10-Q 1 hsc-20220331.htm 10-Q hsc-20220331
000004587612/312022Q1false111100000458762022-01-012022-03-3100000458762022-04-29xbrli:shares00000458762022-03-31iso4217:USD00000458762021-12-310000045876hsc:ProductsAndServicesServiceRevenueMember2022-01-012022-03-310000045876hsc:ProductsAndServicesServiceRevenueMember2021-01-012021-03-310000045876us-gaap:ProductMember2022-01-012022-03-310000045876us-gaap:ProductMember2021-01-012021-03-3100000458762021-01-012021-03-31iso4217:USDxbrli:shares00000458762020-12-3100000458762021-03-310000045876us-gaap:CommonStockMember2020-12-310000045876us-gaap:TreasuryStockMember2020-12-310000045876us-gaap:AdditionalPaidInCapitalMember2020-12-310000045876us-gaap:RetainedEarningsMember2020-12-310000045876us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000045876us-gaap:NoncontrollingInterestMember2020-12-310000045876us-gaap:RetainedEarningsMember2021-01-012021-03-310000045876us-gaap:NoncontrollingInterestMember2021-01-012021-03-310000045876us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000045876us-gaap:CommonStockMember2021-01-012021-03-310000045876us-gaap:TreasuryStockMember2021-01-012021-03-310000045876us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-3100000458762020-01-012020-03-310000045876us-gaap:CommonStockMember2021-03-310000045876us-gaap:TreasuryStockMember2021-03-310000045876us-gaap:AdditionalPaidInCapitalMember2021-03-310000045876us-gaap:RetainedEarningsMember2021-03-310000045876us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310000045876us-gaap:NoncontrollingInterestMember2021-03-310000045876us-gaap:CommonStockMember2021-12-310000045876us-gaap:TreasuryStockMember2021-12-310000045876us-gaap:AdditionalPaidInCapitalMember2021-12-310000045876us-gaap:RetainedEarningsMember2021-12-310000045876us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000045876us-gaap:NoncontrollingInterestMember2021-12-310000045876us-gaap:RetainedEarningsMember2022-01-012022-03-310000045876us-gaap:NoncontrollingInterestMember2022-01-012022-03-310000045876us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000045876us-gaap:CommonStockMember2022-01-012022-03-310000045876us-gaap:TreasuryStockMember2022-01-012022-03-310000045876us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310000045876us-gaap:CommonStockMember2022-03-310000045876us-gaap:TreasuryStockMember2022-03-310000045876us-gaap:AdditionalPaidInCapitalMember2022-03-310000045876us-gaap:RetainedEarningsMember2022-03-310000045876us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310000045876us-gaap:NoncontrollingInterestMember2022-03-310000045876hsc:HarscoRailMemberus-gaap:DiscontinuedOperationsHeldforsaleMember2022-03-310000045876hsc:HarscoRailMemberus-gaap:DiscontinuedOperationsHeldforsaleMember2021-12-310000045876hsc:HarscoRailMemberus-gaap:ServiceMemberus-gaap:DiscontinuedOperationsHeldforsaleMember2022-01-012022-03-310000045876hsc:HarscoRailMemberus-gaap:ServiceMemberus-gaap:DiscontinuedOperationsHeldforsaleMember2021-01-012021-03-310000045876hsc:HarscoRailMemberus-gaap:ProductMemberus-gaap:DiscontinuedOperationsHeldforsaleMember2022-01-012022-03-310000045876hsc:HarscoRailMemberus-gaap:ProductMemberus-gaap:DiscontinuedOperationsHeldforsaleMember2021-01-012021-03-310000045876hsc:HarscoRailMemberus-gaap:DiscontinuedOperationsHeldforsaleMember2022-01-012022-03-310000045876hsc:HarscoRailMemberus-gaap:DiscontinuedOperationsHeldforsaleMember2021-01-012021-03-3100000458762021-10-012021-12-310000045876hsc:NetworkRailMember2022-01-012022-03-310000045876hsc:DeutscheBahnMember2022-01-012022-03-310000045876hsc:SBBMemberhsc:Contract2Member2022-01-012022-03-310000045876hsc:SBBMemberhsc:Contract2Member2022-03-31xbrli:pure0000045876hsc:NetworkRailMember2022-03-310000045876hsc:DeutscheBahnMember2022-03-310000045876hsc:Greaterthan12monthsMember2022-03-310000045876hsc:HarscoIndustrialIKGMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2020-01-0100000458762020-01-010000045876us-gaap:LandMember2022-03-310000045876us-gaap:LandMember2021-12-310000045876us-gaap:LandImprovementsMember2022-03-310000045876us-gaap:LandImprovementsMember2021-12-310000045876us-gaap:BuildingAndBuildingImprovementsMember2022-03-310000045876us-gaap:BuildingAndBuildingImprovementsMember2021-12-310000045876us-gaap:MachineryAndEquipmentMember2022-03-310000045876us-gaap:MachineryAndEquipmentMember2021-12-310000045876us-gaap:ConstructionInProgressMember2022-03-310000045876us-gaap:ConstructionInProgressMember2021-12-310000045876hsc:HarscoEnvironmentalSegmentMembercountry:CN2022-03-310000045876hsc:HarscoEnvironmentalSegmentMemberhsc:AltekGroupMember2022-03-310000045876us-gaap:RevolvingCreditFacilityMember2022-03-310000045876srt:ScenarioForecastMemberus-gaap:RevolvingCreditFacilityMember2022-04-012023-12-310000045876srt:ScenarioForecastMemberus-gaap:RevolvingCreditFacilityMember2023-12-310000045876us-gaap:RevolvingCreditFacilityMember2022-02-220000045876us-gaap:RevolvingCreditFacilityMember2022-01-012022-03-310000045876us-gaap:RevolvingCreditFacilityMember2021-01-012021-03-310000045876hsc:TermLoanMemberhsc:NewTermLoanMember2022-03-310000045876hsc:TermLoanMemberhsc:NewTermLoanMember2021-12-310000045876us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-03-310000045876us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-12-310000045876hsc:A575NotesDueJuly2027Memberus-gaap:SeniorNotesMember2022-03-310000045876hsc:A575NotesDueJuly2027Memberus-gaap:SeniorNotesMember2021-12-310000045876hsc:OtherFinancingPayableMember2022-03-310000045876hsc:OtherFinancingPayableMember2021-12-310000045876us-gaap:PensionPlansDefinedBenefitMembercountry:US2022-01-012022-03-310000045876us-gaap:PensionPlansDefinedBenefitMembercountry:US2021-01-012021-03-310000045876us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2022-01-012022-03-310000045876us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2021-01-012021-03-310000045876us-gaap:PensionPlansDefinedBenefitMembercountry:US2022-03-310000045876us-gaap:ForeignPlanMemberus-gaap:PensionPlansDefinedBenefitMember2022-03-3100000458762021-11-2300000458762020-01-27hsc:party00000458762019-03-18iso4217:BRL0000045876hsc:CSNMember2019-03-1800000458762019-11-010000045876hsc:CSNMember2019-11-010000045876hsc:USEPANoticeOfIntentMember2022-03-220000045876hsc:PenaltyMatrixFromPADEPMember2022-03-210000045876hsc:LawSuitRelatedToAWorkersFatalInjuryMember2020-11-050000045876hsc:SaoPauloStateRevenueAuthorityMemberhsc:ValueAddedTaxAssessmentsJanuary2004ToMay2005Member2022-01-012022-03-310000045876hsc:SaoPauloStateRevenueAuthorityMemberhsc:ValueAddedTaxAssessmentsJanuary2004ToMay2005Member2018-06-042018-06-040000045876hsc:SaoPauloStateRevenueAuthorityMemberhsc:ValueAddedTaxAssessmentsJanuary2002ToDecember2003Member2005-08-012005-08-310000045876hsc:SaoPauloStateRevenueAuthorityMemberhsc:ValueAddedTaxAssessmentsJanuary2002ToDecember2003Member2018-12-012018-12-310000045876country:BR2020-12-300000045876country:BR2022-03-310000045876hsc:LosscontingencyBrazilianlaborclaimsMember2022-03-310000045876hsc:LosscontingencyBrazilianlaborclaimsMember2021-12-310000045876hsc:OtherIncludingAsbestosRelatedClaimsMember2022-01-012022-03-31hsc:defendant0000045876hsc:OtherIncludingAsbestosRelatedClaimsMember2022-03-31hsc:claim0000045876hsc:NewYorkCountyAsManagedByNewYorkSupremeCourtMemberhsc:OtherIncludingAsbestosRelatedClaimsMember2022-03-31hsc:case0000045876hsc:OtherIncludingAsbestosRelatedClaimsMemberhsc:NewYorkStateSupremeCourtCountiesExcludingNewYorkCountyMember2022-03-310000045876hsc:CourtsLocatedInStatesOtherThanNewYorkMemberhsc:OtherIncludingAsbestosRelatedClaimsMember2022-03-310000045876srt:MinimumMemberhsc:OtherIncludingAsbestosRelatedClaimsMember2022-01-012022-03-310000045876srt:MaximumMemberhsc:OtherIncludingAsbestosRelatedClaimsMember2022-01-012022-03-310000045876hsc:PendingAndFutureLitigationDeferredOrInactiveDocketMemberhsc:NewYorkCountyAsManagedByNewYorkSupremeCourtMemberhsc:OtherIncludingAsbestosRelatedClaimsMember2022-03-310000045876hsc:PendingLitigationActiveOrInExtremisDocketMemberhsc:OtherIncludingAsbestosRelatedClaimsMember2022-03-310000045876us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310000045876us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310000045876us-gaap:StockAppreciationRightsSARSMember2022-01-012022-03-310000045876us-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310000045876us-gaap:PerformanceSharesMember2022-01-012022-03-310000045876us-gaap:PerformanceSharesMember2021-01-012021-03-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMemberus-gaap:NondesignatedMember2022-03-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMember2022-03-310000045876us-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000045876us-gaap:NondesignatedMember2022-03-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMember2022-03-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentLiabilitiesMember2022-03-310000045876us-gaap:InterestRateSwapMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-03-310000045876us-gaap:InterestRateSwapMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMember2022-03-310000045876us-gaap:InterestRateSwapMemberus-gaap:OtherCurrentLiabilitiesMember2022-03-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMemberus-gaap:NondesignatedMember2021-12-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMember2021-12-310000045876us-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000045876us-gaap:NondesignatedMember2021-12-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMember2021-12-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentLiabilitiesMember2021-12-310000045876us-gaap:InterestRateSwapMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000045876us-gaap:InterestRateSwapMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMember2021-12-310000045876us-gaap:InterestRateSwapMemberus-gaap:OtherCurrentLiabilitiesMember2021-12-310000045876us-gaap:ForeignExchangeForwardMember2022-01-012022-03-310000045876us-gaap:ForeignExchangeForwardMember2021-01-012021-03-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:CostOfSalesMember2022-01-012022-03-310000045876us-gaap:ForeignExchangeForwardMemberus-gaap:CostOfSalesMember2021-01-012021-03-310000045876us-gaap:InterestRateSwapMember2022-01-012022-03-310000045876us-gaap:InterestRateSwapMember2021-01-012021-03-310000045876us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-01-012022-03-310000045876us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2021-01-012021-03-310000045876hsc:DiscontinuedOperationGainLossFromDisposalOfDiscontinuedOperationMemberus-gaap:InterestRateSwapMember2022-01-012022-03-310000045876hsc:DiscontinuedOperationGainLossFromDisposalOfDiscontinuedOperationMemberus-gaap:InterestRateSwapMember2021-01-012021-03-310000045876us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMember2022-01-012022-03-310000045876hsc:DiscontinuedOperationGainLossFromDisposalOfDiscontinuedOperationMemberus-gaap:ForeignExchangeContractMember2022-01-012022-03-310000045876us-gaap:InterestExpenseMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310000045876hsc:DiscontinuedOperationGainLossFromDisposalOfDiscontinuedOperationMemberus-gaap:ForeignExchangeContractMember2021-01-012021-03-310000045876us-gaap:ForeignExchangeForwardMember2022-03-310000045876us-gaap:ForeignExchangeForwardMember2021-12-310000045876hsc:TermLoanFacilityFixedRateMemberhsc:TermLoanMember2022-03-310000045876srt:ScenarioForecastMemberus-gaap:LondonInterbankOfferedRateLIBORMemberhsc:TermLoanFacilityFixedRateMemberhsc:TermLoanMember2022-01-012022-12-310000045876us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-03-310000045876us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000045876us-gaap:CorporateNonSegmentMember2022-01-012022-03-310000045876us-gaap:CorporateNonSegmentMember2021-01-012021-03-310000045876us-gaap:OperatingSegmentsMember2022-01-012022-03-310000045876us-gaap:OperatingSegmentsMember2021-01-012021-03-310000045876srt:NorthAmericaMemberhsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000045876hsc:CleanEarthMembersrt:NorthAmericaMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000045876srt:NorthAmericaMember2022-01-012022-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:WesternEuropeMember2022-01-012022-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:WesternEuropeMember2022-01-012022-03-310000045876hsc:WesternEuropeMember2022-01-012022-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMembersrt:LatinAmericaMember2022-01-012022-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMembersrt:LatinAmericaMember2022-01-012022-03-310000045876srt:LatinAmericaMember2022-01-012022-03-310000045876hsc:HarscoEnvironmentalSegmentMembersrt:AsiaPacificMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000045876hsc:CleanEarthMembersrt:AsiaPacificMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000045876srt:AsiaPacificMember2022-01-012022-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:MiddleEastAndAfricaMember2022-01-012022-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:MiddleEastAndAfricaMember2022-01-012022-03-310000045876hsc:MiddleEastAndAfricaMember2022-01-012022-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:EasternEuropeMember2022-01-012022-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:EasternEuropeMember2022-01-012022-03-310000045876hsc:EasternEuropeMember2022-01-012022-03-310000045876hsc:ProductsAndServicesOnsiteServicesAndMaterialLogisticsProductQualityImprovementAndResourceRecoveryMemberhsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000045