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Basis of Presentation (Policies)
 9 Months Ended
Sep. 30, 2018
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 in accordance with accounting principles generally accepted in the U.S. (“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 Securities and Exchange Commission (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, 2017 Condensed Consolidated Balance Sheet information contained in this Quarterly Report on Form 10-Q was derived from the 2017 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, 2017. 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 Reclassifications
Certain reclassifications have been made to prior year amounts to conform with current year classifications.
Recently Adopted and Recently Issued Accounting Standards Recently Adopted and Recently Issued Accounting Standards
The following accounting standards have been adopted in 2018:
On January 1, 2018, the Company adopted changes, with subsequent amendments, issued by the Financial Accounting Standards Board ("FASB") 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 adoption of these changes resulted in the following modifications to the Company's revenue recognition process:

•
Harsco Industrial Segment - The timing of revenue recognition for air-cooled heat exchanger sales, which the Company historically recognized upon the completion of the efforts associated with these arrangements, is now recognized over time with the impact of increasing revenue in earlier periods. This change also impacted the Company's Condensed Consolidated Balance Sheets by decreasing both Inventories and Advances on contracts; and creating a new caption and establishing a balance related to Contract assets.
•
Harsco Rail Segment - The timing of revenue recognition for certain railway track maintenance equipment sales, which the Company historically recognized upon the completion of the efforts associated with these arrangements, is now recognized over time with the impact of increasing revenue in earlier periods. This change also impacted the Company's Condensed Consolidated Balance Sheets by decreasing both Inventories and Advances on contracts; and creating a new caption and establishing a balance related to Contract assets. In addition, certain advance payments received from customers, which provide a significant benefit of financing and are expected to be outstanding longer than twelve months, are treated as significant financing components to the related transactions and the Company will increase the overall transaction price with a corresponding increase in interest expense.

Additionally, the Company's disclosure related to revenue recognition has been expanded in accordance with the FASB changes. Please refer to Note 14, Revenue Recognition for additional information.

The Company chose to implement the impact of the FASB changes utilizing the modified retrospective transition method, using the following practical expedients:

•
The Company has elected to apply the changes only to revenue arrangements that were not completed as of January 1, 2018; and
•
The Company has elected to reflect the aggregate effect of all contract modifications that occurred prior to the beginning of the earliest reported period when (i) identifying the satisfied and unsatisfied performance obligations;
(ii) determining the transaction price; and (iii) allocating the transaction price to the satisfied and unsatisfied performance obligations.

Comparative information has not been restated and continues to be reported under U.S. GAAP in effect for those periods.
The cumulative effect of the changes made to the Condensed Consolidated Balance Sheet at January 1, 2018 was as follows:
(In thousands)
 
Balance at
December 31, 2017
 
Impact of Adoption
 
Balance at January 1,
2018
ASSETS
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
  Trade accounts receivable, net
 
$
288,034

 
$
532

 
$
288,566

  Inventories
 
178,293

 
(59,793
)
 
118,500

  Current portion of contract assets
 
—

 
18,248

 
18,248

  Other current assets
 
39,332

 
179

 
39,511

     Total current assets
 
592,092

 
(40,834
)
 
551,258

Contract assets
 
—

 
3,566

 
3,566

Other assets
 
15,263

 
1,337

 
16,600

     Total assets
 
1,578,685

 
(35,931
)
 
1,542,754

LIABILITIES
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
  Current portion of advances on contracts
 
117,958

 
(78,507
)
 
39,451

  Other current liabilities
 
133,368

 
13,995

 
147,363

     Total current liabilities
 
474,128

 
(64,512
)
 
409,616

Advances on contracts
 
—

 
24,564

 
24,564

Other liabilities
 
40,846

 
1,580

 
42,426

     Total liabilities
 
1,363,520

 
(38,368
)
 
1,325,152

HARSCO CORPORATION STOCKHOLDERS' EQUITY
 
 
 
 
 
 
Accumulated other comprehensive loss
 
(546,582
)
 
(1,520
)
 
(548,102
)
Retained earnings
 
1,157,801

 
3,957

 
1,161,758

     Total Harsco Corporation stockholders' equity
 
170,451

 
2,437

 
172,888

     Total equity
 
215,165

 
2,437

 
217,602

     Total liabilities and equity
 
1,578,685

 
(35,931
)
 
1,542,754


The impact of modifying the Company's Condensed Consolidated Balance Sheet at September 30, 2018 is as follows:
 
 
September 30, 2018
(In thousands)
 
As Reported
 
Impact of Adoption
 
As Reported - Less Impact of Adoption
ASSETS
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
  Trade accounts receivable, net
 
$
304,165

 
$
(535
)
 
$
303,630

  Inventories
 
137,768

 
91,285

 
229,053

  Current portion of contract assets
 
27,870

 
(27,870
)
 
—

  Other current assets
 
42,068

 
(157
)
 
41,911

     Total current assets
 
631,578

 
62,723

 
694,301

Contract assets
 
3,566

 
(3,566
)
 
—

Deferred income tax assets
 
39,824

 
1,874

 
41,698

Other assets
 
21,002

 
(1,040
)
 
19,962

     Total assets
 
1,660,417

 
59,991

 
1,720,408

 
 
September 30, 2018
(In thousands)
 
As Reported
 
Impact of Adoption
 
As Reported - Less Impact of Adoption
LIABILITIES
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
  Current portion of advances on contracts
 
43,682

 
83,121

 
126,803

  Other current liabilities
 
121,887

 
(8,608
)
 
113,279

     Total current liabilities
 
431,074

 
74,513

 
505,587

Advances on contracts
 
10,322

 
(10,322
)
 
—

Other liabilities
 
54,273

 
(216
)
 
54,057

     Total liabilities
 
1,356,026

 
63,975

 
1,420,001

HARSCO CORPORATION STOCKHOLDERS' EQUITY
 
 
 
 
 
 
Accumulated other comprehensive loss
 
(555,291
)
 
1,679

 
(553,612
)
Retained earnings
 
1,252,840

 
(5,671
)
 
1,247,169

     Total Harsco Corporation stockholders' equity
 
261,551

 
(3,992
)
 
257,559

Noncontrolling interests
 
42,840

 
8

 
42,848

     Total equity
 
304,391

 
(3,984
)
 
300,407

     Total liabilities and equity
 
1,660,417

 
59,991

 
1,720,408


The impact of modifying the Company's Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2018 are as follows:
 
 
Three Months Ended
 
 
September 30, 2018
(In thousands, except per share amounts)
 
As Reported
 
Impact of Adoption
 
As Reported - Less Impact of Adoption
Revenues from continuing operations:
 
 
 
 
 
 
     Services revenues
 
$
250,890

 
$
512

 
$
251,402

     Product revenues
 
194,585

 
(15,411
)
 
179,174

          Total revenues
 
445,475

 
(14,899
)
 
430,576

Costs and expenses from continuing operations:
 
 
 
 
 
 
     Costs of services sold
 
194,459

 
1,273

 
195,732

     Costs of products sold
 
132,262

 
(11,979
)
 
120,283

     Selling, general and administrative costs
 
59,297

 
66

 
59,363

          Total costs and expenses
 
388,366

 
(10,640
)
 
377,726

          Operating income from continuing operations
 
57,109

 
(4,259
)
 
52,850

Interest expense
 
(9,665
)
 
550

 
(9,115
)
          Income from continuing operations before income taxes
 
48,821

 
(3,709
)
 
45,112

Income tax (expense) benefit
 
(13,833
)
 
932

 
(12,901
)
          Income from continuing operations
 
34,988

 
(2,777
)
 
32,211

Net income
 
34,651

 
(2,777
)
 
31,874

     Less: Net income attributable to noncontrolling interests
 
(1,804
)
 
(10
)
 
(1,814
)
Net income attributable to Harsco Corporation
 
32,847

 
(2,787
)
 
30,060

Amounts attributable to Harsco Corporation common stockholders:
 
 
 
 
 
 
Income from continuing operations, net of tax
 
33,184

 
(2,787
)
 
