Harsco Corporation Reports Fourth Quarter 2012 Results

Harsco Corporation Reports Fourth Quarter 2012 Results

 Company Records $265 Million Non-Cash Goodwill Impairment Charge Related to
                            Infrastructure Segment

                Adjusted Operating Income Increases 5 Percent

CAMP HILL, Pa., Feb. 14, 2013 (GLOBE NEWSWIRE) -- Diversified global
industrial company Harsco Corporation (NYSE:HSC) today reported fourth quarter
2012 results. Including a $3.29 per share non-cash goodwill impairment charge,
fourth quarter 2012 U.S. GAAP ("GAAP") diluted loss per share from continuing
operations was $3.27, compared with a loss of $1.14 in the fourth quarter of
2011. Excluding special items, adjusted diluted earnings per share from
continuing operations were $0.30 in the fourth quarter of 2012, compared with
$0.36 in the fourth quarter of 2011. (See Table 1 for a description of the
special items and a reconciliation of GAAP and adjusted results).

CEO Comment

"We are encouraged that, despite further deterioration in the metals markets
in the quarter, we grew adjusted operating income 5 percent and delivered
adjusted earnings per share at the mid-point of our guidance," said Harsco
President and CEO Patrick Decker.

"As we move forward, we expect to see continued volatility in our end markets
and certain geographies. As a result, we will heighten our focus on the
elements of our business we can control. Improving cash flow and cash returns
through disciplined capital allocation and increased operational efficiency
will remain a key priority."

Consolidated Fourth Quarter Operating Results

Total revenues were $766 million in the fourth quarter of 2012, compared with
$793 million in the prior-year quarter. During the past year the Company took
several actions to increase long-term returns and invest capital more
effectively. Two of these were exiting underperforming contracts in Metals &
Minerals and, as part of the previously announced restructuring plan, ceasing
underperforming operations in certain countries in Infrastructure, which
together accounted for nearly $30 million of the year-over-year revenue
decline. This revenue performance also reflects an acceleration of equipment
deliveries per customers' schedules in Rail, which was partially offset by
lower volume in the metals and commercial construction markets. Foreign
currency translation negatively impacted revenues by $8 million in the
quarter.

Including a $265 million, non-cash goodwill impairment charge, GAAP operating
loss from continuing operations was $247 million in the fourth quarter of
2012. This compares with a loss of $57 million in the prior-year quarter.
Excluding special items, adjusted operating income from continuing operations
increased 5 percent to $46 million in the quarter. Adjusted operating income
margin increased 50 basis points to 6.1 percent. This performance primarily
reflects the timing of equipment deliveries in Rail and benefits from the
Company's cost reduction strategies. These factors were partially offset by
lower results in Metals & Minerals. Foreign currency translation negatively
impacted operating income by $2 million in the quarter.

Non-Cash Goodwill Impairment Charge

The Company recorded a $265 million, non-cash goodwill impairment charge
related to the Infrastructure segment in the fourth quarter of 2012 as part of
its annual goodwill impairment testing. While the business has demonstrated
improved operating performance in the face of a prolonged market recovery,
particularly in Europe, it was determined that a goodwill impairment charge
was required at this time.

                                                    
Table 1—Special Items      Fourth Quarter             Year
                          2012          2011         2012         2011
GAAP diluted EPS from      ($3.27)      ($1.14)     ($3.15)     ($0.12)
continuing operations
                                                               
Goodwill impairment (a)    3.29                      3.29         
Restructuring charges(b)  0.22         1.05        1.06        1.05
Charges to exit Metals     0.07                      0.07         
contract (c)
Gains associated with                               (0.10)      
exited countries(d)
Non-cash tax charge (e)                 0.45                     0.45
Former CEO separation                               0.04        
expense(f)
Gains on pension                                    (0.02)      
curtailment(g)
One-time Rail benefit (h)                                       (0.07)
Adjusted diluted EPS from  $0.30 (i)     $0.36       $1.19        $1.31
continuing operations

