Harsco Corporation Reports Third Quarter Earnings in Line With Consensus Estimates; EPS Up 20%


HARRISBURG, Pa., Oct. 18, 2001 (PRIMEZONE) -- Worldwide industrial services and products company Harsco Corporation (NYSE:HSC) today reported third quarter 2001 diluted earnings per share of $0.67, in line with current consensus estimates and, together with third quarter net income of $26.8 million, up 20 percent over the third quarter of 2000. Revenues in the quarter were $531 million, compared with $542 million in the prior year quarter. Adjusting for the effects of negative foreign exchange translation, revenues would have been $538 million. Negative foreign exchange translation also lowered pre-tax income by approximately $0.7 million, or just over $0.01 per share. Nonrecurring costs in the third quarter of 2001 were primarily offset by one-time gains.

"As has been the case all year, strong results from our global infrastructure services businesses and solid performance from our international mill services operations more than offset the depressed domestic manufacturing sector and mill services business," said Harsco Chairman, President and Chief Executive Officer, Derek C. Hathaway.

For the first nine months of 2001, diluted earnings per share before nonrecurring costs and special charges were $1.74. Income was $69.7 million. Pre-tax, net nonrecurring costs and special charges totaled $12.0 million, or $0.20 per share. Including these charges, net income for the first nine months was $61.7 million, or $1.54 per share. Revenues totaled a record $1.59 billion, up 8.5 percent over the first nine months of 2000. Without the negative effect of foreign exchange translation, revenues would have been up approximately 10.8 percent. Negative foreign exchange translation also lowered pre-tax income by approximately $4.2 million, or $0.07 per share.

"For the remainder of this year and into the early quarters of next, we expect to encounter many of the same economic and market challenges that other companies are facing," Mr. Hathaway said. "In order to position the Company for long-term earnings growth, we have taken more than $19 million in nonrecurring costs and special charges, partially offset by approximately $7 million in one-time gains, through the first nine months of this year. We anticipate further nonrecurring costs and special charges in the fourth quarter. We remain confident that our strategic decisions to gain market leadership, significantly rebalance the business toward industrial services, expand our focus on the global marketplace and maintain our strong cash flows will enable us to continue to make satisfactory progress toward our long-term growth objectives and further enhance stockholder value."

Third Quarter Business Segment Review

Infrastructure -- The Infrastructure segment posted substantial improvement, with operating income increasing 82 percent and sales increasing 6 percent over last year's third quarter, which included a one-time, $3 million asset write-down within the railway track maintenance business. Adjusting for this write-down and a $1.3 million nonrecurring gain in 2001, third quarter results were still up a substantial 41 percent over last year. Operating margins increased 260 basis points to 10.2 percent, up from last year's 7.6 percent, adjusting for the nonrecurring items referred to above. The improved performance of the Infrastructure segment was led by the continuing earnings progress of the Company's SGB international access equipment business, acquired last year, and improvements in the domestic scaffolding and railway track maintenance businesses.

Mill Services -- Solid performance from the international mill services and abrasives and roofing granules businesses offset lower results from North American mill services due to the continuing softness in the domestic steel industry. Sales declined slightly from $188 million to $184 million, with foreign exchange translation lowering sales by approximately $7 million. Operating income, excluding nonrecurring costs and special charges of $0.9 million, was even with last year's results. Negative foreign exchange translation lowered income in the quarter by approximately $1 million. Margins improved by 20 basis points to 12.2 percent, before nonrecurring costs and special charges.

Gas and Fluid Control -- As with most domestic manufacturing operations, this segment continues to be negatively affected by the difficult U.S. manufacturing environment. Sales for the quarter declined by 14 percent and operating income was down 59 percent. Margins declined to 4.6 percent from 9.7 percent in last year's third quarter.

