Discontinued Operations and Dispositions

3 Months Ended

Mar. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Dispositions

Harsco Rail Segment

The results of the Rail business were previously presented as discontinued operations. However, the held for sale criteria were no longer met as of March 31, 2024 as the sales process has been paused. The assets and liabilities of the Rail business, previously presented as held for sale, have been reclassified to held and used in the Condensed Consolidated Balance Sheets as of December 31, 2023, and the results of the Rail business have been reclassified from discontinued operations to continuing operations for all periods presented in the Condensed Consolidated Statements of Operations. The Rail business’ assets and liabilities as of March 31, 2024 were measured at the carrying amount before the assets were classified as held for sale, reduced by $10.7 million representing the depreciation and amortization expense that would have been recognized had the assets been continuously classified as held for use. The $10.7 million reduction to the carrying value of the Rail assets was reported in Remeasurement of long-lived assets in the first quarter of 2024.

The reclassification of the Rail business's balance sheet positions as of December 31, 2023 had the following impacts on the Condensed Consolidated Balance Sheets and are summarized as follows:


(in thousands)	December 31 2023
Trade accounts receivable, net	$	57,415
Other receivables	6,708
Inventories	103,077
Current portion of contract assets	56,341
Prepaid expenses	28,797
Other current assets	2,895
Property, plant and equipment, net	44,113
Right-of-use assets, net	7,050
Goodwill	13,026
Intangible assets, net	3,122
Deferred income tax assets	973

Other assets	22,792
Total assets	$	346,309

Accounts payable	$	44,703
Accrued compensation	6,056
Income taxes payable	1,434
Current portion of operating lease liabilities	3,656
Current portion of advances on contracts	32,912
Reserve for forward losses on contracts	52,725
Other current liabilities	30,550

Operating lease liabilities	3,331
Deferred tax liabilities	350
Other liabilities	494
Total liabilities	$	176,211

The reclassification of the results of the Rail business to continuing operations had the following impacts on the Consolidated Statement of Operations for the three months ended March 31, 2023:


	Three Months Ended
	March 31
(In thousands)		2023
Service revenues		$	7,720
Product revenues		57,332
Total revenues		65,052
Cost of services sold		5,626
Cost of products sold		45,743
Total cost of sales		51,369
Selling, general and administrative expenses		9,926
Research and development expenses		344
Other expense (income)		503
Total costs and expenses		62,142
Operating income from continuing operations		2,910
Interest income		25
Interest expense		(667)
Defined benefit pension income		6
Income (loss) from continuing operations before income taxes		2,274
Income tax benefit (expense) from continuing operations		(1,094)
Income (loss) from continuing operations		$	1,180

Harsco Environmental Segment

On April 1, 2024, the Company completed the sale of Performix Metallurgical Additives, LLC, a subsidiary of HE. As the criteria for discontinued operations accounting was not met but the sale was probable as of March 31, 2024, the assets and liabilities of this business have been classified as held for sale in the Company’s Consolidated Balance Sheet. The most material classes of assets as of March 31, 2024 were Accounts receivable of $4.7 million and Goodwill of $5.3 million.

Other

Discontinued operations include costs directly attributable to retained contingent liabilities of other previously disposed businesses.