Arch Chemicals Reports Fourth Quarter and Full-Year 2005 Earnings

Highlights:

-- Sales for the full-year 2005 increased approximately 16 percent over the full-year 2004.

-- Earnings from continuing operations for the full-year 2005 increased significantly over full-year 2004.

-- Biocides portfolio strengthened with the purchase of the remaining 50 percent share of its water products joint venture, Nordesclor, in Brazil.

-- For the full-year 2006, operating margins for the HTH water products business are expected to be in the 7 to 8 percent range.

-- For the full-year 2006, sales are expected to grow by six to eight percent and earnings from continuing operations are expected to be in the $1.50 to $1.60 per share range.

ARCH CHEMICALS, INC. (NYSE: ARJ) announced full year sales of$1,305.1 million in 2005, a 16 percent increase, compared to $1,120.9million reported in 2004. Segment operating income was $80.2 millionin 2005 compared to $47.5 million in 2004. Earnings per share fromcontinuing operations were $1.67 for 2005 on $39.8 million of income,compared to $0.74 on income of $17.3 million a year ago. Included in2005 results is $13.2 million, or $0.32 per share, of other gains andan impairment charge. Excluding these items, earnings per share fromcontinuing operations were $1.35 for 2005 on $32.2 million of income.Earnings per share for the full year were $1.70 for 2005 on $40.5million of net income, compared to $0.84 on net income of $19.9million in 2004.

"I am pleased that Arch was able to post double-digit increases insales and earnings in 2005 despite high energy and raw material costs.We benefited from strong results in performance urethanes and recorddemand for our biocides used in antidandruff shampoos and marinepaints," said Chairman, President and CEO Michael E. Campbell. "Ourperformance supports our strategy of mitigating persistently high rawmaterial and energy costs by increasing prices and reducing costs. Inaddition, the transactions we completed in 2005 -- our purchase of theremaining 50 percent share of the Nordesclor water-sanitizer businessin Brazil, and the sale of a non-strategic joint venture -- furtherstrengthened our Biocides position and should help accelerate ourearnings growth."

Fourth quarter sales increased approximately 15 percent to $278.3million in 2005 compared to $241.8 million in 2004. The increase insales was attributable to higher volumes and improved pricing, offsetslightly by the unfavorable effect of foreign currency rates. Earningsper share from continuing operations were $0.21 for 2005 on $5.0million of income, compared to a loss of $0.36 per share on a loss of$8.6 million for 2004. Included in the fourth quarter of 2005 is $14.1million, or $0.34 per share, of other gains and an impairment charge.Excluding these items, results from continuing operations for thefourth quarter were a $0.13 loss per share on a loss of $3.2 million.Earnings per share for the quarter were $0.15 for 2005 on $3.6 millionof net income, compared to a loss of $0.59 per share on a net loss of$13.9 million in 2004.

The following compares segment sales and operating income (loss)for the fourth quarters of 2005 and 2004 (including equity in earningsof affiliated companies and excluding restructuring, impairment andcertain unallocated expenses of the corporate headquarters):

Treatment Products

Treatment Products reported sales of $209.0 million and anoperating loss of $0.3 million compared with sales of $195.5 millionand an operating loss of $0.7 million in 2004.

HTH Water Products

HTH water products reported sales of $63.3 million and anoperating loss of $11.5 million for 2005 compared to sales of $50.5million and an operating loss of $16.1 million for 2004.

Sales increased $12.8 million, or approximately 25 percent,principally due to higher North American residential swimming poolvolumes and pricing across most product lines, partially offset byunfavorable foreign currency rates.

Operating results improved $4.6 million primarily as a result ofthe higher sales and lower selling and administration costs due tocost containment initiatives in North America.

Personal Care and Industrial Biocides

Personal care and industrial biocides reported sales of $65.4million and operating income of $9.7 million compared to sales andoperating income of $61.7 million and $12.0 million, respectively, in2004.

