Lubrizol Holding Inc, et al. – ‘424B2’ on 9/24/04

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Prospectus   —   Rule 424(b)(2)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B2       Lubrizol Corporation 424B2                           144    722K 

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                                                Filed Pursuant to Rule 424(b)(2)
                                                     Registration No. 333-115662

PROSPECTUS SUPPLEMENT                                                           

(TO PROSPECTUS DATED AUGUST 27, 2004)                                           

$1,150,000,000

[LUBRIZOL LOGO] 
THE LUBRIZOL CORPORATION

$400,000,000 4.625% SENIOR NOTES DUE 2009 
$450,000,000 5.5% SENIOR NOTES DUE 2014 
$300,000,000 6.5% SENIOR DEBENTURES DUE 2034
------------------
   The 2009 Notes will bear interest at the rate of 4.625% per year and will
mature on October 1, 2009. The 2014 Notes will bear interest at the rate of 5.5%
per year and will mature on October 1, 2014. The debentures will bear interest  
at the rate of 6.5% per year and will mature on October 1, 2034. Interest on the
notes and debentures is payable on April 1 and October 1 of each year, beginning
on April 1, 2005. We may redeem some or all of each series of notes and         
debentures at any time. The redemption prices are discussed under the caption   
"Description of the Notes and Debentures -- Optional Redemption."               

   The notes and debentures will be unsecured and unsubordinated obligations
of our company and will rank equally with all of our other unsecured and        
unsubordinated indebtedness. Our wholly owned direct and indirect domestic      
subsidiaries will guarantee the notes and debentures on an unsecured and        
unsubordinated basis.                                                           

   Concurrently with this offering, we are also conducting a separate public
offering of 13,400,000 common shares. Neither the completion of this offering   
nor the completion of the offering of common shares is contingent upon the      
other.                                                                          
------------------

  INVESTING IN THE NOTES AND DEBENTURES INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE S-11.                                                         

 Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.   
Any representation to the contrary is a criminal offense.                       
------------------

                                                        [Enlarge/Download Table]

                                                                PRICE TO      UNDERWRITING      PROCEEDS   
                                                               PUBLIC(1)        DISCOUNT         TO US     
                                                             --------------  --------------  --------------
                                                                                                           
Per 2009 Note...............................................    99.911%          0.900%         99.011%    
Total.......................................................  $399,644,000     $3,600,000     $396,044,000 
Per 2014 Note...............................................    99.339%          1.125%         98.214%    
Total.......................................................  $447,025,500     $5,062,500     $441,963,000 
Per Debenture...............................................    98.341%          1.425%         96.916%    
Total.......................................................  $295,023,000     $4,275,000     $290,748,000 

---------------                                                                 
(1) plus accrued interest, if any, from September 28, 2004.                     
------------------
    The underwriters expect to deliver the notes and debentures, in book-entry
form only, to purchasers on or about September 28, 2004.                        
------------------
CITIGROUP 
ABN AMRO INCORPORATED                                                           
WACHOVIA SECURITIES                                     
KEYBANC CAPITAL MARKETS       
LAZARD
                                     PNC CAPITAL MARKETS, INC.
September 23, 2004                                                              

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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY  
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT, AND THE UNDERWRITERS HAVE NOT, AUTHORIZED ANYONE TO PROVIDE YOU WITH       
DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT    
INFORMATION, YOU SHOULD NOT RELY ON IT. WE ARE NOT, AND THE UNDERWRITERS ARE    
NOT, MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT    
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS        
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN 
THE DATE ON THE FRONT COVER PAGE OF THOSE DOCUMENTS.                            

TABLE OF CONTENTS 

PROSPECTUS SUPPLEMENT 

                                                                [Download Table]


                                                                   
About this Prospectus Supplement and the Accompanying              
  Prospectus................................................   S-ii
Non-GAAP Financial Measures.................................   S-ii
Pro Forma Financial Information.............................   S-ii
Summary.....................................................    S-1
Risk Factors................................................   S-11
Use of Proceeds.............................................   S-20
Capitalization..............................................   S-21
Selected Historical Consolidated Financial Data of                 
  Lubrizol..................................................   S-23
Selected Historical Consolidated Financial Data of Noveon          
  International.............................................   S-25
Unaudited Pro Forma Consolidated Financial Information......   S-27
Management's Discussion and Analysis of Financial Condition        
  and Results of Operations.................................   S-34
Business....................................................   S-69
Management..................................................   S-93
Description of Other Indebtedness...........................   S-97
Description of the Notes and Debentures.....................   S-99
Material United States Federal Tax Considerations...........  S-107
Underwriting................................................  S-111

PROSPECTUS

                                                                [Download Table]
                                                                 
About this Prospectus.......................................    1
About The Lubrizol Corporation..............................    1
Where You Can Find More Information.........................    1
Forward-Looking Statements..................................    2
Use of Proceeds.............................................    3
Ratio of Earnings to Fixed Charges..........................    3
Description of Common Shares................................    4
Description of Debt Securities..............................    6
Plan of Distribution........................................   22
Legal Matters...............................................   25
Experts.....................................................   25

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ABOUT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS

Our disclosure document consists of two parts. The first part is this 
prospectus supplement, which describes this offering and certain other matters  
relating to us and our business. The second part, the accompanying prospectus,  
gives more general information about securities we may offer from time to time, 
some of which may not apply to the notes and debentures being offered in this   
offering.                                                                       

If the description of the notes and debentures varies between this    
prospectus supplement and the accompanying prospectus, you should rely on the   
information in this prospectus supplement.                                      

NON-GAAP FINANCIAL MEASURES 

     EBITDA presented in this prospectus supplement is a supplemental measure of
performance that is not required by, or presented in accordance with, accounting
principles generally accepted in the United States of America, or GAAP. See     
footnote 5 in the section of this prospectus supplement titled "Summary         
Historical and Pro Forma Consolidated Financial and Other Data" for the         
definition of EBITDA and related disclosure.                                    

   EBITDA has limitations as an analytical tool, and you should not consider
it in isolation, or as a substitute for analysis of our financial results       
prepared in accordance with GAAP. Some of these limitations are:                

  - EBITDA does not reflect our cash expenditures, future requirements for
capital expenditures or contractual commitments;                  

     - EBITDA does not reflect changes in, or cash requirements for, our working
capital needs;                                                    

 - EBITDA does not reflect the significant interest expense, or the cash
   requirements necessary to make interest or principal payments, on our
debts;                                                            

   - although depreciation and amortization are non-cash charges, the assets
   being depreciated and amortized will often have to be replaced in the
future, and EBITDA does not reflect any cash requirements for such
replacements;                                                     

    - EBITDA does not reflect the impact of earnings or charges resulting from
     matters we consider not to be indicative of our ongoing operations; and

    - other companies in our industry may calculate EBITDA differently than we
do, limiting its usefulness as a comparative measure.             

    Because of these limitations, EBITDA should not be considered as a measure
of discretionary cash available to us to invest in the growth of our business.  
We compensate for these limitations by relying primarily on our GAAP results and
using EBITDA only supplementally.                                               

PRO FORMA FINANCIAL INFORMATION 

This prospectus supplement contains various references to pro forma   
financial information. This pro forma financial information is included in, or  
is derived from, the "Unaudited Pro Forma Consolidated Financial Information"   
that has been prepared in conformity with Regulation S-X beginning on page S-27.
This unaudited pro forma financial information gives effect to the June 3, 2004 
acquisition of Noveon International, Inc. (see page S-72 for a further          
discussion of the acquisition) and the long-term financing thereof as if the    
acquisition had occurred on January 1, 2003. Our second quarter 2004 Report on  
Form 10-Q, incorporated by reference in the accompanying prospectus, also       
includes pro forma financial information for the six months ended June 30, 2003 
and 2004. The pro forma financial information in the Report on Form 10-Q,       
prepared in accordance with GAAP, reflects the acquisition of Noveon            
International as if the acquisition occurred at the beginning of each of the    
six-month periods ended June 30, 2003 and 2004, which differs in presentation   
from what is required under Regulation S-X in the preparation of the "Unaudited 
Pro Forma Consolidated Financial Information" included herein. As a result of   
these differences in pro forma basis of presentation, some acquisition-related  
costs and financing costs, such as the write-off of in-process research and     
development costs and the costs associated with the inventory purchase          
accounting adjustment that is being charged to cost of sales, are recognized as 
expense in the Report on Form 10-Q pro forma consolidated statements of income  
for the six months ended June 30, 2003 and 2004. However, these costs are not   
reflected in the pro forma consolidated statement of income for the six months  
ended June 30, 2004 included in the "Unaudited Pro Forma Consolidated Financial 
Information" herein, and instead are reflected only in the pro forma            
consolidated statements of income for the 2003 periods presented in the         
"Unaudited Pro Forma Consolidated Financial Information" herein.                

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SUMMARY 

 This summary highlights certain information appearing elsewhere in this
prospectus supplement. This summary is not complete and does not contain all of 
the information that you should consider before purchasing notes or debentures. 
We encourage you to read the entire prospectus supplement and the accompanying  
prospectus carefully, including the "Risk Factors" section, and the documents   
incorporated by reference before making an investment decision. Unless the      
context requires otherwise, references to "Lubrizol," "we," "us" and "our" refer
collectively to The Lubrizol Corporation and its consolidated subsidiaries,     
including Noveon International, Inc., which we acquired on June 3, 2004.        

ABOUT LUBRIZOL

OVERVIEW                                                                        

   We are a leading global producer and marketer of technologically advanced
chemicals and specialty materials for the transportation, consumer and          
industrial markets. Our business is founded on technological leadership.        
Innovation provides opportunities for us in growth markets as well as advantages
over our competitors. From a base of approximately 3,000 patents, we use our    
product development and formulation expertise to sustain our leading market     
positions and fuel our future growth. We create additives, ingredients, resins  
and compounds that enhance the performance, quality and value of our customers' 
products, while minimizing their environmental impact. Our products are used in 
a broad range of applications, and are sold into stable markets such as those   
for engine oils, specialty driveline lubricants and metalworking fluids, as well
as higher growth markets such as personal care and pharmaceutical products and  
performance coatings and inks. Our specialty materials products are also used in
a variety of industries, including the telecommunications, construction,        
footwear and automotive industries.                                             

     We are an industry leader in many of the markets in which our product lines
compete. We hold the #1 global position in the lubricant additives market. We   
also produce products with well recognized brand names, such as Anglamol(R)     
(gear oil additives), Carbopol(R) (acrylic thickeners for personal care         
products), Estane(R) (thermoplastic polyurethane, or TPU), Hycar(R) (water-borne
acrylic emulsions for performance coatings) and TempRite(R) (chlorinated        
polyvinyl chloride (CPVC) resins and compounds used in plumbing systems).       

We are geographically diverse, with an extensive global manufacturing,
supply chain, technical and commercial infrastructure. We operate facilities in 
26 countries, comprised of production facilities in 22 countries, laboratories  
in six countries and offices in 25 countries, in key regions around the world.  
We sell our products in more than 100 countries and believe that our customers  
recognize and value our ability to provide customized, high quality,            
cost-effective performance formulations and solutions worldwide. We also believe
our customers value our global supply chain capabilities.                       

 Our pro forma consolidated results for the year ended December 31, 2003
included net revenues of $3,182.2 million, net income of $52.5 million and      
EBITDA of $433.6 million. Our pro forma consolidated results for the six months 
ended June 30, 2004 included net revenues of $1,837.8 million, net income of    
$79.9 million and EBITDA of $292.7 million, compared with net revenues of       
$1,596.4 million, net income of $29.0 million and EBITDA of $234.8 million for  
the six months ended June 30, 2003. See the section of this prospectus          
supplement titled "Pro Forma Financial Information." We have generated          
consistently strong cash flow from our diverse product lines, leading market    
positions, disciplined capital expenditure programs and working capital         
management. We believe our strong cash flow will enable us to maintain our      
leading market positions and to invest in targeted growth strategies while      
continuing to reduce indebtedness.                                              

THE NOVEON INTERNATIONAL ACQUISITION                                            

On June 3, 2004, we acquired Noveon International, a leading global   
producer and marketer of technologically advanced specialty materials and       
chemicals used in the industrial and consumer markets, for net cash of $794.8   
million and assumed debt of $1,103.1 million. With the acquisition of Noveon    
International, we have accelerated our program to attain a substantial presence 
in the personal care and                                                        

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coatings markets by adding a number of higher growth, industry-leading products 
under highly recognizable brand names, including Carbopol(R) and Hycar(R), to   
our already strong portfolio of lubricant and fuel additive products and        
consumer product ingredients. Additionally, Noveon International has a number of
industry-leading specialty materials businesses, including TempRite(R) CPVC and 
Estane(R) TPU, that generate strong cash flow. We believe that the Noveon       
International acquisition meets the core tenets of our stated strategy to:      

- maintain technology leadership;                                     

    - apply our formulation expertise to extend applications into new markets;
and                                                               

- expand the global breadth of our businesses.                        

   We have established a target of $40.0 million in annual cost savings from
the integration of Noveon International that we expect to achieve by reducing   
costs of raw materials and outside services, rationalizing manufacturing        
operations and consolidating corporate functions, and repositioning our         
commercial development activities. Within a month of closing the acquisition, we
announced workforce reductions that are estimated to achieve $16.0 million in   
annual cost savings. Longer term, we will seek to grow revenues and profits by  
pursuing cross-marketing opportunities, leveraging our geographical             
infrastructure, enhancing product development capabilities and further          
streamlining operations.                                                        

OUR BUSINESS                                                                    

Following our acquisition of Noveon International, we reorganized our 
business into two business units and reporting segments: the lubricant additives
segment, also referred to as Lubrizol Additives, and the specialty chemicals    
segment, also referred to as Noveon. For the year ended December 31, 2003, the  
lubricant additives segment represented 56% and the specialty chemicals segment 
represented 44% of our pro forma consolidated net sales.                        

     LUBRICANT ADDITIVES.  The lubricant additives segment is the leading global
supplier of additives for transportation and industrial lubricants. We pioneered
the development of lubricant additives over 75 years ago and continue to        
maintain leadership in this $5.0 billion industry today. Our customers rely on  
our products to reduce environmental impact and improve the performance and     
lifespan of critical components, such as engines, transmissions and gear drives 
for cars, trucks, buses, off-highway equipment, marine engines and industrial   
applications. Our products serve to increase cost-effectiveness by reducing     
friction and heat, resisting oxidation, minimizing deposit formation, and       
preventing corrosion and wear. Through our in-house research, development and   
testing programs, we have the capability to invent and develop a broad range of 
proprietary chemical components, including antioxidants, anti-wear agents,      
corrosion inhibitors, detergents, dispersants, friction modifiers and viscosity 
modifiers. We have three primary product lines within the Lubrizol Additives    
segment: Engine Additives, Specialty Driveline and Industrial Oil Additives, and
Services and Equipment.                                                         

     In 2003, the Lubrizol Additives segment generated pro forma net revenues of
$1,796.7 million and pro forma segment operating income of $201.5 million. For  
the six months ended June 30, 2004, the Lubrizol Additives segment generated pro
forma net revenues of $1,013.3 million and pro forma segment operating income of
$135.5 million, and for the six months ended June 30, 2003, the Lubrizol        
Additives segment generated pro forma net revenues of $903.2 million and pro    
forma segment operating income of $114.2 million. See the section of this       
prospectus supplement titled "Pro Forma Financial Information."                 

    SPECIALTY CHEMICALS.  The specialty chemicals segment represents a diverse
portfolio of performance chemicals. We have three primary product lines within  
our Noveon segment:                                                             

  - Consumer Specialties.  We are a global producer of specialty chemicals
targeting the personal care, pharmaceutical and food and beverage 
industries and we are a provider of engineered adhesives, polymer 
    additives and specialty emulsifiers. Key products in this product line
include Carbopol(R) acrylic thickeners, film formers, fixatives,  
      emollients, silicones, botanicals, active pharmaceutical ingredients and
     intermediates, benzoate preservatives, fragrances, synthetic food dyes,
natural                                                           

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colorants, Hycar(R) reactive liquid polymers, rubber and lubricant
   antioxidants, rubber accelerators and ADEX(TM) emulsifiers for mining
explosives.                                                       

    - Performance Coatings.  We are a leading supplier of specialty resins and
    additives for the coatings and inks markets worldwide. We offer a wide
  range of products for formulating paints, coatings and inks, such as
  water-based polymer emulsions and dispersions, acrylic emulsions and
    polyurethane dispersions, non-aqueous acrylic resins, high-performance
   hyperdispersants, surface modifiers, rheology control additives, foam
control additives and other proprietary products.                 

   - Specialty Materials.  We are the largest global supplier of CPVC resins
and compounds, sold under the trademark TempRite(R). We are also a
      leading producer of cross-linked polyethylene compounds (PEX) sold under
the trademark TempRite(R). Applications for TempRite(R) resins and
       compounds include piping for residential and commercial plumbing and fire
    sprinkler systems. In addition, we are a leading producer of TPU, sold
   under the trademark Estane(R). Applications for Estane(R) TPU include
plastic film and sheet for various coatings processes.            

  In 2003, the Noveon segment generated pro forma net revenues of $1,385.5
million and pro forma segment operating income of $86.9 million. For the six    
months ended June 30, 2004, the Noveon segment generated pro forma net revenues 
of $824.5 million and pro forma segment operating income of $80.0 million, and  
for the six months ended June 30, 2003, the Noveon segment generated pro forma  
net revenues of $693.2 million and pro forma segment operating income of $45.7  
million.                                                                        

COMPETITIVE STRENGTHS                                                           

     TECHNOLOGY LEADERSHIP.  We pioneered the development of lubricant additives
over 75 years ago and continue to maintain technology leadership in the industry
today. Our extensive knowledge of surface-active chemistry is the primary       
technology platform from which we drive innovation and new product development  
in lubricant and fuel additives, as well as additives for coatings and          
ingredients for personal care products. We believe that our expertise is        
critical to meeting our customers' needs, sustaining our competitive advantages 
and capitalizing on growth opportunities. Excluding acquisitions, in each of the
past five years, approximately 40% of sales were from products introduced within
the previous five years. The acquisition of Noveon International has further    
complemented and enhanced our technological capabilities. We both share a strong
foundation in polymer chemistry. All our dispersants, which are our highest     
volume class of additives, are polymers, as are most of our rheology control    
agents. Our dispersant technology protects the surfaces of equipment by         
suspending contaminant particles in fluids, and our rheology chemistry modifies 
the viscosity, or flow characteristics, of a fluid. Noveon International's      
expertise in polymer chemistry led to the invention of Carbopol(R), the world's 
leading acrylic thickener. We employ more than 100 PhDs in our state-of-the-art 
laboratories in North America, Europe and Asia, helping us to enhance our       
leadership in our markets. Our commitment to technology is also demonstrated by 
continued investment in research and development. For the year ended December   
31, 2003, on a pro forma basis, we invested $211.7 million, or 6.7% of net      
sales, in research, testing and development activities.                         

    LEADING MARKET POSITIONS.  We hold the #1 global position in the lubricant
additives market, which includes engine oils, specialty driveline lubricants and
industrial oil additives. Approximately 56% of our pro forma consolidated net   
sales for the year ended December 31, 2003 were generated from sales into that  
market. Additionally, other of our products that hold #1 or #2 global positions 
include Carbopol(R) acrylic thickener, Estane(R) TPU, Lanco(R) coatings surface 
modifiers, Solsperse(R) hyperdispersants, TempRite(R) CPVC and Hycar(R) reactive
liquid polymers. These other leading products represented approximately 17% of  
our pro forma consolidated net sales for the year ended December 31, 2003. In   
each of these product lines, we have developed formulation and production       
advantages that have allowed us to sustain our market leadership.               

 SPECIALIZED VALUE-ADDED PRODUCTS.  Our products are used to enhance our
customers' products. Our products generally represent a small percentage of our 
customers' production costs, yet are critical to end-product performance. Many  
of our products are developed in direct cooperation with our customers to meet  
their specific needs, often resulting in long-standing and loyal customer       
relationships. For decades we have worked with many of our lubricant additive   
customers on various joint technology development projects, such                

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as customized formulations for their premium product lines. In addition, many of
our products are specified in the formulations of original equipment            
manufacturers (OEMs) and other of our customers, resulting in significant       
barriers to changing suppliers. In our lubricant additives business, we work    
with OEMs to design customer-specific additives for use with the manufacturers' 
equipment. For example, we formulate complex additive packages for automatic    
transmission fluids with automotive and transmission OEMs to optimize the       
performance of the transmission. We also work with coating producers to develop 
paints with unique properties. Finally, our carbomer thickeners are specified   
for use in personal care and pharmaceutical applications, and our FDA-approved  
polymers are specified for use in food-packaging applications.                  

GLOBAL INFRASTRUCTURE.  We develop, manufacture and sell our products 
around the world. Our global infrastructure enables us to fulfill promptly the  
procurement demands of our customers, who are increasingly demanding a          
comprehensive supply solution to match their global operations. Over the last 75
years, we have made significant investments in our global operations that have  
contributed to our market leadership position. Recently, we made investments in 
emerging markets such as China and India that we expect will lead to further    
growth opportunities in these markets. We believe our global presence moderates 
the effects of a single region's economic cycles and gives us an advantage over 
many competitors. For the six months ended June 30, 2004, 51% of our pro forma  
consolidated net sales were originated in North America, 27% in Europe, 17% in  
the Asia/Pacific region and the Middle East and 5% in Latin America.            

EXPERIENCED MANAGEMENT TEAM.  Our senior management team consists of  
professionals with extensive experience in the specialty chemicals industry.    
These managers have successfully operated our business during various industry  
conditions and cycles and are continually focused on improving productivity,    
maximizing operating efficiency and optimizing the use of our capital resources.
Management has demonstrated its ability to improve operating performance, reduce
the cost structure and maximize long-term profitability of acquired companies.  

CORPORATE STRATEGY                                                              

     Our corporate strategy is balanced between sustaining our market leadership
in mature markets, such as lubricant additives, and expanding our leadership in 
higher growth markets, such as ingredients for personal care products. At the   
core of our corporate strategy is our intention to continue to invest in        
technology focused on identified market needs to create product differentiation 
and sustainable competitive advantages.                                         

STRENGTHEN TECHNOLOGY LEADERSHIP.  We are committed to our internal   
research and development as a means to strengthen our technology leadership and 
to sustain and expand our product offerings. We believe technology leadership is
essential to sustaining our market leadership and profitability. We believe our 
customers highly value our responsiveness to their needs, such as formulating   
products that adhere to regulatory requirements and developing customized and   
specialized products. For example, well in advance of its required introduction,
we met a significant technical challenge in formulating our products to meet the
North American passenger car motor oil standards for the 2005 model year. These 
standards require improved control of emissions and greater fuel economy, and we
are achieving higher prices with our new formulations. We have also developed a 
new resin with unique adhesion properties for difficult-to-coat surfaces. This  
resin is the key component in a paint formulation that has been successfully    
commercialized by a major global coating producer.                              

APPLY OUR FORMULATION EXPERTISE TO EXTEND OUR TECHNOLOGY INTO NEW     
APPLICATIONS.  We intend to utilize our technological expertise to modify       
existing products continuously to broaden their usage. For example, we modified 
a dispersant originally used to lighten the color and improve the clarity in    
motor oils for use as an emulsifier providing stability in the formulation of   
skin creams and sunscreens. We modified another of our products, which was      
originally used as a motor oil detergent in the 1960s, for use in the automotive
rustproofing market. Then, as the rustproofing market declined in the 1980s, we 
developed a modified component of this automotive undercoating for use as a     
"no-drip" thickener for industrial coatings. More recently, we developed a clear
version of this thickener to be used for architectural coatings.                

   EXPAND THE GLOBAL BREADTH OF OUR BUSINESS.  We will continue to serve our
existing multinational customers as they penetrate emerging markets, and will   
also pursue new customers in those regions. We                                  

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selectively add sales, marketing and research and development personnel in      
targeted regions and follow with further infrastructure expansion as the markets
for our customers' products develop. We are focused specifically on expanding   
our business in the Asia/Pacific region, in particular China. For example, in   
our lubricant additives business, we have a joint venture with PetroChina to    
serve the local market for engine oils. Additionally, we have begun to build our
commercial and technical sales presence in China for our products outside of the
joint venture, such as our industrial lubricant additives, coating additives,   
personal care ingredients and specialty materials products. Our focus on the    
region has generated higher sales. In the first half of 2004, our total pro     
forma consolidated net sales in the Asia/Pacific region increased 21% over the  
first half of 2003.                                                             

     PURSUE PRODUCTIVITY EFFICIENCIES.  We continually seek ways to increase our
productivity by pursuing operational efficiencies, reducing our fixed cost      
structure, rationalizing capacity and efficiently managing capital spending. For
example, in lubricant additives, we implemented a program in 2003 to achieve a  
more competitive cost structure that resulted in annual savings of approximately
$20.0 million. Excluding acquisitions, since 1996 we have reduced the number of 
production units by 23%, formulating components by 37% and manufacturing        
headcount by 29%, while shipment volume has increased by 18%. For the businesses
we acquire, we look to eliminate duplicative costs and realize synergies. Within
a month following the Noveon International acquisition, we announced workforce  
reductions that are estimated to achieve $16.0 million in annual cost savings.  

 OPTIMIZE OUR BUSINESS PORTFOLIO.  We will continue to make decisions on
capital allocation, acquisitions and divestitures based on growth and           
profitability targets. Since 2000, we have completed nine acquisitions,         
including our acquisition of Noveon International, which expanded our business  
portfolio into higher growth markets. We expect to continue to improve our      
portfolio mix by allocating more resources to higher growth product lines and   
seeking to make selective, accretive acquisitions of assets and technology that 
focus on value-added applications and complement our current product offerings  
and capabilities. At the same time, we will continue to support our lubricant   
additives business by emphasizing market leadership, a competitive cost         
structure and free cash flow generation. Finally, we will divest underperforming
or non-strategic businesses in order to optimize our portfolio and improve our  
profitability and financial flexibility. We have identified possible divestiture
candidates with aggregate annual revenues of $300.0 to $500.0 million.          

RECENT DEVELOPMENTS                                                             

    In a press release dated August 30, 2004, we, among other things, affirmed
our prior 2004 consolidated after-tax net income guidance originally given in   
July 2004. We also announced that we now believe, due to recent raw material    
price increases, that the contribution to net income from our specialty         
chemicals segment will be less than previously expected, offset by a higher than
expected contribution from our lubricant additives segment.                     

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THE OFFERING

Issuer........................   The Lubrizol Corporation, an Ohio corporation. 

Guarantors....................   Our wholly owned, direct and indirect domestic 
                           subsidiaries will guarantee the notes and
                               debentures on an unsecured and unsubordinated
basis.        

Securities Offered............   $400.0 million aggregate principal amount of   
                              4.625% Senior Notes due 2009, $450.0 million
                                 aggregate principal amount of 5.5% Senior Notes
                                 due 2014 and $300.0 million aggregate principal
                            amount of 6.5% Senior Debentures due 2034.

Maturity......................   The 2009 Notes will mature on October 1, 2009, 
                               the 2014 Notes will mature on October 1, 2014
                              and the debentures will mature on October 1,
2034.         

Ranking.......................   The notes and debentures will be unsecured and 
                                 unsubordinated obligations of Lubrizol and will
                           rank equally with all other unsecured and
                               unsubordinated indebtedness of Lubrizol. Each
                    guarantee will be an unsecured and
                                 unsubordinated obligation and will rank equally
                             with all other unsecured and unsubordinated
                              indebtedness of the guarantor. The notes and
                               debentures and the guarantees thereof will be
                         effectively subordinated to all secured
                                indebtedness of Lubrizol and the guarantors to
                        the extent of the assets securing such
                                indebtedness. The notes and debentures will be
                                 structurally subordinated to all obligations of
                        Lubrizol's non-guarantor subsidiaries,
                        including claims with respect to trade
                               payables. Each guarantee will be structurally
                        subordinated to all obligations of the
                       guarantor's subsidiaries that are not
                              guarantors, including claims with respect to
                          trade payables. As of June 30, 2004, The
                              Lubrizol Corporation had $2,509.6 million of
                               total liabilities outstanding, the guarantors
                         had $578.1 million of total liabilities
                           outstanding, and Lubrizol's non-guarantor
                          subsidiaries had $313.4 million of total
          liabilities outstanding.

Interest on the Notes and                                                       
Debentures....................   Interest on the notes and debentures will      
                            accrue from September 28, 2004 and will be
                                payable on April 1 and October 1 of each year,
             beginning on April 1, 2005.

Sinking Fund..................   None.                                          

Optional Redemption...........   At any time, we may redeem each series of notes
                           and debentures, in whole or in part, at a
                               redemption price equal to the greater of 100%
                         of the principal amount of the notes or
                              debentures to be redeemed and the sum of the
                          present value of the remaining scheduled
                                 payments of principal and interest on the notes
                          or debentures, as the case may be, to be
                             redeemed (not including any portion of such
                             payments of interest accrued to the date of
                                redemption), discounted to the redemption date
                                on a semiannual basis at the Adjusted Treasury
                         Rate (as defined in the section of this
                              prospectus supplement titled "Description of
             the Notes and Debentures").

Covenants.....................   The indenture governing the notes and the      
                       debentures will limit what we and our
                                restricted subsidiaries may do. The provisions
                            of the indenture will, among other things,
       limit our ability to:

               - incur secured indebtedness;

 - create liens;

                           - enter into sale/leaseback transactions;

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             - merge or consolidate; and

             - transfer and sell assets.

                            These covenants are subject to a number of
                               important limitations and exceptions. See the
                               section of the accompanying prospectus titled
                   "Description of Debt Securities."

Use of Proceeds...............   We expect to use the net proceeds of this      
                                offering and the concurrent offering of common
                                shares to retire approximately $2.0 billion of
                         the indebtedness incurred by us under a
                              temporary bridge facility in connection with
                                 our acquisition of Noveon International, to pay
                            fees and expenses of the offerings and for
                         general corporate purposes. Neither the
                                completion of this offering nor the completion
                                of the offering of common shares is contingent
                         upon the other. See the section of this
                                 prospectus supplement titled "Use of Proceeds."

DTC Eligibility...............   The notes and debentures will be issued in     
                              fully registered book-entry form and will be
                             represented by one or more permanent global
                               securities without coupons. Global securities
                            will be deposited with a custodian for and
                            registered in the name of a nominee of The
                               Depository Trust Company ("DTC") in New York,
                          New York. Beneficial interests in global
                            securities will be shown on, and transfers
                                thereof will be effected only through, records
                               maintained by DTC and its direct and indirect
                       participants, including Euroclear and
                          Clearstream. Your interest in any global
                                security may not be exchanged for certificated
                             securities, except in limited circumstances
                           described herein. See the section of this
                              prospectus supplement titled "Description of
                                 the Notes and Debentures -- Book-Entry Delivery
  and Settlement."

Risk Factors..................   See the section of this prospectus supplement  
                              titled "Risk Factors" beginning on page S-11
                       and the other information included or
                              incorporated by reference in this prospectus
                                supplement and the accompanying prospectus for
                         a discussion of factors that you should
                                 consider carefully before deciding to invest in
          our notes or debentures.

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SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL AND OTHER DATA

   The following table presents summary financial and other data of Lubrizol
and its subsidiaries as of the dates and for the periods indicated. The data as 
of and for the years ended December 31, 1999, 2000, 2001, 2002 and 2003 have    
been derived from the audited consolidated financial statements of Lubrizol and 
its subsidiaries as of and for the fiscal years ended December 31, 1999, 2000,  
2001, 2002 and 2003. The data as of and for the six months ended June 30, 2003  
and 2004 have been derived from the unaudited interim consolidated financial    
statements of Lubrizol and its subsidiaries as of and for the six months ended  
June 30, 2003 and 2004. In the opinion of management, the unaudited consolidated
financial statements include all adjustments, consisting only of normal         
recurring adjustments, necessary for a fair presentation of the results of      
operations, financial position and cash flows. The results for the six months   
ended June 30, 2004 are not necessarily indicative of the results that may be   
expected for the entire year.                                                   

     The following table also sets forth summary pro forma consolidated data for
Lubrizol for the year ended December 31, 2003 and the six months ended June 30, 
2003 and 2004. The pro forma statement of operations data give effect to the    
acquisition of Noveon International that occurred on June 3, 2004 and related   
financing activities as if such transactions had been consummated on January 1, 
2003 and the acquisition was accounted for as a purchase. The pro forma         
financial information is not necessarily indicative of either future results of 
operations or the results that might have occurred if the foregoing transactions
had been consummated on the dates indicated above. We cannot assure you that    
assumptions used in the preparation of the pro forma financial data will prove  
to be correct.                                                                  

    You should read the summary financial and other data set forth below along
with the sections in this prospectus supplement titled "Management's Discussion 
and Analysis of Financial Condition and Results of Operations," "Selected       
Historical Consolidated Financial Data of Lubrizol," "Unaudited Pro Forma       
Consolidated Financial Information" and the consolidated financial statements of
Lubrizol and Noveon International and related notes incorporated by reference in
the accompanying prospectus.                                                    

                                                        [Enlarge/Download Table]

                                                         HISTORICAL                          
                                    ----------------------------------------------------     

                                                  YEARS ENDED DECEMBER 31,                   
                                    ----------------------------------------------------     
                                      1999       2000       2001       2002       2003       
                                    --------   --------   --------   --------   --------     
                                        (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)         
                                                                                             
OPERATING RESULTS:                                                                           
Revenues..........................  $1,780.3   $1,775.8   $1,844.6   $1,983.9   $2,052.1     
Cost of sales.....................   1,227.3    1,278.2    1,335.5    1,416.3    1,507.8     
Selling and administrative                                                                   
 expenses.........................     181.2      168.0      177.4      196.9      202.9     
Research, testing and development                                                            
 expenses.........................     145.9      150.8      158.5      168.3      166.9     
Amortization expense..............      11.4       12.8       14.1        4.2        4.9     
Write-off of acquired in-process                                                             
 research and development.........         -          -          -          -          -     
Restructuring charges (credits)...      19.6       (4.5)         -          -       22.5     
Gain on litigation settlements....      17.6       19.4          -          -          -     
Interest expense..................      29.7       26.9       25.0       23.3       25.1     
Other income, net.................      12.6        7.3        5.8        5.5        7.1     
Provision for income taxes........      72.4       52.3       45.8       54.1       38.3     
Income before cumulative effect of                                                           
 change in accounting                                                                        
 principle(1).....................     123.0      118.0       94.1      126.3       90.8     
Cumulative effect of change in                                                               
 accounting principle(2)..........         -          -          -       (7.8)         -     
Net income........................     123.0      118.0       94.1      118.5       90.8     
NET INCOME PER SHARE(2):                                                                     
Net income per share..............  $   2.25   $   2.22   $   1.84   $   2.30   $   1.76     
Net income per share, diluted.....  $   2.25   $   2.22   $   1.83   $   2.29   $   1.75     


                                         HISTORICAL                    PRO FORMA             
                                    --------------------   ----------------------------------
                                      SIX MONTHS ENDED                     SIX MONTHS ENDED  
                                          JUNE 30,          YEAR ENDED         JUNE 30,      
                                    --------------------   DECEMBER 31,   -------------------
                                      2003       2004          2003         2003       2004  
                                    --------   ---------   ------------   --------   --------
                                          (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)       
                                                                                             
OPERATING RESULTS:                                                                           
Revenues..........................  $1,022.9   $ 1,300.2     $3,182.2     $1,596.4   $1,837.8
Cost of sales.....................     740.9       955.8      2,343.3      1,167.8    1,335.5
Selling and administrative                                                                   
 expenses.........................     101.0       122.0        338.1        167.4      184.1
Research, testing and development                                                            
 expenses.........................      82.2        86.3        211.7        103.7      107.0
Amortization expense..............       2.3         6.4         33.6         16.7       18.3
Write-off of acquired in-process                                                             
 research and development.........         -        35.0         35.0         35.0          -
Restructuring charges (credits)...       7.0         8.0         35.7         10.0       11.3
Gain on litigation settlements....         -           -            -            -          -
Interest expense..................      12.1        24.3        115.9         57.4       59.0
Other income, net.................       4.1         4.3          8.5          4.7        5.3
Provision for income taxes........      26.1        25.2         24.4         13.6       48.0
Income before cumulative effect of                                                           
 change in accounting                                                                        
 principle(1).....................      55.4        41.5         53.0         29.5       79.9
Cumulative effect of change in                                                               
 accounting principle(2)..........         -           -         (0.5)        (0.5)         -
Net income........................      55.4        41.5         52.5         29.0       79.9
NET INCOME PER SHARE(2):                                                                     
Net income per share..............  $   1.07   $    0.80     $   0.81     $   0.45   $   1.23
Net income per share, diluted.....  $   1.07   $    0.80     $   0.80     $   0.44   $   1.22


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                                                        [Enlarge/Download Table]

                                                        HISTORICAL                           
                                   ----------------------------------------------------      

                                                 YEARS ENDED DECEMBER 31,                    
                                   ----------------------------------------------------      
                                     1999       2000       2001       2002       2003        
                                   --------   --------   --------   --------   --------      
                                       (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)          
                                                                                             
BALANCE SHEET DATA (AT YEAR                                                                  
 END/QUARTER END):                                                                           
Total assets...................... $1,682.4   $1,659.5   $1,662.3   $1,860.1   $1,942.3      
Total debt........................    403.0      395.9      397.2      401.9      389.6      
Total shareholders' equity........    790.1      752.3      773.2      869.3      953.3      
OTHER DATA:                                                                                  
Net cash provided (used) by:                                                                 
 Operating activities............. $  289.0   $  226.2   $  195.8   $  244.9   $  194.8      
 Investing activities.............    (64.5)    (125.2)     (81.6)    (148.5)    (155.9)     
 Financing activities.............    (87.2)    (136.9)     (68.7)     (30.4)     (59.5)     
Capital expenditures..............     64.9       85.8       66.3       65.3       88.5      
Depreciation expense..............     88.3       88.0       84.7       91.6       95.5      
Amortization expense..............     11.4       12.8       14.1        4.2        4.9      
Write-off of acquired in-process                                                             
 research and development.........        -          -          -          -          -      
Ratio of earnings to fixed                                                                   
 charges(4).......................     7.71x      7.66x      6.97x      9.29x      6.19x     
EBITDA(5)......................... $  324.8   $  298.0   $  263.7   $  291.7   $  254.6      


                                        HISTORICAL                    PRO FORMA              
                                   --------------------   ---------------------------------- 
                                     SIX MONTHS ENDED                     SIX MONTHS ENDED   
                                         JUNE 30,          YEAR ENDED         JUNE 30,       
                                   --------------------   DECEMBER 31,   ------------------- 
                                     2003       2004          2003         2003       2004   
                                   --------   ---------   ------------   --------   -------- 
                                         (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)        
                                                                                             
BALANCE SHEET DATA (AT YEAR                                                                  
 END/QUARTER END):                                                                           
Total assets...................... $1,908.1   $ 4,427.3          n/a          n/a        n/a 
Total debt........................    396.2     2,380.3(3)        n/a         n/a        n/a 
Total shareholders' equity........    933.1       974.1(3)        n/a         n/a        n/a 
OTHER DATA:                                                                                  
Net cash provided (used) by:                                                                 
 Operating activities............. $   44.5   $    96.2          n/a          n/a        n/a 
 Investing activities.............    (36.5)   (1,002.9)         n/a          n/a        n/a 
 Financing activities.............    (29.0)      868.9          n/a          n/a        n/a 
Capital expenditures..............     36.8        42.2        145.1         66.4       65.2 
Depreciation expense..............     46.5        54.5        172.2         83.1       87.5 
Amortization expense..............      2.3         6.4         33.6         16.7       18.3 
Write-off of acquired in-process                                                             
 research and development.........        -        35.0         35.0         35.0          - 
Ratio of earnings to fixed                                                                   
 charges(4).......................     7.73x       3.73x        1.68x        1.75x      3.15x
EBITDA(5)......................... $  142.4   $   186.9     $  433.6     $  234.8   $  292.7 

---------------                                                                 

(1) The following table summarizes key data that reconciles segment operating   
    income to income before cumulative effect of change in accounting principle.
 See the section of this prospectus supplement titled "Pro Forma Financial
Information."                                                           

                                                        [Enlarge/Download Table]

                                                                HISTORICAL                             PRO FORMA            
                                                ------------------------------------------   ------------------------------ 
                                                                             SIX MONTHS                       SIX MONTHS    
                                                YEARS ENDED DECEMBER 31,   ENDED JUNE 30,     YEAR ENDED    ENDED JUNE 30,  
                                                ------------------------   ---------------   DECEMBER 31,   --------------- 
                                                 2001     2002     2003     2003     2004        2003        2003     2004  
                                                ------   ------   ------   ------   ------   ------------   ------   ------ 
                                                                           (DOLLARS IN MILLIONS)                            
                                                                                                                            
Lubricant additives segment operating income... $205.1   $235.2   $201.5   $114.2   $135.5     $ 201.5      $114.2   $135.5 
Specialty chemicals segment operating income                                                                                
 (loss)........................................  (11.3)     0.4      0.9      1.4     16.4        86.9        45.7     80.0 
Corporate expenses.............................  (32.2)   (36.4)   (33.7)   (20.4)   (21.6)      (33.7)      (20.4)   (21.6)
Corporate other income (expense)...............   (3.4)    (2.2)     4.2      3.3      1.8         4.2         3.3      1.8 
Write-off of acquired in-process research and                                                                               
 development...................................      -        -        -        -    (35.0)      (35.0)      (35.0)       - 
Restructuring charges..........................      -        -    (22.5)    (7.0)    (8.0)      (35.7)      (10.0)   (11.3)
Interest expense - net.........................  (18.3)   (16.6)   (21.3)   (10.0)   (22.4)     (110.8)      (54.7)   (56.5)
Provision for income taxes.....................  (45.8)   (54.1)   (38.3)   (26.1)   (25.2)      (24.4)      (13.6)   (48.0)
                                                ------   ------   ------   ------   ------     -------      ------   ------ 
Income before cumulative effect of change in                                                                                
 accounting principle.......................... $ 94.1   $126.3   $ 90.8   $ 55.4   $ 41.5     $  53.0      $ 29.5   $ 79.9 
                                                ======   ======   ======   ======   ======     =======      ======   ====== 

(2) For the year ended December 31, 2002, Lubrizol changed its method of        
   accounting for goodwill and other intangible assets to conform to Statement
of Financial Accounting Standards ("SFAS") No. 142. A charge of $7.8    
   million, or $0.15 per share, was recognized as the cumulative effect of the
change in accounting principle. Effective January 1, 2003, Noveon       
International changed its method of accounting for asset retirement     
obligations to conform to SFAS No. 143. A charge of $0.5 million was    
    recognized as the cumulative effect of the change in accounting principle in
the pro forma results of operations.                                    

(3) The following sets forth the June 30, 2004 consolidated balance sheet data  
  of Lubrizol as adjusted to give effect to the proposed long-term financing
    related to Lubrizol's June 3, 2004 acquisition of Noveon International as if
the long-term financing had occurred on June 30, 2004 (in millions).    

                                                                [Download Table]
                                                                      
Total debt, as adjusted.....................................  $2,046.9
Total shareholders' equity, as adjusted.....................   1,386.1
For more information regarding our historical and as adjusted         
capitalization following this offering and the concurrent offering of 
common shares, see "Capitalization" beginning on page S-21.           

(4) The ratio of earnings to fixed charges has been computed by dividing        
earnings before income taxes (including distributed income of equity    
 investees) plus fixed charges (excluding capitalized interest expense) by
   fixed charges. Fixed charges consist of interest expense on debt (including
amortization of debt issuance expense and capitalized interest).        

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(5) The following table sets forth the calculation of EBITDA, which represents  
earnings before interest, taxes, depreciation and amortization. The     
write-off of acquired in-process research and development is included in
    amortization expense. We present EBITDA because it is a basis upon which our
 management assesses financial performance and we consider it an important
    supplemental measure of our performance and believe it is frequently used by
securities analysts, investors and other interested parties in the      
  evaluation of companies in our industry, many of which present EBITDA when
reporting their results. EBITDA is not a measurement of financial       
    performance under GAAP and should not be considered as an alternative to (1)
 net income determined in accordance with GAAP or (2) operating cash flows
determined in accordance with GAAP. Our calculation of EBITDA may not be
    comparable to the calculation of similarly titled measures reported by other
 companies. See the section of this prospectus supplement titled "Non-GAAP
Financial Measures."                                                    

                                                        [Enlarge/Download Table]

                                                   HISTORICAL                                PRO FORMA  
                      --------------------------------------------------------------------  ------------
                                                                      SIX MONTHS ENDED                  
                               YEARS ENDED DECEMBER 31,                   JUNE 30,           YEAR ENDED 
                      ------------------------------------------   -----------------------  DECEMBER 31,
                       1999     2000     2001     2002     2003       2003         2004         2003    
                      ------   ------   ------   ------   ------   ----------   ----------  ------------
                                                     (DOLLARS IN MILLIONS)                              
                                                                                                        
Net income........... $123.0   $118.0   $ 94.1   $118.5   $ 90.8     $ 55.4       $ 41.5       $ 52.5   
Add:                                                                                                    
  Depreciation and                                                                                      
    amortization.....   99.7    100.8     98.8     95.8    100.4       48.8         95.9        240.8   
  Interest expense...   29.7     26.9     25.0     23.3     25.1       12.1         24.3        115.9   
  Provision for                                                                                         
    income taxes.....   72.4     52.3     45.8     54.1     38.3       26.1         25.2         24.4   
                      ------   ------   ------   ------   ------     ------       ------       ------   
EBITDA............... $324.8   $298.0   $263.7   $291.7   $254.6     $142.4       $186.9       $433.6   
                      ======   ======   ======   ======   ======     ======       ======       ======   


                              PRO FORMA                                                                 
                      --------------------------                                                        
                           SIX MONTHS ENDED                                                             
                               JUNE 30,                                                                 
                      --------------------------                                                        
                          2003           2004                                                           
                      -------------   ----------                                                        
                        (DOLLARS IN MILLIONS)                                                           
                                                                                                        
Net income...........    $ 29.0         $ 79.9                                                          
Add:                                                                                                    
  Depreciation and                                                                                      
    amortization.....     134.8          105.8                                                          
  Interest expense...      57.4           59.0                                                          
  Provision for                                                                                         
    income taxes.....      13.6           48.0                                                          
                         ------         ------                                                          
EBITDA...............    $234.8         $292.7                                                          
                         ======         ======                                                          

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RISK FACTORS

You should carefully consider the risks described below and the other 
information included in this prospectus supplement, the accompanying prospectus 
and the documents incorporated by reference in the accompanying prospectus      
before investing in our notes or debentures. If any of the events contemplated  
by the following discussion of risks should occur, our business, results of     
operations and financial condition could suffer significantly. The risks        
described below are not the only risks that we face. Additional risks not       
currently known to us or that we currently deem immaterial may also impair our  
business.                                                                       

FINANCIAL RISKS                                                                 

 AS A RESULT OF OUR ACQUISITION OF NOVEON INTERNATIONAL, WE HAVE A SIGNIFICANT
AMOUNT OF INDEBTEDNESS, WHICH COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION
AND LIMIT OUR ABILITY TO GROW AND COMPETE SUCCESSFULLY IN OUR MARKETS.      

As a result of our acquisition of Noveon International, we have a     
significant amount of indebtedness. On an as-adjusted basis, as of June 30,     
2004, after giving effect to this offering, the concurrent offering of common   
shares and our expected use of the net proceeds from the offerings as described 
in "Use of Proceeds," we will have $2,046.9 million of outstanding indebtedness.
In addition, we and our subsidiaries could incur substantial additional         
indebtedness in the future. Our level of indebtedness could have important      
consequences for the holders of our notes and debentures. For example, it:      

 - will require us to dedicate a significant portion of our cash flow to
make interest and principal payments on our indebtedness, thereby 
 reducing the availability of our cash flow to fund working capital,
     capital expenditures, acquisitions or other general corporate purposes;

  - may reduce our cash flow due to increased interest expense in times of
rising interest rates;                                            

   - may limit our ability to borrow additional funds due to the restrictive
covenants contained in our credit facilities;                     

- may limit our flexibility to adjust to changing business and market 
      conditions and make us more vulnerable to a downturn in general economic
conditions;                                                       

- may make us less attractive to potential acquirors; and             

 - may put us at a competitive disadvantage relative to competitors that
have less debt.                                                   

   Any of the foregoing consequences could have a material adverse effect on
our future results of operations.                                               

A PORTION OF OUR INDEBTEDNESS CONSISTS OF BRIDGE FINANCING THAT IS DUE AND  
PAYABLE ON MAY 27, 2005. IF WE ARE UNABLE TO REFINANCE THIS INDEBTEDNESS, IT
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION.            

  Of our total indebtedness outstanding on June 30, 2004, $1,797.0 million
consists of bridge financing that is due and payable on May 27, 2005. Our       
ability to pay the principal of and interest on our bridge financing when it    
comes due will depend on our ability to successfully complete this offering and 
the concurrent offering of common shares on terms that are satisfactory to us.  
If, however, we do not complete these debt and equity offerings on a timely     
basis, we may be required to seek additional financing or sell debt or equity   
securities on terms that may not be favorable to us. No assurance can be given  
that any refinancing, additional borrowing or sale of debt or equity securities 
will be possible when needed or that we will be able to negotiate acceptable    
terms. In addition, our access to capital is affected by prevailing conditions  
in the financial and capital markets and other factors beyond our control. There
can be no assurance that market conditions will be favorable at the times that  
we require new or additional financing.                                         

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 THE LIMITS IMPOSED ON US BY THE RESTRICTIVE COVENANTS CONTAINED IN OUR CREDIT
 FACILITY COULD PREVENT US FROM MAKING ACQUISITIONS OR CAPITAL IMPROVEMENTS OR
CAUSE US TO LOSE ACCESS TO THAT FACILITY.                                   

    Our existing credit facility contains restrictive covenants that limit our
ability to, among other things:                                                 

- borrow money or guarantee the debts of others;                      

- use assets as security in other transactions;                       

- make investments or other restricted payments or distributions;     

- change our business or enter into new lines of business; or         

- sell or acquire assets or merge with or into other companies.       

In addition, our credit facility requires us to meet financial ratios,
including debt to consolidated EBITDA (as defined in the credit facility) and   
consolidated EBITDA (as defined in the credit facility) to interest expense.    
These restrictions could limit our ability to plan for or react to market       
conditions or meet extraordinary capital needs and could otherwise restrict our 
financing activities.                                                           

Our ability to comply with the covenants and other terms of our credit
facility will depend on our future operating performance. If we fail to comply  
with such covenants and terms, we will be in default and the maturity of the    
related debt could be accelerated and become immediately due and payable. We may
be required to obtain waivers from our lenders in order to maintain compliance  
under our credit facility, including waivers with respect to our compliance with
certain financial covenants. If we are unable to obtain any necessary waivers   
and the debt under our credit facility is accelerated, our financial condition  
would be adversely affected.                                                    

WE MAY NOT HAVE ACCESS TO CAPITAL IN THE FUTURE.                            

We may need new or additional financing in the future to expand our   
business or refinance existing indebtedness. If we are unable to access capital 
on satisfactory terms and conditions, we may not be able to expand our business 
or meet our payment requirements under our credit facilities. Our ability to    
obtain new or additional financing will depend on a variety of factors, many of 
which are beyond our control. We may not be able to obtain new or additional    
financing because we have substantial debt or because we may not have sufficient
cash flow to service or repay our existing or future debt. In addition,         
depending on market conditions and our financial performance, equity financing  
may not be available to us on satisfactory terms or at all.                     

WE COULD BE ADVERSELY AFFECTED IF OUR DEBT IS DOWNGRADED.                   

    Our ability to complete offerings of debt securities on satisfactory terms
in the future will depend on the status of our credit rating following the      
completion of this offering. The current rating of our senior unsecured         
long-term indebtedness is BB+ by Standard & Poor's Ratings Group ("S&P") and    
Baa3 by Moody's Investors Service, Inc. ("Moody's"). Either S&P or Moody's or   
both may downgrade our credit rating at any time, which would make it more      
difficult to complete offerings of debt securities on satisfactory terms and    
would generally result in increased future borrowing costs and adversely affect 
our access to capital.                                                          

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RISKS RELATING TO OUR BUSINESS                                                  

WE MAY ENCOUNTER DIFFICULTIES IN THE INTEGRATION OF NOVEON INTERNATIONAL AND
 THE OTHER BUSINESSES THAT WE AND NOVEON INTERNATIONAL HAVE RECENTLY ACQUIRED,
WHICH COULD DECREASE OUR FINANCIAL PERFORMANCE OR OUR ABILITY TO COMPETE    
SUCCESSFULLY IN OUR MARKETS.                                                

Integrating acquired businesses, and achieving the full benefit and   
potential efficiencies from such acquisitions, requires substantial management, 
financial and other resources and may pose several risks, some or all of which  
could have a material adverse effect on our business, financial condition or    
results of operations. These risks include:                                     

- difficulties in assimilation of acquired personnel, operations and  
technologies;                                                     

 - the need to manage a significantly larger business with operations in
different locations around the world;                             

   - diversion of management's attention from the ongoing development of our
existing businesses or other business concerns;                   

- potential loss of customers;                                        

- failure to retain key personnel of the acquired business; and       

- unforeseen operating difficulties and expenditures.                 

 If we experience any of these difficulties in our integration of Noveon
International or any of the other businesses that we or Noveon International    
have recently acquired, our financial performance and ability to compete        
successfully in any of our markets could be adversely affected.                 

  INCREASES IN RAW MATERIAL PRICES COULD REDUCE OUR PROFITABILITY AND REDUCTIONS
IN THE AVAILABILITY OF RAW MATERIAL SUPPLIES COULD DISRUPT OUR OPERATIONS.  

    Some of the raw materials that we use are derived from petrochemical-based
feedstocks, such as crude oil and natural gas, which have been subject to       
historical periods of rapid and significant movements in price. For example, our
average unit raw material costs increased 2% in 2001, decreased 6% in 2002,     
increased 9% in 2003 and increased 8% in the first half of 2004, excluding the  
impact of acquisitions. These fluctuations in price could be aggravated by      
political instability, terrorist attacks or other hostilities in oil-producing  
countries or elsewhere in the world and supply and demand factors, including    
OPEC production quotas and increased global demand for petroleum-based products.
We also use natural gas as fuel at our facilities, and increases in the price of
natural gas may reduce our profitability. Any significant variations in the cost
and availability of specialty and commodity materials or energy may negatively  
affect our business, financial condition or results of operations. We typically 
do not enter into hedging arrangements with respect to raw materials or energy, 
other than for natural gas and electricity. We may pass changes in the prices of
raw materials to our customers from time to time. However, we cannot always do  
so, and any limitation on our ability to pass through any price increases could 
affect our financial performance.                                               

We use significant quantities of a variety of specialty and commodity 
chemicals in our manufacturing processes, such as lubricant base oils (a        
derivative of crude oil); C4 feedstreams; acrylates; toluene; PVC; inorganic    
acids, bases and oxides; alcohols, glycols and polyols; olefins and esters;     
sulfonates; phenates; alkylates; sulfonic acids; and amines. These raw materials
are generally available from numerous independent suppliers. However, some of   
our raw material needs are met by a sole supplier or only a few suppliers. If   
any supplier that we rely on for raw materials ceases or limits production, we  
may incur significant additional costs, including capital costs, in order to    
find alternate, reliable raw material suppliers. We may also experience         
significant production delays while locating new supply sources.                

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WE FACE COMPETITION FROM OTHER CHEMICAL COMPANIES, WHICH COULD ADVERSELY    
AFFECT OUR REVENUE AND FINANCIAL CONDITION.                                 

   We actively compete with companies producing the same or similar products
and, in some instances, with companies producing different products designed for
the same uses. We encounter competition in price, delivery, service,            
performance, product innovation and product recognition and quality, depending  
on the product involved. For some of our products, our competitors are larger   
and have greater financial resources and less debt than we do. As a result,     
these competitors may be better able to withstand a change in conditions within 
the industries in which we operate, a change in the prices of raw materials or a
change in the economy as a whole.                                               

  Our competitors can be expected to continue to develop and introduce new
and enhanced products, which could cause a decline in market acceptance of our  
products. Current and future consolidation among our competitors and customers  
may also cause a loss of market share as well as put downward pressure on       
pricing. Additionally, a number of our niche product applications are customized
or sold for highly specialized uses. Our competitors could cause a reduction in 
the prices for some of our products as a result of intensified price            
competition. Competitive pressures can also result in the loss of major         
customers. If we cannot compete successfully, our business, financial condition 
and results of operations could be adversely affected.                          

