|
Delaware
|
23-1483991
|
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
employer identification number)
|
|
|
350
Poplar Church Road, Camp Hill, Pennsylvania
|
17011
|
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
Registrant’s telephone
number, including area
code 717-763-7064
|
||
|
Title of each class
|
Name of each exchange on which
registered
|
|
Common
stock, par value $1.25 per share
|
New
York Stock Exchange
|
|
Preferred
stock purchase rights
|
|
Large
accelerated filer x
Non-accelerated
filer o (Do
not check if a smaller reporting company)
|
Accelerated
filer o
Smaller reporting company o
|
|
Class
|
Outstanding at January 31,
2010
|
|
|
Common
stock, par value $1.25 per share
|
80,505,994
|
|
Page
|
|||
|
PART I
|
|||
|
Item
1.
|
Business.
|
3 -
8
|
|
|
Item
1A.
|
Risk
Factors.
|
8 -
17
|
|
|
Item
1B.
|
Unresolved
Staff Comments.
|
17
|
|
|
Item
2.
|
Properties.
|
17
- 18
|
|
|
Item
3.
|
Legal
Proceedings.
|
18
|
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders.
|
18
|
|
|
Supplementary
Item.
|
Executive
Officers of the Registrant (Pursuant to Instruction 3 to Item 401(b) of
Regulation S-K).
|
19
- 20
|
|
|
PART II
|
|||
|
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchase of Equity Securities.
|
21
|
|
|
Item
6.
|
Selected
Financial Data.
|
22
|
|
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
23
- 50
|
|
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk.
|
50
|
|
|
Item
8.
|
Financial
Statements and Supplementary Data.
|
51
- 105
|
|
|
Item
9.
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure.
|
105
|
|
|
Item
9A.
|
Controls
and Procedures.
|
105
|
|
|
Item
9B.
|
Other
Information.
|
105
|
|
|
PART III
|
|||
|
Item
10.
|
Directors,
Executive Officers and Corporate Governance.
|
106
|
|
|
Item
11.
|
Executive
Compensation.
|
106
|
|
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
|
106
|
|
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence.
|
107
|
|
|
Item
14.
|
Principal
Accounting Fees and Services.
|
107
|
|
|
PART IV
|
|||
|
Item
15.
|
Exhibits,
Financial Statement Schedules.
|
108
- 115
|
|
|
SIGNATURES
|
116
|
||
|
Item
1.
|
Business.
|
|
Principal
Lines of Business
|
Principal
Business Drivers
|
||
| · |
Engineered
scaffolding, concrete forming and shoring, and other access-related
services, rentals and sales
|
·
·
|
Infrastructure
and non-residential construction
Industrial
plant maintenance requirements
|
| · |
Outsourced,
on-site services to steel mills and other metals producers
|
·
·
|
Global
metals production and capacity utilization
Outsourcing
of services by metals producers
|
| · |
Railway
track maintenance services and equipment
|
·
·
|
Global
railway track maintenance-of-way capital spending
Outsourcing
of track maintenance and new track construction by railroads
|
| · |
Minerals
and recycling technologies
|
· |
Demand
for high-value specialty steel and ferro alloys
|
| · |
Industrial
grating products
|
·
·
|
Industrial
plant and warehouse construction and expansion
Off-shore
drilling and new rig construction
|
| · |
Air-cooled
heat exchangers
|
· |
Natural
gas compression, transmission and demand
|
| · |
Industrial
abrasives and roofing granules
|
·
·
|
Industrial
and infrastructure surface preparation and restoration
Residential
roof replacement
|
| · |
Heat
transfer products
|
· |
Commercial
and institutional boiler and water heater
requirements
|
|
Harsco
Infrastructure Segment
|
||
|
2009
Percentage
|
||
|
Region
|
of
Revenues
|
|
|
Western
Europe
|
58%
|
|
|
North
America
|
20%
|
|
|
Middle
East and Africa
|
12%
|
|
|
Eastern
Europe
|
6%
|
|
|
Latin
America (a) (b)
|
2%
|
|
|
Asia-Pacific
(b)
|
2%
|
|
|
(a)
|
Including
Mexico.
|
|
(b)
|
Revenues
in these regions are expected to increase
in
|
|
|
2010
as a result of recent acquisitions.
|
|
Harsco
Metals Segment
|
||
|
2009
Percentage
|
||
|
Region
|
of
Revenues
|
|
|
Western
Europe
|
49%
|
|
|
North
America
|
16%
|
|
|
Latin
America (a)
|
14%
|
|
|
Middle
East and Africa
|
9%
|
|
|
Asia-Pacific
|
8%
|
|
|
Eastern
Europe
|
4%
|
|
|
Harsco
Rail Segment
|
||
|
2009
Percentage
|
||
|
Region
|
of
Revenues
|
|
|
North
America (a)
|
83%
|
|
|
Western
Europe
|
12%
|
|
|
Asia-Pacific
|
4%
|
|
|
Middle
East and Africa
|
1%
|
|
|
|
(a)
|
North
America revenues include export sales throughout
the
world that originate from North
America.
|
|
|
(1)
|
(i)
|
The
products and services of the Company are generated through a number of
product groups. These product groups are more fully discussed
in Note 14, Information by Segment and Geographic Area, to the
Consolidated Financial Statements under Part II, Item 8, “Financial
Statements and Supplementary Data.” The product groups that
contributed 10% or more as a percentage of consolidated sales in any of
the last three fiscal years are set forth in the following
table:
|
|
Percentage
of Consolidated Sales
|
||||
|
Product
Group
|
2009
|
2008
|
2007
|
|
|
Services
and equipment for infrastructure construction and industrial
maintenance
|
39%
|
39%
|
39%
|
|
|
On-site
services to metal producers
|
36%
|
40%
|
41%
|
|
|
Railway
track maintenance services and equipment
|
10%
|
7%
|
6%
|
|
|
|
(1)
|
(ii)
|
New
products and services are added from time to time; however, in 2009 none
required the investment of a material amount of the Company’s
assets.
|
|
|
(1)
|
(iii)
|
The
manufacturing requirements of the Company’s operations are such that no
unusual sources of supply for raw materials are required. The
raw materials used by the Company for its limited product manufacturing
include principally steel and, to a lesser extent, aluminum, which are
usually readily available. The profitability of the Company’s
manufactured products is affected by changing purchase prices of steel and
other materials and commodities. If steel or other material
costs associated with the Company’s manufactured products increase and the
costs cannot be passed on to the Company’s customers, operating income
would be adversely impacted. Additionally, decreased
availability of steel or other materials could affect the Company’s
ability to produce manufactured products in a timely manner. The
Harsco Minerals business unit uses raw materials sourced from boiler slag,
which is a coal combustion by-product. If the Company cannot
obtain the necessary raw materials for its manufactured products, then
revenues, operating income and cash flows will be adversely
affected. Certain services performed by the Harsco Minerals
business result in the recovery, processing and sale of specialty steel
scrap concentrate and ferro alloys to its customers. The selling
price of the by-product material is principally market-based and varies
based upon the current market value of its components. Therefore,
the revenue amounts recorded from the sale of such by-product material
varies based upon the market value of the commodity components being
sold.
|
|
|
(1)
|
(iv)
|
While
the Company has a number of trademarks, patents and patent applications,
it does not consider that any material part of its business is dependent
upon them.
|
|
|
(1)
|
(v)
|
The
Company furnishes products and materials and certain industrial services
within the Harsco Infrastructure and the All Other Category that are
seasonal in nature. As a result, the Company’s sales and net
income for the first quarter ending March 31 are normally lower than the
second, third and fourth quarters. Additionally, the Company
has historically generated the majority of its cash flows in the second
half of the year. This is a result of normally higher income
during the latter part of the year. The Company’s historical
revenue patterns and cash provided by operating activities were as
follows:
|
|
(In
millions)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
|
First
Quarter Ended March 31
|
$ | 696.9 | $ | 987.8 | $ | 840.0 | $ | 682.1 | $ | 558.0 | ||||||||||
|
Second
Quarter Ended June 30
|
777.0 | 1,099.6 | 946.1 | 766.0 | 606.0 | |||||||||||||||
|
Third
Quarter Ended September 30
|
744.2 | 1,044.9 | 927.4 | 773.3 | 599.5 | |||||||||||||||
|
Fourth
Quarter Ended December 31
|
772.5 | 835.5 | 974.6 | 804.2 | 632.5 | |||||||||||||||
|
Totals
|
$ | 2,990.6 | $ | 3,967.8 | $ | 3,688.2 | (a) | $ | 3,025.6 | $ | 2,396.0 | |||||||||
|
(In
millions)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
|
First
Quarter Ended March 31
|
$ | 39.6 | $ | 32.0 | $ | 41.7 | $ | 69.8 | $ | 48.1 | ||||||||||
|
Second
Quarter Ended June 30
|
116.7 | 178.5 | 154.9 | 114.5 | 86.3 | |||||||||||||||
|
Third
Quarter Ended September 30
|
120.4 | 171.6 | 175.7 | 94.6 | 98.1 | |||||||||||||||
|
Fourth
Quarter Ended December 31
|
157.8 | 192.2 | 99.4 | 130.3 | 82.7 | |||||||||||||||
|
Totals
|
$ | 434.5 | $ | 574.3 | $ | 471.7 | $ | 409.2 | $ | 315.3 | (a) | |||||||||
|
(a)
|
Does
not total due to rounding.
|
|
|
(1)
|
(vi)
|
The
practices of the Company relating to working capital are similar to those
practices of other industrial service providers or manufacturers servicing
both domestic and international industrial customers and commercial
markets. These practices include the
following:
|
|
·
|
Standard
accounts receivable payment terms of 30 days to 60 days, with progress or
advance payments required for certain long-lead-time or large
orders. Payment terms are slightly longer in certain
international markets.
|
|
·
|
Standard
accounts payable payment terms of 30 days to 90
days.
|
|
·
|
Inventories
are maintained in sufficient quantities to meet forecasted
demand. Due to the time required to manufacture certain railway
track maintenance equipment to customer specifications, inventory levels
of this business tend to increase for an extended time during the
production phase and then decline when the equipment is
sold.
|
|
|
(1)
|
(vii)
|
One
customer, ArcelorMittal, represented approximately 10% of the Company’s
sales in 2009, 2008 and 2007. The Harsco Metals Segment is
dependent largely on the global steel industry, and in 2009, 2008 and 2007
there were two customers that each provided in excess of 10% of this
Segment’s revenues under multiple long-term contracts at numerous mill
sites. ArcelorMittal was one of those customers in 2009, 2008
and 2007. The loss of any one of the contracts would not have a
material adverse effect upon the Company’s financial position or cash
flows; however, it could have a significant effect on quarterly or annual
results of operations. Additionally, these customers have
significant accounts receivable balances. Further consolidation
in the global steel industry is possible. Should transactions
occur involving some of the Company’s larger steel industry customers, it
would result in an increase in concentration of revenues and credit risk
for the Company. If a large customer were to experience
financial difficulty, or file for bankruptcy protection, it could
adversely impact the Company’s income, cash flows and asset
valuations. As part of its credit risk management practices,
the Company closely monitors the credit standing and accounts receivable
position of its customer base.
|
|
|
(1)
|
(viii)
|
At
December 31, 2009, the Company’s metals services contracts had estimated
future revenues of $3.6 billion, compared with $4.1 billion as of December
31, 2008. The decline is primarily attributable to the revenues
recognized during 2009 offset by projected volume from new and renewed
contracts. At December 31, 2009, the Company’s railway track
maintenance services and equipment business had estimated future revenues
of $442.3 million, compared with $518.1 million as of December 31,
2008. This is primarily due to shipment of orders during 2009,
partially offset by new orders. The railway track maintenance
services and equipment business backlog includes a significant portion
that will not be
|
|
|
|
|
realized
until late 2010 and 2011 due to the long lead-time necessary to build
certain equipment, and the long-term nature of certain service
contracts. In addition, as of December 31, 2009, the Company
had an order backlog of $48.6 million in its All Other Category (Harsco
Minerals & Harsco Industrial). This compares with $121.6
million as of December 31, 2008. The decrease from December 31,
2008 is due principally to lower demand and completion of orders during
2009. Order backlog for scaffolding, shoring and forming
services; for roofing granules and slag abrasives; and for the reclamation
and recycling services of high-value content from steelmaking slag is
excluded from the above amounts. These amounts are generally
not quantifiable due to the short order lead times for certain services,
the nature and timing of the products and services provided and equipment
rentals with the ultimate length of the rental period
unknown.
As of December 31, 2009, approximately $252.9 million or
52% of the Company’s order backlog is not expected to be filled in
2010. The majority of this backlog is expected to be filled in
2011. This is exclusive of long-term metals industry services
contracts, infrastructure-related services, roofing granules and
industrial abrasives products, and minerals and metal recovery
technologies services.
|
|
|
(1)
|
(ix)
|
At
December 31, 2009, the Company had no material contracts that were subject
to renegotiation of profits or termination at the election of the U.S.
government.
|
|
|
(1)
|
(x)
|
The
Company encounters active competition in all of its activities from both
larger and smaller companies that produce the same or similar products or
services, or that produce different products appropriate for the same
uses.
|
|
|
(1)
|
(xi)
|
The
expense for product development activities was $3.2 million, $5.3 million
and $3.2 million in 2009, 2008 and 2007, respectively. For
additional information regarding product development activities, see the
Research and Development section included in Part II, Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations.”
|
|
|
(1)
|
(xii)
|
The
Company has become subject to, as have others, stringent air and water
quality control legislation. In general, the Company has not
experienced substantial difficulty complying with these environmental
regulations, and does not anticipate making any material capital
expenditures for environmental control facilities. While the
Company expects that environmental regulations may expand, and that its
expenditures for air and water quality control will continue, it cannot
predict the effect on its business of such expanded
regulations. For additional information regarding environmental
matters see Note 10, Commitments and Contingencies, to the Consolidated
Financial Statements included in Part II, Item 8, “Financial Statements
and Supplementary Data.”
|
|
|
(1)
|
(xiii)
|
As
of December 31, 2009, the Company had approximately 19,600
employees.
|
|
Item
1A.
|
Risk
Factors.
|
|
·
|
periodic
economic downturns in the countries in which the Company does
business;
|
|
·
|
fluctuations
in currency exchange rates;
|
|
·
|
imposition
of or increases in currency exchange controls and hard currency
shortages;
|
|
·
|
customs
matters and changes in trade policy or tariff
regulations;
|
|
·
|
changes
in regulatory requirements in the countries in which the Company does
business;
|
|
·
|
changes
in tax regulations, higher tax rates in certain jurisdictions and
potentially adverse tax consequences including restrictions on
repatriating earnings, adverse tax withholding requirements and “double
taxation”;
|
|
·
|
longer
payment cycles and difficulty in collecting accounts
receivable;
|
|
·
|
complexities
in complying with a variety of U.S. and international laws and
regulations;
|
|
·
|
political,
economic and social instability, civil unrest, terrorist actions and armed
hostilities in the regions or countries in which the Company does
business;
|
|
·
|
inflation
rates in the countries in which the Company does
business;
|
|
·
|
laws
in various international jurisdictions that limit the right and ability of
subsidiaries to pay dividends and remit earnings to affiliated companies
unless specified conditions are
met;
|
|
·
|
sovereign
risk related to foreign governments and the potential risks that include,
but may not be limited to, that those governments stop paying interest or
repudiate their debt, that they nationalize their private businesses or
that they alter their foreign-exchange regulations;
and‚
|
|
·
|
uncertainties
arising from local business practices, cultural considerations and
international political and trade tensions. The Company
operates in many parts of the world that have experienced governmental
corruption to some degree. Accordingly, in certain circumstances,
strict compliance with local laws and anti-bribery laws may conflict with
local customs and practices.
|
|
•
|
British
pound sterling
|
Weakened
by 17%
|
|
|
•
|
euro
|
Weakened
by 6%
|
|
|
•
|
South
African rand
|
Relatively
constant
|
|
|
•
|
Brazilian
real
|
Weakened
by 9%
|
|
|
•
|
Canadian
dollar
|
Weakened
by 7%
|
|
|
•
|
Australian
dollar
|
Weakened
by 7%
|
|
|
•
|
Polish
zloty
|
Weakened
by 30%
|
|
•
|
British
pound sterling
|
Strengthened
by 10%
|
|
|
•
|
euro
|
Strengthened
by 2%
|
|
|
•
|
South
African rand
|
Strengthened
by 21%
|
|
|
•
|
Brazilian
real
|
Strengthened
by 25%
|
|
|
•
|
Canadian
dollar
|
Strengthened
by 14%
|
|
|
•
|
Australian
dollar
|
Strengthened
by 21%
|
|
|
•
|
Polish
zloty
|
Strengthened
by 3%
|
|
·
|
The
Company’s Harsco Infrastructure Segment may be adversely impacted by
slowdowns in non-residential, multi-dwelling residential or infrastructure
construction and annual industrial and building maintenance
cycles;
|
|
·
|
The
Company’s Harsco Metals Segment may be adversely impacted by slowdowns in
steel mill production, excess capacity, consolidation or bankruptcy of
steel producers or a reversal or slowing of current outsourcing trends in
the steel industry;
|
|
·
|
The
Company’s Harsco Rail Segment may be adversely impacted by developments in
the railroad industry that lead to lower capital spending or reduced
maintenance spending;
|
|
·
|
The
reclamation recycling services business may be adversely impacted by
slowdowns in customer production or a reduction in the selling price of
its materials, which is market-based and varies based upon the current
fair value of the components being sold. Therefore, the revenue
amounts generated from the sale of such recycled materials vary based upon
the fair value of the commodity components being
sold;
|
|
·
|
The
roofing granules and abrasives business may be adversely impacted by
reduced home resales or economic conditions that slow the rate of
residential roof replacement, or by slowdowns in the industrial and
infrastructure refurbishment
industries;
|
|
·
|
The
industrial grating products business may be adversely impacted by
slowdowns in non-residential construction and industrial
production;
|
|
·
|
The
air-cooled heat exchangers business is affected by cyclical conditions
present in the natural gas industry. Therefore, a slowdown in
natural gas production could adversely affect this
business;
|
|
·
|
The
Company’s access to capital and the associated costs of borrowing may be
adversely impacted by the tightening of credit markets. Capital
constraints and increased borrowing costs may also adversely impact the
financial position and operations of the Company’s customers across all
business segments. Such customer capital constraints may result
in cancelled or postponed construction projects negatively affecting the
Harsco Infrastructure Segment.
|
|
·
|
The
Harsco Infrastructure Segment rents and sells equipment and provides
erection and dismantling services to principally the non-residential and
infrastructure construction and industrial plant maintenance
markets. Contracts are awarded based upon the Company’s engineering
capabilities, product availability and efficiency, safety
record,
|
|
|
and
the ability to competitively price its rentals and services. If the
Company is unable to consistently provide high-quality products and
services at competitive prices, it may lose customers or operating margins
may decline due to reduced selling
prices.
|
|
·
|
The
Harsco Metals Segment is sustained mainly through contract renewals.
Historically, the Company has a high contract renewal rate. If the
Company is unable to renew its contracts at the historical rates or
renewals are at reduced prices, revenue and operating profits may
decline. Additionally, the Company has been exiting certain
underperforming contracts in an effort to improve overall
profitability. The Company will continue to exit underperforming
contracts as considered necessary to achieving its strategic
initiatives.
|
|
·
|
The
Harsco Rail Segment and the Company’s manufacturing businesses compete
with companies that manufacture similar products both internationally and
domestically. Certain international competitors export their
products into the United States and sell them at lower prices due to lower
labor costs and government subsidies for exports. Such practices may
limit the prices the Company can charge for its products and
services. Additionally, unfavorable foreign exchange rates can
adversely impact the Company’s ability to match the prices charged by
international competitors. If the Company is unable to match the
prices charged by international competitors, it may lose
customers.
|
|
·
|
The
Harsco Metals Segment and, to a lesser extent, the Harsco Rail Segment and
the All Other Category have several large customers throughout the world
with significant accounts receivable balances. Consolidation in the
global steel industry has occurred in recent years and additional
consolidation is possible. Should additional transactions occur
involving some of the steel industry’s larger companies which are
customers of the Company, it would result in an increase in concentration
of credit risk for the Company. If a large customer were to
experience financial difficulty, or file for bankruptcy protection, it
could adversely impact the Company’s income, cash flows and asset
valuations. As part of its credit risk management practices,
the Company has developed strategies to mitigate, although not eliminate,
this increased concentration of credit
risk.
|
|
·
|
In
the Harsco Infrastructure Segment, concentrations of credit risk with
respect to accounts receivable are generally limited due to the Company’s
large number of customers and their dispersion across different
geographies. However, continued economic declines in particular
regions of the world could result in higher customer defaults and could
adversely impact the Company’s income, cash flows and asset
valuations. The Company has developed strategies to mitigate,
but not eliminate, this risk.
|
|
·
|
The
Company’s businesses may be negatively affected by contractual disputes
with customers and attempts by major customers to unilaterally change the
terms and pricing of certain contracts to their sole advantage without
adequate consideration to the
Company.
|
|
Item
1B.
|
Unresolved
Staff Comments.
|
|
Item
2.
|
Properties.
|
|
Location
|
Principal
Products
|
|
|
Harsco
Infrastructure Segment
|
||
|
Dosthill,
United Kingdom
|
Infrastructure
Services, Rentals and Sales
|
|
|
Trevoux,
France
|
Infrastructure
Services, Rentals and Sales
|
|
|
Arkel,
The Netherlands
|
Infrastructure
Services, Rentals and Sales
|
|
|
Lubna,
Poland
|
Infrastructure
Services, Rentals and Sales
|
|
|
Harsco
Rail Segment
|
||
|
Brendale,
Australia
|
Rail
Maintenance Equipment
|
|
|
Fairmont,
Minnesota
|
Rail
Maintenance Equipment
|
|
|
Ludington,
Michigan
|
Rail
Maintenance Equipment
|
|
|
West
Columbia, South Carolina
|
Rail
Maintenance Equipment
|
|
Location
|
Principal
Products
|
|
|
All
Other Category – Harsco Minerals
& Harsco Industrial
|
||
|
Drakesboro,
Kentucky
|
Roofing
Granules/Abrasives
|
|
|
Gary,
Indiana
|
Roofing
Granules/Abrasives
|
|
|
Channelview,
Texas
|
Industrial
Grating Products
|
|
|
Leeds,
Alabama
|
Industrial
Grating Products
|
|
|
Queretaro,
Mexico
|
Industrial
Grating Products
|
|
|
East
Stroudsburg, Pennsylvania
|
Heat
Transfer Products
|
|
|
Catoosa,
Oklahoma
|
Heat
Exchangers
|
|
|
Sarver,
Pennsylvania
|
Minerals
and Recycling Technologies
|
|
Location
|
Principal
Products
|
||
|
Harsco
Infrastructure Segment
|
|||
|
Ratingen,
Germany
|
Infrastructure
Services, Rentals and Sales
|
||
|
Berlin,
Germany
|
Infrastructure
Services, Rentals and Sales
|
||
|
Darmstadt,
Germany
|
Infrastructure
Services, Rentals and Sales
|
||
|
Mitry-Mory,
France
|
Infrastructure
Services, Rentals and Sales
|
||
|
Manchester,
United Kingdom
|
Infrastructure
Services, Rentals and Sales
|
||
|
Dubai,
United Arab Emirates
|
Infrastructure
Services, Rentals and Sales
|
||
|
Abu
Dhabi, United Arab Emirates
|
Infrastructure
Services, Rentals and Sales
|
||
|
Al
Khor, Qatar
|
Infrastructure
Services, Rentals and Sales
|
||
|
Pittsburgh,
Pennsylvania
|
Infrastructure
Services, Rentals and Sales
|
||
|
All
Other Category – Harsco Minerals & Harsco Industrial
|
|||
|
Fairless
Hills, Pennsylvania
|
Roofing
Granules/Abrasives
|
||
|
Tulsa,
Oklahoma
|
Industrial
Grating Products
|
||
|
Garrett,
Indiana
|
Industrial
Grating Products
|
||
|
Catoosa,
Oklahoma
|
Heat
Exchangers
|
||
|
Sapulpa,
Oklahoma
|
Heat
Exchangers
|
||
|
Sorel
– Tracy, Canada
|
Minerals
and Recycling Technologies
|
||
|
Timoteo,
Brazil
|
Minerals
and Recycling Technologies
|
||
|
Item
3.
|
Legal
Proceedings.
|
|
Item
4.
|
Submission
of Matters to a Vote of Security
Holders.
|
|
Name
|
Age
|
Principal Occupation or
Employment
|
|
Executive
Officers:
|
||
|
S.