Sales increased $3.7 million, or approximately six percent,principally due to higher volumes, partially offset by lower pricing.The higher volumes were attributable to continued strong demand forbiocides used in antidandruff products and in industrial applications,including marine antifouling paints. The decrease in pricing isprimarily a result of competitive pressures within the emulsions andin-can preservation markets in the industrial biocides business.

Operating income decreased $2.3 million. The decrease is primarilydue to the lower sales volumes and continued pricing pressures withinthe emulsions and in-can preservation markets in the industrialbiocides business. In addition, the industrial biocides business hadan extended plant shutdown to manage inventory levels due to lowerdemand. 2004 results benefited from the sale of toxicology data.

Wood Protection and Industrial Coatings

Wood protection and industrial coatings reported sales of $80.3million and operating income of $1.5 million compared to sales andoperating income of $83.3 million and $3.4 million, respectively, in2004.

Sales decreased $3.0 million, or approximately four percent,primarily due to unfavorable foreign exchange and lower volumes,partially offset by an increase in prices. The increase in volumes ofCCA products in the wood protection business was offset by lowervolumes in the industrial coatings business. The lower sales volumesin the industrial coatings business were predominately due to the lossof certain customers from competitive pressures within the Italianmarket and, to a lesser extent, the weakness in the Italian furnituremarket. Improved pricing in the industrial coatings business mitigatedhigher raw material costs.

Operating income decreased $1.9 million over the prior year as theimproved results in the industrial coatings business were more thanoffset by the lower operating results in the wood protection business.The operating income for industrial coatings improved as a result ofthe price increases in certain product lines to mitigate the higherraw material costs. The lower operating results in the wood protectionbusiness were due to higher raw materials costs.

Performance Products

Performance Products reported sales of $69.3 million and operatingincome of $10.7 million compared with sales and operating income of$46.3 million and $0.7 million, respectively, in 2004.

Performance urethanes sales increased approximately 53 percentover the prior year due to improved pricing and higher volumes. Theimproved pricing more than mitigated higher raw material costs. Theincrease in volumes was due to stronger demand for glycols andspecialty polyols and higher contract manufacturing business.Operating income improved $7.6 million which includes a $5.8 milliongain on the sale of excess land located in Brandenburg, Kentucky.Excluding the gain, operating income increased $1.8 million fromhigher sales, which were slightly offset by increased compensation andbenefits-related costs.

Hydrazine sales increased approximately 24 percent due primarilyto higher volumes of Ultra Pure(TM) Hydrazine. Operating resultsincreased $2.4 million, primarily due to the higher Ultra Pure(TM)Hydrazine sales, improved hydrazine hydrates pricing and savings fromcost-reduction efforts.

Other Items

The Company completed the divestment of its 50 percent share inthe Planar Solutions joint venture to FUJIFILM Electronic MaterialsUSA on November 30, 2005 for $10 million in cash and the assumption ofapproximately $7 million of guarantees of the joint venture's debt.Included in other (gains) and losses is a pre-tax gain of $10.2million.

On December 28, 2005 the Company purchased the remaining 50percent share of its Brazilian joint venture, Nordesclor S.A., fromits joint venture partner. The total cash purchase price was $16million. The purchase price is further subject to a final workingcapital adjustment as well as a contingent payment of up to $2.0million in cash based on cumulative earnings over the next two years.

The full-year effective tax rate on income from continuingoperations for 2005 and 2004 was 33 percent and 29 percent,respectively. The impact of other gains increased the effective taxrate on income from continuing operations by 2 percent for 2005.

2006 Outlook

The Company anticipates that sales for the full-year 2006 willincrease by approximately six to eight percent. Earnings per sharefrom continuing operations for the full-year 2006 are forecast to bein the $1.50 to $1.60 per share range. Depreciation and amortizationis estimated to be approximately $45 million. Capital spending isanticipated to be in the $30 to $35 million range. Pension expense isexpected to increase by approximately $5 million and the effective taxrate is assumed to be 35 percent.