(a)Non-cash goodwill impairment charge in Infrastructure (4Q 2012 $265.0
million pre-tax).
(b)Charges resulting from the Company's previously announced restructuring
plans in Infrastructure (4Q 2012 $16.9 million pre-tax; 12 Months 2012 $88.6
million pre-tax; 4Q 2011 and 12 Months 2011 $87.6 million pre‑tax) and Metals
& Minerals (4Q 2012 $4.0 million pre-tax; 12 Months 2012 $5.5 million pre-tax;
4Q and 12Months 2011 $12.8 million pre-tax).
(c)Charges as a result of exiting an underperforming contract in Metals &
Minerals (4Q 2012 $7.6 million pre-tax).
(d)Non-cash gains related to the closure of certain European operations in
Infrastructure (12 Months 2012 $10.9million pre-tax).
(e)Non-cash tax charge against U.K. deferred tax assets (4Q 2011 $36.8
million after-tax).
(f)Separation expense for former CEO (1Q 2012 $4.1 million pre-tax).
(g)Pension curtailment gain in Metals & Minerals (1Q 2012 $1.7 million
pre-tax).
(h)Reduction of estimated costs related to the first phase of Rail's large
China order (2Q 2011 $8.0 million pre‑tax).
(i)Does not total due to rounding.

Consolidated 2012 Results

Including the $3.29 per share goodwill impairment charge, GAAP diluted loss
per share from continuing operations was $3.15 for the full year 2012,
compared with a loss of $0.12 in 2011. Excluding special items, adjusted
diluted earnings per share from continuing operations were $1.19 in 2012,
compared with $1.31 in 2011, as noted above in Table 1.

Total revenues were $3.0 billion in 2012, compared with $3.3 billion in 2011.
Exiting underperforming contracts in Metals & Minerals and ceasing operations
in certain countries in Infrastructure accounted for $68 million and $61
million, respectively, of the year-over-year revenue decline. Foreign currency
translation negatively impacted revenues by $123 million in 2012. This revenue
performance also reflects lower volumes due to soft end markets in metals and
commercial construction. In Rail, revenues grew 17 percent primarily due to
the volume of equipment deliveries under the large order with the China
Ministry of Railways, which is now nearing completion. Industrial revenues
increased 15percent, driven by strong energy markets early in 2012.

Including the $265 million non-cash goodwill impairment charge, GAAP operating
loss from continuing operations was $175 million in 2012, compared with
operating income from continuing operations of $88 million in 2011. Excluding
special items, adjusted operating income from continuing operations increased
2 percent to $184 million in 2012 from $180 million in 2011. Adjusted
operating income margin increased 50 basis points to 6.0 percent in 2012. This
performance primarily reflects the benefits from the Company's cost reduction
strategies and strong results in the Industrial and Rail groups. Foreign
currency translation negatively impacted operating income by $10 million in
2012.

Fourth Quarter Business Review

Harsco Metals & Minerals

Revenues were $334 million in the fourth quarter of 2012, compared with $372
million in the prior-year quarter. Exiting certain underperforming contracts
accounted for $15 million of the year-over-year revenue decline. This revenue
performance also reflects lower volumes due to further softening in theglobal
metals industry. Foreign currency translation negatively impacted revenues by
$6 million in the quarter.

Excluding $4 million in restructuring charges and $8 million in charges as a
result of exiting an underperforming contract, Metals & Minerals' adjusted
operating income was $18 million in the fourth quarter of 2012. In the
prior-year quarter, adjusted operating income was $28 million, which excluded
$13 million in restructuring charges. Adjusted operating margin decreased 220
basis points to 5.2percent in the quarter. This performance primarily
reflects lower customer steel production.

The Company is pleased to have started operations on its 25-year environmental
solutions contract with TISCO in the fourth quarter of 2012, as well as recent
contract wins in India. These contracts are expected to benefit Metals &
Minerals' results in the latter part of 2013.

Harsco Infrastructure

Revenues were $235 million in the fourth quarter of 2012 compared with $266
million in the prior-year quarter. Ceasing operations in certain countries
reduced revenues by $14 million in the quarter. The revenue performance also
reflects lower industrial maintenance services activity in North America,
reduced equipment sales in Europe and continued softness in the global
commercial construction markets. Foreign currency translation negatively
impacted revenues by $2 million in the quarter.