FAILURE TO MAKE CONTINUED IMPROVEMENTS IN OUR TECHNOLOGY AND PRODUCTIVITY   
COULD HURT OUR COMPETITIVE POSITION.                                        

We believe that we must continue to enhance our existing products and 
develop and manufacture new products with improved capabilities in order to     
continue to be a market leader. We also believe that we must continue to make   
improvements in our productivity in order to maintain our competitive position. 
When we invest in new technologies, processes or production facilities, we face 
risks related to construction delays, cost overruns and unanticipated technical 
difficulties. Our inability to anticipate, respond to or utilize changing       
technologies could have a material adverse effect on our business and our       
results of operations.                                                          

  SOME OF OUR CUSTOMERS' BUSINESSES ARE CYCLICAL AND DEMAND BY OUR CUSTOMERS FOR
OUR PRODUCTS WEAKENS DURING ECONOMIC DOWNTURNS.                             

   A portion of our product sales is attributable to industries and markets,
such as the construction and metalworking industries, that historically have    
been cyclical and sensitive to relative changes in supply and demand and general
economic conditions. The demand for our products depends, in part, on the       
general economic conditions of the industries or national economies of our      
customers. Downward economic cycles in our customers' industries or countries   
may reduce sales of some of our products. It is not possible to predict         
accurately the factors that will affect demand for our products in the future.  
Any significant downturn in the health of the general economy, either globally  
or regionally, or of the markets in which we sell products could have an adverse
effect on our revenues and financial performance.                               

WE FACE NUMEROUS RISKS RELATING TO OUR FOREIGN OPERATIONS, INCLUDING FOREIGN
CURRENCY EXCHANGE RATE FLUCTUATIONS, EXCHANGE CONTROLS AND CURRENCY         
DEVALUATIONS THAT MAY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.           

Approximately 37% of our pro forma consolidated revenues in 2003 was  
generated in currencies other than the U.S. dollar, which is our reporting      
currency. We recognize foreign currency transaction gains and losses arising    
from our operations in the period incurred. As a result, currency fluctuations  
between the U.S. dollar and the currencies in which we do business have caused  
and will continue to cause foreign currency transaction gains and losses, which 
have historically been material and could continue to be material. We cannot    
predict the effects of exchange rate fluctuations upon our future operating     
results because of the number of currencies involved, the variability of        
currency exposures and the potential volatility of                              

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currency exchange rates. We take actions to manage our foreign currency         
exposure, such as entering into hedging transactions, where available, but we   
cannot assure you that our strategies will adequately protect our consolidated  
operating results from the effects of exchange rate fluctuations.               

 We also face risks arising from the imposition of exchange controls and
currency devaluations. Exchange controls may limit our ability to convert       
foreign currencies into U.S. dollars or to remit dividends and other payments by
our foreign subsidiaries or businesses located in or conducted within a country 
imposing controls. Currency devaluations result in a diminished value of funds  
denominated in the currency of the country instituting the devaluation and, if  
they occur or continue for significant periods, could adversely affect our      
earnings or cash flow.                                                          

 Certain of our non-U.S. subsidiaries and joint ventures may manufacture
goods destined for, or render services to, countries that are currently subject 
to trade restrictions and economic embargoes that prohibit U.S. incorporated    
entities, U.S. citizens and residents from engaging in commercial, financial or 
trade transactions with such countries, unless authorized by the Office of      
Foreign Assets Control or exempted by statute. If we are not in compliance with 
such laws and regulations, we may be subject to criminal and civil penalties,   
which may have an adverse effect on our business, financial condition and       
results of operations.                                                          

INTERNATIONAL SOCIAL, POLITICAL AND ECONOMIC CONDITIONS MAY ADVERSELY AFFECT
OUR OPERATING PERFORMANCE.                                                  

Our international operations are subject to the risks of labor unrest,
regional economic uncertainty, political instability, terrorism, expropriation  
of property, restrictions on the transfer of funds into or out of a country,    
trade restrictions, export duties, taxes and quotas, domestic and foreign       
customs and tariffs, and current and changing regulatory environments. Any of   
these events could have an adverse effect on our international operations in the
future by reducing the demand for our products, increasing the prices at which  
we can sell our products or otherwise having an adverse effect on our operating 
performance.                                                                    

OUR AND OUR SUPPLIERS' PRODUCTION FACILITIES ARE SUBJECT TO OPERATING RISKS 
THAT MAY ADVERSELY AFFECT OUR OPERATIONS.                                   

We are dependent upon the continued safe operation of our and our     
suppliers' production facilities. These production facilities are subject to    
hazards associated with the manufacture, handling, storage and transportation of
chemical materials and products, including leaks and ruptures, explosions,      
fires, inclement weather and natural disasters, unscheduled downtime and        
environmental hazards. Incidents at our or our suppliers' production facilities 
could temporarily shut down or otherwise disrupt our manufacturing operations,  
causing production delays and, with respect to our facilities, resulting in     
liability for workplace injuries and fatalities. In addition, some of our and   
our suppliers' production facilities are highly specialized, which limits our   
ability to shift production to other facilities in the event of an incident at a
particular facility. If a production facility, or a critical portion of a       
production facility, were temporarily shut down, we would likely incur higher   
costs for alternate sources of supply for our products. Some of our products    
involve the manufacture and/or handling of a variety of reactive, explosive and 
flammable materials. Use of these products by our customers could also result in
liability if an explosion, fire, spill or other accident were to occur. We      
cannot assure you that we will not experience these types of incidents in the   
future or that these incidents will not result in production delays or otherwise
have a material adverse effect on our business, financial condition or results  
of operations.                                                                  

 OUR PRODUCTION FACILITIES ARE OF THE TYPE THAT MAY ATTRACT TERRORIST ATTACKS,
AND ANY ATTACK MAY DISRUPT OUR OPERATIONS AND CAUSE US TO INCUR SIGNIFICANT 
COSTS AND LIABILITIES.                                                      

    Uncertainty surrounding the possibility and scope of terrorist attacks may
affect our operations in unpredictable ways, including the possibility that our 
chemical production facilities may become direct targets, or indirect           
casualties, of terrorist attacks. Although our production facilities are under a
heightened level of security, this level of security may be insufficient to     
prevent a terrorist attack. The resulting damage                                

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may be severe and could include loss of life and property damage. In addition,  
some of our production and other facilities are located at sites near to other  
chemical plants that may be potential targets of terrorist attacks. The         
resulting collateral damage may be significant and substantial. Available       
insurance coverage may not be sufficient to cover all of the damage incurred or 
may be prohibitively expensive.                                                 

 CERTAIN OF OUR EMPLOYEES ARE COVERED BY COLLECTIVE BARGAINING AGREEMENTS, AND
THE FAILURE TO RENEW THESE AGREEMENTS COULD RESULT IN LABOR DISRUPTIONS AND 
INCREASED LABOR COSTS.                                                      

   Employees at seven of our U.S. sites, who constitute approximately 11% of
our domestic employees, are organized by labor unions that have collective      
bargaining agreements with us that are subject to renegotiation. Four of the    
agreements expire in 2004 and 2005. Although we believe that our present labor  
relations are satisfactory, our failure to renew these agreements on reasonable 
terms as the current agreements expire could result in labor disruptions and    
increased labor costs, which could adversely affect our financial performance.  

THE APPLICABILITY OF NUMEROUS ENVIRONMENTAL LAWS TO OUR MANUFACTURING       
FACILITIES COULD CAUSE US TO INCUR MATERIAL COSTS AND LIABILITIES.          

We are subject to extensive federal, state, local and foreign         
environmental, safety and health laws and regulations concerning, among other   
things, emissions to the air, discharges to land and water and the generation,  
handling, treatment and disposal of hazardous waste and other materials. Under  
certain environmental laws, we can be held strictly liable for hazardous        
substance contamination of any real property we have ever owned, operated or    
used as a disposal site or for natural resource damages associated with such    
contamination. We are also required to maintain various environmental permits   
and licenses, many of which require periodic modification and renewal. Our      
operations entail the risk of violations of those laws and regulations, many of 
which provide for substantial fines and criminal sanctions for violations. We   
cannot assure you that we have been or will be at all times in compliance with  
all of these requirements.                                                      

In addition, these requirements and their enforcement may become more 
stringent in the future. Although we cannot predict the ultimate cost of        
compliance with any such requirements, the costs could be material.             
Non-compliance could subject us to material liabilities, such as government     
fines, third-party lawsuits or the suspension of non-compliant operations. We   
may also be required to make significant site or operational modifications at   
substantial cost. Future developments could also restrict or eliminate the use  
of or require us to make modifications to our products, which could have a      
significant negative impact on our results of operations and cash flows.        

  At any given time, we are involved in claims, litigation, administrative
proceedings and investigations of various types in a number of jurisdictions    
involving potential environmental liabilities, including clean-up costs         
associated with hazardous waste disposal sites, natural resource damages,       
property damages and personal injury. We cannot assure you that the resolution  
of these environmental matters will not have a material adverse effect on our   
results of operations or cash flows.                                            

     The ultimate costs and timing of environmental liabilities are difficult to
predict. Liability under environmental laws relating to contaminated sites can  
be imposed retroactively and on a joint and several basis. One liable party     
could be held responsible for all costs at a site, regardless of fault,         
percentage of contribution to the site or the legality of the original disposal.
We may also face liability with respect to acquired businesses for violations   
under environmental laws occurring prior to the date of our acquisition, and    
some or all of these liabilities may not be covered by indemnification from the 
sellers from which we acquired these businesses. We could incur significant     
costs, including cleanup costs, natural resources damages, civil or criminal    
fines and sanctions and third-party claims, as a result of past or future       
violations of, or liabilities under, environmental laws.                        

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IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, OUR PRODUCT   
SALES AND FINANCIAL PERFORMANCE COULD BE ADVERSELY AFFECTED.                

   We rely on a combination of patent, trade secret, copyright and trademark
law, nondisclosure agreements and technical security measures to protect our    
intellectual property rights in our various lines of business. Our performance  
may depend in part on our ability to establish, protect and enforce intellectual
property rights with respect to our patented technologies and proprietary rights
and to defend against any claims of infringement, which involves complex legal, 
scientific and factual questions and uncertainties.                             

In the future, we may have to rely on litigation to enforce our       
intellectual property rights and contractual rights. In addition, we may face   
claims of infringement that could interfere with our ability to use technology  
or other intellectual property rights that are material to our business         
operations. If litigation that we initiate is unsuccessful, we may not be able  
to protect the value of some of our intellectual property. In the event a claim 
of infringement against us is successful, we may be required to pay royalties or
license fees to continue to use technology or other intellectual property rights
that we have been using or we may be unable to obtain necessary licenses from   
third parties at a reasonable cost or within a reasonable time. If we are unable
to obtain licenses on reasonable terms, we may be forced to cease selling or    
using any of our products that incorporate the challenged intellectual property,
or to redesign or, in the case of trademark claims, rename our products to avoid
infringing the intellectual property rights of third parties, which may not be  
possible and may be time-consuming if possible. Any litigation of this type,    
whether successful or unsuccessful, could result in substantial costs to us and 
diversions of some of our resources. Our intellectual property rights may not   
have the value we believe them to have, which could result in a competitive     
disadvantage or adversely affect our business and financial performance.        

OUR HISTORICAL FINANCIAL INFORMATION MAY BE OF LIMITED RELEVANCE.           

    The historical financial information included or incorporated by reference
in this prospectus supplement or the accompanying prospectus does not give      
effect to our acquisition of Noveon International and, therefore, will be of    
limited relevance to an understanding of our future financial performance.      

 GOODWILL IMPAIRMENT MAY UNPREDICTABLY AFFECT OUR RESULTS OF OPERATIONS IN THE
FUTURE.                                                                     

    In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards, or SFAS, No. 141, "Business Combinations," and  
SFAS No. 142, "Goodwill and Intangible Assets," effective for fiscal years      
beginning after December 15, 2001. Under the rules, goodwill (and intangible    
assets deemed to have indefinite lives) may no longer be amortized and is       
subject to annual impairment tests in accordance with SFAS No. 142. Other       
intangible assets continue to be amortized over their remaining useful lives. We
adopted SFAS No. 142 on January 1, 2002. During the second quarter of 2002, we  
performed the required impairment tests of goodwill as of January 1, 2002 and   
determined that we had goodwill impairment in the amount of $7.8 million. During
the fourth quarters of 2002 and 2003, we performed our annual impairment tests  
of goodwill and determined that no additional goodwill impairment had occurred. 

 In connection with the acquisition of Noveon International, we recorded
goodwill in the amount of $738.7 million based on a preliminary allocation of   
the purchase price. Future events could cause the impairment of the goodwill    
associated with Noveon International or any other of our reporting units. Any   
resulting impairment loss may have a material adverse impact on our results of  
operations in any future period in which we record a charge.                    

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RISKS RELATING TO THE OFFERING                                                  

THE NOTES AND DEBENTURES WILL BE EFFECTIVELY SUBORDINATED TO ANY SECURED      
INDEBTEDNESS OF LUBRIZOL, AND THE GUARANTEES WILL BE EFFECTIVELY SUBORDINATED 
TO ANY SECURED INDEBTEDNESS OF THE GUARANTORS.                                

  The notes and debentures will be effectively subordinated to any secured
indebtedness of Lubrizol, and the guarantees will be effectively subordinated to
any secured indebtedness of the guarantors, in each case to the extent of the   
value of the assets securing such indebtedness. The indenture does not limit the
amount of debt that Lubrizol, the guarantors or their respective subsidiaries   
can incur. However, the indenture does restrict the ability of Lubrizol and our 
restricted subsidiaries to incur secured debt. See the section of the           
accompanying prospectus titled "Description of Debt Securities -- Certain       
Covenants -- Limitation on Liens."                                              

THE NOTES AND DEBENTURES WILL BE STRUCTURALLY SUBORDINATED TO ALL INDEBTEDNESS
OF SUBSIDIARIES THAT ARE NOT GUARANTORS OF THE NOTES AND DEBENTURES.          

Both Lubrizol and the guarantors conduct their operations through     
subsidiaries, which generate a substantial portion of their respective operating
income and cash flow. As a result, distributions or advances from subsidiaries  
of Lubrizol and the guarantors are a major source of funds necessary to meet    
their respective debt service and other obligations. Contractual provisions,    
laws or regulations, as well as the subsidiaries' financial condition and       
operating requirements, may limit the ability of Lubrizol or the guarantors to  
obtain cash required to pay Lubrizol's debt service obligations, including      
payments on the notes and debentures, or the guarantors' payment obligations    
under the guarantees. The notes and debentures will be structurally subordinated
to all obligations of Lubrizol's non-guarantor subsidiaries, including claims   
with respect to trade payables. Each guarantee will be structurally subordinated
to all obligations of the guarantor's subsidiaries that are not guarantors,     
including claims with respect to trade payables. This means that holders of the 
notes and debentures will have a junior position to the claims of creditors of  
Lubrizol's non-guarantor subsidiaries on their assets and earnings, and holders 
of each guarantee will have a junior position to the claims of creditors of the 
guarantor's subsidiaries that are not guarantors on their assets and earnings.  
As of June 30, 2004, The Lubrizol Corporation had $2,509.6 million of total     
liabilities outstanding, Lubrizol's non-guarantor subsidiaries had $313.4       
million of total liabilities outstanding, and the guarantors had $578.1 million 
of total liabilities outstanding.                                               

YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES OR DEBENTURES COULD BE ADVERSELY
AFFECTED IF ANY OF OUR NON-GUARANTOR SUBSIDIARIES DECLARE BANKRUPTCY,       
LIQUIDATE, OR REORGANIZE.                                                   

Some but not all of our subsidiaries will guarantee the notes and     
debentures. In the event of a bankruptcy, liquidation or reorganization of any  
of the non-guarantor subsidiaries, holders of their indebtedness and their trade
creditors will generally be entitled to payment of their claims from the assets 
of those subsidiaries before any assets are made available for distribution to  
us. The non-guarantor subsidiaries held 37.1% of our consolidated assets as of  
June 30, 2004.                                                                  

 FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCE, TO VOID
GUARANTEES AND REQUIRE DEBTHOLDERS TO RETURN PAYMENTS RECEIVED FROM         
GUARANTORS.                                                                 

Under the federal bankruptcy law and comparable provisions of state   
fraudulent transfer laws, a guarantee could be voided, or claims in respect of a
guarantee could be subordinated to all other debts of that guarantor if, among  
other things, the guarantor, at the time it incurred the indebtedness evidenced 
by its guarantee:                                                               

    - received less than reasonably equivalent value or fair consideration for
the incurrence of such guarantee; and                             

- was insolvent or rendered insolvent by reason of such incurrence; or

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- was engaged in a business or transaction for which the guarantor's  
remaining assets constituted unreasonably small capital; or       

- intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.                         

    In addition, any payment by that guarantor pursuant to its guarantee could
be voided and required to be returned to the guarantor, or to a fund for the    
benefit of the creditors of the guarantor.                                      

   The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether 
a fraudulent transfer has occurred. Generally, however, a guarantor would be    
considered insolvent if:                                                        

   - the present fair saleable value of its assets were less than the amount
  that would be required to pay its probable liability on its existing
  debts, including contingent liabilities, as they become absolute and
mature; or                                                        

- it could not pay its debts as they become due.                      

    On the basis of historical financial information, recent operating history
and other factors, we believe that each guarantor, after giving effect to its   
guarantee of these notes and debentures, will not be insolvent, will not have   
unreasonably small capital for the business in which it is engaged and will not 
have incurred debts beyond its ability to pay such debts as they mature. There  
can be no assurance, however, as to what standard a court would apply in making 
such determinations or that a court would agree with our conclusions in this    
regard.                                                                         

IF AN ACTIVE TRADING MARKET DOES NOT DEVELOP FOR THESE NOTES AND DEBENTURES,
YOU MAY NOT BE ABLE TO RESELL THEM.                                         

Prior to this offering, there was no public market for these notes and
debentures. We have been informed by the underwriters that they intend to make a
market in these notes and debentures after the offering is completed. However,  
the underwriters may cease their market-making at any time. In addition, the    
liquidity of any trading market in these notes and debentures, and any market   
price quoted for these notes and debentures, may be adversely affected by       
changes in the overall market for debt securities and by changes in our         
financial performance or prospects or in the prospects for companies in our     
industry generally. As a result, you cannot be sure that an active trading      
market will develop for these notes and debentures. If no active trading market 
develops, you may not be able to resell your notes and debentures at their fair 
market value or at all.                                                         

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USE OF PROCEEDS 

  We estimate that the net proceeds of this offering will be approximately
$1,125.2 million, after deducting the underwriting discount and other expenses. 
We expect to use the aggregate net proceeds of this offering and the concurrent 
offering of common shares to retire a portion of the indebtedness incurred by us
under a temporary bridge facility in connection with our acquisition of Noveon  
International, to pay related fees and expenses of the offerings and for general
corporate purposes. The following table illustrates how we intend to refinance  
our outstanding indebtedness under the temporary bridge facility and our current
revolving credit facility.                                                      

                                                                [Download Table]
                                             
SOURCES OF FUNDS                             
---------------------------------------------

USES OF FUNDS                                
---------------------------------------------

(DOLLARS IN MILLIONS) 

                                                                [Download Table]
                                             
Debt offering(1)...................  $1,150.0
Concurrent common shares                     
  offering(2)......................     445.6
Bank term loan financing(3)........     575.0
                                     --------
Total..............................  $2,170.6
                                     ========
Temporary bridge facility(4).......  $1,972.0
Paydown revolving credit                     
  facility(5)......................      75.0
Fees and expenses(6)...............      48.0
Cash to Lubrizol(7)................      75.6
                                     --------
Total..............................  $2,170.6
                                     ========

---------------                                                                 

(1) Assumes notes and debentures totaling $1,150.0 million in aggregate         
principal amount are issued at par.                                     

(2) Assumes an offering price to the public of $33.25 per share. If the         
   underwriters exercise their over-allotment option in full, we estimate that
we will receive gross proceeds of approximately $512.4 million and net  
proceeds of approximately $490.4 million.                               

(3) Represents the amount expected to be drawn on a $575.0 million term loan    
 facility bearing interest at LIBOR plus 1.25%. The loan is expected to be
due in quarterly installments through 2009.                             

(4) Includes outstanding amounts incurred under the temporary bridge facility to
  finance initially our acquisition of Noveon International. As of September
22, 2004, the temporary bridge facility is outstanding in the amount of 
$1,972.0 million and bears interest at LIBOR plus 1.25% (currently      
approximately 3.08%). In July 2004, we repaid $186.4 million outstanding
principal amount, plus accrued interest of $8.7 million, under a note   
payable assumed in connection with the Noveon International acquisition 
    using borrowings on the temporary bridge facility of $175.0 million and cash
of $20.1 million.                                                       

(5) Our current $350.0 million revolving credit facility is expected to be      
   replaced with a $500.0 million revolving credit facility in connection with
    the receipt of long-term financing for the Noveon International acquisition.
All amounts outstanding under the current revolving credit facility are 
expected to be repaid from the proceeds of this offering.               

(6) Includes anticipated fees and expenses related to this offering and the     
concurrent offering of common shares.                                   

(7) The cash to Lubrizol received in the offerings will be sufficient to satisfy
  the liability associated with Treasury rate lock agreements. In June 2004,
we entered into several Treasury rate lock agreements with an aggregate 
notional principal amount of $900.0 million, all maturing September 30, 
2004, whereby we locked in Treasury rates relating to a portion of our  
  anticipated $1,150.0 million debt securities issuance. Our liability under
   these contracts had a fair value of $12.2 million ($8.0 million net of tax)
as of June 30, 2004, and increased in fair value by $61.7 million ($40.1
million net of tax) through the date hereof as interest rates decreased.

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CAPITALIZATION

   The following table sets forth our cash and short-term investments, total
debt and stockholders' equity as of June 30, 2004 on an historical basis and on 
an as adjusted basis to give effect to:                                         

    - The repayment of a note in July 2004 that was assumed in the acquisition
   of Noveon International from additional borrowings obtained under the
      temporary bridge facility utilized to finance initially the acquisition.

    - The issuance of common shares and the use of the net proceeds to repay a
    portion of the amount outstanding under the temporary bridge facility.

     - This offering and borrowings under a term loan facility that are expected
      to be used to repay the remaining amount outstanding under the temporary
 bridge facility (including related accrued interest) as well as the
related costs of those transactions.                              

  There can be no assurance that this offering, the concurrent offering of
common shares and the receipt of additional financing through the term loan     
discussed above will be successful, or will occur in the amounts and under the  
terms assumed in the following capitalization table, in which case our actual   
capitalization may differ from the as adjusted amounts presented herein. The    
information set forth below should be read in conjunction with the sections of  
this prospectus supplement titled "Selected Historical Consolidated Financial   
Data of Lubrizol," "Management's Discussion and Analysis of Financial Condition 
and Results of Operations," "Use of Proceeds," "Unaudited Pro Forma Consolidated
Financial Information" and our consolidated financial statements and related    
notes incorporated by reference in the accompanying prospectus.                 

                                                        [Enlarge/Download Table]

                                                           JUNE 30, 2004                          
                                  ----------------------------------------------------------------
                                               AS ADJUSTED FOR                                    
                                                REPAYMENT OF                       AS ADJUSTED FOR
                                                 NOVEON NOTE     AS ADJUSTED FOR     EQUITY AND   
                                  HISTORICAL     PAYABLE(1)      EQUITY OFFERING   DEBT OFFERINGS 
                                  ----------   ---------------   ---------------   ---------------
                                                       (DOLLARS IN MILLIONS)                      
                                                                                                  
Cash and short-term                                                                               
  investments....................  $  227.3       $  207.2          $  207.2          $  282.8(7) 
                                   ========       ========          ========          ========    
Debt:                                                                                             
Short-term debt:                                                                                  
  Temporary bridge facility......  $1,797.0       $1,972.0          $1,545.8          $      -    
  Noveon note payable............     186.4              -                 -                 -    
  Term loan(2)...................         -              -                 -              57.5    
  Term loans -- yen                                                                               
     denominated.................       4.7            4.7               4.7               4.7    
                                   --------       --------          --------          --------    
     Total short-term debt.......   1,988.1        1,976.7           1,550.5              62.2    
Long-term debt:                                                                                   
  Revolver(3)....................      75.0           75.0              75.0                 -    
  5.875% Notes due 2008..........     200.0          200.0             200.0             200.0    
  Term loan(2)...................         -              -                 -             517.5    
  Notes due 2009 offered                                                                          
     hereby(4)...................         -              -                 -             400.0    
  Notes due 2014 offered                                                                          
     hereby(4)...................         -              -                 -             450.0    
  Debentures due 2034 offered                                                                     
     hereby(4)...................         -              -                 -             300.0    
  7.25% Debentures due 2025......     100.0          100.0             100.0             100.0    
  Other..........................      17.2           17.2              17.2              17.2    
                                   --------       --------          --------          --------    
     Total long-term debt........     392.2          392.2             392.2           1,984.7    
                                   --------       --------          --------          --------    
Total debt.......................   2,380.3        2,368.9           1,942.7           2,046.9    
Shareholders' equity:                                                                             
  Shareholders' equity(5)........     974.1          974.1           1,400.3           1,400.3    
  Cost of temporary bridge                                                                        
     facility, net of the effect                                                                  
     of income taxes(6)..........         -              -             (14.2)            (14.2)   
                                   --------       --------          --------          --------    
Total shareholders' equity.......     974.1          974.1           1,386.1           1,386.1    
                                   --------       --------          --------          --------    
Total capitalization.............  $3,354.4       $3,343.0          $3,328.8          $3,433.0    
                                   ========       ========          ========          ========    

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---------------                                                                 

(1) In July 2004, we repaid a Noveon International note payable in full for     
$195.1 million (including accrued interest) by borrowing $175.0 million 
 under our temporary bridge facility and by using $20.1 million of cash on
hand.                                                                   

(2) Represents the amount expected to be drawn on a $575.0 million term loan    
facility. The loan is expected to be repaid in quarterly installments   
through 2009.                                                           

(3) Our current $350.0 million revolving credit facility is expected to be      
   replaced with a $500.0 million revolving credit facility in connection with
    the receipt of long-term financing for the Noveon International acquisition.
All amounts outstanding under the current revolving credit facility are 
expected to be repaid from the proceeds of this offering.               

(4) Represents the anticipated issuance of the notes and debentures offered     
hereby.                                                                 

(5) The as adjusted amounts for the concurrent equity offering include the net  
 proceeds (net of approximately $19.3 million of estimated issuance costs)
expected to be received from the issuance of additional common shares of
Lubrizol pursuant to the equity offering.                               

(6) Represents the cost, net of income taxes, of a $2,450.0 million 364-day     
temporary bridge facility bearing interest at LIBOR plus 1.25%. The     
temporary bridge facility is expected to be replaced with the long-term 
financing described previously.                                         

(7) The cash to Lubrizol received in the offerings will be sufficient to satisfy
  the liability associated with Treasury rate lock agreements. In June 2004,
we entered into several Treasury rate lock agreements with an aggregate 
notional principal amount of $900.0 million, all maturing September 30, 
2004, whereby we locked in Treasury rates relating to a portion of our  
  anticipated $1,150.0 million debt securities issuance. Our liability under
   these contracts had a fair value of $12.2 million ($8.0 million net of tax)
as of June 30, 2004, and increased in fair value by $61.7 million ($40.1
million net of tax) through the date hereof as interest rates decreased.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF LUBRIZOL 

   The following table presents selected historical financial and other data
of Lubrizol and its subsidiaries as of the dates and for the periods indicated. 
The data as of and for the years ended December 31, 1999, 2000, 2001, 2002 and  
2003 have been derived from the audited consolidated financial statements of    
Lubrizol and its subsidiaries as of and for the fiscal years ended December 31, 
1999, 2000, 2001, 2002 and 2003. The data as of and for the six months ended    
June 30, 2003 and 2004 have been derived from the unaudited interim consolidated
financial statements of Lubrizol and its subsidiaries as of and for the six     
months ended June 30, 2003 and 2004. In the opinion of management, the unaudited
consolidated financial statements include all adjustments, consisting only of   
normal recurring adjustments, necessary for a fair presentation of the results  
of operations, financial position and cash flows. The results for the six months
ended June 30, 2004 are not necessarily indicative of the results that may be   
expected for the entire year.                                                   

    You should read the summary financial and other data set forth below along
with the section in this prospectus supplement titled "Management's Discussion  
and Analysis of Financial Condition and Results of Operations" and the          
consolidated financial statements of Lubrizol and related notes incorporated by 
reference in the accompanying prospectus.                                       

                                                        [Enlarge/Download Table]

                                                                        HISTORICAL                                 
                                        ---------------------------------------------------------------------------
                                                                                                 SIX MONTHS ENDED  
                                                      YEARS ENDED DECEMBER 31,                       JUNE 30,      
                                        ----------------------------------------------------   --------------------
                                          1999       2000       2001       2002       2003       2003       2004   
                                        --------   --------   --------   --------   --------   --------   ---------
                                                       (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)                
                                                                                                                   
OPERATING RESULTS:                                                                                                 
Revenues............................... $1,780.3   $1,775.8   $1,844.6   $1,983.9   $2,052.1   $1,022.9   $ 1,300.2
Cost of sales..........................  1,227.3    1,278.2    1,335.5    1,416.3    1,507.8      740.9       955.8
Selling and administrative expenses....    181.2      168.0      177.4      196.9      202.9      101.0       122.0
Research, testing and development                                                                                  
  expenses.............................    145.9      150.8      158.5      168.3      166.9       82.2        86.3
Amortization expense...................     11.4       12.8       14.1        4.2        4.9        2.3         6.4
Write-off of acquired in-process                                                                                   
  research and development.............        -          -          -          -          -          -        35.0
Restructuring charges (credits)........     19.6       (4.5)         -          -       22.5        7.0         8.0
Gain on litigation settlements.........     17.6       19.4          -          -          -          -           -
Interest expense.......................     29.7       26.9       25.0       23.3       25.1       12.1        24.3
Other income, net......................     12.6        7.3        5.8        5.5        7.1        4.1         4.3
Provision for income taxes.............     72.4       52.3       45.8       54.1       38.3       26.1        25.2
Income before cumulative effect of                                                                                 
  change in accounting principle.......    123.0      118.0       94.1      126.3       90.8       55.4        41.5
Cumulative effect of change in                                                                                     
  accounting principle.................        -          -          -       (7.8)         -          -           -
Net income.............................    123.0      118.0       94.1      118.5       90.8       55.4        41.5
NET INCOME PER SHARE:                                                                                              
Income before cumulative effect of                                                                                 
  change in accounting principle....... $   2.25   $   2.22   $   1.84   $   2.45   $   1.76   $   1.07   $    0.80
Cumulative effect of change in                                                                                     
  accounting principle.................        -          -          -      (0.15)         -          -           -
Net income per share................... $   2.25   $   2.22   $   1.84   $   2.30   $   1.76   $   1.07   $    0.80
DILUTED NET INCOME PER SHARE:                                                                                      
Income before cumulative effect of                                                                                 
  change in accounting principle....... $   2.25   $   2.22   $   1.83   $   2.44   $   1.75   $   1.07   $    0.80
Cumulative effect of change in                                                                                     
  accounting principle.................        -          -          -      (0.15)         -          -           -
Net income per share, diluted.......... $   2.25   $   2.22   $   1.83   $   2.29   $   1.75   $   1.07   $    0.80

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                                                        [Enlarge/Download Table]

                                                                        HISTORICAL                                  
                                        --------------------------------------------------------------------------- 
                                                                                                 SIX MONTHS ENDED   
                                                      YEARS ENDED DECEMBER 31,                       JUNE 30,       
                                        ----------------------------------------------------   -------------------- 
                                          1999       2000       2001       2002       2003       2003       2004    
                                        --------   --------   --------   --------   --------   --------   --------- 
                                                       (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)                 
                                                                                                                    
BALANCE SHEET DATA (AT YEAR END/                                                                                    
  QUARTER END):                                                                                                     
Total assets........................... $1,682.4   $1,659.5   $1,662.3   $1,860.1   $1,942.3   $1,908.1   $ 4,427.3 
Total debt.............................    403.0      395.9      397.2      401.9      389.6      396.2     2,380.3 
Total shareholders' equity.............    790.1      752.3      773.2      869.3      953.3      933.1       974.1 
OTHER DATA:                                                                                                         
Net cash provided (used) by:                                                                                        
  Operating activities................. $  289.0   $  226.2   $  195.8   $  244.9   $  194.8   $   44.5   $    96.2 
  Investing activities.................    (64.5)    (125.2)     (81.6)    (148.5)    (155.9)     (36.5)   (1,002.9)
  Financing activities.................    (87.2)    (136.9)     (68.7)     (30.4)     (59.5)     (29.0)      868.9 
Capital expenditures...................     64.9       85.8       66.3       65.3       88.5       36.8        42.2 
Depreciation expense...................     88.3       88.0       84.7       91.6       95.5       46.5        54.5 
Amortization expense...................     11.4       12.8       14.1        4.2        4.9        2.3         6.4 
Write-off of acquired in-process                                                                                    
  research and development.............        -          -          -          -          -          -        35.0 
Ratio of earnings to fixed                                                                                          
  charges(1)...........................     7.71x      7.66x      6.97x      9.29x      6.19x      7.73x       3.73x
EBITDA(2).............................. $  324.8   $  298.0   $  263.7   $  291.7   $  254.6   $  142.4   $   186.9 

---------------                                                                 

(1) The ratio of earnings to fixed charges has been computed by dividing        
earnings before income taxes (including distributed income of equity    
 investees) plus fixed charges (excluding capitalized interest expense) by
   fixed charges. Fixed charges consist of interest expense on debt (including
amortization of debt issuance expense and capitalized interest).        

(2) The following table sets forth the calculation of EBITDA, which represents  
earnings before interest, taxes, depreciation and amortization. The     
write-off of acquired in-process research and development is included in
    amortization expense. We present EBITDA because it is a basis upon which our
 management assesses financial performance and we consider it an important
    supplemental measure of our performance and believe it is frequently used by
securities analysts, investors and other interested parties in the      
  evaluation of companies in our industry, many of which present EBITDA when
reporting their results. EBITDA is not a measurement of financial       
    performance under GAAP and should not be considered as an alternative to (1)
 net income determined in accordance with GAAP or (2) operating cash flows
determined in accordance with GAAP. Our calculation of EBITDA may not be
    comparable to the calculation of similarly titled measures reported by other
 companies. See the section of this prospectus supplement titled "Non-GAAP
Financial Measures."                                                    

                                                        [Enlarge/Download Table]

                                                                          HISTORICAL                                
                                           -------------------------------------------------------------------------
                                                                                                   SIX MONTHS       
                                                      YEARS ENDED DECEMBER 31,                   ENDED JUNE 30,     
                                           ----------------------------------------------    -----------------------
                                            1999      2000      2001      2002      2003        2003         2004   
                                           ------    ------    ------    ------    ------    ----------   ----------
                                                                     (DOLLARS IN MILLIONS)                          
                                                                                                                    
Net income................................ $123.0    $118.0    $ 94.1    $118.5    $ 90.8      $ 55.4       $ 41.5  
Add:                                                                                                                
  Depreciation and amortization...........   99.7     100.8      98.8      95.8     100.4        48.8         95.9  
  Interest expense........................   29.7      26.9      25.0      23.3      25.1        12.1         24.3  
  Provision for income taxes..............   72.4      52.3      45.8      54.1      38.3        26.1         25.2  
                                           ------    ------    ------    ------    ------      ------       ------  
EBITDA.................................... $324.8    $298.0    $263.7    $291.7    $254.6      $142.4       $186.9  
                                           ======    ======    ======    ======    ======      ======       ======  

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF NOVEON INTERNATIONAL 

   The following table presents selected historical financial data of Noveon
International as of the dates and for the periods indicated. The data as of and 
for the years ended December 31, 1999 and 2000 and the two months ended February
28, 2001 are derived from the audited consolidated historical financial         
statements of the Performance Materials Segment of Goodrich Corporation (the    
predecessor of Noveon International). The data as of and for the ten months     
ended December 31, 2001 and the years ended December 31, 2002 and 2003 are      
derived from the audited consolidated financial statements of Noveon            
International. The information set forth below should be read in conjunction    
with the consolidated financial statements of Noveon International and related  
notes incorporated by reference in the accompanying prospectus.                 

                                                        [Enlarge/Download Table]

                          PERFORMANCE MATERIALS SEGMENT OF GOODRICH            NOVEON INTERNATIONAL          
                          -----------------------------------------   -------------------------------------- 
                               YEARS ENDED                                                   YEARS ENDED     
                              DECEMBER 31,        TWO MONTHS ENDED    TEN MONTHS ENDED      DECEMBER 31,     
                          ---------------------     FEBRUARY 28,        DECEMBER 31,     ------------------- 
                            1999        2000            2001                2001           2002       2003   
                          ---------   ---------   -----------------   ----------------   --------   -------- 
                                                        (DOLLARS IN MILLIONS)                                
                                                                                                             
OPERATING RESULTS:                                                                                           
Revenues................. $1,217.7    $1,167.7         $187.0            $   876.4       $1,069.3   $1,135.9 
Cost of sales............    832.2       819.5          137.3                628.1          726.8      809.4 
Selling and                                                                                                  
  administrative                                                                                             
  expenses...............    171.9       160.9           28.0                130.6          165.5      160.0 
Research, testing and                                                                                        
  development expense....     46.3        40.2            7.2                 29.9           37.3       44.8 
Amortization expense.....     24.6        24.4            4.0                 26.5           13.9       14.7 
Restructuring and                                                                                            
  severance costs........     37.3        40.5              -                  3.1            6.1       13.2 
Interest expense.........     13.3         5.2            0.7                 93.8          101.9       92.2 
Other income (expense),                                                                                      
  net....................     12.3         9.2           (0.2)                 0.5           12.3        0.2 
Provision for income                                                                                         
  taxes..................     42.3        35.9            4.0                  4.6            6.4        9.2 
Income (loss) before                                                                                         
  cumulative effect of                                                                                       
  change in accounting                                                                                       
  principle..............     62.1        50.3            5.6                (39.7)          23.7       (7.4)
Cumulative effect of                                                                                         
  change in accounting                                                                                       
  principle..............        -           -              -                    -              -       (0.5)
Net income (loss)........     62.1        50.3            5.6                (39.7)          23.7       (7.9)
BALANCE SHEET DATA (AT                                                                                       
  YEAR END):                                                                                                 
Total assets............. $1,430.6    $1,359.2            n/a            $ 1,664.8       $1,634.5   $1,757.6 
Total debt...............     42.7        30.0            n/a              1,083.9          992.7    1,030.3 
Total stockholders'                                                                                          
  equity/ Goodrich                                                                                           
  investment.............    950.9       910.4            n/a                309.1          346.5      412.3 
OTHER DATA:                                                                                                  
Net cash provided (used)                                                                                     
  by:                                                                                                        
  Operating activities... $  156.1    $  180.9         $(31.6)           $   153.9       $  143.7   $  118.0 
  Investing activities...    (97.3)      (75.3)          (7.6)            (1,218.7)         (79.7)     (88.7)
  Financing activities...    (54.4)     (100.2)          37.5              1,188.4         (112.3)      (1.2)
Capital expenditures.....     79.6        64.0            7.6                 28.5           52.3       56.6 
Depreciation expense.....     62.3        62.3           10.4                 56.5           70.8       76.7 
Amortization expense.....     24.6        24.4            4.0                 26.5           13.9       14.7 
EBITDA(1)................    204.6       178.1           24.7                141.7          216.7      184.9 

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---------------                                                                 

(1) The following table sets forth the calculation of EBITDA, which represents  
  earnings before interest, taxes, depreciation and amortization. We present
 EBITDA because it is a basis upon which our management assesses financial
performance and we consider it an important supplemental measure of our 
performance and believe it is frequently used by securities analysts,   
    investors and other interested parties in the evaluation of companies in our
   industry, many of which present EBITDA when reporting their results. EBITDA
  is not a measurement of financial performance under GAAP and should not be
    considered as an alternative to (1) net income determined in accordance with
GAAP or (2) operating cash flows determined in accordance with GAAP. Our
   calculation of EBITDA may not be comparable to the calculation of similarly
titled measures reported by other companies. See the section of this    
prospectus supplement titled "Non-GAAP Financial Measures."             

                                                        [Enlarge/Download Table]

                                                     PERFORMANCE MATERIALS                                       
                                                      SEGMENT OF GOODRICH              NOVEON INTERNATIONAL      
                                                 ------------------------------   ------------------------------ 
                                                   YEARS ENDED      TWO MONTHS     TEN MONTHS      YEARS ENDED   
                                                  DECEMBER 31,        ENDED          ENDED        DECEMBER 31,   
                                                 ---------------   FEBRUARY 28,   DECEMBER 31,   --------------- 
                                                  1999     2000        2001           2001        2002     2003  
                                                 ------   ------   ------------   ------------   ------   ------ 
                                                                      (DOLLARS IN MILLIONS)                      
                                                                                                                 
Net income (loss)............................... $ 62.1   $ 50.3      $ 5.6          $(39.7)     $ 23.7   $ (7.9)
Add:                                                                                                             
  Depreciation and amortization.................   86.9     86.7       14.4            83.0        84.7     91.4 
  Interest expense..............................   13.3      5.2        0.7            93.8       101.9     92.2 
  Provision for income taxes....................   42.3     35.9        4.0             4.6         6.4      9.2 
                                                 ------   ------      -----          ------      ------   ------ 
EBITDA.......................................... $204.6   $178.1      $24.7          $141.7      $216.7   $184.9 
                                                 ======   ======      =====          ======      ======   ====== 

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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

     The following pro forma consolidated financial information has been derived
by the application of pro forma adjustments to the historical consolidated      
financial statements of Lubrizol and Noveon International for the six-month     
periods ended June 30, 2004 and 2003, and the year ended December 31, 2003. The 
unaudited pro forma consolidated statements of income give effect to the June 3,
2004 acquisition of Noveon International and long-term financing thereof as if  
they had occurred on January 1, 2003. The long-term financing is expected to    
replace the temporary bridge facility used to finance initially the acquisition,
which is only expected to be outstanding approximately four months. Accordingly,
the costs of the long-term financing, rather than the temporary bridge facility,
are reflected in the accompanying pro forma consolidated financial information. 

Assumptions underlying the pro forma adjustments necessary to present 
fairly this pro forma information are described in the accompanying notes, which
should be read in conjunction with this pro forma consolidated financial        
information. The pro forma adjustments described in the accompanying notes have 
been made based on available information and, in the opinion of management, are 
reasonable. The pro forma consolidated financial information should not be      
considered indicative of actual results that would have been achieved had the   
transactions occurred on the respective dates indicated and do not purport to   
indicate results of operations as of any future date or for any future period.  
Lubrizol cannot assure you that the assumptions used in the preparation of the  
pro forma consolidated financial information will prove to be correct.          

 The acquisition of Noveon International by Lubrizol on June 3, 2004 was
accounted for as a purchase in conformity with Statement of Financial Accounting
Standards ("SFAS") No. 141, "Business Combinations," with intangible assets     
recorded in accordance with SFAS No. 142, "Goodwill and Other Intangible        
Assets," and the operations of the acquired business have been included in      
Lubrizol's historical financial statements from the effective date of the       
acquisition. The purchase price consideration of $920.2 million in cash plus    
transaction costs of $10.5 million less certain seller expenses of $32.9 million
was financed principally by borrowings under a temporary bridge facility.       
Lubrizol also assumed approximately $1,103.1 million of Noveon International's  
existing long-term indebtedness in conjunction with the acquisition and acquired
$103.0 million of cash. The total cost of the acquisition has been allocated to 
the assets acquired and liabilities assumed on a preliminary basis based on     
their respective fair values as of the date of the acquisition. The excess of   
the purchase price over the preliminary fair values of the net assets acquired  
has been allocated to goodwill. The allocation of the purchase price will be    
subject to adjustment until it is finalized, which is expected to occur no later
than the second quarter of 2005. Accordingly, the final purchase price          
allocation and the resulting effect on income from operations may differ from   
the pro forma amounts reported herein. In addition, in accordance with the      
provisions of SFAS No. 142, no amortization of indefinite-lived intangible      
assets or goodwill is recorded.                                                 

  The unaudited pro forma consolidated statements of income do not include
the cumulative effect of the change in accounting resulting from Noveon         
International's adoption, in 2003, of SFAS No. 143, "Accounting for Asset       
Retirement Obligations," but include the costs of the long-term financing,      
rather than the temporary bridge facility, for the acquisition from the closing 
through the date the temporary bridge facility is replaced with long-term       
financing. In addition, the unaudited pro forma consolidated statements of      
income do not include any cost reduction opportunities expected to result from  
commercial and technical synergies between Lubrizol and Noveon International.   

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
SIX-MONTH PERIOD ENDED JUNE 30, 2004
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                               NOVEON             NOVEON           PRO FORMA                   
                               LUBRIZOL     INTERNATIONAL     INTERNATIONAL       TRANSACTION        LUBRIZOL  
                             HISTORICAL(1)  HISTORICAL(2)  RECLASSIFICATIONS(3)  ADJUSTMENTS(4)    PRO FORMA(5)
                             -------------  -------------  --------------------  --------------    ------------
                                                                                                               
Total revenues.............   $   1,300.2      $540.2             $(2.6)          $         -      $   1,837.8 
Cost of sales..............         955.8       377.2               7.2                  (4.9)(a)      1,335.5 
                                                                    0.2                                        
Selling and administrative                                                                                     
  expenses.................         122.0        73.9              (2.6)                 (1.7)(b)        184.1 
                                                                   (7.2)                                       
                                                                   (0.3)                                       
Research, testing and                                                                                          
  development expenses.....          86.3        20.7                 -                     -            107.0 
Amortization of intangible                                                                                     
  assets...................           6.4         6.2                 -                   5.7(c)          18.3 
Write-off of acquired                                                                                          
  in-process research and                                                                                      
  development..............          35.0           -                 -                 (35.0)(e)            - 
Merger charges.............             -        73.4                 -                 (73.4)(f)            - 
Restructuring and severance                                                                                    
  charges..................           8.0         3.3                 -                     -             11.3 
                              -----------      ------             -----           -----------      ----------- 
     Total costs and                                                                                           
       expenses............       1,213.5       554.7              (2.7)               (109.3)         1,656.2 
Other income                                                                                                   
  (expense) - net..........           2.4         0.5               0.2                     -              2.8 
                                                                   (0.3)                                       
Interest income............           1.9         0.6                 -                     -              2.5 
Interest expense...........         (24.3)      (39.3)                -                   4.6(g)         (59.0)
                              -----------      ------             -----           -----------      ----------- 
Income (loss) before income                                                                                    
  taxes....................          66.7       (52.7)                -                 113.9            127.9 
Provision for income                                                                                           
  taxes....................          25.2         4.9                 -                  17.9(h)          48.0 
                              -----------      ------             -----           -----------      ----------- 
Net income (loss)..........   $      41.5      $(57.6)            $   -           $      96.0      $      79.9 
                              ===========      ======             =====           ===========      =========== 
Earnings per common share:                                                                                     
  Basic....................   $      0.80                                                          $      1.23 
  Diluted..................   $      0.80                                                          $      1.22 
Average shares outstanding:                                                                                    
  Basic....................    51,829,522                                          13,400,000(i)    65,229,522 
  Diluted..................    52,080,577                                          13,400,000(i)    65,480,577 

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2003
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                               NOVEON             NOVEON           PRO FORMA                   
                               LUBRIZOL     INTERNATIONAL     INTERNATIONAL       TRANSACTION        LUBRIZOL  
                             HISTORICAL(1)  HISTORICAL(2)  RECLASSIFICATIONS(3)  ADJUSTMENTS(4)    PRO FORMA(5)
                             -------------  -------------  --------------------  --------------    ------------
                                                                                                               
Total revenues.............   $   2,052.1     $1,135.9            $ (5.8)         $         -      $   3,182.2 
Cost of sales..............       1,507.8        809.4              16.3                  9.8(a)       2,343.3 
Selling and administrative                                                                                     
  expenses.................         202.9        160.0              (5.8)                (4.0)(b)        338.1 
                                                                   (16.3)                                      
                                                                     1.4                                       
                                                                     0.1                                       
                                                                    (0.2)                                      
Research, testing and                                                                                          
  development expenses.....         166.9         44.8                 -                    -            211.7 
Amortization of intangible                                                                                     
  assets...................             -         14.7              (0.1)                14.1(c)          33.6 
                                                                                          4.9(d)               
Write-off of acquired                                                                                          
  in-process research and                                                                                      
  development..............             -            -                 -                 35.0(e)          35.0 
Restructuring and severance                                                                                    
  charges..................          22.5         13.2                 -                    -             35.7 
                              -----------     --------            ------          -----------      ----------- 
     Total costs and                                                                                           
       expenses............       1,900.1      1,042.1              (4.6)                59.8          2,997.4 
Other income                                                                                                   
  (expense) - net..........          (1.6)        (1.1)              1.4                  4.9(d)           3.4 
                                                                    (0.2)                                      
Interest income............           3.8          1.3                 -                    -              5.1 
Interest expense...........         (25.1)       (92.2)                -                  1.4(g)        (115.9)
                              -----------     --------            ------          -----------      ----------- 
Income before income taxes                                                                                     
  and cumulative effect of                                                                                     
  change in accounting                                                                                         
  principle................         129.1          1.8                 -                (53.5)            77.4 
Provision for income                                                                                           
  taxes....................          38.3          9.2                 -                (23.1)(h)         24.4 
                              -----------     --------            ------          -----------      ----------- 
Income (loss) before                                                                                           
  cumulative effect of                                                                                         
  change in accounting                                                                                         
  principle................   $      90.8     $   (7.4)           $    -          $     (30.4)     $      53.0 
                              ===========     ========            ======          ===========      =========== 
Earnings per common share                                                                                      
  before cumulative effect                                                                                     
  of change in accounting                                                                                      
  principle:                                                                                                   
  Basic....................   $      1.76                                                          $      0.81 
  Diluted..................   $      1.75                                                          $      0.81 
Average shares outstanding:                                                                                    
  Basic....................    51,702,394                                          13,400,000(i)    65,102,394 
  Diluted..................    51,884,385                                          13,400,000(i)    65,284,385 

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THE LUBRIZOL CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
SIX-MONTH PERIOD ENDED JUNE 30, 2003
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                             NOVEON             NOVEON           PRO FORMA                  
                             LUBRIZOL     INTERNATIONAL     INTERNATIONAL       TRANSACTION       LUBRIZOL  
                           HISTORICAL(1)  HISTORICAL(2)  RECLASSIFICATIONS(3)  ADJUSTMENTS(4)   PRO FORMA(5)
                           -------------  -------------  --------------------  --------------   ------------
                                                                                                            
Total revenues...........   $   1,022.9      $576.2             $(2.7)          $         -     $   1,596.4 
Cost of sales............         740.9       408.7               8.4                   9.8(a)      1,167.8 
Selling and                                                                                                 
  administrative                                                                                            
  expenses...............         101.0        79.3              (2.7)                 (2.0)(b)       167.4 
                                                                 (8.4)                                      
                                                                 (0.2)                                      
                                                                  0.4                                       
Research, testing and                                                                                       
  development expenses...          82.2        21.5                 -                     -           103.7 
Amortization of                                                                                             
  intangible assets......           2.3         7.3                 -                   7.1(c)         16.7 
Write-off of acquired in-                                                                                   
  process research and                                                                                      
  development............             -           -                 -                  35.0(e)         35.0 
Restructuring and                                                                                           
  severance charges......           7.0         3.0                 -                     -            10.0 
                            -----------      ------             -----           -----------     ----------- 
     Total costs and                                                                                        
       expenses..........         933.4       519.8              (2.5)                 49.9         1,500.6 
Other income                                                                                                
  (expense) - net........           2.0        (0.2)             (0.2)                    -             2.0 
                                                                  0.4                                       
Interest income..........           2.1         0.6                 -                     -             2.7 
Interest expense.........         (12.1)      (46.6)                -                   1.3(g)        (57.4)
                            -----------      ------             -----           -----------     ----------- 
Income before income                                                                                        
  taxes and cumulative                                                                                      
  effect of change in                                                                                       
  accounting principle...          81.5        10.2                 -                 (48.6)           43.1 
Provision for income                                                                                        
  taxes..................          26.1         3.3                 -                 (15.8)(h)        13.6 
                            -----------      ------             -----           -----------     ----------- 
Income before cumulative                                                                                    
  effect of change in                                                                                       
  accounting principle...   $      55.4      $  6.9             $   -           $     (32.8)    $      29.5 
                            ===========      ======             =====           ===========     =========== 
Earnings per common share                                                                                   
  before cumulative                                                                                         
  effect of change in                                                                                       
  accounting principle:                                                                                     
  Basic..................   $      1.07                                                         $      0.45 
  Diluted................   $      1.07                                                         $      0.45 
Average shares                                                                                              
  outstanding:                                                                                              
  Basic..................    51,661,725                                          13,400,000(i)   65,061,725 
  Diluted................    51,796,138                                          13,400,000(i)   65,196,138 

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THE LUBRIZOL CORPORATION

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME

    (1) The amounts in this column represent the reported results for Lubrizol
for the applicable period.                                    

     (2) The amounts in this column for 2004 represent the historical results of
        Noveon International through the acquisition date of June 3, 2004. The
     historical results for the year ended December 31, 2003 and the six
    months ended June 30, 2003 do not include the cumulative effect of
       Noveon International's change in the method used to account for asset
       retirement obligations in 2003 pursuant to its implementation of SFAS
      No. 143. Results for Noveon International after the acquisition date
are included in the Lubrizol Historical column.               

(3) The reclassifications in this column reflect the income statement 
reclassifications necessary to conform the historical Noveon  
       International amounts to the Lubrizol income statement classification
presentation. Reclassifications include the inclusion of sales
   commissions as a reduction of revenues rather than as selling and
         administrative expenses; the inclusion of distribution expenses as cost
       of sales rather than selling and administrative expenses; and several
other smaller reclassifications.                              

    (4) The amounts in this column represent the adjustments necessary to give
 pro forma effect to the acquisition of Noveon International and
    long-term financing thereof. Adjustments (a), (b), (c) and (e) are
   based on a preliminary allocation of the purchase price, which is
   expected to be finalized within one year of the acquisition date.

    (a) This adjustment represents the inventory purchase accounting
              adjustment that is being charged to cost of sales as the inventory
             on hand when the Noveon International acquisition was consummated
      is sold. The adjustment for the period ended June 30, 2004
      reflects the reversal of the inventory purchase accounting
         adjustment recorded in the historical financial statements to
           reflect the pro forma assumption as if the Noveon International
acquisition occurred on January 1, 2003.            

  (b) Represents the amount of management fees charged to Noveon
           International by related parties that ceased as a result of the
acquisition.                                        

     (c) This adjustment represents the change in amortization expense
        resulting from the amortization of the additional intangible
        assets recorded in connection with the acquisition using the
      straight-line method based on the following (in millions):

                                                        [Enlarge/Download Table]

                                                       ESTIMATED ADDITIONAL AMORTIZATION EXPENSE    
                                                   -------------------------------------------------
                                                     SIX-MONTH                           SIX-MONTH  
                          ESTIMATED    ESTIMATED   PERIOD ENDED       YEAR ENDED       PERIOD ENDED 
AMORTIZABLE INTANGIBLES  USEFUL LIFE   FAIR VALUE  JUNE 30, 2004   DECEMBER 31, 2003   JUNE 30, 2003
-----------------------  -----------   ----------  -------------   -----------------   -------------
                                                                                                    
     Distributors and                                                                               
       customers......    20 years       $230.0        $5.8              $11.5             $ 5.8    
     Technology.......    13 years        140.0         5.4               10.8               5.4    
     Trademarks and                                                                                 
       tradenames.....    15 years         85.0         2.8                5.7               2.8    
     Non-compete                                                                                    
       agreements.....     3 years          2.5         0.4                0.8               0.4    
                                                       ----              -----             -----    
                                                       14.4               28.8              14.4    
       Historical amortization recorded..........       8.7               14.7               7.3    
                                                       ----              -----             -----    
       Net adjustment............................      $5.7              $14.1             $ 7.1    
                                                       ====              =====             =====    

         (d) Represents reclassification of Lubrizol's historical amortization
            expense recognized on intangible assets to conform to the income
        statement classification used subsequent to the acquisition.