Financial Position

During the quarter, the debt to total capital ratio was reduced by 100 basis points from the previous quarter to 54.5 percent. Cash from operations totaled $66 million, down from $69 million in last year's third quarter. Capital expenditures in the third quarter were $39 million compared with $54 million in the third quarter last year, a 28 percent reduction.

In the fourth quarter, the Company expects that lower quarter-over-quarter capital expenditures, improved working capital management from initiatives currently being implemented, and seasonally strong fourth quarter cash flows will provide significant contribution to its debt reduction efforts. In addition, the Company has generated approximately $25 million in cash from the sale of non-core assets this year, and has targeted an additional $15 million for the fourth quarter, consistent with its objectives for realizing $40 million in cash from asset sales in 2001.

The Company will be adopting the FASB's Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," with the beginning of its 2002 fiscal year in January. While the Company will benefit from the provision that goodwill will no longer be amortized, this benefit will be at least partially offset by anticipated increases in pension expenses and insurance costs in 2002 resulting from the current global economic environment. The Company expects to provide further guidance on this area during the fourth quarter.

Harsco has scheduled a conference call for 2 p.m. ET this afternoon, October 18, to discuss its third quarter 2001 results and respond to questions from the investment community. The conference call will be broadcast live through the Harsco Corporation Web site at www.harsco.com and through www.streetevents.com. The call will also be available by telephone by dialing 800-611-4920, or 706-634-5923 from outside the United States and Canada. Listeners are asked to dial in at least five minutes prior to the call. A replay of the call will be available via telephone from 5 p.m. ET today until 5 p.m. ET Friday, October 26. The replay dial-in number is 800-642-1687, or 706-645-9291 from outside the United States and Canada. Enter Conference ID number 1956509. The replay will also be available through the Web sites noted above.

Harsco Corporation is a $2 billion worldwide industrial services and products company serving the infrastructure development, steel, railway transportation, gas and energy industries. The company employs more than 20,000 people in 40 countries. Additional information about Harsco can be found at www.harsco.com.

Forward-Looking Statements

The nature of Harsco's operations and the many countries in which it operates subject it to changing economic, competitive, regulatory and technological conditions, risks and uncertainties. In accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Harsco provides the following cautionary remarks regarding important factors which, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein. These include statements about our management confidence and strategies for performance; expectations for new and existing products, technologies, and opportunities; and expectations for market segment and industry growth, sales, earnings and other financial performance measures.

These factors include, but are not limited to: (1) changes in the worldwide business environment in which the Company operates, including general economic conditions, particularly in the mill service, infrastructure and industrial gas markets; currency exchange rates; interest rates; and capital costs; (2) changes in governmental laws and regulations, including taxes; (3) market and competitive changes, including pricing pressures, market demand and acceptance for new products, services, and technologies; (4) effects of unstable governments and business conditions in emerging economies; and (5) other risk factors listed from time to time in the Company's SEC reports. The Company does not intend to update this information and disclaims any legal liability to the contrary.


 Harsco Corporation
 CONSOLIDATED STATEMENT OF INCOME (Unaudited)
   
                             Three Months Ended   Nine Months Ended
 (In thousands, except           September 30         September 30 
   per share amounts)          2001       2000       2001       2000
 ----------------------     ---------  ---------  ---------  ---------
 Revenues:
  Service sales (a)        $ 331,318  $ 331,382  $ 988,567  $ 818,959
  Product sales (a)          199,535    210,081    600,710    645,534
  Other                           18        404        576        843
                           ---------  ---------  ---------  ---------
   Total revenues            530,871    541,867  1,589,853  1,465,336
                           ---------  ---------  ---------  ---------

 Costs and expenses:
  Cost of services sold (a)  239,028    241,844    714,306    611,391
  Cost of products sold (a)  162,323    164,356    491,375    513,716
  Selling, general, and
   administrative expenses    76,004     84,593    239,307    194,652
  Research and
   development expenses        1,417      1,338      2,895      4,426
  Other expense (income)         550      1,004      4,592        728
                           ---------  ---------  ---------  ---------
   Total costs and expenses  479,322    493,135  1,452,475  1,324,913
                           ---------  ---------  ---------  ---------