876hsc:ProductsAndServicesOnsiteServicesAndMaterialLogisticsProductQualityImprovementAndResourceRecoveryMemberhsc:CleanEarthMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310000045876hsc:ProductsAndServicesOnsiteServicesAndMaterialLogisticsProductQualityImprovementAndResourceRecoveryMember2022-01-012022-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:AppliedProductsMember2022-01-012022-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:AppliedProductsMember2022-01-012022-03-310000045876hsc:AppliedProductsMember2022-01-012022-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:AluminumDrossAndScrapProcessingSystemsMember2022-01-012022-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:AluminumDrossAndScrapProcessingSystemsMember2022-01-012022-03-310000045876hsc:AluminumDrossAndScrapProcessingSystemsMember2022-01-012022-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:WasteProcessingAndReuseSolutionsMember2022-01-012022-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:WasteProcessingAndReuseSolutionsMember2022-01-012022-03-310000045876hsc:WasteProcessingAndReuseSolutionsMember2022-01-012022-03-310000045876srt:NorthAmericaMemberhsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000045876hsc:CleanEarthMembersrt:NorthAmericaMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000045876srt:NorthAmericaMember2021-01-012021-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:WesternEuropeMember2021-01-012021-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:WesternEuropeMember2021-01-012021-03-310000045876hsc:WesternEuropeMember2021-01-012021-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMembersrt:LatinAmericaMember2021-01-012021-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMembersrt:LatinAmericaMember2021-01-012021-03-310000045876srt:LatinAmericaMember2021-01-012021-03-310000045876hsc:HarscoEnvironmentalSegmentMembersrt:AsiaPacificMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000045876hsc:CleanEarthMembersrt:AsiaPacificMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000045876srt:AsiaPacificMember2021-01-012021-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:MiddleEastAndAfricaMember2021-01-012021-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:MiddleEastAndAfricaMember2021-01-012021-03-310000045876hsc:MiddleEastAndAfricaMember2021-01-012021-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:EasternEuropeMember2021-01-012021-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:EasternEuropeMember2021-01-012021-03-310000045876hsc:EasternEuropeMember2021-01-012021-03-310000045876hsc:ProductsAndServicesOnsiteServicesAndMaterialLogisticsProductQualityImprovementAndResourceRecoveryMemberhsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000045876hsc:ProductsAndServicesOnsiteServicesAndMaterialLogisticsProductQualityImprovementAndResourceRecoveryMemberhsc:CleanEarthMemberus-gaap:OperatingSegmentsMember2021-01-012021-03-310000045876hsc:ProductsAndServicesOnsiteServicesAndMaterialLogisticsProductQualityImprovementAndResourceRecoveryMember2021-01-012021-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:AppliedProductsMember2021-01-012021-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:AppliedProductsMember2021-01-012021-03-310000045876hsc:AppliedProductsMember2021-01-012021-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:AluminumDrossAndScrapProcessingSystemsMember2021-01-012021-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:AluminumDrossAndScrapProcessingSystemsMember2021-01-012021-03-310000045876hsc:AluminumDrossAndScrapProcessingSystemsMember2021-01-012021-03-310000045876hsc:HarscoEnvironmentalSegmentMemberus-gaap:OperatingSegmentsMemberhsc:WasteProcessingAndReuseSolutionsMember2021-01-012021-03-310000045876hsc:CleanEarthMemberus-gaap:OperatingSegmentsMemberhsc:WasteProcessingAndReuseSolutionsMember2021-01-012021-03-310000045876hsc:WasteProcessingAndReuseSolutionsMember2021-01-012021-03-310000045876hsc:HarscoEnvironmentalSegmentMember2022-03-310000045876hsc:HarscoEnvironmentalSegmentMember2022-04-012022-03-3100000458762023-04-01hsc:HarscoEnvironmentalSegmentMember2022-03-3100000458762024-04-01hsc:HarscoEnvironmentalSegmentMember2022-03-310000045876hsc:HarscoEnvironmentalSegmentMember2025-04-012022-03-3100000458762026-04-01hsc:HarscoEnvironmentalSegmentMember2022-03-310000045876us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-12-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310000045876us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-12-310000045876us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-01-012021-03-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-03-310000045876us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-03-310000045876us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-03-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-310000045876us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-03-310000045876us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-12-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310000045876us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-12-310000045876us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-01-012022-03-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-03-310000045876us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-01-012022-03-310000045876us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-03-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-03-310000045876us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:InterestRateSwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:InterestRateSwapMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000045876us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000045876hsc:DefinedBenefitPlanActuarialGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000045876hsc:DefinedBenefitPlanActuarialGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000045876us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Quarterly Period Ended March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to          
Commission File Number 001-03970
hsc-20220331_g1.jpg
HARSCO CORPORATION
(Exact name of registrant as specified in its charter) 
Delaware23-1483991
(State or other jurisdiction of incorporation or organization)(I.R.S. employer identification number)
350 Poplar Church Road, Camp Hill,Pennsylvania17011
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code  717-763-7064 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $1.25 per shareHSCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  NO
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes   NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
Accelerated filer
Non-accelerated filer
 