Excluding the $265 million non-cash goodwill impairment charge and $17 million
in restructuring charges, Infrastructure's adjusted operating loss was $3
million in the fourth quarter. In the prior-year quarter, Infrastructure's
adjusted operating loss was $12 million, which excluded $88 million in
restructuring charges. This performance reflects the benefits from the
Company's costreduction strategies, which were partially offset by the
negative impact of foreign currency translation.

Harsco Rail

Revenues grew 57 percent to $113 million in the fourth quarter of 2012 from
$72 million in the prior-year quarter. Operating income increased 26 percent
to $21 million in the quarter from $17million in the prior-year quarter.
Operating margin was 18.4percent in the quarter, compared with 22.9 percent
in the prior-year quarter.

Rail's performance was driven by the mix and acceleration of equipment
deliveries based on customers' schedules, particularly in China as part of its
large order with the Ministry of Railways. These gains were partially offset
by lower volume for replacement parts and contractservices.

Harsco Industrial

Revenues were $84 million in the fourth quarter of 2012, up from $82 million
in the prior-year quarter. Operating income was $12 million in the quarter,
compared with $13 million in the prior-year quarter. Operating margin
decreased 100 basis points to 15.0 percent in the quarter.

Industrial's fourth quarter performance was impacted by soft demand in the
industrial boiler business, which had an unfavorable effect on margins.

First Quarter Outlook

The first calendar quarter has been historically the Company's lowest EPS
quarter of the year. Harsco anticipates the first quarter of 2013 will reflect
this normal seasonality, which is driven primarily by lower levels of
commercial construction in the winter months.

Metals & Minerals' revenues in the first quarter are expected to be
approximately 6 to 8 percent lower than the prior-year quarter. This is due to
lower expected steel production at certain customers and the carry-over impact
of exited contracts, which are not yet fully offset by the start-up of new
contracts that the Company has recently won. Despite this expected revenue
decline, operating margin is anticipated to be in line with the prior-year
quarter due to the Company's cost reduction actions and the growth of
higher-return contracts as part of the overall mix.

Infrastructure's revenues in the first quarter are expected to be generally in
line with the prior-year quarter. The business is expected to deliver a modest
year-over-year reduction of adjusted operating loss due to the benefits from
prior restructuring actions.

Rail's first quarter operating income is expected to decline approximately $9
million in the first quarter from the prior-year quarter. This is principally
due to an unfavorable mix of equipment deliveries and the expected shift of
certain high-margin equipment deliveries from the first quarter to the second
quarter of 2013 driven by customers' delivery schedules. These delayed
deliveries represent approximately $4million of operating income.

Industrial's revenues and operating margin in the first quarter are expected
to be in line with the first quarter of 2012. This outlook reflects similar
volume for air-cooled heat exchangers and slightly increased order activity
for grating and industrial boilers compared with the first quarter of 2012.

The Company expects its effective income tax rate to approximate 30 percent
for both the first quarter and the full year 2013.This modest increase from
historical levels is due to losses from operations in certain jurisdictions
where tax benefits will not be able to be recognized and the geographic mix of
income. Going forward, there may be some variability in the reported GAAP tax
rate from quarter to quarter depending on the actual geographic mix of
earnings.

Based on the aforementioned factors, most notably the mix and timing of
equipment deliveries in Rail, the Company expects diluted earnings per share
from continuing operations to range from $0.00 to $0.05 in the first quarter,
excluding special items. The Company reported diluted earnings per share from
continuing operations of $0.07, excluding special items, in the first quarter
of 2012.

Conference Call

As previously announced, the Company will hold a conference call today at
10:00a.m. Eastern Time to discuss its results and respond to questions from
the investment community. The conference call will be broadcast live through
the Harsco Corporation website at www.harsco.com. The Company will refer to a
slide presentation that accompanies its formal remarks. The slide presentation
will be available on the Company's website.

The call can also be accessedby telephone by dialing (800)611-4920, or (973)
200-3957 for international callers. Enter Conference ID number 89419527.
Listeners are advised to dial in at least five minutes prior to the call.

Replays will be available via the Harsco website.