30,397

Net income attributable to Harsco Corporation common stockholders
 
32,847

 
(2,787
)
 
30,060

Basic earnings per share attributable to Harsco Corporation common stockholders:
     Continuing operations
 
0.41

 
(0.03
)
 
0.38

Basic earnings per share attributable to Harsco Corporation common stockholders
 
0.41

 
(0.03
)
 
0.37

Diluted earnings per share attributable to Harsco Corporation common stockholders:
     Continuing operations
 
0.40

 
(0.03
)
 
0.36

Diluted earnings per share attributable to Harsco Corporation common stockholders
 
0.39

 
(0.03
)
 
0.36

 
 
Nine Months Ended
 
 
September 30, 2018
(In thousands, except per share amounts)
 
As Reported
 
Impact of Adoption
 
As Reported - Less Impact of Adoption
Revenues from continuing operations:
 
 
 
 
 
 
     Services revenues
 
$
763,815

 
$
4,182

 
$
767,997

     Product revenues
 
521,670

 
(34,269
)
 
487,401

          Total revenues
 
1,285,485

 
(30,087
)
 
1,255,398

Costs and expenses from continuing operations:
 
 
 
 
 
 
     Costs of services sold
 
589,738

 
3,980

 
593,718

     Costs of products sold
 
367,218

 
(30,091
)
 
337,127

     Selling, general and administrative costs
 
175,307

 
103

 
175,410

          Total costs and expenses
 
1,138,210

 
(26,008
)
 
1,112,202

          Operating income from continuing operations
 
147,275

 
(4,079
)
 
143,196

Interest expense
 
(29,241
)
 
1,453

 
(27,788
)
          Income from continuing operations before income taxes
 
121,195

 
(2,626
)
 
118,569

Income tax (expense) benefit
 
(24,043
)
 
919

 
(23,124
)
          Income from continuing operations
 
97,152

 
(1,707
)
 
95,445

Net income
 
96,939

 
(1,707
)
 
95,232

     Less: Net income attributable to noncontrolling interests
 
(5,795
)
 
(8
)
 
(5,803
)
Net income attributable to Harsco Corporation
 
91,144

 
(1,715
)
 
89,429

Amounts attributable to Harsco Corporation common stockholders:
 
 
 
 
 
 
Income from continuing operations, net of tax
 
91,357

 
(1,715
)
 
89,642

Net income attributable to Harsco Corporation common stockholders
 
91,144

 
(1,715
)
 
89,429

Basic earnings per share attributable to Harsco Corporation common stockholders:
     Continuing operations
 
1.13

 
(0.02
)
 
1.11

Basic earnings per share attributable to Harsco Corporation common stockholders
 
1.13

 
(0.02
)
 
1.11

Diluted earnings per share attributable to Harsco Corporation common stockholders:
     Continuing operations
 
1.09

 
(0.02
)
 
1.07

Diluted earnings per share attributable to Harsco Corporation common stockholders
 
1.09

 
(0.02
)
 
1.07


The impact of modifying the Company's Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 is as follows:
 
 
Nine Months Ended
 
 
September 30, 2018
(In thousands)
 
As Reported
 
Impact of Adoption
 
As Reported - Less Impact of Adoption
Cash flows from operating activities:
 
 
 
 
 
 
  Net income
 
$
96,939

 
$
(1,707
)
 
$
95,232

Adjustments to reconcile net income to net cash used by operating activities:
Deferred income tax expense (benefit)
 
1,996

 
(919
)
 
1,077

Changes in assets and liabilities:
 
 
 
 
 
 
Accounts receivable
 
(29,022
)
 
8

 
(29,014
)
Inventories
 
(18,852
)
 
(34,923
)
 
(53,775
)
Contract assets
 
(10,427
)
 
10,427

 
—

Advances on contracts
 
(12,339
)
 
21,794

 
9,455

Other assets and liabilities
 
(14,164
)
 