D. Fazzolari
|
57
|
Chairman
and Chief Executive Officer of the Company since April 22,
2008. Chief Executive Officer of the Company since January 1,
2008. Served as President and Chief Financial Officer of the
Company from October 10, 2007 to December 31, 2007. Served as
President, Chief Financial Officer and Treasurer of the Company from
January 24, 2006 to October 9, 2007 and as a Director since January
2002. Served as Senior Vice President, Chief Financial Officer
and Treasurer from August 1999 to January 2006 and as Senior Vice
President and Chief Financial Officer from January 1998 to August
1999. Served as Vice President and Controller from January 1994
to December 1997 and as Controller from January 1993 to January
1994.
|
|
G.
D. H. Butler
|
63
|
President
of the Company and CEO of the Harsco Infrastructure business group since
January 1, 2008. Also served as CEO of the Harsco Metals
business group between January 1, 2008 and June 1, 2009. Served
as Senior Vice President-Operations of the Company from September 26, 2000
to December 31, 2007 and as a Director since January
2002. Concurrently served as President of the MultiServ and SGB
Group Divisions. From September 2000 through December 2003, he
was President of the Heckett MultiServ International and SGB Group
Divisions. Was President of the Heckett MultiServ-East Division
from July 1, 1994 to September 26, 2000. Served as Managing
Director-Eastern Region of the Heckett MultiServ Division in
1994. Served in various officer positions within MultiServ
International, N. V. prior to 1994 and prior to the Company’s acquisition
of that company in 1993.
|
|
M.
E. Kimmel
|
50
|
Senior
Vice President, Chief Administrative Officer, General Counsel and
Corporate Secretary since January 1, 2008. Served as General
Counsel and Corporate Secretary from January 1, 2004 to December 31,
2007. Served as Corporate Secretary and Assistant General
Counsel from May 1, 2003 to December 31, 2003. Held various
legal positions within the Company since he joined Harsco in August
2001. Prior to joining the Company, he was Vice President,
Administration and General Counsel, New World Pasta Company from January
1999 to July 2001. Before joining New World Pasta, Mr. Kimmel
spent approximately 12 years in various legal positions with Hershey Foods
Corporation.
|
|
S.
J. Schnoor
|
56
|
Senior
Vice President and Chief Financial Officer since January 1,
2008. Served as Vice President and Controller of the Company
from May 15, 1998 to December 31, 2007. Served as Vice
President and Controller of the Patent Construction Systems Division from
February 1996 to May 1998 and as Controller of the Patent Construction
Systems Division from January 1993 to February 1996. Previously
served in various auditing positions for the Company from 1988 to
1993. Prior to joining Harsco, he served in various auditing
positions for Coopers & Lybrand from September 1985 to
April 1988. Mr. Schnoor is a Certified Public
Accountant.
|
|
Name
|
Age
|
Principal Occupation or
Employment
|
|
G.
J. Claro
|
50
|
CEO
of the Company’s Harsco Metals and Harsco Minerals business groups since
September 1, 2009. Served as CEO of the Company’s Metals Group
since June 1, 2009. Prior to joining the Company, he was
CEO-Aleris Americas for Aleris International, a global leader in the
production of aluminum rolled and extruded products, recycled aluminum and
special alloys, from 2008 to 2009. Before joining Aleris
International, Mr. Claro served as President and CEO of the Heico Metals
Processing Group, a diversified conglomerate with operations in the U.S.,
Canada and Europe, between 2007 and 2008. Between 2005 and
2006, Mr. Claro served as Global Packaging Vice President of Operations
for Alcoa, Inc., overseeing manufacturing facilities and Products &
Brands Innovation Centers in the U.S., Latin America and
Europe.
|
|
R.
C. Neuffer
|
67
|
Harsco
Senior Vice President since January 1, 2008 and CEO for the Company’s
Harsco Rail Segment and Harsco Industrial Group since January 1,
2009. Served as CEO of the Company’s Minerals Group between
January 1, 2009 and September 1, 2009. Served as President of
the Minerals & Rail Group since his appointment on January 24,
2006. Previously, he led the Patterson-Kelley, IKG Industries
and Air-X-Changers units as Vice President and General Manager since
2004. In 2003, he was Vice President and General Manager of IKG
Industries and Patterson-Kelley. Between 1997 and 2002, he was
Vice President and General Manager of Patterson-Kelley. Mr.
Neuffer joined the Company in 1991.
|
|
R.
M. Wagner
|
42
|
Vice
President and Controller since January 1, 2008. Mr. Wagner
joined the Company in 2007 as Assistant Controller. Prior to
joining the Company, he held management responsibilities for financial
reporting at Bayer Corporation. He previously held a number of
financial management positions both in the United States and
internationally with Kennametal Inc., and also served as an audit manager
with Deloitte & Touche. Mr. Wagner is a Certified Public
Accountant.
|
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
|
|
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or
Programs
|
|
October
1, 2009 – October 31, 2009
|
-
|
-
|
-
|
2,000,000
|
|
November
1, 2009 – November 30, 2009
|
-
|
-
|
-
|
2,000,000
|
|
December
1, 2009 – December 31, 2009
|
-
|
-
|
-
|
2,000,000
|
|
Total
|
-
|
-
|
-
|
|
Item
6.
|
Selected
Financial Data.
|
|
(In
thousands, except per share, employee information and
percentages)
|
2009
(a)
|
2008
|
2007
(b)
|
2006
|
2005
(c)
|
|||||||||||||||
|
Income
Statement Information attributable to Harsco Corporation common
stockholders (d)
|
||||||||||||||||||||
|
Revenues
from continuing operations
|
$ | 2,990,577 | $ | 3,967,822 | $ | 3,688,160 | $ | 3,025,613 | $ | 2,396,009 | ||||||||||
|
Income
from continuing operations
|
133,838 | 245,623 | 255,115 | 186,402 | 144,488 | |||||||||||||||
|
Income
(loss) from discontinued operations
|
(15,061 | ) | (4,678 | ) | 44,377 | 9,996 | 12,169 | |||||||||||||
|
Net
income attributable to Harsco Corporation
|
118,777 | 240,945 | 299,492 | 196,398 | 156,657 | |||||||||||||||
|
Financial
Position and Cash Flow Information
|
||||||||||||||||||||
|
Working
capital
|
$ | 418,237 | $ | 317,062 | $ | 471,367 | $ | 320,847 | $ | 352,620 | ||||||||||
|
Total
assets
|
3,639,240 | 3,562,970 | 3,905,430 | 3,326,423 | 2,975,804 | |||||||||||||||
|
Long-term
debt
|
901,734 | 891,817 | 1,012,087 | 864,817 | 905,859 | |||||||||||||||
|
Total
debt
|
984,927 | 1,012,883 | 1,080,794 | 1,063,021 | 1,009,888 | |||||||||||||||
|
Depreciation
and amortization (including discontinued operations)
|
311,531 | 337,949 | 306,413 | 252,982 | 198,065 | |||||||||||||||
|
Capital
expenditures
|
165,320 | 457,617 | 443,583 | 340,173 | 290,239 | |||||||||||||||
|
Cash
provided by operating activities
|
434,458 | 574,276 | 471,740 | 409,239 | 315,279 | |||||||||||||||
|
Cash
used by investing activities
|
(269,360 | ) | (443,418 | ) | (386,125 | ) | (359,455 | ) | (645,185 | ) | ||||||||||
|
Cash
provided (used) by financing activities
|
(164,083 | ) | (155,539 | ) | (77,687 | ) | (84,196 | ) | 369,325 | |||||||||||
|
Ratios
|
||||||||||||||||||||
|
Return
on sales (e)
|
4.5 | % | 6.2 | % | 6.9 | % | 6.2 | % | 6.0 | % | ||||||||||
|
Return
on average equity (f) (g)
|
9.1 | % | 14.6 | % | 18.9 | % | 16.4 | % | 14.9 | % | ||||||||||
|
Current
ratio
|
1.6:1
|
1.4:1
|
1.5:1
|
1.4:1
|
1.5:1
|
|||||||||||||||
|
Total
debt to total capital (g) (h)
|
39.5 | % | 41.1 | % | 40.3 | % | 47.4 | % | 49.6 | % | ||||||||||
|
Per
Share Information attributable to Harsco Corporation common stockholders
(i)
|
||||||||||||||||||||
|
Basic-
Income from continuing operations
|
$ | 1.67 | $ | 2.94 | $ | 3.03 | $ | 2.22 | $ | 1.73 | ||||||||||
|
- Income from discontinued
operations
|
(0.19 | ) | (0.06 | ) | 0.53 | 0.12 | 0.15 | |||||||||||||
|
- Net income
|
$ | 1.48 | $ | 2.88 | $ | 3.56 | $ | 2.34 | $ | 1.88 | ||||||||||
|
Diluted-
Income from continuing operations
|
$ | 1.66 | $ | 2.92 | $ | 3.01 | $ | 2.21 | $ | 1.72 | ||||||||||
|
- Income from discontinued
operations
|
(0.19 | ) | (0.06 | ) | 0.52 | 0.12 | 0.14 | |||||||||||||
|
- Net income
|
$ | 1.47 | $ | 2.87 | (j) | $ | 3.53 | $ | 2.33 | $ | 1.86 | |||||||||
|
Book
value (g)
|
$ | 18.79 | $ | 18.09 | $ | 18.99 | $ | 14.01 | $ | 12.30 | ||||||||||
|
Cash
dividends declared per share
|
$ | 0.805 | $ | 0.78 | $ | 0.7275 | $ | 0.665 | $ | 0.6125 | ||||||||||
|
Other
Information
|
||||||||||||||||||||
|
Diluted
average number of shares outstanding (i)
|
80,586 | 84,029 | 84,724 | 84,430 | 84,161 | |||||||||||||||
|
Number
of employees
|
19,600 | 21,500 | 21,500 | 21,500 | 21,000 | |||||||||||||||
|
Backlog
from continuing operations (k)
|
$ | 490,863 | $ | 639,693 | $ | 448,054 | $ | 236,460 | $ | 230,584 | ||||||||||
|
(a)
|
Includes
ESCO Interamerica, Ltd. acquired November 10, 2009 (Harsco
Infrastructure).
|
|
(b)
|
Includes
Excell Minerals acquired February 1, 2007 (All Other
Category-HarscoMinerals & Harsco
Industrial).
|
|
(c)
|
Includes
the Northern Hemisphere mill services operations of Brambles Industrial
Services (BISNH) acquired December 29, 2005 (Harsco Metals) and Hünnebeck
Group GmbH acquired November 21, 2005 (Harsco
Infrastructure).
|
|
(d)
|
2006
and 2005 income statement information is reclassified to reflect the Gas
Technologies Segment as Discontinued Operations. This Segment was
disposed on December 7, 2007.
|
|
(e)
|
“Return
on sales” is calculated by dividing income from continuing operations by
revenues from continuing
operations.
|
|
(f)
|
“Return
on average equity” is calculated by dividing income from continuing
operations by average equity throughout the
year.
|
|
(g)
|
2005
through 2008 have been restated in order to include noncontrolling
interests, previously referred to as minority interests, as a component of
equity in accordance with the changes to consolidation accounting and
reporting issued by the Financial Accounting Standards Board January 1,
2009.
|
|
(h)
|
“Total
debt to total capital” is calculated by dividing the sum of debt
(short-term borrowings and long-term debt including current maturities) by
the sum of equity and debt.
|
|
(i)
|
2006
and 2005 per share information is restated to reflect the 2-for-1 stock
split effective in the first quarter of
2007.
|
|
(j)
|
Does
not total due to rounding.
|
|
(k)
|
Excludes
the estimated amount of long-term mill service contracts, which had
estimated future revenues of $3.6 billion at December 31, 2009 and $4.1
billion at December 31, 2008. Also excludes backlog of the Harsco
Infrastructure Segment and the roofing granules and industrial abrasives
business. These amounts are generally not quantifiable due to the
nature and timing of the products and services
provided.
|
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
|
·
|
Unprecedented
low steel production throughout the
world;
|
|
·
|
A
lack of available credit to certain customers that caused commercial and
multi-family construction contracts to be cancelled or
postponed;
|
|
·
|
An
overall stronger U.S. dollar during 2009 compared with 2008;
and
|
|
·
|
Pricing
pressure across all businesses as customers sought to control costs during
the recession and increased competition for the remaining
projects.
|
|
·
|
Redeployment
of its mobile asset base in the Harsco Infrastructure and Harsco Metals
Segments to focus on market segments that remain strong and provide growth
opportunities, such as the relocation of
infrastructure
|
|
|
rental
assets from the United Kingdom and Ireland to the Gulf Region of the
Middle East and Asia-Pacific, and to markets served by recent acquisitions
in Latin America; this helped enable a substantial reduction in capital
spending;
|
|
·
|
Reduction
in the global workforce of approximately 20% since September 2008 and
substantial reductions in discretionary
spending;
|
|
·
|
Continued
expansion of the Company’s Continuous Improvement
initiatives;
|
|
·
|
Substantial
reductions in capital spending resulting in record discretionary cash
flows;
|
|
·
|
Strengthening
certain key positions in the global leadership team with new
personnel;
|
|
·
|
Implementation
of supply chain optimization initiatives;
and
|
|
·
|
Implementation
of countermeasures to improve efficiency and remove unnecessary
costs.
|
|
Revenues
by Region
|
|||||||||||||||||||||||||||||
|
Total
Revenues
Twelve
Months Ended December 31
|
Percentage
Growth From
2008
to 2009
|
||||||||||||||||||||||||||||
|
(Dollars
in millions)
|
2009
|
Percent
|
2008
|
Percent
|
Volume
|
Currency
|
Total
|
||||||||||||||||||||||
|
Western
Europe
|
$ | 1,268.5 | 42 | % | $ | 1,770.8 | 45 | % | (18.4 | %) | (10.0 | %) | (28.4 | %) | |||||||||||||||
|
North
America
|
1,062.6 | 35 | 1,370.0 | 35 | (21.8 | ) | (0.6 | ) | (22.4 | ) | |||||||||||||||||||
|
Middle
East and Africa
|
228.7 | 8 | 257.5 | 6 | (10.8 | ) | (0.4 | ) | (11.2 | ) | |||||||||||||||||||
|
Latin
America (a)
|
197.0 | 7 | 253.7 | 6 | (12.5 | ) | (9.9 | ) | (22.4 | ) | |||||||||||||||||||
|
Eastern
Europe
|
120.0 | 4 | 189.0 | 5 | (19.1 | ) | (17.4 | ) | (36.5 | ) | |||||||||||||||||||
|
Asia-Pacific
|
113.8 | 4 | 126.8 | 3 | (2.3 | ) | (7.9 | ) | (10.2 | ) | |||||||||||||||||||
|
Total
|
$ | 2,990.6 | 100 | % | $ | 3,967.8 | 100 | % | (18.2 | %) | (6.4 | %) | (24.6 | %) | |||||||||||||||
|
(a)
|
Includes
Mexico
|
|
·
|
Revenues
and operating income were impacted by the global recession
as:
|
|
o
|
The
average value of the U.S. dollar increased significantly from 2008 to
2009, accounting for 26% of the sales decline and 16% of the decline in
operating income;
|
|
o
|
Global
steel production, which began to decline in the latter part of 2008,
remained at unprecedented low levels in 2009;
and
|
|
o
|
Restrictive
lending and credit practices continued to adversely affect non-residential
construction projects worldwide; this was coupled with pricing pressure as
customers sought price breaks and competitors pursued the limited number
of available projects.
|
|
·
|
During
2009, the Company’s operating income benefited from the restructuring
actions implemented in the fourth quarter of 2008. Operational
improvements were also recognized as a result of additional
countermeasures implemented throughout 2009 targeting expense reduction,
revenue enhancement and asset optimization. Cost savings from
the combination of the 2008 and 2009 countermeasures should manifest
themselves throughout 2010 and beyond with significant annualized
benefits.
|
|
·
|
Due
to strong operating cash flows and controlled capital spending, the
Company repaid debt of $84.3 million in 2009. Balance sheet
debt declined by a lower $28.0 million in the same period due to foreign
currency translation.
|
|
·
|
Cash
flow from operations for 2009 was $434.5 million. This was more
than sufficient to fund the cash requirements for investing activities of
$269.4 million while also providing excess funds to reduce
debt.
|
|
(Dollars
in millions)
|
2009
|
2008
|
|||||||
|
Revenues
|
$ | 1,159.2 | $ | 1,540.3 | |||||
|
Operating
income
|
68.4 | 185.4 | |||||||
|
Operating
margin percent
|
5.9 | % | 12.0 | % | |||||
|
Harsco Infrastructure Segment –
Significant Effects on Revenues:
|
(In
millions)
|
||||
|
Revenues
– 2008
|
$ | 1,540.3 | |||
|
Net
decreased volume
|
(277.9 | ) | |||
|
Impact
of foreign currency translation
|
(113.1 | ) | |||
|
Acquisitions
|
9.9 | ||||
|
Revenues
– 2009
|
$ | 1,159.2 | |||
|
·
|
In
2009, the Segment’s operating results decreased due to reduced
non-residential, commercial and infrastructure construction spending,
particularly in the United Kingdom, North America and several other key
European countries. This was partially offset by continued
strength in emerging economies in the Gulf Region of the Middle East and
Asia-Pacific regions, as well as the global industrial maintenance
sector. The Company has benefited from its capital investments
made in these markets in prior years and its ability to redeploy equipment
throughout the world.
|
|
·
|
In
response to further deterioration of global infrastructure markets during
2009, this Segment implemented additional countermeasures targeting
expense reduction, asset optimization and facility
rationalization.
|
|
·
|
Foreign
currency translation in 2009 decreased operating income for this Segment
by $14.2 million compared with
2008.
|
|
(Dollars
in millions)
|
2009
|
2008
|
|||||||
|
Revenues
|
$ | 1,084.8 | $ | 1,577.7 | |||||
|
Operating
income
|
15.9 | 85.3 | |||||||
|
Operating
margin percent
|
1.5 | % | 5.4 | % | |||||
|
Harsco Metals Segment –
Significant Effects on Revenues:
|
(In
millions)
|
||||
|
Revenues
– 2008
|
$ | 1,577.7 | |||
|
Net
decreased volume
|
(356.1 | ) | |||
|
Impact
of foreign currency translation
|
(126.5 | ) | |||
|
Adjustments
and other charges
|
(10.3 | ) | |||
|
Revenues
– 2009
|
$ | 1,084.8 | |||
|
·
|
Revenues,
operating income and margins for 2009 were negatively impacted by
unprecedented declines in global steel production and the stronger U.S.
dollar in 2009 compared with 2008. Liquid steel tons produced
by customers were reduced by approximately 30% compared with
2008.
|
|
·
|
During
2009, this Segment’s operating income benefited from the restructuring
actions implemented in the fourth quarter of 2008. Operating
results also benefited from additional countermeasures implemented during
2009 targeting expense reduction, revenue enhancement and asset
optimization.
|
|
·
|
A
reversal of revenue improperly recognized over the prior three years
resulted in an operating income decrease that was recorded in the third
quarter of 2009. The improperly recorded revenue related to the
failure to receive advance customer agreement and to invoice on a timely
basis for additional work performed for two customers. This
matter was isolated to a business unit in one country and is considered a
one-time event.
|
|
·
|
Foreign
currency translation in 2009 decreased operating income for this Segment
by $16.4 million compared with
2008.
|
|
(Dollars
in millions)
|
2009
|
2008
|
|||||||
|
Revenues
|
$ | 306.0 | $ | 277.6 | |||||
|
Operating
income
|
56.5 | 36.4 | |||||||
|
Operating
margin percent
|
18.5 | % | 13.1 | % | |||||
|
Harsco Rail Segment – Significant
Effects on Revenues:
|
(In
millions)
|
||||
|
Revenues
– 2008
|
$ | 277.6 | |||
|
Net
increased volume
|
35.6 | ||||
|
Impact
of foreign currency translation
|
(7.2 | ) | |||
|
Revenues
– 2009
|
$ | 306.0 | |||
|
·
|
This
Segment’s operating income increased for 2009 due in part to shipments of
equipment to China under contracts with the China Ministry of Railways,
partially offset by lower spare parts
sales.
|
|
·
|
During
2009, this Segment’s operating income and margins also benefited from
ongoing Continuous Improvement
initiatives.
|
|
·
|
Foreign
currency translation in 2009 reduced operating income for this Segment by
$1.3 million compared with 2008.
|
|
(Dollars
in millions)
|
2009
|
2008
|
|||||||
|
Revenues
|
$ | 440.3 | $ | 572.0 | |||||
|
Operating
income
|
82.5 | 114.5 | |||||||
|
Operating
margin percent
|
18.7 | % | 20.0 | % | |||||
|
All
Other Category – Harsco Minerals & Harsco Industrial –
Significant Effects on
Revenues:
|
(In
millions)
|
||||
|
Revenues
– 2008
|
$ | 572.0 | |||
|
Industrial
grating products
|
(51.7 | ) | |||
|
Air-cooled
heat exchangers
|
(45.1 | ) | |||
|
Reclamation
and recycling services
|
(19.8 | ) | |||
|
Impact
of foreign currency translation
|
(7.9 | ) | |||
|
Roofing
granules and abrasives
|
(5.9 | ) | |||
|
Heat
transfer equipment
|
(1.3 | ) | |||
|
Revenues
– 2009
|
$ | 440.3 | |||
|
·
|
The
economic downturn and customer decreases in inventory levels compared with
2008 contributed to a reduction in operating income for the industrial
grating products business.
|
|
·
|
The
air-cooled heat exchangers business experienced a modest increase in
operating income in 2009 as declines in operating income due to sales
volume decreases were offset by lower commodity costs and benefits from
Continuous Improvement actions.
|
|
·
|
Operating
income for the minerals business decreased in 2009 due to significantly
lower metal prices and product mix.
|
|
·
|
Countermeasures
targeting expense reduction, revenue enhancement and asset optimization
were implemented in these businesses and partially offset the declines in
operating income.
|
|
·
|
Foreign
currency translation in 2009 decreased operating income for the All Other
Category by $1.4 million compared with
2008.
|
|
·
|
The
Company expects continued strong cash flows from operating
activities. The Company also expects to maintain discipline to
limit capital expenditures through its ability to redeploy equipment to
new projects, without jeopardizing the productivity of the
equipment. The Company believes that in the current economic
environment, the mobile nature of its capital investment pool will
facilitate strategic growth initiatives in the near term, lessening the
need for growth capital expenditures for
2010.
|
|
·
|
Management
will continue to be very selective and disciplined in allocating capital,
choosing projects with the highest Economic Value Added (“EVA®”)
potential.
|
|
·
|
The
Company will continue to develop and implement countermeasures, as it has
on an ongoing basis since the fourth quarter of 2008, to further compress
underlying administration and operating costs to match the current
economic environment and lower its break-even point without sacrificing
quality of output.
|
|
·
|
Continued
implementation of the Company’s enterprise-wide Continuous Improvement
program is expected to provide long-term benefits and enhance the overall
performance of the Company through increased efficiency and a reduced cost
structure.
|
|
·
|
The
Company announced in January 2010 that it has embarked upon a business
transformation initiative designed to create significant operating and
cost efficiencies by improving the Company’s internal supply chain
planning, logistics, scheduling and integration throughout its worldwide
operations. This project is expected to contribute to the
Company’s EVA growth but could result in near-term, cost increases and
capital expenditures.
|
|
·
|
The
Company will continue to place a strong focus on corporate-wide expansion
into emerging economies to grow and better balance its geographic
footprint. More specifically, the Company’s global growth strategies
include steady, targeted expansion, particularly in the Gulf Region of the
Middle East and Africa, Asia-Pacific and Latin America to further
complement the Company’s already-strong presence throughout Europe and
North America. Growth is expected to be achieved through the
provision of additional services to existing customers, new contracts in
both developed and emerging markets, and targeted, strategic, bolt-on
acquisitions in strategic countries and market
sectors. Additionally, new higher-margin service and sales
opportunities in the minerals and rail businesses will be pursued
globally. This strategy is expected to develop a significant
increase to the Company’s presence in these markets to achieve
approximately 30% of total Company revenues from emerging markets over the
next several years and closer to 40% in the longer-term. Over
time, the improved geographic footprint will also benefit the Company
through further diversification of its customer
base.