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THE LUBRIZOL CORPORATION

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME -- (CONTINUED) 

(e) This adjustment represents the one-time, non-cash charge
      pertaining to acquired in-process research and development
          ("IPR&D") projects of Noveon International that was recognized
          immediately following the acquisition. These acquired projects
            have no alternative future use and had not reached technological
        feasibility at the date of the acquisition. Accordingly, the
              portion of the purchase price preliminarily allocated to the IPR&D
   projects was expensed as research and development costs
          immediately after the acquisition in accordance with GAAP. The
      adjustment for the period ended June 30, 2004 reflects the
      reversal of the IPR&D write-off recorded in the historical
              financial statements to reflect the pro forma assumption as if the
         Noveon International acquisition occurred on January 1, 2003.

       (f) This adjustment eliminates certain one-time, nonrecurring costs
              and charges directly related to the acquisition that were incurred
         by Noveon International, primarily consisting of compensation
           costs for stock options that were cancelled in conjunction with
          the acquisition, management bonuses, the write-off of deferred
          financing costs and professional, advisory and financing fees.

     (g) The adjustment to interest expense reflects the following (in
millions):                                          

                                                                [Download Table]

                                       SIX-MONTH                         SIX-MONTH  
                                     PERIOD ENDED      YEAR ENDED      PERIOD ENDED 
                                     JUNE 30, 2004  DECEMBER 31, 2003  JUNE 30, 2003
                                     -------------  -----------------  -------------
                                                                                    
Interest expense on Noveon                                                          
  International indebtedness                                                        
  retired in connection with the                                                    
  acquisition or to be retired upon                                                 
  receipt of long-term financing...     $(42.6)          $(92.4)          $(46.6)   
Interest expense on temporary                                                       
  bridge loan to be repaid upon                                                     
  receipt of the long-term                                                          
  financing........................       (6.6)               -                -    
Estimated interest expense on new                                                   
  term loan facility to be obtained                                                 
  (at 3.25%).......................        7.9             17.7              8.7    
Estimated interest expense on the                                                   
  new debt securities to be issued:                                                 
  $400.0 million of 5-year                                                          
     securities (at 4.625%)........        9.3             18.5              9.3    
  $450.0 million of 10-year                                                         
     securities (at 5.5%)..........       12.4             24.8             12.4    
  $300.0 million of 30-year                                                         
     securities (at 6.5%)..........        9.8             19.5              9.8    
Accretion expense for treasury rate                                                 
  locks............................        3.0              5.9              3.0    
Amortization of estimated debt                                                      
  issuance costs on the new debt:                                                   
  Revolving credit facilities......          -              0.1                -    
  Term loan facility...............        0.3              0.7              0.3    
  Debt securities..................        1.5              3.1              1.5    
Additional commitment fees on new                                                   
  revolving credit and term loan                                                    
  facilities expected to be                                                         
  obtained(1)......................        0.4              0.7              0.3    
                                        ------           ------           ------    
Total adjustment...................     $ (4.6)          $ (1.4)          $ (1.3)   
                                        ======           ======           ======    

---------------                                                                 

           (1) Reflects commitment fees of 0.20% on the estimated $500.0 million
            of average undrawn balance under the revolving credit facility
            less the commitment fees included in the historical results of
operations.                                       
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THE LUBRIZOL CORPORATION

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME -- (CONTINUED) 

        A 0.25% increase or decrease in the weighted average interest rate
 applicable to Lubrizol's indebtedness outstanding under the
     anticipated new term loan facility and the notes and debentures
        offered hereby would change the pro forma interest expense by $2.2
           million, $4.3 million and $2.2 million for the six-month period ended
          June 30, 2004, year ended December 31, 2003 and the six-month period
ended June 30, 2003, respectively.                        

          (h) This adjustment represents the tax effect of pro forma adjustments
       to income before income taxes and is based on the estimated
            applicable statutory tax rates. The adjustment also includes the
            effects of the estimated reduction in Lubrizol's historical U.S.
            tax benefits associated with extraterritorial income and foreign
tax credits resulting from the acquisition of Noveon
   International. Furthermore, the adjustment includes the
elimination of the charge/credit included in Noveon 
           International's historical provision for income taxes resulting
        from the change in Noveon International's deferred tax asset
          valuation allowance pertaining to its domestic, federal income
       taxes that was reversed in connection with the acquisition,
            reflecting the fact that Noveon International's inclusion within
        the Lubrizol U.S. consolidated group for income tax purposes
            subsequent to the acquisition will result in deferred tax assets
           being realized to offset the taxable income of the consolidated
group.                                              

          (i) The number of pro forma shares is based on the common shares to be
        issued pursuant to the concurrent offering of common shares.

     (5) The amounts in this column represent the pro forma results for Lubrizol
        after giving effect to the acquisition of Noveon International and the
         long-term financing thereof as if the transactions had been consummated
         on January 1, 2003, the first day of Lubrizol's most recently completed
fiscal year.                                                  

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS 

This Management's Discussion and Analysis of Financial Condition and  
Results of Operations contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those discussed in 
such forward-looking statements as a result of various factors, including those 
described under the section of this prospectus supplement titled "Risk Factors" 
and included elsewhere in this prospectus supplement and the accompanying       
prospectus.                                                                     

OVERVIEW                                                                        

GENERAL                                                                     

   We are a leading global producer and marketer of technologically advanced
chemicals and specialty materials for the transportation, consumer and          
industrial markets. Our business is founded on technological leadership.        
Innovation provides opportunities for us in growth markets as well as advantages
over our competitors. From a base of approximately 3,000 patents, we use our    
product development and formulation expertise to sustain our leading market     
positions and fuel our future growth. We create additives, ingredients, resins  
and compounds that enhance the performance, quality and value of our customers' 
products, while minimizing their environmental impact. Our products are used in 
a broad range of applications, and are sold into stable markets such as those   
for engine oils, specialty driveline lubricants and metalworking fluids, as well
as higher growth markets such as personal care and pharmaceutical products and  
performance coatings and inks. Our specialty materials products are also used in
a variety of industries, including the telecommunications, construction,        
footwear and automotive industries. We are an industry leader in the majority of
our businesses.                                                                 

We are geographically diverse, with an extensive global manufacturing,
supply chain, technical and commercial infrastructure. We operate facilities in 
26 countries, comprised of production facilities in 22 countries, laboratories  
in six countries and offices in 25 countries, through the efforts of            
approximately 7,700 employees. We sell our products in more than 100 countries  
and believe that our customers value our ability to provide customized, high    
quality, cost-effective performance formulations and solutions worldwide. We    
also believe our customers value our global supply chain capabilities.          

On June 3, 2004, we acquired Noveon International, a leading global   
producer and marketer of technologically advanced specialty materials and       
chemicals used in the industrial and consumer markets. With the acquisition of  
Noveon International, we have accelerated our program to attain a substantial   
presence in the personal care and coatings markets by adding a number of higher 
growth, industry-leading products under highly recognizable brand names,        
including Carbopol(R) and Hycar(R), to our already strong portfolio of lubricant
and fuel additives products and consumer product ingredients. Additionally,     
Noveon International has a number of industry-leading specialty materials       
businesses, including TempRite(R) CPVC and Estane(R) TPU, that generate strong  
cash flow.                                                                      

Noveon International was acquired for cash of $920.2 million plus     
transaction costs of $10.5 million less certain seller expenses of $32.9 million
and cash acquired of $103.0 million. In addition, we assumed $1,103.1 million of
long-term indebtedness from Noveon International. Noveon International had 2003 
revenues of $1,135.9 million.                                                   

   Beginning in the second quarter of 2004, we reorganized our business as a
result of the Noveon International acquisition into two business units and      
reporting segments: the lubricant additives segment, also referred to as        
Lubrizol Additives, and the specialty chemicals segment, also referred to as    
Noveon. The lubricant additives segment represents approximately 56% of pro     
forma consolidated revenues for the year ended December 31, 2003 and is         
comprised of our previous business in fluid technologies for transportation     
(FTT), advanced fluid systems, emulsified products and the former industrial    
additives product group of fluid technologies for industry (FTI). The specialty 
chemicals segment represents approximately 44% of pro forma consolidated        
revenues for the year ended December 31, 2003 and is comprised of the businesses
of the                                                                          

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acquired Noveon International and the former performance chemicals group of FTI.
Note 13 to our consolidated financial statements for the year ended December 31,
2003 contains a further description of the nature of our operations, the product
lines within each of the reporting segments, segment profitability and related  
financial disclosures for the reportable segments.                              

LUBRICANT ADDITIVES SEGMENT                                                 

  A variety of industry market forces and conditions continue to influence
the lubricant additives business. A key factor is the low global growth rate for
this business, which we believe is in the range of approximately 0% to 1% per   
year. Additional characteristics of this market are:                            

   - Consolidation of the customer base in recent years, which has increased
       the competitiveness of the transportation lubricant additives market. Our
    volume for 2003 and, to a lesser extent, the first six months of 2004,
    was impacted by the loss of a large piece of business as a result of a
major oil company merger.                                         

   - Frequent product specification changes driven primarily by OEMs and the
   impact of environmental and fuel economy regulations on the OEMs. The
       specification changes require us to incur product development and testing
     costs, but also enable us to apply our technological know-how to create
       products and solve problems. We believe our technology, and our expertise
in applying it, are key strengths.                                

- Improved engine design, which can result in longer lubricant drain  
intervals. Longer drain intervals lessen demand for lubricants.   

- New vehicle production levels, which affect our specialty driveline 
   fluids in particular because the initial factory fill is an important
market factor in that product line.                               

  We believe we are the market leader in lubricant additives and intend to
remain the leader by continuing to invest in this business.                     

SPECIALTY CHEMICALS SEGMENT                                                 

     Our specialty chemicals segment's growth strategy involves a combination of
internal growth and acquisitions. Since 2000 and prior to the acquisition of    
Noveon International, we made eight acquisitions with aggregate annual revenues 
of approximately $200.0 million. In 2002, we completed four acquisitions having 
aggregate annual revenues of approximately $85.0 million, including Chemron     
Corporation, a supplier of specialty surfactants principally for the personal   
care market. In 2003, we acquired a personal care ingredients business from     
Amerchol Corporation, a subsidiary of The Dow Chemical Company. Also in 2003, we
expanded our foam control additives business with the acquisition of silicone   
product lines, which expanded our foam control additives to approximately $40.0 
million in annual revenues. In late January 2004, we acquired the additives     
business of Avecia, with annual revenues of approximately $50.0 million. This   
business develops, manufactures and markets high-value additives used in        
coatings and inks. With the acquisition of Noveon International, our specialty  
chemicals segment now represents nearly half of pro forma consolidated revenues.

 We have a strategy to continue to achieve internal growth in the Noveon
segment by using our strengths, including our technology, formulating skills and
broad geographic infrastructure, to develop and invest in new fluid technology  
applications in higher-growth industrial and consumer markets. Key factors to   
our success continue to be the introduction of new products, development of new 
applications for existing products, cross-selling of products and geographic    
expansion.                                                                      

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PRIMARY FACTORS AFFECTING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2004    

   In addition to higher shipment volume in the lubricant additives segment,
particularly in the second quarter, along with the contribution from Noveon     
International and other acquisitions and ongoing organic business growth in the 
specialty chemicals segment, the factors that most affected our six-month 2004  
results were:                                                                   

- increased raw material costs;                                       

- cost control initiatives, including restructuring programs; and     

- currency effects.                                                   

   Raw material costs are significantly influenced by the price of crude oil
and natural gas, which have been subject to periods of rapid and significant    
movements in price. Our results are affected by how quickly and the extent to   
which we are able to change our product selling prices in reaction to raw       
material cost and operating cost changes. Our average raw material cost,        
excluding the impact of acquisitions, increased 8% in the first half of 2004    
compared to the first half of 2003. The lubricant additives segment has         
initiated two price increases in 2004 in order to attempt to recover these      
costs.                                                                          

Our operating cost structure has been pressured by higher energy,     
insurance, pension and health care expenses. Additionally, a large portion of   
our manufacturing expenses are fixed in the short term. As a result of these    
cost pressures and to achieve a more competitive cost structure, primarily in   
the lubricant additives segment, we implemented several restructuring programs  
in 2003. Additionally, on June 30, 2004, following our acquisition of Noveon    
International, we announced a reduction of 95 employees, primarily affecting    
technical and commercial employees located at our Wickliffe, Ohio headquarters. 

   We conduct a significant amount of our business outside the United States
and are subject to business risks inherent in non-United States activities,     
including currency exchange rate fluctuations. As the United States dollar      
strengthens or weakens against other international currencies in which we       
transact business, our financial results will be affected. Currency had an      
overall favorable effect on our operating results in both 2003 and the six      
months ended June 30, 2004.                                                     

FINANCIAL POSITION                                                          

     We had $2,380.3 million of debt outstanding at June 30, 2004, most of which
we incurred in connection with our acquisition of Noveon International,         
including bridge loan financing of $1,797.0 million, which is due May 2005. As a
result, our total debt as a percent of capitalization has increased from 29% at 
December 31, 2003 to 71% at June 30, 2004. We will also incur increased interest
expense. We intend to implement a permanent capital structure in the near-term  
that will replace the temporary bridge facility and reduce our interest cost.   
The permanent capital structure is expected to include approximately $426.2     
million in new common equity. Our debt level will require us to dedicate a      
significant portion of our cash flow to make interest and principal payments,   
thereby reducing the availability of our cash flow for acquisitions or other    
purposes. Nevertheless, we believe our future operating cash flows will be      
sufficient to cover our debt repayments and other obligations, and that we have 
untapped borrowing capacity that can provide us with additional financial       
resources.                                                                      

RESULTS OF OPERATIONS                                                           

SIX MONTHS ENDED JUNE 30, 2004 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2003     

   Our revenues increased in the second quarter of 2004 as compared with the
second quarter of 2003, primarily due to acquisitions. Excluding acquisitions,  
revenues increased primarily due to higher ongoing shipment volume and favorable
currency effect. The increased revenues partially were offset by higher raw     
material costs, manufacturing expenses and selling and administrative expenses. 
The 2004 second quarter also                                                    

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included significant purchase accounting charges associated with the acquisition
of Noveon International and incremental acquisition-related financing costs.    
Primarily as a result of these factors, net income decreased 87% in the second  
quarter of 2004, compared with the same period in 2003.                         

 As a result of the June 3, 2004 acquisition of Noveon International, we
reorganized into two operating and reporting segments: lubricant additives and  
specialty chemicals. Lubricant additives comprised approximately 78% of our     
consolidated revenues and 89% of our segment operating income for the first six 
months of 2004. See Note 13 to the consolidated financial statements for the    
year ended December 31, 2003 and the "Segment Analysis" section for further     
financial disclosures by reporting segment.                                     

Analysis of Revenues
----------------------

                                                        [Enlarge/Download Table]

                                                                                  EXCLUDING   
                                                                                ACQUISITIONS  
                                                                               ---------------
                                                               $        %        $        %   
                                          2003      2004     CHANGE   CHANGE   CHANGE   CHANGE
                                        --------  --------   ------   ------   ------   ------
                                                        (DOLLARS IN MILLIONS)                 
                                                                                              
Three-Month Period Ended June 30:                                                             
  Net sales............................ $  514.3  $  720.2   $205.9     40%    $ 74.5     14% 
  Royalties and other revenues.........      0.4       1.3      0.9    239%       1.0    232% 
                                        --------  --------   ------            ------         
  Total revenues....................... $  514.7  $  721.5   $206.8     40%    $ 75.5     15% 
                                        ========  ========   ======            ======         
Six-Month Period Ended June 30:                                                               
  Net sales............................ $1,021.3  $1,298.1   $276.8     27%    $126.6     12% 
  Royalties and other revenues.........      1.6       2.1      0.5     33%       0.5     31% 
                                        --------  --------   ------            ------         
  Total revenues....................... $1,022.9  $1,300.2   $277.3     27%    $127.1     12% 
                                        ========  ========   ======            ======         

   Consolidated revenues increased 40% in the second quarter of 2004 and 27%
in the first six months of 2004 compared to the same periods in 2003, primarily 
due to acquisitions and higher ongoing shipment volume. Acquisitions in 2004    
included Noveon International and the hyperdispersants business purchased from  
Avecia. Acquisitions in 2003 included the personal care specialty ingredients   
business purchased from Amerchol Corporation, a subsidiary of The Dow Chemical  
Company, and the silicone product lines purchased from BASF. The Noveon         
International acquisition contributed $109.9 million towards the increase in    
revenues in both the second quarter of 2004 and the first six months of 2004    
compared with the same periods in 2003.                                         

     Excluding acquisitions, ongoing shipment volume increased 11% in the second
quarter and 7% in the first six months of 2004 compared to the same periods in  
2003. Sequentially, excluding acquisitions, consolidated second quarter 2004    
shipment volume was 6% higher than the first quarter of 2004.                   

 The following table shows our shipment volume by geographic zone in the
second quarter and the first half of 2004.                                      

                                                        [Enlarge/Download Table]

                                                              THREE-MONTH     SIX-MONTH  
                                                             PERIOD ENDED   PERIOD ENDED 
                                                             JUNE 30, 2004  JUNE 30, 2004
                                                                VOLUME         VOLUME    
                                                             -------------  -------------
                                                                                         
North America...............................................       48%            47%    
Europe......................................................       27%            27%    
Asia-Pacific/Middle East....................................       20%            20%    
Latin America...............................................        5%             6%    
                                                                  ---            ---     
Total.......................................................      100%           100%    
                                                                  ===            ===     

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    Shipment volume patterns vary in different geographic zones. The following
table shows the changes in shipment volume by geographic zone in the second     
quarter and the first six months of 2004, compared with the corresponding       
periods in 2003.                                                                

                                                        [Enlarge/Download Table]

                                                                              EXCLUDING  
                                                                            ACQUISITIONS 
                                                                            -------------
                                                             2004 VS. 2003  2004 VS. 2003
                                                               % CHANGE       % CHANGE   
                                                             -------------  -------------
                                                                                         
Three-Month Period Ended June 30:                                                        
  North America.............................................      30%             8%     
  Europe....................................................      22%            12%     
  Asia-Pacific/Middle East..................................      30%            23%     
  Latin America.............................................       4%             0%     
  Total.....................................................      26%            11%     
Six-Month Period Ended June 30:                                                          
  North America.............................................      18%             6%     
  Europe....................................................       9%             4%     
  Asia-Pacific/Middle East..................................      20%            16%     
  Latin America.............................................       1%            (1%)    
  Total.....................................................      15%             7%     

     Segment shipment volume variances by geographic zone as well as the factors
explaining the changes in segment revenues for the second quarter of 2004 and   
the first six months of 2004 compared with the respective periods of 2003 are   
contained under the "Segment Analysis" section below.                           

Analysis of Costs and Expenses
--------------------------------

                                                        [Enlarge/Download Table]

                                                                                   EXCLUDING   
                                                                                 ACQUISITIONS  
                                                                                ---------------
                                                                $        %        $        %   
                                            2003     2004     CHANGE   CHANGE   CHANGE   CHANGE
                                           ------  --------   ------   ------   ------   ------
                                                          (DOLLARS IN MILLIONS)                
                                                                                               
Three-Month Period Ended June 30:                                                              
  Cost of sales........................... $372.6  $  529.5   $156.9     42%    $ 57.9     16% 
  Selling and administrative expenses.....   50.2      70.2     20.0     40%       6.5     13% 
  Research, testing and development                                                            
     expenses.............................   40.6      45.5      4.9     12%      (0.4)    (1%)
  Amortization of intangible assets.......    1.2       4.5      3.3      *        0.0      *  
  Write-off of acquired in-process                                                             
     research and development.............      -      35.0     35.0      *        0.0      *  
  Restructuring charge....................    3.5       8.0      4.5      *        0.0      *  
                                           ------  --------   ------            ------         
  Total costs and expenses................ $468.1  $  692.7   $224.6     48%    $ 64.0     14% 
                                           ======  ========   ======            ======         
Six-Month Period Ended June 30:                                                                
  Cost of sales........................... $740.9  $  955.8   $214.9     29%    $103.8     14% 
  Selling and administrative expenses.....  101.0     122.0     21.0     21%       6.0      6% 
  Research, testing and development                                                            
     expenses.............................   82.2      86.3      4.1      5%      (2.0)    (2%)
  Amortization of intangible assets.......    2.3       6.4      4.1      *        0.5      *  
  Write-off of acquired in-process                                                             
     research and development.............      -      35.0     35.0      *        0.0      *  
  Restructuring charge....................    7.0       8.0      1.0      *        0.0      *  
                                           ------  --------   ------            ------         
  Total costs and expenses................ $933.4  $1,213.5   $280.1     30%    $108.3     12% 
                                           ======  ========   ======            ======         

---------------                                                                 

* Calculation not meaningful                                                    

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  Cost of sales increased 42% in the second quarter of 2004 and 29% in the
first six months of 2004 compared with the same periods in 2003, due to         
acquisitions, higher average raw material cost and higher manufacturing         
expenses. Excluding acquisitions, average raw material cost increased 8% in both
the second quarter and the first six months of 2004 compared with the same      
periods in 2003, primarily due to an increase in the combination of raw material
prices and product mix along with unfavorable currency effects. Material cost   
included purchase adjustments associated with the increased valuation of        
inventory of $5.8 million in the second quarter of 2004 and $6.7 million in the 
first six months of 2004 for the Noveon International and hyperdispersants      
acquisitions. The Noveon International purchase adjustment for the increased    
valuation of inventory was $4.9 million, or $0.06 per share, in the second      
quarter of 2004. Looking forward, we expect continued increases in raw material 
prices, which may lead to higher cost of sales.                                 

Total manufacturing expenses, which are included in cost of sales,    
increased 32% in the second quarter of 2004 and 24% in the first six months of  
2004 compared with the same periods in 2003, primarily due to acquisitions.     
Excluding acquisitions, total manufacturing expenses increased 6% in the second 
quarter of 2004 and 9% in the first six months of 2004 compared with the same   
periods in 2003, primarily due to unfavorable currency effect and higher        
incentive compensation expense. The first six months of manufacturing expense   
also included $2.0 million for an environmental accrual relating to remediation 
at our Texas manufacturing facility. Excluding acquisitions, currency and the   
environmental accrual adjustment, manufacturing expenses increased 3% in the    
second quarter of 2004 and 4% in the first six months of 2004 compared with the 
same periods in 2003.                                                           

     Gross profit (net sales less cost of sales) increased $49.0 million, or 35%
($16.7 million, or 12%, excluding acquisitions), in the second quarter of 2004  
and $61.9 million, or 22% ($22.8 million, or 8%, excluding acquisitions), in the
first six months of 2004 compared with the same periods in 2003. Excluding      
acquisitions, the increase primarily was due to higher shipment volume and      
favorable currency effect, partially offset by higher average raw material cost 
and higher manufacturing costs. Our gross profit percentage (gross profit       
divided by net sales) decreased to 26.5% in the second quarter of 2004 and 26.4%
in the first six months of 2004, compared to 27.5% in both the second quarter   
and first half of 2003. The decrease for both periods primarily was due to      
higher raw material costs. Sequentially, the gross profit percentage increased  
in the second quarter of 2004 compared with 26.2% in the first quarter of 2004  
and 24.9% in the fourth quarter of 2003.                                        

   Excluding acquisitions, selling and administrative expenses increased 13%
in the second quarter and 6% in the first six months of 2004 compared with the  
same periods in 2003, primarily due to higher incentive compensation expense and
unfavorable currency effect.                                                    

     Research, testing and development expenses (technology expenses), excluding
acquisitions, decreased 1% in the second quarter of 2004 and 2% in the first six
months of 2004 compared with the same periods in 2003, primarily due to lower   
testing activity at outside laboratories, partially offset by unfavorable       
currency effects and higher incentive compensation expense.                     

   Beginning in 2004, we have reclassified amortization of intangible assets
as a separate line item of expense. The prior year interim results for the three
and six months ended June 30, 2003 have been reclassified to conform with the   
current year presentation. Previously this item had been included within other  
income (expense). The increased amortization expense in the second quarter and  
the first six months of 2004 compared with the same periods in 2003 primarily   
was due to the Noveon International and hyperdispersants acquisitions in 2004   
and the personal care specialty ingredients business acquisition in 2003.       

We included a one-time, non-cash charge of $35.0 million, or $0.42 per
share, in total costs and expenses for the second quarter of 2004 and the first 
six months of 2004 to write-off the estimated fair value of acquired in-process 
research and development, or IPR&D, projects associated with the Noveon         
International acquisition. Costs to acquire IPR&D projects that have no         
alternative future use and that have not reached technological feasibility at   
the date of acquisition are expensed upon acquisition. We based the estimated   
value of IPR&D projects on third-party valuations of the fair values of IPR&D   
costs.                                                                          

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   In the second quarter of 2004, we recorded a restructuring charge of $8.0
million, or $0.10 per share, consisting of workforce reductions of $6.4 million 
and a write-off of $1.6 million of impaired assets related to PuriNOx(TM)       
technology. We eliminated 95 positions, primarily at our Wickliffe, Ohio        
headquarters. We expect these reductions will be completed by the end of the    
third quarter in 2004. The second-half 2004 pre-tax restructuring charge will   
include an estimated $6.0 million non-cash pension benefit settlement charge and
the remainder of the employee severance costs associated with the workforce     
reductions, approximating $3.0 million.                                         

   In the second quarter of 2003, we recorded a restructuring charge of $3.5
million, or $0.05 per share, primarily related to our Bromborough, England      
intermediate production and blending facility. The charge was comprised of $2.8 
million for asset write-offs and employee severance at our Bromborough facility 
and $0.7 million for a voluntary separation program at our joint venture in     
India. In the first half of 2003, the total restructuring charge was $7.0       
million, or $0.09 per share, which included $6.3 million for Bromborough and    
$0.7 million for India. The Bromborough charge primarily consisted of $2.8      
million in employee separation benefits and $3.3 million in asset impairment    
charges for production units taken out of service.                              

Analysis of Other Items and Net Income
------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                   EXCLUDING   
                                                                                 ACQUISITIONS  
                                                                                ---------------
                                                                $        %        $        %   
                                             2003     2004    CHANGE   CHANGE   CHANGE   CHANGE
                                            ------   ------   ------   ------   ------   ------
                                                           (DOLLARS IN MILLIONS)               
                                                                                               
Three-Month Period Ended June 30:                                                              
  Other income (expense)................... $  1.1   $ (1.9)  $(3.0)      *     $(3.5)      *  
  Interest expense -- net..................   (5.1)   (17.1)  (12.0)      *       0.8       *  
  Income before income taxes...............   42.6      9.8   (32.8)    (77)%     4.2      10% 
  Provision for income taxes...............   13.2      5.9    (7.3)    (56)%    14.8     112% 
  Net income............................... $ 29.4   $  3.9   $(25.5)   (87)%   $(10.5)   (36)%
Six-Month Period Ended June 30:                                                                
  Other income (expense)................... $  2.0   $  2.4   $ 0.4       *     $ 0.1       *  
  Interest expense -- net..................  (10.0)   (22.4)  (12.4)      *       0.3       *  
  Income before income taxes...............   81.5     66.7   (14.8)    (18)%    18.2      22% 
  Provision for income taxes...............   26.1     25.2    (0.9)     (3)%    11.6      44% 
  Net income............................... $ 55.4   $ 41.5   $(13.9)   (25)%   $ 6.6      12% 

---------------                                                                 

* Calculation not meaningful                                                    

The decrease in other income (expense) in the second quarter of 2004, 
compared to the same period in 2003, was due to currency translation losses.    
Other income for the first six months of 2004 included a gain of $6.4 million   
($.08 per share) on a currency forward contract to purchase pound sterling      
related to the acquisition of the hyperdispersants business. We secured the     
forward contract in December 2003 and completed the acquisition at the end of   
January 2004. This gain partially was offset by other currency translation      
losses.                                                                         

    The increase in net interest expense for both the second quarter and first
six months of 2004, compared to the same periods in 2003, primarily was due to  
the Noveon International acquisition-related financing costs of $12.2 million,  
or $0.14 per share, comprised of the temporary bridge facility and Noveon       
International accrued interest of $6.5 million, amortization of temporary bridge
facility fees of $2.8 million and termination of an interest rate swap of $2.9  
million.                                                                        

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 We had an effective tax rate of 59.8% in the second quarter of 2004 and
37.8% in the first six months of 2004, compared with 31.1% in the second quarter
of 2003 and 32.0% in the first six months of 2003. The increase in the effective
tax rate for both periods in 2004 primarily was due to significant non-taxable  
currency gains that occurred in 2003 but did not repeat in 2004, and the        
unfavorable impact of the Noveon International acquisition on our U.S. tax rate.
Noveon International's U.S. tax loss carryforwards, combined with the interest  
expense associated with the acquisition financing, will reduce our ability to   
claim U.S. foreign tax credits and to obtain U.S. tax benefits on exports. The  
second quarter tax provision was unusually high because it reflected the        
cumulative year-to-date impact of these items on our effective tax rate. We     
estimate our 2004 effective tax rate will be 37.5%, excluding the tax effect of 
the restructuring charge, which had a 35% tax rate.                             

  Primarily as a result of the above factors, our net income per share was
$0.08 for the second quarter of 2004 compared with $0.57 for the second quarter 
of 2003, and $0.80 for the first six months of 2004 compared with $1.07 for the 
first six months of 2003. Earnings in both the second quarter and first six     
months of 2004 included a one-time write-off for IPR&D projects from the Noveon 
International acquisition of $0.42 per share, a purchase adjustment associated  
with the increased valuation of Noveon International-acquired inventory of $0.06
per share, a restructuring charge of $0.10 per share, incremental acquisition-  
related financing costs of $0.14 per share and an increase in the effective tax 
rate compared to the first quarter 2004 rate equivalent to $0.08 per share.     
Earnings in 2004 benefited from Noveon International's June 2004 operating      
income of $10.7 million, or $0.13 per share, before financing costs and purchase
accounting adjustments. Earnings in the first six months of 2004 also included a
gain on a currency forward contract of $0.08 per share. The 2003 restructuring  
charge reduced earnings $0.05 per share in the second quarter of 2003 and $0.09 
per share in the first half of 2003.                                            

SEGMENT ANALYSIS                                                                

   We primarily evaluate performance and allocate resources based on segment
operating income, defined as revenues less expenses identifiable to the product 
lines included within each segment, as well as projected future returns. As part
of reorganizing our business into two reporting segments, we have reclassified  
certain administrative expenses that previously were deducted in arriving at    
segment operating income and are now classified as unallocated corporate        
expenses. Segment operating income will reconcile to consolidated income before 
tax by deducting the write-off of acquired IPR&D projects, restructuring        
charges, net interest expense, corporate expenses and corporate other income    
that we do not attribute to either reporting segment.                           

 We have restated current year and prior year amounts to reflect the new
reporting classifications of products between the two reporting segments and the
new definition of segment operating income.                                     

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Operating Results by Segment
------------------------------- 

                                                        [Enlarge/Download Table]

                                                                                  EXCLUDING   
                                                                                ACQUISITIONS  
                                                                               ---------------
                                                               $        %        $        %   
                                          2003      2004     CHANGE   CHANGE   CHANGE   CHANGE
                                        --------  --------   ------   ------   ------   ------
                                                        (DOLLARS IN MILLIONS)                 
                                                                                              
REVENUES                                                                                      
Three-Month Period Ended June 30:                                                             
Lubricant additives.................... $  453.3  $  522.1   $ 68.8     15%    $ 68.8     15% 
Specialty chemicals....................     61.4     199.4    138.0    225%       6.7     11% 
                                        --------  --------   ------            ------         
  Total................................ $  514.7  $  721.5   $206.8     40%    $ 75.5     15% 
                                        ========  ========   ======            ======         
Six-Month Period Ended June 30:                                                               
Lubricant additives.................... $  903.2  $1,013.3   $110.1     12%    $110.1     12% 
Specialty chemicals....................    119.7     286.9    167.2    140%      17.0     14% 
                                        --------  --------   ------            ------         
  Total................................ $1,022.9  $1,300.2   $277.3     27%    $127.1     12% 
                                        ========  ========   ======            ======         
GROSS PROFIT                                                                                  
Three-Month Period Ended June 30:                                                             
Lubricant additives.................... $  127.2  $  143.6   $ 16.4     13%    $ 16.4     13% 
Specialty chemicals....................     14.5      47.1     32.6    225%       0.3      2% 
                                        --------  --------   ------            ------         
  Total................................ $  141.7  $  190.7   $ 49.0     35%    $ 16.7     12% 
                                        ========  ========   ======            ======         
Six-Month Period Ended June 30:                                                               
Lubricant additives.................... $  251.0  $  272.4   $ 21.4      8%    $ 21.4      8% 
Specialty chemicals....................     29.4      69.9     40.5    138%       1.4      5% 
                                        --------  --------   ------            ------         
  Total................................ $  280.4  $  342.3   $ 61.9     22%    $ 22.8      8% 
                                        ========  ========   ======            ======         
SEGMENT OPERATING INCOME                                                                      
Three-Month Period Ended June 30:                                                             
Lubricant additives.................... $   58.6  $   72.8   $ 14.2     24%    $ 14.2     24% 
Specialty chemicals....................      0.6      11.4     10.8      *        0.0      *  
                                        --------  --------   ------            ------         
  Total................................ $   59.2  $   84.2   $ 25.0     42%    $ 14.2     24% 
                                        ========  ========   ======            ======         
Six-Month Period Ended June 30:                                                               
Lubricant additives.................... $  114.2  $  135.5   $ 21.3     19%    $ 21.3     19% 
Specialty chemicals....................      1.4      16.4     15.0      *        0.1      7% 
                                        --------  --------   ------            ------         
  Total................................ $  115.6  $  151.9   $ 36.3     31%    $ 21.4     19% 
                                        ========  ========   ======            ======         

---------------                                                                 

* Calculation not meaningful                                                    

LUBRICANT ADDITIVES SEGMENT                                                 

   Revenues increased 15% in the second quarter of 2004 compared to the same
period in 2003, primarily due to 12% higher volume with the remainder due to    
higher average selling price driven almost entirely by favorable currency. The  
combination of real selling price and product mix was neutral. Revenues         
increased 12% in the first six months of 2004 compared to the same period in the
prior year, primarily due to 7%                                                 

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higher volume, 4% favorable currency and 1% higher product mix and price.       
Sequentially, shipment volume in the second quarter of 2004 increased 7% over   
the first quarter of 2004 and 15% over the fourth quarter of 2003.              

 The following table shows our shipment volume by geographic zone in the
second quarter and the first half of 2004.                                      

                                                        [Enlarge/Download Table]

                                                              THREE-MONTH     SIX-MONTH  
                                                             PERIOD ENDED   PERIOD ENDED 
                                                             JUNE 30, 2004  JUNE 30, 2004
                                                                VOLUME         VOLUME    
                                                             -------------  -------------
                                                                                         
North America...............................................       41%            41%    
Europe......................................................       30%            30%    
Asia-Pacific/Middle East....................................       23%            23%    
Latin America...............................................        6%             6%    
                                                                  ---            ---     
Total.......................................................      100%           100%    
                                                                  ===            ===     

    Shipment volume patterns vary in different geographic zones. The following
table shows the changes in shipment volume by geographic zone in the second     
quarter and the first six months of 2004.                                       

                                                        [Enlarge/Download Table]

                                                       THREE-MONTH           SIX-MONTH     
                                                         PERIODS           PERIODS ENDED   
                                                   ENDED JUNE 30, 2004     JUNE 30, 2004   
                                                    VS. JUNE 30, 2003    VS. JUNE 30, 2003 
                                                        % CHANGE             % CHANGE      
                                                   -------------------  -------------------
                                                                                           
North America.....................................          9%                   6%        
Europe............................................         12%                   4%        
Asia-Pacific/Middle East..........................         23%                  16%        
Latin America.....................................         (2%)                 (3%)       
Total.............................................         12%                   7%        

   Overall, higher shipment volume in the second quarter of 2004 compared to
the same period in 2003 partially was due to market recovery for finished       
lubricants. The shipment volume increase in North America for both periods      
primarily resulted from increases in our driveline and industrial additives     
product lines due to market share gains as well as market recovery. Higher      
shipment volume in Europe in the second quarter primarily was due to increases  
in our engine additives product lines due to lost marine diesel business that   
occurred after the first quarter of 2003, which subsequently was regained late  
in the first quarter of 2004. In addition, we experienced some business gains in
our industrial additives product lines. The shipment volume increase in         
Asia-Pacific for both periods primarily was due to economic recovery, market    
share gains in China and favorable timing of orders. The decrease in Latin      
America was associated with the loss of a major international customer that we  
previously disclosed in 2003.                                                   

    Lubrizol Additives implemented a price increase in March 2004 for products
sourced from North America plants and in the second quarter 2004 for products   
sourced from Asia-Pacific and Latin America. We announced a second price        
increase in June 2004, which was effective beginning in mid-June for products   
sourced from North America and Europe billed in U.S. dollar currency and        
beginning in mid-July for products sourced from Latin America. We will also     
begin implementing previously announced price increases in August for products  
sourced from Asia-Pacific. The announced price increases were in response to raw
material cost increases and continuing high prices for natural gas used for     
utilities in our plants.                                                        

    Segment gross profit is defined as sales less cost of sales, which include
material cost and all manufacturing expenses. The 13% increase in segment gross 
profit in the second quarter of 2004 and the 8% increase in the first six months
of 2004, compared with the same periods in 2003, primarily was due to higher    
revenues partially offset by higher average raw material cost and manufacturing 
expenses. In the                                                                

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second quarter of 2004, average material cost increased 7% and manufacturing    
expenses increased 6%, compared to the second quarter of 2003. In the first six 
months of 2004, average material cost increased 8% and manufacturing expenses   
increased 10%, compared to the first six months of 2003. The increase in        
manufacturing expenses for both periods primarily was due to higher throughput, 
higher incentive compensation expense and unfavorable currency effect.          

The gross profit percentage for the segment was 27.6% for the second  
quarter of 2004 compared with 28.1% for the second quarter of 2003, and 26.9%   
for the first six months of 2004 compared with 27.8% in the first six months of 
2003. The decrease primarily was due to higher average raw material cost.       

Selling, technical, administrative and research, or STAR, expenses    
increased $3.3 million, or 5% for the second quarter of 2004, compared with the 
second quarter of 2003, primarily due to higher incentive compensation expense  
and currency effects. STAR expenses increased $1.1 million, or 1% in the first  
six months of 2004, compared with the same period in 2003 due to higher         
incentive compensation expense and currency effects, partially offset by a $1.3 
million decrease in technical expenses, primarily due to lower outside testing  
expenses as a result of higher utilization of our internal testing facilities.  

Segment operating income (revenues less expenses attributable to the  
product lines aggregated within each segment) increased 24% for the second      
quarter of 2004 and increased 19% for the first six months of 2004, compared    
with the same periods in 2003, due to higher gross profit that was partially    
offset by higher expenses.                                                      

SPECIALTY CHEMICALS SEGMENT                                                 

     Revenues increased 225% in the second quarter of 2004 and 140% in the first
six months of 2004 compared with the same periods in 2003, primarily due to the 
2004 acquisitions of Noveon International and the hyperdispersants business and 
the 2003 acquisition of the personal care specialty ingredients business.       
Excluding acquisitions, revenues increased 11% in the second quarter of 2004    
compared to the same period in 2003, due to 5% higher shipment volumes, 2%      
favorable currency impact and 3% stronger price and product mix. Excluding      
acquisitions, segment revenues increased 14% in the first six months of 2004    
compared to the same period in the prior year primarily due to 8% higher volume,
3% favorable currency impact and 3% stronger price and product mix. The higher  
priced product mix for both the second quarter 2004 and the first six months of 
2004 primarily occurred in our consumer specialties product line.               

 The following table shows our shipment volume by geographic zone in the
second quarter and the first half of 2004.                                      

                                                        [Enlarge/Download Table]

                                                              THREE-MONTH     SIX-MONTH  
                                                             PERIOD ENDED   PERIOD ENDED 
                                                             JUNE 30, 2004  JUNE 30, 2004
                                                                VOLUME         VOLUME    
                                                             -------------  -------------
                                                                                         
North America...............................................       74%            75%    
Europe......................................................       16%            16%    
Asia-Pacific/Middle East....................................        7%             6%    
Latin America...............................................        3%             3%    
                                                                  ---            ---     
Total.......................................................      100%           100%    
                                                                  ===            ===     

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    Shipment volume patterns vary in different geographic zones. The following
table shows the changes in shipment volume by geographic zone in the second     
quarter and the first six months of 2004, compared with the corresponding       
periods in 2003.                                                                

                                                        [Enlarge/Download Table]

                                                                              EXCLUDING  
                                                                            ACQUISITIONS 
                                                             2004 VS. 2003  2004 VS. 2003
                                                               % CHANGE       % CHANGE   
                                                             -------------  -------------
                                                                                         
Three-Month Period Ended June 30:                                                        
  North America.............................................      114%            3%     
  Europe....................................................      161%           10%     
  Asia-Pacific/Middle East..................................      342%            4%     
  Latin America.............................................       76%           26%     
  Total.....................................................      126%            5%     
Six-Month Period Ended June 30:                                                          
  North America.............................................       66%            7%     
  Europe....................................................       92%            9%     
  Asia-Pacific/Middle East..................................      268%           35%     
  Latin America.............................................       40%           14%     
  Total.....................................................       74%            8%     

   Excluding acquisitions, the shipment volume increase in North America for
both periods primarily was due to market share gains and growth in the          
fermentation industry in our consumer specialties product line. This product    
line also benefited for the first six months of 2004 from the extension of the  
2003 sugar beet season. Additionally, the second quarter 2004 shipment volume   
was higher due to improvements in the mining sector. The increase in Europe for 
both periods was due to the impact of an improving European economy and market  
share gains in our performance coatings product line. The increase in           
Asia-Pacific/ Middle East for both periods was due to higher shipment volume in 
our performance coatings product line as approvals we have obtained in the      
United States and Europe are being transferred by our customers to Asia. The    
first six-month comparison in this region also benefited from market share gains
in our consumer specialties product line.                                       

 The increase in Latin America for both periods primarily was due to new
business and market share gains in our consumer specialties product line.       

Segment gross profit increased 225% (2% excluding acquisitions) in the
second quarter of 2004 and 138% (5% excluding acquisitions) in the first half of
2004 compared with the same periods in 2003. Excluding acquisitions, the        
increase in segment gross profit for both periods was due to increased revenues 
as a result of higher shipment volume and higher price and product mix partially
offset by higher raw material costs. The increase in segment gross profit for   
the first six months of 2004 compared to the same period in 2003 partially was  
also offset by higher manufacturing expenses. The gross profit percentage for   
this segment was 23.6% in the second quarter of 2004 and 24.4% in the first half
of 2004 compared with 23.6% and 24.6% in the respective periods in 2003.        
Excluding acquisitions, the gross profit percentage was 21.7% in the first      
quarter of 2004 and 22.5% in the first six months of 2004. The decrease in gross
profit percentage for both periods was due to higher raw material costs that    
partially were offset by higher product price and mix. We began implementing    
price increases during the first quarter of 2004 in the range of 3% to 5% in    
response to the rising raw material costs.                                      

   STAR expenses increased $19.5 million, or 143%, for the second quarter of
2004 and increased $22.8 million, or 83%, for the first six months of 2004      
compared with the same periods in 2003, primarily due to acquisitions.          

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Segment operating income increased in the second quarter and first six
months of 2004 compared with the same periods in 2003, primarily due to the     
impact of acquisitions.                                                         

2003 COMPARED WITH 2002                                                         

 We had record consolidated revenues for 2003. However, income per share
before cumulative effect of a change in accounting principle declined 28% in    
2003 to $1.76 per share from $2.45 per share in 2002. The primary operating     
drivers of the lower earnings were lower shipment volume and higher raw material
costs and manufacturing expenses, which more than offset higher selling         
price/mix, favorable currency exchange rate movements, a lower effective tax    
rate and acquisitions that were accretive to earnings. In addition, a           
restructuring charge reduced 2003 earnings by $0.29 per share.                  

Analysis of Revenues
----------------------

                                                        [Enlarge/Download Table]

                                                                                   EXCLUDING   
                                                                                 ACQUISITIONS  
                                                                                ---------------
                                                                $        %        $        %   
                                           2002      2003     CHANGE   CHANGE   CHANGE   CHANGE
                                         --------  --------   ------   ------   ------   ------
                                                         (DOLLARS IN MILLIONS)                 
                                                                                               
Net sales............................... $1,980.3  $2,049.1   $68.8       3%    $25.8       1% 
Royalties and other revenues............      3.6       3.0    (0.6)    (15%)    (0.6)    (17%)
                                         --------  --------   -----             -----          
Total revenues.......................... $1,983.9  $2,052.1   $68.2       3%    $25.2       1% 
                                         ========  ========   =====             =====          

    In 2003, the increase in consolidated revenues was due to a 9% increase in
average selling price, partially offset by a 6% decline in shipment volume.     

     Changes in our shipment volume vary by geographic area. The following table
shows our 2003 shipment volume by geographic zone as well as the changes        
compared with 2002.                                                             

Analysis of Volume
--------------------

                                                        [Enlarge/Download Table]

                                                                                EXCLUDING  
                                                              2003             ACQUISITIONS
                                                             VOLUME  % CHANGE    % CHANGE  
                                                             ------  --------  ------------
                                                                                           
North America...............................................   45%      (5%)        (9%)   
Europe......................................................   28%      (8%)        (8%)   
Asia-Pacific/Middle East....................................   20%      (5%)        (5%)   
Latin America...............................................    7%      (2%)        (2%)   
                                                              ---                          
Total.......................................................  100%      (6%)        (8%)   
                                                              ===                          

Excluding acquisitions, approximately half of the decline in shipment 
volume was due to the loss of a portion of the business associated with a major 
international customer and 16% of the decline was due to a shift in our         
viscosity modifier product line from liquids to higher-value concentrated solid 
form. All geographic zones were affected by the loss of business with this      
customer and the viscosity modifier shift, though the effects were mostly seen  
in North America and Europe. In addition, weak worldwide demand for lubricants  
negatively impacted volume for the year. We believe that the economic and       
political conditions within certain countries of the Asia-Pacific/Middle East   
region contributed to the volume decline in this zone. See the "Segment         
Analysis" section for additional explanations of shipment volume changes by     
business segment and geographic zone in 2003 compared with 2002.                

  The 9% increase in average selling price was due to a 5% increase in the
combination of price and product mix and 4% favorable currency effects. We      
combine the impact of price and product mix, as frequent                        

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product changes in our lubricant additives segment have made it difficult to    
distinguish between the two components. Sequentially, the fourth quarter 2003   
average selling price was 3% higher than the third quarter of 2003, due to      
favorable currency effects, and 6% higher than the first quarter of 2003, due to
favorable currency effects and price increases implemented in the first half of 
the year. In February 2004, we announced an additional price increase in the    
lubricant additives segment.                                                    

Analysis of Costs and Expenses
--------------------------------

                                                        [Enlarge/Download Table]

                                                                                  EXCLUDING   
                                                                                ACQUISITIONS  
                                                                               ---------------
                                                               $        %        $        %   
                                          2002      2003     CHANGE   CHANGE   CHANGE   CHANGE
                                        --------  --------   ------   ------   ------   ------
                                                        (DOLLARS IN MILLIONS)                 
                                                                                              
Cost of sales.......................... $1,416.3  $1,507.8   $ 91.5      6%    $61.7       4% 
Selling and administrative expenses....    196.9     202.9      6.0      3%      2.2       1% 
Research, testing and development                                                             
  expenses.............................    168.3     167.0     (1.3)    (1%)    (2.9)     (2%)
Restructuring charge...................        -      22.5     22.5      *      22.5       *  
                                        --------  --------   ------            -----          
  Total costs and expenses............. $1,781.5  $1,900.2   $118.7      7%    $83.5       5% 
                                        ========  ========   ======            =====          

---------------                                                                 

* Calculation not meaningful                                                    

    Cost of sales increased due to higher average raw material cost and higher
manufacturing expenses, partially offset by lower shipment volume. Average raw  
material cost increased 9% in 2003 compared with 2002, primarily due to 6%      
higher raw material prices and, to a lesser extent, unfavorable currency        
effects. Raw material prices started to increase in the second half of 2002 and 
continued to increase in the first and third quarters of 2003. Sequentially, the
fourth quarter 2003 average raw material cost increased 2% compared with the    
third quarter and 7% compared with the first quarter, primarily due to higher   
raw material prices driven by higher prices of crude oil and natural gas and    
unfavorable currency effects.                                                   

    Manufacturing expenses, which are included in cost of sales, increased 14%
(12% excluding acquisitions) in 2003 compared with 2002. The increase was due to
unfavorable currency effects, acquisitions, higher utility expenses and higher  
salary and benefit expenses, partially offset by a reduction in variable pay    
expense. In addition, total manufacturing expenses in 2003 included a $2.6      
million reclassification of expenses at certain subsidiaries of our specialty   
chemicals segment that were charged in 2002 to selling and administrative       
expenses or material costs.                                                     

Cost of sales in 2003 also included approximately $3.4 million in     
manufacturing expenses to cover costs associated with two fires that occurred   
during the second quarter of 2003. In April 2003, an after-working-hours fire   
destroyed a metalworking additive blending facility we leased in Detroit. There 
were no injuries, nor any damage to a nearby warehouse where we stored finished 
goods. We were able to supply customers from this warehouse and have permanently
shifted production to our Painesville, Ohio plant.                              

    In April 2003, a fire associated with a maintenance shutdown occurred in a
dispersant production unit at our plant in Le Havre, France. Again, there were  
no injuries and we were able to continue to supply customers from other         
facilities.                                                                     

   Excluding currency effects, acquisitions and the cost associated with the
fires, consolidated manufacturing expense increased 5% over 2002.               

    Gross profit (net sales less cost of sales) decreased $22.7 million, or 4%
($35.8 million, or 6%, excluding acquisitions), in 2003 compared with 2002. Our 
gross profit percentage (gross profit divided by net sales) decreased to 26.4%  
in 2003 compared with 28.5% in 2002. Excluding the impact of acquisitions, our  
gross profit percentage was 26.3% in 2003. These decreases primarily were due to
lower shipment volume,                                                          

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higher average raw material cost and higher manufacturing expenses, partially   
offset by higher average selling price and favorable net currency effects.      

   The selling and administrative expenses increase, excluding acquisitions,
was due to higher salary and benefit expenses and unfavorable currency effects, 
partially offset by lower variable pay expense and the reclassification to      
manufacturing expense of approximately $1.1 million of specialty chemicals      
segment costs that were classified as selling and administrative expenses in    
2002.                                                                           

The timing and amount of research, testing and development expenses   
(technology expenses) are affected by lubricant additives segment product       
standards, which change periodically to meet new emissions, efficiency,         
durability and other performance factors as engine and transmission designs are 
improved by OEMs. The decrease in technology expenses was due to lower testing  
activity at outside laboratories and a reduction in our variable pay expense,   
partially offset by unfavorable currency effects and higher salary and benefit  
expenses. In addition, technology expenses in 2003 included a write-down of $1.1
million related to a former technical facility in Japan that we sold during the 
third quarter of 2003. During 2003, approximately 82% of our technology cost was
incurred in company-owned facilities and 18% was incurred at third-party testing
facilities, compared with 78% and 22%, respectively, in 2002. In 2003, we       
completed a development program for GF-4, the United States passenger car motor 
oil technical standard that is scheduled for commercial introduction in 2004. We
do not expect a major shift by our customers to GF-4 before the fourth quarter  
of 2004.                                                                        

   In 2003, we recorded a restructuring charge of $22.5 million, or $.29 per
share, related to the separation of approximately 250 employees in the United   
States, Europe and India, comprising 5% of our worldwide workforce. The         
components of the restructuring charge are shown in the table below:            

Components of the Restructuring Charge
------------------------------------------

                                                        [Enlarge/Download Table]

                                                             U.S.    EUROPE   INDIA   TOTAL
                                                             -----   ------   -----   -----
                                                                 (DOLLARS IN MILLIONS)     
                                                                                           
Employee severance.......................................... $11.2    $4.6    $1.5    $17.3
Asset impairments...........................................     -     3.3       -      3.3
Other*......................................................   1.6      .3       -      1.9
                                                             -----    ----    ----    -----
Total restructuring charge.................................. $12.8    $8.2    $1.5    $22.5
                                                             =====    ====    ====    =====

---------------                                                                 

* Other costs primarily include outplacement costs.                             

  In November 2003, we announced workforce reductions of approximately 150
employees primarily at our headquarters in Wickliffe, Ohio, at our Deer Park and
Bayport, Texas manufacturing facilities and at our Hazelwood, England technical 
facility. This resulted in a restructuring charge primarily for employee        
severance costs in both the United States and England. The workforce reductions 
were completed prior to the end of 2003. The charge for Europe also included    
costs associated with the restructuring program announced in February 2003, for 
our Bromborough, England intermediate production and blending facility. We have 
eliminated some capacity at this facility and substantially completed workforce 
reductions of 45 positions. An asset impairment charge of $3.3 million was      
recorded at Bromborough for production units taken out of service. The charge   
for Europe also included some severance-related costs for the closing of a sales
office in Scandinavia. The charge for India pertains to a voluntary separation  
program of approximately 55 employees at our joint venture in India.            

The 2003 restructuring programs were undertaken to achieve a more     
competitive cost structure, primarily within the lubricant additives segment,   
and to help mitigate cost pressures from higher energy, pension, health care and
insurance expenses. Annual savings are projected to be approximately $20.0      
million, of which approximately $5.0 million were realized in 2003.             

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Excluding the effects of currency and acquisitions, we estimate 2004  
operating expenses, which consist of manufacturing, selling, administrative and 
technology expenses, will be approximately the same as 2003.                    

Analysis of Other Items and Net Income
------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                   EXCLUDING   
                                                                                 ACQUISITIONS  
                                                                                ---------------
                                                                $        %        $        %   
                                             2002     2003    CHANGE   CHANGE   CHANGE   CHANGE
                                            ------   ------   ------   ------   ------   ------
                                                           (DOLLARS IN MILLIONS)               
                                                                                               
Other expense -- net....................... $ (5.4)  $ (1.6)  $ 3.8       *     $ 4.5       *  
Interest expense -- net....................  (16.6)   (21.3)   (4.7)      *      (4.7)      *  
Income before income taxes and cumulative                                                      
  effect of change in accounting                                                               
  principle................................  180.4    129.1   (51.3)    (28%)   (58.5)    (32%)
Provision for income taxes.................   54.1     38.3   (15.8)    (29%)   (17.9)    (33%)
Income before cumulative effect of change                                                      
  in accounting principle..................  126.3     90.8   (35.5)    (28%)   (40.6)    (32%)
Cumulative effect of change in accounting                                                      
  principle................................   (7.8)       -     7.8       *       7.8       *  
Net income................................. $118.5   $ 90.8   $(27.7)   (23%)   $(32.8)   (28%)

---------------                                                                 

* Calculation not meaningful                                                    

The favorable change in other income (expense) primarily was due to   
increased currency exchange translation gains.                                  

Interest income decreased $2.9 million in 2003 compared with 2002 as a
result of lower interest rates. Interest expense increased $1.8 million in 2003 
compared with 2002, due to the absence of the interest rate swap agreements that
we utilized in 2002. In 2002, we had swap agreements that reduced interest      
expense by approximately $4.2 million ($3.1 million impact from outstanding swap
and $1.1 million amortization of deferred gain). We terminated the interest rate
swap agreements in 2002 and recorded an unrecognized gain, which is being       
amortized as a reduction of interest expense through December 1, 2008.          
Amortization of the unrealized gain reduced interest expense in 2003 by         
approximately $2.7 million.                                                     

 During 2003, the United States dollar weakened against most currencies,
especially the euro. We believe the change in currency exchange rates in 2003,  
as compared with 2002 exchange rates, had a favorable effect on 2003 net income.