The Company expects improved performance in 2006, led by asignificant improvement in the operating margins of its HTH waterproducts business. This business expects results to improve through acombination of price increases, improved customer and sales mix, costreductions and the recently acquired Nordesclor operation. HTH waterproducts is forecasting sales of approximately $460 million andoperating margins are expected to be in the 7 to 8 percent range. Inaddition, the Company expects continued strong demand for the biocidesused in marine antifouling paints, in building products and inantidandruff shampoo markets. Wood protection is expected to benefitfrom increased demand in both the residential and the industrialmarkets, but will continue to be hampered by higher raw materialcosts. Performance products results are expected to be weaker due tohigher raw material and energy costs.

For the first quarter, the Company anticipates earnings per sharefrom continuing operations to be in the $0.10 to $0.15 per sharerange.

"2006 should be another year of improved performance, largelyfueled by our higher operating margins in HTH water products. Thanksto key strategic initiatives executed last year, we have an evenmore-focused portfolio of core biocides businesses and ample resourcesto accelerate their profitable, global growth opportunities," said Mr.Campbell. "By capitalizing on our innovative, chemistry-basedsolutions and market leadership positions, we will deliver enhancedshareholder value."

Note: All references to earnings per share above reflect dilutedearnings per share.

About Arch

Headquartered in Norwalk, Connecticut, Arch Chemicals, Inc. is aglobal specialty chemicals company with more than $1 billion in annualsales. Arch and its subsidiaries have leadership positions in theTreatment and Performance Products segments, where they serve leadingcustomers with forward-looking solutions to meet their chemical needs.Together with its subsidiaries, Arch has approximately 3,000 employeesand manufacturing and customer-support facilities in North and SouthAmerica, Europe, Asia and Africa. For more information, visit theCompany's Web site at http://www.archchemicals.com.

-- Listen in live to Arch Chemicals' fourth quarter 2005 earnings conference call on Thursday, February 9, 2006 at 11:00 a.m. (ET) at http://www.archchemicals.com.

-- If members of the public wish to access Arch's live earnings call in a listen-only mode, dial: (866) 362-5158, passcode 92845283, in the United States, or (617) 597-5397, passcode 92845283, outside the United States.

-- A telephone replay will be available from 12:00 p.m. on Thursday, February 9, 2006 until 6:00 p.m. (ET) on Thursday, February 16, 2006. The replay number is (888) 286-8010, passcode 55289845; from outside the United States, please call (617) 801-6888, passcode 55289845.

Except for historical information contained herein, theinformation set forth in this communication may containforward-looking statements that are based on management's beliefs,certain assumptions made by management and management's currentexpectations, outlook, estimates and projections about the markets andeconomy in which the Company and its various businesses operate. Wordssuch as "anticipates," "believes," "estimates," "expects,""forecasts," "opines," "plans," "predicts," "projects," "should,""targets" and variations of such words and similar expressions areintended to identify such forward-looking statements. These statementsare not guarantees of future performance and involve certain risks,uncertainties and assumptions ("Future Factors"), which are difficultto predict. Therefore, actual outcomes and results may differmaterially from what is expected or forecast in such forward-lookingstatements. The Company undertakes no obligation to update publiclyany forward-looking statements, whether as a result of future events,new information or otherwise. Future Factors which could cause actualresults to differ materially from those discussed include but are notlimited to: general economic and business and market conditions; lackof moderate growth or recession in U.S. and European economies;increases in interest rates; economic conditions in Asia; worseningeconomic and political conditions in Venezuela; changes in foreigncurrencies against the U.S. dollar; customer acceptance of newproducts; efficacy of new technology; changes in U.S. laws andregulations; increased competitive and/or customer pressure; theCompany's ability to maintain and/or increase chemical prices;higher-than-expected raw material costs and availability for certainchemical product lines; an increase in anti-dumping duties on certainproducts; increased foreign competition in the calcium hypochloritemarkets; unfavorable court, arbitration or jury decisions or taxmatters; the supply/demand balance for the Company's products,including the impact of excess industry capacity; failure to achievetargeted cost-reduction programs; capital expenditures in excess ofthose scheduled; environmental costs in excess of those projected; theoccurrence of unexpected manufacturing interruptions/outages atcustomer or company plants; reduction in expected government contractorders; a decision by the Company not to start up the hydratesmanufacturing facility; unfavorable weather conditions for swimmingpool use; inability to expand sales in the professional pool dealermarket; successful integration of the acquisition; and gains or losseson derivative instruments.
Arch Chemicals, Inc.
Condensed Consolidated Statements of Income (a)
(In millions, except per share amounts)
----------------------------------------------------------------------
Three Months Twelve Months
Ended December 31, Ended December 31,
2005 2004 2005 2004
----------------------------------------------------------------------