|
|
·
|
Fluctuations
in the U.S. dollar can have significant impacts in the Harsco
Infrastructure and Harsco Metals Segments, as approximately 80% to 85% of
the revenues generated in these businesses are outside the United
States. If the U.S. dollar would strengthen, as it did overall
from 2008 to 2009, sales and operating income would generally be
reduced. If the U.S. dollar were to weaken, sales and operating
income would generally improve.
|
|
·
|
Governments
around the world have enacted stimulus packages to promote much-needed
infrastructure projects. Any substantial near-term benefit from
stimulus packages is uncertain, particularly in the United States and the
United Kingdom. When stimulus package funding becomes available
for infrastructure projects, which has been limited thus far, the Harsco
Infrastructure and the Harsco Rail Segments are well positioned with their
engineering expertise and the Company’s capital investment base to take
advantage of any expected opportunities. The Harsco Minerals
business should also benefit from increased demand for its abrasive
products as required by refurbishment stimulus
projects.
|
|
·
|
Steel
production in 2010 is expected to increase over levels in 2009,
benefitting the Harsco Metals
Segment.
|
|
·
|
Volatility
in energy and commodity costs (e.g., crude oil, natural gas, steel, etc.)
and worldwide demand for these commodities could impact the Company’s
operations. Cost increases could result in reduced operating
income for certain products and services, to the extent that such costs
cannot be passed to customers. Cost decreases could result in
increased operating income to the extent that such cost savings do not
need to be passed on to customers. However, volatility in
energy and commodity costs may provide additional service opportunities
for the Harsco Metals Segment and several businesses in the All Other
Category as customers may outsource more services to reduce overall
costs. Volatility may also provide opportunities in the Harsco
Infrastructure Segment for additional industrial plant maintenance and
capital improvement projects. In addition to embracing
opportunities for revenue enhancement, the Company seeks to mitigate these
costs as part of its ongoing enterprise-wide optimization
initiatives.
|
|
·
|
Total
defined benefit net periodic pension expense for 2010 is expected to be
approximately $21 million, slightly higher than 2009. The
increased expense is due to a lower discount rate at December 31, 2009,
partially offset by higher than expected returns on plan assets in
2009. These two factors are the primary drivers of the
Company’s defined benefit net periodic pension expense as future service
is no longer a factor in substantially all of the Company’s significant
defined benefit plans.
|
|
·
|
The
Company has maintained a capital structure with a balance sheet debt to
capital ratio approximating 40% for the last several years. In
October 2010, the Company’s 200 million British pound sterling-denominated
notes (approximately $323 million at December 31, 2009) will
mature. The Company expects to refinance these notes during
2010 through public debt, commercial paper borrowings or its revolving
credit facilities.
|
|
·
|
As
the Company has continued the strategic expansion of its global footprint,
it has lowered its effective income tax rate. The reduction reflects
earnings in jurisdictions with lower tax rates coupled with the deferral
of profits generated internationally. The effective income tax
rate for 2010, before discrete items, is currently expected to be
approximately 24% to 26%.
|
|
·
|
Currently,
a majority of the Company’s revenue is generated from customers located
outside the United States, and a substantial portion of the Company’s
assets and employees are located outside the United States. U.S.
income tax and foreign withholding taxes have not been provided on
undistributed earnings for certain non-U.S. subsidiaries, because such
earnings are intended to be indefinitely reinvested in the operations of
those subsidiaries. Several U.S. legislation proposals have been
announced that would substantially reduce (or have the effect of
substantially reducing) the Company’s ability to defer U.S. taxes on
profit permanently reinvested outside the United States. Proposals
to date could have a negative impact on the Company’s financial position
and operating results. Additionally, they could have a negative
impact on the Company’s ability to compete in the global marketplace.
The probability of any of these proposals being enacted cannot be
predicted with any certainty. Indications are that reform in 2010 is
still likely, but such reform may be structured with more of
the
|
|
|
|
|
|
business
community’s concerns in mind. Nonetheless, the Company is working
with legislators with the goal of achieving a balanced and fair approach
to tax reform. The Company continues to monitor legislation to be in
position to structure operations in a manner that will reduce the impact
of enacted changes.
|
|
·
|
The
Company’s Harsco Minerals business generates value by capturing and
processing boiler slag, which is a coal combustion
by-product. The EPA is considering increased regulation of the
management of coal combustion by-products. Such requirement
could affect the Harsco Minerals business. The Company is
confident at this time, based upon EPA confirmation in the year 2000 and
again in 2009, that there is no change in science that requires increased
regulation of boiler slag. Additionally, the Company believes
no scientific data exists to support reclassification of boiler
slag.
|
|
·
|
The
near-term outlook for the Harsco Infrastructure Segment is impacted by
continued uncertainty in global credit markets, which has caused
construction projects to be deferred or cancelled, thus contributing to
pricing pressure. The current lack of activity in
non-residential, commercial construction markets, particularly in the
United Kingdom, Ireland, other parts of Europe and the United States,
coupled with harsh winter weather conditions across many parts of Europe
and the United States, are expected to present very challenging business
conditions in the first half of 2010, particularly in the first
quarter. As a result, the Company expects an operating loss for
the quarter ending March 31, 2010.
|
|
·
|
The
Company has initiated a transformational strategy in the Harsco
Infrastructure Segment that includes the
following:
|
|
o
|
Effective
in January 2010, all operations within this Segment have been rebranded as
Harsco Infrastructure. Previously, the Harsco Infrastructure
Segment utilized three brand names (SGB Group, Hünnebeck Group and Patent
Construction Systems).
|
|
o
|
The
costs and viability of the existing branch structure will continue to be
scrutinized with a targeted goal of reducing the number of branches by 25%
from the 2008 number, exclusive of recent
acquisitions.
|
|
o
|
A
global supply chain optimization plan is being developed to identify
initiatives that, when implemented should generate considerable operating
and cost efficiencies.
|
|
o
|
The
productivity of branches will be improved through the continued use of the
Company’s Continuous Improvement program and implementation of best
practices across the network of
branches.
|
|
o
|
Additional
countermeasures to adjust administration and operating costs to match the
economic environment and to lower the Segment’s cost structure are being
implemented. To assist in accelerating these initiatives, the
Company expects to incur approximately $8 million to $10 million in
restructuring costs during the first quarter of
2010.
|
|
o
|
The
Company has initiated strategies to reposition the business, focusing
increasingly on projects in the global industrial maintenance and
infrastructure construction sectors. In 2009, approximately 40%
of the Segment’s business was in the commercial and multi-family sector,
which has been impacted the most by tightened credit restrictions and the
global economic downturn. The remainder of current business was
spread approximately 30% each to the industrial maintenance and the
infrastructure sectors. Over the next few years, the Company is
targeting an allocation of approximately 40% each in the industrial
maintenance and infrastructure sectors, with 20% in the commercial and
multi-family sector. Industrial maintenance contracts generally
are long-term contracts with sustainable revenue streams serving the oil
and gas, pharmaceutical, chemical, electric utility power plant and steel
industries. Infrastructure contracts also tend to be
longer-term contracts with “blue-chip” contractors and include
government-sponsored projects from stimulus
programs.
|
|
·
|
The
Company will continue to emphasize prudent expansion of its geographic
presence in this Segment through entering new markets and through further
expansion in emerging economies, with a focus on China, India and Latin
America. The Harsco Infrastructure Segment’s value-added
services and engineered forming, shoring and scaffolding systems, combined
with its mobile capital investment base, will continue to be leveraged to
grow the business as expansion opportunities
occur.
|
|
·
|
In
2010, the Company will fully integrate its recent acquisitions: ESCO, a
regional leader in infrastructure services in seven countries in Central
and South America, and Bell Scaffolding Group, with operations across the
eastern seaboard of Australia. ESCO is expected to provide an
opportunity for the Company to scale its operations across the Latin
American region, while Bell Scaffolding provides opportunities for further
growth throughout Australia and other neighboring
regions.
|
|
·
|
Further
declines in the economy and, more specifically, the construction industry
may impact the ability of customers to meet their obligations to the
Company on a timely basis and could adversely impact the realizability of
receivables, particularly if customers file for bankruptcy protection or
receivership.
|
|
·
|
Steel
industry expectations are that steel production will increase in 2010
compared with 2009, but not to the levels of the first half of 2008, prior
to the beginning of the global recession. Consistent with the
industry overall, the Harsco Metals Segment’s customers increased their
production in the last half of 2009, and those production levels are
expected to increase modestly throughout
2010.
|
|
·
|
The
Company expects that customer production growth in 2010 can be
accommodated with minimal headcount additions and limited capital spending
by continued adherence to the Company’s Continuous Improvement program and
prudent redeployment of labor and
capital.
|
|
·
|
Benefits
from the Company’s 2008 restructuring program and additional
countermeasures implemented in 2009 should continue to improve the
operational efficiency and enhance profitability of the Harsco Metals
Segment in 2010 and beyond. Additional countermeasures will be
undertaken in 2010 to continue to lower the cost base of this
Segment. Restructuring and countermeasure initiatives to date
have included: improved terms or exit from underperforming contracts with
customers and underperforming operations; defined benefit pension plan
design changes; overall reduction in the global workforce; and a
substantial reduction in discretionary
spending.
|
|
·
|
The
Company anticipates that tightening environmental regulations will compel
customers to address their production waste streams as an opportunity to
maximize environmental compliance. This should provide
additional revenue opportunities for the Company. The Harsco
Metals Segment’s 2009 award of a $50 million, multi-year contract to clean
up 3 million cubic yards of material left behind at an abandoned
steelworks may be seen as a model for similar sites by the U.S.
Environmental Protection Agency. The Company will continue to
pursue growth opportunities in environmental services as awareness of
environmental issues creates additional outsourced functions in slag
management.
|
|
·
|
As
the steel manufacturing footprint moves towards developing countries, the
Company will continue to execute a geographic expansion strategy in
emerging markets in the Gulf Region of the Middle East and Africa, Latin
America and Asia-Pacific.
|
|
·
|
Further
consolidation in the global steel industry is possible. Should
additional consolidations occur involving some of the steel industry’s
larger companies that are customers of the Company, it could result in an
increase in concentration of revenues and credit risk for the
Company. If a large customer were to experience financial
difficulty, or file for bankruptcy protection, it could adversely impact
the Company’s income, cash flows and asset valuations. As part
of its credit risk management practices, the Company closely monitors the
credit standing and accounts receivable position of its customer
base. Further consolidation may also increase pricing pressure
on the Company and the competitive risk of services contracts that are due
for renewal. Conversely, such consolidation may provide
additional service opportunities for the Company as the Company believes
it is well-positioned competitively. As a result of this
customer concentration, a key strategy of the Company is to diversify its
customer base and expand to emerging market
customers.
|
|
·
|
The
Harsco Rail Segment has a strong backlog for 2010 due principally to
ongoing production of rail grinding machines for the China Ministry of
Railways. The contract will generate revenues through
2011.
|
|
·
|
Further
implementation of the Company’s Continuous Improvement initiatives are
expected to improve margins on a long-term
basis.
|
|
·
|
U.S.
and global customers are investing heavily in rebuilding their physical
assets. Although reduced freight revenues experienced by a
customer may involve a cut in track maintenance budgets, improved margins
can be realized due to extended work windows as increased track time is
available for maintenance activity. U.S. railway track
maintenance service opportunities are expected to increase over the
mid-term as many states have budget proposals for track services under the
U.S. stimulus package. New construction of high-speed rail
systems is also expected to be financed with government funds over the
near and long term.
|
|
·
|
International
demand for railway track maintenance services, solutions and equipment is
expected to be strong in both the near term and the long
term. The Harsco Rail Segment expects to develop a larger
presence in certain developing countries as track maintenance and
construction needs grow. Global bidding activity has been
strong.
|
|
·
|
This
Segment will continue to pursue cost-reduction initiatives to reduce its
overall cost base. These initiatives could result in near-term
capital expenditures and restructuring
costs.
|
|
·
|
The
Company will emphasize prudent global expansion of its minerals business
for extracting high-value metallic content from slag and responsibly
handling and recycling residual materials. Environmental
services provide growth opportunities in the minerals business as
additional outsourced functions in slag management of stainless steel and
other high-value metals arise.
|
|
·
|
Improved
customer production levels should have an overall positive effect on
certain reclamation and recycling services in the
near-term. Metal prices remained relatively flat in the latter
part of 2009; however, any increases would have a positive effect on
operating results, while decreases would have a negative
impact.
|
|
·
|
Certain
businesses in this Category are dependent on a small group of key
customers. The loss of one of these customers due to
competition or due to financial difficulty, or the filing for bankruptcy
protection, could adversely impact the Company’s income, cash flows and
asset valuations. As part of its credit risk management
practices, the Company closely monitors the credit standing and accounts
receivable position of its customer
base.
|
|
·
|
Worldwide
supply and demand for steel and other commodities impact raw material
costs for certain businesses in this Category. The Company has
implemented strategies to help mitigate the potential impact that changes
in steel and other commodity prices could have on operating
income. If steel or other commodity costs associated with the
Company’s manufactured products increase and the costs cannot be passed on
to the Company’s customers, operating income would be adversely
affected. Conversely, reduced steel and other commodity costs
would improve operating income to the extent such savings do not have to
be transferred to customers.
|
|
·
|
The
air-cooled heat exchangers business continues to explore international
opportunities in addition to further growth in its customary North
American markets. Overall sales are expected to be negatively
impacted by a lower level of industrial demand for natural gas as a result
of lower natural gas prices and the global recession. Low
natural gas prices throughout 2009 curtailed the need for additional gas
compression and coolers to support that compression. Increased
industrial use due to improving economic conditions, as well as weather
patterns over the winter months, will influence the price and demand for
natural gas and, consequently, the demand for heat exchanger
equipment. Colder weather tends to increase demand for heat
exchanger equipment while warmer weather tends to result in reduced
demand.
|
|
(Dollars
are in millions, except per share information and
percentages)
|
2009
|
2008
|
2007
|
||||||||||
|
Revenues
from continuing operations
|
$ | 2,990.6 | $ | 3,967.8 | $ | 3,688.2 | |||||||
|
Cost
of services and products sold
|
2,252.1 | 2,926.4 | 2,685.5 | ||||||||||
|
Selling,
general and administrative expenses
|
509.1 | 602.2 | 538.2 | ||||||||||
|
Other
expenses
|
7.6 | 22.0 | 3.4 | ||||||||||
|
Operating
income from continuing operations
|
218.7 | 412.0 | 457.8 | ||||||||||
|
Interest
expense
|
62.7 | 73.2 | 81.4 | ||||||||||
|
Income
tax expense from continuing operations
|
18.5 | 91.8 | 117.6 | ||||||||||
|
Income
from continuing operations (a)
|
140.8 | 251.5 | 264.8 | ||||||||||
|
Income
(loss) from discontinued operations
|
(15.1 | ) | (4.7 | ) | 44.4 | ||||||||
|
Net
income attributable to Harsco Corporation
|
118.8 | 240.9 | 299.5 | ||||||||||
|
Diluted
earnings per common share from continuing operations attributable to
Harsco Corporation common stockholders
|
1.66 | 2.92 | 3.01 | ||||||||||
|
Effective
income tax rate for continuing operations
|
11.6 | % | 26.7 | % | 30.7 | % | |||||||
|
(a)
|
On
January 1, 2009, the Company adopted changes issued by the Financial
Accounting Standards Board related to consolidation accounting and
reporting. These changes, among others, require that minority
interests be renamed noncontrolling interests and that a company present a
consolidated net income measure that includes the amount attributable to
such noncontrolling interests for all periods presented. Results for
2008 and 2007 have been reclassified
accordingly.
|
|
(In
millions)
|
Change
in Revenues 2009 vs. 2008
|
|
|
$(356.1)
|
Net
decreased volume due principally to the deterioration of the global steel
markets in the Harsco Metals Segment.
|
|
|
(277.9)
|
Net
decreased revenues in the Harsco Infrastructure Segment due to lower sales
and rentals, principally due to lower construction activity globally as a
result of economic decline.
|
|
|
(254.7)
|
Effect
of foreign currency translation.
|
|
|
(51.7)
|
Reduced
demand for industrial grating products coupled with lower pricing
levels.
|
|
|
(45.1)
|
Decreased
revenues of the air-cooled heat exchangers business due to a weaker
natural gas market.
|
|
|
(19.8)
|
Net
decreased revenues in the reclamation and recycling services business due
to lower commodity pricing, partially offset by net increased
volume.
|
|
|
(5.9)
|
Decreased
volume in the roofing granules and abrasives business.
|
|
|
(11.5)
|
Other
(minor changes across the various units not already
mentioned).
|
|
|
35.6
|
Net
increased revenues in the Harsco Rail Segment due principally to a higher
level of rail equipment shipments to China in 2009 and increased contract
services, partially offset by lower repair parts sales.
|
|
|
9.9
|
Effect
of business acquisitions in the Harsco Infrastructure
Segment.
|
|
|
$(977.2)
|
Total
Change in Revenues 2009 vs. 2008
|
|
(In
millions)
|
Change
in Revenues 2008 vs. 2007
|
|
|
$ 80.3
|
Net
increased revenues in the Harsco Infrastructure Segment due principally to
non-residential and infrastructure construction in international markets,
particularly in the Middle East and Europe, and North American
markets.
|
|
|
58.5
|
Effect
of business acquisitions. Increased revenues of $30.0 million,
$15.6 million, $2.0 and $10.9 million in the Harsco Metals Segment, Harsco
Infrastructure Segment, Harsco Rail Segment and the All Other Category
(Harsco Minerals & Harsco Industrial),
respectively.
|
|
|
46.8
|
Increased
revenues in the Harsco Rail Segment due to a higher level of rail
equipment shipments in 2008 and increased repair parts sales, partially
offset by decreased contract services.
|
|
|
30.8
|
Effect
of foreign currency translation.
|
|
|
22.0
|
Increased
revenues of the air-cooled heat exchangers business due to a strong
natural gas market.
|
|
|
18.7
|
Increased
revenues of the industrial grating products business due to increased
prices.
|
|
|
18.6
|
Net
increased volume, new business and sales price changes in the Harsco
Metals Segment (excluding acquisitions).
|
|
|
5.9
|
Increased
revenues in the roofing granules and abrasives business resulting from
price increases and product mix.
|
|
|
4.6
|
Other
(minor changes across the various units not already
mentioned).
|
|
|
(6.5)
|
Net
decreased revenues in the reclamation and recycling services business due
to lower metal prices and reduced volume.
|
|
|
$279.7
|
Total
Change in Revenues 2008 vs. 2007
|
|
(In
millions)
|
Change
in Cost of Services and Products Sold 2009 vs. 2008
|
|
|
$(500.9)
|
Decreased
costs due to lower revenues (exclusive of the effect of foreign currency
translation and business acquisitions, and including the impact of lower
commodity and energy costs included in selling prices).
|
|
|
(180.4)
|
Effect
of foreign currency translation.
|
|
|
(2.7)
|
Other
(product/service mix and increased equipment maintenance costs, partially
offset by enterprise business optimization initiatives and volume-related
efficiencies).
|
|
|
9.7
|
Business
acquisitions.
|
|
|
$(674.3)
|
Total
Change in Cost of Services and Products Sold 2009 vs.
2008
|
|
(In
millions)
|
Change
in Cost of Services and Products Sold 2008 vs. 2007
|
|
|
$129.5
|
Increased
costs due to increased revenues (exclusive of the effect of foreign
currency translation and business acquisitions, and including the impact
of increased commodity and energy costs included in selling
prices).
|
|
|
45.7
|
Business
acquisitions.
|
|
|
40.8
|
Other
(product/service mix and increased equipment maintenance costs, partially
offset by enterprise business optimization initiatives and volume-related
efficiencies).
|
|
|
24.9
|
Effect
of foreign currency translation.
|
|
|
$240.9
|
Total
Change in Cost of Services and Products Sold 2008 vs.
2007
|
|
(In
millions)
|
Change
in Selling, General and Administrative Expenses 2009 vs.
2008
|
|
|
$(43.7)
|
Effect
of foreign currency translation.
|
|
|
(22.3)
|
Decreased
compensation expense due to lower employment levels.
|
|
|
(12.8)
|
Other
(due to spending reductions).
|
|
|
(8.4)
|
Decreased
travel expenses due to discretionary spending
reductions.
|
|
|
(8.2)
|
Lower
professional fees due to discretionary spending
reductions.
|
|
|
(2.9)
|
Lower
bad debt expense.
|
|
|
2.6
|
Increased
sales commissions, largely related to increased revenues in the Harsco
Rail Segment.
|
|
|
2.6
|
Effect
of business acquisitions.
|
|
|
$(93.1)
|
Total
Change in Selling, General and Administrative Expenses 2009 vs.
2008
|
|
(In
millions)
|
Change
in Selling, General and Administrative Expenses 2008 vs.
2007
|
|
|
$ 23.5
|
Increased
compensation expense due to salary increases resulting from overall
business growth, partially offset by lower employee incentive plan
costs.
|
|
|
9.5
|
Increased
professional fees due to global optimization projects and global business
expansion.
|
|
|
6.8
|
Business
acquisitions.
|
|
|
6.8
|
Other
expenses.
|
|
|
4.7
|
Increased
bad debt expense.
|
|
|
3.6
|
Increased
travel expenses to support business expansion and optimization
projects.
|
|
|
3.2
|
Increased
sales commissions, largely related to increased revenues in the Harsco
Rail Segment.
|
|
|
3.2
|
Higher
depreciation expense principally related to the implementation of
enterprise-wide information technology systems and related
hardware.
|
|
|
2.6
|
Effect
of foreign currency translation.
|
|
|
$ 63.9
|
Total
Change in Selling, General and Administrative Expenses 2008 vs.