(Do not check if a smaller reporting company) Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES  NO 
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
Class 
Outstanding at April 29, 2022
Common stock, par value $1.25 per share 79,417,543


HARSCO CORPORATION
FORM 10-Q
INDEX
 
  Page
 
   
4 
 
 
 
 
 
 
   
   
   
   
   
 
   
   
   
   
   


2

Glossary of Defined Terms

Unless the context requires otherwise, "Harsco," the "Company," "we," "our," or "us" refers to Harsco Corporation on a consolidated basis. The Company also uses several other terms in this Quarterly Report on Form 10-Q, which are further defined below:

TermDescription
AOCIAccumulated Other Comprehensive Income (Loss)
AXCThe former Harsco Industrial Air-X-Changers business
CERCLAComprehensive Environmental Response, Compensation, and Liability Act of 1980
COVID-19The COVID-19 coronavirus pandemic
Credit AgreementCredit Agreement governing the Senior Secured Credit Facilities
DEAUnited States Drug Enforcement Agency
DTSCCalifornia Department of Toxic Substances Control
EBITDAEarnings before interest, tax, depreciation and amortization
ESOLStericycle Environmental Solutions business
FASBFinancial Accounting Standards Board
IBORsInterbank offered rates
ICMSType of value-added tax in Brazil
IKGThe former Harsco Industrial IKG business
ISDAInternational Swaps and Derivatives Association
LIBORLondon Interbank Offered Rates
New Term Loan$500 million term loan raised in March 2021 under the Senior Secured Credit Facilities, maturing on March 10, 2028
Notes5.75% Notes due July 31, 2027
OCIOther Comprehensive Income (Loss)
PA DEPPennsylvania Department of Environmental Protection
Revolving Credit FacilityMulti-year revolving credit facility under the Senior Secured Credit Facility, with a facility limit of $700 million
ROURight of use
SBBFederal railway system of Switzerland
SCESupreme Council for Environment in Bahrain
SECSecurities and Exchange Commission
Senior Secured Credit FacilitiesPrimary source of borrowings comprised of the Revolving Credit Facility and the New Term Loan
SPRAState Revenue Authorities from the State of São Paulo, Brazil
TSDFTreatment, storage, and disposal facility permits issued under the Resource Conservation and Recovery Act
U.S. GAAPAccounting principles generally accepted in the U.S.
3