 We had an effective tax rate of 29.7% in 2003 as compared with 30.0% in
2002. The 2003 effective tax rate was lower than the United States federal and  
state statutory rate of 35%, primarily due to significant nontaxable translation
gains at foreign subsidiaries utilizing a United States dollar functional       
currency. The low effective tax rate in 2002 was due primarily to a             
non-recurring United States tax benefit resulting from the charitable           
contribution of technology, partially offset by nontaxable translation losses.  

 As a result of the factors described above, income per share before the
cumulative effect of a change in accounting principle was $1.76 in 2003 compared
with $2.45 in 2002. The restructuring charge reduced earnings in 2003 by $0.29  
per share.                                                                      

During the first half of 2002, we completed the impairment analysis   
required for SFAS No. 142, "Goodwill and Other Intangible Assets," which we     
adopted on January 1, 2002. There was no impairment in the specialty chemicals  
segment; however, for the lubricant additives segment, we recorded an impairment
of $7.8 million. The charge was recorded as a cumulative effect of a change in  
accounting principle as of January 1, 2002. There was no tax benefit associated 
with this charge.                                                               

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After adjustment for the cumulative effect of a change in accounting  
principle from the implementation of SFAS No. 142 in 2002, net income per share 
was $1.76 in 2003 compared with $2.30 for 2002.                                 

2002 COMPARED WITH 2001                                                         

We achieved higher revenues in 2002, primarily due to higher shipment 
volume resulting from the consolidation of Lubrizol India Private Limited and   
the favorable impact of acquisitions. Higher gross profit margins were realized 
in 2002 compared with 2001, driven by lower average raw material cost combined  
with lower unit manufacturing cost (manufacturing costs per metric ton sold) and
ongoing volume growth. The increased margin, elimination of goodwill            
amortization and a lower effective tax rate, partially offset by higher STAR    
(selling, testing, administrative and research) expenses, resulted in increased 
net income in 2002 compared with 2001.                                          

Beginning January 1, 2002, we consolidated all of the revenues, costs,
expenses, assets and liabilities of our joint venture, Lubrizol India Private   
Limited, with an offset for our partner's minority interest. Before 2002, we    
recorded our ownership in the joint venture as equity earnings, which was       
included in other income on the income statement. The change from equity to     
consolidation accounting resulted from an amendment to the joint venture        
agreement with our partner, Indian Oil Corporation Limited, which gave us       
operating control of Lubrizol India. We continue to own 50% of the voting       
shares. This change had no effect on our net income, but it did affect the line 
item comparisons for the income statement, the balance sheet and the statement  
of cash flows.                                                                  

Analysis of Revenues
----------------------

                                                        [Enlarge/Download Table]

                                                                                  EXCLUDING   
                                                                                ACQUISITIONS  
                                                                                 & LZ INDIA   
                                                                               ---------------
                                                               $        %        $        %   
                                          2001      2002     CHANGE   CHANGE   CHANGE   CHANGE
                                        --------  --------   ------   ------   ------   ------
                                                        (DOLLARS IN MILLIONS)                 
                                                                                              
Net sales.............................. $1,839.2  $1,980.3   $141.1      8%    $33.1       2% 
Royalties and other revenues...........      5.4       3.6     (1.8)   (34%)     0.7      12% 
                                        --------  --------   ------            -----          
Total revenues......................... $1,844.6  $1,983.9   $139.3      8%    $33.8       2% 
                                        ========  ========   ======            =====          

The increase in 2002 revenues was due to 12% higher shipment volume,  
partially offset by a 4% decline in average selling price. The consolidation of 
Lubrizol India contributed 3% to the higher volume, acquisitions in our         
specialty chemicals segment added 5.5% to volume and increases in ongoing       
shipment levels provided the remaining 3.5% of the total shipment volume        
increase.                                                                       

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     Changes in our shipment volume vary by geographic area. The following table
shows our 2002 shipment volume by geographic zone as well as the changes        
compared with 2001.                                                             

Analysis of Volume
--------------------

                                                        [Enlarge/Download Table]

                                                                                EXCLUDING  
                                                                               ACQUISITIONS
                                                                                & LZ INDIA 
                                                              2002             ------------
                                                             VOLUME  % CHANGE    % CHANGE  
                                                             ------  --------  ------------
                                                                                           
North America...............................................   45%      20%          7%    
Europe......................................................   29%       6%          6%    
Asia-Pacific/Middle East....................................   20%       9%         (6%)   
Latin America...............................................    6%      (3%)        (3%)   
                                                              ---                          
Total.......................................................  100%      12%        3.5%    
                                                              ===                          

    The increases in North America and Europe were due to acquisitions and the
strengthening of our business with major lubricant additives customer accounts  
for engine oils and specialty driveline additives, along with the strengthening 
of our lubricant additives markets, including coatings and inks and             
metalworking. The decrease in Asia-Pacific volume, excluding the consolidation  
of Lubrizol India, primarily was the result of business lost in Japan in        
mid-2001 and the weak business environment and competitive intensity in Asia.   
Latin America, our smallest zone, experienced volume declines as the result of  
economic conditions, timing of orders and some business losses after the first  
quarter of 2001 due to price increases.                                         

     The decrease in average selling price in 2002 compared with 2001 was due to
the combination of lower prices and product mix changes. Currency had a         
negligible effect on average selling price for the year. Approximately half of  
the decline in average selling price was the result of the Chemron acquisition  
made in April 2002, due to its lower-priced product mix.                        

 The decrease in royalties and other revenues in 2002 compared with 2001
primarily was due to the consolidation of Lubrizol India, effective January 1,  
2002, as royalties from India were eliminated when reporting consolidated       
results.                                                                        

Analysis of Costs and Expenses
--------------------------------

                                                        [Enlarge/Download Table]

                                                                                  EXCLUDING   
                                                                                ACQUISITIONS  
                                                                                 & LZ INDIA   
                                                                               ---------------
                                                               $        %        $        %   
                                          2001      2002     CHANGE   CHANGE   CHANGE   CHANGE
                                        --------  --------   ------   ------   ------   ------
                                                        (DOLLARS IN MILLIONS)                 
                                                                                              
Cost of sales.......................... $1,335.5  $1,416.3   $ 80.8      6%    $(4.3)     0%  
Selling and administrative expenses....    177.4     196.9     19.5     11%     15.0      8%  
Research, testing and development                                                             
  expenses.............................    158.5     168.3      9.8      6%      8.9      6%  
                                        --------  --------   ------            -----          
Total costs and expenses............... $1,671.4  $1,781.5   $110.1      7%    $19.6      1%  
                                        ========  ========   ======            =====          

  The 2002 increase in cost of sales was due to higher shipment levels and
higher manufacturing expenses, partially offset by a decline in average raw     
material cost. Average raw material cost decreased 6% in 2002 compared with     
2001, due to both lower raw material prices and product mix changes.            

    Although average raw material cost decreased in 2002 compared with 2001 on
an annual basis, raw material prices started to increase in the second half of  
2002. Sequentially in 2002, average raw material cost increased 1% in the third 
quarter compared with the second quarter, and 4% in the fourth quarter compared 

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with the third quarter, due to the combination of higher raw material prices and
higher-cost product mix. There were five price increases in base oil, our       
highest-volume raw material, between the end of April 2002 and the middle of    
October 2002, along with increases in other raw material prices. To recover the 
rapidly rising raw material prices that were affecting our business, we         
implemented an additive price increase in our lubricant additives segment in    
December 2002 for the North America zone and in January 2003 for the rest of the
world.                                                                          

   Manufacturing expenses, which are included in cost of sales, increased 9%
(2% excluding acquisitions and the consolidation of Lubrizol India), in 2002    
compared with 2001. The increase in manufacturing expenses was due to higher    
volume and higher compensation costs, consisting of variable pay and salary and 
employee benefit expenses, partially offset by lower utility expenses. Even     
though total manufacturing expenses increased, unit manufacturing cost was down 
3% in 2002 compared with the prior year, primarily due to higher throughput and 
productivity improvements.                                                      

     Gross profit (net sales less cost of sales) increased $60.3 million, or 12%
($37.4 million, or 7%, excluding acquisitions and the consolidation of Lubrizol 
India), in 2002 compared with 2001. The increase primarily was the result of    
higher volume and lower raw material costs, partially offset by higher          
manufacturing expenses and lower selling prices. Our gross profit percentage    
(gross profit divided by net sales) increased to 28.5% in 2002 compared with    
27.4% in 2001, due to the reasons explained previously. Excluding the impact of 
the consolidation of Lubrizol India and acquisitions, our gross profit          
percentage was 28.9% in 2002.                                                   

The 2002 increase in selling and administrative expenses, excluding   
acquisitions, primarily was due to higher compensation costs for existing       
businesses and incremental staffing and other costs associated with our strategy
to expand into new markets. In addition, we recorded a $2.0 million charge for a
contract claim related to an employee offsite personal injury.                  

   The 2002 increase in research, testing and development expenses primarily
was a result of four engine oil programs. The first program pertained to the    
United States passenger car motor oil technical standard, GF-4, which is slated 
for commercial introduction at the end of 2004. The second program pertained to 
the European program for reduced emission targets for both diesel and passenger 
car applications (Euro IV). Commercial introduction was originally anticipated  
for 2005, when Euro IV becomes mandatory. However, plans to offer road tax      
incentives in Europe pushed commercial introduction to mid-2003. This resulted  
in increased technology and commercial product development expense in the fourth
quarter of 2002 that had not been anticipated. The third program pertained to   
the introduction in early 2003 of new European passenger car standards, which   
significantly increased performance requirements. The change in the baseline    
performance required by OEMs for their specifications resulted in the           
redevelopment of several products. The fourth program pertained to the current  
United States diesel engine oil specification, PC-9, which was formally         
introduced in the third quarter of 2002.                                        

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Analysis of Other Items and Net Income
------------------------------------------

                                                        [Enlarge/Download Table]

                                                                                   EXCLUDING   
                                                                                 ACQUISITIONS  
                                                                                ---------------
                                                                $        %        $        %   
                                             2001     2002    CHANGE   CHANGE   CHANGE   CHANGE
                                            ------   ------   ------   ------   ------   ------
                                                           (DOLLARS IN MILLIONS)               
                                                                                               
Other expense -- net....................... $(15.1)  $ (5.4)  $ 9.7       *     $12.3       *  
Interest expense -- net....................  (18.3)   (16.6)    1.7       *       1.5       *  
Income before income taxes and cumulative                                                      
  effect of change in accounting                                                               
  principle................................  139.9    180.4    40.5      29%     28.0      20% 
Provision for income taxes.................   45.8     54.1     8.3      18%     (1.0)     (2%)
Income before cumulative effect of change                                                      
  in accounting principle..................   94.1    126.3    32.2      34%     29.0      31% 
Cumulative effect of change in accounting                                                      
  principle................................      -     (7.8)   (7.8)      *      (7.8)      *  
Net income................................. $ 94.1   $118.5   $24.4      26%    $21.2      23% 

---------------                                                                 

* Calculation not meaningful                                                    

    Beginning in 2002, the other income (expense) line item no longer included
amortization of goodwill, due to a change in accounting standards, or equity    
income from Lubrizol India. Goodwill amortization expense was approximately     
$11.0 million in 2001. Equity income for Lubrizol India was $2.9 million in     
2001. The remaining variance primarily was due to lower currency exchange       
translation losses.                                                             

     Interest income was about even in 2002 compared with 2001. Interest expense
decreased $1.6 million in 2002 compared with 2001, partially due to lower       
interest rates. In addition, we terminated our interest rate swap agreements,   
which had converted the fixed interest rate on $100.0 million of 5.875%         
debentures to a variable rate. In terminating the swaps, we received cash of    
$18.1 million and recorded a $17.3 million unrealized gain, which is being      
amortized as a reduction of interest expense through December 1, 2008, the due  
date of the underlying debt. Amortization of the unrealized gain reduced        
interest expense in 2002 by $1.1 million.                                       

 During 2002, the United States dollar weakened against most currencies,
especially the euro and the yen, and we believe the change in currency exchange 
rates had a slightly favorable effect on net income as compared with the impact 
during 2001.                                                                    

We had an effective tax rate of 30.0% in 2002, compared with 32.7% for
2001, which increased 2002 earnings by $.09 per share. The lower effective tax  
rate in 2002 was primarily due to the United States tax benefit resulting from a
charitable contribution of technology made in 2002 that did not occur in 2001,  
along with the elimination of goodwill amortization pursuant to the new         
accounting standard.                                                            

 As a result of the factors described above, income per share before the
cumulative effect of a change in accounting principle was $2.45 in 2002 compared
with $1.84 in 2001. After adjusting net income for the cumulative effect of a   
change in accounting principle due to the implementation of SFAS No. 142, net   
income per share was $2.30 in 2002 compared with $1.84 for 2001.                

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SEGMENT ANALYSIS                                                                

Operating Results by Segment
------------------------------- 

                                                        [Enlarge/Download Table]

                                                          2001       2002       2003  
                                                        --------   --------   --------
                                                            (DOLLARS IN MILLIONS)     
                                                                                      
Revenues:                                                                             
  Lubricant additives.................................. $1,726.7   $1,798.2   $1,796.7
  Specialty chemicals..................................    117.9      185.7      255.4
                                                        --------   --------   --------
     Total............................................. $1,844.6   $1,983.9   $2,052.1
                                                        ========   ========   ========
Gross profit:                                                                         
  Lubricant additives.................................. $  470.1   $  515.0   $  481.2
  Specialty chemicals..................................     33.7       49.0       60.1
                                                        --------   --------   --------
     Total............................................. $  503.8   $  564.0   $  541.3
                                                        ========   ========   ========
Segment operating income (loss):                                                      
  Lubricant additives.................................. $  205.1   $  235.2   $  201.5
  Specialty chemicals..................................    (11.3)       0.4        0.9
                                                        --------   --------   --------
     Total............................................. $  193.8   $  235.6   $  202.4
                                                        ========   ========   ========

LUBRICANT ADDITIVES SEGMENT                                                 

   Segment revenues decreased $1.5 million in 2003 compared with 2002 due to
an 8% decrease in shipment volume partially offset by a 7% increase in average  
selling price. The increase in average selling price in 2003 primarily was due  
to favorable currency effects of 4.5% and the remainder was due to higher prices
and favorable product mix.                                                      

     Lubricant additives implemented a price increase in December 2002 for North
America and in January 2003 for the rest of the world. A second price increase  
that was structured as a surcharge was implemented in late March 2003 for North 
America and in late April for Asia and Latin America as well as for select      
products in Europe. This surcharge was designed to address the continuing rise  
in raw material prices and natural gas-fired utility costs that had occurred    
since the last price increase in the fourth quarter of 2002. In February 2004,  
we announced an additional price increase, effective March 2004, for products   
sourced from North America and effective April 2004, for products sourced from  
Latin America, in response to recent increases in the prices of raw materials   
and energy.                                                                     

     The following table shows the changes in shipment volume by geographic zone
in 2003 compared with 2002:                                                     

Analysis of Volume -- 2003 vs. 2002 
--------------------------------------

                                                                [Download Table]

                                                               % CHANGE  
                                                              -----------
                                                                         
North America...............................................      (11)%  
Europe......................................................       (9)%  
Asia-Pacific/Middle East....................................       (6)%  
Latin America...............................................       (2)%  
Total.......................................................       (8)%  

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    Approximately half of the total shipment volume decline in 2003 was due to
business losses associated with a major international customer. Lower unit sales
of viscosity modifiers products in 2003 also contributed to the decline,        
principally caused by a shift from liquid polymers to solid polymers. Generally,
solids are one-tenth the volume of liquids. Excluding this shift in our         
viscosity modifier product line, total shipment volume decreased 7% in 2003. The
shift had no impact on gross profit dollars. All geographic zones were affected 
by the loss of business with this customer and the viscosity modifier shift,    
though the effects were mostly seen in North America and Europe. The declines in
North America for 2003 also were due to the conversion of some products in our  
specialty driveline product line to more concentrated formulations. In addition,
weak worldwide demand for lubricants contributed to the declines in the North   
America and Europe zones in 2003. The decrease in Asia-Pacific/Middle East      
volume primarily was due to the weak business environment stemming from economic
and political conditions in some parts of this region.                          

Segment gross profit (net sales less cost of sales) decreased $33.8   
million, or 7%, in 2003 compared with 2002. The decrease primarily was due to   
lower shipment volume, higher average raw material cost and higher manufacturing
expenses, partially offset by higher average selling price and favorable net    
currency effects. For these reasons, the gross profit percentage for this       
segment decreased to 26.8% in 2003, compared with 28.7% in 2002.                

Direct selling, testing, administrative and research (STAR) expense   
decreased $2.9 million, or 1%, in 2003 compared with 2002, primarily due to     
lower technical spending at outside test laboratories. Segment operating income 
(revenues less expenses attributable to the product lines included within each  
segment) decreased $33.7 million, or 14%, in 2003 compared with 2002 as a result
of lower gross profit and lower equity earnings from our joint venture in Saudi 
Arabia, partially offset by lower technology expenses.                          

 In 2002, segment revenues increased $71.5 million, or 4%, compared with
2001, with 6% higher shipment volume. Excluding the impact of the consolidation 
of Lubrizol India, revenues increased $20.9 million, or 1%, due to a 3% increase
in ongoing shipment volume, partially offset by a 2% decrease in average selling
price. The combination of lower prices and product mix effects reduced average  
selling price by 3%, but partially was offset by slightly favorable currency    
effects, due to the weakening of the dollar against the euro and the yen.       

     The following table shows the changes in shipment volume by geographic zone
in 2002 compared with 2001:                                                     

Analysis of Volume -- 2002 vs. 2001 
--------------------------------------

                                                        [Enlarge/Download Table]

                                                                      EXCLUDING LZ INDIA
                                                          % CHANGE         % CHANGE     
                                                         -----------  ------------------
                                                                                        
North America...........................................      7%               7%       
Europe..................................................      6%               6%       
Asia-Pacific/Middle East................................      9%              (6)%      
Latin America...........................................     (5)%             (5)%      
Total...................................................      6%               3%       

  The 2002 shipment volume increases in North America and Europe primarily
were due to the strengthening of our engine additives product line and, to a    
lesser extent, our specialty driveline product line. In North America, this     
increase was with major international accounts, while in Europe it was across   
our customer base. Excluding Lubrizol India, the decline in Asia-Pacific volume 
primarily was as a result of lost engine oil business in Japan in mid-2001 and  
the weak business environment and competitive intensity in Asia. Latin America, 
our smallest zone, experienced volume declines as the result of economic        
conditions, timing of orders and some business losses after the first quarter of
2001 due to price increases.                                                    

     Segment gross profit increased $44.9 million, or 10%, in 2002 compared with
2001. Excluding the impact of the consolidation of Lubrizol India, gross profit 
increased by $31.8 million, or 7%. The increase                                 

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was due to 3% higher shipment volume and lower average raw material cost,       
partially offset by increased manufacturing expenses and lower average selling  
price. The gross profit percentage for this segment was 28.7% in 2002 compared  
with 27.3% in 2001.                                                             

   STAR expenses increased $20.4 million, or 8%, in 2002 compared with 2001,
primarily due to higher technical expense and marketing expenses. Amortization  
expenses decreased by $7.8 million in 2002 compared with 2001, as 2002 expense  
no longer included the amortization of goodwill due to a change in accounting   
standards.                                                                      

    Segment operating income increased $30.1 million, or 15%, in 2002 compared
with 2001. Excluding the impact of the consolidation of Lubrizol India, segment 
operating income increased $22.5 million. The increase primarily was due to     
higher gross profit and lower amortization expense, partially offset by higher  
direct technology and marketing expenses.                                       

SPECIALTY CHEMICALS SEGMENT                                                 

  Segment revenues for specialty chemicals increased $69.7 million, or 38%
($26.7 million, or 14%, excluding acquisitions), in 2003 compared with 2002. The
acquisition-related increase primarily was due to the 2002 acquisitions of Dock 
Resins Corporation and Chemron Corporation and the 2003 acquisition of a        
personal care ingredients business. The 2003 increase in segment revenues,      
excluding acquisitions, was due to a 9% increase in shipment volume along with  
4% favorable currency impact and 1% stronger price and product mix.             

     The following table shows the changes in shipment volume by geographic zone
in 2003 compared with 2002:                                                     

Analysis of Volume -- 2003 vs. 2002 
----------------------------------- 

                                                        [Enlarge/Download Table]

                                                                   EXCLUDING ACQUISITIONS
                                                       % CHANGE           % CHANGE       
                                                      -----------  ----------------------
                                                                                         
North America........................................     36%                 7%         
Europe...............................................     16%                14%         
Asia-Pacific/Middle East.............................     31%                26%         
Latin America........................................     16%                16%         
Total................................................     31%                 9%         

     The 2003 shipment volume increase in North America primarily was due to the
2002 acquisitions of Chemron and Dock Resins and the 2003 acquisition of a      
personal care ingredients business. Excluding acquisitions, the increase in     
North America in 2003 was due to market share gains in our consumer specialties 
product line along with increases in our performance coatings product line from 
the introduction of new products. The increase in Europe in 2003 was primarily  
due to market share gains and new applications in our specialty monomers        
products. The increase in 2003 for the Asia-Pacific/Middle East zone was spread 
across many product lines and is due to an increasing focus in this region      
leading to new business in most of our businesses. The increase in Latin America
in 2003 was due to a shift from North America to Latin America of our specialty 
emulsifiers products with some of our existing customers, along with some       
business gains of our coatings and inks, defoamer and specialty monomers        
products.                                                                       

Segment gross profit increased $11.1 million, or 23% (decreased $2.0  
million, or 4%, excluding acquisitions), in 2003 compared with 2002. Excluding  
acquisitions, the decrease in segment gross profit in 2003 was due to higher    
manufacturing expenses and average raw material cost partially offset by higher 
shipment volume and higher average selling price due to favorable currency      
effects. The increase in manufacturing expenses was due to higher shipment      
volume, $2.4 million in expenses associated with the integration of a           
multi-purpose chemical production facility in Spartanburg, South Carolina that  
was purchased                                                                   

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in the second quarter of 2003, and higher manufacturing overhead to some        
specialty chemicals products produced at lubricant additives facilities as a    
result of unusually low lubricant additives volumes in 2003. The gross profit   
percentage for this segment was 23.6% in 2003, compared with 26.4% in 2002. The 
decrease in the gross profit percentage in 2003 was due to higher raw material  
costs and increased manufacturing expenses.                                     

     Specialty chemical segment operating income increased $0.5 million, or 125%
(decreased $6.7 million excluding acquisitions), in 2003 compared with 2002.    
Excluding acquisitions, the decrease primarily was due to lower gross profit,   
higher direct technology and selling expenses and higher amortization expenses  
of intangibles that resulted from acquisitions.                                 

   In 2002, segment revenues increased $67.7 million, or 57% ($12.9 million,
or 11%, excluding acquisitions), compared with 2001. The acquisitions-related   
increase primarily was due to the acquisitions of Chemron and Kabo Unlimited,   
Inc. The 2002 increase in segment revenues, excluding acquisitions, was due to a
15% increase in shipment volume as a result of strengthening markets compared   
with 2001, partially offset by a 4% decrease in average selling price.          

     The following table shows the changes in shipment volume by geographic zone
in 2002 compared with 2001:                                                     

Analysis of Volume -- 2002 vs. 2001 
----------------------------------- 

                                                        [Enlarge/Download Table]

                                                                   EXCLUDING ACQUISITIONS
                                                       % CHANGE           % CHANGE       
                                                      -----------  ----------------------
                                                                                         
North America........................................     218%               14%         
Europe...............................................       2%                2%         
Asia-Pacific/Middle East.............................     242%              242%         
Latin America........................................      19%               19%         
Total................................................     123%               15%         

The increase in North America shipment volume primarily was due to the
acquisitions of Chemron and Kabo. Excluding acquisitions, the ongoing volume    
growth in North America was due to strengthening markets, particularly in our   
performance coatings product line, as well as the introduction of new products  
and some business gains in this area. The increase in the Asia-Pacific zone     
primarily was due to new business gains across all of our businesses. The       
increase in the Latin America zone was due to market share gains for our        
coatings and inks and specialty emulsifiers products.                           

     Segment gross profit increased $15.3 million, or 45%, in 2002 compared with
2001. Excluding acquisitions, gross profit increased $5.5 million, or 16%. The  
increases primarily were due to higher shipment volume and lower average raw    
material cost. The gross profit percentage for this segment was 26.4% in 2002,  
compared with 28.6% in 2001. The decrease in the gross profit percentage        
primarily was due to the impact of the Chemron acquisition, due to its          
lower-priced product mix.                                                       

   Segment operating income in 2002 was $0.4 million compared with a segment
operating loss of $11.3 million in 2001. The increase was due to higher gross   
profit, the impact of acquisitions and the accounting change for goodwill       
amortization. The elimination of goodwill amortization, effective January 1,    
2002, benefited this segment by approximately $2.1 million in 2002.             

RETURN ON AVERAGE SHAREHOLDERS' EQUITY                                          

     Return on average shareholders' equity was 10% in 2003, 14% in 2002 and 12%
in 2001 (10%, 15% and 12%, respectively, excluding the cumulative effect of the 
change in accounting principle in 2002). The return on average shareholders'    
equity is calculated as current year net income divided by the average of       

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year-end shareholders' equity for the current and prior year. The restructuring 
charge in 2003 lowered the return on average shareholders' equity by            
approximately 200 basis points.                                                 

WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES                                

The following table summarizes our financial performance indicators of
liquidity:                                                                      

Selected Measures of Liquidity and Capital Resources
------------------------------------------------------- 

                                                        [Enlarge/Download Table]

                                                              DECEMBER 31,               
                                                             ---------------   JUNE 30,  
                                                              2002     2003      2004    
                                                             ------   ------   --------- 
                                                                                         
Cash and short-term investments (millions of dollars)....... $266.4   $258.7   $   227.3 
Working capital (millions of dollars)....................... $602.0   $638.4   $(1,123.5)
Current ratio...............................................    3.0      3.1         0.6 
Debt as a % of capitalization...............................   31.6%    29.0%       71.0%
Average number of days sales in accounts receivable.........   52.7     54.1        53.4 
Average number of days sales in inventory...................   80.6     89.4        88.0 

The following table summarizes the major components of cash flow:     

Summary of Cash Flows 
------------------------- 

                                                        [Enlarge/Download Table]

                                                                                 SIX-MONTH      
                                                                               PERIODS ENDED    
                                                 YEARS ENDED DECEMBER 31,         JUNE 30,      
                                                --------------------------   ------------------ 
                                                 2001     2002      2003      2003      2004    
                                                ------   -------   -------   ------   --------- 
                                                             (DOLLARS IN MILLIONS)              
                                                                                                
Cash provided from/(used for):                                                                  
  Operating activities......................... $195.8   $ 244.9   $ 194.8   $ 44.5   $    96.2 
  Investing activities.........................  (81.6)   (148.5)   (155.9)   (36.5)   (1,002.9)
  Financing activities.........................  (68.7)    (30.4)    (59.5)   (29.0)      868.9 
Effect of exchange-rate changes on cash........   (2.4)     11.4      12.9      4.5         6.4 
                                                ------   -------   -------   ------   --------- 
Net increase/(decrease) in cash and short-term                                                  
  investments.................................. $ 43.1   $  77.4   $  (7.7)  $(16.5)  $   (31.4)
                                                ======   =======   =======   ======   ========= 

OPERATING ACTIVITIES                                                        

  The increase in cash provided from operating activities in the first six
months of 2004 compared with the same period in the prior year primarily was due
to an increase in earnings after adjusting for non-cash items, specifically the 
$35.0 million write-off of acquired IPR&D projects from the Noveon International
acquisition. We also had a working capital build-up in accounts receivable,     
which used cash of $77.0 million. Our receivables increased by $265.1 million   
from the prior year-end, primarily due to the Noveon International and          
hyperdispersants acquisitions. Days sales in receivables averaged 53.4 days in  
the first six months of 2004, which approximates our target for 2004 of 53.5    
days. Days sales in inventory averaged 88.0 days for the first six months of    
2004 compared with our 2004 target of 90 days.                                  

     Cash provided from operating activities in 2003 decreased $50.1 million, or
20%, compared with 2002. The decrease primarily was due to lower earnings and an
unfavorable change in working capital items of $9.0 million in 2003 compared    
with a favorable change of $13.9 million in working capital items in 2002. Lower
receivable and inventory levels partially offset the increase in the other      
working capital items, when currency effects and acquisitions are considered.   

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     We manage our levels of inventories and accounts receivable on the basis of
average days sales in inventory and average days sales in receivables. Our      
target for days sales in inventory is established with the goal of minimizing   
our investment in inventories while at the same time ensuring adequate supply   
for our customers. Our 2003 target for days sales in inventory was 87.0 days.   
The actual 2003 average days sales in inventory of 89.4 exceeded our target     
because we built strategic stock in mid-year to secure supplies of certain key  
materials and because shipment volume was lower than anticipated, especially in 
the third quarter of 2003. The actual 2002 average days sales in inventory of   
80.6 days was below the 2002 target level of 85.0 days because of strong demand 
and high plant utilization in 2002. Our target for days sales in accounts       
receivable is established primarily as a function of the average credit terms   
offered to our customers. Our average days sales in receivables of 54.1 days was
approximately equal to our target of 53.5 days in 2003.                         

 We reduced accounts payable and accrued liabilities by $26.8 million in
2003 compared with a buildup of $2.6 million in 2002, due to lower variable pay 
accrual and the timing of procurement and payment to vendors. We have not       
changed our payment terms to suppliers.                                         

INVESTING ACTIVITIES                                                        

Our capital expenditures in the first six months of 2004 were $42.2   
million, as compared with $36.8 million for the same period in 2003. In 2004, we
estimate capital expenditures will be in the range of $135.0 million to $140.0  
million, compared with $88.5 million in 2003. The 2004 estimate includes        
approximately $40.0 million for the newly acquired Noveon International         
business.                                                                       

     Our capital expenditures in 2003 were $88.5 million compared with $65.3 and
$66.3 million in 2002 and 2001, respectively. We manage our capital investments 
at the authorization level and the expenditures occur over the period required  
to complete the individual projects. We authorized projects totaling $105.4     
million in 2003, $97.2 million in 2002 and $87.8 million in 2001. Significant   
capital expenditures in 2003 included the purchase and integration of a         
multipurpose chemical production facility in Spartanburg, South Carolina, for   
$5.2 million, a number of projects at our Deer Park, Texas facility and expanded
production capabilities at our joint venture in China. In 2004, we are budgeting
our capital investment authorizations at approximately $95.0 million, which     
approximates our estimated annual depreciation expense. We also estimate capital
expenditures will approximate $95.0 million in 2004.                            

     In June 2004, we completed the Noveon International acquisition for cash of
$920.2 million plus transaction costs of $10.5 million less certain seller      
expenses of $32.9 million and less cash acquired of $103.0 million.             

In January 2004, we completed the acquisition of the hyperdispersants 
business of Avecia for cash totaling $133.0 million. This additives business is 
headquartered in Blackley, United Kingdom, and develops, manufactures and       
markets high-value additives that are based on polymeric dispersion technology  
and used in coatings and inks. These products enrich and strengthen color while 
reducing production costs and solvent emissions, and are marketed under the     
brand names Solsperse(R), Solplus(R) and Solthix(R). Historical annual revenues 
of this business are approximately $50.0 million. We funded the acquisition     
through E43.0 million borrowings ($55.0 million equivalent) under a 364-day     
credit facility, $5.0 million in yen borrowings and the remainder in cash. At   
December 31, 2003, we had a foreign currency forward contract of $125.0 million 
in order to fix the U.S. dollar price for this acquisition. In the first quarter
of 2004, we recorded a pre-tax gain of $6.4 million ($0.08 per share) upon the  
termination of this foreign currency forward contract.                          

   In 2003, we completed two acquisitions in the specialty chemicals segment
for cash totaling $68.6 million. In September 2003, we acquired a personal care 
ingredients business from Amerchol Corporation, a subsidiary of The Dow Chemical
Company. Products from this business are utilized in a wide variety of end-use  
applications, including skin care and hair conditioners. Products include methyl
glucoside derivatives, lanolin derivatives and Promulgen(TM) personal care      
ingredients. Historical annual revenues of this acquisition approximate $30.0   
million. In July 2003, we purchased silicone product lines from BASF with       
historical annual revenues of approximately $6.0 million, which expanded our    
foam control additives business                                                 

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to approximately $40.0 million in annual revenues. Silicones are used in the    
manufacture of sealants, caulks and waterproofing products.                     

    In 2002, we completed four acquisitions in the specialty chemicals segment
for cash of $86.7 million. In the first quarter, we purchased Kabo, which       
specializes in the development, manufacture and sale of antifoam and defoaming  
agents to the food, fermentation, mining and wastewater industries. Kabo's      
product lines expanded our defoamer business. In the second quarter, we         
purchased Chemron, which formulates, produces and supplies specialty surfactants
used in personal care products, industrial cleaners and a wide range of other   
consumer and industrial products. The acquisition extended our existing         
surfactants business into growth markets where we previously had not competed.  
In October 2002, we acquired Dock Resins, which develops, manufactures and sells
proprietary polymers including acrylic, methacrylic, alkyd and polyester resins 
to customers in the paint and coatings, printing ink, laminating, adhesives and 
sealants and grease markets. In October, we also acquired Brose Chemical        
Company, which has product lines that complement our integrated defoamer        
business that are now manufactured in our Kabo foam control facility. Annual    
2002 revenues from these acquisitions in the aggregate were approximately $85.0 
million.                                                                        

FINANCING ACTIVITIES                                                        

   The increase in cash provided from financing activities of $868.9 million
in the first six months of 2004 was due to borrowings of $1,797.0 million under 
our $2,450.0 million 364-day temporary bridge facility, the proceeds of which   
were used to fund the Noveon International acquisition and repay assumed Noveon 
International debt of $1,103.1 million.                                         

    Cash used in financing activities increased in 2003 primarily because cash
provided in financing activities in 2002 included proceeds of $18.1 million from
the termination of the interest rate swaps that did not recur in 2003. The      
remainder of the increase was due to a net decrease in borrowings of $6.8       
million and a $4.0 million reduction of cash received from exercise of stock    
options.                                                                        

 During the first half of 2001, we repurchased approximately 1.0 million
common shares for $30.0 million pursuant to our share repurchase program. We    
suspended this program indefinitely in the second quarter of 2001 in order to   
hold our financial resources for acquisitions.                                  

CAPITALIZATION AND CREDIT FACILITIES                                        

Our total debt to capitalization ratio at June 30, 2004 was 71.0%.    
Capitalization is shareholders' equity plus total debt.                         

After the announcement of the Noveon International acquisition, our   
long-term debt and commercial paper credit ratings were downgraded. The credit  
rating change eliminated our access to the commercial paper market. As a result,
we repaid our outstanding commercial paper and we terminated our existing       
floating-to-fixed rate interest rate swaps with a notional value of $50.0       
million effective April 29, 2004. The termination of the swaps resulted in a    
$2.9 million dollar pre-tax charge that was recognized in the second quarter of 
2004. In addition, we called and repaid the outstanding $18.4 million marine    
terminal refunding revenue bonds, at par, in the second quarter of 2004.        

Our ratio of current assets to current liabilities, excluding $1,797.1
million short-term debt that we expect to refinance, declined from 3.1 at       
December 31, 2003 to 1.9 at June 30, 2004, because of the Noveon International  
and hyperdispersants acquisitions.                                              

  At June 30, 2004, we had a $350.0 million revolving credit facility that
matures in July 2006, which allows us to borrow at or below the U.S. prime rate.
As of June 30, 2004, we had outstanding borrowings under this agreement of $75.0
million, the proceeds of which were used to fund the repayment of previously    
outstanding commercial paper and marine terminal bonds, and liabilities         
associated with the termination of various floating-to-fixed interest rate      
swaps.                                                                          

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    In May 2004, we obtained a 364-day credit facility of $2,450.0 million for
the purpose of financing the Noveon International acquisition. This temporary   
bridge facility enables us to borrow at or below the U.S. prime rate. In June   
2004, we borrowed $1,797.0 million under this facility to finance initially the 
Noveon International acquisition and repay a portion of the assumed Noveon      
International debt. In addition, in July 2004 we borrowed an additional $175.0  
million under this facility to repay the outstanding notes also assumed as part 
of the Noveon International acquisition.                                        

   Concurrently with this offering, we plan to implement a permanent capital
structure that will replace the temporary bridge facility. We expect the        
long-term financing to include approximately $426.2 million in new common equity
and $1,150.0 million aggregate principal amount of senior unsecured debt        
securities, with the remainder being financed through bank term loans. When this
permanent capital structure is in place, we estimate that our total debt to     
capitalization will be approximately 60%. We have amended our existing credit   
facility previously discussed to change the consolidated debt to consolidated   
EBITDA ratio (as defined in the existing credit facility) from 3.25:1 to 5.75:1 
until our permanent capital structure is in place.                              

In January 2004, we obtained a separate revolving credit facility that
enabled us to borrow up to E50.0 million for the purpose of financing European  
acquisitions. We borrowed E43.0 million under this facility in January 2004.    
This amount was repaid in June 2004 and the credit facility has been terminated.

     We entered into a new credit agreement on August 24, 2004 pursuant to which
we and our designated subsidiaries may borrow up to $500.0 million under a      
five-year unsecured revolving credit facility and $575.0 million under an       
unsecured amortizing term note. Each of our wholly owned direct and indirect    
domestic subsidiaries will unconditionally guarantee all of our obligations     
under the credit agreement. We will not make any draws on the revolving credit  
facility or the term note until the effective date of the facility, which is    
expected to occur concurrently with the closing of this offering. We expect to  
borrow the full amount under the term note on the closing date of this offering,
as described above. We do not expect to borrow under the revolving credit       
facility at that time.                                                          

CONTRACTUAL CASH OBLIGATIONS                                                

  The following table shows our contractual cash obligations (in millions)
under debt agreements, leases, non-cancelable purchase commitments and other    
long-term liabilities at June 30, 2004. Additional information on debt can be   
found in Note 5 to our consolidated financial statements for the year ended     
December 31, 2003.                                                              

                                                        [Enlarge/Download Table]

                                                           PAYMENTS DUE BY PERIOD              
                                              -------------------------------------------------
                                                         REMAINDER    2005 &    2007 &   2009 &
                                               TOTAL      OF 2004      2006      2008    AFTER 
                                              --------   ---------   --------   ------   ------
                                                                                               
Total debt................................... $2,380.3    $191.1     $1,876.8   $212.4   $100.0
Operating leases.............................     76.3      19.4         26.3     13.4     17.2
Non-cancelable purchase commitments..........    252.7     143.2         60.3     46.2      3.0
Other long-term liabilities..................     41.6       2.2         15.0      7.7     16.7
                                              --------    ------     --------   ------   ------
Total contractual cash obligations........... $2,750.9    $355.9     $1,978.4   $279.7   $136.9
                                              ========    ======     ========   ======   ======

Non-cancelable purchase commitments primarily include raw materials   
purchased under take or pay contracts, drumming, warehousing and service        
contracts, terminal agreements and toll processing arrangements. Other long-term
liabilities disclosed in the table represent long-term liabilities reported in  
our consolidated balance sheet at June 30, 2004, under "other noncurrent        
liabilities," excluding pension, postretirement and other non-contractual       
liabilities. Total debt includes both the current and long-term portion of debt 
as reported in Note 5 to our consolidated financial statements for the year     
ended December 31, 2003. While we intend to refinance the temporary bridge      
facility in 2004, the temporary bridge facility is not due and payable until May
2005.                                                                           

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We expect to make employer contributions for pension benefits in 2004 
consisting of $10.5 million to the United States qualified plans including      
Noveon International, $2.5 million to the United States non-qualified plan and a
range of $5.0 million to $6.0 million for the United Kingdom plan. In addition, 
we expect non-pension postretirement benefit payments in the United States to be
approximately $4.2 million in 2004.                                             

     We had $2,380.3 million of debt outstanding at June 30, 2004, most of which
originated from our acquisition of Noveon International, including bridge loan  
financing of $1,797.0 million, which is due in May 2005. As a result, our total 
debt as a percent of capitalization has increased from 29% at December 31, 2003 
to 71% at June 30, 2004. We will also incur increased interest expense. We      
intend to implement a permanent capital structure in the near-term that will    
replace the temporary bridge facility and reduce our interest cost. We expect   
the permanent capital structure will include approximately $426.2 million in new
common equity. Our debt level will require us to dedicate a significant portion 
of our cash flow to make interest and principal payments, thereby reducing the  
availability of our cash flow for acquisitions or other purposes. Nevertheless, 
we believe our future operating cash flows will be sufficient to cover our debt 
repayments and other obligations and that we have untapped borrowing capacity   
that can provide us with additional financial resources.                        

CRITICAL ACCOUNTING POLICIES                                                    

The determination and application of our accounting policies is an    
important process that has developed as our business activities have evolved and
as the accounting rules have developed. Accounting rules generally do not allow 
a selection among alternatives, but involve an implementation and interpretation
of existing rules and the use of judgment to the specific set of circumstances  
existing in our business. We believe the proper implementation and consistent   
application of the accounting pronouncements are critical. However, not all     
situations are specifically addressed in the accounting rules and we use our    
best judgment to adopt a policy for accounting for those situations not         
addressed. We accomplish this by analyzing similar situations and the accounting
guidance governing them, and often consult with our independent auditors about  
the appropriate interpretation and application of these policies.               

Accounting policies for which our subjective judgment is particularly 
important include estimating valuation reserves and contingencies, determining  
the net periodic pension cost and postretirement benefit cost and accounting for
business combinations, goodwill impairment and debt issuance costs. To the      
extent actual experience differs from our assumptions and estimates, we may have
to increase or decrease these reserves and contingencies and earnings could be  
affected.                                                                       

ACCOUNTING FOR RESERVES AND CONTINGENCIES                                   

     Our accounting policies for reserves and contingencies cover a wide variety
of business activities, including reserves for potentially uncollectible        
receivables, slow-moving or obsolete inventory, legal and environmental         
exposures, and tax exposures. We accrue these reserves when our assessments     
indicate that it is probable that a liability has been incurred or an asset will
not be recovered and an amount can be reasonably estimated. We review these     
estimates quarterly based on currently available information. Actual results may
differ from our estimates and our estimates may be revised upward or downward,  
depending upon the outcome or changed expectations based on the facts           
surrounding each exposure. We discuss annually with the audit committee of our  
board of directors our reserves and contingencies, as well as our policies and  
processes for evaluating them.                                                  

DETERMINATION OF NET PERIODIC PENSION COST                                  

  Each year we review with our actuaries the actuarial assumptions used in
the determination of United States net periodic pension cost, as prescribed by  
SFAS No. 87, "Employers Accounting for Pensions." The determination of net      
periodic pension cost is based upon a number of actuarial assumptions, including
the                                                                             

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expected return on plan assets, the discount rate for determining the funded    
status, and the rate of compensation increase. We also annually review our      
international pension plan assumptions by country with the applicable plan      
actuary and appropriately adjust the assumptions. Additionally, the assumptions 
for each of our pension plans are reviewed with the audit committee of our board
of directors. Our net periodic pension cost for all pension plans was $14.1     
million in 2003, $8.4 million in 2002 and $6.2 million in 2001. In 2003, our    
United States pension expense represented approximately 60% of the consolidated 
total pension expense.                                                          

 Our assumption for the expected return on plan assets is based upon our
long-term experience and return targets for specific investment classes. During 
2003, we maintained our assumption for the United States plans of 9% because we 
believe that it represents a reasonable return that can be achieved over the    
long term using our current asset allocation. We did not substantially change   
our investment philosophy or investment mix of the asset portfolio in the United
States plans. For the Lubrizol plans at December 31, 2003, a change in the rate 
of return of 100 basis points would have the following effects on the net       
periodic pension cost:                                                          

Increase (Decrease) in Net Periodic Pension Cost from Change in Rate of Return
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                                100 BASIS POINT   
                                                             ---------------------
                                                             INCREASE    DECREASE 
                                                             ---------   ---------
                                                             (DOLLARS IN MILLIONS)
                                                                                  
United States pension plans.................................   $(2.0)      $2.0   
International pension plans.................................    (1.2)       1.2   
                                                               -----       ----   
All pension plans...........................................   $(3.2)      $3.2   
                                                               =====       ====   

     The selection of a discount rate for pension plans is required to determine
future pension obligations and represents our estimate of the available cost in 
the market place of settling all pension obligations through annuity purchases. 
We determine the discount rate based upon current market indicators, including  
rates of return on AA-rated corporate bonds or on long-term United States       
Treasury obligations. We lowered the 2003 discount rate assumption for our      
United States pension plans to 6.25% from 6.75% used in 2002. On a worldwide    
basis, the 2003 weighted average discount rate was lowered to 5.88% from 6.34%  
used in 2002. For the Lubrizol plans at December 31, 2003, a change in the      
discount rate of 100 basis points would have the following effects on the       
periodic pension cost:                                                          

Increase (Decrease) in Net Periodic Pension Cost from Change in Discount Rate 
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                                100 BASIS POINT   
                                                             ---------------------
                                                             INCREASE    DECREASE 
                                                             ---------   ---------
                                                             (DOLLARS IN MILLIONS)
                                                                                  
United States pension plans.................................   $(2.1)      $4.3   
International pension plans.................................    (2.2)       2.5   
                                                               -----       ----   
All pension plans...........................................   $(4.3)      $6.8   
                                                               =====       ====   

    The value of our United States plan assets increased in 2003 and the value
of the assets exceeds the accumulated benefit obligation liability by           
approximately $19.0 million at the end of the year. The higher investment       
returns in 2003 have increased the funded level of our United States plans. The 
accumulated benefit obligation for all pension plans worldwide exceeds the value
of plan assets by approximately $23.0 million.                                  

    Changes in pension plan assumptions for the Lubrizol plans are expected to
increase pension expense for all pension plans worldwide in 2004 by             
approximately $6.0 to $7.0 million, which will not have a significant impact on 
our financial condition or results of operations. The increase in the pension   
expense is due                                                                  

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primarily to the decline in the discount rate, the addition of approximately    
$1.0 million of unrecognized loss amortization in 2004, market returns and other
factors.                                                                        

DETERMINATION OF POSTRETIREMENT BENEFIT COST                                

    Annually we review with our actuaries the key economic assumptions used in
calculating postretirement benefit cost as prescribed by SFAS No. 106,          
"Employers' Accounting for Postretirement Benefits Other than Pensions."        
Postretirement benefits include health care and life insurance plans. The       
determination of postretirement benefit cost is based upon a number of actuarial
assumptions, including the discount rate for determining the accumulated        
postretirement benefit obligation, the assumed health care cost trend rates and 
ultimate health care trend rate. The same discount rate selected for the pension
plan generally is used for calculating the postretirement benefit obligation.   
Net non-pension postretirement benefit cost was $5.6 million in 2003, $4.7      
million in 2002 and $3.9 million in 2001. Our United States non-pension         
postretirement benefit cost in 2003 approximated 92% of the total non-pension   
postretirement benefit cost.                                                    

    For the Lubrizol plans at December 31, 2003, a change in the discount rate
of 100 basis points would have the following effects on the postretirement      
benefit cost:                                                                   

Increase (Decrease) in Postretirement Benefit Cost from Change in Discount Rate 
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                                100 BASIS POINT   
                                                             ---------------------
                                                             INCREASE    DECREASE 
                                                             ---------   ---------
                                                             (DOLLARS IN MILLIONS)
                                                                                  
United States postretirement plans..........................   $(1.4)      $1.7   
International postretirement plans..........................       -        0.1   
                                                               -----       ----   
All postretirement plans....................................   $(1.4)      $1.8   
                                                               =====       ====   

     For the Lubrizol plans at December 31, 2003, a change in the assumed health
care cost trend rate of 100 basis points would have the following effects on the
postretirement benefit cost:                                                    

Increase (Decrease) in Postretirement Benefit Cost from Change in Assumed Health
--------------------------------------------------------------------------------
Care Cost Trend Rate
--------------------

                                                                [Download Table]

                                                                100 BASIS POINT   
                                                             ---------------------
                                                             INCREASE    DECREASE 
                                                             ---------   ---------
                                                             (DOLLARS IN MILLIONS)
                                                                                  
United States postretirement plans..........................   $1.6        $(1.2) 
International postretirement plans..........................      -         (0.1) 
                                                               ----        -----  
All postretirement plans....................................   $1.6        $(1.3) 
                                                               ====        =====  

ACCOUNTING FOR BUSINESS COMBINATIONS                                        

During the past several years, we have completed a number of business 
combination transactions. We accounted for our past combinations using the      
purchase method of accounting, which is the only method allowed under SFAS No.  
141, "Business Combinations." The accounting for business combinations is       
complicated and involves the use of significant judgment. Under the purchase    
method of accounting, a business combination is accounted for at a purchase     
price based upon the fair value of the consideration given including direct     
acquisition costs, whether it is in the form of cash, assets, stock or the      
assumption of liabilities. The assets and liabilities acquired are measured at  
their fair values and the purchase price is allocated to the assets and         
liabilities based upon these fair values. Generally, the acquisition price      
exceeds the fair value of the tangible assets acquired and the various          
intangible assets also acquired must be valued. Determining the fair values of  
the assets and liabilities acquired involves the use of judgment, since some of 
the assets and liabilities acquired do not have fair values that are readily    
determinable. Different techniques                                              

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may be used to determine fair values, including market prices, where available, 
appraisals, comparisons to transactions for similar assets and liabilities and  
present value of estimated future cash flows. Since these estimates involve the 
use of significant judgment, they can change as new information becomes         
available. During 2003, we used an outside appraiser for our largest            
acquisition, Amerchol products, to assist in the allocation of the purchase     
price to intangible assets and goodwill. The appraiser used the income approach 
to value the intangibles, in which the value is developed on the basis of       
capitalization of net earnings that would be generated for a specific stream of 
income attributed to an asset or group of assets. The value of the intangibles  
identified by the appraiser for the Amerchol products acquisition was $17.9     
million and goodwill was determined to be $36.1 million. Amortization of the    
Amerchol intangible assets will result in annual amortization expense of        
approximately $0.8 million.                                                     

    On June 3, 2004, we acquired Noveon International. Various assets acquired
and liabilities assumed, primarily working capital accounts, of Noveon          
International have been recorded at estimated fair values as determined by us   
based on the information currently available. Appraisals of long-lived assets   
and identifiable intangible assets, including an evaluation of in-process       
research and development projects, are currently underway and will be completed 
at various times within the next twelve months. In addition, the valuations of  
our projected pension and other post-employment benefit obligations are also in 
process and estimates have been reflected in the preliminary allocation of      
purchase price. Such amounts are subject to adjustment based on the completion  
of the valuations and appraisals. Accordingly, the preliminary purchase price   
allocation is subject to revision.                                              

The purchase price of Noveon International includes the estimated fair
value of research and development projects totaling $35.0 million that, as of   
the acquisition date, had not reached technological feasibility and had no      
alternative future use. As a result, this amount was immediately expensed in the
consolidated statement of income in the second quarter of 2004.                 

ACCOUNTING FOR GOODWILL IMPAIRMENT                                          

We expect acquisitions to play an important role in our future growth 
strategy and accordingly expect the accounting required under SFAS No. 142,     
"Goodwill and Other Intangible Assets," to be important to the fair presentation
of our financial condition and results of operations. SFAS No. 142 requires     
goodwill to be tested annually and between annual tests if events occur or      
circumstances change that would more likely than not reduce the fair value of a 
reporting unit below its carrying amount. The annual goodwill impairment test   
requires us to make a number of assumptions and estimates concerning future     
levels of earnings and cash flow, which are based upon our strategic plans. A   
discounted cash flow model is used to determine the fair value of each reporting
unit. The integrity of the model was reviewed by an outside independent         
appraiser during 2002 and found to be appropriate. No impairment of goodwill was
identified in the annual impairment test completed in 2003.                     

ACCOUNTING FOR DEBT ISSUANCE COSTS                                          

Costs incurred with the issuance of debt and credit facilities are    
capitalized and amortized over the life of the associated debt using the        
effective interest method of amortization. In June 2004, we financed the Noveon 
International acquisition with a temporary bridge facility. Fees associated with
the temporary bridge facility were capitalized and are being amortized over the 
bridge financing period. A total of $11.2 million was incurred in temporary     
bridge facility fees in June 2004 and these fees are being expensed ratably     
through September 2004 when a long-term financing arrangement is expected to be 
completed.                                                                      

NEW ACCOUNTING PRONOUNCEMENTS                                               

    In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which became effective for us on January 1, 2002. Intangibles resulting
from business acquisitions, including purchased technology, land use rights,    
non-compete agreements, distributor networks, trademarks and patents, are       

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amortized on a straight-line method over periods ranging from 5 to 40 years.    
Under SFAS No. 142, goodwill and other intangibles determined to have indefinite
lives are no longer amortized, but are tested for impairment at least annually. 
We have elected to perform our annual tests for potential impairment of goodwill
and indefinite life intangibles as of October 1 of each year. We had goodwill   
amortization expense of approximately $11.0 million in 2001. As part of the     
annual impairment test required under SFAS No. 142, the useful lives of the     
non-amortized trademarks are reviewed to determine if the indefinite status     
remains appropriate. After considering the expected use of the trademarks and   
reviewing any legal, regulatory, contractual, obsolescence, demand, competitive 
or other economic factors that could limit the useful lives of the trademarks,  
in accordance with SFAS No. 142, we determined that the trademarks had          
indefinite lives.                                                               

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset     
Retirement Obligations," which became effective for us on January 1, 2003. This 
statement requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. The amount recorded
as a liability is capitalized by increasing the carrying amount of the related  
long-lived asset. Subsequent to initial measurement, the liability is accreted  
to the ultimate amount anticipated to be paid and is also adjusted for revisions
to the timing or amount of estimated cash flows. The capitalized cost is        
depreciated over the useful life of the related asset. Upon settlement of the   
liability, an entity either settles the obligation for its recorded amount or   
incurs a gain or loss upon settlement. The adoption of this statement did not   
have a material impact on our consolidated financial position or results of     
operations.                                                                     

In October 2001, the FASB issued SFAS No. 144, "Accounting for the    
Impairment or Disposal of Long-Lived Assets," that supersedes SFAS No. 121,     
"Accounting for the Impairment or Disposal of Long-Lived Assets and for         
Long-Lived Assets to Be Disposed of." SFAS No. 144 retains the fundamental      
provisions of SFAS No. 121 related to the recognition and measurement of the    
impairment of long-lived assets to be "held and used," provides more guidance on
estimating cash flows when performing a recoverability test, requires that a    
long-lived asset (group) to be disposed of other than by sales (i.e. abandoned) 
be classified as "held and used" until it is disposed of, and establishes more  
restrictive criteria to classify an asset (group) as "held for sale." We adopted
SFAS No. 144 effective January 1, 2002. Upon adoption, this statement had no    
impact on our consolidated financial position or results of operations.         

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs     
Associated with Exit or Disposal Activities." SFAS No. 146 requires recording   
costs associated with exit or disposal activities at their fair values when a   
liability has been incurred. Under previous guidance, certain exit costs were   
accrued upon management's commitment to an exit plan, which is generally before 
an actual liability has been incurred. The provisions of SFAS No. 146 are       
effective for exit or disposal activities that are initiated after December 31, 
2002. We adopted this statement effective January 1, 2003. The adoption of this 
statement had no impact on our consolidated financial position or results of    
operations.                                                                     

In November 2002, the Emerging Issues Task Force, or EITF, reached a  
consensus on Issue No. 00-21, or Issue 00-21, "Revenue Arrangements with        
Multiple Deliverables." Issue 00-21 provides guidance on how to account for     
arrangements that involve delivery or performance of multiple products, services
and/or rights to use assets. The adoption of Issue 00-21 in 2003 had no impact  
on our consolidated financial position or results of operations.                

