Report to Stockholders W e view our 2002 performance as modest progress in a difficult climate. Revenues dipped to just under $2 billion, down approximately two percent from the prior period, reflecting the prevailing market conditions. Operating income from continuing operations improved by $8.2 million in 2002, but after excluding a $19.3 million decrease in net expenses related to restructuring activities, fell below our 2001 performance. Diluted earnings per share increased to $2.21, due principally to decreased provisions for uncollectible accounts relating to customer bankruptcies in the steel sector, lower expenses for restructuring initiatives, decreased interest expense, and a lower effective income tax rate.  We met our objectives for rearming our characteristically strong balance sheet in preparation for our continuing drive for growth. Free cash flow, which consists of cash from operations and asset sales minus capital expenditures and dividends, topped $160 million, virtually doubling our 2001 level. This strong performance enabled us to lower debt by a further $122 million and, consistent with our stated objectives, brought the debt to capital ratio to 44.5 percent, before including a pension adjustment to shareholders' equity. Including this pension adjustment, the debt to capital ratio was 49.8 percent. Since peaking in July 2000 when the SGB Group access services business was acquired, debt has been reduced by $256 million, or 29 percent. We are not content to sit back and wait for the timing of a still-uncertain economic recovery to sustain our forward momentum. Solid growth in our international mill services business and success internationally in our railway track maintenance equipment and services unit were tempered by the continued absence of a broad and sustained recovery in several end-markets, particularly domestically, which inhibited our ability to fully realize the year's planned operating performance. The effect of increased pension expenses resulting from the recent multi-year declines in equity market returns and interest rates diminished earnings and largely offset the accounting elimination of goodwill amortization and the benefits of a more favorable foreign currency translation environment. These increased pension expenses will continue to impact earnings for the foreseeable future. We are aggressively exploring measures to mitigate these additional costs. 2 HARSCO CORPORATION 2002 ANNUAL REPORT