2007
|
|
Contractual
Obligations as of December 31, 2009 (a)
|
|||||||||||||||||||||
|
Payments
Due by Period
|
|||||||||||||||||||||
|
(In
millions)
|
Total
|
Less
than
1
year
|
1-3
years
|
4-5
years
|
After
5 years
|
||||||||||||||||
|
Short-term
Debt
|
$ | 57.4 | $ | 57.4 | $ | - | $ | - | $ | - | |||||||||||
|
Long-term
Debt
(including
current maturities and capital leases)
|
927.5 | 325.8 | 5.0 | 149.6 | 447.1 | ||||||||||||||||
|
Projected
interest payments on Long-term Debt (b)
|
265.2 | 54.1 | 67.6 | 57.2 | 86.3 | ||||||||||||||||
|
Pension
benefit payments (c)
|
589.2 | 49.4 | 105.7 | 114.9 | 319.2 | ||||||||||||||||
|
Operating
Leases
|
162.3 | 45.5 | 54.8 | 34.5 | 27.5 | ||||||||||||||||
|
Purchase
Obligations
|
88.1 | 86.0 | 1.7 | 0.2 | 0.2 | ||||||||||||||||
|
Foreign
Currency Forward Exchange Contracts (d)
|
122.1 | 122.1 | - | - | - | ||||||||||||||||
|
Total
Contractual Obligations (e)
|
$ | 2,211.8 | $ | 740.3 | $ | 234.8 | $ | 356.4 | $ | 880.3 | |||||||||||
|
|
(a)
|
See
Note 6, Debt and Credit Agreements; Note 7, Leases; Note 8, Employee
Benefit Plans; Note 9, Income Taxes; and Note 13, Financial Instruments,
to the Consolidated Financial Statements under Part II, Item 8, “Financial
Statements and Supplementary Data,” for additional disclosures on
short-term and long-term debt; operating leases; pensions; income taxes;
and foreign currency forward exchange contracts,
respectively.
|
|
|
(b)
|
The
total projected interest payments on Long-term Debt are based upon
borrowings, interest rates and foreign currency exchange rates as of
December 31, 2009. The interest rates on variable-rate debt and
the foreign currency exchange rates are subject to changes beyond the
Company’s control and may result in actual interest expense and payments
differing from the amounts projected
above.
|
|
|
(c)
|
Amounts
represent expected benefit payments by the defined benefit plans for the
next 10 years.
|
|
(d)
|
This
amount represents the notional value of the foreign currency exchange
contracts outstanding at December 31, 2009. Due to the nature
of these transactions, there will be offsetting cash flows to these
contracts, with the difference recognized as a gain or loss in the
Consolidated Statement of
Income.
|
|
(e)
|
As
of December 31, 2009, in addition to the above contractual obligations,
the Company had approximately $47.8 million of long-term tax liabilities,
including interest and penalties, related to uncertain tax
positions. Because of the high degree of uncertainty regarding
the timing of future cash outflows associated with these liabilities, the
Company is unable to estimate the years in which settlement will occur
with the respective taxing
authorities.
|
|
Commercial
Commitments as of December 31, 2009
|
|||||||||||||||||||||||||
|
Amount
of Commitment Expiration Per Period
|
|||||||||||||||||||||||||
|
(In
millions)
|
Total
Amounts Committed
|
Less
than
1
Year
|
1-3
Years
|
4-5
Years
|
Over
5
Years
|
Indefinite
Expiration
|
|||||||||||||||||||
|
Standby
Letters of Credit
|
$ | 193.0 | $ | 137.6 | $ | 51.0 | $ | 1.0 | $ | - | $ | 3.4 | |||||||||||||
|
Guarantees
|
75.4 | 11.9 | 1.0 | - | 5.6 | 56.9 | |||||||||||||||||||
|
Performance
Bonds
|
13.2 | 11.4 | 0.3 | - | - | 1.5 | |||||||||||||||||||
|
Other
Commercial Commitments
|
11.1 | - | - | - | - | 11.1 | |||||||||||||||||||
|
Total
Commercial Commitments
|
$ | 292.7 | $ | 160.9 | $ | 52.3 | $ | 1.0 | $ | 5.6 | $ | 72.9 | |||||||||||||
|
Summary
of Credit Facilities and Commercial Paper Programs
|
As
of December 31, 2009
|
||||||||||||
|
(In
millions)
|
Facility
Limit
|
Outstanding
Balance
|
Available
Credit
|
||||||||||
|
U.S.
commercial paper program
|
$ | 550.0 | $ | 20.9 | $ | 529.1 | |||||||
|
Euro
commercial paper program
|
286.3 | 29.0 | 257.3 | ||||||||||
|
Multi-year
revolving credit facility (a)
|
570.0 | - | 570.0 | ||||||||||
|
Bilateral
credit facility (b)
|
30.0 | - | 30.0 | ||||||||||
|
Totals
at December 31, 2009
|
$ | 1,436.3 | $ | 49.9 | $ | 1,386.4 | (c) | ||||||
|
|
(a)
|
U.S.-based
program.
|
|
|
(b)
|
International-based
program.
|
|
|
(c)
|
Although
the Company has significant available credit, for practical purposes, the
Company limits aggregate commercial paper and credit facility borrowings
at any one-time to a maximum of $600 million (the aggregate amount of the
back-up facilities).
|
|
Long-term
Notes
|
U.S.-Based
Commercial Paper
|
Outlook
|
|
|
Standard
& Poor’s (S&P)
|
A-
|
A-2
|
Stable
|
|
Moody’s
|
Baa1
|
P-2
|
Stable
|
|
Fitch
|
A-
|
F2
|
Stable
|
|
(Dollars
are in millions)
|
December
31
2009
|
December
31
2008
|
Increase
(Decrease)
|
||||||||||
|
Current
Assets
|
|||||||||||||
|
Cash
and cash equivalents
|
$ | 94.2 | $ | 91.3 | $ | 2.9 | |||||||
|
Trade
accounts receivable, net
|
598.3 | 648.9 | (50.6 | ) | |||||||||
|
Other
receivables, net
|
30.9 | 46.0 | (15.1 | ) | |||||||||
|
Inventories
|
291.2 | 309.5 | (18.3 | ) | |||||||||
|
Other
current assets
|
151.9 | 104.5 | 47.4 | ||||||||||
|
Assets
held-for-sale
|
2.8 | 5.3 | (2.5 | ) | |||||||||
|
Total
current assets
|
1,169.3 | 1,205.5 | (36.2 | ) | |||||||||
|
Current
Liabilities
|
|||||||||||||
|
Notes
payable and current maturities
|
83.2 | 121.1 | (37.9 | ) | |||||||||
|
Accounts
payable
|
215.5 | 262.8 | (47.3 | ) | |||||||||
|
Accrued
compensation
|
67.7 | 85.2 | (17.5 | ) | |||||||||
|
Income
taxes payable
|
5.9 | 13.4 | (7.5 | ) | |||||||||
|
Other
current liabilities
|
378.8 | 405.9 | (27.1 | ) | |||||||||
|
Total
current liabilities
|
751.1 | 888.4 | (137.3 | ) | |||||||||
|
Working
Capital
|
$ | 418.2 | $ | 317.1 | $ | 101.1 | |||||||
|
Current
Ratio
|
1.6:1
|
1.4:1
|
|||||||||||
|
·
|
Net
trade accounts receivable decreased $50.6 million primarily due to lower
revenues in 2009 partially offset by foreign currency translation
effects.
|
|
·
|
Other
receivables decreased $15.1 million primarily due to collections of
insurance proceeds related to insured claims settled during the first
quarter of 2009 and an income tax refund received in the third quarter of
2009.
|
|
·
|
Inventories
decreased $18.3 million primarily due to the Company’s focus on reducing
inventory levels based upon current market demand, partially offset by
higher inventory levels in the Harsco Rail Segment to satisfy current
international contracts and foreign currency translation
effects.
|
|
·
|
Other
current assets increased $47.4 million primarily due to reclassification
of noncurrent deferred taxes to current deferred taxes as a result of the
expected utilization of these assets in
2010.
|
|
·
|
Notes
payable and current maturities decreased $37.9 million due to strong
operating cash flows in 2009 that facilitated repayments of short-term
commercial paper borrowings and other short-term borrowings, partially
offset by the current portion of long-term
debt.
|
|
·
|
Accounts
payable decreased $47.3 million primarily due to reduced spending levels
partially offset by foreign currency translation
effects.
|
|
·
|
Accrued
compensation decreased $17.5 million due principally to the payment of
incentive compensation earned during 2008, coupled with lower incentive
compensation accruals at the end of
2009.
|
|
·
|
Other
current liabilities decreased $27.1 million due principally to a decline
in restructuring reserves from 2008 due to severance payments and a
decline in accrued expenses and accrued non-income tax obligations
primarily as a result of reduced business
activity.
|
|
Summarized
Cash Flow Information
(In
millions)
|
2009
|
2008
|
2007
|
||||||||||
|
Net
cash provided by (used in):
|
|||||||||||||
|
Operating
activities
|
$ | 434.5 | $ | 574.3 | $ | 471.7 | |||||||
|
Investing
activities
|
(269.4 | ) | (443.4 | ) | (386.1 | ) | |||||||
|
Financing
activities
|
(164.1 | ) | (155.6 | ) | (77.7 | ) | |||||||
|
Effect of exchange rate changes on
cash
|
1.8 | (5.8 | ) | 12.7 | |||||||||
|
Net change in cash and cash
equivalents
|
$ | 2.8 | $ | (30.5 | ) | $ | 20.6 | ||||||
|
·
|
Lower
net income in 2009 compared with
2008.
|
|
·
|
Higher
accounts payable payments due to
timing.
|
|
·
|
Reduction
in advances on contracts due to shipments in
2009.
|
|
·
|
Higher
trade receivable collections due to
timing.
|
|
·
|
Initiatives
to reduce inventory levels coupled with reduced spending on inventory
throughout the Company based upon current market
demand.
|
|
(Dollars
are in millions)
|
December
31
2009
|
December
31
2008
(a)
|
|||||||
|
Notes
Payable and Current Maturities
|
$ | 83.2 | $ | 121.1 | |||||
|
Long-term
Debt
|
901.7 | 891.8 | |||||||
|
Total
Debt
|
984.9 | 1,012.9 | |||||||
|
Total
Equity
|
1,509.8 | 1,450.0 | |||||||
|
Total
Capital
|
$ | 2,494.7 | $ | 2,462.9 | |||||
|
Total
Debt to Total Capital
|
39.5 | % | 41.1 | % | |||||
|
|
(a)
|
December
2008 Equity has been retroactively adjusted to include Noncontrolling
Interest as a component of Equity in accordance with changes issued by the
Financial Accounting Standards Board related to consolidation accounting
and reporting.
|
|
Approximate Changes in Pre-tax Defined
Benefit
Net Periodic Pension Cost
|
|||
|
U.S. Plans
|
U.K. Plan
|
||
|
Discount rate
|
|||
|
One-half
percent increase
|
Decrease
of $0.4 million
|
Decrease
of $2.1 million
|
|
|
One-half
percent decrease
|
Increase
of $0.3 million
|
Increase
of $2.2 million
|
|
|
Expected long-term rate of return on plan
assets
|
|||
|
One-half
percent increase
|
Decrease
of $1.0 million
|
Decrease
of $2.8 million
|
|
|
One-half
percent decrease
|
Increase
of $ 1.0 million
|
Increase
of $2.8 million
|
|
|
Research
and Development Expense
|
|||||||||||||
|
(In
millions)
|
2009
|
2008
|
2007
|
||||||||||
|
Harsco
Infrastructure Segment
|
$ | 1.7 | $ | 2.0 | $ | 0.7 | |||||||
|
Harsco
Metals Segment
|
0.8 | 1.6 | 1.3 | ||||||||||
|
Harsco
Rail Segment (a)
|
0.2 | 0.8 | 0.8 | ||||||||||
|
Segment Totals
|
2.7 | 4.4 | 2.8 | ||||||||||
|
All
Other Category – Harsco
Minerals & Harsco Industrial (a)
|
0.5 | 0.9 | 0.4 | ||||||||||
|
Consolidated
Totals
|
$ | 3.2 | $ | 5.3 | $ | 3.2 | |||||||
|
|
(a)
|
Segment
information for prior periods has been reclassified to conform with the
current presentation. The Harsco Rail operating segment, which was
previously a component of the All Other Category, is now reported
separately.
|
| Page | ||||
| Consolidated Financial Statements of Harsco Corporation: | ||||
|
Management’s
Report on Internal Control Over Financial Reporting
|
52
|
|||
|
Report
of Independent Registered Public Accounting Firm
|
53
|
|||
|
Consolidated
Balance Sheets
|
||||
|
December
31, 2009 and 2008
|
54
|
|||
|
Consolidated
Statements of Income
|
||||
|
for
the years 2009, 2008 and 2007
|
55
|
|||
|
Consolidated
Statements of Cash Flows
|
||||
|
for
the years 2009, 2008 and 2007
|
56
- 57
|
|||
|
Consolidated
Statements of Changes in Equity
|
||||
|
for
the years 2009, 2008 and 2007
|
58
- 59
|
|||
|
Consolidated
Statements of Comprehensive Income
|
||||
|
for
the years 2009, 2008 and 2007
|
60
|
|||
|
Notes
to Consolidated Financial Statements
|
61
- 103
|
|||
|
Supplementary
Data (Unaudited):
|
||||
|
Two-Year
Summary of Quarterly Results
|
104 | |||
|
Common
Stock Price and Dividend Information
|
|
105 | ||
|
·
|
Pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect transactions and dispositions of assets of the
Company;
|
|
·
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. generally
accepted accounting principles, and that receipts and expenditures of the
Company are being made only in accordance with authorizations of
management and the directors of the Company;
and
|
|
·
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that
could have a material effect on the Company’s financial
statements.
|
| /S/ Salvatore D. Fazzolari | /S/ Stephen J. Schnoor | ||
| Salvatore D. Fazzolari | Stephen J. Schnoor | ||
| Chairman and Chief Executive Officer | Senior Vice President and Chief Financial Officer | ||
| February 23, 2010 | February 23, 2010 |
|
HARSCO
CORPORATION
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
(In
thousands, except share and per share amounts)
|
December
31
2009
|
December
31
2008
(a)
|
||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash and cash
equivalents
|
$ | 94,184 | $ | 91,336 | ||||
|
Trade accounts receivable,
net
|
598,318 | 648,880 | ||||||
|
Other
receivables
|
30,865 | 46,032 | ||||||
|
Inventories
|
291,174 | 309,530 | ||||||
|
Other current
assets
|
154,797 | 109,710 | ||||||
|
Total current
assets
|
1,169,338 | 1,205,488 | ||||||
|
Property,
plant and equipment, net
|
1,510,801 | 1,482,833 | ||||||
|
Goodwill
|
699,041 | 631,490 | ||||||
|
Intangible
assets, net
|
150,746 | 141,493 | ||||||
|
Other
assets
|
109,314 | 101,666 | ||||||
|
Total assets
|
$ | 3,639,240 | $ | 3,562,970 | ||||
|
LIABILITIES
|
||||||||
|
Current
liabilities:
|
||||||||
|
Short-term
borrowings
|
$ | 57,380 | $ | 117,854 | ||||
|
Current maturities of long-term
debt
|
25,813 | 3,212 | ||||||
|
Accounts
payable
|
215,504 | 262,783 | ||||||
|
Accrued
compensation
|
67,652 | 85,237 | ||||||
|
Income taxes
payable
|
5,931 | 13,395 | ||||||
|
Dividends
payable
|
16,473 | 15,637 | ||||||
|
Insurance
liabilities
|
25,533 | 36,553 | ||||||
|
Advances on
contracts
|
149,413 | 144,237 | ||||||
|
Other current
liabilities
|
187,403 | 209,518 | ||||||
|
Total current
liabilities
|
751,102 | 888,426 | ||||||
|
Long-term
debt
|
901,734 | 891,817 | ||||||
|
Deferred
income taxes
|
90,993 | 35,442 | ||||||
|
Insurance
liabilities
|
61,660 | 60,663 | ||||||
|
Retirement
plan liabilities
|
250,075 | 190,153 | ||||||
|
Other
liabilities
|
73,842 | 46,497 | ||||||
|
Total liabilities
|
2,129,406 | 2,112,998 | ||||||
|
COMMITMENTS
AND CONTINGENCIES
|
||||||||
|
HARSCO
CORPORATION STOCKHOLDERS' EQUITY
|
||||||||
|
Preferred
stock, Series A junior participating cumulative preferred
stock
|
— | — | ||||||
|
Common
stock, par value $1.25, issued 111,387,185 and 111,139,988 shares as of
December 31, 2009 and 2008, respectively
|
139,234 | 138,925 | ||||||
|
Additional
paid-in capital
|
137,746 | 137,083 | ||||||
|
Accumulated
other comprehensive loss
|
(201,684 | ) | (208,299 | ) | ||||
|
Retained
earnings
|
2,133,297 | 2,079,170 | ||||||
|
Treasury
stock, at cost (31,034,126 and 30,965,452, respectively)
|
(735,016 | ) | (733,203 | ) | ||||
|
Total Harsco Corporation
stockholders’ equity
|
1,473,577 | 1,413,676 | ||||||
|
Noncontrolling
interests
|
36,257 | 36,296 | ||||||
|
Total equity
|
1,509,834 | 1,449,972 | ||||||
|
Total liabilities and
equity
|
$ | 3,639,240 | $ | 3,562,970 | ||||
|
(a)
|
On
January 1, 2009, the Company adopted changes issued by the Financial
Accounting Standards Board related to consolidation accounting and
reporting. These changes, among others, require that minority
interests be renamed noncontrolling interests and that a company present
such noncontrolling interests as equity for all periods presented.
Balances have been reclassified
accordingly.
|
|
Years
ended December 31
|
2009
|
2008
(a)
|
2007
(a)
|
|||||||||
|
Revenues
from continuing operations:
|
||||||||||||
|
Service
revenues
|
$ | 2,442,198 | $ | 3,340,456 | $ | 3,166,561 | ||||||
|
Product
revenues
|
548,379 | 627,366 | 521,599 | |||||||||
|
Total revenues
|
2,990,577 | 3,967,822 | 3,688,160 | |||||||||
|
Costs
and expenses from continuing operations:
|
||||||||||||
|
Cost of services
sold
|
1,897,408 | 2,484,975 | 2,316,904 | |||||||||
|
Cost of products
sold
|
354,730 | 441,445 | 368,600 | |||||||||
|
Selling, general and
administrative expenses
|
509,071 | 602,169 | 538,233 | |||||||||
|
Research and development
expenses
|
3,151 | 5,295 | 3,175 | |||||||||
|
Other expenses
|
7,561 | 21,950 | 3,443 | |||||||||
|
Total costs and
expenses
|
2,771,921 | 3,555,834 | 3,230,355 | |||||||||
|
Operating income from
continuing operations
|
218,656 | 411,988 | 457,805 | |||||||||
|
Equity
in income of unconsolidated entities, net
|
504 | 901 | 1,049 | |||||||||
|
Interest
income
|
2,928 | 3,608 | 4,968 | |||||||||
|
Interest
expense
|
(62,746 | ) | (73,160 | ) | (81,383 | ) | ||||||
|
Income from continuing
operations before income taxes
|
159,342 | 343,337 | 382,439 | |||||||||
|
Income
tax expense
|
(18,509 | ) | (91,820 | ) | (117,598 | ) | ||||||
|
Income from continuing
operations
|
140,833 | 251,517 | 264,841 | |||||||||
|
Discontinued
operations:
|
||||||||||||
|
Income from operations of
discontinued business
|
— | — | 26,897 | |||||||||
|
Gain (loss) on disposal of
discontinued business
|
(21,907 | ) | (1,747 | ) | 41,414 | |||||||
|
Income tax benefit (expense)
related to discontinued business
|
6,846 | (2,931 | ) | (23,934 | ) | |||||||
|
Income
(loss) from discontinued operations
|
(15,061 | ) | (4,678 | ) | 44,377 | |||||||
|
Net
Income
|
125,772 | 246,839 | 309,218 | |||||||||
|
Less: Net income attributable
to noncontrolling interests
|
(6,995 | ) | (5,894 | ) | (9,726 | ) | ||||||
|
Net
Income attributable to Harsco Corporation
|
$ | 118,777 | $ | 240,945 | $ | 299,492 | ||||||
|
Amounts
attributable to Harsco Corporation common stockholders:
|
||||||||||||
|
Income from continuing
operations, net of tax
|
$ | 133,838 | $ | 245,623 | $ | 255,115 | ||||||
|
Income (loss) from discontinued
operations, net of tax
|
(15,061 | ) | (4,678 | ) | 44,377 | |||||||
|
Net income attributable to
Harsco Corporation common stockholders
|
$ | 118,777 | $ | 240,945 | $ | 299,492 | ||||||
|
Weighted-average
shares of common stock outstanding
|
80,295 | 83,599 | 84,169 | |||||||||
|
Basic
earnings per common share attributable to Harsco Corporation common
stockholders:
|
||||||||||||
|
Continuing
operations
|
$ | 1.67 | $ | 2.94 | $ | 3.03 | ||||||
|
Discontinued
operations
|
(0.19 | ) | (0.06 | ) | 0.53 | |||||||
|
Basic
earnings per share attributable to Harsco Corporation common
stockholders
|
$ | 1.48 | $ | 2.88 | $ | 3.56 | ||||||
|
Diluted
weighted-average shares of common stock outstanding
|
80,586 | 84,029 | 84,724 | |||||||||
|
Diluted
earnings per common share attributable to Harsco Corporation common
stockholders:
|
||||||||||||
|
Continuing
operations
|
$ | 1.66 | $ | 2.92 | $ | 3.01 | ||||||
|
Discontinued
operations
|
(0.19 | ) | (0.06 | ) | 0.52 | |||||||
|
Diluted
earnings per share attributable to Harsco Corporation common
stockholders
|
$ | 1.47 | $ | 2.87 | (b) | $ | 3.53 | |||||
|
(a)
|
On
January 1, 2009, the Company adopted changes issued by the Financial
Accounting Standards Board related to consolidation accounting and
reporting. These changes, among others, require that minority
interests be renamed noncontrolling interests and that a company present a
consolidated net income measure that includes the amount attributable to
such noncontrolling interests for all periods presented. Results
have been reclassified accordingly.
|
|
(b)
|
Does
not total due to rounding.
|
|
Years
ended December 31
|
2009
|
2008
(a)
|
2007
(a)
|
|||||||||
|
Cash
flows from operating activities:
|
||||||||||||
|
Net income
|
$ | 125,772 | $ | 246,839 | $ | 309,218 | ||||||
|
Adjustments to reconcile net
income to net
|
||||||||||||
|
cash provided (used) by operating
activities:
|
||||||||||||
|
Depreciation
|
282,976 | 307,847 | 277,397 | |||||||||
|
Amortization
|
28,555 | 30,102 | 29,016 | |||||||||
|
Equity in income of
unconsolidated entities, net
|
(504 | ) | (901 | ) | (1,049 | ) | ||||||
|
Dividends or distributions from
unconsolidated entities
|
410 | 484 | 181 | |||||||||
|
(Gain) loss on disposal of
discontinued business
|
21,907 | 1,747 | (41,414 | ) | ||||||||
|
Other, net
|
(15,762 | ) | 61,244 | (10,388 | ) | |||||||
|
Changes in assets and
liabilities, net of acquisitions
|
||||||||||||
|
and dispositions of
businesses:
|
||||||||||||
|
Accounts
receivable
|
111,207 | 34,198 | (60,721 | ) | ||||||||
|
Inventories
|
35,798 | (24,238 | ) | (106,495 | ) | |||||||
|
Accounts
payable
|
(54,701 | ) | (22,144 | ) | 18,268 | |||||||
|
Accrued interest
payable
|
(1,305 | ) | 3,841 | (1,291 | ) | |||||||
|
Accrued
compensation
|
(23,402 | ) | (15,843 | ) | 8,516 | |||||||
|
Income taxes
|
(36,692 | ) | (76,346 | ) | 2,971 | |||||||
|
Advances on
contracts
|
4,242 | 92,580 | 46,159 | |||||||||
|
Other assets and
liabilities
|
(44,043 | ) | (65,134 | ) | 1,372 | |||||||
|
Net cash provided by operating
activities
|
434,458 | 574,276 | 471,740 | |||||||||
|
Cash
flows from investing activities:
|
||||||||||||
|
Purchases of property, plant and
equipment
|
(165,320 | ) | (457,617 | ) | (443,583 | ) | ||||||
|
Purchase of businesses, net of
cash acquired*
|
(103,241 | ) | (15,539 | ) | (254,639 | ) | ||||||
|
Proceeds from sales of
assets
|
2,115 | 24,516 | 317,189 | |||||||||
|
Other investing
activities
|
(2,914 | ) | 5,222 | (5,092 | ) | |||||||
|
Net cash used by investing
activities
|
(269,360 | ) | (443,418 | ) | (386,125 | ) | ||||||
|
Cash
flows from financing activities:
|
||||||||||||
|
Short-term borrowings,
net
|
(79,670 | ) | 65,239 | (137,645 | ) | |||||||
|
Current maturities and long-term
debt:
|
||||||||||||
|
Additions
|
482,493 | 975,393 | 1,023,282 | |||||||||
|
Reductions
|
(487,171 | ) | (996,173 | ) | (908,295 | ) | ||||||
|
Cash dividends paid on common
stock
|
(63,813 | ) | (65,632 | ) | (59,725 | ) | ||||||
|
Dividends paid to noncontrolling
interests
|
(3,487 | ) | (5,595 | ) | (5,668 | ) | ||||||
|
Purchase of noncontrolling
interests
|
(13,057 | ) | — | — | ||||||||
|
Contributions of equity from
noncontrolling interest
|
5,332 | — | — | |||||||||
|
Common stock
issued-options
|
995 | 1,831 | 11,765 | |||||||||
|
Common stock acquired for
treasury
|
— | (128,577 | ) | — | ||||||||
|
Other financing
activities
|
(5,705 | ) | (2,025 | ) | (1,401 | ) | ||||||
|
Net cash used by financing
activities
|
(164,083 | ) | (155,539 | ) | (77,687 | ) | ||||||
|
Effect
of exchange rate changes on cash
|
1,833 | (5,816 | ) | 12,645 | ||||||||
|
Net
increase (decrease) in cash and cash equivalents
|
2,848 | (30,497 | ) | 20,573 | ||||||||
|
Cash
and cash equivalents at beginning of period
|
91,336 | 121,833 | 101,260 | |||||||||
|
Cash
and cash equivalents at end of period
|
$ | 94,184 | $ | 91,336 | $ | 121,833 | ||||||
|
Years
ended December 31
|
2009
|
2008
(a)
|
2007
(a)
|
|||||||||
|
*Purchase
of businesses, net of cash acquired
|
||||||||||||
|
Working capital, other than
cash
|
$ | (2,399 | ) | $ | (263 | ) | $ | (17,574 | ) | |||
|
Property, plant and
equipment
|
(68,906 | ) | (11,961 | ) | (45,398 | ) | ||||||
|
Other noncurrent assets and
liabilities, net
|
(31,936 | ) | (3,315 | ) | (191,667 | ) | ||||||
|
Net cash used to acquire
businesses
|
$ | (103,241 | ) | $ | (15,539 | ) | $ | (254,639 | ) | |||
|
(a)
|
On
January 1, 2009, the Company adopted changes issued by the Financial
Accounting Standards Board related to consolidation accounting and
reporting. These changes, among others, require that minority
interests be renamed noncontrolling interests for all periods
presented. Results have been reclassified
accordingly.