   Operating income           51,549     48,732    137,378    140,423

 Equity in income (loss)
  of affiliates, net             225       (582)    (1,823)    (1,020)
 Interest income               2,133      1,611      4,552      4,061
 Interest expense            (13,052)   (16,653)   (41,870)   (32,870)
                           ---------  ---------  ---------  ---------

  Income before income taxes
   and minority interest      40,855     33,108     98,237    110,594

 Provision for income taxes   12,825      9,376     32,909     36,496
                           ---------  ---------  ---------  ---------

   Income before
     minority interest        28,030     23,732     65,328     74,098

 Minority interest
   in net income               1,194      1,420      3,646      3,353
                           ---------  ---------  ---------  ---------
 Net income                $  26,836  $  22,312  $  61,682  $  70,745
                           =========  =========  =========  =========

 Average shares of
  common stock outstanding    39,898     39,992     39,845     39,990
                           =========  =========  =========  =========
 Basic earnings
  per common share         $     .67  $     .56  $    1.55  $    1.77
                           =========  =========  =========  =========

 Diluted average shares of
  common shares outstanding   40,153     40,073     39,990     40,069

                           =========  =========  =========  =========
 Diluted earnings
  per common share         $     .67  $     .56  $    1.54  $    1.77
                           =========  =========  =========  =========

 (a) In order to comply with Emerging Issues Task Force (EITF) Issue
     No. 00-10, all shipping and handling costs have been classified
     as cost of services sold or as cost of products sold rather than
     as reductions of sales. The income statements for the three
     months and nine months ended September 30, 2000 have been
     reclassified to reflect this change. The reclassifications have
     no effect on previously reported operating income or net income
     for the three months and nine months ended September 30, 2000.


 Harsco Corporation
 CONSOLIDATED BALANCE SHEET (Unaudited)
                                          September 30    December 31
 (In thousands)                                 2001          2000
 -----------------------------------       -----------    -----------
 ASSETS
 Current assets:
  Cash and cash equivalents                $    55,828    $    56,422
  Receivables                                  458,336        413,654
  Inventories                                  194,618        199,117
  Other current assets                          59,200         57,222
                                           -----------    -----------
   Total current assets                        767,982        726,415
                                           -----------    -----------
 Property, plant and equipment, net            864,658        896,781
 Cost in excess of net assets
  of businesses acquired, net                  360,646        369,199
 Other assets                                  185,849        188,553
                                           ===========    ===========
   Total assets                            $ 2,179,135    $ 2,180,948
                                           ===========    ===========

 LIABILITIES
 Current liabilities:
  Notes payable and current maturities     $    34,764    $    62,295
  Accounts payable                             159,597        192,148
  Accrued compensation                          44,353         46,591
  Income taxes                                  46,620         34,783
  Other current liabilities                    203,350        200,362
                                           -----------    -----------
   Total current liabilities                   488,684        536,179
                                           -----------    -----------
 Long-term debt                                793,364        774,450
 Deferred income taxes                         100,602         88,480
 Other liabilities                             106,310        107,660
                                           -----------    -----------
   Total liabilities                         1,488,960      1,506,769
                                           -----------    -----------

 SHAREHOLDERS' EQUITY
 Common stock and
   additional paid-in capital                  177,040        172,887
 Accumulated other
   comprehensive income (expense)             (130,524)      (109,377)
 Retained earnings                           1,247,633      1,214,659
 Treasury stock                               (603,974)      (603,990)
                                           -----------    -----------
   Total shareholders' equity                  690,175        674,179
                                           ===========    ===========
   Total liabilities
     and shareholders' equity              $ 2,179,135    $ 2,180,948
                                           ===========    ===========