     In December 2002, the FASB issued Interpretation No. (FIN) 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect       
Guarantees of Indebtedness of Others." FIN 45 requires the disclosure of any    
guarantees beginning December 31, 2002, and the recognition of a liability for  
any guarantees entered into or modified after that date.                        

In January 2003, the FASB issued FIN 46, "Consolidation of Variable   
Interest Entities." FIN 46 provides guidance on how to identify a variable      
interest entity and determine when the assets, liabilities, non-controlling     
interests and results of operations of a variable interest entity need to be    
included in a company's consolidated financial statements. FIN 46 also requires 
additional disclosures by primary beneficiaries and other significant variable  
interest holders. In December 2003, the FASB issued a revision to FIN 46 (FIN   
46R), which provided additional guidance on the definition of a variable        
interest entity and                                                             

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delayed the effective date until the first reporting period ending after March  
15, 2004, except for special-purpose entities, which must be accounted for under
FIN 46 or FIN 46R no later than the end of the first reporting period ending    
after December 15, 2003. The adoption of FIN 46R did not have a material impact 
on our consolidated financial position or results of operations.                

     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and         
clarifies financial accounting and reporting for derivative instruments,        
including certain derivative instruments embedded in other contracts and for    
hedging activities under SFAS No. 133. SFAS No. 149 is effective for contracts  
entered into or modified after June 30, 2003 and for hedging relationships      
designated after June 30, 2003. The adoption of this statement had no impact on 
our consolidated financial position or results of operations.                   

    As of July 1, 2003, we adopted the provisions of SFAS No. 150, "Accounting
for Certain Financial Instruments with Characteristics of Both Liabilities and  
Equity," including the deferral of certain effective dates as a result of the   
provisions of FASB Staff Position SFAS No. 150-3, "Effective Date, Disclosures, 
and Transition for Mandatorily Redeemable Financial Instruments of Certain      
Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests  
Under FASB Statement No. 150, Accounting for Certain Financial Instruments with 
Characteristics of Both Liabilities and Equity." We do not currently utilize    
these types of financial instruments and the adoption of this statement had no  
impact on our consolidated financial position or results of operation.          

In December 2003, the Medicare Prescription Drug, Improvement and     
Modernization Act was enacted, which introduced a Medicare prescription drug    
benefit and a federal subsidy to sponsors of retiree health-care plans that     
provide a benefit at least actuarially equivalent to the Medicare benefit. In   
accordance with the FASB Staff Position SFAS No. 106-2, "Accounting and         
Disclosure Requirements Related to the Medicare Prescription Drug, Improvement  
and Modernization Act of 2003," we have elected to defer recognition of the     
effects of the new Medicare Act. The accumulated postretirement benefit         
obligation and net periodic postretirement benefit cost do not reflect the      
provisions of the Medicare Act. We estimate the annual cash flows from the      
federal subsidy to be in the range of $0.6 million to $0.8 million, beginning in
2006. We have not yet determined the income statement effect.                   

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                      

    We operate manufacturing and blending facilities, laboratories and offices
around the world and utilize fixed and variable rate debt to finance our global 
operations. As a result, we are subject to business risks inherent in non-U.S.  
activities, including political and economic uncertainties, import and export   
limitations, and market risks related to changes in interest rates and foreign  
currency exchange rates. We believe the political and economic risks related to 
our foreign operations are mitigated due to the stability of the countries in   
which our largest foreign operations are located.                               

   In the normal course of business, we use derivative financial instruments
including interest rate and commodity hedges and forward foreign currency       
exchange contracts to manage our market risks. Our objective in managing our    
exposure to changes in interest rates is to limit the impact of such changes on 
our earnings and cash flow. Our objective in managing the exposure to changes in
foreign currency exchange rates is to reduce volatility on our earnings and cash
flow associated with such changes. Our principal currency exposures are the     
euro, the pound sterling, the Japanese yen and certain Latin American           
currencies. Our objective in managing our exposure to changes in commodity      
prices is to reduce the volatility on earnings of utility expense. We do not    
hold derivatives for trading purposes.                                          

     We measure our market risk related to our holdings of financial instruments
based on changes in interest rates, foreign currency rates and commodity prices 
utilizing a sensitivity analysis. The sensitivity analysis measures the         
potential loss in fair value, cash flow and earnings based on a hypothetical 10%
change (increase and decrease) in interest, currency exchange rates and         
commodity prices. We use current market rates on our debt and derivative        
portfolios to perform the sensitivity analysis. Certain items such as lease     

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contracts, insurance contracts and obligations for pension and other            
postretirement benefits are not included in the analysis.                       

Our primary interest rate exposures relate to our cash and short-term 
investments, fixed and variable rate debt and interest rate swaps. The          
calculation of potential loss in fair value is based on an immediate change in  
the net present values of our interest rate-sensitive exposures resulting from a
10% change in interest rates. The potential loss in cash flow and income before 
tax is based on the change in the net interest income/expense over a one-year   
period due to an immediate 10% change in rates. A hypothetical 10% increase in  
interest rates would have had a favorable impact and a hypothetical 10% decrease
in interest rates would have had an unfavorable impact on fair values of $53.0  
million and cash flows of $38.8 million in 2004. In addition, a hypothetical 10%
increase in interest rates would have had an unfavorable impact and a           
hypothetical 10% decrease in interest would have had a favorable impact on      
income before tax of $3.1 million in 2004.                                      

Our primary currency rate exposures are to foreign-denominated debt,  
intercompany debt, cash and short-term investments and forward foreign currency 
exchange contracts. The calculation of potential loss in fair value is based on 
an immediate change in the United States dollar equivalent balances of our      
currency exposures due to a 10% shift in exchange rates. The potential loss in  
cash flow and income before tax is based on the change in cash flow and income  
before tax over a one-year period resulting from an immediate 10% change in     
currency exchange rates. A hypothetical 10% increase in currency exchange rates 
would have had an unfavorable impact and a hypothetical 10% decrease in currency
exchange rates would have had a favorable impact on fair values of $15.3        
million, cash flows of $31.6 million and income before tax of $12.7 million in  
2003.                                                                           

  Our primary commodity hedge exposures relate to natural gas and electric
utility expenses. The calculation of potential loss in fair value is based on an
immediate change in the United States dollar equivalent balances of our         
commodity exposures due to a 10% shift in the underlying commodity prices. The  
potential loss in cash flow and income before tax is based on the change in cash
flow and income before tax over a one-year period resulting from an immediate   
10% change in commodity prices. A hypothetical 10% increase in commodity prices 
would have had a favorable impact and a hypothetical 10% decrease in commodity  
prices would have had an unfavorable impact on fair value of $0.3 million, cash 
flow of $0.3 million, and income before tax of $0.3 million in 2003.            

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BUSINESS

OVERVIEW                                                                        

   We are a leading global producer and marketer of technologically advanced
chemicals and specialty materials for the transportation, consumer and          
industrial markets. Our business is founded on technological leadership.        
Innovation provides opportunities for us in growth markets as well as advantages
over our competitors. From a base of approximately 3,000 patents, we use our    
product development and formulation expertise to sustain our leading market     
positions and fuel our future growth. We create additives, ingredients, resins  
and compounds that enhance the performance, quality and value of our customers' 
products, while minimizing their environmental impact. Our products are used in 
a broad range of applications, and are sold into stable markets such as those   
for engine oils, specialty driveline lubricants and metalworking fluids, as well
as higher growth markets such as personal care and pharmaceutical products and  
performance coatings and inks. Our specialty materials products are also used in
a variety of industries, including the telecommunications, construction,        
footwear and automotive industries.                                             

     We are an industry leader in many of the markets in which our product lines
compete. We hold the #1 global position in the lubricant additives market. We   
also produce products with well recognized brand names, such as Anglamol(R)     
(gear oil additives), Carbopol(R) (acrylic thickeners for personal care         
products), Estane(R) (thermoplastic polyurethane), Hycar(R) (water-borne acrylic
emulsions for performance coatings) and TempRite(R) (chlorinated polyvinyl      
chloride resins and compounds used in plumbing systems).                        

We are geographically diverse, with an extensive global manufacturing,
supply chain, technical and commercial infrastructure. We operate facilities in 
26 countries, comprised of production facilities in 22 countries, laboratories  
in six countries and offices in 25 countries, in key regions around the world.  
After giving effect to the recent acquisition of Noveon International, for the  
six months ended June 30, 2004, we derived approximately 51% of our pro forma   
consolidated net sales from North America, 27% from Europe, 17% from the        
Asia/Pacific region and the Middle East and 5% from Latin America. We sell our  
products in more than 100 countries and believe that our customers recognize and
value our ability to provide customized, high quality, cost-effective           
performance formulations and solutions worldwide. We also believe our customers 
value highly our global supply chain capabilities.                              

 Our pro forma consolidated results for the year ended December 31, 2003
included net revenues of $3,182.2 million, net income of $52.5 million and      
EBITDA of $433.6 million. Our pro forma consolidated results for the six months 
ended June 30, 2004 included net revenues of $1,837.8 million, net income of    
$79.9 million and EBITDA of $292.7 million, compared with net revenues of       
$1,596.4 million, net income of $29.0 million and EBITDA of $234.8 million for  
the six months ended June 30, 2003. See "Unaudited Pro Forma Consolidated       
Financial Information" beginning on page S-27. We have generated consistently   
strong cash flow from our diverse product lines, leading market positions,      
disciplined capital expenditure programs and working capital management. We     
believe our strong cash flow will enable us to maintain our leading market      
positions and to invest in targeted growth strategies while continuing to reduce
indebtedness.                                                                   

Following our acquisition of Noveon International, we reorganized our 
business into two business units and reporting segments: the lubricant additives
segment, also referred to as Lubrizol Additives, and the specialty chemicals    
segment, also referred to as Noveon. The Lubrizol Additives segment is comprised
of our previous business in fluid technologies for transportation, advanced     
fluid systems, emulsified products and the former industrial additives product  
group of our previous business in fluid technologies for industry. The Noveon   
segment is comprised of the product lines of Noveon International and the former
performance chemicals product group of fluid technologies for industry.         

OUR COMPETITIVE STRENGTHS                                                       

     TECHNOLOGY LEADERSHIP.  We pioneered the development of lubricant additives
over 75 years ago and continue to maintain technology leadership in the industry
today. Our extensive knowledge of surface-active                                

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chemistry is the primary technology platform from which we drive innovation and 
new product development in lubricant and fuel additives, as well as additives   
for coatings and ingredients for personal care products. We believe that our    
expertise is critical to meeting our customers' needs, sustaining our           
competitive advantages and capitalizing on growth opportunities. Excluding      
acquisitions, in each of the past five years, approximately 40% of sales were   
from products introduced within the previous five years. The acquisition of     
Noveon International has further complemented and enhanced our technological    
capabilities. We both share a strong foundation in polymer chemistry. All our   
dispersants, which are our highest volume class of additives, are polymers, as  
are most of our rheology control agents. Our dispersant technology protects the 
surfaces of equipment by suspending contaminant particles in fluids, and our    
rheology chemistry modifies the viscosity, or flow characteristics, of a fluid. 
Noveon International's expertise in polymer chemistry led to the invention of   
Carbopol(R), the world's leading acrylic thickener. We employ more than 100 PhDs
in our state-of-the-art laboratories in North America, Europe and Asia, helping 
us to enhance our leadership in our markets. Our commitment to technology is    
also demonstrated by continued investment in research and development. For the  
year ended December 31, 2003, on a pro forma basis, we invested $211.7 million, 
or 6.7% of net sales, in research, testing and development activities.          

    LEADING MARKET POSITIONS.  We hold the #1 global position in the lubricant
additives market, which includes engine oils, specialty driveline lubricants and
industrial oil additives. Approximately 56% of our pro forma consolidated net   
sales for the year ended December 31, 2003 were generated from sales into that  
market. Additionally, other of our products that hold #1 or #2 global positions 
include Carbopol(R) acrylic thickener, Estane(R) TPU, Lanco(R) coatings surface 
modifiers, Solsperse(R) hyperdispersants, TempRite(R) CPVC and Hycar(R) reactive
liquid polymers. These other leading products represented approximately 17% of  
our pro forma consolidated net sales for the year ended December 31, 2003. In   
each of these product lines, we have developed formulation and production       
advantages that have allowed us to sustain our market leadership.               

 SPECIALIZED VALUE-ADDED PRODUCTS.  Our products are used to enhance our
customers' products. Our products generally represent a small percentage of our 
customers' production costs, yet are critical to end-product performance. Many  
of our products are developed in direct cooperation with our customers to meet  
their specific needs, often resulting in long-standing and loyal customer       
relationships. For decades we have worked with many of our lubricant additive   
customers on various joint technology development projects such as customized   
formulations for their premium product lines. In addition, many of our products 
are specified in the formulations of OEMs and other of our customers, resulting 
in significant barriers to changing suppliers. In our lubricant additives       
business, we work with OEMs to design customer-specific additives for use with  
the manufacturers' equipment. For example, we formulate complex additive        
packages for automatic transmission fluids with automotive and transmission OEMs
to optimize the performance of the transmission. We work with coatings producers
to develop paints with unique properties. Additionally, our carbomer thickeners 
are specified for use in personal care and pharmaceutical applications, and our 
FDA-approved polymers are specified for use in food-packaging applications.     

GLOBAL INFRASTRUCTURE.  We develop, manufacture and sell our products 
around the world. Our global infrastructure enables us to fulfill promptly the  
procurement demands of our customers, who are increasingly demanding a          
comprehensive supply solution to match their global operations. Over the last 75
years, we have made significant investments in our global operations that have  
contributed to our market leadership position. Recently, we made investments in 
emerging markets such as China and India that we expect will lead to further    
growth opportunities in these markets. We believe our global presence moderates 
the effects of a single region's economic cycles and gives us an advantage over 
many competitors. For the six months ended June 30, 2004, 51% of our pro forma  
consolidated net sales were originated in North America, 27% in Europe, 17% in  
the Asia/Pacific region and the Middle East and 5% in Latin America.            

EXPERIENCED MANAGEMENT TEAM.  Our senior management team consists of  
professionals with extensive experience in the specialty chemicals industry.    
These managers have successfully operated our business during various industry  
conditions and cycles and are continually focused on improving productivity,    
maximizing operating efficiency and optimizing the use of our capital resources.
Management has                                                                  

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demonstrated its ability to improve operating performance, reduce the cost      
structure and maximize long-term profitability of acquired companies.           

OUR CORPORATE STRATEGY                                                          

     Our corporate strategy is balanced between sustaining our market leadership
in mature markets such as lubricant additives, and expanding our leadership in  
higher growth markets, such as ingredients for personal care products. At the   
core of our corporate strategy is our intention to continue to invest in        
technology focused on identified market needs to create product differentiation 
and sustainable competitive advantages.                                         

STRENGTHEN TECHNOLOGY LEADERSHIP.  We are committed to our internal   
research and development as a means to strengthen our technology leadership and 
to sustain and expand our product offerings. We believe technology leadership is
essential to sustaining our market leadership and profitability. We believe our 
customers highly value our responsiveness to their needs, such as formulating   
products that adhere to regulatory requirements and developing customized and   
specialized products. For example, well in advance of its required introduction,
we met a significant technical challenge in formulating our products to meet the
North American passenger car motor oil standards for the 2005 model year. These 
standards require improved control of emissions and greater fuel economy, and we
are achieving higher prices with our new formulations. We have also developed a 
new resin with unique adhesion properties for difficult-to-coat surfaces. This  
resin is the key component in a paint formulation that has been successfully    
commercialized by a major global coating producer.                              

APPLY OUR FORMULATION EXPERTISE TO EXTEND OUR TECHNOLOGY INTO NEW     
APPLICATIONS.  We intend to utilize our technological expertise to modify       
existing products continuously to broaden their usage. For example, we modified 
a dispersant originally used to lighten the color and improve the clarity in    
motor oils for use as an emulsifier providing stability in the formulation of   
skin creams and sunscreens. We modified another of our products, which was      
originally used as a motor oil detergent in the 1960s, for use in the automotive
rustproofing market. Then, as the rustproofing market declined in the 1980s, we 
developed a modified component of this automotive undercoating for use as a     
"no-drip" thickener for industrial coatings. More recently, we developed a clear
version of this thickener to be used for architectural coatings.                

   EXPAND THE GLOBAL BREADTH OF OUR BUSINESS.  We will continue to serve our
existing multinational customers as they penetrate emerging markets, and will   
also pursue new customers in those regions. We selectively add sales, marketing 
and research and development personnel in targeted regions and follow with      
further infrastructure expansion as the markets for our customers' products     
develop. We are focused specifically on expanding our business in the           
Asia/Pacific region, in particular China. For example, in our lubricant         
additives business, we have a joint venture with PetroChina to serve the local  
market for engine oils. Additionally, we have begun to build our commercial and 
technical sales presence in China for our products outside of the joint venture,
such as our industrial lubricant additives, coating additives, personal care    
ingredients and specialty materials products. Our focus on the region has       
generated higher sales. In the first half of 2004, our total pro forma          
consolidated net sales in the Asia/Pacific region increased 21% over the first  
half of 2003.                                                                   

     PURSUE PRODUCTIVITY EFFICIENCIES.  We continually seek ways to increase our
productivity by pursuing operational efficiencies, reducing our fixed cost      
structure, rationalizing capacity and efficiently managing capital spending. For
example, in lubricant additives, we implemented a program in 2003 to achieve a  
more competitive cost structure that resulted in annual savings of approximately
$20.0 million. Excluding acquisitions, since 1996 we have reduced the number of 
production units by 23%, formulating components by 37% and manufacturing        
headcount by 29%, while shipment volume has increased by 18%. For the businesses
we acquire, we look to eliminate duplicative costs and realize synergies. Within
a month following the Noveon International acquisition, we announced workforce  
reductions that are estimated to achieve $16.0 million in annual cost savings.  

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 OPTIMIZE OUR BUSINESS PORTFOLIO.  We will continue to make decisions on
capital allocation, acquisitions and divestitures based on growth and           
profitability targets. Since 2000, we have completed nine acquisitions,         
including our acquisition of Noveon International, which expanded our business  
portfolio into higher growth markets. We expect to continue to improve our      
portfolio mix by allocating more resources to higher growth product lines and   
seeking to make selective, accretive acquisitions of assets and technology that 
focus on value-added applications and complement our current product offerings  
and capabilities. At the same time, we will continue to support our lubricant   
additives business by emphasizing market leadership, a competitive cost         
structure and free cash flow generation. Finally, we will divest underperforming
or non-strategic businesses in order to optimize our portfolio and improve our  
profitability and financial flexibility. We have identified possible divestiture
candidates with aggregate annual revenues of $300.0 to $500.0 million.          

ACQUISITION HISTORY                                                             

In the 1980s, growth in demand for lubricant additives slowed as      
innovations in engine design and improved lubricant performance extended the    
service intervals between required lubricant changes. We responded to this      
decline in the lubricant additive growth rate by expanding into new markets.    

   Our initial expansion efforts focused on discovering new applications for
our additive chemistry. We also began making selective acquisitions driven by   
our desire to gain access to new market channels as well as to higher growth,   
adjacent markets such as coating additives and metalworking fluids. During the  
1990s and through the end of 2000, we completed 16 acquisitions. In aggregate,  
the annual revenues of these companies at the time of purchase totaled          
approximately $270.0 million. The largest was the acquisition of BP p.l.c.'s    
lubricant additive business, which we consolidated into our existing operations.

  In 2000, we established a vision for growth that renewed our strategy to
grow our business significantly by broadening our end-market focus beyond our   
traditional lubricant additive markets. To measure our progress toward achieving
our vision, we established aggressive revenue and profitability goals. A key    
element of our strategy was organic growth through continued product innovation 
and new formulations for new end markets.                                       

We also increased our efforts to make larger, profitable acquisitions.
Among the areas targeted for growth through acquisitions were personal care     
ingredients and coating additives. These areas fit our strengths in             
surface-active chemistry and product innovation. We also introduced new tools   
and training to improve our ability to complete acquisitions successfully,      
including refinements to our due diligence and integration processes. Prior to  
the acquisition of Noveon International, we made eight other acquisitions since 
2000, with aggregate annual revenues of approximately $200.0 million.           

     By early 2004, we believe we had established the basis for acquiring Noveon
International. We had developed significant experience evaluating and           
integrating acquired businesses and had expanded our presence in the personal   
care and coatings markets that offered potential for synergies with Noveon      
International.                                                                  

THE NOVEON INTERNATIONAL ACQUISITION                                            

On June 3, 2004, we acquired Noveon International, a leading global   
producer and marketer of technologically advanced specialty materials and       
chemicals used in the industrial and consumer markets. With the acquisition of  
Noveon International, we have accelerated our program to attain a substantial   
presence in the personal care and coatings markets by adding a number of higher 
growth, industry-leading products under highly recognizable brand names,        
including Carbopol(R) and Hycar(R), to our already strong portfolio of lubricant
and fuel additive products and consumer product ingredients. Additionally,      
Noveon International has a number of industry-leading specialty materials       
businesses, including TempRite(R) CPVC and Estane(R) TPU,                       

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that generate strong cash flow. We believe that the Noveon International        
acquisition meets the core tenets of our stated strategy to:                    

- maintain technology leadership;                                     

    - apply our formulation expertise to extend applications into new markets;
and                                                               

- expand the global breadth of our businesses.                        

   We expect the diversity of our combined businesses, customer base and end
markets to provide greater stability for our operations, and to generate strong 
cash flow from operations to reduce indebtedness while also pursuing selective  
future growth opportunities.                                                    

With the acquisition of Noveon International, we have broadened our   
customer base and have diversified the end uses for which we sell our products. 
Based on 2003 pro forma revenues, 45% of our pro forma revenues were from sales 
for vehicle and equipment maintenance, 15% from sales for industrial end uses,  
15% from sales to the personal care and consumer industries, 8% from sales to   
the vehicle production industry, 7% from sales to the construction industry, 5% 
from sales to the textile industry and 5% from sales for paper, packaging and   
printing.                                                                       

 The following chart sets forth the historical net revenues for the year
ended December 31, 2003 of Lubrizol and Noveon International attributable to    
each of our primary product lines, including a pro forma combined total (in     
millions):                                                                      

                                                        [Enlarge/Download Table]

                                                                                        PRO   
                                                                          NOVEON       FORMA  
REPORTING SEGMENTS AND PRODUCT LINES                         LUBRIZOL  INTERNATIONAL  COMBINED
------------------------------------                         --------  -------------  --------
                                                                                              
LUBRICANT ADDITIVES                                                                           
  Engine additives.......................................... $1,125.6                 $1,125.6
  Specialty driveline and industrial oil additives..........    622.2                    622.2
  Services and equipment....................................     48.9                     48.9
                                                             --------                 --------
                                                              1,796.7                  1,796.7
SPECIALTY CHEMICALS                                                                           
  Consumer specialties......................................    146.5    $  411.5        558.0
  Performance coatings......................................    108.9       375.5        484.4
  Specialty materials.......................................        -       343.1        343.1
                                                             --------    --------     --------
                                                                255.4     1,130.1      1,385.5
                                                             --------    --------     --------
Total net revenues.......................................... $2,052.1    $1,130.1     $3,182.2
                                                             ========    ========     ========

   We have established a target of $40.0 million in annual cost savings from
the integration of Noveon International that we expect to achieve by reducing   
costs of raw materials and outside services, rationalizing manufacturing        
operations and consolidating corporate functions, and repositioning our         
commercial development activities. Within a month of closing the acquisition, we
announced workforce reductions that are estimated to achieve $16.0 million in   
annual cost savings. Longer term, we will seek to grow revenues and profits by  
pursuing cross-marketing opportunities, leveraging our geographical             
infrastructure, enhancing product development capabilities and further          
streamlining operations. For example, Lubrizol's stronger position in the       
European coatings market will be combined with Noveon International's greater   
share of the North American coatings market to increase the cross-marketing     
opportunities for our products. We expect that the integration of Noveon        
International will be facilitated by our companies' common roots in the greater 
Cleveland area.                                                                 

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BUSINESS SEGMENTS                                                               

Following our acquisition of Noveon International, we reorganized our 
business into two business units and reporting segments: the lubricant additives
segment, also referred to as Lubrizol Additives, and the specialty chemicals    
segment, also referred to as Noveon. The Lubrizol Additives segment is comprised
of our previous business in fluid technologies for transportation, advanced     
fluid systems, emulsified products and the former industrial additives product  
group of our previous business in fluid technologies for industry. The Noveon   
segment is comprised of the product lines of Noveon International and the former
performance chemicals product group of fluid technologies for industry. For the 
year ended December 31, 2003, the lubricant additives segment represented 56%   
and the specialty chemicals segment represented 44% of our pro forma            
consolidated net sales.                                                         

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     The following chart summarizes the product groupings within each of our key
product lines.                                                                  

THE LUBRIZOL CORPORATION

Lubricant Additives Segment (Lubrizol Additives)                                

Engine Additives                                                      
Passenger Car Motor Oils                                    
Heavy-duty Diesel Engine Oils                               
Marine Diesel, Small Engines, Stationery Gas Oils           
Viscosity Modifiers                                         
Fuel, Refinery and OilField Products                        

Specialty Driveline and Industrial Oil Additives                      
Automatic Transmission Fluids                               
Gear Oils                                                   
Farm Tractor Fluids                                         
Hydraulic Fluids                                            
Grease Additives                                            
Metalworking Fluids                                         
Compressor Lubricants                                       
Industrial Gear Oils                                        

Services and Equipment                                                
Custom Solutions                                            
Fluid Metering Equipment                                    
Diesel Oxidation Catalysts                                  
Diesel Particulate Filters                                  

Specialty Chemicals Segment (Noveon)                                            

Consumer Specialties                                                  
Personal Care and Pharmaceuticals                           
Food and Beverage                                           
Polymer Additives                                           

Performance Coatings                                                  
Specialty Resins and Polymers                               
Coating Additives                                           

Specialty Materials                                                   
TempRite(R) CPVC                                            
Estane(R) TPU                                               

LUBRICANT ADDITIVES SEGMENT                                                     

     The lubricant additives segment, also referred to as Lubrizol Additives, is
the leading global supplier of additives for transportation and industrial      
lubricants. We pioneered the development of lubricant additives over 75 years   
ago and continue to maintain leadership in this $5.0 billion industry today. Our
customers rely on our products to reduce environmental impact and improve the   
performance and lifespan of critical components, such as engines, transmissions 
and gear drives for cars, trucks, buses, off-highway equipment, marine engines  
and industrial applications.                                                    

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     In 2003, the Lubrizol Additives segment generated pro forma net revenues of
$1,796.7 million and pro forma segment operating income of $201.5 million. For  
the six months ended June 30, 2004, the Lubrizol Additives segment generated pro
forma net revenues of $1,013.3 million and pro forma segment operating income of
$135.5 million, and for the six months ended June 30, 2003, the Lubrizol        
Additives segment generated pro forma net revenues of $903.2 million and pro    
forma segment operating income of $114.2 million. See the section of this       
prospectus supplement titled "Pro Forma Financial Information."                 

    Our products serve to increase cost-effectiveness by reducing friction and
heat, resisting oxidation, minimizing deposit formation, and preventing         
corrosion and wear. Through our in-house research, development and testing      
programs, we have the capability to invent and develop a broad range of         
proprietary chemical components, including antioxidants, anti-wear agents,      
corrosion inhibitors, detergents, dispersants, friction modifiers and viscosity 
modifiers. We formulate proprietary additive packages by combining these        
different components to create unique products targeting specific customer      
problems. We are recognized by our customers for innovative technology, the     
broadest product line and high quality products. Our key components of our      
additive packages include:                                                      

- antioxidants that retard oil thickening;                            

- anti-wear agents that protect surfaces in metal-to-metal contact;   

- corrosion inhibitors that prevent rust;                             

- detergents that prevent deposit build-up;                           

   - dispersants that protect equipment by suspending contaminant particles;

- friction modifiers that control friction at surfaces;               

   - polymer-based viscosity modifiers that allow lubricants to operate over
broad temperature ranges; and                                     

 - pour point depressants that control low-temperature fluid thickening.

  Our products are essential to the performance of the finished lubricant,
yet represent a relatively small portion of its volume. Our products are often  
designed to meet specific customer requirements, creating a unique barrier to   
competition. For example, we work with customers to develop additive packages   
that perform in combination with their proprietary base oil or that meet their  
marketing objectives to differentiate their lubricant. Extensive testing is     
conducted in our world-class laboratories, global mechanical testing facilities 
and in the field, to determine additive performance under actual operating      
conditions. With this testing, we provide proof of performance, which enables   
our customers to label and certify the lubricant as meeting the exact           
performance specifications required for these products by the industry. The     
majority of our products are designed to meet an industry standard or           
specification.                                                                  

    We have three primary product lines within our Lubrizol Additives segment:
engine additives, specialty driveline and industrial oil additives, and services
and equipment.                                                                  

ENGINE ADDITIVES.  Our engine additives products hold the #1 global   
position for a wide range of additives for passenger car, heavy-duty diesel,    
marine diesel, stationary gas and small engines. We also produce fuel additives 
and refinery and oilfield products. Our customers, who include major global and 
regional oil companies, refineries and specialized lubricant producers and      
marketers, blend our additive products with their base oil and distribute the   
finished lubricant to end users via retail, commercial or vehicle OEM channels. 
Passenger car motor oils and diesel engine oils are more than 80% of our engine 
additive sales. In 2003, our engine additives products generated net sales of   
$1,125.6 million.                                                               

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  The industry is relatively non-cyclical because it is primarily based on
the maintenance of vehicles and equipment. Fundamental drivers of demand        
include:                                                                        

- service intervals;                                                  

- vehicle usage including passenger car miles driven and diesel truck 
tonnage;                                                          

- average age of the vehicle fleet in service; and                    

   - requirements for new technology based on mandates for emissions control
and fuel economy.                                                 

We estimate the annual growth rate of the engine and fuel additives   
industry is 0-1% worldwide. The growth rate of the market has declined in the   
past decade because the improved performance of lubricants and additives allowed
lubricants to last longer between oil changes and innovations in engines,       
vehicles and vehicle components extended the service intervals between required 
fluid changes. Additionally, the industry has seen a wave of customer           
consolidation, specifically among the oil companies. The result is intensified  
competition among the lubricant additive suppliers. However, in 2003 and        
currently in 2004, the industry has been able to increase prices in response to 
higher raw material costs. We have traditionally been the price leader in the   
industry.                                                                       

    The industry currently has capacity utilization rates in the 70-80% range.
Historically, we believe a capacity utilization rate of 85% or greater provided 
good industry-wide profitability. Although there is excess capacity for some    
chemical components, certain components such as sulfonate and phenate detergents
and aminic, phenolic and sulfurized antioxidants are near capacity. Certain raw 
materials for dispersants are currently capacity constrained, exceeding 90%     
utilization. These include polyisobutylene, maleic anhydride and polyisobutylene
succinic anhydride.                                                             

   We see growth opportunities in the engine and fuel additives market based
on the following factors:                                                       

   - Standard changes.  The North American passenger car motor oil market is
moving to a new standard, designated GF-4, which is timed for the 
     introduction of the 2005 model-year vehicles. GF-4 is designed to allow
       OEMs to extend their emissions systems warranties from 100,000 to 120,000
     miles. We have met this standard successfully and expect a slight price
     premium. Additionally, the 2007 diesel engine standard in North America
      will require engine manufacturers to reduce diesel emissions by 90% from
      current allowable levels. This standard is particularly challenging, but
we believe we can meet this standard successfully with new, higher
performance lubricant additives.                                  

- Higher demand growth in emerging markets.  We believe there is an   
       opportunity in emerging markets such as China and India. We estimate that
   the potential market in China will be approximately $200.0 million in
      five years. Through our joint venture with PetroChina, we are positioned
to grow our business in this emerging market.                     

   - Fuel additives for alternative fuels.  The increased use of alternative
  fuels such as biodiesel, ethanol and ediesel, has created demand for
    specific fuel additives. We have developed a proprietary range of fuel
    additive products for the bulk market and the aftermarket that improve
     horsepower, engine operation, engine life, and fuel economy, while also
reducing emissions.                                               

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     The following is a list of representative uses for and a description of our
engine additives products:                                                      

                                                        [Enlarge/Download Table]

        CATEGORY                      PRODUCT/BRAND                            DESCRIPTION              
------------------------  -------------------------------------  ---------------------------------------
                                                                                                        
Engine Additives          Passenger car motor oils, heavy-duty   Additives that extend engine life,     
                          diesel engine oils, marine diesel,     minimize emissions and enhance fuel    
                          small engines, stationary gas and      economy.                               
                          viscosity modifiers                                                           
                          Fuel, refinery and oilfield products   Additives designed to eliminate        
                          and other components                   deposits and provide fuel system       
                                                                 cleanliness, prevent rust and          
                                                                 corrosion, enhance fuel economy,       
                                                                 provide anti-knock, lower volatility   
                                                                 and improve storage stability.         

     SPECIALTY DRIVELINE AND INDUSTRIAL OIL ADDITIVES.  We are a global supplier
of specialty driveline and industrial additive products for use in driveline and
industrial applications. In 2003, our specialty driveline and industrial oil    
additives products generated net sales of $622.2 million.                       

SPECIALTY DRIVELINE ADDITIVES                                               

Our specialty driveline additives product line includes additives for 
automatic transmission oils and gear oils for cars, trucks, buses, off-highway  
equipment and farm tractors. Relative to engine oils, specialty driveline       
additives are more complex formulations that carry higher average pricing and   
value and have longer product life cycles. We sell our products to major global 
and regional oil companies, specialized lubricant producers and marketers. Our  
customers use our products to blend with their lubricant fluids and distribute  
the finished lubricant to end users via retail, commercial or vehicle OEM       
channels. The specialty driveline additives industry is characterized by        
well-established product lines that meet OEM specifications and carry OEM       
approvals. Meeting OEM standards and approvals creates a barrier to competition.

    The market for specialty driveline additives is stable but is dependent on
new auto and truck production. Fundamental drivers of demand include:           

- new auto and truck production;                                      

- OEM warranty claims;                                                

- OEM decisions to differentiate and optimize total driveline system  
performance;                                                      

- service intervals; and                                              

- advances in power transmission technology.                          

 We estimate the annual growth rate of the specialty driveline additives
industry is 0.5-1.0% worldwide. The growth rate has declined in the last decade 
based on encouragement from OEMs for the development of "fill-for-life"         
lubricants that do not require regular maintenance. Similar to engine additives,
heavy-duty truck fleets have increased drain intervals for gear oils and        
transmission fluids, which has also reduced the industry growth rate. In        
specialty driveline additives, we see opportunities for growth in the following 
areas:                                                                          

    - Demand for high performance fluids.  OEMs are increasingly incorporating
 high-performance fluids in the component design process in order to
 address long-term vehicle operating cost, fuel economy and warranty
issues. One example of this trend is in the European market, where
drivers are moving away from older manual transmissions toward    
   significantly advanced designs that include automatic and dual clutch
   transmissions. We are working directly with our customers and OEMs to
     design and formulate new specialized products to meet OEM requirements.
      In addition, we are expanding our product lines by incorporating more of
   our proprietary additives, such as polymer-based viscosity modifiers.

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- Demand for global supply capabilities.  OEMs are increasingly using 
     global standards that require approved, OEM-specific lubricants for use
    in their products. We are the only producer in the industry with local
       formulators and testing facilities in North America, Europe and Asia. Our
global infrastructure is a key component of our market leadership.

INDUSTRIAL OIL ADDITIVES                                                    

    Our industrial oil additives product line includes additives for hydraulic
lubricants, metalworking fluids, industrial gear oils and grease, as well as    
compressor lubricants. We sell our products to major global and regional oil    
companies, specialized lubricant producers and marketers. Our customers use our 
products to blend with their fluid products and distribute the finished         
lubricant to end users via retail, commercial or OEM channels.                  

     Because our products are sold to industrial end-markets, our industrial oil
additives product line is exposed to economic cycles more than other product    
lines within the lubricant additives segment. Fundamental drivers of demand     
include:                                                                        

- service intervals;                                                  

- industrial production; and                                          

- evolution of environmentally friendly fluids.                       

     We estimate the annual growth rate of the industrial oil additives industry
is 0.5-1.0% worldwide. Similar to the specialty driveline additives market,     
growth prospects for industrial oil additives have been affected somewhat by the
market's transition to longer service intervals. In addition, improvements in   
plant lubrication practices have reduced lubricant consumption. In industrial   
oil additives, we see opportunities for growth in the following areas:          

- Product substitution.  We are developing new performance fluids to  
substitute for products that are being phased-out or are no longer
 available. Currently in the metalworking market there is a shift in
       production substitution from natural sodium sulfonate emulsifiers to new,
synthetic formulations. Historically, natural sodium sulfonate    
 emulsifiers, by-products of white oil production, have been used to
  provide lubricity and rust protection for cutting metals. Over time,
      refinery process improvements have reduced the amount of by-product and,
       as a result, the principal U.S. supplier eliminated its capacity in 2003.
     We have created a cost-effective replacement product, based on our core
       proprietary technology, which improves on the performance deficiencies of
      the typical alternative synthetic sulfonates offered in the marketplace.

    - Joint custom product design.  To create additional competitive barriers,
       we continue to work with OEMs and our oil company customers to design and
   develop products that are a key component of the total value of their
       equipment. Examples of our cooperative product development include custom
synthetic lubricants for refrigeration compressors and industrial 
      equipment, products that address safety issues regarding worker exposure
to metalworking fluids, grease products that reduce the customer's
    manufacturing costs by reducing complexity and simplifying processing,
   and hydraulic additives that address requirements of the construction
industry for improving the power of hydraulic systems.            

     The following is a list of representative uses for and a description of our
specialty driveline and industrial oil additives products:                      

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                                                        [Enlarge/Download Table]

        CATEGORY                      PRODUCT/BRAND                            DESCRIPTION              
------------------------  -------------------------------------  ---------------------------------------
                                                                                                        
Specialty Driveline and   Driveline additives for automatic      OEM-specific additives that provide    
Industrial Oil Additives  transmission fluids, gear oils and     multiple and complex performance       
                          farm tractor fluids                    properties, including reducing friction
                                                                 in order to prevent wear of            
                                                                 transmissions, gears and farm tractor  
                                                                 components.                            
                          Additives for industrial fluids,       A wide range of additives to meet the  
                          including hydraulics, metalworking,    lubricant performance requirements of  
                          industrial gear, grease and            industrial equipment.                  
                          compressor fluids                                                             

   SERVICES AND EQUIPMENT.  Our services and equipment product line includes
our commercial development activities in advanced fluid systems and emulsified  
products, which is comprised of PuriNOx(TM) low-emissions diesel fuel. Advanced 
fluid systems include products used in emission control, such as catalyst,      
exhaust and filter systems, FluiPak(TM) sensor systems and precision metering   
devices used in blending and additive injection operations. In 2003, our        
services and equipment products generated net sales of $48.9 million.           

     The following is a list of representative uses for and a description of our
services and equipment products:                                                

                                                        [Enlarge/Download Table]

        CATEGORY                      PRODUCT/BRAND                            DESCRIPTION              
------------------------  -------------------------------------  ---------------------------------------
                                                                                                        
Services and Equipment    Custom Solutions                       Custom blending of finished lubricants 
                                                                 and training services for oil company  
                                                                 customers                              
                          PuriNOx(TM)                            Low-emissions diesel fuel.             
                          FluiPak(TM)                            Sensor systems and precision metering  
                                                                 devices used in blending and additive  
                                                                 injection operations.                  

SPECIALTY CHEMICALS SEGMENT                                                     

   The specialty chemicals segment, also referred to as Noveon, represents a
diverse portfolio of performance chemicals used in consumer and industrial      
applications, such as ingredients for personal care and pharmaceutical products,
food and beverage products, emulsions and additives for coatings and inks, and  
specialty plastics and materials.                                               

  In 2003, the Noveon segment generated pro forma net revenues of $1,385.5
million and pro forma segment operating income of $86.9 million. For the six    
months ended June 30, 2004, the Noveon segment generated pro forma net revenues 
of $824.5 million and pro forma segment operating income of $80.0 million, and  
for the six months ended June 30, 2003, the Noveon segment generated pro forma  
net revenues of $693.2 million and pro forma segment operating income of $45.7  
million. See the section of this prospectus supplement titled "Pro Forma        
Financial Information."                                                         

 We have three primary product lines within our Noveon segment: consumer
specialties, performance coatings and specialty materials.                      

CONSUMER SPECIALTIES.  We are a global producer of specialty chemicals
targeting the personal care, pharmaceutical and food and beverage industries and
we are a provider of engineered adhesives, polymer additives and specialty      
emulsifiers. Key products in this product line include Carbopol(R) acrylic      
thickeners, film formers, fixatives, emollients, silicones, botanicals, active  
pharmaceutical ingredients and intermediates, benzoate preservatives,           
fragrances, synthetic food dyes, natural colorants, Hycar(R) reactive liquid    
polymers, rubber and lubricant antioxidants, rubber accelerators and ADEX(TM)   
emulsifiers for mining explosives. In 2003, our consumer specialties product    
lines generated pro forma net sales of $558.0 million.                          

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PERSONAL CARE AND PHARMACEUTICALS                                           

     We are a global producer of specialty chemicals targeting the personal care
and pharmaceutical industries. Our products impart physical and sensory         
properties, such as texture, stability and thickness to products, including     
lotions, shampoos, hair gels, cosmetics and personal and oral hygiene products. 
Key products in this area include selected functional specialties and           
formulation additives such as specialty surfactants, methyl glucoside and       
lanolin derivatives, and Carbopol(R) acrylic thickeners, film formers and       
fixatives. Our products are an important component of the functionality and     
aesthetics of the end product, but typically represent a small portion of the   
customer's total product costs. Key product families include:                   

  - Carbopol(R) acrylic thickener, which is the global leader in synthetic
 thickeners due to its efficient stabilizing properties and superior
     thickening capabilities. Primary end-uses in the personal care industry
  include hair care, skin care and personal and oral hygiene products.
    Pharmaceutical primary end-uses include topical and controlled-release
applications.                                                     

    - Methyl glucoside and lanolin derivatives that enhance the functional and
aesthetic properties of personal care products by delivering      
     characteristics such as emulsification, thickening and moisturizing, as
well as imparting the elegant feel to lotions and creams.         

   - AMPS(R) specialty monomers that are used in the manufacture of polymers
    for a variety of applications such as dishwashing detergents to reduce
   spotting, skin creams to improve lubricity and feel, medical gels for
       defibrillator pads to enhance conductivity, and coatings and adhesives to
improve adhesion.                                                 

   - Chemron specialty surfactants and additives that enhance the functional
  and aesthetic properties of personal care products and household and
industrial cleaners by improving characteristics such as foaming, 
     cleansing, conditioning and mildness. Surfactants are primarily used in
hair care products, such as shampoos and body washes.             

Key growth drivers for our personal care and pharmaceutical products  
include:                                                                        

   - consumer demand for more efficient, innovative and convenient products;

- consumer preference for natural products;                           

- an aging population that desires a youthful appearance;             

- population growth; and                                              

- growth in developing nations.                                       

  We estimate the annual growth rate of the personal care industry is 3-5%
worldwide. Carbopol(R) acrylic thickener shipment volume for personal care and  
pharmaceuticals grew at a compound annual rate of approximately 8.5% per year   
between 1993 and 2003. We continue to develop new end-use applications for      
Carbopol(R) acrylic thickeners, which we believe will continue to drive         
significant demand growth. We expect Carbopol(R) acrylic thickener growth to    
exceed the growth of the personal care industry as its products continue to gain
sales at the expense of natural and inorganic thickeners. In addition, Noveon   
International successfully launched new products including Carbopol(R) Aqua SF1,
a liquid thickener, in 2002 and Fixate(TM), a hair styling resin, in 2003, both 
of which have expanded our personal care end-use applications.                  

    Recent acquisitions have extended our product breadth in personal care. In
September 2003, we purchased a natural skin care ingredients business from Dow  
Chemical. In October 2003, Noveon International purchased a controlling interest
in SNP, a Thailand-based manufacturer and marketer of botanical extracts used in
personal care product formulations. SNP provides us with access to products that
we plan to sell throughout our global distribution system. In January 2004,     
Noveon International purchased Scher Chemicals, Inc., a manufacturer of         
emollient and surfactant specialty chemicals used in cosmetic and other personal
care formulations.                                                              

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   In personal care, we see opportunities for growth in the following areas:

 - Demand for innovations in skin care products.  Recent acquisitions of
natural products, emollients and specialty surfactants allow us to
      participate more fully in skin care formulations, one of the largest and
fastest growing areas of the personal care industry.              

- Demand for functional ingredients that provide discernible          
benefits.  Consumers of personal care products increasingly value 
   performance in addition to aesthetic properties. In response, we have
  expanded our personal care ingredients portfolio to offer functional
products. These include rheology modifiers, actives and specialty 
silicones, emollients and surfactants.                            

  - Value of ingredients and services that support formulators of personal
     care products.  Our formulating aids, including thickeners, emollients,
 moisturizers, specialty emulsifiers, colors, pigments and specialty
surfactants, support the increasing technical challenges faced by 
  formulators who develop new personal care products. Formulators also
value our technical service, rapid order fulfillment and global   
infrastructure.                                                   

     The following is a list of representative uses for and a description of our
personal care and pharmaceuticals products:                                     

                                                        [Enlarge/Download Table]

        CATEGORY                      PRODUCT/BRAND                            DESCRIPTION              
------------------------  -------------------------------------  ---------------------------------------
                                                                                                        
Personal Care and         Carbopol(R)                            Acrylic thickener, which imparts       
Pharmaceuticals                                                  stability and improves aesthetics.     
                                                                 Often used as a controlled release     
                                                                 agent.                                 
                          Pemulen(R)                             Polymeric emulsifier reducing          
                                                                 formulation irritancy and providing    
                                                                 unique sensory properties.             
                          Avalure(R)                             Polymers for color cosmetics and skin  
                                                                 care.                                  
                          Specialty silicones                    Polymers affecting slip-and-feel.      
                          Fixate(TM)                             Resin for hair styling.                
                          Emollients                             Improve skin feel and appearance.      
                          Colorants                              Impart color in personal care products.
                          Botanical extracts                     Specialty additives for cosmetic and   
                                                                 skin care formulations.                
                          Methyl glucoside derivatives,          Natural thickeners, emulsifiers and    
                          including Glucamate(R)                 moisturizers for shampoos, liquid      
                                                                 cleansers, face and body creams and    
                                                                 lotions.                               
                          Lanolin derivatives                    Natural emollients, emulsifiers and    
                                                                 conditioners for creams, lotions and   
                                                                 color cosmetics.                       
                          AMPS(R) monomers                       Specialty monomer for high performance 
                                                                 polymers.                              
                          Chemron specialty surfactants,         Enhance cleansing, foaming and         
                          including Sulfochem(R)                 moisturizing of shampoos, body washes, 
                                                                 industrial and household cleaners.     
                          Polycarbophil                          Active agent for bulk laxatives.       
                          Amino acid-based actives               Active ingredients for pharmaceuticals.
                          Advanced intermediates                 Used in the production of active       
                                                                 pharmaceutical ingredients.            
                          Cassia gum                             Gelling agents for human food (Japan)  
                                                                 and pet food.                          

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FOOD AND BEVERAGE                                                           

     We are a supplier of products that preserve freshness and improve the color
and consistency of food and beverages, making them more appealing to consumers. 
We are a leading global producer of benzoate preservatives, a leading U.S.      
supplier of synthetic colorants and an integrated producer of flavors,          
fragrances and other food additives to the food and beverage industry. Benzoates
improve the shelf life of consumable goods and are the preservative of choice   
for manufacturers of soft drinks, bottled beverages, fruit-based products and   
prepared salads due to their anti-microbial properties. We believe that our     
Kalama, Washington benzoate facility is the largest facility of its type in     
North America and the second largest in the world, giving us the capability to  
serve large customers globally. This facility also produces a number of         
high-value, distinct flavor and fragrance products for use in many food and     
personal care products as well as certain intermediate products. The            
intermediate products include plasticizers used in adhesives, sealants and      
safety glass, and phenol, a co-product, used for adhesive resins in             
forest-product applications.                                                    

 We consolidated a series of small acquisitions that supply foam control
agents that reduce the amount of foam generated in a variety of industrial      
processes. Our antifoam and defoaming agents are based on a wide variety of     
chemistries, including silicone. We specialize in defoamers and antifoam agents 
for the food processing, fermentation, grain and sugar-sweetener industries, as 
well as for the metalworking, coatings, ink, textile, pharmaceutical, water     
treatment, mining and pulp and paper industries.                                

  We also sell a full line of FDA-approved food, drug and cosmetic primary
dyes (including blends of primary dyes), as well as lakes and natural colors.   
Primary end-uses for our product line within food and beverage applications     
include soft drinks and processed foods, such as canned soup and pre-made meals.
In addition, within the colorant operation, we produce pigment dispersions for  
use in architectural coatings and technical dyes used in household dyes and     
other applications. We also sell defoamer and anti-foam additives that are used 
in food applications to manage the level of foaming that occurs.                

     The food and beverage industry is a product-focused and fragmented industry
that has historically grown with gross domestic product. We expect growth to be 
driven by consumer demand for convenient and nutritious foods that require      
additives to preserve freshness and enhance taste, texture and appearance.      

     The following is a list of representative uses for and a description of our
food and beverage products:                                                     

                                                        [Enlarge/Download Table]

        CATEGORY                      PRODUCT/BRAND                            DESCRIPTION              
------------------------  -------------------------------------  ---------------------------------------
                                                                                                        
Food and Beverage         COLORS                                                                        
                          Food, drug and cosmetic dyes, lakes,   Colorants for beverages, confectionary 
                          natural colors and pigments            goods, cosmetics, dry mixes/snacks,    
                                                                 processed foods and pet food and       
                                                                 colorants for inks, paints and paper   
                                                                 dyes.                                  
                          BENZOATES                                                                     
                          Sodium benzoate and potassium          Improves shelf life for certain        
                          benzoate                               consumable goods. Preservative for     
                                                                 manufacturers of soft drinks, bottled  
                                                                 beverages, fruit-based products and    
                                                                 prepared salads.                       
                          FLAVORS AND FRAGRANCES                                                        
                          Benzaldehyde-based chemicals           Food, personal care and soap products. 

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        CATEGORY                      PRODUCT/BRAND                            DESCRIPTION              
------------------------  -------------------------------------  ---------------------------------------
                                                                                                        
                          INTERMEDIATES                                                                 
                          Phenol, benzaldehyde, benzyl alcohol   Pharmaceuticals, coatings, agrochemical
                          and benzoic acid                       products, plasticizers, adhesives,     
                                                                 sealant products and alkyd resins.     
                          FOAM CONTROL AGENTS                                                           
                          Silicone and other chemistries         Reduce foam in processing of food,     
                                                                 grain, fermentation and a wide range of
                                                                 industrial products.                   

POLYMER ADDITIVES                                                           

   We believe we are the largest global supplier of reactive liquid polymers
(RLP), sold under the trademark Hycar(R), and one of the leading North American 
producers of polymer additives including rubber and lubricant antioxidants and  
rubber accelerators. Our products in this category extend the life and improve  
the performance characteristics of rubber, lubricating oil, plastics and        
thermoset resin-based formulations. RLP is a high-growth niche product for      
technologically challenging applications, including structural and engineered   
adhesives used in aerospace, transportation and electronics. RLP improves impact
and crack resistance in composites and coatings and improves the toughness and  
long-term durability of epoxy-based structural adhesives. RLP growth is         
anticipated to exceed overall growth of the high-end adhesives industry, as the 
product is increasingly utilized for its superior performance characteristics   
relative to other binding agents.                                               

  Our antioxidant products are used in rubber, plastics and lubricants and
are marketed under the Good-Rite(R) name, a leading industry brand. Antioxidants
prevent oxidative degradation and are primarily utilized by rubber manufacturers
and, to a lesser extent, plastic manufacturers, to impart durability and prevent
the loss of functional attributes such as flexibility. In motor oil and other   
lubricants, antioxidants prevent thermal breakdown and extend product life. We  
also manufacture a line of accelerators, marketed under our brand, Cure-Rite(R),
which are utilized by rubber manufacturers to reduce the vulcanization/curing   
time, and thereby improve manufacturing productivity. Key growth drivers for our
antioxidants and accelerators include:                                          

- government regulation requiring higher quality lubricants;          

- vehicle usage including passenger car miles driven and diesel truck 
tonnage; and                                                      

    - consumer and government pressure on tire manufacturers to produce higher
quality tires.                                                    

     The following is a list of representative uses for and a description of our
polymer additives products:                                                     

                                                        [Enlarge/Download Table]

    CATEGORY                   PRODUCT/BRAND                            DESCRIPTION               
-----------------  -------------------------------------  ----------------------------------------
                                                                                                  
Polymer Additives  REACTIVE LIQUID POLYMER                                                        
                   Hycar(R)                               Used as a toughener and flexibilizer in 
                                                          thermoset resin formulations            
                                                          (construction, composites, coatings and 
                                                          structural adhesives).                  
                   ANTIOXIDANTS                                                                   
                   Good-Rite(R)                           Primarily used by rubber manufacturers  
                                                          to prevent oxidative degradations,      
                                                          impart durability and prevent loss of   
                                                          flexibility.                            
                   ACCELERATORS                                                                   
                   Cure-Rite(R)                           Helps reduce vulcanization/curing time. 

  PERFORMANCE COATINGS.  We are a leading supplier of specialty resins and
additives for the coatings and inks markets worldwide. We offer a wide range of 
products for formulating paints, coatings and inks. In 2003, our performance    
coatings products generated pro forma net sales of $484.4 million.              

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   Our business strategy for performance coatings is centered on our ability
to formulate and compound polymer emulsions to create customized solutions      
meeting the specific needs of our customers. Many of our coatings customers have
expanded their operations around the world. In response, Noveon International   
expanded its product lines and geographic coverage with a focus on strategic    
international account customers. We also recognize the importance of middle tier
and local customers, who we service economically with our trained local agents  
and distributor network. Noveon International had success with water-borne      
acrylic and polyurethane technologies as global restrictions targeting the      
reduction of the volatile organic compounds prevalent in solvent-based products 
have become more stringent. We will continue to develop innovative products     
based on these technologies to enhance our portfolio. We expect water-borne     
formulations to continue to grow faster than the overall industry growth rate   
for the niche industries in which we participate.                               

Key growth drivers include:                                           

  - environmental regulations that limit the use of solvent-based coatings
  and stimulate development of powder, radiation-cured and water-based
coatings;                                                         

- consumer preference for creative packaging;                         

- consolidation and globalization of the customer base, leading to    
preference for global suppliers of specialty resins and coating   
additives;                                                        

  - customer preference for fewer and larger suppliers of specialty resins
    and coating additives, as they streamline costs and reduce complexity;
and                                                               

     - improved performance and ease of application use of water-based products.

According to SRI International, an independent, nonprofit research    
institute, the annual global demand in 2002 for paint and coatings was          
approximately $60.0 billion, of which synthetic polymer resins comprised        
approximately $10.0 billion. In addition, we selectively serve the additives    
industry for paints, coatings and inks, which had estimated annual demand of    
$2.8 billion in 2003, according to Kusumgar, Nerlfi and Growney, a consulting   
and market research firm.                                                       

SPECIALTY RESINS AND POLYMERS                                               

 Our water-based polymer emulsions and dispersions, including resins and
auxiliaries, are used in the production of high-end paint and coatings for wood,
paper, metal, concrete, plastic, textiles and other surfaces. Our acrylic       
emulsions and polyurethane dispersions, which are environmentally attractive    
substitutes for solvent-based and hydrocarbon products, are valued for the      
superior gloss and durability properties they provide. In addition, our polymers
are used as ink vehicles, overprint varnishes and functional coatings for       
specialty paper, printing and packaging applications. We supply acrylic         
emulsions used to improve the appearance, texture, durability and flame         
retardance of high-end specialty textiles sold to the home furnishings,         
technical fabrics and apparel industries. In addition, we believe we are the    
only fully integrated U.S. supplier of glyoxal and glyoxal-based resins for     
durable press and wrinkle-resistant textile additives.                          