|
|
Common
Stock
|
||||||||||||||||||||||||||||
|
(In
thousands, except share and per share amounts)
|
Issued
|
Treasury
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other Comprehensive Income (Loss)
|
Noncontrolling
Interest (a)
|
Total
|
|||||||||||||||||||||
|
Balances,
January 1, 2007
|
$ | 85,614 | $ | (603,171 | ) | $ | 166,494 | $ | 1,666,262 | $ | (169,334 | ) | $ | 31,130 | $ | 1,176,995 | ||||||||||||
|
Net
income
|
299,492 | 9,726 | 309,218 | |||||||||||||||||||||||||
|
2-for-1
stock split, 42,029,232 shares
|
52,536 | (52,536 | ) | — | ||||||||||||||||||||||||
|
Cash
dividends declared:
|
(61,252 | ) | ||||||||||||||||||||||||||
|
Common @ $0.71 per
share
|
(61,252 | ) | ||||||||||||||||||||||||||
|
Noncontrolling
interests
|
(5,668 | ) | (5,668 | ) | ||||||||||||||||||||||||
|
Translation
adjustments, net of deferred income taxes of $(4,380)
|
110,451 | 2,835 | 113,286 | |||||||||||||||||||||||||
|
Cash
flow hedging instrument adjustments, net of deferred income taxes of
$(64)
|
119 | 119 | ||||||||||||||||||||||||||
|
Pension
liability adjustments, net of deferred income taxes of
$(24,520)
|
56,257 | 56,257 | ||||||||||||||||||||||||||
|
Marketable
securities unrealized gains, net of deferred income taxes of
$(3)
|
6 | 6 | ||||||||||||||||||||||||||
|
Stock
options exercised, 411,864 shares
|
515 | 11,224 | 11,739 | |||||||||||||||||||||||||
|
Other,
90 shares, and 82,700 restricted stock units (net of
forfeitures)
|
2 | 26 | 28 | |||||||||||||||||||||||||
|
Amortization
of unearned compensation on restricted stock units
|
3,414 | 3,414 | ||||||||||||||||||||||||||
|
Balances,
December 31, 2007
|
$ | 138,665 | $ | (603,169 | ) | $ | 128,622 | $ | 1,904,502 | $ | (2,501 | ) | $ | 38,023 | $ | 1,604,142 | ||||||||||||
|
Cumulative
effect from adoption of pension accounting changes, net of deferred income
taxes of $(413)
|
(1,453 | ) | 2,372 | 919 | ||||||||||||||||||||||||
|
Beginning
Balances, January 1, 2008
|
$ | 138,665 | $ | (603,169 | ) | $ | 128,622 | $ | 1,903,049 | $ | (129 | ) | $ | 38,023 | $ | 1,605,061 | ||||||||||||
|
Net
income
|
240,945 | 5,894 | 246,839 | |||||||||||||||||||||||||
|
Cash
dividends declared:
|
||||||||||||||||||||||||||||
|
Common @ $0.78 per
share
|
(64,824 | ) | (64,824 | ) | ||||||||||||||||||||||||
|
Noncontrolling
interests
|
(5,595 | ) | (5,595 | ) | ||||||||||||||||||||||||
|
Translation
adjustments, net of deferred income taxes of $85,526
|
(154,572 | ) | (2,026 | ) | (156,598 | ) | ||||||||||||||||||||||
|
Cash
flow hedging instrument adjustments, net of deferred income taxes of
$(7,655)
|
20,812 | 20,812 | ||||||||||||||||||||||||||
|
Pension
liability adjustments, net of deferred income taxes of
$29,057
|
(74,340 | ) | (74,340 | ) | ||||||||||||||||||||||||
|
Marketable
securities unrealized gains, net of deferred income taxes of
$38
|
(70 | ) | (70 | ) | ||||||||||||||||||||||||
|
Stock
options exercised, 121,176 shares
|
152 | 3,336 | 3,488 | |||||||||||||||||||||||||
|
Net
issuance of stock – vesting of restricted stock units, 56,847
shares
|
108 | (1,457 | ) | (108 | ) | (1,457 | ) | |||||||||||||||||||||
|
Treasury
shares repurchased, 4,463,353 shares
|
(128,577 | ) | (128,577 | ) | ||||||||||||||||||||||||
|
Amortization
of unearned compensation on restricted stock units, net of
forfeitures
|
5,233 | 5,233 | ||||||||||||||||||||||||||
|
Balances,
December 31, 2008
|
$ | 138,925 | $ | (733,203 | ) | $ | 137,083 | $ | 2,079,170 | $ | (208,299 | ) | $ | 36,296 | $ | 1,449,972 | ||||||||||||
|
Common
Stock
|
||||||||||||||||||||||||||||
|
(In
thousands, except share and per share amounts)
|
Issued
|
Treasury
|
Additional
Paid-in Capital
|
Retained
Earnings
|
Accumulated
Other Comprehensive Income (Loss)
|
Noncontrolling
Interest (a)
|
Total
|
|||||||||||||||||||||
|
Balances,
December 31, 2008
|
$ | 138,925 | $ | (733,203 | ) | $ | 137,083 | $ | 2,079,170 | $ | (208,299 | ) | $ | 36,296 | $ | 1,449,972 | ||||||||||||
|
Net
income
|
118,777 | 6,995 | 125,772 | |||||||||||||||||||||||||
|
Cash
dividends declared:
|
||||||||||||||||||||||||||||
|
Common @ $0.805 per
share
|
(64,650 | ) | (64,650 | ) | ||||||||||||||||||||||||
|
Noncontrolling
interests
|
(3,487 | ) | (3,487 | ) | ||||||||||||||||||||||||
|
Translation
adjustments, net of deferred income taxes of $(21,866)
|
96,802 | 262 | 97,064 | |||||||||||||||||||||||||
|
Cash
flow hedging instrument adjustments, net of deferred income taxes of
$10,849
|
(30,041 | ) | (30,041 | ) | ||||||||||||||||||||||||
|
Purchase
of subsidiary shares from noncontrolling interests
|
(3,905 | ) | (9,141 | ) | (13,046 | ) | ||||||||||||||||||||||
|
Contributions
of equity from noncontrolling interest
|
5,332 | 5,332 | ||||||||||||||||||||||||||
|
Pension
liability adjustments, net of deferred income taxes of
$26,012
|
(60,150 | ) | (60,150 | ) | ||||||||||||||||||||||||
|
Marketable
securities unrealized loss, net of deferred income taxes of
$(2)
|
4 | 4 | ||||||||||||||||||||||||||
|
Stock
options exercised, 92,250 shares
|
115 | (423 | ) | 1,366 | 1,058 | |||||||||||||||||||||||
|
Net
issuance of stock – vesting of restricted stock units, 101,918
shares
|
194 | (1,390 | ) | (684 | ) | (1,880 | ) | |||||||||||||||||||||
|
Amortization
of unearned compensation on restricted stock units, net of
forfeitures
|
3,886 | 3,886 | ||||||||||||||||||||||||||
|
Balances,
December 31, 2009
|
$ | 139,234 | $ | (735,016 | ) | $ | 137,746 | $ | 2,133,297 | $ | (201,684 | ) | $ | 36,257 | $ | 1,509,834 | ||||||||||||
|
(a)
|
On
January 1, 2009, the Company adopted changes issued by the Financial
Accounting Standards Board related to consolidation accounting and
reporting. These changes, among others, require that minority
interests be renamed noncontrolling interests and that a company present
such noncontrolling interests as equity for all periods presented.
Amounts have been reclassified
accordingly.
|
|
Years
ended December 31
|
2009
|
2008
(a)
|
2007
(a)
|
|||||||||
|
Net
income
|
$ | 125,772 | $ | 246,839 | $ | 309,218 | ||||||
|
Other
comprehensive income (loss):
|
||||||||||||
|
Foreign
currency translation adjustments, net of deferred income
taxes
|
97,064 | (156,598 | ) | 113,286 | ||||||||
|
Net
gains (losses) on cash flow hedging instruments, net of deferred income
taxes of $10,490, $(7,681) and $2 in 2009, 2008 and 2007,
respectively
|
(29,375 | ) | 20,859 | (3 | ) | |||||||
|
Reclassification
adjustment for (gain) loss on cash flow hedging instruments, net of
deferred income taxes of $359, $26 and $(66) in 2009, 2008 and 2007,
respectively
|
(666 | ) | (47 | ) | 122 | |||||||
|
Pension
liability adjustments, net of deferred income taxes of $26,012, $29,057
and $(24,520) in 2009, 2008 and 2007, respectively
|
(60,150 | ) | (74,340 | ) | 56,257 | |||||||
|
Unrealized
gain (loss) on marketable securities, net of deferred income taxes of
$(2), $38 and $(3) in 2009, 2008 and 2007, respectively
|
4 | (70 | ) | 6 | ||||||||
|
Total
other comprehensive income (loss)
|
6,877 | (210,196 | ) | 169,668 | ||||||||
|
Total
comprehensive income
|
132,649 | 36,643 | 478,886 | |||||||||
|
Less:
Comprehensive income attributable to noncontrolling
interests
|
(7,257 | ) | (3,868 | ) | (12,561 | ) | ||||||
|
Comprehensive
income attributable to Harsco Corporation
|
$ | 125,392 | $ | 32,775 | $ | 466,325 | ||||||
|
(a)
|
On
January 1, 2009, the Company adopted changes issued by the Financial
Accounting Standards Board related to consolidation accounting and
reporting. These changes, among others, require that minority
interests be renamed noncontrolling interests and that a company present a
consolidated net income measure that includes the amount attributable to
such noncontrolling interests for all periods presented. Results
have been reclassified accordingly.
|
|
Warranty
Activity
|
|||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
|
||||||||||
|
Balance
at the beginning of the period
|
$ | 2,863 | $ | 2,907 | $ | 4,805 | |||||||
|
Accruals
for warranties issued during the period
|
4,623 | 3,683 | 3,112 | ||||||||||
|
Reductions
related to pre-existing warranties
|
(1,388 | ) | (1,524 | ) | (1,112 | ) | |||||||
|
Divestiture
|
— | — | (980 | ) | |||||||||
|
Warranties
paid
|
(2,059 | ) | (2,157 | ) | (2,810 | ) | |||||||
|
Other
(principally foreign currency translation)
|
39 | (46 | ) | (108 | ) | ||||||||
|
Balance
at end of the period
|
$ | 4,078 | $ | 2,863 | $ | 2,907 | |||||||
|
·
|
how
and why an entity uses derivative
instruments,
|
|
·
|
how
derivative instruments and related hedged items are accounted for,
and
|
|
·
|
how
derivative instruments and related hedged items affect an entity’s
financial position, financial performance and cash
flows.
|
|
·
|
to
perform an analysis to determine whether the enterprise’s variable
interest or interests give it a controlling financial interest in a
variable interest entity;
|
|
·
|
to
require ongoing reassessments of whether an enterprise is the primary
beneficiary of a variable interest
entity;
|
|
·
|
to
eliminate the quantitative approach previously required for determining
the primary beneficiary of a variable interest
entity;
|
|
·
|
to
add an additional reconsideration event for determining whether an entity
is a variable interest entity when any changes in facts and circumstances
occur such that holders of the equity investment at risk, as a group, lose
the power from voting rights or similar rights of those investments to
direct the activities of the entity that most significantly impact the
entity’s economic performance; and
|
|
·
|
to
provide enhanced disclosures that will provide users of financial
statements with more transparent information about an enterprise’s
involvement in a variable interest
entity.
|
|
For
the Years Ended December 31
|
|||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
|
||||||||||
|
Net
income attributable to the Company
|
$ | 118,777 | $ | 240,945 | $ | 299,492 | |||||||
|
Decrease
in the Company’s paid-in capital for purchase of partnership
interests
|
(3,905 | ) | — | — | |||||||||
|
Change
from net income attributable to the Company and transfers to
noncontrolling interest
|
$ | 114,872 | $ | 240,945 | $ | 299,492 | |||||||
|
Inventories
|
|||||||||
|
(In
thousands)
|
2009
|
2008
|
|||||||
|
Finished
goods
|
$ | 146,104 | $ | 156,490 | |||||
|
Work-in-process
|
19,381 | 21,918 | |||||||
|
Raw
materials and purchased parts
|
84,542 | 83,372 | |||||||
|
Stores
and supplies
|
41,147 | 47,750 | |||||||
|
Total
inventories
|
$ | 291,174 | $ | 309,530 | |||||
|
Valued
at lower of cost or market:
|
|||||||||
|
Last-in,
first-out (“LIFO”) basis
|
$ | 111,641 | $ | 105,959 | |||||
|
First-in,
first-out (“FIFO”) basis
|
13,877 | 15,140 | |||||||
|
Average
cost basis
|
165,656 | 188,431 | |||||||
|
Total
inventories
|
$ | 291,174 | $ | 309,530 | |||||
|
(In
thousands)
|
2009
|
2008
|
|||||||
|
Land
and improvements
|
$ | 46,198 | $ | 41,913 | |||||
|
Buildings
and improvements
|
207,280 | 167,606 | |||||||
|
Machinery
and equipment
|
3,146,358 | 2,905,398 | |||||||
|
Uncompleted
construction
|
50,252 | 75,210 | |||||||
|
Gross
property, plant and equipment
|
3,450,088 | 3,190,127 | |||||||
|
Less
accumulated depreciation
|
(1,939,287 | ) | (1,707,294 | ) | |||||
|
Net
property, plant and equipment
|
$ | 1,510,801 | $ | 1,482,833 | |||||
|
Land
improvements
|
5
to 20 years
|
|
|
Buildings
and improvements
|
5
to 40 years
|
|
|
Machinery
and equipment
|
3
to 20 years
|
|
|
Leasehold
improvements
|
Estimated
useful life of the improvement or, if shorter, the life of the
lease
|
|
Goodwill
by Segment
|
||||||||||||||||||||
|
(In
thousands)
|
Harsco
Infrastructure Segment
|
Harsco
Metals Segment
|
Harsco
Rail Segment
|
All
Other Category (a) –
Harsco Minerals & Harsco Industrial
|
Consolidated
Totals
|
|||||||||||||||
|
Balance
as of December 31, 2007
|
$ | 254,856 | $ | 348,311 | $ | 8,118 | $ | 108,784 | $ | 720,069 | ||||||||||
|
Goodwill
acquired during year (b)
|
12,045 | — | — | — | 12,045 | |||||||||||||||
|
Changes
to Goodwill (c)
|
1,262 | (4,892 | ) | 254 | 12 | (3,364 | ) | |||||||||||||
|
Foreign
currency translation
|
(47,616 | ) | (43,806 | ) | — | (5,838 | ) | (97,260 | ) | |||||||||||
|
Balance
as of December 31, 2008
|
$ | 220,547 | $ | 299,613 | $ | 8,372 | $ | 102,958 | $ | 631,490 | ||||||||||
|
Goodwill
acquired during year (d)
|
29,601 | — | — | — | 29,601 | |||||||||||||||
|
Changes
to Goodwill (e)
|
(68 | ) | 480 | 607 | 1,137 | 2,156 | ||||||||||||||
|
Foreign
currency translation
|
16,039 | 15,652 | — | 4,103 | 35,794 | |||||||||||||||
|
Balance
as of December 31, 2009
|
$ | 266,119 | $ | 315,745 | $ | 8,979 | $ | 108,198 | $ | 699,041 | ||||||||||
|
(a)
|
All
Other Category has been adjusted for comparative purposes to exclude the
Harsco Rail Segment, which has been reclassified as a reportable Segment
based on 2009 results.
|
|
(b)
|
Relates
to acquisitions of Baviera S.R.L., Buckley Scaffolding and Sovereign
Access Services Limited.
|
|
(c)
|
Relates
principally to opening balance sheet
adjustments.
|
|
(d)
|
Relates
principally to the ESCO
acquisition.
|
|
(e)
|
Relates
principally to payment of contingent consideration on acquisitions made
prior to 2009.
|
|
Intangible
Assets
|
|||||||||||||||||
|
December
31, 2009
|
December
31, 2008
|
||||||||||||||||
|
(In
thousands)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
|||||||||||||
|
Customer
relationships
|
$ | 165,092 | $ | 61,547 | $ | 138,752 | $ | 40,821 | |||||||||
|
Non-compete
agreements
|
1,440 | 1,346 | 1,414 | 1,196 | |||||||||||||
|
Patents
|
7,043 | 4,597 | 6,316 | 4,116 | |||||||||||||
|
Other
|
73,143 | 28,336 | 60,495 | 19,309 | |||||||||||||
|
Total
|
$ | 246,718 | $ | 95,826 | $ | 206,977 | $ | 65,442 | |||||||||
|
Acquired
Intangible Assets
|
|||||||
|
(In
thousands)
|
Gross
Carrying
Amount
|
Residual
Value
|
Weighted-average
amortization
period
|
||||
|
Customer
relationships
|
$ | 19,823 |
None
|
9
years
|
|||
|
Patents
|
574 |
None
|
15
years
|
||||
|
Other
|
7,677 |
None
|
5
years
|
||||
|
Total
|
$ | 28,074 | |||||
|
(In
thousands)
|
2010
|
2011
|
2012
|
2013
|
2014
|
||||||||||||||||
|
Estimated
amortization expense (a)
|
$ | 31,865 | $ | 29,953 | $ | 16,353 | $ | 14,496 | $ | 12,761 | |||||||||||
|
(a)
|
These
estimated amortization expense amounts do not reflect the potential effect
of future foreign currency exchange rate
fluctuations.
|
|
Credit
Facilities as of December 31, 2009
|
|||||||||||||
|
(In
thousands)
|
Facility
Limit
|
Outstanding
Balance
|
Available
Credit
|
||||||||||
|
U.S.
commercial paper program
|
$ | 550,000 | $ | 20,949 | $ | 529,051 | |||||||
|
Euro
commercial paper program
|
286,320 | 28,999 | 257,321 | ||||||||||
|
Multi-year
revolving credit facility (a)
|
570,000 | — | 570,000 | ||||||||||
|
Bilateral
credit facility (b)
|
30,000 | — | 30,000 | ||||||||||
|
Totals
at December 31, 2009
|
$ | 1,436,320 | $ | 49,948 | $ | 1,386,372 | (c) | ||||||
|
|
(a)
|
U.S.-based
program.
|
|
|
(b)
|
International-based
program.
|
|
|
(c)
|
Although
the Company has significant available credit, in practice, the Company
limits aggregate commercial paper and credit facility borrowings at any
one-time to a maximum of $600.0 million (the aggregate amount of the
back-up facilities).
|
|
Long-Term
Debt
|
|||||||||
|
(In
thousands)
|
2009
|
2008
|
|||||||
|
5.75%
notes due May 1, 2018
|
$ | 447,029 | $ | 446,762 | |||||
|
7.25%
British pound sterling-denominated notes due October 27,
2010
|
322,700 | 290,777 | |||||||
|
5.125%
notes due September 15, 2013
|
149,392 | 149,247 | |||||||
|
Other
financing payable in varying amounts due through 2016 with a weighted
average interest rate of 8.0% and 7.5% as of December 31, 2009 and 2008,
respectively
|
8,426 | 8,243 | |||||||
| 927,547 | 895,029 | ||||||||
|
Less:
current maturities
|
(25,813 | ) | (3,212 | ) | |||||
|
Total
Long-term Debt
|
$ | 901,734 | $ | 891,817 | |||||
|
(In
thousands)
|
|||||
|
2011
|
$ | 3,739 | |||
|
2012
|
301,247 | ||||
|
2013
|
149,536 | ||||
|
2014
|
57 | ||||
|
(In
thousands)
|
|||||
|
2010
|
$ | 45,500 | |||
|
2011
|
31,540 | ||||
|
2012
|
23,230 | ||||
|
2013
|
18,749 | ||||
|
2014
|
15,737 | ||||
|
After
2014
|
27,521 | ||||
|
(In
thousands)
|
U.S.
Plans
|
International
Plans
|
||||||||||||||||||||||
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
|||||||||||||||||||
|
Net
Periodic Pension Cost (Income)
|
||||||||||||||||||||||||
|
Defined
benefit plans:
|
||||||||||||||||||||||||
|
Service cost
|
$ | 1,790 | $ | 1,740 | $ | 3,033 | $ | 3,977 | $ | 8,729 | $ | 9,031 | ||||||||||||
|
Interest cost
|
14,104 | 15,197 | 15,511 | 42,854 | 50,146 | 50,118 | ||||||||||||||||||
|
Expected return on plan
assets
|
(14,598 | ) | (23,812 | ) | (22,943 | ) | (41,453 | ) | (58,166 | ) | (61,574 | ) | ||||||||||||
|
Recognized prior service
costs
|
351 | 333 | 686 | 353 | 897 | 938 | ||||||||||||||||||
|
Recognized
losses
|
3,466 | 1,167 | 1,314 | 9,353 | 10,317 | 15,254 | ||||||||||||||||||
|
Amortization of
transition liability
|
— | — | — | 33 | 29 | 36 | ||||||||||||||||||
|
Settlement/Curtailment loss
(gain)
|
4 | (620 | ) | 2,091 | (341 | ) | 1,536 | — | ||||||||||||||||
|
Defined
benefit plans pension cost (income)
|
5,117 | (5,995 | ) | (308 | ) | 14,776 | 13,488 | 13,803 | ||||||||||||||||
|
Less
Discontinued Operations included in above
|
— | (694 | ) | 2,748 | — | — | 477 | |||||||||||||||||
|
Defined
benefit plans pension cost (income) – continuing
operations
|
5,117 | (5,301 | ) | (3,056 | ) | 14,776 | 13,488 | 13,326 | ||||||||||||||||
|
Multi-employer
plans (a)
|
12,533 | 15,231 | 13,552 | 9,201 | 10,143 | 10,361 | ||||||||||||||||||
|
Defined
contribution plans (a)
|
7,104 | 7,806 | 9,628 | 8,235 | 8,131 | 7,741 | ||||||||||||||||||
|
Net periodic pension cost –
continuing operations
|
$ | 24,754 | $ | 17,736 | $ | 20,124 | $ | 32,212 | $ | 31,762 | $ | 31,428 | ||||||||||||
|
Defined
Benefit Pension Benefits
|
U.
S. Plans
|
International
Plans
|
||||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
|
Change
in benefit obligation:
|
||||||||||||||||
|
Benefit
obligation at beginning of year
|
$ | 238,347 | $ | 268,710 | $ | 698,836 | $ | 987,894 | ||||||||
|
Service
cost
|
1,790 | 1,740 | 3,977 | 8,729 | ||||||||||||
|
Interest
cost
|
14,104 | 15,197 | 42,854 | 50,146 | ||||||||||||
|
Plan
participants’ contributions
|
— | — | 1,131 | 2,311 | ||||||||||||
|
Amendments
|
— | 890 | — | (111 | ) | |||||||||||
|
Adoption
of measurement date change
|
— | 598 | — | 5,154 | ||||||||||||
|
Actuarial
loss (gain)
|
8,638 | (10,145 | ) | 102,390 | (58,507 | ) | ||||||||||
|
Settlements/curtailments
|
— | — | (1,564 | ) | (10,388 | ) | ||||||||||
|
Benefits
paid
|
(15,616 | ) | (15,721 | ) | (35,771 | ) | (35,695 | ) | ||||||||
|
Divestiture
of Gas Technologies Segment
|
— | (22,922 | ) | — | (678 | ) | ||||||||||
|
Effect
of foreign currency
|
— | — | 76,029 | (250,019 | ) | |||||||||||
|
Benefit
obligation at end of year
|
$ | 247,263 | $ | 238,347 | $ | 887,882 | $ | 698,836 | ||||||||
|
Change
in plan assets:
|
||||||||||||||||
|
Fair
value of plan assets at beginning of year
|
$ | 189,686 | $ | 311,193 | $ | 558,757 | $ | 905,849 | ||||||||
|
Actual
return on plan assets
|
39,730 | (83,794 | ) | 67,925 | (99,645 | ) | ||||||||||
|
Employer
contributions
|
3,119 | 1,600 | 25,601 | 28,865 | ||||||||||||
|
Plan
participants’ contributions
|
— | — | 1,131 | 2,310 | ||||||||||||
|
Settlements/curtailments
|
— | — | (1,110 | ) | (237 | ) | ||||||||||
|
Benefits
paid
|
(15,616 | ) | (15,721 | ) | (33,238 | ) | (34,182 | ) | ||||||||
|
Adoption
of measurement date change
|
— | (2,495 | ) | — | (5,946 | ) | ||||||||||
|
Divestiture
of Gas Technologies Segment
|
— | (21,097 | ) | — | — | |||||||||||
|
Effect
of foreign currency
|
— | — | 59,952 | (238,257 | ) | |||||||||||
|
Fair
value of plan assets at end of year
|
$ | 216,919 | $ | 189,686 | $ | 679,018 | $ | 558,757 | ||||||||
|
Funded
status at end of year
|
$ | (30,344 | ) | $ | (48,661 | ) | $ | (208,864 | ) | $ | (140,079 | ) | ||||
|
Defined
Benefit Pension Benefits
|
U.