PART I — FINANCIAL INFORMATION
ITEM 1.      FINANCIAL STATEMENTS

HARSCO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)March 31
2022
December 31
2021
ASSETS  
Current assets:  
Cash and cash equivalents$85,216 $82,908 
Restricted cash4,337 4,220 
Trade accounts receivable, net385,871 377,881 
Other receivables26,128 33,059 
Inventories76,854 70,493 
Prepaid expenses32,393 31,065 
Current portion of assets held-for-sale268,590 265,413 
Other current assets13,096 9,934 
Total current assets892,485 874,973 
Property, plant and equipment, net654,765 653,913 
Right-of-use assets, net96,007 101,576 
Goodwill878,935 883,109 
Intangible assets, net393,733 402,801 
Deferred income tax assets18,207 17,883 
Assets held-for-sale66,518 71,234 
Other assets50,809 48,419 
Total assets$3,051,459 $3,053,908 
LIABILITIES  
Current liabilities:  
Short-term borrowings$7,292 $7,748 
Current maturities of long-term debt17,379 10,226 
Accounts payable189,896 186,126 
Accrued compensation41,780 48,165 
Income taxes payable4,085 6,378 
Current portion of operating lease liabilities25,055 25,590 
Current portion of liabilities of assets held-for-sale168,412 161,999 
Other current liabilities139,661 155,159 
Total current liabilities593,560 601,391 
Long-term debt1,422,384 1,359,446 
Retirement plan liabilities73,710 93,693 
Operating lease liabilities69,563 74,571 
Liabilities of assets held-for-sale8,326 8,492 
Environmental liabilities27,565 28,435 
Deferred tax liabilities26,832 33,826 
Other liabilities48,424 48,284 
Total liabilities2,270,364 2,248,138 
COMMITMENTS AND CONTINGENCIES
HARSCO CORPORATION STOCKHOLDERS’ EQUITY  
Common stock145,261 144,883 
Additional paid-in capital218,779 215,528 
Accumulated other comprehensive loss(547,649)(560,139)
Retained earnings1,754,671 1,794,510 
Treasury stock(848,254)(846,622)
Total Harsco Corporation stockholders’ equity722,808 748,160 
Noncontrolling interests58,287 57,610 
Total equity781,095 805,770 
Total liabilities and equity$3,051,459 $3,053,908 
See accompanying notes to unaudited condensed consolidated financial statements.
4

HARSCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31
(In thousands, except per share amounts)20222021
Revenues from continuing operations:
Service revenues$418,435 $414,339 
Product revenues34,362 32,926 
Total revenues452,797 447,265 
Costs and expenses from continuing operations:
Cost of services sold346,357 329,853 
Cost of products sold30,662 27,514 
Selling, general and administrative expenses69,153 71,614 
Research and development expenses56 157 
Other (income) expenses, net(1,179)(991)
Total costs and expenses445,049 428,147 
Operating income from continuing operations7,748 19,118 
Interest income644 547 
Interest expense(15,092)(16,256)
Unused debt commitment fees, amendment fees and loss on extinguishment of debt(532)(5,258)
Defined benefit pension income2,410 3,934 
Income (loss) from continuing operations before income taxes and equity income(4,822)2,085 
Income tax benefit (expense) from continuing operations(1,221)(2,101)
Equity income (loss) of unconsolidated entities, net(131)(119)
Income (loss) from continuing operations(6,174)(135)
Discontinued operations:
Income (loss) from discontinued businesses(39,097)3,364 
Income tax benefit (expense) from discontinued businesses6,591 (1,664)
Income (loss) from discontinued operations, net of tax(32,506)1,700 
Net income (loss)(38,680)1,565 
Less: Net income attributable to noncontrolling interests(1,159)(1,430)
Net income (loss) attributable to Harsco Corporation$(39,839)$135 
Amounts attributable to Harsco Corporation common stockholders:
Income (loss) from continuing operations, net of tax$(7,333)$(1,565)
Income (loss) from discontinued operations, net of tax(32,506)1,700 
Net income (loss) attributable to Harsco Corporation common stockholders$(39,839)$135 
Weighted-average shares of common stock outstanding79,363 79,088 
Basic earnings (loss) per common share attributable to Harsco Corporation common stockholders:
Continuing operations$(0.09)$(0.02)
Discontinued operations(0.41)0.02 
Basic earnings (loss) per share attributable to Harsco Corporation common stockholders$(0.50)$ 
Diluted weighted-average shares of common stock outstanding79,363 79,088 
Diluted earnings (loss) per common share attributable to Harsco Corporation common stockholders:
Continuing operations$(0.09)$(0.02)
Discontinued operations(0.41)0.02 
Diluted earnings (loss) per share attributable to Harsco Corporation common stockholders$(0.50)$ 

See accompanying notes to unaudited condensed consolidated financial statements.
5

HARSCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
Three Months Ended
 March 31
(In thousands)20222021
Net income (loss)$(38,680)$1,565 
Other comprehensive income (loss):  
Foreign currency translation adjustments, net of deferred income taxes of $(1,838) and $623 in 2022 and 2021, respectively
(2,847)(3,296)
Net income (loss) on cash flow hedging instruments, net of deferred income taxes of $(330) and $(144) in 2022 and 2021, respectively
1,140 689 
Pension liability adjustments, net of deferred income taxes of $(352) and $(338) in 2022 and 2021, respectively
13,718 3,819 
Unrealized gain on marketable securities, net of deferred income taxes of $ and $(7) in 2022 and 2021, respectively
(3)17 
Total other comprehensive income (loss)12,008 1,229 
Total comprehensive income (loss)(26,672)2,794 
Comprehensive income attributable to noncontrolling interests(677)(364)
Comprehensive income (loss) attributable to Harsco Corporation$(27,349)$2,430 

See accompanying notes to unaudited condensed consolidated financial statements.
6

HARSCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
 Three Months Ended March 31
(In thousands)20222021
Cash flows from operating activities:  
Net income (loss)$(38,680)$1,565 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:  
Depreciation33,604 32,748 
Amortization8,586 8,967 
Deferred income tax (benefit) expense(4,275)(3,421)
Equity (income) loss of unconsolidated entities, net131 119 
Dividends from unconsolidated entities178  
Loss on early extinguishment of debt 2,668 
Other, net259 1,128 
Changes in assets and liabilities, net of acquisitions and dispositions of businesses:  
Accounts receivable(15,364)(16,446)
Income tax refunds receivable, reimbursable to seller7,687  
Inventories(4,610)407 
Contract assets4,843 (19,070)
Right-of-use assets7,076 6,768 
Accounts payable1,655 (8,592)
Accrued interest payable(7,393)(7,320)
Accrued compensation(5,692)(1,541)
Advances on contracts(7,808)(9,698)
Operating lease liabilities(7,063)(6,750)
Retirement plan liabilities, net(14,519)(19,267)
Other assets and liabilities7,070 14,562 
Net cash used by operating activities(34,315)(23,173)
Cash flows from investing activities:  
Purchases of property, plant and equipment(32,958)(27,382)
Proceeds from sales of assets5,976 3,862 
Expenditures for intangible assets(54)(68)
Net proceeds (payments) from settlement of foreign currency forward exchange contracts1,061 (1,427)
Payments for settlements of interest rate swaps(1,062) 
Other investing activities, net124 46 
Net cash used by investing activities(26,913)(24,969)
Cash flows from financing activities:  
Short-term borrowings, net2,051 575 
Current maturities and long-term debt:  
Additions72,005 434,873 
Reductions(2,566)(374,530)
Stock-based compensation - Employee taxes paid(1,377)(2,485)
Payment of contingent consideration (6,915) 
Deferred financing costs (6,525)
Other financing activities, net (400)
Net cash provided by financing activities63,198 51,508 
Effect of exchange rate changes on cash and cash equivalents, including restricted cash455 (710)
Net increase in cash and cash equivalents, including restricted cash2,425 2,656 
Cash and cash equivalents, including restricted cash, at beginning of period87,128 79,669 
Cash and cash equivalents, including restricted cash, at end of period$89,553 $82,325 
Supplementary cash flow information:
Change in accrual for purchases of property, plant and equipment included in accounts payable$(745)$1,865 
See accompanying notes to unaudited condensed consolidated financial statements.
7

HARSCO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)
 Harsco Corporation Stockholders’ Equity  
Common StockAdditional Paid-in CapitalRetained
Earnings
Accumulated Other
Comprehensive
Loss
Noncontrolling
Interests
 
(In thousands, except share 
amounts)
IssuedTreasuryTotal
Balances, December 31, 2020$144,288 $(843,230)$204,078 $1,797,759 $(645,741)$56,245 $713,399 
Net income   135  1,430 1,565 
Total other comprehensive income (loss), net of deferred income taxes of $134
2,295 (1,066)1,229 
Stock appreciation rights exercised, net 3,842 shares
9 (70)(9)(70)
Vesting of restricted stock units and other stock grants, net 144,967 shares
312 (1,850)(312)   (1,850)
Vesting of performance share units, net 69,127 shares
155 (1,032)(155)(1,032)
Amortization of unearned portion of stock-based compensation, net of forfeitures  3,342    3,342 
Balances, March 31, 2021144,764 (846,182)206,944 1,797,894 (643,446)56,609 716,583 



 Harsco Corporation Stockholders’ Equity  
(In thousands, except share amounts)Common StockAdditional Paid-in CapitalRetained
Earnings
Accumulated Other
Comprehensive
Loss
Noncontrolling
Interests
 
IssuedTreasuryTotal
Balances, December 31, 2021$144,883 $(846,622)$215,528 $1,794,510 $(560,139)$57,610 $805,770 
Net income   (39,839) 1,159 (38,680)
Total other comprehensive income (loss), net of deferred income taxes of $(2,520)
12,490 (482)12,008 
Vesting of restricted stock units and other stock grants, net 176,253 shares
378 (1,632)(378)   (1,632)
Amortization of unearned portion of stock-based compensation, net of forfeitures  3,629   3,629 
Balances, March 31, 2022145,261 (848,254)218,779 1,754,671 (547,649)58,287 781,095 

See accompanying notes to unaudited condensed consolidated financial statements.
8

HARSCO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.     Basis of Presentation

The Company has prepared these unaudited condensed consolidated financial statements in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the SEC. Accordingly, the unaudited condensed consolidated financial statements do not include all information and disclosure required by U.S. GAAP for annual financial statements. The December 31, 2021 Condensed Consolidated Balance Sheet information contained in this Quarterly Report on Form 10-Q was derived from the 2021 audited consolidated financial statements.  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, 2021. 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. 

Reclassifications

Certain reclassifications have been made to prior year amounts to conform with current year classifications.


2.     Recently Adopted and Recently Issued Accounting Standards

The following accounting standards have been adopted in 2022:

On January 1, 2022, the Company adopted changes issued by the FASB which simplified the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. The adoption of these changes did not have a material impact on the Company's condensed consolidated financial statements.

On January 1, 2022, the Company adopted changes issued by the FASB which improve the transparency of government assistance received by entities. Other than expanded annual disclosures, the adoption of these changes did not have a material impact on the Company's consolidated financial statements.
The following accounting standard has been issued and becomes effective for the Company at a future date:
In March 2020, the FASB issued changes that provide companies with optional guidance to ease the potential accounting burden associated with transitioning from reference rates that are expected to be discontinued. In response to the concerns about risks of IBORs and, particularly, the risk of cessation of LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The changes provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In January 2021, the FASB issued additional clarification changes. The changes can be adopted no later than December 31, 2022 with early adoption permitted. Management does not believe these changes will have a material impact on the Company's consolidated financial statements.

3. Dispositions

Harsco Rail Segment
In November 2021, the Company announced its intention to sell the Rail business. The sales process was ongoing during the first quarter of 2022. The former Harsco Rail Segment has historically been a separate reportable segment with primary operations in the United States, Europe and Asia Pacific.