Sales $278.3 $241.8 $1,305.1 $1,120.9
Cost of Goods Sold 210.6 181.8 953.9 808.0
Selling and Administration 63.7 66.4 266.8 252.6
Research and Development 5.1 4.4 21.2 15.4
Other (Gains) and Losses (b) (15.0) - (14.1) 1.4
Restructuring (c) - - - 1.7
Impairment (d) 0.9 2.9 0.9 2.9
Interest Expense, net 4.6 4.0 19.7 18.6
----------------------------------------------------------------------
Income (Loss) from
Continuing Operations
Before Equity in Earnings
of Affiliated Companies,
Taxes and Cumulative Effect
of Accounting Change 8.4 (17.7) 56.7 20.3
Equity In Earnings of
Affiliated Companies 1.1 1.0 2.9 4.0
Income Tax Provision
(Benefit) 4.5 (8.1) 19.8 7.0
----------------------------------------------------------------------
Income (Loss) from
Continuing Operations
Before Cumulative Effect of
Accounting Change 5.0 (8.6) 39.8 17.3
Income (Loss) from
Discontinued Operations, net
of tax (e) (0.8) 1.9 (1.6) 10.0
Gain (Loss) on Sales of
Discontinued Operations, net
of tax (f) (0.1) (7.2) 2.8 (7.4)
Cumulative Effect of
Accounting Change, net of tax (0.5) - (0.5) -
----------------------------------------------------------------------
Net Income (Loss) $ 3.6 $(13.9) $ 40.5 $ 19.9
======================================================================

Basic Income (Loss) Per Share:
Continuing Operations Before
Cumulative Effect of
Accounting Change $ 0.21 $(0.36) $ 1.69 $ 0.75
Income (Loss) from
Discontinued Operations (e) (0.04) 0.08 (0.07) 0.43
Gain (Loss) on Sales of
Discontinued Operations (f) - (0.31) 0.12 (0.32)
Cumulative Effect of
Accounting Change (0.02) - (0.02) -
----------------------------------------------------------------------
Basic Income (Loss) Per Share $ 0.15 $(0.59) $ 1.72 $ 0.86
======================================================================

Diluted Income (Loss) Per
Share:
Continuing Operations Before
Cumulative
Effect of Accounting Change $ 0.21 $(0.36) $ 1.67 $ 0.74
Income (Loss) from
Discontinued Operations (e) (0.04) 0.08 (0.07) 0.42
Gain (Loss) on Sales of
Discontinued Operations (f) - (0.31) 0.12 (0.32)
Cumulative Effect of
Accounting Change (0.02) - (0.02) -
----------------------------------------------------------------------
Diluted Income (Loss) Per
Share $ 0.15 $(0.59) $ 1.70 $ 0.84
======================================================================

Weighted Average Common Stock
Outstanding - Basic 23.6 23.5 23.6 23.2
Weighted Average Common Stock
Outstanding - Diluted 23.8 23.5 23.8 23.5
----------------------------------------------------------------------