S. Plans
|
International
Plans
|
||||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
|
Amounts
recognized in the Consolidated Balance Sheets consist of the
following:
|
||||||||||||||||
|
Noncurrent
assets
|
$ | 1,676 | $ | 232 | $ | 7,929 | $ | 5,072 | ||||||||
|
Current
liabilities
|
(2,175 | ) | (2,111 | ) | (1,129 | ) | (1,897 | ) | ||||||||
|
Noncurrent
liabilities
|
(29,845 | ) | (46,782 | ) | (215,664 | ) | (143,254 | ) | ||||||||
|
Accumulated
other comprehensive loss before tax
|
89,209 | 109,523 | 357,388 | 260,765 | ||||||||||||
|
U. S. Plans
|
International Plans
|
|||||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
|
Net
actuarial loss
|
$ | 87,712 | $ | 107,672 | $ | 354,201 | $ | 257,393 | ||||||||
|
Prior
service cost
|
1,497 | 1,851 | 2,972 | 3,184 | ||||||||||||
|
Transition
obligation
|
— | — | 215 | 188 | ||||||||||||
|
Total
|
$ | 89,209 | $ | 109,523 | $ | 357,388 | $ | 260,765 | ||||||||
|
(In
thousands)
|
U.
S. Plans
|
International
Plans
|
||||||
|
Net
actuarial loss
|
$ | 2,611 | $ | 12,644 | ||||
|
Prior
service cost
|
339 | 384 | ||||||
|
Transition
obligation
|
— | 56 | ||||||
|
Total
|
$ | 2,950 | $ | 13,084 | ||||
|
(In
millions)
|
U.S.
Plans
|
International
Plans
|
||||||
|
2010
|
$ | 15.2 | $ | 34.2 | ||||
|
2011
|
16.7 | 35.8 | ||||||
|
2012
|
15.9 | 37.3 | ||||||
|
2013
|
17.4 | 38.9 | ||||||
|
2014
|
18.0 | 40.6 | ||||||
|
2015
- 2019
|
87.8 | 231.4 | ||||||
|
Global
Weighted Average
December
31
|
|||||
|
2009
|
2008
|
2007
|
|||
|
Discount
rates
|
6.1%
|
5.9%
|
5.3%
|
||
|
Expected
long-term rates of return on plan assets
|
7.4%
|
7.6%
|
7.6%
|
||
|
Rates
of compensation increase
|
3.4%
|
3.6%
|
3.3%
|
||
|
U.
S. Plans
December
31
|
International
Plans
December
31
|
||||||
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
||
|
Discount
rates
|
6.1%
|
6.2%
|
5.9%
|
6.0%
|
5.8%
|
5.1%
|
|
|
Expected
long-term rates of return on plan assets
|
8.0%
|
8.3%
|
8.3%
|
7.1%
|
7.3%
|
7.3%
|
|
|
Rates
of compensation increase
|
4.0%
|
4.8%
|
4.5%
|
3.4%
|
3.5%
|
3.2%
|
|
|
Global
Weighted Average
December
31
|
||||
|
2009
|
2008
|
|||
|
Discount
rates
|
5.8%
|
6.1%
|
||
|
Rates
of compensation increase
|
3.6%
|
3.4%
|
||
|
U.S.
Plans
December
31
|
International
Plans
December
31
|
|||||
|
2009
|
2008
|
2009
|
2008
|
|||
|
Discount
rates
|
5.9%
|
6.1%
|
5.7%
|
6.0%
|
||
|
Rates
of compensation increase
|
3.0%
|
4.0%
|
3.6%
|
3.4%
|
||
|
(In
millions)
|
U.S.
Plans
|
International
Plans
|
|||||||
|
2009
|
$ | 247.1 | $ | 877.7 | |||||
|
2008
|
$ | 237.8 | $ | 687.7 | |||||
|
U.
S. Plans
|
International
Plans
|
||||||||||||||||
|
(In
millions)
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Projected
benefit obligation
|
$ | 238.0 | $ | 228.7 | $ | 843.7 | $ | 659.5 | |||||||||
|
Accumulated
benefit obligation
|
238.0 | 228.5 | 838.5 | 656.1 | |||||||||||||
|
Fair
value of plan assets
|
206.0 | 179.8 | 627.5 | 517.3 | |||||||||||||
|
U.S.
Plans
Asset
Category
|
Target
Long-Term Allocation
|
Percentage
of Plan Assets at
|
|
|
December
31, 2009
|
December
31, 2008
|
||
|
Domestic
Equity Securities
|
41%
- 51%
|
47.5%
|
42.5%
|
|
International
Equity Securities
|
4.5%
- 14.5%
|
11.1%
|
8.8%
|
|
Fixed
Income Securities
|
27%
- 37%
|
32.7%
|
39.6%
|
|
Cash
& Cash Equivalents
|
0%
- 5%
|
1.4%
|
1.4%
|
|
Other
|
6%
- 18%
|
7.3%
|
7.7%
|
|
International
Plans
Asset
Category
|
Target
Long-Term Allocation
|
Percentage
of Plan Assets at
|
|
|
December
31, 2009
|
December
31, 2008
|
||
|
Equity
Securities
|
50.0%
|
46.0%
|
42.0%
|
|
Fixed
Income Securities
|
40.0%
|
43.9%
|
47.4%
|
|
Cash
& Cash Equivalents
|
0.0%
|
1.5%
|
0.2%
|
|
Other
|
10.0%
|
8.6%
|
10.4%
|
|
(In
thousands)
|
Total
|
Level
1
|
Level
2
|
Level
3
|
||||||||||||
|
Domestic
equities:
|
||||||||||||||||
|
Common
stocks
|
$ | 50,211 | $ | 50,211 | $ | — | $ | — | ||||||||
|
Mutual
funds - equities
|
52,734 | 13,892 | 38,842 | — | ||||||||||||
|
International
equities – mutual funds
|
24,035 | 11,012 | 13,023 | — | ||||||||||||
|
Fixed
income securities
|
||||||||||||||||
|
U.S.
Treasuries and collateralized securities
|
25,525 | — | 25,525 | — | ||||||||||||
|
Corporate
bonds and notes
|
6,327 | 6,327 | — | — | ||||||||||||
|
Mutual
funds - bonds
|
39,110 | 39,110 | — | — | ||||||||||||
|
Other
– mutual funds
|
16,039 | 15,918 | 121 | — | ||||||||||||
|
Cash
and money market accounts
|
2,938 | 2,938 | — | — | ||||||||||||
|
Total
|
$ | 216,919 | $ | 139,408 | $ | 77,511 | $ | — | ||||||||
|
(In
thousands)
|
Total
|
Level
1
|
Level
2
|
Level
3
|
||||||||||||
|
Equity
securities
|
||||||||||||||||
|
Common
stocks
|
$ | 35,037 | $ | 35,037 | $ | — | $ | — | ||||||||
|
Mutual
funds - equities
|
277,069 | 120,356 | 156,713 | — | ||||||||||||
|
Fixed
income investments
|
||||||||||||||||
|
British
government securities
|
46,299 | — | 46,299 | — | ||||||||||||
|
Corporate
bonds and notes
|
26,809 | 26,809 | — | — | ||||||||||||
|
Mutual
funds – bonds
|
168,201 | — | 168,201 | — | ||||||||||||
|
Insurance
contracts
|
56,955 | — | 56,955 | — | ||||||||||||
|
Other:
|
||||||||||||||||
|
Real
estate funds / limited partnerships
|
40,177 | — | 29,183 | 10,994 | ||||||||||||
|
Other
mutual funds
|
18,190 | 15,033 | 3,157 | — | ||||||||||||
|
Cash
and money market accounts
|
10,281 | 10,281 | — | — | ||||||||||||
|
Total
|
$ | 679,018 | $ | 207,516 | $ | 460,508 | $ | 10,994 | ||||||||
|
(In
thousands)
|
Real
Estate Limited Partnerships
|
||||
|
Balance
at December 31, 2008
|
$ | 8,438 | |||
|
Actual
return on plan assets:
|
|||||
|
Relating
to assets still held at year—end
|
2,556 | ||||
|
Balance
at December 31, 2009
|
$ | 10,994 | |||
|
·
|
Level
1 Fair Value Measurements - Investments in interest-bearing cash are
stated at cost, which approximates fair value. The fair values
of money market accounts and certain mutual funds are based on quoted net
asset values of the shares held by the Plan at year-end. The
fair values of common and foreign stocks and corporate bonds, notes and
convertible debentures are valued at the closing price reported in the
active market on which the individual securities are
traded.
|
|
·
|
Level
2 Fair Value Measurements - The fair values of investments in mutual funds
for which quoted net asset values in an active market are not available
are valued by the investment advisor based on the current market values of
the underlying assets of the mutual fund based on information reported by
the investment consistent with audited financial statements of the mutual
fund. Further information concerning these mutual funds may be
obtained from their separate audited financial
statements. Investments in U.S. Treasury notes and
collateralized securities are valued based on yields currently available
on comparable securities of issuers with similar credit
ratings.
|
|
·
|
Level
3 Fair Value Measurements – Real estate limited partnership interests are
valued by the general partners based on the underlying
assets. The limited partnership interests are valued using
unobservable inputs and have been classified within Level 3 of the fair
value hierarchy.
|
|
Impact
of Measurement Date Change
|
||||||||||||||||||||||||
|
U.
S. Defined Benefit
Pension
Plans
|
International
Defined
Benefit
Pension
Plans
|
Other
Post-Retirement
Benefit
Plans
|
||||||||||||||||||||||
|
(In
thousands)
|
Retained
Earnings
|
AOCI
|
Retained
Earnings
|
AOCI
|
Retained
Earnings
|
AOCI
|
||||||||||||||||||
|
Service
cost, interest cost and expected return on plan assets
|
$ | 576 | $ | — | $ | 364 | $ | — | $ | (21 | ) | $ | — | |||||||||||
|
Amortization
of prior service cost and actuarial gain (loss)
|
(169 | ) | 169 | (2,207 | ) | 2,207 | 4 | (4 | ) | |||||||||||||||
|
Net
adjustment recognized
|
$ | 407 | $ | 169 | $ | (1,843 | ) | $ | 2,207 | $ | (17 | ) | $ | (4 | ) | |||||||||
|
9.
|
Income
Taxes
|
|
(In
thousands)
|
2009
|
2008
|
2007
|
||||||||||
|
United
States
|
$ | 51,529 | $ | 98,842 | $ | 110,926 | |||||||
|
International
|
107,813 | 244,495 | 271,513 | ||||||||||
|
Total
income before income taxes and noncontrolling interest
|
$ | 159,342 | $ | 343,337 | $ | 382,439 | |||||||
|
Income
tax expense (benefit):
|
|||||||||||||
|
Currently
payable:
|
|||||||||||||
|
Federal
|
$ | 23,886 | $ | 33,873 | $ | 37,917 | |||||||
|
State
|
1,591 | 1,988 | 8,670 | ||||||||||
|
International
|
26,938 | 54,817 | 68,688 | ||||||||||
|
Total
income taxes currently payable
|
52,415 | 90,678 | 115,275 | ||||||||||
|
Deferred
federal and state
|
(28,018 | ) | 1,478 | (3,695 | ) | ||||||||
|
Deferred
international
|
(5,888 | ) | (336 | ) | 6,018 | ||||||||
|
Total income tax
expense
|
$ | 18,509 | $ | 91,820 | $ | 117,598 | |||||||
|
2009
|
2008
|
2007
|
|
|
U.S.
federal income tax rate
|
35.0%
|
35.0%
|
35.0%
|
|
State
income taxes, net of federal income tax benefit
|
1.0
|
0.8
|
1.0
|
|
Export
sales corporation benefit/domestic manufacturing deduction
|
(1.5)
|
(0.2)
|
(0.3)
|
|
Change
in permanent reinvestment assertion
|
(5.0)
|
—
|
(0.8)
|
|
Difference
in effective tax rates on international earnings and
remittances
|
(25.0)
|
(7.7)
|
(3.0)
|
|
Uncertain
tax position contingencies and settlements
|
4.0
|
(0.5)
|
0.2
|
|
Cumulative
effect in change in statutory tax rates/laws
|
2.8
|
(0.4)
|
(0.7)
|
|
Other,
net
|
0.3
|
(0.3)
|
(0.7)
|
|
Effective
income tax rate
|
11.6%
|
26.7%
|
30.7%
|
|
2009
|
2008
|
||||||||||||||||
|
(In
thousands)
|
Asset
|
Liability
|
Asset
|
Liability
|
|||||||||||||
|
Depreciation
and amortization
|
$ | — | $ | 177,393 | $ | — | $ | 169,729 | |||||||||
|
Expense
accruals
|
37,720 | — | 36,909 | — | |||||||||||||
|
Inventories
|
4,813 | — | 4,866 | — | |||||||||||||
|
Provision
for receivables
|
2,129 | — | 2,587 | — | |||||||||||||
|
Deferred
revenue
|
— | 4,838 | — | 7,704 | |||||||||||||
|
Operating
loss carryforwards
|
48,822 | — | 21,211 | — | |||||||||||||
|
Deferred
foreign tax credits
|
17,061 | — | 3,601 | — | |||||||||||||
|
Pensions
|
61,403 | — | 58,226 | — | |||||||||||||
|
Currency
adjustments
|
66,791 | — | 85,561 | — | |||||||||||||
|
Outside
basis differences on foreign investments
|
— | — | — | 7,963 | |||||||||||||
|
Other
|
13,358 | — | 16,336 | — | |||||||||||||
|
Subtotal
|
252,097 | 182,231 | 229,297 | 185,396 | |||||||||||||
|
Valuation
allowance
|
(22,744 | ) | — | (21,459 | ) | — | |||||||||||
|
Total
deferred income taxes
|
$ | 229,353 | $ | 182,231 | $ | 207,838 | $ | 185,396 | |||||||||
|
(In
thousands)
|
2009
|
2008
|
|||||||
|
Other
current assets
|
$ | 82,606 | $ | 35,065 | |||||
|
Other
assets
|
57,083 | 27,013 | |||||||
|
Other
current liabilities
|
(1,574 | ) | (4,194 | ) | |||||
|
Deferred
income taxes
|
(90,993 | ) | (35,442 | ) | |||||
|
(In
thousands)
|
Unrecognized
Income
Tax
Benefits
|
Deferred
Income
Tax
Benefits
|
Unrecognized
Income
Tax
Benefits,
Net of Deferred Income
Tax
Benefits
|
|||||||||
|
Balance
at January 1, 2007
|
$ | 45,965 | $ | (15,016 | ) | $ | 30,949 | |||||
|
Additions
for tax positions related to the current year (includes currency
translation adjustment)
|
3,849 | (172 | ) | 3,677 | ||||||||
|
Additions
for tax positions related to prior years (includes currency translation
adjustment)
|
6,516 | — | 6,516 | |||||||||
|
Reductions
for tax positions related to acquired entities in prior years, offset to
goodwill
|
(3,568 | ) | — | (3,568 | ) | |||||||
|
Other
reductions for tax positions related to prior years
|
(22,086 | ) | 12,681 | (9,405 | ) | |||||||
|
Settlements
|
(500 | ) | 175 | (325 | ) | |||||||
|
Balance
at December 31, 2007
|
$ | 30,176 | $ | (2,332 | ) | $ | 27,844 | |||||
|
Additions
for tax positions related to the current year (includes currency
translation adjustment)
|
2,723 | — | 2,723 | |||||||||
|
Additions
for tax positions related to prior years (includes currency translation
adjustment)
|
2,753 | (629 | ) | 2,124 | ||||||||
|
Reductions
for tax positions related to acquired entities in prior years, offset to
goodwill
|
(92 | ) | — | (92 | ) | |||||||
|
Other
reductions for tax positions related to prior years
|
(6,080 | ) | 1,077 | (5,003 | ) | |||||||
|
Settlements
|
(5,181 | ) | 705 | (4,476 | ) | |||||||
|
Balance
at December 31, 2008
|
$ | 24,299 | $ | (1,179 | ) | $ | 23,120 | |||||
|
Additions
for tax positions related to the current year (includes currency
translation adjustment)
|
7,868 | (11 | ) | 7,857 | ||||||||
|
Additions
for tax positions related to prior years (includes currency translation
adjustment)
|
10,625 | (49 | ) | 10,576 | ||||||||
|
Other
reductions for tax positions related to prior years
|
(4,007 | ) | 117 | (3,890 | ) | |||||||
|
Statute
of Limitations expirations
|
(1,934 | ) | 152 | (1,782 | ) | |||||||
|
Settlements
|
(60 | ) | 21 | (39 | ) | |||||||
|
Total
unrecognized income tax benefits that, if recognized, would impact the
effective income tax rate as of December 31, 2009
|
$ | 36,791 | $ | (949 | ) | $ | 35,842 | |||||
|
10.
|
Commitments
and Contingencies
|
|
No.
of Shares Authorized to be Purchased
January
1 (a)
|
Additional
Shares Authorized for Purchase
|
No.
of Shares Purchased
|
Remaining
No. of Shares Authorized for Purchase
December
31
|
||||||||||||||
|
2007
|
2,000,000 | — | — | 2,000,000 | |||||||||||||
|
2008
|
2,000,000 | 4,000,000 | 4,463,353 | 1,536,647 | |||||||||||||
|
2009
|
1,536,647 | 463,353 | — | 2,000,000 | |||||||||||||
|
(a)
|
Authorization
adjusted to reflect the two-for-one stock split effective at the end of
business on March 26, 2007.
|
|
Common
Stock
|
|||||||||||||
|
Shares
Issued
|
Treasury
Shares
|
Outstanding
Shares
|
|||||||||||
|
Outstanding,
January 1, 2007 (a)
|
110,510,203 | 26,472,843 | 84,037,360 | ||||||||||
|
Stock
Options Exercised (a)
|
422,416 | — | 422,416 | ||||||||||
|
Other
(a)
|
— | (90 | ) | 90 | |||||||||
|
Outstanding,
December 31, 2007
|
110,932,619 | 26,472,753 | 84,459,866 | ||||||||||
|
Stock
Options Exercised
|
121,176 | — | 121,176 | ||||||||||
|
Vested
Restricted Stock Units
|
86,193 | 29,346 | 56,847 | ||||||||||
|
Purchases
|
— | 4,463,353 | (4,463,353 | ) | |||||||||
|
Outstanding,
December 31, 2008
|
111,139,988 | 30,965,452 | 80,174,536 | ||||||||||
|
Stock
Options Exercised
|
92,250 | 15,645 | 76,605 | ||||||||||
|
Vested
Restricted Stock Units
|
154,947 | 53,029 | 101,918 | ||||||||||
|
Outstanding,
December 31, 2009
|
111,387,185 | 31,034,126 | 80,353,059 | ||||||||||
|
(Amounts
in thousands, except per share data)
|
2009
|
2008
|
2007
|
||||||||||
|
Income
from continuing operations attributable to Harsco Corporation common
stockholders
|
$ | 133,838 | $ | 245,623 | $ | 255,115 | |||||||
|
Weighted
average shares outstanding - basic
|
80,295 | 83,599 | 84,169 | ||||||||||
|
Dilutive
effect of stock-based compensation
|
291 | 430 | 555 | ||||||||||
|
Weighted
average shares outstanding - diluted
|
80,586 | 84,029 | 84,724 | ||||||||||
|
Earnings
from continuing operations per common share, attributable to Harsco
Corporation common stockholders:
|
|||||||||||||
|
Basic
|
$ | 1.67 | $ | 2.94 | $ | 3.03 | |||||||
|
Diluted
|
$ | 1.66 | $ | 2.92 | $ | 3.01 | |||||||
|
Stock-Based
Compensation Expense (Income)
|
||||||||||||||||||||
|
(Dollars
in thousands, except per unit)
|
||||||||||||||||||||
|
Restricted
|
Fair
Value
|
Expense
(Income)
|
||||||||||||||||||
|
Stock
Units
|
per
Unit
|
2009 |
2008
|
2007
|
||||||||||||||||
|
Directors:
|
||||||||||||||||||||
|
May 1, 2006 (a)
|
16,000 | $ | 41.30 | $ | — | $ | — | $ | 220 | |||||||||||
|
May 1, 2007
|
16,000 | 50.62 | — | 270 | 539 | |||||||||||||||
|
May 1, 2008
|
16,000 | 58.36 | 311 | 623 | — | |||||||||||||||
|
May 1, 2009
|
16,000 | 27.28 | 291 | — | — | |||||||||||||||
|
Employees:
|
||||||||||||||||||||
|
January 24, 2005
(a)
|
65,400 | 25.21 | — | 21 | 328 | |||||||||||||||
|
January 24, 2006
(a)
|
93,100 | 33.85 | (191 | )(b) | 632 | 839 | ||||||||||||||
|
January 23, 2007
|
101,700 | 38.25 | 761 | 1,035 | 1,488 | |||||||||||||||
|
January 22, 2008
|
130,950 | 45.95 | 1,371 | 2,652 | — | |||||||||||||||
|
January 27, 2009
|
106,625 | 25.15 | 1,174 | — | — | |||||||||||||||
|
November 19,
2009
|
15,000 | 31.90 | 169 | — | — | |||||||||||||||
|
Total
|
576,775 | $ | 3,886 | $ | 5,233 | $ | 3,414 | |||||||||||||
|
(a)
|
Restricted
stock units and fair values have been restated to reflect the March 2007
two-for-one stock split.
|
|
(b)
|
Due
primarily to forfeitures of restricted stock
units.
|
|
Restricted
Stock Units (a)
|
Weighted
Average Grant-Date
Fair
Value (a)
|
||||||||
|
Nonvested
at January 1, 2007
|
145,234 | $ | 30.88 | ||||||
|
Granted
|
117,700 | 39.93 | |||||||
|
Vested
|
(16,000 | ) | 47.51 | ||||||
|
Forfeited
|
(35,000 | ) | 34.06 | ||||||
|
Nonvested
at December 31, 2007
|
211,934 | 34.12 | |||||||
|
Granted
|
146,950 | 47.30 | |||||||
|
Vested
|
(95,570 | ) | 34.43 | ||||||
|
Forfeited
|
(5,584 | ) | 39.78 | ||||||
|
Nonvested
at December 31, 2008
|
257,730 | 41.40 | |||||||
|
Granted
|
137,625 | 26.13 | |||||||
|
Vested
|
(153,283 | ) | 38.46 | ||||||
|
Forfeited
|
(12,581 | ) | 36.97 | ||||||
|
Nonvested
at December 31, 2009
|
229,491 | $ | 34.45 | ||||||
|
(a)
|
Restricted
stock units and fair values have been restated to reflect the March 2007
two-for-one stock split.