Forward-Looking Statements

The nature of the Company's business 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, the Company provides the following cautionary remarks regarding
important factors that, among others, could cause future results to differ
materially from the results contemplated by forward-looking statements,
including the expectations and assumptions expressed or implied herein.
Forward-looking statements contained herein could include, among other things,
statements about management's confidence in and strategies for performance;
expectations for new and existing products, technologies and opportunities;
and expectations regarding growth, sales, cash flows, earnings and Economic
Value Added ("EVA®"). Forward-looking statements can be identified by the use
of such terms as "may," "could," "expect," "anticipate," "intend," "believe,"
"likely," "estimate," "plan" or other comparable terms.

Factors that could cause actual results to differ, perhaps materially, from
those implied by forward-looking statements include, but are not limited to:
(1) changes in the worldwide business environment in which the Company
operates, including general economic conditions; (2) changes in currency
exchange rates, interest rates, commodity and fuel costs and capital costs;
(3) changes in the performance of stock and bond markets that could affect,
among other things, the valuation of the assets in the Company's pension plans
and the accounting for pension assets, liabilities and expenses; (4) changes
in governmental laws and regulations, including environmental, tax and import
tariff standards; (5) market and competitive changes, including pricing
pressures, market demand and acceptance for new products, services and
technologies; (6) unforeseen business disruptions in one or more of the many
countries in which the Company operates due to political instability, civil
disobedience, armed hostilities, public health issues or other calamities; (7)
the seasonal nature of the Company's business; (8) the Company's ability to
successfully enter into new contracts and complete new acquisitions or joint
ventures in the timeframe contemplated, or at all; (9) the integration of the
Company's strategic acquisitions; (10) the amount and timing of repurchases of
the Company's common stock, if any; (11) the prolonged recovery in global
financial and credit markets and economic conditions generally, which could
result in the Company's customers curtailing development projects,
construction, production and capital expenditures, which, in turn, could
reduce the demand for the Company's products and services and, accordingly,
the Company's revenues, margins and profitability; (12) the outcome of any
disputes with customers; (13) the financial condition of the Company's
customers, including the ability of customers (especially those that may be
highly leveraged and those with inadequate liquidity) to maintain their credit
availability; (14) the Company's ability to successfully implement and receive
the expected benefits of cost-reduction and restructuring initiatives,
including the achievement of expected cost savings in the expected time frame;
(15) risk and uncertainty associated with intangible assets; and (16) other
risk factors listed from time to time in the Company's SEC reports. A further
discussion of these, along with other potential risk factors, can be found in
Part I, Item 1A, "Risk Factors," of this Annual Report on Form 10-K. The
Company cautions that these factors may not be exhaustive and that many of
these factors are beyond the Company's ability to control or predict.
Accordingly, forward-looking statements should not be relied upon as a
prediction of actual results. The Company undertakes no duty to update
forward-looking statements except as may be required by law.

About Harsco

Harsco Corporation serves key industries that play a fundamental role in
worldwide economic development, including steel and metals production,
construction, railways and energy. Harsco's common stock is a component of the
S&P MidCap 400 Index and the Russell 1000 Index. Additional information can be
found atwww.harsco.com.

The Harsco Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=361

                                                    
HARSCO CORPORATION
CONSOLIDATED STATEMENTS OF                           
OPERATIONS (Unaudited)
                            Three Months Ended       Twelve Months Ended
                             December 31              December 31
(In thousands, except per    2012        2011         2012        2011
share amounts)
Revenues from continuing                                       
operations:
Service revenues             $571,581   $ 640,736   $2,340,996 $2,700,664
Product revenues             194,744    151,994     705,022    602,076
Total revenues               766,325    792,730     3,046,018  3,302,740
                                                              
Costs and expenses from                                        
continuing operations:
Cost of services sold        455,005    519,746     1,861,732  2,162,948
Cost of products sold        136,077    101,847     487,784    407,680
Selling, general and         126,686    127,722     503,339    535,679
administrative expenses
Research and development     2,231      1,754       9,139      6,044
expenses
Goodwill impairment charge   265,038    --          265,038    --
Other expense                28,425     98,309      93,776     102,740
Total costs and expenses     1,013,462  849,378     3,220,808  3,215,091
                                                              