 Harsco Corporation
 CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

                              Three Months Ended   Nine Months Ended
                                September 30          September 30
 (In thousands)               2001       2000       2001      2000
 ----------------------    ---------  ---------  ---------  ---------

 Cash flows from
 operating activities:     
  Net income               $  26,836  $  22,312  $  61,682  $  70,745
  Adjustments to reconcile
   net income to net cash
   provided by
   operating activities: 
    Depreciation              40,273     38,792    119,781    103,443
    Amortization               4,360      5,351     13,078     12,104
    Equity in (income) loss
     of affiliates, net         (225)       582      1,823      1,020
    Dividends or
     distributions
     from affiliates             737        115        845        702
    Deferred income taxes      7,311      4,148     12,154     13,342
    Other, net                   357      3,205      4,972      2,654
    Changes in assets and
     liabilities, net of
     acquisitions and
     dispositions of businesses:
      Accounts receivable    (13,549)    (3,896)   (45,760)     1,072
      Inventories              8,656    (10,789)     1,569    (29,121)
      Accounts payable        (3,423)    18,356    (25,495)    13,380
      Net disbursements
       related to
       discontinued defense     (469)   (11,245)      (937)   (11,862)
       business
      Other assets
       and liabilities        (4,782)     2,303    (10,017)   (16,566)
                           ---------  ---------  ---------  ---------

   Net cash provided by
    operating activities      66,082     69,234    133,695    160,913
                           ---------  ---------  ---------  ---------

 Cash flows from
  investing activities:
   Purchases of property,
    plant and equipment      (39,464)   (53,998)  (117,314)  (132,044)
   Purchase of businesses,
    net of cash acquired         (34)   (37,846)    (4,914)  (301,557)
   Proceeds from sales
    of businesses               --          827      3,650     10,572
   Proceeds from sale
    of assets                  7,353      4,364     21,276      7,020
   Other investing activities    (34)     1,031         16        878
                           ---------  ---------  ---------  ---------

   Net cash (used) by      
    investing activities     (32,179)   (85,622)   (97,286)  (415,131)
                           ---------  ---------  ---------  ---------

 Cash flows from
  financing activities:
   Short-term and
    long-term debt, net      (28,833)    48,830     (4,799)   331,150
   Cash dividends paid
    on common stock           (9,561)    (9,393)   (28,670)   (28,201)
   Common stock
    issued-options             3,492        901      4,151      1,754
   Common stock acquired
    for treasury                (117)      --         (167)    (3,768)
   Other financing
    activities                  (449)      (693)    (2,729)    (3,807)
                           ---------  ---------  ---------  ---------

   Net cash provided (used)
    by financing activities  (35,468)    39,645    (32,214)   297,128
                           ---------  ---------  ---------  ---------

 Effect of exchange rate
  changes on cash                241     (3,532)    (4,789)    (6,269)
                           ---------  ---------  ---------  ---------

 Net increase (decrease) in
  cash and cash equivalents   (1,324)    19,725       (594)    36,641

 Cash and cash equivalents
  at beginning of period      57,152     68,182     56,422     51,266
                           ---------  ---------  ---------  ---------

 Cash and cash equivalents
  at end of period         $  55,828  $  87,907  $  55,828  $  87,907
                           =========  =========  =========  =========


 Harsco Corporation
 REVIEW OF OPERATIONS BY SEGMENT (Unaudited)
 (In millions)
                    Infra-           Gas and   S3-    Gen'l   Consol-
                    struc-    Mill    Fluid   Networks Corpo-  idated
                    ture      Svcs    Control   LLC    rate    Totals
                    ======   ======   ======   =====   =====    =====
 Three Months Ended 
  September 30, 2001                   

