | |||
Foreign currency forward exchange contracts | Euros | Buy | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 155,478 | 155,478 | 167,037 | ||
Recognized Gain (Loss) | 604 | 2,497 | |||
Foreign currency forward exchange contracts | Other currencies | Sell | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | 45,658 | 45,658 | 35,426 | ||
Recognized Gain (Loss) | (135) | 316 | |||
Foreign currency forward exchange contracts | Other currencies | Buy | |||||
Foreign Currency Derivatives | |||||
U.S. Dollar Equivalent | $ 8,957 | 8,957 | $ 7,981 | ||
Recognized Gain (Loss) | $ 11 | $ (38) |
Derivative Instruments, Hedgi55
Derivative Instruments, Hedging Activities and Fair Value (Details 4) | Sep. 30, 2016USD ($) |
Designated as hedging instrument | Maturing 2017 | |
Derivatives Designated as Hedging Instruments | |
Contractual Amount | $ 3,400,000 |
Derivative Instruments, Hedgi56
Derivative Instruments, Hedging Activities and Fair Value (Details 5) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Unit Adjustment Liability, Infrastructure Transaction | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | $ 79,934 | $ 93,762 | |
Reduction in the fair value related to election not to make 2016 payments | (19,145) | 0 | |
Sale of equity interest in Brand | (65,461) | 0 | |
Payments | 0 | (16,740) | |
Change in fair value to the unit adjustment liability | 4,672 | 6,492 | |
Balance at end of period | 0 | $ 83,514 | |
Fair value measurements recurring | Level 2 | |||
Assets | |||
Foreign currency forward exchange contracts | 2,508 | $ 5,828 | |
Cross-currency interest rate swaps | 595 | 15,417 | |
Liabilities | |||
Foreign currency forward exchange contracts | $ 4,788 | $ 1,738 |
Derivative Instruments, Hedgi57
Derivative Instruments, Hedging Activities and Fair Value (Details 6) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
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 | 682,100,000 | 834,600,000 |
Carrying value of long-term debt | $ 678,100,000 | $ 880,800,000 |
Review of Operations by Segme58
Review of Operations by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operations by segment | ||||
Total revenues | $ 367,787 | $ 428,334 | $ 1,091,001 | $ 1,335,660 |
Operating income from continuing operations | 28,576 | 7,728 | 39,321 | 82,338 |
Interest income | 673 | 264 | 1,760 | 951 |
Interest expense | (13,756) | (11,110) | (39,924) | (34,812) |
Change in fair value to the unit adjustment liability and loss on dilution and sale of equity method investment | (44,788) | (2,083) | (58,494) | (6,492) |
Income (loss) from continuing operations before income taxes and equity income (loss) | (29,295) | (5,201) | (57,337) | 41,985 |
Depreciation and Amortization | 36,625 | 39,766 | 108,287 | 119,346 |
Capital Expenditures | 17,770 | 28,337 | 49,946 | 91,583 |
Total reportable segments | ||||
Operations by segment | ||||
Operating income from continuing operations | 34,977 | 18,389 | 59,574 | 112,050 |
Harsco Metals & Minerals Segment | ||||
Operations by segment | ||||
Total revenues | 247,691 | 277,367 | 730,923 | 862,901 |
Operating income from continuing operations | 24,066 | (3,331) | 61,934 | 25,851 |
Depreciation and Amortization | 30,255 | 34,636 | 91,942 | 104,368 |
Capital Expenditures | 15,272 | 23,205 | 43,997 | 72,748 |
Harsco Industrial Segment | ||||
Operations by segment | ||||
Total revenues | 63,422 | 91,199 | 191,561 | 281,883 |
Operating income from continuing operations | 6,312 | 13,934 | 20,083 | 45,380 |
Depreciation and Amortization | 1,827 | 1,855 | 5,395 | 4,507 |
Capital Expenditures | 1,817 | 3,662 | 4,113 | 12,467 |
Harsco Rail Segment | ||||
Operations by segment | ||||
Total revenues | 56,674 | 59,768 | 168,517 | 190,876 |
Operating income from continuing operations | 4,599 | 7,786 | (22,443) | 40,819 |
Depreciation and Amortization | 1,441 | 1,476 | 4,236 | 4,670 |
Capital Expenditures | 497 | 374 | 1,636 | 1,599 |
Corporate [Member] | ||||
Operations by segment | ||||
Operating income from continuing operations | (6,401) | (10,661) | (20,253) | (29,712) |
Depreciation and Amortization | 3,102 | 1,799 | 6,714 | 5,801 |
Capital Expenditures | $ 184 | $ 1,096 | $ 200 | $ 4,769 |