The former Harsco Rail Segment's balance sheet positions as of March 31, 2022 and December 31, 2021 are presented as Assets held-for-sale and Liabilities of assets held-for-sale in the Condensed Consolidated Balance Sheets and are summarized as follows:
9

(in thousands)March 31
2022
December 31
2021
Trade accounts receivable, net$41,546 $33,689 
Other receivables4,615 4,740 
Inventories102,094 103,560 
Current portion of contract assets94,360 94,597 
Other current assets26,427 25,442 
Property, plant and equipment, net40,009 39,524 
Right-of-use assets, net2,664 3,108 
Goodwill13,026 13,026 
Intangible assets, net2,990 3,081 
Deferred income tax assets6,153 6,064 
Other assets1,224 6,432 
Total Rail assets included in Assets held-for-sale$335,108 $333,263 
Accounts payable$42,874 $46,076 
Accrued compensation3,023 2,171 
Current portion of operating lease liabilities1,456 1,619 
Current portion of advances on contracts53,732 62,401 
Other current liabilities67,327 49,732 
Operating lease liabilities1,474 1,775 
Deferred tax liabilities5,953 5,736 
Other liabilities898 981 
Total Rail liabilities included in Liabilities of assets held-for-sale$176,737 $170,491 
The results of the former Harsco Rail Segment are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for the three months ended March 31, 2022, and 2021. Certain key selected financial information included in Income (loss) from discontinued operations, net of tax for the former Harsco Rail Segment is as follows:
Three Months Ended March 31
(In thousands)20222021
Amounts directly attributable to the former Harsco Rail Segment:
Service revenues$6,710 $10,109 
Product revenues (a)
44,640 71,481 
Cost of services sold4,675 4,653 
Cost of products sold68,981 59,062 
Income (loss) from discontinued businesses(35,895)5,155 
Additional amounts allocated to the former Harsco Rail Segment:
  Selling, general and administrative expenses (b)
$1,649 $ 
(a) The decrease in product revenues for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 is principally due to the liquidated damages and penalties on certain long-term contracts, as discussed below.
(b) The Company has allocated directly attributable transaction costs to discontinued operations.

The Company has retained corporate overhead expenses previously allocated to the former Harsco Rail Segment of $1.0 million for each of the three months ended March 31, 2022, and 2021 as part of Selling, general and administrative expenses on the Condensed Consolidated Statements of Operations.

The Company's former Harsco Rail Segment is currently manufacturing highly-engineered equipment under large long-term fixed-price contracts with the SBB, the infrastructure manager for most of the railway in the U.K. ("Network Rail"), and the national railway company in Germany ("Deutsche Bahn"). As disclosed previously, in the fourth quarter of 2021, the Company recognized an estimated forward loss provision of $33.4 million related to these contracts. In the first quarter of 2022, the Company encountered continued delays and additional costs in the build of the machines. For the Network Rail contracts, the Company encountered additional supply chain delays in the build of the initial machine, and there were further changes to the production schedule based on the manufacturing experience gained from assembling the first unit during the quarter which had a cascading effect on the delivery schedule of remaining machines. As a result, the Company recorded a $24.2 million forward estimated loss provision for additional estimated contractual liquidated damages. The Company continues to negotiate with Network Rail regarding a reduction to these liquidated damages, which could result in additional favorable or unfavorable adjustments in future periods. For the Deutsche Bahn contract, on March 8, 2022 a European-based supplier of critical components to the project indicated it would be significantly late on the delivery of these components to the project, which has the impact of delaying the overall delivery schedule for the project. As a result, the Company recorded an additional $7.4
10

million estimated forward loss provision due principally to the estimated contractual penalties that would be triggered by this delay. For the second SBB contract, the Company recorded an additional $3.5 million forward estimated loss provision due to additional supply chain delays and cost overruns. The estimated forward loss provision represents the Company's best estimate based on currently available information. It is possible that the Company's overall estimate of liquidated damages, penalties and costs to complete these contracts may change, which would result in an additional estimated forward loss provision at such time.

The first contract with SBB is complete, and the second contract is 79% complete as of March 31, 2022. The contracts with Network Rail and Deutsche Bahn are 45% and 22% complete, respectively, as of March 31, 2022.

The following is selected financial information included on the Condensed Consolidated Statements of Cash Flows attributable to the former Harsco Rail Segment:
Three Months Ended March 31
(In thousands)20222021
Non-cash operating items
Depreciation and amortization$ $1,296 
Cash flows from investing activities
Purchases of property, plant and equipment506 365 


4.    Accounts Receivable and Note Receivable
Accounts receivable consist of the following:
(In thousands)March 31
2022
December 31
2021
Trade accounts receivable$392,198 $385,143 
Less: Allowance for expected credit losses(6,327)(7,262)
Trade accounts receivable, net$385,871 $377,881 
Other receivables (a)
$26,128 $33,059 
(a) Other receivables include employee receivables, insurance receivable, tax claims and refunds and other miscellaneous items not included in Trade accounts receivable, net.

The provision for expected credit losses related to trade accounts receivable was as follows:
 Three Months Ended
March 31
(In thousands)20222021
Provision for expected credit losses and doubtful accounts related to trade accounts receivable$325 $654 

At March 31, 2022, $6.5 million of the Company's trade accounts receivable were past due by twelve months or more, with $3.5 million of this amount reserved. Collection of the remaining balance is still ultimately expected.