5,320

 
(8,844
)
     Net cash used by operating activities
 
95,014

 
—

 
95,014









On January 1, 2018, the Company adopted changes issued by the FASB related to how employers that sponsor defined benefit pension plans and other postretirement plans present the net periodic pension cost ("NPPC") in the statement of operations. Employers are required to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. Other components of NPPC are required to be presented in the statement of operations separately from the service cost component and outside of the subtotal of income from operations. The changes also allow only the service cost component to be eligible for capitalization. The adoption of these changes resulted in the Company reclassifying $0.7 million and $2.1 million of NPPC expense for the three and nine months ended September 30, 2017, respectively, from the captions Cost of services sold; Cost of products sold; and Selling, general and administrative expenses to the new caption, Defined benefit pension income (expense) in the Company's Condensed Consolidated Statements of Operations.

On January 1, 2018, the Company adopted changes issued by the FASB clarifying when revisions to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The changes require modification accounting only in circumstances when the terms or conditions result in changes to the fair value, vesting conditions or classification of the award as an equity instrument or a liability. The adoption of these changes did not have an impact on the Company's condensed consolidated financial statements.

On January 1, 2018, the Company adopted changes issued by FASB which eliminate the requirement to defer the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Under the new guidance, an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The changes resulted in an adjustment to opening retained earnings of less than
$0.1 million.
The following accounting standards have been issued and become effective for the Company at a future date:
In February 2016, the FASB issued changes, with subsequent amendments, in accounting for leases, which become effective for the Company on January 1, 2019.  The changes introduce a lessee model that brings most leases onto the balance sheet, which will result in an increase in lease-related assets and liabilities.  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 lease 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 Company has completed an assessment of existing leasing agreements and is in the process of quantifying the impact on the Company’s consolidated financial statements. The Company has elected to adopt these changes on a modified retrospective basis and the practical expedients allowing for adoption on a prospective basis. In addition, the Company is in the process of identifying changes to current business processes and internal controls to support the reporting and disclosure requirements of the new standard.

In January 2017, the FASB issued changes that remove the second step of the annual goodwill impairment test, which requires a hypothetical purchase price allocation. The changes provide that the amount of goodwill impairment will be equal to the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance remains largely unchanged. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The changes become effective for the Company on January 1, 2020. Management has determined that these changes will not have a material impact on the Company's condensed consolidated financial statements. However, should the Company be required to record a goodwill impairment charge in future periods, the amount recorded may differ compared to any amounts that might be recorded under current practice.

In August 2017, the FASB issued changes which expand and refine hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedged items in the financial statements and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in this update should be applied to hedging relationships existing on the date of adoption, which includes a cumulative-effect adjustment to eliminate any ineffectiveness recorded to accumulated other comprehensive income or loss with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year in which adoption occurred. Presentation and disclosure amendments are required to be applied prospectively. 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 February 2018, the FASB issued changes which allow entities to reclassify stranded income tax effects resulting from the Tax Cuts and Jobs Act (the “Act”) from accumulated other comprehensive income to retained earnings in their consolidated financial statements. Under the Act, deferred taxes were adjusted to reflect the reduction of the historical corporate income
tax rate to the newly enacted corporate income tax rate, which left the tax effects on items within accumulated other comprehensive income stranded at historical tax rates. The changes become effective for the Company on January 1, 2019. The Company had approximately $21 million of stranded income tax effects in accumulated other comprehensive income at December 31, 2017 resulting from the Act which the Company plans to reclassify upon initial adoption of these changes.

In August 2018, the FASB issued changes which modify the disclosure requirements for fair value measurements. The amendments in this update remove the requirement to disclose the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. The changes require disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The changes become effective for the Company on January 1, 2020. Management is currently evaluating the impact of these changes on its condensed consolidated financial statements.

In August 2018, the FASB issued changes which modify the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The changes remove the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. The update also requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The changes become effective for the Company on January 1, 2021. Management is currently evaluating the impact of these changes on its condensed consolidated financial statements.

In August 2018, the FASB issued changes that require entities that are customers in cloud computing arrangements to defer implementation costs if they would be capitalized by the entity in software licensing arrangements under the internal-use software guidance. The Company intends to early adopt these changes effective October 1, 2018.