   In addition to water-based polymers, we specialize in unique, non-aqueous
acrylic and other proprietary polymer resins for the paint and coatings,        
printing ink, laminating, adhesives and sealants, and grease markets. These     
value-added Doresco(R) specialty resins not only function as carriers for       
pigment, but also provide surface protection and adhesion properties. We work   
closely with our customers to develop resins that address their specific        
problems.                                                                       

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     The following is a list of representative uses for and a description of our
specialty resins and polymer products:                                          

                                                        [Enlarge/Download Table]

      CATEGORY                    PRODUCT/BRAND                            DESCRIPTION               
--------------------  -------------------------------------  ----------------------------------------
                                                                                                     
Specialty Resins and  Acrylic Emulsions, Polyurethane        Provide superior gloss and durability   
Polymers              Dispersions and Other Water-based      properties to paints and coatings. End  
                      Systems, Hycar(R), Sancure(R),         markets include wood, paper, metal,     
                      Algan(R), Performax(R)                 concrete, plastic and textiles.         
                      Acrylic and Other Polymer Resins,      Function as carriers for pigments, and  
                      Doresco(R)                             provide surface protection and adhesion 
                                                             properties. End-markets include paint   
                                                             and coatings, printing ink, laminating, 
                                                             adhesives and sealants and grease.      

COATING ADDITIVES                                                           

    Our additives for coatings and inks are used to enhance the appearance and
durability of coatings in architectural and industrial uses, as well as to      
improve their processing and application characteristics. Additives such as     
pigment dispersants enhance the processing and performance of printing ink,     
while also maximizing color strength and stability in coatings and plastics. We 
are a leading global supplier of surface modifiers that improve the abrasion    
resistance properties and film characteristics of printing ink and coatings. Our
products include:                                                               

    - High-performance hyperdispersants for coatings, inks, thermoplastics and
      thermoset composites. We are a world leader in polymeric hyperdispersant
 technology, sold under the Solsperse(R) and Solplus(R) trade names.
     Hyperdispersants improve the dispersion of almost any solid particulate
    (including pigments, fillers, flame retardants and fibers) into almost
     any liquid medium (water, solvents and resins). They are primarily used
       to achieve even color saturation. They enrich and strengthen color, while
reducing production costs and solvent emissions. We also produce  
       Ircosperse(R) pigment dispersants for coatings and COLORBURST(TM) pigment
dispersants for printing inks.                                    

   - Surface modifiers improve the performance of industrial, architectural,
       can, coil, wood and powder coatings by enhancing and protecting surfaces.
Lanco(R), Lanco(R) Glidd, Lanco(R) Matt and Aquaslip(TM )surface  
       modifiers impart a variety of properties to a coating, including enhanced
      slip, improved abrasion and scratch resistance, matting, texturing and a
silky, soft feel.                                                 

- Rheology control additives improve the performance of coatings by   
   providing thickening, sag control, pigment anti-settling and improved
     surface appearance. Rheology control additives are sold under the brand
names Ircothix(R), Ircogel(R) and Solthix(R).                     

   - Foam control additives for paints and coatings minimize air bubbles and
are sold under the FOAM BLAST(R) and Antibubble(TM) brands.       

     - Specialized additives for inks improve rub resistance properties and film
characteristics.                                                  

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     The following is a list of representative uses for and a description of our
coating additives products:                                                     

                                                        [Enlarge/Download Table]

    CATEGORY                   PRODUCT/BRAND                             DESCRIPTION                
-----------------  -------------------------------------  ------------------------------------------
                                                                                                    
Coating Additives  Dispersants, Solsperse(R)              Improve the dispersion of almost any solid
                   Ircosperse(R), COLORBURST(TM)          particulate into almost any liquid medium.
                                                          End-markets include coatings and printing 
                                                          inks.                                     
                   Surface Modifiers, Lanco(R), Lanco(R)  Impart a variety of properties to a       
                   Glidd, Lanco(R) Matt, Aquaslip(TM)     coating, including enhanced slip, improved
                                                          abrasion and scratch resistance, matting, 
                                                          texturing and a silky, soft feel. End     
                                                          markets include industrial, architectural,
                                                          can and coil, wood and powder coatings.   
                   Rheology Control Additives,            Provide thickening, sag control and       
                   Ircothix(R), Ircogel(R), Solthix(R)    improved surface appearance of coatings.  
                   Foam Control Additives, FOAM           Minimize air bubbles in paints and        
                   BLAST(R), Antibubble(TM)               coatings.                                 
                   Specialized Additives for Inks,        Improve the processing, performance and   
                   Duotron(R), Liquitron(R), Fluotron(R)  rub resistance properties.                

 SPECIALTY MATERIALS.  We are the largest global supplier of chlorinated
polyvinyl chloride (CPVC) resins and compounds, sold under the trademark        
TempRite(R). We are also a leading producer of cross-linked polyethylene        
compounds (PEX) sold under the trademark TempRite(R). Applications for          
TempRite(R) resins and compounds include piping for residential and commercial  
plumbing and fire sprinkler systems. In addition to TempRite(R), we are also a  
leading producer of thermoplastic polyurethane (TPU), sold under the trademark  
Estane(R). Applications for Estane(R) TPU include plastic film and sheet for    
various coatings processes. In 2003, the specialty materials product line       
generated pro forma net sales of $343.1 million.                                

CHLORINATED POLYVINYL CHLORIDE                                              

TempRite(R) CPVC is a technologically advanced heat, fire and chemical
resistant polymer that we developed to serve technically demanding applications 
not well served by traditional PVC and other commodity plastics. Our TempRite(R)
CPVC polymers are sold to customers who produce plastic piping for residential  
and commercial plumbing, fire sprinkler systems and industrial piping           
applications. TempRite(R) CPVC piping has inherent advantages over copper and   
other metals due to its heat and corrosion resistance, increased insulation     
properties, mold resistance, ease of installation and lower installed cost. We  
market our branded TempRite(R) CPVC products for specific applications:         
FlowGuard(R) and FlowGuard Gold(R) for residential and commercial plumbing,     
BlazeMaster(R) for fire sprinkler systems and Corzan(R) for industrial piping.  
We believe we have strong end-user awareness of our brands by using a direct    
sales force that markets directly to builders, contractors, plumbers,           
architects, engineers and building owners.                                      

 In 2001, Noveon International purchased select assets and technology to
manufacture PEX compounds, further used to produce PEX pipe. TempRite(R) PEX    
enables us to add a flexible piping compound to our rigid piping product        
offering. TempRite(R) PEX is a small but growing product for applications that  
demand flexible piping systems.                                                 

Key growth drivers for TempRite(R) CPVC and TempRite(R) PEX include:  

  - continuing substitution of CPVC and PEX for metals, other plastics and
other more costly materials;                                      

  - increasing product awareness among builders, contractors and plumbers;

- residential and commercial real estate expenditures;                

- housing needs in developing countries; and                          

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- additional regulatory and building code approvals.                  

 Based on market research data from the Freedonia Group Incorporated, we
estimate that in 2002, the industry demand for all piping applications in which 
CPVC and PEX participate was in excess of $1.0 billion. We expect the niche     
applications for BlazeMaster(R) fire sprinkler piping and Corzan(R) industrial  
piping to continue to grow at a faster rate than metals used in similar         
applications. We believe that, just as plastic has replaced virtually all drain,
waste and vent piping systems, highly engineered plastics like CPVC and PEX     
approved for potable water systems will continue to take market share from      
copper and other metals in commercial and residential plumbing systems.         

     The following is a list of representative uses for and a description of our
CPVC and PEX products:                                                          

                                                        [Enlarge/Download Table]

CATEGORY                              PRODUCT/BRAND                            DESCRIPTION              
------------------------  -------------------------------------  ---------------------------------------
                                                                                                        
CPVC                      TempRite(R)                            Residential plumbing                   
                          FlowGuard(R)                           Residential and commercial plumbing    
                          FlowGuard Gold(R)                      Residential and commercial plumbing    
                          Corzan(R)                              Industrial piping                      
                          BlazeMaster(R)                         Fire sprinkler piping                  
PEX                       TempRite(R)                            Flexible piping systems                

THERMOPLASTIC POLYURETHANE                                                  

  Estane(R) TPU, an engineered, highly versatile thermoplastic, provides a
high quality, lower cost alternative to rigid plastics and flexible rubber.     
Performance attributes of Estane(R) TPU include abrasion, heat and chemical     
resistance, minimal fatigue from bending, ease of processing and good           
paintability. These performance characteristics make Estane(R) TPU attractive   
for use in a broad range of end-uses, including film and sheet for various      
coating processes, wire and cable insulation, athletic equipment (such as       
footwear), medical applications, pneumatic tubing and automotive molded parts.  
Noveon International recently introduced several new product families that      
extend the uses for Estane(R) TPU. This includes products that can be melt spun 
into elastic spandex fibers and materials that offer enhanced breathability for 
garments. We believe that Estane(R) TPU is one of the industry's leading brand  
names. We also market Stat-Rite(R) thermoplastics, which are static dissipative 
materials used in packaging for the electronics industry. In addition, we market
fiber-reinforced TPU under the Estaloc(R) brand. Estaloc(R) reinforced          
engineering thermoplastics offer the functional properties of traditional TPU,  
yet are reinforced for higher stiffness to provide the strength, dimensional    
stability and impact resistance required to withstand a variety of tough        
applications and harsh environments. Applications include sporting goods,       
agricultural equipment and other mechanical components. Key growth drivers for  
TPU include:                                                                    

- demand for technical coated fabric and other materials;             

- recreational activities;                                            

- new application development; and                                    

- increased substitution of TPU for other plastics.                   

We believe that the current annual global market for TPU products is  
approximately $800.0 million. We expect substantial growth in TPU volumes to    
occur in both new and existing end-use applications. The faster growing, higher 
value portion of the industry is the extrusion sector, which is driven by its   
rapid replacement of similar materials and its use in high-growth applications. 
Overall sales of TPU should continue to grow through ongoing replacement of     
rigid plastics, flexible rubber and other materials. We believe that we are well
positioned to grow faster than the overall TPU industry due to our focus on     
extruded applications and our commitment to develop new technology for high     
value applications.                                                             

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In October 2003, Noveon International purchased select assets and     
technology of Thermedics Polymer Products, LLC, a manufacturer of aliphatic TPU,
which will allow us to enter high-value optical film, medical tubing and other  
applications.                                                                   

     The following is a list of representative uses for and a description of our
TPU products:                                                                   

                                                        [Enlarge/Download Table]

CATEGORY                              PRODUCT/BRAND                            DESCRIPTION              
------------------------  -------------------------------------  ---------------------------------------
                                                                                                        
TPU                       Estane(R)                              Aromatic grades for film and sheet,    
                                                                 wire and cable insulation, athletic    
                                                                 equipment, medical applications,       
                                                                 pneumatic tubing, automotive molded    
                                                                 parts and adhesives.                   
                          Estaloc(R)                             Automotive trim, sporting goods,       
                                                                 agricultural equipment and other       
                                                                 mechanical components.                 
                          Stat-Rite(R)                           Packaging of semiconductors, sensitive 
                                                                 electronic components, disk drive heads
                                                                 and cell phone components.             
                          Tecoflex(R)                            Aliphatic grades for optical film,     
                                                                 medical tubing and general industrial  
                                                                 applications.                          

COMPETITION                                                                     

  Our Lubrizol Additives business is highly competitive in terms of price,
technology development, product performance and customer service. Our principal 
competitors, both in the United States and overseas, are Infineum, a joint      
venture involving Shell Oil Company and Exxon Mobil Corporation; Chevron Oronite
Company, a subsidiary of ChevronTexaco Corporation; and Afton Chemical          
Corporation, a subsidiary of NewMarket Corporation (formerly Ethyl Corporation).
Petroleum companies also produce, either directly or indirectly, lubricants and 
fuel additives for their own use and also sell additives to others. These       
petroleum companies are also our customers, and some of them sell raw materials 
to us. We believe, based on volume sold, that we are the leading supplier of    
performance additives for lubricants to the petroleum industry.                 

   Our Noveon business faces a variety of competitors in each of our product
lines, but we believe no single company competes with us across all of our      
existing product lines. The specialty chemicals industry is highly fragmented.  
Individual products or service offerings compete on a global, regional and local
level due to the nature of the businesses and products, as well as the          
applications and customers served. The following chart sets forth our principal 
competitors of the Noveon business by product line:                             

                                                        [Enlarge/Download Table]

PRODUCT LINE                                       PRINCIPAL COMPETITORS                    
------------                    ------------------------------------------------------------
                                                                                            
Consumer specialties........... Cognis, CP Kelco, Croda, DSM, FMC, Hercules, ISP, Nihon     
                                Junkayu, Quest, Rhodia, Rohm and Haas, Sensient, Sigma/3V,  
                                Sumitomo Seika, Symrise, Tessenderlo, Velsicol              
Performance coatings........... Avecia, BASF, Bayer, Byk, Ciba, Clariant, Dow Chemical,     
                                Eastman, Johnson Polymer, OMNOVA, Parachem, PolymerLatex,   
                                Reichhold, Rohm and Haas, Tego, UCB                         
Specialty materials............ Atofina, BASF, Bayer, Dow Chemical, Georgia Gulf, Huntsman, 
                                Kaneka, Sekisui Chemical, Victaulic                         

SALES AND MARKETING                                                             

 We primarily market our lubricant and fuel additives products worldwide
through our own direct sales organization. In addition, we use sales agents and 
distributors where necessary. Our additives customers primarily consist of oil  
refiners and independent oil blenders and are located in more than 100          
countries. Our ten largest customers, most of which are international oil       
companies and a number of which are groups of affiliated entities, accounted for
approximately 33% of our pro forma consolidated net sales in 2003.              

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In order to maximize our understanding of customer needs as well as   
emerging trends, our sales and marketing activities for our specialty chemicals 
products are organized by end-use applications. Each sales team includes        
representatives from sales, marketing and research and development.             

 Most of our sales and marketing staff is technically oriented and works
closely with customers to develop products and formulations that deliver the    
desired product attributes. Some of our laboratories are equipped with          
small-scale equipment that replicates our customers' processing capabilities,   
which ensure our solutions are easily and efficiently implemented at our        
customers' facilities.                                                          

Finally, some of our sales and marketing resources are dedicated to   
stimulating end-use demand for our products. For example, in the case of our    
TempRite(R) plumbing, fire sprinkler and industrial piping applications, our    
resources are focused on marketing to building contractors, plumbers,           
distributors and construction code officials to convince them to specify our    
products in their projects or building codes.                                   

RESEARCH, DEVELOPMENT AND TECHNOLOGY                                            

    Technology leadership in design and formulation of additives and specialty
chemicals drives our business. Historically, we have emphasized consistent      
investment in research. Excluding acquisitions, research, development and       
testing expense has consistently been about 8% of sales for the last two        
decades -- higher than most chemical companies. Research expense alone has been 
4.5% to 5.0% of sales annually for the last 10 years. We have developed         
internally a large percentage of the products we manufacture and sell. Our      
internal technical resources encompass chemical synthesis, state-of-the-art     
physical and analytical science, statistical and computer modeling expertise and
extensive applications technology and testing laboratories. We balance          
centralized research facilities with applications technology capabilities that  
are closely tied to their counterparts in the commercial organizations. Our     
technical facilities are located all over the world. We provide tools and       
processes for knowledge sharing and for leveraging our technology globally and  
across product lines.                                                           

   LUBRICANT ADDITIVES.  In our lubricant additives segment, the majority of
the additives we manufacture and sell are developed by our in-house research    
group. Technological advances in materials and in the design of engines and     
other automotive equipment, combined with rising demands for environmental      
protection and fuel economy, require increasingly sophisticated research        
capabilities to meet industry performance standards.                            

  We have technical facilities in Wickliffe, Ohio; Hazelwood, England; and
Kinura, Japan for lubricant additives research. We also conduct a limited       
program of corporate research designed to leverage technology across our product
lines. We maintain mechanical testing laboratories at those three locations,    
equipped with a variety of gasoline and diesel engines, driveline and other     
mechanical equipment to evaluate the performance of additives for lubricants and
fuels. In addition, we make extensive use of independent research firms. Global 
field testing is conducted through various arrangements with fleet operators and
others.                                                                         

We maintain offices in Detroit, Michigan; Hazelwood, England; Paris,  
France; Hamburg, Germany; Shanghai, China; Bombay, India; Tokyo, Japan; and     
Seoul, Korea to maintain close contact with the principal automotive and OEMs of
the world and to keep us abreast of the performance requirements for our        
products. These liaison activities also serve as contacts for cooperative       
development and evaluation of products for future applications.                 

SPECIALTY CHEMICALS.  Our specialty chemicals segment has had a long  
history as an industry innovator, creating proprietary, high-performance        
materials for our customers, including ingredients for personal care products,  
the invention of Carbopol(R) acrylic thickener, additives for coatings and the  
commercial development of TempRite(R) CPVC. We have leveraged our core          
surface-active chemistry into new specialty chemicals and materials markets     
through acquisitions and application technology expertise. Our specialty        
chemical and materials products are derived from a broad range of technology    
platforms developed either internally or externally through licensing,          
acquisition or joint technological alliances with global suppliers and          
customers.                                                                      

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Our primary research facility for our Noveon segment is located in    
Brecksville, Ohio, where we develop new technologies and products and conduct   
applications development and technical service for our customers. We maintain   
technical facilities for personal care in California and for coatings and inks  
in New Jersey and Chicago. For our customers outside of North America, we       
operate regional technical facilities in various locations in Europe and Asia.  

PATENTS.  We own approximately 3,000 patents worldwide relating to our
products and manufacturing processes. Although these domestic and foreign       
patents expire from time to time, we continue to apply for and obtain patent    
protection for new products on an ongoing basis. We believe that, in the        
aggregate, our patents constitute an important asset. However, we do not regard 
our business as being materially dependent upon any single patent or any group  
of related patents. We use patents in both of our reporting segments.           

     RESEARCH, TESTING AND DEVELOPMENT EXPENDITURES.  Our pro forma consolidated
research, testing and development expenditures were $211.7 million in 2003, or  
6.7% of our pro forma consolidated net sales. Our research and development staff
includes approximately 700 professionals, many of whom possess PhDs or          
equivalent degrees, and approximately 450 technical service employees. Our      
research and development staff works with both our sales force and customers to 
use our wide spectrum of technology platforms and processing capabilities to    
enhance our product offerings in the specialty chemicals industry. We have      
developed many of our products in cooperation with our customers, often as a    
result of their specific needs, resulting in long-standing customer             
relationships.                                                                  

RAW MATERIALS                                                                   

     We use a broad variety of specialty and commodity chemical raw materials in
our manufacturing processes, and use oil in processing and blending additives.  
These raw materials are available from several sources. The materials that we   
choose to purchase from a single source generally have long-term supply         
contracts as a basis to guarantee supply reliability. For the most part, our raw
materials are derived from petroleum and petrochemical-based feedstocks.        

Lubricant base oil is our single largest purchased raw material,      
representing about one-third of our purchases, by weight, for the Lubrizol      
Additives segment. Other major categories of raw materials for lubricant        
additives include olefins and esters (approximately 15% of purchases); inorganic
acids, bases and oxides (approximately 6%); and alcohols and glycols            
(approximately 5%). We believe that raw materials derived from petrochemicals   
are approximately 75% of our purchases for the lubricant additives segment. For 
our Noveon segment, no single raw material represents more than 5% of purchases.
The top seven raw materials total about 30% of purchases for Noveon. Principal  
raw materials for the specialty chemicals segment include acrylates for personal
care and coatings, toluene for food and beverages, and PVC, PTMEG, MDI and      
styrene for specialty materials.                                                

ENVIRONMENTAL MATTERS                                                           

  We are subject to foreign, federal, state and local laws and regulations
designed to protect the environment and limit manufacturing wastes and          
emissions. We believe that, as a general matter, our policies, practices and    
procedures are properly designed to prevent unreasonable risk of environmental  
damage and the consequent financial liability to us. Compliance with            
environmental laws and regulations requires continuing management effort and    
expenditures. We have incurred, and will continue to incur, costs and capital   
expenditures in complying with these laws and regulations and to obtain and     
maintain all necessary permits. We believe that the cost of complying with      
environmental laws and regulations will not have a material effect on our       
earnings, liquidity or competitive position, although we cannot provide you     
assurance in that regard.                                                       

    We believe that our business, operations and facilities are being operated
in compliance, in all material respects, with applicable environmental laws and 
regulations, many of which provide for substantial fines, penalties and criminal
sanctions for violations. The operation of manufacturing plants entails         
environmental risks, and we may incur material costs or liabilities in the      
future that could adversely affect us. For example,                             

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we may be required to comply with evolving environmental laws, regulations or   
requirements that may be adopted or imposed in the future or to address newly   
discovered contamination or other conditions or information that require a      
response on our part.                                                           

Among other environmental laws, we are subject to the Comprehensive   
Environmental Response, Compensation and Liability Act of 1980 (commonly known  
as Superfund), under which we have been designated as a "potentially responsible
party" that may be liable for cleanup costs associated with various waste sites,
some of which are on the U.S. Environmental Protection Agency Superfund priority
list. Our experience, consistent with what we believe to be the experience of   
others in similar cases, is that Superfund site liability tends to be           
apportioned among parties based upon the contribution of materials to the       
Superfund site. Accordingly, we measure our liability and carry out our         
financial reporting responsibilities with respect to Superfund sites based upon 
this standard, even though Superfund site liability is technically joint and    
several in nature. We accrue for estimated environmental liabilities with       
charges to cost of sales. We believe our environmental accrual is adequate to   
provide for our portion of the costs of all such known environmental            
liabilities. Based upon consideration of currently available information, we    
believe liabilities for environmental matters will not have a material adverse  
affect on our financial position, operating results or liquidity, although we   
cannot provide you assurance in that regard.                                    

Noveon International is the beneficiary of agreements with Goodrich   
Corporation that require Goodrich to indemnify Noveon International for, among  
other things, certain environmental liabilities and costs relating to facilities
of the former Performance Materials Segment of Goodrich. However, we cannot     
assure you that Goodrich or other third party indemnitors will, in the future,  
honor their indemnification obligations to us.                                  

EMPLOYEES                                                                       

At July 31, 2004, we had approximately 7,700 employees of which       
approximately 56% were in the United States. We believe that our relationship   
with our employees is good. Seven of our U.S. sites, and approximately 11% of   
our domestic employees, are organized by labor unions with collective bargaining
agreements that are subject to periodic renegotiation. The durations of these   
collective bargaining agreements vary from three to five years, with four       
agreements expiring in 2004 and 2005. We expect to enter into new agreements    
with these unions as the current agreements expire.                             

MANUFACTURING AND PROPERTIES                                                    

     We possess global manufacturing, laboratory and sales and technical service
facilities enabling us to provide customers with worldwide service and a        
reliable supply of products. Our corporate headquarters is located in Wickliffe,
Ohio. We have manufacturing facilities, laboratories and offices, which we own  
or lease, at 40 sites in the United States and 56 sites in 25 other countries.  
We also have entered into long-term contracts for the exclusive use of major    
marine terminal facilities at various ports and leases for storage facilities.  
We maintain a capital expenditure program to support our operations and believe 
our facilities are adequate for our present operations and for the foreseeable  
future.                                                                         

   We supply our customers abroad through exports from the United States and
from overseas manufacturing plants. We believe the political and economic risks 
related to our foreign operations are mitigated due to the stability of the     
countries in which our largest foreign operations are located.                  

LEGAL PROCEEDINGS                                                               

We are engaged in legal proceedings arising in the ordinary course of 
business. We believe that the ultimate outcome of these proceedings will not    
have a material adverse impact on our results of operations, financial position 
or cash flows.                                                                  

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MANAGEMENT

    The following table shows certain information regarding each of Lubrizol's
executive officers.                                                             

                                                        [Enlarge/Download Table]

NAME                                       AGE                   POSITION                
----                                       ---                   --------                
                                                                                         
William G. Bares.......................... 63   Chairman of the Board                    
James L. Hambrick......................... 49   President and Chief Executive Officer    
Joseph W. Bauer........................... 51   Vice President and General Counsel       
Donald W. Bogus........................... 57   Senior Vice President and                
                                                President -- Noveon Segment              
Charles P. Cooley......................... 49   Senior Vice President and Chief Financial
                                                Officer                                  
W. Scott Emerick.......................... 40   Controller                               
Stephen F. Kirk........................... 55   Senior Vice President and                
                                                President -- Lubrizol Additives Segment  
Gregory R. Lewis.......................... 45   Vice President and General               
                                                Counsel -- Noveon Segment                
Gregory P. Lieb........................... 51   Vice President, Finance -- Lubrizol      
                                                Additives Segment                        
Annora C. Marcus.......................... 42   Assistant Secretary                      
Scott A. McKinley......................... 43   Vice President, Finance -- Noveon Segment
Mark W. Meister........................... 50   Vice President and Chief Ethics Officer  
Larry Norwood............................. 54   Vice President, Operations -- Lubrizol   
                                                Additives Segment                        
Rosanne S. Potter......................... 45   Treasurer                                
Leslie M. Reynolds........................ 44   Corporate Secretary                      
Patrick H. Saunier........................ 48   Vice President                           
Jeffrey A. Vavruska....................... 44   Chief Tax Officer                        
Joanne Wanstreet.......................... 52   Vice President                           

WILLIAM G. BARES is chairman of the board of directors of The Lubrizol
Corporation. Mr. Bares joined the Company as a process development engineer in  
1963. He was appointed director of process development in 1972, vice president  
in 1978, executive vice president in 1980, president in 1982, chief operating   
officer in 1987, chief executive officer in 1996 and chairman in 1996. In April 
2004, Mr. Bares stepped down from his role as chief executive officer. He       
continues as an employee of the Company. In addition to his corporate           
responsibilities, Mr. Bares is a director of Oglebay Norton Company, KeyCorp,   
Applied Industrial Technologies and Cleveland Tomorrow/Greater Cleveland        
Partnership. He is also an executive board member for the Boy Scouts of America 
Greater Western Reserve Council, serves as a trustee for the Northeast Ohio     
Council on Higher Education and holds an honorary position on the local Learning
About Business advisory board. He holds a BS degree in chemical engineering from
Purdue University and received an MBA from Case Western Reserve University.     

    JAMES L. HAMBRICK is president and chief executive officer of The Lubrizol
Corporation. He was elected president in January 2003 and chief executive       
officer in April 2004. Mr. Hambrick began his career at Lubrizol's Deer Park,   
Texas plant in 1973 as a co-operative education student and was hired full time 
in 1978. His career has encompassed a variety of responsible positions in       
operations, marketing, technology and business development. He led international
market development activities in the former Soviet Union and China for most of  
the 1990s. He was global business manager for engine oils from 1998 to 1999, and
was elected an officer of the Company in April 2000. As vice president for      
Asia-Pacific, he was based in Singapore and was responsible for leading the     
Company's activities in the Far East region. Mr. Hambrick                       

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holds a BS degree in chemical engineering from Texas A&M University. He is a    
member of the American Institute of Chemical Engineers.                         

JOSEPH W. BAUER is vice president and general counsel of The Lubrizol 
Corporation. He joined Lubrizol in 1985 as litigation counsel, was named general
counsel of the Company in 1991 and elected an officer in 1992. Prior to joining 
Lubrizol, Mr. Bauer practiced commercial litigation with the firm of Jones, Day,
Reavis & Pogue from 1981 to 1985. In recent years, Mr. Bauer has presented to   
various groups of lawyers and judges including the Canadian-U.S. Law Institute, 
The American Corporate Counsel Association, the Ohio Judicial Conference and    
various law firms. He holds BA and JD degrees from The University of Toledo.    

  DONALD W. BOGUS is senior vice president of The Lubrizol Corporation and
president of the Noveon segment. He joined Lubrizol in 2000 as vice president   
responsible for the Fluid Technologies for Industry segment. He also led        
Lubrizol's mergers and acquisitions committee. Prior to joining Lubrizol, Mr.   
Bogus was an executive officer at PPG Industries where he was vice president of 
specialty chemicals and vice president of industrial coatings. Mr. Bogus holds a
BS degree in biology/chemistry from Baldwin Wallace College. Mr. Bogus is a     
member of Baldwin Wallace's Board of Trustees and a Committee Member, and is on 
their business division's Business Advisory Board.                              

   CHARLES P. COOLEY is senior vice president and chief financial officer of
The Lubrizol Corporation. His responsibilities include treasury, planning,      
mergers and acquisitions, financial reporting, internal audit, tax and risk     
management. Mr. Cooley joined Lubrizol in 1998. Previously, he spent 15 years   
with the Atlantic Richfield Company in Los Angeles in a variety of financial    
positions, including vice president, finance for ARCO Products Company and      
assistant treasurer for corporate finance. From 1978 to 1981, he was a          
commercial loan officer with Manufacturers Hanover Trust Company in New York    
City. Mr. Cooley holds a BA degree in philosophy from Yale University and       
received an MBA from the Amos Tuck School of Business at Dartmouth College.     

W. SCOTT EMERICK joined The Lubrizol Corporation as controller in June
2004. He has held positions at Ernst & Young LLP, Barmet Aluminum, Flexalloy    
Textron and, most recently, at Noveon International as director of accounting   
and external financial reporting and director of finance -- TempRite(R)         
products. Mr. Emerick holds a BS degree in accounting from The University of    
Akron.                                                                          

  STEPHEN F. KIRK is senior vice president of The Lubrizol Corporation and
president of the Lubrizol Additives segment. Mr. Kirk joined Lubrizol as a      
process development engineer in 1972. He has served in a variety of sales and   
marketing positions, including vice president of marketing, vice president of   
sales and, in 1998, vice president of sales and marketing. He is on the board of
directors of the National Petrochemical and Refiners Association and is past    
chairman of the American Chemistry Council Petroleum Additives Panel. He is also
a member of the Society of Automotive Engineers, American Petroleum Institute   
and American Institute of Chemical Engineers. He is a director of Vocational    
Guidance Service, and he has been active in Boy Scouts of America. Mr. Kirk     
holds BS and ME degrees in chemical engineering from Cornell University and     
received an MBA from Cleveland State University.                                

GREGORY R. LEWIS is vice president and general counsel to the Noveon  
segment. Mr. Lewis joined Lubrizol in 1984 as a process development engineer,   
after working two years at Gulf Oil and four years as a cooperative education   
student at Lubrizol. While working, he obtained his law degree and, in 1992, he 
transferred to Lubrizol's legal division. He has held positions as assistant to 
the general counsel, assistant secretary of Lubrizol and vice president of Asia 
Pacific, based in Singapore. He was appointed an officer in 2001. Mr. Lewis     
holds a BS degree in chemical engineering from Purdue University and a JD degree
from Cleveland Marshall College of Law.                                         

 GREGORY P. LIEB is vice president of finance for the Lubrizol Additives
segment. He has spent twenty years with Lubrizol in the finance division. Most  
recently, he was controller -- commercial analysis and support. Mr. Lieb holds a
BBA degree in accounting from Ohio University.                                  

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  ANNORA C. MARCUS is assistant secretary of The Lubrizol Corporation. Ms.
Marcus joined Lubrizol in 1989 as a domestic tax analyst and has held various   
domestic and international tax-related positions in the Company's finance       
division, most recently as Director -- Foreign Audits/Transfer Pricing. Ms.     
Marcus holds a BSBA in accounting from John Carroll University. Ms. Marcus is a 
member of the Tax Executives Institute -- European Chapter.                     

     SCOTT A. MCKINLEY is vice president of finance for the Noveon segment. From
2001 to 2004, he was vice president and controller for Noveon International.    
Previously, he was the director, financial planning and analysis, for the       
Performance Materials Segment of Goodrich Corporation. Prior to joining Goodrich
in late 1998, Mr. McKinley spent 15 years in a variety of financial roles with  
the General Electric Company, including assignments at GE Power Systems,        
Aerospace, Aircraft Engines, Transportation and the corporate headquarters. Mr. 
McKinley holds a BBA degree from the University of Iowa.                        

MARK W. MEISTER has been the vice president of human resources for The
Lubrizol Corporation since 1993 and chief ethics officer since 1994. He oversees
the Company's global human resource function and has responsibility for the     
ethical and legal conduct program. Mr. Meister has 25 years of experience in the
human resources field, having worked for firms including The Hoover Company and 
Regal Ware and as director of human resources for Agrigenetics, a former        
subsidiary of Lubrizol. He holds a BA degree from Marquette University and      
received an MBA from Kent State University. Mr. Meister is active in the Ethics 
Officers Association and the Josephson Institute and serves on the Board of     
Trustees for the Council for Ethics in Economics.                               

  LARRY NORWOOD is vice president of operations for the Lubrizol Additives
segment. He was appointed an officer in April 2004. Mr. Norwood joined Lubrizol 
in 1973. He has held various management roles within operations at Lubrizol's   
headquarters in Wickliffe, Ohio and the manufacturing facilities in Deer Park   
and Bayport, Texas. Most recently, he has served as general manager of the Texas
facilities. Mr. Norwood received a BS degree in chemical engineering from Lamar 
University.                                                                     

ROSANNE S. POTTER is treasurer of The Lubrizol Corporation. She joined
Lubrizol in 2001. Her previous 20 years of treasury assignments include         
extensive experience in the specialty chemical industry. She was vice president 
and treasurer of Dexter Corporation, treasurer of BetzDearborn, Inc. and        
assistant treasurer of Morton International. Ms. Potter holds a BA in economics 
and French from Boston College and an MBA in finance from Loyola University.    

LESLIE M. REYNOLDS is corporate secretary and counsel for The Lubrizol
Corporation. Ms. Reynolds joined Lubrizol in 1991 serving as legal counsel in   
the areas of employee benefits, employment law and securities law. She served as
assistant secretary from 1997 until her appointment as corporate secretary in   
April 2001. Prior to joining Lubrizol, Ms. Reynolds was an attorney for Squire, 
Sanders & Dempsey L.L.P. where she specialized in employee benefits. She        
received a BS in business administration with a major in accounting from Indiana
University and a JD degree from the University of Illinois.                     

   PATRICK H. SAUNIER is vice president for information systems and business
processes for The Lubrizol Corporation. Mr. Saunier joined Lubrizol's           
manufacturing facility in Rouen, France in 1981. He has held a variety of       
positions in operations, marketing and information technology based in France,  
the U.K. and the U.S. In the late 1990s, he led the implementation of Lubrizol's
enterprise resource planning system for the U.S. and Europe. Since 1999, he has 
led the European shared services organization. Mr. Saunier received his degree  
in chemical engineering from Institut National des Sciences Appliquees in       
Toulouse and his degree in business management from Institut d'Administration   
des Entreprises in Toulouse.                                                    

     JEFFREY A. VAVRUSKA joined The Lubrizol Corporation as chief tax officer in
2004. Previously he worked 18 years in tax roles at American Greetings          
Corporation, where he was executive director of tax, Cleveland Cliffs, Inc., BP 
America and Price Waterhouse. Mr. Vavruska holds a BA degree in business        
administration with a major in accounting from Cleveland State University and a 
JD from Cleveland Marshall College of Law.                                      

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JOANNE WANSTREET is vice president with responsibility for global     
communications and investor relations for The Lubrizol Corporation. Ms.         
Wanstreet joined Lubrizol in 1987. She has held a variety of positions in       
marketing, commercial development, R&D management and finance. Prior to her 2002
appointment as vice president, she was manager for investor relations. She      
worked at McKinsey and Company before joining Lubrizol. Ms. Wanstreet holds a BA
degree in English from Case Western Reserve University and an MBA from the      
University of Michigan.                                                         

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DESCRIPTION OF OTHER INDEBTEDNESS 

NEW CREDIT FACILITY                                                             

     We entered into a new credit agreement on August 24, 2004 pursuant to which
we and our designated subsidiaries may borrow up to $500.0 million under a      
five-year unsecured revolving credit facility and $575.0 million under an       
unsecured amortizing term note. Each of our wholly owned direct and indirect    
domestic subsidiaries will unconditionally guarantee all of our obligations     
under the credit agreement. We will not draw on the revolving credit facility or
the term note until the effective date of the facility, which is expected to    
occur concurrently with the closing of this offering. We expect to borrow the   
full amount under the term note on the closing date of this offering. We do not 
expect to borrow under the revolving credit facility at that time. Our access to
these facilities is conditioned on the termination of our existing revolving    
credit facility and our temporary bridge facility.                              

 We must pay interest no less frequently than quarterly on the revolving
credit facility and term note. The interest rate for base rate advances will be 
based on a fluctuating rate equal to a base rate plus the applicable margin set 
forth in the credit agreement. The interest rate for Eurodollar rate advances   
will be based on a periodic fixed rate equal to LIBOR plus the applicable margin
set forth in the credit agreement. We must repay the term note in quarterly     
installments commencing on March 31, 2005, with the final payment due on August 
24, 2009. We must repay advances under the revolving credit facility by August  
24, 2009. Advances under the revolving credit facility and the term note may be 
prepaid without penalty. In certain asset sales or other dispositions, we will  
be required to prepay an aggregate principal amount of the term note advances   
equal to the net cash proceeds from such sales or other dispositions.           

So long as any borrowings remain unpaid, any letters of credit remain 
outstanding or any lender has any commitment pursuant to the credit agreement,  
we must maintain:                                                               

  - a ratio of consolidated debt to consolidated EBITDA (as defined in the
   credit agreement) for the most recently completed twelve-month period
       ending on or prior to the last day of each fiscal quarter set forth below
of not greater than the ratio set forth opposite such period:     

                                                                [Download Table]

FISCAL QUARTER ENDING                                            RATIO  
---------------------                                          ---------
                                                                        
September 30, 2004..........................................   4.75 to 1
December 31, 2004...........................................   4.50 to 1
March 31, 2005..............................................   4.25 to 1
June 30, 2005...............................................   4.25 to 1
September 30, 2005..........................................   4.00 to 1
December 31, 2005...........................................   3.75 to 1
Each fiscal quarter ending after December 31, 2005..........   3.50 to 1

   - a ratio of consolidated EBITDA (as defined in the credit agreement) for
   the most recently completed four quarters to interest payable on, and
amortization of debt discount in respect of, all of our and our   
subsidiaries' debt of not less than 3.50 to 1.00.                 

    If any events of default have occurred and are continuing under the credit
agreement, then the agent may terminate the commitments and declare all advances
and other monies borrowed to be due and payable by us.                          

OUTSTANDING 5.875% NOTES AND 7.25% DEBENTURES                                   

   In November 1998, we issued notes having an aggregate principal amount of
$200.0 million. The notes are unsecured senior obligations and bear interest at 
an annual rate of 5.875% per annum, which is payable semi-annually on June 1 and
December 1 of each year. The notes mature on December 1, 2008. The notes have no
sinking fund requirement but are redeemable, in whole or in part, at the greater
of 100% of the                                                                  

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principal amount (plus accrued interest) of the notes to be redeemed and the sum
of the present value of the remaining scheduled payments discounted at a rate   
equal to the sum of the applicable Treasury rate plus 15 basis points.          

In June 1995, we issued debentures in an aggregate principal amount of
$100.0 million. These debentures are unsecured senior obligations and bear      
interest at an annual rate of 7.25%, which is payable semi-annually on June 15  
and December 15 of each year. The debentures mature on June 15, 2025. The       
debentures are not redeemable prior to maturity and are not subject to any      
sinking fund requirements.                                                      

  The indentures that govern the 5.875% notes and 7.25% debentures contain
restrictive covenants regarding, among other things, limitations on sale and    
leaseback transactions and restrictions on our ability to complete mergers,     
consolidations or a sale of all or substantially all of our assets. The         
indentures also include certain events of default, including, but not limited   
to: failure to pay principal or interest; covenant defaults; and certain        
bankruptcy and similar events relating to us.                                   

     In connection with the issuance of the notes and debentures offered hereby,
we expect to amend and restate the indentures that govern the 5.875% notes and  
7.25% debentures to include the guarantees of such obligations, on an unsecured 
and unsubordinated basis, by each of our wholly owned direct and indirect       
domestic subsidiaries. The amended and restated indentures will also include    
provisions, substantially similar to those contained in the indenture governing 
the notes and debentures offered hereby, that, among other things:              

- require each of our wholly owned direct and indirect domestic       
  subsidiaries that guarantee any of our indebtedness to guarantee the
5.875% notes and 7.25% debentures; and                            

- restrict our subsidiary guarantors from effecting any merger,       
   consolidation or sale of all or substantially all of their respective
      assets (other than to us or another guarantor or, in the case of foreign
     assets, any of our subsidiaries) unless the subsidiary guarantor is the
      surviving corporation in the merger or consolidation or the successor in
      any such transaction assumes the obligations of the subsidiary guarantor
under the 5.875% notes and 7.25% debentures.                      

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DESCRIPTION OF THE NOTES AND DEBENTURES 

    We have summarized provisions of the notes and debentures below. The notes
and debentures constitute the debt securities described in the accompanying     
prospectus. This summary supplements and, to the extent inconsistent therewith, 
replaces the description of the general terms and provisions of the "Description
of Debt Securities" in the accompanying prospectus.                             

    The 4.625% Notes due 2009, the 5.5% Notes due 2014 and the 6.5% Debentures
due 2034 will be issued as separate series of debt securities under an indenture
to be entered into among Lubrizol, the guarantors and Wells Fargo Bank, National
Association, as trustee. This indenture constitutes the indenture described in  
the accompanying prospectus. The following is a summary of the material terms   
and provisions of the indenture and the notes and debentures and does not       
include all the material provisions of the indenture. We urge you to read the   
indenture because it defines your rights. You may obtain a copy of the indenture
from Lubrizol without charge. See the section of the accompanying prospectus    
titled "Where You Can Find More Information."                                   

GENERAL                                                                         

The 2009 Notes initially will be limited to $400.0 million aggregate  
principal amount and will mature on October 1, 2009. The 2014 Notes initially   
will be limited to $450.0 million aggregate principal amount and will mature on 
October 1, 2014. The debentures initially will be limited to $300.0 million     
aggregate principal amount and will mature on October 1, 2034. We may reopen    
each series of notes and debentures and issue additional notes or debentures of 
such series or establish additional terms of such series without consent from   
the holders. Interest on the notes and debentures will accrue from September 28,
2004, or from the most recent interest payment date to which interest has been  
paid or duly provided for. In each case, we:                                    

     - will pay interest on the notes and debentures semiannually on April 1 and
October 1 of each year, commencing April 1, 2005;                 

- will pay interest to the person in whose name a note or debenture is
       registered at the close of business on March 15 or September 15 preceding
the interest payment date;                                        

     - will compute interest on the basis of a 360-day year consisting of twelve
30-day months;                                                    

- will make payments on the notes and debentures at the offices of the
trustee; and                                                      

- may make payments by wire transfer for notes and debentures held in 
      book-entry form or by check mailed to the address of the person entitled
to the payment as it appears in the security register.            

    If any interest payment date or maturity or redemption date falls on a day
that is not a business day, the required payment shall be made on the next      
business day as if it were made on the date such payment was due and no interest
shall accrue on the amount so payable from and after such interest payment date 
or maturity or redemption date, as the case may be, to such next business day.  
"Business day" means any day other than a Saturday, Sunday or other day on which
banking institutions in New York City are authorized or obligated by law,       
regulation or executive order to close.                                         

We will issue the notes and debentures only in fully registered form, 
without coupons, in denominations of $1,000 and any integral multiple thereof.  
The notes and debentures will not have the benefit of any sinking fund.         

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OPTIONAL REDEMPTION                                                             

     We may redeem the notes and debentures, in whole or in part, at our option,
at any time at a redemption price equal to the greater of:                      

   - 100% of the principal amount of the notes or debentures to be redeemed;
and                                                               

 - as determined by a Quotation Agent (as defined below), the sum of the
 present values of the remaining scheduled payments of principal and
     interest on the notes or debentures, as the case may be, to be redeemed
    (not including any portion of such payments of interest accrued to the
    date of redemption), discounted to the redemption date on a semiannual
       basis (assuming a 360-day year consisting of twelve 30-day months) at the
   Adjusted Treasury Rate (as defined below) plus 25 basis points in the
       case of the 2009 Notes, 30 basis points in the case of the 2014 Notes and
35 basis points in the case of the debentures;                    

plus, in each case, accrued and unpaid interest on the notes or debentures to be
redeemed to the redemption date.                                                

  "Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the      
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue   
(expressed as a percentage of its principal amount) equal to the Comparable     
Treasury Price for such redemption date.                                        

"Comparable Treasury Issue" means the United States Treasury security 
selected by a Quotation Agent as having a maturity comparable to the remaining  
term of the notes or debentures to be redeemed.                                 

     "Comparable Treasury Price" means, with respect to any redemption date, (1)
the average of the Reference Treasury Dealer Quotations for such redemption     
date, after excluding the highest and lowest such Reference Treasury Dealer     
Quotations, or (2) if we obtain fewer than three such Reference Treasury Dealer 
Quotations, the average of all such quotations.                                 

"Quotation Agent" means the Reference Treasury Dealer appointed by    
Lubrizol.                                                                       

     "Reference Treasury Dealer" means (1) Citigroup Global Markets Inc. and its
successors; provided, however, that if any of the foregoing shall cease to be a 
primary U.S. government securities dealer in New York City (a "Primary Treasury 
Dealer"), we shall substitute therefor another Primary Treasury Dealer; and (2) 
at least two other Primary Treasury Dealers selected by Lubrizol.               

"Reference Treasury Dealer Quotations" means, with respect to each    
Reference Treasury Dealer and any redemption date, the average, as determined by
the trustee, of the bid and ask prices for the Comparable Treasury Issue        
(expressed in each case as a percentage of its principal amount) quoted in      
writing to the trustee by such Reference Treasury Dealer at 5:00 p.m. on the    
third business day preceding such redemption date.                              

     We will give notice to DTC of any redemption we propose to make at least 30
days, but not more than 60 days, before the redemption date. If we redeem only  
some of the notes or debentures of a particular series, it is the practice of   
DTC to determine by lot the amount of notes or debentures of such series to be  
redeemed of each of its participating institutions. Notice by DTC to these      
participants and by participants to "street name" holders of indirect interests 
in the notes or debentures will be made according to arrangements among them and
may be subject to statutory or regulatory requirements.                         

Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the notes or debentures or    
portions of the notes or debentures called for redemption.                      

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RANKING                                                                         

   The notes and debentures will be unsecured and unsubordinated obligations
of Lubrizol and will rank equally in right of payment with all of Lubrizol's    
other unsecured and unsubordinated indebtedness. The guarantees will be         
unsecured and unsubordinated obligations of the guarantors and will rank equally
in right of payment with all of the guarantors' other unsecured and             
unsubordinated indebtedness.                                                    

NOTICES                                                                         

   We will mail notices and communications to a holder's address as shown on
the security register.                                                          

PAYING AGENTS AND TRANSFER AGENTS                                               

   The trustee will be the paying agent and transfer agent for the notes and
debentures.                                                                     

THE TRUSTEE                                                                     

    Wells Fargo Bank, National Association is the trustee under the indenture.
The trustee and its affiliates also perform certain commercial banking services 
for us for which they receive customary fees.                                   

BOOK-ENTRY DELIVERY AND SETTLEMENT                                              

     We will issue the notes and debentures in the form of one or more permanent
global securities in definitive, fully registered, book-entry form. The global  
securities will be deposited with or on behalf of DTC and registered in the name
of Cede & Co., as nominee of DTC, or will remain in the custody of the trustee  
in accordance with the FAST Balance Certificate Agreement between DTC and the   
trustee.                                                                        

     If you wish to hold securities through the DTC system, you must either be a
direct participant in DTC or hold through a direct participant in DTC. Direct   
participants include securities brokers and dealers, banks, trust companies,    
clearing corporations and certain other organizations that have accounts with   
DTC. Euroclear and Clearstream participate in DTC through their New York        
depositaries. Indirect participants are securities brokers and dealers, banks   
and trust companies that do not have an account with DTC, but that clear through
or maintain a custodial relationship with a direct participant. Thus, indirect  
participants have access to the DTC system through direct participants.         

If you so choose, you may hold your beneficial interests in the global
security through Euroclear or Clearstream, or indirectly through organizations  
that are participants in such systems. Euroclear and Clearstream will hold their
participants' beneficial interests in the global security in their customers'   
securities accounts with their depositaries. These depositaries of Euroclear and
Clearstream in turn will hold such interests in their customers' securities     
accounts with DTC.                                                              

  In sum, you may elect to hold your beneficial interests in the notes and
debentures:                                                                     

- in the United States, through DTC;                                  

- outside the United States, through Euroclear or Clearstream; or     

- through organizations that participate in such systems.             

 DTC may grant proxies or authorize its participants (or persons holding
beneficial interests in the global securities through these participants) to    
exercise any rights of a holder or take any other actions that a holder is      
entitled to take under the indenture, the notes or the debentures. The ability  
of Euroclear or Clearstream to take actions as a holder under the notes, the    
debentures or the indenture will be limited by the ability of their respective  
depositaries to carry out such actions for them through DTC. Euroclear and      
Clearstream will take such actions only in accordance with their respective     
rules and procedures.                                                           

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CLEARANCE AND SETTLEMENT                                                    

   The information in this section concerning DTC, Euroclear and Clearstream
and their book-entry systems has been obtained from sources we believe to be    
reliable, but we make no representation or warranty with respect to this        
information. DTC, Euroclear and Clearstream are under no obligation to perform  
or continue to perform the procedures described below, and they may modify or   
discontinue them at any time. We and the trustee will not be responsible for    
DTC's, Euroclear's or Clearstream's performance of their obligations under their
rules and procedures, or for the performance by direct or indirect participants 
of their obligations under the rules and procedures of the clearance systems.   

    Transfers within DTC, Euroclear and Clearstream will be in accordance with
the usual rules and operating procedures of the relevant system. Cross-market   
transfers between investors who hold or who will hold any series of notes or    
debentures through DTC and investors who hold or will hold any series of notes  
or debentures through Euroclear or Clearstream will be effected in DTC through  
the respective depositaries of Euroclear and Clearstream.                       

THE CLEARING SYSTEMS                                                            

THE DEPOSITORY TRUST COMPANY                                                

DTC has advised us as follows:                                        

- DTC is a limited-purpose trust company organized under the New York 
      Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing  
     corporation" within the meaning of the New York Uniform Commercial Code
    and a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934;                                             

- DTC holds securities that its participants deposit with DTC and     
       facilitates the settlement among participants of securities transactions,
       such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, thereby
    eliminating the need for physical movement of securities certificates;

- Direct participants include securities brokers and dealers, trust   
companies, clearing corporations and other organizations;         

   - DTC is owned by a number of its direct participants and by the New York
      Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc.;                          

   - Access to the DTC system is also available to others such as securities
  brokers and dealers, banks and trust companies that clear through or
 maintain a custodial relationship with a direct participant, either
directly or indirectly; and                                       

 - The rules applicable to DTC and its participants are on file with the
SEC.                                                              

EUROCLEAR                                                                   

   Euroclear was created in 1968 to hold securities for its participants and
to clear and settle transactions between its participants through simultaneous  
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous        
transfers of securities and cash. Transactions may now be settled in many       
currencies, including U.S. dollars and euros. Euroclear includes various other  
services, including securities lending and borrowing, and interfaces with       
domestic markets in several countries.                                          

Euroclear is operated by Euroclear Bank S.A./N.V. (the "Euroclear     
Operator"), under contract with Euroclear Clearance System, S.C., a Belgian     
cooperative corporation (the "Cooperative"). The Euroclear Operator conducts all
operations, and all Euroclear securities clearance accounts and Euroclear cash  
accounts                                                                        

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are accounts with the Euroclear Operator, not the Cooperative. The Cooperative  
establishes policy for Euroclear on behalf of Euroclear participants. Euroclear 
participants include banks (including central banks), the dealer manager, other 
securities brokers and dealers and other professional financial intermediaries. 
Indirect access to Euroclear is also available to others that clear through or  
maintain a custodial relationship with a Euroclear participant, either directly 
or indirectly. Euroclear is an indirect participant in DTC.                     

    Because the Euroclear Operator is a Belgian banking corporation, Euroclear
is regulated and examined by the Belgian Banking and Finance Commission and the 
National Bank of Belgium.                                                       

     Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the     
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Euroclear Terms and Conditions"). The Euroclear Terms and   
Conditions govern transfers of securities and cash within Euroclear, withdrawals
of securities and cash from Euroclear, and receipts of payments with respect to 
securities in Euroclear. All securities in Euroclear are held on a fungible     
basis without attribution of specific securities clearance accounts. The        
Euroclear Operator acts under the terms and conditions only on behalf of        
Euroclear participants and has no record of or relationship with persons holding
securities through Euroclear participants.                                      

Distributions with respect to notes and debentures held beneficially  
through Euroclear will be credited to the cash accounts of Euroclear            
participants in accordance with the Euroclear Terms and Conditions, to the      
extent received by the depositary for Euroclear.                                

CLEARSTREAM                                                                 

    Clearstream is incorporated under the laws of Luxembourg as a professional
depositary.                                                                     

Clearstream holds securities for its participating organizations and  
facilitates the clearance and settlement of securities transactions between its 
participants through electronic book-entry changes in accounts of its           
participants, thereby eliminating the need for physical movement of             
certificates. Clearstream provides to its participants, among other things,     
services for safekeeping, administration, clearance and settlement of           
internationally traded securities and securities lending and borrowing.         

Clearstream interfaces with domestic markets in several countries.    
Clearstream has established an electronic bridge with Euroclear Bank S.A./N.V., 
the operator of the Euroclear system, to facilitate settlement of trades between
Clearstream and Euroclear. As a professional depositary, Clearstream is subject 
to regulation by the Luxembourg Commission for the Supervision of the Financial 
Sector. Clearstream participants are financial institutions around the world,   
other securities brokers and dealers, banks, trust companies and clearing       
corporations and certain other organizations. In the United States, Clearstream 
participants are limited to securities brokers and dealers and banks. Indirect  
access to Clearstream is also available to others that clear through or maintain
a custodial relationship with a Clearstream participant, either directly or     
indirectly.                                                                     

Distributions with respect to notes and debentures held beneficially  
through Clearstream will be credited to cash accounts of Clearstream            
participants in accordance with its rules and procedures, to the extent received
by the depositary for Clearstream.                                              

INITIAL SETTLEMENT                                                              

We expect that under procedures established by DTC:                   

     - upon deposit of the global securities with DTC or its custodian, DTC will
credit on its internal system the accounts of direct participants 
      designated by the underwriters with portions of the principal amounts of
the global securities; and                                        

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- ownership of the securities will be shown on, and the transfer of   
    ownership thereof will be effected only through, records maintained by
       DTC or its nominee, with respect to interests of direct participants, and
the records of direct and indirect participants, with respect to  
interests of persons other than participants.                     

  Euroclear and Clearstream will hold omnibus positions on behalf of their
participants through customers' securities accounts for Euroclear and           
Clearstream on the books of their respective depositaries, which in turn will   
hold positions in customers' securities accounts in the depositaries' names on  
the books of DTC.                                                               

     The notes and debentures that we issue in this offering will be credited to
the securities custody accounts of persons who hold those global securities     
through DTC (other than through accounts at Euroclear and Clearstream) on the   
closing date and to persons who hold those global securities through Euroclear  
or Clearstream on the business day following the closing date.                  

     So long as DTC or its nominee is the registered owner of a global security,
DTC or that nominee will be considered the sole owner or holder of the notes or 
debentures represented by that global security for all purposes under the       
indenture and under the notes and debentures. Except as provided below, owners  
of beneficial interests in a global security will not be entitled to have notes 
or debentures, as the case may be, represented by that global security          
registered in their names, will not receive or be entitled to receive physical  
delivery of certificated notes and will not be considered the owners or holders 
thereof under the indenture or under the notes or debentures for any purpose,   
including with respect to the giving of any direction, instruction or approval  
to the trustee. Accordingly, each holder owning a beneficial interest in a      
global security must rely on the procedures of DTC and, if that holder is not a 
direct or indirect participant, on the procedures of the participant through    
which that holder owns its interest, to exercise any rights of a holder of notes
or debentures, as the case may be, under the indenture or the global security.  

None of Lubrizol, the guarantors or the trustee will have any         
responsibility or liability for any aspect of the records relating to or        
payments made on account of notes or debentures by DTC, or for maintaining,     
supervising or reviewing any records of DTC relating to the notes or debentures.