(a) Unaudited.
(b) The fourth quarter and year-to-date 2005 include a pre-tax gain on
the sale of the Planar joint venture of $10.2 million as well as a
pre-tax gain on excess land of $5.8 million. Fourth quarter and
full year 2005 also includes a charge of $1.0 million and $1.9
million, respectively, for a portion of penalties and interest
related to the Brazilian state import tax claim recorded in 2004.
Year-to-date December 2004 includes a charge of $2.1 million for a
Brazilian state import tax claim partially offset by a pre-tax
gain on the sale of a building of $0.6 million.
(c) 2004 restructuring includes employee-related costs for the
hydrazine business of $2.1 million, offset by a reduction of the
prior years' restructuring reserves of $0.4 million.
(d) Fourth quarter 2005 impairment relates to the write-down of land
located in China that the Company will be transferring to the
Chinese government for additional land. Fourth quarter 2004
impairment relates to the write-down of property, plant and
equipment due to the sale of the microelectronic materials
business.
(e) Represents the results of operations of the microelectronic
materials business, net of tax, through the date of the sale.
The 2005 and 2004 results of operations also includes the CMS
business as it is being accounted for as an asset held for sale.
(f) The gain (loss) on sales of discontinued operations, net of tax,
consists of the following:
------------------------------------------------------------------
Three Months Twelve Months
Ended December 31, Ended December 31,
2005 2004 2005 2004
------------------------------------------------------------------
Microelectronic Materials $ - $(1.6) $ - $(1.6)
Hickson organics business (1) (0.1) (6.7) 2.8 (7.3)
Sulfuric Acid (2) - 1.1 - 1.5
------------------------------------------------------------------
Gain (Loss) on Sales of
Discontinued Operations, net
of tax $(0.1) $(7.2) $ 2.8 $(7.4)
==================================================================
(1) 2005 includes the receipt of GBP 1.7 million (approximately
$2.9 million), including interest, related to two outstanding
notes from the sale of the Hickson organics Castleford
operations that were previously reserved for at December 31,
2004, due to the uncertainty concerning the viability of the
purchaser. Fourth quarter and full year 2004 principally
represent a post-closing working capital adjustment related to
the sale of the Hickson organics Castleford operations.

(2) Fourth quarter and full year 2004 primarily represents a tax
refund related to the sale of the sulfuric acid business.

The following table reconciles income and diluted income per share
from continuing operations before cumulative effect of accounting
change to income and diluted income per share from continuing
operations before cumulative effect of accounting change, impairment
and other (gains) and losses to provide comparability to the original
guidance for both the three and twelve months ended December 31, 2005:
----------------------------------------------------------------------
Three Months Twelve Months
Ended December 31, Ended December 31,
2005 2005
----------------------------------------------------------------------

Income EPS Income EPS
---------- ------- ----------- -------

Income from Continuing
Operations Before Cumulative
Effect of Accounting Change $ 5.0 $ 0.21 $ 39.8 $ 1.67
Add: Impairment, net of tax 0.9 0.04 0.9 0.04
Less: Other (Gains) and Losses,
net of tax (9.1) (0.38) (8.5) (0.36)
----------------------------------------------------------------------
Income from Continuing
Operations Before Cumulative
Effect of Accounting Change,
Impairment and Other (Gains)
and Losses $(3.2) $(0.13) $32.2 $ 1.35
======================================================================



Arch Chemicals, Inc.
Condensed Consolidated Balance Sheets (a)
(In millions, except per share amounts)
----------------------------------------------------------------------

December 31, 2005 2004
----------------------------------------------------------------------

Assets:
Cash & Cash Equivalents $ 43.1 $ 74.6
Accounts Receivable, Net (b) 133.1 125.6
Short-Term Investment (b) 68.4 53.3
Inventories, Net 172.0 151.1
Other Current Assets 39.8 37.9
Assets Held For Sale 8.3 15.9
----------------------------------------------------------------------
Total Current Assets 464.7 458.4
Investments and Advances - Affiliated Companies
at Equity 5.7 15.5
Property, Plant and Equipment, Net 191.4 211.6
Goodwill 211.5 192.4
Other Intangibles 140.7 151.2
Other Assets 47.9 70.9
----------------------------------------------------------------------
Total Assets $1,061.9 $1,100.0
----------------------------------------------------------------------

