Restructuring Programs

The Company instituted restructuring programs in 2010 and 2011 as detailed below. The overall objective of the programs was to balance short-term profitability goals with long-term strategies to establish platforms upon which the affected businesses could grow with reduced fixed investment while generating annual operating expense savings. The programs were instituted in response to the continuing impact of global financial and economic uncertainty on the Company’s end markets, particularly in the Company’s Harsco Infrastructure Segment.

Within the Harsco Infrastructure Segment, these restructuring programs are part of an ongoing strategy to improve organizational efficiency and enhance profitability and stockholder value. The strategy includes optimizing the Segment as a more streamlined, efficient, cost-effective, disciplined and market-focused global platform.

Restructuring costs incurred in these programs were recorded in the Other expenses line of the Consolidated Statements of Operations.

2011/2012 Restructuring Program

Under the 2011/2012 Restructuring Program, the Company optimized rental assets and sale inventories by removing non-core assets under an expanded product rationalization and branch structure reduction program undertaken in its Harsco Infrastructure Segment; and reduced the global workforce in the Harsco Infrastructure and Harsco Metals & Minerals Segments. As previously disclosed in the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2011, the Company incurred approximately $101 million in pre-tax charges under this program in 2011. Benefits under this program, in the form of reduced costs, were $55 million in 2012 and are expected to be more than $63 million when fully annualized in 2013. Certain benefits under this program were accelerated and resulted in greater than initially anticipated cost savings in 2012.

The restructuring accrual for the 2011/2012 Restructuring Program at December 31, 2012 and the activity for the year then ended are as follows:



(In thousands)	Accrual December 31 2011		Additional Expenses Incurred (a)		Non-Cash Charges / Adjustments			Cash Payments			Foreign Currency Translation			Remaining Accrual December 31 2012
Harsco Infrastructure Segment
Employee termination benefit costs	$	14,500	$	17,495	$	(326	)	$	(25,265	)	$	595		$	6,999
Cost to exit activities	2,833		45,927		215			(39,997		)	22			9,000
Total Harsco Infrastructure Segment (b)	17,333		63,422		(111		)	(65,262		)	617			15,999

Harsco Metals & Minerals Segment
Employee termination benefit costs	12,737		4,974		—			(11,017		)	(200		)	6,494
Cost to exit activities	—		499		—			—			—			499
Total Harsco Metals & Minerals Segment	12,737		5,473		—			(11,017		)	(200		)	6,993

Harsco Rail Segment
Employee termination benefit costs	50		67		—			(117		)	—			—

Harsco Corporate
Employee termination benefit costs	351		371		—			(709		)	—			13
Total	$	30,471	$	69,333	$	(111	)	$	(77,105	)	$	417		$	23,005

(a) Includes principally the recognition of additional expenses due to timing considerations under U.S. GAAP, as well as adjustments to previously recorded restructuring charges resulting from changes in facts and circumstances in the implementation of these activities.

(b) The table does not include $25.0 million of non-cash product rationalization expense or $17.7 million of proceeds from asset sales under the 2011/2012 Restructuring Program for this Segment as these items did not impact the restructuring accrual during 2012.

Cash payments related to the remaining accrual at December 31, 2012 are expected to be paid principally throughout 2013 with approximately $7 million of exit activity costs for lease terminations expected to be paid over the remaining life of the leases.

Fourth Quarter 2010 Harsco Infrastructure Program

Under the Fourth Quarter 2010 Harsco Infrastructure Program, the Harsco Infrastructure Segment reduced its branch structure; consolidated and/or closed administrative office locations; reduced its global workforce; and rationalized its product lines.

The restructuring accrual for the Fourth Quarter 2010 Harsco Infrastructure Program at December 31, 2012 and the activity for the year then ended are as follows:



(In thousands)	Accrual December 31 2011		Adjustments to Previously Recorded Restructuring Charges (a)			Cash Payments			Foreign Currency Translation			Remaining Accrual December 31 2012
Harsco Infrastructure Segment
Cost to exit activities	$	11,929	$	(805	)	$	(4,178	)	$	(155	)	$	6,791
Employee termination benefit costs	211		(208		)	—			(3		)	—
Other	7		(5		)	—			(2		)	—
Total	$	12,147	$	(1,018	)	$	(4,178	)	$	(160	)	$	6,791

(a) Adjustments to previously recorded restructuring charges resulted from changes in facts and circumstances in the implementation of these activities.

Approximately $6 million of the December 31, 2012 balance relates to payment of multiemployer pension plan withdrawal liabilities and is expected to be paid through 2023 under contractual payment terms with the related plan administrators. The remaining balance primarily relates to costs for lease terminations that are expected to be paid over the remaining life of the leases.

Prior Restructuring Programs

Other restructuring actions were undertaken in 2010, in addition to the Fourth Quarter 2010 Harsco Infrastructure Program described above, to reduce the Company’s cost structure.

The restructuring accrual for those prior restructuring programs at December 31, 2012 and the activity for the year then ended are as follows:



(In thousands)	Accrual December 31 2011		Adjustments to Previously Recorded Restructuring Charges (a)			Cash Payments			Foreign Currency Translation			Remaining Accrual December 31 2012
Harsco Metals & Minerals Segment
Employee termination benefit costs	$	1,280	$	(1,263	)	$	(43	)	$	26		$	—
Cost to exit activities	727		—			(124		)	(13		)	590
Total	$	2,007	$	(1,263	)	$	(167	)	$	13		$	590

(a) Adjustments to previously recorded restructuring charges resulted from changes in facts and circumstances in the implementation of these activities.

Cash payments related to the remaining accrual at December 31, 2012 are expected to be paid in 2013.