In January 2020 the Company sold IKG for $85.0 million including cash and a note receivable, subject to post-closing adjustments. The note receivable from the buyer has a face value of $40.0 million, bearing interest at 2.50%, that is paid in kind and matures on January 31, 2027. Any unpaid principal, along with any accrued but unpaid interest is payable at maturity. Prepayment is required in case of a change in control or a percentage of excess cash flow, as defined in the note receivable agreement. Because there are no scheduled payments under the terms of the note receivable, the balance is not classified as current as of March 31, 2022 and is included in the caption Other assets on the Condensed Consolidated Balance Sheet. The initial fair value of the note receivable was $34.3 million which was calculated using an average of various discounted cash flow scenarios based on anticipated timing of repayments (Level 3) and was a non-cash transaction. The note receivable is subsequently measured at amortized cost. Key inputs into the valuation model include: projected timing and amount of cash flows, pro forma debt rating, option-adjusted spread and U.S. Treasury spot rate. At March 31, 2022 the amortized cost of the note receivable was $31.4 million, compared with a fair value of $31.8 million.
(In thousands)March 31
2022
December 31
2021
Note receivable$31,425 $31,025 

11


5.    Inventories
Inventories consist of the following:
(In thousands)March 31
2022
December 31
2021
Finished goods$7,856 $8,323 
Work-in-process5,963 5,393 
Raw materials and purchased parts22,276 21,188 
Stores and supplies40,759 35,589 
Total inventories$76,854 $70,493 


6.     Property, Plant and Equipment
Property, plant and equipment consist of the following:
(In thousands)March 31
2022
December 31
2021
Land$73,071 $73,067 
Land improvements16,934 16,970 
Buildings and improvements224,746 221,236 
Machinery and equipment1,532,183 1,507,214 
Uncompleted construction59,612 63,816 
Gross property, plant and equipment1,906,546 1,882,303 
Less: Accumulated depreciation(1,251,781)(1,228,390)
Property, plant and equipment, net$654,765 $653,913 

In the third quarter of 2020, a customer of the Harsco Environmental Segment in China ceased steel making operations at its steel mill site in order to relocate the operations to a new site, as a result of a government mandate to improve environmental conditions of the area. The Company will continue to provide services to the same customer at the new site. The net book value of the idled equipment associated with the previous location is approximately $20 million. The customer has entered into an agreement with the government where it will receive compensation for the losses the customer has incurred as a result of the forced shutdown. The Company has continued discussions with the customer regarding compensation, which are expected to be protracted. While the customer has initially indicated that they will not provide compensation, the Company and the customer continue to discuss and the Company is evaluating its legal position. In addition, there may be other avenues of pursuing recovery, including seeking relief directly from the local government. At this point, considering the ongoing discussions with the customer, and other avenues, the Company believes it will recover the book value of the equipment and thus does not believe it has an asset impairment as of March 31, 2022. However, the Company will continue to evaluate changes in facts and circumstances and record any impairment charge when and if indicated.


7. Leases
The components of lease expense were as follows:
Three Months Ended
March 31
(In thousands)20222021
Finance leases:
Amortization expense$978 $475 
Interest on lease liabilities183 102 
Operating leases8,069 7,896 
Variable and short-term lease expense13,343 12,102 
Sublease income(2)(49)
Total lease expense from continuing operations$22,571 $20,526 

12

As of March 31, 2022, the Company had additional operating leases for property and equipment that had not yet commenced with estimated operating lease obligations of approximately $16 million to be recognized upon anticipated lease commencement in the second and third quarters of 2022.

8.     Goodwill and Other Intangible Assets
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 its annual goodwill impairment test as of October 1 and monitors for triggering events on an ongoing basis.  The Company determined that, as of March 31, 2022, no interim goodwill impairment testing was necessary.  However, a continued economic downturn, including continued cost inflation and labor shortages could impact the Company's future projected cash flows used to estimate fair value, and/or result in a sustained decrease in the Company's share price, which could result in an impairment charge in a future period.
Because of the lower-than-expected results for the Altek Group of the Harsco Environmental Segment for 2021 due to the timing of customer orders, the Company tested Altek's asset group's recoverability in the fourth quarter of 2021 and no impairment was recorded. The long-lived assets (other than goodwill) of the Altek Group within the Harsco Environmental Segment primarily consist of intangible assets which have a carrying value of approximately $36 million at March 31, 2022. The Company has not identified any triggering events for the Altek asset group in the first quarter of 2022. However, if actual results prove inconsistent with the Company’s assumptions and judgments of the projected cash flows, it could result in impairment of the Altek intangible assets in future periods.

9. Debt and Credit Agreements

On February 22, 2022, the Company amended its Senior Credit Facilities to reset the levels of the net debt to consolidated adjusted EBITDA ratio covenant. As a result of this amendment, the net debt to consolidated adjusted EBITDA ratio covenant was set at 5.75 for the quarter ending March 31, 2022, and then decreases quarterly by 0.25 until reaching 4.00 for the quarter ending December 31, 2023 and thereafter. In addition, upon closing on the divestiture of the former Harsco Rail Segment, the net debt to consolidated adjusted EBITDA ratio covenant will decrease by an additional 0.25, provided, however, it will not go below 4.00.

During the three months ended March 31, 2022 and 2021, the Company recognized total expenses of $0.5 million and $5.3 million, respectively, related to the amended Senior Secured Credit Facilities in the caption Unused debt commitment fees, amendment fees and loss on extinguishment of debt on the Condensed Consolidated Statements of Operations.
Long-term debt consists of the following:
(In thousands)March 31
2022
December 31
2021
Senior Secured Credit Facilities:
New Term Loan$496,250 $497,500 
Revolving Credit Facility 434,000 362,000 
5.75% Notes, due July 31, 2027500,000 500,000 
Other financing payable (including finance leases) in varying amounts27,047 28,389 
Total debt obligations1,457,297 1,387,889 
Less: deferred financing costs(17,534)(18,217)
Total debt obligations, net of deferred financing costs1,439,763 1,369,672 
Less: current maturities of long-term debt(17,379)(10,226)
Long-term debt$1,422,384 $1,359,446 










13

10.  Employee Benefit Plans
 Three Months Ended
March 31
Defined Benefit Pension Plan IncomeU.S. PlansInternational Plans
(In thousands)2022202120222021
Service cost$ $