Liabilities and Shareholders' Equity:

Short-Term Borrowings $ 12.0 $ 9.1
Accounts Payable 174.6 160.2
Accrued Liabilities 88.9 108.1
Liabilities Associated with Assets Held For Sale 9.1 12.2
----------------------------------------------------------------------
Total Current Liabilities 284.6 289.6
Long-Term Debt 217.8 215.2
Other Liabilities 194.5 235.4
----------------------------------------------------------------------
Total Liabilities 696.9 740.2
Commitments and Contingencies
Shareholders' Equity:
Common Stock, Par Value $1 Per Share,
Authorized 100.0 Shares:
23.6 Shares Issued and Outstanding
(23.4 in 2004) 23.6 23.4
Additional Paid-in Capital 422.2 418.2
Retained Earnings 36.4 14.8
Accumulated Other Comprehensive Loss (117.2) (96.6)
----------------------------------------------------------------------
Total Shareholders' Equity 365.0 359.8
----------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $1,061.9 $1,100.0
----------------------------------------------------------------------

(a) Unaudited.
(b) In June 2005, the Company entered into a new securitization
program through which the Company sold certain accounts
receivable. As a result, accounts receivable have been reduced,
and the Company's retained interest in such receivables has been
reflected as a short-term investment. As of December 31, 2005, and
2004, the Company had not sold any participation interests in such
accounts receivable. See Form 10-K for additional information.



Arch Chemicals, Inc.
Condensed Consolidated Statements of Cash Flows (a)
(In millions)
----------------------------------------------------------------------

Twelve Months Ended December 31, 2005 2004
----------------------------------------------------------------------
Operating Activities:
Net Income $ 40.5 $ 19.9
Adjustments to Reconcile Net Income to Net Cash and
Cash Equivalents Provided by (Used in) Operating
Activities:
(Income) Loss from Discontinued Operations 1.6 (10.0)
(Gain) Loss on Sale of Discontinued Operations (2.8) 7.4
Cumulative Effect of Accounting Change 0.5 -
Other (Gains) and Losses (14.1) 1.4
Equity in Earnings of Affiliates (2.9) (4.0)
Depreciation and Amortization 46.7 46.9
Deferred Taxes 7.9 (3.6)
Restructuring - 1.7
Impairment 0.9 2.9
Restructuring Payments (1.9) (4.8)
Changes in Assets and Liabilities, Net of Purchase
and Sale of Businesses:
Accounts Receivable Securitization Program - -
Receivables (18.0) (0.3)
Inventories (26.5) (7.4)
Other Current Assets (1.1) (1.7)
Accounts Payable and Accrued Liabilities 4.8 20.2
Noncurrent Liabilities (b) (31.4) 1.9
Other Operating Activities 1.9 5.8
----------------------------------------------------------------------
Net Operating Activities from Continuing
Operations 6.1 76.3
Change in Net Assets Held for Sale 0.3 11.8
----------------------------------------------------------------------
Net Operating Activities 6.4 88.1
----------------------------------------------------------------------
Investing Activities:
Capital Expenditures (18.3) (18.3)
Businesses Acquired in Purchase Transaction, net of
cash acquired (19.1) (215.8)
Proceeds from sales of businesses, net 8.8 158.5
Proceeds from sales of land and property 6.0 0.9
Other Investing Activities (2.3) (0.1)
----------------------------------------------------------------------
Net Investing Activities (24.9) (74.8)
----------------------------------------------------------------------
Financing Activities:
Long-Term Debt Borrowings 119.3 278.0
Long-Term Debt Repayments (111.6) (278.0)
Short-Term Borrowings (Repayments) 1.2 7.8
Dividends Paid (18.9) (18.5)
Other Financing Activities 2.3 4.2
----------------------------------------------------------------------
Net Financing Activities (7.7) (6.5)
----------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash and Cash
Equivalents (5.3) 3.0
----------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash
Equivalents (31.5) 9.8
Cash and Cash Equivalents, Beginning of Year 74.6 64.8
----------------------------------------------------------------------
Cash and Cash Equivalents, End of Year $ 43.1 $ 74.6
----------------------------------------------------------------------