   Payments on the notes and debentures represented by the global securities
will be made to DTC or its nominee, as the case may be, as the registered owner 
thereof. We expect that DTC or its nominee, upon receipt of any payment on the  
notes or debentures represented by a global security, will credit participants' 
accounts with payments in amounts proportionate to their respective beneficial  
interests in the global security as shown in the records of DTC or its nominee. 
We also expect that payments by participants to owners of beneficial interests  
in the global security held through such participants will be governed by       
standing instructions and customary practice as is now the case with securities 
held for the accounts of customers registered in the names of nominees for such 
customers. The participants will be responsible for those payments.             

   Payments on the notes and debentures represented by the global securities
will be made in immediately available funds. Transfers between participants in  
DTC will be effected in accordance with DTC rules and will be settled in        
immediately available funds.                                                    

TRANSFERS WITHIN AND BETWEEN DTC, EUROCLEAR AND CLEARSTREAM                     

TRADING BETWEEN DTC PURCHASERS AND SELLERS                                  

     DTC participants will transfer interests in the securities among themselves
in the ordinary way according to DTC rules governing global security issues. The
laws of some states require certain purchasers of securities to take physical   
delivery of the securities in definitive form. These laws may impair your       
ability to transfer beneficial interests in the global security or securities to
such purchasers. DTC can act only on behalf of its direct participants, who in  
turn act on behalf of indirect participants and certain banks. Thus, your       
ability to pledge a beneficial interest in the global security or securities to 
persons that do not participate in                                              

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the DTC system, and to take other actions, may be limited because you will not  
possess a physical certificate that represents your interest.                   

TRADING BETWEEN EUROCLEAR AND/OR CLEARSTREAM PARTICIPANTS                   

  Participants in Euroclear and Clearstream will transfer interests in the
securities among themselves in the ordinary way according to the rules and      
operating procedures of Euroclear and Clearstream governing conventional        
eurobonds.                                                                      

TRADING BETWEEN A DTC SELLER AND A EUROCLEAR OR CLEARSTREAM PURCHASER       

When the securities are to be transferred from the account of a DTC   
participant to the account of a Euroclear or Clearstream participant, the       
purchaser must first send instructions to Euroclear or Clearstream through a    
participant at least one business day prior to the closing date. Euroclear or   
Clearstream will then instruct its depositary to receive the securities and make
payment for them. On the closing date, the depositary will make payment to the  
DTC participant's account and the securities will be credited to the            
depositary's account. After settlement has been completed, DTC will credit the  
securities to Euroclear or Clearstream. Euroclear or Clearstream will credit the
securities, in accordance with its usual procedures, to the participant's       
account, and the participant will then credit the purchaser's account. These    
securities credits will appear the next day (European time) after the closing   
date. The cash debit from the account of Euroclear or Clearstream will be       
back-valued to the value date (which will be the preceding day if settlement    
occurs in New York). If settlement is not completed on the intended value date  
(i.e., the trade fails), the cash debit will instead be valued at the actual    
closing date.                                                                   

     Participants in Euroclear and Clearstream will need to make funds available
to Euroclear or Clearstream to pay for the securities by wire transfer on the   
value date. The most direct way of doing this is to preposition funds (i.e.,    
have funds in place at Euroclear or Clearstream before the value date), either  
from cash on hand or existing lines of credit. Under this approach, however,    
participants may take on credit exposure to Euroclear and Clearstream until the 
securities are credited to their accounts one day later.                        

As an alternative, if Euroclear or Clearstream has extended a line of 
credit to a participant, the participant may decide not to preposition funds,   
but to allow Euroclear or Clearstream to draw on the line of credit to finance  
settlement for the securities. Under this procedure, Euroclear or Clearstream   
would charge the participant overdraft charges for one day, assuming that the   
overdraft would be cleared when the securities were credited to the             
participant's account. However, interest on the securities would accrue from the
value date. Therefore, in these cases the interest income on securities that the
participant earns during that one-day period will substantially reduce or offset
the amount of the participant's overdraft charges. Of course, this result will  
depend on the cost of funds to (i.e., the interest rate that Euroclear or       
Clearstream charges) each participant.                                          

Since the settlement will occur during New York business hours, a DTC 
participant selling an interest in the security can use its usual procedures for
transferring global securities to the depositaries of Euroclear or Clearstream  
for the benefit of Euroclear or Clearstream participants. The DTC seller will   
receive the sale proceeds on the closing date. Thus, to the DTC seller, a       
cross-market sale will settle no differently than a trade between two DTC       
participants.                                                                   

Finally, day traders that use Euroclear or Clearstream to purchase    
interests in the notes and debentures from DTC accountholders for delivery to   
Euroclear or Clearstream participants should note that these trades will        
automatically fail on the sale side unless affirmative action is taken. At least
three techniques should be readily available to eliminate this potential        
problem:                                                                        

- borrowing through Euroclear or Clearstream for one day, until the   
purchase side of the day trade is reflected in their Euroclear or 
      Clearstream accounts, in accordance with the clearing system's customary
procedures;                                                       

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    - borrowing the interests in the United States from a DTC accountholder no
    later than one day prior to settlement, which would give the interests
       sufficient time to be reflected in their Euroclear or Clearstream account
in order to settle the sale side of the trade; or                 

     - staggering the value date for the buy and sell sides of the trade so that
    the value date for the purchase from the DTC accountholder is at least
one day prior to the value date for the sale to the Euroclear or  
Clearstream participant.                                          

TRADING BETWEEN A EUROCLEAR OR CLEARSTREAM SELLER AND DTC PURCHASER         

Due to time zone differences in their favor, Euroclear and Clearstream
participants can use their usual procedures to transfer securities through their
depositaries to a DTC participant. The seller must first send instructions to   
Euroclear or Clearstream through a participant at least one business day prior  
to the closing date. Euroclear or Clearstream will then instruct its depositary 
to credit the securities to the DTC participant's account and receive payment.  
The payment will be credited in the account of the Euroclear or Clearstream     
participant on the following day, but the receipt of the cash proceeds will be  
back-valued to the value date (which will be the preceding day if settlement    
occurs in New York). If settlement is not completed on the intended value date  
(i.e., the trade fails), the receipt of the cash proceeds will instead be valued
at the actual closing date.                                                     

  If the Euroclear or Clearstream participant selling the securities has a
line of credit with Euroclear or Clearstream and elects to be in debit for the  
securities until it receives the sale proceeds in its account, then the         
back-valuation may substantially reduce or offset any overdraft charges that the
participant incurs over that one-day period.                                    

CERTIFICATED NOTES                                                              

    We will issue certificated notes to each person that DTC identifies as the
beneficial owner of the notes or debentures, as the case may be, represented by 
the global securities upon surrender by DTC of the global securities only if:   

- DTC notifies us that it is no longer willing or able to act as a    
depository for the global securities, and we have not appointed a 
successor depository within 90 days of that notice;               

    - we determine not to have the notes or debentures represented by a global
security; or                                                      

- an event of default has occurred and is continuing.                 

None of Lubrizol, the guarantors or the trustee will be liable for any
delay by DTC, its nominee or any direct or indirect participant in identifying  
the beneficial owners of the related notes or debentures. We and the trustee may
conclusively rely on, and will be protected in relying on, instructions from DTC
or its nominee for all purposes, including with respect to the registration and 
delivery, and the respective principal amounts, of the notes and debentures to  
be issued.                                                                      

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MATERIAL UNITED STATES FEDERAL TAX CONSIDERATIONS 

     The following is a summary of material U.S. federal income tax consequences
(and, in the case of Non-U.S. Holders (as defined below), material U.S. federal 
estate tax consequences) of the acquisition, ownership and disposition of the   
notes and debentures by investors that acquire the notes or debentures in this  
offering at a cash purchase price equal to the "issue price" of the notes or    
debentures (i.e., the first price at which a substantial amount of the notes or 
debentures is sold other than to bond houses, brokers, or similar persons or    
organizations acting in the capacity of underwriters, placement agents or       
wholesalers).                                                                   

     This summary does not discuss all of the aspects of U.S. federal income and
estate taxation that may be relevant to investors in light of their particular  
investment or other circumstances. In addition, this summary does not discuss   
any U.S. state or local income or foreign income or other tax consequences. This
summary is based upon the currently existing provisions of the Internal Revenue 
Code of 1986, as amended (the "Code"), the Treasury Regulations, and            
administrative and judicial interpretations of the Code and Treasury            
Regulations, all as in effect as of the date of this prospectus supplement and  
all of which are subject to change or differing interpretation, possibly with   
retroactive effect. The discussion below deals only with the notes or debentures
held as capital assets (generally, property held for investment) and does not   
address purchasers of the notes or debentures that may be subject to special tax
rules, such as:                                                                 

- U.S. expatriates;                                                   

- financial institutions;                                             

- banks;                                                              

- insurance companies;                                                

- tax-exempt entities;                                                

     - partnerships or other entities classified as partnerships or flow-through
entities for U.S. federal income tax purposes;                    

- dealers in securities or currencies;                                

- traders in securities;                                              

 - persons that acquire notes or debentures for a price other than their
issue price;                                                      

- persons that hold notes or debentures as part of a straddle, hedge, 
conversion or other integrated transaction; and                   

     - U.S. Holders (as defined below) whose functional currency is not the U.S.
dollar.                                                           

   Prospective investors should consult their own tax advisors regarding the
particular U.S. federal, state and local and foreign income and other tax       
consequences of acquiring, owning and disposing of notes and debentures that may
be applicable to them.                                                          

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES TO U.S. HOLDERS                    

   For purposes of the following discussion, a "U.S. Holder" is a beneficial
owner of a note or debenture that is, for U.S. federal income tax purposes,     

- an individual citizen or resident of the United States;             

 - a corporation (including any entity treated as a corporation for U.S.
       federal income tax purposes) created or organized in or under the laws of
     the United States, or of any state thereof or the District of Columbia;

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- an estate the income of which is includible in gross income for U.S.
federal income tax purposes regardless of its source; or          

- a trust (A) if a court within the United States is able to exercise 
      primary supervision over the administration of the trust and one or more
     U.S. persons have authority to control all substantial decisions of the
       trust, or (B) which has made an election to be treated as a United States
person under applicable Treasury Regulations.                     

 If a partnership is a beneficial owner of notes or debentures, the U.S.
federal income tax treatment of a partner in the partnership generally will     
depend upon the status of the partner and the activities of the partnership.    
Partnerships that are beneficial owners of notes or debentures, and partners in 
such partnerships, are urged to consult their own tax advisors regarding the    
U.S. federal, state, local and foreign tax consequences to them of acquiring,   
owning and disposing of notes or debentures.                                    

    Interest.  In general, interest on a note or debenture will be included in
the gross income of a U.S. Holder as ordinary interest income at the time it is 
received or accrued in accordance with the U.S. Holder's regular method of      
accounting for U.S. federal income tax purposes. It is expected that the notes  
and debentures will be issued without original issue discount ("OID"), other    
than possibly OID within a de minimis exception.                                

 Dispositions.  Upon the sale, exchange, retirement, redemption or other
taxable disposition of a note or debenture, a U.S. Holder generally will        
recognize capital gain or loss in an amount equal to the difference, if any,    
between the amount realized on the disposition (excluding any amount received   
that is attributable to accrued but unpaid interest not previously included in  
gross income, which will be treated as ordinary interest income) and the U.S.   
Holder's adjusted tax basis in the note or debenture. A U.S. Holder's adjusted  
tax basis in a note or debenture generally will equal the U.S. Holder's cost of 
the note or debenture. The capital gain or loss will be long-term capital gain  
or loss if the note or debenture has been held for more than one year at the    
time of the disposition. Long-term capital gain recognized by a non-corporate   
U.S. Holder generally will be subject to a maximum tax rate of 15% through 2008 
and 20% thereafter. Subject to certain limited exceptions, capital losses cannot
be used to offset ordinary income.                                              

Backup Withholding Tax and Information Reporting.  In general, "backup
withholding" at a rate of 28% through 2010 and 31% thereafter may apply to      
payments of principal and interest made on a note or debenture, and to payment  
of the proceeds of a sale or exchange of a note or debenture before maturity,   
that are made to a non-corporate U.S. Holder if the Holder fails to provide a   
correct taxpayer identification number or otherwise comply with applicable      
requirements of the backup withholding rules. In addition, such payments of     
principal and interest to, and the proceeds of a sale or exchange by, such a    
Non-U.S. Holder generally will be subject to information reporting requirements.
The backup withholding tax is not an additional tax and may be refunded or      
credited against a U.S. Holder's U.S. federal income tax liability, provided    
that required information is provided to the Internal Revenue Service.          

CERTAIN U.S. FEDERAL INCOME AND ESTATE TAX CONSEQUENCES TO NON-U.S. HOLDERS     

For purposes of the following discussion, a "Non-U.S. Holder" is a    
beneficial owner of a note or debenture that is not a partnership for U.S.      
federal income tax purposes and is not a U.S. Holder.                           

   Interest.  Non-U.S. Holders generally will not be subject to U.S. federal
income or withholding tax on interest paid on a note or debenture so long as    
that interest is not effectively connected with the conduct of a U.S. trade or  
business by the Non-U.S. Holder, or if an income tax treaty applies, is not     
generally attributable to a U.S. permanent establishment maintained by the      
Non-U.S. Holder and:                                                            

- the Non-U.S. Holder does not directly or indirectly, actually or    
       constructively, own 10% or more of the total combined voting power of all
classes of our stock entitled to vote,                            

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   - the Non-U.S. Holder is not (x) a controlled foreign corporation that is
       related to us through sufficient stock ownership, or (y) a bank receiving
interest described in Section 881(c)(3)(A) of the Code, and       

    - either (A) the beneficial owner of the note or debenture certifies to us
   or our agent, under penalties of perjury, on Internal Revenue Service
       Form W-8BEN or a suitable substitute form that it is not a "United States
      person" under the meaning of the Code and provides its name and address,
or (B) a securities clearing organization, bank or other financial
    institution that holds customers' securities in the ordinary course of
    its trade or business and holds the note or debenture on behalf of the
beneficial owner certifies to us or our agent, under penalties of 
  perjury, that such a statement has been received from the beneficial
owner and a copy of this statement is furnished to us.            

  If these conditions are not satisfied, then interest paid on the note or
debenture to the Non-U.S. Holder will be subject to U.S. withholding tax at a   
rate of 30% unless the rate is reduced or eliminated pursuant to an applicable  
tax treaty and the Non-U.S. Holder provides a properly completed and executed   
Internal Revenue Service Form W-8BEN or a suitable substitute form, as provided 
for in the Treasury Regulations.                                                

     Dispositions.  A Non-U.S. Holder will not be subject to U.S. federal income
tax on any gain or income realized on the sale, exchange, redemption, retirement
at maturity or other disposition of a note or debenture (provided that, in the  
case of proceeds representing accrued interest, the conditions described under  
"Interest" above are met) unless:                                               

    - the Non-U.S. Holder is an individual who is present in the United States
       for 183 days or more during the taxable year and certain other conditions
are met, or                                                       

 - the gain is effectively connected with the conduct of a U.S. trade or
     business by the Non-U.S. Holder, or if an income tax treaty applies, is
    generally attributable to a U.S. permanent establishment maintained by
the Non-U.S. Holder.                                              

   Effectively Connected Income.  If a Non-U.S. Holder is engaged in a trade
or business in the United States and interest on a note or debenture or gain on 
the disposition of a note or debenture is effectively connected with the conduct
of this trade or business (or if an income tax treaty applies, and the Non-U.S. 
Holder maintains a U.S. permanent establishment to which the interest or gain is
generally attributable), the Non-U.S. Holder, although exempt from the U.S.     
withholding tax discussed under "Interest" above (provided that the holder      
furnishes a properly executed Internal Revenue Service Form W-8ECI or successor 
form on or before any payment date to claim the exemption), may be subject to   
U.S. federal income tax on such interest or gain at regular U.S. federal income 
tax rates.                                                                      

     Branch Profits Tax.  In addition, a foreign corporation that is a holder of
a note or debenture may be subject to a branch profits tax equal to 30% of its  
effectively connected earnings and profits for the taxable year, subject to     
certain adjustments, unless it qualifies for a lower rate under an applicable   
income tax treaty. For this purpose, interest on a note or debenture or gain    
recognized on the disposition of a note or debenture will be included in        
earnings and profits if the interest or gain is effectively connected with the  
conduct by the foreign corporation of a trade or business in the United States. 

     Estate Tax.  Under present U.S. federal estate tax law, a note or debenture
held by an individual who at the time of death is not a citizen or resident (as 
specially defined for U.S. federal estate tax purposes) of the United States    
will not be subject to U.S. federal estate tax as a result of the individual's  
death if, at the time of the individual's death,                                

- the individual did not directly or indirectly, actually or          
  constructively, own ten percent or more of the total combined voting
      power of all classes of our stock entitled to vote within the meaning of
Section 871(h)(3) of the Internal Revenue Code and the Treasury   
Regulations thereunder, and                                       

- the income on the note or debenture would not have been effectively 
    connected with the conduct of a trade or business by the individual in
the United States.                                                

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  Backup Withholding and Information Reporting.  Generally, we must report
annually to the Internal Revenue Service and to each Non-U.S. Holder the amount 
of interest (including OID, if any) that we paid to that holder, and the amount 
of tax withheld from those payments of interest. This information may also be   
made available to the tax authorities of a country in which the Non-U.S. Holder 
resides or is established. Under some circumstances, Treasury Regulations may   
require backup withholding and additional information reporting on payments of  
interest.                                                                       

 Backup withholding of U.S. federal income tax (at a rate of 28% through
2010 and 31% thereafter) may apply to payments of principal, premium, if any,   
and interest, made in respect of a note or debenture and to certain payments of 
proceeds of the sale or retirement of a note or debenture to Non-U.S. Holders   
who are not exempt recipients and who fail to provide and certify certain       
identifying information in the required manner. Generally, individuals are not  
exempt recipients, whereas corporations and certain other entities generally are
exempt recipients. Compliance with the certification requirements described     
under "Interest" above generally will establish an exemption from backup        
withholding for Non-U.S. Holders who are not exempt recipients, provided, in    
each case, that we or our agents (in their capacity as agents), as the case may 
be, do not have actual knowledge or reason to know that the payee is a United   
States person that is not an exempt recipient.                                  

     Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder would be allowed as a refund or a credit against the holder's   
U.S. federal income tax liability, provided the required information is         
furnished to the Internal Revenue Service.                                      

Non-U.S. Holders should consult their tax advisors regarding the      
application of information reporting and backup withholding in their particular 
situation, including the availability of and procedure for obtaining an         
exemption from backup withholding under current Treasury Regulations.           

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UNDERWRITING

    Citigroup Global Markets Inc. is acting as the sole bookrunning manager of
the offering and as representative of the underwriters named below.             

  Subject to the terms and conditions stated in the underwriting agreement
dated the date of this prospectus supplement, each underwriter named below has  
agreed to purchase, and we have agreed to sell to that underwriter, the         
principal amount of notes and debentures set forth opposite the underwriter's   
name.                                                                           

                                                        [Enlarge/Download Table]

                                            PRINCIPAL     PRINCIPAL       PRINCIPAL   
                                            AMOUNT OF     AMOUNT OF       AMOUNT OF   
UNDERWRITER                                 2009 NOTES    2014 NOTES   2034 DEBENTURES
-----------                                 ----------    ----------   ---------------
                                                                                      
Citigroup Global Markets Inc. ............ $200,000,000  $225,000,000   $150,000,000  
ABN AMRO Incorporated.....................   80,000,000    90,000,000     60,000,000  
Wachovia Capital Markets, LLC.............   80,000,000    90,000,000     60,000,000  
KeyBanc Capital Markets, a division of                                                
  McDonald Investments Inc. ..............   20,000,000    22,500,000     15,000,000  
Lazard Freres & Co. LLC...................   10,000,000    11,250,000      7,500,000  
PNC Capital Markets, Inc. ................   10,000,000    11,250,000      7,500,000  
                                           ------------  ------------   ------------  
  Total................................... $400,000,000  $450,000,000   $300,000,000  
                                           ============  ============   ============  

The underwriting agreement provides that the obligations of the       
underwriters to purchase the notes and debentures included in this offering are 
subject to approval of legal matters by counsel and to other conditions. The    
underwriters are obligated to purchase all the notes and debentures of each     
series if they purchase any of the notes and debentures of that series.         

     The underwriters propose to offer some of the notes and debentures directly
to the public at the public offering price set forth on the cover page of this  
prospectus supplement and some of the notes and debentures to dealers at the    
public offering price less a concession not to exceed 0.350% of the principal   
amount of the 2009 Notes, 0.475% of the principal amount of the 2014 Notes and  
0.600% of the principal amount of the debentures. The underwriters may allow,   
and dealers may reallow, a concession not to exceed 0.250% of the principal     
amount of the 2009 Notes, 0.250% of the principal amount of the 2014 Notes and  
0.250% of the principal amount of the debentures on sales to other dealers.     
After the initial offering of the notes and debentures to the public, the       
underwriters may change the public offering price and concessions.              

Each underwriter has represented, warranted and agreed that:          

  - it has not offered or sold and, prior to the expiry of a period of six
months from the closing date, will not offer or sell any notes or 
   debentures included in this offering to persons in the United Kingdom
    except to persons whose ordinary activities involve them in acquiring,
       holding, managing or disposing of investments (as principal or agent) for
       the purposes of their businesses or otherwise in circumstances which have
      not resulted and will not result in an offer to the public in the United
       Kingdom within the meaning of the Public Offers of Securities Regulations
1995;                                                             

- it has only communicated and caused to be communicated and will only
     communicate or cause to be communicated any invitation or inducement to
    engage in investment activity (within the meaning of section 21 of the
 Financial Services and Markets Act 2000 ("FSMA")) received by it in
      connection with the issue or sale of any notes or debentures included in
    this offering in circumstances in which section 21(1) of the FSMA does
not apply to us;                                                  

 - it has complied and will comply with all applicable provisions of the
  FSMA with respect to anything done by it in relation to the notes or
      debentures included in this offering in, from or otherwise involving the
United Kingdom; and                                               

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   - The notes and debentures will not be offered, transferred or sold in or
     from The Netherlands, whether directly or indirectly, to any individual
      or legal entity other than to individuals or legal entities who or which
  trade in or invest in securities in their conduct of a profession or
 trade (which includes banks, brokers, dealers, insurance companies,
     pension funds, other institutional investors and commercial enterprises
that as an ancillary activity regularly invest in securities).    

   The following table shows the underwriting discounts and commissions that
we are to pay to the underwriters in connection with this offering (expressed as
a percentage of the principal amount of the notes and debentures).              

                                                                [Download Table]

                                                                PAID BY
                                                               LUBRIZOL
                                                               --------
                                                                       
Per 2009 note...............................................    0.900% 
Per 2014 note...............................................    1.125% 
Per 2034 debenture..........................................    1.425% 

   In connection with the offering, Citigroup Global Markets Inc., on behalf
of the underwriters, may purchase and sell notes and debentures in the open     
market. These transactions may include over-allotment, syndicate covering       
transactions and stabilizing transactions. Over-allotment involves syndicate    
sales of notes and debentures in excess of the principal amount of notes and    
debentures to be purchased by the underwriters in the offering, which creates a 
syndicate short position. Syndicate covering transactions involve purchases of  
the notes and debentures in the open market after the distribution has been     
completed in order to cover syndicate short positions. Stabilizing transactions 
consist of certain bids or purchases of notes and debentures made for the       
purpose of preventing or retarding a decline in the market price of the notes   
and debentures while the offering is in progress.                               

 The underwriters also may impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when       
Citigroup Global Markets Inc., in covering syndicate short positions or making  
stabilizing purchases, repurchases notes or debentures originally sold by that  
syndicate member.                                                               

  Any of these activities may have the effect of preventing or retarding a
decline in the market price of the notes and debentures. They may also cause the
price of the notes and debentures to be higher than the price that otherwise    
would exist in the open market in the absence of these transactions. The        
underwriters may conduct these transactions in the over-the-counter market or   
otherwise. If the underwriters commence any of these transactions, they may     
discontinue them at any time.                                                   

     We estimate that our total expenses for this offering will be $3.5 million.

  The underwriters have performed investment banking and advisory services
for us from time to time for which they have received customary fees and        
expenses. The underwriters may, from time to time, engage in transactions with  
and perform services for us in the ordinary course of their business. In        
particular, Citigroup Global Markets Inc. and Citicorp North America, Inc., an  
affiliate of Citigroup Global Markets Inc., are a lead arranger and the agent,  
respectively, under each of the temporary bridge facility and the new credit    
facilities entered into on August 24, 2004. In addition, Citigroup Global       
Markets Inc. was our financial advisor in connection with our acquisition of    
Noveon International. Affiliates of the other underwriters, except Lazard Freres
& Co. LLC, are initial lenders under the temporary bridge facility and the new  
credit facilities. Furthermore, Lazard Freres & Co. LLC, or Lazard, has entered 
into an agreement with Mitsubishi Securities (USA), Inc., or Mitsubishi, an     
affiliate of The Bank of Tokyo-Mitsubishi, pursuant to which Mitsubishi provides
certain advisory and/or other services to Lazard, including in respect of this  
offering. In return for the provision of such services by Mitsubishi to Lazard, 
Lazard will pay to Mitsubishi a mutually agreed upon fee. The Bank of           
Tokyo-Mitsubishi is an initial lender under the temporary bridge facility and   
the new credit facilities.                                                      

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   Because more than 10% of the net proceeds of this offering, not including
underwriting compensation, may be received by entities that are affiliates of   
members of the National Association of Securities Dealers, Inc. who are         
participating in this offering, this offering is being conducted in compliance  
with Rule 2710(h) of the NASD. Pursuant to that rule, the appointment of a      
qualified independent underwriter is not necessary in connection with this      
offering, because the notes and debentures are rated Baa or better by Moody's   
rating service.                                                                 

 A prospectus in electronic format may be made available on the websites
maintained by one or more of the underwriters.                                  

 We and the guarantors have agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, or 
to contribute to payments the underwriters may be required to make because of   
any of those liabilities.                                                       

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PROSPECTUS                                                                      

$2,000,000,000

THE LUBRIZOL CORPORATION

COMMON SHARES 
DEBT SECURITIES 

This prospectus provides you with a general description of the common 
shares and debt securities that we may offer and sell from time to time. Each   
time we offer securities for sale we will provide a prospectus supplement that  
contains specific information about the terms of the offered securities and may 
add to, update or change the information contained in this prospectus. We will  
also describe in the prospectus supplement any material risk factors that an    
investor should consider before purchasing our securities. This prospectus may  
not be used to consummate sales of our securities unless it is accompanied by a 
prospectus supplement describing the terms of the offering.                     

 Our common shares are listed for trading on the New York Stock Exchange
under the symbol "LZ." The mailing address and telephone number of our principal
executive offices are 29400 Lakeland Boulevard, Wickliffe, Ohio 44092-2298 and  
(440) 943-4200.                                                                 

     You should read this prospectus, the documents that are incorporated herein
by reference and the applicable prospectus supplement carefully before you      
decide to invest in our securities.                                             

 NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A     
CRIMINAL OFFENSE.                                                               

The date of this prospectus is August 27, 2004. 

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TABLE OF CONTENTS 

                                                                [Download Table]
                                                                  
About this Prospectus.......................................     1
About The Lubrizol Corporation..............................     1
Where You Can Find More Information.........................     1
Forward-Looking Statements..................................     2
Use of Proceeds.............................................     3
Ratio of Earnings to Fixed Charges..........................     3
Description of Common Shares................................     4
Description of Debt Securities..............................     6
Plan of Distribution........................................    22
Legal Matters...............................................    25
Experts.....................................................    25

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ABOUT THIS PROSPECTUS 

    This prospectus is part of a registration statement that we filed with the
SEC utilizing a shelf registration process. Under this shelf process, we may    
sell any combination of the securities described in this prospectus in one or   
more offerings up to a total dollar amount of $2,000,000,000. This prospectus   
provides you with a general description of the securities that we may offer.    
Each time we sell securities, we will provide a prospectus supplement that will 
contain specific information about the terms of that offering. The prospectus   
supplement may also add, update or change information contained in this         
prospectus. This prospectus may not be used to consummate sales of our          
securities unless it is accompanied by a prospectus supplement describing the   
terms of the offering. You should read both this prospectus and any applicable  
prospectus supplement together with the additional information described below  
under the heading "Where You Can Find More Information."                        

ABOUT THE LUBRIZOL CORPORATION

   We are a leading global producer and marketer of technologically advanced
chemicals and specialty materials for the transportation, consumer and          
industrial markets. We create additives, ingredients, resins and compounds that 
enhance the performance, quality and value of our customers' products.          

On June 3, 2004, we acquired Noveon International, Inc. We paid       
approximately $920.0 million for the equity of Noveon International, less       
certain transaction expenses of Noveon International, and subsequently paid     
approximately $1.1 billion in connection with the refinancing of the outstanding
indebtedness of Noveon International and its subsidiaries. Noveon International 
is a leading global producer and marketer of technologically advanced specialty 
materials and chemicals used in a broad range of consumer and industrial        
applications. Noveon International's business includes a number of              
industry-leading product franchises marketed under some of the industry's most  
recognized brand names, including Carbopol(R), TempRite(R), Estane(R) and       
Hycar(R).                                                                       

Following our acquisition of Noveon International, we reorganized our 
business into two business units and operating segments: the lubricant additives
segment, also referred to as Lubrizol Additives, and the specialty chemicals    
segment, also referred to as Noveon. The lubricant additives segment is         
comprised of our previous business in fluid technologies for transportation,    
advanced fluid systems, emulsified products and the former industrial additives 
product group of fluid technologies for industry. The specialty chemicals       
segment is comprised of the product lines of Noveon International and the former
performance chemicals product group of fluid technologies for industry.         

WHERE YOU CAN FIND MORE INFORMATION 

     We are subject to the reporting requirements of the Securities Exchange Act
of 1934, and we file annual, quarterly and current reports and other information
with the SEC. Our reports filed with the SEC may be inspected, without charge,  
and copies may be obtained at prescribed rates, at the public reference facility
maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington,   
D.C. 20549. You may obtain information regarding the SEC's public reference     
facility by calling 1-800-SEC-0330. Our reports and other information filed by  
us with the SEC are also available at the SEC's website on the Internet located 
at www.sec.gov. Our common shares are listed for trading on the NYSE under the  
symbol "LZ." We maintain a website on the Internet located at www.lubrizol.com. 
The information on our website is not incorporated by reference in this         
prospectus.                                                                     

The SEC allows us to incorporate by reference in this prospectus the  
information that we file with them. Incorporation by reference means that we can
disclose important information to you by referring you to other documents that  
are considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede the information in this    
prospectus and the documents listed below. We hereby incorporate by reference   
our filings listed below and any future filings made by us with the SEC under   
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after 
the date of this prospectus until all of the securities offered under this      
prospectus are sold:                                                            

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 - Our Annual Report on Form 10-K for the fiscal year ended December 31,
2003;                                                             

  - Our Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2004;                                                         

     - Our Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2004;                                                             

   - Our Current Reports on Form 8-K filed with the SEC on April 16, May 20,
June 16, July 29, August 4 and August 20, 2004;                   

     - The description of our common shares contained in Item 2 of our Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 1991; 

   - Our Registration Statement on Form 8-A filed with the SEC on October 1,
1997; and                                                         

     - Our Registration Statement on Form 8-A/A filed with the SEC on August 17,
1999.                                                             

We will provide without charge to each person to whom a copy of this  
prospectus is delivered, including any beneficial owner, upon the written or    
oral request of such person, a copy of any or all of the documents incorporated 
by reference in this prospectus (other than exhibits to such documents, unless  
such exhibits are specifically incorporated by reference into the information   
that this prospectus incorporates). Requests should be directed to:             

The Lubrizol Corporation                                              
29400 Lakeland Boulevard                                              
Wickliffe, Ohio 44092-2298                                            
(440) 943-4200                                                        
Attn: Joanne Wanstreet                                                

   You should only rely on the information contained in this prospectus, any
prospectus supplement or any document incorporated by reference. We have not    
authorized anyone else to provide you with different or additional information. 
We are not making an offer of these securities in any state where the offer is  
not permitted. You should not assume that the information contained in this     
prospectus, any prospectus supplement or any document incorporated by reference 
is accurate as of any date other than the date of the applicable document.      

FORWARD-LOOKING STATEMENTS

  This prospectus contains, each prospectus supplement may contain and the
documents incorporated by reference herein contain or will contain              
forward-looking statements within the meaning of the federal securities laws. As
a general matter, forward-looking statements are those focused upon future      
plans, objectives or performance as opposed to historical items and include     
statements of anticipated events or trends and expectations and beliefs relating
to matters not historical in nature. Forward-looking statements are subject to  
uncertainties and factors relating to our operations and business environment,  
all of which are difficult to predict and many of which are beyond our control. 
These uncertainties and factors could cause our actual results to differ        
materially from those matters expressed in or implied by any forward-looking    
statements.                                                                     

We believe that the following factors, among others, could affect our 
future performance and cause our actual results to differ materially from those 
expressed or implied by the forward-looking statements made by us:              

- the effect of interest rate fluctuations on our interest expense;   

  - the conditions in the debt and equity markets at the time we implement
our permanent financing;                                          

    - our ability to refinance our bridge facility by May 27, 2005, when it is
due and payable;                                                  

  - our indebtedness requires the use of a significant portion of our cash
flow to make interest and principal payments, thereby reducing the
      availability of our cash flow to fund capital expenditures, acquisitions
or other general corporate purposes;                              

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  - the overall global economic environment and the overall demand for our
products on a worldwide basis;                                    

- the demand for our products in developing regions such as China and 
     India, which geographic areas are an announced focus of our activities;

    - technology developments that affect longer-term trends for our products;

  - the extent to which we are successful in expanding our business in new
and existing markets;                                             

- our ability to identify, complete and integrate acquisitions for    
       profitable growth, especially our ability to integrate the acquisition of
Noveon International;                                             

  - our success at continuing to develop proprietary technology to meet or
exceed new industry performance standards and individual customer 
expectations;                                                     

   - our ability to continue to reduce complexities and conversion costs and
    modify our cost structure to maintain and enhance our competitiveness;

 - our success in retaining and growing the business that we do with our
largest customers;                                                

- the cost, availability and quality of raw materials, including      
petroleum-based products;                                         

- the cost and availability of energy, including natural gas and      
electricity;                                                      

    - the effects of fluctuations in currency exchange rates upon our reported
     results from international operations, together with non-currency risks
of investing in and conducting significant operations in foreign  
    countries, including those relating to political, social, economic and
regulatory factors;                                               

- the extent to which we achieve market acceptance of our commercial  
development programs;                                             

 - significant changes in government regulations affecting environmental
compliance; and                                                   

- the ability to identify, understand and manage risks inherent in new
markets in which we choose to expand.                             

USE OF PROCEEDS 

Unless otherwise disclosed in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of our securities to repay         
outstanding indebtedness, including debt that we incurred in connection with the
acquisition of Noveon International, or for general corporate purposes.         

RATIO OF EARNINGS TO FIXED CHARGES

    The following table sets forth our consolidated ratio of earnings to fixed
charges on an historical basis for the periods indicated.                       

                                                        [Enlarge/Download Table]

                                                                    YEAR ENDED DECEMBER 31,          SIX MONTHS  
                                                             -------------------------------------      ENDED    
                                                             1999    2000    2001    2002    2003   JUNE 30, 2004
                                                             -----   -----   -----   -----   -----  -------------
                                                                                                                 
Ratio of earnings to fixed charges(1)....................... 7.71X   7.66X   6.97X   9.29X   6.19X      3.73X    

---------------                                                                 

(1) Our ratio of earnings to fixed charges has been computed by dividing        
 earnings (including distributed income of equity investees) before income
  taxes plus fixed charges (excluding capitalized interest expense) by fixed
charges. Fixed charges consist of interest expense on debt (including   
amortization of debt expense and capitalized interest).                 

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DESCRIPTION OF COMMON SHARES

COMMON SHARES                                                                   

The following is a summary of the provisions of our common shares. The
rights of our common shares are defined by our Amended Articles of Incorporation
and our Code of Regulations, as amended, and the provisions of the Ohio General 
Corporation Law. You should refer to those documents and provisions for more    
complete information regarding our common shares.                               

Holders of our common shares are entitled to one vote per share on all
matters upon which our shareholders are entitled to vote, including the election
of directors. The holders of common shares are entitled to dividends when, as   
and if declared by our Board of Directors out of legally available funds. In the
event of any liquidation, dissolution or winding up of our business, each holder
of common shares is entitled to share ratably in all of our assets remaining    
after the payment of liabilities. Holders of common shares have no preemptive   
right to purchase any of our securities or any securities that are convertible  
into or exchangeable for any of our securities. The common shares are not       
subject to any provisions relating to redemption. The common shares have no     
conversion rights and are not subject to further calls or assessments by us. All
of our common shares now outstanding, and all of our common shares that are     
issued in an offering under this prospectus, are or will be when issued fully   
paid and non-assessable.                                                        

 As of August 15, 2004, we have 120,000,000 common shares authorized for
issuance under our Amended Articles of Incorporation, 51,774,231 common shares  
issued and outstanding, and 5,602,124 common shares committed to be issued      
pursuant to our various employee benefit and compensation plans.                

     Our common shares are listed for trading on the NYSE under the symbol "LZ."
As of August 15, 2004, we have 3,779 shareholders of record. This number        
excludes beneficial owners of common shares held in street name. Based on       
requests from brokers and other nominees, we estimate there are approximately   
21,700 beneficial owners of our common shares.                                  

PROVISIONS RELATING TO TAKEOVER MATTERS                                         

    Our Board of Directors must have at least nine, and no more than thirteen,
directors and is currently fixed at eleven directors, who are divided into three
classes. Two classes have four directors, and the other class has three         
directors. Directors of each class serve for three-year terms, with one class   
being elected each year. The authorized number of directors and the number of   
directors in each class may be changed only by the affirmative vote of the      
holders of at least a majority of the shares entitled to vote for the election  
of directors that are represented at a meeting of shareholders called for the   
purpose of electing directors or by the affirmative vote of a majority of the   
directors then in office.                                                       

Under the Ohio General Corporation Law, if a corporation's Board of   
Directors is divided into classes, then directors may be removed by the         
shareholders only for cause. Under our Code of Regulations, a director may be   
removed upon the vote of the holders of two-thirds of the shares that are       
represented at an annual meeting or any special meeting of shareholders duly    
called for that purpose. Unless all of the directors of a class are removed, a  
director may not be removed if the number of shares voted against the director's
removal would be sufficient, if cumulatively voted at an election of all of the 
directors or all of the directors of a particular class, to elect one director. 
If any director is removed, the resulting vacancy may be filled by a majority   
vote of the Board of Directors. Any director elected to fill a vacancy will hold
office until the expiration of the term of office for the class to which the    
director was elected.                                                           

   Nominations of persons for election as directors may be made at a meeting
of shareholders by or at the direction of the Board of Directors, by any        
nominating committee or person appointed by the Board of Directors, or by any   
shareholder entitled to vote for the election of directors who gives timely     
notice. To be timely, a shareholder's notice must be received at our principal  
executive offices not less than 60 days nor more than 90 days prior to the      
meeting; except that, if less than 75 days' notice or prior public disclosure of
the date of the meeting is given to shareholders, notice by the shareholder will
be timely if it is received not                                                 

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later than the 15th day following the earlier of the day on which such notice of
the date of the meeting was mailed or such public disclosure was made.          

A special meeting of shareholders may be called by the chairman of the
board, the president, a majority of the directors acting with or without a      
meeting, or by shareholders holding 50% or more of the outstanding shares       
entitled to vote at the special meeting.                                        

   Our Code of Regulations provides that holders of shares entitling them to
exercise at least a majority of our voting power will constitute a quorum at any
meeting of shareholders; except that, whether or not a quorum is present, the   
holders of a majority of the voting shares represented at a meeting may adjourn 
the meeting without notice other than by announcement at the meeting.           

Our Code of Regulations may be amended, repealed or superseded by new 
regulations by the affirmative vote of the holders of a majority of the shares  
represented at an annual meeting or any special meeting of shareholders duly    
called for that purpose. The provisions of our Code of Regulations regarding the
number, classification and removal of directors, however, may be amended or     
repealed only with the affirmative vote of the holders of at least two-thirds of
our voting power, unless the amendment or repeal has been recommended by at     
least two-thirds of the directors then in office.                               

Section 1704.02 of the Ohio General Corporation Law (also known as the
Merger Moratorium Law) prohibits Chapter 1704 transactions (as defined below)   
for a period of three years from the date on which a shareholder first becomes  
an interested shareholder unless the directors of the corporation prior to the  
shareholder becoming an interested shareholder approved the transaction or      
approved the transaction pursuant to which the shareholder became an interested 
shareholder. "Chapter 1704 transactions" include mergers, consolidations,       
combinations, majority share acquisitions or sales of substantial assets between
an Ohio corporation and an interested shareholder or an affiliate or associate  
of an interested shareholder. An "interested shareholder" is defined generally  
as any person that beneficially owns 10% or more of the outstanding voting      
shares of the corporation. After the three-year period, a Chapter 1704          
transaction is prohibited unless certain fair price provisions are complied with
or the shareholders of the corporation approve the transaction by the           
affirmative vote of two-thirds of the voting power of the corporation, including
at least a majority of the disinterested shareholders.                          

    Under Ohio securities law, any person making a "control bid" pursuant to a
tender offer for the securities of certain publicly held companies, including   
our company, must file upon commencement of the bid certain information relating
to the bid with the Ohio Division of Securities. The Division may within five   
calendar days suspend the bid if the required information has not been filed, if
material information regarding the bid has not been provided to the shareholders
of the company, or if there has been any other violation of the Ohio Securities 
Act.                                                                            

 Under the Ohio General Corporation Law, the approval by the affirmative
vote of holders of two-thirds of the voting power of a corporation entitled to  
vote on the matter is required for mergers, consolidations, majority share      
acquisitions, combinations involving the issuance of shares with one-sixth or   
more of the voting power of the corporation, and any transfers of all or        
substantially all of the assets of a corporation unless the articles of         
incorporation of the corporation specify a different proportion (which cannot be
less than a majority). Our Amended Articles of Incorporation provide that these 
actions generally can be authorized by the holders of a majority of the         
outstanding shares.                                                             

     Our Amended Articles of Incorporation include provisions that require prior
shareholder approval for any acquisition of shares in which a person or group   
obtains voting power of our company in one of the following ranges: one-fifth or
more but less than one-third, one-third or more but less than a majority, or a  
majority. Any such acquisition must be approved at a special meeting of         
shareholders, at which a quorum is present, by the affirmative vote of both (1) 
the holders of a majority of the outstanding voting shares and (2) the holders  
of a majority of the outstanding voting shares after excluding interested       
shares. For this purpose, "interested shares" includes shares held by the       
directors who are employees and certain officers of our company and shares held 
by the person or group acquiring the shares. Our company has "opted out" of a   
similar provision that is set forth in the Ohio General Corporation Law.        

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Our Amended Articles of Incorporation contain provisions that require 
certain related-party transactions to be approved by the affirmative vote of the
holders of both a majority of the outstanding voting shares and a majority of   
such shares after excluding the shares owned by the related party involved in   
the transaction, unless certain fair price provisions are complied with. For    
this purpose, a "related party" means any person that beneficially owns 10% or  
more, but less than 90%, of our outstanding voting shares and any of such       
person's affiliates or associates. A "related-party transaction" includes any   
merger or consolidation, any sale, purchase, lease, exchange or transfer of     
substantial assets, the issuance or transfer of any securities, any             
reclassification of securities or recapitalization or the adoption of any plan  
or proposal for liquidation or dissolution, in each case with, to or for the    
benefit of a related party.                                                     

Our Amended Articles of Incorporation may be amended, repealed or     
superseded by new articles of incorporation by the affirmative vote of the      
holders of at least two-thirds of the outstanding voting shares.                

 Our company has a shareholder rights plan. Under that plan, rights have
been distributed to all of our shareholders. If any person or group acquires 20%
or more of our common shares, these rights will "flip in" and permit all        
holders, other than the acquiring person, to purchase additional shares at a    
discounted price.                                                               

   Some or all of these provisions of our Amended Articles of Incorporation,
Code of Regulations and Ohio law and our shareholder rights plan may have the   
effect of delaying, hindering or preventing a change in control of our company  
that is not supported by our Board of Directors, including a change in control  
that might result in the receipt by shareholders of a purchase price in excess  
of then current market prices.                                                  

DESCRIPTION OF DEBT SECURITIES

  The following description of the debt securities sets forth the material
terms and provisions of the debt securities to which any prospectus supplement  
may relate. The debt securities are to be issued under an indenture (the        
"indenture") among Lubrizol, the Guarantors and Wells Fargo Bank, National      
Association, as trustee, the form of which is filed as an exhibit to the        
registration statement of which this prospectus forms a part. The particular    
terms of the debt securities offered by any prospectus supplement, and the      
extent to which the general provisions described below may apply to the offered 
debt securities, will be described in the prospectus supplement.                

    Because the following is a summary of the material terms and provisions of
the indenture and the debt securities, you should refer to the indenture and the
debt securities for complete information regarding the terms and provisions of  
the indenture and the debt securities, including the definitions of some of the 
terms used below. You should also refer to the Trust Indenture Act of 1939,     
certain terms of which are made a part of the indenture by reference. Wherever  
particular articles, sections or defined terms of the indenture are referred to,
such articles, sections or defined terms are incorporated herein by reference,  
and the statement in connection with which such reference is made is qualified  
in its entirety by such reference. For purposes of this description of debt     
securities, references to "Lubrizol" include only The Lubrizol Corporation and  
not its subsidiaries.                                                           

GENERAL                                                                         

The indenture does not limit the aggregate principal amount of debt   
securities that Lubrizol may issue thereunder and provides that Lubrizol may    
issue debt securities thereunder from time to time in one or more series.       
(Section 3.1) The indenture does not limit the amount of other Debt (as defined 
below) or debt securities, other than certain secured Debt as described below,  
which Lubrizol or its subsidiaries may issue.                                   

   Unless otherwise provided in a prospectus supplement, the debt securities
will be unsecured obligations of Lubrizol, ranking senior in right of payment to
all future obligations of Lubrizol that are, by their terms, expressly          
subordinated in right of payment to the debt securities and equally in right of 
payment with all existing and future unsecured obligations of Lubrizol that are 
not so subordinated.                                                            

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The prospectus supplement relating to the particular debt securities  
offered thereby will describe the following terms of the offered debt           
securities:                                                                     

- the title of such debt securities and the series in which such debt 
securities will be included, which may include medium-term notes; 

  - any limit upon the aggregate principal amount of such debt securities;

   - the date or dates, or the method or methods, if any, by which such date
or dates will be determined, on which the principal of such debt  
securities will be payable;                                       

  - the rate or rates at which such debt securities will bear interest, if
       any, which rate may be zero in the case of certain debt securities issued
 at an issue price representing a discount from the principal amount
    payable at maturity, or the method by which such rate or rates will be
     determined (including, if applicable, any remarketing option or similar
   method), and the date or dates from which such interest, if any, will
  accrue or the method by which such date or dates will be determined;

     - the date or dates on which interest, if any, on such debt securities will
     be payable and any regular record dates applicable to the date or dates
on which interest will be so payable;                             

 - whether and under what circumstances additional amounts in respect of
   certain taxes, fees, duties, assessments or governmental charges that
      might be imposed on holders of such debt securities will be payable and,
      if so, whether and on what terms Lubrizol will have the option to redeem
     such debt securities in lieu of paying such additional amounts (and the
terms of such option);                                            

     - the place or places where the principal of, any premium or interest on or
 any additional amounts with respect to such debt securities will be
     payable, any of such debt securities that are issued in registered form
       may be surrendered for registration of transfer or exchange, and any such
debt securities may be surrendered for conversion or exchange;    

     - whether any of such debt securities are to be redeemable at the option of
    Lubrizol and, if so, the date or dates on which, the period or periods
within which, the price or prices at which and the other terms and
     conditions upon which such debt securities may be redeemed, in whole or
in part, at the option of Lubrizol;                               

     - whether Lubrizol will be obligated to redeem or purchase any of such debt
      securities pursuant to any sinking fund or analogous provision or at the
      option of any holder thereof and, if so, the date or dates on which, the
  period or periods within which, the price or prices at which and the
other terms and conditions upon which such debt securities will be
      redeemed or purchased, in whole or in part, pursuant to such obligation,
and any provisions for the remarketing of such debt securities so 
redeemed or purchased;                                            

- if other than in denominations of $1,000 and any integral multiple  
     thereof, the denominations in which any debt securities to be issued in
   registered form will be issuable and, if other than a denomination of
    $5,000, the denominations in which any debt securities to be issued in
bearer form will be issuable;                                     

    - whether the debt securities will be convertible into other securities of
      Lubrizol and/or exchangeable for securities of other issuers and, if so,
 the terms and conditions upon which such debt securities will be so
convertible or exchangeable;                                      

   - if other than the principal amount, the portion of the principal amount
   (or the method by which such portion will be determined) of such debt
     securities that will be payable upon declaration of acceleration of the
maturity thereof;                                                 

    - if other than U.S. dollars, the currency of payment, including composite
currencies, of the principal of, any premium or interest on or any
additional amounts with respect to any of such debt securities;   

  - whether the principal of, any premium or interest on or any additional
  amounts with respect to such debt securities will be payable, at the
election of Lubrizol or a holder, in a currency other than that in

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       which such debt securities are stated to be payable and the date or dates
   on which, the period or periods within which, and the other terms and
conditions upon which such election may be made;                  

- any index, formula or other method used to determine the amount of  
    payments of principal of, any premium or interest on or any additional
amounts with respect to such debt securities;                     

    - whether such debt securities are to be issued in the form of one or more
   global securities and, if so, the identity of the depositary for such
global security or securities;                                    

- any deletions from, modifications of or additions to the Events of  
    Default or covenants of Lubrizol with respect to such debt securities;

   - whether the provisions described below under "Discharge, Defeasance and
Covenant Defeasance" will be applicable to such debt securities;  

     - whether any of such debt securities are to be issued upon the exercise of
     warrants, and the time, manner and place for such debt securities to be
authenticated and delivered; and                                  

   - any other terms of such debt securities and any other deletions from or
 modifications or additions to the indenture in respect of such debt
securities. (Section 3.1)                                         

     Lubrizol will have the ability under the indenture to "reopen" a previously
issued series of debt securities and issue additional debt securities of that   
series or establish additional terms of that series. Lubrizol is also permitted 
to issue debt securities with the same terms as previously issued debt          
securities. (Section 3.1)                                                       

    Unless otherwise provided in the related prospectus supplement, principal,
premium, interest and additional amounts, if any, with respect to any debt      
securities will be payable at the office or agency maintained by Lubrizol for   
such purposes (initially the designated corporate trust office of the trustee). 
In the case of debt securities issued in registered form, interest may be paid  
by check mailed to the persons entitled thereto at their addresses appearing on 
the security register or by transfer to an account maintained by the payee with 
a bank located in the United States. Interest on debt securities issued in      
registered form will be payable on any interest payment date to the persons in  
whose names the debt securities are registered at the close of business on the  
regular record date with respect to such interest payment date. All paying      
agents initially designated by Lubrizol for the debt securities will be named in
the related prospectus supplement. Lubrizol may at any time designate additional
paying agents or rescind the designation of any paying agent or approve a change
in the office through which any paying agent acts, except that Lubrizol will be 
required to maintain a paying agent in each place where the principal of, any   
premium or interest on or any additional amounts with respect to the debt       
securities are payable. (Sections 3.7 and 10.2)                                 

  Unless otherwise provided in the related prospectus supplement, the debt
securities may be presented for transfer (duly endorsed or accompanied by a     
written instrument of transfer, if so required by Lubrizol or the security      
registrar) or exchanged for other debt securities of the same series (containing
identical terms and provisions, in any authorized denominations, and of a like  
aggregate principal amount) at the office or agency maintained by Lubrizol for  
such purposes (initially the designated corporate trust office of the trustee). 
Such transfer or exchange will be made without service charge, but Lubrizol may 
require payment of a sum sufficient to cover any tax or other governmental      
charge and any other expenses then payable. Lubrizol will not be required to (1)
issue, register the transfer of, or exchange debt securities during a period    
beginning at the opening of business 15 days before the day of mailing of a     
notice of redemption of any such debt securities and ending at the close of     
business on the day of such mailing or (2) register the transfer of or exchange 
any debt security so selected for redemption in whole or in part, except the    
unredeemed portion of any debt security being redeemed in part. (Section 3.5)   
Lubrizol has appointed the trustee as security registrar. Any transfer agent (in
addition to the security registrar) initially designated by Lubrizol for any    
debt securities will be named in the related prospectus supplement. Lubrizol may
at any time designate additional transfer agents or rescind the designation of  
any transfer agent or approve a change in the office through which any transfer 
agent acts, except that Lubrizol will be required to maintain a transfer agent  
in each place                                                                   

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where the principal of, any premium or interest on or any additional amounts    
with respect to the debt securities are payable. (Section 10.2)                 

  Unless otherwise provided in the related prospectus supplement, the debt
securities will be issued only in fully registered form without coupons in      
minimum denominations of $1,000 and any integral multiple thereof. (Section 3.2)
The debt securities may be represented in whole or in part by one or more global
debt securities registered in the name of a depositary or its nominee and, if so
represented, interests in such global debt security will be shown on, and       
transfers thereof will be effected only through, records maintained by the      
designated depositary and its participants as described below. Where debt       
securities of any series are issued in bearer form, the special restrictions and
considerations, including special offering restrictions and special United      
States federal income tax considerations, applicable to such debt securities and
to payment on and transfer and exchange of such debt securities will be         
described in the related prospectus supplement.                                 

 The debt securities may be issued as original issue discount securities
(bearing no interest or bearing interest at a rate which at the time of issuance
is below market rates) to be sold at a substantial discount below their         
principal amount. Special United States federal income tax and other            
considerations applicable to original issue discount securities will be         
described in the related prospectus supplement.                                 