Operating income (loss) from (247,137)  (56,648)    (174,790)  87,649
continuing operations
                                                              
Interest income              671        729         3,676      2,751
Interest expense             (11,340)   (11,926)    (47,381)   (48,735)
                                                              
Income (loss) from
continuing operations before (257,806)  (67,845)    (218,495)  41,665
income taxes and equity
income
                                                              
Income tax (expense)         (6,762)    (25,035)    (35,251)   (49,848)
Equity in income of          85         160         564        690
unconsolidated entities, net
                                                              
Loss from continuing         (264,483)  (92,720)    (253,182)  (7,493)
operations
                                                              
Discontinued operations:                                       
Loss on disposal of          (626)      (598)       (1,843)    (3,306)
discontinued business
Income tax benefit related   239        225         924        1,243
to discontinued business
Loss from discontinued       (387)      (373)       (919)      (2,063)
operations
Net Loss                     (264,870)  (93,093)    (254,101)  (9,556)
Less: Net (income) loss
attributable to              512        625         (511)      (1,954)
noncontrolling interests
Net loss attributable to     $(264,358) $(92,468)   $(254,612) $(11,510)
Harsco Corporation
                                                              
Amounts attributable to
Harsco Corporation common                                      
stockholders:
Loss from continuing         $(263,971) $(92,095)   $(253,693) $(9,447)
operations, net of tax
Loss from discontinued       (387)      (373)       (919)      (2,063)
operations, net of tax
Net loss attributable to
Harsco Corporation common    $(264,358) $(92,468)   $(254,612) $(11,510)
stockholders
                                                              
Weighted-average shares of   80,659     80,732      80,632     80,736
common stock outstanding
Basic loss per common share
attributable to Harsco                                         
Corporation common
stockholders:
Continuing operations        $(3.27)    $(1.14)     $(3.15)    $(0.12)
Discontinued operations      --         --          (0.01)     (0.03)
Basic loss per share
attributable to Harsco       $(3.28)(a) $(1.15) (a) $(3.16)    $(0.14) (a)
Corporation common
stockholders
                                                              
Diluted weighted-average
shares of common stock       80,659     80,732      80,632     80,736
outstanding
Diluted loss per common
share attributable to Harsco                                   
Corporation common
stockholders:
Continuing operations        $(3.27)    $(1.14)     $(3.15)    $(0.12)
Discontinued operations      --         --         (0.01)     (0.03)
Diluted loss per share
attributable to Harsco       $(3.28)(a) $(1.15)(a)  $(3.16)    $(0.14) (a)
Corporation common
stockholders
(a)Does not total due to                                      
rounding.

                                                         
                                                         
HARSCO CORPORATION                                        
CONSOLIDATED BALANCE SHEETS (Unaudited)
                                             December 31  December 31
(In thousands)                                2012         2011
ASSETS                                                    
Current assets:                                           
Cash and cash equivalents                     $95,250    $121,184
Trade accounts receivable, net                600,264      618,475
Other receivables                             39,836       44,431
Inventories                                   236,512      241,934
Other current assets                          94,581       133,407
Total current assets                          1,066,443    1,159,431
Property, plant and equipment, net            1,266,225    1,274,484
Goodwill                                      429,198      680,901
Intangible assets, net                        77,726       93,501
Other assets                                  136,377      130,560
Total assets                                  $2,975,969 $3,338,877
LIABILITIES                                               
Current liabilities:                                      
Short-term borrowings                         $8,560     $51,414
Current maturities of long-term debt          3,278        3,558
Accounts payable                              221,479      252,329
Accrued compensation                          94,398       92,603
Income taxes payable                          10,109       8,409
Dividends payable                             16,520       16,498
Insurance liabilities                         19,434       25,075
Advances on contracts                         47,696       111,429
Other current liabilities                     216,101      220,953
Total current liabilities                     637,575      782,268
Long-term debt                                957,428      853,800
Deferred income taxes                         18,880       27,430
Insurance liabilities                         63,248       60,864
Retirement plan liabilities                   385,062      343,842
Other liabilities                             52,152       50,755
Total liabilities                             2,114,345    2,118,959
EQUITY                                                    
Harsco Corporation stockholders' equity:                  
Common stock                                  140,080      139,914
Additional paid-in capital                    152,645      149,066
Accumulated other comprehensive loss          (411,168)    (364,191)
Retained earnings                             1,675,490    1,996,234
Treasury stock                                (745,205)    (744,644)
Total Harsco Corporation stockholders' equity 811,842      1,176,379
Noncontrolling interests                      49,782       43,539
Total equity                                  861,624      1,219,918
Total liabilities and equity                  $2,975,969 $3,338,877