 Net sales to
 unaffiliated
 customers          $228.4   $184.2   $118.3   $ --    $ --    $530.9
                    ------   ------   ------  ------   -----   ------
  Operating income  $ 24.6   $ 21.5   $  5.4   $ --    $ --    $ 51.5
  Equity in income
   of affiliates, net  0.2      --       --      --      --       0.2
  Interest income      0.1      1.1      --      --      0.9      2.1
  Interest expense    (8.5)    (2.3)    (0.6)    --     (1.7)   (13.1)
  Income tax
   (expense) benefit  (6.0)    (6.2)    (1.7)    --      1.1    (12.8)
  Minority interest
   in net income       --      (1.1)     --      --      --      (1.1)
                    ------   ------   ------  ------   -----   ------
 Segment net income $ 10.4   $ 13.0   $  3.1  $  --    $ 0.3   $ 26.8
                    ======   ======   ======  ======   =====   ======
                             
 Three Months Ended
  September 30, 2000           

 Net sales to
  unaffiliated
  customers (a)     $216.3   $188.3   $136.9  $  --    $ --    $541.5
                    ------   ------   ------  ------   -----   ------
 Operating
  income (loss)     $ 13.5   $ 22.6   $ 13.3  $  --    $(0.7)  $ 48.7
 Equity in income
  (loss) of
  affiliates, net      0.5      0.2      --     (1.3)    --      (0.6)
 Interest income       0.4      1.1      --      --      0.1      1.6
 Interest expense     (9.2)    (3.0)    (1.0)    --     (3.4)   (16.6)
 Income tax
  (expense) benefit   (1.2)    (4.5)    (4.3)    0.5     0.1     (9.4)
 Minority interest
  in net income       (0.1)    (1.3)     --      --      --      (1.4)
                    ------   ------   ------  ------   -----   ------

 Segment net
  income (loss)     $  3.9   $ 15.1   $  8.0  $ (0.8)  $(3.9)  $ 22.3
                    ======   ======   ======  ======   =====   ======

 (a) In order to comply with Emerging Issues Task Force (EITF) Issue
     No. 00-10, all shipping and handling costs have been classified
     as cost of services sold or as cost of products sold rather than
     as reductions of sales. The income statement for the three months
     ended September 30, 2000 has been reclassified to reflect this
     change. The reclassification has no effect on previously reported
     operating income or net income for the three months ended
     September 30, 2000.


 Harsco Corporation
 REVIEW OF OPERATIONS BY SEGMENT (Unaudited)
 (In millions)
                    Infra-           Gas and   S3-    Gen'l   Consol-
                    struc-    Mill    Fluid   Networks Corpo-  idated
                    ture      Svcs    Control   LLC    rate    Totals
                    ======   ======   ======   =====   =====    =====
 Nine Months Ended
  September 30, 2001           

 Net sales to
  unaffiliated
  customers         $669.2   $552.6   $367.5   $ --    $ --  $1,589.3
                    ------   ------   ------    ----    ---- --------
 Operating
  income (loss)     $ 56.1   $ 61.6   $ 19.9   $ --   $ (0.2) $ 137.4
 Equity in income
  (loss) of
  affiliates, net      1.0      0.1      --     (2.9)    --      (1.8)
 Interest income       0.4      3.1      0.1     --      0.9      4.5
 Interest expense    (26.5)    (7.0)    (1.4)    --     (7.0)   (41.9)
 Income tax
  (expense) benefit  (11.9)   (17.5)    (6.8)    1.0     2.3    (32.9)
 Minority interest
  in net income       (0.1)    (3.5)     --      --      --      (3.6)
                    ------   ------   ------    ----    ----  -------
 Segment net
  income (loss)     $ 19.0   $ 36.8   $ 11.8   $(1.9)  $(4.0) $  61.7
                    ======   ======   ======    ====    ====  =======

