Discontinued Operations

12 Months Ended

Dec. 31, 2024

Discontinued Operations and Dispositions

Harsco Rail Segment

The results of the Rail business were previously presented as discontinued operations for the periods including November 2021 through February 2024. However, the held for sale criteria were no longer met beginning with March 31, 2024 as the sales process has been paused. The assets and liabilities of the Rail business, previously presented as held for sale, were reclassified to held and used in the Consolidated Balance Sheets as of December 31, 2023, and the results of the Rail business were reclassified from discontinued operations to continuing operations for all periods presented in the 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 $10.7 million by 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 Consolidated Statements of Operations 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 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
Retirement plan assets	344
Deferred income tax assets	973

Other assets	22,448
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 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 years ended December 31, 2023 and 2022:


	Years Ended December 31
(In thousands)	2023		2022

Service revenues	$	52,430	$	29,331
Product revenues	244,365		215,585
Total revenues	296,795		244,916
Cost of services sold	34,552		19,550
Cost of products sold	247,917		223,034
Total cost of sales	282,469		242,584
Selling, general and administrative expenses	41,602		36,799
Research and development expenses	2,172		2,168
Other expense (income) net	1,628		6,917
Total costs and expenses	327,871		288,468
Operating income (loss) from continuing operations	(31,076)		(43,552)
Interest income	139		270
Interest expense	(3,209)		(1,651)
Defined benefit pension income (expense)	26		(5)
Income (loss) from continuing operations before taxes and equity income	(34,120)		(44,938)
Income tax benefit (expense) from continuing operations	(2,681)		5,525
Income (loss) from continuing operations	$	(36,801)	$	(39,413)

Harsco Environmental Segment

On April 1, 2024, the Company completed the sale of Performix, a subsidiary of HE, for $17.5 million, subject to normal post-closing adjustments, and recognized a gain on the sale of $1.8 million (or approximately $1.3 million after-tax). The most material classes of assets on the date of the sale were Accounts receivable of $4.7 million and Goodwill of $5.3 million.

On August 29, 2024, the Company completed the sale of Reed, a subsidiary of HE, for $45.0 million subject to normal post-closing adjustments, and recognized a gain on sale of $8.7 million (or approximately $2.8 million after-tax). The most material classes of assets and liabilities on the date of the sale were Trade accounts receivable, net of $9.9 million, Inventories of $7.1 million, Property, plant and equipment ("PP&E") net of $10.7 million, Goodwill of $13.7 million and Accounts payable of $6.9 million.

Other

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