                                                                  
                                                                  
HARSCO CORPORATION                                                 
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                                      Twelve Months Ended
                                                       December 31
(In thousands)                                         2012         2011
                                                                  
Cash flows from operating activities:                              
Net loss                                               $ (254,101) $(9,556)
Adjustments to reconcile loss to net cash provided by              
operating activities:
Depreciation                                           251,905      276,021
Amortization                                           20,212       34,420
Deferred income tax expense (benefit)                  (10,708)     20,826
Equity in income of unconsolidated entities, net       (564)        (690)
Dividends or distributions from unconsolidated         308          226
entities
Harsco 2011/2012 Restructuring Program non-cash        31,443       67,320
adjustment
Goodwill impairment charge                             265,038      --
Other, net                                             (27,098)     (7,432)
Changes in assets and liabilities, net of                          
acquisitionsand dispositions of businesses:
Accounts receivable                                    22,016       (58,011)
Inventories                                            2,365        7,976
Accounts payable                                       (37,649)     (2,713)
Accrued interest payable                               (319)        (375)
Accrued compensation                                   517          12,554
Harsco Infrastructure Segment 2010 Restructuring       (5,211)      (19,629)
Program accrual
Harsco 2011/2012 Restructuring Program accrual         (7,883)      30,471
Other assets and liabilities                           (51,392)     (52,632)
                                                                  
Net cash provided by operating activities              198,879      298,776
                                                                  
Cash flows from investing activities:                              
Purchases of property, plant and equipment             (265,023)    (313,101)
Proceeds from sales of assets                          49,779       42,653
Purchases of businesses, net of cash acquired          (740)        (1,938)
Other investing activities                             (3,284)      16,564
                                                                  
Net cash used by investing activities                  (219,268)    (255,822)
                                                                  
Cash flows from financing activities:                              
Short-term borrowings, net                             (43,464)     21,637
Current maturities and long-term debt:                             
Additions                                              285,850      301,515
Reductions                                             (184,372)    (297,854)
Cash dividends paid on common stock                    (66,068)     (66,146)
Dividends paid to noncontrolling interests             (2,605)      (4,171)
Contributions from noncontrolling interests            8,097        8,851
Common stock issued-options                            725          2,403
Common stock acquired for treasury                     --           (5,788)
Other financing activities                             (2,709)      (1)
                                                                  
Net cash used by financing activities                  (4,546)      (39,554)
                                                                  
Effect of exchange rate changes on cash                (999)        (6,454)
                                                                  
Net decrease in cash and cash equivalents              (25,934)     (3,054)
                                                                  
Cash and cash equivalents at beginning of period       121,184      124,238
                                                                  
Cash and cash equivalents at end of period             $95,250    $121,184



HARSCO CORPORATION
REVIEW OF OPERATIONS BY SEGMENT (Unaudited)
                                                
                        Three Months Ended       Three Months Ended
                         December 31, 2012        December 31, 2011
(In thousands)           Revenues   Operating     Revenues   Operating
                                    Income (Loss)            Income (Loss)
                                                         
Harsco Metals & Minerals $334,362 $5,861      $372,298 $14,829
Harsco Infrastructure    235,464   (284,701)    266,073   (99,680)
Harsco Rail              112,938   20,807       72,044    16,467
Harsco Industrial        83,561    12,497       82,315   13,188
General Corporate        --        (1,601)      --        (1,452)
Consolidated Totals      $766,325 $(247,137)  $792,730 $(56,648)
                                                         