 Nine Months Ended
 September 30, 2000            

 Net sales to
  unaffiliated
  customers (a)     $478.4   $579.0  $ 407.1   $ --    $ --  $1,464.5
                    ------   ------   ------    ----    ---- --------
 Operating
  income (loss)     $ 36.8   $ 69.7  $  35.1   $ --    $(1.2) $ 140.4
 Equity in income
  (loss) of
  affiliates, net      0.5      0.7      --     (2.2)    --      (1.0)
 Interest income       0.7      3.2      0.1     --      0.1      4.1
 Interest expense    (13.4)    (7.4)    (3.0)    --     (9.1)   (32.9)
 Income tax
  (expense) benefit   (8.1)   (19.9)   (11.6)    0.8     2.3    (36.5)
 Minority interest
  in net income       (0.2)    (3.2)     --      --      --      (3.4)
                    ------   ------   ------    ----    ----  -------

 Segment net
  income (loss)     $ 16.3   $ 43.1   $ 20.6  $(1.4)   $(7.9) $  70.7
                    ======   ======   ======    ====    ====  =======

 (a) In order to comply with Emerging Issues Task Force (EITF) Issue
     No. 00-10, all shipping and handling costs have been classified
     as cost of services sold or as cost of products sold rather than
     as reductions of sales. The income statement for the nine months
     ended September 30, 2000 has been reclassified to reflect this
     change. The reclassification has no effect on previously reported
     operating income or net income for the nine months ended
     September 30, 2000.


 Harsco Corporation
 REVIEW OF OPERATIONS BY SEGMENT - Addendum (Unaudited)
 (In millions)
                    Infra-           Gas and   S3-    Gen'l   Consol-
                    struc-    Mill    Fluid   Networks Corpo-  idated
                    ture      Svcs    Control   LLC    rate    Totals
                    ======   ======   ======   =====   =====    =====
 Three Months Ended
  September 30, 2001 
 
 Net sales to
  unaffiliated
  customers         $228.4   $184.2   $118.3   $ --    $ --    $530.9
                    ------   ------   ------   -----    ----   ------
 Operating income                                     
  before nonrecurring                                 
  items             $ 23.3   $ 22.4   $  5.0   $ --    $ 0.4   $ 51.1
 Nonrecurring income                                  
  (expense) items      1.3     (0.9)     0.4     --     (0.4)     0.4
                    ------   ------   ------   -----    ----   ------
 Operating income     24.6     21.5      5.4     --      --      51.5
 Equity in income                                     
  of affiliates, net   0.2      --       --      --      --       0.2
 Interest income       0.1      1.1      --      --      0.9      2.1
 Interest expense     (8.5)    (2.3)    (0.6)    --     (1.7)   (13.1)
 Income tax                                           
  (expense) benefit   (6.0)    (6.2)    (1.7)    --      1.1    (12.8)
 Minority interest                                    
  in net income        --      (1.1)     --      --      --      (1.1)
                    ------   ------   ------   -----    ----   ------
 Segment net income $ 10.4   $ 13.0   $  3.1   $ --    $ 0.3   $ 26.8
                    ======   ======   ======   =====    ====   ======
                                                     
 Three Months Ended
  September 30, 2000  

 Net sales to
  unaffiliated
  customers (a)     $216.3   $188.3   $136.9   $ --    $ --    $541.5
                    ------   ------   ------   -----   -----   ------
 Operating income   $ 13.5   $ 22.6   $ 13.3   $ --    $(0.7)  $ 48.7
 Equity in income
  (loss) of
  affiliates, net      0.5      0.2      --     (1.3)    --      (0.6)
 Interest income       0.4      1.1      --      --      0.1      1.6
 Interest expense     (9.2)    (3.0)    (1.0)    --     (3.4)   (16.6)
 Income tax
  (expense) benefit   (1.2)    (4.5)    (4.3)    0.5     0.1     (9.4)
 Minority interest
  in net income       (0.1)    (1.3)     --       --     --      (1.4)
                    ------   ------   ------   -----   -----   ------
 Segment net
  income (loss)     $  3.9   $ 15.1   $  8.0   $(0.8)  $(3.9)  $ 22.3
                    ======   ======   ======   =====   =====   ======

 (a) In order to comply with Emerging Issues Task Force (EITF)
     Issue No. 00-10, all shipping and handling costs have been
     classified as cost of services sold or as cost of products sold
     rather than as reductions of sales.  The income statement for
     the three months ended September 30, 2000 has been reclassified
     to reflect this change.  The reclassification has no effect on
     previously reported operating income or net income for the three
     months ended September 30, 2000.