Other Expenses (Details)
Other Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Other Income and Expenses [Abstract] | ||||
Employee termination benefit costs | $ 1,790 | $ 3,454 | $ 8,756 | $ 5,962 |
Harsco Metals & Minerals Segment separation costs | 1 | 0 | 3,298 | 0 |
Net gains | (608) | (1,747) | (1,365) | (8,479) |
Foreign currency gains related to Harsco Rail Segment advances on contracts and other customer advances | 0 | 0 | 0 | (10,940) |
Bahrain salt cake disposal | 0 | 7,000 | 0 | 7,000 |
Subcontractor settlement | 0 | 4,220 | 0 | 4,220 |
Other | 558 | 4,465 | 1,422 | 6,066 |
Other expenses | $ 1,741 | $ 17,392 | $ 12,111 | $ 3,829 |
Components of Accumulated Oth60
Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Components of Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | $ (515,688) | $ (532,256) | ||
Other comprehensive income (loss) before reclassifications | 6,419 | (38,632) | ||
Amounts reclassified from accumulated other comprehensive loss | 11,910 | 15,136 | ||
Amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution of equity method investment | 28,743 | |||
Other comprehensive income (loss) from equity method investee | 1,844 | (13,346) | ||
Total other comprehensive income (loss) | $ 21,948 | $ (13,118) | 48,916 | (36,842) |
Less: Other Comprehensive loss attributable to noncontrolling interests | 413 | 2,195 | ||
Other comprehensive income (loss) attributable to Harsco Corporation | 49,329 | (34,647) | ||
Ending balance | (466,359) | (566,903) | (466,359) | (566,903) |
Cumulative Foreign Exchange Translation Adjustments | ||||
Components of Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (125,561) | (39,938) | ||
Other comprehensive income (loss) before reclassifications | (23,744) | (61,537) | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution of equity method investment | 28,641 | |||
Other comprehensive income (loss) from equity method investee | 1,943 | (13,134) | ||
Total other comprehensive income (loss) | 6,840 | (74,671) | ||
Less: Other Comprehensive loss attributable to noncontrolling interests | 420 | 2,187 | ||
Other comprehensive income (loss) attributable to Harsco Corporation | 7,260 | (72,484) | ||
Ending balance | (118,301) | (112,422) | (118,301) | (112,422) |
Effective Portion of Deriviatives Designated as Hedging Instruments | ||||
Components of Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (400) | (9,025) | ||
Other comprehensive income (loss) before reclassifications | (1,915) | 10,905 | ||
Amounts reclassified from accumulated other comprehensive loss | (258) | (52) | ||
Amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution of equity method investment | 1,636 | |||
Other comprehensive income (loss) from equity method investee | (405) | (808) | ||
Total other comprehensive income (loss) | (942) | 10,045 | ||
Less: Other Comprehensive loss attributable to noncontrolling interests | (7) | 8 | ||
Other comprehensive income (loss) attributable to Harsco Corporation | (949) | 10,053 | ||
Ending balance | (1,349) | 1,028 | (1,349) | 1,028 |
Cumulative Unrecognized Actuarial Losses on Pension Obligations | ||||
Components of Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (389,696) | (483,278) | ||
Other comprehensive income (loss) before reclassifications | 32,067 | 12,012 | ||
Amounts reclassified from accumulated other comprehensive loss | 12,168 | 15,188 | ||
Amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution of equity method investment | (1,534) | |||
Other comprehensive income (loss) from equity method investee | 306 | 596 | ||
Total other comprehensive income (loss) | 43,007 | 27,796 | ||
Less: Other Comprehensive loss attributable to noncontrolling interests | 0 | 0 | ||
Other comprehensive income (loss) attributable to Harsco Corporation | 43,007 | 27,796 | ||
Ending balance | (346,689) | (455,482) | (346,689) | (455,482) |
Unrealized Loss on Marketable Securities | ||||
Components of Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (31) | (15) | ||
Other comprehensive income (loss) before reclassifications | 11 | (12) | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution of equity method investment | 0 | |||