                                                  
                        Twelve Months Ended        Twelve Months Ended
                         December 31, 2012          December 31, 2011
(In thousands)           Revenues     Operating     Revenues     Operating
                                      Income (Loss)              Income (Loss)
                                                             
Harsco Metals & Minerals $1,404,103 $85,523     $1,588,302 $109,593
Harsco Infrastructure    937,293     (368,657)    1,108,293   (125,555)
Harsco Rail              352,036     56,079       300,029     58,746
Harsco Industrial        352,586     60,160       306,116     50,656
General Corporate        --          (7,895)      --          (5,791)
Consolidated Totals      $3,046,018 $(174,790)  $3,302,740 $87,649



HARSCO CORPORATION
REVIEW OF OPERATIONS BY SEGMENT EXCLUDING SPECIAL ITEMS (a) (Unaudited)
(In thousands)

          Harsco     Harsco         Harsco     Harsco               Consolidated
         Metals &   Infrastructure Rail       Industrial Corporate Totals
          Minerals
Three
Months
Ended                                                          
December
31, 2012
Revenues,
as        $334,362 $235,464     $112,938 $83,561  $--     $766,325
reported
Operating
income
(loss)    17,532    (2,755)       20,807    12,497    (1,600)  46,481
excluding
special
items
Operating
margin
excluding 5.2%       -1.2%          18.4%      15.0%               6.1%
special
items --
%
                                                              

Three
Months                                                         
Ended
December
31, 2011
Revenues,
as        $372,298 $266,073     $72,044  $82,315  $--     $792,730
reported
Operating
income
(loss)    27,604    (12,076)      16,517    13,188    (1,101)  44,132
excluding
special
items
Operating
margin
excluding 7.4%       -4.5%          22.9%      16.0%               5.6%
special
items --
%
                                                              

Year
Ended                                                          
December
31, 2012
Revenues, $
as        1,404,103  $937,293     $352,036 $352,586 $--     $3,046,018
reported
Operating
income
(loss)    96,925    (25,938)      56,146    60,160    (3,399)  183,894
excluding
special
items
Operating
margin
excluding 6.9%       -2.8%          15.9%      17.1%               6.0%
special
items --
%
                                                              

Year
Ended                                                          
December
31, 2011
Revenues, $
as        1,588,302  $1,108,293    $300,029 $306,116 $--     $3,302,740
reported
Operating
income
(loss)    122,368   (37,951)      50,830    50,656    (5,440)  180,463
excluding
special
items
Operating
margin
excluding 7.7%       -3.4%          16.9%      16.5%               5.5%
special
items --
%

(a) The Company's management believes operating margin excluding special items,
a non-GAAP financial measure, is useful to investors because it provides an
overall understanding of the Company's historical and future prospects.
Exclusion of special items permits evaluation and comparison of results for the
Company's core business operations, and it is on this basis that management
internally assesses the Company's performance.



HARSCO CORPORATION
RECONCILIATION OF OPERATING INCOME (LOSS) BY SEGMENT EXCLUDING SPECIAL ITEMS (a)
(Unaudited)
(In thousands)

               Harsco     Harsco         Harsco    Harsco                Consolidated
              Metals &   Infrastructure Rail      Industrial Corporate  Totals
               Minerals

Three Months                                                        
Ended December
31, 2012
Operating
income (loss)  $5,861   $ (284,701)   $20,807 $12,497  $(1,601) $ (247,137)
as reported
- 2011/2012
Restructuring  4,026      16,908         --        --         1          20,935
Program charge
- Goodwill
impairment
charge –       --         265,038        --        --         --         265,038
Harsco
Infrastructure
- Charges to
exit Harsco
Metals &       7,645      --             --        --         --         7,645
Minerals
contract (b)
Operating
income (loss)  $17,532  $(2,755)     $20,807 $12,497  $(1,600) $46,481
excluding
special items
                                                                   
                                                                   
Three Months
Ended December                                                      
31, 2011
Operating
income (loss)  $14,829  $(99,680)    $16,467 $13,188  $(1,452) $(56,648)
as reported
- 2011/2012
Restructuring  12,775     87,604         50        --         351        100,780
Program charge
Operating
income (loss)  $27,604  $(12,076)    $16,517 $13,188  $(1,101) $44,132
excluding
special items
                                                                   