|
|
Stock
Options
|
|||||||||||||
|
Shares
Under
Option (a)
|
Weighted
Average Exercise Price (a)
|
Aggregate
Intrinsic Value (in millions) (b)
|
|||||||||||
|
Outstanding,
January 1, 2007
|
1,027,412 | $ | 15.49 | $ | 23.4 | ||||||||
|
Exercised
|
(422,416 | ) | 15.74 | — | |||||||||
|
Outstanding,
December 31, 2007
|
604,996 | 15.30 | 29.9 | ||||||||||
|
Exercised
|
(121,176 | ) | 14.96 | — | |||||||||
|
Outstanding,
December 31, 2008
|
483,820 | 15.39 | 5.7 | ||||||||||
|
Exercised
|
(92,250 | ) | 14.25 | — | |||||||||
|
Expired
|
(1,600 | ) | 14.57 | — | |||||||||
|
Outstanding,
December 31, 2009
|
389,970 | $ | 15.66 | $ | 6.7 | ||||||||
|
(a)
|
Stock
options and weighted average exercise prices have been restated to reflect
the March 2007 two-for-one stock
split.
|
|
(b)
|
Intrinsic
value is defined as the difference between the current market value and
the exercise price.
|
|
Stock
Options Outstanding and Exercisable
|
|||||||||||||||
|
Range
of Exercisable Prices
|
Number
Outstanding
and
Exercisable
|
Remaining
Contractual
Life
In
Years
|
Weighted
Average
Exercise
Price
|
||||||||||||
| $12.81 – $14.50 | 137,815 | 0.79 | $ | 13.52 | |||||||||||
| 14.65 – 16.33 | 195,955 | 2.01 | 16.29 | ||||||||||||
| 16.96 – 20.96 | 56,200 | 2.78 | 18.73 | ||||||||||||
| 389,970 | |||||||||||||||
|
13.
|
Financial
Instruments
|
|
Fair
Values of Derivative Contracts
|
|||||||||||||
|
At
December 31, 2009
|
|||||||||||||
|
(In
thousands)
|
Other
current assets
|
Other
assets
|
Other
current liabilities
|
||||||||||
|
Derivatives
designated as hedging instruments:
|
|||||||||||||
|
Foreign
currency forward exchange contracts
|
$ | — | $ | — | $ | 14 | |||||||
|
Cross-currency
interest rate swap
|
— | 7,357 | — | ||||||||||
|
Total
derivatives designated as hedging instruments
|
$ | — | $ | 7,357 | $ | 14 | |||||||
|
Derivatives
not designated as hedging instruments:
|
|||||||||||||
|
Foreign
currency forward exchange contracts
|
$ | 2,187 | $ | — | $ | 590 | |||||||
|
Derivatives
Designated as Hedging Instruments
|
||||||||||||||
|
(In
thousands)
|
Amount
of Loss Recognized in Other Comprehensive Income (“OCI”) on Derivative -
Effective Portion
|
Location
of Gain Reclassified from Accumulated OCI into Income - Effective
Portion
|
Amount
of Gain Reclassified from Accumulated OCI into Income - Effective
Portion
|
Location
of Loss Recognized in Income on Derivative - Ineffective Portion and
Amount Excluded from Effectiveness Testing
|
Amount
of Loss Recognized in Income on Derivative - Ineffective Portion and
Amount Excluded from Effectiveness Testing
|
|||||||||
|
For
the twelve months ended
December
31, 2009:
|
||||||||||||||
|
Foreign
currency forward exchange contracts
|
$ | (23 | ) | $ | — | $ | — | |||||||
|
Commodity
contracts
|
(3,352 | ) |
Service
Revenues
|
1,025 |
Service
Revenues
|
(318 | ) | |||||||
|
Cross-currency
interest rate swap
|
(36,490 | ) | — |
Cost
of services and products sold
|
(5,586 | ) (a) | ||||||||
| $ | (39,865 | ) | $ | 1,025 | $ | (5,904 | ) | |||||||
|
(a)
|
The
net losses offset foreign currency fluctuation effects on the debt
principal.
|
|
Derivatives
Not Designated as Hedging Instruments
|
||
|
Amount
of Loss Recognized in Income on Derivative
For
the Twelve Months Ended December 31, 2009 (a)
|
||
|
(In
thousands)
|
Location
of Loss
Recognized
in
Income
on Derivative
|
|
|
Foreign
currency forward exchange contracts
|
Cost
of services
and
products sold
|
$ (6,308)
|
|
(a)
|
These
losses offset gains recognized in cost of service and products sold
principally as a result of intercompany or third party foreign currency
exposures.
|
|
As
of December 31, 2009
|
||||||||||
|
(In
thousands)
|
Type
|
U.S.
Dollar
Equivalent
|
Maturity
|
Recognized
Gain
(Loss)
|
||||||
|
British
pounds sterling
|
Sell
|
$ | 715 |
January
2010 through March 2010
|
$ | (18 | ) | |||
|
British
pounds sterling
|
Buy
|
3,354 |
January
2010
|
67 | ||||||
|
Euros
|
Sell
|
72,068 |
January
2010 through February 2010
|
1,820 | ||||||
|
Euros
|
Buy
|
38,967 |
January
2010
|
(346 | ) | |||||
|
Other
currencies
|
Sell
|
4,155 |
January
2010 through February 2010
|
72 | ||||||
|
Other
currencies
|
Buy
|
2,867 |
January
2010 through March 2010
|
(12 | ) | |||||
|
Total
|
$ | 122,126 | $ | 1,583 | ||||||
|
As
of December 31, 2008
|
||||||||||
|
(In
thousands)
|
Type
|
U.S.
Dollar
Equivalent
|
Maturity
|
Recognized
Gain
(Loss)
|
||||||
|
Canadian
dollar
|
Sell
|
$ | 1,342 |
January
through September 2009
|
$ | (14 | ) | |||
|
Euros
|
Sell
|
19,749 |
January
through March 2009
|
(248 | ) | |||||
|
Euros
|
Buy
|
113,084 |
January
through August 2009
|
5,625 | ||||||
|
British
pounds sterling
|
Sell
|
56,671 |
January
2009
|
1,450 | ||||||
|
British
pounds sterling
|
Buy
|
98,878 |
January
through February 2009
|
(3,335 | ) | |||||
|
South
African rand
|
Sell
|
2,175 |
January
2009
|
(41 | ) | |||||
|
Other
currencies
|
Sell
|
292 |
January
2009
|
3 | ||||||
|
Other
currencies
|
Buy
|
1,692 |
January
through May 2009
|
(62 | ) | |||||
|
Total
|
$ | 293,883 | $ | 3,378 | ||||||
|
·
|
Level
1—Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or
liabilities.
|
|
·
|
Level
2—Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly,
including quoted prices for similar assets or liabilities in active
markets; quoted prices for identical or similar assets or liabilities in
markets that are not active; inputs other than quoted prices that are
observable for the asset or liability (e.g., interest rates); and inputs
that are derived principally from or corroborated by observable market
data by correlation or other means.
|
|
·
|
Level
3—Inputs that are both significant to the fair value measurement and
unobservable.
|
|
Level
2 Fair Value Measurements as of December 31, 2009 and 2008
|
|||||||||
|
(In
thousands)
|
2009
|
2008
|
|||||||
|
Assets
|
|||||||||
|
Commodity
derivatives
|
$ | — | $ | 4,479 | |||||
|
Foreign
currency forward exchange contracts
|
2,187 | 7,332 | |||||||
|
Cross-currency
interest rate swap
|
7,357 | 49,433 | |||||||
|
Liabilities
|
|||||||||
|
Foreign
currency forward exchange contracts
|
604 | 3,954 | |||||||
|
14.
|
Information
by Segment and Geographic Area
|
|
Segment
Information
|
||||||||||||||||||||||||
|
Twelve
Months Ended December 31,
|
||||||||||||||||||||||||
|
2009
|
2008
|
2007
|
||||||||||||||||||||||
|
(In
thousands)
|
Sales
|
Operating
Income
(Loss)
|
Sales
|
Operating
Income
(Loss)
|
Sales
|
Operating
Income
(Loss)
|
||||||||||||||||||
|
Harsco
Infrastructure Segment
|
$ | 1,159,200 | $ | 68,437 | $ | 1,540,258 | $ | 185,382 | $ | 1,415,873 | $ | 183,752 | ||||||||||||
|
Harsco
Metals Segment
|
1,084,826 | 15,927 | 1,577,720 | 85,344 | 1,522,274 | 134,504 | ||||||||||||||||||
|
Harsco
Rail Segment (a)
|
306,016 | 56,542 | 277,595 | 36,406 | 232,402 | 23,050 | ||||||||||||||||||
|
Segment
Totals
|
2,550,042 | 140,906 | 3,395,573 | 307,132 | 3,170,549 | 341,306 | ||||||||||||||||||
|
All
Other Category - Harsco Minerals & Harsco Industrial
(a)
|
440,295 | 82,460 | 572,009 | 114,516 | 517,595 | 119,141 | ||||||||||||||||||
|
General
Corporate
|
240 | (4,710 | ) | 240 | (9,660 | ) | 16 | (2,642 | ) | |||||||||||||||
|
Total
|
$ | 2,990,577 | $ | 218,656 | $ | 3,967,822 | $ | 411,988 | $ | 3,688,160 | $ | 457,805 | ||||||||||||
|
(a)
|
Segment
information for prior periods has been reclassified to conform with the
current presentation. The Harsco Rail operating segment, which
was previously a component of the All Other Category, is now reported
separately.
|
|
Reconciliation
of Segment Operating Income to Consolidated Income From Continuing
Operations
Before
Income Taxes and Minority Interest
|
||||||||||||
|
Twelve
Months Ended December 31,
|
||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
|
Segment
operating income (a)
|
$ | 140,906 | $ | 307,132 | $ | 341,306 | ||||||
|
All
Other Category - Harsco Minerals
& Harsco Industrial (a)
|
82,460 | 114,516 | 119,141 | |||||||||
|
General
corporate expense
|
(4,710 | ) | (9,660 | ) | (2,642 | ) | ||||||
|
Operating
income from continuing operations
|
218,656 | 411,988 | 457,805 | |||||||||
|
Equity
in income of unconsolidated entities, net
|
504 | 901 | 1,049 | |||||||||
|
Interest
income
|
2,928 | 3,608 | 4,968 | |||||||||
|
Interest
expense
|
(62,746 | ) | (73,160 | ) | (81,383 | ) | ||||||
|
Income
from continuing operations before income taxes
|
$ | 159,342 | $ | 343,337 | $ | 382,439 | ||||||
|
(a)
|
Segment
information for prior periods has been reclassified to conform with the
current presentation. The Harsco Rail operating segment, which
was previously a component of the All Other Category, is now reported
separately.
|
|
Segment
Information
|
||||||||||||||||||||||||
|
Assets
|
Depreciation
and
Amortization
|
|||||||||||||||||||||||
|
Twelve
Months Ended December 31,
|
||||||||||||||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
(a)
|
||||||||||||||||||
|
Harsco
Infrastructure Segment
|
$ | 1,669,401 | $ | 1,607,171 | $ | 1,563,630 | $ | 101,465 | $ | 110,227 | $ | 90,477 | ||||||||||||
|
Harsco
Metals Segment
|
1,372,224 | 1,338,633 | 1,585,921 | 165,099 | 181,180 | 167,179 | ||||||||||||||||||
|
Harsco
Rail Segment (b)
|
208,877 | 207,926 | 204,278 | 11,106 | 12,320 | 15,206 | ||||||||||||||||||
|
Segment
Totals
|
3,250,502 | 3,153,730 | 3,353,829 | 277,670 | 303,727 | 272,862 | ||||||||||||||||||
|
All
Other Category - Harsco Minerals & Harsco Industrial
(b)
|
335,241 | 357,422 | 382,904 | 29,471 | 30,260 | 29,292 | ||||||||||||||||||
|
Corporate
|
53,497 | 51,818 | 168,697 | 4,390 | 3,962 | 3,019 | ||||||||||||||||||
|
Total
|
$ | 3,639,240 | $ | 3,562,970 | $ | 3,905,430 | $ | 311,531 | $ | 337,949 | $ | 305,173 | ||||||||||||
|
(a)
|
Excludes
Depreciation and Amortization for the Gas Technologies Segment in the
amounts of $1.2 million because this Segment was reclassified to
Discontinued Operations.
|
|
(b)
|
Segment
information for prior periods has been reclassified to conform with the
current presentation. The Harsco Rail operating segment, which
was previously a component of the All Other Category, is now reported
separately.
|
|
Capital
Expenditures
|
||||||||||||
|
Twelve
Months Ended December 31,
|
||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
|
Harsco
Infrastructure Segment
|
$ | 41,530 | $ | 226,559 | $ | 228,130 | ||||||
|
Harsco
Metals Segment
|
96,423 | 205,766 | 193,244 | |||||||||
|
Harsco
Rail Segment (a)
|
7,699 | 5,393 | 2,162 | |||||||||
|
Gas
Technologies Segment
|
— | — | 8,618 | |||||||||
|
Segment
Totals
|
145,652 | 437,718 | 432,154 | |||||||||
|
All
Other Category - Harsco Minerals
& Harsco Industrial (a)
|
9,013 | 17,632 | 9,101 | |||||||||
|
Corporate
|
10,655 | 2,267 | 2,328 | |||||||||
|
Total
|
$ | 165,320 | $ | 457,617 | $ | 443,583 | ||||||
|
(a)
|
Segment
information for prior periods has been reclassified to conform with the
current presentation. The Harsco Rail operating segment, which
was previously a component of the All Other Category, is now reported
separately.
|
|
Information
by Geographic Area (a)
|
||||||||||||||||||||||||
|
Revenues
from Unaffiliated Customers
|
Net
Property, Plant and Equipment
|
|||||||||||||||||||||||
|
Twelve
Months Ended December 31,
|
||||||||||||||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
(b)
|
2009
|
2008
|
2007
|
||||||||||||||||||
|
United
States
|
$ | 1,010,076 | $ | 1,260,967 | $ | 1,152,623 | $ | 326,952 | $ | 361,071 | $ | 364,950 | ||||||||||||
|
United
Kingdom
|
436,039 | 677,598 | 746,261 | 205,681 | 225,368 | 312,375 | ||||||||||||||||||
|
All
Other
|
1,544,462 | 2,029,257 | 1,789,276 | 978,168 | 896,394 | 857,889 | ||||||||||||||||||
|
Totals
including Corporate
|
$ | 2,990,577 | $ | 3,967,822 | $ | 3,688,160 | $ | 1,510,801 | $ | 1,482,833 | $ | 1,535,214 | ||||||||||||
|
(a)
|
Revenues
are attributed to individual countries based on the location of the
facility generating the revenue.
|
|
(b)
|
Excludes
the sales of the Gas Technologies Segment because the Segment was
reclassified to Discontinued
Operations.
|
|
Information
about Products and Services
|
||||||||||||
|
Revenues
from Unaffiliated Customers
|
||||||||||||
|
Twelve
Months Ended December 31,
|
||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
(a)
|
|||||||||
|
Product
Group
|
||||||||||||
|
Services
and equipment for infrastructure construction and
maintenance
|
$ | 1,159,200 | $ | 1,540,258 | $ | 1,415,873 | ||||||
|
On-site
services to metal producers
|
1,084,826 | 1,577,720 | 1,522,274 | |||||||||
|
Railway
track maintenance services and equipment
|
306,016 | 277,595 | 232,402 | |||||||||
|
Heat
exchangers
|
129,365 | 174,513 | 152,493 | |||||||||
|
Minerals
and recycling technologies (b)
|
104,028 | 127,140 | 123,240 | |||||||||
|
Industrial
grating products
|
92,903 | 149,168 | 130,919 | |||||||||
|
Industrial
abrasives and roofing granules
|
68,244 | 74,118 | 68,165 | |||||||||
|
Heat
transfer products
|
45,755 | 47,070 | 42,778 | |||||||||
|
General
Corporate
|
240 | 240 | 16 | |||||||||
|
Consolidated
Revenues
|
$ | 2,990,577 | $ | 3,967,822 | $ | 3,688,160 | ||||||
|
(a)
|
Excludes
the sales of the Gas Technologies Segment because the Segment was
reclassified to Discontinued
Operations.
|
|
(b)
|
Acquired
February 2007.
|
|
15.
|
Other
(Income) and Expenses
|
|
Other
(Income) and Expenses
|
|||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
|
||||||||||
|
Net
gains
|
$ | (8,047 | ) | $ | (15,923 | ) | $ | (5,591 | ) | ||||
|
Impaired
asset write-downs
|
1,494 | 12,588 | 903 | ||||||||||
|
Employee
termination benefit costs
|
10,931 | 19,027 | 6,552 | ||||||||||
|
Costs
to exit activities
|
4,297 | 5,269 | 1,278 | ||||||||||
|
Other
(income) expense
|
(1,114 | ) | 989 | 301 | |||||||||
|
Total
|
$ | 7,561 | $ | 21,950 | $ | 3,443 | |||||||
|
Net
Gains
|
|||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
|
||||||||||
|
Harsco
Infrastructure Segment
|
$ | (4,641 | ) | $ | (10,399 | ) | $ | (2,342 | ) | ||||
|
Harsco
Metals Segment
|
(3,427 | ) | (4,538 | ) | (3 | ) | |||||||
|
All
Other Category - Harsco Minerals
& Harsco Industrial (a)
|
21 | (986 | ) | (3,246 | ) | ||||||||
|
Total
|
$ | (8,047 | ) | $ | (15,923 | ) | $ | (5,591 | ) | ||||
|
(a)
|
Segment
information for prior periods has been reclassified to conform with the
current presentation. The Harsco Rail operating segment, which
was previously a component of the All Other Category, is not included
since there was no activity for this
segment.
|
|
Employee
Termination Benefit Costs
|
||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
|
Harsco
Infrastructure Segment
|
$ | 2,352 | $ | 5,317 | $ | 1,130 | ||||||
|
Harsco
Metals Segment
|
7,172 | 11,961 | 4,935 | |||||||||
|
Harsco
Rail Segment (a)
|
246 | 492 | 276 | |||||||||
|
All
Other Category - Harsco Minerals & Harsco Industrial
(a)
|
1,129 | 1,156 | 106 | |||||||||
|
Corporate
|
32 | 101 | 105 | |||||||||
|
Total
|
$ | 10,931 | $ | 19,027 | $ | 6,552 | ||||||
|
(a)
|
Segment
information for prior periods has been reclassified to conform with the
current presentation. The Harsco Rail operating segment, which
was previously a component of the All Other Category, is now reported
separately.
|
|
·
|
Costs
to terminate a contract that is not a capital lease are recognized when an
entity terminates the contract or when an entity ceases using the right
conveyed by the contract. This includes the costs to terminate
the contract before the end of its term or the costs that will continue to
be incurred under the contract for its remaining term without economic
benefit to the entity (e.g., lease run-out
costs).
|
|
·
|
Other
costs associated with exit or disposal activities (e.g., costs to
consolidate or close facilities and relocate equipment or employees) are
recognized and measured at their fair value in the period in which the
liability is incurred.
|
|
Costs
Associated with Exit or Disposal Activities
|
|||||||||||||
|
(In
thousands)
|
2009
|
2008
|
2007
|
||||||||||
|
Harsco
Infrastructure Segment
|
$ | 1,720 | $ | 1,724 | $ | 803 | |||||||
|
Harsco
Metals Segment
|
2,519 | 1,092 | 375 | ||||||||||
|
All
Other Category - Harsco Minerals & Harsco Industrial
(a)
|
58 | 5 | 100 | ||||||||||
|
Corporate
|
— | 2,448 | — | ||||||||||
|
Total
|
$ | 4,297 | $ | 5,269 | $ | 1,278 | |||||||
|
(a)
|
Segment
information for prior periods has been reclassified to conform with the
current presentation. The Harsco Rail operating segment, which
was previously a component of the All Other Category, is not included
since there was no activity for this
segment.
|
|
16.
|
Components
of Accumulated Other Comprehensive Income
(Loss)
|
|
Accumulated
Other Comprehensive Income (Loss) – Net of Tax
|
|||||||||
|
|
|||||||||
|
December
31
|
|||||||||
|
(In
thousands)
|
2009
|
2008
|
|||||||
|
Cumulative
foreign exchange translation adjustments
|
$ | 118,097 | $ | 21,295 | |||||
|
Fair
value of effective cash flow hedges
|
(9,040 | ) | 21,001 | ||||||
|
Pension
liability adjustments
|
(310,686 | ) | (250,536 | ) | |||||
|
Unrealized
loss on marketable securities
|
(55 | ) | (59 | ) | |||||
|
Total
Accumulated other comprehensive income (loss)
|
$ | (201,684 | ) | $ | (208,299 | ) | |||
|
17.
|
2008
Restructuring Program
|
|
2008
Restructuring Program
|
||||||||||||||||
|
(In
thousands)
|
Accrual
December
31
2008
|
Adjustments
to Previously
Recorded
Restructuring Charges (a)
|
Cash
Expenditures
|
Remaining
Accrual
December
31
2009
|
||||||||||||
|
Harsco
Infrastructure Segment
|
||||||||||||||||
|
Employee
termination benefit costs
|
$ | 1,806 | $ | 215 | $ | (1,899 | ) | $ | 122 | |||||||
|
Cost
to exit activities
|
1,963 | (1,136 | ) | (827 | ) | — | ||||||||||
|
Total
Harsco Infrastructure Segment
|
3,769 | (921 | ) | (2,726 | ) | 122 | ||||||||||
|
Harsco
Metals Segment
|
||||||||||||||||
|
Employee
termination benefit costs
|
9,888 | 945 | (7,516 | ) | 3,317 | |||||||||||
|
Cost
to exit activities
|
656 | (150 | ) | (320 | ) | 186 | ||||||||||
|
Total
Harsco Metals Segment
|
10,544 | 795 | (7,836 | ) | 3,503 | |||||||||||
|
All
Other Category - Harsco Minerals & Harsco Industrial
(b)
|
||||||||||||||||
|
Employee
termination benefit costs
|
531 | 215 | (746 | ) | — | |||||||||||
|
Total
All Other Category - Harsco Minerals & Harsco
Industrial
|
531 | 215 | (746 | ) | — | |||||||||||
|
Corporate
|
||||||||||||||||
|
Employee
termination benefit costs
|
113 | — | (113 | ) | — | |||||||||||
|
Cost
to exit activities
|
2,448 | (1,171 | ) | (1,277 | ) | — | ||||||||||
|
Total
Corporate
|
2,561 | (1,171 | ) | (1,390 | ) | — | ||||||||||
|
Total
|
$ | 17,405 | $ | (1,082 | ) | $ | (12,698 | ) | $ | 3,625 | ||||||
|
(a)
|
Adjustments
to previously recorded cost to exit activities resulted from changes in
facts and circumstances in the implementation of these
activities.
|
|
(b)
|
Segment
information for prior periods has been reclassified to conform with the
current presentation. The Harsco Rail operating segment, which
was previously a component of the All Other Category, is not included
since there was no activity for this
segment.
|
|
(In
millions, except per share amounts)
|
2009
|
|||||||||||||||
|
Quarterly
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
|
Sales
|
$ | 696.9 | $ | 777.0 | $ | 744.2 | $ | 772.5 | ||||||||
|
Gross
profit (a)
|
160.0 | 204.3 | 189.6 | 184.5 | ||||||||||||
|
Net
income attributable to Harsco Corporation
|
18.6 | 40.6 | 20.2 | (b) | 39.4 | |||||||||||
|
Basic
earnings per common share attributable to Harsco
Corporation
|
||||||||||||||||
|
Continuing
operations
|
$ | 0.25 | $ | 0.52 | $ | 0.40 | $ | 0.50 | ||||||||
|
Discontinued
operations (c)
|
(0.02 | ) | (0.02 | ) | (0.15 | ) | (0.01 | ) | ||||||||
|
Basic
earnings per common share attributable to Harsco Corporation common
stockholders
|
$ | 0.23 | $ | 0.51 | (d) | $ | 0.25 | (b) | $ | 0.49 | ||||||
|
Diluted
earnings per common share attributable to Harsco
Corporation
|
||||||||||||||||
|
Continuing
operations
|
$ | 0.25 | $ | 0.52 | $ | 0.40 | $ | 0.50 | ||||||||
|
Discontinued
operations (c)
|
(0.02 | ) | (0.02 | ) | (0.15 | ) | (0.01 | ) | ||||||||
|
Diluted
earnings per common share attributable to Harsco Corporation common
stockholders
|
$ | 0.23 | $ | 0.50 | $ | 0.25 | (b) | $ | 0.49 | |||||||
|
|
||||||||||||||||
|
(In
millions, except per share amounts)
|
2008
|
|||||||||||||||
|
Quarterly
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||
|
Sales
|
$ | 987.8 | $ | 1,099.6 | $ | 1,044.9 | $ | 835.5 | ||||||||
|
Gross
profit (a)
|
256.8 | 307.8 | 282.6 | 194.2 | ||||||||||||
|
Net
income attributable to Harsco Corporation
|
57.0 | 89.9 | 80.3 | 13.7 | (e) | |||||||||||
|
Basic
earnings per common share attributable to Harsco
Corporation
|
||||||||||||||||
|
Continuing
operations
|
$ | 0.67 | $ | 1.07 | $ | 1.00 | $ | 0.18 | ||||||||
|
Discontinued operations
(c)
|
0.00 | (0.01 | ) | (0.04 | ) | (0.01 | ) | |||||||||
|
Basic
earnings per common share attributable to Harsco Corporation common
stockholders
|
$ | 0.68 | (d) | $ | 1.07 | (d) | $ | 0.95 | (d) | $ | 0.17 | (e) | ||||
|
Diluted
earnings per common share attributable to Harsco
Corporation
|
||||||||||||||||
|
Continuing
operations
|
$ | 0.67 | $ | 1.07 | $ | 0.99 | $ | 0.18 | ||||||||
|
Discontinued operations
(c)
|
0.00 | (0.01 | ) | (0.04 | ) | (0.01 | ) | |||||||||
|
Diluted
earnings per common share attributable to Harsco Corporation common
stockholders
|
$ | 0.67 | $ | 1.06 | $ | 0.95 | $ | 0.17 | (e) | |||||||
|
(a)
|
Gross
profit is defined as Sales less costs and expenses associated directly
with or allocated to products sold or services
rendered.