Other comprehensive income (loss) from equity method investee | 0 | 0 | ||
Total other comprehensive income (loss) | 11 | (12) | ||
Less: Other Comprehensive loss attributable to noncontrolling interests | 0 | 0 | ||
Other comprehensive income (loss) attributable to Harsco Corporation | 11 | (12) | ||
Ending balance | $ (20) | $ (27) | $ (20) | $ (27) |
Components of Accumulated Oth61
Components of Accumulated Other Comprehensive Loss Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Selling, general and administrative expenses | $ 50,249 | $ 64,526 | $ 150,553 | $ 186,891 |
Income (loss) from continuing operations before income taxes and equity income (loss) | (29,295) | (5,201) | (57,337) | 41,985 |
Income tax expense | 5,079 | 6,985 | 14,913 | 26,945 |
Net loss | (31,544) | (9,483) | (65,437) | 14,108 |
Amount Reclassified from Accumulated Other Comprehensive Loss | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income tax expense | (15,046) | (16,822) | ||
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 income (loss) | 4,579 | 5,540 | 13,803 | 16,593 |
Income tax expense | (601) | (466) | (1,635) | (1,405) |
Net loss | 3,978 | 5,074 | 12,168 | 15,188 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Actuarial losses | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Selling, general and administrative expenses | 2,042 | 4,000 | 6,703 | 11,942 |
Cost of services and products sold | 2,253 | 1,473 | 6,696 | 4,447 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Prior service costs | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Selling, general and administrative expenses | (5) | 31 | (9) | 93 |
Cost of services and products sold | 66 | 36 | 190 | 111 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Settlement/Curtailment Losses [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Selling, general and administrative expenses | 223 | 0 | 223 | 0 |
Amount Reclassified from Accumulated Other Comprehensive Loss | Effective Portion of Deriviatives Designated as Hedging Instruments | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net loss | 0 | (50) | (258) | (52) |
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] | ||||
Revenues | 0 | 0 | (408) | 0 |
Cost of services and products sold | 0 | (78) | (1) | (80) |
Income (loss) from continuing operations before income taxes and equity income (loss) | 0 | (78) | (409) | (80) |
Income tax expense | $ 0 | $ 28 | $ 151 | $ 28 |
Components of Accumulated Oth62
Components of Accumulated Other Comprehensive Loss Dilution of Equity Method Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Income tax expense | $ 5,079 | $ 6,985 | $ 14,913 | $ 26,945 |
Total amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution and sale of equity method investment | 28,743 | |||
Amount Reclassified from Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total before tax | 40,752 | 45,565 | ||
Income tax expense | (15,046) | (16,822) | ||
Total amounts reclassified from accumulated other comprehensive loss in connection with loss on dilution and sale of equity method investment | 25,706 | 28,743 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss | Foreign exchange translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total before tax | 40,525 | 45,405 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss | Cash flow hedging instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total before tax | 2,425 | 2,593 | ||
Amount Reclassified from Accumulated Other Comprehensive Loss | Defined benefit pension obligations | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total before tax | $ (2,198) | $ (2,433) |
Restructuring Programs (Details
Restructuring Programs (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | ||
Project Orion Operational Savings - Min | $ 20,000 | |
Project Orion Phase III Operational Savings - Max | 25,000 | |
Harsco Metals & Minerals Segment | Harsco Metals & Minerals Improvement Plan (Project Orion) [Member] | Employee Severance | ||
Restructuring accrual related activity | ||
Accrual at December 31 2015 | $ 5,807 | |
Cash Expenditures | (4,796) | |
Foreign Currency Translation | 60 | |
Other adjustments | (84) | |
Accrual at September 30 2016 | $ 987 | $ 5,807 |