                                                                   
Year Ended
December 31,                                                        
2012
Operating
income (loss)  $85,523  $ (368,657)   $56,079 $60,160  $(7,895) $ (174,790)
as reported
- 2011/2012
Restructuring  5,473      88,587         67        --         371        94,498
Program charge
- Goodwill
impairment
charge –       --         265,038        --        --         --         265,038
Harsco
Infrastructure
- Charges to
exit Harsco
Metals &       7,645      --             --        --         --         7,645
Minerals
contract (b)
- Gains
associated     --         (10,906)       --        --         --         (10,906)
with exited
countries (c)
- Former CEO
separation     --         --             --        --         4,125      4,125
expense
- Gain on
pension        (1,716)    --             --        --         --         (1,716)
curtailment
Operating
income (loss)  $96,925  $(25,938)    $56,146 $60,160  $(3,399) $183,894
excluding
special items
                                                                   
                                                                   
Year Ended
December 31,                                                        
2011
Operating
income (loss)  $109,593 $ (125,555)   $58,746 $50,656  $(5,791) $87,649
as reported
- 2011/2012
Restructuring  12,775     87,604         50        --         351        100,780
Program charge
- One-time
Rail benefit   --         --             (7,966)   --         --         (7,966)
(d)
Operating
income (loss)  $122,368 $(37,951)    $50,830 $50,656  $(5,440) $180,463
excluding
special items
                                                                   
(a) The Company's management believes operating income excluding special items, a
non-GAAP financial measure, is useful to investors because it provides an overall
understanding of the Company's historical and future prospects. Exclusion of special
items permits evaluation and comparison of results for the Company's core business
operations, and it is on this basis that management internally assesses the Company's
performance.
(b) Charges incurred to exit an underperforming contract in the Metals & Minerals
Segment.
(c) Gains associated with exited countries are non-cash items recognized when the
Company has substantially liquidated its investment in a foreign entity. As part of
the 2011/2012 Restructuring Program, Harsco Infrastructure exited several countries
and recognized gains.
(d) One-time Rail benefit relates to the first phase of Harsco Rail's large order in
China with the Ministry of Railways.



HARSCO CORPORATION
FREE CASH FLOW (a) (Unaudited)

                                      Twelve Months Ended
                                       December 31
(In thousands)                         2012               2011               
                                                                          
Net cash provided by operating         $198,879         $298,776         
activities
Plus restructuring cash payments       81,283            22,643            
Sub-total                              280,162           321,419           
Plus total proceeds from sales of      49,779            42,653            
assets (b)
Less proceeds from sale of assets      (18,028)          (25,225)          
under restructuring plans
Less maintenance capital expenditures  (137,808)         (178,261)         
(c)
Less growth capital expenditures (d)   (127,215)         (134,840)         
Plus capital expenditures for          12,786            1,245             
strategic ventures (e)
Free Cash Flow                         $59,676          $26,991          
                                                                            
(a) The Company's management believes that free cash flow, a non-GAAP
financial measure, is meaningful to investors because management reviews
cash flows generated from operations after taking into consideration the
cash impact of net restructuring plan expenditures, proceeds from sales of   
assets and capital expenditures. It is important to note that free cash flow
does not represent the total residual cash flow available for discretionary
expenditures since other non-discretionary expenditures, such as mandatory
debt service requirements, are not deducted from the measure.
(b) Asset sales are a normal part of the business model, primarily for the   
Harsco Infrastructure and Harsco Metals & Minerals Segments.
(c) Maintenance capital expenditures are necessary to sustain the Company's  
current revenue streams and include contract renewals.
(d) Growth capital expenditures, for which management has discretion as to
amount, timing and geographic placement, expand the Company's revenue base   
and create additional future cash flow.
(e) Capital expenditures for strategic ventures represent the partner's
share of capital expenditures in certain ventures consolidated in the        
Company's financial statements.

CONTACT: Investor Contact
         Jim Jacobson
         717.612.5628
         jjacobson@harsco.com
        
         Media Contact
         Kenneth D. Julian
         717.730.3683
         kjulian@harsco.com

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