(a) Unaudited.
(b) The cash used by Noncurrent Liabilities includes $36.2 million for
voluntary cash contributions for the U.S. pension plan.



Arch Chemicals, Inc.
Segment Information (a)
(in millions)
----------------------------------------------------------------------

2005
----------------------------------------------------------------------
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
----------------------------------------------------------------------
Sales:
Treatment Products:
- HTH Water Products $ 90.8 $183.2 $ 95.8 $ 63.3 $ 433.1
- Personal Care and
Industrial Biocides 69.8 70.6 66.9 65.4 272.7
- Wood Protection and
Industrial Coatings 87.1 101.3 89.7 80.3 358.4
----------------------------------------------------------------------
Total Treatment Products 247.7 355.1 252.4 209.0 1,064.2
Performance Products:
- Performance Urethanes 48.9 50.9 59.0 63.2 222.0
- Hydrazine 4.7 5.3 2.8 6.1 18.9
----------------------------------------------------------------------
Total Performance Products 53.6 56.2 61.8 69.3 240.9
----------------------------------------------------------------------
Total Sales $301.3 $411.3 $314.2 $278.3 $1,305.1
----------------------------------------------------------------------

Segment Operating Income
(Loss) (c):
Treatment Products:
- HTH Water Products (d) $ - $ 23.5 $ (2.3) $(11.5) $ 9.7
- Personal Care and
Industrial Biocides (f) 12.5 10.8 11.5 9.7 44.5
- Wood Protection and
Industrial Coatings 1.3 6.6 6.0 1.5 15.4
----------------------------------------------------------------------
Total Treatment Products 13.8 40.9 15.2 (0.3) 69.6
Performance Products:
- Performance Urethanes
(d, g) 0.9 3.3 5.3 9.7 19.2
- Hydrazine (d) (0.7) 0.4 (1.6) 1.0 (0.9)
----------------------------------------------------------------------
Total Performance Products 0.2 3.7 3.7 10.7 18.3
----------------------------------------------------------------------
14.0 44.6 18.9 10.4 87.9
General Corporate
(Expenses) Income (h, i) (4.1) (4.6) (3.6) 4.6 (7.7)
----------------------------------------------------------------------
Total Segment Operating
Income, including Equity
in Earnings of Affiliated
Companies 9.9 40.0 15.3 15.0 80.2

Impairment - - - (0.9) (0.9)
Equity In (Earnings)
Losses of Affiliated
Companies (0.9) 0.3 (1.2) (1.1) (2.9)
----------------------------------------------------------------------
Total Operating Income 9.0 40.3 14.1 13.0 76.4
Interest Expense, net (4.4) (5.8) (4.9) (4.6) (19.7)
----------------------------------------------------------------------
Total Income from
Continuing Operations
before Equity in Earnings
of Affiliated Companies,
Taxes and Cumulative
Effect of Accounting
Change $ 4.6 $ 34.5 $ 9.2 $ 8.4 $ 56.7
----------------------------------------------------------------------


2004
----------------------------------------------------------------------
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
----------------------------------------------------------------------
Sales:
Treatment Products:
- HTH Water Products (b) $ 70.0 $162.5 $ 83.0 $ 50.5 $ 366.0
- Personal Care and
Industrial Biocides (b) 41.6 65.8 65.5 61.7 234.6
- Wood Protection and
Industrial Coatings 86.1 95.5 86.2 83.3 351.1
----------------------------------------------------------------------
Total Treatment Products 197.7 323.8 234.7 195.5 951.7
Performance Products:
- Performance Urethanes 33.4 32.6 37.6 41.4 145.0
- Hydrazine 9.2 5.6 4.5 4.9 24.2
----------------------------------------------------------------------
Total Performance Products 42.6 38.2 42.1 46.3 169.2
----------------------------------------------------------------------
Total Sales $240.3 $362.0 $276.8 $241.8 $1,120.9
----------------------------------------------------------------------