|
|
(b)
|
In
the third quarter of 2009, the Company recorded a net non-cash charge of
$0.11 per basic and diluted share for adjustments related principally to
the improper recording of revenue by one business unit in one country,
over a period of approximately three years. Previously issued
financial statements were not revised based on the Company’s determination
that the cumulative effect was not material to the full-year 2009 results
or previously issued annual or quarterly financial
statements.
|
|
(c)
|
Discontinued
operations related principally to the Gas Technologies Segment which was
sold in the fourth quarter of 2007. In the third quarter of
2009, the Company recorded an after-tax loss of $11.8 million, or $0.15
per basic and diluted share, related to the settlement of working capital
adjustment claims and other costs associated with arbitration
proceedings.
|
|
(d)
|
Does
not total due to rounding.
|
|
(e)
|
In
the fourth quarter of 2008, the Company recorded after–tax restructuring
charges of $23.1 million, or $0.28 per basic and diluted
share.
|
|
Market Price Per Share
|
Dividends
Declared
|
||||||||||||
|
High
|
Low
|
Per
Share
|
|||||||||||
|
2009
|
|||||||||||||
|
First
Quarter
|
$ | 31.65 | $ | 16.90 | $ | 0.2000 | |||||||
|
Second
Quarter
|
32.07 | 21.39 | 0.2000 | ||||||||||
|
Third
Quarter
|
36.33 | 26.69 | 0.2000 | ||||||||||
|
Fourth
Quarter
|
37.65 | 29.38 | 0.2050 | ||||||||||
|
2008
|
|||||||||||||
|
First
Quarter
|
$ | 64.50 | $ | 46.10 | $ | 0.1950 | |||||||
|
Second
Quarter
|
64.75 | 53.75 | 0.1950 | ||||||||||
|
Third
Quarter
|
56.32 | 33.50 | 0.1950 | ||||||||||
|
Fourth
Quarter
|
37.41 | 17.55 | 0.1950 | ||||||||||
|
Changes
In and Disagreements with Accountants on Accounting and Financial
Disclosures.
|
|
Item
9A.
|
Controls
and Procedures.
|
|
Item
9B.
|
Other
Information.
|
|
·
|
Compensation
Discussion and Analysis,
|
|
·
|
Compensation
Committee Report,
|
|
·
|
Executive
Compensation,
|
|
·
|
Non-Employee
Director Compensation, and
|
|
·
|
Compensation
Committee Interlocks and Insider
Participation.
|
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
|
|
Equity
Compensation Plan Information
|
||||||||||||
|
Column
(a)
|
Column
(b)
|
Column
(c)
|
||||||||||
|
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in Column
(a))
|
|||||||||
|
Equity
compensation plans approved by security holders (1)
|
619,461 | $ | 22.62 | (2) | 2,433,952 | |||||||
|
Equity
compensation plans not approved by security holders
|
— | — | — | |||||||||
|
Total
|
619,461 | $ | 22.62 | 2,433,952 | ||||||||
|
(1)
|
Plans
include the 1995 Executive Incentive Compensation Plan, as amended, and
the 1995 Non-Employee Directors’ Stock Plan, as
amended.
|
|
(2)
|
Includes
the average of the weighted average exercise price for stock options and
the weighted average grant-date fair value for the restricted stock
units.
|
|
Item
14.
|
Principal
Accounting Fees and Services.
|
|
(a)
|
1. The
Consolidated Financial Statements are listed in the index to Item 8,
"Financial Statements and Supplementary Data," on page
51.
|
|
(a)
|
2. The
following financial statement schedule should be read in conjunction with
the Consolidated Financial Statements (see Item 8, “Financial Statements
and Supplementary Data”):
|
|
Page
|
|
|
Schedule II - Valuation and
Qualifying Accounts for the years 2009, 2008 and 2007
|
109
|
|
|
Condensed
financial information of the registrant is omitted since "restricted net
assets" of consolidated subsidiaries does not exceed 25% of consolidated
net assets.
|
|
|
Financial
statements of 50% or less owned unconsolidated companies are not submitted
inasmuch as (1) the registrant's investment in and advances to such
companies do not exceed 20% of the total consolidated assets, (2) the
registrant's proportionate share of the total assets of such companies
does not exceed 20% of the total consolidated assets, and (3) the
registrant's equity in the income from continuing operations before income
taxes of such companies does not exceed 20% of the total consolidated
income from continuing operations before income
taxes.
|
|
COLUMN A
|
COLUMN B
|
COLUMN C
Additions
|
COLUMN D
Additions (Deductions)
|
COLUMN E
|
||||||||||||||||
|
Description
|
Balance
at Beginning of Period
|
Charged
to Cost and Expenses
|
Due
to Currency Translation Adjustments
|
Other
|
Balance
at End of Period
|
|||||||||||||||
|
For
the year 2009:
|
||||||||||||||||||||
|
Allowance
for Doubtful Accounts
|
$ | 27,853 | $ | 9,318 | $ | 694 | $ | (13,370 | ) (a) | $ | 24,495 | |||||||||
|
Deferred
Tax Assets – Valuation Allowance
|
$ | 21,459 | $ | (980 | ) | $ | (75 | ) | $ | 2,340 | $ | 22,744 | ||||||||
|
For
the year 2008:
|
||||||||||||||||||||
|
Allowance
for Doubtful Accounts
|
$ | 25,580 | $ | 12,493 | $ | (2,666 | ) | $ | (7,554 | ) (a) | $ | 27,853 | ||||||||
|
Deferred
Tax Assets – Valuation Allowance
|
$ | 15,318 | $ | 241 | $ | (804 | ) | $ | 6,704 | (b) | $ | 21,459 | ||||||||
|
For
the year 2007:
|
||||||||||||||||||||
|
Allowance
for Doubtful Accounts
|
$ | 25,351 | $ | 7,842 | $ | 992 | $ | (8,605 | ) (a) | $ | 25,580 | |||||||||
|
Deferred
Tax Assets – Valuation Allowance
|
$ | 13,892 | $ | (353 | ) | $ | 372 | $ | 1,407 | $ | 15,318 | |||||||||
|
(a)
|
Includes
principally the utilization of previously reserved
amounts.
|
|
(b)
|
Includes
principally valuation allowance established against the deferred tax asset
related to a net investment hedge.
|
|
Exhibit
Number
|
Data Required
|
Location in Form 10-K
|
|
2(a)
|
Share
Purchase Agreement between Sun HB Holdings, LLC, Boca Raton, Florida,
United States of America and Harsco Corporation, Camp Hill, Pennsylvania,
United States of America dated September 20, 2005 regarding the sale and
purchase of the issued share capital of Hünnebeck Group GmbH, Ratingen,
Germany.
|
Exhibit
to Form 10-Q for the period ended September 30, 2005
|
|
2(b)
|
Agreement,
dated as of December 29, 2005, by and among the Harsco Corporation (for
itself and as agent for each of MultiServ France SA, Harsco Europa BV and
Harsco Investment Limited), Brambles U.K. Limited, a company incorporated
under the laws of England and Wales, Brambles France SAS, a company
incorporated under the laws of France, Brambles USA, Inc., a Delaware
corporation, Brambles Holdings Europe B.V., a company incorporated under
the laws of the Netherlands, and Brambles Industries Limited, a company
incorporated under the laws of Australia. In accordance with
Item 601(b)(2) of Regulation S-K, the registrant hereby agrees to furnish
supplementally a copy of any omitted schedule to the Commission upon
request. Portions of Exhibit 2(a) have been omitted pursuant to
a request for confidential treatment. The omitted portions have
been filed separately with the Securities and Exchange
Commission.
|
Exhibit
volume, 2005 Form 10-K
|
|
2(c)
|
Stock
Purchase Agreement among Excell Materials, Inc., the Stockholders of
Excell Materials, Inc. and Harsco Corporation dated as of January 4,
2007.
|
Exhibit
volume, 2006 Form 10-K
|
|
2(d)
|
Asset
and Stock Purchase Agreement By and Between Harsco Corporation and
Taylor-Wharton International LLC dated as of November 28,
2007
|
Exhibit
volume, 2007 Form 10-K
|
|
3(a)
|
Restated
Certificate of Incorporation as amended April 24,
1990
|
Exhibit
volume, 1990 Form 10-K
|
|
3(b)
|
Certificate
of Amendment of Restated Certificate of Incorporation filed June 3,
1997
|
Exhibit
volume, 1999 Form 10-K
|
|
3(c)
|
Certificate
of Designation filed September 25, 1997
|
Exhibit
volume, 1997 Form 10-K
|
|
3(d)
|
By-laws
as amended January 23, 2007
|
Exhibit
to Form 8-K dated January 23, 2007
|
|
3(e)
|
Certificate
of Amendment of Restated Certificate of Incorporation filed April 26,
2005
|
Proxy
Statement dated March 22, 2005 on Appendix A pages A-1 through
A-2
|
|
Exhibit
Number
|
Data
Required
|
Location
in Form 10-K
|
|
4(a)
|
Harsco
Corporation Rights Agreement dated as of September 25, 2007, with Chase
Mellon Shareholder Services L.L.C.
|
Incorporated
by reference to Form 8-A, filed September 26, 2007
|
|
4(b)
|
Registration
of Preferred Stock Purchase Rights
|
Incorporated
by reference to Form 8-A dated October 2, 1987
|
|
4(c)
|
Current
Report on dividend distribution of Preferred Stock Purchase
Rights
|
Incorporated
by reference to Form 8-K dated September 25, 2007
|
|
4(f)
|
Debt
and Equity Securities Registered
|
Incorporated
by reference to Form S-3, Registration No. 33-56885 dated December 15,
1994, effective date January 12, 1995
|
|
4(g)
|
Harsco
Finance B. V. £200 million, 7.25% Guaranteed Notes due
2010
|
Exhibit
to Form 10-Q for the period ended September 30, 2000
|
|
4(h)
(i)
|
Indenture,
dated as of May 1, 1985, by and between Harsco Corporation and The Chase
Manhattan Bank (National Association), as trustee (incorporated herein by
reference to Exhibit 4(d) to the Registration Statement on Form S-3, filed
by Harsco Corporation on August 23, 1991 (Reg. No.
33-42389))
|
Exhibit
to Form 8-K dated September 8, 2003
|
|
4(h)
(ii)
|
First
Supplemental Indenture, dated as of April 12, 1995, by and among Harsco
Corporation, The Chase Manhattan Bank (National Association), as resigning
trustee, and Chemical Bank, as successor trustee
|
Exhibit
to Form 8-K dated September 8, 2003
|
|
4(h)
(iii)
|
Form
of Second Supplemental Indenture, by and between Harsco Corporation and
JPMorgan Chase Bank, as Trustee
|
Exhibit
to Form 8-K dated September 8, 2003
|
|
4(h)
(iv)
|
Second
Supplemental Indenture, dated as of September 12, 2003, by and
between Harsco Corporation and J.P. Morgan Chase Bank, as
Trustee
|
Exhibit
to Form 10-Q for the period ended September 30, 2003
|
|
4(i)
(i)
|
Form
of 5.125% Global Senior Note due September 15, 2013
|
Exhibit
to Form 8-K dated September 8, 2003
|
|
4(i)
(ii)
|
5.125%
2003 Notes due September 15, 2013 described in Prospectus Supplement dated
September 8, 2003 to Form S-3 Registration under Rule 415 dated
December 15, 1994
|
Incorporated
by reference to the Prospectus Supplement dated September 8, 2003 to Form
S-3, Registration No. 33-56885 dated December 15,
1994
|
|
Exhibit
Number
|
Data
Required
|
Location
in Form 10-K
|
|
4(j)
|
5.75%
Senior Notes due 2018 described in Prospectus Supplement dated May 12,
2008 to Form S-3ASR Registration dated May 12, 2008
|
Incorporated
by reference to the Prospectus Supplement dated May 12, 2008 to Form S-3,
Registration No. 333-150825 dated May 12, 2008
|
|
Material
Contracts - Credit and Underwriting Agreements
|
||
|
10(a)
(i)
|
$50,000,000
Facility agreement dated December 15, 2000
|
Exhibit
volume, 2000 Form 10-K
|
|
10(a)
(ii)
|
Agreement
extending term of $50,000,000 Facility agreement dated December 15,
2000
|
Exhibit
volume, 2001 Form 10-K
|
|
10(a)
(iii)
|
Agreement
amending term and amount of $50,000,000 Facility agreement dated December
15, 2000
|
Exhibit
volume, 2002 Form 10-K
|
|
10(a)
(iv)
|
Agreement
extending term of $50,000,000 Facility agreement dated December 15,
2000
|
Exhibit
volume, 2003 Form 10-K
|
|
10(a)
(v)
|
Agreement
extending term of $50,000,000 Facility agreement dated December 15,
2000
|
Exhibit
to Form 8-K dated January 25, 2005
|
|
10(a)
(vi)
|
Agreement
extending term of $50,000,000 Facility agreement dated December 15,
2000
|
Exhibit
volume, 2005 Form 10-K
|
|
10(a)
(vii)
|
Agreement
extending term of $50,000,000 Facility agreement dated December 15,
2000
|
Exhibit
to Form 8-K dated December 22, 2006
|
|
10(a)
(viii)
|
Agreement
extending term of $50,000,000 Facility agreement dated December 15,
2000
|
Exhibit
to Form 8-K dated February 4, 2008
|
|
10(a)
(ix)
|
Agreement
extending term of Facility agreement dated December 15, 2000 and reducing
the amount to $30,000,000
|
Exhibit
to Form 8-K dated December 22, 2008
|
|
10(a)
(x)
|
Agreement
extending term of Facility agreement dated December 15, 2000 in the amount
of $30,000,000
|
Exhibit
volume, 2009 Form 10-K
|
|
10(b)
|
Commercial
Paper Dealer Agreement dated September 24, 2003, between ING Belgium SA/NV
and Harsco Finance B.V.
|
Exhibit
volume, 2003 Form 10-K
|
|
Exhibit
Number
|
Data
Required
|
Location
in Form 10-K
|
|
10(b)(i)
|
Commercial
Paper Dealer Agreement dated September 24, 2003, between ING Belgium SA/NV
and Harsco Finance B.V. – Supplement No. 1 to the Dealer
Agreement
|
Exhibit
to Form 8-K dated November 8, 2005
|
|
10(c)
|
Commercial
Paper Payment Agency Agreement Dated October 1, 2000, between Salomon
Smith Barney Inc. and Harsco Corporation
|
Exhibit
volume, 2000 Form 10-K
|
|
10(e)
|
Issuing
and Paying Agency Agreement, Dated October 12, 1994, between Morgan
Guaranty Trust Company of New York and Harsco
Corporation
|
Exhibit
volume, 1994 Form 10-K
|
|
10(f)
|
364-Day
Credit Agreement
|
Exhibit
to Form 10-Q for the period ended
September
30, 2008
|
|
10(g)
|
Three-Year
Credit Agreement
|
Exhibit
to Form 8-K dated December 23, 2009
|
|
10(i)
|
Commercial
Paper Dealer Agreement dated June 7, 2001, between Citibank International
plc, National Westminster Bank plc, The Royal Bank of Scotland plc and
Harsco Finance B.V.
|
Exhibit
to Form 10-Q for the period ended
June
30, 2001
|
|
Material
Contracts - Management Contracts and Compensatory Plans
|
||
|
10(d)
|
Form
of Change in Control Severance Agreement (CEO)
|
Exhibit
volume, 2008 Form 10-K
|
|
10(k)
|
Harsco
Corporation Supplemental Retirement Benefit Plan as amended and restated
January 1, 2009
|
Exhibit
volume, 2008 Form 10-K
|
|
10(l)
|
Trust
Agreement between Harsco Corporation and Dauphin Deposit Bank and Trust
Company dated July 1, 1987 relating to the Supplemental Retirement Benefit
Plan
|
Exhibit
volume, 1987 Form 10-K
|
|
10(m)
|
Harsco
Corporation Supplemental Executive Retirement Plan as
amended
|
Exhibit
volume, 1991 Form 10-K
|
|
10(n)
|
Trust
Agreement between Harsco Corporation and Dauphin Deposit Bank and Trust
Company dated November 22, 1988 relating to the Supplemental Executive
Retirement Plan
|
Exhibit
volume, 1988 Form 10-K
|
|
10(o)
(i)
|
Harsco
Corporation 1995 Executive Incentive Compensation Plan As Amended and
Restated
|
Proxy
Statement dated March 23, 2004 on Exhibit B pages B-1 through
B-15
|
|
Exhibit
Number
|
Data
Required
|
Location
in Form 10-K
|
|
10(o)
(ii)
|
Amendment
No. 1 to the Harsco Corporation 1995 Executive Incentive Compensation
Plan
|
Exhibit
volume, 2008 Form 10-K
|
|
10(p)
|
Authorization,
Terms and Conditions of the Annual Incentive Awards, as Amended and
Restated April 27, 2004, under the 1995 Executive Incentive Compensation
Plan
|
Exhibit
to Form 8-K dated March 23, 2006
|
|
10(q)
|
Authorization,
Terms and Conditions of Other Performance Awards under the Harsco
Corporation 1995 Executive Incentive Compensation Plan (as amended and
restated)
|
Exhibit
to Form 8-K dated March 22, 2007
|
|
10(r)
|
Special
Supplemental Retirement Benefit Agreement for
D. C. Hathaway
|
Exhibit
Volume, 1988 Form 10-K
|
|
10(s)
|
Harsco
Corporation Form of Restricted Stock Units Agreement
(Directors)
|
Exhibit
to Form 8-K dated April 26, 2005
|
|
10(u)
|
Harsco
Corporation Deferred Compensation Plan for Non-Employee Directors (as
Amended and Restated as of December 31, 2008)
|
Exhibit
Volume, 2008 Form 10-K
|
|
10(v)
(i)
|
Harsco
Corporation 1995 Non-Employee Directors' Stock Plan As Amended and
Restated at January 27, 2004
|
Proxy
Statement dated March 23, 2004 on Exhibit A pages A-1 through
A-9
|
|
10(v)
(ii)
|
Amendment
No. 1 to the Harsco Corporation 1995 Non-Employee Directors’ Stock
Plan
|
Exhibit
volume, 2008 Form 10-K
|
|
10(w)
|
Restricted
Stock Units Agreement for International Employees
|
Exhibit
volume, 2007 Form 10-K
|
|
10(x)
|
Settlement
and Consulting Agreement
|
Exhibit
to Form 10-Q for the period ended March 31, 2003
|
|
10(y)
|
Restricted
Stock Units Agreement
|
Exhibit
to Form 8-K dated January 23, 2007
|
|
10(aa)
|
Harsco
Non-Qualified Retirement Savings & Investment Plan Part B – Amendment
and Restatement as of January 1, 2009
|
Exhibit
volume, 2008 Form 10-K
|
|
10(ab)
|
Form
of Change in Control Severance Agreement (Non-CEO)
|
Exhibit
volume, 2008 Form 10-K
|
|
Exhibit
Number
|
Data
Required
|
Location
in Form 10-K
|
|
Director
Indemnity Agreements -
|
||
|
10(t)
|
A.
J. Sordoni, III
|
Exhibit
volume, 1989 Form 10-K Uniform agreement, same as shown for J. J.
Burdge
|
|
"
|
R.
C. Wilburn
|
" "
|
|
"
|
J.
I. Scheiner
|
" "
|
|
"
|
D.
H. Pierce
|
" "
|
|
"
|
K.
G. Eddy
|
Exhibit
to Form 8-K dated August 27, 2004
|
|
"
|
T.
D. Growcock
|
Exhibit
to Form 8-K dated August 27, 2004, same as shown for K. G.
Eddy
|
|
"
|
H.W.
Knueppel
|
" "
|
|
"
|
S.E.
Graham
|
" "
|
|
12
|
Computation
of Ratios of Earnings to Fixed Charges
|
Exhibit
volume, 2009 Form 10-K
|
|
21
|
Subsidiaries
of the Registrant
|
Exhibit
volume, 2009 Form 10-K
|
|
23
|
Consent
of Independent Registered Public Accounting Firm
|
Exhibit
volume, 2009 Form 10-K
|
|
31(a)
|
Certification
Pursuant to Rule 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 (Chief Executive
Officer)
|
Exhibit
volume, 2009 Form 10-K
|
|
31(b)
|
Certification
Pursuant to Rule 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 (Chief Financial
Officer)
|
Exhibit
volume, 2009 Form 10-K
|
|
32
|
Certifications
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief
Financial Officer)
|
Exhibit
volume, 2009 Form 10-K
|
|
HARSCO
CORPORATION
|
|||
|
(Registrant)
|
|||
|
Date
|
2-23-2010
|
/S/
Stephen J. Schnoor
|
|
|
Stephen
J. Schnoor
|
|||
|
Senior
Vice President and
Chief
Financial Officer
|
|
Signature
|
Capacity
|
Date
|
|
|
/S/
|
Salvatore
D. Fazzolari
|
Chairman,
Chief Executive Officer
|
2-23-2010
|
|
(Salvatore
D. Fazzolari)
|
and
Director
|
||
|
/S/
|
Geoffrey
D. H. Butler
|
President
Harsco Corporation,
|
2-23-2010
|
|
(Geoffrey
D. H. Butler)
|
CEO
Harsco Infrastructure and Director
|
||
|
/S/
|
Stephen
J. Schnoor
|
Senior
Vice President and
|
2-23-2010
|
|
(Stephen
J. Schnoor)
|
Chief
Financial Officer
(Principal
Financial Officer)
|
||
|
/S/
|
Richard
M. Wagner
|
Vice
President and Controller
|
2-23-2010
|
|
(Richard
M. Wagner)
|
(Principal
Accounting Officer)
|
||
|
/S/
|
Kathy
G. Eddy
|
Director
|
2-23-2010
|
|
(Kathy
G. Eddy)
|
|||
|
/S/
|
Stuart
E. Graham
|
Director
|
2-23-2010
|
|
(Stuart
E. Graham)
|
|||
|
/S/
|
Terry
D. Growcock
|
Director
|
2-23-2010
|
|
(Terry
D. Growcock)
|
|||
|
/S/
|
Henry
W. Knueppel
|
Director
|
2-23-2010
|
|
(Henry
W. Knueppel)
|
|||
|
/S/
|
D.
Howard Pierce
|
Director
|
2-23-2010
|
|
(D.
Howard Pierce)
|
|||
|
/S/
|
James
I. Scheiner
|
Director
|
2-23-2010
|
|
(James
I. Scheiner)
|
|||
|
/S/
|
Andrew
J. Sordoni, III
|
Director
|
2-23-2010
|
|
(Andrew
J. Sordoni, III)
|
|||
|
/S/
|
Dr.
Robert C. Wilburn
|
Director
|
2-23-2010
|
|
(Dr.
Robert C. Wilburn)
|
|||