 Harsco Corporation
 REVIEW OF OPERATIONS BY SEGMENT - Addendum (Unaudited)
 (In millions)
                    Infra-           Gas and   S3-    Gen'l   Consol-
                    struc-    Mill    Fluid   Networks Corpo-  idated
                    ture      Svcs    Control   LLC    rate    Totals
                    ======   ======   ======   =====   =====    =====
 Nine Months Ended
  September 30, 2001           

 Net sales to
  unaffiliated
  customers         $669.2   $552.6   $367.5   $ --    $ --  $1,589.3
                    ------   ------   ------   -----   ----- --------

 Operating income
  before nonrecurring
  items             $ 58.2   $ 66.9   $ 20.7   $ --    $ 0.7  $ 146.5
 Nonrecurring
  expense items       (2.1)    (5.3)    (0.8)   (2.9)   (0.9)   (12.0)
                    ------   ------   ------   -----   -----  -------

 Operating
  income (loss)    56.1     61.6     19.9     --     (0.2)   137.4(a)
 Equity in income
  (loss) of
  affiliates, net      1.0      0.1      --     (2.9)    --      (1.8)
 Interest income       0.4      3.1      0.1     --      0.9      4.5
 Interest expense    (26.5)    (7.0)    (1.4)    --     (7.0)   (41.9)
 Income tax
  (expense) benefit  (11.9)   (17.5)    (6.8)    1.0     2.3    (32.9)
 Minority interest
  in net income       (0.1)    (3.5)     --      --      --      (3.6)
                    ------   ------   ------   -----   -----  -------

 Segment net
  income (loss)     $ 19.0   $ 36.8   $ 11.8   $(1.9)  $(4.0) $  61.7
                    ======   ======   ======   =====   =====  =======

 Nine Months Ended
  September 30, 2000

 Net sales to
  unaffiliated
  customers (b)     $478.4   $579.0   $407.1   $ --    $ --  $1,464.5
                    ------   ------   ------   -----   ----- --------
 Operating
  income (loss)     $ 36.8   $ 69.7   $ 35.1   $ --    $(1.2) $ 140.4
 Equity in income
  (loss) of
  affiliates, net      0.5      0.7      --     (2.2)    --      (1.0)
 Interest income       0.7      3.2      0.1     --      0.1      4.1
 Interest expense    (13.4)    (7.4)    (3.0)    --     (9.1)   (32.9)
 Income tax
  (expense) benefit   (8.1)   (19.9)   (11.6)    0.8     2.3    (36.5)
 Minority interest
  in net income       (0.2)    (3.2)     --      --      --      (3.4)
                    ------   ------   ------   -----   -----  -------

 Segment net
  income (loss)     $ 16.3   $ 43.1   $ 20.6   $(1.4) $(7.9)  $  70.7
                    ======   ======   ======   =====   =====  =======

 (a) Excludes $2.9 million of losses for S3Networks, LLC that are
     included as nonrecurring items above.  The $2.9 million is
     included in Equity in income (loss) of affiliates, net.

 (b) In order to comply with Emerging Issues Task Force (EITF) Issue
     No. 00-10, all shipping and handling costs have been classified
     as cost of services sold or as cost of products sold rather than
     as reductions of sales. The income statement for the nine months
     ended September 30, 2000 has been reclassified to reflect this
     change. The reclassification has no effect on previously reported
     operating income or net income for the nine months ended
     September 30, 2000.


            

Coordonnées