Segment Operating Income
(Loss) (c):
Treatment Products:
- HTH Water Products
(b, d) $ 2.3 $ 27.9 $ (6.9) $(16.1) $ 7.2
- Personal Care and
Industrial Biocides
(b, e, f) 8.3 12.9 16.9 12.0 50.1
- Wood Protection and
Industrial Coatings 3.2 10.4 7.1 3.4 24.1
----------------------------------------------------------------------
Total Treatment Products 13.8 51.2 17.1 (0.7) 81.4
Performance Products:
- Performance Urethanes
(d) (3.4) (1.9) (2.0) 2.1 (5.2)
- Hydrazine (d) 1.4 (1.3) (1.3) (1.4) (2.6)
----------------------------------------------------------------------
Total Performance Products (2.0) (3.2) (3.3) 0.7 (7.8)
----------------------------------------------------------------------
11.8 48.0 13.8 - 73.6
General Corporate Expenses
(i) (4.3) (6.6) (5.4) (9.8) (26.1)
----------------------------------------------------------------------
Total Segment Operating
Income (Loss) including
Equity in Earnings of
Affiliated Companies 7.5 41.4 8.4 (9.8) 47.5

Restructuring - (1.7) - - (1.7)
Impairment - - - (2.9) (2.9)
Equity In Earnings of
Affiliated Companies (1.1) (0.7) (1.2) (1.0) (4.0)
----------------------------------------------------------------------
Total Operating Income
(Loss) 6.4 39.0 7.2 (13.7) 38.9
Interest Expense, net (3.9) (5.4) (5.3) (4.0) (18.6)
----------------------------------------------------------------------
Total Income (Loss) from
Continuing Operations
before Equity in Earnings
of Affiliated Companies,
Taxes and Cumulative
Effect of Accounting
Change $ 2.5 $ 33.6 $ 1.9 $(17.7) $ 20.3
----------------------------------------------------------------------

(a) Unaudited.
(b) Includes the results of the acquired pool & spa and protection &
hygiene businesses from the date of acquisition on April 2, 2004.
(c) Includes equity in earnings (losses) of affiliated companies.
(d) Third quarter 2005 includes an additional charge for a portion of
penalties and interest related to the Brazilian state import tax
claim of $0.2 million and $0.7 million for the water products and
performance urethanes businesses, respectively. Fourth quarter
2005 includes an additional charge for a portion of penalties and
interest related to the Brazilian state import claim of $0.2
million, $0.7 million and $0.1 million for the water products,
performance urethanes and hydrazine businesses, respectively.
Third quarter and year-to-date 2004 include a charge for a
Brazilian state import tax claim of $0.4 million, $1.6 million and
$0.1 million for the water products, performance urethanes and
hydrazine businesses, respectively.
(e) Third quarter and year-to-date 2004 include a $0.6 million gain on
the sale of a building for the personal care business.
(f) Second quarter 2004 includes $3.0 million and third quarter 2004
includes $3.1 million of a $6.1 million settlement for a favorable
judgement obtained against a former owner of an acquired company.
(g) Fourth quarter and year-to-date 2005 includes a pre-tax gain on
excess land of $5.8 million located in Brandenburg, Kentucky.
(h) Fourth quarter and year-to-date 2005 includes a $10.2 million
pre-tax gain on the sale of the Planar Solutions joint venture.
(i) Includes certain general expenses of the corporate headquarters
that are not allocated to the business segments, including costs
associated with the Company's accounts receivable securitization
program and the results of the Company's Planar Solutions joint
venture.