If the purchase price of any debt securities is payable in one or more
foreign currencies or currency units or if any debt securities are denominated  
in one or more foreign currencies or currency units or if the principal of, or  
any premium or interest on, or any additional amounts with respect to, any debt 
securities is payable in one or more foreign currencies or currency units, the  
restrictions, elections, certain United States federal income tax               
considerations, specific terms and other information with respect to such debt  
securities and such foreign currency or currency units will be set forth in the 
related prospectus supplement.                                                  

   Lubrizol will comply with Section 14(e) of the Securities Exchange Act of
1934 and any tender offer rules under the Securities Exchange Act of 1934, to   
the extent applicable, in connection with any obligation of Lubrizol to purchase
debt securities at the option of the holders. Any such obligation applicable to 
a series of debt securities will be described in the related prospectus         
supplement.                                                                     

    Unless otherwise described in a prospectus supplement relating to any debt
securities, other than as described below under "-- Limitation on Liens" and    
"-- Limitation on Sale/Leaseback Transactions," the indenture does not contain  
any provisions that would limit the ability of Lubrizol to incur indebtedness or
that would afford holders of debt securities protection in the event of a sudden
and significant decline in the credit quality of Lubrizol or a takeover,        
recapitalization or highly leveraged or similar transaction involving Lubrizol. 
Accordingly, Lubrizol could in the future enter into transactions that could    
increase the amount of indebtedness outstanding at that time or otherwise affect
Lubrizol's capital structure or credit rating. You should refer to the          
prospectus supplement relating to a particular series of debt securities for    
information regarding any deletions from, modifications of or additions to the  
Events of Defaults described below or covenants of Lubrizol contained in the    
indenture, including any addition of a covenant or other provisions providing   
event risk or similar protection.                                               

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GUARANTEES                                                                      

     The debt securities will be jointly and severally guaranteed by each of the
following wholly owned, direct and indirect domestic Subsidiaries of Lubrizol:  

                                                                [Download Table]
                                                                                 
- 1500 West Elizabeth Corporation                - MPP Pipeline Corporation      
- Carroll Scientific Inc.                        - Noveon International, Inc.    
- Chemron Corporation                            - Noveon, Inc.                  
- CPI Engineering Services, Inc.                 - FCC Acquisition Corp.         
- Engine Control Systems Ltd.                    - Noveon China, Inc.            
- Gateway Additive Company                       - Noveon Diamalt, Inc.          
- Lubricant Investments, Inc.                    - Noveon FCC, Inc.              
- Lubrizol China, Inc.                           - Noveon Hilton Davis, Inc.     
- Lubrizol Enterprises, Inc.                     - Noveon Holding Corporation    
- Lubrizol Foam Control Additives, Inc.          - Noveon Investments, LLC       
- Lubrizol Holding Inc.                          - Noveon IP Holdings Corp.      
- Lubrizol Inter-Americas Corporation            - Noveon Kalama, Inc.           
- Lubrizol International Management Corporation  - Noveon Textile Chemicals, Inc.
- Lubrizol Overseas Trading Corporation          - Performance Materials I Inc.  
- Lubrizol Performance Systems Inc.              - Performance Materials II LLC  
- LZ Holding Corporation                                                         

   The Guarantee of each Guarantor will be a general unsecured obligation of
such Guarantor and will rank senior in right of payment to all future           
obligations of such Guarantor that are, by their terms, expressly subordinated  
in right of payment to such Guarantee and equally in right of payment with all  
existing and future unsecured obligations of such Guarantor that are not so     
subordinated. The debt securities will be effectively subordinated to the       
obligations of each of Lubrizol's direct and indirect Subsidiaries that are not 
a Guarantor of the debt securities. The Guarantee of each Guarantor of the debt 
securities of any series will rank equally with the Guarantee of such Guarantor 
of the debt securities of each other series. No stock representing more than 65%
of the voting power of any foreign entity held directly or indirectly by a      
Guarantor will be deemed to serve as security for the debt securities under the 
Guarantees.                                                                     

The Guarantee of a Guarantor will be released:                        

  - in connection with any sale or other disposition of all of the Capital
       Stock of such Guarantor to a Person other than Lubrizol or any Subsidiary
of Lubrizol;                                                      

    - in connection with the sale or other disposition of all or substantially
all of the assets of such Guarantor, including by way of merger,  
   consolidation or otherwise, to a Person other than to Lubrizol or any
Subsidiary of Lubrizol;                                           

  - in the case of any Restricted Subsidiary that is required to Guarantee
  outstanding debt securities pursuant to the covenant described under
      "-- Issuance of Subsidiary Guarantees," upon the release or discharge of
  the guarantee of such Restricted Subsidiary of debt of Lubrizol that
resulted in the obligation to so Guarantee the debt securities; or

    - upon the release of such Guarantor from all of its obligations under its
   guarantee granted in favor of the lenders under the Credit Agreement.

   The amount of each Guarantee will be limited to the extent required under
applicable fraudulent conveyance laws to cause such Guarantee to be enforceable.

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CONVERSION AND EXCHANGE                                                         

   The terms, if any, on which debt securities of any series are convertible
into or exchangeable for other securities, whether or not issued by Lubrizol,   
property or cash, or a combination of any of the foregoing, will be set forth in
the related prospectus supplement. Such terms may include provisions for        
conversion or exchange, either mandatory, at the option of the holder, or at the
option of Lubrizol, in which the securities, property or cash to be received by 
the holders of the debt securities would be calculated according to the factors 
and at such time as described in the related prospectus supplement.             

GLOBAL SECURITIES                                                               

  The debt securities of a series may be issued in whole or in part in the
form of one or more global debt securities that will be deposited with, or on   
behalf of, a depositary identified in the prospectus supplement relating to such
series.                                                                         

   The specific terms of the depositary arrangement with respect to a series
of debt securities will be described in the prospectus supplement relating to   
such series. Lubrizol anticipates that the following provisions will apply to   
all depositary arrangements.                                                    

Upon the issuance of a global security, the depositary for such global
security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the debt securities represented by  
such global security. Such accounts will be designated by the underwriters or   
agents with respect to such debt securities, or by Lubrizol if such debt        
securities are offered and sold directly by Lubrizol. Ownership of beneficial   
interests in a global security will be limited to persons that may hold         
interests through participants. Ownership of beneficial interests in such global
security will be shown on, and the transfer of that ownership will be effected  
only through, records maintained by the depositary or its nominee (with respect 
to interests of participants) and on the records of participants (with respect  
to interests of persons other than participants). The laws of some states       
require that certain purchasers of securities take physical delivery of such    
securities in definitive form. Such limits and such laws may impair the ability 
to transfer beneficial interests in a global security.                          

 So long as the depositary for a global security, or its nominee, is the
registered owner of such global security, such depositary or such nominee, as   
the case may be, will be considered the sole owner or holder of the debt        
securities represented by such global security for all purposes under the       
indenture. Except as described below, owners of beneficial interests in a global
security will not be entitled to have debt securities of the series represented 
by such global security registered in their names and will not receive or be    
entitled to receive physical delivery of debt securities of that series in      
definitive form.                                                                

    Principal of, any premium and interest on, and any additional amounts with
respect to, debt securities registered in the name of a depositary or its       
nominee will be made to the depositary or its nominee, as the case may be, as   
the registered owner of the global security representing such debt securities.  
None of Lubrizol, any Guarantor, the trustee, any paying agent or the security  
registrar will have any responsibility or liability for any aspect of the       
records relating to or payments made on account of beneficial ownership         
interests of the global security for such debt securities or for maintaining,   
supervising or reviewing any records relating to such beneficial ownership      
interests.                                                                      

     Lubrizol expects that the depositary for a series of debt securities or its
nominee, upon receipt of any payment with respect to such debt securities, will 
credit immediately participants' accounts with payments in amounts proportionate
to their respective beneficial interest in the principal amount of the global   
security for such debt securities as shown on the records of such depositary or 
its nominee. Lubrizol also expects that payments by participants to owners of   
beneficial interests in such global security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in "street name," 
and will be the responsibility of such participants.                            

The indenture provides that if (1) the depositary for a series of debt
securities notifies Lubrizol that it is unwilling or unable to continue as      
depositary or if such depositary ceases to be eligible under the indenture      

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and a successor depositary is not appointed by Lubrizol within 90 days of       
written notice, (2) Lubrizol determines that debt securities of a particular    
series will no longer be represented by global securities and executes and      
delivers to the trustee a company order to such effect, or (3) an Event of      
Default has occurred and is continuing with respect to a series of debt         
securities, the global securities will be exchanged for debt securities of such 
series in definitive form of like tenor and of an equal aggregate principal     
amount, in authorized denominations. Such definitive debt securities will be    
registered in such name or names as the depositary shall instruct the trustee.  
(Section 3.5) It is expected that such instructions may be based upon directions
received by the depositary from participants with respect to ownership of       
beneficial interests in global securities.                                      

CERTAIN COVENANTS                                                               

LIMITATION ON LIENS                                                         

Under the indenture, Lubrizol will covenant that, so long as any debt 
securities are outstanding, it will not, nor will it permit any Restricted      
Subsidiary to, create, incur, assume, guarantee or otherwise permit to exist any
Debt secured by any mortgage, pledge, lien, security interest or other          
encumbrance (a "Lien") on any property (including shares of Capital Stock or    
Debt) of Lubrizol or any Restricted Subsidiary, whether now owned or hereafter  
acquired, without in any such case effectively providing, concurrently with the 
creation, incurrence, assumption or guarantee of any such Debt, that the debt   
securities (and, if Lubrizol shall so determine, any other Debt of Lubrizol or  
any Restricted Subsidiary that is not subordinate to the debt securities or the 
Guarantees and with respect to which the governing instruments require, or      
pursuant to which Lubrizol or such Restricted Subsidiary is otherwise obligated 
to provide, such security) shall be secured equally and ratably with or prior to
such Debt for at least the time period such other Debt is so secured; provided  
that Debt secured by such Liens may be created, incurred, assumed or guaranteed,
without equally and ratably securing outstanding debt securities, if the        
aggregate principal amount of all Debt then outstanding secured by Liens on     
property (including shares of Capital Stock and Debt) of Lubrizol and of any    
Subsidiary (not including Debt described in clauses (1) through (8) below) plus 
Attributable Debt of Lubrizol and its Subsidiaries in respect of sale/leaseback 
transactions described under "-- Limitation on Sale/ Leaseback Transactions"    
below that would otherwise be subject to the restrictions described under       
"-- Limitation on Sale/Leaseback Transactions," does not at the time the        
principal amount of such Debt is incurred exceed 15% of Consolidated Net        
Tangible Assets. If a secured revolving credit facility is established or       
increased without equally and ratably securing outstanding debt securities in   
compliance with the proviso in the immediately preceding sentence, then all     
subsequent borrowings under such revolving credit facility shall be deemed to be
permissible under the limitation contained in the proviso in the immediately    
preceding sentence. (Section 10.5)                                              

The foregoing restrictions shall not apply to Debt secured by:        

  (1) Liens on property of Lubrizol or any Restricted Subsidiary
    existing on the date of original issuance of the applicable series of debt
securities or such other date as may be specified for such series in  
accordance with the indenture;                                        

(2) Liens on property acquired by Lubrizol or any Restricted
Subsidiary (including acquisition through merger or consolidation),   
     provided that such Liens were in existence prior to and were not created in
contemplation of such acquisition and shall not extend to any other   
property of Lubrizol or any Restricted Subsidiary;                    

        (3) Liens on property (including in the case of a plant or facility,
    the land on which it is erected and fixtures comprising a part thereof) of
  Lubrizol or any Restricted Subsidiary securing the payment of all or any
 part of the purchase price or construction cost thereof or securing any
   Debt created, incurred, assumed or guaranteed prior to, at the time of or
     within 120 days after the latest of the acquisition of such property or the
  completion of such construction, for the purpose of financing all or any
  portion of the purchase price or construction cost thereof (provided, in
   the case of Liens securing the payment of all or any part of the purchase
     price of property of Lubrizol or any Restricted Subsidiary, as the case may
   be, or securing any Debt created, incurred, assumed or guaranteed for the
purposes of financing all                                             

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    or any part of such purchase price, such Liens are limited to the property
     then being acquired and fixed improvements thereon and the Capital Stock of
 any Person formed to acquire such property and provided further, in the
   case of Liens securing the payment of all or any part of the construction
    cost of any property of Lubrizol or any Restricted Subsidiary, as the case
   may be, or securing Debt created, incurred, assumed or guaranteed for the
    purpose of financing all or any part of such construction cost, such Liens
   are limited to the assets or property then being constructed and the land
    on which such property is erected and fixtures comprising a part thereof);

     (4) Liens on property of Lubrizol or any Restricted Subsidiary to
secure all or any part of the cost of development, construction,      
   alteration, repair or improvement of all or any part of such property, or
  to secure Debt created, incurred, assumed or guaranteed prior to, at the
time of or within 120 days after the latest of the completion of such 
development, construction, alteration, repair or improvement, for the 
   purpose of financing all or any part of such cost (provided such Liens do
not extend to or cover any property of Lubrizol or any Restricted     
Subsidiary other than the property then being developed, constructed, 
altered, repaired or improved and the land on which such property is  
erected and fixtures comprising a part thereof);                      

      (5) Liens in favor of Lubrizol or a Restricted Subsidiary securing
Debt of Lubrizol or a Restricted Subsidiary;                          

 (6) Liens created in connection with tax assessments or legal
    proceedings and mechanic's and materialman's liens and other similar liens
created in the ordinary course of business;                           

          (7) Liens on property of Lubrizol or any Restricted Subsidiary (except
property consisting of the Capital Stock or Debt of Lubrizol or any   
Restricted Subsidiary) in favor of the United States of America or any
  State thereof, or any department, agency or instrumentality or political
     subdivision of either, or in favor of any other country, or any department,
     agency or instrumentality or political subdivision thereof, in each case to
    secure payments pursuant to contract or statute or to secure Debt created,
 incurred, assumed or guaranteed for the purpose of financing all or any
  part of the purchase price or the cost of construction or improvement of
   the property subject to such Liens, including Liens created in connection
with pollution control, industrial revenue bond or other similar      
financings; and                                                       

  (8) Certain permitted extensions, renewals or replacements (or
   successive extensions, renewals or replacements), in whole or in part, of
   any Lien referred to in the foregoing clauses (1) through (7), inclusive,
     provided that any of the foregoing are limited to the same property subject
to, and securing no more Debt than the Lien so extended, renewed or   
replaced.                                                             

 For purposes of the "Limitation on Liens" covenant described above, the
creation of a Lien on property (including shares of Capital Stock or Debt) of   
Lubrizol or any Restricted Subsidiary to secure Debt that existed prior to the  
creation of such Lien will be deemed to involve the creation of Debt secured by 
a Lien in an amount equal to the principal amount secured by such Lien.         

LIMITATION ON SALE/LEASEBACK TRANSACTIONS                                   

    The indenture provides that neither Lubrizol nor any Restricted Subsidiary
will enter into any arrangement after the date of original issuance of the      
applicable series of debt securities, or such other date as may be specified for
such series in accordance with the indenture, with any Person (other than       
Lubrizol or a Restricted Subsidiary) providing for the leasing to Lubrizol or a 
Restricted Subsidiary for a period of more than three years of any property     
which has been, or is to be, sold or transferred by Lubrizol or such Restricted 
Subsidiary to such Person or to any Person (other than Lubrizol or a Restricted 
Subsidiary) to which funds have been or are to be advanced by such Person on the
security of the leased property unless:                                         

        (a) Lubrizol or such Restricted Subsidiary would be permitted,
   pursuant to the provisions described under "-- Limitation on Liens"
    above, to incur Debt in a principal amount equal to or exceeding the
        Attributable Debt in respect of such sale/leaseback transaction, secured
   by a Lien on the property to be leased, without equally and ratably
    securing all outstanding debt securities issued under the indenture;

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            (b) since the date of the indenture and within a period commencing
   within six months prior to the consummation of such arrangement and
  ending six months after the consummation thereof, Lubrizol or such
  Restricted Subsidiary has expended or will expend for any property
(including amounts expended for the acquisition thereof or for  
      additions, alterations, improvements and repairs thereto) an amount up
        to the net proceeds of such arrangement and Lubrizol elects to designate
      such amount as a credit against such arrangement (with any such amount
    not being so designated to be applied as set forth in (c) below); or

            (c) Lubrizol, during or immediately after the expiration of the 12
    months after the consummation of such transaction, applies or causes
such Restricted Subsidiary to apply to the voluntary retirement,
  redemption or defeasance of debt securities of any series or other
        Funded Debt of Lubrizol (other than Funded Debt subordinated to the debt
        securities) or Funded Debt of such Restricted Subsidiary an amount equal
 to the greater of the net proceeds of the sale or transfer of the
      property leased in such transaction and the fair value, in the opinion
      of the Board of Directors of Lubrizol, of such property at the time of
      entering into such transaction (in either case adjusted to reflect the
      remaining term of the lease and any amount utilized by Lubrizol as set
        forth in (b) above), less an amount equal to the principal amount of any
      such Funded Debt of Lubrizol or such Restricted Subsidiary, other than
   debt securities, voluntarily retired by Lubrizol or such Restricted
Subsidiary during such 12 month period. (Section 10.6)          

ISSUANCE OF SUBSIDIARY GUARANTEES                                           

Lubrizol will not cause or permit any of its Restricted Subsidiaries, 
directly or indirectly, to guarantee any Debt of Lubrizol unless such Restricted
Subsidiary:                                                                     

        (1) executes and delivers to the trustee a supplemental indenture in
form reasonably satisfactory to the trustee pursuant to which such    
     Restricted Subsidiary shall unconditionally guarantee (each, a "Guarantee")
   all of Lubrizol's obligations under the debt securities and the indenture
on the terms set forth in the indenture; and                          

        (2) delivers to the trustee an opinion of counsel (which may contain
customary exceptions) that such supplemental indenture has been duly  
authorized, executed and delivered by such Restricted Subsidiary and  
constitutes a legal, valid, binding and enforceable obligation of such
Restricted Subsidiary.                                                

Thereafter, such Restricted Subsidiary shall be a Guarantor for all   
purposes of the indenture until such Guarantee is released in accordance with   
the provisions of the indenture. Lubrizol may cause any other Restricted        
Subsidiary of Lubrizol to issue a Guarantee and become a Guarantor under the    
indenture. (Section 10.7)                                                       

CONSOLIDATION, MERGER AND SALE OF ASSETS                                    

    The indenture provides that Lubrizol may not, in a single transaction or a
series of related transactions, consolidate or merge with or into any Person or 
sell, assign, transfer, lease, convey or otherwise dispose of (or cause or      
permit any Restricted Subsidiary to sell, assign, transfer, lease, convey or    
otherwise dispose of) all or substantially all of Lubrizol's properties and     
assets (determined on a consolidated basis for Lubrizol and its Restricted      
Subsidiaries) to any Person, unless (a) Lubrizol shall be the surviving or      
continuing corporation or the Person (if other than Lubrizol) formed by such    
consolidation or into which Lubrizol is merged or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition has been made shall
be a corporation organized and existing under the laws of the United States of  
America, any State thereof or the District of Columbia and shall expressly      
assume, by supplemental indenture satisfactory in form and substance to the     
trustee, the due and punctual payment of the principal of, any premium and      
interest on and any additional amounts with respect to all of the debt          
securities issued thereunder, and the performance of Lubrizol's obligations     
under such indenture and the debt securities issued thereunder, and shall       
provide for conversion or exchange rights in accordance with the provisions of  
the debt securities of any series that are convertible or exchangeable into     
common stock or other securities; (b) immediately before and                    

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after giving effect to such transaction and treating any Debt which becomes an  
Obligation of Lubrizol or one of its Subsidiaries as a result of such           
transaction as having been incurred by Lubrizol or such Subsidiary at the time  
of such transaction, no Event of Default, and no event which after notice or    
lapse of time or both would become an Event of Default, shall have occurred and 
be continuing; and (c) certain other conditions are met. Notwithstanding the    
foregoing restrictions in this paragraph, Lubrizol may (or cause or permit its  
Restricted Subsidiaries to) sell, assign, transfer, lease, convey or otherwise  
dispose of its Foreign Assets to Lubrizol or any of its Subsidiaries to the     
extent that such sale, assignment, transfer, lease, conveyance or disposition is
also permitted under the Credit Agreement. (Section 8.1)                        

    For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or         
substantially all of the properties and assets of one or more Restricted        
Subsidiaries, the Capital Stock of which constitutes all or substantially all of
the properties and assets of Lubrizol shall be deemed to be the transfer of all 
or substantially all of the properties and assets of Lubrizol.                  

     No Guarantor (other than any Guarantor whose Guarantee is to be released in
accordance with the terms of the Guarantee and the indenture) will, and Lubrizol
will not cause or permit any Guarantor to, consolidate or merge with or into or 
sell, assign, transfer, lease, convey or otherwise dispose of all or            
substantially all of its properties and assets to any Person, other than        
Lubrizol or any other Guarantor, unless (a) the Guarantor shall be the surviving
or continuing corporation or the Person (if other than the Guarantor) formed by 
such consolidation or into which the Guarantor is merged or the Person to which 
such sale, assignment, transfer, lease, conveyance or other disposition has been
made shall be a corporation organized and existing under the laws of the United 
States of America, any State thereof or the District of Columbia and shall      
expressly assume, by supplemental indenture satisfactory in form and substance  
to the trustee, all of the obligations of the Guarantor under the indenture and 
such Guarantor's Guarantee, and shall provide for conversion or exchange rights 
in accordance with the provisions of the debt securities of any series that are 
convertible or exchangeable into common stock or other securities; (b)          
immediately after giving effect to such transaction, no Event of Default, and no
event which after notice or lapse of time or both would become an Event of      
Default, shall have occurred and be continuing; and (c) certain other conditions
are met. Notwithstanding the foregoing restrictions in this paragraph, any      
Guarantor may, and Lubrizol may cause or permit any Guarantor to, sell, assign, 
transfer, lease, convey or otherwise dispose of its Foreign Assets to any other 
Subsidiary to the extent that such sale, assignment, transfer, lease, conveyance
or disposition is also permitted under the Credit Agreement. (Section 8.3)      

DEFINITION OF CERTAIN TERMS                                                     

    The term "Attributable Debt" as used in the indenture means, in respect of
any sale/leaseback transaction described under "-- Limitation on Sale/Leaseback 
Transactions" above, at any date as of which the amount thereof is to be        
determined, the total net amount of rent required to be paid by the lessee of   
the property subject to such sale/leaseback transaction under the lease included
in such transaction during the remaining term thereof (including any period for 
which such lease has been extended), discounted from the respective due dates   
thereof to such date at the rate per annum equal to the weighted average of the 
interest rate(s) of the debt securities, or, in the case of original issue      
discount securities, the yield to maturity, compounded semiannually. The net    
amount of rent required to be paid under any such lease for any such period     
shall be the aggregate amount of the rent payable by the lessee with respect to 
such period after excluding amounts required to be paid on account of           
maintenance and repairs, services, insurance, taxes, assessments, water rates   
and similar charges and contingent rents (such as those based on sales). In the 
case of any lease which is terminable by the lessee upon the payment of a       
penalty, such net amount of rent shall include the lesser of (i) the total      
discounted net amount of rent required to be paid from the later of the first   
date upon which such lease may be so terminated or the date of the determination
of such amount of rent, as the case may be, and (ii) the amount of such penalty 
(in which event no rent shall be considered as required to be paid under such   
lease subsequent to the first date upon which it may be so terminated). (Section
1.1)                                                                            

     The term "Capital Stock" as used in the indenture means (1) with respect to
any Person that is a corporation, any and all shares, interests, participations 
or other equivalents (however designated and whether                            

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or not voting) of corporate stock, including each class of common stock and     
preferred stock of such Persons, and (2) with respect to any Person that is not 
a corporation, any and all partnership or other equity interests of such Person.
(Section 1.1)                                                                   

    The term "Capitalized Lease Obligation" as used in the indenture means, as
to any Person, the obligations of such Person under a lease that are required to
be classified and accounted for as capitalized lease obligations under generally
accepted accounting principles and, for purposes of this definition, the amount 
of such obligations at any date shall be the capitalized amount of such         
obligations at such date, determined in accordance with generally accepted      
accounting principles. (Section 1.1)                                            

     The term "Consolidated Net Tangible Assets" as used in the indenture means,
as of any particular time, the aggregate amount of the Consolidated Assets (as  
defined in the indenture) of Lubrizol and its Subsidiaries (less depreciation,  
amortization and other applicable reserves and other items deductible therefrom 
under generally accepted accounting principles) after deducting therefrom (i)   
all current liabilities (excluding any which are by their terms extendible or   
renewable at the option of the obligor to a time more than 12 months after the  
time as of which the amount is being computed), (ii) all goodwill, trade names, 
trademarks, patents and other intangibles, in each case net of applicable       
amortization, and (iii) appropriate adjustments on account of minority interests
of other Persons holding stock of Subsidiaries, all as would be shown on a      
consolidated balance sheet of Lubrizol and its Subsidiaries, prepared in        
accordance with generally accepted accounting principles, as of the date of the 
most recent quarterly consolidated balance sheet of Lubrizol and its            
Subsidiaries, prepared in accordance with generally accepted accounting         
principles, provided that, in the case of the balance sheet as of the end of the
first, second or fourth quarterly fiscal periods of Lubrizol, the date of such  
balance sheet is not more than 125 days prior to the date of determination (130 
days for quarterly fiscal periods for fiscal years ending on or after December  
15, 2004 and before December 15, 2005) and, in the case of a balance sheet as of
the end of the third quarterly fiscal period of Lubrizol, the date of such      
balance sheet is not more than 150 days prior to the date of determination (165 
days for quarterly fiscal periods for fiscal years ending on or after December  
15, 2004 and before December 15, 2005). (Section 1.1)                           

The term "Credit Agreement" as used in the indenture means the credit 
agreement providing, inter alia, for revolving credit loans, term loans and/or  
letters of credit entered into among Lubrizol and/or any Subsidiary and one or  
more lenders on August 24, 2004, together with all related notes, letters of    
credit, collateral documents, guarantees, and any other related agreements and  
instruments executed and delivered in connection therewith, in each case as     
amended, modified, supplemented, refinanced, refunded or replaced in whole or in
part from time to time.                                                         

     The term "Debt" as used in the indenture means, with respect to any Person,
without duplication (1) Obligations of such Person for money borrowed; (2)      
Obligations of such Person evidenced by notes, debentures, bonds or other       
similar instruments; (3) all Capitalized Lease Obligations of such Person; (4)  
all Obligations of such Person issued or assumed as the deferred purchase price 
of property, all conditional sale obligations and all Obligations under any     
title retention agreement (but excluding trade accounts payable and other       
accrued liabilities arising in the ordinary course of business that are not     
overdue by 90 days or more or are being contested in good faith by appropriate  
proceedings promptly instituted and diligently conducted); (5) all Obligations  
of such Person for the reimbursement of any obligor on any letter of credit,    
banker's acceptance or similar credit transaction (other than Obligations with  
respect to letters of credit securing Obligations (other than Obligations       
described in (1) through (4) above) entered into in the ordinary course of      
business of such Person to the extent such letters of credit are not drawn upon 
or, if and to the extent drawn upon, such drawing is reimbursed no later than   
the third Business Day following receipt by such Person of a demand for         
reimbursement following payment on the letter of credit); (6) all Obligations of
the type referred to in clauses (1) through (5) of other Persons and all        
dividends of other Persons for the payment of which, in either case, such Person
is responsible or liable as obligor, guarantor or otherwise; (7) all Obligations
of any other Person of the type referred to in clauses (1) through (6) which are
secured by any Lien on any property or asset of such Person (whether or not such
Obligation is assumed by such Person), the amount of such Obligation being      
deemed to be the lesser of the fair market value of such property or assets or  
the amount of the Obligation so secured; and (8) any amendments, modifications, 
refundings, renewals or extensions of any indebtedness or obligation described  
as Debt in clauses (1) through (7) above. (Section 1.1)                         

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The term "Domestic Subsidiary" as used in the indenture means each    
Subsidiary of Lubrizol organized in the United States or a political subdivision
thereof.                                                                        

  The term "Foreign Assets" as used in the indenture means those assets of
Lubrizol or any of its Subsidiaries that (a) consist of capital stock or other  
equity interests of Subsidiaries that are not Domestic Subsidiaries, (b) are    
assets owned by Subsidiaries that are not Domestic Subsidiaries or (c) are      
located outside of the United States.                                           

     The term "Funded Debt" as used in the indenture means indebtedness created,
assumed or guaranteed by a Person for money borrowed that matures by its terms, 
or is renewable by the borrower to a date, more than 12 months after the date of
original creation, assumption or guarantee. (Section 1.1)                       

   The term "Obligations" as used in the indenture means all obligations for
principal, premium, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any     
Debt. (Section 1.1)                                                             

The term "Person" as used in the indenture means any individual,      
corporation, partnership, limited liability company, joint venture, joint-stock 
company, trust, unincorporated organization or government or any agency or      
political subdivision thereof. (Section 1.1)                                    

 The term "Restricted Subsidiary" as used in the indenture means (1) any
Wholly Owned Subsidiary of Lubrizol substantially all of the assets of which are
located in the United States (excluding territories or possessions) and (2) any 
Wholly Owned Subsidiary of Lubrizol which owns, directly or indirectly, any     
stock or indebtedness of a Restricted Subsidiary. (Section 1.1)                 

   The term "Subsidiary" as used in the indenture means, with respect to any
Person, (1) any corporation of which the outstanding Capital Stock having at    
least a majority of the votes entitled to be cast in the election of directors  
under ordinary circumstances shall at the time be owned, directly or indirectly,
by such Person and (2) any other Person of which at least a majority of the     
voting interest under ordinary circumstances is at the time, directly or        
indirectly, owned by such Person. (Section 1.1)                                 

 The term "Wholly Owned Subsidiary" means, with respect to Lubrizol, any
Subsidiary of which all the outstanding voting securities are owned by Lubrizol 
or any other Wholly Owned Subsidiary of Lubrizol. (Section 1.1)                 

EVENTS OF DEFAULT                                                               

    Each of the following events will constitute an Event of Default under the
indenture with respect to any series of debt securities issued thereunder       
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,  
decree or order of any court or any order, rule or regulation of any            
administrative or governmental body):                                           

      (1) default in the payment of any interest on any debt security of
   such series, or any additional amounts payable with respect thereto, when
  such interest becomes or such additional amounts become due and payable,
and continuance of such default for a period of 30 days;              

        (2) default in the payment of the principal of or any premium on any
debt security of such series, or any additional amounts payable with  
    respect thereto, when such principal or premium becomes or such additional
    amounts become due and payable either at maturity, upon any redemption, by
declaration of acceleration or otherwise;                             

       (3) default in the deposit of any sinking fund payment, when and as
due by the terms of any debt security of such series;                 

          (4) default in the performance, or breach, of any covenant or warranty
  contained in the indenture for the benefit of such series or in the debt
  securities of such series, and the continuance of such default or breach
for a period of 60 days after there has been given written notice as  
provided in the indenture;                                            

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        (5) if any event of default as defined in any mortgage, indenture or
instrument under which there may be issued, or by which there may be  
secured or evidenced, any Debt of Lubrizol or any of its Restricted   
   Subsidiaries (or the payment of which is guaranteed by Lubrizol or any of
     its Restricted Subsidiaries), including an Event of Default under any other
 series of debt securities, whether such Debt now exists or is hereafter
     created or incurred, happens and consists of default in the payment of more
   than $25,000,000 in principal amount of such Debt at the maturity thereof
 (after giving effect to any applicable grace period) or results in such
Debt in principal amount in excess of $25,000,000 becoming or being   
declared due and payable prior to the date on which it would otherwise
    become due and payable, and such default is not cured or such acceleration
 is not rescinded or annulled within a period of 30 days after there has
been given written notice as provided in the indenture;               

    (6) Lubrizol shall fail within 60 days to pay, bond or otherwise
     discharge any uninsured judgment or court order for the payment of money in
  excess of $25,000,000, which is not stayed on appeal or is not otherwise
being appropriately contested in good faith;                          

     (7) certain events in bankruptcy, insolvency or reorganization of
Lubrizol or the Guarantors;                                           

     (8) any Guarantee of any Guarantor ceases to be in full force and
   effect or any Guarantee of such Guarantor is declared to be null and void
     and unenforceable or any Guarantee of such Guarantor is found to be invalid
   or any Guarantor denies its liability under its Guarantee (other than the
   release of such Guarantor in accordance with the terms of the indenture);
and                                                                   

 (9) any other Event of Default provided in or pursuant to the
 indenture with respect to debt securities of such series. (Section 5.1)

  If an Event of Default with respect to the debt securities of any series
(other than an Event of Default described in (7) of the preceding paragraph)    
occurs and is continuing, either the trustee or the holders of not less than 25%
in principal amount of the outstanding debt securities of such series by written
notice as provided in the indenture may declare the principal amount (or such   
lesser amount as may be provided for in the debt securities of such series) of  
all outstanding debt securities of such series to be due and payable            
immediately. At any time after a declaration of acceleration has been made, but 
before a judgment or decree for payment of money has been obtained by the       
trustee, and subject to applicable law and certain other provisions of the      
indenture, the holders of not less than a majority in principal amount of the   
outstanding debt securities of such series may, under certain circumstances,    
rescind and annul such declaration of acceleration. An Event of Default         
described in (7) of the preceding paragraph shall cause the principal amount and
accrued interest (or such lesser amount as provided for in the debt securities  
of such series) to become immediately due and payable without any declaration or
other act by the trustee or any holder. (Section 5.2)                           

 The indenture provides that, within 90 days after the occurrence of any
event which is, or after notice or lapse of time or both would become, an Event 
of Default with respect to the debt securities of any series (a "default"), the 
trustee must transmit, in the manner set forth in such indenture, notice of such
default to the holders of the debt securities of such series unless such default
has been cured or waived; provided, however, that except in the case of a       
default in the payment of principal of, or premium, if any, or interest, if any,
on, or additional amounts or any sinking fund installment with respect to, any  
debt security of such series, the trustee may withhold such notice if and so    
long as the board of directors, the executive committee or a trust committee of 
directors and/or responsible officers of the trustee in good faith determine    
that the withholding of such notice is in the best interest of the holders of   
debt securities of such series; and provided, further, that in the case of any  
default of the character described in (5) of the second preceding paragraph, no 
such notice to holders will be given until at least 30 days after the default   
occurs. (Section 6.2)                                                           

  If an Event of Default occurs and is continuing with respect to the debt
securities of any series, the trustee may in its discretion proceed to protect  
and enforce its rights and the rights of the holders of debt securities of such 
series by all appropriate judicial proceedings. (Section 5.3) The indenture     
provides that, subject to the duty of the trustee during any default to act with
the required standard of care, the trustee will be under no obligation to       
exercise any of its rights or powers under such indenture at the request or     
direction                                                                       

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of any of the holders of debt securities, unless such holders shall have offered
to the trustee reasonable indemnity. (Section 6.1) Subject to such provisions   
for the indemnification of the trustee, and subject to applicable law and       
certain other provisions of the indenture, the holders of a majority in         
principal amount of the outstanding debt securities of any series will have the 
right to direct the time, method and place of conducting any proceeding for any 
remedy available to the trustee, or exercising any trust or power conferred on  
the trustee, with respect to the debt securities of such series. (Section 5.12) 

MODIFICATION AND WAIVER                                                         

     Lubrizol and the trustee may modify or amend the indenture with the consent
of the holders of not less than a majority in principal amount of the           
outstanding debt securities of each series affected thereby; provided, however, 
that no such modification or amendment may, without the consent of the holder of
each outstanding debt security affected thereby:                                

- change the stated maturity of the principal of, or any premium or   
    installment of interest on, or any additional amounts with respect to,
any debt security;                                                

     - reduce the principal amount of, or the rate (or modify the calculation of
      such rate) of interest on, or any additional amounts with respect to, or
any premium payable upon the redemption of, any debt security;    

  - change the obligation of Lubrizol and the Guarantors to pay additional
amounts with respect to any debt security;                        

     - reduce the amount of the principal of an original issue discount security
     that would be due and payable upon a declaration of acceleration of the
maturity thereof or the amount thereof provable in bankruptcy;    

 - change the redemption provisions of any debt security or the right of
   repayment at the option of any holder of any debt security, in either
case, in a manner adverse to the holder;                          

- change the place of payment or the coin or currency in which the    
     principal of, any premium or interest on or any additional amounts with
respect to any debt security is payable;                          

    - impair the right to institute suit for the enforcement of any payment on
   or after the stated maturity of any debt security (or, in the case of
      redemption, on or after the redemption date or, in the case of repayment
at the option of any holder, on or after the repayment date);     

- reduce the percentage in principal amount of the outstanding debt   
   securities, the consent of whose holders is required in order to take
specific actions;                                                 

- reduce the requirements for quorum or voting by holders of debt     
securities in Section 15.4 of the indenture;                      

 - modify any of the provisions in the indenture regarding the waiver of
      past defaults and the waiver of certain covenants by the holders of debt
      securities except to increase any percentage vote required or to provide
  that other provisions of such indenture cannot be modified or waived
       without the consent of the holder of each debt security affected thereby;

   - make any change that adversely affects the right to convert or exchange
 any debt security into or for other securities of Lubrizol or other
securities, cash or property in accordance with its terms;        

    - release any Guarantor from any of its obligations under its Guarantee or
       the indenture otherwise in accordance with the terms of the indenture; or

- modify any of the above provisions. (Section 9.2)                   

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 Lubrizol and the trustee may modify or amend the indenture and the debt
securities of any series without the consent of any holder in order to, among   
other things:                                                                   

- provide for a successor to Lubrizol or a Guarantor pursuant to a    
consolidation, merger or sale of assets;                          

     - add to the covenants of Lubrizol or the Guarantors for the benefit of the
       holders of all or any series of debt securities or to surrender any right
  or power conferred upon Lubrizol or the Guarantors by the indenture;

- add to or change any provisions of the indenture relating to the    
      registration and exchange of bearer debt securities, change or eliminate
     restrictions on payments with respect to debt securities, or permit the
      issuance of debt securities in uncertificated form, all in a manner that
       will not materially adversely affect the interests of the holders of debt
securities of any series;                                         

- establish the form or terms of debt securities of a series;         

  - provide for a successor trustee with respect to the debt securities of
all or any series;                                                

- cure any ambiguity or correct or supplement any provision in the    
indenture which may be defective or inconsistent with any other   
   provision, or to make any other provisions with respect to matters or
      questions arising under the indenture that will not materially adversely
   affect the interests of the holders of debt securities of any series;

 - change the conditions, limitations and restrictions on the authorized
     amount, terms or purposes of issue, authentication and delivery of debt
securities under the indenture;                                   

     - add any additional Events of Default with respect to all or any series of
debt securities;                                                  

  - supplement any provisions of the indenture to permit or facilitate the
   defeasance and discharge of any series of debt securities in a manner
       that will not materially adversely affect the interests of the holders of
debt securities of any series;                                    

- secure the debt securities;                                         

     - provide for conversion or exchange rights of the holders of any series of
debt securities; or                                               

- make any other change that does not materially adversely affect the 
    interests of the holders of any debt securities then outstanding under
the indenture. (Section 9.1)                                      

   The holders of at least a majority in principal amount of the outstanding
debt securities of any series may, on behalf of the holders of all debt         
securities of that series, waive compliance by Lubrizol with certain covenants  
of the indenture. (Section 10.9) The holders of not less than a majority in     
principal amount of the outstanding debt securities of any series on behalf of  
the holders of all debt securities of that series may waive any past default and
its consequences under the indenture with respect to the debt securities of that
series, except a default (1) in the payment of principal, any premium or        
interest on or any additional amounts with respect to debt securities of such   
series or (2) in respect of a covenant or provision of the indenture that cannot
be modified or amended without the consent of the holder of each outstanding    
debt security of any series affected. (Section 5.13)                            

     Under the indenture, Lubrizol is required to furnish the trustee annually a
statement as to its performance of certain of its obligations under that        
indenture and as to any default in such performance. Lubrizol is also required  
to deliver to the trustee, within five days after knowledge of the occurrence   
thereof, written notice of any Event of Default, or any event which after notice
or lapse of time or both would constitute an Event of Default, resulting from   
the failure to perform or breach of any covenant or warranty contained in the   
indenture or the debt securities of any series. (Section 10.10)                 

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DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE                                   

     Lubrizol and/or any Guarantors may discharge certain obligations to holders
of any series of debt securities that have not already been delivered to the    
trustee for cancellation and that either have become due and payable or will    
become due and payable within one year (or scheduled for redemption within one  
year) by depositing with the trustee, in trust, funds in U.S. dollars or in the 
Foreign Currency in which such debt securities are payable in an amount         
sufficient to pay the entire indebtedness on such debt securities with respect  
to principal and any premium, interest and additional amounts to the date of    
such deposit (if such debt securities have become due and payable) or to the    
maturity thereof, as the case may be. (Section 4.1)                             

   The indenture provides that, unless the provisions of Section 4.2 thereof
are made inapplicable to the debt securities of or within any series pursuant to
Section 3.1 thereof, Lubrizol may elect either (1) to defease and discharge     
itself and each Guarantor from any and all obligations with respect to such debt
securities (except for, among other things, obligations to register the transfer
or exchange of such debt securities, to replace temporary or mutilated,         
destroyed, lost or stolen debt securities, to maintain an office or agency with 
respect to such debt securities and to hold moneys for payment in trust)        
("defeasance") or (2) to release itself from its obligations with respect to    
such debt securities under certain covenants as described in the related        
prospectus supplement, and any omission or failure to comply with such          
obligations shall not constitute a default or an Event of Default with respect  
to such debt securities ("covenant defeasance"). Defeasance or covenant         
defeasance, as the case may be, shall be conditioned upon the irrevocable       
deposit by Lubrizol with the trustee, in trust, of an amount in U.S. dollars or 
in the Foreign Currency in which such debt securities are payable at stated     
maturity, or Government Obligations (as defined below), or both, applicable to  
such debt securities which through the scheduled payment of principal and       
interest in accordance with their terms will provide money in an amount         
sufficient to pay the principal of, any premium and interest on, and any        
additional amounts with respect to, such debt securities on the scheduled due   
dates. (Section 4.2)                                                            

Such a trust may only be established if, among other things, (1) the  
applicable defeasance or covenant defeasance does not result in a breach or     
violation of, or constitute a default under, the indenture or any other material
agreement or instrument to which Lubrizol or the Guarantors is a party or by    
which it is bound, (2) no Event of Default or event which with notice or lapse  
of time or both would become an Event of Default with respect to the debt       
securities to be defeased shall have occurred and be continuing on the date of  
establishment of such a trust and, with respect to defeasance only, at any time 
during the period ending on the 123rd day after such date and (3) Lubrizol has  
delivered to the trustee an opinion of counsel (as specified in the indenture)  
to the effect that the holders of such debt securities will not recognize       
income, gain or loss for United States federal income tax purposes as a result  
of such defeasance or covenant defeasance and will be subject to United States  
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance or covenant defeasance had not   
occurred, and such opinion of counsel, in the case of defeasance, must refer to 
and be based upon a letter ruling of the Internal Revenue Service received by   
Lubrizol, a Revenue Ruling published by the Internal Revenue Service or a change
in applicable United States federal income tax law occurring after the date of  
the indenture. (Section 4.2)                                                    

     "Foreign Currency" means any currency, currency unit or composite currency,
including, without limitation, the euro, issued by the government of one or more
countries other than the United States of America or by any recognized          
confederation or association of such governments. (Section 1.1)                 

"Government Obligations" means debt securities which are (1) direct   
obligations of the United States of America or the government or the governments
which issued the Foreign Currency in which the debt securities of a particular  
series are payable, for the payment of which its full faith and credit is       
pledged or (2) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America or such government 
or governments which issued the Foreign Currency in which the debt securities of
such series are payable, the timely payment of which is unconditionally         
guaranteed as a full faith and credit obligation by the United States of America
or such other government or governments, and which, in the case of clauses (1)  
and (2), are not callable or redeemable at the option of the issuer or          

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issuers thereof, and shall also include a depository receipt issued by a bank or
trust company as custodian with respect to any such Government Obligation or a  
specific payment of interest on or principal of or any other amount with respect
to any such Government Obligation held by such custodian for the account of the 
holder of such depository receipt, provided that (except as required by law)    
such custodian is not authorized to make any deduction from the amount payable  
to the holder of such depository receipt from any amount received by the        
custodian with respect to the Government Obligation or the specific payment of  
interest on or principal of or any other amount with respect to the Government  
Obligation evidenced by such depository receipt. (Section 1.1)                  

If after Lubrizol has deposited funds and/or Government Obligations to
effect defeasance or covenant defeasance with respect to debt securities of any 
series, (1) the holder of a debt security of that series is entitled to, and    
does, elect pursuant to Section 3.1 of the indenture or the terms of such debt  
security to receive payment in a currency other than that in which such deposit 
has been made in respect of such debt security, or (2) a Conversion Event occurs
in respect of the Foreign Currency in which such deposit has been made, the     
indebtedness represented by such debt security shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of,
any premium and interest on, and any additional amounts with respect to, such   
debt security as such debt security becomes due out of the proceeds yielded by  
converting the amount or other properties so deposited in respect of such debt  
security into the currency in which such debt security becomes payable as a     
result of such election or such Conversion Event based on (a) in the case of    
payments made pursuant to clause (1) above, the applicable market exchange rate 
for such currency in effect on the second business day prior to such payment    
date, or (b) with respect to a Conversion Event, the applicable market exchange 
rate for such Foreign Currency in effect (as nearly as feasible) at the time of 
the Conversion Event. (Section 4.2)                                             

 "Conversion Event" means the cessation of use of (1) a Foreign Currency
both by the government of the country or the confederation which issued such    
Foreign Currency and for the settlement of transactions by a central bank or    
other public institutions of or within the international banking community or   
(2) any currency unit or composite currency for the purposes for which it was   
established. All payments of principal of, any premium and interest on, and any 
additional amounts with respect to, any debt security that are payable in a     
Foreign Currency that ceases to be used by the government or governments of     
issuance shall be made in U.S. dollars. (Section 1.1)                           

    In the event Lubrizol effects covenant defeasance with respect to any debt
securities and such debt securities are declared due and payable because of the 
occurrence of any Event of Default other than an Event of Default with respect  
to any covenant as to which there has been covenant defeasance, the amount in   
such Foreign Currency in which such debt securities are payable, and Government 
Obligations on deposit with the trustee, will be sufficient to pay amounts due  
on such debt securities at the time of the stated maturity but may not be       
sufficient to pay amounts due on such debt securities at the time of the        
acceleration resulting from such Event of Default. However, Lubrizol would      
remain liable to make payment of such amounts due at the time of acceleration.  

NEW YORK LAW TO GOVERN                                                          

    The indenture, the debt securities and the Guarantees will be governed by,
and construed in accordance with, the laws of the State of New York applicable  
to agreements made or instruments entered into and, in each case, performed in  
that state. (Section 1.13)                                                      

PLAN OF DISTRIBUTION

     We may sell our securities from time to time by any method permitted by the
Securities Act of 1933, including in the following ways:                        

 - through one or more underwriters on a firm commitment or best-efforts
basis;                                                            

- directly to one or more purchasers;                                 

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- through agents;                                                     

    - through broker-dealers, who may act as agents or principals, including a
     block trade in which a broker or dealer so engaged will attempt to sell
  the securities as agent but may position and resell a portion of the
block as principal to facilitate the transaction;                 

- in privately negotiated transactions; and                           

- in any combination of these methods of sale.                        

  We may also make direct sales through subscription rights distributed to
our shareholders on a pro rata basis, which may or may not be transferable. In  
any distribution of subscription rights to shareholders, if all of the          
underlying securities are not subscribed for, we may then sell the unsubscribed 
securities directly to third parties or may engage the services of one or more  
underwriters, dealers or agents, including standby underwriters, to sell the    
unsubscribed securities to third parties.                                       

   The applicable prospectus supplement will set forth the specific terms of
the offering of our securities including the name or names of any underwriters, 
dealers or agents; the purchase price of the securities and the proceeds to us  
from the sale; any underwriting discounts and commissions or agency fees and    
other items constituting underwriters' or agents' compensation; the initial     
offering price to the public and any discounts or concessions allowed or        
reallowed or paid to dealers; and any securities exchange on which the          
securities may be listed. Any public offering price, discounts or concessions   
allowed or reallowed or paid to dealers may be changed from time to time.       

  Unless otherwise specified in the applicable prospectus supplement, each
series of securities will be a new issue with no established trading market,    
other than our common shares, which are currently listed on the NYSE. We expect 
that any common shares sold pursuant to a prospectus supplement will be listed  
on the NYSE. We may elect to list any series of debt securities on an exchange, 
but we are not obligated to do so. It is possible that one or more underwriters 
may make a market in a series of securities, but such underwriters will not be  
obligated to do so and may discontinue any market making at any time without    
notice. Therefore, no assurance can be given as to the liquidity of, or the     
trading market for, any series of debt securities that we may issue.            

     The distribution of the securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed), at      
market prices prevailing at the time of sale, at prices related to the          
prevailing market prices or at negotiated prices.                               

    Offers to purchase our securities may be solicited by agents designated by
us from time to time. Broker-dealers or agents may receive compensation in the  
form of commissions, discounts or concessions from us. Broker-dealers or agents 
may also receive compensation from the purchasers of the securities for whom    
they sell as principals. Each particular broker-dealer will receive compensation
in amounts negotiated in connection with the sale, which might be in excess of  
customary commissions. Broker-dealers or agents and any other participating     
broker-dealers participating in the distribution of our securities may be deemed
to be underwriters, and any discounts and commissions received by them and any  
profit realized by them on resale of the securities may be deemed to be         
underwriting discounts and commissions.                                         

If required under applicable state securities laws, we will sell the  
securities only through registered or licensed brokers or dealers. In addition, 
in some states, we may not sell securities unless they have been registered or  
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and complied with.                    

  If the securities are sold by means of an underwritten offering, we will
execute an underwriting agreement with an underwriter or underwriters, and the  
names of the specific managing underwriter or underwriters, as well as any other
underwriters, and the terms of the transaction, including commissions, discounts
and any other compensation of the underwriters and dealers, if any, will be set 
forth in the applicable prospectus supplement, which will be used by the        
underwriters to make resales of the securities. Under agreements into which we  
may enter, underwriters, dealers and agents who participate in the              

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distribution of the securities may be entitled to indemnification by us against 
some liabilities, including liabilities under the Securities Act of 1933.       

    If we use underwriters for an offering of securities, the underwriters may
acquire the securities for their own accounts. The underwriters may resell the  
securities from time to time in one or more transactions at a fixed price or    
prices, which may be changed, at varying prices determined by the underwriters  
at the time of sale, or at negotiated prices. We also may, from time to time,   
authorize underwriters acting as our agents to offer and sell the securities    
upon the terms and conditions as will be set forth in the applicable prospectus 
supplement. In connection with the sale of the securities, underwriters may be  
deemed to have received compensation from us in the form of underwriting        
discounts or commissions and also may receive commissions from purchasers of the
securities. Underwriters may sell the securities to or through dealers, who may 
receive compensation in the form of discounts, concessions from the underwriters
and/or commissions from the purchasers of the securities.                       

Any underwriting compensation paid by us to underwriters or agents in 
connection with any offering of the securities and any discounts, concessions or
commissions allowed by underwriters to participating dealers will be set forth  
in the applicable prospectus supplement. Underwriters, dealers and agents       
participating in the distribution of our securities may be deemed to be         
underwriters, and any discounts and commissions received by them and any profit 
realized by them on resale of the securities may be deemed to be underwriting   
discounts and commissions.                                                      

   If so indicated in the applicable prospectus supplement, we may authorize
underwriters, dealers or agents to solicit offers from certain types of         
institutions to purchase securities from us at the public offering price set    
forth in the applicable prospectus supplement pursuant to delayed delivery      
contracts providing for payment and delivery on a future date. Institutions with
which delayed delivery contracts may be made include commercial and savings     
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions. The applicable prospectus      
supplement will set forth the commission payable for solicitation of such       
offers.                                                                         

 Our securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by the managing     
underwriters. If any underwriters are utilized in the sale of the securities,   
the underwriting agreement will provide that the obligations of the underwriters
are subject to specified conditions precedent. If we sell our securities to one 
or more underwriters on a firm commitment basis, then the underwriters will be  
obligated to purchase all of the securities offered if any are purchased.       

    We may grant to the underwriters options to purchase additional securities
to cover over-allotments, if any, at the public offering price with additional  
underwriting discounts or commissions, as may be set forth in the applicable    
prospectus supplement. If we grant any over-allotment option, the terms of the  
over-allotment option will be set forth in the applicable prospectus supplement.

 In connection with any offering, persons participating in the offering,
such as any underwriters, may purchase and sell the securities in the open      
market. These transactions may include over-allotment and stabilizing           
transactions and purchases to cover syndicate short positions created in        
connection with the offering. Stabilizing transactions consist of bids or       
purchases for the purpose of preventing or retarding a decline in the market    
price of the securities and syndicate short positions involve the sale by       
underwriters of a greater number of securities than they are required to        
purchase from us in the offering. Underwriters also may impose a penalty bid,   
whereby selling concessions allowed to syndicate members or other broker-dealers
in respect of the securities sold in the offering for their account may be      
reclaimed by the syndicate if the securities are repurchased by the syndicate in
stabilizing or covering transactions. These activities may stabilize, maintain  
or otherwise affect the market price of the securities, which may be higher than
the price that might prevail in the open market, and these activities, if       
commenced, may be discontinued at any time.                                     

     Any underwriters, dealers or agents involved in any distribution or sale of
our securities may be customers of, engage in transactions with or perform      
services for us from time to time.                                              

We will bear all costs, expenses and fees in connection with the      
registration of the securities as well as the expense of all commissions and    
discounts, if any, attributable to the sales of the securities by us.           

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LEGAL MATTERS 

  The validity of the securities that we are offering has been passed upon
for us by Thompson Hine LLP. Shearman & Sterling LLP, New York, New York, may   
pass upon legal matters for the underwriters with respect to any underwritten   
offering of common shares or debt securities. Shearman & Sterling LLP will rely 
upon Thompson Hine LLP with respect to matters of Ohio law.                     

EXPERTS 

 The consolidated financial statements of The Lubrizol Corporation as of
December 31, 2003 and 2002 and for each of the three years in the period ended  
December 31, 2003 incorporated in this prospectus by reference from The Lubrizol
Corporation's Current Report on Form 8-K dated August 20, 2004 have been audited
by Deloitte & Touche LLP, an independent registered public accounting firm, as  
stated in their report, which is incorporated herein by reference (which report 
expresses an unqualified opinion and includes an explanatory paragraph relating 
to the adoption of Statement of Financial Accounting Standards No. 142 in 2002),
and have been so incorporated in reliance upon the report of such firm given    
upon their authority as experts in accounting and auditing.                     

Ernst & Young LLP, independent registered public accounting firm, have
audited the consolidated financial statements of Noveon International, Inc. at  
December 31, 2003 and 2002 and for the years ended December 31, 2003 and 2002   
and for the ten months ended December 31, 2001, and the consolidated financial  
statements of BFGoodrich Performance Materials (a segment of Goodrich           
Corporation) for the two months ended February 28, 2001, as set forth in their  
reports, included in The Lubrizol Corporation's Current Report (Form 8-K) dated 
May 20, 2004 and incorporated by reference in The Lubrizol Corporation's Current
Report (Form 8-K/A) dated July 29, 2004, which are incorporated by reference in 
this prospectus. Ernst & Young LLP has also audited the consolidated financial  
statements of Noveon International, Inc. at December 31, 2003 and for the year  
then ended, as set forth in their report, included in The Lubrizol Corporation's
Current Report (Form 8-K) dated August 4, 2004, which is incorporated by        
reference in this prospectus. Such consolidated financial statements are        
incorporated by reference in reliance on Ernst & Young's reports given on their 
authority as experts in accounting and auditing.                                

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--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

$1,150,000,000

THE LUBRIZOL CORPORATION

4.625% SENIOR NOTES DUE 2009
5.5% SENIOR NOTES DUE 2014
6.5% SENIOR DEBENTURES DUE 2034 

(LUBRIZOL CORP LOGO)

------------
PROSPECTUS SUPPLEMENT 
SEPTEMBER 23, 2004

------------

CITIGROUP 

ABN AMRO INCORPORATED 

WACHOVIA SECURITIES 

KEYBANC CAPITAL MARKETS 

LAZARD

PNC CAPITAL MARKETS, INC. 

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B2’ Filing		Date		First		Last			Other Filings
		10/1/34		1		102
		6/15/25		101
		10/1/14		1		102
		10/1/09		1		102
		8/24/09		100					4
		12/1/08		52		100
		12/31/05		100					10-K,  10-K/A
		12/15/05		134
		9/30/05		100					10-Q,  8-K
		6/30/05		100					10-Q
		5/27/05		14		120
		4/1/05		1		102			4
		3/31/05		100					10-Q
		12/31/04		100					10-K
		12/15/04		134					4,  8-K
		9/30/04		23		100			10-Q
		9/28/04		1		102			4,  8-K
Filed on:		9/24/04							4,  424B2,  8-K
		9/23/04		1		144
		9/22/04		23					8-K
		8/30/04		8					4,  8-K
		8/27/04		1		117			4
		8/24/04		64		134			8-K,  S-3/A
		8/20/04		120		143			8-K
		8/15/04		122
		8/4/04		143					8-K,  S-3/A
		7/31/04		95
		7/29/04		143					4,  8-K/A
		6/30/04		3		121			10-Q,  15-15D,  4,  4/A
		6/3/04		3		119			3,  8-K,  8-K/A
		5/20/04		143					8-K,  S-3
		4/29/04		63
		3/31/04		120					10-Q
		3/15/04		70					4
		12/31/03		4		143			10-K
		12/15/03		70					4
		7/1/03		70
		6/30/03		3		83			10-Q,  10-Q/A,  4/A
		1/1/03		3		69			4
		12/31/02		11		143			10-K,  5
		1/1/02		20		69
		12/31/01		11		143			10-K
		12/15/01		20
		2/28/01		28		143			4,  4/A
		12/31/00		11		28			10-K405,  5
		12/31/99		11		28			10-K,  4,  5
		8/17/99		120					8-K
		10/1/97		120					8-A12B,  8-K
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